80-20 Investor Best of the Best Selection – August 2019 Update

Commentary

As explained in the latest monthly newsletter, the biggest driver of returns for UK investors during July was the weakness of the pound. As a result, the BOTB performed incredibly well. The table below shows the performance of the top five funds from July's BOTB.

Name	July return %
AXA Framlington Global Technology	8.85
Marlborough US Multi-Cap Income	8.21
Legg Mason IF Martin Currie North American	7.37
LF Blue Whale Growth	6.55
TB Evenlode Global Income	5.78

In fact the only fund to lose money was the Aberdeen UK Mid Cap Equity fund due to its exposure to smaller companies and therefore to the fortunes of the UK economy and Brexit. The average Mixed Investment 40-85% Shares fund returned 2.85% over the month compared to an average of 3.86% from the BOTB as a whole.

Unsurprisingly 16 funds retain their place in this month's BOTB although there has been some change to the underlying asset mix. Out goes direct exposure to emerging market equities and Asian equities, with developed world equities being the primary beneficiary. Also, gilts have lost their place to global bonds and emerging market fixed interest. Finally, property equities have also given up their place this month

Interestingly August's BOTB has a lower equity content than July's, dropping to around 59% from 61%.

At the foot of this article you can see how the 80-20 Investor selection has outperformed the professional fund managers as well as the market since its launch five years ago.

Below I list this month's selection in full with the 16 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.

August'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
Aberdeen Emerging Markets Bond	Global Emerging Markets Bond	GB00B5L9HN22	Low risk
Aberdeen European Equity	Europe Excluding UK	GB00B0LG6P37	High risk
Aberdeen UK Equity Income	UK Equity Income	GB00B0XWN929	Medium risk
AXA Framlington Global Technology	Technology & Telecommunications	GB0006598998	High risk
Baillie Gifford Strategic Bond	Sterling Strategic Bond	GB0005947741	Low risk
BNY Mellon International Bond	Global Bonds	GB0006779655	Medium risk
BNY Mellon Multi-Asset Balanced	Mixed Investment 40-85% Shares	GB0006778574	Medium risk
BNY Mellon Real Return	Targeted Absolute Return	GB0001642635	Low risk
Fidelity Global Dividend	Global Equity Income	GB00B7778087	Medium risk
Fidelity Multi Asset Allocator Defensive	Mixed Investment 0-35% Shares	GB00B8YQD220	Low risk
Fundsmith Equity	Global	GB00B4Q5X527	High risk
Janus Henderson Fixed Interest Monthly Income	Sterling Strategic Bond	GB0001920486	Low risk
Legg Mason IF Martin Currie North American	North America	GB00BVZ6VD94	High risk
LF Blue Whale Growth	Global	GB00BD6PG563	High risk
LF Miton European Opportunities	Europe Excluding UK	GB00BZ2K2M84	High risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
Marlborough US Multi-Cap Income	North America	GB0001722882	High risk
MI Chelverton UK Equity Growth	UK All Companies	GB00BP855B75	Medium risk
Morgan Stanley Global Brands	Global	GB0032482498	High risk
Neptune Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Royal London Sustainable Managed Growth Trust	Mixed Investment 0-35% Shares	GB00B8H7XS88	Low risk
Smith & Williamson North American Equity	North America	GB0007655698	High risk
Standard Life Investments Emerging Market Debt	Global Emerging Markets Bond	GB00B8K56P77	Medium risk
TB Evenlode Global Income	Global Equity Income	GB00BF1QMV61	Medium risk
Thesis Climate Assets	Mixed Investment 40-85% Shares	GB00B3K3HX15	Medium risk
Threadneedle Emerging Market Bond	Global Emerging Markets Bond	GB0002365608	Low risk
Threadneedle Managed Bond	Mixed Investment 0-35% Shares	GB0032010042	Low risk
Troy Asset Management Ltd Trojan Global Equity	Global	GB00B0ZJ5S47	Medium risk
Troy Asset Management Ltd Trojan Global Income	Global Equity Income	GB00BD82KP33	Medium risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	Low risk

August's Best of the Best Selection - (grouped by risk)

