Philip Morris (PM) is Benefiting from Its Reduced-Risk Products

Fundsmith, an investment management firm based in London, has released its annual 2025 investor letter for its “Fundsmith Equity Fund.” A copy of the letter can be downloaded here. The fund focuses on investing in equities globally. The T Class Accumulation shares where the firm invested returned 0.8% in 2025, compared to 12.8% for the MSCI World Index (‘Index’) in sterling with dividends reinvested. Since its inception, the fund has returned 1.7% p.a. more than the index. The fund attributed its underperformance during 2025 to index concentration, the growth of assets in Index Funds, and weakness in the dollar. In addition, please check the fund’s top five holdings to know its best picks in 2025.

 In its fourth-quarter 2025 investor letter, Fundsmith Equity Fund highlighted stocks such as Philip Morris International Inc. (NYSE:PM). Philip Morris International Inc. (NYSE:PM) is a tobacco company that offers cigarettes and smoke-free products. The one-month return of Philip Morris International Inc. (NYSE:PM) was 2.65%, and its shares gained 38.33% of their value over the last 52 weeks. On January 9, 2026, Philip Morris International Inc. (NYSE:PM) stock closed at $162.61 per share, with a market capitalization of $253.125 billion.

Fundsmith Equity Fund stated the following regarding Philip Morris International Inc. (NYSE:PM) in its fourth quarter 2025 investor letter:

“Philip Morris International Inc. (NYSE:PM) makes its fifth appearance as it continues to show the benefits of its industry leading move into reduced-risk products (‘RRPs’) such as ‘heat-not-burn’ tobacco products and its nicotine pouch business.”

How Philip Morris International (PM) Fits into a Short-Term Dividend Capture Strategy

Philip Morris International Inc. (NYSE:PM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 90 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the third quarter, compared to 111 in the previous quarter. While we acknowledge the risk and potential of Philip Morris International Inc. (NYSE:PM) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Philip Morris International Inc. (NYSE:PM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Philip Morris International Inc. (NYSE:PM) and shared Artisan Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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