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This article is part of a series that provides an ongoing analysis of the changes made to Fundsmith’s 13F portfolio on a quarterly basis. It is based on their regulatory 13F Form filed on 5/15/2024. Please visit our Tracking Terry Smith’s Fundsmith 13F Portfolio series to get an idea of their investment philosophy and our last update for the fund’s moves during Q4 2023.

This quarter, Fundsmith’s 13F portfolio value increased $23.89B to $25.55B. The number of holdings remained steady at 40. The top three holdings are at ~30% while the top five are close to ~42% of the 13F assets: Microsoft, Meta Platforms, Stryker Corp, Visa, and IDEXX Labs.

Note: Their flagship Fundsmith Equity Fund (2010 inception) has returned 15.4% annualized compared to 11.7% for the MSCI World Index. 2022 was their first down year since inception – negative 13.8%. The following top holdings are not in the 13F report: Novo Nordisk (NVO), L’Oreal (OTCPK:LRLCF), and LVMH Moet Hennessy Louis Vuitton (OTCPK:LVMUY).

New Stakes:

Texas Instruments (TXN) and Choice Hotels (CHH): TXN is a small 0.76% of the portfolio position established at prices between ~$156 and ~$174. The stock currently trades well above that range at ~$199. The very small 0.37% of the portfolio stake in CHH was established at prices between ~$109 and ~$130 and it is now at ~$115.

Stake Disposals:

IPG Photonics (IPGP) and Johnson & Johnson (JNJ)(JNJ:CA): These two very small (less than ~0.25% of the portfolio each) stakes were disposed during the quarter.

Stake Increases:

Mettler-Toledo (MTD): The 3.18% MTD stake was purchased during H1 2022 at prices between ~$1098 and ~$1675 and the stock currently trades at ~$1480. The last few quarters saw only minor adjustments. This quarter saw a ~7% stake increase at prices between ~$1132 and ~$1350.

Fortinet Inc. (FTNT): The small 2.19% stake in FTNT was more than doubled during Q3 2023 at prices between ~$57 and ~$80. That was followed by a ~50% stake increase in the last quarter at prices between ~$49.50 and ~$60. The position was increased by 11% this quarter at prices between $57.78 and $73.07. The stock is now at $61.35.

Apple Inc. (AAPL)(AAPL:CA): AAPL is a ~1% of the portfolio position built during Q1 2023 at prices between ~$125 and ~$166 and the stock currently trades above that range at ~$190. The position was increased by 20% this quarter at prices between ~$169 and ~$195.

Mastercard Inc. (MA)(MA:CA), McDonald’s (MCD), Oddity Tech (ODD), Paycom Software (PAYC), and Zoetis Inc. (ZTS): These very small (less than ~0.25% of the portfolio each) stakes were increased during the quarter.

Stake Decreases:

Microsoft Corp. (MSFT)(MSFT:CA): MSFT is currently the largest position at 12.54% of the portfolio. The stake was built during the five-year period from 2013 to 2018 at prices between ~$27 and ~$115. There was a ~23% selling in Q1 2022 at prices between ~$276 and ~$335. The stock currently trades at ~$430. The last several quarters have seen trimming. They are harvesting gains.

Meta Platforms (META)(META:CA): The 9.44% META stake was built in 2018 at prices between ~$125 and ~$210. The stake remained steady since, although adjustments were made in most quarters. There was a ~20% reduction in Q1 2022 at prices between ~$187 and ~$339. That was followed by a ~11% selling during Q3 2023 at prices between ~$283 and ~$326. The stock currently trades at ~$478. There was marginal trimming in the last two quarters.

Stryker Corp. (SYK): SYK is a 7.67% of the portfolio position purchased during the decade that ended in 2021 through consistent buying every quarter at prices between ~$50 and ~$275. There was a ~20% reduction in Q1 2022 at prices between ~$245 and ~$278. The stock currently trades at ~$336. The last several quarters only saw minor adjustments.

Visa Inc. (V)(VISA:CA): Visa is a 6.22% of the portfolio position established over the decade that ended in 2021 through consistent buying in most years. The build-up happened at prices between ~$30 and ~$245. Q1 2022 saw a ~18% selling at prices between ~$191 and ~$235. The stock currently trades at ~$275. The last several quarters have seen only minor adjustments.

IDEXX Labs (IDXX): IDXX is a 5.74% of the portfolio position established during the 2015-16 timeframe at prices between ~$63 and ~$120. Since then, the position remained relatively steady although adjustments were made in most quarters. There was a ~15% trimming in Q1 2022 at prices between ~$466 and ~$631. That was followed by a similar reduction during Q1 2023 at prices between ~$406 and ~$515. The stock currently trades at ~$517. The last four quarters saw only minor adjustments.

