The first quarter of 2008 saw equity funds suffer, in particular those in India and China, according to MorningStar.

Research from the asset management firm showed a sharp downturn in Indian and Chinese funds, which fell by 25.8% and 23.7%, respectively. The strongest performance in the first quarter came from lower-risk assets such as bonds and commodities such as gold.

Despite being at the centre of the global credit crisis, the US market was reasonably resilient in the first quarter. Morningstar recorded US Equity fund categories falling between 9.1% and 11.4% each, in dollar terms.

Bond funds remained solid over the first quarter and were popular with investors who had a lower appetite for risk. Government bond funds out-performed corporate bond offerings, which in turn beat high-yield funds.