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Terry Smith to launch sustainable equity fund

The Fundsmith Sustainable Equity fund is likely to target companies with a positive influence on the environment and society.

 
Terry Smith to launch sustainable equity fund

Terry Smith's investment firm is gearing up for the launch of a sustainable equity fund, Citywire Money sister publication Wealth Manager has revealed.

Fundsmith registered the Fundsmith Sustainable Equity fund with the financial regulator  on 7 September. The firm declined to any further information, but its branding offers a big sign that it will target companies with positive influences on the environment and society. 

It is also not clear who will run the fund but given the relatively small size of the firm's investment team, it is likely Citywire AAA-rated Smith will play a major role.

It will sit alongside the open ended Fundsmith Equity fund, which has amassed £12 billion of assets since its launch in November 2010. 

Its popularity has come on the back outstanding performance, with the find returning 246.9% since its inception versus a 129.2% gain in the MSCI World Index. 

Over three years to August the fund is the second best performer in the peer group, returning 98.6% versus an average of 46.8% in the sector. 

The firm also operates the closed ended £284.5 million Fundsmith Emerging Equities Trust (FEET ), which launched just over three years ago.

But it has failed to emulate the success of Smith's flagship fund, with the shares up just 2.4% since launch, versus a 23.4% average gain for emerging markets investment trusts.

15 comments so far. Why not have your say?

William Phillips

Sep 18, 2017 at 11:52

Is he trying to cover too many bases, like Woodford? (And from Mauritius.)

First, find your knitting. Then stick to it. Works best for most long-run outperformers in this game.

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Jim99

Sep 18, 2017 at 12:54

He said when he launched Fundsmith that there would only ever be 1 fund. FEET is of course an investment trust so that was OK I guess, but this would be a direct contradiction of that original 1 fund pledge. Why the change? Yes, he will be covering too many bases.

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richard tomkin

Sep 18, 2017 at 16:13

I like sustainable equities : I like even more sustainable share prices.

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chubby bunny

Sep 18, 2017 at 17:32

Terry's got a nice tan.

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halfinchnut

Sep 18, 2017 at 17:49

Why ?????? and what comes after this, another fund following the latest fad, sustainable fruit and veg fund perhaps. Stop diluting yourself Mr. Terry, you are in danger of not following your own mantra of investing in a small range of great shares and then do nothing.

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lee wood

Sep 22, 2017 at 13:16

If some of the biggest tech companies in the World can be started from a garage im sure Mr Smith can operate from a Country

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David via mobile

Sep 23, 2017 at 09:29

Maybe that's the problem, if he buys a small range of great shares and does nothing, he's got nothing to do :)

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Daniel Godfrey

Sep 23, 2017 at 12:46

Why don't you wait to see the details before making up your minds? You only know the name of the fund today!

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richard tomkin

Sep 23, 2017 at 12:53

Only a matter of time before one these guys launches a " Sin " Trust i.e buying all the unmentionables,like weapons,drink,tobacco,betting,narcotics etc

On second thoughts,what a bloody good idea - any takers ?

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Franco

Sep 23, 2017 at 12:54

His success with his first fund has gone to his head. His second fund is a sorry failure. Give him another couple of years and he will be apologising for his underperformance in both.

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dab

Sep 23, 2017 at 19:02

Looks like a sound move as SRI is a strong growth area. The companies selected will most likely simply be a sub-set of the universe of businesses already under surveillance. I do not currently hold any of the Fundsmith offerings, but this has got me interested.

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richard tomkin

Sep 23, 2017 at 21:35

I suppose Body Shop would have been classed a SRI at one time ; only a pity it was acquired by " because you're worth it " L'Oréal. Hey Ho !

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chubby bunny

Sep 23, 2017 at 22:16

@richard tomkin - Check out VICEX, it specifically invests in alcohol/tobacco/gambling/firearms companies.

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chubby bunny

Sep 23, 2017 at 22:22

Baillie Gifford Positive Change was launched in January and has a similar SRI mandate. It's done very well so far, 19.7% over 6 months.

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dab

Sep 23, 2017 at 22:59

I recently bought into Baillie Gifford Positive Change fund and am hoping it will behave like a cleaner version of Scottish Mortgage investment trust.

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