Fund Summary

The Guggenheim Frontier Markets ETF (NYSE:FRN), seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called BNY Mellon New Frontier DR Index (the “Frontier Index”). The Fund will invest at least 80% of its total assets in American depositary receipts ("ADRs") and global depositary receipts ("GDRs") that comprise the Index or in the stocks underlying such ADRs and GDRs. The Fund also will normally invest at least 80% of its total assets in securities of issuers from Frontier Market countries (whether directly or through ADRs or GDRs), as defined by BNY Mellon, the Fund's index provider, from time to time in the manner set forth in the "Principal Investment Strategies" section of the fund's prospectus. 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, will seek to replicate, before fees and expenses, the performance of the Frontier Index. The Frontier Index tracks the performance of depositary receipts, in ADR or GDR form, that trade on the London Stock Exchange (“LSE”), New York Stock Exchange (“NYSE”), NYSE Arca, Inc. (“NYSE Arca”), NYSE AMEX, and Nasdaq Stock Market (“NASDAQ”) of companies from countries that are defined as the “Frontier Market.” The Index Provider defines Frontier Market countries based upon an evaluation of gross domestic product growth, per capita income growth, experienced and expected inflation rates, privatization of infrastructure and social inequalities.

Top Fund Holdings

as of 11/25/14 View All Holdings
YPF S.A.-SPONSORED ADR 8.66 %
ENERSIS S.A. -SPONS ADR 8.16 %
BANCOLOMBIA S.A.-SPONS ADR 7.96 %
ECOPETROL SA-SPONSORED ADR 7.69 %
COMMERCIAL INTL BANK-GDR REG 4.95 %
GUARANTY TRUST BANK-GDR REGS 4.91 %
EMPRESA NAC ELEC-CHIL-SP ADR 4.81 %
LATAM AIRLINES GROUP-SP ADR 4.71 %
BANCO SANTANDER-CHILE-ADR 4.60 %
CENCOSUD SA - ADR 4.18 %

TOP FUND GEOGRAPHIC WEIGHTINGS

as of 9/30/14

Geographic Weighting
Chile 37.63 %
Colombia 17.18 %
Argentina 15.84 %
Egypt 7.22 %
Nigeria 6.31 %
Kazakhstan 5.51 %
Peru 5.22 %
Lebanon 1.66 %
United Kingdom 0.72 %
Luxembourg 0.49 %

TOP FUND SECTORS

as of 9/30/14

SECTOR WEIGHTING
Financials 38.40 %
Energy 22.49 %
Utilities 12.40 %
Consumer Staples 9.53 %
Industrials 6.42 %
Materials 6.39 %
Telecommunication Services 4.22 %

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 FRN
Exchange NYSE Arca
NAV Symbol (IIV) FRNIV
CUSIP 18383Q838
Fund Inception Date 6/12/08
Distribution Schedule (if any) Annually
Gross Expense Ratio 0.81 %
Net Expense Ratio 0.71 %
Fiscal Year-End 5/31
Investment Adviser Guggenheim Funds Investment Advisors, LLC
Distributor Guggenheim Funds Distributors, LLC
BNY Mellon New Frontier DR IndexBKNFR
Index Provider The Bank of New York Mellon

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 16, 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 11/25/14 Price History
  MARKET PRICE NAV
Close $15.61 $15.67
Change ($0.11) ($0.11)
52-Week High $17.67 $17.60
52-Week Low $14.30 $14.23
Bid/Ask Midpoint $17.43
Bid/Ask Premium (Discount) 11.23 %
Volume 58,299
Shares Outstanding 5,140,000
Total Managed Assets $80,565,081

Fund Characteristics

as of 9/30/14

Number of Securities38
Average Market Capitalization $14.2 Bil
Price/Book (P/B) 0.6 x
Beta 0.85
Alpha -5.31
Standard Deviation (Fund / MSCI EM Index) 16.76/16.76

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 $0.647000

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 tracks the performance of depositary receipts in ADR or GDR form that trade on the LSE, NYSE, NYSE Arca, NYSE AMEX and NASDAQ of companies from countries that are part of the Frontier Market, as defined by the Index Provider. The Index Provider currently defines the Frontier Market countries as: Argentina, Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates, Egypt, Ghana, Kenya, Malawi, Mauritius, Morocco, Nigeria, Tunisia, Zimbabwe, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Kazakhstan, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia, Ukraine, Bangladesh, Pakistan, Papua New Guinea, Sri Lanka, Vietnam, Peru, Chile, Colombia, Ecuador, Jamaica, Panama and Trinidad & Tobago. The universe of potential constituents includes all liquid ADRs and GDRs which meet the criteria below with respect to trading volume and market capitalization. 

INDEX CONSTRUCTION

  1. The Index consists of all ADRs and GDRs of companies from Argentina, Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates, Egypt, Ghana, Kenya, Malawi, Mauritius, Morocco, Nigeria, Tunisia, Zimbabwe, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Kazakhstan, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia, Ukraine, Bangladesh, Pakistan, Papua New Guinea, Sri Lanka, Vietnam, Peru, Chile, Colombia, Ecuador, Jamaica, Panama and Trinidad & Tobago that meet the following criteria:
    • Minimum 10 days traded in each month for the previous 3 months and average daily ADR or GDR volume greater than or equal to $100,000. The inclusion of an ADR or GDR in the Index based on local share liquidity will be determined on a case-by-case basis and the local share volume must pass the same minimum requirements as the ADR or GDR.
    • Free-float adjusted market capitalization greater than or equal to $100 million.
    • To improve the investability of the Index and avoid adverse tax consequences for investors, passive foreign investment companies are excluded based on the best information available (such as information available through the Investment Company Institute and publicly available filings).
  2. The ADR Index Administrator, subject to periodic review by a policy steering committee known as the BNY Mellon ADR Index Committee, performs a quarterly review of the Index methodology. Any changes to the methodology will be publicly disclosed prior to implementation of the change.
  3. The Index is weighted based on a modified capitalization method, using a formula based upon the aggregate of prices times share quantities. The number of shares used in the Index calculation generally represents the entire class(es) or series of shares, adjusted for free-float, that trade in the local market and also trade in the form of depositary receipts in the United States and the United Kingdom. Adjustments are made to ensure that no single security exceeds 10% of the Index and, with respect to the bottom 55% of the Index weight, that no single security represents more than 4.5% of the Index.
  4. The Index is adjusted for changes in shares and float that may affect the weighting of constituents generally on a quarterly basis.

