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Guggenheim US SMID High Dividend Strategy Portfolio Series 4

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Investment Objective

The Guggenheim US SMID High Dividend Strategy Portfolio, Series 4 ("Trust") seeks to provide dividend income.

Principal Investment Strategy

Selection Criteria

Risks and Other Considerations

Portfolio Information

Deposit Information

Inception Date 4/16/2012
Non-Reoffered Date 7/17/2012
Mandatory Maturity Date 7/16/2013
NASDAQ Ticker Symbol CSMHDX
Trust Structure GRANTOR
Inception Unit Price $10.0000
Maturity Price (as of 7/16/13) $11.3772

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

The Sponsor, with the assistance of Guggenheim Partners Investment Management, LLC ("GPIM"), an affiliate of Guggenheim Partners, LLC, has selected the securities to be included in the Trust’s portfolio. The Sponsor and GPIM believe that companies that distribute significant dividends on a consistent basis demonstrate strong financial strength and positive performance relative to their peers.

See “Investment Policies” in Part B of the prospectus for more information.

Selection Criteria

The Trust’s portfolio is constructed and the securities were selected seven business days prior to the initial date of deposit (the “Security Selection Date”) using the Security Selection Rules outlined below. Security Selection Rules: In constructing the Trust’s portfolio, 50 securities were selected based on the following fundamentally based quantitative criteria:

1. Initial Universe: Start with an initial universe of securities which meet the following criteria as of the Security Selection Date:

  • Begin with all securities in the S&P 1500 Composite Index.
  • Exclude securities included in the S&P 500 Index.
  • Exclude securities which do not have a policy of regular periodic dividends (quarterly, semiannual or yearly), or have omitted the most recent regular periodic dividend.
  • Market capitalization greater than $200 million. Market capitalization is determined by the closing price as of the Security Selection Date.
  • Minimum liquidity of $0.6 million. Liquidity is determined by the average 20 day trading volume in U.S. dollars and is calculated as the average of a 20 trading day look back from the Security Selection Date (i.e., trading volume in shares multiplied by the closing price for the day as provided by FactSet Research Systems, Inc.).

2. Rank on Fundamentals: Rank every company identified in the initial universe against other companies in the same sector, as defined by Global Industry Classification Standard, along each of the following reported financial metrics. Each ranking is determined as of the Security Selection Date using the most recently reported information and uses a scale of 1 through 10 (1 representing the highest scoring 10% in the sector and 10 representing the lowest scoring 10% in the sector):

  • Return on assets calculated as operating income divided by total assets.
  • Earning before interest, taxes, depreciation and amortization divided by enterprise value. Enterprise value is determined by adding the equity market capitalization as of the most recent closing price with the total outstanding long term and short term debt as determined by the most recently available balance sheet, and then subtracting any cash and short term investments as determined by the most recently available balance sheet.
  • Sales per share growth by trailing year-over-year growth. Trailing year-over-year growth is the percentage change in sales per-share for the trailing 12 months versus the sales per-share from the prior 12 months. Sales per-share is the trailing 12 months of sales from most recent trailing quarterly or semi-annual filings divided by the end of period reported count of common shares outstanding used to calculate basic earnings per share. Each financial metric will create a separate score so that every company will have three scores. These three scores are averaged together to create one composite score for a company. This composite score is used to rank the companies in the next step in order to determine the sub-universe of securities.

3. Define Sub-Universe: Reduce the initial universe of securities to a sub-universe that meets the following requirements, with each requirement being applied independently to the initial universe from the other requirements in this step, as of the Security Selection Date:

  • Exclude the lowest ranked 25% of securities from the initial universe determined by the average of the three financial rankings described in step 2.
  • Exclude securities that have a pending cash or stock merger and acquisition or bankruptcy which will lead to delisting the security. Such events will be determined by reviewing the announced merger and acquisition data from Bloomberg and if the announced date falls before the Security Selection Date, an announcement of an agreement to be acquired in whole for cash or stock from an acquiring company or bankruptcy filing will cause exclusion.

4. Selection: Select from the sub-universe the fifty top dividend yielding securities (with higher rank given to larger market capitalization when yields are equal), equally weighted as of the Security Selection Date, which adhere to following portfolio limits as of the Security Selection Date:

  • Maximum 20% weight in any sector, as defined by Global Industry Classification Standard, as of the Security Selection Date.
  • Maximum 10% weight in any industry, as defined by Global Industry Classification Standard, as of the Security Selection Date. Once an investment limitation has been reached, additional securities of that type will not be included in the Trust and the next highest yielding security will be used.

Please note that due to the fluctuating nature of security prices, the weighting of an individual security or sector in the Trust portfolio may change after the Security Selection Date.

The S&P Composite 1500 Index combines three leading indices - S&P 500, S&P MidCap 400 and S&P SmallCap 600 - to form an investable benchmark of the U.S. equity market. Covering approximately 85% of the U.S. market capitalization, S&P Composite 1500 offers investors an index with the familiar characteristics of the S&P 500 but with broader market exposure.

The S&P 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Indexes are unmanaged and it is not possible to invest directly in an index.

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:

  • Securities prices can be volatile. The value of your investment may fall over time. Market value fluctuates in response to various factors. These can include stock market movements, purchases or sales of securities by the Trust, government policies, litigation, and changes in interest rates, inflation, the financial condition of the securities’ issuer or even perceptions of the issuer. Units of the Trust are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
  • Due to the current state of the economy, the value of the securities held by the Trust may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers. Starting in December 2007, economic activity declined across all sectors of the economy, and most countries experienced increased unemployment. The economic crisis affected the global economy with European and Asian markets also suffering historic losses. Standard & Poor’s Rating Services lowered its long-term sovereign credit rating on the United States to “AA+” from “AAA,” which could lead to increased interest rates and volatility. Extraordinary steps have been taken by the governments of several leading countries to combat the economic crisis; however, the impact of these measures is not yet fully known and cannot be predicted.
  • Share prices or dividend rates on the securities in the Trust may decline during the life of the Trust. There is no guarantee that the issuers of the securities will declare dividends in the future and, if declared, whether they will remain at current levels or increase over time.
  • The Trust includes real estate investment Trusts (“REITs”). REITs may concentrate their investments in specific geographic areas or in specific property types, such as, hotels, shopping malls, residential complexes and office buildings. The value of the REITs and other real estate securities and the ability of such securities to distribute income may be adversely affected by several factors, including: rising interest rates; changes in the global and local economic climate and real estate conditions; perceptions of prospective tenants of the safety, convenience and attractiveness of the properties; the ability of the owner to provide adequate management, maintenance and insurance; increased competition from new properties; the impact of present or future environmental legislation and compliance with environmental laws; changes in real estate taxes and other operating expenses; adverse changes in governmental rules and fiscal policies; adverse changes in zoning laws; declines in the value of real estate; the downturn in the subprime mortgage lending market and the real estate market in the United States; and other factors beyond the control of the issuer of the security.
  • The Trust invests in securities issued by small-capitalization and midcapitalization companies. These securities customarily involve more investment risk than securities of largecapitalization companies. Smallcapitalization and mid-capitalization companies may have limited product lines, markets or financial resources and may be more vulnerable to adverse general market or economic developments.
  • Inflation may lead to a decrease in the value of assets or income from investments.
  • The Sponsor does not actively manage the portfolio. The Trust will generally hold, and may, when creating additional units, continue to buy, the same securities even though a security’s outlook, market value or yield may have changed.

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.

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