Terry Smith - Investment Philosophy
The investment philosophy and approach of Terry Smith.
fundsmithactive-investingquality-investinguk-fund-managerphilosophyinvesting
Terry Smith - Investment Philosophy
Three Principles
- Only invest in good companies — Quality over everything
- Try not to overpay — Valuation matters, even for great businesses
- Do nothing — Extremely low turnover (3.2% in 2024, costing just £447,000)
Quality Metrics of the Fundsmith Portfolio
| Metric | Fundsmith | S&P 500 Index |
|---|---|---|
| Return on Capital Employed | 32% | ~16% |
| Gross Margin | 64% | ~40% |
| Operating Profit Margin | 30% | ~15% |
| Interest Cover |
Summary
Founder and Chief Investment Officer of Fundsmith, Britain's largest equity fund, known as the "British Buffett" for his quality-focused investment approach
Learn more at Terry Smith