The Structured Investment Option (SIO)1 is an investment option available within certain EQUI-VEST® series of variable deferred annuities. The SIO enables you to seek growth, up to a limit, with some downside protection.
A variable deferred annuity is a long-term financial product that is designed for retirement purposes. There are fees and charges associated with variable annuities, which include a contract fee that covers administrative expenses, sales expenses and certain expense risks.
Daily Trending Performance Cap RatesThe information shown here is for informational purposes and can help you understand recent trends for the Performance Cap Rates for indices available under the Structured Investment Option. It is important to understand that this is not a projection of future Performance Cap Rates. You have the option to set a Performance Cap Threshold. The actual Performance Cap Rates declared on a Segment’s Start Date may vary from what is shown here. You will not know the actual Performance Cap Rates in advance. The daily cap rates shown here are calculated the same way as the declared Performance Cap Rates. All rates are hypothetical unless you see a highlighted column. A highlighted column indicates an actual Segment Start Date and an actual Performance Cap Rate.
What’s next?If you are considering investing in the SIO, review the prospectus and fact card. If you want help, speak with your financial professional. He or she can help you determine if the SIO may fit your overall retirement investing strategy. If you have questions about your account or need general assistance, please call EQUI-VEST® Customer Service at (800) 628-6673.
With the SIO, you can invest in one or more Segments with maturity periods of 1, 3, or 5 years. Each Segment provides a rate of return that is tied to the performance of a well-known Index, which excludes dividends. Three indices are available: S&P 500® Price Return Index, Russell 2000® Price Return Index, and the MSCI EAFE Price Return Index. These indices provide exposure to large cap, small cap, and international asset classes, respectively.
|If the Index:||Then that Segment will:|
|Goes UP over the course of a Segment’s investment period||Earn the same rate of return as the Index, up to a specified maximum rate of return called the Performance Cap Rate.|
|Goes DOWN over the course of a Segment’s investment period||
Be protected only to the level of the Segment Buffer.For example, if you selected the S&P 500® Price Return Index 1-Year -10% Segment Buffer, this protects your value in the Segment against the first -10% of losses for a Segment held until maturity.
Upside potential, up to a limit
The Performance Cap Rates are stated as a rate of return from the Segment Start Date to the Segment Maturity Date. They are not annual rates, even if the Segment Duration is longer than one year, and they apply if you hold the Segment until the Segment Maturity Date.
For a given Segment, the Performance Cap Rate is the maximum potential ceiling or cap that you may get from index gains, so it may limit your potential in up markets. The Performance Cap Rates for each segment are declared at our sole discretion on the 15th of the month (or the next business day), and they are a function of market data as described below.
The cap rates are determined based on the index level, interest rates, and market implied volatility. The main drivers of the level of the cap rates are equity volatility and interest rate data sourced from banks. Higher volatility and higher interest rates lead to higher caps. In setting the Performance Cap Rates, we take into account that we incur expenses in connection with a contract, including insurance and administrative expenses. Also, Segment Types with greater downside protection will typically have lower Performance Cap Rates than other Segment Types that use the same index and duration but provide less downside protection. Please note that you are not investing directly in the applicable index or any underlying securities.
Should you elect a minimum Performance Cap Rate?
We do not require that you select a Performance Cap Threshold because you may wish to invest in a Segment regardless of its particular Performance Cap Rate. However, prior to the Segment Start Date, you may elect a Performance Cap Threshold.
The threshold represents the minimum Performance Cap Rate you find acceptable for a particular Segment. If we declare a cap that is lower than the threshold you specify, you will not be invested in that Segment and your contribution will remain in that Segment Type Holding Account2, until the next available Segment for which your threshold is met or you provide us with alternative instructions.
If you do not specify a threshold, you risk the possibility that the Performance Cap Rate established will have a lower cap on returns than you would otherwise find acceptable. You may wish to discuss with your financial professional whether to specify a Performance Cap Threshold and, if so, at what percentage. If you specify a Performance Cap Threshold, it will remain in effect until you change it.
The extent of the downside protection provided by the SIO is the first 10% or 20% of loss, depending on the Index and Segment duration you choose. And while you are protected from some downside risk, there is a risk of substantial loss of your principal because you agree to absorb all losses in excess of the Segment Buffer.
1 The Structured Investment Option is not available in all states and EQUI-VEST® contracts. All Segment Types may not be available in your state and/or plan. Check with your financial professional for availability.
