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.
All performance figures are net of fund charges. The material in any email, the MoneytotheMasses.com website, associated pages / channels / accounts and any other correspondence are for general information only and do not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation. See full Terms & Conditions, Privacy Policy and Disclaimer.
Neither MoneytotheMasses.com or 80-20 Investor nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
Funds invest in shares, bonds, and other financial instruments and are by their nature speculative and can be volatile. You should never invest more than you can safely afford to lose. The value of your investment can go down as well as up so you may get back less than you originally invested. Tax rules can change and benefits depend on individual circumstances.
Information provided by MoneytotheMasses.com or 80-20 Investor is for general information only and not intended to be relied upon by readers in making (or not making) specific investment decisions.
Appropriate independent advice should be obtained before making any such decisions. Leadenhall Learning (owner of MoneytotheMasses.com or 80-20 Investor) and its staff do not accept liability for any loss suffered by readers as a result of any such decisions.
The tables and graphs are derived from data supplied by Trustnet. All Rights Reserved.
