A total of 18 funds from February's 29 funds make it into March's selection. 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.
Just as last time, I have included the full list sorted alphabetically by name and then by risk category.
March'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 |
| Artemis - US Extended Alpha | North America | GB00BMMV5G59 | High risk |
| Baillie Gifford - Emerging Markets Bond | Global Emerging Market Bond | GB00B39RMP13 | Medium risk |
| Baillie Gifford - Global Bond | Global Bonds | GB0031761793 | Medium risk |
| CF - Miton Defensive Multi Asset | Mixed Investment 0%-35% Shares | GB00B010Y517 | Low risk |
| F&C - Responsible Sterling Bond | Sterling Corporate Bond | GB00B23YHT07 | Low risk |
| Fidelity - Global Dividend | Global Equity Income | GB00B7FQHJ97 | High risk |
| Fidelity - Global Enhanced Income | Global Equity Income | GB00BD1NLL62 | High risk |
| Fundsmith - Equity | Global | GB00B4LPDJ14 | High risk |
| Henderson - UK Absolute Return | Targeted Absolute Return | GB00B5KKCS68 | Low risk |
| Investec - Global Franchise | Global | GB00B7WN9P32 | High risk |
| Jupiter - Absolute Return | Targeted Absolute Return | GB00B5129B32 | Medium risk |
| Jupiter - Corporate Bond | Sterling Corporate Bond | GB0002691805 | Low risk |
| L&G - Sterling Corporate Bond Index | Sterling Corporate Bond | GB00B4M01C47 | Low risk |
| Legg Mason - IF ClearBridge US Equity Income | North America | GB00B3TTBW75 | High risk |
| Legg Mason - IF Japan Equity | Japan | GB0033507467 | High risk |
| Liontrust - European Growth | Europe Excluding UK | GB00B1GKBD09 | Medium risk |
| Man GLG - Continental European Growth | Europe Excluding UK | GB00B0119370 | High risk |
| McInroy & Wood - Balanced | Mixed Investment 40%-85% Shares | GB00B7RRJ163 | Medium risk |
| Natixis - Loomis Sayles U.S. Equity Leaders | North America | GB00B8L3WZ29 | High risk |
| Schroder - Global Real Estate Securities Income | Property | GB00B4XCGK27 | High risk |
| Standard Life Investments - AAA Income | Sterling Corporate Bond | GB0006161516 | Low risk |
| Standard Life Investments - Emerging Market Debt | Global Emerging Market Bond | GB00B8K56P77 | Medium risk |
| Standard Life Investments - Global Real Estate | Property | GB00B0LD3V96 | Medium risk |
| Threadneedle - Emerging Market Bond | Global Emerging Market Bond | GB0002365608 | Medium risk |
| Threadneedle - Global Bond | Global Bonds | GB0001533685 | Medium risk |
| Threadneedle - UK Social Bond | Sterling Corporate Bond | GB00BF233790 | Low risk |
| Troy Asset Management Ltd - Trojan | Flexible Investment | GB0034243732 | Medium risk |
| Vanguard - LifeStrategy 20% Equity | Mixed Investment 0%-35% Shares | GB00B4NXY349 | Low risk |
| WAY - Global Cautious Portfolio | Mixed Investment 0%-35% Shares | GB00B06G2Q19 | Low risk |
| Wise Investments - Evenlode Income | UK Equity Income | GB00B42KPP53 | Medium risk |
March's Best of the Best Selection - (grouped by risk)
Here is March'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 |
| Henderson - UK Absolute Return | Targeted Absolute Return | GB00B5KKCS68 | Low risk |
| Vanguard - LifeStrategy 20% Equity | Mixed Investment 0%-35% Shares | GB00B4NXY349 | Low risk |
| WAY - Global Cautious Portfolio | Mixed Investment 0%-35% Shares | GB00B06G2Q19 | Low risk |
| Standard Life Investments - AAA Income | Sterling Corporate Bond | GB0006161516 | Low risk |
| CF - Miton Defensive Multi Asset | Mixed Investment 0%-35% Shares | GB00B010Y517 | Low risk |
| Threadneedle - UK Social Bond | Sterling Corporate Bond | GB00BF233790 | Low risk |
| L&G - Sterling Corporate Bond Index | Sterling Corporate Bond | GB00B4M01C47 | Low risk |
| Jupiter - Corporate Bond | Sterling Corporate Bond | GB0002691805 | Low risk |
| F&C - Responsible Sterling Bond | Sterling Corporate Bond | GB00B23YHT07 | Low risk |
| Jupiter - Absolute Return | Targeted Absolute Return | GB00B5129B32 | Medium risk |
| Baillie Gifford - Global Bond | Global Bonds | GB0031761793 | Medium risk |
| Threadneedle - Global Bond | Global Bonds | GB0001533685 | Medium risk |
| Threadneedle - Emerging Market Bond | Global Emerging Market Bond | GB0002365608 | Medium risk |
| Standard Life Investments - Global Real Estate | Property | GB00B0LD3V96 | Medium risk |
| Standard Life Investments - Emerging Market Debt | Global Emerging Market Bond | GB00B8K56P77 | Medium risk |
