UK’s Warren Buffett ditches ‘do nothing’ strategy — Here’s what he did next

Smith’s original ‘Do nothing’ strategy advocates buying quality companies at reasonable prices and avoiding active management.

However, recent Form 13F filings with the SEC reveal that Smith has altered his strategy significantly. Institutional investment managers with holdings over $100 million must report quarterly on Form 13F to the US SEC.

Portfolio turnover increased to 51.8% in the first half of this year, driven by Smith’s strategy shift after several years of underperformance. He has sold off many old favorites and made significant new investments within a single quarter.

Here’s a look at Terry Smith’s Fundsmith Q2 portfolio as of June 30, and how it changed over the last five years.

The fund has shrunk significantly

In June 2021, Fundsmith’s US stock holdings were worth $36.09 billion, spread across 43 companies. By June 2026, that had fallen to roughly $13.65 billion across 41 companies, a drop of about 62%. The portfolio value had already slipped below $20 billion, down from $23 billion in Q2 2025, marking a significant decline after a prolonged period.

PayPal and Microsoft once ruled the roost

In June 2021, PayPal was Fundsmith’s single biggest holding at 9.9% of the portfolio, worth $3.58 billion. Microsoft was close behind at 9.0% ($3.26 billion). Neither stock appears in the fund’s top ranks today; PayPal has been sold out entirely, and Microsoft’s weight has slipped to around 4.4%, no longer a top-10 position.

Several 2021 favourites have vanished completely

Beyond PayPal, a whole bunch of stocks that were the mainstay of the 2021 portfolio are gone by 2026: Intuit (6.2% in 2021), Estée Lauder (6.0%), PepsiCo (4.1%), McCormick (4.4%), Nike (3.8%), Starbucks (3.3%), Johnson & Johnson (3.3%), Becton Dickinson (2.9%), and Brown-Forman (2.6%). Together, these eight stocks alone made up more than a third of the 2021 portfolio.

A new top five has emerged

The fund’s five biggest positions in June 2026 were Marriott International (7.0%), Stryker (6.7%), Waters Corp (6.2%), Visa (5.1%), and Uber (4.7%), together just under 30% of the portfolio. Of these, only Stryker, Waters, and Visa were meaningful holdings back in 2021, showing a thread of continuity even as most of the portfolio turned over.

Stryker is one of the world’s leading medical technology companies, while Waters is a global leader in life sciences and diagnostics.

Source: Dataroma

Thirteen new stocks

The scale of recent change is striking: in the quarter ending June 2026, Fundsmith added 13 new positions, including Uber, Mastercard, Netflix, Taiwan Semiconductor, GE Vernova, AppLovin, TJX Companies, Nextracker, Fair Isaac, InterDigital, O’Reilly Automotive, Veeva Systems, and Yum! Brands. This marks a shift toward faster-growing technology and consumer names, sitting alongside the fund’s traditional “quality compounder” holdings like Stryker and Waters.

Some names were sold entirely in the same quarter

At the same time, Fundsmith exited six positions in that quarter: Catalyst Pharmaceuticals, Home Depot, Mettler-Toledo, Otis Worldwide, Qualys, and Zoetis, on top of the much larger list of 2021-era names already gone by then.

Holdings are now more spread out

In June 2021, the top five stocks, PayPal, Microsoft, IDEXX, Intuit, and Facebook (now called Meta), made up about 38.8% of the portfolio. By June 2026, the top five made up just under 30%. With a similar number of total positions, 43 versus 41, this points to a slightly more evenly spread portfolio, rather than one concentrated in a handful of giants.

Source: Dataroma

What Buffett could do, but Smith couldn’t

In his semi-annual letter to shareholders, Smith argues that in a market increasingly dominated by passive and momentum-driven flows, where stocks like Snowflake and Dell have swung 30%-plus in a single day, buying quality companies during a rough patch and holding on, a technique he credits with working for Warren Buffett and for his own past purchase of Microsoft, now resembles catching a falling knife rather than value investing.

Smith draws a specific, pointed comparison to Buffett around this “buying quality companies during a glitch” strategy. He notes that Buffett famously used this technique to good effect, for instance, buying Berkshire Hathaway’s stake in American Express during the 1960s salad oil scandal, and that Fundsmith itself once did the same, buying Microsoft near the end of Steve Ballmer’s tenure as CEO.

But Smith makes an important distinction: he says that approach worked for Buffett because Buffett executed it “in a closed fund which he controlled, not an open-ended fund.”

The bigger picture

Five years of SEC filings show a fund in transition, smaller in size, still anchored by a few long-term holdings like Stryker, Waters, and Visa, but increasingly willing to rotate into new-economy names like Uber, Netflix, and Taiwan Semiconductor, while cutting loose most of its old blue-chip staples, including PayPal, Microsoft’s top billing, Intuit, and Estée Lauder.

For a fund built on the promise of ‘buying good companies and doing nothing,’ the last five years have actually involved quite a lot of doing something.

(All data sourced from Dataroma, US SEC EDGAR, Form 13F filings by Fundsmith, for periods ending June 30, 2021 and June 30, 2026.)

Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investment in foreign securities involves significant risks, including currency fluctuations, different financial reporting standards, and varying regulatory environments. The historical performance of US stocks is not a guarantee of future returns, and gains should not be viewed as an offer or solicitation to buy. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor. Financial Express is not responsible for any decisions made based on this information.