Core Insights - The Fundsmith Equity Fund reported a total return of +0.8% for 2025, underperforming the MSCI World Index which rose by +12.8% [4][7]. - Since inception on November 1, 2010, the Fund has outperformed the Index by 1.7% per annum with a Sortino Ratio of 0.75, indicating less downside volatility compared to the Index [7][8]. - The Fund is ranked as the third best performer in the Investment Association Global sector of 155 funds since inception, with a return 322 percentage points above the sector average [8]. Performance Analysis - The Fund's performance in 2025 was impacted by three main issues: index concentration, the growth of assets in index funds, and dollar weakness [9][10][36]. - The top ten stocks in the S&P 500 accounted for 39% of its value and contributed 50% of its total return in USD by the end of 2025, highlighting significant market concentration [13][10]. - The rise of index funds has led to a momentum strategy that disproportionately benefits large-cap stocks, making it challenging for active funds to compete without holding these stocks [17][20]. Market Dynamics - The US dollar weakened against the pound from approximately $1.25/GBP to $1.35/GBP during 2025, affecting the GBP value of the Fund as most companies are US-listed [36][40]. - The price of gold reached a 50-year high of $4,319 per ounce, reflecting concerns about dollar strength and market conditions [39]. Portfolio Composition - The Fund's portfolio turnover was low at 12.7%, with a total cost of investment (TCI) of 1.06%, indicating a focus on minimizing trading costs [70][72]. - The weighted average free cash flow yield of the portfolio increased from 3.1% to 3.7% during 2025, suggesting improved valuation relative to the S&P 500 [68][69]. Stock Contributions - The top five detractors from the Fund's performance included Novo Nordisk, Automatic Data Processing, Church & Dwight, Coloplast, and Fortinet, with Novo Nordisk facing significant challenges in its market [45][46]. - Conversely, the top contributors were Alphabet, IDEXX, Philip Morris, Meta Platforms, and Microsoft, with Alphabet making its first appearance among the top contributors [51][52]. Investment Strategy - The Fund maintains a strategy focused on investing in high-quality companies with predictable growth and adequate returns on capital, avoiding momentum-driven investments [41][42]. - The Fund's management emphasizes the importance of understanding the underlying business performance and maintaining a long-term perspective on investments [60][79].

Core Insights - Dividend Kings are companies that have increased their dividends annually for at least 50 years, with only 56 stocks achieving this status globally as of late 2025 [2] - Companies that raise dividends at a rate slower than inflation effectively reduce shareholder value, exemplified by Dover's recent dividend increase lagging behind inflation [3] - The best Dividend Kings not only keep pace with inflation but also provide substantial dividend hikes, with three notable examples increasing dividends by 10% annually [4] Company Highlights - **Automatic Data Processing (ADP)**: This company has achieved its 50th consecutive dividend increase in 2024, with a recent 10% increase and an overall 83% rise since 2021, significantly outpacing the 20% inflation during the same period [5] - ADP has returned $12 billion through share repurchases since 2015 while paying out $15 billion in dividends, maintaining a sustainable payout ratio of 61% [6] - The rarity of stocks achieving Dividend King status and consistently beating inflation highlights the strength of companies like ADP, which are expected to continue robust dividend increases due to strong fundamentals and market position [7]

Core Insights - Automatic Data Processing, Inc. (ADP) has a market capitalization of $102.3 billion and provides cloud-based human capital management (HCM) and business outsourcing solutions to help organizations manage their workforce efficiently [1] Financial Performance - ADP is expected to announce its second-quarter results on January 28, with analysts predicting an adjusted profit of $2.58 per share, reflecting a 9.8% increase from $2.35 per share in the same quarter last year [2] - For FY2026, ADP's adjusted EPS is projected to be $10.93, a 9.2% increase from $10.01 in 2025, and is expected to rise further to $11.95 per share in fiscal 2027, marking a 9.3% year-over-year growth [3] Stock Performance - Over the past 52 weeks, ADP's stock price has decreased by 9.4%, significantly underperforming the Technology Select Sector SPDR Fund's (XLK) 25.3% increase and the S&P 500 Index's 17.1% returns [4] - The underperformance is attributed to ADP's defensive, slower-growth profile during a period when investors have favored higher-beta, faster-growing technology and AI-linked stocks [5] Analyst Ratings - Analysts maintain a consensus "Hold" rating for ADP, with 17 analysts covering the stock, including two "Strong Buys," 13 "Holds," one "Moderate Sell," and one "Strong Sell" [6] - The mean price target for ADP is $290.93, indicating an 11.4% upside potential from current price levels [6]

