Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Fundsmith

General discussions about growth strategies which focus primarily on investing for capital growth
Adamski
Lemon Quarter
Posts: 1075
Joined: July 13th, 2020, 1:39 pm
Has thanked: 1465 times
Been thanked: 553 times

Re: Fundsmith

#379199

Postby Adamski » January 21st, 2021, 8:37 am

ReallyVeryFoolish wrote:For those interested in this fund, Terry Smith's annual letter to investors is now available on the Fundsmith website.


Thanks RVF, link below:
https://www.fundsmith.co.uk/docs/defaul ... f?sfvrsn=4

Adamski
Lemon Quarter
Posts: 1075
Joined: July 13th, 2020, 1:39 pm
Has thanked: 1465 times
Been thanked: 553 times

Re: Fundsmith

#380999

Postby Adamski » January 26th, 2021, 5:37 pm

I dropped my holding in Fundsmith today from 5.5% of my portfolio to 1.5%. I realise this may not be the right decision (always impossible to say if it is as don't know how will pan out) and probably a minority on this thread. But to me the recent (three month, one year) performance hasn't justified the cost (OCF 0.95%). Realise this is short term to many but how long do you tolerate underpreformance before doing something, one year, two, three? The one year return is 12.2% less OCF of 0.95% = 11.2%, which is slightly lower than my tracker Fidelity Index World 11.4% - 0.12% = 11.3%. Which is poor compared to its benchmark and peers. 5 year annualised return is a different story. Another reason is reports including from Goldman that markets are frothy and unsustainable, referencing world markets (but what they really mean is the US market). So by switching funds to increase China/Asia Pac have helped reduce my US exposure and increase non-US.

nmdhqbc
Lemon Slice
Posts: 634
Joined: March 22nd, 2017, 10:17 am
Has thanked: 112 times
Been thanked: 226 times

Re: Fundsmith

#381006

Postby nmdhqbc » January 26th, 2021, 6:03 pm

Adamski wrote:The one year return is 12.2% less OCF of 0.95% = 11.2%, which is slightly lower than my tracker Fidelity Index World 11.4% - 0.12% = 11.3%.


Just had a look. The only way i could replicate your year performance info was with the i income units from Jan22 to Jan22 which gives 12.22%. But that number has the OCF of 0.95% already baked into it. It's not a separate charge. So 12.22% is the return you get. Add 0.95% to get an estimate of the funds underlying / pre charges performance. Unless you're using a date I've not tried yet. The site I used (AIC) would not let me use 26th Jan. So maybe that's what you've got here.

xeny
Lemon Slice
Posts: 450
Joined: April 13th, 2017, 11:37 am
Has thanked: 233 times
Been thanked: 154 times

Re: Fundsmith

#383169

Postby xeny » February 2nd, 2021, 7:24 pm

Adamski wrote:but how long do you tolerate underpreformance before doing something, one year, two, three?.


Probably at least a year. The character of what has returned well has changed over the past few months - maybe what is characterised as a rotation into value (or what Terry calls junk or similar).

I've got various moderate yield low growth assets I've not got round to getting rid of that have returned about 20% over the last say 4 months. I consider that a pleasant bonus for not finding the share certificates.

IMHO, if you're going to sell for a few months underperformance (I'm not unhappy at 18.3% for 2020 as a whole), I'd suggest putting the whole lot in LS80 or similar (say VWRL and an appropriate bond fund) and not looking at the portfolio until you need money out of it, you stand too high a risk or buying into things just as a run of good performance comes to an end.

AWOL
Lemon Slice
Posts: 563
Joined: October 20th, 2020, 5:08 pm
Has thanked: 366 times
Been thanked: 277 times

Re: Fundsmith

#427097

Postby AWOL » July 12th, 2021, 4:57 pm

I have also been an investor since almost the beginning and agree with the last couple of posts. When Fundsmith launched quality shares were cheap and neglected and he had clearly seen a good entry point. They are no longer cheap and neglected. I still have a large holding but I think I will scale back not because the management has gone if the boil, I see no sign of that, it has been excellent, but because other factors will have their day. I don't have any prophetic ability but I do wonder how long value can shine for. I think it will do well when the world's economy picks up being that I don't know. Younger members may not remember that value dominated for a long time and growth funds offered poor returns based on their part performance.

Has the tide turned?

