November was a challenging month for investors to make decent returns, according to research by FE Trustnet, with large sections of the market posting losses for the period. 
While a month is a short period for investment, investors can draw a degree of insight from seeing what worked and what didn't while recent events are fresh in their minds.
With this in mind, FE Trustnet has started a new series where we will offer a range of snapshots showing how various factors such as investment style or market-caps compared with each other over the previous month.
In this first instalment, we look at November – when the market was closely watching the US election and saw controversial Republican candidate Donald Trump victorious after a hard-fought and often brutal campaign.
Asset classes
Source: FE Analytics
As the chart shows, November was a pretty lacklustre month for most parts of financial markets. Investor expectations of volatility jumped in early November as investors waited for the fiercely fought US election to take place but then fell sharply once the result was known, with the VIX index ending the month down significantly. Before the election, eventual victor Donald Trump being seen as a ‘bad’ result for markets but the reaction to him being voted in as US president was much more muted that originally feared. That said, most parts of the market failed to make gains over the month, including gold – which had been flagged as a beneficiary of a Trump victory. Commodities did make some gains, aided by strong performance from industrial metals and a rally in oil after OPEC’s decision to cut production.
Geographies
Source: FE Analytics
For UK-based investors, the US was the only place of the market where money was made last month with the S&P 500 making a positive total return in sterling terms. When local currencies are used, Japan is the clear winner – the Topix was up close to 5.5 per cent in yen terms. Europe was also down while the FTSE All Share dropped. Emerging markets, which had been the strongest performer for the bulk of 2016, sold off the heaviest amid concern about the impact of the protectionist policies that might come with a Trump administration.
Style
Source: FE Analytics
The growth and quality investment styles suffered in November, both losing close to 3 per cent over the month as investor caution prompted them to move out of equities. However, the value style – which is perceived as being riskier but has outperformed this year – did much better. This may be down investors anticipating an increase in inflation, as the value style tends to outperform in these conditions. The debate over whether value will start to outperform growth looks set to continue for some time.
Equity funds
Source: FE Analytics
In keeping with the US being in positive territory, it’s little surprise to see that the IA North America sector leads the pack of the major equity peer groups. The best performer within here was VT De Lisle America with its 12.53 per cent total return, followed by Dodge & Cox US Stock (7.66 per cent), Janus Opportunistic Alpha (7.25 per cent) and Investec American (7.04 per cent). IA UK Smaller Companies also did relatively well, with Cavendish AIM at the top after making 3.78 per cent. The IA Global Emerging Markets sector is at the bottom of the list; Carmignac Portfolio Emerging Discovery performed best after losing 3.23 per cent but at the bottom of the table is BMO LGM Global Emerging Markets Growth and Income, down 10.51 per cent.
Bond funds
Source: FE Analytics
As we saw at an asset class level, bonds struggled in November and this is reflected in the performance of fund sectors. The average IA Sterling High Yield fund performed the best with a loss of under 1 per cent. Within this peer group, six of its 32 members made a positive return – led by M&G Global Floating Rate High Yield and its 0.79 per cent gain. In keeping with what we’ve already seen, IA Global Emerging Market Bond funds came off worse after falling 7.5 per cent on average. Allianz Emerging Markets Flexible Bond got away with only losing 3.01 per cent, making it the peer group's best performer.
Multi-asset and specialist funds
Source: FE Analytics
IA Targeted Absolute Return funds have been popular among investors this year, owing to the general sense of nervousness hanging over markets. They were the best performers in this category of fund sectors, with RWC Asia Absolute Alpha at the top after making 4.57 per cent. Natixis H2O MultiReturns was up 3.17 per cent and City Financial Absolute Equity made 2.59 per cent. The IA Specialist sector came off worse, but this is a very mixed bag of funds. If we look inside the sector, we can see that the losses were hardest among gold equity funds, reflecting the fall in the yellow metal over the month. Investors in biotech funds fared the best after Candriam Equities L Biotechnology, Polar Capital Biotechnology and AXA Framlington Biotech made total returns of more than 7 per cent.
UK market-cap
Source: FE Analytics
UK investors focusing further down the market cap spectrum came out on top in November. The FTSE 250 and FTSE Small Cap (ex IT) indices both remained in positive territory although the month's total returns here are measured in basis points rather than percentage points. Large-caps suffered the most after the FTSE 100 fell by close to 2 per cent as investors shied away from international-facing businesses given the political risk being seen in many parts of the globe. That said, the FTSE 100 remains the leader over the year to date, with a total return of 13 per cent up to the end of November; small-caps were up 6.03 per cent while the FTSE 250 had only advanced 3.26 per cent.
UK industries
Source: FE Analytics
Only two of the FTSE All Share’s industries ended November in positive territory – basic materials and industrials. Basic materials stocks made the biggest gains of the month after the price of metals such as copper (which gained close to 17 per cent over the month), lead, zinc and nickel; as a group, industrial metals were up 8.26 per cent in November, against precious metals’ 10.52 per cent fall. Oil & gas managed to end the month broadly flat, thanks to the OPEC-inspired rally that helped recoup the losses seen earlier in the month. It was the telecommunications industry that suffered the worst fall. All three of the UK’s major telecom stocks dropped in November: TalkTalk fell 21.56 per cent, Vodafone Group was down 13.75 per cent and BT Group lost 5.01 per cent.