Commentary
Of the 30 funds in February's BOTB, 16 funds have retained their place in March's selection. The chart below shows the average performance of the BOTB during February against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix.
The outperformance is a reflection of the selection's exposure to funds containing energy and financial stocks as well as commodities. In fact, there was quite a divergence in performance between the top and bottom funds during February. The chart below shows the top five performers from February's BOTB. It is pleasing to see that four of the funds are within my own £50k portfolio.
| Fund | % return in February |
| BlackRock Natural Resources Growth & Income | 4.84 |
| Fidelity American Special Situation | 2.86 |
| Invesco UK Opportunities (UK) | 1.58 |
| Man GLG Japan Core Alpha | 0.79 |
| Premier Miton Defensive Growth | 0.64 |
At the other end of the scale, those funds that experienced the worst of the market slump had exposure to European stocks, and in particular the German DAX. During February the German DAX was the hardest hit of the major western stock markets falling 6.53% during the month. The German economy has a significant reliance on Russian gas supplies, while its stock market index has a lack of energy companies within it, which have been among the main beneficiaries of rising energy prices. I hold the Schroder European Recovery fund within my own £50k portfolio.
| Fund | % return in February |
| GAM UK Equity Income | -3.55 |
| Schroder European Recovery | -4.85 |
| MI Thornbridge Global Opportunities | -6.11 |
| Stewart Investors Indian Subcontinent Sustainability | -6.95 |
| Artemis SmartGARP European Equity | -8.09 |
This month's selection saw a slight decrease in equity exposure, falling from 63% to 60%. The biggest change was a reduced exposure to European equities, a result of the impact of the war in Ukraine, as well as an increase in the exposure to commodities, including gold miners (something that has not been in the BOTB for a long time but is now benefiting from the rise in the price of gold). There is still a small exposure to Japanese equities. The low-risk end of the selection still has a focus on targeted absolute return funds and mixed asset funds, but bond funds have crept back into the mix.
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 16 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.
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)
| Name | Sector | ISIN Code | Risk |
| ASI World Income Equity | Global Equity Income | GB00B3N9CY25 | Medium risk |
| Barings Global Agriculture | Commodity/Natural Resources | GB00B3B9V927 | High risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| BM SVS Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| FP Foresight Sustainable Real Estate Securities | Property Other | GB00BMFYBB80 | High risk |
| FP Russell Investments Real Assets | Flexible Investment | GB00B4KQS127 | Medium risk |
| Invesco Latin American (UK) | Latin America | GB00B3RW8X82 | High risk |
| Invesco UK Opportunities (UK) | UK All Companies | GB00B1W7HM62 | Medium risk |
| JPM US Equity Income | North America | GB00B3FJQ151 | Medium risk |
| M&G Global Dividend | Global | GB00B46J9127 | Medium risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | High risk |
| Ninety One Global Gold | Specialist | GB00B1XFGM25 | High risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Royal London Diversified Asset-Backed Securities | Targeted Absolute Return | GB00B4K6P774 | Low risk |
| Royal London GMAP Balanced | Mixed Investment 20-60% Shares | GB00BD8RSQ51 | Low risk |
| Royal London Short Duration Global Index Linked | Global Bonds | GB00BD050F05 | Low risk |
| Royal London UK Income With Growth Trust | Mixed Investment 40-85% Shares | GB0001598050 | Medium risk |
| Sarasin Global Higher Dividend | Global Equity Income | GB00B84ZSV39 | High risk |
| Schroder European Recovery | Europe Excluding UK | GB0007221889 | High risk |
| Schroder Income | UK Equity Income | GB00B3PM1190 | Medium risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | 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 |
| TwentyFour Monument Bond | Specialist | GB00B3V5V897 | Low risk |
| UBS UK Equity Income | UK Equity Income | GB00B4W58959 | Medium risk |
| Vanguard FTSE UK Equity Income Index | UK Equity Income | GB00B59G4H82 | Medium risk |
| VT De Lisle America | North America | GB00B3QF3G69 | High 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):
| Name | Sector | ISIN Code | Risk |
| BM SVS Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Royal London Diversified Asset-Backed Securities | Targeted Absolute Return | GB00B4K6P774 | Low risk |
| Royal London GMAP Balanced | Mixed Investment 20-60% Shares | GB00BD8RSQ51 | Low risk |
| Royal London Short Duration Global Index Linked | Global Bonds | GB00BD050F05 | Low risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | 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 |
| TwentyFour Monument Bond | Specialist | GB00B3V5V897 | Low risk |
| ASI World Income Equity | Global Equity Income | GB00B3N9CY25 | Medium risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| FP Russell Investments Real Assets | Flexible Investment | GB00B4KQS127 | Medium risk |
| Invesco UK Opportunities (UK) | UK All Companies | GB00B1W7HM62 | Medium risk |
| JPM US Equity Income | North America | GB00B3FJQ151 | Medium risk |
| M&G Global Dividend | Global | GB00B46J9127 | Medium risk |
| Royal London UK Income With Growth Trust | Mixed Investment 40-85% Shares | GB0001598050 | Medium risk |
| Schroder Income | UK Equity Income | GB00B3PM1190 | Medium risk |
| UBS UK Equity Income | UK Equity Income | GB00B4W58959 | Medium risk |
| Vanguard FTSE UK Equity Income Index | UK Equity Income | GB00B59G4H82 | Medium risk |
| Barings Global Agriculture | Commodity/Natural Resources | GB00B3B9V927 | High risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| FP Foresight Sustainable Real Estate Securities | Property Other | GB00BMFYBB80 | High risk |
| Invesco Latin American (UK) | Latin America | GB00B3RW8X82 | High risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | High risk |
| Ninety One Global Gold | Specialist | GB00B1XFGM25 | High risk |
| Sarasin Global Higher Dividend | Global Equity Income | GB00B84ZSV39 | High risk |
| Schroder European Recovery | Europe Excluding UK | GB0007221889 | High risk |
| TB Guinness Global Energy | Commodity/Natural Resources | GB00B56FW078 | 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 Monthly Distribution | Mixed Investment 20-60% Shares | GB00B6TK3R06 | Low risk |
| Artemis SmartGARP European Equity | Europe Excluding UK | GB00B2PLJD73 | High risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| Close Diversified Income Portfolio | Mixed Investment 20-60% Shares | GB00B708TJ43 | Low risk |
| EdenTree Responsible & Sustainable Managed Income | Mixed Investment 40-85% Shares | GB0009449710 | Medium risk |
| Fidelity Index US | North America | GB00BJS8SH10 | High risk |
| GAM UK Equity Income | UK Equity Income | GB00BF7M7V38 | High risk |
| Margetts Providence Strategy | Mixed Investment 20-60% Shares | GB00B4VR6328 | Low risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | Medium risk |
| Premier Miton Multi-Asset Monthly Income | Mixed Investment 20-60% Shares | GB00B7GGPC79 | Low risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | High risk |
| Schroder Recovery | UK All Companies | GB00B3VVG600 | Medium risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| Wise Funds Limited TB Wise Multi-Asset Income | Flexible Investment | GB00B0LJ0160 | 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 11% (11%)
- Alternatives 25% (25%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 3% (0%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 10% (12%)
- European Equities 4% (11%)
- Chinese Equities 0% (0%)
- Japanese Equities 3% (4%)
- Property 4% (0%)
- UK Equities 19% (19%)
- Gilts 0% (0%)
- Cash 0% (0%)
- Asian / Emerging market equities 3% (0%)
- Other international equities 4% (10%)
- Commodities and Energy 14% (8%)
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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