2 Each Segment Type has a corresponding Segment Type Holding Account. It is an account that holds all contributions and transfers allocated to a Segment Type pending investment in a Segment. There is a Segment Type Holding Account for each Segment Type. The Segment Type Holding Accounts are part of the EQ/Money Market variable investment option. The amounts held in a Segment Type Holding Account may earn a return that is less than the return you might have earned if those amounts were held in another variable investment option.
Market Trend Indicator flyer
This includes the trends in Performance Cap Rates for the Structured Investment Option within EQUI-VEST®. This is useful if you are interested in setting a Performance Cap Threshold.
Structured Investment Option Fact Card
Provides a summary of how the Structured Investment Option works within EQUI-VEST®.
Important Note: AXA believes that education is a key step toward addressing your financial goals, and we’ve designed this material to serve simply as an informational and educational resource. Accordingly, this webpage does not offer or constitute investment advice and makes no direct or indirect recommendation of any particular product or of the appropriateness of any particular investment-related option. Your needs, goals and circumstances are unique, and they require the individualized attention of your financial professional.
Definitions of Terms
- Performance Cap Threshold – A minimum rate you may specify as a participation requirement that the Performance Cap Rate for a new Segment must equal or exceed in order for amounts to be transferred from a Segment Holding Account into a new Segment. Setting a Performance Cap Threshold is not required.
- Segment Type— Combination of the index option, duration and buffer you choose is what distinguishes your investment option.
- Segment Buffer— Built-in feature, in which AXA Equitable will absorb up to the first -10% or 20% of any loss. You will absorb the loss in excess of your Segment Buffer.
- Segment Duration— Segment Start Date to Segment Maturity Date, available in one, three, and five years.
The EQUI-VEST® series of variable annuities are long-term financial products for retirement that let you invest on a tax-deferred basis in an array of investment options. These options may include variable investment options, one or more of the Segments comprising the Structured Investment Option (SIO), and the Guaranteed Interest Option.
A variable deferred annuity, such as EQUI-VEST®, is a long-term financial product that is designed for retirement purposes. In essence it is a contractual agreement in which payments are made to an insurance company, which agrees to pay an income stream or a lump-sum amount at a later date. There are contract limitations, fees, and charges associated with variable deferred annuities, which include, but are not limited to, mortality and expense risk charges, withdrawal charges, and administrative fees. For costs and complete details, see the prospectus or contact your financial professional. Investments in a variable annuity are subject to market risk including loss of principal.
There are fees and charges associated with EQUI-VEST®, which include a mortality and expense risk charge, withdrawal charges, and administration fees. Withdrawals are subject to normal income tax treatment and, if taken prior to age 59½, they may be subject to an additional 10% federal income tax penalty. Withdrawals may also be subject to a contractual withdrawal charge for withdrawals that exceed the free withdrawal amount. For the Series 201 contract, the amount of the withdrawal charge we deduct is equal to 5% of any contribution withdrawn attributable to contributions made during the current and five prior contract years measured from the date of the withdrawal.
The S&P 500® Price Return Index comprises 500 of the largest companies in leading industries of the U.S. economy. Larger, more established companies may not be able to attain potentially higher growth rates of smaller companies, especially during extended periods of economic expansion. S&P®, Standard & Poor’s®, S&P 500® and Standard & Poor’s 500® are trademarks of Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) and have been licensed for use by AXA Equitable. Structured Capital Strategies® is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s does not make any representation regarding the advisability of investing in EQUI-VEST®.
The Russell 2000® Price Return Index tracks the performance of small-cap companies. Stocks of small and mid-size companies have less liquidity than those of larger companies and are subject to greater price volatility than the overall stock market. Smaller company stocks involve a greater risk than is customarily associated with more established companies. The Index is a trademark of Russell Investments and has been licensed for use by AXA Equitable. The Product is not sponsored, endorsed, sold or promoted by Russell Investments and Russell Investments makes no representation regarding the advisability of investing in the Product.
The MSCI EAFE Price Return Index is a sampling of securities deemed by MSCI as designed to measure the equity market performance of the developed European, Australasian and Far East (EAFE) markets. Australasia includes Australia, New Zealand and neighboring islands of the South Pacific. International securities carry additional risks, including currency exchange fluctuation and different government regulations, economic conditions and accounting standards. The Product referred to herein is not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such Product or any index on which such Product is based. The prospectus contains a more detailed description of the limited relationship MSCI has with AXA Equitable and any related products.
