In recent years, looking for a growth strategy among index annuities is a simpler task. You just choose a product with the most favorable rate and the best performance history.
However, let’s look ahead 5 years. There is an overwhelming theme from leading investment firms to stay at the forefront of a low(er) return world. Yet, capturing the same returns from the previous 8 years may be a little more challenging.
So, what the heck does this low return world mean for index annuities?
First – it puts great importance on low cost strategies. Any drag on the account by way of fees, will hurt the overall return your client experiences. The perfect solution can be an index annuity with little to no fees.
Second – for investors to increase the opportunity for growth, without taking on any greater risk, exposure across broad asset classes within index strategies will be key to success.
Does this mean you should allocate amongst strategies that measure performance monthly, annually, or bi-annually?
Sure, but not exactly. I am not necessarily referring to HOW an index is measured but looking at WHAT is being measured.
Rather than using an index that puts your eggs into just one equity basket or a balanced equity/bond basket – increase your clients’ opportunity to capture growth with an index strategy that spreads their growth exposure amongst broad asset classes (equities, bonds, emerging markets, real estate, sovereign debt).
What index does this?
The Goldman Sachs Momentum Builder Multi-Asset Class index pursues a world of opportunity with exposure to six diverse asset classes. It offers long-term potential for more consistent returns across different market cycles, both high and low.
Additionally, this is an uncapped strategy where if the index is in any kind of positive territory at the end of the crediting term, your client is guaranteed to see a return.
Contact your Annuity Sales Rep for assistance with matching the best annuity product to each of your clients’ needs.