Market outlook: Managing for growth & stability in a volatile economy

I typically provide a look at the economy and markets in this column, but for this issue, I have the pleasure of writing about Thrivent’s financial performance in 2022.

At Thrivent, we help our clients make the most of all God has given them. We often talk about this in terms of the advice and tools we provide to ensure you can achieve financial clarity, leading to lives full of meaning and gratitude. We carry this same philosophy through our financial stewardship of the resources you entrust to us. Thrivent doesn’t have stockholders; we are accountable to you, our owners. We treasure the trust you put in us to be there when you need us most, whether tomorrow or decades down the road.

Thrivent remains strong and stable.

2022 surplus & assets under management/advisement.

Total adjusted surplus*

Assets under management*

I’m pleased to report that Thrivent remains financially strong and stable, despite 2022 being a historically tough year for the economy and the markets. Thanks to the diligent management of our investments team, we were well-positioned for the rising interest rate environment and fared far better than the overall market loss of 20% (as measured by the S&P 500*).

Thrivent’s adjusted surplus grew to $16.6 billion in 2022, which is the highest in our organization’s history. We rely on these funds to fulfill the contractual promises we make to our clients, as well as to manage the business, make strategic investments seeking growth, and drive value for our clients through disciplined capital management. Assets under management and advisement (AUM/AUA) ended the year at $162 billion.*

Thrivent received strong credit ratings in 2022 from three independent agencies: AM Best, Moody's Investors Service and S&P Global Ratings.¹ These agencies provide an unbiased thorough review of our financial strength, including our capital position, balance sheet, business strategy and risk management philosophy, and we are proud to maintain strong ratings.

We’re proud to increase dividends and credited rate enhancements to $400 million for 2023.

As we look ahead to 2023, we are committed to continuing our legacy of financial stewardship on behalf of our clients.

2022 at a glance

Thrivent received strong financial ratings from independent agencies.

AM Best

Highest of 13 rating categories.¹ June 2022

Moody’s Investors Service

Third highest of the agency's 21 rating categories.¹ April 2022

S&P Global Ratings

Second highest of the agency's 20 rating categories.¹ April 2022

When it comes to our outlook on the markets, we’re paying close attention to numerous economic factors, with inflation top of mind. The Federal Reserve (Fed) has been raising interest rates in an effort to control very high inflation, and some recent reports show inflation is beginning to respond accordingly. Inflation widened the gap between the growth in wages and the increasing cost of living, so I hope that Americans soon will experience a reprieve from higher prices.

We still may have a recession, though the probability of a soft landing likely has increased. Employment numbers have remained high (although with weaker productivity), so if we were to experience a recession, it might not involve the level of unemployment seen in prior recessions.

Markets typically reach bottom around midway through a recession, so now may be a good time to consider adding equity investments to your portfolio. It’s likely interest rates have peaked, so also consider adding some longer maturity fixed-income assets and moving some money out of money market funds or other short-term investments.

Much like 2022, we expect continued volatility in 2023 as the economy and markets continue to adjust to the ripple effects of the pandemic and geopolitical disruption. Your financial advisor can be a great resource to help you keep your long-term goals in mind as you adjust your investment portfolio. If you haven’t already, set up some time to meet soon so you can be prepared for the future.

Thank you for being part of our incredible organization. It’s an honor to partner with you on your financial journey.

At Thrivent, we strive to offer tools and solutions that are competitive and meet the needs of our clients.

Last year, investors turned to investment solutions from Thrivent Mutual Funds to help them reach their financial goals. In 2022, Thrivent Mutual Funds saw a record amount of money flow into our investment solutions, which is referred to as net inflows in the industry. On a relative basis, net inflows were up 0.8% compared to assets under management at the beginning of the year. This was favorable to other firms of our size, whose median as a peer group saw net outflows of -8.9%.

Thrivent Mutual Funds was one of only six firms out of a peer group of 59 firms with positive flows in 2022, which puts us at the 10th percentile—an all-time annual high for our firm. Stepping back a little further, our net flows also compared favorably to the largest firms in the industry.

“We strive to manage our funds in a way that makes them attractive to people who are looking for consistent performance in a sometimes volatile environment,” says Royal. “2022 was certainly a difficult year for both equities and fixed income, and we’re honored that people trusted us to manage more of their money last year through our investment funds.”