80-20 Best of the Best - movers and shakers

A total of 16 funds from May's Best of the Best Selection make it into June's selection. Below I list this month's selection in full with the 16 funds that regained their place in green while the new additions are in black.

In fact, the reason I have included the full list here is following a request to do so from an 80-20 Investor subscriber. Remember if you have any feedback or development requests for 80-20 Investor please let us know so that we can look to act upon them, as I have here.

June's Best of the Best Selection

(funds unchanged from last month are in green while new additions are in black)

Name	Sector	ISIN Code	Risk level
7IM - Moderately Cautious	Mixed Investment 0%-35% Shares	GB0033953497	Low risk
7IM - Unconstrained	Targeted Absolute Return	GB00B75MS619	Low risk
Aberdeen - European High Yield Bond	Sterling High Yield	GB00B77QLR32	Low risk
Aberdeen - European Property Share	Property	GB00B0H5MF69	High risk
Aberdeen - UK Smaller Companies Equity	UK Smaller Companies	GB00B07T4636	Medium risk
Artemis - Monthly Distribution	Mixed Investment 20%-60% Shares	GB00B74BQB01	Low risk
Aviva Inv - European Equity	Europe Excluding UK	GB0032494246	High risk
Aviva Inv - High Yield Bond	Sterling High Yield	GB00B3CGJ878	Low risk
AXA - Sterling Index Linked Bond	UK Index - Linked Gilts	GB00B0LLCP07	High risk
First State - Global Property Securities	Property	GB00B1F76L55	High risk
Franklin - UK Smaller Companies	UK Smaller Companies	GB00B7FFF708	Medium risk
GLG - Continental Europe	Europe Excluding UK	GB00B0119370	High risk
GLG - Japan CoreAlpha	Japan	GB00B0119933	Medium risk
Henderson - Japan Opportunities	Japan	GB0007683203	Medium risk
Henderson - UK Smaller Companies	UK Smaller Companies	GB0007447286	Medium risk
HSBC - Chinese Equity	China/Greater China	GB0000204395	High risk
JPM - Cautious Managed	Mixed Investment 0%-35% Shares	GB00B09RGK38	Low risk
Jupiter - Distribution	Mixed Investment 0%-35% Shares	GB0031294183	Low risk
Kames - Ethical Cautious Managed	Mixed Investment 20%-60% Shares	GB00B1N9DX45	Low risk
L&G - Global Emerging Markets Index	Global Emerging Markets	GB00B4KBDL25	High risk
M&G - Japan	Japan	GB0030938475	Medium risk
Neptune - UK Mid Cap	UK All Companies	GB00B3D7FD61	Medium risk
Old Mutual - Cirilium Conservative	Mixed Investment 0%-35% Shares	GB00B4LTHW43	Low risk
Old Mutual - UK Mid Cap	UK All Companies	GB00B1XG7999	Medium risk
PFS - TwentyFour Dynamic Bond	Sterling Strategic Bond	GB00B566LX69	Low risk
Threadneedle - China Opportunities	China/Greater China	GB00B1PRW734	High risk

For reference the funds from last month that dropped out of the 80-20 Best of the Best list are listed below. Many of them remain in the Best funds by Sector selection:

Name	Sector
7IM - AAP Balanced	Mixed Investment 20%-60% Shares
7IM - AAP Moderately Cautious	Mixed Investment 0%-35% Shares
7IM - Balanced	Mixed Investment 20%-60% Shares
Artemis - European Opportunities	Europe Excluding UK
Baring - Eastern Trust	Asia Pacific Excluding Japan
BlackRock - Asia Special Situations	Asia Pacific Excluding Japan
Jupiter - European	Europe Excluding UK
Schroder - Monthly High Income	Sterling High Yield
UBS - Global Emerging Markets Equity	Global Emerging Markets

What is interesting is that the new funds to join the Best of the Best Selection complement those that performed well last month, in particular those funds invested in Japan and UK equities. For example the Old Mutual UK Mid Cap fund was up over 5% last month alone. As a result the medium risk section of the selection now favours Japanese equities along with UK All Companies, UK Smaller Companies. Exposure to other equity markets, such as Europe and China, is gained through the high risk part of the selection reflecting the volatile nature of these markets right now.

Interestingly a UK index-linked fund makes an appearance in the high risk section. The last time this happened it was only fleeting as it dropped out the following month. The most likely reason for its momentum is that the recent bond market tantrum was caused by investors suddenly believing inflation (rather than deflation) was likely, which favours index-linked gilts so their values rallied. Index-linked gilts are a high risk play because of the way their returns can fluctuate. Yet it is ludicrous that most of the industry class them as low risk. That is why the 80-20 Investor algorithm looks at each fund's risk in isolation to determine it's true level of risk.

The Asset mix

If you analyse all the holdings across the new Best of the Best Selection it is now split:

UK Equities 22%
Global Fixed Interest 22%
Japanese Equities 12%
Asia Pacific Emerging Equities (including China) 8%
Property (mostly shares) 8%
European Equities 5%
UK Corporate Fixed Interest (i.e UK bonds) 4%

The remainder is made up of other international equities.

80-20 Investor Best of the Best fund performance – since inception August 2014

To make the comparison I have assumed that an investor bought all of the 80-20 Best of the Best funds in equal measure and switched them every month. The chart shows the level of outperformance since we began tracking the 80-20 Investor Best of the Best selection back in August 2014. The 80-20 selection is up 14.52% (green line) versus 10.55% for the average managed fund (red line) and 8.87% for the FTSE 100 (black line).