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.
Terry Smith's Fundsmith fund returned just 0.8% in 2025, far behind the market's 12.8%. Why? The market was dominated by a few tech giants like Nvidia and Tesla, which Smith refuses to buy because they don't meet his quality standards. A weaker dollar also hurt returns. For ordinary investors, this is a reminder not to chase hot stocks. Instead, focus on companies with strong cash flow and high profits—and hold them patiently. Smith's honest, long-term approach is worth paying attention to.
In 2025, the fund returned +0.8%, underperforming the MSCI World Index's +12.8%. During the period, the largest sales were Meta Platforms (approximately £1.7 billion) and Microsoft (approximately £1.45 billion), with complete exits from PepsiCo and Brown-Forman; the largest purchase was Zoetis (appr
| Item | 2025 (Year) | Cumulative Since Inception (From 2010.11.01) | Annualised Since Inception |
|---|---|---|---|
| Fund | +0.8% | +612.9% | +13.8% |
| MSCI World Index (Sterling Net Return) | +12.8% | +467.6% | +12.1% |
| IA Global Peer Average | — | +290.8% | +9.4% |
Source: Table on page 5 of the report. Since inception, the fund has outperformed the index by 1.7% p.a., with a Sortino ratio of 0.75 (index 0.48).
The report does not provide a complete "top ten holdings" table with specific market values/weights. Portfolio characteristics are disclosed as follows:
| Metric | 2025 | 2024 |
|---|---|---|
| Number of Stocks | 27 | — |
| Weighted Average Free Cash Flow Yield | 3.7% | 3.1% |
| Portfolio Weighted ROCE | 31% | 32% |
| Portfolio Weighted Gross Margin | 62% | 64% |
| Portfolio Weighted Operating Margin | 28% | 30% |
| Cash Conversion Rate | 94% | 85% |
New Positions (Buys):
Closed Positions (Sold Entirely):
New Holdings (Received from Spin-off):
Significant Increases (Listed as "Largest Buys"):
Significant Reductions/Closed Positions (Listed as "Largest Sells"):
| Item | Data |
|---|---|
| Ongoing Charges Figure (OCF) | 1.04% |
| Total Cost of Investment (TCI, including transaction costs) | 1.06% |
| Total Fund Assets (T Acc + T Inc shares) | Approximately £3.465 billion |
| Turnover Rate | 12.7% |
| Voluntary Transaction Costs as % of Average Fund Value | 0.008% (approx. 1 basis point) |
Dividends: T Class Accumulation distributed 2.13 pence per share; T Class Income distributed 1.93 pence per share.