The third quarter proved to be a truly nasty period for financial markets, as the credit crisis stepped up a gear and investors began to worry about the toll it would take on the already-slowing world economy. The average global stock market fell by 11.4% over the three months, although this figure was improved for UK investors by the considerable weakening of sterling. Over this turbulent period, the Fund fell back by 8.2%.Having exposure to US equities proved very useful to the Fund's performance for the quarter, as American equities - helped by the dollar's dramatic climb against the pound - were by far the most resilient of the major regions.The large position in Japan helped too, partly because of the yen's appreciation against sterling, and partly because one of the Japanese holdings, Societe Generale Japan Core Alpha, achieved a positive return - one of only three Japanese equity funds in the sector to do so in quarter 3.The Far East and emerging markets were the weakest areas for the Fund over the three months, as the share prices of these riskier assets continued to fall back on investors' increasing inversion to risk. The negative impact of this was cushioned by the selection of funds in these regions however, as all comfortably outperformed their sector averages over the quarter.
