Page 38 - DIY Investor Magazine | Issue 30
P. 38

We recently increased our holdings in some of the best-performing funds in our demonstration portfolios, Tugboat and Ocean Liner.
To control overall volatility of the portfolios, most of our investments are in the slower, steadier sectors, with only a smaller amount in racier funds.
Our ‘Slow Ahead’ Group is made up of funds from the following sectors:
• Sterling High Yield Bonds
• Sterling Strategic Bonds
• Sterling Corporate Bonds
• Mixed Investment 0-35% Shares
• Mixed Investment 20-60% Shares
• Mixed Investment 40-85% Shares
• Targeted Absolute Returns
Since the 2020 market crash, the leading sector based on its four-week return has been Mixed Investment 40-85% Shares. Sterling High Yield has also featured, mainly when equity markets have temporarily faltered; the last time was in June when we bought Schroder High Yield Opportunities fund.
In the last report, Mixed Investment 40-85% Shares sector was top of the table with a four-week return of 2.1%; over 12 weeks it was up 5.6% and in the last 26 weeks 7.4%.
In comparison, Sterling High Yield sector went up by only 0.1% in four weeks.
We have now sold Schroder High Yield Opportunities and added to Liontrust Sustainable Future Managed fund and Royal London Sustainable World fund.
These are two funds from the Mixed Investment 40-85% Shares sector along with Janus Henderson Global Responsible Managed and Baillie Gifford Managed funds.
At the beginning of last year, we held three of these funds; they were the last to be sold during February and March when they fell along with markets in general.
When we started to reinvest at the beginning of April, the
first fund we bought was Royal London Sustainable World, followed by Janus Henderson Institutional Global Responsible Managed.
In May, we added Liontrust Sustainable Future Managed fund and a couple of months later followed with Baillie Gifford Managed. They have been the mainstay of our portfolios ever since.
Each week, we calculate a decile ranking for each fund in
the group based on returns over various time periods; the top 10% go into decile one, the next 10%, decile two, with the last 10% in decile 10. In the last report, these four funds were in decile one based on 4 and 12 week returns. Royal London and Liontrust were also in decile one over 26 weeks.
Another fund we have held for while is FTF Franklin UK Smaller Companies, from the slightly more volatile ‘Steady as She Goes’ group.
After the coronavirus crash, UK equity sectors did not recover as quickly as many overseas sectors.
However, once news broke that our vaccine development looked likely to be successful, and government had committed to a full-scale roll-out, things picked up. UK Smaller Companies finished last year strongly and has done well this year.
In November we invested in Franklin UK Smaller Companies and are very pleased with its performance; in the last analysis, it was in our shortlist of best-performing funds in its sector based on its 4 and 26 weeks performance.
We have also held the L&G UK Smaller Companies fund since June; last week, we increased the amount invested in both funds.
Although we review the portfolios each week, and are happy to make changes when necessary, we can also hold funds for a year or more if they continue to perform well.
For more information visit Saltydog to see the latest analysis, or take a two-month free trial:
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