Jefferson National Adds More Liquid Alternatives to Help RIAs and Fee-Based Advisors Manage Risk and VolatilityTax-Advantaged Investing Platform Expand Industry’s Largest Lineup with New Fund from ALPS, BlackRock and Neuberger Berman
Louisville, KY—May 5, 2015—Jefferson National, a market leader in tax-advantaged investing for RIAs and fee-based advisors , continues to optimize it’s fund lineup within Monument Advisor, the industry’s first1 and only Flat-Fee2 Investment-Only Variable Annuity (IOVA), adding more new investment options embedded with unique strategies to manage risk and volatility. Jefferson National’s Monument Advisor offers more than 350 investment options, including 69 alternatives—the industry’s most underlying funds3 and the most liquid alternatives4 utilizing strategies like those favored by hedge funds and elite institutional investors.
“To manage risk, hedge against volatility and build more resilient client portfolios in today’s turbulent market , research confirms that an increasing number of advisors are using alternative investments—and using tax deferral to optimize alternatives’ performance,” said Laurence Greenberg, President of Jefferson National. “With the industry’s most underlying funds, and more liquid alternatives than any other Investment-Only VA, Jefferson National’s Monument Advisor is a tax-advantaged investing platform tailor made to meet the needs of more RIAs and fee-based advisors.”
In response to strong advisor demand, Jefferson National’s latest additions include three new liquid alternatives. ALPS|Red Rocks Listed Private Equity Portfolio provides exposure to private equity, one of the most widely used institutional alternative asset classes. From Neuberger Berman, the NB AMT Absolute Return Multi-Manager Portfolio allocates to multiple subadvisers that employ a variety of investment strategies, including Equity Long/Short, Credit Long/Short and Event Driven strategies including Merger (Risk) Arbitrage. BlackRock iShares Alternative Strategies V.I. Fund is a fund of funds, investing primarily in a portfolio of underlying ETFs that track indices that consist of alternative asset classes.
Other additions to the lineup include BlackRock iShares Dynamic Fixed Income V.I. Fund, a fund of funds investing primarily in a portfolio of underlying ETFs that seek to track fixed income indices, as well as a share class exchange for Northern Light’s 7 Twelve Balanced Portfolio, to reflect a lower expense ratio.
Since the 2008 financial crisis, liquid alternatives are the fastest growing fund category, with a CAGR of roughly 40%, compared to 13% for the hedge fund industry and 9% for the U.S. mutual fund industry.5
Nearly two-thirds (64%) of RIAs and fee-based advisors have increased their use of alternative investments over the past five years, and 55% see their allocation to alternatives continuing to increase further over the next 5 years. More than three-fourths (76%) said they would consider further increasing their use of alternatives if they could access them in a low-cost tax-deferred vehicle.6
While many liquid alternatives may have high turnover, producing short-term capital gains that can erode performance, Jefferson National’s Monument Advisor is a tax-advantaged investing platform that can improve performance potential of tax-inefficient strategies by 100 to 200 bps—without increasing risk.7 Jefferson National features liquid alternatives from market leaders like PIMCO, Rydex and Invesco, as well as boutique managers like the Merger Fund, Tortoise and Probabilities Funds. In 2014, Jefferson National launched the proprietary suite8 of three new JNF SSgA sub-advised portfolios featuring tactically managed Volatility DefenseSM as well as the multi-strategy, multi-manager JNF Dynasty Liquid Alternatives Portfolio.
1Mogel, Gary S. (2005, June 6), Flat-fee variable annuity makes its debut. Investment News. Retrieved from http://www.investmentnews.com/article/20050606/SUB/506060708 2Jefferson National’s Monument Advisor has a $20 monthly flat insurance fee. Additional low-cost fund platform fees ranging from .10% - .35% will be assessed for investors wishing to purchase shares of low-cost funds. See the prospectus for details. Certain low-cost funds may only be available to you if you retain certain investment advisors. 3Morningstar Data as of 04/30/15. 4Morningstar Data as of 04/30/15. 512th Annual Alternative Investment Survey, Deutsch Bank, 2013. 6Investment Solutions Survey, Jefferson National, October 2013. 7The Tax-Efficient Frontier: Improving the Efficient Frontier with the Power of Tax Deferral, by David Lau, published by Jefferson National, June 2010. 8Volatility Defense is designed to dynamically adjust exposures to maintain a desired target portfolio risk. Based upon a volatility forecast, exposure to certain assets may be higher in periods of low predicted volatility and lower in periods of high predicted volatility.
Alternative Investing Risk. The value of securities selected using the sub-adviser’s liquid alternative approach can react differently to issuer, political, market, and economic developments than the market as a whole or securities selected using only fundamental or traditional methods of analysis. The factors used in the sub-adviser’s analysis and the weight placed on those factors may not be predictive of a security’s value. In addition, factors that affect a security’s value can change over time and these changes may not be reflected in the liquid alternative investment approach.