Managed Funds

Gottono

Can anyone tell me what is likely to happen to a Managed Fund in BoILife if the govt. take a major share of Bank of Ireland? The fund does not contain shares in Irish Banks, is made up of a broad range of national / international Equities, Bonds, Properties & Cash
What is the difference between these managed funds and the monies invested by people in Anglo who 'lost everything'
Thank you for your help

Pablo Sanchez

People who 'lost everything' in Anglo did so as they were direct shareholders and when the bank was nationalised their shares became worthless.

A managed fund is a collection of investors funds which are usually invested in equities (each fund will vary regarding the sectors and countries these equities are invested in), bonds, cash and even commercial property.

If a managed fund holds shares in an individual bank that became nationalised, the value of the fund will naturally be affected, same as if you personally held the shares, but this does not mean that the fund becomes nationalised too.

Gottono

Thank you Pablo Sanchez - re: direct shares - that confirmed my understanding. However I am still confused about the first question in my post.

Please bear with me on this, I'm trying to understand the following and work out the security (or otherwise) of managed funds.

I own xxx units in Fund A, and xx units in Fund B. These were purchased in BoI from BoILife and are managed by BIAM or some other fund manager.

I own the units in these funds but I guess the funds themselves are owned by BoILife / BoI and as such are their assets - right?

If the govt. take up to 70% of BoI after Xmas - surely these funds are assets and as such are part of the package - right?

BoI must sell off some it's assets to recapitalise - basically to replace money it currently does not possess, if I wanted to encash my units in their managed funds - right?

Although the investors funds are performing reasonably ok(ish) in the current financial climate - they are 'bank assets' of which I own xxx units - right?

Are these assets absorbed into BoI debts if/when the govt. take 70% of the bank or do I still retain ownership of the units in these funds and will they retain the performance values of the funds?

As far as I know there is no guarantee on investments other than the Investor Compensation Scheme

Thanks in anticipation of any reply

Pablo Sanchez

Hi,

Your correct in saying that you own units in the fund. The value of the units rise and fall according to the underlying value of the shares/bonds etc, but you do not directly own the shares, the fund owns them.

BOI Life is a BOI company and if BOI is nationalised then the fund will continue as normal. I know that BOI is trying to sell a number of its companies including ICS, BOI Life and BOI asset managers (im open to contradiction on the individual companies : ) ) and so if they find a new owner, or even if they dont, the fund will continue as per normal.

Your right that there is not really an equivalent scheme for Life Co's as the Bank Gtee scheme, but Life Co's dont face the same problems that banks do so i wouldnt be overly concerned.

I hope that helps.

Gottono

Thank you very much Pablo Sanchez