Unlike that of conventional euro funds, the average performance of this market segment gained 0.77 points last year. However, this is not a quick fix. Credit: iStock
Could we in 2019 play on the security of euro funds in life insurance while avoiding a drop in performance? Yes, provided you choose dynamic euro funds. According to Good Value for Money, a company specializing in life insurance analysis, their average yield stood at 1.90% in 2019, up 0.77 points over one year. Compared to conventional euro funds, they marked a clear difference, the average performance surplus being able to be evaluated at 0.50 point.
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These results are due to the different composition of the two types of funds. While traditional euro funds are invested around 85% in bond assets, dynamic euro funds can go down to 60% -65% and focus on more offensive assets (stocks, real estate).
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Offering the same capital guarantees as traditional euro funds, dynamic funds are not a quick fix. Their first drawback is their limited number. Marketed by a handful of insurers, they constitute a ” rare commodity According to Good Value for Money. Thus, their access is often conditioned on an investment in units of account representing at least 30% to 40% of the payments.
In addition, dynamic allocation results in more volatile performances. In fact, dynamic euro funds may occasionally perform worse than conventional euro funds. This was particularly the case in 2018 with 1.13% average return on dynamic funds against 1.67% for conventional euro funds.
Over time, dynamic funds remain a little more attractive. For 10 years, their average return has been 2.79%, or 0.42 points more than that of conventional euro funds.