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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