Fact sheet: Fundsmith Equity

Rated Fund Information
Rated Funds Group
?Money Observer has arranged all its Rated Funds into easy to understand Rated Fund Groups, comprising funds and investment trusts.
GLOBAL GROWTH
Sector
UT Global
Fund type
OEIC
Primary aim
GROWTH
Why Money Observer Rates Fundsmith Equity

Rated Fund 2013-2017. A straightforward recipe for success

Fundsmith Equity won Money Observer's Best Large Global Growth Fund award in 2016. It was launched in 2010 by City veteran Terry Smith and in just over six years it has grown to more than £9 billion in size. His approach is to pick a small selection of shares and stick with them.

The fund currently holds 27 shares with over 60 per cent in the US market. He buys long-established firms with big brands and a high return on capital. He also favours businesses with advantages that are difficult to replicate.

Smith believes it is virtually impossible to predict which way stock markets will move, but that the strength of the companies the fund holds will allow them to continue to grow their intrinsic value.

He is scathing of other managers, and is sceptical when others talk about diversification and/or the belief that they can buy poor-quality companies when their fortunes and share prices are depressed and about to improve and sell them close to, or preferably just before, they turn down.

He says he cannot understand why other investors assume that it is better to be diversified across low-quality investments than to be concentrated in high-quality ones.

On market timing, he says the performance record of the vast majority of active managers would suggest that there are far more who think they can play the investment and business/economic cycle successfully and outperform, than can actually do so.

3 Year Performance
Fund Performance102.9%
Average of Rated Funds Group71.3%
Sector Performance42.7%
Fund information
Fund name
Fundsmith Equity T Acc
Fund manager company
Fundsmith
Fund type
OEIC
Fund manager
  • Terry Smithsince 01/11/2010
Accolades
Winner - Global Growth - Large Fund
Fund objective
The Company will invest in equities on a global basis. The Company's approach is to be a long-term investor in its chosen stocks. It will not adopt short-term trading strategies.
Benchmark
  • MSCI World
Investment style
None
Investment method
Shares
Quick stats
1 Year return
38.9%
1 Year rank in sector
26/241
Sector
UT Global
Yield
0.6%
Ongoing charge (OCF)
?A fund’s ongoing charges figure (OCF) is similar to the old-style total expense ratio. It reflects the annual charge to investors in the fund, in percentage terms, but does not include extra performance-related fees (where these are levied) or the fund’s trading expenses on its underlying investments.
1.06%
Fund size
£11,685m (£6,154m last year)
FE Risk score
?FE Risk Scores measure the riskiness of instruments relative to the FTSE 100 index of shares. Weekly volatility is measured over three years with recent behaviour counting more heavily than earlier behaviour. Cash-type investments will have scores close to zero. Funds will tend to have scores in the 0-150 range. The FTSE 100 is always scored at 100. There is no upper limit.
97
Mid price
347.7
Top in this sector
Fund name1 Year
Natixis HarsAsGblConcntdEq51.7%
Baillie Gifford Global Select51.6%
Aubrey GblConviction50.3%
Baillie Gifford International46.8%
Baillie Gifford Gbl Alpha Gth46%
...more in UT Global

Performance snapshot

Holdings snapshot

  • USA61.9%
    UK19.4%
    Spain5.3%
    Denmark3.3%
    Money Market3.2%
  • Consumer Staples31.7%
    Health Care29.1%
    Technology23.7%
    Industrials7.7%
    Consumer Discretionary4.6%
  • US Equities61.9%
    UK Equities19.4%
    Spanish Equities5.3%
    Danish Equities3.3%
    Money Market3.2%

