During the quarter, the Trust's quantitative investment strategy resulted in a return of -7.5% compared to an average -7.05% for the peer group. The portfolio remained overweight equities and underweight cash throughout the quarter.During January, moderate Japan and other Asia overweight positions were virtually neutralized, whilst emerging markets were taken briefly overweight before reverting to near neutral. Towards the end of the quarter, the portfolio was overweight UK fixed-income as well as equities but underweight European equities.In the dying days of the quarter, US and UK stock market sentiment remained nervous with financials particularly affected in the wake of the Bear Stearns affair. European markets were also generally downbeat as inflation worries deterred the European Central Bank from reducing the euro interest rate from 4% and continental exporters suffered from the currency's strength.Japanese exporters were similarly impacted by yen appreciation and weaker demand. US interest rate reductions from 5.25% to 2.25% since mid-2007 may help global market confidence, but the economic environment combines difficult credit conditions with heightened concerns about inflationary pressures.
