The £80m Blue Whale Growth fund has beaten a host of larger and more established rivals to be the top performing global equity growth fund in 2018.
The fund, managed by former Artemis manager Stephen Yiu, and backed by Hargreaves Lansdown founder Peter Hargreaves, returned 8.5 per cent in 2018, compared with a loss of just over 6 per cent for the average fund in the IA Global sector in the same time period.
The start-up fund, which had only been launched in September 2017, beat 181 other funds in this sector.
Mr Yiu said in a blog post published on the firm's website yesterday (January 7) the performance in 2018 had been driven by investments in technology and healthcare with the largest holdings being Amazon and Adobe.
He wrote: "We believe the market continues to undervalue companies that can achieve high long-term sustainable growth, particularly those with exposure to cloud computing and cashless technology.
"Current health care holdings UnitedHealth Group, Veeva Systems and Smith and Nephew were also strong contributors."
But Mr Yiu said he was "cautious" about the near term prospects for equity markets. He has previously been critical of the pace at which the US Federal Reserve has been lifting interest rates.
His stated aim for the Blue Whale fund was to become the largest fund in the global equity sector, a place presently held by the £16bn Fundsmith equity fund.
That mandate, run by industry veteran Terry Smith, also made a profit for investors in 2018 of just over one per cent.
Jason Hollands, managing director for business development and communications at Tilney, said the fund had benefitted from publicity around its launch.
He said: "Mr Yiu is fortunate to have such a prominent, cornerstone investor who has also brought the launch of his fund huge amounts of publicity that would not normally be enjoyed a relatively unknown fund manager launching a start-up."
david.thorpe@ft.com
