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 is a report from star fund manager Terry Smith's Fundsmith fund for the first half of 2024. The fund returned 9.3%, but lagged the global stock market because it didn't own Nvidia (a chip maker that soared) while the market was driven by a few hot stocks. The fund mainly holds US companies like Microsoft and Meta, and barely trades (only 3.7% turnover). For ordinary investors: it shows that even great funds can underperform in the short term, but over the long run (since launch, 15.4% annualized) they can still win. Worth a read to learn the value of patience and ignoring hype.
In the first half of 2024, the Fundsmith Equity Fund returned +9.3%, underperforming the MSCI World Index's +12.7%. The manager does not hold Nvidia, citing insufficient business predictability; the largest purchase was Texas Instruments (£191 million), and the largest sale was Novo Nordisk (£546 mi
| Metric | H1 2024 | Since Inception (Cumulative) | Since Inception (Annualised) |
|---|---|---|---|
| Fundsmith Equity Fund (T Class Acc) | +9.3% | +610.2% | +15.4% |
| MSCI World Index (£ Net) | +12.7% | +369.6% | +12.0% |
| UK Bonds (5-10 yr) | -2.2% | +23.7% | +1.6% |
| Cash (£) | +2.6% | +15.6% | +1.1% |
Note: The fund does not reference any benchmark; the above is for reference comparison only.
The report does not provide a complete list of the top ten holdings, only disclosing geographic and sector distributions.
Geographic Distribution (by Listing Location)
| Region | 30 June 2024 | 31 December 2023 |
|---|---|---|
| United States | 71% | 69% |
| Europe | 25% | 26% |
| United Kingdom | 4% | 5% |
Sector Distribution
| Sector | 30 June 2024 | 31 December 2023 |
|---|---|---|
| Healthcare | 27% | 27% |
| Consumer Staples | 25% | 29% |
| Information Technology | 13% | 11% |
| Communication Services | 12% | 8% |
| Consumer Discretionary | 11% | 13% |
| Industrials | 6% | 6% |
| Financials | 4% | 4% |
| Government Bonds | 1% | 0% |
| Other Net Assets | 1% | 2% |
Largest Buys (H1 2024)
| Company | Cost (£) |
|---|---|
| Texas Instruments | 191,082,264 |
| Fortinet | 185,134,808 |
| Atlas Copco | 90,243,460 |
| Unilever | 66,324,175 |
| Mettler-Toledo International | 45,118,922 |
| Total Buys | 1,267,721,245 |
Largest Sells (H1 2024)
| Company | Proceeds (£) |
|---|---|
| Novo Nordisk | 545,927,308 |
| Diageo | 307,283,219 |
| McCormick | 221,745,051 |
| Microsoft | 198,608,065 |
| LVMH | 100,918,698 |
| Total Sells | 2,175,705,341 |
New Positions: Texas Instruments (analogue chip manufacturer), and one other undisclosed stock (still being built).
| Item | Value |
|---|---|
| Ongoing Charges Figure (OCF, T Class) | 1.04% |
| Ongoing Charges Figure (OCF, I Class) | 0.94% |
| Ongoing Charges Figure (OCF, R Class) | 1.54% |
| Total Fund Size (T Class Acc) | £4,144,454,593 |
| Total Fund Size (I Class Acc) | £15,256,694,194 |
| Total Fund Size (All Share Classes) | Approx. £24.8bn |
| Portfolio Turnover (H1 2024) | 3.7% |
| Voluntary Trading Costs | £693,032 (0.003% NAV) |
| Total Investment Cost (T Class) | 1.05% |
| Dividend (T Class Acc, per share) | 0.75p |
1. Underperformance vs. Index: The fund returned +9.3% in H1 2024, lagging the MSCI World Index by 3.4 percentage points, primarily due to returns being concentrated in a few stocks (5 stocks contributed 46% of the S&P 500's return, with Nvidia alone contributing 25%).
2. No Holding in Nvidia: The fund holds Apple, Meta, and Microsoft, but not Nvidia, as its business outlook is deemed insufficiently predictable.
3. Largest Positive Contributors: Novo Nordisk (+3.4%), Meta Platforms (+2.7%), Microsoft (+2.0%), Alphabet (+1.0%), Stryker (+0.8%).
4. Largest Negative Contributors: L'Oréal (-0.7%), IDEXX (-0.6%), Nike (-0.6%), Brown-Forman (-0.5%), Waters (-0.5%), attributed to factors including a post-pandemic decline in pet veterinary visits and economic issues in China.
5. Low Turnover: Portfolio turnover was only 3.7%, with voluntary trading costs extremely low (0.003% NAV), reflecting a long-term holding strategy.