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  #21  
Old 23.11.2018, 17:44
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Re: Another fundsmith question

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so did anyone here invest in Smithson? What do you think of its current NAV premium?
I had a look but seemed too complex to buy. I also seemed to already have several of their planned holdings, so didn't see a point in paying them for the privilege.

On the other hand, I started buying the FEET fund.
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  #22  
Old 23.11.2018, 22:22
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Re: Another fundsmith question

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so did anyone here invest in Smithson? What do you think of its current NAV premium?
Yes, I have bought in the market at prices from 1013 to 1039. My weighting is currently 20:80 & I intend to increase possibly substantially over the next 12 months.
I did not realise they had released any NAV info just people like HL guessing the NAV, I suspect it will end up with a 5-15% premium. If it delivers 10% compound better than the S&P 500 index it's worth substantially more than that to a long term investor.
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  #23  
Old 24.11.2018, 19:35
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Re: Another fundsmith question

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so did anyone here invest in Smithson? What do you think of its current NAV premium?
I tried.
[I very much like the Investment Principles behind the Fund]

After some thought & investigation, I filled in a "paper application". Even though I am an existing Fundsmith Investor, the on-line application path seemed available only to UK Residents.Took some time to fill-in, with notary signed documents etc., and I did it early.

Sigh.
"We're unable to process your application as, under the terms and conditions of the offer, we cannot accept applications from investors resident in a restricted jurisdiction. For the purposes of this Offer, Switzerland is considered to be a restricted jurisdiction.

I was notified after the Closing Date (3-4 weeks after application).

On my further investigation I discovered (realised, penny dropped...): [Switzerland] EFTA member and signatory of the EEA agreement that has not been ratified

I live and (hopefully) learn!!

I realise I could always invest directly now after the Offer,
& my limited understanding is that by SSON extending the Offer (by almost 2.5 times to original, rather than limiting the original Investors), the "NAV premium" is going to lower than otherwise. I am very happy to be politely corrected!
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  #24  
Old 24.11.2018, 20:41
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Re: Another fundsmith question

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I tried.
[I very much like the Investment Principles behind the Fund]

After some thought & investigation, I filled in a "paper application". Even though I am an existing Fundsmith Investor, the on-line application path seemed available only to UK Residents.Took some time to fill-in, with notary signed documents etc., and I did it early.

Sigh.
"We're unable to process your application as, under the terms and conditions of the offer, we cannot accept applications from investors resident in a restricted jurisdiction. For the purposes of this Offer, Switzerland is considered to be a restricted jurisdiction.

I was notified after the Closing Date (3-4 weeks after application).

On my further investigation I discovered (realised, penny dropped...): [Switzerland] EFTA member and signatory of the EEA agreement that has not been ratified

I live and (hopefully) learn!!

I realise I could always invest directly now after the Offer,
& my limited understanding is that by SSON extending the Offer (by almost 2.5 times to original, rather than limiting the original Investors), the "NAV premium" is going to lower than otherwise. I am very happy to be politely corrected!
The public offer was only open to UK residents & Jersey residents. Greville Ward from Fundsmith advised me 'The only way, as an overseas resident, is to invest is via a bank or broker who will give the order to Investec UK who are running the institutional offer'. I was unable to as HL would not do this & due diligence takes way too long.

I don't think the premium would have been very different, had the original subscription been smaller, it would have shown less appetite for an Investment Trust.
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  #25  
Old 26.11.2018, 11:28
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Re: Another fundsmith question

Same here. I guess I will now drip-feed into SSON via my IB account.

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I tried.
[I very much like the Investment Principles behind the Fund]

After some thought & investigation, I filled in a "paper application". Even though I am an existing Fundsmith Investor, the on-line application path seemed available only to UK Residents.Took some time to fill-in, with notary signed documents etc., and I did it early.

Sigh.
"We're unable to process your application as, under the terms and conditions of the offer, we cannot accept applications from investors resident in a restricted jurisdiction. For the purposes of this Offer, Switzerland is considered to be a restricted jurisdiction.

I was notified after the Closing Date (3-4 weeks after application).

On my further investigation I discovered (realised, penny dropped...): [Switzerland] EFTA member and signatory of the EEA agreement that has not been ratified

I live and (hopefully) learn!!

I realise I could always invest directly now after the Offer,
& my limited understanding is that by SSON extending the Offer (by almost 2.5 times to original, rather than limiting the original Investors), the "NAV premium" is going to lower than otherwise. I am very happy to be politely corrected!
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  #26  
Old 25.11.2019, 11:24
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Re: Another fundsmith question

FeverTree hit a lower price recently. i'd be interested to see if Smithson bought at that point. Price is still high, but now the price of everything is high anyway.

FeverTree was my biggest holding at one point and then I took profits and sold off half. On the recent dip, I was tempted to buy back in and I double+ the position again.

Last edited by Phil_MCR; 25.11.2019 at 11:58.
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  #27  
Old 25.11.2019, 11:34
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Re: Another fundsmith question

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FeverTree hit a lower price recently. i'd be interested to see if Smithson bought at that point. Price is still high, but now the price of everything is high anyway.

