Should you pivot your Irish oriented investment pot – (e.g. maybe even a bit) – into getting at least some exposure to the new wave of AI / Bitcoin innovation?
Most people choose a generic mixed asset fund with a mid-range ESMA rating (which is often prudent – especially for a pension)
Many however do not realise that more ‘aggressive’ growth options are available whilst still getting the same tax reliefs on your investments.
Get your own pension review by using the contact options below which suit you
You can choose to get a review on an existing pension and/or enquire about setting up a new plan.
Irish domiciled funds provided by the likes of Irish Life, Zurich and Aviva have generally handsomely outperformed inflation over the last decade or so at a rate of near 10% per annum.
Notwithstanding mainstream media commentary re tech stocks (and they were right sometimes) and even allowing for the ‘Zoom Boom’ in 2020, this infographic below shows that notwithstanding the growth stocks drawdown after the ‘stay at home’ Covid boom, these funds have performed spectacularly well over a ten year term:
Comparing the above to more typical ‘generic’ mixed asset funds…
Note that is possible to have a mix of fund types in your pension/investment portfolio including say a mix between Irish Life and Zurich.
Get your own pension review by using the contact options below which suit you
You can choose to get a review on an existing pension and/or enquire about setting up a new plan.
Past performance is not indicative of future returns etc etc..
Most educated folks know that the historical returns of a given fund are not indicative of future returns. (Indeed as regulated financial brokers, we are obliged to apply such an advisory to just about every communication).
As financial brokers, we do not get remunerated based on the risk weighting of the fund(s) that you invest in – but however we are legally obligated to serve your best interests in accordance with your ultimately determined financial goals (there are also further caveats for vulnerable adults and politically exposed persons etc.).
So is a technology stock pension/investment fund in your best interest?
Well it depends…of course.
It depends on so many multi-variant factors related to your age, family circumstance and personal goals – which is why and how we earn our corn as independent* financial brokers.
*This *independent broker designation means that we must review multiple providers in the market and provide you with ‘Reasons Why’ and ‘Statement of Suitability’ documentation amongst other legal as well as ethical compliance standards. (We disclose also our terms of business and commissions declarations for your inspection as a matter of policy and pursuant to being regulated by the Central Bank of Ireland.).
Technology stocks tend to have higher margins and moreover very disruptive ‘winner takes most’ characteristics. They are also infamously more volatile and have a higher beta risk.
However even a conservative medium term investor and/or near-to-retirement pensioner could perhaps allocate say 20% to this asset class (and get the 40% tax forbearance).
It is no coincidence that Irish lifeco’s sell both pensions and life insurance – the latter is like a put option against your productive earnings lifetime expectation, whilst that former is like a call option on the possibility that you might have a very long retirement!
Philip Doyle – Ocean Finance
Put in another way, nobody regards life insurance or mortgage protection as a path to quick riches – and likewise the mixed asset funds of these providers should be perhaps be more looked at as an insurance policy on the eventuality of something we all aspire i.e. a long, prosperous life!
Ergo in a sense these tech-focused funds might be a prudent way of keeping one’s hand out of the cookie jar – a prudent euro cost averaging product – which is a fire and forget (even while you might dabble with AI and crypto on your Robinhood account or wherever).
Get your own investment or pension review by using the contact options below.
You can choose to get a review on an existing pension and/or enquire about setting up a new plan.
