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50K to invest prsa vs managed fund advice

  • 05-11-2021 10:35am
    #1
    Registered Users Posts: 2 R0me0


    Folks

    First Post here and thanks if you can offer any tips/ideas.

    Mortgage paid, no loans , kids reared.Healthy savings and public pension in 6yrs time.

    Looking for advice on investing 50k. Thinking of maxing out my and my wife's existing prsa over a few years due to the tax relief and small fees payable.

    Other idea which I have verbally committed to with a financial advisor.invest the 50k in the irish life protected consensus market fund.total annual management fees 1.82%.

    Just don't want the 50k sitting in a bank.

    Thanks again.



Comments

  • Registered Users Posts: 29 grassmoon


    AMC of 1.82% is quite high. Davy Execution only PRSA offer 0.75% and let you invest in passive index funds.



  • Registered Users Posts: 14,601 ✭✭✭✭ Supercell


    Open a Degiro account and put it all in SMT, thank me in 6 years.

    Have a weather station?, why not join the Ireland Weather Network - http://irelandweather.eu/



  • Registered Users Posts: 29 grassmoon


    Any active fund you get from an Irish finance company will have high fees and poor performance.



  • Registered Users Posts: 3,058 ✭✭✭ Static M.e.


    (SMT = Scottish Mortgage Investment Trust PLC)

    How long do you plan on investing for?

    Depending on that answer. Similar to SuperCell above, I would open a Degiro account and put it all on an ETF or something like SMT. Just make sure you understand the tax implications of whatever options you choose.

    For some background reading, I really like this website AnIrishInvestorsGuide – The simple guide for Irish investors.

    and this is worth reading too

    Don’t invest in an ETF until you understand the tax (irishtimes.com)



  • Registered Users Posts: 241 ✭✭ GerardS


    AMC of 1.82% is horrendous.


    If you add the Other Ongoing Costs to that (assumimg that you can Irish Life to disclose them) you're probably looking at an equivalent Total Expense Ratio of circa 2.5%.


    Way better value in the market than that for these products.


    What dod the finiancial advisor say about putting some money into the PRSA?



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  • Registered Users Posts: 5,255 ✭✭✭ The J Stands for Jay


    It's the worst possible type of fund in this case. It's protected, which contributes to the cost, but the protection is likely not worth it, and then it's a consensus fund, which means the active management is merely copying the average asset allocations of other actively managed funds; hardly worth paying an active sized fee for.



  • Registered Users Posts: 29 grassmoon


    A low cost investment trust like SMT is a good option. I'm invested in them myself.



  • Registered Users Posts: 2 R0me0


    Thanks Folks.

    Decided not to go ahead with the Irish life investment even before I read your opinions.

    I didn't discuss in depth the prsa idea with the financial advisor.

    The investment would be long-term 10yrs min.

    FYI. I have a deffered pension from a prior employment that i left in 1999 that was worth £10k at the time.Its current value is €74k.Hence my interest in putting the lump sum into equities.

    I will do a bit of research on your advice and take it from there.

    Thanks again.



  • Registered Users Posts: 1,585 ✭✭✭ uli84




  • Registered Users Posts: 1,585 ✭✭✭ uli84


    Would you be able to tell me more regarding tax implications when investing in SMT?



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  • Registered Users Posts: 3,058 ✭✭✭ Static M.e.


    @Uli84 I personally don't invest in Investment Trusts (ITs) so I'm not the best person to answer. I believe the main difference is how they are treated for tax. With ITs you pay 33% Capital Gains Tax when you withdraw the funds as opposed to the 41% exit tax every 8 years and on withdrawal with EFTs. With ITs you can also use your annual CGT allowance of €1270 to offset losses against any gains. They are definitely worth looking into and they have a lot of strong\experienced followers here so I hope one of those could jump in and help you.



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