Market activity in November was dominated by news of successful Covid-19 vaccine trials, with the accompanying hope that these would allow a return to normal life and associated levels of economic activity. As might be expected, the share price gains were weighted most strongly towards value stocks that had been most severely impacted by the pandemic, rather than growth stocks which have fared better and sit at comparatively high valuations. In the UK, we would expect this trend to continue in the short-term, particularly if a trade agreement can be decided between the EU and the UK, which may result in some short-term relative underperformance in the Fund given its growth bias.
Our best performer in the month was Elementis, buoyed by a takeover approach by Minerals Technologies (subsequently increased), but rejected by the Board on the grounds it undervalues the company. Also performing well was IG Design, which benefitted from both the vaccine news and an interim report which was ahead of market expectations. Finally, Inspecs, the designer, manufacturer and distributor of eyewear frames, performed strongly as it announced a fundraise to acquire Eschenbach, a German competitor. Our poorest performer of the month was our largest holding, Future. Despite announcing full-year results ahead of expectations, the market reacted poorly to the proposed acquisition of GoCo plc. Additionally, we saw the underperformance of stocks exposed to the treatment of or testing for Covid-19, namely Synairgen and Avacta.
On the buy side, our largest purchases were the addition of two new holdings: Randall and Quilter, the speciality insurance company, and The Pebble Group, a former holding which is well placed to benefit from any normalisation of economic activity. We also supported the Inspecs fundraise and added to our Brooks MacDonald position. On the sell side, we exited CPL Resources (after a recommended takeover approach at the start of the month) and sold down our Codemasters holding (also subject to a bid). Finally, we reduced our Weir position given the strong performance since the announced sale of their Oil and Gas business.