The New Star Balanced Portfolio fell 15.6%* during the third quarter of 2008 while the IMA Balanced Managed sector lost 8.9%*. In what was an exceptionally difficult three months for the portfolio, bright spots included the positive relative returns achieved by Hain Capital Value and from a new holding Financial Select Sector SPDR which was introduced into the portfolio in early July.Poor performers included BlackRock UK Dynamic, MFM WH Ireland UK Growth, CF Australian Natural Resources and BlackRock Gold & General. The portfolio sold the wheat exchange-traded fund, Liontrust First Growth and Standard Life Higher Income.Weightings were scaled back in Atlantis Asian Special Situations, CF Australian Natural Resources, iShares MSCI Brazil and New Star Heart of Africa. Cash was invested in LeggMason Value, Marlborough UK Equity Income and a new position was initiated in Oil Services HOLDRs Trust.