UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811- 07584
Rydex Series Funds
(Exact name of registrant as specified in charter)
805 King Farm Boulevard, Suite 600
Rockville, Maryland 20850
(Address of principal executive offices) (Zip code)
Donald C. Cacciapaglia, President
Rydex Series Funds
805 King Farm Boulevard, Suite 600
Rockville, Maryland 20850
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-301-296-5100
Date of fiscal year end: March 31
Date of reporting period: September 30, 2013
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.
Item 1. Reports to Stockholders.
GUGGENHEIM ALTERNATIVES FUNDS
GUGGENHEIM U.S. LONG SHORT MOMENTUM FUND
GUGGENHEIM EVENT DRIVEN AND DISTRESSED STRATEGIES FUND
RYDEX INTERNATIONAL EQUITY FUNDS
RYDEX EMERGING MARKETS 2x STRATEGY FUND
RYDEX INVERSE EMERGING MARKETS 2x STRATEGY FUND
RSTF-SEMI-0913x0314
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| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 1 |
Dear Shareholder:
Security Investors, LLC (the “Investment Adviser”) is pleased to present the semi-annual shareholder report for one or more of our Funds (the “Funds”) for the period ended September 30, 2013.
The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC, a global, diversified financial services firm.
Guggenheim Distributors, LLC is the distributor of the Funds. Guggenheim Distributors, LLC is affiliated with Guggenheim Partners, LLC and Security Investors, LLC.
We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Fund Profile for each Fund.
We are committed to providing innovative investment solutions and appreciate the trust you place in us.
Sincerely,
Donald C. Cacciapaglia
President
October 31, 2013
Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at guggenheiminvestments.com or call 800.820.0888.
There can be no assurance that any investment product will achieve its investment objective(s). There are risks associated with investing, including the entire loss of principal invested. Investing involves market risks. The investment return and principal value of any investment product will fluctuate with changes in market conditions.
| 2 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| ECONOMIC AND MARKET OVERVIEW | September 30, 2013 |
For the first part of the six-month period ended September 30, 2013, the U.S. economy and investment markets benefited from continued monetary accommodation from the world’s central banks and an improving picture for housing and employment.
Volatility rose in the final weeks of the period, however, as markets braced for a government shutdown over a budget impasse and suspected that the U.S. economy is not expanding quickly enough. In addition, confusion clouded the expected start of the end of quantitative easing (QE), speculation over which began rattling investors as far back as May. In refraining from tapering in September, the Fed made it clear that it does not currently see enough economic growth potential to remove extreme monetary accommodation.
The pace of job creation in this economic expansion continues to be subpar. Although the unemployment rate mid-year fell to a four and a half year low, its decline was more a function of a declining labor force participation rate than exuberant hiring. Additionally, solid job gains in the private sector over the period were overshadowed by sluggish growth in aggregate earnings, owing to a rising share of part-time employment which puts downward pressure on consumption growth.
Economic data continue to confirm that housing has been the key pillar supporting the ongoing U.S. expansion, generating 50% of growth in the first half of 2013. Concerns about tapering mid-year drove interest rates higher, with mortgage rates rising by over 100 basis points from May through August. This is having a severe impact on housing, even though it may not show up in the economic data until later in the year.
Markets also have had to deal with substantial uncertainty overseas. Fears of a Chinese credit crunch stoked investor anxiety, and measures implemented to address structural problems in China’s economy appear to be temporary rather than long-term solutions. The devaluation of the Japanese yen is putting pressure on all the economies in the region, making the global economy vulnerable to an unexpected economic shock. Europe, meanwhile, is bouncing along a bottom, and the growth outlook, while improving, remains weak.
From a policy standpoint, the Fed appears to be concerned about the impact higher interest rates are having on the economy and the housing sector in particular, and it seems to be guiding long-term rates closer to the rate of inflation to stimulate growth. The Federal Open Market Committee has been very clear that the Fed will not allow interest rates to rise significantly until output and the crucial real estate market have reaccelerated.
For the six-month period ended September 30, 2013, the return of the Standard & Poor’s 500® Index* (“S&P 500”) was 8.31%. The Barclays U.S. Aggregate Bond Index* returned -1.77% for the period, while the Bank of America Merrill Lynch 3 Month U.S. Treasury Bill Index* returned 0.04%. The MSCI World Index* returned 8.88%, while the MSCI Emerging Markets Index* returned -2.78%.
The opinions and forecasts expressed may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or strategy.
*Index Definitions:
The following indices are referenced throughout this report. Indices are unmanaged and not available for direct investment. Index performance does not reflect transaction costs, fees, or expenses.
Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS.
MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets.
MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries and is considered a representation of the U.S. stock market.
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 3 |
| A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited) |
Emerging Markets 2x Strategy Fund and Inverse Emerging Markets 2x Strategy Fund described in this report are benchmarked daily to leveraged and/or inverse leveraged versions of published indices. To properly evaluate the performance of these funds, it is essential to understand the effect of mathematical compounding on their respective returns.
Because of the nonlinear effects of leverage applied over time, it is possible for a fund to perform in line with its benchmark for several individual periods in a row, yet seem to trail the benchmark over the entire period. It is also possible that a fund that performs in-line with its benchmark on a daily basis may seem to outperform its benchmark over longer periods.
An Example of Compounding
For example, consider a hypothetical fund that is designed to produce returns that correspond to 150% of an index. On the first day of a period, the index rises from a level of 100 to a level of 106, producing a 6.0% gain and an expectation that the fund will rise by 9.0%. On the same day, the fund’s net asset value per share (“NAV”) increases from $10.00 to $10.90 for a gain of 9.0%–in line with its benchmark.
On day two, assume the index falls from 106 to 99 for a loss of about 6.6%. The fund, as expected, falls 9.9% to a price of $9.82. On each day, the fund performed exactly in line with its benchmark, but for the two-day period, the fund was down 1.8%, while the index was down only 1.0%. Without taking into account the daily compounding of returns, one would expect the fund to lose 1.5% and would see the fund as trailing by 0.3% when in fact it had performed perfectly. This example is summarized in the table below.
| | | Index | | | Index | | | Fund | | | | | | Fund | | | | |
| | | Level | | | Performance | | | Expectation | | | Fund NAV | | | Performance | | | Assessment | |
| Start | | | 100 | | | | | | | | | | | | $10.00 | | | | | | | | | |
| Day 1 | | | 106 | | | | 6.0 | % | | | 9.0 | % | | | $10.90 | | | | 9.0 | % | | | In line | |
| Day 2 | | | 99 | | | | -6.6 | % | | | -9.9 | % | | | $9.82 | | | | -9.9 | % | | | In line | |
| Cumulative | | | | | | | -1.0 | % | | | -1.5 | % | | | | | | | -1.8 | % | | | -0.3 | % |
As illustrated by this simple example, the effect of leverage can make it difficult to form expectations or judgments about fund performance given only the returns of the unleveraged index.
Because certain funds seek to track the performance of their benchmark on a daily basis, mathematical compounding, especially with respect to those funds that use leverage as part of their investment strategy, may prevent a fund from correlating with the monthly, quarterly, annual or other period performance of its benchmark. Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings consistent with their strategies, as frequently as daily. For those funds that consistently apply leverage, the value of the fund’s shares will tend to increase or decrease more than the value of any increase or decrease in its benchmark index. For more on correlation, leverage and other risks, please read the prospectus.
In general, any change in direction in an index will produce compounding that seems to work against an investor. Were the index to move in the same direction (either up or down) for two or more periods in a row, the compounding of those returns would work in an investor’s favor, causing the fund to seemingly beat its benchmark.
As a general rule of thumb, more leverage in a fund will magnify the compounding effect, while less leverage will generally produce results that are more in line with expectations. In addition, periods of high volatility in an underlying index will also cause the effects of compounding to be more pronounced, while lower volatility will produce a more muted effect.
| 4 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) |
All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. Shareholders of a Fund incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; and exchange fees; and (ii) ongoing costs, including management fees, administrative services, and shareholder reports, among others. These ongoing costs, or operating expenses, are deducted from a fund’s gross income and reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets, which is known as the expense ratio. The following examples are intended to help investors understand the ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2013 and ending September 30, 2013.
The following tables illustrate a Fund’s costs in two ways:
Table 1. Based on actual Fund return. This section helps investors estimate the actual expenses paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. Investors may use the information here, together with the amount invested, to estimate the expenses paid over the period. Simply divide the Fund’s 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 provided under the heading “Expenses Paid During Period.”
Table 2. Based on hypothetical 5% return. This section is intended to help investors compare a Fund’s cost with those of other mutual funds. The table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid during the period. The example is useful in making comparisons because the U.S. Securities and Exchange Commission (the “SEC”) requires all mutual funds to calculate expenses based on the 5% return. Investors can assess a Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
The calculations illustrated above assume no shares were bought or sold during the period. Actual costs may have been higher or lower, depending on the amount of investment and the timing of any purchases or redemptions.
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, and contingent deferred sales charges (“CDSC”) on redemptions, if any. Therefore, the second table 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.
More information about a Fund’s expenses, including annual expense ratios for the past five years, can be found in the Financial Highlights section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate Fund prospectus.
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 5 |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Table 1. Based on actual Fund return3 | | | | | | | | | | | | | | | | | | | | |
| U.S. Long Short Momentum Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 2.32 | % | | | 6.75 | % | | | $1,000.00 | | | | $1,067.50 | | | | $12.02 | |
| C-Class | | | 3.11 | % | | | 6.37 | % | | | 1,000.00 | | | | 1,063.70 | | | | 16.09 | |
| H-Class | | | 2.37 | % | | | 6.73 | % | | | 1,000.00 | | | | 1,067.30 | | | | 12.28 | |
| Institutional Class | | | 2.12 | % | | | 6.91 | % | | | 1,000.00 | | | | 1,069.10 | | | | 11.05 | |
| Event Driven and Distressed Strategies Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.90 | % | | | 4.17 | % | | | 1,000.00 | | | | 1,041.70 | | | | 9.72 | |
| C-Class | | | 2.65 | % | | | 3.78 | % | | | 1,000.00 | | | | 1,037.80 | | | | 13.54 | |
| H-Class | | | 1.90 | % | | | 4.13 | % | | | 1,000.00 | | | | 1,041.30 | | | | 9.72 | |
| Institutional Class | | | 1.65 | % | | | 4.29 | % | | | 1,000.00 | | | | 1,042.90 | | | | 8.45 | |
| Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.75 | % | | | (8.15 | %) | | | 1,000.00 | | | | 918.50 | | | | 8.42 | |
| C-Class | | | 2.49 | % | | | (8.09 | %) | | | 1,000.00 | | | | 919.10 | | | | 11.98 | |
| H-Class | | | 1.73 | % | | | (8.25 | %) | | | 1,000.00 | | | | 917.50 | | | | 8.32 | |
| Inverse Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.72 | % | | | (1.61 | %) | | | 1,000.00 | | | | 983.90 | | | | 8.55 | |
| C-Class | | | 2.50 | % | | | (1.79 | %) | | | 1,000.00 | | | | 982.10 | | | | 12.42 | |
| H-Class | | | 1.72 | % | | | (1.51 | %) | | | 1,000.00 | | | | 984.90 | | | | 8.56 | |
| 6 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (concluded) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Table 2. Based on hypothetical 5% return (before expenses) | | | | | | | | | | | | |
| U.S. Long Short Momentum Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 2.32 | % | | | 5.00 | % | | | $1,000.00 | | | | $1,013.44 | | | | $11.71 | |
| C-Class | | | 3.11 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,009.48 | | | | 15.67 | |
| H-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| Institutional Class | | | 2.12 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,014.39 | | | | 10.76 | |
| Event Driven and Distressed Strategies Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.90 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.54 | | | | 9.60 | |
| C-Class | | | 2.65 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,011.78 | | | | 13.36 | |
| H-Class | | | 1.90 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.54 | | | | 9.60 | |
| Institutional Class | | | 1.65 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.80 | | | | 8.34 | |
| Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.75 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.29 | | | | 8.85 | |
| C-Class | | | 2.49 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.58 | | | | 12.56 | |
| H-Class | | | 1.73 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.39 | | | | 8.74 | |
| Inverse Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.72 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.44 | | | | 8.69 | |
| C-Class | | | 2.50 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.53 | | | | 12.61 | |
| H-Class | | | 1.72 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.44 | | | | 8.69 | |
| 1 | Annualized and excludes expenses of the underlying funds in which the Funds invest. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio, net of any applicable fee waivers, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). |
| 3 | Actual cumulative return at net asset value for the period March 31, 2013 to September 30, 2013. |
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 7 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
U.S. Long short momentum FUND
OBJECTIVE: Seeks long-term capital appreciation.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | | March 31, 2004 |
| C-Class | | | March 22, 2002 |
| H-Class | | | March 22, 2002 |
| Institutional Class | | | November 30, 2011 |
| Ten Largest Long Holdings (% of Total Net Assets) | | | | |
| Thor Industries, Inc. | | | 0.6 | % |
| John Wiley & Sons, Inc. — Class A | | | 0.5 | % |
| Interactive Brokers Group, Inc. — Class A | | | 0.5 | % |
| Herbalife Ltd. | | | 0.5 | % |
| Akamai Technologies, Inc. | | | 0.5 | % |
| Nu Skin Enterprises, Inc. — Class A | | | 0.5 | % |
| Theravance, Inc. | | | 0.5 | % |
| United Therapeutics Corp. | | | 0.5 | % |
| Goodyear Tire & Rubber Co. | | | 0.5 | % |
| Cinemark Holdings, Inc. | | | 0.5 | % |
| Top Ten Total | | | 5.1 | % |
“Ten Largest Long Holdings” exclude any temporary cash or derivative investments.
