Commentary
Of the 30 funds in October's BOTB, 18 funds have retained their place in November's selection. The chart below shows the performance of the BOTB against a benchmark that is calculated using the respective sector averages for each fund in the BOTB and assuming the same asset mix. The BOTB had a very strong month, coping with the bond market sell-off.
The table below shows the top performers within the BOTB for the month of October and it's good to see three of those (highlighted in bold) are held within my own £50k portfolio.
| Name | October % return |
| SVS Sanlam North American Equity | 5.99 |
| Liontrust Global Technology | 5.65 |
| Fidelity Emerging Europe Middle East and Africa | 5.44 |
| Marlborough European Multi-Cap | 4.22 |
| T. Rowe Price Global Technology Equity | 3.62 |
At the other end of the spectrum, the worst performers are shown below and it's surprising to see Liontrust India and Fidelity UK Smaller Companies (which I hold in my £50k portfolio) among them, as they have been regulars in the BOTB.
| Fund | October % return |
| Fidelity UK Smaller Companies | -1.07 |
| FTF Franklin UK Smaller Companies | -1.71 |
| MI Chelverton UK Equity Growth | -2.51 |
| Marlborough UK Micro Cap Growth | -2.52 |
| Liontrust India | -3.26 |
Unsurprisingly, this month's BOTB has seen a reduction in its UK equity exposure in favour of more exposure to commodities and US equities. But overall the selection's equity exposure remains at 68%. The focus of the portfolio still remains US, UK and European equities, while having almost no direct exposure to Asian equities (including Japan) but there remains exposure to Russian equities (owing to the rally in commodities) as well as new exposure to commodities directly. The selection's exposure to property equity funds has remained as before but still reduced when compared to previous months. At the low-risk end of the selection, there remains a significant allocation to Targeted Absolute Return funds but also a number of funds that were highlighted in the research piece 'Lower risk funds for a bond market sell-off'.
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 seven 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.
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)
| Name | Sector | ISIN Code | Risk |
| ASI Global Smaller Companies | Global | GB00B7KVX245 | Medium risk |
| AXA Framlington American Growth | North America | GB00B5LXGG05 | Medium risk |
| AXA Global Distribution | Mixed Investment 20-60% Shares | GB0008309063 | Low risk |
| Baillie Gifford Diversified Growth | Targeted Absolute Return | GB00B3FD0Z91 | Low risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resource | GB00B6865B79 | High risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| EF Tellsons Endeavour | Mixed Investment 20-60% Shares | GB00BJ391H08 | Low risk |
| Fidelity Emerging Europe Middle East and Africa | Specialist | GB00B87Z7808 | High risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Invesco UK Opportunities (UK) | UK All Companies | GB00B1W7HM62 | High risk |
| Jupiter European | Europe Excluding UK | GB0006664683 | Medium risk |
| Jupiter Global Financial Innovation | Financials and Financial Innovation | GB00B551H564 | High risk |
| Liontrust Global Technology | Technology & Telecommunication | GB00BYXZ5N79 | High risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | High risk |
| Liontrust Russia | Specialist | GB00B86WB793 | High risk |
| M&G Index-Linked Bond | UK Index Linked Gilt | GB0031111478 | Medium risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Royal London Global Index Linked | Global Bonds | GB00B772RM82 | Low risk |
| Royal London Global Sustainable Equity | Global | GB00BL6V0581 | Medium risk |
| Royal London Sustainable Diversified Trust | Mixed Investment 20-60% Shares | GB00B844WJ68 | Low risk |
| Royal London Sustainable World Trust | Mixed Investment 40-85% Shares | GB00B882H241 | Medium risk |
| Schroder Global Cities Real Estate | Property Other | GB00B1VPTY75 | Medium risk |
| Stewart Investors Worldw. Lead. Sust. | Global | GB0030978729 | Medium risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | Medium risk |
| T. Rowe Price Global Technology Equity | Technology & Telecommunication | GB00BD446K01 | High risk |
| VT Chelsea Managed Monthly Income | Mixed Investment 20-60% Shares | GB00BF0NMS52 | Low risk |
