80-20 Investor Best of the Best Selection – May 2020 Update

Commentary

The latest BOTB update paints a very different picture from last time. Whereas last time only four funds retained their BOTB status, this time around 25 funds retained their status with just five funds being replaced by new ones. That is one of the most consistent handovers from one month to the next we've ever experienced. It demonstrates the resilience of the funds that made the BOTB last month.

Every fund within last month's BOTB made a profit, except one which was the Artemis
US Absolute Return (which lost 0.88% over the month). It is one of the few funds that didn't make it into this May's BOTB. But the 80-20 Investor algorithm correctly identified a number of funds which rode the developing trends to produce eye-watering one-month returns during May. The top 6 are shown below and captured the winning trends of investing in US equities, technology stocks and healthcare stocks:

Name	1-month return %
Liontrust Global Technology	18.22
Baillie Gifford Positive Change	16.36
T. Rowe Price Global Technology Equity	15.46
AXA Framlington Biotech	14.96
Baillie Gifford Long Term Global Growth Investment	13.15
Schroder Global Healthcare	11.58

Perhaps it is unsurprising then that most funds retained their position in this month's BOTB. On average the BOTB selection made 4.58% during the month of May, which is a great result given that it had only 27% exposure to equities. As explained in May's monthly newsletter, the BOTB took advantage of the ongoing bull market in areas of fixed income.

The BOTB asset mix has remained almost the same as last month, but now has a 37% exposure to equities. Most of this is via US equities. The BOTB still has some exposure to Chinese equities and Asian equities as they have been among the best performing equity markets during the crisis.

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 over five years ago.

Below I list this month's selection in full with the 25 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.

May'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
Allianz Gilt Yield	UK Gilts	GB0031383283	Medium risk
Allianz Strategic Bond	Sterling Strategic Bond	GB00B06T9362	Low risk
ASI (AAM) Sterling Government Bond	UK Gilts	GB00BWK26Q79	Low risk
ASI Sterling Bond	Global Bonds	GB00BWK26Y53	Medium risk
ASI UK Government Bond	UK Gilts	GB00B6WZXS38	Medium risk
AXA Framlington American Growth	North America	GB00B5LXGG05	High risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
AXA Framlington Global Technology	Technology & Telecommunications	GB00B4W52V57	High risk
AXA Framlington Health	Specialist	GB00BRJZVQ71	High risk
AXA Sterling Strategic Bond	Sterling Strategic Bond	GB00B02Y6L20	Low risk
Baillie Gifford Long Term Global Growth Investment	Global	GB00BD5Z0Z54	High risk
Baillie Gifford Positive Change	Global	GB00BYVGKV59	High risk
Barclays Sterling Bond	Sterling Strategic Bond	GB00B72Y6K08	Medium risk
BlackRock European Absolute Alpha	Targeted Absolute Return	GB00B4Y62W78	Low risk
BNY Mellon International Bond	Global Bonds	GB0006779655	Medium risk
JPM Global Ex UK Bond	Global Bonds	GB0030877210	Low risk
JPM Global Macro	Targeted Absolute Return	GB00B09RGL45	Low risk
Kames UK Equity Absolute Return	Targeted Absolute Return	GB00B504CH73	Low risk
LF Canlife UK Government Bond	UK Gilts	GB00BLDYKJ43	Medium risk
Liontrust Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
Morgan Stanley US Advantage	North America	GB00BZ4CG750	High risk
Royal London International Government Bond	Global Bonds	GB00B45XHL18	Low risk
Schroder Gilt & Fixed Interest	UK Gilts	GB00BYTQ7F09	Medium risk
Schroder Global Healthcare	Global	GB00B76V7Q08	Medium risk
T. Rowe Price Dynamic Global Bond	Global Bonds	GB00BD0NLR34	Low risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	High risk
Threadneedle China Opportunities	China/Greater China	GB00B1PRW734	High risk
Troy Asset Management Ltd Trojan Ethical	Flexible Investment	GB00BJP0XX17	Medium risk
Vanguard UK Long Duration Gilt Index	UK Gilts	GB00B4M89245	Medium risk

