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Stockpicker’s flagship fund failed to beat cash returns in 2025

Terry Smith, one of the UK’s most renowned stockpickers, failed to beat returns on cash last year and told investors in his flagship fund that outperforming the market “was challenging once again in 2025 “.

In his annual letter to investors in Fundsmith Equity on Thursday, Smith said that “outperforming the market or even making a positive return is not something you should expect from our fund in every year”.

The £16bn fund delivered a total return of 0.8 per cent in 2025, underperforming the MSCI World index’s 12.8 per cent and the 4.2 per cent return from cash. The average rival fund delivered 10.8 per cent, according to Investment Association categorisation cited by Smith in the letter.

However, over the longer term, Smith noted that the fund, launched in 2010, has delivered 1.7 per cent a year more than the index. Fundsmith Equity invests in so-called quality growth stocks globally for long periods.

Fundsmith Equity charges a 1.04 per cent annual management fee on investments.

Smith said that he was “not seeking to ‘blame’ anyone or anything for our fund’s relative performance” but noted that the dominance of the so-called Magnificent Seven — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — was one of the main issues.

“It was difficult to even perform in line with the index in recent years if you did not own most of these stocks in their market weightings, and we would not do so even if we became convinced that they were all good companies of the sort we seek to invest in, which we are not,” Smith said.

Fundsmith Equity holds Alphabet, Meta and Microsoft, which were among the top five contributors to performance last year.

Smith also pointed to the surging popularity of low-cost index funds, noting that the huge flows of money into these products “gives added momentum” to the large US tech stocks.

“The increasing proportion of equities held by index funds are invested without any regard to the quality or valuation of the shares bought, which produces dangerous distortions,” he added.

The US dollar’s weakness was also a drag on the fund’s performance, as the majority of the companies in which the fund invests are in the US, where they derive a lot of their revenue.

Smith said that he would not buy shares in companies “simply because they are large and dominate the index weightings and performance unless we become convinced that they are good businesses of the sort we wish to own, which have long-term relatively predictable sources of growth and more than adequate returns on the capital they invest”.

Novo Nordisk, the Danish pharmaceutical company that makes the Wegovy weight-loss drug, was among the worst-performing stocks for Smith’s fund last year, along with US company Automatic Data Processing, consumer staples business Church & Dwight, Danish medical company Coloplast and cyber security firm Fortinet.

NSO Group, one of the most well-known and controversial makers of government spyware, released a new transparency report on Wednesday, as the company enters what it described as “a new phase of accountability.”

But the report, unlike NSO’s previous annual disclosures, lacks details about how many customers the company rejected, investigated, suspended, or terminated due to human rights abuses involving its surveillance tools. While the report contains promises to respect human rights and have controls to demand its customers do the same, the report provides no concrete evidence supporting either.

Experts and critics who have followed NSO and the spyware market for years believe the report is part of an effort and campaign by the company to get the U.S. government to remove the company from a blocklist — technically called the Entity List — as it hopes to enter the U.S. market with new financial backers and executives at the helm.

Last year, a group of U.S. investors acquired the company, and since then, NSO has been undergoing a transition that included high-profile personnel changes: former Trump official David Friedman was appointed the new executive chairman; CEO Yaron Shohat stepped down; and Omri Lavie, the last remaining founder who was still involved in the company, also left, as Israeli newspaper Haaretz reported.

“When NSO’s products are in the right hands within the right countries, the world is a far safer place. That will always be our overriding mission,” Friedman wrote in the report, which does not mention any country where NSO operates.

Natalia Krapiva, the senior tech-legal counsel at Access Now, a digital rights organization that investigates spyware abuses, told TechCrunch: “NSO is clearly on a campaign to get removed from the U.S. Entity List and one of the key things they need to show is that they have dramatically changed as a company since they were listed.”

“Changing the leadership is one part and this transparency report is another,” said Krapiva.

“However, we have seen this before with NSO and other spyware companies over the years where they change names and leadership and publish empty transparency or ethics reports but the abuses continue.”

Ever since the Biden administration added NSO to the Entity List, the company has lobbied to have its restrictions lifted. After President Donald Trump took office again last year, NSO intensified these efforts. But, as of May last year, NSO had failed to sway the new administration.

In late December, the Trump administration lifted sanctions against three executives tied to the Intellexa spyware consortium, in what some saw as a sign of a shift in the administration’s attitude toward spyware makers.

This year’s transparency report, which covers 2025, has fewer details than reports from previous years.

In an earlier transparency report covering 2024, for example, NSO said it opened three investigations of potential misuse. Without naming the customers, the company said it cut ties with one, and imposed on another customer “alternative remediation measures,” including mandating human rights training, monitoring the customer activities, and requesting more information about how the customer uses the system. NSO did not provide any information about the third investigation.

NSO also said that during 2024, the company rejected more than $20 million “in new business opportunities due to human rights concerns.”

In the transparency report published the prior year, covering 2022 and 2023, NSO said it suspended or terminated six government customers, without naming them, claiming these actions resulted in a revenue loss of $57 million.

