Product review: Octopus Gateway
New product aimed at visa applicants invests in UK registered company
This month’s niche offering goes to Octopus with the launch of its new Gateway product aimed at those trying to gain Tier 1 UK visa approval.
Offering an IHT solution as well as an option for those looking to get a skilled-migrant visa, the fund will invest in just one UK-traded company, although Octopus says diversification is offered by the different revenue streams of the company.
The product aims to offer suitable investments for those looking for visa approval – who must have a certain amount of personal investment in approved assets – while offering better returns than standalone investments in gilts.
After a minimum holding period of two years, the product is also IHT-free.
Initial charge is 5.5%, of which 2.5% can be IFA commission. An AMC of 1% is only charged if the targeted return of 4% pa before fees is met across the investment term. There is a two-year minimum investment, with a six-month notice period that can be served at 18 months.
June this year saw the sum that Tier 1 visa applicants have to invest in gilts or UK traded companies increase to £3,100 from £2,800.
Immigration figures are still high, with February data showing net immigration of 250,000 people, though this is partly due to falling numbers of people leaving rather than more entrants, so the fund is looking at an increasing market.
The product does only offer investment in one company, increasing risk dramatically, but Octopus says this firm has 10-12 different business streams.
With the potential to offer higher-than-gilt returns if successful, it could prove a good choice and with 10-year gilt yields currently at 1.62% this shouldn’t be too hard to beat.