Fundsmith LLP Adds Netflix to Equity Fund Following Poor Returns

The investment management firm Fundsmith LLP added Netflix, Inc. to its Fundsmith Equity Fund, as disclosed in its second-quarter 2026 investor letter. The firm identified Netflix as a pioneer in subscription-based streaming, noting that the company's annual content budget exceeds $17 billion. Fundsmith LLP asserts that this spending, supported by a large subscriber base, creates a competitive moat that smaller rivals cannot afford to match without incurring losses.

Fundsmith LLP highlighted that Netflix currently captures nearly 8% of all U.S. television screen time. The firm sees future growth stemming from the company's advertising tier, which has 250 million monthly active users, as well as its crackdown on password sharing, entry into live sports, and expansion into emerging international markets.

This portfolio move coincides with a shift toward more active management for Fundsmith LLP. The firm reported a first-half 2026 return of -2.9%, which underperformed the MSCI World Index by 14.1 percentage points.