One would need to look up the real numbers, but the math should be
(X-asset depretiation)*(currency depreciation)
Assuming 8% drop in asset value and 8% drop in currency value the result is 0.92*0.92= 0.84. Apparently still better than 0.77 (drop of 23%) of the broad market.
Thanks for explaining. Still have a lot of maths to learn!
So with GBP currency and value drop (assuming I cash out on Mar 31) its down 16%.
With the general index tracker in the US, its down 24%. (US/CHF currency moved 1%).
8% difference in favor of fundsmith in this case
It focusses on Consumer, Pharma & Tech.
In hindsight, itâs clear why it âbeatâ the market in these months, no?
But will it next month?
Also itâs accumulating, so the dividends are added. Most indices are as if âdistributingâ, so a few % a year difference.
I guess so- but it seems pretty resilient in these (and other) tough times. The last 10 years performance looks excellent.how it continues after this 10yr bull run is another story
No magic hidden benefit.
Itâs the underlying stocks that are relevant. The GBP & its value to CHF, USD etc is irrelevant.
Donât forget to substract the appaling GBP performance :-).
Still, Fundsmith does fine and beats SP500, but if you put all the numbers straight it is not as gigantic as it appears at first sight.
You could basically get the same performance passively by investing in MSCI World Momentum or MSCI World Quality factor ETF.
Whatâs the TER anyway? And the domicile?
Why not VGT and/or a Vanguard Growth ETF with domicile USA?
These look interesting alternatives! However 2015/2016 they donât seem to perform too well, otherwise quite interesting
Sure, the Sterling decreased in value over 10 years (most of it coming from the Brexit).
But 10 years ago, the dollar and the euro were as well much stronger against the Swiss franc (in April 2010, 1 EUR = 1.47 CHF and 1 USD = 1.17 CHF). So for the Swiss investor, it is more an issue of having your domestic strongly strengthening against every other currency over the last 10 years.
I agree that if you plan to stay and retire in Switzerland, this is not optimal. However, if you are accumulating in Switzerland and plan to retire elsewhere, then it is very good. Profit from your CHF having increased value so you can buy more, and then retire in EU with Fundsmith strongly performing in EUR denominated termsâŠ
I agree with the first bit, that you earn substantially more in CH since 10 years ago in EUR, GBP or USD terms, but you can retire in EU with VT in USD or VWRL in CHF or even a World ETF in Zimbabwe Dollars & the outcome/performance for you in EUR will be identical in EUR.
The way you write it doesnât help (other people) to understand the currency of a fund is irrelevant IMO.
And I doubt fundsmith outperforms when you compare it to the correct passive growth ETF.
Ok so letâs compare apples to apples, and convert everything to USD, since both passive indices are in USD.
The factsheet of these indices can be found here and here
Over the last 10 years, since Fundsmith inception:
Now letâs figure out how much Fundsmith would have performed in USD, after fees.
Over ten years, the total performance would be (1+16.7%)^10 * 1.24/1.52 = 3.82, so +282% performance.
To translate it in annual performance, we take the 10th root of 3.82, which gives 1.143. So the annual performance of Fundsmith, in USD and after 1% management fees is 14.3% per year.
It has beaten its benchmark (MSCI world index, comparable to VT) by 7.8% per year, and it beats the two growth indices by between 3% and 4% per year.
I am happy to correct it if i made a mistake.
But by now i hope my writings are not confusing anyone anymore.
As to whether it will continue to outperform, everyone has his own idea. Iâll let you do your own diligence on the matter.
Impressive comparison (thanks) and impressive (out-)performance.
It may be âhiddenâ in the terms used âgrossâ etc, but Iâm not 100% in my understanding of these terms, so just to confirm these performances all include dividends (which may have be paid out or accumulated). As long as itâs included in some way in all performances thatâs fine for comparison.
Hello,
I have the fund with Swissquote and I also have an account in the SICAV Lux. The fund in my opinion, is excellent, not only for the return but also for the investing process.I have it since 2 years approx, the main question for me was always how will it do once there is a massive drop in the market⊠well, now we know, better than S&P 500.
Swissquote has it as Tier B, which means you pay 0.5% per transaction ranging 50chf min and 250chf max. It is not cheap, but it is very convenient. That fee is one time (two if you add when selling) and will in any case be lower than an average fund of 1.5%.
Opening the Sicav was fine, many papers to fill but not complex at all, then a certified copy of passport (SBB or Poste will do) and the subscription is via fax or letter, not phone, email or online, which is a bit old fashion. I personally ran some scenarios, and if you do not plan to invest regularly (cost average) but you plan to put one off or maybe two three, SQ is acceptable for me.
For ETFs, few stocks I have IB but I am more into diversifying as well my positions in banks/brokers.
If you want more info, please let me know.
Thanks for sharing!
Could you please share a bit more on how you started this process? Also, is there any way to check your position online?
Thanks!
I contacted Fundsmith directly and I explained them what I wanted and they suggested the SICAV in Luxembourg. My main concern, from past experience, was if they will apply any tax on capital gain to which via phone, the SICAV management confirmed that they will reimburse the gross and it is my responsibility to pay the taxes based on my residence(s).
Again, I would like to remark that there are other platforms where you can get it such as Swissquote or HL in UK. Fees are higher than the SICAV but you might have better control in other aspects.
Hey for all people interested in Fundsmith / Terry Smith, he just published a new book about their investment strategy - Investing for Growth.
Unfortunately it is so new that there are no reviews, let me know if you buy it.
His perspective as an active fund manager should be really interesting, Iâm curious to know what he has to say even if he is of course selling his fund.
Similar content to the AGM video posted above in regards to strategy/company selection which is recommended to watch. His earlier book Accounting for Growth is another good read (hard to get hold of in CH) which breaks down how companies have failed in the past and what he looks for. On that subject The Signs Were There is a more modern alternative that has a similar approach at dissecting accounting practices to uncover companies which are set to take a dive. Recommended reading if Fundsmith interests you.
