Protect your savings from inflation with Wallet

The opposite also applies - if interest rates fall, Wallet’s value rises more sharply. This product performs best during periods of falling interest rates. Aside from interest rate risk, other types of risk are negligible. You are protected against issuer bankruptcy (e.g., governments or companies) included in the portfolio due to broad diversification among many bonds and exclusively using high-credit-rating bonds (so-called investment-grade instruments). For ETFs tracking central bank interest rates, investors also bear counterparty risk arising from swap contracts through which the fund achieves this yield. Counterparties are large banks (e.g., Société Générale, Deutsche Bank, etc.). However, strict regulation protects you sufficiently against this risk. Within the fund, the risk from a single counterparty cannot exceed 10%. Swaps are fully collateralized. Only amounts over 500,000 euros may not be fully collateralized in derivatives, which is negligible given funds managing billions of euros. In case of counterparty failure, the fund’s assets remain in the exchange basket (quality bonds, possibly stocks).

If you want to avoid the harmful power of inflation, do not leave your short-term savings in a regular account; otherwise, their purchasing power will be less when you need them. European households deposited a whopping €9,555 billion. With a 2% inflation, this amount drops by almost €200 billion. However, if you have savings on a bank account that you will need in 3 or more years and can leave invested longer, you don’t have to restrict yourself to conservative investing in Wallet. In that case, we recommend considering longer-term investing in ETFs that outperform inflation even more convincingly.

Also, for the annuity, we assume you will draw from your savings for at least 10 years. The product is designed for long-term income withdrawal from assets, for example, after retirement. This does not mean you cannot withdraw your money early if needed - the product has no lock-in, and you can request withdrawals anytime without fees. For exceptional cases, we made the annuity available from a 5-year horizon if you want to secure your children during university studies, for which you have been saving. For horizons shorter than 10 years, we offer only one risk combination - 30% stocks and 70% bonds.