Interactive Investor

ii Super 60 investments:Fundsmith Equity

Asset GroupAsset Sub-GroupInvestment Category
EquitiesGlobal equitiesCore

How the Fund Invests

Terry Smith co-founded Fundsmith LLP and this strategy in 2010 on the back of the success he achieved as investment advisor to the Tullett Prebon pension fund. His experience dates back to 1974 and has included time in research and in senior management positions at FTSE companies. He is supported by Julian Robins, a co-founder of the firm who has worked with Smith for over two decades, and three analysts, the most recent joiner being hired in 2020.

The investment process is simple and well-articulated. It aims to buy and hold, ideally forever, high-quality businesses that will continually compound in value. High-quality companies are considered those that have an above-average cash return on operating capital employed, and an ability to sustainably grow at this rate of return. In order to achieve these two criteria, the team targets companies with a strong competitive advantage (typically based on significant intangible assets) and with little need for financial leverage. Smith constructs a focused portfolio of 20-30 names, paying no attention to the MSCI World benchmark (used for performance reference only), with position sizes reflecting the best combination of current value and future growth prospects.

Fund performance since launch has been strong, but the fund has benefited from some strong style tailwinds. The concentrated nature of the portfolio and the strong quality growth style bias are likely to result in returns that deviate from those of the benchmark from time to time.

Opinion
The fund benefits from an experienced manager who adopts a structured and disciplined investment approach that has served investors well over the long term.

Smith is an original thinker and has often demonstrated his willingness to bet against the crowd by taking a longer-term view.

December 2022

Risk warnings

Past performance of the underlying constituents is not a guarantee of future performance. The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab. 

The information we provide in the ii Super 60 investments list is an opinion provided by ii or one of its partners on whether to buy a specific investment. Please note that none of the opinions we provide are a “personal recommendation”, which means that we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor. 

Any changes to the ii Super 60 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.

Details of all recommendations issued by ii during the previous 12 month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii Super 60 investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of this ii Super 60 list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii Super 60 investments list.