Overview

The Neptune Emerging Markets Fund gives investors exposure to the fast growth potential of the world’s emerging economies. Fund Manager Ewan Thompson is able to tap into the best investment opportunities from across the emerging markets globally, to build a diversified portfolio. The Fund aims to provide capital growth, with the potential for some income, by investing in a diverse selection of stocks.

Investment objective

To provide capital growth, with the potential for some income, by investing mainly in companies based in emerging markets worldwide, selected at the manager's discretion.

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

Ongoing charge (%) 0.90**
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B8J6SV12
Bloomberg NEPEMCA:LN
SEDOL B8J6SV1

Fund managers

Ewan Thompson

Fund Manager
  • Role at Neptune

    Investment Director, Head of Emerging Market Equities

  • Time at Neptune

    13 years

  • Research focus

    Metals and Mining

Ruth Chambers

Assistant Manager
  • Role at Neptune

    Fund Manager

  • Time at Neptune

    3 years

  • Research focus

    Energy and Utilities

Thomas Smith

Assistant Manager
  • Role at Neptune

    Investment Director, Head of European Equities

  • Time at Neptune

    9 years

  • Research focus

    Energy and Utilities

Robin Geffen

Assistant Manager

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs 10 yrs Launch
Fund 1.6 6.3 -4.8 61.5 69.9 153.8 142.8
Benchmark 3.0 7.5 0.1 51.2 56.1 167.9 143.9
IA sector 2.7 8.0 -1.4 45.6 50.2 152.4 132.9
IA rank 86/106 84/106 84/103 12/98 15/88 24/42 19/39
Quartile 4 4 4 1 1 3 2
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 0.8 1.1 29.2 27.6 -10.7
Benchmark 4.3 -9.7 33.1 25.8 -8.9
IA sector 4.3 -8.8 32.0 24.7 -11.5
IA rank 72/87 1/93 64/97 35/101 44/100
Quartile 4 1 3 2 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 30/09/2008, 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 30/09/2008 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 Global Emerging Markets and the benchmark is MSCI Emerging Markets 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. ©2019 FE. All rights reserved.

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 0.8 1.1 29.2 27.6 -10.7
Benchmark 4.3 -9.7 33.1 25.8 -8.9
IA sector 4.3 -8.8 32.0 24.7 -11.5
IA rank 72/87 1/93 64/97 35/101 44/100
Quartile 4 1 3 2 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 30/09/2008, 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 30/09/2008 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 Global Emerging Markets and the benchmark is MSCI Emerging Markets 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. ©2019 FE. All rights reserved.

Portfolio

Data as at 31/03/2019

Top ten holdings (%)

FundIndex
Tencent 5.30 4.96
Novatek 4.59 0.29
Taiwan Semiconductor Manufacturing 4.35 0.00
Alibaba Group 4.31 4.47
Rumo 3.52 0.10
Lukoil  3.34 0.83
Sberbank 3.13 0.67
Ping An Insurance Group 3.10 1.14
Haier Electronics 2.90 0.07
Bank Rakyat Indonesia 2.74 0.30

Sector (%)

FundIndex
Financials 30.3 24.2
Materials 15.5 7.4
Information technology 11.0 14.6
Energy 10.4 8.1
Communication services 9.0 12.3
Consumer discretionary 9.0 13.4
Industrials 8.3 5.4
Consumer staples 4.3 6.4
Healthcare 1.5 2.6
Utilities 0.7 2.5
Real estate 0.0 3.2

Country (%)

FundIndex
China 27.5 33.0
Russia 18.2 3.8
Brazil 17.4 7.2
South Korea 9.6 13.0
India 5.9 9.2
South Africa 5.7 5.9
Taiwan 5.5 11.3
UK 3.7 0.0
Indonesia 2.7 2.2
Peru 2.6 0.4
Argentina 1.2 0.0

Top ten holdings (%)

FundIndex
Tencent 5.30 4.96
Novatek 4.59 0.29
Taiwan Semiconductor Manufacturing 4.35 0.00
Alibaba Group 4.31 4.47
Rumo 3.52 0.10
Lukoil  3.34 0.83
Sberbank 3.13 0.67
Ping An Insurance Group 3.10 1.14
Haier Electronics 2.90 0.07
Bank Rakyat Indonesia 2.74 0.30

