FEET Terrry Smith stops managing

[Backache]

https://citywire.co.uk/wealth-manager/n ... home2-list

Be interesting to see the video of the AGM, he doesn't seem to be able to get his plans working here I'd be interested in hearing something a bit more in depth from him.

[doug2500]

It might be a good thing but if they try to be more like the index and get it wrong they could zig just as the market zags. Might be better to stick where they are and wait for the market to come to them?

We'll only really know in another 5 years or so.

[monabri]

The share price has increased by 11% over 5 years...not very impressive. However, TS has had the management charges...ongoing charges of 1.75% pa.

[WorkShy]

I own plenty of Fundsmith but wouldn't touch FEET with a bargepole. Generally, speaking I don't touch EM equities. EM debt provides a much better risk-adjusted return.

The problem is that his basic thesis, that works so well for Fundsmith - the idea that you can just select good companies - and ignore macro is pretty hard to justify in EM. EM macro conditions and, especially EM fx risk, can easily overwhelm single company equity risk. At times, EM FX forward hedging is absolutely vital to take out some of these risks. I'm not convinced FEET can adapt to these realities.

[scrumpyjack]

and dear Terry is living in Mauritius with no CGT, no Inheritance Tax and minimal income tax.

https://citywire.co.uk/investment-trust ... s/a1190348

[JoyofBrex8889]

No complaints from me: Terry Smith has done superbly for me in the original Fundsmith OEIC.

[Steveam]

I hadn't noticed that FEET were paying a dividend but I've just found this in their AR:

"Dividends
Shareholders will note that in 2018 the Company made a revenue
profit and that revenue losses from previous years have now been
reversed. As a result, the Board recommends to shareholders for
their approval a small dividend so that the Company complies with
the investment trust rules regarding distributable income. It is
recognised that such relatively small dividends are not material to
many shareholders but, having looked into the possibility of a
dividend reinvestment plan, the Board has concluded that it is not
practical given the relative quantum of share price and dividend.
Subject to shareholder approval at the forthcoming AGM, a final
dividend of 2p per ordinary share will be paid on 29 May 2019 to
shareholders on the register on 26 April 2019. The associated
ex-dividend date is 25 April 2019.
The Company’s objective remains to provide capital growth rather
than income and any dividends and distributions will, subject to the
investment trust rules, continue to be at the discretion of the Board
from time to time."

I'm not very attentive to my investments so only spotted this as an unexpected divi in May.

Best wishes,

Steve

[westmoreland]

the FEET agm was posted recently: https://www.youtube.com/watch?v=CNLiiHA7dyA

in it, terry smith discusses his position as overseeing the fund, as opposed to dealing with day to day matters. i must admit, the idea of him directly managing a £300m trust, bearing in mind the main fundsmith fund is now about £18bn, was a bit far fetched to me. as i understand it, julian robins is the main man in the fundsmith equity fund.

smith keeps going on about index ETF inflows hindering performance relative to the index. i must admit i don't have the foggiest idea why this seemingly affects performance of FEET, and yet it isn't holding back fundsmith equity. especially seeing as he regularly says that the actively managed emerging markets funds that people are pulling funds from are in fact very similar to the index?

[JoyofBrex8889]

I just watched the FEET AGM and will be looking to buy back in. I believe they have a sound strategy, irrespective of what the rest of the index is doing: I am ultra- wary of tying my funds into too many Chinese companies as expropriation would not be remotely a problem for the Chinese Communist Party. With Tencent and some of the other tech stuff already held by some of my other ITs I am happy with something that is defensive and India focussed.

My main objection to FEET in the past has been the high fees, but these are falling to a more reasonable level with an AMC of 1% going forward.

[JoyofBrex8889]

With the discount widening, today was the day I bought back in.

[Backache]

With the discount widening, today was the day I bought back in.

Terry Smith must have seen your post, he bought 100,00 shares the following day.

[Spet0789]

I doubled my position in FEET last week. I think lower US interest rates (or at least rate hikes becoming less likely) is highly positive for EM economies in general and consumers in particular.

I am relaxed about the management changes, buy into the long-term thesis of compounding at high cash RoE and pleased to pick up shares at a decent discount to NAV.

Nice to see Terry eating his own cooking.

[JoyofBrex8889]

With the discount widening, today was the day I bought back in.

Terry Smith must have seen your post, he bought 100,00 shares the following day.

Glad to see I am seeing the same opportunity and making the same moves as him. I must be doing something right!

I will not need to issue an RNS as my buy was (sadly) two orders of magnitude less! Terry, if you are reading this from the beach in Mauritius, if you need me to give you some tips on when to trade I am happy to consult, for a 1% NAV fee, of course..,,

[monabri]

Using the HL tools , it appears that Vanguard Global EM has trounced FEET over the last 3 years by a factor of 3 (three!) on total return. What is TS planning to do to address this ?

( link to the tool, select "equity" and type in FEET to add to the graph, search for Vanguard Global EM using "Fund" and "manager" then select Vanguard global EM A Acc."


https://www.hl.co.uk/funds/fund-discoun ... ion/charts

[JoyofBrex8889]

Using the HL tools , it appears that Vanguard Global EM has trounced FEET over the last 3 years by a factor of 3 (three!) on total return. What is TS planning to do to address this ?

( link to the tool, select "equity" and type in FEET to add to the graph, search for Vanguard Global EM using "Fund" and "manager" then select Vanguard global EM A Acc."


https://www.hl.co.uk/funds/fund-discoun ... ion/charts

I dont think he needs do much of anything to close the delta: He is doing something very different to the index for a very good reason: His thesis is a lot of what is in the EM index is either not actually emerging (S Korea) or not that good once you drill down into the details, such as who you are partnering up with. If you want to own a lot of opaque Chinese firms partnered up with the CCP ruling elite then go ahead. I expect that in a crisis that you might regret the decision to swim with such sharks.

I suspect that the delta between the EM index and FEET will close. Events will occur as they must. Good businesses will prosper. Elites will demand a cut. Fundsmith have a decent chance of not getting bullied out of the ones they do own because they have screened carefully.