investors layers continue to vigorously money out of actively managed equity funds in ETFs in order. No wonder, then, cut, but usually 80 to 90 percent of the Fund managers over an extended period of time worse than their benchmark index. The high management to press charges, in addition to the rate of return.

One of the few exceptions in the sector, Terry Smith. He started his career in 1974 with the British Barclays Bank. After several other stations he founded in 2010, the London-based investment firm, Fund Smith, the Chairman of the Board and the investment he strategist is.

The flagship of the company, the Fund Fund Smith Equity Fund manages assets of 19.3 billion pounds and is the largest in the UK. After he has earned for years of outstanding Performance from many investors for the annual General meeting on may 25. February, the star Fund Manager, likes Warren Buffett compare, once more, their questions will be set.

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The mood on the shareholders ' meeting is expected to be more dazzling. In the past year, the price of the Fund is shooting 25.6 percent. For the past five years, the Plus adds up ... so proud to 132,2 percent, which the Fund refers to the competition-by far the places. Since the launch of the Fund on 1. November 2010 there are even a 377 percent.

So Smith has left not only the S&500 has increased by around 185 per cent, and the global MSCI All Country World Index (103 percent) is significantly behind, but also the share of the investment legend Warren Buffett-led group, Berkshire Hathaway (173 percent).

The success of Smith back to his rigorous selection process. He searches for companies with high and stable profits, large market share, patents and well-known products. In contrast to other investors, Smith looks not to the increase in earnings per share, but that the company generates a high return on capital employed (ROCE), the importance of a sustainably high rate of return is also. "Only 70 companies worldwide to pass the Test," he recently told the "Handelsblatt". In his Portfolio he has 28 of them. "Three-quarters of the world are uninvestierbar."

Strict selection criteria

In his published in January, the annual letter to shareholders, Smith has shown once more the three rules of his philosophy clear: "Buy good companies. Don't pay too much. Do nothing“, the star Fund Manager. According to the shareholder letter of the last 28 companies accounted in the Portfolio of the Fund Smith in the past year, an average ROCE of 29%, well above the reference value of the S&P500 by 17%.

a Good price is of high importance

Smith and his colleagues, especially to companies in the "Old Economy" and especially to consumer values. They make up almost 30 percent of its portfolio. The manufacturers of investment goods would sell them to companies. In a weak economic environment, you could curtail your orders, which will be a burden on the producers of capital goods. By contrast, consumers in times of crisis could postpone the sale of cars and houses, but not those of food and hygiene articles. The company, the Smith's favor, you must also have a good growth potential, so at least part of their excess cash flow in the business to reinvest in order to generate a high return on investment. The financial professional also avoids companies in highly cyclical, so economy-dependent sectors. Also, banks and airlines covered by the Grid. "I will never invest in a Bank," said Smith, the "Handelsblatt". Since the invention of derivatives in the 1980s, you could make any sensible risk analysis and more. In addition to the consumption values, Smith relies on Tech stocks, which make up 30 percent of his portfolio, and health shares, almost 25 per cent.

Of great importance is also the price of the respective Investments. Smith and his colleagues estimate, for each company the potential Free cash flow, (short FCF, cash flow from operating activities less investments). The company must be evaluated in relation to the FCF as low as possible.

Then Buy-and-Hold applies, then, Smith holds the shares long in the Portfolio and gives you time for the prices to go up sharply. "Ten of the currently in the Fund's shares since the Start of the Fund," wrote Smith. A few shifts are of great importance because of the pressures of the cost that is important, in order to generate a good return.

Smith also invests only in companies with a high market value. At the end of December, the Fund contained values had an average market capitalization of 114 billion British pounds (136,8 billion Euro). This is far above the reference value of the S&P500 of 55.6 billion dollars (51.3 billion euros).

The ten heavy weights of the Fund

The ten heavy weight of the Fund were last

• Microsoft ,
• PayPal ,
• Philip Morris
• Facebook ,
• Estée Lauder
• Novo Nordisk
• Intuit
• Idexx,
• Stryker and
• Visa .

The world's largest software company Microsoft is benefiting from the strong growth in demand for Cloud solutions, and has recently presented a convincing first-quarter figures. Then, the share had climbed to record highs. With a market value of 1.41 trillion dollars, the software giant is only minimally behind Apple (1,42 trillion dollars) to rank two in the S&P500.

According to Smith, some of the investors would have demanded that he should sell the Facebook shares. He is set to hold on steadfastly to the paper of the social network, especially since the User Numbers would continue to rise. "We have received similar calls, as we have bought Microsoft," wrote Smith in the letter to shareholders. The "Handelsblatt", he tells: A British Investor told him that Facebook was history, because his children used it. He replied: "What about the children in Jakarta?" As long as the social network list, a user growth of nine percent, make he no Worry.

However, the payment processors, PayPal has issued recently a disappointing forecast, because the Acquisition of Honey Science, the largest in the history of Paypal, burden gain. In the next year, the transaction is expected to boost however, the profitability.

The U.S. tobacco manufacturer Philip Morris has recently exceeded the Figures of the analysts ' estimates significantly. Although the sale of Cigarettes goes back, however, the demand for E-cigarettes of the trademark IQOS is rising sharply. Philip Morris is waiting for a decision by the US health authority FDA, whether IQOS land can be sold. Currently, the partners Altria sells it only in two U.S. cities, Atlanta and Richmond.

However, the U.S. cosmetics giant Estée Lauder has delivered for the second Time in a row a profit warning, because the Corona pandemic pressures, the demand in China. The group generates around a quarter of its sales in the Asia/Pacific Region. In addition, the Region America falters, whose sales have risen in the last quarter hardly.

investors in the Fund, Smith Equity Fund will look in the next few years if Smith continues impressive run of success. Expert explains: The 70:30 rule explains the best way to protect savers against Inflation, FOCUS Online/Wochit expert: The 70:30 rule is the best way to protect savers against Inflation

Date Of Update: 18 February 2020, 13:00