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AskPaul investment club/ Zurich dynamic fund

  • 19-04-2022 9:06pm
    #1
    Registered Users Posts: 183 ✭✭


    Hi All,


    I have just setup a savings plan with Zurich through AskPaul, it is in the Zurich Dynamic Fund. The annual management charge is 1.5%. I am 29 and currently have around 30,000 euro saved in a credit union account which I will plan on using in the next couple of years for a house deposit. Over the last 4 years I had been buying shares through a revenue approved share scheme at work, the current value of my shares is 28,000 euro and these will mature every 6 months until December 2022.


    I set up the account for the Zurich Dynamic fund to try grow my money in the long term but is this a good option for me? I only found this site after signing up for the account. I have setup to invest 500 euro a month to this dynamic fund and would hope to continue in the long term. I also plan to continue saving on top of the 30,000 euro I have towards a house deposit, adding 1000 euro per month. As my shares mature and I sell them, would it be a good idea to add this to the zurich fund?


    Thanks



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Comments

  • Registered Users Posts: 2,639 ✭✭✭completedit


    Prisma 5/6 bro



  • Registered Users Posts: 80,499 ✭✭✭✭Atlantic Dawn


    The Factsheet is a little light on information as to what % is invested in each stock holding, it could be 80% in Apple or 10%, I'd expect this detail before investing money in it.



  • Registered Users Posts: 27,963 ✭✭✭✭drunkmonkey


    I'm underwhelmed, I've been paying into a 50/50 split between Dynamic and Prisma Max, seemed to be doing ok but now my transfer value is less than what i've put in. Kinda regretting not putting it into my own share picks, i'll see how it gets on over the next few months but i'm tempted to move it into something else.



  • Registered Users Posts: 183 ✭✭tolow


    Thanks for the reply. How long have you been investing in it? I plan on it being something long term but wondering would I be best off somewhere else.



  • Registered Users Posts: 27,963 ✭✭✭✭drunkmonkey



    Only 2yrs, said i'd put a little in a safe space, it feels far from safe when compared to my degiro account which is still plodding along nicely even after some draw downs. My other half says it's a long term thing don't look at todays value, I would like to have seen my investment grow which it hasn't. Maybe it'll have a good Q2 as I was impressed in the 1st year but it seem to have given up all gains.



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  • Registered Users Posts: 556 ✭✭✭sonyvision


    I have my pension in the dynamic fund. It in since Jan 2017, started out with 10% Salary now up to 30% in the last year. Done reasonable well up maybe 20% on what I put in. Last few weeks obviously put a dent into it but 30 years away from retirement so only time will tell.



  • Posts: 281 ✭✭[Deleted User]


    The Fund Growth calculator on the Zurich website has the cumulative growth on the Dynamic & Prisma Max up circa 40% over the last 2 years.

    1.5% AMC is pretty hefty.

    You don't say what the allocation rate was but I assume it's 100% and that there early exit charges on the contract?



  • Registered Users Posts: 27,963 ✭✭✭✭drunkmonkey


    I had my dates wrong only started paying in January 2020, put in 10k cash and a monthly of 420, so 17k paid in there and currently has a transfer value of 17,970.

    I added another 11k in November 21, that has a current transfer value of 9.5k.

    I understand that the higer the risk catogery the higer the risk of losses, it's just feels like i'd have made a better return myself than these funds have delivered, If I had just stuck it into microsoft like I wanted and not listended to experts i'd be quids in.

    Just had another looks at those funds less than 4% in cash, seems a bit risky, no money to buy opportunites.



  • Posts: 281 ✭✭[Deleted User]


    01/01/2020 to 20/04/2022 was circa +30% for those two funds.

    01/11/2021 to 20/04/2022 is minus circa 6%

    I suspect that the values you're looking at include early exit charges (?) which are are amplifying losses and not related to the performance of the fund/s.

    The weekly/monthly investment news/reviews on their will give you an indication of the fund managers views on asset allocation.



  • Registered Users Posts: 27,963 ✭✭✭✭drunkmonkey


    The Current Value of the 17k one is 18,700 so about 10% retun there as long as I leave it with them.

    The 11k is 10k.

    Up 700 euro over all.

    It's not instilling much confidence in me, these guys have manged to give me a negative return on my 11 in 5mts. Negative, how? Have they heard of a stop loss, come on Zurich tuck it in.

    My worry is a shock could sink these funds if they can't make a return at the moment.



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  • Registered Users Posts: 170 ✭✭Mr_Jacko


    Do they provide information on the fund managers? such as track record etc



  • Registered Users Posts: 2,251 ✭✭✭massdebater


    In fairness, everything bar commodities is down the past 5 months. I'd be more annoyed at the 1.5% fee, that's a lot and will eat away at your returns over time.



