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Products November 16, 2006
Rydex Expands ETF Offering
Rydex Investments has announced the launch of nine equal weight sector exchange traded funds (ETFs) based on the S&P Equal Weight Sector Indices.
Reported by Rebecca Moore
According to the announcement, the new funds will give investors full exposure to the consumer discretionary, consumer staples, energy, financial services, health care, industrial, basic materials, technologies and utilities sectors. The Rydex S&P Equal Weight Sector ETFs divide all stocks in an index equally.
Using equal weighting, Rydex seeks to outperform capitalization-weighted funds, which give more weight to the largest stocks within an index, the announcement said. Equal weighting helps to avoid single-stock risk and provides exposure to smaller sector stocks.
The funds will be rebalanced quarterly to help maintain equal weighting, promote greater diversification, and promote higher exposure to value stocks, Rydex said.
“Although the comparative returns and volatilities of the weighting methods might differ during market cycles, we’ve seen that, over time, equal weighting tends to outperform cap weighting,” says Tim Meyer, ETF business line manager at Rydex Investments, in the announcement.
The addition of the nine funds expands Rydex’s ETF offering to 24.
For more information, go towww.rydexinvestments.com.