- Terry Smith talks about his flagship fund and its returns versus the broader market
- Novo Nordisk, big tech and the fund's sell process are all under discussion
It has been a good year for global stockpickers – in some senses, at least. The average fund in the Investment Association's Global sector has made a 12.4 per cent return for 2024 as of 8 November, building on strong gains from 2023. But active funds have nonetheless struggled to keep up with the runaway returns of the MSCI World index, led as it has been by meteoric artificial intelligence (AI)-related gains. The MSCI World index has made nearly 20 per cent this year in sterling terms, a feat few active managers have been able to match.
Terry Smith, manager of the £23bn Fundsmith Equity fund (GB00B41YBW71), and possibly the best-known stockpicker in the UK, is familiar with this issue, having seen his portfolio perform well in recent years but lag the market more recently. As we've previously discussed ('Is Fundsmith still a best buy?', IC 19 April 2024), the fund has in recent years increased its allocation to what many would dub US big tech, with allocations to a cohort including Microsoft (US:MSFT), Meta (US:META), Alphabet (US:GOOG), Apple (US:AAPL) and, for a time, Amazon (US:AMZN) rising from 4.8 per cent at the end of 2012, when Microsoft was the sole position, to 18.4 per cent by late 2023.