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#427140

Postby ADrunkenMarcus » July 12th, 2021, 6:25 pm

ReallyVeryFoolish wrote:I have a similar situation. But what do you buy if you sell Fundsmith? A serious question. Since in the last year to Friday just gone it has returned a little over 25 per cent. Not to be passed over lightly.


Smithson?

(I hold it as 50% of my pension. No holding in Fundsmith.)

Best wishes

Mark.

AWOL
Lemon Slice
Posts: 563
Joined: October 20th, 2020, 5:08 pm
Has thanked: 366 times
Been thanked: 277 times

Re: Fundsmith

#427152

Postby AWOL » July 12th, 2021, 6:55 pm

ReallyVeryFoolish wrote:
AWOL wrote:I have a similar situation. But what do you buy if you sell Fundsmith? A serious question. Since in the last year to Friday just gone it has returned a little over 25 per cent. Not to be passed over lightly.

RVF


That is a good question. I have struggled to answer it so haven't sold any Fundsmith. SWDA is a pedestrian possibility and the global nature of it brings the average P/E down a bit. My last purchase was Monks using profits taken from Smithson so that's probably a BUY signal for SSON and a sell signal for MNKS :lol:

Aminatidi
Lemon Slice
Posts: 428
Joined: March 4th, 2018, 8:22 pm
Has thanked: 61 times
Been thanked: 116 times

Re: Fundsmith

#427165

Postby Aminatidi » July 12th, 2021, 7:16 pm

ReallyVeryFoolish wrote:
AWOL wrote:I have also been an investor since almost the beginning and agree with the last couple of posts. When Fundsmith launched quality shares were cheap and neglected and he had clearly seen a good entry point. They are no longer cheap and neglected. I still have a large holding but I think I will scale back not because the management has gone if the boil, I see no sign of that, it has been excellent, but because other factors will have their day. I don't have any prophetic ability but I do wonder how long value can shine for. I think it will do well when the world's economy picks up being that I don't know. Younger members may not remember that value dominated for a long time and growth funds offered poor returns based on their part performance.

Has the tide turned?

I have a similar situation. But what do you buy if you sell Fundsmith? A serious question. Since in the last year to Friday just gone it has returned a little over 25 per cent. Not to be passed over lightly.

RVF


Good to get some different perspectives on Fundsmith.

I have 10% in it right now.

Every time I read/see/hear anything by Terry Smith I'm very sorely tempted to make it a lot more.

tjh290633
Lemon Half
Posts: 8209
Joined: November 4th, 2016, 11:20 am
Has thanked: 913 times
Been thanked: 4097 times

Re: Fundsmith

#427182

Postby tjh290633 » July 12th, 2021, 8:06 pm

ReallyVeryFoolish wrote:I have a similar situation. But what do you buy if you sell Fundsmith? A serious question. Since in the last year to Friday just gone it has returned a little over 25 per cent. Not to be passed over lightly.

RVF

These shares in my portfolio have done better than that so far this year:

06/07/2021         

Epic Change
IMI 47.12%
BT.A 44.54%
KGF 37.43%
LLOY 27.44%
AV. 27.09%
MARS 24.80% (Now 10.85%)

That was last Tuesday, so slightly out of date now. It is often the case that last years losers are this years winners, and vicce veresa.

TJH

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#427197

Postby ADrunkenMarcus » July 12th, 2021, 9:00 pm

ReallyVeryFoolish wrote:Fundsmith has averaged something like 18 or 19% (I haven't checked recently but it's of that order) per annum for almost 11 years with tolerable volatility. How many of those stocks did that? (None of mine).


Probably none or few of mine, either. I do have some good'uns:

Simply looking at the share prices and ignoring dividends (an important component):

Diploma (held since November 2012) has returned 23% CAGR to date;
Renishaw (held since October 2011) has returned 20% CAGR to date;
Spirax Sarco Engineering (held only since March 2015) has returned 28% CAGR to date.

Best wishes


Mark.

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#427201

Postby ADrunkenMarcus » July 12th, 2021, 9:24 pm

ReallyVeryFoolish wrote:Well done on some excellent stock picking. Something I generally sub-contract to managers such as Smith or Yiu at Blue Whale. I do hold some stocks, but by far my best buy has been Fundsmith. I am amongst the world's worst stock pickers. At least I do know that, which is a positive.


