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 Fundsmith, a well-known fund run by Terry Smith, for the first half of 2025. It lost 1.9% in pounds, but that's mostly because the pound rose 9% against the dollar—in dollars it actually gained 6.3%. The manager bought animal health firm Zoetis, software company Intuit, and eyewear giant EssilorLuxottica, while selling PepsiCo and Brown-Forman (a spirits maker). For ordinary investors, this shows that even good funds can wobble due to currency moves, but long-term returns remain solid (14.1% annualized since launch). The low turnover (9.2%) means the manager holds stocks for years, a lesson in patience. Worth a read to see how a top value investor thinks.
In the first half of 2025, the Fundsmith Equity Fund declined by 1.9%, underperforming the MSCI World Index (+0.1%). During this period, the fund initiated positions in Zoetis, Intuit, and EssilorLuxottica, while exiting PepsiCo and Brown-Forman, resulting in a portfolio turnover rate of 9.2%. The m
| Metric | H1 2025 | Since Inception (Cumulative) | Since Inception (Annualized) |
|---|---|---|---|
| Fundsmith Equity Fund (T Class Acc) | -1.9% | +593.6% | +14.1% |
| MSCI World Index (£ Net) | +0.1% | +403.6% | +11.6% |
| UK Bonds | +3.8% | +28.3% | +1.7% |
| Cash | +2.2% | +21.1% | +1.3% |
The report does not disclose a complete list of the top ten holdings, only providing geographic and sector allocations.
| Region | Weight (30 June 2025) | Weight (31 December 2024) |
|---|---|---|
| United States | 75% | 75% |
| Europe | 21% | 22% |
| United Kingdom | 4% | 3% |
| Sector | Weight (30 June 2025) | Weight (31 December 2024) |
|---|---|---|
| Healthcare | 27% | 26% |
| Consumer Staples | 19% | 22% |
| Information Technology | 14% | 13% |
| Communication Services | 14% | 14% |
| Consumer Discretionary | 12% | 12% |
| Industrials | 8% | 7% |
| Financials | 5% | 5% |
| Other Net Assets | 1% | 1% |
New Positions:
Exited Positions:
Significant Additions (Largest Buys):
Significant Reductions (Largest Sells):
| Item | Value |
|---|---|
| Total Fund Size (AUM) | £20,024,522,853 (all share classes combined) |
| Ongoing Charges Figure (OCF) - T Class | 1.04% |
| Ongoing Charges Figure (OCF) - I Class | 0.94% |
| Ongoing Charges Figure (OCF) - R Class | 1.54% |
| Portfolio Turnover (H1 2025) | 9.2% |
| Voluntary Transaction Costs (H1 2025) | £1.6M (0.008%) |
| Total Investment Cost (T Class) | 1.06% |
| Dividend (T Class Acc, per share) | 0.86p |
1. Performance Attribution: The fund declined 1.9% in the first half, underperforming the MSCI World Index (+0.1%) by approximately 2 percentage points. The main detractors were Novo Nordisk (-1.7%) and LVMH (-1.1%).
2. Currency Impact: Sterling appreciated from 1.25 at the start of the year to 1.37 at the end of June (a 9% rise), which hurt the fund's performance measured in pounds. The fund actually rose 6.3% in US dollar terms over the same period.
3. Portfolio Adjustments: New positions were established in Zoetis, Intuit, and EssilorLuxottica, while PepsiCo and Brown-Forman were exited. The portfolio turnover rate was 9.2%.
4. Governance Concerns: Novo Nordisk and Coloplast (both controlled by foundations) recently changed their CEOs. The fund manager remains cautious about their subsequent strategic adjustments.
5. Valuation Update Deferred: Due to the seasonality of free cash flow, the fund manager has chosen to postpone the portfolio valuation update until the year-end.