# Rabodirect Offshore Investment Funds



## taytoman (26 Nov 2010)

Does anyone have any opinions on whether u are better to go with an irish provider (like standard life / avviva) etc for a lump sum investment, or with rabodirect who seem to have a decent charging structure but the funds are offshore in luxembourg?

I am aware of the need to do your own tax calcs if you exit a fund

However, do you have to declare the existance of these annually to revenue or only when you make a gain on disposal?

Will you be subject to extra scrutiny from revenue by having one in the first place?

In the current uncertain climate / possible demise euro, are you better being "offshore" or "onshore"??

Thanks in advance


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## farmerette (26 Nov 2010)

taytoman said:


> Does anyone have any opinions on whether u are better to go with an irish provider (like standard life / avviva) etc for a lump sum investment, or with rabodirect who seem to have a decent charging structure but the funds are offshore in luxembourg?
> 
> I am aware of the need to do your own tax calcs if you exit a fund
> 
> ...


 

i like the look of several of the funds rabbo have on thier website , i wont buy into any of them though for the simple reason that thier all valued in euro and should ireland have to exit the euro , any fund invested through rabbo will devalue along with our new currency


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## mercman (26 Nov 2010)

tayto man, please have a look at this thread, http://www.askaboutmoney.com/showthread.php?t=144230. In this you will see the real costs made by Investment Companies and charged directly to your Investment. The Rabo funds are not cheap with a 1.5% Management fee and entry and exit fees of 0.75% each way. Have you considered ETFs which are far better value ?


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## taytoman (27 Nov 2010)

*Buying ETFs*

Mercman / Other Posters

Thank you. I understand the concept of ETFs, but Where can you buy ETFs, and how ae they held? In certificate form? Electronic account form?


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## onekeano (28 Nov 2010)

farmerette said:


> any fund invested through rabbo will devalue along with our new currency



is this correct? Rabo is protected by the Dutch Govt I thought so why would funds bought thru them get devalued to the Irish Peso?

Roy


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## farmerette (29 Nov 2010)

onekeano said:


> is this correct? Rabo is protected by the Dutch Govt I thought so why would funds bought thru them get devalued to the Irish Peso?
> 
> Roy


 
if you buy into them through rabbo in this country , the principal is no different to having deposits in rabbo in ireland , if you have savings with rabbo in ireland , were we to leave the euro , savings with rabbo will adopt to a new currency


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## taytoman (29 Nov 2010)

Farmette

Looking at brendans new and excellent post about deposit safety, I would now have thought that any investment fund whether based in ireland or abroad would assume the value of the underlying assets. So say we had the punt nua and this depreciated 50% against the euro, then your 10 K euro in an investment fund would become 20K punt nuas overnight?


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## Duke of Marmalade (30 Nov 2010)

farmerette said:


> if you buy into them through rabbo in this country , the principal is no different to having deposits in rabbo in ireland , if you have savings with rabbo in ireland , were we to leave the euro , savings with rabbo will adopt to a new currency


_Rabo's_ contract is to pay you in euro. Not Irish euro as there is no such thing. For _Rabo_ to pay you in anything else it would need a government decree absolving them of their euro liabilities and making them punt nuas. Why would our government give a foreign bank such a windfall profit at Irish citizens' expense?


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## farmerette (30 Nov 2010)

Duke of Marmalade said:


> _Rabo's_ contract is to pay you in euro. Not Irish euro as there is no such thing. For _Rabo_ to pay you in anything else it would need a government decree absolving them of their euro liabilities and making them punt nuas. Why would our government give a foreign bank such a windfall profit at Irish citizens' expense?


 
by that criteria , deposits with rabbo in ireland would retain thier value in euro as opposed to the punt nua and this isnt the case , rabbo told me that were we to exit the euro , investment funds bought through them would follow the same principal as deposit with rabbo in ireland 

having money with rabbo in ireland is not the same as having savings with rabbo in the netherlands , your money is safer with rabbo than bank of ireland but you are not shielded from the effects of a single currency exit


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## mercman (30 Nov 2010)

farmerette said:


> if you buy into them through rabbo in this country , the principal is no different to having deposits in rabbo in ireland , if you have savings with rabbo in ireland , were we to leave the euro , savings with rabbo will adopt to a new currency



I do think that there is little point in jumping to any future possibilities where in reality there is nothing that would make the entire part of Western Europe collapse. If the Euro was to fail, I do believe that there would be many more, more urgent circumstances to worry about.


