Savings/Investment alternatives to Banks/Credit Unions

  • Investments / savings for all types of investors
  • Low, medium, high risk available
  • All investments are fully regulated by Central Bank of Ireland


Savings/Investment alternatives to Banks/Credit Unions

  • Investments / savings for all types of investors
  • Low, medium, high risk available
  • All investments are fully regulated by Central Bank of Ireland

Why look for an alternative saving plan to that offered by local Banks/Credit Union?

  • Banks are in the process of charging customers to hold their money on deposit (negative interest rates)
  • Credit Unions are currently contacting customers to withdraw some of all their savings as the central bank of Ireland has requested them to do so
  • The returns offered by banks and credit unions are at an all-time low
  • Your savings are being eroded by inflation if you don't make a 2% annual return at a minimum.

Why look for an alternative saving plan to that offered by local Banks/Credit Union?

  • Banks are in the process of charging customers to hold their money on deposit (negative interest rates)
  • Credit Unions are currently contacting customers to withdraw some of all their savings as the central bank of Ireland has requested them to do so
  • The returns offered by banks and credit unions are at an all-time low
  • Your savings are being eroded by inflation if you don't make a 2% annual return at a minimum.

What returns are being offered by banks today?

Please see below the deposit and interest rate offered on regular savings by some financial service providers as of 10/3/21.

deposit and interest rate Ireland

As you can see from the illustration above, the returns offered by these institutions are minimal. When you take into account bank charges etc. and the cost of inflation, you are in fact making negative returns. Over a ten year period these negative returns can have a huge impact on the purchasing power/real value of your money.

What other investments options are available?

There are many alternatives options available to you, all of which are fully regulated by the Central Bank of Ireland.

There are various investments categories to tailor for all different types of investors. eg low, medium, high risk investors. These investment options and categories are illustrated in the table below. This table breaks each investments into

1- Investment category

2- Description of category

3- The investment risk category of each investment

4- The top performing funds in each category and a PDF fact sheet of each fund

5- The past 5 year return on investment of each of these funds

Investments options available
Investment Type Brief Description Risk Level Providers The top performing funds in this category Previous 5 year returns (cumulative) PDF Factsheet link
1. Cash Funds Investing your funds in a Cash/deposit Account Low Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Davy Select Irish Life Cash fund -2.9% Click Here
2. Capital Protected Funds Investments that protect a portion of your capital invested eg 70%,80% protected. Low Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, BCP Asset Management, Blackbee, New Ireland Sentinel Fund No past performance Click Here
Medium Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, BCP Asset Management, Blackbee, Zurich Protected 70 Fund 37.15% Click Here
3. Multi Asset Funds Investments where you money is spread across many asset classes eg Gov and corporate Bonds, Equities, Commodoties, Energy etc. Low Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Aviva Compass Cautious Fund 16.70% Click Here
Medium Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Zurichs Prisma 4 Fund 42.30% Click Hera
High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Zurichs PRISMA Max Fund 75.60% Click Here
4. Speciality Funds These types of funds are all invested in a specific sector of Equities. Eg Technology, Property, Pharmaceutical etc. High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Zurich top Tech 100 Fund 201.90% Click Here
High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, New Ireland Emerging Markets (S3) 76.72% Click Here
High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Aviva Irish Property Fund (S3) 1.75% Click Here
5. Structured Bonds These are investment bonds with a set timeframe, they usually have an opening date and a closing date. They track an investment and have a specific maturity date. There are partially capital protected structured bonds which provide different levels of protection. Eg 70% /80% from 80 to 100%. %. There are also Kick-Out Structured Bonds which provide protection once the investment doesn’t fall below a certain percentage Low Risk BCP, Blackbee, Cantor Fitzgerald BCP - Enhanced Equity Bond No past performance Click Here
Medium Risk BCP, Blackbee, Cantor Fitzgerald Cantor Fitzgerald 85% Global Progressive protection Bond Cantor Fitzgerald 85% Global Progressive protection Bond No past performance Click Here
High Risk BCP, Blackbee, Cantor Fitzgerald BCP -Global Artificial Kick Out Bond No past performance Click Here
Investments options available
Investment Type Brief Description Risk Level Providers The top performing funds in this category Previous 5 year returns (cumulative) PDF Factsheet link
1. Cash Funds Investing your funds in a Cash/deposit Account Low Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Davy Select Irish Life Cash fund -2.9% Click Here
2. Capital Protected Funds Investments that protect a portion of your capital invested eg 70%,80% protected. Low Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, BCP Asset Management, Blackbee, New Ireland Sentinel Fund No past performance Click Here
Medium Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, BCP Asset Management, Blackbee, Zurich Protected 70 Fund 37.15% Click Here
3. Multi Asset Funds Investments where you money is spread across many asset classes eg Gov and corporate Bonds, Equities, Commodoties, Energy etc. Low Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Aviva Compass Cautious Fund 16.70% Click Here
Medium Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Zurichs Prisma 4 Fund 42.30% Click Hera
High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Zurichs PRISMA Max Fund 75.60% Click Here
4. Speciality Funds These types of funds are all invested in a specific sector of Equities. Eg Technology, Property, Pharmaceutical etc. High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Zurich top Tech 100 Fund 201.90% Click Here
High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, New Ireland Emerging Markets (S3) 76.72% Click Here
High Risk Zurich, Aviva, Irish Life, Standard Life, New Ireland Assurance, Aviva Irish Property Fund (S3) 1.75% Click Here
5. Structured Bonds These are investment bonds with a set timeframe, they usually have an opening date and a closing date. They track an investment and have a specific maturity date. There are partially capital protected structured bonds which provide different levels of protection. Eg 70% /80% from 80 to 100%. %. There are also Kick-Out Structured Bonds which provide protection once the investment doesn’t fall below a certain percentage Low Risk BCP, Blackbee, Cantor Fitzgerald BCP - Enhanced Equity Bond No past performance Click Here
Medium Risk BCP, Blackbee, Cantor Fitzgerald Cantor Fitzgerald 85% Global Progressive protection Bond Cantor Fitzgerald 85% Global Progressive protection Bond No past performance Click Here
High Risk BCP, Blackbee, Cantor Fitzgerald BCP -Global Artificial Kick Out Bond No past performance Click Here

