80-20 Investor Best of the Best Selection – December 2021 Update

Commentary

Of the 30 funds in November's BOTB, 14 funds have retained their place in December's selection. The chart below shows the performance of the BOTB against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix. Following a strong October, the BOTB had a more muted November, marginally underperforming its benchmark. To give that further context a typical professionally managed multi-asset fund from the Mixed Investment 40-85% Shares sector made 0.13% in November.

The first table below shows the top performing funds within the BOTB for the month of November:

Fund	November % return
Liontrust Global Technology	5.46
M&G Index-Linked Bond	4.57
Stewart Investors Worldw. Lead. Sust.	4.09
Royal London Global Sustainable Equity	2.98
AXA Global Distribution	2.63
Royal London Sustainable World Trust	2.19
Royal London Global Index Linked	2.15

At the other end of the spectrum, the worst performers are shown below. Both tables reflect the impact of investor fear over Omicron with index-linked gilts outperforming while funds exposed to domestic equities and commodities underperforming (two of which I currently hold in my own £50k portfolio).

Fund	November % return
Liontrust India	-2.34
Fidelity UK Smaller Companies	-2.43
Jupiter Global Financial Innovation	-2.6
Fidelity Emerging Europe Middle East and Africa	-5.38
Liontrust Russia	-7.4

This month's BOTB once again sees a reduction in its UK equity exposure in favour of US equities but also in favour of technology stocks and UK gilts. In addition, the selection's overall equity exposure has fallen slightly to 65%. The focus of the portfolio remains US equities and then European and UK equities. It's interesting to see there is once again a small direct exposure to Asian equities (including Japan) but exposure to Indian equities has reduced, while exposure to Russian equities has vanished (owing to the slump in commodities). However some direct exposure to commodities remains. The selection's exposure to property equity funds has increased as bond yields have tumbled. At the low-risk end of the selection, there remains a significant allocation to Targeted Absolute Return funds and mixed asset funds.

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 seven years ago.

Below I list this month's selection in full with the 14 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 Europe ex UK Equity	Europe Excluding UK	GB00B0LG6N13	Medium risk
ASI Global Smaller Companies	Global	GB00B7KVX245	High risk
ASI Sterling Inflation-Linked Bond	UK Gilts	GB00BWK27319	High risk
Baillie Gifford Diversified Growth	Targeted Absolute Return	GB00B3FD0Z91	Low risk
BM Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
CFP Castlefield Real Return	Targeted Absolute Return	GB00B12V1482	Low risk
EF Tellsons Endeavour	Mixed Investment 20-60% Shares	GB00BJ391H08	Low risk
Fidelity American	North America	GB00B8GPC429	High risk
Fidelity Global Property	Property Other	GB00B7K2NZ09	Medium risk
Fidelity Index US	North America	GB00BJS8SH10	Medium risk
FP Pictet Multi Asset Portfolio	Targeted Absolute Return	GB00BVYTTC41	Low risk
IFSL Marlborough Global Bond	Global Bonds	GB0003474730	Low risk
Jupiter European	Europe Excluding UK	GB0006664683	Medium risk
LF Canlife Global Equity Income	Global Equity Income	GB00B5W34S70	Medium risk
Liontrust Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
M&G Index-Linked Bond	UK Index Linked Gilts	GB0031111478	High risk
Rathbone Global Opportunities Fund	Global	GB0030349095	High risk
Royal London Global Sustainable Equity	Global	GB00BL6V0581	Medium risk
Royal London Sustainable Leaders Trust	UK All Companies	GB00B7V23Z99	Medium risk
Schroder Global Cities Real Estate	Property Other	GB00B1VPTY75	Medium risk
Schroder Managed Wealth Portfolio	Mixed Investment 20-60% Shares	GB00B84YNB54	Low risk
Stewart Investors Asia Pacific Leaders Sustainability	Specialist	GB0033874768	High risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High risk
Stewart Investors Worldw. Lead. Sust.	Global	GB0030978729	Medium risk
SVS Sanlam North American Equity	North America	GB0007655698	Medium risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	High risk
TB Guinness Global Energy	Commodity/Natural Resources	GB00B56FW078	High risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	Low risk
VT Chelsea Managed Monthly Income	Mixed Investment 20-60% Shares	GB00BF0NMS52	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 black while new additions are in green):

