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  #261  
Old 08.02.2017, 08:47
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Re: Investment fund

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That's not true, I compared Fundsmith T Acc (GBP) with iShares S&P500 Acc (GBP), ticker CSP1. So this chart shows total return in GBP.
I stand corrected. Editing the post above accordingly.
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  #262  
Old 08.02.2017, 10:15
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Re: Investment fund

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They are an international fund holding 29 stocks there should be zero correlation to the S&P 500 index, looking for a connection is pointless.
While there shouldn't be any causality links, if there is a statistical correlation that means that the results of Fundsmith, to some extent, can be replicated by a much cheaper ETF.

The counter argument of course being, what is said extent, and what is the performance cost? Also, how does FS handle drawdowns?

As far as performance goes, annualised for the last 5y, S&P total returns does 19.12% in GBP terms, and FS did 20.28%. Since Inception S&P did 17.71% and FS did 19.10%. Volatilities are just 2 points away in favor of FS, so the sortino gets better.

Re: drawdowns the fund dipped at around 10% in the October and November past, but it recovered so quickly it doesn't really matter.

The fund also dipped another 9.60% in August 2015 with China's scare, and participated in past February's slump.

So yes it recovers quickly (so did the market by the way) and in absolute performance terms it is doing better than SPX (if only just). They're not much better in vol profiles, so it's not like you sleep easier at night with you money there instead of S&P, and their 50w rolling alpha comes and goes. Their beta varies wildly between 0 and 80%, and the only reason they're making more money than the market overall is because it's only 29 companies and they didn't get caught in the middle of the ridiculous rotations of '16 (which is when their performance really decoupled).


Would I pay a guy to hold 29 names and prey to god that the bull will never die? That's the question people should be asking themselves.
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  #263  
Old 08.02.2017, 10:37
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Re: Investment fund

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While there shouldn't be any causality links, if there is a statistical correlation that means that the results of Fundsmith, to some extent, can be replicated by a much cheaper ETF.

The counter argument of course being, what is said extent, and what is the performance cost? Also, how does FS handle drawdowns?

As far as performance goes, annualised for the last 5y, S&P total returns does 19.12% in GBP terms, and FS did 20.28%. Since Inception S&P did 17.71% and FS did 19.10%. Volatilities are just 2 points away in favor of FS, so the sortino gets better.

Re: drawdowns the fund dipped at around 10% in the October and November past, but it recovered so quickly it doesn't really matter.

The fund also dipped another 9.60% in August 2015 with China's scare, and participated in past February's slump.

So yes it recovers quickly (so did the market by the way) and in absolute performance terms it is doing better than SPX (if only just). They're not much better in vol profiles, so it's not like you sleep easier at night with you money there instead of S&P, and their 50w rolling alpha comes and goes. Their beta varies wildly between 0 and 80%, and the only reason they're making more money than the market overall is because it's only 29 companies and they didn't get caught in the middle of the ridiculous rotations of '16 (which is when their performance really decoupled).


Would I pay a guy to hold 29 names and prey to god that the bull will never die? That's the question people should be asking themselves.
What will get interesting is to see the results over a couple of market cycles, thats why my money is on FS. I think the fund does it best out performance in a bear & most underperformance in full on bull conditions which is what we have seen over the last 6 months when fund managers will buy any crap.

Drawdowns won't effect performance as FS owns about 0.5% of each of the company it's invested in, the entire fund could be very easily liquidated if 100% of its investors decided to walk away in a 30 day period, now compare that with a property fund..........
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  #264  
Old 08.02.2017, 11:23
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Re: Investment fund

I will tell you one thing. Withdrawing from Fundsmit is a PITA. Put the request in on the 31st of January. Endless forms and proofs required which they don't tell you are required until you phone and ask where your money is.

Sold at 297 and it's at 304 now. I wouldn't normally care. But the money isn't in my personal account and it isn't in my ISA. It's sitting in the ether and Fundsmith seem to think that's ok.

