Whitepaper: Managing Risk with Fixed Indexed Annuities

Dr. Wade Pfau, PhD, CFA® recently partnered with inStream to create a portfolio simulator tool that incorporates fixed indexed annuities as an asset class. The tool allows users to compare hypothetical performance of traditional portfolios against those that also include allocations to fixed indexed annuities (FIAs).

In his research, Dr. Pfau deployed FIAs as a complement to fixed income allocations. Because of the low interest rate environment of the last several years, Dr. Pfau’s research sought to determine if fixed indexed annuities may help offset the lower returns for fixed income assets.

The imperative stems from the impact of these low interest rates which Pfau recognizes is effectively “an increase to the cost of funding retirement goals.” Because conservative investors need better returns without additional equity exposure, they need lower-risk solutions.

Learn more about how Dr. Pfau employed FIAs as an asset class—insuring a portion of a hypothetical portfolio against losses to improve wealth accumulation.