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Legal & General goes for world of medicine


Health & Pharmaceuticals index-tracking Isa.

Type: Maxi stocks and shares Isa.

Aim: Growth by tracking health and pharmaceutical sectors of FTSE all world index.

Minimum investment: Monthly £30, lump sum £500.

Maximum investment: £7,000.

Catmarked: No.

Investment choice: 64 per cent US, 12 per cent UK, 5 per cent France, 8 per cent Switzerland, 7 per cent Japan, 4 per cent others.

Charges: Annual one per cent.

Commission: 2.5 per cent initial, 0.25 per cent renewal.

Tel: 02920 448412.

Suitability to market 5.5

Investment strategy 5.5

Past performance 5.8

Company’s reputation 6.5

Charges 7.0

Commission 4.8

Product literature 5.5

Legal & General has introduced the health & pharmaceuticals index-tracking Isa, an individual savings account that invests in the health and pharmaceuticals sectors of the FTSE all-world market.

Looking at how the Isa fits into the market, Cocken says: "I am not a great fan of index-tracking funds anyway, but this particular sector seems a little contrived. I can’t see that there is a market out there that is desperate for this product."

Bulgin thinks that the Isa is another specialist addition to Legal & General’s range of low cost trackers. Lakey says: "This is another example of the thematic approach beloved by marketing led investment houses. It is likely to be a success due to the low charges and the flavour of the month aspect."

Jones says: "The Isa complements Legal & General index tracking range. This is ideal for its ‘off the page’ direct sales and Barclays Bank operations."

Turning to the type of client that the Isa is suitable for, Bulgin says: "This is for anyone wanting low cost exposure to the health and pharmaceuticals sector and even for those first time investors as a part of an overall portfolio. It is also for the client looking for low cost management with no entry or exit penalties."

Cocken says: "It is difficult to imagine a client, but it might be for someone working in or associated with the National Health Service or a pharmaceutical industry and who might have an interest in, or extra knowledge of, the subject."

Jones says: "This is for the small investor who wants low cost, passive management, but you must accept the risk of high volatility."

Lakey says: "The success of the various healthcare funds will inspire many to jump into this issue. The tracking aspect will also appeal to those who believe that passive management is no bar to good performance."

Moving on to the marketing opportunities that the product will provide, Cocken is not positive. He says: "I don’t see this Isa offering any opportunities, just more difficulties in justifying an investment into this sector." Jones cannot see any at all.

Bulgin says: "Marketing opportunities include possible direct mailing, and perhaps using it to promote specialist funds." Lakey says: "This can be marketed to clients who have a longer than usual investment outlook, as it will definitely interest them."

Evaluating the main useful features of the Isa, Cocken says: "The strong points include the charging structure and the facility to switch into other index-tracking funds if required." Bulgin mentions that the main advantage is that it tracks an index devised by Legal & General and that cost is another major attraction.

Lakey says: "The main strong point is that it has low charges as well as the growth potential of a new fund launch."


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