TITLE
"The Performance of Variable Annuities," Journal of Insurance Issues, Michael
J. McNamara and Henry R. Oppenheimer. July 1991, Vol. XIV, No.
2, pp. 15-30.
ABSTRACT
Variable annuities have become increasingly important in retirement plans. This paper
provides an examination of the investment performance of variable annuities for the period
year-end 1973 to year-end 1988. Returns, risk, and selectivity measures are analyzed for
the sample of annuities, for individual variable annuities, and for subsamples of
annuities with similar portfolio size and turnover. While the investment returns of
variable annuities were greater than inflation over the period, the returns materially
trailed the Standard and Poors 500 even after accounting for variable
annuities below-market risk.
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