Insurers Warming Up To ETFs in Fixed Income and Alternatives Space

Insurers Warming Up To ETFs in Fixed Income and Alternatives Space

A recent article on ETF.com indicates that insurance companies are beginning to consider ETFs, especially for their fixed income allocations, which typically can make up a large portion of an insurer’s investment portfolio in their general account. Fixed income ETFs offer some advantages over individual bonds, primarily liquidity and lower spreads. ETFs also helps insurance companies reduce the number of holdings in their portfolio while replicating their existing bond portfolios.   One reason for the trend is a change in designation for fixed income ETFs which lowers the capital charges.

In December, New York Life purchased Index IQ, sponsor of the IQ Hedge Multi-Strategy Tracker ETF, which offers hedge fund strategies for lower cost than privately placed hedge funds.

A copy of the entire article can be read at ETF.com.