Fundsmith

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I found myself reading this today.

How We're Structured

I'm all for ethics and values but I can see Smith's point.

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What do we think will happen this week then?

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Scroll down and you can usually see the factsheet from the fund or ETF provider.

https://www.fundslibrary.co.uk/FundsLibrary.datare...

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Any ideas what this is all about?

Terry Smith's fund business asked by Financial Conduct Authority to undertake review of its operations

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I don't know enough about it to know what it may or may not mean.

Like whether it's a procedural thing that's been picked up by some media and spun into a story or whether it's actually quite a big deal.

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Vanguard FTSE Global All Cap looks about as global as I think you can get in a single fund.

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trickywoo said:

If that happens I’ll be buying loads at a discount to NAV, as will plenty of others. It’s not anything like the Woodford situation.

Not sure I understand you as there is no "discount to NAV" with Fundsmith as it's an open ended fund that trades in public companies

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DonkeyApple said:

One of the benefits of stock selection by someone like Fundsmith is that when we allocated funds to something like that as we also believe those individual holdings are where we want some capital to be we are also buying some protection from ourselves when it comes to churning out savings and performance away in broker comms.

I'm not so sure on that.

I used to have a fair bit with Fundsmith and I like Terry Smith a lot and think he talks a lot of sense and he's very persuasive.

But there was a bit of a "penny drop" moment where it dawned on me that I could watch a video of him telling me he'd just put 5% of the fund into a Lithium mine in Kyrgyzstan and I'd probably be nodding like a dog thinking "clever move Terry I'm sure you know best".

I'm not afraid to admit I don't understand companies enough to really be too sure whether a fund manager is doing sensible things.

So at that point how do you pick a fund manager?

I ended up deciding I couldn't so moved it all to passive trackers and/or cheap multi-asset.

[bitchstewie]

Sheepshanks said:

I suppose the more companies in the fund - think there's 40 odd? - then the more likely that is to happen. I know there's different weights and they're from different indexes, but it's got to be pretty hard to consistently significantly outperform without taking a lot of risk.

Just a little reminder that Smith doesn't claim to be after the best return but the best return adjusted for risk.

Not sure how you judge risk but that's what the owners manual and Smith himself say at every opportunity.

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simon800 said:

It used to be lower risk than the index (standard deviation, volatility, valuation) and it’s now higher risk (using data/facts as opposed to being subjective).

How is Smith selling that then?

[bitchstewie]

Stick me in Mauritius with that amount of money and I'm reasonably sure I'd find a fair bit of energy