80-20 Investor Best of the Best Selection – July 2022 Update

Commentary

Of the 30 funds in June's BOTB, 19 funds have retained their place in July's selection. This follows on from the previous month when 21 funds retained their place. The chart below shows the average performance of the BOTB during June (the green line) against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix (the blue line). You can see that the BOTB outperformed its benchmark once again, albeit marginally.

The chart also shows how the selection underperformed the average professionally managed fund from the Mixed Investment 40-85% Shares sector, which is typically more adventurous than the BOTB given its higher equity exposure. The BOTB's performance was dragged down by its commodity exposure as explained later.

The table below shows the top five performers from June's BOTB and it's good to see that Thesis TM Tellworth UK Select and Premier Miton Defensive Growth, which feature in my own £50k portfolio, make an appearance. But as you can see, only two funds made money during June, in a month that saw global stock markets fall by -7.5% on average (as measured by the MSCI AC World Index.) June was a month where defensive holdings and bond funds fared best (in the case of the Thesis fund it takes some short equity positions i .e benefits when equity markets fall)

Fund	June % return
T. Rowe Price Dynamic Global Bond	1.81
Thesis TM Tellworth UK Select	0.97
Premier Miton Defensive Growth	-0.31
Man GLG Japan Core Alpha	-1.1
Schroder MM Diversity	-2.79

 

At the other end of the scale, the worst-performing funds are shown in the table below, and they include funds with exposure to commodities. The worst performer BlackRock Natural Resources Growth & Income, I hold in my £50k portfolio. Commodities were hammered during June as recession fears gripped markets, however to give this some context the BlackRock Natural Resources Growth & Income is still up 15.61% year to date. While TB Guinness Global Energy is still up over 30% year to date. Time will tell if we've reached a turning point with commodities.

Fund	June % return
Barings Global Agriculture	-11.37
TB Guinness Global Energy	-12.39
ASI Latin American Equity	-12.95
JPM Natural Resources	-13.31
BlackRock Natural Resources Growth & Income	-13.43

 

This month's selection sees the BOTB's equity exposure remain around 61% but with some marked changes in the asset mix. The asset mix is now much more diverse with new exposure to Chinese equities, Asian equities as well as gilts. The exposure to UK equities has fallen slightly as has the exposure to European equities. Property exposure remains absent but the selection has an increased bond exposure. Overall the selection's asset mix is the most diverse it has been for some time.

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 seven years ago.

Below I list this month's selection in full with the 19 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 Strategic Assets	Flexible Investment	GB00B3VDD431	High risk
Artemis US Absolute Return	Targeted Absolute Return	GB00BMMV5N27	Low risk
ASI Latin American Equity	Latin America	GB00B41QSW23	High risk
ASI UK High Income Equity	UK Equity Income	GB00B7FTRJ84	Medium risk
ASI World Income Equity	Global Equity Income	GB00B3N9CY25	Medium risk
AXA Framlington Health	Healthcare	GB00BRJZVQ71	High risk
Barings Global Agriculture	Commodity/Natural Resources	GB00B3B9V927	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
Fidelity American Special Situations	North America	GB00B89ST706	Medium risk
Fidelity China Consumer	China/Greater China	GB00B82ZSC67	High risk
First Sentier Global Listed Infrastructure	Infrastructure	GB00B24HJL45	High risk
FP Carmignac Unconstrained Global Bond	Sterling Strategic Bond	GB00BJHPJ035	Low risk
Invesco Asian Equity Income (UK)	Asia Pacific Excluding Japan	GB00B4JR4R48	Medium risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
Janus Henderson Inst Overseas Bond	Global Bonds	GB0007673055	Low risk
JOHCM Global Opportunities	Global	GB00BJ5JMC04	Medium risk
JPM Natural Resources	Commodity/Natural Resources	GB0031835118	High risk
Jupiter Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
LF Lightman European	Europe Excluding UK	GB00BGPFJN79	High risk
LF Macquarie Global Infrastructure Securities	Infrastructure	GB00B1W24C09	Medium risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium risk
Premier Miton Defensive Growth	Targeted Absolute Return	GB00B832BD89	Low risk
Royal London Short Duration Gilts	UK Gilts	GB00BD050C73	Low risk
Schroder MM Diversity	Mixed Investment 20-60% Shares	GB00B60CZD52	Low risk
Schroder UK Dynamic Absolute Return	Targeted Absolute Return	GB00B3N74T57	Low risk
T. Rowe Price Dynamic Global Bond	Targeted Absolute Return	GB00BD0NLR34	Low risk
TB Guinness Global Energy	Commodity/Natural Resources	GB00B56FW078	High risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
Vanguard FTSE UK Equity Income Index	UK Equity Income	GB00B59G4H82	Medium risk
VT Gravis Clean Energy Income	Infrastructure	GB00BFN4H792	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):

