Fundsmith

[simon800]

Dylano said:

Obviously my investment horizon is a little longer than the next 12 months but with all the talk of us finally set to see THE BIG ONE this year that we've been waiting for since at least 2008 and some saying we could be looking at 1930's levels of stock market losses and equally long recovery time scales then I'm not sure many people have investment horizons of a suitable duration to sit that one out.

There's always a doomsday merchant calling the end of the world to be honest! I tend to just ignore and invest monthly.

Diving in and out of the market to miss potential market crashes is very hard to execute in practice, a lot of people lose a lot of money trying to do so. How many people predicting end of the world this time predicted 2020 for example?

If someone is concerned by potential equity market drops the solution (in my opinion) is to not be exposed solely to equities, rather than to time being exposed to them.

[trickywoo]

Dylano said:

Obviously my investment horizon is a little longer than the next 12 months but with all the talk of us finally set to see THE BIG ONE this year that we've been waiting for since at least 2008 and some saying we could be looking at 1930's levels of stock market losses and equally long recovery time scales then I'm not sure many people have investment horizons of a suitable duration to sit that one out.

Plenty of markets were down significantly in the last 12 months - NASDAQ was 30% in the last 12 months.

I haven't seen anyone saying there are big drops still to come.

If China invades Taiwan there will be a massive sell off but how long will anyone stay out of a market?

Other than that its unpredictable natural disaster that will tank the markets but who invests thinking California is going to get flattened by an earthquake?

[2Btoo]

simon800 said:

Dylano said:

Obviously my investment horizon is a little longer than the next 12 months but with all the talk of us finally set to see THE BIG ONE this year that we've been waiting for since at least 2008 and some saying we could be looking at 1930's levels of stock market losses and equally long recovery time scales then I'm not sure many people have investment horizons of a suitable duration to sit that one out.

There's always a doomsday merchant calling the end of the world to be honest!

I'd go along with this. There is always someone telling you that the world is about to end. When it fails to do so their cries get more and more shrill because in time they know that they will be correct, but still fail to accurately say when that will be.

Pretty much everything is down since the end of 2021. I put a good chunk into both NVIDIA and Smithson (the small-cap little brother of Fundsmith) just after Christmas 2021 and both of those have cost me a chunk in the last 16 months. But investment in stocks ALWAYS has to be a long-term play. If you have any money at all to invest now for a 12-18 month horizon then there are indeed some good looking other opportunities out there - I think that Coventry Building Society has fixed bond at just over 4%, which isn't shabby. It won't keep you head of inflation but it'll lessen the pain of it.

[Mr Dendrite]

xeny said:

Mr Dendrite said:

Maybe, but if you invested in the second half of 2021 you’ve been negative for the whole of 2022 and still haven’t got back to level. Ask me how I know

Somewhere in :Smarter Investing: there's a graph of % likelihood of losing money over various investing terms. I think it is something like a 10% likelihood over 5 years. There isn't much out there that is higher now than it was a mere 18 months ago.

I'm genuinely sorry if you invested in anything thinking markets only went up in the short/medium term.

Not at all, very aware of the risks involved. I was unfortunate with the timing with Fundsmith, but only because that was when I received a lump sum so ended up buying at what turned out to be almost the peak. While it has not been pleasant watching this year the money is a long term investment.

Edited by Mr Dendrite on Tuesday 7th February 14:06

[Dylano]

Perhaps I have been paying a bit too much attention to some of the most pessimistic doom merchants, although some of them were saying they were selling up in late 2021 because the market was at its peak and they were proved correct then.

I don't think anyone can deny we've been kicking the can down the road since 2008 and surely it stands to reason that the longer we've prevented it the harder it's going to be when it does hit.

Also plenty of people who've always said Smith is just a one trick pony who's picks only do well in a QE/ZIRP fuelled bull market certainly look to have been proved correct so far.

[xeny]

Dylano said:

Also plenty of people who've always said Smith is just a one trick pony who's picks only do well in a QE/ZIRP fuelled bull market certainly look to have been proved correct so far.

Have a look at the performance of the Tullet Prebon pension fund and when he ran it. That is pretty robust evidence he does OK in at least one other scenario.

