Rydex Dynamic FDS, Inverse Russell 2000 2X Strategy Fund CL C · NASDAQ:RYIZX
Rydex Dynamic FDS, Inverse Russell 2000 2X Strategy Fund CL C — Guggenheim Investments — Investor Presentation (July 2015)
25 slides from Rydex Dynamic FDS, Inverse Russell 2000 2X Strategy Fund CL C's investor presentation, July 2015
Slide 1: Macro Market Perspectives
Guggenheim Investments Macro Market Perspectives Anne N. Mathias, CFA Managing Director, Senior Macro Strategist July 2015
Slide 2: U.S. Recovered Faster than Other Advanced Economies
U.S. Recovered Faster than Other Advanced Economies Normalized Real GDP Since the Beginning of the Global Recession 110 U.S., up 8.7% 105 U.K., Real GDP Level at Dec. 2007 =- 100 up 4.3% Japan, up 0.6% 100 Euro Zone, down 0.9% 95 90 Dec-2007 Dec-2008 Dec-2009 Dec-2010 Dec-2011 Dec-2012 Dec-2013 Dec-
Slide 3: Leading Indicators Suggest No U.S. Recession Ahead
Leading Indicators Suggest No U.S. Recession Ahead The Conference Board Leading Economic Index and U.S. Recessions 15% 0.5 0.45 10% 0.4 5% 0.35 0% 0.3 -5% 0.25 0.2 -10% 0.15 -15% 0.1 -20% 0.05 -25% 0 Recession Leading Economic Index, YoY% Change Source: Bloomberg, Guggenheim Investments. Data as of
Slide 4: Supply and Demand Suggest Stability in Home Prices
Supply and Demand Suggest Stability in Home Prices Home Price Appreciation (1-Year Forward) and Model 20% 15% HPA multi-factor regression model using housing supply and demand factors 10% 5% 0% -5% YoY Home Price Appreciation, Not Seasonally Adjusted -10% (1-Year Forward) -15% 1999 2001 2003 2005 20
Slide 5: Wages May Be About to Accelerate
Wages May Be About to Accelerate Growth in U.S. Average Hourly Earnings* vs. Percent of Small Business Firms with Positions Not Able to Fill Right Now 35% 4.5% 30% 4.0% 25% 3.5% 20% 3.0% 15% 2.5% 10% 2.0% Percent of Firms with Positions Not Able to Fill Right Now (LHS, 3MMA, 12-Month Lead) 5% Averag
Slide 6: Oil Oversupply Continues, Low Gas Prices Support Spending
Oil Oversupply Continues, Low Gas Prices Support Spending Normalized Crude Oil Prices (WTI) During Periods of Major Decline 110 100 1997-1998 90 1987-1988 Normalized at Peak = 100 80 70 60 Current 50 1985-1986 40 30 20 0 26 52 78 104 130 156 Weeks after Peak Source: Haver Analytics, Bloomberg, Gugge
Slide 7: Consumer Confidence High, Debt Service Low
Consumer Confidence High, Debt Service Low U.S. Household Debt Service Ratio and Consumer Confidence 15% 150% 14% 100% 13% 50% 12% 0% 11% -50% The household debt 10% -100% service ratio is among the lowest in over 30 years 9% -150% 1985 1990 1995 2000 2005 2010 2015 U.S. Recession Household Debt Ser
Slide 8: Janet Yellen's Dashboard – Still Not Pegged
Janet Yellen’s Dashboard – Still Not Pegged Gauges of Five Labor Market Indicators and PCE Inflation Current: Median at Historical Current: Median at Historical Current: Median at Historical 5.5% Rate Hikes: 6.2% 1.2% Rate Hikes: 1.0% 2.0% Rate Hikes: 3.5% Max: 10.4% Min: 3.8% Max: 1.8% Min: 0.7% Mi
Slide 9: Citigroup Economic Surprise Indices Turning Up in U.S., Down in Europe
Citigroup Economic Surprise Indices Turning Up in U.S., Down in Europe Citigroup Economic Surprise Indices 150 100 50 0 -50 -100 -150 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 U.S. Euro Zone Source: Credit Suisse. Data as of 7.06.2015. Note: The Citigroup Economic Surprise Index measures data surpri
Slide 10: Euro Zone Growth Continues to Rebound – But Greece a Worry
Euro Zone Growth Continues to Rebound – But Greece a Worry Euro Zone ZEW Survey vs. Euro Zone Composite PMI 60 80 Euro Zone Composite PMI (LHS) 55 40 50 0 45 -40 ZEW Euro Zone Expectation of 40 Economic Growth (6M Lead, RHS) -80 35 -120 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Eurostat,
Slide 11: Asian Economies Are Still Under Pressure
Asian Economies Are Still Under Pressure Industrial Production YoY% - China vs. Japan 24% 30% 20% 20% Japan (RHS) 16% 10% 12% 0% 8% -10% China (LHS) 4% -20% Source: Haver Analytics, Guggenheim Investments. Data as of 4.30.2015 for Chinese industrial production, as of 3.31.2015 for Japanese industria
Slide 12: Central Banks Continue to Stimulate Global Economy
Central Banks Continue to Stimulate Global Economy Global Major Central Banks Combined Balance Sheet Assets as % of GDP (Fed, ECB, and BoJ) 40% Projected 36% Central banks will add approx. US$2.1 trillion to their balance sheets over the next 18 months 30% 20% 10% 2007 2008 2009 2010 2011 2012 2013
Slide 13: U.S. Treasuries Look Relatively Attractive
