Dave Ramsey

Soarer

Recently started listen to this guy on podcast. He talks a lot of sense (from my novice point of view) and I'm trying to apply what he teaches...get rid of debt, pay cash, live debt-free, invest in your pension, etc.

I'm paying off my debts as quick as I can (idiot!), but what's catching me is his investment recommendations for the pension.

He always recommends a "good growth stock mutual fund", but I don't know if such a thing exists in Ireland. He reckons that they average 12% over their lifetime.

I'm currently investing my pension in an Irish Life fund through our company. It's called Global Equity Strategy. According to the pension manager(s), this is a "company specific" title and doesn't relate exactly to their public quoted funds. They've said it's made up 95% ILIM Global Equity Fund and 5% Indexed Emerging Market Equity Fund.
The literature they provide is sparse enough, and I chose it to it's low fee and high potential for growth.

I'm 39, and my current pension pot stands at €110k (was €130k last July! :mad:)
I'm contributing 7% of salary, to which the company is matching with another 10%, plus I'm making 3% AVCs. This will be increasing in June after 15 years' service to 8%, 11%, and keeping my 3%.

I haven't got much else going for me other than my pension, so I'd like to maximize returns.

So after all that....
Is there such a thing as "Good Growth Stock Mutual Funds" in Ireland?
If there are, where are they and should we all be in them?

Thanks guys & gals.

Sonnenblumen

I wouldn't touch Irish Life with a barge pole.

Prezatch

Sonnenblumen wrote: »

I wouldn't touch Irish Life with a barge pole.

I don't think he has much choice given that his company choose Irish Life to be their pension providers?

OP, you may have looked here already but you might find more info on your chosen fund here - https://www.irishlife.ie/investments/fund-prices-and-performance

It looks like your fund is 'Dynamic Global Equity'

If I were you I'd look into the benefits of switching from an actively managed fund to a passively managed fund which may be quite a bit cheaper and give the same if not better returns. Give them a ring and try and find out the finer details of what the management fees are. I think that is what Sonnerblumen is getting at - don't have an Irish Life 'expert' charging you. The 'high potential for growth' spiel is absolute garbage of the highest order and they should be banned from advertising stupid statements such as this.

Soarer

Sonnenblumen wrote: »

I wouldn't touch Irish Life with a barge pole.

Not helpful in the slightest. Ignoring the fact that I don't have a choice, you could at least offer an alternative.

JoeyD wrote: »

I don't think he has much choice given that his company choose Irish Life to be their pension providers?

OP, you may have looked here already but you might find more info on your chosen fund here - https://www.irishlife.ie/investments/fund-prices-and-performance

It looks like your fund is 'Dynamic Global Equity'

If I were you I'd look into the benefits of switching from an actively managed fund to a passively managed fund which may be quite a bit cheaper and give the same if not better returns. Give them a ring and try and find out the finer details of what the management fees are. I think that is what Sonnerblumen is getting at - don't have an Irish Life 'expert' charging you. The 'high potential for growth' spiel is absolute garbage of the highest order and they should be banned from advertising stupid statements such as this.

Thanks Joey.

The fund "booklet" I have (2 page .pdf file) says it's passively managed, and the "total expense ratio for this strategy is 0.19%". Don't know whether that's good or bad!
It also states that the Strategy Performance % over the last 3 years is 10.9% per annum.
They have another equity passed option called "The Specialist Equity Strategy". This one is actively managed, has an expense ratio of 0.93%, and has a Performance % over 3 years @ 15.1%, and 5 years @ 10.6%.

Looking at those numbers it seems I might be in the wrong fund. the specialist seems to be outperforming the global.
But I'm unsure of the 0.93% fee.
Is that on total fund worth (up to €115k this morning! ), or on your contributions, or on interest earned?

There's a virtual pint for someone if they can work out the best option for me using the following figures....
Current fund value - €115,000
Annual contributions - €10,400.
Fund 1 gives a 3 year return of 10.9% p.a. with a fee of 0.19%
Fund 2 gives a 3 year return of 15.1% p.a. with a fee of 0.93%.

Jaysus, the more I read those figures, the more I think I'm definitely in the wrong fund!

Thanks again.

Edit: Ignore all that. I was working off old figures!:o
The current figures for my fund is 14.4% p.a. over 3 years, with a fee of 0.19%
The figures for the alternative is 15.1% p.a. over 3 years, with a fee of 0.93%
So even though there's a 0.7% p.a. difference in returns, there's a difference of 0.76% in fees. Probably better off staying put.

