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 Fundsmith Equity Fund performed in the first half of 2020. It beat the global stock market by 6% thanks to big bets on PayPal and Microsoft. The manager also bought Nike and Starbucks when prices were low during the pandemic, and sold Clorox (a cleaning-products company). For regular investors, two things stand out: the fund barely trades (turnover 1.6%), keeping costs very low; and it sticks to companies with strong competitive advantages (like Johnson & Johnson). Worth a read if you want to see a simple, long-term strategy that works.
Fundsmith Equity Fund returned +7.6% in the first half of the year, outperforming the MSCI World Index's +1.0%. The most notable move in this period was the liquidation of Clorox, with the proceeds aggressively deployed into Nike and Starbucks, as the manager believes the latter have better growth p
For the reporting period (first half of 2020) and since inception, fund vs. benchmark performance. Fund returns are based on T Class Acc share net asset value.
| Item | Reporting Period (01.01.20 - 30.06.20) | Since Inception (2010.11.01 - 2020.06.30) |
|---|---|---|
| Fundsmith Equity Fund | +7.6% | Annualised +18.1% |
| MSCI World Index | +1.0% | Annualised +11.4% |
| FTSE 100 Index | -16.9% | Annualised +4.8% |
Major Buys (by cost):
| Company | Cost (£) |
|---|---|
| Nike | 335,774,969 |
| Starbucks | 294,735,466 |
| Philip Morris International | 125,582,797 |
| Clorox | 82,108,169 |
| Johnson & Johnson | 80,296,206 |
Major Sells (by proceeds):
| Company | Proceeds (£) |
|---|---|
| Clorox | 261,644,252 |
| PayPal | 235,340,311 |
| Waters | 149,858,250 |
| Reckitt Benckiser | 147,832,023 |
| Intuit | 64,712,861 |
| Item | Data |
|---|---|
| Ongoing Charges Figure (OCF) | T Class: 1.05% / I Class: 0.95% / R Class: 1.55% |
| Total Fund Size (all share classes) | c. £20.22bn (£20,224,578,390) |
| Portfolio Turnover | 1.6% |
| Voluntary Trading Costs | 0.01% of total assets (1bps) |