Just doing a little financial housekeeping and I decided to check the AMC on my Irish Life Pension.
All of my money within this pension is in index funds as below so I used the fund factsheets to compare the actual performance with the underlying benchmark. The fund factsheets state that the fund performance includes the AMC which is 1%.
So I would expect the annualised fund performance to be 1% lower than the benchmark. But it is not. The fund consistently underperforms by 0.08% - 0.30%. - or 0.23% on average.
If it was a small error, you could put it down to a tracking error but it seems to be more significant than that.
Also, the error is always negative - the fund never out performs the benchmark. Not just over time but in individual years as well.
Any idea if this an acceptable difference or is it worth querying? Or is this just the way that the industry works...
Thanks...
All of my money within this pension is in index funds as below so I used the fund factsheets to compare the actual performance with the underlying benchmark. The fund factsheets state that the fund performance includes the AMC which is 1%.
Fund | Comparison Period | Fund Perf | AMC | Benchmark Perf | Tracking Error |
PRSA Indexed European Equity Fund | 10 yrs | 6.49% | 1.00% | 7.72% | -0.23% |
PRSA Indexed North American Equity Fund | 10 yrs | 12.65% | 1.00% | 13.95% | -0.30% |
PRSA Indexed UK Equity Fund | 10 yrs | 4.01% | 1.00% | 5.09% | -0.08% |
PRSA Indexed World Equity Fund | 10 yrs | 9.88% | 1.00% | 11.17% | -0.29% |
So I would expect the annualised fund performance to be 1% lower than the benchmark. But it is not. The fund consistently underperforms by 0.08% - 0.30%. - or 0.23% on average.
If it was a small error, you could put it down to a tracking error but it seems to be more significant than that.
Also, the error is always negative - the fund never out performs the benchmark. Not just over time but in individual years as well.
Any idea if this an acceptable difference or is it worth querying? Or is this just the way that the industry works...
Thanks...