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Product Review | Athene Amplify 2.0


By , with Annuity FYI

Amplify 2.0 is a six-year investment, but its owners can invest for one or two years at a time, if they so choose, in some of its index offerings, including the S&P 500.

Amplify 2.0 gives owners some downside market protection but also offers unusually generous participation rates, as well as more variety in investment options.

If anything is abundantly obvious in the financial sector in 2022, it’s that the stock market isn’t performing anything like it did in 2021 or, for that matter, in 2020 and 2019. Market performance in each of the last three years was excellent and relatively stable, except for a steep but brief Covid-19-sparked sell-off early in 2020, which not long thereafter rebounded handsomely.

This year, on the other hand, the market is down, not up, and the most volatile it has been in years.

So what should folks interested in annuities and other investments do? Most should just stay the course if they have equity exposure because they are presumably investors, not traders, and the stock market has consistently risen over time. But this can be tough on your nerves. That’s especially true if you’re a retiree on a fixed income who doesn’t want to risk the health of his or her nest egg should the market switch from a bull market to a bear market as interest rates climb this year, and perhaps beyond that.

A solution may be the purchase of a newer type of annuity referred to as a Registered Index-Linked Annuity (RILA). In our opinion, the top annuity in this class is the Athene-sponsored structured annuity, Amplify 2.0, which, like all structured annuities, gives owners some downside market protection but also offers unusually generous participation rates, as well as more variety in investment options. The latter provides more opportunity for diversification – often a helpful feature if the market remains highly volatile.

Amplify 2.0 is a six-year investment, but its owners can invest for one or two years at a time if they so choose in some of its index offerings, including the S&P 500. If they opt one of the shorter routes, they can obviously examine how the market has fared and perhaps choose a different index or different multiple indexes going forward.

Here is more detail about two key advantages Amplify 2.0 has over the competition.

  • Very high index participation rates. In particular, this product offers the most competitive rate for longer-term (six year) investors in the popular S&P 500. With a protective 10% downside buffer, Amplify 2.0 offers a whopping 140% participation rate on the S&P 500. If investors opt for an even more protective 20% downside buffer, they still get a generous 125% participation rate. Another key advantage of a six-year investment term is that index participation rates do not change during the life of the investment, and there are not performance caps – typically not the case in shorter-term investments.
    Another highly attractive offering is a 105% participation rate on a one-year investment in the S&P 500 with a 10% index buffer. Index caps are generous as well. A one-year investment in the Russell 2000, for instance, offers a 30% index cap with a 10% buffer. The Nasdaq 100 index offers a 24% cap on the 1-year option and a 65% cap on the 2-year, both with a 10% buffer (downside protection). Caps on the MSCI EAFE index also substantially exceed the 100% mark.
  • An unusually wide array of market indexes from which to choose. In addition to the S&P 500, Russell 2000 and the Nasdaq 100, Amplify 2.0 also offers the Shiller Barclays CAPE index and a blended index. Capitalizing on such diversity is often an advantage in a volatile market – one likely to persist given that the market is trading at a high price/earnings ratio by historical standards and is facing a prolonged challenge of rising interest rates.It’s important to underscore that a structured annuity like Amplify 2.0 substantially dampens the blow of a down market. One common scenario, for example, would be to invest in the S&P 500 or Russell 2000 indexes and have a downside buffer of 10%. So if one of these indexes declined, say, 9.5% over the course of a year or two, the investor would lose nothing. If the market declined, say, 15% over the course of a year or two, the investor would be down only 5%.
    Another feature that sets Amplify 2.0 apart from the competition is that it offers both segment fee and no-fee versions of an investment in multiple indexes, including the highly popular S&P 500.

Here are two examples of how these work.

If you’re willing to stay with the S&P 500 index for six years with the segment fee version, you can get a 20% downside buffer and a 125% index participation rate. In the no-fee version of this investment, you would get the same downside protection and 100% index participation rate.

If, on the other hand, you’re willing to stay with the small cap Russell 2000 index for two years with the segment fee version, you can get a 10% downside buffer, no investment cap at all, and an index participation rate of 105%. In the no-fee version of this investment, you would get the same downside protection, an investment cap of 44%, and an index participation rate of 100%.

The minimum investment in Amplify 2.0 is only $10,000. The version of this product with a fee costs roughly .95% annually, based on the initial premium, and there’s a no-fee version with lower participation rates and caps (if applicable). No lifetime income riders are available. This annuity is sold by prospectus because it is possible for investors to lose money with Amplify 2.0 in a deep and prolonged bear market.

If this all sounds a little confusing we encourage you to view the following links and contact AnnuityFYI so that we can refer you to a licensed representative, familiar with Amplify 2.0 and all Registered Index-Linked Annuities.

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