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Views on alternatives to Fundsmith and LT global funds?
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Ramondo
Posted: 03 March 2025 06:56:59(UTC)
#1

Joined: 20/10/2018(UTC)
Posts: 700
The performance of Fundsmith and LT global has been sub par for a few years now, I believe over £5bn has been withdrawn over the last two years.
These two funds are my largest by far in global equities, I hold Rathbone Global Opps and R/London global equity but in quite small amounts compared to F/smith and LT.

I'm aware that active managers can have troughs of under performance, but would welcome views on alternative global equity funds.
I have carried out research on a few alternatives but would welcome members views in case of any that I have missed.
Thanks
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smg8
Posted: 03 March 2025 08:03:12(UTC)
#2

Joined: 26/04/2020(UTC)
Posts: 3,365

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Fundsmith and Lindsell Train Global Equity are both in principal factor bets on the quality factor.

If quality underperforms, they likely will underperform - the managers say so themselves.

The tricky thing is quality has done well last few years, and both funds have underperformed relative to the quality factor index by a significant margin. Which makes it appear the stock picking has been the issue.

To replace them you'd need to revisit why you bought them.

Did you buy them to simply bet on a factor? If so what factor do you want to bet on now?
Did you buy them because you believe in the managers? If so do you no longer believe in them?
Did you buy them to be defensive? If so is that investment thesis still in tact or not?
Did you buy them because they are what had done best over the 5 years prior to you buying them? If so then you can just look at what has done best over the last 5 years and buy that

Etc etc

I don't think there's a straightforward simple answer to the question. There are 600+ options to choose from and without knowing your thinking it would be hard for someone to identify the best 2 for your circumstances.

The context of the holdings in your portfolio as a whole is also a consideration. I think you've started a couple of threads recently where you have wanted to sell some recent under performers - perhaps a revisit of the overall portfolio, objectives, etc is on order?
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5 users thanked smg8 for this post.
Ramondo on 03/03/2025(UTC), Sheerman on 03/03/2025(UTC), Steve DW on 03/03/2025(UTC), Guest on 03/03/2025(UTC), Dan L on 03/03/2025(UTC)
Micawber
Posted: 03 March 2025 08:21:15(UTC)
#4

Joined: 27/01/2013(UTC)
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Compare Fundsmith with VWRL (Income).

Another alternative for a semiactive strategy is TDGB.

We are long time holders of VWRL, and lately have added TDGB while reducing in USDV and EUDV (not that they are at all poor, but we've been focusing more on yield in our mature ISAs)

Except for two of the offspring's ISAs we sold out of Fundsmith about two years ago. One factor was Smith's dogmatic position against holding tech. Another was Smith's age, the offshoring to Mauritius, and the prospect of his strategy becoming clapped out as well as losing its talisman as and when he quits, loses interest or pegs out.
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3 users thanked Micawber for this post.
Ramondo on 03/03/2025(UTC), Steve DW on 03/03/2025(UTC), Guest on 03/03/2025(UTC)
Hilda Ogden
Posted: 03 March 2025 08:33:45(UTC)
#6

Joined: 31/07/2023(UTC)
Posts: 883

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Was thanked: 1735 time(s) in 629 post(s)
I see no case for holding either of those funds. Compare them against LGGG over all periods in the last five years.
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2 users thanked Hilda Ogden for this post.
Ramondo on 03/03/2025(UTC), Guest on 03/03/2025(UTC)
Ramondo
Posted: 03 March 2025 10:00:44(UTC)
#3

Joined: 20/10/2018(UTC)
Posts: 700
smg8;336306 wrote:
Fundsmith and Lindsell Train Global Equity are both in principal factor bets on the quality factor.

If quality underperforms, they likely will underperform - the managers say so themselves.

The tricky thing is quality has done well last few years, and both funds have underperformed relative to the quality factor index by a significant margin. Which makes it appear the stock picking has been the issue.

To replace them you'd need to revisit why you bought them.

