Fundsmith Equity - Opinions

ColdIron

Trinityx wrote: »

Why else would they pick those funds for the discounts?

You might ask why Fundsmith has never been in the W150. It takes two to tango

Eco_Miser

Trinityx wrote: »

Why else would they pick those funds for the discounts?

You might ask why the fund manager would offer HL a discount.

MPN

Linton wrote: »

Is Fundsmith a Global Fund? It's 64% US and 19% UK. Apart from that it would appear to only invest in 5 other countries, all in western Europe.

Yes, I totally agree, I should of said funds that are in the IA Global Sector.

jimjames

Trinityx wrote: »

As to Wealth 150 being a list of funds they have discounts on, I would think they brokered those discounts because they thought they were good funds (and lower fees are always a bonus, no?). Or am I just being naive? Why else would they pick those funds for the discounts?

I think you're being naïve. Look at the history of the W150 list and how funds appear on it. Some funds with no track record appear immediately. Other funds like Lindsell Train don't appear because they "have no track record". Eventually Lindsell Train did appear but at the same time as the discount was offered.

AnotherJoe

MPN wrote: »

So which Global funds would anyone suggest in preference to Fundsmith?

I myself hold Lindsell Train Global Equity and Old Mutual Global Equity. I did switch from Henderson Global Growth to Lindsell Train.

It very much depends what your overall strategy is and how they would fit into that. Not exactly "funds" as they are ITs but how about Scottish Mortgage Trust and Foreign and Colonial?

I own a fair chunk of Fundsmith because I like the strategy and its an outlier to my more general global trackers, I have a few active funds 'topping up' my mostly trackers in my SIPP. Its also mostly outside the UK which makes it a Brexit-antidote.

And yes its high but then again any good fund will often be high or it wouldn't be a good fund

Trinityx

jimjames wrote: »

I think you're being naïve. Look at the history of the W150 list and how funds appear on it. Some funds with no track record appear immediately. Other funds like Lindsell Train don't appear because they "have no track record". Eventually Lindsell Train did appear but at the same time as the discount was offered.

Right. I get it. There is another interesting thing I noticed a few days ago. I used HL's tool see what they recommend for pensions. I can't remember the specific breakdown, but what I do remember is that it showed Lindsell Train Global Equity and some bonds. Lindsell had the lion share.

Anyway, a few days later I try it again, and they only listed funds managed by HL themselves. The management fee is really high and their performance wasn't that great.

That is what prompted me to inquire and look into brokers' recommendations a lot more.

While I am here, whenever I look for help and research on funds, I notice that Motley Fool and Zacks pop up a lot. However they'll give you a carrot and then ask you to pay a lot of money for what is essentially financial advice. Would you spend this money, or do you think there are better research outlets out there?

AnotherJoe

Investors Chronicle I found pretty good for a couple of years ( as long as you can resist the temptation to be trading shares all the time)

Motley Fool i was a member years back but the constant pseudo-spam to pay for access to the tip for the latest and greatest 20-bagger began to grate after a whole.

StellaN

MPN wrote: »

So which Global funds would anyone suggest in preference to Fundsmith?

I myself hold Lindsell Train Global Equity and Old Mutual Global Equity. I did switch from Henderson Global Growth to Lindsell Train.

I used to hold three different global funds, Fundsmith, Newton Global Income & Artemis Global Income.

Recently, I decided I only wanted 2 funds and thought that the Fundsmith & Newton funds did not offer the right mix/variety especially as they both had a couple of the same companies in their top 10 holdings so I decided to sell Newton and go with an IT instead. I chose Scottish Mortgage IT because I thought SMT was more tech based and definitely invested in different companies so would therefore compliment the Fundsmith fund. I still have the Artemis fund at the moment, (although I said I only wanted 2 funds) mainly because it has done so well for me over the past 6 years, however eventually I will sell and split the money between Fundsmith & SMT.

I must say I do like Terry Smith and his philosophy. He currently only has 29 high quality companies in the fund and these are very well established, many of them over 100 years old! As ColdIron said, none of them have a market cap of less than £5BN and another big plus is that he invests his own money into the company!

lpgm

Video of the most recent shareholders meeting is now up on the Fundsmith website and YouTube channel. I think it's always worth hearing what Smith has to say, even if you don't agree with him, or don't want to invest in Fundsmith. There's a section towards the end that covers the relationship with HL - yes, it's all about not offering HL a discounted share class.

kidmugsy

BananaRepublic wrote: »

In my experience past performance is the best guide to future performance, albeit not cast iron, which is why we diversify.

The problem with a fund becoming popular is that it can make it harder for the manager to locate sufficient good companies to buy into since they will have far more money to spend. Certainly this fund has done well in the past.

Swathes of research in the US and Uk reveal that past performance is a feeble guide to future performance of investment managers. Unless you have some revolutionary way of proving all the researchers wrong I'll stick to the belief that it's almost impossible to determine in advance which managers are going to be the stars of the next five or ten years.