Name	Sector	ISIN Code	Risk
Baillie Gifford Diversified Growth	Targeted Absolute Return	GB00B3FD0Z91	Low risk
BM Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
CFP Castlefield Real Return	Targeted Absolute Return	GB00B12V1482	Low risk
EF Tellsons Endeavour	Mixed Investment 20-60% Shares	GB00BJ391H08	Low risk
FP Pictet Multi Asset Portfolio	Targeted Absolute Return	GB00BVYTTC41	Low risk
IFSL Marlborough Global Bond	Global Bonds	GB0003474730	Low risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
Schroder Managed Wealth Portfolio	Mixed Investment 20-60% Shares	GB00B84YNB54	Low risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	Low risk
VT Chelsea Managed Monthly Income	Mixed Investment 20-60% Shares	GB00BF0NMS52	Low risk
ASI Europe ex UK Equity	Europe Excluding UK	GB00B0LG6N13	Medium risk
Fidelity Global Property	Property Other	GB00B7K2NZ09	Medium risk
Fidelity Index US	North America	GB00BJS8SH10	Medium risk
Jupiter European	Europe Excluding UK	GB0006664683	Medium risk
LF Canlife Global Equity Income	Global Equity Income	GB00B5W34S70	Medium risk
Royal London Global Sustainable Equity	Global	GB00BL6V0581	Medium risk
Royal London Sustainable Leaders Trust	UK All Companies	GB00B7V23Z99	Medium risk
Schroder Global Cities Real Estate	Property Other	GB00B1VPTY75	Medium risk
Stewart Investors Worldw. Lead. Sust.	Global	GB0030978729	Medium risk
SVS Sanlam North American Equity	North America	GB0007655698	Medium risk
ASI Global Smaller Companies	Global	GB00B7KVX245	High risk
ASI Sterling Inflation-Linked Bond	UK Gilts	GB00BWK27319	High risk
Fidelity American	North America	GB00B8GPC429	High risk
Liontrust Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
M&G Index-Linked Bond	UK Index Linked Gilts	GB0031111478	High risk
Rathbone Global Opportunities Fund	Global	GB0030349095	High risk
Stewart Investors Asia Pacific Leaders Sustainability	Specialist	GB0033874768	High risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	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
AXA Framlington American Growth	North America	GB00B5LXGG05	Medium risk
AXA Global Distribution	Mixed Investment 20-60% Shares	GB0008309063	Low risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resource	GB00B6865B79	High risk
Fidelity Emerging Europe Middle East and Africa	Specialist	GB00B87Z7808	High risk
Fidelity UK Smaller Companies	UK Smaller Companies	GB00B7VNMB18	High risk
Invesco High Yield (UK)	Sterling High Yield	GB00B3RW7649	Low risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	High risk
Jupiter Global Financial Innovation	Financials and Financial Innovation	GB00B551H564	High risk
Liontrust India	India/Indian Subcontinent	GB00B1L6DV51	High risk
Liontrust Russia	Specialist	GB00B86WB793	High risk
Marlborough European Multi-Cap	Europe Excluding UK	GB0001719730	High risk
Premier Miton Worldwide Opportunities	Flexible Investment	GB0031831133	Medium risk
Royal London Global Index Linked	Global Bonds	GB00B772RM82	Low risk
Royal London Sustainable Diversified Trust	Mixed Investment 20-60% Shares	GB00B844WJ68	Low risk
Royal London Sustainable World Trust	Mixed Investment 40-85% Shares	GB00B882H241	Medium risk
VT Redlands Multi-Asset Portfolio	Flexible Investment	GB00BDVK8839	Low 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 10% (10%)
• Alternatives 18% (18%) - includes absolute return strategies & some bond exposure
• UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
• Emerging Market Fixed Income 0% (0%)
• North American Equities 22% (22%)
• European Equities 9% (7%)
• Chinese Equities 0% (0%)
• Japanese Equities 0% (0%)
• Property 8% (5%)
• UK Equities 6% (11%)
• Gilts 7% (4%)
• Cash 0% (0%)
• Asian / Emerging market equities 7% (9%)
• Other international equities 8% (9%)
• Commodities and Energy 5% (5%)

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 portfolio has outperformed the average managed fund and the market.

 

 

 

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