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The Lyxor Global Hedge Fund index, an investable index based on Lyxor's hedge fund platform which tracks the overall hedge fund universe, was up 2.1% Lyxor reportedin a corporate communication that the index is up now 2.2% since the beginning of the year.

Lyxor notet that risk appetite further increased in May, fuelling the rally across all asset classes. Improving liquidity and trading conditions are clearly helpful to all Fixed Income related strategies. Spreads continued to tighten, providing an additional push for Long/Short credit (+11.3% this month) and Convertible Arbitrage funds (+1.1%). Fixed income players (+1.9%) reaped the benefits of higher volatility on Bond markets.

Discretionary global macro managers were also able to play these drastic movements in the bond market, both across the curve and across regions. As a whole Global Macro funds were up by 1.5% in May.

As for directional trading systems, the gap that was observed since March between long and high frequency models widened further. While high frequency strategies are up by 5.1% this month, long term models record a -1% loss. Not only has their positioning (short equities, long interest rate futures) been wrong-footed, but markets have become somewhat range bound.

In the equity linked segments, long only funds reaped the benefits from the market rally (+10.3% Mtd). Variable bias managers, who remain defensively positioned, posted a 0.6% gain.

Event driven funds also profited from the......................

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