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. 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 last 8 years. My portfolio marginally lagged its benchmarks in a month when investment returns were relatively muted. Despite a market sell-off as we approached the end of May, the subsequent rebound meant investors were roughly back where they started.
The table below shows the individual performance of each fund in my portfolio since the 12th May (when I carried out my last review). The standout performers were Invesco Asian Equity Income (UK) and M&G Global Dividend. Somewhat disappointingly, new additions Fundsmith Equity and IFSL Marlborough Extra Income have struggled since they were included in my portfolio, but it's still early days.
|
Fund |
Performance % since last review on 12th May |
| Invesco Asian Equity Income (UK) | 2.67 |
| M&G Global Dividend | 1.07 |
| TB Saracen Global Income & Growth | 0.87 |
| Thesis TM Tellworth UK Select | 0.72 |
| BNY Mellon Global Income | 0.49 |
| abrdn High Yield Bond | 0.3 |
| CT European Select | 0.01 |
| AXA Framlington UK Equity Income | -0.51 |
| Jupiter Merlin Balanced Portfolio | -0.64 |
| Fundsmith Equity | -1.25 |
| Invesco Global Bond (UK) | -1.36 |
| IFSL Marlborough Extra Income | -2.19 |
| iShares Physical Gold | -2.62 |
Before I get into any fund changes I will make this month, 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 |
| abrdn High Yield Bond | 12 | Low | Sterling High Yield | GB00B79RR984 |
| AXA Framlington UK Equity Income | 5 | Medium | UK Equity Income | GB00B7KBNV36 |
| BNY Mellon Global Income | 6.5 | Medium | Global Equity Income | GB00B7XK5M25 |
| Cash | 7 | Low | ||
| CT European Select | 8.5 | High | Europe Excluding UK | GB0001529345 |
| Fundsmith Equity | 10 | Medium | Global | GB00B4Q5X527 |
| IFSL Marlborough Extra Income | 6.5 | Medium | Mixed Investment 40-85% Shares | GB0005662894 |
| Invesco Asian Equity Income (UK) | 5 | High | Asia Pacific Excluding Japan | GB00B4JR4R48 |
| Invesco Global Bond (UK) | 6 | Low | Global Bonds | GB00B3RW7B97 |
| iShares Physical Gold ETC | 5 | Medium | Commodity & Energy ETF | IE00B4ND3602 |
| Jupiter Merlin Balanced Portfolio | 6.5 | Medium | Mixed Investment 40-85% Shares | GB0031845141 |
| M&G Global Dividend | 7 | Medium | Global Equity Income | GB00B46J9127 |
| TB Saracen Global Income & Growth | 9.5 | Medium | Global Equity Income | GB00B5B35X02 |
| Thesis TM Tellworth UK Select | 5.5 | Low | Targeted Absolute Return | GB00BNY7YM73 |
The following funds have fallen out of the BOTB and BFBS tables and are coloured in red.
- Jupiter Merlin Balanced Portfolio
- M&G Global Dividend
- TB Saracen Global Income & Growth
- IFSL Marlborough Extra Income
- BNY Mellon Global Income
- Invesco Global Bond (UK)
Three of them, namely BNY Mellon Global Income, Invesco Global Bond (UK) and Jupiter Merlin Balanced Portfolio had already fallen out of the BOTB last month. In fact, following my last review I began dripping out of Invesco Global Bond (UK) and Jupiter Merlin Balanced Portfolio. Both are still among the recent weakest performers (as shown by the earlier table) within my portfolio so I will finally remove them this time around.
IFSL Marlborough Extra Income was the fund into which I switched the proceeds from Jupiter Merlin Balanced Portfolio last time. While it has only been in my portfolio for a very short period of time its performance has been disappointing so I will pause moving the Jupiter proceeds into it and opt for an alternative. That is not to say that I will remove the IFSL Marlborough Extra Income from my portfolio because it is far too early to make a call on whether it deserves to remain in my portfolio or not.
Instead I will move the proceeds from the sale of my remaining holding in Jupiter Merlin Balanced Portfolio into BNY Mellon Multi-Asset Balanced which is a fund from the same sector which is in the latest BOTB.
I will also finally replace Invesco Global Bond (UK) which has struggled in 2023 versus its peer group, as shown below. So far, my decision last month to move part of my allocation from the Invesco fund into abrdn High Yield Bond has proved profitable (see the first table above).
However, I don't want to move the remainder of my Invesco holding into the abrdn fund as the latter would end up accounting for around 18% of my portfolio, which is too high. So instead I plan to put the proceeds into an alternative fund, from the latest BOTB, in order to maintain my portfolio's allocation to bonds. As such I plan to invest the proceeds into BNY Mellon Global Dynamic Bond, which is technically from the Targeted Absolute Return sector but it does have exposure to bonds.
I also plan to switch out of my holding BNY Mellon Global Income as it was already on my watchlist from last month. Last time it was given a stay of execution because it had remained among the top performing equity funds and was in the BOTB as recently as April. You can see from the performance table earlier that it has performed admirably over the last month, versus the other funds in my portfolio. However, on a relative basis it has still lagged its peer group over the medium term and never fully recovered from the impact of the banking crisis in March. As such my choice is to make a like for like switch into TB Evenlode Global Income which is a fund from the same category that is in this month's BOTB but has also been a regular in the BOTB.
