Data from Hedge Fund Research shows that after withdrawing a net $330 billion from the industry in the year to June, investors gradually returned in the third quarter with a net inflow of $1.1 billion.

According to the latest performance update of the EDHEC Alternative Indexes, on the bond markets, regular bonds registered an eighth month of steady returns (+0.73%) and, after last month’s stumble, convertible bonds managed a noticeable gain (+2.78%). The credit spread widened (+0.58%) for the eighth consecutive month.  The commodities market scored well (+3.17%) and achieved a full quarter of sustained profitability while the struggling dollar fell off again (-2.05%), down to its level of August 2008.

Despite the profits on the stock markets, the Convertible Arbitrage strategy took advantage of the increasing credit spread and profitable convertible bonds. With another month of gains (+0.86%), the strategy achieved a full year of constant profitability. Not much affected by the crisis, the CTA Global strategy continued its uneven rise with a substantial gain (+3.54%).

The Equity Market Neutral strategy recovered last month’s limited loss (-0.05%) with a slightly positive return (+0.07%) and maintained its level of October 2008. In the trail of the stock market, the Event Driven (+1.75%) and Long/Short (+1.46%) strategies both managed positive returns, although only about one quarter of the S&P 500 gains.