Overview

A high conviction, actively managed portfolio providing exposure to world-class companies based in Europe, excluding the UK. The Fund targets undervalued companies with strong growth potential whilst managers Rob Burnett and Thomas Smith have the freedom to rapidly adjust the portfolio in line with prevailing market conditions.

Investment objective

To provide capital growth by investing mainly in a focused portfolio of approximately 40-60 European companies, selected at the manager's discretion, excluding the UK.

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

Ongoing charge (%) 0.97
Net yield (%) -
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B8LF7310
Bloomberg CFNEOCA:LN
SEDOL B8LF731

Fund managers

Rob Burnett

Co-Fund Manager
  • Role at Neptune

    Investment Director, Head of European Equities

  • Time at Neptune

    16 years

  • Research focus

    Financials

Thomas Smith

Co-Fund Manager
  • Role at Neptune

    Investment Director, Co-Head of Emerging Market Equities

  • Time at Neptune

    9 years

  • Research focus

    Energy and Utilities

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs 10 yrs 15 yrs Launch
Fund -8.76 -14.58 -14.37 36.90 35.62 151.37 408.05 481.16
Benchmark -6.06 -4.11 -5.38 35.38 42.18 160.21 268.27 305.87
IA sector -7.02 -6.21 -6.93 32.48 40.26 170.64 255.57 287.96
IA rank 98/117 113/115 110/112 23/104 62/92 49/73 4/53 4/49
Quartile 4 4 4 1 3 3 1 1
Large chart

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund 23.57 -8.34 9.27 29.07 21.68
Benchmark 26.35 0.02 5.87 19.65 16.75
IA sector 26.75 -0.32 9.92 17.05 17.34
IA rank 68/88 91/93 50/98 2/106 14/110
Quartile 4 4 3 1 1

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 29/11/2002, 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 29/11/2002 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 Europe Excluding UK and the benchmark is MSCI Europe ex UK 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.

FE Alpha Manager 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 23.57 -8.34 9.27 29.07 21.68
Benchmark 26.35 0.02 5.87 19.65 16.75
IA sector 26.75 -0.32 9.92 17.05 17.34
IA rank 68/88 91/93 50/98 2/106 14/110
Quartile 4 4 3 1 1

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 29/11/2002, 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 29/11/2002 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 Europe Excluding UK and the benchmark is MSCI Europe ex UK 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.

FE Alpha Manager 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
Volkswagen 4.45 0.60
E.ON 3.97 0.35
Daimler 3.70 0.89
Commerzbank 3.61 0.16
SKF 3.41 0.10
ArcelorMittal 3.38 0.27
UniCredit 3.36 0.42
Yara International 3.33 0.13
Intesa Sanpaolo 3.23 0.54
Renault  3.01 0.24

Sector (%)

FundIndex
Financials 35.5 18.6
Consumer discretionary 16.5 10.0
Materials 16.2 8.0
Industrials 15.5 14.4
Energy 7.7 5.0
Utilities 4.0 3.9
Communication services 3.8 4.7
Healthcare 0.0 14.3
Consumer staples 0.0 12.7
Information technology 0.0 6.9
Real estate 0.0 1.5
Cash 0.8 0.0

Country (%)

FundIndex
Germany 28.8 20.5
France 14.9 24.2
Italy 11.7 5.0
Spain 9.6 6.5
Netherlands 9.2 7.3
Other Europe 6.9 24.8
Sweden 4.8 5.8
Austria 3.7 0.5
Norway 3.7 1.7
Denmark 3.1 3.6
Other 2.8 0.0
Cash 0.8 0.0

Top ten holdings (%)

FundIndex
Volkswagen 4.45 0.60
E.ON 3.97 0.35
Daimler 3.70 0.89
Commerzbank 3.61 0.16
SKF 3.41 0.10
ArcelorMittal 3.38 0.27
UniCredit 3.36 0.42
Yara International 3.33 0.13
Intesa Sanpaolo 3.23 0.54
Renault  3.01 0.24

Sector (%)

FundIndex
Financials 35.5 18.6
Consumer discretionary 16.5 10.0
Materials 16.2 8.0
Industrials 15.5 14.4
Energy 7.7 5.0
Utilities 4.0 3.9
Communication services 3.8 4.7
Healthcare 0.0 14.3
Consumer staples 0.0 12.7
Information technology 0.0 6.9
Real estate 0.0 1.5
Cash 0.8 0.0

Country (%)

FundIndex
Germany 28.8 20.5
France 14.9 24.2
Italy 11.7 5.0
Spain 9.6 6.5
Netherlands 9.2 7.3
Other Europe 6.9 24.8
Sweden 4.8 5.8
Austria 3.7 0.5
Norway 3.7 1.7
Denmark 3.1 3.6
Other 2.8 0.0
Cash 0.8 0.0

    Active share

    Active share 86.5%

    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 47

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q3 2018

    Market overview

    As has been the case for much of the year, political noise shaped the course of European stockmarkets in the third quarter of 2018. Tariff discussions, Italian politics and the threat of financial contagion from Turkey were the three major sources of pressure, though the period ended in positive territory.

