Success of Bank of Ireland Life Financials Fund results in Phase 2 Launch

Today, 18th February 2008, Bank of Ireland Life is delighted to announce the launch of a second phase of its hugely successful Financials Fund. Since its initial launch last November, the fund which was open to retail investors for nine weeks, took in over €25 million in single premium investment.

With the stockmarket uncertainty persisting, the opportunity to capitalise on what the life company sees as a short-term investment play still exists. This coupled with phenomenal demand by investors has driven the launch of a second tranche of the fund.

The objective of the Financial Fund is to capitalise on the short-term opportunity created by recent stock market volatility within the global financial sector, enabling investors to acquire quality financial stocks at very attractive prices.

Global markets have experienced significant volatility in recent months, mainly due to global interest rate changes, concerns about the economic outlook in the US, and the issue of sub-prime lending.

The financial sector has been significantly affected, with stockmarkets becoming volatile as financial stocks became unpopular due to the possibility of exposure to the sub-prime loan issue. This becomes immediately apparent when analysis shows that quality financial stocks such as Bank of Ireland has experienced losses of 43% in its share price in just 12-months despite a predicted dividend yield of 7.4% in 2008.

Bernard Walsh, Head of Investments, Bank of Ireland Life commented on the opportunity that the Financials Fund presents investors, “The nature of stock markets is that shares are often over-sold or over-bought. Over the last number of months many financial shares have been over-sold and their prices currently reflect more bad news than actually exists in the market. In recent weeks, we have seen some of the biggest investors in the World take significant positions in financial companies. Strategic decisions such as these by canny investors should give us confidence in the opportunity that lies in this area.

We believe that the strong dividend yields and compelling valuations of many global financial stocks will encourage investors to take advantage of this opportunity in advance of the expected stockmarket recovery. The large reductions in interest rates by the US Federal Reserve in recent weeks should have a positive ripple effect on rate decisions by both the European Central Bank and the Bank of England. This will help improvements in customer sentiment and ultimately reduce stockmarket volatility. The inherent value we see in a number of select financial stocks, makes our Financials Fund a very attractive opportunity for the astute investor.”

The Financials Fund is aimed at experienced investors seeking growth, who are prepared to accept an element of risk. The minimum investment required to participate in the fund is €20,000 and the fund will close on 14th March 2008. Investors also have the option to invest in a Geared version of the Financials Fund, giving them the chance to maximise their exposure within the fund through borrowing. Further details are available on request from the Investment Adviser at your local Bank of Ireland branch.


Notes to Editors:

  • Bank of Ireland Asset Management Limited (BIAM) will actively manage the Bank of Ireland Life Financials Fund, although turnover in stocks is expected to be low.
  • BIAM will carefully time the initial investment into the stocks, selecting suitable international financial stocks with the best potential for growth at the time of investment.
  • The financial stocks held within the fund will meet the following criteria:
    • Primarily medium to large cap companies
    • Long term solid earnings profile
    • Strong domestic franchise
    • Sound dividend track record
    • Robust balance sheet
    • Offer value in relation to peers
  • To manage any exposure to currency fluctuations, hedging will be used with the intention to mitigate currency risk.
  • Encashments (full or partial) are not possible while the fund is invested
  • Investment time period of three years (with discretion to dissolve the fund in the event of achieving exceptional returns for investors in the early years)

For further information contact:
Laura Erskine
Public Relations Manager
Bank of Ireland Life
Ph. 01 617 2586
Mob. 086 856 2929