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Healthcare EIS resilient in a downturn, says Longbow

Longbow Capital is tipping healthcare as a defensive investment sector which is likely to better weather the economic storm.

Longbow offers two healthcare enterprise investment schemes which target growth areas within the life sciences, health and well-being sectors.

The approved EIS fund has a defined investment period of one year and a portfolio of 8-10 UK-based unquoted stocks, designed for investors with an income tax liability in the current tax year. The arrowhead EIS fund invests in 10-15 companies over a period of 18-24 months and is intended for investors with anticipated tax liabilities in the next two years.

Longbow partner Julian Hickman says the forward-looking funds offer a convincing growth story for investors in the current downturn. He says: “Healthcare is a broad market which covers many different technologies, markets and products so it offers a good basis for diversification. The challenge in early stage venture capital is to be able to develop the technology and market it effectively – this doesn’t change dramatically in a good or bad market.”

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Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

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