The BlackRock Asset Allocation Alpha Fund posted a negative return for the second straight month, down -2.54% in April. The Fund has been hurt by the ongoing rally in global equity markets, despite the abundance of negative news still in circulation.

The most significant detractor from performance for April were the Fund's equity/cash positions (mostly short positions on US equities) and currency strategies (primarily short Australian and Canadian dollar positions, and long Euro versus Swiss franc and Turkish lira). Although there were a number of potentially negative developments during the month, including the swine flu outbreak and possible bankruptcies of US auto manufacturers, markets remained positive and continued to rally strongly.

Although the manager believes economic conditions will continue to improve, they remain bearish in their outlook. In particular the ongoing difficulties in the US housing and financial industries, and the continuing need for deleveraging, will result in lower global economic growth over the long term regardless of central bank or government actions. As a result the manager remains skeptical about the sustainability of the current rally and will adjust the Fund's portfolio accordingly.

Blue Sky Capital Management's World Fund was up +5.28% in April, boosting the Fund's 2009 return to +15.27%.

The Fund, which is a top-down fundamental global macro fund, benefited from stronger equity markets throughout April, Asia-Pacific equities contributing +8.56% to the overall result. North American equities and FX also made smaller positive contributions (+1.9% and +1.02% respectively), while index futures lost -3.12%. Net exposure to equity markets was sharply increased during April, up to 70.75% by the end of the month, compared to a 49.28% net exposure at the end of March.

The Herschel Absolute Return Fund posted a gain of +4.56% in April, having significantly increased its equity exposure since the start of the year.

The gross exposure of the Fund at the end of April stood as 56.2% (net exposure 50.6%), compared to January when gross exposure was only 28.7% (net 25.1%). As a result the Fund was able to capitalise on the ongoing rally in equity markets during April. In particular, consumer staples (+11.9%) and consumer discretionary (+12.1%) sectors were up strongly, driven by corporate activity in ABB Grain and Lion Nathan, which contributed significantly to the Fund's overall result.

The Allard Growth Fund posted a strong gain of +11% in April, after rising +8.3% in March.

This result puts the Fund's 2009 return back in the black, and it now stands at +6.6%. With almost 80% of the Fund's portfolio invested in equities, and with equity markets up sharply in April, the strong result for the Fund comes as no surprise. The Fund also benefited from stronger Asian currencies against the US dollar, a trend the manager believes will continue to contribute positively to the Fund's overall return. Although the Fund's cash position remained relatively unchanged overall, the manager did increase exposure to Australian and Indonesian equity markets, while reducing positions in Thailand and China, due to political instability and a strong price performance respectively.

The Allard Investment Fund also performed strongly in April, up +7.8%, with a 2009 return of +4.1%.

The Bennelong Long Short Equity Fund rose +4.26% in April, and is now up +16.84% for 2009.

As global equity markets continued their rally into another month the Fund was able to take advantage of sharply increasing prices, taking profits in a number of successful positions towards the end of the month. Portfolio activity was light otherwise, the Fund now focusing on identifying fundamentally attractive stocks, a task which is becoming increasingly difficult due to the worsening outlook for many sectors.

Click the link below to view Bennelong's fund profile.

The MM&E Takeover Target Fund gained +9.35% in April on the back of corporate activity on three of its investee companies.

Asciano, Lion Nathan and ABB Grain were all subject to takeovers during April, and the Fund was able to profit on each company. These three companies were the largest positive contributors to the Fund's overall result, however Arrow Energy and Duet Group also made gains for the Fund. Negative returns came from positions in Oz Minerals and Bank of Queensland. This result brings the Fund's financial year return to -13.73%, and is the third consecutive month the Fund has posted a positive return.

MM&E's Capital Investment Trust No's 1 and 2 also recorded small gains in April, up +0.10% and +0.12% respectively, driven by a placement in Onesteel.

The PM Capital Absolute Performance Fund gained an outstanding +21.2% in April on the back of a strong weighting towards the technology sector.

Technology stocks, which comprise 23% of the Fund's portfolio, made broad based gains during the month, with KLA Tencor and Novellus providing strong returns for the Fund. UK stocks, including Barclays, Lloyds and Royal Bank of Scotland also made positive contributions to overall return. Negative returns on currency markets partially offset these gains, however due to increased Australian dollar hedging and option strategies these losses were limited.

PM Capital also recording gains in their two other absolute return funds, the Australian Opportunities Fund up +8.3% for the month and the Enhanced Yield Fund up +2.5%.

The Commodity Strategies Long/Short Fund recorded a loss of -2.31% in April, while the Long Only Fund also dropped by -1.03%. The 2009 return for these Funds now stands at -3.17% and +0.07% respectively.

For both Funds mixed results in energy commodity trading strategies were the key drivers of overall return. Strong gains in crude oil, natural gas and gasoline were negated by losses on gas oil and heating oil, as well as platinum, for the Long/Short Fund. The Long Only Fund had a similar result, also recording losses on gold and silver.

Although the Funds' returns in 2009 have been disappointing, both Funds have retained impressive annualised returns (+11.32% for the Long Only Fund and +23.22% for the Long/Short Fund).

Attunga Capital’s Power & Enviro Opportunities Fund made a small loss of -0.24% in April, as uncertainty lingered over the Federal Government’s carbon trading scheme, and electricity demand declined.

The Fund’s 2009 return now stands at +10.51%. The ongoing uncertainty surrounding the Government’s Carbon Pollution Reduction Scheme and its inception timetable affected FY 2011 contracts, however the announcement after month end that the scheme was to be postponed by 12 months will create greater certainty in these markets. The manager noted also that the scheme was still at risk of being rejected in the Senate.

In power markets, generator outages and hydro generation bidding strategies held up prices, however overall the sector experienced a decline in demand which was expected by the manager.

The Attunga Agricultural Trading Fund also had a quiet month, gaining +0.69% to bring its 2009 return to +9.85%.

The strong rebound in equity markets both in Australia and overseas saw Equity based hedge funds managed in Australia post not only their best returns this year, but for the past three years. When taking the results of all funds - including non equity strategies such as Global Macro and Commodities, and including funds of funds, it was the best result since the start of the Global Financial Crisis in late 2007.

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

ATTACHED FILESAFM March 2009 Performance Review (pdf format)