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 may involve unique risks compared to investing in securities of U.S. issuers, including 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.

Risks of Investing in Frontier securities: Frontier Market countries are emerging market countries. Investment in securities in emerging market countries involves risks not associated with investments in securities in developed countries, including risks associated with expropriation and/or nationalization, political or social instability, armed conflict, the impact on the economy as a result of civil war, religious or ethnic unrest and the withdrawal or non-renewal of any license enabling the fund to trade in securities of a particular country, confiscatory taxation, restrictions on transfers of assets, lack of uniform accounting, auditing and financial reporting standards, less publicly available financial and other information, diplomatic development which could affect U.S. investments in those countries and potential difficulties in enforcing contractual obligations. Frontier countries generally have smaller economies or less developed capital markets than traditional emerging markets, and, as a result, the risks of investing in emerging market countries are magnified in frontier countries.

Political Risk: Certain of the frontier countries may be subject to a greater degree of political and social instability than is the case in more developed countries.

Licensing, Custody and settlement Risk: Approval of governmental authorities may be required prior to investing in the securities of companies based in certain frontier countries. Delays in obtaining such an approval would delay investments in the particular country. Certain banks in foreign countries that are eligible foreign sub-custodians may lack extensive operating experience, and there may be legal restrictions or limitations on the ability of the fund to recover assets held in custody by a foreign sub-custodian in the event of the bankruptcy of the sub-custodian. Because settlement systems may be less well organized than in developed markets, there may be a risk of delayed settlements and that cash or securities of the fund may be in jeopardy because of failures of or defects in the systems.

Financial Services Sector Risk: The financial services industries are subject to extensive government regulation, can be subject to relatively rapid change due to increasingly blurred distinctions between service segments, and can be significantly affected by availability and cost of capital funds, changes in interest rates, the rate of corporate and consumer debt defaults, and price competition. In addition, the deterioration of the credit markets since late 2007 generally has caused an adverse impact in a broad range of markets, including U.S. and international credit and interbank money markets generally, thereby affecting a wide range of financial institutions and markets.

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.

Micro-Cap Company Risk: Micro-cap securities 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. In addition the fund is subject to Non-Correlation Risk, Replication Management Risk, Issuer-Specific Changes and Non-Diversified fund Risk.

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 50,000 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 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 may fluctuate in price due to daily changes in trading volume. At times, shares may not have a high volume of trading.

“BNY Mellon” and “The Bank of New York Mellon New Frontier DR Index” are service marks of The Bank of NewYork Corporation (the “Bank”) and have been licensed for use for certain purposes by the Investment Adviser.

The Guggenheim Frontier Markets ETF and its Shares are not sponsored, endorsed, sold, recommended or promoted by the Bank or any of its subsidiaries or affiliates, and none of the Bank or any of its subsidiaries or affiliates makes any representation or warranty, express or implied, to the shareholders of the Fund or any member of the public regarding the advisability of investing in financial products generally or in the Fund particularly, the ability of The Bank of New York Mellon New Frontier DR Index to track market performance or the suitability or appropriateness of the Fund for shareholders of the Fund or such member of the public.The relationship between the Bank, on one hand, and Guggenheim Funds, on the other, is limited to the licensing of certain trademarks, trade names and the Index, which is determined, composed and calculated by the Bank or its agent without regard to Guggenheim Funds or the Fund. Neither the Bank nor any of its subsidiaries or affiliates has any obligation to take the needs of Guggenheim Funds or the shareholders of the Fund into consideration in determining, composing or calculating The Bank of New York Mellon New Frontier DR Index. Neither the Bank nor any of its subsidiaries or affiliates is responsible for, or has participated in, the determination of the timing of, prices at, or quantities of the products to be issued or in the determination or calculation of the equation by which the Fund is to be converted into cash. Neither the Bank nor any of its subsidiaries or affiliates has any obligation or liability in connection with the administration, marketing or trading of the Fund.

None of the Investment Adviser, the Bank or any of its subsidiaries or affiliates guarantees the accuracy or completeness of the Index or any data included therein, and none of the Investment Adviser, the Bank or any of its subsidiaries or affiliates shall have any liability for any errors, omissions or interruptions therein. None of the Investment Adviser, the Bank or any of its subsidiaries or affiliates makes any warranty, express or implied, as to results to be obtained by the Fund, owners of the Shares of the Fund or any other person or entity from the use of the Index or any data included therein. None of the Investment Adviser, the Bank nor any of its subsidiaries or affiliates makes any express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Index or any data included therein.Without limiting any of the foregoing, in no event shall the Investment Adviser, the Bank or any of its subsidiaries or affiliates have any liability for any special, punitive, direct, indirect or consequential damages (including, without limitation, lost profits) arising out of matters relating to the use of the Index, even if notified of the possibility of such damages.

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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