Fundsmith - Terry Smith commentary.

[Backache]

Sorry, why would anyone with £1k buy the I class?

And what can I buy on HL.

Same reason why anyone else would buy the 'I' class, to save 0•1% costs and you can buy them in small quantities through some platforms I believe.
I have no idea about HL, I buy direct from Fundsmith and have no platform charges.

[scotia]

Sorry, why would anyone with £1k buy the I class?
And what can I buy on HL.

I believe that HL offer the I class in either Income or accumulation units, for one-off investments of £100 or greater. This attracts a Fundsmith charge of 0.95% plus Hl's annual platform charge of 0.45% (for fund holdings less than £250,000)
It appears that direct purchasers from Fundsmith are offered the T class (income or accumulation) which attracts a charge of 1.05%, for investments of £1000 or greater. Another contributor has stated that there is no additional platform charge in such a case. There is a live chat available on the Fundsmith site (http://www.fundsmith.co.uk), so it should be simple to check this out.

[nmdhqbc]

Same reason why anyone else would buy the 'I' class, to save 0•1% costs and you can buy them in small quantities through some platforms I believe.
I have no idea about HL, I buy direct from Fundsmith and have no platform charges.

Unless you invested over £5m then your platform fee is effectively the 0.1% a year you seem to already be aware of.

[XFool]

Sorry, why would anyone with £1k buy the I class?
And what can I buy on HL.

I believe that HL offer the I class in either Income or accumulation units, for one-off investments of £100 or greater. This attracts a Fundsmith charge of 0.95% plus Hl's annual platform charge of 0.45% (for fund holdings less than £250,000)
It appears that direct purchasers from Fundsmith are offered the T class (income or accumulation) which attracts a charge of 1.05%, for investments of £1000 or greater. Another contributor has stated that there is no additional platform charge in such a case. There is a live chat available on the Fundsmith site (http://www.fundsmith.co.uk), so it should be simple to check this out.

Jeez! I can remember when some people used to claim Investment Trusts were "complicated". Do they still say that?

[harryhoudini]

Guys - anyone know or understand what the difference is between Fundsmith T, R and I funds????

Unless I'm going blind I can't see this explained anywhere on their web site!

Hi there,

The "R" is for retail investors- Joe Public
The "I" is for institutional investors- pension funds, insurance cos. and the like.
The "T" has me stumped, I would hazard a guess that is for platforms like Hargreaves Lansdown.

hh

[simoan]

The "T" has me stumped, I would hazard a guess that is for platforms like Hargreaves Lansdown.
hh

The "T" is the Terry class They're the ones he holds and the class of units you buy/sell if you invest directly with Fundsmith.

All the best, Si

[mc2fool]

Guys - anyone know or understand what the difference is between Fundsmith T, R and I funds????

Unless I'm going blind I can't see this explained anywhere on their web site!

The "R" is for retail investors- Joe Public
The "I" is for institutional investors- pension funds, insurance cos. and the like.
The "T" has me stumped, I would hazard a guess that is for platforms like Hargreaves Lansdown.

I own the I class, via ATS, and I'm not an institutional investor, pension fund, insurance co. or the like.

(The I Acc class has a great fund symbol: FUQUIT )

Of the brokers I use, ATS offers only the I class (as does HL it seems), Interactive Investor offers the I & T classes, and IWeb offers all three.

As already noted, the T class (OCF 1.05%) is what you get if you buy from Fundsmith directly. Given that brokers seem to offer the I class (OCF 0.95%) the question should be, what's the point of the R class (OCF 1.55%)?

[StOmer]

I thought that the 'I' class was institutional which allows 'institutions' such as fund platforms to purchase them as the buys/sells are in their name and not the account holders name. This was how Vanguard operated initially when requiring purchases of 100k or more for their LifeStrategy funds. The 'R' class doesn't usually afaik have the high bar to entry.

[xeny]

As already noted, the T class (OCF 1.05%) is what you get if you buy from Fundsmith directly. Given that brokers seem to offer the I class (OCF 0.95%) the question should be, what's the point of the R class (OCF 1.55%)?

