It is a French specialty. Euro Fund is a safe investment vehicle intended for subscribers who can invest their savings through financial envelopes such as life insurance, capitalization contracts or retirement savings plans. This fund is starting to lose interest compared to other savings products.
Indeed, this investment, which was a favorite of the French, fell sharply in 2023. Net collections (collections minus withdrawals) of life insurance fell to 2.4 billion euros. Savings Circle Director, Philip Crevel suggests that “ This is the smallest collection in life insurance and the third lowest since 1997 “
Funds are also suffering from the economic crisis that France is going through, particularly inflation and the European Central Bank’s (ECB) rate hikes. Thus it experienced a drop in collections of 27.6 billion euros in 2023.
In this economic situation marked by a social crisis in France, the French choose to turn to other savings products. The Euro Fund is a victim of competition from Leverat A, which offers 3% net, as well as other savings products. This mainly concerns Term Accounts, Popular Savings Account (LEP) and other products which have seen their returns increase with the rate hike.
2024 will be good for the Euro Fund
“Savers were quite practical, even opportunistic, to put their money where it would earn the most », suggests Philippe Crevel to explain this new trend. It must be said that since the European Central Bank raised its rates, the French are finding it increasingly difficult to get credit.
So they find themselves obliged to make large personal contributions, which means they are dipping into their Euro funds.
Additionally, the inflation that has recently exploded complicates household finances. Additionally, some have called on their savings to overcome financial hardships. However, a product from the fund in Euro came out in 2023. This is the life insurance that has a positive balance with units of account (pockets without guarantees invested in the financial markets), which was clearly positive, about 30 billion euros.
It must be said that for the year 2024, analysts expect a significant reduction in inflation as well as a reduction in ECB rates. These two factors should be favorable for the Euro Fund. Life insurance, for its part, will benefit from higher remuneration for funds in euros (2.5% on average and more than 3% for the best).
