Commentary
November turned out to be a strong month for equity markets as discussed in this month's newsletter. November's BOTB had some stand out performances as shown in the table below.
| Fund | % return in November |
| L&G Global Health & Pharmaceuticals Index Trust | 4.53 |
| Slater Growth | 3.55 |
| AXA Framlington UK Growth | 3.47 |
| Marlborough US Multi-Cap Income | 3.06 |
| Royal London Sustainable Leaders Trust | 2.82 |
| VT Gravis Clean Energy Income | 2.62 |
In a month where risk was rewarded, only 5 funds didn't make a profit and these were understandably bond/gilt funds, yet the losses were under 0.5%. December's BOTB continues the recent trend of steadily reducing the selections unhedged US equity exposure despite US equities hitting new all-time highs in dollar terms. Again, this is reflective of a wider trend of reducing the BOTB's currency exposure across its overseas holdings more widely, while at the same time increasing the BOTB's domestic equity exposure. Other than that the asset mix of the BOTB has remained fairly consistent.
Interestingly only 9 funds retain their place in December's BOTB which is the lowest retention rate for some time. This is reflective of the recent market rotations we've seen from defensive sectors to cyclical sectors as well as from growth plays into value stocks. The equity content of the BOTB has marginally increased from last month (up from 60% to now sit at 62%).
At the foot of this article you can see how the 80-20 Investor selection has outperformed the professional fund managers as well as the market since its launch over five years ago.
Below I list this month's selection in full with the 9 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.
December'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 Corporate Bond | Sterling Corporate Bond | GB00BWK26G71 | Low risk |
| ASI Japanese Equity | Japan | GB0004521737 | Medium risk |
| ASI UK Real Estate Share | Property Other | GB00B0XWNN66 | High risk |
| Baillie Gifford Positive Change | Global | GB00BYVGKV59 | High risk |
| Barclays Europe (ex-UK) Alpha | Europe Excluding UK | GB00B72WQ825 | High risk |
| BlackRock Continental European | Europe Excluding UK | GB00B4VY9893 | High risk |
| BNY Mellon Global Absolute Return | Targeted Absolute Return | GB00B86R4N19 | Low risk |
| Close FTSE techMARK | Technology & Telecommunications | GB00B87JKQ15 | High risk |
| Fidelity Enhanced Income | UK Equity Income | GB00B87HPZ94 | Medium risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| First State Diversified Growth | Flexible Investment | GB00BVXC2S15 | Medium risk |
| First State Japan Focus | Japan | GB00BWNGX432 | High risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Jupiter Japan Income | Japan | GB00B0HZTZ55 | High risk |
| Liontrust Sustainable Future Corporate Bond | Sterling Corporate Bond | GB0030029069 | Low risk |
| Marlborough US Multi-Cap Income | North America | GB0001722882 | High risk |
| Merian Corporate Bond | Sterling Corporate Bond | GB00B1XG7X39 | Low risk |
| Merian Monthly Income Bond | Sterling Strategic Bond | GB00B1XG8187 | Low risk |
| Premier Diversified Income | Mixed Investment 20-60% Shares | GB00BYPDV863 | Low risk |
| Royal London Sustainable Diversified Trust | Mixed Investment 20-60% Shares | GB00B844WJ68 | Low risk |
| Royal London Sustainable Leaders Trust | UK All Companies | GB00B7V23Z99 | Medium risk |
| Royal London Sustainable Managed Growth Trust | Mixed Investment 0-35% Shares | GB00B8H7XS88 | Low risk |
| Royal London Sustainable World Trust | Mixed Investment 40-85% Shares | GB00B882H241 | Medium risk |
| Sarasin Global Dividend (Sterling Hedged) | Global Equity Income | GB00BGDF8439 | Medium risk |
| Sarasin Global Equity Real Return | Flexible Investment | GB00B7W4B053 | Medium risk |
| Sarasin Responsible Global Equity (Sterling Hedged) | Global | GB00B816B655 | Medium risk |
| Sarasin Thematic Global Equity (Sterling Hedged) | Global | GB00B83F3755 | High risk |
| Schroder Sterling Corporate Bond | Sterling Corporate Bond | GB0009379370 | Low risk |
| Thesis Climate Assets | Mixed Investment 40-85% Shares | GB00B3K3HX15 | Medium risk |
| VT Gravis Clean Energy Income | Global | GB00BFN4H792 | Medium 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 black while new additions are in green):
| Name | Sector | ISIN Code | Risk |
| ASI Corporate Bond | Sterling Corporate Bond | GB00BWK26G71 | Low risk |
| BNY Mellon Global Absolute Return | Targeted Absolute Return | GB00B86R4N19 | Low risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Liontrust Sustainable Future Corporate Bond | Sterling Corporate Bond | GB0030029069 | Low risk |
