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 (%) 0.83
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

    10 years

  • Research focus

    Healthcare

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs Launch
Fund -11.16 -14.40 -16.07 3.44 35.25 337.72
Benchmark -6.66 -6.59 -3.98 19.86 39.67 299.72
IA sector -6.72 -5.29 -3.57 20.45 29.21 173.97
IA rank 257/262 258/260 258/260 239/246 75/233 14/186
Quartile 4 4 4 4 2 1
Large chart

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund 27.10 12.82 14.14 3.93 14.46
Benchmark 32.27 3.66 11.17 6.66 17.78
IA sector 27.70 1.29 5.77 11.16 14.09
IA rank 107/227 4/236 27/241 219/249 91/257
Quartile 2 1 1 4 2

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.

The Elite Rating™ system is proprietary to FundCalibre Ltd, but should not be taken as a recommendation. 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 27.10 12.82 14.14 3.93 14.46
Benchmark 32.27 3.66 11.17 6.66 17.78
IA sector 27.70 1.29 5.77 11.16 14.09
IA rank 107/227 4/236 27/241 219/249 91/257
Quartile 2 1 1 4 2

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.

The Elite Rating™ system is proprietary to FundCalibre Ltd, but should not be taken as a recommendation. 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
NCC Group 9.49 0.00
Devro 9.30 0.00
Spirent Communications 8.64 0.20
De La Rue 6.27 0.00
Equiniti 4.88 0.20
Chemring Group 4.58 0.00
PayPoint 4.56 0.00
Euromoney Institutional Investor 4.45 0.19
Vectura 4.45 0.00
Lancashire Holdings 4.33 0.33

Sector (%)

FundIndex
Information technology 24.9 4.0
Industrials 22.3 20.3
Consumer staples 12.5 3.0
Healthcare 11.9 4.4
Financials 9.4 33.2
Consumer discretionary 9.2 13.0
Utilities 3.9 2.4
Materials 2.9 5.0
Real estate 0.0 8.6
Communication services 0.0 3.7
Energy 0.0 2.4
Cash 3 0.0

Top ten holdings (%)

FundIndex
NCC Group 9.49 0.00
Devro 9.30 0.00
Spirent Communications 8.64 0.20
De La Rue 6.27 0.00
Equiniti 4.88 0.20
Chemring Group 4.58 0.00
PayPoint 4.56 0.00
Euromoney Institutional Investor 4.45 0.19
Vectura 4.45 0.00
Lancashire Holdings 4.33 0.33

Sector (%)

FundIndex
Information technology 24.9 4.0
Industrials 22.3 20.3
Consumer staples 12.5 3.0
Healthcare 11.9 4.4
Financials 9.4 33.2
Consumer discretionary 9.2 13.0
Utilities 3.9 2.4
Materials 2.9 5.0
Real estate 0.0 8.6
Communication services 0.0 3.7
Energy 0.0 2.4
Cash 3 0.0

    Active share

    Active share 96.0%

    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 25

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q3 2018

    Market overview

    The UK market, including the FTSE 250 Index, was modestly in negative territory for the quarter, as was trade-weighted sterling. Within this, mid-caps slightly underperformed and small-caps fractionally outperformed the larger-cap stocks, with the Fund outperforming its FTSE 250 benchmark. I 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.

    Our long-held concerns over the outlook for the UK consumer continued to be reflected in economic data and corporate updates. Whilst valuations in some domestic consumer cyclical companies are optically low, we remain underweight this area of the market. Where we do have exposure to UK-focused companies, we primarily target those with structural earnings drivers and highly visible earnings pipelines.

    Fund attribution

    Strong performance over the third quarter of the year came from Spirent, the communications technology company, which benefited from a strong peer’s trading update and more broadly stands to reap rewards from the impending 5G telecom upgrade cycle. In addition, the stock benefited from the announcement that it would be moving out of the small cap index and into the FTSE 250 Index. Poor relative performance came from the Fund’s holding in RPS, the environmental consultancy company. There was no fundamental reason for the performance of the stock over the period and we added to our position on weakness.

    Outlook

    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. 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.

    We believe these silos enable the Neptune UK Mid Cap Fund to outperform and maintain a low correlation and volatility relative to the market. By having at least 20% of the portfolio invested in each of these three themes, the Fund seeks to limit its downside risk. Although in a rapidly rising market this may mean performance modestly underperforms Index gains, it should allow the Fund to generate periods of outperformance when markets are flat, falling or exhibiting volatility.

    While we are somewhat cautious of elevated valuations in the broad market, we believe that the current environment creates unusually large opportunities for alpha generation.

    Mark Martin

    Fund Manager

    We continue to focus on maximising risk-adjusted performance over the business cycle by way of our style agnostic approach

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 141.60 -1.19 14/12/2018
    C Inc GBP 91.48 -1.18 14/12/2018
    A Acc GBP 389.10 -1.17 14/12/2018
    D Acc GBP 127.40 -1.16 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 GB00B909H085 B909H08 NEPUKCA:LN 0.83
    C Inc GBP GB00BWFGFL27 BWFGFL2 NUPUCIG:LN 0.83
    A Acc GBP GB00B3D7FD61 B3D7FD6 NEPUKAA:LN 1.68
    D Acc GBP GB00BFZC7595 BFZC759 NEPUDAB:LN 0.73

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