Fund Summary

The Guggenheim Spin-Off ETF (NYSE Arca: CSD), seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the Beacon Spin-off Index (the “Spin-off Index” or “Index”). The Fund will invest at least 90% of its total assets in common stock, American depositary receipts ("ADRs") and master limited partnerships ("MLPs") that comprise the Index and depositary receipts representing common stocks included in the Index (or underlying securities representing ADRs included in the Index). 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 Spin-off Index. The Spin-off Index is comprised of a broad universe of U.S.-traded stocks, ADRs and MLPs. The universe of companies eligible for inclusion in the Index includes companies that have been spun-off within the past 30 months (but not more recently than six months prior to the applicable rebalancing date), without limitations on market capitalization (including micro-cap securities), but which are primarily small- and mid-cap companies with capitalizations under $10 billion. Beacon Indexes LLC (“Beacon” or the “Index Provider”) defines a spin-off company as any company resulting from either of the following events: a spin-off distribution of stock of a subsidiary company by its parent company to parent company shareholders or equity “carve-outs” or “partial initial public offerings” in which a parent company sells a percentage of the equity of a subsidiary to public shareholders.

Top Fund Holdings

as of 10/31/14 View All Holdings
MALLINCKRODT PLC 5.71 %
ZOETIS INC 5.48 %
WHITEWAVE FOODS CO 5.38 %
ABBVIE INC 5.35 %
BROOKFIELD PROPERTY PARTNERS 5.23 %
ADT CORP/THE 5.05 %
CST BRANDS INC 4.86 %
MURPHY USA INC 4.56 %
ALLEGION PLC 4.55 %
KRAFT FOODS GROUP INC 4.45 %

TOP FUND SECTORS

as of 6/30/14

SECTOR WEIGHTING
Consumer Discretionary 24.45 %
Financials 14.98 %
Health Care 14.57 %
Industrials 12.64 %
Energy 12.63 %
Consumer Staples 12.50 %
Oil & Gas Exploration & Production 7.46 %
Oil & Gas Refining & Marketing 4.25 %
Materials 4.06 %
Information Technology 3.44 %

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.

* Morningstar category is based on the underlying securities of the ETF and not the objective. The Morningstar Rating™ is provided for those exchange-traded funds (“ETFs”) with at least a three-year history. Ratings are based on the ETF’s Morningstar Risk-Adjusted Return measure which accounts for variation in monthly performance, placing more emphasis on downward variations and rewarding consistent performance. An ETF’s risk-adjusted return includes a brokerage commission estimate. This estimate is intended to reflect what an average investor would pay when buying or selling an ETF. PLEASE NOTE, this estimate is subject to change and the actual brokerage commission an investor pays may be higher or lower than this estimate. Morningstar compares each ETF’s risk-adjusted return to the open-end mutual fund rating breakpoints for that category. Consistent with the open-end mutual fund ratings, the top 10% of ETFs in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The overall rating for an ETF is based on a weighted average of the time-period ratings (e.g., the ETF’s 3-, 5-, and 10-year rating). The determination of an ETF’s rating does not affect the retail open end mutual fund data published by Morningstar. Past performance is no guarantee of future results.

Overall Morningstar RatingTM *

as of 9/30/14

Among Mid-Cap Blend Funds

This Fund was rated, based on its risk-adjusted returns, 5 stars for 3 years, 5 stars for 5 years, and 5 stars Overall out of 22, 16 and 22 Mid-Cap Blend funds, respectively

Fund Profile

Symbol CSD
Exchange NYSE Arca
NAV Symbol (IIV) CSDIV
CUSIP 18383M605
Fund Inception Date 12/15/06
Distribution Schedule (if any) Annually
Gross Expense Ratio 0.78 %
Net Expense Ratio 0.65 %
Fiscal Year-End 8/31
Investment Adviser Guggenheim Funds Investment Advisors, LLC
Distributor Guggenheim Funds Distributors, LLC
Beacon Spin-Off IndexCLRSO
Index Provider Beacon Indexes