Performance vs Sector

Cumulative performance
 1 mth3 mth6 mth1 yr3 yr5 yr
Fund4.2%8.2%16.4%38.9%102.9%181.7%
Sector2.6%4.1%9%30.9%42.7%86.7%
Rank within sector18 / 25413 / 2509 / 24726 / 2411 / 2191 / 197
Quartile1st1st1st1st1st1st
Calendar performance
 YTD - 20172016201520142013
Fund16.6%28.2%15.7%23.3%25.3%
Sector8.8%21%3.4%6.7%19.7%
Rank within sector5 / 24751 / 2352 / 2253 / 21356 / 203
Quartile1st1st1st1st2nd
Risk statistics
Alpha
?Alpha is a measure of a fund's over- or under-performance by comparison to its benchmark. If the Alpha is 5, the fund has outperformed its benchmark by 5%; so the greater the Alpha, the greater the outperformance.
13.2
Beta
?Beta estimates a fund's volatility by comparison to that of its benchmark. A fund with a beta close to 1 means that the fund will move generally in line with the benchmark. Higher than 1 and the fund is more volatile than the benchmark and vice versa.
0.9
Sharpe
?This commonly-used measure calculates the level of return over and above the return of a notional risk-free investment, such as cash. The difference in returns is then divided by the fund's volatility. The resulting ratio is an indication of the amount of excess return generated per unit of risk.
2.01
Volatility
?Volatility (or standard deviation), when applied to an investment fund, expresses its risk. It shows how widely a range of returns varied from the fund's average return over a particular period. For example, if a fund had an average return of 5%, and its volatility was 15, this would mean that the range of its returns over the period had swung between +20% and -10%.
11.08
Tracking error
?This measures the standard deviation of a fund's excess returns over the returns of an index or benchmark portfolio. As such, it can be an indication of 'riskiness' in the manager's investment style. A Tracking Error below 2 suggests a passive approach. At 3 and above the the manager will be deploying a more active investment style.
6.51
Information ratio
?This is a useful risk-adjusted measure of actively managed fund performance. It is calculated by deducting the returns of the fund's benchmark from the fund's overall returns, then dividing the result by its tracking error. The higher the Information Ratio the better. It is generally considered that a figure of 0.5 reflects a good performance, 0.75 very good, and 1.00 outstanding.
1.77
R-Squared
?An indication of how closely correlated a fund is to an index or a benchmark. Values for R-Squared range between 0 and 1, with 0 indicating no correlation at all and 1 showing a perfect match. Values upwards of 0.7 suggest that the fund's behaviour is increasingly linked to its benchmark.
0.66
Price movement
52 week high349.68
52 week low264.1
Current bid price-
Current offer price-
Current mid price347.7
Region
1USA61.9%
2UK19.4%
3Spain5.3%
4Denmark3.3%
5Money Market3.2%
6Finland2.8%
7France2.1%
8Switzerland2%
Industry sector
1Consumer Staples31.7%
2Health Care29.1%
3Technology23.7%
4Industrials7.7%
5Consumer Discretionary4.6%
6Money Market3.2%
Asset type
1US Equities61.9%
2UK Equities19.4%
3Spanish Equities5.3%
4Danish Equities3.3%
5Money Market3.2%
6Finnish Equities2.8%
7French Equities2.1%
8Swiss Equities2%
Individual holdings
No data available.
Management
Fund manager group
Fundsmith
Fund manager company
Fundsmith
Fund type
OEIC
Fund objective
The Company will invest in equities on a global basis. The Company's approach is to be a long-term investor in its chosen stocks. It will not adopt short-term trading strategies.
Benchmark
  • MSCI World
Investment style
None
Investment method
Shares
Fund manager
NameSinceBiography
Terry Smith01/11/2010Terry Smith graduated in History from University College Cardiff in 1974. He worked for Barclays Bank from 1974-83 and became an Associate of the Chartered Institute of Bankers in 1976. He obtained an MBA at The Management College, Henley in 1979. He became a stockbroker with W Greenwell & Co in 1984 and was the top-rated bank analyst in London from 1984-89. In 1990 he became head of UK Company Research at UBS Phillips & Drew, a position from which he was dismissed in 1992 following the publication of his best selling book Accounting for Growth. He joined Collins Stewart shortly after, and became a director in 1996. In 2000 he became Chief Executive and led the management buy-out of Collins Stewart, which was floated on the London Stock Exchange five months later. In 2003 Collins Stewart acquired Tullett Liberty and followed this in 2004 with the acquisition of Prebon Group, creating the world's second largest inter-dealer broker. Collins Stewart and Tullett Prebon were demerged in 2006 with Terry remaining CEO of Tullett Prebon until September 2014. In 2010 he founded Fundsmith where he is CEO and CIO. In 2012 he was appointed a Member of the New Zealand Order of Merit for services to New Zealand-UK relations following the success of his campaign to commemorate the New Zealander, Air Marshal Sir Keith Park.
Compliance
IA Recognised, Reporting Fund Status, UCITS IV Compliant
Domicile
No data available.
Fund for sale in
United Kingdom
Fundsmith Equity I Acc
Initial charge-
Annual charge0.9%
Min single investment£5,000,000
Min regular saving£5,000
Available in ISANo
Ongoing charge (OCF)0.96%
Total expense ratio (TER)0.99%
Bid price-
Offer price-
Mid price350
CurrencyGBX
Price updated26/06/2017
TypeAccumulation
Institutional or retail classInstitutional
Domicile-
Citi codeLSX6
Fundsmith Equity I Inc
Initial charge-
Annual charge0.9%
Min single investment£5,000,000
Min regular saving£5,000
Available in ISANo
Ongoing charge (OCF)0.96%
Total expense ratio (TER)0.99%
Bid price-
Offer price-
Mid price324.93
CurrencyGBX
Price updated26/06/2017
TypeIncome
Institutional or retail classInstitutional
Domicile-
Citi codeLSX5
Fundsmith Equity R Acc
Initial charge-
Annual charge1.5%
Min single investment£1,000
Min regular saving£250
Available in ISAYes
Ongoing charge (OCF)1.56%
Total expense ratio (TER)1.59%
Bid price-
Offer price-
Mid price336.34
CurrencyGBX
Price updated26/06/2017
TypeAccumulation
Institutional or retail classRetail
Domicile-
Citi codeLSX2
Fundsmith Equity R Inc
Initial charge-
Annual charge1.5%
Min single investment£1,000
Min regular saving£250
Available in ISAYes
Ongoing charge (OCF)1.58%
Total expense ratio (TER)1.59%
Bid price-
Offer price-
Mid price323.49
CurrencyGBX
Price updated26/06/2017
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeLSX1
Fundsmith Equity T Acc
Initial charge-
Annual charge1%
Min single investment£1,000
Min regular saving£250
Available in ISAYes
Ongoing charge (OCF)1.06%
Total expense ratio (TER)1.09%
Bid price-
Offer price-
Mid price347.7
CurrencyGBX
Price updated26/06/2017
TypeAccumulation
Institutional or retail classRetail
Domicile-
Citi codeLSX3
Fundsmith Equity T Inc
Initial charge-
Annual charge1%
Min single investment£1,000
Min regular saving£250
Available in ISAYes
Ongoing charge (OCF)1.06%
Total expense ratio (TER)1.09%
Bid price-
Offer price-
Mid price324.73
CurrencyGBX
Price updated26/06/2017
TypeIncome
Institutional or retail classRetail
Domicile-
Citi codeLSX4
Data provided by

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