Overview

The Neptune China Fund offers exposure to one of the world’s leading economies. The Fund Manager uses Neptune’s in-house research to identify industry sectors which they believe have significant exposure to both domestic and international growth themes. These include continuing economic restructuring, substantial infrastructure development and the rising economic might of the ever-expanding Chinese middle class.

Investment objective

To provide capital growth by investing mainly in Chinese companies, selected at the manager's discretion.

There is no assurance that the investment objective will be achieved.

Ongoing charge (%) 0.96
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B5Q38588
Bloomberg NECHCAC:LN
SEDOL B5Q3858

Fund managers

Ruth Chambers

Fund Manager
  • Role at Neptune

    Fund Manager

  • Time at Neptune

    3 years

  • Research focus

    Energy and Utilities

Ewan Thompson

Assistant Manager
  • Role at Neptune

    Investment Director, Head of Emerging Market Equities

  • Time at Neptune

    13 years

  • Research focus

    Metals and Mining

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs 10 yrs Launch
Fund -8.3 5.0 -17.1 50.6 56.2 110.7 327.5
Benchmark -10.1 5.7 -13.5 62.4 83.3 129.1 545.3
IA sector -7.8 8.9 -11.8 59.2 77.9 137.6 423.0
IA rank 21/36 32/36 34/36 28/35 30/33 13/19 10/12
Quartile 3 4 4 4 4 3 4
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund -3.8 -0.2 18.1 33.1 -14.6
Benchmark 15.0 -2.3 20.6 41.0 -13.7
IA sector 11.2 2.8 19.6 35.8 -14.3
IA rank 33/33 25/33 22/35 25/35 17/36
Quartile 4 3 3 3 2

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 31/12/2004, which is the launch of the A Accumulation share class. The C Accumulation share class was launched on 03/10/2012, so during the period from 31/12/2004 to 03/10/2012 the performance record is based on the pre-existing A Accumulation share class. Reported date prices used for cumulative and discrete performance tables. The performance of other share classes may differ.

IA sector rankings may change at any time as a result of closure, movement between sectors or price amendments by competitor funds. The Fund's IA sector is IA China / Greater China and the benchmark is MSCI China Index. Neptune’s funds are not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason, the comparison index should be used for reference only.

This Fund may have a high historic volatility rating and past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you and your clients may not get back the original amount invested. Investments in emerging markets may be higher risk and more volatile than investments in developed markets.

Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices.  None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information.  MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information.  Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com).

FE Crown Fund Rating applies to C Accumulation share class in pound sterling. FE Crown Fund Ratings do not constitute investment advice offered by FE and should not be used as the sole basis for making any investment decision. ©2019 FE. All rights reserved.

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund -3.8 -0.2 18.1 33.1 -14.6
Benchmark 15.0 -2.3 20.6 41.0 -13.7
IA sector 11.2 2.8 19.6 35.8 -14.3
IA rank 33/33 25/33 22/35 25/35 17/36
Quartile 4 3 3 3 2

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 31/12/2004, which is the launch of the A Accumulation share class. The C Accumulation share class was launched on 03/10/2012, so during the period from 31/12/2004 to 03/10/2012 the performance record is based on the pre-existing A Accumulation share class. Reported date prices used for cumulative and discrete performance tables. The performance of other share classes may differ.

IA sector rankings may change at any time as a result of closure, movement between sectors or price amendments by competitor funds. The Fund's IA sector is IA China / Greater China and the benchmark is MSCI China Index. Neptune’s funds are not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason, the comparison index should be used for reference only.

This Fund may have a high historic volatility rating and past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you and your clients may not get back the original amount invested. Investments in emerging markets may be higher risk and more volatile than investments in developed markets.

Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices.  None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information.  MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information.  Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com).

FE Crown Fund Rating applies to C Accumulation share class in pound sterling. FE Crown Fund Ratings do not constitute investment advice offered by FE and should not be used as the sole basis for making any investment decision. ©2019 FE. All rights reserved.

Portfolio

Data as at 31/05/2019

Top ten holdings (%)

FundIndex
Tencent 9.02 14.62
Alibaba Group 8.81 13.06
Ping An Insurance Group 6.70 4.03
China Construction Bank 6.64 4.70
Industrial & Commercial Bank of China 4.85 2.94
China Mobile 4.15 3.30
Bank of China 3.63 2.06
China Overseas 3.08 0.82
Li-Ning 2.52 0.20
Shenzhou International Group 2.27 0.55

Sector (%)

FundIndex
Financials 25.6 23.0
Consumer discretionary 23.2 22.5
Communication services 17.6 24.2
Real estate 6.0 5.7
Industrials 5.6 5.6
Energy 5.1 4.6
Information technology 4.4 3.0
Consumer staples 4.0 3.2
Utilities 3.3 2.8
Materials 2.2 2.1
Healthcare 1.5 3.2
Cash 1.5000 0.0

Top ten holdings (%)

FundIndex
Tencent 9.02 14.62
Alibaba Group 8.81 13.06
Ping An Insurance Group 6.70 4.03
China Construction Bank 6.64 4.70
Industrial & Commercial Bank of China 4.85 2.94
China Mobile 4.15 3.30
Bank of China 3.63 2.06
China Overseas 3.08 0.82
Li-Ning 2.52 0.20
Shenzhou International Group 2.27 0.55

