AXA IOM launches Autobalancing fund

AXA Isle of Man has teamed up with The Royal Bank of Scotland (RBS) to develop the AXA IOM Autobalancing fund.

Designed to help investors time movements in and out of market sectors, it is exclusively available through the AXA Isle of Man offshore bonds.

The fund aims to offer diversified asset exposure to established equity markets, emerging equity markets, worldwide property and commodities by purchasing a bespoke security issued by RBS. The fund monitors these market sectors daily.

On a monthly basis, the fund can divert out of individual sectors into a money market fund when a downward trend is detected or volatility exceeds normal parameters.

Furthermore, it can switch out of individual sectors into the money market fund when volatility tops pre-determined limits, on a daily basis.

However, the fund remains poised to reinvest back into any sector when a positive trend returns, or when volatility goes back to normal. This prevents it becoming locked in cash.

Key features of the fund include:

• Diversified investment, as the fund seeks to capitalise on any growth in the markets
• Responsiveness to market changes as it utilises a rules-based mechanism to overcome timing investments in or out of each market sector or money market fund
• Rebalancing of the fund every month to restore an equal weighting of 25% in each market sector, to prevent overexposure
• Flexibility as it is open-ended with daily dealing

The minimum investment for the fund is £2,500, while minimum investment for bonds is £15,000 or £50,000 in the single premium products.

Exclusing bond charges, which are variable, the fund has a 1.5% AMC.  There is no initial fund charge or performance fee.

"The AXA IOM Autobalancing Fund is designed to seek positive returns when markets rise and to limit losses when markets are falling or become volatile," says Mike Foy, managing director, Axa Isle of Man.

"We wanted to provide an investment solution that resolves the risky issue of timing investments in to and out of a range of market sectors, with the added benefit of diverting part, or all, of the portfolio into the money market during times of high volatility.''