Fundsmith Equity - Opinions

economic

MPN wrote: »

Old Mutual and Fundsmith are both very good funds but the main overall difference is that the Old Mutual fund has approx 500 holdings compared to approx 29 for Fundsmith!

exactly. when i compare fundsmith say with vanguard lifestrtegy, yes fundsmith has outperformed a bit but you take a lot more risk with fundsmith with only 29 holdings. risk as well as reward needs to be considered.

aldershot

disclosure: 6 figure sum with Fundsmith.

Read the fund philosophy. Terry Smith is very clear on what he is trying to achieve. He is scathing about active managers being closet index trackers as they have a wide diversity of holdings and will not deviate far from indices except by the drag on the fund from their charges. Read Buffett on the long term affect of churn on performance. Someone has to pay for all those investment bank fees!

Fundsmith has done well by being in foreign stocks during a £ devaluation. One could argue the FTSE100 has achieved a similar result. No one knows what the future holds but not making mistakes (read TS on Tesco) and good analysis (who thought Microsoft was a good call 5 years ago?) give me confidence that they will do well in the long run.

StellaN

Wow Aldershot & BeatTheSystem six figure sums invested solely in Fundsmith! That's a pretty big commitment and conviction but a least you have faith in Terry Smith and his fund.

I had around £80K invested in various global funds (including Fundsmith) but decided I wanted to spread my global investments between 2 different and diversified funds over the long term so now its half and half with Fundsmith and Scottish Mortgage IT.

economic

StellaN wrote: »

Wow Aldershot & BeatTheSystem six figure sums invested solely in Fundsmith! That's a pretty big commitment and conviction but a least you have faith in Terry Smith and his fund.

I had around £80K invested in various global funds (including Fundsmith) but decided I wanted to spread my global investments between 2 different and diversified funds over the long term so now its half and half with Fundsmith and Scottish Mortgage IT.

if you don thave anything else outside the 80k, then it does seem to be all eggs in one basket as both these funds are pure growth funds. IMO you should have part of your portfolio in more value funds or stocks for reduced volatility.

StellaN

economic wrote: »

if you don thave anything else outside the 80k, then it does seem to be all eggs in one basket as both these funds are pure growth funds. IMO you should have part of your portfolio in more value funds or stocks for reduced volatility.

The 80K is the global funds part of my overall investment portfolio. I do have other funds in different regions/sectors but my investments at the current time are nearly 100% equity. However, I do have a fairly substantial cash reserve to last me several years in case of emergencies or market falls instead of investing in bonds/property.

This strategy may change over time but at the moment I'm comfortable with it.

StellaN

I have just watched the Fundsmith 2017 Shareholders AGM on You Tube which is interesting (about 2 hours long).

Terry Smith went to great lengths to point out that he believes his fund will hold up much better in a market crash than many others and indeed the index/trackers? I know a few people on the forum have mentioned that Fundsmith has no proven track record in a crash.

He firmly believes that the company's he invests in will have less to fear because they are well established, top brands and very well leveraged. Only time will tell but it makes sense to me?

MPN

StellaN wrote: »

I have just watched the Fundsmith 2017 Shareholders AGM on You Tube which is interesting (about 2 hours long).

Terry Smith went to great lengths to point out that he believes his fund will hold up much better in a market crash than many others and indeed the index/trackers? I know a few people on the forum have mentioned that Fundsmith has no proven track record in a crash.

He firmly believes that the company's he invests in will have less to fear because they are well established, top brands and very well leveraged. Only time will tell but it makes sense to me?

Thanks for that, I've just taken a look at the YouTube video and it is very interesting.

Terry Smith also offers his thoughts on individual companies such as selling Domino's Pizza and buying Idexx Labs as well as discussing Unilever etc. so well worth watching.

Like you I think his fund will do OK but the old saying 'only time will tell'!

MonroeM

I absolutely disagree, the Fundsmith Fund may have delivered over the past 5 years but we all know that regardless of what Terry Smith says the fund has not really experienced a downturn as yet?

coyrls

MonroeM wrote: »

I absolutely disagree, the Fundsmith Fund may have delivered over the past 5 years but we all know that regardless of what Terry Smith says the fund has not really experienced a downturn as yet?

So why do you think Fundsmith will suffer more than other funds in a downturn?

MonroeM

coyrls wrote: »

So why do you think Fundsmith will suffer more than other funds in a downturn?

I'm not saying the fund will, however it has not been around long enough to experience a downturn so let's wait and see.

I'm also not sure about investing in just 29 funds and mainly US and UK regions as opposed to some other Global funds as an example Old Mutual Global Equity with 500 funds over a more diverse spread of regions.