Hedge funds are breathing easier now than during the credit crunch, when many were gasping for air and some took their last breath.

The industry generated an 11% return by the end of June after posting record losses last year, according to database Eurekahedge. This was its best half-year performance in a decade. But one swallow does not make a summer. Few funds that survived last year - about 500 did not - are as sanguine about prospects.