50K to invest prsa vs managed fund advice

R0me0 · 05-11-2021 10:35am #1

Folks

First Post here and thanks if you can offer any tips/ideas.

Mortgage paid, no loans , kids reared.Healthy savings and public pension in 6yrs time.

Looking for advice on investing 50k. Thinking of maxing out my and my wife's existing prsa over a few years due to the tax relief and small fees payable.

Other idea which I have verbally committed to with a financial advisor.invest the 50k in the irish life protected consensus market fund.total annual management fees 1.82%.

Just don't want the 50k sitting in a bank.

Thanks again.

grassmoon · 05-11-2021 10:46pm

AMC of 1.82% is quite high. Davy Execution only PRSA offer 0.75% and let you invest in passive index funds.

Supercell · 07-11-2021 5:05pm

Open a Degiro account and put it all in SMT, thank me in 6 years.

grassmoon · 09-11-2021 9:39pm

Any active fund you get from an Irish finance company will have high fees and poor performance.

Static M.e. · 11-11-2021 9:22am

(SMT = Scottish Mortgage Investment Trust PLC)

How long do you plan on investing for?

Depending on that answer. Similar to SuperCell above, I would open a Degiro account and put it all on an ETF or something like SMT. Just make sure you understand the tax implications of whatever options you choose.

For some background reading, I really like this website AnIrishInvestorsGuide – The simple guide for Irish investors.

and this is worth reading too

Don’t invest in an ETF until you understand the tax (irishtimes.com)

11-11-2021 9:22am

AMC of 1.82% is horrendous.

If you add the Other Ongoing Costs to that (assumimg that you can Irish Life to disclose them) you're probably looking at an equivalent Total Expense Ratio of circa 2.5%.

Way better value in the market than that for these products.

What dod the finiancial advisor say about putting some money into the PRSA?

The J Stands for Jay · 11-11-2021 9:56am

https://www.boards.ie/discussion/comment/118143645#Comment_118143645

It's the worst possible type of fund in this case. It's protected, which contributes to the cost, but the protection is likely not worth it, and then it's a consensus fund, which means the active management is merely copying the average asset allocations of other actively managed funds; hardly worth paying an active sized fee for.

grassmoon · 12-11-2021 9:01pm

A low cost investment trust like SMT is a good option. I'm invested in them myself.

R0me0 · 18-11-2021 5:19pm

Thanks Folks.

Decided not to go ahead with the Irish life investment even before I read your opinions.

I didn't discuss in depth the prsa idea with the financial advisor.

The investment would be long-term 10yrs min.

FYI. I have a deffered pension from a prior employment that i left in 1999 that was worth £10k at the time.Its current value is €74k.Hence my interest in putting the lump sum into equities.

I will do a bit of research on your advice and take it from there.

Thanks again.

uli84 · 21-11-2021 7:14pm

https://www.boards.ie/discussion/comment/118132205#Comment_118132205

Why are you so optimistic about it?

uli84 · 21-11-2021 7:32pm

https://www.boards.ie/discussion/comment/118149611#Comment_118149611

Would you be able to tell me more regarding tax implications when investing in SMT?

Static M.e. · 23-11-2021 8:41am

@Uli84 I personally don't invest in Investment Trusts (ITs) so I'm not the best person to answer. I believe the main difference is how they are treated for tax. With ITs you pay 33% Capital Gains Tax when you withdraw the funds as opposed to the 41% exit tax every 8 years and on withdrawal with EFTs. With ITs you can also use your annual CGT allowance of €1270 to offset losses against any gains. They are definitely worth looking into and they have a lot of strong\experienced followers here so I hope one of those could jump in and help you.

50K to invest prsa vs managed fund advice

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