Bloomberg launches VolMax indices for equity potential

Bloomberg Indices has announced the introduction of the Bloomberg VolMax Indices, which aim to boost equity upside potential while controlling risks during market volatility.

The Bloomberg VolMax Indices offer an approach combining risk control and leveraged strategies to adapt to differing market conditions. These indices are based on the Bloomberg US Equity Indices and incorporate a target volatility threshold, capable of modulating equity exposure through leverage up to 500%.

While leveraging may increase potential returns under favourable conditions, it also entails greater risk during downturns. To account for these investment costs, a daily pro-rated annual deduction factor is applied, ensuring performance accuracy.

The available indices include the Bloomberg US Large Cap VolMax Index (BMAXUS), Bloomberg US Small Cap VolMax Index (BMAXSML), and Bloomberg US Tech VolMax Index (BMAXTEQ). By employing a dynamic, rules-based methodology, these indices adjust exposure to achieve a 40% volatility target.

The development of this methodology was a collaborative effort between Bloomberg Indices and RBC Capital Markets, aimed at enhancing trading and hedging functionalities. RBC will make structured solutions available, enabling investors access to defined outcome opportunities such as improved yield or growth.

Dave Gedeon, Chief Executive Officer of Bloomberg Index Services Limited, stated, "Indexing continues to drive innovation and, more importantly, is helping enable broader access to new investment solutions. We're proud to deliver the Bloomberg VolMax Indices through our collaboration with RBC Capital Markets and by leaning on RBC's hedging and pricing optimization capabilities, provide these rules-based leveraged strategies through the index wrapper."

The Bloomberg Multi-Asset Indices offer global, cross-asset benchmarks and include a combination of indices spanning fixed-income and equity sectors. These multi-asset indices are part of Bloomberg's suite of benchmarking solutions which aim to provide comprehensive measures of market performance.

Bloomberg's commitment to independent and transparent indexing ensures that its clients internationally can access reliable data tailored to evolving market needs. Access to the newly launched indices is available via the Bloomberg Terminal.

Bloomberg's index team has a track record in creating indices across asset classes, including their flagship fixed income, commodity and equity indices. Bloomberg Index Services Limited (BISL) takes an innovative approach to delivering strategic benchmarks that help market participants address their evolving investment needs.

The indices, which are integrated with other Bloomberg solutions, draw on a comprehensive range of trusted data and reliable technology for calculations, analytics and workflow automation, along with distribution capabilities that can help amplify the visibility of our customers' products.