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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-01136
SECURITY EQUITY FUND
(Exact name of registrant as specified in charter)
ONE SECURITY BENEFIT PLACE, TOPEKA, KANSAS 66636-0001
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
RICHARD M. GOLDMAN, PRESIDENT
SECURITY EQUITY FUND
ONE SECURITY BENEFIT PLACE
TOPEKA, KANSAS 66636-0001
(Name and address of agent for service)
SECURITY EQUITY FUND
ONE SECURITY BENEFIT PLACE
TOPEKA, KANSAS 66636-0001
(Name and address of agent for service)
Registrant’s telephone number, including area code: (785) 438-3000
Date of fiscal year end: September 30
Date of reporting period: March 31, 2011
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. §3507.
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Item 1. Reports to Stockholders.
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MARCH 31, 2011 SEMI-ANNUAL REPORT EQUITY FUNDS Rydex SGI Equity Fund AN Cap Value Fund Alpha Opportunity Fund Large Cap Core Fund Global Fund Global Institutional Fund Mid Cap Value Fund Mid Cap Value Institutional Fund Large Cap Concentrated Growth Fund Small Cap Growth Fund Small Cap Value Fund Rydex SGI Large Cap Value Fund Large Cap Value Fund Large Cap Value Institutional Fund Rydex SGI Mid Cap Growth Fund |
Table of Contents
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With Rydex | SGI eDelivery you can:
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It’s easy to enroll:
1/ | Visit www.rydex-sri.com and select “individual investors” |
2/ | Click on “eDelivery Sign-Up” | ![]() |
3/ | Follow the simple enrollment instructions |
If you have questions about Rydex|SGI eDelivery services, contact one of our Shareholder Service Representatives at 800.820.0888.
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This report and the financial statements contained herein are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.
Distributed by Rydex Distributors, LLC.
RYDEX|SGI EQUITY FUND
RYDEX|SGI LARGE CAP VALUE FUND
RYDEX|SGI MID CAP GROWTH FUND
RYDEX|SGI LARGE CAP VALUE FUND
RYDEX|SGI MID CAP GROWTH FUND
March 31, 2011
Semi-Annual Report
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THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 1
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CHAIRMAN’S LETTER
DEAR SHAREHOLDER:
The U.S. economic recovery continued through the 12 months ended March 31, 2011, despite a succession of headwinds. Last spring was the European sovereign debt crisis, which eased only with the establishment of a euro 750 billion rescue fund. Poor reports on U.S. manufacturing and private sector job growth raised investor fears of a double-dip recession in mid-year. Concern that the recovery was not self-sustaining led the U.S. Federal Reserve to undertake a second round of quantitative easing in the last part of 2010 to keep long-term rates low and spur economic growth. The Fed’s support of asset prices contributed to a 25% run-up in U.S. stocks through March 2011, amid a jump in oil prices, natural and nuclear disasters in Japan and unrest in the Mid East and North Africa.
Investors have come to believe that much of the U.S. market and economic recovery has been driven by the unprecedented government stimulus measures. Still, national output is at an all time high, exports rose to a record in January and S&P 500® Index* earnings are double what they were two years ago—all of which has enhanced U.S. equity market performance over the past 12 months. Broad market measures were up by 15% for the period, while international markets were up about 10%. Reflecting their growing confidence in the economy, investors went out on the risk/reward curve, leading small stock indices to outperform the broader market for the past year; from a style perspective, growth outperformed value across all capitalizations, with the differential widening the lower the cap size.
The Fed’s decision to keep short-term rates at record lows and to hold down long-term rates through its quantitative easing program spurred demand for fixed-income spread product for most of the past year. This resulted in good performance across most fixed income sectors, including investment grade corporate bonds and especially high-yield bonds. The long Treasury market remained stable, with good returns, while yields on benchmark 10-year Treasuries began rising in the past few months in tandem with improving economic reports.
One of the threats to the economic recovery is inflation. Higher food and energy costs have been driving up consumer prices—so-called “headline” inflation—but these have not translated into a broader increase in inflation that would prompt the Fed to act. Concerns about slowing growth worldwide and the expected shift away from the Fed’s bond-buying strategy had led many economists to lower growth forecasts for 2011, both in the U.S. and globally. The Fed’s fiscal and monetary stimulus measures have resulted in the country outspending revenues and adding substantially to the national debt. This, along with the potential for a double-dip in housing and a persistently poor labor market, has made many investors sensitive to market sentiment and volatility.
U.S. economic growth, while not robust, has been positive for seven consecutive quarters, strong enough to overcome a number of headwinds. With the help of massive government stimulus, there is optimism that the recovery from the financial crisis and ensuing recession is becoming self-sustaining. The end of Fed easing could signal that the policymakers are comfortable with the strength of the expansion, and believe that house prices and joblessness may be hitting bottom and be poised to recover.
Sincerely,
Richard Goldman
President and Chairman, Rydex|SGI Funds
President and Chairman, Rydex|SGI Funds
2 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
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CHAIRMAN’S LETTER (concluded)
*Standard & Poor’s 500 Index (S&P 500®) — a capitalization-weighted index covering 500 industrial, utility, transportation and financial companies of the U.S. markets (mostly NYSE Euronext issues).
Performance displayed represents past performance which is no guarantee of future results. Of course, fund performance is subject to daily market volatility and may be better or worse since the end of the last quarter. For up-to-date fund performance, call us at 800.820.0888 or visit www.rydex-sgi.com.
Read each fund’s prospectus and summary prospectus (if available) carefully before investing. It contains the fund’s investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at www.rydex-sgi.com or call 800.820.0888.
Rydex|SGI funds are distributed by Rydex Distributors, LLC (RDL). Security Investors, LLC (SI) is a registered investment advisor, and does business as Security Global Investors® and Rydex Investments. SI and RDL are affiliates and are subsidiaries of Security Benefit Corporation, which is wholly owned by Guggenheim SBC Holdings, LLC, a special purpose entity managed by an affiliate of Guggenheim Partners, LLC, a diversified financial services firm with more than $100 billion in assets under supervision.
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 3
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INFORMATION ABOUT YOUR FUND EXPENSES (Unaudited)
March 31, 2011
March 31, 2011
Calculating your ongoing Fund expenses
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments; contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service fees (12b-1); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 30, 2010 through March 31, 2011.
Actual Expenses
The first table provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second table provides information about hypothetical account values and hypothetical expenses based on the Fund actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the second line for each class of shares is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
4 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
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INFORMATION ABOUT YOUR FUND EXPENSES (Unaudited) (continued)
March 31, 2011
March 31, 2011
Beginning | Ending | Expenses | ||||||||||||||||||
Expense | Fund | Account Value | Account Value | Paid During | ||||||||||||||||
Ratio1 | Return | September 30, 2010 | March 31, 2011 | the Period2 | ||||||||||||||||
Table 1. Based on actual Fund return3 | ||||||||||||||||||||
All Cap Value Fund | ||||||||||||||||||||
A-Class | 1.27 | % | 19.98 | % | $ | 1,000.00 | $ | 1,199.82 | $ | 6.97 | ||||||||||
C-Class | 2.02 | % | 19.48 | % | 1,000.00 | 1,194.78 | 11.05 | |||||||||||||
Institutional Class | 1.02 | % | 20.20 | % | 1,000.00 | 1,201.96 | 5.60 | |||||||||||||
Alpha Opportunity Fund5 | ||||||||||||||||||||
A-Class | 2.17 | % | 28.32 | % | 1,000.00 | 1,283.20 | 12.35 | |||||||||||||
B-Class | 2.92 | % | 27.91 | % | 1,000.00 | 1,279.10 | 16.59 | |||||||||||||
C-Class | 2.91 | % | 27.80 | % | 1,000.00 | 1,278.00 | 16.53 | |||||||||||||
Institutional Class | 1.91 | % | 28.51 | % | 1,000.00 | 1,285.10 | 10.88 | |||||||||||||
Large Cap Core Fund | ||||||||||||||||||||
A-Class | 1.44 | % | 19.71 | % | 1,000.00 | 1,197.07 | 7.90 | |||||||||||||
B-Class | 2.19 | % | 18.89 | % | 1,000.00 | 1,188.89 | 11.96 | |||||||||||||
C-Class | 2.19 | % | 19.28 | % | 1,000.00 | 1,192.80 | 11.97 | |||||||||||||
Global Fund | ||||||||||||||||||||
A-Class | 1.99 | % | 14.08 | % | 1,000.00 | 1,140.85 | 10.60 | |||||||||||||
B-Class4 | 1.74 | % | 14.16 | % | 1,000.00 | 1,141.63 | 9.27 | |||||||||||||
C-Class | 2.74 | % | 13.58 | % | 1,000.00 | 1,135.76 | 14.57 | |||||||||||||
Global Institutional Fund | 1.00 | % | 14.38 | % | 1,000.00 | 1,143.78 | 5.34 | |||||||||||||
Mid Cap Value Fund | ||||||||||||||||||||
A-Class | 1.31 | % | 19.84 | % | 1,000.00 | 1,198.39 | 7.20 | |||||||||||||
B-Class | 2.06 | % | 19.35 | % | 1,000.00 | 1,193.48 | 11.29 | |||||||||||||
C-Class | 2.06 | % | 19.36 | % | 1,000.00 | 1,193.60 | 11.28 | |||||||||||||
Mid Cap Value Institutional Fund | 0.90 | % | 19.99 | % | 1,000.00 | 1,199.93 | 4.94 | |||||||||||||
Large Cap Concentrated Growth Fund | ||||||||||||||||||||
A-Class | 1.35 | % | 20.05 | % | 1,000.00 | 1,200.52 | 7.41 | |||||||||||||
B-Class | 2.10 | % | 19.54 | % | 1,000.00 | 1,195.40 | 11.49 | |||||||||||||
C-Class | 2.10 | % | 19.46 | % | 1,000.00 | 1,194.56 | 11.49 | |||||||||||||
Small Cap Growth Fund | ||||||||||||||||||||
A-Class | 2.24 | % | 24.90 | % | 1,000.00 | 1,248.98 | 12.56 | |||||||||||||
B-Class | 3.00 | % | 24.52 | % | 1,000.00 | 1,245.16 | 16.77 | |||||||||||||
C-Class | 3.00 | % | 24.50 | % | 1,000.00 | 1,245.03 | 16.77 | |||||||||||||
Small Cap Value Fund | ||||||||||||||||||||
A-Class | 1.30 | % | 24.17 | % | 1,000.00 | 1,241.72 | 7.27 | |||||||||||||
C-Class | 2.05 | % | 23.66 | % | 1,000.00 | 1,236.57 | 11.43 | |||||||||||||
Institutional Class | 1.05 | % | 24.25 | % | 1,000.00 | 1,242.46 | 5.87 | |||||||||||||
Large Cap Value Fund | ||||||||||||||||||||
A-Class | 1.15 | % | 19.64 | % | 1,000.00 | 1,196.40 | 6.30 | |||||||||||||
B-Class4 | 0.90 | % | 19.65 | % | 1,000.00 | 1,196.50 | 4.93 | |||||||||||||
C-Class | 1.90 | % | 19.02 | % | 1,000.00 | 1,190.24 | 10.37 | |||||||||||||
Large Cap Value Institutional Fund | 0.96 | % | 20.17 | % | 1,000.00 | 1,201.68 | 5.27 | |||||||||||||
Mid Cap Growth Fund | ||||||||||||||||||||
A-Class | 1.84 | % | 18.48 | % | 1,000.00 | 1,184.78 | 10.02 | |||||||||||||
B-Class | 2.59 | % | 17.97 | % | 1,000.00 | 1,179.67 | 14.06 | |||||||||||||
C-Class | 2.60 | % | 18.11 | % | 1,000.00 | 1,181.10 | 14.12 |
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 5
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INFORMATION ABOUT YOUR FUND EXPENSES (Unaudited) (concluded)
March 31, 2011
March 31, 2011
Beginning | Ending | Expenses | ||||||||||||||||||
Expense | Fund | Account Value | Account Value | Paid During | ||||||||||||||||
Ratio1 | Return | September 30, 2010 | March 31, 2011 | the Period2 | ||||||||||||||||
Table 2. Based on hypothetical 5% return (before expenses) | ||||||||||||||||||||
All Cap Value Fund | ||||||||||||||||||||
A-Class | 1.27 | % | 5.00 | % | $ | 1,000.00 | $ | 1,018.60 | $ | 6.39 | ||||||||||
C-Class | 2.02 | % | 5.00 | % | 1,000.00 | 1,014.86 | 10.15 | |||||||||||||
Institutional Class | 1.02 | % | 5.00 | % | 1,000.00 | 1,019.85 | 5.14 | |||||||||||||
Alpha Opportunity Fund5 | ||||||||||||||||||||
A-Class | 2.17 | % | 5.00 | % | 1,000.00 | 1,014.11 | 10.90 | |||||||||||||
B-Class | 2.92 | % | 5.00 | % | 1,000.00 | 1,010.37 | 14.64 | |||||||||||||
C-Class | 2.91 | % | 5.00 | % | 1,000.00 | 1,010.42 | 14.59 | |||||||||||||
Institutional Class | 1.91 | % | 5.00 | % | 1,000.00 | 1,015.41 | 9.60 | |||||||||||||
Large Cap Core Fund | ||||||||||||||||||||
A-Class | 1.44 | % | 5.00 | % | 1,000.00 | 1,017.75 | 7.26 | |||||||||||||
B-Class | 2.19 | % | 5.00 | % | 1,000.00 | 1,014.01 | 11.00 | |||||||||||||
C-Class | 2.19 | % | 5.00 | % | 1,000.00 | 1,014.01 | 11.00 | |||||||||||||
Global Fund | ||||||||||||||||||||
A-Class | 1.99 | % | 5.00 | % | 1,000.00 | 1,015.01 | 9.97 | |||||||||||||
B-Class4 | 1.74 | % | 5.00 | % | 1,000.00 | 1,016.26 | 8.72 | |||||||||||||
C-Class | 2.74 | % | 5.00 | % | 1,000.00 | 1,011.27 | 13.72 | |||||||||||||
Global Institutional Fund | 1.00 | % | 5.00 | % | 1,000.00 | 1,019.95 | 5.04 | |||||||||||||
Mid Cap Value Fund | ||||||||||||||||||||
A-Class | 1.31 | % | 5.00 | % | 1,000.00 | 1,018.40 | 6.61 | |||||||||||||
B-Class | 2.06 | % | 5.00 | % | 1,000.00 | 1,014.66 | 10.37 | |||||||||||||
C-Class | 2.06 | % | 5.00 | % | 1,000.00 | 1,014.66 | 10.36 | |||||||||||||
Mid Cap Value Institutional Fund | 0.90 | % | 5.00 | % | 1,000.00 | 1,020.44 | 4.53 | |||||||||||||
Large Cap Concentrated Growth Fund | ||||||||||||||||||||
A-Class | 1.35 | % | 5.00 | % | 1,000.00 | 1,018.20 | 6.79 | |||||||||||||
B-Class | 2.10 | % | 5.00 | % | 1,000.00 | 1,014.46 | 10.55 | |||||||||||||
C-Class | 2.10 | % | 5.00 | % | 1,000.00 | 1,014.46 | 10.55 | |||||||||||||
Small Cap Growth Fund | ||||||||||||||||||||
A-Class | 2.24 | % | 5.00 | % | 1,000.00 | 1,013.76 | 11.25 | |||||||||||||
B-Class | 3.00 | % | 5.00 | % | 1,000.00 | 1,009.97 | 15.01 | |||||||||||||
C-Class | 3.00 | % | 5.00 | % | 1,000.00 | 1,009.97 | 15.01 | |||||||||||||
Small Cap Value Fund | ||||||||||||||||||||
A-Class | 1.30 | % | 5.00 | % | 1,000.00 | 1,018.45 | 6.54 | |||||||||||||
C-Class | 2.05 | % | 5.00 | % | 1,000.00 | 1,014.71 | 10.30 | |||||||||||||
Institutional Class | 1.05 | % | 5.00 | % | 1,000.00 | 1,019.70 | 5.29 | |||||||||||||
Large Cap Value Fund | ||||||||||||||||||||
A-Class | 1.15 | % | 5.00 | % | 1,000.00 | 1,019.20 | 5.79 | |||||||||||||
B-Class4 | 0.90 | % | 5.00 | % | 1,000.00 | 1,020.44 | 4.53 | |||||||||||||
C-Class | 1.90 | % | 5.00 | % | 1,000.00 | 1,015.46 | 9.55 | |||||||||||||
Large Cap Value Institutional Fund | 0.96 | % | 5.00 | % | 1,000.00 | 1,020.14 | 4.84 | |||||||||||||
Mid Cap Growth Fund | ||||||||||||||||||||
A-Class | 1.84 | % | 5.00 | % | 1,000.00 | 1,015.76 | 9.24 | |||||||||||||
B-Class | 2.59 | % | 5.00 | % | 1,000.00 | 1,012.02 | 12.99 | |||||||||||||
C-Class | 2.60 | % | 5.00 | % | 1,000.00 | 1,011.97 | 13.03 |
1 | Annualized | |
2 | Expenses are equal to the Fund’s annualized expense ratio, net of any applicable fee waivers or earnings credits, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). | |
3 | Actual cumulative return at net asset value for the period September 30, 2010 to March 31, 2011. | |
4 | B-Class shares of Global Fund and Large Cap Value Fund did not charge 12b-1 fees during the period. | |
5 | This ratio represents annualized net expenses, which include interest and dividend expense related to securities sold short. Excluding short dividend expense and prime broker interest expense, the operating expense ratio would be 0.06%, 0.06%, 0.05% and 0.05% lower in A-Class, B-Class, C-Class and Institutional Class, respectively. |
6 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
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Rydex|SGI Equity Fund
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211904.gif)
$10,000 Since Inception
This chart assumes a $10,000 investment in A-Class shares of All Cap Value Fund on October 3, 2008 (date of inception), reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 3000® Value Index is an unmanaged index that measures the performance of the broad value segment of the U.S. equity universe. It includes those Russell 3000® companies with lower price-to-book ratios and lower forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
SINCE | ||||||||
INCEPTION | ||||||||
1 YEAR | (10/03/08) | |||||||
A-Class Shares | 17.55 | % | 12.30 | % | ||||
A-Class Shares with sales charge | 10.81 | % | 9.66 | % | ||||
C-Class Shares | 16.71 | % | 11.48 | % | ||||
C-Class Shares with CDSC | 15.71 | % | 11.48 | % | ||||
Institutional Class Shares | 17.97 | % | 12.62 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Energy | 15.7 | % | ||
Financials | 14.9 | % | ||
Industrials | 14.0 | % | ||
Information Technology | 11.0 | % | ||
Consumer Discretionary | 9.7 | % | ||
Consumer Staples | 7.1 | % | ||
Health Care | 6.4 | % | ||
Materials | 4.5 | % | ||
Utilities | 3.3 | % | ||
Telecommunication Services | 1.0 | % | ||
Exchange Traded Funds | 7.5 | % | ||
Cash & Other Assets, Less Liabilities | 4.9 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 7
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SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | All Cap Value Fund | |
Shares | Value | |||||||
COMMON STOCKS† - 87.6% | ||||||||
Energy - 15.7% | ||||||||
Chevron Corp. | 860 | $ | 92,390 | |||||
ConocoPhillips | 960 | 76,665 | ||||||
Williams Companies, Inc. | 2,260 | 70,467 | ||||||
McDermott International, Inc.* | 1,968 | 49,967 | ||||||
Apache Corp. | 300 | 39,276 | ||||||
Halliburton Co. | 769 | 38,327 | ||||||
Global Industries Ltd.* | 3,724 | 36,458 | ||||||
Exxon Mobil Corp. | 390 | 32,811 | ||||||
Chesapeake Energy Corp. | 859 | 28,794 | ||||||
Southern Union Co. | 903 | 25,844 | ||||||
SandRidge Energy, Inc.* | 1,744 | 22,323 | ||||||
Gulfport Energy Corp.* | 580 | 20,967 | ||||||
Plains Exploration & Production Co.* | 500 | 18,115 | ||||||
Goodrich Petroleum Corp.* | 523 | 11,621 | ||||||
USEC, Inc.* | 2,005 | 8,822 | ||||||
Resolute Energy Corp.* | 284 | 5,152 | ||||||
Total Energy | 577,999 | |||||||
Financials - 14.9% | ||||||||
Berkshire Hathaway, Inc. — Class B* | 770 | 64,395 | ||||||
AON Corp. | 1,134 | 60,057 | ||||||
Wells Fargo & Co. | 1,872 | 59,342 | ||||||
Bank of New York Mellon Corp. | 1,730 | 51,675 | ||||||
JPMorgan Chase & Co. | 1,010 | 46,561 | ||||||
U.S. Bancorp | 1,440 | 38,059 | ||||||
Hanover Insurance Group, Inc. | 774 | 35,024 | ||||||
W.R. Berkley Corp. | 1,066 | 34,336 | ||||||
BB&T Corp. | 1,135 | 31,156 | ||||||
American Financial Group, Inc. | 620 | 21,712 | ||||||
Reinsurance Group of America, Inc. — Class A | 233 | 14,628 | ||||||
Fifth Street Finance Corp. | 990 | 13,217 | ||||||
Transatlantic Holdings, Inc. | 200 | 9,734 | ||||||
RenaissanceRe Holdings Ltd. | 140 | 9,659 | ||||||
Employers Holdings, Inc. | 459 | 9,483 | ||||||
Investors Real Estate Trust | 900 | 8,550 | ||||||
Associated Banc-Corp.1 | 544 | 8,078 | ||||||
Alleghany Corp.* | 23 | 7,765 | ||||||
Old National Bancorp | 713 | 7,643 | ||||||
First Marblehead Corp.* | 2,819 | 6,202 | ||||||
First Horizon National Corp. | 499 | 5,592 | ||||||
Wilmington Trust Corp. | 650 | 2,938 | ||||||
Total Financials | 545,806 | |||||||
Industrials - 14.0% | ||||||||
Equifax, Inc. | 3,165 | 122,960 | ||||||
United Technologies Corp. | 830 | 70,260 | ||||||
Babcock & Wilcox Co.* | 1,384 | 46,198 | ||||||
Quanta Services, Inc.* | 1,340 | 30,056 | ||||||
GeoEye, Inc.* | 600 | 24,948 | ||||||
USG Corp.* | 1,454 | 24,224 | ||||||
Parker Hannifin Corp. | 252 | 23,859 | ||||||
General Cable Corp.*,1 | 510 | 22,083 | ||||||
FedEx Corp. | 217 | 20,300 | ||||||
Covanta Holding Corp. | 1,100 | 18,788 | ||||||
Insituform Technologies, Inc. — Class A* | 680 | 18,190 | ||||||
FTI Consulting, Inc.* | 380 | 14,565 | ||||||
Orbital Sciences Corp.* | 655 | 12,393 | ||||||
Saia, Inc.* | 712 | 11,670 | ||||||
Navigant Consulting, Inc.* | 1,105 | 11,039 | ||||||
Trex Company, Inc.* | 279 | 9,101 | ||||||
URS Corp.* | 183 | 8,427 | ||||||
Insperity, Inc. | 274 | 8,324 | ||||||
Force Protection, Inc.* | 1,611 | 7,894 | ||||||
ICF International, Inc.* | 199 | 4,088 | ||||||
United Stationers, Inc. | 47 | 3,339 | ||||||
Total Industrials | 512,706 | |||||||
Information Technology - 11.0% | ||||||||
Western Union Co. | 4,190 | 87,026 | ||||||
TE Connectivity, Ltd. | 2,152 | 74,933 | ||||||
Computer Sciences Corp. | 1,443 | 70,318 | ||||||
Hewlett-Packard Co. | 1,290 | 52,851 | ||||||
IXYS Corp.* | 3,224 | 43,298 | ||||||
Maxwell Technologies, Inc.* | 1,259 | 21,743 | ||||||
Power-One, Inc.*,1 | 2,373 | 20,764 | ||||||
Synopsys, Inc.* | 420 | 11,613 | ||||||
Symmetricom, Inc.* | 1,825 | 11,187 | ||||||
Satyam Computer Services Ltd. ADR* | 3,243 | 9,794 | ||||||
Total Information Technology | 403,527 | |||||||
Consumer Discretionary - 9.7% | ||||||||
Lowe’s Companies, Inc. | 3,759 | 99,350 | ||||||
Time Warner, Inc. | 2,087 | 74,506 | ||||||
Cabela’s, Inc.* | 1,499 | 37,490 | ||||||
Best Buy Company, Inc. | 800 | 22,976 | ||||||
Chico’s FAS, Inc. | 1,200 | 17,880 | ||||||
Maidenform Brands, Inc.* | 537 | 15,342 | ||||||
Penn National Gaming, Inc.* | 400 | 14,824 | ||||||
Brown Shoe Company, Inc. | 1,063 | 12,990 | ||||||
Apollo Group, Inc. — Class A* | 270 | 11,261 | ||||||
JC Penney Company, Inc. | 300 | 10,773 | ||||||
Hanesbrands, Inc.* | 300 | 8,112 | ||||||
Scholastic Corp. | 300 | 8,112 | ||||||
DeVry, Inc. | 140 | 7,710 | ||||||
Fortune Brands, Inc. | 100 | 6,189 | ||||||
Jack in the Box, Inc.* | 210 | 4,763 | ||||||
Fred’s, Inc. — Class A | 200 | 2,664 | ||||||
Total Consumer Discretionary | 354,942 | |||||||
Consumer Staples - 7.1% | ||||||||
Wal-Mart Stores, Inc.1 | 1,200 | 62,460 | ||||||
CVS Caremark Corp. | 1,608 | 55,186 | ||||||
Hormel Foods Corp. | 1,258 | 35,023 |
8 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. | |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | All Cap Value Fund | |
Shares | Value | |||||||
Kraft Foods, Inc. — Class A | 1,100 | $ | 34,496 | |||||
Bunge Ltd. | 425 | 30,740 | ||||||
JM Smucker Co. | 381 | 27,200 | ||||||
Ralcorp Holdings, Inc.* | 240 | 16,423 | ||||||
Total Consumer Staples | 261,528 | |||||||
Health Care - 6.4% | ||||||||
Aetna, Inc. | 1,449 | 54,236 | ||||||
Covidien plc | 1,038 | 53,914 | ||||||
Hospira, Inc.* | 619 | 34,169 | ||||||
Mednax, Inc.* | 324 | 21,581 | ||||||
Forest Laboratories, Inc.* | 630 | 20,349 | ||||||
RehabCare Group, Inc.* | 500 | 18,435 | ||||||
Medco Health Solutions, Inc.* | 244 | 13,703 | ||||||
Merck & Company, Inc. | 310 | 10,233 | ||||||
Hologic, Inc.* | 399 | 8,858 | ||||||
Total Health Care | 235,478 | |||||||
Materials - 4.5% | ||||||||
Dow Chemical Co. | 1,356 | 51,189 | ||||||
Bemis Company, Inc. | 1,194 | 39,175 | ||||||
Louisiana-Pacific Corp.* | 2,800 | 29,400 | ||||||
Sonoco Products Co. | 521 | 18,876 | ||||||
Owens-Illinois, Inc.* | 600 | 18,114 | ||||||
HB Fuller Co. | 282 | 6,058 | ||||||
Zoltek Companies, Inc.* | 224 | 3,008 | ||||||
Total Materials | 165,820 | |||||||
Utilities - 3.3% | ||||||||
Edison International | 1,680 | 61,471 | ||||||
NRG Energy, Inc.* | 590 | 12,709 | ||||||
Allete, Inc. | 273 | 10,639 | ||||||
Great Plains Energy, Inc. | 497 | 9,950 | ||||||
Black Hills Corp. | 290 | 9,697 | ||||||
American Water Works Company, Inc. | 300 | 8,415 | ||||||
MDU Resources Group, Inc. | 273 | 6,271 | ||||||
Total Utilities | 119,152 | |||||||
Telecommunication Services - 1.0% | ||||||||
Windstream Corp. | 2,882 | 37,091 | ||||||
Total Common Stocks (Cost $2,574,629) | 3,214,049 | |||||||
EXCHANGE TRADED FUNDS† - 7.5% | ||||||||
iShares Russell Midcap Value Index Fund | 2,000 | 96,320 | ||||||
iShares Russell 1000 Value Index Fund | 1,300 | 89,271 | ||||||
iShares S&P 500 Value Index Fund | 1,400 | 88,634 | ||||||
Total Exchange Traded Funds (Cost $244,684) | 274,225 | |||||||
Total Long Investments — 95.1% (Cost $2,819,313) | $ | 3,488,274 | ||||||
Contracts | ||||||||
OPTIONS WRITTEN† - (0.1)% | ||||||||
Call Options on: | ||||||||
Power-One, Inc. | ||||||||
Expiring April 2011 | ||||||||
with strike price of $13.00 | 3 | (15 | ) | |||||
General Cable Corp. | ||||||||
Expiring May 2011 | ||||||||
with strike price of $50.00 | 5 | (125 | ) | |||||
Associated Banc-Corp. | ||||||||
Expiring June 2011 | ||||||||
with strike price of $15.00 | 2 | (160 | ) | |||||
Total Call Options | (300 | ) | ||||||
Put Options on: | ||||||||
Arch Coal, Inc. | ||||||||
Expiring July 2011 | ||||||||
with strike price of $30.00 | 6 | (582 | ) | |||||
Computer Sciences Corp. | ||||||||
Expiring June 2011 | ||||||||
with strike price of $50.00 | 4 | (1,320 | ) | |||||
Total Put Options | (1,902 | ) | ||||||
Total Options Written (Premiums received $3,616) | (2,202 | ) | ||||||
Cash & Other Assets, Less Liabilities - 5.0% | 184,975 | |||||||
Total Net Assets - 100.0% | $ | 3,671,047 |
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
1 | All or a portion of this security is pledged as collateral for open written option contracts at March 31, 2011. | |
ADR — American Depositary Receipt | ||
plc — Public Limited Company |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 9 | |
Table of Contents
Rydex|SGI Equity Fund
All Cap Value Fund
All Cap Value Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 3,488,274 | ||
Total investments | 3,488,274 | |||
Cash | 183,149 | |||
Receivables: | ||||
Securities sold | 1,082 | |||
Fund shares sold | 6,338 | |||
Dividends | 3,673 | |||
Prepaid expenses | 23,589 | |||
Total assets | 3,706,105 | |||
Liabilities: | ||||
Written options, at value** | 2,202 | |||
Payable for: | ||||
Securities purchased | 1,707 | |||
Fund shares redeemed | 4,012 | |||
Security Investors | 1,483 | |||
Management fees | 2,145 | |||
Custodian fees | 1,518 | |||
Distribution and service fees | 1,440 | |||
Portfolio accounting fees | 291 | |||
Professional fees | 6,090 | |||
Directors’ fees | 98 | |||
Legal fees | 3,842 | |||
Pricing fees | 1,306 | |||
Direct shareholders expense | 6,991 | |||
Corporate expenses | 1,933 | |||
Total liabilities | 35,058 | |||
Net assets | $ | 3,671,047 | ||
Net assets consist of: | ||||
Paid in capital | $ | 2,935,979 | ||
Accumulated net investment loss | (414 | ) | ||
Undistributed net realized gain on investments | 65,107 | |||
Net unrealized appreciation in on investments | 670,375 | |||
Net assets | $ | 3,671,047 | ||
A-Class: | ||||
Net assets | $ | 2,041,138 | ||
Capital shares outstanding | 161,474 | |||
Net asset value per share | $ | 12.64 | ||
Maximum offering price per share*** | $ | 13.27 | ||
C-Class: | ||||
Net assets | $ | 1,221,097 | ||
Capital shares outstanding | 98,146 | |||
Net asset value per share | $ | 12.44 | ||
Institutional Class: | ||||
Net assets | $ | 408,812 | ||
Capital shares outstanding | 32,301 | |||
Net asset value per share | $ | 12.66 | ||
* Investments, at cost | $ | 2,819,313 | ||
** Premiums received for written options | $ | 3,616 | ||
*** Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 23,690 | ||
Interest | 10 | |||
Total investment income | 23,700 | |||
Expenses: | ||||
Management fees | 11,317 | |||
Transfer agent/maintenance fees | 157 | |||
Distribution and service fees: | ||||
A-Class | 2,292 | |||
C-Class | 5,163 | |||
Portfolio accounting fees | 1,536 | |||
Directors’ fees* | 196 | |||
Custodian fees | 2,673 | |||
Registration fees | 12,099 | |||
Professional fees | 4,226 | |||
Corporate fees | 3,034 | |||
Legal fees | 2,845 | |||
Miscellaneous | 2,779 | |||
Total expenses | 48,317 | |||
Expenses waived by Advisor | (24,371 | ) | ||
Net expenses | 23,946 | |||
Net investment loss | (246 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 106,897 | |||
Options written | 1,642 | |||
Net realized gain | 108,539 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 465,912 | |||
Options written | 966 | |||
Net change in unrealized appreciation | 466,878 | |||
Net realized and unrealized gain | 575,417 | |||
Net increase in net assets resulting from operations | $ | 575,171 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
10 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. | |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | All Cap Value Fund | |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income (loss) | $ | (246 | ) | $ | 3,935 | |||
Net realized gain on investments | 108,539 | 140,388 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 466,878 | 54,786 | ||||||
Net increase in net assets resulting from operations | 575,171 | 199,109 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | ||||||||
A-Class | (2,929 | ) | (1,974 | ) | ||||
Institutional Class | (1,040 | ) | (1,736 | ) | ||||
Net realized gains | ||||||||
A-Class | (89,465 | ) | — | |||||
C-Class | (51,878 | ) | — | |||||
Institutional Class | (18,694 | ) | — | |||||
Total distributions to shareholders | (164,006 | ) | (3,710 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 283,910 | 1,353,803 | ||||||
C-Class | 285,875 | 464,106 | ||||||
Institutional Class | 23,672 | 43,200 | ||||||
Distributions reinvested | ||||||||
A-Class | 92,394 | 1,960 | ||||||
C-Class | 51,833 | — | ||||||
Institutional Class | 19,734 | 1,736 | ||||||
Cost of shares redeemed | ||||||||
A-Class | (172,468 | ) | (1,209,690 | ) | ||||
C-Class | (53,539 | ) | (128,033 | ) | ||||
Institutional Class | — | (40,226 | ) | |||||
Net increase from capital share transactions | 531,411 | 486,856 | ||||||
Net increase in net assets | 942,576 | 682,255 | ||||||
Net assets: | ||||||||
Beginning of period | 2,728,471 | 2,046,216 | ||||||
End of period | $ | 3,671,047 | $ | 2,728,471 | ||||
Accumulated/(Undistributed) net investment income/(loss) at end of period | $ | (414 | ) | $ | 3,801 | |||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class | 23,783 | 126,610 | ||||||
C-Class | 24,260 | 42,853 | ||||||
Institutional Class | 1,966 | 3,913 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 7,993 | 186 | ||||||
C-Class | 4,547 | — | ||||||
Institutional Class | 1,706 | 165 | ||||||
Shares redeemed | ||||||||
A-Class | (14,380 | ) | (111,974 | ) | ||||
C-Class | (4,465 | ) | (12,031 | ) | ||||
Institutional Class | — | (3,913 | ) | |||||
Net increase in shares | 45,410 | 45,809 | ||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 11 | |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | All Cap Value Fund | |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Period Ended | ||||||||||
March 31, | September 30, | September 30, | ||||||||||
A-Class | 2011a | 2010 | 2009b | |||||||||
Per Share Data | ||||||||||||
Net asset value, beginning of period | $ | 11.11 | $ | 10.21 | $ | 10.00 | ||||||
Income (loss) from investment operations: | ||||||||||||
Net investment incomec | 0.01 | 0.03 | 0.04 | |||||||||
Net gain on investments (realized and unrealized) | 2.15 | 0.89 | 0.17 | |||||||||
Total from investment operations | 2.16 | 0.92 | 0.21 | |||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.02 | ) | (0.02 | ) | — | |||||||
Net realized gains | (0.61 | ) | — | — | ||||||||
Total distributions | (0.63 | ) | (0.02 | ) | — | |||||||
Net asset value, end of period | $ | 12.64 | $ | 11.11 | $ | 10.21 | ||||||
Total Returnd | 19.98 | % | 8.97 | % | 2.10 | % | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of period (in thousands) | $ | 2,041 | $ | 1,601 | $ | 1,319 | ||||||
Ratios to average net assets: | ||||||||||||
Net investment income | 0.19 | % | 0.31 | % | 0.51 | % | ||||||
Total expensese | 2.78 | % | 3.71 | % | 6.75 | % | ||||||
Net expensesf | 1.27 | % | 1.29 | % | 1.35 | % | ||||||
Portfolio turnover rate | 14 | % | 55 | % | 17 | % | ||||||
Period Ended | Year Ended | Period Ended | ||||||||||
March 31, | September 30, | September 30, | ||||||||||
C-Class | 2011a | 2010 | 2009b | |||||||||
Per Share Data | ||||||||||||
Net asset value, beginning of period | $ | 10.97 | $ | 10.13 | $ | 10.00 | ||||||
Income (loss) from investment operations: | ||||||||||||
Net investment lossc | (0.03 | ) | (0.04 | ) | (0.02 | ) | ||||||
Net gain on investments (realized and unrealized) | 2.11 | 0.88 | 0.15 | |||||||||
Total from investment operations | 2.08 | 0.84 | 0.13 | |||||||||
Less distributions from: | ||||||||||||
Net realized gains | (0.61 | ) | — | — | ||||||||
Total distributions | (0.61 | ) | — | — | ||||||||
Net asset value, end of period | $ | 12.44 | $ | 10.97 | $ | 10.13 | ||||||
Total Returnd | 19.48 | % | 8.29 | % | 1.30 | % | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of period (in thousands) | $ | 1,221 | $ | 809 | $ | 436 | ||||||
Ratios to average net assets: | ||||||||||||
Net investment loss | (0.54 | %) | (0.41 | %) | (0.18 | %) | ||||||
Total expensese | 3.51 | % | 4.47 | % | 8.89 | % | ||||||
Net expensesf | 2.02 | % | 2.04 | % | 2.10 | % | ||||||
Portfolio turnover rate | 14 | % | 55 | % | 17 | % |
12 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. | |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | All Cap Value Fund | |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Period Ended | ||||||||||
March 31, | September 30, | September 30, | ||||||||||
Institutional Class | 2011a | 2010 | 2009b | |||||||||
Per Share Data | ||||||||||||
Net asset value, beginning of period | $ | 11.12 | $ | 10.24 | $ | 10.00 | ||||||
Income (loss) from investment operations: | ||||||||||||
Net investment incomec | 0.03 | 0.06 | 0.07 | |||||||||
Net gain on investments (realized and unrealized) | 2.15 | 0.88 | 0.17 | |||||||||
Total from investment operations | 2.18 | 0.94 | 0.24 | |||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.03 | ) | (0.06 | ) | — | |||||||
Net realized gains | (0.61 | ) | — | — | ||||||||
Total distributions | (0.64 | ) | (0.06 | ) | — | |||||||
Net asset value, end of period | $ | 12.66 | $ | 11.12 | $ | 10.24 | ||||||
Total Returnd | 20.20 | % | 9.22 | % | 2.40 | % | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of period (in thousands) | $ | 409 | $ | 318 | $ | 291 | ||||||
Ratios to average net assets: | ||||||||||||
Net investment income | 0.44 | % | 0.55 | % | 0.81 | % | ||||||
Total expensese | 2.54 | % | 3.48 | % | 8.19 | % | ||||||
Net expensesf | 1.02 | % | 1.05 | % | 1.10 | % | ||||||
Portfolio turnover rate | 14 | % | 55 | % | 17 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Since commencement of operations: October 3, 2008 — All Cap Value Fund. | |
c | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
e | Total expense information reflects expense ratios absent expense reductions by the Investment Manager, as applicable. | |
f | Net expense information reflects the expense ratios after voluntary expense waivers and reimbursements and before custodian earnings credits, as applicable. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 13 |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211905.gif)
$10,000 Since Inception
This chart assumes a $10,000 investment in A-Class shares of Alpha Opportunity Fund on July 7, 2003 (date of inception), reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The S&P 500® Index is a capitalization weighted index composed of 500 selected common stocks that represent the broad domestic economy and is a widely recognized unmanaged index of market performance.