[simon800]

Dylano said:

Also plenty of people who've always said Smith is just a one trick pony who's picks only do well in a QE/ZIRP fuelled bull market certainly look to have been proved correct so far.

Quality stocks were massive beneficiaries of the macro environment we had - they had a huge rerating. Investors were happy to pay higher and higher multiples of earnings, and this multiple expansion was a huge tailwind for FS.

Now multiples have contracted and that Quality universe has suffered more than the broader market, as it was too expensive. It was a bubble really, not helped by all the new "ESG" funds - a lot of the names that screen well for ESG metrics also screen well for Quality metrics.

I prefer to avoid massive factor bets - these managers look like geniuses when their factor is in favour (hence adulation for the likes of Smith, Baillie Gifford etc over certain time periods) and look like mugs when their factor isn't. If they are doing well it's because of their stock picking genius, if they are doing badly it's a shrug of the shoulders and "the market is wrong about our stocks".

See Nick Train for many examples of him declaring himself right and the market wrong as he has underperformed.

[NowWatchThisDrive]

He can still talk an alright game sometimes, but my feeling is that ultimately he is being revealed to be another momentum chaser. Certainly I struggle to see how anyone having bought META and PYPL could continue to call themselves a Quality manager.

[Dylano]

Had an interesting recent exchange with Fundsmith.

Just over a week ago I put in a withdrawal order for a portion of my investment, they contacted me saying that due to "money laundering regulations" they couldn't carry out my request until I send them an original copy of my bank statement showing the funds being deposited into Fundsmith (4 years ago!)

I have requested a copy of said bank statement from my bank but in the meantime I've decided to to cancel my withdrawal from Fundsmith and remain invested, contacted them to request the pending withdrawal be cancelled and they've said they won't cancel it!

[DonkeyApple]

Dylano said:

Had an interesting recent exchange with Fundsmith.

Just over a week ago I put in a withdrawal order for a portion of my investment, they contacted me saying that due to "money laundering regulations" they couldn't carry out my request until I send them an original copy of my bank statement showing the funds being deposited into Fundsmith (4 years ago!)

I have requested a copy of said bank statement from my bank but in the meantime I've decided to to cancel my withdrawal from Fundsmith and remain invested, contacted them to request the pending withdrawal be cancelled and they've said they won't cancel it!

That sounds like a compliance loop of fkwittery.

Ask them if they did AML on your initial payment in and if not, why not?

In reality firms just have to be super careful these days and it sounds like their records for you are not wholly up to date so they just want proper proof that you are who you say you are and that they aren't being tricked into sending your money to a third party.

It's no bad thing but it's annoying.

You can ask to speak to a member of their compliance department where you can request they re paper you for whatever they need to bring their records up to date.

The fact that they are saying they won't cancel the order is irrelevant as they e also said they won't carry out the order until you supply them with the documentation they want.

In short, just ask to speak to their compliance dept and if the clerk says you can't then just ask to speak to their complaints department. The key is to try and get a step above glorified receptionist.

[2Btoo]

I've had similar incidents of stupidity from Fundsmith.

Go up the chain if you need to. Contact details for Greville Ward are easy to find on t'interweb. I don't know what Greville's title is but he's usually receptive to a grumble from a client and seems to have boots big enough to sort things out.

[xeny]

Dylano said:

Had an interesting recent exchange with Fundsmith.

Just over a week ago I put in a withdrawal order for a portion of my investment, they contacted me saying that due to "money laundering regulations" they couldn't carry out my request until I send them an original copy of my bank statement showing the funds being deposited into Fundsmith (4 years ago!)

I have requested a copy of said bank statement from my bank but in the meantime I've decided to to cancel my withdrawal from Fundsmith and remain invested, contacted them to request the pending withdrawal be cancelled and they've said they won't cancel it!

So if you don't supply the statement, they're unable to comply with your withdrawal request which you wish to cancel.

Don't send them the statement, and you've effectively cancelled the request?

[Dylano]

xeny said:

So if you don't supply the statement, they're unable to comply with your withdrawal request which you wish to cancel.

Don't send them the statement, and you've effectively cancelled the request?

But if I don't send them the statement then I can't ever withdraw any funds!