| Liontrust - European Growth | Europe Excluding UK | GB00B1GKBD09 | Medium risk |
| Troy Asset Management Ltd - Trojan | Flexible Investment | GB0034243732 | Medium risk |
| Baillie Gifford - Emerging Markets Bond | Global Emerging Market Bond | GB00B39RMP13 | Medium risk |
| McInroy & Wood - Balanced | Mixed Investment 40%-85% Shares | GB00B7RRJ163 | Medium risk |
| Wise Investments - Evenlode Income | UK Equity Income | GB00B42KPP53 | Medium risk |
| Legg Mason - IF Japan Equity | Japan | GB0033507467 | High risk |
| Fundsmith - Equity | Global | GB00B4LPDJ14 | High risk |
| Investec - Global Franchise | Global | GB00B7WN9P32 | High risk |
| Man GLG - Continental European Growth | Europe Excluding UK | GB00B0119370 | High risk |
| Legg Mason - IF ClearBridge US Equity Income | North America | GB00B3TTBW75 | High risk |
| Natixis - Loomis Sayles U.S. Equity Leaders | North America | GB00B8L3WZ29 | High risk |
| Fidelity - Global Enhanced Income | Global Equity Income | GB00BD1NLL62 | High risk |
| Schroder - Global Real Estate Securities Income | Property | GB00B4XCGK27 | High risk |
| Fidelity - Global Dividend | Global Equity Income | GB00B7FQHJ97 | High risk |
| Artemis - US Extended Alpha | North America | GB00BMMV5G59 | 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 |
| Aviva Inv - European Property | Property | GB00B4KZRT07 | Medium risk |
| AXA - Framlington Japan | Japan | GB0003500179 | High risk |
| BlackRock - European Absolute Alpha | Targeted Absolute Return | GB00B4Y62T40 | Low risk |
| Henderson Inst - Overseas Bond | Global Bonds | GB0007673055 | Medium risk |
| IFSL - Tilney Bestinvest Defensive Portfolio | Mixed Investment 20%-60% Shares | GB00B39VH700 | Low risk |
| L&G - Global Technology Index | Technology & Telecom | GB00B0CNH163 | High risk |
| L&G - UK Property | Property | GB00BK35DS04 | Low risk |
| Liontrust - UK Smaller Companies | UK Smaller Companies | GB0007420788 | Medium risk |
| M&G - Emerging Markets Bond | Global Emerging Market Bond | GB0031958738 | Medium risk |
| Premier - ConBrio Sanford Deland UK Buffettology | UK All Companies | GB00B3QQFJ66 | High risk |
| Royal London - Sustainable Managed Growth Trust | Mixed Investment 0%-35% Shares | GB00B6YBY313 | Low risk |
Commentary
You will recall that last month the 80-20 Investor portfolio moved into more defensive assets with an increased exposure to property, bonds and cautiously managed funds. There was also a preference for global bonds over UK bonds. The portfolio also had its lowest direct equity exposure ever. Well it turned out to be an insightful move. The chart below shows the performance of the 80-20 Investor selection (green line) versus the FTSE (black line), the average managed fund (red line) and the average cautious managed fund (blue line).
Not only did the 80-20 Investor selection hold up when the market fell over 8% it still finished ahead of the others after a strong equity rally in the second half of February.
Perhaps it is not surprising that the majority of last month's selection make it into this month's shortlist. The asset mix remains broadly the same although there has been a marked reduction in exposure to UK equities. The minimal exposure may bode well especially after me analysis of how the impending UK EU referendum will affect your investments. Despite it being a UK based vote the implications for Europe could be equally as unpredictable, and the portfolio's reduced European equity exposure perhaps reflects that. One of the key influencers of portfolio returns in the coming months will be currency moves as the pound continues to weaken, which is a direct result of the uncertainty surrounding the referendum. Japanese equities are still playing catchup and those funds without hedges are outperforming their hedged peers. The one region where direct equity exposure has increased is the US.
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:
- North American Equities 19% (14%)
- Global Fixed Interest 18% (19%)
- Alternatives 16% (16%)
- UK Corporate Fixed Interest (i.e UK bonds) 11% (8%)
- European Equities 10% (12%)
- Property 8% (11%)
- UK Equities 6% (11%)
- Japanese Equities 6% (9%)
- Other international equities 6% (0%)
- Emerging markets 0% (0%)
- Cash 0% (0%)
80-20 Investor's outperformance continues even during the market sell-off
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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