The background to my portfolio
Back in March 2015 I decided to invest £50,000 of my own money using 80-20 Investor. The purpose was twofold, firstly to show how you can use 80-20 Investor to invest and outperform the market with only a few minutes effort every now and then. Secondly, no other investment commentator, journalist or research provider invests their own money for fear of failing. This is a sorry state of affairs and is precisely why I committed to openly running my own portfolio for 80-20 Investor members to see.
Since then I have periodically changed my portfolio using the fund suggestions provided by the 80-20 Investor algorithm and associated research. I always disclose the changes at the time they are made.
Performance update
As is usual in my portfolio reviews, the chart below shows how my portfolio has outperformed since I started the challenge in March 2015, which is over seven years ago. The green line is the performance of my portfolio while the red line is the benchmark showing the average return achieved by professional fund managers given the same asset mix. To accurately calculate this I have used the average return for each sector in which my portfolio invested. The blue line shows what the average multi-asset fund with comparable equity content achieved. In other words, the red line would show the extra performance added by just the asset mix of my portfolio (where I was invested i.e European equities etc) over picking a typical multi-asset fund (the blue line). While the green line (which is my actual performance) shows the impact of being in the right funds at the right time, as identified by the 80-20 Investor algorithm.
As the chart above shows, my portfolio continues to outperform its benchmarks over the long term and the chart below shows its performance since my last update in January.
Taking a closer look at the funds within my portfolio, the table below shows the individual performance of each holding in my portfolio since my last review on 13th January, with global equities faring best. It's good to see new addition TB Saracen Global Income & Growth performing strongly. Meanwhile commodities (including gold) gave back some of their gains from the first half of January, partly a result of the recent rally in the value of the US dollar. Unfortunately Premier Miton Defensive Growth once again proved a drag on the portfolio as it did last month.
|
Fund |
Performance since last review on 13th January |
| M&G Global Dividend | 3.21 |
| Jupiter Global Value Equity | 2.71 |
| TB Saracen Global Income & Growth | 2.69 |
| Fidelity American Special Situations | 2.25 |
| FSSA Asia Focus | 2.05 |
| Jupiter Merlin Balanced Portfolio | 1.82 |
| TB Evenlode Income | 1.68 |
| BNY Mellon Global Income | 1.16 |
| Thesis TM Tellworth UK Select | 0.24 |
| Cash | 0.19 |
| Janus Henderson Inst Overseas Bond | 0.13 |
| iShares Physical Gold ETC | -0.25 |
| BlackRock Natural Resources Growth & Income | -0.87 |
| Premier Miton Defensive Growth | -1.03 |
As usual, the table below shows which funds within my portfolio are in the current BOTB or BFBS tables and which are not. Those funds in blue are still in the BOTB while those in orange are not in the BOTB but remain in the BFBS list. Meanwhile, any funds in red have dropped out of both shortlists.
| Fund | Allocation | Risk | Sector | ISIN |
| BlackRock Natural Resources Growth & Income | 4.5 | High | Commodity/Natural Resource | GB00B6865B79 |
| BNY Mellon Global Income | 6.5 | Medium | Global Equity Income |
GB00B7XK5M25
|
| Cash | 7 | Low | ||
| Fidelity American Special Situations | 8.5 | Medium | North America | GB00B89ST706 |
| FSSA Asia Focus | 5.5 | High | Asia Pacific Excluding Japan |
GB00BWNGXJ86
|
| iShares Physical Gold ETC | 5 | Medium | Commodity & Energy ETF | IE00B4ND3602 |
| Janus Henderson Inst Overseas Bond | 9 | Low | Global Bonds | GB0007673055 |
| TB Saracen Global Income & Growth | 5.5 | Medium | Global Equity Income | GB00B5B35X02 |
| Jupiter Global Value Equity | 10 | Medium | Global | GB00BF5DRF26 |
| M&G Global Dividend | 7 | Medium | Global Equity Income | GB00B46J9127 |
| Jupiter Merlin Balanced Portfolio | 12 | Medium | Mixed Investment 40-85% Shares | GB0031845141 |
| Premier Miton Defensive Growth | 9 | Low | Targeted Absolute Return | GB00B832BD89 |
| TB Evenlode Income | 5 | Medium | UK All Companies | GB00BD0B7D55 |
| Thesis TM Tellworth UK Select | 5.5 | Low | Targeted Absolute Return | GB00BNY7YM73 |
You can see that four funds (highlighted in red) are not in either the BOTB or the BFBS tables. Those funds are:
- Jupiter Merlin Balanced Portfolio
- Premier Miton Defensive Growth
- TB Evenlode Income
- Janus Henderson Inst Overseas Bond
All of these funds have been in the BOTB or the BFBS as recently as last month. The only exception is Premier Miton Defensive Growth which has not featured in either list since November. It was already earmarked for removal in my portfolio update last month but was given a stay of execution due to the number of switches I was making at the time. As the chart below shows, the fund has gone nowhere over the last few months, at a time when bonds have started to produce a positive return.
In fact, the underperformance versus its peer group has increased since my last portfolio review. So I plan to remove the fund entirely from my portfolio, replacing it with a bond fund from the BOTB in order to increase my bond exposure more in line with that of the BOTB. My portfolio has been underweight in bonds since the early months of 2022, which has been to its advantage. In recent months there have been signs of life in bond markets which has been reflected in the performance of bond funds as a whole. This could prove a false dawn, but given the BOTB has increased its exposure to bonds in recent months to positive effect I plan to follow suit. So I plan to replace Premier Miton Defensive Growth with a bond fund that has been a regular feature of the BOTB in recent months, namely abrdn High Yield Bond. The fund sits in the lower risk portion of the BOTB but its risk profile will be higher than that of the Premier Miton Defensive Growth fund it replaces. High yield bonds have a higher correlation to equity market movements than vanilla bond funds and most targeted absolute return funds.
