Rydex today unveiled six new equal weight (EW) ETFs, which are ETFs that weight investment holdings equally across either index constituents and/or market segments. A pioneer in the EW ETF space, the firm's flagship ETF, Rydex S&P Equal Weight ETF (RSP), was launched in 2003 and has grown to approximately
$2 billion in assets under management. The ETF line-up at Rydex, with the exception of CurrencyShares®, is known in the marketplace as RydexShares(SM), and includes nine sector ETFs.
The addition of these six new ETFs brings Rydex's total number of EW ETFs to 16 and total number of exchange traded products to 34, with assets over $6 billion, reflecting the firm's continued dedication to being a leader in EW investing.
The new ETFs, which began trading today on the NYSE Arca, are:
- Rydex Russell 1000® Equal Weight ETF (EWRI)
- Rydex Russell 2000® Equal Weight ETF (EWRS)
- Rydex Russell Midcap Equal Weight ETF (EWRM)
- Rydex MSCI EAFE Equal Weight ETF (EWEF)
- Rydex MSCI Emerging Markets Equal Weight ETF (EWEM)
In addition, the Rydex MSCI All Country World (ACWI) Equal Weight ETF (EWAC) is estimated to begin trading on January 12, 2011.
RSP has demonstrated how an EW strategy can deliver strong investment results relative to a cap weighted strategy. Since inception on April 24, 2003, the ETF has delivered an annualized 8.63% versus 5.15% for the S&P 500 Total Return Index as of September 30, 2010.
For the 1 and 5 year periods ended September 30, 2010, RSP ranked 73 out of 2,022 and 148 out of 1,913 funds, respectively, in the Morningstar U.S. Large blend category. Morningstar rankings are based on total return. For additional performance details see performance charts below.
"Equal weight ETFs offer a compelling alternative to traditional market cap-weighted ETFs," said Mike Byrum, chief investment officer, quantitative strategies for Rydex. "Not only do equal weight funds employ a disciplined quarterly rebalance, a practice which can result in selling high and buying low, they also offer increased diversification* advantages across the constituents within each index."
As an example of how cap weighting differs from equal weighting, in the cap-weighted MSCI Emerging Markets Equal Weight Index, 50% of the index is comprised of the top 10% of the companies as of Q3 2010, which can result in concentration risk. In the new MSCI Emerging Markets Equal Weight ETF, that same top 10% of names are exactly that: 10% of the portfolio, resulting in greater diversification.
"By offering investors and advisors a broad suite of global equity equal weighted ETFs, we are providing an efficient way for investors and advisors to diversify their portfolios while potentially providing enhanced investment results," said Rich Goldman, CEO of Rydex. "The RydexShares equal weight ETFs may act as a solution for investors seeking to optimize their portfolios to meet today's challenging asset allocation needs."
About Rydex
Rydex manages approximately $21 billion in assets-including more than $6 billion in exchange traded product assets. Rydex offers institutional investors and financial intermediaries a broad spectrum of traditional and nontraditional investment options that span four distinct disciplines—fundamental alpha (actively managed equity and fixed-income), alternative strategies, target beta strategies and ETFs.
For more information call 800-820-0888.
*Diversification neither assures a profit nor eliminates the risk of experiencing investment losses.
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RYDEX S&P EQUAL WEIGHT ETF AVERAGE ANNUAL TOTAL RETURNS (As of 9/30/2010)
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| |
|
YTD(1)
|
1-Year
|
3-Year
|
5-Year
|
Since
Inception
|
Total
Expense
Ratio(2)
|
Inception
Date
| |
Rydex S&P Equal Weight ETF (NAV)
| 8.47%
| 15.29%
| -3.79%
| 2.29%
| 8.63%
| 0.40%
| 4/24/2003
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Rydex S&P Equal Weight ETF (Market Close)
| 8.44%
| 15.29%
| -3.77%
| 2.30%
| 8.64%
| 0.40%
| 4/24/2003
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S&P Equal Weight Index
| 8.84%
| 15.84%
| -3.00%
| 2.96%
| 9.26%(3)
| -
| -
| |
S&P 500®Index
| 3.89%
| 10.16%
| -7.16%
| 0.64%
| 5.15%(3)
| -
| -
| |
| |
| | | | | | | |
Performance displayed represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than original cost. Returns reflect the reinvestment of all dividends. Current performance may be lower or higher than the performance data quoted. For up-to-date fund performance, including performance current to the most recent month end, visit our web site at www.rydex-sgi.com. For additional information, see the fund's prospectus. ETFs are subject to third party transaction fees/commissions. Net asset value (NAV) is calculated by subtracting total liabilities from total assets, then dividing by the number of shares outstanding. Market close is the last price at which shares are traded. Fund shares may trade at, above or below NAV.
