Fundsmith Equity T Acc
Rated Fund 2013-2018. A concentrated portfolio of big brands
Fundsmith Equity won Money Observer's Best Large Global Growth Fund award in 2016 and 2017, having previously been highly commended in 2015. It was launched in 2010 by industry stalwart Terry Smith and in just over seven years has grown to £13 billion in size.
Smith's approach is to pick a small selection of high-quality shares and stick with them. The fund currently holds just 29 shares, with over 60 per cent in the US market. He likes to buy long-established firms with big brands. The fund's largest investments include household names such as PayPal, Microsoft and Dr Pepper Snapple. Only a handful of holdings have been changed since the fund's inception.
Other qualities he looks for in companies are a high return on capital and 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 sceptical when other managers talk about diversification, or when they voice the belief that they can buy poor-quality companies when their fortunes and share prices are depressed but about to improve, or sell them close to their peak.With regard to such 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.
Narrative and ratings content all as of 01 January 2018.See all Money Observer rated funds
|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 %|
|United States||64.64 %|
|United Kingdom||18.46 %|
|Europe - ex Euro||5.47 %|
|Consumer Defensive||25.72 %|
|Financial Services||9.62 %|
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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