A Comparison of ETFs and Mutual Funds— The True Cost of Investing

1. A Comparison of ETFs and Mutual Funds—The True Cost of Investing Presented by: Carl Resnick, Director of Rydex Funds Distribution, Guggenheim Investments 7/23/13 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

2. Agenda • Overview • Explicit vs. Implicit Costs • The Impact of Brokerage Commissions • The Impact of Spreads in Trading • Understanding the Complete Ownership Cost • Ownership Considerations for Tactical Investors • Appendix: Formulas to Calculate Ownership Costs FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

3. Don’t Judge An Investment Solely By Its Expense Ratio • The reflexive notion that ETFs cost less—simply basedon their low expense ratios—and are more cost effective than mutual funds, is not entirely true. In addition to an expense ratio, there are additionalconsiderations that investors should considerwhen making an informed choice between ETFs andfunds—including spreads and commissions. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

4. A Comparison of Mutual Fund and ETF Ownership Costs • There are generally two key points against which to judge costs for mutual funds and ETFs: • Explicit versus implicit costs • The cost of holding versus the cost of trading 1 Many mutual funds are available on No-Transaction-Fee (NTF) platforms without brokerage commission. There is limited availability of ETFs on NTF platforms. 2 Shareholder activity affects both mutual funds and ETFs, but is lessened with ETFs due to their unique creation/redemption process. However, if an ETF uses a cash or partial cash create/redemption process, then shareholder activity will create additional costs for that ETF. 3 If shares of an ETF or mutual fund are sold at a price other than their purchase price, the transaction will typically represent a taxable event. Due to their unique structure, ETFs tend to be more tax-efficient than their mutual fund counterparts because they do not need to sell securities to address shareholder activity. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

5. A Closer Review of Explicit and Implicit Costs FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

6. The Impact of ETF Brokerage Commissions • Two types of brokerage commissions are applicable to ETF trading: FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

7. The Impact of Bid/Ask Spreads in Trading • Mutual funds trade at the Net Asset Value (NAV) – all buyers and sellers pay the same price • Prices for ETFs fluctuate during the trading day. The price paid can be affected by the bid/ask spread. • Spreads are generally more narrow on the largest most liquid ETFs • Spreads are generally wider on the smaller, thinly traded ETFs • Spreads can equate to a significant cost for frequent or active trading—especially for narrow exposures such as short-term thematic, sector or hard-to-access niche market ETFs • Bid/ask spreads can be one of the larger costs of ETF ownership, so even ETF investors who can purchase and sell ETFs NTF need to understand the potential impact of this cost component. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

8. Weighted Average & Median Bid/Ask Spread by ETF Category • Takeaway • Very liquid ETFs with tight spreads can be affordable choices for investors. However, if an investor is a more active trader or trading ETFs with wider spreads, an NTF mutual fund may be the more cost-effective choice. • Weighted Average and Median Bid/Ask Spread by ETF Category • (In Basis Points) Source: IndexUniverse, November 2012. Core methodology reviews one-minute trading windows over 60 calendar days. Each ETF is assigned an “average” spread from those data points. That data point is fixed per fund. In asset class or sector buckets, each bucket is then calculated as an average weighted and median based on period ending AUM. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

9. A Comparison: Leveraged ETFs vs. NTF Leveraged Mutual Funds • Leveraged ETF • Spread: 0.17%2 • Expense ratio: 0.52% 3 • Brokerage commission: $8/trade • Versus • Leveraged Mutual Fund • NTF • No-load index mutual fund • Expense ratio of 1.52%1 • A Comparison: The Impact of Trading Frequency on Annual Ownership Costs • Leveraged ETFs vs. NTF Mutual Funds This example is hypothetical and for illustration purposes only. It is not meant to represent any particular fund. 1 Average leveraged mutual fund expense ratio is 1.52%. Average mutual fund expense per Morningstar is 1.18% (as of January 2013). 2 ETF industry weighted average spread for leveraged ETFs is .17%, SOURCE Index Universe, November 2012. 3 Average leveraged ETF expense ratio is .52%, source Morningstar Jan 2013. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

