Overview

The Neptune Global Income Fund is designed for investors seeking regular equity income and long-term growth from a global portfolio. Leveraging Neptune’s global sector research, its income share classes pay distributions four times a year from a concentrated portfolio of stocks identified by the fund manager as being able to grow their dividends significantly. The Fund could be held as a more cautious alternative to traditional global growth funds, or by investors who want to diversify their income sources outside the UK while retaining the potential for capital growth.

Investment objective

To generate rising levels of income, with the potential for capital growth also. The Fund invests in global companies’ shares and the manager takes a high conviction approach, leading to a focused portfolio of holdings selected at their discretion.

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

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 0.3 19.9 13.0 38.0 46.9 79.8
Benchmark -2.4 11.2 5.9 52.1 80.0 130.3
IA sector -1.7 9.6 4.3 36.5 48.5 83.4
IA rank 11/56 1/55 7/53 23/46 22/36 20/28
Quartile 1 1 1 2 3 3
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 5.1 3.2 11.1 6.9 -5.2
Benchmark 12.1 5.5 29.0 12.4 -2.5
IA sector 7.6 3.1 23.6 10.7 -5.7
IA rank 25/36 22/40 39/45 44/50 25/54
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 MSCI 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.

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 12.1 5.5 29.0 12.4 -2.5
IA sector 7.6 3.1 23.6 10.7 -5.7
IA rank 25/36 22/40 39/45 44/50 25/54
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 MSCI 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.

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 0.7819

*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 2.09%

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 20.9%

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 2.2
Average weighted dividend cover of the equity holdings in the portfolio 2.1

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 31/05/2019

Top ten holdings (%)

FundIndex
Alphabet 4.04 1.75
Reckitt Benckiser 3.66 0.15
Apple 3.60 2.13
Z Energy 3.55 0.00
UnitedHealth Group 3.33 0.60
CME Group 3.33 0.18
Visa 3.28 0.73
Microsoft 3.26 2.32
American Tower Corporation 3.24 0.24
Moody's 3.24 0.08

Sector (%)

FundIndex
Information technology 21.6 16.0
Financials 15.9 15.9
Communication services 11.4 8.5
Healthcare 9.5 12.6
Industrials 9.2 11.1
Consumer staples 6.5 8.7
Consumer discretionary 6.4 10.4
Materials 6.0 4.4
Utilities 3.7 3.4
Energy 3.5 5.6
Real estate 3.2 3.4
Cash 3.1000 0.0

Region (%)

FundIndex
North America 56.4 65.8
Emerging Markets 11.8 0.2
Asia Pacific ex Japan 11.4 4.3
UK 8.4 5.8
Europe ex UK 6.2 15.6
Japan 2.7 8.3
Cash 3.1000 0.0

Top ten holdings (%)

FundIndex
Alphabet 4.04 1.75
Reckitt Benckiser 3.66 0.15
Apple 3.60 2.13
Z Energy 3.55 0.00
UnitedHealth Group 3.33 0.60
CME Group 3.33 0.18
Visa 3.28 0.73
Microsoft 3.26 2.32
American Tower Corporation 3.24 0.24
Moody's 3.24 0.08

Sector (%)

FundIndex
Information technology 21.6 16.0
Financials 15.9 15.9
Communication services 11.4 8.5
Healthcare 9.5 12.6
Industrials 9.2 11.1
Consumer staples 6.5 8.7
Consumer discretionary 6.4 10.4
Materials 6.0 4.4
Utilities 3.7 3.4
Energy 3.5 5.6
Real estate 3.2 3.4
Cash 3.1000 0.0

Region (%)

FundIndex
North America 56.4 65.8
Emerging Markets 11.8 0.2
Asia Pacific ex Japan 11.4 4.3
UK 8.4 5.8
Europe ex UK 6.2 15.6
Japan 2.7 8.3
Cash 3.1000 0.0

