Terry Smith likes to buy and hold companies for a long time, but sometimes it makes sense to free up capital.
Despite trimming positions in Microsoft and Meta Platforms, they both remain sizable parts of the portfolio.
The latest addition is actually a previous holding that could grow to become a big piece of the portfolio.
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Terry Smith built his hedge fund Fundsmith with a simple three-step strategy: “Invest in good companies, don’t overpay, and do nothing.” It’s the simplicity, patience, and long-term thinking that has earned Smith the moniker, “The English Warren Buffett.”
But doing absolutely nothing is harder than it looks. Even Warren Buffett tweaks a few things in Berkshire Hathaway’s equity portfolio most quarters. And while Smith prefers to hold on to his top investments forever, sometimes he has a good reason to sell. Most of the time, though, he’s able to find another great business to buy at a fair price. Then comes the tough part of doing nothing.
The first quarter of 2025 pushed Smith to sell off portions of two of his largest holdings in the fund: Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT). With some of the capital raised from the sales, he reestablished a position in a stock that’s been trouncing the market in 2025.
Image source: Getty Images.
Smith is a big fan of letting his winners ride. In fact, he often makes light of the saying, “No one ever got poor by taking profits” in his letters to shareholders. “We continue to pursue a policy of trying to run our winners,” he wrote in his 2021 letter.
While he’s sold some of Fundsmith’s stake in Microsoft since he published those words, it’s remained a double-digit percentage worth of the fund’s publicly traded portfolio. Last quarter, however, Smith sold over half a billion dollars worth of the stock, about 13% of the fund’s shares. He took a similar approach with Meta, but sold off about 15% of the fund’s shares last quarter.
Both Meta and Microsoft remain the fund’s two largest holdings as of the end…
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