How Did Funds Perform in November?

We have looked at which asset classes were the winners and losers in the month.

Annalisa Esposito 3 December, 2020 | 9:13AM
Facebook Twitter LinkedIn

glass

As good news about the development of a vaccine injected optimism into stock markets, a number of asset classes rocketed in November.

In our monthly heatmap, positive returns are depicted by shades of green - the darker the green, the bigger the gains. November was a mix of colours, with the chart below showing the returns of each asset class during the month (the size of the box denotes the level of assets under management in the category).

heatmap

According to Morningstar Direct data, equity funds generated the best results during the month, producing an average return of 11.4%. Taking a closer look at the different sub-sectors within the category, Energy equities performed particularly well, returning an average of 25.6%. Indeed, the best performing fund in the month was energy focused, up by almost 33%. This is a sharp turnaround from October when the energy sector tumbled by -9.5% amid new travel bans and restrictions. UK funds, which have had a bad run in the previous months, managed to recover in November, with the average fund belonging to the UK Large Cap Category up 14.5% in the month 

Also in green, but it a lighter shade, are allocation funds. Up on average 5.3%, these are multi-asset funds mostly made up of equities and bonds, and strong equity markets have had a positive impact on their performance.

Meanwhile, commodities and convertibles had a strong run, producing an average return of 4.2% and 5% respecitvely in the month. In particular, commodities funds have been boosted by the price of Brent crude rising from $38 to $48 a barrel.

Fixed income inched up by just 0.7%, which is to be expected as bond prices typically fall when equities rally, and fixed income funds fall out of favour when investors are more optimistic about the outlook for growth.

The only two asset classes in negative territory are money markets and property funds, which were in light red, down by 1% and 0.4% respectively.

What has Changed?

When comparing the past two months (bar graph below), two assets classes moved from the left right side of the line to the left one, equity and allocation. In particular, the rebound of the yellow section (equities) stands out, moving from a 2.3% loss to a 11.4% gain over just a month. The shift from October to November was just another reminder to keep a balanced and diversified portfolio.

graph

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.

Facebook Twitter LinkedIn

About Author

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