UK funds leading the pack, so we are buying

Saltydog has added more UK funds to its portfolios to take advantage of double-digit returns for UK fund sectors in November. 

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After a difficult October, with most stock markets seeing substantial losses, we saw a complete reversal in November. Equity markets around the world soared. In the UK, the FTSE 100 index had a particularly good month, rising by over 12%. This was its best one month return since 1989.

This has been reflected in our Investment Association sector analysis where all of the sectors investing in UK shares performed well. The sector with the highest return last month was UK Equity Income, gaining 15.7%. The UK Equity and Bond Income, UK All Companies and UK Smaller Companies sectors also saw double-digit growth.

In our demonstration portfolios we have increased our exposure to the UK sectors.

A few weeks ago we invested in the Merian UK Equity Income fund, from the UK Equity Income sector, and the Artemis UK Select fund, from the UK All Companies sector. We have subsequently increased our holdings. 

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Last week we added the HSBC Monthly Income fund to our Tugboat portfolio and the Threadneedle Managed Equity fund to our Ocean Liner portfolio.

These are both funds from the UK Equity and Bond Income sector, which was the leading sector in our Saltydog ‘Slow Ahead’ Group. The group is made up of sectors investing in bonds, or a combination of bonds and equities, and each week we rank them based on their returns over the previous four weeks. In the past, these sectors have been less volatile than ones just investing in equities.

Past performance is not a guide to future performance

The Threadneedle Managed Equity Income fund has not done as well over the last four weeks, but has done better than the majority of other funds over the last 26 weeks, which swayed our decision to invest in this fund. 

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With one in each portfolio, it will be interesting to see which one does best over the next few weeks.

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