Commentary
Of the 30 funds in November’s BOTB, 18 funds have retained their place in December’s selection. The chart below shows the average performance of the BOTB during November (the green 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 blue line). You can see that the BOTB marginally underperformed its benchmark.
The chart also shows how the selection has fared against the average professionally managed fund from the Mixed Investment 20-60% Shares sector and the Mixed Investment 40-85% Shares sector. The former is typically more cautious than the BOTB given its lower equity exposure while the latter tends to be more adventurous. You can see that the BOTB lagged during the last two weeks of November when we saw the trends that have been driving investment markets throughout 2022 suddenly reverse. That meant that the US dollar weakened significantly during the second half of November, while bonds rallied as did key equity markets and sectors (such as US tech stocks). In contrast many commodities lagged, with the exception being gold.
The biggest drag on performance was the sudden strengthening of the pound versus the US dollar. The pound rallied almost 8% from mid-November, which is why the US equity funds within November’s BOTB finished the month down between 1-2%, despite US equity markets rallying 8% in US dollar terms. The table below shows the top performers in November's BOTB. It’s good to see BlackRock Natural Resources Growth & Income and Jupiter Global Value Equity in the list as they are both in my £50k portfolio.
| Fund | November % return |
| MI Thornbridge Global Opportunities | 7.08 |
| Stewart Investors Asia Pacific Sustainability | 5.26 |
| Stewart Investors Global Emerging Markets** | 5.09 |
| Jupiter Global Value Equity | 5.06 |
| BlackRock Natural Resources Growth & Income | 4.37 |
At the other end of the scale the worst-performing funds, shown in the table below, include those with significant US exposure.
| Fund | November % return |
| Fidelity American Special Situations | -1.40 |
| Stewart Investors Indian Subcontinent Sustainability** | -1.42 |
| AXA Framlington Health | -1.93 |
| Schroder Global Healthcare | -2.59 |
| AXA Framlington Biotech | -3.32 |
| abrdn Latin American Equity | -6.25 |
Despite the disappointing monthly performance from the likes of AXA Framlington Biotech they remain in December's BOTB because the algorithm doesn’t focus just on fund performance over the last couple of weeks, it looks at momentum over many months. In time, if the recent change in market sentiment continues then this will be reflected in the BOTB.
December’s BOTB has a slightly higher equity exposure, at 61%. There is a slightly reduced US equity exposure, while we see an increased exposure to Asian equities and emerging market equities (all beneficiaries from a weaker US dollar and hopes of China relaxing its covid restrictions). While there is still no direct exposure to Chinese equities, funds such as FSSA Asia Focus Fund Class have as much as 25% of their assets in Chinese equities. Any indirect Chinese equity exposure in the BOTB is currently classified under emerging markets equities.
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 eight years ago.
Below I list this month's selection in full with the 18 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 |
| abrdn Global Equity | Global | GB0031682627 | High risk |
| Artemis Strategic Assets | Flexible Investment | GB00B3VDD431 | Medium risk |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Low risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| AXA Framlington Health | Healthcare | GB00BRJZVQ71 | High risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Low risk |
| BNY Mellon Global Income | Global Equity Income | GB00B7XK5M25 | Medium risk |
| BNY Mellon Multi-Asset Balanced | Mixed Investment 40-85% Shares | GB00B8K9JZ06 | Medium risk |
| EdenTree Responsible and Sustainable Short Dated Bond | Sterling Corporate Bond | GB00BZ012J01 | Low risk |
| Fidelity European | Europe Excluding UK | GB00BFRT3504 | Medium risk |
| FSSA Asia Focus | Asia Pacific Excluding Japan | GB00BWNGXJ86 | High risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Low risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | High risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Margetts BLENHEIM Diversified Fixed Income | Sterling Strategic Bond | GB00BNDQ8X45 | Low risk |
