Commentary
Last time, I wrote that February 2020 will be talked about for years to come, as it turns out March may be talked about even more so. Markets capitulated further with all asset classes tumbling (except cash and US/UK government bonds). Having said that, even government bonds tumbled as much as 11% during March, before rallying to finish the month up 2.09%.
As a collective, the BOTB list for March finished on average down 11.40% which is on a par with the -11.10% for the average fund from the Mixed Investment 40-85% Shares sector.
Three funds from March's BOTB made a profit during the month and the next best performer was Baillie Gifford Positive Change as shown below. All four funds retain their place in April's BOTB.
| Fund | March % return |
| Vanguard UK Long Duration Gilt Index | 2.66 |
| Royal London UK Government Bond | 1.28 |
| AXA Framlington Biotech | 1.2 |
| Baillie Gifford Positive Change | -2.96 |
In fact they are the only funds that do retain their place on the BOTB. We are currently in the midst of one of the most severe sell-offs in decades and have not yet regained the previous uptrend. As such the momentum is in government bonds and not stock markets at present, although this could change. If you recall 97% of the funds available to DIY investors have lost money during this bout of market weakness. Those funds that have fared the best usually have exposure to one or more of the following
- the pound/dollar exchange rate
- US treasuries and UK gilts
- Technology stocks (especially those companies that everyone in lockdown is using) which have held up better during the market crash, albeit having still lost money
As such the BOTB asset mix has changed dramatically with now only a 27% exposure to equities. Interestingly this resembles the Perfect ISA portfolio which yet again is on for producing a positive return this tax year despite the market crash.
The BOTB has also introduced some exposure to Chinese equities and Asian equities as they have been among the best performing equity markets during the crisis as shown in the latest 80-20 Investor growth heatmap. UK equities have been removed completely for now.
At the foot of this article, you can see how the 80-20 Investor selection continues to outperform the professional fund managers as well as the market since its launch over five years ago.
Below I list this month's selection in full with the 4 funds that regained their place in black while the new additions are in green. As usual, I have included the full list sorted alphabetically by name and then by risk category.
April's Best of the Best Selection - (A-Z by fund name)
(funds unchanged from last month are in black while new additions are in green)
| Name | Sector | ISIN Code | Risk |
| Allianz Gilt Yield | UK Gilts | GB0031383283 | Medium risk |
| Allianz Strategic Bond | Sterling Strategic Bond | GB00B06T9362 | Medium risk |
| Artemis US Absolute Return | Targeted Absolute Return Retail | GB00BMMV5N27 | Low risk |
| ASI (AAM) Sterling Government Bond | UK Gilts | GB00BWK26Q79 | Medium risk |
| ASI Sterling Bond | Global Bonds | GB00BWK26Y53 | Medium risk |
| ASI UK Government Bond | UK Gilts | GB00B6WZXS38 | Medium risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| AXA Sterling Strategic Bond | Sterling Strategic Bond | GB00B02Y6L20 | Low risk |
| Baillie Gifford Long Term Global Growth Investment | Global | GB00BD5Z0Z54 | High risk |
| Baillie Gifford Positive Change | Global | GB00BYVGKV59 | High risk |
| Barclays Sterling Bond | Sterling Strategic Bond | GB00B72Y6K08 | Low risk |
| BlackRock European Absolute Alpha | Targeted Absolute Return | GB00B4Y62W78 | Low risk |
| BNY Mellon International Bond | Global Bonds | GB0006779655 | Medium risk |
| HSBC UK Gilt Index | UK Gilts | GB00B4581C50 | Medium risk |
| Janus Henderson Inst Overseas Bond | Global Bonds | GB0007673055 | High risk |