Fund Categories explained in greater detail

The investment options are broken into 5 categories in greater detail below;




1. Cash Funds

Description

Cash funds tend to be the safest form of investment. They invest in cash deposits. Cash funds will suit investors looking for low-risk investment options. They are invested in deposits with leading institutions and money market instruments.


Investment Risk Category

Low Risk investment with an ESMA rating of 2.


Potential Returns;

These types of investments rarely make sizable returns. In fact, over time they usually make negative returns when you take into account of the effects of inflation.


Providers

All of the main insurance companies have these types of investments, e.g Aviva, Zurich, Irish Life, Standard Life, New Ireland Assurance.

Please see below the past performance from some of these cash funds over the past 5 year period.

As you can see it rarely makes a financial sense to invest in cash funds over a long term period.

2. Capital Protected/Partially Protected funds

Description

Protected funds are aimed at investors who wish to invest but with limited risk. The risk is limited because - depending on the Protected fund you choose - the funds are guaranteed never to fall below a particular percentage of your initial investment e.g. 70%, 80% or 90% - depending on which option you choose. There is no set timeframe, these are open ended funds. There are many different variations of these types of products so they their terms need to be examined on an individual basis before your investment choice is made.

Investment Risk Category

Low to Medium risk category, depending on the amount of your fund you wish to have protected.

Providers

All of the main insurance companies provide a version of this type of investment.

Expected Returns

Below is a chart which shows the actual results from a range of these specific investments.

These funds can make consistent returns over a long term period. They are ideal for people who want to invest for a long term period, make steady and persistent returns while minimising their risks by protecting a high percentage of their initial investment.

Please see below PDF factsheets of 2 of these top performing investments.

Zurich Protected 70

Zurich Protected 80

3. Multi Asset Funds

Description

These types of funds invest your money across a wide range of different asset classes, namely Cash, Government and Corporate Bonds, Equities/Shares and Commodities (Gold/Silver etc). These assets can be spread across the world. The Equities chosen for these types of investments are usually huge multinational corporations (such as Facebook, Google, Amazon, PayPal, Pfizer, Adobe etc. ) which are experiencing high level of growth over the past 10 years or so.

