Both Prudential Annuities and Jefferson National have expanded the investment options available to their variable annuity (VA) buyers.
For purchasers of Prudential variable annuities that elect the Highest Daily benefit option, the total number of asset allocation portfolios has risen from 19 to 21 and includes six new choices:
- AST BlackRock iShares ETF Portfolio, which invests in iShares exchange traded funds (ETFs) across global equity and fixed-income asset classes.
- AST Defensive Asset Allocation Portfolio, which is a portfolio designed for investors seeking to minimize their equity exposure.
- AST Franklin Templeton Founding Funds Plus Portfolio, which is a broadly diversified portfolio that targets stocks and bonds that appear attractively valued.
- AST Goldman Sachs Multi-Asset Portfolio, which provides access to traditionally underexposed “growth markets” regions.
- AST Prudential Growth Allocation Portfolio is an actively managed portfolio that determines allocation and security selection through a quantitative model, as well as by a review by an asset allocation team.
- RCM World Trends Portfolio takes advantage of investment opportunities and trends throughout the world by combining a quantitative model with fundamental research.
Douglas McIntosh, vice president of investment management for Prudential Annuities, tells LifeHealthPro.com that the new fund lineups were added to give financial planners more choices in addition to enabling Prudential to diversity among its fund managers. “If we don’t have a wide variety of underlying managers then we have one manager with a lot or maybe too much of our clients’ money,” he says. “We don’t want to expose our clients to single manager risk.”
Though he wouldn’t characterize any of the fund choices as particularly risky, McIntosh says they do represent a “fairly wide swath of risk tolerance.” For example, the AST Defensive Asset Allocation Portfolio includes a conservative mix of 15 percent equities and 85 percent fixed income. “There is a clamor for a conservative place to house equity-scared money,” McIntosh says.
Conversely, the Franklin Templeton option includes a “healthy” portion of non-U.S. fixed income investments. “Some investors whose time horizon and personal construction allows then to shoulder a bit more volatility may want the opportunities that small cap equities or non-U.S. fixed income are going to give to them,” McIntosh says. “For others, it’s not for them. There are options for all.”