Fundsmith

[sidicks]

xeny said:

The nearest thing to that I know of is the Tulett Prebon pension fund performance, and I've only seen that on one of the original presentation videos 2:40 into https://www.youtube.com/watch?v=CqH4dQY_Hxw - which quotes 13.53% after fees December 2003 to December 2010, so at least averaged across a bear market it's tolerable.

Are you implying that the pension fund is 100% invested in a relatively small number of equities, like Fundsmith?

xeny said:

Hunting around, the TP annual reports are here

https://www.tullettprebon.com/investor/investor-re...

and I think it may be possible to piece together some idea of annual performance from them, although I acknowledge that isn't perfect.

That's company performance, not investment fund performance, isn't it?

[Phooey]

Sorry to hijack the thread..

Most sensible way to invest in Fundsmith - directly or via your IFA? My ISA is on a Standard Life Wrap platform so if I asked my IFA to put some money in FS my thinking is I would be paying a LOT of fees (IFA + SL Wrap + FS). I can only invest in one ISA a year so I would need to make a decision - go direct to FS and *only* invest in FS (Full £20k for 2018/19) or ask my IFA to add FS to my current portfolio. I currently max-out my ISA allowance by paying monthly Direct-Debit. I'm not sure if it would get messy or disadvantageous having numerous ISAs. What do you guys think?

Also, what are the total costs by going direct to FS? There appears to be two different funds and at quick glance can't seem to work out the costs / fees...

[williaa68]

The T class, which is the one you get from Fundsmith direct has a slightly higher charge than the I class that you get via platforms (10bps more I think) but the lack of platform charge probably compensates that.

The Fundsmith AGM is on 27th Feb. Worth attending if you have questions for Terry.

Edited by williaa68 on Saturday 3rd February 16:33

[xeny]

sidicks said:

Are you implying that the pension fund is 100% invested in a relatively small number of equities, like Fundsmith?

To my knowledge the fund was in ~20 equities between 4/12/2003 and 31/12/2013. I don't know after that date.

sidicks said:

That's company performance, not investment fund performance, isn't it?

They also report on company pension fund performance, but often in a size of deficit format rather than % return manner - there's some information there, and they do report the value fell in the 2008 annual report, but integrating all the information would take some time, especially as quite a few of them are in a really annoying display format.

[xeny]

Phooey said:

Sorry to hijack the thread..


Also, what are the total costs by going direct to FS? There appears to be two different funds and at quick glance can't seem to work out the costs / fees...

Fees for the different classes are in the top left corner of https://www.fundsmith.co.uk/fund-factsheet. You probably want 'T' class accumulator if you're investing directly.

[bitchstewie]

Phooey said:

Sorry to hijack the thread..

Most sensible way to invest in Fundsmith - directly or via your IFA? My ISA is on a Standard Life Wrap platform so if I asked my IFA to put some money in FS my thinking is I would be paying a LOT of fees (IFA + SL Wrap + FS). I can only invest in one ISA a year so I would need to make a decision - go direct to FS and *only* invest in FS (Full £20k for 2018/19) or ask my IFA to add FS to my current portfolio. I currently max-out my ISA allowance by paying monthly Direct-Debit. I'm not sure if it would get messy or disadvantageous having numerous ISAs. What do you guys think?

Also, what are the total costs by going direct to FS? There appears to be two different funds and at quick glance can't seem to work out the costs / fees...

Unless I've misunderstood, you can't do what you're talking about as you can only pay into one ISA each financial year.

So you couldn't open an ISA with Fundsmith and put money in that and pay into your existing ISA by DD at the same time.

[Phooey]

williaa68 said:

The T class, which is the one you get from Fundsmith direct has a slightly higher charge than the I class that you get via platforms (10bps more I think) but the lack of platform charge probably compensates that.

Cheers. I see there's also a R class

xeny said:

Fees for the different classes are in the top left corner of https://www.fundsmith.co.uk/fund-factsheet. You probably want 'T' class accumulator if you're investing directly.

Thanks. So, for example 1.05% for T class. Is that an all in fee - like nothing else to pay, ever?

bhstewie said:

Unless I've misunderstood, you can't do what you're talking about as you can only pay into one ISA each financial year.

Correct -

Phooey said:

I can only invest in one ISA a year so I would need to make a decision - go direct to FS and *only* invest in FS (Full £20k for 2018/19) or ask my IFA to add FS to my current portfolio.

[xeny]

Phooey said:

Cheers. I see there's also a R class

That's historical, an artifact of http://moneytothemasses.com/news/retail-distributi... and the move to make financial adviser fee handling more transparent.

Phooey said:

Thanks. So, for example 1.05% for T class. Is that an all in fee - like nothing else to pay, ever?

1.05% per year. same way as fund and IFA fees are typically quoted. No entry or exit fees though.

[giles panizzi]

Excuse my ignorance - difference between R & T class is?!

Thanks

[xeny]

Fees - R class is .49% more expensive than T class.

If you want to understand why, read http://www.morningstar.co.uk/uk/news/96826/what-is... and remember that R effectively stands for Reseller. For completeness I is for Institutional and T is for Terry.

