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Investment & Retirement Income Planner
14th October 2019
Ever wondered which is the best multi-asset investment Fund in Ireland?? Well if you have, you came to the right place!
Welcome back to Ireland’s award-winning Investment and Financial Planning Blog & Podcast! I frequently get asked about Multi-Asset Investments in Ireland, whether they are any good, and which ones are best. I fully understand why it can be hard to figure this out, given the amount of options and the level of information.
So this week I aim to answer a question that I think has yet to be answered in an unbiased way; which is the best Multi-Asset Investment Fund in Ireland!
Owning any investment is kinda like ‘Pick n Mix’ sweets, you can have all of one type of you can have lots of different types in the one bag!
What are Multi-Asset Investment Funds?
Instead of eating only Chocolate Mice, having a Multi-Asset Fund offers the perceived benefit of having Chocolate Mice (Equities), Cola Bottles (Bonds), Pink Flogs (Property) and Fruit Salads (Alternatives), all in the one bag!
Many of the modern Multi-Asset Funds will also offer some element of ‘flex’, where the providers have built systems and mechanisms that will somehow predict when markets are about to enter a correction or Bear market. They will then sell some of your Chocolate Mice, and buy more Cola Bottles. And supposedly they will do the reverse before the recovery in the price of Chocolate Mice. If you get me!
For retail investors in Ireland they can usually invest in these products if they are investing a lump sum, and if investing in a pension. Needless to say these are really popular products – at one point last year one of the providers was promoting the fact that €31m per week was being invested in their range of Multi Asset Funds, really significant amounts of money!
How To Judge An Investment Fund?
The financial services industry, when giving out recognition, tends to award based on the volume of sales made – which for a consumer is not really a relevant measure! In my analysis here I am judging on performance over time periods, 4 years and 1 year. While I would love to have a longer duration on which to measure them, they are relatively new products and so 4 years is the max term that we have reliable data for.
We are picking 4 of the most prominently advertised and well-known Multi Asset Funds in our quest to determine which is the best Multi Asset Investment in Ireland. You could argue that there at least 4 other relatively similar products that we could compare, but I’m limiting it to the top 4 here. I’ll also stress that I do not sell nor advise on these products – so I’m sharing facts and nothing but the facts here!
Each provider has a range of Multi-Asset Funds, ranging from usually 3 to 6, 3 being the least volatile and 6 being the most volatile. By all accounts 70% of us investors invest not in the most risky, not in the least risky, but pretty-much smack-bang in the middle of the range! For that reason I am picking the product that sits at the Level 4 in terms of volatility.
The Line-Up (in no particular order!):
Product A: New Ireland iFunds 4:
According to their brochure they promise “A greater focus on risk management – smoother investment journey”. They go on to state that it is a blend of passive and active management and as of May 2019 had a portfolio composition of, allowing for rounding:
According to their Key Investor Document which can be found on their site the annual charges are a total of 2.27% per year. If you opt for the ‘Alpha’ version of the iFund 4 it’s quoted as 2.47%. OK….next
Product B: Irish Life MAPS 4 Fund
According to Irish Life this is a medium risk fund for balanced investors, which aims to have a moderate allocation to higher risk assets. At time of writing their website stated portfolio as, allowing for rounding:
Low Volatility Equity: 18%
Equity Option: 9%
According to the Key Investor Document on their website the annual charge if bought through Direct Sales, is a total of 1.8% per year
Product C: Aviva Multi Asset Strategic 4
According to their website “the fund’s aim is to meet its risk target of a rolling five year volatility of between 5% and 10% per year. This aim may not be reached.”.
According to their website the holdings as of August 2019 were, allowing for rounding:
According to their online KID the annual total fees are 1.54% per year.
Product D: Zurich Prisma 4 Fund
According to their website “The fund aims to achieve growth through capital gains and income from investing across a diversified range of global asset classes”.