| 8 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| U.S. LONG SHORT MOMENTUM FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 65.4% | | | | | | | | |
| | | | | | | | | |
| CONSUMER DISCRETIONARY - 21.4% | | | | | | | | |
| Thor Industries, Inc.1 | | | 5,719 | | | $ | 331,930 | |
| John Wiley & Sons, Inc. — Class A1 | | | 6,751 | | | | 321,955 | |
| Goodyear Tire & Rubber Co.* | | | 14,119 | | | | 316,972 | |
| Cinemark Holdings, Inc. | | | 9,986 | | | | 316,956 | |
| Amazon.com, Inc.*,1 | | | 1,000 | | | | 312,641 | |
| Regal Entertainment Group — Class A | | | 16,378 | | | | 310,854 | |
| Netflix, Inc.*,1 | | | 1,000 | | | | 309,210 | |
| Allison Transmission Holdings, Inc. | | | 12,324 | | | | 308,717 | |
| Harley-Davidson, Inc.1 | | | 4,785 | | | | 307,388 | |
| BorgWarner, Inc.1 | | | 3,030 | | | | 307,212 | |
| Groupon, Inc. — Class A* | | | 27,338 | | | | 306,459 | |
| Scripps Networks Interactive, Inc. — | | | | | | | | |
| Class A1 | | | 3,916 | | | | 305,879 | |
| Expedia, Inc.1 | | | 5,895 | | | | 305,302 | |
| Madison Square Garden Co. — Class A*,1 | | | 5,256 | | | | 305,216 | |
| Thomson Reuters Corp.1 | | | 8,700 | | | | 304,587 | |
| Delphi Automotive plc1 | | | 5,200 | | | | 303,784 | |
| Gentex Corp. | | | 11,831 | | | | 302,755 | |
| Washington Post Co. — Class B1 | | | 494 | | | | 302,007 | |
| Clear Channel Outdoor Holdings, Inc. — | | | | | | | | |
| Class A* | | | 36,779 | | | | 301,588 | |
| Morningstar, Inc.1 | | | 3,793 | | | | 300,633 | |
| Liberty Ventures*,1 | | | 3,407 | | | | 300,395 | |
| TRW Automotive Holdings Corp.*,1 | | | 4,212 | | | | 300,358 | |
| Visteon Corp.*,1 | | | 3,970 | | | | 300,291 | |
| Genuine Parts Co.1 | | | 3,700 | | | | 299,293 | |
| Johnson Controls, Inc.1 | | | 7,200 | | | | 298,800 | |
| TripAdvisor, Inc.*,1 | | | 3,925 | | | | 297,672 | |
| Lear Corp.1 | | | 4,149 | | | | 296,944 | |
| DreamWorks Animation SKG, Inc. — | | | | | | | | |
| Class A* | | | 10,426 | | | | 296,724 | |
| Liberty Media Corp. — Class A*,1 | | | 2,000 | | | | 294,300 | |
| General Motors Co.*,1 | | | 8,144 | | | | 292,940 | |
| News Corp. — Class A* | | | 18,200 | | | | 292,292 | |
| Ford Motor Co. | | | 17,277 | | | | 291,463 | |
| Liberty Interactive Corp. — Class A* | | | 12,377 | | | | 290,488 | |
| DISH Network Corp. — Class A1 | | | 6,300 | | | | 283,563 | |
| Hyatt Hotels Corp. — Class A*,1 | | | 6,495 | | | | 279,025 | |
| Cablevision Systems Corp. — Class A | | | 16,366 | | | | 275,603 | |
| Gannett Company, Inc. | | | 9,943 | | | | 266,373 | |
| HomeAway, Inc.* | | | 9,408 | | | | 263,424 | |
| AMC Networks, Inc. — Class A*,1 | | | 3,748 | | | | 256,663 | |
| Priceline.com, Inc.*,1 | | | 231 | | | | 233,529 | |
| Starz — Class A*,1 | | | 6,653 | | | | 187,149 | |
| Deckers Outdoor Corp.*,1 | | | 2,482 | | | | 163,613 | |
| Interpublic Group of Companies, Inc.1 | | | 7,660 | | | | 131,599 | |
| Carter’s, Inc.1 | | | 1,715 | | | | 130,151 | |
| Lamar Advertising Co. — Class A*,1 | | | 2,400 | | | | 112,872 | |
| Discovery Communications, Inc. — | | | | | | | | |
| Class A*,1 | | | 1,300 | | | | 109,746 | |
| Liberty Global plc — Class A*,1 | | | 800 | | | | 63,479 | |
| Total Consumer Discretionary | | | | | | | 12,790,794 | |
| FINANCIALS - 12.8% | | | | | | | | |
| Interactive Brokers Group, Inc. — Class A | | | 17,112 | | | | 321,192 | |
| TFS Financial Corp.* | | | 26,270 | | | | 314,452 | |
| Artisan Partners Asset Management, Inc.1 | | | 5,953 | | | | 311,699 | |
| New York Community Bancorp, Inc. | | | 20,298 | | | | 306,703 | |
| Nationstar Mortgage Holdings, Inc.*,1 | | | 5,377 | | | | 302,349 | |
| Ocwen Financial Corp.*,1 | | | 5,400 | | | | 301,158 | |
| People’s United Financial, Inc. | | | 20,633 | | | | 296,703 | |
| Washington Federal, Inc. | | | 14,134 | | | | 292,291 | |
| Mercury General Corp.1 | | | 5,819 | | | | 281,116 | |
| BankUnited, Inc.1 | | | 8,672 | | | | 270,480 | |
| First Citizens BancShares, Inc. — Class A1 | | | 1,308 | | | | 268,925 | |
| StanCorp Financial Group, Inc.1 | | | 4,829 | | | | 265,692 | |
| Hanover Insurance Group, Inc.1 | | | 4,791 | | | | 265,038 | |
| Lazard Ltd. — Class A1 | | | 7,330 | | | | 264,027 | |
| Bank of Hawaii Corp.1 | | | 4,841 | | | | 263,592 | |
| Ares Capital Corp. | | | 14,900 | | | | 257,621 | |
| Cullen/Frost Bankers, Inc.1 | | | 3,647 | | | | 257,296 | |
| LPL Financial Holdings, Inc.1 | | | 6,640 | | | | 254,378 | |
| Kemper Corp.1 | | | 7,564 | | | | 254,150 | |
| SEI Investments Co.1 | | | 8,215 | | | | 253,926 | |
| NASDAQ OMX Group, Inc.1 | | | 7,895 | | | | 253,351 | |
| Valley National Bancorp | | | 25,017 | | | | 248,919 | |
| Fulton Financial Corp. | | | 20,834 | | | | 243,341 | |
| Associated Banc-Corp. | | | 15,299 | | | | 236,982 | |
| American National Insurance Co.1 | | | 2,374 | | | | 232,747 | |
| Endurance Specialty Holdings Ltd.1 | | | 4,015 | | | | 215,685 | |
| Legg Mason, Inc.1 | | | 4,600 | | | | 153,824 | |
| American Financial Group, Inc.1 | | | 2,769 | | | | 149,692 | |
| Aspen Insurance Holdings Ltd.1 | | | 3,129 | | | | 113,551 | |
| BOK Financial Corp.1 | | | 885 | | | | 56,065 | |
| Validus Holdings Ltd.1 | | | 1,275 | | | | 47,150 | |
| Old Republic International Corp.1 | | | 2,874 | | | | 44,259 | |
| Total Financials | | | | | | | 7,598,354 | |
| HEALTH CARE - 11.1% | | | | | | | | |
| Theravance, Inc.*,1 | | | 7,800 | | | | 318,942 | |
| United Therapeutics Corp.*,1 | | | 4,025 | | | | 317,371 | |
| Incyte Corporation Ltd.*,1 | | | 8,263 | | | | 315,233 | |
| QIAGEN N.V.* | | | 14,300 | | | | 306,020 | |
| Amgen, Inc.1 | | | 2,700 | | | | 302,238 | |
| Alexion Pharmaceuticals, Inc.*,1 | | | 2,600 | | | | 302,016 | |
| Alkermes plc*,1 | | | 8,900 | | | | 299,218 | |
| Bio-Rad Laboratories, Inc. — Class A*,1 | | | 2,545 | | | | 299,190 | |
| Seattle Genetics, Inc.*,1 | | | 6,700 | | | | 293,661 | |
| Cubist Pharmaceuticals, Inc.*,1 | | | 4,600 | | | | 292,330 | |
| Medivation, Inc.*,1 | | | 4,842 | | | | 290,229 | |
| BioMarin Pharmaceutical, Inc.*,1 | | | 4,000 | | | | 288,880 | |
| Techne Corp.1 | | | 3,576 | | | | 286,295 | |
| Vertex Pharmaceuticals, Inc.*,1 | | | 3,700 | | | | 280,534 | |
| Health Net, Inc.*,1 | | | 8,578 | | | | 271,923 | |
| LifePoint Hospitals, Inc.*,1 | | | 5,480 | | | | 255,532 | |
| Patterson Companies, Inc.1 | | | 6,336 | | | | 254,707 | |
| VCA Antech, Inc.* | | | 9,266 | | | | 254,444 | |
| Myriad Genetics, Inc.*,2 | | | 10,563 | | | | 248,231 | |
| Cardinal Health, Inc.1 | | | 4,758 | | | | 248,130 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 9 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| U.S. LONG SHORT MOMENTUM FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Ariad Pharmaceuticals, Inc.* | | | 13,193 | | | $ | 242,751 | |
| Brookdale Senior Living, Inc. — Class A*,1 | | | 9,045 | | | | 237,884 | |
| MEDNAX, Inc.*,1 | | | 1,349 | | | | 135,440 | |
| Covance, Inc.*,1 | | | 1,530 | | | | 132,284 | |
| Pharmacyclics, Inc.*,1 | | | 900 | | | | 124,577 | |
| Total Health Care | | | | | | | 6,598,060 | |
| INDUSTRIALS - 7.8% | | | | | | | | |
| Hexcel Corp.*,1 | | | 8,138 | | | | 315,755 | |
| Kirby Corp.*,1 | | | 3,584 | | | | 310,195 | |
| Huntington Ingalls Industries, Inc.1 | | | 4,572 | | | | 308,153 | |
| General Dynamics Corp.1 | | | 3,500 | | | | 306,320 | |
| Spirit Aerosystems Holdings, Inc. — | | | | | | | | |
| Class A* | | | 12,600 | | | | 305,424 | |
| L-3 Communications Holdings, Inc.1 | | | 3,200 | | | | 302,400 | |
| Harsco Corp. | | | 11,900 | | | | 296,310 | |
| Textron, Inc. | | | 10,400 | | | | 287,144 | |
| AMERCO1 | | | 1,513 | | | | 278,588 | |
| Exelis, Inc. | | | 17,471 | | | | 274,469 | |
| Old Dominion Freight Line, Inc.*,1 | | | 5,944 | | | | 273,365 | |
| Landstar System, Inc.1 | | | 4,852 | | | | 271,615 | |
| Alliant Techsystems, Inc.1 | | | 2,731 | | | | 266,436 | |
| TransDigm Group, Inc.1 | | | 1,900 | | | | 263,530 | |
| Con-way, Inc.1 | | | 5,998 | | | | 258,454 | |
| Triumph Group, Inc.1 | | | 3,375 | | | | 236,993 | |
| Genesee & Wyoming, Inc. — Class A*,1 | | | 1,200 | | | | 111,564 | |
| Total Industrials | | | | | | | 4,666,715 | |
| CONSUMER STAPLES - 4.2% | | | | | | | | |
| Herbalife Ltd.1 | | | 4,600 | | | | 320,942 | |
| Nu Skin Enterprises, Inc. — Class A1 | | | 3,347 | | | | 320,442 | |
| Estee Lauder Companies, Inc. — Class A1 | | | 4,400 | | | | 307,560 | |
| Avon Products, Inc. | | | 14,900 | | | | 306,940 | |
| Bunge Ltd.1 | | | 3,900 | | | | 296,049 | |
| Pinnacle Foods, Inc. | | | 10,683 | | | | 282,779 | |
| WhiteWave Foods Co. — Class A* | | | 14,060 | | | | 280,778 | |
| Dean Foods Co.* | | | 11,760 | | | | 226,968 | |
| Hillshire Brands Co.1 | | | 7,293 | | | | 224,187 | |
| Total Consumer Staples | | | | | | | 2,566,645 | |
| INFORMATION TECHNOLOGY - 3.5% | | | | | | | | |
| Akamai Technologies, Inc.*,1 | | | 6,200 | | | | 320,540 | |
| AOL, Inc.1 | | | 9,020 | | | | 311,912 | |
| IAC/InterActiveCorp1 | | | 5,664 | | | | 309,651 | |
| VeriSign, Inc.*,1 | | | 6,000 | | | | 305,340 | |
| Diebold, Inc. | | | 10,277 | | | | 301,733 | |
| Ingram Micro, Inc. — Class A* | | | 11,083 | | | | 255,463 | |
| Zebra Technologies Corp. — Class A*,1 | | | 5,512 | | | | 250,961 | |
| Lexmark International, Inc. — Class A1 | | | 814 | | | | 26,862 | |
| Total Information Technology | | | | | | | 2,082,462 | |
| MATERIALS - 3.2% | | | | | | | | |
| MeadWestvaco Corp.1 | | | 8,000 | | | | 307,040 | |
| Sonoco Products Co.1 | | | 7,784 | | | | 303,109 | |
| Silgan Holdings, Inc.1 | | | 6,282 | | | | 295,254 | |
| Bemis Company, Inc.1 | | | 7,366 | | | | 287,348 | |
| Greif, Inc. — Class A1 | | | 5,855 | | | | 287,071 | |
| Aptargroup, Inc.1 | | | 4,452 | | | | 267,699 | |
| Crown Holdings, Inc.*,1 | | | 5,930 | | | | 250,720 | |
| Total Materials | | | | | | | 1,998,241 | |
| TELECOMMUNICATION SERVICES - 0.9% | | | | | | | | |
| United States Cellular Corp.1 | | | 6,182 | | | | 281,467 | |
| Telephone & Data Systems, Inc.1 | | | 9,055 | | | | 267,575 | |
| Total Telecommunication Services | | | | | | | 549,042 | |
| ENERGY - 0.5% | | | | | | | | |
| World Fuel Services Corp.1 | | | 7,446 | | | | 277,810 | |
| Total Common Stocks | | | | | | | | |
| (Cost $36,319,697) | | | | | | | 39,128,123 | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENTS††,3 - 38.1% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 18,974,273 | | | | 18,974,273 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 2,141,673 | | | | 2,141,673 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 1,671,282 | | | | 1,671,282 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $22,787,228) | | | | | | | 22,787,228 | |
| SECURITIES LENDING COLLATERAL††,4 - 0.4% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 108,261 | | | | 108,261 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 101,089 | | | | 101,089 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $209,350) | | | | | | | 209,350 | |
| Total Long Investments - 103.9% | | | | | | | | |
| (Cost $59,316,275) | | | | | | $ | 62,124,701 | |
| | | Shares | | | | |
| COMMON STOCKS SOLD SHORT† - (24.1)% | | | | | | | | |
| TELECOMMUNICATION SERVICES - (0.7)% | | | | | | | | |
| CenturyLink, Inc. | | | 4,610 | | | $ | (144,662 | ) |
| Verizon Communications, Inc. | | | 3,180 | | | | (148,379 | ) |
| AT&T, Inc. | | | 4,403 | | | | (148,909 | ) |
| Total Telecommunication Services | | | | | | | (441,950 | ) |
| HEALTH CARE - (1.2)% | | | | | | | | |
| Boston Scientific Corp.* | | | 7,100 | | | | (83,354 | ) |
| Bristol-Myers Squibb Co. | | | 2,045 | | | | (94,643 | ) |
| Abbott Laboratories | | | 3,670 | | | | (121,807 | ) |
| Eli Lilly & Co. | | | 2,498 | | | | (125,724 | ) |
| 10 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| U.S. LONG SHORT MOMENTUM FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Medtronic, Inc. | | | 2,415 | | | $ | (128,599 | ) |
| Pfizer, Inc. | | | 4,538 | | | | (130,286 | ) |
| Total Health Care | | | | | | | (684,413 | ) |
| INDUSTRIALS - (1.3)% | | | | | | | | |
| General Electric Co. | | | 5,480 | | | | (130,917 | ) |
| United Continental Holdings, Inc.* | | | 4,950 | | | | (152,015 | ) |
| Copa Holdings S.A. — Class A | | | 1,100 | | | | (152,537 | ) |
| Alaska Air Group, Inc. | | | 2,560 | | | | (160,307 | ) |
| Delta Air Lines, Inc. | | | 7,400 | | | | (174,566 | ) |
| Total Industrials | | | | | | | (770,342 | ) |
| ENERGY - (1.6)% | | | | | | | | |
| Cameron International Corp.* | | | 2,040 | | | | (119,075 | ) |
| Exxon Mobil Corp. | | | 1,453 | | | | (125,016 | ) |
