Wealth Management published an article by Dave Byrnes, Head of Distribution, on the use of annuities to diversify portfolios in its August issue.
The article covers the potential value of using fixed and fixed index annuities as diversification tools in volatile markets.
Fixed and fixed index annuities diversify your client retirement portfolios by taking market loss off the table, protecting assets from corrections and bear markets.
Fixed annuities provide a convenient way to lock-in current rates, for a specified period of time, unlike typical bond mutual funds and ETFs. Rates have moved down, but you can still find fixed annuities offering nearly 5%, so it may be a good time to buy and secure current rates if you can. Fixed index annuities (FIAs) offer similar benefits but leverage crediting strategies that earn interest based on part of the positive movements in financial indices. Allocating into the same stock strategy year after year may leave money on the table for your clients. FIAs provide options across a diversified set of indexes that help reduce dependence on the performance of a single index and allow you to mirror your equity outlook within the safety of the annuity.