View more on these topics

Former Collins Stewart boss Terry Smith launches low cost equity fund

Former Collins Stewart boss Terry Smith has launched a new asset management company that he says will offer low-cost and high conviction offerings to the market.

Fundsmith launches its first equity fund today with Smith himself investing £25m of his own assets in the fund. The equity fund, which Smith will manage, has a 1 per cent AMC if brought direct and a similar TER as costs will be kept low. The fund will hold a concentrated portfolio of 20-30 stocks which will be held for the long term.

Fundsmith has no performance or initial fees. Minimum investment is set at £1,000 for the retail share class.

Smith has slammed the fund management industry, claiming that the model is broken.

He says: “The vast majority of fund investors suffer from punitive fee structures, overtrading, fund proliferation, closet indexing, and over-diversification. The net result is poor performance.

“We will not market time, hedge, trade, short, invest in sectors we don’t understand or panic when markets fall. We will only invest in companies that have attractive valuations, high barriers to entry and are extremely resilient.  We like companies with a business advantage that is hard to replicate and which are resilient to change, particularly to technological change.”

Smith has worked in financial services for the past 36 years. He joined Collins Stewart in 2000 and subsequently bought control of it and floated the firm in 2004. He is currently chief executive of Tullett Prebon.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com