Index Tracking Funds

Bear Funds

Mutual funds cannot be traded on the short side; however, there are a number of (reverse) funds specifically designed to capture downside moves. For instance, whereas the Rydex OTC fund corresponds to 100% of the NASDAQ 100 index's performance, the Inverse RYDEX OTC fund corresponds to 100% of the index's performance in reverse. In other words, when the NASDAQ 100 index rises, the Rydex OTC fund will grow in value, but the inverse Rydex OTC fund will lose value. Conversely, when the NASDAQ 100 index declines, the inverse Rydex OTC fund will increase in value and the Rydex OTC fund will decline.

Our system generates signals for both types of mutual funds - you can thus profit from the trading of mutual funds in both up and down markets. For each bullish-oriented fund for which we make trading signals available to our members, we have a corresponding bearish-oriented (i.e., inverse) fund.

More conservative investors may chose to restrict their trading to the bullish-oriented funds.

Like most mutual funds, the Bear Funds invests in a broadly diversified portfolio of securities. But in addition to buying stocks, the funds also engages in "short sales" and buys "put" options. An investor who sells a stock short or buys a put option profits when the stock goes down. The fund also holds short positions on indexes which act as proxies for the stock market or a segment of the market. This portfolio of more "short" than "long" positions (in addition to put options) allows the fund to benefit from a steep market decline.

Dynamic Funds

The Dynamic Funds were created as a separate fund family. These Funds regularly utilize leveraged instruments, such as futures contracts and options on securities, futures contracts, and stock indices. In the case of some Dynamic Funds and the Venture 100 Funds, short selling techniques are regularly utilized so that the Funds correspond with their benchmarks.

The Dynamic Funds are managed using a "passive" investment strategy, meaning the Advisor does not attempt to select securities based on their individual potential to perform better than the market. The Advisor's primary objective is to match the performance of each Fund's benchmark as closely as possible. The Funds, which seek to be fully invested at all times, are monitored on an ongoing basis. Adjustments to the portfolios are made, as necessary, to minimize tracking error and to maximize liquidity.

The Dynamic Funds are available through many discount brokerages. Click here for a complete listing.

List of some Dynamic Funds:

• Rydex Titan 500 Fund - provides investment results that correspond to 200 percent of the daily performance of the S&P 500.
• Rydex Tempest 500 Fund - provides investment results that correspond to 200 percent of the inverse performance of the S&P 500 on a daily basis.
• Rydex Velocity 100 Fund - provides investment results that correspond to 200 percent of the daily performance of the NASDAQ-100.
• Rydex Venture 100 Fund - provides investment results that correspond to 200 percent of the inverse performance of the NASDAQ-100 on a daily basis.

Inverse Funds

OTC Short Fund

• The Fund seeks to provide investment results that will inversely correlate to the performance of the NASDAQ 100.

Small Cap Short Fund

• The Fund seeks investment results that inversely correspond to the returns of the Russell 2000 Index.

US Short Fund

• The Fund seeks to provide investment results that will inversely correlate to the investment performance of the S&P 500 index.
  

ProFunds

Bear ProFund

• The Fund seeks daily investment results that correspond to the inverse of the daily performance of the S&P 500 Index.

Rising Rates Opportunity ProFund

• The Fund seeks daily investment results, before fees and expenses, that correspond to 125 percent of the inverse (opposite) of the daily price movement of the most recently issued long bond.

Short Small-Cap ProFund

• The Fund seeks daily investment results, before fees and expenses, that correspond to the inverse (opposite) of the daily performance of the Russell 2000 Index.

Short OTC ProFund

• The Fund seeks daily investment results, before fees and expenses, that correspond to the inverse (opposite) of the daily performance of the Nasdaq-100 Index.

Ultra Bear ProFund

•  The Fund seeks daily investment results that correspond to twice the inverse of the performance of the S&P 500 index.

Ultra Short OTC ProFund

• The Fund seeks to provide investment results that correspond each day to twice the inverse (opposite) of the performance of the NASDAQ 100 Index.
  

Rydex Funds

Inverse OTC Fund

• The Fund seeks to provide investment results that will match the performance of a specific benchmark. The Fund s current benchmark in the inverse of the performance of the NASDAQ 100 Index.

Juno Fund

• The Fund seeks to provide total returns that will inversely correlate to the price movements of a benchmark for U.S. Treasury debt instruments or futures contract on a specified debt instrument.

