Damien’s £50,000 portfolio performance
A key part of my 80-20 Investor service is to help people invest their own money successfully and profitably, which is why I invest £50,000 of my own money live for the benefit of 80-20 Investor members. That means that I publish every trade along with my reasonings in any easy to follow format. I also publicly analyse my outperformance. No other investment expert or commentator invests their money live publicly. In this article I will show you how I have outperformed the market, passive investment strategies and professional fund managers. I will tell you how I turned £50,000 into nearly £60,000 with a two year 80-20 Investor membership. I will also show you how you can too with only a few minutes of your time every now and then. Finally, you will be able to see my very latest performance figures as well as the funds I hold in my portfolio.
What is 80-20 Investor?
80-20 investor is our DIY investment service that uses our unique algorithm and investment research to identify the best funds to invest in, so doing the hard work for you. We analyse the thousands of unit trusts, investment trusts and exchange traded funds (ETFs) that you can buy on your chosen investment fund platform to produce fund shortlists. You can see the latest data showing how 80-20 Investor algorithm has helped members outperform the market and professional fund managers below this article. It's therefore unsurprising that 80-20 Investor has received rave reviews. You can find out more about 80-20 Investor here as well as enjoy a FREE 30 day trial. It is worth pointing out that you have the ability to cancel (or upgrade) your free trial at anytime online.
Damien's £50,000 portfolio performance after a two-year membership
In March 2015 I decided to invest £50,000 of my own money using 80-20 Investor. The purpose was 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. I also wanted to prove the value of an 80-20 Investor membership. The biennial membership costs £288 which equates to just £12 a month. 80-20 Investor members receive:
- updated fund shortlists based upon our momentum algorithm
- weekly and monthly market commentary and analysis
- in-depth research articles to help members invest
- tools and heatmaps
- stop loss alerts
That alone is worth the subscription as members regularly tell me. However by investing £50,000 of my own money I wanted to show in pounds and pence that a membership to 80-20 Investor is worth every penny. No other investment commentator, journalist or research provider invests their own money in this way 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. It was a bold move particularly as when I started investing my money the markets were near all-time highs and everyone was predicting an imminent market crash.
Since I began investing 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.
The best £288 you’ll ever spend?
During the two year membership I used the information provided to outperform the market and professional investors while not taking excessive risks. Typically only around 60% of the portfolio is invested in equities. In just two years I produced a profit of 18.83% despite the various crises we experienced including a Greek crisis, a Chinese economic slowdown, a commodity crisis, the Brexit vote and Donald Trump’s surprise election win. I managed to turn my original £50,000 into £59,365 in just two years.
Coincidentally I made the money back on my initial subscription within weeks of starting my £50,000 investment portfolio. In addition in the aftermath of the Brexit vote I made 5.35% in just 2 days while the FTSE 100 fell by 5.62%! The table below shows how my £50,000 portfolio performed over the two years versus:
- my portfolio’s benchmark (calculated by using the average return for each sector in which my portfolio invested)
- the average professionally run multi-asset fund with comparable equity content
- the FTSE 100
- APCIM benchmarks (the equivalent an investment bank would have made a rich person who could afford their services)
- AFI cautious and AFI balanced indices (which show how much the typical financial adviser would have made you)
- Vanguard benchmark – what the equivalent passive Vanguard portfolio achieved using the same equity content
|Name||2 yr profit %||Sharpe ratio||Volatility|
|Passive Vanguard benchmark (passive strategy)||15.73||0.39||1.3|
|AFI Balanced (IFA’s balanced portfolio)||14.35||0.37||1.12|
|Average managed multi-asset fund (fund manager)||12.25||0.23||1.03|
|AFI Cautious (IFA’s cautious portfolio)||10.57||0.22||n/a|
|ARC Sterling Balanced Asset (Investment bank)||9.33||0.01||n.a|
The takeaway from the above table is that without taken undue risk (shown by the volatility figure) my £50,000 portfolio achieved the best return. In addition, the extra investment risk I took was rewarded by an increased return when compared to the risks taken by other strategies (illustrated my portfolio having the highest sharpe ratio). Other strategies’ risk/return balance is inferior to my portfolio.
Profit from a 2 year 80-20 Investor membership
The table below shows how much extra profit (net of the 80-20 membership fee and fund charges) I made using 80-20 Investor vs other strategies. Don’t forget that the 80-20 Investor membership is a fixed price and so doesn’t increase just because you invest more money. All figures are net of fund fees and the cost of a biennial 80-20 Investor membership:
|£50k challenge overall profit||£3,458||£9,077||£13,760||£18,442||£46,537|
|extra profit over a Passive Vanguard benchmark||£312||£1,212||£1,962||£2,712||£7,212|
|extra profit over the FTSE 100||£402||£1,437||£2,300||£3,162||£8,337|
|extra profit over a balanced IFA portfolio (AFI Balanced Index)||£588||£1,902||£2,997||£4,092||£10,662|
|extra profit over an Average managed multi-asset fund||£1,008||£2,952||£4,572||£6,192||£15,912|
|extra profit over the cautious IFA portfolio (AFI Cautious Index)||£1,344||£3,792||£5,832||£7,872||£20,112|
|extra profit over an Investment Bank Discretionary Portfolio (ARC Sterling Balanced Asset Index)||£1,592||£4,412||£6,762||£9,112||£23,212|
The other thing to bear in mind is that IFAs will typically charge you an extra 0.75% to 1% of your portfolio size each year to run your money which the above figures do not take into account. So their performance is overstated. In addition not only did the passive strategy have a higher volatility but it had larger drawdowns (falls) than my portfolio.
My outperformance has been achieved by following the asset allocation suggested by the 80-20 Investor algorithm and having a concentrated portfolio of funds. For example ahead of the EU referendum I reduced my exposure to UK and European equities, which was a bold but ultimately correct call. Of course, as you can appreciate, there is no performance guarantee with 80-20 Investor as returns are dependent upon market conditions.
But it doesn’t stop there…
I continue to run my portfolio live for 80-20 Investor members. In fact you can see exactly how my portfolio is currently invested when you take out your free 30 day trial of 80-20 Investor which you can cancel (at a click of a button) at any time.
At present my portfolio is invested across a range of assets including bonds, US equities, UK equities and European equities. The table below shows my portfolio’s current profit versus the same benchmarks used above. My portfolio has managed to even outperform the benchmarks with high equity exposures, yet my portfolio only has around 40% in equities, no other portfolio in the table has a lower equity exposure. The reason for that is that the 80-20 Investor algorithm moved me into more low risk assets ahead of the December 2018 equity market sell-off. It also explains why my portfolio was up 0.78% in May 2019, despite the renewed equity market sell-off, outperforming all 400 funds from across the Mixed Investment 40-85% Shares and Mixed Investment 20-60% Shares sectors. In fact, only 18 funds from those sectors even made a profit in May.
|Name||Profit % 2nd March 2015 to 17th June August 2019|
|AFI Balanced (IFA’s balanced portfolio)||26.56|
|AFI Cautious (IFA’s cautious portfolio)||18.85|
|Passive Vanguard benchmark (passive strategy)||27.31|
|Average managed multi-asset fund (fund manager)||18.66|
If you aren’t ready to take a free trial of 80-20 Investor then I have created a free short email series that teaches you how to successfully invest your own money. You will receive a short two minute email each day for 10 days. By the end of it you should be confident enough to decide how to invest your own money. You can sign up here.