Hedge funds gained 1.43% in February, according to the CSFB/Tremont Hedge Fund Index.

And, the shorts were the big winner, according to Oliver Schupp, president of Credit Suisse First Boston Tremont Index LLC.

“The dedicated short sub strategy reported the strongest return for the second month in a row, making it the highest sub strategy year-to-date, up 10.59%,” said Schupp.

“Emerging markets managers also reported a very positive month, aided by strong emerging equity markets in addition to generally positive emerging market bonds,” Schupp added. “In terms of currencies, managers reported profits from trades involving long emerging market currencies versus short G10 currencies.”

“The long/short equity sub strategy experienced a good month as European and Asian managers generally posted strong returns, and in the U.S. the energy and homebuilder sectors contributed positively,” added Robert Schulman, co-CEO of Tremont Capital Management Inc. “The convertible arbitrage sub strategy suffered due to a continued lack of new convertible issuance and low volatility.”