[sidicks]

xeny said:

To my knowledge the fund was in ~20 equities between 4/12/2003 and 31/12/2013. I don't know after that date.

I find that incredibly hard to believe - what is your source for that?

xeny said:

They also report on company pension fund performance, but often in a size of deficit format rather than % return manner - there's some information there, and they do report the value fell in the 2008 annual report, but integrating all the information would take some time, especially as quite a few of them are in a really annoying display format.

If they are looking ar the deficit they are looking at moves in both the assets and the liabilities, so that isn’t going to help at all.

[xeny]

2:30 into https://www.youtube.com/watch?v=Jo5e2TlGuoQ - it's a presentation to the IoD.

I was thinking that as the scheme was closed to new members, I should be able to get figures that are consistent between triennial reviews?

After some sleep I think a better approach is probably to look at what the initial Fundsmith constituents did over the 2007-2009 period.

edit: 20 is explicitly stated at 3:50 into the video.

Edited by xeny on Sunday 4th February 06:40

Edited by xeny on Sunday 4th February 06:41

[bitchstewie]

Regards diversifying a little I was also looking at LT Global Equity.

Should also add this is about the initial chunk to go into an ISA that will be getting maxed out each year and is there for the long term so if I need to change course I can do so.

I should just say a big thank you to everyone who's replied on any of my numerous threads - appreciate the questions may be basic stuff to many but I'd like to try to understand v simply doing what a book says and I'm certainly not looking to get rich quick, hence my "paradox" point about Fundsmith (and LT Global to some degree).

[TFP]

xeny said:

Fees - R class is .49% more expensive than T class.

If you want to understand why, read http://www.morningstar.co.uk/uk/news/96826/what-is... and remember that R effectively stands for Reseller. For completeness I is for Institutional and T is for Terry.

R stands for Retail

T is generally used to denote a clean share class. Not an abbreviation for Terry.

[sidicks]

xeny said:

2:30 into https://www.youtube.com/watch?v=Jo5e2TlGuoQ - it's a presentation to the IoD.

I was thinking that as the scheme was closed to new members, I should be able to get figures that are consistent between triennial reviews?

After some sleep I think a better approach is probably to look at what the initial Fundsmith constituents did over the 2007-2009 period.

edit: 20 is explicitly stated at 3:50 into the video.

1. very interesting, thanks (but very surprising!)
2. even if the scheme was closed to new members, the value of the liabilities could change significantly between triennial valuations due to longevity experience, assumptions for future interest rates and inflation and of course projected longevity improvements.

[bitchstewie]

xeny said:

2:30 into https://www.youtube.com/watch?v=Jo5e2TlGuoQ - it's a presentation to the IoD.

Every bloody video I watch has me more impressed at how straight talking the bloke seems.

Not sure the Aston will be arriving any time soon but he does deliver a bloody good talk.

[ukwill]

xeny said:

That's certainly true - however Fundsmith's performance leaves a certain temptation to:

"Give your money to Terry Smith.
Sell the flat. Max out both isa’s, yearly. Keep the Aston"

a quote that makes me smile from https://www.pistonheads.com/gassing/topic.asp?h=0&... - Harry Flashman's thread on "How do I become investment literate?"

At which point it clearly is a big (and probably not sensible, although I note with interest it is essentially Terry's aproach) deal.

As an aside, is there any way to link to individual posts in threads?

That was me

It was slightly tongue in cheek, but I’m sure you could actually put a convincing case forward for going in heavy, if you wished. Me personally, I’ve had a Fundsmith/Woodford sipp combo running for a while, but decided to divest my Woodford holding in Jan 17 and move that into Old Mutual Asia Pac- I’m very glad I did (glad to be out of uk equities for now).. Overall the combo has produced excellent returns and I’ve no thoughts of tweaking. I’m very impressed with Terry Smith’s investment approach, and I’m more than happy to leave my money with him - even if 10yr tbond yields do get to 3% (I think Trumps corp tax cuts will provide for another healthy year at least - but I believe the fed will have to step in if things continue to heat up).

[bitchstewie]

Any thoughts on Lindsell Train Global Equity?

Seems a similar approach to Fundsmith (there's some overlap) but the clue's in the name, seems to have a more global mix whilst Fundsmith is basically 65/35 US/UK split.

[xeny]

bhstewie said:

Any thoughts on Lindsell Train Global Equity?

Seems a similar approach to Fundsmith (there's some overlap) but the clue's in the name, seems to have a more global mix whilst Fundsmith is basically 65/35 US/UK split.

Depends somewhat on your perspective on Japan's situation, which is a market people tend to be have strong opinions about, and I vaguely recall I didn't terribly like the fee arrangements compared to Fundsmith, so check the detail numbers for the share class you're looking at.

[RL17]

bhstewie said:

Any thoughts on Lindsell Train Global Equity?

Seems a similar approach to Fundsmith (there's some overlap) but the clue's in the name, seems to have a more global mix whilst Fundsmith is basically 65/35 US/UK split.

pretty good and not much overlap with Fundsmith which is good.

Loads of UK equity income funds used to be pretty similar when looked a few years ago - so holding 3 or so funds would concentrate rsik rather then using funds to diversify