In my last update I promised to review my portfolio this week. If you recall at the start of the year my portfolio was almost back to profit as shown in the chart below (click to enlarge):
But as you know stock markets have had their worst start to a year ever! So many of you are wondering how my portfolio is doing. Well the table below gives you the total return since I launched my portfolio back in March 2015. The big thing you will notice is that my portfolio weathered the market sell-off better than the professional fund managers and the passive benchmark. That means that my portfolio is outperforming even more after the market slump!
| Portfolio | Return % since March 2015 |
| My portfolio | -3.05 |
| Average fund manager | -5.64 |
| Passive Vanguard benchmark | -6.50 |
| FTSE 100 | -12.60 |
My current portfolio
At present my portfolio looks like this:
| Fund | % of portfolio |
| Aberdeen Property Trust | 10 |
| Aberdeen European High Yield Bond | 18 |
| Jupiter European | 17 |
| Rathbone Global Opportunities | 18 |
| Fundsmith Equity | 10 |
| JPM UK Smaller Companies | 16 |
| CF Miton UK Value Opportunities | 11 |
My portfolio's existing asset allocation
My portfolio has the following asset allocation:
- UK Equities 35%
- European Equities 20%
- US Equities 15%
- Global Fixed interest 9%
- UK Fixed interest 9%
- Property 7%
- Cash 5%
- Alternative strategies 0%
- Other international equities 0%
- Japan Equities 0%
The 80-20 Investor Portfolio's asset allocation
Over the equivalent period the 80-20 Investor portfolio has just dipped back into negative territory with a total return since March 2015 of -1.38%. Plus it has marginally outperformed during January's sell off due to its higher global bond exposure.
The current 80-20 Portfolio asset allocation is:
- UK Equities 18%
- North American Equities 19%
- Global Fixed Interest 22%
- Japanese Equities 6%
- European Equities 15%
- Property 4%
- UK Corporate Fixed Interest (i.e UK bonds) 6%
- Emerging markets 4%
- Alternatives 3%
- Cash 0%
Changes to my portfolio
As you know by now the purpose of running my own £50,000 portfolio is to show people how they can use 80-20 Investor to run their own money easily and successfully. As such I don't religiously hold every fund in the Best of the Best Selection. I already regularly show you how the Best of the Best Selection performs so there's no point repeating the exercise with my own portfolio and just copying the Best of the Best Selection. Instead I prefer to pick around 7-8 funds from the Best of the Best Selection. I also don't always change my portfolio each month. Don't forget, the research behind the 80-20 Investor algorithm baked in the idea that the funds can be held for as long as 6 months if you wish.
Generally I try and track the 80-20 Investor asset allocation and ensure as many funds in my portfolio are in the Best of the Best Selection, or at least are identified as the best in their respective sectors.
However at present only 1 of my funds (Jupiter European) is in the current Best of the Best Selection. Meanwhile, Aberdeen European High Yield Bond and Fundsmith Equity are the top picks within their sectors according to the 80-20 Investor algorithm (see Best Funds by Sector).
So I am happy with those funds. As all the other funds have been held for less than six months I am comfortable with making a couple of changes while retaining the others for now. The reason for only making a couple of changes is because markets are incredibly volatile at the moment and wholesale changes can mean that you miss any bounce after the recent market rout. If you recall the last time I made wholesale changes I was unlucky with my timing and missed the strongest trading day in four years.
So I have carried out the following funds switches:
- Switched out of the CF Miton UK Value Opportunities entirely and into the Vanguard LifeStrategy 20% Equity
- Switched 50% of my holding in Aberdeen Property Trust and into Artemis Pan-European Absolute Return Hedged.
The Vanguard LifeStrategy 20% Equity funds is a tracker fund made up of 80% global bonds and 20% global equities and has been a regular feature of recent Best of the Best Selections. It is also one of the funds I tip for buy and forget for 2016. Similarly Artemis Pan-European Absolute Return Hedged has been a regular low risk fund within the 80-20 Investor Best of the Best Selection.
In order to reduce my UK equity exposure I have sold CF Miton UK Value Opportunities rather than the JPM UK Smaller Companies fund as smaller company funds have held up better in the recent sell-off and tend to outperform their larger cap peers in January. Going forward I will look to make further changes to the portfolio especially regarding those funds no longer highlighted by the 80-20 Investor algorithm as best in their sector or in the 80-20 Investor Portfolio. I have maintained part of my property holding (but reduced its percentage allocation in line with the 80-20 Investor portfolio) as it is a great diversifier.
My new portfolio
My portfolio now look like this (ISIN numbers are in brackets and new funds are in green)
| Fund Name | ISIN Code | % allocation |
| Aberdeen - European High Yield Bond | GB00B5968F40 | 18 |
| Aberdeen - Property Trust | GB00B036Z329 | 5 |
| Artemis - Pan-European Absolute Return Hedged | GB00BMMV4J16 | 5 |
| Fundsmith - Equity | GB00B4LPDJ14 | 10 |
| JPM - UK Smaller Companies | GB0030880255 | 16.5 |
| Jupiter - European | GB0006664683 | 16.5 |
| Rathbone - Global Opportunities | GB0030349095 | 18 |
| Vanguard - LifeStrategy 20% Equity | GB00B4NXY349 | 11 |
My portfolio's new asset allocation is:
- UK Equities 25%
- European Equities 20%
- US Equities 17%
- Global Fixed interest 18%
- UK Fixed interest 10%
- Property 5%
- Cash 0%
- Alternative strategies 5%
This is more in line with the current 80-20 Investor Best of the Best Selection as I've reduced my UK equity exposure in favour of global fixed interest (i.e bonds).
