With the rise in interest rates, the performance of money market funds is becoming attractive again. Some savers have understood this and are reluctant to invest in these funds in their life insurance policy. Decryption.
To fight against the return of inflation, since the summer of 2022, the European Central Bank (ECB) has gradually raised its key rates from zero to 3.75% at the end of July. Due to this monetary tightening movement, the performance of monetary funds is picking up again with annualized returns close to these levels.
Indeed, their portfolios are mainly made up of short-term debt securities, for example by the French State or companies in the euro zone, the remuneration of which depends directly on the level of the key rates of the ECB.
In life insurance or directly, are bonds the right plan at the moment?
Why hold money market funds
Given their current level of remuneration, these money-market investments now compete with funds in euros offered by insurers, whose yield averaged 2% (before social security contributions) last year according to the French supervisory authority. and resolution (ACPR).
Nevertheless, it should be borne in mind that monetary funds, even if they present little risk of default, are not, on the other hand, guaranteed in capital, unlike euro funds, specifies Stellane Cohen, president of Altaprofits.
Indeed, according to her, monetary funds are above all used as a waiting financial product, while waiting for example to invest in potentially more dynamic investments, in particular on the equity markets.
It is also in this logic that monetary funds are offered by insurers within the units of account (UC) of their multi-support life insurance contract.
However, today they have clearly become an attractive alternative to bond funds given their current remuneration and their low risk profile, according to Malik Haddouk, director of diversified management at CPR Asset Management.
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How to make a choice
Moreover, some savers also use them to take advantage of welcome offers from insurers, consisting of offering a bonus or a higher rate on the fund in euros in return for a minimum investment in UC when opening a new contract. life insurance.
The fact remains that the choice of monetary funds available within CUs is generally quite limited, unlike products invested in equities or bonds, for example.
Despite everything, to make your choice, you should give preference to the products with the lowest annual management fees so as not to reduce the final performance too much. Generally, these costs are within a range of 0.02% to 1% per year according to a study carried out by Morningstar.
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2023-08-05 05:11:25
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