VIP Select
Active Management of Your Variable Annuities
For investors looking for a professionally managed variable annuity strategy in an increasingly complex economic environment, Advanced Equities Asset Management (AEAM) has created VIP Select—an active, professionally managed allocation strategy utilizing variable annuity sub-account investment options from some of the financial world's leading platforms.
Why actively manage your portfolio?
Although asset class diversification is thought to be largely responsible for investment performance, many investors fail to recognize that individual asset classes have historically performed differently under different sets of market conditions. By setting a static allocation for the life of a portfolio, an investor may be missing opportunities to enhance performance and/or reduce volatility that could be determined from the study of intermediate-term, multi-month or multi-year market phases and cycles. Perhaps more importantly, static allocations may not allow an investor the flexibility to sidestep "down" trends and other bearish circumstances.
The bottom line is that things can and do change. Responding to change requires flexibility, expertise and systematic rigor.
VIP Select seeks to help maximize an efficient approach to retirement savings accumulation through tax-deferred growth of variable annuity accounts. Investors match the management of their variable annuity portfolio to their risk tolerance and investment objectives, and then enjoy consistent, professional oversight of their variable annuity sub-accounts.
This advisory service requires the purchase of a variable annuity which is subject to insurance related costs, including mortality and expense risk charges, administrative fees and the expenses associated with the underlying sub-accounts in conjunction with the expenses associated with VIP Select.
The AEAM Difference
AEAM works with many top variable annuity providers, including Nationwide, American Skandia, Pacific Life, ING, Allianz, Jackson National and AXA. The AEAM portfolio management team employs a rigorous selection process for identifying the sub-accounts to use in allocations. The first step is to uncover the sub-accounts that each most closely match their asset class benchmark with the least amount of tracking error. Since the majority of investment performance is derived from allocation decisions, AEAM seeks to identify sub-accounts that are most closely representative of their target asset classes. Given a minimal amount of tracking error, AEAM attempts to find sub-accounts that have consistently provided "alpha," or excess returns, over their benchmark.
Upon identifying the most appropriate asset classes, AEAM portfolio managers then employ a dynamic asset allocation system that features comprehensive risk analysis, proprietary, quantitative techniques and tactical portfolio adjustments. In essence, AEAM's portfolio management team strategically rebalances client portfolios based on fluctuating market conditions, rather than relying on static asset allocations. This process seeks to identify and capitalize on bullish, bearish and range-bound market trading environments while accounting for inflationary and deflationary forces. The goal of the VIP Select program is to provide active asset allocation of variable annuity sub-accounts to mitigate some of the short- and intermediate-term volatility of investing, with a focus on attempting to control downside risk.
The Structure of Your Account
A VIP Select account is constructed with two complimentary components, each utilizing variable annuity sub-accounts.
Strategic (Active): The Strategic (active) component allows for the adjusting of holdings based on AEAM market cycle and phase analysis, rebalancing accounts to seek optimal allocations based on market conditions.
Core (Static): The Core (static) component provides a consistent, optimized and diversified base of stock, bond and alternative asset holdings.
There can be no assurance that any investment strategy will be successful in achieving your investment objectives. Past performance is not an indication of future returns. There are fees and costs involved in the active management of your variable annuity investment. All fees and costs are outlined in the Form ADV Part II and the Investment Advisory Agreement. Please refer to these documents for any questions. Investment Advisory Services offered through First Advisors Inc. Variable annuities are long-term investment vehicles designed for retirement purposes. Guarantee features are available for additional fees and restrictions apply. Guarantees are based on the claim-paying ability of the issuing insurance company and do not apply to the investment performance or safety of the underlying sub-accounts of the variable annuity contract.
VIP Select Management Styles
VIP Select 100—Equity Growth
Appropriate for investors who prioritize capital appreciation over capital preservation, who have an above average risk tolerance, and/or a time horizon of 7+ years. The actively managed, balanced portfolio provides diverse exposure across multiple equity and alternative asset classes in its core component, and may include fixed income asset classes in its strategic component, depending upon the manager's outlook. The equity allocation for the portfolio will be between 80% to 100%, and will include both domestic and international equity funds. The managers will strategically adjust the allocation of the portfolio within this equity range based upon their analysis of intermediate-term market conditions.
VIP Select 80—Growth
Appropriate for investors who prioritize capital appreciation over capital preservation, who have an above average risk tolerance, and/or a time horizon of 5 to 10 years. The actively-managed, balanced portfolio provides diverse exposure across multiple equity, fixed income, and alternative asset classes. The equity allocation of the portfolio will be between 40% to 80%, and will include both domestic and international equity funds. The managers will strategically adjust the allocation of the portfolio within this equity range based upon their analysis of intermediate-term market conditions.
VIP Select 60—Moderate Growth
Appropriate for investors who seek both capital appreciation and capital preservation, who have an average risk tolerance and a minimum time horizon of 5 years. The actively managed, balanced portfolio provides diverse exposure across multiple equity, fixed income, and alternative asset classes. The equity allocation of the portfolio will be between 35% to 75%, and will include both domestic and international equity funds. The managers will strategically adjust the allocation of the portfolio within this equity range based upon their analysis of intermediate-term market conditions.
VIP Select 40—Growth & Income
Appropriate for investors who seek both capital appreciation and capital preservation, who have an average risk tolerance and a minimum time horizon of 5 years. The actively managed, balanced portfolio provides diverse exposure across multiple equity, fixed income, and alternative asset classes. The equity allocation of the portfolio will be between 30% to 60%, and will include both domestic and international equity funds. The managers will strategically adjust the allocation of the portfolio within this equity range based upon their analysis of intermediate-term market conditions.
For more information on VIP Select or to speak to a member of the AEAM portfolio management team, please call (866) 299-4864.
Variable Annuities are sold only by prospectus. Please consider the product's features, risks, charges and expenses, and the investment objectives, risks and policies of the underlying portfolio, as well as other information about underlying funding options carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
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Advisory services offered by First Advisors, Inc.