If you are interested in seeing which were the best Investments in Ireland in 2022 and 2023, you have come to the right place. This week on Ireland’s award-winning (it’s a few years ago I know!) Blog, I will outline quickly and effectively which have been the best investment routes for Irish investors.

I will analyse two very different investment approaches; one a middle of the road insurance company approach, the other an aggressive multi-national fund manager approach. And before I delve, I want you to consider what you believe the meaning of ‘best investment’ is!?

Depending on your perspective it could be any of the following;

• Least volatile
• Lowest cost
• Most transparent
• Highest returns
• Most diversified
• Most volatile

What I want to put-forward is the concept that the best investment, within the context of long term retirement income planning, is the investment with highest probability of long term returns to enable you enjoy an ever-increasing and sustainable retirement income. End of.

When it comes to investing the core of your long term retirement assets, you have a few obvious choices, individual stocks either yourself or by a Discretionary Manager, insurance company fund ranges, or index fund ETFs via a platform. There are many different pros and cons of each, which we’ll save for another day, today is a high level reintroduction of our blog in 2024!

How did the latter two fare in the past 2 years? Lets see shall we;

Middle-Of-The-Road Multi-Asset Funds From Insurance Companies 2022 and 2023

They are the most popular investment in Ireland, but are they the best investments in Ireland!? I have written about middle of the road funds before, and sadly not much has changed since.

2022 was a tough year for equities and Bonds, with both falling fairly substantially. Middle of the road insurance company products fell by c10 to 13% in the year, which wasn’t awfully bad for investors, but these are meant to be fairly conservative, so it wasn’t great either! Picking a selection of 4 similar and widely used products;

Irish Life MAPS 4: -10%

Aviva Multi-Index 3: -12%

Standard Life MyFolio Market 2: -13%

Zurich Primsa 4: -13%

But 2023 was a better year for Equities and Bonds so it recovered, but given that they are middle of the road funds, they didn’t get the full bounce that a more aggressive portfolio would.

Irish Life MAPS 4: +9%

Aviva Multi-Index 3: +5%

Standard Life MyFolio Market 2: +9%

Zurich Primsa 4: +13%

So, 2022 was negative and 2023 was positive, how did an investor who was in on January 1st 2022 do by the time 31st December 2023 came around?

‘Best’ of this bunch was Zurich with being -1.6% overall

Irish Life -2%

Standard Life -5%

Aviva -7%

And bear in mind that these are all investment products that have the same target audience of people who are looking for something ‘not too risky but not too conservative’ and that would answer a risk questionnaire in a similar fashion, and be recommended these products as a result.

So you were invested in a fund that was meant to be cautious and middle of the road (you probably paid c2% in fees- that’s for another day!), you had 1 bad year and 1 decent year but overall you are still down on what you invested.

Equity Index ETF Funds via Platform of 2022 and 2023

Lets turn our attention to another form of retirement asset investment now, one which is considered higher ‘risk’ and more volatile, which will also be focused on investments in equity as opposed to defensive assets such as bonds, cash or alternatives.

2022 was a bad year as we said already, so here are the 2022 returns for 3 popular index funds available via platforms in Ireland;

Dimensional Global Core -9.7%

Blackrock iShares Developed World -12.8%

Vanguard Global Stock -12.8%

Considering that these are not defensive in any way, the 2022 performance was not terrible (you would expect and welcome declines of this sort readily as an equity investor) but it was a negative year for equity investing overall, which is never fun.

Even using the law of averages, the probability was always going to be that 2023 would be a better year for equity, even in the face of all that was going on at the time, and continues to go on. That transpired to be the case;

Dimensional Global Core +15%

Blackrock iShares Developed World +18%

Vanguard Global Stock +19%

So, 2022 was negative and 2023 was positive, how did an investor who was in on January 1st 2022 do by the time 31st December 2023 came around?

Dimensional Global Core +4%

Blackrock iShares Developed World +3%

Vanguard Global Stock +4%

Over the 2 years invested in growth-oriented ETFs, you are winning. You are not winning by 10% per year in that timeframe, but that is just a single 2 year timeframe. The point being that you achieve a risk premium by fully investing these assets over that timeframe, while you are losing money by investing in a middle-of-the-road insurance product.

If you had an ARF of €1m on 1/1/2022 invested in middle-of-the-road products, you would be between €70k and €120k better-off today had you been in a more growth-oriented approach (before we factor in lower fees). Fact.

Paddy Delaney

Stretch that example out over the long term and you have a perfect picture of the following conclusions:

-middle of the road products don’t achieve the returns

-middle of the road products don’t help you avoid loss

There is only 1 route that I believe should be used by the vast majority of investors for the core of their retirement income assets, and it is not sitting in the middle of the road.

Best Investments of 2022 and 2023 in Ireland Conclusion

2 years is too short a period of time on which to draw a conclusion for long term investing, but it paints perfectly the variance in returns that are being achieved by investors, many of whom will have the same preferences, up and down this small country of ours.

But how many people are aware of this variance, of the choices they have, and of the opportunities that are available to investors like you and I. That’s what bothers and ultimately motivates me.

I hope this piece will help some,

Paddy Delaney QFA RPA APA