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Fundsmith Equity Class I - Accumulation (GBP)

Sell:592.74p Buy:592.74p Change: 5.56p (0.95%)
Prices as at 16 April 2021
Change: 5.56p (0.95%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 16 April 2021
Change: 5.56p (0.95%)
Prices as at 16 April 2021
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund does not feature on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. This is not a recommendation to sell; however, if you are thinking of adding to your investments, we believe the Wealth Shortlist is a good place to start. View funds on the Wealth Shortlist »

Terry Smith uses a simple but effective approach: invest in good companies at reasonable share prices and hold them for the long term. It's helped drive the fund's strong performance, though this isn't a guide to future returns. We admire his straightforward investment approach and would like to be given the opportunity to properly analyse the fund. Our process, however, requires access to the fund manager and up-to-date, monthly portfolio data, which some fund groups, including Fundsmith, choose not to disclose. Based on readily-available historical data, had we been able to properly analyse the fund, it's likely that it would have made the Wealth Shortlist. We can't, however, make an exception to our process, so we won't be considering the fund for the list as things stand.

Our view on the sector

It's natural for UK investors to focus on funds investing in their home market. But as the world has become more connected, so has the investment landscape. There are lots of funds investing across the globe, and these can be a great way to diversify an investment portfolio. Funds in the global sector can invest anywhere in the world. But they go about this in different ways. They vary in how much they can invest in certain types of companies, sectors, countries, or regions. Some focus on developed markets or large multinational corporations, while others invest more in higher-risk emerging markets or smaller companies. Some target companies with higher-growth expectations and others search for unloved companies with the potential to recover.

Performance Analysis

The fund's performed better than the IA Global sector average since launch in 2010. It's focused on a few sectors that have done very well in that time, but the fund's performance could struggle if they go through a weaker period. The manager has also invested in some of the strongest performing companies in these sectors, according to our analysis. How it's performed in the past isn't a guide to how it will perform in the future. By investing in a small number of companies, each one can have a big impact on performance. That can be either positive or negative, so it adds risk. As with all investments, the value can go up and down, which means you can get back less than you originally invest.

Investment Philosophy

Smith likes to do things differently from most other fund managers. That's the best way to achieve better performance in his view. He looks for companies that dominate their industry and are difficult to compete with. That might be because customers keep returning to the same product or service. He then invests in them for the long term, so the fund can benefit from the steady growth he expects from them. It also helps keep trading costs down.

Process and Portfolio Construction

The manager invests in around 20 to 30 companies. He generally likes those in the technology, everyday consumer goods, and medical supplies sectors. This may change over time though, depending on where he finds the best investment opportunities. He avoids companies that are more sensitive to the health of the economy or rely on debt to invest for future growth. This includes banks, construction and oil and gas companies. The fund can invest globally, but it's currently focused in developed countries such as the US and the UK. The manager likes companies that have competitive advantages, such as a globally recognised brand. That means they're more likely to keep doing better than competitors and generate steadier earnings. He looks for those that are resilient to change and keep steadily growing by reinvesting their profits. He'll only invest if their shares can be purchased at a price that doesn't reflect the earnings potential. The manager likes to own the shares for as long as he can. He'll normally only sell if he loses confidence in the company or the shares become too expensive.

question mark Manager Track Record Based on HL Quantitative Research

  • Fundsmith Equity R Acc
  • IA Global

Fund Track Record

16/04/16 to 16/04/17 16/04/17 to 16/04/18 16/04/18 to 16/04/19 16/04/19 to 16/04/20 16/04/20 to 16/04/21
Annual return 27.45% 8.10% 24.63% 2.66% 32.80%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

Fundsmith was established in 2010 by Terry Smith. The business is owned and controlled by its partners, who have worked closely together over many years, and is headquartered in London with an office in Connecticut, USA. Fundsmith focuses on delivering superior investment performance at a reasonable cost. The managers look for resilient businesses with excellent performance potential.

Information about the fund

Fund manager biography

manager photo
Manager Name: Terry Smith
Manager start date: 1 November 2010
Manager located in: London

Terry Smith graduated in History from University College Cardiff in 1974. He worked for Barclays Bank from 1974-83 and became an Associate of the Chartered Institute of Bankers in 1976. He obtained an MBA at The Management College, Henley in 1979. He became a stockbroker with W Greenwell & Co in 1984 and was the top-rated bank analyst in London from 1984-89. In 1990 he became head of UK Company Research at UBS Phillips & Drew, a position from which he was dismissed in 1992 following the publication of his best selling book Accounting for Growth. He joined Collins Stewart shortly after, and became a director in 1996. In 2000 he became Chief Executive and led the management buy-out of Collins Stewart, which was floated on the London Stock Exchange five months later. In 2003 Collins Stewart acquired Tullett Liberty and followed this in 2004 with the acquisition of Prebon Group, creating the world's second largest inter-dealer broker. Collins Stewart and Tullett Prebon were demerged in 2006 with Terry remaining CEO of Tullett Prebon until September 2014. In 2012 he was appointed a Member of the New Zealand Order of Merit for services to New Zealand-UK relations following the success of his campaign to commemorate the New Zealander, Air Marshal Sir Keith Park.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account