Neo Portföy's Equity Fund: What 2.90% Buys You

Neo Portföy Yönetimi A.Ş. is an Istanbul-based asset management firm licensed by Turkey's Capital Markets Board, founded in 2018. The firm manages roughly 60 funds across securities, real estate, and venture capital categories, with total assets of approximately 40 billion TL. The bulk of that sits in money market and real estate vehicles. Not equities. In August 2022, the firm launched a domestic equity product: the NEO Portföy Birinci Hisse Senedi (TL) Fonu (TEFAS code: NHY), classified as a stock-intensive fund under SPK regulations and available to retail investors through TEFAS. As of mid-2024, the fund holds approximately 210 million TL in assets. For that, it charges an annual management fee of 2.90%. The structural case for active equity management in Turkey is genuine. Whether this particular fund, from this particular firm, at this particular price, is the right vehicle to exploit it is a different question entirely.

Why the BIST100 Is More Beatable Than It Looks

The global case for passive investing is well evidenced: in most developed markets, most active managers fail to outperform their benchmark after fees over a sufficiently long horizon. Investors are right to take this seriously. They would be wrong to assume it applies to the BIST100 without qualification.

The BIST100 is a capitalisation-weighted index whose ten largest constituents account for approximately 55% of total index weight. Those ten names are, with limited variation year to year, the same group: the major Turkish commercial banks, the large holding companies, a handful of telecoms and energy names. Koç Holding, Sabancı Holding, Garanti BBVA, Akbank, İş Bankası, Ereğli Demir Çelik, Türk Telekom, BİM. These are not bad businesses. But their share prices move, to a significant degree, in response to macroeconomic inputs -- interest rate decisions, currency movements, regulatory changes, credit conditions -- rather than company-specific fundamentals. When the Central Bank cuts rates, Turkish bank shares rally in near-unison. When the lira weakens sharply, export-oriented holdings appreciate as a block. The macro signal drowns the fundamental signal.

This creates an opportunity for an equity manager willing to hold a portfolio structurally different from the index. Buy better businesses at better prices, avoid the macro-driven heavyweights, wait for the gap to close. The Turkish sell-side is thin; mid-cap and small-cap coverage is sporadic and often superficial. Institutional mandates are benchmarked, creating pressure on most fund managers to hold index-like portfolios. The result is a market that, at the margins, is less efficiently priced than most developed equity markets.

The question is not whether this opportunity exists. It does. The question is whether the NHY fund's construction actually captures it, or merely charges for it.

What the NHY Fund Data Shows

The NHY fund's KAP disclosures and TEFAS data provide a publicly available window into how the fund is built. What they show is instructive.

The fund holds upward of 35 to 40 positions across a range of sectors. That is a lot of names. A conviction-driven active manager typically holds 15 to 25 positions, concentrated enough that each pick meaningfully affects returns. At 35 to 40, the portfolio begins to resemble something closer to a diversified basket than a focused bet. The more positions you hold, the harder it is to meaningfully differ from the index you are supposed to be beating.

According to publicly available portfolio data, the fund's largest holdings include names such as Ereğli Demir Çelik, Doğuş Otomotiv (DOAS), and İzmir Demir Çelik (IZMDC), alongside positions in financial, industrial, and consumer companies. There is a visible tilt toward mid-cap industrials and away from the largest-weight index constituents. But the fund also holds bank shares, with financial sector allocations visible in its periodic disclosures. If the thesis is that the BIST100 is beatable precisely because it is dominated by macro-driven bank and holding company stocks, holding those same stocks inside your active portfolio blunts the argument.

Then there is the fee. The NHY fund charges an annual management fee of 2.90%, per its TEFAS listing. To understand what that means for an investor, consider the arithmetic. Over a decade, a 2.90% annual fee consumes roughly a quarter of an investor's gross returns. A BIST100 tracker ETF charging around 0.50% would consume roughly 5% over the same period. That is a gap of approximately 20 percentage points that the active manager must overcome just to break even with the passive alternative. Not to outperform. Just to match.

For a fund launched in August 2022, with less than two years of history as of mid-2024, there is simply no public data sufficient to determine whether this fee is justified. Investors are paying 2.90% annually on the promise that the manager will eventually prove the premium was worth it. That is an act of faith, not analysis.

What the Firm's Profile Tells You

Neo Portföy's leadership and fund management team include experienced professionals. Dilaver Ergin, a board member and assistant general manager, and Rozana Talu serve as portfolio managers for the NHY fund, as disclosed through KAP filings. The team's background is not in question.

What deserves scrutiny is the firm's profile. Neo Portföy manages roughly 60 funds with approximately 40 billion TL in total assets. The overwhelming majority of that capital sits in money market instruments and real estate vehicles. The NHY fund's 210 million TL represents a fraction of a percent of the firm's total assets under management. When a firm's core business is money markets and real estate, the question for equity investors is straightforward: where does the deep equity investment expertise reside? Managing a money market fund and managing an active equity portfolio are fundamentally different disciplines. Competence in one does not imply competence in the other.

This is not a criticism of Neo Portföy's broader business. Managing 40 billion TL across 60 funds is a legitimate achievement for a firm founded in 2018. But an investor evaluating the NHY fund specifically is not buying access to the firm's money market capabilities. They are paying 2.90% for equity stock-picking, from a firm whose track record in equities is shorter than most car loans.

What Investors Should Demand

Key-person risk and capacity constraints apply to every actively managed equity fund in Turkey. The domestic equity fund universe is small enough that fund closures, manager departures, or strategy drift can alter a fund's character without much public notice. This is not unique to NHY. But the combination of factors specific to this fund -- a high fee, a short track record, a broad portfolio that risks diluting its own active thesis, and a parent firm whose expertise sits outside equities -- should sharpen, not soften, the questions investors ask.

Investors evaluating the NHY fund should monitor KAP disclosures and TEFAS data regularly, not as a general best practice but because the usual shortcuts for evaluating a fund (long-term track record, peer comparison, firm pedigree in the asset class) are not yet available here. The data to distinguish genuine skill from favourable market conditions does not exist yet for a fund this young. What does exist is a fee that compounds from day one, regardless of whether that skill materialises.

The Bigger Picture

The structural case for active equity management in Turkey is real. The BIST100's macro sensitivity, the thinness of sell-side coverage, and the behavioural biases of a benchmark-driven institutional investor base all create conditions where a skilled active manager can find mispriced securities. These conditions are genuine and they may persist longer than most observers expect.

But a 2.90% annual fee, a sub-two-year track record, a portfolio of 35 to 40 names that includes the very bank stocks the active thesis argues against, and a firm whose 40 billion TL empire is built overwhelmingly on money markets and real estate -- this is not a straightforward proposition. The opportunity in Turkish equities may be real. Whether this fund is the right way to access it is a question the data cannot yet answer.

The public data is there: TEFAS performance numbers, KAP portfolio disclosures, fee schedules. Investors should use it. The verdict, for a fund this young, is not yet in. But the fee is already being charged.