Securities investment vehicles, units of account in life insurance contracts are on the rise. The variety of assets in which they allow investment offer a good complement to euro funds whose performance has been limited for several years by low bond interest rates.
In the family of life insurance contracts, there are two major sub-families of investment vehicles: funds in euros, on the one hand, and units of account (UC)* on the other. The former, which are a French singularity, have the particularity of guaranteeing the capital invested by savers.
Consisting mainly of government bonds, funds in euros constitute the “safe pocket” of life insurance contracts, but their yield is limited by the low bond interest rates: in 2021, according to France Assureurs, the performance average of these supports in life insurance contracts remained limited to 1.3%, stable compared to 2020.
In this context, units of account are gaining more and more interest from savers: these investments are riskier, because their capital is not guaranteed, but also potentially more profitable thanks to their long-term performance and the high diversity of underlying assets in which to invest.
What are units of account?
In concrete terms, units of account (UC) are investment vehicles, denominated in units or shares of transferable securities, accessible via life insurance, generally in so-called “multi-support” contracts, which give access to both funds in euros and units of account. Investors are free to allocate their capital between the fund in euros and the UCs as they wish, and can invest in one or more UCs. The capital held on each of these media is expressed in number of shares, and not in euros.
The insurer only commits to the number of units of account, and not to their value, which may fluctuate up or down depending on the evolution of the financial markets. The subscriber/member alone bears the risk of capital loss.
A wide variety of investment vehicles
Unit-linked units have a double advantage: they allow you to diversify your savings by investing in different types of transferable securities (listed or unlisted shares, bonds and other debt securities, investment property, etc.) while taking advantage of the advantageous tax on life insurance (no taxation applied as long as no redemption is made, and taxation is lower after eight years of ownership).
There are several forms of units of account available to holders of life insurance policies:
- UCITSundertakings for collective investment in transferable securities, designate portfolios of securities (shares, bonds, mutual funds, etc.) held jointly by several savers.
- The SICAV (Investment Companies with Variable Capital) and FCP (Fonds Communs de Placement) are categories of UCITS. The former manage a collective portfolio of transferable securities on behalf of shareholders, the latter are co-owners of transferable securities which issue shares;
- The OPCI*real estate collective investment undertakings, allow investment in a majority of real estate assets and a minority of transferable securities (equities, including those of listed real estate companies, bonds or monetary UCIs);
- The SCPI*real estate investment companies, have as their sole purpose the acquisition of rental property;
- The vivid titles means shares or bonds issued by a company listed on the financial markets;
- The EMTNEuro Medium Term Notes, are complex debt securities whose return depends on an underlying (index, share, fund, etc.).
- The AND FExchange Traded Funds, or trackers, securities on the regulated markets of Euronext, aim to replicate the variations of an index, both upwards and downwards.
*Choosing real estate supports may present constraints, whether in terms of liquidity: the ability to arbitrate may for example be limited during the first 3 years from the investment for an SCPI-type support, and in terms of costs: additional costs may be provided by the insurer for investing in these real estate supports. Also, you should take the time to read the documents made available to you by the insurer before making your choice.
The wide variety of units of account, which offer highly variable risk-return ratios from one medium to another, thus presents investment opportunities compatible with all investor profiles, cautious, moderate or risky.
Before selecting a medium, it is important to consider your risk appetite, your family and financial situation as well as the planned duration of your investment.
Reading the KIID, or key investor information document, can inform you in particular about the investment objectives and policy, the risk and return profile, charges and past performance, which are not indicative of future performance. Take the time to read it carefully before investing in any medium.
KOMPOZ: more than 700 units of account (UA) available
However, not all life insurance contracts necessarily give access to a wide range of unit-linked products. The number of CUs offered by certain distributors is even sometimes limited to a small handful of supports, which, in addition to the weakness of the opportunities presented, proves to be a source of additional risk: in the absence of choice, the holders of these contracts may be tempted to direct their capital “by default” towards units of account which are not or are poorly suited to their profile.
It is therefore recommended to turn to life insurance solutions offering a sufficiently extensive unit-linked offer to allow finding the vehicles most in line with one’s risk appetite, and to ensure sufficient diversification of savings, rule of thumb. successful investment gold.
This is the case of KOMPOZ, the new life insurance policy from Sicavonline. Its offer includes a fund in euros and more than 700 unit-linked media: more than 500 UCITS, more than 40 ETF trackers, more than 20 real estate media (SCPIs, civil companies, OPCIs), more than 130 live securities and two media in investment capital. This à la carte digital contract (subscription, payment and arbitration) allows you to benefit from online advice thanks to an algorithm which makes it possible to define the management method, the financial allocation and the options of the contract adapted to each profile of saver. 100% modular, KOMPOZ is available in free management and delegated management.
*The risk of an investment on a support in units of account:
The desire for a better return is accompanied by risk taking, unit-linked supports present a risk of capital loss. The amounts invested in units of account are not guaranteed; they are subject to upward or downward fluctuations depending in particular on the evolution of the financial markets. It is reminded that past performance does not prejudge future performance. In some cases, the insurer may be unable to invest or disinvest certain units of account. In accordance with the regulations, it may therefore be required to temporarily suspend or restrict certain operations on the contract.
KOMPOZ is a collective life insurance policy insured by Ageas France and marketed by Sicavonline, as an insurance broker. The subscriber of the KOMPOZ contract is the Personaliz Epargne Digitale association, become a member of the association and join the KOMPOZ contract.
Ageas France
Limited life insurance company. Company governed by the Insurance Code, approved by the Prudential Supervisory Authority, with capital of EUR 159,221,273.61. Registered in the Nanterre Trade and Companies Register at number 352 191 167, whose registered office is located at Village 5 – 50 place de L’Ellipse – CS 30024 – 92985 Paris La Défense Cedex. FATCA identification number: GIIN 6841 D2.00009.ME.250
SICAVONLINE, Société Anonyme with capital of 4,000,008 EUR. RCS Nanterre 423 973 494.
Head office: Village 5 – 50 place de l’Ellipse, CS 50053, 92985 PARIS LA DÉFENSE CEDEX. Such. : 01 70 08 08 08.
Investment Services Provider approved by the Prudential Control and Resolution Authority under number 19 253 CE.
Insurance brokerage company and intermediary in banking operations and payment services, registered with ORIAS under number 18001256.
The editorial staff of Boursier.com did not participate in the creation of this content.