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New S&P DTI Fund Coming from Rydex

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ROCKVILLE, Md. (–Rydex Investments, an investment advisory firm, is preparing the launch of a registered fund that will track the performance of the Standard & Poor’s Diversified Trends Indicator.

The S&P DTI is a benchmark for trends in the commodity and financial futures markets, designed by Alpha Financial Technologies LLC, Dallas.

Tracking the DTI will require that the new fund, the Rydex S&P Diversified Trends Fund, enter into short sales, futures, options, swaps and similar transactions, Rydex explained in a prospectus filed with the U.S. Securities and Exchange Commission Feb. 11.

It also said that “to collateralize Fund transactions on a day-to-day basis, the Fund will hold U.S. Government securities, short-term, high quality fixed-income securities, money market instruments, overnight and fixed-term repurchase agreements, cash, and other cash equivalents with maturities of one year or less” and that on “certain occasions” the fund might have to employ leverage.

The DTI employs a diversified portfolio of 24 futures contracts (“components”) formed into sectors that are designed to reflect and track (price) trends while maintaining low volatility. Exposure is divided equally between tangible commodities on the one hand and financials on the other in order to increase the internal non-correlation among the components and to add liquidity to the investment. Commodity sector

weights are based on known world production levels, while the weight of the financial sectors are based on gross domestic product.

The new fund’s team of portfolio managers will work under the president and chief operating officer of Rydex, Michael P. Byrum. He has been associated with Rydex since 1993. He became vice president of portfolio in 1998, executive vice president in 2000 and president in 2003.

Shares in the fund will carry a 0.9% management fee and a 0.25% distribution fee. The minimum investments are $25,000 for a self-managed account or $15,000 for an account managed by a registered investment adviser. The launch date is uncertain, but Rydex has proposed to the SEC that the new fund’s registration become effective 75 days after the filing.

Contact Bob Keane with questions or comments at: [email protected].


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