Terry Smith sues Barclays for 220,000 over money transfer

Well clearly Terry doesn't think it's ok...he just fails to practice what he preaches!
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  #265  
Old 08.02.2017, 11:30
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Re: Investment fund

Just buy the stocks yourself, it's not rocket science. You can easily find out all 29 companies that fundsmith holds if you like the guy so much, and buy the same. Fortunately buy and hold, no short and no market timing is strategy lends itself easy to replicating. For US stocks, you can even get exact number of shares he held each quarter from his SEC filings

More tricky is to buy them at the right moment, without overpaying - somebody already recommended here classic Graham book that should cover the basics of that
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  #266  
Old 08.02.2017, 11:34
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Re: Investment fund

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I will tell you one thing. Withdrawing from Fundsmit is a PITA. Put the request in on the 31st of January. Endless forms and proofs required which they don't tell you are required until you phone and ask where your money is.

Sold at 297 and it's at 304 now. I wouldn't normally care. But the money isn't in my personal account and it isn't in my ISA. It's sitting in the ether and Fundsmith seem to think that's ok.

Terry Smith sues Barclays for 220,000 over money transfer

Well clearly Terry doesn't think it's ok...he just fails to practice what he preaches!
Money laundering laws apply to every financial institution, nothing to do with FS.
Terry Smiths transfer was delayed over 4 years, your delay is less than 7 business days as settlement is not on transaction day. Your 3% loss to date shows the risk of not being fully invested.
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  #267  
Old 08.02.2017, 11:45
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Re: Investment fund

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Money laundering laws apply to every financial institution, nothing to do with FS.
Terry Smiths transfer was delayed over 4 years, your delay is less than 7 business days as settlement is not on transaction day. Your 3% loss to date shows the risk of not being fully invested.
I don't mind filling out forms if I'm told which forms they are and that they are needed. I phoned before to ask the procedure and I was told to do it online and I will receive a cheque within 4 days as they don't have my bank account details. Which is fine.

9 days later and I'm still filling out forms.
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  #268  
Old 22.02.2017, 12:00
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Re: Investment fund

do you think it's still a good moment to enter in Fundsmith?

Since most of my cash is in CHF, to avoid conversion fees, I was wondering what's the difference between CHF I ACC and T ACC.


How does the procedure of investing in them works? Is it easy to invest money from time to time?
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  #269  
Old 22.02.2017, 12:04
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Re: Investment fund

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do you think it's still a good moment to enter in Fundsmith?

Since most of my cash is in CHF, to avoid conversion fees, I was wondering what's the difference between CHF I ACC and T ACC.


How does the procedure of investing in them works? Is it easy to invest money from time to time?
https://www.fundsmith.co.uk/fund-factsheet

OCF is the main difference between I and T, oh and the minimum investment.

I'm invested in the I through hargreaves landsdown though.
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  #270  
Old 22.02.2017, 12:12
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Re: Investment fund

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https://www.fundsmith.co.uk/fund-factsheet

OCF is the main difference between I and T, oh and the minimum investment.

I'm invested in the I through hargreaves landsdown though.
I have just seen now that the minimum investment for CHF is 6 millions. I wish I could afford that.
I guess my best bet is to convert CHF to EUR and invest in EUR.

The main question remains, would it be worth investing in equities during these uncertain times? I guess I could risk ~20% of my capital on it, but I'm wondering if I'm going down the right path.

Thanks
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  #271  
Old 22.02.2017, 12:16
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Re: Investment fund

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I have just seen now that the minimum investment for CHF is 6 millions. I wish I could afford that.
I guess my best bet is to convert CHF to EUR and invest in EUR.

The main question remains, would it be worth investing in equities during these uncertain times? I guess I could risk ~20% of my capital on it, but I'm wondering if I'm going down the right path.

Thanks
I'm sure if you go through a broker it will be much lower. We are lucky in the UK in that we can invest 100 a month directly with fundsmith and avoid broker fees.

Regarding your second part I've always been told not to time the market. Far cleaverer people have tried and failed. The best time to invest is 20 years ago. The second time to invest is now.
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  #272  
Old 22.02.2017, 12:19
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Re: Investment fund

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I'm sure if you go through a broker it will be much lower. We are lucky in the UK in that we can invest 100 a month directly with fundsmith and avoid broker fees.

Regarding your second part I've always been told not to time the market. Far cleaverer people have tried and failed. The best time to invest is 20 years ago. The second time to invest is now.

that's convenient!
Can you actually buy into the fund through let's say, Interactive brokers?
Got it, T is if you buy directly, R through a broker, which gets a percentage.

