# Opinions on Index Trackers?; Quinn Freeway vs Eagle Star



## apple1 (7 Aug 2008)

Folks,
Thinking of finally taking the plunge and investing a little for the long term in the products listed in the thread title.  Would really appreciate any opinions on which is perceived as the better product offering before making a final decision.  Thanks in advance, apple1


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## soy (7 Aug 2008)

Eagle star have a range of funds as do Quinn Life with a range of different charges. Unless you identify specific funds it is like comparing apples with oranges. For basic 'buy and forget' index tracking - cheapest is usually best. 
Quinn are quite transparent about thier charges and they are quite low (by Irish standards!!). With Eagle star, you need to get a discount broker to get you the best prices. Other considerations would be if you can switch from one fund to another without any charges (I believe that both companies allow this). Eagle Star would have a wider range of funds to chose from.


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## PMU (7 Aug 2008)

The trick is to invest in asset classes rather than pick individual products. There’s lots of research that shows it’s your asset allocation and not the individual products in which you invest that determines the difference in final outcomes. 
You could start off by investing in domestic equities (e.g. Eurostoxx50) and as you read up more on investing, and become more confident and knowledgeable you can invest in other asset classes. There’s no need to rush. 

QL basically gives you exposure to four asset classes (i.e. domestic (euro-denominated) equities; foreign developed market equities; emerging market equities and domestic government debt). Eagle Star has a lot to offer so you would need to focus initially on the asset classes they offer and then on the individual funds. If you have a large lump sum to invest there may be cost benefits in investing in ETFs as well as in unit funds.


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## Gruntler (13 Aug 2008)

How would one go about finding a discount broker to purchase Eagle Star funds?


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## messyleo (13 Aug 2008)

Try the best buys forum on AAM. Also there is nothing to stop you have funds with both, given the minimum with Quinn is approx €50 a month and with ES is around €100 a month (iirc, or the figure of €70 is in my head for some reason!). there are no set-up costs so you won't be paying extra in this regard by having to different institutions on board. 

Both are decent choices imho - based on lower costs - which essentially is all you can go on ex ante. ES offer a much bigger range of funds including a lot of managed funds, while QL only do trackers. There are deals through brokers where you can get annual chanrges of 1% on all the ES funds which I think is decent. Both providers are also quite flexible in terms of changing premia / fund choice (QL allow to swaps a year for free, ES allow 4 swaps for free but unless you're day-trading 2 should be plenty so I wouldn't let that be a decider!)

My advice would be to have a look at the different funds / products on offer through both and make up your mind that way, as charges are broadly similar, and well you can't tell how they will perform at the end of the day.


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## apple1 (13 Aug 2008)

Good advice Gravity girl.  Thx.  Isn't there a min. amount required though to start the ES fund?


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## messyleo (13 Aug 2008)

It depends - some brokers have an offer whereby a lump sum og €7500 is needed to get a 1% AMC. However for other brokers this is not the case (i.e. no min lump sum is required) though a charge fot the broker's service may be payable.


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## Labguy (13 Aug 2008)

Why not buy an Index tracking ETF instead? Much lower annual charges (0.20-0.65%) and regular dividends.


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## messyleo (13 Aug 2008)

Labguy said:


> Why not buy an Index tracking ETF instead? Much lower annual charges (0.20-0.65%) and regular dividends.



With the QL and ES producst the dividends received are reinvested. ETFs do make the best sense for lage sums, however if you wish to invest a small sum regularly i think the index tracker funds have their place, given that commission may eat into any regular premium. Again it's up to the individual to decide what is best for them.


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## Labguy (13 Aug 2008)

gravitygirl said:


> With the QL and ES producst the dividends received are reinvested. ETFs do make the best sense for lage sums, however if you wish to invest a small sum regularly i think the index tracker funds have their place, given that commission may eat into any regular premium. Again it's up to the individual to decide what is best for them.




Indeed I know these funds reinvest their dividends but I am not sure that the 1% management expenses they quote is the 'true' annual charge on the fund. 
 I suspect that these are only the start of the total cost per annum.   The total expenses ratio or TER includes Management expenses, Registrar's fees, Marketing fees, professional fees etc. and may add another 1-1.25% per annum.

Now - the TER is defined as "the percentage reduction in investor return if the market were flat and the funds  portfolio were not traded during a period".

This is obviously not realistic as a fund has to trade --- so the total cost may be a lot higher than  2.25% p.a.

Some of these funds (perhaps not Quinn or Eagle Star) also have a convenient bid/offer spread of 5% , which takes another chunk of your money away.

Remember if you're down 2.5% on expenses of varying sorts the total return on on your investment/pension over 30 years will be approximately 50% down --- this is quite a price to pay and usually when you find out it's too late!
Look at your investment carefully.  Personally I stay away from these funds.   I go with ETF's when I want liquid equity exposure


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## AG200 (23 Aug 2008)

Labuy

Guess you have done all the research that I am just starting so excuse me for picking your brain.  How does one go about investing in ETF's stright up without the middlemen taking their pound of flesh?  I can never feel comfortable with these 'managers' as I'm sure they still get a wage regardless of performance.

