In December, the stock market ended the year with another gain of 1.93 per cent and implied volatility of 21.68 per cent was at its lowest level since May 2008, according to a report by Edhec Risk Institute.

With a remarkable annual return in 2009 of 26.5 per cent, the S&P Index recovered half the losses of the disastrous previous year which saw a loss of 37.0 per cent.

On the bond market, regular bonds registered their first loss since February, down 1.63 per cent, but remained at a higher level than their pre-crisis peak of February 2008.

On the other hand, convertible bonds recorded a full year of monthly gains, up 1.45 per cent, managed an unprecedented annual performance of 36.8 per cent and reached their level of May 2008.

The commodities market achieved a fourth month of significant gains, rising 2.35 per cent. However, its remarkable return since February 2009 of 56.0 per cent only represents one-third of its losses after June 2008.

The dollar scored well, rising three per cent, and made up for the three previous months. The credit spread rose again by 2.33 per cent for a ninth consecutive month.

The good results of risky bonds and the increasing credit spread kept convertible arbitrage on the rise with a gain of 2.18 per cent. With a full year of substantial monthly profits, the strategy scored a yearly gain of 46.9 per cent which made up for the 2008 losses of 25.6 per cent, and clearly outperformed the S&P.

Similarly, both distressed securities (+3.65 per cent) and emerging market (+2.32 per cent) strategies registered a tenth consecutive month of sound profit, and clearly outperformed (respectively +30.9 per cent and +37.9 per cent) the stock market over the year.

After a year of wavering monthly performances, the CTA Global strategy ended on a significantly negative note of 2.75 per cent which turned its annual result into a loss of 2.13 per cent.

Conversely, the equity market neutral strategy scored positively, up 0.84 per cent, and secured a yearly gain of 5.20 per cent in line with the pre-crisis performances.

The event driven (+2.57 per cent) and long/short equity (+1.99 per cent) strategies benefited from the stock market performance and both registered significant gains. Over the year, reflecting their correlation with the stock market, both strategies achieved annual performances (respectively +26.0 per cent and +20.2 per cent) that were comparable to but slightly below the S&P.

Overall, the funds of funds strategy registered a modest gain of 0.70 per cent and exhibited a yearly performance of 10.7 per cent which was clearly below that of the stock market.