The 9 Funds Available on MFF Platform

When you join MyFutureFund, you don’t have to worry about choosing investments. You’ll be placed in our Default Strategy, which uses a lifecycle approach—designed to grow your savings while reducing risk as you get closer to retirement (which is based on the State Pension Age, currently 66 years of age).


The High Risk Fund if you are under 50 - The Sub-Fund is a passively managed index tracking sub-fund and seeks to track the performance of (i) a 90% allocation to MSCI World Climate Change CTB Select Index and
(ii) a 10% allocation to Bloomberg MSCI ESG Euro Aggregate Sector Neutral Select Index (the “Composite Index”).

The Medium Risk Fund - age 51 to 60 - The Sub-Fund is a passively managed index tracking sub-fund and seeks to track the performance of (i) a 50% allocation to MSCI World Climate Change CTB Select Index and
(ii) a 50% allocation to Bloomberg MSCI ESG Euro Aggregate Sector Neutral Select Index (the “Composite Index”).

The Low Risk Fund - 61 to 66 - The Sub-Fund is a passively managed index tracking sub-fund and seeks to track the performance of an
(i) 85% allocation to Bloomberg Euro Treasury 50bn 1-3 Year Bond Index and
(ii) a 15% allocation to Bloomberg MSCI ESG Euro Corporate Select Index (the “Composite Index”).
 
What a nonsense! The lifecycle approach has surely been debunked a long time ago?

The fallacy of "lifestyling"

I was recently made aware of a situation which highlights the total fallacy of "lifestyling". The basic premise behind lifestyling is that one should invest in growth assets up to, say, 10 years before retirement and then ease into bonds/cash or "safer" investments as you approach retirement...
www.askaboutmoney.com

A critique of the lifestyling approach to pensions

I came across a paper which may help the PA answer some of those questions: "Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice" https://www.netspar.nl/assets/uploads/19.-Cederburg-ACO_Manuscript.pdf "Our findings suggest that financial advice and pension regulations...
www.askaboutmoney.com

www.irishtimes.com

Lifestyling investments questioned as retirement choices change

Many members of defined-contribution schemes now opt for ARFs
www.irishtimes.com www.irishtimes.com
 
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This doesn't even seem like "good" lifestyling. A lifestyling fund should have a gradual glidepath from equities to bonds/cash over 15 or so years with the weighting changing slightly each year, to smooth out market volatility.

The equity component here falls off a cliff at age 51 and again at 61. It's a huge change in portfolio and is very sensitive to market conditions at those breakpoints. Like if you turn 61 right after a crash and MFF sells half your fund.
 
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Brendan Burgess said:
The High Risk Fund if you are under 50 - The Sub-Fund is a passively managed index tracking sub-fund and seeks to track the performance of (i) a 90% allocation to MSCI World Climate Change CTB Select Index and
(ii) a 10% allocation to Bloomberg MSCI ESG Euro Aggregate Sector Neutral Select Index (the “Composite Index”).
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The document then lists the following in the "high risk" section.
  1. AMUNDI CCF - MULTI-ASSET GROWTH - AE with the 90%/10% allocation outlined above
  2. BlackRock CCF Growth Fund
  3. ILIM Growth Fund
It's not clear to me where 2 and 3 fit into the picture.

Also, the highest risk/reward rating in the high risk category is 4 (or 5?) on a 1-7 scale which seems conservative?
 
Brendan Burgess said:
What a nonsense! The lifecycle approach has surely been debunked a long time ago?
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I emphasize in fairness if you have to roll this out to an entire population.

Try and explain to someone who is almost at retirement that their pension fund that they thought was €200k has suddenly become €80k, that they might have to wait for 10 years or more before it goes back to €200k and that they'll most likely run out of money before that unless they make some significant cuts to their planned expenses. Or that they now have to work for 5 to 10 years longer than they thought to make up for it.

Of course, the reason why they ended up with €200k in the first place is because they were fully invested in equity for 30 or 40 years. Had they been on a lifestyle fund, they would never have had anywhere near €200k in the first place. In fact, even after the crash, they're possibly still better off than what they would have been on a lifestyle plan.

But go try and explain that to someone who just "lost" most of their pension. Or to the journalists who will be all too happy to come up with creative headlines like "€10bn of taxpayers pensions invested in government's disastrous auto-enrolment scheme wiped out".

Lifestyling is a worse outcome for most / all but it's a lot easier to explain and and a lot easier to justify / deflect blame when it goes wrong.
 
PandPs said:
But go try and explain that to someone who just "lost" most of their pension.
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They're going to have to explain that to some people in any case when natural market/fund volatility causes the balance of an individual's MFF account to fluctuate day to day/week to week etc. no matter which of the three risk profiles they're in at the time. The idea of balance fluctuation is going to be new to some (many?) people.
 
Brendan Burgess said:
Scandalous really for something aimed at the general public.
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I get the impression this is not really aimed at the woman on the 46a.
It looks like a formal EU requirement, in fact generic and aimed more generally than simply MFF. The max charges for example are way higher than what the DSP has told us will be the actual charges. Amundi and Blackrock indicate max charges of 0.1% p.a. but we are told that they will in fact be 0.04% p.a. Irish Life have ludicrous max charges of 2% entry and 3% exit, I understand these will not actually apply.
Yes there are 9 funds but there are only 3 MFF funds as each such fund is spread equally between Amundi, Blackrock and ILIM.
@ClubMan
Also, the highest risk/reward rating in the high risk category is 4 (or 5?) on a 1-7 scale which seems conservative?
4 would be light but 5 is typical equity; 6 would be leveraged ETFs and 7 is highly leveraged derivatives.
 
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Brendan Burgess said:
The lifecycle approach has surely been debunked a long time ago?
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Lifestyling is the norm for default strategies for the masses. For example NEST defaults folk into Retirement Date Funds - e.g. someone aged 30 would be defaulted into the 2060 Retirement Fund.
Standard PRSAs are required to have a default strategy which most if not all interpret as a glidepath towards a "safer" balance at retirement.
It has of coursed been "debunked" by some analysts but still remains conventional consensus, I think.
The completely novel approach adopted for MFF of precipice adjustments at age 51 and 61 exact will not survive.
 
Brendan Burgess said:
Have they provided one for the woman on the E1?
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The title of OP is Key Information Documents or KIDs.
They have been EU standard requirement to be provided to all investors in regulated retail products for some time now. They are as incomprehensible as the ones in OP and I don't think any investors or indeed their advisors pay a blind bit of attention to them.
 
PandPs said:
Try and explain to someone who is almost at retirement that their pension fund that they thought was €200k has suddenly become €80k,
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Like all those UK pension savers who were lifestyled into bonds just before the Prime Minister tanked bond values?
 
Duke of Marmalade said:
Standard PRSAs are required to have a default strategy which most if not all interpret as a glidepath towards a "safer" balance at retirement.
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I remember Standard Life originally had their PRSAs with a with profits fund as the default strategy throughout. It's not a million miles away from Colm's proposal
 
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