Now that it has built the toolset,
Rydex Investments is reaching out to advisors with a educational program to teach them how to use it. If it is succesful, it just may have more happy shareholders for its funds.
The Rockville, Maryland-based fund firm has long courted advisors with a family of advisor-focused funds that make sector or index bets. The firm has now developed its
Essential Portfolio Theory of how to put those funds together into a diversified portfolio.
Rydex designed its
Essential Portfolio Theory investment approach to help investment advisors, brokers and investors understand the dynamic nature of modern markets and learn how to potentially increase portfolio diversification and manage risk. The theory adds asset classes such as commodities, futures, real estate, inverse investments, hedge funds and leveraged or currency products to the traditional asset allocation mix used by advisors, according to Rydex officials.
David Reilly, director of portfolio strategies at Rydex Investments, said that the current sideways markets have shown that the traditional cash, bond and stock asset classes have become "increasingly correlated" and have created the opportunity to use additional types of investments to lower portfolio risks.
"Through EPT, we hope to educate investors about how new dynamic risk models, specialized investments and non-correlated asset classes can be used to attempt to achieve true diversification and maximize returns regardless of market conditions," explained Reilly.
 
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