Despite some well-publicised downward moves during the month, these proved very short-lived and global stocks ended up tracking sideways in November, with the portfolio just behind. What volatility there was garnered disproportionate attention because it was the first sign that markets might break from a steady upward march seen since a late-April nadir. In the event markets recovered, and as returns have been so strong in recent times the downward move was really nothing much to write home about. The shape of the portfolio’s share price moves compared to the market did change in the month though. The more ‘defensive’ sector of Health Care companies was a relative benefit, and the Financials companies in the portfolio outperformed the market. Information Technology declined moderately for the portfolio, but was weaker in the market and thus bucked a long-standing trend by being a relative benefit to the fund.
In terms of individual company names, information services companies Wolters Kluwer and RELX declined. The market narrative continues to tussle with whether these businesses will be able to make the most of the new tools of AI, or be disrupted by them. We think the former is the more likely, and have been adding to these positions. Medical equipment maker Siemens Healthineers also declined on a slightly weak quarterly trading update. Revenues were a little soft, but more important were the impact of tariffs (which are manageable, but present), a lack of commitment to a mooted disposal of its diagnostics business in the near term, and the announcement by majority owner Siemens disposing of a significant stake. All of these concerns leave what is a market-leading company’s stock looking attractively valued. Double digit positive returns came from pharmaceutical company Roche, medical devices firm Medtronic, and medical testing lab outsourcer Sonic Healthcare. All of these businesses are growing well and coming from share price levels that look cheap. Banking software provider Jack Henry was also strong on the back of reassuring results.
Despite some well-publicised downward moves during the month, these proved very short-lived and global stocks ended up tracking sideways in November, with the portfolio just behind. What volatility there was garnered disproportionate attention because it was the first sign that markets might break from a steady upward march seen since a late-April nadir. In the event markets recovered, and as returns have been so strong in recent times the downward move was really nothing much to write home about. The shape of the portfolio’s share price moves compared to the market did change in the month though. The more ‘defensive’ sector of Health Care companies was a relative benefit, and the Financials companies in the portfolio outperformed the market. Information Technology declined moderately for the portfolio, but was weaker in the market and thus bucked a long-standing trend by being a relative benefit to the fund.
In terms of individual company names, information services companies Wolters Kluwer and RELX declined. The market narrative continues to tussle with whether these businesses will be able to make the most of the new tools of AI, or be disrupted by them. We think the former is the more likely, and have been adding to these positions. Medical equipment maker Siemens Healthineers also declined on a slightly weak quarterly trading update. Revenues were a little soft, but more important were the impact of tariffs (which are manageable, but present), a lack of commitment to a mooted disposal of its diagnostics business in the near term, and the announcement by majority owner Siemens disposing of a significant stake. All of these concerns leave what is a market-leading company’s stock looking attractively valued. Double digit positive returns came from pharmaceutical company Roche, medical devices firm Medtronic, and medical testing lab outsourcer Sonic Healthcare. All of these businesses are growing well and coming from share price levels that look cheap. Banking software provider Jack Henry was also strong on the back of reassuring results.