Group 1 - The core economic data released this week indicates a partial recovery in the U.S. job market at the end of last year, but it has not fully overcome challenges. The Federal Reserve's interest rate futures pricing suggests the first rate cut could occur in the second quarter if the non-farm payroll data falls short of market expectations [1] - In December 2025, U.S. companies added 41,000 jobs, which is below the expected 48,000, indicating a weak labor market. Employee wage growth has also declined, with a year-on-year increase of 4.4%, matching the lowest level since the pandemic [2] - Job growth is concentrated in a few sectors, primarily healthcare, hospitality, and restaurants, highlighting the weakness of the labor market over the past year. The current labor market is characterized by low hiring and low layoffs, with no clear signs of a significant rebound in hiring [3] Group 2 - The U.S. Labor Department's JOLTS report shows a decline in job vacancies and hiring in November, with job openings dropping from nearly 7.5 million to about 7.1 million, and the hiring rate decreasing from 3.4% to 3.2% [4] - The upcoming non-farm payroll data, set to be released on January 9, is expected to be a key driver for market direction. In November, the U.S. non-farm payrolls increased by 64,000, but the unemployment rate rose to 4.6%, the highest in over four years [5] - The Federal Reserve's economic outlook for 2026 is generally optimistic, predicting accelerated economic growth and a stable unemployment rate, although concerns remain about the labor market's cooling [6] Group 3 - There are significant risks in the market, as inflation improvement has stalled and the labor market shows signs of weakness. The slowing job growth and declining wage pressure indicate a challenging economic environment [7] - The current labor market is not in an ideal state of equilibrium, and the "low hiring, low layoffs" model may not be sustainable. If consumer spending decreases, it could lead to a wave of layoffs [7] - The weakening labor market provides a rationale for the Federal Reserve to adjust its rate cut expectations, and if the non-farm report is too weak, it may signal more severe economic risks than currently anticipated [7]

Core Insights - The ADP National Employment Report for December 2025 indicates a moderate recovery in the U.S. job market, with private sector non-farm employment increasing by 41,000 jobs, reversing a decline of 29,000 jobs in November [1][3] - The report highlights that job growth is concentrated in the service sector, particularly in education, healthcare, leisure, and hospitality, while some sectors like professional services and information services experienced job losses [1][2] Employment Growth - Private sector job growth in December 2025 was primarily driven by small and medium-sized enterprises, with small businesses (1-49 employees) adding 9,000 jobs and medium-sized businesses (50-499 employees) adding 34,000 jobs, while large enterprises (500+ employees) only added 2,000 jobs [2] - Regional disparities are evident, with the South and Northeast adding 54,000 and 40,000 jobs respectively, while the West saw a significant decline of 61,000 jobs, particularly in the Pacific region [2] Wage Growth - Wage growth remains moderate, with average annual salary increases for employees staying in their current positions at 4.4%, while those changing jobs saw an increase of 6.6%, indicating a cooling labor market [2][3] Economic Indicators - The ADP report serves as a key forward-looking indicator of the U.S. private sector job market, based on anonymous weekly payroll data from over 26 million employees across more than 500,000 businesses, providing insights into employment dynamics across industries, company sizes, and regions [3] - Following the ADP report, U.S. Treasury yields continued to decline, with the 10-year Treasury yield dropping by 3.9 basis points to 4.14%, reflecting market reactions to the employment data [3][4] Market Expectations - The upcoming non-farm payroll data, expected to show an increase of 73,000 jobs for December 2025, is anticipated to confirm the trend of an orderly cooling labor market, which may reinforce expectations for the Federal Reserve to continue its rate-cutting cycle in the first half of the year [4]

Key Takeaways "Jobs Week" Kicks Off with ADP in December: 41KJob Changers Now No Longer Make Notably More than Job StayersJOLTS for November Come Out After the Opening BellWednesday, January 7th, 2026Today’s pre-market trading is mixed/flat at this hour, directly following the first report for “Jobs Week”: December private-sector payrolls from Automated Data Processing (ADP) are out this morning, slightly below estimates but rebounding to a positive print. Private-sector payrolls hit +41K last month, -7K fr ...