What if I want to remain invested for another 10 years in which time the fund rises to, let's say £12... I then decide to cashout but my existing sell order is still pending in place at £6 which then gets triggered, at £6 or £12??

[xeny]

Dylano said:

I then decide to cashout but my existing sell order is still pending in place at £6 which then gets triggered, at £6 or £12??

That's the question to ask them isn't it? Might make it clear how ridiculous it is for them to both refuse to sell without more verification, and refuse to let you cancel the sell.

[Dylano]

xeny said:

That's the question to ask them isn't it? Might make it clear how ridiculous it is for them to both refuse to sell without more verification, and refuse to let you cancel the sell.

Exactly what I have asked them along with further asking why they didn't require this money laundering compliance information when placing my various investments with them.

They do seem to be giving a rather mixed message, I initially thought the money laundering compliance was just some bullst excuse to make it slightly convoluted to withdraw funds and deter people from doing so, but then their refusal to now cancel a withdrawal request which is still only showing as 'pending' is equally frustrating and nonsensical.

I have contacted Mr Ward (thank you to the poster who suggested that) and received an immediate response from him that he will try to resolve the matter to my satisfaction, it does appear that when you contact the the general enquires dept for Fundsmith you're just dealing with a computer says no call centre drone.

[2Btoo]

Dylano said:

I have contacted Mr Ward (thank you to the poster who suggested that) and received an immediate response from him that he will try to resolve the matter to my satisfaction, it does appear that when you contact the the general enquires dept for Fundsmith you're just dealing with a computer says no call centre drone.

This could be pretty close to the truth. Fundsmith has a consumer side, with lots of people with a few hundreds/thousands of £'s in the fund. But they also have some very significant big investors with many millions (and more) in the fund. (I think that the BA pension fund is one of their bigger investors.) The big boys will get much better care than the minnows and I think that Greville Ward is one of the guys who deals with the bigger boys.

[alscar]

Dylano said:

Had an interesting recent exchange with Fundsmith.

Just over a week ago I put in a withdrawal order for a portion of my investment, they contacted me saying that due to "money laundering regulations" they couldn't carry out my request until I send them an original copy of my bank statement showing the funds being deposited into Fundsmith (4 years ago!)

I would have thought that to meet any MLR simply a copy of your latest statement should suffice.
I had to do a number of transactions recently ( not FS ) and this was deemed perfectly acceptable.

[Dylano]

alscar said:

I would have thought that to meet any MLR simply a copy of your latest statement should suffice.
I had to do a number of transactions recently ( not FS ) and this was deemed perfectly acceptable.

What I don't get is I've made a number of purchases into Fundsmith in the last few years yet they're only requesting specific dated proof of just one, and this one was one of my smaller buys.

Why not require bank statement proof of all my buy in transactions?

Their letter requesting this proof actually got more bizarre and I admit I couldn't fully follow just what they were requesting as it was so poorly worded and borderline unintelligible but they were suggesting an alternative method of compliance requirements in order to withdraw funds being -

- A high resolution copy of photo ID
- 2 Separate proofs of address
- A "selfie style picture" of myself holding my photo ID!!!

[alscar]

Dylano said:

What I don't get is I've made a number of purchases into Fundsmith in the last few years yet they're only requesting specific dated proof of just one, and this one was one of my smaller buys.

Why not require bank statement proof of all my buy in transactions?

Their letter requesting this proof actually got more bizarre and I admit I couldn't fully follow just what they were requesting as it was so poorly worded and borderline unintelligible but they were suggesting an alternative method of compliance requirements in order to withdraw funds being -

- A high resolution copy of photo ID
- 2 Separate proofs of address
- A "selfie style picture" of myself holding my photo ID!!!

The third alternative is quite bizarre isn't it !
Perhaps just a copy of your Driving Licence along with a copy of your latest bank statement and emailed to whomever you are talking with along with DA's suggestion of involving their Compliance dept as a cc might see a result ?
I recall doing something on the Fidelity platform a while back and the chap on the phone was such a pr*ck I ended up closing the account totally and making a formal complaint which saw a refund of all the dealing costs to close plus a dinner out.
Hopefully won't come to that for you.

[okgo]

I’ve had to do this also.

Was using my debit card to pay into an account in my wife’s name. They also asked for the selfie thing.