SHORT INTERESTS: TIPS, TRENDS, OBSERVATIONS

Annuities hit Roth wall Variable-annuity sales through banks appear to be flattening, perhaps falling victim to the bad…

Annuities hit Roth wall

Variable-annuity sales through banks appear to be flattening, perhaps falling victim to the bad press they got after last year’s capital-gains tax cut, says bank-industry consultant Kenneth Kehrer.

Variable-annuity wholesalers report that bank-affiliated brokers who had been big sellers of variable annuities focused more on Roth Individual Retirement Accounts in the first quarter, Mr. Kehrer says.

About $2.5 billion in variable annuities were sold through banks in the first three months, according to Mr. Kehrer’s quarterly survey of insurers. That’s a little more than the previous quarter’s $2.4 billion and about even with the quarter before that.

Still, it was up 19% from the $2.1 billion in the first quarter of 1997.

Double vision on euro

When it comes to the euro, American and European bond managers don’t see eye to eye.

A survey of 153 fixed-income managers in the U.S. and Europe on a single European currency shows that 85% of European bond fund managers anticipate changes in their holdings of European non-sovereign bonds, while 57% of U.S. managers expect such changes. The currency union takes effect Jan. 1.

The survey was commissioned by France’s Banque Paribas and conducted between Feb. 24 and April 23 by Yankelovich Partners Inc. In general, managers expect to see substantial increases in both European corporate and bank paper and high-yield bonds.

“The disappearance of currency returns, coupled with the current low-yield environment, are profoundly affecting asset allocation decisions and investment strategies,” says Alec de Lezardiere, global head of fixed income at Paribas.

Only 31% of U.S. managers believe their performance bogey will change as a result of the creation of the euro, compared to 57% of bond portfolio managers in Europe; 87% of those who plan to make changes to their index say they will do so before, or soon after, January 1999.

Be your own money shrink

Ever wonder why people make the financial decisions they make? Dr. Kathleen Gurney, author, psychologist and founder of Financial Psychology Corp., believes that everyone has a definite money personality and understanding it can determine investment success.

Visitors to the Mutual Fund Education Alliance’s web site at www.mfea.com can learn their money personality by taking a quiz, called Moneymax Profile. It identifies nine personal financial traits determined by Ms. Gurney. Test takers receive a personalized Moneymax Group Report, to show them how they react emotionally to money and how their reactions affect their financial success — or lack thereof.