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Mountainous Landscape

Ark Review of the Month

November 2022

Global Market

Global equity markets have rebounded from the October lows, with the UK FTSE All-Share Index up 7.1%, the MSCI Europe ex-UK Index up 6.9% and the US S&P 500 up 5.6% in November. Investors are expecting a recovery in demand from China which will also benefit its major trading partners in the neighbouring region, thanks to the easing of the country's Covid precaution measures over the past month. As a result, the MSCI Asia ex-Japan Index rose by 18.8%, while the MSCI Emerging Markets Index increased by 14.8%.


Bond markets also performed strongly in November, with the UK Gilt prices rising by 3.0%, the US Treasury prices rising by 2.7% and German Bund prices rising by 2.0%. Global investment-grade corporate bond prices also rose by 5.5%.


As of 30 Nov 2022:


UK 10 Year Gilt Yield 3.16%

US 10 Year Treasury Yield 3.61%

Germany 10 Year Bund Yield 1.93%

UK Market

Compared to April-June, GDP declined by 0.2% in the three months from July-September 2022. Service output increased by 3.2% in the three months to September compared to the previous year. Manufacturing output fell by 5.7%. In October, CPI inflation was 11.1%, higher than the 10.1% figure in September. However, the GfK consumer confidence index, a measure of consumer attitudes, stood at -44 in November 2022, up three points from -47 in October.

According to the latest estimates from the Office for National Statistics, government borrowing in the first seven months of this financial year was £84.4 billion, down £21.7 billion from the same period last year. By the end of October 2022, public sector net debt was equivalent to 97.5% of GDP, lower than last year's 98.0%.

Ark Insights

The November 2022 UK Autumn Statement was delivered in light of current weak economic growth, high inflation, and rising interest rates. From January 2023, the Energy Profits Levy on oil and gas companies will increase from 25% to 35% and remain in place until the end of March 2028, making the total tax on the sector 75%. The windfall tax will also be extended to electricity generators. A temporary 45% levy will be charged on their excess profits. However, these £14 billion worth of measures did not affect the market as badly as investors had previously feared. The temporary levy only applies to electricity generated in the UK and sold at a price above £75/MWh. Sub-sectors such as pumped storage hydroelectricity and battery storage are also exempt from the levy. This is good news for energy storage-themed funds such as Gresham House (GRID).

In addition to the windfall tax, the autumn statement also includes measures such as lowering the threshold for the 45% income tax rate and increasing the energy price freeze threshold to reduce government spending, etc. The pension contribution annual allowance remains at £40,000, and the lifetime contribution remains at £1,073,100. The state pension will rise by 10.1% from April 2023, in line with the latest inflation rate. The full new state pension will increase to £10,600 per year or £204 per week. Our CIO, Xia Wang, shared her views on the current pension and state pension policies with our corporate clients in our November corporate newsletter:

"A significant challenge in pension planning for many of Ark's clients is that their income comes from outside the UK or from within the UK but consists primarily of floating investment income and rental income rather than a fixed salary. As a result, their income may not meet the criteria for qualified earnings when calculating the pension contribution allowance. Can a person in this situation open a personal pension account and utilise the tax benefit by making contributions? The answer is yes, but professional planning is required as the client may need to generate a more stable salary income locally in the UK by setting up and running an asset management company. Also, clients may need to consider becoming company directors and employers to utilise tax allowances."

To read the full version of Xia's view on current pension and state pension policies and their impacts, please contact your advisor or email

As always, our Investor Relations team would be more than happy to help you with any queries.


The views expressed in this update are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument. The views reflect the views of Ark Investment Management at the date of this document and, whilst the opinions stated are honestly held, they are not guaranteed and should not be relied upon and may be subject to change without notice. Investments entail risks. Past performance is not necessarily a guide to future performance. There is no guarantee that you will recover the amount of your original investment. The information contained in this update does not constitute investment advice and should not be used as the basis of any investment decision. Any references to specific securities or indices are included for the purposes of illustration only and should not be construed as a recommendation to either buy or sell these securities or invest in a particular sector. If you are in any doubt, please speak to us or your financial adviser as appropriate.

Issued by Ark Investment Management Ltd which is authorised and regulated by the Financial Conduct Authority. 

© Ark Investment Management Ltd. Registered in England & Wales with the company number 09281759.

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