Holdings Diversification (Market Exposure as % of Net Assets)
![(BAR CHART)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211906.gif)
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
SINCE | ||||||||||||
INCEPTION | ||||||||||||
1 YEAR | 5 YEAR | (07/07/03) | ||||||||||
A-Class Shares | 29.93 | % | 6.21 | % | 10.15 | % | ||||||
A-Class Shares with sales charge | 22.40 | % | 4.96 | % | 9.31 | % | ||||||
B-Class Shares | 28.91 | % | 5.37 | % | 9.30 | % | ||||||
B-Class Shares with CDSC | 23.91 | % | 5.07 | % | 9.30 | % | ||||||
C-Class Shares | 28.79 | % | 5.35 | % | 9.28 | % | ||||||
C-Class Shares with CDSC | 27.79 | % | 5.35 | % | 9.28 | % | ||||||
SINCE | ||||||||
INCEPTION | ||||||||
1 YEAR | (11/07/08) | |||||||
Institutional Class Shares | 30.07 | % | 25.21 | % | ||||
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
14 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) March 31, 2011 | Rydex|SGI Equity Fund Alpha Opportunity Fund |
Shares | Value | |||||||
COMMON STOCKS† - 92.6% | ||||||||
Industrials - 21.0% | ||||||||
Joy Global, Inc.1,2 | 6,117 | $ | 604,421 | |||||
Trinity Industries, Inc.1,2 | 10,200 | 374,034 | ||||||
Lockheed Martin Corp.1,2 | 3,753 | 301,741 | ||||||
AO Smith Corp.1,2 | 4,200 | 186,228 | ||||||
Towers Watson & Co. — Class A1,2 | 2,200 | 122,012 | ||||||
Union Pacific Corp. | 1,132 | 111,310 | ||||||
Watts Water Technologies, Inc. — Class A1,2 | 2,800 | 106,932 | ||||||
3M Co. | 971 | 90,789 | ||||||
Boeing Co. | 1,204 | 89,012 | ||||||
Lincoln Electric Holdings, Inc. | 1,132 | 85,941 | ||||||
Alamo Group, Inc. | 3,100 | 85,095 | ||||||
General Electric Co.1,2 | 4,200 | 84,210 | ||||||
Northrop Grumman Corp.1,2 | 1,100 | 68,981 | ||||||
Con-way, Inc.1,2 | 1,700 | 66,793 | ||||||
Wabash National Corp.* | 4,851 | 56,175 | ||||||
Fluor Corp. | 608 | 44,785 | ||||||
Eaton Corp. | 759 | 42,079 | ||||||
Timken Co. | 679 | 35,512 | ||||||
Arkansas Best Corp. | 1,354 | 35,096 | ||||||
Northwest Pipe Co.* | 1,235 | 28,319 | ||||||
Kansas City Southern* | 485 | 26,408 | ||||||
ABB, Ltd. ADR | 1,058 | 25,593 | ||||||
Werner Enterprises, Inc. | 911 | 24,114 | ||||||
Titan Machinery, Inc.* | 894 | 22,574 | ||||||
Blount International, Inc.* | 1,209 | 19,320 | ||||||
Saia, Inc.* | 1,143 | 18,734 | ||||||
Kirby Corp.* | 323 | 18,505 | ||||||
Terex Corp.* | 485 | 17,964 | ||||||
Swift Transportation Company — Class A* | 911 | 13,392 | ||||||
China Ming Yang Wind Power Group, Ltd. ADR* | 1,232 | 12,702 | ||||||
Southwest Airlines Co. | 970 | 12,251 | ||||||
Alaska Air Group, Inc.* | 175 | 11,099 | ||||||
Metalico, Inc.* | 1,294 | 8,049 | ||||||
Huntington Ingalls Industries, Inc.* | 183 | 7,608 | ||||||
Ampco-Pittsburgh Corp. | 235 | 6,481 | ||||||
Total Industrials | 2,864,259 | |||||||
Information Technology - 14.8% | ||||||||
Shanda Interactive Entertainment Ltd. ADR*,1,2 | 15,100 | 634,049 | ||||||
CA, Inc.1,2 | 14,000 | 338,520 | ||||||
Apple, Inc.* | 325 | 113,246 | ||||||
Symantec Corp.*,1,2 | 5,900 | 109,386 | ||||||
Arrow Electronics, Inc.*,1,2 | 2,600 | 108,888 | ||||||
Avnet, Inc.*,1,2 | 3,100 | 105,679 | ||||||
Harmonic, Inc.*,1,2 | 11,000 | 103,180 | ||||||
Oracle Corp. | 2,079 | 69,376 | ||||||
Google, Inc. — Class A* | 115 | 67,414 | ||||||
Amkor Technology, Inc.*,1,2 | 9,200 | 62,008 | ||||||
Xerox Corp. | 4,362 | 46,455 | ||||||
QUALCOMM, Inc. | 759 | 41,616 | ||||||
Avago Technologies Ltd. | 1,218 | 37,880 | ||||||
STEC, Inc.* | 1,161 | 23,324 | ||||||
Atmel Corp.* | 1,618 | 22,053 | ||||||
Corning, Inc. | 922 | 19,021 | ||||||
Rovi Corp.* | 291 | 15,612 | ||||||
OCZ Technology Group, Inc.* | 1,621 | 13,033 | ||||||
EMC Corp.* | 485 | 12,877 | ||||||
Marvell Technology Group Ltd.* | 759 | 11,802 | ||||||
Anadigics, Inc.* | 2,471 | 11,070 | ||||||
Sanmina-SCI Corp.* | 759 | 8,508 | ||||||
Novatel Wireless, Inc.* | 1,500 | 8,190 | ||||||
MEMC Electronic Materials, Inc.* | 608 | 7,880 | ||||||
DG FastChannel, Inc.* | 211 | 6,798 | ||||||
Quantum Corp.* | 2,569 | 6,474 | ||||||
ON Semiconductor Corp.* | 608 | 6,001 | ||||||
Axcelis Technologies, Inc.* | 1,832 | 4,855 | ||||||
LTX-Credence Corp.* | 514 | 4,693 | ||||||
Daktronics, Inc. | 429 | 4,612 | ||||||
Total Information Technology | 2,024,500 | |||||||
Consumer Staples - 12.4% | ||||||||
Philip Morris International, Inc.1,2 | 9,800 | 643,174 | ||||||
Altria Group, Inc.1,2 | 16,700 | 434,701 | ||||||
Herbalife Ltd.1,2 | 2,500 | 203,400 | ||||||
Wal-Mart Stores, Inc.1,2 | 2,200 | 114,510 | ||||||
CVS Caremark Corp. | 3,080 | 105,706 | ||||||
Safeway, Inc.1,2 | 3,900 | 91,806 | ||||||
Pilgrim’s Pride Corp.* | 3,719 | 28,673 | ||||||
Hormel Foods Corp. | 911 | 25,362 | ||||||
Andersons, Inc. | 485 | 23,629 | ||||||
Tyson Foods, Inc. — Class A | 1,164 | 22,337 | ||||||
Cal-Maine Foods, Inc. | 172 | 5,074 | ||||||
Cresud S.A. ADR | 40 | 724 | ||||||
Total Consumer Staples | 1,699,096 | |||||||
Health Care - 11.1% | ||||||||
Johnson & Johnson1,2 | 5,000 | 296,250 | ||||||
Viropharma, Inc.*,1,2 | 9,900 | 197,010 | ||||||
Life Technologies Corp.*,1,2 | 2,800 | 146,776 | ||||||
Lincare Holdings, Inc.1,2 | 3,800 | 112,708 | ||||||
Forest Laboratories, Inc.*,1,2 | 3,400 | 109,820 | ||||||
Baxter International, Inc.1,2 | 1,800 | 96,786 | ||||||
WellCare Health Plans, Inc.*,1,2 | 2,300 | 96,485 | ||||||
Amgen, Inc.*,1,2 | 1,800 | 96,210 | ||||||
Kindred Healthcare, Inc.*,1,2 | 3,900 | 93,132 | ||||||
athenahealth, Inc.* | 1,975 | 89,132 | ||||||
Owens & Minor, Inc.1,2 | 2,700 | 87,696 | ||||||
Charles River Laboratories International, Inc.*,1,2 | 2,000 | 76,760 | ||||||
Team Health Holdings, Inc.* | 542 | 9,474 | ||||||
Agilent Technologies, Inc.* | 152 | 6,807 | ||||||
Total Health Care | 1,515,046 | |||||||
Consumer Discretionary - 9.5% | ||||||||
Family Dollar Stores, Inc.1,2 | 3,700 | 189,884 | ||||||
TJX Companies, Inc.1,2 | 3,600 | 179,028 | ||||||
Walt Disney Co.1,2 | 4,024 | 173,394 | ||||||
Limited Brands, Inc.1,2 | 5,100 | 167,688 |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 15 |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (continued) | Rydex|SGI Equity Fund | |
March 31, 2011 | Alpha Opportunity Fund |
Shares | Value | |||||||
Ross Stores, Inc.1,2 | 2,100 | $ | 149,352 | |||||
The Gap, Inc.1,2 | 6,000 | 135,960 | ||||||
Jack in the Box, Inc.*,1,2 | 4,000 | 90,720 | ||||||
RadioShack Corp.1,2 | 5,100 | 76,551 | ||||||
Phillips-Van Heusen Corp.1,2 | 800 | 52,024 | ||||||
Tenneco, Inc.* | 1,170 | 49,666 | ||||||
General Motors Co.* | 1,063 | 32,985 | ||||||
Perfumania Holdings, Inc.* | 639 | 6,243 | ||||||
Navarre Corp.* | 548 | 1,041 | ||||||
Total Consumer Discretionary | 1,304,536 | |||||||
Materials - 7.8% | ||||||||
Newmont Mining Co. | 3,404 | 185,790 | ||||||
Monsanto Co. | 1,942 | 140,329 | ||||||
CF Industries Holdings, Inc. | 911 | 124,616 | ||||||
OM Group, Inc.* | 2,193 | 80,132 | ||||||
Freeport-McMoRan Copper & Gold, Inc. — Class B | 1,294 | 71,882 | ||||||
Potash Corporation of Saskatchewan, Inc. | 1,008 | 59,401 | ||||||
Schnitzer Steel Industries, Inc. — Class A | 724 | 47,067 | ||||||
Huntsman Corp. | 2,266 | 39,383 | ||||||
Vale S.A. — Class B ADR | 1,167 | 38,919 | ||||||
United States Steel Co. | 647 | 34,899 | ||||||
Titanium Metals Corp.* | 1,768 | 32,849 | ||||||
Noranda Aluminum Holding Corp.* | 1,829 | 29,356 | ||||||
Stillwater Mining Co.* | 1,233 | 28,273 | ||||||
Nucor Corp. | 608 | 27,980 | ||||||
AngloGold Ashanti Ltd. ADR | 558 | 26,756 | ||||||
Carpenter Technology Corp. | 564 | 24,088 | ||||||
Mosaic Co. | 304 | 23,940 | ||||||
Thompson Creek Metals Company, Inc.* | 1,109 | 13,907 | ||||||
North American Palladium Ltd.* | 2,127 | 13,804 | ||||||
Horsehead Holding Corp.* | 647 | 11,031 | ||||||
Teck Resources Ltd. — Class B | 135 | 7,158 | ||||||
General Moly, Inc.* | 647 | 3,481 | ||||||
Total Materials | 1,065,041 | |||||||
Energy - 7.4% | ||||||||
Anadarko Petroleum Corp.1,2 | 2,755 | 225,690 | ||||||
ConocoPhillips1,2 | 1,500 | 119,790 | ||||||
Consol Energy, Inc. | 1,942 | 104,149 | ||||||
InterOil Corp.* | 1,289 | 96,211 | ||||||
Denbury Resources, Inc.* | 3,399 | 82,936 | ||||||
Cameron International Corp.* | 1,294 | 73,887 | ||||||
Devon Energy Corp. | 765 | 70,204 | ||||||
Petroleum Development Corp.* | 1,456 | 69,903 | ||||||
Hess Corp. | 759 | 64,674 | ||||||
Oil States International, Inc.* | 647 | 49,263 | ||||||
Oasis Petroleum, Inc.* | 647 | 20,458 | ||||||
Triangle Petroleum Corporation* | 1,779 | 14,766 | ||||||
Petroleo Brasileiro S.A. ADR | 215 | 8,692 | ||||||
Sunoco, Inc. | 139 | 6,337 | ||||||
Total Energy | 1,006,960 | |||||||
Financials - 5.0% | ||||||||
Endurance Specialty Holdings Ltd.1,2 | 3,000 | 146,460 | ||||||
Genworth Financial, Inc. — Class A*,1,2 | 9,165 | 123,361 | ||||||
Weyerhaeuser Co. | 4,851 | 119,335 | ||||||
Amtrust Financial Services, Inc.1,2 | 6,000 | 114,420 | ||||||
Wells Fargo & Co. | 2,886 | 91,486 | ||||||
Citigroup, Inc.* | 7,595 | 33,570 | ||||||
Goldman Sachs Group, Inc. | 162 | 25,672 | ||||||
HSBC Holdings plc ADR | 320 | 16,576 | ||||||
Brookfield Properties Corp. | 545 | 9,657 | ||||||
Farmer Mac — Class C | 274 | 5,236 | ||||||
St. Joe Co.* | 152 | 3,811 | ||||||
Total Financials | 689,584 | |||||||
Telecommunication Services - 2.4% | ||||||||
AT&T, Inc.1,2 | 10,600 | 324,360 | ||||||
Utilities - 1.2% | ||||||||
Constellation Energy Group, Inc.1,2 | 5,100 | 158,763 | ||||||
Total Common Stocks (Cost $11,864,850) | 12,652,145 | |||||||
EXCHANGE TRADED FUNDS† - 2.0% | ||||||||
iShares S&P Global Materials Sector Index Fund | 2,069 | 154,348 | ||||||
SPDR KBW Regional Banking ETF | 1,823 | 48,492 | ||||||
iShares MSCI Japan Index Fund | 2,888 | 29,775 | ||||||
Regional Bank HOLDRs Trust | 304 | 26,381 | ||||||
Market Vectors Junior Gold Miners ETF | 323 | 12,668 | ||||||
Total Exchange Traded Funds (Cost $269,278) | 271,664 | |||||||
SHORT TERM INVESTMENT†† - 0.2% | ||||||||
State Street General Account U.S. Government Fund | 20,500 | 20,500 | ||||||
Total Short Term Investment (Cost $20,500) | 20,500 | |||||||
Face | ||||||||
Amount | ||||||||
FEDERAL AGENCY DISCOUNT NOTE†† - 7.3% | ||||||||
Freddie Mac2,3 0.18% due 06/28/11 | $ | 1,000,000 | 999,780 | |||||
Total Federal Agency Discount Note (Cost $999,562) | 999,780 | |||||||
REPURCHASE AGREEMENT††,4 - 10.0% | ||||||||
State Street issued 03/31/11 at 0.00% due 04/01/11 | 1,366,517 | 1,366,517 | ||||||
Total Repurchase Agreement (Cost $1,366,517) | 1,366,517 | |||||||
Total Long Investments - 112.1% (Cost $14,520,707) | $ | 15,310,606 | ||||||
16 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (continued) | Rydex|SGI Equity Fund | |
March 31, 2011 | Alpha Opportunity Fund |
Shares | Value | |||||||
COMMON STOCK SOLD SHORT† - (53.9)% | ||||||||
Consumer Staples - (0.8)% | ||||||||
Molson Coors Brewing Co. — Class B | 127 | $ | (5,955 | ) | ||||
Hansen Natural Corp.*,†††,5,6 | 3,250 | (96,232 | ) | |||||
Total Consumer Staples | (102,187 | ) | ||||||
Telecommunication Services - (1.4)% | ||||||||
Clearwire Corp. — Class A*,†††,5,6 | 2,530 | (28,665 | ) | |||||
Global Crossing Ltd.*,†††,5,6 | 1,800 | (28,746 | ) | |||||
Leap Wireless International, Inc.*,†††,5,6 | 1,500 | (65,100 | ) | |||||
SBA Communications Corp. — Class A*,†††,5,6 | 2,400 | (69,096 | ) | |||||
Total Telecommunication Services | (191,607 | ) | ||||||
Utilities - (1.8)% | ||||||||
Korea Electric Power Corp. ADR†††,5,6 | 18,310 | (247,734 | ) | |||||
Energy - (2.5)% | ||||||||
Aquila Resources Ltd.*,†††,5,6 | 2,750 | (21,907 | ) | |||||
Arrow Energy Ltd.*,†††,5,6 | 8,900 | (22,965 | ) | |||||
Modec, Inc.†††,5,6 | 900 | (23,195 | ) | |||||
Sevan Marine ASA*,†††,5,6 | 5,900 | (30,951 | ) | |||||
Trican Well Service Ltd.†††,5,6 | 2,000 | (34,043 | ) | |||||
Queensland Gas Company Ltd.*,†††,5,6 | 12,800 | (49,787 | ) | |||||
Riversdale Mining Ltd.*,†††,5,6 | 6,700 | (50,985 | ) | |||||
BPZ Resources, Inc.*,†††,5,6 | 5,700 | (107,160 | ) | |||||
Total Energy | (340,993 | ) | ||||||
Materials - (3.0)% | ||||||||
China National Building Material Company Ltd. — Class H†††,5,6 | 14,700 | (19,910 | ) | |||||
Anhui Conch Cement Company Ltd. — Class H†††,5,6 | 4,500 | (20,259 | ) | |||||
Fushan International Energy Group Ltd.†††,5,6 | 66,000 | (23,727 | ) | |||||
Sino Gold Mining Ltd.*,†††,5,6 | 8,600 | (35,368 | ) | |||||
Ivanhoe Mines Ltd.*,†††,5,6 | 4,440 | (37,030 | ) | |||||
Western Areas NL†††,5,6 | 6,200 | (44,456 | ) | |||||
Zoltek Companies, Inc.*,†††,5,6 | 2,700 | (49,221 | ) | |||||
Silver Wheaton Corp.†††,5,6 | 6,100 | (64,046 | ) | |||||
Agnico-Eagle Mines Ltd.†††,5,6 | 1,800 | (119,001 | ) | |||||
Total Materials | (413,018 | ) | ||||||
Information Technology - (5.9)% | ||||||||
VeriSign, Inc.†††,5,6 | 1,200 | (30,756 | ) | |||||
Access Company Ltd.†††,5,6 | 17 | (32,755 | ) | |||||
Varian Semiconductor Equipment Associates, Inc.*,†††,5,6 | 1,260 | (33,037 | ) | |||||
Electronic Arts, Inc.*,†††,5,6 | 900 | (36,720 | ) | |||||
Riverbed Technology, Inc.*,†††,5,6 | 3,280 | (43,624 | ) | |||||
Red Hat, Inc.*,†††,5,6 | 2,610 | (46,588 | ) | |||||
Baidu, Inc. ADR*,†††,5,6 | 200 | (53,726 | ) | |||||
Intermec, Inc.*,†††,5,6 | 2,740 | (54,307 | ) | |||||
Rambus, Inc.*,†††,5,6 | 3,600 | (55,224 | ) | |||||
VMware, Inc. — Class A*,†††,5,6 | 2,400 | (68,592 | ) | |||||
Imperial Energy Corporation plc*,†††,5,6 | 3,900 | (77,681 | ) | |||||
Equinix, Inc.*,†††,5,6 | 1,000 | (79,940 | ) | |||||
SAVVIS, Inc.*,†††,5,6 | 5,700 | (84,018 | ) | |||||
Cree, Inc.*,†††,5,6 | 4,000 | (109,840 | ) | |||||
Total Information Technology | (806,808 | ) | ||||||
Industrials - (7.3)% | ||||||||
International Shipholding Corp. | 2 | (50 | ) | |||||
China Merchants Holdings International Company Ltd.†††,5,6 | 3,100 | (11,047 | ) | |||||
China Communications Construction Company Ltd. — Class H†††,5,6 | 15,000 | (15,536 | ) | |||||
China National Materials Company Ltd.†††,5,6 | 34,400 | (17,537 | ) | |||||
Japan Steel Works Ltd.†††,5,6 | 1,500 | (20,809 | ) | |||||
Ausenco Ltd.†††,5,6 | 2,100 | (22,659 | ) | |||||
Toyo Tanso Company Ltd.†††,5,6 | 500 | (27,007 | ) | |||||
Ryanair Holdings plc†††,5,6 | 9,600 | (35,971 | ) | |||||
Meyer Burger Technology AG*,†††,5,6 | 200 | (49,879 | ) | |||||
USG Corp.*,†††,5,6 | 4,940 | (141,877 | ) | |||||
Beijing Capital International Airport Company Ltd. — Class H†††,5,6 | 218,000 | (188,550 | ) | |||||
Brisa Auto-Estradas de Portugal S.A.†††,5,6 | 44,400 | (461,804 | ) | |||||
Total Industrials | (992,726 | ) | ||||||
Financials - (8.6)% | ||||||||
C C Land Holdings Ltd.†††,5,6 | 50,000 | (13,945 | ) | |||||
Franshion Properties China Ltd.†††,5,6 | 79,400 | (22,104 | ) | |||||
Mizuho Trust & Banking Company Ltd.†††,5,6 | 17,700 | (24,682 | ) | |||||
Aozora Bank Ltd.†††,5,6 | 16,300 | (26,250 | ) | |||||
Monex Group, Inc.†††,5,6 | 78 | (27,384 | ) | |||||
Mizuho Financial Group, Inc.†††,5,6 | 11,000 | (45,461 | ) | |||||
Aeon Mall Company Ltd.†††,5,6 | 1,700 | (52,093 | ) | |||||
PrivateBancorp, Inc. — Class A†††,5,6 | 2,390 | (102,770 | ) | |||||
Erste Group Bank AG†††,5,6 | 5,200 | (319,536 | ) | |||||
Wells Fargo & Co.†††,5,6 | 12,384 | (539,689 | ) | |||||
Total Financials | (1,173,914 | ) | ||||||
Health Care - (9.8)% | ||||||||
Sepracor, Inc.*,†††,5,6 | 1,400 | (24,500 | ) | |||||
Exelixis, Inc.*,†††,5,6 | 4,500 | (28,845 | ) | |||||
Savient Pharmaceuticals, Inc.*,†††,5,6 | 2,420 | (48,013 | ) | |||||
Zeltia S.A.†††,5,6 | 8,000 | (54,559 | ) | |||||
Intuitive Surgical, Inc.*,†††,5,6 | 200 | (56,100 | ) | |||||
Auxilium Pharmaceuticals, Inc.*,†††,5,6 | 1,540 | (56,703 | ) | |||||
XenoPort, Inc.*,†††,5,6 | 1,376 | (63,062 | ) | |||||
Luminex Corp.*,†††,5,6 | 2,500 | (63,725 | ) |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 17 |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Alpha Opportunity Fund |
Shares | Value | |||||||
Regeneron Pharmaceuticals, Inc.*,†††,5,6 | 3,180 | $ | (69,038 | ) | ||||
Vertex Pharmaceuticals, Inc.*,†††,5,6 | 2,600 | (71,942 | ) | |||||
Align Technology, Inc.*,†††,5,6 | 6,100 | (74,420 | ) | |||||
Intercell AG*,†††,5,6 | 1,900 | (74,840 | ) | |||||
Acorda Therapeutics, Inc.*,†††,5,6 | 2,800 | (74,900 | ) | |||||
Rigel Pharmaceuticals, Inc.*,†††,5,6 | 3,050 | (78,324 | ) | |||||
Sequenom, Inc.*,†††,5,6 | 3,810 | (78,524 | ) | |||||
Cepheid, Inc.*,†††,5,6 | 5,300 | (81,620 | ) | |||||
AMAG Pharmaceuticals, Inc.*,†††,5,6 | 1,900 | (82,954 | ) | |||||
Basilea Pharmaceutica*,†††,5,6 | 500 | (83,365 | ) | |||||
Alnylam Pharmaceuticals, Inc.*,†††,5,6 | 2,900 | (85,289 | ) | |||||
athenahealth, Inc.*,†††,5,6 | 2,500 | (89,625 | ) | |||||
Total Health Care | (1,340,348 | ) | ||||||
Consumer Discretionary - (12.8)% | ||||||||
Fuel Systems Solutions, Inc.* | 253 | (7,636 | ) | |||||
Tokyo Broadcasting System Holdings, Inc.†††,5,6 | 1,300 | (21,836 | ) | |||||
Genting Singapore plc*,†††,5,6 | 124,900 | (41,123 | ) | |||||
bwin Interactive Entertainment AG†††,5,6 | 1,600 | (45,582 | ) | |||||
Bwin.Party Digital Entertainment plc*,†††,5,6 | 15,200 | (57,210 | ) | |||||
Focus Media Holding Ltd. ADR*,†††,5,6 | 2,130 | (63,900 | ) | |||||
Sky Deutschland AG*,†††,5,6 | 4,000 | (65,668 | ) | |||||
Marui Group Company Ltd.†††,5,6 | 29,100 | (219,527 | ) | |||||
Pool Corp.†††,5,6 | 11,639 | (288,065 | ) | |||||
Electrolux AB†††,5,6 | 30,100 | (395,761 | ) | |||||
Volkswagen AG†††,5,6 | 1,300 | (539,374 | ) | |||||
Total Consumer Discretionary | (1,745,682 | ) | ||||||
Total Common Stock Sold Short (Proceeds $7,177,613) | (7,355,017 | ) | ||||||
Cash & Other Assets, Less Liabilities - 41.8% | 5,702,738 | |||||||
Total Net Assets - 100.0% | $ | 13,658,327 | ||||||
INVESTMENT CONCENTRATION
At March 31, 2011, the investment diversification of the Fund was as follows:
% of | ||||||||
Country | Net Assets | Value | ||||||
United States | 78.1 | % | $ | 10,675,169 | ||||
Cayman Islands | 5.3 | 732,525 | ||||||
Bermuda | 0.8 | 115,571 | ||||||
Brazil | 0.3 | 47,611 | ||||||
Singapore | 0.3 | 37,880 | ||||||
South Africa | 0.2 | 26,756 | ||||||
Argentina | 0.0 | 724 | ||||||
Norway | (0.2 | ) | (30,951 | ) | ||||
Ireland | (0.3 | ) | (35,971 | ) | ||||
Isle Of Man | (0.3 | ) | (41,123 | ) | ||||
Canada | (0.4 | ) | (53,982 | ) | ||||
Spain | (0.4 | ) | (54,559 | ) | ||||
Hong Kong | (0.4 | ) | (56,878 | ) | ||||
Gibraltar | (0.4 | ) | (57,210 | ) | ||||
United Kingdom | (0.4 | ) | (61,105 | ) | ||||
Switzerland | (0.8 | ) | (107,651 | ) | ||||
Republic of Korea | (1.8 | ) | (247,734 | ) | ||||
Australia | (1.8 | ) | (248,127 | ) | ||||
China | (1.9 | ) | (261,792 | ) | ||||
Sweden | (2.9 | ) | (395,761 | ) | ||||
Austria | (3.2 | ) | (439,958 | ) | ||||
Portugal | (3.4 | ) | (461,804 | ) | ||||
Japan | (3.8 | ) | (520,999 | ) | ||||
Germany | (4.4 | ) | (605,042 | ) | ||||
Total Investments | 58.2 | % | $ | 7,955,589 | ||||
Unrealized | ||||||||
Contracts | Gain | |||||||
FUTURES CONTRACTS PURCHASED† | ||||||||
June 2011 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $3,434,600) | 52 | $ | 14,599 | |||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs, except otherwise noted — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
††† | Value determined based on Level 3 inputs — See Note 10. | |
1 | All or a portion of the security is deemed illiquid due to the Fund’s exposure to Lehman Brothers International Europe (“LBIE”) prime brokerage services. The total market value of illiquid securities is $8,472,434 (cost $7,620,331), or 62.0% of total net assets. The security was deemed liquid at the time of purchase — See Note 9. | |
2 | All or a portion of this security is pledged as short security collateral at March 31, 2011. | |
3 | On September 7, 2008 the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm. | |
4 | Repurchase Agreement — See Note 5. | |
5 | All or a portion of this security was fair valued by the Valuation Committee at March 31, 2011. The total market value of fair valued securities amounts to $(7,341,377) (proceeds $7,164,436), or (53.8%) of total net assets. | |
6 | Illiquid security. | |
7 | Security was acquired through a private placement. | |
ADR — American Depositary Receipt | ||
plc — Public Limited Company |
18 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund
Alpha Opportunity Fund
Alpha Opportunity Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments, at value*,† | $ | 13,944,089 | ||
Repurchase agreements, at value** | 1,366,517 | |||
Total investments | 15,310,606 | |||
Restricted cash† | 1,759,316 | |||
Restricted cash denominated in a foreign currency, at value*** | 3,701,800 | |||
Receivables: | ||||
Securities sold | 1,176,270 | |||
Dividends | 19,925 | |||
Due from Security Investors | 8,467 | |||
Foreign taxes reclaim | 216 | |||
Prepaid expense | 24,946 | |||
Total assets | 22,001,546 | |||
Liabilities: | ||||
Cash overdraft | 7,257 | |||
Securities sold short, at value****,† | 7,355,017 | |||
Payable for: | ||||
Variation margin | 7,540 | |||
Securities purchased | 869,963 | |||
Fund shares redeemed | 2,641 | |||
Management fees | 14,162 | |||
Custodian fees | 25,144 | |||
Transfer agent/maintenance fees | 5,514 | |||
Distribution and service fees | 4,267 | |||
Portfolio accounting fees | 2,034 | |||
Professional fees | 11,353 | |||
Directors’ fees | 975 | |||
Legal fees | 21,175 | |||
Pricing fees | 8,174 | |||
Other | 6,299 | |||
Corporate expenses | 1,704 | |||
Total liabilities | 8,343,219 | |||
Net assets | $ | 13,658,327 | ||
Net assets consist of: | ||||
Paid in capital | $ | 23,459,229 | ||
Accumulated net investment loss | (36,052 | ) | ||
Accumulated net realized loss on investments | (10,713,278 | ) | ||
Net unrealized appreciation in on investments | 948,428 | |||
Net assets | $ | 13,658,327 | ||
A-Class: | ||||
Net assets | $ | 8,970,828 | ||
Capital shares outstanding | 720,163 | |||
Net asset value per share | $ | 12.46 | ||
Maximum offering price per share†† | $ | 13.08 | ||
B-Class: | ||||
Net assets | $ | 1,111,943 | ||
Capital shares outstanding | 96,313 | |||
Net asset value per share | $ | 11.55 | ||
C-Class: | ||||
Net assets | $ | 1,765,064 | ||
Capital shares outstanding | 152,895 | |||
Net asset value per share | $ | 11.54 | ||
Institutional Class: | ||||
Net assets | $ | 1,810,492 | ||
Capital shares outstanding | 105,668 | |||
Net asset value per share | $ | 17.13 | ||
* Investments, at cost | $ | 13,154,190 | ||
** Repurchase agreements, at cost | 1,366,517 | |||
Total cost | $ | 14,520,707 | ||
*** Restricted cash denominated in a foreign currency, at cost | 3,380,466 | |||
**** Securities sold short, proceeds | 7,177,613 |
† | All or portion of this amount represents values related to Lehman Brothers International Europe prime brokerage services — See Note 8. | |
†† | Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends (net of foreign withholding tax of $199) | $ | 114,189 | ||
Interest | 932 | |||
Total investment income | 115,121 | |||
Expenses: | ||||
Management fees | 80,749 | |||
Transfer agent/maintenance fees | 27,246 | |||
Distribution and service fees: | ||||
A-Class | 10,635 | |||
B-Class | 5,723 | |||
C-Class | 8,229 | |||
Portfolio accounting fees | 13,075 | |||
Directors’ fees†††† | 639 | |||
Short sales dividend expense | 1,055 | |||
Registration fees | 22,526 | |||
Legal fees | 44,684 | |||
Pricing fees | 12,840 | |||
Miscellaneous | 26,392 | |||
Prime broker interest expense | 2,534 | |||
Total expenses | 256,327 | |||
Expenses waived by Advisor | (107,997 | ) | ||
Net expenses | 148,330 | |||
Net investment loss | (33,209 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments††† | 1,373,221 | |||
Futures contracts | 572,949 | |||
Foreign currency | 102 | |||
Securities sold short | (13,613 | ) | ||
Net realized gain | 1,932,659 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 1,220,909 | |||
Securities sold short | 2,698 | |||
Futures contracts | (34,434 | ) | ||
Foreign currency | 128,817 | |||
Net change in unrealized appreciation | 1,317,990 | |||
Net realized and unrealized gain | 3,250,649 | |||
Net increase in net assets resulting from operations | $ | 3,217,440 | ||
††† | Includes net realized gains of $9,993 on affiliated issuers. | |
†††† | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 19 |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Alpha Opportunity Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment loss | $ | (33,209 | ) | $ | (114,876 | ) | ||
Net realized gain on investments and foreign currency transactions | 1,932,659 | 1,037,820 | ||||||
Net change in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 1,317,990 | 683,849 | ||||||
Net increase in net assets resulting from operations | 3,217,440 | 1,606,793 | ||||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class* | 88,633 | 293,839 | ||||||
B-Class | — | — | ||||||
C-Class | — | — | ||||||
Institutional Class | — | — | ||||||
Cost of shares redeemed | ||||||||
A-Class | (1,383,368 | ) | (2,954,805 | ) | ||||
B-Class | (329,978 | ) | (635,054 | ) | ||||
C-Class | (127,709 | ) | (698,685 | ) | ||||
Institutional Class | (38,782 | ) | (917,495 | ) | ||||
Net decrease from capital share transactions | (1,791,204 | ) | (4,912,200 | ) | ||||
Net increase (decrease) in net assets | 1,426,236 | (3,305,407 | ) | |||||
Net assets: | ||||||||
Beginning of period | 12,232,091 | 15,537,498 | ||||||
End of period | $ | 13,658,327 | $ | 12,232,091 | ||||
Accumulated net investment loss at end of period | $ | (36,052 | ) | $ | (2,843 | ) | ||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class* | 8,377 | 32,339 | ||||||
Shares redeemed | ||||||||
A-Class | (126,966 | ) | (333,306 | ) | ||||
B-Class | (32,260 | ) | (74,867 | ) | ||||
C-Class | (12,101 | ) | (83,926 | ) | ||||
Institutional Class | (2,605 | ) | (75,471 | ) | ||||
Net decrease in shares | (165,555 | ) | (535,231 | ) | ||||
* | Represents conversion of B-Class to A-Class shares. |
20 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Alpha Opportunity Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011a | 2010 | 2009 | 2008d | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.70 | $ | 8.56 | $ | 9.37 | $ | 13.94 | $ | 12.23 | $ | 12.37 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.02 | ) | (0.06 | ) | (0.04 | ) | (0.16 | ) | (0.01 | ) | (0.06 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 2.78 | 1.20 | (0.77 | ) | (1.68 | ) | 2.99 | 0.93 | ||||||||||||||||
Total from investment operations | 2.76 | 1.14 | (0.81 | ) | (1.84 | ) | 2.98 | 0.87 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (2.57 | ) | (1.27 | ) | (1.01 | ) | |||||||||||||||
Return of capital | — | — | — | (0.16 | ) | — | — | |||||||||||||||||
Total distributions | — | — | — | (2.73 | ) | (1.27 | ) | (1.01 | ) | |||||||||||||||
Net asset value, end of period | $ | 12.46 | $ | 9.70 | $ | 8.56 | $ | 9.37 | $ | 13.94 | $ | 12.33 | ||||||||||||
Total Returnc | 28.32 | % | 13.43 | % | (8.64 | %) | (15.99 | %) | 26.10 | % | 7.39 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 8,971 | $ | 8,138 | $ | 9,752 | $ | 30,615 | $ | 25,072 | $ | 20,595 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.38 | %) | (0.71 | %) | (0.50 | %) | (1.44 | %) | (0.08 | %) | (0.50 | %) | ||||||||||||
Total expensese | 3.84 | % | 3.51 | % | 3.82 | % | 3.41 | % | 2.88 | % | 3.20 | % | ||||||||||||
Net expensesf | 2.17 | % | 2.21 | % | 2.00 | % | 3.32 | % | 2.82 | % | 3.04 | % | ||||||||||||
Operating expensesg | 2.11 | % | 2.05 | % | 1.95 | % | 3.06 | % | 2.62 | % | 2.95 | % | ||||||||||||
Portfolio turnover rate | 504 | % | 954 | % | 422 | % | 1,248 | % | 1,697 | % | 1,302 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011a | 2010 | 2009 | 2008d | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.03 | $ | 8.04 | $ | 8.87 | $ | 13.42 | $ | 11.90 | $ | 12.15 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.06 | ) | (0.12 | ) | (0.09 | ) | (0.23 | ) | (0.09 | ) | (0.15 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 2.58 | 1.11 | (0.74 | ) | (1.59 | ) | 2.88 | 0.91 | ||||||||||||||||
Total from investment operations | 2.52 | 0.99 | (0.83 | ) | (1.82 | ) | 2.79 | 0.76 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (2.57 | ) | (1.27 | ) | (1.01 | ) | |||||||||||||||
Return of capital | — | — | — | (0.16 | ) | — | — | |||||||||||||||||
Total distributions | — | — | — | (2.73 | ) | (1.27 | ) | (1.01 | ) | |||||||||||||||
Net asset value, end of period | $ | 11.55 | $ | 9.03 | $ | 8.04 | $ | 8.87 | $ | 13.42 | $ | 11.90 | ||||||||||||
Total Returnc | 27.91 | % | 12.31 | % | (9.36 | %) | (16.66 | %) | 25.14 | % | 6.56 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,112 | $ | 1,161 | $ | 1,635 | $ | 5,391 | $ | 3,154 | $ | 4,846 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.14 | %) | (1.47 | %) | (1.24 | %) | (2.18 | %) | (0.77 | %) | (1.24 | %) | ||||||||||||
Total expensese | 4.61 | % | 4.27 | % | 4.57 | % | 4.16 | % | 3.59 | % | 3.95 | % | ||||||||||||
Net expensesf | 2.92 | % | 2.96 | % | 2.75 | % | 4.04 | % | 3.53 | % | 3.78 | % | ||||||||||||
Operating expensesg | 2.86 | % | 2.80 | % | 2.69 | % | 3.78 | % | 3.33 | % | 3.69 | % | ||||||||||||
Portfolio turnover rate | 504 | % | 954 | % | 422 | % | 1,248 | % | 1,697 | % | 1,302 | % |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 21 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Alpha Opportunity Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011a | 2010 | 2009 | 2008d | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.03 | $ | 8.02 | $ | 8.87 | $ | 13.43 | $ | 11.90 | $ | 12.15 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.06 | ) | (0.12 | ) | (0.09 | ) | (0.23 | ) | (0.10 | ) | (0.15 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 2.57 | 1.13 | (0.76 | ) | (1.60 | ) | 2.90 | 0.91 | ||||||||||||||||
Total from investment operations | 2.51 | 1.01 | (0.85 | ) | (1.83 | ) | 2.80 | 0.76 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (2.57 | ) | (1.27 | ) | (1.01 | ) | |||||||||||||||
Return of capital | — | — | — | (0.16 | ) | — | — | |||||||||||||||||
Total distributions | — | — | — | (2.73 | ) | (1.27 | ) | (1.01 | ) | |||||||||||||||
Net asset value, end of period | $ | 11.54 | $ | 9.03 | $ | 8.02 | $ | 8.87 | $ | 13.43 | $ | 11.90 | ||||||||||||
Total Returnc | 27.80 | % | 12.59 | % | (9.58 | %) | (16.63 | %) | 25.24 | % | 6.56 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,765 | $ | 1,490 | $ | 1,996 | $ | 4,935 | $ | 4,216 | $ | 5,576 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.13 | %) | (1.46 | %) | (1.24 | %) | (2.21 | %) | (0.77 | %) | (1.18 | %) | ||||||||||||
Total expensese | 4.58 | % | 4.28 | % | 4.67 | % | 4.16 | % | 3.60 | % | 3.95 | % | ||||||||||||
Net expensesf | 2.91 | % | 2.95 | % | 2.75 | % | 4.09 | % | 3.54 | % | 3.77 | % | ||||||||||||
Operating expensesg | 2.86 | % | 2.80 | % | 2.69 | % | 3.83 | % | 3.34 | % | 3.68 | % | ||||||||||||
Portfolio turnover rate | 504 | % | 954 | % | 422 | % | 1,248 | % | 1,697 | % | 1,302 | % |
Period Ended | Year Ended | Period Ended | ||||||||||
March 31, | September 30, | September 30, | ||||||||||
Institutional Class | 2011a | 2010 | 2009h | |||||||||
Per Share Data | ||||||||||||
Net asset value, beginning of period | $ | 13.33 | $ | 11.73 | $ | 10.00 | ||||||
Income (loss) from investment operations: | ||||||||||||
Net investment lossb | (0.01 | ) | (0.06 | ) | (0.01 | ) | ||||||
Net gain on investments (realized and unrealized) | 3.81 | 1.66 | 1.74 | |||||||||
Total from investment operations | 3.80 | 1.60 | 1.73 | |||||||||
Net asset value, end of period | $ | 17.13 | $ | 13.33 | $ | 11.73 | ||||||
Total Returnc | 28.51 | % | 13.64 | % | 17.30 | % | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of period (in thousands) | $ | 1,810 | $ | 1,444 | $ | 2,155 | ||||||
Ratios to average net assets: | ||||||||||||
Net investment loss | (0.13 | %) | (0.48 | %) | (0.07 | %) | ||||||
Total expensese | 3.57 | % | 3.28 | % | 3.94 | % | ||||||
Net expensesf | 1.91 | % | 1.96 | % | 1.76 | % | ||||||
Operating expensesg | 1.86 | % | 1.80 | % | 1.70 | % | ||||||
Portfolio turnover rate | 504 | % | 954 | % | 422 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Security Global Investors, LLC (SGI) became the sub-advisor of 37.5% of the assets of the Alpha Opportunity Fund effective August 18, 2008. Also effective August 18, 2008, Mainstream Investment Advisers, LLC (Mainstream) sub-advises 37.5% of the assets and Security Investors, LLC (SI) manages 25% of the assets. Prior to August 18, 2008, Mainstream sub-advised 60% of the assets and SI managed the remaining 40% of the assets. | |
e | Total expense information reflects expense ratios absent expense reductions by the Investment Manager and custodian earnings credits, as applicable. | |
f | Net expense information reflects the expense ratios after voluntary expense waivers, and reimbursements, and before custodian earnings credits, as applicable. | |
g | Operating expenses exclude interest and dividend expense from securities sold short. | |
h | Since commencement of operations: November 7, 2008 — Alpha Opportunity Fund Institutional Class. |
22 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211907.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Large Cap Core Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The S&P 500® Index is a capitalization-weighted index composed of 500 selected common stocks that represent the broad domestic economy and is a widely recognized unmanaged index on market performance.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 15.50 | % | 0.39 | % | 0.93 | % | ||||||
A-Class Shares with sales charge | 8.80 | % | -0.78 | % | 0.33 | % | ||||||
B-Class Shares | 14.44 | % | -0.38 | % | 0.28 | % | ||||||
B-Class Shares with CDSC | 9.44 | % | -0.67 | % | 0.28 | % | ||||||
C-Class Shares | 14.57 | % | -0.31 | % | 0.17 | % | ||||||
C-Class Shares with CDSC | 13.57 | % | -0.31 | % | 0.17 | % | ||||||
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Information Technology | 21.0 | % | ||
Industrials | 15.5 | % | ||
Energy | 13.9 | % | ||
Consumer Discretionary | 13.0 | % | ||
Financials | 10.5 | % | ||
Health Care | 7.5 | % | ||
Consumer Staples | 6.1 | % | ||
Materials | 5.1 | % | ||
Utilities | 1.4 | % | ||
Telecommunication Services | 0.6 | % | ||
Exchange Traded Funds | 1.4 | % | ||
Cash & Other Assets, Less Liabilities | 4.0 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 23
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Large Cap Core Fund |
Shares | Value | |||||||
COMMON STOCKS† - 94.6% | ||||||||
Information Technology - 21.0% | ||||||||
Apple, Inc.* | 16,085 | $ | 5,604,818 | |||||
Google, Inc. — Class A* | 8,475 | 4,968,130 | ||||||
QUALCOMM, Inc. | 85,300 | 4,676,999 | ||||||
EMC Corp.* | 167,740 | 4,453,497 | ||||||
Autodesk, Inc.* | 84,570 | 3,730,383 | ||||||
Cognizant Technology Solutions Corp. — Class A* | 42,680 | 3,474,152 | ||||||
Western Union Co. | 155,900 | 3,238,043 | ||||||
Microsoft Corp. | 126,750 | 3,214,380 | ||||||
Avago Technologies Ltd. | 89,950 | 2,797,445 | ||||||
TE Connectivity, Ltd. | 75,400 | 2,625,428 | ||||||
Computer Sciences Corp. | 50,100 | 2,441,373 | ||||||
Hewlett-Packard Co. | 50,716 | 2,077,834 | ||||||
Visa, Inc. — Class A | 12,100 | 890,802 | ||||||
Synopsys, Inc.* | 17,200 | 475,580 | ||||||
Total Information Technology | 44,668,864 | |||||||
Industrials - 15.5% | ||||||||
Parker Hannifin Corp. | 50,590 | 4,789,861 | ||||||
Equifax, Inc. | 108,500 | 4,215,225 | ||||||
Eaton Corp. | 65,400 | 3,625,776 | ||||||
Deere & Co. | 36,120 | 3,499,667 | ||||||
Precision Castparts Corp. | 23,340 | 3,435,181 | ||||||
United Parcel Service, Inc. — Class B | 45,400 | 3,374,128 | ||||||
CSX Corp. | 41,220 | 3,239,892 | ||||||
United Technologies Corp. | 29,400 | 2,488,710 | ||||||
Babcock & Wilcox Co.* | 63,300 | 2,112,954 | ||||||
USG Corp.* | 66,400 | 1,106,224 | ||||||
FedEx Corp. | 10,200 | 954,210 | ||||||
Total Industrials | 32,841,828 | |||||||
Energy - 13.9% | ||||||||
Halliburton Co. | 125,470 | 6,253,425 | ||||||
Baker Hughes, Inc. | 55,000 | 4,038,650 | ||||||
Peabody Energy Corp. | 54,250 | 3,903,830 | ||||||
Chevron Corp. | 32,240 | 3,463,543 | ||||||
McDermott International, Inc.* | 126,600 | 3,214,374 | ||||||
Williams Companies, Inc. | 93,900 | 2,927,802 | ||||||
Exxon Mobil Corp. | 22,600 | 1,901,338 | ||||||
Apache Corp. | 11,400 | 1,492,488 | ||||||
Chesapeake Energy Corp. | 35,400 | 1,186,608 | ||||||
ConocoPhillips | 14,400 | 1,149,984 | ||||||
Total Energy | 29,532,042 | |||||||
Consumer Discretionary - 13.0% | ||||||||
Time Warner, Inc. | 163,866 | 5,850,016 | ||||||
Walt Disney Co. | 87,690 | 3,778,562 | ||||||
Ford Motor Co.* | 242,000 | 3,608,220 | ||||||
Starbucks Corp. | 92,470 | 3,416,767 | ||||||
Omnicom Group, Inc. | 69,040 | 3,387,102 | ||||||
Johnson Controls, Inc. | 78,580 | 3,266,571 | ||||||
Lowe’s Companies, Inc. | 123,300 | 3,258,819 | ||||||
Best Buy Company, Inc. | 25,400 | 729,488 | ||||||
JC Penney Company, Inc. | 10,200 | 366,282 | ||||||
Total Consumer Discretionary | 27,661,827 | |||||||
Financials - 10.5% | ||||||||
U.S. Bancorp | 217,106 | 5,738,112 | ||||||
Goldman Sachs Group, Inc. | 20,230 | 3,205,848 | ||||||
AON Corp. | 58,700 | 3,108,752 | ||||||
Wells Fargo & Co. | 89,778 | 2,845,963 | ||||||
Bank of New York Mellon Corp. | 69,300 | 2,069,991 | ||||||
Berkshire Hathaway, Inc. — Class A* | 16 | 2,004,800 | ||||||
JPMorgan Chase & Co. | 41,770 | 1,925,597 | ||||||
BB&T Corp. | 39,112 | 1,073,624 | ||||||
First Marblehead Corp.* | 97,760 | 215,072 | ||||||
Total Financials | 22,187,759 | |||||||
Health Care - 7.5% | ||||||||
Covidien plc | 107,990 | 5,609,000 | ||||||
Warner Chilcott plc — Class A | 116,710 | 2,717,009 | ||||||
Aetna, Inc. | 68,300 | 2,556,469 | ||||||
Hospira, Inc.* | 44,100 | 2,434,320 | ||||||
Forest Laboratories, Inc.* | 33,800 | 1,091,740 | ||||||
Medco Health Solutions, Inc.* | 14,800 | 831,168 | ||||||
Merck & Company, Inc. | 17,762 | 586,324 | ||||||
Total Health Care | 15,826,030 | |||||||
Consumer Staples - 6.1% | ||||||||
Bunge Ltd. | 61,250 | 4,430,212 | ||||||
CVS Caremark Corp. | 67,400 | 2,313,168 | ||||||
Wal-Mart Stores, Inc. | 43,600 | 2,269,380 | ||||||
Costco Wholesale Corp. | 23,200 | 1,701,024 | ||||||
Kraft Foods, Inc. — Class A | 43,100 | 1,351,616 | ||||||