| VT Redlands Multi-Asset Portfolio | Flexible Investment | GB00BDVK8839 | Low 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):
| Name | Sector | ISIN Code | Risk |
| AXA Global Distribution | Mixed Investment 20-60% Shares | GB0008309063 | Low risk |
| Baillie Gifford Diversified Growth | Targeted Absolute Return | GB00B3FD0Z91 | Low risk |
| BM Brooks Macdonald Defensive Capital | Targeted Absolute Return | GB00B61MR835 | Low risk |
| CFP Castlefield Real Return | Targeted Absolute Return | GB00B12V1482 | Low risk |
| EF Tellsons Endeavour | Mixed Investment 20-60% Shares | GB00BJ391H08 | Low risk |
| Invesco High Yield (UK) | Sterling High Yield | GB00B3RW7649 | Low risk |
| Royal London Global Index Linked | Global Bonds | GB00B772RM82 | Low risk |
| Royal London Sustainable Diversified Trust | Mixed Investment 20-60% Shares | GB00B844WJ68 | Low risk |
| VT Chelsea Managed Monthly Income | Mixed Investment 20-60% Shares | GB00BF0NMS52 | Low risk |
| VT Redlands Multi-Asset Portfolio | Flexible Investment | GB00BDVK8839 | Low risk |
| ASI Global Smaller Companies | Global | GB00B7KVX245 | Medium risk |
| AXA Framlington American Growth | North America | GB00B5LXGG05 | Medium risk |
| Jupiter European | Europe Excluding UK | GB0006664683 | Medium risk |
| M&G Index-Linked Bond | UK Index Linked Gilt | GB0031111478 | Medium risk |
| Premier Miton Worldwide Opportunities | Flexible Investment | GB0031831133 | Medium risk |
| Royal London Global Sustainable Equity | Global | GB00BL6V0581 | Medium risk |
| Royal London Sustainable World Trust | Mixed Investment 40-85% Shares | GB00B882H241 | Medium risk |
| Schroder Global Cities Real Estate | Property Other | GB00B1VPTY75 | Medium risk |
| Stewart Investors Worldw. Lead. Sust. | Global | GB0030978729 | Medium risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | Medium risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resource | GB00B6865B79 | High risk |
| Fidelity Emerging Europe Middle East and Africa | Specialist | GB00B87Z7808 | High risk |
| Fidelity UK Smaller Companies | UK Smaller Companies | GB00B7VNMB18 | High risk |
| Invesco UK Opportunities (UK) | UK All Companies | GB00B1W7HM62 | High risk |
| Jupiter Global Financial Innovation | Financials and Financial Innovation | GB00B551H564 | High risk |
| Liontrust Global Technology | Technology & Telecommunication | GB00BYXZ5N79 | High risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | High risk |
| Liontrust Russia | Specialist | GB00B86WB793 | High risk |
| Marlborough European Multi-Cap | Europe Excluding UK | GB0001719730 | High risk |
| T. Rowe Price Global Technology Equity | Technology & Telecommunication | GB00BD446K01 | 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 |
| ASI UK Smaller Companies | UK Smaller Companies | GB00B7FBH943 | Medium risk |
| Baillie Gifford Multi Asset Growth | Targeted Absolute Return | GB00BY9C5Y31 | Low risk |
| FTF Franklin UK Smaller Companies | UK Smaller Companies | GB00B7FFF708 | High risk |
| Invesco Monthly Income Plus (UK) | Sterling Strategic Bond | GB00B1W7J204 | Low risk |
| Liontrust Sustainable Future Defensive Managed | Mixed Investment 20-60% Shares | GB00BMN90635 | Low risk |
| Marlborough UK Micro Cap Growth | UK Smaller Companies | GB00B02TPH60 | High risk |
| MI Chelverton UK Equity Growth | UK All Companies | GB00BP855B75 | Medium risk |
| Ninety One American Franchise | North America | GB00B1XFJ342 | High risk |
| Premier Miton Diversified Cautious Growth | Mixed Investment 20-60% Shares | GB00BHNZ2P92 | Low risk |
| Royal London Sustainable Managed Growth Trust | Mixed Investment 0-35% Shares | GB00B8H7XS88 | Low risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| VT Downing Monthly Income | UK Equity Income | GB00B61JRG28 | 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 10% (9%)
- Alternatives 18% (18%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 0% (5%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 22% (20%)
- European Equities 7% (6%)
- Chinese Equities 0% (0%)
- Japanese Equities 0% (0%)
- Property 5% (5%)
- UK Equities 11% (19%)
- Gilts 4% (0%)
- Cash 0% (0%)
- Asian / Emerging market equities 9% (7%)
- Other international equities 9% (11%)
- Commodities and Energy 5% (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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