Overview

The Neptune US Income Fund is designed for investors seeking regular equity income and long-term growth from North America. Its income share classes pay distributions four times a year from a concentrated portfolio of US and Canadian stocks identified as being able to grow their dividends significantly. The Fund could be held as a more cautious alternative to traditional US growth funds or by investors who want to diversify their income sources outside the UK while retaining the potential for capital growth.

Investment objective

To provide a rising level of income with the potential for some capital growth also. The Fund invests mainly in North American companies, selected at the manager's discretion, which may include Canada as well as the USA.

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

Ongoing charge (%) 0.98
Net yield (%) -
Minimum investment
Initial 250,000
Top up -
Regular -
Share class codes
ISIN GB00B909H978
Bloomberg NEUSICA:LN
SEDOL B909H97

Fund managers

George Boyd-Bowman

Fund 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

Robin Geffen

Assistant Manager

Performance

Cumulative performance (%)

1 mth 1 mth YTD 1 yr 3 yrs 5 yrs Launch
Fund -1.2 12.6 8.3 54.4 102.2 209.7
Benchmark -3.1 11.9 9.6 61.0 111.0 261.5
IA sector -2.4 13.5 7.8 57.0 94.4 186.2
IA rank 32/153 84/153 74/149 77/134 45/116 53/69
Quartile 1 3 2 3 2 3
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 18.4 7.4 33.4 8.4 -0.2
Benchmark 20.8 7.3 33.5 11.3 1.6
IA sector 16.4 3.4 28.8 9.5 -1.2
IA rank 36/111 18/118 25/116 69/112 53/111
Quartile 2 1 1 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 30/09/2010, 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 30/09/2010 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 North America and the benchmark is S&P 500 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 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 18.4 7.4 33.4 8.4 -0.2
Benchmark 20.8 7.3 33.5 11.3 1.6
IA sector 16.4 3.4 28.8 9.5 -1.2
IA rank 36/111 18/118 25/116 69/112 53/111
Quartile 2 1 1 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 30/09/2010, 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 30/09/2010 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 North America and the benchmark is S&P 500 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 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 0.9794
01 Jan 19 28 Feb 19 0.9329
01 Oct 18 30 Nov 18 0.9900
01 Jul 18 31 Aug 18 0.9420

*Rates paid per share for the C income shares, the primary distributing share class. For rates on other share classes, please contact us.

Net yield

C Inc GBP 2.02%

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 20.5%

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 1.6
Average weighted dividend cover of the equity holdings in the portfolio 2.3

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
Microsoft 3.96 4.14
Luxfer 2.71 0.00
Motorola Solutions 2.50 0.11
American Tower Corporation 2.46 0.40
Apple 2.43 3.42
Brink's 2.34 0.00
Visa 2.31 1.23
Merck & Co 2.30 0.89
CMS Energy 2.28 0.07
Service Corporation International 2.26 0.00

Sector (%)

FundIndex
Information technology 24.8 21.1
Industrials 16.5 9.3
Healthcare 13.2 14.2
Financials 13.0 13.2
Consumer staples 8.0 7.4
Consumer discretionary 7.7 10.2
Materials 4.7 2.6
Utilities 4.2 3.4
Real estate 2.5 3.2
Energy 2.5 4.9
Communication services 1.9 10.4
Cash 1.0000 0.0

Top ten holdings (%)

FundIndex
Microsoft 3.96 4.14
Luxfer 2.71 0.00
Motorola Solutions 2.50 0.11
American Tower Corporation 2.46 0.40
Apple 2.43 3.42
Brink's 2.34 0.00
Visa 2.31 1.23
Merck & Co 2.30 0.89
CMS Energy 2.28 0.07
Service Corporation International 2.26 0.00

Sector (%)

