The latest factsheet from Terry Smith’s (pictured) £350m Fundsmith Emerging Equities Trust revealed it has exited positions in two Egyptian companies just weeks after announcing that Feet will be liquidated.
Per the September update, it has been confirmed that shares in the trust will remain tradeable on the London Stock Exchange until a liquidator is appointed. No details were provided about how long that might take.
At the time of the liquidation announcement, a move which received plaudits from the industry, Smith said: “Whilst Feet has made a positive return since launch in 2014 it has fallen below our expectations and, unlike other fund managers who might seek to hold onto the fund for the sake of the fee income, we feel it would be in the best interests of shareholders to receive their investment back in cash through a liquidation of the portfolio and wind-up of the company.”
Despite Smith citing the trust’s underperformance, Feet still bettered more than 100 IA funds in the emerging market sector across a three-year period. Over three and five years, Feet is solidly first quartile, according to FE Analytics.
But it hasn’t been an easy year for any equity investor, and the trust’s net asset value was down 8.1% in the nine months to the end of September, while its share price returned -1.8% over the same timeframe.
| Sep 2022 |
2022 to 30.09.22 |
2021 | 2020 | 2019 | 2018 | 2017 | |
| Feet NAV | -2.2 | -8.1 | +3.8 | +20.7 | -0.5 | -3.0 | +21.2 |
| Feet Share Price | +10.3 | -1.8 | -3.4 | +29.1 | -7.4 | -9.4 | +24.5 |
| Equities | -7.9 | -11.6 | -1.4 | +14.4 | +13.9 | -9.3 | +25.3 |
| UK Bonds | -8.9 | -18.8 | -4.5 | +4.6 | +3.8 | +1.2 | +1.4 |
| Cash | +0.1 | +0.7 | +0.1 | +0.3 | +0.8 | +0.7 | +0.4 |
Source: Feet factsheet
In what has generally been a difficult month for the emerging markets sector, the firm exited its positions in Eastern Tobacco and Integrated Diagnostics over concerns about the potential devaluation of the Egyptian pound.
Feet’s tech holdings performed poorly, with three of the fund’s top five detractors being technology companies NetEase, TSMC, and Info Edge. The sector only made up 13.1% of the fund’s holdings.
Four of the five best performers were consumer staples companies, a sector that constituted 42.7% of the fund up to 30 September. Among the top five were Wal-Mart de Mexico and Foshan Haitian, a food and flavouring company based in China.
Feet now holds positions in 34 individual companies, with a nearly 50% weighting to India.
