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FUNDSMITH EQUITY I

FUNDSMITH EQUITY I - Overview

Overview of FUNDSMITH EQUITY I Buy in ISA Buy in Investment Account

The fund targets long term growth by investing in developed world equities. Manager Terry Smith invests in a concentrated portfolio of large, liquid stocks, then holds them for the long term - this is a buy-and-hold strategy. He invests in "quality" companies, defined as those able to sustain high rates of return on capital, in cash, often through intangible assets such as brands that deter competition. These are typically found in Europe, UK and North America and often in the consumer staples sector.

  • Standard Initial Charge 0.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector Global
Structure OEIC
Launched November, 2010
Size £12,896m
Yield 0.8%
Charging basis Income
Dividends paid 28 Feb, 31 Aug

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.90%
Ongoing charges figure 0.97%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Investor Information Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

Fund manager Terry Smith has enjoyed a long and successful career in finance, notably upsetting the City establishment with his book "Accounting for Growth", published in 1992. He has strong views on the fund management industry and has put these into practice in the Fundsmith Equity fund and in a previous company's pension fund. Historically this approach has beaten the market over time, whilst also providing low volatility returns and a degree of protection in falling markets.

Portfolio

Allocation Proportion(%)
Equity 97
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 3
Allocation Proportion(%)
UK 28
Europe 13
North America 59
Japan 0
Pacific 0
Emerging Markets 0
Allocation Proportion(%)
Large Caps 82
Mid Caps 17
Small Caps 1
View all performance data for this fund

Investment process

Ideas are sourced through quantitative screening, monitoring corporate actions for new companies, and by reading annual reports. Portfolio companies must meet strict investment criteria: high quality businesses that can sustain a high return on operating capital employed; businesses whose advantages are difficult to replicate; businesses which do not require significant leverage to generate returns; businesses with a high degree of certainty of growth from reinvestment of their cash flows at high rates of return; businesses that are resilient to change, particularly technological innovation; businesses whose valuation is considered to be attractive. These criteria typically lead the fund to have a bias to consumer staples, IT, Industrials and healthcare with little or no exposure to financials and commodity companies. The fund is unconstrained, will typically include between 20-30 companies and may be susceptible to rising interest rates given its quality growth bias.

Live feed

Bid price(inc) 334.66p
Accum units 362.56p
Fund commentary 27/11/15
Fund data updated on 11/12/17

Asset allocation

Allocation Proportion(%)
Equity 97
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 3

Equity Geographic

Allocation Proportion(%)
UK 28
Europe 13
North America 59
Japan 0
Pacific 0
Emerging Markets 0

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 82
Mid Caps 17
Small Caps 1

Top 10 holdings

As at: 31/10/2017
%Dr Pepper Snapple Group Inc
%Novo-Nordisk As
%Stryker Corp
%Idexx Laboratories Inc
%International Hotel Investment
%Paypal Hldgs Inc
%Amadeus It Group Sa
%Microsoft Corp
%Waters Corp
%Bard(C.r.) Inc
Source: Trustnet

Sector breakdown

Health Care 29%
Technology 28%
Consumer Staples 28%
Industrials 9%
Consumer Discretionary 4%
Money Market 2%

Portfolio details

20-30 stocks.

Constraints

There are no formal constraints and the portfolio may be concentrated in certain sectors or countries.
The portfolio usually has very little commonality with the benchmark and so performance can be expected to differ markedly on occasions.

Average monthly relative returns Bestinvest MRI
12/13 13/14 14/15 15/16 16/17   3 years 5 years Career 3 years 5 years Career
-0.14% 0.59% 0.78% 0.20% 0.63%   0.54% 0.41% 0.43% 98.70% 99.40% 99.60%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Terry Smith

Manager. Smith graduated in History from University College Cardiff in 1974. He worked for Barclays Bank from 1974-83. He obtained an MBA at The Management College, Henley in 1979. He became a stockbroker with W Greenwell & Co in 1984 and was the top-rated bank analyst in London from 1984-89. In 1990 he became head of UK Company Research at UBS Phillips & Drew, a position from which he was dismissed in 1992 following the publication of his book Accounting for Growth. He joined Collins Stewart shortly after, becoming a director in 1996. In 2000 he became chief executive and led the management buy-out of Collins Stewart, which was floated on the London Stock Exchange five months later. Collins Stewart acquired Tullett Liberty in 2003 and Prebon Group in 2004, creating the world's second largest inter-dealer broker. Collins Stewart and Tullett Prebon were demerged in 2006.

Track record

Terry Smith has 7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.43%. During the worst period of relative performance (from December 2010 - February 2011) there was a decline of 7% relative to the index. The worst absolute loss has been 6%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance
Absolute -6% (May 2015 - June 2015)
Relative -7% (December 2010 - February 2011)

Other funds managed

Sector record since December 2010 (7 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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