Global hedge funds posted small gains in February as many prominent managers steered clear of stocks and bet against Europe's common currency, analysts at Bank of America Merrill Lynch said.

The average hedge fund gained 0.34 percent last month, according to preliminary data cited by the bank's analysts in a research note issued on Monday.

The modest increase helped offset tiny gains seen at the start of the year, leaving hedge fund industry returns flat for the first two months of 2010.

Hedge funds are not required to release their returns and so any indication of performance is closely followed. Later this week several other firms that track performance and flows are expected to release their numbers.

Overall, hedge funds are still cautious on equities, but appear to have returned to commodities, the analysts wrote, adding that hedge funds continue to buy energy and metals during the last week of February while also adding to their bearish position on the Euro.

The euro has lost roughly 5.25 percent against the dollar this year. According to the Wall Street Journal, managers at Soros Fund Management, SAC Capital Advisors and Greenlight Capital were betting against the euro.

Already during the fourth quarter George Soros's hedge fund more than doubled its bet on the price of gold.