Counterattack 2020, which is the best performing IUL index strategy and insurance company? ｜What is a "volatility control" index strategy?How can it help us?

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从Novel Coronavirus OutbreakThe number of 10 deaths brought in across the United States, to the demonstrations across the United States triggered by the death of George Floyd, and the blessings of the election year-American society has experienced continuous turbulence in the first half of 2020. And shock, which also brings great uncertainty to the future trend of the market.

By the end of MayAllianz Allianz Insurance North AmericaSurvey posted¹display,54% of Americans interviewed clearly expressed their concern that “the stock market has not really bottomed out”.

And more than72% of people believe that they have begun to rethink how to protect their future retirement funds from the volatile stock market.

Facing the market prospect of great uncertainty in the future,The demand for capital guarantee and protection has risen sharply.55% of respondents said that they are willing to give up some potential gains in exchange for protection against losses.

Therefore, it has the ability to guarantee the bottom of the principal and provide the function of "market fluctuation control"IUL policyIndex strategy, at this period, entered our field of vision.

What is the "market volatility control" index strategy of the insurance policy?

EarlyIUL policyAccount can only be tracked purelyS&P500 Market IndexThere are not many calculation methods and combination strategies for cash value accumulation.

In the fierce market competition, insurance companies have developed two main directions.One of the directions is that insurance companies and investment banks and other asset management institutions cooperate to introduce more market indexes based on rules or quantitative strategies.This type of index is usuallyThe securities index, cash and bonds constitute a dynamic balance portfolio, and provide a market volatility control rate.This type of index is called Volatility-Controlled Index in English.

Theoretically, the characteristic of Volatility-Controlled index strategy is that when the stock market fluctuates violently-as inU.S. stocks fuse中,S & P 500 IndexIt may plunge immediately, but the index strategy with "volatility control" will automatically adjust the fund portfolio in our policy account.Redistribute the proportion of securities indexes, cash, and bonds,To achieve dynamic risk control, reduce the amplitude of shocks, and maintain the purpose of gains.

If the index rate of return is negative, the insurance company will also underwrite the funds placed in the index strategy account to protect the principal from loss.

(>>>Recommended reading:What are the four most common index strategies in American index insurance and retirement annuities?）

Volatility-Controlled Index Strategy Evaluation

The theoretical idea is very good, but will the reality be very skinny?What is the actual performance of these index strategies with "volatility control" functions? How did the rate of return perform in the first half of 2020?The American Life Insurance Guide©️ selected in addition to providing regularS&P500 Index Strategyother than,alsoThe insurance company that provides the "market volatility control" index strategy is evaluated.

Through continuous tracking and monitoring with partner agencies,American Life Insurance Guide©️The evaluation team brought these index strategies, and the actual return rate data for the first half of 2020, which was violently volatile.Through the following actual market performance comparison, we will reveal which insurance company's index strategy has become the biggest winner in the "roller coaster" market in the first half of 2020.

#Benchmark: S&P500 Index

In order to demonstrate the "volatility control" functional index strategies of different companies, theThe market fluctuates violently, and the real environment is full of huge uncertaintiesUnder actual performance and specific differences, we choose to useS&P500 Index Strategy, The market data from January 1 to June 1 this year, as the benchmark control group.

DeadlineOn June 2020, 6, the S&P 2 index annual YTD control rate of return: -4.64%

#6. Pacific Investment Management Global Optima Index Strategy

This global index strategy of Pacific Investment Management Company (PIMCO) provides options for index policy accounts under AIG Insurance Company.The index strategy is a combination of a global securities market and a fixed income market in the United States.

As of June 2020, 6, the index strategy's annual YTD return rate: -9.21%

#5. BNP Paribas Momentum Multi Asset 5 Index Strategy

In the protection index insurance launched by Ameritas Merida Insurance Company in 2020, BNP Paribas’s market index strategy is provided.The index strategy can carry out dynamic asset balance on a "day" basis. The underlying assets include: stocks/securities, real estate and gold in developed and emerging markets.

As of June 2020, 6, the index strategy's annual YTD return rate: -8.70%.

#4. JP Morgan ETF Efficiente 5 Index Strategy

Symetra Insurance CompanyJP Morgan’s index strategy is added to the JP Morgan’s index policy for selection.The index strategy achieves the purpose of "volatility control" by dynamically adjusting 12 ETFs and cash.The index uses "months" as the unit to rebalance account assets.