FeverTree was my biggest holding at one point and then I took profits and sold off half. On the recent dip, I was tempted to buy back in to double+ the position again.
It's a holding as it was in the top 5 detractors for October, no idea of any allocation changes however some more shares have been issued so they do have some additional cash to invest

https://smithson.co.uk/fund-factsheet
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  #28  
Old 25.11.2019, 12:01
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Re: Another fundsmith question

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It's a holding as it was in the top 5 detractors for October, no idea of any allocation changes however some more shares have been issued so they do have some additional cash to invest

https://smithson.co.uk/fund-factsheet
Ah. I didn't realise they'd bought. I know it was one in their universe. Now I look I see also they own Abcam too as it was also a detractor.
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  #29  
Old 26.11.2019, 21:19
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Re: Another fundsmith question

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Ah. I didn't realise they'd bought. I know it was one in their universe. Now I look I see also they own Abcam too as it was also a detractor.
FeverTree was added in July as stated in the July report, they did sell their first & only company CDK in September, CDK amounted to 3.6% of the portfolio in July that has been reinvested in existing holdings, back to 29 holdings.
Abcam was 2% of the portfolio in the July report.
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  #30  
Old 09.12.2019, 11:46
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Worst Case scenario for Fundsmith owners

So plenty of us on here are strong advocates for investing in FS myself included. We're in deep & I often take the opportunity to illustrate the gains to my family vs. any other potential investment.

Recently I've been getting some reasonably cautious pushback in the form of "what if" questions.

What if FS goes bust (you get the jist of the pushback), what if Terry Smith dies, what if something happens that no one could have predicted? Black Swan event specific to FS & not the wider market. The questions are coming from a place far removed from an investing mindset but it got me thinking about: What am I not thinking about here? What are the risks of holding FS? What is the worst case scenario as a FS holder?

The exposure to the market is understood & that risk is assumed knowingly but what about FS itself - what are the risks, insurances if any & how to mitigate?

I assume many investors on here have taken a deeper dive into this topic than me & I'd love to hear your thoughts, particularly on unmitigated FS specific risks & their consequences.

Thanks Folks.
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  #31  
Old 09.12.2019, 12:08
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Re: Worst Case scenario for Fundsmith owners

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So plenty of us on here are strong advocates for investing in FS myself included. We're in deep & I often take the opportunity to illustrate the gains to my family vs. any other potential investment.

Recently I've been getting some reasonably cautious pushback in the form of "what if" questions.

What if FS goes bust (you get the jist of the pushback), what if Terry Smith dies, what if something happens that no one could have predicted? Black Swan event specific to FS & not the wider market. The questions are coming from a place far removed from an investing mindset but it got me thinking about: What am I not thinking about here? What are the risks of holding FS? What is the worst case scenario as a FS holder?

The exposure to the market is understood & that risk is assumed knowingly but what about FS itself - what are the risks, insurances if any & how to mitigate?

I assume many investors on here have taken a deeper dive into this topic than me & I'd love to hear your thoughts, particularly on unmitigated FS specific risks & their consequences.

Thanks Folks.
Worst case scenario: Terry Smith turns out to be a Madoff and you lose all your money.

I keep <10% of funds in FS.
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  #32  
Old 09.12.2019, 12:56
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Re: Worst Case scenario for Fundsmith owners

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Worst case scenario: Terry Smith turns out to be a Madoff and you lose all your money.

I keep <10% of funds in FS.
Right, so these are the kind of scenarios I'm trying to imagine & hopefully map to a mitigation & in so doing expose unmitigated risks.

In the Madoff scenario you mentioned, I am assuming that regulators have that one wrapped up tighter than the proverbial duck's...no? still a possibility today for FS specifically?
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  #33  
Old 09.12.2019, 13:02
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Re: Worst Case scenario for Fundsmith owners

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So plenty of us on here are strong advocates for investing in FS myself included. We're in deep & I often take the opportunity to illustrate the gains to my family vs. any other potential investment.

Recently I've been getting some reasonably cautious pushback in the form of "what if" questions.

What if FS goes bust (you get the jist of the pushback), what if Terry Smith dies, what if something happens that no one could have predicted? Black Swan event specific to FS & not the wider market. The questions are coming from a place far removed from an investing mindset but it got me thinking about: What am I not thinking about here? What are the risks of holding FS? What is the worst case scenario as a FS holder?

The exposure to the market is understood & that risk is assumed knowingly but what about FS itself - what are the risks, insurances if any & how to mitigate?

I assume many investors on here have taken a deeper dive into this topic than me & I'd love to hear your thoughts, particularly on unmitigated FS specific risks & their consequences.

Thanks Folks.
Terry Smith has also been thinking to what happens if he dies as he has well in excess of £300,000,000 in the fund. Julian Roberts head of research is responsible for the fund when Terry is not available such as on a plane. They have worked together for over 30 years. Should both Terry & Julian die at the same time, then Danial Washburn who has worked at FS since inception would be in charge. Daniel is now a partner in the management company so will not be looking for a job elsewhere.

