Macro hedge funds outperform the rest with double-digit returns

These so-called macro hedge funds, which attempt to identify extreme valuations in stock markets, interest rates, foreign exchange rates and commodities, have shown returns of more than 12 per cent this year, outperforming the S&P 500 index by about 17 per cent.

The performance, measured by data provider Hedge Fund Research, is in sharp contrast to most other types of hedge funds. Merger arbitrage managers, who bet on the price movements of companies in the run up to mergers, have posted returnsof just 2.3 per cent in the year to date.

Several other hedge fund strategy groups have made losses this year. The worst performing hedge funds of the year so far are so-called relative arbitrage funds, which aim to exploit pricing anomalies between assets. These funds are down 6.5 per cent over the year to date.