Investment objective

The Investment objective of the Neptune Global Income Fund is to generate income with the potential for long-term (5 years or more) capital growth.

Strategy

The Fund invests in a concentrated portfolio of 20-40 companies that may provide growth opportunities or attractive valuations.

Ongoing charge (%) 1.20
Net yield (%) -
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B9225P64
Bloomberg NEPGIBA:LN
SEDOL B9225P6

Fund managers

Storm Uru

Fund Manager
  • Role at Neptune

    Fund Manager

  • Time at Neptune

    4 years

  • Research focus

    Industrials

Robin Geffen

Assistant Manager

George Boyd-Bowman

Assistant Manager
  • Role at Neptune

    Investment Director, Head of US Equities

  • Time at Neptune

    8 years

  • Research focus

    Financials

Performance^

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs Launch
Fund 5.5 31.2 20.6 43.3 60.7 96.7
Benchmark 4.3 21.7 10.9 47.4 93.9 140.8
IA sector 4.0 19.0 9.2 32.4 62.4 99.1
IA rank 12/55 1/54 4/52 3/46 24/37 18/28
Quartile 1 1 1 1 3 3
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 5.1 3.2 11.1 6.9 -5.2
Benchmark 11.2 3.8 29.4 13.8 -3.3
IA sector 6.7 2.1 24.2 10.2 -5.7
IA rank 25/37 22/39 38/44 44/49 24/52
Quartile 3 3 4 4 2

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. 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 Equity Income and the benchmark is the MSCI AC World 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.

^Please note that on 7 August 2019 the benchmark was changed from the MSCI World Index to the MSCI AC World Index.

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).

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 5.1 3.2 11.1 6.9 -5.2
Benchmark 11.2 3.8 29.4 13.8 -3.3
IA sector 6.7 2.1 24.2 10.2 -5.7
IA rank 25/37 22/39 38/44 44/49 24/52
Quartile 3 3 4 4 2

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. 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 Equity Income and the benchmark is the MSCI AC World 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.

^Please note that on 7 August 2019 the benchmark was changed from the MSCI World Index to the MSCI AC World Index.

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).

Income

Income distribution

XD dates Pay dates Distribution rates* (pence per share)
01 Apr 19 31 May 19 0.6838
01 Jan 19 28 Feb 19 0.8132
01 Oct 18 30 Nov 18 0.8300
01 Jul 18 31 Aug 18 0.7629

*Rates paid per share for the C income shares, the primary distributing share class. For rates on other share classes, please contact us.

Net yield

C Inc GBP 2.51%

Yields quoted for the income share classes, the primary distributing share classes. For yields on other share classes, please contact us.

Dividend risk

Yield from top 10 holdings in portfolio 20.4%

The higher the percentage, the more the fund relies on a smaller number of stocks to generate dividend income. This may make a fund's dividend yield more vulnerable. The lower the percentage, the greater the number of stocks contributing to the fund's overall dividend yield, representing a lower level of dividend risk.

Dividend cover

Average weighted dividend cover of the top 10 equity holdings in the portfolio 2.5
Average weighted dividend cover of the equity holdings in the portfolio 3.0

Dividend cover is the ratio of a company’s profits to the amount of dividend it pays to shareholders. A dividend cover of 2 times means the company’s profits are twice the amount being paid as a dividend, whilst a company with a dividend cover of 1 times is paying out a dividend equal to all of its net profits. Typically, the higher the dividend cover, the safer the company’s dividend payout.

Past performance is not a reliable indicator of future returns. You should not make any assumptions on the future on the basis of performance information. The value of an investment and the income from it can fall as well as rise as a result of market fluctuations and you may not get back the amount originally invested.

Portfolio

Data as at 31/07/2019

Top ten holdings (%)

FundIndex
Alphabet 3.64 1.60
Reckitt Benckiser 3.46 0.12
Visa 3.23 0.67
Chr. Hansen 3.21 0.02
Diploma PLC 3.18 0.00
Microsoft 3.05 2.12
Badger Meter 3.04 0.00
Constellation Software 3.02 0.04
TJX Companies 3.01 0.14
Roche 3.00 0.40

Sector (%)

FundIndex
Information technology 22.5 16.4
Communication services 14.5 8.9
Healthcare 14.1 11.3
Financials 11.5 16.8
Consumer discretionary 7.9 10.9
Industrials 7.5 10.4
Materials 7.3 4.8
Consumer staples 6.2 8.4
Energy 3.8 5.7
Real estate 2.6 3.2
Utilities 2.1 3.3

