"This trend has become very strong since December," says Eric Goodbar, managing director and hedge fund strategist, Mellon Capital Management. "Before December, the behavior of these asset classes was driven by extreme fear in the marketplace. While the return to fundamentals has benefited relative value strategies, strategies focused on momentum have generally not benefited from this trend. We have seen substantial divergence as relative value funds have significantly outperformed other quantitative trend-based classes such as commodity trading advisers."

Relative value investors are willing to bear some level of risk for an appropriate reward. They typically base their decisions on the expected returns from stocks, bonds and currencies and often invest in these asset classes throughout the world.

CTAs are more likely to add value when prices move without regard to fundamental data. This often happens when stress events hit the markets and investors shed risk taking exposures - pushing aside the knowledge about expected returns from stocks, bonds and currencies.

From 31 December 31 through 31 May 2009, the HFRI Relative Value (Total) Index, which measures the performance of relative value funds, has returned positive 11.79 per cent versus negative 0.95 per cent for the Barclay CTA Index, which measures the performance of CTA funds, and positive 2.96 percent for the performance of US equities as measured by the Standard & Poor's 500 Index.