Amongst other mandates, Geffen runs the Neptune Global Alpha fund, which has returned 37 per cent over the past three years, compared with 28 per cent for the average fund in the IA Global sector in the same time period.
Geffen has been increasing his funds’ exposure to the emerging markets of late.
He noted that the asset class has performed at its strongest level since 2012, and outperformed developed markets over the past year.
Geffen commented, ‘The asset class nevertheless remains cheap relative to developed markets, and on an absolute basis., the earnings outlook for emerging markets has greatly improved, supported by improving corporate governance and political reform – though there is still work to be done
The Neptune Emerging Markets, Neptune India, Neptune Russia & Greater Russia and Neptune Latin America Funds are all comfortably ahead of their benchmarks over one and three year periods.
There have been a number of false dawns for emerging markets in recent years; hopes of an economic turnaround have too often been quickly snuffed out by commodity price drops or shifts in market sentiment. In our view however, it is clear that emerging markets are in the early stages of a cyclical recovery.’
He added that he started buying emerging market equities last year, ‘People had completely written off emerging markets but that’s when I think things became interesting. Valuations were low and remain so, but China was beginning to stabilise under more effective policy measures. The stabilisation of the Chinese economy was the bedrock of a complete turnaround in the opportunity set. Having languished under a deflationary environment, slower global growth and weak PMIs from their key importers, emerging markets rebounded last year as these trends began to reverse. Now we’re seeing the effect of these headwinds turning into tailwinds. So far our move into emerging markets has been positive, but we think there’s plenty of room for upside from here in a number of different areas.”
While the Fund is less exposed to oil than the wider benchmark, the stabilisation of the oil price since the lows of early 2016 has been a big driver of the market over the past year.’
The Neptune Global Alpha fund has returned 78 per cent over the past five years, compared with 60 per cent for the average fund in the IA Global sector.