Commentary
This month's BOTB once again builds upon the previous month's success. Of the 30 funds in May's BOTB, 18 funds have retained their place in June's selection. It means that there has once again been a level of consistency in the selection over the last two months, following the overhaul in April. The chart below shows the performance of the BOTB as a whole during the month of May against typical professionally managed funds.
It's good to see the selection go from strength to strength and, as shown in the chart at the foot of this article, the BOTB selection's average return hit an all-time high this month. The table below shows the performance of the 5 top-performing funds within the BOTB during May, all of which have retained their place in June's shortlist. It's pleasing to see that two of them are in my own £50k portfolio, which itself hit a new all-time high this month.
| Name | % return in May |
| Fidelity UK Smaller Companies | 5.66 |
| Schroder UK Smaller Companies | 3.13 |
| Marlborough European Multi-Cap | 3.02 |
| Aviva Inv UK Smaller Companies | 2.88 |
| VT De Lisle America | 2.45 |
Given the performance of May's BOTB, it is unsurprising that the asset mix of the new BOTB remains largely the same as last month's. UK equities remain the largest component of the BOTB, especially smaller companies stocks. The notable differences include a reduced exposure to US equities in favour of UK equities and commodities, which have been beneficiaries of the reflation trade. In addition, there is no longer any direct exposure to Asian equities via funds from the Asia Pacific Excluding Japan sector, instead any Asian equity exposure is now via global equity funds. There is a further reduction in the selection's exposure to bonds, once again in favour of absolute return funds and multi-asset funds. In terms of the overall equity exposure of the BOTB, it has now dropped slightly from 61% down to 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 18 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.
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)
| Name | Sector | ISIN Code | Risk |
| Artemis Global Growth | Global | GB00B2PLJP95 | Medium risk |
| Aviva Inv UK Smaller Companies | UK Smaller Companies | GB0004457312 | High risk |
| AXA Framlington Managed Income | Sterling Strategic Bond | GB00B7H1PG56 | Low risk |
| Barings Global Agriculture | Specialist | GB00B3B9V927 | High risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| BNY Mellon Real Return | Targeted Absolute Return | GB00B7VVXF60 | Low 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 Apollo Multi Asset Cautious | Mixed Investment 20-60% Shares | GB00B3FPDY55 | 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 |
| Lazard Emerging Markets | Global Emerging Markets | GB00B24F1G74 | High risk |
| Liontrust India | Specialist | GB00B1L6DV51 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| MI Chelverton UK Equity Growth | UK All Companies | GB00BP855B75 | Medium risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | Medium risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Premier Miton Diversified Growth | Mixed Investment 40-85% Shares | GB00B8BJV423 | Medium risk |
| Premier Miton UK Smaller Companies | UK Smaller Companies | GB00B818N094 | High risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | Medium risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Schroder QEP Global Active Value | Global | GB00B76V8G74 | Medium risk |
| Schroder Strategic Bond | Sterling Strategic Bond | GB00B7FPS593 | Low risk |
| Schroder UK Smaller Companies | UK Smaller Companies | GB00B76V7Z98 | High risk |
| Slater Recovery | UK All Companies | GB0031554248 | Medium risk |
| VT De Lisle America | North America | GB00B3QF3G69 | High risk |
| Wise Funds Limited TB Wise Multi-Asset Growth | Flexible Investment | GB0034272533 | Medium 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):
| Name | Sector | ISIN Code | Risk |
| AXA Framlington Managed Income | Sterling Strategic Bond | GB00B7H1PG56 | Low risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| BNY Mellon Real Return | Targeted Absolute Return | GB00B7VVXF60 | Low risk |
| FP Apollo Multi Asset Balanced | Mixed Investment 20-60% Shares | GB00B3FPF276 | Low risk |
| FP Apollo Multi Asset Cautious | Mixed Investment 20-60% Shares | GB00B3FPDY55 | 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 MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Schroder Strategic Bond | Sterling Strategic Bond | GB00B7FPS593 | Low risk |
| Artemis Global Growth | Global | GB00B2PLJP95 | Medium risk |
| FP Octopus UK Multi Cap Income | UK Equity Income | GB00BG47Q333 | Medium 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 Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | Medium risk |
| Schroder QEP Global Active Value | Global | GB00B76V8G74 | Medium risk |
| Slater Recovery | UK All Companies | GB0031554248 | Medium risk |
| Wise Funds Limited TB Wise Multi-Asset Growth | Flexible Investment | GB0034272533 | Medium risk |
| Aviva Inv UK Smaller Companies | UK Smaller Companies | GB0004457312 | High risk |
| Barings Global Agriculture | Specialist | GB00B3B9V927 | High risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| JPM Natural Resources | Specialist | GB0031835118 | High risk |
| Lazard Emerging Markets | Global Emerging Markets | GB00B24F1G74 | High risk |
| Liontrust India | Specialist | GB00B1L6DV51 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| Premier Miton UK Smaller Companies | UK Smaller Companies | GB00B818N094 | High risk |
| Schroder UK Smaller Companies | UK Smaller Companies | GB00B76V7Z98 | 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 |
| Artemis Global Income | Global Equity Income | GB00B5N99561 | Medium risk |
| Barings Multi Asset | Targeted Absolute Return | GB00B3VBC734 | Low risk |
| ES R&M UK Recovery | UK All Companies | GB00B614J053 | Medium risk |
| HSBC Pacific Index | Asia Pacific Excluding Japan | GB0000150713 | Medium risk |
| Invesco Global Emerging Markets (UK) | Global Emerging Markets | GB00B3RW7S64 | High risk |
| Invesco Global Smaller Companies (UK) | Global | GB00B3RS8K36 | High risk |
| Jupiter Income Trust | UK Equity Income | GB0004791389 | Medium risk |
| Jupiter UK Smaller Companies Equity | UK Smaller Companies | GB0004911870 | High risk |
| L&G Pacific Index Trust | Asia Pacific Excluding Japan | GB00B0CNGY27 | Medium risk |
| Marlborough High Yield Fixed Interest | Sterling High Yield | GB00B03TN153 | Low risk |
| Schroder US Mid Cap | North America | GB00B7LDLV43 | Medium risk |
| SVM UK Opportunities | UK All Companies | GB0032064304 | 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 8% (11%)
- Alternatives 21% (18%) - 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 9% (14%)
- European Equities 4% (4%)
- Chinese Equities 0% (0%)
- Japanese Equities 0% (0%)
- Property 0% (0%)
- UK Equities 25% (23%)
- Gilts 0% (0%)
- Cash 5% (5%)
- Asian / Emerging market equities 7% (8%)
- Other international equities 13% (12%)
- Commodities and Energy 8% (5%)
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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