Fundsmith Emerging Equit... Share Discussion Threads

[edwards9] 08/6/2019 10:54

The 2019 AGM video is now available to view on the FEET website

[essentialinvestor] 28/5/2019 12:21

Jon, good summary.

Having made a big 'bet' on FMCG, this may not be the most apposite time
in the cycle to change approach.

[jonwig] 27/5/2019 13:57

Haven't EM trusts in general done well because they've invested in exciting stuff such as financials, tech?

FEET hasn't, and it shows, but when the ordure collides with the extractor which strategy will be left standing? I'm suggesting it has potential defensive value.

So what can go wrong with the EM story? Probably not bonds (they aren't all like Argentina, USD-denominated), but a trade war. EMs are vulnerable to supply chains in the US (Cen Am) and China (SE Asia).

I think it's right that TS hands over active strategy, and it's noteworthy that he accepts things haven't gone so well recently (nudge to Woodford who does no such thing), so I'm certainly holding, as part of my EM exposure. (UEM the other main part.)

[essentialinvestor] 27/5/2019 13:46

Would very much hope the fundamental approach is not going to change,
particularly given multiple compression.

[jbarker5555] 27/5/2019 08:45

It seems to me as though Terry has stopped listening to his own mantra, why chase stuff now that the ETFs have dragged higher? Surely by sticking to the orginal approach FEET will start to out perform.
I too have no problem with the manager changes but wouldn't want them to change the long term approach looking for short term outperformance. :)

[papy02] 25/5/2019 15:58

The Presentation deck of charts from the 2019 AGM is on the website:


After 5 years of stunning look-through metrics for ROCE & cash conversion, and better-than-index Free Cashflow growth, the FEET portfolio NAV and share price still trail the (MSCI Emerging & Frontier Markets) index.

So the stocks FEET holds must have been getting cheaper and cheaper vs the index (on fundamentals) during the 5 yrs?

If the problem has been overpaying initially, it's not clear to me why starting to look at "quality" stocks that are better represented in the index-tracking ETFs (as suggested in TS comments to the press) is a good solution. Seems more like capitulation after those stocks have 5 yrs of getting relatively more expensive?

I have no problem with the proposed organisational change to how the portfolio is run. I still hold FEET (3rd largest position for me) but am concerned that (at least in public) the problems and solutions for the investment approach do not seem to have been correctly identified.

[essentialinvestor] 24/5/2019 10:11

I had two lots, first @ 1188, second 1185.
Perhaps should have taken a larger amount.

[wirralowl] 24/5/2019 10:09

Also bought a quarter of my SIPP holding back yesterday @ 1185.

[essentialinvestor] 24/5/2019 10:06

Wanted a few more this AM, but a 2% spread is ridiculous.

[essentialinvestor] 23/5/2019 12:20

Valuations are a large part of what's happened here, at least to this point.
Many holdings may have been purchased on arguably expensive multiples.
However, it's the very sizeable concentration on FMCG that also has a bearing.
Underweight technology and healthcare a possible relative detractor. Added a small amount @ 11.88, but it may pay to be more patient.
The ramping up of nationalism in China this week is a tad ominous.

[chucko1] 22/5/2019 23:32

They are not likely to alter the overall philosophy at all. I see the changes as a positive and today’s minor selloff as an opportunity. That said, GBP is weak and so any reversal will act as a headwind to price recovery of FEET (perhaps even in the medium term).

[jbarker5555] 22/5/2019 21:29

Also puts (some) of his money where his mouth is as he's just bought another £1M in FEET. M O'Brien worked for Collins Stewart pre Fundsmith so presumably Terry knows him well and holds a good opinion of him. :)

[topvest] 22/5/2019 21:19

Sign of a great investor. He says "sorry" and aims to make changes when things haven't quite gone to plan. Think the new plan makes sense, as otherwise Terry Smith is over-stretching himself.

[jbarker5555] 22/5/2019 20:48

Has anyone contacted the company to find out when the ASM will be posted on their website? :)

[montynj] 22/5/2019 15:57

But I'm glad that they have acted...this is good news !!!!!

[essentialinvestor] 22/5/2019 10:53

Performance has been disappointing, unquestionably.

As mentioned recently this is a very focused fund with significant Indian exposure, overwhelmingly in FMCG.

[wirralowl] 22/5/2019 10:21

Didn't see this coming!

[essentialinvestor] 20/5/2019 08:17

If Modi is back should be helpful.

[essentialinvestor] 17/5/2019 11:55

There are a couple of factors to keep in mind.
The trust is highly concentrated on Indian listed stocks
and even more concentrated on sector allocation-
holdings are overwhelmingly FMCG.

Sectors such as healthcare and technology represent very low weightings currently.
Slowing growth experienced by many Indian consumer goods companies
has gained some attention recently.

[chucko1] 16/5/2019 22:18

Spacecake, I cannot see any connection between level of interest and performance. What’s your thinking?

[spacecake] 16/5/2019 22:08

The level of interest in this fund at launch was a small fraction of the interest that SSON received. I see this continue to struggle

[mad foetus] 16/5/2019 13:11

I've been in since launch. TS said the investable universe of FEET had risen by 30% pa over the decade prior to launch. He also said it was a better long term investment that Fundsmith. It has been disappointing but I suspect a 100% year cant be far away.

[topvest] 16/5/2019 13:05

Yes, that sums it up neatly. High quality portfolio but on a P/E of 45 he certainly paid an expensive price.

[essentialinvestor] 16/5/2019 11:18

Added a few this AM, however Terry may have overpaid for some holdings?.

To be fair it's long term value rather than shorter term price he's focussed on.

[topvest] 11/5/2019 21:38

Yes, agreed. Performance has been disappointing to date. Needs more time I guess. Terry is a great investor.