Fund Openings, Closings, Manager Moves: Rydex Plans More Supercharged Index Funds

Rydex plans to roll out four new leveraged funds next month that will make long and short bets on the S&P 500 and Nasdaq 100 indices.

From the new funds' paperwork on file with the Securities and Exchange Commission, they look aggressive, expensive and perfect for fast-trading market-timers.

Called the "Dynamic Funds," two are for bulls and two are for bears. For bulls, there will be the Titan 500 and Velocity 100, which will invest primarily in futures and options contracts tied to the S&P 500 and Nasdaq 100, respectively. Each fund will try to double its index's gains. But keep in mind that the same will happen for losses.

For bears, there will be Tempest 500 and Venture 100. These two funds will invest in futures, options and short sales tied to the S&P 500 and Nasdaq 100, respectively. They'll try to double the inverse -- or opposite -- return of each index. That is, when these indices are down, the funds expect to be up twice as much.

Again, keep in mind, this strategy means that when the indices are up, these funds will probably be down twice as much.

There are a few elements to the funds that market-timers are sure to like. Exchanges are free and unlimited and can be made online through Rydex's Web site. Also, the funds will be priced twice each day, at 10:30 a.m. EST and 3:55 p.m. EST.

One thing timers should keep in mind, however, is that the funds are being launched as a separate fund family. So, exchanges from one of Rydex's other funds into one of the Dynamic funds has to pass through a cash account, U.S. Government Money Market.

The new funds aren't cheap. Their 1.75% annual expenses are high compared with the average domestic stock fund's 1.23%. Although the funds are billed as "passively managed" in their filings, the higher costs probably result from their nontraditional, leveraged approach. The funds' minimum investment is $25,000 ($15,000 if you're investing through a financial adviser).

E*Trade Index Tracks Global Titans

Online broker E*Trade (EGRP Quote) announced Wednesday the launch of the Global Titans Index, a no-load fund designed to track the Dow Jones index of the same name.

E*Trade claims the new fund, which launched Friday, is the first to track the index -- not really a surprise since the index only started last July. It contains the 50 largest multinational companies, but the fund's paperwork doesn't name names. (For more on the Dow Jones Global Titans index, see a previous Dear Dagen.)

A team at E*Trade Asset Management will run the fund. The team also manages $166 million in assets among E*Trade's seven proprietary index funds. Like the others, this fund is available via the online broker's Web site with no load or transaction fee.

The new fund's 0.6% annual expense ratio is a bit higher than the average index fund's 0.55%, according to Morningstar. Investors seeking global exposure through index funds could do so by blending Vanguard domestic and international index funds at a lower annual cost.

Tuesday's Fund Openings, Closings, Manager Moves