저자: DaveBaxter · 외국인
요약 보기
결론: 테디 스미스의 펀드 개편은 모멘텀 장세에 대한 실용적 대응이지만 종목 선택·타이밍 리스크가 있어 분산투자가 중요하다. 펀드 개편 배경: 펀드 성과가 최근 5년·10년 기준 MSCI 세계지수에 뒤처졌고, 상반기 약 3% 손실을 기록했다. 스미스는 패시브 펀드와 모멘텀 장세를 원인으로 지목했다. 상반기 회전율은 약 52%로 평소보다 높아졌다. 매도·매수 내역: 유니레버, 나이키, LVMH를 매도 또는 매도 진행. 신규 매수는 TSMC(신흥시장 노출, 최근 12개월 약 110% 상승), AppLovin, Sage, Veeva Systems(소프트웨어 섹터 낙폭 종목), Netflix, Uber, Mastercard 등. 출연자 평가: 스미스는 반기 서한으로 투자자와 소통이 투명하다는 평가. 다만 AI 승자 예측, 타이밍 문제(Amazon 조기 매도, Adobe)는 우려 요인. 스타일(고품질 성장주)은 유지된다는 의견과 모멘텀 쪽으로 기울었다는 반론이 함께 제시됨. 비교 관점: 닉 트레인은 대형 집중 보유 종목(런던증권거래소, Experian 등)이 부진해 리스크가 크다고 평가. 자주 사고파는 펀드들의 최근 성과가 좋았다는 점도 언급. 투자 시사점: 기술주·AI 쏠림이 크므로 분산이 필요. 특히 기술 펀드로 이익이 난 투자자는 리밸런싱으로 평가이익을 실현하는 것이 중요. 다만 성급한 매도로 회복 가능 자산을 놓치지 않도록 주의. 특정 자산 방향 예측: 없음. 개별 종목·지수에 대한 1~3개월 가격 방향 발언은 확인되지 않음.
다듬은 글
Welcome to On the Money, a weekly show that takes a practical approach to investing and retirement. Today we'll talk about a notable change in his approach to investing that perhaps the most famous British investor working today, Teddy Smith, made. In short, he abandoned his famous low-turnover "do nothing" strategy , instead undertaking a major fund realignment.
Dave Baxter, Senior Fund Content Specialist at Interactive Investor, will be discussing this topic with me. So, Dave, you covered Teddy Smith's recent semi-annual letter in which he announced this significant change. First of all, could you explain the reasons why he abandoned his "do nothing " mantra?
It all comes down to his old performance over the past few years. Sorry . This comes down to his old problem of recent years, namely—efficiency. If you look at the results for the first half of this year, it seems that the fund lost almost 3% during a period of rising markets. If you look at the results over 5 years, its profitability is very weak, while for the global index it is very high.
Even 10 years later, it is lagging behind, and even since the fund was founded in 2010. Keeping in mind that the results were very strong before, it is not so far ahead of the market now. So he is trying to fix this situation. And, actually, when talking about his low performance, he blames tracker funds, which he mentioned earlier, and also believes that momentum drives the market too much.
So he's trying to be a little more proactive, to some extent take into account these momentum effects and, I think, stop fighting the market so much. The fund's turnover is usually very low, but in the first half of this year it reached almost 52%. Let's delve into the changes that have been made. In total, he began to build stakes in 12 new companies and exited or began to exit 13 positions.
The fund currently has 31 assets, which is slightly more than usual. It seems he usually had about 25 assets. And for those who watch us on YouTube or Spotify, we will show two tables with a list of sold and purchased shares. Dave, let's start with sales. Could you highlight the ones that interested you the most ?
So, let's start with Unilever. Looking back, it's surprising he didn't sell them sooner, as he had been quite critical of the company's management in recent years . Um, he claims he was unhappy with the fact that they made certain asset divestitures, like the Magnum spinoff, and then did a deal with the McCormick food company.
um, and in general he was quite unhappy with the management's behavior and other things like that. So, they gave up on it. Um, they also dropped Nike, which is quite interesting since it's a story of troubled restructuring over the past few years. And he believes that this restructuring story, you know, will last much longer, if it turns out to be successful at all .
