(Operator Instructions) Our first question comes from the line of Pablo Singzon from JPMorgan. Your line is open.
Thank you, good morning. I just want to get more information on the size of the point-to-point block where caps are being reduced. If you could just give numbers and how big that in terms of AUM? And how much you expect the cost of money on the block to go down as you reduce the caps?
Ted Morris Johnson
So, the blocks that we've already made adjustments to that have started is approximately $3.7 billion, and there's an additional $7.6 billion that we will be making adjustments on later this quarter. And so, the total as of it stands today is $11.4 billion, and the overall effect on cost of money that would flow through over the next 12 months to 15 months is approximately 6 basis points.
Okay. My next question is somewhat related. Can you please clarify how volatility effects option costs for you? I know you have some hedging strategies that become more expensive in higher vol, and others that move another way. So, just given your current mix, will higher vol be more of a headwind or a tailwind for the cost of money?
John Michael Matovina
Boy, that takes a while to answer. I don't know the final answer. I'll give you -- the moving parts are higher vol should drive down option costs on this monthly point-to-point strategy. I think it's about 30% of the overall portfolio. So that's kind of the natural offset to higher volatility. Higher volatility then, is going to increase option costs for the remainder of the equity-based portfolio, but when you have a lot of caps sitting down in the low twos and threes, like we have, the impact is not going to be that great. Where the biggest impact will be is on participation rate strategies, which are very prevalent in the Eagle Life products, and then in the American Equity Choice product. So there, higher volatility, as I say, has a much bigger impact, and let's say can cause you to take 10%, 15% out of the participation rate for some, say, a 1% increase in the full option.
Okay. And my last question is just about capital and your investment strategy. So, in general, how are you thinking about capital requirements, given your updated investment strategy? Do you think you will need to reduce asset leverage to be invested in riskier, less liquid securities? And what feedback have you received from rating agencies, if any, on this new strategy?
Ted Morris Johnson
In regards to the strategy on capital, so RBC, we ended the quarter at 3.83% (ph). So we feel really good about where our RBC ratios are at. And I've stated publicly before, we are going to be managing our RBC between 3.75% and 4.00% (ph). That's higher than what we have stated in the past, and that is partly directly related to changes in investment philosophy or investment strategy, and going into some other