Overview

The Neptune Income Fund consists of a 33 equally-weighted stock portfolio with the aim of generating a yield in excess of the FTSE All-Share Index. Veteran income investor Robin Geffen has a strong focus on minimising dividend risk by maintaining a diversified portfolio, guarding against an overreliance on particular stocks. The Fund invests predominantly in UK companies but has the ability to invest up to 20% in income opportunities overseas.

Investment objective

To provide a rising level of income with the potential for some capital growth also. The Fund invests mainly in UK companies’ shares and fixed interest stocks (so called because they have a set interest rate), although it also invests overseas. The manager takes a high conviction approach, leading to a focused portfolio of 30-40 holdings that have been selected at their discretion.

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

Ongoing charge (%) 0.81
Net yield (%) -
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B8JCR452
Bloomberg CFNINCA:LN
SEDOL B8JCR45

Fund managers

Robin Geffen

Fund Manager

George Boyd-Bowman

Assistant Manager
  • Role at Neptune

    Investment Director, Head of US Equities

  • Time at Neptune

    8 years

  • Research focus

    Financials

Storm Uru

Assistant Manager
  • Role at Neptune

    Fund Manager

  • Time at Neptune

    4 years

  • Research focus

    Industrials

James O'Connor

Assistant Manager
  • Role at Neptune

    Assistant Fund Manager

  • Time at Neptune

    3 years

  • Research focus

    Industrials and Materials

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs 10 yrs 15 yrs Launch
Fund -3.2 7.1 -0.5 31.4 41.9 148.9 219.4 311.9
Benchmark -3.0 9.0 -3.2 28.4 29.3 149.4 204.1 272.5
IA sector -3.7 8.1 -5.1 17.5 24.7 146.4 182.7 251.7
IA rank 28/85 55/85 7/84 3/77 2/73 29/55 8/37 5/32
Quartile 2 3 1 1 1 3 1 1
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 2.0 6.3 14.5 11.6 -3.4
Benchmark 1.2 1.0 16.8 13.1 -9.5
IA sector 3.5 6.5 9.2 11.7 -10.5
IA rank 54/75 36/75 9/79 43/81 4/88
Quartile 3 2 1 3 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 31/12/2002, 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 31/12/2002 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 UK Equity Income and the benchmark is FTSE All-Share 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.

FTSE International Limited ("FTSE") © FTSE 2019. FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

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 2.0 6.3 14.5 11.6 -3.4
Benchmark 1.2 1.0 16.8 13.1 -9.5
IA sector 3.5 6.5 9.2 11.7 -10.5
IA rank 54/75 36/75 9/79 43/81 4/88
Quartile 3 2 1 3 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 31/12/2002, 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 31/12/2002 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 UK Equity Income and the benchmark is FTSE All-Share 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.

FTSE International Limited ("FTSE") © FTSE 2019. FTSE® is a trade mark of the London Stock Exchange Group companies and is used by FTSE under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE's express written consent.

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.

Income

Income distribution

XD dates Pay dates Distribution rates* (pence per share)
01 Apr 19 31 May 19 1.1019
01 Jan 19 28 Feb 19 1.9118

*Rates paid per share for the C income shares, the primary distributing share class. For rates on other share classes, please contact us.
Please note, as of 2 January 2019, the Fund pays quarterly income distributions in Feb, May, Aug and Nov.

Net yield

C Inc GBP 3.70%
A Inc GBP 3.73%

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 22.3%

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 1.4
Average weighted dividend cover of the equity holdings in the portfolio 1.3

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
3i Group 3.58 0.45
Johnson Matthey 3.30 0.26
CME Group 3.15 0.00
GlaxoSmithKline 3.14 3.34
Micro Focus 3.05 0.29
Microsoft 3.05 0.00
Standard Life Aberdeen 3.03 0.30
Sage Group 3.02 0.36
Unilever 3.01 2.37
HSBC 3.01 5.81

Sector (%)

FundIndex
Financials 27.5 23.4
Materials 20.8 9.4
Information technology 19.2 1.8
Consumer staples 9.0 13.8
Healthcare 6.1 8.3
Energy 5.9 14.3
Industrials 5.8 11.0
Consumer discretionary 3.0 7.8
Alternatives 1.6 0.0
Communication services 0.0 4.8
Utilities 0.0 2.8
Cash 1.1000 0.0

Top ten holdings (%)