10. A Comparison: Sector ETFs vs. NTF Sector Mutual Funds • A Comparison: The Impact of Trading Frequency on Annual Ownership Costs • Sector ETFs vs. NTF Mutual Funds • Sector ETF • Spread: 0.07% 2 • Expense ratio: 0.52% 3 • Brokerage commission: $8/trade • Versus • Sector Mutual Fund • NTF • No-load index mutual fund • Expense ratio of 1.31%1 This example is hypothetical and for illustration purposes only. It is not meant to represent any particular fund. 1 Average sector mutual fund expense ratio is 1.31%. Average mutual fund expense per Morningstar is 1.18% (as of January 2013). 2 ETF industry weighted average spread for sector ETFs is .07%, SOURCE Index Universe, November 2012. 3 Average sector ETF expense ratio is .52%, source Morningstar Jan 2013. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

11. A Comparison: Inverse ETFs vs. NTF Mutual Funds • A Comparison: The Impact of Trading Frequency on Annual Ownership Costs • Inverse ETFs vs. NTF Mutual Funds • Inverse ETF • Spread: 0.13% 2 • Expense ratio: 0.93% 3 • Brokerage commission: $8/trade • Versus • Inverse Mutual Fund • NTF • No-load index mutual fund • Expense ratio of 1.75%1 This example is hypothetical and for illustration purposes only. It is not meant to represent any particular fund. 1 Average inverse mutual fund expense ratio is 1.75%. Average mutual fund expense per Morningstar is 1.18% (as of January 2013). 2 ETF industry weighted average spread for inverse ETFs is .13%, SOURCE Index Universe, November 2012. 3 Average inverse ETF expense ratio is .93%, source Morningstar Jan 2013. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

12. Ownership Considerations for Tactical Investors • When determining whether an ETF or mutual fund is more suitable, consider all costs (explicit and implicit). • Expense ratio. Expense ratios do not represent the entire cost of ownership for either an ETF or a mutual fund. • Brokerage commission. ○ For a flat commission per trade—consider the impact the size of a trade can have on costs ○ For a per-share commission —consider the impact the value per share can have on costs • Bid/ask spread. ○ For buy-and-hold strategies (with limited rebalancing)—ETFs may be the better choice vs. mutual funds. ○ For more active strategies, ETFs can become more costly versusmutual funds (even when using the most liquid ETFs) ○ Active investors who use ETFs with a wide bid/ask spread may be better off using mutual funds • Number of trades. For more than 10 round trip trades per year, consider using NTF mutual funds over ETFs. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

13. Conclusion • ETFs have many benefits for investors, but are not right for every situation • Low ETF expense ratios are just a small portion of the cost of ETF ownership • Be sure to understand all costs (implicit and explicit) when making cost comparisons between mutual funds and ETFs • Active trading can magnify ETF brokerage commissions and bid/ask spreads • For active traders, commission-free and NTF mutual funds may be a more cost-effective and efficient option FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

14. Appendix: Formulas to Calculate Ownership Cost • The formulas for calculating ownership cost are fairly straightforward. However, these formulae do not account for potential market impact of large trades, fluctuations in market pricing for ETFs (i.e. premiums/discounts), or other unpredictable costs. • These formulas also assume that the mutual fund is no-load, with no commissions. If the fund has a load, then the public offering price (POP) would need to be considered vs. only the NAV.* * Public offing price (POP)- The price at which an investor may buy shares of a mutual fund. A mutual fund POP is equal to Net Asset Value (NAV) plus the load, if any. As with the Net Asset Value, the public offering price (POP) will typically change on a day to day basis.• Net asset value- The dollar value of a single mutual fund share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. Calculated at the end of each business day. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

15. Contact Us DRAFT For more information, visit guggenheiminvestments.com or call 800.258.4332. Rydex Products are distributed by Guggenheim Distributors, LLC. Guggenheim Investments represents the investment management business of Guggenheim Partners, LLC (“GP”), which includes Security Investors, LLC (“SI”), the investment advisor to the referenced funds. Guggenheim Distributors, LLC, is affiliated with GP and SI. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

