Commentary
Of the 30 funds in July's BOTB, 15 funds have retained their place in August's selection. This follows on from the previous month when 19 funds retained their place. The chart below shows the average performance of the BOTB during July (the blue 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 red line). You can see that the BOTB underperformed its benchmark.
The chart also shows how the selection underperformed the average professionally managed fund from the Mixed Investment 40-85% Shares sector, which is typically more adventurous than the BOTB given its higher equity exposure. The BOTB's performance was hampered by its, albeit small, exposure to Chinese and Asian equities but more importantly its lack of exposure to US technology stocks which rallied 11% in July as the market began betting that the US Federal Reserve would become less aggressive with its interest rate hikes.
Having said that, the table below shows the strong performance from the top performers in July's BOTB and it's good to see JOHCM Global Opportunities, BlackRock Natural Resources Growth & Income and Invesco UK Opportunities (UK) which feature in my own £50k portfolio, make an appearance.
| Fund | July % return |
| Barings Global Agriculture | 5.88 |
| Man GLG Japan Core Alpha | 4.01 |
| JOHCM Global Opportunities | 3.97 |
| VT Gravis Clean Energy Income | 3.95 |
| BlackRock Natural Resources Growth & Income | 3.81 |
| Invesco UK Opportunities (UK) | 3.7 |
At the other end of the scale, only 7 funds from the 30 in July's BOTB fell in value. The worst-performing funds are shown in the table below, and they include funds with exposure to Chinese, Asian and European equities as well as defensively positioned funds. Unsurprisingly the Fidelity China fund, whose performance is reflective of the wider Chinese stock market following the introduction of further covid restrictions, is not in August's BOTB.
| Fund | July % return |
| FP Carmignac Unconstrained Global Bond | -1.88 |
| Invesco Asian Equity Income (UK) | -2.04 |
| T. Rowe Price Dynamic Global Bond | -2.37 |
| LF Lightman European | -2.39 |
| Fidelity China Consumer | -11.45 |
This month's selection sees the BOTB's equity exposure remain around 60% but with some marked changes in the asset mix. The asset mix no longer has any exposure to Chinese equities and has limited exposure to Asian equities. The exposure to UK equities has fallen again as has the exposure to European equities, with US equities being the main beneficiary. Property exposure has returned. As an indication of the increased market concern surrounding a possible recession the BOTB's commodity exposure has slightly fallen again and many of this month's funds can also be found in my research piece - "How to invest for a recession".
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 15 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 |
| ASI Global Real Estate | Property Other | GB00B0LD3V96 | Medium risk |
| ASI Short Duration Global Inflation-Linked Bond | Global Bonds | GB00BP25RD93 | Low risk |
| AXA Framlington Health | Healthcare | GB00BRJZVQ71 | High risk |
| Barings Global Agriculture | Commodity/Natural Resources | GB00B3B9V927 | High risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| Fidelity Index US | North America | GB00BJS8SH10 | High risk |
| Fidelity Moneybuilder Dividend | UK Equity Income | GB00B3LNGT95 | Medium risk |
| Fidelity Sustainable Global Equity | Global | GB00B3RDH349 | High risk |
| Janus Henderson Inst Overseas Bond | Global Bonds | GB0007673055 | Low risk |
| JOHCM Global Opportunities | Global | GB00BJ5JMC04 | Medium risk |
| Jupiter Asian Income | Asia Pacific Excluding Japan | GB00BZ2YML94 | Medium risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| LF Macquarie Global Infrastructure Securities | Infrastructure | GB00B1W24C09 | Medium risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| McInroy & Wood Balanced | Mixed Investment 40-85% Shares | GB00B7RRJ163 | Medium risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | High risk |
| Royal London Short Duration Gilts | UK Gilts | GB00BD050C73 | Low risk |
| Royal London Short Duration Global Index Linked | Global Bonds | GB00BD050F05 | Low risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Schroder US Mid Cap | North America | GB00B7LDLV43 | High risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| T. Rowe Price Dynamic Global Bond | Targeted Absolute Return | GB00BD0NLR34 | Low risk |
