80-20 Investor Best of the Best Selection – July 2019 Update

Commentary

As explained in the latest monthly newsletter, stocks enjoyed one of their strongest June's in decades, particularly in the US. But for the most part, stocks around the world were recouping the losses incurred during May's sell-off, sparked by Trump's trade war tantrum.

The BOTB selection performed well in June, with almost every fund making a profit. The table below shows the performance of the top five funds from June's BOTB.

Fund	Total Return during June (%)
Fidelity Asian Dividend	5.35
Aberdeen European Equity	5.12
M&G Global Listed Infrastructure	4.8
TB Evenlode Global Income	4.78
LF Macquarie Global Infrastructure Securities	3.89

With such a turnaround in fortunes it's perhaps unsurprising that only 11 funds from last month's list of 30 remain the same. Having said that most of those that didn't make it only just missed out and remain in the BFBS tables.

July's BOTB has an increased equity content of around 61%, up from around 40% the previous month. This is the highest equity exposure the BOTB has had since the stock market sell-off last autumn. The BOTB now has a marginally reduced UK equity exposure this month, instead favouring European and US equities. The latter is perhaps unsurprising given the rebound in US stocks back to new all-time highs. There is also an increased exposure to Asian equities while emerging market equities make a return.  July's BOTB also has a smaller exposure to UK Gilts, a reflection of the asset's volatile nature. With markets back at all-time highs, yet still at a critical juncture, it will be interesting to see how the timing of this increased equity exposure plays out. Overall July's BOTB is much more diversified, across a range of assets and geographies.

At the foot of this article you can see how the 80-20 Investor selection has outperformed the professional fund managers as well as the market since its launch almost five years ago.

Below I list this month's selection in full with the 11 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.

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)

Name	Sector	ISIN Code	Risk
Aberdeen Emerging Markets Bond	Global Emerging Markets Bond	GB00B5L9HN22	Low risk
Aberdeen European Equity	Europe Excluding UK	GB00B0LG6P37	High risk
Aberdeen UK Mid Cap Equity	UK All Companies	GB00B0XWNT29	High risk
Aviva Inv Multimanager 20-60% Shares	Mixed Investment 20-60% Shares	GB00B1N94V93	Low risk
AXA Ethical Distribution	Mixed Investment 20-60% Shares	GB0005409262	Low risk
AXA Framlington Global Technology	Technology & Telecommunications	GB0006598998	High risk
BNY Mellon Global Income	Global Equity Income	GB00B0MY6T00	Medium risk
BNY Mellon Real Return	Targeted Absolute Return	GB0001642635	Low risk
Fidelity Asian Dividend	Asia Pacific Excluding Japan	GB00B8W5LX86	Medium risk
Fidelity Global High Yield	Sterling High Yield	GB00B7K7SQ18	Low risk
Fidelity Index Pacific ex Japan	Asia Pacific Excluding Japan	GB00BHZK8G51	High risk
Fundsmith Equity	Global	GB00B4Q5X527	High risk
Janus Henderson Fixed Interest Monthly Income	Sterling Strategic Bond	GB0001920486	Low risk
JPM Emerging Markets	Global Emerging Markets	GB0030881550	High risk
Legg Mason IF Martin Currie Global Equity Income	Global Equity Income	GB00BVZ6V513	Medium risk
Legg Mason IF Martin Currie North American	North America	GB00BVZ6VD94	High risk
LF Blue Whale Growth	Global	GB00BD6PG563	High risk
LF Miton European Opportunities	Europe Excluding UK	GB00BZ2K2M84	High risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
Liontrust Sustainable Future Managed	Mixed Investment 40-85% Shares	GB0030030398	Medium risk
M&G Global Listed Infrastructure	Global	GB00BF00R928	Medium risk
Marlborough US Multi-Cap Income	North America	GB0001722882	High risk
Royal London Sustainable Managed Growth Trust	Mixed Investment 0-35% Shares	GB00B8H7XS88	Low risk
Schroder Global Cities Real Estate Income	Property Other	GB00B50MLC91	Medium risk
Standard Life Investments Emerging Market Debt	Global Emerging Markets Bond	GB00B8K56P77	Medium risk
Standard Life Investments UK Gilt	UK Gilts	GB00B6WZXS38	Low risk
TB Evenlode Global Income	Global Equity Income	GB00BF1QMV61	Medium risk
TB Evenlode Income	UK All Companies	GB00BD0B7D55	Medium risk
Thesis Climate Assets	Mixed Investment 40-85% Shares	GB00B3K3HX15	Medium risk
Threadneedle Emerging Market Bond	Global Emerging Markets Bond	GB0002365608	Low 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):

