Equity markets experienced extreme weakness during September due to a confluence of negative factors, including delays to the bailout of key financial institutions, the intensifying seizure within credit markets and the prospect of a deeper developed world slowdown in 2009. Commodity related areas performed particularly poorly, given rapidly falling commodity prices and evidence of slowing economic growth.Hitherto out of favour sectors such as real estate and non-life insurance performed better, reflecting attractive valuations and the forced unwinding of widely held hedge fund positions. The fund declined sharply during September but outperformed its reference index. At a sector level, value was added through underweight positions in mining and construction, while the overweight position in support services and underweight position in non-life insurance detracted from performance.At a stock level, strong performances came from Rensburg Sheppards and Connaught. In contrast Lamprell suffered a derating in response to the falling oil price, and ITE was derated as a result of its exposure to the markets of the former Soviet Union.Various defensive positions were augmented during the month and we also selectively increased exposure to a number of early cycle consumer cyclical plays, reflecting our view that they face improving prospects in contrast to later cycle sectors, given the likelihood of falling interest rates over the next twelve months. Holdings in Hiscox and Dignity were augmented, while new positions were opened in Go Ahead and JD Wetherspoon.Exposure to the oil and commodities sectors was reduced through sales of JKX, Wellstream and IFM. The portfolio is overweight support services (where there are structural growth opportunities), healthcare equipment & services (where there are outsourcing driven opportunities) and aerospace (in attractively valued stocks in this defensive sector).