FAQ.

 

Is it possible to invest directly in the LF Blue Whale Growth Fund through the Blue Whale website?

  • It is not currently possible to invest in the LF Blue Whale Growth Fund directly through the Blue Whale website, however we are developing a new feature that will enable site visitors to invest in a few easy clicks. The planned launch date is later in 2018.

  • Where can I buy the LF Blue Whale Growth Fund?

  • The fund is currently available through a number of platforms which are listed on the How to Invest page of the site.
  • What is the minimum investment in the LF Blue Whale Growth Fund?

  • The minimum investment requirement varies depending on the platform the fund is purchased through, however the criteria set out in the LF Blue Whale Investment Funds Prospectus is as follows:
     
     
     
      I Sterling
    Acc  
      I Sterling
    Inc 
      R Sterling
    Acc 
      R Sterling
    Inc  
    Minimum Initial Investment 
    £10m
    £10m
    £1,000
     
    £1,000
     
    Minimum subsequent investment
    N/A
    N/A
    £100
    £100
  • When will the LF Blue Whale Growth Fund be available via more platforms?

  • It is currently possible to buy the LF Blue Whale Growth Fund across a variety of platforms including Hargreaves Lansdown, Charles Stanley, AJ Bell, Transact and Ascentric. However, we are aware that there are a number of platforms that it is still not possible to buy the fund through. We are in constant contact with a variety of different companies as we would like our fund to be available to the widest possible audience. 

    The fund is currently being onboarded on Cofunds, Interactive Investor and Funds Network and is shceduled to go live on all three by the end of 2018.

    If you would like the fund to be available with your current provider, it may help to speak to them directly to request the LF Blue Whale Growth Fund appears in their list of available investments.

  • Can I hold the LF Blue Whale Growth Fund in an ISA/pension account?

  • Yes. The fund is available through various investment vehicles including ISA and SIPP.
  • What is the average annual ROI With Blue Whale?

  • The LF Blue Whale Growth Fund is a global long-only fund. We run a highly concentrated portfolio of 25-35 stocks, with an aim to outperform our benchmark, the MSCI World Index Net GBP. This benchmark has delivered an average annual return of 10% per year for the last 10 years. Since inception, the Fund has outperformed the benchmark.
  • Do you employ a buy and hold approach?

  • We invest in a stock when the company meets our investment criteria and we consider valuation to be attractive. If either of these two factors change we will sell the stock. We don’t refer to “buy and hold” because many investors take this to mean that once you have bought a stock you will never sell. Fund managers who use the “buy and hold” label don’t actually do this and will sell a position if they believe it is too expensive or if they think the business model is broken. Fundsmith says they “aim” to buy and hold but quite sensibly Terry Smith has sold positions over the past few years due to the reasons we have outlined above.

  • Will you publish your entire portfolio?

  • We are not considering this as we do not feel it is helpful to performance in the long-run. If the fund was to become much larger in size, revealing all our positions to the market can be a hindrance. For example, if we had a relatively large position in a smaller company where liquidity was relatively low, there are plenty of algorithmic-driven and hedge funds who could use this to their advantage if they knew we needed to sell. This would be to the detriment of our investors so we do not want to do this. A particular well-known UK fund manager has been down the path of disclosing all of his holdings and we don’t feel this has helped his fund. 

  • Will you use live videos to answer questions from investors?

  • We are actively looking to move to a video format soon. We’d also like to explore the idea of live Q&A via Facebook or Twitter. A lot of the video formats out there are pre-prepared and scripted – we think this is 2018 and investors would like something more interactive but it depends on what is feasible from a compliance perspective. Please let us know your thoughts on what you’d like to see.

  • I am concerned that your portfolio contains too few stocks for a diversified investment. Do you intend to increase your number of holdings or is there a good reason why you have less than 35

  • Some level of diversification is important but a fund should not be overdiversified. If you were to construct a portfolio of a select number of FTSE 100 stocks, the risk falls sharply as the portfolio increases in number from just one stock up until it has reached 25-35 stocks. However, by the time it has reached 25-35, most of the reduction in risk that can be attained has already been achieved. Adding further stocks is problematic for two reasons.
     
    Firstly, doing so fails to reduce risk much further but does requires a compromise on conviction. This is because the more stocks you own, the less you know about each of them. Forcing yourself to invest in something where you have less conviction about future outperformance whilst achieving nothing in return is not a sensible strategy. Secondly, the risk of becoming a closet index tracker grows. 
     
    Active management is about trying to achieve superior returns to the overall market index. After 35 stocks, the more stocks a fund manager holds, the more likely they are to perform in-line with the overall index. In this instance, an investor would be better served buying a cheap passive ETF index tracker instead of paying a higher management fee to an “active” manager who achieves the same result. We believe investors should be very suspicious of managers who own more than 35 stocks.
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