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June 16, 2025
If you google 'best ARF Fund in Ireland' today, you will get many results.
The first few are of course paid-for, sponsored adverts from firms who want your clicks (and are paying handsomely for them!). There are then quite a few other firms who have written about this 'best ARF fund in Ireland' topic.
This week I share a very short piece which shows the actual outcomes of a scenario where one invested in different funds, portfolios and companies over the past decade or more, and what we can learn from it.
And if anyone needs a reminder, an ARF is an Approved Retirement Fund. It is what happens to most of our personal pensions when we start drawing income from them, if we have not chosen an annuity pension. More on all this here if you want a refresh!
During the course of my research, I came across lots of people saying lots of different things. It's a minefield. I empathise with anyone trying to DIY these decisions. Investing your ARF (if that is the way one has chosen to do it), would not be for the faint-hearted. Particularly so when we consider how important that decision is for very many people - this is a households' lifesavings in many cases.
One of the names that came up several times is 'Merrion'.
'Merrion Investments' and 'Merrion Multi Asset 70' are noted on a few prominent websites, and spoken very highly of as an ARF Fund
Another result that appears is Mercer Approved Retirement Fund (ARF).
Another site shows performance data suggesting Zurich Prisma 5 and New Ireland iFunds 5 S12 as top performing ARF Fund in Ireland
Then you might read something from Informed Decisions which talks about the virtues of passive index funds.
How the hell is anyone meant to make head or tails of all these conflicting suggestions and insights!?
I'll show you updated performance data on each of these in a moment, hang-tight!
When we talk about the 'best ARF fund', we must recognise that this is entirely subjective! What might seem best for one person may seem worst for another!
It all depends on what you need or want from your ARF Fund (there's a line I never thought I'd say!).
Here are a few things to consider when exploring and choosing an ARF investment strategy.
• Time Horizon is King
Are you seeking maximum long-term growth and performance, or a smoothed journey? You’re investing for 20, 30, 40 or more years. Might be advisable to not let short-term noise derail your long term strategy and plans.
• Know Your Drawdown Needs
How much do you need each year? Whether that's % or € amount. That decides how much return you need to generate, and volatility you need to bear.
• Diversification
Mix of equities, bonds, property, and maybe alternatives? Or not. Depends on what you seek.
• Costs Matter
Management charges, platform fees, trading costs, commission fees, on-going TER. Most of these are unavoidable, but know what you will pay for each aspects
• Risk Tolerance vs Risk Capacity
You'll be asked to complete an Investment Survey for your ARF, but can you handle the ups and downs emotionally? And can your ARF and draw-down handle them?
• Liquidity for the Unexpected
You might need access to lump sums from the ARF funds in a hurry. Do you need to keep a portion in something that doesn’t take 6 months to sell, and/or that isn't a roller-coaster ride?!
• Investment Philosophy
Are you active or passive? Evidence says passive usually wins over decades. Less drama, more returns?
• Provider Strength & Support
Will the provider, parties, manager be around in 20-40 years? Are they responsive and good to deal with? Or do you need a PhD to understand your statements, and a metal ear to withstand being put on hold for 40 minutes!?
• Income Sustainability
Can the fund support your drawdown without running dry? How might a poor sequence of returns impact your intended ARF strategy? A bad first few years of returns can sink the ship fast.
• Tax Strategy
Think about how withdrawals are taxed, because the real figure is what hits your personal bank account after tax! Also, what might be left for your kids, spouse or loved-ones after you've 'finished with the ARF'!?
• Review & Rebalance
Set it and forget it? Or keep an eye every year or two, perhaps adjusting withdrawal rates and income level per your intended plan?
In my experience, many people want to achieve the best possible returns over the long-term, without taking unnecessary risks. Perhaps the ARF holders that seek my help are self-selected, they understand our own philosophy and approach to long term investing. But many, I'm sure, prefer to have a smoothed journey, a low-volatility approach that might deliver lesser long-term outcomes, but less ups and downs in the interim. If that's what you really want, then that's great too. Once you know what 'best' is for you - have at it!
