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France's FCPE funds lose 22.9% in year to July

FRANCE- France’s employee investment funds reported negative returns on equities in the year to July, according to French asset management association, AFG-ASFFI, and investor information provider, EuroPerformance.

The fonds communs de placement d'entreprise, or FCPE as they are more commonly known, which invest 75% or more in equities, produced a negative return of –22.9% over the one-year period. They faired better, however, than general French investment funds investing in domestic equities, which returned –24.5%, and international equities which lost 25.1%.

Those FCPE with 75% or more invested in bonds returned +2.6%, below bond-targeting French investment funds, which returned +3.9%. The difference in performance is attributed to the FCPE holdings of up to 25% in equities.

Diversified FCPE produced negative returns whether convertible- or bond- or equity-biased (investing 40% or more in one asset class). Those predominantly investing in bonds naturally lost less than the other two sectors, returning –3.3%. Convertible-weighted FCPE and equity-weighted FCPE produced return of –10.2% and –13.6% respectively.

Over the long-term, however, FCPE, whether bond- or equity-biased, have produced positive returns. Diversified FCPE with majority holdings in equities have seen greatest annual returns over a five-year period, producing +5.6%. Pure bond FCPE (75% or more invested in bonds) have returned the least over the same time span - +3.2%.

Pure equity FCPE (75% or more invested in equities) are reported as having produced an average annual return of 4.9% over five years, and 8.3% over ten years.

683 funds belonging to AFG-ASFFI contributed to the results, with e11.07bn in assets. Of this e11.07bn, e1.12bn is from equity FCPE, e3.05bn from bond FCPE and e6.9bn from diversified FCPE.

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