Minutes from the recent FOMC meeting indicated the Fed is content to remain on the sidelines for the rest of this year as the looser financial conditions resulting from rate cuts at three consecutive meetings feed through to the economy. This sentiment is echoed by other Central banks with the Bank of England and the Reserve Bank of Australia opting to keep their official Bank Rate at 0.75%. Global markets continued their upward trend in November as consumer confidence in the US remained high on the back of low interest rates, low gasoline prices and a stock market near record highs.

Politics continues to dominate the equity markets.  In the U.K. a series of recent election polls continue to show Boris Johnson’s Conservative Party has a significant lead over the opposition Labour Party. The current margin of support points to a parliamentary majority for the Conservatives which will allow them to execute their Brexit plan.  However, much can still change before the election on 12 December 2019.  In Germany, Chancellor Angela Merkel’s coalition is on a knife edge and in spite of the release of recent data showing a slight rebound in business confidence, economic growth is likely to be sluggish.

After falling by 3.7% in October, energy commodity prices increased by 5.3% in November resulting in a year to date increase of 2.7%. Non energy commodities did not perform quite as well, increasing by 2.3% and are currently up by 1.9% year to date. The major world markets as represented by the MSCI World Index and the S&P 500 continued their upward trend in November with these indices up by 2.63% and 3.40% respectively.  The UK, European and Asian markets were also stronger.  In the UK, the FTSE increased by 1.35% in local currency terms with the Small Cap Index up by 3.03%. The AIM All Share Index was the best performing of the UK indices, increasing by 3.25% while the Fledgling Index increased by only 1.0%.  Our portfolio of investments performed much better than the market, increasing by 5.64% during the month which, after allowing for expenses resulted in a 5.44% improvement in the NAV.  We utilised some of our surplus cash, adding to our position in Close Brothers, XP Power and LXI REIT during the month. Cash held currently comprises 3.9% of the portfolio.