During September, Marlborough Quantock UK Growth (-18.9%) underperformed the FTSE All Share Index (-13.2%). This underperformance can be explained by oil and energy stocks being sold off sharply as it became clear the banking crisis will affect global economic growth. In what was the worst month for UK equities since the crash of October 1987, few stocks survived the broader sell off.During the month, we participated in the placing in Barclays as it raised money in order to buy Lehman Brothers' US investment banking division. This holding was sold within 24 hours at a 21% profit as the Government announced a ban on the short selling of financials. We also participated in the placing in Lloyds TSB. These have since been sold for a small profit.The market proved exceptionally volatile ending the month sharply lower. Recent events in financial markets have been unprecedented. Lehman Brothers has gone; the large US insurance Company AIG has been effectively nationalised; Freddie Mac and Fannie Mae which supply over 50% of the US mortgage market were rescued; Merrill Lynch was rapidly taken over by Bank of America; the US Government is to buy bad assets from banks via the Troubled Asset Relief Programme;closer to home Lloyds TSB was quick to agree to takeover HBOS; Fortis was taken over by BNP Paribas; Ireland has guaranteed all savings; the Icelandic Krona fell 45% as the problems of its banks threatened to swamp the entire economy.As a long only fund which operates mainly in wholesale markets and hence is supportive of British industry, we have little sympathy with short sellers. Nevertheless we would put more of the blame for current financial woes at the door of irresponsible bankers than market operators.
610.45p
