zurich Super cap fund

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Biddy

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Can anyone give advise on the Zurich Super Cap Fund. I have some cash I want to invest long term (10 years approx.) and it has been suggested to me that this is a good option.
Any feedback or better suggestion as to investment options? Appreciate any guidance!
 
Biddy, I do not know anything about the fund you mention. However nI do know that investing ones money into ETFs are normally a better option. The reasons for this is the Management Charges applicable to ETFs are normally far less that Insurance companies Management charges. There are no funds that will protect an investor from the ups and downs of markets performance. However to pay AMCs and inflated TERs applicable to funds is pure madness.

It is easier and best to watch your own money grow rather than watch the fund manager grow fat.
 
DerKaiser said:
And yet....
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The point I was trying to make is that an investor has a better chance of achieving a better return by investing in ETFs rather than in funds operated by Insurance companies. Based on the sector, the fund managers invest in the same or similar equities.

It's all down to the costs of managing such funds. Simple as that.
 
Jim2007 said:
Exactly! We have no idea of the OPs investing objectives.... but that does not stop some of us.....
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Spot on. no idea of:
1) What the fund is / does
2) The charges and running costs of the fund
3) The level of expertise of the OP
4) The amount the OP has to invest
5) The OP's tolerance for risk
6) How qualified the broker is and how dilligent he has been in his recommendation
 
Many thanks for the feedback, one question there is mention of ETF's can you explain to me what they are? As you can see I am a novice to all of this!
 
Biddy said:
Many thanks for the feedback, one question there is mention of ETF's can you explain to me what they are? As you can see I am a novice to all of this!
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If you ask Mercman for his details, being a qualified financial advisor no doubt, I'm sure he will be willing to volunteer some time to take you through the whole process and get you set up and revert back with regular advice.

In the absence of that, I can give some pointers on the SuperCapp fund that you should get more info on from your broker.

  • It is a with-profits fund
  • It comprises of european government bonds and equities.
  • Large gains or falls are limited through an investment hedge.
  • Certain guarantees may be available e.g. guaranteed return of fund at 10 years from inception.
In my opinion it is suitable for someone:
  • With a longer term investment horizon (at least 5 - 10 years),
  • who would like a steady return not subject to massive volatility
  • Who would like the option of a return of initial capital at some point
  • Who wants some exposure to equity returns, but not excessively

Financial advice is not simple, it is not free and not everyone is qualified to give it. It is foolish for someone inexperienced not to seek financial advice from a qualified professional. At the same time, it's good practice to second guess that advice.
 
DerKaiser said:
If you ask Mercman for his details, being a qualified financial advisor no doubt, I'm sure he will be willing to volunteer some time to take you through the whole process and get you set up and revert back with regular advice.
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Thankfully I am NOT a qualified financial adviser. I am an ordinary investor that has been put through the HOOPS by Irish Financial Providers. What I have placed in writing is well documented on the web, and in various articles written concerning the costs and effects of Management Fees on index linked funds versus the lower costs of an ETF.

Any investor must make their own investment decisions and therefore I am unable to comment on the fund mentioned.
 
To answer your question ---WIKIPEDIA will tell you all about Exchange traded funds.
 
Biddy

Zurich Life's SuperCAPP fund has been around for years and has a very good track record. You can expect a gross return of c. 4% per annum. Unfortunately in these With Profits type funds, the charges are not very clear and you can't find out what they are.

As for investing in ETF's, there are literally thousands of them, so you have to be careful as to which ones you invest in. What an ETF does is track the market and doesn't make any active calls. A fund manager will try to look for opportunities to make alpha i.e. use his skill to get a better return. As markets and prices generally find their correct level in the long term, it is near on impossible for a fund manager to consistently outperform the market.

Whether you choose to use the ETF route or active management, or a combination of both, you need to have a diversified portfolio and a strategy aligned to your goals. Looking at the SuperCAPP fund would say to me that you are looking for a lower risk investment strategy. Investing in ETF's is the opposite to that. You need to strike the right balance.
 
Shortfall is a good fund for a steady investor. You get a bonus if your inthe fund for five years.will give you between two to four percent annually with a bonus each five years of two to three percent.been a popular fund over the years.only recentlydid Zurich remove the age restrictions on it....
 
