The five crown-rated, £39m fund has been headed up by FE Alpha Manager Mark Martin since its launch in December 2008.
Since this time it has returned 155.28 per cent, while its FTSE 250 benchmark and the IMA UK All Companies sector have returned just 117.49 per cent and 66.2 per cent, respectively.
Performance of fund vs sector and index since Dec 2008
Source: FE Analytics
Neptune UK Mid Cap has also been considerably less volatile than the sector and index.
It has done even better over the short-term and is the best-performing fund in the IMA UK All Companies sector over six months and one year, and the third-best performer over three years, behind Mark Slater’s MFM Slater Growth and Anthony Cross and
Julian Fosh's Liontrust Special Situations. FE Alpha Manager Mark Martin (pictured) told FE Trustnet that he believes the fund’s investment strategy differentiates it from other mid cap portfolios in the sector, which in turn has led to Neptune UK Mid Cap’s success.
"We invest across three silos and we look to hold at least 20 per cent of the fund’s assets in these silos at any one time," he commented.
"The three silos are recovery, structural growth and self-help stories. We are looking to invest across the economic cycle with these silos."
Martin believes that this investment strategy allows the fund to be more consistent than the naturally volatile mid cap sector.
He added: "Normally, the mid cap sector performs very well when markets are up, but not great when there are periods of low growth."
"In QE2, markets really ripped up and the mid caps went very well, so we were slightly behind the rest. This was partly down to the structure of the fund, but when there was a market correction we stayed strong."
Martin explained how the silo system works: "An example of a recovery play is house builders."
"Our research team flagged up that house building is usually a driver that pulls the economy out of recession, so one of our holdings is Galliford Try," he said.
"In terms of structural growth, we look at industries like healthcare. We hold a company called Consort Medical, which is a manufacturer of products for asthma sufferers and other chronic respiratory diseases like emphysema."
"The self-help silo looks at companies that have had a catalyst for change. We hold another called De La Rue, which manufactures UK passports and prints currency. It now has a new management team which is looking to rebuild its reputation," he added.
"We think De La Rue is likely to benefit from inflationary printing because of the recent liquidity measures."
According to FE Analytics, Martin has outperformed his peer group composite during his career in fund management. He has returned 155.28 per cent since he started, beating his rivals by 90.55 percentage points.
Darius McDermott, managing director at Chelsea Financial Services, believes that more investors should look into Neptune UK Mid Cap, as its track record speaks for itself.
"The fund’s performance has been exceptional," he said.
"It is the best-performing mid cap fund over the last few years and one of the best UK equity funds. It has a very, very strong track record and it is still quite a small fund and can be quite nimble to move in and out of holdings."
He added: "The fund’s manager is getting more well-known as he now has an excellent three-year record."
Neptune UK Mid Cap has a minimum investment of £1,000 and a total expense ratio (TER) of 2 per cent.