# Quinn Life Freeway Funds



## WGT (27 Aug 2011)

Just had a look at my quinn life policy which I monitor regularly.
Noticed that the Celtic, Euro, US, China and basically all the freeway funds have plummeted in the last month.
Current value of my fund is now at 71% of contributions. Last month it was 85%.
I'm looking at this as a long term investment and don't need the money now, but was just wondering how concerned I should be.


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## joskel (28 Aug 2011)

To be honest WGT, I think if you're viewing this as a long term investment, the principle of dollar cost averaging should come into play i.e. when the fund price is low it's an opportunity to buy more shares.
There will always be peaks and troughs with every long term investment, so my advice would be to sit tight.


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## WGT (29 Aug 2011)

*Quinn Life*

Thanks joskel,
        That's what I was thinking if it was a normal situation. However, the financial climate looks very shaky at the moment. That's the reason I'm a little concerned at the moment.


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## joskel (29 Aug 2011)

WGT, if you're really in Quinn Life freeway funds for the very long haul, I wouldn't lose any sleep over it. As I said, there will always be peaks and troughs when dealing with equities. That's the nature of them.


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## WGT (29 Aug 2011)

that's what I'm hoping for anyway, Dollar Cost Averaging rocks


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## MyAdviser (29 Aug 2011)

WGT the debt situation in EU and US is going to cause (my personal view and the one my advisory clients have been given) a recession in US and EU if not this year - next. I expect a further fall in equities of 20% plus in that time period. This crisis is pretty much unavoidable. The buy and hold for your capital is one way to go but losses of 40% + in 07-09 and now possibly again will make that one a hard climb back. Every 20% loss takes 25% to get back to zero. The Eureo cost averaging is fine building up a capital amount but once you get teh capital you should really take a risk management tack and leave the ongoing contribution to euro cost averaging.

The other point to make is that you can get for 5k or more of a fund most of the index trackers (like quinn) & some active managers for 0.75% annual charge and if you manage to get 50k plus you can get them for 0.5% annual charge. Quinn charges 1%+ in annual charges. There are early exist with these providers but the allocation is 100% like quinn (even after some initial commission of executing the deal.)

Hope this helps.

Kind Regards 

Michael Kiernan
MyAdviser.ie


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## WGT (29 Aug 2011)

> The Eureo cost averaging is fine building up a capital amount but once  you get teh capital you should really take a risk management tack and  leave the ongoing contribution to euro cost averaging.



Thanks for that MyAdviser, could you let me know exactly what you mean by the above statement.
Currently my quinn freeway contributions are 23k and the value is 16.4k.  (10.5k euro freeway, 3 celtic freeway)
My monthly contributions are €250.
The current monthly breakdown is 20% Euro, 20% US, 20% China, 15% Celtic, 15% Emerging, 10% Latin America.

Mortgage is well under control at 60k.
Savings of 40k.
Global REIT 5.2k.
ISEQ ETF 20 2.5k.


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## MyAdviser (30 Aug 2011)

WGT, the point is spreading buying points by monthly contributions does lower the overall risk profile of buying real assets especially equities. The challenge is when you have built up a lump sum, you then have to consider the fact that this lump sum is at risk of short and medium term falls in value. This risk in my view is no different than with any other lump sum.
There are plenty of people on this forum and elsewhere who regard market timing as a mugs game and that once you set up a highly diversified portfolio and rebalance then you will be fine. 

This even on a historic basis can take a very long time to deliver and with the advent of risk management strategies like Absolute Return Funds it is not necessary to take so much risk in pursuit of return. Many people simply do not have the time to wait for the long run and then make bad decisions and sell at market lows. I am not denying the long term value of equities it is just that many of my clients can't afford to wait.

There are times like now that long only risk (typical funds and index funds) is in my view too risky. It is not to say that they won't rise in value going forward but I would argue that the underlying need for austerity and more prudent fiscal management mainly in the west but not exclusively, make the probability of upside gain much lower than normal. Thus take risk off the table for your lump sum i.e. more cash, more absolute return etc depending on your needs and risk profile. I can't advise you specifically on this forum but at a general level I hope the point is made. 

Regardless of your investment strategy if you can lower the cost then why not. New Ireland has a plan called Smart Funds that with a 5k lump sum you can get 100% allocation and a 0.75% AMC on many of their funds. They have added exit charges recently but if needed they also have cash and absolute return options under the one plan. 
Kind Regards
Michael Kiernan
MyAdviser.ie


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## WGT (30 Aug 2011)

> Thus take risk off the table  for your lump sum i.e. more cash, more absolute return etc depending on  your needs and risk profile.



If I understand you correctly, this might mean put more contributions towards the Cash Freeway fund in Quinn.
I assume you don't mean taking the hit and move my money else, this would mean turning a paper loss of 7k, into a real loss.
As I said, I'm in this for the long haul and I can wait, as I have enough money for the short term and medium term.
Thanks for your advice so far.


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## MyAdviser (31 Aug 2011)

WGT, you should stay within the Quinn plan until you get back to your original capital - the reason is that any gain up to that point is tax free. If you moved to another provider then the loss would be realised from a tax point of view, even if you kept the same strategy.

Once you are back up then the point is that there are lower cost options than Quinn to index track and you also have options that Quinn does not have - absolute return.

The use of cash is a safe haven option. You need to believe that just investing and staying through all the ups and downs (possibly with rebalancing on a regular basis) is not what you want to do. The term "long run" varies from client to client. In the industry 5 years was the long run, it is now 10 years plus. Going into cash now would break your view that buy and hold is the way to go. Timing of market investment would become your approach.

The euro cost averaging is for the regular contributions and therefore it could be argued to keep investing that money. It is your lump sum that I am concerned about. 

Kind Regards

Michael Kiernan
MyAdviser.ie


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