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Exploring Fundsmith Equity Fund, UK’s largest fund

Savvy investors in Singapore may have heard of, read about, and adopted Warren Buffett's investment strategies. Some of Buffett's well-known advice to investors includes investing through low-cost passive index funds, particularly the Standard and Poor's (S&P) 500 (Ermey, 2024).

Terry Smith, often referred to as the Warren Buffett of the United Kingdom (UK), manages the Fundsmith Equity Fund, the UK’s largest fund (Makortoff, 2024). Although the fund was downgraded from a GOLD to a SILVER Medalist Rating by Morningstar in early 2024, it is still expected to be a stellar performer in the long term, with long-term investors likely to be handsomely rewarded, as they have been in the past (Morningstar Europe, 2024).

(source: screen capture from https://www.youtube.com/watch?v=0RauieHcY48)

Watch and listen to Terry himself as he explains his investment strategies at the 2024 Annual Shareholders' Meeting:

(source: https://www.youtube.com/watch?v=PYXtFKFsI0U)

Interestingly, one of the lesser-known companies that is a top 5 performer in the Fundsmith Equity Fund is Novo Nordisk, Europe’s most valuable company (Pronina, 2024). Let's take a look at what Novo Nordisk does and how its stock has performed over the years:

Click the links below for additional sources of information:

References:

Ermey, R. (2024, March 8). Warren Buffett owns 2 ETFs—this one is better for everyday investors, experts say. CNBC. https://www.cnbc.com/2024/03/08/warren-buffett-berkshire-hathaway-owns-2-etfs.html

Makortoff, K. (2024, April 4). Star stock-picker Terry Smith’s equity fund downgraded by ratings firm. The Guardian. https://www.theguardian.com/business/2024/mar/28/stock-picker-terry-smith-fundsmith-equity-downgraded-by-ratings-firm-share-sales

Morningstar Europe. (2024, March 26). Morningstar Downgrades Fundsmith Equity from Gold to Silver [Video]. YouTube. https://www.youtube.com/watch?v=0RauieHcY48

Pronina, L. (2024, May 2). Denmark is Hooked on Novo Nordisk’s Success. https://www.bloomberg.com/news/newsletters/2024-05-02/denmark-is-hooked-on-novo-nordisk-s-success?utm_source=website&utm_medium=share&utm_campaign=copy

Disclaimers:

This blog is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the products mentioned. Investments in investment-linked plans (ILP) are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance is not indicative of future results. All names, logos and trademarks are used for identification purposes only and does not imply endorsement. This publication has not been reviewed by the Monetary Authority of Singapore. The information provided on this blog page is accurate as of the date of posting.

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