How did the various employee savings investment vehicles perform last year? Unsurprisingly, defensive solutions invested in money market or bond products remained very disappointing due to the context of negative short rates, while diversified funds benefited from the sharp rise in stock markets, in particular the most dynamic profiles. Here is the detail of the performance according to the barometer of the human resources consulting group Mercer (167 funds analyzed):
Money market funds
Savers lost money with money market funds, which are essentially made up of very short-term debt issued by well-rated states and companies in the Euro Zone. The best performance is -0.44% and the worst -0.88% for a panel average of -0.58%
Short-term bond funds
Essentially made up of short-term debt (1 to 3 years), short-term bond funds are an alternative to money market funds. Here again, the 2021 performances were most often negative: they are between -1.08% and +0.52% with an average return of -0.41%.
Medium/long-term bond funds
Performance here ranges from -3.61% to +1.17% with an average of -1.95%.
Conservative Diversified Funds
Mercer recalls that a fund is considered diversified when it is invested in different classes of financial assets: stocks, bonds, monetary products or commodities. These funds with a cautious management profile were penalized by their bond portion with performances ranging from -1.05% to +7.58% for an average of +3.64%.
Balanced Diversified Funds
The higher exposure to equities in this category enabled performances of between +0.27% and +17.20% with an average of +9.51%.
Dynamic Diversified Funds
With an offensive approach mainly exposed to equities (on average 70%), these portfolios have of course captured a good part of the rise in the markets. The performance is therefore there: between +12.49% and +26.68% with an average of +17.76%. This still remains significantly below the evolution of an index like the CAC40, which increased by 30% in 2021 without counting dividends.
Europe/Eurozone equity funds
This category of equity funds is almost exclusively invested in equities (between 90% and 100% of assets). The 2021 performance is overall the best in this ranking: it varied 15.70% and 38.46% for an average of 24.21%.
International equity funds
This category performed less than the previous one due to the more or less strong exposure of the funds to emerging markets. In the end, it comes out between 5.30% and 36.81%, for an average of 22.82%.
Equity fund PEA-PME
Focused on French small caps, this category is doing quite well: between 12.41% and 32.04% for an average of 21.57%.
Too many supports with disappointing performance
Mercer points out that the investment solutions offered are rarely innovative and notes that many plans are still mainly invested in vehicles with disappointing performance due to a lack of communication and review. Mercer France has therefore chosen to launch this annual barometer to give companies the opportunity to compare and analyze their investment vehicles each year.
The unlisted is missing
Knowing that the financial outlook for 2022 has deteriorated sharply due to the resurgence of inflation, the prospect of a rise in key rates and now the war in Ukraine, Mercer believes that infrastructure financing, Debt of unlisted companies or even unlisted real estate are tools particularly suited to this context. The problem is that these less liquid asset classes are currently only very poorly represented in retirement savings and employee savings schemes. Innovations in this area would therefore be welcome!