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 10/31/14 Price History
  MARKET PRICE NAV
Close $45.86 $45.83
Change $0.35 $0.31
52-Week High $46.85 $46.82
52-Week Low $41.52 $41.59
Bid/Ask Midpoint $46.14
Bid/Ask Premium (Discount) 0.68 %
Volume 79,324
Shares Outstanding 12,550,000
Total Managed Assets $575,223,532

Fund Characteristics

as of 6/30/14

Number of Securities34
Average Market Capitalization $12.4 Bil
Price/Earnings (P/E) 20.3 x
Price/Book (P/B) 2.0 x
Beta 1.00
Alpha 6.70
Standard Deviation (Fund / S&P 500 Index) 14.96/12.26

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 $0.085000

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 Spin-Off Index selection methodology is designed to identify companies with potentially superior risk/return profiles as determined by Beacon. The Index is designed to actively represent the stock of a group of companies that have recently been spun-off from larger corporations and have the opportunity to better focus on their core market segment and outperform, on a risk-adjusted basis, the Russell 2000(R) Small Cap Index and other small-cap-oriented benchmark indices. The Index constituent selection methodology was developed by Beacon as a quantitative approach to selecting stocks from a universe of all spin-off companies. The Index constituent selection model evaluates and selects stocks from a universe of recently spun-off companies using a proprietary, 100% rules-based methodology developed by Beacon. The Index constituent selection methodology utilizes multi-factor proprietary selection rules to seek to identify those stocks that offer the greatest potential from a risk/return perspective while maintaining industry diversification. The Index is adjusted semi-annually, however, if there are not enough new Spinoffs to populate the index, a rebalance may be delayed.

INDEX CONSTRUCTION

  1. Potential Index constituents include all equities trading on major U.S. exchanges of companies that were spun-off during the two year period beginning 30 months prior to reconstitution and ending 6 months prior to reconstitution. This time frame may be extended to compensate for periods where there are too few new spinoffs to populate the index.
  2. The Spin-Off Index is comprised of up to the 40 highest-ranking stocks chosen from the universe of spun-off companies.
  3. Each company is ranked using a 100% quantitative rules-based methodology that includes composite scoring of several growth-oriented, multi-factor filters, and is sorted from highest to lowest.
  4. Up to 40 stocks are chosen and given a modified market cap weighting with a maximum weight of 5%.
  5. The constituent selection process and portfolio rebalance is repeated semi-annually, however, if there are not enough new Spinoffs to populate the index, a rebalance may be delayed.

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, including the entire principal amount that you invest.

Equity Risk: 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.

Foreign Investment Risk: The fund’s investments in non-U.S. issuers, although generally limited to ADRs, may involve unique risks compared to investing in securities of U.S. issuers, including less market liquidity, generally greater market volatility than U.S. securities and less complete financial information than for U.S. issuers.

Consumer Discretionary Sector Risk: The success of consumer product manufacturers and retailers is tied closely to the performance of the overall domestic and international economy, interest rates, competitive and consumer confidence. Success depends heavily on disposable household income and consumer spending. Changes in demographics and consumer tastes can also affect the demand for, and success of, consumer products in the marketplace.

Computer/Technology Sector Risk: Competitive pressures may have a significant effect on the financial condition of companies in the computer/technology sector. Also, many of the products and services offered by computer and technology companies are subject to the risks of short product cycles and rapid obsolescence.

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 larger, more established companies.

Micro-Cap Company Risk: Micro-cap stocks involve substantially greater risks of loss and price fluctuations because their earnings and revenues tend to be less predictable (and some companies may be experiencing significant losses), and their share prices tend to be more volatile and their markets less liquid than companies with larger market capitalizations.

MLP Risk: Investments in securities of MLPs involve risks that differ from an investment in common stock. Holders of the units of MLPs have more limited control and limited rights to vote on matters affecting the partnership. There are also certain tax risks associated with an investment in units of MLPs.

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 abroader range of industries. In addition the fund is subject to Non-Correlation Risk, Replication Management Risk, Issuer- Specific Changes and Non-Diversified fund Risk.

© 2014 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

 

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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