FundIndex
Information technology 24.8 21.1
Industrials 16.5 9.3
Healthcare 13.2 14.2
Financials 13.0 13.2
Consumer staples 8.0 7.4
Consumer discretionary 7.7 10.2
Materials 4.7 2.6
Utilities 4.2 3.4
Real estate 2.5 3.2
Energy 2.5 4.9
Communication services 1.9 10.4
Cash 1.0000 0.0

    Active share

    Active share 80.6%

    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 57

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q1 2019

    Market overview

    The US equity market snapped back from its slump at the end of 2018 as the concerns that caused such a poor end to last year diminished. The government shut down finally ended, the US/China trade spat showed signs that the worst outcome is unlikely and fears over an imminent recession were quelled. Most importantly, however, the Fed conducted an about turn on its monetary policy stance. At the end of last year, markets were concerned the that Fed was going to continue to tighten monetary policy despite growing evidence that the US economy was likely to slow from the 2018 run-rate. Jerome Powell, the Fed Governor, has since calmed markets with his so-called dovish pivot, seemingly taking further rate hikes off the table for the time being. In addition to a more reactionary and dovish Fed, the most important driver of markets at the macro level in 2019 is likely to be the strength and acceleration of the Chinese economy, which is showing emerging signs that stimulus implemented over the last couple of years is working.

    Fourth quarter earnings reported since the start of the year have corroborated the slower but still growing economy, delivering mid-teens EPS growth (8-9% stripping out tax reform). The level of earnings surprises in 2018 were knock out but in this latest quarter reverted back closer to normal, with a high 60s percentage level of companies beating expectations rather than high 70s and the average surprise around 3% or half the level of the last 5 or 6 quarters. It is notable that earnings expectations for the rest of 2019 have been cut significantly during the first quarter of this year.

    Portfolio attribution

    At a sector level, there has been less of a clear cut cyclical versus defensive divide so far this year. Defensive sectors, with their bond proxy characteristics, have in general been helped by the sharp fall in the 10-year bond yield. This has been to the detriment of banks. However, not all defensive sectors have benefited. Healthcare has been the standout laggard, which has suffered as calls from the Democrat 2020 Presidential election candidates for “Medicare for All”– an NHS type system – have once again sparked fears over drug pricing and the insurance-driven industry business model.

    The seemingly rapidly changing global economic outlook and heightened level of geopolitical uncertainty continues, in our view, to support our strategy of not being aggressively overweight or underweight individual sectors. Instead, we look to deliver outperformance by finding companies within sectors that we feel can sustainably grow dividends ahead of the market and where we feel the market underappreciates this.

    Despite being behind with the wider US peer group, we were importantly broadly in-line with our US Income peers and US dividend indices during the quarter.

    Individual stock selection drove the majority of relative performance. Despite the Russell 2000 marginally outperforming the S&P 500 Index, many of our mid-cap holdings lagged the sharp rally. This bias has been detrimental to the Fund over the last couple of quarters but we believe will be beneficial over the longer term and thus remain better placed than many of their larger peers to embrace the new digital economy.

    Stronger performers for the Fund during the quarter included Xilinx, the semiconductor chip manufacturer, whose results demonstrated that they are benefiting from the upcoming build out of various 5G networks around the world. The majority of the Fund’s weaker performers were within the healthcare space due to aforementioned fears over “Medicare of All.” Newsflow surrounding this sector is likely to remain volatile in the run up to elections in November 2020.

    The Fund’s turnover was extremely low during the quarter and we remain focused on finding dividend stocks with latency potential and where we believe the outlook for dividend growth has room to improve in the medium term.

    George Boyd-Bowman

    Fund Manager

    We look to deliver outperformance by finding companies within sectors that we feel can sustainably grow dividends ahead of the market and where we feel the market underappreciates this

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 223.30 -0.36 26/06/2019
    C Inc GBP 193.40 -0.36 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 GB00B909H978 B909H97 NEUSICA:LN 0.98
    C Inc GBP GB00B909HB91 B909HB9 NEUSICI:LN 0.98

    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