Australia's equity based Absolute Return funds posted positive performance for investors of 4.51% for the month of July, taking 2009 year to date performance to 12.69%, closely matching the ASX200 accumulation index which has returned 14.03% YTD. Over a 12 month period the ASX has still lost 14.73% whilst equity based absolute return funds are down just 1.90%.

For detailed analysis of performance for each strategy, industry comment and ranking tables, please open the attached .pdf file.

ATTACHED FILESAugust absolute return and hedge fund review (pdf format)

Merricks Multi Strategy fund has returned +0.8% in July to take 2009 YTD returns to 3.3%.

The Fund, which was established in January 2008, invests in three lowly correlated strategies, Event Driven, Market Neutral and Soft Commodities (agriculture) focused on the developed markets in Asia. All three strategies produced positive returns in July.

Macquarie's MQ Asian Long Short fund has reported a 4.75% gain for the month as the region's markets continued to rally in July, taking their 12 month performance to +2.63%. YTD performance for 2009 is +9.52%.

The manager noted that the fund only lost money on two days during the month, with the largest loss just 0.1%, and recorded gains for each of the first 9 days when the markets were in negative territory.

Annualised performance for the Cayman based fund, which has US$101m in FUM, is +11.57% since inception in October 2005.

The MQ Asian fund uses a quantitative strategy to invest in over 600 individual positions across 12 countries in the Asian region.

Platinum Asset Management, Australia's largest absolute return manager with over $14 billion in FUM, records positive returns for all eight underlying funds in July.

The $3bn Platinum Asia Fund returned 8.40% for the month, to bring 2009 YTD performance to +35.5%, 12 month returns to 19.85% and annualised returns since March 2003 to 23.16%.

Best performing of Platinum's funds for the month was the European Fund which returned 8.50%, to bring 2008 YTD to +15.07%, 12 month returns to +2.21% and annualised returns since inception in July 1998 to 11.15%.

Platinum's largest fund, the International Shares Fund, with $7.6 bn in FUM returned +6.4% for the month, +13.62% in 2009 YTD, +25.79% in the past 12 months, and +14.74% annualised since inception in May 1995.

Shareholders in the ASX listed Platinum Asset Management (ASX: PTM) should also be happy with the results as the manager's performance fees of 16.5% above respective MSCI hurdles are not subject to any high water mark.

Pengana Capital, which manages a range of strategies both in Australia and offshore has produced positive returns from all seven of its underlying absolute return funds in July.

Best performing of the funds was the Pengana Global Resources fund which returned 8.60% for the month, to take YTD performance to +22.78% after a disappointing 2008, and annualised returns since March 2007 to +8.86%.

Pengana's Australian Equity long/short fund also notched up a respectable 8.50% in July, to take 2009 YTD returns to +24.52%, -4.09% over the past 12 months, and 9.29% annualised since inception in May 2004.

Excalibur Funds Management AUD/JPY FX strategy lost 0.11% in the last few days of July, having been in positive territory up until that point. The fund remains +3.15% in 2009 YTD, with 12 month performance +5.12% and an annualised performance since inception in July 2006 of +19.09%.

The fund's strategy predominantly involves short term technical contrarian signals in the Australian and New Zealand currencies and their crosses. the strategy has a focus on risk management and capital preservation with particular attention given to the relationship between volatility and leverage.

In what the manager described as an extremely difficult month the fund also reported an increase in FUM to US$79m.

Blue Fin Capital, which uses short term quantitative trading models for their FX and Commodity managed accounts, maintained returns for 2009 YTD in positive territory for July, although returns for the month were largely flat.

The FX strategy which has been operating since January 2002 and has returned an annualised 9.53% since that time, is +3.94% YTD in 2009, and +12.02% over the past 12 months.

The commodity strategy, established in April 2007, has returned 11.33% annualised, is +0.48% in 2009 YTD, and +0.82% over the past 12 months

View the detailed profile for Blue Fin's Managed Commodities Account.

View the detailed profile for Blue Fin's Managed FX Account.

Fortitude Capital, which has the extraordinary record of having not produced a negative return for the last 19 months, has returned +0.55% for July to take YTD performance to +4.13% and +12.1% for the past 12 months.

Fortitude is broadly a market neutral fund, achieving this via multiple strategies across ASX listed securities. In July's strong market (the largest percentage gain in the market since December 1993) the manager's long gamma derivative overlay struggled, but this was more than offset by M&A activity as opportunities arose from corporate Australia's recapitalisation process which has now spread to the smaller listed sector.

Since March 2005 the fund has only suffered 3 negative months with the largest drawdown being -0.50% in December 2005, reflecting the manager's major focus on risk management and capital preservation.

Visit Fortitude Capital's Absolute Return Trust fund profile.

The Lanterne Arran Fund has returned 0.04% in July to bring 2009 YTD to 23.72%.

The manager noted that cyclical stocks, which have outperformed the defensive sector as global growth forecasts have been revised up, are looking overbought in the short term as companies report annual results in August. Looking beyond that, they noted that the outlook for cyclicals, particularly resource stocks remains positive as the global de-stocking cycle ends.

The Arran Fund is Lanterne's offshore fund, launched in August 2004 and has funds under management of US$30m out of Lanterne's total FUM of US$90m. Both the Arran and Ailsa (onshore) funds use an actively managed long short trading style investing primarily in ASX100 stocks. Top down macro themes and bottom up fundamental research combine with active trading to construct portfolios designed to provide returns regardless of market conditions.

Lanterne's annualised return since 2002 is 12.63%.

Commodity Strategies Ltd, who operate a systematic trading strategy across both a long/short and long only portfolio, made significant gains across both in July with broad based attribution, particularly in energy and metals trading. The Long only portfolio has gained 16.98% in 2009 YTD, and has an annualised return of 12.82% since inception in December 1999. The long/short portfolio, which was launched in October 2007, has gained 11.29% in 2009 and has returned an annualised 24.27% over that period.

Visit Commodity Strategies' Long Only Programme profile.

Visit Commodity Strategies' Long/Short Programme profile.