S&P PRISM® Index
A New Opportunity for Stable Growth
A long-term strategy should recognize potential market changes and aim to provide steady growth in a variety of environments, including sudden corrections, rising interest rates and increasing inflation. An index designed for today’s markets should leverage a variety of strategies – such as diversification, positive momentum and risk control – with the aim to provide consistency.
Helpful resources
The S&P PRISM Index
Designed by S&P® Dow Jones® Indices
The S&P PRISM Index is a rules-based index designed for consistent growth through changing market environments.
- Over 125 years of experience constructing innovative and transparent solutions
- More than $16 trillion in assets indexed or benchmarked to the S&P 500
- More than 1 million indices covering a wide range of strategies
Source: S&P Dow Jones Indices LLC as of 12/31/23. This material is not a recommendation to buy, sell, hold, or roll over any asset, adopt a financial strategy or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition or particular needs of any specific person. Clients should work with their financial professional to discuss their specific situation.
Take a Broader View to Navigate Changing Markets
The S&P PRISM Index (PRISM) is designed to look beyond volatility, evaluate a variety of market indicators and strategically allocate for consistent performance potential.
Key Market Indicators
Momentum
Asset class trends tend to continue in the same direction
Market Bubbles
Analyze when equities and fixed income become overvalued
Recession
Identify and aim to stay ahead of potential recessions
Volatility
Avoid sudden large price swings that can drastically reduce future returns
PRISM applies this broad view to a diversified group of asset classes to identify positive performance in growing and shrinking markets.
Broad Diversification Can Generate Powerful Growth Opportunities
A diversified approach to asset selection can provide opportunities for growth through both traditional and alternative asset classes. PRISM’s diversified asset classes provide the flexibility to adapt to a variety of markets.
Diversified Asset Classes1
Equities
The S&P 500® Excess Return Index tracks the movement of the 500 largest publicly traded companies in the U.S., less a risk-free rate
Bonds
U.S. Treasuries are a widely tracked fixed income asset and often used as a benchmark for other interest rates
Commodities
Commodities such as oil, gold and corn provide additional growth opportunities beyond traditional equity and fixed income options
PRISM evaluates the asset classes daily across multiple dimensions. This approach is intended to provide the flexibility to adapt to changing markets.
Daily Rebalancing with the Goal of Capitalizing on Positive Momentum
PRISM uses a daily rebalancing process to strategically allocate across the asset classes – taking into account market indicators, risk, and current momentum – helping smooth volatility within the index.
Smoothing Volatility for Stable Growth
The innovative design of PRISM can be applied to historical markets to demonstrate how the index would have avoided large negative declines during bear markets and provided steady growth with low volatility.
Source: S&P Dow Jones Indices LLC from 8/16/90 to 12/31/24. The index performance shown is hypothetical and for illustrative purposes only and does not represent the performance of a specific product. The S&P PRISM Index was established on 2/12/18. Performance before this date is back-tested. Hypothetical performance is back-tested by applying the Index methodology to historical financial data when all components were available and was designed with the benefit of hindsight. Back-tested performance is hypothetical and has been provided for informational purposes only. Past performance is not a guarantee of any future performance.
The S&P PRISM Index is an excess return index which is designed to track an unfunded allocation in a basket of three component indices (the S&P 500, S&P US 10 Year Treasury Note Futures, and S&P GSCI). The Index does not allocate to any interest bearing cash rate allocations. Because of this, an excess return version of an index will have lower performance than a total return version of the same index would, especially in high interest rate environments.
The Benefit of Consistent Performance Potential Through Market Cycles
By leveraging a broader view of markets, including indicators of momentum, market bubbles, recessions and volatility, PRISM would have provided consistent growth through up and down markets.
Source: S&P Dow Jones Indices LLC from 1/1/05 to 12/31/24. Calendar year returns and compound annual growth rate for full period, the S&P PRISM Index was established on 2/12/18. Information before this date is back-tested by applying the Index methodology, which was designed with the benefit of hindsight, to historical financial data. Back-tested performance is retrospectively calculated, is not actual historical performance, and has been provided for informational purposes only. The index is a rules based strategy and is not actively managed. Live actual returns may differ from, and may be lower or higher than, the back-tested returns. Past performance is not an indication or guarantee of future performance. Please see the performance disclosure at https://us.spindices.com/regulatory-affairs-disclaimers/ for more information regarding the limitations of back-testing. See https://us.spindices.com/indices/strategy/sp-prism-index for additional information, including the Index methodology, which includes the manner and timing for rebalancing.
1 Equities are represented by the S&P 500® Excess Return Index, Bonds are represented by S&P 10-year U.S. Treasury Futures Excess Return Index and
Commodities are represented by the S&P GSCI Futures Excess Return Index.
2 Source: S&P Dow Jones Indices LLC. From 12/31/2012 – 12/31/2013. Dividends excluded (Price Index).
Sammons Financial® is the marketing name for Sammons® Financial Group, Inc.’s member companies, including North American Company for Life and Health Insurance®. Annuities and life insurance are issued by, and product guarantees are solely the responsibility of, North American Company for Life and Health Insurance.
The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.
While this material features the S&P PRISM Index, please keep in mind that other index options are available and this brochure should not be viewed as allocation advice.
The “S&P 500®” and “S&P PRISM (“the Indices”) are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and have been licensed for use by North American Company for Life and Health Insurance® (“the Company”). S&P®, S&P 500®, US 500, The 500, iBoxx®, iTraxx® and CDX® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). It is not possible to invest directly in an index. The Company’s Product is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices does not make any representation or warranty, express or implied, to the owners of the Company’s Product or any member of the public regarding the advisability of investing in securities generally or in the Company’s Product particularly or the ability of the Indices to track general market performance. Past performance of an index is not an indication or guarantee of future results. S&P Dow Jones Indices’ only relationship to the Company with respect to the Indices is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The Indices are determined, composed and calculated by S&P Dow Jones Indices without regard to the Company or the Company’s Product. S&P Dow Jones Indices has no obligation to take the needs of the Company or the owners of the Company’s Product into consideration in determining, composing or calculating the Indices. S&P Dow Jones Indices has no obligation or liability in connection with the administration, marketing or trading of the Company’s Product. There is no assurance that investment products based on the Indices will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment adviser, commodity trading advisory, commodity pool operator, broker dealer, fiduciary, “promoter” (as defined in the Investment Company Act of 1940, as amended), “expert” as enumerated within 15 U.S.C. § 77k(a) or tax advisor. Inclusion of a security, commodity, crypto currency or other asset within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, commodity, crypto currency or other asset, nor is it considered to be investment advice or commodity trading advice.
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