1) SM
Investment Edge
Variable Annuity
A smart choice for tax-deferred
growth potential
SM
Investment Perspectives
Interest Rates & Inflation
InvestmentEdge.com
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) Investment Perspectives
Interest Rates & Inflation
Being prepared if interest rates rise
What
Let’s start with interest rates in the current economic climate.
• Today, interest rates are among the lowest they’ve been in more than 60 years. Since reaching an all-time high in
1981, 10-year Treasury yields have steadily declined.
• This has generally fueled a 30-year bull market for bond prices and reduced income opportunities from bond investments.
• Low interest rates also mean that purchasing power from a bond’s income suffers. For example, if an investment
is earning 2% but inflation is running at 2.5%, an investor is actually losing money.
Please note that there is no assurance that historical trends will continue.
Traditional “safe” sources of income, such as CDs and U.S. government bonds, are yielding a fraction of what they once did
ANNUAL INCOME FROM A $100,000 INVESTMENT
$6,000
$5,240
$4,820
$4,710
$5,000
$4,000
2006
$3,000
$1,760
$2,000
$1,000
0
$450
6-Month CD
6M h
$250
2-Year T
Bond
Y Treasury B d
10-Year T
Bond
0 Y Treasury B
2012
Source: J.P. Morgan Asset Management. Shown
for illustrative purposes only. Income ï¬gures for
Treasuries reflect yield to maturity, which may
include capital gains or losses for bonds not
priced at face value. U.S. government bonds are
backed by the full faith and credit of the U.S.
government.
Why
Simply put, rising interest rates generally are a risk to ï¬xed income prices. However, changes in interest rates do not
affect all bonds equally.
• Generally, the longer a bond’s term, the more its price may be affected by changes in interest rates.
• Different sectors of the bond market respond differently to changing interest rates. For example, longer duration
bonds typically experience the greatest price pressure.
In rising interest rate environments, consider diversifying your ï¬xed income investment.
• This could include high yield bonds that have less interest rate risk but more credit risk as well as bonds with
shorter durations or floating rates.
A 1% rise in rates affects bond prices differently
PERCENT DECLINE IN VALUE RELATIVE TO A 1% INCREASE IN INTEREST RATES
0%
-5%
-10%
2-Year Treasuries
10-Year Treasuries
30-Year Treasuries
–2.0%
–9.0%
-15%
-20%
–20.0%
Source: U.S. Treasury, Federal Reserve, Barclays,
FactSet, J.P. Morgan Asset Management. For illustrative
purposes only. Data as of 12/31/12.
3) Variable Annuity
Recognizing how inflation can erode your savings
What
Inflation can reduce the purchasing power of an investor’s savings and it has the potential to negatively affect the
return of certain investments.
Why
Despite inflation being relatively low for a while, it may increase and negatively affect the value of investors’ savings.
• It’s important to note that in periods of low and rising inflation, equities and commodities outperformed bonds, and
particularly cash.
• However, during times of high and rising inflation, commodities still outperformed but cash did better than equities.
High and Rising Inflation
Low and Rising Inflation
(Occurred 14 times since 1973)
25%
(Occurred 7 times since 1973)
20%
20%
17%
15%
13%
10%
5%
7%
6%
5%
3%
2%
Median
Inflation:
3.3%
0%
-5%
-10%
-15%
Bonds
Equities
Cash
Commodities
Bonds
Equities
Cash
Commodities
Source: BLS, Barclays Capital, Robert Shiller, Federal Reserve, Strategas/Ibbotson, Standard & Poor’s, FactSet, J.P. Morgan Asset Management. High
or low inflation distinction is relative to median CPI-U inflation for the period 1973 to 2012. Rising or falling inflation distinction is relative to previous
year CPI-U inflation rate. Bond returns are based on the Barclays U.S. Aggregate index since its inception in 1976 and a composite bond index prior
to that. Equity returns are based on S&P 500 price return and annual dividend yield (total return). Cash returns are based on the Barclays 1–3 Month
T-Bill index since its inception in 1992 and 3-month T-Bill rates prior to that. Commodities returns based on S&P GSCI. Individuals cannot invest
directly in an index.
For illustrative purposes only. Past performance is not indicative of comparable future returns. Data is as of 9/30/13.
Please see the last page for speciï¬c investment risks related to this chart.
Understanding Variable Annuities
A variable annuity is a tax-deferred ï¬nancial product designed to allow you to invest for growth potential and
provide income for retirement or other long-term life goals. There are fees and charges associated with a
variable annuity contract, which include, but are not limited to, operations charges, sales and withdrawal charges
and administrative fees. The withdrawal charge declines from 6% to 3% over ï¬ve years for Investment EdgeSM.
