80-20 Investor Best of the Best Selection – September 2022 Update

Commentary

Of the 30 funds in August's BOTB, 20 funds have retained their place in September's selection after a very strong monthly performance. The chart below shows the average performance of the BOTB during August (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. Ironically it was the BOTB's lack of exposure to US technology stocks and bonds which contributed to the selection's outperformance as the market eventually began betting that the US Federal Reserve would become more aggressive with its interest rate hikes. The complete opposite to what happened in July. In addition, energy prices rallied along with some commodity prices during August which benefited the BOTB.

The table below shows the top performers in August's BOTB and it's good to see BlackRock Natural Resources Growth & Income included, which features in my own £50k portfolio.

Fund	August % return
TB Guinness Global Energy	10.32
BlackRock Natural Resources Growth & Income	8.94
Barings Global Agriculture	8.42
Stewart Investors Indian Subcontinent Sustainability	7.95
T. Rowe Price US Large Cap Value Equity	3.88
VT Gravis Clean Energy Income	3.61

 

At the other end of the scale, only 7 funds from the 30 in August's BOTB fell in value. The worst-performing funds are shown in the table below, and are almost exclusively bond/gilt funds. August was a tough month for bond funds, especially those with a higher duration risk, as central banks became increasingly hawkish which sent bond yields higher.

Fund	August % return
abrdn Short Duration Global Inflation-Linked Bond	-0.96
AXA Framlington Health	-0.96
Royal London Short Duration Global Index Linked	-0.98
Schroder Global Healthcare	-1.27
Royal London Short Duration Gilts	-2.08

 

This month's selection sees the BOTB's equity exposure remain around 60% and 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. Japanese equities make a reappearance, buoyed by the weaker yen vs dollar exchange rate. Another beneficiary of a strong dollar is BNY Mellon International Bond which is now included in the selection. The exposure to UK, US and European equities remains largely the same, as does the BOTB's exposure to property and 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 20 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.

September'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
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
AXA Framlington Health	Healthcare	GB00BRJZVQ71	High 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
BNY Mellon International Bond	Global Bonds	GB00B7B44R49	Low risk
Fidelity American Special Situations	North America	GB00B89ST706	Medium risk
Fidelity Sustainable Global Equity	Global	GB00B3RDH349	High risk
First Sentier Global Listed Infrastructure	Infrastructure	GB00B24HJL45	High risk
Janus Henderson Inst Overseas Bond	Global Bonds	GB0007673055	Low risk
JOHCM Global Opportunities	Global	GB00BJ5JMC04	Medium risk
Jupiter Asian Income	Asia Pacific Excluding Japan	GB00BZ2YML94	Medium risk
Jupiter Global Value Equity	Global	GB00BF5DRF26	Medium risk
Jupiter Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
M&G Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium risk
Premier Miton Defensive Growth	Targeted Absolute Return	GB00B832BD89	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
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	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
VT AJ Bell Global Growth	Flexible Investment	GB00BD833W40	Medium risk
VT Gravis Clean Energy Income	Infrastructure	GB00BFN4H792	Medium risk

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

Here is September'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
Barclays Multi-Asset Cautious	Mixed Investment 0-35% Shares	GB00BD93Z723	Low risk
BNY Mellon International Bond	Global Bonds	GB00B7B44R49	Low risk
Janus Henderson Inst Overseas Bond	Global Bonds	GB0007673055	Low risk
Jupiter Merian Global Strategic Bond	Sterling Strategic Bond	GB00B1XG7L17	Low risk
M&G Short Dated Corporate Bond	Sterling Corporate Bond	GB0031110397	Low risk
Premier Miton Defensive Growth	Targeted Absolute Return	GB00B832BD89	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
T. Rowe Price Dynamic Global Bond	Targeted Absolute Return	GB00BD0NLR34	Low risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Low risk
abrdn Global Real Estate	Property Other	GB00B0LD3V96	Medium risk
BNY Mellon Global Income	Global Equity Income	GB00B7XK5M25	Medium risk
Fidelity American Special Situations	North America	GB00B89ST706	Medium risk
JOHCM Global Opportunities	Global	GB00BJ5JMC04	Medium risk
Jupiter Asian Income	Asia Pacific Excluding Japan	GB00BZ2YML94	Medium risk
Jupiter Global Value Equity	Global	GB00BF5DRF26	Medium risk
Man GLG Japan Core Alpha	Japan	GB00B3F46Y30	Medium risk
T. Rowe Price US Large Cap Value Equity	North America	GB00BD446M25	Medium risk
VT AJ Bell Global Growth	Flexible Investment	GB00BD833W40	Medium risk
VT Gravis Clean Energy Income	Infrastructure	GB00BFN4H792	Medium risk
AXA Framlington Biotech	Specialist	GB00B784NS11	High risk
AXA Framlington Health	Healthcare	GB00BRJZVQ71	High risk
Barings Global Agriculture	Commodity/Natural Resources	GB00B3B9V927	High risk
BlackRock Natural Resources Growth & Income	Commodity/Natural Resources	GB00B6865B79	High risk
Fidelity Sustainable Global Equity	Global	GB00B3RDH349	High risk
First Sentier Global Listed Infrastructure	Infrastructure	GB00B24HJL45	High risk
Schroder US Mid Cap	North America	GB00B7LDLV43	High risk
Stewart Investors Global Emerging Markets	Specialist	GB0030187438	High risk
Stewart Investors Indian Subcontinent Sustainability	India/Indian Subcontinent	GB00B1FXTG93	High risk
TB Guinness Global Energy	Commodity/Natural Resources	GB00B56FW078	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 Short Duration Global Inflation-Linked Bond	Global Bonds	GB00BP25RD93	Low risk
Fidelity Index US	North America	GB00BJS8SH10	High risk
Fidelity Moneybuilder Dividend	UK Equity Income	GB00B3LNGT95	Medium risk
LF Macquarie Global Infrastructure Securities	Infrastructure	GB00B1W24C09	Medium risk
McInroy & Wood Balanced	Mixed Investment 40-85% Shares	GB00B7RRJ163	Medium risk
Royal London Global Equity Select	Global	GB00BF93W972	High risk
Royal London Short Duration Gilts	UK Gilts	GB00BD050C73	Low risk
Royal London Short Duration Global Index Linked	Global Bonds	GB00BD050F05	Low risk
Schroder Global Healthcare	Global	GB00B76V7Q08	High risk
Troy Asset Management Ltd Trojan Global Income	Global Equity Income	GB00BD82KP33	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% (15%)
• Alternatives 16% (15%) - 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 22% (23%)
• European Equities 5% (4%)
• Chinese Equities 0% (0%)
• Japanese Equities 4% (0%)
• Property 3% (3%)
• UK Equities 8% (9%)
• Gilts 0% (3%)
• Cash 5% (5%)
• Asian / Emerging market equities 7% (5%)
• Other international equities 2% (8%)
• Commodities and Energy 11% (10%)

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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