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Investment Strategies

What is an Investment Strategy?

Pre-defined asset allocation models for variable annuities are appropriate for investors who do not want to actively manage their annuity sub-account portfolio, for lack of time, experience or confidence. If you decide to use a pre-defined asset allocation model, consider your age, estimated time until retirement, current financial stability, and tolerance for market volatility when selecting a risk profile (such as conservative, aggressive, etc.).

Articles & Guides

Social Security May Not Be Headed For Big Trouble After All

For many years, Social Security collected more money than it paid out in benefits, and the surplus money collected from payroll taxes was invested in U.S. Treasury securities. Last year marked an about face, however. The birth rate has been falling and a lot more baby boomers retire every day, undermining the ratio of workers …

Maybe You Are a Happily Married Retiree– But Are You Up to Snuff on Your Household Financial Standing?

One good idea is to schedule at least an annual meeting over dinner for a yearly financial check-up, regardless of whether one spouse isn’t inclined to be overly engaged. Amid this festive holiday season, we all know that the routine of day-to-day life persists and that not everything is worry-free. Now that we’re planning the …

Now May Be the Time to Convert Part of Your Traditional IRA to a Roth IRA

Thanks to the Tax Cut and Jobs Act of 2017, your tax bracket has declined this year, and that’s obviously a good thing. Many retirees still pay taxes on Social Security, annuity payouts, pensions, and perhaps earnings from a part-time job. This tab will decline. And you might get even more bang for your buck …

From Our Blog

Are You Holding Your Retirement Portfolio Back? Annuity Myths Debunked

Annuity sales continue to make headlines as more and more consumers add them to their retirement planning portfolios. For those familiar with the products, it comes as no surprise, especially knowing that guaranteed lifetime income provides a peace of mind in retirement that nothing else can. However, there are still many people who steer clear …

The Profile of an Annuity Buyer

During the month of September, the Insured Retirement Institute is hosting 4 virtual sessions, the Supply Chain Summit, to examine the current industry climate with a focus on how to develop and market products during these unique times. Market fluctuations, economic turmoil and the COVID-19 pandemic are all influencing the messages being sent to consumers. …

Required Minimum Distributions Waived for 2020 – What to Do Next

The CARES Act, or The Coronavirus Aid, Relief, and Economic Security Act, has waived RMDs for 2020, but beginning in 2021, they will return. A recently published Fidelty article offered up 2 key questions to think about if you have assets that are subject to RMDs. Here’s a brief synopsis.  If you have an employer-sponsored …

Compare Top Investment Strategies & Asset Allocation Models

Overview

We’ve done the research for you. Pre-defined asset allocation models are appropriate for investors who do not want to actively manage their annuity sub-account portfolio, for lack of time, experience or confidence. If you decide to use a pre-defined asset allocation model, consider your age, estimated time until retirement, current financial stability, and tolerance for market volatility when selecting a risk profile (such as conservative, aggressive, etc.). When comparing asset allocation models from different companies, look at the historical returns of the models (ask the insurance company or financial advisor for this), just as you would view the performance history of an individual mutual fund or sub-account prior to investing.

Criteria for Evaluating Annuities with High Performing Investment Strategies & Asset Allocation Models

When evaluating the asset allocation models and investment strategies available through variable annuities, Annuity FYI looks for a) features of the asset allocation model(s) itself; b) the quality of the core annuities to which the models may be applied; and c) the company issuing the annuities.

Criteria we measure in evaluating the asset allocation models are:

  1. Sub-accounts and asset allocation models with strong historical returns that we believe will have strong future performance.
  2. Turn-key asset allocation models to meet investor profiles ranging from conservative to aggressive, with active re-balancing.
  3. A large selection of fund sub-accounts and the ability to invest outside of a model.

Criteria we compare in evaluating the core annuities are:

  1. Outstanding features and benefits, including but not limited to living income benefits and enhanced death and estate benefits.
  2. Mortality, Expense and Administration (MEA) fees — we generally favor annuities with MEA fees of 1.15% or less.
  3. Length of surrender period — we generally favor annuities with surrender periods of 6 years or less although a longer surrender charge period may offer a potential for higher returns or more income stream that you are willing to trade off for.

Criteria we use in evaluating the insurance company issuing the annuities and riders are:

  1. High financial ratings of the issuing company (although with variable annuities your assets are held separately from the insurance company’s general accounts, the features and benefits, including all guarantees, are based on the financial strength and claims-paying ability of the issuing company and its re-insurers).
  2. Company management, customer service history, and ease of on-line account access for your convenience.

Top Investment Strategies & Asset Allocation Models

AXA Allocation Portfolios

The AXA Allocation Portfolios consist of five models: Conservative, Conservative Growth, Balanced, Moderate Growth, and Growth. Portfolios are managed by over twenty asset management firms. Investors can transfer assets among the styles at any time before or after payments begin, at no charge.

JNL / S&P® Managed Portfolios

The JNL / S&P® Managed Portfolios consists of five asset allocation models: Managed Conservative (20% equities, 80% fixed income), Managed Moderate (40% equities, 60% fixed income), Managed Moderate Growth (60% equities, 40% fixed income), Managed Growth (80% equities, 20% fixed income), and Managed Aggressive Growth (90% equities, 10% fixed income).

AST

Prudential offers dozens of turnkey asset allocation strategies spanning nine investment strategies. Each comes with its own set of potential investment risk and return characteristics, presenting the investor with a wide range of options. Prudential allows you to blend a set of portfolios to build a customized strategy to suit your needs.

MetLife Asset Allocation Program (MAAP)

The MetLife Asset Allocation Program consist of five models: Defensive, Moderate, Balanced, Growth and Aggressive. Each portfolio is managed by Met Investors Advisory, LLC, an affiliate of MetLife, Inc., one of the largest asset managers in the country.

American Funds Asset Allocation Portfolios

The American Funds Asset Allocation portfolios combine the unique portfolio management process of American Funds Investment Company with the Met Investors Advisory, LLC’s asset allocation experience. The American Funds Asset Allocation portfolios directly invest into individual American Funds Insurance Series® portfolios and offer comparable risk/returns parameters to those of the MetLife Asset Allocation Program portfolios. These portfolios are rebalanced quarterly and provide for a strong focus on broad portfolio diversification.

MET/Franklin Templeton Founding Strategy Portfolio

This MET/Franklin Templeton Founding Strategy Portfolio is a combination of three funds managed by three distinct money management groups – Franklin, Templeton and Mutual Series. Each group provides a different perspective and relies on its own team of dedicated research analysts to identify opportunities. The Met/Franklin Templeton Founding Strategy Portfolio offers diversification across multiple asset classes and may help reduce overall risk and heighten opportunity. This asset allocation strategy provides for broad diversification with minimal stock overlap among underlying funds.

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