3 Reasons Today to Look at a Balanced Trend Index Crediting Strategy

You may be asking yourself, what is the “Suisse Spot?” Here are three reasons to look at a Balanced Trend Index Crediting Strategy from Credit Suisse, a leading financial services company, with information from the last 10 years.*

1. For six years it outperformed the S&P 500 Index point-to-point.
2. One year it credited 6% when the S&P credited 0%.
3. It had an average return of 8.15% vs. the S&P average return of 6.71%.
Past performance is no indication of future returns. Index strategy floor is not included in these results.

National Life Group’s FlexLife and PeakLife products both offer the Balanced Trend Index from Credit Suisse that seeks to move with the market, just not to the same extremes. This design, along with a participation rate over 100% and lack of a cap may provide the best of both worlds for your clients with less tolerance for the volatility of a major market index but still looking for better interest crediting potential than a fixed interest strategy or product.**

And don’t forget, zero will still be your hero on the Balanced Trend Index. When market corrections occur, and the index is negative on the sweep date, the customer is protected and will receive zero percent interest crediting.***

While no one index is right for all of a customer’s money, having some allocated to the Balanced Trend may provide for a smoother ride for your clients than strategies that reflect the whole market.

*Results based on rates as of March 1, 2020. No actual investment which allowed tracking of the performance of the Index was possible before 11/20/2017. The return results provided herein are illustrative only and were derived by means of a retroactive application of a back-casted model designed with the benefit of hindsight. These back-casted, hypothetical, historical annualized index returns have inherent limitations. No representation is made that in the future the Index will have the returns shown. Alternative modelling techniques or assumptions might produce significantly different results and may prove to be more appropriate. Actual annualized returns may vary materially from this analysis. Any effective volatility controls may reduce the overall rate of return.

**Because of the volatility control applied to the index, there is no need for a cap.  Indexed universal life products do not directly participate in any stock or equity investments. When discussing this or other index strategies with your client, explain that this is not an investment in the market and that this is a method for crediting interest and disclose any cap, participation rate or threshold that will apply. For an Index with volatility control and the additional costs deducted from the Index value, the positive Index value change may be less than that of similar indices that do not include volatility contract and do not deduct these costs. This may result in less interest that will be credited.  When included in an IUL with the protection of a 0% floor, the benefit of reduced downside will not be realized for index returns below 0%.

***Monthly deductions continue to be taken from the account value, including a monthly policy fee, monthly expense charge, cost of insurance charge, and applicable rider charges, regardless of interest crediting.

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Additional information about our indexes can be found here.