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 1.5 1.3 -12.1 1.8 21.7 321.9 321.1
Benchmark -0.1 9.8 1.0 22.6 34.5 293.6 307.4
IA sector 1.7 9.0 2.8 24.8 28.8 192.7 180.2
IA rank 167/265 262/265 258/260 244/248 183/234 15/198 16/197
Quartile 3 4 4 4 4 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 1.3 5.7 11.2 14.1 -11.1
IA rank 4/234 26/239 217/247 90/254 249/260
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.

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 1.3 5.7 11.2 14.1 -11.1
IA rank 4/234 26/239 217/247 90/254 249/260
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.

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 31/03/2019

Top ten holdings (%)

FundIndex
Devro 9.06 0.00
NCC Group 8.84 0.00
De La Rue 8.76 0.00
Morgan Advanced Materials 7.05 0.24
Chemring Group 5.77 0.00
Essentra 4.64 0.38
Vectura 4.57 0.00
Senior 4.56 0.32
Euromoney Institutional Investor 4.50 0.24
Equiniti 4.41 0.00

Sector (%)

FundIndex
Industrials 34.4 20.1
Information technology 17.2 4.2
Consumer staples 13.0 3.1
Healthcare 10.5 3.6
Consumer discretionary 9.4 14.8
Materials 6.7 5.7
Financials 4.8 30.4
Utilities 2.4 2.6
Real estate 0.0 9.2
Energy 0.0 3.2
Communication services 0.0 3.0
Cash 1.6000 0.0

Top ten holdings (%)

FundIndex
Devro 9.06 0.00
NCC Group 8.84 0.00
De La Rue 8.76 0.00
Morgan Advanced Materials 7.05 0.24
Chemring Group 5.77 0.00
Essentra 4.64 0.38
Vectura 4.57 0.00
Senior 4.56 0.32
Euromoney Institutional Investor 4.50 0.24
Equiniti 4.41 0.00

Sector (%)

FundIndex
Industrials 34.4 20.1
Information technology 17.2 4.2
Consumer staples 13.0 3.1
Healthcare 10.5 3.6
Consumer discretionary 9.4 14.8
Materials 6.7 5.7
Financials 4.8 30.4
Utilities 2.4 2.6
Real estate 0.0 9.2
Energy 0.0 3.2
Communication services 0.0 3.0
Cash 1.6000 0.0

    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 25

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q4 2018

    Market overview

    The broad UK market, including the FTSE 250 Index, was firmly in negative territory for the quarter. This poor performance was compounded, especially for international investors, by ongoing weakness in trade-weighted sterling. Within this, mid-caps and small-caps underperformed their larger-cap brethren. The Fund slightly underperformed its benchmark. We continue to believe it is more important than ever to concentrate on economic risk (i.e. capital preservation) at this stage in the cycle, with wage pressure building and margin pressure potentially ensuing.

    Fund attribution

    Notably strong performance over the quarter came from Telecom Plus, the multi-utility company, which benefited from competitor bankruptcies and from the introduction of an energy price cap. Increased regulatory scrutiny over startup competitors looks to be a structural shift for Telecom Plus, encouragingly. Poor relative performance came from the fund’s holding in Chemring, the defence company. Although the prospect for defence spending remains strong, and Chemring’s niches remain attractive, a tragic fatality at one of the company’s factories continued to weigh on economic performance and sentiment towards the stock. We continue to engage with management on how best to improve sentiment, safety standards and financial performance.

    Whilst the domestic UK economy continues to face ongoing political and financial uncertainty with little prospect of resolution in the near term, 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. In particular, we favour companies with strong technology or intellectual property. Furthermore, companies that form a critical, yet relatively low-cost part of a supply chain, interest us. Typically, these companies trade at high valuations yet the indiscriminate sell-off in UK equities (particularly amongst mid- and smallcaps) means this is often no longer the case.

    Outlook

    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 that area of the market. Where we do have exposure to UKfocused companies, we primarily target those with structural earnings drivers and highly visible earnings pipelines. 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. 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

    Where we do have exposure to UK-focused companies, we primarily target those with structural earnings drivers & highly visible earnings pipelines.

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 152.50 -0.91 18/04/2019
    C Inc GBP 96.45 -0.94 18/04/2019
    A Acc GBP 417.90 -0.95 18/04/2019
    D Acc GBP 137.30 -0.94 18/04/2019

    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

    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

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