September was possibly the most traumatic month for financial markets in a generation. The bailout of institutions such as Fannie Mae and Freddie Mac, the bankruptcy of Lehman Brothers and the "shotgun marriage" between HBOS and Lloyds TSB all took place against a background of continuing economic weakness and the struggle to agree a financial rescue plan in the US.Despite a disappointing contribution from our bond holdings, the fund outperformed all but one fund in its sector this month as our equity holdings outperformed strongly. This was ironically helped by the overweight in banks and insurance, as well as tobaccos, telecoms, pharmaceuticals, beverages and utilities, as the main brunt of market falls was borne by the mining and industrials sectors.We reduced our position in UK banks primarily through the sale of HBOS but also through a reduction in the RBS holding which we judged to be particularly exposed to the prevailing market forces. Elsewhere, we exited Marks & Spencer and Bovis on fears over consumer spending and trimmed Pearson on concerns over the outlook for spending on education in the US. New holdings were established in Hellenic Carriers and Omega Insurance.The fund is overweight financials, where despite recent reductions in yields they are still attractive, and oil stocks, where yield levels and dollar exposure present attractive opportunities. Against this, we are underweight industrials due to fears of a possible recession.