November's strong rally caught many investors by surprise after a weak October, turning many of the funds that were at the bottom of the pile into winners, and pushing former high performers into the list of laggards. A Biden win in the US election and perhaps more importantly, a flurry of positive announcements on a coronavirus vaccine, pushed investors into bullish mode.
“Who would have guessed at the start of 2020 that the biggest driver of global markets in November would have been news of virus vaccines and more importantly the efficacy of them?,” says Ben Yearsley, director at Shore Financial Planning. “How many people at the start of the year had ever used the word efficacy? The announcements by Pfizer, Moderna and AstraZeneca turbo charged markets, even though widespread vaccinations won’t occur until well into 2020.”
During the November surge in equity prices, the best performing fund in the month skyrocketted by 33%, while the worst performing one fell by over 9%.
Best Performing funds
| Fund | Analyst Rating | Morningstar Category | Return (%) |
| BGF World Energy | Neutral | Fund Sector Equity Energy | 32.9 |
| Ninety One UK Special Situations | Neutral | Fund UK Flex-Cap Equity | 29.2 |
| Metropole Selection | Neutral | Fund Europe Large-Cap Value Equity | 28.2 |
| JOHCM UK Equity income | Silver | Fund UK Equity Income | 25.6 |
| Schroder European Recovery | Neutral | Fund Europe ex-UK Equity | 25.5 |
| Schroder Recovery | Silver | Fund UK Flex-Cap Equity | 25.4 |
| Magallanes V.I. UCITS Iberian Equity | Silver | Fund Spain Equity | 24.4 |
| Schroder Income | Bronze | Fund UK Equity Income | 24.0 |
| Man GLG Undervalued Assets Profl | Silver | Fund UK Flex-Cap Equity | 23.3 |
| BGF World Financials | Neutral | Fund Sector Equity Financial Services | 22.8 |
Topping the table is the Neutral-Rated BGF World Energy, which has produced a 33% return during the month. The fund invests in companies in the exploration, development, production and distribution of energy, which have been helped by the bounceback in oil prices in the autumn. “Many stats show car usage in the US well above 90% of pre-pandemic levels,” says Yearsley.
This positive result, however, was not enough to offset the negative performance during the rest of the year – the fund is still down by 29% in 2020, as the energy sector was among the largest victims of the Covid-19 pandemic, with demand for oil strongly down.
In November, the FTSE Oil & Gas sector topped the leaderboard in the UK rising by 31.6% on the back of the price of Brent crude rising from $38 to $48 a barrel. Yearsley points out that even "the poor beleaguered pound" rallied against the yen, euro and US dollar – the latter depreciated over 3% against sterling.
In second position is the Neutral-Rated Ninety One UK Special Situations, which was up by 29.2% – a sure sign that value investors had a good month, with the style looking to stage a susttainable comeback. With UK funds often having a strong value tilt, half of the names in the table belong to a Morningstar UK Equity category after a bruising year for UK funds.
Three European funds have also performed particularly well in November. These are the Neutral-Rated Metropole Selection, Schroder European Recovery and the Silver-Rated Magallanes V.I. UCITS Iberian Equity.
Lastly, the Neutral-Rated BGF World Financials was up 22.8% over the month, as financial services companies came back into favour as investors upgraded their forecasts for economic recovery.
Worst Performing Funds
Gold funds, which have experienced an extensive rally during the year, were down during the month. Morningstar analyts say there a couple of reasons not to invest in this precious metal. Bond and absolute return funds were also in the doldrums.
| Fund | Analyst Rating | Morningstar Category | Return (%) |
| BGF World Gold | Bronze | Fund Sector Equity Precious Metals | -9.3 |
| BlackRock Gold and General | Bronze | Fund Sector Equity Precious Metals | -8.7 |
| AQR Mgd Futures UCITS | Bronze | Fund Alt - Systematic Futures | -5.9 |
| BSF European Absolute Return | Negative | Fund Alt - Market Neutral - Equity | -3.5 |
| PIMCO GIS US Short Term | Silver | Fund USD Diversified Bond - Short Term | -3.2 |
| BNY Mellon Absolute Return Equity | Neutral | Fund Alt - Market Neutral - Equity | -3.1 |
| Templeton Asian Bond | Neutral | Fund Asia Bond - Local Currency | -3.1 |
| BGF US Government Mortgage | Neutral | Fund USD Government Bond | -3.1 |
| Templeton Global Bond | Bronze | Fund Global Flexible Bond | -3.0 |
| MFS Meridian US Government Bond | Negative | Fund USD Government Bond | -3.0 |
It's not surprising then that two gold funds are at the bottom of the pile in November - the Bronze-Rated BGF World Gold and BlackRock Gold and General, which tumbled by 9.3% and 8.7% respectively. However their year-to-date performance is still positive – they have both produced 18.9%. “Clearly those investors who bought in much earlier in the year are still sitting on nice gains,” says Yearsley.
Also, some alternative and three US fixed income funds are among the worst performers of November. Bond prices fall when equities rallly, and fixed income funds fall out of favour when investors are more optimistic about the outlook for growth.
November was a clear reminder that you need balance in your portfolio. “Some of the written off funds and sectors were the biggest winners,” says Yearsley. “If a Brexit deal is imminently signed you could see the UK being the market to follow in 2021 as on many measures it looks good value against global peers.”
