30 November 2020
The Fund returned 6.18% during the month, behind the IA Flexible Investment sector average return of 7.32%.
Equity market returns were stronger during the month, buoyed by positive news regarding COVID-19 vaccines. High efficacy rates generated by these vaccines gave investors an early Christmas present as views moved forward to a world where economies and more importantly life in general could hopefully return to some sort of normality. The strongest performing equity markets were those considered to be more cyclical in nature, including Europe, the UK and Japan. Within the UK market, unsurprisingly the mid and small cap indices outperformed large cap given their higher gearing to an economic recovery. Within sterling fixed income markets high yield credit was the strongest performer given its higher correlation to equities. Investment grade indices also managed to deliver a positive return but government bonds lagged given the vaccine relief rally.
The Fund remains underweight its neutral allocation to equities although during the period that underweight position was narrowed. In particular, we increased our holdings in funds with a more value style bias to benefit from the potential cyclical upswing. Allocations were increased in the UK and Japan. Within the Europe ex UK equity allocation we added a new holding, the River & Mercantile European Equity fund. The manager, previously at Schroders, has a value bias, but a focus on real economy cyclicals rather than ‘dash for trash’ stocks.
This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.
The value of this investment can fall as well as rise and investors may get back less than they originally invested. Past performance is not necessarily a guide to future performance.
The Fund is suitable for investors who are seeking to achieve long term capital growth.
The tax treatment of investments depends on the individual circumstances of each client and may be subject to change in the future. The above is in relation to a UK domiciled investor only and would be different for those domiciled outside the UK. We strongly suggest you seek independent tax advice prior to taking any course of action.
Past performance is not a guide to future performance.