Welcome to American Equity Investment Life Holding Company's First Quarter 2018 Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Julie LaFollette, Director of Investor Relations.
Julie L. LaFollette
Good morning, and welcome to American Equity Investment Life Holding Company's conference call to discuss first quarter 2018 earnings. Our earnings release and financial supplement can be found on our website at www.american-equity.com. Non-GAAP financial measures discussed on today's call and reconciliations of non-GAAP financial measures to the most comparable GAAP measures can be found in those documents. Presenting on today's call are: John Matovina, Chief Executive Officer; Ted Johnson, Chief Financial Officer; and Ron Grensteiner, President of American Equity Life Insurance Company.
Some of the comments made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. There are a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Factors that could cause the actual results to differ materially are discussed in detail in our most recent filings with the SEC. An audio replay will be made available on our website shortly after today's call.
It is now my pleasure to introduce John Matovina.
John Michael Matovina
Thank you, Julie. Good morning, everyone, and thank you for joining us this morning. We started 2018 with solid first quarter results. Our non-GAAP operating income for the quarter was $78 million or $0.85 a share. That was 4% more than the fourth quarter non-GAAP operating income as the benefit from the lower statutory federal income tax rate in 2018 was partially mitigated by a lower investment spread, which was primarily attributable to non-trendable items. As a reminder, the three key metrics that drive our financial performance are growing invested assets and policyholder funds under management, generating a high level of operating earnings on the growing asset base through investment spread, and then, minimizing impairment losses in our investment portfolio.
For the first quarter of 2018, we had 1.5% sequential growth, and just under 7% trailing 12-month growth in policyholder funds under management. On a trailing 12-months basis, we generated a 13.5% non-GAAP operating return on average equity. That measure excludes the impact of the actuarial assumptions reviews, and the losses on extinguishment of debt in a couple of the 2017 periods. And our investment impairment losses, after the effects of deferred acquisition costs and income taxes were just 0.03% of average equity.
The growth in policyholder funds under management for the quarter was driven by $1 billion of gross sales. That's a 2% sequential increase. More importantly, fixed indexed annuity premiums were up 5% sequentially in the first quarter. As we noted on our fourth quarter call, sales momentum has been picking up. We introduced several versions of a new index product to our independent agents in March, which has been well received and should help us sustain sales momentum in the second quarter. You'll hear more about the sales environment and competition