Commentary
Of the 30 funds in July’s BOTB, 21 funds have retained their place in August's selection, which is higher than normal and reflects the selections overall strong performance during July. The chart below shows the average performance of the BOTB during July (the red 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 green line). You can see that the BOTB marginally underperformed its benchmark, while it outperformed the average cautious managed fund (purple line) and the average managed fund with up to 85% equity exposure (grey line) albeit marginally.
The top performing funds in July's BOTB are shown below and once again are those funds that typically have exposure to large cap US companies as well as Japanese equities.
| Fund | July 2023 % return |
| Liontrust Global Technology | 5.62 |
| Ninety One UK Special Situations | 4.55 |
| AXA Framlington Global Technology | 4.27 |
| Man GLG Japan Core Alpha | 3.4 |
| T. Rowe Price US Large Cap Growth Equity | 2.9 |
At the other end of the scale, defensively positioned global income funds along with bond funds and other low-risk alternatives had a more subdued month. These include two funds that are currently in my own £50k portfolio. However, only 2 funds produced a negative return during July and even then the losses were small.
| Fund | July 2023 % return |
| AXA US Short Duration High Yield Bond | 0.83 |
| IFSL Marlborough High Yield Fixed Interest | 0.66 |
| BNY Mellon Global Dynamic Bond | 0.37 |
| FP Carmignac Global Equity Compounders | 0.17 |
| Invesco Global Targeted Returns (UK) | -0.2 |
| TB Evenlode Global Income | -0.35 |
So it is perhaps unsurprising that so many funds retained their place in the BOTB once again. In terms of asset mix there has been slight increases to US stocks (particularly via tech-focussed funds) as well as UK equities but at the expense of European, emerging market and Japanese equities. The selection's overall equity exposure has also dropped to 59% from 65%, which is the first drop for a while. Elsewhere, the portfolio's bond exposure remains almost the same. At the end of this article, you can find information on how the 80-20 Investor selection continues to outperform professional fund managers and the market since its launch nine years ago
Below I list this month's selection in full with the 21 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 |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| Artemis SmartGARP European Equity | Europe Excluding UK | GB00B2PLJD73 | Higher risk |
| AXA Framlington American Growth | North America | GB00B5LXGG05 | Medium risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| AXA Global High Yield | Sterling High Yield | GB00B29NGF01 | Lower risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Lower risk |
| AXA US Short Duration High Yield Bond | Global Bonds | GB00B59VLT43 | Lower risk |
| Baillie Gifford Emerging Markets Bond | Global EM Bonds - Local Currency | GB00B39RMP13 | Lower risk |
| BNY Mellon Global Dynamic Bond | Targeted Absolute Return | GB00B8K10865 | Lower risk |
| CT European Select | Europe Excluding UK | GB0001529345 | Higher risk |
| CT UK Growth and Income | UK All Companies | GB0001529675 | Higher risk |
| Fidelity American | North America | GB00B8GPC429 | Medium risk |
| FP Carmignac Global Equity Compounders | Global | GB00BMGLBK75 | Medium risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| IFSL Marlborough High Yield Fixed Interest | Sterling High Yield | GB00B03TN153 | Lower risk |
| Invesco Emerging Markets ex China | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Invesco Global Equity Income | Global Equity Income | GB00B3FD1Z66 | Medium risk |
| Invesco Global Targeted Returns | Targeted Absolute Return | GB00B8CHD050 | Lower risk |
| LF Morant Wright Nippon Yield | Japan | GB00B42MKS95 | Medium risk |
| Liontrust Global Alpha | Flexible Investment | GB0031190555 | Medium risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Lower risk |
| Man GLG Continental European Growth | Europe Excluding UK | GB00B0119487 | Higher risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | Medium risk |
| Royal London US Growth Trust | North America | GB0030038359 | Medium risk |
| Schroder Strategic Credit | Sterling Strategic Bond | GB00BJZ2ZC09 | Lower risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Higher risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
August 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 |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| AXA Global High Yield | Sterling High Yield | GB00B29NGF01 | Lower risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Lower risk |
| AXA US Short Duration High Yield Bond | Global Bonds | GB00B59VLT43 | Lower risk |
| Baillie Gifford Emerging Markets Bond | Global EM Bonds - Local Currency | GB00B39RMP13 | Lower risk |
| BNY Mellon Global Dynamic Bond | Targeted Absolute Return | GB00B8K10865 | Lower risk |
| IFSL Marlborough High Yield Fixed Interest | Sterling High Yield | GB00B03TN153 | Lower risk |
| Invesco Global Targeted Returns | Targeted Absolute Return | GB00B8CHD050 | Lower risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Lower risk |
| Schroder Strategic Credit | Sterling Strategic Bond | GB00BJZ2ZC09 | Lower risk |
| AXA Framlington American Growth | North America | GB00B5LXGG05 | Medium risk |
| Fidelity American | North America | GB00B8GPC429 | Medium risk |
| FP Carmignac Global Equity Compounders | Global | GB00BMGLBK75 | Medium risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| Invesco Global Equity Income | Global Equity Income | GB00B3FD1Z66 | Medium risk |
| LF Morant Wright Nippon Yield | Japan | GB00B42MKS95 | Medium risk |
| Liontrust Global Alpha | Flexible Investment | GB0031190555 | Medium risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | Medium risk |
| Royal London US Growth Trust | North America | GB0030038359 | Medium risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| Artemis SmartGARP European Equity | Europe Excluding UK | GB00B2PLJD73 | Higher risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| CT European Select | Europe Excluding UK | GB0001529345 | Higher risk |
| CT UK Growth and Income | UK All Companies | GB0001529675 | Higher risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| Invesco Emerging Markets ex China | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| Man GLG Continental European Growth | Europe Excluding UK | GB00B0119487 | Higher risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Higher 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 |
| EdenTree Responsible and Sustainable Global Equity | Global | GB0008449075 | Medium risk |
| Fidelity Index Japan | Japan | GB00BHZK8872 | Medium risk |
| Jupiter European | Europe Excluding UK | GB0006664683 | Higher risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Higher risk |
| Ninety One Global Total Return Credit | Sterling Strategic Bond | GB00BFM79K62 | Lower risk |
| Royal London Global Sustainable Equity | Global | GB00BL6V0581 | Medium risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Lower risk |
| TB Evenlode Global Income | Global Equity Income | GB00BF1QMV61 | Medium risk |
| Vanguard FTSE Developed Europe ex-UK Equity Index | Europe Excluding UK | GB00B5B71H80 | Higher 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 23% (22%)
- UK Fixed Interest 3% (4%)
- Alternatives 11% (5%) - includes absolute return strategies
- North American Equities 29% (26%)
- Emerging Market Equities 0% (3%)
- European Equities 10% (13%)
- Japanese Equities 4% (7%)
- UK Equities 9% (6%)
- Cash 4% (4%)
- China Equities 0% (0%)
- Asian Equities 0% (0%)
- Other international equities 7% (10%)
- Commodities and Energy % (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 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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