Going by their website this fund has an allocation of the following, again allowing for rounding:
According to their KID the annual total charge on this fund is 1.84% per year
Which Is The Best Multi Asset Investment Fund In Ireland?
Well here are the numbers, as of 14th October 2019! €100,000 invested in each of these 4 years ago is now worth, based on unit prices, and not accounting for the above noted fees. Data from FE Analytics software.
New Ireland iFunds 4: €118k
Irish Life MAPS 4: €118k
Aviva Multi-Asset Strategic 4: €110k
Zurich Prisma 4: €123k
Clearly there is a winner, a loser and 2 mid-pack performers over the past 4 years.
Which Has Been The Best Over The Past 1 Year?
We all know that 1 year is definitely too short a period on which to judge an investments possible long term worth, but for perspective here is what €100,000 invested exactly 1 year ago would be valued at in each:
New Ireland iFunds 4: €103.6k
Irish Life MAPS 4: €101.3k
Aviva Multi-Asset Strategic 4: €103.7k
Zurich Prisma 4: €104.3k
Do Multi-Asset Funds Help When Markets Fall?
Aside from the fact that a Multi-Asset Fund will temper the potential returns you will achieve, it’s primary intent is to make you comfortable enough with the ups and downs that you will invest in the first place! Once you are invested, the providers obviously hope that you will stay invested, even if markets fall. It is both your interests to stay invested, they get to collect the annual fee, and you will avoid making the single biggest investment mistake many investors make.
If we cast our minds back to only last September you will recall there was a market decline of 20%, right up to Christmas Eve. Those whom were patient and recognised it as just another opportunity to practice investment stoicism were rewarded on the upswing. How did these 4 Multi Asset Funds each perform in the short decline period? €100,000 invested from 31st August 2018 to 31st December 2018
New Ireland iFunds 4: €94.9k
Irish Life MAPS 4: €93.5k
Aviva Multi-Asset Strategic 4: €92.9k
Zurich Prisma 4: €92.8k
Again, there are a couple of winners here, which performed reasonably fine, losing ‘only’ 5% in that period of time, others less-well declining 7%. For funds that are of similar ‘risk’ ratings and strategy that is a pretty big variance in that period of time.
Which is the best Multi Asset Investment Fund in Ireland?
In this straight shoot-out of Multi Asset Funds I am honestly not sure which one is the best!! I think it totally depends on what you are looking for from an investment.
You may be looking for something to cushion you on the way down. Or you may be looking for something to deliver the maximum returns (in which case you should not be invested in something which holds 40% Bonds, as you know!).
How They Compare To Simple Index Fund Portfolio??
Slightly off-topic, but out of interest I analysed their performance against a simple and low cost index portfolio approach. Using a simple portfolio; 60% Blended Equity and 40% Bonds. No fancy stuff. The total costs of such an approach are in the region of 40% less than the Multi-ASset Funds.
This very simple and proven approach performed better than any of the Multi-Asset Funds! €100k is now valued at €130k now, far more than any of the Multi-asset Funds!
When markets fell in December it fell a little harder than the Multi Assets, falling to €92.2k. Having said that it had out-performed the others again, rising to €103.8k by April this year. All of that before factoring in the difference in costs! Better performance, lower fees, more transparency. These are the reason, at Informed Decisions, we recommend index-portfolio’s over any other form of investment solution for the majority of our clients.
Multi Asset Funds are popular, they are well put together generally. They are fairly complex with a lot of moving parts, which generally adds costs, and difficulty in understanding what you are invested in.
Having said all that they are, in my view, a great addition and offering for people who would perhaps not have gotten invested if they did not exist. They have allowed people who would otherwise not have touched an investment, to benefit from some of the growth that has been achieved by investors in equity over the past decade. And for that alone, they must be saluted!
Over to you!
QFA | RPA | APA | Qualified Coach
P.S: Be aware that any investment can fall as well as rise in value and may be worth less than what was paid in!
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