Will Scottish Mortgage, Terry Smith and Nick Train return to form?

Three prominent retail investment funds—Scottish Mortgage, Fundsmith Equity, and Lindsell Train UK Equity—have faced significant performance challenges over the past three years. Scottish Mortgage, led by Tom Slater, struggled as rising interest rates pressured its innovation-heavy portfolio, though strategic share buybacks and exposure to AI leaders like NVIDIA are currently aiding recovery. Terry Smith’s Fundsmith Equity underperformed by remaining underweight in the "Magnificent Seven" tech giants, yet maintains its long-term focus on high-quality, valuation-conscious businesses. Meanwhile, Nick Train’s UK Equity fund faced headwinds from both a broader market shift away from his concentrated, brand-focused style and declining profits in core holdings like Burberry and Diageo. While these managers remain bullish on their respective strategies, the discussion highlights the necessity of viewing these adventurous, concentrated funds as satellite positions rather than core portfolio building blocks.