Commentary
Of the 30 funds in September's BOTB, 16 funds have retained their place in October's selection after another strong monthly performance relative to its benchmarks. The chart below shows the average performance of the BOTB during September (the green 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 blue line). You can see that the BOTB outperformed its benchmark.
The chart also shows how the selection significantly outperformed 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 while the latter tends to be more adventurous. Once again the BOTB outperformed due to its low exposure to UK bonds (in particular gilts) but also its lack of exposure to technology stocks. In addition, it benefited from the collapse in the value of the pound which provided a currency boost to the funds with overseas holdings.
The table below shows the top performers in September's BOTB and it's good to see Janus Henderson Inst Overseas Bond included, which features in my own £50k portfolio.
| Fund | September % return |
| AXA Framlington Biotech | 4.5 |
| Stewart Investors Indian Subcontinent Sustainability | 2.83 |
| T. Rowe Price Dynamic Global Bond | 1.95 |
| AXA Framlington Health | 1.23 |
| Janus Henderson Inst Overseas Bond | 1.03 |
At the other end of the scale the worst-performing funds, shown in the table below, include infrastructure funds, commodities and Asian equities. Assets that tend to underperform when the dollar strengthens.
| Fund | September % return |
| Jupiter Asian Income | -5.6 |
| Man GLG Japan Core Alpha | -5.96 |
| First Sentier Global Listed Infrastructure | -6.68 |
| Barings Global Agriculture | -6.95 |
| VT Gravis Clean Energy Income | -8.26 |
This month's selection sees the BOTB's equity exposure fall slightly from 61% to 59% but with very little change in the asset mix. The asset mix still has no exposure to Chinese equities but has a slightly increased exposure to Asian equities and a reduced exposure to commodities.
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 16 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.
October'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 |
| abrdn Global Real Estate | Property Other | GB00B0LD3V96 | Medium risk |
| Aviva Inv US Equity Income II | North America | GB00BCGD4N78 | Medium risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| AXA Framlington Health | Healthcare | GB00BRJZVQ71 | High risk |
| BNY Mellon International Bond | Global Bonds | GB00B7B44R49 | Low risk |
| First Sentier Global Listed Infrastructure | Infrastructure | GB00B24HJL45 | High risk |
| FP Carmignac Unconstrained Global Bond | Sterling Strategic Bond | GB00BJHPJ035 | Low risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Low risk |
| Janus Henderson Inst Overseas Bond | Global Bonds | GB0007673055 | Low risk |
| JOHCM Global Opportunities | Global | GB00BJ5JMC04 | Medium risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | High risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Medium risk |
| McInroy & Wood Balanced | Mixed Investment 40-85% Shares | GB00B7RRJ163 | Medium risk |
| McInroy & Wood Emerging Markets | Global Emerging Markets | GB00B7SKS407 | Medium risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | High risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| Schroder UK Dynamic Absolute Return | Targeted Absolute Return | GB00B3N74T57 | Low risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | High risk |
| T. Rowe Price Dynamic Global Bond | Targeted Absolute Return | GB00BD0NLR34 | Low risk |
| T. Rowe Price US Large Cap Value Equity | North America | GB00BD446M25 | Medium risk |
| TB Guinness Global Energy | Commodity/Natural Resources | GB00B56FW078 | High risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| Troy Asset Management Ltd Trojan Global Income | Global Equity Income | GB00BD82KP33 | Medium risk |
| UBS MSCI World Minimum Volatility Index | Global | GB00BX9C1N70 | Medium risk |
| VT Johnston Multi-Asset Cautious | Mixed Investment 20-60% Shares | GB00BM952705 | Low risk |
| VT Tyndall North American | North America | GB00BYPZY050 | High risk |
October's Best of the Best Selection - (grouped by risk)
Here is October'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 |
