Clarion Investment Diary – November 2025

The Clarion Investment Committee met on 10 November 2025. The following notes summarise the main points of consideration in the Investment Committee discussions but have been updated to include commentary on recent events and the wider implications for financial markets.

Please click here to access our November Stock Market & Economic Commentary written by Clarion Group Chairman, Keith Thompson.

The Clarion approach to investment management

Our investment philosophy is guided by proven financial research and applied with care by our in-house Investment Committee. We do not chase trends or make predictions. Instead, we rely on evidence, structure, and oversight to manage wealth responsibly over the long term.

We focus on what can be controlled: diversification, discipline, and costs. This allows us to create efficient portfolios designed to weather uncertainty and deliver the returns that markets provide.

Our approach is built on five enduring principles, which together form the foundation of our Investment Philosophy.

Each of the five philosophy pillars reflects our commitment to managing your wealth with clarity, discipline, and care.

1) Evidence-based investing. Disciplined diversified portfolios deliver better long-term outcomes than chasing the latest market trend.

2) A systematic process. A structured repeatable process designed to remove guesswork and emotion.

3) Cost efficiency. We carefully select cost-effective investment solutions without compromising quality.

4) Independent oversight. Every decision is reviewed and challenged by our in-house Investment Committee, supported by Margetts Fund Management and Dynamic Planner.

5) A responsible perspective. Identifying risks and opportunities that could affect your wealth in the years to come and building resilience into client portfolios.

Economic Commentary & Market Outlook

The following is a summary of the major news & events since the last Clarion Investment Diary.

Economics

The US and China agreed a one-year temporary trade truce. The deal will see China pause restrictions on exports of rare-earth minerals and the US reduce the average tariff on Chinese imports from 57% to 47%, ease controls on technology transfers and halt an investigation into China’s shipbuilding industry, among other measures
The US and South Korea agreed a trade deal that will see reciprocal tariffs cut from 25% to 15% in return for South Korea agreeing to invest $350 billion in the US
The US Fed cut its interest rate target by a quarter point to a range of 3.75%-4.00%, in line with expectations
Fed chair Jay Powell said that another rate cut this year was “not to be seen as a foregone conclusion — in fact, far from it”. Market expectations of a rate cut fell on the news. The Fed is next due to meet on 10 December
The euro area economy grew by 0.2% from the second to the third quarter driven by growth in Spain and France. Output was flat in Germany and Italy
The European Central Bank kept its benchmark interest rates on hold, commenting that the outlook for inflation is “broadly unchanged”
Euro area inflation slowed by 0.1 percentage points to 2.1% in the year to September
The Bank of England kept interest rates on hold at 4% in a tight decision that saw four of nine policymakers vote for a cut to 3.75%
UK construction activity contracted at its fastest pace in over five years in October, according to estimates from surveys of purchasing managers, amid regulatory uncertainty
Chinese exports in October were down 1.1% from the same month last year, the first such fall since February
Canadian Prime Minister Mark Carney unveiled a budget that includes a sharp rise in borrowing to offset the economic effects of US tariffs and boost defence spending
Delayed US labour market statistics showed payrolled employment rose by more than expected in September, while unemployment also increased to a four-year high of 4.4%, highlighting mixed signals in the US labour market
UK inflation fell to 3.6% in the year to October, down from 3.8% in September. Investors now expect the Bank of England to cut interest rates in December
UK retail sales unexpectedly fell in October, the first monthly fall since May this year, with some retailers reporting that consumers were delaying spending prior to Black Friday sales
Consumer confidence remained stable in the euro area in November, while confidence fell in the UK ahead of the Autumn Budget
London house prices fell in September to their lowest level since December 2023, according to official statistics, amid higher mortgage costs and high property prices in relation to earnings compared with the rest of the UK
European Central Bank Chief Christine Lagarde warned that Europe’s economic prosperity is “geared towards a world that is gradually disappearing” and called for policymakers to strengthen the EU’s domestic economy
Japanese GDP fell 0.4% in the third quarter due to a fall in exports amid higher US import tariffs
New Japanese Prime Minister Sanae Takaichi announced a $135 billion stimulus package, including electricity subsidies and food coupons, in a bid to kickstart economic growth and support households from rising costs. Speculation about the announcement has increased Japanese long-term borrowing costs to their highest level since 2008
Taiwan’s National Science and Technology Council minister Wu Cheng-wen said that the US would not “punish” Taiwan’s semiconductor industry and would lower tariffs in return for supporting the development of the US chip industry

