Commentary
Of the 30 funds in January's BOTB, selection 16 funds have retained their place in February's selection after another strong monthly performance. The BOTB as a group rose 0.76%, significantly outperforming the average professionally managed fund which lost money, as shown by the performance of the Mixed Investment 40-85% Shares sector (green line) in the chart below. In fact, if the BOTB selection was a fund it would have outperformed 229 of the 262 funds from the Mixed Investment 40-85% Shares sector during January. That would have put it in the top 10% of performers in January, but don't forget that many funds from the sector take far more investment risk than the BOTB does as a whole.
What is interesting is that the BOTB underperformed its benchmark by some margin. The benchmark is calculated based on the average performance of funds from those sectors represented by the fund's within the BOTB itself. What the chart therefore suggests is that the performance of the BOTB was driven more by the asset allocation rather than the outperformance of the individual funds within it.
Obviously, the chart above only looks at the average across all of the funds within the BOTB and there is a wide range of performances among the funds that make up the selection. The top-performing funds in January's BOTB are highlighted in the table below. Once again, there were some incredible performances from funds with exposure to US equities and tech stocks in particular. It is good to see Liontrust India and T. Rowe Price US Large Cap Growth Equity, which are in my own £50k portfolio, performing well. It's also good to see Japanese equities enjoying a resurgence after a more disappointing December.
| Fund | January 2024 % return |
| Liontrust Global Technology | 6.36 |
| T. Rowe Price US Large Cap Growth Equity | 5.18 |
| Liontrust India | 4.51 |
| FTF Franklin US Opportunities | 4.47 |
| Artemis US Select | 3.88 |
| WS Morant Wright Nippon Yield | 3.81 |
At the other end of the scale European equities, Property equities and emerging market equities prop up the performance table for January, with emerging markets hurt by a strengthening dollar.
| Fund | January 2024 % return |
| Schroder Income Maximiser | -1.99 |
| WS Ardtur Continental European | -2.26 |
| Invesco Emerging Markets ex China (UK) | -2.63 |
| abrdn UK Real Estate Share | -2.88 |
| CT Latin America | -3.89 |
In terms of asset mix, not much has changed this month given that over half of the funds remain the same, and those that have changed have mostly been replaced with peers from the same sector. As can be seen from the asset mix comparison (see later in this article) the main difference is a reduction in emerging market and European equity exposure while property shares have been removed entirely. Overall the total equity exposure has increased marginally again, from 62% to 64%. You can see the full asset mix breakdown later in this article.
Below I list this month's selection in full with the 16 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 |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| Artemis Global Income | Global Equity Income | GB00B5N99561 | Medium risk |
| Artemis US Select | North America | GB00BMMV5105 | Medium risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | Higher risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| CT High Yield Bond | Sterling High Yield | GB0008371014 | Lower risk |
| Fidelity Index Japan | Japan | GB00BHZK8872 | Medium risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| Invesco Global Equity (UK) | Global | GB00B3RS9Q62 | Medium risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Lower risk |
| Invesco Monthly Income Plus (UK) | Sterling Strategic Bond | GB00B1W7J204 | Lower risk |
| Jupiter Financial Opportunities | Financials and Financial Innovation | GB0004790191 | Higher risk |
| Jupiter India | India/Indian Subcontinent | GB00B2NHJ040 | Higher risk |
| Jupiter Merian Global Equity | Global | GB00B1XG8F22 | Medium risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | Higher risk |
| Man GLG Absolute Value | Targeted Absolute Return | GB00BF1X8084 | Lower risk |
| Man GLG High Yield Opportunities | Sterling High Yield | GB00BJK3W057 | Lower risk |
| Man GLG Sterling Corporate Bond | Sterling Corporate Bond | GB00BNLYQX62 | Lower risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| Royal London UK Smaller Companies | UK Smaller Companies | GB00B3NQHL55 | Higher risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Lower risk |
