Terry Smith defends decision to shun US tech stock Nvidia

Unlock Editors Digest for free

FT editor Roula Khalaf picks her favourite stories in this weekly newsletter.

Investment manager Terry Smith has defended his decision to shun US tech giant Nvidia after his fund paid the price for skepticism about the chipmaker's ability to continue growing at a rapid pace.

The Smiths Global Fund's returns lagged its benchmark in the first half of the year as it missed out on a rally in semiconductor stocks.

It shows the pitfalls facing fund managers who select stocks in anticipation of rising future profits and avoid companies like Nvidia because they question ambitious growth forecasts.

The $25 billion Fundsmith Equity portfolio, which focuses on growth stocks, includes holdings in some of the largest US technology companies Apple, Meta and Microsoft.

But Smith said in his semiannual letter to shareholders that he had chosen to avoid chipmaker Nvidia, which last month briefly became the world's most valuable company, surpassing $3 trillion.

Smith said his fund does not own any Nvidia companies because we have not yet been convinced that its prospects are as predictable as we would like.

The move also highlights problems with the inability to own the big tech stocks that dominate the U.S. stock market.

Nvidia, Microsoft, Amazon, Meta and Apple accounted for nearly 60% of the S&P 500's 14% gain in the first half of the year.

Smith said it was difficult to achieve outperformance in his fund because of its avoidance of Nvidia and its lack of ownership of other technology companies.

He added that the funds' stake in Apple remains low as we patiently wait for the stock price to reflect the company's current trading.

Last year, Smith sold his stake in online retailer Amazon, which the fund only began buying in 2021, telling investors he was concerned about a potential misallocation of capital.

In the six months to the end of June, Fundsmith Equity returned 9.3%, compared with 12.7% for the MSCI World Index in sterling terms.

The S&P 500 index returned 17% over the period in sterling terms, a quarter of which came from Nvidia, according to Smith.

Smith said a six-month return of more than 9% would normally be cause for celebration, but he highlighted the strong performance of the global index.

There is no doubt that as an active manager, if you do not own AI stocks, you are probably underperforming. [at the moment]said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management.

Smith said his top performing stocks during the period were Danish pharmaceutical company Novo Nordisk, Facebook owner Meta, Microsoft, Alphabet and US medical device company Stryker.

However, the fund's worst-performing stocks include beauty company LOral, pet health-care company Idexx, sportswear company Nike, spirits and wine maker Brown-Forman and software group Waters.

Sources 1/ https://Google.com/ 2/ https://www.ft.com/content/096c9205-69d9-4b0e-a791-b40ee0e37561 The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos