Axa has increased its with-profits regular bonus payouts by an average of 75 basis points and market value reductions have fallen again in its latest update on the state of with-profits investments.
A statement issued this morning by Axa reveals investors in the Axa Sun Life bonds, pension and stakeholder pensions will receive an extra 0.75 percentage points on their previous bonuses, as “the good investment returns of the last two years have been consolidated in 2006”.
The firm claims payouts on maturing policies have in some cases increased by up to 6% compared with the previous period, while MVR have reduced to between 2% and 5% of a policy, to give a return of around 7% pa on 20-25-year policies while five-year bonds have increased in value by 9% and 10-year bonds have increased their value by 13%.
The Axa Sun Life bond now pays 2.5% compared with 1.75% in Feb 2006, while the personal pension pays a regular bonus of 2.5% compared with 1.75% earlier, and the stakeholder pension pays 3.75% compared with 3.5% six months ago.
That said, both of the Axa with-profits funds – totalling assets worth around £10bn – have either reduced their holding or held the current holding of equities, in favour of property and fixed interest investments.
The smaller Axa Sun Life – worth £.35bn – had at least 43% of the fund in equities in mid 2006, compared with 44% at the end of the 2005 but there is now no cash holding as 18% of assets are held in property and 39% is in fixed interest.
The larger SLAS fund has 42% in equities – unchanged – but now has 11% in property and 47% in fixed interest to reflect its investor base.IFAonline
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