| JPM Global Ex UK Bond | Global Bonds | GB0030877210 | Low risk |
| JPM Global Macro | Targeted Absolute Return | GB00B09RGL45 | Low risk |
| Kames UK Equity Absolute Return | Targeted Absolute Return | GB00B504CH73 | Low risk |
| LF Canlife UK Government Bond | UK Gilts | GB00BLDYKJ43 | Medium risk |
| Liontrust Global Technology | Technology & Telecommunications | GB00BYXZ5N79 | High risk |
| Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| Royal London International Government Bond | Global Bonds | GB00B45XHL18 | Low risk |
| Royal London UK Government Bond | UK Gilts | GB00B881TW52 | Medium risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| T. Rowe Price Dynamic Global Bond | Global Bonds | GB00BD0NLR34 | Low risk |
| T. Rowe Price Global Technology Equity | Technology & Telecommunications | GB00BD446K01 | High risk |
| Threadneedle China Opportunities | China/Greater China | GB00B1PRW734 | High risk |
| Threadneedle Global Bond | Global Bonds | GB0001533685 | High risk |
| Troy Asset Management Ltd Trojan Ethical | Flexible Investment | GB00BJP0XX17 | Medium risk |
| Vanguard UK Long Duration Gilt Index | UK Gilts | GB00B4M89245 | High risk |
April's Best of the Best Selection - (grouped by risk)
Here is April's shortlist grouped by their risk category (funds unchanged from last month are in black while new additions are in green):
| Name | Sector | ISIN Code | Risk |
| Artemis US Absolute Return | Targeted Absolute Return Retail | GB00BMMV5N27 | Low risk |
| AXA Sterling Strategic Bond | Sterling Strategic Bond | GB00B02Y6L20 | Low risk |
| Barclays Sterling Bond | Sterling Strategic Bond | GB00B72Y6K08 | Low risk |
| BlackRock European Absolute Alpha | Targeted Absolute Return | GB00B4Y62W78 | Low risk |
| JPM Global Ex UK Bond | Global Bonds | GB0030877210 | Low risk |
| JPM Global Macro | Targeted Absolute Return | GB00B09RGL45 | Low risk |
| Kames UK Equity Absolute Return | Targeted Absolute Return | GB00B504CH73 | Low risk |
| Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| Royal London International Government Bond | Global Bonds | GB00B45XHL18 | Low risk |
| T. Rowe Price Dynamic Global Bond | Global Bonds | GB00BD0NLR34 | Low risk |
| Allianz Gilt Yield | UK Gilts | GB0031383283 | Medium risk |
| Allianz Strategic Bond | Sterling Strategic Bond | GB00B06T9362 | Medium risk |
| ASI (AAM) Sterling Government Bond | UK Gilts | GB00BWK26Q79 | Medium risk |
| ASI Sterling Bond | Global Bonds | GB00BWK26Y53 | Medium risk |
| ASI UK Government Bond | UK Gilts | GB00B6WZXS38 | Medium risk |
| BNY Mellon International Bond | Global Bonds | GB0006779655 | Medium risk |
| HSBC UK Gilt Index | UK Gilts | GB00B4581C50 | Medium risk |
| LF Canlife UK Government Bond | UK Gilts | GB00BLDYKJ43 | Medium risk |
| Royal London UK Government Bond | UK Gilts | GB00B881TW52 | Medium risk |
| Troy Asset Management Ltd Trojan Ethical | Flexible Investment | GB00BJP0XX17 | Medium risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| Baillie Gifford Long Term Global Growth Investment | Global | GB00BD5Z0Z54 | High risk |
| Baillie Gifford Positive Change | Global | GB00BYVGKV59 | High risk |
| Janus Henderson Inst Overseas Bond | Global Bonds | GB0007673055 | High risk |
| Liontrust Global Technology | Technology & Telecommunications | GB00BYXZ5N79 | High risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| T. Rowe Price Global Technology Equity | Technology & Telecommunications | GB00BD446K01 | High risk |
| Threadneedle China Opportunities | China/Greater China | GB00B1PRW734 | High risk |
| Threadneedle Global Bond | Global Bonds | GB0001533685 | High risk |
| Vanguard UK Long Duration Gilt Index | UK Gilts | GB00B4M89245 | High risk |
The funds that dropped out of the Best of the Best Selection
For reference, the funds from last month that dropped out of the 80-20 Investor Best of the Best list are listed below.