FundIndex
3i Group 3.58 0.45
Johnson Matthey 3.30 0.26
CME Group 3.15 0.00
GlaxoSmithKline 3.14 3.34
Micro Focus 3.05 0.29
Microsoft 3.05 0.00
Standard Life Aberdeen 3.03 0.30
Sage Group 3.02 0.36
Unilever 3.01 2.37
HSBC 3.01 5.81

Sector (%)

FundIndex
Financials 27.5 23.4
Materials 20.8 9.4
Information technology 19.2 1.8
Consumer staples 9.0 13.8
Healthcare 6.1 8.3
Energy 5.9 14.3
Industrials 5.8 11.0
Consumer discretionary 3.0 7.8
Alternatives 1.6 0.0
Communication services 0.0 4.8
Utilities 0.0 2.8
Cash 1.1000 0.0

    Active share

    Active share 63.9%

    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 33

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q1 2019

    Market overview

    Following a particularly painful December, the first month of the year was a very strong one for global equities, and the UK was no exception. From a global perspective, more dovish rhetoric from the US Federal Reserve combined with progress surrounding the US/China trade negotiations bolstered sentiment towards risk assets. Within the UK, the FTSE All-Share Index was primarily driven by more domestic areas of the market, with many consumer-facing stocks posting better than anticipated results. Furthermore, though Brexit continued to dominate the headlines, the pound strengthened versus the dollar. This all contributed to the significant outperformance of the more domestically-orientated FTSE 250 Index versus the FTSE 100 Index. Brexit uncertainty dominated the UK market over the second half of the quarter, with parliament voting to temporarily extend its membership to the EU but voted down Theresa May’s withdrawal agreement and against a variety of other motions via indicative votes. The pound bore the brunt of this uncertainty, falling 2% versus the US dollar over the month. Unsurprisingly, this meant the internationally-facing FTSE 100 Index led the market as a result of this currency weakness, while the domestically-orientated FTSE 250 Index posted a negative return. Outside of the UK, global equities continued their strong start to the year thanks largely to more dovish tones from the US Federal Reserve and a stabilisation in China’s economic growth.

    Portfolio attribution

    The Fund’s relative underperformance against the Index and peer group can almost entirely be attributed to its put option allocation, which had played a significant part in its outperformance over the final months of 2018. We have since sold our options on the Nasdaq and S&P 500 but maintain our FTSE 100 Index puts in order to shield the Fund from potential Brexit-induced volatility. Minus the options, the Fund performed in line with the Index, though would have lagged its average peer in the quarter. This is primarily due to the Fund’s large-cap bias, with mid and small-caps having led the market. Drilling down further, the major detractor to the Fund’s relative performance at a stock level was CME Group, which had delivered strong returns in 2018 thanks to heightened market volatility but fell back a degree as the wider market rebounded. The largest single contributor to returns over the quarter was the Fund’s IT holding, Micro Focus. Other contributors to the Fund’s performance were SunTrust Banks, following the rebound in US financials, and our materials holdings such as Antofagasta and Rio Tinto.

    Outlook

    Our outlook remains similar to the start of the year. We continue to believe the global economy is in decent health and that improving Chinese economic growth can help drive attractive equity market returns over the coming year. However, within the UK, the picture is still very mixed. Various economic uncertainties are only being worsened by continued political wrangling over the country’s future relationship with the EU. This means we continue to focus on more internationally-facing companies and are looking to protect capital by maintaining our exposure to put options over the short-term. That being said, the sheer size of certain share price falls last year means we have identified a number of higher-yielding opportunities within the UK market that we believe offer a high degree of downside protection.

    Robin Geffen

    Fund Manager

    The Index was primarily driven by more domestic areas of the market, with many consumer-facing stocks posting better than anticipated results

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 178.50 0.28 26/06/2019
    C Inc GBP 135.30 0.22 26/06/2019
    A Acc GBP 408.10 0.25 26/06/2019
    A Inc GBP 188.30 0.21 26/06/2019
    B Inc GBP 201.10 0.25 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 GB00B8JCR452 B8JCR45 CFNINCA:LN 0.81
    C Inc GBP GB00B8L7B355 B8L7B35 CFNINCI:LN 0.81
    A Acc GBP GB0032315516 3231551 CFNINAA:LN 1.67
    A Inc GBP GB0032325093 3232509 CFNINAI:LN 1.67
    B Inc GBP GB0032325101 3232510 CFNINBI:LN 1.17

    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