Blue Whale Growth Fund – Lunch meeting

Open-end | Review | Global | 18 Mins Read | by


On 11th April I had lunch with Blue Whale Capital at Tibits in London. This helped to dot the i’s and cross the t’s on Blue Whale’s investment process.

When considering funds I look at 1) where they invest 2) how they invest and 3) who is investing. The Blue Whale Growth Fund is able to invest globally and runs a concentrated portfolio of 25-35 stocks.

This offers scope to focus on the best global ideas that are available. The fund manager is privately owned, which tends to be the best structure.

My first impression on the Blue Whale Growth Fund from a recent write-up:

Blue Whale Fund is one of the most interesting fund launches for some time.  It may be able to capture some of the global growth opportunities that quality focused managers miss out on.

At the same time the growth style of investing can be challenging. It involves picking future winners, which is not always easy to do.

The quality threshold that growth investors use is important. The lower the threshold the greater the number of stock blowups.

Blue Whale performance versus rivals

The two main rivals to the Blue Whale Growth Fund are the Lindsell Train Global Equity Fund and the Fundsmith Equity Fund. The chart below lists the three funds since Blue Whale’s inception on 11 September 2017.

The Fundsmith Equity Fund has delivered a 25% return over the period, the Blue Whale Growth Fund is up 30% and Lindsell Train Global is up 31.5%. These are all strong performances.

Source: SharePad

N.b. I have used the total return chart for the Lindsell Train Global Equity Fund as calculated by SharePad. The fund doesn’t currently have an accumulation class.

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Source: SharePad

Passive Fund Alternative

The best passive fund alternative in my view is the S&P 500 index.  It should offer higher long-term returns than the MSCI World index - the benchmark of the Blue Whale Growth Fund.

Source: SharePad

Best active fund alternatives

Blue Whale is a diversified open-end fund.  It is probably best compared with the Fundsmith Equity Fund and the Lindsell Train Global Equity Fund.

We can also throw in the Scottish Mortgage Investment Trust (SMT) for good measure.  However, the Blue Whale Fund appears to have a higher quality threshold than SMT.

Source: SharePad

Source: SharePad

Source: SharePad