Did you buy them to simply bet on a factor? If so what factor do you want to bet on now?
Did you buy them because you believe in the managers? If so do you no longer believe in them?
Did you buy them to be defensive? If so is that investment thesis still in tact or not?
Did you buy them because they are what had done best over the 5 years prior to you buying them? If so then you can just look at what has done best over the last 5 years and buy that

Etc etc

I don't think there's a straightforward simple answer to the question. There are 600+ options to choose from and without knowing your thinking it would be hard for someone to identify the best 2 for your circumstances.

The context of the holdings in your portfolio as a whole is also a consideration. I think you've started a couple of threads recently where you have wanted to sell some recent under performers - perhaps a revisit of the overall portfolio, objectives, etc is on order?


Thank you for todays answer from you, very interesting remarks as always.

I have held both of these funds for many many years, but I'm currently trying to re-jig my portfolios for my advancing age and future IHT demands.
The recent threads regarding performance were on the same basis, how do I expect the holdings future performance to be, how do they fit into my aims and objectives.
A few holdings I've disposed of recently and a few added.
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Ramondo
Posted: 03 March 2025 10:04:10(UTC)
#5

Joined: 20/10/2018(UTC)
Posts: 700
Micawber;336309 wrote:
Compare Fundsmith with VWRL (Income).

Another alternative for a semiactive strategy is TDGB.

We are long time holders of VWRL, and lately have added TDGB while reducing in USDV and EUDV (not that they are at all poor, but we've been focusing more on yield in our mature ISAs)

Except for two of the offspring's ISAs we sold out of Fundsmith about two years ago. One factor was Smith's dogmatic position against holding tech. Another was Smith's age, the offshoring to Mauritius, and the prospect of his strategy becoming clapped out as well as losing its talisman as and when he quits, loses interest or pegs out.



I too hold VWRL, satisfied with it.
Yes, agree, both Fundsmith and LT depend so much on their managers future length of tenure and their ideology.
It's a aspect of course with any active fund manager.
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Ramondo
Posted: 03 March 2025 10:05:20(UTC)
#8

Joined: 20/10/2018(UTC)
Posts: 700
Hilda Ogden;336311 wrote:
I see no case for holding either of those funds. Compare them against LGGG over all periods in the last five years.


I'll certainly do that!
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Ramondo
Posted: 03 March 2025 10:08:16(UTC)
#7

Joined: 20/10/2018(UTC)
Posts: 700
Hilda Ogden;336311 wrote:
I see no case for holding either of those funds. Compare them against LGGG over all periods in the last five years.


I'll certainly do that!
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1 user thanked Ramondo for this post.
Steve DW on 03/03/2025(UTC)
Jamie CSA
Posted: 03 March 2025 10:59:57(UTC)
#9

Joined: 05/07/2023(UTC)
Posts: 3

Thanks: 4 times
Was thanked: 8 time(s) in 2 post(s)
I hold WisdomTree Global Quality Dividend Growth (GGRA/GGRG) - a quality factor ETF.

This is a core holding for me and is of course much cheaper than the funds you mention.

There was a good article posted on Stockopedia a few years ago which mentioned the above fund as one to consider on a 'Just Keep Buying' basis (excellent investing book by Nick Maggiulli).

The conclusion of the article was that quality factor ETF's such as the above are good ways to improve your risk/return ratio on investing in a world stock market index fund/ETF. 'Quality and Minimum Volatility Factor Indices have beaten the benchmark MSCI World since 1990, with less risk.'
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6 users thanked Jamie CSA for this post.
Steve DW on 03/03/2025(UTC), NPH on 03/03/2025(UTC), Ramondo on 03/03/2025(UTC), Guest on 03/03/2025(UTC), Martina on 03/03/2025(UTC), Jay P on 03/03/2025(UTC)
Steve DW
Posted: 03 March 2025 11:24:00(UTC)
#12

Joined: 31/05/2020(UTC)
Posts: 34
I'm in the exact position as you and thinking the same.
I had a large position in LT Global, LT UK Equity and sold out 2 years ago and have had no regrets since.
I reinvested into VWRL and VMID (in the hope mid caps in the UK have a resurgence)
My largest position now is Fundsmith, so what to do, i have done what i guess we all do when we have held a fund 10-20 years, we hope for the good times to return but with the continuous underperformance ( and of course charges ) i am seriously considering to deploy elsewhere.
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