| Name | Sector | ISIN Code | Risk |
| ASI European Real Estate Share | Property Other | GB00BWK26907 | Medium risk |
| ASI Strategic Bond | Sterling Strategic Bond | GB00BWK27Z36 | Low risk |
| ASI UK Real Estate Share | Property Other | GB00B0XWNN66 | High risk |
| Close Select Fixed Income | Sterling Strategic Bond | GB00BD6R7Y87 | Low risk |
| First State Diversified Growth | Flexible Investment | GB00BVXC2S15 | Medium risk |
| First State Emerging Markets Bond | Global EM Bonds - Hard Currency | GB00B6R3H571 | Low risk |
| GAM Credit Opportunities GBP | Sterling Strategic Bond | GB00BYQJ5G92 | Low risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| JPM UK Smaller Companies | UK Smaller Companies | GB0030880255 | High risk |
| Kames Ethical Cautious Managed | Mixed Investment 20-60% Shares | GB00B1N9DX45 | Medium risk |
| LF Canlife Asia Pacific | Asia Pacific Excluding Japan | GB00B719QW87 | High risk |
| LF Gresham House UK Multi Cap Income | UK Equity Income | GB00BYXVGS75 | High risk |
| LF Miton Global Infrastructure Income | Global Equity Income | GB00BD3H9L21 | Medium risk |
| Liontrust Sustainable Future Corporate Bond | Sterling Corporate Bond | GB0030029069 | Low risk |
| Liontrust Sustainable Future Managed | Mixed Investment 40-85% Shares | GB0030030398 | Medium risk |
| Merian Corporate Bond | Sterling Corporate Bond | GB00B1XG7X39 | Low risk |
| Merian Monthly Income Bond | Sterling Strategic Bond | GB00B1XG8187 | Low risk |
| Premier Diversified Growth | Mixed Investment 40-85% Shares | GB00B8BJV423 | Medium risk |
| Premier Diversified Income | Mixed Investment 20-60% Shares | GB00BYPDV863 | Medium risk |
| Premier Global Infrastructure Income | Global Equity Income | GB0031637738 | Medium risk |
| Rathbone UK Opportunities Fund | UK All Companies | GB0030430804 | High risk |
| Sarasin Thematic Global Equity (Sterling Hedged) | Global | GB00B83F3755 | High risk |
| Schroder Sterling Corporate Bond | Sterling Corporate Bond | GB0009379370 | Low risk |
| Schroder Strategic Bond | Sterling Strategic Bond | GB00B7FPS593 | Low risk |
| Threadneedle UK Smaller Companies | UK Smaller Companies | GB0001530343 | High risk |
| VT Gravis Clean Energy Income | Global | GB00BFN4H792 | Medium risk |
The Asset mix
The current asset mix of the new Best of the Best Selection is shown below with last month's figures in brackets:
- Global Fixed Interest 32% (16%)
- Alternatives 9% (12%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 3% (7%)
- Emerging Market Fixed Income 0% (4%)
- North American Equities 16% (11%)
- European Equities 5% (4%)
- Japanese Equities 0% (0%)
- Property 0% (10%)
- UK Equities 0% (17%)
- Gilts 24% (6%)
- Cash 5% (3%)
- Emerging market equities 0% (0%)
- Other international equities 0% (4%)
- Asian Equities 6% (3%)
- Commodities and Energy 0% (3%)
80-20 Investor's outperformance continues
As you know the Best of the Best Selection is the shortlist of the best funds highlighted by our 80-20 Investor algorithm split into high, medium and low-risk categories. This shortlist is updated at the start of every month.
The green line in the chart below (click to enlarge) shows how a portfolio would have performed since inception (in August 2014) if it had been split equally between the Best of the Best Selection funds and then switched each month when each new shortlist was published. I have also charted the performance against that of a FTSE 100 tracker fund (the black line) and the average cautious managed fund (blue line) and the average managed fund with up to 85% equity exposure (red line). In reality, the 80-20 Investor's asset allocation typically lies between these two as it usually has 40-60% exposure to equities at any one time. So they provide a good comparison of how fund managers with a similar remit have fared over the same period.
As you can see, since launch in August 2014 the 80-20 Investor portfolio has outperformed the average managed fund and the market.
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