| Merian Corporate Bond | Sterling Corporate Bond | GB00B1XG7X39 | Low risk |
| Merian Monthly Income Bond | Sterling Strategic Bond | GB00B1XG8187 | Low risk |
| Premier Diversified Income | Mixed Investment 20-60% Shares | GB00BYPDV863 | Low risk |
| Royal London Sustainable Diversified Trust | Mixed Investment 20-60% Shares | GB00B844WJ68 | Low risk |
| Royal London Sustainable Managed Growth Trust | Mixed Investment 0-35% Shares | GB00B8H7XS88 | Low risk |
| Schroder Sterling Corporate Bond | Sterling Corporate Bond | GB0009379370 | Low risk |
| ASI Japanese Equity | Japan | GB0004521737 | Medium risk |
| Fidelity Enhanced Income | UK Equity Income | GB00B87HPZ94 | Medium risk |
| First State Diversified Growth | Flexible Investment | GB00BVXC2S15 | Medium risk |
| Royal London Sustainable Leaders Trust | UK All Companies | GB00B7V23Z99 | Medium risk |
| Royal London Sustainable World Trust | Mixed Investment 40-85% Shares | GB00B882H241 | Medium risk |
| Sarasin Global Dividend (Sterling Hedged) | Global Equity Income | GB00BGDF8439 | Medium risk |
| Sarasin Global Equity Real Return | Flexible Investment | GB00B7W4B053 | Medium risk |
| Sarasin Responsible Global Equity (Sterling Hedged) | Global | GB00B816B655 | Medium risk |
| Thesis Climate Assets | Mixed Investment 40-85% Shares | GB00B3K3HX15 | Medium risk |
| VT Gravis Clean Energy Income | Global | GB00BFN4H792 | Medium risk |
| ASI UK Real Estate Share | Property Other | GB00B0XWNN66 | High risk |
| Baillie Gifford Positive Change | Global | GB00BYVGKV59 | High risk |
| Barclays Europe (ex-UK) Alpha | Europe Excluding UK | GB00B72WQ825 | High risk |
| BlackRock Continental European | Europe Excluding UK | GB00B4VY9893 | High risk |
| Close FTSE techMARK | Technology & Telecommunications | GB00B87JKQ15 | High risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| First State Japan Focus | Japan | GB00BWNGX432 | High risk |
| Jupiter Japan Income | Japan | GB00B0HZTZ55 | High risk |
| Marlborough US Multi-Cap Income | North America | GB0001722882 | High risk |
| Sarasin Thematic Global Equity (Sterling Hedged) | Global | GB00B83F3755 | 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. Many of them remain in the Best funds by Sector selection:
| Name | Sector | ISIN Code | Risk |
| ASI Ethical Corporate Bond | Sterling Corporate Bond | GB00B708KW45 | Low risk |
| ASI Global Real Estate Share | Property Other | GB00B7MR5W47 | High risk |
| ASI Sterling Bond | Global Bonds | GB00BWK27087 | Low risk |
| AXA Framlington UK Growth | UK All Companies | GB0003509873 | Medium risk |
| Baillie Gifford Multi Asset Income | Flexible Investment | GB00BFXY2964 | Low risk |
| Close Growth Portfolio | Flexible Investment | GB00B7F1W221 | Medium risk |
| Fidelity European | Europe Excluding UK | GB00BFRT3504 | Medium risk |
| Fidelity Global Dividend | Global Equity Income | GB00B7778087 | Medium risk |
| Fidelity Global Focus | Global | GB00B3RDH349 | High risk |
| Fidelity Multi Asset Allocator Defensive | Mixed Investment 0-35% Shares | GB00B8YQD220 | Low risk |
| First State Global Property Securities | Property Other | GB00B1F76N79 | High risk |
| Franklin Sterling Corporate Bond | Sterling Corporate Bond | GB00BYZCTS97 | Low risk |
| Franklin UK Gilt | UK Gilts | GB00BYZCTV27 | Low risk |
| L&G Global Health & Pharmaceuticals Index Trust | Global | GB00B0CNH387 | High risk |
| LF Miton Global Infrastructure Income | Global Equity Income | GB00BD3H9L21 | Medium risk |
| Liontrust Japan Equity | Japan | GB00BXDZFF23 | High risk |
| M&G Global Listed Infrastructure | Global | GB00BF00R928 | Medium risk |
| Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG8G39 | Low risk |
| Sarasin Responsible Global Equity | Global | GB00B8369M57 | High risk |
| Schroder Global Cities Real Estate | Property Other | GB00B1VPTY75 | High risk |
| Slater Growth | UK All Companies | GB00B0706C66 | 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 17% (17%)
- Alternatives 10% (12%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 7% (6%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 7% (12%)
- European Equities 11% (9%)
- Japanese Equities 11% (11%)
- Property 4% (10%)
- UK Equities 19% (13%)
- Gilts 0% (5%)
- Cash 4% (0%)
- Emerging market equities % (0%)
- Other international equities 6% (3%)
- Asian Equities 0% (0%)
- Commodities and Energy 4% (2%)
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 60-85% 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 portfolio has HUGELY outperformed the average managed fund and the market.
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