Last edited by dau; 22.02.2017 at 12:32.
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  #273  
Old 22.02.2017, 12:32
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Re: Investment fund

If you buy it now, you'll be buying all its holdings at their current valuation. And valuations are crazy high right now, 4th straight month of trump bull rally.

Why not just buy some of its holdings? It's not a secret what they have. You can even find exact number of shares for all their US companies. It doesn't seem to me that they have any particular weighing strategy, they just buy what's cheap and try to be roughly equal weighted.

You can do the same. Sort their holdings by some reasonable valuation metrics, buy some cheapest N of them, repeat every month

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that's convenient!
Can you actually buy into the fund through let's say, Interactive brokers?
No, it's not on their mutual fund list.

But you can buy all the stocks through IB, almost the same thing and saves yourself the fees.
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  #274  
Old 22.02.2017, 12:35
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Re: Investment fund

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If you buy it now, you'll be buying all its holdings at their current valuation. And valuations are crazy high right now, 4th straight month of trump bull rally.

Why not just buy some of its holdings? It's not a secret what they buy. You can even find exact number of shares for all their US shares. It doesn't seem to me that they have any particular weighing strategy, they just buy what's cheap and try to be roughly equal weighted.

You can do the same. Sort their holdings by some reasonable valuation metrics, buy lowest N of them,
buy more or rebalance periodically.


No, it's not on their mutual fund list.

But you can buy all the stocks through IB, almost the same thing and no fees.

because I am lazy and I really have no time to go through rebalancing myself every month. I rather let professionals do it.

Market valuations at this point is what worries me more. but that means I might lose if markets will keep going up.
One could also wait till the market will correct again, but who knows when that'll happen. Timing the market is really difficult, everybody knows there will be a correction sometimes, but when this will happen nobody knows.
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  #275  
Old 22.02.2017, 12:40
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Re: Investment fund

There's no rebalancing and market timing with what I described - you have some investable cash from your paycheck each month and you just buy what currently looks cheap from the universe of good stocks that Mr. Fundsmith, or anyone else you trust, hand picked for you. Avoid putting too much into a single company or sector to reduce risks

With a bit of IT skills you can even scrape valuation metrics automatically from your favorite financial website and have it in a nice sortable spreadsheet. Just be sure to use something a bit more solid for investing decisions than plain P/E ratio for gods sake

Last edited by ivank; 22.02.2017 at 13:14.
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  #276  
Old 22.02.2017, 13:49
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Re: Investment fund

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There's no rebalancing and market timing with what I described - you have some investable cash from your paycheck each month and you just buy what currently looks cheap from the universe of good stocks that Mr. Fundsmith, or anyone else you trust, hand picked for you. Avoid putting too much into a single company or sector to reduce risks

With a bit of IT skills you can even scrape valuation metrics automatically from your favorite financial website and have it in a nice sortable spreadsheet. Just be sure to use something a bit more solid for investing decisions than plain P/E ratio for gods sake
That's pretty much what I do. When they paycheck comes in, take a look at what is good value and buy it.
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  #277  
Old 22.02.2017, 16:48
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Re: Investment fund

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That's pretty much what I do. When they paycheck comes in, take a look at what is good value and buy it.
How do you decide what's good value?

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Just be sure to use something a bit more solid for investing decisions than plain P/E ratio for gods sake
Like what?
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  #278  
Old 22.02.2017, 16:55
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Re: Investment fund

EV/EBITDA, P/FCF and their variations aren't too bad. You can compare with competitors and historical values for the stock to get a sense of the range.
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  #279  
Old 22.02.2017, 17:00
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Re: Investment fund

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https://www.fundsmith.co.uk/fund-factsheet

OCF is the main difference between I and T, oh and the minimum investment.

I'm invested in the I through hargreaves landsdown though.
You do realise you pay HL 0.45% a year charged monthly for the platform, making HL 0.35% more expensive than dealing direct. FYI I also use HL
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  #280  
Old 22.02.2017, 17:04
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Re: Investment fund

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You do realise you pay HL 0.45% a year charged monthly for the platform, making HL 0.35% more expensive than dealing direct. FYI I also use HL
what's your opinion on entering now vs waiting ~6months to see how things evolve on the markets?
That is if you didn't have any investments yet.
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