The fixed indexed annuity market is constantly evolving, with changing market conditions and shifting investor preferences forcing financial institutions to adapt and innovate. In response, Bloomberg Indices has developed the Bloomberg Versa 10 Index (BVERSA10), a cutting-edge multi-asset benchmark designed to provide a stable and diversified exposure to a range of asset classes, while targeting a 10% volatility level. Developed in collaboration with RBC Capital Markets and Salt Financial, the BVERSA10 index utilizes a rules-based framework to deliver efficient trading and robust risk management, with long and short exposure that adjusts in real time to market shifts. This approach enables financial institutions to better navigate the complexities of the fixed indexed annuity market, providing a more tailored solution for long-term retirement planning. The BVERSA10 index tracks four key asset classes: US equities, Treasuries, gold, and the US dollar. Each of these asset classes is represented by its own dedicated volatility-targeted sub-index, which is tracked by Bloomberg to ensure the most up-to-date and accurate data. The allocation of these asset classes is dynamic, shifting to balance performance and stability in a changing macroeconomic environment. The Bloomberg Dynamic US 500 10% Index is used to track US large-cap equities, while the Bloomberg Dynamic 10% Indices are used to track Treasuries, gold, and the US dollar. These tailored indices are designed to capture the unique characteristics of each asset class, providing a diversified exposure that is both broad and targeted. The allocation of these asset classes is dynamic, with the Versa 10 Index adjusting its exposure in real time to respond to market shifts. This approach enables financial institutions to better manage risk and optimize returns, while providing a more tailored solution for long-term retirement planning. One of the key benefits of the BVERSA10 index is its ability to address market concerns such as volatility, inflation, and interest rate shifts. By incorporating asset classes that respond to different economic regimes, the index provides a comprehensive solution for financial institutions looking to address these concerns. For example, US equities are used to capture growth, while Treasuries are used to capture rate sensitivity. Gold is used to capture inflation and stress scenarios, while the US dollar is used to capture global uncertainty. By incorporating these asset classes, the BVERSA10 index provides a diversified exposure that is both broad and targeted. The Versa 10 Index has already been licensed by Silac Insurance Company for inclusion in its fixed indexed annuity offerings. Dan Acker, president and chief marketing officer of Silac Insurance Co., stated, “It’s essential that our annuity offerings include tools designed to address market concerns such as volatility, inflation, and interest rate shifts. Bloomberg Indices provides a transparent, rules-based benchmark that aligns with our product objectives and helps us deliver thoughtful solutions to the market.”
Bloomberg clients can access the new index on the Bloomberg Terminal at BVERSA10 INDEX and all research and methodology for the indices are available on the Bloomberg Indices Documentation page.
| Key Features | Description |
|---|---|
| Multi-asset benchmark | Tracks four key asset classes: US equities, Treasuries, gold, and the US dollar |
| 10% volatility target | Tracks volatility-targeted sub-index for each asset class |
| Dynamic allocation | Adjusts allocation in real time to balance performance and stability |
| Rules-based framework | Delivers efficient trading and robust risk management |
- US equities: tracked by the Bloomberg Dynamic US 500 10% Index
- Treasuries: tracked by the Bloomberg Dynamic 10% Indices
- Gold: tracked by the Bloomberg Dynamic 10% Indices
- US dollar: tracked by the Bloomberg Dynamic 10% Indices
“It’s essential that our annuity offerings include tools designed to address market concerns such as volatility, inflation, and interest rate shifts. Bloomberg Indices provides a transparent, rules-based benchmark that aligns with our product objectives and helps us deliver thoughtful solutions to the market.” – Dan Acker, president and chief marketing officer, Silac Insurance Co.
Financial institutions are increasingly looking for solutions that can help them navigate the complexities of the fixed indexed annuity market. The BVERSA10 index provides a comprehensive solution that addresses market concerns such as volatility, inflation, and interest rate shifts. With its dynamic allocation and rules-based framework, the index enables financial institutions to better manage risk and optimize returns.
Bloomberg clients can access the new index on the Bloomberg Terminal at BVERSA10 INDEX and all research and methodology for the indices are available on the Bloomberg Indices Documentation page.
The Versa 10 Index is a significant development in the fixed indexed annuity market, offering a unique solution for financial institutions looking to address market concerns. With its diversified exposure and dynamic allocation, the index is poised to become a leading benchmark for the industry.
Overall, the BVERSA10 index is a valuable tool for financial institutions looking to navigate the complexities of the fixed indexed annuity market.
