80-20 Investor Best of the Best Selection – June 2016 Update

Commentary

As two-thirds of this month's 80-20 Investor Best of the Best Selection retained their place from last month's shortlist the portfolio keeps its reduced equity exposure. Global bonds still account for the largest component of the portfolio and although the portfolio has a low direct exposure to equities the 'alternatives' listed will include exposure to equities but via derivatives etc.

The breakdown of the portfolio's equity exposure has changed from last month with European equities creeping back in at the expense of Asian equities. The key equity theme within the portfolio remains diversification with European, US and Japanese equities seeing a broadly equal weighting. Interestingly the UK equity exposure remains very low at around 5%. This is perhaps reflective of the market nervousness surrounding the impending EU referendum.

At the foot of this article you can see how the 80-20 Investor Portfolio has continued to outperform the professional fund managers as well as the market.

A total of 20 funds from May's 30 funds make it into June's selection. This is one of the largest retentions for some time. Below I list this month's selection in full with the 20 funds that regained their place in black while the new additions are in green. You will notice some familiar names among the new additions.

Just as last time, I have included the full list sorted alphabetically by name and then by risk category.

June'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)

Fund Name	Sector	ISIN Code	Risk Level
AXA - Framlington Japan	Japan	GB0003500179	High risk
AXA - Sterling Strategic Bond	Sterling Strategic Bond	GB00B0LLCW73	Low risk
Barclays - Sterling Bond	Sterling Strategic Bond	GB00B72Y6K08	Low risk
BlackRock - Global Property Securities Equity Tracker	Property	GB00B5BFJG71	High risk
CF - Prudential Dynamic Focused 0-30 Portfolio	Mixed Investment 0%-35% Shares	GB00B5BNX690	Low risk
CF Canlife - North American	North America	GB00B73N3278	High risk
Fidelity - Asia Pacific Opportunities	Asia Pacific Excluding Japan	GB00BQ1SWL90	High risk
Fidelity - Global Enhanced Income	Global Equity Income	GB00BD1NLL62	Medium risk
Fidelity - Strategic Bond	Sterling Strategic Bond	GB00B469J896	Low risk
First State - Global Listed Infrastructure	Global	GB00B24HJC53	High risk
Fundsmith - Equity	Global	GB00B4Q5X527	High risk
Invesco Perpetual - Global Targeted Returns	Targeted Absolute Return	GB00B8CHD613	Low risk
JPM - Japan	Japan	GB0030879471	High risk
Jupiter - Absolute Return	Targeted Absolute Return	GB00B5129B32	Medium risk
Jupiter - UK Smaller Companies	UK Smaller Companies	GB0004911870	Medium risk
L&G - Emerging Markets Government Bond (US$) Index	Global Emerging Market Bond	GB00B7MJV331	Medium risk
L&G - Managed Monthly Income Trust	Sterling Corporate Bond	GB00B0CNHQ18	Low risk
L&G - Sterling Corporate Bond Index	Sterling Corporate Bond	GB00B4M01C47	Low risk
Man GLG - Continental European Growth	Europe Excluding UK	GB00B0119370	Medium risk
Marlborough - European Multi-Cap	Europe Excluding UK	GB0001719730	High risk
McInroy & Wood - Balanced	Mixed Investment 40%-85% Shares	GB00B7RRJ163	Medium risk
Schroder - Global Real Estate Securities Income	Property	GB00BDD2DJ32	High risk
Standard Life Investments - AAA Income	Sterling Corporate Bond	GB00B4LQY248	Low risk
Stewart Investors - Worldwide Sustainability	Global	GB00B845Y045	High risk
Threadneedle - Emerging Market Bond	Global Emerging Market Bond	GB00B817DW83	Medium risk
Threadneedle - European Corporate Bond	Global Bonds	GB00B7MJ0253	Medium risk
Threadneedle - European High Yield Bond	Global Bonds	GB00B6RRFW23	Medium risk
Threadneedle - UK Social Bond	Sterling Corporate Bond	GB00BF233790	Low risk
Vanguard - LifeStrategy 20% Equity	Mixed Investment 0%-35% Shares	GB00B4NXY349	Low risk

 

June's Best of the Best Selection - (grouped by risk)

Here is June's shortlist grouped by their risk category (funds unchanged from last month are in black while new additions are in green):