    The interaction between the Italian government and the European Commission has been among the main market concerns over the past three months. This left investors questioning the political regime in Italy and its ability to do business with the rest of Europe. We are not overly concerned by these developments. The finalised Italian budget stands at 2.4% of GDP, and is set to reduce over the coming years. These are not high numbers, particularly given that Italy runs a current account surplus. Debt to GDP is relatively high, but private debt is low and Italy runs a private sector surplus. More importantly still, a “populist” fiscal stance is, in our view, not a bearish event by any means; higher spending in a country that runs a current account surplus, is a pro-growth event. This being the case, we used the resulting weakness in Italian banking stocks to top up our existing positions in Intesa Sanpaolo and Unicredit.

    Europe is not overly exposed to Turkey, nevertheless markets were spooked by the country’s worsening economic situation and precipitous stockmarket falls. Fears of contagion into Eurozone banks were overdone, but were still indicative of the increasingly risk averse tone in markets. This is part of a wider question about the resilience of emerging markets amid a stronger dollar and moderating global growth. As we see it, this is not a major concern, underlying corporates remain robust and global trade volumes are growing at a reasonable rate.

    Tariff discussions were another impact to sentiment over the quarter; while trade fears are likely to stay elevated, we do not see them escalating significantly from here. President Trump’s central focus in these negotiations is China; and while European businesses do have significant exports to the US, so far the tariff levels being discussed look fair rather than punitive.

    There is also limited evidence that the announcements so far are causing a major dislocation in global growth; key indicators now suggest that growth has moderated but will remain in positive territory.

    Outlook

    Tariffs and Turkish economics notwithstanding, the central theme for Eurozone equities at the moment is the rise of populism and what this means for markets. After a decade of low investment and tight living conditions, European electorates are asking for looser fiscal policy. We see this as a positive, pro-growth development. The Fund retains its overweight position in the financial stocks that stand to benefit from (imminent) tighter monetary policy, as well as its tilt towards cyclical sectors that have highly attractive valuations and a clear catalyst for outperformance in the wake of continued economic growth.

    Rob Burnett

    Co-Fund Manager

    The Fund retains its overweight position in the financial stocks that stand to benefit from tighter monetary policy, as well as its tilt towards cyclical sectors

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 161.20 -1.89 14/12/2018
    C Acc GBP Hdg 78.01 -1.87 14/12/2018
    C Inc GBP 125.00 -1.88 14/12/2018
    C Acc EUR 106.10 -1.85 14/12/2018
    A Acc GBP 505.50 -1.86 14/12/2018
    A Inc GBP 421.40 -1.89 14/12/2018
    A Acc EUR 174.00 -1.81 14/12/2018
    B Acc GBP 543.00 -1.88 14/12/2018
    B Inc GBP 431.10 -1.89 14/12/2018
    B Acc EUR 182.50 -1.83 14/12/2018
    D Acc GBP 129.20 -1.90 14/12/2018
    D Acc GBP Hdg 77.82 -1.88 14/12/2018
    E Inc GBP 79.36 -1.87 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 GB00B8LF7310 B8LF731 CFNEOCA:LN 0.97
    C Acc GBP Hdg GB00BFN4FT71 BFN4FT7 NEPEECH:LN 1.00
    C Inc GBP GB00B909GK18 B909GK1 NEPEOCI:LN 0.97
    C Acc EUR GB00BNJZR720 BNJZR72 NEPEOPC:LN 0.97
    A Acc GBP GB0032308594 3230859 CFNEOAA:LN 1.97
    A Inc GBP GB00B058ZH01 B058ZH0 CFNEOAI:LN 1.97
    A Acc EUR GB00B60T5P82 B60T5P8 NEUOAAE:LN 1.97
    B Acc GBP GB0032310012 3231001 CFNEOBA:LN 1.47
    B Inc GBP GB00B058ZP84 B058ZP8 CFNEOBI:LN 1.47
    B Acc EUR GB00B60T5Q99 B60T5Q9 NEUOBAE:LN 1.47
    D Acc GBP GB00BFZC7488 BFZC748 NEPECRA:LN 0.87
    D Acc GBP Hdg GB00BFN4FV93 BFN4FV9 NEPEEDH:LN 0.90
    E Inc GBP GB00BFN4FS64 BFN4FS6 NEPEEAG:LN 0.80

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