life insurance, the preferred investment of the French, reports of less and less. The average performance of funds in euros is expected to be between 1,80 and 1,90 % for 2016. It is time to take your euro funds in hands. Our advice.
The figures speak for themselves. After 2,30 % in 2015, the average performance of funds in euros is expected to be between 1,80 and 1,90 % for 2016. A severe drop, predicted by most insurers and desired by Bercy. Remove the social contributions (15,50 %), then the inflation (as a 0.50 % on a year sliding according to the Insee), and here you are with a real rate close to 1 %.
Find it here >>> returns 2016 to more than 300 life insurance contracts as of their announcement
Not very enticing, so much so that the decline will continue into 2017. If the increase in bond rates that occurred this fall, as long as it remains gradual and contained, which bodes well for the performance of the life insurance, it does not affect this erosion for several years. Especially, “this rebound is very likely to be accompanied by a resumption of inflation, analysis Gilles Ulrich, chairman of the management board of the group, The Conservative. If this passes the bar of 1 or 1.50 percent, the risk is high that the actual yields turn negative”.
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Then, gasping for breath fund in euros ? Not quite. Insurers will continue to offer this, but more selectively, with investment conditions, changes in fees or bonus rates, for example in the case of temporary blockage of the savings. In this context, what to do ? The roadmap is pretty simple. Do not bet more the blind on the funds in euros, hunt the best. And diversify your savings wisely to earn more.
1 – Keep the funds in euros for the security
Even if his performance pique of the nose, the funds in euros, remains the pivot for life insurance. And because the capital invested is guaranteed against any loss (excluding management fees in many contracts), and it remains permanently available.
from there, there is no question to deprive yourself to secure your savings. Even around 1.50 %, and its yield remains higher than the booklets regulated, the booklet relating to a little as 0.75 %. No need to look, you will not find any guaranteed investment that is liquid, which is not capped in filing, paying your capital between 1% and 2%.
What conclusions can be drawn ? That the funds in euros is a must if you intend to use your savings soon, or even if your investment horizon is two or three years, not more. If you need to invest, except to hold an old contract satisfactory, drop in on a life insurance policy has been proven and little charge in entrance fees (see the next point).
Attention, more and more insurers no longer allow payments to 100 % on the funds in euros, in particular for large amounts. The banks, which hold two-thirds of the market, set the bar at around 250 000 euros in average, beyond it you need to put 20% to 30% on the fund is risky (also called units of account). To work around this rule, you can buy several contracts from different insurers.
2 – Make the hunt for good contracts
at the Beginning of January, we will know the performance of the fund in euros served on the contract of the Afer, a flagship product of life insurance. Credited 3.05 % in 2015, he will probably distribute 2,70 % as of 2016. A small point above the market average. It is the best example to illustrate that all contracts are not created equal. Thus, for 2016, behind an average rate expected 1,80-1,90 %, the yield will range from 0.50 to 3.50 %. You read that right, you can win up to seven times more according to the euro funds held !
The hunt for the best contracts is therefore of prime importance. But how to do sorting on a market if provided ? Have some benchmarks in mind. Contracts banking for the general public are lagging behind ; they will have reported around 1.50% in 2016, or even less than 1 % for those out of the commercial offer. The big insurers (Allianz, Axa, etc) will have been a little better but at the expense of high costs.
The cost, let’s talk about it ! With returns in bern, it is more than ever a decisive element. The expense ratio average payment is 3 %, check below-and negotiate if necessary. Check also the management fees of the contract, penalise on the duration. In fact, your salvation goes through distribution channels in the least captive – associations of investors, mutual insurance companies – whose contracts rely on the quality of the fund in euros. Thus, over the last eight years, with a good contract, you would have earned around 31% on the funds in euros, compared to 21% in betting on a wrong horse. Be a good hunter !
MVVA 2016
3 – Change the creamery wisely
they are numerous, the contracts sealed by funds in euros unprofitable and laden with high fees. Why hang in there ? The retention of tax benefits is often put forward to justify the status quo. It remains to be seen. Of course, to earn income, life insurance is optimal after eight years of detention.
the more Reason, if your investment horizon is expected beyond, to leave the more quickly a bad contract or, at a minimum, use the map of the transfer (called Fourgous) that lets you move within the same company of an old contract in euros to a multi-purpose tray retaining the prior tax.
You plan to use your capital until eight years ? Perform some calculations to éassess the fiscal impact of a withdrawal. If your goal is the transmission of capital to the death, be pragmatic. The beneficiary is your spouse or partner to partner ? The exemption will apply as your contracts are old or recent. In this case, have a contract signed in the past fifteen years will not bring you any income tax with regard to the fact of opening a new one.
in order To gratify the descendants or the third, a more detailed analysis is required for products that date back to the 1990s or before. Or depending on your age, the tax rule changing after the age of 70. Anyway, replace the taxation at its true place and analyze your contract according to two criteria.
A, the performance of the fund in euros : if he was under at 1.80 % in 2015, it really is time to go elsewhere. Two, the financial offer and its online services are sufficient for the dynamic management of your savings (see points 6 to 9) ?
4 – Grab the fund in eur alternative
A side of the mass fund euro classics, we found some funds in euros alternative to the returns more attractive. Their difference ? Insurers invest the savings of the policyholders in the real estate and stock, very little in bonds. This diversification has been rather successful in recent years with expected yields up to 3.50% for 2016.
It is necessary to distinguish two categories of funds in the euro alternative. On one side, some so-called opportunistic, are chiefly invested in office buildings or shopping malls, such as Safety Stone Euro, which had held the bar of 4 % in 2015. On the other, the said monies dynamics are strongly worn on the shares. They have rates more volatile, from 0 to 5 %, with a high dependence with the equity markets.