Region (%)

FundIndex
North America 56.5 59.1
UK 11.4 4.9
Asia Pacific ex Japan 9.3 3.7
Emerging Markets 8.6 11.3
Europe ex UK 8.3 13.5
Japan 5.9 7.1

Top ten holdings (%)

FundIndex
Alphabet 3.64 1.60
Reckitt Benckiser 3.46 0.12
Visa 3.23 0.67
Chr. Hansen 3.21 0.02
Diploma PLC 3.18 0.00
Microsoft 3.05 2.12
Badger Meter 3.04 0.00
Constellation Software 3.02 0.04
TJX Companies 3.01 0.14
Roche 3.00 0.40

Sector (%)

FundIndex
Information technology 22.5 16.4
Communication services 14.5 8.9
Healthcare 14.1 11.3
Financials 11.5 16.8
Consumer discretionary 7.9 10.9
Industrials 7.5 10.4
Materials 7.3 4.8
Consumer staples 6.2 8.4
Energy 3.8 5.7
Real estate 2.6 3.2
Utilities 2.1 3.3

Region (%)

FundIndex
North America 56.5 59.1
UK 11.4 4.9
Asia Pacific ex Japan 9.3 3.7
Emerging Markets 8.6 11.3
Europe ex UK 8.3 13.5
Japan 5.9 7.1

    Active share

    Active share 95.0%

    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 39

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q2 2019

    Market overview

    Following a strong Q1, global markets moved up in synchrony across all asset classes as most central banks signalled further monetary loosening is coming. The outlook for global economic growth continued to deteriorate with Europe leading the growth slowdown. Anticipating global growth developments and political risk is not something we focus on as we believe exceptional businesses bought at a reasonable price will offer attractive longterm value creation opportunities for our clients.

    Portfolio attribution

    Driving the outperformance in the last quarter were stock-specific moves across the portfolio, after many companies continued their run of reporting better results than expectations. An important theme across the portfolio is significant investment in intangible assets, such as R&D, which are not reflected on the balance sheet of the majority of companies we hold. Therefore, we expect companies within our portfolio on average to beat analysts’ expectations, who tend to underappreciate the earnings power of the businesses we seek to invest in. No particular company stands out as contributing significantly to this outperformance, however, some stocks that underperformed in Q1, such as Chase Corporation and CME Group due to idiosyncratic reasons, performed strongly in Q2. Detractors to performance included Untied Health, as concerns over healthcare for all increased, and weaker than expected results from Alphabet dragged on stock performance over the period – which we are unconcerned about due to the fundamentals of the business models and attractive long term opportunity for both companies.

    During the quarter, we made a number of changes to the portfolio as price and value significantly diverged for a couple of our core holdings. Whilst, we seek to have a holding period of 3-5 years so that we can benefit from the companies execution of corporate growth strategy, during periods of market exuberance we take prudent steps to regularly assess our conviction level of our holdings.

    In particular, we exited our positions in Starbucks and Spirax-Sarco as the divergence between price and value started to become extreme. We initially brought Starbucks last October at a price of $57 and after a price rise of 48% we no longer see a positive risk reward for the stock even though the fundamentals of the business remain intact. Spirax-Sarco is a similar case having initially purchased the stock in September last year at £63 and exited at £92 offering a 44% return, but more importantly, market expectations for both companies execution of corporate strategy are now very high with little room for error. We also reduced the conviction rating of a number of our core holdings, such as Apple, Microsoft, and CME Group, due to strong recent performance and in line with reducing conviction level of our holdings as stock prices convergence on our estimate of intrinsic value of the companies we hold.

    New purchases over the period included three companies we have followed closely for some time with recent idiosyncratic events causing prices to collapse – Boeing, CHR Hansen and A.O Smith.

    Outlook

    We remain cautiously optimistic about the outlook for equity markets. Importantly, we continue to find new investment opportunities in excellent companies when market sentiment changes quickly. In terms of dividend yield, with the recent outperformance of the Fund this year we have lowered our yield target to 2.7%, which represents ~110% of the MSCI yield.

    Storm Uru

    Fund Manager

    Driving the outperformance in the last quarter were stock-specific moves across the portfolio, after many companies continued their run of reporting better results than expectations

    Related event

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 194.70 0.99 20/08/2019
    C Inc GBP 158.20 1.02 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 GB00B9225P64 B9225P6 NEPGIBA:LN 1.20
    C Inc GBP GB00B91RFZ23 B91RFZ2 NEPGIBI:LN 1.20

    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