Some people are not sure what equity-indexed annuities are, so let’s talk about that! Equity indexed annuities are investments where the return is linked to the performance of an underlying index. When you invest in this type of annuity, you have the potential for more money if there is a bull market. You also have some protection against losses if there is a bear market.
Which of the Following Is Invested in an Equity Indexed Annuity?
When you buy an equity-indexed annuity, you are not investing in the market or the index directly.
The interest earned by a fixed indexed annuity is based on changes in an index. Some indexes are intended to show how the overall financial markets (i.e. S&P 500 and Dow Jones Industrial Average) are performing at a specific time (known as the index term). Others are designed to show how a certain financial market is doing (such as the Nasdaq).
The insurance company calculates how a change in the index affects the amount of interest to add to your annuity at the end of each index term using a formula.
When interest is credited to your annuity for an index term, it remains locked in, and changes in the index in the following index term have no impact. If you withdraw funds from an indexed annuity before its term expires, the annuity may not add all of the index-linked interest to your account.
Equity Indexed Annuity Indexes
There are several indexed annuities that offer you more than one index to choose from. Many indexed annuities also give the option of investing a portion of your money in a fixed interest rate account with an unchanging interest rate for a set duration.
- Credit Suisse Momentum
- Global Balanced
- iShares Gold Trust
- 3-Month LIBOR
- AB All Market
- AB Growth and Value Balanced
- AI Powered Multi-Asset
- AI-Powered US Equity
- Annuity Linked TVI
- AQR DynamiQ Allocation
- Avantis Barclays Volatility Control
- Bank of America Merrill Lynch GPA 5
- Barclays ARMOUR II Gross USD 7% (ER)
- Barclays Atlas 5
- Barclays Focus50
- Barclays Global Trailblazer
- Barclays Low Volatility 5
- Barclays Shiller Allocator 6
- Barclays Trailblazer Sectors 5
- BlackRock Dynamic Allocation
- BlackRock ESG U.S. 5% (ER)
- BlackRock iBLD Ascenda
- BlackRock iBLD Claria
- BlackRock iBLD Claria (ER)
- BlackRock iBLD Diversa VC7 (ER)
- BlackRock iBLD Endura VC5.5 ER
- BlackRock Select Factor
- Blended Indices
- Bloomberg Barclays US Aggregate Bond
- Bloomberg Commodity (ER)
- Bloomberg US Dynamic Balance
- Bloomberg US Dynamic Balance II
- Bloomberg US Dynamic Balance II (ER)
- BNP Paribas High Dividend Plus
- BNP Paribas Momentum 5
- BNP Paribas Multi-Asset Diversified 5
- BNP Paribas US Innovative Leaders 5
- BofA Destinations
- CIBC Balanced Asset 10
- CIBC Balanced Asset 5
- Citi Flexi-Beta 5 (ER)
- Citi Flexible Allocation 6 (ER)
- Citi Grandmaster
- Citi Risk Balanced 5% Net
- Credit Suisse RavenPack AI
- Credit Suisse Tactical Multi Asset
- Credit Suisse Tech Edge
- Credit Suisse truVol US Target Sectors
- CROCI Sectors II 5.5% VC
- CROCI Sectors III USD 5.5% VC
- CROCI US 5% VC
- CROCI US Plus II DB
- Dow Jones Industrial Average
- Dow Jones U.S. Real Estate RC 10%
- Dow Jones US Real Estate
- Energy Select Sector SPDR Fund
- Euro Stoxx 50
- Fidelity AIM Dividend
- Fidelity Multi Factor Yield 5% (ER)
- Financial Select Sector SPDR Fund
- First Trust Capital Strength Barclays 5%
- First Trust Capital Strength ETF
- Franklin Quality Dividend
- Franklin US
- Gold Commodity
- Goldman Sachs Dynamo Strategy
- Goldman Sachs Mariner