Inverse Dynamic S&P 500 Fund

• The Fund seeks to provide, on a daily basis, investment results that will match the performance of a specific benchmark. The Fund s current benchmark is 200 percent of the inverse ("opposite") of the S&P 500 Index.

Inverse S&P 500 Fund

• The Fund seeks to provide investment results that will inversely correlate to the performance of the S&P 500 Index.

Inverse Dynamic OTC Fund

• The Fund seeks to provide, on a daily basis, investment results that will match the performance of a specific benchmark. The Fund s current benchmark is 200 percent of the inverse ("opposite") of the Nasdaq 100 Index.

Rydex Funds

Rydex Funds is an innovative financial services company, dedicated to providing financial professionals and sophisticated investors with tools to better manage portfolios in all market environments. Based in Rockville, MD, it was the first to offer leveraged index funds, short funds and funds that price twice daily in real time.

Four Rydex top-performing inverse funds:

• Rydex Dynamic Venture 100 Fund, (RYVNX). Its performance benchmark is 200 percent of the inverse performance of the NASDAQ 100 index. The fund was created in May 2000.
• Rydex Arktos (RYAIX). Similar to the Venture 100, is designed to perform opposite of the daily performance of the NASDAQ 100. It has been established in September 1998.
• Rydex Dynamic Tempest 500 Fund (RYTPX).  This fund's benchmark is the S&P 500., and like the Dynamic Venture 100 fund, its performance is designed to correspond to 200 percent the inverse performance of the index. Around since May of 2000.
• Rydex Ursa Fund (RYURX). The oldest of the four funds, expect this fund to perform opposite of the S&P 500 Index. The fund was created in January 1994.

ProFunds

ProFunds are the index investing mutual funds that was established in 1997 to match and double the daily performance of indexes, and others that seek daily to perform the opposite of indexes.

ProFunds now offer the widest selection of index-based mutual funds:

• Bullish ProFunds. Based on a wide range of major stock indexes, such as the S&P 500®, Nasdaq-100® and Russell 2000®.
  
  The Bull, OTC, Mid-Cap, Mid-Cap Growth, Mid-Cap Value, Small-Cap, Small-Cap Growth, Small-Cap Value and Europe 30 ProFunds are  "traditional" index funds. They seek, on a daily basis, to match the performance of a specific stock market index.
  
   "Ultra" Bullish funds (Ultra Bull, Ultra Mid-Cap, Ultra Small-Cap, Ultra OTC and Ultra Japan ProFunds) use leverage to seek to double the daily performance of their respective benchmark indexes.
• Bearish ProFunds. These funds increase in value when the market declines and decrease in value when the market rises.
• Ultra Sector ProFunds. They allow you to invest in a particular part of the U.S. economy, such as energy, financial services etc., and they are is benchmarked against a specific Dow Jones U.S. sector index. Using leverage, each Ultra Sector ProFund's goal is to produce daily returns that are 150 percent of the performance of a specified sector index.
• Money Market ProFund.
• other

In addition to wide selection, ProFunds also offer the flexibility to control your investments: no front- or back-end sales loads, no transaction fees, no upper limit on the number or size of exchanges you make within the ProFunds family.

Rydex Venture 100 Fund

Since 1993. As industry pioneers (since 1993), Rydex was the first mutual fund company to offer short and leveraged benchmark-based mutual funds.

Rydex Venture 100 Fund seeks investment results that correlate to the inverse of the NASDAQ 100 Index. The fund primarily invests leveraged instruments, such as futures contracts and options on securities, futures contracts, and stock indices. Futures and options contracts enable the fund to pursue its objective without investing directly in the securities included in the NASDAQ 100 Index. The fund may also purchase equity securities, engage in equity index swaps, and enter into repurchase agreements. The Fund's advisor will attempt to consistently apply leverage to increase the fund's exposure to 200 percent of the NASDAQ 100 Index. "This fund is non-diversified."

Rydex Venture 100 from Rydex Mutual Funds seeks to provide investment results that correspond to 200 percent of the inverse performance of the NASDAQ 100. If the Fund meets its objective, the value of Venture 100 shares will tend to increase on a daily basis by twice the amount of any decrease in the Nasdaq 100. When the value of the Nasdaq 100 increases, the value of the Venture 100 shares should decrease on a daily basis by twice the amount of any increase in the Nasdaq 100.