Thanks, but it was more luck than judgement. (I did hold a small number of Patisserie Holdings because the financials looked good: they did, because they were fake! I had a large holding in my pension, which I sold above £4, but I kept a smaller holding in my dividend growth portfolio which got extirpated.) I did feel smug when Smithson's portfolio list included Spirax and Diploma, though.

Best wishes


Mark.

tjh290633
Lemon Half
Posts: 8209
Joined: November 4th, 2016, 11:20 am
Has thanked: 913 times
Been thanked: 4097 times

Re: Fundsmith

#427220

Postby tjh290633 » July 12th, 2021, 11:08 pm

ReallyVeryFoolish wrote:Congratulations, naturally. I also have some shares that did more than Fundsmith over the last year.

However, Fundsmith has averaged something like 18 or 19% (I haven't checked recently but it's of that order) per annum for almost 11 years with tolerable volatility. How many of those stocks did that? (None of mine).

RVF

Since you ask, here are the IRR figures for my portfolio, since the dates indicated.:

EPIC   Share                            IRR      Since    
IMI IMI plc 44.78% 30-Mar-09
RIO Rio Tinto plc 34.87% 27-Apr-16
IMB Imperial Brands plc 21.31% 01-Oct-96
LLOY Lloyds Banking Group plc 17.02% 22-Dec-88
ADM Admiral Group plc 16.40% 05-Mar-14
AZN AstraZeneca plc 16.04% 01-Jun-93
DGE Diageo plc 15.77% 06-May-09
SMDS DS Smith plc 14.13% 08-Feb-07
NG. National Grid plc 13.68% 20-Oct-00
CPG Compass Group plc 12.95% 31-Jan-01
TATE Tate & Lyle plc 12.74% 21-Jul-99
RB. Reckitt Benckiser Group plc 12.47% 21-Mar-11
LGEN Legal & General Group plc 11.55% 14-Jun-16
ULVR Unilever plc 11.10% 19-Feb-10
BA. BAe Systems plc 11.02% 26-Nov-99
SGRO Segro plc 10.30% 04-Sep-07
SSE Scottish & Southern Energy plc 10.28% 28-Sep-10
UU. United Utilities Group plc 10.23% 09-Aug-01
BT.A BT Group plc 10.16% 28-Nov-84
PHP Primary Health Properties plc 9.44% 25-Mar-20
BP. BP plc 9.30% 09-Nov-79
BATS British American Tobacco plc 8.70% 19-Feb-10
KGF Kingfisher plc 7.98% 04-Sep-07
BLT BHP Billiton plc 7.90% 19-Feb-10
GSK GlaxoSmithKline plc 7.17% 28-Sep-10
BLND British Land plc 5.94% 01-Oct-10
TSCO Tesco plc 5.87% 19-Jun-97
S32 South32 Ltd 5.79% 18-May-15
AV. Aviva plc 5.70% 26-Oct-10
VOD Vodafone Group plc 5.60% 16-Aug-06
PSON Pearson plc 5.21% 22-Oct-09
TW Taylor Wimpey plc 4.92% 30-Aug-05
RDSB Royal Dutch Shell plc B 4.51% 07-Jun-06
MKS Marks & Spencer plc 4.29% 09-Feb-70
MARS Marstons plc 2.92% 17-Feb-11
IGG IG Group Holdings plc -5.29% 29-Dec-20

Median 10.20%

I'm not claiming anything special, but pointing out that Fundsmith is not unique.

TJH

simoan
Lemon Quarter
Posts: 2092
Joined: November 5th, 2016, 9:37 am
Has thanked: 463 times
Been thanked: 1457 times

Re: Fundsmith

#427251

Postby simoan » July 13th, 2021, 7:49 am

What utterly ridiculous performance comparisons are being made on this thread! You cannot meaningfully compare the CAGR returns of your best performing individual shares to the performance of a fund, like Fundsmith. I guarantee the overall CAGR of Fundsmith will blow away the performance of the portfolios that contain these shares.

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Fundsmith

#427264

Postby monabri » July 13th, 2021, 8:43 am

simoan wrote:What utterly ridiculous performance comparisons are being made on this thread! You cannot meaningfully compare the CAGR returns of your best performing individual shares to the performance of a fund, like Fundsmith. I guarantee the overall CAGR of Fundsmith will blow away the performance of the portfolios that contain these shares.


