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

Commentary

Of the 30 funds in January’s BOTB, only 9 funds have retained their place in February’s selection, which is one of the lowest levels of consistency since I’ve been running 80-20 Investor. It is a reflection of the rapid repricing of assets as investors grow increasingly concerned over how aggressively central banks will remove monetary stimulus, especially in the US. The chart below shows the average performance of the BOTB during January against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix.

 

The performance is a reflection of the equity and bond market sell-off we saw across markets, as highlighted by the chart below showing the price moves of key stock market indices during January. The BOTB was hampered by its exposure to technology stocks which struggled as concerns grew of the increasingly hawkish stance of most global central banks.

In fact, if you look at the performance of all 1270+ unit trust funds we analyse as part of 80-20 Investor, 90% of them lost money in January. And that is irrespective of the asset that they invest in. Those funds that managed to finish in profit were largely invested in UK equity funds. The chart below shows the top five performers from January's BOTB. It is pleasing to see that the top three funds are within my own £50k portfolio.

Fund	% return in January
BlackRock Natural Resources Growth & Income	5.68
Invesco UK Opportunities (UK)	3.64
BM SVS Brooks Macdonald Defensive Capital	-0.9
Premier Miton Multi-Asset Monthly Income	-0.93
Artemis Monthly Distribution	-1.08

 

At the other end of the scale, those funds that experienced the worst of the market slump had exposure to technology stocks

Fund	% return in January
Royal London Global Sustainable Equity	-10.63
Stewart Investors Worldw. Lead. Sust.	-12.19
AXA Framlington Global Technology	-13.18
ASI UK Smaller Companies	-13.41
Liontrust Global Technology	-14.21

 

This month's selection saw a radical change in constituents but also an overall decrease in equity exposure, falling from 70% to 63%. The biggest change was an increased exposure to UK equities at the expense of US equities. Interestingly there is now a small exposure to Japanese equities and also an increased exposure to commodities. The low-risk end of the selection still has an absence of bond funds, focusing instead on 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 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.

February'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
Artemis Monthly Distribution	Mixed Investment 20-60% Shares	GB00B6TK3R06	Low risk
Artemis SmartGARP European Equity	Europe Excluding UK	GB00B2PLJD73	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
BM SVS Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
CFP Castlefield Real Return	Targeted Absolute Return	GB00B12V1482	Low risk
Close Diversified Income Portfolio	Mixed Investment 20-60% Shares	GB00B708TJ43	Low risk
EdenTree Responsible & Sustainable Managed Income	Mixed Investment 40-85% Shares	GB0009449710	Medium risk
Fidelity American Special Situations	North America	GB00B89ST706	Medium risk
Fidelity Index US	North America	GB00BJS8SH10	High risk
GAM UK Equity Income	UK Equity Income	GB00BF7M7V38	High risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
JPM US Equity Income	North America	GB00B3FJQ151	Medium risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	High risk
Margetts Providence Strategy	Mixed Investment 20-60% Shares	GB00B4VR6328	Low risk
MI Thornbridge Global Opportunities	Global	GB00B5TP8W88	Medium risk
Premier Miton Defensive Growth	Targeted Absolute Return	GB00B832BD89	Low risk
Premier Miton Multi-Asset Monthly Income	Mixed Investment 20-60% Shares	GB00B7GGPC79	Low risk
Royal London Diversified Asset-Backed Securities	Targeted Absolute Return	GB00B4K6P774	Low risk
Royal London GMAP Balanced	Mixed Investment 20-60% Shares	GB00BD8RSQ51	Low risk
Royal London UK Income With Growth Trust	Mixed Investment 40-85% Shares	GB0001598050	Medium risk
Sarasin Global Higher Dividend	Global Equity Income	GB00B84ZSV39	High risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	High risk
Schroder Global Equity Income	Global Equity Income	GB00B76V7M69	High risk
Schroder Income	UK Equity Income	GB00B3PM1190	Medium risk
Schroder Recovery	UK All Companies	GB00B3VVG600	Medium risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High risk
TB Guinness Global Energy	Commodity/Natural Resources	GB00B56FW078	High risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
Vanguard FTSE UK Equity Income Index	UK Equity Income	GB00B59G4H82	Medium risk
Wise Funds Limited TB Wise Multi-Asset Income	Flexible Investment	GB00B0LJ0160	Medium risk

