Neptune continues US shake-up with mid-cap launch

Neptune continues US shake-up with mid-cap launch

Neptune will launch a US Mid-Cap fund on July 1 as part of an ongoing restructure of its US fund range.

Patrick Close, who has been running a US mid-cap model portfolio since July 2014, will be lead manager on the portfolio, and new US equity head James Hackman will be assistant manager.

The fund will invest in between 30 to 60 stocks with market caps of $500m (£376m) to $10bn. At least 60 per cent of the total portfolio will be US mid-cap stocks.

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The launch comes shortly after Neptune announced the departure of Felix Wintle and the promotion of Mr Hackman. The latter subsequently took over Mr Wintle’s US Opportunities fund and has run the asset manager’s US Income portfolio since launch.

Mr Close said valuations for US mid-caps remain slightly below long-term averages despite the rally seen over the past seven years – in part due to the soft patch in performance seen since 2014.

He added: “Small and mid-caps are less covered by analysts than their larger-cap peers, with the median company in the S&P 1000 covered by seven analysts compared with 20 [for the typical stock] in the S&P 500. I see plentiful opportunities to find high-quality companies at attractive valuations.”

Ben Seager-Scott, director of investment strategy at Tilney Bestinvest, said: “The US has proven a difficult market to consistently beat, particularly in the large-cap space.

“This particular fund will be hunting in the less well-covered mid-cap space, so there is arguably scope for meaningful outperformance (as well as underperformance), and there are fewer options in this space for investors in the UK.

“Being mid-cap focused, this is a little more specialised than broad US equity exposure, and is likely to carry a higher level of risk with a commensurately greater potential reward level.

“As a result, it is likely to suit more adventurous investors, perhaps supplementing broad US equity exposure within an equity-heavy portfolio.”