Fundsmith again.

Linton

https://forums.moneysavingexpert.com/discussion/comment/82069010#Comment_82069010

I agree. One should buy something like fundsmith because one wants the style, not because one believes the manager has some ability to predict future markets. If the style changes the justification for holding tthe fund disappears.

talexuser

I think if you want to go active just to avoid the mag7 magnification in passive there are better funds than Fundsmiths' underperformance.

Linton

https://forums.moneysavingexpert.com/discussion/comment/82069126#Comment_82069126

That is where the interests of the find manager and the investor diverge. The fund manager wants something they can sell, investors want funds that meet their individual needs. Whether the change actually improves performance is irrelevent and is not under the control of the fund manager. In my vciew if the fund no longer has the characteristics the investor wants then they should not buy it.

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/82069257#Comment_82069257

I think you are too purist. The manager and investor both want good performance. If the manager thinks his style is not suited to the current market, there is no reason to stick to a failing strategy because some investors want no compromise in style. Ask a group of Fundsmith investors whether they would rather Smith adapts his style because he sees it as necessary or sticks to a style he thinks will continue to underperform; I know how the majority would reply.

masonic

There was quite a big marketing machine behind the fund, and lots of publicity, so it became a darling of the novice investor. The average punter is probably not wedded to the background investment philosophy and just bought it because they thought it would do well. Clearly investors have been leaving in droves and will continue to do so until things turn around. Terry cannot run a fund properly with an ever diminishing pool of capital.

Whereas ETFs like iShares Edge MSCI World Quality Factor and VanEck Morningstar Global Wide Moat are probably quite a bit more sticky, as you invest in those because you believe in the portfolio composition.

Linton

https://forums.moneysavingexpert.com/discussion/comment/82069353#Comment_82069353

I thiink that if Smith's investors believe that he could devise a different strategy that will provide more consistent higher returns into the future other than by pure chance they are deluded. If there was such a strategy surely someone would have come up with it by now after perhaps 300 years of stock trading. Investors should stop trying to see patterns in what is essentially random data.

Linton

https://forums.moneysavingexpert.com/discussion/comment/82069385#Comment_82069385

I agree that Terry Smith and his colleagues need to convince potential customers that the good times will return. Whether that is of any benefit to the customers is arguable.

Such tilt funds as Wide Moat or Quality may well have useful benefits to investors, but what they dont appear to do is to give higher returns than say a straight index fund. My argument purely relates to the aim of maximising returns, especially over the shorter to medium term. If you have some other objectives that would be a very different matter.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82069623#Comment_82069623

No disagreement here. I mentioned those two only as they are broadly aligned with the same investment philosophy, and would more likely be chosen purposefully.

aldershot

I've been in Fundsmith in a major way since 2013. I started investing when the big figure was 1, so it has, in aggregate, given me a perectly reasonable performance. I liked the philosophy of long term holding. I've been concerned that equities in general, and the US in particular, have looked increasingly unstable. Terry's letter was the catalyst to do something and I'm now out of the fund. Abandoning half the portfolio just looked desperate and at my age, 10 year gilts yeilding close to 5% look increasingly attractive. It's been a good ride, but time to step out.

masonic

Enjoy……………….

https://www.youtube.com/watch?v=MlFSfyNkYO8