SOURCE: Rydex Investments

March 06, 2008 10:42 ET

Industry's First Managed Futures Mutual Fund Approaches Half-Billion Asset Mark During Its First Year

Rydex Managed Futures Strategy Fund Is Designed to Provide Convenient Access to the Potential Diversification Benefits of Managed Futures

ROCKVILLE, MD--(Marketwire - March 6, 2008) - Rydex Investments today announced that assets in the industry's first mutual fund providing managed futures exposure are quickly approaching the half-billion mark. Rydex Managed Futures Strategy Fund was launched a year ago this week and has attracted approximately $400 million in assets, including more than $150 million since the beginning of January. The fund is designed to provide convenient and cost-effective access to the U.S. commodity and global financial futures markets by aiming to mirror the daily performance of the Standard & Poor's Diversified Trends Indicator (S&P DTI) less any fees and transaction costs.

"Financial professionals are embracing alternative investments like managed futures for their potential to help manage portfolio risk and enhance returns regardless of market conditions," says Edward Egilinsky managing director of alternative investments at Rydex. "Due to managed futures' historically low correlation to traditional stock and bond asset classes, it's not surprising that we've seen significant interest in Rydex Managed Futures Strategy Fund as investors seek refuge from a volatile stock market."

Rather than investing in managed futures directly, the fund uses structured notes to provide exposure to the S&P DTI. Comprised of 14 sectors -- with 50% allocated to financial futures and 50% to commodity futures -- the S&P DTI uses a rules-based methodology to go long or short based on price momentum. The indicator rebalances monthly.

"From a diversification standpoint, Rydex Managed Futures Strategy Fund offers exposure to commodities without the additional equity risk often associated with many types of commodities funds and ETFs," says Kathy Boyle, principal at Chapin Hill Advisors Inc., who allocates a portion of her clients' commodities portfolio to the fund. "I'm able to provide my clients with access to managed futures at a much lower fee structure than traditional commodity pools and hedge funds."

Along with cost-effective exposure to managed futures, Rydex Managed Futures Strategy Fund is designed to offer other benefits associated with mutual fund investing, including daily liquidity(1), low minimums and regulatory oversight.

"Alternative asset classes and investment strategies like managed futures have traditionally been reserved for high-net worth or institutional investors," says Egilinsky. "By packaging alternative exposures within registered product structures, Rydex has been able to marry the benefits of mutual fund investing with the potential diversification benefits of alternatives."

In addition to managed futures, Rydex offers funds that provide exposure to alternative investments such as commodities, currency, REITS, absolute return and long/short strategies.

About Rydex Investments

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 approximately $15 billion in assets via nearly 100 mutual funds and exchange traded products.

For more complete information regarding Rydex funds, call 800.820.0888 for a prospectus. Investors should carefully consider the investment objectives, risks, charges and expenses of a fund 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.

Rydex Managed Futures Strategy Fund is subject to a number of risks and may not be suitable for all investors. The fund's use of derivatives such as futures, options, structured notes and swap agreements may expose the fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. A highly liquid secondary market may not exist for the commodity-linked structured notes the fund invests in, and there can be no assurance that a highly liquid secondary market will develop. The fund's exposure to the commodity and currency markets may subject the fund to greater volatility as commodity-and currency-linked derivative investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry, commodity or currency-- such as droughts, floods, weather, livestock disease, embargos, tariffs and international economic, political and regulatory developments. The fund may also incur transaction costs with the conversion between various currencies. The fund's use of short selling involves increased risk and costs. The fund risks paying more for a security than it received from its sale. Theoretically, securities sold short have the risk of unlimited losses. When the fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF's expenses. Further, in part because of these additional expenses, the performance of an ETF may differ from the performance the fund would achieve if it invested directly in the underlying investments of an ETF. This fund is subject to tracking error risks, which may cause the fund's performance not to match that of or be lower than the fund's underlying benchmark. See the prospectus for more details. This fund is considered nondiversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single currency could cause greater fluctuations in the value of fund shares than would occur in a more diversified fund. Securities are not guaranteed by any bank, are not insured by the FDIC or any other agency and involve investment risks, including the possible loss of the principal amount invested.

"S&P®", "Standard & Poor's®" and "S&P DTI" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Rydex Investments. Rydex Managed Futures Strategy Fund is not sponsored, endorsed, sold or promoted by S&P, or Alpha Financial Technologies, Inc. ("AFT"), the owner of the S&P DTI, and S&P and AFT make no representation regarding the advisability of investing in the fund.

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

(1) Subject to a 1% 90-day redemption fee.

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