publication . Article . 1991

The Performance of Variable Annuities

Michael J. McNamara; Henry R. Oppenheimer;
Open Access
  • Published: 01 Jan 1991 Journal: Journal of Insurance Issues, volume 14, issue 2, pages 15-30
Abstract
Variable annuities have become increasingly important in retirement plans. This paper provides an examination of the investment performance of variable annuities for the period year-end 1973 to year-end 1988. Returns, risk, and selectivity measures are analyzed for the sample of annuities, for individual variable annuities, and for subsamples of annuities with similar portfolio size and turnover. While the investment returns of variable annuities were greater than inflation over the period, the returns materially trailed the Standard and Poor’s 500 even after accounting for variable annuities’ below-market risk.
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