Maybe daily or
less frequent NAV.
Premiums and
discounts exist.
Daily NAV, 15-second
IIVs. Premiums and
discounts exist.
Daily NAV.
No premium or
discount.
Trades on
an exchange
No
Yes
Yes
No
Taxes
Portfolio
manager
generates
capital gains
Investor controls
Investor has some
control
Portfolio manager
generates capital
gains/losses
Investment
Acts
Investment Company
Act of 1940
Investment
Company Act of
1940, Securities
Act of 1933
and Securities Act
of 1934
Investment
Company Act of
1940 or Securities
Act of 1933
Investment
Company Act of
1940, Securities Act
of 1933 and
Securities Act
of 1934
First product
created
19241
19291
19922
19933
Number of
funds in
existence*
7,1974
6684
5864
425
Important Points
to Remember
Open-end mutual funds combine
money from investors into one
investment pool. If shareholders
want to sell their shares, the
mutual fund manager must
sell portfolio securities, which
triggers a capital gain or loss.
Open-end mutual funds are
usually priced once a day.
Closed-end mutual funds have
a limited number of shares that
may be purchased through an
initial public offering (IPO) and
then on a stock exchange. Due
to this structure, they may trade
at premiums or discounts to
their NAV for extended periods
of time.
ETFs trade on an exchange
throughout the day. Due to their
unique in-kind reation/redemption
process, which doesn’t necessitate
the portfolio manager selling
securities to meet redemptions,
they tend to be more tax efficient.
There is also an opportunity for
arbitrage, which prevents ETFs
from trading at deep discounts
or premiums.
As opposed to closed-end funds,
interval funds may continuously
sell new shares to investors.
While investors can’t sell their
shares daily, interval funds periodically
offer to repurchase their
shares from investors at the net
asset value—thus the name.
* As of November 2007
1 Source: Morningstar 2 Source: Business Week, April 2007 3 Source: Rule 23c-3, Securities Lawyer’s Deskbook 4 Source: Investment Company Institute, October 2007, excludes money market funds 5 Source: Lipper
This information is subject to change at any time and should not be construed as a recommendation of any specific security
or strategy.
This information does not constitute tax advice. Please consult your tax advisor and/or state and local tax offices for more
complete information.
Securities are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks,
including the possible loss of the principal amount invested.
RydexShares™ 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.
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