The UK stock market, along with global markets, ended the quarter lower. The period was dominated by worries about rising inflation, risks of weaker growth, volatile commodity prices, falling house prices and ongoing financial market turmoil.The fund underperformed its benchmark as positive stock selection in the telecoms and transport services sectors was not sufficient to overcome the negative effect of stock selection and overweight positions in the oil and other basic industry sectors. At the stock level, the fund benefited from an overweight position in Cable & Wireless, which received broker upgrades on its strong operating momentum and expectations it will announce a demerger.The fund's position in HSBC was also positive as investors saw the bank as a relative safe haven in the financial sector due to its comparatively high capital ratio. An overweight position in Afren PLC was among the detractors as the oil producer was hit by slowing global growth and falling oil prices.Softening commodity prices also weighed on our holding of International Ferro Metals, which fell despite reporting its first full-year profit in four years on increased output. However, the fund was lifted by an overweight position in pub operator Greene King, which reported a 14% increase in annual profit after acquiring seafood restaurant chain Loch Fyne.