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Blue Whale: Why I ditched Facebook and where I’m investing

Blue Whale manager Stephen Yiu on the INVESTING SHOW: Why I ditched Facebook for better and more reliable growth opportunities

The Blue Whale Growth fund has proved a hit with investors since its launch almost five years ago, richly rewarding them with an 82 per cent return.

Backed by investing platform founder Peter Hargreaves, the fund managed by Stephen Yiu has targeted a relatively tight portfolio of 25 of what he sees as the world’s best growth companies. 

His stock picking has delivered an average 14.3 per cent annual return for investors since launch, compared to the IA Global sector average fund’s 9 per cent.

But investing conditions have changed dramatically over the past six months, with inflation seemingly far more persistent and less transitory than central banks expected, leading to a shift in the interest rate environment and a sell-off for high-flying growth stocks.

The £960million fund, with a 0.87 per cent ongoing charges figure, has fallen 16.5 per cent over the year-to-date, compared to the sector average 9.7 per cent decline. 

So does the market turmoil this year change things for Blue Whale and how did Stephen get ahead of the curve on two of those big names, selling out of both Meta, as Facebook is now known, and Paypal before both suffered hefty declines in their share prices?

On this episode of the Investing Show, Stephen returns to the studio to join This is Money’s Simon Lambert to discuss whether his investment outlook has changed, how the recent shake-out has affected the Blue Whale portfolio and where he sees the best opportunities now.

He reflects on how the change in investor sentiment – set against a backdrop of high inflation, geopolitical tension and the war in Ukraine – could have an impact and whether investors need to sift out the reliable growth stocks from the more hopeful blue-sky shares.

Stephen reveals why he still holds top ten positions in Adobe, Microsoft and Nintendo and why he has also backed luxury goods leader Kering. 

The Blue Whale Growth Fund has richly rewarded investors in the four-and-a-half years since its launch, but suffered this year in the market shake out.


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