Fundsmith Equity Fund Interim Report 2021

Interim Performance

Metric	Reporting Period (2021.01.01-2021.06.30)	Since Inception (Cumulative)	Since Inception (Annualized)
Fundsmith Equity Fund (T Class Acc)	+13.1%	+521.2%	+18.7%
MSCI World Index (£ Net)	+11.9%	+252.2%	+12.5%
UK Bonds (Bloomberg/Barclays UK Govt 5-10 yr)	-3.2%	+42.7%	+3.4%
Cash (£ Interest Rate)	+0.0%	+6.3%	+0.6%

• During the reporting period, the fund outperformed the MSCI World Index by approximately 1.2 percentage points.

Top Ten Holdings

The report did not provide a complete list of the top ten holdings, only disclosing the top five and bottom five contributors to performance.

Top Five Performance Contributors (First Half of 2021)

Rank	Company	Contribution (%)
1	PayPal	+1.8
2	Microsoft	+1.5
3	IDEXX Laboratories	+1.4
4	Facebook	+1.2
5	Intuit	+1.2

Bottom Five Performance Detractors (First Half of 2021)

Rank	Company	Contribution (%)
1	McCormick	-0.4
2	Amadeus	-0.2
3	Brown Forman	-0.1
4	Unilever	-0.1
5	Pepsico	0.0

Major Buys and Sells in the Period

Major Buys (First Half of 2021)

Company	Cost (£)
L'Oréal	140,873,177
Unilever	128,237,867
Church & Dwight	115,281,595
Nike	80,177,456
Brown-Forman	77,088,229
Total Buys	846,013,252

Major Sells (First Half of 2021)

Company	Proceeds (£)
Sage	323,015,610
Intertek	135,450,945
Total Sells	458,466,555

• The report noted that Sage and Intertek were fully liquidated.

Fees and Scale

Item	Value
Ongoing Charges Figure (OCF) - T Class	1.05%
Ongoing Charges Figure (OCF) - I Class	0.95%
Ongoing Charges Figure (OCF) - R Class	1.55%
Total Fund Size (AUM, as of 2021.06.30)	£20,974,932,523 (approximately £20.97 billion)
Portfolio Turnover	-2.69%
Voluntary Dealing Cost	£1,267,018 (0.005% of assets)
Total Investment Cost (OCF + Transaction Costs)	1.06%
Dividend (T Class Acc, per share)	0.77p

Key Points from Manager Commentary

• Performance and Market Environment: During the reporting period, the fund outperformed the MSCI World Index by approximately 1% and the FTSE 100 Index by about 2%. Despite a market rotation from "quality stocks" to "value/recovery stocks," the fund's performance remained solid.
• Refuting "Capital Outflow" Reports: The manager noted that media reports of massive fund redemptions were inconsistent with the facts. Net outflows in the first half were only £156 million, while the fund's asset size increased by approximately £3 billion due to market value growth.
• Quality as Key to Long-Term Performance: The manager emphasized that neither recovery nor low valuations can turn a bad company into a good one; quality is the primary determinant of long-term performance.
• Low Portfolio Turnover: The portfolio turnover rate was -2.69% (net selling), with voluntary transaction costs extremely low at 0.005%, reflecting a long-term holding strategy.
• Portfolio Characteristics: The top five performance contributors (PayPal, Microsoft, IDEXX, Facebook, Intuit) were all related to the "digitalization" theme and had appeared frequently in past contribution lists, refuting the notion of "profit-taking."