Fundsmith has generated a lot of interest lately (see this thread) and i have a friend who contacted VIAC to know if there would be any possibility to add funds such as Smithson or the Fundsmith Equity Fund to their list of fund.
VIAC’s answer was that they are open to new funds but mainly focus on passive one with low cost. However, if there is a strong demand for a specific fund from clients, they might include them.
This forum is the perfect place to federate such a a demand!
Now I know that active funds are very often not a good idea, but I strongly believe that Fundsmith is an exception and it is worth paying the fees for their performance.
To sum things up:
The two funds I would be interested in are:
The Fundsmith Equity Fund, a mutual fund focused on global big caps, created in 2010
The Smithson Investment Trust PLC, an investment company focused on global Middle and Small caps, created in 2018
Both funds have an outstanding track record. The Fundsmith Equity Fund has performed, after fees, 16.7% per year in GBP. If you take into account the Fx effects of GBP against CHF, this would be around 14% per year in CHF.
Both have been very solid during periods of turmoil:
while the S&P 500 lost 25% year to date, FEF lost only 7.9% (in GBP. For a Swiss investor it would be closer to -14%, still a very good outperformance)
in 2018, while most funds and indices lost money (especially during the harsh second half of the year), Fundsmith generated positive results
They generated this performance without leverage nor using derivatives, only by buying shares for the long term
If you want to have more details about their philosophy, you can read their Owner’s manual
All of this to say that i am a strong supporter of these managers and already invested with them.
Who would be interested to have Fundsmith funds available in VIAC?
EDIT: You may think that Terry Smith (the fund manager) was lucky to operate after the 2008 crisis. But before Fundsmith, he was in charge of the Tullett Liberty Pension Fund, where he averaged 14% per year in spite of the subprime crisis.
EDIT2: If you are curious to ask why i think Fundsmith is going to outperform, see [this other post] (Active investors on the forum).
I would note that you would need to take into account VIAC fees on top of it + currency conversion. I don’t know what are the withholding taxes in this fund.
I still believe that after fees, in the long run, passive is better (Check SPIVA reports if interested). Moreover, the fund only started in 2010. Also, when funds are getting bigger, the performances are getting lower.
I would prefer that that stay concentrated on the current model which would fit with the majority of investors. For sure giving more options is great, but I am afraid that it would lower the quality of other features/services.
Wait and see how it performs over 30 years. It was easy to make money in a post 2008 world.
We know for a fact that almost all actively managed funds underperform the index longterm. To make matters worse betting on a previous winner has even a higher chance of underperformance.
Just for my understanding: which advantage would we have keeping such funds in 3A instead of with the broker as usual (provided that there is an ETF version available, which - as I’ve understood reading the other topic - it’s not the case right now) ?
I was expecting to get skepticism from Efficient Market followers, but please check your facts before stating half-baked truths.
Before launching Fundsmith, Terry Smith was nominated at the head of the Tullett Liberty Pension Fund in the early 2000s. At the time the pension fund was severely underfunded. In spite of the subprime crisis, Smith managed to compound at 14% per year and returned the fund to surplus. Source 1, Source 2
The guy was making money in a pre-2008 world as well. The world is not as black and white as you’d like it to be. Although most managers have poor results, a few do over perform in the long term, and I’d be irrational not to act when i see one.
3a pillars benefit from tax advantages, but provide usually a poor selection of funds.
If you invest XXX CHF in Fundsmith (or anything else)outside of the 3a pillar, you will owe taxes on these XXX CHF to the tax office
If you manage to invest XXX CHF in Fundsmith inside of a 3a pillar, you get both the tax advantages related to the structure, and superior performance compared to usual solutions.
I guess you would still have to keep 40% in CHF denominated products or cash. However Fundsmith has a I Class Swiss Franc share class. Denominated in… CHF (https://www.fundsmith.co.uk/global/eu/documents). However, I have no idea if that could count towards those 40%. If yes, it would really be awesome to be able have e.g. 60% Smithson and 40% Fundsmith for example. I asked this question regarding the 40% and this I Class Swiss Franc to VIAC in an email. They answered to the other questions but not this one.
And to back-up Julianek, Terry Smith does have a longer track record than his Fundsmith. But you would have had to look for it.
I do not think that Julianek or any of the ones here interested in the fund is being paid to promote the fund… We just believe that while passive and low cost ETFs are very often the best way to invest for most people instead of trying to beat the market, a few individual have been able to do it. By the way, there is an old letter from Warren Buffett on that topic. So if we can, why not investing along them. Obviously, we speak of beating the market after fees. Terry Smith is one of those individuals with actually a very sound and simple strategy. I would really recommend to have a look at his annual letters or “shareholder” meetings even for those not interested. He does not actively trade, try to short etc. but just look for above average companies that he wants to hold for as long as possible. Actually, this mindset is very close to the one of Warren Buffett after he met Charlie Munger. Finally, unlike some fund managers, he and his team put their money where their mouths are since they are also invested, and not by a tiny amount. E.g. Smith put around £20M-$25M in the fund to start it and still puts his money in it.
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.