Robin Geffen (pictured) has defended the performance of his Neptune Income Fund after Principal Investment Management named it on its Grey List of UK equity income funds.



The listing indicates that the manager has an ‘out of favour’ style, with the report advising investors to ‘switch’ from the £1 billion fund.
 


The study claimed that Geffen’s focus on global growth was not shared by other investors and that ‘the risk probably lies with a growth disappointment’.
 


Geffen, the CEO of Neptune, argued that the fund had delivered an ‘attractive income proposition’ for investors last year, returning a yield of 5 per cent, above the IMA requirement of 3.9 per cent.
 


He remarked that despite the suggestion in the report that the fund had changed its style, this was not the case.
 


Geffen said, ‘Firstly, if you look at net dividend yield and net income over five years on the Principal report, both Neptune funds have outperformed the White List average and Grey List average, showing our focus on delivering income.’
 


He also pointed out that 30 out of the 33 stocks held in the Income portfolio increased their dividend and singled out Compass Group, Rio Tinto and Legal &General for ‘impressive growth’.
 

‘Looking ahead, we anticipate our current portfolio of stocks to continue growing their dividend and remain committed to only holding stocks that will make a contribution to the portfolio's overall yield. 
 

‘The current disposition of the Neptune Income Fund is based on our in-house view that emerging markets will drive over two thirds of global GDP growth in the long-term,’ continued Geffen. 
 


He added that, in order to benefit from this, the fund continued to maintain a bias to UK-listed companies with international exposure that have the ability to pay solid growing dividends.
 


However, Geffen admitted that the basic materials sector had ‘hampered’ the fund’s short-term performance.
 


The Neptune Income Fund has returned 2.35 per cent over five years, against an IMA sector average of -2.61 per cent.