Structured Capital Strategies

Transcription

1 Structured Capital Strategies history may be a guide Often history can influence our behavior. It took years of serious accidents and personal injury before the wide use of bike helmets. Since then, cycling head injuries have been substantially reduced. 1 While the past is not necessarily a true indication of future results, it can significantly impact our behavior. Planning for retirement, and looking for places to invest your money, is difficult. Structured Capital Strategies 1 is a variable annuity that offers as one of its investment options an innovative strategy combining structured growth potential up to a cap with tax deferral. This product includes a partial protection feature that eliminates a portion of your downside risk, while still giving you the opportunity to invest for growth up to a Performance Cap Rate. In Structured Capital Strategies you invest to accumulate value on a tax-deferred basis in one or more variable investment options and/or the Structured Investment Option (SIO). The SIO permits the contract owner to participate in the performance of securities or commodities indices for a set period (1 year, 3 years, 5 years). Through the partial protection feature, AXA Equitable will absorb up to the first -10%, -20%, or -30% of loss, depending on the investment selected. Please keep in mind that there is risk of substantial loss of principal because the investor agrees to absorb all losses that exceed the protection provided by the SIO at maturity. If you would like a guarantee of principal, AXA Equitable offers other products that provide such guarantees. A variable annuity such as Structured Capital Strategies is a long-term financial product designed for retirement purposes. Simply stated, a variable annuity is a contract between you and an insurance company that lets you pursue the accumulation of assets through equities and other investment options. You may then take payments or a lump sum amount at a later date. There is also a death benefit that returns the account value, if any, to beneficiaries. To which index would you prefer to link your returns? Domestic Equity International Commodities How long would you like to participate in that index? 1 year 3 years 5 years What level of protection is right for you? -10% -20% -30% See the next page that exhibits 18 different Segment Types to choose from. The Segment performance is linked to the returns of the following indices: S&P 500 Price Index Russell 2000 Price Index NASDAQ 100 Price Index 3 MSCI EAFE Price Index MSCI Emerging Markets Index 3 Dow Jones U.S. Real Estate Index 3 London Gold Market Fixing Ltd PM Fix Price/USD 3 NYMEX West Texas Intermediate Crude Oil Generic Front Month Futures 3 1 Structured Capital Strategies is a variable and index-linked single contract annuity. 2 Bicycle Helmet Safety Institute, Not available in all jurisdictions, broker-dealers or share classes. Variable Annuities: Are Not a Deposit of Any Bank Are Not FDIC Insured Are Not Insured by Any Federal Government Agency Are Not Guaranteed by Any Bank or Savings Association May Go Down in Value AXA Equitable Life Insurance Company (NY, NY)

2 Structured Capital Strategies offers the following investment opportunities: 18 Segment Types to choose from. Segment Duration 1-Year 3-Year 5-Year S&P 500 Russell 2000 Index NASDAQ 100 Index 3 MSCI EAFE Index MSCI Emerging Markets Index 3 DJ US REIT 3 Gold Index 3 S&P 500 S&P 500 Oil Index 3 Russell 2000 Index Russell 2000 Index Protection 4 Segment Buffer 10% Segment Buffer 10% 20% Segment Buffer 10% 20% -30% 3 Not available in all jurisdictions, broker-dealers or share classes. 4 You are protected from some downside risk; if the negative return is in excess of the Segment Buffer, there is a loss of principal. You cannot invest directly in an index. Important definitions within Structured Capital Strategies Segment Type Combination of the index option, duration and buffer you choose is what distinguishes your investment option. Segment Duration Segment Start Date to Segment Maturity Date, available in one, three, and five years. Segment Buffer Built-in protection feature, in which AXA Equitable will absorb up to the first -10%, -20% or -30% of any loss. There is a risk of substantial loss of principal for losses beyond the Segment Buffer because you agree to absorb all losses that exceed the Segment Buffer. Performance Cap Rate The maximum potential ceiling, or cap, that an investor may receive from index gains. The Segment Rate of may be limited by the Performance Cap Rate, which may be lower than the performance of the applicable index. 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 the Segment. Please see Important Information for details.

