In 2017 David Yiu, with the backing of Peter Hargreaves, (Hargreaves Lansdowne) launched a new start up fund with a very different name. Before writing about it in our Newsletters we waited for a couple of years until Autumn 2019 to see how the fund got on. Since then, David Yiu has continued to run the fund very successfully, so that now after seven years the fund has returned over 170% between 11/9/2017 – 30/1/2025.

When we first highlighted this fund in 2019 it had £200m under management. Today the fund now stands at £1.28bn. It is a concentrated, long-only global equity fund holding only 25-35 stocks, with a focus on large cap companies in developed markets. The Top 10 holdings in the fund generally constitute approximately 50% of the Fund.

Much is made about past performance of investments. The compliance adage “past performance is not a guide to the future” is a fair one. And for good reason – what is in the past cannot be attained. Sadly, past performance really is the only graphical metric that most people look at when choosing their investment. This doesn’t upset Davis Yiu – indeed it reflects well on the WS Blue Whale Growth Fund – they have delivered performance of +170% over the seven years for their investors.

However, what should really interest investors is the story moving forward.  How is the portfolio positioned to take advantage of opportunities, but defend against pitfalls? Is there strong idea generation? It is, after all, what happens in the future that decides returns from here.

What sort of fund is this?

We wouldn’t label the fund as any single type but as your one stop shop for navigating the markets. This is a fund that aims to compound returns, with the sole intention of delivering consistent outperformance of the index.

They can invest where they like. That usually means a quality business benefitting from the tailwinds of sector growth. They did it with Alphabet and digital advertising, Microsoft and digital transformation, Nvidia and AI. They are already looking for the next great companies, in the next exciting sectors. They believe that they have already found them.

So, if you are going to consider the past, judge a manager through a cycle, through good times and bad, high interest rates, low interest rates, crises etc. Can they outperform under these circumstances? If you look back, you will see that Blue Whale have.