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Fundsmith
Apostate
Posted: 06 May 2018 07:57:03(UTC)
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the last 12 months have seen it almost mirror a global tracker. are the glory days over and it's starting to average? 1% seems a lot to pay when you can get Fidelity Index World for 0.12. Time to move on or persevere?
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laang lee on 06/05/2018(UTC), Raj K on 07/05/2018(UTC)
philip gosling
Posted: 06 May 2018 09:29:05(UTC)
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Are you judging Fundsmith by 12 month or just last 3 months return? Seems very short term even Woodford got much longer before people sold out. A Global tracker is meant to give you the market whatever that is over time - Fundsmith over time to justify itself has to beat the market. So over 1, 3, 5, 7, 9, 10 years not just past few volatile months.

Fundsmith claim 22% for 2017 and fidelity -016% for march 2017 - March 2018 not quite same times but this year Fundsmith down nearly 2% so still well above Fidelity.
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Keith Cobby on 07/05/2018(UTC), Apostate on 07/05/2018(UTC), Hugh M on 09/05/2018(UTC)
Tyrion Lannister
Posted: 07 May 2018 00:02:20(UTC)
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Apostate;61814 wrote:
the last 12 months have seen it almost mirror a global tracker. are the glory days over and it's starting to average? 1% seems a lot to pay when you can get Fidelity Index World for 0.12. Time to move on or persevere?


All funds go through periods of underperformance. If fundsmith’s bad period is merely matching his benchmark, I’d say that’s an indication of how well he’s done.

Most good funds will underperform their benchmark at times but investing is a long term game. If you don’t see that, then you probably are better off with a global tracker.
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Apostate on 07/05/2018(UTC), Hugh M on 09/05/2018(UTC)
King Lodos
Posted: 07 May 2018 01:46:18(UTC)
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Absolutely – the main advantage of index trackers is they give you much less to worry about .. Behaviour is an investor's biggest enemy.

It's luck that Lindsell Train Global's outperforming Fundsmith over this period – luck that LT happens to be more invested in Japan .. It's luck that Fundsmith's outperformed at all during this bull market, as quality defensive stocks generally shouldn't.

One thing neither of these managers can control is how markets decide to feel about these stocks .. But LONG-TERM (so long as they can identify profitable businesses with competitive edges) you have faith that markets will recognise their value .. If Quality investing's not for you, a tracker is a much easier decision.
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Apostate on 07/05/2018(UTC), Peter59 on 08/05/2018(UTC), Hugh M on 09/05/2018(UTC)
Aminatidi
Posted: 07 May 2018 07:30:24(UTC)
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Something stuck in my head when I was watching a Terry Smith video that I think could apply to many active funds.

He likened Fundsmith to the Tour de France in that nobody has ever won every single stage of the Tour de France as it's impossible to do so as different stages require different specialities.

Win enough though and you win the race.
9 users thanked Aminatidi for this post.
Luca Brasi on 07/05/2018(UTC), Apostate on 07/05/2018(UTC), gillyann on 07/05/2018(UTC), greville richards on 08/05/2018(UTC), mcminvest on 09/05/2018(UTC), Hugh M on 09/05/2018(UTC), George C on 09/05/2018(UTC), Pensioner on 11/05/2018(UTC), Greylocks on 16/05/2018(UTC)
Apostate
Posted: 07 May 2018 09:26:42(UTC)
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Thanks for all input.

Does anyone have a link to show what shares are in Fundsmith and in what proportion? The factsheet shows the top 10 without proportions but I can't find more than that - the Fundsmith website, HL, Fundslibrary only have short reports which don't show the holdings.
Tyrion Lannister
Posted: 07 May 2018 11:15:32(UTC)
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Have a look at HL, Trustnet and Morning Star.
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Hugh M on 09/05/2018(UTC)
chubby bunny
Posted: 07 May 2018 12:15:25(UTC)
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You can see all the US holdings as of the end of March, but these are only 17 of the 28 stocks Fundsmith holds: https://www.holdingschan...-held-by-fundsmith-llp/

Then you can check Morningstar and add the non-US top 10 holdings as of the end of February: Amadeus (5.4%), Novo Nordisk (4.7%) and Intercontinental Hotels Group (4.2%). This gives us 20 of the 28 holdings.