As of June 2020, 6, the index strategy's annual YTD return rate: -2.11%

#3. Pacific Investment Management Tactical Balanced ER Index Strategy

Pacific Investment Management Company (PIMCO) isAllianz Insurance North AmericaCompanyAllianzIts index insurance policy account provides this strategy option.This strategy uses quantitative calculations to dynamically balance between stocks and bonds.
As of June 2020, 6, the index strategy’s annual YTD return rate is : -0.12%

#2. Bloomberg Financial's US Dynamic Balance II ER Index Strategy

Bloomberg Finance LP Bloomberg Finance isAllianz Insurance North AmericaCompanyAllianzIts index insurance policy account provides this strategy option.This strategy is composed of two other index strategies under Bloomberg Financial, which are dynamically adjusted "daily" according to market fluctuations.

As of June 2020, 6, the index strategy's annual YTD return rate is:Present in several = 0.91%

#1. Merrill Lynch ML Strategic Balanced Index Strategy

AIGAIU Insurance CompanyIn the index insurance policy account, Merrill Lynch’s "volatility control" function index strategy is provided for selection.The index strategy performs dynamic balance and risk management among the three asset targets of the S&P 500 Index, Merrill Lynch 10-year Treasury Bond Futures Index and cash.

As of June 2020, 6, the annual YTD return rate of the index strategy is:+ 5.82 %

The final result: the index strategy market return rate at a glance

(*使用06/02/2020-06/03/2020公开指数市场数据。指数名称和保险公司名称是各公司的注册商标，在本文和图例中仅用于识别和教育分析的目的。)

As can be seen from the above distribution chart of the rate of return, in the first half of 2020,AIGThe two index strategies provided in the index insurance policy account for two extremes respectively.

On the one hand is the ML Strategic Balanced index strategy account, which still maintains under the violent market turbulence.+5.82% positive rate of return.Became the performance champion in the first half of the year.

on the other hand,AIGThe Pimco Global Optima index strategy of the index policy has fallen by -9.21%. Therefore, if we deposit funds in this index strategy account, according to the operating principle of index insurance, the funds in the account will automatically activate 0%Earnings guaranteeThis fund guarantee function avoids our losses.

As a benchmark control groupS&P Index, 虽然Experienced a 4% drop in April, But with the start of "full resumption of work", the annual rate of return has been adjusted to-4.64%.

(Note that the evaluation results are only applicable until June 2020. The evaluation content is only used to illustrate the operation and basic principles of U.S. index insurance.)

due toS&P IndexRepresenting the fundamentals of the U.S. economy, most of the indexes participating in the evaluation have declined to varying degrees.What’s more interesting is that in the portfolio subject,Index strategies involving global markets or emerging markets, The decline exceeded the S&P index.And the portfolio subjectDominated by the U.S. economyThe "volatility control" index strategy, the decline is generally smaller than the S&P index.

Article summary

From standard S&P500 index strategy accounts to providing "volatility control" index strategy accounts, the management strategies of index insurance policy accounts are continuing to develop in the professional direction of diversification, instrumentation and transparency.

"The S&P75 index strategy account chosen by 500% of index policyholders." ——LIMRA report

For policyholders,The advantage is that we have more choices,Deal with different markets and social environments.The downside is that there may be too many choices.The specialization requirements of their respective sub-fields have continued to increase.

Therefore, choose a professional asset management typeInsurance consultantCooperation, flexible configuration of index strategies according to different market environments and periods on a regular basis, can bring stable returns to our policy accounts from a long-term perspective.In the chaotic and complicated market uncertainty, it continues to bring us peace of mind.

The American Life Insurance Guide will also continue to serve the GA and IMO organizations that support community development, continue to monitor changes in the rate of return of different index strategies under different social environments, and provide Chinese-speaking policyholders with the most cutting-edge U.S. insurance information. (End of full text)

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20210405 update:
>>>Interview with policyholders｜"I thought the decimal point (return rate) was wrong", 2021 index insurance posted the bill, the rate of return set a new record
>>>Popular science posts | What are the 4 most common index strategies in the US index insurance and retirement annuity?

20220214 update:

>>>Review | Ranking of IUL Index Accounts and Insurance Companies with the Best Returns in 2022

understand more?Contact a community insurance advisor

appendix
01."Americans' Retirement Plans While Anxiety over Continued Market Risk Remains", 05/28/2020, Allianz Life Insurance Company of North America, https://bit.ly/2Xv9WGO