Long Term Savings Performances: The 40 Year Track Record of Afer Funds

Abstract

Long term savings can bring a sizable amount of wealth. The Afer life contract, an innovation introduced to the French market 40 years ago, highlights the power of such long term
performances. This note describes the nature of the product and compares its financial
performances over the 40 years. In a period particularly favorable to bonds, since yield went
down from 15% to almost zero, we show that equities can do even better. The benefits of
balanced funds and simple smoothing techniques recall that risk management is a major
value added by the insurance industry to the savers.