Damien’s March 2024 portfolio review – 9 years and still outperforming

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.

The chart below shows the performance of my portfolio since my last review a month ago and you can see that while my portfolio underperformed its benchmarks it had another strong month.

 

It means that my portfolio now sits at yet another new all-time high, as shown in the first chart. My £50,000 portfolio is now worth over £82,735 which equates to a profit of 65.43% in 9 years, which is a great result. But it's not just the profit that is important, so is the management of risk over that time to achieve that profit as I explained in detail last month. I have achieved this by managing risk and squeezing more return from the risk that I have taken than most professional fund managers.

So how have the holdings within my portfolio performed since my last review? The table below shows the performance of the individual funds within my portfolio since my last review just under a month ago.

As you can see there has been a huge turnaround for WS Saracen Global Income and Growth which was propping up the performance chart last time. By contrast Troy Asset Management Ltd Trojan Global Equity has gone from near the top of my monthly performance chart to the bottom this time around. Meanwhile the consistently strong performers across the last two months have been Fidelity Index Japan, Liontrust India and Fidelity American. The consistent underperformer has been Fidelity UK Smaller Companies.

Name	% return over the last month (since February's review)
Fidelity Index Japan	5.22
iShares Physical Gold	4.57
WS Saracen Global Income and Growth	3.54
Fidelity American	2.6
Liontrust India	2.46
BNY Mellon Multi-Asset Balanced	2.21
L&G Global 100 Index Trust	1.91
T. Rowe Price US Large Cap Growth Equity	1.69
Thesis TM Tellworth UK Select	1.64
abrdn High Yield Bond	1.01
Schroder Strategic Credit	1
Fidelity UK Smaller Companies	0.4
Troy Asset Management Ltd Trojan Global Equity	-1.09

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	14.5	Lower	Sterling High Yield	GB00B79RR984
BNY Mellon Multi-Asset Balanced	8.5	Medium	Mixed Investment 40-85% Shares	GB00B8K9JZ06
Fidelity American	5	Medium	North America	GB00B8GPC429
Fidelity Index Japan	5.5	Medium	Japan	GB00BHZK8872
Fidelity UK Smaller Companies	5	Higher	UK Smaller Companies	GB00B7VNMB18
iShares Physical Gold ETC	5	Medium	Commodity & Energy ETF	IE00B4ND3602
T. Rowe Price US Large Cap Growth Equity	10.5	Higher	North America	GB00BD5FHW12
L&G Global 100 Index Trust	5	Medium	Global	GB00B0CNH056
Liontrust India	5.5	Higher	India/Indian Subcontinent	GB00B1L6DV51
Schroder Strategic Credit	8.5	Lower	Sterling Strategic Bond	GB00BJZ2ZC09
Thesis TM Tellworth UK Select	6	Lower	Targeted Absolute Return	GB00BNY7YM73
Troy Asset Management Ltd Trojan Global Equity	11	Medium	Global	GB00B0ZJ5S47
WS Saracen Global Income & Growth	10	Medium	Global Equity Income	GB00B5B35X02

The table looks similar to last month with the only differences being that Schroder Strategic Credit is now in the BOTB having been in the BFBS table last time around. Meanwhile Troy Asset Management Ltd Trojan Global Equity has fallen out of the BOTB and BFBS altogether. In fact, I think it is the first time ever that my portfolio has only had 'blue' and 'red' funds at a review point and no 'orange' BFBS funds.

It means this month there are now six funds that have fallen outside out the BOTB and BFBS tables and are coloured in red. They are:

• BNY Mellon Multi-Asset Balanced
• Fidelity American
• L&G Global 100 Index Trust
• WS Saracen Global Income & Growth
• Fidelity UK Smaller Companies
• Troy Asset Management Ltd Trojan Global Equity

All of the funds except Troy Asset Management Ltd Trojan Global Equity were on the 'red' list last month as well. Interestingly, in the last few weeks we've seen some weakness in US technology stocks which has hampered funds such as L&G Global 100 Index Trust as well as T. Rowe Price US Large Cap Growth Equity, both of which have significant exposure to US tech stocks and the Magnificent 7 in particular. But as mentioned in my recent newsletter other sectors have started to outperform the Magnificent 7 over the last month. There are plenty of investment opportunities and bull markets beyond the Magnificent 7.

Of the six funds listed Fidelity UK Smaller Companies has been the biggest disappointment since I've held it in my portfolio. The chart below shows the performance of the fund since it first entered my portfolio in January. While it is a relatively short holding period you can see the underperformance versus its sector average has been significant although it has managed to recoup the losses it incurred during February.

Given the fund's disappointing performance and the fact that we are soon exiting the favourable "winter" period for UK Smaller Companies funds I think it is an opportune moment to invest the money elsewhere. In order to maintain my portfolio's UK equity exposure, so it remains in keeping with that of the BOTB selection, I will invest the proceeds into the Ninety One UK Special Situations fund. This fund is in the current BOTB and by comparison has rallied 8.56% over the same period that I've held the Fidelity fund.

Moving on to Fidelity American, I plan to give the fund a stay of execution. As mentioned earlier the fund has been among the most consistent performers over the last couple of months. That is partly a result of its slight underweight in some of the Magnificent 7 versus its peer group, most notably Nvidia where it doesn't have any exposure at all.

