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

Commentary

Of the 30 funds in December's BOTB, 15 funds have retained their place in January’s selection. The chart below shows the performance of the BOTB against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix. The BOTB finished December in positive territory but it underperformed its benchmark. To give that further context a typical professionally managed multi-asset fund from the Mixed Investment 40-85% Shares sector made 1.63% in December. The BOTB was hampered by its exposure to technology stocks and gilts which struggled after the Bank of England raised interest rates and the US Federal Reserve took a more hawkish stance.

The first table below shows the top-performing funds within the BOTB for the month of December:

Fund	December % return
Fidelity Global Property	4.16
Royal London Sustainable Leaders Trust	3.88
Schroder Global Cities Real Estate	3.61
Fidelity Index US	2.79
Stewart Investors Indian Subcontinent Sustainability	2.71
VT Chelsea Managed Monthly Income	2.54
SVS SVS Brooks Macdonald Defensive Capital	2.03

 

At the other end of the spectrum, the worst performers are shown below. The tables are almost the inverse of what we saw in November, with technology stocks and funds with significant bond exposure struggling.

Fund	December % return
Vanguard LifeStrategy 20% Equity	-0.79
IFSL Marlborough Global Bond	-0.86
ASI Global Smaller Companies	-1.35
Liontrust Global Technology	-3.91
M&G Index-Linked Bond	-4.97
ASI Sterling Inflation-Linked Bond	-5.75
T. Rowe Price Global Technology Equity	-10.65

This month's selection sees an overall increase in its equity exposure rising from 65% to 70%, which is the largest for some time. The increase can be attributed to an increased exposure to both US equities and UK equities with the former remaining the focal point of the portfolio. There remains a small exposure to emerging market equities but there is no longer a direct exposure to Asian or Japanese equities. Some commodity exposure remains as does an allocation to property equity funds. It is interesting to see that the low-risk end of the selection no longer has any bond funds at all, now being exclusively populated by targeted absolute return funds and mixed asset funds. This is one of the few times this has ever happened and is a symptom of the rising rate environment in which we find ourselves as a result of more hawkish central bank policy decisions.

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 15 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.

January'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
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
BlackRock Natural Resources Growth & Income	Commodity/Natural Resource	GB00B6865B79	High risk
BMO MM Navigator Distribution	Mixed Investment 20-60% Shares	GB00B23Y3F84	Low risk
BMO North American Equity	North America	GB0030281405	Medium risk
CFP Castlefield Real Return	Targeted Absolute Return	GB00B12V1482	Low risk
Fidelity Index US	North America	GB00BJS8SH10	Medium risk
FP Foresight Sustainable Real Estate Securities	Property Other	GB00BMFYBB80	High risk
FP Pictet Multi Asset Portfolio	Targeted Absolute Return	GB00BVYTTC41	Low risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium 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
Premier Miton Multi-Asset Monthly Income	Mixed Investment 20-60% Shares	GB00B7GGPC79	Low 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
Sarasin Global Higher Dividend	Global Equity Income	GB00B84ZSV39	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 Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High 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
SVS SVS Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
VT Chelsea Managed Monthly Income	Mixed Investment 20-60% Shares	GB00BF0NMS52	Low risk

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

Here is January'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
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
CFP Castlefield Real Return	Targeted Absolute Return	GB00B12V1482	Low risk
FP Pictet Multi Asset Portfolio	Targeted Absolute Return	GB00BVYTTC41	Low risk
Premier Miton Multi-Asset Monthly Income	Mixed Investment 20-60% Shares	GB00B7GGPC79	Low risk
Schroder Managed Wealth Portfolio	Mixed Investment 20-60% Shares	GB00B84YNB54	Low risk
SVS SVS Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
VT Chelsea Managed Monthly Income	Mixed Investment 20-60% Shares	GB00BF0NMS52	Low risk
BMO North American Equity	North America	GB0030281405	Medium risk
Fidelity Index US	North America	GB00BJS8SH10	Medium risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
LF Canlife Global Equity Income	Global Equity Income	GB00B5W34S70	Medium risk
Morgan Stanley Global Brands	Global	GB0032482498	Medium risk
Royal London Sustainable Leaders Trust	UK All Companies	GB00B7V23Z99	Medium risk
Sarasin Global Higher Dividend	Global Equity Income	GB00B84ZSV39	Medium risk
Schroder Global Cities Real Estate	Property Other	GB00B1VPTY75	Medium risk
Stewart Investors Worldw. Lead. Sust.	Global	GB0030978729	Medium risk
SVS Sanlam North American Equity	North America	GB0007655698	Medium risk
ASI UK Smaller Companies	UK Smaller Companies	GB00B7FBH943	High risk
AXA Framlington Global Technology	Technology & Telecommunication	GB00B4W52V57	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resource	GB00B6865B79	High risk
FP Foresight Sustainable Real Estate Securities	Property Other	GB00BMFYBB80	High risk
JPM US Select	North America	GB00B2Q5DW58	High risk
Liontrust Global Technology	Technology & Telecommunication	GB00BYXZ5N79	High risk
Quilter Investors Ethical Equity	Global	GB00B0JZPC21	High risk
Royal London Global Sustainable Equity	Global	GB00BL6V0581	High risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High risk
SVM Continental Europe	Europe Excluding UK	GB0032064411	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 Europe ex UK Equity	Europe Excluding UK	GB00B0LG6N13	Medium risk
ASI Global Smaller Companies	Global	GB00B7KVX245	High risk
ASI Sterling Inflation-Linked Bond	UK Gilts	GB00BWK27319	High risk
EF Tellsons Endeavour	Mixed Investment 20-60% Shares	GB00BJ391H08	Low risk
Fidelity American	North America	GB00B8GPC429	High risk
Fidelity Global Property	Property Other	GB00B7K2NZ09	Medium risk
IFSL Marlborough Global Bond	Global Bonds	GB0003474730	Low risk
Jupiter European	Europe Excluding UK	GB0006664683	Medium risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
M&G Index-Linked Bond	UK Index Linked Gilts	GB0031111478	High risk
Rathbone Global Opportunities Fund	Global	GB0030349095	High risk
Stewart Investors Asia Pacific Leaders Sustainability	Specialist	GB0033874768	High risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	High risk
TB Guinness Global Energy	Commodity/Natural Resources	GB00B56FW078	High risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	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 8% (10%)
• Alternatives 22% (18%) - 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 28% (22%)
• European Equities 7% (9%)
• Chinese Equities 0% (0%)
• Japanese Equities 0% (0%)
• Property 8% (8%)
• UK Equities 12% (6%)
• Gilts 0% (7%)
• Cash 0% (0%)
• Asian / Emerging market equities 4% (7%)
• Other international equities 6% (8%)
• Commodities and Energy 5% (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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