In This Issue:
[ Newsletter Summer 2010 | What have we been up to? | Supporting Sailing
Investment Market Update | Absolute Return Funds]

Welcome to the Summer Issue of our regular quarterly newsletter. I am now convinced that there is inverse correlation between sunshine in Ireland and stock market performance, as April – June were some of the driest months on record, and the stock markets fell back heavily from recovery highs. However, as the rain settles back in over the past week the markets have rallied very strongly again. Therefore I have some reason to be optimistic!

Certified Financial Planner (CFP®) Qualification
The Financial Planning Standards Board was established in Ireland in 2009 to set new higher standards for the provision of financial advice. It is an affiliate of a larger international body committed to high standards of technical competence, fair dealing and integrity through its Certified Financial Planner (CFP®) qualification. It is already established as a mark of quality for financial planners in the US and Australia. Financial advisors with this qualification are required to uphold extremely strict codes of conduct, and the highest standards of excellence and technical knowledge.

I am currently 2/3rds of the way towards this new qualification, by studying for the Graduate Diploma in Financial Planning, a 2 year part time course run by UCD School of Professional Finance. Once I have completed this I can go forward to final exams to attain the CFP® designation. There are no CFP® qualified advisors in Ireland at the moment, and the first group should qualify in May 2011. Out of 1500 financial advisory firms in Ireland, there are approximately 120 advisors doing the first set of graduate diploma exams, and it is expected there will be less than 50 who will qualify with the final CFP® designation. This course illustrates the commitment we have in Investwise to further improvement in our service, knowledge and standards of financial advice, and we hope you will be the beneficiaries of this hard work in the future.

Supporting Sailing
We are delighted to be able to offer support to two sailing events in Howth this summer. The first was the Dublin Match Race Open, which was successfully completed in May and forms part of the national match race tour. The event was won by Andrew Fowler and his team. We are also sponsoring the Laser SB3 National Championships, to be held in Howth in early September. This is the biggest 'One Design' sailing event in Ireland this year and we look forward to a competitive and exciting event.

The chart above shows the average 'Balanced Managed' fund performance for the past 12 months, from early July 2009. Balanced Managed funds are the typical fund offered by life assurance companies for pensions, and are very popular in particular for Group and Company pensions. (You will see further on in this newsletter some very good alternatives to these funds). This chart is probably more relevant to the average Irish investor than the S&P500 or ISEQ. 2009 ended with stock markets showing significant recoveries from the March 9th lows, but they still remain below the peak in the summer of 2007. In 2010, the markets in general have been very volatile, while trading within a range. The interesting periods to look at are the end of January and in May where markets dipped sharply. Markets are still extremely nervous, being particularly worried about the state of European government debt, and the overheating Chinese economy. With this in mind, we are expecting markets to continue to move up and down within a range for the next few months as good news and bad news stories compete for market attention.

[Read More Here]

With the success of the Standard Life Global Absolute Return Fund (commented on in previous newsletters) most of the other investment companies are chasing each other to come out with a competitive offering. Before I outline some basic details on each of them, it is worth re-visiting what these funds try to do. As I mentioned in my investment update, Balanced Managed Funds are traditionally the primary offering from life assurance companies and the ones most popular with large group pensions. As they are a crucial part of any life assurance company's business and therefore they are watched very closely. Investment performance is compared rigorously to that of competitors. Over the past 10 years in Ireland this has meant they tended to be very similar and pressures to match their peers led to some fundamental errors. All but one had far too much invested in Irish equities (some committing over 20% of the fund), as they could not afford to miss out on the strong performance during the Celtic Tiger, particularly from the banks. Setanta Asset Management (Canada Life) were they only ones to see the error in having so much invested in such a small concentrated stock market. A truly active managed fund should not take much notice of the activities of their peers and make there own investment decisions, and this is what the new wave of Absolute Return funds are trying to do.

[Read More Here]

Let me take this opportunity to thank you for your business and I look forward to assisting you over the coming months with your personal and business finances. In the meantime please feel free to contact me with any investment, pension, protection or lending queries you have.


Managing Director
David Quinn