Irish Life Indexed Euro Short Dated Bond

The Indexed Euro Short Dated Bond Fund invests in short-dated government bonds issued in euros. Its holdings are spread across eurozone countries including France, Germany, Italy, Spain, Austria, Belgium, the Netherlands, Portugal and Ireland, as well as other euro government issuers. The fund is designed to be a bond investment rather than a cash or equity fund.

The Indexed Euro Short Dated Bond Fund aims to perform in line with the Merrill Lynch EMU Government 1-5 year index. It uses a passive style, meaning it seeks to track the benchmark rather than actively pick securities. The fund also states that it aims to achieve consistently higher returns than cash.

The Indexed Euro Short Dated Bond Fund is managed by Irish Life Investment Managers as the underlying investment manager. The fund's approach is index-based, so the manager's role is mainly to keep the portfolio aligned with the Merrill Lynch EMU Government 1-5 year index. This may appeal to investors looking for a straightforward government bond exposure.

The Indexed Euro Short Dated Bond Fund carries bond-market risk and also uses securities lending, which can increase the level of risk in the fund. Securities lending means the fund temporarily lends securities to try to earn extra return, but this can add risk if the borrower does not return them as expected. Because the fund invests in short-dated government bonds, it is focused on relatively lower-risk bonds, but it is still not a cash deposit.

The Indexed Euro Short Dated Bond Fund is designed to seek returns above cash while keeping a short-dated government bond profile. It may suit investors who want euro government bond exposure with relatively short maturities and a passive index-tracking approach. The fund is not guaranteed to beat cash, but its stated aim is to do so over time.