Pharmaceutical ISA

Investment_Dummy

Has anyone any experience of pharmaceutical ISAs? I have come across one through Orchestra Finance which invests in a selection of well known pharmaceutical companies, claims to make up to 8% pa, is apparently regulated under the FCA and your capital is apparently guaranteed by the FSCS. Too good to be true or a good pitch for a first-timer?

Reaper

claims to make up to 8% pa - entirely possible but past performance is no indicator of future performance
is apparently regulated under the FCA - Orchestra Finance is, yes, provided you are dealing with the legitimate company and not a similar sounding clone.
your capital is apparently guaranteed by the FSCS - NO!

If you provide a link to the product I can tell you more but the FSCS doesn't protect you from investments that fall in value.

If Orchestra Finance were to pretend to invest your money and actually spend it luxury trips for themselves then the FSCS would cover you up to the investment limit (probably £50k in this case). But if the money was properly invested in pharmaceutical companies that crashed in value you would get no compensation from the FSCS.

Malthusian

Reaper wrote: »

If Orchestra Finance were to pretend to invest your money and actually spend it luxury trips for themselves then the FSCS would cover you up to the investment limit (probably £50k in this case).

Not necessarily. If it was a loan note to Orchestra Finance and the directors spend all the money on fact-finding trips to Bermuda, and there is no money left to pay your interest, then you would get nowt from the FSCS.

OP - how did you come across this investment?

Investment_Dummy

Thx Reaper.

Malthusian - I came across it while browsing news articles on the internet, so filled in the enquiry then they called me. They are a bit pushy, which makes me wary.

AnotherJoe

BIOG and WWH are the two I and Mrs AJ hold.There are others, BBH is a new one.

None of these however will guarantee you anything because they are "proper" funds, and I suspect its clever wording about what Orchid have done in the past that makes it look like a guarantee.

Which doesn't inspire confidence, to put it mildly.

Doshwaster

While I like the pharmaceutical/life science sector for investments, I really don't think it would be wise to put too many of your eggs into one basket.

Why not have a standard S&S ISA with some pharma/biotech funds as well as other sectors to keep some diversity?

jimjames

Investment_Dummy wrote: »

Has anyone any experience of pharmaceutical ISAs?

Not quite sure what you've seen but there is no such thing as a Pharmaceutical ISA. There are cash ISAs, S&S ISAs but no pharmaceutical ones.


Do you mean a S&S ISA that invests in pharma shares? Who is the ISA manager? I think ISA rules are much stricter than SIPP rules so it would be interesting to know what is being promoted.

Plus

Investment_Dummy wrote: »

Thx Reaper.

Malthusian - I came across it while browsing news articles on the internet, so filled in the enquiry then they called me. They are a bit pushy, which makes me wary.

Can you provide us with a link to their website? (you're new and the forum won't let you post links, but you can obfuscate it a bit like replacing dots with spaces)

When I search I can find various things that it might be, but it would be good to have it confirmed.

AnotherJoe

Thinking about it, if says it can provide gains "up to" 8% you might want to consider what the meaning of "up to" includes

I also very much doubt it says your capital is guaranteed. If it does, its going to be a standard offering of the "bond" type whereby they hedge their purchases, and you are "guaranteed" up to 8% (which could include zero), and they will take the lions shares of gains.


You can create products like this yourself, see Moneyvator.

System

Why would you have an ISA in just one sector?, 8% ain't anything special, in this case diversification won't cost you any performance

Investment_Dummy

Hi Plus,

Appreciate your input. The document was an attachment to an info e mail sent to me by Orchestra Finance LLP. They have a website.