Fundsmith Equity - Opinions

coyrls

AnotherJoe wrote: »

Thats not really a "downturn" in the generalised sense that this conversation started with*, its a (very unlikely) confluence of events just happening to affect the 29 funds in the FS fund.

* which i understand to be an event affecting an overall geography or sector, if not the world as a whole.

As I explained, I was making a general point about a fund's performance in a previous downturn not necessarily predicting its performance in the next downturn.

I don't really want to be distracted into details that aren't relevant but it wouldn't have to affect all 29 companies in the Fundsmith fund and I didn't say it was likely but if it happened there would also be a "downturn" in the S&P 500, which is what you asked me to compare it to and that downturn would not be as great as the downturn in the Fundsmith fund.

MPN

MonroeM wrote: »

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.

So are you saying that a global fund with more funds and spread over more regions will be better equipped to deal with a downturn? I believe Terry Smith thinks the opposite in that his concentrated fund of successful well established companies that are well leveraged will perform better than an index fund in a downturn but who knows!

AnotherJoe

MPN wrote: »

So are you saying that a global fund with more funds and spread over more regions will be better equipped to deal with a downturn? I believe Terry Smith thinks the opposite in that his concentrated fund of successful well established companies that are well leveraged will perform better than an index fund in a downturn but who knows!

Exactly. I'd just like to know what sort of a downturn it would be that hit FS harder than other equities.

So far all we've had is a self fulfilling but undefined one that only affected the 29 FS companies without stating what it would be. Sure one by one they might get some better competitors, but thats not a downturn, thats normal and over time you would expect TS to sell and buy companies to manage that.

I can see a North American downturn, a US downturn, a UK and or a European, a Far Eastern, global, commodities, precious metals and so on affecting FS in some cases, along with many other equities. But not a "fundsmith downturn"which appears to be what this thread has morphed into