Doubts cast on AXA North
Research house Adviser Edge has warned that the popular AXA North product may have been oversold, saying many of the investment options offered in the product have a low chance of relative investment success.
Adviser Edge said the merits of the investment vary depending on the choice of term and asset allocation used in the strategy. The research house said that while a 10-year term with the most conservative strategy achieved a four star rating, all other combinations were rating as 3.5 or 3.75 stars.
According to researcher Geoff Watkins, quantitative testing of AXA North suggests it has been oversold.
“Overall quantitative results modelling indicated that only very long and/or strong bull markets give rise to performance that is better than that of a simple fixed interest fund,” the research house said.
“The combination of shorter-term cycles in the equity market and ongoing annual fees in the AXA North product depressed returns over long periods, particularly for the 15 and 20-year alternatives.
Furthermore, Adviser Edge found that the five to seven-year guarantee alternatives rarely provide value to an investor, yet require the annual fees to be paid for the full term.”
AUTHOR
Recommended for you
An former financial adviser based in Sunshine Coast has been permanently banned by ASIC after being sentenced to six years imprisonment for fraud
This senior consultant has emphasised why ‘playing the long game’ of cultivating a desirable work culture is vital for high-performing financial advice firms and their teams.
With superannuation funds and financial advisers being the top two sources of information for retirees, a TAL white paper has revealed which they turn to first.
Newly launched wealth technology platform HeirWealth has appointed multiple senior industry figures to its advisory board including former MLC CEO Geoff Lloyd as chair.