A slightly out of date article (Oct 2020)

https://www.sharesmagazine.co.uk/articl ... ne-so-well

"Since inception in 2010 the fund has delivered a compound annual growth rate (CAGR) of 18.3% a year after fees, which means investors have seen the value of their investment go up more than five-fold."

ADrunkenMarcus
Lemon Quarter
Posts: 1584
Joined: November 5th, 2016, 11:16 am
Has thanked: 672 times
Been thanked: 479 times

Re: Fundsmith

#427270

Postby ADrunkenMarcus » July 13th, 2021, 9:10 am

simoan wrote:What utterly ridiculous performance comparisons are being made on this thread! You cannot meaningfully compare the CAGR returns of your best performing individual shares to the performance of a fund, like Fundsmith.


That's the contrast being drawn. I have a few good ones which have beaten Fundsmith but I don't think anyone claimed their portfolio had beaten it overall.

Best wishes


Mark.

monabri
Lemon Half
Posts: 8396
Joined: January 7th, 2017, 9:56 am
Has thanked: 1539 times
Been thanked: 3428 times

Re: Fundsmith

#427318

Postby monabri » July 13th, 2021, 10:34 am

tjh290633 wrote:Since you ask, here are the IRR figures for my portfolio, since the dates indicated.:

EPIC   Share                            IRR      Since    
IMI IMI plc 44.78% 30-Mar-09
RIO Rio Tinto plc 34.87% 27-Apr-16
IMB Imperial Brands plc 21.31% 01-Oct-96
LLOY Lloyds Banking Group plc 17.02% 22-Dec-88

[tablulated data removed - to shorten the post]

MKS Marks & Spencer plc 4.29% 09-Feb-70
MARS Marstons plc 2.92% 17-Feb-11
IGG IG Group Holdings plc -5.29% 29-Dec-20

Median 10.20%

I'm not claiming anything special, but pointing out that Fundsmith is not unique.

TJH


Sorry Terry but shouldn't you include your "Oozlums" in the calculation if you are quoting a median figure?

flyer61
Lemon Slice
Posts: 575
Joined: November 11th, 2016, 12:53 pm
Has thanked: 130 times
Been thanked: 208 times

Re: Fundsmith

#427436

Postby flyer61 » July 13th, 2021, 5:02 pm

FWIW I have come to the conclusion that TS's way of investing stands the test of time. My biggest individual shareholdings are all from his stable. The plan is to hold for the ultra long term. Pepsico PEP demonstrated today why I should not tinker one iota.

If buying a share that is not in the FS, Smithson stable I always ask myself why I am not buying one that he has. Whats not to like about buying more L'oreal for example.

Arborbridge
The full Lemon
Posts: 10369
Joined: November 4th, 2016, 9:33 am
Has thanked: 3601 times
Been thanked: 5227 times

Re: Fundsmith

#427444

Postby Arborbridge » July 13th, 2021, 5:26 pm

Why didn't I invest earlier and more? I've been plugging some in monthly since 2015 and the XIRR last time I checked was around 16%.

But there's always the thought: how does he do it, and how can it possibly carry on being this good?

Knocks spots off most managers and two-three times better than I can do. But, Woddford, etc - I would feeling giddy putting too much money in one fund.



Arb.

Aminatidi
Lemon Slice
Posts: 428
Joined: March 4th, 2018, 8:22 pm
Has thanked: 61 times
Been thanked: 116 times

Re: Fundsmith

#427464

Postby Aminatidi » July 13th, 2021, 6:51 pm

Is there a situation where people think Fundsmith could go terribly wrong?

I don't mean lag behind the index a bit I mean literally go terribly badly wrong.

scrumpyjack
Lemon Quarter
Posts: 4814
Joined: November 4th, 2016, 10:15 am
Has thanked: 606 times
Been thanked: 2675 times

Re: Fundsmith

#427466

Postby scrumpyjack » July 13th, 2021, 6:58 pm

Aminatidi wrote:Is there a situation where people think Fundsmith could go terribly wrong?

I don't mean lag behind the index a bit I mean literally go terribly badly wrong.


I would like to say Terry is too sensible to do a Woodford. However Woodford was OK as long as he was part of a big organisation and answerable to independent management and defined processes. He went off the rails when he effectively became a one man band doing whatever he liked and not having to go through processes and challenges by others as happens in large organisations.

I suspect Terry is very much his own master, so I don't think one could rule it out completely.


Return to “Growth Strategies”

Who is online

Users browsing this forum: No registered users and 5 guests