After a torrid summer for hedge funds, neophyte investors could be forgiven for thinking that the safest course of action is to quit the sector.

So far this year two hedge funds run by Bear Stearns, the US investment bank, and one managed by Basis Capital, an Australian manager, have filed for bankruptcy. Elsewhere Boston-based Sowood lost $1.5bn, half its money, and Goldman Sachs injected $2bn into a $3bn rescue of one of its biggest funds.