3 Historical perspective... To give you perspective on how these indices have performed historically, the following analysis observes returns of 1-Year, 3-Year, and 5-Year periods on a rolling monthly basis (e.g., Jan Jan, Feb Feb, etc.). The chart below shows how frequently losses have occurred during various time periods. Depending on the duration of a Segment, investors can receive protection of -10% (1-, 3-, 5-Year), -20% (3-, 5-Year) and -30% (5-Year). The Segment Buffer stays at a constant level for the duration of the specific Segment. For instance, if you have a 10% Segment Buffer and the given index declines by 8% during the time period, then your investment would be completely protected. If the index were to decline by 12%, your investment would incur only a 2% loss. Historical Index s January S&P 500 Russell 2000 MSCI EAFE MSCI Emerging NASDAQ Markets DJ U.S. Real Estate 7 Gold Oil 8 1-Year 3-Year 5-Year 1-Year 3-Year 5-Year 1-Year 1-Year 1-Year 1-Year 1-Year 1-Year Average 9 10% 31.6% 56.2% 10.4% 28.6% 48.1% 9.9% 13.2% 16.7% 4.8% 6.2% 9.1% Total Gains and Losses Number of Gains Number of Losses Loss 10% Loss > 10 20% Loss > 20 30% Loss > 30% % of Times s Occurred Above -10%, -20%, or -30% 10 respectively across columns 86.6% 88.0% 99.7% 82.7% 92.8% 99.7% 81.6% 76.7% 85.0% 76.7% 84.7% 74.2% % of Times Any Loss Occurred 22.5% 21.1% 26.6% 29.1% 14.8% 11.5% 30.2% 32.9% 20.8% 30.4% 41.1% 44.0% For each index in the chart above from there were: year occurrences year occurrences year occurrences 5 MSCI Emerging Markets Data available from January 1988 December NASDAQ 100 Data available from March 1985 December DJ U.S. Real Estate Data available from July 2000 December Oil Index s available only from its inception in April Average A simple average of a series of returns generated over a given period of time. s are price return only and exclude dividends. 10 % of Times s Occurred Above -10%, -20%, or -30% This row shows the percentage of times a rolling monthly index return occurred above -10% in the 1-Year index columns, -20% in the 3-Year index columns, and -30% in the 5-Year index columns. Please note that the MSCI EAFE, Gold, Oil, and NASDAQ-100 indices are limited to the percent of times returns occurred above -10%. Past performance is not a guarantee of future results. For illustrative purposes only. This data does not represent the performance of any specific investment. Individuals cannot invest directly in an index.

4 Some things to consider from January : The largest 5-year loss in the S&P 500 Index dating back to 1982 was 35.8% (month ending Feb. 2009). The largest 5-year loss in the Russell 2000 Index dating back to 1982 was 33.56% (month ending Feb. 2009). There was less than a 3% chance of having a loss greater than 20% in the S&P 500 Index and the Russell 2000 Index over 5-year periods, but almost a fifth of the time, a loss occurred between 0 and 20%. The Russell 2000 Index experienced loss about a third of the time over 1-year periods. 40% of those losses were less than 10%. Half of all losses in the Russell 2000 Index over 5-year periods were 10% or less. The MSCI EAFE Index had about a one-in-three chance of loss over 1-year periods. Roughly 40% of those losses were between 0 and 10%. All periods mentioned above are rolling monthly periods. A rolling monthly period is defined as month start to month end over 1-, 3- or 5-year periods. (e.g., Jan. 1, 1982 Jan. 31, 1985 is one 5-year rolling monthly period.) Past performance is not a guarantee of future results. For illustrative purposes only. This data does not represent the performance of any specific investment. Individuals cannot invest directly in an index. What does it all mean? Given the information presented on these few pages, you could be led to believe that the probability of incurring financial loss over the long term is relatively small. However, many investors are not willing to incur periods of loss, and may move their assets before potential market rebounds. AXA Equitable has a variable annuity that may be able to help you endure periods of market decline, and stay invested over the long term.

5 Important Information This document must be preceded or accompanied by a Structured Capital Strategies prospectus. There are fees and charges associated with variable annuities that cover administrative expenses, sales expenses and certain expense risks, a withdrawal charge and underlying variable investment portfolio expenses. Distributions taken prior to annuitization are generally considered to come from the gain in the contract first. If the contract is tax-qualified, generally all withdrawals are treated as distributions of gain. Withdrawals of gain are taxed as ordinary income and, if taken prior to age 59½, may be subject to an additional 10% federal tax. See the prospectus or variable annuity product fact card for additional information. AXA Equitable may at any time exercise its rights to discontinue, suspend or change acceptance of contributions/transfers, as well as change minimum and maximum contribution requirements and limitations. Please see the prospectus and supplemental materials for details. The Structured Investment Option does not involve an investment in any underlying portfolio. Instead, it is an obligation of AXA Equitable Life Insurance Company, which has sole legal responsibility to pay amounts it owes under the contract. A contract owner should look to the financial strength of AXA Equitable for its claims-paying ability. Guarantees do not apply to the variable investment options. The Structured Capital Strategies variable annuity is subject to market risk, including loss of principal. The contractual withdrawal charge declines from 5% over a five-year period for the Structured Capital Strategies Variable Annuity Series B. For tax purposes, withdrawals will come from any gain in the contract first. The variable investment options available in Structured Capital Strategies the EQ/Equity 500 index portfolio, the EQ/Core Bond Index portfolio, and the EQ/Money Market portfolio are subject to market risk, including loss of principal. The investment results of these variable investment options do not depend on the investment performance of a related index. Annuities contain certain limitations and restrictions. For costs and complete details, contact a financial professional.

