Expats seeking a regular income from capital should investigate SCPI options with DTB Wealth Management – these secure investment options can’t be beaten by any other income-generating solution.
Expats in France seeking secure investments might find that French financial advisers push clients towards home-grown “Fonds Euro” options. The closest UK equivalent is the bonds-based UK Gilts. But Daniel Butcher, Founder of DTB Wealth Management and bilingual investment specialist, says that while these once provided investors with 5% interest rates, over the last decade the rates have shrunk significantly.
“Every year in February insurers come out with their ‘fonds euro’ and were managing to boost their performances with personal savings if necessary, thus guaranteeing 5%,” said Daniel. “But today the top performers give 1% – it’s a disaster.”
Yet by having a carefully-selected portfolio, and working with an experienced and knowledgeable investment adviser, it is possible to make an investment from which you can live off the interest for as long as required.
Expats seeking income generation from lump sums should investigate Société Civile de Placement Immobilier (SCPI) options, otherwise known as “SCPI de rendement”, which translates as “income-generating SCPI”. These are managed by “Real Estate Asset Managers” or REAMS.
DTB Wealth Management has access to 96 different SCPIs. “Each REAM has a portfolio of ten to more than one hundred thematically, geographically, diversified real estate assets,” said Daniel. “In fact, most of the buildings we spend our lives in belong to these REAMs, such as Tesco, Marks & Spencer and Credit Agricole, as well as hospitals and residential homes for seniors.”
One recent client, “John Smith”, is a British man and French tax resident living in France. He had €100,000 from which he wanted to generate a regular, steady income of around 5-6%. Before coming to DTB Wealth Management he had been recommended Assurance Vie solutions, but none could guarantee a steady income.
John approached DTB Wealth Management looking for a solution that was more “income-generation dedicated” and invested in the “SCPI de rendement”.
One of Daniel’s favourite SCPIs is Epargne Pierre, managed by Atland Voisin, which is diversified between warehouses, offices and hospitals. “Its tenants are 100% professional, including E.Leclerc and Banque Populaire, with solid backgrounds,” said Daniel.
Each share was worth €205 until 1 November and is now worth €208, so John Smith bought 480 shares, costing €99,840. Due to the standard “période de jouissance” he will not receive an income for the first six months, but after that he will receive €5,348 over the course of the year, or €1,337 per quarter.
“The capital invested will also grow at an average rate of 1.2% per year, as this is the average growth of investment property in France,” said Daniel. “So, if John decided to go back to the UK after 15 years, for example, he could sell his shares in ten working days and walk away with €107,569 after receiving income of €5,348 per year. This makes a total enrichment over 15 years of €87,850.”