| Chevron Corp. | | | 1,079 | | | | (131,099 | ) |
| Oil States International, Inc.* | | | 1,350 | | | | (139,671 | ) |
| Halliburton Co. | | | 2,903 | | | | (139,779 | ) |
| National Oilwell Varco, Inc. | | | 1,791 | | | | (139,895 | ) |
| Schlumberger Ltd. | | | 1,618 | | | | (142,966 | ) |
| Total Energy | | | | | | | (937,501 | ) |
| UTILITIES - (2.0)% | | | | | | | | |
| AES Corp. | | | 3,409 | | | | (45,306 | ) |
| NextEra Energy, Inc. | | | 1,530 | | | | (122,645 | ) |
| Duke Energy Corp. | | | 1,870 | | | | (124,879 | ) |
| Southern Co. | | | 3,040 | | | | (125,187 | ) |
| American Electric Power Company, Inc. | | | 2,910 | | | | (126,149 | ) |
| Edison International | | | 2,750 | | | | (126,665 | ) |
| FirstEnergy Corp. | | | 3,500 | | | | (127,575 | ) |
| PPL Corp. | | | 4,210 | | | | (127,900 | ) |
| Exelon Corp. | | | 4,400 | | | | (130,415 | ) |
| Dominion Resources, Inc. | | | 2,240 | | | | (139,955 | ) |
| Total Utilities | | | | | | | (1,196,676 | ) |
| INFORMATION TECHNOLOGY - (2.4)% | | | | | | | | |
| VMware, Inc. — Class A* | | | 310 | | | | (25,079 | ) |
| Symantec Corp. | | | 4,994 | | | | (123,602 | ) |
| F5 Networks, Inc.* | | | 1,505 | | | | (129,069 | ) |
| Citrix Systems, Inc.* | | | 1,831 | | | | (129,287 | ) |
| Oracle Corp. | | | 4,035 | | | | (133,841 | ) |
| QUALCOMM, Inc. | | | 2,030 | | | | (136,741 | ) |
| Visa, Inc. — Class A | | | 730 | | | | (139,503 | ) |
| Microsoft Corp. | | | 4,218 | | | | (140,501 | ) |
| Cisco Systems, Inc. | | | 6,250 | | | | (146,375 | ) |
| Salesforce.com, Inc.* | | | 2,931 | | | | (152,148 | ) |
| Micron Technology, Inc.* | | | 9,420 | | | | (164,567 | ) |
| Total Information Technology | | | | | | | (1,420,713 | ) |
| CONSUMER STAPLES - (3.0)% | | | | | | | | |
| Constellation Brands, Inc. — Class A* | | | 200 | | | | (11,480 | ) |
| Energizer Holdings, Inc. | | | 630 | | | | (57,425 | ) |
| Monster Beverage Corp.* | | | 2,660 | | | | (138,985 | ) |
| Procter & Gamble Co. | | | 1,912 | | | | (144,528 | ) |
| Coca-Cola Co. | | | 3,840 | | | | (145,459 | ) |
| Clorox Co. | | | 1,790 | | | | (146,279 | ) |
| Altria Group, Inc. | | | 4,280 | | | | (147,018 | ) |
| PepsiCo, Inc. | | | 1,860 | | | | (147,870 | ) |
| Kimberly-Clark Corp. | | | 1,580 | | | | (148,868 | ) |
| Lorillard, Inc. | | | 3,340 | | | | (149,565 | ) |
| Colgate-Palmolive Co. | | | 2,540 | | | | (150,621 | ) |
| Reynolds American, Inc. | | | 3,100 | | | | (151,218 | ) |
| Philip Morris International, Inc. | | | 1,750 | | | | (151,533 | ) |
| Church & Dwight Company, Inc. | | | 2,590 | | | | (155,529 | ) |
| Total Consumer Staples | | | | | | | (1,846,378 | ) |
| MATERIALS - (3.3)% | | | | | | | | |
| Monsanto Co. | | | 800 | | | | (83,496 | ) |
| Compass Minerals International, Inc. | | | 1,491 | | | | (113,719 | ) |
| International Paper Co. | | | 2,758 | | | | (123,558 | ) |
| Royal Gold, Inc. | | | 2,621 | | | | (127,538 | ) |
| Newmont Mining Corp. | | | 4,837 | | | | (135,920 | ) |
| Alcoa, Inc. | | | 16,830 | | | | (136,660 | ) |
| Reliance Steel & Aluminum Co. | | | 1,907 | | | | (139,726 | ) |
| Nucor Corp. | | | 2,863 | | | | (140,344 | ) |
| Steel Dynamics, Inc. | | | 8,552 | | | | (142,904 | ) |
| Carpenter Technology Corp. | | | 2,479 | | | | (144,055 | ) |
| Tahoe Resources, Inc.* | | | 8,060 | | | | (144,435 | ) |
| Southern Copper Corp. | | | 5,305 | | | | (144,508 | ) |
| Allegheny Technologies, Inc. | | | 4,941 | | | | (150,799 | ) |
| Freeport-McMoRan Copper & Gold, Inc. | | | 4,715 | | | | (155,972 | ) |
| Eagle Materials, Inc. | | | 2,240 | | | | (162,511 | ) |
| Total Materials | | | | | | | (2,046,145 | ) |
| CONSUMER DISCRETIONARY - (4.2)% | | | | | | | | |
| Home Depot, Inc. | | | 310 | | | | (23,514 | ) |
| Target Corp. | | | 2,171 | | | | (138,901 | ) |
| Macy’s, Inc. | | | 3,258 | | | | (140,974 | ) |
| Dollar General Corp.* | | | 2,576 | | | | (145,441 | ) |
| Weight Watchers International, Inc. | | | 3,900 | | | | (145,743 | ) |
| H&R Block, Inc. | | | 5,470 | | | | (145,830 | ) |
| Harman International Industries, Inc. | | | 2,280 | | | | (151,004 | ) |
| Apollo Group, Inc. — Class A* | | | 7,360 | | | | (153,162 | ) |
| Tempur Sealy International, Inc.* | | | 3,490 | | | | (153,420 | ) |
| Newell Rubbermaid, Inc. | | | 5,650 | | | | (155,375 | ) |
| Toll Brothers, Inc.* | | | 4,830 | | | | (156,637 | ) |
| PulteGroup, Inc. | | | 9,510 | | | | (156,915 | ) |
| Dollar Tree, Inc.* | | | 2,757 | | | | (157,590 | ) |
| Mohawk Industries, Inc.* | | | 1,210 | | | | (157,603 | ) |
| DR Horton, Inc. | | | 8,130 | | | | (157,966 | ) |
| Lennar Corp. — Class A | | | 4,560 | | | | (161,424 | ) |
| Whirlpool Corp. | | | 1,120 | | | | (164,012 | ) |
| Total Consumer Discretionary | | | | | | | (2,465,511 | ) |
| FINANCIALS - (4.4)% | | | | | | | | |
| Hatteras Financial Corp. | | | 3,580 | | | | (66,982 | ) |
| Vornado Realty Trust | | | 1,070 | | | | (89,944 | ) |
| Realty Income Corp. | | | 3,120 | | | | (124,020 | ) |
| General Growth Properties, Inc. | | | 6,494 | | | | (125,269 | ) |
| Simon Property Group, Inc. | | | 849 | | | | (125,848 | ) |
| Ventas, Inc. | | | 2,059 | | | | (126,629 | ) |
| AvalonBay Communities, Inc. | | | 1,000 | | | | (127,090 | ) |
| HCP, Inc. | | | 3,140 | | | | (128,583 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 11 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| U.S. LONG SHORT MOMENTUM FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Prologis, Inc. | | | 3,475 | | | $ | (130,730 | ) |
| Health Care REIT, Inc. | | | 2,104 | | | | (131,248 | ) |
| Public Storage | | | 821 | | | | (131,812 | ) |
| SL Green Realty Corp. | | | 1,490 | | | | (132,372 | ) |
| Host Hotels & Resorts, Inc. | | | 7,510 | | | | (132,702 | ) |
| Weyerhaeuser Co. | | | 4,924 | | | | (140,973 | ) |
| Annaly Capital Management, Inc. | | | 12,490 | | | | (144,634 | ) |
| American Capital Agency Corp. | | | 6,470 | | | | (146,028 | ) |
| Two Harbors Investment Corp. | | | 15,190 | | | | (147,495 | ) |
| Equity Residential | | | 2,770 | | | | (148,389 | ) |
| Realogy Holdings Corp.* | | | 3,480 | | | | (149,710 | ) |
| American Tower Corp. — Class A | | | 2,050 | | | | (151,965 | ) |
| Total Financials | | | | | | | (2,602,422 | ) |
| Total Common Stock Sold Short | | | | | | | | |
| (Proceeds $14,182,671) | | | | | | | (14,412,052 | ) |
| Total Securities Sold Short - (24.1)% | | | | | | | | |
| (Proceeds $14,182,671) | | | | | | $ | (14,412,052 | ) |
| Other Assets & Liabilities, net - 20.2% | | | | | | | 12,065,016 | |
| Total Net Assets - 100.0% | | | | | | $ | 59,777,665 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or a portion of this security is pledged as short security collateral at September 30, 2013. |
| 2 | All or portion of this security is on loan at September 30, 2013 — See Note 10. |
| 3 | Repurchase Agreements — See Note 5. |
| 4 | Securities lending collateral — See Note 10. |
plc — Public Limited Company
REIT — Real Estate Investment Trust
| 12 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| U.S. LONG SHORT MOMENTUM FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets | | | | |
| Investments, at value - including $185,650 of securities loaned (cost $36,319,697) | | $ | 39,128,123 | |
| Repurchase agreements, at value | | | | |
| (cost $22,996,578) | | | 22,996,578 | |
| Total investments | | | | |
| (cost $59,316,275) | | | 62,124,701 | |
| Segregated cash with broker | | | 12,401,497 | |
| Cash | | | 2,709 | |
| Receivables: | | | | |
| Dividends | | | 21,244 | |
| Fund shares sold | | | 19,769 | |
| Interest | | | 267 | |
| Total assets | | | 74,570,187 | |
| Liabilities: | | | | |
| Securities sold short, at value | | | | |
| (proceeds $14,182,671) | | | 14,412,052 | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 209,350 | |
| Management fees | | | 40,835 | |
| Fund shares redeemed | | | 31,692 | |
| Distribution and service fees | | | 24,625 | |
| Transfer agent and administrative fees | | | 11,343 | |
| Portfolio accounting fees | | | 4,537 | |
| Miscellaneous | | | 58,088 | |
| Total liabilities | | | 14,792,522 | |
| Net assets | | $ | 59,777,665 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 130,372,642 | |
| Accumulated net investment loss | | | (701,130 | ) |
| Accumulated net realized loss on investments | | | (72,472,892 | ) |
| Net unrealized appreciation on investments | | | 2,579,045 | |
| Net assets | | $ | 59,777,665 | |
| A-Class: | | | | |
| Net assets | | $ | 6,759,366 | |
| Capital shares outstanding | | | 469,672 | |
| Net asset value per share | | $ | 14.39 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 15.11 | |
| C-Class: | | | | |
| Net assets | | $ | 23,157,830 | |
| Capital shares outstanding | | | 1,756,216 | |
| Net asset value per share | | $ | 13.19 | |
| H-Class: | | | | |
| Net assets | | $ | 29,847,714 | |
| Capital shares outstanding | | | 2,067,083 | |
| Net asset value per share | | $ | 14.44 | |
| Institutional Class: | | | | |
| Net assets | | $ | 12,755 | |
| Capital shares outstanding | | | 877 | |
| Net asset value per share | | $ | 14.54 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $918) | | $ | 435,167 | |
| Income from securities lending, net | | | 3,225 | |
| Interest | | | 3,067 | |
| Total investment income | | | 441,459 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 253,376 | |
| Transfer agent and administrative fees | | | 70,382 | |
| Distribution and service fees: | | | | |
| A-Class | | | 10,398 | |
| C-Class | | | 115,479 | |
| H-Class | | | 31,100 | |
| Portfolio accounting fees | | | 28,153 | |
| Short sales dividend expense | | | 147,468 | |
| Prime broker interest expense | | | 44,092 | |
| Trustees’ fees* | | | 3,756 | |
| Custodian fees | | | 3,275 | |
| Miscellaneous | | | 42,487 | |
| Total expenses | | | 749,966 | |
| Net investment loss | | | (308,507 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 5,781,133 | |
| Futures contracts | | | 111,616 | |
| Securities sold short | | | (1,200,338 | ) |
| Net realized gain | | | 4,692,411 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (1,664,216 | ) |
| Securities sold short | | | 777,490 | |
| Futures contracts | | | (7,093 | ) |
| Net change in unrealized appreciation (depreciation) | | | (893,819 | ) |
| Net realized and unrealized gain | | | 3,798,592 | |
| Net increase in net assets resulting from operations | | $ | 3,490,085 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 13 |
| U.S. LONG SHORT MOMENTUM FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (308,507 | ) | | $ | (472,793 | ) |
| Net realized gain on investments | | | 4,692,411 | | | | 8,118,418 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (893,819 | ) | | | (7,745,424 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 3,490,085 | | | | (99,799 | ) |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| A-Class | | | — | | | | (41,370 | ) |
| C-Class | | | — | | | | (101,016 | ) |
| H-Class | | | — | | | | (106,079 | ) |
| Institutional Class | | | — | | | | (13 | ) |
| Total distributions to shareholders | | | — | | | | (248,478 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 1,872,217 | | | | 10,682,916 | |
| C-Class | | | 805,849 | | | | 573,881 | |
| H-Class | | | 11,046,650 | | | | 4,071,001 | |
| Institutional Class | | | 1,000 | | | | — | |
| Distributions reinvested | | | | | | | | |
| A-Class | | | — | | | | 40,128 | |
| C-Class | | | — | | | | 98,169 | |
| H-Class | | | — | | | | 101,654 | |
| Institutional Class | | | — | | | | 13 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (8,766,706 | ) | | | (14,166,103 | ) |
| C-Class | | | (2,607,156 | ) | | | (9,494,408 | ) |
| H-Class | | | (8,991,643 | ) | | | (32,243,335 | ) |
| Institutional Class | | | — | | | | — | |
| Net decrease from capital share transactions | | | (6,639,789 | ) | | | (40,336,084 | ) |
| Net decrease in net assets | | | (3,149,704 | ) | | | (40,684,361 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 62,927,369 | | | | 103,611,730 | |
| End of period | | $ | 59,777,665 | | | $ | 62,927,369 | |
| Accumulated net investment loss at end of period | | $ | (701,130 | ) | | $ | (392,623 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 132,554 | | | | 809,308 | |
| C-Class | | | 62,187 | | | | 47,416 | |
| H-Class | | | 771,890 | | | | 313,089 | |
| Institutional Class | | | 69 | | | | — | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| A-Class | | | — | | | | 3,136 | |
| C-Class | | | — | | | | 8,320 | |
