Hedge fund sap is rising and, according to Hedge Fund Research's flash figures, hedge funds were up 3.8% in April 2009, with an aggregate gain of 4.2% for the year-to-date.

Better up than down, but let's not pop the champagne just yet. With markets up this year, absolute returns might have be obtained more cheaply if an investor had opted for a simple long-only exchange-traded fund. Underperforming a bull market and outperforming a bear market might be an acceptable return profile for some investors, but it's no cause for euphoria.

Looking closer, emerging market hedge fund indices had the best jump in April, with Asia ex-Japan up by 8.6% for the first four months. The convertible arbitrage index is up 18% for the year, and the energy and basic materials index is up 12.8%, making those sectors the top two performers.

In negative territory are the short-bias managers, which are down 5.4% so far for 2009, followed by macro managers.

Many hedge funds have maintained caution and are retaining low net exposures. The corollary to this is that they are missing a large slice of the bounce except those that have bitten the bullet and moved into a more long-bias mode. However, some who tried to pick bottoms in late-2008 got caught out, so it is a hard call to make.

Listening to hedge fund managers talking at present, virtually to a man they are saying that the current jump in the markets is a bear market rally and it is a false dawn. If they really believe this, perhaps they should put some money behind those convictions and start shorting these markets. Such a gambit could turn their silent spring into a sunny summer.