Terry Smith 2024 letter: recent trades, underperformance and Nvidia
Fundsmith founder Terry Smith published his annual letter to shareholders last week. As well as being a high-profile stockpicker, Smith is an entertaining writer. Regardless of whether you agree with his views and stock choices, I find his letters well worth reading – especially for investors pursuing a compounding quality strategy.
Among the topics covered in this year’s letter are why Smith sold Apple (NSQ:AAPL) and Diageo (LON:DGE) last year, plus what could go wrong for NVIDIA (NSQ:NVDA) shareholders.
He also touched on the issue of the fund’s four years of underperformance and explained why – in his view – this is not necessarily at odds with the successful delivery of his strategy.
4 years of underperformance
Fundsmith’s flagship Equity Fund underperformed the global market for the fourth consecutive year in 2024, although the fund’s long-term performance since inception in 2010 remains excellent:
Source: Fundsmith website 11/01/25
Perhaps a little more worrying for me is why Fundsmith has underperformed rival fund managers in IA Global Sector for most periods under five years:
Looking back at past factsheets suggests...