Core Insights - The ADP National Employment Report for December 2025 indicates a moderate recovery in the U.S. job market, with private sector non-farm employment increasing by 41,000 jobs, reversing a decline of 29,000 jobs in November [1][2] - The report highlights that job growth is concentrated in the service sector, particularly in education, healthcare, leisure, and hospitality, while some sectors like professional services and information services experienced job losses [1][2] Employment Growth - Private sector job growth in December 2025 was primarily driven by small and medium-sized enterprises, with small businesses (1-49 employees) adding 9,000 jobs and medium-sized businesses (50-499 employees) adding 34,000 jobs, while large businesses (500+ employees) only added 2,000 jobs [2] - The South and Northeast regions saw job increases of 54,000 and 40,000 respectively, while the West experienced a significant decline of 61,000 jobs, indicating regional disparities in employment growth [2] Wage Growth - Wage growth remains moderate, with average annual salary increases for employees staying in their current positions at 4.4%, while those changing jobs saw an increase of 6.6%, reflecting a slight uptick from the previous month [2] - The manufacturing sector saw a wage growth of 4.8%, and the financial services sector experienced a 5.2% increase, indicating stronger wage growth in these industries [2] Economic Indicators - The ADP report serves as a key forward-looking indicator of the U.S. private sector job market, based on anonymous weekly payroll data from over 26 million employees across more than 500,000 businesses, providing insights into employment dynamics across industries, company sizes, and regions [3] - Following the release of the ADP data, U.S. Treasury yields continued to decline, with the 10-year Treasury yield dropping by 3.9 basis points to 4.14%, while spot gold and silver prices fell by 1% and nearly 5% respectively [3] Market Expectations - The upcoming non-farm payroll data, expected to show an increase of 73,000 jobs for December 2025, will be closely watched, especially after previous data collection disruptions due to government shutdowns [4] - Analysts suggest that the ADP data, despite its softness, confirms a trend of "orderly cooling" in the labor market, which may reinforce expectations for the Federal Reserve to continue its rate-cutting cycle in the first half of the year [4]

Core Viewpoint - The ADP National Employment Report indicates a moderate recovery in the U.S. job market, with private sector non-farm employment increasing by 41,000 in December 2025, reversing a decline of 29,000 in November 2025, although it fell short of the Dow Jones consensus estimate of 48,000 [2][4]. Employment Growth - The employment growth is primarily concentrated in the service sector, with education and healthcare contributing 39,000 jobs, leisure and hospitality adding 24,000 jobs, and trade, transportation, and utilities increasing by 11,000 jobs. However, some sectors experienced job losses, including professional and business services, which decreased by 29,000 jobs, and the information services sector, which lost 12,000 jobs [2][3]. - The overall job market showed regional disparities, with the South and Northeast adding 54,000 and 40,000 jobs respectively, while the West saw a significant decline of 61,000 jobs, particularly in the Pacific region, which lost 59,000 jobs [2]. Business Size Impact - Job growth was predominantly driven by small and medium-sized enterprises, with medium-sized businesses (50-499 employees) adding 34,000 jobs and small businesses (1-49 employees) contributing 9,000 jobs. Large enterprises (500+ employees) only added 2,000 jobs [3][4]. Wage Growth - Wage growth remains moderate, with average annual salary increases for employees staying in their positions at 4.4%, unchanged from November. The manufacturing sector saw a 4.8% increase, while the financial services sector experienced a 5.2% increase [3][4]. - Employees who changed jobs saw a salary increase of 6.6%, up by 0.3 percentage points from the previous month, indicating a cooling labor market [4]. Economic Indicators - The ADP report serves as a key forward-looking indicator of the U.S. private sector job market, based on anonymous weekly salary data from over 26 million private sector employees. It provides insights into employment dynamics across industries, business sizes, and regions [4]. - Following the release of the ADP data, U.S. Treasury yields continued to decline, with the 10-year Treasury yield dropping by 3.9 basis points to 4.14%. Gold and silver prices also fell, with spot gold down by 1% and spot silver down nearly 5% [4][5].

1月7日，北京时间周三晚间，薪资处理公司ADP报告称，美国私营部门就业在去年12月新增岗位4.1万人，低于经济学家们4.8-5万人的共识预期区间，显示 美国就业市场在进入2026年前处于动能趋软的状态。 最新报告中，去年11月的ADP就业人数从-3.2万人上修至-2.9万人。在12月数据公布前的4个月里，"小非农"就业人数有3个月处于净减少的状态。 12月的ADP就业增量几乎完全来自服务业和规模低于500人的小型企业。 ADP的结论基于超过2600万名美国私营企业员工的工资单。虽然最新数据本身仍不及预期，但稍稍扭转了此前就业人数净下降的颓势。 其中，教育和医疗相关行业新增3.9万个岗位，休闲与酒店业增加2.4万个；贸易、运输和公共事业增加1.1万个，金融服务业则增加6000个。前述增长被部分 行业的下滑所抵消，专业和商业服务业减少2.9万个岗位，信息服务业减少1.2万个，制造业就业人数也下降5000个。 ADP首席经济学家内拉·理查森总结称："小型企业在经历了11月的就业下滑后，随着年末招聘回暖实现了恢复；而大型雇主则在收缩用工。" ADP报告同步显示，12月跳槽者的年薪增速提高至6.6%，前值为2021年以 ...

Private employers added 41,000 jobs in December, according to ADP’s latest data release on Wednesday, a modest rebound from November’s losses. But beneath the headline growth, the composition of hiring portrayed a far more fragile — and even frightening — picture of the underlying economy. Here's what to know. An ugly white-collar job contraction Job losses were heavily concentrated in sectors most closely tied to business confidence and corporate investment. Professional and business services lost 29, ...