80-20 Investor Best of the Best Selection – September 2024 Update

Commentary

Of the 30 funds in August's BOTB selection 20 funds have retained their place after what was a difficult month for stock markets, particularly in Japan and in the US. Ultimately the BOTB finished in line with its benchmark but lagged the average professionally managed multi-asset fund. It suggests that the asset mix hindered the BOTB's performance. The chart below shows how all three slumped in the first few days of August, after investors became concerned over the outlook for US economic growth, before rebounding aggressively.

The chart above only looks at the average across all of the funds within the BOTB. The top-performing funds in August's BOTB are highlighted in the table below and it is comprised solely of the lower risk funds from the selection. This is unsurprising given investors' level of risk aversion at the start of August. Also, bonds tend to perform well when recession fears are driving investors' investment decisions.

Fund	August 2024 % return
L&G Strategic Bond	2.28
Fidelity Global Dividend	2.14
Schroder High Yield Opportunities	1.68
Thesis TM Tellworth UK Select	1.42
Man GLG High Yield Opportunities	1.26

At the other end of the scale, the biggest losers were generally the higher risk funds within the selection, especially those with exposure to US tech stocks, emerging markets and of course Japanese stocks. Japanese stocks had a particularly tough month as an unexpected interest rate rise by the Bank of Japan caused the yen to strengthen against the US dollar. Unsurprisingly, 4 out of the 5 have lost their place in September's BOTB.

Fund	August 2024 % return
Artemis Global Income	-1.11
Allianz Emerging Markets Equity	-1.59
Invesco Global Smaller Companies (UK)	-1.94
Liontrust India	-3.07
WS Morant Wright Nippon Yield	-3.73

In terms of September's asset mix we see a further reduction in US equity exposure (falling from 16% to 11%). That means that the BOTB's exposure to US equities has more than halved in the last two months. UK equities still remain the largest component of the BOTB. The BOTB's full asset mix is shown later in this article. Overall the total equity exposure is now 66%, down from 68%,

