One man made a name for himself early on when he issued a “Sell” recommendation for Barclays PLC… his employer.

He then moved on to another investment bank and published an exposé on the poor accounting practices of many of the United Kingdom’s largest companies… At his new firm, this got him fired.

So how in the world did this man go from being fired by UBS AG to becoming a well-known billionaire?

He used a simple 3-step strategy.

Today I will share with you just what that strategy is how he became well known as the English version of Warren Buffett in the UK. And why our investment strategy at Wide Moat Research is even better.

The English Version of Warren Buffett

So who is this English billionaire and what has been his strategy to grow his wealth?

Terry Smith, founder of the UK’s most popular open-ended actively managed investment fund, the Fundsmith Equity Fund.

Since 2010, Smith’s fund has produced annualized gains of 15.6%.

This compares favorably to the MSCI World Stock Market Index, which compounded 11.3% annually over this same time-period.

The difference between 15% and 11% might not seem like much at first, but over a 13-year period that extra 4% per year adds up.

Since its inception date, the Fundsmith Portfolio is up by 527.1%.

In comparison, the MSCI World Index is up by 288.5% since 2010.

The power of compound interest is a beautiful thing, isn’t it?

So what investment strategy helped Smith outperform the MSCI World Index by 240%?

The same simple 3-step investment strategy we use here at Wide Moat Research.

• Buy good companies

• Don’t overpay

• Do nothing

Seems simple enough. But does it really work?

The 3-Step Investment Strategy in Action

Terry Smith began buying Microsoft (MSFT) for his Fundsmith Equity Fund during the first quarter of 2013.

Shares were trading for less than $30 back then.

Today, Microsoft shares are worth nearly $340.

And during his fund’s most recent reporting period, Smith was still adding to that position.

At the end of the first quarter, Smith’s MSFT cost basis was $122.51.

After averaging up his cost basis for years, Fundsmith’s Microsoft position is still sitting on 178% gains.

When it comes to owning blue-chip stocks, as the old saying goes, “If it ain’t broke, don’t fix it.”

In other words, buy good companies, don’t overpay, and do nothing. Let them work for you.

The Fundsmith Equity Fund portfolio currently holds 41 stocks as of March 31, 2023.

Seven of those positions are up triple digits.

And 18 of them are up double digits.

The market has been on a strong rally since the end of Q1. When Fundsmith’s Q2 13-f report comes out, these results will look even stronger.

Wide Moat Research’s Strategy vs. Terry Smith’s

So how does this compare to our strategy at Wide Moat Research?

There is one way we differ from Smith’s strategy.

In addition to simply buying good companies, not overpaying, and doing nothing… We have one caveat.

At Wide Moat Research we build portfolios that produce a reliably increasing passive income stream.

Not all of Smith’s investments pay dividends. Ours do.

This makes “doing nothing” much more profitable…

The historic yield of the Fundsmith Equity Fund’s 41 stocks is 1.09%.

The average dividend yield of the 31 stock picks that we’ve made across all four Intelligent Income Investor portfolios is 3.08%.

With our strategy you get paid nearly 2% more while you sit on your hands.

The actual Warren Buffett is famous for saying, “If you don’t find a way to make money while you sleep, you will work until you die.”

Well, at Wide Moat Research we sleep well at night (SWAN) knowing that the blue-chip companies we own in our Intelligent Income Investor service are all working 24/7. They are minting money and generously rewarding us for our patience – with dividends.

Currently, we have a “Hold” rating on Microsoft and are up 42% since June of 2022.

But, there are nearly two dozen “Buy” recommendations within our Intelligent Income Investor portfolios right now.

And we have an 81% win-rate across all of our picks.

To see our latest “Buy” recommendation, click here.

Happy SWAN investing,

Brad Thomas
Editor, Intelligent Income Daily