Life fund safer than NAMA ?

Patrick Shee

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Is a fixed interest fund with a Life company a safer investment than An Post in the event of an Irish Govnt. Bond default?

Curious
 
A very hard call and in fact non in much safer than another.

At the moment it doesn't look like Ireland will default. And it might be much more likely that Ireland will get a bailout similar to cyprus than defaulting. But a cyprus deal for Ireland will cost everyone money, regardless.

The Life companies are no banks. They take your money and work with it. For example they buy bonds. Some of the better ones maybe have an active managed fund where they invest in diversified and actively changing assets on demand and therefore make a good profit for them and for you. I have very poor experience with Irish life who take big fees and do nothing and watch your money burning. If it goes the hard way, your money is with life companies not much safer than holding your own bonds, cause there is the chance they bought all the rubbish from the market that goes down and you don't have control about it. + you never know what kind of levies /taxes / etc will be imposed on life funds in the future again.

Unless you can participate on a job backed life fund where your employer will contribute (which will give a slight benefit) and where it will get tax deduction, you might end up paying a pretty high fee for each contribution and annually for management. (usually a few %)

You might consider to do the job yourself and get a broker / online broker and trade yourself with what you believe is valuable. High risk and you need to stay on top yourself but you might be able to react fast when things go the other way around. Stay away from "spread trading" cause that's betting on share values. Nothing sustainable in there.

In both above ways your money is not protected by the 100k protection fund (if the money is gone it's definitely gone)
 
some are some not .. you will need to read the fund leaflet to get an idea in what they primarily invest.

Some funds have to have some mixture of high rated (AAA or AA or so) assets which are not that many left on the market. SO they might end up buying things like (not too sure about them anymore currently german, US bonds, or other Mideast countries( deemed as AAA and might end up in a fund.

Not related or getting payed from anyone and not to be considered as an advise or recommendation:
Rabo offers an online fund system where you can buy some funds for decent prices
Davy select let you manage funds but i find their documentation of what you buy a bit lame.

I would not advise to ask your bank cause they get commision and generally won't act in your interest but there are a few independent investment managers who are taking a payment from you for their advise (not a commision of what they sell). They might give you a proper advise.
 
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