Fundsmith

Fundsmith is a London-based investment management company founded in 2010 by Terry Smith. As of December 2023, the firm manages £36 billion in assets. Fundsmith employs a long-term, buy-and-hold investment approach, focusing on companies with high returns on capital and defensible competitive advantages. The firm seeks to own concentrated portfolios of quoted businesses chosen based on company fundamentals, defensible competitive advantages, and attractive valuation. Fundsmith avoids emerging technology firms and heavily cyclical industries, such as airlines and real estate, and does not invest in banks due to their reliance on leverage and financial engineering. The firm invests on behalf of individuals, wealth managers, institutions, private banks, prominent families, charities, and endowments. Fundsmith's investment philosophy emphasizes investing in companies that have already won, rather than trying to predict future winners. The firm has a track record of superior investment returns, with its Fundsmith Equity Fund returning 599.9% since inception in November 2010, achieving an annualized growth rate of 15.1% as of August 2024. This performance has outperformed the MSCI World Index of Equities (371.8%) and UK bonds (426.3%) over the same period. Fundsmith's investment strategy focuses on companies generating high returns on capital and operating in sectors driven by a large number of everyday, repeat events and transactions, such as consumer staples and medical consumables. The firm also looks for companies with an established competitive advantage, for example, Automatic Data Processing, the payroll processor whose large installed base of software is said to give such firms 'annuity-like characteristics'. Fundsmith's investment philosophy emphasizes investing in companies that have already won, rather than trying to predict future winners. The firm has a track record of superior investment returns, with its Fundsmith Equity Fund returning 599.9% since inception in November 2010, achieving an annualized growth rate of 15.1% as of August 2024. This performance has outperformed the MSCI World Index of Equities (371.8%) and UK bonds (426.3%) over the same period. Fundsmith's investment strategy focuses on companies generating high returns on capital and operating in sectors driven by a large number of everyday, repeat events and transactions, such as consumer staples and medical consumables. The firm also looks for companies with an established competitive advantage, for example, Automatic Data Processing, the payroll processor whose large installed base of software is said to give such firms 'annuity-like characteristics'.