Automatic Data Processing (ADP): The 2013-19 timeframe saw consistent buying in ADP at prices between ~$52 and ~$173. Q1 2020 saw a ~40% selling at prices between ~$112 and ~$181 while in the next quarter there was a ~70% increase at prices between ~$128 and ~$160. Since then, the activity had been minor. Q1 2022 saw a ~22% reduction at prices between ~$196 and ~$245. The stock is now at ~$249 and the stake is at 5.64% of the portfolio. The last two years saw only minor adjustments.

Philip Morris International (PM): The 5.32% PM stake was established during the decade that ended in 2021 through consistent buying every quarter. Pricing ranged between ~$60 and ~$120. Q1 2022 saw a ~20% selling at prices between ~$89 and ~$112. The stock is now at ~$100. The last several quarters have seen minor trimming.

Waters Corp. (WAT): WAT is a ~5% of the portfolio stake built during the 2015-2017 timeframe at prices between ~$115 and ~$200. Next two years also saw incremental buying. There was a ~23% selling in H1 2020 at prices between ~$175 and ~$240. Since then, the activity had been minor. There was a ~18% reduction in Q1 2022 at prices between ~$307 and ~$365. The stock currently trades at ~$337. The last several quarters have seen only minor adjustments.

Note: they have a ~7.6% ownership stake in Waters Corp.

Marriott International (MAR): The 4.31% stake in MAR was primarily built during Q3 2023 at prices between ~$182 and ~$208. The stock currently trades at ~$237. There was marginal trimming in the last two quarters.

Alphabet Inc. (GOOG)(GOOG:CA): GOOG is a 4.12% of the portfolio position purchased in Q4 2021 at prices between ~$133 and ~$151. There was a ~9% trimming in the next quarter. The stock currently trades at ~$176. The last quarter saw a ~8% selling and that was followed by marginal trimming this quarter.

PepsiCo (PEP): The ~4% PEP stake was built over the decade that ended in 2021 through consistent buying during most quarters. The buying happened at prices between ~$65 and ~$170. There was a ~25% reduction in Q1 2022 at prices between ~$154 and ~$176. The stock is now at ~$178. There was a ~12% trimming this quarter.

McCormick (MKC): MKC is a large 3.68% of the portfolio position built during the 2018-19 timeframe at prices between ~$50 and ~$86. There was a ~18% reduction in Q1 2022 at prices between ~$92 and ~$104. The stake was decreased by 19% this quarter at prices between $64.25 and $76.88. The stock currently trades at $72.21.

Note: they have a ~6.2% ownership stake in the business.

Procter & Gamble (PG): The ~3% PG stake was built during Q1 2023 at prices between ~$137 and ~$154 and it now goes for ~$165. There was a ~180% stake increase during Q2 2023 at prices between ~$143 and ~$157. There was marginal trimming in the last three quarters.

Church & Dwight (CHD): The 2.93% CHD position was built during the three quarters through Q2 2021 at prices between ~$72 and ~$93. There was a ~28% selling in Q1 2022 at prices between ~$95 and ~$104. That was followed by a ~20% reduction during Q2 2023 at prices between ~$88 and ~$100. The stock currently trades at ~$107. Q3 2023 saw a ~9% increase while the last two quarters saw marginal trimming.

Otis Worldwide (OTIS): OTIS is a 2.45% of the portfolio stake established during Q3 2022 at prices between ~$64 and ~$82 and the stock currently trades at ~$98. The last few quarters have seen minor trimming.

Nike, Inc. (NKE)(NKE:CA): The 2.40% NKE stake was built in H1 2020 at prices between ~$67 and ~$105. There was minor buying in most quarters since. Q1 2022 saw a ~23% reduction at prices between ~$118 and ~$166. The stock is now at $91.75. The last several quarters saw only minor adjustments.

Brown Forman (BF.B): BF.B is a 2.32% of the portfolio stake built in 2019 at prices between ~$45 and ~$68. 2021 saw a ~50% stake increase at prices between ~$67 and ~$81 while in Q1 2022 there was a ~28% selling at prices between ~$62 and ~$72. The stock is now at $45.76. The last several quarters saw minor trimming.

Note: They own ~5% of the business.

Clorox Company (CLX): CLX is a very small 0.35% of the portfolio position purchased last quarter at prices between ~$115 and ~$146 and the stock currently trades at ~$132. There was a minor ~3% trimming this quarter.

Cognex Inc. (CGNX), Exponent, Inc. (EXPO), Equifax Inc. (EFX), Graco Inc. (GGG), Home Depot (HD), IDEX Inc. (IEX), MSCI Inc. (MSCI), Qualys, Inc. (QLYS), Rollins, Inc. (ROL), Sabre Corp. (SABR), VeriSign Inc. (VRSN), and Verisk Analytics (VRSK): These very small (less than ~0.5% of the portfolio each) positions were reduced during the quarter.