Morgan Stanley Gets Index Into Nationwide Annuity

"The index seeks to reduce risk by maintaining exposure to asset classes that are perceived to be trending positively, while paring back exposure to those asset classes that are trending negatively," the index managers say on their section of the Morgan Stanley website. "Despite potential for reduced upside, the diverse, dynamic and driven features of the Morgan Stanley 3D Index are designed to create growth opportunities while controlling for risk and drawdowns."tection.

The index came to life July 18, 2018. Nationwide is the first issuer to use the index inside an indexed annuity.

If the index had existed all year in 2018, it would have suffered a 1-year loss of 0.97%, compared with a loss of 6.2% for the S&P 500, according to Morgan Stanley. That compares with a 2018 gain of 1.4% for an S&P index based solely on returns on 5-year U.S. Treasury note futures.

Eric Henderson, a Nationwide senior vice president, said in a statement that the structure of the  Morgan Stanley 3D index will let Nationwide offer higher cap rates with the index than with indexes based solely on investments in stocks.

— Read Insurers Ask NAIC to Ease Annuity Index Illustration Age Rule, on ThinkAdvisor.

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