EBS Summit Growth Fund performance

[Brian Boru]

Hi AAM,

I'm a first-time poster, looking for investment advice regarding the EBS Summit Funds.

My SSIA was 100% invested in the EBS 'Growth' fund (i.e. equities) and performed well, leaving me with just over 22k after tax when it matured in April. I promptly used that 22k to pay off a chunk of my mortgage, which is also with EBS. I liked the look of how the fund had been performing for me and since I had a spare 20k in my business account (I'm self-employed) that I didn't need any time soon, I used that 20k to 'top up' my SSIA account almost back up to where it had been on maturity. At the same time, I opted to continue paying EUR 254 into the account each month, which I am continuing to do. Part of the attraction in doing so was that since I've held the same account for over five years, I can cash in the shares whenever I want.

Now of course I'm feeling jittery, like many people, because instead of the account being back up over 22k (having invested 254 quid a month since May), it has slumped down to 19.2k at present , with the result that I'm now regretting not having simply paid even more off the mortgage.

Not that we're not killing off the mortgage as quick as we can though - my fiancee paid a further 10k off the term a couple of months ago and we've upped our monthly mortgage repayments by EUR 150, leaving us with an outstanding balance of 97k and a remaining term of 10 years (we've almost cut the term in half).

I'm also looking after myself pension-wise, maxing my tax-free contribution up to the 20% limit (I'm in my early thirties).

My question is - should I stick with the Summit Funds in the hope of gains in the future, or do I cut my losses and take my money somewhere else? I've read elsewhere on this site that unit-linked funds are bad news because of the commissions and management charges - how do EBS Summit Funds rate in this respect? Are there better and cheaper alternatives? I haven't been scared away from the stock exchange by any means, I can afford to do without this money for another 5 years no problem as my business is going well. However, I would like to see the investment perform!!

Any advice or opinions would be greatly appreciated!

Thanks in advance and Christmas Greetings to all

BB.

 

[PMU]

If you look at its last (October) quarterly report you can see why the EBS summit growth fund has declined: it’s invested 19% in Ireland and the ISEQ has had its worst performance in years; it’s also highly exposed to financials (38%) both IE and foreign, which aren’t exactly doing too well. Will fund performance improve? Who knows - you are betting on the summit fund manager’s stock selection ability. Should you cut your losses and move elsewhere? If it’s to another managed fund how do you know the other fund manager’s stock selection skills are superior to the summit growth fund manager’s? And if you know of a better fund manager why did you not move before now? You should receive the next quarterly report from the EBS before the end of January and how the fund manager is addressing its decline in value should influence your decision on whether to stay and hope for a recovery or go. On the latter point there is some academic research that shows that operating a stop-loss strategy (which is, in effect, what you are doing by getting out of the fund after X% of a loss) impairs long term portfolio performance as you are out of equities before a recovery, and that a better way of controlling risk is to diversify across securities, assets and markets. (You can do this even with modest sums through QL, Rabo and Eagle Star.) Of course, paying off your mortgage earlier is a totally risk-free investment.

 

[Brian Boru]

Thanks a million for the reply - yes, think I'll sit it out and have a look at the next quarterly report from EBS. And also look at opening a Rabo account so I've diversified and reduced risk a bit more. I'm optimistic there will still be a recovery, just it might take a while in coming.

 

[atkin]

Investments

Hi,
I have a small amount in summit growth for many years saw it go up and now down.I still have that nagging feeling why did I not sell at the top .
I am no expert, Latin America and Russia funds saw spectacular growth in 2010.Latin American indexes are now above where they were before the crash.
The market up and downs are driven by nervous investors who take money in and out of funds.
This year there was a trend to US investment as those nervous investors feared a fall in Latin America and to some extent Russia.
The American stock market has shown the a small gain this year unlike many others.I feel its a safe bet as the markets take a breather but the exchange rate on the Euro is getting less favorable than it was 2 months ago.
The problems with Greece effect markets at present however.

' Don't put all your eggs in one basket.'

Regards.