Managed Volatility Options were introduced during times of financial duress, but it seems counterintuitive to try to control volatility on a fixed indexed annuity that already provides principal protection. While there are exceptions with a longer track record and stable pricing, the vast majority of these products have shown extremely high performance only under selected dates and charts. Our fiduciaries' assessment of managed volatility proved correct, with very few options passing actual permutation backtesting. The advantages of managed volatility indices include higher consistency of return at a higher than fixed interest rate, but it is still viewed as a misguided attempt to solve the Date Lottery at a cost. The lack of historical data on many of these low-traffic indices is concerning, and it is reasonable to assume that established indices like the S&P or Dow will provide more stable pricing options in the future.

That's why we sell annuity contracts with guaranteed minimum caps in participation rates, and prioritize the use of tried-and-true strategies for your money. We understand that the stability of future option pricing is important to annuity consumers, and we take this into consideration when utilizing fixed index annuities in our allocation method.

While we typically steer clear of managed volatility contracts, we have discovered a subset of these contracts that can offer a solid application for those seeking a higher return with a higher level of stability. Our Averill family portfolio includes certain specific managed volatility allocations with certain specific carriers, but this should not be taken as a recommendation to purchase any managed volatility contract.

If you ask us to do historical testing on a managed volatility contract, please don't be offended if we refuse. It's common for the indices to have no history, and we cannot invent track records. Some companies may try to guess at what would have happened in the past based on current trends, but we do not believe in this approach. Instead, we focus on the future and strive to make informed decisions based on sound principles and proven strategies.