Fundsmith Equity assets have fallen to £12.1 billion from nearly £29 billion at their December 2021 peak, according to Morningstar.
The Telegraph reported that the decline came as Terry Smith’s flagship fund lagged the MSCI World benchmark and suffered investor outflows. Fundsmith had previously ranked as Britain’s largest fund from 2019.
Fundsmith Equity lost 13.7% in 2022, while the MSCI World fell 7.8%. Last year, the fund returned less than 0.9% while the benchmark returned 12.7%.
The fund was down 3.2% so far in 2026. Smith also disclosed a 51% portfolio turnover during the first half of the year.
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That marked a shift from his long-standing “do nothing” philosophy of buying quality companies and holding them for extended periods. Smith said Fundsmith would become more active and pay greater attention to momentum.
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Analysts cited by The Telegraph also pointed to slow exits from underperforming holdings and the rise of passive investing. Smith and Fundsmith declined to comment for the report.
