In the US second quarter GDP growth came in ahead of expectations, though this was boosted by "seasonal adjustments" allied to a favourable shift in trade flows as stronger external demand and the weak dollar pushed export volumes higher, while imports were simultaneously dampened by declining domestic consumption.The failure of many household names suggests that deleveraging is entering a new phase. Equity markets suffered, with a vicious and indiscriminant sell off, which in our opinion is extreme, caused by an enormous spike in global risk aversion.The portfolio has benefited from the underweight stance in both the Oil sector and the end to the rally in US financials, however lacked sufficient exposure to interest rate cyclicals such as House-builders, General Retailers and Media, which were the strongest performers in this environment but on which we remain cautious.