Rydex Investments has announced the launch of a comprehensive educational initiative to help bridge the gap between the burgeoning ETF marketplace and investor awareness about exchange-traded funds. The firm’s ETF Essentials program offers individual investors and financial professionals alike an opportunity to sharpen their knowledge by exploring subjects such as ETF liquidity, pricing, redemption and the ETF creation process.
“As a nontraditional fund company that specializes in bringing institutional-style strategies to retail investors, Rydex has made a commitment to investor education,” says Tim Meyer, ETF business manager at Rydex Investments. “We’re extremely excited to introduce ETF Essentials, as research shows that there is a dearth of investor knowledge when it comes to exchange-traded products.”
In July, Rydex conducted a survey of 500 mutual fund investors, which revealed that the industry has fallen short in educating investors about exchange-traded funds. In fact, more than a third (38 percent) of individual investors do not know what an ETF is, and more than half (53 percent) do not know the difference between an ETF and a mutual fund. The main reason 63 percent of investors don’t invest in ETFs is because they don’t know enough about them.
Despite a lack of awareness, investors indicate that they’re interested in learning more. More than a third (35 percent) of individual investors would like more information about ETFs. And among those who work with financial professionals, 40 percent would like to know more about ETFs — and about half would consider investing in ETFs if their advisor suggested it.
“The rapid growth of the ETF industry means that investor education will play an increasingly important role in differentiating ETF providers,” says Meyer. “Along with Rydex’s unique investment management expertise, we’re pleased to bring investors the added value of education.”
As a pioneer in the ETF space, Rydex currently has more than $5.6 billion in ETF assets under management and offers 25 exchange-traded products with broad market, sector, style and currency exposure. In 2003, the firm launched its flagship ETF, Rydex S&P Equal Weight ETF (RSP), the industry’s first exchange-traded fund to move away from capitalization weighting. Rydex is also known for bringing the first currency-based exchange-traded product to market in 2005.
Ron DeLegge is the San Diego-based editor of www.etfguide.com.