Commentary
August’s BOTB once again has a familiar air about it with 22 funds from July’s BOTB retaining their place. Once again it demonstrates the resilience and performance of the funds within the BOTB selection over the last few months.
The average return from the BOTB for the month of July was 1.6% which again is impressive when you consider that the portfolio only had a 48% exposure to equities. Comparable professionally managed funds on average returned between 0.09% and 0.39% as shown in the chart below. As I pointed out last time, comparing against the Mixed Investment 40-85% Shares sector average is not a fair comparison for the BOTB given that most funds within the aforementioned sector have up to 85% exposure to equities. But it once again demonstrates that in a month when equity markets continued to rally, and you would, therefore have expected the sector average for the Mixed Investment 40-85% Shares sector to outperform, the BOTB produced a better return. 
Interestingly during July it wasn't just the BOTB’s exposure to US tech stocks that drove the outperformance but also its exposure to Chinese equities. Baillie Gifford Positive Return once again had a strong month along with other recent BOTB top performers, such as Baillie Gifford China and Baillie Gifford Long Term Global Growth Investment.
| Name | % return in July |
| Baillie Gifford Positive Change | 8.67 |
| LF Miton UK Smaller Companies | 7.84 |
| Allianz Total Return Asian Equity | 6.48 |
| Baillie Gifford European | 5.17 |
| Baillie Gifford Long Term Global Growth Investment | 4.86 |
| Baillie Gifford China | 3.7 |
Interestingly the Baillie Gifford China fund has now dropped out of the BFBS and BOTB tables. The reason for this is not because it's suddenly become a bad fund, Far from it in fact as its performance figures show that it is still performing strongly. The reason for its omission is that the risk monitoring built into the 80-20 Investor algorithm screened it out. The algorithm always looks at the level of risk a fund is taking relative to its peers and those deemed to be taking excess risk are excluded.
At the other end of the monthly performance table only 5 of July's BOTB funds didn't make money during the month of July, these are shown below. Interestingly they include JPM Japan and three global bond funds. All of these have been negatively impacted by the recent weakness in the value of the US dollar. In fact, it is almost singlehandedly the reason for their lacklustre performance.
| Name | % return in July |
| LF Canlife Global Macro Bond | -1.41 |
| Threadneedle Global Bond | -2.75 |
| BNY Mellon International Bond Sterling | -2.83 |
| JPM Japan | -3.53 |
| AXA Framlington Biotech | -5.8 |
Overall it's not surprising that the BOTB's asset mix has remained almost the same as last month, with an equity exposure of around 48%. Most of this exposure is still via US equities and bonds with growing exposure to Asian equities. UK equities continue to remain almost absent which is a reflection of the fact that the UK stock market continues to lag its peers. In fact, the FTSE 100 reentered a bear market last week.
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 six years ago.
Below I list this month's selection in full with the 22 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 |
| Allianz Strategic Bond | Sterling Strategic Bond | GB00B06T9362 | Low risk |
| Allianz Total Return Asian Equity | Asia Pacific Excluding Japan | GB00B1FRQV53 | Medium risk |
| ASI AAA Bond | Sterling Corporate Bond | GB00B3W48X95 | Low risk |
| ASI UK Government Bond | UK Gilts | GB00B6WZXS38 | Low risk |
| AXA Framlington Global Technology | Technology & Telecommunications | GB00B4W52V57 | High risk |
| AXA Sterling Strategic Bond | Sterling Strategic Bond | GB00B02Y6L20 | Low risk |
| Baillie Gifford European | Europe Excluding UK | GB0006058258 | High risk |
| Baillie Gifford Long Term Global Growth Investment | Global | GB00BD5Z0Z54 | High risk |
| Baillie Gifford Managed | Mixed Investment 40-85% Shares | GB0006010168 | Medium risk |
| Baillie Gifford Pacific | Asia Pacific Excluding Japan | GB0006063233 | 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 |
| Franklin UK Gilt | UK Gilts | GB00BYZCTV27 | Medium risk |
| Invesco China Equity (UK) | China/Greater China | GB00B3RW8C79 | High risk |
| Invesco Global Focus (UK) | Global | GB00B3KJYG12 | High risk |
| JPM Global Macro | Targeted Absolute Return | GB00B09RGL45 | Low risk |
| JPM Japan | Japan | GB00B1XMTP77 | Medium risk |
| LF Canlife Global Macro Bond | Global Bonds | GB00B4LW2X97 | Low risk |
| LF Miton UK Smaller Companies | UK Smaller Companies | GB00B818N094 | High risk |
| Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| Morgan Stanley US Advantage | North America | GB00BZ4CG750 | High risk |
| Royal London Sustainable World Trust | Mixed Investment 40-85% Shares | GB00B882H241 | Medium risk |
| Royal London UK Government Bond | UK Gilts | GB00B881TW52 | Medium risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | Medium risk |
