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Month in the Markets: November 2023

A round-up of the latest month in the markets.
The text 'A month in the markets' written on a blue background
Reading time: 6 mins

The Month in a Minute

📰 Overall: November was a month of widespread optimism in the markets, with the price of bonds and shares rising sharply.

💪 Benchmark Performance: Wealthify’s November performance was ahead of industry benchmarks. Despite favouring bonds, asset selection was a key driver for our outperformance.

📈 Market Movers: US Shares (+8.9%); UK FTSE 250 (+6.7%).

📋 Plan Summary: Plans with a higher allocation to shares performed better than those with a higher allocation to bonds.

🌍 Original Plans: Shares (+4.7%) and bonds (+2.8%) both delivered healthy returns.

🌳 Ethical Plans: Shares (+6.3%) and bonds (+2.7%) both delivered healthy returns.

⏲ Going Forward: Despite a strong month, we remain cautiously positioned — but confident that the opportunities we’ve selected will have a positive effect on Plans into 2024 (including our US bond allocation).

What a difference a month can make, as rising prices for bonds and shares in November saw renewed, widespread market optimism.

This optimism was driven by clear signs of a slowdown in inflation and economic activity. In turn, investors increasingly believe that peak interest rates are behind us — with interest rate cuts potentially coming sooner than expected.

As a result of these lower interest rate expectations, bond yields (the expected returns from a bond) fell, increasing the price of both bonds and shares. Our diversified approach produced strong results in November, as UK midcap shares and US longer maturity bonds led performance for shares and bonds, respectively.

We maintain our cautious approach of favouring bonds, as we think they offer better risk-reward than shares, which remain highly priced (and therefore vulnerable to potential greater-than-expected economic deterioration, especially following November’s rally).

We also continue to believe the share market underestimates the possible negative – and delayed – impact of severe monetary tightening on corporate earnings (something that would only strengthen bonds as a safe-haven asset).

The higher-for-longer narrative faded in November, which saw falling yields (income returned on investments) and rising prices in bond markets, as US 10-year government bond yields fell dramatically to around 4.4% (from a peak of 5% in mid-October).

This was mainly caused by bigger-than-expected drops in inflation, some signs of a cooling labour market, and moderations in consumer spending — the latter being a key driver of inflation.

Taking a closer look at the US, lower-than-expected inflation data was well received by the market.

Declining energy prices saw inflation fall to 3.2%, as core inflation – which excludes volatile food and energy components – also fell further than expected but remained higher at 4%. There were some signs of weakness in the economic data; which, combined with falling inflation, led to growing belief that inflation could potentially fall back to the 2% target — while avoiding a recession.

However, this ‘soft landing’ scenario is something we remain sceptical of for many reasons; for example, there’s no historical evidence of it being achieved when interest rates have been raised so sharply. In Europe, inflation was also softer than expected at 2.4%, as lower energy prices helped ease price pressures. The core inflation number was also significantly lower at 3.6%, in line with market expectations. There is increasing evidence of strain in the European economy, as credit dries up and both sentiment and activity data lower.

There was a similar story closer to home in the UK, with greater-than-expected drops in price pressures. Inflation fell to 4.6%, while core inflation fell to 5.7%. Services inflation (an important part of the core measure) remains a key focus for the Bank of England (BoE).

Despite ever-high wage growth, signs of progress for services inflation may help justify a pause on further rate hikes from the BoE. There’s still a long way to go to get inflation back to 2%, with rates likely to stay higher until this target is more in reach.


Most major indices posted healthy returns in November, causing global shares to climb by 9.1%, and global bonds by 5.0%.

Developed markets fared better than emerging ones in November; US shares delivered a gain of 8.9%, as economic resilience and falling inflation saw increasing confidence of a soft landing. European (+6.4%) and Japanese (+5.6%) shares also delivered strong returns in November.

The performance of UK shares proved interesting, as the smaller FTSE 250 posted a gain of 6.7%, while the larger FTSE 100 gained 1.8%. Emerging market shares (+7.9%) also delivered strong returns, with Chinese shares (+2.3%) lagging behind the rest.


It was an interesting month for currency, given the general depreciation of sterling in previous months. In November, this trend reversed, with sterling appreciating against the US dollar (+3.9%), euro (0.9%), and Japanese yen (+1.5%).

On the back of rising investor sentiment, the US dollar depreciated against most currencies, as investors looked for riskier assets.

Investment type performance breakdown

Shares delivered positive returns (+4.7%) for our Original Plans in November, with performance dampened somewhat by sterling’s appreciation against most major currencies. Our healthy allocation to the US helped drive gains, while the UK FTSE 250’s share allocation was another key positive.

In sterling terms, bonds also provided a healthy return of +2.8% for the month. Both US and UK corporate and government bonds were strong performers, as our decision to favour bonds with longer maturities (which are more sensitive to interest rate movements) delivered well.

In our Ethical Plans, shares gained +6.3%, with growth shares proving more sensitive to falling US bond yields. Bonds posted a gain of +2.7%, benefitting from the good performance of UK short-term bonds. All major asset classes delivered positive returns in November, with our diversified approach benefitting from many different areas, in both Ethical and Original Plans.

Summary with Plan details

The market’s shift to riskier assets in November meant Plans with a higher allocation to shares, performed better than those with a higher allocation to bonds. All Plans delivered healthy, single-digit monthly returns.

Our Investment Team continue to actively monitor the financial markets and their impact on Plans — and are always ready to act in your best interests to events as they unfold. We are constantly evaluating new market information and drivers to keep your Investment Plan on track.

It’s important to remember that it’s normal for markets to go up and down, with periods of volatility to be expected when you invest. As always, we continue to look for opportunities to position your investments, with the goal of protecting your money and achieving your long-term objectives.

Wealthify does not provide financial advice. Please seek financial advice if you are unsure about investing.

Please remember the value of your investments can go down as well as up, and you could get back less than invested. Past performance is not a reliable indicator of future results.

Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.

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