Fundsmith Equity I Acc

Global Growth

Rated Fund 2013-19. A concentrated portfolio of big brands

Fundsmith Equity is no stranger to awards, having being named Money Observer’s Best Larger Global Growth fund in 2016 and 2017. It was highly commended in this category in 2015 and picked up that title again in 2018.

Launched in 2010 by industry stalwart Terry Smith, it has grown to almost £17 billion in size in eight years. Smith’s approach is to pick a small selection of high-quality, resilient global growth companies that are good value and stick with them. Just a handful of holdings have been changed since the fund’s inception. ­

The fund currently holds just 28 firms, with almost 66% of assets in the US market. Smith likes long-established firms with big brands such as PayPal, Microsoft and Pepsico. He backs his convictions by investing his own money alongside investors’.

He also looks for companies with high returns on capital and advantages that are difficult to replicate. Smith believes it is impossible to reliably predict stockmarket movements, but that the strength of the firms the fund holds will allow them to continue to grow their intrinsic values.

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

He says the performance records of the vast majority of active managers suggest far more think they can time investment markets, play the investment and economic cycle successfully and outperform than actually can.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Fundsmith Equity I Acc
Manager
Fundsmith LLP
Type
Open Ended Investment Company
ISIN
GB00B41YBW71
Sector
Global
Launched
01/11/2010
OCF
0.95 %
Risk Rating
4
3 Year Sharpe
1.48
3 Year Alpha
2.94
Yield
0.7 %
Benchmark
MSCI World NR GBP
The fund’s objective is to achieve long term growth in value, investing in shares of companies on a global basis. The fund’s approach is to be a long-term investor in its chosen stocks and it will not adopt short-term trading strategies. The fund aims to invest in businesses: • that can sustain a high return on operating capital employed; • whose advantages are difficult to replicate; • which do not require significant borrowing to generate returns; • with a high degree of certainty of growth from reinvestment of their cash flows at high rates of return; • that are resilient to change, particularly technological innovation; • whose valuation is considered to be attractive; The fund will not invest in derivatives nor hedge any currency exposure.
Holding %
Amadeus IT Group SA A 6.09 %
Microsoft Corp 5.88 %
PayPal Holdings Inc 5.85 %
IDEXX Laboratories Inc 4.71 %
Reckitt Benckiser Group PLC 4.53 %
Facebook Inc A 4.39 %
Philip Morris International Inc 4.37 %
Waters Corp 4.18 %
Becton, Dickinson and Co 4.18 %
Stryker Corp 4.11 %
Region %
United States 64.64 %
United Kingdom 18.46 %
Eurozone 11.43 %
Europe - ex Euro 5.47 %
Sector %
Consumer Defensive 25.72 %
Healthcare 25.71 %
Technology 23.01 %
Industrials 12.43 %
Financial Services 9.62 %
Name
Fundsmith LLP
Address
W1G 0PW, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Terry Smith
Joined 11/01/2010

Terry 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."

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