Aren't the R class a legacy of reseller trail commission prior to RDR ?

[forrado]

I see Terry Smith recently gave a lengthy video presentation hosted on the Medirect network (28 March to be precise) explaining in some detail the workings of Fundsmith. So, for those who want to see and hear what he had to say, and have 90 minutes to spare, then go to …

https://www.youtube.com/watch?v=YZM9dhiDbzI&t=657s

[Alaric]

Aren't the R class a legacy of reseller trail commission prior to RDR ?

Very possibly. If you go to the Fundsmith site at https://www.fundsmith.co.uk/, it offers you the choice of investing into the T class Acc and T class Inc. Minimum amounts are £ 1000 as a lump sum or £ 100 per month.

[Backache]

Aren't the R class a legacy of reseller trail commission prior to RDR ?

Very possibly. If you go to the Fundsmith site at https://www.fundsmith.co.uk/, it offers you the choice of investing into the T class Acc and T class Inc. Minimum amounts are £ 1000 as a lump sum or £ 100 per month.

If you go to the Fundsmith literature they explain that the R class is the retail class with tail commission.
Incidentally the video above explains the T in the T class stands for Terry.

[smicker]

I've recently had an Accumulation distribution of 317.58 in my sipp which then became Equalisation ACC Units entry of 198.40. When i look at my portfolio i seem to have the same number of units as i had previously. I'd appreciate if someone could explain what has gone on here

[scotia]

I've recently had an Accumulation distribution of 317.58 in my sipp which then became Equalisation ACC Units entry of 198.40. When i look at my portfolio i seem to have the same number of units as i had previously. I'd appreciate if someone could explain what has gone on here

If you purchase an accumulation fund part way through the period in which income is accumulating internally, then you will still be credited with the distribution for the full period, however for taxation purposes the sum will need to be split into real income, and the remainder which is effectively considered as a reduction in the price you paid for the units. Your number of units are in no way affected. Within a tax shelter like a SIPP or an ISA all of these details are irrelevant and can be ignored.
However if you were outside a tax shelter, the equalisation would need to be subtracted from your initial purchase cost when you are computing any Capital Gain. And the distribution minus the equalisation is the actual income which would need to be included in the sum of your investment incomes.
At least - that's what I believe.

[smicker]

Scotia, Thank you for taking the time to reply.

[xeny]

Using this as a place to put fuquit related observations, I spent Sunday evening reading the short form report to the end of June (https://www.fundsmith.co.uk/docs/defaul ... f?sfvrsn=2).

There's an odd (to me at least) footnote in there:

" During the period there was an in specie transfer of a broadly similar portfolio, however a small number of positions were not held in the Fundsmith Equity Fund and were subsequently sold."

which refers to sales of a total of £4.6 million of P & G, BAT and Davide Campari–Milano . Was anyone else aware that FS would allow in specie transfers like that? Presumably it's a service offered to very significant clients.

[Alaric]

Was anyone else aware that FS would allow in specie transfers like that? Presumably it's a service offered to very significant clients.

It's probably not widely known, but maybe all fund management groups allow this. Once upon a time, it could be a cheap way for individual shareholders to dispose of small holdings by transferring them as Share Exchange to a Unit Trust.

It was after all the Kent Council pension fund who pulled the plus on the Woodford fund by asking for their money back.

[Dod101]

Was anyone else aware that FS would allow in specie transfers like that? Presumably it's a service offered to very significant clients.

It's probably not widely known, but maybe all fund management groups allow this. Once upon a time, it could be a cheap way for individual shareholders to dispose of small holdings by transferring them as Share Exchange to a Unit Trust.

It was after all the Kent Council pension fund who pulled the plus on the Woodford fund by asking for their money back.

Now if Woodford had been able to persuade Kent C C to accept its money in specie, Woodford's problems might not have existed, although I thought others had done the same before Kent C C made their request.

Dod