Place the water in the bottom of a double boiler. Bring to a boil over high heat. Reduce the heat to low and, in the top of the double boiler, combine the egg yolks and sugar. Stir constantly for 5-6 minutes until the sugar dissolves and the mixture begins to thicken.
Remove from heat and add the sherry. Let cool for 20-30 minutes.
Place the whipped topping in a large bowl and fold in the cooled egg mixture until evenly combined. Serve over fresh fruit.