|
Not all investments are created equal.
 An alternative approach to cap-weighting is equal weight investing. Unlike cap-weighting, this approach invests equally across an index’s constituents or market segments.
Equal weight investing provides equal representation for each component of an index, whether that be at the sector level, the actual constituent level or a combination of both.
The potential benefits of an equal weight approach are three-fold, including:
Performance Potential – An equal weight approach reduces the bias towards the largest companies within a particular cap-weighted strategy. The smaller companies may help an equal weight strategy outperform when large caps are not in favor—though when large stocks are in favor, equal weighted strategies may underperform.
Diversification* – Although diversification does not assure a profit nor eliminate the risk of experiencing investment losses, it may help reduce concentration risk and provide more balanced exposure across market capitalization, sectors and other broad risk factors.
Disciplined Rebalancing – As portfolios are regularly rebalanced back to equal weight, they take profits on outperforming components of the index—such as specific companies or sectors. Those proceeds are reinvested in out-of-favor components, resulting in equal and unbiased exposure to the index constituents, which may help balance market risk factors and provide enhanced risk control.
Rydex|SGI pioneered the equal weight ETF market, launching the first equal weight ETF in April, 2003—Rydex S&P 500 Equal Weight ETF (RSP). Since then, Rydex has continued its dedication to being a leader in equal weight investing by introducing 17 additional equal weight ETFs covering domestic and international markets, as well as, sectors within the S&P 500.
*Diversification neither assures a profit nor eliminates the risk of experiencing investment losses.
As with any investment, equal weighted strategies are subject to market risk and may lose value including the possible loss of the principal amount invested.
Rydex Equal Weight 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 are subject to market risks that may cause their prices to fluctuate over time. Please review a prospectus carefully for more information of the risks associated with each ETF.
Rydex MSCI EAFE Equal Weight ETF, Rydex MSCI ACWI Equal Weight ETF and Rydex MSCI Emerging Markets Equal Weight ETF are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectus contains a more detailed description of the limited relationship MSCI has with
Rydex|SGI and any related funds.
"Standard & Poor's®", "S&P®", "S&P 500®", "Standard & Poor's 500", "500", "S&P MidCap 400" and "S&P
SmallCap 600" are trademarks of Standard & Poor's, LLC and have been licensed for use by Rydex SGI and its
affiliates. Citigroup is a trademark of Citigroup Global Markets Inc. and has been licensed for use by Standard & Poor's. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's, and neither Standard & Poor's nor Citigroup Global Markets Inc. makes no representation regarding the advisability of investing in the
product.
The Russell Midcap® Equal Weight, Russell 1000® Equal Weight and Russell 2000® Equal Weight Indexes are trademarks of Russell Investment Group and have been licensed for use by Rydex|SGI and its affiliates. Neither Russell’s
publication of the Russell indices nor its licensing of its trademarks for use in connection with financial products derived from a Russell index in any way
suggest or imply a representation or opinion by Russell as to the attractiveness of investment in any securities or other financial products based upon or derived
from any Russell index. Russell is not the issuer of any such securities or other financial products and makes no expressed or implied warranties of merchantability
or fitness for any particular purpose with respect to any Russell index or any data included or reflected therein, nor as to results to be obtained by any person or
any entity from the use of the Russell index or any data included or reflected therein.
|
Print this page
Email this page
Not FDIC Insured 
