The FTSE 100 shot up 5% on the day Pfizer/BioNTech announced they were the first to create a working vaccine and went on to rise a whopping 12.4% in November. Performance was even stronger down the scale, with the FTSE Small Cap Index +14.9% on the month.

We began the month (before the vaccine announcement) by adding to our investments in Greggs, Trainline, InterContinental Hotels Group and Beazley. All of these businesses we felt were being unfairly discounted on the basis of short-term COVID-19 concerns, with investors overlooking the long-term resilience and growth opportunity for these companies. The shares in all of these businesses went on to rise strongly after the Pfizer vaccine announcement.

Generally speaking, the leaders of this rally were generally more cyclical businesses and, quite frankly, a number of companies that we consider to be low quality. In the excitement of this ‘rotation into value’, many of the higher quality names that we favour, and that have been reliable performers this year, were left behind or even saw their share prices fall in value. One such company is our old favourite Halma, which we had a rare opportunity to add to on weakness. Halma has been a top ten position in the Fund for many years and we are more than happy to have topped-up our investment during the month.

Another long-term holding that has had a much more challenging year is Shaftesbury, the owner of a number of West End ‘villages’, including Chinatown, Carnaby Street and Seven Dials. We have been investors in Shaftesbury since 2006 and believe that their prime London assets are unique and irreplaceable. Nonetheless, COVID-19 has been more than the perfect storm for the retail landlord and Shaftesbury has been forced to raise equity twice this year. We supported both raisings at deep discounts to NAV and believe that we will be rewarded for persevering in time.

On the other hand, we sold out of our position in Prudential and reduced Rio Tinto as shares in both companies rallied in these positive markets. Prudential always had an enticing investment case, leveraging off the growth in demand for insurance in the Far East. However, this attractive opportunity is not being reflected in business that they are receiving or share price performance. We suspect that the politics of a British-listed business operating in China might be behind this.

We added one new investment to the Fund in November, but we are still in the process in building the position, so will keep quiet on it for the time being.