Commentary
Of the 30 funds in August's BOTB, 21 funds have retained their place in September's selection, which again is higher than normal and reflects a relatively strong performance during August. The chart below shows the average performance of the BOTB during August (the red 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 green line). You can see that the BOTB outperformed its benchmark, as well the average cautious managed fund (purple line) and the average managed fund with up to 85% equity exposure (grey line).
The top performing funds in August's BOTB are shown below and once again include those funds that typically have exposure to large cap US companies.
| Fund | August 2023 % return |
| Royal London Global Equity | 2.2 |
| T. Rowe Price US Large Cap Growth Equity | 1.63 |
| FTF Franklin US Opportunities | 1.32 |
| FP Carmignac Global Equity Compounders | 1.29 |
| FTF Templeton Global Leaders | 1.07 |
At the other end of the scale, European equities, emerging market equities and technology focused funds struggled - dragged lower by Chinese economic woes and a stronger US dollar.
| Fund | August 2023 % return |
| AXA Framlington Global Technology | -1.89 |
| Invesco Emerging Markets ex China (UK) | -1.99 |
| CT European Select | -2.51 |
| Man GLG Continental European Growth | -3.38 |
| Liontrust Global Technology | -4.19 |
Given the strong relative performance during August it is perhaps unsurprising that so many funds retained their place in the BOTB once again. It is partly down to strong performance of key funds but also a lack of opportunities elsewhere. In terms of asset mix (see the bottom of the article for the full breakdown) things remain mostly unchanged with the UK equities again being reduced, now to its lowest level for some time. However, this month does see a small increase in exposure to Japanese equities and a new allocation to emerging Asian equities. The selection's overall equity exposure has increased marginally from 59% from 62%, while the portfolio's bond exposure has reduced slightly. At the end of this article, you can find information on how the 80-20 Investor selection continues to outperform professional fund managers and the market since its launch nine years ago
Below I list this month's selection in full with the 21 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 High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| Artemis SmartGARP European Equity | Europe Excluding UK | GB00B2PLJD73 | Higher risk |
| AXA Framlington American Growth | North America | GB00B5LXGG05 | Medium risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| AXA Global High Yield | Sterling High Yield | GB00B29NGF01 | Lower risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Lower risk |
| AXA US Short Duration High Yield Bond | Global Bonds | GB00B59VLT43 | Lower risk |
| CT European Select | Europe Excluding UK | GB0001529345 | Higher risk |
| Fidelity American | North America | GB00B8GPC429 | Medium risk |
| Fidelity Japan | Japan | GB00B882N041 | Medium risk |
| FP Carmignac Global Equity Compounders | Global | GB00BMGLBK75 | Medium risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| Invesco Emerging Markets ex China | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Invesco Global Targeted Returns | Targeted Absolute Return | GB00B8CHD050 | Lower risk |
| Lazard Emerging Markets | Global Emerging Markets | GB00B24F1G74 | Higher risk |
| LF Morant Wright Nippon Yield | Japan | GB00B42MKS95 | Medium risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Lower risk |
| Man GLG Continental European Growth | Europe Excluding UK | GB00B0119487 | Higher risk |
| Man GLG Sterling Corporate Bond | Sterling Corporate Bond | GB00BNLYQX62 | Lower risk |
| MI Metropolis Value | Global | GB00B3LDLX86 | Medium risk |
| Morgan Stanley Sustainable Fixed Income Opportunities Fund | Global Bonds | GB00BNKVP424 | Lower risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | Medium risk |
| Royal London International Government Bond | Global Bonds | GB00B45XHL18 | Lower risk |
| Royal London US Growth Trust | North America | GB0030038359 | Medium risk |
| Schroder Asian Discovery | Specialist | GB00B5ZS9V71 | Higher risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Higher risk |
