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Top 10.

 

Data as at 31 October 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

£103bn  

  • 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. 

  • Industrials

    Mar-18

    £25bn  

  • 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

    £45bn  

  • 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

    £420bn  

  • 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.

  • Financials

    Oct-17

    £215bn  

  • 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

    £840bn  

  • 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

    Sep-17

    £94bn  

  • PayPal is a high quality business benefiting from structural growth in digital payments. At its core is a global two-sided payment network operating at scale, storing payment details for consumers while processing online transactions for businesses. PayPal’s scale comes from its first mover advantage at the dawn of the consumer internet. Network effects and superior technology helped PayPal grow users in the tens of millions to more than 250 million in 2018. More recently, PayPal has been extending its lead over competitors through commercial partnerships spanning financial institutions (Barclays, HSBC, Amex) as well as tech giants (Facebook, Google).

    PayPal’s ability to keep growing its lead – commercially and technologically – gives us confidence that the business is likely to perform well in the long run.

  • Healthcare

    Jun-18

    £16bn  

  • Veeva develops software specifically for the life-sciences industry and was founded in 2007. A relentless focus on innovation and delighting its customers led Veeva to become the largest software vendor to the life-sciences industry just 10 years later. It’s no coincidence to us that Founder and CEO Peter Gassner cut his teeth at Salesforce.  

    Veeva has gained c70% market share in pharmaceutical CRM software.  We are optimistic about significant growth in the future as Veeva leverages its customer relationships, technology platform (Veeva Vault) and aforementioned focus on innovation and customer surplus into many other niches within the life-sciences industry. And there are many; from the software used to manage vast amounts of data generated by clinical trials, to the software for a global pharmaceutical company to manage compliance with myriad regulations in the 100s of countries in which it operates. Longer term, Veeva also has its sights on other industries that share some similar characteristics such as chemicals and cosmetics. 

  • Financials

    Mar-18

    £272bn  

  • 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

    £4bn  

  • 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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