Fundsmith management company has income exceeding £200,000,000 a years in fees, they are not paying that in salaries so won't go bankrupt.

Average share held in the portfolio has a market cap of £117 billion & 59% of the portfolio (about £11 billion) could be liquidated within 7 days so investors wanting their money back won't be an issue.

The partners have a lot of Skin in the game, more than 50 - 100 times that of Lindsay Train. Quite why both L & T have only got a few million in the fund each beats me, their fees from the 8 billion fund are huge.
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  #34  
Old 09.12.2019, 13:34
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Re: Another fundsmith question

succession planning seems to be in hand - thanks FMF. I hope they don't travel together.

What if one of their partners or associates decides to / tries to go rogue? The answer machine in my head says that there are robust interlocks in place to flag & stop that through governance however let's say it happened & say 30% of the FS holdings vaporized overnight do we have insurance against that? Is that even a risk for investors or is that risk borne by the management company?

Not personally held insurance but by virtue of being FS holders?
Think 100k deposit insurance scheme across Europe.
It may seem obvious to you FMF or Phil but these are questions I had not previously posed or answered to myself & am feeling a little exposed now.

Not comparing apples to apples here or positing that what happened to Woodbridge could technically happen to FS but - all his investors assumed they were as safe as houses, right?

Last edited by Horatio Gonzales; 09.12.2019 at 13:44. Reason: "Is that even a risk for investors or is that risk borne by the management company?"
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  #35  
Old 09.12.2019, 14:51
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Re: Worst Case scenario for Fundsmith owners

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Worst case scenario: Terry Smith turns out to be a Madoff and you lose all your money.

I keep <10% of funds in FS.
Unlikely, as they have proper auditing procedures in place.
Terry Smith did talk about that in one of the last shareholder meetings.
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  #36  
Old 09.12.2019, 14:53
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Re: Worst Case scenario for Fundsmith owners

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Terry Smith has also been thinking to what happens if he dies as he has well in excess of £300,000,000 in the fund. Julian Roberts head of research is responsible for the fund when Terry is not available such as on a plane.
Given that their strategy is "buy high quality companies and then do nothing", he shouldn't be too busy
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  #37  
Old 09.12.2019, 14:54
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Re: Another fundsmith question

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succession planning seems to be in hand - thanks FMF. I hope they don't travel together.

What if one of their partners or associates decides to / tries to go rogue? The answer machine in my head says that there are robust interlocks in place to flag & stop that through governance however let's say it happened & say 30% of the FS holdings vaporized overnight do we have insurance against that? Is that even a risk for investors or is that risk borne by the management company?

Not personally held insurance but by virtue of being FS holders?
Think 100k deposit insurance scheme across Europe.
It may seem obvious to you FMF or Phil but these are questions I had not previously posed or answered to myself & am feeling a little exposed now.

Not comparing apples to apples here or positing that what happened to Woodbridge could technically happen to FS but - all his investors assumed they were as safe as houses, right?

That can't happen, at least if you buy via the Luxembourg entity, as you deal with State Street bank.

Either way, IMHO those are questions you should ask before investing

Last edited by Dr Mick; 09.12.2019 at 14:55. Reason: added comment
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  #38  
Old 09.12.2019, 15:07
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Re: Another fundsmith question

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That can't happen, at least if you buy via the Luxembourg entity, as you deal with State Street bank.

Either way, IMHO those are questions you should ask before investing
State Street holds the assets of the main fund, their compliance would be on the case if a withdrawal of several billion was sanctioned
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Given that their strategy is "buy high quality companies and then do nothing", he shouldn't be too busy
The do receive about £5 million a day & the largest single redemption was £50 million. Transactions may have to be done when Terry is unavailable as they have to settle cash on the agreed date, no wiggle room at all.
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  #39  
Old 05.02.2020, 20:46
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Re: Another fundsmith question

Sorry for the tangent but this seems to be the most recent FS thread...

I have a (by most people's standards) very small amount in FS T class Acc, and now have the opportunity to put my (by anyone's standards) v small UK pension pot into FS T class or I class via an AJ Bell SIPP. Obviously privately I've only ever looked at Tclass as > 5m is a lottery win that hasn't yet happened.
Is there an advantage to I class over T class? (I assume they pool their assets under management to be able to offer I class?)
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Old 05.02.2020, 20:52
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Re: Another fundsmith question

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Sorry for the tangent but this seems to be the most recent FS thread...

I have a (by most people's standards) very small amount in FS T class Acc, and now have the opportunity to put my (by anyone's standards) v small UK pension pot into FS T class or I class via an AJ Bell SIPP. Obviously privately I've only ever looked at Tclass as > 5m is a lottery win that hasn't yet happened.
Is there an advantage to I class over T class? (I assume they pool their assets under management to be able to offer I class?)
I class are slightly cheaper however you will pay AJ Bell an annual fee, so you will be worse off than a direct investment in T Class although you can do that with a SIPP. (You could take 25% tax free lump sum & put that in the T class direct) Not sure how CH see that for tax purposes.
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