Irish Life Indexed European Gilts Fund

The Indexed European Gilts Fund concentrates on medium-term Eurozone government gilts. These are fixed-interest bonds issued by governments, and in this fund they usually have five years or more left to run. The fund is focused on bonds from countries such as France, Italy, Germany, Spain and the Netherlands, among others.

The Indexed European Gilts Fund aims to perform in line with the Merrill Lynch EMU Government > 5 year index. It uses a passive investment style, which means it is designed to follow the benchmark rather than try to beat it through active stock or bond picking. The underlying investment manager is Irish Life Investment Managers.

The Indexed European Gilts Fund may suit investors who want exposure to medium-term Eurozone government bonds and prefer a passive approach. It is designed for people looking for returns that broadly move with the Merrill Lynch EMU Government > 5 year index. Because it invests in bonds, its value will still move with interest-rate and government-bond market conditions; interest-rate risk means bond prices can fall when market rates rise.

The Indexed European Gilts Fund carries the usual risks of investing in government bonds, including interest-rate risk and market risk. It also has some securities lending activity, which can increase risk even though it may help generate extra return. Securities lending means the fund temporarily lends out securities to another party, which adds some risk if the borrower does not return them as expected.

Yes, the Indexed European Gilts Fund may use securities lending to try to earn additional return for the fund. This can support performance, but it also increases the level of risk within the fund. Securities lending means the fund lends assets to another party for a fee, and that creates some exposure to the borrower not meeting its obligations.