SICAV Returns: How Do They Work and What Can You Expect?

How is the return of a SICAV generated?

The total return of a SICAV is the sum of two components, whose relative importance varies depending on the fund category and how it operates.

The rise in net asset value

The net asset value (NAV) is the price of one SICAV share at a given point in time. It rises when the assets held in the portfolio increase in value, and it falls in the opposite case. If you buy SICAV shares at €100 and the NAV rises to €115 one year later, you realize an unrealized gain of 15%.

This increase depends directly on the markets in which the fund is invested. A European equity SICAV will rise with European stock markets. A bond SICAV will be influenced by interest rates. A money market SICAV will closely track short-term interbank rates.

Distributed income

Some SICAVs periodically distribute the income generated by their portfolio: equity dividends, bond coupons. These payments make up part of the total return. If your SICAV distributes €3 per share and the NAV is €100, the distribution yield is 3%.

Important: when a distribution is made, the net asset value is reduced by the amount of the dividend paid. No additional value is created: the distributed return is taken out of the fund, not added on top. To compare two funds, one distributing and one accumulating, you should always look at total performance, meaning NAV change plus reinvested dividends.

Distribution shares vs accumulation shares

A SICAV can offer two types of shares for the same portfolio. Distribution shares pay income to shareholders in the form of dividends, which can be useful if you are looking for a regular income supplement. Accumulation shares automatically reinvest that same income into the portfolio, which increases the NAV without any visible payout. Over the long term, accumulation supports capital growth through the effect of compound interest.

Expected returns by SICAV category

Why equities outperform over the long term

Over 10-, 15-, or 20-year horizons, equity SICAVs have historically generated the highest returns among the main categories of collective investments. That is no coincidence: investing in equities means financing companies and taking part in their economic growth. In return, the risk is higher in the short term, with sometimes sharp correction phases (2001, 2008, 2020).

The key is the time horizon. An investor who held a diversified equity SICAV for 15 or 20 years has, in the vast majority of historical settings, had a high probability of achieving a positive and meaningful performance. By contrast, someone who sold during a market crash often locked in a loss that would have faded over time.

The special case of money market SICAVs in 2024-2026

After a long period of near-zero rates (2015-2021), when money market SICAVs generated almost nothing, the rise in policy rates in Europe made this category attractive again. In 2023 and 2024, some money market SICAVs posted returns close to 3% to 4%, making them a particularly useful short-term cash management or waiting tool. This environment can still change: the return of a money market SICAV follows European Central Bank decisions, both upward and downward.

The impact of fees on net return

A fund’s gross return is what the assets earned. Net return is what you actually receive after fees are deducted. And that gap can be substantial over the long term.

The cumulative effect of ongoing charges

A SICAV’s ongoing charges, expressed as an annual percentage of assets, are deducted every year, whether the fund performs well or not. Over 10 years, a fund with 2% annual fees costs you much more than an equivalent fund with 0.5% fees, assuming the same gross performance.

Numerical example: the impact of 1% extra fees over 20 years

Initial investment: €10,000. Annual gross performance: 6%.

With 0.5% annual fees: net return of 5.5% → final capital: €29,178

With 1.5% annual fees: net return of 4.5% → final capital: €24,117

Difference: more than €5,000 over 20 years, or 50% of the initial investment, for just 1% extra fees per year.

Entry fees: an immediate impact on the break-even point

Entry fees, charged when you subscribe, immediately reduce the amount actually invested. If you invest €10,000 in a fund with 2% entry fees, only €9,800 is actually invested. The fund therefore has to rise by more than 2% before you even break even. The higher the entry fees, the longer the holding period needed to absorb them.

Performance fee: read carefully

Some funds charge a performance fee when they exceed a predefined return target. This mechanism can align the interests of the manager and investors, but its structure deserves careful reading. A fund may charge a performance fee even if its absolute performance is negative, provided it has fallen "less" than its benchmark. This mechanism, legal but not very intuitive for retail investors, is described in the prospectus.

How to read and compare SICAV performance

Compare over long, consistent periods

A one-year performance can be excellent for the wrong reasons (high risk-taking, a bubble sector) or disappointing for the right reasons (a defensive strategy that protects over time). Always look at performance over 3 years, 5 years, and 10 years to get a more reliable picture of the fund’s consistency. The KIDs and monthly reports systematically publish this data.

Compare against the right benchmark

The benchmark is the reference index against which the performance of an actively managed fund should be measured. A European equity SICAV that gains 8% in a year when the European market rises 15% has not performed well: it has underperformed its index by 7 points. By contrast, a SICAV that loses 5% when its index falls 20% has done an excellent job of protecting capital.

The benchmark is stated in the fund documentation. Check that it is relevant to the stated strategy, and use it consistently in your comparison.

Gross performance vs net performance after fees

All performance figures shown in the KID and reports are expressed net of ongoing charges (the net asset value already reflects the deduction of management fees). However, entry and exit fees are generally not included in these figures. To calculate your real personal return, you therefore need to subtract the entry fees paid at subscription.

To go further in analyzing a fund, it can also be useful to understand the differences between SICAV and FCP, two structures that look very similar but have legal and operational differences.

Mistakes to avoid when assessing SICAV returns

Choosing a fund based only on recent performance

The fund that performed best last year is often the one that took the most risk or was invested in a fashionable sector. Betting on the "best fund of the year" is one of the least effective strategies statistically. Academic studies regularly show that funds at the top of the rankings one year have little chance of repeating that performance the following year.

Confusing distribution yield with total return

A fund that "pays 4% in dividends per year" does not necessarily have a total return of 4%. If the net asset value fell by 6% over the same period, the total return is negative 2%. Always look at total performance (NAV change plus reinvested dividends), not just the distribution rate.

Ignoring the impact of taxation on the final return

Net return after fees is not the same as net return after tax. Depending on the wrapper used (taxable securities account, PEA (French equity savings plan), assurance-vie (French life insurance investment wrapper)) and the holding period, taxation on capital gains and income can significantly change your actual return. Thinking in terms of after-tax return is the only honest way to compare two investments held in different wrappers.

Choosing the right SICAV for your investor profile