I also read there was no downgrade or negative view of the papers bought by the funds (AAA and AA) by rating agencies (for what they're worth...), just no liquidity so the usual technique of valuation by looking at the transactions don't work hence the one month valuation freeze (and not closure of the funds).
You can put lots of thing in your assurance vie portfolio, but funds labelled "100% capital guaranti" will not go under 100% so no problem for you (only risk if the seller of the fund cheats and the management company blows out but that's really really low).
From Felix Salmon:
http://www.portfolio.com/views/blogs/market-movers/2007/08/09/bnp-paribas-funds-a-non-story-with-big -consequences
BNP Paribas Funds: A Non-Story With Big Consequences Why all the fuss about these BNP Paribas funds? They're long-only funds which own some very illiquid paper, and as a result they're impossible to value accurately. If someone wants to withdraw money from a fund, you first have to know how much the fund is worth. Since the fund managers don't know how much the funds are worth, they're not letting people withdraw money until they do know how much the funds are worth. There is no chance of the funds being wiped out, like the Bear Stearns hedge funds were, since they're long only. And yet stock markets around the world are falling in response to this non-news, there's a flight to quality, and BNP Paribas stock has dropped over 5% - despite the fact that it's other investors' money we're talking about, here, not BNP Paribas's own. All I can conclude from this is that the market is very, very nervous, and will sell on just about anything.
Why all the fuss about these BNP Paribas funds? They're long-only funds which own some very illiquid paper, and as a result they're impossible to value accurately. If someone wants to withdraw money from a fund, you first have to know how much the fund is worth. Since the fund managers don't know how much the funds are worth, they're not letting people withdraw money until they do know how much the funds are worth. There is no chance of the funds being wiped out, like the Bear Stearns hedge funds were, since they're long only.
And yet stock markets around the world are falling in response to this non-news, there's a flight to quality, and BNP Paribas stock has dropped over 5% - despite the fact that it's other investors' money we're talking about, here, not BNP Paribas's own. All I can conclude from this is that the market is very, very nervous, and will sell on just about anything.
BusinessWeek on the ECB action:
http://www.businessweek.com/globalbiz/content/aug2007/gb2007089_266456.htm
[...] Another, bigger, shoe dropped later Thursday. The European Central Bank, in a move to calm market nerves and enhance liquidity in the European money markets, said it planned "a liquidity-providing tender of one-day securities" totaling €94.8 billion ($130.5 billion)--basically, an injection of available funds into euro zone money markets to soothe frayed market nerves. [...]
Note that this is more in absolute term than what was done afte WTC attack (70 billion euros) but a tad less by some relative measure.
So it's huge, I guess the ECB want the banks to buy some of the junk papers themselves and put them in some closet until the mess is sorted out and "normal" valuations are happening again (there will be losses of course, but not 100%).
http://www.eurotrib.com/story/2007/8/9/123641/8918#3
Assurance Vies have two kind of funds, you have "unité de compte" and "euros". If your advisor didn't explain the differences clearly, you still have wikipedia:
http://fr.wikipedia.org/wiki/Assurance_vie
On distingue deux types de contrat : * Les contrats en euros ; * Les contrats multisupport, qui comportent à la fois un fonds en euros et des unités de compte. Les sommes versées sur un contrat en euros, tout comme celles placées sur le fonds en euros d'un contrat multisupport, sont garanties par l'assureur : elles ne peuvent pas baisser et sont revalorisées chaque année d'un intérêt ; la participation aux bénéfices (parfois composée d'un taux minimum garanti connu d'avance et d'un taux variable connu en fin d'année). En contrepartie de cette sécurité, les gains sont généralement limités. Les unités de compte disponibles sur les contrats multisupport peuvent être des actifs financiers de tout type (le plus souvent des fonds en actions ou obligataires). C'est l'assureur qui détermine les unités de compte proposées pour chaque contrat. Les sommes investies sur les unités de compte ne sont pas garanties et présentent donc un risque pour le souscripteur.
* Les contrats en euros ; * Les contrats multisupport, qui comportent à la fois un fonds en euros et des unités de compte.
Les sommes versées sur un contrat en euros, tout comme celles placées sur le fonds en euros d'un contrat multisupport, sont garanties par l'assureur : elles ne peuvent pas baisser et sont revalorisées chaque année d'un intérêt ; la participation aux bénéfices (parfois composée d'un taux minimum garanti connu d'avance et d'un taux variable connu en fin d'année). En contrepartie de cette sécurité, les gains sont généralement limités.
Les unités de compte disponibles sur les contrats multisupport peuvent être des actifs financiers de tout type (le plus souvent des fonds en actions ou obligataires). C'est l'assureur qui détermine les unités de compte proposées pour chaque contrat. Les sommes investies sur les unités de compte ne sont pas garanties et présentent donc un risque pour le souscripteur.
"unités de compte" funds can be either 100% capital garantis or not, it depends on each fund and you have to read carefully the documentation available on AMF web site, the "marketing" documentation is usually not enough (I hate that).
Being invested in AAA or AA stuff is not a "100% guaranti" of no loss.
Last detail: even in "100% capital garanti" unité de comptes funds, the fund value can go below 100 before maturity, the "garanti" is only valid for the maturity date of the fund so you may have to wait until maturity to get back your 100 (and of course you lost the "risk free" rate which is about 4-5% per year these days, what you would have earned on a euro fund or a longer term deposit).