This solution is, however, a niche. Only a handful of contracts to be found in these two types of media, with access conditions which have hardened over the years. Thus, to place 100 euros on this kind of funds, you will often have to drop 30 to 50 euros in addition to funds risky. In addition, insurers tend to put a ceiling on payments on this type of product, very consumer capital. Nothing prevents you however to go and seek out these rare gems, especially among the contracts of the Web.
MVVA 2016
5 – Avoid the eurocroissance !
Launched two years ago, the fund eurocroissance had to outflank the funds in euros to classics. Failed. The marketing has stalled, even if the offer remains on the fronts of a few players (BNP Paribas, Crédit Agricole, Afer, Generali, etc).
With this product, we promise the performance with a fund in euros traditional. To achieve this, the capital is guaranteed only for the fixed term of the contract, between eight and forty years. No need to consider if your investment horizon is less than or equal to eight years. For a projection between ten and twenty years, in the light of current conditions in the market for life insurance, the prospect of winning more is not attested. And beyond twenty years, is it really reasonable to commit to a product with an uncertain future and that the capital guarantee at the end is a trompe-l’oeil, inflation requires ?
To boost the euro-growth, the government has to allow insurers to transfer these funds to certain capital gains realized on the brackets in the euro classic and not yet distributed. A sleight-of-which does not bode well. With regard to the performance displayed so far, they are very volatile, at altitudes of from 0 to 10% per year. Problem : they are not acquired as an investor, contrary to the returns delivered by the fund in euros ordinary.
6 – Add a dose of peter’s paper
the French like life insurance and… real estate. Why not marry the two ? The recipe : invest in real estate investment trusts (REITS), that is to say, to subscribe to shares from a company that assumes the function of the rental management, often for offices or walls of shops.
You have two good reasons why you are interested in add of the funds in euros. One, it is more cost-effective, with rates of distribution gross of 4.5 to 5 % for the best. Once the costs are cut off, you can still collect 3 to 3.50 % net. These performances are little volatile and the risk of loss in a year is limited. Two, using the envelope life insurance, your SCPI delivers you income in a tax shelter, the latter being re-injected into your contract.
The offer of products with these media is highly developed, primarily for advisors in wealth management and online brokers, often with limited periods of time to subscribe to it. Another option : focus on the SCI (sociétés civiles immobilières). But be careful not to bet everything on real estate business which has enjoyed a strong appeal in recent years, leading to inflated prices and lower yields.
MVVA 2016
7 – Play the card of the legacy funds
To encourage the general public to diversify their savings within the life insurance, the professionals mainly use two strategies. Some play the card of the products are structured, which will protect your capital in the long term (eight years on average) against a too strong drop in the markets. When these fixtures are well built, it is understandable and without excessive fees, the likelihood is strong enough to reach the best revenus on the fund in euros, but for a very short time. It is then necessary to reinvest on another medium.
the Other axis, with said monies to heritage. They are designed to protect your capital, without the guarantee, giving you the time acceptable performance, of the order of 3 to 5 % per year, while avoiding the losses in two or three years. The manager will take advantage of the growth phases of the markets (shares, bonds) and mitigate your exposure when something goes wrong. Where performance is less regular than a fund in euros.
most contracts now offer this type of media, it is a pretty simple way to prudently diversify his / her investment. However, these products will have a more difficult context in the next few years, at the end of the lower rate requires. Bet on a fund heritage actively driven if you have at least five years ahead of you.
MVVA 2016
8 – Invest with regularity on the fund shares
life insurance is a financial envelope multiforme. In many contracts, the fund in euros, you will find now a wide range of media invested in stocks, bonds,… Play this card requires a few considerations, because very few investors are able to switch from one fund in euros, guaranteeing the capital to support stock is very volatile.
The latter exposes you to a risk of loss to be aware of. It is necessary to invest only the money that you are sure that you do not need before a good ten years.
Do it on a regular basis, with the scheduled payments, for example every month, or even trade from your funds in euros, in order to smooth the course of purchase of your Sicav. Online contracts are ideal for this type of management if you are an investor stand-alone. If not, turn to an advisor in wealth management sharp which will construct for you the best portfolio. It will then follow the evolution of your capital, and make the necessary decisions. Finally, don’t forget to put from time to time your capital gains to the hot… on the funds in euros.
9 – do you Offer a driver for your capital
Last chance, hand over the keys to your life insurance coverage to a manager. He is to sign a mandate arbitration and allowing him to fly freely, but according to a defined profile, your capital or a part thereof. “This type of management shows good performance, points out Bernard by The Arm, chairman of Suravenir. It’s a smart solution to diversify its capital in a simple and effective manner.”
The management-driven, also called “delegated” or management under mandate, is spreading in the contracts, in the form of an option, with often three profiles of your choice (the conservative/moderate dynamic through the balance). Interesting, as long as you define your own risk profile, your goals and your investment horizon. Never forget, however, that no level of performance is guaranteed. In addition, this option is rarely free of charge : a fee of approximately 0.20% will be added to the management fee rates of the contract.
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life Insurance : contracts Predica
The rate – yield 2016 of more than 300 life insurance contracts life insurance Contract Predissime 9 Credit Agricole : not engaging life insurance Contract Floriane Credit Agricole : troubled by high costs
With a few thousand euros, you have access to the right products, in particular on the Net. Management companies there are well-known (DNCA Finance and Edmond de Rothschild AM, Lazard Frères Gestion, Rothschild & Cie Gestion, etc). In short, entrust their savings to experts is a realistic strategy to counter the decline of the fund in euros, in particular in its so-called “conservative”. Note : the ACPR, the supervisory authority of the banking and insurance, working to a stricter control of the management mandate.