European investor: bonds vs 'assurancie vie' for the fixed income part of one's portfolio

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galepoggi
Posts: 36
Joined: Sun Oct 31, 2021 2:44 am

European investor: bonds vs 'assurancie vie' for the fixed income part of one's portfolio

Post by galepoggi »

I have some 'assurance vie' investments for the fixed income part of my portfolio (about 500 KE in 'assurance vie'). With this investment (which was develped in France initially to give the incentive to people to invest in government bonds), you are garanteed the capital invested (assuming you invest in the 'fond en euros'), and every year you get some 'interests' which are known at the beggining of the following year (in practice for 2021 it has been between 1 and 2% depending on the contract).
I am now moving abroad and I don't know if I should keep this investment or sell it and add he money to a global bonds ETF.
The way I see it, the advantages of keeping it are:
the capital in euros is garanteed (at least in nominal terms) whereas a global bonds ETF will have currency risk and for the euro part the negative rates of the bonds, so it could result in losses.
The disadvantages are:
It would be less liquid of an ETF and probably more complicated when it comes to taxation rules in my future country of residence. So might not be worth it since anyway I would not expect to get more that 5000-10000 E/year with it.

Would appreciate your advice. Perhaps other Bogleheads have a similar situation?
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Lauretta
Posts: 1157
Joined: Wed Jul 05, 2017 6:27 am
Location: UK (temporarily)

Re: European investor: bonds vs 'assurancie vie' for the fixed income part of one's portfolio

Post by Lauretta »

I had one of those but ended up selling gecause of the law Sapin 2 introducing liquidity Risk
When everyone is thinking the same, no one is thinking at all
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