Altria Group, Inc. | 34,500 | 898,035 | ||||||
Total Consumer Staples | 12,963,435 | |||||||
Materials - 5.1% | ||||||||
Dow Chemical Co. | 151,220 | 5,708,555 | ||||||
Freeport-McMoRan Copper & Gold, Inc. — Class B | 65,600 | 3,644,080 | ||||||
Bemis Company, Inc. | 45,600 | 1,496,136 | ||||||
Total Materials | 10,848,771 | |||||||
Utilities - 1.4% | ||||||||
Edison International | 66,400 | 2,429,576 | ||||||
NRG Energy, Inc.* | 25,100 | 540,654 | ||||||
Total Utilities | 2,970,230 | |||||||
Telecommunication Services - 0.6% | ||||||||
Windstream Corp. | 98,400 | 1,266,408 | ||||||
Total Common Stocks (Cost $169,242,221) | 200,767,194 | |||||||
24 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Large Cap Core Fund |
Shares | Value | |||||||
EXCHANGE TRADED FUNDS† - 1.4% | ||||||||
iShares Russell 1000 Value Index Fund | 23,600 | $ | 1,620,612 | |||||
iShares S&P 500 Value Index Fund | 23,800 | 1,506,778 | ||||||
Total Exchange Traded Funds (Cost $2,773,362) | 3,127,390 | |||||||
Total Investments - 96.0% (Cost $172,015,583) | $ | 203,894,584 | ||||||
Cash & Other Assets, Less Liabilities - 4.0% | 8,387,662 | |||||||
Total Net Assets - 100.0% | $ | 212,282,246 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
plc — Public Limited Company |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 25 |
Table of Contents
Rydex|SGI Equity Fund
Large Cap Core Fund
Large Cap Core Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 203,894,584 | ||
Total investments | 203,894,584 | |||
Cash | 7,354,446 | |||
Receivables: | ||||
Securities sold | 1,552,648 | |||
Fund shares sold | 4,935 | |||
Dividends | 232,471 | |||
Prepaid expenses | 45,897 | |||
Total assets | 213,084,981 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares redeemed | 410,104 | |||
Management fees | 133,227 | |||
Transfer agent/maintenance fees | 39,748 | |||
Distribution and service fees | 50,379 | |||
Portfolio accounting fees | 16,875 | |||
Professional fees | 39,183 | |||
Directors’ fees | 7,691 | |||
Legal fees | 2,963 | |||
Pricing fees | 33 | |||
Direct shareholders expense | 83,402 | |||
Corporate expenses | 515 | |||
Other | 18,615 | |||
Total liabilities | 802,735 | |||
Net assets | $212,282,246 | |||
Net assets consist of: | ||||
Paid in capital | $ | 202,287,935 | ||
Accumulated net investment loss | (133,238 | ) | ||
Accumulated net realized loss on investments | (21,751,452 | ) | ||
Net unrealized appreciation in on investments | 31,879,001 | |||
Net assets | $ | 212,282,246 | ||
A-Class: | ||||
Net assets | $ | 202,881,261 | ||
Capital shares outstanding1 | 9,683,824 | |||
Net asset value per share1 | $ | 20.95 | ||
Maximum offering price per share**1 | $ | 21.99 | ||
B-Class: | ||||
Net assets | $ | 7,358,228 | ||
Capital shares outstanding1 | 429,312 | |||
Net asset value per share1 | $ | 17.14 | ||
C-Class: | ||||
Net assets | $ | 2,042,757 | ||
Capital shares outstanding1 | 110,166 | |||
Net asset value per share1 | $ | 18.54 | ||
* Investments, at cost | $ | 172,015,583 | ||
1 The shares outstanding, net asset value per share and the maximum offering price per share have been restated to reflect a 1-for-4 reverse share split effective April 8, 2011. See Note 12 in Notes to Financial Statements. | ||||
** Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 1,389,164 | ||
Interest | 1,010 | |||
Total investment income | 1,390,174 | |||
Expenses: | ||||
Management fees | 751,945 | |||
Transfer agent/maintenance fees | 268,101 | |||
Distribution and service fees: | ||||
A-Class | 238,846 | |||
B-Class | 36,322 | |||
C-Class | 10,887 | |||
Portfolio accounting fees | 95,245 | |||
Directors’ fees* | 8,852 | |||
Miscellaneous | 71,815 | |||
Total expenses | 1,482,013 | |||
Net investment loss | (91,839 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 12,946,515 | |||
Net realized gain | 12,946,515 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 22,638,175 | |||
Options written | (12,667 | ) | ||
Net change in unrealized appreciation | 22,625,508 | |||
Net realized and unrealized gain | 35,572,023 | |||
Net increase in net assets resulting from operations | $ | 35,480,184 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
26 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Large Cap Core Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income (loss) | $ | (91,839 | ) | $ | 505,424 | |||
Net realized gain on investments | 12,946,515 | 6,646,343 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 22,625,508 | 8,023,383 | ||||||
Net increase in net assets resulting from operations | 35,480,184 | 15,175,150 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | ||||||||
A-Class | (546,823 | ) | — | |||||
Total distributions to shareholders | (546,823 | ) | — | |||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 5,642,017 | 12,543,804 | ||||||
B-Class | 741,986 | 2,379,823 | ||||||
C-Class | 99,555 | 266,313 | ||||||
Distributions reinvested | ||||||||
A-Class | 502,041 | — | ||||||
Cost of shares redeemed | ||||||||
A-Class | (10,919,157 | ) | (27,969,578 | ) | ||||
B-Class | �� | (1,464,065 | ) | (3,966,116 | ) | |||
C-Class | (599,981 | ) | (514,992 | ) | ||||
Net decrease from capital share transactions | (5,997,604 | ) | (17,260,746 | ) | ||||
Net increase (decrease) in net assets | 28,935,757 | (2,085,596 | ) | |||||
Net assets: | ||||||||
Beginning of period | 183,346,489 | 185,432,085 | ||||||
End of period | $ | 212,282,246 | $ | 183,346,489 | ||||
Accumulated/(Undistributed) net investment income/(loss) at end of period | $ | (133,238 | ) | $ | 505,424 | |||
Capital share activity:1 | ||||||||
Shares sold | ||||||||
A-Class | 288,625 | 736,887 | ||||||
B-Class | 46,325 | 171,540 | ||||||
C-Class | 5,684 | 17,562 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 25,932 | — | ||||||
Shares redeemed | ||||||||
A-Class | (558,694 | ) | (1,630,932 | ) | ||||
B-Class | (90,982 | ) | (279,623 | ) | ||||
C-Class | (34,224 | ) | (33,966 | ) | ||||
Net decrease in shares | (317,334 | ) | (1,018,532 | ) | ||||
1 | The share activity has been restated to reflect a 1-for-4 reverse share split effective April 8, 2011. See Note 12 in Notes to Financial Statements. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 27 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Large Cap Core Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011a,e | 2010e | 2009e | 2008e | 2007e | 2006e | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.56 | $ | 16.20 | $ | 17.04 | $ | 27.36 | $ | 27.40 | $ | 26.32 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | —c | 0.04 | 0.04 | 0.04 | —c | (0.04 | ) | |||||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 3.43 | 1.32 | (0.80 | ) | (6.44 | ) | 2.76 | 2.08 | ||||||||||||||||
Total from investment operations | 3.43 | 1.36 | (0.76 | ) | (6.40 | ) | 2.76 | 2.04 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.04 | ) | — | (0.04 | ) | — | — | (0.16 | ) | |||||||||||||||
Net realized gains | — | — | — | (3.88 | ) | (2.80 | ) | (0.80 | ) | |||||||||||||||
Return of capital | — | — | (0.04 | ) | (0.04 | ) | — | — | ||||||||||||||||
Total distributions | (0.04 | ) | — | (0.08 | ) | (3.92 | ) | (2.80 | ) | (0.96 | ) | |||||||||||||
Net asset value, end of period | $ | 20.95 | $ | 17.56 | $ | 16.20 | $ | 17.04 | $ | 27.36 | $ | 27.40 | ||||||||||||
Total Returnd | 19.71 | % | 8.40 | % | (4.32 | %) | (26.12 | %) | 10.33 | % | 7.88 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 202,881 | $ | 174,371 | $ | 175,404 | $ | 205,908 | $ | 322,850 | $ | 371,006 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.06 | %) | 0.31 | % | 0.28 | % | 0.15 | % | 0.02 | % | (0.08 | %) | ||||||||||||
Total expenses | 1.44 | % | 1.43 | % | 1.49 | % | 1.36 | % | 1.34 | % | 1.34 | % | ||||||||||||
Portfolio turnover rate | 43 | % | 100 | % | 69 | % | 111 | % | 20 | % | 34 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011a,e | 2010e | 2009e | 2008e | 2007e | 2006e | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 14.40 | $ | 13.36 | $ | 14.12 | $ | 23.56 | $ | 24.16 | $ | 23.32 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.08 | ) | (0.08 | ) | (0.04 | ) | (0.12 | ) | (0.16 | ) | (0.20 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 2.82 | 1.12 | (0.68 | ) | (5.40 | ) | 2.36 | 1.84 | ||||||||||||||||
Total from investment operations | 2.74 | 1.04 | (0.72 | ) | (5.52 | ) | 2.20 | 1.64 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (3.88 | ) | (2.80 | ) | (0.80 | ) | |||||||||||||||
Return of capital | — | — | (0.04 | ) | (0.04 | ) | — | — | ||||||||||||||||
Total distributions | — | — | (0.04 | ) | (3.92 | ) | (2.80 | ) | (0.80 | ) | ||||||||||||||
Net asset value, end of period | $ | 17.14 | $ | 14.40 | $ | 13.36 | $ | 14.12 | $ | 23.56 | $ | 24.16 | ||||||||||||
Total Returnd | 18.89 | % | 7.78 | % | (4.96 | %) | (26.69 | %) | 9.33 | % | 7.16 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 7,358 | $ | 6,817 | $ | 7,784 | $ | 10,621 | $ | 19,928 | $ | 27,842 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.81 | %) | (0.48 | %) | (0.46 | %) | (0.61 | %) | (0.74 | %) | (0.83 | %) | ||||||||||||
Total expenses | 2.19 | % | 2.17 | % | 2.24 | % | 2.11 | % | 2.09 | % | 2.09 | % | ||||||||||||
Portfolio turnover rate | 43 | % | 100 | % | 69 | % | 111 | % | 20 | % | 34 | % |
28 | the RYDEX|SGI equity funds semi-annual report | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Large Cap Core Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011a,e | 2010e | 2009e | 2008e | 2007e | 2006e | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 15.56 | $ | 14.48 | $ | 15.24 | $ | 25.12 | $ | 25.56 | $ | 24.64 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.08 | ) | (0.08 | ) | (0.04 | ) | (0.12 | ) | (0.20 | ) | (0.20 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 3.06 | 1.16 | (0.68 | ) | (5.84 | ) | 2.56 | 1.92 | ||||||||||||||||
Total from investment operations | 2.98 | 1.08 | (0.72 | ) | (5.96 | ) | 2.36 | 1.72 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (3.88 | ) | (2.80 | ) | (0.80 | ) | |||||||||||||||
Return of capital | — | — | (0.04 | ) | (0.04 | ) | — | — | ||||||||||||||||
Total distributions | — | — | (0.04 | ) | (3.92 | ) | (2.80 | ) | (0.80 | ) | ||||||||||||||
Net asset value, end of period | $ | 18.54 | $ | 15.56 | $ | 14.48 | $ | 15.24 | $ | 25.12 | $ | 25.56 | ||||||||||||
Total Returnd | 19.28 | % | 7.46 | % | (4.60 | %) | (26.79 | %) | 9.45 | % | 7.10 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,043 | $ | 2,158 | $ | 2,244 | $ | 2,915 | $ | 5,048 | $ | 5,794 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.81 | %) | (0.44 | %) | (0.47 | %) | (0.60 | %) | (0.73 | %) | (0.83 | %) | ||||||||||||
Total expenses | 2.19 | % | 2.18 | % | 2.24 | % | 2.11 | % | 2.09 | % | 2.09 | % | ||||||||||||
Portfolio turnover rate | 43 | % | 100 | % | 69 | % | 111 | % | 20 | % | 34 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Net investment income is less than $0.01 per share. | |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
e | Per share amounts for periods ended September 30, 2006—March 31, 2011 have been restated to reflect 1:4 reverse share split effective April 8, 2011. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 29 |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211908.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Global Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The MSCI World Index is an unmanaged capitalization weighted index that is designed to measure global developed market equity performance.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 13.33 | % | 1.13 | % | 5.10 | % | ||||||
A-Class Shares with sales charge | 6.78 | % | -0.06 | % | 4.47 | % | ||||||
B-Class Shares | 13.67 | % | 1.38 | % | 4.95 | % | ||||||
B-Class Shares with CDSC | 8.67 | % | 1.16 | % | 4.95 | % | ||||||
C-Class Shares | 12.46 | % | 0.35 | % | 4.28 | % | ||||||
C-Class Shares with CDSC | 11.46 | % | 0.35 | % | 4.28 | % | ||||||
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Financials | 18.2 | % | ||
Consumer Discretionary | 17.1 | % | ||
Health Care | 12.5 | % | ||
Information Technology | 11.9 | % | ||
Materials | 11.0 | % | ||
Industrials | 8.3 | % | ||
Energy | 7.4 | % | ||
Utilities | 4.0 | % | ||
Consumer Staples | 2.5 | % | ||
Telecommunication Services | 2.4 | % | ||
Short Term Investments | 3.2 | % | ||
Cash & Other Assets, Less Liabilities | 1.5 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
30 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex | SGI Equity Fund | |
March 31, 2011 | Global Fund |
Shares | Value | |||||||
COMMON STOCKS† - 95.3% | ||||||||
Financials - 18.2% | ||||||||
JPMorgan Chase & Co. | 60,850 | $ | 2,805,185 | |||||
BNP Paribas | 38,059 | 2,783,963 | ||||||
Credit Suisse Group AG | 63,564 | 2,701,332 | ||||||
Julius Baer Group Ltd. | 56,462 | 2,450,539 | ||||||
Sony Financial Holdings, Inc. | 105,800 | 2,098,575 | ||||||
Everest Re Group Ltd. | 8,399 | 740,624 | ||||||
RenaissanceRe Holdings Ltd. | 10,624 | 732,950 | ||||||
Aspen Insurance Holdings Ltd. | 26,258 | 723,670 | ||||||
Reinsurance Group of America, Inc. — Class A | 11,059 | 694,284 | ||||||
Validus Holdings Ltd. | 19,100 | 636,603 | ||||||
Bank of America Corp. | 43,735 | 582,988 | ||||||
PartnerRe Ltd. | 6,770 | 536,455 | ||||||
Total Financials | 17,487,168 | |||||||
Consumer Discretionary - 17.1% | ||||||||
Valeo S.A. | 49,043 | 2,860,697 | ||||||
Time Warner Cable, Inc. — Class A | 38,637 | 2,756,364 | ||||||
Cie Financiere Richemont S.A. | 41,719 | 2,409,835 | ||||||
Kabel Deutschland Holding AG* | 39,598 | 2,099,022 | ||||||
Pioneer Corp. | 483,300 | 2,010,240 | ||||||
Kingfisher plc | 499,279 | 1,969,563 | ||||||
Apollo Group, Inc. — Class A* | 17,188 | 716,911 | ||||||
Tractor Supply Co. | 10,396 | 622,305 | ||||||
ITT Educational Services, Inc.* | 7,000 | 505,050 | ||||||
Volkswagen AG | 3,206 | 492,112 | ||||||
Total Consumer Discretionary | 16,442,099 | |||||||
Health Care - 12.5% | ||||||||
Express Scripts, Inc. — Class A* | 67,212 | 3,737,659 | ||||||
Fresenius SE & Company KGaA | 20,281 | 1,876,183 | ||||||
Cephalon, Inc.* | 10,700 | 810,846 | ||||||
Endo Pharmaceuticals Holdings, Inc.* | 19,198 | 732,596 | ||||||
Impax Laboratories, Inc.* | 28,600 | 727,870 | ||||||
Eli Lilly & Co. | 20,233 | 711,595 | ||||||
Abbott Laboratories | 14,503 | 711,372 | ||||||
Bristol-Myers Squibb Co. | 26,711 | 705,972 | ||||||
CR Bard, Inc. | 7,100 | 705,101 | ||||||
Magellan Health Services, Inc.* | 11,360 | 557,549 | ||||||
Merck & Company, Inc. | 14,203 | 468,841 | ||||||
Miraca Holdings, Inc. | 5,773 | 221,037 | ||||||
Total Health Care | 11,966,621 | |||||||
Information Technology - 11.9% | ||||||||
Apple, Inc.* | 10,123 | 3,527,359 | ||||||
Hitachi Ltd. | 488,000 | 2,540,170 | ||||||
Ancestry.com, Inc.* | 56,910 | 2,017,460 | ||||||
Xerox Corp. | 182,100 | 1,939,365 | ||||||
CoreLogic, Inc. | 38,673 | 715,450 | ||||||
Lender Processing Services, Inc. | 22,065 | 710,272 | ||||||
Total Information Technology | 11,450,076 | |||||||
Materials - 11.0% | ||||||||
Osisko Mining Corp.*,1 | 205,700 | 2,961,910 | ||||||
Koninklijke DSM N.V. | 41,311 | 2,538,500 | ||||||
Exxaro Resources Ltd. | 93,456 | 2,286,141 | ||||||
Mongolian Mining Corp.* | 1,162,500 | 1,485,537 | ||||||
Barrick Gold Corp. | 13,796 | 717,050 | ||||||
Newmont Mining Co. | 10,300 | 562,174 | ||||||
Total Materials | 10,551,312 | |||||||
Industrials - 8.3% | ||||||||
Amada Company Ltd. | 226,000 | 1,885,484 | ||||||
Neptune Orient Lines Ltd. | 1,143,851 | 1,760,469 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 941,000 | 1,351,218 | ||||||
GT Solar International, Inc.* | 60,199 | 641,721 | ||||||
Delta Air Lines, Inc.* | 63,100 | 618,380 | ||||||
Alaska Air Group, Inc.* | 9,697 | 614,984 | ||||||
United Continental Holdings, Inc.* | 25,400 | 583,946 | ||||||
US Airways Group, Inc.* | 63,393 | 552,153 | ||||||
Total Industrials | 8,008,355 | |||||||
Energy - 7.4% | ||||||||
El Paso Corp. | 143,000 | 2,574,000 | ||||||
CNOOC Ltd. | 944,087 | 2,378,878 | ||||||
Forest Oil Corp.* | 55,973 | 2,117,459 | ||||||
Total Energy | 7,070,337 | |||||||
Utilities - 4.0% | ||||||||
Veolia Environnement S.A. | 60,100 | 1,868,888 | ||||||
Tohoku Electric Power Company, Inc. | 41,124 | 694,587 | ||||||
NextEra Energy, Inc. | 11,235 | 619,273 | ||||||
Kansai Electric Power Company, Inc. | 28,400 | 618,290 | ||||||
Total Utilities | 3,801,038 | |||||||
Consumer Staples - 2.5% | ||||||||
Pernod-Ricard S.A. | 25,265 | 2,359,809 | ||||||
Telecommunication Services - 2.4% | ||||||||
Vodafone Group plc | 558,108 | 1,580,269 | ||||||
Tele Norte Leste Participacoes S.A. ADR | 38,449 | 674,011 | ||||||
Total Telecommunication Services | 2,254,280 | |||||||
Total Common Stocks (Cost $80,765,267) | 91,391,095 | |||||||
SHORT TERM INVESTMENT†† - 3.2% | ||||||||
State Street General Account U.S. Government Fund | 3,087,765 | 3,087,765 | ||||||
Total Short Term Investment (Cost $3,087,765) | 3,087,765 | |||||||
Total Investments - 98.5% (Cost $83,853,032) | $ | 94,478,860 | ||||||
Cash & Other Assets, Less Liabilities - 1.5% | 1,445,791 | |||||||
Total Net Assets - 100.0% | $ | 95,924,651 | ||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 31 |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Global Fund |
INVESTMENT CONCENTRATION
At March 31, 2011, the investment diversification of the Fund was as follows:
% Of Net | ||||||||
COUNTRY | Assets | Value | ||||||
United States | 40.9 | % | $ | 39,434,249 | ||||
Japan | 10.5 | 10,068,383 | ||||||
France | 10.4 | 9,873,357 | ||||||
Switzerland | 7.8 | 7,561,706 | ||||||
Germany | 4.7 | 4,467,317 | ||||||
Canada | 3.8 | 3,678,960 | ||||||
United Kingdom | 3.8 | 3,549,832 | ||||||
Bermuda | 3.6 | 3,370,302 | ||||||
Singapore | 3.2 | 3,111,687 | ||||||
Netherlands | 2.6 | 2,538,500 | ||||||
Hong Kong | 2.5 | 2,378,878 | ||||||
South Africa | 2.4 | 2,286,141 | ||||||
Cayman Islands | 1.6 | 1,485,537 | ||||||
Brazil | 0.7 | 674,011 | ||||||
Total Investments | 98.5 | % | $ | 94,478,860 | ||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
1 | Security is a PFIC (Passive Foreign Investment Company). | |
ADR — American Depositary Receipt | ||
plc — Public Limited Company |
32 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund
Global Fund
Global Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 94,478,860 | ||
Total investments | 94,478,860 | |||
Cash denominated in a foreign currency, at value** | 22,339 | |||
Receivables: | ||||
Securities sold | 8,920,098 | |||
Fund shares sold | 66,456 | |||
Dividends | 73,223 | |||
Foreign taxes reclaim | 40,432 | |||
Prepaid expenses | 25,666 | |||
Total assets | 103,627,074 | |||
Liabilities: | ||||
Payable for: | ||||
Securities purchased | 7,418,338 | |||
Fund shares redeemed | 32,601 | |||
Management fees | 80,770 | |||
Custodian fees | 27,922 | |||
Transfer agent/maintenance fees | 15,099 | |||
Distribution and service fees | 21,735 | |||
Portfolio accounting fees | 12,116 | |||
Professional fees | 22,130 | |||
Directors’ fees | 8,741 | |||
Legal fees | 525 | |||
Interest | 572 | |||
Pricing fees | 6,294 | |||
Direct shareholders expense | 23,915 | |||
Corporate expenses | 31,665 | |||
Total liabilities | 7,702,423 | |||
Net assets | $ | 95,924,651 | ||
Net assets consist of: | ||||
Paid in capital | $ | 119,664,279 | ||
Accumulated net investment loss | (1,532,053 | ) | ||
Accumulated net realized loss on investments | (32,838,299 | ) | ||
Net unrealized appreciation in on investments | 10,630,724 | |||
Net assets | $ | 95,924,651 | ||
A-Class: | ||||
Net assets | $ | 84,903,341 | ||
Capital shares outstanding | 7,116,394 | |||
Net asset value per share | $ | 11.93 | ||
Maximum offering price per share*** | $ | 12.52 | ||
B-Class: | ||||
Net assets | $ | 6,419,263 | ||
Capital shares outstanding | 617,654 | |||
Net asset value per share | $ | 10.39 | ||
C-Class: | ||||
Net assets | $ | 4,602,047 | ||
Capital shares outstanding | 447,201 | |||
Net asset value per share | $ | 10.29 | ||
* | Investments, at cost | $ | 83,853,032 | |
** | Cash denominated in a foreign currency, at cost | 22,182 |
*** | Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends (net of foreign withholding tax of $20,872) | $ | 331,414 | ||
Total investment income | 331,414 | |||
Expenses: | ||||
Management fees | 473,573 | |||
Transfer agent/maintenance fees | 135,798 | |||
Distribution and service fees: | ||||
A-Class | 104,193 | |||
C-Class | 22,858 | |||
Portfolio accounting fees | 71,036 | |||
Directors’ fees* | 6,820 | |||
Miscellaneous | 134,708 | |||
Total expenses | 948,986 | |||
Net investment loss | (617,572 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 10,159,422 | |||
Foreign currency transactions | (129,684 | ) | ||
Net realized gain | 10,029,738 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 2,797,864 | |||
Translation of assets and liabilities in foreign currencies | (718 | ) | ||
Net change in unrealized appreciation | 2,797,146 | |||
Net realized and unrealized gain | 12,826,884 | |||
Net increase in net assets resulting from operations | $ | 12,209,312 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 33 |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Global Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income (loss) | $ | (617,572 | ) | $ | 223,151 | |||
Net realized gain on investments | 10,029,738 | 11,793,752 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 2,797,146 | (6,398,467 | ) | |||||
Net increase in net assets resulting from operations | 12,209,312 | 5,618,436 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | ||||||||
A-Class | (428,482 | ) | — | |||||
B-Class | (59,809 | ) | — | |||||
Total distributions to shareholders | (488,291 | ) | — | |||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 6,992,174 | 20,592,616 | ||||||
B-Class | 267,729 | 826,631 | ||||||
C-Class | 337,932 | 439,496 | ||||||
Distributions reinvested | ||||||||
A-Class | 424,001 | — | ||||||
B-Class | 59,500 | — | ||||||
Cost of shares redeemed | ||||||||
A-Class | (11,013,632 | ) | (44,556,043 | ) | ||||
B-Class | (1,525,447 | ) | (5,667,547 | ) | ||||
C-Class | (603,429 | ) | (1,186,786 | ) | ||||
Net decrease from capital share transactions | (5,061,172 | ) | (29,551,633 | ) | ||||
Net increase (decrease) in net assets | 6,659,849 | (23,933,197 | ) | |||||
Net assets: | ||||||||
Beginning of period | 89,264,802 | 113,197,999 | ||||||
End of period | $ | 95,924,651 | $ | 89,264,802 | ||||
Accumulated net investment loss at end of period | $ | (1,532,053 | ) | $ | (426,190 | ) | ||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class | 606,852 | 2,066,878 | ||||||
B-Class | 26,660 | 93,747 | ||||||
C-Class | 33,677 | 50,022 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 36,520 | — | ||||||
B-Class | 5,885 | — | ||||||
Shares redeemed | ||||||||
A-Class | (959,519 | ) | (4,379,932 | ) | ||||
B-Class | (151,508 | ) | (640,990 | ) | ||||
C-Class | (60,372 | ) | (135,076 | ) | ||||
Net decrease in shares | (461,805 | ) | (2,945,351 | ) | ||||
34 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Global Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.52 | $ | 9.97 | $ | 10.35 | $ | 20.69 | $ | 19.65 | $ | 17.47 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | (0.07 | ) | 0.02 | 0.05 | 0.05 | 0.06 | (0.03 | ) | ||||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.54 | 0.53 | (0.35 | ) | (3.63 | ) | 3.60 | 2.21 | ||||||||||||||||
Total from investment operations | 1.47 | 0.55 | (0.30 | ) | (3.58 | ) | 3.66 | 2.18 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.06 | ) | — | (0.02 | ) | (0.04 | ) | — | — | |||||||||||||||
Net realized gains | — | — | — | (6.72 | ) | (2.62 | ) | — | ||||||||||||||||
Return of capital | — | — | (0.06 | ) | — | — | — | |||||||||||||||||
Total distributions | (0.06 | ) | — | (0.08 | ) | (6.76 | ) | (2.62 | ) | — | ||||||||||||||
Net asset value, end of period | $ | 11.93 | $ | 10.52 | $ | 9.97 | $ | 10.35 | $ | 20.69 | $ | 19.65 | ||||||||||||
Total Returnc | 14.08 | % | 5.52 | % | (2.71 | %) | (25.16 | %) | 20.07 | % | 12.48 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 84,903 | $ | 78,201 | $ | 97,205 | $ | 88,782 | $ | 145,158 | $ | 119,176 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.29 | %) | 0.24 | % | 0.63 | % | 0.33 | % | 0.29 | % | (0.17 | %) | ||||||||||||
Total expenses | 1.99 | % | 1.86 | % | 1.89 | % | 1.73 | % | 1.69 | % | 1.75 | % | ||||||||||||
Portfolio turnover rate | 120 | % | 288 | % | 368 | % | 280 | % | 162 | % | 28 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011a,d | 2010d | 2009d | 2008d | 2007d | 2006d | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.19 | $ | 8.69 | $ | 9.05 | $ | 18.96 | $ | 18.17 | $ | 16.12 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | (0.05 | ) | 0.04 | 0.07 | 0.07 | 0.09 | 0.02 | |||||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.34 | 0.46 | (0.32 | ) | (3.17 | ) | 3.32 | 2.03 | ||||||||||||||||
Total from investment operations | 1.29 | 0.50 | (0.25 | ) | (3.10 | ) | 3.41 | 2.05 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.09 | ) | — | (0.04 | ) | (0.09 | ) | — | — | |||||||||||||||
Net realized gains | — | — | — | (6.72 | ) | (2.62 | ) | — | ||||||||||||||||
Return of capital | — | — | (0.07 | ) | — | — | — | |||||||||||||||||
Total distributions | (0.09 | ) | — | (0.11 | ) | (6.81 | ) | (2.62 | ) | — | ||||||||||||||
Net asset value, end of period | $ | 10.39 | $ | 9.19 | $ | 8.69 | $ | 9.05 | $ | 18.96 | $ | 18.17 | ||||||||||||
Total Returnc | 14.16 | % | 5.75 | % | (2.45 | %) | (24.91 | %) | 20.36 | % | 12.72 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,419 | $ | 6,769 | $ | 11,155 | $ | 15,303 | $ | 29,659 | $ | 27,494 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (1.04 | %) | 0.45 | % | 0.90 | % | 0.55 | % | 0.50 | % | 0.11 | % | ||||||||||||
Total expenses | 1.74 | % | 1.61 | % | 1.65 | % | 1.48 | % | 1.44 | % | 1.50 | % | ||||||||||||
Portfolio turnover rate | 120 | % | 288 | % | 368 | % | 280 | % | 162 | % | 28 | % |
Selected data for each share of capital stock outstanding throughout each period
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 35 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Global Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.06 | $ | 8.66 | $ | 9.04 | $ | 19.00 | $ | 18.37 | $ | 16.46 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.10 | ) | (0.04 | ) | (0.01 | ) | (0.05 | ) | (0.09 | ) | (0.15 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.33 | 0.44 | (0.31 | ) | (3.18 | ) | 3.34 | 2.06 | ||||||||||||||||
Total from investment operations | 1.23 | 0.40 | (0.32 | ) | (3.23 | ) | 3.25 | 1.91 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (6.73 | ) | (2.62 | ) | — | ||||||||||||||||
Return of capital | — | — | (0.06 | ) | — | — | — | |||||||||||||||||
Total distributions | — | — | (0.06 | ) | (6.73 | ) | (2.62 | ) | — | |||||||||||||||
Net asset value, end of period | $ | 10.29 | $ | 9.06 | $ | 8.66 | $ | 9.04 | $ | 19.00 | $ | 18.37 | ||||||||||||
Total Returnc | 13.58 | % | 4.62 | % | (3.39 | %) | (25.69 | %) | 19.14 | % | 11.60 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,602 | $ | 4,295 | $ | 4,838 | $ | 7,866 | $ | 12,449 | $ | 10,361 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.03 | %) | (0.50 | %) | (0.11 | %) | (0.44 | %) | (0.48 | %) | (0.87 | %) | ||||||||||||
Total expenses | 2.74 | % | 2.62 | % | 2.65 | % | 2.49 | % | 2.44 | % | 2.51 | % | ||||||||||||
Portfolio turnover rate | 120 | % | 288 | % | 368 | % | 280 | %e | 162 | %e | 28 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Effective August 25, 2005, B-Class shares ceased charging 12b-1 fees in accordance with FINRA sales cap regulations. Per share information reflects this change. This fee will be reinstated when sales exceed the sales cap limit. | |
e | Significant variation in the portfolio turnover rate is due to the re-alignment of the Fund’s portfolio following the appointment of SGI as sub-advisor. |
36 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211909.gif)
$10,000 Since Inception
This chart assumes a $10,000 investment in shares of Global Institutional Fund on July 11, 2008 (date of inception), reflects the fees and expenses of the Fund and assumes all dividends are reinvested. The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The MSCI World Index is an unmanaged capitalization weighted index that is designed to measure global developed market equity performance.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
SINCE | ||||||||
INCEPTION | ||||||||
1 YEAR | (07/11/08) | |||||||
Global Institutional Fund | 14.64 | % | 1.73 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Financials | 17.1 | % | ||
Consumer Discretionary | 16.0 | % | ||
Health Care | 11.7 | % | ||
Information Technology | 11.3 | % | ||
Materials | 10.3 | % | ||
Energy | 6.9 | % | ||
Industrials | 7.9 | % | ||
Utilities | 3.8 | % | ||
Consumer Staples | 2.3 | % | ||
Telecommunication Services | 2.2 | % | ||
Short Term Investments | 10.9 | % | ||
Liabilities, Less Cash & Other Assets | (0.4 | %) | ||
Total Net Assets | 100.0 | % | ||
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 37
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Global Institutional Fund |
SHARES | VALUE | |||||||
COMMON STOCKS† - 89.5% | ||||||||
Financials - 17.1% | ||||||||
JPMorgan Chase & Co. | 2,650 | $ | 122,165 | |||||
BNP Paribas | 1,662 | 121,573 | ||||||
Credit Suisse Group AG | 2,794 | 118,739 | ||||||
Julius Baer Group Ltd. | 2,476 | 107,462 | ||||||
Sony Financial Holdings, Inc. | 4,600 | 91,243 | ||||||
RenaissanceRe Holdings Ltd. | 499 | 34,426 | ||||||
Aspen Insurance Holdings Ltd. | 1,232 | 33,954 | ||||||
Everest Re Group Ltd. | 361 | 31,833 | ||||||
Reinsurance Group of America, Inc. — Class A | 500 | 31,390 | ||||||
Bank of America Corp. | 2,052 | 27,353 | ||||||
Validus Holdings Ltd. | 800 | 26,664 | ||||||
PartnerRe Ltd. | 318 | 25,198 | ||||||
Total Financials | 772,000 | |||||||
Consumer Discretionary - 16.0% | ||||||||
Valeo S.A. | 2,136 | 124,594 | ||||||
Time Warner Cable, Inc. — Class A | 1,693 | 120,779 | ||||||
Cie Financiere Richemont S.A. | 1,818 | 105,014 | ||||||
Kabel Deutschland Holding AG* | 1,736 | 92,022 | ||||||
Kingfisher plc | 21,940 | 86,549 | ||||||
Pioneer Corp. | 20,800 | 86,516 | ||||||
Apollo Group, Inc. — Class A* | 807 | 33,660 | ||||||
Tractor Supply Co. | 488 | 29,212 | ||||||
Volkswagen AG | 150 | 23,024 | ||||||
ITT Educational Services, Inc.* | 300 | 21,645 | ||||||
Total Consumer Discretionary | 723,015 | |||||||
Health Care - 11.7% | ||||||||
Express Scripts, Inc. — Class A* | 2,957 | 164,439 | ||||||
Fresenius SE & Company KGaA | 876 | 81,038 | ||||||
Cephalon, Inc.* | 465 | 35,238 | ||||||
Abbott Laboratories | 681 | 33,403 | ||||||
Eli Lilly & Co. | 949 | 33,376 | ||||||
Bristol-Myers Squibb Co. | 1,253 | 33,117 | ||||||
Impax Laboratories, Inc.* | 1,200 | 30,540 | ||||||
CR Bard, Inc. | 300 | 29,793 | ||||||
Endo Pharmaceuticals Holdings, Inc.* | 779 | 29,726 | ||||||
Magellan Health Services, Inc.* | 533 | 26,160 | ||||||
Merck & Company, Inc. | 667 | 22,018 | ||||||
Miraca Holdings, Inc. | 246 | 9,419 | ||||||
Total Health Care | 528,267 | |||||||
Information Technology - 11.3% | ||||||||
Apple, Inc.* | 452 | 157,499 | ||||||
Hitachi Ltd. | 21,800 | 113,475 | ||||||
Ancestry.com, Inc.* | 2,502 | 88,696 | ||||||
Xerox Corp. | 8,000 | 85,200 | ||||||
CoreLogic, Inc. | 1,815 | 33,577 | ||||||
Lender Processing Services, Inc. | 1,035 | 33,317 | ||||||
Total Information Technology | 511,764 | |||||||
Materials - 10.3% | ||||||||
Osisko Mining Corp.*,1 | 9,200 | 132,472 | ||||||
Koninklijke DSM N.V. | 1,853 | 113,864 | ||||||
Exxaro Resources Ltd. | 4,123 | 100,858 | ||||||
Mongolian Mining Corp.* | 50,500 | 64,533 | ||||||
Barrick Gold Corp. | 647 | 33,628 | ||||||
Newmont Mining Co. | 400 | 21,832 | ||||||
Total Materials | 467,187 | |||||||
Industrials - 7.9% | ||||||||
Amada Company Ltd. | 10,000 | 83,429 | ||||||
Neptune Orient Lines Ltd. | 49,647 | 76,410 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 41,000 | 58,873 | ||||||
GT Solar International, Inc.* | 2,800 | 29,848 | ||||||
Alaska Air Group, Inc.* | 455 | 28,856 | ||||||
Delta Air Lines, Inc.* | 2,800 | 27,440 | ||||||
US Airways Group, Inc.* | 2,975 | 25,912 | ||||||
United Continental Holdings, Inc.* | 1,100 | 25,289 | ||||||
Total Industrials | 356,057 | |||||||
Energy - 6.9% | ||||||||
El Paso Corp. | 6,200 | 111,600 | ||||||
CNOOC Ltd. | 41,601 | 104,825 | ||||||
Forest Oil Corp.* | 2,541 | 96,126 | ||||||
Total Energy | 312,551 | |||||||
Utilities - 3.8% | ||||||||
Veolia Environnement S.A. | 2,706 | 84,146 | ||||||
Tohoku Electric Power Company, Inc. | 1,930 | 32,598 | ||||||
NextEra Energy, Inc. | 527 | 29,048 | ||||||
Kansai Electric Power Company, Inc. | 1,200 | 26,125 | ||||||
Total Utilities | 171,917 | |||||||
Consumer Staples - 2.3% | ||||||||
Pernod-Ricard S.A. | 1,111 | 103,770 | ||||||
Telecommunication Services - 2.2% | ||||||||
Vodafone Group plc | 23,922 | 67,735 | ||||||
Tele Norte Leste Participacoes S.A. ADR | 1,804 | 31,624 | ||||||
Total Telecommunication Services | 99,359 | |||||||
Total Common Stocks (Cost $3,563,539) | 4,045,887 | |||||||
SHORT TERM INVESTMENT†† - 10.9% | ||||||||
State Street General Account U.S. Government Fund | 492,787 | 492,787 | ||||||
Total Short Term Investment (Cost $492,787) | 492,787 | |||||||
Total Investments - 100.4% (Cost $4,056,326) | $ | 4,538,674 | ||||||
Liabilities, Less Cash & Other Assets - (0.4)% | (19,241 | ) | ||||||
Total Net Assets - 100.0% | $ | 4,519,433 | ||||||
38 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Global Institutional Fund |
INVESTMENT CONCENTRATION
At March 31, 2011, the investment diversification of the Fund was as follows:
% of Net | ||||||||
Country | Assets | Value | ||||||
United States | 46.7 | % | $ | 2,111,041 | ||||
Japan | 9.8 | 442,805 | ||||||
France | 9.6 | 434,083 | ||||||
Switzerland | 7.3 | 331,215 | ||||||
Germany | 4.4 | 196,084 | ||||||
Canada | 3.7 | 166,100 | ||||||
United Kingdom | 3.4 | 154,284 | ||||||
Bermuda | 3.4 | 152,075 | ||||||
Singapore | 3.0 | 135,283 | ||||||
Netherlands | 2.5 | 113,864 | ||||||
Hong Kong | 2.3 | 104,825 | ||||||
South Africa | 2.2 | 100,858 | ||||||
Cayman Islands | 1.4 | 64,533 | ||||||
Brazil | 0.7 | 31,624 | ||||||
Total Investments | 100.4 | % | $ | 4,538,674 | ||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
1 | Security is a PFIC (Passive Foreign Investment Company). | |
ADR — American Depositary Receipt | ||
plc — Public Limited Company |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 39 |
Table of Contents
Rydex|SGI Equity Fund
Global Institutional Fund
Global Institutional Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 4,538,674 | ||
Total investments | 4,538,674 | |||
Cash denominated in a foreign currency, at value** | 991 | |||
Receivables: | ||||
Securities sold | 364,803 | |||
Dividends | 5,198 | |||
Prepaid expenses | 10,178 | |||
Total assets | 4,919,844 | |||
Liabilities: | ||||
Payable for: | ||||
Securities purchased | 357,065 | |||
Management fees | 3,682 | |||
Custodian fees | 15,076 | |||
Transfer agent/maintenance fees | 1,858 | |||
Portfolio accounting fees | 1,769 | |||
Professional fees | 6,378 | |||
Directors’ fees | 384 | |||
Legal fees | 1,068 | |||
Pricing fees | 3,833 | |||
Direct shareholders expense | 7,619 | |||
Interest | 25 | |||
Corporate expenses | 1,654 | |||
Total liabilities | 400,411 | |||
Net assets | $ | 4,519,433 | ||
Net assets consist of: | ||||
Paid in capital | $ | 5,518,081 | ||
Accumulated net investment loss | (83,375 | ) | ||
Accumulated net realized loss on investments | (1,397,816 | ) | ||
Net unrealized appreciation in on investments | 482,543 | |||
Net assets | $ | 4,519,433 | ||
Net assets | $ | 4,519,433 | ||
Capital shares outstanding | 448,673 | |||
Net asset value per share | $ | 10.07 | ||
* Investments, at cost | $ | 4,056,326 | ||
** Cash denominated in a foreign currency, at cost | 383 |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends (net of foreign withholding tax of $1,120) | $ | 14,242 | ||
Total investment income | 14,242 | |||
Expenses: | ||||
Management fees | 20,884 | |||
Transfer agent/maintenance fees | 11,273 | |||
Portfolio accounting fees | 13,797 | |||
Directors’ fees* | 263 | |||
Custodian fees | 10,252 | |||
Registration fees | 7,295 | |||
Professional fees | 4,846 | |||
Pricing fees | 5,660 | |||
Miscellaneous | 4,585 | |||
Total expenses | 78,855 | |||
Expenses waived by Advisor | (57,970 | ) | ||
Net expenses | 20,885 | |||
Net investment loss | (6,643 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 425,451 | |||
Foreign currency transactions | (5,566 | ) | ||
Net realized gain | 419,885 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 135,766 | |||
Translation of assets and liabilities in foreign currencies | (118 | ) | ||
Net change in unrealized appreciation | 135,648 | |||
Net realized and unrealized gain | 555,533 | |||
Net increase in net assets resulting from operations | $ | 548,890 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
40 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Global Institutional Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income (loss) | $ | (6,643 | ) | $ | 48,456 | |||
Net realized gain on investments | 419,885 | 467,339 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 135,648 | (256,045 | ) | |||||
Net increase in net assets resulting from operations | 548,890 | 259,750 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | (54,383 | ) | (97,135 | ) | ||||
Total distributions to shareholders | (54,383 | ) | (97,135 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | 503,859 | 592,280 | ||||||
Distributions reinvested | 54,383 | 97,135 | ||||||
Cost of shares redeemed | (407,884 | ) | (1,887,824 | ) | ||||
Net increase (decrease) from capital share transactions | 150,358 | (1,198,409 | ) | |||||
Net increase (decrease) in net assets | 644,865 | (1,035,794 | ) | |||||
