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16x More Growth! - Our "Bonkers" Update

Posted by: Sam Lees

 

Here's our latest update of our massively sucessful, but very volatile, Bonkers Portfolio. Even if it's not to your taste, there are two essential lessons for all investors, in funds or otherwise.  

Quick recap

All of our Dynamic portfolios are based on a momentum philosophy (buying the best performing funds on the basis that they will probably continue to outperform for a defined period).  This is well documented and has been incredibly successful, as proven by research stretching back decades and our own unique and ground-breaking research.  

In the Bonkers Portfolio we took our Dynamic approach and simply bought the best performing single fund from the whole available universe of funds.  As you can see from the table below, the returns are incredibly impressive but the increased risk will not be to everyone's taste.

The outperformance…

The track record for this strategy goes back to January 1995, buying the best performing fund over the previous 6 months, which was BlackRock Gold & General fund.  Six months later you would have switched out of this fund and into the latest best performing fund – Henderson UK & Irish Smaller Companies – and repeated this process every 6 months.

If you’d stuck with the process you would now be up by a staggering 5970%...

…which is over 16.5x the return of the UK All Companies sector average (360%)

In money terms, if you had invested £100,000 in January 1995 it would have grown to a very satisfying £6,070,910 compared with just £460,470 if you were able to replicate the UK All Companies sector average.

…with more risk?

In Table 1 you’ll see the stats of the Bonkers Portfolio vs. a couple of indices (the sort of indices that you might have wanted to invest in via a cheap tracker fund).

Over the years, the portfolio has held a wide array of funds and you would have had difficulty cherry-picking them any other way.  In terms of more recent holdings, the portfolio invested in UK smallcaps, India, Biotech and Japanese equities.  In January 2017 we have switched everything into Neptune European Opportunities.

In one sense this is just a bit of fun, as few would be comfortable with the volatility.  Yet there is a very serious underlying lesson, which is vital to your success.
 
If you have a clear and proven process for selecting funds with outstanding potential, and you have the discipline to apply it rigorously, you can reap huge rewards.   
 

ACTION FOR INVESTORS

FURTHER READING

 

Table 1: Bonkers portfolio ratios and returns (1/1/1995-31/12/2016)

Name

Overall Return %

Annualised Return %

Volatility %

Historic Value at Risk %

Bonkers Portfolio

5970.91

20.49

27.01

10.65

FTSE 100

397.60

7.56

13.60

6.32

S&P 500

748.57

10.20

15.61

5.64

UK All Companies Sector Average

360.47

7.18

13.72

5.16

Topic: Generating growth


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  • Comment by: yorkyuk 27.02.2017 @ 12:43:36PM

    Hi bigglesloop,

    How did you select your Funds for you Bonkers Portfolio? There was talk on fundexpert.co.uk that they would include a section so it was easy to review and select the Current Fund for the Bonkers Portfolio every 6 months, but this hasn't happened yet.

    Did you use the "Best Growth Funds" section of this website and order it in best 6 month % increase and select the top 3 Funds or did you use the "Best Funds by Sector" on this website and go through the best 6 month % increase in the Funds list eventually singling out the top 3 across the Fund Sectors?

    Or is there any easier way to find the Bonkers Portfolio Fund every 6 months?

    I'm really interested in the Bonkers Portfolio, but want to make sure I get the research correct.

    Regards...

  • Comment by: bigglesloop 31.01.2017 @ 11:04:38AM

    I have been using the “Bonkers” method for the past sixteen months. I didn’t invest everything,just a small part of my funds.I started off with City Financial Absolute Return. This lost me 4% before I switched in to Investec Global Gold. This fared much better, returning 22% Currently I have Blackrock World Mining which is up 23%
    After the first six months I decided not only to invest in the best performing fund over the past six months but also the second and third best performers. Of the second rated funds I made 15% on Legg Mason Japan before switching to Pictet Russian, currently up 21% The third rated funds saw me start off with Fidelity China Special Situations. This dropped 11% so I switched (I usually sell when an investment shows a 10% loss) to Man Japan, which is up just under 1% at the moment.
    Overall I have made 28.5% in those sixteen months. Bonkers is the easiest way to select a fund, or funds to invest in. My rules are to review every six months and sell if there is a ten percent drop.

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