Are Rabodirect Investment's any good.

Noelie

I'm looking to start putting some of my savings into investment. Are the Radodirect investment plans any good.
I'm only planning on investing about 100 -150 euro a month.

el diablo

Noelie wrote:

I'm looking to start putting some of my savings into investment. Are the Radodirect investment plans any good.
I'm only planning on investing about 100 -150 euro a month.

they've a large selection of investments now, both high and low risk.

they're definitely worth a go. make sure you do as much research as possible before you part with your savings...;)

A Random Walk

Personally I think the fees are too high.

el diablo

A Random Walk wrote:

Personally I think the fees are too high.

but it's a good place for beginners to invest..

A Random Walk

el diablo wrote:

but it's a good place for beginners to invest..

They're better than 90% of the offerings out there, and I suppose anything that encourages people to invest is a good thing. I'd be slightly concerned that they encourage people to move between funds on a regular basis, which will see you killed by fees. The funds are also actively managed (afaik), so they will perform poorly versus index trackers. Personally I think Quinns funds (I've no relationship with them) are best for small monthly contributions.

el diablo

A Random Walk wrote:

They're better than 90% of the offerings out there, and I suppose anything that encourages people to invest is a good thing. I'd be slightly concerned that they encourage people to move between funds on a regular basis, which will see you killed by fees. The funds are also actively managed (afaik), so they will perform poorly versus index trackers. Personally I think Quinns funds (I've no relationship with them) are best for small monthly contributions.

where can I find more info on the Quinn funds?

BendiBus

A Random Walk wrote:

The funds are also actively managed (afaik), so they will perform poorly versus index trackers.

You state that as a fact when nobody knows what will happen in the future. You also suggest ALL managed funds underperform ALL indices. That makes no sense.

Surely what you meant to say is that a managed fund is unlikely to outperform an index fund that is active in the same space.

FWIW, Quinn is probably better for the novice anyway. Firstly QL funds track the main indices that people would be familiar with. Secondly they take care of all tax liabilities. If you invest in Rabo funds you need to do your own taxes.

A Random Walk

BendiBus wrote:

You also suggest ALL managed funds underperform ALL indices. That makes no sense..

Of course it makes no sense because that's not what I said. I had assumed that no-one would think I was talking about the index which tracks the price of hogs in Chile or the number of snowballs thrown in Norway, I'll clarify things in the future to help you.

RaboDirect

A Random Walk wrote:

They're better than 90% of the offerings out there, and I suppose anything that encourages people to invest is a good thing. I'd be slightly concerned that they encourage people to move between funds on a regular basis, which will see you killed by fees. The funds are also actively managed (afaik), so they will perform poorly versus index trackers. .

The RaboDirect offering operates on a different basis to the typical "basket of funds" that you would buy from a life insurance company. At RaboDirect you purchase individual funds. We don't charge early encashment penalties, ie, 5% if you exit in year 1, 4% in year 2 etc. So for example, you buy 250 units of Fund A charged at 0.75% of the investment amount. Later on you can sell all or part of your holding, eg, sell 75 units. An exit charge of 0.75% would apply. You can sell after 1 day or hold the funds for as long as you want. Of course if you invest in equities it is advisable to invest over the longer term. But we don't "encourage people to move between funds" - we don't lock you into a fund that you might later decide is no longer appropriate for your investment portfolio.

The funds offered by RaboDirect are all actively managed by their fund managers - Blackrock/Merrill Lynch, Henderson Global, Robeco and Oppenheim. The comment that they will perform poorly against index funds is incorrect and a gross generalisation. Certainly index funds are generally cheaper than actively managed funds. If you purchase a managed fund you do so for a number of reasons one of those being that you may believe that it will outperform the index it tracks over time. Without getting into a long debate about index v managed funds you need to make more accurate comparisons. For example, say you are interested in a European equities fund - go and compare a few index funds v managed funds. Take into account the charges, past performance (usual warnings apply), independent ratings if available, investment strategy, minimum investment amounts, exit penalties etc. Then see how they stack up.

I'm not knocking Quinn Life. If you really want an index fund then they are worth looking at. You could also consider ETF's that are now becoming more widely available.

If you need professional advice then educate yourself and then go to a financial adviser - one that will charge you a fee for advice as opposed to one who gets commission from an institution.

Reyman

A Random Walk wrote:

Of course it makes no sense because that's not what I said. I had assumed that no-one would think I was talking about the index which tracks the price of hogs in Chile or the number of snowballs thrown in Norway, I'll clarify things in the future to help you.

Correct - roughly zero % of these index funds match the index. How can they ? when they are charging you minimum 1-2% every year to manage your money and possible entry and exit hits of up to 5%.

Invest your money yourself and don't give any of these companies an annual fee for doing nothing.

A Random Walk

RaboDirect wrote:

..we don't lock you into a fund that you might later decide is no longer appropriate for your investment portfolio.

I was making a more general point that ease of using the Rabo site to buy and sell funds might encourage investors to trade too often. Hardly a criticism of yourselves directly if your site is too good. .75% of an entry and exit fee is hardly charity on your part however.

The comment that they will perform poorly against index funds is incorrect and a gross generalisation....Without getting into a long debate about index v managed funds you need to make more accurate comparisons.

Alright so, let's be accurate.

Over a 30 year lifetime, what percentage of managed funds outperform their indexes?

Is it
a) 1%
b) 2%
c) 3%

This graph on Vanguards site is succinct (index = S&P):

http://www.vanguard.com/bogle_site/images/jcb05152006_21.gif

Out of the 355 active funds that were available for the time period, 225 no longer existed (hardly because they were so overwhelmingly successful). Of those that survived, only 24 beat the index (15 of which only beat it by 1% a year). You'd want to have been an incredibly good (or lucky?) investor to pick the 1% of managed funds out of the hundreds available that would outperform.

RaboDirect

A Random Walk wrote:

.75% of an entry and exit fee is hardly charity on your part however.QUOTE]

In comparative terms these fees are low. Fund managers allow us to charge up to 5% on entry (which nobody should pay!). We only charge 0.75%. Also, the minimum investment amount is only €100. This compares very favourably to other investment options where minimum investment amounts can start from €20k, or tracker bonds that can work out to be quite expensive, we don't charge bid/offer spreads or early encashment penalties etc etc.

As mentioned in our post above we don't want to get drawn into a never ending debate about index v managed funds as we can all come up with various stats to make a case. Yes, it is true that many managed funds will not beat the index and of course, index funds will yield less than the index. We're not out there trying to defend the entire managed funds industry - we have our own specific criteria for selecting fund managers and their funds. We will be publishing this on our site in the coming months which will make our position very clear to our customers.

There is no reason why you couldn't or shouldn't have index and managed funds in your investment portfolio. Investment strategies are never black and white. I would say that many, not all, of the managed funds that we offer have outperformed their indices over time.

This article from Joe O'Dwyer, joint CEO of Oppenheim Investment Managers, might be of interest - http://www.rabodirect.ie/investments/fund_details/oppenheim_article.asp

It's very encouraging that people are out there trying to educate themselves and engage in debate about investments. Over time investing in equities will yield higher returns that deposits and dare I say it, property. Decide on your investment goals, identify your risk appetite, diversify your portfolio. Take your time and don't jump at the first investment opportunity that comes your way. Do a bit of research first. As always, past performance is no guide to future returns so don't fall into the trap of trying to to chase historical returns!