"Tracking Terry Smith’s Fundsmith 13F Portfolio – Q3 2022 Update"
"Fundsmith’s 13F portfolio value decreased from $23.45B to $21.07B this quarter.They added Otis Worldwide while decreasing Intuit and PayPal Holdings.The top three positions are Microsoft, Philip Morris International, and Estee Lauder, and they add up to ~23% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Fundsmith’s 13F portfolio on a quarterly basis. It is based on their regulatory  filed on 11/14/2022. Please visit our  to get an idea of their investment philosophy and our last  for the fund’s moves during Q2 2022.This quarter, Fundsmith’s 13F portfolio value decreased ~10% from $23.45B to $21.07B. The number of holdings increased from 43 to 46. The top three holdings are at ~23% while the top five are close to ~35% of the 13F assets: Microsoft, Philip Morris International, Estee Lauder, Automatic Data Processing, and IDEXX Labs.Note: Their flagship Fundsmith Equity Fund (2010 inception) has returned 15.5% annualized compared to 11.6% for the MSCI World Index through 11/30/2022. However, they have underperformed the index substantially this year: Negative 15.1% vs Negative 2.8% for the MSCI World Index.New Stakes:Otis Worldwide (OTIS): OTIS is a ~2% of the portfolio stake established this quarter at prices between ~$64 and ~$82 and the stock currently trades at $78.31.Apple Inc. (AAPL), Idex Inc. (IDX), and Edwards Lifesciences (EW): These are very small (less than ~0.30% of the portfolio each) new stakes established during the quarter.Stake Disposals:Wingstop Inc. (WING): The minutely small 0.26% stake in WING was dropped this quarter.Stake Increases:Philip Morris International (PM): The 6.50% PM stake was established during the last decade through consistent buying every quarter. Pricing ranged between ~$60 and ~$120. Q1 2022 saw a ~20% selling at prices between ~$89 and ~$112. The stock is now at ~$101. Last two quarters have seen only minor adjustments.Estee Lauder (EL): The top three 6.10% EL stake was established in 2016 at prices between ~$75 and ~$95. 2018 saw a two-thirds stake increase at prices between ~$125 and ~$158. Since then, the activity had been minor. There was a ~20% selling in Q1 2022 at prices between ~$250 and ~$372. The stock currently trades at ~$248. Last two quarters have seen minor increases.Automatic Data Processing (ADP): The 2013-19 timeframe saw consistent buying in ADP at prices between ~$52 and ~$173. Q1 2020 saw a ~40% selling at prices between ~$112 and ~$181 while in the next quarter there was a ~70% increase at prices between ~$128 and ~$160. Since then, the activity had been minor. Q1 2022 saw a ~22% reduction at prices between ~$196 and ~$245. The stock is now at ~$239 and the stake is at ~6% of the portfolio. Last two quarters saw a marginal increase.IDEXX Labs (IDXX): IDXX is a 5.60% of the portfolio position established during the 2015-16 timeframe at prices between ~$63 and ~$120. Since then, the position had remained relatively steady although adjustments were made in most quarters. There was a ~15% trimming in Q1 2022 at prices between ~$466 and ~$631. The stock currently trades at ~$408. There was a marginal increase in the last two quarters.PepsiCo (PEP): The 5.54% PEP stake was built over the last decade through consistent buying during most quarters. The buying happened at prices between ~$65 and ~$170. There was a ~25% reduction in Q1 2022 at prices between ~$154 and ~$176. The stock is now at ~$181. Last quarter saw a ~9% trimming while this quarter there was a marginal increase.McCormick Inc. (MKC): MKC is a large 5.25% of the portfolio position built during the 2018-19 timeframe at prices between ~$50 and ~$86. The time period since had also seen minor buying. There was a ~18% reduction in Q1 2022 at prices between ~$92 and ~$104. The stock currently trades at ~$83. Last two quarters saw a marginal increase.Note: they have a ~6.2% ownership stake in the business.Visa Inc. (V): Visa is a 4.75% of the portfolio position established over the last decade through consistent buying in most years. The build-up happened at prices between ~$30 and ~$245. Q1 2022 saw a ~18% selling at prices between ~$191 and ~$235. The stock currently trades at ~$208.  Last two quarters saw a marginal increase.Waters Corp (WAT): WAT is a 4.73% of the portfolio stake built during the 2015-2017 timeframe at prices between ~$115 and ~$200. Next two years also saw incremental buying. There was a ~23% selling in H1 2020 at prices between ~$175 and ~$240. Since then, the activity had been minor. There was a ~18% reduction in Q1 2022 at prices between ~$307 and ~$365. The stock currently trades at ~$343. There was a marginal increase in the last two quarters.Note: they have a ~6% ownership stake in Waters Corp.Brown Forman (BF.B): BF.B is a 3.86% of the portfolio stake built in 2019 at prices between ~$45 and ~$68. 