- Goldman Sachs Momentum Builder Multi-Asset Class
- Goldman Sachs Motif Aging of America Dynamic Balance
- Goldman Sachs Pathfinder
- Goldman Sachs Voyager
- Goldman Sachs Xenith
- Guggenheim RBP Blended
- Hang Seng
- Health Care Select Sector
- Horizon Ascend 5
- Invesco QQQ ETF
- iShares Core S&P 500 ETF
- iShares MSCI Emerging Markets ETF
- iShares Russell 2000 ETF
- iShares US MSCI EAFE ETF
- iShares US Real Estate ETF
- J.P. Morgan Balanced Capital Strength 6
- J.P. Morgan Cycle
- J.P. Morgan ETF Efficiente 5
- J.P. Morgan First Trust Balanced Capital Strength 5
- J.P. Morgan Mojave
- J.P. Morgan Mozaic
- J.P. Morgan Mozaic II
- J.P. Morgan Strategic Balanced
- J.P. Morgan U.S. Sector Rotator 5
- Jackson Multi-Strategy
- Jackson Strategic4
- Janus SG Global Trends
- Janus SG Guidance Index Value Lock
- Janus SG Market Consensus
- Janus SG Market Consensus II
- LBMA Afternoon (PM) Gold Price
- Lenwood VC
- Loomis Sayles Managed Futures
- Merrill Lynch RPM
- ML Strategic Balanced
- Momentum Asset Allocator 5.5% VC
- Morgan Stanley 3D
- Morgan Stanley Diversified Select
- Morgan Stanley Dynamic Allocation
- Morgan Stanley Dynamic Balance
- Morgan Stanley Dynamic Contribution
- Morgan Stanley Dynamic Rotator
- Morgan Stanley Expanded Horizons
- Morgan Stanley Global Opportunities
- Morgan Stanley Target Equity Balanced
- Morningstar Dividend Yield Focus Target Volatility 5
- Morningstar Wide Moat Focus Barclays VC 7% (ER)
- MSCI ACWI
- MSCI EAFE
- MSCI Emerging Markets
- MSCI KLD 400 Social
- NASDAQ Biotechnology
- Nasdaq Composite
- NASDAQ FC
- Nasdaq-100
- NYMEX Crude Oil Front Month
- NYSE Expanded Opportunities
- NYSE Zebra Edge
- NYSE Zebra Edge II
- PIMCO Balanced
- PIMCO Equity Fusion
- PIMCO Global Elite Markets
- PIMCO Global Optima
- PIMCO Tactical Balanced
- PIMCO Tactical Balanced (ER)
- PIMCO US Fundamental Balanced
- Putnam Dynamic Low Volatility (ER)
- RBA Select Equity Yield CIBC 5%
- Russell 2000
- S&P 10-Year U.S. Treasury Note Futures
- S&P 500 (TR)
- S&P 500 7.5% DRC
- S&P 500 Average DRC 10% USD Price Return
- S&P 500 Average DRC 5%
- S&P 500 Dividend Aristocrats DRC 5% (TR)
- S&P 500 Dividend Aristocrats DRC 5% USD (ER)
- S&P 500 Dividend Aristocrats DRC 8% (TR)
- S&P 500 DRC 10% (TR)
- S&P 500 DRC 5% (TR)
- S&P 500 DRC 5% USD (ER)
- S&P 500 DRC 7% USD (ER)
- S&P 500 DRC 8% (TR)
- S&P 500 ESG
- S&P 500 Factor Rotator Daily RC2 7% (ER) USD
- S&P 500 Index
- S&P 500 Low Volatility DRC 5% (TR)
- S&P 500 Low Volatility DRC 5% USD (ER)
- S&P 500 Low Volatility DRC 8% (TR)
- S&P 500 Low Volatility DRC 8% USD (ER)
- S&P 500 Sector Rotator DRC2 5% (ER)
- S&P Economic Cycle Factor Rotator
- S&P Maestro 5 (ER)
- S&P MARC 5% (ER)
- S&P MARC 5% (TR)
- S&P MidCap 400
- S&P PRISM Factor
- S&P US Retiree Spending (TR)
- SG Columbia Adaptive Risk Allocation
- SG Columbia Global Market States
- SG Entelligent Agile 6 VT
- SG Global Sentiment
- SG Macro Compass
- Shiller Barclays CAPE US
- Shiller Barclays Global
- Smart Passage SG
- SPDR Gold Shares ETF
- Technology Select Sector
- UBS Market Pioneers
- US 10 Year Treasury
- WisdomTree Siegel Strategic Value
Why is An Equity indexed annuity considered to be a fixed annuity?
Equity indexed annuities are a type of fixed annuity that earns interest based on changes in a market index, which measures how the market or part of the market performs. The interest rate is guaranteed to never be less than zero, even if the market goes down. When you buy an equity-indexed annuity, you are not investing in the market or the index directly.