Net assets: | ||||||||
Beginning of period | 3,874,568 | 4,910,362 | ||||||
End of period | $ | 4,519,433 | $ | 3,874,568 | ||||
Accumulated net investment loss at end of period | $ | (83,375 | ) | $ | (22,349 | ) | ||
Capital share activity: | ||||||||
Shares sold | 50,837 | 69,226 | ||||||
Shares issued from reinvestment of distributions | 5,561 | 11,468 | ||||||
Shares redeemed | (41,673 | ) | (220,651 | ) | ||||
Net increase (decrease) in shares | 14,725 | (139,957 | ) | |||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 41 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Global Institutional Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Period Ended | |||||||||||||
March 31, | September 30, | September 30, | September 30, | |||||||||||||
2011a | 2010 | 2009 | 2008b | |||||||||||||
Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ | 8.93 | $ | 8.56 | $ | 8.67 | $ | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment income (loss)c | (0.02 | ) | 0.10 | 0.17 | 0.02 | |||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.29 | 0.46 | (0.25 | ) | (1.35 | ) | ||||||||||
Total from investment operations | 1.27 | 0.56 | (0.08 | ) | (1.33 | ) | ||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.13 | ) | (0.19 | ) | (0.03 | ) | — | |||||||||
Total distributions | (0.13 | ) | (0.19 | ) | (0.03 | ) | — | |||||||||
Net asset value, end of period | $ | 10.07 | $ | 8.93 | $ | 8.56 | $ | 8.67 | ||||||||
Total Returnd | 14.38 | % | 6.61 | % | (0.90 | )% | (13.30 | )% | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,519 | $ | 3,875 | $ | 4,910 | $ | 7,382 | ||||||||
Ratios to average net assets: | ||||||||||||||||
Net investment income (loss) | (0.32 | )% | 1.13 | % | 2.34 | % | 0.87 | % | ||||||||
Total expensese | 3.78 | % | 3.34 | % | 2.76 | % | 1.97 | % | ||||||||
Net expensesf | 1.00 | % | 1.00 | % | 1.15 | % | 1.15 | % | ||||||||
Portfolio turnover rate | 120 | % | 295 | % | 379 | % | 325 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Since commencement of operations: July 11, 2008 — Global Institutional Fund. | |
c | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
e | Total expense information reflects the expense ratios absent expense reductions by the Investment Manager, as applicable. | |
f | Net expense information reflects the expense ratios after voluntary expense waivers and reimbursements, as applicable. |
42 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211910.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Mid Cap Value Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 2500® Value Index is an unmanaged index that measures the performance of securities of small-to-mid cap U.S. companies with greater-than-average value orientation.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 21.69 | % | 6.33 | % | 11.92 | % | ||||||
A-Class Shares with sales charge | 14.68 | % | 5.08 | % | 11.26 | % | ||||||
B-Class Shares | 20.79 | % | 5.53 | % | 11.21 | % | ||||||
B-Class Shares with CDSC | 15.79 | % | 5.26 | % | 11.21 | % | ||||||
C-Class Shares | 20.76 | % | 5.53 | % | 11.06 | % | ||||||
C-Class Shares with CDSC | 19.76 | % | 5.53 | % | 11.06 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Industrials | 17.7 | % | ||
Financials | 15.4 | % | ||
Energy | 12.8 | % | ||
Consumer Discretionary | 11.9 | % | ||
Information Technology | 10.8 | % | ||
Utilities | 7.7 | % | ||
Materials | 7.5 | % | ||
Consumer Staples | 5.5 | % | ||
Health Care | 4.8 | % | ||
Exchange Traded Funds | 1.6 | % | ||
Warrants | 0.1 | % | ||
Convertible Bond | 0.7 | % | ||
Repurchase Agreement | 3.4 | % | ||
Cash & Other Assets, Less Liabilities | 0.1 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 43
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Mid Cap Value Fund |
Shares | Value | |||||||
COMMON STOCKS† - 94.2% | ||||||||
Industrials - 17.7% | ||||||||
GeoEye, Inc.* | 852,690 | $ | 35,454,850 | |||||
Covanta Holding Corp. | 1,739,150 | 29,704,682 | ||||||
General Cable Corp.*,1 | 590,900 | 25,585,970 | ||||||
Insituform Technologies, Inc. — Class A* | 910,700 | 24,361,225 | ||||||
Quanta Services, Inc.* | 1,067,600 | 23,946,268 | ||||||
FTI Consulting, Inc.* | 514,210 | 19,709,669 | ||||||
Orbital Sciences Corp.* | 1,022,080 | 19,337,754 | ||||||
Navigant Consulting, Inc.* | 1,757,030 | 17,552,730 | ||||||
Babcock & Wilcox Co.* | 470,650 | 15,710,297 | ||||||
URS Corp.* | 338,300 | 15,578,715 | ||||||
Trex Company, Inc.* | 379,900 | 12,392,338 | ||||||
Insperity, Inc. | 354,685 | 10,775,330 | ||||||
Force Protection, Inc.* | 2,043,525 | 10,013,273 | ||||||
Saia, Inc.* | 551,770 | 9,043,510 | ||||||
ICF International, Inc.* | 426,700 | 8,764,418 | ||||||
United Stationers, Inc. | 80,129 | 5,693,165 | ||||||
UQM Technologies, Inc.* | 226,328 | 674,457 | ||||||
Thermoenergy Corp.5 | 2,701,839 | 594,405 | ||||||
Total Industrials | 284,893,056 | |||||||
Financials - 15.4% | ||||||||
Hanover Insurance Group, Inc. | 836,370 | 37,845,742 | ||||||
American Financial Group, Inc.1 | 886,500 | 31,045,230 | ||||||
W.R. Berkley Corp. | 938,010 | 30,213,302 | ||||||
Alleghany Corp.* | 61,220 | 20,262,728 | ||||||
Reinsurance Group of America, Inc. — Class A | 320,198 | 20,102,030 | ||||||
Fifth Street Finance Corp. | 1,263,932 | 16,873,492 | ||||||
RenaissanceRe Holdings Ltd. | 177,000 | 12,211,230 | ||||||
Transatlantic Holdings, Inc. | 246,700 | 12,006,889 | ||||||
Lexington Realty Trust | 1,207,800 | 11,292,930 | ||||||
Old National Bancorp | 1,015,822 | 10,889,612 | ||||||
Associated Banc-Corp.1 | 731,277 | 10,859,463 | ||||||
Employers Holdings, Inc. | 486,300 | 10,046,958 | ||||||
First Horizon National Corp. | 674,221 | 7,558,015 | ||||||
Investors Real Estate Trust | 674,800 | 6,410,600 | ||||||
Redwood Trust, Inc. | 285,027 | 4,432,170 | ||||||
Wilmington Trust Corp. | 881,000 | 3,982,120 | ||||||
First Marblehead Corp.* | 1,117,473 | 2,458,441 | ||||||
Total Financials | 248,490,952 | |||||||
Energy - 12.9% | ||||||||
Global Industries Ltd.* | 4,671,590 | 45,734,866 | ||||||
SandRidge Energy, Inc.* | 2,394,530 | 30,649,984 | ||||||
Gulfport Energy Corp.* | 842,947 | 30,472,534 | ||||||
Plains Exploration & Production Co.* | 686,740 | 24,880,590 | ||||||
Southern Union Co. | 866,360 | 24,795,223 | ||||||
McDermott International, Inc.* | 714,400 | 18,138,616 | ||||||
Goodrich Petroleum Corp.* | 729,069 | 16,199,913 | ||||||
USEC, Inc.* | 2,713,730 | 11,940,412 | ||||||
Resolute Energy Corp.* | 249,938 | 4,533,876 | ||||||
Total Energy | 207,346,014 | |||||||
Consumer Discretionary - 11.9% | ||||||||
Cabela’s, Inc.* | 1,565,693 | 39,157,982 | ||||||
Chico’s FAS, Inc. | 1,968,100 | 29,324,690 | ||||||
Maidenform Brands, Inc.* | 655,900 | 18,739,063 | ||||||
Penn National Gaming, Inc.* | 483,700 | 17,925,922 | ||||||
Brown Shoe Company, Inc. | 1,369,435 | 16,734,496 | ||||||
Apollo Group, Inc. — Class A* | 356,000 | 14,848,760 | ||||||
Scholastic Corp. | 386,600 | 10,453,664 | ||||||
Jack in the Box, Inc.* | 433,000 | 9,820,440 | ||||||
Hanesbrands, Inc.* | 333,580 | 9,020,003 | ||||||
DeVry, Inc. | 160,580 | 8,843,141 | ||||||
Fortune Brands, Inc. | 121,500 | 7,519,635 | ||||||
Smith & Wesson Holding Corp.* | 1,990,310 | 7,065,600 | ||||||
Fred’s, Inc. — Class A | 242,534 | 3,230,553 | ||||||
Total Consumer Discretionary | 192,683,949 | |||||||
Information Technology - 10.8% | ||||||||
Computer Sciences Corp. | 959,120 | 46,737,918 | ||||||
IXYS Corp.*,5 | 2,400,000 | 32,232,000 | ||||||
Maxwell Technologies, Inc.*,5 | 1,504,700 | 25,986,169 | ||||||
Power-One, Inc.*,1 | 2,666,000 | 23,327,500 | ||||||
Satyam Computer Services Ltd. ADR* | 4,341,099 | 13,110,119 | ||||||
Euronet Worldwide, Inc.* | 629,800 | 12,174,034 | ||||||
Symmetricom, Inc.* | 1,908,270 | 11,697,695 | ||||||
Ultratech, Inc.* | 316,200 | 9,296,280 | ||||||
Total Information Technology | 174,561,715 | |||||||
Utilities - 7.7% | ||||||||
Great Plains Energy, Inc. | 953,117 | 19,081,402 | ||||||
NorthWestern Corp. | 608,100 | 18,425,430 | ||||||
Allete, Inc. | 424,757 | 16,552,780 | ||||||
American Water Works Company, Inc. | 527,740 | 14,803,107 | ||||||
Black Hills Corp. | 397,000 | 13,275,680 | ||||||
UGI Corp. | 386,242 | 12,707,362 | ||||||
Pepco Holdings, Inc. | 408,400 | 7,616,660 | ||||||
Westar Energy, Inc. | 287,270 | 7,589,674 | ||||||
Atmos Energy Corp. | 220,820 | 7,529,962 | ||||||
MDU Resources Group, Inc. | 305,768 | 7,023,491 | ||||||
Total Utilities | 124,605,548 | |||||||
Materials - 7.5% | ||||||||
Bemis Company, Inc. | 1,035,180 | 33,964,256 | ||||||
Owens-Illinois, Inc.* | 768,300 | 23,194,977 | ||||||
Louisiana-Pacific Corp.* | 2,079,300 | 21,832,650 | ||||||
Sonoco Products Co. | 527,200 | 19,100,456 |
44 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Mid Cap Value Fund |
Shares | Value | |||||||
HB Fuller Co. | 486,504 | $ | 10,450,106 | |||||
Zoltek Companies, Inc.* | 519,596 | 6,978,174 | ||||||
Landec Corp.* | 911,716 | 5,926,154 | ||||||
Total Materials | 121,446,773 | |||||||
Consumer Staples - 5.5% | ||||||||
JM Smucker Co. | 395,300 | 28,220,467 | ||||||
Hormel Foods Corp. | 967,880 | 26,945,779 | ||||||
Ralcorp Holdings, Inc.* | 339,300 | 23,218,299 | ||||||
Bunge Ltd. | 135,500 | 9,800,715 | ||||||
Total Consumer Staples | 88,185,260 | |||||||
Health Care - 4.8% | ||||||||
RehabCare Group, Inc.* | 688,400 | 25,381,308 | ||||||
Mednax, Inc.* | 347,641 | 23,156,367 | ||||||
Hologic, Inc.* | 737,801 | 16,379,182 | ||||||
Forest Laboratories, Inc.* | 390,780 | 12,622,194 | ||||||
Total Health Care | 77,539,051 | |||||||
Total Common Stocks (Cost $1,156,665,731) | 1,519,752,318 | |||||||
CONVERTIBLE PREFERRED STOCK††- 0.0% | ||||||||
Thermoenergy Corp.*,2,3,5 | 858,334 | 551,394 | ||||||
Total Convertible Preferred Stock (Cost $819,654) | 551,394 | |||||||
WARRANTS†† - 0.1% | ||||||||
Industrials - 0.1% | ||||||||
Thermoenergy Corp. $0.30, 07/31/15 2,5 | 13,733,344 | 708,641 | ||||||
Energy - 0.0% | ||||||||
Nova Biosource Fuels, Inc.2 $2.40, 07/05/11 | 677,450 | 1,761 | ||||||
Total Warrants (Cost $1,940,120) | 710,402 | |||||||
EXCHANGE TRADED FUNDS† - 1.6% | ||||||||
iShares Russell Midcap Value Index Fund | 300,000 | 14,448,000 | ||||||
iShares Russell 2000 Value Index Fund | 160,860 | 12,125,627 | ||||||
Total Exchange Traded Funds (Cost $19,887,647) | 26,573,627 | |||||||
Face | ||||||||
Amount | Value | |||||||
CONVERTIBLE BOND†† - 0.7% | ||||||||
Energy - 0.7% | ||||||||
USEC, Inc. | ||||||||
3.00% due 10/01/14 | $ | 13,600,000 | $ | 10,744,000 | ||||
Total Convertible Bond (Cost $12,444,847) | 10,744,000 | |||||||
REPURCHASE AGREEMENT††, 4 - 3.4% | ||||||||
UMB Financial Corp. issued 03/31/11 at 0.03% due 04/01/11 | 55,424,000 | 55,424,000 | ||||||
Total Repurchase Agreement (Cost $55,424,000) | 55,424,000 | |||||||
Total Long Investments - 100.0% (Cost $1,247,181,999) | $ | 1,613,755,741 | ||||||
Contracts | ||||||||
OPTIONS WRITTEN† - (0.1)% | ||||||||
Call Options on: | ||||||||
Power-One, Inc. Expiring April 2011 with strike price of $13.00 | 3,782 | (18,910 | ) | |||||
General Cable Corp. Expiring May 2011 with strike price of $50.00 | 2,000 | (50,000 | ) | |||||
Associated Banc-Corp. Expiring June 2011 with strike price of $15.00 | 2,385 | (190,800 | ) | |||||
Total Call Options | (259,710 | ) | ||||||
Put Options on: | ||||||||
Arch Coal, Inc. Expiring July 2011 with strike price of $30.00 | 2,535 | (245,895 | ) | |||||
Comzputer Sciences Corp. Expiring June 2011 with strike price of $50.00 | 1,500 | (495,000 | ) | |||||
Total Put Options | (740,895 | ) | ||||||
Total Options Written (Premiums received $1,728,328) | $ | (1,000,605 | ) | |||||
Cash & Other Assets, Less Liabilities - 0.1% | 987,434 | |||||||
Total Net Assets - 100.0% | $ | 1,613,742,570 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
1 | All or a portion of this security is pledged as collateral for open written option contracts at March 31, 2011. | |
2 | All or a portion of this security was fair valued by the Valuation Committee based on non-observable market inputs at March 31, 2011. The total market value of fair valued securities amounts to $1,261,796 (cost $3,300,349), or 0.08% of total net assets. | |
3 | PIPE (Private Investment in Public Equity) — Stock issued by a company in the secondary market as a means of raising capital more quickly and less expensively than through registration of a secondary public offering. | |
4 | Repurchase Agreement — See Note 5. | |
5 | Investment in affiliated issuer. See Note 8 in the Notes to Financial Statements. | |
ADR—American Depositary Receipt |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 45 |
Table of Contents
Rydex|SGI Equity Fund
Mid Cap Value Fund
Mid Cap Value Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments in unaffiliated issuers, at value* | $ | 1,497,664,727 | ||
Investments in affiliated issuers, at value** | 60,667,014 | |||
Repurchase agreements, at value | 55,424,000 | |||
Total investments | 1,613,755,741 | |||
Cash | 242 | |||
Receivables: | ||||
Securities sold | 1,446,730 | |||
Fund shares sold | 2,822,122 | |||
Dividends | 1,324,267 | |||
Interest | 204,046 | |||
Prepaid expenses | 113,209 | |||
Total assets | 1,619,666,357 | |||
Liabilities: | ||||
Written options, at value*** | 1,000,605 | |||
Payable for: | ||||
Securities purchased | 1,221,588 | |||
Fund shares redeemed | 1,129,951 | |||
Management fees | 1,033,658 | |||
Custodian fees | 13,363 | |||
Transfer agent/maintenance fees | 85,239 | |||
Distribution and service fees | 510,455 | |||
Portfolio accounting fees | 125,549 | |||
Professional fees | 32,021 | |||
Directors’ fees | 53,093 | |||
Legal fees | 24,340 | |||
Pricing fees | 3,155 | |||
Direct shareholders expense | 170,617 | |||
Corporate expenses | 46,559 | |||
Other | 473,594 | |||
Total liabilities | 5,923,787 | |||
Net assets | $ | 1,613,742,570 | ||
Net assets consist of: | ||||
Paid in capital | $ | 1,294,472,450 | ||
Accumulated net investment loss | (1,591,608 | ) | ||
Accumulated net realized loss on investments | (46,439,735 | ) | ||
Net unrealized appreciation in on investments | 367,301,463 | |||
Net assets | $ | 1,613,742,570 | ||
A-Class: | ||||
Net assets | $ | 1,322,354,046 | ||
Capital shares outstanding | 37,432,627 | |||
Net asset value per share | $ | 35.33 | ||
Maximum offering price per share**** | $ | 37.09 | ||
B-Class: | ||||
Net assets | $ | 43,620,724 | ||
Capital shares outstanding | 1,451,916 | |||
Net asset value per share | $ | 30.04 | ||
C-Class: | ||||
Net assets | $ | 247,767,800 | ||
Capital shares outstanding | 8,004,272 | |||
Net asset value per share | $ | 30.95 | ||
* Investments in unaffiliated issuers, at cost | $ | 1,148,199,521 | ||
** Investments in affiliated issuers, at cost | 43,558,478 | |||
Repurchase agreements, at cost | 55,424,000 | |||
Total cost | $ | 1,247,181,999 | ||
*** Premiums received for written options | $ | 1,728,328 |
**** | Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75)%. |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 8,620,593 | ||
Interest | 358,446 | |||
Total investment income | 8,979,039 | |||
Expenses: | ||||
Management fees | 5,645,260 | |||
Transfer agent/maintenance fees | 941,735 | |||
Distribution and service fees: | ||||
A-Class | 1,469,989 | |||
B-Class | 215,222 | |||
C-Class | 1,099,416 | |||
Portfolio accounting fees | 683,477 | |||
Directors’ fees* | 52,515 | |||
Miscellaneous | 323,739 | |||
Total expenses | 10,431,353 | |||
Net investment loss | (1,452,314 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 40,435,013 | |||
Options written | 1,362,151 | |||
Net realized gain | 41,797,164 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 219,401,050 | |||
Options written | 89,797 | |||
Net change in unrealized appreciation | 219,490,847 | |||
Net realized and unrealized gain | 261,288,011 | |||
Net increase in net assets resulting from operations | $ | 259,835,697 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
46 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Mid Cap Value Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income (loss) | $ | (1,452,314 | ) | $ | 2,637,672 | |||
Net realized gain (loss) on investments | 41,797,164 | (2,816,034 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments | 219,490,847 | 120,886,412 | ||||||
Net increase in net assets resulting from operations | 259,835,697 | 120,708,050 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | ||||||||
A-Class | (2,703,671 | ) | (1,178,918 | ) | ||||
Total distributions to shareholders | (2,703,671 | ) | (1,178,918 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 189,613,159 | 525,044,189 | ||||||
B-Class | 957,240 | 2,160,769 | ||||||
C-Class | 30,099,941 | 60,822,739 | ||||||
Distributions reinvested | ||||||||
A-Class | 2,286,331 | 1,064,396 | ||||||
Cost of shares redeemed | ||||||||
A-Class | (136,690,777 | ) | (349,397,686 | ) | ||||
B-Class | (7,278,726 | ) | (23,155,998 | ) | ||||
C-Class | (15,338,954 | ) | (22,330,336 | ) | ||||
Net increase from capital share transactions | 63,648,214 | 194,208,073 | ||||||
Net increase in net assets | 320,780,240 | 313,737,205 | ||||||
Net assets: | ||||||||
Beginning of period | 1,292,962,330 | 979,225,125 | ||||||
End of period | $ | 1,613,742,570 | $ | 1,292,962,330 | ||||
Accumulated/(Undistributed) net investment income/(loss) at end of period | $ | (1,591,608 | ) | $ | 2,564,377 | |||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class | 5,832,195 | 18,798,275 | ||||||
B-Class | 34,443 | 92,317 | ||||||
C-Class | 1,061,081 | 2,460,598 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 71,137 | 38,861 | ||||||
Shares redeemed | ||||||||
A-Class | (4,223,216 | ) | (12,495,803 | ) | ||||
B-Class | (263,878 | ) | (966,968 | ) | ||||
C-Class | (536,613 | ) | (908,686 | ) | ||||
Net increase in shares | 1,975,149 | 7,018,594 | ||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 47 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Mid Cap Value Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 29.55 | $ | 26.58 | $ | 28.41 | $ | 40.79 | $ | 38.27 | $ | 36.34 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | (0.01 | ) | 0.11 | 0.08 | 0.25 | 0.25 | 0.04 | |||||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 5.87 | 2.90 | 0.82 | (4.77 | ) | 4.59 | 3.96 | |||||||||||||||||
Total from investment operations | 5.86 | 3.01 | 0.90 | (4.52 | ) | 4.84 | 4.00 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.08 | ) | (0.04 | ) | (0.14 | ) | (0.14 | ) | (0.23 | ) | — | |||||||||||||
Net realized gains | — | — | (2.59 | ) | (7.72 | ) | (2.09 | ) | (2.07 | ) | ||||||||||||||
Total distributions | (0.08 | ) | (0.04 | ) | (2.73 | ) | (7.86 | ) | (2.32 | ) | (2.07 | ) | ||||||||||||
Net asset value, end of period | $ | 35.33 | $ | 29.55 | $ | 26.58 | $ | 28.41 | $ | 40.79 | $ | 38.27 | ||||||||||||
Total Returnc | 19.84 | % | 11.32 | % | 6.90 | % | (12.48 | )% | 12.96 | % | 11.44 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,322,354 | $ | 1,056,655 | $ | 781,883 | $ | 656,044 | $ | 687,484 | $ | 596,074 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.06 | )% | 0.38 | % | 0.40 | % | 0.79 | % | 0.61 | % | 0.10 | % | ||||||||||||
Total expenses | 1.31 | % | 1.37 | % | 1.48 | % | 1.37 | % | 1.32 | % | 1.36 | % | ||||||||||||
Portfolio turnover rate | 12 | % | 23 | % | 31 | % | 68 | % | 44 | % | 33 | % | ||||||||||||
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.17 | $ | 22.78 | $ | 24.83 | $ | 36.78 | $ | 34.76 | $ | 33.43 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.11 | ) | (0.09 | ) | (0.06 | ) | — | d | (0.04 | ) | (0.23 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 4.98 | 2.48 | 0.60 | (4.23 | ) | 4.15 | 3.63 | |||||||||||||||||
Total from investment operations | 4.87 | 2.39 | 0.54 | (4.23 | ) | 4.11 | 3.40 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (2.59 | ) | (7.72 | ) | (2.09 | ) | (2.07 | ) | ||||||||||||||
Total distributions | — | — | (2.59 | ) | (7.72 | ) | (2.09 | ) | (2.07 | ) | ||||||||||||||
Net asset value, end of period | $ | 30.04 | $ | 25.17 | $ | 22.78 | $ | 24.83 | $ | 36.78 | $ | 34.76 | ||||||||||||
Total Returnc | 19.35 | % | 10.49 | % | 6.17 | % | (13.14 | )% | 12.10 | % | 10.60 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 43,621 | $ | 42,321 | $ | 58,221 | $ | 66,641 | $ | 106,179 | $ | 108,784 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.83 | )% | (0.40 | )% | (0.34 | )% | (0.01 | )% | (0.10 | )% | (0.68 | )% | ||||||||||||
Total expenses | 2.06 | % | 2.12 | % | 2.23 | % | 2.12 | % | 2.07 | % | 2.11 | % | ||||||||||||
Portfolio turnover rate | 12 | % | 23 | % | 31 | % | 68 | % | 44 | % | 33 | % |
48 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Mid Cap Value Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.93 | $ | 23.47 | $ | 25.49 | $ | 37.54 | $ | 35.43 | $ | 34.03 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.11 | ) | (0.09 | ) | (0.07 | ) | — | d | (0.05 | ) | (0.22 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 5.13 | 2.55 | 0.64 | (4.33 | ) | 4.25 | 3.69 | |||||||||||||||||
Total from investment operations | 5.02 | 2.46 | 0.57 | (4.33 | ) | 4.20 | 3.47 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (2.59 | ) | (7.72 | ) | (2.09 | ) | (2.07 | ) | ||||||||||||||
Total distributions | — | — | (2.59 | ) | (7.72 | ) | (2.09 | ) | (2.07 | ) | ||||||||||||||
Net asset value, end of period | $ | 30.95 | $ | 25.93 | $ | 23.47 | $ | 25.49 | $ | 37.54 | $ | 35.43 | ||||||||||||
Total Returnc | 19.36 | % | 10.48 | % | 6.13 | % | (13.15 | )% | 12.13 | % | 10.62 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 247,768 | $ | 193,986 | $ | 139,121 | $ | 113,192 | $ | 176,746 | $ | 152,579 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.81 | )% | (0.37 | )% | (0.35 | )% | (0.01 | )% | (0.12 | )% | (0.65 | )% | ||||||||||||
Total expenses | 2.06 | % | 2.12 | % | 2.22 | % | 2.12 | % | 2.07 | % | 2.11 | % | ||||||||||||
Portfolio turnover rate | 12 | % | 23 | % | 31 | % | 68 | % | 44 | % | 33 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Net investment income is less than $0.01 per share. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 49 |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211911.gif)
$10,000 Since Inception
This chart assumes a $10,000 investment in shares of Mid Cap Value Institutional Fund on July 11, 2008 (date of Inception) and assumes all dividends are reinvested. The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 2500® Value Index is an unmanaged index that measures the performance of securities of small-to-mid cap U.S. companies with greater-than-average value orientation.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
SINCE | ||||||||
INCEPTION | ||||||||
1 YEAR | (07/11/08) | |||||||
Mid Cap Value Institutional Fund | 21.93 | % | 16.30 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Industrials | 17.2 | % | ||
Financials | 14.9 | % | ||
Energy | 12.7 | % | ||
Consumer Discretionary | 11.7 | % | ||
Information Technology | 10.3 | % | ||
Utilities | 7.3 | % | ||
Materials | 7.1 | % | ||
Consumer Staples | 4.9 | % | ||
Health Care | 4.3 | % | ||
Exchange Traded Funds | 5.3 | % | ||
Warrants | 0.1 | % | ||
Convertible Preferred Stock | 0.1 | % | ||
Convertible Bond | 0.7 | % | ||
Repurchase Agreement | 4.1 | % | ||
Liabilities, Less Cash & Other Assets | (0.7 | %) | ||
Total Net Assets | 100.0 | % | ||
50 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Mid Cap Value Institutional Fund |
Shares | Value | |||||||
COMMON STOCKS†- 90.4% | ||||||||
Industrials - 17.2% | ||||||||
GeoEye, Inc.* | 349,700 | $ | 14,540,526 | |||||
Covanta Holding Corp. | 740,040 | 12,639,883 | ||||||
Insituform Technologies, Inc. — Class A* | 378,340 | 10,120,595 | ||||||
General Cable Corp.*,1 | 233,400 | 10,106,220 | ||||||
Quanta Services, Inc.* | 435,200 | 9,761,536 | ||||||
FTI Consulting, Inc.* | 206,700 | 7,922,811 | ||||||
Orbital Sciences Corp.* | 392,888 | 7,433,441 | ||||||
Navigant Consulting, Inc.* | 684,870 | 6,841,851 | ||||||
Babcock & Wilcox Co.* | 191,600 | 6,395,608 | ||||||
URS Corp.* | 121,700 | 5,604,285 | ||||||
Trex Company, Inc.* | 151,200 | 4,932,144 | ||||||
Insperity, Inc. | 144,132 | 4,378,730 | ||||||
Force Protection, Inc.* | 872,103 | 4,273,305 | ||||||
ICF International, Inc.* | 174,910 | 3,592,652 | ||||||
Saia, Inc.* | 214,470 | 3,515,163 | ||||||
United Stationers, Inc. | 35,278 | �� | 2,506,502 | |||||
UQM Technologies, Inc.* | 91,078 | 271,413 | ||||||
Total Industrials | 114,836,665 | |||||||
Financials - 14.9% | ||||||||
Hanover Insurance Group, Inc. | 337,250 | 15,260,563 | ||||||
American Financial Group, Inc.1 | 353,570 | 12,382,021 | ||||||
W.R. Berkley Corp. | 373,010 | 12,014,652 | ||||||
Reinsurance Group of America, Inc. — Class A | 128,352 | 8,057,939 | ||||||
Alleghany Corp.* | 22,619 | 7,486,271 | ||||||
Fifth Street Finance Corp. | 502,507 | 6,708,468 | ||||||
RenaissanceRe Holdings Ltd. | 73,300 | 5,056,967 | ||||||
Transatlantic Holdings, Inc. | 102,100 | 4,969,207 | ||||||
Lexington Realty Trust | 476,000 | 4,450,600 | ||||||
Associated Banc-Corp.1 | 292,352 | 4,341,427 | ||||||
Old National Bancorp | 393,845 | 4,222,018 | ||||||
Employers Holdings, Inc. | 193,100 | 3,989,446 | ||||||
First Horizon National Corp. | 267,756 | 3,001,544 | ||||||
Investors Real Estate Trust | 245,000 | 2,327,500 | ||||||
Redwood Trust, Inc. | 124,100 | 1,929,755 | ||||||
Wilmington Trust Corp. | 350,000 | 1,582,000 | ||||||
First Marblehead Corp.* | 542,384 | 1,193,245 | ||||||
Bimini Capital Management, Inc. — Class A | 473,362 | 364,489 | ||||||
Total Financials | 99,338,112 | |||||||
Energy - 12.7% | ||||||||
Global Industries Ltd.* | 1,941,039 | 19,002,772 | ||||||
SandRidge Energy, Inc.* | 959,411 | 12,280,461 | ||||||
Gulfport Energy Corp.* | 327,172 | 11,827,268 | ||||||
Southern Union Co. | 356,700 | 10,208,754 | ||||||
Plains Exploration & Production Co.* | 273,230 | 9,899,123 | ||||||
McDermott International, Inc.* | 277,300 | 7,040,647 | ||||||
Goodrich Petroleum Corp.* | 303,410 | 6,741,770 | ||||||
USEC, Inc.* | 1,234,000 | 5,429,600 | ||||||
Resolute Energy Corp.* | 103,503 | 1,877,544 | ||||||
Total Energy | 84,307,939 | |||||||
Consumer Discretionary - 11.7% | ||||||||
Cabela’s, Inc.* | 637,301 | 15,938,898 | ||||||
Chico’s FAS, Inc. | 779,570 | 11,615,593 | ||||||
Maidenform Brands, Inc.* | 272,717 | 7,791,525 | ||||||
Penn National Gaming, Inc.* | 201,800 | 7,478,708 | ||||||
Brown Shoe Company, Inc. | 553,557 | 6,764,467 | ||||||
Apollo Group, Inc. — Class A* | 143,350 | 5,979,128 | ||||||
Jack in the Box, Inc.* | 197,700 | 4,483,836 | ||||||
Scholastic Corp. | 155,900 | 4,215,536 | ||||||
Hanesbrands, Inc.* | 133,890 | 3,620,386 | ||||||
DeVry, Inc. | 64,160 | 3,533,291 | ||||||
Smith & Wesson Holding Corp.* | 798,826 | 2,835,832 | ||||||
Fortune Brands, Inc. | 42,000 | 2,599,380 | ||||||
Fred’s, Inc. — Class A | 89,226 | 1,188,490 | ||||||
HydroGen Corp.*,5 | 1,265,700 | 25,314 | ||||||
Total Consumer Discretionary | 78,070,384 | |||||||
Information Technology - 10.3% | ||||||||
Computer Sciences Corp. | 383,390 | 18,682,595 | ||||||
IXYS Corp.* | 940,379 | 12,629,290 | ||||||
Maxwell Technologies, Inc.* | 613,755 | 10,599,549 | ||||||
Power-One, Inc.*,1 | 1,063,372 | 9,304,505 | ||||||
Euronet Worldwide, Inc.* | 278,800 | 5,389,204 | ||||||
Satyam Computer Services Ltd. ADR* | 1,769,175 | 5,342,908 | ||||||
Symmetricom, Inc.* | 630,300 | 3,863,739 | ||||||
Ultratech, Inc.* | 104,900 | 3,084,060 | ||||||
Total Information Technology | 68,895,850 | |||||||
Utilities - 7.3% | ||||||||
Great Plains Energy, Inc. | 382,735 | 7,662,355 | ||||||
NorthWestern Corp. | 220,800 | 6,690,240 | ||||||
Allete, Inc. | 157,854 | 6,151,570 | ||||||
Black Hills Corp. | 182,000 | 6,086,080 | ||||||
American Water Works Company, Inc. | 204,240 | 5,728,932 | ||||||
UGI Corp. | 143,457 | 4,719,735 | ||||||
Westar Energy, Inc. | 114,780 | 3,032,488 | ||||||
Atmos Energy Corp. | 88,230 | 3,008,643 | ||||||
MDU Resources Group, Inc. | 122,167 | 2,806,176 | ||||||
Pepco Holdings, Inc. | 135,500 | 2,527,075 | ||||||
Total Utilities | 48,413,294 | |||||||
Materials - 7.1% | ||||||||
Bemis Company, Inc. | 420,680 | 13,802,511 | ||||||
Owens-Illinois, Inc.* | 319,180 | 9,636,044 | ||||||
Louisiana-Pacific Corp.* | 830,700 | 8,722,350 | ||||||
Sonoco Products Co. | 174,500 | 6,322,135 | ||||||
HB Fuller Co. | 194,646 | 4,180,996 | ||||||
Zoltek Companies, Inc.* | 209,214 | 2,809,744 | ||||||
Landec Corp.* | 328,600 | 2,135,900 | ||||||
Total Materials | 47,609,680 | |||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 51 |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Mid Cap Value Institutional Fund |
Shares | Value | |||||||
Consumer Staples - 4.9% | ||||||||
Hormel Foods Corp. | 374,580 | $ | 10,428,307 | |||||
JM Smucker Co. | 134,500 | 9,601,955 | ||||||
Ralcorp Holdings, Inc.* | 132,400 | 9,060,132 | ||||||
Bunge Ltd. | 48,000 | 3,471,840 | ||||||
Total Consumer Staples | 32,562,234 | |||||||
Health Care - 4.3% | ||||||||
RehabCare Group, Inc.* | 274,900 | 10,135,563 | ||||||
Mednax, Inc.* | 114,013 | 7,594,406 | ||||||
Hologic, Inc.* | 279,882 | 6,213,380 | ||||||
Forest Laboratories, Inc.* | 151,230 | 4,884,729 | ||||||
Total Health Care | 28,828,078 | |||||||
Total Common Stocks (Cost $465,077,187) | 602,862,236 | |||||||
CONVERTIBLE PREFERRED STOCK†† - 0.1% | ||||||||
Thermoenergy Corp.*,2,3 | 793,750 | 509,905 | ||||||
Total Convertible Preferred Stock (Cost $757,980) | 509,905 | |||||||
WARRANTS†† - 0.1% | ||||||||
Industrials - 0.1% | ||||||||
Thermoenergy Corp. $0.30,07/31/152 | 12,700,000 | 655,320 | ||||||
Total Warrants (Cost $1,147,020) | 655,320 | |||||||
EXCHANGE TRADED FUNDS† - 5.3% | ||||||||
iShares Russell Midcap Value Index Fund | 325,570 | 15,679,451 | ||||||
iShares S&P MidCap 400 Value Index Fund | 145,000 | 12,499,000 | ||||||
iShares Russell 2000 Value Index Fund | 95,000 | 7,161,100 | ||||||
Total Exchange Traded Funds (Cost $29,640,600) | 35,339,551 | |||||||
Face | ||||||||
Amount | Value | |||||||
CONVERTIBLE BOND†† - 0.7% | ||||||||
Energy - 0.7% | ||||||||
USEC, Inc. 3.00% due 10/01/14 | $ | 5,500,000 | $ | 4,345,000 | ||||
Total Convertible Bond (Cost $4,388,738) | $ | 4,345,000 | ||||||
REPURCHASE AGREEMENT††,4 - 4.1% | ||||||||
UMB Financial Corp. issued 03/31/11 at 0.03% due 04/01/11 | 27,592,000 | 27,592,000 | ||||||
Total Repurchase Agreement (Cost $27,592,000) | 27,592,000 | |||||||
Total Long Investments - 100.7% (Cost $528,603,525) | $ | 671,304,012 | ||||||
Contracts | ||||||||
OPTIONS WRITTEN† - (0.1)% | ||||||||
Call Options on: | ||||||||
Power-One, Inc. Expiring April 2011 with strike price of $13.00 | 1,547 | (7,735 | ) | |||||
General Cable Corp. Expiring May 2011 with strike price of $50.00 | 800 | (20,000 | ) | |||||
Associated Banc-Corp. Expiring June 2011 with strike price of $15.00 | 973 | (77,840 | ) | |||||
Total Call Options | (105,575 | ) | ||||||
Put Options on: | ||||||||
Arch Coal, Inc. Expiring July 2011 with strike price of $30.00 | 1,025 | (99,425 | ) | |||||
Computer Sciences Corp. Expiring June 2011 with strike price of $50.00 | 580 | (191,400 | ) | |||||
Total Put Options | (290,825 | ) | ||||||
Total Options Written (Premiums received $690,678) | $ | (396,400 | ) | |||||
Liabilities, Less Cash & Other Assets — (0.6)% | (4,199,769 | ) | ||||||
Total Net Assets - 100.0% | $ | 666,707,843 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
1 | All or a portion of this security is pledged as collateral for open written option contracts at March 31, 2011. | |
2 | All or a portion of this security was fair valued by the Valuation Committee based on non-observable market inputs at March 31, 2011. The total market value of fair valued securities amounts to $1,165,225 (cost $1,905,000), or 0.2% of total net assets. | |
3 | PIPE (Private Investment in Public Equity) — Stock issued by a company in the secondary market as a means of raising capital more quickly and less expensively than through registration of a secondary public offering. | |
4 | Repurchase Agreement — See Note 5. | |
5 | Investment in affiliated issuer. See Note 8 in the Notes to Financial Statements. ADR — American Depositary Receipt | |
ADR — American Depositary Receipt |
52 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund
Mid Cap Value Institutional Fund
Mid Cap Value Institutional Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
March 31, 2011
Assets: | ||||
Investments in unaffiliated issuers, at value* | $ | 643,686,698 | ||
Investments in affiliated issuers, at value** | 25,314 | |||
Repurchase agreements, at value | 27,592,000 | |||
Total investments | 671,304,012 | |||
Cash | 863 | |||
Receivables: | ||||
Securities sold | 547,782 | |||
Fund shares sold | 811,436 | |||
Dividends | 529,684 | |||
Interest | 82,523 | |||
Prepaid expenses | 98,381 | |||
Total assets | 673,374,681 | |||
Liabilities: | ||||
Written options, at value*** | 396,400 | |||
Payable for: | ||||
Securities purchased | 553,288 | |||
Fund shares redeemed | 5,085,577 | |||
Management fees | 410,253 | |||
Custodian fees | 5,279 | |||
Transfer agent/maintenance fees | 58,032 | |||
Portfolio accounting fees | 51,965 | |||
Professional fees | 265 | |||
Directors’ fees | 9,449 | |||
Legal fees | 7,225 | |||
Pricing fees | 714 | |||
Direct shareholders expense | 64,212 | |||
Corporate expenses | 8,239 | |||
Other | 15,940 | |||
Total liabilities | 6,666,838 | |||
Net assets | $ | 666,707,843 | ||
Net assets consist of: | ||||
Paid in capital | $ | 507,358,586 | ||
Undistributed net investment income | 1,122,066 | |||
Undistributed net realized gain on investments | 15,232,426 | |||
Net unrealized appreciation in on investments | 142,994,765 | |||
Net assets | $ | 666,707,843 | ||
Net assets | $ | 666,707,843 | ||
Capital shares outstanding | 51,236,181 | |||
Net asset value per share | $ | 13.01 | ||
* Investments in unaffiliated issuers, at cost | $ | 501,008,994 | ||
** Investments in affiliated issuers, at cost | 2,531 | |||
Repurchase agreements, at cost | 27,592,000 | |||
Total cost | $ | 528,603,525 | ||
*** Premiums received for written options | $ | 690,678 |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 3,544,154 | ||
Interest | 220,281 | |||
Total investment income | 3,764,435 | |||
Expenses: | ||||
Management fees | 2,171,318 | |||
Transfer agent/maintenance fees | 251,600 | |||
Portfolio accounting fees | 275,030 | |||
Directors’ fees* | 19,875 | |||
Miscellaneous | 168,534 | |||
Total expenses | 2,886,357 | |||
Expenses waived by Advisor | (280,769 | ) | ||
Net expenses | 2,605,588 | |||
Net investment income | 1,158,847 | |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 18,215,137 | |||
Options written | 519,568 | |||
Net realized gain | 18,734,705 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 85,963,537 | |||
Options written | 57,716 | |||
Net change in unrealized appreciation | 86,021,253 | |||
Net realized and unrealized gain | 104,755,958 | |||
Net increase in net assets resulting from operations | $ | 105,914,805 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 53 |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Mid Cap Value Institutional Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income | $ | 1,158,847 | $ | 3,027,929 | ||||
Net realized gain on investments | 18,734,705 | 21,766,168 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 86,021,253 | 19,799,839 | ||||||
Net increase in net assets resulting from operations | 105,914,805 | 44,593,936 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | (3,064,710 | ) | (326,334 | ) | ||||
Net realized gains | (22,149,495 | ) | (11,082,828 | ) | ||||
Total distributions to shareholders | (25,214,205 | ) | (11,409,162 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | 127,161,145 | 259,968,422 | ||||||
Distributions reinvested | 10,706,814 | 5,348,897 | ||||||
Cost of shares redeemed | (66,307,714 | ) | (101,510,411 | ) | ||||
Net increase from capital share transactions | 71,560,245 | 163,806,908 | ||||||
Net increase in net assets | 152,260,845 | 196,991,682 | ||||||
Net assets: | ||||||||
Beginning of period | 514,446,998 | 317,455,316 | ||||||
End of period | $ | 666,707,843 | $ | 514,446,998 | ||||
Undistributed net investment income at end of period | $ | 1,122,066 | $ | 3,027,929 | ||||
Capital share activity: | ||||||||
Shares sold | 10,415,132 | 23,979,841 | ||||||
Shares issued from reinvestment of distributions | 905,056 | 509,904 | ||||||
Shares redeemed | (5,459,645 | ) | (9,372,413 | ) | ||||
Net increase in shares | 5,860,543 | 15,117,332 | ||||||
54 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Mid Cap Value Institutional Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Period Ended | |||||||||||||
March 31, | September 30, | September 30, | September 30, | |||||||||||||
2011a | 2010 | 2009 | 2008a,b | |||||||||||||
Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ | 11.34 | $ | 10.49 | $ | 10.68 | $ | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment incomec | 0.02 | 0.08 | 0.08 | 0.04 | ||||||||||||
Net gain on investments (realized and unrealized) | 2.20 | 1.13 | 0.27 | 0.64 | ||||||||||||
Total from investment operations | 2.22 | 1.21 | 0.35 | 0.68 | ||||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.07 | ) | (0.01 | ) | (0.06 | ) | — | |||||||||
Net realized gains | (0.48 | ) | (0.35 | ) | (0.48 | ) | — | |||||||||
Total distributions | (0.55 | ) | (0.36 | ) | (0.54 | ) | — | |||||||||
Net asset value, end of period | $ | 13.01 | $ | 11.34 | $ | 10.49 | $ | 10.68 | ||||||||
Total Returnd | 19.99 | % | 11.76 | % | 5.30 | % | 6.80 | % | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 666,708 | $ | 514,447 | $ | 317,455 | $ | 17,436 | ||||||||
Ratios to average net assets: | ||||||||||||||||
Net investment income | 0.40 | % | 0.78 | % | 0.82 | % | 1.81 | % | ||||||||
Total expensese | 1.00 | % | 0.95 | % | 0.98 | % | 1.19 | % | ||||||||
Net expensesf | 0.90 | % | 0.90 | % | 0.91 | % | 1.10 | % | ||||||||
Portfolio turnover rate | 13 | % | 20 | % | 76 | % | 63 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Since commencement of operations: July 11, 2008 — Mid Cap Value Institutional Fund. | |
c | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
e | Total expense information reflects the expense ratios absent expense reductions by the Investment Manager, as applicable. | |
f | Net expense information reflects the expense ratios after voluntary expense waivers and reimbursements, as applicable. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 55 |
Table of Contents
Rydex|SGI Equity Fund | ||
PERFORMANCE SUMMARY | Large Cap Concentrated Growth Fund | |
March 31, 2011 | (Unaudited) |
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211912.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Large Cap Concentrated Growth Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 1000® Growth Index is an unmanaged capitalization index which includes stocks incorporated in the United States and its territories and measures the performance of the Russell 1000® companies with higher price-to-book ratios and higher forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 16.69 | % | -0.35 | % | 1.42 | % | ||||||
A-Class Shares with sales charge | 9.96 | % | -1.51 | % | 0.83 | % | ||||||
B-Class Shares | 15.72 | % | -1.11 | % | 0.82 | % | ||||||
B-Class Shares with CDSC | 10.72 | % | -1.47 | % | 0.82 | % | ||||||
C-Class Shares | 15.65 | % | -1.11 | % | 0.67 | % | ||||||
C-Class Shares with CDSC | 14.65 | % | -1.11 | % | 0.67 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Information Technology | 28.9 | % | ||
Consumer Discretionary | 18.4 | % | ||
Industrials | 18.2 | % | ||
Energy | 11.0 | % | ||
Materials | 6.2 | % | ||
Financials | 5.6 | % | ||
Health Care | 5.4 | % | ||
Consumer Staples | 2.8 | % | ||
Cash & Other Assets, Less Liabilities | 3.5 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
56 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Large Cap Concentrated Growth Fund |
Shares | Value | |||||||
COMMON STOCKS† - 96.5% | ||||||||
Information Technology - 28.9% | ||||||||
Apple, Inc.* | 6,410 | $ | 2,233,565 | |||||
Google, Inc. — Class A* | 3,295 | 1,931,562 | ||||||
QUALCOMM, Inc. | 33,250 | 1,823,098 | ||||||
EMC Corp.* | 65,050 | 1,727,077 | ||||||
Autodesk, Inc.* | 32,640 | 1,439,750 | ||||||
Cognizant Technology Solutions Corp. — Class A* | 16,820 | 1,369,148 | ||||||
Microsoft Corp. | 50,130 | 1,271,297 | ||||||
Avago Technologies Ltd. | 34,950 | 1,086,945 | ||||||
Total Information Technology | 12,882,442 | |||||||
Consumer Discretionary - 18.4% | ||||||||
Walt Disney Co. | 33,640 | 1,449,548 | ||||||
Starbucks Corp. | 38,290 | 1,414,815 | ||||||
Ford Motor Co.* | 93,100 | 1,388,121 | ||||||
Omnicom Group, Inc. | 28,220 | 1,384,473 | ||||||
Time Warner, Inc. | 36,300 | 1,295,910 | ||||||
Johnson Controls, Inc. | 30,760 | 1,278,693 | ||||||
Total Consumer Discretionary | 8,211,560 | |||||||
Industrials - 18.2% | ||||||||
Parker Hannifin Corp. | 15,630 | 1,479,849 | ||||||
Eaton Corp. | 25,100 | 1,391,544 | ||||||
Deere & Co. | 14,010 | 1,357,429 | ||||||
Precision Castparts Corp. | 8,980 | 1,321,676 | ||||||
United Parcel Service, Inc. — Class B | 17,700 | 1,315,464 | ||||||
CSX Corp. | 16,090 | 1,264,674 | ||||||
Total Industrials | 8,130,636 | |||||||
Energy - 11.0% | ||||||||
Halliburton Co. | 36,720 | 1,830,125 | ||||||
Baker Hughes, Inc. | 21,400 | 1,571,402 | ||||||
Peabody Energy Corp. | 21,090 | 1,517,636 | ||||||
Total Energy | 4,919,163 | |||||||
Materials - 6.2% | ||||||||
Freeport-McMoRan Copper & Gold, Inc. — Class B | 25,200 | 1,399,860 | ||||||
Dow Chemical Co. | 36,265 | 1,369,004 | ||||||
Total Materials | 2,768,864 | |||||||
Financials - 5.6% | ||||||||
U.S. Bancorp | 47,520 | 1,255,954 | ||||||
Goldman Sachs Group, Inc. | 7,920 | 1,255,082 | ||||||
Total Financials | 2,511,036 | |||||||
Health Care - 5.4% | ||||||||
Covidien plc | 26,380 | 1,370,177 | ||||||
Warner Chilcott plc — Class A | 45,240 | 1,053,187 | ||||||
Total Health Care | 2,423,364 | |||||||
Consumer Staples - 2.8% | ||||||||
Bunge Ltd. | 17,190 | 1,243,353 | ||||||
Total Common Stocks (Cost $36,879,553) | 43,090,418 | |||||||
Total Investments - 96.5% (Cost $36,879,553) | $ | 43,090,418 | ||||||
Cash & Other Assets, Less Liabilities - 3.5% | 1,553,401 | |||||||
Total Net Assets - 100.0% | $ | 44,643,819 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
plc — Public Limited Company. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 57 |
Table of Contents
Rydex|SGI Equity Fund
Large Cap Concentrated Growth Fund
Large Cap Concentrated Growth Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 43,090,418 | ||
Total investments | 43,090,418 | |||
Cash | 967,711 | |||
Receivables: | ||||
Securities sold | 628,784 | |||
Fund shares sold | 6,760 | |||
Dividends | 38,758 | |||
Prepaid expenses | 38,306 | |||
Total assets | 44,770,737 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares redeemed | 51,872 | |||
Management fees | 27,680 | |||
Custodian fees | 321 | |||
Transfer agent/maintenance fees | 13,595 | |||
Distribution and service fees | 15,154 | |||
Portfolio accounting fees | 3,506 | |||
Professional fees | 4,128 | |||
Directors’ fees | 1,847 | |||
Legal fees | 591 | |||
Pricing fees | 143 | |||
Insurance | 729 | |||
Direct shareholders expense | 6,505 | |||
Corporate expenses | 847 | |||
Total liabilities | 126,918 | |||
Net assets | $ | 44,643,819 | ||
Net assets consist of: | ||||
Paid in capital | $ | 47,934,848 | ||
Accumulated net investment loss | (68,534 | ) | ||
Accumulated net realized loss on investments | (9,433,360 | ) | ||
Net unrealized appreciation in on investments | 6,210,865 | |||
Net assets | $ | 44,643,819 | ||
A-Class: | ||||
Net assets | $ | 35,195,336 | ||
Capital shares outstanding | 3,861,132 | |||
Net asset value per share | $ | 9.12 | ||
Maximum offering price per share** | $ | 9.57 | ||
B-Class: | ||||
Net assets | $ | 4,987,738 | ||
Capital shares outstanding | 599,378 | |||
Net asset value per share | $ | 8.32 | ||
C-Class: | ||||
Net assets | $ | 4,460,745 | ||
Capital shares outstanding | 533,917 | |||
Net asset value per share | $ | 8.35 | ||
* Investments, at cost | $ | 36,879,553 |
** | Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 249,412 | ||
Interest | 81 | |||
Total investment income | 249,493 | |||
Expenses: | ||||
Management fees | 154,292 | |||
Transfer agent/maintenance fees | 111,572 | |||
Distribution and service fees: | ||||
A-Class | 40,413 | |||
B-Class | 24,589 | |||
C-Class | 19,481 | |||
Portfolio accounting fees | 19,544 | |||
Directors’ fees* | 1,287 | |||
Miscellaneous | 29,313 | |||
Total expenses | 400,491 | |||
Expenses waived by Advisor | (89,711 | ) | ||
Net expenses | 310,780 | |||
Net investment loss | (61,287 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 3,983,924 | |||
Net realized gain | 3,983,924 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 3,389,239 | |||
Net change in unrealized appreciation | 3,389,239 | |||
Net realized and unrealized gain | 7,373,163 | |||
Net increase in net assets resulting from operations $ | 7,311,876 | |||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
58 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Large Cap Concentrated Growth Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income (loss) | $ | (61,287 | ) | $ | 129,025 | |||
Net realized gain on investments | 3,983,924 | 4,700,281 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 3,389,239 | (1,175,337 | ) | |||||
Net increase in net assets resulting from operations | 7,311,876 | 3,653,969 | ||||||
Distribution To Shareholders From: | ||||||||
Net investment income | ||||||||
A-Class | (136,272 | ) | — | |||||
Total distributions to shareholders | (136,272 | ) | — | |||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 4,364,125 | 12,118,241 | ||||||
B-Class | 393,922 | 1,138,329 | ||||||
C-Class | 767,788 | 253,325 | ||||||
Distributions reinvested | ||||||||
A-Class | 135,329 | — | ||||||
Cost of shares redeemed | ||||||||
A-Class | (4,002,928 | ) | (8,293,084 | ) | ||||
B-Class | (858,629 | ) | (2,811,232 | ) | ||||
C-Class | (276,075 | ) | (1,022,294 | ) | ||||
Net increase from capital share transactions | 523,532 | 1,383,285 | ||||||
Net increase in net assets | 7,699,136 | 5,037,254 | ||||||
Net assets: | ||||||||
Beginning of period | 36,944,683 | 31,907,429 | ||||||
End of period | $ | 44,643,819 | $ | 36,944,683 | ||||
Accumulated/(Undistributed) net investment income/(loss) at end of period | $ | (68,534 | ) | $ | 129,025 | |||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class | 508,571 | 1,699,951 | ||||||
B-Class | 50,610 | 170,222 | ||||||
C-Class | 97,096 | 37,449 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 16,034 | — | ||||||
Shares redeemed | ||||||||
A-Class | (470,662 | ) | (1,120,658 | ) | ||||
B-Class | (110,399 | ) | (409,958 | ) | ||||
C-Class | (34,602 | ) | (149,671 | ) | ||||
Net increase in shares | 56,648 | 227,335 | ||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 59 |
Table of Contents
FINANCIAL HIGHLIGHTS | Rydex|SGI Equity Fund Large Cap Concentrated Growth Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 7.63 | $ | 6.95 | $ | 6.91 | $ | 10.66 | $ | 9.86 | $ | 9.36 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | (0.01 | ) | 0.04 | 0.01 | (0.02 | ) | (0.01 | ) | (0.06 | ) | ||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.54 | 0.64 | 0.03 | (2.87 | ) | 0.81 | 0.56 | |||||||||||||||||
Total from investment operations | 1.53 | 0.68 | 0.04 | (2.89 | ) | 0.80 | 0.50 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.04 | ) | — | — | — | — | — | |||||||||||||||||
Net realized gains | — | — | — | (0.86 | ) | — | — | |||||||||||||||||
Total distributions | (0.04 | ) | — | — | (0.86 | ) | — | — | ||||||||||||||||
Net asset value, end of period | $ | 9.12 | $ | 7.63 | $ | 6.95 | $ | 6.91 | $ | 10.66 | $ | 9.86 | ||||||||||||
Total Returnc | 20.05 | % | 9.78 | % | 0.58 | % | (28.85 | %) | 8.11 | % | 5.34 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 35,195 | $ | 29,059 | $ | 22,425 | $ | 23,723 | $ | 30,375 | $ | 30,078 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.14 | %) | 0.52 | % | 0.09 | % | (0.20 | %) | (0.10 | %) | (0.68 | %) | ||||||||||||
Total expensesd | 1.78 | % | 1.73 | % | 2.04 | % | 1.72 | % | 1.57 | % | 1.76 | % | ||||||||||||
Net expensese | 1.35 | % | 1.35 | % | 1.35 | % | 1.35 | % | 1.40 | % | 1.76 | % | ||||||||||||
Portfolio turnover rate | 76 | % | 190 | % | 134 | % | 198 | % | 21 | % | 39 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 6.96 | $ | 6.39 | $ | 6.40 | $ | 10.01 | $ | 9.33 | $ | 8.92 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.03 | ) | (0.02 | ) | (0.03 | ) | (0.08 | ) | (0.09 | ) | (0.13 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.39 | 0.59 | 0.02 | (2.67 | ) | 0.77 | 0.54 | |||||||||||||||||
Total from investment operations | 1.36 | 0.57 | (0.01 | ) | (2.75 | ) | 0.68 | 0.41 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (0.86 | ) | — | — | |||||||||||||||||
Total distributions | — | — | — | (0.86 | ) | — | — | |||||||||||||||||
Net asset value, end of period | $ | 8.32 | $ | 6.96 | $ | 6.39 | $ | 6.40 | $ | 10.01 | $ | 9.33 | ||||||||||||
Total Returnc | 19.54 | % | 8.92 | % | (0.16 | %) | (29.36 | %) | 7.29 | % | 4.60 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,988 | $ | 4,590 | $ | 5,740 | $ | 7,394 | $ | 10,868 | $ | 16,073 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.89 | %) | (0.31 | %) | (0.66 | %) | (0.95 | %) | (0.88 | %) | (1.46 | %) | ||||||||||||
Total expensesd | 2.54 | % | 2.48 | % | 2.79 | % | 2.47 | % | 2.32 | % | 2.53 | % | ||||||||||||
Net expensese | 2.10 | % | 2.10 | % | 2.10 | % | 2.10 | % | 2.15 | % | 2.53 | % | ||||||||||||
Portfolio turnover rate | 76 | % | 190 | % | 134 | % | 198 | % | 21 | % | 39 | % |
60 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Large Cap Concentrated Growth Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 6.99 | $ | 6.41 | $ | 6.42 | $ | 10.04 | $ | 9.36 | $ | 8.94 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.03 | ) | (0.02 | ) | (0.03 | ) | (0.08 | ) | (0.08 | ) | (0.13 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.39 | 0.60 | 0.02 | (2.68 | ) | 0.76 | 0.55 | |||||||||||||||||
Total from investment operations | 1.36 | 0.58 | (0.01 | ) | (2.76 | ) | 0.68 | 0.42 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | — | (0.86 | ) | — | — | |||||||||||||||||
Total distributions | — | — | — | (0.86 | ) | — | — | |||||||||||||||||
Net asset value, end of period | $ | 8.35 | $ | 6.99 | $ | 6.41 | $ | 6.42 | $ | 10.04 | $ | 9.36 | ||||||||||||
Total Returnc | 19.46 | % | 9.05 | % | (0.16 | %) | (29.37 | %) | 7.26 | % | 4.70 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,461 | $ | 3,296 | $ | 3,742 | $ | 5,501 | $ | 11,245 | $ | 12,777 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (0.88 | %) | (0.27 | %) | (0.66 | %) | (0.92 | %) | (0.86 | %) | (1.44 | %) | ||||||||||||
Total expensesd | 2.55 | % | 2.48 | % | 2.78 | % | 2.46 | % | 2.32 | % | 2.52 | % | ||||||||||||
Net expensese | 2.10 | % | 2.10 | % | 2.10 | % | 2.10 | % | 2.15 | % | 2.52 | % | ||||||||||||
Portfolio turnover rate | 76 | % | 190 | % | 134 | % | 198 | % | 21 | % | 39 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Total expense information reflects expense ratios absent expense reductions by the Investment Manager, as applicable. | |
e | Net expense information reflects the expense ratios after voluntary expense waivers and reimbursements and before custodian earnings credits, as applicable. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 61 |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211913.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Small Cap Growth Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 2000® Growth Index measures the performance of those Russell 2000® companies with higher price-to-book ratios and higher forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 27.82 | % | -1.17 | % | 3.54 | % | ||||||
A-Class Shares with sales charge | 20.47 | % | -2.33 | % | 2.92 | % | ||||||
B-Class Shares | 26.85 | % | -1.87 | % | 2.91 | % | ||||||
B-Class Shares with CDSC | 21.85 | % | -2.23 | % | 2.91 | % | ||||||
C-Class Shares | 26.91 | % | -1.90 | % | 2.77 | % | ||||||
C-Class Shares with CDSC | 25.91 | % | -1.90 | % | 2.77 | % | ||||||
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Information Technology | 22.4 | % | ||
Consumer Discretionary | 16.9 | % | ||
Health Care | 16.8 | % | ||
Industrials | 16.3 | % | ||
Energy | 5.7 | % | ||
Materials | 5.1 | % | ||
Financials | 4.2 | % | ||
Consumer Staples | 1.9 | % | ||
Utilities | 1.7 | % | ||
Telecommunication Services | 1.1 | % | ||
Exchange Traded Funds | 5.0 | % | ||
Cash & Other Assets, Less Liabilities | 2.9 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
62 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Small Cap Growth Fund |
Shares | Value | |||||||
COMMON STOCKS† - 92.1% | ||||||||
Information Technology - 22.4% | ||||||||
Solera Holdings, Inc. | 5,830 | $ | 297,913 | |||||
Alliance Data Systems Corp.* | 3,120 | 267,977 | ||||||
Opnet Technologies, Inc. | 6,350 | 247,587 | ||||||
Ciena Corp.* | 9,000 | 233,640 | ||||||
SYNNEX Corp.* | 7,130 | 233,365 | ||||||
Cadence Design Systems, Inc.* | 21,720 | 211,770 | ||||||
Nuance Communications, Inc.* | 10,705 | 209,390 | ||||||
SolarWinds, Inc.* | 8,820 | 206,917 | ||||||
KLA-Tencor Corp. | 4,200 | 198,954 | ||||||
LogMeIn, Inc.* | 4,700 | 198,152 | ||||||
Rofin-Sinar Technologies, Inc.* | 4,710 | 186,045 | ||||||
FLIR Systems, Inc. | 5,250 | 181,702 | ||||||
VanceInfo Technologies, Inc. ADR* | 5,600 | 175,896 | ||||||
Informatica Corp.* | 3,190 | 166,614 | ||||||
Acme Packet, Inc.* | 2,300 | 163,208 | ||||||
Newport Corp.* | 8,300 | 147,989 | ||||||
Riverbed Technology, Inc.* | 3,710 | 139,681 | ||||||
Harmonic, Inc.* | 14,750 | 138,355 | ||||||
Sourcefire, Inc.* | 4,600 | 126,546 | ||||||
Nanometrics, Inc.* | 6,590 | 119,213 | ||||||
Meru Networks, Inc.* | 5,280 | 107,237 | ||||||
SMART Modular Technologies WWH, Inc.* | 11,700 | 90,909 | ||||||
Lattice Semiconductor Corp.* | 14,600 | 86,140 | ||||||
GSI Commerce, Inc.* | 2,710 | 79,322 | ||||||
Total Information Technology | 4,214,522 | |||||||
Consumer Discretionary - 16.9% | ||||||||
Jarden Corp. | 9,865 | 350,898 | ||||||
Tempur-Pedic International, Inc.* | 5,250 | 265,965 | ||||||
Life Time Fitness, Inc.* | 7,020 | 261,916 | ||||||
Penn National Gaming, Inc.* | 6,525 | 241,816 | ||||||
Lamar Advertising Co. — Class A* | 6,140 | 226,812 | ||||||
Gaylord Entertainment Co.* | 5,990 | 207,733 | ||||||
ANN, Inc.* | 6,560 | 190,962 | ||||||
Select Comfort Corp.* | 12,560 | 151,474 | ||||||
Lennar Corp. — Class A | 8,350 | 151,302 | ||||||
Hanesbrands, Inc.* | 5,490 | 148,450 | ||||||
Gentex Corp. | 4,760 | 143,990 | ||||||
Monro Muffler Brake, Inc. | 4,075 | 134,393 | ||||||
Phillips-Van Heusen Corp. | 1,850 | 120,305 | ||||||
Jos A. Bank Clothiers, Inc.* | 2,360 | 120,077 | ||||||
California Pizza Kitchen, Inc.* | 6,970 | 117,654 | ||||||
Cost Plus, Inc.* | 11,240 | 110,377 | ||||||
Harman International Industries, Inc. | 1,920 | 89,894 | ||||||
Vail Resorts, Inc.* | 1,625 | 79,235 | ||||||
MDC Partners, Inc. — Class A | 3,600 | 60,372 | ||||||
Total Consumer Discretionary | 3,173,625 | |||||||
Health Care - 16.8% | ||||||||
Hologic, Inc.* | 12,140 | 269,508 | ||||||
Endo Pharmaceuticals Holdings, Inc.* | 6,690 | 255,290 | ||||||
Hill-Rom Holdings, Inc. | 5,820 | 221,044 | ||||||
Mednax, Inc.* | 3,270 | 217,815 | ||||||
Natus Medical, Inc.* | 12,540 | 210,672 | ||||||
Integra LifeSciences Holdings Corp.* | 4,230 | 200,587 | ||||||
Health Management Associates, Inc. — Class A* | 16,620 | 181,158 | ||||||
Parexel International Corp.* | 7,270 | 181,023 | ||||||
Teleflex, Inc. | 2,680 | 155,386 | ||||||
Wright Medical Group, Inc.* | 9,120 | 155,131 | ||||||
American Medical Systems Holdings, Inc.* | 6,810 | 147,368 | ||||||
Perrigo Co. | 1,850 | 147,112 | ||||||
Haemonetics Corp.* | 2,155 | 141,239 | ||||||
Endologix, Inc.* | 19,600 | 132,888 | ||||||
BioMarin Pharmaceutical, Inc.* | 5,000 | 125,650 | ||||||
Halozyme Therapeutics, Inc.* | 12,940 | 86,827 | ||||||
Obagi Medical Products, Inc.* | 6,420 | 81,149 | ||||||
Human Genome Sciences, Inc.* | 2,630 | 72,194 | ||||||
Angiodynamics, Inc.* | 4,260 | 64,411 | ||||||
CardioNet, Inc.* | 12,550 | 60,114 | ||||||
Momenta Pharmaceuticals, Inc.* | 3,300 | 52,305 | ||||||
Total Health Care | 3,158,871 | |||||||
Industrials - 16.3% | ||||||||
Navistar International Corp.* | 5,400 | 374,382 | ||||||
Interface, Inc. — Class A | 19,080 | 352,789 | ||||||
WABCO Holdings, Inc.* | 5,580 | 343,951 | ||||||
IDEX Corp. | 6,650 | 290,273 | ||||||
Regal-Beloit Corp. | 3,740 | 276,124 | ||||||
BE Aerospace, Inc.* | 7,340 | 260,790 | ||||||
Wabtec Corp. | 3,150 | 213,665 | ||||||
Roper Industries, Inc. | 2,260 | 195,400 | ||||||
Pall Corp. | 3,240 | 186,656 | ||||||
Kansas City Southern* | 2,945 | 160,355 | ||||||
Aecom Technology Corp.* | 5,560 | 154,179 | ||||||
Towers Watson & Co. — Class A | 2,550 | 141,423 | ||||||
Pentair, Inc. | 3,290 | 124,329 | ||||||
Total Industrials | 3,074,316 | |||||||
Energy - 5.7% | ||||||||
Oil States International, Inc.* | 4,560 | 347,199 | ||||||
Alpha Natural Resources, Inc.* | 4,890 | 290,319 | ||||||
Superior Energy Services, Inc.* | 6,830 | 280,030 | ||||||
Bill Barrett Corp.* | 3,820 | 152,456 | ||||||
Total Energy | 1,070,004 | |||||||
Materials - 5.1% | ||||||||
Solutia, Inc.* | 10,300 | 261,620 | ||||||
CF Industries Holdings, Inc. | 1,300 | 177,827 | ||||||
Kaiser Aluminum Corp. | 3,590 | 176,807 | ||||||
Cliffs Natural Resources, Inc. | 1,760 | 172,973 | ||||||
Silgan Holdings, Inc. | 4,470 | 170,486 | ||||||
Total Materials | 959,713 | |||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 63 |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Small Cap Growth Fund |
Shares | Value | |||||||
Financials - 4.2% | ||||||||
Discover Financial Services | 9,000 | $ | 217,080 | |||||
Commerce Bancshares, Inc. | 5,061 | 204,667 | ||||||
Stifel Financial Corp.* | 2,670 | 191,679 | ||||||
HCC Insurance Holdings, Inc. | 5,780 | 180,972 | ||||||
Total Financials | 794,398 | |||||||
Consumer Staples - 1.9% | ||||||||
Diamond Foods, Inc. | 3,300 | 184,140 | ||||||
TreeHouse Foods, Inc.* | 3,140 | 178,572 | ||||||
Total Consumer Staples | 362,712 | |||||||
Utilities - 1.7% | ||||||||
ITC Holdings Corp. | 2,270 | 158,673 | ||||||
NorthWestern Corp. | 5,050 | 153,015 | ||||||
Total Utilities | 311,688 | |||||||
Telecommunication Services - 1.1% | ||||||||
SBA Communications Corp. — Class A* | 5,000 | 198,400 | ||||||
Total Common Stocks (Cost$12,446,840) | 17,318,249 | |||||||
EXCHANGE TRADED FUND† - 5.0% | ||||||||
iShares Russell 2000 Growth Index Fund | 9,850 | 939,099 | ||||||
Total Exchange Traded Fund (Cost$916,447) | 939,099 | |||||||
Total Investments - 97.1% (Cost $13,363,287) | $ | 18,257,348 | ||||||
Cash & Other Assets, Less Liabilities - 2.9% | 544,914 | |||||||
Total Net Assets - 100.0% | $ | 18,802,262 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. |
ADR — American Depositary Receipt.
64 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund
Small Cap Growth Fund
Small Cap Growth Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 18,257,348 | ||
Total investments | 18,257,348 | |||
Cash | 1,477,766 | |||
Receivables: | ||||
Securities sold | 256,892 | |||
Fund shares sold | 27,153 | |||
Dividends | 3,099 | |||
Prepaid expenses | 23,464 | |||
Total assets | 20,045,722 | |||
Liabilities: | ||||
Payable for: | ||||
Securities purchased | 1,197,037 | |||
Fund shares redeemed | 1,775 | |||
Management fees | 12,385 | |||
Custodian fees | 2,060 | |||
Transfer agent/maintenance fees | 10,910 | |||
Distribution and service fees | 5,692 | |||
Portfolio accounting fees | 1,956 | |||
Professional fees | 6,208 | |||
Directors’ fees | 742 | |||
Legal fees | 288 | |||
Pricing fees | 952 | |||
Insurance | 110 | |||
Direct shareholders expense | 2,395 | |||
Corporate expenses | 950 | |||
Total liabilities | 1,243,460 | |||
Net assets | $ | 18,802,262 | ||
Net assets consist of: | ||||
Paid in capital | $ | 19,001,886 | ||
Accumulated net investment loss | (159,891 | ) | ||
Accumulated net realized loss on investments | (4,933,794 | ) | ||
Net unrealized appreciation in on investments | 4,894,061 | |||
Net assets | $ | 18,802,262 | ||
A-Class: | ||||
Net assets | $ | 15,467,625 | ||
Capital shares outstanding | 1,011,028 | |||
Net asset value per share | $ | 15.30 | ||
Maximum offering price per share** | $ | 16.06 | ||
B-Class: | ||||
Net assets | $ | 1,501,408 | ||
Capital shares outstanding | 111,170 | |||
Net asset value per share | $ | 13.51 | ||
C-Class: | ||||
Net assets | $ | 1,833,229 | ||
Capital shares outstanding | 133,180 | |||
Net asset value per share | $ | 13.77 | ||
* Investments, at cost | $ | 13,363,287 | ||
** Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends (net of foreign withholding tax of $103) | $ | 36,332 | ||
Interest | 24 | |||
Total investment income | 36,356 | |||
Expenses: | ||||
Management fees | 69,986 | |||
Transfer agent/maintenance fees | 50,340 | |||
Distribution and service fees: | ||||
A-Class | 16,679 | |||
B-Class | 7,338 | |||
C-Class | 8,282 | |||
Portfolio accounting fees | 13,336 | |||
Directors’ fees* | 830 | |||
Registration fees | 17,314 | |||
Miscellaneous | 12,142 | |||
Total expenses | 196,247 | |||
Net investment loss | (159,891 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 1,797,594 | |||
Net realized gain | 1,797,594 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 1,998,115 | |||
Net change in unrealized appreciation | 1,998,115 | |||
Net realized and unrealized gain | 3,795,709 | |||
Net increase in net assets resulting from operations | $ | 3,635,818 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 65 |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Small Cap Growth Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment loss | $ | (159,891 | ) | $ | (246,891 | ) | ||
Net realized gain on investments | 1,797,594 | 2,427,963 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 1,998,115 | (19,339 | ) | |||||
Net increase in net assets resulting from operations | 3,635,818 | 2,161,733 | ||||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 4,337,186 | 7,166,260 | ||||||
B-Class | 61,428 | 126,073 | ||||||
C-Class | 118,169 | 164,394 | ||||||
Cost of shares redeemed | ||||||||
A-Class | (3,673,756 | ) | (7,013,788 | ) | ||||
B-Class | (298,891 | ) | (691,365 | ) | ||||
C-Class | (142,695 | ) | (397,619 | ) | ||||
Net increase (decrease) from capital share transactions | 401,441 | (646,045 | ) | |||||
Net increase in net assets | 4,037,259 | 1,515,688 | ||||||
Net assets: | ||||||||
Beginning of period | 14,765,003 | 13,249,315 | ||||||
End of period | $ | 18,802,262 | $ | 14,765,003 | ||||
Accumulated net investment loss at end of period | $ | (159,891 | ) | $ | — | |||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class | 301,919 | 641,027 | ||||||
B-Class | 4,990 | 12,444 | ||||||
C-Class | 9,201 | 16,059 | ||||||
Shares redeemed | ||||||||
A-Class | (258,105 | ) | (617,198 | ) | ||||
B-Class | (24,545 | ) | (69,069 | ) | ||||
C-Class | (11,509 | ) | (38,473 | ) | ||||
Net increase (decrease) in shares | 21,951 | (55,210 | ) | |||||
66 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Small Cap Growth Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.25 | $ | 10.56 | $ | 11.43 | $ | 18.53 | $ | 15.63 | $ | 15.76 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.12 | ) | (0.18 | ) | (0.18 | ) | (0.24 | ) | (0.23 | ) | (0.23 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 3.17 | 1.87 | (0.63 | ) | (5.55 | ) | 3.13 | 0.10 | ||||||||||||||||
Total from investment operations | 3.05 | 1.69 | (0.81 | ) | (5.79 | ) | 2.90 | (0.13 | ) | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.06 | ) | (1.31 | ) | — | — | ||||||||||||||||
Total distributions | — | — | (0.06 | ) | (1.31 | ) | — | — | ||||||||||||||||
Net asset value, end of period | $ | 15.30 | $ | 12.25 | $ | 10.56 | $ | 11.43 | $ | 18.53 | $ | 15.63 | ||||||||||||
Total Returnc | 24.90 | % | 16.00 | % | (6.89 | %) | (33.25 | %) | 18.55 | % | (0.82 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 15,468 | $ | 11,847 | $ | 9,966 | $ | 12,414 | $ | 45,430 | $ | 45,451 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.80 | %) | (1.55 | %) | (2.04 | %) | (1.59 | %) | (1.32 | %) | (1.46 | %) | ||||||||||||
Total expensesd | 2.24 | % | 2.26 | % | 2.67 | % | 1.98 | % | 1.80 | % | 2.01 | % | ||||||||||||
Net expensese | 2.24 | % | 2.26 | % | 2.60 | % | 1.98 | % | 1.80 | % | 2.01 | % | ||||||||||||
Portfolio turnover rate | 50 | % | 112 | % | 200 | % | 169 | % | 145 | % | 136 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.85 | $ | 9.43 | $ | 10.28 | $ | 16.92 | $ | 14.38 | $ | 14.60 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.16 | ) | (0.23 | ) | (0.21 | ) | (0.32 | ) | (0.33 | ) | (0.36 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 2.82 | 1.65 | (0.58 | ) | (5.01 | ) | 2.87 | 0.14 | ||||||||||||||||
Total from investment operations | 2.66 | 1.42 | (0.79 | ) | (5.33 | ) | 2.54 | (0.22 | ) | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.06 | ) | (1.31 | ) | — | — | ||||||||||||||||
Total distributions | — | — | (0.06 | ) | (1.31 | ) | — | — | ||||||||||||||||
Net asset value, end of period | $ | 13.51 | $ | 10.85 | $ | 9.43 | $ | 10.28 | $ | 16.92 | $ | 14.38 | ||||||||||||
Total Returnc | 24.52 | % | 15.06 | % | (7.47 | %) | (33.72 | %) | 17.66 | % | (1.51 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,501 | $ | 1,419 | $ | 1,766 | $ | 2,675 | $ | 5,792 | $ | 5,919 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.56 | %) | (2.30 | %) | (2.77 | %) | (2.42 | %) | (2.07 | %) | (2.31 | %) | ||||||||||||
Total expensesd | 3.00 | % | 3.02 | % | 3.41 | % | 2.82 | % | 2.56 | % | 2.79 | % | ||||||||||||
Net expensese | 3.00 | % | 3.02 | % | 3.33 | % | 2.82 | % | 2.56 | % | 2.79 | % | ||||||||||||
Portfolio turnover rate | 50 | % | 112 | % | 200 | % | 169 | % | 145 | % | 136 | % |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 67 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Small Cap Growth Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011a | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 11.06 | $ | 9.61 | $ | 10.48 | $ | 17.23 | $ | 14.64 | $ | 14.88 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.16 | ) | (0.24 | ) | (0.22 | ) | (0.33 | ) | (0.33 | ) | (0.35 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 2.87 | 1.69 | (0.59 | ) | (5.11 | ) | 2.92 | 0.11 | ||||||||||||||||
Total from investment operations | 2.71 | 1.45 | (0.81 | ) | (5.44 | ) | 2.59 | (0.24 | ) | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.06 | ) | (1.31 | ) | — | — | ||||||||||||||||
Total distributions | — | — | (0.06 | ) | (1.31 | ) | — | — | ||||||||||||||||
Net asset value, end of period | $ | 13.77 | $ | 11.06 | $ | 9.61 | $ | 10.48 | $ | 17.23 | $ | 14.64 | ||||||||||||
Total Returnc | 24.50 | % | 15.09 | % | (7.51 | %) | (33.76 | %) | 17.69 | % | (1.61 | %) | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,833 | $ | 1,499 | $ | 1,518 | $ | 2,318 | $ | 3,964 | $ | 4,304 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (2.56 | %) | (2.31 | %) | (2.77 | %) | (2.43 | %) | (2.07 | %) | (2.29 | %) | ||||||||||||
Total expensesd | 3.00 | % | 3.02 | % | 3.40 | % | 2.83 | % | 2.56 | % | 2.79 | % | ||||||||||||
Net expensese | 3.00 | % | 3.02 | % | 3.33 | % | 2.83 | % | 2.56 | % | 2.79 | % | ||||||||||||
Portfolio turnover rate | 50 | % | 112 | % | 200 | % | 169 | % | 145 | % | 136 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Total expense information reflects expense ratios absent expense reductions by the Investment Manager, as applicable. | |
e | Net expense information reflects the expense ratios after voluntary expense waivers and reimbursements and before custodian earnings credits, as applicable. |
68 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
PERFORMANCE
![(PERFORMANCE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211914.gif)
$10,000 Since Inception
This chart assumes a $10,000 investment in A-Class shares of Small Cap Value Fund on July 11, 2008 (date of inception), reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 2000® Value Index is an unmanaged index that measures the performance of securities of small to mid cap U.S. companies with lower price-to-book ratios and lower forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
SINCE | ||||||||
INCEPTION | ||||||||
1 YEAR | (07/11/08) | |||||||
A-Class Shares | 26.02 | % | 28.39 | % | ||||
A-Class Shares with sales charge | 18.79 | % | 25.63 | % | ||||
C-Class Shares | 24.98 | % | 27.49 | % | ||||
C-Class Shares with CDSC | 23.98 | % | 27.49 | % | ||||
Institutional Class Shares | 26.26 | % | 28.67 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Industrials | 19.2 | % | ||
Energy | 15.7 | % | ||
Information Technology | 13.5 | % | ||
Consumer Discretionary | 13.4 | % | ||
Financials | 13.2 | % | ||
Materials | 9.1 | % | ||
Health Care | 3.5 | % | ||
Consumer Staples | 3.1 | % | ||
Utilities | 0.4 | % | ||
Exchange Traded Funds | 3.2 | % | ||
Warrants | 0.1 | % | ||
Cash & Other Assets, Less Liabilities | 5.6 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 69
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Equity Fund | |
March 31, 2011 | Small Cap Value Fund |
Shares | Value | |||||||
COMMON STOCKS† - 91.1% | ||||||||
Industrials - 19.2% | ||||||||
GeoEye, Inc.* | 6,690 | $ | 278,170 | |||||
Insituform Technologies, Inc. — Class A* | 7,490 | 200,357 | ||||||
Force Protection, Inc.* | 37,390 | 183,211 | ||||||
General Cable Corp.*,1 | 3,900 | 168,870 | ||||||
EnergySolutions, Inc. | 27,458 | 163,650 | ||||||
Orbital Sciences Corp.* | 7,746 | 146,554 | ||||||
FTI Consulting, Inc.* | 3,780 | 144,887 | ||||||
Saia, Inc.* | 8,090 | 132,595 | ||||||
LaBarge, Inc.* | 7,470 | 132,219 | ||||||
ICF International, Inc.* | 6,240 | 128,170 | ||||||
Celadon Group, Inc.* | 7,392 | 120,046 | ||||||
Ameron International Corp. | 1,720 | 120,039 | ||||||
Ceradyne, Inc.* | 2,400 | 108,192 | ||||||
Navigant Consulting, Inc.* | 10,820 | 108,092 | ||||||
Insperity, Inc. | 2,665 | 80,963 | ||||||
Flow International Corp.* | 14,718 | 64,612 | ||||||
Great Lakes Dredge & Dock Corp. | 6,030 | 46,009 | ||||||
United Stationers, Inc. | 491 | 34,885 | ||||||
Apogee Enterprises, Inc. | 1,561 | 20,590 | ||||||
Total Industrials | 2,382,111 | |||||||
Energy - 15.7% | ||||||||
Global Industries Ltd.* | 35,972 | 352,166 | ||||||
Tesco Corp.* | 14,410 | 316,300 | ||||||
Gulfport Energy Corp.* | 6,885 | 248,893 | ||||||
Southern Union Co.1 | 8,410 | 240,694 | ||||||
Parker Drilling Co.* | 33,520 | 231,623 | ||||||
Kodiak Oil & Gas Corp.*,1 | 26,530 | 177,751 | ||||||
Goodrich Petroleum Corp.* | 5,514 | 122,521 | ||||||
Petroleum Development Corp.* | 2,520 | 120,985 | ||||||
USEC, Inc.* | 22,520 | 99,088 | ||||||
Resolute Energy Corp.* | 1,884 | 34,176 | ||||||
Total Energy | 1,944,197 | |||||||
Information Technology - 13.5% | ||||||||
Standard Microsystems Corp.* | 9,713 | 239,522 | ||||||
IXYS Corp.* | 16,810 | 225,758 | ||||||
Maxwell Technologies, Inc.* | 12,470 | 215,357 | ||||||
Insight Enterprises, Inc.* | 10,090 | 171,833 | ||||||
Global Cash Access Holdings, Inc.* | 45,160 | 147,673 | ||||||
Power-One, Inc.*,1 | 15,363 | 134,426 | ||||||
Harmonic, Inc.* | 14,170 | 132,915 | ||||||
Satyam Computer Services Ltd. ADR* | 34,208 | 103,308 | ||||||
Euronet Worldwide, Inc.* | 4,960 | 95,877 | ||||||
Perficient, Inc.* | 6,110 | 73,381 | ||||||
Methode Electronics, Inc. | 5,924 | 71,562 | ||||||
Symmetricom, Inc.* | 10,160 | 62,281 | ||||||
Total Information Technology | 1,673,893 | |||||||
Consumer Discretionary - 13.4% | ||||||||
Cabela’s, Inc.* | 10,699 | 267,582 | ||||||
Chico’s FAS, Inc. | 16,280 | 242,572 | ||||||
International Speedway Corp. — Class A | 6,360 | 189,528 | ||||||
DeVry, Inc. | 3,150 | 173,471 | ||||||
Smith & Wesson Holding Corp.* | 44,430 | 157,727 | ||||||
Maidenform Brands, Inc.* | 5,050 | 144,278 | ||||||
Penn National Gaming, Inc.* | 3,520 | 130,451 | ||||||
Brown Shoe Company, Inc. | 9,584 | 117,116 | ||||||
MDC Partners, Inc. — Class A | 6,339 | 106,305 | ||||||
Scholastic Corp. | 2,870 | 77,605 | ||||||
Hanesbrands, Inc.* | 960 | 25,958 | ||||||
Fred’s, Inc. — Class A | 1,900 | 25,308 | ||||||
Total Consumer Discretionary | 1,657,901 | |||||||
Financials - 13.2% | ||||||||
Hanover Insurance Group, Inc. | 6,190 | 280,098 | ||||||
Horace Mann Educators Corp. | 12,840 | 215,712 | ||||||
Transatlantic Holdings, Inc. | 3,675 | 178,862 | ||||||
Reinsurance Group of America, Inc. — Class A | 2,340 | 146,905 | ||||||
1st Source Corp. | 6,420 | 128,657 | ||||||
Fifth Street Finance Corp. | 8,140 | 108,669 | ||||||
Old National Bancorp | 7,499 | 80,389 | ||||||
Solar Senior Capital, Ltd.* | 4,216 | 78,544 | ||||||
Lexington Realty Trust | 8,370 | 78,260 | ||||||
Heritage Financial Corp.* | 5,390 | 76,376 | ||||||
Employers Holdings, Inc. | 3,200 | 66,112 | ||||||
Bancfirst Corp. | 1,394 | 59,496 | ||||||
First Marblehead Corp.* | 24,251 | 53,352 | ||||||
First Horizon National Corp. | 4,266 | 47,821 | ||||||
Redwood Trust, Inc. | 2,430 | 37,787 | ||||||
Total Financials | 1,637,040 | |||||||
Materials - 9.1% | ||||||||
Louisiana-Pacific Corp.* | 26,340 | 276,570 | ||||||
LSB Industries, Inc.* | 5,450 | 216,038 | ||||||
Myers Industries, Inc. | 18,410 | 182,811 | ||||||
Zoltek Companies, Inc.* | 11,440 | 153,639 | ||||||
A. Schulman, Inc. | 5,130 | 126,814 | ||||||
Landec Corp.* | 16,883 | 109,740 | ||||||
HB Fuller Co. | 3,027 | 65,020 | ||||||
Total Materials | 1,130,632 | |||||||
Health Care - 3.5% | ||||||||
ICU Medical, Inc.* | 4,210 | 184,314 | ||||||
RehabCare Group, Inc.* | 4,160 | 153,379 | ||||||
Mednax, Inc.* | 1,540 | 102,580 | ||||||
Total Health Care | 440,273 | |||||||
Consumer Staples - 3.1% | ||||||||
Spartan Stores, Inc. | 7,370 | 109,002 | ||||||
Smart Balance, Inc.* | 21,240 | 97,492 | ||||||
Orchids Paper Products Co. | 7,864 | 95,154 | ||||||
Winn-Dixie Stores, Inc.* | 11,870 | 84,752 | ||||||
Total Consumer Staples | 386,400 | |||||||
70 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | Rydex|SGI Equity Fund | |
March 31, 2011 | Small Cap Value Fund |
Shares | Value | |||||||
Utilities - 0.4% | ||||||||
MDU Resources Group, Inc. | 2,156 | $ | 49,523 | |||||
Total Common Stocks (Cost $9,226,215) | 11,301,970 | |||||||
CONVERTIBLE PREFERRED STOCK†† - 0.0% | ||||||||
Thermoenergy Corp.*,2,3 | 6,250 | 4,015 | ||||||
Total Convertible Preferred Stock (Cost $5,968) | 4,015 | |||||||
WARRANT†† - 0.1% | ||||||||
Industrials - 0.1% | ||||||||
Thermoenergy Corp. $0.30, 07/31/152 | 100,000 | 5,160 | ||||||
Total Warrant (Cost $9,032) | 5,160 | |||||||
EXCHANGE TRADED FUNDS† - 3.2% | ||||||||
iShares Russell 2000 Value Index Fund | 2,900 | 218,602 | ||||||
iShares S&P SmallCap 600 Value Index Fund | 2,300 | 175,306 | ||||||
Total Exchange Traded Funds (Cost $381,066) | 393,908 | |||||||
Total Long Investments - 94.4% (Cost $9,622,281) | $ | 11,705,053 | ||||||
Contracts | ||||||||
OPTIONS WRITTEN† - (0.1)% | ||||||||
Call Options on: | ||||||||
Power-One, Inc. Expiring April 2011 with strike price of $13.00 | 26 | (130 | ) | |||||
General Cable Corp. Expiring May 2011 with strike price of $50.00 | 10 | (250 | ) | |||||
Kodiak Oil & Gas Corp. Expiring June 2011 with strike price of $7.50 | 76 | (4,180 | ) | |||||
Total Options Written (Premiums received $9,100) | (4,560 | ) | ||||||
Cash & Other Assets, Less Liabilities - 5.7% | 703,004 | |||||||
Total Net Assets - 100.0% | $ | 12,403,497 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
1 | All or a portion of this security is pledged as collateral for open written option contracts at March 31, 2011. | |
2 | All or a portion of this security was fair valued by the Valuation Committee at March 31, 2011. The total market value of fair valued securities amounts to $9,175 (cost $15,000), or 0.1% of total net assets. | |
