Commentary
Of the 30 funds in July's BOTB, 16 funds have retained their place in August's selection. The chart below shows the performance of the BOTB against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix. The BOTB also outperformed the sector average of comparable professionally managed multi-asset funds (which made 0.36%)
You can see how the BOTB selection struggled during the mid-point of the month before rallying into the close. The table below shows the top performers within the BOTB for the month of July and it's pleasing to see three of them are in my own £50k portfolio.
| Fund | % July return |
| Liontrust India | 3.8 |
| Fidelity Global Property | 3.34 |
| Marlborough European Multi-Cap | 3.29 |
| BMO North American Equity | 2.38 |
| Schroder UK Dynamic Smaller Companies | 2.03 |
| Fidelity UK Smaller Companies | 1.86 |
At the other end of the scale the laggard was Marlborough Far East Growth which fell 5.47%. However, this was reflective of the widespread fall in Asian markets in July and believe it or not the fund still outperformed its peer-group average for the month.
Looking at the new BOTB, the overall equity exposure of the BOTB has risen to 65%, up from 61%, which is the highest for some time. The focus of the portfolio remains US, UK and European equities, with increased exposure to these areas, while having almost no direct exposure to Asian equities (including Japan). Once again we see growth stock exposure creeping in and increased exposure to property equity funds after their continued strong performance. At the low-risk end of the selection, there has been an increased allocation to Targeted Absolute Return funds as a result of the continued volatility in bond markets.
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 almost seven 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 |
| Allianz Continental European | Europe Excluding UK | GB00B3Q8YX99 | High risk |
| Artemis High Income | Sterling Strategic Bond | GB00B2PLJN71 | Low risk |
| ASI Global Real Estate Share | Property Other | GB00B7MR5W47 | Medium risk |
| ASI UK Real Estate Share | Property Other | GB00B0XWNM59 | High risk |
| Barclays Multi-Asset Cautious | Mixed Investment 0-35% Shares | GB00BD93Z723 | Low risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| ES R&M UK Equity Smaller Companies | UK Smaller Companies | GB00B1DSZS09 | Medium risk |
| Fidelity Emerging Europe Middle East and Africa | Specialist | GB00B87Z7808 | High risk |
| Fidelity Global Property | Property Other | GB00B7K2NZ09 | Medium risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| FP Pictet Multi Asset Portfolio | Targeted Absolute Return | GB00BVYTTC41 | Low risk |
| Franklin UK Smaller Companies | UK Smaller Companies | GB00B7FFF708 | High risk |
| Fundsmith Equity | Global | GB00B4Q5X527 | Medium risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Liontrust India | Specialist | GB00B1L6DV51 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| MI Chelverton UK Equity Income | UK Equity Income | GB00B1Y9J570 | Medium risk |
| Ninety One American Franchise | North America | GB00B1XFJ342 | Medium risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Premier Miton Diversified Income | Mixed Investment 20-60% Shares | GB00BYPDV970 | Low risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Schroder UK Dynamic Absolute Return | Targeted Absolute Return | GB00B3N74T57 | Low risk |
| Schroder UK Dynamic Smaller Companies | UK Smaller Companies | GB0007220360 | High risk |
| Slater Recovery | UK All Companies | GB0031554248 | Medium risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | Medium risk |
| T. Bailey Dynamic | Mixed Investment 20-60% Shares | GB00B1385S07 | Low risk |
| TB Saracen Global Income & Growth | Global Equity Income | GB00B5B35X02 | High risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| VT De Lisle America | North America | GB00B3QF3G69 | High 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 |
| Artemis High Income | Sterling Strategic Bond | GB00B2PLJN71 | Low risk |
| Barclays Multi-Asset Cautious | Mixed Investment 0-35% Shares | GB00BD93Z723 | Low risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| FP Pictet Multi Asset Portfolio | Targeted Absolute Return | GB00BVYTTC41 | Low risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Premier Miton Diversified Income | Mixed Investment 20-60% Shares | GB00BYPDV970 | Low risk |
| Schroder UK Dynamic Absolute Return | Targeted Absolute Return | GB00B3N74T57 | Low risk |
| T. Bailey Dynamic | Mixed Investment 20-60% Shares | GB00B1385S07 | Low risk |
| ASI Global Real Estate Share | Property Other | GB00B7MR5W47 | Medium risk |
| ES R&M UK Equity Smaller Companies | UK Smaller Companies | GB00B1DSZS09 | Medium risk |
| Fidelity Global Property | Property Other | GB00B7K2NZ09 | Medium risk |
| Fundsmith Equity | Global | GB00B4Q5X527 | Medium risk |
| MI Chelverton UK Equity Income | UK Equity Income | GB00B1Y9J570 | Medium risk |
| Ninety One American Franchise | North America | GB00B1XFJ342 | Medium risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Slater Recovery | UK All Companies | GB0031554248 | Medium risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | Medium risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| Allianz Continental European | Europe Excluding UK | GB00B3Q8YX99 | High risk |
| ASI UK Real Estate Share | Property Other | GB00B0XWNM59 | High risk |
| Fidelity Emerging Europe Middle East and Africa | Specialist | GB00B87Z7808 | High risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| Franklin UK Smaller Companies | UK Smaller Companies | GB00B7FFF708 | High risk |
| Liontrust India | Specialist | GB00B1L6DV51 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| Schroder UK Dynamic Smaller Companies | UK Smaller Companies | GB0007220360 | High risk |
| TB Saracen Global Income & Growth | Global Equity Income | GB00B5B35X02 | High risk |
| VT De Lisle America | North America | GB00B3QF3G69 | 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 |
| Artemis Global Equity | Global | GB00B2PLJP95 | Medium risk |
| Aviva Inv UK Smaller Companies | UK Smaller Companies | GB0004457312 | Medium risk |
| AXA Framlington Managed Income | Sterling Strategic Bond | GB00B7H1PG56 | Low risk |
| AXA Framlington UK Smaller Companies | UK Smaller Companies | GB00B7MMLM18 | High risk |
| BMO North American Equity | North America | GB0030281405 | Medium risk |
| FP Apollo Multi Asset Balanced | Mixed Investment 20-60% Shares | GB00B3FPF276 | Low risk |
| FP Octopus UK Multi Cap Income | UK Equity Income | GB00BG47Q333 | Medium risk |
| JPM Natural Resources | Specialist | GB0031835118 | High risk |
| Marlborough Far East Growth | Asia Pacific Excluding Japan | GB00B0NVCN62 | Medium risk |
| Marlborough Technology | Technology & Telecommunications Retai | GB0032832841 | High risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Low risk |
| Schroder QEP Global Active Value | Global | GB00B76V8G74 | Medium risk |
| Schroder Small Cap Discovery | Specialist | GB00B5ZS9V71 | High risk |
| UBS US Equity | North America | GB00B7V68L26 | 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 8% (8%)
- Alternatives 24% (21%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 13% (13%)
- European Equities 7% (4%)
- Chinese Equities 0% (0%)
- Japanese Equities 0% (0%)
- Property 8% (4%)
- UK Equities 21% (22%)
- Gilts 0% (0%)
- Cash 3% (4%)
- Asian / Emerging market equities 3% (10%)
- Other international equities 13% (8%)
- Commodities and Energy 0% (6%)
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.
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