Trading Expense Calculator

 

 

The Trading Expense Calculator will help you compare the potential costs of using ETFs and no-transaction-fee (NTF) mutual funds.

The calculator is designed for active investors to determine whether ETFs or mutual funds' costs are more suitable. (Some mutual funds are sold with a front-end or back-end load. This tool doesn't account for front-end or back-end load. This calculator is appropriate for comparison of ETFs and no-load funds.) In addition to the expense ratio, this calculator incorporates other factors that may affect costs:

 

  1. Number of round trips per year or average holding period: Since you have to pay a commission/transaction cost each time you buy or sell an ETF (and the same may apply to mutual funds), transaction costs and trading frequency should be considered.
  2. Cost per transaction or brokerage commission
  3. Bid / ask spread: Because ETFs are traded on the exchange, they can be affected by bid and ask prices. The wider the spread between those two prices, the more costly it is to trade.

There are many differences between ETFs and mutual funds. Consult your financial advisor to find out which product is appropriate for your investment goals. The Trading Expense Calculator may help you determine the difference in cost based on your trading frequency.

Remember though that cost structure is only one difference between mutual funds and ETFs. There are other differences, including but not limited to:

  Mutual Fund Exchange Traded Fund
Fees
  1. Generally higher operating expenses than ETFs.
  2. Some mutual funds may charge redemption fees.
  1. Generally lower annual expenses than mutual funds.
  2. You must pay a commission each time you buy or sell an ETF.
Trading
  1. Does not trade on an exchange.
  2. Can be bought or sold only at "net asset value," which is normally calculated once a day after the close of trading. At Guggenheim, however, there are some funds whose NAV is calculated twice a day.
  1. Trades on an exchange.
  2. Can be bought whenever the exchange is open.
  3. Must go through a brokerage firm.
  4. The market price may be different than the underlying value (you may end up buying at a premium or selling at a discount).
  5. Can be affected by bid and asking price. The wider the spread between those two prices, the more costly it is for the investor.
Tax Consequences
  1. Shareholders' redemptions can force a fund manager to sell securities in order to raise money, which can result in taxable capital gains distribution affecting remaining shareholders.
  1. Due to ETFs' unique creation and redemption process, securities are generally acquired and disposed of via in-kind transfers that do not trigger capital gains that would need to be distributed to investors.
Getting Started

  1. Enter estimated sum of money you intend to invest
  2. Enter estimated number of ETF round trip trades
  3. Enter average period you intend to hold an ETF or a mutual fund (number of buy/sell x average holding period ≤ 365)
  4. As needed, enter the ETF’s assumptions:
    1. Transaction cost – enter total commission cost
    2. Expense ratio – enter the ETF’s expense ratio as stated in the prospectus
    3. Average share price – estimated average price per ETF share
    4. Spread – the estimated difference between bid and ask prices (for indication of the spread, check the current trading quote of the ETF)

  5. As needed, enter the mutual fund assumptions:
    1. Estimated transaction/commission cost, if applicable (does not take a load into account)
    2. Expense ratio – enter the mutual fund’s expense ratio as stated in the prospectus

 

Explanatory Notes

To use the calculator effectively, consider the explanatory notes listed below. The trading expense calculator:

  1. Assumes 365 days in a year
  2. Considers a minimum holding period of one day
  3. Presumes that the average holding period multiplied by the number of round trips cannot exceed 365
  4. Looks at costs over the course of a year
  5. The trading expense calculator is for demonstration purposes only. When trading ANY type of ETF or mutual fund, be sure to read the prospectus and understand all applicable fees.


The funds may not be suitable for all investors. Certain funds may be affected by risks that include those associated with sector concentration, international investing, investing in small and/or medium size companies, and/or the Funds' possible use of investment techniques and strategies such as leverage, derivatives and short sales of securities and alternative or nontraditional asset classes and strategies such as absolute return, long/short, commodities, currencies and managed futures. Please see the Funds' prospectus for more information. Shares of the Funds are not deposits of, or guaranteed or endorsed by, any financial institution; are not insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any other agency; and involve risk, including the possible loss of the principal amount invested. Diversification neither assures a profit nor eliminates the risk of experiencing investment losses.

Inverse and leveraged Funds are not suitable for all investors. •These Funds should be utilized only by investors who (a) understand the risks associated with the use of leverage, (b) understand the consequences of seeking daily leveraged investment results, (c) understand the risk of shorting, and (d) intend to actively monitor and manage their investments. •The more a Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. •Inverse Funds involve certain risks, which include increased volatility due to the Funds' possible use of short sales of securities and derivatives, such as options and futures. •The Funds' use of derivatives, such as futures, options and swap agreements, may expose the funds' shareholders to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. •Short-selling involves increased risks and costs. You risk paying more for a security than you received from its sale. •Leveraged and inverse Funds seek to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a daily basis. Because the Funds seek to track the performance of their benchmark on a daily basis, mathematical compounding, especially with respect to those Funds that use leverage as part of their investment strategy, may prevent a fund from correlating with the monthly, quarterly, annual or other period performance of its benchmark. Due to the compounding of daily returns, leveraged and inverse Funds' returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. For those Funds that consistently apply leverage, the value of the fund's shares will tend to increase or decrease more than the value of any increase or decrease in its benchmark index. The Funds rebalance their portfolios on a daily basis, increasing exposure in response to that day's gains or reducing exposure in response to that day's losses. Daily rebalancing will impair a fund's performance if the benchmark experiences volatility. Investors should monitor their leveraged and inverse Funds' holdings consistent with their strategies, as frequently as daily. •For more on these and other risks, please read the prospectus.

This does not take into account tax implications. Please discuss with a tax professional to evaluate a specific portfolio allocation or investment strategy.

 

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.

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