Recent developments in Iran have understandably unsettled markets. Periods like this tend to bring volatility, often driven more by sentiment than by any immediate change in underlying fundamentals.
 
From our perspective, the key question is simple: has the earnings trajectory of the businesses we own changed?
 
In short, we do not believe it has.
 
Many of the structural growth drivers within the portfolio remain firmly intact. The adoption of GLP-1 therapies, led by companies such as Eli Lilly, continues to expand globally. Investment in AI infrastructure (across NVIDIA, Broadcom, Vertiv and SK Hynix) remains a priority for businesses and governments alike. Meanwhile, demand for biologics manufacturing, supported by Sartorius and Danaher, continues to grow in line with long-term healthcare trends.
 
These structural forces are accelerating, not slowing.
 
Against this backdrop, recent share price weakness appears increasingly disconnected from business fundamentals. For long-term investors, this can present an opportunity to access the same earnings streams at more attractive valuations.
 
Whilst much of the portfolio we believe is insulated from such geopolitical developments, the Fund’s defence exposure, including Leonardo and Honeywell (a new addition to the Top 10), may be a beneficiary as we see increased demand as governments reassess security priorities. 
 
It is also important to recognise that this is not the first time markets have faced sharp macro uncertainty during the life of the fund. Since inception, we have navigated events including trade tensions under President Donald Trump, the COVID-19 pandemic, the war in Ukraine, and the rapid global interest rate tightening cycle. In each instance, periods of volatility have allowed us to refine the portfolio – emerging with a more resilient collection of businesses and a stronger foundation for long-term outperformance.
 
As business analysts, our focus remains firmly on the earnings trajectory of each company we own. We continually assess our holdings in the context of the evolving macroeconomic environment, using it as an overlay to test whether those earnings paths remain intact. Where we believe macro developments could materially alter the long-term outcome for a business, we will reassess its position in the portfolio. This discipline ensures that our conviction is grounded in fundamentals, not sentiment.
 
Finally, a brief word on gold. While prices have softened in recent weeks, it is important to remember what has driven its strength: concerns around fiscal sustainability across developed markets and the resulting demand for hard assets. If anything, heightened geopolitical tension reinforces these underlying dynamics rather than diminishes them.
 
In periods like this, it is easy to be drawn into short-term noise. Our approach remains unchanged: focus on high-quality businesses with durable earnings growth, and allow this discipline – rather than headlines – to drive outperformance over the long term.

This communication is issued by Blue Whale Capital LLP which is authorised and regulated by the Financial Conduct Authority. Your capital is at risk. If you cannot afford the potential risk of a substantial loss, you should not invest. Equity investment should be viewed as a long-term investment. Past performance is not a guide to future performance. The value of investments may fall as well as rise and you may not get back the amount of your original investment. Prospective investors should study the Fund’s Prospectus, KIID and application form which together provide a complete list of risk factors. Blue Whale does not give investment advice. If you are unsure if the Fund is suitable for you, you should contact a financial adviser. Views we express on companies do not constitute Investment Recommendations and must not be viewed as such.

Please note that any references to the WS Blue Whale Growth Fund in the article are provided for information purposes only; it is a UK UCITS that is not registered for sale in, nor promoted, to investors in the EEA. Whilst the investment objectives and charges are not identical, both funds are run on the same investment process.

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Blue Whale Key Risks & Disclaimers:

The Blue Whale Growth Fund was launched in September 2020. All references to actions before this date relate to the LF Blue Whale Growth Fund.  Information on the LF Blue Whale Growth Fund is provided for comparison purposes only; it is a UK UCITS which is not registered for sale in nor is it promoted to investors in the EEA.  Whilst the investment objectives and charges are not identical, both funds are run on the same investment process.

Please note that the information provided in this article is not to be construed as advice and any views we express on holdings do not constitute investment recommendations and must not be viewed as such. If you are unsure as to the suitability of an investment for your circumstances, please seek independent financial advice. Investments can go down in value as well as up so you may get back less than you invested. Your capital is at risk. Past performance is not a guide to future performance.Blue Whale Capital LLP is authorised and regulated by the UK Financial Conduct Authority.

There are significant risks associated with investment in the Fund referred to herein. Investment in the Fund is intended for investors who understand and can accept the risks associated with such an investment including potentially a substantial or complete loss of their investment.

Past performance is not a guide to future performance. The value of investments and any income derived from them can go down as well as up and the value of your investment may be volatile and be subject to sudden and substantial falls.

Investment in a Fund with exposure to emerging markets involves risk factors and special considerations which may not be typically associated with investing in more developed markets. Political or economic change and instability may be more likely to occur and have a greater effect on the economies and markets of emerging countries. Adverse government policies, taxation, restrictions on foreign investment and on currency convertibility and repatriation, currency fluctuations and other developments in the laws and regulations of emerging countries in which investment may be made, including expropriation, nationalisation or other confiscation could result in loss to the Fund.

Income from investments may fluctuate. Changes in rates of exchange may have an adverse effect on the value, price or income of investments. Fund charges may be applied in whole or part to capital, which may result in capital erosion. The Authorised Corporate Director may apply a dilution adjustment as detailed in the Prospectus. The Fund is not traded on an exchange or recognised market.

The foregoing list of risk factors is not complete, and reference should be made to the Fund’s Prospectus and KID.

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MeDirect Disclaimers:

This information has been accurately reproduced, as received from Blue Whale Growth Fund. No information has been omitted which would render the reproduced information inaccurate or misleading. This information is being distributed by MeDirect Bank (Malta) plc to its customers. The information contained in this document is for general information purposes only and is not intended to provide legal or other professional advice nor does it commit MeDirect Bank (Malta) plc to any obligation whatsoever. The information available in this document is not intended to be a suggestion, recommendation or solicitation to buy, hold or sell, any securities and is not guaranteed as to accuracy or completeness.

The financial instruments discussed in the document are intended for retail clients, however, it may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein.

If you invest in this product you may lose some or all of the money you invest. The value of your investment may go down as well as up. A commission or sales fee may be charged at the time of the initial purchase for an investment. Any income you get from this investment may go down as well as up. This product may be affected by changes in currency exchange rate movements thereby affecting your investment return therefrom. The performance figures quoted refer to the past and past performance is not a guarantee of future performance or a reliable guide to future performance. The performance figures quoted are only estimates and may not be a reliable indicator of future performance of this investment. Any decision to invest in a mutual fund should always be based upon the details contained in the Prospectus and Key Information Document (KID), which may be obtained from MeDirect Bank (Malta) plc.