October was one of the worst months in stock market history, as the effects of the credit crunch tangled with a rapidly deteriorating global economic growth outlook. To add to this, redemptions from hedge funds turned many of them into forced sellers, which added to the widespread pain as they scrambled to get out at any price, regardless of the quality of the underlying investment. The Fund was dragged lower in this dire environment, dropping by 15.9% over the month.The Fund's majority weighting in equities was the chief cause of its losses over the month, as equity markets the world over took a pummelling. However, the Fund's exposure to gilts provided some support because these assets held their ground as risk-wary investors called on them as safe havens. Property investments, meanwhile, endured another grisly month, with those funds with higher levels of borrowing receiving the roughest treatment from the market.Our small holding in Close European Accelerated hurt our returns this month, due to a combination of the turbulent markets and concerns over the credit ratings of two of its backers. These account for less than a third of the product's overall backing, and we believe the fall in the price has over-compensated for this factor, giving it potential to bounce back very strongly.More positively, our two specialist holdings had relatively good months, with Jupiter Financials actually managing to make a positive return in an environment where the vast majority of equity funds registered sizable losses.
