In November, the Trust had a disappointing month and we continued to struggle for performance.

Our main issue in recent weeks has been that we had been gradually increasing our exposure to areas of the market that we see as likely to benefit from the post-Covid recovery and, with the emergence of some restrictions in Europe and then the Omicron variant, this positioning hurt us. Our biggest losers included Stellantis, Faurecia and Safran. This has been a very frustrating month, but we see substantial value in our post-Covid recovery names and expect to benefit as the environment improves. Our biggest winners were the opposite side of this trade; Roche, Hermes, Delivery Hero and Zur Rose.

Over the past few weeks, we have been realigning the portfolio and this is now largely complete. We have worked to increase our cyclical exposure heading into 2022 (via companies such as SKF, Safran, Arkema and Total), we have reduced position sizing in our earlier-stage tech companies (Delivery Hero, Sinch and others) and we have balanced our sector exposure. The intention is to better position the portfolio to benefit from the post-Covid recovery whilst aiming for a more neutral cyclical/defensive tilt (we have been meaningfully overweight defensives) and a slightly more diversified portfolio (more stock specific risk, less factor/sector/thematic risk).

In summary, this has been a very disappointing period of performance, and we have taken action and made changes to our positioning. We will continue to retain balance in our exposures by considering two types of business for investment; those where we see high and sustainable returns that are undervalued by the market and those companies where we can see a material improvement in medium term business prospects.