Jefferson Adds Alternative Investment Options

The Country Rotation Portfolio and Sector Rotation Portfolio from Innealta Capital have been added to Jefferson National’s offerings.

Innealta is a quantitative asset management firm specializing in the active management of exchange-traded fund (ETF) portfolios. Jefferson National is also offering funds with specialized risk management and hedging strategies: AllianceBernstein Dynamic Asset Allocation Portfolio, Lazard Retirement Multi-Asset Targeted Volatility Portfolio and the recently launched PIMCO Global Diversified Allocation Portfolio.

Other additions are a managed futures strategy from the Mariner Hyman Beck Portfolio, and the Vice Fund. With these new investment options, Jefferson National’s flat-fee variable annuity offers more than 70 liquid alternatives, including many strategies favored by hedge funds and institutional investors.

The firm has continued adding alternative strategies to help advisers manage volatility while improving tax efficiency, according to Laurence Greenberg, president of Jefferson National. “As the threat of the fiscal cliff looms large and taxes are poised to rise, these needs become even more urgent,” Greenberg said. “Combining the industry’s most alternative strategies with the power of tax deferral, Jefferson National helps RIAs counter these challenging dynamics.”

Jefferson National’s research indicates that tax efficiency is vital to RIAs and fee-based advisers facing plunging markets and rising taxes. This month, the market staged the biggest drop in nearly a year and all indexes were down more than 2%—the worst post-election sell-off since 1948—as investors feared the long-term gridlock posed by the expiration of tax cuts on December 31.


If no solution is reached by year-end, taxes will escalate by $500 billion, or an average of nearly $3,500 per household, according to the nonpartisan Tax Policy Center. The same study says the top 1% of households would see after-tax income drop by an average of 10.5%.

Greater allocation to alternatives is a growing trend, according to the firm’s research. More than 68% of advisers have increased their use of alternative investments, and more than 61% believe that alternatives will become even more important than traditional investments in the future.Data from Cerulli Associates indicates that in five years the use of alternative strategy funds could increase more than 245%.

“As the rest of the competition moves to re-price and re-tool in an ongoing features and benefits battle—or retreat from the industry entirely—Jefferson National will continue building momentum with unique alternatives in a tax-deferred investing solution tailored to meet the needs of RIAs and fee-based advisers,” Greenberg said.

Jefferson National provides tax-deferred investing solutions for RIAs and fee-based advisers.

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