80-20 Investor Best of the Best Selection – March 2023 Update

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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