| H-Class | | | — | | | | 7,915 | |
| Institutional Class | | | — | | | | 1 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (634,989 | ) | | | (1,083,452 | ) |
| C-Class | | | (205,164 | ) | | | (796,553 | ) |
| H-Class | | | (645,526 | ) | | | (2,476,764 | ) |
| Institutional Class | | | — | | | | — | |
| Net decrease in shares | | | (518,978 | ) | | | (3,167,585 | ) |
| 14 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| U.S. LONG SHORT MOMENTUM 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.48 | | | $ | 13.28 | | | $ | 14.28 | | | $ | 12.59 | | | $ | 8.62 | | | $ | 13.45 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.04 | ) | | | (.05 | ) | | | .03 | | | | (.04 | ) | | | (.07 | ) | | | .01 | |
| Net gain (loss) on investments (realized and unrealized) | | | .95 | | | | .30 | | | | (1.03 | ) | | | 1.73 | | | | 4.04 | | | | (4.84 | ) |
| Total from investment operations | | | .91 | | | | .25 | | | | (1.00 | ) | | | 1.69 | | | | 3.97 | | | | (4.83 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | — | | | | — | |
| Redemption fees collected | | | — | | | | — | | | | — | | | | — | c | | | — | c | | | — | c |
| Net asset value, end of period | | $ | 14.39 | | | $ | 13.48 | | | $ | 13.28 | | | $ | 14.28 | | | $ | 12.59 | | | $ | 8.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 6.75 | % | | | 1.89 | % | | | (7.00 | %) | | | 13.42 | % | | | 46.06 | % | | | (35.91 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,759 | | | $ | 13,106 | | | $ | 16,510 | | | $ | 25,447 | | | $ | 36,231 | | | $ | 31,925 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.60 | %) | | | (0.35 | %) | | | 0.21 | % | | | (0.33 | %) | | | (0.62 | %) | | | 0.13 | % |
| Total expensesg | | | 2.32 | % | | | 1.92 | % | | | 1.66 | % | | | 1.71 | % | | | 1.68 | % | | | 1.69 | % |
| Portfolio turnover rate | | | 138 | % | | | 183 | % | | | 190 | % | | | 231 | % | | | 375 | % | | | 528 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 12.40 | | | $ | 12.31 | | | $ | 13.33 | | | $ | 11.85 | | | $ | 8.17 | | | $ | 12.85 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.10 | ) | | | (.14 | ) | | | (.07 | ) | | | (.13 | ) | | | (.14 | ) | | | (.07 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | .89 | | | | .28 | | | | (.95 | ) | | | 1.61 | | | | 3.82 | | | | (4.61 | ) |
| Total from investment operations | | | .79 | | | | .14 | | | | (1.02 | ) | | | 1.48 | | | | 3.68 | | | | (4.68 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | — | | | | — | |
| Redemption fees collected | | | — | | | | — | | | | — | | | | — | c | | | — | c | | | — | c |
| Net asset value, end of period | | $ | 13.19 | | | $ | 12.40 | | | $ | 12.31 | | | $ | 13.33 | | | $ | 11.85 | | | $ | 8.17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 6.37 | % | | | 1.14 | % | | | (7.65 | %) | | | 12.49 | % | | | 45.04 | % | | | (36.42 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 23,158 | | | $ | 23,554 | | | $ | 32,502 | | | $ | 50,381 | | | $ | 64,918 | | | $ | 57,792 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.56 | %) | | | (1.12 | %) | | | (0.54 | %) | | | (1.08 | %) | | | (1.37 | %) | | | (0.66 | %) |
| Total expensesg | | | 3.11 | % | | | 2.69 | % | | | 2.41 | % | | | 2.46 | % | | | 2.43 | % | | | 2.44 | % |
| Portfolio turnover rate | | | 138 | % | | | 183 | % | | | 190 | % | | | 231 | % | | | 375 | % | | | 528 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 15 |
| U.S. LONG SHORT MOMENTUM FUND |
| FINANCIAL HIGHLIGHTS (continued) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.53 | | | $ | 13.33 | | | $ | 14.32 | | | $ | 12.63 | | | $ | 8.65 | | | $ | 13.49 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.06 | ) | | | (.04 | ) | | | .03 | | | | (.04 | ) | | | (.07 | ) | | | — | e |
| Net gain (loss) on investments (realized and unrealized) | | | .97 | | | | .29 | | | | (1.02 | ) | | | 1.73 | | | | 4.05 | | | | (4.84 | ) |
| Total from investment operations | | | .91 | | | | .25 | | | | (.99 | ) | | | 1.69 | | | | 3.98 | | | | (4.84 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | — | | | | — | |
| Redemption fees collected | | | — | | | | — | | | | — | | | | — | c | | | — | c | | | — | c |
| Net asset value, end of period | | $ | 14.44 | | | $ | 13.53 | | | $ | 13.33 | | | $ | 14.32 | | | $ | 12.63 | | | $ | 8.65 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 6.73 | % | | | 1.88 | % | | | (6.91 | %) | | | 13.38 | % | | | 46.01 | % | | | (35.88 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 29,848 | | | $ | 26,257 | | | $ | 54,589 | | | $ | 87,212 | | | $ | 99,418 | | | $ | 76,080 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.83 | %) | | | (0.29 | %) | | | 0.20 | % | | | (0.31 | %) | | | (0.63 | %) | | | (0.01 | %) |
| Total expensesg | | | 2.37 | % | | | 1.88 | % | | | 1.66 | % | | | 1.70 | % | | | 1.68 | % | | | 1.68 | % |
| Portfolio turnover rate | | | 138 | % | | | 183 | % | | | 190 | % | | | 231 | % | | | 375 | % | | | 528 | % |
| 16 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| U.S. LONG SHORT MOMENTUM FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | |
| Institutional Class | | 2013a | | | 2013 | | | 2012f | |
| Per Share Data | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.60 | | | $ | 13.33 | | | $ | 12.39 | |
| Income (loss) from investment operations: | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.04 | ) | | | (.02 | ) | | | .06 | |
| Net gain on investments (realized and unrealized) | | | .98 | | | | .31 | | | | .88 | |
| Total from investment operations | | | .94 | | | | .29 | | | | .94 | |
| Less distributions from: | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.02 | ) | | | — | |
| Total distributions | | | — | | | | (.02 | ) | | | — | |
| Net asset value, end of period | | $ | 14.54 | | | $ | 13.60 | | | $ | 13.33 | |
| | | | | | | | | | | | | |
| Total Returnd | | | 6.91 | % | | | 2.15 | % | | | 7.59 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 13 | | | $ | 11 | | | $ | 11 | |
| Ratios to average net assets: | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.60 | %) | | | (0.17 | )% | | | 1.29 | % |
| Total expensesg | | | 2.12 | % | | | 1.72 | % | | | 1.36 | % |
| Portfolio turnover rate | | | 138 | % | | | 183 | % | | | 190 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
| c | Redemption fees collected are 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 | Net investment income is less than $0.01 per share. |
| f | Since commencement of operations: November 30, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| g | Excluding interest and dividend expense related to short sales, the operating ratios for the years or periods presented would be: |
| | | 09/30/13 | | | 03/28/13 | | | 03/31/12 | | | 03/31/11 | | | 03/31/10 | | | 03/31/09 | |
| A-Class | | | 1.68 | % | | | 1.65 | % | | | 1.66 | % | | | 1.69 | % | | | 1.68 | % | | | 1.69 | % |
| C-Class | | | 2.43 | % | | | 2.40 | % | | | 2.41 | % | | | 2.44 | % | | | 2.43 | % | | | 2.44 | % |
| H-Class | | | 1.68 | % | | | 1.65 | % | | | 1.66 | % | | | 1.69 | % | | | 1.68 | % | | | 1.68 | % |
| Institutional Class | | | 1.42 | % | | | 1.41 | % | | | N/A | | | | N/A | | | | N/A | | | | N/A | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 17 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND
OBJECTIVE: Seeks to achieve capital growth.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | June 30, 2010 |
| C-Class | June 30, 2010 |
| H-Class | June 30, 2010 |
| Institutional Class | June 30, 2010 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| 18 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| EVENT DRIVEN AND DISTRESSED STRATEGIES FUND |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 95.6% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 8,195,295 | | | $ | 8,195,295 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 925,023 | | | | 925,023 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 721,854 | | | | 721,854 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 500,091 | | | | 500,091 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $10,342,263) | | | | | | | 10,342,263 | |
| Total Investments - 95.6% | | | | | | | | |
| (Cost $10,342,263) | | | | | | $ | 10,342,263 | |
| Other Assets & Liabilities, net - 4.4% | | | | | | | 479,980 | |
| Total Net Assets - 100.0% | | | | | | $ | 10,822,243 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain | |
| | | | | | | |
| INTEREST RATE FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 U.S. Treasury 5 Year Note | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $6,295,250) | | | 52 | | | $ | 80,435 | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 Russell 2000 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $2,572,560) | | | 24 | | | $ | 44,256 | |
| | | Units | | | | |
| EQUITY INDEX SWAP AGREEMENTS††,4 | | | | | | | | |
| Credit Suisse International October 2013 | | | | | | | | |
| Credit Suisse Illiquidity Premium | | | | | | | | |
| Liquid Index Swap | | | | | | | | |
| Terminating 10/22/13 | | | | | | | | |
| (Notional Value $3,304,178) | | | 2,876 | | | $ | 73,253 | |
CREDIT DEFAULT SWAP AGREEMENT PROTECTION SOLD††,3
| | | | | Protection | | | | | | | | | | | | Upfront | | | | |
| | | | | Premium | | | Maturity | | | Notional | | | Notional | | | Payments | | | Unrealized | |
| Index | | Counterparty | | Rate | | | Date | | | Principal | | | Value | | | Paid | | | Depreciation | |
| Markit CDX.NA.HY.21 Index | | Barclays Bank plc | | | 5.00 | % | | | 12/20/18 | | | $ | 6,800,000 | | | $ | 7,097,500 | | | $ | 314,006 | | | $ | (16,506 | ) |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Credit Default Swaps — See Note 6. |
| 4 | Total Return based on Credit Suisse Illiquidity Premium Liquid Index +/- financing at a variable rate. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 19 |
| EVENT DRIVEN AND DISTRESSED STRATEGIES FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $10,342,263) | | $ | 10,342,263 | |
| Segregated cash with broker | | | 251,091 | |
| Upfront payments paid on credit default swaps | | | 314,006 | |
| Unrealized appreciation on swap agreements | | | 73,253 | |
| Receivables: | | | | |
| Fund shares sold | | | 10,479 | |
| Protection fees on credit default swaps | | | 10,395 | |
| Variation margin | | | 4,949 | |
| Investment advisor | | | 841 | |
| Total assets | | | 11,007,277 | |
| Liabilities: | | | | |
| Overdraft due to custodian bank | | | 75,237 | |
| Unrealized depreciation on swap agreements | | | 16,506 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 60,987 | |
| Licensing fees | | | 9,641 | |
| Management fees | | | 7,422 | |
| Distribution and service fees | | | 2,210 | |
| Transfer agent and administrative fees | | | 2,062 | |
| Portfolio accounting fees | | | 825 | |
| Custodian fees | | | 97 | |
| Miscellaneous | | | 10,047 | |
| Total liabilities | | | 185,034 | |
| Net assets | | $ | 10,822,243 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 10,251,997 | |
| Accumulated net investment loss | | | (108,368 | ) |
| Accumulated net realized gain on investments | | | 497,176 | |
| Net unrealized appreciation on investments | | | 181,438 | |
| Net assets | | $ | 10,822,243 | |
| A-Class: | | | | |
| Net assets | | $ | 3,101,062 | |
| Capital shares outstanding | | | 108,005 | |
| Net asset value per share | | $ | 28.71 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 30.14 | |
| C-Class: | | | | |
| Net assets | | $ | 568,239 | |
| Capital shares outstanding | | | 20,319 | |
| Net asset value per share | | $ | 27.97 | |
| H-Class: | | | | |
| Net assets | | $ | 6,192,424 | |
| Capital shares outstanding | | | 215,661 | |
| Net asset value per share | | $ | 28.71 | |
| Institutional Class: | | | | |
| Net assets | | $ | 960,518 | |
| Capital shares outstanding | | | 33,174 | |
| Net asset value per share | | $ | 28.95 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends | | $ | 17,113 | |
| Interest | | | 1,320 | |
| Income from securities lending, net | | | 743 | |
| Total investment income | | | 19,176 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 48,132 | |
| Transfer agent and administrative fees | | | 13,370 | |
| Distribution and service fees: | | | | |
| A-Class | | | 3,371 | |
| C-Class | | | 3,843 | |
| H-Class | | | 7,885 | |
| Portfolio accounting fees | | | 5,348 | |
| Licensing fees | | | 18,451 | |
| Custodian fees | | | 612 | |
| Trustees’ fees* | | | 528 | |
