France’s political turmoil: why it favors Smart Overnight & High Yield ESG ETF investments

France is facing a rare blend of political and economic uncertainty. Government reshuffles, budget tensions, and warnings from rating agencies have raised volatility across financial markets. Yet, for individuals and companies managing treasury, uncertainty can be turned into an advantage — if liquidity and flexibility are prioritized.

At Velesios, we see today’s environment as an ideal moment to reinforce Smart Overnight ETF (LU1190417599) for stability, while preparing to add Amundi EUR High Yield Corporate Bond ESG ETF (LU2346257210) when monetary easing gathers pace.

The backdrop: political paralysis and economic slowdown

• Political instability: following government reshuffles and parliamentary gridlock, investors are increasingly cautious about French assets.
• Rating agency pressure: several agencies have hinted at possible downgrades if budget discipline weakens further.
• Slowing growth: business confidence and consumer spending are softening under the weight of uncertainty.
• Low deposit rates: the regulated Livret A rate fell to 1.7% on August 1, 2025, highlighting the cost of idle cash.

In short: volatility has returned, and holding liquidity efficiently is again a key priority.

Smart Overnight ETF: protecting liquidity in turbulent times

When markets face domestic shocks, the safest move is to hold euro money-market exposure with daily access and minimal credit risk.

• Low risk, daily yield: Smart Overnight tracks euro money-market rates directly linked to the ECB deposit rate.
• Flexibility: funds remain accessible at any time, unlike term deposits or structured products.
• Attractive carry: even as uncertainty rises, ECB rates (currently 2.00% deposit facility) continue to provide a positive yield buffer.

For companies and individuals alike, Smart Overnight acts as a “liquid safe haven”, protecting treasury while earning daily interest.

Preparing for the next step: High Yield ESG ETF when rates fall

As political stress weighs on the economy, pressure mounts for the European Central Bank to continue easing after June’s first 25 bp rate cut.
When rates move lower:

• Bond prices rise as yields decline.
• High yield credit — such as the Amundi EUR High Yield ESG ETF — typically outperforms money-market funds.
• ESG screening ensures diversification and alignment with responsible finance principles.

In short, Smart Overnight secures the present; High Yield ESG prepares for the rebound.

A balanced approach through Velesios

1. Today: overweight Smart Overnight to manage liquidity amid political uncertainty.
2. Later: as visibility improves and rates head down, gradually increase exposure to Amundi High Yield ESG.
3. Result: a treasury allocation that performs across market cycles, combining defense and opportunity.

With Velesios, both individuals and companies can implement this barbell strategy easily:

• open a securities account directly on the platform,
• execution and custody managed via Interactive Brokers,
• lower fees through order aggregation,
• and a clear dashboard to monitor rate-sensitive products.

Conclusion

Political noise doesn’t have to hurt treasury performance. It can highlight the value of liquid, flexible allocation.

By combining Smart Overnight and Amundi High Yield ESG, investors can benefit from short-term stability and medium-term upside — a pragmatic approach for uncertain times.

FAQ: how French instability affects your treasury strategy

Should I hold more cash now?
Yes, but not idle. Use money-market ETFs like Smart Overnight to keep liquidity working for you.

When should I buy High Yield ESG?
As ECB cuts deepen and spreads widen, step into the position gradually.

Are these ETFs safe?
Smart Overnight carries very low risk; High Yield ESG is diversified and ESG-filtered, reducing credit concentration.

Can both individuals and companies invest?
Yes — both can open an account directly through Velesios and access these ETFs.

Sources & references

• Reuters – France faces budget and rating challenges amid political crisis (Oct 2025)
• The Guardian – French government in turmoil after parliamentary gridlock (Oct 2025)
• Euronews – Economic uncertainty rises as France’s political stalemate deepens (Oct 2025)
• European Central Bank – June 2025 policy decision: 25 bp rate cut to 2.00% deposit facility
• Service-Public – Livret A rate set at 1.7% since August 1, 2025

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