In recent years, insurers have not skimped on the means to convince their customers to diversify their life insurance contracts. Gone are the 100% funds in euros, whose performance has fallen over the years; unit-linked, offering superior long-term performance potential! If the context has changed and if the fund in euros finds some colors, a new parameter was invited last year in the equation. Inflation of around 6% in France requires taking measures to preserve its capital. Putting a dose of risky assets in your portfolio thus seems unavoidable.
If the diagnosis seems simple, the remedy is not so obvious to identify. Because most contracts now offer dozens, even hundreds of different investments, sometimes with obscure names. Moreover, with the ups and downs of the stock market, it is not easy to know which market to bet on.
The answer lies in a diversified allocation, strong enough to withstand market dips while benefiting from a performance superior to that of the fund in euros in the long term. To help you build such a portfolio, we asked three life insurance players to give us their ideal distribution for 2023 with the supports contained in their contract. Their specifications? The insured is a 45-year-old father who wishes to invest with a time horizon of ten years ahead of him. Crucially, its risk profile is balanced. In other words, he agrees to take a measured share of risk with his savings. The insurer Groupama Gan Vie, the broker Placement-direct.fr and the Mutuelle d’Ivry la Fraternelle (MIF) have agreed to take part in the exercise. You will find their detailed answers below. (see graphs) and here are the lessons we can draw from it.
Downside
In such an exercise, the share granted to the fund in euros is the first question to be decided because it is essential to provide a basis of security. A balanced risk profile assumes by convention a distribution half on risky supports and half on investments with little or no risk.
© / Art Press
However, this second dimension is not necessarily synonymous with funds in euros. Whether Placement-direct.fr and the MIF opted for guaranteed assets for 50% of savings, Groupama Gan Vie made a different choice. The insurer places only 20% of the savings in the fund in euros and gives pride of place in its allocation to supports with a limited risk profile, such as bond funds and diversified funds. “The main characteristics of the fund in euros is that you do not lose money and that your savings are available at any time, recalls Guillaume Pierron, deputy general manager in charge of individual life at Groupama Gan Vie Gan Vie. The other side of the coin is its limited yield. The latter has increased slightly this year and this trend should continue, but at a slower pace than market rates.” The insurer therefore prefers to leave the decision to fund managers who can be more reactive to adapt to the changing context on the bond market.
Another peculiarity should be taken into account: while Placements-direct.fr and Groupama Gan Vie have provided us with allocations accessible in free or recommended management (by the saver), the MIF presents its allocation in discretionary management. In this case, the manager (Ofi Invest) is in charge. As a result, the supports are more numerous and potentially more sophisticated.
However, the three wallets have similarities. All of them therefore provide for a portion of equities – an unavoidable choice with a long-term investment horizon. This pouch weighs 50% in Placement-direct.fr and 30% at Groupama Gan Vie and MIF. “With a long-term investment horizon, it is the most successful product category”, justifies Henri Réau, director of development of the online broker. Remember that most modern contracts provide options to gradually invest in the markets. With one key criterion: diversification. Placement-direct.fr thus combines European and international equity funds with dedicated support in the United States (Mansartis America from the management company Mansartis). For higher risk profiles, the broker also integrates an emerging equity fund (“dynamic” profile) as well as small and mid caps (“offensive” profile).
Distrust of real estate
The MIF also gives pride of place to US equities: no less than 15% of savings are devoted to them via two dedicated media. “We are confident on the equities part because the results of the companies are of good quality and it is in this country that growth is starting up again”, comments Olivier Sentis, managing director of the MIF. For its part, Groupama Gan Vie is betting on international and euro zone equity funds and is adding a multi-theme product to this selection, Pictet Global Megatrend Selection from Pictet Asset Management. This “flagship” invests in various themes responding to long-term trends such as water, digitization, luxury or even security.
MIF and Groupama Gan Vie have both integrated bond funds, but sparingly because this market is currently very turbulent. “We are cautious on the bond side because the central banks have not yet finished tightening their monetary policy, which could still drive up long-term interest rates,” notes Olivier Sentis. However, who says rise in rates leads to said decline in listed bonds. “On the other hand, bonds currently offer an attractive return, above 3% for government debt and above 5% for those issued by good quality companies,” continues the manager. In this changing context, Groupama Gan Vie favors diversified funds. The latter have the advantage of leaving great freedom to the manager, who can change the portion devoted to equities or bonds according to his market expectations.
Finally, unlike usual, no player wished to integrate real estate. “The media offer is more limited and we want it to be a customer choice more than a suggestion on our part”, explains Henri Réau. At Groupama Gan Vie, this asset class is deliberately set aside. “We have questions about real estate because the rise in interest rates increases the cost of credit and the rise of telework changes the organization of companies, underlines Guillaume Pierron. We are therefore cautious in this sector.”
It should be noted that concerns related to the environment, social issues and governance (ESG) are now omnipresent. At Groupama Gan Vie, 60% of the funds recommended include extra-financial criteria. The mandates of the MIF, for their part, are built with a minimum of 80% of funds labeled SRI (socially responsible investment) or integrating ESG criteria. Finally, Placement-direct.fr works on a universe composed exclusively of funds labeled SRI or declared “article 9” within the meaning of European regulations, that is to say products that target a sustainable development objective. A trend that will continue to strengthen in the coming years.