AXA Hong Kong investments review 2023

If you are an expat or high net worth individual living in Hong Kong and Macau, you may have heard of AXA Hong Kong.

The AXA Group, of which AXA Hong Kong and Macau are a part, is a preeminent international insurer operating in more than 50 countries and serving 95 million clients. It is a one-stop shop for all kinds of insurance needs, including health, life, and general.

In this article, we will take a look at AXA Hong Kong, their offerings, as well as the general background of the company for you to determine whether their products and services are right for you.

This article is by no means a professional recommendation, nor is it to be taken as professional financial advice. Please seek the services of a trusted financial planner or advisor for how to best make decisions for your goals.

If you want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.

What is AXA Hong Kong?

The AXA Group, of which AXA Hong Kong and Macau are a part, is a preeminent international insurer operating in 51 countries and serving over 93 million clients. Its stated mission is to safeguard humanity’s most vital interests so that humanity may advance.

Life, health, property, and casualty insurance, as well as wealth management and retirement solutions, are just some of the many services that AXA Hong Kong and Macau has provided its customers with over the years.

AXA Hong Kong and Macau currently serves about 1.55 million customers in the two cities. These customers range from individuals to well-established corporations.

In its pursuit to become the world’s preeminent provider of insurance, wealth management, and retirement planning, the AXA Group aims to operate on a common set of values and commitments.

AXA Group was established in the early 19th century, and it currently has 145,000 employees2 serving 93 million customers2 across 51 countries2.

The total assets managed by AXA Group are worth about Euro 933 billion (approximately HKD7697.2 billion), while the company reported revenues of Euro 102.3 billion (about HKD8,439 billion).

The company claims to be one of the few Hong Kong insurance companies to provide holistic answers for your Life, Health, and General Insurance needs.

It offers comprehensive health insurance plans and employee benefits, making us the industry leader in general insurance, with a mission to be “the insurer to provide comprehensive protection to our customers, but also a holistic partner to the individuals, businesses and community” it serves.

AXA Hong Kong claims that it listens to customers’ demands, uses and invests in technology, and embracing digital transformation to deliver on our promise of ongoing product & service innovation and customer experience enrichment.

The company also has stated sustainability goals, and sees itself as a catalyst in the fight against climate change and as a positive force in the community by which others can benefit.

AXA have pioneered the field of mental health care by providing a range of services and innovative research, and its entire Sustainability Strategy is crafted with TCFD suggestions in mind, with special emphasis on climate strategy and biodiversity commitment.

As an investor, an insurer, and an exemplary business, AXA claims to be dedicated to integrating environmental, social, and governance factors across our operations and making a positive impact on the future.

Through its global network of activities, AXA is present in markets as diverse as those in Africa, North America, Central & South America, Asia Pacific, Europe, and the Middle East.

Given its size, AXA claims that the stability of its finances demonstrates its dedication to serving its clients’ needs across all phases of life with appropriate insurance, investment, and retirement planning services.

The company is rated on its principal insurance subsidiaries as follows: Standard & Poor’s with AA- (as of 20 July 2023); Moody’s at Aa3 (as of 1 July 2022); AM Best at A+ Superior (as of 8 July 2022).

For the company’s long term debt: Standard & Poor’s rates it at A+; Moody’s at A1; AM Best at aa- Superior.

For its short term debt: Standard & Poor’s is at A-1+; Moody’s at P-1.

Meanwhile, AXA General Insurance Hong Kong’s financial strength ratings is: Fitch AA- (as of 17 Mar 2023).

What should you know about AXA’s businesses?

AXA recognizes the value of a diversified distribution strategy in providing for clients’ needs.

With its flexible distribution channels, it promises that expert financial advisors are always only a click away, ready to provide a full assessment of our clients’ financial situations and recommend the best insurance, investment, and retirement planning options.

Professional financial advisors that are accessible and attentive 24 hours a day, 7 days a week through its agency channel help clients with their money in all phases of life.