| Miscellaneous | | | 7,990 | |
| Total expenses | | | 109,530 | |
| Less: | | | | |
| Expenses waived by Advisor | | | (6,184 | ) |
| Net expenses | | | 103,346 | |
| Net investment loss | | | (84,170 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (15,465 | ) |
| Swap agreements | | | 299,683 | |
| Futures contracts | | | 121,867 | |
| Net realized gain | | | 406,085 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (27,252 | ) |
| Swap agreements | | | 44,694 | |
| Futures contracts | | | 89,074 | |
| Net change in unrealized appreciation (depreciation) | | | 106,516 | |
| Net realized and unrealized gain | | | 512,601 | |
| Net increase in net assets resulting from operations | | $ | 428,431 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 20 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| EVENT DRIVEN AND DISTRESSED STRATEGIES FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (84,170 | ) | | $ | (90,035 | ) |
| Net realized gain on investments | | | 406,085 | | | | 842,332 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 106,516 | | | | 16,129 | |
| Net increase in net assets resulting from operations | | | 428,431 | | | | 768,426 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 1,437,560 | | | | 2,996,925 | |
| C-Class | | | 123,099 | | | | 488,372 | |
| H-Class | | | 385,033 | | | | 2,355,423 | |
| Institutional Class | | | 65,811 | | | | 720,286 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (531,366 | ) | | | (3,657,692 | ) |
| C-Class | | | (619,713 | ) | | | (552,423 | ) |
| H-Class | | | (575,123 | ) | | | (2,899,724 | ) |
| Institutional Class | | | (34,977 | ) | | | (206,045 | ) |
| Net increase (decrease) from capital share transactions | | | 250,324 | | | | (754,878 | ) |
| Net increase in net assets | | | 678,755 | | | | 13,548 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 10,143,488 | | | | 10,129,940 | |
| End of period | | $ | 10,822,243 | | | $ | 10,143,488 | |
| Accumulated net investment loss at end of period | | $ | (108,368 | ) | | $ | (24,198 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 51,602 | | | | 112,031 | |
| C-Class | | | 4,472 | | | | 18,959 | |
| H-Class | | | 13,809 | | | | 90,146 | |
| Institutional Class | | | 2,325 | | | | 26,823 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (19,064 | ) | | | (138,867 | ) |
| C-Class | | | (22,677 | ) | | | (21,348 | ) |
| H-Class | | | (20,685 | ) | | | (111,346 | ) |
| Institutional Class | | | (1,230 | ) | | | (7,667 | ) |
| Net increase (decrease) in shares | | | 8,552 | | | | (31,269 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 21 |
| EVENT DRIVEN AND DISTRESSED STRATEGIES 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 27.56 | | | $ | 25.37 | | | $ | 26.86 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.22 | ) | | | (.21 | ) | | | (.37 | ) | | | (.33 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.37 | | | | 2.40 | | | | (.36 | ) | | | 4.27 | |
| Total from investment operations | | | 1.15 | | | | 2.19 | | | | (.73 | ) | | | 3.94 | |
| Less distributions from: | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Total distributions | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Net asset value, end of period | | $ | 28.71 | | | $ | 27.56 | | | $ | 25.37 | | | $ | 26.86 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | 4.17 | % | | | 8.63 | % | | | (2.60 | %) | | | 16.24 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,101 | | | $ | 2,080 | | | $ | 2,595 | | | $ | 11,591 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.58 | %) | | | (0.80 | %) | | | (1.43 | %) | | | (1.65 | %) |
| Total expensesf | | | 2.01 | % | | | 2.03 | % | | | 1.93 | % | | | 2.03 | % |
| Net expensese | | | 1.90 | % | | | 1.91 | % | | | 1.85 | % | | | 1.89 | % |
| Portfolio turnover rate | | | 87 | % | | | 228 | % | | | 513 | % | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Period Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 26.95 | | | $ | 24.99 | | | $ | 26.67 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.30 | ) | | | (.43 | ) | | | (.52 | ) | | | (.48 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.32 | | | | 2.39 | | | | (.40 | ) | | | 4.23 | |
| Total from investment operations | | | 1.02 | | | | 1.96 | | | | (.92 | ) | | | 3.75 | |
| Less distributions from: | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Total distributions | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Net asset value, end of period | | $ | 27.97 | | | $ | 26.95 | | | $ | 24.99 | | | $ | 26.67 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | 3.78 | % | | | 7.89 | % | | | (3.38 | %) | | | 15.46 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 568 | | | $ | 1,038 | | | $ | 1,022 | | | $ | 1,363 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.22 | %) | | | (1.67 | %) | | | (2.04 | %) | | | (2.42 | %) |
| Total expensesf | | | 2.77 | % | | | 2.79 | % | | | 2.66 | % | | | 2.79 | % |
| Net expensese | | | 2.65 | % | | | 2.66 | % | | | 2.60 | % | | | 2.65 | % |
| Portfolio turnover rate | | | 87 | % | | | 228 | % | | | 513 | % | | | — | |
| 22 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| EVENT DRIVEN AND DISTRESSED STRATEGIES FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 27.57 | | | $ | 25.37 | | | $ | 26.86 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.21 | ) | | | (.23 | ) | | | (.34 | ) | | | (.33 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.35 | | | | 2.43 | | | | (.39 | ) | | | 4.27 | |
| Total from investment operations | | | 1.14 | | | | 2.20 | | | | (.73 | ) | | | 3.94 | |
| Less distributions from: | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Total distributions | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Net asset value, end of period | | $ | 28.71 | | | $ | 27.57 | | | $ | 25.37 | | | $ | 26.86 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | 4.13 | % | | | 8.67 | % | | | (2.60 | %) | | | 16.24 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,192 | | | $ | 6,134 | | | $ | 6,183 | | | $ | 8,886 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.54 | %) | | | (0.88 | %) | | | (1.33 | %) | | | (1.67 | %) |
| Total expensesf | | | 2.02 | % | | | 2.03 | % | | | 1.91 | % | | | 2.04 | % |
| Net expensese | | | 1.90 | % | | | 1.91 | % | | | 1.85 | % | | | 1.90 | % |
| Portfolio turnover rate | | | 87 | % | | | 228 | % | | | 513 | % | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Period Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| Institutional Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 27.76 | | | $ | 25.49 | | | $ | 26.91 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.18 | ) | | | (.19 | ) | | | (.23 | ) | | | (.27 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.37 | | | | 2.46 | | | | (.43 | ) | | | 4.26 | |
| Total from investment operations | | | 1.19 | | | | 2.27 | | | | (.66 | ) | | | 3.99 | |
| Less distributions from: | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Total distributions | | | — | | | | — | | | | (.76 | ) | | | (2.08 | ) |
| Net asset value, end of period | | $ | 28.95 | | | $ | 27.76 | | | $ | 25.49 | | | $ | 26.91 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | 4.29 | % | | | 8.91 | % | | | (2.34 | %) | | | 16.45 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 961 | | | $ | 891 | | | $ | 329 | | | $ | 59 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.29 | %) | | | (0.70 | %) | | | (0.90 | %) | | | (1.42 | %) |
| Total expensesf | | | 1.77 | % | | | 1.80 | % | | | 1.61 | % | | | 1.79 | % |
| Net expensese | | | 1.65 | % | | | 1.67 | % | | | 1.58 | % | | | 1.65 | % |
| Portfolio turnover rate | | | 87 | % | | | 228 | % | | | 513 | % | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Since commencement of operations: June 30, 2010. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| c | Net investment loss per share 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 | Net expense information reflects the expense ratios after expense waivers. |
| f | Does not include expenses of the underlying funds in which the Fund invests. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 23 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
EMERGING MARKETS 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the performance of the BNY Mellon Emerging Markets 50 ADR Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | | October 29, 2010 |
| C-Class | | | October 29, 2010 |
| H-Class | | | October 29, 2010 |
| Ten Largest Holdings (% of Total Net Assets) | | | | |
| Taiwan Semiconductor Manufacturing | | | | |
| Company Ltd. ADR | | | 5.1 | % |
| China Mobile Ltd. ADR | | | 4.8 | % |
| America Movil SAB de CV ADR | | | 3.5 | % |
| Baidu, Inc. ADR | | | 3.5 | % |
| Itau Unibanco Holding S.A. ADR | | | 2.9 | % |
| Petroleo Brasileiro S.A. ADR | | | 2.8 | % |
| CNOOC Ltd. ADR | | | 2.7 | % |
| Vale S.A. ADR | | | 2.5 | % |
| Banco Bradesco S.A. ADR | | | 2.4 | % |
| Cia de Bebidas das Americas ADR | | | 2.4 | % |
| Top Ten Total | | | 32.6 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
INVESTMENT CONCENTRATION
At September 30, 2013, the investment diversification of the Fund by country was as follows:
| Country | | % of Common Stocks | |
| Brazil | | | 30.20 | % |
| China | | | 19.08 | % |
| Taiwan | | | 9.97 | % |
| Mexico | | | 9.87 | % |
| South Korea | | | 8.92 | % |
| Hong Kong | | | 7.72 | % |
| India | | | 5.83 | % |
| South Africa | | | 3.43 | % |
| Colombia | | | 1.33 | % |
| Russia | | | 1.32 | % |
| Indonesia | | | 0.94 | % |
| Chile | | | 0.72 | % |
| Philippines | | | 0.68 | % |
| Total Common Stocks | | | 100.00 | % |
| 24 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| EMERGING MARKETS 2x STRATEGY FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 70.1% | | | | | | | | |
| | | | | | | | | |
| ENERGY - 14.7% | | | | | | | | |
| Petroleo Brasileiro S.A. ADR | | | 13,705 | | | $ | 229,285 | |
| CNOOC Ltd. ADR | | | 1,077 | | | | 217,339 | |
| Sasol Ltd. ADR | | | 3,396 | | | | 162,295 | |
| PetroChina Company Ltd. ADR | | | 1,414 | | | | 155,469 | |
| Petroleo Brasileiro S.A. ADR | | | 9,977 | | | | 154,544 | |
| China Petroleum & Chemical Corp. ADR | | | 1,710 | | | | 133,876 | |
| Ecopetrol S.A. ADR | | | 1,654 | | | | 76,084 | |
| Ultrapar Participacoes S.A. ADR | | | 2,773 | | | | 68,188 | |
| Total Energy | | | | | | | 1,197,080 | |
| TELECOMMUNICATION SERVICES - 13.7% | | | | | | | | |
| China Mobile Ltd. ADR | | | 7,006 | | | | 395,348 | |
| America Movil SAB de CV ADR | | | 14,412 | | | | 285,502 | |
| Chunghwa Telecom Company Ltd. ADR | | | 2,548 | | | | 80,465 | |
| Mobile Telesystems OJSC ADR* | | | 3,393 | | | | 75,528 | |
| SK Telecom Company Ltd. ADR | | | 2,387 | | | | 54,185 | |
| Telekomunikasi Indonesia Persero | | | | | | | | |
| Tbk PT ADR | | | 1,486 | | | | 53,957 | |
| China Unicom Hong Kong Ltd. ADR | | | 3,004 | | | | 46,322 | |
| China Telecom Corporation Ltd. ADR | | | 930 | | | | 45,970 | |
| Telefonica Brasil S.A. ADR | | | 1,945 | | | | 43,646 | |
| Philippine Long Distance | | | | | | | | |
| Telephone Co. ADR | | | 575 | | | | 39,008 | |
| Total Telecommunication Services | | | | | | | 1,119,931 | |
| INFORMATION TECHNOLOGY - 13.2% | | | | | | | | |
| Taiwan Semiconductor Manufacturing | | | | | | | | |
| Company Ltd. ADR | | | 24,674 | | | | 418,470 | |
| Baidu, Inc. ADR* | | | 1,813 | | | | 281,341 | |
| Infosys Ltd. ADR | | | 3,231 | | | | 155,444 | |
| Qihoo 360 Technology Company Ltd. ADR* | | | 513 | | | | 42,682 | |
| Wipro Ltd. ADR | | | 3,936 | | | | 40,383 | |
| Advanced Semiconductor | | | | | | | | |
| Engineering, Inc. ADR | | | 8,051 | | | | 38,484 | |
| LG Display Company Ltd. ADR* | | | 2,974 | | | | 35,480 | |
| NetEase, Inc. ADR | | | 483 | | | | 35,071 | |
| United Microelectronics Corp. ADR | | | 15,945 | | | | 32,847 | |
| Total Information Technology | | | | | | | 1,080,202 | |
| FINANCIALS - 11.3% | | | | | | | | |
| Itau Unibanco Holding S.A. ADR | | | 16,822 | | | | 237,526 | |
| Banco Bradesco S.A. ADR | | | 14,100 | | | | 195,708 | |
| China Life Insurance Company Ltd. ADR | | | 3,325 | | | | 129,210 | |
| Shinhan Financial Group | | | | | | | | |
| Company Ltd. ADR | | | 3,178 | | | | 128,709 | |
| KB Financial Group, Inc. ADR | | | 2,590 | | | | 90,702 | |
| HDFC Bank Ltd. ADR | | | 2,611 | | | | 80,367 | |
| ICICI Bank Ltd. ADR | | | 1,886 | | | | 57,485 | |
| Total Financials | | | | | | | 919,707 | |
| MATERIALS - 8.0% | | | | | | | | |