  • Registered Users Posts: 183 ✭✭tolow


    No early exit fees in the policy when I read over the T&Cs. I thought I was doing the clever thing trying something like this but see your comment about the 1.5% AMC being high. What would you typically expect to pay?



  • Posts: 281 ✭✭[Deleted User]


    Okay. It must be the 'Easy Access' version of the plan - 100% allocation , no entry/exit charges and 1.5% AMC.

    For a product that you got advice on that's probably typical, but the lowest AMC in that version is 1.25%.

    For an execution only (no advice on provider, product of fund/s) version of the plan the terms would be - 100% allocation. no entry/exits and 1% AMC. There's an enhanced version of that available (again execution only) with 101% allocation if you have €5K as a single contribution at outset.



  • Registered Users Posts: 9,329 ✭✭✭Shedite27


    Hi, we do a bit of work with Paul so I've come across it a bit. Basically every broker/life company has simialr ideas, Paul has just done a really great job of making it easy to understand and operate.

    Every way to invest is either:

    1. Easy to manage, lower returns
    2. Requires some work to manage, higher returns
    3. Somewhere in the middle, using that tradeoff.

    This is option 1 above, as others said, you've 1.5% AMC, 1% governemnt levy on contributions quietly eating into your money, and deemed disposal (they take CGT every year from year 8 onwards).

    So yes, it's a good start to beat inflation and grow your money, but if you're willing to put in a bit of work, you can grow your money more, in order...

    1. Setup a IB/Degiro account and invest in ETF's (AMC of about 0.1%, no levy, no deemed disposal, but need to do own tax return when you cash out).
    2. Setup IB/Degiro account and invest in Investmnt Trusts (same as previous but lower tax rate at the end).
    3. After that you could try shares but requires further research.




  • Posts: 281 ✭✭[Deleted User]


    No, they don't take CGT every year from year 8 onwards.

    If the plan is still in force on the 8th anniversary the product provider deducts Life Assurance Exit Tax on the growth in the fund/s at the prevaling rate at that time and pays it, on your behalf, to Revenue . And every 8 years thereafter.

    It's also payable on withdrawals, full surrenders or death.



  • Registered Users Posts: 9,329 ✭✭✭Shedite27


    I don't have one of these policies so happy to be corrected but I thought my premiums for 2022 will be taxed in 2030, premiums from 2023 in 2031, premiums from 2024 in 2032 etc, so there's tax implications every year rather than every 8 years?



  • Posts: 281 ✭✭[Deleted User]




  • Registered Users Posts: 5,601 ✭✭✭The J Stands for Jay


    No, it's the start date of the policy that determines the tax deduction date, not when premiums are paid. Deemed exit tax will be every 8th anniversary of the date the policy started.



  • Registered Users Posts: 56 ✭✭BishopBrennen


    I put a lump sum into the Zurich fund Prisma5 a year ago, when I log into the Zurich website to check it's status it lists the funds value, before and after tax value, etc...

    It doesn't mention early withdrawal fees which I know the execution option I went with had, I was assuming / hoping that the low performance and current withdrawal value was down to the early exit fees in the first few years being applied and therefore distorting the true fund value. Is there any way I can check if the current fund withdrawal value after tax is taking early exit fees into account or not?



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  • Registered Users Posts: 105 ✭✭HillCloudHop


    Why are people still investing with these rip off merchants?

    If you want to invest via an ETF outside a pension, just use IBKR or DEGIRO and cut out the middleman.

    If you want a pension, Davy Select has a lower AMC and gives you access to low cost vanguard index funds.



  • Registered Users Posts: 56 ✭✭BishopBrennen


    Ok, I'll purchase the ETF through Degiro but will you do the tax for me? The reason I and I suspect many others go the Zurich route is because it cuts out the tax headache. I can do the CGT myself on individual shares but the ETF tax is too complicated for me to keep track of. So the choice is pay an accountant at the 8yr period or invest through a Zurich product. How much would the accountant be, I have no idea, if you know of an approx. cost feel free to share.

    One thing I was thinking was if I only bought a single lump sum share in an ETF through Degiro and made no more purchases, would this leave the tax situation very easy for me to calculate myself come the 8yr period? Is that simple enough to calculate? Would this be a better option for me in future? Is it just a simple calculation of 41% on the "potential" gain at that time? If it's that straigh-forward then maybe I would consider this option myself.

