While in the first quarter, the context of financial market volatility, rising inflation and uncertainties relating to the war in Ukraine had led investors to turn more to euro funds, life insurance investors regained appetite for riskier unit-linked pockets, reports Nortia’s Independent Financial Advice Observatory, based on data from more than 1,2000 wealth management advisers (CGP).
Collecting in units of account once again becomes the majority
According to this survey, and in line with the trend observed at national level, 59% of gross inflows in life insurance from investment advisors were positioned in unit-linked products in the 2nd quarter (compared to 42% in the 1st quarter), returning to similar levels observed at the end of last year.
Despite a still uncertain economic situation, and quite surprisingly, the renewed interest of investment managers for euro funds at the start of the year was short-lived. ” While the market does not seem to have regained stability and “risk-off” positions remain the norm for many investors, CGPs and their clients have tended to seek innovative, protective or even defensive solutions without, however, positioning themselves exclusively on the euro fund “, reports Nortia.
A sign, perhaps, that investors consider that the current bad weather – inflation, volatility, geopolitical instability – is here to stay, and that they must adapt to find, in the medium term, a level of return a little more ambitious than the still weak euro funds.
Real estate supports jumped in the 2nd quarter
Although concerns about inflation and geopolitical tensions did not prevent the return of the majority share of CUs in payments, the vehicles chosen nevertheless reflect a certain caution in their investment choices. Real estate, in particular, considered to be a good medium for securing portfolios, has become even more attractive. Real estate funds represent the strongest increase in investment of gross inflows on unit-linked units, and half of the flows recorded.
” Management houses specializing in paper stone have been able to allay concerns […] in particular thanks to the rent indexation mechanism and the quality of the underlying assets which mitigate the risks linked to inflation », Analyzes Manon Cosyn-Martin, financial engineer at Nortia. The vast majority of inflows were made on SCs and SCIs, appreciated for their low entry fees (2% on average), their weekly valuation and the absence of early exit penalties on life insurance contracts .
Abandoned equity funds
Conversely, equity funds fell sharply, falling from nearly 23% of inflows in units in the 1st quarter to less than 9%. On these supports, investors shunned Europe and favored geographical diversification. On the thematic side, the funds with an environmental and responsible dimension have distinguished themselves via the subject of the energy transition in particular.
As for bond investments (2.6% of inflows in Q2, against 4.7% in Q1), “ the situation is evolving in halftone observes Nortia. “AMCs favor inflation-indexed funds, as well as short-term bond funds to expose themselves to a drop in short rates in the event of an economic slowdown. “.
In terms of structured products, the trend has been stable since last autumn, with these investments representing 8.9% of inflows in unit-linked units over the April-June 2022 period.
Arbitration: place for a wait-and-see attitude and “alternative” media
Finally, investor caution has also been reflected in terms of arbitrage. On the outstanding balance of Nortia life insurance contracts (Nortia Life), the proportion arbitrated, at 3.2%, fell slightly compared to Q1 (3.8%). ” Despite declining equity and bond markets since the beginning of the year, advisors believe that entry points are not yet optimal “, we note at Nortia.
As with collection, in terms of arbitration, real estate media have attracted a lot. Investors have also turned to structured products, but also monetary supports and the unlisted.