Terry Smith - Fundsmith Investment Strategy (Sep 30, 2025)


As of Sep 30, 2025, the Fundsmith portfolio managed by Terry Smith demonstrates a sophisticated investment approach with 56 positions and an average holding period of 1555 quarters. The strategy focuses on Communication Services, Consumer Cyclical, Consumer Defensive, Financial Services, Healthcare, Industrials, Technology sectors with a typical position size of 3.6% of the portfolio.


The portfolio's risk management approach includes a maximum position size of 3.65% and sector diversification of 7%, exemplified by the case study of STRYKER CORP (SYK). This strategic framework provides insights into Terry Smith's investment philosophy, risk management practices, and long-term value creation approach.

Investment Strategy Metrics

Key metrics revealing investment style, risk management, and performance characteristics

MetricValueCategoryDescription
Holding Period4.3 yearsStyleAverage duration positions are maintained
Position Count56StyleNumber of active positions in portfolio
Position Size3.6%RiskTypical allocation per position
Win Rate58.5%PerformancePercentage of profitable positions
Average Return2371.3%PerformanceMean return across positions
Sharpe Ratio0.16PerformanceReturn per unit of risk taken

Investment Case Study: STRYKER CORP (SYK)

3/31/2013 - 12/26/2025

Performance Metrics

Total Return: 120,443.19%

Holding Period: 4653 days

Max Position Size: $1,960,793,349.00

Position Weight: 7.08%

Key Events

3/31/2013: ENTRY(14,676.00 shares) @ $8.32
6/30/2013: INCREASE(2,006,741.00 shares) @ $0.06
9/30/2013: INCREASE(69,742.00 shares) @ $0.07
12/31/2013: INCREASE(23,227.00 shares) @ $0.08
3/31/2014: INCREASE(111,569.00 shares) @ $0.08
6/30/2014: INCREASE(233,533.00 shares) @ $0.08
9/30/2014: INCREASE(79,628.00 shares) @ $0.08
12/31/2014: INCREASE(51,774.00 shares) @ $0.09
3/31/2015: INCREASE(103,904.00 shares) @ $0.09
6/30/2015: INCREASE(68,601.00 shares) @ $0.10
9/30/2015: INCREASE(158,446.00 shares) @ $0.09
12/31/2015: INCREASE(276,622.00 shares) @ $0.09
3/31/2016: INCREASE(407,066.00 shares) @ $0.11
6/30/2016: INCREASE(327,206.00 shares) @ $0.12
9/30/2016: INCREASE(204,143.00 shares) @ $0.12
12/31/2016: INCREASE(812,518.00 shares) @ $0.12
3/31/2017: INCREASE(226,057.00 shares) @ $0.13
6/30/2017: INCREASE(552.00 shares) @ $0.14
9/30/2017: DECREASE(-1,376.00 shares) @ $0.14
12/31/2017: DECREASE(-36,389.00 shares) @ $0.15
3/31/2018: INCREASE(376,207.00 shares) @ $0.16
6/30/2018: INCREASE(2,215.00 shares) @ $0.17
9/30/2018: INCREASE(4,691.00 shares) @ $0.18
12/31/2018: DECREASE(-52,028.00 shares) @ $0.18
3/31/2019: INCREASE(112,516.00 shares) @ $0.20
6/30/2019: INCREASE(219,599.00 shares) @ $0.21
9/30/2019: INCREASE(143,665.00 shares) @ $0.22
12/31/2019: INCREASE(137,887.00 shares) @ $0.21
3/31/2020: DECREASE(-151,667.00 shares) @ $0.17
6/30/2020: INCREASE(273,222.00 shares) @ $0.18
9/30/2020: INCREASE(72,591.00 shares) @ $0.21
12/31/2020: INCREASE(357,755.00 shares) @ $0.25
3/31/2021: INCREASE(371,593.00 shares) @ $0.24
6/30/2021: INCREASE(7,637.00 shares) @ $0.26
9/30/2021: INCREASE(1,369.00 shares) @ $0.26
12/31/2021: INCREASE(237,196.00 shares) @ $0.27
3/31/2022: DECREASE(-1,406,517.00 shares) @ $0.27
6/30/2022: INCREASE(203,677.00 shares) @ $0.20
9/30/2022: DECREASE(-421,279.00 shares) @ $0.20
12/31/2022: DECREASE(-21,528.00 shares) @ $244.49
3/31/2023: DECREASE(-108,728.00 shares) @ $285.47
6/30/2023: INCREASE(13,332.00 shares) @ $305.09
9/30/2023: INCREASE(7,158.00 shares) @ $273.27
12/31/2023: DECREASE(-6,177.00 shares) @ $299.46
3/31/2024: DECREASE(-33,560.00 shares) @ $357.87
6/30/2024: DECREASE(-122,802.00 shares) @ $340.25
9/30/2024: DECREASE(-19,443.00 shares) @ $361.26

Investment Thesis

Entry Context: Initial position established based on fundamental analysis

Sector Conditions: Favorable market conditions in the sector

Risk Factors:
  • Market volatility
  • Sector-specific risks

Key Learnings

  • Position sizing is critical for portfolio management
  • Important to monitor sector exposure

Sector Allocations