Terry Smith’s Fundsmith Investment Q3 2024 top 10 portfolio holdings analysis

MSFT – Microsoft Corp.
Portfolio Allocation: 11.75%
Recent Activity: Reduced 3.37%
Shares Held: 6,900,275
Reported Price: $430.30 per share
Value at Reported Price: $2,969,188,000

Microsoft remains the largest holding, despite a slight reduction in shares. Known for its leadership in software, cloud computing, and AI, Microsoft aligns with Fundsmith’s preference for high-quality technology companies that deliver consistent growth and strong cash flows.

META – Meta Platforms Inc.
Portfolio Allocation: 11.03%
Recent Activity: No change reported
Shares Held: 4,871,364
Reported Price: $572.44 per share
Value at Reported Price: $2,788,564,000

Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, is a significant position in the portfolio. Meta’s focus on social media, digital advertising, and virtual reality aligns with Terry Smith’s interest in high-growth technology companies with strong market positions.

SYK – Stryker Corp.
Portfolio Allocation: 7.63%
Recent Activity: Reduced 0.36%
Shares Held: 5,336,821
Reported Price: $361.26 per share
Value at Reported Price: $1,927,980,000

Stryker, a leading medical technology company, provides exposure to the healthcare sector. Known for its innovations in medical devices and equipment, Stryker aligns with Fundsmith’s strategy of investing in companies with stable growth in essential industries.

ADP – Automatic Data Processing Inc.
Portfolio Allocation: 6.1%
Recent Activity: Reduced 0.25%
Shares Held: 5,571,820
Reported Price: $276.73 per share
Value at Reported Price: $1,541,890,000

ADP, a global provider of human resources and payroll services, continues to be a core holding. ADP’s consistent demand for workforce management solutions makes it a reliable company within the portfolio, aligning with Fundsmith’s focus on steady growth and dependable cash flows.

V – Visa Inc.
Portfolio Allocation: 6.03%
Recent Activity: Reduced 0.10%
Shares Held: 5,546,831
Reported Price: $274.95 per share
Value at Reported Price: $1,525,101,000

Visa, a leader in global payments, remains a prominent position. Its dominant market position in digital payments aligns with Fundsmith’s focus on companies benefiting from long-term shifts towards cashless transactions and digital finance.

PM – Philip Morris International
Portfolio Allocation: 5.77%
Recent Activity: Reduced 17.01%
Shares Held: 12,012,659
Reported Price: $121.40 per share
Value at Reported Price: $1,458,337,000

Philip Morris, a major tobacco company, saw a significant reduction in shares. This reduction may indicate a strategic reallocation while maintaining exposure to a high-margin consumer staples company with strong cash generation.

IDXX – IDEXX Laboratories
Portfolio Allocation: 5.32%
Recent Activity: Added 0.04%
Shares Held: 2,664,162
Reported Price: $505.22 per share
Value at Reported Price: $1,345,988,000

IDEXX Laboratories, a leader in veterinary diagnostics and pet healthcare, aligns with Fundsmith’s focus on companies with high-growth potential in niche markets. This small addition reflects confidence in the continued expansion of the pet healthcare sector.

WAT – Waters Corp.
Portfolio Allocation: 5.19%
Recent Activity: Reduced 0.23%
Shares Held: 3,645,999
Reported Price: $359.89 per share
Value at Reported Price: $1,312,159,000

Waters Corporation, a specialist in analytical instruments, provides exposure to the life sciences sector. Its consistent demand from pharmaceutical and biotech industries makes it a reliable addition to Fundsmith’s portfolio of quality companies.

GOOGL – Alphabet Inc.
Portfolio Allocation: 4.5%
Recent Activity: Added 0.04%
Shares Held: 6,852,087
Reported Price: $165.85 per share
Value at Reported Price: $1,136,419,000

Alphabet, the parent company of Google, is a high-growth tech company focused on digital advertising, cloud computing, and AI. The small addition reflects Fundsmith’s positive outlook on Alphabet’s ability to generate strong returns from its core businesses.

MAR – Marriott International
Portfolio Allocation: 4.2%
Recent Activity: Added 0.05%
Shares Held: 4,266,655
Reported Price: $248.60 per share
Value at Reported Price: $1,060,690,000

Marriott, a leader in global hospitality, offers exposure to the travel and leisure sector. The small addition to the position indicates confidence in the recovery of global travel and the strength of Marriott’s brand in the hotel industry.

Analysis of Terry Smith’s Q3 2024 Portfolio Strategy

1. High Conviction in Tech and Healthcare
Microsoft and Meta Platforms represent a significant portion of the portfolio, demonstrating a strong focus on high-growth tech companies. Stryker and IDEXX Laboratories show Fundsmith’s commitment to the healthcare sector, particularly in companies with steady demand.

2. Strategic Reductions and Reallocations
Fundsmith made slight reductions across several positions, including Microsoft, Visa, and Philip Morris, possibly indicating profit-taking or portfolio rebalancing. The reduction in Philip Morris, in particular, may suggest a cautious approach to traditional consumer staples.

3. Small Additions Reflecting Optimism in Growth Sectors
The small increases in IDEXX, Alphabet, and Marriott indicate confidence in specific growth opportunities. These additions align with Fundsmith’s strategy of investing in companies benefiting from long-term trends in technology, pet healthcare, and travel.

Conclusion
Terry Smith’s Q3 2024 portfolio for Fundsmith reflects a balanced strategy focused on high-quality tech, healthcare, and consumer companies. With selective reductions and modest increases, the portfolio is positioned to benefit from consistent cash flows, growth in healthcare, and recovery in global travel. Fundsmith’s emphasis on stability and growth aligns with its long-term investment philosophy.