(1) Partial year returns are cumulative, not annualized. Performance results are short-term and may not provide an adequate basis for evaluating the performance potential of the fund over varying market conditions or economic cycles. (2) The fund has adopted a distribution (12b-1) plan pursuant to which the fund may bear an annual 12b-1 fee of up to 0.25%. However, no such fee is currently charged to the fund and no such fees will be charged prior to 3/01/2011. (3) Returns are for the period 4/24/03-9/30/10 (since inception of Rydex S&P Equal Weight ETF).
Morningstar Rankings as of 9/30/2010 (U.S. Large Blend Category)
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| 1 Year
| 3 Years
| 5 Years
| 7 Years
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RSP Morningstar Percentile Ranking
| 4th percentile
| 8th percentile
| 14th percentile
| 7th percentile
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RSP Morningstar Ranking
| 73 out of 2,022
| 148 out of 1,913
| 240 out of 1,714
| 91 out of 1,515
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Morningstar Rankings are based on total return and the number of funds in the Morningstar Category. The Morningstar Percentile Ranking compares a Fund's Morningstar risk and return scores with all the Funds in the same category, where 1%=Best and 100%=Worst.
Index data is for illustration purposes only and is not meant to represent any particular fund. Index data does not reflect any management fees, transaction costs or expenses. Each index is unmanaged and not available for direct investment.
ETFs may not be suitable for all investors. -- Investment returns and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than original cost. Most investors will also incur customary brokerage commissions when buying or selling shares of an ETF. -- Investments in securities and derivatives, in general, are subject to market risks that may cause their prices to fluctuate over time. -- ETF Shares may trade below their net asset value ("NAV"). The NAV of shares will fluctuate with changes in the market value of an ETF's holdings. In addition, there can be no assurance that an active trading market for shares will develop or be maintained. -- Tracking error risk refers to the risk that the Advisor may not be able to cause the Fund's performance to match or correlate to that of the Fund's Underlying Index, either on a daily or aggregate basis. Tracking error risk may cause the Fund's performance to be less than you expect. -- International ETFs investments in foreign instruments may be volatile due to the impact of diplomatic, political or economic developments on the country in question. Additionally, the fund's exposure to foreign currencies subjects the fund to the risk that those currencies will decline in value relative to the U.S. dollar.
For more complete information regarding RydexShares, call 800.820.0888 for a prospectus and a summary prospectus (if available). Investors should carefully consider the investment objectives, risks, charges and expenses of a fund before investing. The Fund's prospectus and its summary prospectus (if available) contains this and other information about the Funds. Please read the prospectus and summary prospectus (if available) carefully before you invest or send money.
The funds are distributed through Rydex Distributors, LLC (RDL). Security Global Investors(SM) is the investment advisory arm of Security Benefit Corporation (Security Benefit). Security Global Investors consists of Security Global Investors, LLC, Security Investors, LLC and Rydex Investments. Rydex Investments is the primary business name for Rydex Advisors, Inc. and Rydex Advisors II, Inc. SGI and RDI are all subsidiaries of Security Benefit, which is owned wholly by Guggenheim SBC Holdings, LLC, a special purpose entity managed by Guggenheim Partners, LLC, a diversified financial services firm with more than $100 billion in assets under supervision.
"Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500," "500," "S&P MidCap 400," and "S&P SmallCap 600" are trademarks of Standard & Poor's Financial Services LLC and have been licensed for use by Rydex|SGI and its affiliates. The Products are not sponsored, endorsed, sold or promoted by Standard and Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Products.
The Russell Midcap® Equal Weight Index, Russell 1000® Equal Weight Index and the Russell 2000® Equal Weight Index are trademarks of Russell Investment Group and have been licensed for use by Rydex|SGI and its affiliates. Neither Russell's publication of the Russell indices nor its licensing of its trademarks for use in connection with financial products derived from a Russell index in any way suggest or imply a representation or opinion by Russell as to the attractiveness of investment in any securities or other financial products based upon or derived from any Russell index. Russell is not the issuer of any such securities or other financial products and makes no expressed or implied warranties of merchantability or fitness for any particular purpose with respect to any Russell index or any data included or reflected therein, nor as to results to be obtained by any person or any entity from the use of the Russell index or any data included or reflected therein.
The funds or securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with Rydex|SGI and any related funds.
SOURCE Rydex|SGI
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