80-20 Investor Best of the Best Selection – December 2015 Update

A total of 17 funds from November's 29 funds make it into December's selection. Below I list this month's selection in full with the 17 funds that regained their place in green while the new additions are in black.

Just as last time, I have included the full list sorted alphabetically by name and then by risk category.

December's Best of the Best Selection - (A-Z by fund name)

(funds unchanged from last month are in green while new additions are in black)

 

Fund name	Sector	ISIN Code	Risk Level
Aberdeen - European High Yield Bond	Sterling High Yield	GB00B5968F40	Low risk
Artemis - Pan-European Absolute Return	Targeted Absolute Return	GB00BMMV4J16	Low risk
Artemis - US Extended Alpha	North America	GB00BMMV5G59	High risk
Artemis - US Select	North America	GB00BMMV5105	High risk
Aviva Inv - Asia Pacific Property	Property	GB00B2RJM074	Medium risk
AXA - Framlington Japan	Japan	GB0003500179	High risk
Baillie Gifford - American	North America	GB0006061740	High risk
BlackRock - Corporate Bond	Sterling Corporate Bond	GB0005769541	Low risk
CF - Miton UK Multi Cap Income	UK Equity Income	GB00B3SRD718	Medium risk
FP - Miton Undervalued Assets	UK All Companies	GB00B3BSKG91	Medium risk
Fundsmith - Equity	Global	GB00B4LPDJ14	High risk
Henderson - Fixed Interest Monthly Income	Sterling Strategic Bond	GB00B7GSYN71	Low risk
Invesco Perpetual - Global Bond	Global Bonds	GB0033028662	Medium risk
JPM - Japan	Japan	GB0030879471	High risk
L&G - UK Property	Property	GB00BK35DS04	Low risk
Legg Mason - IF Japan Equity	Japan	GB0033507467	High risk
Liontrust - European Growth	Europe Excluding UK	GB00B1GKBD09	Medium risk
Liontrust - UK Smaller Companies	UK Smaller Companies	GB0007420788	Medium risk
Man GLG - Continental European Growth	Europe Excluding UK	GB00B0119370	Medium risk
Marlborough - High Yield Fixed Interest	Sterling High Yield	GB00B03TN153	Low risk
MFM - Slater Recovery	UK All Companies	GB0031554248	Medium risk
Natixis - Loomis Sayles U.S. Equity Leaders	North America	GB00B8L3WZ29	High risk
Premier - ConBrio Sanford Deland UK Buffettology	UK All Companies	GB00B3QQFJ66	Medium risk
Rathbone - Global Opportunities	Global	GB0030349095	High risk
Schroder - Monthly High Income	Sterling High Yield	GB0009505693	Low risk
Schroder - Strategic Credit	Sterling Strategic Bond	GB00B11DNZ00	Low risk
Threadneedle - American Extended Alpha	North America	GB00B28B7B81	High risk
Threadneedle - UK Smaller Companies	UK Smaller Companies	GB0001530343	Medium risk
Vanguard - LifeStrategy 20% Equity	Mixed Investment 0%-35% Shares	GB00B4NXY349	Low risk

December's Best of the Best Selection - (grouped by risk)

Here is December's shortlist grouped by their risk category (funds unchanged from last month are in green while new additions are in black):

 

