Equity returns in September were dominated by the failure of several blue chip financial companies in the US. The government bailout of Fannie Mae and Freddie Mac turned out to be just the first of a series of market shocks that led to higher volatility and sharp falls in share prices. Risk de-leveraging seen in the equity markets also impacted money markets which seized further as liquidity and solvency fears came to the fore.The equity rally spurred by the US financial rescue plan to buy illiquid assets was short lived as US lawmakers debated its merits. The changes to economic policy, whilst welcome, may not be enough to halt recessionary pressures in the global economy. September was a difficult month for the fund, which underperformed both its benchmark index and the peer group. All four regions were weak, with particularly negative returns coming from Pan Europe.Stock selection was poor, especially in energy (overweight Cairn Energy) and materials (overweight ArcelorMittal and Terra Industries). The valuation factor (the extent to which current share prices reflect future earnings expectations) struggled in the return forecasting measure, with negative returns in all four regions.News adjusted revisions (the impact on share prices of changes to analysts' earnings forecasts) was also negative, whilst research and development intensity (the impact of current research & development spending on future earnings) was positive. From a regional perspective, the portfolio asset allocation remained relatively unchanged, with the fund overweight North America and Asia and underweight Pan Europe.Minor changes at a sector level included a reduction in the exposure to financials from the slight overweight to slight underweight. The overweight positions in materials were trimmed once again, taking them more in line with the benchmark. The proceeds were used to increase the utilities holdings, taking the exposure from underweight to further neutral.