CGW

Guggenheim S&P Global Water Index ETF

 

Fund Summary

The Guggenheim S&P Global Water Index ETF (NYSE:CGW), seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the S&P Global Water NR Index. The Fund is the first U.S.-listed global water ETF. The Fund will invest at least 90% of its total assets in common stock and American depositary receipts (“ADRs”) that comprise the Index depositary receipts representing common stocks included in the Index (or and underlying securities representing ADRs included in the Index). The depositary receipts included in the Index may be sponsored or unsponsored. Guggenheim Funds Investment Advisors, LLC (the "Investment Adviser”) seeks a correlation over time of 0.95 or better between the Fund’s performance and the performance of the Index. A figure of 1.00 would represent perfect correlation.

The Fund, using a low cost “passive” or “indexing” investment approach, seeks to replicate, before fees and expenses, the performance of the S&P Global Water Index. The Index is comprised of approximately 50 equity securities selected, based on investment and other criteria, from a universe of companies listed on global developed market exchanges. Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) generally defines “developed markets” as the capital markets of those countries with high levels of per capita income and strict market regulation resulting in greater transparency. The universe of companies includes all companies classified by Standard & Poor’s Global Industry Classifications as being associated (in a manner representing a major component of such companies’ business) with the global demand for water, including water utilities, infrastructure, equipment, instruments and materials.

Top Fund Holdings

as of 8/29/14 View All Holdings
PENTAIR PLC 6.99 %
GEBERIT AG-REG 6.69 %
UNITED UTILITIES GROUP PLC 6.47 %
AMERICAN WATER WORKS CO INC 5.88 %
DANAHER CORPORATION 5.19 %
SEVERN TRENT PLC 5.02 %
VEOLIA ENVIRONNEMENT 4.62 %
ALFA LAVAL AB 3.72 %
XYLEM INC/NY 3.58 %
SUEZ ENVIRONNEMENT CO 3.49 %

TOP FUND GEOGRAPHIC WEIGHTINGS

as of 3/31/14

Geographic Weighting
United States 37.77 %
United Kingdom 17.54 %
France 8.54 %
Switzerland 7.95 %
Hong Kong 5.36 %
Sweden 4.27 %
Netherlands 3.24 %
Japan 3.11 %
South Korea 2.46 %
Austria 2.34 %

TOP FUND SECTORS

as of 3/31/14

SECTOR WEIGHTING
Industrials 51.04 %
Utilities 38.62 %
Materials 4.53 %
Information Technology 2.95 %
Consumer Discretionary 2.46 %
Financials 0.23 %
Consumer Staples 0.16 %

All data is provided by Guggenheim Funds Distributors, LLC, or Morningstar. Data is subject to change on a daily basis and represents a percentage of the Fund’s holdings, excluding cash. The securities mentioned are provided for informational purposes only and should not be deemed as a recommendation to buy or sell.

Fund Profile

Symbol CGW
Exchange NYSE Arca
NAV Symbol (IIV) CGWIV
CUSIP 18383Q507
Fund Inception Date 5/14/07
Distribution Schedule (if any) Annually
Gross Expense Ratio 0.71 %
Net Expense Ratio 0.70 %
Fiscal Year-End 8/31
Investment Adviser Guggenheim Funds Investment Advisors, LLC
Distributor Guggenheim Funds Distributors, LLC
S&P Global Water IndexSPGTAQNT
Index Provider Standard & Poors

The gross expense ratio reflects the fund’s actual total annual operating expense ratio, gross of any fee waivers or expense reimbursements as of its most recent prospectus. While there is currently a contractual fee waiver in place through December 31, 2016, some expenses fall outside of this expense cap and therefore net operating expenses may be higher. Without this expense cap, actual returns would be lower. See the prospectus for information on the fees and expenses.

The gross expense ratio reflects the fund’s actual total annual operating expense ratio, gross of any fee waivers or expense reimbursements as of its most recent prospectus.

