Irish Life Maps

Q

quickinvestor

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Any advice on this fund?

75 years in business, and they have an arrangement of options from low risk to high

I could put a large some in there that I won't need in the next 10 years, that would that be a good addition to a portfolio than contains State savings, land, real estate, already?

Any people out there in this fund who have advice?
 
In my opinion, these funds are a very poor choice for investing in for 3 key reasons

1. Fees are high and not transparent : I've seen quoted a 1.15% p.a charge (I couldn't find this quoted on the website) but there are also performance charges (incentive-fees-maps) and I'm not even sure that this covers all the fees.
You can buy a Vanguard fund with transparent low fees of ~ 0.22% per annum

2. Taxes: Any gains you make on Irish Mutual Funds (and UCITS ETF's i.e. Irish domiciled ETFs) are subject to a punitive 41% Tax in Ireland. However, If you invest in a non UCITS ETF (i.e. any US domiciled ETF) then you only pay 33% capital gains tax on profits.

3. 85% of active managers fail to beat the market over the long term. As far as I can tell these are active managed funds. To be honest they are not very transparent so I'm not exactly sure what they are.

My advice to anyone who wants to invest in stocks/bonds is to use low cost ETF's (Exchange Traded Funds) that track an index. Use US domiciled ETFs to take advantage of the 33% capital gains tax. Low cost online broker Degiro.ie will let you buy US ETF's.

For example to cover MAPS Asset allocation you could use the following ETFs (with annual fees of 0.1 - 0.4%)
VT - Global Stocks
ACWV - Low volatility Stocks
VNQ and/OR VNQI - Property
BND - Bonds

MAPS also has an "Alternatives" asset allocation. Personally I think that average investors should steer clear of this asset class.
And as for the cash allocation, How about keeping cash in your own bank account and not paying someone 1.15% of it p.a. to "manage" it for you.
 
One advantage that products such as Irish Life's MAPS funds have over CGT ETFs is that they don't create an obligation to submit a tax return. All income and gains are dealt with at source. This can be important for smaller investors and for people who do not ordinarily submit a tax return.
 
Another is gross rollup. Any dividends paid are reinvested into the fund (it could be an ETF) and no tax is paid on it instead of having any dividends taxed as income each year, which can be expensive. I was at a seminar a few years ago and a speaker said that gross roll up works out as better value as long as you don't have any capital losses. Unfortunately, he had only put it up as a slide and we didn't get to see his workings and assumptions used. (He wasn't from a life company, he was an independent tax advisor).


Steven
www.bluewaterfp.ie
 
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