| McInroy & Wood Emerging Markets | Global Emerging Markets | GB00B7SKS407 | High risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | High risk |
| Royal London Global Equity Income | Global Equity Income | GB00BL6V1118 | Medium risk |
| Schroder Sustainable Bond | Sterling Strategic Bond | GB00B57BFC79 | Low risk |
| Stewart Investors Asia Pacific Sustainability | Specialist | GB00B0TY6V50 | Medium risk |
| Stewart Investors Global Emerging Markets | Specialist | GB0030187438 | Medium risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| Stewart Investors Worldwide Leaders Sustainability | Global | GB0030978729 | High risk |
| T. Rowe Price Japanese Equity | Japan | GB00BD446L18 | High risk |
| T. Rowe Price US Large Cap Value Equity | North America | GB00BD446M25 | Medium risk |
| TB Evenlode Income | UK All Companies | GB00BD0B7D55 | Medium risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| VT Johnston Multi-Asset Cautious | Mixed Investment 20-60% Shares | GB00BM952705 | 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 |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Low risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Low risk |
| EdenTree Responsible and Sustainable Short Dated Bond | Sterling Corporate Bond | GB00BZ012J01 | Low risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Low risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Margetts BLENHEIM Diversified Fixed Income | Sterling Strategic Bond | GB00BNDQ8X45 | Low risk |
| Schroder Sustainable Bond | Sterling Strategic Bond | GB00B57BFC79 | Low risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| VT Johnston Multi-Asset Cautious | Mixed Investment 20-60% Shares | GB00BM952705 | Low risk |
| Artemis Strategic Assets | Flexible Investment | GB00B3VDD431 | Medium risk |
| BNY Mellon Global Income | Global Equity Income | GB00B7XK5M25 | Medium risk |
| BNY Mellon Multi-Asset Balanced | Mixed Investment 40-85% Shares | GB00B8K9JZ06 | Medium risk |
| Fidelity European | Europe Excluding UK | GB00BFRT3504 | Medium risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| Royal London Global Equity Income | Global Equity Income | GB00BL6V1118 | Medium risk |
| Stewart Investors Asia Pacific Sustainability | Specialist | GB00B0TY6V50 | Medium risk |
| Stewart Investors Global Emerging Markets | Specialist | GB0030187438 | Medium risk |
| T. Rowe Price US Large Cap Value Equity | North America | GB00BD446M25 | Medium risk |
| TB Evenlode Income | UK All Companies | GB00BD0B7D55 | Medium risk |
| abrdn Global Equity | Global | GB0031682627 | High risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| AXA Framlington Health | Healthcare | GB00BRJZVQ71 | High risk |
| FSSA Asia Focus | Asia Pacific Excluding Japan | GB00BWNGXJ86 | High risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | High risk |
| McInroy & Wood Emerging Markets | Global Emerging Markets | GB00B7SKS407 | High risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | High risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| Stewart Investors Worldwide Leaders Sustainability | Global | GB0030978729 | High risk |
| T. Rowe Price Japanese Equity | Japan | GB00BD446L18 | 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 |
| abrdn Latin American Equity | Latin America | GB00B41QSW23 | High risk |
| Aviva Inv Global Equity Income | Global Equity Income | GB0030441918 | Medium risk |
| Aviva Inv US Equity Income II | North America | GB00BCGD4N78 | Medium risk |
| AXA Sterling Credit Short Duration Bond | Sterling Corporate Bond | GB00B5L2N222 | Low risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| Schroder US Mid Cap | North America | GB00B7LDLV43 | High risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | High risk |
| T. Rowe Price Dynamic Global Bond | Targeted Absolute Return | GB00BD0NLR34 | Low risk |
| UBS MSCI World Minimum Volatility Index | Global | GB00BX9C1N70 | 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 16% (16%)
- Alternatives 14% (17%) - includes absolute return strategies & some bond exposure
- North American Equities 18% (23%)
- Emerging Market Equities 4% (4%)
- European Equities 9% (4%)
- Japanese Equities 5% (0%)
- UK Equities 11% (7%)
- Cash 9% (7%)
- Asian / Emerging market equities 14% (11%)
- Other international equities 0% (7%)
- Commodities and Energy 0% (4%)
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 BOTB has outperformed the average managed fund and the market.
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