Regal's Amazon and Tasman Market Neutral Funds fell -1.26% and -4.15% respectively in October against a backdrop of a fall of 14% in the ASX, as long standing short positions continued to work well in the weak overall market.  However, positive performance from the short positions in both funds was not sufficient to offset one long position which fell over 50%.

Regal Funds Management was established by Andrew King in January 2004 and manages four funds.  The Amazon Fund was established in September 2005 and has an annualised return of +21.69% since inception, while the Tasman Fund was established in May 2007 and has an annualised return since inception of +12.39%.

Headland's Global Diversified Fund completed 24 months track record with a positive October performance of +0.22%, bringing 2008 YTD to +1.31%, after moving substantially to guaranteed bank deposits to avoid the risk of volatile markets.

Citing extreme volatility in multiple markets, Headland's CIO Jerry Pressnell remained committed to capital preservation with 98.8% of the Fund's assets in bank deposits covered under the Australian Government's recent guarantee.

Headland has returned 8.28% annualised since inception and invests in bonds, currencies and commodities to provide wholesale investors an alternative strategy designed to provide a low correlation to equities.

Commodity Strategies has reported October results for its long/short and long only programs, returning +8.77% and +22.58% YTD for the Long/Short, and -0.53% and +9.67% 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.

Fortitude Capital's onshore absolute return fund has maintained its ranking as the only Australian fund to record a positive performance in every month of 2008. Given the extreme volatility of the markets this year, coupled with the ASIC short selling ban which was introduced partway through September, the result justifies Fortitude recently taking out the 2008 hedge fund of the year award.

Fortitude's Cayman offshore fund returned +2.10% in September for an annual result of +5.27%, but has not quite been able to achieve a positive return every month, with small losses of -0.43% and -0.29% in June and March respectively

Fortitude Capital Absolute Return Trust is a multi-strategy market neutral fund specialising in listed Australian equities and derivatives.

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.