Fund Statistics

as of 8/29/14 Price History
  MARKET PRICE NAV
Close $29.08 $29.02
Change $0.03 $0.04
52-Week High $30.36 $30.26
52-Week Low $23.88 $23.90
Bid/Ask Midpoint $28.83
Bid/Ask Premium (Discount) -0.65 %
Volume 34,666
Shares Outstanding 12,680,000
Total Managed Assets $367,913,625

Fund Characteristics

as of 3/31/14

Number of Securities52
Average Market Capitalization $4.3 Bil
Price/Earnings (P/E) 18.6 x
Price/Book (P/B) 2.4 x
Beta 0.91
Alpha 3.48
Standard Deviation (Fund / MSCI World Index) 13.49/14.06

P/E ratio is a harmonic weighted average and is equal to a security’s market capitalization divided by it after-tax earnings over the most recent 12-month period.

P/B ratio is a harmonic weighted average and is equal to a security’s market capitalization divided by its book value.

Alpha is a statistical measurement that depicts the performance difference between a fund’s return and an underlying performance benchmark, given a fund’s level of volatility, measured by beta. The benchmark will always reflect an alpha of 0.00%. A positive alpha indicates a fund has performed better than its beta would predict in the stated period.

Beta is the measure of a fund’s sensitivity to an index. By definition, the beta of an index is 1.00. Any fund with a higher beta is more volatile than the index. Likewise, any portfolio with a lower beta will be less volatile than the index in the stated period.

Standard deviation is a measure of historical volatility that indicates the degree to which an investment’s returns fluctuate around its average return. Generally, a higher standard deviation indicates a more risky investment.

Average market capitalization is the geometric mean of the market capitalization s for all securities in a fund’s portfolio.

Weighted average coupon is calculated by weighting each bond’s coupon by its relative size in the portfolio.

Weighted average bond price is a weighted average of individual bond prices.

Weighted average option-adjusted duration is a weighted average which measures the sensitivity of the price (the value of principal), incorporating the expected duration-shortening effect of an embedded call provision, of a fixed-income investment to a change in interest rates. The larger the duration number, the greater the interest-rate risk for bond prices.

Average maturity is the length of time until the principal amount of a bond must be repaid.

Average effective duration measures the sensitivity of the price (value of principal) of a fixed income investment to a change in interest rates. The larger the duration number, the greater the interest rate risk for bond prices.

Current Distribution

View Distribution History
Ex-Date 12/24/13
Record Date 12/27/13
Payable Date 12/31/13
Distribution per Share $0.420000

The extent the Current Distribution is comprised of something other than Income, such as Return of Capital, please refer to the applicable Rule 19a-1 Notice found on the Fund's website under the Literature section. If the Current Distribution is comprised solely from Income, a Rule 19a-1 Notice will not be produced and posted.

Past performance is not a guarantee of future results.

INDEX METHODOLOGY

The Index methodology is published at www.standardandpoors.com. The Index is comprised of approximately 50 securities selected based on the relative importance of the global water industry within the company’s business model. The Index is designed to have a balanced representation from different segments of the water industry consisting of the following two clusters: 25 water utilities and infrastructure companies (water supply, water utilities, waste water treatment, water, sewer and pipeline construction, water purification, water well drilling, water testing) and 25 water equipment and materials companies (water treatment chemicals, water treatment appliances, pumps and pumping equipment, fluid power pumps and motors, plumbing equipment, totalizing fluid meters and counting devices) based upon Standard & Poor’s Capital IQ (“CIQ”) industry classification. To determine whether global demand for water is a major component of a company’s business, the Index Provider implements the following methodology:

  1. All companies in the CIQ database with the term “water” in their business description are identified.
  2. From the resulting list, companies not belonging to the two clusters of the water industry set forth earlier in this paragraph are excluded.
  3. Based on a review of CIQ business description and industry classification, companies are put into three groups:
    • Primary Set – Companies whose primary businesses are in the water industry. These are assigned an Exposure Score of 1.
    • Secondary Set – Companies which operate in multiple industries, but have significant exposure to the water industry. These are assigned an Exposure Score of 0.5.
    • Eliminated Set – Companies with marginal exposure to the water industry. These are assigned an Exposure Score of 0 and eliminated from consideration as Index constituents.

To ensure investability, a developed market listing and a minimum total market capitalization and float-adjusted market capitalization of at least $250 million and $100 million, respectively, is required. The Index is rebalanced semi-annually. No single stock may have a weight of more than 10% in the Index at each rebalancing.