In Macau, AXA offers clients a wide range of cutting-edge goods and services. The Macau office has state-of-the-art InsurTech so that financial advisors may give their clients the best possible service and experience.

Insurance for fine art and collectibles of all kinds—whether they are antiques, modern works of art, musical instruments, vintage automobiles, china, or fine wine—is available from AXA ART thanks to the company’s comprehensive suite of Art insurance options.

AXA is also committed to exceeding client expectations and redefining professionalism in the broker industry. With the support of AXA’s global network, its International Broker division promises to provide clients with a variety of offshore products in many currencies.

Swiss Privilege, an affiliate of the AXA Group, employs a team of expert advisors who live by the motto “Sophisticated, Productive, and Professional” in order to meet the monetary demands of their clients in a comprehensive manner.

AXA Hong Kong has garnered various awards for its outstanding products and services and charitable work in the local community.

Among them are from the ‘Financial Institution Awards 2023’ by Bloomberg Businessweek, for the following: Employee Benefit (Product) (Excellence); Health & Protection (Outstanding); Product Innovation (Outstanding); Savings Plan (Outstanding); and Voluntary Health Insurance (Outstanding).

AXA was also recognized by the ‘2022 BENCHMARK Wealth Management Awards’ by WealthAsia Media, for the following: ESG Integration – Best-in-Class; Healthcare Product – Outstanding Achiever; Retirement Product – Outstanding Achiever; and Responsible Insurer of the Year 2022.

Another was ‘Hong Kong Leaders’ Choice 2023’ by Metro Finance, for the following: Excellent Brand of Asset Management Financial Companies; Excellent Brand of Critical Illness Insurance Services; Excellent Brand of Employee Benefits Insurance; Excellent Brand of Personal Accident Insurance Services; among others.

Other award-giving bodies that have recognized AXA Hong Kong in the past are the GBA Insurance Awards 2023’ by Metro Finance, ‘01 Gold Medal Awards 2022’ by HK01, and ‘IAB Hong Kong Digital Awards 2022’ by Interactive Advertising Bureau Hong Kong.

What else should you know about AXA Hong Kong?

Investing $1.4 billion into alternative assets in 2022

In 2022, AXA Hong Kong allocated over $1.4 billion, or roughly two-thirds, of its new investments that year towards alternative assets.

According to Richard Chan, chief investment officer and head of asset liability management for Asia at AXA Hong Kong, the company is able to take on greater risk in pursuit of higher returns while maintaining a sound financial position thanks to its robust hedging portfolio.

According to him, as of the end of March 2022, the company was managing $25 billion in assets and had a $20 billion hedging portfolio (excluding foreign exchange hedges).

Seventy percent of AXA Hong Kong’s AUM, or $17.5 billion, was invested in fixed income at the time.

About 15% of this total is comprised of alternative credit, which includes anything from AAA-rated structured financing to single-B mid-market loans in terms of rating. The balance is invested in corporate bonds, with some of it also being collateralized by government bonds.

About a third of the remaining $7.5 billion in growth assets (or 30% of AUM) is invested privately. Chan has stated that it is possible to increase the exposure to these assets to 50% of the growth portfolio during the next five years, however no precise target has been set for this increase.

In addition, he stated, the corporation plans to shift its product mix by increasing growth assets and decreasing fixed income assets. AXA are shifting into growth assets, according to Chan, since their sales of lesser guarantee but higher upside participating product mirrors that of the industry as a whole.

AXA Hong Kong plans to invest approximately $400 million in alternative growth assets in 2022, with 90% of these funds going solely toward growth.

About half of its fixed-income investment budget for 2022, or more than $900 million, would be put into alternative credit.

Chan said the fresh money has been temporarily placed in stocks because renewal premium has been growing faster than the company’s commitment and capital call in recent years. When its current commitments reach maturity and capital calls are fulfilled, however, the company plans to reinvest in other assets, as he explained.

When the credit spread narrows, AXA Hong Kong invests more heavily in alternative credit. AXA will overweight the alternative credit until the spread on corporate bonds becomes more acceptable and attractive, he said.

