Fund Objective

The investment objective of Neptune Global Equity Fund is to generate capital growth from a concentrated portfolio of global securities, selected from across world equity markets, with a view to attaining top quartile performance within the appropriate peer group.

View on Past Performance

The third quarter of 2008 witnessed the continuation of volatility in global markets. We saw a downturn in commodities, particularly mining and oil, as the global slowdown gained momentum, while financials enjoyed a brief resurgence.However, given the freezing of credit markets and the banking failures during the quarter, we continued to treat the financials sector with extreme caution and held no banks or insurance companies in the OECD markets. We were also strongly underweight in consumer-facing companies in these markets, given the spending slowdown in the West.

Future Expectations

While Russia and China were affected by falling commodities prices, our exposure in these markets was orientated towards their robust domestic consumption. Increasing intra-trade levels combined with decisive fiscal policy boosted Russian and Chinese consumer confidence which, along with infrastructure projects, will be the key drivers of their GDP growth.Indeed, the emerging markets should materialise as the primary engines of global growth over the medium to long term. The Fund continues to be well placed in select sectors to take advantage of growth supplied by these markets, while avoiding sectors affected by the global financial crisis, such as banking and insurance in the US, UK, Europe and Japan.Given the challenging market conditions, we hold a very high cash weighting. We will use this to take advantage of attractive company valuations offered by the extreme market volatility where we have identified good long-term opportunities.We continue to focus on well run and well financed large-cap firms, looking for cash generative companies that are not cutting their capital expenditure plans, as this would serve to cut the potential for future growth.

Fund Details