# Cheapest unit linked fund for lump sum



## lored (10 Aug 2007)

Hi all,

does anyone know who operates the cheapest unit linked funds?

I know quinn are 1% per annum. Does any company do better than this?

Thanks,
Lored.


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## South (10 Aug 2007)

Most companies would be between 0.75% to 1% for a decent sized lump-sum.


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## Dave Vanian (10 Aug 2007)

South said:


> Most companies would be between 0.75% to 1% for a decent sized lump-sum.


 
Is that comparing like-with-like?  QL charge 1% with no other charges or exit penalties.  Can you get 0.75% to 1% from other companies on the same basis?  Which companies?


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## South (10 Aug 2007)

No bid/offer spread, 100% allocation...the companies I am talking about would be Eagle Star, New Ireland, Friends First, Irish Life, Hibernian, Oppenheim Investment Managers, Bloxham (minimum fund pretty high for these last two).


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## Dave Vanian (10 Aug 2007)

You're not comparing like-for-like - none of these companies will offer <1% annual management charges unless there are early exit penalties and/or nil commission terms in which case the client will have to pay a fee.


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## South (10 Aug 2007)

No entry or exit penalites Dave.

There would be a set-up fee charged by the advisor for setting the policy up on a nil commission basis.


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## Dave Vanian (10 Aug 2007)

> There would be a set-up fee charged by the advisor for setting the policy up on a nil commission basis.


 
Now we're getting places.


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## South (10 Aug 2007)

Which would obviously be far far cheaper than paying 1% to 1.5% to Quinn for a Managed Fund.

The question was about Management Fees, as I said we would usually get < 1% for our clients, about 0.5% for an indexed fund (which all Quinn Funds are).


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## CCOVICH (10 Aug 2007)

What would the fee payable to an advisor be on a lump sum of €5,000? €10,000?

Bear in mind the OP hasn't mentioned whether they are looking for a regular payment or lump sum investment.


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## South (10 Aug 2007)

No, the OP asked what management fee would be payable on most funds.

So I answered the question.


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## CCOVICH (10 Aug 2007)

South said:


> No, the OP asked what management fee would be payable on most funds.


 

No they didn't



			
				lored said:
			
		

> does anyone know who operates the cheapest unit linked funds?


 
That could mean regular premium, lump sum, actively managed, index tracking etc. It's not exactly clear.  But they use the word 'the' which is not the same as 'most'.

You answered the question using the word 'most'.



			
				South said:
			
		

> So I answered the question.


 
Can you answer my question?



			
				CCOVICH said:
			
		

> What would the fee payable to an advisor be on a lump sum of €5,000? €10,000?


 
I would like to compare the cost of investing €5,000/€10,000 in a Quinn 'tracker' vs. doing the same with another company via an execution only broker.


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## South (10 Aug 2007)

No one company can say they operate "the cheapest managed funds" so I gave examples of fund management charges, which obviously allows the OP to make an informed decision rather than me making a decision for the OP.

The charge for a lump-sum as small as €5,000 would be commensurate with the amount of work involved, probably about €100, so the saving on fund management charge could more than make up for the cost after about 2 years.

Similarly for a fund of €10,000 it would be commensurate with work, but would probably be devised such that the saving on fund management charge could outweigh the cost within two years.


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## South (10 Aug 2007)

CCOVICH said:


> Bear in mind the OP hasn't mentioned whether they are looking for a regular payment or lump sum investment.


 
I think the name of the thread gives a hint!


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## CCOVICH (10 Aug 2007)

South said:


> The charge for a lump-sum as small as €5,000 would be commensurate with the amount of work involved, probably about €100, so the saving on fund management charge could more than make up for the cost after about 2 years.


 

If we assume compound growth of 8% p.a. and a 0.75% management charge, and a €100 set up fee, €5,000 would be worth €6,975* after 5 years (before tax) with a provider other than Quinn, while it would be worth €6,987 with Quinn (assuming a 1% charge-not applicable to all funds).

*Would actually be €6,934 if we reduce the initial investment by the set up charge, as opposed to deducting it from the gross value at the end of year 5.

But, if you use €50,000 over a 10 year period, the gross values are €100,018 (Advisor) and €97,625 (Quinn).

Different answers depending on amount and timeframe I guess.


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## CCOVICH (10 Aug 2007)

South said:


> I think the name of the thread gives a hint!


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## South (10 Aug 2007)

There are only four Quinn Funds available at 1% and one of these is Cash and one is Long Bond, so you are certainly not comparing like with like.


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## CCOVICH (10 Aug 2007)

South said:


> There are only four Quinn Funds available at 1% and one of these is Cash and one is Long Bond, so you are certainly not comparing like with like.


 

Why not?  The other 2 are an ISEQ and a Eurozone type tracker-I know that Irish Life offer essentially the same funds, and I'm sure others do as well.

Why don't you

(a) pick a fund in an alternative provider that is similar to one of Quinn's (e.g. Tech, China, etc.)
(b) pick a lump sum
(c) show projected earnings on both

I am just trying to illustrate with examples-feel free to do likewise.


