# Regular investment in funds



## bleary (19 Aug 2013)

I know that most people here seem to recommend ETF's but I keep looking into them and then not following through , so I think some sort of managed fund to get me started would be best. I have had a look through some of the other threads but they seem to focus a lot on ETF's. 

The last few years I have been setting up savings accounts after savings accounts and now I really want to invest a small amount of money regularly probably 10k lumpsum and the 250 to 500 a month. I would generally be conservative but for this scheme would prefer something medium pssibly to high risk. I am comfortable having someone gamble with this amount on my behalf.

I had a look at some of the plans on the Irish Life website but would anyone have recommendations, bearing in mind I want minimal involvement month to month with probably an annual review.

As an aside when looking into funds I checked out Setanta Asset Management as I hadn't heard of them before They have a meet the team page on their website with about 20 employees listed with their photos. There isn't even one woman listed in their entire team,senior management ,portfolio management etc. I know the industry tends to be male dominated but because of that I won't consider that company.
It just speaks to me of a very closed minded operation that I would not be comfortable dealing with.


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## Brendan Burgess (19 Aug 2013)

Hi b


> I really want to invest a small amount of money regularly probably 10k lumpsum and the 250 to 500 a month.



You are better off simply doing a one off purchase of €20,000 or whatever figure you are happy with. You will be crippled by charges if you make regular payments. 


You could consider one of the property funds discussed here

http://www.askaboutmoney.com/showpost.php?p=1345035&postcount=15

There used to be a firm of investment advisors staffed by women advising only women. Not sure if they are still around.


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## ashambles (19 Aug 2013)

Regardless of costs, I don't think making a one off investment in a fund makes sense. If someone really knows something that makes "now" a good time to invest in a fund, then instead of buying a fund they should be using their knowledge to invest directly in whatever they know is about to swing the fund.

Rabobank seems to be one of the cheapest for regular smaller investments at 0.75%. The key advantage is the 0.75% is 0.75%, no minimum charges of 15 euro or whatever, so your 500e monthly investment costs you 3.75e in charges, you could even do 125e a week and it wouldn't cost any extra. 

Serious disadvantages of regular investing via Rabo are that the tax becomes tricky, and the 0.75% exit charge is expensive on large sums. 

There was a thread on regular investing via Rabo where after some discussion it seemed no one at that time could come up with a compelling alternative from an Irish regular investor point of view despite some initially interesting comments about ETFs and online brokers. 

http://www.askaboutmoney.com/showthread.php?t=176951


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## Username2012 (19 Aug 2013)

This broker on the invest and save dot ie site might offer you what you are looking for perhaps? You could also look to buy shares quarterly/bi-annually as you can get an execution broker that charges €20-ish per trade - making a €1000+ trade not too expensive on a % basis.


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## mercman (19 Aug 2013)

OP, some very serious consideration and investigation requires to be made before an Investment in Funds is made.

You will require to get independent advice from outside the Industry before a decision is made. I have an article from Money Observer which I am unable to place on AAM until Copyright terms are met. If I am able to find a link for the actual effect on charges on funds on the web I'll post it here tomorrow. The total charges in funds, otherwise known as the TER includes the cost of selling the invested fund to the Investor. The problem isn't what they will tell you. it is what they won't tell you is where the problems start.

Otherwise take your time and 'DO YOUR OWN RESEARCH'.


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## bleary (20 Aug 2013)

Thanks for the comments, yes i had read through the thread before some time ago. The thing is it just made me procrastinate again , to the point i did nothing.
Maybe I should just put it in an avc instead , though not sure how long i plan to earn in Ireland for in the future.
 Brendan interesting point re the investment firm. Im not anti dealing with male advisors but the way it is unrelentingly non gender balanced just made me think of a credit cards behind the bar, heres to the bonus , anglo type culture. .


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## mercman (20 Aug 2013)

Bleary, sorry I didn't have time to undertake the task today. I'll bullet point them tomorrow and then you will be able to make a more realistic and informed decision.


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## mercman (9 Sep 2013)

Ok, the article in question is on the web. This is an interesting article and is applicable to all who hold money invested in funds.

The link is: http://www.moneyobserver.com/sites/moneyobserver.com/files/fundfee_3.pdf

Take note of its content and take note of the points raised by professionals. Happy reading.


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## Jim2007 (9 Sep 2013)

mercman said:


> This is an interesting article and is applicable to all who hold money invested in funds.



It should be noted that this article relates to actively managed funds, which is not what the OP was as asking about!  The poor performance of actively managed funds has been widely documented since around 2001 - 2002, but the bottom only really fell out of that market from around 2005 onwards as investors rightly switched to index tracking ETFs.  The only point worth taking away from this article is that actively managed funds are rarely the best choice for most investors.


