80-20 Investor Best of the Best Selection – April 2023 Update

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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