    I understand, that the ETF tax calculations get very complicated and difficult to kepe track of if you are buying into it on multiple transactions each year, and I don't have the time / interest to learn this.



  • Registered Users Posts: 105 ✭✭HillCloudHop


    What headache? It's basic arithmetic, not advanced calculus. Anyone that has passed junior cert maths is well capable of doing the required maths. Yes, 41% of unrealised gains every 8 years. A broker will record all trades you have made. Even easier if it's just a lump sum.

    Are people this lazy and/or math phobic that they are willing to pay thousands in fees to save them the effort of 15 minutes of calculations once a year?

    Admittedly, I don't buy ETFs outside my pension as deemed disposal is such a massive detriment to investment returns. I prefer UK investment trusts and diversified blue chip stocks like Berkshire Hathaway as they both fall under CGT.



  • Registered Users Posts: 56 ✭✭BishopBrennen


    Lol, the ETF tax is not basic, it's on the 8th anniversary of every purchase, if you bought it weekly for 8 yrs it's a nuisance to keep track of and calculate, I have to laugh how you say it's so easy yet you don't have actual experience of calculating it. It's generally recommended you keep the purchases monthly at minimum or even quarterly to help reduce the headache of transactions come the 8yrs.

    Everything you read regards it's tax, people say the same thing, it's a headache, having to keep track of each transaction and the exchange rate on the day of purchase, etc,, etc,, yet you that doesn't actually do it says it's handy.

    Can anyone confirm if you only buy 1 lump sum initial share of an ETF is the tax come 8yrs as simple as 41% on the unrealised gain?



  • Registered Users Posts: 5,422 ✭✭✭caviardreams


    Plus my understanding is with the like of zurich, if you are split across 2 or 3 funds, they count as one "umbrella" so to speak so if one is down and the other realises a gain, you can net them off and benefit from the loss to reduce your tax on the gain.



  • Registered Users Posts: 105 ✭✭HillCloudHop


    Can you explain what is conceptually difficulty about it? A simple excel sheet would do the job.

    You can also file it all as one annual payment. You don't have to literally pay individually on the exact date every 8 years of each purchase.

    I avoid ETFs due to the tax itself, not the calculations required.



  • Registered Users Posts: 105 ✭✭HillCloudHop


    Losses from open ended funds like ETF can't be offset against the gains of another fund. It isn't capital gains that you pay, it is deemed disposal.

    The tax rate for deemed disposal is 41% vs CGT which is 33%.

    There is also no tax free allowance for deemed disposal. CGT has an annual tax free allowance of €1270 (not great, but better than 0).

    These are the reasons why I prefer investment trusts and individual stocks when investing outside a pension. I can hold them indefinitely without paying any taxes (excluding dividends) until I choose to sell.



  • Registered Users Posts: 195 ✭✭TomeeTipee


    Sorry, I don't understand the 101% allocation thing. Does this mean if a person pays €100 a month, that €101 actually goes into the investment? How does the 1% government levy factor into this?



  • Registered Users Posts: 12,899 ✭✭✭✭Geuze


    Early exit fees are only applied if you close up and withdraw the funds early.



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  • Registered Users Posts: 56 ✭✭BishopBrennen


    Regarding paying / filing the tax itself, I've read mixed info whether you use a form 11 through ROS, or if you can use "My Account". I have read that you should be able to report non-PAYE additional income through My Account under Review your tax Income Tax return.

    I've also read that you should only need to file a form 11 through ROS if you have a taxable non-PAYE income of €5000 or more.

    Another, scenario, was a person said there was no said place under My Account to enter ETF income and was told by Revenue to calculate what was owed, make a payment, and then submit a note to let them know what the payment was for.

    So 3 different methods I describe there above, can you tell me which one applies to me being a PAYE worker with no additional taxable income?

    I had another look at the actual maths of calculating the tax and perhaps it's not as bad as folk generally make it out to be! Do you know if my understanding as follows is correct? I buy 10 separate shares of an ETF in year 1, in year 9 I pay the tax due on them from yr8. Can I pay the tax for all 10 transactions in one single amount in yr9? How do I actually calculate the tax on this 8th yr anniversary, do I just take the total value of the ETF on the 8th yr anniversary and minus my 10 total purchase prices and that's my gain. Then get 41% of that and that's the tax? Can you confirm I'm correct with this calculation method? It seems very simple compared to all the fuss folk make about it being complicated on just about every money forum you read? Am I working it out wrong or are folk making a mountain out of a mole hill? Why do folk say you have to keep track or make note of the exchange rate on the days that you purchased shares of the ETF? Where does the exchange rate on the days you bought come into the tax calculations?



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