Rydex Investments has launched a fund of funds that offers exposure to the alternatives marketplace.
The Rydex Alternative Strategies Allocation Fund will invest in hedge fund replication strategies, commodities, currencies, real estate investment trusts, managed futures, and exchange traded funds, including other Rydex funds.
The fund will be run by Mike Byrun, president and chief investment officer.
"Rydex relies on a rules-based investment methodology to analyze the historical correlations and risks of the underlying funds, as well as current market conditions," said Edward Egilinsky, managing director of alternative investments for Rydex. "From a portfolio diversification standpoint, alternatives have collectively shown a very low or negative historical correlation to stocks and bonds."
The fund requires a $1,000 minimum investment for retirement accounts and $2,500 for other accounts held through third parties. It requires a $25,000 minimum investment for accounts held directly with Rydex and $15,000 for accounts managed by intermediaries.
The fund charges annual operating expenses of 1.76% and a 1% fee for redemptions within 30 days.
"Until recently, individual investors have had difficulty gaining access to alternative investments due to high minimum requirements, lack of liquidity and other barriers," Egilinsky continued. "By packaging alternative exposures within mutual fund product structures, Rydex has been able to deliver the potential benefits of alternatives to individual investors in a retail-friendly format."