Average investors hold their equity mutual funds slightly over three years, which significantly hinders their long-term performance. This study found that there is a statistically significant difference between the investor returns of index annuities and the investor returns of equity mutual funds for six distinct time periods starting from 1997-2011 and ending with 2002-2011. Additionally, the risk-adjusted investor returns of index annuities outperformed the risk-adjusted investor returns of equity mutual funds for the same time frame. The aforementioned outperformance was termed the "Index Annuity Investor Return Spread" (IAIRS) by the study. Investor return is often not reported nor written about in the financial press, as the media tends to focus on investment return which is defined as the geometric rate of return of a buy-and-hold investment over the long term. Conversely, investor return is defined as the long-term dollar-weighted rate of return or Internal Rate of Return (IRR) over time. The IRR factors in the timing and amount of cash flows into and out of the portfolio of the average investor.Index annuities, through their downside protection, upside potential and temporally controlled contractual obligation, often mitigate the risk of investors being affected by counterproductive, self-sabotaging investor behavior, thereby resulting in positive IAIRSs. The study is distinct from previously published index annuity studies that have compared investment returns (often formula-driven hypotheticals) of index annuities to market indices or investment returns of equity mutual funds. The implication of these findings regarding investor returns of index annuities and equity mutual funds is that individuals on a global scale now have information regarding the ability of index annuities to be a valuable component in portfolio construction and diversification.