Here’s Why Fundsmith Sold Clorox (CLX)

Fundsmith LLP, an investment management firm, published its ‘Fundsmith Equity Fund’ year-end 2020 investor letter – a copy of which can be downloaded here. A return of 18.3% was recorded by the fund in the fourth quarter of 2020, outperforming its MSCI World benchmark that delivered a 12.3% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.op 5 holdings to have a peek at their top bets for 2021.

Fundsmith LLP, in their Q4 2020 investor letter, mentioned The Clorox Company (NYSE: CLX) and emphasized their views on the company. Clorox is a California-based consumer and professional cleaning products manufacturer that currently has a $23.6 billion market capitalization. Since the beginning of the year, CLX delivered a -6.95% return, extending its 12-month gains to 18.39%. As of March 10, 2021, the stock closed at $189.28 per share.

Here is what Fundsmith LLP has to say about The Clorox Company in their Q4 2020 investor letter:

“We sold our stakes in Clorox– during the year. Clorox traded strongly due to the rush to purchase increased quantities of household cleaning products, personal cleaning products. We felt that the ratings achieved did not reflect the pedestrian nature of these businesses in more normal circumstances or the issues they face which may come back into focus if or when the COVID related boost fades.”

Dima Sidelnikov/

Our calculations show that The Clorox Company (NYSE: CLX) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, The Clorox Company was in 39 hedge fund portfolios. CLX delivered a -6.25% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.