Many hedge fund investors could recoup last year's losses if current trends continue, according to US firm  BarclayHedge after a fifth month of hedge fund gains.

The Barclay Hedge Fund Index recorded a 3.11 per cent rise in July which, added to the previous four percentage gains, results in a 16.23 per cent increase since the beginning of March, the firm said.

“During July, we continued to see improving liquidity, a tightening of credit spreads, and a decrease in risk aversion among investors,” said Sol Waksman, founder and president of BarclayHedge, which provides data on hedge funds, funds of hedge funds, and managed futures programmes.

Indices recording gains this year are: the Barclay Emerging Markets Index, which is up 28.23 per cent; the Event Driven Index, up 18.65 per cent; Equity Long Bias, rising 18.37 per cent, and the Multi-Strategy Index, which has grown 16.91 per cent.

The Barclay Fund of Funds Index is up 5.84 per cent year-to-date, with 1.51 per cent growth in July.

In terms of July gains, Emerging Markets rose 5.52 per cent, Equity Long Bias 18.37 per cent, the Multi Strategy Index 3.46 per cent, while the Barclay Convertible Arbitrage Index went up by 6.99 per cent.

Convertible Arbitage has been gaining value since before the beginning of 2009. The index has added 35.38 percent this year which contrasts to 2008’s loss of 27.66 per cent.

In terms of July losses, two of the 18 indices failed to yield profit. The Equity Short Bias Index lost 8.08 per cent, down 13.22 per cent in 2009, and Equity Market Neutral fell 0.14 per cent - a loss of 0.67 per cent year-to-date.

Formerly The Barclay Group, BarclayHedge tracks more than 6,000  funds and futures programmes, and updates 18 proprietary hedge fund indexes and eight managed futures indexes.