Indexed Annuity Index Spread

[jmhalvo]

With Allianz spread up to 3.5, what do people think about American Equity s index? Spread is only 1.0

 

[liorselamb]

With Allianz spread up to 3.5, what do people think about American Equity s index? Spread is only 1.0

Is it uncapped as well?

 

[SanDiego619]

Is it uncapped as well?

Yes uncapped. Although you won't hear that term from AEI.

To be specific the spread is 1% on the Traditions Gold product. Which for those people who don't sell AEI, is really more their accumulation product (No bonus. 5.25% annual pt to pt 2.3 monthly pt to pt). The bonus products are understandably higher spreads at 2.25-2.5%.

As far as the index goes,

It seems decent to me but I feel like (based on recent performance and the composition of the index) upside potential is a little held back. The equity portion of the index is easy enough to understand and a pretty strong story. However, the 2nd portion of the index (3 month LIBOR) isn't going to return much. Now I know, it's not like the bond market is lighting up the world (referring back to BUDBI) but at least it has the potential to actually return something decent in a better bond market.

Keeping this brief, a lot of our guys are using Traditions Gold with a mixture of tradition cap methods and a portion of this index for accumulation plays or at least better upside potential. Then of course throwing on AEI's free rider. I don't think I have heard an app written 100% into AEI uncapped strategy like I have heard so many people do with Allianz' BUDBI. But that's just me...

 

[Josh Landis]

With Allianz spread up to 3.5, what do people think about American Equity s index? Spread is only 1.0

Allianz still has the Core Income 7 which is a good product, spread is 2.25% and it's a 7 year product. Also, I like the Americo product for accumulation, although they have lowered the allocation from 80% uncapped S&P to 65%. Carriers are lowering rates and increasing spreads across the board. I was talking with a guy I work with Friday and I had to remind him that we can't compare products to what they used to be, but you have to compare them to what else is available. I don't know enough about the AE index to make any judgements, but I am always a believe in the S&P. I like S&P products because it's easy to understand and nobody is ever going to question or blame you for allocating money to the S&P like they might about some index which they don't know anything about how it works or what's in it.

 

[jmhalvo]

Yes uncapped. Although you won't hear that term from AEI. To be specific the spread is 1% on the Traditions Gold product. Which for those people who don't sell AEI, is really more their accumulation product (No bonus. 5.25% annual pt to pt 2.3 monthly pt to pt). The bonus products are understandably higher spreads at 2.25-2.5%. As far as the index goes, It seems decent to me but I feel like (based on recent performance and the composition of the index) upside potential is a little held back. The equity portion of the index is easy enough to understand and a pretty strong story. However, the 2nd portion of the index (3 month LIBOR) isn't going to return much. Now I know, it's not like the bond market is lighting up the world (referring back to BUDBI) but at least it has the potential to actually return something decent in a better bond market. Keeping this brief, a lot of our guys are using Traditions Gold with a mixture of tradition cap methods and a portion of this index for accumulation plays or at least better upside potential. Then of course throwing on AEI's free rider. I don't think I have heard an app written 100% into AEI uncapped strategy like I have heard so many people do with Allianz' BUDBI. But that's just me...

Good stuff, thanks. I love going No Fee and Uncapped, even if it's not full SP

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Allianz still has the Core Income 7 which is a good product, spread is 2.25% and it's a 7 year product. Also, I like the Americo product for accumulation, although they have lowered the allocation from 80% uncapped S&P to 65%. Carriers are lowering rates and increasing spreads across the board. I was talking with a guy I work with Friday and I had to remind him that we can't compare products to what they used to be, but you have to compare them to what else is available. I don't know enough about the AE index to make any judgements, but I am always a believe in the S&P. I like S&P products because it's easy to understand and nobody is ever going to question or blame you for allocating money to the S&P like they might about some index which they don't know anything about how it works or what's in it.

Core Income 7 is 2.25 plus fee so ....only good for Income play not Accum