By investing in sustainable energy generation, energy storage and transmission, and other aspects of the energy transition, AXA also wants to make environmental, social, and governance (ESG) investing a central tenet of its alternative investment strategy.

For instance, Chan said they see hydrogen as a promising alternative clean energy that, in comparison to solar power, is both more cost-effective and less damaging to the environment.

Additionally, it is increasing its funding for environmentally, socially, and economically responsible building developments. AXA Investment Managers, its asset management division, made a recent investment in an Australian forestry project.

Before taking into account the effect of debt, Chan estimates a return on the forestry project in the mid to low single digits, on par with that of premium office buildings. However, he anticipates long-term returns in the double digits from private equity investments, such as infrastructure equity.

The majority of AXA Hong Kong’s alternative investments are located in the United States and Europe, with only a modest allocation going to Asia.

Because most of its clientele is located in Hong Kong, the life insurance is coordinating with partners in Japan and China, among others, to source a smaller-scale commitment to regional funds in order to create some domestic bias for its local clients.

These regional funding might be either Asia-wide or earmarked for a specific Asian nation.

In terms of China’s private market, Chan has stated that the company is bullish on takeover opportunities in general. It focuses on the first-generation Chinese company owners of the 1980s who are nearing retirement and hoping to sell their companies for a fair price.

These affluent businesspeople are looking to sell to new management so that their offspring can cash out and enjoy a comfortable lifestyle.

He plans to shift his attention away from “controversial” residential real estate in China and toward government-backed industries like data centers, logistic facilities, and even life sciences.

AXA aims to find a happy medium between long-term risk-adjusted return and short-term solvency.

AXA’s current investing strategy is divided between two primary portfolios. The primary purpose of our so-called participating fund is to guarantee a positive risk-adjusted return for policyholders and stockholders over the long term.

But, “we also have a hedging overlay portfolio that is solely for the shareholder to manage the solvency balance sheet,” added Chan. “By doing so, we will stabilize the balance sheet without jeopardizing the long-term return potential,” he explained.

During the Covid pandemic, he claims, the company’s solvency ratio has increased somewhat. For example, “when everyone is worried about the economy, worried about their solvency, and need to de-risk, we can re-risk, buy bonds, continue to hold listed equity, and even wear more listed equities,” he explained.

Therefore, “we have such a good hedging strategy overlaying and specifically to manage the balance sheet solvency ratio that we have no concerns whatsoever about ramping up the alternative asset.”

AXA IM partners with UBS Global Wealth Management to launch Metaverse strategy in Hong Kong and Singapore

UBS Global Wealth Management (UBS GWM) in Asia Pacific and AXA Investment Managers (AXA IM) have established a cooperation to provide its Metaverse strategy to private wealth customers in Hong Kong and Singapore.

Long-term investors can gain diversity and high-quality exposure to Metaverse’s rising long-term growth opportunities in a dynamic economy by investing with UBS GWM, the first financial institution in Hong Kong and Singapore to offer the strategy to its clients.

Established in April of 2022, the strategy seeks to capitalize on the long-term investment opportunities presented by the Metaverse in both established and developing economies by investing in companies that contribute to the melding of the digital and physical worlds.

To gain exposure to long-term trends and to diversify in response to ever-shifting market conditions, the actively managed, multi-cap equity strategy places emphasis on four major sub-themes: gaming, socializing, working, and enabling.

With the help of their Macro Research and Responsible Investment teams, AXA IM was one of the first active managers to launch a strategy that exploits Metaverse opportunities.

The company’s global tech equity specialist team has a proven track record of creating and overseeing innovative investment approaches.

As of 30 June 2022, the majority of this ESG-integrated strategy’s holdings are in the information technology and communication services sector, with the remainder spread among the consumer discretionary, real estate, healthcare, industrial, and financial sectors.

Terence Lam, Managing Director and Head of Client Group Core, Asia Pacific at AXA Investment Managers, said, “We are delighted to be partnering with UBS Global Wealth Management to provide this high-quality thematic offering to its private wealth clients.”

