Damien’s September 2024 portfolio review – Autumn changes

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 continues to significantly outperform its benchmarks despite the volatile environment we find ourselves in currently. The chart below shows the performance of my portfolio versus its benchmarks since my last review a month ago. You can see how investment markets recovered in the second half of August before another wobble at the start of September.

The table below shows how individual funds performed within my portfolio during the period. Japanese equities enjoyed a strong bounce back, after the early August slump, while funds with exposure to bonds performed well throughout. At the opposite end of the scale, funds with exposure to large cap US stocks, especially tech stocks like Nvidia, struggled.

Name	% return over the last month (since August's review)
Fidelity Index Japan	2.03
Aviva Inv Global Equity Income	1.92
abrdn High Yield Bond	1.27
Schroder Strategic Credit	1.03
Thesis TM Tellworth UK Select	0.92
BNY Mellon Multi-Asset Balanced	0.56
Ninety One UK Special Situations	0.37
iShares Physical Gold ETC	0.15
Schroder UK Smaller Companies	-0.11
Artemis Global Income	-0.23
Liontrust India	-0.64
T. Rowe Price US Large Cap Growth Equity	-0.9
Janus Henderson European Mid and Large Cap	-1.27
Artemis US Select	-1.3

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	Low	Sterling High Yield	GB00B79RR984
Artemis Global Income	11	Medium	Global Equity Income	GB00B5N99561
Artemis US Select	5	Medium	North America	GB00BMMV5105
Aviva Inv Global Equity Income	10	Medium	Global Equity Income	GB0030441918
BNY Mellon Multi-Asset Balanced	8	Medium	Mixed Investment 40-85% Shares	GB00B8K9JZ06
Fidelity Index Japan	3	Medium	Japan	GB00BHZK8872
iShares Physical Gold ETC	5.5	Medium	Commodity & Energy ETF	IE00B4ND3602
Janus Henderson European Mid and Large Cap	4.5	High	Europe Excluding UK	GB00BJ0LFG67
Liontrust India	6	High	India/Indian Subcontinent	GB00B1L6DV51
Ninety One UK Special Situations	7.5	High	UK All Companies	GB00B1XFJS91
Schroder Strategic Credit	8	Low	Sterling Strategic Bond	GB00BJZ2ZC09
Schroder UK Smaller Companies	6	High	UK Smaller Companies	GB00B76V7Z98
T. Rowe Price US Large Cap Growth Equity	6	High	North America	GB00BD5FHW12
Thesis TM Tellworth UK Select	5.5	Low	Targeted Absolute Return	GB00BNY7YM73

On the face of it, a larger than usual number of funds are coloured in red but, as the earlier charts prove, the diversification within my portfolio has helped its performance, even during the recent market turbulence.

So I don't want to make drastic changes to my fund selection this month, but prune and weed as normal. With that being said, below is a list of the 'red' funds that have fallen out of both the BOTB and BFBS tables:

• Schroder Strategic Credit
• Ninety One UK Special Situations
• Janus Henderson European Mid and Large Cap
• Fidelity Index Japan
• BNY Mellon Multi-Asset Balanced
• Artemis US Select

Looking at each fund in turn, Schroder Strategic Credit will remain in my portfolio. It only just missed being included in the BFBS tables, as demonstrated by its performance over recent months. Furthermore, it has been among my portfolio's top performers during the last couple of months. Yes, some of its peers from the Sterling Strategic Bond sector may have slightly more momentum right now, but, I think there are more pressing areas of my portfolio that require attention.

Ninety One UK Special Situations has been a consistent performer since its inclusion in my portfolio. In fact, as recently as last month the fund was in the BOTB and I increased my exposure to it, as a result of reducing my Japanese equity exposure. Obviously, with the benefit of hindsight, that fund switch has yet to reap rewards, given that Fidelity Index Japan was my best performing fund last month. While Ninety One UK Special Situations has lost some momentum versus its peer group I will give it a stay of execution this time around by taking a wait and see approach. Last month I did a similar thing with Aviva Inv Global Equity Income and my patience was rewarded. However, if the performance of Ninety One UK Special Situations continues to fade then I will inevitably look to replace it during a future portfolio review.

Janus Henderson European Mid and Large Cap has only been in my portfolio since June this year and on the whole it has been a disappointment, as shown in the chart below. The fund fell out of the BOTB in July and was just about clinging on to its position in the BFBS tables. But since then its performance has weakened as shown in the chart below. So I plan to switch out of the fund into an alternative European equity fund from the BOTB, namely Schroder European Recovery (also shown on the chart below).

That then leaves me with Artemis US Select, BNY Mellon Multi-Asset Balanced and Fidelity Index Japan. All three funds were on the 'red list' last time around. In fact, I halved my exposure to Fidelity Index Japan so that it now only accounts for around 3% of my portfolio. As such its influence has been limited, which is somewhat unfortunate timing given its rebound in recent weeks, but that is par for the course when investing. Sometimes you win, sometimes you lose. Of course you can only determine the success of a change to your portfolio once some time has passed, certainly more than just a few weeks.

However, given Fidelity Index Japan's resurgence I will leave it in my portfolio for now, and in time I may complete the slow removal of it from my portfolio, or switch it for one of its peers. But this month my focus lies with Artemis US Select and BNY Mellon Multi-Asset Balanced.

