These new portfolios seek to provide Vanguard Variable Annuity clients with low-cost, broadly diversified international equity and fixed income exposure:

  • Total International Stock Market Index Portfolio provides long-term investors with a low-cost way to include developed and emerging markets international equity index exposure.
  • Global Bond Index Portfolio provides a cost-effective way to incorporate global fixed income exposure.

“The two new portfolios bring the investment options in the Vanguard Variable Annuity to 19 and provide investors with broadly diversified exposure to international investment strategies in a low-cost way,” said Vanguard Head of Annuity and Insurance Services, Danielle Corey.

Details about the new portfolios

Total International Stock Market Index Portfolio employs an investment approach that seeks to track the performance of the FTSE Global All Cap ex US Index, a float-adjusted market-capitalization-weighted index designed to measure the equity market performance of companies located in developed and emerging markets, excluding the United States.

Global Bond Index Portfolio is a fund of funds that invests according to an asset allocation strategy of approximately 70% of its assets in domestic fixed income securities and 30% of its assets in non-U.S. fixed income securities.

Total International Stock Market Index Portfolio and Global Bond Index Portfolio have estimated acquired fund fees and expenses of 0.11% and 0.14%, respectively.

About the Vanguard Variable Annuity

The Vanguard Variable Annuity average expense ratio is 0.52%—more than 70% lower than the annuity industry average of 2.26%.1 This difference can save clients an average of $1,730 a year in fees for every $100,000 invested.2

If you’re looking to replace your current annuity with a lower-cost option or you’re seeking an additional tax-advantaged way to save for retirement, call 800-600-4817 to speak to one of our licensed, noncommissioned annuity specialists.

1The Vanguard Variable Annuity has an average expense ratio of 0.52%, versus the annuity industry average of 2.26%—excludes fees for optional riders. Source: Morningstar, Inc., as of December 2016. Actual expense ratios for the Vanguard Variable Annuity range from 0.40% to 0.71%, depending on the investment allocation. The expense ratio includes an administrative fee of 0.10% and a mortality and expense risk fee of 0.19%. The expense ratio excludes additional fees that would apply if the Return of Premium death benefit rider or Secure Income (Guaranteed Lifetime Withdrawal Benefit) rider is elected. In addition, contracts with balances under $25,000 are subject to a $25 annual maintenance fee.

2The current annuity provider may charge a surrender fee for an early withdrawal. If so, clients should consider how this charge, as well as other features such as death benefits and riders, will affect their assets before they decide to transfer them.

Notes:

All investing is subject to risk, including the possible loss of the money you invest. Investments in bond funds are subject to interest rate, credit, and inflation risk. Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk. Stocks of companies based in emerging markets are subject to national and regional political and economic risks and to the risk of currency fluctuations. These risks are especially high in emerging markets.

This material was prepared for general distribution. It is being provided for informational purposes only and should not be viewed as an investment recommendation. If you need advice regarding your particular investment needs, contact a financial professional.

Variable annuities are long-term vehicles designed for retirement purposes and contain underlying investment portfolios that are subject to market fluctuation, investment risk, and possible loss of principal. If you take withdrawals from a variable annuity prior to age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.

For more information about Vanguard Variable Annuity products, visit vanguard.com or call 800-806-3769 to obtain fund and variable annuity contract prospectuses. Investment objectives, risks, charges, expenses, and other important information about the products are contained in the prospectus; read and consider it carefully before investing.

Before you decide to switch to another annuity, including the Vanguard Variable Annuity, you should consider all costs—such as annual maintenance fees, surrender charges, fees for optional riders and death benefits—and the financial strength of the insurance carrier.

The Vanguard Variable Annuity is a flexible-premium variable annuity issued by Transamerica Premier Life Insurance Company, Cedar Rapids, Iowa (NAIC No. 66281), and in New York State only, by Transamerica Financial Life Insurance Company, Harrison, New York (NAIC No. 70688). Form No. VVAP U 1101 (in Florida, Form No. VVAP U 1101 (FL), in Oregon, Form No. VVAP U 1101 (OR) (R), and in New York, VVA NY 0208(R13)), without agent representation. Policy and rider form numbers may vary by state and may not be available in all states. The Vanguard Group administers the Vanguard Variable Annuity for the issuer. Its variable annuity and investment costs rank among the lowest in the industry, according to Morningstar, Inc., December 2016. The Vanguard Group, Transamerica Premier Life Insurance Company, and Transamerica Financial Life Insurance Company do not provide tax advice. Investors are encouraged to consult a tax advisor for information on how annuity taxation applies to their individual situations.

This article may not be approved for use in Georgia, Mississippi, Oklahoma, or Oregon.

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