The third quarter of 2008 was marked by extraordinary volatility, multiple failures of large financial institutions, and the realisation among investors that the credit crisis was impacting the real economy more significantly than was originally discounted. This resulted in the fourth-consecutive quarter of negative market returns, which had not happened in the US since 2000-2001.The S&P Broad Market Index (BMI) US returned -8.4%,in local currency terms,with smaller-cap and growth stocks generally underperforming. The US market did outperform global markets, while emerging markets fared the worst. In this environment, the BlackRock US Opportunities Fund underperformed its benchmark, the S&P Extended Market Index (EMI) - US, which returned -10.5% in dollar terms(this translated to a gain of 3.5% in sterling terms,due to the strength of the US dollar during the quarter.Stock selection was the primary source of the Fund's underperformance, while sector allocation effects contributed positively to a small extent. Specifically, weak results within energy, financials, and materials drove poor return comparisons. From a sector point of view, the benefits of underweighting energy, industrials, and materials were offset by smaller-than-benchmark exposure to consumer discretionary, financials, and healthcareSector weights shifted during the quarter, as a result of a change in portfolio management for the Fund in August, and in line with our investment process. Most notably, we increased exposure to consumer discretionary, consumer staples, financials, and healthcare, while reducing our allocations to energy, industrials, and materials.
1,778.81p