3 | PIPE (Private Investment in Public Equity) — Stock issued by a company in the secondary market as a means of raising capital more quickly and less expensively than through registration of a secondary public offering. | |
ADR — American Depositary Receipt. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 71 |
Table of Contents
Rydex|SGI Equity Fund
Small Cap Value Fund
Small Cap Value Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 11,705,053 | ||
Total investments | 11,705,053 | |||
Cash | 670,859 | |||
Receivables: | ||||
Securities sold | 85,604 | |||
Fund shares sold | 23,225 | |||
Dividends | 7,149 | |||
Prepaid expenses | 26,983 | |||
Total assets | 12,518,873 | |||
Liabilities: | ||||
Written options, at value** | 4,560 | |||
Payable for: | ||||
Securities purchased | 67,225 | |||
Fund shares redeemed | 11,067 | |||
Management fees | 9,905 | |||
Custodian fees | 1,684 | |||
Transfer agent/maintenance fees | 2,653 | |||
Distribution and service fees | 3,811 | |||
Portfolio accounting fees | 1,856 | |||
Professional fees | 4,948 | |||
Directors’ fees | 506 | |||
Legal fees | 891 | |||
Pricing fees | 695 | |||
Direct shareholders expense | 3,521 | |||
Corporate expenses | 2,054 | |||
Total liabilities | 115,376 | |||
Net assets | $ | 12,403,497 | ||
Net assets consist of: | ||||
Paid in capital | 10,473,890 | |||
Accumulated net investment loss | (34,480 | ) | ||
Accumulated net realized loss on investments | (123,225 | ) | ||
Net unrealized appreciation in on investments | 2,087,312 | |||
Net assets | 12,403,497 | |||
A-Class: | ||||
Net assets | $ | 8,809,826 | ||
Capital shares outstanding | 564,101 | |||
Net asset value per share | $ | 15.62 | ||
Maximum offering price per share*** | $ | 16.40 | ||
C-Class: | ||||
Net assets | $ | 2,671,082 | ||
Capital shares outstanding | 174,793 | |||
Net asset value per share | $ | 15.28 | ||
Institutional Class: | ||||
Net assets | $ | 922,589 | ||
Capital shares outstanding | 58,636 | |||
Net asset value per share | $ | 15.73 | ||
* Investments, at cost | $ | 9,622,281 | ||
** Premiums received for written options | $ | 9,100 | ||
*** Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends (net of foreign withholding tax of $256) | $ | 36,690 | ||
Interest | 19 | |||
Total investment income | 36,709 | |||
Expenses: | ||||
Management fees | 50,106 | |||
Transfer agent/maintenance fees | 14,062 | |||
Distribution and service fees: | ||||
A-Class | 9,176 | |||
C-Class | 9,402 | |||
Portfolio accounting fees | 13,760 | |||
Directors’ fees* | 541 | |||
Registration fees | 16,280 | |||
Miscellaneous | 14,647 | |||
Total expenses | 127,974 | |||
Expenses waived by Advisor | (56,785 | ) | ||
Net expenses | 71,189 | |||
Net investment loss | (34,480 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 448,510 | |||
Options written | 2,807 | |||
Net realized gain | 451,317 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 1,739,424 | |||
Options written | 3,914 | |||
Net change in unrealized appreciation | 1,743,338 | |||
Net realized and unrealized gain | 2,194,655 | |||
Net Increase in net assets resulting from operations | $ | 2,160,175 | ||
* | Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
72 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Small Cap Value Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment loss | $ | (34,480 | ) | $ | (32,326 | ) | ||
Net realized gain on investments | 451,317 | 720,272 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 1,743,338 | (376,988 | ) | |||||
Net increase in net assets resulting from operations | 2,160,175 | 310,958 | ||||||
Distributions to shareholders from: | ||||||||
Net realized gains | ||||||||
A-Class | (891,554 | ) | (152,192 | ) | ||||
C-Class | (220,130 | ) | (21,874 | ) | ||||
Institutional Class | (91,413 | ) | (21,435 | ) | ||||
Total distributions to shareholders | (1,203,097 | ) | (195,501 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 1,945,871 | 12,456,244 | ||||||
C-Class | 1,028,933 | 692,236 | ||||||
Institutional Class | 166,264 | 157,271 | ||||||
Distributions reinvested | ||||||||
A-Class | 869,510 | 150,268 | ||||||
C-Class | 203,353 | 21,874 | ||||||
Institutional Class | 73,422 | 13,598 | ||||||
Cost of shares redeemed | ||||||||
A-Class | (911,300 | ) | (9,619,034 | ) | ||||
C-Class | (94,016 | ) | (143,145 | ) | ||||
Institutional Class | (132,167 | ) | (131,908 | ) | ||||
Net increase from capital share transactions | 3,149,870 | 3,597,404 | ||||||
Net increase in net assets | 4,106,948 | 3,712,861 | ||||||
Net assets: | ||||||||
Beginning of period | 8,296,549 | 4,583,688 | ||||||
End of period | $ | 12,403,497 | $ | 8,296,549 | ||||
Accumulated net investment loss at end of period | $ | (34,480 | ) | $ | — | |||
Capital share activity: | ||||||||
Shares sold | ||||||||
A-Class | 132,252 | 911,652 | ||||||
C-Class | 70,656 | 51,089 | ||||||
Institutional Class | 11,371 | 11,908 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 61,536 | 11,497 | ||||||
C-Class | 14,672 | 1,693 | ||||||
Institutional Class | 5,160 | 1,036 | ||||||
Shares redeemed | ||||||||
A-Class | (62,219 | ) | (735,798 | ) | ||||
C-Class | (6,276 | ) | (11,124 | ) | ||||
Institutional Class | (8,776 | ) | (9,494 | ) | ||||
Net increase in shares | 218,376 | 232,459 | ||||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 73 |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS | Small Cap Value Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Period Ended | |||||||||||||
March 31, | September 30, | September 30, | September 30, | |||||||||||||
A-Class | 2011 | a | 2010 | 2009 | 2008 | a,b | ||||||||||
Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ | 14.35 | $ | 13.24 | $ | 11.48 | $ | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment lossc | (0.04 | ) | (0.05 | ) | (0.05 | ) | — | d | ||||||||
Net gain on investments (realized and unrealized) | 3.30 | 1.54 | 2.44 | 1.48 | ||||||||||||
Total from investment operations | 3.26 | 1.49 | 2.39 | 1.48 | ||||||||||||
Less distributions from: | ||||||||||||||||
Net realized gains | (1.99 | ) | (0.38 | ) | (0.63 | ) | — | |||||||||
Total distributions | (1.99 | ) | (0.38 | ) | (0.63 | ) | — | |||||||||
Net asset value, end of period | $ | 15.62 | $ | 14.35 | $ | 13.24 | $ | 11.48 | ||||||||
Total Returne | 24.17 | % | 11.53 | % | 24.15 | % | 14.80 | % | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 8,810 | $ | 6,209 | $ | 3,245 | $ | 400 | ||||||||
Ratios to average net assets: | ||||||||||||||||
Net investment loss | (0.57 | %) | (0.34 | %) | (0.46 | %) | (0.19 | %) | ||||||||
Total expensesf | 2.43 | % | 2.45 | % | 4.92 | % | 6.10 | % | ||||||||
Net expensesg | 1.30 | % | 1.30 | % | 1.55 | % | 1.55 | % | ||||||||
Portfolio turnover rate | 20 | % | 140 | % | 58 | % | 86 | % |
Period Ended | Year Ended | Year Ended | Period Ended | |||||||||||||
March 31, | September 30, | September 30, | September 30, | |||||||||||||
C-Class | 2011 | a | 2010 | 2009 | 2008 | a,b | ||||||||||
Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ | 14.13 | $ | 13.11 | $ | 11.46 | $ | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment lossc | (0.09 | ) | (0.15 | ) | (0.11 | ) | (0.02 | ) | ||||||||
Net gain on investments (realized and unrealized) | 3.23 | 1.55 | 2.39 | 1.48 | ||||||||||||
Total from investment operations | 3.14 | 1.40 | 2.28 | 1.46 | ||||||||||||
Less distributions from: | ||||||||||||||||
Net realized gains | (1.99 | ) | (0.38 | ) | (0.63 | ) | — | |||||||||
Total distributions | (1.99 | ) | (0.38 | ) | (0.63 | ) | — | |||||||||
Net asset value, end of period | $ | 15.28 | $ | 14.13 | $ | 13.11 | $ | 11.46 | ||||||||
Total Returne | 23.66 | % | 10.94 | % | 23.16 | % | 14.60 | % | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,671 | $ | 1,353 | $ | 709 | $ | 391 | ||||||||
Ratios to average net assets: | ||||||||||||||||
Net investment loss | (1.31 | %) | (1.09 | %) | (1.15 | %) | (0.94 | %) | ||||||||
Total expensesf | 3.18 | % | 3.22 | % | 6.40 | % | 6.88 | % | ||||||||
Net expensesg | 2.05 | % | 2.05 | % | 2.30 | % | 2.30 | % | ||||||||
Portfolio turnover rate | 20 | % | 140 | % | 58 | % | 86 | % |
74 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Equity Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Small Cap Value Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Period Ended | |||||||||||||
March 31, | September 30, | September 30, | September 30, | |||||||||||||
Institutional Class | 2011 | a | 2010 | 2009 | 2008 | a,b | ||||||||||
Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ | 14.43 | $ | 13.28 | $ | 11.49 | $ | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment lossc | (0.02 | ) | (0.01 | ) | (0.01 | ) | — | d | ||||||||
Net gain on investments (realized and unrealized) | 3.31 | 1.54 | 2.43 | 1.49 | ||||||||||||
Total from investment operations | 3.29 | 1.53 | 2.42 | 1.49 | ||||||||||||
Less distributions from: | ||||||||||||||||
Net realized gains | (1.99 | ) | (0.38 | ) | (0.63 | ) | — | |||||||||
Total distributions | (1.99 | ) | (0.38 | ) | (0.63 | ) | — | |||||||||
Net asset value, end of period | $ | 15.73 | $ | 14.43 | $ | 13.28 | $ | 11.49 | ||||||||
Total Returne | 24.25 | % | 11.80 | % | 24.40 | % | 14.90 | % | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 923 | $ | 734 | $ | 630 | $ | 383 | ||||||||
Ratios to average net assets: | ||||||||||||||||
Net investment income (loss) | (0.33 | %) | (0.08 | %) | (0.14 | %) | 0.06 | % | ||||||||
Total expensesf | 2.19 | % | 2.21 | % | 5.44 | % | 5.90 | % | ||||||||
Net expensesg | 1.05 | % | 1.05 | % | 1.30 | % | 1.30 | % | ||||||||
Portfolio turnover rate | 20 | % | 140 | % | 58 | % | 86 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Since commencement of operations: July 11, 2008 — Small Cap Value Fund | |
c | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
d | Net investment income is less than $0.01 per share. | |
e | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
f | Total expense information reflects expense ratios absent expense reductions by the Investment Manager, as applicable. | |
g | Net expense information reflects the expense ratios after voluntary expense waivers and reimbursements and before earnings credits, as applicable. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 75 |
Table of Contents
PERFORMANCE
![(PERFORMANCE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211915.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Large Cap Value Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 1000® Value Index is an unmanaged index representing the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 13.71 | % | 2.67 | % | 3.67 | % | ||||||
A-Class Shares with sales charge | 7.15 | % | 1.46 | % | 3.06 | % | ||||||
B-Class Shares | 13.81 | % | 2.50 | % | 3.14 | % | ||||||
B-Class Shares with CDSC | 8.81 | % | 2.13 | % | 3.14 | % | ||||||
C-Class Shares | 12.79 | % | 1.76 | % | 2.80 | % | ||||||
C-Class Shares with CDSC | 11.79 | % | 1.76 | % | 2.80 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Energy | 17.7 | % | ||
Financials | 17.1 | % | ||
Industrials | 12.4 | % | ||
Information Technology | 11.7 | % | ||
Consumer Staples | 9.9 | % | ||
Health Care | 9.6 | % | ||
Consumer Discretionary | 7.2 | % | ||
Materials | 3.9 | % | ||
Utilities | 3.0 | % | ||
Telecommunication Services | 1.2 | % | ||
Exchange Traded Funds | 1.5 | % | ||
Cash & Other Assets, Less Liabilities | 4.8 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
76 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI Large Cap Value Fund | |
March 31, 2011 | Large Cap Value Fund |
Shares | Value | |||||||
COMMON STOCKS† - 93.7% | ||||||||
Energy - 17.7% | ||||||||
McDermott International, Inc.* | 77,600 | $ | 1,970,264 | |||||
Chevron Corp. | 17,760 | 1,907,957 | ||||||
Williams Companies, Inc. | 56,000 | 1,746,080 | ||||||
Exxon Mobil Corp. | 12,800 | 1,076,864 | ||||||
Halliburton Co. | 18,200 | 907,088 | ||||||
ConocoPhillips | 11,000 | 878,460 | ||||||
Apache Corp. | 6,500 | 850,980 | ||||||
Chesapeake Energy Corp. | 20,200 | 677,104 | ||||||
Total Energy | 10,014,797 | |||||||
Financials - 17.1% | ||||||||
AON Corp. | 37,400 | 1,980,704 | ||||||
Wells Fargo & Co. | 56,952 | 1,805,378 | ||||||
U.S. Bancorp | 61,332 | 1,621,005 | ||||||
Berkshire Hathaway, Inc. — Class A* | 10 | 1,253,000 | ||||||
Bank of New York Mellon Corp. | 39,500 | 1,179,865 | ||||||
JPMorgan Chase & Co. | 22,963 | 1,058,594 | ||||||
BB&T Corp. | 23,432 | 643,209 | ||||||
First Marblehead Corp.* | 74,421 | 163,726 | ||||||
Total Financials | 9,705,481 | |||||||
Industrials - 12.4% | ||||||||
Equifax, Inc. | 61,600 | 2,393,160 | ||||||
United Technologies Corp. | 16,700 | 1,413,655 | ||||||
Babcock & Wilcox Co.* | 41,800 | 1,395,284 | ||||||
USG Corp.* | 42,300 | 704,718 | ||||||
Parker Hannifin Corp. | 6,200 | 587,016 | ||||||
FedEx Corp. | 5,800 | 542,590 | ||||||
Total Industrials | 7,036,423 | |||||||
Information Technology - 11.7% | ||||||||
Western Union Co. | 88,600 | 1,840,222 | ||||||
TE Connectivity, Ltd. | 41,450 | 1,443,289 | ||||||
Computer Sciences Corp. | 28,500 | 1,388,805 | ||||||
Hewlett-Packard Co. | 28,341 | 1,161,131 | ||||||
Visa, Inc. — Class A | 7,400 | 544,788 | ||||||
Synopsys, Inc.* | 9,800 | 270,970 | ||||||
Total Information Technology | 6,649,205 | |||||||
Consumer Staples - 9.9% | ||||||||
CVS Caremark Corp. | 38,600 | 1,324,752 | ||||||
Wal-Mart Stores, Inc. | 24,400 | 1,270,020 | ||||||
Costco Wholesale Corp. | 13,200 | 967,824 | ||||||
Bunge Ltd. | 10,800 | 781,164 | ||||||
Kraft Foods, Inc. — Class A | 24,700 | 774,592 | ||||||
Altria Group, Inc. | 20,100 | 523,203 | ||||||
Total Consumer Staples | 5,641,555 | |||||||
Health Care - 9.6% | ||||||||
Aetna, Inc. | 42,400 | 1,587,032 | ||||||
Hospira, Inc.* | 24,200 | 1,335,840 | ||||||
Covidien plc | 20,650 | 1,072,561 | ||||||
Forest Laboratories, Inc.* | 21,400 | 691,220 | ||||||
Medco Health Solutions, Inc.* | 8,100 | 454,896 | ||||||
Merck & Company, Inc. | 9,919 | 327,426 | ||||||
Total Health Care | 5,468,975 | |||||||
Consumer Discretionary - 7.2% | ||||||||
Lowe’s Companies, Inc. | 75,300 | 1,990,179 | ||||||
Time Warner, Inc. | 39,800 | 1,420,860 | ||||||
Best Buy Company, Inc. | 16,100 | 462,392 | ||||||
JC Penney Company, Inc. | 5,900 | 211,869 | ||||||
Total Consumer Discretionary | 4,085,300 | |||||||
Materials - 3.9% | ||||||||
Dow Chemical Co. | 35,900 | 1,355,225 | ||||||
Bemis Company, Inc. | 25,500 | 836,655 | ||||||
Total Materials | 2,191,880 | |||||||
Utilities - 3.0% | ||||||||
Edison International | 37,800 | 1,383,102 | ||||||
NRG Energy, Inc.* | 14,300 | 308,022 | ||||||
Total Utilities | 1,691,124 | |||||||
Telecommunication Services - 1.2% | ||||||||
Windstream Corp. | 54,376 | 699,819 | ||||||
Total Common Stocks | ||||||||
(Cost $44,047,940) | 53,184,559 | |||||||
EXCHANGE TRADED FUNDS† - 1.5% | ||||||||
iShares Russell 1000 Value Index Fund | 6,200 | 425,754 | ||||||
iShares S&P 500 Value Index Fund | 6,700 | 424,177 | ||||||
Total Exchange Traded Funds | ||||||||
(Cost $825,017) | 849,931 | |||||||
Total Investments - 95.2% | ||||||||
(Cost $44,872,957) | $ | 54,034,490 | ||||||
Cash & Other Assets, Less Liabilities - 4.8% | 2,723,527 | |||||||
Total Net Assets - 100.0% | $ | 56,758,017 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
plc — Public Limited Company. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 77 |
Table of Contents
Rydex|SGI Large Cap Value Fund
Large Cap Value Fund
Large Cap Value Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 54,034,490 | ||
Total investments | 54,034,490 | |||
Cash | 2,682,382 | |||
Receivables: | ||||
Fund shares sold | 24,731 | |||
Dividends | 76,396 | |||
Prepaid expenses | 63,330 | |||
Total assets | 56,881,329 | |||
Liabilities: | ||||
Payable for: | ||||
Fund shares redeemed | 9,756 | |||
Management fees | 30,952 | |||
Transfer agent/maintenance fees | 12,082 | |||
Distribution and service fees | 12,992 | |||
Portfolio accounting fees | 4,524 | |||
Professional fees | 5,747 | |||
Directors’ fees | 3,430 | |||
Legal fees | 204 | |||
Pricing fees | 48 | |||
Direct shareholders expense | 8,296 | |||
Corporate expenses | 35,281 | |||
Total liabilities | 123,312 | |||
Net assets | $ | 56,758,017 | ||
Net assets consist of: | ||||
Paid in capital | $ | 62,906,876 | ||
Undistributed net investment income | 89,932 | |||
Accumulated net realized loss on investments | (15,400,324 | ) | ||
Net unrealized appreciation in on investments | 9,161,533 | |||
Net assets | $ | 56,758,017 | ||
A-Class: | ||||
Net assets | $ | 50,495,549 | ||
Capital shares outstanding1 | 1,624,767 | |||
Net asset value per share1 | $ | 31.08 | ||
Maximum offering price per share**1 | $ | 32.63 | ||
B-Class: | ||||
Net assets | $ | 3,400,626 | ||
Capital shares outstanding1 | 118,341 | |||
Net asset value per share1 | $ | 28.74 | ||
C-Class: | ||||
Net assets | $ | 2,861,842 | ||
Capital shares outstanding1 | 97,697 | |||
Net asset value per share1 | $ | 29.29 | ||
* Investments, at cost | $ | 44,872,957 | ||
1 The shares outstanding, net asset value per share and the maximum offering price per share have been restated to reflect a 1-for-4 reverse share split effective April 8, 2011. See Note 12 in Notes to Financial Statements. | ||||
** Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 427,945 | ||
Interest | 311 | |||
Total investment income | 428,256 | |||
Expenses: | ||||
Management fees | 179,996 | |||
Transfer agent/maintenance fees | 102,418 | |||
Distribution and service fees: | ||||
A-Class | 61,163 | |||
C-Class | 13,584 | |||
Portfolio accounting fees | 26,307 | |||
Directors’ fees* | 2,770 | |||
Corporate fees | 32,737 | |||
Miscellaneous | 58,570 | |||
Total expenses | 477,545 | |||
Expenses waived by Advisor | (153,571 | ) | ||
Net expenses | 323,974 | |||
Net investment income | 104,282 | |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 1,934,239 | |||
Net realized gain | 1,934,239 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 7,903,985 | |||
Options written | (7,916 | ) | ||
Net change in unrealized appreciation | 7,896,069 | |||
Net realized and unrealized gain | 9,830,308 | |||
Net increase in net assets resulting from operations | $ | 9,934,590 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
78 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Large Cap Value Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Large Cap Value Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income | $ | 104,282 | $ | 222,061 | ||||
Net realized gain (loss) on investments | 1,934,239 | (587,262 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments | 7,896,069 | 3,655,422 | ||||||
Net increase in net assets resulting from operations | 9,934,590 | 3,290,221 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | ||||||||
A-Class | (200,254 | ) | (355,258 | ) | ||||
B-Class | (26,785 | ) | (50,199 | ) | ||||
Total distributions to shareholders | (227,039 | ) | (405,457 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 5,985,598 | 23,964,177 | ||||||
B-Class | 140,807 | 1,414,615 | ||||||
C-Class | 422,829 | 289,639 | ||||||
Distributions reinvested | ||||||||
A-Class | 192,036 | 337,049 | ||||||
B-Class | 26,436 | 49,907 | ||||||
Cost of shares redeemed | ||||||||
A-Class | (11,974,232 | ) | (17,125,261 | ) | ||||
B-Class | (1,559,582 | ) | (2,349,156 | ) | ||||
C-Class | (526,635 | ) | (1,060,910 | ) | ||||
Net increase (decrease) from capital share transactions | (7,292,743 | ) | 5,520,060 | |||||
Net increase in net assets | 2,414,808 | 8,404,824 | ||||||
Net assets: | ||||||||
Beginning of period | 54,343,209 | 45,938,385 | ||||||
End of period | $ | 56,758,017 | $ | 54,343,209 | ||||
Undistributed net investment income at end of period | $ | 89,932 | $ | 212,689 | ||||
Capital share activity:1 | ||||||||
Shares sold | ||||||||
A-Class | 204,855 | 948,424 | ||||||
B-Class | 5,121 | 59,996 | ||||||
C-Class | 15,466 | 11,785 | ||||||
Shares issued from reinvestment of distributions | ||||||||
A-Class | 6,733 | 13,228 | ||||||
B-Class | 1,003 | 2,118 | ||||||
Shares redeemed | ||||||||
A-Class | (415,982 | ) | (658,590 | ) | ||||
B-Class | (58,851 | ) | (98,810 | ) | ||||
C-Class | (19,156 | ) | (43,681 | ) | ||||
Net increase (decrease) in shares | (260,811 | ) | 234,470 | |||||
1 | The share activity has been restated to reflect a 1-for-4 reverse share split effective April 8, 2011. See Note 12 in Notes to Financial Statements. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 79 |
Table of Contents
Rydex|SGI Large Cap Value Fund | ||
FINANCIAL HIGHLIGHTS | Large Cap Value Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011 | a,h | 2010 | h | 2009 | h | 2008 | h | 2007 | h | 2006 | h | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 26.08 | $ | 24.92 | $ | 26.88 | $ | 36.72 | $ | 30.60 | $ | 27.12 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment incomeb | 0.04 | 0.12 | 0.20 | 0.20 | 0.16 | 0.04 | ||||||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 5.08 | 1.24 | (1.80 | ) | (8.56 | ) | 5.96 | 3.60 | ||||||||||||||||
Total from investment operations | 5.12 | 1.36 | (1.60 | ) | (8.36 | ) | 6.12 | 3.64 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.12 | ) | (0.20 | ) | (0.20 | ) | (0.16 | ) | — | (0.16 | ) | |||||||||||||
Net realized gains | — | — | (0.16 | ) | (1.32 | ) | — | — | ||||||||||||||||
Total distributions | (0.12 | ) | (0.20 | ) | (0.36 | ) | (1.48 | ) | — | (0.16 | ) | |||||||||||||
Net asset value, end of period | $ | 31.08 | $ | 26.08 | $ | 24.92 | $ | 26.88 | $ | 36.72 | $ | 30.60 | ||||||||||||
Total Returnc | 19.64 | % | 5.46 | % | (5.59 | %) | (23.45 | %) | 20.04 | % | 13.45 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 50,496 | $ | 47,718 | $ | 38,008 | $ | 66,902 | $ | 79,998 | $ | 64,786 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income | 0.40 | % | 0.46 | % | 0.88 | % | 0.68 | % | 0.51 | % | 0.17 | % | ||||||||||||
Total expensesd | 1.70 | % | 1.59 | % | 1.70 | % | 1.36 | % | 1.35 | % | 1.49 | % | ||||||||||||
Net expensese | 1.15 | % | 1.18 | % | 1.25 | % | 1.25 | % | 1.27 | % | 1.49 | % | ||||||||||||
Portfolio turnover rate | 8 | % | 29 | % | 25 | % | 48 | % | 25 | % | 54 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011 | a,g,h | 2010 | g,h | 2009 | g,h | 2008 | g,h | 2007 | g,h | 2006 | g,h | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 24.16 | $ | 23.12 | $ | 25.16 | $ | 34.32 | $ | 28.72 | $ | 25.52 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | 0.08 | 0.16 | 0.24 | 0.28 | (0.04 | ) | (0.16 | ) | ||||||||||||||||
Net gain (loss) on investments (realized and unrealized) | 4.66 | 1.16 | (1.84 | ) | (8.08 | ) | 5.64 | 3.36 | ||||||||||||||||
Total from investment operations | 4.74 | 1.32 | (1.60 | ) | (7.80 | ) | 5.60 | 3.20 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.16 | ) | (0.28 | ) | (0.28 | ) | (0.04 | ) | — | — | ||||||||||||||
Net realized gains | — | — | (0.16 | ) | (1.32 | ) | — | — | ||||||||||||||||
Total distributions | (0.16 | ) | (0.28 | ) | (0.44 | ) | (1.36 | ) | — | — | ||||||||||||||
Net asset value, end of period | $ | 28.74 | $ | 24.16 | $ | 23.12 | $ | 25.16 | $ | 34.32 | $ | 28.72 | ||||||||||||
Total Returnc | 19.65 | % | 5.78 | % | (5.91 | %) | (23.39 | %) | 19.50 | % | 12.54 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 3,401 | $ | 4,132 | $ | 4,802 | $ | 8,097 | $ | 13,784 | $ | 12,761 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | 0.62 | % | 0.68 | % | 1.16 | % | 0.93 | % | (0.08 | %) | (0.58 | %) | ||||||||||||
Total expensesd | 1.46 | % | 1.33 | % | 1.47 | % | 1.11 | % | 1.92 | % | 2.26 | % | ||||||||||||
Net expensese | 0.90 | % | 0.94 | % | 1.00 | % | 1.00 | % | 1.85 | % | 2.26 | % | ||||||||||||
Portfolio turnover rate | 8 | % | 29 | % | 25 | % | 48 | % | 25 | % | 54 | % |
80 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Large Cap Value Fund | ||
FINANCIAL HIGHLIGHTS (concluded) | Large Cap Value Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011 | a,h | 2010 | h | 2009 | h | 2008 | h | 2007 | h | 2006 | h | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 24.60 | $ | 23.48 | $ | 25.40 | $ | 34.88 | $ | 29.24 | $ | 25.96 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss)b | (0.04 | ) | (0.08 | ) | 0.04 | — | f | (0.08 | ) | (0.16 | ) | |||||||||||||
Net gain (loss) on investments (realized and unrealized) | 4.73 | 1.20 | (1.80 | ) | (8.16 | ) | 5.72 | 3.44 | ||||||||||||||||
Total from investment operations | 4.69 | 1.12 | (1.76 | ) | (8.16 | ) | 5.64 | 3.28 | ||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.16 | ) | (1.32 | ) | — | — | ||||||||||||||||
Total distributions | — | — | (0.16 | ) | (1.32 | ) | — | — | ||||||||||||||||
Net asset value, end of period | $ | 29.29 | $ | 24.60 | $ | 23.48 | $ | 25.40 | $ | 34.88 | $ | 29.24 | ||||||||||||
Total Returnc | 19.02 | % | 4.77 | % | (6.80 | %) | (24.09 | %) | 19.29 | % | 12.63 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 2,862 | $ | 2,493 | $ | 3,128 | $ | 4,410 | $ | 5,717 | $ | 3,536 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment income (loss) | (0.35 | %) | (0.31 | %) | 0.14 | % | (0.07 | %) | (0.23 | %) | (0.60 | %) | ||||||||||||
Total expensesd | 2.46 | % | 2.33 | % | 2.46 | % | 2.11 | % | 2.10 | % | 2.25 | % | ||||||||||||
Net expensese | 1.90 | % | 1.94 | % | 2.00 | % | 2.00 | % | 2.02 | % | 2.25 | % | ||||||||||||
Portfolio turnover rate | 8 | % | 29 | % | 25 | % | 48 | % | 25 | % | 54 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Total expense information reflects expense ratios absent expense reductions by the Investment Manager, as applicable. | |
e | Net expense information reflects the expense ratios after voluntary expense waivers, and reimbursements and before custodian earnings credits, as applicable. | |
f | Net investment income is less than $0.01 per share. | |
g | Effective August 1, 2007, B-Class shares ceased charging 12b-1 fees in accordance with FINRA sales cap regulations. Per share information reflects this change. This fee will be reinstated when sales exceed the sales cap limit. | |
h | Per share amounts for periods ended September 30, 2006-March 31, 2011 have been restated to reflect 1:4 reverse share split effective April 8, 2011. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 81 |
Table of Contents
Rydex|SGI Large Cap Value Fund | ||
PERFORMANCE SUMMARY | Large Cap Value Institutional Fund | |
March 31, 2011 | (Unaudited) |
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211916.gif)
$10,000 Since Inception
This chart assumes a $10,000 investment in shares of Large Cap Value Institutional Fund on July 11, 2008 (date of inception), and assumes all dividends are reinvested. The chart does not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. The Russell 1000® Value Index is an unmanaged index representing the performance of those Russell 1000® Index companies with lower price-to-book ratios and lower forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
SINCE | ||||||||
INCEPTION | ||||||||
1 YEAR | (07/11/08) | |||||||
Large Cap Value Institutional Fund | 15.63 | % | 5.29 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if any applicable taxes were deducted. Fee waivers and/or reimbursements reduced expenses of the Fund and in the absence of such waivers, the performance quoted would be reduced.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Energy | 17.4 | % | ||
Financials | 15.4 | % | ||
Industrials | 11.4 | % | ||
Information Technology | 11.3 | % | ||
Consumer Staples | 10.0 | % | ||
Health Care | 8.9 | % | ||
Consumer Discretionary | 7.1 | % | ||
Materials | 3.9 | % | ||
Utilities | 2.8 | % | ||
Telecommunication Services | 1.2 | % | ||
Exchange Traded Funds | 4.0 | % | ||
Cash & Other Assets, Less Liabilities | 6.6 | % | ||
Total Net Assets | 100.0 | % | ||
82 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
Table of Contents
SCHEDULE OF INVESTMENTS(Unaudited) | Rydex|SGI Large Cap Value Fund | |
March 31, 2011 | Large Cap Value Institutional Fund |
Shares | Value | |||||||
COMMON STOCKS† - 89.4% | ||||||||
Energy - 17.4% | ||||||||
Chevron Corp. | 1,190 | $ | 127,842 | |||||
McDermott International, Inc.* | 4,070 | 103,337 | ||||||
Williams Companies, Inc. | 3,090 | 96,346 | ||||||
Exxon Mobil Corp. | 720 | 60,574 | ||||||
Halliburton Co. | 1,060 | 52,830 | ||||||
ConocoPhillips | 660 | 52,708 | ||||||
Apache Corp. | 400 | 52,368 | ||||||
Chesapeake Energy Corp. | 1,100 | 36,872 | ||||||
Total Energy | 582,877 | |||||||
Financials - 15.4% | ||||||||
AON Corp. | 2,070 | 109,627 | ||||||
Wells Fargo & Co. | 3,043 | 96,463 | ||||||
U.S. Bancorp | 3,041 | 80,374 | ||||||
Bank of New York Mellon Corp. | 2,300 | 68,701 | ||||||
JPMorgan Chase & Co. | 1,376 | 63,434 | ||||||
Berkshire Hathaway, Inc. — Class B* | 700 | 58,541 | ||||||
BB&T Corp. | 1,251 | 34,340 | ||||||
First Marblehead Corp.* | 3,412 | 7,506 | ||||||
Total Financials | 518,986 | |||||||
Industrials - 11.4% | ||||||||
Equifax, Inc. | 3,620 | 140,637 | ||||||
United Technologies Corp. | 930 | 78,725 | ||||||
Babcock & Wilcox Co.* | 2,035 | 67,928 | ||||||
USG Corp.* | 2,190 | 36,485 | ||||||
Parker Hannifin Corp. | 340 | 32,191 | ||||||
FedEx Corp. | 300 | 28,065 | ||||||
Total Industrials | 384,031 | |||||||
Information Technology - 11.3% | ||||||||
Western Union Co. | 5,040 | 104,681 | ||||||
TE Connectivity, Ltd. | 2,410 | 83,916 | ||||||
Computer Sciences Corp. | 1,600 | 77,968 | ||||||
Hewlett-Packard Co. | 1,645 | 67,396 | ||||||
Visa, Inc. — Class A | 400 | 29,448 | ||||||
Synopsys, Inc.* | 600 | 16,590 | ||||||
Total Information Technology | 379,999 | |||||||
Consumer Staples - 10.0% | ||||||||
CVS Caremark Corp. | 2,160 | 74,131 | ||||||
Wal-Mart Stores, Inc. | 1,360 | 70,788 | ||||||
Kraft Foods, Inc. — Class A | 2,150 | 67,424 | ||||||
Costco Wholesale Corp. | 740 | 54,257 | ||||||
Bunge Ltd. | 545 | 39,420 | ||||||
Altria Group, Inc. | 1,100 | 28,633 | ||||||
Total Consumer Staples | 334,653 | |||||||
Health Care - 8.9% | ||||||||
Aetna, Inc. | 2,420 | 90,580 | ||||||
Hospira, Inc.* | 1,360 | 75,072 | ||||||
Covidien plc | 1,350 | 70,119 | ||||||
Forest Laboratories, Inc.* | 1,100 | 35,530 | ||||||
Medco Health Solutions, Inc.* | 480 | 26,957 | ||||||
Total Health Care | 298,258 | |||||||
Consumer Discretionary - 7.1% | ||||||||
Lowe’s Companies, Inc. | 4,630 | 122,371 | ||||||
Time Warner, Inc. | 2,240 | 79,968 | ||||||
Best Buy Company, Inc. | 800 | 22,976 | ||||||
JC Penney Company, Inc. | 330 | 11,850 | ||||||
Total Consumer Discretionary | 237,165 | |||||||
Materials - 3.9% | ||||||||
Dow Chemical Co. | 1,950 | 73,612 | ||||||
Bemis Company, Inc. | 1,750 | 57,418 | ||||||
Total Materials | 131,030 | |||||||
Utilities - 2.8% | ||||||||
Edison International | 2,130 | 77,937 | ||||||
NRG Energy, Inc.* | 800 | 17,232 | ||||||
Total Utilities | 95,169 | |||||||
Telecommunication Services - 1.2% | ||||||||
Windstream Corp. | 3,130 | 40,283 | ||||||
Total Common Stocks (Cost $2,383,769) | 3,002,451 | |||||||
EXCHANGE TRADED FUNDS† - 4.0% | ||||||||
iShares Russell 1000 Value Index Fund | 980 | 67,296 | ||||||
iShares S&P 500 Value Index Fund | 1,060 | 67,109 | ||||||
Total Exchange Traded Funds (Cost $123,362) | 134,405 | |||||||
Total Investments - 93.4% (Cost $2,507,131) | $ | 3,136,856 | ||||||
Cash & Other Assets, Less Liabilities - 6.6% | 222,153 | |||||||
Total Net Assets - 100.0% | $ | 3,359,009 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
plc — Public Limited Company |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 83 |
Table of Contents
Rydex|SGI Large Cap Value Fund
Large Cap Value Institutional Fund
Large Cap Value Institutional Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 3,136,856 | ||
Total investments | 3,136,856 | |||
Cash | 234,949 | |||
Receivables: | ||||
Dividends | 4,245 | |||
Prepaid expenses | 16,952 | |||
Total assets | 3,393,002 | |||
Liabilities: | ||||
Payable for: | ||||
Securities purchased | 8,223 | |||
Management fees | 1,790 | |||
Custodian fees | 483 | |||
Transfer agent/maintenance fees | 1,329 | |||
Portfolio accounting fees | 1,702 | |||
Professional fees | 7,478 | |||
Directors’ fees | 161 | |||
Legal fees | 72 | |||
Pricing fees | 434 | |||
Direct shareholders expense | 9,068 | |||
Corporate expenses | 3,253 | |||
Total liabilities | 33,993 | |||
Net assets | $ | 3,359,009 | ||
Net assets consist of: | ||||
Paid in capital | $ | 3,013,468 | ||
Undistributed net investment income | 3,591 | |||
Accumulated net realized loss on investments | (287,775 | ) | ||
Net unrealized appreciation in on investments | 629,725 | |||
Net assets | $ | 3,359,009 | ||
Net assets | $ | 3,359,009 | ||
Capital shares outstanding | 298,679 | |||
Net asset value per share | $ | 11.25 | ||
* Investments, at cost | $ | 2,507,131 |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends | $ | 24,095 | ||
Interest | 6 | |||
Total investment income | 24,101 | |||
Expenses: | ||||
Management fees | 9,796 | |||
Transfer agent/maintenance fees | 9,530 | |||
Portfolio accounting fees | 13,987 | |||
Directors’ fees* | 164 | |||
Registration fees | 8,106 | |||
Professional fees | 5,014 | |||
Corporate fees | 3,360 | |||
Miscellaneous | 5,064 | |||
Total expenses | 55,021 | |||
Expenses waived by Advisor | (40,554 | ) | ||
Net expenses | 14,467 | |||
Net investment income | 9,634 | |||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 79,286 | |||
Net realized gain | 79,286 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 458,975 | |||
Options written | (528 | ) | ||
Net change in unrealized appreciation | 458,447 | |||
Net realized and unrealized gain | 537,733 | |||
Net increase in net assets resulting from operations | $ | 547,367 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
84 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI Large Cap Value Fund | ||
STATEMENTS OF CHANGES IN NET ASSETS | Large Cap Value Institutional Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment income | $ | 9,634 | $ | 17,628 | ||||
Net realized gain (loss) on investments | 79,286 | (43,818 | ) | |||||
Net change in unrealized appreciation (depreciation) on investments | 458,447 | 210,659 | ||||||
Net increase in net assets resulting from operations | 547,367 | 184,469 | ||||||
Distributions to shareholders from: | ||||||||
Net investment income | (21,441 | ) | (23,939 | ) | ||||
Total distributions to shareholders | (21,441 | ) | (23,939 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | 310,171 | 740,266 | ||||||
Distributions reinvested | 21,441 | 23,939 | ||||||
Cost of shares redeemed | (329,479 | ) | (811,428 | ) | ||||
Net increase (decrease) from capital share transactions | 2,133 | (47,223 | ) | |||||
Net increase in net assets | 528,059 | 113,307 | ||||||
Net assets: | ||||||||
Beginning of period | 2,830,950 | 2,717,643 | ||||||
End of period | $ | 3,359,009 | $ | 2,830,950 | ||||
Undistributed net investment income at end of period | $ | 3,591 | $ | 15,398 | ||||
Capital share activity: | ||||||||
Shares sold | 28,837 | 79,452 | ||||||
Shares issued from reinvestment of distributions | 2,080 | 2,631 | ||||||
Shares redeemed | (32,311 | ) | (87,551 | ) | ||||
Net decrease in shares | (1,394 | ) | (5,468 | ) | ||||
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 85 |
Table of Contents
Rydex|SGI Large Cap Value Fund | ||
FINANCIAL HIGHLIGHTS | Large Cap Value Institutional Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Period Ended | |||||||||||||
March 31, | September 30, | September 30, | September 30, | |||||||||||||
2011 | a | 2010 | 2009 | 2008 | a,b | |||||||||||
Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ | 9.43 | $ | 8.89 | $ | 9.61 | $ | 10.00 | ||||||||
Income (loss) from investment operations: | ||||||||||||||||
Net investment incomec | 0.03 | 0.06 | 0.09 | 0.03 | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 1.87 | 0.56 | (0.76 | ) | (0.42 | ) | ||||||||||
Total from investment operations | 1.90 | 0.62 | (0.67 | ) | (0.39 | ) | ||||||||||
Less distributions from: | ||||||||||||||||
Net investment income | (0.08 | ) | (0.08 | ) | (0.05 | ) | — | |||||||||
Total distributions | (0.08 | ) | (0.08 | ) | (0.05 | ) | — | |||||||||
Net asset value, end of period | $ | 11.25 | $ | 9.43 | $ | 8.89 | $ | 9.61 | ||||||||
Total Returnd | 20.17 | % | 7.00 | % | (6.89 | %) | (3.90 | %) | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 3,359 | $ | 2,831 | $ | 2,718 | $ | 2,878 | ||||||||
Ratios to average net assets: | ||||||||||||||||
Net investment income | 0.64 | % | 0.63 | % | 1.22 | % | 1.17 | % | ||||||||
Total expensese | 3.65 | % | 3.18 | % | 2.37 | % | 2.33 | % | ||||||||
Net expensesf | 0.96 | % | 0.97 | % | 0.98 | % | 0.98 | % | ||||||||
Portfolio turnover rate | 12 | % | 26 | % | 45 | % | 35 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Since commencement of operations: July 11, 2008 — Large Cap Value Institutional Fund. | |
c | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
e | Total expense information reflects the expense ratios absent expense reductions by the Investment Manager, as applicable. | |
f | Net expense information reflects the expense ratios after voluntary expense waivers, and reimbursements and before custodian earnings credits, as applicable. |
86 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
PERFORMANCE
![(LINE GRAPH)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211917.gif)
$10,000 Over Ten Years
This chart assumes a $10,000 investment in A-Class shares of Mid Cap Growth Fund on March 31, 2011, reflects deduction of the maximum front-end sales charge of 5.75% and assumes all dividends are reinvested.† The chart does not reflect the deduction of taxes that a shareholder would pay on distributions of the redemption of fund shares. The Russell MidCap® Growth Index is an unmanaged capitalization-weighted index that is designed to measure the performance of the 800 smallest companies in the Russell 1000® Index with higher price-to-book ratios and higher forecasted growth values.
