September was characterised by intense equity market volatility as the worst financial crisis of the modern era unfolded. The FTSE Small-Cap ex IT index fell 15.0% in sterling, total return terms, smaller companies underperforming their large-cap counterparts. Consumer stocks, housebuilders and real estate names were among the poor performers during the month and underweights in these sectors contributed towards our outperformance of the benchmark during the month.At stock level, our holding in domiciliary healthcare provider Care UK boosted performance as this defensive stock rallied in a difficult market, while veterinary pharmaceuticals firm Dechra also outperformed after posting good results. Our avoidance of underperforming retailer JJB Sports and property developer Minerva were also positive for returns as was a high allocation to cash.On the negative side, we held engineering consultancy WSP, which weakened on fears of an economic slowdown, while our zero holding in replacement vehicle provider HelpHire detracted from relative performance, the stock bouncing after a successful fundraising. In terms of activity, we reduced our exposure to Industrials in anticipation of an economic slowdown. We also bought Ukrainian oil producer and developer Cadogan Petroleum cheaply after its flotation.The company is involved in a licensing dispute and has benefited from a favourable initial court ruling.