| T. Rowe Price US Large Cap Value Equity | North America | GB00BD446M25 | Medium risk |
| TB Guinness Global Energy | Commodity/Natural Resources | GB00B56FW078 | High risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| Troy Asset Management Ltd Trojan Global Income | Global Equity Income | GB00BD82KP33 | Medium risk |
| VT Gravis Clean Energy Income | Infrastructure | GB00BFN4H792 | 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 |
| ASI Short Duration Global Inflation-Linked Bond | Global Bonds | GB00BP25RD93 | Low risk |
| Janus Henderson Inst Overseas Bond | Global Bonds | GB0007673055 | Low risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Royal London Short Duration Gilts | UK Gilts | GB00BD050C73 | Low risk |
| Royal London Short Duration Global Index Linked | Global Bonds | GB00BD050F05 | Low risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| T. Rowe Price Dynamic Global Bond | Targeted Absolute Return | GB00BD0NLR34 | Low risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| ASI Global Real Estate | Property Other | GB00B0LD3V96 | Medium risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| Fidelity Moneybuilder Dividend | UK Equity Income | GB00B3LNGT95 | Medium risk |
| JOHCM Global Opportunities | Global | GB00BJ5JMC04 | Medium risk |
| Jupiter Asian Income | Asia Pacific Excluding Japan | GB00BZ2YML94 | Medium risk |
| LF Macquarie Global Infrastructure Securities | Infrastructure | GB00B1W24C09 | Medium risk |
| McInroy & Wood Balanced | Mixed Investment 40-85% Shares | GB00B7RRJ163 | Medium risk |
| T. Rowe Price US Large Cap Value Equity | North America | GB00BD446M25 | Medium risk |
| Troy Asset Management Ltd Trojan Global Income | Global Equity Income | GB00BD82KP33 | Medium risk |
| VT Gravis Clean Energy Income | Infrastructure | GB00BFN4H792 | Medium risk |
| AXA Framlington Health | Healthcare | GB00BRJZVQ71 | High risk |
| Barings Global Agriculture | Commodity/Natural Resources | GB00B3B9V927 | High risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| Fidelity Index US | North America | GB00BJS8SH10 | High risk |
| Fidelity Sustainable Global Equity | Global | GB00B3RDH349 | High risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | High risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| Schroder US Mid Cap | North America | GB00B7LDLV43 | High risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| TB Guinness Global Energy | Commodity/Natural Resources | GB00B56FW078 | 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 Strategic Assets | Flexible Investment | GB00B3VDD431 | High risk |
| Artemis US Absolute Return | Targeted Absolute Return | GB00BMMV5N27 | Low risk |
| ASI Latin American Equity | Latin America | GB00B41QSW23 | High risk |
| ASI UK High Income Equity | UK Equity Income | GB00B7FTRJ84 | Medium risk |
| ASI World Income Equity | Global Equity Income | GB00B3N9CY25 | Medium risk |
| Fidelity China Consumer | China/Greater China | GB00B82ZSC67 | High risk |
| First Sentier Global Listed Infrastructure | Infrastructure | GB00B24HJL45 | High risk |
| FP Carmignac Unconstrained Global Bond | Sterling Strategic Bond | GB00BJHPJ035 | Low risk |
| Invesco Asian Equity Income (UK) | Asia Pacific Excluding Japan | GB00B4JR4R48 | Medium risk |
| Invesco UK Opportunities (UK) | UK All Companies | GB00B1W7HM62 | Medium risk |
| JPM Natural Resources | Commodity/Natural Resources | GB0031835118 | High risk |
| LF Lightman European | Europe Excluding UK | GB00BGPFJN79 | High risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Medium risk |
| Schroder UK Dynamic Absolute Return | Targeted Absolute Return | GB00B3N74T57 | Low risk |
| Vanguard FTSE UK Equity Income Index | UK Equity Income | GB00B59G4H82 | 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 15% (7%)
- Alternatives 15% (17%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
- Emerging Market Fixed Income 0% (3%)
- North American Equities 23% (14%)
- European Equities 4% (8%)
- Chinese Equities 0% (3%)
- Japanese Equities 0% (4%)
- Property 3% (0%)
- UK Equities 9% (17%)
- Gilts 3% (3%)
- Cash 5% (7%)
- Asian / Emerging market equities 5% (3%)
- Other international equities 8% (0%)
- Commodities and Energy 10% (14%)
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 BOTB has outperformed the average managed fund and the market.
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