80-20 Investor Best of the Best Selection – April 2020 Update

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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