I have €14 K and am initially intrested in green energy (if I have not missed the boat and get caught up in a bubble) and new markets (Africa/East)

Thanks in advance for your time


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## Marc (24 Aug 2008)

I might point out that an intermediary or "middleman" can, in fact, *earn* their pound of flesh.

I've been advising on buying ETFs since they first launched in the UK back in 2000.

Since then, the number and variety of funds on offer has expanded dramatically.

There are now about 500 ETFs in Europe, from around  40 different issuers and with over 300 listed in London alone. In addition there are over 100 Exchange Traded Commodities.

In order to buy an ETF you will need a broker and I'd say that you really need a broker who can offer access to multiple exchanges and multiple currencies.

A typical Irish Broker is going to pitch their costs at around 1.5% for a small trade with a minimum price for a deal of about €30. So, you are looking at about 3% for the round trip of buying and selling.

Even if you can beat them down to say 0.5% (good luck), you are still looking at least 1% for an execution only service with no advice.

Furthermore, the lower cost brokers generally can't offer more than a few markets and so you won't be able to buy all the funds you might need.

Then there are the taxation issues associated with "offshore" investments which, for the average investor, add another layer of complexity.

Finally, if you want to invest in ETFs through your pension, you need a self-directed pension and, again, typically, you are having to deal with your local Irish Broker and a pension provider with all their costs.

If anyone is looking for investment advice and has a decent lump sum (about €100k or more) in addition to advice fees, we'd be looking at the following costs for dealing in ETFs in  the following markets:

Germany 0.15% Min €15
London 0.15% Min £10
American Exchange 0.15% Min $12
New York Exchange 0.15% Min $12
Nasdaq 0.15% Min $12
Euronext 0.15% Min $15
Singapore 0.18% Min SGX20
Swiss 0.15% Min CHF23
Stockholm 0.25% Min SEK50

If you'd like more information, please private message me.


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## Labguy (24 Aug 2008)

AG200 said:


> Labuy
> 
> Guess you have done all the research that I am just starting so excuse me for picking your brain.  How does one go about investing in ETF's stright up without the middlemen taking their pound of flesh?  I can never feel comfortable with these 'managers' as I'm sure they still get a wage regardless of performance.



Indeed I have done some research but I certainly don't know all the answers!  I haven't  for instance been ever able to find out the  'true'  expenses  of  quoted 'passive ' and 'active' funds.  This  also applies to  a lesser extent to  ETFs  though they  tend to be more transparent  because they  behave more like shares.

It's a good axiom to assume that if there's any kind of 'middleman' involved  you're losing a fair chunk of your money (paying for the yachts - is I think the term).

Answering your question you can buy ETFs through any broker eg Davy, Sharewatch, Keytrade, E-trade.  Again watch their  commissions!  I've dropped Davy and gone to Keytrade for this reason.

Also watch carefully for the buy/sell spread  on the  ETfs  to minimise your  'hidden' costs


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## Marc (24 Aug 2008)

Labguy said:


> Indeed I have done some research but I certainly don't know all the answers!  I haven't  for instance been ever able to find out the  'true'  expenses  of  quoted 'passive ' and 'active' funds.  This  also applies to  a lesser extent to  ETFs  though they  tend to be more transparent  because they  behave more like shares.
> 
> Labguy,
> 
> ...


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## Labguy (26 Aug 2008)

Marc said:


> If anyone is looking for investment advice and has a decent lump sum (about €100k or more) in addition to advice fees, we'd be looking at the following costs for dealing in ETFs in  the following markets:
> 
> Germany 0.15% Min €15
> London 0.15% Min £10
> ...



This is better than Davy, Goodbody etc. but isn't such such good value on a trade of €100k - charge = €150.  
Keytrade will do the same trade for €25.   Maybe I'm missing something?


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## Marc (26 Aug 2008)

Indeed, but I'm not really going to recommend that most clients invest €100k just in one ETF!!! 

1) A typical balanced investment portfolio of €100k is going to have about 10 to 12 different ETFs in it. At €25 a trade with Keytrade that is €300 in costs!
I'd also want to include, a bank account, perhaps a tracker fund or two (a decent one now, like Vanguard) maybe an investment trust or two. I'd have about 16 holdings in total including perhaps a Fund of Hedge Funds and maybe a suitable structured product.

2) Most of that isn't going to be available from Keytrade. ETFS are really good but they are not the only suitable option in a portfolio and in many instances you don't get what you think you are buying.
3) Keytrade aren't giving you advice - which is why they are cheap - you get what you pay for remember (one of my original points)
4) Tax issues? Do keytrade give detailed tax advice? 
5) Can I use Keytrade in my self-directed pension?
etc etc.

In short, the cheapest broker is not always the best. Just as paying a "local" broker 10 times as much is not any better either.


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