MERRILL LYNCH RPM INDEX
MODERN INDEX CONSTRUCTION SEEKING BROAD DIVERSIFICATION
The RPM Index is designed to leverage principles used by the largest financial institutions—including diversification, positive momentum and risk control — to help generate consistent returns in good and bad market environments. Diversification starts with a group of global asset classes across equities, fixed income and real assets:
- Domestic Equities
- International Equities
- Emerging Markets Equities
- Gold
- Real Estate
- Bonds
The RPM Index applies a rules-based approach to eliminate emotion, bias and the need to time the markets. The asset classes are rebalanced each month to reduce risk and correlation while leveraging positive short-term momentum. The result is an index that seeks to provide a broader level of diversification.
KEY
TERM
RISK — Rapid price changes up or down increase the risk of short-term losses. Each month, the RPM Index is designed to allocate more to asset classes exhibiting lower risk and less to asset classes exhibiting higher risk. Daily risk control is applied, which seeks to further reduce risk.
Frequently Asked Questions
What is the RPM Index?
It’s an index built around diversification, positive momentum, and risk control, using global asset classes including domestic and international equities, emerging markets, gold, real estate, and bonds.
How does it aim to reduce risk?
Asset classes are rebalanced each month, allocating more to lower-risk asset classes and less to higher-risk ones, with daily risk control applied to further manage volatility.
Why use a rules-based approach?
A rules-based approach is designed to remove emotion, bias, and the need to time the markets from investment decisions.
What asset classes are included?
Domestic equities, international equities, emerging markets equities, gold, real estate, and bonds.
Is this suitable for all investors?
Suitability depends on individual risk tolerance and financial goals — speak with Alpha K2 to review whether this fits your situation.
Where can I learn more?
Download the brochure or contact Alpha K2 to review full details before making any decision.