Equity markets performed dismally in the month of June, with the FTSE All Share falling 7% as rising prices stoked speculation central banks may now have to lift borrowing costs to contain inflation. Those concerns reversed a two month rally that began in March following the Federal Reserve-led bailout of Bear Stearns and the most aggressive series of US interest cuts since the 1980's.A deteriorating housing market was also of focus this month with both UK mortgage applications significantly lower than the previous month, and house prices also fell sharply. Furthermore, stocks fell across the board in June on speculation that bank write downs have not reached the halfway point and the slowing economy will erode earnings for retailers and property companies.WTI crude oil climbed to a record US$143.67 a barrel in June, completing the biggest quarterly increase in nine years on concerns Israel may attack Iran over its nuclear program and disrupt supply from OPEC. This exacerbated continuing global inflation concerns. Inflationary concerns resulted in bond yields rising, as exemplified by the UK 10-year gilt rising from 4.97% to 5.13% by month-end.The SWIP MM Diversity fund fell 0.5% versus a 3.7% fall for the average fund in the IMA Cautious Managed sector and this relatively strong performance was driven by the Alternatives segment, especially commodities and hedge funds. The best performing fund on the month was the Schroder AS Agriculture fund which rose more than 13% in September; whilst both of the macro hedge funds also performed relatively strongly on the back of rising interest rate volatility.