ETFs - Worse than I thought

On 11th January I published my first annual letter to the holders of the Fundsmith Equity Fund. In it I levelled some criticisms at the investment fad for Exchange Traded Funds ("ETFs").

Share Buybacks - Friend or Foe?

Almost 20 years on from publishing my book, Accounting for Growth, I am exposing another loophole in the accountancy rules which is allowing companies to appear to have created value when they have not.

Fundsmith's Terry Smith Commenting On The Year Ahead

At an Editorial Intelligence event, in association with the Financial Times, a panel debated "the Year Ahead". The event was chaired by Lionel Barber, the FT's Editor, and Terry Smith, Founder of Fundsmith, was joined on the panel by Lord Andrew Adonis, Gillian Tett and Baroness Shriti Vadera .

Fundsmith Launches Online ISA Capability & Further Web Functionality

Fundsmith, the new asset management company founded by Terry Smith, announces that direct investors can now invest in the Fundsmith Equity Fund ISA online, at www.fundsmith.co.uk. The Fundsmith website also now has the functionality for direct investors to choose between Accumulation and Income Units.

There’s Good News and Bad News

Just 18 days after the Fundsmith Equity Fund opened, the first takeover approach for a stock in the portfolio occurred with the news that KKR is in talks to buy Del Monte Foods.

Fundsmith Appoints Another Sales Director

Fundsmith, the new asset management company founded by Terry Smith, announces the appointment of Conrad Rey as Sales Director to Intermediaries having recently announced the appointment of Catherine Evans as Institutional Sales Director.

A Fundamental Approach to Investing From Terry Smith

Fundsmith is a new asset management company established by Terry Smith because he believes that most existing equity funds have not delivered what they promised. Fundsmith will be the main vehicle for his own investments. Instead of the multitude of expensive poor performing funds which investors currently have to choose from, the Fundsmith Equity Fund will offer investors the opportunity to invest alongside him in a high quality, concentrated portfolio of 20-30 resilient global growth companies which are held for the long term. The portfolio has no benchmark or sector constraints.

Sir Keith Park

On Wednesday 15th September we celebrated the 70th anniversary of Battle of Britain Day with the unveiling of the statue of Sir Keith Park in Waterloo Place, London. As Mrs Moneypenny pointed out in her column on 11th Sept, the campaign was launched in that column three years to the day prior to the unveiling:

Fundsmith & Fees

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.

Fund Management Fees - "Two and Twenty"

I don't want to focus on fees to the exclusion of all else - our main focus at Fundsmith is on delivering superior performance. However, we would like to point out the very meaningful drag that fees and charges have on investment performance.

The Reaction to the 2 and 20 Analysis

There are many who disbelieve the simple arithmetic of the impact of hedge fund style 2 and 20% fees on the division of the investment proceeds between investor and fund manager. As demonstrated, if 2 and 20 were applied to Warren Buffett's investment performance, over 90% of the eventual value of the fund would accrue not to the investor, but to the manager.
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