Moving onto Janus Henderson Inst Overseas Bond, this fund has been flitting in and out of the BFBS tables on a weekly basis for some time, with its recent performance being hampered by a collapse in the value of the US dollar versus the pound since the autumn (shown below versus its peer group average). A rebound in the US dollar would propel the fund higher once again but I will stick with my process and change the fund, given that it has been clinging on to its place in my portfolio for a while now. While its performance since I originally held it (shown below) has been very strong, especially given the carnage in bond markets during 2022, this has waned and I think it's time to try an alternative.
I have opted for a like for like switch, meaning that I've chosen another global bond fund. This not only maintains the overall balanced risk profile of my portfolio but it also means that my global bond exposure increases significantly for the first time since early 2022. Having said that, it remains comparatively low, versus professionally managed multi-asset funds, at around 17% of total assets.
The fund I am choosing to replace it with is Invesco Global Bond (UK). The BOTB doesn't currently have an alternative global bond fund within it so I instead used the BFBS sector tables to choose an alternative from the same sector. I chose Invesco Global Bond (UK) due to its combination of low max weekly fall over the last 6 months and its recent performance.
I plan to keep the other funds coloured red (namely Jupiter Merlin Balanced Portfolio and TB Evenlode Income) in my portfolio for now as their performance since my last review has been ok. They are also recent additions to the portfolio so they have not yet had sufficient time to impact my portfolio or for me to make a judgement on their future positions.
In summary, the planned transactions only impact the lower risk portion of my portfolio, as the equity portion is performing adequately at present. However, I will look to review this in more detail, particularly my exposure to Chinese and Japanese equities, in the near future.
Fund switch
- 100% out of Premier Miton Defensive Growth and 100% into abrdn High Yield Bond
- 100% out of Janus Henderson Inst Overseas Bond and 100% in Invesco Global Bond (UK)
The fund changes this month impact almost 18% of my portfolio.
My portfolio
My portfolio now looks like this:
| Fund | Allocation | Risk | Sector | ISIN |
| BlackRock Natural Resources Growth & Income | 4.5 | High | Commodity/Natural Resource | GB00B6865B79 |
| BNY Mellon Global Income | 6.5 | Medium | Global Equity Income |
GB00B7XK5M25
|
| Cash | 7 | Low | ||
| Fidelity American Special Situations | 8.5 | Medium | North America | GB00B89ST706 |
| FSSA Asia Focus | 5.5 | High | Asia Pacific Excluding Japan |
GB00BWNGXJ86
|
| iShares Physical Gold ETC | 5 | Medium | Commodity & Energy ETF | IE00B4ND3602 |
| Invesco Global Bond (UK) | 9 | Low | Global Bonds | GB00B3RW7B97 |
| TB Saracen Global Income & Growth | 5.5 | Medium | Global Equity Income | GB00B5B35X02 |
| Jupiter Global Value Equity | 10 | Medium | Global | GB00BF5DRF26 |
| M&G Global Dividend | 7 | Medium | Global Equity Income | GB00B46J9127 |
| Jupiter Merlin Balanced Portfolio | 12 | Medium | Mixed Investment 40-85% Shares | GB0031845141 |
| abrdn High Yield Bond | 9 | Low | Sterling High Yield | GB00B79RR984 |
| TB Evenlode Income | 5 | Medium | UK All Companies | GB00BD0B7D55 |
| Thesis TM Tellworth UK Select | 5.5 | Low | Targeted Absolute Return | GB00BNY7YM73 |
My Portfolio asset mix
My portfolio asset mix has around 61% exposure to equities. Last month's figures are shown in brackets.
-
- UK Equities 17% (17%)
- North American Equities 14% (14%)
- Asian/Emerging Market Equities 7% (7%)
- Japanese Equities 0% (0%)
- European Equities 9% (9%)
- Chinese equities 0% (0%)
- Other equity 11% (11%)
- Commodities and energy 8% (8%)
- UK Fixed Interest 0% (0%)
- Global Fixed Interest 17% (11%)
- Cash 7% (7%)
- Alternative Investment Strategies 10% (16%)
- Property 0% (0%)
Damien's higher risk and lower risk portfolios
Using the logic described in my post: Update to Damien’s alternative risk portfolios I created hypothetical higher and lower risk versions of my portfolio below:
Lower risk
| Fund | Allocation % |
| BNY Mellon Global Income | 7 |
| Cash | 8 |
| Fidelity American Special Situations | 9 |
| iShares Physical Gold ETC | 6 |
| Invesco Global Bond (UK) | 10 |
| TB Saracen Global Income & Growth | 6 |
| Jupiter Global Value Equity | 11 |
| M&G Global Dividend | 8 |
| Jupiter Merlin Balanced Portfolio | 13 |
| abrdn High Yield Bond | 10 |
| TB Evenlode Income | 6 |
| Thesis TM Tellworth UK Select | 6 |
Higher risk
| Fund | Allocation % |
| BlackRock Natural Resources Growth & Income | 7 |
| BNY Mellon Global Income | 10 |
| Fidelity American Special Situations | 12 |
| FSSA Asia Focus | 8 |
| iShares Physical Gold ETC | 7 |
| TB Saracen Global Income & Growth | 8 |
| Jupiter Global Value Equity | 14 |
| M&G Global Dividend | 10 |
| Jupiter Merlin Balanced Portfolio | 17 |
| TB Evenlode Income | 7 |
