The Apeiron Global Macro Fund posted a return of -0.43% in December, however was up +18.83% for 2008.

The loss in December was attributed to losses in the fund's foreign exchange and commodity strategies, amidst lightly traded markets. The fund exited the US dollar markets in early December due to market volatility and the lack of market direction going into the Christmas break. The Apeiron Global Macro Fund, managed by Redwood Capital Group, utilises strategies in futures and foreign exchange markets, and seeks to define investment themes within a fundamental economic framework.

Playtpus Capital Management's Asian Equities Fund, which commenced investing in September 2008, was down -0.87% in December but up +1.42% for 2008. Over the same period the MSCI Pacific Index returned -29.31%.

The negative return in December was attributed to the fund's net short weighting, as well as stock specific issues, however assets under management increased during this period. The fund will continue with the short positioning of its portfolio given the ongoing downward trends in Asian markets.

Platypus' other fund, the Platypus Australian Long/Short Fund, also recorded a loss in December (-0.72%) and was down -7.20% in 2008. December was notable for the decrease in market volatility, however there was significant movement in individual stocks. The fund remains heavily invested in cash going into 2009, reflecting current market conditions.

The Antares Lodestar Absolute Return Trust returned -1.44% in December, compared to the Australian sharemarket which lost -0.3% in the same period. The fund outperformed the market for most of the month, but was adversely impacted by a late market rally leading into the New Year.

Positive returns were generated from strategies in Challenger Financial, Felix Resources and Centennial Coal, offset by poor performance in Clough, BHP and Bradken. Overall the fund returned -23.6% in 2008, most of the loss occurring in the last quarter. The fund lowered its market exposure towards the end of December, remaining cautious for 2009, although the manager has noted a number of positive indicators in its outlook.

Two of Absolute Asset Management's three funds recorded positive returns in December. The Absolute Macro Diversified Fund was up +1.45% (-23.53% in 2008) while the Asian REIT Property Fund gained +1.23% (down -49.38% in 2008 including dividend). The Absolute Trading 1 Fund was down -0.80% in December (+5.54% in 2008).

The manager noted that there are some signs the long decline in REIT values was coming to an end, noting positive indicators in Hong Kong and Singapore property markets. Australian REITs however continued to underperform, and the fund believes a reduction in exposure to the Australian sector may be warranted.

The Absolute Macro Diversified Fund ended 2008 strongly after a difficult year, mostly due to positive returns in emerging markets and China equities, and in gold. The fund will look to reduce cash balances in the medium term as volatility decreases. Unlike some other hedge funds, the fund remains open to new investment and redemptions during this difficult period.

Although it was down in December, the Absolute Trading 1 Fund was positive for 2008. The fund profited from closing out its short NZD position, but lost on other positions due to the recent strength of the US dollar.

The Arnott Opportunities Fund, a Pan Asian Equity Long/Short fund, has finished 2008 with a positive performance of +0.38% for December, bringing the total return for 2008 to +1.84%.

The fund reduced exposure in December ahead of significant redemptions which saw Arnott's FUM fall by approximately 35% to US$535 million, all of which were expected to be paid before the end of January. The manager also flagged that 2009 would see a different outlook and implementation towards shorter term trading opportunities around stock specific events.

Arnott's redemption experience is in line with many other successful and positively performing funds as investors and Fund of Funds have reduced their exposure to managers with both good performance and liquidity to shore up poorly performing investments elsewhere.

The Herschel Absolute Return Fund, an Australian equity long/short fund, reported a December return of +2.04% and an overall 2008 return of +0.30%.

The All Ordinaries Accumulation Index in comparison returned -0.08% in December and was down over 40% in 2008. The fund increased its net equity market exposure, and participated in a number of capital raisings in December. Positive returns from QBE, Crown and Tatts Group were offset by losses on positions on Incitec, CSL and Telstra.

Zone Capital finished the year with a positive return in December of 0.5% after several months of strong gains. Over the year the fund gained a total of 17% compared with the S&P 500 which lost around 37%.

The manager said that, while the December result was weaker than the 4.2% gain achieved in November, it was a month of consolidation and they were happy to end the year in the black.

Agora Asset Management's Absolute Return Fund was up +1.25% in December, while the its Leveraged Absolute Return Fund was up +1.38% in a flat market. The 2008 return for these funds was -12.97% and -11.77% respectively.

Both funds significantly outperformed the S&P/ASX 200 Accumulation Index (-38.4%) in 2008, with most of the losses on the Absolute Return Fund coming in January (-9.2%). This means both funds have retained approximately 90% of their capital base, which will enable them to both recover their losses more quickly and invest in more opportunities in the coming months. Much uncertainty remains however on economic and market conditions in 2009, which will impact the funds' strategies.

The Allard Growth Fund (AGF) returned +9.3% in December, however was still down for 2008 by -28.8%, and the Allard Investment Fund (AIF) was up +4.5% in December, but down -1.9% for the financial year-to-date.

Both funds outperformed the MSCI A/P ex-Japan (A$) Index, which returned +0.8% in December and -20.5% financial year-to-date. The AGF and AIF are both equity long only absolute return funds, that use a combination of qualitative and quantitative processes to identify investments in the Asian region.

AR Capital Management's (ARCM) Ascot Fund ended 2008 on a positive note, recording a December return of +0.51%, bringing annual performance to +6.02%.

ARCM noted negative returns in banking stocks, and the poor handling of the Commonwealth Bank capital raising, as a major drag on performance in December. This offset positive returns in Paperlinx (long and short), Australian Agriculture and JB Hi-Fi (both long), amongst others. ARCM remains cautious for 2009, particularly in taking long positions, believing growth and earnings estimates will continue to be scaled back.