Next, to highlight another famous name, it is the luxury goods brand LVMH. um, he's worried that issues like the difficulties in China will mean that again this restructuring will be delayed, if it happens at all. And moving on to purchases, one that stands out to me is Taiwan Semiconductor Manufacturing (TSMC).
Because the fund previously held stocks listed in developed markets, whereas this company is represented in emerging markets , so I mean, what do you think about that, Dave? And what else attracted your... Yeah, I think it's interesting because, as you say, Fundsmith Equity was a developed markets fund, and as you know, Fundsmith used to run an emerging markets investment trust, but they closed it down a few years ago because their approach didn't really work in that region.
So this is, first of all, a departure from the rules. Um, but it's also a departure in terms of his approach. Hmm, so you could say that TSMC is one of those " impulse" stocks at the moment. Um, at the time of writing, the stock has returned about 110% in 12 months. So he jumps into one of those stocks that are skyrocketing.
Um, it's also worth noting that TSMC could easily be called, you know, an artificial intelligence play. And earlier, Terry attached great importance to the idea that it is impossible to predict who will be the winner in the topic of AI, and another new asset, AppLovin, can also be considered a kind of play on AI.
Next, if we move on to a couple of other interesting purchases, um, that caught my eye—he went back to Sage and also bought a stake in a company called Veeva Systems. Both of them belong to the software field. So, I guess he's buying stocks of companies that have been hit by the sell-off in the software sector .
Um, but one more thing we didn't mention is another change: he wants to try to avoid investing in "buggy " projects. He is known to have bought companies like Microsoft and, you could say, Meta when they were going through tough times, and it paid off very well. But now he is a little afraid of falling into the trap of this momentum-driven market and is trying to avoid it.
Although it can be argued that these are only isolated failures. So, perhaps there is some inconsistency here. And finally, he added several very well-known and popular large American companies to the portfolio. These are Netflix, Uber, and Mastercard, which joined Visa in the portfolio. I think it's worth noting that Teddy Smith provides very detailed justification, in particular, for the purchases he made.
Yes. In its semi-annual letter to investors. I think he is a very good communicator. He is very transparent in his actions. We have both interviewed Teddy Smith over the years, and he does n't shy away from answering tough questions. I think, I'm even sure, that he welcomes them. Moreover, he is not required to write these letters twice a year, and we do not see other management companies adopting this practice en masse.
Um, I think it's really important to communicate effectively with retail investors, and when you make changes to a portfolio, it's important to communicate them and explain the reasons. And I think, you know, for me, that's one of the reasons why I love investment trusts, because they have to do semi-annual and annual reports, and as a retail investor you get a lot of detail about the fund manager's thoughts and the changes he's making to the portfolio.
In terms of metrics, as you mentioned, Dave, the return gap since launch compared to the MSCI World index has narrowed. However, the fund is still outperforming since its launch in November 2010. So I think if you bought the stock at launch and held it all this time, you would still be happy as the fund outperformed the global tracker fund over this period.
However, if you bought them five years ago, the experience is completely different. You're going to have, you know, a pretty significant lag in profitability, and I think in an ideal scenario you would have recorded a profit five or six years ago and you would have been very happy then because the gap in profitability was much wider than it is today.
Regarding the changes that have been made to the portfolio, I can understand both sides of the argument. So, on the one hand, some investors might have hoped that investments that were in the fund before these changes were ripe for recovery, as many stocks had underperformed over the past five years.
But on the other hand, if you trust a fund manager to invest on your behalf, you want them to invest where they see the best opportunities. So, you expect the manager to update the portfolio if they consider it the best decision. I think it's important to note that yes, he may have abandoned the " do nothing" mantra, but the fund's style is to look for high-quality, growth companies.
This has not changed. Although I think that could be argued as he is trying to add more momentum to his funds. So maybe some people would at least argue that there is a departure from style. And, playing devil's advocate, I think that on the one hand it's good that someone is trying to adapt, especially if they believe that the markets have changed significantly.
But the main question I would have if I held these funds or were considering buying them is: Has he delved into things that are not his strong point? He doesn't understand this, for example, can he predict who will become a leader in the field of artificial intelligence? Also, in recent years, one of the main criticisms of Fundsmith, for example from Morning Star, was that it had problems with timing purchases and sales.
