Over the quarter, Lazard's holding in financials, and banks in particular, contributed significantly to performance. Societe Generale experienced a phenomenal rally in April as the stock traded at record levels on bid speculation from Italy's Unicredito. Although both companies declined negotiations towards the end of the month, the share price continued to rise.The second quarter saw the best US equity returns come from Acadian. Stock picking has been particularly strong, especially in May, when the manager's choice of companies added over 2% to the rise of the portfolio that month. The choice of industry has also been generally good and, in the same month, this aspect of the manager's returns contributed just under 0.5% to the portfolio.First State showed good sector allocation over the period, with stock selection somewhat weaker. Industrials have continued to be one of the overweight sectors for this portfolio, as it was in the first quarter. The decision has added value as a sector call, but not at a stock level. A stock decision that has benefited however is the investment in IOI Corporation, the Malaysian palm oil and construction company, and which continues to be part of the portfolio from last quarter as well.This quarter the top performing manager was Alliance Bernstein, who has out performed the Topix Index during a period when the Topix Index fell over the three months to 30 June 2007.