If you look at its performance year to date versus T. Rowe Price US Large Cap Growth Equity, which is the other North American equity fund in my portfolio, you can see the impact of this underweight.

 

The alternative North American funds with momentum right now all have significant exposure to the Magnificent 7 and for now I don't want to increase my exposure further. Given that Fidelity American continues to outperform its peer group average (the red line above) I plan to keep it in my portfolio for now.

L&G Global 100 Index Trust has fallen out of the BOTB and BFBS tables. It has performed adequately since I've held the fund as shown in the chart below. After initially lagging its sector average it eventually gained ground and overtook its peers. But ultimately it has performed more or less in line with the typical global equity fund.

I think it is now time for a change and also an opportunity to more accurately reflect the recent uplift in European equity exposure in the BOTB, but also to reduce my portfolio's exposure to US technology stocks, which are the dominant holdings within the L&G fund. Therefore I plan to sell out of the L&G fund and invest the proceeds into Artemis European Select fund, which is a member of the current BOTB and has significantly outperformed the L&G Global 100 Index Trust so far this year. Don't forget it's not just been US stock market indices that have been setting new all-time highs, European equities have been too.

The remaining funds that have fallen outside of the BOTB and BFBS tables are BNY Mellon Multi-Asset Balanced, WS Saracen Global Income & Growth and Troy Asset Management Ltd Trojan Global Equity. The overall performance of my portfolio suggests that wholesale changes aren't necessary, especially given that the first two funds mentioned are among my portfolio's top performers since my last review. I will keep them under review for next time. It's worth pointing out that BNY Mellon Multi-Asset Balanced is among the top quartile of performing funds within the Mixed Investment 40-85% Shares sector since the turn of the year. So there's no need to panic.

Meanwhile, Troy Asset Management Ltd Trojan Global Equity struggled last month but it was in the BOTB as recently as February. The chart below shows the performance of the fund since I first held it in July 2023, and it was flying high versus its peers until the dip in recent weeks. Either way I will hold the fund for now and review it once again next month.

The other funds in my portfolio remain in the BOTB and are performing well so will stay in my portfolio.

Fund switches

The fund switches I plan to make this month are listed below, and affect 10% of my portfolio. The changes will bring my portfolio's asset mix more in line with that of the BOTB although there are differences, most notably a slightly lower overall equity exposure thanks to a marginally lower emerging market and US equity exposure.

100% out of Fidelity UK Smaller Companies and 100% into Ninety One UK Special Situations

100% out of L&G Global 100 Index Trust and 100% into Artemis European Select

My portfolio

My portfolio now looks like this:

Fund	Allocation	Risk	Sector	ISIN
abrdn High Yield Bond	14.5	Lower	Sterling High Yield	GB00B79RR984
Artemis European Select	5	Medium	Europe Excluding UK	GB00B6WFCR53
BNY Mellon Multi-Asset Balanced	8	Medium	Mixed Investment 40-85% Shares	GB00B8K9JZ06
Fidelity American	5	Medium	North America	GB00B8GPC429
Fidelity Index Japan	6	Medium	Japan	GB00BHZK8872
iShares Physical Gold ETC	5	Medium	Commodity & Energy ETF	IE00B4ND3602
Liontrust India	6	Higher	India/Indian Subcontinent	GB00B1L6DV51
Ninety One UK Special Situations	5	Higher	UK All Companies	GB00B1XFJS91
Schroder Strategic Credit	8	Lower	Sterling Strategic Bond	GB00BJZ2ZC09
T. Rowe Price US Large Cap Growth Equity	11	Higher	North America	GB00BD5FHW12
Thesis TM Tellworth UK Select	5.5	Lower	Targeted Absolute Return	GB00BNY7YM73
Troy Asset Management Ltd Trojan Global Equity	11	Medium	Global	GB00B0ZJ5S47
WS Saracen Global Income & Growth	10	Medium	Global Equity Income	GB00B5B35X02

 

My Portfolio asset mix

My portfolio asset mix has approximately 62% exposure to equities. Last month's figures are shown in brackets.

• • UK Equities 8% (8%)
  • North American Equities 24% (25%)
  • Asian/Emerging Market Equities 6% (6%)
  • Japanese Equities 6% (6%)
  • European Equities 11% (7%)
  • Chinese equities 0% (0%)
  • Other equity 7% (10%)
  • Commodities and energy 5% (5%)
  • UK Fixed Interest 4% (4%)
  • Global Fixed Interest 20% (20%)
  • Cash 2% (0%)
  • Alternative Investment Strategies 7% (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	19
Artemis European Select	6
BNY Mellon Multi-Asset Balanced	11
Fidelity American	6
Fidelity Index Japan	8
iShares Physical Gold ETC	6
Schroder Strategic Credit	10
Thesis TM Tellworth UK Select	7
Troy Asset Management Ltd Trojan Global Equity	14
WS Saracen Global Income & Growth	13

 

Higher risk

Fund	Allocation %
Artemis European Select	7
BNY Mellon Multi-Asset Balanced	11
Fidelity American	7
Fidelity Index Japan	8
iShares Physical Gold ETC	7
Liontrust India	8
Ninety One UK Special Situations	7
T. Rowe Price US Large Cap Growth Equity	15
Troy Asset Management Ltd Trojan Global Equity	15
WS Saracen Global Income & Growth	15