Business

The FT reports that US companies’ earnings are growing at the fastest rate in four years, defying fears that President Donald Trump’s policies would hit profits
Nvidia chief executive Jensen Huang warned that China was going to beat the US in “the AI race”, due to higher energy prices and more stringent regulations in the US
The EU said it was considering changes to its artificial intelligence law that passed last year amid concerns that stricter regulation than the US was discouraging investment
Tesla shareholders approved an agreement that will see chief executive Elon Musk receive up to $1 trillion in compensation if he meets stretching targets, including a valuation of $8.5 trillion and operating a million robotaxis
UK broadcaster ITV is in talks to sell its television business to Sky. Any potential deal may attract the attention of the competition regulator
Chinese exports of cars rose 23% last year to 6.4 million vehicles, 50% more than were exported by Japan, the world’s second-largest car exporter
Norway has suspended its ethical investment rules to allow its sovereign wealth fund to continue to invest in Amazon, Alphabet, and Microsoft despite their work for the Israeli government
US drugmaker Eli Lilly said that European governments should pay more for drugs or risk losing access to new treatments
US corporate earnings at listed companies grew 11% in the third quarter relative to the same period last year, the fastest rate of growth in four years
Food group Princes and British lender Shawbrook were both listed on the London Stock Exchange, a pickup after initial public offerings hit their lowest level in the last 30 years
Russian oil company Lukoil announced it would sell its foreign assets following new US sanctions
Virgin Trains was approved to run passenger services through the Channel Tunnel; Eurostar had until now been the sole provider of such services since the tunnel’s opening in 1994
Volkswagen reported a €1.3 billion loss in the third quarter and said that US tariffs and knock-on impacts could cost it €5 billion this year
The UK House Builders Federation warned that the government’s target to build 1.5 million homes in England by the end of the decade is too optimistic
Oilfield services group Petrofac entered administration following the loss of a major contract
A US judge ruled that Facebook owner Meta does not hold an illegal social media monopoly due to its previous acquisitions of Instagram and WhatsApp
UK-owned TV programme exports surpassed £2 billion for the first time, according to industry body Pact, highlighting strong demand for British content
UK chancellor Rachel Reeves asked the Competition and Markets Authority to investigate the cost of private dental treatments due to rapidly rising prices
The UK’s Financial Conduct Authority launched investigations into eight companies, including ticketing website Viagogo, over their online pricing practices
Bond Street in London was named as the most expensive location for retailers, beating international shopping destinations like Milan and New York, due to strong demand for premium retail space
The Greater Manchester Authority announced a £1 billion public investment fund to capitalise on strong growth in the city
University regulator the Office for Students said that despite announcements of higher tuition fees, 41% of higher education institutions are expected to report deficits in 2026/27
Channel Tunnel owner Eurotunnel cancelled future UK rail investments, including reopening a freight terminal, due to an alleged tripling of business rates
US pharmaceutical company Eli Lilly became the first pharmaceutical group with a $1 trillion stock market valuation

