The Credit Suisse/Tremont Hedge Fund Index lost 2.76% in May, its lowest performance since November 2008. The monthly commentary offers insight into May hedge fund performance. Some key findings from the report include:

• Nine-out-of-ten strategies in the Index posted negative returns in May as market volatility increased amid continued European sovereign risk fears.
  

• Dedicated Short Bias gained 5.84% and was the only strategy to post positive returns for the month. This positive performance was characteristic for the short-oriented strategy which typically outperforms when markets are down.
  

• Global Macro was the second-best performer, finishing down 0.63% for the month as managers benefited from their ability to perform tactical trades in primarily liquid instruments.
  

• Fixed Income Arbitrage also performed well relative to other strategies as managers continued to reduce their risk and leverage levels while staying active in the market.
  

• Directional strategies largely struggled to find profitable positions amid the market volatility and the largest drag on performance was caused by exposure to cyclical sectors.