Where you put your money can make a big, big difference. For this review, three investments are explored.
Fund analysis covers the period 25/01/2023 – 25/01/2024
Following a very tough 2022, 2023 was generally a recovery year. But some investments recovered far better than others. Here are the numbers:
+ 2.14% – Buyout Bond
+ 4.12% – PRSA
+ 18.14% – ETF
What is interesting about the Buyout Bond is it includes a good spread of investments in both type and location. In theory, it was constructed to offer better fund growth potential than a standard PRSA. But it has done poorly. In fact, it has underperformed the PRSA significantly, even though PRSA investment options are generally restricted.
The fact the Buyout Bond missed out on the broad market recovery and growth in 2023 is of great concern. So too is the fact the Buyout Bond failed to offer insulation to a fall in value in 2022. On that basis, it is a BIG DAMP SQUID!
That said, the PRSA has proven to be resilient. Its market growth has kept up with inflation so on that basis, it deserves a BIG PAT ON THE BACK!
But the real magic took place in the ETF. It grew a whopping 18.14%. The underlying funds are all passively managed, but its index-linked so a lot of the growth comes from some of the biggest and best stocks on the market at present.
For anyone looking to invest, it pays to understand the nature, makeup, spread and cost of the investments before they part with their money.
Frank Conway is a Qualified Financial Adviser and Founder of MoneyWhizz.