Fundsmith portfolio manager Terry Smith is often called ‘Britain’s Warren Buffett’ and it’s not hard to see why. Since Smith launched his fund back in 2010, he’s turned £10,000 of investor money into more than £60,000.
Here I’m going to examine Smith’s current portfolio and discuss where he’s investing in 2022. Let’s take a look at where this top money manager is putting capital to work right now.
Where ‘Britain’s Warren Buffett’ is invested in 2022
Fundsmith’s latest factsheet reveals Smith is currently invested in three main areas:
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Technology and Communication Services
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Healthcare
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Consumer Staples and Consumer Discretionary
Combined, these areas of the market represented about 98% of the Fundsmith portfolio at the end of January.
Let’s now look at some of the stocks he has invested in within these sectors.
Technology and Communication Services
Within Technology and Communication Services, two of Smith’s largest holdings are BigTech companies Microsoft and Meta Platforms (Facebook). At the end of January, these two were in his top 10 holdings. But these aren’t the only BigTech stocks Smith owns. Last year, he bought Amazon and he’s just bought Alphabet (Google) for his portfolio. Clearly, Smith is bullish on BigTech.
Smith has exposure to other areas of technology though. He also has exposure to the FinTech market through PayPal and Visa, as well as the software industry through smaller tech companies such as Intuit.
Healthcare
In the healthcare space, Smith has exposure to a diverse mix of companies. One of his largest holdings here is Novo Nordisk, which specialises in diabetes products. Another large holding is Idexx Laboratories, which specialises in pet healthcare. Both of these stocks were also in his top 10 holdings at the end of January.
Other healthcare holdings include Stryker, which makes medical equipment, Coloplast, which specialises in continence care and wound care, and Johnson & Johnson, which is a diversified healthcare company.
Consumer goods
Within the consumer goods space, Smith appears to have taken a ‘barbell’ approach. On one hand, he owns companies that make everyday essentials such as Unilever, McCormick, and Church & Dwight, makers food and cleaning products. On the other hand, he owns a number of companies that make premium/luxury products such as Diageo, LVMH, L’Oréal, and Estée Lauder.
My take on Smith’s holdings
As a Fundsmith investor, I like this mix of investments. I like the fact that Smith has plenty of exposure to the tech sector, given where the world is heading.
I also like the fact that Smith has plenty of exposure to healthcare. With the global population ageing, demand here is likely to rise in the years ahead. Healthcare is also quite defensive.
Finally, I like the barbell approach to the consumer goods space. Companies like Unilever and Church & Dwight tend to be recession-proof, due to the fact they make everyday essentials. Meanwhile, companies like LVMH and Estée Lauder appear well-placed to benefit from rising wealth across the world.
Overall, I think Smith has a nice mix of investments for 2022. So I’m very comfortable holding the Fundsmith Equity fund in my portfolio right now.
