Structured product from AXA Equitable blends upside potential, downside protection

Called Structured Capital Strategies ADV, the product will be distributed at first to fee-based advisors in the Commonwealth Financial Network.

AXA Equitable Life has introduced Structured Capital Strategies ADV, a product designed for fee-based advisors who want equity and commodity index-linked exposure with some downside protection.

The product is being launched through Commonwealth Financial Network, the nation’s largest privately-held independent broker-dealer and Registered Investment Adviser.  

Structured Capital Strategies ADV’s main feature is its Structured Investment Option that allows clients to participate in the performance of equity and commodity indices up to a cap and with a downside buffer.

The built-in buffer protects the initial negative 10%, 20% or 30% of loss in index value, depending on the investment option chosen. The downside buffer works in tandem with a Performance Cap Rate on the upside market potential.

For the June 15, 2011 S&P 500 Index one-year investment option, for example, a client would have downside protection for the first 10% of any loss in return for a minimum 10% cap on the investment upside.

“Structured Capital Strategies ADV represents a unique, tax-deferred option for investors who are seeking an acceptable risk-reward balance,” said Nick Lane, president of the Retirement Savings division at AXA Equitable. “This product gives fee-based advisors a new way to help shield their clients from some loss and ease them into investing for growth.”

Investment options in Structured Capital Strategies ADV include linked participation in the following equity and commodity indices, with 15 different segment types in durations of one, three and five years:

  • S&P 500® Price Return Index
  • Russell 2000® Price Return Index
  • MSCI EAFE Price Return Index
  • Gold Index – London Gold Market Fixing Ltd. PM Fix Price/USD. For IRA accounts only
  • Oil Index – NYMEX West Texas Intermediate Crude Oil Generic Front Month Futures. For IRA accounts only.

“For fee-based advisors, Structured Capital Strategies ADV offers a compelling diversification choice for clients who have an appetite for tax-deferred investing but are risk averse and want some protection against market loss. The product’s 1-, 3- and 5-year durations appeal to those clients who are looking for growth opportunities but don’t want or need a long-term, lifetime income product,” said Ethan Young, manager of Annuity Research at Commonwealth.

Segments in the product’s Structured Investment Option are made available for new investments on the 15th of the month or the next business day, at which time the Performance Cap Rate is also set.  At the end of each 1-, 3- or 5-year segment period, investors have the flexibility to re-allocate the maturity value of the segment to a new segment or transfer their account value to other investment options, depending on their needs and objectives.