Here is August'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
Aberdeen Emerging Markets Bond	Global Emerging Markets Bond	GB00B5L9HN22	Low risk
Baillie Gifford Strategic Bond	Sterling Strategic Bond	GB0005947741	Low risk
BNY Mellon Real Return	Targeted Absolute Return	GB0001642635	Low risk
Fidelity Multi Asset Allocator Defensive	Mixed Investment 0-35% Shares	GB00B8YQD220	Low risk
Janus Henderson Fixed Interest Monthly Income	Sterling Strategic Bond	GB0001920486	Low risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
Royal London Sustainable Managed Growth Trust	Mixed Investment 0-35% Shares	GB00B8H7XS88	Low risk
Threadneedle Emerging Market Bond	Global Emerging Markets Bond	GB0002365608	Low risk
Threadneedle Managed Bond	Mixed Investment 0-35% Shares	GB0032010042	Low risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	Low risk
Aberdeen UK Equity Income	UK Equity Income	GB00B0XWN929	Medium risk
BNY Mellon International Bond	Global Bonds	GB0006779655	Medium risk
BNY Mellon Multi-Asset Balanced	Mixed Investment 40-85% Shares	GB0006778574	Medium risk
Fidelity Global Dividend	Global Equity Income	GB00B7778087	Medium risk
MI Chelverton UK Equity Growth	UK All Companies	GB00BP855B75	Medium risk
Standard Life Investments Emerging Market Debt	Global Emerging Markets Bond	GB00B8K56P77	Medium risk
TB Evenlode Global Income	Global Equity Income	GB00BF1QMV61	Medium risk
Thesis Climate Assets	Mixed Investment 40-85% Shares	GB00B3K3HX15	Medium risk
Troy Asset Management Ltd Trojan Global Equity	Global	GB00B0ZJ5S47	Medium risk
Troy Asset Management Ltd Trojan Global Income	Global Equity Income	GB00BD82KP33	Medium risk
Aberdeen European Equity	Europe Excluding UK	GB00B0LG6P37	High risk
AXA Framlington Global Technology	Technology & Telecommunications	GB0006598998	High risk
Fundsmith Equity	Global	GB00B4Q5X527	High risk
Legg Mason IF Martin Currie North American	North America	GB00BVZ6VD94	High risk
LF Blue Whale Growth	Global	GB00BD6PG563	High risk
LF Miton European Opportunities	Europe Excluding UK	GB00BZ2K2M84	High risk
Marlborough US Multi-Cap Income	North America	GB0001722882	High risk
Morgan Stanley Global Brands	Global	GB0032482498	High risk
Neptune Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Smith & Williamson North American Equity	North America	GB0007655698	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. Many of them remain in the Best funds by Sector selection:

Name	Sector	ISIN Code	Risk
Aberdeen UK Mid Cap Equity	UK All Companies	GB00B0XWNT29	High risk
Aviva Inv Multimanager 20-60% Shares	Mixed Investment 20-60% Shares	GB00B1N94V93	Low risk
AXA Ethical Distribution	Mixed Investment 20-60% Shares	GB0005409262	Low risk
BNY Mellon Global Income	Global Equity Income	GB00B0MY6T00	Medium risk
Fidelity Asian Dividend	Asia Pacific Excluding Japan	GB00B8W5LX86	Medium risk
Fidelity Global High Yield	Sterling High Yield	GB00B7K7SQ18	Low risk
Fidelity Index Pacific ex Japan	Asia Pacific Excluding Japan	GB00BHZK8G51	High risk
JPM Emerging Markets	Global Emerging Markets	GB0030881550	High risk
Legg Mason IF Martin Currie Global Equity Income	Global Equity Income	GB00BVZ6V513	Medium risk
Liontrust Sustainable Future Managed	Mixed Investment 40-85% Shares	GB0030030398	Medium risk
M&G Global Listed Infrastructure	Global	GB00BF00R928	Medium risk
Schroder Global Cities Real Estate Income	Property Other	GB00B50MLC91	Medium risk
Standard Life Investments UK Gilt	UK Gilts	GB00B6WZXS38	Low risk
TB Evenlode Income	UK All Companies	GB00BD0B7D55	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 11% (6%)
• Alternatives 10% (12%) - includes absolute return strategies & some bond exposure
• UK Corporate Fixed Interest (i.e UK bonds) 5% (5%)
• Emerging Market Fixed Income 10% (9%)
• North American Equities 23% (19%)
• European Equities 12% (12%)
• Japanese Equities 0% (0%)
• Property 0% (3%)
• UK Equities 11% (13%)
• Gilts 0% (3%)
• Cash 5% (4%)
• Emerging market equities 0% (4%)
• Other international equities 13% (5%)
• Asian Equities 0% (5%)

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 60-85% 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 HUGELY outperformed the average managed fund and the market.

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