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Independent Review of the Athene AI Powered US Equity Index

What will we cover in this Athene AI Powered US Equity Index review?

In this review, we will be going over the details regarding the new Athene AI Powered US Equity Index with IBM Watson (sponsored by HSBC) that is now being offered through Athene on its fixed indexed annuities, including:

  • How the AI index works
  • Realistic performance expectations
  • Charges and fees
  • Where it is best used
  • Where it is most poorly used

Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.

If you’ve been thinking about purchasing an indexed annuity because of the market-linked (and tax-deferred) growth that you can obtain without any worry about market-related losses, then an Athene annuity with the AI Powered US Equity Index could be a possible option for you.

That’s because according to Athene, the AI Powered US Equity Index – which is sponsored by HSBC – is “the first and only rules-based equity strategy to use IBM Watson to turn data into investment insight.”

Lately, given the roller coaster-like volatility of the stock market, many investors have turned to fixed indexed annuities as a means to keep principal safe, while at the same time having the opportunity to earn a higher return than “safe” alternatives like CDs and bonds.

But even though this is the case, before going out and making a long-term commitment to an Athene annuity (or to any annuity, for that matter), it is important to attain a good understanding of how fixed index annuities operate.

These particular annuity types have a fair amount of “moving parts” when it comes to calculating your return. So, if you don’t know what to anticipate, you could be sorely disappointed down the road when the annuity isn’t providing the benefits you hoped it would.

But first, a little about us – and why we can help you to narrow down the best annuity (if any) for you.

Annuity and Retirement Income Planning Information You Can Trust

If this is the first time you have been to our website, please allow us to personally welcome you here. Annuity Gator is a team of highly knowledgeable financial and annuity experts who are focused specifically on offering very in-depth and unbiased annuity reviews of annuities and other related financial tools. We have been doing this for quite some time – much longer than our competitors – and because of that, we’ve become a highly trusted source of annuity information online.

If you are researching annuities for the tax-deferred savings they allow, as well as for the reliable income stream that they provide, it is likely that you’ve run across a whole host of information and opinions about annuities on the Internet.

You might also have been “lured” into other various websites on the world wide web that state a variety of enticing claims such as “highest annuity payouts” or “lowest annuity fees.” Unfortunately, though, as nice as these features might sound, many of these websites are only hoping to get your contact information so that they can send you endless emails and hope that you buy an annuity from them or one of their affiliates.

If you are really interested in being educated about the AI Powered US Equity Index, though, the best way to do so is through an unbiased, objective expert…like us!

In fact, we dare say that we are the only place online where you can find the good, the bad, and yes, even the ugly details about annuities and their components. That’s not saying annuities are bad financial tools – because they’re not – but only if they are purchased for the right reasons. Otherwise, they could turn out to be an expensive mistake.

We feel that complete transparency we provide is the only way to make a truly well-informed decision about whether or not a particular annuity – or for that matter, any financial vehicle – will be a good fit for you.

That being said, this review is here to help you get a better understanding of all the “fine print” regarding the AI Powered US Equity Index that was developed by HSBC and is now being offered through Athene.

So, if you’re ready to get started, let’s jump right in!

The AI Powered US Equity Index at a Glance

ProductAI Powered US Equity Index (AiPEX)
IssuerHSBC and EquBot
Type of ProductMarket Index
S&P Rating (Athene)A
Phone Number(888) 266-8489
Websitehttps://athene.com

Opening Thoughts on the AI Powered U.S. Equity Index Offered through Athene FIAs

Athene Holding Ltd. and its subsidiaries issue, reinsure, and acquire retirement savings products that are designed for those who are seeking income funding mechanisms in retirement. The company was initially founded in 2009 – but, while it is still considered relatively new to the retirement income marketplace, it has definitely made a mark.

Over the past decade, Athene has grown for more than $144 billion in total assets. It offers both group and individual annuities, which consist of multi-year guarantee annuities (MYGAs), single premium immediate annuities (SPIAs), and fixed indexed annuities (FIAs).

The company recently added two new indices for its fixed indexed annuities. These include the Nasdaq FC / First Convergence Index – sponsored by Bank of America, and the AI Powered US Equity Index.

How Athene Describes the AI Powered US Equity Index Tool

According to Athene, the AI Powered US Equity Index (AiPEX), sponsored by HSBC, is the first and only rules-based equity strategy that uses IBM Watson for turning data into investment insight.

The AiPEX index continuously monitors the direct and indirect market data that is created every day in order to evaluate and score each of the 1,000 largest U.S. publicly-traded companies on a monthly basis.

The index, which is now being offered as a tracking option on Athene fixed index annuities, was developed by San Francisco-based EquBot, a company that uses proprietary algorithms and multiple artificial intelligence (AI) cognitive computing platforms.

The way this technology works is by using a multi-staged process that seeks to identify mispriced investments in the marketplace and to then optimize exposure, and then capitalize on the timing of those positions.

Once the AI technology has identified stocks that have prices poised for growth, it uses a three-step process for selecting shares in order to rebalance its portfolio each month. This, in turn, can help to reduce the impact of short-term market volatility.

According to Athene, “By bringing these two innovative index options to our fixed indexed annuity platform, Athene builds on its reputation as a leading provider of unique value-driven retirement solutions for the retail market.”

