I was immeasurably relieved by Athelney’s 0.9% reduction in unaudited NAV for the month of August, particularly as the FT Small Cap, Fledgling and AIM All-share fell by 2.4%, 4% and 2.5% respectively. For those tracing the cause of August’s stock market rout, most roads lead back to China.

The devaluation of the Renminbi, talk of currency wars and real concerns over the health (or otherwise) of the Chinese economy compounded the negative mood. Yet for all the attention on China, there are actually other matters which we should not forget. First, the timing and trajectory of rate rises in the US; second, China’s falling need for commodities and the effect that will have on a number of other economies; third, positive signs that the euro-zone area is starting to pick up and, fourth, the double-dip in oil prices which is so beneficial for many developed markets but deeply unhelpful to certain EMs. My view is that the weakness in commodities, metals, energy and so forth will continue although there is a case for major oils and their juicy dividends. This weakness will lead to lower inflation or a modest bout of disinflation and delay rate increases even further.

Finally, US short-dated market rates seem likely to rise whatever the Fed does which would put more pressure on emerging markets through dollar strength. ‘Buy on dips’ has been a sensible strategy for a long time now – I suggest that we all continue with it.