Commentary
As half of this month's 80-20 Investor Best of the Best Selection retained their place from last month's shortlist the portfolio keeps its reduced equity exposure. Global bonds still account for the largest component of the portfolio and although the portfolio has a low direct exposure to equities the 'alternatives' listed will include exposure to equities but via derivatives etc.
The 80-20 Investor portfolio performed spectacularly in the aftermath of the Brexit vote, gaining over 5% in the two days immediately afterwards while the FTSE 100 fell by over 5%. Also, despite the market sell-off no stop loss alerts were triggered on last month's Best of the Best Selection in the volatile week following the Brexit vote. That highlights the robustness of the 80-20 Investor algorithm at selecting funds.
Equity markets have since regained some poise, with most markets recovering their post-Brexit losses. Unsurprisingly the portfolio has not reduced its equity exposure further. In fact funds with direct European and UK equity exposure have crept back in. The key equity theme within the portfolio remains diversification across asset classes and geography. This explains why a number of managed funds from the Mixed sectors are now featured in the portfolio. There is still a strong emphasis on global assets which served last month's portfolio well as they received a boost from the fall in the value of the pound. Interestingly the UK equity exposure remains very low at around 5% while UK Gilts make an appearance, boosted by bouts of market uncertainty and the prospect of further quantitative easing in the UK. What is also interesting is how some bond funds have moved up risk category as their volatility has increased as a result of the recent market turmoil.
At the foot of this article you can see how the 80-20 Investor Portfolio has continued to outperform the professional fund managers as well as the market.
A total of 15 funds from June's 29 funds make it into July's selection. 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.
Just as last time, I have included the full list sorted alphabetically by name and then by risk category.
July'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)
| Fund Name | Sector | ISIN Code | Risk Level |
| AXA - Framlington Japan | Japan | GB00BRJZVR88 | High risk |
| AXA - Sterling Corporate Bond | Sterling Corporate Bond | GB00B0T9V714 | Low risk |
| AXA - Sterling Strategic Bond | Sterling Strategic Bond | GB00B02Y6M37 | Medium risk |
| Barclays - Sterling Bond | Sterling Strategic Bond | GB00B72Y6K08 | Medium risk |
| BlackRock - Global Property Securities Equity Tracker | Property | GB00B5BFJG71 | High risk |
| CF Canlife - Global Equity Income | Global Equity Income | GB00B5W34S70 | Medium risk |
| CF Canlife - North American | North America | GB00B73N3278 | High risk |
| F&C - Emerging Markets | Global Emerging Markets | GB0005751002 | High risk |
| Fidelity - Asia Pacific Opportunities | Asia Pacific Excluding Japan | GB00BQ1SWL90 | High risk |
| Fidelity - Multi Asset Allocator Defensive | Mixed Investment 0%-35% Shares | GB00B8YQD220 | Low risk |
| First State - Global Listed Infrastructure | Global | GB00B24HJC53 | Medium risk |
| JPM - Emerging Markets Income | Global Emerging Markets | GB00B56DF680 | High risk |
| JPM - Japan | Japan | GB0030879471 | High risk |
| Jupiter - Absolute Return | Targeted Absolute Return | GB00B5129B32 | Medium risk |
| L&G - Mixed Investment 0-35% | Mixed Investment 0%-35% Shares | GB00B8KRCM23 | Low risk |
| L&G - Sterling Corporate Bond Index | Sterling Corporate Bond | GB00B4M01C47 | Low risk |
| Marlborough - European Multi-Cap | Europe Excluding UK | GB0001719730 | Medium risk |
| McInroy & Wood - Balanced | Mixed Investment 40%-85% Shares | GB00B7RRJ163 | Medium risk |
| McInroy & Wood - Income | Mixed Investment 40%-85% Shares | GB00B8KQRW41 | Medium risk |
| Schroder - Global Real Estate Securities Income | Property | GB00B50MLC91 | High risk |
| Schroder - UK Corporate Bond | Sterling Corporate Bond | GB0009379370 | Low risk |
| Thesis - Climate Assets | Mixed Investment 40%-85% Shares | GB00B5NB7L44 | Medium risk |
| Threadneedle - Defensive | Mixed Investment 0%-35% Shares | GB0032010042 | Low risk |
| Threadneedle - Dynamic Real Return | Targeted Absolute Return | GB00BWWC6P48 | Low risk |
| Threadneedle - Emerging Market Bond | Global Emerging Market Bond | GB00B817DW83 | High risk |
| Threadneedle - Global Bond | Global Bonds | GB00B8C2M701 | Medium risk |
| Threadneedle - Sterling Bond | UK Gilts | GB00B7SH5738 | Medium risk |
| UBS - Sterling Corporate Bond Indexed | Sterling Corporate Bond | GB00B9973R25 | Low risk |
| Vanguard - LifeStrategy 20% Equity | Mixed Investment 0%-35% Shares | GB00B4NXY349 | Low risk |
| Vanguard - UK Inflation Linked Gilt Index | UK Index - Linked Gilts | GB00B45Q9038 | High risk |
| Wise Investments - Evenlode Income | UK All Companies | GB00B40Y5R17 | Medium risk |
July's Best of the Best Selection - (grouped by risk)
Here is July's shortlist grouped by their risk category (funds unchanged from last month are in black while new additions are in green):
| Fund Name | Sector | ISIN Code | Risk Level |
