MCKINNEY, TX – February 14, 2017 – Over three dozen volatility control indices are being offered in today’s fixed index annuities (FIAs), according to a new digest from Advantage Compendium, Ltd. This is up dramatically from those reported in the 2016 study. Notable vol-control changes:
* While only 27% of 2016 vol-controlled indices were excess return based – meaning the yield of a predetermined interest benchmark is first deducted from any index gains – 58% of the new indices used an excess return calculation.
* Prior to 2017 only 31% of vol-controlled indices had the ability to use leverage, however 75% of the new indices may use leverage (leverage is a way to increase exposure to the high volatility component when volatility is below the target level).
* For calendar year 2016 the 12 month returns of FIA vol-controlled indices ranged from a negative 2.95% to a positive 11.82%; the average was 3.26%.
The rapid growth in these offerings means plenty of choice is available to consumers. But it also means that fixed index annuity specialists need to stay on top of an ever-expanding and evolving vol-control universe to remain competitive.
The 15-page 2017 Fixed Index Annuity Volatility Control Indices Overview provides annuity experts with the detailed information they need on the wide array of volatility control indices now available. "The 2017 digest provides side-by-side comparisons of each volatility control index sorted by index features, volatility trigger level, pricing points and strategy, and it provides a brief description of what these features do", says Jack Marrion, CEO. Professionals in the fixed index annuity arenas need access to this information because most volatility control indices are unique, even when their names sound identical. “Unless you dig deeply into the details, you would never know how different they are,” says Marrion.
The findings are valuable for those who develop volatility control indices for fixed indexed annuities as well as for those who distribute annuity products containing the indices. “The reality is that volatility control indices are both complicated and complex,” Marrion explains. “Fixed index annuity professionals need to stay abreast of the competition—and the innovation.”
Access and Free Trial Period
The 2017 Fixed Index Annuity Volatility Control Indices Digest is available at no extra charge to subscribers of volcontrol.com.
Non-subscribers can also download the report from volcontrol.com during a free trial period [http://www.volcontrol.com/free-trial-request.html] that extends through February 2017. A temporary user name and password will be provided to carriers, marketing companies, and index providers upon request. Volcontrol.com enables carriers, marketing companies, and index providers to stay on top of the fast changing vol-controlled index space.
ADVANTAGE COMPENDIUM, LTD. provides research and consulting services. The firm is led by veteran annuity researcher Jack Marrion. Neither Dr. Marrion nor Advantage Compendium sell or endorse any financial product.
For more information, please contact:
Jack Marrion, CEO
Advantage Compendium, Ltd.