Mutual Fund Essentials - Shorting and Leverage

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Shorting and Leverage	Essentials of Leveraged & Inverse Investing PDF

Overview

Leveraged
Investing

Inverse
Investing

Compounding
of Returns

Are You a
Candidate?

Note About
Leveraged ETFs

Downloads

While each investor’s risk tolerance and time horizon vary, utilizing inverse and leveraged products may provide you with opportunities to free up capital and diversify beyond traditional asset classes.

The chart below shows that inverse and leveraged strategies may be appropriate for investors with the following characteristics:

Inverse investment candidates seek:

Leveraged investment candidates seek:

• An aggressive investment tool

• To diversify portfolios to reduce downside market risk

• To avoid capital gains from selling long-term holdings

• To minimize risk in a portfolio that is overweighted in any one segment of the market

• To access the index through a single ticker

• An aggressive investment tool

• Greater exposure to an index
without additional cash outlay

• Ability to overweight a single segment of the market

• Control market exposure based on your needs

• To access the index through a
single ticker

This piece is intended to be for information purposes only. Investors should discuss these concepts and their personal financial situation with their financial advisor or advisors prior to making any investment decisions.

Inverse funds and leveraged funds may not be suitable for all investors. Investing in short/inverse funds involves certain risks, which may include increased volatility due to the funds' possible use of short sales of securities and derivatives such as options and futures. The funds are subject to active trading risks that may increase volatility and impact the funds' ability to achieve their investment objectives. The use of leverage by a mutual fund increases the risk to the fund. The more a mutual fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments.

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Rydex funds are distributed by Rydex Distributors, Inc., an affiliate of Rydex Investments.

For more complete information regarding Rydex funds, call 800.820.0888 or click here for a prospectus. Investors should consider the investment objectives, risks, charges and expenses of a fund carefully before investing. The fund's prospectus contains this and other information about the fund. Read the prospectus carefully before you invest or send money.