Ireland’s best performing funds . . . and the worst

Bear in mind when choosing funds that different fund managers charge different fees and this can eat into your share of the pot

Property: its gains must be seen in the context of its recent fails

Property: its gains must be seen in the context of its recent fails

Tue, Apr 29, 2014, 01:15

Who has the fairest fund of them all? If you’re looking for an investment with an element of risk, a fund is always an option for diversifying your portfolio and limiting the possible downside.

While DIRT at upwards of 41 per cent will still eat into any returns you might make, opting for an investment fund, rather than a deposit account, might give you a better chance of earning something on your money.

Depending on what strategy you opt for of course, as some markets could be at risk of over-heating.

Paul Sommerville of for example notes that participation of small traders in the US market is up by about 30 per cent over the past year, as their confidence returns.

However, as a sentiment indicator, this is not a good sign, and if you think that’s a kind of “shoe-shine” boy signal, you might want to tread carefully.

In Ireland, Sommerville has noted increasing inquiries from first-time investors hoping to make some money on Bank of Ireland, rather than put their money on deposit at such low rates of returns.

In Europe, the likelihood of the ECB embarking on some form of quantitative easing programme is increasing, which could offer a boost to stock markets.

Here are some of the best – and the worst - performing funds in Ireland over the past 12 months, according to Moneymate. We just looked at total returns but bear in mind when choosing funds that different fund managers charge different fees and this can eat into your share of the pot.

Irish equity
Best: New Ireland Irish Equity (+35.6%)
Worst: Ulster Bank Secure Iseq 3G (+10.8%)

Irish equities have out-performed global peers in recent years sending funds invested in the Iseq soaring. Of course the sharp rise is due to the scale of the collapse in market in 2008, and while it may have made significant strides, the Iseq , at about 5,000 points, is still lagging its high of 10,041 set in February 2007.

Top of the bunch is the Irish Equity fund from New Ireland, which is managed by State Street Global Advisors.

Another strong performer is the Canada Life/Setanta Irish equity fund, which is up 32 per cent. Previously, the fund was actively managed, but last year the fund manager took the decision to run it as an index fund, on the grounds that demand for Irish equities wasn’t sufficient, while the investment universe was also too small.

Other index funds also performed well, with Irish Life’s fund, which tracks the ISEQ returning almost 30 per cent. It has a 23 per cent allocation to construction giant CRH, with 16.3 per cent invested in Ryanair.

Best: Friends First Corinthian Fund (+131%)
Worst: Zurich Life Australasian Property Fund (-14.4%)

Just a few years ago, Friends First’s Corinthian Fund was in the headlines for all the wrong reasons. It was launched in 2007 and invested in four sites that were let to Superquinn with the plan being to re-develop them. Of course the market had other plans, and investors saw their investment in the fund plummet by about 80 per cent.

Now it’s on the rise again, but its gain must be seen in the context of its decline.

Irish Life’s property fund has also been performing well, with a return of about 30 per cent. It is currently invested in 45 properties spread across the office, retail and industrial sectors, and properties including the ILAC Shopping Centre in Dublin 1 and The Pavillions Shopping Centre in Swords, Co. Dublin. It has recovered much of its losses but is still down by 1 per cent a year over 10 years.

Bottom of the heap is an Australasian property fund from Zurich Life. The Australasia Property Fund invests in the shares of the FTSE EPRA/NAREIT Asia Dividend + Index via an ExchangeTraded Fund (ETF).

The FTSE EPRA/NAREIT Asia Dividend + Index covers property companies and Real Estate Investment Trusts (REITs) that pay a large percentage of their profits as income. One of its largest holdings is in Australia’s Westfield Group, with a 7.7 per cent allocation, but it has its largest geographical allocation (37%) to Hong Kong.

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