80-20 Investor Best of the Best Selection – December 2022 Update

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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