The final switch I am going to make is one based on asset mix. Over recent months Japanese equities have become a small core holding in the BFBS at the expense of Asian equities. As such I plan to mirror this by switching out of Invesco Asian Equity Income (UK) and into a Japanese equity fund. It's been quite a while since my portfolio has had exposure to Japanese equities. My chosen fund is Fidelity Index Japan. This fund is from the BFBS, rather than the BOTB and my reasoning is that its volatility is lower, evidenced by its max weekly fall figures, as well as its overall cost.
The only other funds within my portfolio which have fallen out of the BOTB and BFBS tables, which I haven't mentioned, are M&G Global Dividend and TB Saracen Global Income & Growth. Both of these were among the top performers in my portfolio over the last month and were in the BFBS as recently as May. As the performance of my portfolio is still strong I am loathed to make more changes than those I've already stated as they already account for around 26% of my portfolio.
As an aside it is interesting to see Thesis TM Tellworth UK Select return to the BOTB after its recent rebound. It turns out my call last month to keep it in my portfolio was the right one.
Fund switches
- 100% out of BNY Mellon Global Income and 100% into TB Evenlode Global Income
- 100% out of Jupiter Merlin Balanced Portfolio and 100% into BNY Mellon Multi-Asset Balanced
- 100% out of Invesco Global Bond (UK) and 100% into BNY Mellon Global Dynamic Bond
- 100% out of Invesco Asian Equity Income (UK) and 100% into Fidelity Index Japan
The fund changes keep the number of holdings within my portfolio the same. The switches also slightly increase my portfolio's equity exposure to 64% and alters my asset mix so that they are more in line with that of the BOTB.
My portfolio
My portfolio now looks like this:
| Fund | Allocation | Risk | Sector | ISIN |
| abrdn High Yield Bond | 12 | Low | Sterling High Yield | GB00B79RR984 |
| AXA Framlington UK Equity Income | 5 | Medium | UK Equity Income | GB00B7KBNV36 |
| BNY Mellon Global Dynamic Bond | 6 | Low | Targeted Absolute Return | GB00B8K10865 |
| BNY Mellon Multi-Asset Balanced | 6.5 | Medium | Mixed Investment 40-85% Shares | GB00B8K9JZ06 |
| Cash | 7 | Low | ||
| CT European Select | 8.5 | High | Europe Excluding UK | GB0001529345 |
| Fidelity Index Japan | 5 | Medium | Japan | GB00BHZK8872 |
| Fundsmith Equity | 10 | Medium | Global | GB00B4Q5X527 |
| IFSL Marlborough Extra Income | 6.5 | Medium | Mixed Investment 40-85% Shares | GB0005662894 |
| iShares Physical Gold ETC | 5 | Medium | Commodity & Energy ETF | IE00B4ND3602 |
| M&G Global Dividend | 7 | Medium | Global Equity Income | GB00B46J9127 |
| TB Evenlode Global Income | 6.5 | Medium | Global Equity Income | GB00BF1QMV61 |
| TB Saracen Global Income & Growth | 9.5 | Medium | Global Equity Income | GB00B5B35X02 |
| Thesis TM Tellworth UK Select | 5.5 | Low | Targeted Absolute Return | GB00BNY7YM73 |
My Portfolio asset mix
My portfolio asset mix has around 64% exposure to equities. Last month's figures are shown in brackets.
-
- UK Equities 20% (19%)
- North American Equities 18% (17%)
- Asian/Emerging Market Equities 0% (4%)
- Japanese Equities 6% (0%)
- European Equities 20% (19%)
- Chinese equities 0% (0%)
- Other equity 0% (3%)
- Commodities and energy 5% (5%)
- UK Fixed Interest 3% (0%)
- Global Fixed Interest 17% (17%)
- Cash 8% (7%)
- Alternative Investment Strategies 3% (9%)
- 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 % |
| abrdn High Yield Bond | 14 |
| AXA Framlington UK Equity Income | 5 |
| BNY Mellon Global Dynamic Bond | 7 |
| BNY Mellon Multi-Asset Balanced | 7 |
| Cash | 8 |
| Fidelity Index Japan | 5 |
| Fundsmith Equity | 10 |
| IFSL Marlborough Extra Income | 7 |
| iShares Physical Gold ETC | 5 |
| M&G Global Dividend | 8 |
| TB Evenlode Global Income | 7 |
| TB Saracen Global Income & Growth | 10 |
| Thesis TM Tellworth UK Select | 7 |
Higher risk
| Fund | Allocation % |
| AXA Framlington UK Equity Income | 7 |
| BNY Mellon Multi-Asset Balanced | 9 |
| CT European Select | 13 |
| Fidelity Index Japan | 7 |
| Fundsmith Equity | 14 |
| IFSL Marlborough Extra Income | 9 |
| iShares Physical Gold ETC | 7 |
| M&G Global Dividend | 10 |
| TB Evenlode Global Income | 9 |
| TB Saracen Global Income & Growth | 15 |
