Fundsmith’s 2018 Annual Letter

Fundsmith is a London-based investment manager, that was launched nine years ago by Terry Smith, an investor manager who has been often regarded as “the English Warren Buffet”.  He graduated in History from the University college Cardiff and also earned an MBA from The Management College, Henley. The beginnings of his investment career were at Barclays Bank. Fundsmith manages around £18 billion as of the end of 2018. Its investment philosophy is centered around the idea that thorough research process is of the utmost importance. Recently, the fund released its 2018 Annual Letter, a copy of which you can download below.

“January 2019

Dear Fellow Investor,This is the ninth annual letter to owners of the Fundsmith Equity Fund (‘Fund’). The table below shows performance figures for the last calendar year and the cumulative and annualised performance since inception on 1st November 2010 compared with various benchmarks.

% Total Return 1st Jan to

31st Dec 2018

Inception to 31st Dec 2018 Cumulative                          Annualised
Fundsmith Equity Fund1 +2.2 +269.6 +17.4
Equities2 -3.0 +128.4 +10.6
UK Bonds3 +1.2 +35.7 +3.8
Cash4 +0.7 +5.1 +0.6

1 T Class Acc shares, net of fees, priced at noon UK time.      4 3 Month £ LIBOR Interest Rate.

2MSCIWorld Index, £ net, priced at US market close.            Source: Bloomberg.

3 Bloomberg/Barclays Bond Indices UK Gov. 5–10 yr.

The table shows the performance of the T Class Accumulation shares, the most commonly held Class and one in which I am invested, which rose by +2.2% in 2018and compares with a fall of-3.0% for the MSCI World Index in sterling with dividends reinvested. The Fund therefore beat this benchmark in 2018, and our Fund remains the No.1 performer since its inception in the Investment Association Global sector by a cumulative margin of 13 percentage points over the second best fund and 188percentage points above the average for the sector which has delivered +81.9% over the same timeframe.”

You can download a copy of Fundsmith’s 2018 Annual Letter here:


You can also see the list of our 2019 Q1 investor letters and download them on this page.