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## South (10 Aug 2007)

Yes they do and, as I have already said, the fund charges for passive management would usually be around the 0.6% mark, so why don't you re-run your calculations on that.

Not that an 8% projected return is reasonable anyway!
It should be done on 6%.


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## Dave Vanian (10 Aug 2007)

> The question was about Management Fees, as I said we would usually get < 1% for our clients, about 0.5% for an indexed fund (which all Quinn Funds are).


 
I'm confused.  

You say here that you work for a reinsurance company.  So who are "our clients" that you mention above?

I've never seen 0.5% available to a retail investor for lump sum into a unit-linked fund.  Are you sure about this?  If so, you should post details as I suspect many AAM regulars would consider investing on these terms, especially for a fee of €100 for a €5,000 lump sum.


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## South (10 Aug 2007)

My family run an authorised advisor firm, thanks for checking up on me, I obviously have a fan 

Yes, I'm positive (see above) and AAM users are free to PM if they want info I will pass on to the firm.


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## Dave Vanian (10 Aug 2007)

Thanks for clarifying.  

I'd suggest that the moderators make this a Key Post as this is the best deal I've seen in the market for Index-Tracking Funds.  Cheapest I've seen previously was 0.625% for New Ireland Smart Funds on a nil commission/fee basis - they'd only do 0.5% for large amounts, i.e. >€100,000.


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## South (10 Aug 2007)

Now we're getting places.


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## CCOVICH (10 Aug 2007)

Yes, if we had concrete details, like who provides what, on what terms and who to contact etc. I would be more than happy to include them in the Best Buys section.


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## South (10 Aug 2007)

CCCOVich I checked your figures and they are reasonable, even for an investment as small as €5K the 0.75% becomes better value once the term is 8 years +


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## Dave Vanian (10 Aug 2007)

Even after 5 years and index-tracking investment with South's family firm would beat QL, all other things being equal.  That's including the €100 fee.

It would be useful to know which company is the ultimate provider, as tracking error could possibly skew things but on the other hand, this alternative provider may offer a wider range of indices to track than QL.  

But overall an excellent offering in the index-tracking fund arena.

*South's family AA firm*
Investment amount €5,100
Fee €100
Invested €5,000 (I'm assuming there may be a minimum of €5,000?)

Index-tracking fund 0.5% management charge per annum (AMC)

Assume 6% growth before AMC

Gross Value after 4 years: €6,194.12
Gross Value after 5 years: €6,534.80
Gross Value after 6 years: €6,894.21
Gross Value after 7 years: €7,273.39
Gross Value after 8 years: €7,673.43

*Quinn Life*
Investment amount €5,100
Fee €0
Invested €5,100 

Index-tracking fund 1% management charge per annum (AMC)

Assume 6% growth before AMC

Gross Value after 4 years: €6,199.08
Gross Value after 5 years: €6,509.04
Gross Value after 6 years: €6,834.49
Gross Value after 7 years: €7,176.21
Gross Value after 8 years: €7,535.02


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## CCET (10 Aug 2007)

I have €300K to invest.  I've already opened an account with QL and chucked €35K in there.  Where can I find a better value passive tracker / equity investment vehicle?


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## Dave Vanian (10 Aug 2007)

South said:


> My family run an authorised advisor firm, thanks for checking up on me, I obviously have a fan
> 
> Yes, I'm positive (see above) and AAM users are free to PM if they want info I will pass on to the firm.


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## South (11 Aug 2007)

Dave there is an eror in your calculations above.

Remember that the Annual Fund Management charge cmpounds also...so the value after year N should be calculated as:

5000 * [(1.06)/ (1+Fund Management Charge) ^ N]

Hope this makes sense to you, if you re-run your calcs using this formula you will see that it changes the answers.


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## z108 (11 Aug 2007)

Well it doesnt take a genius to realise that the capital value of 2 funds with identical growth rates but with different charges will diverge. 
_The big question is how can I gain access to an index tracker at such a lower rate than Quinn Life ?_ I dont see any contact details in this thread 

Apart from that, while feeling my money to be safe with Quinn Life , _South's family AA firm_ as a brand doesnt ring  a bell or give me that same warm fuzzy feeling. Would the money be placed with a better known company by South's family AA firm ?


*edit: sending a pm now*


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## South (11 Aug 2007)

Sign - the money, as I mentioned already in this thread, would be placed with an investment manager like Irish Life, Eagle Star, Hibernian, Oppenheim etc...have a look at my earlier post.

If you want a warm fuzzy feeling, buy a hair dryer


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## z108 (11 Aug 2007)

South said:


> Sign - the money, as I mentioned already in this thread,



 Well I did wake up at 6 am  
 I'm definitely not a morning person !
 Sending you another PM now for clarification


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## Dave Vanian (13 Aug 2007)

South said:


> Dave there is an eror in your calculations above.
> 
> Remember that the Annual Fund Management charge cmpounds also...so the value after year N should be calculated as:
> 
> ...


 
Cripes - too early on a Monday morning to try to comprehend why that's different to my method, which was: 

*South's family AA firm*
5000 * (1.055^N)

*Quinn Life*
5100 * (1.05^N)


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## South (13 Aug 2007)

It's not the same!


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