After a decade of rock-bottom rates, the rise and then stabilisation of bond yields have reshuffled the cards of secure savings. Euro funds, long written off, are regaining ground — and with them, the appeal of the best-built life insurance contracts.
Euro funds back in favour
Insurers, who invest most of these funds in bonds, now benefit from higher coupons on their new purchases. “New-generation” or “enhanced” euro funds, backed by more dynamic asset pockets — property, private debt, private equity — post yields noticeably above the market average, in exchange for a commitment period or a minimum share invested in unit-linked funds.
This shift does not mean a return to all-secure investing. It does, however, offer a better-remunerated building block of stability within an allocation, particularly useful for structured wealth seeking to smooth risk without giving up return.
The Luxembourg advantage
For the most sophisticated portfolios, the Luxembourg life insurance contract regains its full relevance. It combines the security of the “security triangle” — which protects the saver should the insurer default — with greater freedom of management: access to a broader investment universe, multi-currency capability, and fiscal neutrality that defers to the tax rules of the policyholder's country of residence.
- Enhanced security: policyholder super-priority and ring-fencing of assets.
- Flexibility: dedicated internal funds, bespoke management, multi-currency.
- Portability: a contract suited to international mobility.
In a normalised-rate environment, combining an enhanced euro fund with a Luxembourg architecture makes it possible to rebuild portfolios that are both solid and adaptable. The condition is to select the underlying vehicles without commercial bias — which is precisely where independent advice makes the difference.