80-20 Investor Best of the Best Selection – August 2022 Update

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.

 

 

 

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.