U.S. Treasuries Look Relatively Attractive 10-Year U.S. Treasury and 10-Year Sovereign Bond Yields United States 2.37% Italy Spain 2.12% 2.11% Ireland 1.63% France 1.22% Germany 0.84% Japan 0.46% Source: Bloomberg, Guggenheim. Data as of 6.24.2015. For Financial Professional Use Only. Do Not Distrib
Slide 14: Strong Foreign Demand for U.S. Bonds Continues
Strong Foreign Demand for U.S. Bonds Continues Cumulative Net Foreign Purchases of U.S. Corporate Bonds $30 2015 $20 2013 $10 $0 Billion -$10 2014 -$20 -$30 -$40 0 1 2 3 4 5 6 7 8 9 10 11 12 Months Source: Department of Treasury, Haver, Guggenheim Investments. Data as of 3.31.2015. For Financial Pro
Slide 15: Fed Tightening Cycles Have Less Impact on 10-Year Yields
Fed Tightening Cycles Have Less Impact on 10-Year Yields 12-Month Changes in 10-Year Treasuries and Fed Funds Rate After Fed Tightening 800 bps 753 700 bps 600 bps 500 bps 425 403 400 bps 312 300 bps 250 225 223 203 200 187 188 175 200 bps 161 139 106 94 90 100 bps 56 41 34 29 25 9 0 bps -3 -13 -58
Slide 16: Treasury Rates Capped by Strong Demand and Limited Supply
Treasury Rates Capped by Strong Demand and Limited Supply 2014 Treasury Market Ownership, Reduced by Market Value We Estimate is Not Held for Investment $14 T $12 T ~50% “frozen” $10 T Foreign Central Banks U.S. Fed Large US Banks $8 T $6 T $4 T $2 T $T Treasury Ownership by Investor Estm. Of Treasu
Slide 17: Terminal Fed Funds Rate for This Hiking Cycle Could Be Lower
Terminal Fed Funds Rate for This Hiking Cycle Could Be Lower Historical Terminal Federal Funds Rate at the End of Rate Hike Cycles vs. Debt Burden of the U.S. Economy 20% 1980 20% 1980 1981 1981 15% 1982 15% 1982 Terminal Federal Funds Rate Terminal Federal Funds Rate 1984 1984 10% 10% 1989 1989 200
Slide 18: History Shows Real Interest Rates Can and Do Stay Low
History Shows Real Interest Rates Can and Do Stay Low U.S. Real 10-Year Treasury Yield (5-Year Rolling Forward) 15% Average real 10-year yield 1 2 3 4 5 6 12% before the Fed was created (1871 – 1913) = 4.11% 9% 6% 3% 0% -3% Average real 10-year yield 1. Border War and World War I -6% 2. The Great De
Slide 19: Asset Performance in the Twelve Months After Fed Tightens
Asset Performance in the Twelve Months After Fed Tightens Average Total Return Performance by Asset Class Twelve Months After Fed Tightening* 12.0% 10.0% 8.0% 6.0% 10.7% 4.0% 5.8% 4.6% 4.6% 4.5% 4.4% 2.0% 3.9% 3.5% 3.3% 0.0% REITS Bank Loans Preferreds Agency MBS Municipal Bonds S&P 500 High Yield I
Slide 20: S&P500 Performs Well During First Year of Fed Tightening
S&P500 Performs Well During First Year of Fed Tightening S&P500 (Date of First Fed Rate Hike = 100) 118 Maximum Interquartile Range 115 Average Minimum Interquartile Range 112 109 106 103 100 97 94 0 1 2 3 4 5 6 7 8 9 10 11 12 Months after First Fed Rate Hike Source: Haver, Bloomberg, Guggenheim Inv
Slide 21: Monetary Tightening Is a Potential Positive for U.S. High Yield
Monetary Tightening Is a Potential Positive for U.S. High Yield U.S. High-Yield Bond Spread Performance Following Fed Tightening 130 Maximum Range Average Since 1986 (Normalized Spread = 100 at the First Fed Rate Hike) 120 Minimum Range Credit Suisse U.S. High-Yield Bond Spreads 110 Credit Spreads C
Slide 22: We Expect Defaults to Stay Low as the Fed Tightens
We Expect Defaults to Stay Low as the Fed Tightens Defaults Rates Typically Decline as the Fed Raises Interest Rates 8.00% 6.81% 7.00% 5.79% 6.00% 5.00% 3.92% 4.70% Historical Average 4.20% 3.85% 4.06% 4.00% 3.66% 3.00% 2.85% 2.25% 1.89% 2.00% 1.67% 1.19% 1.00% 0.00% 1980 1983 1986 1994 1999 2004 HY
Slide 23: The Yield Curve Flattens Over the Course of Fed Tightening Cycles
The Yield Curve Flattens Over the Course of Fed Tightening Cycles Normalized Yield Curve (Yield Relative to 30 Year): Average Change Over Fed Tightening Cycle 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% 2 Year 5 Year 7 Year 10 Year 30 Year 6 Months Before Month of First Rate Hike 6 Months After 12 Months Aft
Slide 24: Important Notices and Disclosures
Important Notices and Disclosures For Financial Professional Use Only. Do Not Distribute to the Public.
Slide 25: Important Notices and Disclosures
Important Notices and Disclosures Guggenheim Investments represents the following affiliated investment management businesses those shown here. Market and economic conditions may change in the future producing materially of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Se
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