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Healthcare on the mend

It is often worth looking at equity sectors which have underperformed over the past year or two. The worst-performing sector over the past year to July 1 has been the healthcare sector, which fell by 2.4 per cent, even underperforming the technology sector, against an average rise in all sectors of around 11 per cent.

I believe that now is the time to go back into this sector as it showing signs of recovery and valuations are reasonable. Investor confidence has started returning, with a majority of companies’ second-quarter earnings being above expectations.

In July, there was a positive inflow into this sector which was the biggest seen since May 2005. The two funds I like best are Schroder medical discovery fund managed by John Bowler and the Axa Framlington health fund managed by Dr Deane Donnigan.

The The Schroder fund has around 45 per cent invested in pharmaceuticals, 23 per cent invested in healthcare, equipment and supplies, 21 per cent in healthcare providers and services and around 11 per cent in biotechnology.

Axa Framlington is invested in around 28 per cent in devices, 25 per cent in biotechnology products, 22 per cent in healthcare services, 12 per cent in speciality pharmaceuticals and the balance spread among other sectors.

The Schroder fund is spread between different countries, with 50 per cent in the US, 19 per cent in the UK, 17 per cent in Switzerland, 12 per cent in other European countries and 2 per cent in Japan.

The Axa Framlington Health fund has around 78 per cent invested in the US, 8 per cent in Europe excluding the UK, 8 per cent in the UK and 3 per cent in Japan, with the balance spread elsewhere.

I advise that all bigger equity growth portfolios should hold a fairly substantial percentage of their assets in both funds.


Product matters

It is difficult to look at the Kent Reliance intergenerational mortgage as a product as it is more of an initiative. This idea is long on concept and short on detail. The only place I managed to find information on this mortgage is in the press as the Kent Reliance website had no information and […]

ABI supports abolition of age 70 rule

The Association of British Insurers is supporting the abolition of the age 70 rule on protection products. The FSA’s consultation on the rule is due to end on September 6 and providers and trade bodies are expected to call for its abolition.If the rule is scrapped, Icob advisers will be allowed to sell policies maturing […]

Aifa lobbies for limited advice with disclaimer

Aifa is to lobby for the introduction of limited advice, which would enable advisers to offer advice on specific product areas without the compliance risk of carrying out a full fact-find. Under Aifa’s proposals, advisers’ clients would sign a disclaimer that would enable an adviser to, for example, advise a client purely on how best […]

Buy to let is top for returns

Buy-to-let investors are getting the best return of all asset classes, according to Landlord Mortgages. Investors who bought a BTL property with a deposit of 25,000 on average saw a 39,309 average profit over the past six years. Second was gold, with a 22,484 profit on the same stake.

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Auto-enrolment — don’t leave it too late…

With auto-enrolment (AE) well under way for the UK’s largest businesses, over the next three years an additional 800,000 smaller employers (with less than 60 employees) will start their journey to comply with the legislation. AE mandates all eligible employees and their respective employers to make regular pension contributions into a qualifying pension scheme. To learn more about the legislation read our brief Jelf AEase — simple steps to AE compliance guide.


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