AVERAGE ANNUAL RETURNS
PERIODS ENDED 3/31/2011
PERIODS ENDED 3/31/2011
1 YEAR | 5 YEAR | 10 YEAR | ||||||||||
A-Class Shares | 19.62 | % | -1.75 | % | 3.50 | % | ||||||
A-Class Shares with sales charge | 12.81 | % | -2.90 | % | 2.88 | % | ||||||
B-Class Shares | 18.61 | % | -2.51 | % | 2.87 | % | ||||||
B-Class Shares with CDSC | 13.61 | % | -2.76 | % | 2.87 | % | ||||||
C-Class Shares | 18.86 | % | -2.50 | % | 2.73 | % | ||||||
C-Class Shares with CDSC | 17.86 | % | -2.50 | % | 2.73 | % |
The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The figures above do not reflect deduction of the maximum front-end sales charge of 5.75% for Class A shares or the contingent deferred sales charge of 5% for Class B shares and 1% for Class C shares, as applicable, except where noted.† The figures do not reflect the deduction of taxes that a shareholder would pay on distributions or redemption of shares. Such figures would be lower if the maximum sales charge and any applicable taxes were deducted.
Portfolio Composition by Sector | ||||
Common Stocks | ||||
Information Technology | 21.4 | % | ||
Consumer Discretionary | 20.5 | % | ||
Industrials | 18.3 | % | ||
Health Care | 11.7 | % | ||
Energy | 6.5 | % | ||
Materials | 6.4 | % | ||
Financials | 6.1 | % | ||
Telecommunication Services | 1.9 | % | ||
Exchange Traded Funds | 3.7 | % | ||
Cash & Other Assets, Less Liabilities | 3.5 | % | ||
Total Net Assets | 100.0 | % | ||
† | Effective 2/22/11, the A-Class maximum sales charge decreased from 5.75% to 4.75%. A 5.75% maximum sales charge is used to calculate performance for periods beginning prior to 2/22/11, and a 4.75% maximum sales charge is used to calculate performance for periods beginning on or after 2/22/11. |
THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 87
Table of Contents
SCHEDULE OF INVESTMENTS (Unaudited) | Rydex|SGI | |
March 31, 2011 | Mid Cap Growth Fund |
Shares | Value | |||||||
COMMON STOCKS† - 92.8% | ||||||||
Information Technology - 21.4% | ||||||||
Autodesk, Inc.* | 49,350 | $ | 2,176,829 | |||||
Cognizant Technology Solutions Corp. — Class A* | 26,035 | 2,119,249 | ||||||
KLA-Tencor Corp. | 42,200 | 1,999,014 | ||||||
Check Point Software Technologies Ltd.* | 37,365 | 1,907,483 | ||||||
Micron Technology, Inc.* | 120,200 | 1,377,492 | ||||||
Alliance Data Systems Corp.* | 15,900 | 1,365,651 | ||||||
NetApp, Inc.* | 24,920 | 1,200,646 | ||||||
Cadence Design Systems, Inc.* | 116,180 | 1,132,755 | ||||||
Amphenol Corp. — Class A | 20,460 | 1,112,819 | ||||||
Nuance Communications, Inc.* | 56,865 | 1,112,279 | ||||||
Advanced Micro Devices, Inc.* | 123,500 | 1,062,100 | ||||||
Avago Technologies Ltd. | 32,500 | 1,010,750 | ||||||
Salesforce.com, Inc.* | 5,430 | 725,339 | ||||||
Teradata Corp.* | 13,700 | 694,590 | ||||||
Western Digital Corp.* | 18,450 | 688,001 | ||||||
Total Information Technology | 19,684,997 | |||||||
Consumer Discretionary - 20.5% | ||||||||
Jarden Corp. | 71,280 | 2,535,430 | ||||||
Priceline.com, Inc.* | 4,005 | 2,028,292 | ||||||
Johnson Controls, Inc. | 40,100 | 1,666,957 | ||||||
Phillips-Van Heusen Corp. | 24,050 | 1,563,971 | ||||||
Stanley Black & Decker, Inc. | 18,200 | 1,394,120 | ||||||
Life Time Fitness, Inc.* | 36,500 | 1,361,815 | ||||||
Wyndham Worldwide Corp. | 42,120 | 1,339,837 | ||||||
Wynn Resorts Ltd. | 10,350 | 1,317,038 | ||||||
Penn National Gaming, Inc.* | 34,170 | 1,266,340 | ||||||
Kohl’s Corp. | 22,150 | 1,174,836 | ||||||
CarMax, Inc.* | 35,500 | 1,139,550 | ||||||
Darden Restaurants, Inc. | 22,520 | 1,106,408 | ||||||
Bed Bath & Beyond, Inc.* | 20,510 | 990,018 | ||||||
Total Consumer Discretionary | 18,884,612 | |||||||
Industrials - 18.3% | ||||||||
Navistar International Corp.* | 42,250 | 2,929,192 | ||||||
Parker Hannifin Corp. | 21,450 | 2,030,886 | ||||||
Cummins, Inc. | 16,800 | 1,841,616 | ||||||
Cooper Industries plc — Class A | 28,100 | 1,823,690 | ||||||
Goodrich Corp. | 17,400 | 1,488,222 | ||||||
Joy Global, Inc. | 15,060 | 1,488,079 | ||||||
Dover Corp. | 22,500 | 1,479,150 | ||||||
AMETEK, Inc. | 33,675 | 1,477,322 | ||||||
Union Pacific Corp. | 12,820 | 1,260,591 | ||||||
Roper Industries, Inc. | 11,800 | 1,020,228 | ||||||
Total Industrials | 16,838,976 | |||||||
Health Care - 11.7% | ||||||||
Warner Chilcott plc — Class A | 90,200 | 2,099,856 | ||||||
Covidien plc | 37,700 | 1,958,138 | ||||||
Thermo Fisher Scientific, Inc.* | 32,115 | 1,783,988 | ||||||
Agilent Technologies, Inc.* | 36,470 | 1,633,127 | ||||||
Teva Pharmaceutical Industries Ltd. ADR | 30,965 | 1,553,514 | ||||||
Hospira, Inc.* | 16,800 | 927,360 | ||||||
Community Health Systems, Inc.* | 21,050 | 841,789 | ||||||
Total Health Care | 10,797,772 | |||||||
Energy - 6.5% | ||||||||
Oil States International, Inc.* | 26,000 | 1,979,640 | ||||||
Pioneer Natural Resources Co. | 17,750 | 1,809,080 | ||||||
Ensco plc ADR | 21,200 | 1,226,208 | ||||||
Alpha Natural Resources, Inc.* | 17,000 | 1,009,290 | ||||||
Total Energy | 6,024,218 | |||||||
Materials - 6.4% | ||||||||
Albemarle Corp. | 32,550 | 1,945,514 | ||||||
Ball Corp. | 52,784 | 1,892,306 | ||||||
Agrium, Inc. | 11,540 | 1,064,680 | ||||||
Airgas, Inc. | 15,100 | 1,002,942 | ||||||
Total Materials | 5,905,442 | |||||||
Financials - 6.1% | ||||||||
T. Rowe Price Group, Inc. | 27,450 | 1,823,229 | ||||||
Discover Financial Services | 54,900 | 1,324,188 | ||||||
HCC Insurance Holdings, Inc. | 30,510 | 955,268 | ||||||
Blackstone Group, LP | 42,400 | 758,112 | ||||||
KKR & Company, LP | 45,800 | 751,578 | ||||||
Total Financials | 5,612,375 | |||||||
Telecommunication Services - 1.9% | ||||||||
SBA Communications Corp. — Class A* | 42,960 | 1,704,653 | ||||||
Total Common Stocks | ||||||||
(Cost $72,461,079) | 85,453,045 | |||||||
WARRANT†† - 0.0% | ||||||||
Energy - 0.0% | ||||||||
Nova Biosource Fuels, Inc.1 $2.40, 07/05/11 | 208,050 | 541 | ||||||
Total Warrant | ||||||||
(Cost $214,905) | 541 | |||||||
EXCHANGE TRADED FUND† - 3.7% | ||||||||
iShares Russell Midcap Growth Index Fund | 55,535 | 3,382,637 | ||||||
Total Exchange Traded Fund | ||||||||
(Cost $3,040,083) | 3,382,637 | |||||||
Total Investments - 96.5% | ||||||||
(Cost $75,716,067) | $ | 88,836,223 | ||||||
Cash & Other Assets, Less Liabilities - 3.5% | 3,190,973 | |||||||
Total Net Assets - 100.0% | $ | 92,027,196 | ||||||
* | Non-income producing security | |
† | Value determined based on Level 1 inputs — See Note 10. | |
†† | Value determined based on Level 2 inputs — See Note 10. | |
ADR — American Depositary Receipt | ||
plc — Public Limited Company | ||
1 | All or a portion of this security was fair valued by the Valuation Committee at March 31, 2011. The total market value of fair valued securities amounts to $541 (cost $214,905), or 0.0% of total net assets. |
88 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
Rydex|SGI
Mid Cap Growth Fund
Mid Cap Growth Fund
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
March 31, 2011
Assets: | ||||
Investments, at value* | $ | 88,836,223 | ||
Total investments | 88,836,223 | |||
Cash | 3,268,702 | |||
Receivables: | ||||
Securities sold | 695,166 | |||
Fund shares sold | 98,377 | |||
Dividends | 44,122 | |||
Prepaid expenses | 28,666 | |||
Total assets | 92,971,256 | |||
Liabilities: | ||||
Payable for: | ||||
Securities purchased | 588,873 | |||
Fund shares redeemed | 58,518 | |||
Management fees | 57,303 | |||
Custodian fees | 229 | |||
Transfer agent/maintenance fees | 47,603 | |||
Distribution and service fees | 26,075 | |||
Portfolio accounting fees | 7,258 | |||
Professional fees | 9,333 | |||
Directors’ fees | 79,685 | |||
Legal fees | 2,708 | |||
Pricing fees | 1,112 | |||
Direct shareholders expense | 31,018 | |||
Corporate expenses | 34,345 | |||
Total liabilities | 944,060 | |||
Net assets | $ | 92,027,196 | ||
Net assets consist of: | ||||
Paid in capital | $ | 100,052,015 | ||
Accumulated net investment loss | (524,274 | ) | ||
Accumulated net realized loss on investments | (20,620,701 | ) | ||
Net unrealized appreciation in on investments | 13,120,156 | |||
Net assets | $ | 92,027,196 | ||
A-Class: | ||||
Net assets | $ | 80,835,669 | ||
Capital shares outstanding1 | 2,317,190 | |||
Net asset value per share1 | $ | 34.89 | ||
Maximum offering price per share**1 | $ | 36.63 | ||
B-Class: | ||||
Net assets | $ | 4,573,789 | ||
Capital shares outstanding1 | 175,837 | |||
Net asset value per share1 | $ | 26.01 | ||
C-Class: | ||||
Net assets | $ | 6,617,738 | ||
Capital shares outstanding1 | 220,664 | |||
Net asset value per share1 | $ | 29.99 | ||
* Investments, at cost | $ | 75,716,067 | ||
1 | The shares outstanding, net asset value per share and the maximum offering price per share have been restated to reflect a 1-for-4 reverse share split effective April 8, 2011. See Note 12 in Notes to Financial Statements. | |
** | Net asset value adjusted for the maximum sales charge of 4.75% of offering price, calculated NAV/(1-4.75%). |
STATEMENT OF OPERATIONS (Unaudited)
For the Period Ended March 31, 2011
Investment Income: | ||||
Dividends (net of foreign withholding tax of $98) | $ | 335,560 | ||
Interest | 434 | |||
Total investment income | 335,994 | |||
Expenses: | ||||
Management fees | 334,230 | |||
Transfer agent/maintenance fees | 187,134 | |||
Distribution and service fees: | ||||
A-Class | 97,972 | |||
B-Class | 23,626 | |||
C-Class | 30,126 | |||
Portfolio accounting fees | 42,335 | |||
Directors’ fees* | 39,140 | |||
Miscellaneous | 105,705 | |||
Total expenses | 860,268 | |||
Net investment loss | (524,274 | ) | ||
Net Realized and Unrealized Gain (Loss): | ||||
Net realized gain (loss) on: | ||||
Investments | 11,908,398 | |||
Net realized gain | 11,908,398 | |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 3,471,804 | |||
Net change in unrealized appreciation | 3,471,804 | |||
Net realized and unrealized gain | 15,380,202 | |||
Net increase in net assets resulting from operations | $ | 14,855,928 | ||
* | Relates to Directors not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act. |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 89 |
Table of Contents
Rydex|SGI | ||
STATEMENTS OF CHANGES IN NET ASSETS | Mid Cap Growth Fund |
Period Ended | ||||||||
March 31, | Year Ended | |||||||
2011 | September 30, | |||||||
(Unaudited) | 2010 | |||||||
Increase (Decrease) In Net Assets From Operations: | ||||||||
Net investment loss | $ | (524,274 | ) | $ | (770,984 | ) | ||
Net realized gain on investments | 11,908,398 | 12,599,744 | ||||||
Net change in unrealized appreciation (depreciation) on investments | 3,471,804 | (2,290,110 | ) | |||||
Net increase in net assets resulting from operations | 14,855,928 | 9,538,650 | ||||||
Capital share transactions: | ||||||||
Proceeds from sale of shares | ||||||||
A-Class | 6,364,608 | 8,594,212 | ||||||
B-Class | 466,672 | 168,153 | ||||||
C-Class | 1,139,906 | 764,151 | ||||||
Cost of shares redeemed | ||||||||
A-Class | (10,501,710 | ) | (17,101,108 | ) | ||||
B-Class | (1,201,528 | ) | (3,669,427 | ) | ||||
C-Class | (830,488 | ) | (1,620,755 | ) | ||||
Net decrease from capital share transactions | (4,562,540 | ) | (12,864,774 | ) | ||||
Net increase (decrease) in net assets | 10,293,388 | (3,326,124 | ) | |||||
Net assets: | ||||||||
Beginning of period | 81,733,808 | 85,059,932 | ||||||
End of period | $ | 92,027,196 | $ | 81,733,808 | ||||
Accumulated net investment loss at end of period | $ | (524,274 | ) | $ | — | |||
Capital share activity:1 | ||||||||
Shares sold | ||||||||
A-Class | 193,101 | 317,220 | ||||||
B-Class | 18,739 | 8,261 | ||||||
C-Class | 39,421 | 31,757 | ||||||
Shares redeemed | ||||||||
A-Class | (316,414 | ) | (628,456 | ) | ||||
B-Class | (48,750 | ) | (180,188 | ) | ||||
C-Class | (28,895 | ) | (68,800 | ) | ||||
Net decrease in shares | (142,798 | ) | (520,206 | ) | ||||
1 | The share activity has been restated to reflect a 1-for-4 reverse share split effective April 8, 2011. See Note 12 in Notes to Financial Statements. |
90 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
FINANCIAL HIGHLIGHTS | Rydex|SGI Mid Cap Growth Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
A-Class | 2011 | a,d | 2010 | d | 2009 | d | 2008 | d | 2007 | d | 2006 | d | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 29.44 | $ | 26.16 | $ | 25.84 | $ | 44.44 | $ | 48.12 | $ | 50.60 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.16 | ) | (0.24 | ) | (0.20 | ) | (0.20 | ) | (0.32 | ) | (0.48 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 5.61 | 3.52 | 0.72 | (9.84 | ) | 1.40 | 1.88 | |||||||||||||||||
Total from investment operations | 5.45 | 3.28 | 0.52 | (10.04 | ) | 1.08 | 1.40 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.20 | ) | (8.56 | ) | (4.76 | ) | (3.88 | ) | ||||||||||||||
Total distributions | — | — | (0.20 | ) | (8.56 | ) | (4.76 | ) | (3.88 | ) | ||||||||||||||
Net asset value, end of period | $ | 34.89 | $ | 29.44 | $ | 26.16 | $ | 25.84 | $ | 44.44 | $ | 48.12 | ||||||||||||
Total Returnc | 18.48 | % | 12.54 | % | 2.32 | % | (26.24 | )% | 2.10 | % | 2.81 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 80,836 | $ | 71,858 | $ | 71,985 | $ | 71,655 | $ | 160,544 | $ | 192,159 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.09 | )% | (0.85 | )% | (0.99 | )% | (0.63 | )% | (0.67 | )% | (0.93 | )% | ||||||||||||
Total expenses | 1.84 | % | 1.67 | % | 1.78 | % | 1.50 | % | 1.41 | % | 1.40 | % | ||||||||||||
Portfolio turnover rate | 76 | % | 133 | % | 138 | % | 191 | % | 34 | % | 41 | % |
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
B-Class | 2011 | a,d | 2010 | d | 2009 | d | 2008 | d | 2007 | d | 2006 | d | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 22.04 | $ | 19.72 | $ | 19.68 | $ | 36.36 | $ | 40.48 | $ | 43.44 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.24 | ) | (0.32 | ) | (0.28 | ) | (0.36 | ) | (0.56 | ) | (0.72 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 4.21 | 2.64 | 0.52 | (7.76 | ) | 1.20 | 1.64 | |||||||||||||||||
Total from investment operations | 3.97 | 2.32 | 0.24 | (8.12 | ) | 0.64 | 0.92 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.20 | ) | (8.56 | ) | (4.76 | ) | (3.88 | ) | ||||||||||||||
Total distributions | — | — | (0.20 | ) | (8.56 | ) | (4.76 | ) | (3.88 | ) | ||||||||||||||
Net asset value, end of period | $ | 26.01 | $ | 22.04 | $ | 19.72 | $ | 19.68 | $ | 36.36 | $ | 40.48 | ||||||||||||
Total Returnc | 17.97 | % | 11.76 | % | 1.61 | % | (26.92 | )% | 1.34 | % | 2.12 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 4,574 | $ | 4,537 | $ | 7,454 | $ | 7,711 | $ | 14,877 | $ | 22,010 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.84 | )% | (1.60 | )% | (1.73 | )% | (1.40 | )% | (1.43 | )% | (1.68 | )% | ||||||||||||
Total expenses | 2.59 | % | 2.42 | % | 2.53 | % | 2.26 | % | 2.16 | % | 2.15 | % | ||||||||||||
Portfolio turnover rate | 76 | % | 133 | % | 138 | % | 191 | % | 34 | % | 41 | % |
The accompanying notes are an integral part of the financial statements. | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | 91 |
Table of Contents
Rydex|SGI | ||
FINANCIAL HIGHLIGHTS (concluded) | Mid Cap Growth Fund |
This table is presented to show selected data for a share outstanding throughout each period, and to assist shareholders in evaluating a Fund’s performance for the periods presented.
Period Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
March 31, | September 30, | September 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
C-Class | 2011 | a,d | 2010 | d | 2009 | d | 2008 | d | 2007 | d | 2006 | d | ||||||||||||
Per Share Data | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 25.40 | $ | 22.76 | $ | 22.68 | $ | 40.44 | $ | 44.52 | $ | 47.36 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment lossb | (0.28 | ) | (0.40 | ) | (0.32 | ) | (0.40 | ) | (0.60 | ) | (0.76 | ) | ||||||||||||
Net gain (loss) on investments (realized and unrealized) | 4.87 | 3.04 | 0.60 | (8.80 | ) | 1.28 | 1.80 | |||||||||||||||||
Total from investment operations | 4.59 | 2.64 | 0.28 | (9.20 | ) | 0.68 | 1.04 | |||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net realized gains | — | — | (0.20 | ) | (8.56 | ) | (4.76 | ) | (3.88 | ) | ||||||||||||||
Total distributions | — | — | (0.20 | ) | (8.56 | ) | (4.76 | ) | (3.88 | ) | ||||||||||||||
Net asset value, end of period | $ | 29.99 | $ | 25.40 | $ | 22.76 | $ | 22.68 | $ | 40.44 | $ | 44.52 | ||||||||||||
Total Returnc | 18.11 | % | 11.60 | % | 1.58 | % | (26.87 | )% | 1.31 | % | 2.20 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 6,618 | $ | 5,339 | $ | 5,622 | $ | 6,452 | $ | 10,717 | $ | 15,505 | ||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||||
Net investment loss | (1.84 | )% | (1.60 | )% | (1.74 | )% | (1.40 | )% | (1.43 | )% | (1.68 | )% | ||||||||||||
Total expenses | 2.60 | % | 2.43 | % | 2.54 | % | 2.26 | % | 2.16 | % | 2.15 | % | ||||||||||||
Portfolio turnover rate | 76 | % | 133 | % | 138 | % | 191 | % | 34 | % | 41 | % |
a | Unaudited figures for the period ended March 31, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. | |
b | Net investment income (loss) was computed using average shares outstanding throughout the period. | |
c | Total return does not reflect the impact of any applicable sales charges and has not been annualized. | |
d | Per share amounts for periods ended September 30, 2006-March 31, 2011 have been restated to reflect 1:4 reverse share split effective April 8, 2011. |
92 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT | The accompanying notes are an integral part of the financial statements. |
Table of Contents
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. Significant Accounting Policies
Rydex|SGI Equity, Large Cap Value, and Mid Cap Growth Funds (legally known as Security Equity Fund, Security Large Cap Value Fund, and Security Mid Cap Growth Fund, respectively), (collectively referred to herein as the Funds) are registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as open-end management investment companies. The shares of Rydex|SGI Equity Fund and Large Cap Value Fund are currently issued in multiple series, with each series, in effect, representing a separate fund. The Rydex|SGI Equity Fund and Large Cap Value Fund account for the assets of each series separately. A-Class shares are generally sold with a front-end sales charge at the time of purchase. A-Class shares are not subject to a sales charge when they are redeemed, except for purchases of $1 million or more sold without a front-end sales charge which are subject to a contingent deferred sales charge if redeemed within one year of purchase. B-Class shares are offered without a front-end sales charge, but are subject to a contingent deferred sales charge for five years and automatically convert to A-Class shares after eight years. C-Class shares are offered without a front-end sales charge but incur additional class-specific expenses. Redemptions of C-Class shares within one year of acquisition incur a contingent deferred sales charge. Institutional Class shares are offered primarily for direct investment by institutions, such as pension and profit sharing plans, endowments, foundations and corporations. Institutional class shares have a minimum initial investment of $2 million and a minimum account balance of $1 million. Institutional Class shares are offered without a front-end sales charge or a contingent deferred sales charge. The following is a summary of the significant accounting policies followed by the Funds in the preparation of their financial statements.
A. Security Valuation — Valuations of the Funds’ securities are supplied by pricing services approved by the Board of Directors. The Funds’ officers, through the Valuation Committee, under the general supervision of the Board of Directors, regularly review procedures used by, and valuations provided by, the pricing services. Each security owned by the Funds that is listed on a securities exchange is valued at its last sale price on that exchange on the date as of which assets are valued. Where the security is listed on more than one exchange, the Fund will use the price of that exchange that it generally considers to be the principal exchange on which the stock is traded. Securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”) will be valued at the NASDAQ Official Closing Price, which may not necessarily represent the last sale price. If there has been no sale on such exchange or NASDAQ on such day, the security is valued at the closing bid price on such day. Securities for which market quotations are not readily available are valued taking into consideration securities with similar yields, quality, type of issue, coupon, duration and rating. If there is no bid price or if the bid price is deemed to be unsatisfactory by the Board of Directors or by the Funds’ investment manager, then the securities are valued in good faith by such method as the Board of Directors determines will reflect the fair value. If events occur after the close of a foreign exchange that will affect the value of a Funds portfolio securities before the time as of which the NAV is calculated (a “significant event”), the security will generally be priced using a fair value procedure. If the Valuation Committee determines a significant event has occurred, it will evaluate the impact of that event on an affected security or securities, to determine whether a fair value adjustment would materially affect the Funds net asset value per share. Some of the factors which may be considered by the Board of Directors in determining fair value are fundamental analytical data relating to the investment, the nature and duration of any restrictions on disposition, trading in similar securities of the same issuer or comparable companies, information from broker-dealers, and an evaluation of the forces that influence the market in which the securities are purchased and sold. The Funds generally will value short-term debt securities at prices based on market quotations for such securities or securities of similar type, yield, quality and duration. Those securities purchased with 60 days or less to maturity are valued on the basis of amortized cost, which approximates market value.
Generally, trading in foreign securities markets is substantially completed each day at various times prior to the close of the New York Stock Exchange. The values of foreign securities are determined as of the close of such foreign markets or the close of the New York Stock Exchange, if earlier. All investments quoted in foreign currency are valued in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the close of business. Investments in foreign securities may involve risks not present in domestic investments. The Valuation Committee will determine the current value of such foreign securities by taking into consideration certain factors which may include those discussed above, as well as the following factors, among others: the value of the securities traded on other foreign markets, ADR trading, closed-end fund trading, foreign currency exchange activity, and the trading prices of financial products that are tied to foreign securities such as WEBS®. In addition, the Board of Directors has authorized the Valuation Committee and Administrator to use prices and other information supplied by a third party pricing vendor in valuing foreign securities.
B. Repurchase Agreements — In connection with transactions in repurchase agreements, it is the Funds’ policy that their custodian take possession of the underlying collateral and that the fair value of the collateral exceed the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited.
C. Foreign Currency Transactions — The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates.
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Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which could affect the market and/or credit risk of the investments.
The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of portfolio securities, sales of foreign currencies, and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of portfolio securities and other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates.
D. Futures — The Alpha Opportunity Fund utilized futures contracts to obtain broad index exposure. Returns may be enhanced by purchasing futures contracts instead of the underlying securities when futures are believed to be priced more attractively than the underlying securities. The primary risks associated with the use of futures contracts are imperfect correlation between changes in market values of stocks contained in the indexes and the prices of futures contracts, and the possibility of an illiquid market. Cash deposits are shown as restricted cash on the Statement of Assets and Liabilities; securities held as collateral are noted in the Schedule of Investments. Subsequent changes in the value of the contract are recorded as unrealized gains or losses. The variation margin is paid or received in cash daily by the Funds. The Funds realize a gain or loss when the contract is closed or expires.
E. Options Written — Certain Funds wrote call options on a covered basis and put options on securities that are traded on recognized securities exchanges and over-the-counter markets (see footnote 4). Call and put options on securities give the writer the obligation to sell or purchase a security at a specified price, until a certain date. Options were used minimally to hedge the Funds’ portfolio, and create liquidity. The primary risks associated with the use of options are an imperfect correlation between the change in market value of the securities held by the Fund and the price of the option, the possibility of an illiquid market, and the inability of the counterparty to meet the terms of the contract.
The premium received for a written option is recorded as an asset with an equal liability which is marked-to-market based on the option’s quoted daily settlement price. Fluctuations in the value of such instruments are recorded as unrealized appreciation (depreciation) until terminated, at which time realized gains and losses are recognized.
F. Securities Sold Short — The Alpha Opportunity Fund may make short sales “against the box,” in which the Fund enters into a short sale of a security it owns. At no time will more than 15% of the value of the Funds’ net assets be in deposits on short sales against the box. If a Fund makes a short sale, the Fund does not immediately deliver from its own account the securities sold and does not receive the proceeds from the sale. To complete the sale, the Fund must borrow the security (generally from the broker through which the short sale is made) in order to make delivery to the buyer. The Fund must replace the security borrowed by purchasing it at the market price at the time of replacement or delivering the security from its own portfolio. Such short sales theoretically involve unlimited loss potential, as the market price of securities sold short may continually increase, although a Fund may mitigate such losses by replacing the securities sold short before the market price has increased significantly. For financial statement purposes, an amount equal to the settlement amount is initially recorded as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the short position. Subsequent fluctuations in the market prices of securities sold short, may require purchasing the securities at prices which differ from the market value reflected on the Statement of Assets and Liabilities. The Funds are liable for any dividends or interest payable on securities while those securities are in a short position and are recorded as dividend or interest expense in the Statement of Operations. As collateral for its short positions, the Funds are required under the 1940 Act to maintain segregated assets consisting of cash, cash equivalents or liquid securities. These segregated assets are valued consistent with Note 1A above. These segregated assets are required to be adjusted daily to reflect changes in the market value of the securities sold short.
G. Security Transactions and Investment Income — Security transactions are accounted for on the date the securities are purchased or sold (trade date). Realized gains and losses are reported on an identified cost basis. Dividend income is accrued as of the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income is recognized on the accrual basis, including the amortization of premiums and accretion of discounts on debt securities.
H. Expenses — Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses are allocated to the Funds on the basis of relative net assets. Class specific expenses, such as 12b-1 fees, are borne by that class. Income, other expenses and realized and unrealized gains and losses of a Fund are allocated to each respective class in proportion to the relative net assets of each class.
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I. Distributions to Shareholders — Distributions to shareholders are recorded on the ex-dividend date. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes.
J. Taxes — The Funds intend to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute all of their taxable net income and net realized gains sufficient to relieve them from all, or substantially all, federal income, excise and state income taxes. Therefore, no provision for federal or state income tax is required.
The evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns is required to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. For all open tax years (September 30, 2007—September 30, 2010) and all major taxing jurisdictions through the end of the reporting period, the Fund’s management has completed a review and evaluation and has determined that no tax liability is required and no additional disclosures are needed as of March 31, 2011.
K. Earnings Credits — Under the fee agreement with the custodian, the Funds may earn credits based on overnight custody cash balances. These credits are utilized to reduce related custodial expenses. The custodian fees disclosed in the Statement of Operations are before the reduction in expense from the related earnings credits.
L. Use of Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
M. Indemnifications — Under the Funds’ organizational documents, its Officers and Directors are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnification to other parties. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred, and may not occur. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
2. Management Fees and Other Transactions with Affiliates
Security Investors, LLC (SI) pays the Sub-Advisor out of the advisory fees it receives. Management fees are paid monthly to SI, based on the following annual rates for the period ended March 31, 2011:
Management | ||||
Fees (as a % | ||||
of net assets) | ||||
All Cap Value Fund | 0.70 | % | ||
Alpha Opportunity Fund | 1.25 | % | ||
Large Cap Core Fund | 0.75 | % | ||
Global Fund | 1.00 | % | ||
Global Institutional Fund | 1.00 | % | ||
Mid Cap Value Fund | 0.78 | %1 | ||
Mid Cap Value Institutional Fund | 0.75 | % | ||
Large Cap Concentrated Growth Fund | 0.75 | % | ||
Small Cap Growth Fund | 0.85 | % | ||
Small Cap Value Fund | 1.00 | % | ||
Large Cap Value Fund | 0.65 | % | ||
Large Cap Value Institutional Fund | 0.65 | % | ||
Mid Cap Growth Fund | 0.75 | % |
1 | Management fees are payable at an annual rate of 1.00% of the average daily net assets of $200 million or less, and 0.75% of the average daily net assets of the Mid Cap Value Fund in excess of $200 million. |
SI also acts as the administrative agent and transfer agent for the Funds, and as such performs administrative functions, transfer agency and dividend disbursing services, and the bookkeeping, accounting and pricing functions for each Fund. For these services, SI receives the following:
Administrative Fees | ||||
(as a % of net assets) | ||||
All Cap Value Fund | 0.095 | % | ||
Alpha Opportunity Fund | 0.15 | % | ||
Large Cap Core Fund | 0.095 | % | ||
Global Fund | greater of 0.15% or $60,000 | |||
Global Institutional Fund | 0.15 | % | ||
Mid Cap Value Fund | 0.095 | % | ||
Mid Cap Value Institutional Fund | 0.095 | % | ||
Large Cap Concentrated Growth Fund | 0.095 | % | ||
Small Cap Growth Fund | 0.095 | % | ||
Small Cap Value Fund | 0.095 | % | ||
Large Cap Value Fund | 0.095 | % | ||
Large Cap Value Institutional Fund | 0.095 | % | ||
Mid Cap Growth Fund | 0.095 | % | ||
Minimum charge per Fund | $ | 25,000 | 1 | |
Certain out-of-pocket charges | Varies |
1 | SI has agreed not to charge the $25,000 minimum fee on the All Cap Value Fund. |
SI is paid the following for providing transfer agent services to the Funds:
Annual per account charge | $ | 5.00 – $8.00 | ||
Transaction fee | $ | 0.60 – $1.10 | ||
Annual minimum charge (per Fund) | $ | 25,000 | 1 | |
Certain out-of-pocket charges | Varies |
1 | SI has agreed not to charge the $25,000 minimum fee on the All Cap Value Fund. |
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The investment advisory contracts for the following Funds provide that the total expenses be limited to a percentage of average net assets for each class of shares, exclusive of brokerage costs, dividends on securities sold short, expenses of other investment companies in which a Fund invests, interest, taxes, litigation, indemnification and extraordinary expenses (as determined under generally accepted accounting principles). The limits are listed below:
Effective | Contract | |||||||||||
Limit | Date | End Date | ||||||||||
All Cap Value Fund — A-Class | 1.27 | % | 2/1/2010 | 1/31/2012 | ||||||||
All Cap Value Fund — C-Class | 2.02 | % | 2/1/2010 | 1/31/2012 | ||||||||
All Cap Value Fund — Institutional Class | 1.02 | % | 2/1/2010 | 1/31/2012 | ||||||||
Alpha Opportunity Fund — A-Class | 2.11 | % | 2/1/2010 | 1/31/2012 | ||||||||
Alpha Opportunity Fund — B-Class | 2.86 | % | 2/1/2010 | 1/31/2012 | ||||||||
Alpha Opportunity Fund — C-Class | 2.86 | % | 2/1/2010 | 1/31/2012 | ||||||||
Alpha Opportunity Fund — Institutional Class | 1.86 | % | 2/1/2010 | 1/31/2012 | ||||||||
Global Institutional Fund | 1.00 | % | 8/24/2009 | 1/31/2012 | ||||||||
Mid Cap Value Institutional Fund | 0.90 | % | 4/13/2009 | 3/31/2012 | ||||||||
Large Cap Concentrated Growth Fund — A-Class | 1.35 | % | 1/11/2007 | 1/31/2012 | ||||||||
Large Cap Concentrated Growth Fund — B-Class | 2.10 | % | 1/11/2007 | 1/31/2012 | ||||||||
Large Cap Concentrated Growth Fund — C-Class | 2.10 | % | 1/11/2007 | 1/31/2012 | ||||||||
Small Cap Value Fund — A-Class | 1.30 | % | 8/24/2009 | 1/31/2012 | ||||||||
Small Cap Value Fund — C-Class | 2.05 | % | 8/24/2009 | 1/31/2012 | ||||||||
Small Cap Value Fund — Institutional Class | 1.05 | % | 8/24/2009 | 1/31/2012 | ||||||||
Large Cap Value Fund — A-Class | 1.15 | % | 2/1/2010 | 1/31/2012 | ||||||||
Large Cap Value Fund — B-Class | 1.90 | % | 2/1/2010 | 1/31/2012 | ||||||||
Large Cap Value Fund — C-Class | 1.90 | % | 2/1/2010 | 1/31/2012 | ||||||||
Large Cap Value Institutional Fund | 0.96 | % | 2/1/2010 | 1/31/2012 |
SI is entitled to reimbursement by the All Cap Value Fund, Alpha Opportunity Fund, Global Institutional Fund, Mid Cap Value Institutional Fund, Large Cap Concentrated Growth Fund, Small Cap Value Fund, Large Cap Value Fund and the Large Cap Value Institutional Fund for fees waived or expenses reimbursed during any of the previous 36 months, beginning on the date of the expense limitation agreement, if on any day the estimated operating expenses are less than the indicated percentages. As of March 31, 2011, the amount of fees waived or expenses reimbursed in the All Cap Value Fund, Alpha Opportunity Fund, Global Institutional Fund, Mid Cap Value Institutional Fund, Large Cap Concentrated Growth Fund, Small Cap Value Fund, Large Cap Value Fund and the Large Cap Value Institutional Fund were $63,659, $209,474, $158,221, $538,821, $535,548, $147,132, $306,984 and $92,122, respectively. For the six months ended March 31, 2011, no amounts were recouped by SI.
The Funds have adopted Distribution Plans related to the offering of A-Class, B-Class and C-Class shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The plans provide for payments at an annual rate of 1.00% of the average daily net assets of each Fund’s B-Class and C-Class shares, and 0.25% of the average daily net assets of each Fund’s A-Class shares. Effective August 25, 2005, the Global Fund ceased charging 12b-1 fees on B-Class shares in accordance with the FINRA sales cap regulations. Effective August 1, 2007, the Large Cap Value Fund ceased charging 12b-1 fees on B-Class shares in accordance with the FINRA sales cap regulations. These fees may be reinstated at any time.
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the six months ended March 31, 2011, RDL retained sales charges of $97,577, $14,365 and $8,550 relating to sales of A-Class shares of the Equity Fund, Large Cap Value Fund and the Mid Cap Growth Fund, respectively.
Certain officers and directors of the Funds are also officers and/or directors of Security Benefit Life Insurance Company, a subsidiary of Security Benefit Corporation, and its affiliates, which include Security Investors, Security Global Investors (SGI), SDI, and RDL.
