With inflation approaching 5%, it’s hard to find investments that really protect you from rising prices! Do you have life insurance and are you looking for a way to limit damage? Or to break that 5% mark? Some unit-linked supports are capable of driving the meter crazy. But how to do it without taking reckless risks?
Inflation reached 4.5% in March, over one year, while at the same time the Livret A posted a rate of 1% and the LEP 2.2%. Regulated savings accounts therefore do not offer the possibility of protect your savings from rising prices. There are other investments that could do this, including the increasingly popular direct real estate funds, but also, of course, life insurance unit-linked (UA) funds. But you still have to choose the right supports!
The return on funds in euros, whose capital is guaranteed, averaged 1.3% in 2021. In this context, to combat inflation, it will be necessary to turn to UCs, a riskier but potentially more profitable investment. . They returned 9% on average last year. Besides, the share of contributions in UC reaches 40% since the beginning of the year. A dynamic that is accelerating since it was 39% in 2021, 35% in 2020, and 28% in 2019. But how to combine, on UC, a return higher than inflation, without taking too many risks? One thing is certain, don’t put all your eggs in one basket.
Real estate funds: the safe value
Among the different types of units of account in which it is good to invest, we obviously find SCPIs. They have the wind in their sails both in direct investment and also indirectly via life insurance UCs. A real estate investment company (SCPI), also known as pierre papier, makes it possible to buy real estate such as offices, car parks, shops or even warehouses in order to rent or resell them. The saver becomes owner of a share of the capital of the SCPI and thus receives a fraction of the rents received by the SCPI in the form of dividends, depending on its investment. Real estate is clearly out of the game. In practice, SCPIs provide regular profitability with stable asset values, explains Gilles Belloir, director of Placement-Direct.
SCPIs provide regular profitability with stable asset values
A vision shared by Stellane Cohen, president of Altaprofits, who adds: the insurer takes the risk. Indeed, when you invest in an SCPI via your life insurance contract, it is the insurer who holds the shares and who therefore takes care of the resale of these on your request. The insurer thus guarantees the liquidity of SCPI shares (provided that you keep your shares for more than 3 years).
Conversely, by investing directly, the liquidity of such an investment is not guaranteed. In the event of an imbalance between supply and demand during a direct investment, and if you wish to resell your shares; you will have to sell them for less than their value and accept that they remain blocked for three to six months.
SCPI: gains benefit from the taxation of life insurance
The gains of an SCPI being capitalized within the life insurance contract, they escape all taxation as long as no withdrawal is made. After 8 years, they benefit from the advantageous taxation of life insurance in the event of withdrawal. The only downside to bear in mind: the number of accessible SCPIs is much more limited via a life insurance contract than in direct investment.
The game. Investing in SCPI: directly or via life insurance?
Performance. Last year, SCPIs offered very good returns with an average rate of 4.45% and even 4.49% according to updated figures from the French Association of Real Estate Investment Companies (Aspim). In 2021, investment in real estate and real estate funds represented 11% of investments in units of account.
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Equity funds… condition to diversify
To obtain long-term profitability, you need a good sector and geographic diversification, says Gilles Belloir. After real estate, savers therefore have every reason to take an interest in growth stocks especially those in the technology sector. These are companies with good prospects for profit growth. By betting part of your savings on this type of investment, preferably on more diversified funds, you are certainly subject to the vagaries of the stock market, but this risk can pay off in the long term. You should not only observe the performance over one year and rather find out about the yields of the last 3 years. It is also advisable to compare the fund’s returns with other funds in the same category, adds Gilles Belloir.
Find out about the returns of the last 3 years
Performance. In the equity fund department, the returns are so disparate that the averages are not always meaningful… Let’s take specific examples. A first: the Thematics Meta fund, managed by Natixis Investment Managers, composed mainly of technology stocks, has an annualized return of 15.47% (over 3 years). By comparison, funds in the same category recorded on average a lower annualized performance (3.56% less). Another example is the AXAWF Fram Robotech A Cap EUR fund managed by AXA, still in the technology sector, which recorded a return of 26.09% in 2021 for an annualized performance over 3 years of 17.83%.
Even if you are also subject to stock market fluctuations, you also often have, on recent life insurance contracts, the possibility of investing in shares quoted directly via your contract. As a reminder, the CAC40 had a very good year in 2021. After a slight decline in 2020 (-7%), it recorded a spectacular increase of +28.85%.
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Government bonds: to keep inflation down
Reputed to be less risky, government bond fund show yields that are certainly less good but still quite good, says Gilles Belloir. And for good reason: they most often closely or remotely follow soaring prices. Indexed to inflation, government bond funds are a good investment over the long term and will increase in value if inflation is higher than the forecasts of economic actors. Management companies have launched several of these funds in recent months. We can notably cite Groupama Asset Management’s Global Inflation Short Duration, mainly invested in short-term bonds (between 1 and 5 years) indexed to inflation and issued by OECD member countries.
Performance. These funds can offer performance beyond the rate of inflation. We can cite, for example, the Lyxor Core Euro Government fund created in 2017, which recorded a return of 6.14% in 2021 with an annualized performance of 4.76% over three years.
Index funds, to follow the stock market
Index funds (ETFs or Trackers) are also indexed to stock market performance and make it possible in particular to obtain the same changes as benchmark indices such as the CAC 40 or the S&P 500. Comparable to the equity funds mentioned above, they have the particularity of providing immediate reactivity, explains Stellane Cohen. According to her, to obtain a good return while reducing the risk, the saver has every interest in combining the fund in euros with several types of units of account managed under pilot management: a part on a eurocroissance fund or in SCPI and another on index funds. Index funds are available in particular from online brokers such as placement-direct, Meilleurtauxplacement, Linxea or Altaprofits, in free management or pilot management.
Performance. Dependent on market hazards, the performance of index funds varies according to market upheavals and a loss of invested capital is obviously possible. However, when the stock market indices smile, these funds show performances at the level of the financial markets and therefore well above inflation. The illustration is striking in 2021 with, for example, the Lyxor MSCI World fund: it includes 1,650 companies from 26 developed countries and posted a return of 31.16% in 2021 and even an average performance over three years of 15.40%. Or Amundi ETF MSCI Nordic whose yield in 2021 reached 28.37%.
For the moment, the year 2022 is not so favorable. The CAC40 is in the red. And these funds replicating stock market indices are logically following the movement… But the stock market has a long-term view in an attempt to do better than inflation.
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And why not pilot management?
If all these investment vehicles tickle your curiosity but you have neither the time nor the knowledge to invest in them, you can opt for pilot management. Allocation and arbitration decisions are made by your adviser, obviously according to your investor profile. By choosing a balanced profile, the pilot management performance for the past year reached 6.41% for BforBankVie, 5.79% for the Boursorama Vie contract and 8.68% for Fortuneo Vie.
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