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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