| BNY Mellon International Bond | Global Bonds | GB00B7B44R49 | Low risk |
| FP Carmignac Unconstrained Global Bond | Sterling Strategic Bond | GB00BJHPJ035 | Low risk |
| Invesco Global Targeted Returns (UK) | Targeted Absolute Return | GB00B8CHD050 | Low risk |
| Janus Henderson Inst Overseas Bond | Global Bonds | GB0007673055 | Low risk |
| Jupiter Merian Global Strategic Bond | Sterling Strategic Bond | GB00B1XG7L17 | Low risk |
| Premier Miton Defensive Growth | Targeted Absolute Return | GB00B832BD89 | Low risk |
| Schroder UK Dynamic Absolute Return | Targeted Absolute Return | GB00B3N74T57 | Low risk |
| T. Rowe Price Dynamic Global Bond | Targeted Absolute Return | GB00BD0NLR34 | Low risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Low risk |
| VT Johnston Multi-Asset Cautious | Mixed Investment 20-60% Shares | GB00BM952705 | Low risk |
| abrdn Global Real Estate | Property Other | GB00B0LD3V96 | Medium risk |
| Aviva Inv US Equity Income II | North America | GB00BCGD4N78 | Medium risk |
| JOHCM Global Opportunities | Global | GB00BJ5JMC04 | Medium risk |
| Jupiter Global Value Equity | Global | GB00BF5DRF26 | Medium risk |
| Man GLG Japan Core Alpha | Japan | GB00B3F46Y30 | Medium risk |
| McInroy & Wood Balanced | Mixed Investment 40-85% Shares | GB00B7RRJ163 | Medium risk |
| McInroy & Wood Emerging Markets | Global Emerging Markets | GB00B7SKS407 | Medium risk |
| T. Rowe Price US Large Cap Value Equity | North America | GB00BD446M25 | Medium risk |
| Troy Asset Management Ltd Trojan Global Income | Global Equity Income | GB00BD82KP33 | Medium risk |
| UBS MSCI World Minimum Volatility Index | Global | GB00BX9C1N70 | Medium risk |
| AXA Framlington Biotech | Specialist | GB00B784NS11 | High risk |
| AXA Framlington Health | Healthcare | GB00BRJZVQ71 | High risk |
| First Sentier Global Listed Infrastructure | Infrastructure | GB00B24HJL45 | High risk |
| Liontrust India | India/Indian Subcontinent | GB00B1L6DV51 | High risk |
| MI Thornbridge Global Opportunities | Global | GB00B5TP8W88 | High risk |
| Schroder Global Healthcare | Global | GB00B76V7Q08 | High risk |
| Stewart Investors Indian Subcontinent Sustainability | India/Indian Subcontinent | GB00B1FXTG93 | High risk |
| SVS Sanlam North American Equity | North America | GB0007655698 | High risk |
| TB Guinness Global Energy | Commodity/Natural Resources | GB00B56FW078 | High risk |
| VT Tyndall North American | North America | GB00BYPZY050 | 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 |
| Barclays Multi-Asset Cautious | Mixed Investment 0-35% Shares | GB00BD93Z723 | Low risk |
| Barings Global Agriculture | Commodity/Natural Resources | GB00B3B9V927 | High risk |
| BlackRock Natural Resources Growth & Income | Commodity/Natural Resources | GB00B6865B79 | High risk |
| BNY Mellon Global Income | Global Equity Income | GB00B7XK5M25 | Medium risk |
| Fidelity American Special Situations | North America | GB00B89ST706 | Medium risk |
| Fidelity Sustainable Global Equity | Global | GB00B3RDH349 | High risk |
| Jupiter Asian Income | Asia Pacific Excluding Japan | GB00BZ2YML94 | Medium risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Low risk |
| Royal London GMAP Defensive | Mixed Investment 0-35% Shares | GB00BD8RSJ84 | Low risk |
| Schroder MM Diversity | Mixed Investment 20-60% Shares | GB00B60CZD52 | Low risk |
| Schroder US Mid Cap | North America | GB00B7LDLV43 | High risk |
| Stewart Investors Global Emerging Markets | Specialist | GB0030187438 | High risk |
| VT AJ Bell Global Growth | Flexible Investment | GB00BD833W40 | Medium risk |
| VT Gravis Clean Energy Income | Infrastructure | GB00BFN4H792 | 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 17% (17%)
- Alternatives 18% (16%) - includes absolute return strategies & some bond exposure
- UK Corporate Fixed Interest (i.e UK bonds) 0% (0%)
- Emerging Market Fixed Income 0% (0%)
- North American Equities 23% (22%)
- European Equities 4% (5%)
- Chinese Equities 0% (0%)
- Japanese Equities 4% (4%)
- Property 3% (3%)
- UK Equities 6% (8%)
- Gilts 0% (0%)
- Cash 6% (5%)
- Asian / Emerging market equities 8% (7%)
- Other international equities 7% (2%)
- Commodities and Energy 4% (11%)
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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