WS Blue Whale Growth
Why is this fund on our radar?
Blue Whale Growth set out with a clear ambition when it launched in September 2017: beat the wider global stock market, consistently, not just occasionally. Manager Stephen Yiu goes after that goal by backing companies that are financially strong and highly profitable, but which still have room to grow further.
He doesn't spread his bets thinly. Stephen searches the world, including emerging markets, for opportunities, but focuses on a small universe of around 100 high-quality companies, then backing only a handful of companies he believes in most, leaving a portfolio of 25-35 stocks. That concentration can cut both ways, with every stock he picks potentially moving the needle on performance meaningfully, for better or worse. But this also means the fund is genuinely different and won't move in step with a passive tracker or with many other actively managed funds.
Since launch, Stephen's approach has delivered returns well ahead of both the global stock market and the average competitor fund, up to the end of June 2026. The trade-off is that Blue Whale Growth also tends to swing more sharply in value than the market. That's why we think it could suit investors chasing the potential for higher returns, provided they're also comfortable with extra risk.
Skip to Our VerdictPerformance
Blue Whale Growth has delivered more than double the returns of the global stock market since its September 2017 launch, and three times the return of the average global fund, as the chart below shows (using a passive fund that tracks the market for comparison). We think this track record highlights the potential in Stephen's approach: hunting for strong businesses that can ride powerful, long-term growth trends, artificial intelligence (AI) chief among them recently. That strength has come with more turbulence along the way too, with the fund typically climbing further than the market during rallies and dropping further during sell-offs.
The fund's returns have leaned heavily on periods when investors have been willing to pay up for rapid growth. It has beaten the wider global market in every calendar year since 2023, largely on the back of its AI-linked holdings, which the market has rewarded handsomely given the technology's potential to reshape the economy. Something worth flagging, though; this isn't an AI fund, or even a technology fund, in disguise. Stephen invests elsewhere too, and is ready to rotate out of AI and tech altogether if the outlook sours or better opportunities emerge elsewhere. This includes themes like defence, as evidenced through his investments in Leonardo, which offers long-term growth potential and may benefit from increased demand as governments reassess security priorities. The fund's fortunes aren't hostage to AI.
The flip side shows up when the market instead rewards old-economy businesses riding a temporary tailwind rather than genuine growth. 2022 was the textbook case. Energy companies were the story of the year, as Russia's invasion of Ukraine sent oil and gas prices spiralling, while central banks were also raising interest rates sharply. Higher rates tend to make investors less patient and thus profits promised several years down the line become less appealing next to profits available today. That's an uncomfortable environment for a fund like Blue Whale which, even though Stephen tries to pay a sensible price for what he buys, still tends to hold companies priced for their future growth rather than for what they're worth today.
performance since launch
Source: Blue Whale
Past performance is not a reliable indicator of future results
Portfolio
Stephen looks for two things in every company he buys: financial strength and room to keep growing, whether through new products, new regions, new customers, or simply a stronger grip on the markets they're already in. He's also disciplined about price. Paying up for a company usually means the market already expects big things from it, which leaves less room for a pleasant surprise, and plenty of room for disappointment if growth falls short.
That discipline is backed by proper homework done in-house. A five-strong investment team narrows a universe of fewer than 100 companies down to the very best, rather than leaning on outside analysts or following the herd. And while Stephen's preference is to hold onto a great company for the long run, he isn't precious about it: if a valuation runs too far ahead of itself, he's willing to trim the position, with a view to rebuilding it later if the opportunity resets.
Stephen looks worldwide, including emerging markets, but is picky: the portfolio holds just 25 to 35 stocks. That's a small enough number that any single holding, good or bad, can genuinely move the fund's overall performance, and it's part of why Blue Whale Growth behaves so differently from both the wider market and many of its actively managed rivals.
Right now, that hunt for growth points the portfolio heavily towards AI, where Stephen currently sees the most compelling opportunities. That's not a fixed bet, though: he's kept the flexibility to shift the portfolio elsewhere the moment better opportunities turn up. That flexibility isn't just an idea on paper: Stephen has actually acted on it. Over the past year, he sold out of two big holdings, Meta and Microsoft, because he felt their enormous spending on AI wasn't yet paying off. In their place, he's leaned into a different kind of AI company: the ones that supply the chips and equipment the whole industry depends on, rather than betting on which app or product eventually wins. That shift has already helped the fund dodge much of the recent downturn in AI-linked shares that caught other investors out.
Sector breakdown
Our Verdict
In our view, Stephen's approach, backing strong companies tied to powerful long-term growth trends, has shown its worth since launch, and we think Blue Whale Growth could suit adventurous investors looking for the potential to beat the wider global market, provided they're also comfortable with the extra risk that comes with it.
It's worth remembering that this fund won't shine in every environment. We'd expect it to do best when the market is rewarding fast-growing companies, and it may lag when investors instead favour slower-growing businesses that happen to be benefiting from the economic backdrop of the moment.
Given that growth focus, we think Blue Whale could work well as a complement to a more mainstream global fund, rather than as the core holding in a portfolio. It could also pair well with an income-focused fund: the two aim to grow investors' wealth in different ways and tend to hold very different types of companies.
Key Risks
- Markets move in cycles, and growth investing can be unfashionable for extended periods, sometimes years, during which the fund may underperform
- Tends to climb more than the market when it's rising, and fall more when it’s in decline
- With a small number of holdings, each individual stock has a potentially outsized impact on the fund's overall performance
Read our AI Policy
