Managed fund tops over 10 years

For those who like to look back at what they should and could have done, discountinvestmentsireland.com has published an interesting survey on its website this week.

The survey shows actual payouts for a lump sum investment of £10,000 (€12,700) made 10 years ago. Investors who did take the plunge in 1990 can use this survey to compare the performance of their fund with other companies and types of funds.

Discount Investments grouped the funds into five different categories: overall performance, managed funds, property funds, specialist equity funds and with-profits funds.

The average fund across all sectors produced a value of £26,027 after 10 years. This was a return of 10.4 per cent for each year after tax. Inflation over the 10-year period averaged 2.6 per cent. Therefore, the average fund outperformed inflation by 7.4 per cent per annum.

Of course, it would be wrong to assume that the best performing funds in the past 10 years will be the best performers in the next decade. The companies that took part in the survey are Canada Life, Eagle Star, Hibernian Life and Pensions, Standard Life, Friends First, Scottish Provident, New Ireland and Irish Life. Ark Life, GRE and Equitable did not offer single premium investment bonds 10 years ago.

Specialist equity funds outperformed all other funds significantly and the advantages of the strong dollar and sterling against the euro magnifies this lead. The top three overall performers were equity funds concentrated geographically in the US and the UK. Ms Aideen McMahon, marketing director with Discount Investments, said that Hibernian returned three funds in the top five. "It's interesting to note, given the current fashion for investing in property, that managed funds show greater returns than the dedicated property fund over the 10-year period."

The best performing managed fund in this survey is from Eagle Star, with an annualised return of 12.5 per cent and actual payout of £32,570 in its dynamic fund. The top performing property fund in the survey is from New Ireland, which yielded 9.7 per cent per annum or an actual payout of £25,202.

The range of funds available has increased dramatically in 10 years, according to Ms McMahon. "An investor then only had a choice of managed, property, with-profits or geographically defined equity."