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## Duke of Marmalade (30 Nov 2010)

farmerette said:


> by that criteria , deposits with rabbo in ireland would retain thier value in euro as opposed to the punt nua and this isnt the case , rabbo told me that were we to exit the euro , investment funds bought through them would follow the same principal as deposit with rabbo in ireland


There you go. _Rabo_ are confirming what I said. Say the Punt Nua is worth 50c then the price of the Rabo XYZ fund, currently say €1 would be repriced as 2PN; similarly a €1,000 deposit would be converted too 2,000PN. What is suggested is that a €1,000 deposit or a €1,000 mortgage with an Irish bank would, by decree, be converted to 1,000PN each. This is not a change in currency it is a decreed change in contract law. The Irish government is powerless to change the value of the euro just as it is powerless to change sterling or the dollar. But it could by decree say all euro, sterling and dollar contracts written under Irish law will henceforth be interpreted as being in XPN, YPN and ZPN respectively. It was completely different when all contracts were in Irish punts, it was within the government's gift to dictate the exchange rate of the punt.

As I said before, to allow Rabo to write down its Irish liabilities whilst all its assets are in € would be to hand them a windfall profit at Irish citizens' expense.

Anyway, see other posts of mine:
*WE ARE NOT GOING TO EXIT THE EURO AND DEVALUE*


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## Towger (30 Nov 2010)

Duke of Marmalade said:


> Why would our government give a foreign bank such a windfall profit at Irish citizens' expense?


 
The words Gas, Shell, Statoil, Ray and Burke come to mind


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## farmerette (30 Nov 2010)

Duke of Marmalade said:


> There you go. _Rabo_ are confirming what I said. Say the Punt Nua is worth 50c then the price of the Rabo XYZ fund, currently say €1 would be repriced as 2PN; similarly a €1,000 deposit would be converted too 2,000PN. What is suggested is that a €1,000 deposit or a €1,000 mortgage with an Irish bank would, by decree, be converted to 1,000PN each. This is not a change in currency it is a decreed change in contract law. The Irish government is powerless to change the value of the euro just as it is powerless to change sterling or the dollar. But it could by decree say all euro, sterling and dollar contracts written under Irish law will henceforth be interpreted as being in XPN, YPN and ZPN respectively. It was completely different when all contracts were in Irish punts, it was within the government's gift to dictate the exchange rate of the punt.
> 
> As I said before, to allow Rabo to write down its Irish liabilities whilst all its assets are in € would be to hand them a windfall profit at Irish citizens' expense.
> 
> ...


 

when argentina defaulted in 2001 , thier peso went from 1:1 to the dollar to 3:1 to the dollar , anyone who had the equivelent og 12 thousand dollars in pesos on a friday , ended up with the equivelent of 4 thousand dollars by monday , were we to exit the euro , the same would happen here , you seem to believe that someone with ten thousand euro would end up with twenty thousand punt nua , id be of the opinion that someone with ten thousand euro would end up with ten thousand punt nua


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## Duke of Marmalade (30 Nov 2010)

farmerette said:


> when argentina defaulted in 2001 , thier peso went from 1:1 to the dollar to 3:1 to the dollar , anyone who had the equivelent og 12 thousand dollars in pesos on a friday , ended up with the equivelent of 4 thousand dollars by monday , were we to exit the euro , the same would happen here , you seem to believe that someone with ten thousand euro would end up with twenty thousand punt nua , id be of the opinion that someone with ten thousand euro would end up with ten thousand punt nua


And in 1993, the Irish government announced overnight that the punt was worth 15% less. There is a huge difference between changing the exchange rate of your currency and changing the actual currency itself. Anyone with a euro deposit in any bank has a contractual entitlement to euros. Similarly if they had a dollar deposit or a sterling deposit. The government could launch its Punt Nua at an exchange rate of 50c. But it would be a huge and completely unprecedented  step to decree that banks could convert their deposit liabilities to Punt nua from euro at a 1 for 1 exchange rate even though the actual exchange rate would be 50c. 

Besides the surely unconstitutional transfer of wealth from depositors to banks that this would involve, just think of the logistics of keeping that a secret. As for the euros you take out of your ATMs just let the government try and force people to hand in their euros for Punts Nua on a 1 for 1 basis whilst stating that the Punts Nua given in exchange will in fact be worth 50c. It's a nonsense. Not possible.

If our euro liabilities become just too onerous then we have no choice but to default pure and simple - there is no sly way of acheiving that default by changing the currency. Besides most of our liabilities will be constituted under non Irish law and there is no way an Irish government can decree that, say, the money owed by banks to the ECB or to international banks can now be paid in Punts Nua at effectively half of the euro liability.


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