ETF's
Exchanged Traded Funds (ETF's) give you the flexibility and diversification you need to actively manage your money. ETF's represent shares of ownership in either fund, unit investment trusts, or depository receipts that hold portfolios of common stocks that closely track the performance and dividend yield of specific indices. Currently, ETF's track broad market sectors or international-based indices. ETF's give investors the opportunity to buy (long position) or sell (short position) an entire portfolio of stocks in a single security as easily as buying or selling one share of stock.

One of the major benefits of trading ETF's is that they are diversified. ETFs represent or track a basket of stocks or securities. Currently, there are ETF's that track major indices, broad sectors, groups, foreign countries, and even bond portfolios. Because they represent an aggregated basket of securities, your investment is diversified and not tied to the bad earnings of an individual stock.

FundSpectrum-ST works best with securities that are correlated to the Technology (Nasdaq 100) index and somewhat to a lesser extend to the Small Cap (Russell 2000) index.



Index Funds
Over the last several years, two mutual fund families have sprung up that promote the use of active management or market timing. Rydex and Profunds are the main leaders in this segment.
These modern fund families have also added leverage to their funds so that their returns will be greater than the returns of the index they benchmark to. To allow fund investors to play both sides of the market, each of these fund families has developed a series of funds that are inversely correlated to their benchmark index. In other words, when the Nasdaq 100 index decreases by 10%, their Inverse Nasdaq 100 index fund will increase by 10%. These inverse funds allow you to "short" the market when you expect the market is going to decrease. These fund families are a great investment vehicle to be utilized with our investment system. Profunds has now also introduced index based ETF's and their inverses, called ProShares.



Model Portfolio's
FundSpectrum short term timing signal can be used to improve the results of investing in a variety of different Index Funds. If these funds have a high correlation to the Technology or SmallCap indices, the results will be better. In the table below, we list the annual performance for various "model portfolio's" based on the FST historical signal dates. These portfolio's contain "Long" and "Inverse" positions of index funds and ETF's and are correlateable to the NASDAQ 100 and Russell 2000 indices from the time we started using our investment model in 2003.

If your objective is to produce high annual returns with acceptable low drawdowns, then trading these specific funds will be most suited for you. The portfolio's listed below are updated on a daily basis in our Member's Section.

PROFUNDS
Fund	Long	Short	% Drawdown	Annual Return %
Ultra SmallCap	UAPIX	UCPIX	29.9	86
Small Cap	SLPIX	SHPIX	14.2	50
Ultra MidCap	UMPIX	USPIX	17.5	122
Ultra OTC	UOPIX	USPIX	18.7	142
Ultra Sector Internet	INPIX	UCPIX	18.6	95

RYDEX
Fund	Long	Short	% Drawdown	Annual Return %
Medius	RYMDX	RYAIX	10.6	70
Velocity	RYVYX	RYVNX	18.6	140
Russell 2000 Advantage	RYMKX	RYVNX	21.5	118
Russell 2000	RYRHX	RYSHX	9.5	85
Dynamic Russell 2000	RYRSX	RYIRX	18.8	189
OTC	RYOCX	RYAIX	8.6	59

ETF / ProShares
Fund	Long	Short	% Drawdown	Annual Return %
Nasdaq-100	QQQQ	SOPIX	8.5	60
Russell 2000	IWM	SHPIX	13.9	52
ProShares -Ultra QQQQ	QLD		N/A	N/A
ProShares -Short QQQQ		PSQ	N/A	N/A
ProShares -Ultra Short QQQQ		QID	N/A	N/A

Note: Clicking on the "Long" fund in the tables above, will list the individual trades.