Do I change from AXA Property To Distribtion or get out

chelsea4

Need some help as I am not as knowlegable as everyone here.

Took a 23K AXA Property fund in 2004. It did go up to 29K at one point. It is today at 19K. So after 5 years its lost £4000.

I spoke to our FPM August 2008 wanting to pay the 1% penalty and cash it in as it was then back to the original investment of 23K. He told me I had to give six months notice to do this and I would be better changing it to a AXA distribution fund untill August 2009 when I could cash it in with no penalty. As I said it is now down to 19K.

The six month notice period to change to a AXA distribution fund is 28th February 2009.....now. What am I supposed to do for the best as I know nothing about these things.

I think I have three choices,
Cut and Run and cash in the policy and pay £250 penalty.
Let it go ahead and get changed to the AXA Distribution fund.
Or leave it in the AXA Property fund.

I do know that savings rates are low at the moment but at least I could find something that was a bit more certain and secure than loosing anymore of my money as I dont have a lot to risk. I have no idea what time scale it will take with AXA to get this policy back to where it was to start with 23K.

I would be very happy with any help anyone can give me as I only have a week to decide.

gozomark

are you prepared to risk losing any more of your money ?

dunstonh

I spoke to our FPM August 2008 wanting to pay the 1% penalty and cash it in as it was then back to the original investment of 23K. He told me I had to give six months notice to do this and I would be better changing it to a AXA distribution fund untill August 2009 when I could cash it in with no penalty. As I said it is now down to 19K.

AXA tied reps arent allowed to portfolio plan. This is reflected in the advice you are getting with 100% into one fund being discussed.

I do know that savings rates are low at the moment but at least I could find something that was a bit more certain and secure than loosing anymore of my money as I dont have a lot to risk. I have no idea what time scale it will take with AXA to get this policy back to where it was to start with 23K.

The distribution fund is slightly higher risk than the property fund. So moving up the risk scale doesnt seem a good idea for someone who is concerned about risk.

I would be very happy with any help anyone can give me as I only have a week to decide.

Why just a week?

The problem with a 6 month deferment is that you could be coming out just at the time it is right to be going back in again.

The other problem is that you are wanting us to guess what the returns will be on different areas and you are also looking at 100% investment into single funds which is never a good move (but normal when using a tied sales rep as that is what their remit is).

greenface

dunstonh whats your thoughts on this fund in the present climate.
I was advised into this in the middle of 2007.Since (with reserch) found other other people were already jumping ship. 6 month lock in never explained . Advised to put 80% of our money into this and one other fund only.One was supposed to cancel each others losses both been bad for somtime now.

dunstonh

dunstonh whats your thoughts on this fund in the present climate.

You have to look at it from the recession point of view. Commercial property funds tend to follow the fortunes of the economy more than they do house prices. So, going into commercial property at the bottom of the recession could see you going in with value. Many thought that 2008 would be the bottom but that was before the speed of collapse increased. 2009 could be but so could 2010. Oh for that crystal ball.

I'm not a fan of distribution funds. I'm not a fan of any jack of all trades funds (balanced managed etc). However, as distribution funds go, AXAs has good reputation and record but it will be more volatile than the property fund but also have better potential in good times. It can be a good lazy option although I wouldnt put my own money there.

chelsea4

Thank you Dunstonh, like greenface the 6 month wait period wasnt explained in the begining. Mine started in September 2008 and is ready now. I was also under the impression that the distribution fund was less risky by the way I was told. You are right I cant really risk my savings. This was something my late husband took out against my advice, I woud have taken something with the stake protected, but he isnt here any more to sort it out. Think I would be better to get out now and do something I understand.

gozomark

chelsea4 wrote: »

I cant really risk my savings.

Hence my first post above - In that case, get out

dunstonh

like greenface the 6 month wait period wasnt explained in the begining.

They dont often come around. I think 1993 was the last time they were enforced. Every single investment fund can be suspended or request a delay. The more illiquid the asset, the more likely it becomes in bad times.

I was also under the impression that the distribution fund was less risky by the way I was told.

To put it in context, the risk rating (using Fin Express analytics), has
Property fund: 5
Distribution: 11.7
UK Equity: 24

The distribution fund is 50% equities, 50% fixed interest.