Credit Suisse/Tremont Hedge Fund index poised to be up 1.29% in April

By Jennifer Chiou

New York, May 8 - The Credit Suisse/Tremont Hedge Fund index is estimated to finish up 1.29% in April, with 55% of assets reporting, according to a news release.

Difficult macro data such as the International Monetary Fund's forecasts for $4 trillion in global write-downs over the next two years, along with reports of global gross domestic product contractions of 6.3% in the fourth quarter of 2008, did not dampen the optimism in global equity markets in April, the release added.

Europe's markets rose by a record 12.9%, a monthly record since the start of the FTSE Eurofirst 300 in 1997, the release said.

Most stock markets worldwide had similar rallies, with particularly strong performance in Brazil, Russia, India and China, the release noted. Although a number of Long/Short Equity managers added to their long positions to seek to harvest the upside of the rallies, many managers maintained their beta exposures at a relatively low level and remained defensively positioned, resulting in lower returns relative to equity indexes.

The threat of a global influenza epidemic and the Chrysler bankruptcy did not appear to impede the rallies, according to the release.

Convertible Arbitrage is extending its winning streak to four months with a strong 5.1% performance, as it continued its recovery from the severe devaluations in the last quarter of 2008, the release noted. The strategy remains the top performer in the index year-to-date in 2009.

Fixed Income Arbitrage is also looking to post a strong month at 2.8%, with the macro environment allowing for carry trades, which in the fourth quarter of 2008 were derailed as traditional relationships deteriorated.

Global Macro had its first negative performance in six months, as quant managers struggled and diversified managers posted marginally better performance, according to the release, which noted that overall, managers avoided directional risk and traded tactically in commodities, currencies, sovereign yield curves and, to a lesser extent, equities.

Hedge funds with exposures to commodities were positively impacted overall by improving commodity markets with cotton rising to its highest levels since October and crude oil rising for a third monthly gain, the release added. Copper rose by 9.7% for the month, resulting in four months of consecutive gains, in part due to demand in China driven by the country's $586 billion stimulus program.

Credit Suisse Tremont Index LLC is a New York-based joint venture company of Credit Suisse Index Co., Inc., a subsidiary of Credit Suisse Co., Inc., and Tremont Group Holdings, Inc.

Returns

Index/category April March

Credit Suisse/Tremont Hedge Fund index 1.29% 0.65%

Convertible Arbitrage 5.14% 1.14%

Dedicated Short Bias Negative 10.15% Negative 5.47%

Emerging Markets 4.03% 2.24%

Equity Market Neutral 1.99% 1.10%

Event Driven 1.37% 0.16%

Distressed 1.53% 0.12%

Event Driven Multi-Strategy 1.29% 0.16%

Risk Arbitrage Negative 0.38% 1.65%

Fixed-Income Arbitrage 2.81% 1.74%

Global Macro Negative 0.21% 0.03%

Long/Short Equity 2.45% 1.86%

Managed Futures Negative 3.48% Negative 2.18%

Multi-Strategy 2.85% 0.38%

MSCI World 10.90% 7.24%

Barclays Capital Aggregate Bond index 0.90% 2.30%

DJ-UBS Total Return Commodities index 0.73% 3.60%

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