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Rating:Rydex Tops Growth Marks Not Rated 3.6 Email Routing List Email & Route  Print Print
Tuesday, June 05, 2007

Rydex Tops Growth Marks

News summary by MFWire's editors

Rydex has accumulated $5 billion in assets in its suite of products. The firm has seen assets in its exchange traded lineup increase by more than 100% since last year, compared to the ETF industry’s 45% growth over the same time period.


Rydex Investments continues to build on its reputation as a leading exchange traded product provider, announcing today that its product suite has garnered $5 billion in assets. The firm has seen assets in its exchange traded lineup increase by more than 100% since last year, compared to the ETF industry’s 45% growth over the same time period. 1 Since launching its flagship ETF, Rydex S&P Equal Weight ETF, Rydex has introduced two dozen exchange traded products designed to provide investors with alternative weighting strategies, as well as broad market, style, sector and currency exposure. Sixteen of the firm’s 25 exchange traded products have launched within the last 12 months.

“Achieving $5 billion in exchange traded assets under management in just four years is a milestone that reflects Rydex’s commitment to this fast-growing industry,” said Carl Verboncoeur, CEO at Rydex Investments. “Since we entered the ETF space in 2003, we’ve focused on bringing products to market that provide unique value to investors, such as access to alternative weighting strategies or noncorrelating assets like currency.”

Rydex made its debut in the exchange traded fund space with the industry’s first equal-weighted ETF. As Rydex’s flagship ETF, Rydex S&P Equal Weight ETF (Amex: RSP) has also proven to be the firm’s most popular exchange traded product with more than $2 billion in assets. The fund provides investors with broad market exposure by tracking the S&P 500 Equal Weight Index, which includes the same 500 stocks as the well-known S&P 500. Unlike the S&P 500, which is capitalization-weighted, the S&P Equal Weight Index equally weights each of the 500 stocks within the index, eliminating the bias toward large-cap companies.

“We’ve seen financial professionals and institutions alike take advantage of RSP’s equal weight methodology to help diversify predominantly cap-weighted portfolios and help reduce single-stock risk,” said Tim Meyer, ETF business manager at Rydex. “Conversely, investors seeking pure mega-cap exposure have utilized Rydex Russell Top 50 ETF.”

Another “flagship” Rydex ETF, Rydex Russell Top 50 ETF (Amex: XLG) is composed of the 50 largest U.S. companies by market capitalization and has attracted approximately $533 million in assets.

In addition to Rydex S&P Equal Weight ETF and Rydex Russell Top 50 ETF, the firm currently offers nine equal-weighted sector ETFs based on the S&P 500 sectors, as well as six Pure Style ETFs based on the S&P/Citigroup Pure Style Indices. Rydex also offers eight currency-based exchange traded products.

“We’re excited about growing the Rydex exchange traded business, and have spoken with clients who appreciate the benefits associated with the exchange traded product structure, including affordability and liquidity,” said Meyer. “In fact, Rydex AdvisorBenchmarking finds that financial advisors cite ETFs as the number one investment vehicle that has helped them grow their businesses. We will continue to rely on feedback from the financial professional community as we seek to bring new products to market.”2

1 Investment Company Institute (www.ici.org): ETF assets as of April 2007 were $466.55 billion compared to $321.29 billion as of April 2006.

2 Rydex AdvisorBenchmarking Fall 2006 Supplemental Survey: 37% of advisors cited ETFs as the number one investment vehicle that has helped increase business since 2001.

About Rydex

Rydex Investments continues to drive change in the financial industry by introducing investment products and services that challenge conventional thinking, empower investors and provide essential new options for uncertain market conditions. Rydex manages $16 billion in assets via more than 80 mutual funds and exchange traded products.

For more complete information regarding Rydex funds, call 800.820.0888 or visit www.rydexinvestments.com for a prospectus. Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. The fund’s prospectus contains this and other information about the fund. Please read the prospectus carefully before you invest or send money.

ETFs are subject to risks similar to those of stocks and may not be suitable for all investors. Shares can be bought and sold through a broker and the selling shareholder may have to pay brokerage commissions in connection with the sale. Investment returns and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than original cost. Shares may only be redeemed directly from the fund by Authorized Participants via Creation Units. There can be no assurance that an active trading market for the shares will develop or be maintained, and fund shares may trade at, above or below their NAV. The elimination of the bias toward large-cap companies in Rydex S&P Equal Weight ETF also lessens the impact of large-cap gains compared to those reflected in the funds benchmarked to the S&P 500 Index. Additionally, Rydex Russell Top 50 ETF is subject to the risk that large-capitalization stocks may underperform other segments of the equity market or the equity markets as a whole. These ETFs are considered nondiversified and can invest a greater portion of their assets in securities of individual issuers than a diversified ETF. As a result, changes in the market value of a single security could cause greater fluctuations in the value of ETF shares than would occur in a more diversified ETF. There are no assurances that any Rydex ETF will achieve its objective and/or strategy.

“Standard & Poor’s®,” S&P®,” “S&P 500®,” and the “S&P Equal Weight Index” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Rydex and its affiliates. “Citigroup” is a trademark of Citigroup Global Markets Inc. and has been licensed for use by Standard & Poor’s. The Rydex S&P Pure Style ETFs and the Rydex S&P Equal Weight ETFs are not sponsored, endorsed, sold or promoted by Standard & Poor’s, and neither Standard & Poor’s nor Citigroup Global Markets Inc. makes any representation regarding the advisability of investing in the funds.

The Russell Top 50® Index is a trademark of Russell Investment Group and has been licensed for use by Rydex Investments and its affiliates. Neither Russell's publication of the Russell indices nor its licensing of it trademarks for use in connection with financial products derived from a Russell index in any way suggests or implies 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 analysis on AdvisorBenchmarking.com is based on the number of completed surveys and reflects only information from these surveys. This information is intended to be general and these overviews are no substitute for professional, legal or consulting advice. This information should not be construed as advice from Rydex AdvisorBenchmarking, Inc., AdvisorBenchmarking.com, its strategic partners or their affiliates. AdvisorBenchmarking.com is a service of Rydex AdvisorBenchmarking, Inc., an affiliate of Rydex Investments.

Rydex Distributors, Inc., an affiliate of Rydex Investments, is the distributor of the Rydex funds. 

Edited by: Erin Kello


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