80-20 Investor Best of the Best Selection – November 2015 Update

A total of 6 funds from October's 19 funds make it into November's selection. Below I list this month's selection in full with the 6 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.

November'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	Sector	ISIN Code	Risk Level
Aberdeen - European High Yield Bond	Sterling High Yield	GB00B5968F40	Low risk
Aberdeen - Property Share	Property	GB00B0XWNM59	High risk
Artemis - Pan-European Absolute Return	Targeted Absolute Return	GB00BMMV4J16	Medium risk
Artemis - US Extended Alpha	North America	GB00BMMV5G59	High risk
Aviva Inv - High Yield Bond	Sterling High Yield	GB00B3CGJ878	Low risk
AXA - Framlington UK Smaller Cos	UK Smaller Companies	GB0030310857	Medium risk
Baillie Gifford - American	North America	GB0006061740	High risk
CF - Miton UK Multi Cap Income	UK Equity Income	GB00B3SRD718	Medium risk
CF - Miton UK Smaller Companies	UK Smaller Companies	GB00B818N094	Medium risk
CF - Miton UK Value Opportunities	UK All Companies	GB00B8KV0M06	Medium risk
FP - Miton Undervalued Assets	UK All Companies	GB00B3BSKG91	Medium risk
Fundsmith - Equity	Global	GB00B4LPDJ14	High risk
JPM - Global Ex UK Bond	Global Bonds	GB0030877327	Low risk
Jupiter - Strategic Bond	Sterling Strategic Bond	GB00B2RBCS16	Low risk
Legg Mason - IF Japan Equity	Japan	GB0033507467	High risk
Liontrust - UK Smaller Companies	UK Smaller Companies	GB0007420788	Medium risk
M&G - Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
Man GLG - Continental European Growth	Europe Excluding UK	GB00B0119370	High risk
Marlborough - High Yield Fixed Interest	Sterling High Yield	GB00B03TN153	Low risk
MFM - Slater Growth	UK All Companies	GB00B0706C66	Medium risk
MFM - Slater Recovery	UK All Companies	GB0031554248	Medium risk
Natixis - Loomis Sayles U.S. Equity Leaders	North America	GB00B8L3WZ29	High risk
Premier - Pan European Property	Property	GB0030599798	High risk
Rathbone - Global Opportunities	Global	GB0030349095	High risk
Schroder - Absolute UK Dynamic	Targeted Absolute Return	GB00B3N74T57	Medium risk
Schroder - Monthly High Income	Sterling High Yield	GB0009505693	Low risk
Schroder - Strategic Credit	Sterling Strategic Bond	GB00B11DNZ00	Low risk
SVS Church House - Investment Grade Fixed Interest	Sterling Corporate Bond	GB0004743828	Low risk
Threadneedle - American Extended Alpha	North America	GB00B28B7B81	High risk

 

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

Here is November's shortlist grouped by their risk category (funds unchanged from last month are in black while new additions are in green):