“Amid the current market environment, the Metaverse strategy may offer a source of long-term robust investment returns as the world embraces the enormous potential of the Metaverse and experiences the benefits it will bring across sectors.”

“This latest agreement underscores our success and established history in developing long-term and differentiated thematic investment strategies that meet the needs of investors globally.”

Should you invest in AXA Hong Kong?

When it comes to insurance providers, like with investment managers, one expects reliability, prudence, and a focus on proven investment opportunities.

However, despite their global reputation, AXA’s recent decision to invest in high-risk, unproven assets like the Metaverse and other alternative growth assets raises concerns, especially for investors who want guaranteed returns.

Given our professional analysis of AXA Hong Kong’s investment strategy, it should be noted that this might have potential drawbacks and implications for both investors and insurance clients down the line.

Investing in the Metaverse and other alternative growth assets like private companies inherently carries a high level of risk. While some investors may be willing to take on these risks, it is crucial for investment managers to exercise prudence and ensure a diversified portfolio that balances risk and reward.

We also should pay close attention here to AXA IM, the company’s asset management arm. AXA’s stated goal of shifting to high potential, yet unproven investments may expose investors to unnecessary risk and potential losses.

While alternative growth assets may offer potential for substantial returns, their volatility and uncertain market dynamics require a thorough understanding and experience that no individual investor or company in the world simply has as of the moment.

Therefore, we believe that investors should be cautious when entrusting their funds to managers with limited experience in such specialized areas.

Transparency is also crucial aspect of any financial relationship. Unfortunately, AXA Hong Kong’s investment strategy in high-risk, unproven assets raises concerns about transparency.

Naturally, the yet-obscure nature of the Metaverse and alternative digital growth assets may make it so that investors do not have adequate knowledge and understanding of such investments.

Investing in alternative growth assets like private firms requires a deep understanding of the underlying technologies, market dynamics, and potential risks.

AXA Hong Kong’s investment strategy appears to overlook the importance of investor education, leaving investors potentially unaware of the risks and rewards associated with these investments.

Without a solid foundation of knowledge, investors may make ill-informed decisions, leading to detrimental financial outcomes.

Investors may also face challenges in obtaining comprehensive information about the underlying assets, potential risks, and the ongoing management of these investments. This lack of transparency can lead to a significant trust deficit between the investment manager and investors.

As such, while AXA Hong Kong may have a strong reputation in other areas of financial services, its decision to shift to an investment strategy focused on high-risk, unproven assets like the Metaverse calls for caution.

Investors should carefully consider how much they understand such investments before entrusting their funds and insurance needs to AXA Hong Kong.

It is always essential for investors to prioritize due diligence and seek investment managers with a more conservative and well-rounded approach, ensuring safety and proven growth of their investment portfolios.

What should you know about insurance and investment-linked insurance?

Are you an expat looking to secure your financial future while living in Hong Kong? Understanding insurance and investment-linked insurance plans like those of AXA Hong Kong should then be a vital part of your financial strategy.

Insurance provides a safety net that protects you and your loved ones financially in case of unexpected events, such as illness, accidents, or even death. As an expat, having the right insurance coverage is crucial, considering the unique challenges you may face while living abroad.

Furthermore, investment-linked insurance plans offer the dual advantage of providing insurance coverage while also allowing you to grow your wealth through investment opportunities. These plans are designed to provide financial protection while generating potential returns on your investment.

What is insurance?

When it comes to insurance for expats, there are several types to consider. The most common ones include health insurance, life insurance, and property insurance.

Health insurance is particularly important for expats as it helps cover the cost of medical treatment and hospitalization in the country of residence. It ensures that you have access to quality healthcare without worrying about hefty medical bills.

Life insurance, on the other hand, provides financial protection to your loved ones in the event of your untimely demise. It can help cover funeral expenses, outstanding debts, and provide a source of income for your dependents. Life insurance is especially important for expats who have family members relying on their income.

Lastly, property insurance protects your personal belongings and assets, such as your home and car, from unforeseen events like theft, fire, or natural disasters. It gives you peace of mind knowing that your valuables are protected, even when you’re living in a foreign country.

