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    What Terry Smith is saying

Fundsmith Sustainable Equity Fund Wins Best New Fund At Money Marketing Awards

The Fundsmith Sustainable Equity Fund (‘FSEF’), which launched in November 2017, has won the ‘Best New Fund’ category at the Money Marketing Awards 2018. Money Marketing recognises funds that have achieved the top of their fields, judged by a panel of well-known industry figures. It chose FSEF as the winner for its “credibility in the market and high competitive potential”.

A Money Marketing judge said: “I like the Fundsmith strategy and the way it incorporates ESG in its approach. ESG is a massive growth area and we are seeing more groups talking about it, but they are only talking about it rather than launching funds.”

Fundsmith Equity Fund (‘FEF’) has won the Global Equity Award at the Morningstar Pan-European Fund Manager of the Year Awards 2018. Morningstar’s analysts identified managers who they believe are among the very best at what they do, rigorously applying its Five-Pillar Methodology, which weighs the quality of management, the strength of the process used to run the fund, the quality of the parent organisation, performance, and costs.

Morningstar also named the Fundsmith Feeder Fund the Best Global Equity Fund for investors in Switzerland, recognising Fundsmith’s focus on quality companies, long-term investment horizon, low portfolio turnover, manager Terry Smith’s ability to analyse companies and the fund’s track record.

Terry Smith, Founder and Chief Executive of Fundsmith, said:

“I am delighted that the Fundsmith Sustainable Equity Fund has been named Money Marketing’s Best New Fund. Since its inception in November last year, FSEF has comfortably out-performed the MSCI World Index demonstrating that by marrying important sector exclusions with the proven sustainable investment process of Fundsmith, we can meet ESG fund investors’ goals without compromising superior investment performance.”

“Having been recognised by Morningstar at their UK fund awards last year, Fundsmith Equity Fund has now won the Global Equity Award, one of only four prestigious Pan-European Fund Manager of the Year Awards. This is testament to our goal of achieving superior returns over the long-term at a reasonable cost.”

Fundsmith Sustainable Equity Fund

Fundsmith LLP launched the Fundsmith Sustainable Equity Fund in November 2017. It follows the same strategy as the Fundsmith Equity Fund, investing in sustainable businesses that can be held for the long term, but with an important difference, namely the following sectoral exclusions that are stipulated in the fund prospectus:

  • No Aerospace and Defence
  • No Brewers, Distillers and Vintners
  • No Casinos and Gaming
  • No Gas and Electric Utilities
  • No Metals and Mining
  • No Oil, Gas and Consumable Fuels
  • No Pornography
  • No Tobacco

In addition, Fundsmith screens investments for sustainability in the widest sense, taking account not only the companies’ handling of environmental, social and governance policies and practices but also their policies and practices on research and development, new product innovation, dividend policy and the adequacy of capital investment.

Since 2014, Fundsmith has been running a sustainable equity segregated mandate for Comic Relief the portfolio of which will form the basis for FSEF. Terry Smith, Fundsmith’s founder and chief executive, and other members of the Fundsmith team have invested over £10 million into the new fund.

Fundsmith Equity Fund

The Fundsmith Equity Fund offers investors a high quality, concentrated portfolio of 20-30 resilient global growth companies which are held for the long term. Since inception to the 31st May 2018, the fund’s AUM has grown to £15bn and it has delivered a total return of 278.9% or 19.2% annualised, net of fees.

 

About Fundsmith

www.fundsmith.co.uk

Fundsmith is focused on delivering superior investment performance at a reasonable cost. It was established to be different from its peers so as to achieve a different result in line with Sir John Templeton’s axiom that “If you want to have a better performance than the crowd, you must do things differently from the crowd.” The rigorous research process of Fundsmith is central to what we do. We apply exacting standards to potential investments to produce a portfolio of resilient businesses with excellent performance. Minimising the costs we incur on behalf of our customers in implementing our strategy also sits at the heart of our philosophy.

Fundsmith was established in 2010 by Terry Smith. The business is owned and controlled by its partners, who have worked closely together over many years, and is headquartered in London with an office in Connecticut, USA. It is structured to survive Terry Smith’s demise and continue with the same investment philosophy. All partners of the firm have a significant co-investment in our Funds delivering a clear alignment of interest. Ancillary activities are outsourced to some of the world's leading providers in order to deliver high quality operations whilst allowing the Fundsmith team to focus on the investment analysis and portfolio management and customer care.

 

About Fundsmith Sustainable Equity Fund

www.fundsmith.green

FSEF invests in equities on a global basis. FSEF’s approach is to be a long-term investor in its chosen stocks. It will not adopt short-term trading strategies. It has been established as a UCITS scheme and complies with the requirements of the UCITS Directive.

FSEF has stringent investment criteria which the Authorised Corporate Director (ACD), as investment manager, adheres to in selecting securities for the investment portfolio. These criteria aim to ensure that FSEF 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 FSEF to be attractive.

Investors should be aware that the application of these investment criteria limits the number of potential investments for FSEF’s portfolio. It is envisaged that the investment portfolio will be concentrated, generally comprising between 20 and 30 stocks.

FSEF 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.

No Fees for Performance

No Up-Front Fees

No Nonsense

No Debt or Derivatives

No Shorting

No Market Timing

No Index Hugging

No Trading

No Hedging

Fundsmith has become a signatory to the United Nations’ Principles for Responsible Investment (‘PRI’). The UN Principles for Responsible Investment is a joint initiative of the UN Environment Programme Finance Initiative and the UN Global Compact with the aim of incorporating ESG issues into mainstream investment decision-making and ownership practices. The UN PRI is based on the premise that institutional investors and asset managers have a duty to act in the best long-term interests of their investors and therefore, need to give appropriate consideration to how environmental, social, and governance (ESG) issues can affect the performance of investment portfolios. By providing a framework for the integration of responsible business conduct into investment strategies, the PRI contributes to the promotion of ESG objectives within the financial sector.

The Six Principles for Responsible Investment:

  1. We will incorporate ESG issues into investment analysis and decision-making processes
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest
  4. We will promote acceptance and implementation of the principles within the investment industry
  5. We will work together to enhance our effectiveness in implementing the principles
  6. We will each report on our activities and progress towards implementing the principles

http://www.oecd.org/investment/mne/38783873.pdf

 

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