Written off less than a year ago as overpriced and underperforming, hedge funds are pulling off an unexpected two-step this year: making money and taking in new cash.

The average hedge fund is up 5.4% through the end of August, while stock-focused hedge funds have gained 8.31%, according to the researcher HFR. Over the same period, the Standard & Poor’s 500 rose 11.9% including dividends, while the traditional 60-40 split of stocks and bonds would have earned 8.9%.

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