Name	Sector	ISIN Code	Risk
Aberdeen Emerging Markets Bond	Global Emerging Markets Bond	GB00B5L9HN22	Low risk
Aviva Inv Multimanager 20-60% Shares	Mixed Investment 20-60% Shares	GB00B1N94V93	Low risk
AXA Ethical Distribution	Mixed Investment 20-60% Shares	GB0005409262	Low risk
BNY Mellon Real Return	Targeted Absolute Return	GB0001642635	Low risk
Fidelity Global High Yield	Sterling High Yield	GB00B7K7SQ18	Low risk
Janus Henderson Fixed Interest Monthly Income	Sterling Strategic Bond	GB0001920486	Low risk
Liontrust Sustainable Future Defensive Managed	Mixed Investment 20-60% Shares	GB00BMN90635	Low risk
Royal London Sustainable Managed Growth Trust	Mixed Investment 0-35% Shares	GB00B8H7XS88	Low risk
Standard Life Investments UK Gilt	UK Gilts	GB00B6WZXS38	Low risk
Threadneedle Emerging Market Bond	Global Emerging Markets Bond	GB0002365608	Low risk
BNY Mellon Global Income	Global Equity Income	GB00B0MY6T00	Medium risk
Fidelity Asian Dividend	Asia Pacific Excluding Japan	GB00B8W5LX86	Medium risk
Legg Mason IF Martin Currie Global Equity Income	Global Equity Income	GB00BVZ6V513	Medium risk
Liontrust Sustainable Future Managed	Mixed Investment 40-85% Shares	GB0030030398	Medium risk
M&G Global Listed Infrastructure	Global	GB00BF00R928	Medium risk
Schroder Global Cities Real Estate Income	Property Other	GB00B50MLC91	Medium risk
Standard Life Investments Emerging Market Debt	Global Emerging Markets Bond	GB00B8K56P77	Medium risk
TB Evenlode Global Income	Global Equity Income	GB00BF1QMV61	Medium risk
TB Evenlode Income	UK All Companies	GB00BD0B7D55	Medium risk
Thesis Climate Assets	Mixed Investment 40-85% Shares	GB00B3K3HX15	Medium risk
Aberdeen European Equity	Europe Excluding UK	GB00B0LG6P37	High risk
Aberdeen UK Mid Cap Equity	UK All Companies	GB00B0XWNT29	High risk
AXA Framlington Global Technology	Technology & Telecommunications	GB0006598998	High risk
Fidelity Index Pacific ex Japan	Asia Pacific Excluding Japan	GB00BHZK8G51	High risk
Fundsmith Equity	Global	GB00B4Q5X527	High risk
JPM Emerging Markets	Global Emerging Markets	GB0030881550	High risk
Legg Mason IF Martin Currie North American	North America	GB00BVZ6VD94	High risk
LF Blue Whale Growth	Global	GB00BD6PG563	High risk
LF Miton European Opportunities	Europe Excluding UK	GB00BZ2K2M84	High risk
Marlborough US Multi-Cap Income	North America	GB0001722882	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. Many of them remain in the Best funds by Sector selection:

Name	Sector	ISIN Code	Risk
Aberdeen Property Share	Property Other	GB00B0XWNN66	High risk
Aberdeen Sterling Bond	Global Bonds	GB00BWK27087	Low risk
Aberdeen UK Smaller Companies Equity	UK Smaller Companies	GB00B07T4859	High risk
AXA Sterling Index Linked Bond	UK Index Linked Gilts	GB00B02Y6B22	High risk
BlackRock UK Absolute Alpha	Targeted Absolute Return	GB00B5ZNQ990	Low risk
Fidelity Global Property	Property Other	GB00B7K2NZ09	High risk
First State Global Listed Infrastructure	Global	GB00B24HJL45	High risk
HSBC UK Gilt Index	UK Gilts	GB00B4581C50	Low risk
Jupiter Strategic Bond	Sterling Strategic Bond	GB00B2RBCS16	Low risk
LF Macquarie Global Infrastructure Securities	Global	GB00B1W27X27	Medium risk
Liontrust Sustainable Future Cautious Managed	Mixed Investment 40-85% Shares	GB00BMN90304	Medium risk
McInroy & Wood Balanced	Mixed Investment 40-85% Shares	GB00B7RRJ163	Medium risk
MI Chelverton UK Equity Growth	UK All Companies	GB00BP855B75	High risk
Newton International Bond	Global Bonds	GB0006779655	Medium risk
Royal London UK Government Bond	UK Gilts	GB00B881TW52	Low risk
Slater Growth	UK All Companies	GB00B0706C66	High risk
Standard Life Investments Global Index Linked Bond	Global Bonds	GB00B7C0H946	Low risk
VT Seneca Diversified Growth	Mixed Investment 40-85% Shares	GB00B7FPW579	Medium risk
VT Seneca Diversified Income	Mixed Investment 20-60% Shares	GB00B7JTF560	Medium 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 6% (9%)
• Alternatives 12% (22%) - includes absolute return strategies & some bond exposure
• UK Corporate Fixed Interest (i.e UK bonds) 5% (0%)
• Emerging Market Fixed Income 9% (9%)
• North American Equities 19% (10%)
• European Equities 12% (8%)
• Japanese Equities 0% (0%)
• Property 3% (6%)
• UK Equities 13% (17%)
• Gilts 3% (12%)
• Cash 4% (4%)
• Emerging market equities 4% (0%)
• Other international equities 5% (0%)
• Asian Equities 5% (3%)

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 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.

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