Rydex Total Return Fund Works - In Some Ways

With all the market volatility these days, it's time to take another look at the Rydex Managed Futures(RYMFX Quote) absolute-return fund.

I took an asset-allocation approach toward this fund a year ago: If you believe in having a diversified portfolio, you will always have some commodity exposure.

RYMFX blends long and short positions of commodity and financial futures in an effort to deliver a steady return regardless of the market environment.

The fund mimics the S&P Diversified Trend Indicator, which is made up of 50% financial futures (allocated to eight products captured in the pie chart below) and 50% physical commodities (allocated to six products captured in the pie chart below). The methodology is to go long any of the 14 products that is above its seven-month moving average and short anything that is below its seven-month moving average. ...