Over a month has passed since I did something that, as far as I am aware, no other investment commentator or analyst has done, that is to invest £50,000 of their own money in the public domain.
The reason I did it was so 80-20 Investor subscribers can learn how to run their own money and get the best out of 80-20 Investor.
So how have I done so far?
I started this exercise by emphasising that this is a multi-year project (5-10 years). Also given that I invested right at the top of the market (the point at which most stock market indices have hit all-time highs) I was prepared for the portfolio value to dip below £50,000 in the short term.
The reality is that the portfolio is sitting on a profit of £917.62 after just the first month (as at 3/4/2015). That is equivalent to a profit of over 1.8%. This is net of all charges and I am happy to publish statements. Over the same period had I invested £50,000 in a FTSE 100 tracker I would have lost over £500 (see the red line in the chart below). In fact, the chart below shows that my portfolio (the blue line) was up around £1,500 after 3 weeks, before the wider market wobble pared these gains, as discussed previously here. Click to enlarge the image.
That means that it took me less than 2 weeks to make enough profit to pay for a 2 year subscription to 80-20 Investor. Given that the FREE trial period is 30 days that would mean that 80-20 Investor would not have cost me a penny if I’d taken some small profits at that point to cover a 2 year subscription.
Obviously I don’t have to pay for 80-20 Investor, but if I did then I would have taken £288 profit to cover the cost, effectively making the service free of charge for two years.
Of course as I always say humility is important in investing and you probably grow tired of me saying it. It is early days still and the market is very jittery at the moment.
Performance breakdown & changes
The table below shows how each fund fared over the period. It is good to see that every one of my selections made money .
| Fund | Total return % from 1st March to 3rd April |
| Jupiter - European | 4.87 |
| JPM - Cautious Managed | 2.13 |
| Neptune - Japan Opportunities | 2.08 |
| AXA - Framlington Global Technology | 1.81 |
| Fidelity - Multi Asset Defensive | 1.77 |
| Majedie - UK Income | 0.45 |
| Fundsmith - Equity | 0.28 |
In addition, among the biggest contributors in terms of risk were my low risk selections namely JPM Cautious Managed and Fidelity Multi Asset Defensive. Once again these funds appear in the latest 80-20 Investor Best of the Best list and I will maintain them in the portfolio for now.
The same goes for Jupiter European which was my top performing pick, perhaps unsurprisingly, off the back of Eurozone QE. The fund was up 4.87% and interestingly is now characterized as a medium risk fund by our algorithm (previously high risk) and I cover this in more detail on my monthly 80-20 Investor Portfolio analysis here.
Despite my reticence to invest in UK equities I picked the Majedie UK Income fund as it was (and still is) lurking just outside the Best of the Best funds. My faith was rewarded because although the fund returned just 0.45% the average UK equity fund lost 0.53%.
However, as stated in my recent research piece FTSE 100 – Where will it go next & how will the Election affect it? General Elections are seldom positive for UK equities in the months that follow. Of course, history doesn’t always repeat itself. Yet UK equity funds are still finding it difficult to break into the Best of the Best selection as better momentum prospects lie elsewhere globally. That is why I am going to switch out of this fund and into the Artemis Global Select fund. It principally invests in shares in the US, Europe, Japan and Asia so still helps diversify my holdings,. Asian equities have gained momentum of late as the emergence of an Asian equity fund in this month's Best of the Best selection proves.
Within the high risk area I still like Neptune Japan Opportunities for its ability to hedge out exposure to the Yen, as I explained here when I originally designed this portfolio. The fund made 2.08% since I bought it which is pleasing.
My last high risk holding, which is the AXA Framlington Global Technology fund, got off to a flier, up 4% in the first 3 weeks of ownership. However, weak economic data in the US, geopolitical risks in Yemen and the Middle East as well as simple profit taking by traders saw technology stocks give back all those gains before bouncing a little.
Clearly technology shares are vulnerable to a correction so I am happy to take a little profit by selling half my holding in the AXA fund.
Missed opportunity
When I built the portfolio last month I said at the time:
‘As I highlighted in my research piece Buyer beware this Chinese New Year Chinese equities tend to perform better in the second half of the year so I am going to hold off investing for now’.
Well the average fund Chinese fund made over 7% in the last month, making it the best performing sector, because of expectations of a looser monetary policy in China which would cause shares to rally. If you compare the 80-20 Best of the Best selection versus my £50,000 portfolio the former outperforms largely due to its exposure to Chinese equities. The chart below shows my £50,000 portfolio (blue line) versus the 80-20 Best of the Best selection (red line). Click the image to enlarge it.
So I missed a trick there. But therein lies a good DIY investing lesson, sometimes ignorance is bliss as explained in my recent newsletter. But have I missed the boat and will I be investing in Chinese equities now?
Given the sharp rally in Chinese equities in the last couple of weeks I would expect some kind of sell-off. However, I am prepared to take some money out of my other high risk play AXA Framlington Global Technology and invest it in Henderson China Opportunities which has been in the ‘Best of the Best’ selection for some months now. Also it helps diversify my holdings and moderates my exposure to US shares which have faltered of late ahead of the next company earnings reporting season.
So my portfolio at the time of writing is
| Fund | % allocation |
| Jupiter - European | 14 |
| JPM - Cautious Managed | 15 |
| Neptune - Japan Opportunities | 14 |
| AXA - Framlington Global Technology | 14 |
| Fidelity - Multi Asset Defensive | 15 |
| Majedie - UK Income | 14 |
| Fundsmith - Equity | 14 |
And will become:
| Fund | % allocation |
| Jupiter - European | 14 |
| JPM - Cautious Managed | 15 |
| Neptune - Japan Opportunities | 14 |
| AXA - Framlington Global Technology | 7 |
| Fidelity - Multi Asset Defensive | 15 |
| Artemis Global Select | 14 |
| Fundsmith - Equity | 14 |
| Henderson China Opportunities | 7 |