| TB Guinness Global Equity Income | Global Equity Income | GB00BNGFN776 | Medium risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Lower risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
September 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 |
| abrdn High Yield Bond | Sterling High Yield | GB00B79RR984 | Lower risk |
| AXA Global High Yield | Sterling High Yield | GB00B29NGF01 | Lower risk |
| AXA Global Short Duration Bonds | Sterling Strategic Bond | GB00BDFZQV30 | Lower risk |
| AXA US Short Duration High Yield Bond | Global Bonds | GB00B59VLT43 | Lower risk |
| Invesco Global Targeted Returns | Targeted Absolute Return | GB00B8CHD050 | Lower risk |
| M&G Short Dated Corporate Bond | Sterling Corporate Bond | GB0031110397 | Lower risk |
| Man GLG Sterling Corporate Bond | Sterling Corporate Bond | GB00BNLYQX62 | Lower risk |
| Morgan Stanley Sustainable Fixed Income Opportunities Fund | Global Bonds | GB00BNKVP424 | Lower risk |
| Royal London International Government Bond | Global Bonds | GB00B45XHL18 | Lower risk |
| Thesis TM Tellworth UK Select | Targeted Absolute Return | GB00BNY7YM73 | Lower risk |
| AXA Framlington American Growth | North America | GB00B5LXGG05 | Medium risk |
| Fidelity American | North America | GB00B8GPC429 | Medium risk |
| Fidelity Japan | Japan | GB00B882N041 | Medium risk |
| FP Carmignac Global Equity Compounders | Global | GB00BMGLBK75 | Medium risk |
| LF Morant Wright Nippon Yield | Japan | GB00B42MKS95 | Medium risk |
| MI Metropolis Value | Global | GB00B3LDLX86 | Medium risk |
| Royal London Global Equity Select | Global | GB00BF93W972 | Medium risk |
| Royal London US Growth Trust | North America | GB0030038359 | Medium risk |
| TB Guinness Global Equity Income | Global Equity Income | GB00BNGFN776 | Medium risk |
| Troy Asset Management Ltd Trojan Global Equity | Global | GB00B0ZJ5S47 | Medium risk |
| Artemis SmartGARP European Equity | Europe Excluding UK | GB00B2PLJD73 | Higher risk |
| AXA Framlington Global Technology | Technology & Technology Innovation | GB00B4W52V57 | Higher risk |
| CT European Select | Europe Excluding UK | GB0001529345 | Higher risk |
| FTF Franklin US Opportunities | North America | GB00B7KCG406 | Higher risk |
| Invesco Emerging Markets ex China | Global Emerging Markets | GB00B3RW8X82 | Higher risk |
| Lazard Emerging Markets | Global Emerging Markets | GB00B24F1G74 | Higher risk |
| Liontrust Global Technology | Technology & Technology Innovation | GB00BYXZ5N79 | Higher risk |
| Man GLG Continental European Growth | Europe Excluding UK | GB00B0119487 | Higher risk |
| Schroder Asian Discovery | Specialist | GB00B5ZS9V71 | Higher risk |
| T. Rowe Price US Large Cap Growth Equity | North America | GB00BD5FHW12 | Higher 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 |
| Baillie Gifford Emerging Markets Bond | Global EM Bonds - Local Currency | GB00B39RMP13 | Lower risk |
| BNY Mellon Global Dynamic Bond | Targeted Absolute Return | GB00B8K10865 | Lower risk |
| CT UK Growth and Income | UK All Companies | GB0001529675 | Higher risk |
| FTF Templeton Global Leaders | Global | GB00B7K6LK38 | Medium risk |
| IFSL Marlborough High Yield Fixed Interest | Sterling High Yield | GB00B03TN153 | Lower risk |
| Invesco Global Equity Income | Global Equity Income | GB00B3FD1Z66 | Medium risk |
| Liontrust Global Alpha | Flexible Investment | GB0031190555 | Medium risk |
| Ninety One UK Special Situations | UK All Companies | GB00B1XFJS91 | Higher risk |
| Schroder Strategic Credit | Sterling Strategic Bond | GB00BJZ2ZC09 | Lower 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 21% (23%)
- UK Fixed Interest 0% (3%)
- Alternatives 12% (11%) - includes absolute return strategies
- North American Equities 27% (29%)
- Asian Emerging Market Equities 6% (0%)
- European Equities 8% (10%)
- Japanese Equities 6% (4%)
- UK Equities 5% (9%)
- Cash 5% (4%)
- China Equities 0% (0%)
- Other international equities 10% (7%)
- Commodities and Energy 0% (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 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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