As of Q2 2025, Terry Smith’s Fundsmith portfolio demonstrates continued strategic refinement with measured reductions across major holdings and selective new additions. The portfolio maintains its focus on high-quality businesses with sustainable competitive advantages while showing increased diversification across technology, healthcare, and specialty sectors. Notable this quarter is the significant expansion of financial technology exposure and continued trimming of the largest positions.
1
META
Meta Platforms Inc.
Reduced 8.11%
Portfolio: 11.44%
Shares: 3,568,752
Reported Price: $738.09
Value: $2,634,060,164
Meta Platforms remains the portfolio’s largest holding despite an 8.11% reduction (-315,044 shares) in Q2. The social media giant’s continued dominance in digital advertising and metaverse investments keeps it at the core of Fundsmith’s technology allocation, though the ongoing trimming suggests disciplined position management.
2
MSFT
Microsoft Corp.
Reduced 7.98%
Portfolio: 10.68%
Shares: 4,941,509
Reported Price: $497.41
Value: $2,457,955,992
Microsoft saw another significant reduction of 7.98% (-428,653 shares) in Q2, continuing the trend of trimming this core technology position. Despite the reduction, Microsoft’s leadership in cloud computing, AI integration, and enterprise software maintains its position as the second-largest holding.
3
SYK
Stryker Corp.
Reduced 7.74%
Portfolio: 8.04%
Shares: 4,677,007
Reported Price: $395.63
Value: $1,850,364,279
Stryker experienced a notable 7.74% reduction (-392,180 shares) but remains the third-largest position. The medical device and orthopedic equipment leader continues to benefit from demographic trends and healthcare infrastructure investments, maintaining its role as a core healthcare holding.
4
PM
Philip Morris International
Reduced 16.03%
Portfolio: 7.18%
Shares: 9,074,195
Reported Price: $182.13
Value: $1,652,683,135
Philip Morris saw the largest percentage reduction among top holdings at 16.03% (-1,731,697 shares), representing the most significant single-position trim in Q2. Despite this substantial reduction, the tobacco company’s transformation toward reduced-risk products and strong cash generation keeps it as a major consumer staples holding.
5
IDXX
IDEXX Laboratories
Minimal Change -0.34%
Portfolio: 6.15%
Shares: 2,639,289
Reported Price: $536.34
Value: $1,415,556,262
IDEXX Laboratories remained largely stable with only a minimal 0.34% reduction (-9,042 shares), demonstrating strong conviction in the veterinary diagnostics leader. The company’s resilient business model and growing pet healthcare spending continue to make it a defensive healthcare play.
6
V
Visa Inc.
Reduced 6.84%
Portfolio: 5.95%
Shares: 3,854,071
Reported Price: $355.05
Value: $1,368,387,909
Visa experienced a 6.84% reduction (-282,953 shares) but maintains its position as a core financial services holding. The global payments network continues to benefit from the secular shift to digital payments and growing e-commerce adoption worldwide.
7
ADP
Automatic Data Processing
Reduced 3.36%
Portfolio: 5.84%
Shares: 4,362,099
Reported Price: $308.40
Value: $1,345,271,332
ADP saw a moderate 3.36% reduction (-151,800 shares) while maintaining its position as a key business services holding. The company’s dominance in payroll processing and human resources solutions continues to provide stable, recurring revenue streams.
8
WAT
Waters Corp.
Minimal Change -0.13%
Portfolio: 5.47%
Shares: 3,608,407
Reported Price: $349.04
Value: $1,259,478,379
Waters Corporation remained virtually unchanged with only a 0.13% reduction (-4,790 shares), reflecting strong conviction in the analytical instruments specialist. The company’s essential role in pharmaceutical research and laboratory testing maintains its position as a core healthcare technology holding.
9
GOOGL
Alphabet Inc.
Reduced 0.58%
Portfolio: 5.21%
Shares: 6,803,454
Reported Price: $176.23
Value: $1,198,972,698
Alphabet saw minimal activity with just a 0.58% reduction (-39,759 shares), indicating continued conviction in Google’s parent company. The tech giant’s leadership in search, cloud computing, and artificial intelligence maintains its strategic importance in the portfolio.
10
MAR
Marriott International
Minimal Change -0.35%
Portfolio: 5.03%
Shares: 4,236,599
Reported Price: $273.21
Value: $1,157,481,213
Marriott International remained largely stable with only a 0.35% reduction (-14,961 shares), rounding out the top ten holdings. The global hospitality leader continues to provide exposure to the travel and leisure recovery as business and leisure travel normalize globally.
