AR Capital Management's Ascot Fund was up +0.96% in February, as the manager targeted stocks whose results would surprise the market during the reporting period.

The strategy proved successful, as the Fund outperformed the market by +6.5% for the month. Positive returns were gained from short positions in Amcor, Brambles, Incitec Pivot, News Corp and Sonic Health, and longs in JB Hi-Fi and Emeco Holdings. Negative returns came from Nufarm, OneSteel and the major banks. The manager maintained a book size of approximately 20% of FUM, citing the ASIC short selling ban, reporting season volatility and risk/return tradeoffs as reasons to remain conservative.

The Headland Global Diversified Fund was up an impressive +3.38% in February, after posting a loss of -1.20% in January.

The Fund's exposure to US and European government debt, weighted towards short dated (two year) maturities, provided gains as bonds rallied during February. The Fund also profited from falling commodity prices, including short positions in crude oil and natural gas. In FX markets the Fund closed its short exposure to British pounds.

The Herschel Absolute Return Fund posted a small loss of -0.68% in February, and is down -2.13% in 2009.

During February the Fund remained heavily weighted towards defensive large cap stocks with strong balance sheets, a strategy which is popular with many managers at the moment due to the ongoing economic uncertainty and bad news flooding the market. The only sector to provide a positive return was Energy (+2.7%), offset by heavy losses in Industrials (-21.2%), Property Trusts (-16.2%) and Utilities (-10%).

Kaptream says that there are good opportunities for the canny investor with their fund gaining 0.48% in January and 7.86% over the last year.

Kapstream says that its beta portfolio of highly rated fixed and floating securities is currently yielding 7.94% with other strategies including long AUD versus NZD, long volatility in the US, and Eurodollar put spread.

The two funds managed by St Helens Capital saw small losses in February, the Ailsa Fund down 0.71% and the Arran Fund 0.92% lower. However very good performance in January means that the Ailsa Fund is up 3.14% for the two months this year while the Arran Fund is up 2.71%.

Both funds use the same investment process and strategy. The Ailsa Fund is Australian dollar denominated and locally based, while the Arran Fund is USD denominated and registered in the Cayman Islands.

TechInvest's flagship Intercept Capital Fund posted a strong 1.2% return in February after taking into account fees and taxes. On an annualised basis the fund has returned 9.8% each year since its inception in March 2004.

The fund remains underinvested with 54% of gross assets being held in cash, 25.5% in long investments and the remaining 20.5% used for short sales. The manager said that the february result was largely driven by short positions more than offsetting losses on long investments. The main contributors for the month were short sales of Hemlett-Packard, Research in Motion and Boeing.

The Bennelong equity market neutral fund, which won the award for the best market neutral fund in Australia in 2008, has defied the shorting ban on financial stocks to report an impressive return of 7.88% in February to bring results for 2009 year-to-date to 14.02%.

Annualised performance over six years has been 23.97%, whilst performance in the past 12 months of arguably the most difficult market conditions since the great depression have been 30.54%.

Bennelong suffered some fund outflows in the final quarter of 2008 as offshore fund of funds struggled with liquidity issues, but has vindicated remaining investors' faith by outperforming the ASX200 by over 25% in just two months, and by 70% over the past year.

Bennelong manages just over A$50 million using a relative value pairs strategy which has provided 83% positive months since inception and has a rolling 12 month Sharpe ratio of 1.6.

Apeiron Global Macro has reported a dip in performance for February 2009, but remains positive for the year to date with a return of +2.83%.

Apeiron was one of the top performing funds in AFM's database of over 200 funds in 2008, with a return of 18.83% for the year, after all fees, following a return of 20.79% in 2007. 

Apeiron's annualised performance over 3 years since inception is 18.92% with a sharpe ratio of 1.28.

The MM&E Capital Investment Trust No. 2 recorded a small gain of +0.36% in February, and is now up +0.58% for 2009.

The Fund profited from the takeover of Pure Energy, which both Arrow Energy and BG Group PLC are contesting, as well as the successful bid for Incremental Petroleum by TransAtlantic Australia. Convertible notes issued by St George as a result of its takeover by Westpac also benefited the Fund. Takeover activity continued throughout February, with bids for Gloucester Coal and Oz Minerals coming late in the month.

The Pengana Emerging Companies Fund was down -1.7% in February, while the S&P/ASX Small Industrials Accumulation Index was down -10.3%.

The manager credited this good result to the Fund's risk averse strategy, avoiding econonmically sensitive stocks, as well as those that are cheap but have uncertainty surrounding their balance sheets and earnings. The Fund's portfolio is currently made up of defensive stocks with good medium to long term prospects, however in a market focussed on the short term the manager believes this is not being rewarded. Individual stocks that performed well were Thinksmart, ASG Group and MacMillan Shakespeare, offset by losses on Duet, Sonic Healthcare and Spark Infrastructure.