Life insurance: this secure support promises to bring you more than the euro fund

Faced with the expected drop in returns on euro funds, eurocroissance funds are resurfacing. This life insurance support promises a better return thanks to supervised risk-taking, but is it really a reliable alternative?

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Are we going to see a return to favor of Eurogrowth funds? Within a life insurance contract, you may be familiar with the two main categories of investment vehicles into which you can pay your money: funds in euros – with guaranteed capital – and units of account (UC) , which, conversely, carry a risk of capital loss, because they are invested in risky assets (shares, bonds, real estate, etc.). Halfway between these two supports, there is an alternative: “Eurogrowth” funds.

Halfway, because the capital is also guaranteed, like a classic euro fund, but not at all times. On a euro fund, you can withdraw your stake whenever you want without risk of loss. With a Eurocroissance fund, you are also guaranteed to regain your capital, but only from a certain time (8 years minimum). During this period, the Eurocroissance fund invests in risky assets to try to generate performance.

“It is therefore the same operation as a UC, but with a guarantee over the term which is provided by the insurer. The saver therefore never loses money if he remains invested until the end. He always gets back at least the net sums he invested. explained, Tuesday, November 26, Françoise Heckmann, director of savings products at Allianz France, during a press conference for the launch of a new eurocroissance type fund: Allianz Fonds Croissance.

The goal: generate more performance than euro funds

A launch timing which does not appear trivial. Imagined at the beginning of the 2010s, Eurocroissance funds were in fact designed as alternatives to traditional euro funds. The goal? Generate more performance than on the latter, at a time (2012-2021) when bond rates were close to zero (or even negative), which undermined their yield.

However, since June 6, the European Central Bank (ECB) has made three reductions in its key rates, which mechanically leads to a drop in bond yields, and ultimately euro funds, which are massively filled with them. A performance of 2.5% is therefore expected on average on these supports in 2024, compared to 2.6% in 2023. An ongoing decline which therefore logically revives interest in Eurocroissance funds, which promise to “serve » more than the euro fund while also promising a capital guarantee: “The expected return of Allianz Fonds Croissance should be 1% higher than the fund average in euros,” confirms Sylvain Coriat, director of the personal insurance unit at Allianz France.

A very uneven performance from one year to the next

Is this a sufficient reason to bet everything on Eurogrowth? You must first be aware that the performance of these funds is subject to upward or downward fluctuations depending on developments in the financial markets. While the return on your euro fund will vary little from one year to the next, the differences here can be significant: “Performance is very uneven depending on the funds”adds Cyrille Chartier-Kastler, founder of the Facts & Figures firm. Between 2021 and 2023, the performance of the best fund (Agipi Euro Croissance) was, for example, 3.23% per year (see table), against -3.40% for the less good (Afer Eurocroissance).

What’s more, classic euro funds have not yet said their last word: “Despite the drop in rates, 10-year French bonds (10-year OAT, Editor’s note) still show a yield above 3% today, due in particular to the French political situation.recalls Cyrille Chartier-Kastler. The prospect of a country without a government or budget in the coming weeks encourages banks to charge higher interests to lend to France, which increases the yield on the bonds it issues, and which insurers are fond of. A situation which could keep the performance of traditional euro funds afloat for some time to come.