# Advice on 33k Capital Investment



## GoldDigga (20 Oct 2006)

My girlfriend has a maturing SSIA worth 13K. She also has other savings of 20k. 
What managed funds would be a good investment at the moment? She is looking for something low to medium risk. Any help appreciated


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## Financeguru (8 Nov 2006)

Try Eagle Star's Protected Fund range. Good product at the moment. Security against market volatility and returns on Dividend Growth fund since inception of around 12%.

IF you need any further info - let me know.

Thanks


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## ClubMan (8 Nov 2006)

What are the charges and other terms & conditions?


Financeguru said:


> returns on Dividend Growth fund since inception of around 12%.


Past performance is no guide to future returns.


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## Financeguru (8 Nov 2006)

Clubman,

Apologies - should have added as a rider to my post and goes without saying Past performance is no guarantee. I suppose it is easy to forget that no everyone would be aware of this.

Charges - Standard 5/4/3/2/1
Annual management charge - 1.5%
No Bid/offer spread
Allocation - 103.5% minus initial commission that broker / advisor chooses - obviously this can be agreed with your broker. You can go as low as 0.0% iniital giving client 103.5% allocation with 1.5% management charge. Broker would get trailer commission on this of .25%


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## extopia (8 Nov 2006)

Could someone translate the above, please?


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## PMU (8 Nov 2006)

You’ve got 33k to invest. If you are conservative, why not plonk 28 grand in the Northern Rock or equivalent high interest deposit account at 4% CAR?  In five years this will give you about 33k so your capital is protected in nominal terms (but still vulnerable to inflation).  Plonk the other 5 grand in an ISEQ or Eurostoxx50 tracker with say QL (1% mgt fees).  If you had done this 5 years ago, in the ISEQ, your 5 grand would be worth about 8900 now. Of course past performance is no guide to future performance. But you are protecting your money in nominal terms and getting 100% exposure to the stock market on a proportion of it, whcih will hopefully beat inflation. Also with this if the stock market zooms and you get nervous you can always encash your investment. OK, you have to take taxes etc. into account in the above but the proposed Eagle Star product has an annual charge of 1.5 – 2%, and an early encashment charge if you cash in within 5 years.   (Note I’ve no connection with NR or QL but have investments with both).


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## Financeguru (8 Nov 2006)

PMU - What is the charging structure for the tracker - are you saying the only cost to the investor is an annual management charge of 1% of fund? I would advocate diverification alright, but from my experience, I find alot of these banks with deposit style products are really just a another fancy name for having your money in a term deposit account. You will get no investment gains from  them, not even moderate.


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## PMU (8 Nov 2006)

Financeguru said:


> PMU - What is the charging structure for the tracker - are you saying the only cost to the investor is an annual management charge of 1% of fund?



QL web site says the annual charge on their Celtic and Euro Freeways, i.e. Iseq and Eurostoxx trackers is 1%. (And that's what they say in their policy documents). Then there is the 23% tax on encashment but this applies to all funds.  Most 'guaranteed funds' do as I've suggested, i.e. put cash on deposit to provide the guarantee and then buy an option to give the stock market exposure component.


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## G123 (9 Nov 2006)

In my opinion, giving advice 'off the cuff' like this is not a good idea.

Surely any threads like this should finish with the advice GO AND SEE AN INDEPENDENT ADVISER - plenty of threads on this already.

In my experience, I have been shocked at the number of people who have made big decisions based on, for example, a column that they read in a newspaper (old rant of mine, sorry).

€33k is a lot of money, get independent advice in writing.


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## extopia (9 Nov 2006)

To be fair, €33k would not be considered a huge amount by everyone. I would consider this to be a good sum, but it all depends on your level of confidence, not only in your own ability as an investor but also in the quality of advice available.


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