Investec: Underperforming Fundsmith shares 'offer significant contrarian value'

Broker slaps 'buy' recommendation on emerging market trust

A "dull" start to life for the Fundsmith Emerging Equities Trust (FEET) has left its shares offering “significant contrarian value, with a strong fundamental investment case enhanced by the current discount”, according to analysts at Investec Securities.

FEET launched in 2014, as the first investment company offered from Terry Smith's Fundsmith investment management firm to much fanfare, reaching a 12% premium rating within three months of IPO. However, returns in the trust's first six years have been "dull", Investec's Alan Brierley noted in a recent initiation note. FEET has returned 11.5% in that time, just shy of its wider AIC Global Emerging Market sector peers' 14% gain, and well short of its MSCI Emerging Markets benchmark index's 58.3%, according to data from FE fundinfo. Terry Smith: Neil Woodford was 'playing a different gam...