80-20 Investor Best of the Best Selection – July 2020 Update

Commentary

July's BOTB looks almost the same as June's with 26 funds the same. This is one of the most consistent transitions between consecutive months on the BOTB. It again demonstrates the resilience and performance of the funds that made the BOTB last month.

The average return from the BOTB was 3.17% which again is impressive when you consider that the portfolio only had a 42% exposure to equities. Comparable professionally managed funds on average returned between 1.35% and 1.73% as shown in the chart below. Comparing against the Mixed Investment 40-85% Shares sector average is not a fair comparison for the BOTB given that most funds within the aforementioned sector have up to 85% exposure to equities. But it demonstrates that in a month when equity markets continued to rally, and you would therefore have expected the sector average for the Mixed Investment 40-85% Shares sector to outperform, the BOTB produced a better return. It was the BOTB's exposure to US stocks (and US tech stocks in particular) that helped drive its strong performance.

BOTB regulars such as Baillie Gifford Positive Return produced some staggering returns and are among the month's notable BOTB winners as shown in the table below.

Fund	June return %
Baillie Gifford China	13.48
Baillie Gifford Long Term Global Growth Investment	13.03
Morgan Stanley US Advantage	9.55
T. Rowe Price Global Technology Equity	8.93
Baillie Gifford Positive Change	7.24

Unsurprisingly the BOTB asset mix has remained almost the same as last month, but its equity exposure has now increased further to 48%. Most of this exposure is still via US equities and bonds but there is now more exposure to Asian equities. UK equities continue to remain almost absent which is a reflection of the fact that the UK stock market continues to lag its peers.

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 over five years ago.

Below I list this month's selection in full with the 26 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
Allianz Gilt Yield	UK Gilts	GB0031383283	Medium risk
Allianz Strategic Bond	Sterling Strategic Bond	GB00B06T9362	Low risk
Allianz Total Return Asian Equity	Asia Pacific Excluding Japan	GB00B1FRQV53	Medium risk
ASI (AAM) Sterling Government Bond	UK Gilts	GB00BWK26Q79	Low risk
ASI AAA Bond	Sterling Corporate Bond	GB00B3W48X95	Low risk
ASI UK Government Bond	UK Gilts	GB00B6WZXS38	Medium risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
AXA Framlington Global Technology	Technology & Telecommunications	GB00B4W52V57	High risk
AXA Sterling Strategic Bond	Sterling Strategic Bond	GB00B02Y6L20	Low risk
Baillie Gifford China	China/Greater China	GB00B39RMM81	High risk
Baillie Gifford European	Europe Excluding UK	GB0006058258	High risk
Baillie Gifford Long Term Global Growth Investment	Global	GB00BD5Z0Z54	High risk
Baillie Gifford Positive Change	Global	GB00BYVGKV59	High risk
BlackRock European Absolute Alpha	Targeted Absolute Return	GB00B4Y62W78	Low risk
BNY Mellon International Bond	Global Bonds	GB0006779655	Medium risk
JPM Global Macro	Targeted Absolute Return	GB00B09RGL45	Low risk
JPM Japan	Japan	GB00B1XMTP77	Medium risk
LF Canlife Global Macro Bond	Global Bonds	GB00B4LW2X97	Low risk
LF Miton UK Smaller Companies	UK Smaller Companies	GB00B818N094	High risk
Liontrust Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Liontrust Sustainable Future Managed Growth	Flexible Investment	GB0030029622	Medium risk
Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
Morgan Stanley US Advantage	North America	GB00BZ4CG750	High risk
Rathbone Global Opportunities Fund	Global	GB0030349095	Medium risk
Royal London UK Government Bond	UK Gilts	GB00B881TW52	Medium risk
T. Rowe Price Dynamic Global Bond	Global Bonds	GB00BD0NLR34	Low risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	High risk
Threadneedle Global Bond	Global Bonds	GB0001533685	Medium risk
Troy Asset Management Ltd Trojan Ethical	Flexible Investment	GB00BJP0XX17	Medium risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	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
Allianz Strategic Bond	Sterling Strategic Bond	GB00B06T9362	Low risk
ASI (AAM) Sterling Government Bond	UK Gilts	GB00BWK26Q79	Low risk
ASI AAA Bond	Sterling Corporate Bond	GB00B3W48X95	Low risk
AXA Sterling Strategic Bond	Sterling Strategic Bond	GB00B02Y6L20	Low risk
BlackRock European Absolute Alpha	Targeted Absolute Return	GB00B4Y62W78	Low risk
JPM Global Macro	Targeted Absolute Return	GB00B09RGL45	Low risk
LF Canlife Global Macro Bond	Global Bonds	GB00B4LW2X97	Low risk
Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
T. Rowe Price Dynamic Global Bond	Global Bonds	GB00BD0NLR34	Low risk
Vanguard LifeStrategy 20% Equity	Mixed Investment 0-35% Shares	GB00B4NXY349	Low risk
Allianz Gilt Yield	UK Gilts	GB0031383283	Medium risk
Allianz Total Return Asian Equity	Asia Pacific Excluding Japan	GB00B1FRQV53	Medium risk
ASI UK Government Bond	UK Gilts	GB00B6WZXS38	Medium risk
BNY Mellon International Bond	Global Bonds	GB0006779655	Medium risk
JPM Japan	Japan	GB00B1XMTP77	Medium risk
Liontrust Sustainable Future Managed Growth	Flexible Investment	GB0030029622	Medium risk
Rathbone Global Opportunities Fund	Global	GB0030349095	Medium risk
Royal London UK Government Bond	UK Gilts	GB00B881TW52	Medium risk
Threadneedle Global Bond	Global Bonds	GB0001533685	Medium risk
Troy Asset Management Ltd Trojan Ethical	Flexible Investment	GB00BJP0XX17	Medium risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
AXA Framlington Global Technology	Technology & Telecommunications	GB00B4W52V57	High risk
Baillie Gifford China	China/Greater China	GB00B39RMM81	High risk
Baillie Gifford European	Europe Excluding UK	GB0006058258	High risk
Baillie Gifford Long Term Global Growth Investment	Global	GB00BD5Z0Z54	High risk
Baillie Gifford Positive Change	Global	GB00BYVGKV59	High risk
LF Miton UK Smaller Companies	UK Smaller Companies	GB00B818N094	High risk
Liontrust Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Morgan Stanley US Advantage	North America	GB00BZ4CG750	High risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	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
Kames UK Equity Absolute Return	Targeted Absolute Return	GB00B504CH73	Low risk
LF Canlife UK Government Bond	UK Gilts	GB00BLDYKJ43	Medium risk
Royal London Global Index Linked	Global Bonds	GB00B772RM82	Low risk
Schroder Global Healthcare	Global	GB00B76V7Q08	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 30% (31%)
• Alternatives 6% (8%) - includes absolute return strategies & some bond exposure
• UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
• Emerging Market Fixed Income 0% (2%)
• North American Equities 22% (21%)
• European Equities 7% (8%)
• Japanese Equities 4% (4%)
• Property 0% (0%)
• UK Equities 4% (3%)
• Gilts 12% (16%)
• Cash 4% (3%)
• Emerging market equities 0% (0%)
• Other international equities 4% (0%)
• Asian Equities 7% (4%)
• 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 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 portfolio has outperformed the average managed fund and the market.

All performance figures are net of fund charges. The material in any email, the MoneytotheMasses.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, Privacy Policy and Disclaimer.

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. Tax rules can change and benefits depend on individual circumstances.
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.