As stated before, our main focus at Fundsmith is on producing superior investment returns. However, fees produce a major drag on returns over time. I founded Fundsmith to offer a high quality portfolio of resilient global growth companies which we hold for the long term and for which we charge a reasonable fee with no hidden costs.
The TER on the Fundsmith Equity Fund will be very low, as the cost of dealing will be minimal. As we have stated elsewhere, there are all manner of expenses which can be charged to an investment fund, such as legal fees, accounting, administration, custody, marketing and travel expenses, to name a few examples. Just a few basis points' difference can have a significant effect on investors' ultimate investment performance over time.
As co-investors, I and my partners have invested alongside our clients and pay the same fee as all other investors. Therefore, we have an incentive to keep all costs that contribute to the TER to an absolute minimum.