One selling mantra of hedge funds is that they can generate gains when the market trades up, down or sideways. There's perpetually a lot of debate about that. But the Hennessee Group offers some interesting data. It says that while global equity markets have declined more than 20 percent from their October 2007 peak, the Hennessee Long/Short Equity Index has increased 0.15 percent. This suggests that the vaunted hedge fund "put" is working. And what of recent trends? Hedge funds, despite a rough July and August, have held up well over a 12-month time horizon. Hennessee suggests that they are adjusting to the current environment. Gross exposure of hedge funds has soared, but net exposure has fallen--as long positions have been cut more than short positions.

For more:
- here's the release

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Hedge fund success is relative in 2008