Unlike its competitors in the Investment Management Association's (IMA) China/Greater China sector, which focus on the growth opportunities in China, the Neptune Greater China Income Fund is designed to provide a rising level of income with the potential for long-term capital growth.
Neptune says the fund's focus on companies in China, Hong Kong and Taiwan that are able to grow dividends significantly makes it a more cautious alternative to traditional China growth funds. It is also an option for investors who want to diversify their income sources outside the UK while retaining the potential for capital growth.
The fund, launched in late 2009, is managed by Douglas Turnbull, who joined Neptune in January 2007 as an investment analyst, having graduated from Oxford university with first-class honours in modern history. He became a fund manager in January 2009.
While some investors might be put off by Mr Turnbull's youth, short record and limited experience, he has managed to deliver a historic yield of more than 5 per cent on the fund. The fund has also been one of the top performers over the past year - which has been a dreadful time for Chinese equities generally. It delivered top-quartile performance, beating both its benchmark index (MSCI China) and its IMA sector average.
The fund is relatively concentrated, with only 39 holdings and almost a third of assets invested in the top eight holdings. But this reflects the manager's high-conviction approach - the fund is currently fully invested due to the manager's positive view on the prospects for the Chinese economy and growth.
The fund does have a high total expense ratio of 2.5 per cent, though. While this is in line with many of the fund's open-ended peers, it is still the highest in the IMA China/Greater China sector and significantly higher than exchange traded funds (ETFs) offering exposure to the Chinese market.
Source: FT Funds Data, Neptune
Performance figures as at 23 April 2012
Top 8 holdings (as at 31 December 2011)
| Company | Percentage (%) |
| Cheung Kong | 2.74 |
| China Mobile | 3.38 |
| Chunghwa Telecom | 3.55 |
| CLP Holdings | 2.95 |
| Cnooc | 4.59 |
| Hutchison Telecommunications Hong Kong | 2.38 |
| PetroChina | 5.23 |
| Power Assets Holdings | 3.04 |
Sector breakdown (as at 31 March 2012)
| Sector | Percentage (%) |
| Financials | 15.8 |
| Consumer Discretionary | 13.6 |
| Energy | 13.5 |
| Industrials | 12.2 |
| Telecommunication | 11.9 |
| Utilities | 11.4 |
| IT | 11.0 |
| Consumer Staples | 5.3 |
| Cash | 5.3 |
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