For example, he exited Amazon relatively quickly, maybe after 18 months, after which the company performed great , and he had timing issues with names like Adobe. If he's set to be more active, and he said we won't necessarily see a 52% turnover rate again, you're likely to see higher turnover than before.
Will we run into new timing issues, or do we actually expect the team to improve on this aspect now that they're at it ? It's possible that he simply made one big set of changes in the first half of the year, and we won't see such portfolio turnover in future years . As for my earlier comments about style, I would be more concerned if the types of stocks he was buying didn't fit the description of quality growth.
This would really be a warning sign for me . But, um, I also understand your point, Dave, that for some investors , the reason they initially purchased this fund was precisely to support a buy-and-hold strategy. And now he has abandoned this principle. I think another argument in his defense is that a certain consistency still remains, as he follows the same metrics that guided the fund before.
He usually paid attention to things like return on capital employed, free cash flow, profitability, and so on. And he tried to prove that the new portfolio looks pretty good by these standards. I always thought it should add a certain discipline and stability to their work. Another investor who tends to stick to a buy-and- hold strategy and also has performance issues is Nick Train.
Nick Train has been a little more active than usual over the past couple of years. He bought several companies, but these changes were minimal. Dave, what are your overall thoughts on whether it's worth making changes to improve performance or whether it's better to stick with the assets you've held for years?
Personally, I'm a little concerned about Smith's approach because I don't even know, let's say, six months ago, I remember arguing to someone that these portfolios like Fundsmith, Lindsell Train, etc. look attractive because they're out of favor right now. A lot of it has to do with style, and it can be a useful asset in your portfolio because hopefully at some point when the market turns, it should work well.
So it's useful to have that consistency, but in the case of Nick Train it looks extreme: he has very large stakes, and companies like the London Stock Exchange, Experian, etc. are really struggling, so it's a pretty risky bet that becomes a real challenge. And , perhaps, as we wrote earlier, it is interesting to observe funds with a much higher level of asset turnover.
Names like Rammer, Global Equity, Blue Whale Growth, etc. In recent years, they have demonstrated truly significant results. Maybe it's just a different market that rewards flexibility more. But the other side of the argument is that if you've held on to underperforming stocks for a long time , you 're looking pretty stubborn by holding on to them .
Of course, you hold them because you believe that over time the prospects will improve and, ultimately, as a fund manager, you will be proven right. But it can take a long time for narratives to change, and sometimes you can hold onto a company's stock for too long and wait for a recovery, missing out on other potential opportunities.
Yes. And perhaps this is an argument in favor of a more proactive, gradual approach. That is, you reduce positions a little, add a little, as can be seen, for example, in funds such as Scottish Mortgage. Because if you just follow a buy-and- hold strategy with large positions, then you are somewhat tied to them, and that becomes a much bigger problem, positive or negative, for results.
As for staff or managers, in the UK Terry Smith and Nick Train are two very well-known names. This is also Bill Ackman, a famous American investor. However, in general, this culture of “star managers ” is much less prevalent today than, say, 15 years ago, when I started as a young reporter at a financial publication.
I think it would be fair to say that back then, especially from a marketing perspective, investment companies actively advertised the top fund managers, saying that this was the expert who could outperform the market. What do you think, Dave, about management companies moving to this kind of team approach?
I mean, you can see funds now that list three, four, or five managers. I think to some extent this reduces the risks for the fund and the company, because in those days you mentioned, there were really big names, and if such a manager went to another company, huge amounts of money were withdrawn from the fund; and if it's an open-end fund, it creates problems because they have to pay out cash to investors.
So that seems reasonable. But I would like to emphasize that the choice of the lead manager and deputy, if any, can still be extremely important in my opinion to how the portfolio is managed. Because yes, the approach may be team-based, but I'm sure you've encountered the same thing: I've repeatedly seen funds where one manager has a very specific view on a certain thing or investment, and when someone else replaces him , his views are radically different.
So the portfolio can change quite radically. I agree. I mean, I like the fact that funds have a lead manager or two because I think it gives individual investors accountability for performance. I really think there's a danger when you have four or five managers, because then who is the person who, you know, is in charge?
