Thoughtful design built on the Fundamental Index™ approach
Efficiently reduces equity risk
Low-volatility strategies have been shown to reduce equity volatility by approximately 20% relative to the broad market. The FTSE RAFI Low Volatility Index series utilizes a measure of a stock's systematic risk to select securities, ensuring an efficient reduction of overall equity risk.
Avoids overpriced low-volatility stocks
Investing in low-volatility stocks trading at high valuation multiples erodes the return benefit of low-volatility strategies. The FTSE RAFI Low Volatility Index employs a valuation screen to avoid investing in extremely expensive stocks.
Builds on the RAFI Fundamental Index approach
In selecting and weighting low-volatility securities by fundamental measures of company size, the FTSE RAFI Low Volatility Index series retains all the benefits of the Fundamental Index approach: potential for outperformance, ease of implementation, low cost, and broad diversification.