| T. Rowe Price Dynamic Global Bond | Global Bonds | GB00BD0NLR34 | Low risk |
| T. Rowe Price Global Technology Equity | Technology & Telecommunications | GB00BD446K01 | High risk |
| Threadneedle Global Bond | Global Bonds | GB0001533685 | Medium risk |
| Troy Asset Management Ltd Trojan Ethical | Flexible Investment | GB00BJP0XX17 | Medium 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 |
| Allianz Strategic Bond | Sterling Strategic Bond | GB00B06T9362 | Low risk |
| ASI AAA Bond | Sterling Corporate Bond | GB00B3W48X95 | Low risk |
| ASI UK Government Bond | UK Gilts | GB00B6WZXS38 | 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 Macro | Targeted Absolute Return | GB00B09RGL45 | Low risk |
| LF Canlife Global Macro Bond | Global Bonds | GB00B4LW2X97 | Low risk |
| Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| T. Rowe Price Dynamic Global Bond | Global Bonds | GB00BD0NLR34 | Low risk |
| Allianz Total Return Asian Equity | Asia Pacific Excluding Japan | GB00B1FRQV53 | Medium risk |
| Baillie Gifford Managed | Mixed Investment 40-85% Shares | GB0006010168 | Medium risk |
| BNY Mellon International Bond | Global Bonds | GB0006779655 | Medium risk |
| Franklin UK Gilt | UK Gilts | GB00BYZCTV27 | Medium risk |
| JPM Japan | Japan | GB00B1XMTP77 | Medium risk |
| Royal London Sustainable World Trust | Mixed Investment 40-85% Shares | GB00B882H241 | Medium risk |
| Royal London UK Government Bond | UK Gilts | GB00B881TW52 | Medium risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | Medium risk |
| Threadneedle Global Bond | Global Bonds | GB0001533685 | Medium risk |
| Troy Asset Management Ltd Trojan Ethical | Flexible Investment | GB00BJP0XX17 | Medium risk |
| AXA Framlington Global Technology | Technology & Telecommunications | GB00B4W52V57 | High risk |
| Baillie Gifford European | Europe Excluding UK | GB0006058258 | High risk |
| Baillie Gifford Long Term Global Growth Investment | Global | GB00BD5Z0Z54 | High risk |
| Baillie Gifford Pacific | Asia Pacific Excluding Japan | GB0006063233 | High risk |
| Baillie Gifford Positive Change | Global | GB00BYVGKV59 | High risk |
| Invesco China Equity (UK) | China/Greater China | GB00B3RW8C79 | High risk |
| Invesco Global Focus (UK) | Global | GB00B3KJYG12 | High risk |
| LF Miton UK Smaller Companies | UK Smaller Companies | GB00B818N094 | High risk |
| Morgan Stanley US Advantage | North America | GB00BZ4CG750 | High risk |
| T. Rowe Price Global Technology Equity | Technology & Telecommunications | GB00BD446K01 | 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 |
| Allianz Gilt Yield | UK Gilts | GB0031383283 | Medium risk |
| ASI (AAM) Sterling Government Bond | UK Gilts | GB00BWK26Q79 | Low risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| Baillie Gifford China | China/Greater China | GB00B39RMM81 | High risk |
| Liontrust Global Technology | Technology & Telecommunications | GB00BYXZ5N79 | High risk |
| Liontrust Sustainable Future Managed Growth | Flexible Investment | GB0030029622 | Medium risk |
| Rathbone Global Opportunities Fund | Global | GB0030349095 | Medium risk |
| Vanguard LifeStrategy 20% Equity | Mixed Investment 0-35% Shares | GB00B4NXY349 | Low 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 28% (30%)
- Alternatives 7% (6%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 4% (0%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 20% (22%)
- European Equities 9% (7%)
- Japanese Equities 4% (4%)
- Property 0% (0%)
- UK Equities 5% (4%)
- Gilts 9% (12%)
- Cash 4% (4%)
- Emerging market equities 3% (0%)
- Other international equities 0% (4%)
- Asian Equities 7% (7%)
- Commodities and Energy 0% (0%)
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.
All performance figures are net of fund charges. The material in any email, the MoneytotheMasses.com website, associated pages / channels / accounts and any other correspondence are for general information only and do not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation. See full Terms & Conditions, Privacy Policy and Disclaimer.
Neither MoneytotheMasses.com or 80-20 Investor nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
Funds invest in shares, bonds, and other financial instruments and are by their nature speculative and can be volatile. You should never invest more than you can safely afford to lose. The value of your investment can go down as well as up so you may get back less than you originally invested. Tax rules can change and benefits depend on individual circumstances.
Information provided by MoneytotheMasses.com or 80-20 Investor is for general information only and not intended to be relied upon by readers in making (or not making) specific investment decisions.
Appropriate independent advice should be obtained before making any such decisions. Leadenhall Learning (owner of MoneytotheMasses.com or 80-20 Investor) and its staff do not accept liability for any loss suffered by readers as a result of any such decisions.
The tables and graphs are derived from data supplied by Trustnet. All Rights Reserved.
