Biotechnology funds generated the strongest total returns for investors during November, FE fundinfo data shows, although there were also some UK equity strategies sitting at the top of the monthly performance tables for the entire Investment Association universe. 
November was another positive month for markets on the whole, with central banks loosening monetary policy, some progress being made in the trade negotiations between the US and China, and fears of a looming global recession easing.
When it comes to the UK market, there was comfort in signs that the Conservatives looked likely to win a majority in the December general election, which could end the deadlock in parliament and ease the uncertainty around Brexit.
At a market level, the MSCI World index made a 2.82 per cent total return in November (in sterling terms) while the 3.60 per cent was up 3.6 per cent. However, better sentiment towards the UK economy was shown through the 4.15 per cent gain in the FTSE 250 and the 3.30 per cent rise in the FTSE Small Cap.
Source: FE Analytics
The table above shows how this was reflected in the various Investment Association fund sectors.
Improved investor sentiment and renewed hopes for the global economy led to strong returns from technology funds and those focused on smaller companies during November.
In addition, the two main UK equity sectors – IA UK All Companies and IA UK Equity Income – posted decent monthly total returns and both outperformed the IA Global sectors. This is at odds with what investors have actually been buying as recent years have seen money flow out of UK funds and into global strategies.
However, fixed income funds posted some of the worst returns of the month. The average fund in the IA Global Emerging Markets Bond sector made a 0.90 per cent loss in November, IA UK Index Linked Gilts fell 0.79 per cent and IA UK Gilts was down by 0.63 per cent.
Adrian Lowcock, head of personal investing at Willis Owen, said: “Perhaps it is not surprising that as investors grew more confident and optimistic with regards to the outlook for the global economy.”
Turning to the performance of individual funds in November, FE Analytics shows biotechnology funds dominate the performance tables with four strategies making total returns in excess of 10 per cent.
Source: FE Analytics
“Biotech funds, led by Pictet Biotech, topped the list best-performing funds in November having woken from a period of slumber,” Lowcock added.
“This appears to be a combination of a rising tide lifts all boats and a growing belief that no matter who wins the 2020 presidential election, the impact of Medicare for all is not going to have as big effect on the biotech industry and first believed.”
The $1.4bn Pictet Biotech fund, which is managed by Lydia Haueter and Tazio Storni, has a mandate to invest in biotechnology companies across the globe although – like many of its peers – has the bulk of its assets in US names.
The fund has made a 46.48 per cent total return over the past three years. However, it operates in a relatively risky part of the market – it’s annualised volatility over that period was 20.20 per cent.
In keeping with the stronger performance of UK equities during the month, Liontrust UK Opportunities, Liontrust UK Mid Cap, ASI (AAM) UK Smaller Companies, LF Gresham House UK Multi Cap Income and Premier UK Growth were some of the funds posting the highest total returns of the entire Investment Association universe.
Source: FE Analytics
The worst returns of November 2019 came from gold and Latin American strategies.
Gold is a classic safe haven asset and tends to perform strongly when investor sentiment is running low and portfolios are taking a more defensive tilt. Last month, however, sentiment improved and allocations to the yellow metal were reduced.
Lowcock said: “November saw further profit taking in gold funds as investors rotated back into risk assets. MFM Junior Gold once again featured at the top of the of the worst performers list along with LF Ruffer Gold.
“Latin American funds dominated the worst performers list. The Brazilian real had a tough month following, disappointment in the progress being made by the Brazilian president Jar Bolsanaro hit the currency harder than the stock market but falls in both impacted returns from a sterling investor perspective.”