The Fund generated a -0.6% return in the month of November. By way of comparison, the (annual) return of the RBA cash rate + 6% equated to approximately +0.5% for the month, whilst the Australian stock market fell for the third month in a row, by -0.3% in November.
Volatility appears to have returned as the market digests what we describe as a potent mix of i) highly inflated asset prices; ii) enormous stimulus coming to an end; iii) supply constraints and resulting inflation, partially offset by iv) record levels of household savings rates. Furthermore, investor “twitchiness” continues to escalate, particularly in tech names, cryptocurrencies and meme stocks. In response we have been focusing our attention on the underlying drivers of the cash flows within the portfolio and identifying where exposures and opportunities exist in light of these market factors.