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Rydex SGI launches long/short commodities fund


Rydex SGI has introduced a mutual fund designed to provide long/short exposure to commodities.

Rydex SGI has introduced a mutual fund designed to provide long/short exposure to commodities.

Rydex SGI Long/Short Commodities Strategy Fund aims to match the performance of the J.P. Morgan Core Commodity-Investable Global Asset Rotator Sigma Long-Short Total Return Index, an index which seeks to capitalize on rising and falling commodities prices.

"We’ve seen that financial advisers are increasingly turning to alternative investments like commodities for their historically low correlation to traditional stock and bond assets," says Richard Goldman, chief executive officer of Rydex SGI. "With the launch of Rydex SGI Long/Short Commodities Strategy Fund, we’re pleased to expand our suite of alternative investments to include an investment strategy that seeks to generate returns regardless of the direction of the commodities markets."

The fund can provide exposure to up to 14 different commodity constituents (up to seven long and up to seven short) including natural gas, gasoline, heating oil, lead, Brent crude oil, WTI crude oil, wheat, soybeans, corn, copper, aluminum, nickel, silver and gold.

Long and short positions are determined by the rules of the fund’s underlying index, which evaluate the historical price trend (and the consistency of the trend) of each index constituent.

The index is rebalanced on a monthly basis and features a built-in risk management mechanism that reduces exposure during periods following high historical volatility.

"Commodities have shown the ability to provide significant diversification benefits to an investment portfolio, particularly during a rising inflationary environment," says Sanjay Yodh, managing director, alternative investments at Rydex SGI. "Given the volatility and directional uncertainty of the commodities markets in general, we believe that a long/short commodities strategy offers a prudent approach to capture momentum while offering risk management potential."

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