Amazon.com has been a holding for four years in the Blue Whale Growth fund, one of the highest-profile U.K. funds that invests in U.S. companies.
Not any longer. Fund manager Stephen Yui told MarketWatch sister publication Financial News that rising inflation made him uncomfortable with owning Amazon AMZN, -0.09%. “We’ve never liked the retail business, and now we like it even less because of the inflation narrative,” he said.
The Labor Department on Wednesday reported that consumer prices shot up 7% in the 12 months ending December.
Yiu also said Walmart WMT, -0.53% and others have stepped up their e-commerce game due to COVID.
On Amazon’s other key business, cloud provider AWS, Yui said the growth potential of Microsoft MSFT, +1.04% and Alphabet GOOG, +1.16% unit Google were higher. Both Amazon rivals are top ten holdings of the fund.
Amazon shares have climbed 6% over the last 52 weeks, underperforming the broader S&P 500 SPX, +0.28% that has gained 24%.