| Copyright 2006 Equitrend, Inc.
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| | accelerated gains, they will also
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| In today's sophisticated investment
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| | generate accelerated losses if the
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| world, investors now have the opportunity
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| | investor is on the wrong side of the
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| to double the performance of the major
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| | market.
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| stock market indexes by using the
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| | Potential Advantages of Enhanced Index
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| enhanced index mutual fund offerings of
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| | Funds
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| two families of mutual funds, Rydex and
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| | --Double the gains of the underlying
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| ProFunds.
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| | index in both up and down markets
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| By using this strategy, investors can
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| | --More market exposure without increased
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| amplify their returns for the same outlay
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| | investment cost
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| of investment dollars and so accelerate
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| | --Can be used in qualified retirement
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| their portfolio's growth.
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| | accounts to short the market which can't
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| The Rydex and ProFunds Families offer
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| | be done with most other shorting vehicles
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| what are commonly known as enhanced index
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| | Potential Disadvantages of Enhanced Index
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| funds. Like regular mutual funds,
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| | Funds
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| enhanced index funds invest in various
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| | --Leverage will maximize losses if
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| stocks and underlying major indexes like
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| | invested on the wrong side of the market
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| the NASDAQ 100, Dow Jones Industrials and
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| | --Increased volatility due to derivatives
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| S&P 500. But they also invest in
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| | --May not be suitable for all investor
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| derivative products like futures
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| | --Lack of flexibility; cannot be traded
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| contracts and Equity Index Swap
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| | during trading day; end of day pricing
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| Agreements to leverage their returns and
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| | --Tracking error; enhanced index funds
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| provide gains or losses that equal 200%
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| | may vary from underlying benchmark and so
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| of the underlying index.
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| | may not deliver 200% returns in relation
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| Enhanced index fund investing is a
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| | to underlying index
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| sophisticated strategy that can
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| | Are Enhanced Index Funds Right for You?
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| significantly magnify your returns when
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| | Enhanced index funds are suitable for
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| used in conjunction with proper money
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| | investors who seek an aggressive
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| management and a robust trading system.
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| | investment tool and who want to outpace
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| Enhanced Index Funds Explained
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| | the potential gains of the underlying
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| The two categories of Enhanced Index
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| | index.
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| Funds are commonly known as "bull" funds
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| | They offer the investor greater exposure
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| and "bear" or "short funds." When buying
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| | and potential profits without an
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| a bull fund, the investor takes a bullish
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| | additional cash outlay and so allow the
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| position that the market is going to
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| | investor to maximize returns.
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| rise. When buying a bear fund, the
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| | Before utilizing enhanced index funds,
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| investor is taking a position that the
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| | the investor must honestly determine his
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| market will decline because bear funds
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| | or her ability to accept volatility and
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| gain in value if the underlying index
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| | risk; but used wisely and in conjunction
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| declines.
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| | with a proven trading system, enhanced
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| Enhanced index funds allow the investor
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| | index funds can be a valuable and
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| to increase gains in both up and down
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| | profitable addition to your portfolio.
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| markets because of their ability to
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| | John M. McClure is CEO and President of
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| return 200% of the underlying movement of
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| | EquiTrend Inc., a stock market timing
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| the index.
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| | system that averages 42% profits per
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| Therefore, they provide extra exposure to
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| | year. Mr. McClure is also a Registered
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| an index with less investment capital so
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| | Investment Advisor and President of the
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| you can free up assets for other
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| | National Association of Active Investment
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| investments. While they can provide
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| | Managers.
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