PM Capital's Absolute Performance Fund continues to benefit from equity market rally with a 10.9% return for July.

The manager reported that fund performance in July was assisted by better than expected results in the US, in particular in the banking and technology sectors. Credit securities purchased throughout the first half of the year contributed to performance as credit markets continued to ease. The fund remains fully invested as the manager believes their stock holdings represent good value on a two to three year horizon.

1 year return: -5.9%

PM Capital's Global Equity fund is a focused non indexed portfolio, typically consisting of between 35 to 45 stocks and under normal circumstances is between 80% and 120% invested, although if appropriate the fund may be 100% invested in cash.

Absolute Return Capital Management's Australian equity long short Ascot Fund reported a positive result for July, returning 6.6% net of fees, to produce their best ever return over the four years since the fund's inception in August 2005.

July's gain of 6.6% has brought the 2009 YTD result for the Ascot Fund to 12.37% following their positive return in calendar 2008 of 5.24%, and an annualised return since inception of 14.33% with volatility of just 5.56%.

Commenting on the result, Managing Director Craig Connelly noted not only the record result and a pleasing start to the new financial year, but the fact that the performance was based on an average net long position of only 57% of funds under management (beta adjusted), attributing the performance to a combination of strong stock selection as well as the effective use of call options to provide leverage.

Looking forward the manager is bullish, noting that the ASX's strong bounce off the March low was from a market that had overshot to the downside, and intends to retain a net long bias while remaining vigilant to lock in trading profits while continuing to manage their positions in a pro-active manner.

Foreign exchange specialist Excalibur Funds Management completed its three year track record in June. The Absolute Return Fund which uses a combined systematic and discretionary investment process has an annualised return of 19.7%.

The manager makes extensive use of options to protect downside risk. "It's been a tough environment in currencies over the past 12 months, we've really had to focus on managing the risks for investors," commented Excalibur principal Matthew Harper. The Fund has a three year risk adjusted return (Sharpe ratio) of 1.37.

Excalibur received strong inflows during the month with assets under management topping AUD$100mn. A further AUD$40mn of capacity has been locked in by a Hong Kong based Fund of Fund. The manager plans a hard close at AUD$300mn.

In what must be approaching a record both in Australia and overseas, Fortitude's local fund has continued its low volatility approach to risk and returns without a negative month since December 2007. In 2008 Fortitude returned investors 12.29% and has now returned an annualised 11.54% since inception in March 2005 with a standard deviation (volatility) of 2.97%.

1 year return: +11.96%. Annual (Mar.2005): +11.54%

Attention to risk has seen Fortitude produce 94% positive months and a maximum drawdown of just -0.50%.

The manager noted another relatively quiet and choppy month for all asset classes, making some gains on their long volatility positions and realisation of their REIT holdings. They also noted that volatility levels have fallen to levels where risk and rewards are tipped in favour of their long volatility strategy.

1 year return: -11.79%. Annual (Mar.2007): +2.31%

Shell Cove was established by Richard Jenkins in 2004 following a 20 year career with Macquarie Bank.

The Ascot fund produced a positive return in 2008 of +5.24% and has now produced an annualised return of +12.80% since inception in August 2005. The fund, which has recently received a new mandate of $10m from an Australian family office to take its FUM to over $60m, uses a combination of fundamental research, with technical overlays and long volatility options for timing and risk implementation, to invest in Australian equities.

1 year return: +2.3%. Annual (Aug.2005): +12.8%

ARCM is managed by Craig Connolly, with Tony Cooper and Peter Lucas from Melbourne and boasts an enviable risk record with 72% positive months and a maximum drawdown of -3.44%.

Prodigal's Asian (ex Japan) Equity fund, which utilises model trading, convertible and risk arbitrage, has maintained its positive track record in 2009 following a tough second half of 2008 when September and October losses produced a -20.35% return.

1 year return: +7.14%. Annual (June 2007): +7.63%

The fund was established in June 2007 and has annualised return since that time of 7.63%

Although reporting a disappointing 12 month return, the fund has now produced an average annualised return over 10 years of 16.7% after fees, against its benchmark the ASX300 Accumulation index which has returned 7.1% over the same period.

1 year return: -17.6%. Annual (Apr.1998): +15.7%

The fund which invests predominantly in Australian equities and is open to retail investors, was established in April 1998 and has approximately $230m in funds under management.

Commenting on the results, the manager noted that the question now facing equity markets is whether the current rally is the start of a more sustainable rally, stating that the key will be a continual improvement in economic data to build on the recent positive figures, in particular, news on consumer spending and the growth in leading emerging markets will be most important. The general improvement in credit market sentiment, a pick up in the flow of credit to the private sector and the very strong investor appetite for recent equity placements are, in the manager's opinion, positive developments for risk assets.

1 year return: +4.7%. Annual (Oct.2005): +8.1%

RTM was established in October 2005 and returned 6.57% in 2008.

In spite of outperforming its benchmark (the UBS Global 50/50 Infrastructure and Utility Index) over the past 12 months, the manager failed to make any headway over the past quarter when it returned +4.97% vs. the Index which rose 10.5%. On June 4th the manager moved to 100% cash to commence a strategic review of both strategy and option overlay as it sought to enhance option premium income, and ensure that it is able to capture opportunities in the sector.

1 year return: +4.97%. Annual (Dec.2007): -1.21%

The Trust's manager, Talon Infrastructure Pty Ltd noted that risk appetite returned during the past quarter although it looked a little tired after the strong rally from March lows. The manager's outlook is currently cautious given the market's recent strong bounce, noting that the global economy remains highly leveraged which ultimately must be reduced.

The trust paid a distribution of $0.33 for the six months to June, taking the twelve month distribution of $0.90 for a yield of 9.72%. Meanwhile the trust's assets remain fully invested in cash as it finalises the strategic review.