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Fundsmith, the London-based asset manager run by veteran stock picker Terry Smith, dumped roughly 40% of its Alphabet holdings during the second quarter of 2026. The sale amounted to approximately $634 million worth of GOOGL shares, according to the fund’s latest 13F filing.
That’s not a one-off trim. It’s the third consecutive quarter of significant selling in a position Smith first built in early 2022.
A pattern, not a pivot
The Q2 reduction involved roughly 1.18 million shares of GOOGL leaving Fundsmith’s books.
In Q4 2025, Fundsmith executed a roughly 44% cut to its Alphabet stake. In Q1 2026, it shaved off another 15%. Now another 40% is gone.
Despite all the selling, Alphabet still accounts for somewhere between 4.6% and 6.6% of Fundsmith’s total portfolio, meaning it remains among the fund’s more prominent holdings. Fundsmith’s overall portfolio sits at approximately $13.65 billion spread across 41 securities.
Why Smith is getting restless
Fundsmith’s portfolio turnover exceeded 50% in the first half of 2026. The sustained trimming coincides with a period where Fundsmith’s returns have reportedly lagged behind key benchmarks, prompting a more hands-on approach to portfolio construction.
Smith initially built the Alphabet position in early 2022, during a broader push into big-tech investments.
What Alphabet is dealing with
Alphabet is pouring massive capital expenditures into AI infrastructure. For a fund manager like Smith, whose entire framework revolves around return on capital employed and free cash flow generation, heavy capex cycles are uncomfortable.
Reading the portfolio tea leaves
Alphabet remaining a top holding even after three quarters of aggressive selling is itself notable. It suggests Smith hasn’t soured on the business entirely, just on the size of the bet he’s willing to make on it at current prices.
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