2021 saw a ~50% stake increase at prices between ~$67 and ~$81 while in Q1 2022 there was a ~28% selling at prices between ~$62 and ~$72. The stock is now at $65.68.  There was a marginal increase in the last two quarters.Amazon.com Inc. (AMZN): The 3.64% AMZN stake was built in H2 2021 at prices between ~$160 and ~$186. Next quarter saw a ~20% selling at prices between ~$136 and ~$170. The stock is now at ~$84. There was a marginal increase in the las two quarters.Meta Platforms (META): The 3.53% META stake was built in 2018 at prices between ~$125 and ~$210. The stake had remained steady since although adjustments were made in most quarters. There was a ~20% reduction in Q1 2022 at prices between ~$187 and ~$339. The stock currently trades at ~$120. Last two quarters saw a marginal increase.Alphabet Inc. (GOOG) (GOOGL): GOOG is a 3.47% of the portfolio position purchased in Q4 2021 at prices between ~$133 and ~$151. There was a ~9% trimming next quarter. The stock currently trades well below their purchase price range at ~$88. Last two quarters saw a marginal increase.Mettler-Toledo (MTD): The 2.89% MTD stake was purchased over the last two quarters at prices between ~$1098 and ~$1675 and the stock currently trades at ~$1445. This quarter saw a minor ~4% further increase.Church & Dwight Inc. (CHD): The 2.87% CHD position was built during the three quarters through Q2 2021 at prices between ~$72 and ~$93. There was a ~28% selling in Q1 2022 at prices between ~$95 and ~$104. The stock currently trades at $80.61. There was a marginal increase in the last two quarters.Adobe Inc. (ADBE): ADBE is a 2.76% of the portfolio position purchased in Q1 2022 at prices between ~$412 and ~$564 and the stock currently trades below that range at ~$337. Last quarter saw a ~10% stake increase and that was followed with a marginal increase this quarter.Nike Inc. (NKE): The 2.66% NKE stake was built in H1 2020 at prices between ~$67 and ~$105. There had been minor buying in most quarters since. Q1 2022 saw a ~23% reduction at prices between ~$118 and ~$166. The stock is now at ~$117. Last two quarters saw a marginal increase.Cognex Inc. (CGNX), Equifax Inc. (EFX), Fortinet Inc. (FTNT), Home Depot (HD), IPG Photonics (IPGP), Masimo Inc. (MASI), MSCI Inc. (MSCI), Johnson & Johnson (JNJ), Procter & Gamble (PG), Sabre Corp (SABR), Verisk Analytics (VRSK), Verisign Inc. (VRSN), and Zoetis Inc. (ZTS): These very small (less than ~0.60% of the portfolio each) positions were increased this quarter.Note: they have a ~6% ownership stake in Sabre Corp.Stake Decreases:Microsoft Corp (MSFT): MSFT is currently the largest position at ~10% of the portfolio. The stake was built during the five-year period from 2013 to 2018 at prices between ~$27 and ~$115. Since then, the activity had been minor. There was a ~23% selling in Q1 2022 at prices between ~$276 and ~$335. The stock currently trades at ~$240. This quarter saw a ~7% trimming.Stryker Corp (SYK): SYK is a 5.13% of the portfolio position purchased during the last decade through consistent buying every quarter at prices between ~$50 and ~$275. There was a ~20% reduction in Q1 2022 at prices between ~$245 and ~$278. The stock currently trades at ~$245. Last quarter saw a minor ~4% increase while this quarter there was similar trimming.Intuit Inc. (INTU): INTU is a ~3% of the portfolio stake built during the 2017-18 timeframe at prices between ~$115 and ~$225. Since then, the position had remained relatively steady although adjustments were made in most quarters. Last four quarters have seen a ~63% reduction at prices between ~$353 and ~$692. The stock currently trades at ~$389.PayPal Holdings (PYPL): The bulk of the 2.29% PYPL position was built in the 2015-16 timeframe at prices between ~$32 and ~$44. The next two years saw incremental buying and since then the position had been kept relatively steady. There was a ~57% reduction in the last three quarters at prices between ~$70 and ~$195. The stock currently trades at ~$71.Ansys Inc. (ANSS), Paycom Software (PAYC), Qualys Inc. (QLYS), and Rollins Inc. (ROL): These very small (less than ~0.50% of the portfolio each) positions were decreased this quarter.Kept Steady:Genpact Ltd. (G), Mercadolibre (MELI), Taiwan Semi (TSM), WNS Holdings (WNS), and XP Class A: These minutely small (less than ~0.10% of the portfolio each) positions were kept steady this quarter.The spreadsheet below highlights changes to Fundsmith’s 13F holdings in Q3 2022:Source: John Vincent. Data constructed from Fundsmith’s 13F filings for Q2 2022 and Q3 2022.July 2022 Semi Annual Letter: Performance: 15.8% annualized compared to 11.2% for MSCI World.Regulatory filings from 6/22/2022 to 8/25/2022: None."