Smithson (SSON) £16.85

Loss to date: 12%

Original entry point: Buy at £19.15, 2 September 2021

The quality-focused investing style behind Smithson (SSON) has gone out of fashion in recent months and left our positive call on the investment trust from the Terry Smith stable looking a bit sorry.

However, Smithson should be judged over a longer timeframe so we’re not too alarmed by the recent weakness.

The trust itself has taken advantage of opportunities created by the recent market weakness, taking a stake in Italian luxury goods firm Moncler.

In his annual letter to shareholders manager Simon Barnard says ‘patience is one of our competitive advantages’ as he noted it would not be possible for the portfolio to outperform significantly every year and reiterated his commitment to the strategy underpinning the fund.

‘We are confident that, as well as making constant progress, a high-quality company, if it trips during the storm, will rise again and keep going. Low quality, value companies on the other hand, may never get back up,’ he added.

Smithson achieved an 18.9% total return at the net asset value level, and 18.1% at the share price level. That compared with a 17.8% return from the MSCI World SMID index.

DISCLAIMER: Editor Daniel Coatsworth owns shares in Smithson

SHARES SAYS: Use the share price weakness as an opportunity to buy more shares. [TS]

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