Fund Summary

The Guggenheim Solar ETF (NYSE:TAN), seeks investment results that correspond generally to the performance, before the Fund’s fees and expenses, of an equity index called the MAC Global Solar Energy Index (the “Index”). The Fund will invest at least 90% of its total assets in common stock, American depositary receipts ("ADRs") and global depositary receipts ("GDRs") that comprise the Index and depositary receipts representing common stocks included in the Index (or underlying securities representing ADRs and GDRs 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 a 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 Mac Global Solar Energy Index. The Index is designed to track companies within the following business segments of the solar energy industry: companies that produce solar power equipment and products for end-users, companies that produce fabrication products (such as the equipment used by solar cell and module producers to manufacture solar power equipment) or services (such as companies specializing in the solar cell manufacturing or the provision of consulting services to solar cell and module producers) for solar power equipment producers, companies that supply raw materials or components to solar power equipment producers or integrators; companies that derive a significant portion of their business (measured in the manner set forth below under “Index Methodology" section) from solar power system sales, distribution, installation, integration or financing; and companies that specialize in selling electricity derived from solar power. The Index is currently comprised of approximately 22 securities selected based upon the relative importance of solar power within the company’s business model, as determined by MAC Indexing LLC ("MAC").

Top Fund Holdings

as of 10/1/14 View All Holdings
FIRST SOLAR, INC. 9.52 %
SUNEDISON INC 9.15 %
GCL-POLY ENERGY HOLDINGS LTD 8.61 %
HANERGY SOLAR GROUP LTD 7.20 %
SOLARCITY CORP 6.59 %
SUNPOWER CORP 5.12 %
XINYI SOLAR HOLDINGS LTD 4.16 %
CANADIAN SOLAR INC 3.97 %
MEYER BURGER TECHNOLOGY AG 3.75 %
TRINA SOLAR LTD-SPON ADR 3.37 %

TOP FUND GEOGRAPHIC WEIGHTINGS

as of 6/30/14

Geographic Weighting
United States 42.34 %
China 28.35 %
Hong Kong 14.23 %
Norway 6.38 %
Switzerland 4.05 %
Germany 3.08 %
Canada 1.57 %

TOP FUND SECTORS

as of 6/30/14

SECTOR WEIGHTING
Information Technology 83.98 %
Industrials 16.11 %

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 TAN
Exchange NYSE Arca
NAV Symbol (IIV) TANIV
CUSIP 18383Q739
Fund Inception Date 4/15/08
Distribution Schedule (if any) Annually
Gross Expense Ratio 0.86 %
Net Expense Ratio 0.70 %
Fiscal Year-End 8/31
Investment Adviser Guggenheim Funds Investment Advisors, LLC
Distributor Guggenheim Funds Distributors, LLC
MAC Global Solar Energy IndexSUNIDX
Index Provider MAC Indexing LLC

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 10/1/14 Price History
  MARKET PRICE † NAV †
Close $39.41 $39.69
Change ($1.24) ($1.11)
52-Week High $50.24 $50.03
52-Week Low $33.65 $33.78
Bid/Ask Midpoint $39.42
Bid/Ask Premium (Discount) -0.69 %
Volume 246,022
Shares Outstanding 9,688,000
Total Managed Assets $384,485,958

Fund Characteristics

as of 6/30/14

Number of Securities30
Average Market Capitalization $3.1 Bil
Price/Earnings (P/E) 12.9 x
Price/Book (P/B) 2.3 x
Beta 2.52
Alpha -26.43
Standard Deviation (Fund / MSCI World Index) 52.30/22.00

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 $0.451000

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 CONSTRUCTION

The Index methodology is published at www.macsolarindex.com. The Index is designed to track companies within the following business segments of the solar power industry: solar power equipment producers; suppliers of materials or services to solar equipment producers; companies that derive a significant portion of their business, measured by the methodology set forth below, from solar power system installation, integration or finance; and companies that specialize in selling electricity derived from solar power. As defined by the Index Provider, solar power includes two main categories:

  1. Solar photovoltaic power, which involves the conversion of sunlight into electricity through the photovoltaic process; and
  2. Thermal solar power, which involves using energy from the sun to heat fluids for purposes of water or space heating or to produce electricity.

The Index is currently comprised of approximately 33 securities selected based upon the relative importance of solar power within the company’s business model. To determine whether solar power is a major component of a company’s business, the Index Provider implements the following methodology.

  1. All global publicly-traded companies with any connection to the solar industry are identified by company description database searches and bottom-up industry research of publicly available information and databases.
  2. Based on a review of the company’s public filings and company description information, companies that are identified through the initial search are put into three groups (the “Exposure Factor”):
    • Pure-Play Group—Companies that generate in excess of two thirds of their revenue from solar related business are considered to have their primary business in the solar industry and are placed in the Pure-Play Group. These are assigned an Exposure Factor of 1.0.
    • Medium-Play Group—Companies that operate in multiple industries, but have significant exposure to the solar industry-defined as generating less than approximately two thirds but more than approximately one third of their revenue from solar related business, are placed in the Medium-Play Group. These are assigned an Exposure Factor of 0.5.
    • Eliminated Group—Companies with marginal exposure to the solar industrydefined as generating less than approximately one third of their revenue from solar related business, are eliminated from consideration as an Index constituent.
  3. From the securities in the Pure-Play Group and Medium-Play Group, securities eligible for inclusion in the Index must be listed on a developed market exchange, as defined above, have a minimum market capitalization greater than or equal to $150 million at the reference date preceding each reconstitution and have a minimum 3 month average daily trading value of $2 million at the reference date preceding each reconstitution. Securities in the Primary and Secondary set that do not meet these criteria are excluded from consideration as an Index constituent.