Global & Political Developments

A 28-point peace plan to end the war in Ukraine, drafted by the US and Russia without the involvement of Kyiv, was presented to Ukrainian president Volodymyr Zelenskyy. The plan includes demands that Ukraine cede territory it currently controls. Mr Zelenskyy said Ukraine faces a choice of “loss of dignity, or the risk of losing a key partner”
The FT reports that the status of the plan was thrown into doubt when President Donald Trump said over the weekend that it was not America’s “final offer” and US secretary of state Marco Rubio reportedly sought to distance Washington from it, before saying the US had produced it
The UK government confirmed that British-made military items had been found in Sudan but resisted calls for an arms embargo on the United Arab Emirates amid suggestions that the country may be responsible for arming the RSF
A number of deadly Israeli strikes in Gaza raised concerns that the fragile ceasefire with Hamas may not endure
BBC director general Tim Davie and the corporation’s head of news resigned over allegations of bias in its news coverage
The EU is pressing for the UK to make a financial contribution in return for an agreement on checks on plant and animal exports and energy trading, the FT reports. Norway and Switzerland already make similar contributions
A third Chinese aircraft carrier entered service with a fourth under construction, highlighting the growing military power of the world’s second-largest economy
The UK is sending a specialist RAF counter-drone unit to Belgium after repeated suspected Russian drone incursions above the country’s airports and military bases
The US Democratic Party won New York mayoral and two state governor elections amid low approval ratings for President Donald Trump
The EU reportedly failed to find a deal with Belgium to use frozen Russian assets to finance a €140 billion loan to Ukraine amid concerns over the state of Kyiv’s finances
The FT reports that following a Norwegian investigation that found that buses made by China’s Yutong, the world’s biggest bus maker, can be switched off remotely, the UK government is investigating Chinese-made electric buses in the UK for similar vulnerabilities
US president Donald Trump said he would approve Saudi Arabia’s request to purchase US F-35 fighter jets during a visit by Crown Prince Mohammed bin Salman. Currently, Israel is the only Middle Eastern country with F-35 jets
The UK government announced reforms to its migration policy and asylum seekers system, including changing the eligibility period for UK settlement, in an attempt to lower net migration to the UK
The UK’s official COVID-19 inquiry found that the UK government’s response was “too little, too late”, with delayed action causing an estimated 23,000 extra deaths
UK defence secretary John Healey warned Russia that the UK has eased the rules of engagement in the North Sea after a Russian spy ship sailed near British waters and shone lasers at a UK aircraft that was monitoring its movements
The UK’s domestic intelligence service, MI5, warned MPs that Chinese intelligence services are actively attempting to recruit people with access to the UK government
The UK government is planning to approve a controversial new Chinese ‘mega-embassy’ in London, The Times reports
The European Commission cut its demanded fee for the UK to join the EU’s rearmament programme to €2 billion, down from €6.7 billion, amid ongoing disagreements among the UK and EU members over the price for UK access to the scheme, the FT reports
Relations between Japan and China deteriorated following Japanese prime minister Ms Takaichi’s comments that a Chinese attack against Taiwan could be considered a “situation threatening the survival (of Japan)” that could trigger a Japanese military response

Strategy & Summary

The bond allocations within the portfolios target short and mid sections of the yield curve where capital appreciation is expected.
Index-linked bonds are also included in the bond allocations as a hedge against persistent inflation.
High-yield bond strategies are avoided as credit spreads do not currently offer a worthwhile risk premium.
The US equity market is underweighted on a valuation basis and strategies within the portfolio are particularly underweight mega-cap stocks.
The UK equity market is conversely overweighted on a valuation basis.
Asia, Emerging Markets and China are also overweighted as they trade below their long-term historical average. The IC believe these regions have the potential to grow their valuations in the long-term from a low base.
UK and US small and mid-cap equity allocations are also included based on an attractive entry point, which current valuations provide.
Reviewed the underperformance of the Schroder Institutional Pacific fund and resolved to address this, along with Baillie Gifford Pacific queries, at the next Investment Committee meeting.
Discussed a recent call with the Newton Global Infrastructure fund manager, noting the fund’s growth to £68 million and the bullish outlook for the sector, partly driven by AI-related electricity demand. Proposed increasing the allocation to the Newton Global Infrastructure fund to 2% at the next meeting, given its strong performance and the sector’s potential.
Analysed the Dimensional Emerging Markets core fund, noting its value tilt has caused it to lag behind growth-focused peers over the last year.
Compared the performance of all funds against their IA sector benchmarks, observing that most have performed well, particularly Dimensional European Value, which has significantly outperformed.
Highlighted the severe underperformance of the UK Buffettology fund, a previous holding which was sold in June 2022 due to concerns about performance, which has lost money over the past five years, contrasting it with the strong returns from Dimensional UK Value.
Confirmed the plan to hold the next review meeting on 11 December to finalise decisions on fund allocations.
No changes to the underlying funds were considered necessary as all funds are performing in line with expectations and within their risk-reward parameters.
Despite ongoing geopolitical tensions, we are cautiously optimistic about stock markets in 2025 and see valuation opportunities in the US beyond the big tech stocks and in markets outside the US, particularly the UK, Europe, Asia, and Emerging Markets, where valuations are generally more attractive, which will help to offset some of the economic headwinds and geopolitical uncertainty.