At March 31, 2011, Security Benefit Corporation and its subsidiaries owned over five percent of the outstanding shares of the Funds, as follows:
Percent of | ||||
outstanding | ||||
Fund | shares owned | |||
All Cap Value Fund | 30.93 | % | ||
Alpha Opportunity Fund | 16.06 | % | ||
Large Cap Core Fund | 14.83 | % | ||
Global Fund | 9.99 | % | ||
Global Institutional Fund | 100 | % | ||
Large Cap Concentrated Growth Fund | 8.95 | % | ||
Small Cap Growth Fund | 20.99 | % | ||
Small Cap Value Fund | 15.85 | % | ||
Large Cap Value Fund | 19.26 | % | ||
Large Cap Value Institutional Fund | 100 | % | ||
Mid Cap Growth Fund | 9.38 | % |
3. Investment Transactions
Investment transactions for the six months ended March 31, 2011, (excluding overnight investments and short-term commercial paper) were as follows:
Purchases | Proceeds from Sales | |||||||
All Cap Value Fund | $ | 722,335 | $ | 428,071 | ||||
Alpha Opportunity Fund | 26,768,503 | 28,250,616 | ||||||
Large Cap Core Fund | 83,614,121 | 94,512,976 | ||||||
Global Fund | 112,913,069 | 119,575,760 | ||||||
Global Institutional Fund | 5,198,893 | 5,012,262 | ||||||
Mid Cap Value Fund | 230,062,534 | 172,043,101 | ||||||
Mid Cap Value Institutional Fund | 122,361,240 | 72,673,168 | ||||||
Large Cap Concentrated Growth Fund | 30,606,201 | 30,733,483 | ||||||
Small Cap Growth Fund | 8,041,757 | 8,029,039 | ||||||
Small Cap Value Fund | 3,576,661 | 1,941,641 | ||||||
Large Cap Value Fund | 4,239,803 | 11,687,001 | ||||||
Large Cap Value Institutional Fund | 351,777 | 475,298 | ||||||
Mid Cap Growth Fund | 65,478,034 | 70,816,542 |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
4. Options Written
Information as to options written by the Funds during the six months ended March 31, 2011, and options outstanding at March 31, 2011 is provided below:
All Cap Value Fund Written Call Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | — | $ | — | |||||
Options written | 62 | 5,787 | ||||||
Options terminated in closing purchase transactions | (41 | ) | (3,813 | ) | ||||
Options expired | — | — | ||||||
Options exercised | (11 | ) | (1,068 | ) | ||||
Balance at March 31, 2011 | 10 | $ | 906 | |||||
All Cap Value Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 8 | $ | 1,057 | |||||
Options written | 13 | 3,048 | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (11 | ) | (1,395 | ) | ||||
Options exercised | — | — | ||||||
Balance at March 31, 2011 | 10 | $ | 2,710 | |||||
Large Cap Core Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 120 | $ | 36,067 | |||||
Options written | — | — | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | — | — | ||||||
Options exercised | (120 | ) | (36,067 | ) | ||||
Balance at March 31, 2011 | — | $ | — | |||||
Mid Cap Value Fund Written Call Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 4,000 | $ | 520,297 | |||||
Options written | 14,665 | 1,354,586 | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (1,085 | ) | (155,706 | ) | ||||
Options exercised | (9,413 | ) | (1,071,322 | ) | ||||
Balance at March 31, 2011 | 8,167 | $ | 647,855 | |||||
Mid Cap Value Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 8,745 | $ | 1,059,209 | |||||
Options written | 5,338 | 1,227,709 | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (10,048 | ) | (1,206,445 | ) | ||||
Options exercised | — | — | ||||||
Balance at March 31, 2011 | 4,035 | $ | 1,080,473 | |||||
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Mid Cap Value Institutional Fund Written Call Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 1,400 | $ | 182,102 | |||||
Options written | 5,949 | 548,526 | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (440 | ) | (63,143 | ) | ||||
Options exercised | (3,589 | ) | (404,725 | ) | ||||
Balance at March 31, 2011 | 3,320 | $ | 262,760 | |||||
Mid Cap Value Institutional Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 3,274 | $ | 397,441 | |||||
Options written | 2,127 | 486,902 | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (3,796 | ) | (456,425 | ) | ||||
Options exercised | — | — | ||||||
Balance at March 31, 2011 | 1,605 | $ | 427,918 | |||||
Small Cap Value Fund Written Call Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | — | $ | — | |||||
Options written | 118 | 9,961 | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (6 | ) | (861 | ) | ||||
Options exercised | — | — | ||||||
Balance at March 31, 2011 | 112 | $ | 9,100 | |||||
Small Cap Value Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 17 | $ | 1,946 | |||||
Options written | — | — | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | (17 | ) | (1,946 | ) | ||||
Options exercised | — | — | ||||||
Balance at March 31, 2011 | — | $ | — | |||||
Large Cap Value Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 75 | $ | 22,542 | |||||
Options written | — | — | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | — | — | ||||||
Options exercised | (75 | ) | (22,542 | ) | ||||
Balance at March 31, 2011 | — | $ | — | |||||
Large Cap Value Institutional Fund Written Put Options
Number of | Premium | |||||||
Contracts | Amount | |||||||
Balance at September 30, 2010 | 5 | $ | 1,503 | |||||
Options written | — | — | ||||||
Options terminated in closing purchase transactions | — | — | ||||||
Options expired | — | — | ||||||
Options exercised | (5 | ) | (1,503 | ) | ||||
Balance at March 31, 2011 | — | $ | — | |||||
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
5. Repurchase Agreements
Information related to repurchase agreements as of March 31, 2011, were as follows:
Terms of | Repurchase | Collateral | Collateral | Collateral | Collateral | |||||||||||||||||||||||||||
Fund | Counterparty | Agreement | Face Value | Price | Type | Rate | Maturity | Value | ||||||||||||||||||||||||
Alpha Opportunity Fund | State Street | 0.01% due 04/01/11 | $ | 1,366,517 | $ | 1,366,517 | U.S. Treasury Note | 1.00 | % | 04/30/2012 | $ | 854,433 | ||||||||||||||||||||
U.S. Treasury Note | 3.13 | % | 04/30/2017 | 541,952 | ||||||||||||||||||||||||||||
1,396,385 | ||||||||||||||||||||||||||||||||
Mid Cap Value Fund | UMB Financial Corp | 0.03% due 04/01/11 | $ | 55,424,000 | $ | 55,424,046 | Federal Home Loan Bank | 0.34 | % | 12/15/2011 | 20,030,622 | |||||||||||||||||||||
Freddie Mac | 1.38 | % | 02/25/2014 | 20,037,551 | ||||||||||||||||||||||||||||
Fannie Mae | 1.38 | % | 12/30/2013 | 16,465,058 | ||||||||||||||||||||||||||||
56,533,231 | ||||||||||||||||||||||||||||||||
Mid Cap Value Institutional Fund | UMB Financial Corp | 0.03% due 04/01/11 | $ | 27,592,000 | $ | 27,592,023 | Freddie Mac | 2.50 | % | 01/17/2014 | 12,932,818 | |||||||||||||||||||||
Federal Farm Credit Bank | 0.92 | % | 11/26/2013 | 14,659,219 | ||||||||||||||||||||||||||||
27,592,037 | ||||||||||||||||||||||||||||||||
6. Derivative Investment Holdings Categorized by Risk Exposure
U.S. generally accepted accounting principles requires enhanced disclosures to enable investors to better understand how and why the Funds use derivative instruments, how these derivative instruments are accounted for and their effects on the Funds’ financial position and results of operations. None of the derivatives currently held by the Funds are being used as hedging instruments.
Certain Funds seek to gain exposure to their respective benchmarks by investing in currency, and financial-linked derivative instruments, including futures and options. The following table represents the notional amount of derivative instruments outstanding, as an approximate percentage of the Fund’s net assets on a daily basis, while the risk to the Fund is limited to the profit earned on such derivatives:
Approximate percentage | ||||
of Fund’s net assets | ||||
Fund | on a daily basis | |||
All Cap Value Fund | 0 | %* | ||
Alpha Opportunity Fund | 25 | % | ||
Mid Cap Value Fund | 0 | %* | ||
Mid Cap Value Institutional Fund | 0 | %* | ||
Small Cap Value Fund | 0 | %* |
* | Less than 1%. |
The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of March 31, 2011:
Location on the Statements of Assets and Liabilities
Derivative Investments Type | Asset Derivatives | Liability Derivatives | ||
Futures — equity contracts | Receivable: Variation margin | Payable: Variation margin | ||
Written Options — equity contracts | Written Options, at value |
The following table sets forth the fair value of the Funds’ derivative contracts by primary risk exposure as of March 31, 2011:
Asset Derivative Investments Value
Futures | Written Options | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts* | Contracts | Total | |||||||||
Alpha Opportunity Fund | $ | 14,599 | $ | — | $ | 14,599 |
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Liability Derivative Investments Value
Futures | Written Options | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts* | Contracts | Total | |||||||||
All Cap Value Fund | $ | — | $ | 2,202 | $ | 2,202 | ||||||
Mid Cap Value Fund | — | 1,000,605 | 1,000,605 | |||||||||
Mid Cap Value Institutional Fund | — | 396,400 | 396,400 | |||||||||
Small Cap Value Fund | — | 4,560 | 4,560 |
* | Includes cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities. |
The following is a summary of the location of derivative investments on the Funds’ Statements of Operations as of March 31, 2011:
Derivative Investment Type | Location of Gain (Loss) on Derivatives | |
Futures — equity contracts | Net realized gain (loss) on futures contracts and change in net unrealized appreciation (depreciation) on futures contracts | |
Written Options — equity contracts | Net realized gain (loss) on options written and change in net unrealized appreciation (depreciation) on options written |
The following is a summary of the Funds’ realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized in the Statements of Operations categorized by primary risk exposure for the six months ended March 31, 2011:
Realized Gain (Loss) on Derivative Investments Recognized in the Statement of Operations
Futures | Written Options | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts | Contracts | Total | |||||||||
All Cap Value Fund | $ | — | $ | 1,642 | $ | 1,642 | ||||||
Alpha Opportunity Fund | 572,949 | — | 572,949 | |||||||||
Mid Cap Value Fund | — | 1,362,151 | 1,362,151 | |||||||||
Mid Cap Value Institutional Fund | — | 519,568 | 519,568 | |||||||||
Small Cap Value Fund | — | 2,807 | 2,807 |
Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized in the Statement of Operations
Futures | Written Options | |||||||||||
Equity | Equity | |||||||||||
Fund | Contracts | Contracts | Total | |||||||||
All Cap Value Fund | $ | — | $ | 966 | $ | 966 | ||||||
Alpha Opportunity Fund | (34,434 | ) | — | (34,434 | ) | |||||||
Large Cap Core Fund | — | (12,667 | ) | (12,667 | ) | |||||||
Mid Cap Value Fund | — | 89,797 | 89,797 | |||||||||
Mid Cap Value Institutional Fund | — | 57,716 | 57,716 | |||||||||
Small Cap Value Fund | — | 3,914 | 3,914 | |||||||||
Large Cap Value Fund | — | (7,916 | ) | (7,916 | ) | |||||||
Large Cap Value Institutional Fund | — | (528 | ) | (528 | ) |
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7. Federal Tax Matters
For federal income tax purposes, the amounts of unrealized appreciation (depreciation) on investments at March 31, 2011, were as follows:
�� | ||||||||||||||||
Net unrealized | ||||||||||||||||
Investment | Gross unrealized | Gross unrealized | appreciation | |||||||||||||
Fund Name | Tax Cost | appreciation | (depreciation) | (depreciation) | ||||||||||||
All Cap Value Fund | $ | 2,859,572 | $ | 657,572 | $ | (28,870 | ) | $ | 628,702 | |||||||
Alpha Opportunity Fund | 14,560,225 | 1,565,482 | (815,101 | ) | 750,381 | |||||||||||
Large Cap Core Fund | 172,433,499 | 36,079,806 | (4,618,721 | ) | 31,461,085 | |||||||||||
Global Fund | 84,664,314 | 11,108,605 | (1,294,059 | ) | 9,814,546 | |||||||||||
Global Institutional Fund | 4,091,912 | 503,325 | (56,563 | ) | 446,762 | |||||||||||
Mid Cap Value Fund | 1,257,402,797 | 391,867,059 | (35,514,115 | ) | 356,352,944 | |||||||||||
Mid Cap Value Institutional Fund | 528,776,083 | 151,829,282 | (9,301,353 | ) | 142,527,929 | |||||||||||
Large Cap Concentrated Growth | 36,969,935 | 6,335,909 | (215,426 | ) | 6,120,483 | |||||||||||
Small Cap Growth Fund | 13,378,412 | 5,050,148 | (171,212 | ) | 4,878,936 | |||||||||||
Small Cap Value Fund | 10,131,453 | 1,808,941 | (235,341 | ) | 1,573,600 | |||||||||||
Large Cap Value Fund | 44,891,762 | 10,853,917 | (1,711,189 | ) | 9,142,728 | |||||||||||
Large Cap Value Institutional Series | 2,512,433 | 647,370 | (22,947 | ) | 624,423 | |||||||||||
Security Mid Cap Growth Fund | 75,946,898 | 13,590,462 | (701,137 | ) | 12,889,325 |
The tax character of distributions paid during the fiscal year ended September 30, 2010 is as follows:
Ordinary | Capital | Return of | ||||||||||||||
Income | Gain | Capital | Total | |||||||||||||
All Cap Value Fund | $ | 3,710 | $ | — | $ | — | $ | 3,710 | ||||||||
Global Institutional Fund | 97,135 | — | — | 97,135 | ||||||||||||
Mid Cap Value Fund | 1,178,918 | — | — | 1,178,918 | ||||||||||||
Mid Cap Value Institutional Fund | 10,187,733 | 1,221,429 | — | 11,409,162 | ||||||||||||
Small Cap Value Fund | 161,456 | 34,045 | — | 195,501 | ||||||||||||
Large Cap Value Fund | 405,457 | — | — | 405,457 | ||||||||||||
Large Cap Value Institutional Fund | 23,939 | — | — | 23,939 |
Note: For federal income tax purposes, short term capital gain distributions are treated as ordinary income distributions.
As of September 30, 2010, the components of distributable earnings on a tax basis were:
Undistributed | Undistributed | Accumulated | Unrealized | Total | ||||||||||||||||
Ordinary | Long-Term | Capital and | Appreciation | Accumulated | ||||||||||||||||
Income | Capital Gain | Other Losses* | (Depreciation)** | Earnings/(Deficit) | ||||||||||||||||
All Cap Value Fund | $ | 46,034 | $ | 114,631 | $ | — | $ | 163,238 | $ | 323,903 | ||||||||||
Alpha Opportunity Fund | — | — | (12,560,228 | ) | (458,114 | ) | (13,018,342 | ) | ||||||||||||
Large Cap Core Fund | 505,424 | — | (34,280,051 | ) | 8,835,577 | (24,939,050 | ) | |||||||||||||
Global Fund | 476,659 | — | (42,959,604 | ) | 7,022,296 | (35,460,649 | ) | |||||||||||||
Global Institutional Fund | 17,497 | — | (1,821,961 | ) | 311,309 | (1,493,155 | ) | |||||||||||||
Mid Cap Value Fund | 2,564,377 | — | (78,016,101 | ) | 137,589,818 | 62,138,094 | ||||||||||||||
Mid Cap Value Institutional Fund | 14,921,262 | 6,926,441 | — | 56,800,954 | 78,648,657 | |||||||||||||||
Large Cap Concentrated Growth Fund | 129,025 | — | (13,326,902 | ) | 2,731,244 | (10,466,633 | ) | |||||||||||||
Small Cap Growth Fund | — | — | (6,716,262 | ) | 2,880,820 | (3,835,442 | ) | |||||||||||||
Small Cap Value Fund | 461,897 | 675,830 | — | (165,198 | ) | 972,529 | ||||||||||||||
Large Cap Value Fund | 212,689 | — | (17,315,758 | ) | 1,246,659 | (15,856,410 | ) | |||||||||||||
Large Cap Value Institutional Fund | 15,398 | — | (361,759 | ) | 165,976 | (180,385 | ) | |||||||||||||
Mid Cap Growth Fund | — | — | (32,298,267 | ) | 9,417,520 | (22,880,747 | ) |
* | Certain Funds had net capital loss carryovers and deferred post October losses as identified elsewhere in the Notes to the Financial Statements. | |
** | The differences between book-basis and tax-basis unrealized appreciation (depreciation) are attributable primarily to the tax deferral of wash sale losses, the differences between book and tax basis passive foreign investment companies and bond discount accretion. |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
For the year ended September 30, 2010, the capital loss carryovers utilized or expired and the accumulated net realized loss on sales of investments for federal income tax purposes which are available to offset future taxable gains are shown in the table below. The post-October losses that are deferred to the first day of the next fiscal year are as follows:
Deferred | ||||||||||||||||||||
Capital Loss | Capital Loss | Remaining | Post- | |||||||||||||||||
Carryovers | Carryovers | Capital Loss | October | |||||||||||||||||
Utilized | Expired | Carryovers | Expires In | Losses | ||||||||||||||||
All Cap Value Fund | $ | 4,080 | $ | — | $ | — | 2017 | $ | — | |||||||||||
Alpha Opportunity Fund | $ | — | $ | — | $ | 8,215,458 | 2017 | $ | 2,843 | |||||||||||
— | — | 4,341,927 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 12,557,385 | |||||||||||||||
Large Cap Core Fund | $ | — | $ | — | $ | 10,341,572 | 2017 | $ | 2,315,300 | |||||||||||
— | — | 21,623,180 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 31,964,752 | |||||||||||||||
Global Fund | $ | — | $ | 674,209 | $ | — | 2010 | $ | 301,732 | |||||||||||
— | — | 37,300,368 | 2017 | |||||||||||||||||
— | — | 5,357,504 | 2018 | |||||||||||||||||
$ | — | $ | 674,209 | $ | 42,657,872 | |||||||||||||||
Global Institutional Fund | $ | — | $ | — | $ | 1,263,838 | 2017 | $ | 12,655 | |||||||||||
— | — | 545,469 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 1,809,307 | |||||||||||||||
Mid Cap Value Fund | $ | — | $ | — | $ | 3,357,672 | 2017 | $ | 3,790,876 | |||||||||||
— | — | 70,867,553 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 74,225,225 | |||||||||||||||
Large Cap Concentrated Growth Fund* | $ | — | $ | 2,582,076 | $ | — | 2010 | $ | — | |||||||||||
— | — | 3,390,876 | 2011 | |||||||||||||||||
— | — | 38,639 | 2012 | |||||||||||||||||
— | — | 7,441,695 | 2017 | |||||||||||||||||
— | — | 2,455,692 | 2018 | |||||||||||||||||
$ | — | $ | 2,582,076 | $ | 13,326,902 | |||||||||||||||
Small Cap Growth Fund | $ | — | $ | — | $ | 4,589,755 | 2017 | $ | — | |||||||||||
— | — | 2,126,507 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 6,716,262 | |||||||||||||||
Large Cap Value Fund | $ | — | $ | — | $ | 7,053,807 | 2017 | $ | 28,441 | |||||||||||
— | — | 10,233,510 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 17,287,317 | |||||||||||||||
Large Cap Value Institutional Fund | $ | — | $ | — | $ | 70,714 | 2017 | $ | 28,663 | |||||||||||
— | — | 262,382 | 2018 | |||||||||||||||||
$ | — | $ | — | $ | 333,096 | |||||||||||||||
Mid Cap Growth Fund | $ | — | $ | 567,035 | $ | — | 2010 | $ | — | |||||||||||
— | — | 16,944 | 2011 | |||||||||||||||||
— | — | 26,755,106 | 2017 | |||||||||||||||||
— | — | 5,526,217 | 2018 | |||||||||||||||||
$ | — | $ | 567,035 | $ | 32,298,267 | |||||||||||||||
* | Subject to limitations pursuant to Section 382 of the Internal Revenue Code. |
Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are primarily due to post-October losses, losses deferred due to wash sales, foreign currency gains and losses, and the “mark-to-market” of certain passive foreign investment companies (PFICs) for tax purposes. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise.
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
8. Affiliated Transactions
Investments representing 5% or more of the outstanding voting shares of a portfolio company of a fund, or control of or by, or common control under Guggenheim Partners, LLC, result in that portfolio company being considered an affiliated company of such fund, as defined in the 1940 Act. Transactions during the six months ended March 31, 2011 in which the portfolio company is an “affiliated person” are as follows:
Value | Value | Shares | Investment | |||||||||||||||||||||||
Fund | Security | 09/30/2010 | Additions | Reductions | 03/31/2011 | 03/31/2011 | Income | |||||||||||||||||||
Alpha Opportunity Fund | Exchange Traded Fund: | |||||||||||||||||||||||||
Guggenheim Timber ETF | $ | 48,887 | $ | 110,262 | $ | (157,636 | ) | $ | — | — | $ | — | ||||||||||||||
Mid Cap Value Fund | Common Stock: | |||||||||||||||||||||||||
IXYS Corp. | 22,347,000 | 765,600 | — | 32,232,000 | 2,400,000 | — | ||||||||||||||||||||
Maxwell Technologies, Inc. | 21,691,467 | 330,400 | — | 25,986,169 | 1,504,700 | — | ||||||||||||||||||||
Thermoenergy Corp. | 810,552 | — | — | 594,405 | 2,701,839 | — | ||||||||||||||||||||
Preferred Stock: | ||||||||||||||||||||||||||
Thermoenergy Corp. | 751,901 | — | — | 551,394 | 858,334 | — | ||||||||||||||||||||
Warrant: | ||||||||||||||||||||||||||
Thermoenergy Corp. | 1,106,908 | — | — | 708,641 | 13,733,344 | — | ||||||||||||||||||||
Total | 46,707,828 | 1,096,000 | — | 60,072,609 | 21,198,217 | — | ||||||||||||||||||||
Mid Cap Value Institutional Fund | Common Stock: | |||||||||||||||||||||||||
Hydrogen Corp. | 3,924 | — | — | 25,314 | 1,265,700 | — | ||||||||||||||||||||
Total | 3,924 | — | — | 25,314 | 1,265,700 | — |
9. Alpha Opportunity Fund
The Fund contracted with Lehman Brothers International Europe (“LBIE”) to provide prime brokerage services related to the Fund’s short selling. On September 15, 2008, LBIE was placed into administration and a third party administrator was named (the “Administrator”). The Fund’s exposure to LBIE consists of short sale proceeds held by LBIE, and restricted long positions held at the Fund’s custodian, as collateral for said short sales. The Fund has delivered a Notice of Termination of Loans to LBIE and the Administrator. The Fund is working to resolve these issues with LBIE and the Administrator. As of March 31, 2011, included in the Statement of Assets and Liabilities are the value of restricted long positions of $8,472,434, cash collateral of $550,800, restricted cash representing the value of short sale proceeds of $4,410,316 and liabilities for short sales of $7,341,377 representing the value of securities sold short at the date the short sales were deemed by the Fund to have been terminated. If these short sales had not been terminated, the value of the liability related to these securities sold short would have been $(7,792,046) as of March 31, 2011 resulting in a decrease in net assets of $450,669 (or 3.3%). Until such time as the liability for short sales is settled and all restrictions are removed by LBIE and LBI, the Fund cannot sell such restricted long positions and/or utilize the restricted cash balances to achieve the Fund’s investment objectives and/or meet Fund redemption or other Fund obligations. Based on the ultimate terms of such settlement, the value assigned to these positions may ultimately differ from the fair valuations assigned to them by the Fund and there is no guaranty that the Fund will ultimately recover the full value of the assets that are subject to restrictions. Accordingly, a settlement could ultimately result in the Fund realizing values that are materially different from those indicated herein, which would materially impact the Fund’s net asset value (either positively or negatively). As of the close of business on October 3, 2008, and until further notice, the Fund is not accepting subscriptions for shares from either new or existing shareholders.
10. Fair Value Measurement
In accordance with U.S. generally accepted accounting principles, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. A three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds’ investments. The inputs are summarized in the three broad levels listed below:
Level 1 | — | quoted prices in active markets for identical securities. |
Level 2 | — | other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Level 3 — significant unobservable inputs (including the fund’s own assumptions used to determine the fair value of investments).
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following table provides the fair value measurement of applicable Fund assets by level within the fair value hierarchy as of March 31, 2011. These assets are measured on a recurring basis.
Level 1 | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Investments | Other Financial | Investments | Investments | |||||||||||||||||
Fund | In Securities | Instruments | In Securities | In Securities | Total | |||||||||||||||
Assets | ||||||||||||||||||||
All Cap Value Fund | $ | 3,488,274 | $ | — | $ | — | $ | — | $ | 3,488,274 | ||||||||||
Alpha Opportunity Fund | 12,923,809 | 14,599 | 2,386,797 | — | 15,325,205 | |||||||||||||||
Large Cap Core Fund | 203,894,584 | — | — | — | 203,894,584 | |||||||||||||||
Global Fund | 91,391,095 | — | 3,087,765 | — | 94,478,860 | |||||||||||||||
Global Institutional Fund | 4,045,887 | — | 492,787 | — | 4,538,674 | |||||||||||||||
Mid Cap Value Fund | 1,546,325,945 | — | 67,429,796 | — | 1,613,755,741 | |||||||||||||||
Mid Cap Value Institutional Fund | 638,201,787 | — | 33,102,225 | — | 671,304,012 | |||||||||||||||
Large Cap Concentrated Growth Fund | 43,090,418 | — | — | — | 43,090,418 | |||||||||||||||
Small Cap Growth Fund | 18,257,348 | — | — | — | 18,257,348 | |||||||||||||||
Small Cap Value Fund | 11,695,878 | — | 9,175 | — | 11,705,053 | |||||||||||||||
Large Cap Value Fund | 54,034,490 | — | — | — | 54,034,490 | |||||||||||||||
Large Cap Value Institutional Fund | 3,136,856 | — | — | — | 3,136,856 | |||||||||||||||
Mid Cap Growth Fund | 88,835,682 | — | 541 | — | 88,836,223 | |||||||||||||||
Liabilities | ||||||||||||||||||||
All Cap Value Fund | $ | — | $ | 2,202 | $ | — | $ | — | $ | 2,202 | ||||||||||
Alpha Opportunity Fund | 13,640 | — | — | 7,341,377 | 7,355,017 | |||||||||||||||
Large Cap Core Fund | — | — | — | — | — | |||||||||||||||
Global Fund | — | — | — | — | — | |||||||||||||||
Global Institutional Fund | — | — | — | — | — | |||||||||||||||
Mid Cap Value Fund | — | 1,000,605 | — | — | 1,000,605 | |||||||||||||||
Mid Cap Value Institutional Fund | — | 396,400 | — | — | 396,400 | |||||||||||||||
Large Cap Concentrated Growth Fund | — | — | — | — | — | |||||||||||||||
Small Cap Growth Fund | — | — | — | — | — | |||||||||||||||
Small Cap Value Fund | — | 4,560 | — | — | 4,560 | |||||||||||||||
Large Cap Value Fund | — | — | — | — | — | |||||||||||||||
Large Cap Value Institutional Fund | — | — | — | — | — | |||||||||||||||
Mid Cap Growth Fund | — | — | — | — | — |
The Funds adopted updated provisions surrounding fair value measurements and disclosures effective March 31, 2010. This update applies to the Funds’ disclosures about transfers in and out of all Levels of the fair value hierarchy on a gross basis and the reasons for the transfers, as well as to disclosures about the valuation techniques and inputs used to measure fair value for investments that fall in either Level 2 or Level 3 fair value hierarchy. Effective for interim and annual periods beginning after December 15, 2010, purchases, sales, issuances and settlements must be shown on a gross basis in the Level 3 rollforward rather than as one net number.
For the six months ended March 31, 2011, there were no significant transfers between Levels.
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value for the six months ended March 31, 2011:
LEVEL 3 — Fair value measurement using significant unobservable inputs
Securities Sold Short | Total | |||||||
Alpha Opportunity Fund | ||||||||
Liabilities: | ||||||||
Beginning Balance | $ | 7,341,377 | $ | 7,341,377 | ||||
Total realized gains or losses included in earnings | — | — | ||||||
Total unrealized gains or losses included in earnings | — | — | ||||||
Purchases, sales, issuances, and settlements (net) | — | — | ||||||
Transfers in and/or out of Level 3 | — | — | ||||||
Ending Balance | $ | 7,341,377 | $ | 7,341,377 | ||||
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (concluded)
11. Other Liabilities
Mid Cap Value Fund, Mid Cap Value Institutional Fund and Large Cap Core Fund each wrote put option contracts through Lehman Brothers Inc., (“Lehman”) that were exercised prior to the option contracts’ expiration and prior to the bankruptcy filing by Lehman, during September, 2008. However, these transactions have not settled and the securities have not been delivered to the Funds as of March 31, 2011.
Although the ultimate resolution of these transactions is uncertain, the Funds have recorded a liability on their respective books equaI to the difference between the strike price on the put options and the market price of the underlying security on the exercise date. The amount of the liability recorded by the Funds as of March 31, 2011 was $473,594 for Mid Cap Value Fund, $15,940 for Mid Cap Value Institutional Fund, and $18,615 for Large Cap Core Fund.
12. Subsequent Events
Reverse Share Splits
Effective April 8, 2011, the Large Cap Core Fund, Large Cap Value Fund and the Mid Cap Growth Fund each underwent a 1-for-4 reverse share split. The effect of the transaction was to divide the number of outstanding shares of the Fund by four, resulting in a corresponding increase in the net asset value per share. The shares outstanding and net asset value per share on the statement of assets and liabilities as of March 31, 2011, the capital share activity presented in the statement of changes in net assets for each of the two years in the period then ended, and the per share data in the financial highlights for each of the years in the five-year period then ended have been given retroactive effect to reflect these reverse share splits. There were no changes in net assets, results of operations or total return as a result of these transactions.
Global Institutional Fund Liquidation
Effective April 27, 2011, the Global Institutional Fund liquidated assets and ceased operations.
Global Fund Changes
At a meeting held on February 16, 2011 the Board of Directors (the “Board”) approved the following changes with respect to the Fund, each effective on April 29, 2011:
• | The change of the Fund’s name to “MSCI EAFE Equal Weight Fund;” | ||
• | The change of the Fund’s’ investment objective to “performance that corresponds, before fees and expenses, to the price and yield performance of the MSCI EAFE Equal Weighted Index;” | ||
• | The change of the Fund’s investment strategies to reflect the new name and investment objective; | ||
• | The change of the Fund’s benchmark index in light of the foregoing changes to the Fund’s investment objective and strategies; and | ||
• | A new lower investment advisory fee of 0.70% of average daily net assets on an annual basis (instead of 1.00% currently). | ||
• | The creation of the new Institutional Class in MSCI EAFE Equal Weight Fund. |
Also, the Fund’s portfolio managers are expected to change when the new strategies are implemented.
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INFORMATION ON BOARD OF DIRECTORS AND OFFICERS (Unaudited)
DIRECTORS
The business address of each director is One Security Benefit Place, Topeka, KS 66636-0001
Name | ||
(Date of Birth) | Principal Occupations | |
Year Elected*** | During Past Five Years | |
Donald A. Chubb, Jr.** (12-14-46) 1994 | Business Broker — Griffith & Blair Realtors | |
Harry W. Craig, Jr.** (05-11-39) 2004 | Chairman, CEO, Secretary & Director — The Martin Tractor Company, Inc. | |
Jerry B. Farley** (09-20-46) 2005 | President — Washburn University | |
Penny A. Lumpkin** (08-20-39) 1993 | Partner — Vivian’s Gift Shop (Corporate Retail) Vice President — Palmer Companies, Inc. (Small Business and Shopping Center Development) Vice President — PLB (Real Estate Equipment Leasing) | |
Maynard F. Oliverius** (12-18-43) 1998 | President & Chief Executive Officer — Stormont-Vail HealthCare | |
Richard M. Goldman* (03-04-61) 2008 (President, Director & Chairman of the Board) | Senior Vice President — Security Benefit Corporation Director — First Security Benefit Life Insurance and Annuity Company of New York President — Security Investors, LLC President & Director — Security Global Investors, LLC CEO, President, & Director — Rydex Distributors, Inc. President & CEO — Rydex Holdings, LLC CEO & Director — Padco Advisors, Inc. CEO & Director — Padco Advisors II, Inc. Director — Rydex Fund Services, Inc. Director — Security Distributors, Inc. (2007-2009) Managing Member — Goldman Partners, LLC (2006-2007) President and CEO — ForstmannLeff (2003-2005) |
* | This director is deemed to be an “interested person” of the Funds under the Investment Company Act of 1940, as amended, by reason of his position with the Funds’ Investment Manager and/or the parent of the Investment Manager. This director is also an officer of the funds. | |
** | These directors serve on the Fund’s joint audit committee, the purpose of which is to meet with the independent registered public accounting firm, to review the work of the independent registered public accounting firm, and to oversee the handling by Security Investors of the accounting and financial reporting functions for the Funds. | |
*** | Each director oversees 29 Security Funds portfolios and serves until the next annual meeting, or until a successor has been duly elected and qualified. |
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INFORMATION ON BOARD OF DIRECTORS AND OFFICERS (Unaudited) (continued)
OFFICERS*
The business address of each officer is One Security Benefit Place, Topeka, KS 66636-0001
Name | ||
(Date of Birth) | Principal Occupations | |
Title – Year Elected | During Past Five Years | |
Mark P. Bronzo (11-01-60) Vice President — 2008 | Current: Portfolio Manager, Security Investors, LLC Managing Director and Chief Compliance Officer, Nationwide Separate Accounts LLC (2003-2008) | |
Keith A. Fletcher (02-18-58) Vice President — 2010 | Current: Senior Vice President, Security Investors, LLC; Vice President, Rydex Holdings, LLC; Vice President, Rydex Specialized Products, LLC; Vice President, Rydex Distributors, LLC; Vice President, Rydex Fund Services, LLC; Vice President and Director, Advisor Research Center, Inc.; and Vice President, Rydex Series Funds, Rydex ETF Trust, Rydex Dynamic Funds and Rydex Variable Trust Vice President, Security Global Investors, LLC (2010-2011); Vice President, Rydex Advisors, LLC (2010); and Vice President, Rydex Advisors II, LLC (2010) | |
Joanna M. Haigney (10-10-66) Chief Compliance Officer — 2010 | Current: Chief Compliance Officer & Secretary, Rydex Series Funds, Rydex ETF Trust, Rydex Dynamic Funds, and Rydex Variable Trust; Vice President, Rydex Holdings, LLC; Vice President, Security Benefit Asset Management Holdings, LLC; and Senior Vice President & Chief Compliance Officer, Security Investors, LLC Senior Vice President, Security Global Investors, LLC (2010-2011); Chief Compliance Officer and Senior Vice President, Rydex Advisors, LLC & Rydex Advisors II, LLC (2010) | |
Nikolaos Bonos (05-30-63) Treasurer — 2010 | Current: Senior Vice President, Security Investors, LLC; Chief Executive Officer & Manager, Rydex Specialized Products, LLC; Chief Executive Officer & President, Rydex Fund Services, LLC; Vice President, Rydex Holdings, LLC; Vice President & Treasurer, Rydex Series Funds; Rydex ETF Trust; Rydex Dynamic Funds; and Rydex Variable Trust; and Vice President, Security Benefit Asset Management Holdings, LLC Senior Vice President, Security Global Investors, LLC (2010-2011); and Senior Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC | |
Joseph M. Arruda (09-05-66) Assistant Treasurer — 2010 | Current: Vice President, Security Investors, LLC; Chief Financial Officer & Manager, Rydex Specialized Products, LLC; and Assistant Treasurer, Rydex Series Funds; Rydex Dynamic Funds; Rydex ETF Trust; and Rydex Variable Trust Vice President, Security Global Investors, LLC (2010-2011); and Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC (2010) |
* | Officers serve until the next annual meeting or until a successor has been duly elected and qualified. |
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INFORMATION ON BOARD OF DIRECTORS AND OFFICERS (Unaudited) (concluded)
OFFICERS* (concluded)
The business address of each officer is One Security Benefit Place, Topeka, KS 66636-0001
Name (Date of Birth) | Principal Occupations | |
Title – Year Elected | During Past Five Years | |
Amy J. Lee (06-05-61) Vice President — 2007 Secretary — 1987 | Current: Senior Vice President & Secretary, Security Investors, LLC; Secretary & Chief Compliance Officer, Security Distributors, Inc.; Vice President, Associate General Counsel & Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation; Associate General Counsel, First Security Benefit Life Insurance and Annuity of New York; Vice President & Assistant Secretary, Rydex Series Funds, Rydex ETF Trust, Rydex Dynamic Funds, and Rydex Variable Trust; Vice President & Secretary, Rydex Holdings, LLC Secretary, Advisor Research Center, Inc., Rydex Specialized Products, LLC, Rydex Distributors, LLC and Rydex Fund Services, LLC; and Assistant Secretary, Security Benefit Clinic and Hospital Senior Vice President & Secretary, Security Global Investors, LLC (2007-2011); Senior Vice President & Secretary, Rydex Advisors, LLC and Rydex Advisors II, LLC (2010); and Director, Brecek & Young Advisors, Inc. (2004-2008) | |
Mark A. Mitchell (08-24-64) Vice President — 2003 | Current: Portfolio Manager, Security Investors, LLC Vice President and Portfolio Manager, Security Benefit Life Insurance Company (2003-2010) | |
Joseph C. O’Connor (07-15-60) Vice President — 2008 | Current: Portfolio Manager, Security Investors, LLC Managing Director, Nationwide Separate Accounts LLC (2003-2008) | |
Daniel W. Portanova (10-02-60) Vice President — 2008 | Current: Portfolio Manager, Security Investors, LLC Managing Director, Nationwide Separate Accounts LLC (2003-2008) | |
James P. Schier (12-28-57) Vice President — 1998 | Current: Senior Portfolio Manager, Security Investors, LLC Vice President & Senior Portfolio Manager, Security Benefit Life Insurance Company (1998-2010) | |
David G. Toussaint (10-10-66) Vice President — 2005 | Current: Portfolio Manager, Security Investors, LLC Assistant Vice President and Portfolio Manager, Security Benefit Life Insurance Company. (2005-2009) |
* | Officers serve until the next annual meeting or until a successor has been duly elected and qualified. |
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OTHER INFORMATION (Unaudited)
Each of the Rydex|SGI Funds files a complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Forms N-Q of each such Fund are available on the Commission’s website at www.sec.gov. The Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1.800.SEC.0330. The portfolio holdings of each of the Rydex|SGI Funds are available on their website, www.securitybenefit.com or by calling 1.800.888.2461.
A description of the policies and procedures that the Rydex|SGI Funds use to determine how to vote proxies relating to portfolio securities is available upon request, free of charge by calling 1.800.888.2461, or accessing the U.S. Securities and Exchange Commission website at www.sec.gov. Information regarding how the Rydex|SGI Funds voted proxies relating to portfolio securities during the 12 month period ended June 30, 2010 is available upon request, free of charge by calling 1.800.888.2461, or accessing the U.S. Securities and Exchange Commission website at www.sec.gov.
The statement of additional information (“SAI”) includes additional information about the Funds’ Directors and is available upon request without charge by calling 1.800.888.2461.
Office Locations
The offices of Security Global Investors, LLC can be found in the following locations:
40 East 52nd Street
16th Floor
New York, NY 10022
(Headquarters)
16th Floor
New York, NY 10022
(Headquarters)
Four Irvington Centre
805 King Farm Boulevard
Suite 600
Rockville, MD 20850
805 King Farm Boulevard
Suite 600
Rockville, MD 20850
9401 Indian Creek Parkway
40 Corporate Woods
Suite 850
Overland Park, KS 66210
40 Corporate Woods
Suite 850
Overland Park, KS 66210
110 | THE RYDEX|SGI EQUITY FUNDS SEMI-ANNUAL REPORT
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OTHER INFORMATION (Unaudited) (concluded)
Rydex Funds, Rydex|SGI Funds, Rydex Investments, Rydex Distributors, Inc., Security Investors, LLC, Security Global Investors, LLC, Security Distributors, Inc. and Rydex Advisory Services (Collectively “Rydex|SGI”)
Our Commitment to You
When you become a Rydex|SGI investor, you entrust us with not only your hard-earned money but also with personal and financial information about you. We recognize that your relationship with us is based on trust and that you expect us to act responsibly and in your best interests. Because we have access to this private information about you, we hold ourselves to the highest standards in its safekeeping and use. This means, most importantly, that we do not sell client information to anyone—whether it is your personal information or if you are a current or former Rydex|SGI client.
The Information We Collect About You
In the course of doing business with shareholders and investors, we collect nonpublic personal information about you. You typically provide personal information when you complete a Rydex|SGI account application or when you request a transaction that involves Rydex and Rydex|SGI funds or one of the Rydex|SGI affiliated companies. “Nonpublic personal information” is personally identifiable private information about you. For example, it includes information regarding your name and address, Social Security or taxpayer identification number, assets, income, account balance, bank account information and investment activity (e.g., purchase and redemption history).
How We Handle Your Personal Information
As emphasized above, we do not sell information about current or former clients or their accounts to third parties. Nor do we share such information, except when necessary to complete transactions at your request or to make you aware of related investment products and services that we offer. Additional details about how we handle your personal information are provided below. To complete certain transactions or account changes that you direct, it may be necessary to provide identifying information to companies, individuals or groups that are not affiliated with Rydex|SGI. For example, if you ask to transfer assets from another financial institution to Rydex|SGI, we will need to provide certain information about you to that company to complete the transaction. To alert you to other Rydex|SGI investment products and services, we may share your information within the Rydex|SGI family of affiliated companies. This would include, for example, sharing your information within Rydex|SGI so we can make you aware of new Rydex and Rydex|SGI funds or the services offered through another Rydex|SGI affiliated company. In certain instances, we may contract with nonaffiliated companies to perform services for us. Where necessary, we will disclose information we have about you to these third parties. In all such cases, we provide the third party with only the information necessary to carry out its assigned responsibilities and only for that purpose. And we require these third parties to treat your private information with the same high degree of confidentiality that we do. In certain instances, we may share information with other financial institutions regarding individuals and entities in response to the U.S.A. Patriot Act. Finally, we will release information about you if you direct us to do so, if we are compelled by law to do so or in other circumstances permitted by law.
Opt Out Provisions
We do not sell your personal information to anyone. The law allows you to “opt out” of only certain kinds of information sharing with third parties. The firm does not share personal information about you with any third parties that triggers this opt-out right. This means YOU ARE ALREADY OPTED OUT.
How We Protect Privacy Online
Our concern for the privacy of our shareholders also extends to those who use our web site, www.rydex-sgi.com. Our web site uses some of the most secure forms of online communication available, including encryption technology, Secure Socket Layer (SSL) protocol, firewalls and user names and passwords. These technologies provide a high level of security and privacy when you access your account information or initiate online transactions. The Rydex|SGI web site offers customized features that require our use of “http cookies”—tiny pieces of information that we ask your browser to store. However, we make very limited use of these cookies. We only use cookies for session management and security features on the Rydex|SGI web site. We do not use them to pull data from your hard drive, to learn your email address, or to view data in cookies created by other web sites. We will not share the information in our cookies or give others access to it. See the legal information area on our web site for more details about web site security and privacy features.
How We Safeguard Your Personal Information
We restrict access to nonpublic personal information about shareholders to our employees and in some cases to third parties (for example, the service providers described above) as permitted by law. We maintain strict physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
We’ll Keep You Informed
As required by federal law, we will notify shareholders of our privacy policy annually. We reserve the right to modify this policy at any time, but rest assured that if we do change it, we will tell you promptly. You will also be able to access our privacy policy from our web site at www.rydex-sgi.com. Should you have any questions regarding our privacy policy, contact us at 800.820.0888 or 301.296.5100.
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![(RYDEX SGI LOGO)](https://capedge.com/proxy/N-CSRS/0000950123-11-057527/w82119w8211918.gif)
One Security Benefit Place
Topeka, Kansas 66636-0001
securitybenefit.com
Rydex Distributors, Inc.
460604400
Topeka, Kansas 66636-0001
securitybenefit.com
Rydex Distributors, Inc.
460604400
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Item 2. Code of Ethics.
Not required at this time.
Item 3. Audit Committee Financial Expert.
Not required at this time.
Item 4. Principal Accountant Fees and Services.
Not required at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
The Schedule of Investments is included under Item 1 of this form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Mangers of Closed-end Management Investment Companies
Not applicable
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant does not currently have in place procedures by which shareholders may recommend nominees to the registrant’s board.
There have been no changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
Item 11. Controls and Procedures.
(a) | The registrant’s President and Treasurer have concluded that the registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the |
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Investment Company Act of 1940) are effective based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR. | |||
There was no fraud, whether or not material, involving officers or employees of the Registrant who have a significant role in the Registrant’s internal controls, including disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) that has come to the attention of the Registrant, including its President and Treasurer. | |||
(b) | There were no significant changes in the registrant’s internal controls, or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Item 12. Exhibits.
(a)(2) | Separate certifications by the President (principal executive officer) and Treasurer (principal financial officer) of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are attached. | ||
(b) | A certification by the registrant’s President (principal executive officer) and Treasurer (principal financial officer) as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)) is attached. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Security Equity Fund | ||||
By (Signature and Title)* | /s/ Richard M. Goldman | |||
Richard M. Goldman, President | ||||
Date June 7, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Richard M. Goldman | |||
Richard M. Goldman, President | ||||
Date June 7, 2011 | ||||
By (Signature and Title)* | /s/ Nikolaos Bonos | |||
Nikolaos Bonos, Treasurer | ||||
Date June 7, 2011 |
* | Print the name and title of each signing officer under his or her signature. |