The Rising Rate Defensive Equity Portfolio, Series 4 (“Trust”) seeks to provide capital appreciation.
Past performance is no guarantee of future results. Investment returns and principal value will fluctuate with changes in market conditions. Investors' units, when redeemed, may be worth more or less than their original cost.
This information does not constitute an offer to sell or a solicitation of any offer to buy: nor shall there be any sale of these securities in any state where the offer, solicitation, or sale is not permitted.
Principal Investment Strategy
Under normal circumstances, the Trust invests at least 80% of the value of its assets in equity securities of United States exchangelisted companies. The U.S.-listed equity securities held by the Trust may include equity securities of U.S. and non-U.S. companies. The Trust may invest in equity securities issued by small-, mid- and large-capitalization companies. As a result of the strategy, the Trust invests significantly in the information technology sector.
Interest rates have been at historic lows for an extended period of time and the Sponsor believes that these historically low interest rates are likely to rise. The Trust seeks to provide a portfolio that is defensive against rising interest rates. The Trust’s strategy is designed to provide a diversified portfolio of equity securities that the Sponsor expects to perform well in an environment of rising interest rates, as measured by movements in the U.S. 10-year treasury bond. The Sponsor defines a rising rate environment as a period in which the U.S. Treasury 10-year yield rises by 150 basis points or more from a prior low value. The prior low value must have been proceeded by a decline in the yield by at least the same amount (i.e., 150 basis points). The start of the rising rate period is the low value before the 150 basis points or greater rise in the yield. The end of the rising rate period is the highest level of the yield that was observed prior to a subsequent decline of at least 150 basis points from that high level. The Trust is not directly intended to provide investors with increasing amounts of dividend income, rising interest income distributions or interest distributions that increase as prevailing interest rates rise.
The Sponsor has sought the assistance of Ned Davis Research, Inc. (“NDR”), as portfolio consultant, to develop the Trust’s investment strategy. NDR evaluates companies based on their sensitivity to key factors identified as having positive correlations of returns in rising interest rate environments.
Ned Davis Research
NDR is an independent, institutional research company. Founded in 1980, NDR has provided institutional investors with unbiased and unaffiliated investment research. NDR provides a disciplined approach to in-depth financial analysis, which is supported by the sophisticated proprietary analytic tools that marry fundamental and technical research. Research ranges from asset allocation, to sector and industry groups, individual stocks, economic, and quantitative research. NDR maintains clients in over 30 countries, and serves over 1,100 institutional clients at investment firms, banks, insurance companies, mutual funds, hedge funds, pension and endowment funds, registered investment advisors and equity research departments.
NDR also provides custom research solutions that offers personalized research analysis ranging from sophisticated asset allocation models to simple charts and data retrieval. NDR works with clients to create ideas to address research needs and act as a supplemental resource to proprietary strategy.
To select the portfolio, the Sponsor follows a disciplined process developed with NDR that includes both quantitative screening and qualitative analysis. The portfolio selection process begins with the folowing universe of companies as of the date of the security selection:
NDR then selects the securities for the portfolio that it believes possess the potential to have a positive correlation to rising interest rates by applying the following series of screens, which NDR has determined have historically produced a portfolio that outperforms the benchmark during periods of rising interest rates. However, prior performance is not indicative of future results. These screens include:
The stocks with the highest rankings are then selected and equal-weighted within the portfolio at the time of selection.
Risks and Other Considerations
As with all investments, you may lose some or all of your investment in the Trust. No assurance can be given that the Trust’s investment objective will be achieved. The Trust also might not perform as well as you expect. This can happen for reasons such as these:
See “Investment Risks” in Part A of the prospectus and “Risk Factors” in Part B of the prospectus for additional information.
Please see the Trust prospectus for more complete risk information.
Unit Investment Trusts are fixed, not actively managed and should be considered as part of a long-term strategy. Investors should consider their ability to invest in successive portfolios, if available, at the applicable sales charge. UITs are subject to annual fund operating expenses in addition to the sales charge. Investors should consult an attorney or tax advisor regarding tax consequences associated with an investment from one series to the next, if available, and with the purchase or sale of units. Guggenheim Funds Distributors, LLC does not offer tax advice.
Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.
Investing involves risk, including the possible loss of principal.
Guggenheim Investments represents the investment management business of Guggenheim Partners, LLC ("Guggenheim"), which includes Security Investors, LLC ("SI"), Guggenheim Funds Investments Advisors, LLC ("GFIA") and Guggenheim Partners Investment Management ("GPIM") the investment advisors to the referenced funds.
© 2019 Guggenheim Investments. All Rights Reserved.
Research our firm with FINRA Broker Check.
• Not FDIC Insured • No Bank Guarantee • May Lose Value
This website is directed to and intended for use by citizens or residents of the United States of America only. The material provided on this website is not intended as a recommendation or as investment advice of any kind, including in connection with rollovers, transfers, and distributions. Such material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. All content has been provided for informational or educational purposes only and is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation. Investing involves risk, including the possible loss of principal.