According to Fundsmith's factsheet we're still missing holdings in the UK (14.7%), France (3.0%), Finland (2.6%) and Switzerland (2.2%). Looking at last year's full semi-annual report and assuming he's not sold any of these since the end of June 2017, the remaining 8 holdings are:

UK - Diageo, Unilever, Intertek, Reckitt Benckiser, Sage

France - L'Oreal

Finland - Kone

Switzerland - Nestle
4 users thanked chubby bunny for this post.
Freddy4Skin on 07/05/2018(UTC), Apostate on 07/05/2018(UTC), Guest on 08/05/2018(UTC), Alan M on 08/05/2018(UTC)
Apostate
Posted: 07 May 2018 12:41:48(UTC)
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It's a little strange that this information is not available from Fundsmith themselves - even the factsheet is a bit cagey not giving away the proportions of the top 10.
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Raj K on 07/05/2018(UTC)
Raj K
Posted: 07 May 2018 13:05:11(UTC)
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I think Fundsmith should disclose them in their six month and annual reports at the very least. Lindsell Train does that i believe. What is so secret about disclosing the holdings anyway. As an investor i would like to know what companies my money is being invested in. Not much to ask for! Maybe i have got it wrong and they do but i havent seen it anywhere!
King Lodos
Posted: 07 May 2018 14:37:03(UTC)
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I think Fundsmith's attitude is that you're much better just trusting them .. Which statistically is completely true.

I imagine they're also more likely to want to make a top 10 holding public, because by that point the position size is meaningful, and there is a 'hedge fund effect', where people buy the stock because Fundsmith bought it .. You might not want that on a small position you might want to buy more of.

I would say, from my own portfolio (inspired by Fundsmith), it was hard for me to find 6 stocks that ticked enough boxes .. The fact Fundsmith holds 20(?), I think apart from maybe Facebook, you might expect a while of market-like performance .. I've been more positive on Lindsell Train this year because Japan's had a few off-the-radar opportunities, and their top holdings have become kind of reasonable value again (having had quite middling performance)
3 users thanked King Lodos for this post.
mcminvest on 08/05/2018(UTC), Peter59 on 08/05/2018(UTC), Alan M on 08/05/2018(UTC)
mcminvest
Posted: 08 May 2018 16:11:46(UTC)
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I think he is right to keep his card close to his chest and not show the 'opposition' from upsetting his/our position in these companies, a flood of money in or out (from small private and/or other fund managers) will not help him and us. He's correct, it's not what you do during the race, it is the first over the line that counts, in fairness to him he has proved that. Outside the top 10 holdings the percentages drop anyway.
Keith Cobby
Posted: 08 May 2018 16:19:49(UTC)
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I like to see transparency and I think every six months is about right. One of the merits of ITs is that they are much more transparent than OEICs/unit trusts/ETFs.
Alan Selwood
Posted: 08 May 2018 16:43:19(UTC)
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Back in the 1970s, it was standard for unit trust 6-monthly reports to list all holdings by number and value, all purchases and sales too, in minute detail.

So you knew exactly where you stood.

Charges then were 5% up front and 3/8th% p.a.
This, of course, was before rules and regulations proliferated, sending up fee levels, and then the Financial Services Act, which caused much-increased admin employment again, just to check that the rules were being obeyed and every last dot dotted and dash dashed!
1 user thanked Alan Selwood for this post.
mcminvest on 08/05/2018(UTC)
Aminatidi
Posted: 08 May 2018 16:53:29(UTC)
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Alan Selwood;61929 wrote:
Back in the 1970s, it was standard for unit trust 6-monthly reports to list all holdings by number and value, all purchases and sales too, in minute detail.

So you knew exactly where you stood.

Charges then were 5% up front and 3/8th% p.a.
This, of course, was before rules and regulations proliferated, sending up fee levels, and then the Financial Services Act, which caused much-increased admin employment again, just to check that the rules were being obeyed and every last dot dotted and dash dashed!


