Another headline-grabbing month for both global politics and financial markets.
The big piece of news in November was the unexpected announcement of a draft withdrawal agreement between the UK Government and the EU. We believe the Pound is the investment type most sensitive to Brexit, so we have carried out some changes to protect your Plan. The next milestone is the Parliamentary vote where MPs will be allowed to vote on the controversial bill.
In the US, although very much expected, the 2018 midterm elections resulted in the Democrats taking back control of the House of Representatives from the Republicans. This means it may be more challenging for President Trump to get some of his policies passed during the next two years in office, although this was in line with market expectations.
Following a tough October, most stock markets saw upbeat returns in November, apart from the UK.
UK markets finished down -1.58%, influenced by sharply declining oil prices which negatively affected shares in BP & Royal Dutch Shell. The price of oil fell by 20% as analysts predict that demand will slow throughout 2019, coupled with greater supply, as OPEC and the US increase production.
US markets gained 2.04% despite some of the large tech stocks lagging the wider market, whilst EU stock markets were muted (-0.62%) due to concerns about the Italian budget, French protests and of course, Brexit.
Other worldwide stock markets, including Emerging Markets (+4.13%) and Asia Pacific (+2.88%), achieved some of the best monthly returns seen this year. Emerging economies are typically more sensitive to the oil price due to their volume of consumption, and it’s been suggested that the cheaper oil price was a key reason for the stronger performance of their stock markets.
In corporate news, British American Tobacco shares went up in smoke last month (-20%), after a report highlighted the US Food and Drug Administration (FDA) may ban menthol cigarettes, which generate about a quarter of their profits.
Against the major global currencies, the performance of the British Pound was slightly lower compared to the US Dollar (-0.13%) and Euro (-0.18%), but slightly higher versus the Japanese Yen (+0.42%).
Investment type performance breakdown
Performance was mixed among the investment types in your Plans this month, with commodities and bonds down -4.28% and -0.2% respectively. However, shares finished stronger (+1.12%) and Property was the best performer (+2.41%).
Summary with Plan details
Our investment team believe the outlook for investors remains optimistic in the medium to long-term. But, with Brexit edging closer, we made some adjustments to our Plans and added Mercer Global Shares Hedged fund, which tracks a global stock market and will help to insulate your investments against further fluctuations in the value of the Pound.
Our investment team always remain focused on keeping your investment plan on track and will be ready to act as opportunities arise.
Figures shown are based on a medium-risk (Confident) investment Plan.
Your investments can go down as well as up and you could get back less than you put in.