Rydex will begin trading its new “Rydex MSCI All Country World (ACWI) Equal Weight ETF” (NYSE:EWAC) Wednesday, January 12th. The investment objective of the Rydex MSCI ACWI Equal Weight ETF (the “Fund”) is to correspond, before fees and expenses, to the price and yield performance of the MSCI All Country World (ACWI) Equal Weighted Index.
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement: 0.60%
PRINCIPAL INVESTMENT STRATEGIES – The Fund uses a passive management strategy, known as “representative sampling,” to track the performance of the Underlying Index. “Representative sampling” refers to an indexing strategy that generally involves investing in a representative sample of securities or financial instruments, primarily consisting of American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”), that has an investment profile similar to the Underlying Index and some, but not all, of the component securities of its Underlying Index. The Fund implements its principal investment strategies, in part, through a “fund of funds” arrangement. This means that the Fund is able to invest in affiliated and unaffiliated investment companies, including other exchange-traded funds (“ETFs”), for the purpose of obtaining investment exposure to a subset or representative sample of the securities in the Underlying Index. The Fund intends to invest in the Rydex MSCI EAFE Equal Weight ETF and Rydex MSCI Emerging Markets Equal Weight ETF, but may remove or add one or more underlying funds based on the investment needs of the Fund and without shareholder notice.
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowings for investment purposes, in the equity securities included in the Underlying Index or equity securities that are representative of the securities comprising the Underlying Index. The Fund may hold up to 20% of its assets in securities not included in or representative of the Underlying Index. The Advisor expects that, over time, if the Fund has sufficient assets, the correlation between the Fund’s performance, before fees and expenses, and that of the Underlying Index will be 95% or better. A figure of 100% would indicate perfect correlation.
The MSCI All Country World (ACWI) Equal Weighted Index is a free float-adjusted equal weighted index that is designed to measure the equity market performance of developed and emerging markets. As of May 27, 2010, the MSCI ACWI Index consisted of 45 country indices comprising 24 developed and 21 emerging market country indices with capitalizations ranging from $1.58 billion to $290.6 billion as of June 30, 2010. The developed market country indices include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the
United States. The emerging market country indices include: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. Both Indices are denominated in U.S. Dollars. The Fund has adopted an investment policy to not invest 25% or more of the value of its assets in the securities of one or more issuers conducting their principal business activities in the same industry; except that, to the extent the Underlying Index is concentrated in a particular industry, the Fund will necessarily be concentrated in that industry. The Fund is non-diversified and, therefore, may invest a greater percentage of its assets in a particular issuer in comparison to a diversified fund.
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