August Fund of the Month - Irish Life Core Fund

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The Irish Life Core Fund was launched this summer with the aim of offering investors a new type of fund for a very changed investment landscape.

Background  

 
The effects of the credit crunch on stock markets and on investment funds has made many people nervous about investing.  Funds remain with banks on deposit earning very low rates of interest while markets continue to fluctuate depending on the latest economic news. 
 
Irish Life has developed a new fund which aims to remove some of the uncertainty from investing and aims to give investors a smoother investment journey than a typical traditional Managed Fund over the long term.  During market downturns the fund should have lower volatility but it will still be in a position to capture growth during periods of positive returns.

Managed Fund by another name?

 
At a first glance, Core may appear to be a just another Managed Fund, but there are differences between it and traditional Managed Funds. Like a Managed Fund, Core consists of a blended mix of traditional assets such as equities and bonds, but also holds assets which are not found in a Managed Fund.
 
This is to  reduce the volatility of the fund.  To acheive this, a significant portion is invested in a mix of alternative assets which include assets such Managed Futures, Currency Funds.  Further diversification is achieve by investing in property, forestry and private equity. For liquidity purposes a small portion is held in Cash. Core is classed as a medium risk fund and is classified as risk category 4 on Irish Life's 7 point risk scale.  It is therefore not a guaranteed fund and does not offer any capital guarantee.
 

Rebalancing

Another feature not ususally found in a Managed Fund is the relalancing feature. The fund is rebalanced on a quarterly basis to maintain the target mix which was set in May 2010.  The current target mix is as follows:

• Equities 50%
• Bonds   25%
• Alternative 16%
• Property 7%
• Cash 2%

Rebalancing prevents the fund becoming over exposed to an asset following a sustained period of strong growth.
 
Core should be treated as it's name suggested, as a core fund of any investment porfolio surrounded by a range of satellite funds to provide further diversification and a higher growth potential.
 

Availability

Core is available on all Pension, Investment and Savings Plans with Irish Life.
For further details, please download the fund factsheet or contact us on 1890 299 299