News
The Irish investment market is pathetic
By Michael O’Connor, theislandinvestor.com
I lived abroad for years, so all the investment strategies I created were typically outside of Irish tax considerations.
But over the last few weeks I have been putting together several investment strategies for Irish-domiciled clients. It has been eye-opening, to say the least.
In short, most of the Irish market appears to be dominated by a handful of life insurance companies that offer 'wrapped' Multi Asset Funds. This means they offer a basket of stocks, bonds, property etc., all within one investment.
Irish Life's MAPs 4 multi-asset fund states a standard annual management charge of 1.15%. A bit on the higher side for my liking, but this is still manageable.
But when you dig a little deeper, the KID documents (where all fees have to be fully disclosed as part of UCITS regulations) show the fee as 2.2%.
Double the quoted price
As an added bonus, they lock your money up for seven years, where an early encashment charge is waiting for those who wish to withdraw their money early. That's right, they charge YOU for making your money inaccessible.
This lock-up period is a shrewd business tactic. An exit charge is an excellent way to ensure customers don't leave when they realise how poor the performance is.
Too late, you're trapped.
Performance
Fees become more digestible provided the performance is strong, but unfortunately, the misery continues.
The Irish Life MAPS 4 Portfolio has an annual return of 1.63% a year over the last five years. Granted, this was a challenging market climate to navigate, but falling below even the lowest expectations of inflation means that this fund has returned negative real returns after inflation over the last five years.
A similar 60/40 portfolio made up of passive index funds (S&P 500 and US T bonds) would have returned roughly 6.5% a year over the same period for a fee of roughly 0.1%.
We can go round and round in circles regarding the 'risk adjusted' approach and the added 'diversification' of the multi-asset fund versus the 60/40 portfolio I have shown. But the reality is much of this so-called diversification is over-engineering for an extra cost for many long term investors.
So, how can such pathetic offerings still exist in a system where low-cost operators such as De Giro are providing endless ETF options and commission-free trades that provide access to market returns at a fraction of the price?
Two reasons spring to mind
Firstly, the Irish retail investment scene is built on a financial broker commission system where unsuspecting customers are shoved into these products by 'financial planners' who receive kickbacks and commissions from these investment companies. You think you're getting free investment advice; believe me, you're not.
Second, the tax treatment of ETF structures is comical in Ireland, and US ETFs aren't even an investment option. A 41% exit tax and an eight-year deemed disposal rule leaves investors stuck between a rock and a hard place.
Choose an overpriced, underperforming product that locks your money away for multiple years or choose the cheaper, better-performing product and suffer the tax consequences.
Bizarrely, investors are forced to make decisions based on preferential tax treatment rather than on the underlying investment's merits.
I have gone into much more detail on the tax treatment and investment options in Ireland on my website. Just scan the QR code.
If you would like me to independently review your investment portfolio, just send me an email at mike@theislandinvestor.com.
A special commemoration took place at Fitzgerald Stadium to mark the 50th anniversary of the sudden passing of former Dr Crokes player, officer, and selector Tim (Timmy) Keogh.
All-Ireland winning Kerry and Dr Crokes manager Pat O’Shea unveiled a memorial plaque in honour of Mr Keogh, who died suddenly at the stadium on 24 May 1976 while watching the East Kerry Under-12 final between Dr Crokes and Legion.
Pat O’Shea, who played in that fixture as a nine-year-old, delivered a moving address reflecting on the tragedy and his memories of Killarney half a century ago. He described Mr Keogh as a dedicated family and community man who led the way for the Dr Crokes club.
O’Shea recalled how the match was halted and the young players were brought into the dressing rooms, leaving an indelible mark on the town. He also paid tribute to Mr Keogh’s late wife, Kathleen, and noted the bittersweet memory of neighbours and Legion icons Weeshie Fogarty and Johnny Culloty rushing to his aid on the sideline.
Speaking on behalf of the family, Eamonn Keogh detailed his father’s extensive contribution to the black and amber. Timmy Keogh served as club treasurer through the 1950s and 1960s alongside Donie Sheahan and Michael O’Connor, and was a selector for the famous Dr Crokes senior team that won seven consecutive O’Donoghue Cups between 1956 and 1962.
Eamonn thanked Fitzgerald Stadium Chairman Der Brosnan and his committee for permission to erect the monument. He welcomed members of the Keogh, Fogarty, Culloty, and Randles families, alongside several players from the 1976 under-12 panel and MC Denis Coleman.
Eamonn paid tribute to Pat O’Shea’s legendary status in the GAA, noting he remains one of only five managers to win both an All-Ireland senior inter-county championship and a senior club title.
Fr Tom Looney spoke of receiving the tragic news via a letter from his mother while serving in Peru 50 years ago, praising Mr Keogh’s legacy with Dr Crokes and local employer Hilliards. Fr Tom performed a blessing alongside Franciscan Friary Guardian Br Pat Lynch and Fr Billy Hoyne.
The commemoration concluded with a musical performance of ‘Buachaill ón Éirne’ and ‘The Parting Glass’ by Timmy’s son, Don Keogh, on concertina, and his cousin, Máire Breathnach, on guitar.
The large attendance included Mayor of Killarney Martin Grady, Kerry GAA Chairman Patrick O’Sullivan, East Kerry Board officials Dermot O’Connor and Noel Kennedy, Dr Crokes President Jackie Looney, Chairman Eoin Brosnan, and Juvenile Chairman David Byrne.
Two young local girls showed great business initiative on Saturday ahead of the Kerry v Donegal match at Fitzgerald Stadium.
Erin McSweeney and Jessie Doolin set up a sweet stall outside a house on Lewis Road, catching the thousands of football fans walking towards the grounds.
The enterprising pair did a busy trade selling soft drinks, sweets, and chocolates to the passing crowds before throw-in.
Their match-day venture also caught the attention of the national sports media, with a photograph of the girls at their stall captured by Sportsfile photographer Stephen McCarthy ahead of the game.
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