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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