Portfolio Performance - November 2020

Our portfolio manager Daniel Greenhough gives us a summary of November 2020, which was a positive month for stock markets and performance across the board mainly as a result of the welcome news of a successful vaccine developed by both Pfizer and Moderna.

Portfolio Performance - November 2020
Source: Financial Express Analytics

You should be aware that past performance is no guarantee of future performance.

Please note: all numbers listed above and throughout this article are sourced from Financial Express Analytics, stated in GBP net of fees and accurate to the end of November 2020.

* The ARC PCI indices are based on the returns being generated by investment managers in the private client industry for discretionary run portfolios. More information can be found on their website here.

** The Rosecut models have an inception date of 28th February 2019.

Portfolio Performance

November was one of those months where something meaningful occurred. News broke early in the month, that Pfizer and then Moderna had found their vaccines to be effective in over 90% of cases. This made a bigger impact on markets than even the US elections.

It has led investors to price in a world where lockdowns are more likely to end after the first quarter of 2021. With this implying that global GDP Growth this year, will be higher than recent expectations – all the assets you would expect to benefit from this started to perform.

Examples of these assets include:

Energy, retail and property stocks (which we can also refer to as ‘value’ stocks)
Commodities such as oil and industrial metals

With these assets rising in value, even small losses on bonds could not prevent portfolios having one of their best months of the year.

Asset Class (i.e. bonds, equities, and alternatives) Performance

The European (ex UK) and UK stock markets are dominated by ‘old economy’ stocks such as oil producers, banks, consumer staples etc.

This contrasts with the US market and increasingly some of the Asian markets where technology companies form a significant part of the stock indices. Technology has been a clear benefactor of remote working required in these times.

This difference in the composition of the different stock indices has left the European and UK markets looking cheaper and to potentially outperform if the ‘old economy’ value stocks do well.

With vaccine news implying that the necessity of working from home may come to an end in the new year (although acknowledging many firms may continue just at a reduced rate) the unloved value stocks started outperforming.


November was also good for the sterling corporate bond market. The iShares Core £ Corporate Bond ETF that we hold finally moved ahead of the iShares Core Gilts ETF for the year.

Under normal market conditions this is what you would expect to see – as the corporate bond ETF should generally give a potentially higher return than government bonds to compensate for the higher risk of loss. Of course, 2020 has not been a normal year, and corporate bonds suffered in March, whereas government bonds appreciated.

Source: Financial Express Analytics

Table: Asset Class Returns to the end of November 2020 in GBP.

Note: In the above table UK government bonds are represented by the FTSE All-Stocks Gilts index and UK corporate bonds by the Bloomberg Barclays Sterling Aggregate Corporate index.

You should be aware that past performance is no guarantee of future performance.

The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested. This may be partly the result of exchange rate fluctuations in investments which have an exposure to foreign currencies.

If you would like take a look at past performance articles, you can read our September Performance and October Performance or find more insights on our Magazine page.