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

Commentary

Of the 30 funds in December's BOTB, 17 funds have retained their place in January's selection. The chart below shows the average performance of the BOTB during December (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 outperformed its benchmark, after last month’s disappointment.

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. You can see that the BOTB rebounded strongly during the last two weeks of December when we saw bonds struggle but Asian, emerging markets, UK, European and value stocks outperform their US peers, as shown in the chart below.

Within the BOTB the only drag on performance came from Indian equities and a few bond funds. But having said that, only three funds failed to make a profit during the month (shown below) which is a great result given how difficult December proved to be for investors, as shown in the chart above.

Fund	December 2022 % return
Schroder Sustainable Bond	0.08
Invesco Global Targeted Returns (UK)	0.02
Jupiter Monthly Income Bond	-0.04
EdenTree Responsible and Sustainable Short Dated Bond	-0.25
Stewart Investors Indian Subcontinent Sustainability	-0.36

At the other end of the scale the best-performing funds, shown in the table below, include FSSA Asia Focus, BNY Mellon Global Income and Jupiter Global Value Equity, each of which are in my £50k portfolio.

Fund	December 2022 % return
MI Thornbridge Global Opportunities	4.46
T. Rowe Price US Large Cap Value Equity	3.91
AXA Framlington Health	3.44
FSSA Asia Focus	3.3
Artemis Strategic Assets	3.14
BNY Mellon Global Income	3.12
McInroy & Wood Emerging Markets	2.74
Jupiter Global Value Equity	2.72

If you recall, last month AXA Framlington Biotech had a stay of execution, after a disappointing November, and was included in December's BOTB. Although not shown above it returned 2.31% over the course of December, which ultimately justified its inclusion. 

January's BOTB has an equity exposure of 60%. Once again, there is a slightly reduced US equity exposure but this month we also see a fall in the exposure to Asian/emerging markets. The key beneficiaries were UK equities and European equities. In fact the BOTB has its highest European equity exposure since the Ukraine war began. Similarly, the BOTB now has its highest exposure to bonds since the start of 2022. Both of these are bold moves that are in contrast with the trends that we saw in the BOTB during 2022, where European equity exposure and bond exposure were generally scaled back. Time will tell if the new shift proves profitable.

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 17 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
abrdn Europe ex UK Income Equity	Europe Excluding UK	GB00B7LG0W70	High risk
abrdn Global Focused Equity	Global	GB00B6915J97	High risk
abrdn High Yield Bond	Sterling High Yield	GB00B79RR984	Low risk
Artemis Strategic Assets	Flexible Investment	GB00B3VDD431	Medium risk
Aviva Inv Multi Strategy Target Return	Targeted Absolute Return	GB00BMTRW090	Low risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
AXA Global Short Duration Bonds	Sterling Strategic Bond	GB00BDFZQV30	Low risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
BNY Mellon Global Income	Global Equity Income	GB00B7XK5M25	Medium risk
EdenTree Responsible and Sustainable Short Dated Bond	Sterling Corporate Bond	GB00BZ012J01	Low risk
Invesco Global Bond (UK)	Global Bonds	GB00B3RW7B97	Low 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
Jupiter Merlin Balanced Portfolio	Mixed Investment 40-85% Shares	GB0031845141	Medium risk
LF Brook Continental European	Europe Excluding UK	GB0031831570	High risk
LF Lightman European	Europe Excluding UK	GB00BGPFJN79	High risk
LF Ruffer Diversified Return	Targeted Absolute Return	GB00BMWLQW82	Low risk
Liontrust India	India/Indian Subcontinent	GB00B1L6DV51	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
Ninety One Global Special Situations	Global	GB00B29KP103	High risk
Royal London Global Equity Income	Global Equity Income	GB00BL6V1118	Medium risk
Stewart Investors Asia Pacific Sustainability	Specialist	GB00B0TY6V50	Medium risk
TB Evenlode Income	UK All Companies	GB00BD0B7D55	Medium 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

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
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
EdenTree Responsible and Sustainable Short Dated Bond	Sterling Corporate Bond	GB00BZ012J01	Low risk
Invesco Global Bond (UK)	Global Bonds	GB00B3RW7B97	Low risk
Invesco Global Targeted Returns (UK)	Targeted Absolute Return	GB00B8CHD050	Low risk
Jupiter Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
LF Ruffer Diversified Return	Targeted Absolute Return	GB00BMWLQW82	Low risk
M&G Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low 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
Jupiter Merlin Balanced Portfolio	Mixed Investment 40-85% Shares	GB0031845141	Medium risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium risk
Royal London Global Equity Income	Global Equity Income	GB00BL6V1118	Medium risk
Stewart Investors Asia Pacific Sustainability	Specialist	GB00B0TY6V50	Medium risk
TB Evenlode Income	UK All Companies	GB00BD0B7D55	Medium risk
TB Saracen Global Income & Growth	Global Equity Income	GB00B5B35X02	Medium risk
UBS UK Equity Income	UK Equity Income	GB00B4W58959	Medium 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
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
LF Brook Continental European	Europe Excluding UK	GB0031831570	High risk
LF Lightman European	Europe Excluding UK	GB00BGPFJN79	High risk
Liontrust India	India/Indian Subcontinent	GB00B1L6DV51	High risk
McInroy & Wood Emerging Markets	Global Emerging Markets	GB00B7SKS407	High risk
MI Thornbridge Global Opportunities	Global	GB00B5TP8W88	High risk
Ninety One Global Special Situations	Global	GB00B29KP103	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 Global Equity	Global	GB0031682627	High risk
AXA Framlington Health	Healthcare	GB00BRJZVQ71	High risk
BNY Mellon Multi-Asset Balanced	Mixed Investment 40-85% Shares	GB00B8K9JZ06	Medium risk
Fidelity European	Europe Excluding UK	GB00BFRT3504	Medium risk
FSSA Asia Focus	Asia Pacific Excluding Japan	GB00BWNGXJ86	High risk
Margetts BLENHEIM Diversified Fixed Income	Sterling Strategic Bond	GB00BNDQ8X45	Low risk
Schroder Sustainable Bond	Sterling Strategic Bond	GB00B57BFC79	Low risk
Stewart Investors Global Emerging Markets	Specialist	GB0030187438	Medium risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High risk
Stewart Investors Worldwide Leaders Sustainability	Global	GB0030978729	High risk
T. Rowe Price Japanese Equity	Japan	GB00BD446L18	High risk
T. Rowe Price US Large Cap Value Equity	North America	GB00BD446M25	Medium risk
VT Johnston Multi-Asset Cautious	Mixed Investment 20-60% Shares	GB00BM952705	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 19% (16%)
• Alternatives 12% (14%) - includes absolute return strategies
• North American Equities 14% (18%)
• Emerging Market Equities 6% (4%)
• European Equities 12% (9%)
• Japanese Equities 5% (5%)
• UK Equities 15% (11%)
• Cash 8% (9%)
• Asian / Emerging market equities 0% (14%)
• Other international equities 5% (0%)
• Commodities and Energy 4% (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 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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