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## mercman (9 Sep 2013)

Whilst I'd prefer not to engage in a public spat about this article, or many others, I believe that if it is read in its entire and correctly, the content, by contributions by a number of authors, relates to the normal Managed Funds. In the case that you, Jim as a professional adviser, require more articles composed and written by professionals, I'll happily provide them for you.

All they all state is confirmation of the obvious, which is the fees charged in normal Managed Funds swallow up any profit or in fact, Capital, in poor years of investment.


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## Jim2007 (9 Sep 2013)

mercman said:


> ...by contributions by a number of authors, relates to the normal Managed Funds.....
> 
> ....All they all state is confirmation of the obvious, which is the fees charged in normal Managed Funds swallow up any profit or in fact, Capital, in poor years of investment...



Managed funds are exactly what I was referring to and as I have already said with a few exceptions, most investors have long since got the message on those type of funds.



mercman said:


> In the case that you, Jim as a professional adviser



As I have already pointed out I an not a financial advisor and I'm sure Brendan will be happy to confirm that.


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## Steven Barrett (10 Sep 2013)

bleary said:


> I know that most people here seem to recommend ETF's but I keep looking into them and then not following through , so I think some sort of managed fund to get me started would be best. I have had a look through some of the other threads but they seem to focus a lot on ETF's.
> 
> The last few years I have been setting up savings accounts after savings accounts and now I really want to invest a small amount of money regularly probably 10k lumpsum and the 250 to 500 a month. I would generally be conservative but for this scheme would prefer something medium pssibly to high risk. I am comfortable having someone gamble with this amount on my behalf.
> 
> ...



Hi Bleary

You really need to get expert advice on this. If you are conservative by nature, why do you want to go high risk? Do you need to achieve high returns or do you feel you should be moving away from your comfort zone? What are you saving for? Saving is only worthwhile if there's something to spend it on in the future. 

Investments should be for a minimum 5 year term, so what kind of emergency fund have you got?  

When picking a fund manager, you need to assess their investment strategy. What kind of risks have they taken to achieve their goals. What level of volatility has the fund got. Remember, looking at past performance figures is looking into the past, we have no idea if they will achieve it again.

Just to be clear, I am a financial planner.


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## gnf_ireland (3 Jan 2014)

Hi,
 This is a scenario I have trying to work with myself over the last number of years. Similar to OP, I am trying to find a way to make regular contributions to some sort of investment fund on a monthly basis, without being crippled by charges.

 The only 'approach' I have come up with is as follows:
 1. make regular monthly contributions to my old Quinn Life index funds (now with Irish Life)
 2. Once every 12-18 months, withdraw the money from these funds and invest in appropriate ETF's

 Its not ideal, but at least it does facilitate some exposure to  the underlying equities while the pot is growing to justify the transactions costs of the ETF

 Has anyone any better approach than this, or how do others manage the scenario (or do they ??)

 cheers


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## kenmare (6 Feb 2014)

Don't know if this is appropriate thread. Am investing €131 pm  in fund since 1998, current value of fund is €30.6k. Am I getting good value or should I opt out of monthly payments?


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## mercman (6 Feb 2014)

kenmare said:


> Am I getting good value or should I opt out of monthly payments?



Kenmare, you have not stated which company or fund you are invested in. Do you know what the Management Charges that you are paying is ?? Going forward this is important to note. 

Have you considered encashing the present investment and moving to Investing in an ETF. Remember you might be subject to an exit charge.

Just an opinion as I'm not qualified to give investment advice. Therefore this post is an opinion.


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## kenmare (6 Feb 2014)

Thanks mercman, am with Zurich (eagle star fund) monthly 131, policy fee 2.80 pm, policy charges ??? 108 annual (excludes ann. management charge).
I  have paid in approx 25k over a 16 year period current value of fund is 31k. Has it been a good/bad investment ?
regards


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## mercman (6 Feb 2014)

Zurich are a reputable company. How much is the annual Management fee ? Are those you have already quoted part in the Policy Prospectus. Depending on exit charges it might be best to consider moving to an ETF. The charges applicable to any of the type of funds you're invested eats up a massive amount of the value of your investment over a period of time.


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## PMU (6 Feb 2014)

kenmare said:


> Has it been a good/bad investment ?


You've regular payments and regular charges (e.g policy fee; annual charges, etc.).  You also know the encashment value.  Put them in a spreadsheet and use the IRR function.  Then you can decide if it has been a good or bad investment.


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## mercman (6 Feb 2014)

The easiest way to find out the true full costs, is to Google 'Money week 'fund management charges'. This is in the Public Domain and all and sundry should read this to see where their money is going or to see the charges before they do.

