Axa Australia will roll out a new guaranteed superannuation product that does not require an investor to sell down their portfolio in volatile market conditions.
Axa plans to leverage off its international capabilities with its new capital protection product by adopting the dynamic hedging technique used by Axa in the United States.
The product is expected to be launched to market in October.
The product targets pre-retirees and investors with more than $40,000 in rolled over superannuation.
“The main benefit you get from this kind of risk management as opposed to the other kind of risk management is that you don’t have to sell anyone out of the market at the low point,” Axa general manager of wealth management Steve Burgess said.
“The other big point is that it’s not only a capital guarantee, it will enable you to lock in your growth at various points.”
Burgess said the product would be market competitive as it not only stretched across super but also pensions.
“There are many factors in our product that differentiate us from the marketplace. You don’t have to sell down, it’s across super and pension, so the guarantee works in pension mode as well when drawing your money down. And we’re also protecting the growth,” he said.
The product will be available only through advisers, with investors having to pay a fee for the product.
Burgess said the fee would be based on the terms investors chose.
“There is a strong need and desire in the market for products like these. I think when we come to market with the price that we’re anticipating and the collateral that surrounds it, advisers will be very keen to know more,” he said.
“It will be through advisers only but not just Axa advisers. It will be accessible through independent financial advisers.”
Axa’s decision to launch the product follows a recent report commissioned by the financial services group.
The Axa Investor Trends report assessed investor attitudes towards investments.
The report found one in two investors did not have the confidence to invest for higher returns or try a more aggressive strategy.
Fifty eight per cent of investors surveyed recognised they should be doing more when it came to their finances.
More than 1000 investors took part in the survey.