In 2021, NSO said it had “disconnected” the systems of five customers since 2016 following an investigation of misuse, resulting in more than $100 million in “estimated loss of revenue,” and it also said that it “discontinued engagements” with five customers due to “concerns regarding human rights.”

NSO’s newest transparency report does not include the total number of customers NSO has, statistics that have been consistently present in previous reports.

TechCrunch asked NSO spokesperson Gil Lanier to provide similar statistics and figures, but did not receive answers by press time.

John Scott-Railton, a senior researcher at The Citizen Lab, a human rights organization that has investigated spyware abuses for more than a decade, criticized NSO.

“I was expecting information, numbers,” Scott-Railton told TechCrunch. “Nothing in this document allows outsiders to verify NSO’s claims, which is business as usual from a company that has a decade-long history of making claims that later turned out to be misrepresentation.”

As of December 31, 2025, GenSight Biologics' cash and cash equivalents totaled €2.4 million, up from €0.6 million as of September 30. This increase reflects the partial funds from the €2.9 million capital increase on December 26, which were received prior to the end of the year.

On January 7, 2026, the company received the remaining proceeds from the December fundraising. After repaying €0.7 million of the principal on the convertible bonds held by Heights Capital, GenSight Biologics' cash and cash equivalents totaled €2.9 million.

The company has sufficient net working capital to meet its obligations through February 2026. Revenues from the compassionate access programs in France and Israel should then at a minimum ensure the Company's operational continuity through 2026. Beyond this baseline, the Company will continue its funding operations, on a dilutive and non-dilutive basis, to further extend the cash runway and in particular to finance the RECOVER Phase III trial.

The GS010 manufacturing process, which was transferred to the Company’s new CDMO, is now locked at the CDMO. Final confirmation of the successful technology transfer will be obtained from an engineering run scheduled for Q1 2026.

The REVISE Study, approved by the French agency ANSM in December 2025, has now received all final approvals. The study is on track to begin in January 2026.Following approval of individual patient early access treatments by the ANSM and Israeli Ministry of Health in December 2025, the Company is working to fulfill the administrative requirements for proceeding with the treatments. The Company expects to begin receiving payments for early access treatments in Q1 2026.

The Company’s primary strategic focus remains on preparing for the start of the RECOVER Phase III study in H2 2026, while pursuing opportunities to out-license GS010 in markets outside the USA and Europe and exploring paid Early Access Programs worldwide

The threat of a steep new wealth tax in California has reportedly prompted at least six billionaires including Larry Page and Peter Thiel to cut their ties with the state — and as many as 20 others could be heading for the exits.

The half-dozen billionaires made their moves before New Year’s Day — the cutoff date to avoid a potential one-time tax of 5% on fortunes exceeding $1 billion — which California residents will vote on in November, according to Bloomberg News.

David Lesperance, a tax adviser who specializes in relocating ultra-wealthy clients out of high-tax jurisdictions, told the outlet he personally helped four billionaires end their California residency before the proposal’s Jan. 1 cutoff date.

Divesh Makan, co-founder of Silicon Valley investment firm ICONIQ Capital and a wealth manager for some of the tech industry’s richest figures, said he knows of as many as five families that have already left the state.

Makan told Bloomberg he expects another 15 to 20 billionaire families to depart if the tax is approved by voters — a significant portion of California’s roughly 200 billionaires.

Google co-founder Page has quietly shifted his base to Florida after snapping up roughly $173 million worth of waterfront property in Miami’s Coconut Grove.

He bought a $101.5 million estate in December, followed days later by a $71.9 million mansion less than a mile away. The moves coincided with the formation of Florida-based entities tied to his family office.

Page officially cut ties between California and most of his assets ahead of the Jan. 1 deadline, according to Business Insider.

Thiel, the billionaire PayPal co-founder and prominent conservative donor, has also deepened his Florida footprint.

Thiel, who has long criticized wealth taxes, announced on Dec. 31 that his investment firm, Thiel Capital, had opened a Miami office. He has already registered to vote in Florida and has been spending more time outside California, even as he still maintains a home in Los Angeles.

The Post has sought comment from Page and Thiel.

David Sacks, a billionaire venture capitalist and co-founder of Craft Ventures, announced on the final day of 2025 that his firm had opened an office in Austin, Texas.

Sacks, who previously lived in San Francisco, relocated earlier in December, timing the move just ahead of the proposed residency cutoff.

His announcement did not mention the wealth tax, though it came as chatter around the ballot initiative grew louder.

Others are openly weighing exits. Sergey Brin, Google’s other co-founder, has been reported by real estate and industry sources to be in discussions to buy a waterfront home in the Miami area, though no deal has been confirmed.

Tech investor Chamath Palihapitiya has publicly said he is giving “serious consideration” to moving to Texas, warning that the tax could drive entrepreneurs and capital out of California.

Not every billionaire is bolting.

Nvidia CEO Jensen Huang said this week that he has no plans to leave Silicon Valley and is “perfectly fine” paying the tax if it becomes law — a stance the union backers of the measure have seized on as evidence the exodus is overstated.

