Hedge funds posted in September their best result in 16 months, returning 4.05 per cent overall, according to the Lipper Hedge Fund Composite Index.

September’s solid return brought year-to-date performance to a positive 3.14 per cent.

The third quarter result came in at a strong 6.89 per cent, which more than cancelled out the disappointing second quarter’s negative reading (-4.13 per cent).

Long-Bias (+6.48 per cent) ranked at the top of the monthly performance league table for September.

In line with emerging stock market performance the emerging markets strategy performed solidly in September, rising 5.05 per cent month on month and 4.79 per cent year to date. It was bettered only by long/short equity managers, which rose 5.16 per cent month on month and 2.05 per cent year to date. Emerging markets strategies benefited from stock market rallies in all of the emerging regions.

Multi-strategies made a comeback in September, delivering a 4.56 per cent month on month and 3.59 per cent year to date gain.

Breaking a four-month string of positive performance, dedicated short-bias ranked at the bottom of the performance league table, falling by 3.23 per cent.