Jefferson National Financial Corp this week launched the JNF SSgA Retirement Income Portfolio, a product managed by exchange-traded fund provider State Street Global Advisors and offered through Jefferson National's Monument Advisor flat-fee variable annuity platform aimed at registered investment advisors.
The portfolio comprises income-generating exchange-traded funds spread across four primary asset classes: domestic and international equity securities; domestic and international investment-grade and high-yield debt securities; hybrid equity/debt securities such as preferred stock and convertible securities; and real estate investment trusts.
It initially consists of 14 funds, but that number is subject to change as the allocations to each asset class change over time.
In addition, the portfolio employs a tactical management overlay using quantitative and qualitative measures, along with a methodology called target volatility trigger, or TVT designed to dampen volatility.
TVT is a proprietary, rules-based strategy developed by State Street that adjusts the exposure of assets within a portfolio to target a consistent level of portfolio risk.
According to a press release announcing the JNF SSgA Retirement Income Portfolio, State Street has previously employed TVT overseas and is bringing the strategy to the U.S. for the first time with this product.
State Street says that during the past 20 years, a 14 percent TVT strategy outperformed the S&P 500 benchmark by 73 basis points annually while improving a number of risk metrics such as lower standard deviation, lower beta and substantially improved drawdowns.
“By offering an approach similar to what insurers use to manage risk on their own balance sheets, but with substantially lower fees and greater flexibility, we help advisors and their clients meet an urgent need to generate a stream of retirement income while managing volatility,” Jefferson National chief operating officer David Lau said in a press release.