    Active share

    Active share 90.1%

    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 35

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q1 2019

    Market overview

    After a volatile end to 2018, liquidity returned to equity markets in early January with global stocks climbing a wall of worry into the end of Q1. Importantly, financial conditions softened after both the ECB and Fed walked back previous comments on future tightening of monetary policy. Unfortunately, the indiscriminate selling in Q4 2018 unfairly penalised companies we hold which, in our opinion, have attractive long-term prospects. However, as long-term investors we took advantage of cheaper equity prices and increased our weighting to holdings where the margin of safety to our estimate of fair value offered the most attractive returns. Importantly, in all financial conditions, we believe exceptional businesses bought at a reasonable price over time will offer attractive long-term 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 reporting better results than expectations provided a catalyst to many recently oversold stocks particularly in the information technology and industrial sectors.

    During the quarter, a number of management teams, of companies we hold in the portfolio, pointed to the importance of pricing power when macro headwinds persist, which reinforces our philosophy of owning companies we believe have a competitive advantage within their core business. In particular, Apple and Constellation Software overcame depressed expectations in Q4 to report results that reaffirm to the market that even though their products and services are not immune to business cycle effects, they remain repeatable business models with unique sustainable competitive advantages with clear business strategies.

    We also applaud companies that are willing to invest heavily in their core competency to drive future revenue growth. Therefore, we were happy to hear Tencent are forging ahead with building out their advertising and cloud platforms rather than focusing on monetisation, and that Nvidia’s new Turing Architecture demand is stronger than expected, helping the company’s stock price overcome its strong pullback. Longer term, we believe a number of companies we hold in the portfolio have the ability to reinvest significant amounts of cash generated by the business back into it instead of returning it all back to shareholders. We believe both reinvesting cash generated by the business at attractive levels of return and returning cash to shareholders are critical to creating value for shareholders.

    We made two major investments in the first quarter of the year, purchasing Oriflame and Shoprite. Oriflame is a Scandinavian direct to consumer beauty company with a wide portfolio of Swedish, nature-inspired, innovative products and is marketed through 3 million independent Oriflame consultants. Due to the business model, the company has very low capital requirements and enjoys a high profitability compared to competitors. The company has a unique market position in emerging markets, a recent source of weakness, and is set to benefit from two structural drivers: firstly, the move to online distribution through social media platforms where the company has an entrenched position. Secondly, the longer-term demand profile from the rise in income within emerging markets should sustain a high growth, which is incredibly attractive given the operating leverage embedded in Oriflame’s business model.

    Shoprite is the largest food retailer in Africa, and within its key market, South Africa, enjoys a dominant market position. The embattled group has succumb to weak macro-conditions and a range of idiosyncratic events leading to a change in senior management and a review of the corporate strategy. Importantly, the company is shifting to a lower capital-intensive business model and is exiting a transformational IT infrastructure update. Positioned in Africa, the company has tremendous long-term growth prospects and both the company’s low-cost approach and centralised distribution represent rare and expensive competitive advantages in Africa.

    Outlook

    Our outlook for equity markets remains constructive. Even though equities have risen 10.1% year to date, we remain on the lookout for animal spirits to take effect following the recent dovish shift by central banks. In addition, we are looking to take advantage of any fresh sell offs to make investments in companies we believe have exceptional business models but are trading close to fair value. In terms of dividend yield, we are targeting a yield of around 3% for 2019 representing growth of the dividend in-line with our philosophy that companies which can grow dividends faster than the market over the long run will outperform the market.

    Storm Uru

    Fund Manager

    Driving the outperformance in the last quarter were stock-specific moves across the portfolio

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 185.90 -0.27 26/06/2019
    C Inc GBP 152.70 -0.26 26/06/2019

    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
    31/05/2019
    Quarterly Commentary
    31/03/2019
    Key Investor Information Document
    08/02/2019

    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

    Veronika Blazicek

    Sales Executive - UK & Europe

    Tel: +44 20 3249 0189

    Mob: +44 7850 770 480

    Email: veronika.blazicek

    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