North American Introduces Fidelity Index

WEST DES MOINES, Iowa, May 05, 2020 (GLOBE NEWSWIRE) -- To meet growing client concerns about market volatility, North American Company for Life and Health Insurance^® (North American) is launching access to a new index designed by Fidelity for use in its crediting strategies. The index combines key factors in such a way to help enhance returns and manage risk given the current volatility of today’s markets.

The Fidelity Multifactor Yield Index 5% ER^SM leverages Fidelity’s established legacy of asset management capabilities. This new index will be added as an available option to North American’s VersaChoice fixed index annuity.

“Any index seeks to capitalize on market growth, however, it can be challenging as we witness the fluctuating markets today’s investors face,” said Bryce Biklen, chief distribution officer for North American’s annuity division. “This new index is targeting a combination of factors, which aim to enhance returns with a focus on dividend yield. Our goal is to optimize growth potential.”

A factor refers to a characteristic of a security that helps explain its risk and return behaviors. By combining key factors with a focus on stable, lower risk, the Fidelity Multifactor Yield Index 5% ER^SM seeks to deliver more consistent returns over time. This new index blends six specific equity factors which include:

• Dividend Yield – securities that pay higher dividends
• Low Volatility – securities of historically lower-risk
• Momentum – positive-trending securities
• Quality – financially healthy companies
• Size – smaller, potentially more agile companies
• Value – securities that are relatively less expensive

A feature of this index is a 5% volatility control target that aims to maintain consistency through changing market conditions. A fixed-income overlay, which can include 10-year treasuries and cash, is applied to help control volatility. This overlay can adjust daily to help meet a 5% volatility target.

“We’re committed to helping our clients solve challenges and continuously look for opportunities to leverage our asset management capabilities to provide them with solutions,” said Matt Aurelia, senior vice president, Fidelity Institutional.

The new Fidelity Multifactor Yield Index 5% ER^SM is now available through North American, a member company of Sammons Financial Group.

“Our agents – and more importantly their clients – expect innovation backed by expertise in meeting today’s financial planning challenges,” said Biklen. “This new index is a sound tool to meet changing client needs.”