The credit crunch bit home hard in the third quarter. Growing concerns about financial services companies culminated in the effective Nationalisation of Fannie Mae and Freddie Mac in the United States. In addition a number of well known financial services companies were forced either into bankruptcy or mergers.Credit spreads were pushed up to highly stressed levels. The focus on inflationary pressures abated to a greater or lesser extent around the world as commodity prices fell. Interest rates started to fall in a number of countries towards the end of the period. Despite widespread calls for monetary easing, Central banks in the United States, the United Kingdom and the European Union all maintained interest rates through the quarter.During the quarter we sold Kraft, as this stock now fails our screening process on the back of labour disputes and health and safety concerns. We also sold out of Wellpoint the health benefits company and Willis the insurance company both in the US. On the buy side we introduced Aflac using recent weakness to initiate a position and also introduced Cisco on attractive valuations.
331.75p
