Terry Smith defends weakest returns since inception for Fundsmith Equity

Annual letter to investors

Terry Smith, manager of the £16.4bn Fundsmith Equity fund, has highlighted strong long-term performance and low transaction costs against his rivals, in a bid to defend the weakest returns since inception the fund saw last year.

In his annual letter to shareholders, released every January, Smith acknowledged the fund had returned 2.2% over 2018, which was the "weakest [performance] in absolute terms since inception". However, he highlighted the fund still outperformed its MSCI World benchmark, which was down 3% over the year, and that it remained the top performer in the Investment Association (IA) Global sector. The manager went on to explain that Fundsmith was in the small minority of products in the IA that produced any positive return at all last year. He said: "There are 2,592 mutual funds in the IA univ...