Fundsmith

bostonerimus

I have an equity heavy three fund invested portfolio that today is roughly

65% VTSAX (Vanguard US Equity Index)
25% VTIAX (Vanguard International Equity)
10% VWINX (Wellesley Income fund)

It is risky and I don't rebalance anymore

Over the last 5 years VTSAX is up 104%, VTIAX is up 43% and VWINX is up 39%. There are an infinite number of such adequate portfolios. Some are complicated, some are simple and the trick is to find one that allows you to sleep at night and produces a return that is good enough to support your financial plan. This isn't about being better than some external bench mark, or the best in some way, or better than someone else, it's about meeting the goals of your own plan.

What I'm saying is that the numbers up above are meaningless as I never mentioned what I need for my plan to succeed and gains that were far less could be equally ok.

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coyrls said:

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talexuser said:

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I'll be honest here and admit that my best performing fund of all has been my UK equity income fund, therefore I'm not yet convinced about whether investing globally is the right way forward for me.

That's interesting. Which fund and over which timescale?

Artemis Income. 6 years.

What are your other funds?  A world tracker would have outperformed:

 

As aroominyork says, that's the wrong fund, mine is the UK income fund. I won't go into my other funds as many of them are/were absolute dogs. I now have a global (ex UK) tracker to complement the UK fund, but I haven't had it long enough to see the results I'd hoped for, hence the reluctance to pour more into it right now.

jamei305

"Seeing the results" of a tracker won't tell you anything about future performance.

talexuser

I've had Fundsmith in the ISA for 8 years, unwrapped for 6 years (just because couldn't find anything else I fancied at the time) and the only fund in the SIPP for 7 years (just because I can only put in £2880 a year so a minor investment). It is still only 10% or so of the larger pots and obviously has done extremely well over this timescale. A couple of years of treading water is nothing compared to the outperformance but it is the time to keep an eye on it.

I stuck with Woodford at Invesco for 20 plus years during the dotcom boom and great crash for excellent market beating returns and only bailed out a year or so before he imploded his own firm because the writing was on the wall by then (even brokers had sell notices on it way before all the time Hargreaves were still pumping it).

I don't think we have reached anywhere near that stage with Fundsmith but the trends of high inflation and low growth mean times are a changing and complacency is not on the agenda.

aroominyork

I really do not understated why people talk about Fundsmith/LT (or any other well managed fund) and Woodford in the same breath. The latter went seriously off piste, investing in companies and sectors which were unaligned with his expertise or his fund's stated aims. Even though Lindsell Train has had a bad run recently, I do not see an iota of Woodford-ishness in how LT is run - LT has stuck to its knitting but its approach has been out of favour.

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jamei305 said:

"Seeing the results" of a tracker won't tell you anything about future performance.

What does then?

aroominyork

Aged said:

jamei305 said:

"Seeing the results" of a tracker won't tell you anything about future performance.

What does then?

My answer is that you have asked the wrong question. With an active fund you might look at future performance, for example against an index fund you would have chosen if you had invested passively. But with a global index/tracker fund you cannot make a 'wrong' decision or invest in poor performance - it's just that markets might be weak.

NoviceInvestor1

aroominyork said:

I really do not understated why people talk about Fundsmith/LT (or any other well managed fund) and Woodford in the same breath. The latter went seriously off piste, investing in companies and sectors which were unaligned with his expertise or his fund's stated aims. Even though Lindsell Train has had a bad run recently, I do not see an iota of Woodford-ishness in how LT is run - LT has stuck to its knitting but its approach has been out of favour.

I don't think that's the case at all.....LT's approach is quality, compounders. The iShares World Quality Index is up 41% in 3 years, Lindsell Train Global is up 12%. The quality factor has very marginally outperformed a straight global tracker over 3 years, LTGE has vastly underperformed the quality index. They've been the victim of very poor stock picking. 

talexuser

aroominyork said:

I really do not understated why people talk about Fundsmith/LT (or any other well managed fund) and Woodford in the same breath. 

Because Woodford was cheered in the financial press for many many years for the same reasons Smith and Lindsell are, or were until recently, cheered today for outperformance. No other logical reason, other than things that go up must come down and few managers (like politicians) end their careers in triumph. Bolton anyone?
Maybe also wishful thinking for those that missed out?
But a stopped clock eventually tells the right time, the timing is the key

aroominyork

NoviceInvestor1 said:

aroominyork said:

I really do not understated why people talk about Fundsmith/LT (or any other well managed fund) and Woodford in the same breath. The latter went seriously off piste, investing in companies and sectors which were unaligned with his expertise or his fund's stated aims. Even though Lindsell Train has had a bad run recently, I do not see an iota of Woodford-ishness in how LT is run - LT has stuck to its knitting but its approach has been out of favour.

I don't think that's the case at all.....LT's approach is quality, compounders. The iShares World Quality Index is up 41% in 3 years, Lindsell Train Global is up 12%. The quality factor has very marginally outperformed a straight global tracker over 3 years, LTGE has vastly underperformed the quality index. They've been the victim of very poor stock picking. 

The iShares ETF is loaded with technology. LT is loaded with consumer brands. The fact that they both like 'quality' does not make them comparable.

talexuser said:

aroominyork said:

I really do not understated why people talk about Fundsmith/LT (or any other well managed fund) and Woodford in the same breath. 

Because Woodford was cheered in the financial press for many many years for the same reasons Smith and Lindsell are, or were until recently, cheered today for outperformance. No other logical reason, other than things that go up must come down and few managers (like politicians) end their careers in triumph. Bolton anyone?
Maybe also wishful thinking for those that missed out?
But a stopped clock eventually tells the right time, the timing is the key

Was Woodford still cheered after he went off piste? He might have been written about, just as Bolton's Chinese adventure provided good copy, but that's a bit different from cheering.