Sonnenblumen

Soarer wrote: »

Not helpful in the slightest. Ignoring the fact that I don't have a choice, you could at least offer an alternative.



.

You say you're 39 and your fund is falling (20% last year) and you don't have a choice? Go figure yourself.

Soarer

Sonnenblumen wrote: »

You say you're 39 and your fund is falling (20% last year) and you don't have a choice? Go figure yourself.

Oh, you're one of those people.

I'd appreciate if you didn't post in this thread again.

moneymad

What about vanguard? entry is 100,000k

Sonnenblumen

Soarer wrote: »

Oh, you're one of those people.

I'd appreciate if you didn't post in this thread again.

Happy to oblige

Soarer

moneymad wrote: »

What about vanguard? entry is 100,000k

Haven't a clue what that is. Must get Googling.

Sonnenblumen wrote: »

Happy to oblige

I see what you did there. Very clever.

Soarer

moneymad wrote: »

What about vanguard? entry is 100,000k

Soarer wrote: »

Haven't a clue what that is. Must get Googling

Can't find anything through Googling. Have you further info, or maybe point me to somewhere?

Francie Barrett

Soarer wrote: »

He always recommends a "good growth stock mutual fund", but I don't know if such a thing exists in Ireland. He reckons that they average 12% over their lifetime.

Mutual funds are ones where a fund manager actively picks stocks that he/she believes will out perform the market. Typically, you pay a higher fee to a manager for this expertise. However that extra fee does not necessarily guarantee that the fund can surpass what a index would. Indeed, there is debate whether a mutual fund generally under-performs index investing.

Index funds (which it sounds like you are in) are ones where the fund is weighted towards a particular allocation. For example, a global fund like yours might be expected to contain the worlds top 100 companies, where the size of the company dictates how much of a weighting the fund will place in it. Fees for this kind of investment are lower, however you will never under/outpeform the index - because you are the index! In your case, you are down 20% from last year, because the global market as a whole is down by 20%.

If I was you, I would just stay where you are.

Soarer

Francie Barrett wrote: »

Mutual funds are ones where a fund manager actively picks stocks that he/she believes will out perform the market. Typically, you pay a higher fee to a manager for this expertise. However that extra fee does not necessarily guarantee that the fund can surpass what a index would. Indeed, there is debate whether a mutual fund generally under-performs index investing.

Index funds (which it sounds like you are in) are ones where the fund is weighted towards a particular allocation. For example, a global fund like yours might be expected to contain the worlds top 100 companies, where the size of the company dictates how much of a weighting the fund will place in it. Fees for this kind of investment are lower, however you will never under/outpeform the index - because you are the index! In your case, you are down 20% from last year, because the global market as a whole is down by 20%.

If I was you, I would just stay where you are.

Finally, plain English!

Thanks Francie. That makes sense now.

Oh, and it's not down 20%. It's down approx. 11%. But seeing as I'm continually investing (circa. €900 per month), when it's down I'm buying units cheap so hopefully the "up" will be bigger.

As an aside, have you any idea why some people "wouldn't touch Irish Life with a barge pole"? Surely an index fund is an index fund no matter who the manager is, and the only difference will be the fees?

arrowloopboy

Take control of your own pension,through Davy select or a similar product.
Subscribe to Investors Chronicle (about E150.00 PA),they do a top rate yearly 100 best funds review with weekly updates.
Put together a fund of funds yourself ,taking diversification ,cost and consistency into account ,it aint rocket science ,and if you lose money (which is highly improbable over the long term),at least you lost it yourself.

Soarer

Thanks arrow, certainly sound doable. But....
If I were to do that, what are the chances of me beating the Index my fund is currently tracking?
And if a novice like me can beat it using the instructions above, why don't/can't all active fund managers do it using the same instructions?

Not trying to sound like a dick, and I do appreciate the advice. Just curious.

arrowloopboy

Soarer wrote: »

Thanks arrow, certainly sound doable. But....
If I were to do that, what are the chances of me beating the Index my fund is currently tracking?
And if a novice like me can beat it using the instructions above, why don't/can't all active fund managers do it using the same instructions?

Not trying to sound like a dick, and I do appreciate the advice. Just curious.

Sorry Soarer,my bad ,I didn't read all the previous posts.