New ESG, vol control indices enter US annuities market

People Moves

The new indices come on the heels of the new artificial intelligence based BofA Iris U.S. Sectors Index

On a monthly basis the index compares one year returns of the two ESG components and allocates 100% to the outperforming constituent.

The index then applies a volatility target methodology to achieve a 20% volatility target level and a performance control mechanism to cap and floor the monthly return between -8% and +4%. This mechanism employs a dollar cost averaging feature and is applied daily to diversify the risk of hitting the cap level and floor level.

Aspida Life Insurance Company and Market Synergy Group have partnered to launch the new Synergy Choice Max fixed index annuity (FIA) series which includes two new custom indices developed by Citi and Goldman Sachs.

‘Given the uncertainty in today's markets, the opportunity to provide protection with innovative growth potential is more critical than ever,’ said Lance Sparks (pictured), president of Market Synergy Group.

The new Synergy Choice Max indexed annuity five- or ten-year surrender terms linked to two new custom indexing strategies - Citi Aria Index and Goldman Sachs Grand Prix Index - in addition to the S&P 500 index.

The Citi Aria Index is a 100% equity index that dynamically allocates monthly between two ESG underlyings - Citi Global ESG index and Citi US Tech ESG index, based on a historical performance signal.

The index is exposed to US Tech ESG equity via the Citi US Tech ESG Index; and global developed markets with a basket composed of 55% Citi US Large Cap ESG Index and 45% iShares ESG Aware MSCI EAFE ETF.

The Goldman Sachs Grand Prix Index deploys signals from market anomalies to drive dynamic rebalancing between US technology equity. The index aims to provide exposure to an equity futures and US Treasury futures bond portfolio and seeks to capitalise on calendar-based signals and price patterns.

The new underlying dynamically allocates between an index of US technology equity futures for equity exposure – the US Technology Equity Futures Rolling Strategy Series Q Excess Return Index, which is calculated by Solactive, and an index of 10-year T-Note futures for bond exposure while targeting 4.5% volatility.

It then applies a patent pending volatility control mechanism - the truVol Risk Control Engine - which aims to increase accuracy and responsiveness by using intraday data and proprietary mechanism determined and designed by Salt Financial Indices.

Salt Financial Indices has been supplying its truVol technology to the US structured products market since 2020 after launching a partnership with Credit Suisse to launch several quantitative investment strategies (QIS) including the CS Tech Edge index.

The Application Programming Interface (API), is a web-based software application which allows clients to access our data in a controlled manner & integrate it using their own software packages & systems.