Sector (%)

FundIndex
Financials 25.6 23.0
Consumer discretionary 23.2 22.5
Communication services 17.6 24.2
Real estate 6.0 5.7
Industrials 5.6 5.6
Energy 5.1 4.6
Information technology 4.4 3.0
Consumer staples 4.0 3.2
Utilities 3.3 2.8
Materials 2.2 2.1
Healthcare 1.5 3.2
Cash 1.5000 0.0

    Active share

    Active share 46.5%

    The Active Share is a measure of how different a portfolio is from its benchmark, i.e. how 'actively managed' a fund is relative to its respective Index. A score of 100% indicates the fund's holdings are completely different, whilst 0% indicates the portfolio exactly replicates the Index.

    Number of holdings

    No. of holdings 48

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q1 2019

    Market overview

    The Chinese market rallied significantly this quarter, entering a bull market following optimism surrounding the trade negotiations between the US and China, as well as news of further inclusion in the MSCI benchmark indices. At the end of February, Donald Trump delayed a scheduled increase in tariffs on $200bn of Chinese goods in order to allow more time for negotiations. This was viewed very positively by the market as an indication that talks were progressing and that both sides were eager to reach an agreement. China’s economic data in March was also stronger than expected: the manufacturing industry returned to growth after three months of contraction, credit growth also rebounded, and deleveraging has been slowing since the beginning of the year, which have all helped to bolster share price performance.

    Portfolio attribution

    Underperformance versus the benchmark partly came from an underweight position in the healthcare sector, which saw a strong rally, as well as a limited position in the brokers, which benefited from increased Chinese domestic retail sentiment. The portfolio’s consumer discretionary sector performed well against the benchmark, where sportswear names continued to outperform due to the increasing trend of health awareness. Ctrip, a provider of travel services, also performed particularly well as margins improved beyond expectations and guidance was strong for the next quarter.

    This quarter we increased the weighting of consumer discretionary names in the portfolio as we believe the sector will benefit from increased spending as a result of the individual income tax reform enacted last year. We have selected companies that focus on items such as apparel and dining, which we believe are in line with the magnitude of extra income that people will receive. We also continue to believe in the trend of increased aspiration for domestic and international travel, as well as education remaining a priority for families. These additions were funded by reductions in the utilities and energy sectors.

    Market outlook

    Trade negotiations between US and China appear to be progressing well with many major issues already agreed upon, although enforcement of the deal remains the final sticking point. However, we believe both sides are working hard for a resolution and that an agreement will be announced in the second quarter, removing a significant overhang from the market. This quarter, the government announced a 2019 GDP growth target of 6-6.5%, giving China policy flexibility for the year. Stimulus measures have continued, with VAT cuts and increased local government infrastructure funding also announced, however we continue to believe stimulus will be specific and targeted. We believe these measures should ensure growth targets are met this year and we maintain a positive outlook for the Chinese market going forward.

    Ruth Chambers

    Fund Manager

    The Chinese market rallied significantly this quarter, entering a bull market following optimism surrounding the trade negotiations between the US and China

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 177.70 0.17 26/06/2019
    A Acc GBP 423.40 0.17 26/06/2019

    Neptune funds are priced every working day at 12 noon UK time and prices should be updated here by 6pm the same day.

    The prices shown should be taken only as an indication of the value of shares. Prices are set on a forward-pricing basis which means that any instruction to buy or sell shares will be fulfilled at the price set at 12 noon the next day.

    If you are looking for historical prices of closed funds or share classes, or are having any difficulty finding the price information you require, please call our customer services team on 0800 587 5051.

    Literature

    Factsheet
    31/05/2019
    Quarterly Commentary
    31/03/2019
    Key Investor Information Document
    08/02/2019

    Codes & fees

    ISIN SEDOL Bloomberg Ongoing charge (%)
    C Acc GBP GB00B5Q38588 B5Q3858 NECHCAC:LN 0.96
    A Acc GBP GB00B04H0Y06 B04H0Y0 CFNCHAA:LN 1.97

    Contact us

    UK Sales Team

    Michael Parsons

    Global Head of Sales

    Tel: 020 3249 0181

    Mob: 07870 510 306

    Email: michael.parsons

    Harry Bush

    Head of London Sales

    Tel: 020 3249 0174

    Mob: 07850 770 470

    Email: harry.bush

    Hugo Morrissey

    Sales Manager – North & Scotland

    Mob: 07850 770 453

    Email: hugo.morrissey

    Harry Nolan

    Sales Manager – London & South East

    Tel: 020 3249 0192

    Mob: 07970 231 379

    Email: harry.nolan

    Veronika Blazicek

    Sales Executive - UK & Europe

    Tel: +44 20 3249 0189

    Mob: +44 7850 770 480

    Email: veronika.blazicek

    To place a deal or request information on investments:

    Lines are open on weekdays from 9am to 5pm UK time. All 0800 numbers are free of charge to call from fixed line and mobile phones.

    Postal address

    Neptune Investment Management

    PO Box 9004

    Chelmsford

    Essex CM99 2WR