Terry Smith's Fundsmith reported a portfolio value of $13.65 billion in its Q2 2026 13F filing, a notable increase from the prior quarter. Known for a long-term, "buy and hold" philosophy, the fund revealed a significant strategic shift with unusually high portfolio turnover. This activity included the initiation of 13 new positions and the complete exit from six holdings. The changes reflect a new willingness to incorporate momentum into the firm's strategy, a departure from Smith's famous "do nothing" approach.
The most significant moves were sizable new investments in technology and payment-processing giants. Fundsmith initiated a $645.34 million position in Uber, making it the fund's fifth-largest holding immediately. A new $639.46 million stake in Mastercard also placed it directly into the top holdings at number six. Other major new buys included Taiwan Semiconductor (TSM), Netflix (NFLX), and GE Vernova (GEV). The scale of these initial purchases, particularly in Uber and Mastercard, signals a high degree of conviction from the outset.
Conversely, Fundsmith exited several long-standing positions, indicating a clear change in outlook. The firm completely sold its holdings in industrial manufacturer Mettler-Toledo (MTD), animal health company Zoetis (ZTS), and elevator manufacturer Otis (OTIS). All three were classified as high-strength exits. Additionally, the fund significantly reduced its stakes in several of its top holdings from the previous quarter, including Marriott (MAR), Waters Corp (WAT), Visa (V), and Alphabet (GOOGL), despite them remaining top positions.