Hedge funds successfully capitalised on opportunities across most global markets in January as equities, credit and commodities markets rallied, according to the Dow Jones Credit Suisse Hedge Fund Index monthly commentary.

The Index posted positive performance in January, up 0.69%, with six out of ten strategies in the index posting positive performance for the month.

Convertible Arbitrage was the best performing sector in January, up 2.16% for the month. Managers gained from a valuation richening in the space, driven in part by large institutional investors who were seeking to increase their equity exposure through converts.

Equity Market Neutral managers also posted positive performance of 1.79%, as managers were able to capture profit opportunities as a result of sector rotations and stock reversals in the equity markets.

Event Driven managers continued to post positive performance in January, finishing up 1.80% for the month. Performance was primarily driven by core long positions in both special situation equities and distressed credit investments, due to positive developments in key events combined with a rally in post-reorganisation equities.