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Axa leaves protection open-ended

Axa Investment Managers has established the second series of the Axa capital protected fund, an Oeic that is linked to the performance of the FTSE 100 Total Return index.

The FTSE 100 Total Return index includes dividends, which makes this fund stand out as most structured products linked to the FTSE 100 do not benefit from dividends.

Investors will get their original capital back, less the initial charge, at the end of the six-year investment term or 75 per cent of the highest value of the fund. There is an initial charge of up to 3 per cent which is used to pay initial commission to IFAs.

The fund uses constant proportion portfolio insurance (CPPI). This means that if the value of the index goes up , the value of the CPPI portfolio also rises, although not as much as the index. Similarly if the stockmarket goes down, the CPPI portfolio will also go down but not as much as the index. There is also a lock-in feature which kicks in when 75 per cent of the funds value is greater than the current protected value to protect gains from subsequent market falls.

Investors may find the payment of dividends within a capital-protected product appealing as they can improve the overall return. However Keydatas UK protected growth plan also benefits from dividends but does this by investing in an exchange-traded fund.

However, the Keydata product is not designed to protect the original capital instead it will return 100 per cent of the funds value but locks in 80 per cent of its highest value. As a result some investors may feel it does not have Axas comfort factor of protecting the original investment.

The minimum investment for the Axa product is high at 40,000 compared with the Keydata products 3,000 minimum. Keydata also has the advantage of being eligible for Isas and Pep transfers, while the Axa product is not.


SII creates high-level compliance diploma

The Securities and Investment Institute is setting up a new high-level compliance qualification. The diploma in investment compliance is the first of its kind for staff working in the securities and investment sector. The exam will consist of three modules. The first paper will be an introduction to investment, the second focuses on the FSA […]

CTF approval for Homeowners Friendly Society

Homeowners Friendly Society today has gained accreditation as a provider of the Governments new child trust fund. The Harrogate-based society passed all three stages of stringent checks and has now secured full Inland Revenue approval to provide the savings product. Chief Executive Andrew Haigh says: “This a significant development. Becoming a provider of the Child […]

Bristol & West launches new mortgage products

B&W will be launching new products on November 3 2004. The products include a standard discount and standard fixed mortgage and self-certification opens. Bristol & West&#39s Don Toller says: “We are very pleased to be able to lauch these in the same week as the start of mortgage regulation. We are very confident about M-Day.”

Credit record was ‘stolen’ on holiday

Concern is growing over the way that lenders’ IT systems deal with credit checks after an IFA’s client was mistakenly branded with a poor credit record after remortgaging her home.


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