INDEX CONSTRUCTION

  • All companies in S&P’s CIQ industry classification involved in the water industry are identified by S&P and scored based on relative exposure in the manner set forth above and classified into one of two clusters.
  • The companies are screened for those with a developed market listing and a total market capitalization and float-adjusted market capitalization of at least $250 million and $100 million, respectively.
  • 25 of the largest companies from each of the following two clusters: water utilities and infrastructure companies and water equipment and materials companies, are selected based on a proprietary scoring metric that defines the relative exposure to the global water industry.
  • The Index uses a modified market cap weighting methodology. No single stock may have a weight of more than 10% in the Index at each rebalancing.
  • Companies that are acquired or delisted are deleted intra-year. There are no intra-year additions.
  • The Index is reconstituted semi-annually effective after the close of business of the third Fridays of April and October of each year, with a reference date for the data being the last trading dates of the previous March and September, respectively.

RISKS AND OTHER CONSIDERATIONS

Investors should consider the following risk factors and special considerations associated with investing in the Fund, which may cause you to lose money.

Investment Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest.

Equity Risk. Equity risk is the risk that the value of the equity securities held by the Fund will fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests. For example, an adverse event, such as an unfavorable earnings report, may depress the value of equity securities of an issuer held by the Fund; the price of common stock of an issuer may be particularly sensitive to general movements in the stock market; or a drop in the stock market may depress the price of most or all of the common stocks and other equity securities held by the Fund. In addition, common stock of an issuer in the Fund’s portfolio may decline in price if the issuer fails to make anticipated dividend payments because, among other reasons, the issuer of the security experiences a decline in its financial condition. Common stock is subordinated to preferred stocks, bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater dividend risk than preferred stocks or debt instruments of such issuers. In addition, while broad market measures of common stocks have historically generated higher average returns than fixed income securities, common stocks have also experienced significantly more volatility in those returns.

Risk of Concentrating in the Water Industry. There are risks of concentrating in the water industry. Adverse developments in the water industry may significantly affect the value of the securities held by the Fund. Companies involved in the water industry are subject to environmental considerations, taxes, government regulation, price and supply fluctuations, competition and water conservation.

Industrial Products Sector Risk. The stock prices of companies in the industrial sector are affected by supply and demand both for their specific product or service and for industrial sector products in general. The products of manufacturing companies may face product obsolescence due to rapid technological developments and frequent new product introduction. Government regulation, world events and economic conditions may affect the performance of companies in the industrial sector. Companies in the industrial sector may be at risk for environmental damage and product liability claims.

Utilities Sector Risk. The rates that traditional regulated utility companies may charge their customers generally are subject to review and limitation by governmental regulatory commissions. Although rate changes of a utility usually fluctuate in approximate correlation with financing costs due to political and regulatory factors, rate changes ordinarily occur only following a delay after the changes in financing costs. This factor will tend to favorably affect a regulated utility company’s earnings and dividends in times of decreasing costs, but conversely, will tend to adversely affect earnings and dividends when costs are rising. The value of regulated utility debt securities (and, to a lesser extent, equity securities) tends to have an inverse relationship to the movement of interest rates. Certain utility companies have experienced full or partial deregulation in recent years. These utility companies are frequently more similar to industrial companies in that they are subject to greater competition and have been permitted by regulators to diversify outside of their original geographic regions and their traditional lines of business. These opportunities may permit certain utility companies to earn more than their traditional regulated rates of return. Some companies, however, may be forced to defend their core business and may be less profitable.

Among the risks that may affect utility companies are the following: risks of increases in fuel and other operating costs; the high cost of borrowing to finance capital construction during inflationary periods; restrictions on operations and increased costs and delays associated with compliance with environmental and nuclear safety regulations; and the difficulties involved in obtaining natural gas for resale or fuel for generating electricity at reasonable prices. Other risks include those related to the construction and operation of nuclear power plants; the effects of energy conservation and the effects of regulatory changes.

Foreign Investment Risk. The Fund’s investments in non-U.S. issuers may involve unique risks compared to investing in securities of U.S. issuers, including, among others, less market liquidity, generally greater market volatility than U.S. securities and less complete financial information than for U.S. issuers. In addition, adverse political, economic or social developments could undermine the value of the Fund’s investments or prevent the Fund from realizing the full value of its investments. Financial reporting standards for companies based in foreign markets differ from those in the United States. Finally, the value of the currency of the country in which the Fund has invested could decline relative to the value of the U.S. dollar, which may affect the value of the investment to U.S. investors. The Fund will not enter into transactions to hedge against declines in the value of the Fund’s assets that are denominated in a foreign currency. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities. Issuers of unsponsored depositary receipts are not contractually obligated to disclose material information in the U.S. and, therefore, such information may not correlate to the market value of the unsponsored depositary receipt.

