Zurich Managed Funds and Diversification Away from Tech

I have a significant portion of my long term savings recently invested in a Zurich managed fund bought through a discount broker at the lowest available charging. I am well aware of the ups and downs of the stock market been through the dot bomb and GFC longtime avid reader of AAA /aware of the alternatives like etfs direct investment in shares etc etc so I’m not trying to get advice on this. I have it split equally between Prisma 3 and Prisma 4 which means 36 per cent is in shares and the rest is in non shares. About 75 per cent of the share portion are in American shares and many of the top ten holdings are in the not so magnificent seven.My plan is to up the equity proportion over time and possibly accelerate this if there is a serious market reversal. I want to divest away from the very high conc in American tech in the Prisma funds and was thinking of a 30 /70 cent split between the Dividend Growth Fund / Prisma 2 which would leave me still at 36 per cent equities overall ( dividend growth is almost 100 per cent equity and Prisma 2 is about 7 per dent equities ). Any thoughts on this ?I don’t want to go into non Zurich funds that have additional charging. I just wonder why the dividend growth fund has (only) €300 million in it whereas the Prisma funds are way larger. Thank you in advance for any advice / thoughts

How old are you? And when do you expect to need the funds?

Mid 50s these are long term savings no specific plan

Just to add that most of the Zurich mixed asset funds equity seem to be in the same holdings ( American tech & growth) but the dividend fund whilst still 75 per cent American is in completely different holdings

dublinwoman72 said:

I have it split equally between Prisma 3 and Prisma 4 which means 36 per cent is in shares and the rest is in non shares.

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Almost certainly there's a lot of overlap between those two so splitting between them isn't necessarily significantly improving your diversification.

Tbh, if you’re worried about Big Tech stocks then it’s hard not to worry about the overall US market, particularly when the likes of Buffett is struggling to find value anywhere. I personally would consider diversifying geographically into Europe and/or Asia, and wouldn’t let a couple dozen basis points in cost be the reason not to do so.

conor_mc said:

particularly when the likes of Buffett is struggling to find value anywhere.

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From his 2024 letter to shareholders...

Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change.

While our ownership in marketable equities moved downward last year from $354 billion to $272 billion, the value of our non-quoted controlled equities increased somewhat and remains far greater than the value of the marketable portfolio.

Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities – mostly American equities although many of these will have international operations of significance. Berkshire will never prefer ownership of cash-equivalent
assets over the ownership of good businesses, whether controlled or only partially owned.

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You are in managed funds. The fund manager has done a good job so far. Don't try to second guess the market and think that you can switch in and out of funds to avoid any volatility. The cause of the recent volatility is to do with tariffs and nothing else. If they are removed, we'd see a stock rally. When would that be? Who knows.

If you are in a long term investment, accept the rough with the smoth.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Have you used the Zurich Portfolio Builder ? A very useful tool.
In fact, by entering through the Broker route of the Zurich Life website we have access to a wide range of excellent tools.

I built a Portfolio with the profile I feel happy with and generated a document of exactly what I wanted including a ESMA rating for the overall portfolio. You can tweak away until you’re happy with the mix.
I was able the include my preference for as low a cost as possible for the mix by choosing low ‘other ongoing costs’ and zero ‘additional AMC’s.
I did include Dividend Growth Fund as I found based on past performance and fund aim, it had a somewhat smoothing effect on returns. I had read a few years ago that some managers use such funds in a limited similar manner to bonds.
I didn’t include any Prisma Funds.

Having built the above, I then brought it to an execution only broker (Gerard Sheehy) to initiate an ARF with Zurich.

I feel very comfortable with the portfolio.

When you say a discount broker, are you referring to execution only ?

A very interesting thread you’ve started. I hope it grows.

With regard to the size of Dividend Growth Fund relative to Prisma. , perhaps it’s because from what I’ve seen, advisors often steer customers towards Prisma.

Also, when comparing the equity funds on offer, long term, the Dividend Growth tends to under perform other funds such as International Equity or Global Indexed and so may not attract the same level of investment.

The size of the fund wouldn’t deter me.

Smaller managed funds can be more agile than larger ones.

I don’t work in financial services. Just my own opinions.

I bought it through an execution only broker I did my own research. With reference to fund size my sense is that a provider is going to pay more attention to what is going on with a €3 billion fund than a €0.3 billion fund but this is not based on hard evidence of any sort. Thank you all for your contributions and insights