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 fourth installment examines an index design that emerged in response to shifting market conditions and interest rate environments. Excess Return Indices: Pros, Cons, How and Why details how these indices can provide access to asset classes and trading strategies that everyday investors rarely use on their own and the tradeoffs required to make that happen. Ultimately, readers will walk away with a better understanding of how excess return indices might fit into a broader diversification strategy.