When selecting insurance as an expat, it’s essential to consider your specific needs, the level of coverage required, and any local legal requirements. Working with an insurance advisor who specializes in catering to expats can help you navigate the complexities and select the most suitable insurance options for your unique situation.

What is an investment-linked insurance plan?

Investment-linked insurance plans, also known as ILPs, offer the combined benefits of insurance coverage and investment opportunities.

These plans allow you to allocate a portion of your premiums towards investments in various financial instruments such as stocks, bonds, or mutual funds. The performance of these investments determines the potential returns you can earn on your policy.

ILPs are popular among expats due to their flexibility and potential for wealth accumulation. They provide a means to grow your wealth while still enjoying the protection of insurance coverage. We have talked about them before.

Unlike traditional insurance plans, ILPs offer a range of investment options, allowing you to tailor your investment strategy according to your risk tolerance and financial goals.

The insurance component of an ILP ensures that you and your loved ones are financially protected in case of unexpected events, such as disability or death.

The coverage amount is usually linked to the value of your investments, providing a level of protection that grows alongside your wealth. ILPs also offer the flexibility to increase or decrease coverage as your life circumstances change.

It’s important to note that ILPs are long-term financial commitments, and their performance is subject to market fluctuations.

Therefore, it’s crucial to carefully assess your risk appetite and investment objectives before investing in an ILP. Seeking advice from a qualified financial advisor who specializes in ILPs can help you make informed decisions regarding your investment-linked insurance plan.

What are the benefits?

Investment-linked insurance plans offer a range of benefits specifically tailored to the needs of expats. Here are some key advantages:

• Wealth accumulation: ILPs provide an avenue for expats to grow their wealth over time through investments. As an expat, you may have unique opportunities to invest in different markets and currencies, which can potentially yield higher returns compared to your home country.
• Flexibility: ILPs allow you to adjust your investment strategy and coverage levels as your financial situation evolves. This flexibility is particularly beneficial for expats who may experience changes in income, lifestyle, or family circumstances while living abroad.
• Portability: ILPs can often be transferred across different countries, making them suitable for expats who frequently relocate. This ensures that your insurance coverage remains intact, regardless of where your career or personal life takes you.
• Tax advantages: Depending on your country of residence, investment-linked insurance plans may offer tax benefits. Expats can potentially enjoy tax advantages such as tax-free growth on investment returns or tax deductions on insurance premiums.

However, it is important to consult with a tax advisor to understand the specific tax implications of ILPs in your jurisdiction.

Integration of insurance and investments: With ILPs, you can conveniently manage your insurance coverage and investments in one policy. This simplifies your financial management and allows you to have a holistic view of your wealth accumulation and protection strategies.

While ILPs offer numerous benefits, it’s crucial to carefully evaluate the terms and conditions of each plan, including fees, charges, and investment options.

Working with a reputable insurance provider who specializes in serving expats can help you navigate the complexities and select an ILP that aligns with your financial goals.

What should you consider when choosing an investment-linked insurance plan?

Like what we’ve mentioned with AXA Hong Kong, choosing the right investments requires careful consideration of several factors. Here are some key aspects to evaluate before making a decision:

• Risk profile: Assess your risk tolerance and investment objectives. Determine whether you are more comfortable with conservative, balanced, or aggressive investment strategies. The investment options offered by the ILP should align with your risk profile.
• Investment options: Review the range of investment options available within the ILP. Consider the asset classes, geographical regions, and sectors in which you can invest. Ensure that the available options align with your investment preferences and offer the potential for diversification.
• Fees and charges: Understand the fees and charges associated with the ILP. These may include policy fees, administration fees, fund management fees, and switching fees.
• Compare the cost structures of different ILPs to ensure you select a plan with competitive fees that do not erode your investment returns significantly.
• Insurance coverage: Evaluate the insurance coverage component of the ILP. Consider factors such as the coverage amount, the conditions for payout, and any exclusions or limitations.
• Ensure that the insurance coverage adequately meets your needs and provides the necessary protection for you and your loved ones.
• Flexibility: Assess the flexibility of the ILP in terms of adjusting your coverage levels, investment strategy, and premium payments.
• Look for features such as the ability to increase or decrease coverage, switch investments, or make partial withdrawals. Flexibility is crucial to accommodate changes in your financial circumstances or life events.
• Financial strength of the insurer: Consider the financial strength and reputation of the insurance company offering the ILP. Look for insurers with a strong track record and solid financial stability to ensure that your investments and insurance coverage are secure.

