Each variable annuity contract offers a number of separate account funds.
Each of those funds owns a collection of individual investments chosen by a professional manager who is striving to achieve a particular objective, such as long-term growth or regular income.
You allocate your variable annuity premiums among different separate account funds offered in your contract to create a diversified portfolio of funds, sometimes called investment portfolios or subaccounts.
If you're comparing different contracts to decide which to purchase, among the factors to consider are the variety of funds each contract offers, the past performance of those funds, the experience of the professional manager, and the fees.
In evaluating the past performance and other details of the funds a contract offers, or the funds you are using in the contract you selected, you can use the prospectus the annuity company provides for each separate account fund. You may be able to find independent research on the funds from firms such as Morningstar, Inc., Standard & Poor's, and Lipper.
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- American Association of Individual Investors (AAII), Investment objective, Lifecycle fund, Portfolio turnover, prospectus, Subaccount, White knight
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