 

May's Best of the Best Selection - (grouped by risk)

Here is May'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
T. Rowe Price Dynamic Global Bond	Global Bonds	GB00BD0NLR34	Low risk
AXA Sterling Strategic Bond	Sterling Strategic Bond	GB00B02Y6L20	Low risk
Kames UK Equity Absolute Return	Targeted Absolute Return	GB00B504CH73	Low risk
BlackRock European Absolute Alpha	Targeted Absolute Return	GB00B4Y62W78	Low risk
Allianz Strategic Bond	Sterling Strategic Bond	GB00B06T9362	Low risk
ASI (AAM) Sterling Government Bond	UK Gilts	GB00BWK26Q79	Low risk
Royal London International Government Bond	Global Bonds	GB00B45XHL18	Low risk
Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
JPM Global Macro	Targeted Absolute Return	GB00B09RGL45	Low risk
JPM Global Ex UK Bond	Global Bonds	GB0030877210	Low risk
Troy Asset Management Ltd Trojan Ethical	Flexible Investment	GB00BJP0XX17	Medium risk
Vanguard UK Long Duration Gilt Index	UK Gilts	GB00B4M89245	Medium risk
Allianz Gilt Yield	UK Gilts	GB0031383283	Medium risk
ASI UK Government Bond	UK Gilts	GB00B6WZXS38	Medium risk
BNY Mellon International Bond	Global Bonds	GB0006779655	Medium risk
LF Canlife UK Government Bond	UK Gilts	GB00BLDYKJ43	Medium risk
Schroder Global Healthcare	Global	GB00B76V7Q08	Medium risk
Schroder Gilt & Fixed Interest	UK Gilts	GB00BYTQ7F09	Medium risk
Barclays Sterling Bond	Sterling Strategic Bond	GB00B72Y6K08	Medium risk
ASI Sterling Bond	Global Bonds	GB00BWK26Y53	Medium risk
Baillie Gifford Long Term Global Growth Investment	Global	GB00BD5Z0Z54	High risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
Baillie Gifford Positive Change	Global	GB00BYVGKV59	High risk
T. Rowe Price Global Technology Equity	Technology & Telecommunications	GB00BD446K01	High risk
AXA Framlington Health	Specialist	GB00BRJZVQ71	High risk
Liontrust Global Technology	Technology & Telecommunications	GB00BYXZ5N79	High risk
Morgan Stanley US Advantage	North America	GB00BZ4CG750	High risk
AXA Framlington American Growth	North America	GB00B5LXGG05	High risk
AXA Framlington Global Technology	Technology & Telecommunications	GB00B4W52V57	High risk
Threadneedle China Opportunities	China/Greater China	GB00B1PRW734	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 US Absolute Return	Targeted Absolute Return Retail	GB00BMMV5N27	Low risk
HSBC UK Gilt Index	UK Gilts	GB00B4581C50	Medium risk
Janus Henderson Inst Overseas Bond	Global Bonds	GB0007673055	High risk
Royal London UK Government Bond	UK Gilts	GB00B881TW52	Medium risk
Threadneedle Global Bond	Global Bonds	GB0001533685	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 27% (32%)
• Alternatives 11% (9%) - includes absolute return strategies & some bond exposure
• UK Corporate Fixed Interest (i.e UK bonds) 2% (3%)
• Emerging Market Fixed Income 0% (0%)
• North American Equities 26% (16%)
• European Equities 5% (5%)
• Japanese Equities 0% (0%)
• Property 0% (0%)
• UK Equities 0% (0%)
• Gilts 21% (24%)
• Cash 2% (5%)
• Emerging market equities 2% (0%)
• Other international equities 0% (0%)
• Asian Equities 4% (6%)
• Commodities and Energy 0% (0%)

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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