Fundsmith Emerging Equit... Share Discussion Threads

[jonwig] 07/7/2019 13:50

andyj - OK, point taken, but I'm a holder for more like ten months, so maybe I'm just being myopic!

[essentialinvestor] 07/7/2019 13:46

Jon, it's a good question, I don't think Nigeria was a major exposure.

[andyj] 07/7/2019 13:23

I am surprised that you rate JEMI as a good performer. It has risen 10% in 8 years.

[jonwig] 05/7/2019 14:46

EI - if the Nigeria holdings (sold) were hit by political issues, how much of the current weakness would be explained? (And, who would invest in Nigeria anyway?)

He has avoided financials, which also explains a lot. And utilities? My other two holdings, JEMI and UEM, invest in these sectors (respectively) and have been good performers.

A global recession and trade freeze would hit financials hard, and FEET could e
merge as a defensive exposure.

[essentialinvestor] 05/7/2019 14:20

It's still does not answer the question ...if earnings, free cash flows etc
across their portfolio are rapidly accelerating, why is this (in broad terms) not
reflected in share price increases ?.

So I would question is that accurate on FEET portfolio earnings, cash flows ?.
are they in fact growing at a clip?.

Something does not add up, just attempting to understand what that is .

[red army] 04/7/2019 20:35

Not sure why posters are comparing with SSON as it is a different sector completely.

[mad foetus] 04/7/2019 19:44

Since launch FEET is up 20% while the main FS fund is up 175%, and SSON has achieved in 6 months the same return FEET has managed in 5 years. It is a conundrum.

[edwards9] 04/7/2019 18:58

Good Evening G,The presentations detail the ETF's largest stocks holdings, not each & every constituent stock within the ETF.

[andyj] 04/7/2019 18:51

Today is a case in point. The NAV rose, but the shares fell, widening the discount. The fund can no longer live off the Terry Smith association and must now prove itself. I suspect as others have mentioned, the discount is going to widen in line with other trusts that do not pay dividends, ie 10-15%.

[edwards9] 04/7/2019 18:38

Goyathlay,I am unsure that FEET has waived from point 1. Although your criticism of 2&3 is fair.FEET does hold a higher portion of Consumer staples and less tech than Fundsmith & Smithson. This is a factor too. Interestingly the US consumer staples sector appears to have broken higher decisively just recently after being range bound for almost 3 years. This may well spur emerging market consumer staples.

[red army] 04/7/2019 18:10

goy

Yes there are plenty of others. Has anyone tabulated the performance of the rest of the funds?

[goyathlay] 04/7/2019 17:55

His philosophy is

1) buy good companies
2) don't overpay
3) do nothing

He has clearly departed from 2) with his extremely highly-rated purchases, and 3) with his high turnover. Now,with his new policy of buying more ETF-friendly stocks, which will have a lower ROCE, he is departing from 1)

In other words, you might as well look elsewhere as the philosophy is in tatters.

I urge you all to get a tab of each of his three funds open at the fund factsheet and compare the performances of them (admittedly SSON has only recent data)





Money in FEET is dead money.

[edwards9] 04/7/2019 17:03

I am hoping that where there are companies that meet the existing investment criteria/rationale & are included within ETF flows, that these companies will be prioritised over ones that are not benefiting from ETF flows.

This would in the near term increase the portfolio turnover but hopefully would enable higher returns for FEET investors.

[essentialinvestor] 04/7/2019 16:07

goyathlay's point may be valid, if their holdings are rapidly increasing free cash flow
and growing that strongly, multiples should be reducing at a clip, yet looking
through a few examples multiples appear very high.
To be fair Terry uses broader valuation metrics, however the same applies,
many of their holdings must be getting cheaper on a range of metrics.

If you look at those two Nigerian listed companies they sold in June
they both suffered dramatic % falls over the last year - unless the FT data
is incorrect. That's the unadjusted FX decline just to clarify.


If anyone has a different take or can add to the above would be interested to hear?. Thanks.

[jonwig] 04/7/2019 16:03

Post #277 was my reason for underperformance of FEET vs other EM trusts. I'll stick by it until it's proven wrong. I don't hold this alone, but JEMI and UEM as well.

[red army] 04/7/2019 15:48

This fund is under performing the other EM funds by some margin. Not sure why but action is required.

[goyathlay] 04/7/2019 11:10

I binned the rest of my FEET and invested in SSON.

This has gone nowhere in 5 years, He paid too much for his stocks and has a high turnover.

Something doesn't add up: he claims that their earnings are growing at a rate of 18% yet the PE remains in the high 30s from year to year.

Now he suggests that the strategy will be modified and he WILL invesst in some of the 'hot' companies and sectors.

Schizophrenic.

[essentialinvestor] 03/7/2019 23:04

They sold Guiness Nigeria and Nigerian Breweries last month, both have suffered
significant % share price declines on a multi year basis.

Colgate India, which has been a better performer, was also sold in June.

Find that sale surprising as Colgate India was one of the stocks highlighted
at the recent AGM presentation.

Does not inspire much confidence, hopefully that view is too cautious.
Think the NAV discount is more than warranted for now. It may widen further.

[essentialinvestor] 03/7/2019 13:16

Many investors are also looking for yield. HFEL, SOI etc pay growing dividends.

[andyj] 03/7/2019 08:53

This stubbornly refuses to join any global rally or rally in Indian equities.

[essentialinvestor] 12/6/2019 13:38

Bexit eh, the gift that keeps on giving!.
Mentioned elsewhere I thought there was considerable upside for GBP
against multiple currencies, however my aSSumption was we would ultimately leave
with some sort of deal. Instead we face continuing uncertainty with now markedly
weakening UK macro.

[chucko1] 12/6/2019 11:57

EI, it has never been bigger. Anyone would think that TS is going for a long walk. He isn’t. You could wake up one day and find the NAV is 1450p as the thesis began to play out, if only slightly. With a likely reduction in discount as investors remind themselves what this is really all about.

I am mildly persuaded that the two “replacement” fund managers will succeed in bringing the additional focus to details that TS could not stretch himself to. But they will surely be overseen by TS such that the thesis, by which investors in his other fund(s) have done very well, remains the principal component of this fund.

I am not buying more as I feel that the current weak GBP could be a significant headwind for some time as it returns to a higher level on the eventual conclusion(?? - have I lost my marbles?) of Brexit.

[essentialinvestor] 12/6/2019 11:16

70 pence plus NAV upwards gap, Largest discount I can remember.

[essentialinvestor] 11/6/2019 14:34

Had a watch.

What did not appear commented on ... some of their holding are getting 'cheaper', which feeds in to the original prices paid. They arguably overpaid.

Clearly there have been some poor performers which have detracted.

PE is a very rudimentary metric and I fully accept Terry's point re valuation, however some of the multiples (even now) can only be justified if
there are years of powerful growth to come.

Terry did reference valuation metrics bring more than on the main fund, which is unsurprising.

If we do hit another recession/marked slowdown, is there much margin of safety here?.