The Lemon Fool

The above fund has been recommended to me.

Just looking at the price growth chart - the returns look very favourable.

Does anybody have any thoughts? - or alternatives!

I am looking to invest a sum of money - I don't need to income just yet.

Not sure what class 1 is, class I is usually for very large sums of money, and carries a slightly lower management fee.
T Class is the standard charge and R Class is significantly more expensive.

It has been a very good performer for a number of years and I have held it since inception.
However there will doubtlessly be periods of underperformance, if you are happy riding these out and they have a lot more money to manage now which can make things more difficult, then it is a decent bet for a large cap international growth fund.

I hold Fundsmith Equity I Instl Acc, which has the amusing ticker (MEXID) of "FUQUIT", and is the class you are likely to own if you buy it via a large broker/platform (ATS in my case).

Yes, it's done well, although you have to remember that at least part of that is down to the fall in sterling. However, Terry Smith a FUQUIT is not and the fund has done well anyway. I recommend you read their site, http://www.fundsmith.co.uk, and in particular the "Owners Manual" to see if his philosophy fits ok with you.

Just remember that for any discretionary manager, sucgh as Terry Smith, past performance is no guide to future returns.

That does not apply to rules based based funds where the process used will tell you what stocks the fund will hold and in what proportion.

This snapshot of the portfolio

http://www.morningstar.co.uk/uk/funds/s ... LK2N&tab=3

gives an indication that it has a high allocation to expensive shares.

Rob

OhNoNotimAgain wrote:Just remember that for any discretionary manager, sucgh as Terry Smith, past performance is no guide to future returns.

That does not apply to rules based based funds where the process used will tell you what stocks the fund will hold and in what proportion.

This snapshot of the portfolio

http://www.morningstar.co.uk/uk/funds/s ... LK2N&tab=3

gives an indication that it has a high allocation to expensive shares.

Rob

The performance of any fund is not a guide to future returns, that is the nature of stock markets, though active management whether through human decision or algorithmic formulae add additional uncertainty.

Smith's guide tells you the shares he prefers and he has an exceptionally low turnover.
Few rules based fund will tell you which stocks will be held in what proportion because the rules will tell which stocks are to be bought and sold according to some metric which alters the stocks over time

If it is a rules based fund then, contrary to what the FCA says, past performance can indicate what future returns might be.
A conventional passive fund will hold stocks in proportion to theit mkt cap and other rules based funds should folow their relevant guidelines.

Those with a bias to value will have underperformed in the QE boom but will be catching up now.

Rob

Thank you for your helpful replies.

Backache wrote:Smith's guide tells you the shares he prefers and he has an exceptionally low turnover.

As I understand it, he takes a very careful look at the Report and Accounts and only invests in Companies that he believes are solid and honest performers. There's an implicit assumption that Companies who window dress their accounts will eventually be found out, by events, if not by markets.

Alaric wrote:As I understand it, he takes a very careful look at the Report and Accounts and only invests in Companies that he believes are solid and honest performers. There's an implicit assumption that Companies who window dress their accounts will eventually be found out, by events, if not by markets.

Terry Smith has form on spotting such companies before events & markets do ... in fact he wrote a top-selling book on the matter, https://www.amazon.co.uk/d/Books/Accoun ... 0712652809 -- and got fired from his job at UBS, as their head of research, for it, as some of the companies he accused of profit massaging happened to be amongst UBS's biggest clients. http://www.telegraph.co.uk/finance/pers ... Smith.html

Few rememeber how closley he and his company were involved in the split cap episode. He is no saint.
Rob