Fund	Sector	ISIN Code	Risk Level
Aberdeen - European High Yield Bond	Sterling High Yield	GB00B5968F40	Low risk
Schroder - Monthly High Income	Sterling High Yield	GB0009505693	Low risk
Schroder - Strategic Credit	Sterling Strategic Bond	GB00B11DNZ00	Low risk
Marlborough - High Yield Fixed Interest	Sterling High Yield	GB00B03TN153	Low risk
M&G - Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
JPM - Global Ex UK Bond	Global Bonds	GB0030877327	Low risk
Jupiter - Strategic Bond	Sterling Strategic Bond	GB00B2RBCS16	Low risk
Aviva Inv - High Yield Bond	Sterling High Yield	GB00B3CGJ878	Low risk
SVS Church House - Investment Grade Fixed Interest	Sterling Corporate Bond	GB0004743828	Low risk
Liontrust - UK Smaller Companies	UK Smaller Companies	GB0007420788	Medium risk
CF - Miton UK Smaller Companies	UK Smaller Companies	GB00B818N094	Medium risk
FP - Miton Undervalued Assets	UK All Companies	GB00B3BSKG91	Medium risk
MFM - Slater Growth	UK All Companies	GB00B0706C66	Medium risk
AXA - Framlington UK Smaller Cos	UK Smaller Companies	GB0030310857	Medium risk
CF - Miton UK Value Opportunities	UK All Companies	GB00B8KV0M06	Medium risk
CF - Miton UK Multi Cap Income	UK Equity Income	GB00B3SRD718	Medium risk
MFM - Slater Recovery	UK All Companies	GB0031554248	Medium risk
Schroder - Absolute UK Dynamic	Targeted Absolute Return	GB00B3N74T57	Medium risk
Artemis - Pan-European Absolute Return	Targeted Absolute Return	GB00BMMV4J16	Medium risk
Legg Mason - IF Japan Equity	Japan	GB0033507467	High risk
Artemis - US Extended Alpha	North America	GB00BMMV5G59	High risk
Aberdeen - Property Share	Property	GB00B0XWNM59	High risk
Man GLG - Continental European Growth	Europe Excluding UK	GB00B0119370	High risk
Natixis - Loomis Sayles U.S. Equity Leaders	North America	GB00B8L3WZ29	High risk
Premier - Pan European Property	Property	GB0030599798	High risk
Baillie Gifford - American	North America	GB0006061740	High risk
Fundsmith - Equity	Global	GB00B4LPDJ14	High risk
Rathbone - Global Opportunities	Global	GB0030349095	High risk
Threadneedle - American Extended Alpha	North America	GB00B28B7B81	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	Sector	ISIN Code	Portfolio
Aberdeen - Property Trust	Property	GB00B036Z329	Low risk
AXA - Framlington UK Smaller Cos	UK Smaller Companies	GB0030310857	Medium risk
BlackRock - European Absolute Alpha	Targeted Absolute Return	GB00B4Y62T40	Low risk
Invesco Perpetual - European Opportunities	Europe Excluding UK	GB00B28J0N53	High risk
JPM - UK Smaller Companies	UK Smaller Companies	GB0030880255	Medium risk
Jupiter - European	Europe Excluding UK	GB0006664683	High risk
L&G - Dynamic Bond	Sterling Strategic Bond	GB00B1TWMW95	Low risk
M&G - Property Portfolio	Property	GB00B8G41W07	Low risk
Marlborough - UK Micro Cap Growth	UK Smaller Companies	GB00B02TPH60	Medium risk
Premier - Multi-Asset Conservative Growth	Mixed Investment 20%-60% Shares	GB0030439946	Low risk
R&M - UK Equity Smaller Companies	UK Smaller Companies	GB00B1DSZR91	Medium risk
Schroder - UK Dynamic Smaller Companies	UK Smaller Companies	GB0031092942	Medium risk
Unicorn - UK Smaller Companies	UK Smaller Companies	GB0031785065	Medium risk

Commentary

At the start of October the investment outlook wasn't that rosy after August and September's market falls. Unsurprisingly the 80-20 Investor algorithm took a more cautious tone which had ensured its outperformance during the market sell-off. You may recall that in October's monthly newsletter I highlighted how October has historically been a tough month for investors.

Yet there is always an exception to every rule. In my newsletter I went on to say:

"....there are one or two reasons for optimism. The last 3 months [July to September] were the worst quarter for equities since 2011 yet there is an interesting parallel unfolding between 2011 and now. Following a dismal third quarter in 2011 October unusually turned out to be a bumper month for returns. The FTSE 100 rallied 15% in the month of October that year. In addition late October can sometimes see the start of the end of year rallies that occur with unusual regularity."

Well that's pretty much what happened and markets bounced as can be seen from the chart below. October saw the biggest monthly rally since the aforementioned period in 2011. The 80-20 Investor Best of the Best of the Selection also rallied but marginally lagged the market due to the Selection's more cautious tone. What was pleasing was the lack of volatility that the Selection showed during the month, while the market still wobbled despite the rally. Yet overall, as you can see from the chart below the 80-20 Investor portfolio is still significantly outperforming the market and professional fund managers.

November's shortlist is more expansive than last month's, both in terms of the number of funds (there's now 29) and the range of assets invested in, with US and Japanese equities making a reappearance.

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:

• UK Equities 31% (48%)
• Global Fixed Interest 15% (0%)
• Alternative strategies 0% (6%)
• European Equities 7% (16%)
• UK Corporate Fixed Interest (i.e UK bonds)  12% (6%)
• Japanese Equities 5% (0%)
• North American Equities 18% (3%)
• Property 8% (10%)
• Cash 0% (6%)

The remainder is made up of other international equities.

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 shows how a portfolio would have performed over the last year 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 balanced managed fund (red line) and the average managed fund with up to 85% equity exposure (blue 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 (currently it has an 65% exposure to equities). 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 UK fund manager.

 

 

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