In addition, the CEO and President of Athene USA feels that technology-forward index designs are leading the next wave of innovation in fixed indexed annuities. But given that this particular technology is still relatively new, do you really want to subject a large portion of your retirement savings to a tool that has limited performance information?

For more information on the AI Powered US Equity Index offered through Athene’s fixed index annuities, go HERE.

Before we get into the gritty details, here are some legal disclosures we need to provide…

This is an independent product review, not a recommendation to buy or sell an annuity. Athene USA has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This review is meant to be an independent review at the request of readers so that they may see our perspective when breaking down the positives and negatives of this particular annuity. Prior to purchasing any type of investment or insurance product, it is important that you do your own due diligence and that you consult a properly licensed professional if you should have any specific questions that relate to your individual circumstances. All names, marks, and materials that were used for this review are the property of their respective owners.

For more details on how you can compare annuities so that you can determine which one may be right for you, click here to instantly download our free annuity report.

How an Insurance or Financial Advisor Might Explain this Index to an Investor

With people living longer these days, it is necessary to build up a nice sized nest egg in order to generate income when you leave the working world. One way to do that is through investing in various indexes that can help to match or even beat the overall market.

Plus, if the index (or indices) are associated with an annuity, the growth in the account can take place on a tax-deferred basis. This means that you won’t have to worry about paying tax on the gain until the time of withdrawal.

These types of annuities can also provide you with a lifetime income stream, and in turn, can help to alleviate the worry about running out of income in the future – regardless of how long you may need it.

But even using newer technology to narrow down investment opportunities, there is still some risk to be mindful of. There may also be various charges and fees, so you really have to be careful about weighing out all of the potential pros and cons.

With regard to the Artificially Intelligent (AI) Equity Index with IBM Watson – which is offered as an option with Athene fixed indexed annuities – approximately 250 companies with the highest combined Financial Health, Management, and News and Information Scores are selected for the portfolio.

These companies are then assigned portfolio weights, with the largest weights going to the companies that have the highest combined scores (subject to diversification and market liquidity limits).

Huh?

While there is definitely a method to the “madness” here with regard to how investments are chosen for the index, it is likely that many insurance and financial advisors will see their clients’ eyes glaze over if they explain all of the technical details…even though that is something you need to know before moving forward.

With that in mind, advisors will oftentimes go over the basics of how fixed index annuities work. For instance, these products provide the opportunity for a higher return than other fixed options, while also protecting your principal in the event of a market downturn.

In this particular case, the annualized index returns (as of December 31, 2019) aren’t too bad.

1 Year6.07%
3 Year6.80%
5 Year5.21%
10 Year6.52%
Return since inception5.68%
Volatility since inception5.75%

Source: Solactive, EquBot, HSBC, Bloomberg, from 4/30/2004 to 12/31/2019

But even so, there is no guarantee that you will continue to earn these same returns going forward. In addition, your actual return could be less – particularly if you need to access your funds during the annuity’s surrender period.

For instance, during the first several years of owning the annuity, if you withdraw more than 10% of the contract’s value, you can incur a surrender charge – and, if you do so before you have turned age 59 ½, you could also be hit with an additional 10% “early withdrawal” penalty from the IRS. So, once you have committed to this (or any) annuity, it needs to be considered a long-term endeavor.

To view the Fact Sheet for the AI Powered US Equity Index, go HERE.

The Annuity Gator’s End Take on the AI Powered US Equity Index with Athene FIAs

With advanced technology becoming much more prevalent today in most industries, using artificial intelligence could become a tried and true method of narrowing down profitable investments. But it could still take some time.

That being said, purchasing an Athene fixed indexed annuity with this as a tracking method could be a good option if you are seeking to:

  • Generate a higher return than a regular fixed annuity
  • Protect principal in a down market
  • Secure a stream of guaranteed income in retirement

But you may want to pass on this strategy of using an FIA if you:

  • May need the money for other obligations in the near future
  • Do not plan to use the annuity’s income feature

Summary

There is a long list of factors that need to be considered when you are planning for your future retirement income. And, when it comes to using annuities for growth, as well as for either your primary income stream, or even for filling in any retirement income “gaps,” it is essential that you know just exactly what you can anticipate. That’s because a different amount of income than you were planning on can make a big difference in your retirement lifestyle and on your life!

Because fixed indexed annuities – and their tracked indexes – can be somewhat confusing, the next best step is to discuss your options with an objective annuity specialist who will educate you about the pros and cons, and who can also compare several different options for reaching your objectives.

Do You Have Any Additional Questions? Did You Happen to Notice Any Mistakes in this Review?

We realize that this review may have run a bit long. But quite frankly, we would much rather that you have “too much” information on this product than to not have enough. So, if you found this information to be beneficial, please feel free to pass it on and to share it with other people who could also find value in it. (And, if you found it to be confusing, please also let us know that, too.)

In addition, we are aware that information regarding financial products can, and often does, change. So, if you happened to notice anything in this review that should be updated or revised, let us know and we will be happy to make the necessary edits.

Any other annuities or products that you would like to learn more about?

If so, just give us a shout and let us know, and our team will get to working on them right away.

Best,

The Annuity Gator

P.S. If you would like to read more of our Athene annuity reviews here are some links to check out:

Independent Review of the Athene AI Powered US Equity Index

 

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