Attunga Capital reported positive gains for September achieving 4.72% (YTD 15.19%) and 0.06% (YTD 2.62%) in the Attunga Agricultural Trading Fund and the Attunga Enviro Opportunities Fund, respectively

The Attunga Agricultural Trading Fund primarily invests in global exchange traded soft commodity and agricultural derivatives and securities, with a focus on relative value and other trading strategies. Attunga took advantage of continuing high volatility in commodity markets which they commented was as much due to the credit crisis fallout as fundamental factors.

The Attunga Enviro Opportunities Fund primarily invests in derivative products, mainly focusing on the Australian National Electricity Market (ETC and OTC), but with a mandate which includes CO² emissions, weather, gas, water and other energy and environmental related markets. Attunga reported a quiet month on power markets resulting in the nominal gain.

Excalibur Absolute Return Fund reported a small positive return of 0.08% in September bringing their year-to-date cumulative performance to positive 9.76%

Excalibur reduced leverage to preserve capital and commented it was a tough month with extreme deleveraging and position shakeouts in their targeted currency pairs.

Excalibur employs a currency/FX strategy trading the Australian and New Zealand Dollars against the Japanese Yen. The fund aims to exploit significant interest rate differentials between the countries whilst holding put options over the core position to improve capacity, control risk and allow for profit generation in down months.

Headland Global Diversified Fund has reported a negative return of 1.18% in September bringing their year-to-date cumulative performance to positive 1.09%.

The fund moved into a cash position mid-September as per their risk management processes designed to preserve capital during extreme volatility. Headland commented they will re-enter markets as volatility levels fall and substantial market trends develop.

Headland employs a global macro strategy by investing in a diverse pool of price trends in global bonds, currencies and commodities.

Arnott Opportunities Fund has reported a positive return in September of 1.82% bringing their year-to-date performance to a positive 3.94%.

Unlike many managers Arnott noted that they were seeing opportunities emerge from the mayhem of September on two fronts; firstly they were focusing on long opportunities from oversold positions, and secondly they were relatively unconcerned about restrictions on short selling, having traded pan Asian markets for over 10 years, and as such being relatively used to issues around short selling restrictions.

The Arnott opportunities fund is an equity long/short strategy investing in Australia and Asia. The manager's total FUM is US $825 million, with the majority of that ($775 million) in The Opportunities Fund. By the end of October 2008 the fund will have a three-year track record.

Austral Capital has reported marginally positive returns for September, continuing their very defensive strategy and allocating aroung 95% of the portfolio to cash citing capital protection as paramount. Austral Capital further stated it is continually monitoring counterparty risk and is satisfied with all assets held by or on behalf of its prime broker UBS.

The Austral Equity Fund achieved 0.24% for the month with approximately A$14m FUM. In the Austral Opportunity Fund, which uses a similar investment strategy and has approximately A$32m FUM, A$ shares returned a positive 0.32% while US$ shares recorded a negative 0.24%, due to the devaluation in the Aussie dollar. The September results bring the YTD cumulative returns to -0.32% and -0.22% for the Equity and Opportunities Funds, respectively.

Austral Capital is an event driven hedge fund manager and invests primarily in the securities of Australian companies that are, or may be, involved in special situations or corporate events such as equity and hybrid security issues, block trades, mergers and takeovers, de-mergers, reconstructions, recapitalisations and spin-offs.

As expected initial September performance reports from Australia's Absolute Return and Hedge Fund sector are showing considerable diversification. However given the significant volatility across a range of underlying financial markets and asset classes, plus the ban on short selling equities, there have been some positive results.

Best results to date (as of 7th October) include Blue Fin Capital’s Currency/FX with 9% (5.83% YTD); Apeiron Global Macro’s +7.22% (+13.55% YTD); TechInvest's market neutral Intercept Capital Fund +3.44% (+11.97% YTD); Commodity Strategies’ long/short fund +3.27% (+11.9% YTD) and Wallace Funds Management’s equity market neutral +0.85% (+29.73% YTD).

On the negative side Plato Investment Management’s Equity 130/30 was down over 12% (-27.48% YTD) reflecting the problems experienced in the equity sector and the ban on short selling.

Commodity Strategies has reported September results for its long/short and long only programs, returning +3.27% and +11.94% YTD for the Long/Short, and -1.61% and +7.96% YTD for the Long only.

Commodity Strategies was established in 1999 by Robert Holroyd with the objective of providing diversification from and low correlation to equity markets.

Australia's Reserve Bank (RBA) exceeded market expectations by cutting rates by a full percentage point, to 6.00%, double the 50 basis points that the market was expecting.

Citing weakening economic activity in major economies, and evidence of moderation in growth in Australia's trading partners in Asia as indications that global inflation will moderate in 2009, the Board chose to ignore their expectations of a CPI figure of around 5% for the year to September, and introduce an unusually large movements in the cash rate to bring about a significant reduction in costs to borrowers.

However the RBA's statement was careful to point out that it did not expect this movement to establish a pattern for future decisions, and that they were all continue to set monetary policy as needed to bring inflation back to the 2 to 3% target over time.

Redwood Capital’s Apeiron Global Macro fund has continued to show the benefits of diversification away from equities with a positive performance in September of +7.22%, bringing 2008 YTD performance to +13.55%.

Apeiron's monthly performance report noted that they had reduced overall risk in the portfolio as a prudent measure to the fear that was building in financial markets. As a result they were short equity indices, and held very limited exposure in other markets during the month.

The Apeiron Global Macro Fund uses directional strategies in futures and FX markets to implement investment themes. The fund was formerly called Solaris Global Macro, and returned 20.79% in calendar 2007.

Australia's Absolute Return & Hedge Funds continued to weather the storm in financial markets and outperform the broader equity benchmarks on a year to date (YTD) basis to the end of August. The ASX200 was down over 27% over this period, while the average hedge fund return in AFM's database of over 200 funds was down 4.16%.

To date approximately 90% of all funds surveyed by Australian Fund Monitors have reported August results and the average return for the month was +0.90% against a rise of +3.08% for the ASX200 and +1.20% for the S&P500. During the month 55% of funds achieved a positive return after fees with 30% outperforming the ASX200.

It has been a turbulent year in the industry across all strategies with most funds finding it hard to avoid at least one negative month. The best performing strategies continue to be non-equity based, including Commodities, FX, Global Macro and Futures. However, Commodity strategies have been retracing in recent months while Equity Market Neutral funds continue to perform well. The only fund manager to achieve a positive result every month since January is Fortitude Capital (AIMA Hedge Fund of the Year 2008) implementing an equity market neutral strategy.

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