February's Best of the Best Selection - (grouped by risk)

Here is February'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
Artemis Monthly Distribution	Mixed Investment 20-60% Shares	GB00B6TK3R06	Low risk
BM SVS Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
CFP Castlefield Real Return	Targeted Absolute Return	GB00B12V1482	Low risk
Close Diversified Income Portfolio	Mixed Investment 20-60% Shares	GB00B708TJ43	Low risk
Margetts Providence Strategy	Mixed Investment 20-60% Shares	GB00B4VR6328	Low risk
Premier Miton Defensive Growth	Targeted Absolute Return	GB00B832BD89	Low risk
Premier Miton Multi-Asset Monthly Income	Mixed Investment 20-60% Shares	GB00B7GGPC79	Low risk
Royal London Diversified Asset-Backed Securities	Targeted Absolute Return	GB00B4K6P774	Low risk
Royal London GMAP Balanced	Mixed Investment 20-60% Shares	GB00BD8RSQ51	Low risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
EdenTree Responsible & Sustainable Managed Income	Mixed Investment 40-85% Shares	GB0009449710	Medium risk
Fidelity American Special Situations	North America	GB00B89ST706	Medium risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
JPM US Equity Income	North America	GB00B3FJQ151	Medium risk
MI Thornbridge Global Opportunities	Global	GB00B5TP8W88	Medium risk
Royal London UK Income With Growth Trust	Mixed Investment 40-85% Shares	GB0001598050	Medium risk
Schroder Income	UK Equity Income	GB00B3PM1190	Medium risk
Schroder Recovery	UK All Companies	GB00B3VVG600	Medium risk
Vanguard FTSE UK Equity Income Index	UK Equity Income	GB00B59G4H82	Medium risk
Wise Funds Limited TB Wise Multi-Asset Income	Flexible Investment	GB00B0LJ0160	Medium risk
Artemis SmartGARP European Equity	Europe Excluding UK	GB00B2PLJD73	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
Fidelity Index US	North America	GB00BJS8SH10	High risk
GAM UK Equity Income	UK Equity Income	GB00BF7M7V38	High risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	High risk
Sarasin Global Higher Dividend	Global Equity Income	GB00B84ZSV39	High risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	High risk
Schroder Global Equity Income	Global Equity Income	GB00B76V7M69	High risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	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
ASI UK Smaller Companies	UK Smaller Companies	GB00B7FBH943	High risk
AXA Framlington Global Technology	Technology & Telecommunication	GB00B4W52V57	High risk
Baillie Gifford Diversified Growth	Targeted Absolute Return	GB00BYQCYV62	Low risk
Baillie Gifford Multi Asset Growth	Targeted Absolute Return	GB00BY9C5Y31	Low risk
BMO MM Navigator Distribution	Mixed Investment 20-60% Shares	GB00B23Y3F84	Low risk
BMO North American Equity	North America	GB0030281405	Medium risk
FP Foresight Sustainable Real Estate Securities	Property Other	GB00BMFYBB80	High risk
FP Pictet Multi Asset Portfolio	Targeted Absolute Return	GB00BVYTTC41	Low risk
JPM US Select	North America	GB00B2Q5DW58	High risk
LF Canlife Global Equity Income	Global Equity Income	GB00B5W34S70	Medium risk
Liontrust Global Technology	Technology & Telecommunication	GB00BYXZ5N79	High risk
Morgan Stanley Global Brands	Global	GB0032482498	Medium risk
Quilter Investors Ethical Equity	Global	GB00B0JZPC21	High risk
Royal London Global Sustainable Equity	Global	GB00BL6V0581	High 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 Worldw. Lead. Sust.	Global	GB0030978729	Medium risk
SVM Continental Europe	Europe Excluding UK	GB0032064411	High risk
SVS Sanlam North American Equity	North America	GB0007655698	Medium risk
VT Chelsea Managed Monthly Income	Mixed Investment 20-60% Shares	GB00BF0NMS52	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 11% (8%)
• Alternatives 25% (22%) - 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 12% (28%)
• European Equities 11% (7%)
• Chinese Equities 0% (0%)
• Japanese Equities 4% (0%)
• Property 0% (8%)
• UK Equities 19% (12%)
• Gilts 0% (0%)
• Cash 0% (0%)
• Asian / Emerging market equities 0% (4%)
• Other international equities 10% (6%)
• Commodities and Energy 8% (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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