Brad Smith: "take more account of momentum"

Fund manager Terry Smith, whose long-term buy-and-hold philosophy earned him comparisons to Warren Buffett, is overhauling his approach after his flagship Fundsmith portfolio badly trailed a major global index for several years. Smith recently told clients he will now “take more account of momentum,” according to reports. Assets in the fund have plunged from £29 billion to £12 billion as investors lost confidence following weak returns since 2021. Smith blames a market driven by passive investing and artificial intelligence-fueled momentum, where yesterday’s winners keep rising regardless of fundamentals. The shift marks a radical departure for an investor who built his reputation on ignoring short-term trends. The situation highlights the challenge active fund managers face in deciding whether to adapt or hold steady, and forces their backers to repeatedly judge if a once-great strategist can reinvent himself.