When it rains, it pours, and Andrew Lahde is hoping that the subprime market forecast stays miserable for the foreseeable future. Lahde’s $40 million U.S. Residential Real Estate Hedge fund, which shorts the riskiest tranches of subprime mortgage securitizations, is up a staggering 410% gross through August.

“Several ABX indices increased in price during August,” wrote Lahde, in his latest investor letter. “Though both Series A and Series B of the fund experienced positive returns due to our overweighting in the 06-1 series, which experienced declining prices. Overall our ABX positions contributed positively, our CMBX positions were a drag on performance and our credit default swaps (insurance) on our counterparties helped performance.”

The results: Series A of Lahde’s fund gained 7.9% last month and 410% year-to-date, while the fund’s Series B gained 3% in August and is up a mere 161% year-to-date.

Going forward, Lahde expects that “the number of foreclosures reported in the coming months will skyrocket, even from the current staggering level.  This should bode well for our fund.”

Lahde is also taking his strategy to the commercial real estate market with the launch of Commercial Real Estate Hedge on Sept. 1. The fund “should act as a hedge for commercial real estate, as well as general adverse conditions in the economy and financial markets,” according to Lahde.

It is currently shorting both CMBX BBB-1 and CMBX BBB-3 subindices and “will likely stay with these two sub-indices for the time being.”

“We believe that both Funds are positioned well for coming moves in the indices and markets in general,” he said.