Commentary
Of the 30 funds in June's BOTB, 17 funds have retained their place in July's selection. The chart below shows the performance of the BOTB against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix.
What it highlights is how the markets shift in inflation expectations, following the US Federal Reserve's policy meeting on 15th June, impacted markets. As described in July's monthly newsletter, the reflation trade lagged portfolios focused on growth stocks in the second half of June. Given the BOTB's focus on value/cyclical assets that is why we saw the BOTB lag from the 15th June onwards (as shown above). Of course, this is only a two week period and 80-20 Investor focuses on momentum over a longer time period than that.
Nonetheless, the recent repricing of markets has had an impact on this month's BOTB. While 17 funds remain the same and the overall asset mix is similar, with a slightly increased exposure to US equities, we now see funds with more growth exposure creeping in, and even technology stocks once again. We have also seen the introduction of a property equity fund for the first time in a long time.
In terms of the overall equity exposure of the BOTB, it has risen slightly to 61%, up from 58%.
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 almost seven years ago.
Below I list this month's selection in full with the 17 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 |
| Artemis Global Equity | Global | GB00B2PLJP95 | Medium risk |
| Aviva Inv UK Smaller Companies | UK Smaller Companies | GB0004457312 | Medium risk |
| AXA Framlington Managed Income | Sterling Strategic Bond | GB00B7H1PG56 | Low risk |
| AXA Framlington UK Smaller Companies | UK Smaller Companies | GB00B7MMLM18 | High risk |
| Barclays Multi-Asset Cautious | Mixed Investment 0-35% Shares | GB00BD93Z723 | Low risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| BMO North American Equity | North America | GB0030281405 | Medium risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| Fidelity Emerging Europe Middle East and Africa | Specialist | GB00B87Z7808 | High risk |
| Fidelity Global Property | Property Other | GB00B7K2NZ09 | Medium risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| FP Apollo Multi Asset Balanced | Mixed Investment 20-60% Shares | GB00B3FPF276 | Low risk |
| FP Octopus UK Multi Cap Income | UK Equity Income | GB00BG47Q333 | Medium risk |
| FP Pictet Multi Asset Portfolio | Targeted Absolute Return | GB00BVYTTC41 | Low risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| JPM Natural Resources | Specialist | GB0031835118 | High risk |
| Liontrust India | Specialist | GB00B1L6DV51 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| Marlborough Far East Growth | Asia Pacific Excluding Japan | GB00B0NVCN62 | Medium risk |
| Marlborough Technology | Technology & Telecommunications Retai | GB0032832841 | High risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Low risk |
| Schroder QEP Global Active Value | Global | GB00B76V8G74 | Medium risk |
| Schroder Small Cap Discovery | Specialist | GB00B5ZS9V71 | High risk |
| Schroder UK Dynamic Smaller Companies | UK Smaller Companies | GB0007220360 | High risk |
| Slater Recovery | UK All Companies | GB0031554248 | Medium risk |
| T. Bailey Dynamic | Mixed Investment 20-60% Shares | GB00B1385S07 | Low risk |
| UBS US Equity | North America | GB00B7V68L26 | Medium risk |
| VT De Lisle America | North America | GB00B3QF3G69 | High 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 |
| AXA Framlington Managed Income | Sterling Strategic Bond | GB00B7H1PG56 | Low risk |
| Barclays Multi-Asset Cautious | Mixed Investment 0-35% Shares | GB00BD93Z723 | Low risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| FP Apollo Multi Asset Balanced | Mixed Investment 20-60% Shares | GB00B3FPF276 | Low risk |
| FP Pictet Multi Asset Portfolio | Targeted Absolute Return | GB00BVYTTC41 | Low risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Schroder High Yield Opportunities | Sterling High Yield | GB00B83RDY83 | Low risk |
| T. Bailey Dynamic | Mixed Investment 20-60% Shares | GB00B1385S07 | Low risk |
| Artemis Global Equity | Global | GB00B2PLJP95 | Medium risk |
| Aviva Inv UK Smaller Companies | UK Smaller Companies | GB0004457312 | Medium risk |
| BMO North American Equity | North America | GB0030281405 | Medium risk |
| Fidelity Global Property | Property Other | GB00B7K2NZ09 | Medium risk |
| FP Octopus UK Multi Cap Income | UK Equity Income | GB00BG47Q333 | Medium risk |
| Marlborough Far East Growth | Asia Pacific Excluding Japan | GB00B0NVCN62 | Medium risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Schroder QEP Global Active Value | Global | GB00B76V8G74 | Medium risk |
| Slater Recovery | UK All Companies | GB0031554248 | Medium risk |
| UBS US Equity | North America | GB00B7V68L26 | Medium risk |
| AXA Framlington UK Smaller Companies | UK Smaller Companies | GB00B7MMLM18 | High risk |
| Fidelity Emerging Europe Middle East and Africa | Specialist | GB00B87Z7808 | High risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| JPM Natural Resources | Specialist | GB0031835118 | High risk |
| Liontrust India | Specialist | GB00B1L6DV51 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| Marlborough Technology | Technology & Telecommunications Retai | GB0032832841 | High risk |
| Schroder Small Cap Discovery | Specialist | GB00B5ZS9V71 | High risk |
| Schroder UK Dynamic Smaller Companies | UK Smaller Companies | GB0007220360 | High risk |
| VT De Lisle America | North America | GB00B3QF3G69 | 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 |
| Barings Global Agriculture | Specialist | GB00B3B9V927 | High risk |
| BNY Mellon Real Return | Targeted Absolute Return | GB00B7VVXF60 | Low risk |
| FP Apollo Multi Asset Cautious | Mixed Investment 20-60% Shares | GB00B3FPDY55 | Low risk |
| Lazard Emerging Markets | Global Emerging Markets | GB00B24F1G74 | High risk |
| MI Chelverton UK Equity Growth | UK All Companies | GB00BP855B75 | Medium risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | Medium risk |
| Premier Miton Diversified Growth | Mixed Investment 40-85% Shares | GB00B8BJV423 | Medium risk |
| Premier Miton UK Smaller Companies | UK Smaller Companies | GB00B818N094 | High risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | Medium risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Schroder Strategic Bond | Sterling Strategic Bond | GB00B7FPS593 | Low risk |
| Schroder UK Smaller Companies | UK Smaller Companies | GB00B76V7Z98 | High risk |
| Wise Funds Limited TB Wise Multi-Asset Growth | Flexible Investment | GB0034272533 | 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 8% (8%)
- Alternatives 21% (21%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 13% (9%)
- European Equities 4% (4%)
- Chinese Equities 0% (0%)
- Japanese Equities 0% (0%)
- Property 4% (0%)
- UK Equities 22% (25%)
- Gilts 0% (0%)
- Cash 4% (5%)
- Asian / Emerging market equities 10% (7%)
- Other international equities 8% (13%)
- Commodities and Energy 6% (8%)
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.
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