Neptune Emerging Markets

lemon26

Good evening! Just a quick question before go and veg in front of the tv, I've been looking at the Neptune Emerging Markets A Acc fund and it seems to have performed very well in its first year.

The question is, is it worth an AMC of 1.75% - and their TER is 2.5% (capped by manager)!

Just after any thoughts or opinions please!

Thanks again and Happy Christmas, L

dunstonh

emerging markets and specialist funds tend to be more expensive than mainstream funds. its the nature of where they invest,

turbobob

Personally I like Neptune funds as they (mostly) tend to outperform. I have investments in their Russia, Japan and US Opportunities funds at the moment. They do have a high management charge, but if they continue to outperform then I'm not too worried. Some other popular funds in the sector have similar charges, e.g. Aberdeen Emerging Markets.

The TER on the Neptune fund probably won't be helped by the fact its very small (just £8m according to Trustnet). I guess that's a possible concern - will the fund get the same attention as some of their larger funds which earn them more? Why hasn't it attracted the business? Their Global Equity fund is currently £873m by comparison. It is quite a new fund though.

lemon26

If I was to go for this fund to get some emerging markets into my portfolio, what percentage of my portfolio would it be prudent to have in this fund? Thanks, L

Rollinghome

It rather depends.

If you're a little old lady who needs her savings to pay for her care home in a few years time it probably wouldn't be prudent to have anything invested in even the safest equities. If you're a young multi-millionaire with a continuing huge income and multimillion pound pension pot, then if you fancy putting half your pf into a high risk gamble, why not? If it all went wrong you'd still be rich.

Only you know all the factors which determine the appropriate level of risk for you.

lemon26

Hi Rollinghome! In light of your last post, as I'm neither, I think I'll put 10% in the Neptune fund and top up my property holding to 15% or so. I'm not saving for anything in particular, just building up some long-term savings that'll hopefully outpace my cash savings over the next 10 years or so.

My portfolio shoudl end up like this:

Atremis Strategic Assets: 17%
HSBC Pacific Index: 5%
Inv Perp Corp Bond: 9%
Inv Perp High Income: 18%
JPM Nat Resources: 5%
Jupiter Financial Opps: 8%
Jupiter India: 5%
Jupiter Int'l Financials: 8%
Neptune Emerging Markets: 11%
Thraedneedle UK Property: 14%

Would this be classed as high-risk as quite a lot is in equities? Am I too thinly spread with having 6 funds of less than 10% each?

andysdad_2

Hi Lemon26
my view is that you have a high risk fund allocation any way as many of the funds would be classed as specialist or emerging market
HSBC Pacific, Jupiter India & Neptune are all emerging areas of the workd and the two financial and Nat resource fund are specialist.
Could be a great play if those markets go up or:eek:

There are some websites that give a breakdown of portfolios so you can assess if that is what you want. I am sure some experts on this forum will be along to advise later, I think Trustnet have that capability in the portfolio analysis section if you want to start today.

Best of luck with your decisions.

AD

Rollinghome

Hi Lemon, the perception of risk is a personal thing so I'm not sure mine is any better than yours.

I look at risk and volatility as being different. Bond UT funds were considered to have low volatility until last year but I don't consider them low risk measured against the alternatives. For me due mainly to the costs of UT funds there's a a high risk they'll now underperform both equities and cash even in the longer term.

The Neptune EM fund is primarily in places like Indonesia, China, India,Thailand, South Africa, Brazil, Peru and Russia. Most of those have a history of political instability and corruption which all winds up the risk. It's also a newish fund run by a manager who's newish to Neptune. Seems to be the first time he's been the sole manager of a fund and there's a performance fee which could be a big number on a volatile fund in addition to a TER of 2.5%. I assume Robin Geffen will be looking over his shoulder.

So by any standard you've got a lot of potential risk and volatility in there. Looks like you may have as big a weighting in India as in the economies of the US and Europe combined. But if it suits you and you think that's the place to be then go with it. Big factors would be the term you're looking at, your future plans, and how big a chunk of your total assets those investments represent.

lemon26

Hi Andysdad and Rollinghome! Thanks for your take on things - I may simply increase my holdings in the Pacific Index and Proprty funds, making those two and the Artemis Strategic Assets and Invesco High Income the core of my portfolio for the time being with the India, Natural Resources and Financial funds the smaller holdings and keeping them that way.

I hadn't thought about how volatile my portfolio would become if I did add a dedicated EM fund, so thanks! Hope you both have a good Boxing Day! L