Fund name	Sector	ISIN Code	Risk Level
Artemis - Pan-European Absolute Return	Targeted Absolute Return	GB00BMMV4J16	Low risk
L&G - UK Property	Property	GB00BK35DS04	Low risk
Schroder - Monthly High Income	Sterling High Yield	GB0009505693	Low risk
Aberdeen - European High Yield Bond	Sterling High Yield	GB00B5968F40	Low risk
Schroder - Strategic Credit	Sterling Strategic Bond	GB00B11DNZ00	Low risk
Henderson - Fixed Interest Monthly Income	Sterling Strategic Bond	GB00B7GSYN71	Low risk
BlackRock - Corporate Bond	Sterling Corporate Bond	GB0005769541	Low risk
Marlborough - High Yield Fixed Interest	Sterling High Yield	GB00B03TN153	Low risk
Vanguard - LifeStrategy 20% Equity	Mixed Investment 0%-35% Shares	GB00B4NXY349	Low risk
Premier - ConBrio Sanford Deland UK Buffettology	UK All Companies	GB00B3QQFJ66	Medium risk
Liontrust - UK Smaller Companies	UK Smaller Companies	GB0007420788	Medium risk
MFM - Slater Recovery	UK All Companies	GB0031554248	Medium risk
Liontrust - European Growth	Europe Excluding UK	GB00B1GKBD09	Medium risk
Threadneedle - UK Smaller Companies	UK Smaller Companies	GB0001530343	Medium risk
Man GLG - Continental European Growth	Europe Excluding UK	GB00B0119370	Medium risk
Aviva Inv - Asia Pacific Property	Property	GB00B2RJM074	Medium risk
FP - Miton Undervalued Assets	UK All Companies	GB00B3BSKG91	Medium risk
CF - Miton UK Multi Cap Income	UK Equity Income	GB00B3SRD718	Medium risk
Invesco Perpetual - Global Bond	Global Bonds	GB0033028662	Medium risk
Legg Mason - IF Japan Equity	Japan	GB0033507467	High risk
Baillie Gifford - American	North America	GB0006061740	High risk
Artemis - US Extended Alpha	North America	GB00BMMV5G59	High risk
Natixis - Loomis Sayles U.S. Equity Leaders	North America	GB00B8L3WZ29	High risk
Artemis - US Select	North America	GB00BMMV5105	High risk
Fundsmith - Equity	Global	GB00B4LPDJ14	High risk
JPM - Japan	Japan	GB0030879471	High risk
Threadneedle - American Extended Alpha	North America	GB00B28B7B81	High risk
AXA - Framlington Japan	Japan	GB0003500179	High risk
Rathbone - Global Opportunities	Global	GB0030349095	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 Best of the Best list are listed below. Many of them remain in the Best funds by Sector selection:

Fund name	Sector	ISIN Code	Risk Level
Aberdeen - Property Share	Property	GB00B0XWNM59	High risk
Aviva Inv - High Yield Bond	Sterling High Yield	GB00B3CGJ878	Low risk
AXA - Framlington UK Smaller Cos	UK Smaller Companies	GB0030310857	Medium risk
CF - Miton UK Smaller Companies	UK Smaller Companies	GB00B818N094	Medium risk
CF - Miton UK Value Opportunities	UK All Companies	GB00B8KV0M06	Medium risk
JPM - Global Ex UK Bond	Global Bonds	GB0030877327	Low risk
Jupiter - Strategic Bond	Sterling Strategic Bond	GB00B2RBCS16	Low risk
M&G - Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
MFM - Slater Growth	UK All Companies	GB00B0706C66	Medium risk
Premier - Pan European Property	Property	GB0030599798	High risk
Schroder - Absolute UK Dynamic	Targeted Absolute Return	GB00B3N74T57	Medium risk
SVS Church House - Investment Grade Fixed Interest	Sterling Corporate Bond	GB0004743828	Low risk

Commentary

Last month the 80-20 Investor Best of the Best Selection increased both the level of risk being taken within the shortlist as well as its global remit. This saw the portfolio have a strong month with a return of 1.5% versus 0.87% from the average managed fund manager and 0.9% from the FTSE 100.

This month that expansive theme has continued at the expense of UK equities. The Best of the Best Selection has increased its exposure to Japanese equities as well as to US equities. Interestingly the European equity exposure has reduced marginally which may have raised an eyebrow, especially as analysts in the City were unanimous in their anticipation this week of more QE in Europe and a subsequent rally in European stock markets. Given that the scale of the changes to eurozone QE (aka money printing) were much less than expected this caused European stock markets to tumble. So the 80-20 Investor algorithm may have got its European equity call spot on, we'll just have to wait and see.

There is also a clear slide away from UK bonds and into global bonds in order to benefit from moves in bond prices and currencies as a result of central banks actions (and inactions) around the world.

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:

• UK Equities 22% (31%)
• North American Equities 21% (18%)
• Global Fixed Interest 19% (15%)
• Japanese Equities 11% (5%)
• European Equities 7% (7%)
• Property 7% (8%)
• UK Corporate Fixed Interest (i.e UK bonds)  6% (12%)
• Alternatives 4% (0%)
• Cash 3% (0%)

The remainder is made up of other international equities.

80-20 Investor's outperformance continues even during the market sell-off

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 shows how a portfolio would have performed over the last year 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 FTSE 100 (the black line) and the average balanced managed fund (red line) and the average managed fund with up to 85% equity exposure (blue line). In reality the 80-20 Investor's asset allocation typically lies between these two as it usually has 60-85% exposure to equities at any one time (currently it has an 60-65% exposure to equities). 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 HUGELY outperformed the average UK fund manager.

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