INDEX CONSTRUCTION

The Index is constructed as follows:

  1. Index constituents are selected using the methodology described above.
  2. The weighting of Index constituents on the rebalancing and reconstitution date is determined as follows:
    1. The full market capitalization for each security is multiplied by its Exposure Factor of either 1.0 and 0.5, meaning the market capitalization for the securities in the Pure-Play Group is taken at full value and for the Medium-Play Group is reduced by one half.
    2. The resulting adjusted market capitalizations are used to create a standard market capitalization weighted index with raw weighting factors.
    3. If necessary, the raw weighting factors are modified through a weighting-gap rebalancing algorithm to ensure that, at the time of rebalancing and reconstitution, no security in the Index has an individual weighting greater than 20% and that the aggregate weighting of securities in the Index with individual weightings of more than 4.5% is no more than 45.0% of the total Index. The weighting-gap rebalancing algorithm progressively reduces the weighting gap between adjacent securities, as ranked by their raw weighting factors, on a proportional basis, until the weighting parameters specified above are met.
  3. Any company in the Index that is acquired or delisted is removed from the Index at the time the event becomes effective, and will not be replaced. If a security is considered to be illiquid, or if a company has filed for bankruptcy, the security will be deleted from the Index immediately and will not be replaced. Any spin-off from an existing Index constituent will automatically be included in the Index. Continued inclusion in the Index is dependent upon whether the spun-off company meets the standard Index criteria at the time of the next quarterly reconstitution.
  4. A company that recently completed an initial public offering (“IPO”) and that meets the criteria above can be considered for inclusion as an Index constituent only at the quarterly Index rebalance and reconstitution, and only after the security has completed at least three (3) months of trading history.
  5. The Index will be rebalanced and reconstituted quarterly on the third Friday of the last month of each calendar quarter, with a reference date for the data being the first business day of the last month of the calendar quarter. At the quarterly Index reconstitution:
    1. securities may be added or deleted as Index constituents according to the criteria defined above,
    2. the Exposure Factor may change based on a shift in a company’s relative exposure to the solar industry, and
    3. constituent weightings may be adjusted to reflect a change in the Exposure Factor for a particular stock, the addition or deletion of Index constituents and/or the need to meet the specified diversification requirements.

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.

Solar Energy Industry Risk. Prices of energy (including traditional sources of energy such as oil, gas, or electricity) or alternative energy may decline. The alternative energy industry can be significantly affected by obsolescence of existing technology, short product lifecycles, falling prices and profits, competition from new market entrants and general economic conditions. This industry can also be significantly affected by fluctuations in energy prices and supply and demand of alternative energy fuels, energy conservation, the success of exploration projects and tax and other government regulations and policies. Companies in this industry could be adversely affected by commodity price volatility, imposition of import controls, increased competition, depletion of resources, technological developments and labor relations. The solar energy industry has experienced an industrywide shortage of polysilicon, which may place constraints on the revenue growth of solar energy companies and decrease such companies’ productivity. Solar energy companies may not be able to secure an adequate and cost-effective supply of solar wafers, cells or reclaimable silicon. If government subsidies and economic incentives for solar power are reduced or eliminated, the demand for solar energy may decline and cause corresponding declines in the revenues and profits of solar energy companies. Existing regulations and policies, and changes to such regulations and policies, may present technical, regulatory and economic barriers to the purchase and use of solar power products, thus reducing demand for such products. If solar power technology is not suitable for widespread adoption, or sufficient demand for solar power products does not develop or takes long periods of time to develop, the revenues of solar power companies may decline.

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, 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.

Emerging market countries are countries that major international financial institutions, such as the World Bank, generally consider to be less economically mature than developed nations. Emerging market countries can include every nation in the world except the United States, Canada, Japan, Australia, New Zealand and most countries located in Western Europe. Investing in foreign countries, particularly emerging market countries, entails the risk that news and events unique to a country or region will affect those markets and their issuers. Countries with emerging markets may have relatively unstable governments, may present the risks of nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets. The economies of emerging markets countries also may be based on only a few industries, making them more vulnerable to changes in local or global trade conditions and more sensitive to debt burdens or inflation rates. Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of holdings difficult or impossible at times.

Small or Medium-Sized Company Risk. Investing in securities of small or 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.

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. Micro-cap companies may be newly formed or in the early stages of development, with limited product lines, markets or financial resources and may lack management depth. In addition, there may be less public information available about these companies. The shares of micro-cap companies tend to trade less frequently than those of larger, more established companies, which can adversely affect the pricing of these securities and the future ability to sell these securities. Also, it may take a long time before the Fund realizes a gain, if any, on an investment in a micro-cap company.

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 than 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. Even though no single security weight may exceed 4.5% of the Index at the time of each quarterly rebalance, changes in the market value of the Index’s constituent securities may result in the Fund being invested in the securities of individual issuers (and making additional such investments in the case of creations of additional Creation Units) in greater proportions. 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 may fluctuate in price due to daily changes in trading volume. At times, shares may not have a high volume of trading.

The Fund is not sponsored, endorsed, sold or promoted by MAC Indexing LLC (“Licensor”). Licensor makes no representation or warranty, express or implied, regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the MAC Global Solar Power Index (“Index”) to track general market performance. Licensor’s only relationship to the Licensee is the licensing of the Index which is determined, composed and calculated by Licensor without regard to the Licensee or the Fund. Licensor has no obligation to take the needs of the Licensee or the owners of the Fund into consideration in determining, composing or calculating the Index. Licensor shall not be liable to any person for any error in the Index nor shall it be under any obligation to advise any person of any error therein.

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.

2014 Guggenheim Investments. All Rights Reserved.
• Not FDIC Insured • No Bank Guarantee • May Lose Value