Investment objective

The investment objective of the Neptune China Fund is to generate long-term (5 years or more) capital growth.

Strategy

The Fund invests in a mix of companies that may provide growth opportunities, attractive valuations, or special situations. Special situations can exist where companies are out of favour, misunderstood or where management changes or takeovers are expected.

Ongoing charge (%) 1.04
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 -3.0 12.0 -1.0 29.5 52.9 110.9 356.3
Benchmark -3.7 12.7 1.3 38.5 72.8 130.1 588.2
IA sector -2.9 17.5 4.8 38.9 74.9 140.9 464.0
IA rank 24/36 29/36 31/36 28/35 30/33 15/22 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 -13.9
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 -13.9
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 31/08/2019

Top ten holdings (%)

FundIndex
Alibaba Group 9.74 14.55
Tencent 9.40 13.83
Ping An Insurance Group 6.53 4.09
China Construction Bank 5.24 4.17
Bank of China 4.03 1.82
Li-Ning 3.75 0.34
China Mobile 3.16 2.97
Industrial & Commercial Bank of China 3.04 2.40
Shenzhou International Group 2.93 0.60
China Overseas 2.63 0.71

Sector (%)

FundIndex
Consumer discretionary 27.5 25.1
Financials 21.3 21.7
Communication services 15.5 22.8
Information technology 6.0 3.4
Real estate 5.7 5.2
Industrials 5.6 5.3
Consumer staples 4.5 3.7
Energy 4.2 3.9
Utilities 3.8 3.1
Healthcare 2.7 3.7
Materials 2.0 2.1
Cash 1.2000 0.0

Top ten holdings (%)

FundIndex
Alibaba Group 9.74 14.55
Tencent 9.40 13.83
Ping An Insurance Group 6.53 4.09
China Construction Bank 5.24 4.17
Bank of China 4.03 1.82
Li-Ning 3.75 0.34
China Mobile 3.16 2.97
Industrial & Commercial Bank of China 3.04 2.40
Shenzhou International Group 2.93 0.60
China Overseas 2.63 0.71

Sector (%)

FundIndex
Consumer discretionary 27.5 25.1
Financials 21.3 21.7
Communication services 15.5 22.8
Information technology 6.0 3.4
Real estate 5.7 5.2
Industrials 5.6 5.3
Consumer staples 4.5 3.7
Energy 4.2 3.9
Utilities 3.8 3.1
Healthcare 2.7 3.7
Materials 2.0 2.1
Cash 1.2000 0.0

    Active share

    Active share 47.8%

    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 49

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q2 2019

    Portfolio attribution

    The main contributors in the portfolio were the strong performance of stocks in the consumer discretionary and financials sectors. In the discretionary sector, Li Ning, a domestic sportswear company performed very well after a positive profit alert driven by strong sales growth. On the financials side, we avoided holding the Chinese brokers, which underperformed in the quarter due to their sensitivity to retail market sentiment, which was driven lower by the negative trade war news.

    This quarter, we added positions within communication services to reduce our underweight in the sector. We added a leading online portal for Chinese car buyers as we believe it is the dominant advertising channel for the industry with a long runway for growth. We also added a differentiated ecommerce service company providing online store design and digital marketing; we believe this company should benefit from continued growth in online retail and improving margins. We also added a wastewater processing company to the portfolio in line with continued focus of Beijing on the environment. These positions were funded by reductions in the utilities and consumer sectors.

    Outlook

    At the end of the quarter, there was confirmation that tariffs will not be levied on the remaining $300bn of Chinese exports. Global markets have rallied on the back of the G20 meeting, which has opened up the possibility of a more protracted truce and supported investor confidence. However, no deadline was set and we believe that political factors may now come into play with the US presidential election approaching. Uncertainty remains over Donald Trump’s negotiation tactics, however, we continue to believe that both sides ultimately want a deal and an agreement will be reached in due course. Stimulus measures continue in China, with further infrastructure stimulus announced this quarter; we continue to believe stimulus will be specific and targeted and that the growth target of 6-6.5% will be met this year.

    Ruth Chambers

    Fund Manager

    The main contributors in the portfolio were the strong performance of stocks in the consumer discretionary and financials sectors

    Related event

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 181.90 -0.49 20/09/2019
    A Acc GBP 432.50 -0.51 20/09/2019

    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
    31/08/2019
    Quarterly Commentary
    30/06/2019
    Key Investor Information Document
    28/08/2019

    Codes & fees

    ISIN SEDOL Bloomberg Ongoing charge (%)
    C Acc GBP GB00B5Q38588 B5Q3858 NECHCAC:LN 1.04
    A Acc GBP GB00B04H0Y06 B04H0Y0 CFNCHAA:LN 2.04

    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

    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