I bet that those that read this article might be in for a shock !!


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## Steven Barrett (7 Feb 2014)

kenmare said:


> Thanks mercman, am with Zurich (eagle star fund) monthly 131, policy fee 2.80 pm, policy charges ??? 108 annual (excludes ann. management charge).
> I  have paid in approx 25k over a 16 year period current value of fund is 31k. Has it been a good/bad investment ?
> regards



That policy fee is the equivalent of a 2% charge each month. You should get rid  of it. You would need to start a new contract though. 

There shouldn't be any exit charges after 16 years, you will pay tax of 41% on the growth though. 


Steven
www.bluewaterfp.ie


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## mercman (7 Feb 2014)

Good Points from SBarrett, but you need to check these points out and then decide which route you wish to choose.

If moving the funds, Do your own research to ensure which route is best for YOU, and to find the last costly in fees etc.


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## Rory Gillen (15 Feb 2014)

In my view, the cheapest, most cost effective and most interesting way to 'Regular Invest' is to open an online stockbroking account and simply buy an asset each time you have, say, €1,000 to invest. I say a €1,000 as this is probably the optimum amount in order to keeps transaction costs to a minimum as a percentage of your monies invested.

There are plenty of global equity funds listed on stock markets that you can buy and hold for the long-term if you are not comfortable investing in individual shares. Global equity funds listed on stock markets, be they exchange-traded tracker-type global equity funds or actively-managed investment trusts have lower costs than the vast majority of non-listed funds be they Irish insurance company unit-linked funds or unit trusts etc. 



*Rory Gillen
Founder, GillenMarkets*


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## dub_nerd (18 Feb 2014)

kenmare said:


> Thanks mercman, am with Zurich (eagle star fund) monthly 131, policy fee 2.80 pm, policy charges ??? 108 annual (excludes ann. management charge).
> I have paid in approx 25k over a 16 year period current value of fund is 31k. Has it been a good/bad investment ?
> regards


 
It works out at an AER of about 2.55%, not taking any tax considerations into account. It would have earned more in a standard deposit account, not to mention a fixed term one over the same period, with far lower risk.


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## west_bound (18 Feb 2014)

kenmare said:


> Thanks mercman, am with Zurich (eagle star fund) monthly 131, policy fee 2.80 pm, policy charges ??? 108 annual (excludes ann. management charge).
> I have paid in approx 25k over a 16 year period current value of fund is 31k. Has it been a good/bad investment ?
> regards



dreadfully poor return


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## Steven Barrett (19 Feb 2014)

dub_nerd said:


> It works out at an AER of about 2.55%, not taking any tax considerations into account. It would have earned more in a standard deposit account, not to mention a fixed term one over the same period, with far lower risk.



Very poor return. 

There are a few factors you have to put into consideration. The first being the crash that happened in 2007/08. Your fund would have been completely wiped out. 

The other is the charging structure. With a relatively low premium, the fixed policy fee takes a sizeable chunk out of your premium. I don't know what the allocation rate is on your plan but there is a chance that you have less than 100% invested. You could be in the situation where you need to make 7% to just break even!

Zurich now have one of the best charging structures for regular premium plans. You get 100% invested and no policy fee, just an annual management fee. 

I opened one up 5 years ago and have made 6.85% per annum. When I take the tax off, it's a net return of 4.26%


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## Frebel79 (27 Feb 2015)

bleary said:


> I know that most people here seem to recommend ETF's but I keep looking into them and then not following through , so I think some sort of managed fund to get me started would be best. I have had a look through some of the other threads but they seem to focus a lot on ETF's.
> 
> The last few years I have been setting up savings accounts after savings accounts and now I really want to invest a small amount of money regularly probably 10k lumpsum and the 250 to 500 a month. I would generally be conservative but for this scheme would prefer something medium pssibly to high risk. I am comfortable having someone gamble with this amount on my behalf.
> 
> ...



Bleary - how did you end up investing your money in the end? 

I've been doing exactly the same over the last 2 years and have flitted between Rabo Direct funds, Zurich Life trackers and Irish Life funds but get weighed down by contradicting info. I'm tempted to just throw a small amount of money into rabo direct funds on a monthly basis despite the tax issues down the line. If I as confident in investing I would like to put in 5k at low/ medium risk while putting in 150 per month at medium and higher risk

Any help or advice from anyone for someone similar to bleary would be much appreciated

Frebel


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## Atract04 (13 Mar 2015)

Cost averaging is good in other countries but it seems to much expensive here in Ireland between tax, management fees, exit fees and other miscellaneous fees... I would like to buy ETF's  here in Ireland as I live here but instead I send it elsewhere...


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