Fundsmith Equity Fund

The Fundsmith Equity Fund is a UK open-ended investment company (OEIC) that invests in shares on a global basis. It was launched on 1st November 2010 and had a fund size of £11.7bn as at 28 August 2026. It is run by portfolio manager Terry Smith, and the fund generally invests in 20 to 30 stocks, which makes it more concentrated than many other funds¹.

It is a concentrated fund: it generally holds 20 to 30 stocks, and held 28 as at 28 August 2026. It is not managed with reference to any benchmark, and it does not invest in derivatives or hedge currency exposure. It charges no initial fee and no performance fee¹.

This page covers what the fund is, what it holds, how its charges work, how income and accumulation shares differ, how buying and selling works, the risks, what happens on death, and how investors' money is held. It does not give current prices or rates: the provider's own factsheet carries today's figures.

What the Fundsmith Equity Fund is and how it invests

The fund is a UK OEIC, a type of open-ended fund that issues and cancels shares as investors put money in and take it out. Its stated approach is to invest in equities on a global basis and not to adopt short-term trading strategies.

The fund is not managed with reference to any benchmark. Comparators shown alongside it are provided for information only. That matters for a reader: there is no index the manager is trying to track or beat by a set margin, and no requirement to hold anything close to the weightings of a global index. The fund's active share was 88.7% as at 31 July 2026, a measure of how far the portfolio differs from its comparator¹.

The fund's portfolio complies with UCITS requirements on spread of investment, which is the European rulebook for retail funds that caps how much can sit in any one holding. The fund's auditor is Deloitte LLP, its depository is State Street Trustees Ltd and its registrar is SS&C¹.

The Fundsmith Equity Fund sits alongside the Fundsmith Stewardship Fund and the Smithson Equity Fund, all of which are run from the same Fundsmith business¹.

What the fund holds: companies, sectors and countries

The fund sits in the Investment Association's Global sector. Its sector split as at 28 August 2026 was led by Health Care at 17.9%, Information Technology at 16.6%, Consumer Discretionary at 14.5%, Industrials at 14.0%, Consumer Staples at 13.6%, Financials at 10.4% and Communication Services at 10.2%¹.

By country of listing, the portfolio was 81.0% US, 7.0% France, 5.2% Spain, 3.9% UK and 2.9% cash as at 28 August 2026. The median market capitalisation of the holdings was £101.7bn, and the average company in the portfolio was founded in 1958¹.

The ten largest holdings as at 31 August 2026 were Waters, Mastercard, Amadeus, Stryker, Visa, Veeva Systems, L'Oréal, Uber, Church & Dwight and Sage¹.

In the manager's commentary for August 2026, there were no outright sales or purchases of holdings made in the month, and AppLovin moved from Information Technology to Communication Services following a sector classification change¹.

A reader should note what this concentration means in practice. A portfolio of 28 stocks, heavily weighted to the US and to a handful of sectors, will not behave like a broad global index. The fund's own documentation describes it as more concentrated than many other funds¹.

How the charges work

The fund has no up-front fee and no initial charge. It also charges no performance fee, so the manager does not take a share of gains above a set level¹.

What it does carry is transaction costs: the dealing costs incurred inside the portfolio as holdings are bought and sold. For 2025 these were 0.02%¹. That is a small figure, and it reflects the low turnover: a fund that trades rarely incurs fewer dealing costs.

The fund's ongoing charges figure, the annual cost of running the fund, is published on the provider's factsheet and changes over time. This page does not carry it, and neither does it carry the fund's current price or yield. The provider's site has today's figures¹.

Two other costs sit outside the fund itself. If you hold the fund through a platform, the platform charges its own fee, and if you buy or sell through a broker you may pay a dealing charge. Those are separate from the fund's own charges and vary by provider. Our pages on fund charges and the ongoing charges figure and platform fees and charges explain how those are worked out.

Income or accumulation shares: how dividends are paid

The fund pays dividends twice a year. Income shares go ex-dividend on 30th June and 31st December, and the dividends are paid out on or about 28th February and 31st August¹.

For the interim period from 1st January 2026 to 30th June 2026, the dividend per share was 1.1510 for Direct shares, 1.0408 for Advised shares, 0.0000 for Institutional T Class shares, 1.3388 and 1.1926 pence per share across the remaining classes. For the final period from 1st July 2025 to 31st December 2025, it was 1.2737 for Direct shares, 1.1540 for Advised shares, 1.7736 and 1.5821 pence per share¹.

The distinction that matters to a reader is between income and accumulation share classes. An accumulation class automatically reinvests dividends; income and distribution classes pay them out to you⁴. The fund's yield figures, and the share class used as the reference, are set out on the provider's site¹.

If you want the income, you take the income class and receive the cash. If you do not need it, the accumulation class rolls it back into the fund without a separate reinvestment decision. Our page on how dividends work covers the mechanics, and dividend reinvestment covers how to set it up.

Buying, selling and daily dealing

The fund deals daily at noon¹. That is the cut-off point at which instructions are priced: money sent after it is dealt at the next valuation point. This is different from an exchange-traded fund, which is traded on a stock market and can be bought and sold throughout the day like shares⁵.

The practical consequences of daily dealing are worth setting out. You cannot pick a price during the day, because the fund is priced once a day. If markets move sharply between your instruction and the dealing point, you get the price at the dealing point, not the price you saw when you decided. Our page on how funds are priced and when your deal goes through explains the process.

You can hold the fund in a stocks and shares ISA, where only authorised or recognised funds may be held under current law⁶. It can also sit in a general investment account, and platforms commonly offer funds inside a Junior ISA or a self-invested personal pension⁵. Our page on where to hold investments sets out the wrappers side by side.

