IRIS
Individual Retirement
Investment Strategy
Contents
IRIS at a Glance.................................................................................................................... 1
A Lifestyle Investment Strategy........................................................................................... 2
Introducing IRIS.................................................................................................................... 4
• A straightforward approach to retirement planning
• IRIS follows three key principles
• Active fund management
• About State Street Global Advisors (SSgA)
IRIS in Action........................................................................................................................ 6
The Target Return Strategy.................................................................................................. 8
Overview of IRIS Asset Classes........................................................................................... 9
IRIS at a Glance
Aim
To grow and safeguard a pension investor’s retirement savings based on their
expected year of retirement.
Suitability
Suitable for pensions investors who want to take a retirement lump sum and
purchase an income for life. If you plan on investing in an Approved Retirement
Fund (ARF) at retirement you can invest in IRIS and then review your position about
5 years from retirement.
Style
Actively managed.
Managed by
State Street Global Advisors (SSgA) - a global leader in asset management.
Asset mix
Equities, property, bonds, cash and alternative assets.
The mix varies depending on market conditions and the investor’s term to
retirement. The longer the term to retirement, the higher the proportion invested
in equities and other assets which offer greater growth potential. As the term to
retirement reduces, the equity content is reduced and the cash and bond content
is increased.
Risk rating
Lifestyle
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this fund you may lose some or all of the money you invest.
Warning: This fund may be affected by changes in currency exchange rates.
Page 1
A Lifestyle Investment Strategy
A recognised approach to
retirement planning
A Lifestyle Investment Strategy is an investment strategy that is specifically designed for pension
investors.
This strategy recognises the fact that your investment needs will be different depending on your term
to retirement. It is designed to match these changing needs by automatically targeting the most
appropriate level of risk - a higher level of risk when you are far from retirement and want to grow your
fund, and a lower level of risk as you near retirement and want to safeguard your fund.
The IRIS Retirement Fund (IRIS) follows Bank of Ireland Life’s Lifestyle investment strategy. The chart
on page 6 shows how IRIS de-risks as you move towards retirement.
START
Early career
Page 2
BUILD
Mid career
Pension Journey
Career Path
Start
Early career
BUILD
Mid career
Consolidate
Late career
Retire
Retirement
CONSOLIDATE
RETIRE
Late career
Retirement
Page 3
Introducing IRIS
A Straightforward Approach to Retirement Planning
Saving for retirement can be a complicated process. It can involve a lot of choices and decisions:
• How much should I invest in stock markets?
• Will my investment have time to recover if markets fall?
• Is now a good time to invest?
• Should I switch into a different fund as my retirement date approaches?
With IRIS you invest in one fund which automatically manages these issues for you.
IRIS Follows Three Key Principles
1.You can stay in the same fund
Many investment strategies work by moving you from fund to fund over time, possibly as often as
every month. Our IRIS lifestyle investment strategy is different. You invest in just one fund which is
based on your expected year of retirement. Any switching or movement in and out of different types
of assets happens within this fund.
2.When you are far from retirement you can afford to take some investment risk
When you are investing for a very long time (15 years or more), you can focus on growth. If the
value of your investment falls due to short term market fluctuations, you should have plenty of time
for it to recover. When you are far from retirement IRIS automatically invests more of your money in
assets which offer greater growth potential – such as equities – to try to generate long term growth.
3.When you are close to retirement you need to preserve the purchasing power of your
savings
As you approach your expected retirement date, you cannot afford to take much risk with the value
of your investment. If your fund falls in value, it may not have enough time to recover. You also need
to begin planning for your retirement and this can only be done if you have some certainty about
the pension income you will receive each month. Close to retirement, IRIS automatically invests in
assets with the aim of safeguarding the income and lump sum you can take at retirement.
Page 4
Active Fund Management
Investment funds can be managed on either an active or passive basis.
IRIS is actively managed by State Street Global Advisors (SSgA). Active management means that
SSgA use their expertise and experience to select the most suitable assets, within agreed limits. For
example SSgA select the equities to invest in, manage the fund’s investments in commercial property,
and decide which countries’ government bonds to invest in. These investment decisions are based on
analytical research and forecasting as well as SSgA’s skill, experience and expertise.
The Target Return Strategy element of IRIS (see page 8) is a unique asset mix within IRIS that seeks
to achieve a defined target return of at least 4% per annum over cash (1-month EURIBOR), in the
medium to long term. This element of IRIS allows SSgA even greater flexibility to choose between
asset classes, regions and a wide range of investments to potentially reduce volatility and manage risk
while seeking to achieve its target return.
About State Street Global Advisors (SSgA)
• State Street Global Advisors (SSgA) is a leading global investment manager with over €1.9 trillion in
assets under management (as at 30.09.2014)
• SSgA has 29 offices worldwide including 9 global investment centres (one of which is in Dublin)
• SSgA’s investment team is made up of 400 investment professionals backed by a 24 hour trading
platform
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this fund you may lose some or all of the money you invest.
Warning: This fund may be affected by changes in currency exchange rates.
Page 5
IRIS In Action
The chart below illustrates how IRIS de-risks as you move towards retirement. The de-risking
during each year is actively managed by SSgA.
15+ Years to Retirement
15 Years to Retirement
15 years
14 years
13 years
12 years
11 years
10 Years to Retirement
10 years
9 years
8 years
7 years
6 years
5 Years to Retirement
5 years
4 years
3 years
2 years
1 year
At Retirement
n Equities
n Property
n Target Return Strategy
n Corporate bonds
Page 6
n Government bonds
n Long dated bonds
n Cash
With 15 years or more to retirement IRIS aims to maximise growth, investing mainly in
equities and in the Target Return Strategy (a breakdown of the Target Return Strategy is
shown on page 8).
