With financial markets in disarray as the credit crisis continues, market reaction revolved around major government policy initiatives such as the US TARP and a vast array of liquidity improving measures. Economic data was almost uniformly bad, with sharp falls in European business sentiment and increases in unemployment on both sides of the Atlantic. A flight to quality drove government bond prices notably higher.The fund's overweight in bonds and underweight in equities proved beneficial. Last month there was a small increase in the exposure to high yield and investment grade corporate bonds at the expense of cash and government bonds, to take advantage of the widening in yield spreads.