Factsheet: November 2020
Markets have been positively Influenced by the news on the development of vaccines against COVID-19 and have relegated the ongoing disputed U.S. election results to insignificance resulting in an excellent month of November, with the S&P 500 gaining 9.65% and the Dow Jones 8.77%.
Sector rotation was less aggressive than in Europe, despite some stocks which have been lagging behind, such as Boeing and Carnival Cruises, recording historic rebounds (with gains of 46% each), but still remaining way below their valuation levels at the beginning of the year.
The oil and gas sector was the big winner of the month with a 37% increase, boosted by a recovery in crude oil, in contrast to gold and its mines which dropped by 6% due to investors liquidating gold stocks accumulated during the pre-vaccine uncertainty period.
About the Fund
Despite a lack of exposure in the sectors benefiting from the significant technical rebound, the fund only slightly tailed the indices with a performance of +8.51% over the month.
The only dark spot was Becton Dickinson (Healthcare), which declined by 3% due to defective Covid tests. Among the winners, IHS Markit, one of the world leaders in economic and financial statistics, gained 16%, supported by a buyout offer from S&P Global (which we also hold in our portfolio) at a valuation of $44 billion.
With lesser performances, Facebook and Microsoft (which gained 3% and 5% respectively) were the primary victims of the sector rotation, having been the big winners during the pandemic period. It is not impossible that the relative underperformance of these stocks continues offering opportunities to reinforce these holdings.
The end of the year is approaching and, even if December could hold other surprises, a clear conclusion can be drawn: if at the beginning of 2020, we had announced all the upcoming events with the most incredible foresight (the first wave of the pandemic, the lock down, the second wave, the renewing confinement, a complex US election and a world economy practically at a standstill), without a doubt, no one would have chosen to invest in the stock market.
In such a 'chaotic' world, predicting complex future phenomenons is an impossible task. The only way to mitigate risk on the stock market is therefore to invest in top-quality companies, capable of weathering all kinds of challenges and emerging from them stronger.
This will therefore continue to be our precise philosophy over the coming years.
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