Following the above mentioned googling of 'Best ARF in Ireland' we have the following funds to assess, from some of Ireland's insurance companies; New Ireland, Zurich, Merrion and Mercer. For comparison, I also include an 80/20 passive portfolio, and a 100% passive Equity portfolio. The list:
Merrion Investments Equity
Merrion Multi Asset 70
Mercer Approved Retirement Fund (ARF)
Zurich Prisma 5
New Ireland iFunds 5 S12
80/20 Global Equity/Bond Passive Vanguard/iShares Portfolio
100% Global Equity Passive Vanguard/iShares Portfolio
Straight-Up Total Return Performance:
Total return is not the complete picture, but it may be useful for some to assess the various options here.
And to confirm, this is a very small sample of possible ARF funds in Ireland, it is merely a selection of some of the results one gets when googling the term. It is not advice or confirming if one is good or bad. Good is in the eye of the beholder here!
No suprises here, in that the 100% passive fund was well ahead of all others at 221% in the 11 years.
Followed by the 80/20% passive Equity/Bond portfolio at 181%.
Zurich Prisma 5 was next up at 179%, followed by Merrion Multi Asset 70 at 164%, iFunds 5 at 137%, Merrion Global Equity 117%, and Mercer Aspire Retire Fund ARF at 63%.
So, one might deduct that, if all-out total returns was your priority (sacrificing smooth journey etc), the 100% Equity portfolio may have been 'best' over the past 11 years?
Perhaps. But if one's priority was less ups and downs, then the Mercer Aspire Retire Fund may be 'best' here?
The above is not the full picture as I mentioned.
When you have an ARF, you are drawing income every month, quarter or once per year. This impacts on the total returns, as some funds will experience larger peaks and troughs, variability of pot value as income is drawn from the ARF. Bottom-line, we need to test these outcomes.
Luckily for you, if you're still with me, is that we can do that! See below. I love this stuff :)
Scenario here is that you had €1m in each ARF at start of data in early 2014, and you drew 5% Gross per year, paid monthly. (€50k Gross/12 = 4,166 month 1).
Importantly, that is 5% of the actual pot value each year, so if the pot falls in value, you got less, if it rose in value, you got more.
I'm not saying this is the best approach to income draw-down (far from it), but it is how the insurance companies tend to do it here, so it's what I modelled for you.
Bearing in mind that we have experienced massive market declines in 2020, 2022 and again in 2025, one might be surprised to see that the €1m ARF invested in 100% equity has generated that 5% gross annual income, and is still worth €1.8m today! Who, provided they could have withstood the market swings, wouldn't be happy with that outcome!?
100% Passive Global Equity €1.8m
The 80/20 passive portfolio is next at €1.58m
Zurich Prisma 5 €1.54m
Aviva Merrion Multi Asset 70 at €1.45m
Merrion Global Equity at 1.35m
New Ireland iFunds 5 €1.32m
Mercer Aspire Retire Fund €913k (the smoothest fund being the only one to be below invested amount now)
Many people that I have spoken to over the years have a sense that they 'should' be able to invest in an ARF, draw a decent income, and still preserve the ARF pot for their spouse, kids or estate. Their intent is to use the market returns over the long term to hopefully look after themselves and their own future lifestyles with comfort, while also easily preserving their wealth and legacy for their loved ones.
Some might believe that the 100% Equity approach, or some variation on that is the way to go for them, in the hope that future outcomes will be similar to what we've seen in the past 11 years. (Oh, we used 11 years above as 2014 was the inception date of one of the insurance company products, we couldn't go back further without excluding them). And others might believe that the approach taken by the Mercer Aspire ARF Fund might be 'best' for them.
It all depends on what you're looking for.
Know what you need and want, and act accordingly (with professional guidance, I suggest! The above is neither investment, strategy, tax nor ARF draw-down advice).
I hope it helps.
Paddy Delaney QFA RPA APA
Some Informed Decisions clients may hold passive portfolios and strategies outlined above, and may give rise to a deemed conflict of interest.
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Informed Decisions are one of Ireland’s only remaining independent financial advice firms. We specialise in retirement & investment planning for successful individuals, so that our clients only have to retire once.
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