Thursday, January 13, 2011
Rydex Expands its Lineup of Equal Weight ETFs
Reported by Hung Tran
yesterday unveiled the Rydex MSCI ACWI (All Country World Index) Equal Weight ETF
on the NYSE Arca.
The new offering provides broad exposure to the companies in the MSCI All Country World Equal Weighted Index, which currently consists of 45 country indices representing 24 developed and 21 emerging market countries.
Rydex manages over $6 billion in assets across its 34 exchange traded products, including 16 equal weight ETFs.
also picked up
on the product launch.
Jan 12, 2011 07:00 ETNew Rydex Equal Weight ETF Begins Trading
Rydex MSCI ACWI Equal Weight (EW) ETF Provides Broad Exposure to the Global Equity Markets; Brings EW Line-Up to 16
NEW YORK, NY--(Marketwire - January 12, 2011) - Rydex MSCI ACWI (All Country World Index) Equal Weight ETF began trading today on the NYSE Arca under the ticker symbol EWAC.
EWAC provides broad exposure to the companies in the MSCI All Country World Equal Weighted Index, which currently consists of 45 country indices representing 24 developed and 21 emerging market countries.
"EWAC is designed for investors who seek to invest broadly across the global equity markets," said Mike Byrum, chief investment officer, quantitative strategies for Rydex. "Compared with a traditional cap-weighted index, the equal weight methodology reduces the bias toward the largest constituents and provides broader diversification across all constituents, thereby potentially reducing concentration risk. Through disciplined quarterly rebalancing, EWAC sells those holdings that have appreciated in price and buys those that have not."
A simple comparison illustrates the difference between cap weighting and equal weighting. As of December 31, 2010, the top ten holdings in the MSCI ACWI Cap-Weighted Index represented 7.75% of the overall portfolio; by contrast, those same top holdings represented just 0.41% of the MSCI ACWI Equal Weighted Index. This example demonstrates how the equal weight methodology broadens diversification and has the potential to reduce the risks associated with a bias toward larger capitalization companies.
Rydex manages over $6 billion in assets across its 34 exchange traded products, including 16 equal weight ETFs. The ETF line-up at Rydex, with the exception of CurrencyShares®, is known in the marketplace as RydexShares(SM), and includes nine sector ETFs.
The addition of EWAC as part of the extension of the line-up was announced in December 2010 along with five other new equal weight ETFs, all of which trade on the NYSE Arca:
Rydex Russell 1000® Equal Weight ETF (EWRI)
Rydex Russell 2000® Equal Weight ETF (EWRS)
Rydex Russell Midcap Equal Weight ETF (EWRM)
Rydex MSCI EAFE Equal Weight ETF (EWEF)
Rydex MSCI Emerging Markets Equal Weight ETF (EWEM)
Equal weight strategies have the potential to deliver strong investment results relative to cap-weighted strategies, as evidenced by Rydex S&P 500 Equal Weight ETF (Ticker: RSP), Rydex's flagship ETF. Since inception on April 24, 2003, RSP has delivered an annualized return of 9.94% versus 6.39% for its cap weighted index counterpart, the S&P 500 Index, as of December 31, 2010. For additional performance details see charts below.
"Rydex was a pioneer in bringing the equal weight methodology into the mainstream," said Rich Goldman, CEO of Rydex. "For years we have provided clients with compelling alternatives to traditional cap-weighted and actively managed core products," said Rich Goldman, CEO of Rydex. "We are excited to add ACWI as a complement to our diverse equal weight line-up."
Rydex manages approximately $24 billion in assets -- including more than $7 billion in exchange traded product assets. Rydex offers institutional investors and financial intermediaries a broad spectrum of traditional and nontraditional investment options that span four distinct disciplines -- fundamental alpha (actively managed equity and fixed-income), alternative strategies, target beta strategies and ETFs.
For more information call 800.820.0888.
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