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RSAE and Framlington team up

Royal & SunAlliance Eurolife



RSAE Framlington Health Fund

Type: Sicav

Aim: Growth by investing in healthcare, medical services and product

companies

Minimum investment: Lump sum Euro 15,000

Place of registration: Luxemburg

Investment split: 100% in healthcare, medical services and product

companies

Isa link: No

Charges: Initial 0.5%, annual 1.5%

Commission: Initial 5%

Tel: 00353 15009100

Broker Panel:-

Brian Pack – Principal, Brian Pack Financial Services

John Hill – IFA, Positive Solutions

Jeremy Marsh – Investment manager, Lupton Fawcett

Broker Ratings:-

Suitability to market: 5.7

Investment strategy: 7.3

Company’s reputation: 6.0

Charges: 4.3

Commission: 6.0

Product literature: 4.3

Royal & SunAlliance Eurolife has introduced the RSAE

Framlington health fund, a Sicav investing in healthcare, medical

services and product companies.

When asked how the product fits into the market, Pack says:

"It is entering a crowded market with the big boys of pan

Europe." Hill thinks it is a speculative product, saying that

biotech has been having some spectacular failure recently.

Marsh says: "It fits well as one of the few providers with a

pedigree in this sector."

Looking at the type of client the Sicav may be suitable for, Hill says:

"Younger clients who expect this type of company to lead

the world."

Pack thinks that people who are prepared to accept some risk to

obtain good growth will like the product. Marsh says: "Most

clients with a moderate plus risk acceptance could have this in a

portfolio of £100,000 plus."

Moving on to the marketing opportunities offered by the product, Pack

says he can see none to his clients. Marsh says: "For the

clients, it is a good opportunity because of the current low prices for

those wanting such a fund." Hill says: "The

opening will be there at a time when the biotechs are a

success."

Considering the main useful features and strong points of the

product, Marsh says: "It invests in a good and growing

sector, and currently has a low price."

Hill thinks healthcare will always be in the market, and the need for

this comes from the ageing population. Pack says:

"Framlington has built a very strong team who specialise

in healthcare."

When asked to identify the disadvantages of the Sicav, Hill says:

"The failures of the sector get big press

coverage." Pack picks out the bid/offer spread which he

thinks is high, and Royal & SunAlliance’s

declining reputation. He adds that the fund is subject to currency

risk.

Marsh says: "None except must be part of a larger portfolio

due to its longer term nature. This is because its success is reliant

on legislative changes."

The panel is not impressed by the flexibility offered by the fund. Marsh

says there is not much flexibility. Pack says: "The bid/offer

spread is high, which cuts out the flexibility in moving funds

around." Hill says the flexibility is okay, but that there is

better around.

Considering the investment strategy of the fund, Marsh says:

"It is not that different from other healthcare companies.

Healthcare is a growing market area. It is fine for the long term, but

for the short term it is probably the most volatile fund in its

sector."

Hill does not have a problem with the investment strategy. Pack

thinks the strategy is quite good, and the sort of thing that you would

expect from a healthcare fund.

Turning to the reputation of Royal & SunAlliance Eurolife,

Hill says he is not particularly impressed. He says: "It is

not an all singing, all dancing attraction. It does not back up what it

says. The sales pitch is not supported by the

performance."

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