Which one can explain why the fund is showing poor results? Let's get back to the reason why Teddy Smith decided to undertake this portfolio overhaul. So, as you mentioned earlier, Dave, it operated through the dominance of passive funds. That is, index funds or ETFs, which, he said, have made the stock market more dependent on momentum rather than fundamentals such as company profitability.
So with that in mind, should we as investors take this into account and consider making changes to our own portfolios? Uh, yes and no. It's good to be able to adapt. Um, I think it's worth being wary of how fickle and volatile the markets can be right now. Um, but it's very dangerous to try to chase indicators.
People, of course, can tell me: well, TSMC is growing 100% every year and all that. But the situation may change. Um, I mean, my mantra has always been pretty boring: participate in these markets, but don't forget to diversify. So look at regions like the UK alongside the US, and look at those more boring sectors we mentioned earlier.
I completely agree, Dave. We talk regularly on this podcast about the importance of diversification. In terms of areas where investors should consider whether they potentially have too much exposure right now, I would say the most glaring is technology and, as a result, the topic of artificial intelligence.
So, for three years now, we have been publishing a quarterly report called the “ Top 50 IIO Funds Index.” We rank the most purchased funds, investment trusts, and ETFs over a three-month period. We base our analysis on the number of purchases and exclude regular investments because we want to provide insight into the active decisions made by individual investors.
We've just published our latest report, which you can view on iii.co.uk, and one of the trends we've seen in the second quarter of this year is that out of those 50 funds in the index, the number of technology funds has gone from five to 10, and of those 10, three are actively managed funds. So, this is the Polar Capital Technology investment trust.
There is also the open-ended Polar Capital Global Technology, as well as the Allianz Technology investment trust. And the remaining seven are all index funds or ETFs that provide targeted exposure to technology, such as the VANC semiconductor ETF. It appears twice in our index for both the accumulation and income-paying share classes.
There is also the LG Global Tech Index Trust, the Invesco EQQ NASDAQ 100 ETF, the iShares MSCI Global Semiconductors ETF, and the S&P 500 information technology sector ETF from iShares, and there is also a technology credit ETF managed by Wisdom Tree. And I believe that in the second quarter of the year, the demand for specialized technology funds was fueled by the SpaceX initial public offering.
We also saw in our IIO Top 50 Funds Index that the space sector rose eight spots in the rankings to 14th place. We also saw a new player—VANC space innovators ETF. What do you think, Dave ? Do you think investors are becoming too dependent on technology? Yes, I think it's a big risk. Hmm, it's very easy to get carried away.
You get these thematic investments that have a lot in common, at least in terms of investment style. And as we discussed earlier, one part of the market that is growing is emerging markets. People may be increasingly involved in this. But a big part of this is also bets on artificial intelligence, like SK Hynix and Samsung Electronics.
So it's almost impossible to avoid the realm of technology and artificial intelligence these days. However, it is worth trying to look for opportunities for proper diversification. If you bought a technology fund five years ago, now is the time to think about rebalancing to turn paper gains into real gains.
I have had conversations with many private investors over the years and I know that some of them do not like the idea of rebalancing. An investor once asked me, “Isn’t this just throwing money away?” Some are afraid of locking in profits from a stellar asset too early, and then the investments they decide to put their money into may take a long time to recover.
I think it's worth remembering that rebalancing restores the risk level of your portfolio to what it was when you first formed it. That's exactly what it does. I completely agree that it is possible to sell a successful asset prematurely and end up investing in something that is underperforming but could actually recover.
So it's worth being careful. But I think you just need to remember what rebalancing is and what it's supposed to achieve . Yes. I mean, rebalancing is actually a pretty boring thing. But if we look at extreme examples, let's say you were lucky enough to hold Scottish Mortgage shares in 2020, which allowed you to almost double your capital in that year.
You would think that the good times would continue . Um, the results eventually improved, but things have been pretty tough for the last five years. The asset's value appears to have roughly halved in 2022. So, while it's not exciting, rebalancing would help protect you from this. So, Dave, I think it's time to wrap up the episode.
Thank you for coming today. Thank you for inviting me. It's all in our latest issue of On the Money. I hope you enjoyed it. We are happy to hear feedback from listeners and can be contacted by writing to otmi.co.uk. And I hope to see you next Thursday.
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