Fundsmith Fundamentals and Insights from Key People Involved

Fundsmith is a UK-based investment management company founded by Terry Smith in 2010. Terry Smith is the company's Chief Executive and Investment Director.

Terry Smith has a strong background in the financial industry, having worked at several major investment banks and asset management firms. He is known for his value investing approach.

Fundsmith's investment philosophy is centered around a long-term approach, focusing on buying high-quality companies at a reasonable price. They aim to deliver consistent returns to their investors over the long term.

Terry Smith has stated that Fundsmith's investment process involves a thorough analysis of a company's financials, management team, and competitive position.

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Fundsmith looks for companies that generate high returns on capital and operate in sectors with a large number of everyday transactions, such as consumer staples and medical consumables.

They avoid emerging technology firms and heavily cyclical industries like airlines and real estate. Smith doesn't invest in banks due to their reliance on leverage and financial engineering.

Fundsmith seeks companies with an established competitive advantage, like Automatic Data Processing, which has an "annuity-like" characteristic due to its large installed base of software.

Smith's approach is to "bet on a company that has already won", rather than trying to predict who will win in the future. This is reflected in the fund's investment strategy.

Fundsmith operates a range of investment funds, each with its own unique structure. Fundsmith Limited Partnerships are a key part of this, with three Delaware Limited Partnerships being managed by the company.

These partnerships, including Fundsmith Equity L.P. and Fundsmith Sustainable Equity Fund L.P., follow the same process as Fundsmith's UK OEICs. Smithson L.P. is another example of a Delaware Limited Partnership operated by Fundsmith.

Fundsmith also has a UK-listed investment trust, known as the Smithson Investment Trust, which is another part of the company's fund structure.

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Sicav is a type of investment fund that operates similarly to UK OEICs.

Fundsmith SICAV is a prime example of this, offering two sub-funds that are managed with the same process as their UK counterparts.

Fundsmith SICAV operates two sub-funds, Fundsmith Equity Fund and Fundsmith Sustainable Equity Fund.

These sub-funds are managed using the same process as the UK OEICs, Fundsmith Equity Fund and Fundsmith Sustainable Equity Fund.

This consistency in management process is a key benefit of Sicav funds, providing investors with a reliable and transparent investment option.

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Fundsmith operates three Delaware Limited Partnerships, which are Fundsmith Equity L.P., Fundsmith Sustainable Equity Fund L.P., and Smithson L.P. These partnerships follow the same process as the UK OEICs, Fundsmith Equity L.P., Fundsmith Sustainable Equity Fund L.P., and the UK-listed Smithson Investment Trust.

Fundsmith Equity L.P. and Fundsmith Sustainable Equity Fund L.P. are two of the Delaware Limited Partnerships. The third is Smithson L.P., which is also a Delaware Limited Partnership.

The Delaware Limited Partnerships are a type of investment vehicle used by Fundsmith.

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Fundsmith's performance is a key aspect of understanding its value as an investment. Fundsmith's performance is a key aspect of understanding its value as an investment.

In 2025, Fundsmith's performance was +5.6% as of January and +5.6% from January to January 31st. Fundsmith's performance was +5.6% as of January and +5.6% from January to January 31st.

Over the past few years, Fundsmith's performance has been quite variable. In 2024, Fundsmith's performance was +13.6%. In 2023, it was +13.4%. In 2022, it was -17.3%. Over the past few years, Fundsmith's performance has been quite variable.

The Fundsmith Equity component has performed well, with a +26.6% return in 2024 and +19.6% in 2023. The Fundsmith Equity component has performed well, with a +26.6% return in 2024 and +19.6% in 2023.

Here's a comparison of Fundsmith's performance with some benchmarks:

The Fundsmith portfolio is made up of a diverse range of holdings, with a total of 10 top holdings.

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One of these top holdings is Meta Platforms, a company you may know from its popular social media platforms.

The Fundsmith portfolio also includes Microsoft, a tech giant that's been a stalwart of the industry for decades.

Stryker, a medical technology company, and Novo Nordisk, a pharmaceutical company, are also among the top holdings.

Visa, a leading payment processing company, and Automatic Data Processing, a human capital management company, round out the top 10.

Here are the top 10 holdings in the Fundsmith portfolio:

It's worth noting that past performance is not necessarily a guide to future performance, so it's essential to understand the risks involved.

Risk Management is crucial when investing in Fundsmith. The Fund's portfolio is a global one, which means many investments are not denominated in the currency in which you invest.

This lack of currency hedging means that the value of your shares may rise or fall purely on account of exchange rate movements. The Fund's portfolio complies with UCITS requirements, but it's more concentrated than many other funds, investing in 20 to 30 stocks.

This concentration means that the performance or underperformance of a single stock has a greater effect on the price of the Fund. It's essential to remember that past performance is not a guide to future performance.

Investors should be aware of the potential risks involved and consider seeking professional advice if unsure about the suitability of the Fund for them.

Terry Smith, the manager of Fundsmith Equity, is known for his blunt annual letters to shareholders, which often pull no punches.

Smith accused Paypal of being "intent on snatching defeat from the jaws of victory" and criticized the company for its lack of engagement with Fundsmith, which he claims was a problem long before the management acknowledged it.

He also levelled a similar jibe at Unilever, lamenting that after Nelson Peltz's Trian Partners announced its stake in Unilever, Peltz was invited to join the board, while Fundsmith heard nothing from the company during its first eight years as a shareholder.

Smith's criticism of these companies is not taken lightly, and his blunt approach has earned him a reputation as a straight shooter in the investment world.

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Julian Robins is a key figure at Fundsmith, co-founding the company in 2010 and serving as Partner and Head of Research.

Terry Smith, Fundsmith Equity manager, took aim at PayPal in his thirteenth annual letter to shareholders.

PayPal was the second largest detractor to the fund over the course of the year, contributing to its -13.8% return across the 12 months.

Smith accused PayPal of being “intent on snatching defeat from the jaws of victory” and said the company had squandered its leading position in online payments.

PayPal was a significant detractor to the fund, trailing the MSCI World index by six percentage points.

Smith sold off PayPal in December, having held the stock since it split from eBay in 2015.

He criticized PayPal for its lack of engagement with Fundsmith, saying a representative of the board told them they would think about it, but nothing changed.