Terry Smith: Why I am not investing in the 'terrible' banks

Fundsmith founder Terry Smith, who was once rated the City's top bank analyst, says there is "not a chance" he would invest in the highly problematic banking sector.

As the top banking analyst in the late 1980s, Smith famously issued a 'sell' recommendation on Barclays while working for BZW, Barclays' own investment bank. Just weeks after launching his £37m Fundsmith Equity fund, a high conviction portfolio of currently 22 names, the Tullett Prebon CEO says he is completely avoiding the banking sector. "I would not invest in most financials. Most financials need leverage to perform," Smith says. "I worked in a bank for nine years and I was the number one banking analyst for seven years and I have seen banks in action. What has happened to the b...