Multi-support life insurance (assurance vie multisupport) gives you two broad families of investments: the euro fund (fonds euros), which guarantees your capital, and unit-linked funds (unites de compte, or UC), whose value fluctuates with financial markets. How you split your money between these two pillars is the most structurally important investment decision you will make. It determines both the return potential of your policy and the level of risk you accept. Too many savers default to 100% euro fund out of risk aversion, exposing their purchasing power to slow but certain erosion from inflation. Others, drawn by equity-market performance, invest aggressively in unit-linked funds without gauging their true tolerance for downturns. The right allocation is the one that genuinely matches your personal situation, your investment horizon and your emotional capacity to withstand fluctuations.
Euro funds and unit-linked funds: two complementary philosophies
The euro fund: safety with a modest return
The euro fund is the capital-guaranteed component of a life insurance policy. Your capital, net of management fees, cannot decrease. The insurer invests mainly in government and high-quality corporate bonds (roughly 80% of the portfolio), supplemented by a real-estate sleeve (5% to 15%) and a small equity allocation (2% to 10%).
Euro-fund returns have rebounded noticeably in recent years, driven by ECB rate rises. In 2024, the market-average return stood at around 2.80%, but the spread between policies is considerable. The best euro funds delivered between 3.50% and 4.50% in 2024, thanks in part to bonus mechanisms tied to a minimum percentage of unit-linked holdings. The SwissLife euro fund (available through Placement-direct Vie) reached up to 4% with the unit-linked bonus. The Lucya Cardif euro fund (BNP Paribas Cardif) delivered 3.60%.
Despite this improvement, the euro fund remains insufficient to grow wealth significantly over the long term. With inflation at 2% to 2.50% per year, a 3% euro fund produces only 0.50% to 1% real return -- modest over 20 or 30 years.
Unit-linked funds: performance at the price of volatility
Unit-linked funds encompass all non-guaranteed vehicles: equity funds (Europe, global, emerging markets), bond funds, index ETFs (Amundi MSCI World, iShares Core S&P 500), SCPI real-estate funds (Corum Origin, Remake Live, Iroko Zen), SCI, OPCI, private-equity funds and thematic funds. Unlike the euro fund, your capital can go up as well as down.
The historical performance of equity markets justifies this risk-taking over the long term. The MSCI World index has delivered roughly 8% to 10% per year on average over the past 30 years (dividends reinvested). The American S&P 500 has done even better, at about 10% to 12% per year. But these averages conceal years of sharp declines: -38% in 2008, -33% in March 2020 (before the spectacular rebound), -18% in 2022.
Finding the right balance for your profile
Criterion number one: your investment horizon
The length of time you can leave your money invested is the single most important factor for calibrating your allocation. The longer your horizon, the greater the chance that equities will deliver positive performance and offset down phases.
Historical statistics on the MSCI World are telling: over 1 year, the probability of a gain is around 72%. Over 5 years, it rises to 86%. Over 10 years, it reaches 94%. Over 15 years and beyond, it approaches 100%. Your investment horizon is therefore the best shield against equity risk.
The "100 minus your age" rule
This rule of thumb suggests investing a percentage equal to "100 minus your age" in unit-linked funds. At 30: 70% in unit-linked and 30% in euro fund. At 50: 50/50. At 65: 35% in unit-linked and 65% in euro fund. This deliberately simplistic rule has the merit of setting a framework. It should be adjusted according to your true risk tolerance, liquidity needs and overall wealth.
Worked example: Caroline, 39, interior architect
Caroline is self-employed and earns roughly 4,200 euros net per month. She owns her apartment (worth 280,000 euros, with 120,000 euros of mortgage remaining) and has 45,000 euros in a life insurance policy -- an old bank-issued contract invested 100% in euro fund for the past 8 years. She saves 500 euros per month.
With a horizon of over 20 years until retirement, 100% euro fund is clearly sub-optimal for Caroline. Applying the "100 minus her age" rule, she should hold roughly 61% in unit-linked funds and 39% in euro fund.
Caroline opens a Lucya Cardif policy and gradually transfers her savings (keeping the old contract for its tax seniority). Her new allocation:
- Cardif euro fund: 35% (2024 return: 3.60%)
- Amundi MSCI World ETF: 30% (fees 0.18%/year)
- iShares Core S&P 500 ETF: 10% (fees 0.07%/year)
- SCPI Remake Live: 10% (2024 yield ~7%)
- SCPI Iroko Zen: 10% (2024 yield ~7%)
- Dated bond fund 2028: 5% (target yield 4.5%)
20-year projection with monthly contributions of 500 euros and a weighted average return of 5.5%:
- Estimated capital at age 59: 260,000 euros (of which 45,000 euros initial + 120,000 euros contributions + 95,000 euros gains)
Had Caroline stayed in 100% euro fund at 3% return, her capital would have reached only 195,000 euros. Diversifying into unit-linked funds earns her roughly 65,000 euros of additional capital over 20 years -- 50% more than the all-euro-fund strategy.
Five detailed model profiles
Profile 1: The young professional (25-35) -- 20% euro fund / 80% unit-linked
With more than 25 years before retirement, this profile can absorb all market fluctuations. Monthly contributions of 200 euros with 80% in unit-linked (mainly Amundi MSCI World ETF) could reach approximately 180,000 euros in 25 years at 7% annual return on unit-linked, versus only 95,000 euros with a 100% euro-fund allocation at 2.50%. The 85,000-euro gap is nearly double the capital invested.
Profile 2: The established thirty-something (35-45) -- 35% euro fund / 65% unit-linked
Career is stable, the horizon remains long, but medium-term plans (children's education, second home) justify a larger safety cushion. The unit-linked portion can include 15% real estate (SCPI Corum Origin, SCI Capimmo) for return stability and decorrelation from equity markets.
