Fund Brief Case Study: Fundsmith Equity Fund
A) Fund backdrop
- Mandate: Blue-chip Western companies. This offers a relatively "large pond to fish in."
- Investment Style: Quality companies. It is easier to compound value if the underlying companies are also doing so.
- Manager: Mr Smith and his team are not new to equity markets and have a clear approach.
B) Fund Holdings
- High quality and relatively low risk companies such as PayPal and the airline ticking company Amadeus.
C) Fund drivers
- Asset class: The fund has a strong exposure to the US.
- Sectors: The focus is on high quality sectors with a number of sectors excluded (i.e. banking and real estate).
- Themes: While the fund does look at themes (travel, healthcare, payments) the focus is to find attractive companies.
- Potential downsides: size of fund may make outperformance harder and open-end structure.