Performance update

Global equities, represented by the MSCI All Country World Index, pulled back marginally in November. It was a volatile month, as renewed concerns over stretched valuations and the sustainability of the AI trade sparked a sell-off in growth stocks. Bonds were broadly flat, and gold rose by 4.8% (in sterling terms), continuing its stellar run this year.

As we approach year end, year to date returns remain broadly positive. Equities have rallied strongly since April and are now 15% higher since the beginning of the year. Bonds have also contributed positively, up 5% hedged to sterling.

Portfolio returns for November ranged from -0.1% for Cautious Growth to 0.2% for Equity Growth. Year to date, Cautious Growth has returned 8.6%, Moderate Growth 9.5%, Long Term Growth 11.1% and Equity Growth 12.3%.

Source: Bloomberg, See market data section for 5-year returns.

Our tactical equity positioning has focused on reducing exposure to the concentrated and expensive U.S. market by diversifying into Europe, China, and Latin America (‘Latam’). Within US equities, we have tilted away from the mega caps, through an equal weight approach. Lastly, we have underweighted the dollar through a currency hedged equity position. The tactical calls worked well in November, Latam being the standout with a 3% outperformance. We doubled the weight to Latam last month, leading to a pronounced positive contribution in November.

Year-to-date, these tactical decisions have generated meaningful performance versus our benchmarks.

Alternatives also had another strong month, with gold and hedge funds outperforming bonds. The only detractor was our structured note on the Japanese yen, as the currency weakened against the pound.

Year to date, alternatives continue to perform remarkably well, returning 17% in aggregate and outperforming both bonds and equities. The strategic decision to allocate to hedge funds and gold, has been a significant driver of this outperformance.

As noted in previous letters, active management in US equities has been challenged this year. Market dominance by a few of the largest companies, AI-driven momentum, and a low-quality rally has created a difficult backdrop for fundamental, quality-focused stock pickers.

Outside the US, active managers have fared better, — particularly in emerging markets (‘EM’). The Wellington Emerging Market Research fund has outperformed the EM benchmark index by 4.5% year to date. Wellington’s portfolio consists of 15 industry portfolios actively managed by Wellington’s global industry analysts. Wellington operates a career analyst structure which enables the team to build expertise within a sector and develop an investment approach best suited to the sector they cover. Their process looks to exploit intra-industry dispersion and add returns through stock selection rather than through style, sector or country bets. The outperformance of the fund has been broad based across sectors and spread across the year to date rather than concentrated in one specific period.

Portfolio changes

There were no portfolio changes during the month.

This is our final investment committee letter for 2025. We will return in February with our regular monthly review, including a comprehensive look back at full-year performance for 2025. In the meantime, we wish all our clients a Merry Christmas and a Happy New Year, and as always, we thank you for your continued support and trust in the management of your assets.