Managed funds in Ireland

tmq

Hi,

I have approx 120k in a bank account. I want to get it earning something (obviously in a bank is not the place to be at the moment), but want to keep it accessible as I'll probably be doing something more long term with it in around 2 years (probably in a different country).

I am new to Ireland, and just wanted to get a few names of active managed funds providers.... any suggestions? I already have money in Merrion Investments (going well so far), so want to diversify with someone else.

I'm aware of IrishLife, Invesco, zurich life...

Obvious preference is for low fees and high returns!

Thanks.

PaulM1977

Try Davy Select, can invest and withdraw your money when required unlike the others, Irish Life, New Ireland, Aviva, who make you invest for at least 3-5 years.

FURET

tmq wrote: »

Obvious preference is for low fees and high returns!

Actively managed funds are very expensive. Even a 1.5% management fee can cost you a huge amount.

Let's say you invest your 120k in a managed fund for 15 years. Over that time, the global stock market averages 8%. 120k earning 8% annually for 15 years = EUR 380,660.

But because your managed fund charges 1.5%, your money only grew at 6.5%. 120k earning 6.5% annually for 15 years = EUR 308,620.

The active fund manager got 72k for performing no better than an ultra low-cost passive index tracker! I don't know about you, but I'd rather keep that 72k for myself.

And just to preempt: No fund manager that you will contract will beat the index over 15 years. Not one.

ftse100

Totally agree with you FURET. Passive Investing is the way to go in my opinion. The fees are much more in the clients favour. Some people think 1.5% is nothing. As you've shown this can take a serious chunk of money in the long term.

FURET wrote: »

Actively managed funds are very expensive. Even a 1.5% management fee can cost you a huge amount.

Let's say you invest your 120k in a managed fund for 15 years. Over that time, the global stock market averages 8%. 120k earning 8% annually for 15 years = EUR 380,660.

But because your managed fund charges 1.5%, your money only grew at 6.5%. 120k earning 6.5% annually for 15 years = EUR 308,620.

The active fund manager got 72k for performing no better than an ultra low-cost passive index tracker! I don't know about you, but I'd rather keep that 72k for myself.

And just to preempt: No fund manager that you will contract will beat the index over 15 years. Not one.

The_Pretender

FURET wrote: »

Actively managed funds are very expensive. Even a 1.5% management fee can cost you a huge amount.

Let's say you invest your 120k in a managed fund for 15 years. Over that time, the global stock market averages 8%. 120k earning 8% annually for 15 years = EUR 380,660.

But because your managed fund charges 1.5%, your money only grew at 6.5%. 120k earning 6.5% annually for 15 years = EUR 308,620.

The active fund manager got 72k for performing no better than an ultra low-cost passive index tracker! I don't know about you, but I'd rather keep that 72k for myself.

And just to preempt: No fund manager that you will contract will beat the index over 15 years. Not one.

I've money in the Henderson Horizon Pan European Equity fund through Rabodirect. With Management fees quite high at 1.2% and a 0.75% entrance and exit fee, how would one join a passive index fund?

Jim2007

tmq wrote: »

I have approx 120k in a bank account. I want to get it earning something (obviously in a bank is not the place to be at the moment), but want to keep it accessible as I'll probably be doing something more long term with it in around 2 years (probably in a different country).

In that case the bank or a similar institution is the place for your money, that is unless you don't need all the money that is.

1st dalkey dalkey

Don't know much about funds but think them more designed for longer term investment. Also the management fee applies to the total amount in the account, not just to any profits made, i.e. they charge the fee even if they lose your money. So, even if they broke even with your money over the 2 years, you will be down the fee. If the fee is 1.5%, that's 3.6K deducted from your 120K. Fees on low cost trackers would be lower, probably less then half that, but still substantial.
Open an online trading account. Put 12k into each of 10 large cap multinational dividend paying companies in different jurisdictions and sectors. At 20€ per trade that is 200€ and the same to trade back out in two years, total 400€ in fees.
Difficult to find good value shares at the moment, but the large cap multinationals are relatively safe and the dividends are better then any bank rate.
Look at; Proctor and Gamble, General Mills, Intel and Realty Income in the US. Unilever, Associated British Foods, Diageo and Vodafone in the UK. Seimens, DP/DHL, SAP and BMW in Germany, Wesfarmers, ANZ Bank and BHP Billiton in Australia. Oil is under pressure lately but the big players are still worth a look, Chevron, BP and Royal Dutch Shell pay good dividends and have already fallen as far as they are likely to. Do a bit of research on each company and decide which best suit you.
There are risk factors in this approach; Will the recovery continue or taper out, how long will QE go on for in the Euro area?, when will the US and the UK start raising rates? Will Greece default and what effect will that have? Will China have a soft landing? Will Putin loose the head? But all of those factors will also impact your fund.
If you are risk averse, leave it in the bank, but in two different banks. Good Luck.