Searching for an Oasis

This roundup of investment flow reports from Beacon Research, Strategic Insight, Morningstar and the Insured Retirement Institute suggests that investors are looking for shelter from an economic sandstorm in which visibility has declined to zero.

Research Roundup

We summarize four recent papers: 'Portfolios for Long-Term Investors,' 'What is the Value of Annuities?,' 'Public Economics and Inequality: Uncovering Our Social Nature,' and 'Financial and Total Wealth Inequality with Low Interest Rates.'

An Annuity’s ‘Moneyness’? There’s an App for That

How will variable annuity contract owners use their income benefits? That question is vital to annuity issuers and to fiduciary advisers with clients who own VAs. This Texas Dep't of Insurance actuary knows a product that can help them find out.

A Chip Off the Old Rock?

Bloomberg reported this week that Prudential is considering selling its retirement plan recordkeeping business. Prudential didn't confirm the report, but several industry insiders did. Low interest rates, high costs of IT makeovers, and sticky stable value fund guarantees are driving the move, RIJ was told.
News

Moody’s and A.M Best disagree on GM-Prudential deal

Differing signals from ratings agencies are feeding speculation about GM's huge pension risk transfer to Prudential Financial, and about the longevity and other risks associated with the unprecedented deal.

Correction

Last week’s feature article in RIJ, "Prudential Files '2.0' Version of Highest Daily VA Rider," mistakenly described the fee structure as a new development. That fee structure, used in the “O” share of the contract, was created in 2011 for use by a specific broker dealer.

Was Facebook the Death Knell of Equity Investing?

The ever-bearish Martin Hutchinson expects equities to represent a good value again... when Ben Bernanke is gone and after the Dow Jones Industrial Average settles to about 5,000.

Pardon Our Dust

During the transition to a bigger, better server, we experienced a service interruption over the weekend. It's just growing pains.