| Vale S.A. ADR | | | 14,133 | | | | 200,829 | |
| POSCO ADR | | | 2,080 | | | | 153,171 | |
| Vale S.A. ADR | | | 8,731 | | | | 136,291 | |
| Cemex SAB de CV ADR* | | | 7,565 | | | | 84,577 | |
| Gerdau S.A. ADR | | | 5,991 | | | | 44,693 | |
| AngloGold Ashanti Ltd. ADR | | | 2,559 | | | | 33,984 | |
| Total Materials | | | | | | | 653,545 | |
| CONSUMER STAPLES - 6.2% | | | | | | | | |
| Cia de Bebidas das Americas ADR | | | 5,065 | | | | 194,243 | |
| Fomento Economico Mexicano | | | | | | | | |
| SAB de CV ADR | | | 1,260 | | | | 122,333 | |
| BRF S.A. ADR | | | 4,327 | | | | 106,141 | |
| Cia de Bebidas das Americas ADR | | | 1,060 | | | | 41,022 | |
| Cia Brasileira de Distribuicao Grupo | | | | | | | | |
| Pao de Acucar ADR | | | 878 | | | | 40,406 | |
| Total Consumer Staples | | | | | | | 504,145 | |
| CONSUMER DISCRETIONARY - 1.5% | | | | | | | | |
| Grupo Televisa SAB ADR | | | 2,588 | | | | 72,334 | |
| Ctrip.com International Ltd. ADR* | | | 867 | | | | 50,659 | |
| Total Consumer Discretionary | | | | | | | 122,993 | |
| UTILITIES - 1.1% | | | | | | | | |
| Korea Electric Power Corp. ADR* | | | 3,442 | | | | 48,326 | |
| Enersis S.A. ADR | | | 2,567 | | | | 41,226 | |
| Total Utilities | | | | | | | 89,552 | |
| INDUSTRIALS - 0.4% | | | | | | | | |
| Embraer S.A. ADR | | | 1,092 | | | | 35,457 | |
| Total Common Stocks | | | | | | | | |
| (Cost $5,640,797) | | | | | | | 5,722,612 | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENTS††,1 - 26.3% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | $ | 1,641,657 | | | | 1,641,657 | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 417,564 | | | | 417,564 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 47,132 | | | | 47,132 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 36,780 | | | | 36,780 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $2,143,133) | | | | | | | 2,143,133 | |
| Total Investments - 96.4% | | | | | | | | |
| (Cost $7,783,930) | | | | | | $ | 7,865,745 | |
| Other Assets & Liabilities, net - 3.6% | | | | | | | 289,837 | |
| Total Net Assets - 100.0% | | | | | | $ | 8,155,582 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 25 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| EMERGING MARKETS 2x STRATEGY FUND |
| | | | | | Unrealized | |
| | | Contracts | | | Loss | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 MSCI Emerging Markets | | | | | | | | |
| Index Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $491,600) | | | 10 | | | $ | (141 | ) |
| | | Units | | | | |
| EQUITY INDEX SWAP AGREEMENTS††, 3 | | | | | | | | |
| Goldman Sachs International | | | | | | | | |
| October 2013 Bank of New York Mellon | | | | | | | | |
| Emerging Markets 50 ADR Index Swap, | | | | | | | | |
| Terminating 10/31/13 | | | | | | | | |
| (Notional Value $10,044,407) | | | 4,317 | | | $ | (132,271 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Total Return based on Bank of New York Mellon Emerging Markets 50 ADR Index +/- financing at a variable rate. |
ADR — American Depositary Receipt
| 26 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| EMERGING MARKETS 2x STRATEGY FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $5,640,797) | | $ | 5,722,612 | |
| Repurchase agreements, at value | | | | |
| (cost $2,143,133) | | | 2,143,133 | |
| Total investments | | | | |
| (cost $7,783,930) | | | 7,865,745 | |
| Cash | | | 2,246 | |
| Receivables: | | | | |
| Securities sold | | | 796,370 | |
| Fund shares sold | | | 282,435 | |
| Dividends | | | 4,005 | |
| Total assets | | | 8,950,801 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 132,271 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 645,761 | |
| Swap settlement | | | 8,228 | |
| Management fees | | | 3,834 | |
| Distribution and service fees | | | 1,205 | |
| Transfer agent and administrative fees | | | 1,065 | |
| Portfolio accounting fees | | | 639 | |
| Variation margin | | | 141 | |
| Miscellaneous | | | 2,075 | |
| Total liabilities | | | 795,219 | |
| Net assets | | $ | 8,155,582 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 9,700,059 | |
| Accumulated net investment loss | | | (4,050 | ) |
| Accumulated net realized loss on investments | | | (1,489,830 | ) |
| Net unrealized depreciation on investments | | | (50,597 | ) |
| Net assets | | $ | 8,155,582 | |
| A-Class: | | | | |
| Net assets | | $ | 604,564 | |
| Capital shares outstanding | | | 44,726 | |
| Net asset value per share | | $ | 13.52 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 14.19 | |
| C-Class: | | | | |
| Net assets | | $ | 201,216 | |
| Capital shares outstanding | | | 15,021 | |
| Net asset value per share | | $ | 13.40 | |
| H-Class: | | | | |
| Net assets | | $ | 7,349,802 | |
| Capital shares outstanding | | | 542,121 | |
| Net asset value per share | | $ | 13.56 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $1,660) | | $ | 41,991 | |
| Interest | | | 180 | |
| Income from securities lending, net | | | 1 | |
| Total investment income | | | 42,172 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 17,342 | |
| Transfer agent and administrative fees | | | 4,818 | |
| Distribution and service fees: | | | | |
| A-Class | | | 314 | |
| C-Class | | | 1,027 | |
| H-Class | | | 4,249 | |
| Portfolio accounting fees | | | 2,279 | |
| Licensing fees | | | 2,812 | |
| Custodian fees | | | 216 | |
| Trustees’ fees* | | | 213 | |
| Line of credit fees | | | 131 | |
| Miscellaneous | | | 2,833 | |
| Total expenses | | | 36,234 | |
| Less: | | | | |
| Expenses waived by Advisor | | | (2,041 | ) |
| Net expenses | | | 34,193 | |
| Net investment income | | | 7,979 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (104,388 | ) |
| Swap agreements | | | 72,477 | |
| Futures contracts | | | 15,136 | |
| Net realized loss | | | (16,775 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (31,979 | ) |
| Swap agreements | | | (148,834 | ) |
| Futures contracts | | | (1,122 | ) |
| Net change in unrealized appreciation (depreciation) | | | (181,935 | ) |
| Net realized and unrealized loss | | | (198,710 | ) |
| Net decrease in net assets resulting from operations | | $ | (190,731 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 27 |
| EMERGING MARKETS 2x STRATEGY FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income (loss) | | $ | 7,979 | | | $ | (20,212 | ) |
| Net realized loss on investments | | | (16,775 | ) | | | (1,098,163 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (181,935 | ) | | | 282,695 | |
| Net decrease in net assets resulting from operations | | | (190,731 | ) | | | (835,680 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 1,052,622 | | | | 1,558,765 | |
| C-Class | | | 15,207,121 | | | | 13,271,478 | |
| H-Class | | | 68,890,354 | | | | 99,924,060 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (557,983 | ) | | | (1,755,452 | ) |
| C-Class | | | (15,126,193 | ) | | | (13,120,339 | ) |
| H-Class | | | (63,421,122 | ) | | | (101,879,772 | ) |
| Net increase (decrease) from capital share transactions | | | 6,044,799 | | | | (2,001,260 | ) |
| Net increase in net assets | | | 5,854,068 | | | | 2,836,940 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 2,301,514 | | | | 5,138,454 | |
| End of period | | $ | 8,155,582 | | | $ | 2,301,514 | |
| Accumulated net investment loss at end of period | | $ | (4,050 | ) | | $ | (12,029 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 81,334 | | | | 99,771 | |
| C-Class | | | 1,175,761 | | | | 911,981 | |
| H-Class | | | 5,197,390 | | | | 6,760,022 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (43,797 | ) | | | (113,377 | ) |
| C-Class | | | (1,168,157 | ) | | | (908,111 | ) |
| H-Class | | | (4,796,557 | ) | | | (6,887,319 | ) |
| Net increase (decrease) in shares | | | 445,974 | | | | (137,033 | ) |
| 28 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| EMERGING MARKETS 2x STRATEGY 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.72 | | | $ | 17.48 | | | $ | 26.95 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.03 | ) | | | (.07 | ) | | | (— | )d | | | (.13 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.17 | ) | | | (2.69 | ) | | | (8.35 | ) | | | 2.08 | |
| Total from investment operations | | | (1.20 | ) | | | (2.76 | ) | | | (8.35 | ) | | | 1.95 | |
| Payments by affiliates | | | — | | | | — | | | | (1.12 | ) | | | — | |
| Redemption fees collected | | | — | | | | — | | | | (1.12 | ) | | | — | |
| Net asset value, end of period | | $ | 13.52 | | | $ | 14.72 | | | $ | 17.48 | | | $ | 26.95 | |
| | | | | | | | | | | | | | | | | |
| Total Returne | | | (8.15 | %) | | | (15.79 | %) | | | (30.00 | %) | | | 7.80 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 605 | | | $ | 106 | | | $ | 363 | | | $ | 992 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.39 | %) | | | (0.51 | %) | | | (0.01 | %) | | | (1.42 | %) |
| Total expenses | | | 1.86 | % | | | 1.88 | % | | | 1.77 | % | | | 1.85 | % |
| Net expensesf | | | 1.75 | % | | | 1.75 | % | | | 1.69 | % | | | 1.73 | % |
| Portfolio turnover rate | | | 508 | % | | | 730 | % | | | 883 | % | | | 58 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Period Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.58 | | | $ | 17.46 | | | $ | 26.83 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.09 | ) | | | (.25 | ) | | | (.18 | ) | | | (.31 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.09 | ) | | | (2.63 | ) | | | (8.07 | ) | | | 2.14 | |
| Total from investment operations | | | (1.18 | ) | | | (2.88 | ) | | | (8.25 | ) | | | 1.83 | |
| Payments by affiliates | | | — | | | | — | | | | (1.12 | ) | | | — | |
| Redemption fees collected | | | — | | | | — | | | | (1.12 | ) | | | — | |
| Net asset value, end of period | | $ | 13.40 | | | $ | 14.58 | | | $ | 17.46 | | | $ | 26.83 | |
| | | | | | | | | | | | | | | | | |
| Total Returne | | | (8.09 | %) | | | (16.49 | %) | | | (29.75 | %) | | | 7.32 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 201 | | | $ | 108 | | | $ | 62 | | | $ | 726 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.38 | %) | | | (1.61 | %) | | | (0.87 | %) | | | (1.98 | %) |
| Total expenses | | | 2.60 | % | | | 2.59 | % | | | 2.54 | % | | | 2.60 | % |
| Net expensesf | | | 2.49 | % | | | 2.46 | % | | | 2.46 | % | | | 2.49 | % |
| Portfolio turnover rate | | | 508 | % | | | 730 | % | | | 883 | % | | | 58 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 29 |
| EMERGING MARKETS 2x STRATEGY FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.77 | | | $ | 17.55 | | | $ | 26.94 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment income (loss)c | | | .04 | | | | (.07 | ) | | | (.07 | ) | | | (.11 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.25 | ) | | | (2.71 | ) | | | (8.20 | ) | | | 2.05 | |
| Total from investment operations | | | (1.21 | ) | | | (2.78 | ) | | | (8.27 | ) | | | 1.94 | |
| Payments by affiliates | | | — | | | | — | | | | (1.12 | ) | | | — | |
| Redemption fees collected | | | — | | | | — | | | | (1.12 | ) | | | — | |
| Net asset value, end of period | | $ | 13.56 | | | $ | 14.77 | | | $ | 17.55 | | | $ | 26.94 | |
| | | | | | | | | | | | | | | | | |
| Total Returne | | | (8.25 | %) | | | (15.78 | %) | | | (29.70 | %) | | | 7.76 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 7,350 | | | $ | 2,087 | | | $ | 4,713 | | | $ | 3,705 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.58 | % | | | (0.49 | %) | | | (0.37 | %) | | | (1.05 | %) |
| Total expenses | | | 1.84 | % | | | 1.83 | % | | | 1.77 | % | | | 1.85 | % |
| Net expensesf | | | 1.73 | % | | | 1.69 | % | | | 1.69 | % | | | 1.74 | % |
| Portfolio turnover rate | | | 508 | % | | | 730 | % | | | 883 | % | | | 58 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Since commencement of operations: October 29, 2010. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| c | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
| d | Net investment loss 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 | Net expense information reflects the expense ratios after expense waivers. |
| 30 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE EMERGING MARKETS 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the inverse (opposite) of the performance of the BNY Mellon Emerging Markets 50 ADR Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | October 29, 2010 |
| C-Class | October 29, 2010 |
| H-Class | October 29, 2010 |
The Fund invests principally in derivative investments such as swap agreements.
