Axa Investment Management is market-testing an open-ended structured product designed to give partic...
Axa Investment Management is market-testing an open-ended structured product designed to give participation in stock market growth as well as protection from market downturns.
The product, which has the working title of Ascend, is to offer flexibility of investment length and timing, a choice of 70%, 80% and 90% protection with varying return options as well as a 'crash cover' feature designed to safeguard capital in the event of a downturn.
It will also feature a multiplier structure to boost asset exposure while locking away a portion of assets as a 'cushion' against market falls.
The product will be continuously available, rather than issued in tranches, making it the first Oeic-based product of its kind in the UK market.
Vincent De Martell, director of structured and alternative investment at Axa, said the product had been made possible by new Ucits legislation.
It will offer a choice of two underlying assets with different risk levels. It has not been decided whether the assets will be indices or baskets of funds. The assets will be split between equity and cash, with no maximum level of equity exposure.
It will be available via an investment bond and offer investors the ability to take an income. Axa has been talking to intermediaries about the design of the product since March and has pencilled a launch date some time during the summer.
Elements still under consideration include whether further protection levels should be offered to investors. There has been strong interest in protected and guaranteed products by a number of product providers at a time of falling and volatile markets.
In April, Investment Week reported Barclays Capital has devised a with-profits alternative which includes guarantees. The group is looking to sell the concept to life offices and fund managers.
It is designed to have a guaranteed minimum unit price, which is never less than 80% of the highest ever value of the fund's NAV.
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