ETF Trends
ETF Trends

Exchange traded funds (ETFs) could be considered part of the "in-crowd," and that may be part of the reason they are now finding their way into variable annuities.

Jesse Emspak for Investors Business Daily reports that Jefferson National Life Insurance is adding them to their variable annuities because of advisor demand for a low-cost building block for mutual funds. Although variable annuities cannot have ETFs in them by themselves, they can have funds of ETFs.

A host of surveys and studies are increasingly revealing that advisors like the looks of ETFs.

ETFs offer more ways to build an index than mutual funds do, and variable annuities do not offer as many options as advisors may prefer. The variable annuities market is $1.2 trillion strong, and this combination of ETFs with the annuities is only available to retail investors. Tax-deferral is a great advantage of variable annuities for investors.

A variable annuity is a contract between you and an insurance company, where the insurer makes periodic payments to you.

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.