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Fundsmith Equity I

Bestinvest LogoA concentrated, unconstrained portfolio of global equities, held for the long term.

PRICE (INC)

504.61p

PRICE (ACC)

558.95p

INITIAL CHARGE

0%

ANNUAL MANAGEMENT CHARGE

0.9%

ONGOING CHARGE

0.96%

YIELD

0.2%

1 YEAR
-2.36%

Prices as at 01 Jul 2022.

Fund commentary last updated 21 Oct 2021.

Past performance is not an indication of future performance.

Capital at risk.

The fund targets long-term capital growth by investing in developed world equities. Well-known manager Terry Smith focuses on large-cap quality growth companies in the belief that they tend to outperform less efficient peers over many years. Smith’s target companies need to have strengths such as sustaining a high return on operating capital and business models which are hard to replicate. As such it is a very concentrated portfolio with typically around 30 names. Its holdings include tech titan Microsoft, cosmetics group Estee Lauder and Danish healthcare firm Novo Nordisk. The investment process combines quantitative screening and company research. It is essentially a ‘buy and hold’ strategy, with Smith looking to invest for the long-term and remaining patient during tough market periods.

Fund summary

SectorGlobal
StructureOEIC
LaunchedNovember 2010
Size£25,478m
Yield0.2%
Charging BasisIncome
Dividends paid28 Feb, 31 Aug

Charges

Standard Initial Charge0%
Initial Charge Via BestInvest0%
Additional Bid/Offer Spread0%
Annual Management Charge0.9%
Ongoing Charges Figure0.96%

Investment Process

The fund has an investment universe of around 70 names. It is selective because Smith and his team seek those rare companies that can defy the laws of capitalism and sustain a high return on invested capital for many years. Smith invests in ‘good’ businesses whose advantages are difficult to replicate, do not require significant levels of debt to generate returns, are resilient to change thanks to technological innovation and that have an attractive valuation based on free cash flow yield. The target companies also need to be able to generate revenue through a high volume of everyday, repeatable, and predictable events. Smith typically avoids less developed countries and sectors including banks, real estate, and insurers. Stock deas are sourced through quantitative screening, and company research including Annual Reports & Accounts. The team also meet management, attend conferences, and read industry publications. The final part of the process is to simply sit back and do nothing. They allow the growth and return on capital which companies generate to compound over the long-term. They will only exit a position if they believe the investment case has weakened such as the company making, in their view, a risky acquisition.

The information on this website is not intended to be advice or a recommendation to buy, sell or hold any investment mentioned. The value of investments and the income from them can go down as well as up and you may not get back the amount invested.

Past performance is not a guide to future performance. View full risk warning