Fund Factsheet

Investment objective

The Company will invest in equities on a global basis. The Company’s approach is to be a long-term investor in its chosen stocks. It will not adopt short-term trading strategies. The Company has stringent investment criteria which Fundsmith LLP and Fundsmith Investment Services Limited as investment manager adheres to in selecting securities for the Company’s investment portfolio.  These criteria aim to ensure that the Company invests in:

• 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 by the Company to be attractive.

The Company will not invest in derivatives and will not hedge any currency exposure arising from within the operations of an investee business nor from the holding of an investment denominated in a currency other than sterling.

Principal Risks

• Currency Risk: The fund’s portfolio is a global portfolio and many of the investments are not denominated in Sterling. There is no currency hedging made by the fund. The Sterling price of the shares may therefore rise or fall purely on account of exchange rate movements.
• Concentration Risk: The fund’s portfolio complies with the UCITS requirements on spread of investment. Having said that, application of the investment criteria described above significantly limits the number of potential investments: the fund generally invests in 20 to 30 stocks and so it is more concentrated than many other funds. This means that the performance of a single stock has a greater effect on the price of the fund.
• Operational Risk: Failures or delays in operational processes may negatively affect the fund.
• Sustainability risk: The Fund is subject to the risk that environmental, social or governance conditions or events may occur that may have a material negative impact on the value of its investments.
• Risks inherent in the holding of shares: There is no assurance that any appreciation in the value of investments in Shares will occur. The Net Asset Value per Share is expected to fluctuate over time with the performance of the fund’s investments. A Shareholder may not fully recover his initial investment when he chooses to redeem his Shares or upon compulsory redemption, if the Net Asset Value per Share at the time of such redemption is less than the Subscription Price paid by such Shareholder or if there remain any unamortised costs and expenses of establishing the fund. An investment in Shares should only be made by those persons who are able to sustain a loss on their investment. The Shares should be viewed as long term investments (at least 5 years).

Performance, % Total Return

The Fund is not managed with reference to any benchmark, the above comparators are provided for information purposes only.   ¹T class accumulation shares, net of fees priced at midday UK time, source: Bloomberg.  ²MSCI World Index (£ Net) priced at close of business US time, source: www.msci.com. The MSCI World Index is a developed world index of global equities across all sectors and, as such, is a fair comparison given the Company's investment objective and policy.  ³Bloomberg/Barclays Bond Indices UK Govt 5-10 yr., source: Bloomberg.   ⁴ £ Interest Rate, source: Bloomberg.