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 how the Fundsmith fund performed in the first half of 2013. It returned 21.5%, beating the market by a lot. The fund only buys high-quality companies with strong competitive advantages (like a 'moat'), such as Domino's Pizza, Microsoft, and Procter & Gamble, and trades very rarely (turnover rate of 0.19%, meaning it barely buys or sells). This keeps costs low. For ordinary investors, it shows that picking good companies and holding them long-term can work well. But the manager warns that part of the gain came from stocks getting more expensive, not from better business results, so be cautious. It's worth reading because it demonstrates a simple, disciplined investing approach.
The fund's first-half return was +21.5%, significantly outperforming the MSCI WORLD's +16.4%. During the period, it added Swedish Match and Procter & Gamble, and fully exited Schindler, Serco, and Sigma-Aldrich. The manager emphasized the low turnover rate of 0.19% to control costs, and flagged the
| Indicator | Fund (T Class Acc) | MSCI WORLD £ | MSCI EAFE £ | FTSE 100 |
|---|---|---|---|---|
| Period Return (01.01.13 - 30.06.13) | +21.5% | +16.4% | +11.8% | +7.9% |
| Return Since Inception (01.11.10 to 30.06.13) | 57.3% | - | - | - |
| Rank | Company | Weight as of 30.06.13 | Weight as of 31.12.12 | Change |
|---|---|---|---|---|
| 1 | Domino's Pizza | 5.77% | 5.18% | +0.59% |
| 2 | Stryker | 5.75% | 5.28% | +0.47% |
| 3 | Dr Pepper Snapple | 5.72% | 5.60% | +0.12% |
| 4 | Microsoft | 5.35% | 4.79% | +0.56% |
| 5 | Reckitt Benckiser | 5.17% | 5.60% | -0.43% |
| 6 | Imperial Tobacco | 4.84% | 5.24% | -0.40% |
| 7 | Becton Dickinson and Company | 4.76% | 4.82% | -0.06% |
| 8 | Swedish Match | 4.50% | - | New |
| 9 | Procter & Gamble | 4.45% | - | New |
| 10 | Automatic Data Processing | 4.29% | 4.91% | -0.62% |
| Item | Value |
|---|---|
| Total Fund Size (AUM) | Approx. £1,484,974,000 (all share classes combined) |
| Ongoing Charges Figure (OCF) - T Class Acc | 1.10% |
| Ongoing Charges Figure (OCF) - I Class Net Acc | 1.00% |
| Ongoing Charges Figure (OCF) - R Class Acc | 1.60% |
| Total Cost of Investment (TCI) - T Class Acc | 1.22% (includes OCF and transaction costs) |
| Portfolio Turnover Rate | 0.19% |
| Dividend (T Class Acc) | 1.3036 pence per share (includes declared but unpaid dividends) |