The Garance mutual is placed on the second step of the podium for the best 2023 life insurance rates with a yield of 3.5%. A great performance which is not surprising, the mutual having remained in the leading pack for several years. But what are the secrets of this highly successful euro fund?
On January 2, the Garance mutual announced the return of its fund in euros for the year 2023. A rate which amounts to 3.5% net of management fees and gross of social security contributions. Once these contributions are 17.2%, the net rate increases to almost 2.9%. A performance which matches that of Livret A but above all allows Garance to remain in the leading pack for 2023 rates, just behind La France Mutualiste.
But is this a surprise? Not really. Indeed, in 2021 and 2022, the mutual served rates of 2.75% and 2.80% respectively net of management fees, placing it in first place in the ranking of the best rates for these two years.
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A solid performance without drawing on reserves
Over the last five years, Garance has recorded a cumulative performance of 19.29% on its euro fund, “without even drawing on its reserves,” the mutual said in a press release. How can we explain the success of this euro fund? “Healthy and prudent management for more than 15 years,” replies Virginie Hauswald, the general director of Garance, to MoneyVox.
“A war chest which guarantees us between 2.8% and 3% yield”
Garance’s euro fund is made up of almost half government bonds, a large quarter of corporate bonds, 15% equities, 7% real estate and 3% money market, explains Xavier Couratier. , technical director of risks and finance at Garance.
“For several years, we have been able to maintain a rate of return on these bonds at more than 4.5% over periods of around 12 years, continues the technical director. We know that we have this war chest which assures us between 2.8% and 3% return per year, to which are added the capital gains generated by the shares. It is this solid foundation that allows us to have sustainable performance “.
If the management of the allocation of the Garance euro fund is determined over the long term, “there are tactical margins for each pocket which allow us to adapt according to market conditions. When bond rates were very low, Garance invested in less liquid assets like real estate and infrastructure. This has allowed us to continue to provide good rates to members. As the bonds rose, we reinvested in bonds,” explains Xavier Couratier.
If the remuneration rate of Garance’s euro fund is one of the best on the market, there is a downside. Indeed, unlike other players, particularly for online life insurance, the mutual charges up to 1% in fees on each payment.
Result, for 1,000 euros placed at the end of 2022 in the Garance euro fund, a saver will have earned 34.65 euros in interest in 2023 thanks to the rate served of 3.50% 34.65 euros in interest and not 35 euros since once the 1% payment fees have been deducted, only 990 euros of the 1,000 euros paid will have produced interest. As a result, the capital of 1,000 euros at the end of 2022 increased to 1,024.65 euros at the start of 2024. And not 1,034.65 euros, due to the 10 euros in payment fees withdrawn at the start.
Garance renews its image and product range
Furthermore, Garance has just unveiled a series of announcements for 2024: new logo, new customer area, new website… And new Retirement Savings Plan (PER). The mutual in fact indicated during a press conference at the beginning of February the release of a brand new product expanding its range: the PER Garance Vivacité. Garance will also soon release a heritage contract and a mobile application in September. The mutual has also set itself a fundraising objective of 300 million euros this year on its various savings products.
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