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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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.
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