Terry Smith has sold Fundsmith Equity’s stake in Brown-Forman, the US spirits group behind Jack Daniel’s, and started building a new position in Franco-Italian eyewear conglomerate EssilorLuxottica, according to the fund’s latest factsheet.
The disposal ends a holding that made up 1.29% of the £20bn portfolio at the start of the year and comes after a slump in Brown-Forman’s share price following disappointing quarterly results in May. The stock is down 22.8% year-to-date.
Performance of stock over the year to date
Source: Google Finance
Dan Coatsworth, investment analyst at AJ Bell, said the company had struggled with weaker demand amid rising prices and macroeconomic uncertainty. “Alcohol fans are balking at the price hikes triggered by tariffs and concerns around economic weakness have led people to seek cheaper alternatives as they watch their spending,” he said.
EssilorLuxottica, by contrast, has been gaining traction with fund managers. Daniel Avigad, who runs the TM Lansdowne European Special Situations fund, recently described it as “an industry powerhouse” and “a serious contender in Europe’s race to build a $1trn company” due to its combination of horizontal breadth and vertical integration. The firm holds a 30-40% market share across multiple levels of the eyewear value chain.
Fundsmith Equity has faced investor frustration after several years of lagging returns. Once a consistent top performer, the fund last ranked in the top quartile of the IA Global sector in 2019 but was in the third quartile for the past three full calendar years as well as 2025 to date.
Yet fund pickers told Trustnet investors in the fund should stick with it. The top contributors to performance in June included Meta, Microsoft, Nike, Texas Instruments and Alphabet; the largest detractors were Automatic Data Processing, Brown-Forman, Visa, Unilever and Procter & Gamble.