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 31 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE EMERGING MARKETS 2x STRATEGY FUND |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS†,1 - 103.1% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 1,832,582 | | | $ | 1,832,582 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 1,311,030 | | | | 1,311,030 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 206,848 | | | | 206,848 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 161,417 | | | | 161,417 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $3,511,877) | | | | | | | 3,511,877 | |
| Total Investments - 103.1% | | | | | | | | |
| (Cost $3,511,877) | | | | | | $ | 3,511,877 | |
| Other Assets & Liabilities, net - (3.1)% | | | | | | | (105,555 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 3,406,322 | |
| | | | | | Unrealized | |
| | | Units | | | Gain | |
| | | | | | | |
| EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†,3 | | | | | | | | |
| Goldman Sachs International | | | | | | | | |
| October 2013 Bank of New York Mellon | | | | | | | | |
| Emerging Markets 50 ADR Index Swap, | | | | | | | | |
| Terminating 10/31/133 | | | | | | | | |
| (Notional Value $6,775,088) | | | 2,912 | | | $ | 82,690 | |
| † | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Total Return based on Bank of New York Mellon Emerging Markets 50 ADR Index +/- financing at a variable rate. |
| 32 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE EMERGING MARKETS 2x STRATEGY FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $3,511,877) | | | 3,511,877 | |
| Unrealized appreciation on swap agreements | | | 82,690 | |
| Receivable for swap settlement | | | 1,459 | |
| Receivables: | | | | |
| Fund shares sold | | | 316,639 | |
| Interest | | | 2 | |
| Total assets | | | 3,912,667 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 500,401 | |
| Management fees | | | 2,009 | |
| Distribution and service fees | | | 650 | |
| Transfer agent and administrative fees | | | 558 | |
| Portfolio accounting fees | | | 335 | |
| Variation margin | | | 24 | |
| Miscellaneous | | | 2,368 | |
| Total liabilities | | | 506,345 | |
| Net assets | | $ | 3,406,322 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 4,993,923 | |
| Accumulated net investment loss | | | (33,100 | ) |
| Accumulated net realized loss on investments | | | (1,637,191 | ) |
| Net unrealized appreciation on investments | | | 82,690 | |
| Net assets | | $ | 3,406,322 | |
| A-Class: | | | | |
| Net assets | | $ | 253,819 | |
| Capital shares outstanding | | | 13,413 | |
| Net asset value per share | | $ | 18.92 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 19.86 | |
| C-Class: | | | | |
| Net assets | | $ | 93,001 | |
| Capital shares outstanding | | | 4,717 | |
| Net asset value per share | | $ | 19.72 | |
| H-Class: | | | | |
| Net assets | | $ | 3,059,502 | |
| Capital shares outstanding | | | 161,628 | |
| Net asset value per share | | $ | 18.93 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Interest | | $ | 340 | |
| Total investment income | | | 340 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 13,007 | |
| Transfer agent and administrative fees | | | 3,614 | |
| Distribution and service fees: | | | | |
| A-Class | | | 300 | |
| C-Class | | | 2,200 | |
| H-Class | | | 2,765 | |
| Portfolio accounting fees | | | 1,676 | |
| Licensing fees | | | 2,024 | |
| Custodian fees | | | 164 | |
| Trustees’ fees* | | | 112 | |
| Miscellaneous | | | 2,176 | |
| Total expenses | | | 28,038 | |
| Less: | | | | |
| Expenses waived by Advisor | | | (1,445 | ) |
| Net expenses | | | 26,593 | |
| Net investment loss | | | (26,253 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Swap agreements | | | (485,640 | ) |
| Futures contracts | | | (25,469 | ) |
| Net realized loss | | | (511,109 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Swap agreements | | | 107,450 | |
| Net change in unrealized appreciation (depreciation) | | | 107,450 | |
| Net realized and unrealized loss | | | (403,659 | ) |
| Net decrease in net assets resulting from operations | | $ | (429,912 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 33 |
| INVERSE EMERGING MARKETS 2x STRATEGY FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (26,253 | ) | | $ | (32,613 | ) |
| Net realized gain (loss) on investments | | | (511,109 | ) | | | 142,413 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 107,450 | | | | (76,145 | ) |
| Net increase (decrease) in net assets resulting from operations | | | (429,912 | ) | | | 33,655 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 578,046 | | | | 1,703,657 | |
| C-Class | | | 17,507,406 | | | | 25,100,465 | |
| H-Class | | | 53,330,767 | | | | 87,435,015 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (539,021 | ) | | | (1,344,868 | ) |
| C-Class | | | (17,748,517 | ) | | | (26,330,612 | ) |
| H-Class | | | (51,608,159 | ) | | | (87,766,103 | ) |
| Net increase (decrease) from capital share transactions | | | 1,520,522 | | | | (1,202,446 | ) |
| Net increase in net assets | | | 1,090,610 | | | | 1,168,791 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 2,315,712 | | | | 3,484,503 | |
| End of period | | $ | 3,406,322 | | | $ | 2,315,712 | |
| Accumulated net investment loss at end of period | | $ | (33,100 | ) | | $ | (6,847 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 25,870 | | | | 87,501 | |
| C-Class | | | 797,878 | | | | 1,111,860 | |
| H-Class | | | 2,576,211 | | | | 4,131,683 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (25,895 | ) | | | (74,495 | ) |
| C-Class | | | (798,908 | ) | | | (1,168,390 | ) |
| H-Class | | | (2,515,633 | ) | | | (4,145,468 | ) |
| Net increase (decrease) in shares | | | 59,523 | | | | (57,309 | ) |
| 34 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE EMERGING MARKETS 2x STRATEGY 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.23 | | | $ | 19.29 | | | $ | 21.15 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.18 | ) | | | (.33 | ) | | | (.39 | ) | | | (.16 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (.13 | ) | | | .27 | | | | (1.47 | ) | | | (3.69 | ) |
| Total from investment operations | | | (.31 | ) | | | (.06 | ) | | | (1.86 | ) | | | (3.85 | ) |
| Net asset value, end of period | | $ | 18.92 | | | $ | 19.23 | | | $ | 19.29 | | | $ | 21.15 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | (1.61 | %) | | | (0.26 | %) | | | (8.84 | %) | | | (15.40 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 254 | | | $ | 258 | | | $ | 8 | | | $ | 34 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.69 | %) | | | (1.60 | %) | | | (1.66 | %) | | | (1.61 | %) |
| Total expenses | | | 1.82 | % | | | 1.85 | % | | | 1.78 | % | | | 1.85 | % |
| Net expensese | | | 1.72 | % | | | 1.71 | % | | | 1.69 | % | | | 1.73 | % |
| Portfolio turnover rate | | | — | �� | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Period Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 20.07 | | | $ | 20.25 | | | $ | 21.33 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.26 | ) | | | (.49 | ) | | | (.55 | ) | | | (.25 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (.09 | ) | | | .31 | | | | (.53 | ) | | | (3.42 | ) |
| Total from investment operations | | | (.35 | ) | | | (.18 | ) | | | (1.08 | ) | | | (3.67 | ) |
| Net asset value, end of period | | $ | 19.72 | | | $ | 20.07 | | | $ | 20.25 | | | $ | 21.33 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | (1.79 | %) | | | (0.84 | %) | | | (5.06 | %)f | | | (14.68 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 93 | | | $ | 115 | | | $ | 1,261 | | | $ | 15 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.49 | %) | | | (2.41 | %) | | | (2.41 | %) | | | (2.37 | %) |
| Total expenses | | | 2.60 | % | | | 2.65 | % | | | 2.53 | % | | | 2.57 | % |
| Net expensese | | | 2.50 | % | | | 2.51 | % | | | 2.44 | % | | | 2.46 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 35 |
| INVERSE EMERGING MARKETS 2x STRATEGY FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011b | |
| Per Share Data | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.22 | | | $ | 19.29 | | | $ | 21.15 | | | $ | 25.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | |
| Net investment lossc | | | (.18 | ) | | | (.72 | ) | | | (.38 | ) | | | (.16 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (.11 | ) | | | .65 | | | | (1.48 | ) | | | (3.69 | ) |
| Total from investment operations | | | (.29 | ) | | | (.07 | ) | | | (1.86 | ) | | | (3.85 | ) |
| Net asset value, end of period | | $ | 18.93 | | | $ | 19.22 | | | $ | 19.29 | | | $ | 21.15 | |
| | | | | | | | | | | | | | | | | |
| Total Returnd | | | (1.51 | %) | | | (0.36 | %) | | | (8.79 | %) | | | (15.40 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,060 | | | $ | 1,942 | | | $ | 2,215 | | | $ | 2,892 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.70 | %) | | | (3.42 | %) | | | (1.67 | %) | | | (1.63 | %) |
| Total expenses | | | 1.82 | % | | | 1.82 | % | | | 1.79 | % | | | 1.85 | % |
| Net expensese | | | 1.72 | % | | | 1.68 | % | | | 1.70 | % | | | 1.74 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Since commencement of operations: October 29, 2010. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| c | Net investment loss per share 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 | Net expense information reflects the expense ratios after expense waivers. |
| f | Generally, the performance of the Fund’s C-Class shares will underperform the Fund’s H-Class shares and A-Class shares due to the C-Class shares’ higher expense ratio. However, the performance of the Fund’s C-Class shares is greater than that of the H-Class shares and A-Class shares due to the impact large redemptions of C-Class shares had on the expense accruals for C-Class shares. The effect of the expense accruals on the performance of the C-Class shares of the Fund was magnified by the small asset base of the C-Class shares. |
| 36 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) |
1. Organization and Significant Accounting Policies
Organization
The Rydex Series Funds (the “Trust”) is registered with the SEC under the Investment Company Act of 1940 (“1940 Act”) as a non-diversified, open-ended investment company of the series type. Each series, in effect, is representing a separate Fund. The Trust is authorized to issue an unlimited number of no par value shares. The Trust accounts for the assets of each Fund separately.
The Trust offers a combination of eight separate classes of shares: Investor Class shares, Advisor Class shares, A-Class shares, C-Class shares, H-Class shares, Y-Class shares, Institutional Class shares and Money Market Class shares. Sales of shares of each Class are made without a front-end sales charge at the net asset value per share (“NAV”), with the exception of A-Class shares. A-Class shares are sold at the NAV, plus the applicable front-end sales charge. The sales charge varies depending on the amount purchased, but will not exceed 4.75%. A-Class share purchases of $1 million or more are exempt from the front-end sales charge but have a 1% contingent deferred sales charge (“CDSC”) if shares are redeemed within 12 months of purchase. C-Class shares have a 1% CDSC if shares are redeemed within 12 months of purchase. 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 CDSC.
At September 30, 2013, the Trust consisted of fifty-one separate funds. This report covers the Alternatives Funds and the International Equity Funds (the “Funds”), while the other Funds are contained in separate reports. Only A-Class, C-Class, H-Class and Institutional Class shares had been issued by the Funds.
Guggenheim Investments (“GI”) provides advisory services and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Distributors, LLC (“GDL”) acts as principal underwriter for the Trust. GI, RFS and GDL are affiliated entities.
The International Equity Funds are designed and operated to accommodate frequent trading by shareholders and, unlike most mutual funds, offer unlimited exchange privileges with no minimum holding periods or transactions fees, which may cause those funds to experience high portfolio turnover.
Significant Accounting Policies
The following significant accounting policies are in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and are consistently followed by the Trust. This requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. All time references are based on Eastern Time.
A. The Trust calculates a NAV twice each business day; at 10:45 a.m. and at the close of the New York Stock Exchange (“NYSE”), usually 4:00 p.m for the Emerging Markets 2x Strategy Fund and Inverse Emerging Markets 2x Strategy Fund. All other Funds in this report will price at the afternoon NAV. The NAV is calculated using the current market value of each Fund’s total assets as of the respective time of calculation. These financial statements are based on the September 30, 2013, afternoon NAV.
Equity securities listed on an exchange (NYSE or American Stock Exchange) are valued at the last quoted sales price as of the close of business on the NYSE, usually 4:00 p.m. on the valuation date. Equity securities listed on the NASDAQ market system are valued at the NASDAQ Official Closing Price on the valuation date.
The value of futures contracts is accounted for using the unrealized gain or loss on the contracts that is determined by marking the contracts to their current realized settlement prices. Financial futures contracts are valued at the 4:00 p.m. price on the valuation date. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., the futures contract is valued at the Official Settlement Price of the exchange. However, the underlying securities from which the futures contract value is derived are monitored until 4:00 p.m. to determine if fair valuation would provide a more accurate valuation.
The value of equity index and credit default swap agreements entered into by a Fund is accounted for using the unrealized gain or loss on the agreements that is determined using the last quoted value of the index that the swap pertains to at the close of the NYSE, adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreements.
Repurchase agreements are valued at amortized cost, which approximates market value.
Investments for which market quotations are not readily available are fair valued as determined in good faith by GI under the direction of the Board of Trustees using methods established or ratified by
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 37 |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
the Board of Trustees. These methods include, but are not limited to: (i) obtaining general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, obtaining information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) obtaining other information and considerations, including current values in related markets.
B. Security transactions are recorded on the trade date for financial reporting purposes. Realized gains and losses from securities transactions are recorded using the identified cost basis. Proceeds from lawsuits related to investment holdings are recorded as realized gains in the respective Fund. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Taxable non-cash dividends are recorded as dividend income. Interest income, including amortization of premiums and accretion of discounts, is accrued on a daily basis. Distributions received from investments in REITs are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distribution by the issuer.
C. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.
D. When a Fund engages in a short sale of a security, an amount equal to the proceeds is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the market value of the short sale. The Fund maintains a segregated account of cash and/or securities as collateral for short sales.
Fees, if any, paid to brokers to borrow securities in connection with short sales are recorded as prime broker interest expense. In addition, the Fund must pay out the dividend rate of the equity or coupon rate of the treasury obligation to the lender and record this as an expense. Short sales dividend or prime broker interest expense is a cost associated with the investment objective of short sales transactions, rather than an operational cost associated with the day-to-day management of any mutual fund. The Funds may also receive rebate income from the broker resulting from the investment of the proceeds from securities sold short.
E. Upon entering into a futures contract, a Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is affected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
F. Swap agreements are marked-to-marked daily and the change, if any, is recorded as unrealized gain or loss. Payments received or made as a result of an agreement or termination of the agreement are recognized as realized gains or losses.
Credit default swap agreements are marked-to-market daily and the change, if any, is recorded as unrealized gain or loss. Upfront payments received or made by a Fund on credit default swap agreements are amortized over the expected life of the agreement. Periodic payments received or paid by a Fund are recorded as realized gains or losses. Payments received or made as a result of a credit event or termination of the contract are recognized, net of a proportional amount of the upfront payment, as realized gains or losses.
G. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Trust does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain and loss from investments. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies and currency gains or losses realized between the trade and settlement dates on investment transactions. Net unrealized exchange gains and losses arise from changes in the fair values of assets and liabilities other than investments in securities at the fiscal period end, resulting from changes in exchange rates.
H. The Funds may leave cash overnight in their cash account with the custodian, U.S. Bank. Periodically, a Fund may have cash due to the custodian bank as an overdraft balance. A fee is incurred on this overdraft, calculated by multiplying the overdraft by a rate based on the federal funds rate.
Segregated cash with the broker is held as collateral for investments in derivative instruments such as futures contracts or swap agreements.
I. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the
| 38 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
Classes based upon the value of the outstanding shares in each Class. Certain costs, such as distribution fees relating to A-Class shares and H-Class shares and service and distribution fees related to C-Class shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net assets of each Fund included in the Trust.
J. Throughout the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds and/or their affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
2. Financial Instruments
As part of their investment strategy, the Funds utilize short sales and a variety of derivative instruments including futures and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities.
A short sale is a transaction in which a Fund sells a security it does not own. If the security sold short decreases in price between the time the Fund sells the security and closes its short position, that Fund will realize a gain on the transaction. Conversely, if the security increases in price during the period, that Fund will realize a loss on the transaction. The risk of such price increases is the principal risk of engaging in short sales.
A futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities or other instruments at a set price for delivery at a future date. There are significant risks associated with a Fund’s use of futures contracts and related options, including (i) there may be an imperfect or no correlation between the changes in market value of the underlying asset and the prices of futures contracts; (ii) there may not be a liquid secondary market for a futures contract; (iii) trading restrictions or limitations may be imposed by an exchange; and (iv) government regulations may restrict trading in futures contracts. When investing in futures, there is minimal counterparty credit risk to the Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default.
