August 31, 2011 09:15 ET

Educational Papers From Rydex|SGI Highlight Sector and Currency Investing

NEW YORK, NY--(Marketwire - Aug 31, 2011) - Rydex|SGI, a leading asset manager, today released two educational papers, "Equal Weight Sectors" -- which discusses an equal weight sector investment approach and "Currency as an Asset Class" -- which examines the growing use of currencies in the retail marketplace.

Equal Weight Analysis
The "Equal Weight Sectors" report discusses the use of sectors as part of a broad investment strategy and examines the use of equal weight indexes in executing a sector allocation strategy. The report includes a detailed performance comparison between equal-weighted sector indices and the more traditional capitalization-weighted approaches.

"Equal Weight Sectors" compares the compositions of the capitalization (cap)-weight versions of the nine S&P 500 sector indexes to the equal weight versions. The composition can differ significantly between the two approaches, according to the Rydex|SGI analysis. The cap-weight indexes offer greater concentrations to the larger-cap stocks in their sector. This large-cap bias is most apparent in the energy sector, where the top two stocks -- Exxon Mobil and Chevron -- comprised approximately 40%* of the cap-weighted S&P 500 Energy Index.

Similarly, just four stocks -- Procter & Gamble, Coca-Cola, Philip Morris and Wal-Mart -- comprises 44%* of the S&P 500 Consumer Staples Index. The top five stocks in the S&P 500 Heath Care Index, including Johnson & Johnson's 13% weight, represented 42%* of the space, and the top three stocks in the S&P 500 Financial Index -- JP Morgan Chase, Wells Fargo, and Berkshire Hathaway -- make up approximately 25% of the sector.

"Sectors offer a way for an investor to express tactical shifts over time and equal weight sectors, and in many instances, have delivered relatively attractive returns since their inception compared to their cap-weighted counterparts," said Tony Davidow, managing director and portfolio strategist at Rydex|SGI. "Depending on an investor's goals, an equal weight sector approach may offer an effective way to overweight and underweight sectors based on a particular view of the market," he said.

Currency Analysis
The "Currency as an Asset Class" paper offers a brief history on Foreign Exchange (Forex), or currency trading, a discussion on the factors that drive currency values, and an overview of how currencies are being used today by many investors. An increasing number of currency-based products have been launched in recent years, providing the means of gaining currency exposure for an increasing number of investors, according to the paper. More importantly, since currencies reflect the strengths and weaknesses of a particular economy, they represent a valuable investment option.

"While the Forex market is very large and liquid the average investor may lack a sufficient understanding of the futures markets to invest in the same manner as institutions," said Davidow. "Currency-based products, on the other hand, may offer an easier way to gain exposure for investment purposes or as a way to hedge the impact of currency fluctuations over time."

Currently, Rydex|SGI offers nine Currency ETPs and nine Sector ETFs.

About Rydex|SGI
Rydex|SGI manages approximately $23 billion in assets, including $8 billion in exchange traded product assets. The firm offers institutional investors and financial intermediaries a broad spectrum of traditional and non-traditional 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, visit or call 800.820.0888.

*Based on 3/31/2011 index compositions. The referenced indices are unmanaged and not available for direct investment.

Diversification does not ensure a profit, nor eliminates the risk of investment losses.

Sector investing may not be suitable for all investors. Investing in sector funds is more volatile than investing in broadly diversified funds, as there is a greater risk due to the concentration of the fund's holdings in issuers of the same or similar offerings.

Currency investing may not be suitable for all investors. Currency markets can be extremely volatile resulting in fluctuations in the price of the currency which could materially and adversely affect the value of an investment. There are several factors which can increase the volatility of a foreign currency including, but not limited to: national debt levels and trade deficits; domestic and foreign inflation and interest rates and investors expectations concerning inflation and interest rates; global and regional political, economic or financial events and situations. Before making an investment decision, investors should consult their financial professional regarding the risks of investing and other factors involved in currency investing.

For more complete information regarding Rydex|SGI funds, call 800.258.4332 or visit 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) contain this and other information about the fund. Please read the prospectus and summary prospectus (if available) carefully before you invest or send money.

Rydex|SGI funds are distributed by Rydex Distributors, LLC (RDL). Security Investors, LLC (SI) is a registered investment advisor, and does business as Security Global Investors® and Rydex Investments. SI and RDL are affiliates and are subsidiaries of Security Benefit Corporation, which is wholly-owned by Guggenheim SBC Holdings, LLC, a special purpose entity managed by an affiliate of Guggenheim Partners, LLC, a diversified financial services firm with more than $100 billion in assets under supervision.

"S&P 500" is a trademark of The Standard & Poor's, LLC and has 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.

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