Since the global financial crisis of 2008, the development and use of indices has been propelled by an increased interest in passive investing. As a result, continued evolution and an increase in indices have become available on fixed indexed annuities (FIAs).

NAFA’s newest educational series seeks to communicate why in the context of retirement planning, both for saving and income purposes, indices have become a cornerstone of innovative annuity designs and applications. The third installment dives into Risk Control Indices: Past, Present and Future, which seek to dynamically allocate between cash and riskier assets to provide smoother returns over time. This piece summarizes the fundamentals of the risk control technique, how clients can benefit from these indices and what’s ahead as index innovation continues.