Last week was a broadly positive environment, which continued the buoyant mood of the markets over the course of November to date. Global Equities, as measured by MSCI All Country World Index (ACWI) rose +0.4% in local terms, but a strengthening Pound Sterling meant this was marginally negative for GBP investors. Riskier forms of Fixed Income continued to put in a good performance, with High Yield Bonds returning +0.6% over the week.

November has been a remarkable month in that we have seen the investment trends of the last year reverse violently. This has been driven by the announcement on the 9^th of November of the efficacy of the Pfizer vaccine against COVID-19 and has been sustained by subsequent successful vaccine announcements since then – notably the Oxford/ AstraZeneca vaccine results announced just this morning.

The market impact of these news developments and their implications for a return to economic and social normality have been remarkable. Value equities have strongly outperformed Growth equities, almost doubling their return for the month-to-date. Growth equities, spurred by expensive tech names and those that benefit from work-from-home, have vastly outperformed more economically sensitive Value names which tend to be comprised of Banks, Materials and Industrial companies. Similarly, we observed strong outperformance of UK and European markets vs their US, Japanese and Emerging Market equivalents which had previously outperformed.

In Fixed Income markets we saw a strong rise in interest rates (albeit from very low levels) and a pivot from safe government bonds to riskier high yield and emerging market debt. This was coupled with a weakening of the US Dollar, which has been quite strong.

We think it is reasonably likely that these trends will continue, but challenges remain in the short term. Cases of COVID-19 are rising quickly in the US, and this could serve to dampen sentiment as we come into the year end. What is now clear, however, is that the world has a variety of vaccines to choose from, which are effective at a variety of temperatures and formats. The market likely has quite a bit to go when it comes to fully pricing in a World inoculated against COVID-19.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.

The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.

All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete.  Unless otherwise specified all information is produced as of 23^rd November 2020.