Salt Financial Annuity Index analytics report for 2024
January 14, 2025 by Staff Reports
Below is the December version of the Salt Financial Annuity Index Report, which also serves as the full-year report for 2024. One index was added over the last month, the First Trust Growth Strength™ Net Fee Index, featured in a RILA at Pacific Life.
Wink’s Moore on the Market: So, Salt Financial has some on the performance of indices offered on indexed and structured insurance products. StattyStatStats
Here is what my takeaways were:
– Most volatility-controlled indices offered as crediting strategies in FIAs are excess return, meaning a risk-free rate of interest is deducted from the index return before the policyholder can begin earning credits;
– Weak performance from bonds and commodities outside of gold weighed on returns for volatility-controlled, multi-asset indices versus equity-only (or “equity-forward”) designs;
– One thing to note is that despite similar nominal returns for the year, volatility in technology shares (QQQ) was considerably higher than the broader market (SPY);
– The average equity-only index (adjusted to standard 5%/50 bp fee) gained 3.2% in 2024 compared to only 0.8% for the average multi-asset index; and
– 87% of equity-only indices had a positive return for the year compared to only 52% for multi-asset. -sjm