For UK investors once again the biggest influence on fund and portfolio returns over the last month was the sudden strengthening of the pound. Over the course of the month the pound rallied more than 5% against the US dollar, a result of the optimism over a possible Brexit resolution, hampering returns of overseas holdings as well as index-linked gilt funds. Overall this meant the BOTB was down an average of 2.1% for the month of October versus -1% for the average Mixed 40-85% Shares sector fund. However, there were some notable strong performances including VT Gravis Clean Energy Income, which is partially currency hedged.
Unsurprisingly, the trend for the BOTB to steadily reduce its unhedged US equity exposure continues this month, despite US equities hitting new all-time highs in dollar terms. The is reflective of a wider trend of reducing the BOTB's currency exposure across its overseas holdings more widely, while at the same time increasing the BOTB's domestic equity exposure.
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