BNP Paribas Global H-Factor® Index added to Nationwide’s fixed indexed annuity product
The index brings an actuarial approach to balancing risk and growth potential
Columbus, OH —Nationwide announced today the addition of the BNP Paribas (BNPP) Global H-Factor® Index to the Nationwide Peak® 10 fixed indexed annuity (FIA). The index offers a probability-based approach to investing by identifying and removing potentially overpriced stocks likely to lose value due to human behavior, resulting in a portfolio made up of equities more likely to deliver growth. This makes the index from BNP Paribas, a premier global bank, uniquely positioned to fit the emerging needs of financial professionals and their clients in today’s challenging economic environment.
“As retirement nears, it can be difficult for investors to balance their desire for additional growth with the need for protection from negative market performance,” said Eric Henderson, president of Nationwide Annuity. “The new BNPP Global H-Factor index is an effective solution to help mitigate risk while still providing growth potential, especially for those clients nearing retirement at a time in their financial lifecycle when losses can be hard to recoup.”
Using an innovative methodology developed by asset management company New Age Alpha, the BNPP Global H-Factor Index identifies overpriced stocks due to the H-Factor, or Human Factor. The H-Factor is a risk that comes from investors interpreting vague or ambiguous information about a company in an incorrect way, which can lead to overpricing and may make it difficult for a company to deliver the growth implied by the current stock price.
To counter this, the BNPP Global H-Factor Index evaluates more than 4,000 equities once a quarter using the last 12 quarters of financial data and the current stock price to determine how likely it is that the implied growth rate can be achieved. Those equities with high H-Factors (companies with a higher probability of failing to deliver implied growth) are removed, leaving the best 225 from the original list of 4,000. The remaining 225 equities are then weighted so that the best potential performing stocks have greater impact.
“Investors in indexed annuities are seeking a more innovative approach to global equity exposure,” said Ryan Cullen, Head of Insurance Solutions Sales at BNP Paribas. “Our team is excited to be working with New Age Alpha to deliver a differentiated index strategy to Nationwide.”
Julian Koski, New Age Alpha co-founder and chief investment officer, added, “We’re thrilled to partner with BNPP and Nationwide to incorporate our probability-based rules into investment portfolios, systematically avoiding the H-Factor, or human behavior risk.”
The BNPP Global H-Factor Index is joining four other indexes available within the Nationwide Peak 10 FIA, which launched in January 2021. Peak 10 is one of the latest additions to Nationwide’s diverse product lineup, and its first annuity in partnership with AmeriLife, a national leader in developing and distributing annuities and retirement planning solutions.
“When the Nationwide Peak 10 fixed indexed annuity was first introduced, we were thrilled to offer this unique financial solution to clients,” said Pat Fleming, executive vice president and corporate actuary of AmeriLife. “As the exclusive distributor of Peak 10, AmeriLife couldn’t be more excited with the addition of the BNPP Global H-Factor index, which will deliver even greater flexibility and diversity of choice to clients through this industry-leading offering.”
About BNP Paribas
BNP Paribas is the European Union’s leading bank and key player in international banking. It operates in 65 countries and has nearly 190,000 employees, including nearly 145,000 in Europe. The Group has key positions in its three main fields of activity: Commercial, Personal Banking & Services for the Group’s commercial & personal banking and several specialized businesses including BNP Paribas Personal Finance and Arval ; Investment & Protection Services for savings, investment and protection solutions ; and Corporate & Institutional Banking, focused on corporate and institutional clients. Based on its strong diversified and integrated model, the Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realize their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, BNP Paribas has four domestic markets: Belgium, France, Italy and Luxembourg. The Group is rolling out its integrated commercial & personal banking model across several Mediterranean countries, Turkey, Eastern Europe as well as via a large network in the western part of the United States. As a key player in international banking, the Group has leading platforms and business lines in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.
BNP Paribas has implemented a Corporate Social Responsibility approach in all its activities, enabling it to contribute to the construction of a sustainable future, while ensuring the Group's performance and stability.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities, mutual funds and ETFs; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.
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About New Age Alpha
New Age Alpha is an asset management company that provides the global investment community with ETFs, indexes, SMAs, data and tools. New Age Alpha’s portfolio solutions follow our proprietary methodology, which is the process of using a probability, the Human Factor, to avoid the losers. Combining the alpha potential of active management with the advantages of rules-based investing, we provide investors with portfolio solutions that seek to deliver alpha across all asset classes and geographies. Founded in 2018, by industry veterans Julian Koski and Armen Arus, New Age Alpha is headquartered in Rye, NY and has offices in South Africa.
Prior to founding New Age Alpha, Koski and Arus co-founded Transparent Value, which was successfully sold to Guggenheim Partners in 2009. At Transparent Value, Armen and Julian invented the Required Business Performance (RBP), the investment process that formed the foundation of the firm.