March Annuity Index Report

Below is the March edition of the Salt Financial Annuity Index Report available for download:

Salt Financial – Annuity Index Analytics

For this month, the following indices have been added to the report:

We should note that all five of these new indices use some form of intraday mechanism in their design, which has been a growing trend. For more information on intraday features in volatility-controlled indices, revisit our "Intraday Everywhere" piece located here.

Q1 2025 Commentary

The first quarter of 2025 proved challenging for equities, with broad-based weakness across major U.S. indexes. Large-cap stocks (SPY) declined by 4.2%, while technology shares (QQQ) saw steeper losses, down 8.1%. Small caps (IWM) fared the worst among major equity groups, falling 9.5%.

In contrast, defensive assets delivered strong returns. Treasuries gained 3.8%, and gold surged 17.4%, offering valuable diversification benefits in a risk-off environment.

The average custom equity-only index available for crediting in fixed index annuities posted an average return of -1.5%, outperforming the generic equity volatility-control benchmark (uses just SPY and cash), which returned -2.0%. Keep in mind these are adjusted returns as we align all indices in the report to a 5% volatility target with a 50-bps index fee and no transaction or holding costs for easier comparisons.

Multi-asset indexes held up better, averaging +0.1% versus -0.4% for the generic SPY/IEF-based benchmark. On a broader scale, US-focused indices (equity-only and multi-asset) finished the quarter averaging -0.4%, while global indices — most of which are multi-asset — edged up 0.1%.

The dispersion in performance highlights the value of asset allocation with some diversifying assets in navigating volatile market conditions.

A lot of the first- or second-generation multi-asset indices were mostly variations on stock-bond combos but newer indices have featured designs with commodities, long/short elements, and more tactical asset allocation. Indices with a gold allocation were largely insulted from declines so far this year, powering a lot of the top performers on our multi-asset leaderboard YTD and over the trailing one-year period. In equity-only, more defensive low volatility and high dividend indices outperformed, which were laggards in 2024.

As always, if you have questions, comments, or suggestions, please do not hesitate to contact us at analytics@saltfinancial.com.