Global equities declined modestly in November as shifting Federal Reserve policy expectations and rising concerns about valuations of technology stocks pressured markets. Despite experiencing their sharpest correction since Liberation Day early in the month, US equity markets recovered with a late-November rally that helped the S&P 500 to achieve its seventh consecutive monthly gain in local-currency terms (though it declined in sterling terms as the pound gained against the US dollar). Meanwhile, expectations for a December rate cut rose sharply in the second half of the month, driven by concerns over weakening employment in the US, as the Chicago Fed estimated that unemployment rose while official statistics were delayed by the government shutdown.
Regional equity performance diverged over the month. European markets (0.7%) demonstrated resilience, buoyed by growing optimism around Ukraine peace prospects after President Trump’s comments suggested progress toward a potential deal. UK equities (0.4%) posted more modest gains as the government navigated its budget announcement, with 10-year gilt yields declining slightly on the day as fiscal headroom exceeded market expectations. In contrast, US equities (-0.8%) declined modestly despite the late-month recovery, weighed down by weakness in the technology sector where the “Magnificent 7” (-1.9%) fell. Japanese markets (-1.1%) struggled amid concerns over fiscal expansion, with 10-year Japanese Government Bond yields rising to 1.81%. The risk-off sentiment impacted emerging markets (-2.4%) and China (-3.3%), in part driven by a pull-back in technology-related stocks over the month.
The macroeconomic environment remained unsettled following the resolution of the 43-day US government shutdown in mid-November. The prolonged closure created a delay in federal economic releases – including jobs reports and inflation data – which complicated Federal Reserve policy decisions and added to market uncertainty. Fed policy expectations shifted throughout the month. The delayed release of key employment indicators, including data showing unemployment had risen to 4.4% in September 2025 – its highest level since October 2021 – contributed to shifting market sentiment around potential policy adjustments.
The underweight position in Softbank (-39.1%), a Japanese multinational investment holding company, helped relative returns in the Trust. Softbank announced a sale of its holding of $5.8 billion in Nvidia stock to fund further investments in artificial intelligence, highlighting the scale of capital required to finance the AI theme. The overweight position in Nvidia (-13.3%) detracted from performance. After reaching a $5 trillion market capitalisation earlier in the year, the chipmaker saw its shares fall amid reports that Meta was considering switching to Google’s Tensor Processing Units (TPUs) for AI workloads, threatening Nvidia’s dominance in the AI chip market.
We ended the month at a discount of 7.8%, narrowing from 9.1% in October. Net gearing continued to be conservative at 5.3% (with debt at fair value) for month-end.
As at 30 November 2025
