BlackRock's Asset Allocation Fund (Class D) and Select Asset Management's Futures Fund have topped the list of best-performing single-strategy hedge funds in 2008.
BlackRock's product soared 41.18 per cent and the Select Futures Fund gained 32.81 per cent, industry research firm Australian Fund Monitors (AFM) said.
Their gains trumped the AFM Hedge Fund Index's 17.74 per cent decline in 2008. AFM tracks 214 hedge funds.
"Absolute and hedge funds were not immune from the continuing world market chaos, however there is no doubt that their investors fared better than those with direct or fund exposure to equity markets," AFM chief executive officer Chris Gosselin said.
"The funds were the subject of endless and false criticisms, largely related to short-selling claims, however they provided a less dangerous haven with 25 per cent producing positive returns over the 12 months and 88 per cent performing better than the ASX 200."
Equity 130/30 and real estate strategies were the only strategies on average to have underperformed the S&P/ASX 200's 41.29 per cent decline in 2008, AFM's study showed.
Although Australia is one of the few jurisdictions which allows retail investors to invest in hedge funds there are challenges in marketing to the audience, the report said.
Fund managers are required to overcome hurdles including commissioning of a research report, listing on a wrap, placement on dealer groups' recommended list and marketing to financial advisers prior to gaining fund flows.
