Not necessarily. Unless your variable annuity has some sort of feature that protects you against downside risk in the market, its value will increase and decrease along with the portfolio of holdings within the annuity itself. The guarantees against downside risk typically bear a high annual cost, and also often limit your upside potential. You’ll often give up the ability to capture the entirety of market gains in order to protect against market losses. In short, variable annuities bear not only market risk, but risk associated with the insurance company that issued the products, and are not automatically immune from dropping in value during a recession.