In March, Rydex Investments
tested the broker-dealer waters by launching
A-share classes for 15 of its top selling and new funds.
"The response was very positive…we're having a great year from a sales standpoint…we've attracted a good amount of assets to them," said Phil Fragasso
, marketing director at Rydex.
As a result, Rydex is launching A shares for the rest of its mutual funds -- 30 in all.
"Our broker/dealer clients responded well to our initial rollout of 15 A-share funds in March. These 30 additional funds will allow advisors to have more investment options with a complete selection of 45 A-share funds," stated Jane Mancini
, executive vice president at Rydex.
The initial A class roll out included Rydex's Nova, Ursa, Arktos, Medius, Inverse Mid-Cap, Mekros, Inverse Small-Cap, U.S. Government Bond, Juno, Large-Cap Europe, Large-Cap Japan Fund, U.S. Government Money Market Fund, Core Equity and Sector Rotation funds.
| Rydex Says Hello to BDs |
| Investment Amounts || Sales Load |
| Less than $100,000 || 4.75% |
| $100,000 but less than $250,000 || 3.75% |
| $250,000 but less than $500,000 || 2.75% |
| $500,000 but less than $1,000,000 || 1.60% |
| $1,000,000 or greater || 0.00% |
|Rydex release |
At the end of August, Rydex had gathered $131 million in the 15 funds, said spokeswoman Melinda Clore. The additional 30 funds have thus far gained $3 million in assets, added Clore.
Wirehouses, regional broker-dealers and independents will be the targets of a campaign to educate brokers about the new share class, said Fragrasso. Rydex sent out an email to existing advisors, added information on the Rydex website, and will add information to what he termed Rydex's "ongoing communications," such as newsletters and quarterly performance data.
According to Rydex's website
, brokerages that currently offer Rydex funds include: Fidelity Brokerage, Charles Schwab, TD Waterhouse, E*Trade, Ameritrade, Harris Direct, Vanguard Brokerage Services, Dreyfus Brokerage Services, MLDirect, T. Rowe Price, Cititrade.com
Quick & Reilly and Strong Brokerage.
The A shares are just one part of Rydex's larger push into the broker-dealer channel. Rydex is also educating its wholesalers about how to approach and partner with firms and repackaging tools for the registered investment advisor channel for use in the broker dealer channel.
Rydex is developing seminars for their wholesalers to use when selling to advisors, and for advisors to use when selling to their clients, said Fragasso.
Also in the works are joint marketing programs between Rydex and broker-dealers, said Fragrasso. "We're in discussions with a bunch of partner firms," added Fragrasso.
On the education front, Rydex released four brochures designed to educate intermediaries and their clients about exchange-traded funds, sector funds, leverage and funds of funds. The fund firm plans on releasing complementary educational videos in the fall.
This fall also expect to see new tools for intermediaries in three categories of research: technical, economic and fundamental. Rydex has partnered with Argus Research Corporation
for economic research, Dorsey Wright & Associates
for technical research, and Salomon Brothers
for fundamental research. Intermediaries will be able to access the tools via the web as well as through newsletters, said Fragasso.
Ibbotson Associates unit Agency Ibbotson
is also working with Rydex to develop sales tools for intermediaries.
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