Terry Smith’s Biggest Bets for 2026

Terry Smith’s Fundsmith reported an equity portfolio of approximately $19–20 billion in the latest quarter, continuing its trademark approach: a concentrated collection of high-quality, global consumer and technology franchises with strong pricing power and high returns on capital. While the overall structure of the portfolio remains stable, last quarter shows meaningful trims in several mega-cap technology positions, alongside selective adds to existing compounders.

Fundsmith remains willing to rebalance position sizes aggressively when valuations or portfolio risk warrant adjustment—without changing its core philosophy.

Total Portfolio Value: ~$19–20B
Top 10 Weight: ~65–70%
Turnover: Moderate (rebalancing, not strategy change)

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Top Holdings & Weights

Company	Ticker	Value	Portfolio %
Stryker	SYK	~$1.70B	~8.6%
IDEXX Laboratories	IDXX	~$1.67B	~8.4%
Alphabet (Class A)	GOOGL	~$1.53B	~7.7%
Microsoft	MSFT	~$1.34B	~6.8%
Visa	V	~$1.32B	~6.7%
Automatic Data Processing	ADP	~$1.27B	~6.4%
Waters	WAT	~$1.19B	~6.0%
Philip Morris International	PM	~$1.17B	~5.9%
Meta Platforms	META	~$1.14B	~5.8%
Marriott International	MAR	~$1.10B	~5.6%

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Biggest Changes Last Quarter

Major Trims

• Microsoft:
  Shares reduced by ~2.36M (-48% QoQ)
  → Clear valuation-driven de-risking after a strong multi-year run.
• Meta Platforms:
  Shares cut by ~2.01M (-56% QoQ)
  → Significant position resizing following sharp price appreciation.
• Philip Morris International:
  Trimmed by ~1.89M shares (-21% QoQ)
  → Ongoing rebalancing rather than loss of conviction.
• Alphabet (Class A):
  Reduced by ~514k shares (-7.6% QoQ)

Notable Adds

• Waters:
  Added ~347k shares (+9.6% QoQ)
  → One of the clearest signals of incremental conviction last quarter.
• Smaller increases across Visa, Procter & Gamble, and Fortinet, consistent with steady compounding exposure.

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Full Exits Last Quarter

Several complete exits were disclosed, including:

• Choice Hotels
• Exponent
• Verisk Analytics
• Mastercard

These exits were relatively small in portfolio weight and appear driven by portfolio simplification and relative opportunity cost, not style drift.

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Portfolio Characteristics

Style: Quality Growth / Consumer & Enterprise Compounders
Holding period: Long-term (with active sizing)
Turnover: Moderate, valuation-aware
Geographic exposure:

• U.S.-centric with global revenue exposure

Core sector themes:

• Payments & financial infrastructure
• Healthcare & diagnostics
• Enterprise software
• Premium global brands

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Summary

Fundsmith’s latest filing reinforces Terry Smith’s disciplined quality-first framework, while highlighting a willingness to harvest gains in mega-cap technology after periods of outsized performance. The sharp trims to Microsoft and Meta stand out as deliberate risk management rather than a change in fundamental view. At the same time, incremental additions to Waters and other high-ROIC businesses underscore continued confidence in durable, asset-light compounders.

Overall, this reflects portfolio optimization, not repositioning—Fundsmith remains firmly committed to owning a focused set of exceptional businesses and letting long-term economics do the heavy lifting.