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  • FIRST POST
    • gudda96
    • By gudda96 21st Oct 19, 3:38 PM
    • 58Posts
    • 9Thanks
    gudda96
    Whts happened to Fundsmith
    • #1
    • 21st Oct 19, 3:38 PM
    Whts happened to Fundsmith 21st Oct 19 at 3:38 PM
    Anyone else shocked about Fundsmith price drop, not looking at another Woodford scenarion are we?
Page 1
    • Linton
    • By Linton 21st Oct 19, 3:46 PM
    • 11,375 Posts
    • 11,795 Thanks
    Linton
    • #2
    • 21st Oct 19, 3:46 PM
    • #2
    • 21st Oct 19, 3:46 PM
    Nothing much has happened with Fundsmith. It is broadly following markets across the world. Because it invests in relatively few investments in particular sectors you would expect it to be more volatile than the general markets, rising higher in the good times and falling further in the bad ones. Currently we are in slightly bad times.
    • A_T
    • By A_T 21st Oct 19, 3:52 PM
    • 723 Posts
    • 525 Thanks
    A_T
    • #3
    • 21st Oct 19, 3:52 PM
    • #3
    • 21st Oct 19, 3:52 PM
    Anyone else shocked about Fundsmith price drop, not looking at another Woodford scenarion are we?
    Originally posted by gudda96
    Sterling has risen - Fundsmith is mostly invested overseas so the fund is worth less in £
    • talexuser
    • By talexuser 21st Oct 19, 3:54 PM
    • 2,853 Posts
    • 2,214 Thanks
    talexuser
    • #4
    • 21st Oct 19, 3:54 PM
    • #4
    • 21st Oct 19, 3:54 PM
    Anyone else shocked about Fundsmith price drop, not looking at another Woodford scenarion are we?
    Originally posted by gudda96
    In a word, no. Seriously if you are shocked by a 1.5% fall, then equities are not for you.
    • Linton
    • By Linton 21st Oct 19, 3:59 PM
    • 11,375 Posts
    • 11,795 Thanks
    Linton
    • #5
    • 21st Oct 19, 3:59 PM
    • #5
    • 21st Oct 19, 3:59 PM
    Its down 5.6% in the past 3 months but still up 17% over the past year so I dont think investors have anythng to complain about.
    • SonOf
    • By SonOf 21st Oct 19, 4:16 PM
    • 1,761 Posts
    • 2,023 Thanks
    SonOf
    • #6
    • 21st Oct 19, 4:16 PM
    • #6
    • 21st Oct 19, 4:16 PM
    If you are unable to tell why a fund has reacted how it has then perhaps that fund is not suitable for you. Especially when you are asking whether it is do with something completely unrelated.
    • Sailtheworld
    • By Sailtheworld 21st Oct 19, 4:20 PM
    • 531 Posts
    • 542 Thanks
    Sailtheworld
    • #7
    • 21st Oct 19, 4:20 PM
    • #7
    • 21st Oct 19, 4:20 PM
    Nothing much has happened with Fundsmith. It is broadly following markets across the world. Because it invests in relatively few investments in particular sectors you would expect it to be more volatile than the general markets, rising higher in the good times and falling further in the bad ones. Currently we are in slightly bad times.
    Originally posted by Linton
    So just sell out of Terry's fund in the bad times (when you expect underperformance) and buy back in during the good times (when you expect outperformance)?
    • Sailtheworld
    • By Sailtheworld 21st Oct 19, 4:29 PM
    • 531 Posts
    • 542 Thanks
    Sailtheworld
    • #8
    • 21st Oct 19, 4:29 PM
    • #8
    • 21st Oct 19, 4:29 PM
    If the OP had asked the same question about Woodford some time ago he would've received similar answers..

    'Yes entirely usual - nothing to see here..'

    'If you need to ask you obviously don't know what you're doing and should stick to Post Office savings'

    Woodford had plenty of cheerleaders although the selective amnesia seems to have kicked in recently.
    • itwasntme001
    • By itwasntme001 21st Oct 19, 4:39 PM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    • #9
    • 21st Oct 19, 4:39 PM
    • #9
    • 21st Oct 19, 4:39 PM
    If the OP had asked the same question about Woodford some time ago he would've received similar answers..

    'Yes entirely usual - nothing to see here..'

    'If you need to ask you obviously don't know what you're doing and should stick to Post Office savings'

    Woodford had plenty of cheerleaders although the selective amnesia seems to have kicked in recently.
    Originally posted by Sailtheworld

    You maybe correct about the replies to Woodford. However the problems with Woodford can not happen with Fundsmith*** unless Fundsmith decided to change strategy completely and start investing in dodgy illiquid scams.


    ***there could be a scenario where many of his holdings tank so much that they become illiquid and difficult to get out of and at the same time investors start pulling money out causing similar difficulties to Woodford. However this would be very very very rare given the names he holds currently.
    • Linton
    • By Linton 21st Oct 19, 4:43 PM
    • 11,375 Posts
    • 11,795 Thanks
    Linton
    So just sell out of Terry's fund in the bad times (when you expect underperformance) and buy back in during the good times (when you expect outperformance)?
    Originally posted by Sailtheworld

    Your powers of prediction must be better than mine. Stay with it on the basis that the good times last longer than the bad ones. If they didnt investing would be pointless. Over each of the past 5 years Fundsmith has outperformed the FTSE World Index. Overall it has produced roughly double the return without putting money into anything esoteric, unusually risky or illiquid, more the opposite.



    I dont hold it and dont plan to.
    • itwasntme001
    • By itwasntme001 21st Oct 19, 4:47 PM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    Your powers of prediction must be better than mine. Stay with it on the basis that the good times last longer than the bad ones. If they didnt investing would be pointless. Over each of the past 5 years Fundsmith has outperformed the FTSE World Index. Overall it has produced roughly double the return without putting money into anything esoteric, unusually risky or illiquid, more the opposite.



    I dont hold it and dont plan to.
    Originally posted by Linton

    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.
    • gudda96
    • By gudda96 21st Oct 19, 4:59 PM
    • 58 Posts
    • 9 Thanks
    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
    • By itwasntme001 21st Oct 19, 5:05 PM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    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.
    Originally posted by gudda96

    Do whatever you want and good riddance.
    • Linton
    • By Linton 21st Oct 19, 5:14 PM
    • 11,375 Posts
    • 11,795 Thanks
    Linton
    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.
    Originally posted by itwasntme001

    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
    • By st182 21st Oct 19, 5:17 PM
    • 45 Posts
    • 169 Thanks
    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
    Working on CC3: -£5000 / -£6000 ; CC1: £0 ; CC2: £0 ; Mortgage: £
    • Prism
    • By Prism 21st Oct 19, 5:19 PM
    • 1,196 Posts
    • 893 Thanks
    Prism
    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.
    Originally posted by itwasntme001
    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
    • By itwasntme001 21st Oct 19, 5:20 PM
    • 442 Posts
    • 191 Thanks
    itwasntme001
    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
    Originally posted by Linton

    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
    • By Prism 21st Oct 19, 5:27 PM
    • 1,196 Posts
    • 893 Thanks
    Prism
    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.
    Originally posted by gudda96
    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
    • By SonOf 21st Oct 19, 5:36 PM
    • 1,761 Posts
    • 2,023 Thanks
    SonOf
    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.
    Originally posted by gudda96
    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
    • By Thrugelmir 21st Oct 19, 5:44 PM
    • 65,334 Posts
    • 57,507 Thanks
    Thrugelmir
    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
    Originally posted by Linton
    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.
    Last edited by Thrugelmir; 21-10-2019 at 5:48 PM.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
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