Best and Worst Performing Funds in November

Biotech booms while emerging markets suffer from political strife and a stronger dollar

Annalisa Esposito 2 December, 2019 | 1:01PM

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The Candriam Equities Biotechnology fund tops the list of best-performing Morningstar-rated funds for November.

The £1.5 billion fund is rated Bronze by Morningstar analysts and, as the name suggests, invests in the biotechnology sector with a growing exposure to large pharmaceuticals companies like Roche (ROG) and Novo Nordisk (NOVO). The fund has been lead by Rudi van den Eynde since its inception in 2000, and is up 30.5% year to date.

Morningstar analyst Jeffrey Schumacher rates van den Eynde's “experience, depth of knowledge, and wide industry network". The Candriam fund is not the only biotech specialist to make it into the top-performers list. The £1.4 billion Neutral-rated Franklin Biotechnology Discovery fund, which was in first position in October, has dropped to fourth position in November, delivering a return of 10.9% in the month. 

In a second consecutive strong month for biotech companies, the Nasdaq Biotechnology  index has continued to soar, rising from 3,076 at the beginning of October to 3,755 by the end of November. This is partly due to US drugmaker Amgen's plans to buy a 20% stake in a Chinese biotech company for $2.7 billion - Amgen (AMGN) makes up almost 8% of the index.

Best Performing Funds in November 

Fund Name

Morningstar Rating

Morningstar
Analyst Rating

Return (%)

Candriam Equity Biotech

5

Bronze

12.30

Baillie Gifford WW Discovery 

 

Silver

11.31

Baillie Gifford Global Discovery 

4

Silver

10.92

Franklin Biotechnology Discovery

3

Neutral

10.88

ASI UK Ethical Equity Institutional

4

Bronze

7.37

ASI UK Smaller Companies Institutional

4

Gold

7.22

PGIM Jennison US Growth 

 

Silver

6.81

Allianz Euroland Equity Growth 

 

Neutral

6.73

Merian UK Smaller Companies 

3

Gold

6.72

Polar Capital Global Tech 

 

Silver

6.32

Elsewhere, among the best performing funds, three discovery funds stand out. Two of these  are from the Baillie Gifford stable and have a Morningstar Analyst Rating of Silver. Baillie Gifford Worldwide Discovery and the Baillie Gifford Global Discovery which are up 34.5% and 27% respectively year to date and delivered double-digit returns over the past month. 

Among the top holdings in both porfolios are online supermarket Ocado (OCDO) and American’s largest online lending marketplace LendingTree (TREE). Morningstar analyst David Holder says the two funds are risky options “not for widows and orphans”, but present a "compelling and unique" global small-cap option. 

Despite a looming General Election, three UK funds made it into the top 10 in November: Bronze-rated ASI UK Ethical Equity Institutional, Gold-rated ASI UK Smaller Companies Institutional and Merian UK Smaller Companies funds.

Adrian Lowcock, head of personal investing at Willis Owen, thinks the UK market is starting to look more attractive; he says the outlook has changed notably over the month with the delaying of Brexit and scheduling of a General Election.

“From an October of chaos and uncertainty, the announcement of a General Election should have continued that uncertainty, but the polls suggest that a clear conservative majority is possible. This would remove the stalemate over Brexit and the inability for parliament to make any decisions,” he explains. A Conservative majority could be a boon for smaller UK companies and could even spark a stock market Santa Rally

The biggest funds in the top 10 list are the Silver-rated Polar Capital Global Tech and the Neutral-rated Allianz Euroland Equity Growth funds, with £2.7 billion and £2.5 billion in assets - both returned more than 6% in November.

Emerging markets currencies in trouble

At the other end of the spectrum, Global Emerging Markets funds dominated the bottom performers in November. In particular, Latin American funds struggled, with the Bronze-rated ASI Latin American Equity fund the weakest in the month, down 5%, followed by the Neutral-rated BlackRock Global Latin American fund, down 2.7%.

The region suffered as emerging market currencies and stocks recorded losses in November. Mounting political tensions in Latin America and failure to resolve the trade tariff situation between the US and China has dented investors appetite for these assets.

The Brazilian real had a tough month, at its lowest against the US dollar this year, amid disappointment over lack of progress by the Brazilian President Jair Bolsanaro. Emerging markets currencies are typically hit by a stronger dollar too, and the greenback has rallied as the US stock market has hit another record high. 

Worst Performing Funds in November

Fund Name

Morningstar Rating

Morningstar Analyst Rating

Return (%)

ASI Latin American Equity

4

Bronze

-5.06

BGF World Gold 

Bronze

-4.36

JOHCM Asia ex-Japan 

2

Bronze

-3.39

BGF Latin American 

3

Neutral

-2.76

BlackRock Gold and General 

4

Bronze

-2.58

Pictet-Emerging Local Currency Debt

3

Neutral

-2.56

GAM Multibond Local Emerging Bond 

Bronze

-2.29

Legg Mason BW Global Opportunistic

1

Silver

-2.14

BGF EM Local Currency Bond

Neutral

-2.04

LF Woodford Equity Income 

1

Negative

-1.90

JPM ASEAN Equity 

5

Gold

-1.78

The Chilean peso also fell to all-time lows against the dollar, prompting central bank interventions, and the Colombian peso traded at its weakest level ever amid anti-government demonstrations. 

It's not surprising that Global Emerging Market Bond funds had a bad month overall, with the Neutral-rated Pictet Emerging Local Currency Debt fund down 2.5%, followed by the Bronze-rated GAM Multibond Local Currency Debt and the Neutral-rated BlackRock Emerging Markets Local Currency funds.

Gold funds experienced some difficulties; the £1 billion BlackRock Gold and General and £3.9 billion Blackrock World Gold funds – both Bronze rated – were down 2.6% and 4.3% each in November. Lowcock comments: “November saw further profit taking in gold funds as investors rotated back into risk assets.”

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Annalisa Esposito  is a data journalist for Morningstar.co.uk

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