Rydex Investments has launched six ExpressShares exchange-traded funds on the American Stock Exchange that provide leveraged and inverse exposure to the S&P 500, S&P MidCap 400 and
Rydex Investments has launched six ExpressShares exchange-traded funds on the American Stock Exchange that provide leveraged and inverse exposure to the S&P 500, S&P MidCap 400 and Russell 2000 indices.
‘With the launch of the new ExpressShares ETFs, we’re pleased to respond to client requests for leveraged and inverse strategies within a low-cost ETF format,’ says Tim Meyer, ETF business manager at Rydex Investments. ‘Investors now have more choices in how they access these strategies – selecting from Rydex mutual funds or Rydex ETFs – depending on their specific investment objectives and circumstances.’
‘We are pleased to be working with Rydex as they expand their family of ETFs to provide the investors with new tools for their portfolios,’ says Scott Ebner, senior vice-president of the Amex ETF Marketplace. ‘These six new Rydex ETFs offer investors inverse and leveraged inverse exposure to major stock benchmarks.’
Rydex’s leveraged ETFs aim to magnify their benchmark exposure by 200 per cent, while its inverse ETFs seek to move in the opposite direction of their benchmarks on a daily basis, enabling investors to profit during market downturns. While both leveraged and inverse strategies may be used to capitalise on a directional market move, they may also serve as risk management tools in a well-diversified portfolio.
‘We’re seeing financial professionals employ inverse strategies as a way to hedge their traditional long exposure to an index efficiently and cost-effectively,’ says David Reilly, the firm’s director of portfolio strategies. ‘Leverage may be used to maintain a desired exposure to an index with less investment. This frees up cash for investment in non-correlating assets that may potentially reduce risk to the overall portfolio.’
In addition to complementing Rydex’s existing line-up of leveraged and inverse mutual funds, the ETFs round out the firm’s suite of exchange-traded products. The firm now offers more than 30 ETFs, providing exposure to broad market, sector, style, currency, and leveraged and inverse investment strategies. Based in Rockville, Maryland, Rydex manages some USD16.8bn in assets through nearly 100 mutual funds and exchange-traded products.
‘At Rydex we’re committed to providing ETF investors with unique investment management expertise,’ says Meyer. ‘But we’re also focusing a great deal of energy on investor education. It’s clear that investors still face a lack of knowledge about ETFs despite the industry’s rapid growth.’
Rydex and e-Rewards conducted a study of individual mutual fund investors earlier this year and discovered that more than a third (35 per cent) of individual mutual fund investors do not know what an ETF, while more than half (53 per cent) do not know the difference between ETFs and mutual funds.
