A background to Indexation

Irish Life Investment Managers (ILIM) is part of the Irish Life & Permanent Group (IL&P) a leading provider of financial services in Ireland. IL&P was formed as a result of the merger, in 1999, of Irish Life plc and Irish Permanent plc and has a heritage older than the Irish State. With assets in excess of €74.8bn and funds under management in excess of in excess of €30bn IL&P is one of the top 10 insurance groups in Europe.

ILIM is the fund management / asset management division of the IL&P Group and is responsible for the investment decisions relating to all funds under management. Irish Life was the 1st to introduce indexation as an investment management process to Ireland in 1996 and since then has been the leader in investment product innovation in Ireland.

One of ILIM's core areas of expertise is our in-house indexation process. From a standing start in 1996 funds under management using this process are now in excess of €16.9bn. Our indexation process, and in particular our efficiency at trading which is continually measured against other global indexation managers and are consistently classified as top quartile.

Indexation as a method of pension fund management has become very popular for Defined Contribution pension plans where members carry the investment risk. With the growth of Defined Contribution pension plans Trustees are constantly looking for way of providing consistent performance relative to various benchmarks. ILIM has delivered on this expectation consistently over the past 10 years and we currently manage indexed portfolios for over 500 DC clients with benchmarks chosen according to our clients' needs.

Indexation - ILIM's Experience

ILIM first introduced indexation to the Irish market in 1996 and is the market leader in the indexation business. ILIM is also the only manager in Ireland managing this process in-house and this expertise built up over the past 10 years means that we can compete successfully with the best global indexation managers.

Clients choose indexation as a strategic investment process to reduce asset allocation and stock selection risk and therefore to avoid the volatility often experienced with active fund management.

Indexation - How it works

An indexed fund delivers the market return in each market. This is achieved by replicating the index of shares for each country/territory. This ensures we deliver the investment returns of that country. For equities, ILIM tracks the FTSE World series of indices. For bonds, we track the Merrill Lynch series of indices.