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Blue Whale (BW)

Blue Whale: Interview with Stephen Yiu, Chief Investment Officer (CIO)

11 September 2019

Blue Whale was launched in September 2017, since when it’s achieved an annualised return of 21%. Here, Stephen gives us an insight to how he achieves those return, and what they do differently. An interesting insight to those who manage their own money, or those who are interested specifically in Blue Whale Capital.

Introduction – 00:18 How do you know Peter Hargreaves – 00:34
Why did you launch Blue Whale in 2017? – 01:00
What does Blue Whale offer vs other funds? – 02:07
What are you investing caveats? – 05:28
Modelling – 06:55
Timing the market – 10:23
How much movement in the top 10 holdings? – 13:17
Are there any holdings that didn’t go so well? – 16:05
Have you had any holdings you’ve lost money on? – 19:07
What time period do you use to judge performance? – 21:45
How long do you spend on research? – 23:54
How quickly can you respond to results? – 29:30
Why do you predominantly invest in the US? – 32:12
Which other markets would you look at? – 36:55
Why large caps? – 37:54
What should we expect the average stock turnover pa? – 40:16
How much is the AMC? – 42:33
What are your ambitions for Blue Whale? – 43:03

Blue Whale investment objective: The investment objective of the fund is to achieve capital growth over the long-term by investing in equities on a global basis, with a current focus on developed markets. The portfolio will be concentrated, generally comprising between 25 to 35 stocks. In our view investments must fall into the below criteria in order to qualify for selection within the portfolio: 1. The business must be fundamentally attractive, this means • it has the ability to grow and improve profitability over the long term • it must not face structural or imminent cyclical issues 2. The business must have an attractive price; • the business must have a current valuation that is attractive relative to its future growth and profitability • we expect the business to receive favourable revisions of medium-term consensus growth and profitability expectations These criteria enable the Investment Manager to select investments from a broad range of geographies and sectors with no particular sector or style bias. The Investment Manager will conduct detailed bottom-up fundamental research on each potential investment and in most cases produce their own financial model and forecasts of future performance.

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