Terry Smith has initiated a stake in US consumer products giant Church & Dwight in his Fundsmith Equity vehicle, while ditching shares in product tester Intertek.
According to the £22.6bn fund’s latest factsheet, Smith added a 2.27% position to the business, which owns brands including Trojan condoms and Oxi clean, last month.
Church & Dwight’s shares suffered at the outbreak of the pandemic, falling to $60.30 a share in March 2020, before recovering to a record high for the company $98.16 in September. But in recent months its shares have lost some of their shine, falling over 8% since the start of the year to $79.56 a pop.
To fund his latest purchase Smith sold out of UK-listed Intertek, a longstanding holding in Fundsmith Equity. Intertek’s revenue fell from £2.9m in 2019 to £2.7m in 2020, according to the company’s full year results.
The decision to sell Intertek comes less than three months after Smith gave the heave-ho to another long-time holding Reckitt Benckiser which had been in the portfolio since launch in 2010.
Smith, who has built a stellar career off his “buy good companies, don’t overpay and do nothing” approach, has made an uncharacteristic number of chops and changes to his flagship fund over the past year.
Taking advantage of falling share prices off the back of the coronavirus he scooped up positions in Nike and Starbucks in March and he finished out 2020 by tapping into French luxury goods giant LVMH.
Fundsmith Equity’s top performers in February were Estée Lauder, Paypal, IDEXX, Amadeus and Intercontinental Hotels, according to its latest factsheet. The biggest detractors were Microsoft, McCormick, Pepsico, Facebook and Unilever.
The fund has returned 124% over the last five years compared to the IA Global average of 91.6%. But over the last year its giant lead over peers has slipped, with the fund returning 21.8%, below the sector average of 23.4%.
