Study showed variable annuity investors outpaced mutual fund investors with longer holding periods and higher returns

DALBAR’s 2025 study found that variable annuity investors earned higher average returns than equity mutual fund investors in 2024, supported by longer holding periods and a stronger commitment to staying invested. Variable annuity equity subaccount investors achieved an average return of 19.60%, compared with 16.54% for the average equity mutual fund investor, underscoring the impact of time in the market rather than attempts at market timing. Features such as optional income guarantees, professional management, and built-in diversification appear to help investors remain disciplined through volatility.

For advisors, these findings reinforce the importance of framing variable annuities as tools that can support long-term behavior rather than short-term performance chasing. They also provide a data-driven way to discuss equity exposure, compounding, and emotional decision-making with clients who may be prone to reactive trading or sitting on the sidelines during market stress.