80-20 Investor Best of the Best Selection – February 2023 Update

Commentary

Of the 30 funds in January's BOTB, 19 funds have retained their place in February's selection. The chart below shows the average performance of the BOTB during January (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, but it was still a very strong month for returns, especially coming off the back of a robust December. So it's unsurprising that almost two-thirds of the funds have retained their place in the BOTB.

The above 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.

Within the BOTB the only drag on performance came from Indian equities (once again) and two absolute return funds which were only marginally down. With only three funds failing to make a profit during the month (shown below) it is a great result for the BOTB. The bottom five performing funds are shown below with one of them (the Thesis fund) appearing in my £50k portfolio. However that fund does have the ability to short equity markets which is why it performed so well over the last year but struggled in January this year.

Fund	January 2023 % return
Aviva Inv Multi Strategy Target Return	0.38
Jupiter Merian Global Strategic Bond	0.31
Thesis TM Tellworth UK Select	-0.24
LF Ruffer Diversified Return	-0.64
Liontrust India	-3.78

At the other end of the scale the best-performing funds, shown in the table below, include Jupiter Global Value Equity once again which I hold in my £50k portfolio.

Fund	January 2023 % return
Ninety One Global Special Situations	9.19
LF Brook Continental European	8.19
MI Thornbridge Global Opportunities	5.7
UBS UK Equity Income	5.45
LF Lightman European	5.12
Jupiter Global Value Equity	5.08

February's BOTB still has an equity exposure of 60%. The only real differences between the asset mix of the BOTB this month compared to last month are a slightly reduced US equity exposure, the removal of exposure to Indian equities and a new direct exposure to Chinese equities. The European equity exposure remains the same after last month's bold move to include it was rewarded. 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 19 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
7IM Real Return	Targeted Absolute Return	GB00B75MS619	Low risk
7IM Select Moderately Adventurous	Mixed Investment 40-85% Shares	GB00BJ0C8G04	Medium risk
abrdn High Yield Bond	Sterling High Yield	GB00B79RR984	Low risk
abrdn Latin American Equity	Latin America	GB00B41QSW23	High risk
Artemis Strategic Assets	Flexible Investment	GB00B3VDD431	Medium risk
Aviva Inv Multi Strategy Target Return	Targeted Absolute Return	GB00BMTRW090	Low risk
AXA Global Short Duration Bonds	Sterling Strategic Bond	GB00BDFZQV30	Low risk
BlackRock Gold & General	Specialist	GB00B5ZNJ896	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
BNY Mellon Global Income	Global Equity Income	GB00B7XK5M25	Medium risk
ES R&M Global Recovery	Global	GB00B9428D30	High risk
Fidelity Global High Yield	Sterling High Yield	GB00B7K7SQ18	Low risk
Invesco China Equity (UK)	China/Greater China	GB00B3RW8C79	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
LF Brook Continental European	Europe Excluding UK	GB0031831570	High risk
LF Lightman European	Europe Excluding UK	GB00BGPFJN79	High risk
M&G Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium 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
Royal London Global Equity Select	Global	GB00BF93W972	Medium risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	High risk
Schroder MM Diversity	Mixed Investment 20-60% Shares	GB00B60CZD52	Low risk
TB Saracen Global Income & Growth	Global Equity Income	GB00B5B35X02	Medium risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
UBS UK Equity Income	UK Equity Income	GB00B4W58959	Medium risk
Vanguard FTSE UK Equity Income Index	UK Equity Income	GB00B59G4H82	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
7IM Real Return	Targeted Absolute Return	GB00B75MS619	Low risk
abrdn High Yield Bond	Sterling High Yield	GB00B79RR984	Low risk
Aviva Inv Multi Strategy Target Return	Targeted Absolute Return	GB00BMTRW090	Low risk
AXA Global Short Duration Bonds	Sterling Strategic Bond	GB00BDFZQV30	Low risk
Fidelity Global High Yield	Sterling High Yield	GB00B7K7SQ18	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
Schroder MM Diversity	Mixed Investment 20-60% Shares	GB00B60CZD52	Low risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
7IM Select Moderately Adventurous	Mixed Investment 40-85% Shares	GB00BJ0C8G04	Medium risk
Artemis Strategic Assets	Flexible Investment	GB00B3VDD431	Medium risk
BNY Mellon Global Income	Global Equity Income	GB00B7XK5M25	Medium risk
Jupiter Global Value Equity	Global	GB00BF5DRF26	Medium risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium risk
Royal London Global Equity Income	Global Equity Income	GB00BL6V1118	Medium risk
Royal London Global Equity Select	Global	GB00BF93W972	Medium risk
TB Saracen Global Income & Growth	Global Equity Income	GB00B5B35X02	Medium risk
UBS UK Equity Income	UK Equity Income	GB00B4W58959	Medium risk
Vanguard FTSE UK Equity Income Index	UK Equity Income	GB00B59G4H82	Medium risk
abrdn Latin American Equity	Latin America	GB00B41QSW23	High risk
BlackRock Gold & General	Specialist	GB00B5ZNJ896	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
ES R&M Global Recovery	Global	GB00B9428D30	High risk
Invesco China Equity (UK)	China/Greater China	GB00B3RW8C79	High risk
LF Brook Continental European	Europe Excluding UK	GB0031831570	High risk
LF Lightman European	Europe Excluding UK	GB00BGPFJN79	High risk
McInroy & Wood Emerging Markets	Global Emerging Markets	GB00B7SKS407	High risk
MI Thornbridge Global Opportunities	Global	GB00B5TP8W88	High risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	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 Europe ex UK Income Equity	Europe Excluding UK	GB00B7LG0W70	High risk
abrdn Global Focused Equity	Global	GB00B6915J97	High risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
EdenTree Responsible and Sustainable Short Dated Bond	Sterling Corporate Bond	GB00BZ012J01	Low risk
Invesco Global Bond (UK)	Global Bonds	GB00B3RW7B97	Low risk
Jupiter Merlin Balanced Portfolio	Mixed Investment 40-85% Shares	GB0031845141	Medium risk
LF Ruffer Diversified Return	Targeted Absolute Return	GB00BMWLQW82	Low risk
Liontrust India	India/Indian Subcontinent	GB00B1L6DV51	High risk
Ninety One Global Special Situations	Global	GB00B29KP103	High risk
Stewart Investors Asia Pacific Sustainability	Specialist	GB00B0TY6V50	Medium risk
TB Evenlode Income	UK All Companies	GB00BD0B7D55	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% (19%)
• Alternatives 16% (12%) - includes absolute return strategies
• North American Equities 11% (14%)
• Emerging Market Equities 3% (6%)
• European Equities 12% (12%)
• Japanese Equities 6% (5%)
• UK Equities 16% (15%)
• Cash 8% (8%)
• China Equities 3% (0%)
• Other international equities 5% (5%)
• Commodities and Energy 4% (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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