Hyperion delivers again: AI, innovation, and structural growth drive returns

It’s not often we focus on a fund’s performance, but when a fund has delivered 47.3% in the past year, blitzing its benchmark by more than 29%, it’s hard to ignore.

The fund I’m referring to is the Hyperion Global Growth Companies Fund (Managed Fund), which is also available as an active ETF under the ticker ASX: HYGG.

It has been an impressive performance over the past 12 months, but also over extended periods, with the Fund delivering 18.9% p.a. over five years and 19.6% p.a. since inception in June 2014 (all numbers as at 31 May).

Against this backdrop of performance, the Hyperion Asset Management team recently delivered its June 2025 Market Update and Outlook webinar, the highlights of which included insights into US R&D spending, and why the reports of the death of US exceptionalism have been greatly exaggerated.

Below is a summary of the session. You can find the full replay here. 

Please note that the webinar also discussed the other Hyperion funds, which are referenced below. 

US exceptionalism is alive and well

Despite headlines questioning the future of US dominance, Hyperion’s Chief Investment Officer Mark Arnold was quick to dismiss the scepticism:

“America is exceptional largely as a result of its culture of disruptive innovation and risk-taking.”

Arnold highlighted that the US remains the global leader in R&D and venture capital investment. This culture of innovation attracts top talent, evidenced by the fact that “approximately 40% of Silicon Valley’s workforce is foreign-born.”

He drew a stark comparison between the world’s major economies:

“In general terms, we believe that America innovates, China replicates, and Europe regulates.”

Supporting charts showed the US’ superior EPS growth since 2006 compared to global markets and the Nasdaq’s dominance over the MSCI World Index. 

Hyperion believes this edge will only grow stronger in a “software-defined world,” where access to advanced chips and a lead in real-world and digital AI (like Tesla (NASDAQ: TSLA) and Palantir (NASDAQ: PLTR)) will be key.

The AI revolution is accelerating

AI dominated the discussion, with Hyperion forecasting huge disruption and opportunity. Deputy CIO Jason Orthman observed: 

“Parity is occurring between machines and humans… in driving, language, image recognition. We believe we have reached an inflection point.”

He cited Nvidia’s (NASDAQ: NVDA) humanoid robots and Tesla’s soon-to-launch Robotaxi network as real-world signs of AI's transformative power. Hyperion sees Tesla turning “dumb depreciating assets into smart money printing machines” and described the Robotaxi rollout as “a big moment in the company’s history and for transportation generally.”

More broadly, Orthman believes AI advancements will be “incredibly disruptive to human labour and society,” noting that the fund is now 80% exposed to positive advancements in artificial intelligence.

On-the-ground research across continents

Hyperion continues to back its high-conviction approach with deep fieldwork. In North America, some of the companies Hyperion recently visited include: 

• Intuitive Surgical (NASDAQ: ISRG): The da Vinci 5 robotic surgery system impressed with its ability to differentiate “textures, forces and pressures of different surfaces.”
• Axon (NASDAQ: AXON): Their AI tool, Draft One, automates police report writing from bodycam footage, potentially reclaiming “40% of police officers’ time.”
• Tesla (NASDAQ: TSLA): The team visited the Fremont factory and reaffirmed their belief that Tesla has “solved generalised autonomy,” with Robotaxis already operating in Austin.

In Europe:

• Nick Scali (ASX: NCK) in the UK showed promise in a commoditised retail landscape.
• Dino Polska (WSE: DNP) in Poland was praised for its rural-focused, cost-efficient model. Hyperion projects store growth from 2,700 to 7,500 over a decade.
  
• Factory visits at Porsche (PAH3.DE) and Volkswagen (VOW.DE) reaffirmed the belief that “legacy auto companies will suffer severe economic stress” due to poor EV economics and competition from Chinese EVs.
  

Portfolio moves: new additions and strategic replacements

Recent changes across Hyperion’s domestic and global portfolios reflect its commitment to finding “new and better ideas.”

Global Portfolio:

SOLD: Alphabet (NASDAQ: GOOGL), Airbnb (NASDAQ: ABNB), Kering , Roku (NASDAQ: ROKU) — all <1% weights, facing disruption risk.

ADDED:

• Axon: Touted for its high-growth, high-margin software business supporting law enforcement.
• Nvidia: Seen as essential to the AI future. “Its CUDA software ecosystem makes it difficult for competitors to match Nvidia’s strong value proposition,” said Arnold.

Domestic Portfolio:

SOLD: IDP Education (ASX: IEL) due to political risks in higher education.

ADDED:

• Life360 (ASX: 360): A family safety app nearing an inflection point with multiple revenue streams and 83 million global users.
• Chemist Warehouse (ASX: SIG): “A highly disruptive business… offering prices significantly below supermarkets,” expected to deliver double-digit EPS growth over the next decade.

Outlook: strong growth across all funds

Hyperion remains confident in the long-term performance of its portfolios, supported by strong fundamentals and forward-looking themes.

Global Growth Companies Fund

• EPS Growth Forecast: 23% p.a. for the next 10 years
• 10-year IRR Forecast: 21% pre-fees

“The fund is well-positioned to take advantage of rapid and ongoing developments in digital and real-world AI,” said Arnold.

Australian Growth Companies Fund

• EPS Growth Forecast: 16% p.a.
• 10-year IRR Forecast: 19% p.a.

Orthman pointed to the compounding potential of names like WiseTech (ASX: WTC) and Block (ASX: SQ2), despite recent volatility.

Small Growth Companies Fund

• EPS Growth Forecast: 23% p.a.
• 10-year IRR Forecast: 19% p.a.

Standout names include HUB24 (ASX: HUB), Temple & Webster (ASX: TPW), and Pro Medicus (ASX: PME).

“The portfolio’s terminal value increased 34% over the past 12 months,” said Orthman, signalling deepening market leadership.

Final thoughts: navigating noise with long-term focus

Despite short-term volatility, like the Trump administration’s tariff scare, Hyperion maintains that many sell-offs are “technical in nature and not fundamentally driven.”

Arnold remains optimistic:

“We don’t believe the tariffs will be inflationary in the medium term… Our companies are service-based and well positioned to handle any impact.”

The fund’s strategy remains focused on “structural growth leaders” rather than cyclical or capital-intensive businesses. By doubling down on AI, innovation, and founder-led disruptors, Hyperion believes it can continue delivering superior long-term returns, regardless of the macro noise.

Managed Fund

Hyperion Global Growth Companies Fund (Managed Fund)

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Managed Fund

Hyperion Australian Growth Companies Fund

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Managed Fund

Hyperion Small Growth Companies Fund

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