Alan I'm curious whether holding funds/investments was cheaper back then than it is now?

I see people commenting on fees and I assume from your post above you've been investing for a while.

My hunch is we've never had it so good in terms of choice and cost?
Peter59
Posted: 08 May 2018 21:42:39(UTC)
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I like to see transparency and I think every six months is about right. One of the merits of ITs is that they are much more transparent than OEICs/unit trusts/ETFs.

iShare holdings are updated daily with %/prices. Incredibly transparent investments and their low-cost has forced "active" funds to reduce fees.
Alan Selwood
Posted: 08 May 2018 22:32:29(UTC)
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Aminatidi;61932 wrote:
Alan Selwood;61929 wrote:
Back in the 1970s, it was standard for unit trust 6-monthly reports to list all holdings by number and value, all purchases and sales too, in minute detail.

So you knew exactly where you stood.

Charges then were 5% up front and 3/8th% p.a.
This, of course, was before rules and regulations proliferated, sending up fee levels, and then the Financial Services Act, which caused much-increased admin employment again, just to check that the rules were being obeyed and every last dot dotted and dash dashed!


Alan I'm curious whether holding funds/investments was cheaper back then than it is now?

I see people commenting on fees and I assume from your post above you've been investing for a while.

My hunch is we've never had it so good in terms of choice and cost?


My first ever investment was a unit trust in 1966. I bought Save & Prosper's Scot Yields at 4/3½ d per unit. (What a trip down memory lane it was writing that sentence!). Interest in how they performed led me to make a career change 5 years later.

Back in the 1970s, I didn't really pay any attention to investment trusts, because I got a staff discount of about 3% off the offer price of the in-house unit trusts. So I can't comment on relative charges of these two investment vehicles.

The up-front 5% was pretty standard across the board then, and didn't come down until platforms started up that got special prices from the fund managers because they picked up some of the costs (marketing and admin). This was somewhat offset by a creep upwards in annual charges. Sadly, this easy availability has led to over-trading.

We used to give 2% off for some of the bigger private purchasers, especially if they haggled!

As for choice, there were around 100 unit trusts in existence at the end of the 1960s that were still going in about 1990. Since then, the numbers have gone up through the roof, mainly because fund management groups decided to jump on this or that more specialist bandwagon that was in vogue at the time. Given how long it took to launch a trust, the typical result was that the market had moved on before the sales came through in any quantity! (Typical of marketing-led businesses).

What was clear to me back then was that if you had astute managers who could value shares and their future potential, you did not need to keep trading in and out of them all the time. If you bought well and sat tight, after 20 years you were going to be up in the top few of all the trusts that were your competitors. This is why I like the approach of Terry Smith and Nick Train for the core parts of portfolios. If they pick well (quality and prospects at a reasonable price), we as investors will do very well.
10 users thanked Alan Selwood for this post.
King Lodos on 08/05/2018(UTC), mcminvest on 09/05/2018(UTC), Fell Walker on 09/05/2018(UTC), Aminatidi on 09/05/2018(UTC), geoffrey Walton on 09/05/2018(UTC), Jeff Liddiard on 09/05/2018(UTC), Vince. on 09/05/2018(UTC), john brace on 09/05/2018(UTC), Luca Brasi on 09/05/2018(UTC), Pensioner on 11/05/2018(UTC)
mcminvest
Posted: 09 May 2018 04:57:21(UTC)
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Apostate;61845 wrote:
Thanks for all input.

Does anyone have a link to show what shares are in Fundsmith and in what proportion? The factsheet shows the top 10 without proportions but I can't find more than that - the Fundsmith website, HL, Fundslibrary only have short reports which don't show the holdings.


Hi Apostate,
May help you?

http://moneygrower.co.uk...rry-smith-stocks-shares/
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Apostate on 09/05/2018(UTC)
Aminatidi
Posted: 09 May 2018 06:48:58(UTC)
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Alan Selwood;61953 wrote:
Quite a bit


Alan thank you, fascinating read, much appreciated.
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