After a prolonged period of strength, global markets experienced a more mixed November as uncertainty surrounding the longest-ever US government shutdown weighed on sentiment. A strong conclusion to the US earnings season failed to offset concerns around elevated equity valuations, triggering profit taking—particularly across US equities and the technology sector.
As a result, growth assets underperformed value, leading the Long Hold Growth-focused portfolios to lag peers during the month. In contrast, the Long Hold Income portfolios outperformed, supported by exposure to high-quality, value-oriented equities and higher-yielding fixed income, and proved more resilient amid uncertainty surrounding the UK Autumn Budget.
Heightened geopolitical tensions between China and Japan, alongside the broader technology sell-off, saw the OBI Volatility Managed portfolios give back some recent gains. However, relative resilience in UK and European equities helped offset losses. More defensive positioning across the VM portfolios limited downside relative to benchmarks during what was a notably volatile month.
With expectations for continued near-term volatility, elevated cash levels remain a key feature of the Volatility Managed portfolios. This positioning supports risk management while preserving flexibility to deploy capital should opportunities arise, helping to protect strong year-to-date performance as we approach the new year.
US Government Shutdown Ends
The record 43-day US government shutdown ended on November 13th after President Trump signed a funding bill extending government financing through to the end of January. The prolonged shutdown reduced visibility on the health of the US economy at a critical point, particularly as the labour market showed early signs of strain.
While shutdowns have historically had limited long-term market impact, delays to key inflation and employment data increased uncertainty around the path of US interest rates. This uncertainty initially pushed bond yields higher, as a more cautious tone from Fed Chair Powell reduced expectations for near-term rate cuts.
Later in the month, however, sentiment shifted as several US Federal Reserve officials adopted a more dovish stance. Investors rapidly adjusted rate expectations, allowing risk assets to recover some of their earlier losses and helping stabilise market conditions.
UK Autumn Budget
Ahead of the November 24th Autumn Budget, investor sentiment was unsettled by speculation around potential income tax rises and concerns that the Office for Budgetary Responsibility would downgrade economic forecasts. Fears that the Chancellor may need to raise up to £40bn to restore fiscal headroom heightened the risk of renewed bond market volatility.
The Budget ultimately focused on extending the freeze on income tax and national insurance thresholds, alongside a series of more targeted tax measures phased in over the forecast period. Updated projections downgraded growth and upgraded inflation expectations, underscoring the difficult environment facing the UK economy and the Bank of England.
While increases to the minimum wage may place additional pressure on corporate margins, the decision to rebuild fiscal headroom to £22bn was well received by markets. UK domestically focused equities responded positively, outperforming peers in the final week of the month.
Japan: Stimulus Amid Rising Tensions
Japanese equities have been consistent contributors to portfolio performance, although November saw increased volatility following a rise in geopolitical tensions between China and Japan. Remarks by Prime Minister Takaichi regarding Taiwan prompted a response from Beijing, including guidance discouraging travel to Japan—pressuring tourism and retail-related stocks.
Despite these headwinds, our outlook for Japanese equities remains constructive. The government continues to pursue pro-growth policies, while corporate reforms remain supportive of shareholder returns.
Domestically, Prime Minister Takaichi announced the largest fiscal stimulus package since the pandemic, totalling $117bn, aimed at shielding households from cost-of-living pressures. While rising debt levels unsettled bond markets, equity markets responded positively, recovering from early-month weakness to finish November in positive territory.
OCM Portfolio Performance and Outlook
2025 has been a strong year for investors, and we remain pleased with portfolio positioning heading into what could be a volatile year-end. The Long Hold Growth portfolios have benefited from exposure to higher-growth assets, particularly US and Emerging Market equities, although November’s technology-led sell-off weighed on performance.
Government bond markets were volatile early in the month, reflecting shifting US rate expectations, UK budget concerns, and rising Japanese debt levels. However, a softer tone from Fed officials, a broadly well-received UK Budget, and strong domestic demand for Japanese bonds saw yields finish the month marginally lower, reinforcing the diversification benefits of fixed income.
In commodities, oil prices remained sensitive to geopolitical developments, particularly around stalled peace negotiations between Russia and Ukraine and ongoing disruption risks to energy infrastructure.
Looking ahead to 2026, strong year-to-date index performance highlights the constructive backdrop for global markets. Through active management and selective asset allocation, portfolios have outperformed peer benchmarks while managing volatility effectively. While near-term risks remain, our medium- to long-term outlook is positive, and we believe the portfolios are well positioned to build on the strong progress made in 2025.
Past performance cannot be used as a guide to future performance and the value of your investment will fall as well as rise in value. You may not get back all your investment and the final value of your investment will depend on the performance of your portfolio. The actual performance of an individual client’s portfolio may differ due to different funds being used and being restricted in relation to certain asset allocations. Performance figures quoted include fund manager charges but exclude adviser, discretionary, custodian and switch charges. Unless stated, income is reinvested into the portfolio. The information contained in in this document is for information purposes only. It does not constitute advice or a recommendation or an offer or solicitation for investment. OCM Wealth Management Limited is authorised and regulated by the Financial Conduct Authority (FCA Registration No: 418826) OCM Asset Management is a trading name of OCM Wealth Management Limited
