I am planning to purchase a primary residence in 5 years.
I currently have approximately 20k€ to invest today dedicated to this purchase. In addition, I will be saving 1k€/month for this project over the next 5 years to build up the total down payment.
I want minimal volatility for this portion because its withdrawal could be brought forward if a suitable property comes up before the end of the 5 years.
At the end of the 5 years, the entire amount will be withdrawn for the purchase.
Several options are being considered on my end:
Life insurance (assurance vie) in euro funds
Bonds
SCPI with dismemberment (usufruit/nue-propriété) (not ideal if I want to bring forward the purchase in case a property is found before the term)
…
Currently, this amount is in a Fortuneo livret+, but the performance is not very satisfactory.
First step, define the actual amount of the down payment, because here we’re looking at 80k€ (20k€ + 12k x 5), will you need 80k for the down payment.
I would personally forget about SCPI because it’s not liquid even when not dismembered and some can be volatile.
You can include a bit of stocks (around 10/15% for example) depending on what you’re looking for, if you’re seeking good potential performance but with stock market risks.
Also look at Term Accounts, some banks offer progressive rates over 5 years, but there’s a penalty if you leave early
Today this amount is in a Livret+ Fortuneo account, but the performance is unsatisfactory.
Nothing magical: a liquid risk-free pocket will have very low performance, if you want performance, you need to accept more risk or a certain illiquidity
For a not too defined horizon I would have told you to go for a stocks/bonds/futures allocation with a good return/volatility compromise like I do.
Given that your horizon is very precise I wouldn’t take any risk and would go for savings account + euro funds. Possibly a short-term (less than 1 year) sovereign bond ETF which will quickly benefit from the recent rate increase. Hedged in euros obviously.
I agree with you on the return/risk trade-off, but I would add some nuance regarding liquidity, where the trade-off is not necessary. You can absolutely adjust the level of return and risk through your asset allocation while maintaining very good liquidity, as long as you avoid wealth management products like SCPIs (real estate investment trusts) / structured products.