Multi-Hedge Strategies Fund | ||||||||
RYDEX VARIABLE TRUST Multi-Hedge Strategies Fund (the Fund) Supplement dated March 11, 2013 to the currently effective Statutory and Summary Prospectuses dated May 1, 2012, as supplemented from time to time
This supplement provides new and additional information beyond that contained in the Statutory and Summary Prospectuses (together, the Prospectuses) listed above and should be read in conjunction with the Prospectuses.
Effective immediately, the discussion of the Funds principal investment strategies and the Funds principal risks are revised as described below to reflect the likelihood of the Fund obtaining leverage through the use of borrowings. The changes to the Funds principal investment strategies will have no impact on the Funds investment objective and investment policies. |
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Under the heading Principal Investment Strategies in the Funds Fund Summary section, the following changes apply:
The Fund may use leverage subject to internally imposed investment constraints designed to limit the amount of loss resulting from such leverage.
The Fund may use leverage to the extent permitted by applicable law by entering into borrowing transactions (principally lines of credit) for investment purposes. The fourth full paragraph now reads as follows: The Fund may be long or short in a broad mix of financial assets including small, mid, and large capitalization U.S. and foreign common stocks, currencies, commodities, futures, options, swap agreements, high yield securities, securities of other investment companies, American Depositary Receipts (ADRs), exchange-traded funds (ETFs), and corporate debt. Certain of the Funds derivative investments may be traded in the over-the-counter (OTC) market. The Fund may hold U.S. government securities or cash equivalents to collateralize its derivative positions. The Fund also may enter into repurchase agreements with counterparties that are deemed to present acceptable credit risks. The Fund may use leverage to the extent permitted by applicable law by entering into borrowing transactions (principally lines of credit) for investment purposes. In an effort to ensure that the Fund is fully invested on a day-to-day basis, the Fund may conduct any necessary trading activity at or just prior to the close of the U.S. financial markets. The Fund is non-diversified and, therefore, may invest a greater percentage of its assets in a particular issuer in comparison to a diversified fund. |
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Under the heading Principal Risks in the Funds Fund Summary section, the following changes apply:
Borrowing Risk The Fund may borrow for several purposes, including investment purposes (i.e., to purchase additional portfolio securities). The Funds borrowings, which would be in the form of loans from banks, may be on a secured or unsecured basis and at fixed or variable rates of interest. The Funds ability to obtain leverage through borrowings is dependent upon its ability to establish and maintain an appropriate line of credit. Borrowing also will cost the Fund interest expense and other fees. The cost of borrowing may reduce the Funds return. In addition to any more stringent terms imposed by a lender, the 1940 Act requires the Fund to maintain continuous asset coverage of not less than 300% with respect to all borrowings. This would allow the Fund to borrow for such purposes an amount equal to as much as 33 1/3% of the value of its total assets. The Fund will borrow only if the value of the Funds assets, including borrowings, is equal to at least 300% of all borrowings, including the proposed borrowing. If at any time the Fund should fail to meet this 300% coverage requirement, within three business days, the Fund will seek to reduce its borrowings to meet the requirement. The Fund may be required to dispose of portfolio investments on unfavorable terms if market fluctuations reduce its asset coverage to less than 300%.
Leveraging Risk The Fund derives substantially all of its commodities exposure from its investment in derivatives and other financial instruments that provide leveraged exposure. The Funds investment in these instruments generally requires a small investment relative to the amount of investment exposure assumed. As a result, such investments may give rise to losses that exceed the amount invested in those instruments. Because such instruments are an integral part of the Funds investment strategy, the use of such instruments may expose the Fund to potentially dramatic losses or gains in the value of its portfolio. The cost of investing in such instruments generally increases as interest rates increase, which will lower the Funds return. Leverage may also arise through the use of borrowings for investment purposes. To the extent the Fund purchases securities while it has outstanding borrowings, it is using leverage, i.e., using borrowed funds for investment. Leveraging will exaggerate the effect on the net asset value of any increase or decrease in the market value of the Funds portfolio. Money borrowed for leveraging will be subject to interest costs that may or may not be recovered by appreciation of the securities purchased. The 1940 Act limits the Fund from borrowing in an amount no more than 33 1/3% of its assets. |
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PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. SUMVTMH-SUP0313x0513 |
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Multi-Hedge Strategies Fund | ||||||||
Under the heading Principal Investment Strategies in the Funds Fund Summary section, the following changes apply:
The Fund may use leverage subject to internally imposed investment constraints designed to limit the amount of loss resulting from such leverage.