16. Disclosure 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. Shares of mutual funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. ETFs may not be suitable for all investors. •Investment returns and principal value will fluctuate so that when shares are redeemed, they may be worth more or less than original cost. Most investors will also incur customary brokerage commissions when buying or selling shares of an ETF. •Investments in securities and derivatives, in general, are subject to market risks that may cause their prices to fluctuate over time. •ETF shares may trade below their net asset value (“NAV”). The NAV of shares will fluctuate with changes in the market value of an ETF’s holdings. In addition, there can be no assurance that an active trading market for shares will develop or be maintained. Securities are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC. Securities offered through Guggenheim Funds Distributors, LLC and Guggenheim Distributors, LLC. Guggenheim Distributors, LLC and Guggenheim Funds Distributors, LLC. are affiliated with Guggenheim Partners, LLC ETFTCI-PPT-0413 x0414 #8122 FOR FINANCIAL PROFESSIONAL USE ONLY. NOT TO BE SHOWN OR DISTRIBUTED TO THE PUBLIC.

20. Flexible Plan strategies

21. The True Cost of Trading ETFs A Flexible Plan Illustration Source: Flexible Plan Investments, Ltd. Research Department Estimates

22. An FPI Illustration – Self-adjusting Trend Following (STF) Source: Flexible Plan Investments, Ltd. Research Department Estimates

23. How about a day trading strategy? Strategic Long/Short Bond Trading Source: Flexible Plan Investments, Ltd. Research Department Estimates

26. Disclosures "Model Account" Rate of Return Report “Model Account” results for the identified investment management strategy shown are time weighted geometrically linked returns. Except where noted, statistics are taken from single strategy accounts and are representative of our largest mutual fund and variable annuity holdings. These returns reflect actual accounts and dates of Flexible Plan's buy and sell signals. If an account terminates during a period, an alternative single account is substituted. Selection of accounts to serve as “model accounts” is based on the longevity of the account and least number of additions and withdrawals. Accordingly, many of the single accounts serving as ‘models’ are titled in the name of Flexible Plan’s President and controlling shareholder, a person related to Flexible Plan. If single strategy account histories are unavailable, statistics applicable to such accounts are derived from the exchange history files of each strategy used. Actual buy-sell trading signals and pricing are used in conjunction with such files to create the applicable statistics for each model account. These exchange-history derived returns are believed representative of each strategy’s actual results, but the results do not represent the actual experience of any client during the period. Therefore, these results may not reflect the impact that material economic and market factors might have had on the results. Nor do they reflect any problems of execution or pricing that may have been encountered in the actual implementation of the buy and sell signals shown in the exchange history files, the effect of which has not been determined, and may be indeterminable. Enhancements have been made in our methodologies on numerous occasions, which are believed to have had a positive effect on returns. The amount is not precisely quantifiable, but as strategy actual buy and sell signals are used, to the extent described, the effect of these enhancements is reflected. Efforts to develop indicators are ongoing and may result in further changes. Dividends are reinvested. Utilizing performance between selected dates may not be indicative of overall performance of a profile since the dates chosen by the operator of the program may have been selected to present optimum performance and may not be representative of investment performance of any profile during a different period. Inquiry for current results is always advised. Mutual fund or annuity results will vary based upon their volatility as they relate to the S&P 500 Index or other indices that may be shown. Specific mutual funds, sub-accounts or indices may materially outperform or under perform these results. Various mutual funds or sub-accounts used in any model account may no longer be available due to the result of advisor's, sponsor's, or fund advisor's periodic review, fund consolidations and/or exchange conditions imposed by the funds or annuity. References to popular market indexes are included to demonstrate the market environment during the period shown and are not intended as 'benchmarks.' Index returns are after dividends. Since Index dividends are posted after the end of each month, they are retroactively prorated on a daily basis (which tends to understate returns if the end date range is inclusive of the current partial month). The Dow Jones Corporate Bond Index includes fixed rate debt issues rated investment grade or higher by national rating services. Investments by bond funds utilized in generating the above returns may not be similarly rated. The investment program for the accounts included in the profiles includes trading and investment in securities in addition to those that may be included in the S&P 500. Such indexes may not be comparable to the identified investment strategies due to the differences between the indexes' and the strategies' objectives, diversification, represented industries, number and type of component investments, their volatility and the weight ascribed to them. No index is a directly tradable investment. After Fees If this presentation is calculated with the maximum current management fee, the maximum current management fee in effect is 2.6%. Prior to December 31, 1995, Classic fees were deducted quarterly at the rate of 2.8% annually and at 2.6% thereafter. Effective January 1, 1996, actual fees varied between 0.9 and 2.6% annually, depending on assets under management, and are billed quarterly. Strategic Solutions and Managed Solutions and, effective July 1, 2003, Evolution fees are deducted quarterly, in arrears at the rate of 2.6% annually, with pro-ration of partial periods. Actual management fees will vary between 1.0% and 2.6% annually. Returns for certain programs/product families are shown before withdrawal of a maximum establishment fee of 1.2% unless the selected date range includes the inception date (start date) and if the solicitor firm allows the use of an establishment fee. WPA strategies also include a Portfolio Fee deducted quarterly in arrears at a rate of 0.60% annually. Schwab (Load) ETF Market Leaders Strategy accounts include ETF trading commissions of $860 annually prorated and applied quarterly. All mutual fund fees and expenses are included to the extent they are reflected in net asset value; other fees may apply. If a front-end fund purchase is contemplated, any commission charged should be deducted. As individual tax rates vary, taxes have not been considered.