Profile 3: The forty-something accumulator (45-55) -- 45% euro fund / 55% unit-linked
Earnings are at their peak, wealth is already built, retirement looms in 10 to 20 years. This is often when invested capital is at its highest, making fluctuations harder to bear in absolute terms. A gradual rebalancing toward safety starts to make sense.
Profile 4: The pre-retiree (55-65) -- 60% euro fund / 40% unit-linked
Protecting accumulated gains becomes the priority, but a total switch to euro fund would be premature. The unit-linked portion focuses on low-volatility assets: SCPI (regular income), dated bond funds (predictable maturity), diversified balanced funds.
Profile 5: The retiree (65+) -- 70-80% euro fund / 20-30% unit-linked
Capital preservation is the priority. However, keeping 20% to 30% in unit-linked funds helps combat inflation erosion and potentially transmit a larger estate. The unit-linked portion concentrates on SCPI (regular income and low volatility) and conservative funds.
| Profile | Euro fund allocation | Unit-linked allocation | Expected return |
|---|---|---|---|
| Young professional (25-35) | 20% | 80% | 6 to 8%/year |
| Established 30s (35-45) | 35% | 65% | 5 to 7%/year |
| Forty-something (45-55) | 45% | 55% | 4.5 to 6%/year |
| Pre-retiree (55-65) | 60% | 40% | 3.5 to 5%/year |
| Retiree (65+) | 70-80% | 20-30% | 3 to 4%/year |
The glide-path method: gradually securing your portfolio
The glide path consists of progressively increasing the euro-fund share as you approach your goal or retirement. This method automates the transition between the accumulation phase (dynamic) and the decumulation phase (conservative).
| Years to goal | Euro fund share | Unit-linked share |
|---|---|---|
| 30 to 20 years | 20% | 80% |
| 20 to 15 years | 30% | 70% |
| 15 to 10 years | 40% | 60% |
| 10 to 5 years | 55% | 45% |
| 5 to 0 years | 70% | 30% |
In practice, the glide path involves an annual switch of 2 to 3 percentage points from unit-linked to euro fund. For a 100,000-euro policy, that means switching roughly 2,000 to 3,000 euros per year from unit-linked to euro fund. On fee-free online policies (Linxea Spirit 2, Lucya Cardif, Boursorama Vie), this operation is free and has no tax impact.
Insurer constraints on euro funds
For several years, many insurers have required a minimum percentage of unit-linked holdings to access their euro fund or to qualify for the best return rate. These constraints vary by policy.
Some policies require at least 30% in unit-linked for any contribution to the euro fund. Others offer a return bonus of 0.50 to 1.50 points on the euro fund if you hold at least 40% to 60% in unit-linked. A few policies remain accessible at 100% euro fund, but often with a return 0.50 to 1 point below the bonus rate.
Tip: meeting the unit-linked requirement with low-risk vehicles
If your insurer requires a 30% minimum in unit-linked, you do not have to invest in equities. Low-volatility unit-linked funds let you meet the requirement while limiting risk: dated bond funds (target yield of 3.5% to 5%, moderate risk), real-estate SCI (yield of 3% to 4%, low volatility), money-market funds (yield ~3% in 2024, near-zero risk). This way, you access the best euro-fund rate without excessive equity exposure.
The impact of inflation: the silent enemy of 100% euro fund
Inflation is often overlooked in wealth calculations, yet it poses a real risk for overly cautious savers. At 2% annual inflation, today's 100,000 euros will be worth only the equivalent of 82,000 euros in 10 years and 67,000 euros in 20 years in purchasing-power terms.
A euro fund yielding 3% gross produces only 1% real return (after inflation). After social-security levies of 17.2% on gains (net return of 2.48%), the real return falls to 0.48%. Over 20 years, 100,000 euros in euro fund grows by only 10,000 euros in real terms. That is better than the Livret A, but insufficient to fund a meaningful retirement supplement.
By contrast, a diversified portfolio with 50% unit-linked (average 5% return on unit-linked, 3% on euro fund, for a 4% weighted average) delivers 2% real return per year. Over 20 years, the capital grows by 49,000 euros in real terms. The difference of 39,000 euros is a concrete illustration of the opportunity cost of an all-euro-fund strategy.
The "all or nothing" mistake
The worst strategy is often one of extremes. A 100% euro-fund policy protects you from visible volatility but exposes your savings to the slow, certain erosion of inflation. A 100% unit-linked equity policy exposes you to temporary drops of 30% to 40% that are psychologically very hard to bear, even knowing that history rewards patience.
The right allocation is the one that lets you sleep at night while putting your money to work effectively. Take time to define your profile honestly, without overestimating your risk tolerance during bullish periods. A simple test: ask yourself how you would react if your policy lost 25% of its value in a few weeks. If that prospect is unbearable, reduce your unit-linked exposure and find the comfort threshold that will let you stay invested calmly over time.
Conclusion
The allocation between euro funds and unit-linked funds is the most structurally important decision in your life insurance policy. It must faithfully reflect your investment horizon, risk tolerance and objectives. Modern policies like Lucya Cardif, Linxea Spirit 2 and Placement-direct Vie provide the tools needed to build a diversified, low-cost allocation: high-performing euro funds, low-cost ETFs (Amundi MSCI World, iShares Core S&P 500), quality SCPI (Corum Origin, Remake Live, Iroko Zen) and dated bond funds. The key is to find your balance between safety and performance, then adjust it progressively over time using the glide-path method.
Disclaimer
The information in this article is provided for educational purposes and does not constitute personalised investment advice. Past performance is not indicative of future results. Unit-linked funds carry a risk of capital loss. Assess your personal situation and consult an adviser if necessary.