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Basicilly09

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I'm in my mid thirties and have dabbled in investing for a few years on and off. I am looking at something more long term with low maintenance as I do not have much time to spend on investing. Based on some research I have opened a Rabo Direct account and am aiming to buy 4-5 funds with an initial lump sum and to top these up monthly for 5-10 years approx.

Below is the allocation i am considering but i'd be greatful for any advice whatsoever as i'm not really sure how balanced it is?

40% - Mixed - BNP Paribas Plan Target Click Fund 2020 Acc
20% - Bond - Templeton Global Total Return A Acc EUR
15% - Equity Asia - Robeco Asia-Pacific Equities high
15% - Equity Tech Global - Henderson Horizon Global Tech A2 Acc
10% - Equity Europe - JPM Europe Strategic Dividend Fund
Cheers
 
Well, it's pretty obvious that you don't mind paying Hefty Management Fees, which over a period of time will erode any profits you make.
 
I don't have the time nor the inclination to go digging through these funds to figure out the asset allocation, but in addition to the high fees already mentioned, it strikes me as an old man's portfolio.
 
Wow, i didn't realise i was that far of the mark. I did some more risky trading in the past with FX's particularly and some stock picking. Since then however i have become a parent and have as a consequence become a lot less risk tolerant. The rates in savings accounts are pretty awful so i'm just looking for something that gets 6-10% growth each year. Unambitious i know but achievable with minimal effort and risk i'm thinking.

Mercman - are you suggesting ETF's to avoid fees? Are all funds really that poor in relation to fees?

PMU - Thanks for the advice on the book which i will take a look at but prob won't be until later in the year at the earliest.
 
Basicilly09 said:
The rates in savings accounts are pretty awful so i'm just looking for something that gets 6-10% growth each year. Unambitious i know but achievable with minimal effort and risk i'm thinking.
Click to expand...

6 - 10% looks very ambitious to me. Good luck.
 
Basicilly09 said:
Mercman - are you suggesting ETF's to avoid fees? Are all funds really that poor in relation to fees?
Click to expand...

There has been many articles written about the effect that Management Fees have on funds. I found the sheets of one of the articles and if the Mods allow it, I will post them on this thread. It's a real eye opener. Re ETFs, they are the cheapest way to have your money managed, especially in comparison to Funds.
 
There maybe a little too much discouragement going on, I think it's a reasonable looking portfolio to start off with.

If you go all out for risk at the start it could blow up and you get discouraged, or you spend so long looking for investment opportunities you do nothing.

Fund charges are too high, however regardless of that you do need to do something to get a return. Would this fund selection despite charges have out performed cash last year - I'd guess it would have - pretty much every fund outperformed cash last year.
 
OP, do you know the tax implications of the Rabo funds? Someone may correct me, but I believe most of them are UCITS incurring 36%. Also you can't offset losses in one against gains in another. So you could end up making an overall loss and still having to pay tax!
 
The OP offered a specific investment plan and is getting mostly general reasons to not go with it.

I’d be the one of the first to complain that taxes and charges are high, but as of yet they’re not a reason to not invest.

There’s going to be taxes and charges on all alternative forms of investments, the OP mentioned that they’ve dabbled in shares and doesn’t have the time to do so long term. I’d even say that Rabo funds are particularly awkward regarding tax – especially once the 8 year rule kicks in – this put me off of them.

But If someone doesn’t have time to spend buying shares, and if funds and ETFs are out due to taxes and or charges – what’s left in terms of liquid financial investments?
 
there are 2 reasons why i wouldn't invest in the funds proposed by the OP:

1. for some of the funds it's not clear what the target benchmarks are or even what they invest in
2. the charges are high

For 2 of the funds with clear benchmarks (Robeco Asia-Pacific Equities high (msci asia pac index) and JPM Europe Strategic Dividend Fund (msci europe index)), it should be possible to identify EFT funds that target the same indexes but have very significantly lower charges than the 0.75% in/out + 1.5% pa charges of these funds. For example, an ishares europe etf has a charge of 0.35% per annum. That would represent a quite significant saving over 5-10 years. Would the Rabo funds outperform the indexes over this period by a large enough factor to overcome the charge differentia
 
Thanks to all for your comments and insights. The overall issue other than the old man nature of the portfolio which i'm fine with at the moment (first year of parenthood can make you feel like an old man sometimes:)) seems to be the fees/taxes charged by mutual funds for retail investors.

It sounds as though ETF's are the way to go to avoid this. I guess the only other question would be do ETF's generally provide similar or better returns than managed funds?

Also, what are the best platforms to trade ETF's on. I have a Davy account in addition to my Rabo account.
 
I’d be inclined to buy ETFs myself as I think the argument they should outperform managed funds over the long term is persuasive. I’m think that argument goes along the lines of that managed funds make up a large portion of the stock market, for one fund to do well it’s argued to be at the expense of another fund. So on average managed funds will return the market growth – since they are the market – however it’ll be less their high charges.

ETFs are simply designed to return the market growth less their lower charges – since the management is automated – so they should in the long term win. I’m not sure the logic holds if ETFs become more significant than managed funds.

While that sounds good - you've still got the problem of which market(s) to pick. All very well tracking an index, you want to track good indexes, and there's lots of ETFs.

If you buy your ETF through a provider like Davys you need to watch the minimum charge. They charge 0.5% or 14.99 minimum, so if you put 500e a way per month your entry fee is 14.99 or 3%. Over a year that starts to add up. There’s also the 80 euro a year account charge.

Rabo will charge a flat 0.75% on all investments made with a minimum investment of 100e. So for most small to medium investors they’ll be cheaper for entry fees than what might seem a cheaper provider.

Regular investing suits ETFs and funds, not sure if Davys charges encourage that?
 
Basicilly09 said:
It sounds as though ETF's are the way to go to avoid this. I guess the only other question would be do ETF's generally provide similar or better returns than managed funds?
Click to expand...

Over the long haul manage funds very often under perform their benchmark, in buying an ETF, you are buy the benchmark...
 
Thanks both. The logic seems pretty sound in relation to the managed funds v ETFs. I guess the counter arguement goes something like this; if you pick the right funds you will outperform the index and vice versa which is somewhat similar to a share portfolio but I guess over the long run the ETF provides more stable returns and costs less.

Davy's minimum charge doesn't really suit my plan of regurlar investing after an initial lump sum investment. Rabo don't seem to trade ETFs so just wondering if anyone uses a good platform for ETF trading?
 
TD Waterhouse, Davy, Redmayne Betley and Campbell O Connor are all stockbrokers. If you have any account with any of them, they will buy/sell investments such as ETF's/shares etc on your behalf.

iShares are a company that provide many different ETF's that are traded on the stock exchange.

So it is not a choice between iShares and TDW. You need both a broker and then a security that you wish to buy.

3CC
 
Just had a look at TD waterhouse and it seems its a min of EUR 15 per trade for ETF's. This wouldn't work for a regular investor portfolio of 5 trades per month which is what i'm thinking of. I guess it depends how much your puttiing in each month but for funds that costs 2.5% to invest in i would need to invest 3k per month to get better value (ie EUR 75 fees)

Anyone know of any other stockbrokers with lower minimum charges on ETF's?
 
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