Small and Medium-Sized Company Risk. Investing in securities of small and medium-sized companies involves greater risk than is customarily associated with investing in more established companies. These companies’ securities may be more volatile and less liquid than those of more established companies. These securities may have returns that vary, sometimes significantly, from the overall stock market.

Non-Correlation Risk. The Fund’s return may not match the return of the Index for a number of reasons. For example, the Fund incurs a number of operating expenses not applicable to the Index, and incurs costs in buying and selling securities, especially when rebalancing the Fund’s securities holdings to reflect changes in the composition of the Index.

The Fund may not be fully invested at times, either as a result of cash flows into the Fund or reserves of cash held by the Fund to meet redemptions and expenses. If the Fund utilizes a sampling approach or otherwise holds investments other those which comprise the Index, its return may not correlate as well with the return on the Index, as would be the case if it purchased all of the securities in the Index with the same weightings as the Index.

Concentration Risk. If the Index concentrates in an industry or group of industries the Fund’s investments will be concentrated accordingly. In such event, the value of the Fund’s Shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries.

Replication Management Risk. Unlike many investment companies, the Fund is not “actively” managed. Therefore, it would not necessarily sell a security because the security’s issuer was in financial trouble unless that security is removed from the Index.

Issuer-Specific Changes. The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. The value of securities of smaller issuers can be more volatile than that of larger issuers.

Non-Diversified Fund Risk. The Fund is considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund.

The Fund’s Shares will change in value, and you could lose money by investing in the Fund. The Fund may not achieve its investment objective. An investment in the Fund has not been guaranteed, sponsored, recommended, or approved by the United States, or any agency, instrumentality or officer of the United States, has not been insured by the Federal Deposit Insurance Corporation (FDIC) and is not guaranteed by and is not otherwise an obligation of any bank or insured depository institution.

As with any investment, you should consider how your investment will be taxed. The tax information contained in the prospectus is provided as general information. Investors should consult their own tax professional about the tax consequences of an investment as Guggenheim Funds Distributors, LLC,  does not offer tax advice.

The Fund will issue and redeem Shares at NAV only in a large specified number of Shares called a “Creation Unit” or multiples thereof. A Creation Unit consists of 80,000 Shares. The Fund generally issues and redeems Creation Units principally in-kind. Except when aggregated in Creation Units, the Shares are not redeemable securities of the Fund. Individual Shares of the Fund may only be purchased and sold in secondary market transactions through brokers. Shares of the Fund are listed for trading on NYSE Arca, Inc. (“NYSE Arca”) and because Shares trade at market prices rather than NAV, Shares of the Fund may trade at a price greater than or less than NAV.

Investors buying or selling ETF shares on the secondary market may incur brokerage costs and other transactional fees. Shares of ETFs will fluctuate in price due to daily changes in trading volume. At times, shares may not have a high volume of trading.

Standard & Poor’s® and S&P® are registered trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Guggenheim Funds Investment Advisors, LLC. The Guggenheim S&P Global Water Index ETF is not sponsored, endorsed, sold or promoted by S&P and S&P makes no representation, warranty or condition regarding the advisability of investing in the Guggenheim S&P Global Water Index ETF.

The referenced fund is distributed by Guggenheim Funds Distributors, LLC. Guggenheim Investments represents the investment management business of Guggenheim Partners, LLC ("GP"), which includes Guggenheim Funds Investment Advisors ("GFIA"), the investment advisers to the referenced fund. Guggenheim Funds Distributors, LLC is affiliated with GP and GFIA.

 

Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or contact us.

Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC ("Guggenheim"), which includes Security Investors, LLC ("SI"), Guggenheim Funds Investment Advisors, LLC, ("GFIA") and Guggenheim Partners Investment Management ("GPIM") the investment advisers to the referenced funds. Securities offered through Guggenheim Funds Distributors, LLC, an affiliate of Guggenheim, SI, GFIA and GPIM.

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• Not FDIC Insured • No Bank Guarantee • May Lose Value