Whts happened to Fundsmith

gudda96

Well, if thats all the help I can expect, I'll do what you say and put it in the Post Office, whatever happened to " there is no such thing as a silly question".

Wait for the next one to critisise lads, have fun.

itwasntme001

gudda96 wrote: »

Well, if thats all the help I can expect, I'll do what you say and put it in the Post Office, whatever happened to " there is no such thing as a silly question".

Wait for the next one to critisise lads, have fun.

Do whatever you want and good riddance.

Linton

itwasntme001 wrote: »

Why are you comparing Fundsmith to a world index? Shouldn't you compare it to a US tracker (since 70% of fundsmith holdings are in US)? The outperformance is not so great then.


Note: I hold both Fundsmith and US tracker.

Fundsmith at 70% US is arguably closer to the FTSE All-World at 54% than to a US-only index. However you can also look at an S&P500 tracker. Over the past 5 years Fundsmith returned 162% against an S&P500 tracker at 105%, outperforming it in 4 out of the 5 years. Still pretty impressive

st182

I'm not sure what all the speculating is about- I'm afraid I know the exact answer as to why it has gone down- it's really simple- I bought some

Prism

itwasntme001 wrote: »

Why are you comparing Fundsmith to a world index? Shouldn't you compare it to a US tracker (since 70% of fundsmith holdings are in US)? The outperformance is not so great then.

MCSI world is roughly 61% US and Fundsmith is 66% US. I would say its a fairly close split and its what Fundsmith uses to compare itself to.

itwasntme001

Linton wrote: »

Fundsmith at 70% US is arguably closer to the FTSE All-World at 54% than to a US-only index. However you can also look at an S&P500 tracker. Over the past 5 years Fundsmith returned 162% against an S&P500 tracker at 105%, outperforming it in 4 out of the 5 years. Still pretty impressive

True it is still a decent out-performance. Perhaps there is no good benchmark out there to compare it against given it is such a concentrated portfolio. You could argue that the out-performance was expected given the risk taken, although very subjective and hard to quantify of course.


The other issue it that people tend to look at past performance on a linear basis when in fact it should be looked at on a logarithmic scale.

Prism

gudda96 wrote: »

Well, if thats all the help I can expect, I'll do what you say and put it in the Post Office, whatever happened to " there is no such thing as a silly question".

Wait for the next one to critisise lads, have fun.

Its coming off the back of a big rise early summer and then most of the drop has been the pound strength. Its about equal with the world index over 6 months.

SonOf

gudda96 wrote: »

Well, if thats all the help I can expect, I'll do what you say and put it in the Post Office, whatever happened to " there is no such thing as a silly question".

Wait for the next one to critisise lads, have fun.

You are investing in a specialist fund not that specialist but its more suited to those DIY investors that know what they are doing or those that employ an IFA.

If you dont know what you are doing then it is unsuitable for you.

Thrugelmir

Linton wrote: »

Over the past 5 years Fundsmith returned 162% against an S&P500 tracker at 105%, outperforming it in 4 out of the 5 years. Still pretty impressive

Precisely what Woodford was once lauded for, individual stock selection. Once the concept gets copied then outperformance tends to wane. There'll always be a few active managers who buy into certain stocks when others walk away.

PE ratios for a number of US stocks have risen considerably on the back of high demand for the shares. Danger is they fail to deliver on these expectatations.

Prism

Thrugelmir wrote: »

Precisely what Woodford was once lauded for, individual stock selection. Once the concept gets copied then outperformance tends to wane. There'll always be a few active managers who buy into certain stocks when others walk away..

Thats one of the big differences between the Woodford and Fundsmith approaches. Woodford buys what the others don't hoping to be proven correct and Fundsmith buys what everyone else is buying - just more selectively. Both will have their tricky moments, its just that Woodfords arguably takes more skill (or luck) to pull off over the long term.