It uses a quantitative, rules-based model to evaluate various economic factors and analyze the potential growth and future value of the 22 developed countries and their currencies within the MSCI World Ex-U.S. Index. Among the factors the fund considers are free cash earnings, interest rate movements and other technical indicators. It will invest in between six and 15 countries.
“At any given point in history, a number of foreign markets have outperformed U.S. markets,” said Edward Egilinsky, managing director of alternative strategies at Rydex. “Although investors may realize benefits associated with international investing, navigating foreign markets still presents a challenge. Rydex International Rotation Fund attempts to make it easier for investors to be at the right place at the right time.”
David Reilly, director of portfolio strategies at Rydex, added, “A country’s intrinsic value is the dominant factor in determining the fund’s rotation strategy. It portrays a country’s fair value by taking into account factors such as the value of current cash flows and expected cash flow growth and compares them to other international markets.”
