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RBP Process: Glossary


The revenue growth necessary to support the current stock price according to the RBP Methodology. Required Business Performance® is used as a benchmark against which to measure management’s ability to perform in the future. It is calculated using a reverse discounted cash flow valuation model that uses the current stock price as the primary input.

RBP® Probability
The likelihood that management will deliver the Required Business Performance® to support the stock price. It is calculated by fitting the company’s historical revenue growth to a distribution, then finding the company’s Required Business Performance within this historical distribution. 

In the hypothetical example below, the company’s RBP® Probability, represented by green, is 35% while its Behavioral Risk Indicator, represented by red, is 65%.

Behavioral Risk Indicator
The likelihood that investors’ systematic behavioral biases have caused misalignment between the stock price and management’s ability to deliver. The Behavioral Risk Indicator is designed to capture the impact that human psychology has on the subjective valuation process used by investors. It is defined as one minus the RBP® Probability.

In the hypothetical example below, the company’s RBP® Probability, represented by green, is 35% while its Behavioral Risk Indicator, represented by red, is 65%.

RBP® Methodology
A system of fundamental stock analysis that uses a reverse discounted cash flow valuation model to determine what the stock’s current price implies in terms of future free cash flow and revenue (Required Business Performance® ) as well as the calculation of the likelihood that management can deliver the Required Business Performance® , known as RBP® Probability.



RBP Funds

  1. Guggenheim Directional Allocation Fund
  2. Guggenheim RBP Dividend Fund
  3. Guggenheim RBP Large-Cap Defensive Fund
  4. Guggenheim RBP Large-Cap Market Fund
  5. Guggenheim RBP Large-Cap Value Fund

RBP® Probability cannot guarantee nor does it predict profit, performance or future stock prices. There is no assurance the RBP® methodology will successfully identify companies that will achieve their RBP® or outperform the performance of other indices.

These funds may not be suitable for all investors. Stock markets can be volatile. Investments in securities of small and medium capitalization companies may involve greater risk of loss and more abrupt fluctuations in market price than investments in larger companies. Unlike many investment companies, the funds are not “actively managed.” Therefore, the funds would not sell an equity security because the security’s issuer was in financial trouble unless that security is removed from its corresponding index. In addition, the funds' return may not match or achieve a high degree of correlation with the return of the index for a number of reasons. The indices are quantitative strategy indices, meaning that each fund invests in securities comprising an index created by a proprietary model. The success of each fund's principal investment strategy depends on the effectiveness of the model in screening securities for inclusion in its corresponding index. The factors used in the quantitative analysis and the weight placed on these factors may not be predictive of a security’s value. As a result, the funds' may have a lower return than if they were managed using a fundamental investment strategy or an index based strategy that did not incorporate quantitative analysis. A fund could become more volatile if its corresponding index concentrates on a particular sector. Please read the prospectus for more detailed information regarding these and other risks.

Transparent Value LLC, an affiliate of Guggenheim Partners, LLC, serves as the index provider for the indices utilizing the RBP Process.

TV LLC is not part of Guggenheim Investments.

Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.

Investing involves risk, including the possible loss of principal.

Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC ("Guggenheim"), which includes Security Investors, LLC ("SI"), Guggenheim Funds Investment Advisors, LLC, ("GFIA") and Guggenheim Partners Investment Management ("GPIM") the investment advisers to the referenced funds. Securities offered through Guggenheim Funds Distributors, LLC, an affiliate of Guggenheim, SI, GFIA and GPIM.

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