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 High Yield Bond	Sterling High Yield	GB00B79RR984	Lower risk
Artemis Global Income	Global Equity Income	GB00B5N99561	Medium risk
Artemis Monthly Distribution	Mixed Investment 20-60% Shares	GB00B6TK3R06	Lower risk
Artemis SmartGARP European Equity	Europe Excluding UK	GB00B2PLJD73	Medium risk
Artemis UK Smaller Companies	UK Smaller Companies	GB00B2PLJL57	Higher risk
AXA Managed Income	Sterling Strategic Bond	GB00B7H1PG56	Lower risk
CT High Yield Bond	Sterling High Yield	GB0008371014	Lower risk
CT Monthly Extra Income	Mixed Investment 40-85% Shares	GB0008370826	Medium risk
Fidelity Global Dividend	Global Equity Income	GB00B7778087	Medium risk
Fidelity Special Situations	UK All Companies	GB00B88V3X40	Higher risk
FSSA Indian Subcontinent All-Cap	India/Indian Subcontinent	GB00BDG1BM66	Higher risk
Invesco High Yield (UK)	Sterling High Yield	GB00B3RW7649	Lower risk
Invesco Japanese Equity Advantage (UK)	Japan	GB00B3RS8478	Medium risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
Jupiter Asian Income	Asia Pacific Excluding Japan	GB00BZ2YML94	Higher risk
Jupiter India	India/Indian Subcontinent	GB00B2NHJ040	Higher risk
L&G Asia Pacific Equity Income	Asia Pacific Excluding Japan	GB00B409KQ03	Medium risk
L&G Global 100 Index Trust	Global	GB00B0CNH056	Higher risk
L&G Global Technology Index Trust	Technology & Technology Innovation	GB00B0CNH163	Higher risk
L&G Strategic Bond	Sterling Strategic Bond	GB00B1TWMW95	Lower risk
L&G UK Equity Income	UK Equity Income	GB00B6HBD759	Medium risk
M&G Global Dividend	Global Equity Income	GB00B46J9127	Medium risk
Man GLG Absolute Value	Targeted Absolute Return	GB00BF1X8084	Lower risk
Man GLG High Yield Opportunities	Sterling High Yield	GB00BJK3W057	Lower risk
Ninety One Asia Pacific Franchise	Asia Pacific Excluding Japan	GB00B1XFJD49	Higher risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	Higher risk
Schroder High Yield Opportunities	Sterling High Yield	GB00B83RDY83	Lower risk
Schroder UK Smaller Companies	UK Smaller Companies	GB00B76V7Z98	Higher risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Lower risk
Thornbridge Thornbridge Global Opportunities	Global	GB00B5TP8W88	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
abrdn High Yield Bond	Sterling High Yield	GB00B79RR984	Lower risk
Artemis Monthly Distribution	Mixed Investment 20-60% Shares	GB00B6TK3R06	Lower risk
AXA Managed Income	Sterling Strategic Bond	GB00B7H1PG56	Lower risk
CT High Yield Bond	Sterling High Yield	GB0008371014	Lower risk
Invesco High Yield (UK)	Sterling High Yield	GB00B3RW7649	Lower risk
L&G Strategic Bond	Sterling Strategic Bond	GB00B1TWMW95	Lower risk
Man GLG Absolute Value	Targeted Absolute Return	GB00BF1X8084	Lower risk
Man GLG High Yield Opportunities	Sterling High Yield	GB00BJK3W057	Lower risk
Schroder High Yield Opportunities	Sterling High Yield	GB00B83RDY83	Lower risk
Thesis TM Tellworth UK Select	Targeted Absolute Return	GB00BNY7YM73	Lower risk
Artemis Global Income	Global Equity Income	GB00B5N99561	Medium risk
Artemis SmartGARP European Equity	Europe Excluding UK	GB00B2PLJD73	Medium risk
CT Monthly Extra Income	Mixed Investment 40-85% Shares	GB0008370826	Medium risk
Fidelity Global Dividend	Global Equity Income	GB00B7778087	Medium risk
Invesco Japanese Equity Advantage (UK)	Japan	GB00B3RS8478	Medium risk
Invesco UK Opportunities (UK)	UK All Companies	GB00B1W7HM62	Medium risk
L&G Asia Pacific Equity Income	Asia Pacific Excluding Japan	GB00B409KQ03	Medium risk
L&G UK Equity Income	UK Equity Income	GB00B6HBD759	Medium risk
M&G Global Dividend	Global Equity Income	GB00B46J9127	Medium risk
Thornbridge Thornbridge Global Opportunities	Global	GB00B5TP8W88	Medium risk
Artemis UK Smaller Companies	UK Smaller Companies	GB00B2PLJL57	Higher risk
Fidelity Special Situations	UK All Companies	GB00B88V3X40	Higher risk
FSSA Indian Subcontinent All-Cap	India/Indian Subcontinent	GB00BDG1BM66	Higher risk
Jupiter Asian Income	Asia Pacific Excluding Japan	GB00BZ2YML94	Higher risk
Jupiter India	India/Indian Subcontinent	GB00B2NHJ040	Higher risk
L&G Global 100 Index Trust	Global	GB00B0CNH056	Higher risk
L&G Global Technology Index Trust	Technology & Technology Innovation	GB00B0CNH163	Higher risk
Ninety One Asia Pacific Franchise	Asia Pacific Excluding Japan	GB00B1XFJD49	Higher risk
Schroder European Recovery	Europe Excluding UK	GB0007221889	Higher risk
Schroder UK Smaller Companies	UK Smaller Companies	GB00B76V7Z98	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
Allianz Emerging Markets Equity	Global Emerging Markets	GB00B0WDH832	Medium risk
Artemis UK Select	UK All Companies	GB00B2PLJG05	Higher risk
Invesco Global Smaller Companies (UK)	Global	GB00B3RS8K36	Higher risk
Liontrust India	India/Indian Subcontinent	GB00B1L6DV51	Higher risk
Ninety One Global Strategic Equity	Global	GB00B1XFJ672	Medium risk
Ninety One UK Special Situations	UK All Companies	GB00B1XFJS91	Higher risk
Schroder Strategic Credit	Sterling Strategic Bond	GB00BJZ2ZC09	Lower risk
Schroder Tellworth UK Dynamic Absolute Return	Targeted Absolute Return	GB00B3N74T57	Lower risk
UBS S&P 500 Index	North America	GB00BMN91T34	Medium risk
WS Morant Wright Nippon Yield	Japan	GB00B42MKS95	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 20% (16%)
• UK Fixed Interest 4% (6%)
• Alternatives 10% (10%) - includes absolute return strategies
• North American Equities 11% (16%)
• Emerging Market Equities 6% (9%)
• Asian Equities 9% (6%)
• European Equities 11% (8%)
• Japanese Equities 5% (5%)
• UK Equities 24% (24%)
• Cash 0% (0%)
• China Equities 0% (0%)
• Property Equities 0% (0%)
• Other International Equities 0% (0%)
• 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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