Guggenheim completes unfinished business, as Rydex ETFs take on Guggenheim name.
Rydex SGI ETFs are taking on the Guggenheim name as part of a broad reorganization that brings together all of Guggenheim’s asset-management businesses under one umbrella, and cements Guggenheim’s place as the No. 8 U.S. exchange-traded fund company, with over $11 billion in assets.
The change marks the final phase of Guggenheim’s acquisition last year of Rydex SGI’s parent, the insurance company Security Benefit Corp., as well as the integration of its acquisition of Claymore Securities. Financial terms weren’t disclosed, but Security Benefit is now Guggenheim Partners’ second-largest institutional shareholder as a consequence of the changes, company officials told IndexUniverse.
A total of about $119 billion in assets, including mutual funds, closed-end funds, unit investment trusts and ETFs, will now operate under the Guggenheim Investments name, the parent company of the new entity, Guggenheim Partners LLC, said in a press release. The changes should help Guggenheim compete more decisively with firms such as BlackRock, the owner of iShares, the world’s No. 1 ETF sponsor.
The reorganization brings together under the same name popular ETF products such as Guggenheim’s "BulletShares" target maturity date bond ETFs, as well the Rydex CurrencyShares products and suites of pure-style ETFs and equal weighted index ETFs, including the Rydex S&P Equal Weight ETF (NYSEArca: RSP), a $2.63 billion fund that divides the S&P 500 index into equally weighted constituents.
Focus On ETFs
Indeed, while the new Guggenheim’s U.S. ETF assets of $11.1 billion make up about 9 percent of the new Guggenheim’s total assets, the company is quite keen on developing its lineup of ETFs.
“We do view the ETF business as a growth engine, so we’ll be investing in it,” Tony Davidow, an ETF strategist at Rydex who still plays that role at the new entity, told IndexUniverse in a telephone interview. “This allows us to continue to expand the offering, continue to reach a broader market segment new and to leverage the intellectual capabilities existing within larger Guggenheim.”
The Rydex brand of ETFs had about $8 billion in assets as of Sept. 20, while the Guggenheim ETFs have gathered about $3.11 billion in ETF assets, according to data compiled by IndexUniverse.
The transaction won’t result in any layoffs, Guggenheim officials said, in part because growth opportunities in the ETF business will require the company to expand its resources.
The parent company’s President, Todd Boehly, will lead the new entity Guggenheim Investments, the press release said. Scott Minerd will serve as chief investment officer, Don Cacciapaglia will be chief administrative officer, and Richard Goldman, former head of Rydex, will be chief operation officer.
Guggenheim Partners will be based in New York, but Rydex’s offices in Rockville, Maryland and Guggenheim’s offices in Lisle, Illinois won’t be moved because of the consolidation.