Variable annuities are subject to market risk including loss of principal. Earnings are taxable as ordinary income
when distributed and may be subject to an additional 10% federal tax if withdrawn before age 59½.
This document must be preceded or accompanied by a prospectus.
4) Strategies for rising inflation and interest rates
Investment EdgeSM offers a wide range investment options with strategies designed for either or both conditions.
How
Strategies for Rising
Interest Rates Environments
Charter Portfolio
CharterSM Interest Rate Strategies
Individual Strategies
Core Bonds
Eaton Vance VT Floating-Rate Income
Fund
Fidelity® VIP Strategic Income Portfolio
Janus Aspen Flexible Bond Portfolio
Lord Abbett Series Fund Bond Debenture
Portfolio
Short-Duration Bonds
Delaware VIP® Limited-Term Diversiï¬ed
Income Series
EQ/AllianceBernstein Short Duration
Government Bond
EQ/PIMCO Ultra Short Bond
EQ/High Yield Bond
Federated High Income Bond Fund II
Invesco V.I. High Yield Fund
EQ/Low Volatility Global ETF
Guggenheim VT Global Managed
Futures Strategy Fund
Janus Aspen INTECH U.S. Low Volatility
Portfolio
Putnam VT Absolute Return 500 Fund
Strategies for High
Inflationary Environments
Commodities
High Yield Bonds
Charter Portfolio
CharterSM Interest Rate Strategies
Individual StrategiesTreasury
Inflation-Protected (TIP) Bonds
American Century VP Inflation
Protection Fund
EQ/PIMCO Global Real Return
Alternative
EQ/Energy ETF
EQ/Natural Resources PLUS
Ivy Funds VIP Energy
PIMCO VIT CommodityRealReturn®
Strategy Portfolio
Van Eck VIP Global Hard Assets Fund
REITs
EQ/Real Estate PLUS
Invesco V.I. Global Real Estate Fund
AXA SmartBetaTM Equity
EQ/Convertible Securities
EQ/GAMCO Mergers and Acquisitions
Who
Tap into some of the industry’s premier managers, including:
When
Now is the time to speak with your ï¬nancial professional to discover the power of Investment EdgeSM. Or visit our
website InvestmentEdge.com.
Investment Risks: Bond investments are subject to interest rate risk so that
when interest rates rise, the prices of bonds can decrease and the investor
can lose principal value. Equities are subject to market risk including loss of
principal. Investments in commodity-related instruments are subject to the
risk that the performance of the overall commodities market declines and that
weather, disease, political, tax, and other regulatory developments adversely
impact the value of commodities, which may result in a loss of principal and
interest. Commodity-linked investments face increased price volatility and
liquidity, credit, and issuer risks compared with their underlying measures.
This brochure is not a complete description of all material provisions of the
variable annuity contract. This brochure must be preceded or accompanied
by a current prospectus and any applicable supplements. The prospectus
contains more complete information, including investment objectives,
risks, charges, expenses, limitations and restrictions.
There are certain contract limitations and restrictions associated with an
Investment EdgeSM contract. For costs and complete details of coverage,
speak to your ï¬nancial professional/insurance licensed registered
representative. Certain types of contracts, features and beneï¬ts may not
be available in all jurisdictions. AXA Equitable offers other variable annuity
contracts with different fees, charges and features.
This brochure 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.
For more information on how
Investment EdgeSM could help you,
contact your ï¬nancial professional today
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 own independent advisors as to
any tax, accounting or legal statements made herein.
Not every contract is available through the same selling broker/dealer.
“AXA” is the brand name of AXA Equitable Financial Services, LLC and
its family of companies, including AXA Equitable Life Insurance Company
(NY, NY), MONY Life Insurance Company of America (AZ stock company,
administrative ofï¬ce: NY, NY), AXA Advisors, LLC, and AXA Distributors, LLC.
AXA S.A. is a French holding company for a group of international insurance
and ï¬nancial services companies, including AXA Equitable Financial
Services, LLC. This brand name change does not change the legal name of
any of the AXA Equitable Financial Services, LLC companies. The obligations
of AXA Equitable Life Insurance Company and MONY Life Insurance Company
of America are backed solely by their claims-paying ability.
Investment EdgeSM (November 2013 version) is issued by AXA Equitable
Life insurance Company, New York, NY and is co-distributed by afï¬liates,
AXA Advisors, LLC and AXA Distributors, LLC. AXA Equitable, AXA Advisors,
AXA Distributors do not provide legal or tax advice.
Contract Form #ICC13IEBASE1, ICC13IEBASE2 and any state variations.
G33058
GE-89669 (12/13) (Exp. 12/15)
Cat. #152600 (4/14)