Investment Risk Category

These funds can be Low, Medium or High-risk investments. The risk level is usually determined by the percentage of the fund that is invested in equities/shares. A low risk multi asset fund will have over 70% of the fund invested in government/corporate bonds and cash and only a small portion invested in Equities. A high-risk fund in general will have over 70% invested in Shares/Equities.

Providers

All the main insurance companies have these types of investments e.g. Aviva, Zurich, Irish Life, Standard Life, New Ireland Assurance.

Potential Returns

The potential return from these funds is directed correlated to the amount of the funds which are invested in Equities. Please see the spreadsheet below with the returns experienced by a number of these funds. In general, higher risk funds generate significantly better returns over a 10 year period. They can however drop in value a lot quicker.

Below is a comparison spreadsheet of some of the main funds from a variety of Investment providers in Ireland.

These types of funds are the most the popular for investors. There is a wide range of choice as they tailor for all risk levels. Please not that Multi Asset Funds usually have the lowest Annual Management charges (AMC).


Below is some PDF factsheets of the top performing Multi Asset Funds.


PRISMA Range PDF

Ifunds Range

Aviva Compass range

4. Specialist Equity Funds

Description

These types of funds are all invested in a specific sector of Equities. Eg Technology, Property, Pharmaceutical etc. Equities have the potential to drive real growth in your investment portfolio and often out-perform safer investments such as cash and bonds over the long term. Investing in equities means that you can receive capital growth through potential increases in the share price, and you may also gain from any potential dividends paid by the individual companies.

Specialist Equity Funds allow the investor to focus on a specific sector. That way, the investor can gain exposure to companies in industries that have the potential for rapid growth or may be of particular interest to the investor. The following are some examples of Specialty Equity Funds

Property Funds

There are numerous ways to invest in the commercial property market. Many investors make indirect property investments through the purchase of shares in property companies or by investing in a fund that owns and manages physical bricks-and-mortar properties. Investing in property or property equities can involve high levels of risk to your capital.

Technology Fund

These Indexed Fund gives you the opportunity to participate in the performance of some of the largest Technology companies across the world. Popular Technology companies in these funds would be the like of Paypal, Amazon, Facebook etc.

Global/International Equity Funds

These are equity funds which aims to achieve growth from a portfolio of international equities across the world. Indicative equity range: 80% - 100% of the value of the fund. There are many different versions of these funds across many different investment providers.

Investment Risk Category

These funds are high risk investments.

Providers

Most of the main insurance companies provide their own type of investment in these areas.

Potential Returns

Over time, these funds usually perform very well. However, in the short term, they can be volatile.

The chart below illustrates the returns generated by certain funds in this category.

These type of funds are high risk and are ideally suited for experienced investors who are willing to loose some of their capital in the hope of making significant returns. As you can see from the chart above all of these funds have made significant return over a 5 year period. Any of the above funds that are over 10 years old have made astronomical returns e.g Zurich Life Indexed Top Technology 100GR Fund has made a 612% return over the past 10 years.


Zurich top Tech 100 Fund


New Ireland Emerging Markets


Aviva Irish Property Fund (S3)

5. Structured Bonds

Description

These are investment bonds with a set timeframe, they usually have an opening date and a closing date. They track an investment and have a specific maturity date. There are partially capital protected structured bonds which provide different levels of protection. Eg 70% /80% from 80 to 100%. There are also Kick-Out Structured Bonds which provide protection once the investment doesn’t fall below a certain percentage, if it does fall below the set percentage your capital is at risk for that amount.

EG 40% fall level, if the investment the bond is tracking falls 41% you then lose 41% of your capital.

What type of Investor are you?

If you are struggling to make a decision as to where to invest your money, you can take a test below which will categories your tolerance to risk. The results will give you an indication of what funds you are most suited to (low, medium, or high). The test contains 9 short multiple-choice questions.


What type of Investor are you?

If you are struggling to make a decision as to where to invest your money, you can take a test below which will categories your tolerance to risk. The results will give you an indication of what funds you are most suited to (low, medium, or high). The test contains 9 short multiple-choice questions.


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