International investors that purchased US dollar denominated products in recent years likely added meaningful positive currency related returns to the product’s performance. This is due to the fact that the US dollar had substantial gains over most global currencies during the last 5 and 10 year periods.
For instance, the Wall Street Journal’s Index of 16 global currencies compared to the US dollar shows a 14% gain for a 10 year period and a 10% gain for a 5 year period. Any currency gains during these periods would be in addition to the gains in a fixed return product. These potential additional returns and the security of the US dollar are another advantage of investing in a fixed annuity, which also provides purchasers the protections of a trust structure, access to their money with free withdrawals and insurance benefits like an enhanced death benefit and annuitization options.
For more information on select currencies’ performance to the US dollar for the 5 and 10 year periods, see the chart below:
10 YR % 5 YR %
Japan Yen 13% 27%
British Pound 25% 0%
Brazilian Real 25% 74%
Mexican Peso 41% 23%
Euro 19% 23%
WSJ USD Index 14% 10%
Disclaimer: Knighthead Annuity is not a registered investment advisor. This information is provided as background only. Please consultant your financial, legal or tax advisor before making an investment decision. Although we believe the information contained herein to be accurate and complete, we make no representation or warranty. Past performance is not predictive of future results.