Name	Sector	ISIN Code	Risk
Artemis US Absolute Return	Targeted Absolute Return	GB00BMMV5N27	Low risk
FP Carmignac Unconstrained Global Bond	Sterling Strategic Bond	GB00BJHPJ035	Low risk
Janus Henderson Inst Overseas Bond	Global Bonds	GB0007673055	Low risk
Jupiter Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
Premier Miton Defensive Growth	Targeted Absolute Return	GB00B832BD89	Low risk
Royal London Short Duration Gilts	UK Gilts	GB00BD050C73	Low risk
Schroder MM Diversity	Mixed Investment 20-60% Shares	GB00B60CZD52	Low risk
Schroder UK Dynamic Absolute Return	Targeted Absolute Return	GB00B3N74T57	Low risk
T. Rowe Price Dynamic Global Bond	Targeted Absolute Return	GB00BD0NLR34	Low risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
ASI UK High Income Equity	UK Equity Income	GB00B7FTRJ84	Medium risk
ASI World Income Equity	Global Equity Income	GB00B3N9CY25	Medium risk
Fidelity American Special Situations	North America	GB00B89ST706	Medium risk
Invesco Asian Equity Income (UK)	Asia Pacific Excluding Japan	GB00B4JR4R48	Medium risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
JOHCM Global Opportunities	Global	GB00BJ5JMC04	Medium risk
LF Macquarie Global Infrastructure Securities	Infrastructure	GB00B1W24C09	Medium risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium risk
Vanguard FTSE UK Equity Income Index	UK Equity Income	GB00B59G4H82	Medium risk
VT Gravis Clean Energy Income	Infrastructure	GB00BFN4H792	Medium risk
Artemis Strategic Assets	Flexible Investment	GB00B3VDD431	High risk
ASI Latin American Equity	Latin America	GB00B41QSW23	High risk
AXA Framlington Health	Healthcare	GB00BRJZVQ71	High risk
Barings Global Agriculture	Commodity/Natural Resources	GB00B3B9V927	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
Fidelity China Consumer	China/Greater China	GB00B82ZSC67	High risk
First Sentier Global Listed Infrastructure	Infrastructure	GB00B24HJL45	High risk
JPM Natural Resources	Commodity/Natural Resources	GB0031835118	High risk
LF Lightman European	Europe Excluding UK	GB00BGPFJN79	High risk
TB Guinness Global Energy	Commodity/Natural Resources	GB00B56FW078	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
BM SVS Brooks Macdonald Defensive Capital	Targeted Absolute Return	GB00B61MR835	Low risk
Close Diversified Income Portfolio	Mixed Investment 20-60% Shares	GB00B708TJ43	Low risk
Courtiers Total Return Cautious Risk	Mixed Investment 20-60% Shares	GB00B1P2K418	Low risk
Fidelity Moneybuilder Balanced	Mixed Investment 40-85% Shares	GB00B7XJFX07	Low risk
M&G Global Listed Infrastructure	Infrastructure	GB00BF00R928	Medium risk
MI Thornbridge Global Opportunities	Global	GB00B5TP8W88	High risk
Royal London GMAP Balanced	Mixed Investment 20-60% Shares	GB00BD8RSQ51	Low risk
Royal London UK Income With Growth Trust	Mixed Investment 40-85% Shares	GB0001598050	Low risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	High risk
Schroder Global Equity Income	Global Equity Income	GB00B76V7M69	Medium risk
Schroder Income	UK Equity Income	GB00B3PM1190	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 7% (8%)
• Alternatives 17% (20%) - includes absolute return strategies & some bond exposure
• UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
• Emerging Market Fixed Income 3% (0%)
• North American Equities 14% (13%)
• European Equities 8% (11%)
• Chinese Equities 3% (0%)
• Japanese Equities 4% (4%)
• Property 0% (0%)
• UK Equities 17% (20%)
• Gilts 3% (0%)
• Cash 7% (5%)
• Asian / Emerging market equities 3% (0%)
• Other international equities 0% (5%)
• Commodities and Energy 14% (14%)

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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