1
Systematic Position Trimming Across Core Holdings
Q2 2025 marked a quarter of broad-based position reductions, with the most significant cuts occurring in Philip Morris (-16.03%), followed by substantial trims to major technology holdings including Meta (-8.11%) and Microsoft (-7.98%). This systematic approach suggests disciplined rebalancing after strong performance, rather than sector rotation. The fact that these companies remain among the largest holdings demonstrates continued conviction while managing concentration risk and potentially realizing gains.
2
Dramatic Expansion in Financial Technology
The most notable addition was Intuit, which saw a remarkable 102.91% increase (+186,912 shares), growing to 1.26% of the portfolio. This substantial expansion into financial software, combined with new positions in Manhattan Associates (supply chain software) and other technology-enabled business solutions, indicates Terry Smith’s recognition of software businesses with high switching costs and recurring revenue models. These additions align perfectly with Fundsmith’s preference for companies with strong competitive moats.
3
Selective Growth in Specialty Healthcare and Technology
While most positions were trimmed, selective holdings saw meaningful increases. Zoetis continued its expansion with a 13.29% increase (+338,344 shares), reinforcing the animal health focus. Catalyst Pharmaceuticals grew by 25.93% (+557,812 shares), showing increased conviction in the specialty pharma space. New positions in NAPCO Security Technologies and Vertiv Holdings suggest exploration of niche technology leaders with specialized market positions.
14
INTU
Intuit Inc.
Increased 102.91%
Portfolio: 1.26%
Shares: 368,540
Value: $290,273,160
Intuit saw the most dramatic expansion in Q2 with a 102.91% increase (+186,912 shares). The company’s QuickBooks and TurboTax franchises represent exactly the type of high-switching-cost, recurring revenue businesses that align with Fundsmith’s investment philosophy.
25
CPRX
Catalyst Pharmaceuticals
Increased 25.93%
Portfolio: 0.26%
Shares: 2,709,086
Value: $58,787,166
Catalyst Pharmaceuticals expanded by 25.93% (+557,812 shares), showing increased conviction in this specialty pharmaceutical company focused on rare diseases. The growing position suggests Terry Smith sees significant potential in this niche healthcare player.
19
ZTS
Zoetis Inc.
Increased 13.29%
Portfolio: 1.95%
Shares: 2,884,831
Value: $449,889,394
Zoetis continued its upward trajectory with a 13.29% increase (+338,344 shares). The animal health leader’s consistent expansion in the portfolio reflects the durability of veterinary spending and the company’s strong market position in a consolidated industry.
32
MANH
Manhattan Associates
New Position
Portfolio: 0.25%
Shares: 288,332
Value: $56,936,920
Manhattan Associates represents a new position in supply chain software solutions. The company’s specialized focus on warehouse management and distribution technology aligns with the growing importance of logistics optimization across industries.
37
NSSC
NAPCO Security Technologies
New Position
Portfolio: 0.12%
Shares: 954,912
Value: $28,351,337
NAPCO Security Technologies is a new small position in specialized security solutions. The company’s focus on commercial and residential security systems represents another niche technology play with strong recurring revenue characteristics.
30
VRT
Vertiv Holdings
New Position
Portfolio: 0.40%
Shares: 724,923
Value: $93,087,362
Vertiv Holdings is a new addition focused on critical digital infrastructure. The company’s data center power and cooling solutions benefit from the massive expansion in cloud computing and data center construction globally.
Terry Smith’s Q2 2025 portfolio adjustments reveal a more nuanced approach to position management, with widespread trimming of existing holdings balanced against strategic expansion in high-conviction areas. The dramatic reduction in Philip Morris (-16.03%) and continued cuts to major technology positions like Meta (-8.11%) and Microsoft (-7.98%) suggest active profit-taking and risk management, while the remarkable 102.91% increase in Intuit demonstrates willingness to build meaningful positions in businesses that meet Fundsmith’s quality criteria.
The quarter’s theme appears to be diversification through selective expansion rather than wholesale sector rotation. New positions in specialized technology companies like Manhattan Associates, NAPCO Security, and Vertiv Holdings indicate an exploration of niche leaders with strong competitive positions. Combined with the continued expansion in Zoetis (+13.29%) and Catalyst Pharmaceuticals (+25.93%), these moves suggest Terry Smith is finding opportunities to enhance the portfolio’s quality while maintaining its focus on businesses with sustainable competitive advantages and predictable cash flows. The systematic approach to position sizing across the portfolio reinforces Fundsmith’s disciplined investment process, prioritizing risk management alongside the pursuit of exceptional long-term returns.