| Schroder Sterling Corporate Bond | Sterling Corporate Bond | GB0009379370 | Lower risk |
| T. Rowe Price Global Technology Equity | Technology & Technology Innovation | GB00BD446K01 | Higher risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Medium risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Lower risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| UBS US Growth | North America | GB00B7VHZX64 | Medium risk |
| VT Downing Unique Opportunities | UK All Companies | GB00BHNC2614 | Higher risk |
| WS Morant Wright Nippon Yield | Japan | GB00B42MKS95 | 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 |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| CT High Yield Bond | Sterling High Yield | GB0008371014 | Lower risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Lower risk |
| Invesco Monthly Income Plus (UK) | Sterling Strategic Bond | GB00B1W7J204 | Lower risk |
| Man GLG Absolute Value | Targeted Absolute Return | GB00BF1X8084 | Lower risk |
| Man GLG High Yield Opportunities | Sterling High Yield | GB00BJK3W057 | Lower risk |
| Man GLG Sterling Corporate Bond | Sterling Corporate Bond | GB00BNLYQX62 | Lower risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Lower risk |
| Schroder Sterling Corporate Bond | Sterling Corporate Bond | GB0009379370 | Lower risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Lower risk |
| Artemis Global Income | Global Equity Income | GB00B5N99561 | Medium risk |
| Artemis US Select | North America | GB00BMMV5105 | Medium risk |
| Fidelity Index Japan | Japan | GB00BHZK8872 | Medium risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| Invesco Global Equity (UK) | Global | GB00B3RS9Q62 | Medium risk |
| Jupiter Merian Global Equity | Global | GB00B1XG8F22 | Medium risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Medium risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| UBS US Growth | North America | GB00B7VHZX64 | Medium risk |
| WS Morant Wright Nippon Yield | Japan | GB00B42MKS95 | Medium risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | Higher risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| Jupiter Financial Opportunities | Financials and Financial Innovation | GB0004790191 | Higher risk |
| Jupiter India | India/Indian Subcontinent | GB00B2NHJ040 | Higher risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | Higher risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| Royal London UK Smaller Companies | UK Smaller Companies | GB00B3NQHL55 | Higher risk |
| T. Rowe Price Global Technology Equity | Technology & Technology Innovation | GB00BD446K01 | Higher risk |
| VT Downing Unique Opportunities | UK All Companies | GB00BHNC2614 | Higher 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 UK Real Estate Share | Property Other | GB00B0XWNM59 | Higher risk |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Lower risk |
| CT Emerging Market Bond | Global EM Bonds - Hard Currency | GB0002365608 | Lower risk |
| CT Latin America | Latin America | GB0001531754 | Higher risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | Higher risk |
| Invesco Emerging Markets ex China (UK) | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Invesco Global Equity Income (UK) | Global Equity Income | GB00B3FD1Z66 | Medium risk |
| L&G Multi-Asset Target Return | Targeted Absolute Return | GB00BD97XY71 | Lower risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| M&G Strategic Corporate Bond | Sterling Corporate Bond | GB00B4MQK815 | Lower risk |
| Man GLG Undervalued Assets | UK All Companies | GB00BFH3NC99 | Higher risk |
| Schroder Income Maximiser | UK Equity Income | GB00B5B0KM51 | Medium risk |
| WS Ardtur Continental European | Europe Excluding UK | GB0031831570 | Higher 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 18% (18%)
- UK Fixed Interest 0% (0%)
- Alternatives 16% (16%) - includes absolute return strategies
- North American Equities 27% (27%)
- American Emerging Market Equities 0% (6%)
- Asian Emerging Market Equities 7% (4%)
- European Equities 3% (5%)
- Japanese Equities 7% (4%)
- UK Equities 11% (10%)
- Cash 2% (4%)
- China Equities 0% (0%)
- Property Equities 0% (3%)
- Other international equities 9% (3%)
- Commodities and Energy 0% (0%)
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 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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