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. Investment Risk: An investment in the fund is subject to investment risk, including the possible loss of the entire principal amount that you invest.
Fund data is subject to change on a daily basis.
Composition is subject to change. Information provided is for illustration purposes only and may not reflect current investments by the fund. Referenced companies are not affiliated with Guggenheim Investments and Guggenheim Investments does not sponsor, endorse, sell or promote the referenced companies.
Asset-Backed and Mortgage-Backed Securities Risk: Investors in ABS, including MBS and structured finance investments, generally receive payments that are part interest and part return of principal. These payments may vary based on the rate at which the underlying borrowers pay off their loans. Some asset-backed securities, including mortgage-backed securities, may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices very volatile and they are subject to liquidity risk.
Credit/Default Risk: Issuers or guarantors of debt instruments or the counterparty to a repurchase agreement or loan of portfolio securities may be unable or unwilling to make timely interest and/or principal payments or otherwise honor its obligations.
Derivatives Risk: Derivatives may pose risks in addition to and greater than those associated with investing directly in securities or other investments, including risks relating to leverage, imperfect correlations with underlying investments or the fund’s other portfolio holdings, high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions.
Emerging Markets Risk: Investment in securities of issuers based in developing or “emerging market” countries entails all of the risks of investing in securities of non-U.S. issuers, as previously described, but to a heightened degree.
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.
Foreign Issuers Risk: The fund may invest in U.S. and non-U.S. dollar-denominated bonds of foreign corporations, governments, agencies, and supra-national agencies, which have different risks than investing in U.S. companies.
High-Yield Securities Risk: High yield securities generally offer a higher current yield than that available from higher grade issues, but typically involve greater risk. Securities rated below investment grade are commonly referred to as “junk bonds.” The ability of issuers of high yield securities to make timely payments of interest and principal may be adversely impacted by adverse changes in general economic conditions, changes in the financial condition of the issuers, and price fluctuations in response to changes in interest rates.
Income Risk: Falling interest rates may cause the fund’s income to decline.
Interest Rate Risk: As interest rates rise, the value of fixed-income securities held by the fund are likely to decrease. Securities with longer durations tend to be more sensitive to interest rate changes, making them more volatile than securities with shorter durations.
Investments in Loans Risk: Investments in loans involve special types of risks, including credit risk, interest rate risk, counterparty risk and prepayment risk.
Leverage Risk: The fund’s use of leverage, whether through borrowings or through economic leverage from instruments such as derivatives, may cause the fund to be more volatile and riskier than if it had not been leveraged.
Management Risk: The fund is subject to management risk because it is an actively managed portfolio. In managing the fund’s portfolio securities, the investment advisor will apply investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that these will produce the desired results.
Municipal Securities Risk: Municipal securities are subject to the risk that litigation, legislation or other political events, local business or economic conditions or the bankruptcy of the issuer could have a significant effect on an issuer’s ability to make payments of principal and/or interest.
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. 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.
Portfolio Turnover Risk: The fund may engage in active and frequent trading of its portfolio securities in connection with the rebalancing of the index, and therefore the fund’s investments.
Risk of Deviation Between Market Price and NAV: Unlike conventional ETFs, the fund is not an index fund. The fund is actively managed and does not seek to replicate the performance of a specified index. There can be no assurance as to whether and/or the extent to which the shares will trade at premiums or discounts to NAV.
In addition, the fund is subject to additional risks and other considerations not mentioned above. Please read the prospectus for additional information.
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 100,000 Shares. Creation Unit transactions are typically conducted in exchange for the deposit or delivery of in kind securities and/or cash. 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 the 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.