27. Before Fees, or Reduced Fees If this presentation is calculated without the maximum current management fee, the investment returns may be inflated and this presentation is not for public distribution. It is to be used solely in “one on one” presentations where clients or prospective client has full opportunity to discuss the types and amounts of fees and expenses. Returns would be reduced by such payments and the impact would be magnified by the effect of compounding if such payments were withdrawn from the account. For example, the payment of annual advisory fees of 2% of the year end account values would reduce a gross five-year compound annual rate of return of 8.5% to 6.3%. On a cumulative basis using such assumptions, $100,000 would grow to $135,900, versus $150,400 without fees. The payment of an establishment fee of 1.2% of the initial account value would reduce a gross five-year compound annual rate of return of 6.3% to 6.1%. On a cumulative basis using such assumptions, $100,000 would grow to $134,300 versus $135,900. ASSET CLASS RISK CONSIDERATIONS US and Global Bonds: All investments involve risk. Special risks associated with investing in bonds include fluctuations in interest rates, inflation, declining markets, duration, call and credit risk. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity. Commodities: Concentrating investments in natural resources industries can be affected significantly by events relating to those industries, such as variations in the commodities markets, weather, disease, embargoes, international, political and economic developments, the success of exploration projects, tax and other government regulations and other factors. US and Global Real Estate: Investments in Real Estate are subject to changes in economic conditions, credit risk and interest rate fluctuations Global Currencies: Foreign currency exchange rates may fluctuate significantly over short periods of time. They generally are determined by supply and demand in the foreign exchange markets and relative merits of investments in different countries, actual or perceived changes in interest rates, and other complex factors. Currency exchange rates also can be affected unpredictably by intervention (or the failure to intervene) by U.S. or foreign governments or central banks, or by currency controls or political developments. Long / Short Directional: Portfolio may invest in derivative investments such as futures, contracts, options, swaps, and forward currency exchange contracts that may be illiquid or increase losses due to the use of leveraged positions. US and Global Equities: In addition to the foreign investment risks noted above, the principal risks associated with equities include market, portfolio management, and sector risks. Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by contacting your financial advisor. Please read the prospectus carefully before investing. Investment value will fluctuate, and shares, when redeemed, may be worth more or less than original cost. Performance for the period, generally encompassing 1999 and the first quarter of 2000 was driven by substantial price appreciation in a small number of equity issues, notably in technology sectors, traded primarily on the NASDAQ. Such performance is historical information and should not be relied upon as representative of investment performance of any strategy to the current date nor be extrapolated into expectations for the future. Inquiry for current results is advised, in light of the adverse market performance of many indices commencing in 2000. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Inherent in any investment is the potential for loss as well as the potential for gain. A list of all recommendations made within the immediately preceding year is available upon written request. Please refer to Flexible Plan's ADV brochure for a complete description of fees and expenses applicable to managed accounts. FPI 0613