One of Terry Smith’s biggest backers has significantly slashed its holding in his flagship fund by £740m in the past two years, compounding a difficult period of outflows and poor performance for the star manager.

Jupiter Merlin has jettisoned close to 162 million shares in Fundsmith Equity since 2020, annual reports for the £6.1bn fund-of-fund range show, shaving close to three quarters off the value of its stake.