ClearFinance said:
Shortfall is a good fund for a steady investor. You get a bonus if your inthe fund for five years.will give you between two to four percent annually with a bonus each five years of two to three percent.been a popular fund over the years.only recentlydid Zurich remove the age restrictions on it....
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Meant supercapp not shortfall...predictive text at its best
 
SBarrett said:
Biddy

Zurich Life's SuperCAPP fund has been around for years and has a very good track record. You can expect a gross return of c. 4% per annum. Unfortunately in these With Profits type funds, the charges are not very clear and you can't find out what they are.
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The historic track record of this fund is undeniable. Granted the annual dividend has been dropping consistently for the past few years but the bonus after five years tends to compensate a bit. I also have respect for Zurich as a fund manager in general.

But I will admit to having some niggling concerns about the fund's composition - 78% Euro bonds at 30/6/2013. Bear in mind the fund itself is nearly €1.5 billion in size. Just from a very basic asset allocation perspective, that seems like an awful lot to allocate to Euro Bonds, even if we ignore any speculation about Euro Bond risks. I've raised this concern previously with Zurich and they're comfortable with it, largely on the grounds that they employ swaptions as a form of insurance against major downside risk. But they're not exactly an impartial commentator.

I'd be interested to hear if any of the learned contributors here have any comments.
 
LDFerguson said:
The historic track record of this fund is undeniable. Granted the annual dividend has been dropping consistently for the past few years but the bonus after five years tends to compensate a bit. I also have respect for Zurich as a fund manager in general.

But I will admit to having some niggling concerns about the fund's composition - 78% Euro bonds at 30/6/2013. Bear in mind the fund itself is nearly €1.5 billion in size. Just from a very basic asset allocation perspective, that seems like an awful lot to allocate to Euro Bonds, even if we ignore any speculation about Euro Bond risks. I've raised this concern previously with Zurich and they're comfortable with it, largely on the grounds that they employ swaptions as a form of insurance against major downside risk. But they're not exactly an impartial commentator.

I'd be interested to hear if any of the learned contributors here have any comments.
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I hasten to assure you that I am not answering the call for a "learned" contribution but a scan of the website reveals that Supercapp dividend in 2012 was 2.75% and there was no bonus except for policies invested before 1990, when I guess there was enough equity content and performance to justify a bonus.

So after the annual management charge of 0.75% expect a return of about 2% p.a. And what more can you expect if 78% of the fund is invested in sovereign bonds which themselves only earn around 2% p.a. Swaptions protect the company against falls in interest rates increasing the cost of any guarantees. They do not protect against sovereign risk and they do nothing to improve investment performance.
 
Duke of Marmalade said:
Supercapp dividend in 2012 was 2.75%
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This is down to 2% for 2013 (interim) or 1.25% after a typical 0.75% management charge

Duke of Marmalade said:
and there was no bonus except for policies invested before 1990, when I guess there was enough equity content and performance to justify a bonus.
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Definitely not the case - worth checking with a broker

Duke of Marmalade said:
Swaptions protect the company against falls in interest rates increasing the cost of any guarantees. They do not protect against sovereign risk and they do nothing to improve investment performance.
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You're half right.

No protection in a sovereign default (other than the point at which the money back guarantee kicks in).

The swaptions are to protect the policyholder against significant increases in bond yields and capital losses.
 
DerKaiser said:
This is down to 2% for 2013 (interim) or 1.25% after a typical 0.75% management charge


Definitely not the case - worth checking with a broker


You're half right.

No protection in a sovereign default (other than the point at which the money back guarantee kicks in).

The swaptions are to protect the policyholder against significant increases in bond yields and capital losses.
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On the bonus, I am only going by what is on their website.

No way are the swaptions to protect policyholders. If they are then that points to even less potential for returns. You can't get blood out of a stone. If you invest in bonds earning 2% p.a. no amount of swaptions or any other magic is going to increase that. If it makes sure that it will be achieved should interest rates rise then it makes sure it will be achieved if interest rates falls. Let's get real, if you invest in 2% p.a sovereign bonds there is no way that any jiggery pokery with swaptions will enhance that potential.
 
Duke of Marmalade said:
Let's get real, if you invest in 2% p.a sovereign bonds there is no way that any jiggery pokery with swaptions will enhance that potential.
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We're not talking about enhancing the return, we're talking about protecting the customer from capital losses in the event of significant increases to bond yields. That's why the swaptions are there. They're an insurance. The premium is the loss of upside in the event of further interest rate falls, the benefit is avoiding serious capital losses if interest rates go up.
 
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