Q1 Performance Check

Q1 Performance Check

Since the beginning of the new year, markets have experienced some turbulence. Volatility, a variable somewhat absent in 2017, has returned to the markets at the end of January.

The S&P 500 has returned just over 2.5% year-to-date and 16.12% over the previous year.

One advantage of index annuities, is that your clients have the opportunity to participate in the upside of a bull run, but without the downside risk.

Looking at the trailing 1-year period, we have several indexes that standout:

  • The PIMCO index at AIG has returned 17.93% – with an annualized spread of 2.90%, a client would be on track to earn just over 15%
  • The S&P 500 Risk Control Index at Great American has returned 14.54% – with a 65% participation rate, a client would have locked in a 9.45% return
  • The Janus index at Athene has returned 18.06% – with a 90% participation rate, a client would be on pace for a 16.25% return

Clients who are currently allocated to these indexes have been thrilled with the performance – especially since they’re not exposed to equity market risk.

It would be grossly inappropriate for one to expect these types of returns every year. However, it’s important to understand the earning potential that an index annuity can have as a growth vehicle over the long term. Your client’s results will be based on several factors, including index performance and rates.

Would this idea resonate with one of your clients? Let us know how we can help.

Index Insurance Co YTD 1 Year
Barclays US Aggregate Bond Index Index Benchmark -1.86% 2.06%
Merrill Lynch Strategic Balanced
AIG -1.73% 3.60%
Bloomberg US DynamicBalance II Index Allianz 1.22% 10.33%
S&P US Retiree Spending Index Great American -1.07% 6.16%
S&P 500 Daily Risk Control 5% Index Lincoln 2.22% 12.84%
S&P 500 Average Daily Risk Control 10% USD Price Return
Great American 1.35% 14.54%
BNP Paribas Multi Asset
Diversified 5 Index
Athene -1.61% 4.13%
Goldman Sachs Momentum
Builder Multi Asset 5 Index
Integrity 0.06% 9.21%
Morningstar Dividend Yield Focus Target Vol 5 TR Athene -1.13% 4.94%
Citi Flexible Allocation
6 Excess Return Index
Protective -0.55% 9.26%
Janus SG Market Consensus
Athene -2.60% 18.06%
PIMCO Global Optima Index AIG 1.19% 17.93%
S&P 500 Daily RC2 8% Athene 2.05% 16.79%

*All performance figures are gross of carrier participation or spread rate – as of 3/15/2018