Terry Smith slams investors as Fundsmith posts 18.5 per cent returns over the past year
Terry Smith’s Fundsmith equity fund celebrated its fifth anniversary yesterday by announcing returns of 18.5 per cent for the full year ending in October, and assets under management of £4.1bn.
This brings cumulative returns since the fund was created to 121 per cent, equivalent to annualised returns of 17.2 per cent, outperforming funds in the Investment Association’s global sector and the MSCI world index.
Smith – who is nominated at this year’s Morning Wire awards – attacked other investors in a statement, saying: “I naively supposed that the experience of the financial crisis might have taught investors a lesson… I am surprised how many investors assume that it is better to be diversified across low-quality investments than to be concentrated in high-quality ones.”
He criticised "the other alphabet soup of structured finance [to] turn sub-prime loans into investable assets," saying, "there’s an old saying about silk purses and sow’s ears which encapsulates this."