The new fund will be managed by Will Morgan and
Simon Barnard from Goldman Sachs and overseen by Smith who will provide 'guidance
and support' and have an input into investment decisions.
The launch attracted a record £822 million from
investors which exceeds the previous record of £800m for the launch of Neil
Woodford's Patient Capital in April 2015. Fundsmith have covered the initial
costs of the new launch which is a bonus for investors.
The trust will focus on global smaller and mid cap
companies - between £500m and £15bn and is expected to focus on the US, Europe
and Japan/Far East but will avoid emerging markets as this is already covered
with Smith's Emerging markets fund. The areas of interest are likely to be
technology, healthcare, industrials and consumer staples - Smith tries to avoid
sectors such as banks, airlines, real estate, construction and commodities.
I understand that around 80 companies will have
been vetted prior to the launch and from this they will select 30 to 40 for the
portfolio. The style will be long term 'buy-and-hold' which has worked very
well for Fundsmith.
I have purchased this at the launch price of
£10.00 in my ISA with AJ Bell and received the full allocation. The purchase
was funded from a sale of my City Merchants High Yield fund. The trust is off
to a good start and the share price is up 3.0% since the start of trading last Friday. The
shares should be admitted to the FTSE 250 index at the next reshuffle which should
support the price as it will be picked up by trackers.
One to tuck away for the longer term.
As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!
Good luck with these - on my watch list for the future!
ReplyDeleteThanks weenie. The markets seem to be in a volatile phase so you may well find an opportunity below the issue price at some point.
DeleteI looked into Smithson, but decided not to invest becuase all ‘smaller companies’ investment trusts stand at big discounts now and historically. So why pay £1 at launch when I can pay 85p for it in a year? But true to form the Smith effect has worked and it’s on a 5% premium!
ReplyDeleteGood luck with this one.
Currently the shares are showing at a premium but I am not sure how they can assess the net assets figure until the flotation cash is converted to the purchase of shares. I imagine they will not hang around with the initial acquisitions and hopefully, with the recent market sell-off, will pick them up at a more reasonable price (compared to last month). Then again there may be even more bargains later in the year!
Delete