Investment objective

The investment objective of the Neptune Emerging Markets 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 (%) 0.90**
Minimum investment
Initial 250,000
Top up 100
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

    10 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 3.0 16.5 5.0 39.6 75.9 100.4 166.1
Benchmark 2.8 13.9 5.2 39.7 53.9 118.8 158.4
IA sector 3.1 16.5 6.6 35.1 50.6 109.4 151.1
IA rank 61/109 50/107 68/106 32/100 10/91 30/43 17/38
Quartile 3 2 3 2 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 -8.7 32.0 24.9 -11.5
IA rank 72/87 1/93 64/96 36/101 46/103
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.

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 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 -8.7 32.0 24.9 -11.5
IA rank 72/87 1/93 64/96 36/101 46/103
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.

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 31/07/2019

Top ten holdings (%)

FundIndex
Tencent 5.72 4.97
Samsung 5.13 3.84
Taiwan Semiconductor Manufacturing 5.07 0.00
Novatek 4.67 0.35
Alibaba Group 4.29 4.55
Ping An Insurance Group 4.11 1.31
Sberbank 4.03 0.73
Bank Rakyat Indonesia 3.79 0.33
Rumo 3.71 0.12
Naspers 3.60 1.98

Sector (%)

FundIndex
Financials 30.1 24.8
Materials 14.0 7.2
Information technology 12.3 14.3
Energy 11.3 7.8
Communication services 9.4 11.9
Consumer discretionary 8.2 13.6
Industrials 8.2 5.3
Consumer staples 3.6 6.7
Healthcare 1.1 2.6
Utilities 1.0 2.8
Real estate 0.0 3.0
Cash 0.8000 0.0

Country (%)

FundIndex
China 23.7 31.9
Brazil 21.6 8.0
Russia 19.6 4.0
South Africa 7.7 5.8
South Korea 7.2 11.8
Taiwan 6.5 11.2
Indonesia 3.8 2.2
Peru 2.9 0.4
India 2.4 8.6
Argentina 2.2 0.4
UK 1.6 0.0
Cash 0.8000 0.0

Top ten holdings (%)

FundIndex
Tencent 5.72 4.97
Samsung 5.13 3.84
Taiwan Semiconductor Manufacturing 5.07 0.00
Novatek 4.67 0.35
Alibaba Group 4.29 4.55
Ping An Insurance Group 4.11 1.31
Sberbank 4.03 0.73
Bank Rakyat Indonesia 3.79 0.33
Rumo 3.71 0.12
Naspers 3.60 1.98

Sector (%)

FundIndex
Financials 30.1 24.8
Materials 14.0 7.2
Information technology 12.3 14.3
Energy 11.3 7.8
Communication services 9.4 11.9
Consumer discretionary 8.2 13.6
Industrials 8.2 5.3
Consumer staples 3.6 6.7
Healthcare 1.1 2.6
Utilities 1.0 2.8
Real estate 0.0 3.0
Cash 0.8000 0.0

Country (%)

FundIndex
China 23.7 31.9
Brazil 21.6 8.0
Russia 19.6 4.0
South Africa 7.7 5.8
South Korea 7.2 11.8
Taiwan 6.5 11.2
Indonesia 3.8 2.2
Peru 2.9 0.4
India 2.4 8.6
Argentina 2.2 0.4
UK 1.6 0.0
Cash 0.8000 0.0

    Active share

    Active share 79.4%

    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 36

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q2 2019

    Market overview

    Emerging market equities endured a somewhat erratic second quarter before ending the period essentially flat in US dollar terms (+2% for UK investors due to sterling’s weakness) – as a mid-quarter sell-off was followed by a strong recovery in June. This leaves the MSCI Emerging Markets Index up 9.2% for the year, a strong return, albeit lagging Developed Markets (+15.6%) somewhat. Emerging markets have generally been under sporadic pressure this year from the off-on trade dispute between China and the US and concerns over the ascent of the US dollar, though the latter pressure subsided somewhat in June, driving the market recovery. Moreover, the other erstwhile concern for emerging markets – the rise in US bond yields in 2018 continued to reverse, with the benchmark 10yr Treasury yield falling towards 2% by the end of the quarter from a high of 3.2% in November. The overall flat market performance belies some divergent returns at both sector and country level. Most notably, China was a significant underperformer (-5.2%) weighed down by the ongoing trade spat with the US as well as continued tepid economic data. Meanwhile, far and away the best market was Russia (+14.5%), where positive news on dividend policy drove Index heavyweight Gazprom significantly higher, with the whole market benefitting on the implications for improved corporate government.

    Portfolio attribution

    In the second quarter, the Fund benefited notably from strong stock performance in the energy and financial sectors. In the former, positions in Russian holdings Novatek, Lukoil and Gazpromneft traded particularly well, driven by the positive developments in the Russian market, as well as improved sentiment surrounding the oil price. Financials was one of the strongest sectors over the quarter so the Fund’svoverweight position was beneficial, but more importantly stock selection played a major role as bank holdings such as Sberbank (Russia), Banco Macro (Argentina) and Bank Rakyat (Indonesia) outperformed wider peers. In addition, holdings in the insurance sector – Ping An (China) and Discovery (South Africa) - also performed particularly well, supported by the more benign interest rate environment.

    Outlook

    The outlook for emerging markets remains compelling – relative valuations are attractive and sentiment is currently poor. History suggests it is moments such as this where it pays to accumulate the asset class. The headwinds – trade wars, bond yields, US dollar – are all extremely well known (hence the poor sentiment) and if anything are now easing off. The valuation discount between emerging and developed markets remains at a wide level, bolstering the case that emerging markets can and should outperform over the coming years from this attractive base. The Fund is positioned to benefit from a recovery in emerging markets and therefore is focused on recovery opportunities in the more cyclical sectors (materials, energy, financials) where valuations are more attractive, and remains underweight more defensive, expensive sectors that are more broadly owned (healthcare, consumer staples). Despite the short-term noise, the Fund has retained its conviction in this approach, whilst also maintaining appropriate diversification using our Three Silos approach. Turnover in the Fund is generally very low and this was no different in the past quarter where we made very little by way of substantive changes to our outlook, and therefore by extension the portfolio itself.

    Ewan Thompson

    Fund Manager

    In the second quarter, the Fund benefited notably from strong stock performance in the energy and financial sectors

    Related event

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 160.90 0.06 20/08/2019
    E Acc GBP 97.72 0.08 20/08/2019

    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
    31/07/2019
    Quarterly Commentary
    30/06/2019
    Key Investor Information Document
    07/08/2019

    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.

    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