PRSA Fund Choice

whatawaster

Hi,

34 years old with no pension provision in place. Looking to start a PRSA this month. Irish Life scheme through work, with 5% contribution charges and 1% mgt fee. Company tops up my contribution by 10%.

Irish Life recommended fund for me was "Portfolio Pension 6".

Looking at this fund, it has a 5 year avg return of 6.10% p.a. and 3.37% p.a. since launch.

I'm thinking I would be better off with one or more of their passive, index funds.

Indexed North-American Equities - 5yr 9.75% p.a., since launch 15% p.a.
Indexed Irish Equities - 5yr 0.34% p.a., since launch 9.45% p.a.
Indexed European Equities - 5yr 2.46% p.a., since launch 8.21% p.a.

Most reading I have done seems to indicate that a passive, index fund like the 3 above are a better long-term bet than any managed fund. Am I wrong?

Should I go with just the North-American fund, or a mixture of the 3?

Thanks

Jim2007

Well "Portfolio Pension 6" is a joke as far as I'm concerned:

This is a high risk fund, which aims to have a high allocation to high risk assets such as shares and property.

The description is rubbish. It's not a high risk fund, based on it's asset allocation, it is the typical type of portfolio that one would construct for a 30 year old... except it has performed abysmally.

Personally I'd concentrate on a mix of US and European equities. I'd keep my exposure to Irish stocks below say 7%. It's basically a micro caps fund concentrated in less than 1% of the Euro Group economy.

whatawaster

Jim2007 wrote: »

Well "Portfolio Pension 6" is a joke as far as I'm concerned:



The description is rubbish. It's not a high risk fund, based on it's asset allocation, it is the typical type of portfolio that one would construct for a 30 year old... except it has performed abysmally.

Personally I'd concentrate on a mix of US and European equities. I'd keep my exposure to Irish stocks below say 7%. It's basically a micro caps fund concentrated in less than 1% of the Euro Group economy.

Many thanks for your response.

I'm thinking then of something like:
Indexed North-American Equities - 60%
Indexed European Equities - 35%
Indexed Irish Equities - 5%

Does this seem ok?

My girlfriend is in a similar boat and was recommended Portfolio pension 5 from the Irish Life advisor but being over 30 years out from retirement i suggested just going for the Consensus equity fund (Passive)


It has a similar global split to what you are thinking.

Jim2007

whatawaster wrote: »

Many thanks for your response.

I'm thinking then of something like:
Indexed North-American Equities - 60%
Indexed European Equities - 35%
Indexed Irish Equities - 5%

Does this seem ok?

I don't know which funds you are intending to actually invest in, but keep in mind that many of the large caps results are impacted by the global economy regardless of where they are based, because overseas sales form a big part of their enterprise.


I'd also want to know what the over all sector allocations are when you combine those funds, because again sectors tend to move in tandem.



And again, if you are talking about under 100k, I'd see if there was a single fund that gave me a reasonable spread rather than separate funds.