Fund Name	Sector	ISIN Code	Risk Level
Barclays - Sterling Bond	Sterling Strategic Bond	GB00B72Y6K08	Low risk
AXA - Sterling Strategic Bond	Sterling Strategic Bond	GB00B0LLCW73	Low risk
Invesco Perpetual - Global Targeted Returns	Targeted Absolute Return	GB00B8CHD613	Low risk
Threadneedle - UK Social Bond	Sterling Corporate Bond	GB00BF233790	Low risk
CF - Prudential Dynamic Focused 0-30 Portfolio	Mixed Investment 0%-35% Shares	GB00B5BNX690	Low risk
Standard Life Investments - AAA Income	Sterling Corporate Bond	GB00B4LQY248	Low risk
L&G - Sterling Corporate Bond Index	Sterling Corporate Bond	GB00B4M01C47	Low risk
Vanguard - LifeStrategy 20% Equity	Mixed Investment 0%-35% Shares	GB00B4NXY349	Low risk
L&G - Managed Monthly Income Trust	Sterling Corporate Bond	GB00B0CNHQ18	Low risk
Fidelity - Strategic Bond	Sterling Strategic Bond	GB00B469J896	Low risk
Threadneedle - European Corporate Bond	Global Bonds	GB00B7MJ0253	Medium risk
Threadneedle - European High Yield Bond	Global Bonds	GB00B6RRFW23	Medium risk
McInroy & Wood - Balanced	Mixed Investment 40%-85% Shares	GB00B7RRJ163	Medium risk
L&G - Emerging Markets Government Bond (US$) Index	Global Emerging Market Bond	GB00B7MJV331	Medium risk
Fidelity - Global Enhanced Income	Global Equity Income	GB00BD1NLL62	Medium risk
Jupiter - UK Smaller Companies	UK Smaller Companies	GB0004911870	Medium risk
Threadneedle - Emerging Market Bond	Global Emerging Market Bond	GB00B817DW83	Medium risk
Man GLG - Continental European Growth	Europe Excluding UK	GB00B0119370	Medium risk
Jupiter - Absolute Return	Targeted Absolute Return	GB00B5129B32	Medium risk
Fidelity - Asia Pacific Opportunities	Asia Pacific Excluding Japan	GB00BQ1SWL90	High risk
AXA - Framlington Japan	Japan	GB0003500179	High risk
CF Canlife - North American	North America	GB00B73N3278	High risk
First State - Global Listed Infrastructure	Global	GB00B24HJC53	High risk
Schroder - Global Real Estate Securities Income	Property	GB00BDD2DJ32	High risk
Marlborough - European Multi-Cap	Europe Excluding UK	GB0001719730	High risk
Fundsmith - Equity	Global	GB00B4Q5X527	High risk
Stewart Investors - Worldwide Sustainability	Global	GB00B845Y045	High risk
JPM - Japan	Japan	GB0030879471	High risk
BlackRock - Global Property Securities Equity Tracker	Property	GB00B5BFJG71	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 Best of the Best list are listed below. Many of them remain in the Best funds by Sector selection:

 

Fund Name	Sector	ISIN Code	Risk Level
Aberdeen - European High Yield Bond	Sterling High Yield	GB00B5968F40	Low risk
Baillie Gifford - Emerging Markets Bond	Global Emerging Market Bond	GB00B39RMP13	Medium risk
BlackRock - NURS II Consensus 35	Mixed Investment 0%-35% Shares	GB00B7W6H253	Medium risk
Fidelity - Index Pacific ex Japan	Asia Pacific Excluding Japan	GB00BLT1YS69	High risk
Henderson Inst - Overseas Bond	Global Bonds	GB0007673055	Medium risk
L&G - All Stocks Gilt Index Trust	UK Gilts	GB00B8344798	Low risk
Legg Mason - IF Japan Equity	Japan	GB0033507467	High risk
MI - Chelverton UK Equity Growth	UK All Companies	GB00BP855B75	Medium risk
Threadneedle - Global Bond	Global Bonds	GB00B8C2M701	Medium risk
VT - De Lisle America	North America	GB00B3QF3G69	High 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  21% (25%)
• Alternatives/Other 19% (18%)
• UK Corporate Fixed Interest (i.e UK bonds) 12% (12%)
• North American Equities 11%  (12%)
• European Equities 11% (0%)
• Japanese Equities 9% (10%)
• Property 7% (4%)
• UK Equities 5% (5%)
• Cash 5%  (4%)
• Asian equities 0% (6%)
• UK Gilts 0% (4%)
• Other international equities 0% (0%)
• Emerging markets 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 the FTSE 100 (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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