1 Million Euro to invest - managed fund?

ClubMan said:
I still don't know what you're talking about. Sorry.

What precisely do you mean by this as well?
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Bank of Ireland etc etc go to an investment bank in the UK who structures the product for them... the investment bank in the UK takes a fee for doing this... also the kind of products they tend to do tend to have lots of potential for these fees


a manged fund aims to produce the same return as other funds i.e its benchmarked against its peers.. ther is no real incentive to outperform the others as to do so e.g the proteted consenus is a concensus fund which means it looks at what all other funds are doing and does the same.


so if you have a fund whose strategy is to do copy what everyone else does how do they justify a management fee
 
There is no right and wrong answer to this question but I think you have the basis for a good strategy in the replies to date, i.e.:

1. Don't rush into anything and do your research on anything you may think of buying into
2. Get as a high paying an deposit interest account as possible while doing so
3. Observe the old adage 1/3 of your money in equity, 1/3 in property and 1/3 in cash and you can't go too far wrong
4. Be fees and indirect cost allergic, identify them in any proposal and negotiate them down or walk away
5. Study what Mark***** posted above re equities, that shows to me that even in a long term strategy timing still matters a fair bit. If I were you I'd buy ETFs by sector when you think their finished declining and I'd aim at investing in only 1 every 3 months i.e. a drip feed investment strategy, so that you are not trying to time the market so much (that's for pros)
6. So you might end up with an investment strategy something like this:
330K in high paying deposit account
330k in equities e.g. 110K in iseq 20 ETF, 110 in food company ETF, 110 in renewables ETF, as examples
333K in property: Ireland still sucks at the mo at it was hyperinflated by bubble, so maybe 150K in 2 syndicated funds or else overseas property direct (tho I'd avoid that if I were you cos of hassle)

Lastly, since ye are farmers and general property is so weak close to home at the mo, you could consider investing in something that you know e.g. agri tourism project (neighbours B&B, guesthouse, etc), Forestry, or Environmental reps based investment. I give this advice without knowing what returns any of these may give except that a general good principle when investing is to try to stick to what you know something about and do your research on that.

PM me if you have any other queries, I am a private investor like yourself and have no other agenda. I would be very keen to learn more re agricultural based investment proposals currently.

D
 
Don't buy a managed fund!

Nearly forty years of academic research has shown that traditional fund managers are unable to outperform the markets by anything more than that which would be
expected by chance.

Trying to beat the markets through active management or market timing has been described as “a zero sum game, with costs". That is to say the expected result of active management is zero, less the additional charges paid to the fund manager.

The reason that most advisers would recommend a managed fund is that it pays a commission. Commissions are an inducement to sell products and the bigger the commission the bigger the inducement.

Therefore, with that amount to invest, you should only seek fee-based asset allocation advice.

Let me break that down:

Fee-based: Not trying to sell you a product to earn commission but offering you impartial advice. Matching the investment portfolio to your goals and attitude to risk. Not a packaged off the shelf product.

Asset allocation: Empirical studies have shown that around 90% of the long term return of a portfolio can be attributed to asset allocation. That is to say the mix of assets that make up the portfolio ie equities, bonds, cash, property, commodities, hedge funds, venture capital, art, fine wines whatever the list goes on and on.

A typical "balanced" managed fund on sale in Ireland today might have around 60% invested in equities and of this, around half of the funds might have about 20% invested in Irish Equities.

Yet the Irish market makes up less than 1% of the wider European market. Why so much invested in Irish companies?

Ireland is in the Euro (last time I checked) so your approach to investment should be Euro focused - not Ireland focused.

Let me leave you with a final thought from a Nobel Laureate in Economics:

“The idea that any single individual without extra information or extra market power can beat the market is extraordinarily unlikely. Yet the market is full of people who think they can do it and full of other people who believe them….Why do people
believe they can do the impossible? And why do other people believe them?

Daniel H Kahnemann,
 
Wise words Marc. The OP should look at speaking to someone for a fixed fee rather than a percentage. With this size of lump sum, professional advice is a must. If I had this sort of cash lying around today I would consider spreading it across shares in the Irish banks (say 20%), forestry (one of those coillte products-say 20%), an apartment in Shanghai (say 20%), cash deposits or government bonds (20%) and some kind of renewable energy project (Airtricity or windfarms-20%). Is that a mad strategy? I don't see the advantage of the managed funds with their charges. The only reason so many of us enter them is because we're forced to through pensions and the tax relief makes it a no brainer.
 
John,

Re: managed funds - why does tax relief make it a no brainer???

All you get is tax relief on entry and rounded up capital gains (if any) when in a pension fund, you still get taxed (on 75%) when you take your money out. Ok so the rounding up of capital gains without tax in the interim is valuable, (can anyone work out how valuable versus a taxed scenario here??), but for lack of access to your cash until your 60+, for incurring significant indirect costs, that despite what they say are still not nearly transparent enuf, for having to admin the fecking thing and for the general pig of an investment that most pensions are- they ain't worth it IMHO. As Mark says you are paying overpaid prima donnas to do the impossible which historically they never pull off over the longer term.

The only two instances I can see when a pension is worth going into is for a self employed, self administered pension close enough to retirement where you can use it legitimately to take a lump sum tax free out of your business (this all assumes trading conditions allow, etc), or if your employer is paying a significant contribution into one with yours, otherwise they're for dummies IMHO. And the government only back them cos of vested interests. rant over - feel free to prove me wrong...if you can!?
 
check this out :prescribed reading if you want to save yourself a lot of pain and heartache investing in funds and by implication pension funds.


p.s. thanks leghorn
 
Just pay an independent advisor a fee to properly ascertain you objectives, your time line, your tolerance for risk, requirement for income etc......

Wahtever product/products you purchase at the end of the day should be driven by the advice and your careful consideration that it is approprate for what you are trying to achieve.

Being recommended products without an advisor knowing your total circumstances and requirements is a mugs game. Control you own destiny and don't live to regret not getting correct advice.
 
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