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 4.8 16.8 6.7 43.6 54.2 159.6
Benchmark 7.0 18.5 10.4 48.9 66.3 209.5
Large chart

Calendar year performance (%)

2014 2015 2016 2017 2018
Fund 11.5 1.5 11.8 18.6 -6.0
Benchmark 13.7 1.4 12.0 21.8 -4.4

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. Launch date used is 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 53/147
Quartile 2 1 1 3 2

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 1.95%

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 19.1%

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 2.2
Average weighted dividend cover of the equity holdings in the portfolio 2.0

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 30/06/2019

Top ten holdings (%)

FundIndex
Microsoft 4.04 4.20
Apple 2.61 3.54
Motorola Solutions 2.60 0.11
Luxfer 2.53 0.00
American Tower Corporation 2.37 0.37
Visa 2.32 1.24
Merck & Co 2.32 0.88
Brink's 2.31 0.00
Service Corporation International 2.29 0.00
Simpson Manufacturing 2.26 0.00

Sector (%)

FundIndex
Information technology 25.4 21.5
Industrials 16.4 9.4
Healthcare 13.0 14.2
Financials 12.8 13.1
Consumer discretionary 7.9 10.2
Consumer staples 7.8 7.3
Materials 4.9 2.8
Utilities 4.2 3.3
Real estate 2.4 3.1
Energy 2.2 5.0
Communication services 1.9 10.2
Cash 1.1000 0.0

Top ten holdings (%)

FundIndex
Microsoft 4.04 4.20
Apple 2.61 3.54
Motorola Solutions 2.60 0.11
Luxfer 2.53 0.00
American Tower Corporation 2.37 0.37
Visa 2.32 1.24
Merck & Co 2.32 0.88
Brink's 2.31 0.00
Service Corporation International 2.29 0.00
Simpson Manufacturing 2.26 0.00

Sector (%)

FundIndex
Information technology 25.4 21.5
Industrials 16.4 9.4
Healthcare 13.0 14.2
Financials 12.8 13.1
Consumer discretionary 7.9 10.2
Consumer staples 7.8 7.3
Materials 4.9 2.8
Utilities 4.2 3.3
Real estate 2.4 3.1
Energy 2.2 5.0
Communication services 1.9 10.2
Cash 1.1000 0.0

    Active share

    Active share 80.4%

    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 58

    Total number of holdings, excluding cash positions.

    Quarterly commentary

    Q2 2019

    Market overview

    US equities continued to recover from their slump at the end of 2018. Last quarter the market appreciated due to diminished concerns over the impact of the US/China trade war. However it seems that the market’s optimism for swift reconciliation was misplaced and once again concerns rose that we could be in for a protracted and damaging trade war. On its own this would have caused the market to move lower but was counteracted by further dovish steps from the Fed. Indeed the market now expects the Fed to cut rates in the latter half of 2019. This dovish move and soft economic data caused a further slide in 10 year government bond yields which finished June at just a smidge above 2%.

    Sector wise there has been less of a clear cut cyclical versus defensive divide so far this year although the more typically cyclical sectors performed better this quarter despite the sharp move lower in bond yields. Healthcare has continued to underperform in the face of continued discussion on “Medicare for All”– an NHS type system – once gain sparking fears over drug pricing and the insurance-driven industry business model. Energy was also notably weak. Rather than sectors, the main determinant of returns this year has arguably been factors including quality and growth which have outperformed at the expensive of value. High P/E and high sales and EPS growth stocks have significantly outperformed their low quality, low valuation and low growth peers. While the backdrop of softening economic expectations and lower yields would help explain much of this we would also contend that digital disruption is also driving a wide stake between the haves and have nots. The disrupters and their embracers are growing at the expense of the disrupted.

    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 are well placed from our disruption theme angle and sustainably grow dividends ahead of the market. Often we feel the market underappreciates dividend paying companies like these.

    Fund attribution

    While we were slightly ahead of the wider US peer group and, more representatively, we were broadly in-line with our US Income peers and US dividend indices during the quarter. Technology was our strongest sector this quarter with a number of strong individual stock returns including Motorola Solutions, the two-way private network radio company that is increasingly well positioned to capture growth from control-room centre software market. Energy was one of our weaker sectors where despite limited exposure here both of our holdings underperformed. Occidental Petroleum’s share price was negatively rewarded by winning the bidding war for Anadarko and Golar LNG reported disappointing earnings.

    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

    Technology was our strongest sector this quarter with a number of strong individual stock returns

    Insights & analysis

    Prices

    Choose date
    Share class Price Change (%) Date
    C Acc GBP 233.80 -0.04 17/07/2019
    C Inc GBP 201.40 -0.10 17/07/2019

    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 contact our European Sales team.

    Literature

    English documents

    Factsheet
    30/06/2019
    Quarterly Commentary
    30/06/2019
    Key Investor Information Document
    08/02/2019

    German documents

    Key Investor Information Document
    01/09/2018

    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

    European Sales Team

    Tristan Grossetete

    Sales Manager - Europe

    Tel: +44 20 3249 0153

    Mob: +44 7970 230 942

    Email: tristan.grossetete

    Veronika Blazicek

    Sales Executive - UK & Europe

    Tel: +44 20 3249 0189

    Mob: +44 7850 770 480

    Email: veronika.blazicek

    Contact our local representative

    ACOLIN Fund Services AG
    Affolternstrasse 56
    CH-8050
    Zürich
    Switzerland
    Telephone: +41 44 396 96 96

    Contact our Swiss paying agent

    Banque Cantonale de Genève
    17, Quai de l’Ile
    1204 Geneva
    Switzerland