As fall foliage starts to show its brilliant colors, September ended with all six Dow Jones Hedge Fund Strategy Benchmarks showing more green. The third quarter of 2006 ended with distressed securities on top among the benchmarks, adding 0.9% for the month and bringing its year-to-date percentage to 9.5%. Convertible arbitrage is holding the runner-up position for the year so far with 8.8%, thanks to an increase of 0.6%, while the second-best performer for September was event driven, climbing 0.8% (7.1% YTD). Merger arbitrage and equity market neutral both inched up 0.2%, leaving those strategies at 6.0% and 5.1% through September, while equity long/short added 0.4% to bring it to 2.6% for the year. Despite its top performance in September, however, convertible arbitrage has actually lost a little of its luster from a month ago. In a 52-week comparison, at the end of August, convertible arb recorded 8.9%; a month later, the percentage dropped to 8.0%. (By the way, Dow Jones says its convertible arbitrage benchmark hit a new high in August with a closing value of 128.49; the old record was 126.94, set in April 2004.) Equity long/short also was a loser over the 52-week period, declining from 5.9% to 3.7%.