Overview

The Neptune UK Mid Cap Fund invests in medium-sized companies with the potential for high growth. Fund Manager Mark Martin has a strong focus on minimising volatility and protecting capital during down markets, using a disciplined investment process to build a concentrated but diversified portfolio.

Investment objective

To provide capital growth by investing mainly in UK smaller and medium-sized companies, selected at the manager's discretion. The manager will choose investments from those that are listed on the FTSE Mid 250 Index as well as from the 50 largest companies on the FTSE Small Cap Index (excluding investment trusts and other funds).

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

Ongoing charge (%) 0.79
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B909H085
Bloomberg NEPUKCA:LN
SEDOL B909H08

Fund managers

Mark Martin

Fund Manager
  • Role at Neptune

    Investment Director, Head of UK Equities

  • Time at Neptune

    11 years

  • Research focus

    Healthcare

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs 10 yrs Launch
Fund -5.3 3.4 -12.9 2.5 20.4 251.1 329.9
Benchmark -4.0 9.8 -6.4 19.9 35.8 229.0 307.7
IA sector -3.1 10.4 -4.7 23.8 28.8 155.1 183.7
IA rank 239/263 251/262 245/260 237/245 174/231 22/193 18/191
Quartile 4 4 4 4 3 1 1
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 12.8 14.1 3.9 14.5 -18.7
Benchmark 3.7 11.2 6.7 17.8 -13.3
IA sector 1.4 5.8 11.2 14.2 -11.1
IA rank 4/232 26/236 216/245 91/252 249/260
Quartile 1 1 4 2 4

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 15/12/2008, which is the launch of the A Accumulation share class. The C Accumulation share class was launched on 07/05/2013, so during the period from 15/12/2008 to 07/05/2013 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 All Companies and the benchmark is FTSE 250 Mid 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 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. ©2019 FE. All rights reserved.

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 12.8 14.1 3.9 14.5 -18.7
Benchmark 3.7 11.2 6.7 17.8 -13.3
IA sector 1.4 5.8 11.2 14.2 -11.1
IA rank 4/232 26/236 216/245 91/252 249/260
Quartile 1 1 4 2 4

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 15/12/2008, which is the launch of the A Accumulation share class. The C Accumulation share class was launched on 07/05/2013, so during the period from 15/12/2008 to 07/05/2013 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 All Companies and the benchmark is FTSE 250 Mid 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 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. ©2019 FE. All rights reserved.

Portfolio

Data as at 31/05/2019

Top ten holdings (%)

FundIndex
Devro 9.72 0.00
Elementis 8.94 0.30
Morgan Advanced Materials 8.69 0.25
De La Rue 7.17 0.00
Chemring Group 4.67 0.00
IMI plc 4.60 0.88
PZ Cussons 4.59 0.14
Equiniti 4.34 0.26
IP Group 4.27 0.29
ITE Group 4.21 0.00

Sector (%)

FundIndex
Industrials 30.2 20.1
Materials 15.9 5.5
Consumer staples 14.3 2.9
Information technology 12.0 4.7
Healthcare 9.8 3.7
Consumer discretionary 6.9 14.7
Financials 4.3 31.1
Utilities 0.3 2.5
Real estate 0.0 9.0
Communication services 0.0 3.2
Energy 0.0 2.7
Cash 6.3000 0.0

Top ten holdings (%)

FundIndex
Devro 9.72 0.00
Elementis 8.94 0.30
Morgan Advanced Materials 8.69 0.25
De La Rue 7.17 0.00
Chemring Group 4.67 0.00
IMI plc 4.60 0.88
PZ Cussons 4.59 0.14
Equiniti 4.34 0.26
IP Group 4.27 0.29
ITE Group 4.21 0.00

Sector (%)

FundIndex
Industrials 30.2 20.1
Materials 15.9 5.5
Consumer staples 14.3 2.9
Information technology 12.0 4.7
Healthcare 9.8 3.7
Consumer discretionary 6.9 14.7
Financials 4.3 31.1
Utilities 0.3 2.5
Real estate 0.0 9.0
Communication services 0.0 3.2
Energy 0.0 2.7
Cash 6.3000 0.0

    Active share

    Active share 92.8%

    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 25

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q1 2019

    Market overview

    After a disappointing 2018, the UK market, including the FTSE 250 Index, performed strongly over the first quarter. Pleasingly, trade-weighted sterling also performed well despite ongoing worries around Brexit and the domestic political situation in the UK. Within the market, mid-caps modestly outperformed and small-caps modestly underperformed their larger-cap brethren. The Fund underperformed its FTSE 250 benchmark, partly due to its weighting in small caps. We continue to believe it is more important than ever to concentrate on economic risk at this stage in the cycle, with wage pressure building and margin pressure potentially ensuing.

    Portfolio attribution

    The major drag on performance over the quarter came from NCC, the cyber security company, which announced results with poor cash conversion metrics. Having met with management shortly after the update, we came away with renewed confidence that the working capital issues are short-term in nature and indeed should fully reverse in the near future. This is due to a reinvigorated management team and, in particular, improvements within the finance department at the company. Importantly its market position and competitiveness remain strong and the overall market opportunity continues to grow steadily and visibly, driven by regulation. Long-term holding Devro, the sausage casings company, performed well over the quarter and the ongoing benefits of recent years’ capital expenditure place the company in a strong position to grow free cash flow and dividends in coming quarters.

    We remain confident in the prospects for selective UK mid- and small-cap companies, primarily because of attractive company-specific valuations but also due to the potential for further M&A activity. The Fund continues to make use of its ability to invest in large small cap companies and we see exciting opportunities to invest in undervalued companies in this part of the market.

    Outlook

    Given Brexit uncertainty and the negative data surrounding the UK consumer, we believe it is difficult to be a raging bull on the domestic economy. However, within our investable universe, we continue to find attractively valued, high quality businesses that have their own idiosyncratic drivers. Historically, M&A activity has been a major positive for UK mid-caps and therefore the planned takeover of satellite communications company Inmarsat (which, unlike other recent M&A targets, is an internationally-focused business) gives us reason for optimism. Of course, however, increased M&A activity will be largely dependent on the government reaching a resolution to the continued Brexit uncertainty. In the meantime, we continue to focus on maximising risk-adjusted performance over the business cycle by way of our style agnostic approach, structuring the Fund around the three silos of economic recovery, structural growth and corporate turnarounds.

    Mark Martin

    Fund Manager

    We continue to believe it is more important than ever to concentrate on economic risk at this stage in the cycle

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 148.90 0.07 26/06/2019
    C Inc GBP 94.20 0.06 26/06/2019
    A Acc GBP 407.50 0.07 26/06/2019
    D Acc GBP 134.10 0.07 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 GB00B909H085 B909H08 NEPUKCA:LN 0.79
    C Inc GBP GB00BWFGFL27 BWFGFL2 NUPUCIG:LN 0.79
    A Acc GBP GB00B3D7FD61 B3D7FD6 NEPUKAA:LN 1.65
    D Acc GBP GB00BFZC7595 BFZC759 NEPUDAB:LN 0.69

    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