Rydex Funds is working very hard to reach its goal of attracting $10 billion in assets under management. To do that, Skip Viragh, founder of the Rockville, Md.-based firm, says appealing to the broker/dealer market is essential.
"The buy-and-hold people [is] where the dollars are," Viragh told a press briefing in New York yesterday.
After much success of its new sector rotation fund, which has captured more than $100 million in assets under management since its launch in late March, the group is on the verge of launching a core equity fund. Rydex hopes that by offering a core fund in a client's portfolio, advisers can then sell other funds, such as the Rydex sector rotation fund, to diversify a clients holdings, executives of the firm said
According to its prospectus, the core equity fund seeks long-term capital appreciation by investing in a combination of value-oriented and growth-oriented strategies across the small-, medium- and large-cap U.S. market. The fund's total annual operating expenses are estimated at 1.70% so far.
Though the fund is still being evaluated by the Securities and Exchange Commission for approval and the prospectus is subject to change, Rydex hopes to launch it by early fall, Viragh said.
The new core equity fund will work much in the same way as some of its other funds. According to Rydex, advisers are attracted to the sector rotation fund because all the money management is done for them. "Advisers] are interested in gathering assets," not managing money, Viragh said.
And they appreciate the transparency of the fund. "The fund is working because it has such a clear strategy," said Chuck Tennes, director of portfolios at Rydex.
Viragh added that Rydex plans to capture more advisers through additional strategy-type products, rather than index funds.