Damien’s May 2024 portfolio review – Lazy summer vibe

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.

You can see how my portfolio has continued to hover around its all-time high and continues to lead its benchmarks. The chart below shows the performance of my portfolio has been in line with its benchmarks, since my last review a month ago.

Turning my attention to how individual funds have been performing over the last month, the table below shows the performance of the individual funds within my portfolio since my last review. As you can see my UK fund was the standout performer alongside BNY Mellon Multi-Asset Balanced and WS Saracen Global Income and Growth once again. At the other end of the scale my gold holding was marginally down, after the unbelievable 10% return it achieved the previous month. The other funds in the portfolio that finished the month in the red were Liontrust India, Fidelity Index Japan and Artemis US Select. The latter two have been impacted by investors pushing back the date and number of anticipated interest rate cuts in the US. This caused a slump in US tech stocks as well as the US dollar to strengthen which hurt the yen and caused Japanese equities to falter. It is interesting to note that Indian and Japanese equities, which have been key drivers in the strong performance of my portfolio this year, were drags on the portfolio's performance during the last month.

Name	% return over the last month (since April's review)
Ninety One UK Special Situations	2.03
BNY Mellon Multi-Asset Balanced	1.84
WS Saracen Global Income and Growth	1.55
Artemis European Select	1.27
T. Rowe Price US Large Cap Growth Equity	1.06
Artemis Global Income	0.91
Thesis TM Tellworth UK Select	0.81
Schroder Strategic Credit	0.32
abrdn High Yield Bond	0.13
Fidelity Index Japan	-0.47
iShares Physical Gold ETC	-0.59
Artemis US Select	-0.9
Liontrust India	-0.92

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	Lower	Sterling High Yield	GB00B79RR984
Artemis European Select	5	Medium	Europe Excluding UK	GB00B6WFCR53
Artemis Global Income	11	Medium	Global Equity Income	GB00B5N99561
Artemis US Select	5	Medium	North America	GB00BMMV5105
BNY Mellon Multi-Asset Balanced	8	Medium	Mixed Investment 40-85% Shares	GB00B8K9JZ06
Fidelity Index Japan	5.5	Medium	Japan	GB00BHZK8872
iShares Physical Gold ETC	5.5	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
WS Saracen Global Income & Growth	10.5	Medium	Global Equity Income	GB00B5B35X02

There are two funds that have fallen out of the BOTB and BFBS tables and are coloured in red, the lowest number for some time. They are:

• BNY Mellon Multi-Asset Balanced
• Thesis TM Tellworth UK Select

Interestingly both of these funds were in the 'red list' last time around, alongside Schroder Strategic Credit. The Schroder fund was given a stay of execution partly because the low-risk alternatives at the time had not fared much better after bonds had a terrible March/April. As it turns out, that was a good decision as Schroder Strategic Credit is now back in the BOTB.

For the same reason I decided to give Thesis TM Tellworth UK Select time, plus it had appeared in the BOTB and BFBS tables in recent months. As you can see from the earlier performance table Thesis TM Tellworth UK Select was the top-performing lower risk fund within my portfolio over the last month, outperforming both abrdn High Yield Bond and Schroder Strategic Credit. However, when looking at alternative lower risk options, bond funds have largely lagged the short term performance of the Thesis fund, while a number of Targeted Absolute Return funds that make the BOTB and BFBS tables aren't available on my platform of choice. With bond and equity markets in a state of flux I plan to hold off changing the fund for the time being until we see more established trends in both markets and stronger performance from alternative lower- risk options.

Also, I plan to give BNY Mellon Multi-Asset Balanced another stay of execution. While the fund has now just fallen out of the new consistent funds lists, it only failed one test, which was that it marginally underperformed its sector average between April 2020 and April 2021 by less than 1%. As such, if I were to re-run the analysis in the near future, there is a strong chance that the fund would regain its place. That's because one of the tests looks at the performance of the funds in each of the last 5 years from the date that the research is carried out. The fund was the second best performer in my portfolio over the last month and has outperformed 90% of its Mixed Investment 40-85% Shares peers over the last month and 85% of its peers over 3 months. So there is a strong chance it may well return to the consistent funds list in the future. In any event, I had planned to potentially replace BNY Mellon Multi-Asset Balanced with Liontrust Balanced, which is a fund from the same sector that is in the current BOTB. However, the recent performance has been in line with that of the BNY Mellon fund as shown in the chart below. So I will keep the BNY Mellon fund for now and review its place next month.

Given that every other fund within my portfolio is in the BOTB and BFBS tables within the last 2 months (with the exception of BNY Mellon Multi-Asset Balanced) it means that I am comfortable taking a lazier approach to my portfolio review, while the choppy moves we are currently experiencing in equity and bond markets settle into more established trends.

While my portfolio's UK equity content is higher than that of the BOTB, it has been the best performing asset within my portfolio in the short term so I am comfortable with it. Elsewhere, I now have a lower US equity exposure (which recently has been a positive contributor to my portfolio's performance) but a higher Japanese equity exposure (which has been a drag on performance in the last month). Again, I see no reason to make knee-jerk changes given the overall performance of the portfolio at this time.

Fund switches

I am not making any changes to my portfolio this month.

My portfolio

My portfolio looks like this:

Fund	Allocation	Risk	Sector	ISIN
abrdn High Yield Bond	14	Lower	Sterling High Yield	GB00B79RR984
Artemis European Select	5	Medium	Europe Excluding UK	GB00B6WFCR53
Artemis Global Income	11	Medium	Global Equity Income	GB00B5N99561
Artemis US Select	5	Medium	North America	GB00BMMV5105
BNY Mellon Multi-Asset Balanced	8	Medium	Mixed Investment 40-85% Shares	GB00B8K9JZ06
Fidelity Index Japan	5.5	Medium	Japan	GB00BHZK8872
iShares Physical Gold ETC	5.5	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
WS Saracen Global Income & Growth*	10.5	Medium	Global Equity Income	GB00B5B35X02

 

My Portfolio asset mix

My portfolio asset mix has approximately 65% exposure to equities. Last month's figures are shown in brackets.

• • UK Equities 12% (12%)
  • North American Equities 25% (25%)
  • Asian/Emerging Market Equities 6% (6%)
  • Japanese Equities 7% (7%)
  • European Equities 13% (13%)
  • Chinese equities 0% (0%)
  • Other equity 2% (2%)
  • Commodities and energy 5% (5%)
  • UK Fixed Interest 4% (4%)
  • Global Fixed Interest 18% (18%)
  • Cash 1% (1%)
  • Alternative Investment Strategies 7% (7%)
  • 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
Artemis Global Income	14
Artemis US Select	6
BNY Mellon Multi-Asset Balanced	10
Fidelity Index Japan	7
iShares Physical Gold ETC	7
Schroder Strategic Credit	11
Thesis TM Tellworth UK Select	7
WS Saracen Global Income & Growth	13

 

Higher risk

Fund	Allocation %
Artemis European Select	7
Artemis Global Income	15
Artemis US Select	7
BNY Mellon Multi-Asset Balanced	11
Fidelity Index Japan	8
iShares Physical Gold ETC	8
Liontrust India	8
Ninety One UK Special Situations	7
T. Rowe Price US Large Cap Growth Equity	15
WS Saracen Global Income & Growth	14