Commentary
Of the 30 funds in March's BOTB, 13 funds have retained their place in April's selection, which is the fewest for some time. The chart below shows the average performance of the BOTB during March (the red line) against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix (the green line). You can see that the BOTB underperformed its benchmark as its exposure to banking stocks and limited bond exposure hampered performance at the height of the banking crisis in March.
The above chart also highlights a change in market narrative. The banking crisis saw market participants increase bets that central banks will pause hiking interest rates further, and possibly begin to cut them later this year. A fall in interest rate expectations spurred a rally in technology stocks, long duration bonds as well as gold. This is why the top performing funds in April's BOTB are those with exposure to bonds, as shown below.
| Fund | March 2023 % return |
| Invesco Global Targeted Returns (UK) | 0.84 |
| M&G Short Dated Corporate Bond | 0.65 |
| abrdn High Yield Bond | 0.59 |
| Schroder MM Diversity | 0.31 |
| Thesis TM Tellworth UK Select | -0.48 |
At the other end of the scale the worst-performing funds, shown in the table below, include those funds with above average exposure to bank stocks, which typically means equity income funds.
| Fund | March 2023 % return |
| LF Brook Continental European | -3.97 |
| Jupiter Income Trust | -4.62 |
| UBS UK Equity Income | -4.77 |
| LF Lightman European | -5.57 |
| abrdn UK Value Equity | -7.84 |
Unsurprisingly the April BOTB fund list looks quite different from March's. While the equity exposure of the selection remains around 60%, there are some subtle changes to the asset mix. There has been an increase in European and US equity exposure at the expense of UK equities. A small exposure to Asian equities has returned. There has also been an increase in bond exposure. Most notably the funds themselves have changed with more funds that are underweight in bank stocks making the grade. 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 eight years ago.
Below I list this month's selection in full with the 13 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 |
| 7IM Real Return | Targeted Absolute Return | GB00B75MS619 | Lower risk |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| Artemis Strategic Assets | Flexible Investment | GB00B3VDD431 | Medium risk |
| Aviva Inv Global Equity Income | Global Equity Income | GB0030441918 | Medium risk |
| AXA Framlington UK Equity Income | UK Equity Income | GB00B7KBNV36 | Medium risk |
| BNY Mellon Global Income | Global Equity Income | GB00B7XK5M25 | Medium risk |
| CT Dynamic Real Return | Targeted Absolute Return | GB00B93TQ868 | Lower risk |
| CT European Select | Europe Excluding UK | GB0001529345 | Higher risk |
| Fidelity Global Dividend | Global Equity Income | GB00B7778087 | Medium risk |
| Fidelity Index Japan | Japan | GB00BHZK8872 | Medium risk |
| IFSL Marlborough Extra Income | Mixed Investment 40-85% Shares | GB0005662894 | Medium risk |
| Invesco Asian Equity Income (UK) | Asia Pacific Excluding Japan | GB00B4JR4R48 | Higher risk |
| Invesco Corporate Bond (UK) | Sterling Corporate Bond | GB00B1W7HY84 | Lower risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Lower risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| LF Brook Continental European | Europe Excluding UK | GB0031831570 | Higher risk |
| M&G Strategic Corporate Bond | Sterling Corporate Bond | GB00B4MQK815 | Lower risk |
| Margetts MGTS Sentinel Defensive | Mixed Investment 0-35% Shares | GB00B7754B55 | Lower risk |
| MI MI Chelverton European Select | Europe Excluding UK | GB00BFNL2N15 | Higher risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | Higher risk |
| Morgan Stanley Sterling Corporate Bond | Sterling Corporate Bond | GB0004757497 | Lower risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| Schroder European Alpha Plus | Europe Excluding UK | GB00B7LDKR32 | Higher risk |
| Schroder European Recovery | Europe Excluding UK | GB0007221889 | Higher risk |
| Schroder Global Recovery | Global | GB00BYRJXL91 | Higher risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Lower risk |
| Schroder Monthly Income | Mixed Investment 20-60% Shares | GB00B78ST188 | Lower risk |
| Schroder UK Alpha Plus | UK All Companies | GB00B5L33N61 | Higher risk |