Sector (%)

FundIndex
Financials 30.3 24.2
Materials 15.5 7.4
Information technology 11.0 14.6
Energy 10.4 8.1
Communication services 9.0 12.3
Consumer discretionary 9.0 13.4
Industrials 8.3 5.4
Consumer staples 4.3 6.4
Healthcare 1.5 2.6
Utilities 0.7 2.5
Real estate 0.0 3.2

Country (%)

FundIndex
China 27.5 33.0
Russia 18.2 3.8
Brazil 17.4 7.2
South Korea 9.6 13.0
India 5.9 9.2
South Africa 5.7 5.9
Taiwan 5.5 11.3
UK 3.7 0.0
Indonesia 2.7 2.2
Peru 2.6 0.4
Argentina 1.2 0.0

    Active share

    Active share 77.7%

    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 45

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q4 2018

    Market overview

    In the final quarter of the year, emerging markets continued the downwards trajectory established since late January, falling -5.2% in sterling terms (a sharper -7.85% drop in US dollars). These declines occurred against a backdrop of negative returns across most global stockmarkets, however it was notable the extent to which emerging markets significantly outperformed developed markets during this period of volatility, with most major markets falling well over 10% (in sterling terms). Moreover, despite the challenging global environment, certain emerging markets recorded very strong positive returns in the quarter – most notably Brazil (+15.0%), Indonesia (+11.4%) and India (+4.9%). Whilst emerging markets have struggled all year, it was only in the final quarter that the all-important S&P 500 began to crack due to concerns over economic growth rates in the world’s largest economy. This had the effect of driving benchmark bond yields lower, relieving some of the pressure on funding costs for key emerging markets. In addition, the US dollar slowed its ascent, which again offered some respite from one of the most notable headwinds for emerging markets in 2018.

    Portfolio attribution

    The markets that outperformed were therefore a combination of those economies previously most under pressure during the higher yield/ stronger US dollar environment, and those with specific drivers such as post-election Brazil. Offsetting this, the markets that fell the most were generally those most tied to global growth, especially the North Asian economies of China (-8.7%), Taiwan (-11.8%) and South Korea (-10.9%). In general, more defensive sectors outperformed, such as utilities and telecoms, whilst more cyclical areas were hit harder, for example energy and materials. However, it was the declines across the technology sector that was felt most acutely given its scale and outperformance in recent years. Principle drivers of the Fund’s relative outperformance were the overweight in Brazil and underweight in Taiwan. In Brazil, holdings in the industrial and financial sectors performed very strongly, driven by the ongoing economic recovery and hopes for market-friendly reform agenda under the new administration led by Bolsanaro. In Taiwan, the poor performance of the dominant technology sector weighed on the Index and the Fund’s underweight position in both Taiwan and the technology sector was rewarded.

    Outlook

    The Fund retains a pro-cyclical outlook, with overweight positioning in Brazil and Russia in particular, where economic momentum and valuation support respectively present attractive opportunities. By sector, materials, industrials, energy and financials are preferred, whilst traditional telecoms, consumer staples and technology are the key underweight positions. Turnover in the Fund has been very low, with only one addition in the quarter in the form of Brazilian iron ore producer Vale, where robust commodity pricing continues to generate significant free cash flow and enable corporate deleveraging.

    Ewan Thompson

    Fund Manager

    Despite the challenging global environment, certain emerging markets recorded very strong positive returns in the quarter – most notably Brazil (+15.0%), Indonesia (+11.4%) and India (+4.9%)

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 164.80 -0.48 18/04/2019
    E Acc GBP 100.10 -0.50 18/04/2019

    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

    Codes & fees

    ISIN SEDOL Bloomberg Ongoing charge (%)
    C Acc GBP GB00B8J6SV12 B8J6SV1 NEPEMCA:LN 0.90**
    E Acc GBP GB00BYWLCP75 BYWLCP7 NEPEMEG:LN 0.70

    *The OCF is capped at 0.90% as at 01/07/2018.

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