Life insurance has it all: it allows you to invest with or without risk, within a favorable tax framework, while enjoying inheritance benefits when the day comes. But the 18.7 million savers holding a contract are not taking full advantage of its advantages. They favor the fund in euros, guaranteed, in which they invest 75% of their assets. However, life insurance is a long-term envelope, requiring an investment horizon of at least eight years to fully benefit from its tax advantages. Over this period, it is possible to diversify part of its assets on risky investments on the financial markets, to aim for a performance superior to that of the fund in euros (2% in 2022).
This is precisely the mission of unit-linked funds, these funds invested in shares and/or bonds, even in real estate or other… Depending on the contracts, the saver has the choice between hundreds, even thousands of products. A plethoric choice which has something to cool neophyte savers and even those who, more experienced, do not have time to make a selection. The solution ? Opt for managed management. The client’s contract is automatically split between the fund in euros and units of account selected according to its risk profile (prudent, balanced, dynamic, etc.). You then have nothing more to do since the arbitrations are carried out on your contract if necessary.
Life insurance, managed management
© / The Express
Formerly reserved for regulars of private banks for six-figure amounts, managed management is now accessible from a few hundred euros in contracts distributed online by specialized players (Altaprofits, Linxea, Yomoni, etc.) and banks in line (Boursorama Bank, Fortuneo Bank, etc.). “Managing yourself is becoming more and more complicated due to the high volatility of the markets, specifies Stellane Cohen, the president of Altaprofits. This is why more than one out of two new contracts opts for managed management.” With this broker, the Altaprofits Vie contract is accessible from 300 euros. Elsewhere, the entry ticket is between 100 euros (Linxea) and 1,000 euros (Fortuneo, Nalo, Yomoni). Managed management is billed between 0.10% and 0.90% per year, in addition to contract management costs, which themselves range between 0.50% and 0.85% depending on the supports and insurers. Boursorama Banque is an exception since its managed management is offered at no additional cost.
Know your risk aversion
The essential step is to carefully select your risk profile. In practice, it involves answering a specific questionnaire addressing both your personal and financial situation, your knowledge of the financial markets, your investment horizon and your risk aversion. You are then offered three, four, or even ten levels of risk, which are distinguished by the distribution between guaranteed or very low-risk vehicles (euro or money market funds) and units of account invested mainly in equities and/or bonds. At Placement-Direct, the latter is, for example, 20% for the most cautious profile and 100% for the most offensive. “Some management companies grant too much importance to their own products in their managed management, underlines Antoine Delon, the president of Linxea. This is not a good idea: in terms of performance, it is better to choose a contract that is truly managed in open architecture, that is to say, seeking expertise from the best managers.”
Once the portfolio has been created, all that remains is to make it live over time. “Our management committee meets monthly to decide on any trade-offs to be made and, in the event of a change, the modifications are carried out automatically”, indicates Charlotte Thameur, consulting director of Yomoni. However, it is not a question of rotating the portfolios very frequently. “There may be two or three arbitrages to be carried out each month when the markets are very volatile, then none for a while if it is not necessary”, reports Antoine Delon.
Note that some contracts offer an allocation exclusively made up of index funds listed on the stock exchange (ETF), as with Yomoni and Nalo. “Investing via ETFs makes it possible to reduce costs because these products are less burdened, and therefore to increase performance, underlines Franklin Morin, Nalo’s investment director. More than 75% of actively managed funds in Europe are doing less well than ten-year market indices, according to financial information provider Morningstar.” Another specificity of Nalo, it does not offer predefined management profiles (prudent, balanced, etc.), but tailor-made allocations designed for everyone. More precisely, the customer can isolate, within his contract, pockets corresponding to his various objectives (retirement, purchase of real estate, studies of a child, etc.). Which can be associated with distinct dates. “He can thus benefit from several profiled managements within the same contract, with different levels of risk corresponding to the horizon of each project”, specifies Franklin Morin.
In addition, many players such as Boursorama, Placement-Direct, Nalo and Yomoni offer socially responsible managed management. As for Goodvest, a recent player, its contract is exclusively invested in vehicles aligned with the Paris Climate Agreement, whether ETFs or actively managed funds.
A long-term investment
In terms of performance, 2022 turned out to be disappointing for all profiles and management companies. In their defense, it should be remembered that all the markets were subject to the headwinds of the sharp rise in interest rates. On the equity side, the CAC 40 index lost 9.5% while the US S&P 500 sank 19%. Bond indices also fell sharply in the wake of the rise in interest rates. As a result, even the most cautious profiles posted negative results last year. At Boursorama, the mandates managed by Edmond de Rothschild Asset Management ended 2022 with a loss ranging from -11.49% for the defensive profile to -21.34% for the offensive. At Fortuneo, warrants scored between -2.51% (moderate formula) and -14.16% (dynamic).
But life insurance being a long-term investment, it is rather over five to ten years that they should be compared. The riskiest profile shows a cumulative performance over five years of 7.83% at Linxea Avenir 2 (aggressive profile) at the end of 2022 net of mandate fees, 8.73% at Placement-direct Vie (offensive profile), 11, 39% at Altaprofits Vie (profile 9), or 19.38% at Yomoni (profile 10). Disappointment, however, at Boursorama (-1.07% for the dynamic profile) and Fortuneo (0%).
Finally, it should be noted that many insurers provide a bonus on their funds in euros for savers devoting a minimum fraction of their contract to units of account – often from 30%. “Managed management makes it possible to benefit from this bonus: the fund in euros of our Placement-direct Vie contract thus shows a return of 1.7% in 2022, which can climb to 2.4% for profiles comprising between 35% and 55 % of units of account and at 3.05% beyond 55%”, indicates Gilles Belloir, the managing director of Placement-Direct. An additional reason to take the step of profiled management.