INVESTMENTS

Looking to explore options for your money?                                                                       Investment Update 2024.01.29

Investment Options

Lump Sums and Regular Premium Investment

There are many reasons why people invest money >

• To grow a lump sum which may be savings, sale of an asset, a gift, etc.
• To provide a lump sum for a future need, house deposit, family event, children's education, etc.
• To provide for Capital Acquisition Tax (CAT) where a gift is planned in the future. This type of investment has to be regular premium for a minimum period.
• Regular investment for gifting. This can be set up to avail of the small gift exemption. Specific conditions apply.

             Whatever your reason, contact me for advice and make an informed decision....

Investment for Business Funds

    Investment through a life insurance policy - an attractive option for business investment

• TAX - 25% Exit Tax where the policy owner is a company
  A deemed disposal exit tax applies on each 8th anniversary. This is deducted from any other taxable event such as, withdrawal, maturity, death, etc. The LIfe Insurance Company deducts and pays the exit tax.
• Close Company Surcharge - Investment while in the investment policy is exempt from close company surcharge.
  Gains paid out by the policy should be exempt from close company surcharge, provided it is not treated as income in the company accounts.
  The above should be confirmed with your tax adviser to ascertain that it applies to your particular circumstances.
• Both regular premium and lump sum investment are available
                                                                                                                   Find out more.........
   

Sustainable Investment
 

Sustainable investment relates to investment in companies that are changing the way they operate. The three elements are, Environment, Social, Governence. (ESG)

• Environmental:
  ‘Environmental’ is the strand of ESG which attracts most attention. It addresses an investment’s impact on the physical environment. At a time when climate change seems to be running out of control, the most pressing dimension of ‘E’ is of course greenhouse gas emissions and the quest for a zero-carbon world. But it should also embrace a much broader range of environmental issues –
  pollution of water, air and land, unsustainable use of scarce resources, habitat destruction, loss of biodiversity and so on.
• Social:
  ‘Social’ refers to impacts on people – employees, customers, suppliers, and those living near to a company’s operations. Many of the goods we import from the developing world are made by workers whose pay and conditions are shockingly poor by our standards. Many businesses lack diversity among staff, and may be guilty of discrimination on grounds of race, gender or age. The ‘gig’ economy, where service workers have low earnings and uncertain conditions under the guise of being self-employed contractors.
• Governance:
  ‘Governance’ asks the question ‘Is the company run in a way which is fair and just, conducive to good decision-making, and has proper regard to
  the interests of external investors' Governance failures include, executive reward packages, dominance by an insider shareholder, classes of shares with unequal voting rights, inadequate reporting, imbalanced board composition, and excessively long tenures by directors and chief executives.

Is ESG Likely To Mean Better Returns?
It may seem obvious that well-run companies which behave well towards their staff, suppliers and customers and do not damage the environment should perform better over the longer term. Past evidence in this regard is mixed. The industries on the wrong side of the trend, such as fossil fuel producers, will see higher costs, disappearing markets and progressive curtailment of their activities. This can work in two ways - the more unpopular the ‘bad’ companies become, the further their valuations will sink, and (a) might offer quite attractive returns for the few investors still willing to embrace them or (b) they might go out of business. The tobacco industry has provided stellar returns over the many years since it first fell from favour.
In short, it would not be prudent to invest on the basis that better returns are likely.

Will ESG Investing Lower Risk?
There is a greater basis for expecting ESG compliant companies to be less risky. Some of the highest profile share price collapses of recent times have been associated with corporate wrongdoing. In 2015, Volkswagen AG shares halved in the wake of the ‘Diesel-gate’ scandal, which brought a total cost to the company in excess of €30bn. Looking to the future, investing though an ESG filter should help avoid those businesses which could lose most in the transition to a zero-carbon world. That is not to say that risk reduction through ESG is guaranteed. A high concentration in a small number of companies and sectors and the favouring of investments can lead to expensive shares.
 

Options for Sustainable Investment

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Firstly, I do not consider any sustainability risks when providing investment advice - please see my SFDR Statement
The main reason for this is the scale of the business. Also, all the investment providers that I use consider sustainability in their investment process and some provide Article 8 and Article 9 funds.

• When receiving investment advice, you will be provided with sustainability information and requested to make choices. You can decline any choices, you can choose various proportions of your investment to be invested under three main aspects of sustainability or you can define other choices.
• The main choices available through insurance based investmemnt products is ESG investment under Article 8 or Article 9 funds. Other aspects of sustainability, alignment with the EU Taxonomy classification or investments that consider Principal Adverse Impacts on sustainability, are limited by available data. This is may change over time. 

Fund Options:

• Article 9 Funds - The fund has sustainable investment as its primary objective, commonly known as ‘Dark Green’
• Articel 8 Funds - The fund promotes sustainability characteristics, among other characteristics, commonly known as 'Light Green'. 
• Article 6 Funds - all other funds. The fund does not claim any sustainability or ESG characteristics. However, this does not mean that sustainability has not been considered. In fact the insurance companies/investment providers that I use consider sustainability in their investment process. This means that, they will look at what they believe to be good investment choices, based on standard investment criteria, and if there is a sustainable choice, they will choose this. 

A Word of Caution – You May Be Surprised
The fact that a fund is classified as Light Green (Article 8) or Dark Green (Article 9) does not necessarily mean that it will meet every investor’s
reasonable expectations. Such funds may own companies involved in fossil fuel extraction or other activities which are damaging the planet - or which
have come up substantially short under one or even a number of other ESG criteria. In the first instance this is because many fund managers use systems of ratings which assess companies within the sector in which they operate; a sector-based approach leads, inevitably, to the ownership of the ‘least bad’ companies in all sectors including those which might be considered completely out of bounds, such as Energy, which is dominated by the big oil companies. So, a fund which you believe to be ‘green’ could own large oil companies and such. The use of overall ratings based on scores derived separately under ‘E’, ‘S’ and ‘G’ can also lead to the inclusion of companies which surprise and disappoint investors. For example, a company which has failed badly under ‘G’ could have scored highly under ‘E’ and ‘S’ – with the total score being quite good.

Warning: If you invest in these products, you may lose some or all of the money you invest
Warning: The value of your investment may go down as well as up
Warning: Returns may be affected by changes in currency exchange rates