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Top 10.

 

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Data as at 31 Dec 2019

 

The Top 10 holdings in the Blue Whale Growth Fund make up approximately 50% of the total value of the fund.

In picking our Top 10, we employ what we internally call ‘The Beautiful Companies Concept’. That is picking those companies which fulfil several important criteria that we believe makes them ‘beautiful’. They represent our highest conviction picks within the portfolio and offer, we believe, a significant upside to the current share price.

Here we take a look at each of our Top 10 holdings and explain why they feature in top positions within our portfolio. 

Please note that the Top 10 is provided for information only and the views we express on holdings do not constitute Investment Recommendations and must not be viewed as such.

 

Company

Sector

In Portfolio Since

Company Size

Media

Sep-17

£124bn  

  • Adobe has more than 50% of the digital content creation software market. Whenever you view an image, video, website, magazine, or even an app, there is a good chance it was created using its software. We believe Adobe will be a major beneficiary of continued explosive growth in this market, as ever-richer digital content is consumed across devices. Meanwhile, Adobe’s pioneering transition to a subscription model is unlocking international growth opportunities and helping to combat software piracy. 

  • Media

    Sep-17

    £720bn  

  • In the most general terms, Alphabet connects people to information with Google Search, Google Maps, Gmail, YouTube, Android, Chrome and the Google Assistant. We wonder whether any company has ever delivered so much value (with these generally being free and ad-supported) to so many consumers (1bn hours of YouTube are watched every day for example). 

    We believe investors continue to underestimate the growth of the digital advertising market. Many of the world’s largest brands are moving spending over from TV advertising. Smaller brands continue to find value in the targeting, measurement and ease-of-use that digital advertising offers. Facebook for example recently disclosed that 7m advertisers are using its platform, a small fraction of the c80m businesses that have Facebook pages.

    Longer term we are also excited about advances in artificial intelligence and autonomous vehicles. 

  • Industrials

    Mar-18

    £32bn  

  • AutoCAD, Revit and Inventor are industry-standard computer aided design (CAD) tools made by Autodesk that are deeply embedded in the construction and manufacturing industries.

    We’re optimistic about Autodesk for a number of reasons: Autodesk is helping to drive a long-overdue ‘digitisation’ of the construction industry with paper drawings and post-it notes being replaced by digital models and iPads. A subscription transition in the vein of Adobe and Microsoft should bring Autodesk closer to its customers, provide more predictable cash flows, help to combat software piracy, and allow delivery of continuous innovation to customers. On the final point we are excited about advances that Autodesk is making in areas like web-based CAD, Generative Design and software tools for 3D Printing.

  • Healthcare

    Jul-19

    £48bn  

  • Boston Scientific is an innovative medical device company that has an attractive portfolio of products used within minimally invasive procedures. It is led by an inspirational CEO, Mike Mahoney, who has turned the organisation around and cultivated a “winning spirit”. As a result of his actions the future looks bright for Boston Scientific thanks to improved portfolio quality, margin expansion potential and a greater ability to deploy capital than in the past. Moreover, Boston Scientific has diverse growth drivers with growth broad based across every region and every franchise. We therefore believe that the market underappreciates the durability of Boston Scientific’s growth and the ultimate potential for the business.

  • Media

    Sep-17

    £456bn  

  • Facebook is the subject of much negative media coverage, but we believe that the outlook for the business is much more positive. 1.6 billion people or 20% of the world’s population log into Facebook every day. That number grew by 8% year-on-year in the last quarter. Advertisers continue to love the enormous reach and precise targeting that Facebook offers. They spent 32% more year-on-year on the platform in the last quarter. We are optimistic about future growth prospects driven by continued increase in the number of advertisers (with only about 8 million businesses advertising on Facebook now), further improvement in the relevance of ads, the nascent monetisation of WhatsApp, e-commerce particularly on Instagram and perhaps even digital payments.

  • Technology

    Feb-18

    £53bn  

  • Intuit is the company behind both QuickBooks, the leading accounting software for small business globally and TurboTax, the leading tax-filing software for individuals in the US. This niche focus and an excellent management team that embraces ‘self-disruption’ have helped Intuit to thrive across various technology era’s (DOS, Windows, Web and Mobile) since its founding in the 1980s.

    While accounting and tax may sound ‘boring’, Intuit enjoys myriad growth opportunities. The majority of small businesses still don’t use any accounting software and the majority of US citizens still pay professionals to help file their taxes. Technology is helping to change both. For example, QuickBooks Online, the web and mobile based version, allows receipts and invoices to be captured in seconds using a smartphone camera and automatically matched to bank statements. QuickBooks Online has grown their subscribers from 700k to 3.4m in just 3 years – impressive, yet still only a fraction of the hundreds of millions of small businesses globally that Intuit targets.

  • Financials

    Oct-17

    £228bn  

  • Mastercard is a high quality business benefiting from the structural shift of payments away from cash to mobile, online and contactless transactions. At its core, Mastercard runs BankNet, a global payment network connecting major banks for verifying and processing card payments. Mastercard is able to process hundreds of millions of transactions per day due to its superior technology. Looking ahead, Mastercard is seeking to build on its successes in consumer payments to business-to-business transactions (much of which is still made manually by cash or cheque) and we are confident in their ability to navigate and execute on this multi-decade opportunity.

  • Technology

    Sep-17

    £935bn  

  • Microsoft’s products; Windows, Office, server operating systems and developer tools, are part of the foundation of almost every enterprise. But history is littered with examples of companies in such enviable positions that abuse their power over customers and fail to adapt to a changing world.  We believe Microsoft is a rare exception. 

    Since taking over as CEO in 2014, Satya Nadella has reinvigorated Microsoft by pursing a more ‘open’ strategy (Office 365 works on Apple iPhones - unthinkable previously), overhauling internal culture to attract the best talent and focusing attention firmly on the future of technology (Microsoft is one of the top contributors to open source software and artificial intelligence research). 

  • Financials

    Mar-18

    £287bn  

  • Visa is a high quality business benefiting from the structural shift of payments away from cash to mobile, online and contactless transactions. Visa operates VisaNet, a global payment network connecting major banks for verifying and processing card transactions. In 2018, Visa successfully merged its European and global operations so that its full array of value added products and services (especially in transaction security) could be rolled out across bank and fintech customers across Europe. Like Mastercard, Visa is building on its successes in consumer payments and bringing this to the B2B space. We are confident in their ability to navigate and execute on this multi-decade opportunity.

  • Travel & Leisure

    Jun-18

    £5bn  

  • Wyndham Hotels is one of the largest hotel franchisors in the world with number one positions in the economy and midscale segments. Following its recent spinoff Wyndham has a great opportunity to generate consistent revenue growth as it expands outside the US and benefits from continued growth in global travel spend.  Moreover, the highly experienced management team is continuing to generate value as they grow their recurring revenue and deliver the benefits from the recently acquired La Quinta brand. 

    As a result, we believe that the market underappreciates the quality of Wyndham’s business and its potential growth prospects thus making Wyndham a compelling investment.

  • *Please note that the sectors stated are Blue Whale's proprietary classifications which may differ from the Global Industry Classification Standard (GICS) referred to on the Factsheet.

     

     

     

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