Fundsmith Equity

I was thinking of putting a few groats into Fundsmith Equity but found there were three variants - namely "I"  "R"  and "T".  The returns shown are very slightly different for each variant, probably explained by the annual charge being 0.96%, 1.56% and 1.06% respectively.
My initial thought would be to go with fund "I" just because it has a lower cost ....  but there must be more to it.

Any enlightenment would be appreciated. 
«1

Comments

  • maxsteam
    maxsteam Posts: 718 Forumite
    500 Posts First Anniversary Name Dropper Photogenic
    If you don't understand, don't invest. This advice goes for any investment, not just this particular fund.
  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    edited 20 February 2021 at 1:49PM
    Institutional, Retail and Terry class - same investments but different ongoing charges.
    If you are accessing via a platform then you would want the cheaper Institutional class (as you will also be paying someone a platform fee) and if investing direct they offer the Terry class (as for 0.10% they provide the customer service and ISA wrapper if required). Terry claims to own the T class although with that valuation he could save a bit by moving to iWeb and getting the I class still he doesn't need tips from me and they might not accept offshore clients. You would never want to buy the expensive Retail class that's just there to make the others look cheaper.
    It's a bit worrying that last year Terry started moving his own money into a new private hedge fund which might be shorting stocks and although they made a statement it's still not entirely clear why he is choosing to do this as I am sure he would be able to live comfortably from fundsmith dividends which is what he suggested others might do in a past agm.
  • i8change
    i8change Posts: 423 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    edited 20 February 2021 at 1:59PM
    I was thinking of putting a few groats into Fundsmith Equity but found there were three variants - namely "I"  "R"  and "T".  The returns shown are very slightly different for each variant, probably explained by the annual charge being 0.96%, 1.56% and 1.06% respectively.
    My initial thought would be to go with fund "I" just because it has a lower cost ....  but there must be more to it.

    Any enlightenment would be appreciated. 
    T Class are for Direct Retail investors (see link below). You would save platform charges but pay slightly more (1.05 vs 0.95).
    I Class are for Institutional investors but available to the public in small amounts (less than £5 million!) via Hargreaves Lansdown, AJ Bell and other investment platforms.
    R Class are for advised *Non-UK* retail investors, so not appropriate otherwise.
    Remember if you go direct with them (to save platform fees) you can only pay into *one* Stocks and shares ISA *in each tax year* (but you can open a new ISA with a different provider each year if you want to) so if you want other investments *that year* you would have to go for the I Class on the Stocks & Shares ISA investment platform of your choice.
    Hope this helps. More info below:-

  • Here's Terry's top 10 picks, accounting for about half of his fund. You sure you want that much exposure to these companies?

  • ChilliBob
    ChilliBob Posts: 2,297 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    L'Oréal, because you're worth it.

    Love that he calls a share class 'Terry Class'! 
  • kinger101
    kinger101 Posts: 6,559 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Here's Terry's top 10 picks, accounting for about half of his fund. You sure you want that much exposure to these companies?

    If you went with a global index fund, the top 10 companies would still account for around 1/5th of the value.

    If you pick a managed fund, it's presumably because you want something a bit more concentrated.  Otherwise, you end up with an expensive pseudotracker.
    "Real knowledge is to know the extent of one's ignorance" - Confucius
  • I was thinking of putting a few groats into Fundsmith Equity but found there were three variants - namely "I"  "R"  and "T".  The returns shown are very slightly different for each variant, probably explained by the annual charge being 0.96%, 1.56% and 1.06% respectively.
    My initial thought would be to go with fund "I" just because it has a lower cost ....  but there must be more to it.

    Any enlightenment would be appreciated. 
    Basically it's what you said.

    If you're investing directly with Fundsmith you'll be purchasing the T class.

    If you're using a platform (Hargreaves Lansdown, Interactive Investor or whoever) you'll almost certainly be purchasing the I class but you need to factor in platform fees.
  • valiant24
    valiant24 Posts: 444 Forumite
    Fifth Anniversary 100 Posts Name Dropper
    edited 20 February 2021 at 3:13PM
    Alexland said:
    It's a bit worrying that last year Terry started moving his own money into a new private hedge fund which might be shorting stocks and although they made a statement it's still not entirely clear why he is choosing to do this as I am sure he would be able to live comfortably from fundsmith dividends which is what he suggested others might do in a past agm.
    I've been invested in Fundsmith since the start, and it has made me hundreds of thousands of pounds simply by investing my wife and my wife's ISA allowance for several years.  So I am a big fan.   But what I find more worrying is that "Terry" has recently moved to Mauritius or somewhere.   I don't see how he can as effectively run the business day-to-day from there, although he claims to do so.
    Thus, per another post, I've been thinking of taking some profits for some while.
  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    I thought he had been in Mauritius for many years and it seems reasonable if he benefits from lower tax. I don't really see it as an obstacle to stock picking as Warren Buffet famously avoided Wall St. I am more interested in this new private hedge fund he seems to be running and wondering if it relates to the value style rotation we saw in the market last year.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.3K Banking & Borrowing
  • 252.9K Reduce Debt & Boost Income
  • 453.2K Spending & Discounts
  • 243.3K Work, Benefits & Business
  • 597.8K Mortgages, Homes & Bills
  • 176.6K Life & Family
  • 256.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.