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 (%) 1.06
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

Deputy Manager
  • Role at Neptune

    Investment Director, Co-Head of Emerging Market Equities

  • Time at Neptune

    12 years

  • Research focus

    Metals and Mining

Robin Geffen

Assistant Manager

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs 10 yrs Launch
Fund -10.84 -15.52 -13.92 34.60 31.06 195.70 302.74
Benchmark -9.65 -14.69 -13.32 44.94 60.11 227.70 503.44
IA sector -10.83 -15.09 -12.92 41.24 53.27 227.33 375.84
IA rank 20/37 18/37 19/37 28/35 30/33 11/19 10/13
Quartile 3 2 2 4 4 3 3
Large chart

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund 15.39 -3.83 -0.17 18.05 33.05
Benchmark 2.03 15.00 -2.27 20.60 40.97
IA sector 11.18 11.06 2.72 19.55 35.73
IA rank 9/31 34/34 26/34 22/36 25/36
Quartile 2 4 4 3 3

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.

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. ©2018 FE. All rights reserved.

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund 15.39 -3.83 -0.17 18.05 33.05
Benchmark 2.03 15.00 -2.27 20.60 40.97
IA sector 11.18 11.06 2.72 19.55 35.73
IA rank 9/31 34/34 26/34 22/36 25/36
Quartile 2 4 4 3 3

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.

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. ©2018 FE. All rights reserved.

Portfolio

Data as at 31/10/2018

Top ten holdings (%)

FundIndex
Alibaba Group 9.34 11.58
Tencent 8.68 13.66
China Construction Bank 6.09 5.38
Ping An Insurance Group 4.81 3.56
China Mobile 4.02 4.04
Baidu.com 3.68 3.70
Industrial & Commercial Bank of China 3.66 0.00
Bank of China 3.15 2.38
CNOOC 3.13 2.16
Everbright International 2.58 0.19

Sector (%)

FundIndex
Financials 22.3 23.8
Communication services 19.8 26.1
Consumer discretionary 17.6 20.1
Energy 7.6 6.0
Materials 6.6 2.0
Industrials 6.6 5.4
Utilities 4.6 3.0
Consumer staples 4.2 2.6
Information technology 3.8 2.6
Real estate 2.5 5.2
Healthcare 2.4 3.3
Cash 2 0.0

Top ten holdings (%)

FundIndex
Alibaba Group 9.34 11.58
Tencent 8.68 13.66
China Construction Bank 6.09 5.38
Ping An Insurance Group 4.81 3.56
China Mobile 4.02 4.04
Baidu.com 3.68 3.70
Industrial & Commercial Bank of China 3.66 0.00
Bank of China 3.15 2.38
CNOOC 3.13 2.16
Everbright International 2.58 0.19

Sector (%)

FundIndex
Financials 22.3 23.8
Communication services 19.8 26.1
Consumer discretionary 17.6 20.1
Energy 7.6 6.0
Materials 6.6 2.0
Industrials 6.6 5.4
Utilities 4.6 3.0
Consumer staples 4.2 2.6
Information technology 3.8 2.6
Real estate 2.5 5.2
Healthcare 2.4 3.3
Cash 2 0.0

    Active share

    Active share 43.8%

    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 42

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q3 2018

    Market overview

    This quarter, the strong dollar, high oil prices and the escalating trade dispute between the US and China have remained strong themes in emerging markets. The MSCI Emerging Markets Index returned 0.28% in the quarter; however, China has been directly impacted by the rising trade tensions with the US and subsequently returned -6.27%. The US announced 10% tariffs on a further $200bn of Chinese exports in September, adding to the tariffs on $50bn of Chinese goods already announced. China responded in kind, placing tariffs on the remaining $60bn of US exports. This has been a significant escalation in the dispute, however talks are ongoing through different channels and President Trump may meet with President Xi Jinping at the G20 summit at the end of November.

    Fund attribution

    The Neptune China fund returned -8.72% in the quarter due to the impact of the trade war as well as numerous new regulations. In particular, there were new draft regulations placed on the education sector that could limit business growth through acquisitions, which consequently impacted our education stocks. The government also announced national healthcare reform goals including a reduction in drug pricing. As a result, we have reduced our positioning in both sectors. Counteracting these positions was good relative performance in the IT and materials sectors due to stock selection and good performance from our energy stocks due to the increase in oil price.

    Examining the Chinese government’s response to the trade tensions, we have subsequently reduced our overweight position in the consumer discretionary sector, and increased our weighting in the materials sector. We believe that demand for materials from the infrastructure sector will increase as the government continues to support industrial investment to stimulate the economy. We also added to our positions in the energy sector due to a strong outlook for the oil price; this is largely due to the impending impact from US sanctions on Iran and limited spare capacity in the market.

    Outlook

    The trade war continues and President Trump has announced that the tariff on the $200bn worth of goods will increase from 10% up to 25% at the beginning of next year. However, China has plenty of policy strategies to mitigate the impact of the tariffs. So far, these strategies have included income tax cuts to encourage consumer spending, stimulus to the industrial sector and a reductions in the banks’ reserve requirement ratio to increase the availability of money for lending. The Chinese RMB has also weakened, making the cost of exports from China cheaper and therefore significantly helping to offset the impact of tariffs. We also believe the ‘Made in China 2025’ strategy will remain intact despite pressure from the US, which we believe will actually spur China to concentrate further on the strategy and speed up industrial upgrading.

    Ruth Chambers

    Fund Manager

    Relative performance came from stock selection in the IT and materials sectors

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 170.00 -0.87 14/12/2018
    A Acc GBP 407.30 -0.85 14/12/2018

    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

    Codes & fees

    ISIN SEDOL Bloomberg Ongoing charge (%)
    C Acc GBP GB00B5Q38588 B5Q3858 NECHCAC:LN 1.06
    A Acc GBP GB00B04H0Y06 B04H0Y0 CFNCHAA:LN 2.06

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