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.
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