Investing in Rabo Bank funds

allo said:
thanks all for advise , the tax issue seems to be a nightmare, but tax apart, as previously stated I am about 1000 euros ahead and I have zero knowledge on when to sell, should I toss a coin or hold on for a specific time?
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If the lads knew that they wouldn't be here, they would be off in the Caribbean in a hammock, sipping Pina Coladas being served by girls in white bikinis!!!

On a serious note, what you want to do is time the market and that is impossible, you can make calculated educated guesses, but they are just a guess.

my advice is sell when you want the money for something else.

hope this helps, and please excuse the cheekiness at the start
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allo said:
thanks all for advise , the tax issue seems to be a nightmare, but tax apart, as previously stated I am about 1000 euros ahead and I have zero knowledge on when to sell, should I toss a coin or hold on for a specific time?
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Nobody can advise you on that I'm afraid because it amounts to trying to predict whether the fund you are invested in will increase or decrease. Crystal ball stuff.
 
Hummmm,

While Rabodirect may be offering some attractive rates & a decent overall online service, this tax hastle is going to scare lots of potential customers away, imho.

They may be the "straight talking bank" but I really wish they would also help us out here, by deducting the tax & forward to the Revenue for us - I'd even accept a small annual charge for having this done, were I investing in their funds etc.

With the introduction of this new tax calculator, why won't Rabodirect help us out here ? (come on Rabodirect, we know your' reading this, please answer the question ... or better yet, help us all out here )

- Top marks to Rabodirect for being open and willing to post here btw. Any company / individual service provider willing to respond to questions & in particular, complaints via AAM deserves acknowledgement.

Cheers

G>
 
We understand that some potential investors have difficulties with the tax situation. Customers can currently download their full transaction history which details each trade and the gain or loss made. The profit & loss calculator that we will develop in the coming months will help even further and should make life a lot easier.

We appreciate that some customers would prefer if we automatically made deductions and forward them on to the Revenue. There are reasons why we cannot currently do this - see the RaboDirect post. However, we are listening and will endeavour to come up with a solution that meets our customers needs. Each investor's tax situation is different depending on the range of investments held - in other words, tax can sometimes be somewhat more complicated than we would wish.

Thanks for the feedback. We'll keep AAM and our customers posted on developments.

As an aside, a post on AAM some time ago suggested that we allow our customers choose our "Fund of the Month". This week we polled customers who subscribe to our ezine and asked them to vote from a selection of 4 funds. By popular vote the Henderson Pan European Equities fund was the winner and will be the Fund of the Month for Feb. Thanks to AAM for the suggestion.

Regards,
RaboDirect
 

It's not that calculating the tax is too difficult, it is just that it as Clubman mentioned, it removes the chief benefit of going down the fund investment route. Given that the administrative burden on myself is the same - why would I not invest in ETFs through an online broker and thus avail of much lower fees?

However, perhaps the most serious problem (for me at least) is the way that the funds are structured. Namely that they must be treated separately for tax purposes. This discourages longterm investment because it means I cannot rebalance a diversified portfolio at the end of each year without incurring taxes even if I have made a net loss for the year.

This is a shame because Rabo has by far and away the greatest selection of funds to choose from. Full credit too for posting on the forum and answering people's questions.
 
room305 said:
Given that the administrative burden on myself is the same - why would I not invest in ETFs through an online broker and thus avail of much lower fees?
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Aren't the Rabo funds all actively managed, unlike ETFs?
 
Last time I looked [broken link removed] seemed to be passively managed or trackers etc.
 
RaboDirect currently only offers actively managed investment funds. We do not offer ETF's or tracker funds. When comparing the array of investment instruments investors need to be aware of the differences between them - sounds simplistic but often some potential investors do not appreciate the differences between index funds and actively managed funds.

Please see for more information specifically regarding the asset classes on offer at RaboDirect
[broken link removed]

Also, from the FAQ section of the RaboDirect site re investment queries
[broken link removed]

Re specific issues regarding taxation please see the above RaboDirect post.

Regards,
RaboDirect
 
Hi Rabodirect,

Quick question for you.

I currently have an investment fund opened online with you. I now wish to add additional monies to this fund.

Will I be charged another entry fee of .75% on these monies even though the fund is already opened?

If I decided to place the new monies if a different fund will I then be charged a seperate .75% entry fee?

If I choose a regular contribution to the already opened fund what charges if any will apply..

Thanks
 


Every time you purchase units in a fund you will be charged the entry fee of 0.75% (unless you have chosen the "Fund of the Month" where the entry fee is 0.25%).
For example:
Feb 6: purchase €100 in Fund X: Charge is 0.75%
Feb 21: purchase another €100 in Fund X: charge is 0.75%
Feb 26: purchase €100 in Fund Z: charge is 0.75%.

