The equity market outperformed hedge funds last month but don’t expect the latter to complain about the end of this year’s brutal summer.

Hedge funds rose 2.71% last month, according to the Credit Suisse/Tremont Hedge Fund Index. The sector is now up 9.93% to date, still ahead of the Standard & Poor’s 500, which has returned 9.13% in 2007 after last month’s 3.74% jump.

Managed futures and emerging markets funds paced hedge funds last month, rising 5.13% and 4.77%, respectively. But while the former needed last month’s hot performance just to get into the black—it is up 2.53% year-to-date—emerging markets merely extended its lead over all comers, having returned 14.65% year-to-date.

“In September, as was generally expected, the U.S. Federal Reserve moved to stop the spreading credit crunch from further impacting the global economy with a half-percentage-point cut in interest rates,” Credit Suisse Index Co. President Oliver Schupp said. “The rate cut also led to a sharp fall by the U.S. dollar and the rise of long-term Treasury-bond yields and oil prices, which could potentially foster inflationary pressures. Overall, this market environment has led to the majority of hedge fund sectors ending September on a positive note.”

Of course, with equity markets rising, short-sellers had a tough go of it. The Credit Suisse/Tremont dedicated short-bias subindex dropped 4.94% last month, leaving it the only strategy tracked by the firm in negative territory, down 1.48% this year.

Other strong performances came from global macro (up 4.1% in September, 12.76% YTD), long/short equity (3.31%, 11.01% YTD) and risk arbitrage (3.22%, 8.04% YTD).