BNY Mellon Multi-Asset Balanced is a fund that has been in my portfolio since June 2023 and its original inclusion was as a result of its place in the Consistent funds list. The fund became a core multi-asset holding within my portfolio due to its consistency of performance. In the most recent update to the consistent funds list the fund lost its place yet its performance has remained strong. I feel like each month I look to remove the fund only for it to defy expectations and provide a level of consistency that is important in a core holding within any portfolio. As shown in the earlier performance table, the fund was the 6th best performing fund within my portfolio over the last month. But more impressive is the performance of the fund versus its peers group since the start of August, when the latest bout of stock market volatility started. The fund has returned 0.31% over the period placing it 27th out of 286 funds, in terms of performance, from the Mixed Investment 40-85% Shares sector. Or in other words, it has outperformed 90% of its peer group during the time period, a period where over 80% of the funds within the sector lost money. That is an impressive performance from BNY Mellon Multi-Asset Balanced. So unsurprisingly the fund is going to remain in my portfolio.

Finally, this brings me to Artemis US Select. The fund has continued to find it tough going as momentum turned against large cap US stocks such as Nvidia, from the start of August. Having said that, in recent days the fund has experienced a powerful bounce as shown in the chart below (which shows the performance of the funds since I've held it). But despite this, I think it's time for a refresh as the fund's performance has been in decline since June. Also by removing the fund from my portfolio it reduces my exposure to large US tech stocks (Nvidia, Microsoft etc). Riding the strong momentum of these stocks over the last year has driven the performance of my portfolio higher but their momentum has waned somewhat. If it returns then of course, the 80-20 Investor algorithm will identify those funds that are taking advantage and they'll likely make an appearance in my portfolio in the future. But right now there are opportunities beyond US tech stocks, as I've been highlighting in my recent newsletters

The US equity exposure of the BOTB has fallen in recent months so I will reduce mine further too. I will switch out of the Artemis US Select fund and into Jupiter Asian Income (a regular in the BOTB) which will increase my Asian equity exposure to be more in line with that of the BOTB.

The other holdings within my portfolio remain in the BOTB and the BFBS tables so I plan to maintain them as they are for now. In fact, T. Rowe Price US Large Cap Growth Equity is now back in the BFBS tables and as such I don't plan on further reducing my exposure to the fund for the time being.

I have listed the two fund switches I am making this month below

Fund switches

• 100% out of Artemis US Select and 100% into the Jupiter Asian Income
• 100% out of Janus Henderson European Mid and Large Cap and 100% into the Schroder European Recovery

My portfolio

My portfolio looks now like this:

Fund	Allocation	Risk	Sector	ISIN Code
abrdn High Yield Bond	14	Lower	Sterling High Yield	GB00B79RR984
Artemis Global Income	11	Medium	Global Equity Income	GB00B5N99561
Aviva Inv Global Equity Income	10	Medium	Global Equity Income	GB0030441918
BNY Mellon Multi-Asset Balanced	8	Medium	Mixed Investment 40-85% Shares	GB00B8K9JZ06
Fidelity Index Japan	3	Medium	Japan	GB00BHZK8872
iShares Physical Gold ETC	5.5	Medium	Commodity & Energy ETF	IE00B4ND3602
Jupiter Asian Income	5	Higher	Asia Pacific Excluding Japan	GB00BZ2YML94
Liontrust India	6	Higher	India/Indian Subcontinent	GB00B1L6DV51
Ninety One UK Special Situations	7.5	Higher	UK All Companies	GB00B1XFJS91
Schroder European Recovery	4.5	Higher	Europe Excluding UK	GB0007221889
Schroder Strategic Credit	8	Lower	Sterling Strategic Bond	GB00BJZ2ZC09
Schroder UK Smaller Companies	6	Higher	UK Smaller Companies	GB00B76V7Z98
T. Rowe Price US Large Cap Growth Equity	6	Higher	North America	GB00BD5FHW12
Thesis TM Tellworth UK Select	5.5	Lower	Targeted Absolute Return	GB00BNY7YM73

 

 

My Portfolio asset mix

My portfolio asset mix has approximately 67% exposure to equities. Last month's figures are shown in brackets.

• • UK Equities 23% (23%)
  • North American Equities 15% (20%)
  • Asian Equities 7% (0%)
  • Emerging Market Equities 6% (7%)
  • Japanese Equities 4% (5%)
  • European Equities 12% (12%)
  • Other International equity 0% (1%)
  • Commodities and energy 5% (5%)
  • UK Fixed Interest 5% (5%)
  • Global Fixed Interest 19% (18%)
  • Cash 0% (1%)
  • Alternative Investment Strategies 4% (3%)

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	22
Artemis Global Income	17
Aviva Inv Global Equity Income	15
BNY Mellon Multi-Asset Balanced	12
Fidelity Index Japan	5
iShares Physical Gold ETC	8
Schroder Strategic Credit	13
Thesis TM Tellworth UK Select	8

 

Higher risk

Fund	Allocation %
Artemis Global Income	15
Aviva Inv Global Equity Income	14
BNY Mellon Multi-Asset Balanced	12
Fidelity Index Japan	4
iShares Physical Gold ETC	8
Jupiter Asian Income	7
Liontrust India	8
Ninety One UK Special Situations	10
Schroder European Recovery	6
Schroder UK Smaller Companies	8
T. Rowe Price US Large Cap Growth Equity	8