So as you can see, this applies to one off or regular transactions.
Rabo Regular Investor Plan:
Example: investing €100 in 3 funds every month:
Fund A: €100 - charged @ 0.75%
Fund B: €100 - charged @ 0.75%
Fund C: €100 - charged @ 0.75%

You can alter your Regular Investor Plan online at any time, ie, add or delete funds, change amounts, change frequency of investing.

Note: an exit fee of 0.75% is charged each time you sell units in your fund(s).

Fees: [broken link removed]

Past performance is a not a reliable guide to future performance. The value of your investment may go down as well as up.

I hope this clarifies your questions.

Regards,
RaboDirect
 
Does anybody know whether purchases of Rabodirect funds need to be declared to the revenue? I started purchasing some of the funds last year and plan to hold on to them for the medium to long term. Obviously you have to declare any profits made on sales of your funds, but I am not clear on whether you also have to declare the purchases of these funds.

Also, the Rabodirect website investment faq says:


Does anybody know what is meant by this? How can you have different tax rates applying depending on whether you declared something inside a specified period? Surely if you aren't making a declaration in the specified time period, you are evading tax anyway. What has this to do with which tax rate is applied?

Thanks for any info
 

I doubt purchases have to be declared and I don't know what form you could use if you did intend on doing so. Maybe this refers to the 8 year time frame alluded to in the 2006 Finance Act? Could be clearer though.
 
I have a question regarding the tax rates. As some of the funds are resided in Luxembourg does that mean I have to pay 40% CGT rate as they are an offshore fund? Or does the 23% roll up rate apply to all Rabo direct funds.
 
Dinnoc said:
I have a question regarding the tax rates. As some of the funds are resided in Luxembourg does that mean I have to pay 40% CGT rate as they are an offshore fund? Or does the 23% roll up rate apply to all Rabo direct funds.
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RaboDirect offers investors capital growth investment funds (as opposed to distrubtion funds). Growth investment funds reinvest any income earned back into the fund.

Any gains made from the buying and selling of units in RaboDirect's funds are taxed on a gross-roll up basis. This means that the funds grow free of tax until the investor decides to sell their investment. When an investor sells their investment the investor is liable to pay 23% (standard tax rate of 20% +3 %) on the total increase in value of the investment.

Also on each eighth anniversary of acquisition the investor is deemed to dispose and reacquire their investment in the fund.

Tax is payable at 23% on any deemed gain arising. This tax is available for credit against the tax liability when the investment in this fund is ultimately disposed of. If the investment has not increased in value, then no tax is taken.

Investors should note that the 23% tax rate only applies if they have declared the tax liability to the Revenue Commissioner within a specified time period; otherwise, for investors who do not make valid returns within the correct period, the tax rate applicable may be each investor's marginal rate of tax (which could be up to 41%). In other words, it's in your interests to make prompt and correct tax returns.

Investors should make the return on or before the 31st October in the year following the tax year in which they sold their RaboDirect investment fund. For example, if a RaboDirect customer sold an investment fund in 2006 and made a gain, then the investor should submit this on his / her tax form on or before the 31st October 2007. The relevant revenue forms can be found on www.revenue.ie

RaboDirect customers who have funds can download a statement which clearly details all transactions, the entry and exit fees applied and the profit or loss made on each sale. This information can then be used to make your tax return.

Regards,
RaboDirect
 
Hi RaboDirect,

Clearly, this entire tax issue a problem for all concerned and will, if it does not already, seriously restrict your ability to grow new business for these various Investment funds. Surely, Revenue & RaboDirect can come up with some solution to help make your customers & potential customers lives easier ?


On a seperate note, am I correct in thinking RaboBank is a mutual society owned by it's members & are customers of RaboDirect members of the mutual, entitled to voting rights etc ?

Thanks

G>
 
Garrettod said:
On a seperate note, am I correct in thinking RaboBank is a mutual society owned by it's members & are customers of RaboDirect members of the mutual, entitled to voting rights etc ?
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Not all customers of other mutuals (e.g. EBS, FNBS) are necessarily members as it depends on the type of account they hold for example. I am a RaboDirect customer and I certainly don't think that I'm a member.
 
ClubMan said:
Not all customers of other mutuals (e.g. EBS, FNBS) are necessarily members as it depends on the type of account they hold for example. I am a RaboDirect customer and I certainly don't think that I'm a member.
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I agree entirely, hence the question directed to RaboDirect here on the thread - I don't want to take the thread way off topic form general RaboDirect facilities etc, so just want a quick answer if possible from the contributor(s) posting under the handle RaboDirect please

Regards

G>
 
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