Fundsmith Equity - will the fund’s underperformance give investors jitters?

Fundsmith Equity saw its fourth calendar year of underperforming the MSCI World Index and the third consecutive calendar year of underperforming the Global sector - but Fundsmith CEO Terry Smith tells investors we should not expect outperformance from active funds every year. Kalpana Fitzpatrick looks at why the setback is possibly just a blip in what is otherwise a strong portfolio

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Terry Smith’s Fundsmith Equity fund is one of the most popular active funds among investors, but is its underperformance a concern?

In MoneyWeek’s monthly round-up of the most popular funds, stocks and trusts to invest in, Fundsmith has often been the most popular and often one of the few active funds that appears on the list of top 10, but in the last three months to December 2024, it seems investors have fallen out of favour for the funds and actives as a whole, with passives now dominating DIY portfolios.

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Kalpana Fitzpatrick

Kalpana is an award-winning journalist with extensive experience in financial journalism. She is also the author of Invest Now: The Simple Guide to Boosting Your Finances (Heligo) and children's money book Get to Know Money (DK Books).

Her work includes writing for a number of media outlets, from national papers, magazines to books.

She has written for national papers and well-known women’s lifestyle and luxury titles. She was finance editor for Cosmopolitan, Good Housekeeping, Red and Prima.

She started her career at the Financial Times group, covering pensions and investments.

As a money expert, Kalpana is a regular guest on TV and radio – appearances include BBC One’s Morning Live, ITV’s Eat Well, Save Well, Sky News and more. She was also the resident money expert for the BBC Money 101 podcast .

Kalpana writes a monthly money column for Ideal Home and a weekly one for Woman magazine, alongside a monthly 'Ask Kalpana' column for Woman magazine.

Kalpana also often speaks at events. She is passionate about helping people be better with their money; her particular passion is to educate more people about getting started with investing the right way and promoting financial education.