Commentary
Of the 30 funds in February's BOTB, 18 funds have retained their place in March's selection. The chart below shows the average performance of the BOTB during February (the red 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 green line). You can see that the BOTB outperformed its benchmark, in what was a tricky month especially for bond investors. So, again it's unsurprising that almost two-thirds of the funds have retained their place in the BOTB.
The above chart also shows how the selection has fared against the average professionally managed fund from the Mixed Investment 20-60% Shares sector and the Mixed Investment 40-85% Shares sector. The former is typically more cautious than the BOTB given its lower equity exposure (and higher bond exposure) while the latter tends to be more adventurous. The performance of the average Mixed Investment 20-60% Shares funds highlights how bonds struggled in February as markets began increasing bets that central banks would keep interest rates higher for longer.
Within the BOTB the drag on performance came from those funds most affected by the rally in the strength of the US dollar. That is why funds investing in emerging markets, gold, other commodities and global bonds prop up the performance table for February. The bottom five performing funds are shown below.
| Fund | February 2023 % return |
| Fidelity Global High Yield | -1.69 |
| abrdn Latin American Equity | -2.89 |
| McInroy & Wood Emerging Markets | -3.09 |
| Invesco China Equity (UK) | -7.81 |
| BlackRock Gold & General | -10.92 |
At the other end of the scale the best-performing funds, shown in the table below, include TB Saracen Global Income & Growth which I hold in my £50k portfolio.
| Fund | February 2023 % return |
| LF Brook Continental European | 4.58 |
| Schroder European Recovery | 3.88 |
| UBS UK Equity Income | 2.59 |
| TB Saracen Global Income & Growth | 2.55 |
| LF Lightman European | 2.06 |
March's BOTB still has an equity exposure of around 60%. But there are some significant differences between the asset mix of the BOTB this month compared to last month. There has been a significant increase in UK equity exposure at the expense of US equities. Also there is the complete removal of exposure to Asia and emerging markets with European equities being the beneficiary. 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 eight 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.
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 |
| 7IM Real Return | Targeted Absolute Return | GB00B75MS619 | Low risk |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Low risk |
| abrdn UK Value Equity | UK All Companies | GB00B7LK2232 | High risk |
| Artemis Strategic Assets | Flexible Investment | GB00B3VDD431 | Medium risk |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Low risk |
| Close Select Fixed Income | Sterling Strategic Bond | GB00BD6R7Y87 | Low risk |
| EdenTree Responsible & Sustainable Managed Income | Mixed Investment 40-85% Shares | GB0009449710 | Medium risk |
| Invesco European Equity (UK) | Europe Excluding UK | GB0033048843 | High risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Low risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| Jupiter Income Trust | UK Equity Income | GB0004791389 | Medium risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| LF Brook Continental European | Europe Excluding UK | GB0031831570 | High risk |
| LF Havelock Global Select | Global | GB00BFM7DN78 | Medium risk |
| LF Lightman European | Europe Excluding UK | GB00BGPFJN79 | High risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Medium risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | High risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | High risk |
| Royal London Global Equity Income | Global Equity Income | GB00BL6V1118 | Medium risk |
| Schroder European Recovery | Europe Excluding UK | GB0007221889 | High risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | Medium risk |
| Schroder Global Recovery | Global | GB00BYRJXL91 | High risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Schroder UK Alpha Plus | UK All Companies | GB00B5L33N61 | High risk |
| TB Saracen Global Income & Growth | Global Equity Income | GB00B5B35X02 | Medium risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| TwentyFour Focus Bond | Sterling Strategic Bond | GB00B7J5ND87 | Low risk |
| UBS FTSE RAFI Developed 1000 Index | Global | GB00BX9C1L56 | Medium risk |
| UBS UK Equity Income | UK Equity Income | GB00B4W58959 | 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 |
| 7IM Real Return | Targeted Absolute Return | GB00B75MS619 | Low risk |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Low risk |
| Aviva Inv Multi Strategy Target Return | Targeted Absolute Return | GB00BMTRW090 | Low risk |
| Close Select Fixed Income | Sterling Strategic Bond | GB00BD6R7Y87 | Low risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Low risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| TwentyFour Focus Bond | Sterling Strategic Bond | GB00B7J5ND87 | Low risk |
| Artemis Strategic Assets | Flexible Investment | GB00B3VDD431 | Medium risk |
| EdenTree Responsible & Sustainable Managed Income | Mixed Investment 40-85% Shares | GB0009449710 | Medium risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| Jupiter Income Trust | UK Equity Income | GB0004791389 | Medium risk |
| LF Havelock Global Select | Global | GB00BFM7DN78 | Medium risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Medium risk |
| Royal London Global Equity Income | Global Equity Income | GB00BL6V1118 | Medium risk |
| Schroder Global Equity Income | Global Equity Income | GB00B76V7M69 | Medium risk |
| TB Saracen Global Income & Growth | Global Equity Income | GB00B5B35X02 | Medium risk |
| UBS FTSE RAFI Developed 1000 Index | Global | GB00BX9C1L56 | Medium risk |
| abrdn UK Value Equity | UK All Companies | GB00B7LK2232 | High risk |
| Invesco European Equity (UK) | Europe Excluding UK | GB0033048843 | High risk |
| LF Brook Continental European | Europe Excluding UK | GB0031831570 | High risk |
| LF Lightman European | Europe Excluding UK | GB00BGPFJN79 | High risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | High risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | High risk |
| Schroder European Recovery | Europe Excluding UK | GB0007221889 | High risk |
| Schroder Global Recovery | Global | GB00BYRJXL91 | High risk |
| Schroder UK Alpha Plus | UK All Companies | GB00B5L33N61 | High risk |
| UBS UK Equity Income | UK Equity Income | GB00B4W58959 | 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 |
| 7IM Select Moderately Adventurous | Mixed Investment 40-85% Shares | GB00BJ0C8G04 | Medium risk |
| abrdn Latin American Equity | Latin America | GB00B41QSW23 | High risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Low risk |
| BlackRock Gold & General | Specialist | GB00B5ZNJ896 | High risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| BNY Mellon Global Income | Global Equity Income | GB00B7XK5M25 | Medium risk |
| ES R&M Global Recovery | Global | GB00B9428D30 | High risk |
| Fidelity Global High Yield | Sterling High Yield | GB00B7K7SQ18 | Low risk |
| Invesco China Equity (UK) | China/Greater China | GB00B3RW8C79 | High risk |
| McInroy & Wood Emerging Markets | Global Emerging Markets | GB00B7SKS407 | High risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | Medium risk |
| Vanguard FTSE UK Equity Income Index | UK Equity Income | GB00B59G4H82 | 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 15% (16%)
- Alternatives 13% (16%) - includes absolute return strategies
- North American Equities 8% (11%)
- Emerging Market Equities 0% (3%)
- European Equities 15% (12%)
- Japanese Equities 5% (6%)
- UK Equities 21% (16%)
- Cash 7% (8%)
- China Equities 0% (3%)
- Other international equities 12% (5%)
- Commodities and Energy 4% (4%)
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 BOTB has outperformed the average managed fund and the market.
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