How best to Invest in Ireland Inc?

M

monagt

Registered User
Messages
880
Economy to surge by 5.3pc this year, Goodbody says
Click to expand...

How does a person invest to take advantage of this revival of the Irish economy?
(Assuming all other diversification and capital allocations are already in place.)
 
A very interesting question.

Very few of the Irish quoted companies, apart from the banks, have that much exposure to Ireland, so it's hard to get a diversified portfolio.

But if you were getting your diversification from other shares or assets, you could take a punt on Ireland's GNP growth. Is the surge due to Irish quoted companies or to the multinationals?

Here are the only companies I can think of which may get a majority of their earnings from Ireland. I say "may" because I don't know them well enough.

I am not recommending these shares - just pointing out that they may get their earnings from Ireland. We don't allow discussion of individual shares on askaboutmoney.

Aer Lingus
C&C
CPL ( I have shares in this company)
Dalata Hotel Group
FBD
Green Reit
Hibernia Reit
Kingspan
 
There is, but as the big holdings are CRH, Ryanair, Aryzta , most of its earnings are overseas.

It is quite small, so I think that the costs are quite high.

Brendan
 
Brendan Burgess said:
A very interesting question.

Very few of the Irish quoted companies, apart from the banks, have that much exposure to Ireland, so it's hard to get a diversified portfolio.

But if you were getting your diversification from other shares or assets, you could take a punt on Ireland's GNP growth. Is the surge due to Irish quoted companies or to the multinationals?

Here are the only companies I can think of which may get a majority of their earnings from Ireland. I say "may" because I don't know them well enough.

I am not recommending these shares - just pointing out that they may get their earnings from Ireland. We don't allow discussion of individual shares on askaboutmoney.

Aer Lingus
C&C
CPL ( I have shares in this company)
Dalata Hotel Group
FBD
Green Reit
Hibernia Reit
Kingspan
Click to expand...

The problem with this approach is that while they may have a large amount of exposure to Ireland and while Ireland may be doing very well, it doesn't mean these companies will do well. E.g. Dunnes would do a lot of their business in Ireland (or at least I assume they do, I know very little about their foreign business but for the sake of an example let's pretend they do) but even if Ireland was booming they could be performing very poorly and losing market share to Lidl/Aldi/Tesco etc.
 
As I stated in my post, I am not recommending these shares. Nor am I recommending this approach - I am pointing out that it would be a "punt" and probably ok, if you had diversification elsewhere.
 
The problem with this is that if you are sufficiently diversified to eliminate diversifiable risk (unsystematic risk to give it its technical name), which is the theoretically optimal investment approach from a risk/return point of view - then you will have no real exposure to the Irish economy. You can't diversify risk but retain exposure to specific risk factors (e.g. the Irish economy).
 
Of course you can diversify risk and take a punt at the same time.

You might not be able to completely eliminate diversifiable volatility, but I don't think that is what the OP (Original Punter) wants to do.

Brendan
 
Fair point Brendan, but diversification is ultimately the opposite of taking a punt so you are leaving some of the risk reduction benefits of diversification behind if you overweight your portfolio in a particular asset/class. Just something to bear in mind when thinking about investment approaches.
 
You must log in or register to reply here.
Back
Top