Rydex is proving that it’s possible for mutual funds to be creative in how they use exchange traded funds (ETFs).

The provider is launching a new long-short index mutual fund that takes a fund-of-funds approach, says  Murray Coleman of Index Universe. The idea will be to invest in alternative benchmarks, and the fund will allocate its assets to five strategies in five segments using ETFs or mutual funds.

The fund takes a fresh approach using the following allocations, in order of total assets:

  • The Rydex Managed Futures Strategy Fund (RYMFX)
  • PowerShares DB G10 Currency Harvest (DBV)
  • The Rydex Commodities Strategies Fund (RYMEX)
  • The Rydex Real Estate Fund (RYREX)
  • The Rydex Alternative Strategies Allocation Fund (RYFOX)

The fund rebalances monthly, but can do so more often. The annual expense ratio is 1.75%, and no fund of fund fees are charged.

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.