Here’s how Fundsmith Equity and Scottish Mortgage shares performed in the first half of 2024

Edward Sheldon owns shares in Scottish Mortgage Investment Trust and units in Fundsmith Equity. Did these products deliver gains in the first half of the year?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young Caucasian man making doubtful face at camera

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Within the fund part of my investment portfolio, I have a decent-sized holding in Fundsmith Equity. I also own a few shares in Scottish Mortgage Investment Trust (LSE: SMT).

So, how did these two products perform for me in the first half of 2024 as global stock markets rallied? Let’s take a look.

Scottish Mortgage shares are rising

I don’t have the official performance data for Scottish Mortgage yet as its investment manager Baillie Gifford is always a little slow to release the monthly factsheet for the investment trust.

Should you invest £1,000 in Mony Group Plc right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Mony Group Plc made the list?

See the 6 stocks

But I can work out its H1 return myself. At the end of June, the trust’s share price was 884.2p versus 808p at the start of the year. That equates to a gain of 9.4%. Note that I’m also entitled to a dividend of 2.64p per share, which I’ll receive on 11 July. That bumps the return up to about 9.8% if I include that.

Created with Highcharts 11.4.3Scottish Mortgage Investment Trust Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

That’s a pretty good return in six months. I’m happy with it.

That said, plenty of other growth-focused funds delivered higher returns. For example, the Blue Whale Growth fund (which I also have a position in) returned 20.4% for the half year. That’s more than twice the return from Scottish Mortgage.

One issue with this investment trust is that it owns a lot of disruptive growth companies that don’t have any profits. These kinds of companies can underperform when interest rates are high.

I’m still bullish on the trust. But for it to really outperform, we need to see interest rates come down meaningfully (I’m expecting some rate cuts in the second half of 2024).

A solid performance from Fundsmith

As for Fundsmith Equity, its latest factsheet shows that it delivered a return of 9.3% in H1.

Again, I’m happy with that performance.

But it should be noted that this was below the return of the MSCI World Index, which posted a gain of 12.7% for the period. In other words, Fundsmith lagged a common benchmark for global equity funds.

Source: Fundsmith

It’s not hard to work out why this fund underperformed the MSCI World Index in H1. Ultimately, it has far less exposure to high-flying Big Tech stocks than the index (it doesn’t have any exposure to Nvidia).

Created with Highcharts 11.4.3Nvidia PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

In the first half of the year, these stocks delivered the bulk of the market’s gains (just like they did in 2023). So, any fund manager lacking exposure to them most likely lagged the market.

Despite its recent underperformance, I’ll be holding on to Fundsmith. With its focus on high-quality stocks, I see it as a hedge. If the tech sector was to experience a meltdown, I’d expect the fund to outperform.

There’s no guarantee it will though. This is a concentrated fund that holds less than 30 stocks. If portfolio manager Terry Smith gets his share picks wrong, it could keep underperforming.

So, I will continue to buy other top stocks and funds to diversify my investment portfolio.

Should you buy Mony Group Plc now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ed Sheldon has positions in Nvidia, Scottish Mortgage Investment Trust Plc, Blue Whale Growth fund, and Fundsmith Equity. The Motley Fool UK has recommended Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our best passive income stock ideas

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

Stack of British pound coins falling on list of share prices
Investing Articles

Why hasn’t its 9.9% yield boosted the Phoenix share price?

Phoenix Group has a dividend close to double digits, but saw a weak share price performance in recent years. Christopher…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

With average 10% yields, these mid-cap FTSE shares could supercharge a passive income portfolio

Some of the best passive income gems can be found on the UK's smaller indexes like the FTSE 250 and…

Read more »

A coin being dropped into a piggy bank
Investing Articles

As the Barclays share price tanks 19% in 2 days, is this a great buying opportunity?

As a trade war sends the Barclays share price into a tailspin, Andrew Mackie steps back to look at the…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Is Fundsmith Equity still a good choice for a Stocks and Shares ISA in 2025?

Many Britons hold the Fundsmith Equity fund in their Stocks and Shares ISAs. Is this still a good move? Edward…

Read more »

Investing Articles

Nvidia stock is down 24% this year. Time to buy the dip?

Christopher Ruane has been eyeing Nvidia stock as a potential addition to his portfolio for a while. Is a recent…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Down 25% since January, this resilient dividend stock’s catching my eye

Maintaining the UK’s rail, water, and energy infrastructure isn’t the most exciting business. But it has made this a solid…

Read more »

Investing Articles

Prediction: Unilever to outperform the FTSE 100 over the next 12 months

The FTSE 100 has made a strong start to 2025, but Stephen Wright thinks a popular dividend stock could be…

Read more »

Investing Articles

I just bought this legendary S&P 500 tech stock for my ISA, 27% off its highs

This S&P 500 stock has tanked over the last month and Edward Sheldon has snapped it up for his portfolio…

Read more »