Neptune Global Equity Class A Retail Accumulation

2011 has seen volatility across global stock markets. Despite this Robin Geffen, manager of the Neptune Global Equity Fund has not reacted to short-term sentiment, and remains focused on the long-term growth prospects for global companies.

The fund's exposure to economically sensitive areas of the market has caused the fund to underperform its peers this year. These include stocks in the energy, industrials and consumer sectors, which have fallen as investors have favoured assets they perceive as carrying lower risk. The same applies to the fund's emerging market holdings which are also regarded as more risky.

There have, however, been some areas which have proven positive for the fund. Robin Geffen has maintained a low exposure to Europe - his only European holding is a Norwegian fertiliser company. He also has little exposure to the troubled financial sector, as he believes growth is likely to be constrained by heavy regulation and the sector remains vulnerable to shocks.

A bias towards the telecoms and technology sectors have also been positive recently. In particular, a holding in IBM has seen a steady improvement after falling during the summer. The company is positioned to benefit from growth in emerging markets, and this is bearing fruit.

This fund is the purest expression of Neptune's approach, which focuses on economic research. This helps identify which sectors and regions have the strongest growth prospects. It looks at where a company generates its revenue, rather than where it is listed. For example, Standard Chartered has more branches in Brunei than in Britain.

Unsurprisingly Neptune's research points towards emerging markets as having the best long-term growth prospects, and the fund has maintained a large exposure to countries such as China (18.6%) and Russia (15.3%). Companies such as Tencent in China are benefiting from the growth of internet usage. China accounts for approximately 20% of the world's internet users and penetration is still low at 420 million as at June 2010, but Neptune forecast 770 million Chinese will be online by 2015, so the growth potential is huge.

Robin Geffen has maintained conviction in the fund's key holdings despite poor short-term sentiment. The fund currently has a concentrated portfolio of 48 stocks, so each holding has the potential to contribute significantly to performance, but it is higher risk. His approach has rewarded investors over the longer term. While we cannot rule out further short-term volatility, we believe the fund remains well placed to benefit from faster growing emerging markets over the longer term. The fund remains on the Wealth 150 list of our favourite funds in each sector.