Commentary
Of the 30 funds in December's BOTB, 19 funds have retained their place in January's selection which is not surprising given that the BOTB as a whole was up over 4% during the month. It means that the BOTB has risen by almost 8% in the last two months. The chart below illustrates that the BOTB (the blue line) performed broadly in line with the average professionally managed fund from the Mixed Investment 40-85% Shares sector (grey line). The green line represents the BOTB's benchmark that uses the respective sector averages for each fund in the BOTB, assuming the same asset mix.
Obviously, the chart above only looks at the average across all of the funds within the BOTB but there is a wide range of performances among the funds that make up the selection. The top-performing funds in December'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. Liontrust Global Technology followed its 15.57% return in November with a return of 8.1% in December. It is also good to see Liontrust India, which is in my own £50k portfolio, performing well.
| Fund | December 2023 % return |
| Liontrust Global Technology | 8.1 |
| CT Latin America | 7.97 |
| AXA Framlington Global Technology | 6.14 |
| Liontrust India | 5.96 |
| Man GLG Sterling Corporate Bond | 5.72 |
At the other end of the scale are a number of bond funds, as well as a Japanese equity fund, propping up the performance table. Ordinarily a 2-3% return in just one month for a bond fund would be an incredible return. It just goes to show how strong the performance was within the BOTB for bond funds like Schroder Strategic Credit to be at the foot of the BOTB performance table despite making 2.37% during the month of December. Thesis TM Tellworth UK Select (which is in my portfolio) props up the BOTB's performance chart and was the only fund to not make money in December. But as you can see, December was a great month for investors regardless.
| Fund | December 2023 % return |
| Jupiter Monthly Income Bond | 2.76 |
| Schroder Strategic Credit | 2.37 |
| Man GLG Japan Core Alpha | 1.8 |
| Artemis SmartGARP European Equity | 1.66 |
| Thesis TM Tellworth UK Select | -0.6 |
In terms of asset mix, not much has changed this month given that almost two thirds of the funds remain the same. As can be seen from the asset mix comparison (see later in this article) that the main difference is an increase in UK equity exposure, which is largely a result of the stronger pound. Apart from that the only real difference is the introduction of property equity exposure, which has benefited from the fall in interest rate expectations in recent months. Overall the total equity exposure has increased marginally from 60% to 62%. You can see the full asset mix breakdown later in this article.
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.
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 High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| abrdn UK Real Estate Share | Property Other | GB00B0XWNM59 | Higher risk |
| Artemis Global Income | Global Equity Income | GB00B5N99561 | Medium risk |
| Artemis US Select | North America | GB00BMMV5105 | Medium risk |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Lower risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| CT Emerging Market Bond | Global EM Bonds - Hard Currency | GB0002365608 | Lower risk |
| CT High Yield Bond | Sterling High Yield | GB0008371014 | 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 |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| Invesco Emerging Markets ex China (UK) | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Invesco Global Equity Income (UK) | Global Equity Income | GB00B3FD1Z66 | Medium risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Lower risk |
| Jupiter Merian Global Equity | Global | GB00B1XG8F22 | Medium risk |
| L&G Multi-Asset Target Return | Targeted Absolute Return | GB00BD97XY71 | Lower risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | Higher risk |
| M&G Strategic Corporate Bond | Sterling Corporate Bond | GB00B4MQK815 | Lower risk |
| Man GLG Sterling Corporate Bond | Sterling Corporate Bond | GB00BNLYQX62 | Lower risk |
| Man GLG Undervalued Assets | UK All Companies | GB00BFH3NC99 | Higher risk |
| Schroder Income Maximiser | UK Equity Income | GB00B5B0KM51 | Medium risk |
| Schroder Sterling Corporate Bond | Sterling Corporate Bond | GB0009379370 | Lower 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 |
| UBS US Growth | North America | GB00B7VHZX64 | Medium risk |
| WS Ardtur Continental European | Europe Excluding UK | GB0031831570 | Higher risk |
| WS Morant Wright Nippon Yield | Japan | GB00B42MKS95 | 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 | Lower 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 High Yield Bond | Sterling High Yield | GB0008371014 | Lower risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Lower risk |
| L&G Multi-Asset Target Return | Targeted Absolute Return | GB00BD97XY71 | Lower risk |
| M&G Strategic Corporate Bond | Sterling Corporate Bond | GB00B4MQK815 | Lower risk |
| Man GLG Sterling Corporate Bond | Sterling Corporate Bond | GB00BNLYQX62 | 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 American Special Situations | North America | GB00B89ST706 | Medium risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| Invesco Global Equity Income (UK) | Global Equity Income | GB00B3FD1Z66 | Medium risk |
| Jupiter Merian Global Equity | Global | GB00B1XG8F22 | Medium risk |
| Schroder Income Maximiser | UK Equity Income | GB00B5B0KM51 | Medium risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Medium risk |
| UBS US Growth | North America | GB00B7VHZX64 | Medium risk |
| WS Morant Wright Nippon Yield | Japan | GB00B42MKS95 | Medium risk |
| abrdn UK Real Estate Share | Property Other | GB00B0XWNM59 | Higher risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| CT Latin America | Latin America | GB0001531754 | Higher risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | Higher risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| Invesco Emerging Markets ex China (UK) | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | Higher risk |
| Man GLG Undervalued Assets | UK All Companies | GB00BFH3NC99 | Higher risk |
| WS Ardtur Continental European | Europe Excluding UK | GB0031831570 | 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 |
| Artemis SmartGARP European Equity | Europe Excluding UK | GB00B2PLJD73 | Higher risk |
| Barclays Wealth Wealth Global Markets 4 | Mixed Investment 40-85% Shares | GB00B4ZFH287 | Medium risk |
| EdenTree Responsible and Sustainable European Equity | Europe Excluding UK | GB0008448333 | Higher risk |
| IFSL Marlborough High Yield Fixed Interest | Sterling High Yield | GB00B03TN153 | Lower risk |
| Invesco Global Equity (UK) | Global | GB00B3RS9Q62 | Medium risk |
| Jupiter India | India/Indian Subcontinent | GB00B2NHJ040 | Higher risk |
| Jupiter Monthly Income Bond | Sterling Strategic Bond | GB00B1XG8187 | Lower risk |
| L&G US Index Trust | North America | GB00B0CNGT73 | Medium risk |
| Man GLG Japan Core Alpha | Japan | GB00B0119B50 | Medium risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Lower risk |
| Schroder Strategic Credit | Sterling Strategic Bond | GB00BJZ2ZC09 | Lower 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% (24%)
- UK Fixed Interest 0% (0%)
- Alternatives 16% (14%) - includes absolute return strategies
- North American Equities 27% (27%)
- American Emerging Market Equities 6% (3%)
- Asian Emerging Market Equities 4% (8%)
- European Equities 5% (6%)
- Japanese Equities 4% (7%)
- UK Equities 10% (4%)
- Cash 4% (2%)
- China Equities 0% (0%)
- Property Equities 3% (0%)
- Other international equities 3% (5%)
- 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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