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Trading Characteristics
CREATION / REDEMPTION |
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On the surface ETFs seem simple enough—they trade like
stocks and offer investors many of the same advantages of
traditional open-end mutual funds. But behind the scenes,
they operate very differently from their counterparts—starting with the finely-tuned and unique system needed
to create and redeem them. Unlike mutual funds that invest
by purchasing securities with cash on the open market, ETF
shares are created (and redeemed) via a unique in-kind
transaction known as the creation/redemption process.
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ETFs may not be suitable for all investors. •Investment returns and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than original cost. Most investors will also incur customary brokerage commissions when buying or selling shares of an ETF. •Investments in securities and derivatives, in general, are subject to market risks that may cause their prices to fluctuate over time. •ETF Shares may trade below their net asset value (“NAV”). The NAV of shares will fluctuate with changes in the market value of an ETF’s holdings. In addition, there can be no assurance that an active trading market for shares will develop or be maintained.
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.
RydexShares™ are distributed by Rydex Distributors, LLC (RDL), an affiliate of Rydex SGI.
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©2012 Rydex Distributors, LLC. All Rights Reserved.
 Not FDIC Insured No Bank Guarantee May Lose Value
For more complete information regarding the funds, call 800.820.0888 or click here 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. A fund's prospectus and its summary prospectus (if available) contains this and other information about the fund. Please read the prospectus and summary prospectus (if available) carefully before you invest or send money.
The funds are distributed by Rydex Distributors, LLC (RDL). Guggenheim Investments represents the
investment management businesses of Guggenheim Partners, LLC (GP), which includes Guggenheim
Partners Asset Management, LLC (GPAM) and Security Investors, LLC (SI), the investment advisors to the
referenced funds. Rydex Distributors, LLC, is affiliated with GP, GPAM and SI.
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| Key Points to Remember |
 It all begins with the
 Authorized Participant—
only the Authorized
Participant can create or
redeem shares of an ETF.
When creating an
ETF,
common stock is
exchanged
for ETF shares.
No cash
is exchanged for
ETF shares,
making this
an in-kind
transaction.
An ETF’s shares are
exchanged in-kind for
equal
value, so there are
no
taxable gains on the
transaction—enhancing
an ETF’s tax efficiency. |
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