Fundsmith....

Bostonerimus1

I've never been a fan of actively managed funds and would never own Fundsmith, but it isn't a disaster if you own it. It's made money even if it has lagged many other investments. This all comes down to having arbitrary external measures of success rather than your own financial plan's internal requirements. So ask yourself if your investments are doing enough to fulfill your financial goals and if you can't answer that then it's probably more important to understand why you are investing rather than simply trying to maximize return or cry over a perception of spilt milk.

aroominyork

I finally sold my Fundsmith (the Stewardship flavour) on Tuesday. It settles T+4 so I had to wait until today to buy a global index fund (T+2) and during that time, naturally, the market jumped. It feels like Terry having the last word.

talexuser

I sold Fundsmith a couple of years ago in the ISA because no CGT issues. I still have it in the unwrapped again because of CGT but have sold some within the limits, but had a couple of other funds higher up on the sell list. The gain in the unwrapped is 64% since Apr 2019. Recent performance is not brilliant, and he is still trading on his 10 year figures rather than 5 and less.

aroominyork

A hierarchy of a sell list doesn't sound very promising!

talexuser

aroominyork said:

A hierarchy of a sell list doesn't sound very promising!

Why not? None are so bad they are worth selling to incur a tax liablity, but if you have had funds for years some will come off the boil more than others. The problem now is the 3 grand allowance, not enough to sell anything substantial. One example is Monks, this more than doubled my money, so I sold half at the peak when the allowance was over 12K, and more later, but have some left showing a 24k gain. This will take some years to sell, and might even stage a recovery if left long enough and the cycle changes. The ISA has no such problems.

aroominyork

What will you do with the proceeds when you sell? If you plan to move the funds to a different investment or hold as cash, wouldn't you just be waiting to sell Monks etc. at the biggest loss? 

I have a load of unwrapped money in a global index equity fund. I am waiting for a correction, but I'll then buy the same asset in my SIPP/ISA using proceeds from selling a gilt fund. And to offset that, in my GIA I'll buy a low coupon nominal gilt of a similar duration to the wrapped gilt fund I've sold.

talexuser

As I said Monks is in GIA, and a very small part, and just not so bad as to be worth selling and pay tax on. The CGT limit sell is to get 20k for the ISA every tax year, some for the SIPP, and some for the (3k plus lots of 250s) IHT givaway every year to kids and others. The rest is reinvested, as are all dividends. The consistent outperformers nowadays seem to be fewer and further away than ever, except for maybe JGGI, so the majority in both is now in trackers, with some investment trusts in both on the side for the excitement of the ride. The remains of Fundsmith is now the only OIEC left, and even that is showing a 29k gain..

aroominyork

The good thing about the Mag7 outperformance is that few active funds will have matched it and investors will, like me, have moved more money into index funds. I hope John Bogle is sporting a huge grin while he rests.