Taking the time to thoroughly evaluate these factors and seeking advice from a qualified financial advisor will help you make an informed decision when selecting an investment-linked insurance plan as an expat.

How do investment-linked insurance plans work?

Investment-linked insurance plans operate by combining insurance coverage with investment opportunities. Here’s a step-by-step breakdown of how these plans work:

As an ILP policyholder, you are required to pay regular premiums to maintain your insurance coverage and contribute to your investment portfolio. The premium amount is divided into two portions: one for insurance coverage and the other for investment allocation.

The investment portion of your premium is allocated to your chosen investment funds or portfolios.

These funds are managed by professional fund managers who make investment decisions on your behalf. The performance of these investments directly impacts the potential returns you can earn on your ILP.

The insurance component of the ILP provides financial protection in case of unexpected events, such as disability or death.

The coverage amount is typically linked to the value of your investments, meaning it increases as your investments grow. In the event of a claim, the insurance payout will depend on the terms and conditions outlined in the policy.

ILPs often offer the flexibility to switch between different investment funds or portfolios within the policy.

This allows you to adjust your investment strategy as market conditions or your financial goals change. However, it’s important to note that some ILPs may impose restrictions or charges on frequent fund switching.

ILPs generally have a lock-in period, during which surrendering the policy or making withdrawals may incur charges or penalties.

The lock-in period varies depending on the policy terms and can range from a few years to several years. It’s crucial to understand the surrender and withdrawal terms of your ILP before making any decisions.

ILPs can be complex financial products, and understanding how they work is essential to make the most of your investment-linked insurance plan. Seeking guidance from a qualified financial advisor will help you navigate the intricacies and maximize the benefits of your ILP.

As an expat with an investment-linked insurance plan, it’s crucial to understand the tax implications in your country of residence. Tax regulations vary from one jurisdiction to another, and it’s essential to comply with the local tax laws to avoid any penalties or legal issues.

Here are some common tax considerations for expats with ILPs:

• Tax-free growth: Some countries offer tax advantages on the growth of your ILP investments. This means that any investment returns you earn within the ILP may be tax-free or subject to reduced tax rates. These tax incentives can significantly enhance your investment returns over the long term.
• Tax deductions: In certain jurisdictions, you may be eligible for tax deductions on the premiums paid towards your ILP. These deductions can help reduce your taxable income and potentially lower your overall tax liability.
• However, tax deductibility rules vary, and it’s essential to consult with a tax advisor to understand the specific deductions available to you.
• Withholding tax: If you’re an expat investing in an ILP in a country that imposes withholding tax on investment income, you may be subject to tax on any dividends, interest, or capital gains earned within the ILP.
• The withholding tax rates and regulations differ across countries, and it’s important to be aware of your tax obligations.
• Tax reporting: Expats with ILPs are typically required to report their investment income and gains to the local tax authorities.
• Failure to comply with tax reporting requirements can result in penalties or legal consequences. It’s crucial to stay informed about your reporting obligations and ensure timely and accurate filing of tax returns.

To navigate the tax implications of your ILP as an expat, it’s advisable to seek professional advice from a qualified tax advisor who specializes in international tax matters.

They can provide guidance based on your specific circumstances and help you optimize your tax position while remaining compliant with local tax regulations.

What are some misconceptions about investment-linked insurance plans?