The Fund may use leverage to the extent permitted by applicable law by entering into borrowing transactions (principally lines of credit) for investment purposes. The fourth full paragraph now reads as follows: The Fund may be long or short in a broad mix of financial assets including small, mid, and large capitalization U.S. and foreign common stocks, currencies, commodities, futures, options, swap agreements, high yield securities, securities of other investment companies, American Depositary Receipts (ADRs), exchange-traded funds (ETFs), and corporate debt. Certain of the Funds derivative investments may be traded in the over-the-counter (OTC) market. The Fund may hold U.S. government securities or cash equivalents to collateralize its derivative positions. The Fund also may enter into repurchase agreements with counterparties that are deemed to present acceptable credit risks. The Fund may use leverage to the extent permitted by applicable law by entering into borrowing transactions (principally lines of credit) for investment purposes. In an effort to ensure that the Fund is fully invested on a day-to-day basis, the Fund may conduct any necessary trading activity at or just prior to the close of the U.S. financial markets. The Fund is non-diversified and, therefore, may invest a greater percentage of its assets in a particular issuer in comparison to a diversified fund. |
||||||||
Under the heading Principal Risks in the Funds Fund Summary section, the following changes apply:
Borrowing Risk The Fund may borrow for several purposes, including investment purposes (i.e., to purchase additional portfolio securities). The Funds borrowings, which would be in the form of loans from banks, may be on a secured or unsecured basis and at fixed or variable rates of interest. The Funds ability to obtain leverage through borrowings is dependent upon its ability to establish and maintain an appropriate line of credit. Borrowing also will cost the Fund interest expense and other fees. The cost of borrowing may reduce the Funds return. In addition to any more stringent terms imposed by a lender, the 1940 Act requires the Fund to maintain continuous asset coverage of not less than 300% with respect to all borrowings. This would allow the Fund to borrow for such purposes an amount equal to as much as 33 1/3% of the value of its total assets. The Fund will borrow only if the value of the Funds assets, including borrowings, is equal to at least 300% of all borrowings, including the proposed borrowing. If at any time the Fund should fail to meet this 300% coverage requirement, within three business days, the Fund will seek to reduce its borrowings to meet the requirement. The Fund may be required to dispose of portfolio investments on unfavorable terms if market fluctuations reduce its asset coverage to less than 300%.
Leveraging Risk The Fund derives substantially all of its commodities exposure from its investment in derivatives and other financial instruments that provide leveraged exposure. The Funds investment in these instruments generally requires a small investment relative to the amount of investment exposure assumed. As a result, such investments may give rise to losses that exceed the amount invested in those instruments. Because such instruments are an integral part of the Funds investment strategy, the use of such instruments may expose the Fund to potentially dramatic losses or gains in the value of its portfolio. The cost of investing in such instruments generally increases as interest rates increase, which will lower the Funds return. Leverage may also arise through the use of borrowings for investment purposes. To the extent the Fund purchases securities while it has outstanding borrowings, it is using leverage, i.e., using borrowed funds for investment. Leveraging will exaggerate the effect on the net asset value of any increase or decrease in the market value of the Funds portfolio. Money borrowed for leveraging will be subject to interest costs that may or may not be recovered by appreciation of the securities purchased. The 1940 Act limits the Fund from borrowing in an amount no more than 33 1/3% of its assets. |
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PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. SUMVTMH-SUP0313x0513 |
Document And Entity Information
|
0 Months Ended |
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Mar. 11, 2013
|
|
Document And Entity Information Element | |
Document Type | 497 |
Document Period End Date | Mar. 11, 2013 |
Registrant Name | RYDEX VARIABLE TRUST |
Central Index Key | 0001064046 |
Amendment Flag | false |
Document Creation Date | Mar. 11, 2013 |
Document Effective Date | Mar. 11, 2013 |
Prospectus Date | May 01, 2012 |
Label | Element | Value | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
[RiskReturnAbstract] | rr_RiskReturnAbstract | |||||||||
Document Type | dei_DocumentType | 497 | ||||||||
Document Period End Date | dei_DocumentPeriodEndDate | Mar. 11, 2013 | ||||||||
Registrant Name | dei_EntityRegistrantName | RYDEX VARIABLE TRUST | ||||||||
Central Index Key | dei_EntityCentralIndexKey | 0001064046 | ||||||||
Amendment Flag | dei_AmendmentFlag | false | ||||||||
Document Creation Date | dei_DocumentCreationDate | Mar. 11, 2013 | ||||||||
Document Effective Date | dei_DocumentEffectiveDate | Mar. 11, 2013 | ||||||||
Prospectus Date | rr_ProspectusDate | May 01, 2012 | ||||||||
Multi-Hedge Strategies Fund
|
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[RiskReturnAbstract] | rr_RiskReturnAbstract | |||||||||
Supplement [Text Block] | rvt_SupplementTextBlock | RYDEX VARIABLE TRUST Multi-Hedge Strategies Fund (the Fund) Supplement dated March 11, 2013 to the currently effective Statutory and Summary Prospectuses dated May 1, 2012, as supplemented from time to time
This supplement provides new and additional information beyond that contained in the Statutory and Summary Prospectuses (together, the Prospectuses) listed above and should be read in conjunction with the Prospectuses.
