Best Zurich funds for AVC?

Investor12

Hi all,
I'm in the process of setting up an AVC with Zurich.

I've been advised by my financial advisor to invest in equities based on my risk profile assessment. I've been given several suggestions, but the exact portfolio composition is ultimately my decision.

Zurich offers mostly actively managed funds like Prisma Max, Dynamic etc.

They also offer several passive indexes in developed (Blackrock), technology (Invesco) and emerging markets (Blackrock).

Index trackers outperform most active funds in the long-term.
Looking at the Zurich fund guide and this seems to hold true. The actively managed funds aren't fairing much better than the trackers.

Seems like it would be sensible to allocate the bulk, if not all, of the portfolio to the passive index trackers?


Some of the active funds (Dynamic, International Equity) are quite opaque about who their managers are and what they're holding, which makes me wary.

Is there any reason to include the actively managed Zurich funds? Are they just expensive index huggers?

I was thinking of splitting my portfolio between the developed world, emerging markets and NASDAQ index trackers. I won't be getting small cap exposure with this portfolio though.

Would this be reasonable?

Any thoughts are appreciated.
Thank you

Shedite27

I don't have any active managed funds, all passive funds, cheaper the better.

Yes that split looks good, removes any region risk (all invested in US etc).

caviardreams

I think teh fees for some of the non zurich managed fund options can be higher so just check that.

I like the 5 star 5 range and you can see teh breakdown of holding by company in the factsheets e.g. https://www.zurich.ie/funds/fund-products/equity-funds/global-equity-funds/5-star-5-global/

Happyhouse22

How can I check the fees on these funds?

Have a mixture of managed and index linked funds with Zurich and finding it hard to find this information.

Happyhouse22

Happyhouse22 wrote: »

How can I check the fees on these funds?

Have a mixture of managed and index linked funds with Zurich and finding it hard to find this information.

You would have been issued with a policy certificate when you bought the product/s. The AMCs, allocation rate and whether or not early encashment fees apply would be stated on this certificate.

Happyhouse22

Deleted User wrote: »

You would have been issued with a policy certificate when you bought the product/s. The AMCs, allocation rate and whether or not early encashment fees apply would be stated on this certificate.

Thanks Gerard, I have the AMC and the allocation rate. My research suggests that there can be lots of hidden costs not incorporated in the AMC - these seem to be an inevitable cost of investing in managed funds but would love to know how the funds compare.

The funds I have are

prisms 5
5 star global
Active Asset Allocation
and Eurozone equity.

I have found some info on fees on these when bought outside a pension but not within a pension.

Happyhouse22

Happyhouse22 wrote: »

Thanks Gerard, I have the AMC and the allocation rate. My research suggests that there can be lots of hidden costs not incorporated in the AMC - these seem to be an inevitable cost of investing in managed funds but would love to know how the funds compare.

The funds I have are

prisms 5
5 star global
Active Asset Allocation
and Eurozone equity.

I have found some info on fees on these when bought outside a pension but not within a pension.

There's no obligation on companies to disclose the TER (or or Ongoing Charges Figure (OCF) used by UCITS on their KIIDS) in Ireland (I'd say that's about to change) but that doesn't mean the information isn't available. Whoever you bought the product/s through should have access to the info. For the 4 funds listed above the OCFs are *currently* between 0.04% and 0.12%. These charges, along with Portfolio Transaction Costs, are included/reflected in the unit prices of the funds on their website.

When you're 'comparing', make sure you're comparing like-with-like eg compare multi-asset funds with other multi-asset-funds etc.

Gerard

www.prsa.ie

Happyhouse22

Thanks Gerard, that’s a great help.

Seems crazy that they don’t publish these fees more openly, .12% really isn’t that bad compared to the AMC of 1% I am paying but the fact that these charges are so hidden is disconcerting,

Shedite27

Happyhouse22 wrote: »

Thanks Gerard, that’s a great help.

Seems crazy that they don’t publish these fees more openly, .12% really isn’t that bad compared to the AMC of 1% I am paying but the fact that these charges are so hidden is disconcerting,

In a lot of cases, the product providers (Zurich, Aviva, Irish Life), have different deals for different brokers, so there's no one-size charge that they could display on a website or brochure. The only time you get a personalised view of what your policy is charged is the documents when you take out the product (some have online access now that might show you).

Gerrad's right, the AMC/FMC is standard for all people who invest ina fund so that's generally available.

Shedite27

Shedite27 wrote: »

The only time you get a personalised view of what your policy is charged is the documents when you take out the product (some have online access now that might show you).

That shoudn't be the case in this day and age. That's like finding out the price of something after you buy it.

The costs (specific to the product you're buying) should be disclosed at the point of sale. If not, walk away.

Gerard

www.prsa.ie

Shedite27

Deleted User wrote: »

That shoudn't be the case in this day and age. That's like finding out the price of something after you buy it.

The costs (specific to the product you're buying) should be disclosed at the point of sale. If not, walk away.

Gerard

www.prsa.ie

Yeah sorry meant that you get the info at the point of quote/sale, but unlikely to see much of it in your annual statements.

thomasm

Happyhouse22 wrote: »

Thanks Gerard, I have the AMC and the allocation rate. My research suggests that there can be lots of hidden costs not incorporated in the AMC - these seem to be an inevitable cost of investing in managed funds but would love to know how the funds compare.

The funds I have are

prisms 5
5 star global
Active Asset Allocation
and Eurozone equity.

I have found some info on fees on these when bought outside a pension but not within a pension.

I would not have eurozone equity in there. Will always underperform US long term. If you are paying in on a monthly basis and have 10 to 15 years plus to retire load up on equites. Prisma Max or the Tech fund will generate a better long term return.

Happyhouse22

thomasm wrote: »

I would not have eurozone equity in there. Will always underperform US long term. If you are paying in on a monthly basis and have 10 to 15 years plus to retire load up on equites. Prisma Max or the Tech fund will generate a better long term return.

Thanks for the input. Why do you say the Eurozone will always be outperformed by us equities? I see this is the case historically, but is there some underlining reason?

My rationale for including the EU fund was the fact that the other three funds are heavily exposed to us equities and thought that the eu equities fund would offer additional diversification. Will have a look at prisma Max and the equities fund. Thanks.

dickface

The active funds are more attractive in pension funds than outside of pension funds because most have the same management cost. Most of the gains passive funds historically have over active funds are their low cost relative to active - when that is removed the performance are much closer.

thomasm

Happyhouse22 wrote: »

Thanks for the input. Why do you say the Eurozone will always be outperformed by us equities? I see this is the case historically, but is there some underlining reason?

My rationale for including the EU fund was the fact that the other three funds are heavily exposed to us equities and thought that the eu equities fund would offer additional diversification. Will have a look at prisma Max and the equities fund. Thanks.

The US is the driver of the world economy. If its doing well it will drive markets in Europe and vice versa. I understand the diversification argument but it feels more like diversification for the sake of it. Europe as a better value option is a mantra that has gone on for a long time now without justifying it.

Happyhouse22

thomasm wrote: »

The US is the driver of the world economy. If its doing well it will drive markets in Europe and vice versa. I understand the diversification argument but it feels more like diversification for the sake of it. Europe as a better value option is a mantra that has gone on for a long time now without justifying it.

Thanks for the reply, definitely see what you are saying. Will probably leave it for now but consider changing it in the future.

Here are the funds I have access to, https://www.labrokers.ie/wp-content/uploads/2019/04/Standard-PRSA-AVC-Funds-2019.pdf