Inside Oil's Wild Ride

The story of one mutual fund's rise and fall reflects the broader role that financial firms now play in the energy markets

Two years ago, David Reilly and other executives at the money management firm Rydex Investments saw a new opportunity for their firm's clients. The Rockville (Md.) firm knew that institutional investors were putting some of their money into commodities as a way to reduce risk and boost returns in their portfolios—and Rydex wanted to make the same strategy available to individual investors. Making the opportunities of institutions available to the general public has been a firm hallmark for years. In addition, two years ago, prices for a number of commodities, particularly energy, were taking off. Reilly and his fellow executives created a new mutual fund, Rydex Commodities (RYMEX, RYMJX), which would enable investors with as little as $25,000 to have a stake in the future price movements of gold, cattle, and crude oil.

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