Nationwide Financial® enhances marketFLEX Dynamic Advantage Programsm
Additional portfolio options provide access to institutional investments and true diversification to help investors weather market volatility
COLUMBUS, Ohio— To help investors weather today’s changing market environment, Nationwide Financial Services, Inc. (NYSE: NFS), has announced enhancements to its Dynamic Advantage Program (DAP), an optional rider available with America’s marketFLEX Annuity.
“Clients are relying more than ever on their investment professional for optimal risk management and reward within their portfolios, particularly in ever-changing market conditions,” said Mark Phelan, senior vice president of Individual Investments at Nationwide Financial.
“The enhanced Dynamic Advantage Program provides individuals access to more sophisticated asset allocation methods that were previously available only to institutional investors to help mitigate risk in weak and flat markets,” said Phelan.
The goal of the program, according to Phelan, is to increase returns and lower risk through a unique combination of asset allocation disciplines using portfolios managed by Rydex Advisory Services, LLC.
America’s marketFLEX is a variable annuity that uses multiple asset allocation techniques to help investment professionals and their clients adjust investments to manage risk with flexibility and control. DAP is an optional feature available for an additional cost of 0.35% with America’s marketFLEX Annuity.
The DAP rider offers the following features to long-term investors seeking a more comprehensive approach to managing their variable annuity investments:
- Risk management in strong, weak and flat markets
- Alternative investments and strategies typically used by institutional investors
- Risk tolerance questionnaire to help select a model based on investment objective, time horizon and risk tolerance
- Oversight of investment portfolio models by Rydex Advisory Services
- Timely reporting of model changes 48 hours before they are executed
Key features and enhancements to the Dynamic Advantage Program include three portfolio management options – Focused Strategies, Diversified Solutions and Complete Portfolios – each with their own series of dynamically managed asset allocation strategies, including eight new investment models and three new Rydex variable trust funds.
Each of the DAP model investment portfolios is managed according to one of three asset allocation methods. Each method utilizes different combinations of asset classes and investment strategies.
For example, each Focused Strategies model utilizes one alternative investment strategy. Each Diversified Solutions model utilizes multiple types of alternative asset classes and investment strategies. Complete Portfolio models utilize various types of alternative asset classes and investment strategies, and also incorporate a more balanced asset allocation strategy that includes traditional asset classes.
DAP is based on Essential Portfolio TheorySM (EPT), an investment approach designed by Rydex to help investment professionals and investors understand the dynamic nature of modern markets and learn how to potentially increase portfolio diversification and manage risk.
EPT advocates expanding traditional stock/bond/cash asset allocation menus to include asset classes both positively and negatively correlated to the market, such as commodities, futures, real estate, hedge funds, leveraged, inverse or currency products, while providing individual investors with a framework for possibly improving performance based on concepts that historically have proven effective for institutional investors.
Phelan said DAP’s turnkey implementation simplifies the process for both clients and investment professionals.
“With three steps an investment professional can help their client implement an actively managed asset allocation program,” said Phelan.
To activate DAP, clients work with their investment professional to fill out an online questionnaire to determine the best asset allocation model based on investment objective, time horizon and risk tolerance. They then fill out an enrollment form and sign a client advisory agreement, granting Rydex Advisory Services authority to make changes to allocations. The final step allows clients to establish an online message center so they can be notified of model reallocations 48 hours before they’re executed.
Phelan said DAP also benefits investment professionals by offering a customized investment program for clients without the additional money management responsibilities.
“DAP allows investment professionals to focus on client relationships while turning over the day-to-day portfolio management duties to Rydex Advisory Services,” he said.
Annuities are long-term, tax-deferred investments designed for retirement and will fluctuate in value. They also allow customers to create a fixed or variable stream of income through a process called annuitization. It also provides a variable rate of return based on the performance of the underlying investments.
But, as with most things in life, annuities do have limitations. If a contract holder decides to take money out early, he or she may face surrender charges. Plus, if a person is not yet 59½, he or she may also have to pay an additional 10% income tax penalty on top of ordinary income taxes. A death benefit is available with most variable annuities. If an early withdrawal is taken, the death benefit and cash value will be reduced.
Annuities contain guarantees and protections that are subject to the claims-paying ability of the issuer. But, while these don’t apply to the actual performance of the variable accounts, they do offer a level of protection against investment loss.
Annuities are contracts bought from an insurance company and they are sold by prospectus. While it may take some time, these documents should be read. They describe risk factors, fees and charges that may apply to the contract holder. Please remember, variable annuities may have fees and charges including mortality and expense, administrative fees, contract fees and the expenses of the underlying investment options.
An investment based upon any of the asset allocation models should only be made after consulting with a financial advisor and with an understanding of the risks associated with any investment in securities, including, but not limited to, market risk, currency risk, political and credit risks, the risk of economic recession and the risk that issuers of securities or general stock market conditions may worsen over time. As with any investment, investment returns and principal value will fluctuate, so that when redeemed, an investment may be worth more or less than its original cost. Model portfolios and investments used in model portfolios are not guaranteed to achieve their objectives or investment strategies.
Variable products are sold by prospectus. Potential clients may obtain both the product prospectus and underlying fund prospectuses from their investment professional or by writing to Nationwide Life Insurance Company, P.O. Box 182150, Columbus, Ohio 43218-2150. Before investing, carefully consider the fund's investment objectives, risks, charges and expenses. The product prospectus and underlying fund prospectus contain this and other important information. Read the prospectus carefully before investing or sending money.
About Nationwide Financial®
Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers invest and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers.
It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. The group is led by Nationwide Mutual Insurance Company, which is ranked No. 99 on the Fortune 500 based on 2004 revenue.1 For more information, visit www.nationwide.com.
About Rydex Advisory Services, LLC Rydex Advisory Services, LLC (RAS), an affiliate of Rydex Investments, is a registered investment advisor that delivers a range of investment services. Through the Dynamic Advantage Program, RAS provides access to institutional-quality investment management techniques and methodologies. Rydex Investments continues to drive change in the financial industry by introducing investment products and services that challenge conventional thinking, empower investors and provide essential new options for uncertain market conditions. Rydex manages $14 billion in assets via more than 50
mutual funds, including nine exchange traded products. For more information, call 800.258.4332 or visit www.rydexinvestments.com.
America’s marketFLEX Annuity is issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member NASD.
In MI only: Nationwide Investment Svcs. Corporation.
Rydex Advisory Services, LLC, is the investment advisor for the Dynamic Advantage Program. Rydex Advisory Services is not a subsidiary of or affiliated with Nationwide Mutual Insurance Company.
The Dynamic Advantage ProgramSM (“DAP”) is an asset allocation service offered by Rydex Advisory Services, LLC, an SEC registered investment advisor, which serves as an investment advisor solely for the purpose of offering model portfolios available through DAP.
Rydex Advisory Services and Rydex Investments are not responsible for determining suitability for the Dynamic Advantage Program for any investor. Investors should ultimately rely on their own judgment or the judgment of their financial advisor in making suitability determinations.
Nationwide, the Nationwide Framemark and Nationwide Financial are federally registered service marks of Nationwide Mutual Insurance Company. America’s marketFLEX Annuity is a federally registered service mark of Nationwide Life Insurance Company. Dynamic Advantage Program and Essential Portfolio Theory are service marks held by Rydex Investments, an affiliate of Rydex Advisory Services, LLC.
© 2006, Nationwide Financial Services, Inc. All rights reserved.
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1 Fortune Magazine, April 2005
Investments Retirement Insurance www.nationwide.com One Nationwide Plaza Columbus, OH 43215-2220