Fundsmith is the fund firm Terry Smith ("Britain's Warren Buffett") founded in 2010, with a discipline of radical simplicity — Buy Good Companies, Don't Overpay, Do Nothing: a concentrated book of 20-30 high-ROCE global consumer, healthcare and tech franchises with near-zero turnover. His annual shareholder letters are famous for wit and common sense; peak AUM topped £25bn.
This report covers Fundsmith's first full year (2011), where the fund returned 15% while global stocks barely rose 3%. Manager Terry Smith focuses on buying durable, profitable companies like Nestlé, Microsoft, and Procter & Gamble, and holds them for years. For ordinary investors, the key lesson is to stick with quality businesses and ignore short-term noise. The fund’s low turnover (15.7%, mostly due to forced sales) and no currency hedging make it a rare example of disciplined, long-term investing worth studying.
The fund has returned 15.0% since inception, significantly outperforming the MSCI World (3.2%) and FTSE 100 (2.8%). During this period, it voluntarily sold Kimberly-Clark (due to declining ROIC) and Domino's Pizza (overvalued after a 113% annual share price surge). The full-year turnover rate was on
| Share Class | Period | Fund Return | MSCI World (£) | FTSE 100 |
|---|---|---|---|---|
| T Class Acc | Since Inception (2010.11.1 – 2011.12.31) | 15.0% | 3.2% | 2.8% |
| Rank | Company | Weight (%) |
|---|---|---|
| 1 | Becton Dickinson and Company | 5.39 |
| 2 | L’Oréal | 5.34 |
| 3 | Intercontinental Hotels | 5.30 |
| 4 | Nestlé | 5.30 |
| 5 | Microsoft | 5.17 |
| 6 | Unilever | 5.06 |
| 7 | Stryker | 5.05 |
| 8 | Imperial Tobacco | 4.81 |
| 9 | Procter & Gamble | 4.81 |
| 10 | Pepsi | 4.77 |
Sells (including forced and voluntary)
| Share Class | Total Net Assets (GBP) | Net Asset Value per Share (p) | TER (%) | Portfolio Turnover Rate (PTR) | Dividend per Share (p) |
|---|---|---|---|---|---|
| T Class Acc | 110,094,759 | 114.98 | 1.20 | 15.7% | 1.4651* |
| T Class Inc | 14,883,839 | 113.52 | 1.20 | – | 1.4261* |
| R Class Acc | 10,178,969 | 114.32 | 1.69 | – | 0.8637* |
| R Class Inc | 7,992,264 | 113.46 | 1.69 | – | 0.8860* |
| I Class Net Acc | 26,625,935 | 115.09 | 1.10 | – | 1.5930* |
| I Class Net Inc | 61,173,345 | 113.51 | 1.10 | – | 1.5621* |
| Total | ~230,949,111 | – | – | – | – |