In setting the Performance Cap Rate, which is the maximum Segment Rate of Return that each Segment will be credited with on the Segment Maturity Date and is set at our sole discretion, we take into account that we incur expenses in connection with a contract, including insurance and administrative expenses. There are variable investment options available with EQUI-VEST® that are not discussed in this site. To learn about those options, refer to the prospectus.
Any withdrawal charge applicable to your variable investment option, Segment Holding Account or Structured Investment Option will be reflected in the cash value upon surrender and certain withdrawals. There is a contract fee deducted daily from the net assets in each variable investment option and Segment Holding Account that covers administrative expenses, sales expenses and certain expense risks. The variable investment option operating expenses, management fees, 12b-1 fees and investment-related expenses are reflected in the daily share price of each portfolio. Information on the EQUI-VEST® Structured Investment Option and charges can be found in the prospectus and resources section of this site.
The Structured Investment Option does not involve an investment in any underlying portfolio. Instead, it is an obligation and subject to the claims-paying ability of AXA Equitable Life Insurance Company.
This is not a complete description of EQUI-VEST®. In order to fully understand EQUI-VEST® and how it works, it is important to read the accompanying prospectus.
AXA Equitable may discontinue, suspend, or change contributions and transfers among the investment options or make other changes in contribution and transfer requirements and limitations. AXA Equitable, upon advance notice to you, reserves the right to discontinue, suspend or change Segment offerings.
The Performance Cap Rate is not known before the Segment starts. Therefore, you will not know in advance the upper limit on the return that may be credited to your Segment. Negative consequences may apply if for any reason amounts invested in a Segment are removed before the Segment Maturity Date.
Not all types of contract features and benefits are available in all jurisdictions and all markets. For costs and complete details of coverage, speak to your financial professional. We offer other variable annuity contracts with different fees, charges and features. Not every contract is available through the same selling broker/dealer. This content is not a complete description of the EQUI-VEST® contract.
If you are purchasing an annuity contract as a tax qualified employer sponsored retirement plan, you should be aware that such annuities do not provide tax deferral benefits beyond those already provided by the Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative features, benefits and costs of these annuities with any other investment that you may use in connection with your retirement plan or arrangement.
This material was prepared to support the promotion and marketing of AXA Equitable variable annuities. AXA Equitable, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local tax penalties. Please consult your financial professional as to any tax, accounting or legal statements made herein.
For further information on the Performance Cap Rate and the risks and limitations with the EQUI-VEST® Structured Investment Option, please refer to the accompanying EQUI-VEST® Structured Investment Option prospectus. This content is not a complete description of all material provisions of the EQUI-VEST® Structured Investment Option. For more information, refer to the current EQUI-VEST® Structured Investment Option prospectus and any applicable supplements. The prospectus contains more complete information, including investment objectives, risks, charges, expenses, limitations and restrictions. Please read the prospectus and any applicable supplements, and consider this information carefully before purchasing a contract.
EQUI-VEST® variable annuities are issued by AXA Equitable Life Insurance Company, New York, NY 10104. Co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC, (members FINRA, SIPC). Visit our web site at www.us.axa.com. You can contact us at (212) 554-1234 to find out the availability of other contracts.
Contract form #s: 2003-GAC 403(b), 2003GAC-401(a), 2004TSAGAC, 2004TSACERT-A/B, 2004EDCGAC, 2004EDCCERT-A/B, 2006BASE-I-A/B, 2006BASE-A/B, 2008EQVTSA201, 2008EQV201, 2008EQVEDC201, 2008EQVBASE201-A, 2008TSAGAC901, 2008TSA901-A/B, 2009EDCGAC901, 2009EDC901-A/B, 2009401aGAC901, 2009401a901-A/B and any state variations.
Certificate form #s: 2003NJ401(a) and 2003NJ403(b).
Contract endorsement form #s: 2010SIO201-I/G, 2011SIO901-ENGAC, 2011SIO900-ENGAC, 2012SIO900-ENGAC(NJ ARP) and any state variations.
Certificate endorsement form #s: 2011SIO901A/B, 2011SIO900-A/B, 2012SIO900-B(NJ ARP) and any state variations.
“AXA” is the brand name of AXA Equitable Financial Services, LLC and its family of companies, including AXA Equitable Life Insurance Company (NY, NY), AXA Advisors, LLC, and AXA Distributors, LLC. AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. The obligations of AXA Equitable Life Insurance Company are backed solely by its claims-paying ability.
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