Better performance, half the volatility. Why the bad name?

What a difference a year makes! Or maybe that should be half a year?

A little over six months ago the financial world as we knew it was in disarray, and with it, equity markets. And, according to some loud and strident voices, hedge funds were, if not to blame, well....at least a great target.

Come September and the rally continued, with the ASX recording a gain of over 5% for the fifth time in seven months, and the average performance of Australia's hedge funds tagged along for the ride with AFM's index rising 2.34%. However, behind the headline statistic there were some standout performances, even if some of September's stars were playing catch up after a forgettable 2008.

For detailed analysis of performance for each strategy, industry comment and ranking tables, please open the attached .pdf file.

ATTACHED FILESOctober absolute return and hedge fund review (pdf format)

The Australian Securities and Investments Commission (ASIC) issued an urgent stop order forcing Trio Capital, formerly Astarra Capital, to remove the product disclosure statements for its Astarra managed funds from its website, according to a report in the Sydney Morning Herald.

However there are scant details available, as ASIC have been barred from releasing details of charges laid in the New South Wales Supreme Court against two directors of one of the funds involved.

Further confusion arises in what seems to be a complex corporate structure of related entities between Astarra and Trio.

The Sydney Morning Herald has reported on the potential for ASIC to ban products considered "unsuitable" being distributed to retail investors.

Quoting the chairman of ASIC, Tony D'Aloisio from a speech he delivered last week, in addition ASIC's submission to the parliamentary committee investigating the financial industry, the paper reported that ASIC had concerns that the current consumer safeguards of education and improved disclosure were not necessarily providing protection for all consumers.

The change to ASIC's stance comes after concerns following a series of issues where products have been allowed to be sold to retail investors because they conformed to the risk disclosure regulations, without really considering the suitability of the product for the individual investor.

ASIC has also recently been active (and successful) in prosecuting financial advisors who had recommended clients invest in products which subsequently failed.

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