Real estate developer John Sobrato has also said he is staying put, though he expects the proposal to ultimately fail at the ballot box.

Backers of the ballot initiative argue the tax is a necessary response to a looming fiscal crisis, pointing to a projected $190 billion shortfall in funding for Medi-Cal over the next decade after federal healthcare cuts.

The bulk of the proceeds from the tax, championed by the Service Employees International Union-United Healthcare Workers West, would be earmarked for healthcare, education and food assistance programs.

Supporters say the levy targets a narrow group whose wealth has surged in recent years and argue that it would have little impact on billionaires’ lifestyles while generating tens of billions of dollars for public services.

They also point to other states where higher taxes on the wealthy have not led to sustained exits.

“The state forgets that the top 1% pays nearly half of the income tax,” William Stern, founder of Cardiff, told The Post on Thursday.

“If you chase the ‘golden goose’ out of the state with a wealth tax, who pays for the lights? This isn’t a political debate — it’s a math problem.”

Stern warned that if the tax base leaves, “the burden shifts to the middle class.”

“We are watching a state commit economic suicide by trying to tax money that hasn’t even been made yet.”

Advisers who work with the ultra-rich say the mobility of billionaires is precisely what makes the proposal risky.

In the first week of the island becoming a Special Customs Supervision Zone, duty-free operators reported a 54.9 percent increase in sales, with gold jewelry, premium cosmetics, and luxury goods among the top-selling

LONDON — The luxury retail sector in China‘s duty-free promised land, Hainan Island — which officially became a Special Customs Supervision Zone on Dec. 18 — reported encouraging figures in the first few weeks after a slew of beneficial policies kicked in that were designed to stimulate high-end consumption.

These included allowing zero tariffs on many goods entering the province.

According to Haikou Customs, offshore duty-free shopping turnover reached 1.1 billion renminbi, or $157 million, in the first week that the island became a free-trade zone, up 54.9 percent year-on-year. Visitors totaled 165,000 in the period, up 34.1 percent.

At the top shopping mall, CDF Sanya International Duty Free Shopping Complex — which offers a comprehensive range of luxury brands including Gucci, Cartier, Prada, De Beers, and Brunello Cucinelli — sales and foot traffic during the first seven days grew over 80 percent and over 60 percent, respectively, year-over-year, fueled by promotional incentives.

Gold jewelry, which is priced 180 to 300 renminbi per gram lower than in mainland China; electronics; premium cosmetics, and luxury goods have been among the top-selling categories.

According to Moodie Davitt, gold retailers, including Chow Tai Fook and Luk Fook, each recorded growth exceeding 300 percent following the Hainan Free Trade Port’s island-wide customs closure.

The retail resurgence continued into the new year. Haikou Customs said offshore duty-free sales reached 712 million renminbi, or $101.3 million, during the three-day national holiday between Jan. 1 and 3, up 128.9 percent year-on-year.

In Sanya, China National Service Corporation reported a 183 percent jump in sales and a 109 percent increase in footfall at its branch in the coastal city in the same period.

Since raising the annual tax-free shopping quota from 30,000 renminbi to 100,000 renminbi per person in July 2020, the tropical island on the southern tip of China has been on a rollercoaster ride with the duty-free retail sector.

Following a boom brought by pent-up demand during the COVID-19 era, the island’s duty-free sales in 2024 dropped 29.3 percent due to a crackdown on daigou [surrogate shopping], the return of international travel, and overall weak consumer confidence in mainland China.

In the long run, according to a report from KPMG, Hainan’s travel retail market is poised for development and is expected to become an important global hub, attracting high-quality customers from mainland China, as well as those from Malaysia, Thailand, South Korea, Vietnam, Australia, and Russia.

“From a market perspective, as China continues to open up its tourism market and the global tourism market continues to expand, Hainan’s travel retail industry is reaching a broader range of consumers from around the world,” the report said. “The province will strive to gain a more important role in the global travel retail market by attracting high-quality domestic customers and pleasing consumers who choose the island over overseas destinations.”

Case in point: Hainan authorities told local media that the provincial capital Haikou and the top leisure and shopping destination Sanya recorded China’s fastest growth in inbound flight bookings last Thursday, rising more than 300 percent and 500 percent, respectively.

Later in the year, the island’s duty-free sector is set to heat up even more when DFS, the LVMH Moët Hennessy Louis Vuitton-owned travel retail operator, unveils its first “seven-star” luxury retail and entertainment destination in the region.

DFS Yalong Bay will stretch over 1.38 million square feet and carry more than 1,000 luxury brands, including those from LVMH. The site will also boast immersive concepts spanning categories such as fashion and apparel, beauty and fragrance, watches and jewelry, wine and spirits, fine dining, and food and beverage.

Swire Properties in 2026 is also expected to unveil part of its large-scale, 2.1 million-square-foot, duty-free retail complex in Sanya’s Haitang Bay, in partnership with China Tourism Group.

The new project will become the third segment of the Sanya International Duty-Free Complex. A network of bridges will connect it to phases I and II of the project, which opened in 2014 and 2020, respectively.