Currently, exchange traded funds are not available for insurance products, because federal regulations require a variable annuity investment option be available only to VA owners. According to Investment News, Mutual funds have been "cloned" to allow VA participants the opportunity to invest in the fund. And VAs can invest in the "cloned" mutual funds that contain ETFs. But Advanced Sales has gone a step further and filed for approval from the SEC to offer exchange traded insurance funds (ETIF).
These ETIFs would allow VAs the chance to use the increasingly popular investment vehicle, ETFs. The appeal is the same as for individual investors, lower fees, sector investing and hedging capabilities. This is just another example of ETFs making their way into the mutual fund playing field.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.