| TB Evenlode Global Income | Global Equity Income | GB00BF1QMV61 | Medium risk |
| TB Saracen Global Income & Growth | Global Equity Income | GB00B5B35X02 | Medium 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 |
| 7IM Real Return | Targeted Absolute Return | GB00B75MS619 | Lower risk |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| CT Dynamic Real Return | Targeted Absolute Return | GB00B93TQ868 | Lower risk |
| Invesco Corporate Bond (UK) | Sterling Corporate Bond | GB00B1W7HY84 | Lower risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Lower risk |
| M&G Strategic Corporate Bond | Sterling Corporate Bond | GB00B4MQK815 | Lower risk |
| Margetts MGTS Sentinel Defensive | Mixed Investment 0-35% Shares | GB00B7754B55 | Lower risk |
| Morgan Stanley Sterling Corporate Bond | Sterling Corporate Bond | GB0004757497 | Lower risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Lower risk |
| Schroder Monthly Income | Mixed Investment 20-60% Shares | GB00B78ST188 | Lower risk |
| Artemis Strategic Assets | Flexible Investment | GB00B3VDD431 | Medium risk |
| Aviva Inv Global Equity Income | Global Equity Income | GB0030441918 | Medium risk |
| AXA Framlington UK Equity Income | UK Equity Income | GB00B7KBNV36 | Medium risk |
| BNY Mellon Global Income | Global Equity Income | GB00B7XK5M25 | Medium risk |
| Fidelity Global Dividend | Global Equity Income | GB00B7778087 | Medium risk |
| Fidelity Index Japan | Japan | GB00BHZK8872 | Medium risk |
| IFSL Marlborough Extra Income | Mixed Investment 40-85% Shares | GB0005662894 | Medium risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| TB Evenlode Global Income | Global Equity Income | GB00BF1QMV61 | Medium risk |
| TB Saracen Global Income & Growth | Global Equity Income | GB00B5B35X02 | Medium risk |
| CT European Select | Europe Excluding UK | GB0001529345 | Higher risk |
| Invesco Asian Equity Income (UK) | Asia Pacific Excluding Japan | GB00B4JR4R48 | Higher risk |
| LF Brook Continental European | Europe Excluding UK | GB0031831570 | Higher risk |
| MI MI Chelverton European Select | Europe Excluding UK | GB00BFNL2N15 | Higher risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | Higher risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| Schroder European Alpha Plus | Europe Excluding UK | GB00B7LDKR32 | Higher risk |
| Schroder European Recovery | Europe Excluding UK | GB0007221889 | Higher risk |
| Schroder Global Recovery | Global | GB00BYRJXL91 | Higher risk |
| Schroder UK Alpha Plus | UK All Companies | GB00B5L33N61 | Higher 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 |
| abrdn UK Value Equity | UK All Companies | GB00B7LK2232 | High risk |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Low risk |
| Close Select Fixed Income | Sterling Strategic Bond | GB00BD6R7Y87 | Low risk |
| EdenTree Responsible & Sustainable Managed Income | Mixed Investment 40-85% Shares | GB0009449710 | Medium risk |
| Invesco European Equity (UK) | Europe Excluding UK | GB0033048843 | High risk |
| Jupiter Income Trust | UK Equity Income | GB0004791389 | Medium risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| LF Havelock Global Select | Global | GB00BFM7DN78 | Medium risk |
| LF Lightman European | Europe Excluding UK | GB00BGPFJN79 | High risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Medium risk |
| Royal London Global Equity Income | Global Equity Income | GB00BL6V1118 | Medium risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | Medium risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| TwentyFour Focus Bond | Sterling Strategic Bond | GB00B7J5ND87 | Low risk |
| UBS FTSE RAFI Developed 1000 Index | Global | GB00BX9C1L56 | Medium risk |
| UBS UK Equity Income | UK Equity Income | GB00B4W58959 | High 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 19% (15%)
- Alternatives 13% (13%) - includes absolute return strategies
- North American Equities 10% (8%)
- Emerging Market Equities 0% (0%)
- European Equities 19% (15%)
- Japanese Equities 4% (5%)
- UK Equities 17% (21%)
- Cash 7% (7%)
- China Equities 0% (0%)
- Asian Equities 3% (0%)
- Other international equities 8% (12%)
- Commodities and Energy 0% (4%)
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 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 BOTB has outperformed the average managed fund and the market.
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