Do you have a life insurance policy and are hesitating between several types of funds and account units to boost its performance? Should you secure and keep your money accessible via a fund in euros? Or invest a part in a family of funds still little known, combining performance and security, the eurocroissance funds?
Growth or eurocroissance funds are gaining ground within life insurance contracts. Faced with the loss of momentum of the star support, the fund in euros, these funds, which have existed for almost ten years, are more and more often offered by insurers. The outstanding amount of the eurocroissance range has moreover increase of 37% between 2020 and 2021 from 3.3 to 4.6 billion euros. But what are they worth? And were you really interested in favoring them over classic euro funds?
The eurocroissance fund, what is it?
Created in 2014, the eurocroissance fund is a category of funds accessible in multi-support life insurance contracts. Eurocroissance offers a 100% capital guarantee which comes into effect at the end of a fixed chance of at least 8 years. Subtlety of importance: it is necessary to differentiate eurogrowth from growth fund who are subject a partial guarantee, minimum 80% chance.
obviously the due date does not mean that the capital is blocked. The saver may at any time recover but does not benefit from any guarantee in the event of early withdrawal. The amount withdrawn depends only on the valuation eurocroissance fund or growth fund on the withdrawal date.
You have a capital guarantee but not on a day-to-day basis
With the growth fund, you invest in a fund where you have a capital guarantee, not daily but at the end of a period. If you want to recover your money you can, it is not blocked. On the other hand, you get it back at the net asset value, confirms Stellane Cohen, president of Altaprofits.
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Insurers have been offering for a few years a majority of growth funds. As you will have understood, unlike the fund in euros which protects all of your capital at any time, the growth fund commits you to a potential loss of the savings invested… but with a safety net, provided to maintain your investment over ten years.
In 10 or 15 years, you will have outperformed the fund in euros. It’s a certainty.
We waives the capital guarantee any time in any way hope for a higher return and a generally partial guarantee at the end, says Gilles Belloir, director of Placement-direct.fr. Growth funds have existed in different forms for many years with terms that have varied over time. [Jusqu’ prsent] growth funds did not benefit from a favorable market environment. Given the level of interest rates when they were created, insurers were often unable to commit to a full capital guarantee at maturity. The current rate rebound is a game-changer. And with an influx of payments, growth and eurocroissance funds can diversify their investments… with the hope of significant returns in the medium term.
Higher term performance
But, if my capital can be partly lost, what is the interest for me, saver? Like the units of account in your life insurance policy, which are more risky but potentially more profitable, the performance of your growth fund will most certainly be superior to that of your fund in euros. When in 2021, the euro funds report on average 1.30%the returns of eurocroissance and growth funds averaged 2.80% according to figures from France Assureurs.
Life insurance: why eurocroissance outperforms euro funds
An opinion shared by Stellane Cohen: I’m not sure that all the funds in euros on the market will have an upturn in terms of yield in 2022. The Growth Fund has a long-term investment horizon and can offer a higher return at maturity than euro funds. If you make 3% net annualis for 15 years, not bad. Funds in euros have not given over the past 15 years, analyzes Stellane Cohen.
| Fund (and insurer) | Performance 2020 | Performance 2021 |
|---|---|---|
| Growth Allocation Long Term (Spirica) | – | 4.88% |
| G Growth 2014 (Generali) | 3.72% | 3.21% |
| Agipi eurocroissance (Axa France) | 3.10% | 3.10% |
| G Growth 2020 (Generali) | – | 3.01% |
| Growth Fund (Axa France) | 2.60% | 3% |
| Eurocroissance Project/Retirement (BNP Paribas Cardif) | 0.27% | 2.51% |
| Eurocroissance Patrimoine (BNP Paribas Cardif) | -1.18% | 1.30% |
| Afer eurocroissance (Abeille Assurances, formerly Aviva) | 2.42% | -0.14% |
Performance net of contract management fees.
Sources: communications from insurers and Goodvalueformoney.eu
Funds in euros could be used at a rate of 2% in 2022 if insurers dig into their reserves. What less reduce the gap between these funds and the booklet A, adds the director of Altaprofits.
Should we now prefer the Livret A to life insurance?
Structured funds, a close alternative to eurocroissance funds?
If growth or eurocroissance funds do not appeal to you, other vehicles in the unit-linked category, such as structured funds, have similar characteristics. Like eurocroissance funds, structured funds have an investment period known in advance and a partially guaranteed capital. These products are generally consisting partly of a bond component, in order to guarantee the maturity of the capital invested and of a component in risky products whose value is based on the performance of a benchmark financial index (Euro Stoxx 50, CAC 40…) . The product is a little complex but it allows to consider a guarantee of the capital invested term and a return around 5%, explains Gilles Belloir.
Structured products: too enticing promises?
So who should advise a support from the eurocroissance family? Looking for a capital guarantee at term is not relevant for all savers, it all depends on his profile, adds Gilles Belloir. The saver must first become familiar with the characteristics of the support, to see if it suits him. The saver must have aware that he will have no capital guarantee before the term and that this is generally gross of fees [cela signifie que les frais peuvent roger votre capital, NDLR]. So the saver might get back a little less.
What you must remember
- What capital guarantee? With a fund in euros, the money invested can be recovered at any time, without loss. With eurocroissance, you have to wait at least 8 years to be sure of recovering your bet: before this chance, if the value of the fund has fallen, you lose part of your bet. Finally, with growth funds, a variation of eurocroissance, you are only guaranteed to recover part of your capital, in any case… but this risk-taking can prove to be profitable in the long term.
- Are eurocroissance funds profitable? Impossible to read the future but, over several years, they should at least (and largely) beat the funds in euros.
- Do you absolutely have to choose? The families of life insurance funds are complementary. You can play the security of the fund in euros with part of your life insurance, bet on the medium or long term with eurocroissance on another part, and finally try taking unit-linked risks to seek performance. financial.
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