Investment-linked insurance plans can be subject to various misconceptions and myths. Let’s debunk some common misconceptions surrounding ILPs:

• ILPs are only suitable for high-net-worth individuals: While ILPs can be beneficial for high-net-worth individuals, they are not exclusive to this group.
• ILPs offer flexibility and investment options that can be tailored to various financial situations and risk profiles. Whether you’re a high-net-worth individual or have more modest financial means, there is an ILP that can suit your needs.
• ILPs are too risky: ILPs do involve investment risks, as the performance of your investments can fluctuate. However, the level of risk can be managed by selecting investment options that align with your risk tolerance and diversifying your portfolio.
• It’s important to review the investment options, understand the risks involved, and seek professional advice to make informed decisions about your ILP.
• ILPs are inflexible: While ILPs have certain lock-in periods and surrender charges, they still offer a level of flexibility compared to traditional insurance policies.
• Many ILPs allow you to adjust your coverage levels, switch between investment funds, or make partial withdrawals. It’s essential to carefully review the terms and conditions of your ILP to understand the flexibility it offers.
• ILPs are only for retirement planning: While ILPs can be used as part of a retirement planning strategy, they are not limited to this purpose.
• ILPs can be suitable for a wide range of financial goals, such as education planning, wealth accumulation, or legacy planning. The flexibility and investment options within an ILP make it adaptable to different financial objectives.
• ILPs are expensive: The cost of an ILP can vary depending on factors such as the insurance coverage amount, investment options, and fees.
• While some ILPs may have higher costs compared to traditional insurance policies, they offer the potential for higher investment returns. It’s essential to consider the overall value proposition of an ILP, including the insurance coverage and investment potential, when evaluating its cost-effectiveness.

Understanding the facts and dispelling the misconceptions surrounding ILPs will help you make informed decisions about your investment-linked insurance plan. Seeking advice from a reputable financial advisor will provide you with the clarity and guidance needed to maximize the benefits of your ILP.

Final thoughts

While AXA Hong Kong has enjoyed an award-winning reputation and has made commendable efforts in the realm of ESG investments, their recent change in strategy towards high-risk alternative growth assets raises significant concerns.

It is important for investors to carefully consider these concerns before entrusting their hard-earned money to AXA Hong Kong as an insurance and investment provider.

First and foremost, the lack of a proven track record in managing high-risk alternative growth assets is a cause for concern. While the company may have achieved success in other areas, such as their ESG investments, this does not guarantee success in the high-risk alternative growth assets sector.

And while AXA is confident that its hedging strategy is sound, investors should nonetheless be wary of entrusting their funds to a provider that seeks to risk-laden investments.

Of course, some investors would welcome the risks for the promise of better returns. But generally, the inherent nature of high-risk alternative growth assets makes them unsuitable for all investors.

These investments typically involve a higher level of volatility and uncertainty, which may not align with the investment objectives and risk tolerance of every individual.

AXA Hong Kong’s shift towards these assets without sufficient consideration for the individual needs and risk profiles of their investors raises questions about their commitment to responsible and personalized investment advice.

Transparency and investor education are also crucial factors in evaluating the suitability of an investment provider. Unfortunately, AXA Hong Kong’s recent change in strategy comes with a lack of transparency and clarity regarding their new investment approach.

Without a clear understanding of the specific investments being made and the associated risks, investors are left in the dark and unable to make informed decisions about their financial future.

Furthermore, the lack of investor education and guidance from AXA Hong Kong raises concerns about their commitment to empowering investors with the knowledge and tools necessary to make sound investment decisions.

Given these concerns, it is advisable for investors to carefully evaluate their options and consider alternative investment providers with a more conservative approach.

Providers who prioritize transparency, investor education, and have a proven track record in managing high-risk alternative growth assets may be better suited to meet the needs and objectives of investors seeking a balanced and secure investment strategy.

In conclusion, while AXA Hong Kong may have an award-winning reputation and has made commendable efforts in ESG investments, their recent change in strategy towards high-risk alternative growth assets raises significant concerns.

Investors should carefully consider their options and seek alternative investment managers with a more conservative approach to safeguard their financial future if they are averse to the risks.

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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.