| Vanguard - LifeStrategy 20% Equity | Mixed Investment 0%-35% Shares | GB00B4NXY349 | Low risk |
| UBS - Sterling Corporate Bond Indexed | Sterling Corporate Bond | GB00B9973R25 | Low risk |
| L&G - Sterling Corporate Bond Index | Sterling Corporate Bond | GB00B4M01C47 | Low risk |
| Schroder - UK Corporate Bond | Sterling Corporate Bond | GB0009379370 | Low risk |
| AXA - Sterling Corporate Bond | Sterling Corporate Bond | GB00B0T9V714 | Low risk |
| L&G - Mixed Investment 0-35% | Mixed Investment 0%-35% Shares | GB00B8KRCM23 | Low risk |
| Threadneedle - Defensive | Mixed Investment 0%-35% Shares | GB0032010042 | Low risk |
| Fidelity - Multi Asset Allocator Defensive | Mixed Investment 0%-35% Shares | GB00B8YQD220 | Low risk |
| Threadneedle - Dynamic Real Return | Targeted Absolute Return | GB00BWWC6P48 | Low risk |
| McInroy & Wood - Income | Mixed Investment 40%-85% Shares | GB00B8KQRW41 | Medium risk |
| McInroy & Wood - Balanced | Mixed Investment 40%-85% Shares | GB00B7RRJ163 | Medium risk |
| CF Canlife - Global Equity Income | Global Equity Income | GB00B5W34S70 | Medium risk |
| Threadneedle - Sterling Bond | UK Gilts | GB00B7SH5738 | Medium risk |
| Threadneedle - Global Bond | Global Bonds | GB00B8C2M701 | Medium risk |
| Jupiter - Absolute Return | Targeted Absolute Return | GB00B5129B32 | Medium risk |
| Wise Investments - Evenlode Income | UK All Companies | GB00B40Y5R17 | Medium risk |
| Marlborough - European Multi-Cap | Europe Excluding UK | GB0001719730 | Medium risk |
| Thesis - Climate Assets | Mixed Investment 40%-85% Shares | GB00B5NB7L44 | Medium risk |
| Barclays - Sterling Bond | Sterling Strategic Bond | GB00B72Y6K08 | Medium risk |
| AXA - Sterling Strategic Bond | Sterling Strategic Bond | GB00B02Y6M37 | Medium risk |
| First State - Global Listed Infrastructure | Global | GB00B24HJC53 | Medium risk |
| F&C - Emerging Markets | Global Emerging Markets | GB0005751002 | High risk |
| Fidelity - Asia Pacific Opportunities | Asia Pacific Excluding Japan | GB00BQ1SWL90 | High risk |
| JPM - Emerging Markets Income | Global Emerging Markets | GB00B56DF680 | High risk |
| Schroder - Global Real Estate Securities Income | Property | GB00B50MLC91 | High risk |
| Threadneedle - Emerging Market Bond | Global Emerging Market Bond | GB00B817DW83 | High risk |
| JPM - Japan | Japan | GB0030879471 | High risk |
| AXA - Framlington Japan | Japan | GB00BRJZVR88 | High risk |
| CF Canlife - North American | North America | GB00B73N3278 | High risk |
| BlackRock - Global Property Securities Equity Tracker | Property | GB00B5BFJG71 | High risk |
| Vanguard - UK Inflation Linked Gilt Index | UK Index - Linked Gilts | GB00B45Q9038 | 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 Best of the Best list are listed below. Many of them remain in the Best funds by Sector selection:
| Fund Name | Sector | ISIN Code | Risk Level |
| CF - Prudential Dynamic Focused 0-30 Portfolio | Mixed Investment 0%-35% Shares | GB00B5BNX690 | Low risk |
| Fidelity - Global Enhanced Income | Global Equity Income | GB00BD1NLL62 | Medium risk |
| Fidelity - Strategic Bond | Sterling Strategic Bond | GB00B469J896 | Low risk |
| Fundsmith - Equity | Global | GB00B4Q5X527 | High risk |
| Invesco Perpetual - Global Targeted Returns | Targeted Absolute Return | GB00B8CHD613 | Low risk |
| Jupiter - UK Smaller Companies | UK Smaller Companies | GB0004911870 | Medium risk |
| L&G - Emerging Markets Government Bond (US$) Index | Global Emerging Market Bond | GB00B7MJV331 | Medium risk |
| L&G - Managed Monthly Income Trust | Sterling Corporate Bond | GB00B0CNHQ18 | Low risk |
| Man GLG - Continental European Growth | Europe Excluding UK | GB00B0119370 | Medium risk |
| Standard Life Investments - AAA Income | Sterling Corporate Bond | GB00B4LQY248 | Low risk |
| Stewart Investors - Worldwide Sustainability | Global | GB00B845Y045 | High risk |
| Threadneedle - European Corporate Bond | Global Bonds | GB00B7MJ0253 | Medium risk |
| Threadneedle - European High Yield Bond | Global Bonds | GB00B6RRFW23 | Medium risk |
| Threadneedle - UK Social Bond | Sterling Corporate Bond | GB00BF233790 | 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 22% (21%)
- Alternatives/Other 21% (19%)
- UK Corporate Fixed Interest (i.e UK bonds) 11% (12%)
- North American Equities 9% (11%)
- European Equities 7% (11%)
- Japanese Equities 9% (9%)
- Property 7% (7%)
- UK Equities 7% (5%)
- Cash 0% (5%)
- Asian equities 0% (0%)
- UK Gilts 7% (0%)
- Other international equities 0% (0%)
- Emerging markets 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 FTSE 100 (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 60-85% 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 HUGELY outperformed the average managed fund and the market. The large spike in performance in the 80-20 Investor portfolio on the right hand side of the chart is where the portfolio rallied after the Brexit referendum while global markets plummeted.
All performance figures are net of fund charges. The material in any email, the MonetotheMasses.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 and Privacy Policy
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.
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.
