Neptune’s Geffen takes US exposure to highest level in Global Equity fund

Neptune founder Robin Geffen has raised exposure to the US past 50 per cent in his £946m Neptune Global Equity fund, citing a strong recovery in the world’s largest economy.

Exposure to the US stood at 50.4 per cent in the fund at 30 September, compared to 47 per cent at the end of August.

Geffen says: “In addition to gaining access to the US recovery, which we believe will be borne out in the Q4 corporate earnings season. We have also sought high quality global companies with growing market share in emerging economies.”

Geffen says these types of stocks are consumer stocks with strong balance sheets, dominant market share and resilience against margin pressures in a tough operating environment and more cyclical names in the consumer discretionary and energy sectors. Geffen says that oilfield services company Halliburton was its top performer in the third quarter.

Geffen says that China and Russia are trading on cheap valuations, with PE ratios of 11 times and nearly 6 times respectively. He says that relative to their contribution to global growth these valuations are unjustified and expects to see the emerging markets re-rate.

He adds: “We have therefore maintained our emerging markets bias, topping up favoured stocks on temporary market weakness and entering new holdings at an attractive valuation point.”

The fund has maintained its significant underweight to Europe.

Geffen says: “Although we believe that the sovereign debt crisis is abating, we are also witnessing a combination of considerable demand destruction and austerity, leaving very little room for growth.”

Geffen says that although this underweight weighed on relative performance in the third quarter, in the longer term he believes growth will be limited by economic policies.