6 Certain features and benefits described herein may not be available in all jurisdictions. In addition, some distributors may eliminate and/or limit the availability of certain features or options, based on annuitant issue age or other criteria. This material is not a complete description of all material provisions of the Structured Capital Strategies variable annuity contract. 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 Structured Capital Strategies. The S&P 500 Price 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. The Russell 2000 Price 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 Russell 2000 Price 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 NASDAQ 100 Price Index (Not available in all jurisdictions) includes 100 of the largest domestic and international non-financial securities listed on The NASDAQ Stock Market based on market capitalization. The Index reflects companies across major industry groups, including computer hardware and software, telecommunications and biotechnology. Non-diversified investing may be focused in a smaller number of issues or one sector of the market that may make the value of the investment more susceptible to certain risks than diversified investing. 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. The MSCI EAFE Price 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 or accounting standards. MSCI Emerging Markets Index (Not available in all jurisdictions) is a free float-adjusted market capitalization index that is designed to measure equity market performance of 21 emerging market country indices, including Brazil, Russia, India, China and others in Southeast Asia, Eastern Europe, Latin America and Africa. International securities carry additional risks, including currency exchange fluctuation and different government regulations, economic conditions or accounting standards. International securities carry additional risks, including currency exchange fluctuation and different government regulations, economic conditions or accounting standards. ishares Dow Jones U.S. Real Estate Index Fund (Not available in all jurisdictions) seeks investment results that correspond generally to the performance of the Dow Jones U.S. Real Estate Index. The Index measures the performance of the Real Estate industry of the U.S. equity market, including real estate holding and developing and real estate investment trust (REITS) subsectors. The investment performance of the ishare Dow Jones U.S. Real Estate Index Segment is based only on the closing share price of the Index Fund. The ishare Dow Jones U.S. Real Estate Index Segment does not include dividends declared by the Index Fund. Non-diversified investing may be focused in a smaller number of issues or one sector of the market that may make the value of the investment more susceptible to certain risks than diversified investing. The London Gold Market Fixing Ltd PM Fix Price/USD (Gold Index) (Not available in all jurisdications.) is an international benchmark for the price of Gold. Because this Investment Segment is tracked to the commodities industry, it can be significantly affected by commodity process, world events, import controls, worldwide competition, government regulations, and economic conditions. Apart from the risks associated with general commodity investing, there are risks to investing in the common stocks of commodity producing companies. You should be willing to accept the risks that come with exposure to foreign and emerging markets, including political, economic and currency volatility. The NYMEX West Texas Intermediate Crude Oil Generic Front Month Futures (Oil Index) (Not available in all jurisdications.) is the underlying commodity index of oil futures contracts. Risks involved with futures contracts include imperfect correlation between the change in the market value of the stocks held by the portfolio and the prices of futures contracts and options, and the possible lack of a liquid secondary market for futures or options contracts, and the resulting inability to close a futures contract prior to its maturity date. Also, index options, over-the-counter options, and options on futures are exposed to additional volatility and potential losses. Structured Capital Strategies is a registered service mark of AXA Equitable Life Insurance Company, New York, NY All contract and rider guarantees, including optional benefits and any fixed subaccount crediting rates or annuity payout rates, are backed by the claimspaying ability of AXA Equitable. They are not backed by the broker/dealer from which this annuity is purchased, by the insurance agency from which this annuity is purchased or any affiliates of those entities and none makes any representations or guarantees regarding the claims-paying ability of AXA Equitable. Structured Capital Strategies is issued by AXA Equitable Life Insurance Company, New York, NY Co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC, New York, NY Avenue of the Americas, New York, NY 10104, (212) AXA Equitable Life Insurance Company. All rights reserved. Patent Pending. Contract form #s: 2010PCSBASE-I-A/B and 2010PCSBASE-A/B and any state variations ML G31254 GE Cat. # (6/13)