From 15 years to retirement IRIS starts to gradually de-risk, decreasing its weighting in
equities and increasing its holding in bonds.
Between 10 and 5 years from retirement the rate at which equities are replaced by bonds
increases.
As you get close to retirement IRIS continues to de-risk, increasing its allocation to cash
and long-dated bonds.
At retirement IRIS is invested in long-dated bonds and cash. You can then use your fund
to take a retirement lump sum and purchase an annuity to provide you with an income in
retirement.
Note: The figures shown in the chart are approximate values only and may be subject to change in the future.
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this fund you may lose some or all of the money you invest.
Warning: This fund may be affected by changes in currency exchange rates.
Page 7
The Target Return Strategy
Over the long term IRIS aims to grow and then safeguard your retirement savings, while in the shorter
term it is designed to respond tactically to changes in market conditions. The Target Return Strategy is
the core way in which IRIS actively manages and responds to changes in short term market conditions.
This Target Return Strategy allows SSgA to:
• Invest in a wide range of asset classes
• Substantially change the asset mix depending on their assessment of risks and expected returns
• Take advantage of investment opportunities and reduce investment risks
The Target Return Strategy element of IRIS aims to earn an annual return of at least 4% over cash
(1-month EURIBOR) in the medium to long term.
IRIS Glide Path 15+ Years to Retirement
Target Return Strategy
The chart below shows the Target Return Strategy holdings as at 30 November 2014. Bank of Ireland
Life in conjunction with SSgA may change the asset classes and weightings to reflect changing
market conditions.
Target Return Strategy Holdings
Asset Class
Equities (13.5%)
Government Bonds (1.9%)
Corporate Bonds (25%)
Commodities (0.0%)
Cash (57%)
Emerging Market Equity (1.0%)
High Yield Bonds (0.5%)
Property (1.0%)
Holdings 0% 10%20%30%40%50%60%
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this fund you may lose some or all of the money you invest.
Warning: This fund may be affected by changes in currency exchange rates.
Page 8
Overview of IRIS Asset Classes
Equities
Equities are shares in companies listed on stock markets.
IRIS invests in an actively managed portfolio of global equities. Equities can provide a high rate of
return, and although at times they will underperform other assets it is expected that on average
over the long term they will provide a higher rate of return than lower risk assets.
IRIS Target Return Strategy
The Target Return Strategy is a unique mix of asset classes which aims to earn an annual return
of at least 4% over cash (1-month EURIBOR) in the medium to long term. This element of IRIS
allows SSgA even greater flexibility to choose between asset classes, regions and a wide range
of investments to potentially reduce volatility and manage risk while seeking to achieve its target
return.
Property
Property can include office, retail, industrial and other real estate assets.
IRIS invests in a portfolio of prime commercial properties primarily located in Ireland, the UK and
mainland Europe.
As a long term investment, property can potentially provide a higher rate of return than lower risk
assets and offers diversification from equities.
Corporate Bonds
Corporate bonds are debts issued by companies and listed on stock exchanges. IRIS invests
primarily in Euro-denominated corporate bonds but may also invest in other corporate bonds in the
future.
Corporate bonds typically have short terms and in general they offer less risk than stocks.
Government Bonds
IRIS invests in high quality Eurozone bonds and may also invest in non-Euro government bonds.
Government bonds have historically been considerably less volatile than equities.
Long Dated Bonds
IRIS invests in long-dated Eurozone government bonds. These bonds will typically have a longer
term to maturity than other government bonds.
IRIS invests in Eurozone bonds with the aim of safeguarding the income you can take at retirement.
Cash
IRIS aims to have 25% of the fund in cash at retirement to pay out the retirement lump sum. The
cash element of IRIS invests in cash deposits and other money market instruments.
Page 9
It is important to note that the lifestyle investment strategy may be reviewed in the future and may
change.
Warning: This fund may be affected by changes in currency exchange rates.
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this fund you may lose some or all of the money you invest.
Please note that IRIS may use Exchange Traded Funds (ETFs) and other exchange traded products.
The use of these investments may incur additional costs.
Terms and conditions apply. While great care has been taken in its preparation, this document is of a
general nature and should not be relied on in relation to specific issues without appropriate financial,
insurance, investment or other professional advice. The content of this document is for information
purposes only and does not constitute an offer or recommendation to buy or sell any investment or
to subscribe to any investment management or advisory service. Please note that mention of specific
stocks/shares or investments is not a recommendation to trade in those stocks/shares or investments.
In the event of any changes in taxation or legislation, Bank of Ireland Life may amend the terms and
conditions of the relevant contract to take account of any such changes. The details shown above
relating to this fund and its composition are as at the date of this document and may change over
time. If there is any conflict between this document and the policy conditions, the policy conditions will
apply.
State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland. Incorporated
and registered in Ireland at 2 Park Place, Upper Hatch Street, Dublin 2. Registered number 145221.
Member of the Irish Association of Investment Managers.
Bank of Ireland Life is a trading name of New Ireland Assurance Company plc.
New Ireland Assurance Company plc trading as Bank of Ireland Life is regulated by the Central Bank
of Ireland. Bank of Ireland Insurance & Investments Limited is regulated by the Central Bank of Ireland.
Bank of Ireland Insurance & Investments Limited is a tied agent of New Ireland Assurance Company
plc. Members of Bank of Ireland Group.
January 2015
1890 309 309†
fundcentre.bankofireland.com
www.bankofireland.com
†
To improve our service to you, calls may be recorded. 502514 V2.01.15