To buy the fund you go through a platform, a broker or the fund manager directly. The steps are broadly:

1. Choose the account wrapper: ISA, pension or general investment account.
2. Open an account with a platform or broker, or apply to the fund manager.
3. Place a deal before the noon cut-off for that day's pricing point.
4. Check the contract note and the ongoing charges on your platform statement.

Risks to weigh before investing

The fund invests in shares, and share prices fall as well as rise. Risk in an equity fund can vary considerably depending on the companies, sectors and markets in which the fund invests⁷. A concentrated portfolio of 28 holdings carries more of that risk per holding than a broadly diversified one.

The fund's own record shows the scale of short-term movement. Its best month was +9.4% in January 2013 and its worst month was -9.5%, both measured on T Class accumulation shares. It has been positive in 65% of months¹. Those figures describe the past and say nothing about what happens next.

The fund's documentation says the shares should be viewed as long-term investments of at least 5 years¹. Independent guidance from the investment company sector goes further: be prepared to keep your money invested for five to ten years, or longer, and try to ignore the inevitable ups and downs⁸.

There is also the risk that a fund becomes hard to sell. In 2019 the Woodford Equity Income Fund was frozen because there was not enough easily accessible cash to pay out to exiting investors, preventing anyone else from taking their money out¹⁰. The Fundsmith Equity Fund reported 7 day fund liquidity of 90% as at 28 August 2026, a measure of how much of the portfolio could be sold within a week¹. Our page on fund suspensions explains what happens when a fund cannot be traded.

The Financial Ombudsman Service has considered complaints from investors who were placed in funds with high levels of equity investment, which meant they were vulnerable to stock market fluctuations¹¹. That is a reminder that the suitability of an equity fund depends on the investor's circumstances and time horizon, not just the fund.

What happens to a Fundsmith holding when an investor dies

Once Fundsmith has verified the personal representatives, the investment can stay with the firm, be transferred, or be sold and the proceeds paid to the personal representative¹².

For sole accounts, Fundsmith stops correspondence to the deceased, cancels any active Direct Debits or regular withdrawal facilities, and sends a valuation as at the date of death along with details of any distributions and cash balances held. Where the account was held in joint names, Fundsmith removes the late client and the account continues in the name of the remaining holder or holders¹².

If the holding is below £20,000, a Small Estate Form witnessed by a solicitor may be used instead of a Grant of Representation. Where the original Death Certificate has not yet been issued, Fundsmith can accept an interim Death Certificate or Coroner's Certificate to register the death. Original certificates are returned by Royal Mail Special Delivery¹².

For estates in Scotland, Fundsmith must be listed on the Certificate of Confirmation. Foreign Grants are not recognised in the UK, though a document issued in a former or current Commonwealth country may be resealed in the UK, which is usually quicker than applying for a new Grant¹².

Fundsmith can pay some or all of the funds directly to HMRC to cover an Inheritance Tax bill, provided it holds the original Death Certificate, and once it receives a completed IHT423 form it can make the payment directly to HMRC¹². HMRC's own guidance notes that cash held within a share or investment portfolio can sometimes be released directly to HMRC, and that some providers of insurance and investment bonds will do the same; the route is to contact the stockbroker or fund manager¹³. Inheritance Tax can also be paid in yearly instalments, and the full tax and interest can be paid off at any time by writing to HMRC asking for a final assessment¹⁴. Where a payment is made directly, the account name is HMRC Inheritance Tax¹⁵.

Other investments handle death differently, which is worth knowing if a portfolio is spread across providers. NS&I Direct Saver stops accepting deposits on the death of the holder, the balance becomes part of the estate and the account continues to earn interest¹⁶. NS&I index-linked certificates become part of the estate, continue to accrue index-linked interest and remain free of income tax, and personal representatives can cash them in or transfer them to beneficiaries¹⁷. Premium Bonds cannot be transferred to beneficiaries and must be cashed by the executor of the will¹⁸. A building society may allow the account to remain open in the beneficiaries' name, be closed and transferred to another account, or be closed by cheque payable to all executors¹⁹. Some providers, such as Kuflink, send wallet funds to the nominated bank account on death²⁰, and Abundance transfers legal ownership of debentures or loans to executors or personal representatives on provision of the appropriate documentation²¹. A venture capital trust passes at the value on the date of death, with any deferred capital gains extinguished²².

How investors' money is held and protected

The fund does not invest in derivatives and does not hedge currency exposure arising from the operations of an investee business or from holding an investment denominated in a currency other than sterling¹. That removes one source of complexity, but it also means currency movements feed straight through to the fund's sterling value.

The fund's assets are held by a depository, State Street Trustees Ltd, separate from Fundsmith itself¹. That separation is the first layer of protection: the manager does not hold the underlying shares on its own balance sheet.

The second layer is the Financial Services Compensation Scheme, which covers investments held within a stocks and shares ISA up to £85,000 at firms such as Moneybox²³. The scheme covers the failure of a firm, not poor investment performance: if the fund falls in value, that loss is yours and no compensation is payable. Our pages on what happens if a platform fails and FSCS protection set out where the boundary sits.

Where protection stops is worth stating plainly. Cash held on a platform is not always covered by the FSCS. Bondsmith's cash hub, for example, states that money in it is not covered by the FSCS and is instead protected through the FCA's safeguarding rules, kept separately in a safeguarded account with an approved bank, with no limit to the amount protected through safeguarding but with some costs potentially taken by an administrator or liquidator²⁴. E-money firms safeguard customer money by holding it separately from the firm's own funds, which is a different regime from FSCS protection²⁵. Our page on cash held on investment platforms explains the difference.

If something goes wrong with the fund or the way it was sold, the Financial Ombudsman Service can look at complaints about investment funds¹¹. Our page on bad investment advice covers mis-selling, and investment scams covers the warning signs of fraud.