Overview

The Neptune UK Opportunities Fund is a high conviction, multi-cap UK equity portfolio that aims to provide capital growth. Fund Manager Mark Martin takes a style-agnostic approach, structuring the portfolio around the three silos of economic recovery, structural growth and corporate turnarounds. The concentrated portfolio consists of stocks of all sizes, and has the ability to take advantage of ‘special situations’, where companies are out of favour, misunderstood or going through a transitional phase.

Investment objective

To provide capital growth by investing principally in UK companies, including those we consider to be ‘special situations’. Such ‘special situations’ can exist where companies are out of favour, misunderstood or where management changes or takeovers are expected.

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

Ongoing charge (%) 1.01
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B8L76S53
Bloomberg NUKSSCA:LN
SEDOL B8L76S5

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 10 yrs Launch
Fund -10.66 -12.70 -12.60 6.94 17.93 183.90 101.74
Benchmark -5.19 -4.37 -1.47 25.37 30.46 156.66 85.80
IA sector -6.72 -5.29 -3.57 20.45 29.21 192.99 96.23
IA rank 253/262 256/260 256/260 231/246 193/233 83/195 63/178
Quartile 4 4 4 4 4 2 2
Large chart

Calendar year performance (%)

2013 2014 2015 2016 2017
Fund 34.71 0.81 4.87 6.86 13.29
Benchmark 20.81 1.18 0.98 16.75 13.10
IA sector 27.70 1.29 5.77 11.16 14.09
IA rank 44/227 112/236 122/241 183/249 115/257
Quartile 1 2 2 3 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 29/12/2006, 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 29/12/2006 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 All Companies 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.

Please note that on the 1 November 2013 the Fund changed its name and objective. Past performance shown before this change was therefore achieved under similar circumstances but will not wholly apply going forward.

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 34.71 0.81 4.87 6.86 13.29
Benchmark 20.81 1.18 0.98 16.75 13.10
IA sector 27.70 1.29 5.77 11.16 14.09
IA rank 44/227 112/236 122/241 183/249 115/257
Quartile 1 2 2 3 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 29/12/2006, 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 29/12/2006 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 All Companies 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.

Please note that on the 1 November 2013 the Fund changed its name and objective. Past performance shown before this change was therefore achieved under similar circumstances but will not wholly apply going forward.

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
Devro 9.28 0.01
Chemring Group 8.62 0.02
Vectura 7.64 0.02
Puretech Health 6.37 0.01
Consort Medical 5.58 0.02
Spirent Communications 4.43 0.03
PZ Cussons 4.36 0.02
NCC Group 4.35 0.02
Telecom Plus 4.32 0.03
Renewi  4.31 0.01

Sector (%)

FundIndex
Industrials 26.4 10.4
Healthcare 22.2 9.8
Information technology 15.7 1.5
Consumer staples 15.5 13.6
Materials 6.9 9.3
Utilities 4.3 2.9
Consumer discretionary 3.4 7.6
Real estate 2.6 2.5
Energy 1.5 14.7
Financials 1.5 22.8
Communication services 0.0 4.9

Top ten holdings (%)

FundIndex
Devro 9.28 0.01
Chemring Group 8.62 0.02
Vectura 7.64 0.02
Puretech Health 6.37 0.01
Consort Medical 5.58 0.02
Spirent Communications 4.43 0.03
PZ Cussons 4.36 0.02
NCC Group 4.35 0.02
Telecom Plus 4.32 0.03
Renewi  4.31 0.01

Sector (%)

FundIndex
Industrials 26.4 10.4
Healthcare 22.2 9.8
Information technology 15.7 1.5
Consumer staples 15.5 13.6
Materials 6.9 9.3
Utilities 4.3 2.9
Consumer discretionary 3.4 7.6
Real estate 2.6 2.5
Energy 1.5 14.7
Financials 1.5 22.8
Communication services 0.0 4.9

    Active share

    Active share 94.3%

    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 28

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q3 2018

    Market overview

    The broad UK market was modestly in negative territory for the quarter as was trade-weighted sterling. Within this, mid-cap stocks slightly underperformed, and small-caps fractionally outperformed their larger-cap brethren. 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

    From a portfolio construction perspective, and from a process perspective, 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 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.

    Strong performance over the quarter 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 fall and we added to the stock on weakness.

    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 UK-focused companies, we primarily target those with structural earnings drivers and highly visible earnings pipelines.

    Outlook

    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. We are excited by the investment opportunities in the rest of 2018 and believe there is significant potential for continued outperformance in the coming months and years.

    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, with wage pressure building and margin pressure potentially ensuing

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 144.30 -0.96 14/12/2018
    C Inc GBP 87.77 -0.99 14/12/2018
    A Acc GBP 182.70 -1.03 14/12/2018
    D Acc GBP 101.80 -1.07 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 GB00B8L76S53 B8L76S5 NUKSSCA:LN 1.01
    C Inc GBP GB00BWFGPK18 BWFGPK1 NEUKOCI:LN 1.02
    A Acc GBP GB00B1L6DW68 B1L6DW6 NUKSSAA:LN 1.86
    D Acc GBP GB00BVCXMD05 BVCXMD0 NEUKOFD:LN 0.91

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