Where to transfer Axa Life Europe index tracking investments

S

SPC100

Registered User
Messages
1,059
Hi,

I have some investments tracking major international stockmarkets within an Axa Life Policy.

Axa Life has not been accepting new business (for two or three years).

They recently closed several of their funds (e.g. Index tracking funds for Europe, Japan and Pacific Rim), and forcefully transferred me into money market accounts.

I fear they will close more funds in the future, or that the actual costs of managing the funds may increase as the funds become smaller. So I need to find a new home.

Background/Attitude to risk: I have a good job. I have rainyday cash in the bank. My mortgage is a tracker, so I am not interested in paying it down. I have no other debt. I will max out my pension contribution tax relief. There is a chance that I would want to cash in this investment for a house deposit, but that looks very unlikely at the moment given current house prices. I am happy to fully invest it in the stockmarket.

As per "A random walk down wall street" and academic studies, I am interested in a tax efficient, low cost, long term investment that will track the stock market indexes.

Tax note: My Axa life investments are up (need to check, but I guess about 30% up), so I will have a tax hit if I transfer out.

What would you do?

Any suggestions for where I should transfer my investment?

Thanks!
 
SPC

To be fair to AXA they allowed a free switch out of their policy when they announced they would be closing down their Irish investment service.

However, a term of less than 8-12 years would be unsuitable for an equity investment.

If there is any chance you will move house in the next 10 years the best (as in most prudent) advice would be to pay down the mortgage.

It's not very exciting but then investing is supposed to be boring otherwise you are probably doing it wrong.
 
Thanks for the reply Marc.

I have an appetite for some more risk than paying down my mortgage. I understand the prudence of paying down the mortgage and I understand the risk involved with equity (I have been invested/investing in stock market indexes for maybe 15 years)

My reasoning:

My tracker has a very low margin, the LTV is not at all worrying, and the monthly repayments are not that high. So the return on paying this down is very low at present.

The area that will suits us best to live over the next 15 years will change at least 3 times, so technically renting would suit us best.

I plan to keep this house for life and at some future stage rent it out, so some tax relief would be useful.

The remaining term of this mortgage is 15 years, meaning if we do decide to buy in 5 years this mortgage will be significantly lower.

We could also sell the existing home, if we found a dream home, and really decided we had to buy it.

We also have strong earnings to build savings further over the next decade.
 
If you had a lump sum and wanted a tax efficient, low cost, long term investment that will track the stock market indexes what would you do?
 
Hi SPC

Will you not have to take a tax hit anyway after you hold the investments for 8 years?

So take the tax hit now and get it over with. The only way you will save tax is if the fund falls in value and you no longer have a capital gain.

Given that you are maxing your pensions, the lowest cost and most tax efficient strategy is to buy a portfolio of shares directly.

Brendan
 
Brendan, If Axa didn't close their doors, there would be a taxable event on the 8 year anniversary. But on the 8 year anniversary, it is more advantageous to stay in the same product than cash out and switching to another life assurance product.

I am about 5 years into the investment.

Taking the tax hit now, mean's I have a substantial sum of money that will not be earning a return for me for the next 3 years. But that point is mute, as Axa, is effectively forcing me to cash out, so this thread, is about where to invest next.

I understand that a long term buy and hold direct share strategy in several international markets is not so easy?

I was hoping with advances in ETFs etc., there would be some other provider in the Irish market, offering a product tracking international indexes at .5% AMC.
 
You must log in or register to reply here.
Back
Top