Credit hedge funds posted their smallest gains for over a year last month, amid hints that the US Federal Reserve could cut back its bond-buying in the near future.

Credit strategies gained a meagre 0.09% during May, taking gains for the first five months of the year to 3.90%, according to figures from data provider eVestment published yesterday. The average hedge fund gained 0.68% in May and is up 4.6% this year, the report said.