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 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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