See all posts by Edward Sheldon, CFA I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Image source: Getty Images Fundsmith manager Terry Smith is an investor I like to keep close eye on. Smith has delivered enormous returns for his investors over the last decade and, as a result, he’s regarded as one of the UK’s top money managers.One way I keep an eye on Fundsmith’s holdings is by looking at end-of-month factsheets. Another way however, is by studying the fund’s 13F filings. These are US regulatory filings large investment managers are required to complete every quarter. In these filings, managers list their long US equity positions.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Recently, I took a look at Fundsmith’s for the final quarter of 2020. Here are two stocks he’s been buying recently.Fundsmith is going defensiveOne significant US stock Smith added over Q4 was soft drink powerhouse PepsiCo (NYSE: PEP). The most recent 13F filing shows that, over the last quarter, Fundsmith increased its holding here by about 8%.I see this as a smart trade. PepsiCo is a defensive stock with a very impressive long-term dividend track record. This means it could potentially provide some portfolio protection if equity markets experience a correction in the near future.At the same time however, it has growth potential. Recently, it announced a joint venture with Beyond Meat to develop plant-based snacks. This is an area of the food industry that looks set for strong growth in the years ahead.PepsiCo’s full-year results for 2020 were solid. For the year, revenue was up 4.8%. Meanwhile, for the fourth quarter, revenue lifted 8.8%. As a result of this performance, the company announced a dividend increase of 5%. These results demonstrate the resilience of the business.PepsiCo stock isn’t without risks, of course. The increased focus on the negative health effects of soft drinks is one risk to consider. The forward-looking P/E ratio of 22 also doesn’t leave a huge margin of safety.But, all things considered, I think the risk/return proposition offered by the stock is attractive.A global leaderAnother stock Smith bought into substantially during the last quarter of 2020 was McCormick & Co (NYSE: MKC). 13F filings show Fundsmith increased its position in the stock by about 6% over the period.McCormick is a global food company that manufactures and distributes spices, seasoning mixes, and condiments. It owns a number of well-known brands including Schwartz herbs, Aeroplane jelly, and Frank’s RedHot sauce.I like this trade from Fundsmith as well. McCormick is capitalising on the sustained shift to cooking more at home and recent results were pretty good. For 2020, sales were up 5%, while cash flow from operations was up 10%. Looking ahead, the company said it expects sales to increase 7-9% in 2021.Like any stock, there are risks to the investment case. If consumer trends change, McCormick could underperform. The stock’s valuation (the forward-looking P/E ratio is about 30) also looks relatively high which means there’s some valuation risk.Overall however, I think this is a smart buy from Terry Smith, given the current economic environment. “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Enter Your Email Address 2 stocks Fundsmith has been buying I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Edward Sheldon, CFA | Thursday, 18th February, 2021 | More on: MKC PEP Edward Sheldon has a position in Fundsmith. The Motley Fool UK owns shares of and has recommended Beyond Meat, Inc. The Motley Fool UK has recommended McCormick. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Simply click below to discover how you can take advantage of this.