Owners Manual

Most fund managers will send you a glossy brochure. At Fundsmith we want you to have an Owner’s Manual. Why? Because your understanding of what we are trying to achieve and how we will approach it is a critical element in enabling us to attain our goal.

Share Buybacks

Capital allocation decisions are amongst the most important decisions which management make on behalf of shareholders. In this document we analyse whether the current vogue for share buybacks is justified.

Return Free Risk

As investors we are taught that to obtain higher returns you must assume higher risk, but much of the evidence contradicts this assumption. The fact is that for much of the time, you get better returns from investing in predictable high quality companies than in smaller, riskier, more obscure companies.

Banned Words

Having been involved in financial analysis for nearly four decades, I have increasingly formed the view that there are some words and phrases which are used by company management, analysts and commentators which investors should be wary of.

To Pay or Not to Pay

In my experience, most investors do not even attempt to focus on owning “quality” stocks but even amongst those who do, definitions of “quality” are mostly woolly with talk about market share, competitive advantage or “moats”, and management. Much if not all of this is in my view baloney.

Lessons from the Tour De France

You can take at least one vital lesson for successful investment from the Tour. It has never been won by a rider who won all the stages, and it never will.

An English language prospectus for the Fundsmith Equity Fund is available on request and via the Fundsmith website and investors should consult this document before purchasing shares in the fund. Past performance is not necessarily a guide to future performance. The value of investments and the income from them may fall as well as rise and be affected by changes in exchange rates, and you may not get back the amount of your original investment. Fundsmith LLP does not offer investment advice or make any recommendations regarding the suitability of its product. This financial promotion is intended for UK residents only and is communicated by Fundsmith LLP which is authorised and regulated by the Financial Conduct Authority.