Fundsmith has set their sights on emerging markets with the launch of its Fundsmith Emerging Equities Trust.

Fundsmith has set its sights on emerging markets with the launch of its Fundsmith Emerging Equities Trust.

To cash in on these currently unpopular markets, FEET will implement strategies similar to its US and UK counterpart, the Fundsmith Equity Fund, chief executive officer Terry Smith said in an open letter to shareholders.

FEET will mirror its fondness for consumer stocks, not only for familiarity’s sake but to tap into the “established trend for the emergence of consumer classes in emerging markets which looks likely to last several decades”, according to Smith.

The firm has already shortlisted over 150 companies for FEET, including subsidiaries, associates or franchisees of companies they already research for the Fundsmith Equity Fund in an attempt to help with corporate governance issues in emerging markets.

Liquidity issues had previously put Fundsmith off emerging markets, a feature prominent in its Equity Fund.

“FEET will overcome the issue of combining an open-ended fund with stocks which have limited liquidity in the underlying investments since it will raise an initial fixed amount of capital. Thereafter, investor liquidity will be provided by trading in the trust’s shares, thus removing the costly need to liquidate or add to the portfolio on investor demand," said Smith.

The UK-based investment firm will launch FEET later this year.