Effective immediately, the discussion of the Funds principal investment strategies and the Funds principal risks are revised as described below to reflect the likelihood of the Fund obtaining leverage through the use of borrowings. The changes to the Funds principal investment strategies will have no impact on the Funds investment objective and investment policies. |
||||||||
Strategy Narrative [Text Block] | rr_StrategyNarrativeTextBlock | Under the heading Principal Investment Strategies in the Funds Fund Summary section, the following changes apply:
The Fund may use leverage subject to internally imposed investment constraints designed to limit the amount of loss resulting from such leverage.
The Fund may use leverage to the extent permitted by applicable law by entering into borrowing transactions (principally lines of credit) for investment purposes. The fourth full paragraph now reads as follows: The Fund may be long or short in a broad mix of financial assets including small, mid, and large capitalization U.S. and foreign common stocks, currencies, commodities, futures, options, swap agreements, high yield securities, securities of other investment companies, American Depositary Receipts (ADRs), exchange-traded funds (ETFs), and corporate debt. Certain of the Funds derivative investments may be traded in the over-the-counter (OTC) market. The Fund may hold U.S. government securities or cash equivalents to collateralize its derivative positions. The Fund also may enter into repurchase agreements with counterparties that are deemed to present acceptable credit risks. The Fund may use leverage to the extent permitted by applicable law by entering into borrowing transactions (principally lines of credit) for investment purposes. In an effort to ensure that the Fund is fully invested on a day-to-day basis, the Fund may conduct any necessary trading activity at or just prior to the close of the U.S. financial markets. The Fund is non-diversified and, therefore, may invest a greater percentage of its assets in a particular issuer in comparison to a diversified fund. |
||||||||
Risk Narrative [Text Block] | rr_RiskNarrativeTextBlock |
Under the heading Principal Risks in the Funds Fund Summary section, the following changes apply:
Borrowing Risk The Fund may borrow for several purposes, including investment purposes (i.e., to purchase additional portfolio securities). The Funds borrowings, which would be in the form of loans from banks, may be on a secured or unsecured basis and at fixed or variable rates of interest. The Funds ability to obtain leverage through borrowings is dependent upon its ability to establish and maintain an appropriate line of credit. Borrowing also will cost the Fund interest expense and other fees. The cost of borrowing may reduce the Funds return. In addition to any more stringent terms imposed by a lender, the 1940 Act requires the Fund to maintain continuous asset coverage of not less than 300% with respect to all borrowings. This would allow the Fund to borrow for such purposes an amount equal to as much as 33 1/3% of the value of its total assets. The Fund will borrow only if the value of the Funds assets, including borrowings, is equal to at least 300% of all borrowings, including the proposed borrowing. If at any time the Fund should fail to meet this 300% coverage requirement, within three business days, the Fund will seek to reduce its borrowings to meet the requirement. The Fund may be required to dispose of portfolio investments on unfavorable terms if market fluctuations reduce its asset coverage to less than 300%.
Leveraging Risk The Fund derives substantially all of its commodities exposure from its investment in derivatives and other financial instruments that provide leveraged exposure. The Funds investment in these instruments generally requires a small investment relative to the amount of investment exposure assumed. As a result, such investments may give rise to losses that exceed the amount invested in those instruments. Because such instruments are an integral part of the Funds investment strategy, the use of such instruments may expose the Fund to potentially dramatic losses or gains in the value of its portfolio. The cost of investing in such instruments generally increases as interest rates increase, which will lower the Funds return. Leverage may also arise through the use of borrowings for investment purposes. To the extent the Fund purchases securities while it has outstanding borrowings, it is using leverage, i.e., using borrowed funds for investment. Leveraging will exaggerate the effect on the net asset value of any increase or decrease in the market value of the Funds portfolio. Money borrowed for leveraging will be subject to interest costs that may or may not be recovered by appreciation of the securities purchased. The 1940 Act limits the Fund from borrowing in an amount no more than 33 1/3% of its assets. |
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Supplement Closing [Text Block] | rvt_SupplementClosingTextBlock | PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. SUMVTMH-SUP0313x0513 |