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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