A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. A credit default swap enables a Fund to buy or sell protection against a defined credit event of an issuer or a basket of securities. Generally, the seller of credit protection against an issuer or basket of securities receives a periodic payment from the buyer to compensate against potential default events. If a default event occurs, the seller must pay the buyer the full notional value of the reference obligation in exchange for the reference obligation. If no default occurs, the counterparty will pay the stream of payments and have no further obligations to the Fund selling the credit protection. A Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty, or in the case of a credit default swap in which the Fund is selling credit protection, the default of a third party issuer. Additionally, there is no guarantee that a Fund or an underlying fund could eliminate its exposure under an outstanding swap agreement by entering into an offsetting swap agreement with the same or another party.
In conjunction with the use of short sales, futures and swap agreements, the Funds are required to maintain collateral in various forms. The Funds use, where appropriate, depending on the financial instrument utilized and the broker involved, margin deposits at the broker, cash and/or securities segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund.
There are several risks associated with exposure to foreign currencies, foreign issuers and emerging markets. A Fund’s indirect and direct exposure to foreign currencies subjects the Fund to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of short positions, that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates and the imposition of currency controls or other political developments in the U.S. or abroad. In addition, the Fund may incur transaction costs in connection with conversions between various currencies. The Fund may, but is not obligated to, engage in currency hedging transactions, which generally involve buying currency forward, options or futures contracts. However, not all currency risk may be effectively hedged, and in some cases the costs of hedging techniques may outweigh expected benefits. In such instances, the value of securities denominated in foreign currencies can change significantly when foreign currencies strengthen or weaken relative to the U.S. dollar.
Certain Funds may invest in securities of foreign companies directly, or in financial instruments, such as ADRs and exchange-traded funds, which are indirectly linked to the performance of foreign issuers. Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political,
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 39 |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
regulatory, market, or economic developments and can perform differently from the U.S. market. Investing in securities of foreign companies directly, or in financial instruments that are indirectly linked to the performance of foreign issuers, may involve risks not typically associated with investing in U.S. issuers. The value of securities denominated in foreign currencies, and of dividends from such securities, can change significantly when foreign currencies strengthen or weaken relative to the U.S. dollar. Foreign securities markets generally have less trading volume and less liquidity than U.S. markets, and prices in some foreign markets may fluctuate more than those of securities traded on U.S. markets. Many foreign countries lack accounting and disclosure standards comparable to those that apply to U.S. companies, and it may be more difficult to obtain reliable information regarding a foreign issuer’s financial condition and operations. Transaction costs and costs associated with custody services are generally higher for foreign securities than they are for U.S. securities. Some foreign governments levy withholding taxes against dividend and interest income. Although in some countries portions of these taxes are recoverable, the non-recovered portion will reduce the income received by the Fund.
Emerging markets, which consist of countries that have an emerging stock market as defined by Standard & Poor’s®, countries or markets with low- to middle-income economies as classified by the World Bank, and other countries or markets with similar characteristics as determined by GI, can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market. Emerging markets can be subject to greater social, economic, regulatory, and political uncertainties and can be extremely volatile. As a result, the securities of emerging market issuers may present market, credit, currency, liquidity, legal, political and other risks different from, or greater than, the risks of investing in securities of developed foreign countries. In addition, the risks associated with investing in a narrowly defined geographic area are generally more pronounced with respect to investments in emerging market countries. The Fund may also be subject to this risk with respect to its investments in derivatives or other securities or financial instruments whose returns are related to the returns of emerging market securities.
The Trust has established counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. The Trust monitors the counterparty credit risk.
3. Fees and Other Transactions with Affiliates
Under the terms of an investment advisory contract, the Funds pay GI investment advisory fees calculated at the annualized rates below, based on the average daily net assets of the Funds:
| | | Management Fees | |
| Fund | | (as a % of Net Assets) | |
| U.S. Long Short Momentum Fund | | | 0.90 | % |
| Event Driven and Distressed Strategies Fund | | | 0.90 | % |
| Emerging Markets 2x Strategy Fund | | | 0.90 | % |
| Inverse Emerging Markets 2x Strategy Fund | | | 0.90 | % |
GI has contractually agreed to reduce fees and/or reimburse expenses for the Event Driven and Distressed Strategies Fund to the extent necessary to keep net operating expenses relative to the average daily net assets of A-Class, C-Class, H-Class, and Institutional Class shares (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividends on securities sold short, and extraordinary expenses (“Excluded Expenses”)) from exceeding 1.90%, 2.65%, 1.90%, and 1.65%, respectively, until July 31, 2014. The Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement includes Excluded Expenses and, thus, from time to time may be higher than 1.90%, 2.65%, 1.90%, and 1.65%, respectively. This Agreement may be terminated: (i) by the Board, for any reason at any time, or (ii) by the Advisor, upon ninety (90) days’ prior written notice to the Trust, effective as of the close of the business on the last day of the then-current one-year period.
For the period ended September 30, 2013, GI voluntarily agreed to reimburse a portion of the licensing fee charged to the Emerging Markets 2x Strategy Fund and Inverse Emerging Markets 2x Strategy Fund.
RFS provides transfer agent and administrative services to the Funds for fees calculated at an annualized rate of 0.25% of the average daily net assets of each Fund.
RFS also provides accounting services to the Funds for fees calculated at annualized rates below, based on the average daily net assets of each Fund.
| Fund Accounting Fees | | (as a % of net assets) | |
| On the first $250 million | | | 0.10 | % |
| On the next $250 million | | | 0.075 | % |
| On the next $250 million | | | 0.05 | % |
| Over $750 million | | | 0.03 | % |
| 40 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
RFS engages external service providers to perform other necessary services for the Trust, such as audit and accounting related services, legal services, custody, printing and mailing, etc., on a pass-through basis. Such expenses are allocated to various Funds within the complex based on relative net assets.
The Trust has adopted a Distribution Plan applicable to A-Class shares and H-Class shares for which GDL and other firms that provide distribution and/or shareholder services (“Service Providers”) may receive compensation. If a Service Provider provides distribution services, the Trust will pay distribution fees to GDL at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GDL, in turn, will pay the Service Provider out of its fees. GDL may, at its discretion, retain a portion of such payments to compensate itself for distribution services.
The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds’ C-Class shares average daily net assets. The annual 0.25% service fee compensates the shareholder’s financial advisor for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GDL for paying the shareholder’s financial advisor an ongoing sales commission. GDL advances the first year’s service and distribution fees to the financial advisor. GDL retains the service and distribution fees on accounts with no authorized dealer of record.
For the period ended September 30, 2013, GDL retained sales charges of $158,439 relating to sales of A-Class shares of the Trust.
Certain officers and trustees of the Trust are also officers of GI, RFS and GDL.
4. Fair Value Measurement
In accordance with U.S. GAAP, 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 is utilized 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.).
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 summarizes the inputs used to value the Funds’ net assets at September 30, 2013:
| | | Level 1 | | | Level 1 | | | Level 2 | | | Level 2 | | | Level 3 | | | | |
| | | Investments | | | Other Financial | | | Investments | | | Other Financial | | | Investments | | | | |
| | | In Securities | | | Instruments* | | | In Securities | | | Instruments* | | | In Securities | | | Total | |
| Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. Long Short Momentum Fund | | $ | 39,128,123 | | | $ | — | | | $ | 22,996,578 | | | $ | — | | | $ | — | | | $ | 62,124,701 | |
| Event Driven and Distressed Strategies Fund | | | — | | | | 124,691 | | | | 10,342,263 | | | | 73,253 | | | | — | | | | 10,540,207 | |
| Emerging Markets 2x Strategy Fund | | | 5,722,612 | | | | — | | | | 2,143,133 | | | | — | | | | — | | | | 7,865,745 | |
| Inverse Emerging Markets 2x Strategy Fund | | | — | | | | — | | | | 3,511,877 | | | | 82,690 | | | | — | | | | 3,594,567 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| U.S. Long Short Momentum Fund | | $ | 14,412,052 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 14,412,052 | |
| Event Driven and Distressed Strategies Fund | | | — | | | | — | | | | — | | | | 16,506 | | | | — | | | | 16,506 | |
| Emerging Markets 2x Strategy Fund | | | — | | | | 141 | | | | — | | | | 132,271 | | | | — | | | | 132,412 | |
* Other financial instruments may include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.
For the period ended September 30, 2013, there were no transfers between levels.
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 41 |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
5. Repurchase Agreements
The Funds transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury and U.S. Government Agencies. The collateral is in the possession of the Funds’ custodian and is evaluated to ensure that its market value exceeds, at a minimum, 102% of the original face amount of the repurchase agreements. Each Fund holds a pro rata share of the collateral based on the dollar amount of the repurchase agreement entered into by each Fund.
At September 30, 2013, the repurchase agreements in the joint account were as follows:
| Counterparty and Terms of Agreement | | Face Value | | | Repurchase Price | | | Collateral | | Par Value | | | Fair Value | |
| HSBC Group | | | | | | | | | | U.S. Treasury Strips | | | | | | | | |
| 0.02% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | $ | 727,000,000 | | | $ | 727,000,404 | | | 05/15/16 - 02/15/42 | | $ | 1,709,093,900 | | | $ | 741,540,069 | |
| Mizuho Financial Group, Inc. | | | | | | | | | | U.S. Treasury Bill | | | | | | | | |
| 0.03% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | | 82,013,150 | | | | 82,013,218 | | | 07/24/14 | | | 83,697,000 | | | | 83,653,478 | |
| Deutsche Bank | | | | | | | | | | U.S. Treasury Note | | | | | | | | |
| 0.02% | | | | | | | | | | 3.13% | | | | | | | | |
| Due 10/01/13 | | | 64,000,000 | | | | 64,000,036 | | | 05/15/21 | | | 60,395,900 | | | | 65,280,006 | |
| Credit Suisse Group | | | | | | | | | | U.S. Treasury Note | | | | | | | | |
| 0.01% | | | | | | | | | | 0.88% | | | | | | | | |
| Due 10/01/13 | | | 52,640,363 | | | | 52,640,378 | | | 01/31/17 | | | 53,420,000 | | | | 53,693,200 | |
In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. The GI, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.
6. Disclosures about Credit Derivatives
In accordance with its principal investment strategy, the Event Driven and Distressed Strategies Fund enters into credit default swaps as a seller of protection primarily to gain exposure similar to the high yield bond market. Credit default swaps are instruments which allow for the full or partial transfer of third party credit risk, with respect to a particular entity or entities, from one counterparty to the other. A seller of credit default swaps is selling credit protection or assuming credit risk with respect to the underlying entity or entities. If a credit event occurs, as defined under the terms of the swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. The Notional Principal reflects the maximum potential amount the Fund could be required to make as a seller of credit protection if a credit event occurs. As the seller of protection, the Fund receives periodic premium payments from the counterparty and may also receive or pay an upfront payment as an adjustment to the stated periodic premium. The quoted market prices and resulting market values for credit default swap agreements on securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative had the notional amount of the swap agreement been closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
The table on page 19 included in the Schedule of Investments summarizes the information with regard to sold protection on credit default swap contracts as of September 30, 2013.
7. Derivative Investment Holdings Categorized by Risk Exposure
U.S. GAAP requires 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.
| 42 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
The following Funds utilized derivatives for the following purposes:
| Fund | Index Exposure | Liquidity |
| U.S. Long Short Momentum Fund | — | x |
| Event Driven and Distressed Strategies Fund | x | x |
| Emerging Markets 2x Strategy Fund | x | x |
| Inverse Emerging Markets 2x Strategy Fund | x | x |
The following table represents the notional amount of derivative instruments outstanding, as an approximate percentage of the Funds’ net assets on a daily basis.
| | | Approximate percentage of Fund’s | |
| | | net assets on a daily basis | |
| Fund | | Long | | | Short | |
| Event Driven and Distressed Strategies Fund | | | 180 | % | | | — | |
| Emerging Markets 2x Strategy Fund | | | 125 | % | | | — | |
| Inverse Emerging Markets 2x Strategy Fund | | | — | | | | 200 | % |
The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of September 30, 2013:
| Derivative Investment Type | Asset Derivatives | Liability Derivatives | |
| Equity/Interest Rate contracts | Variation margin | Variation margin | |
| Equity/Credit contracts | Unrealized appreciation on swap agreements | Unrealized depreciation on swap agreements | |
The following table sets forth the fair value of the Funds’ derivative investments categorized by primary risk exposure at September 30, 2013:
| Asset Derivative Investments Value |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | Total Value at | |
| | | Equity | | | Equity | | | Interest Rate | | | Credit Default | | | September 30, | |
| Fund | | Contracts* | | | Contracts | | | Contracts* | | | Contracts | | | 2013 | |
| Event Driven and Distressed Strategies Fund | | $ | 44,256 | | | $ | 73,253 | | | $ | 80,435 | | | $ | — | | | $ | 197,944 | |
| Inverse Emerging Markets 2x Strategy Fund | | | — | | | | 82,690 | | | | — | | | | — | | | | 82,690 | |
| Liability Derivative Investments Value |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | Total Value at | |
| | | Equity | | | Equity | | | Interest Rate | | | Credit Default | | | September 30, | |
| Fund | | Contracts* | | | Contracts | | | Contracts* | | | Contracts | | | 2013 | |
| Event Driven and Distressed Strategies Fund | | $ | — | | | $ | — | | | $ | — | | | $ | 16,506 | | | $ | 16,506 | |
| Emerging Markets 2x Strategy Fund | | | 141 | | | | 132,271 | | | | — | | | | — | | | | 132,412 | |
* Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
The following is a summary of the location of derivative investments on the Funds’ Statements of Operations for the period ended September 30, 2013:
| Derivative Investment Type | Location of Gain (Loss) on Derivatives |
| Equity/Interest Rate Equity/Credit contracts | Net realized gain (loss) on futures contracts |
| | Net change in unrealized appreciation (depreciation) on futures contracts |
| | Net realized gain (loss) on swap agreements |
| | Net change in unrealized appreciation (depreciation) on swap agreements |
The following is a summary of the Funds’ realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized on the Statements of Operations categorized by primary risk exposure for the period ended September 30, 2013:
| Realized Gain (Loss) on Derivative Investments Recognized on the Statements of Operations |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | | |
| | | Equity | | | Equity | | | Interest Rate | | | Credit Default | | | | |
| Fund | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Total | |
| U.S. Long Short Momentum Fund | | $ | 111,616 | | | $ | — | | | $ | — | | | $ | — | | | $ | 111,616 | |
| Event Driven and Distressed Strategies Fund | | | 200,975 | | | | 49,029 | | | | (79,108 | ) | | | 250,654 | | | | 421,550 | |
| Emerging Markets 2x Strategy Fund | | | 15,136 | | | | 72,477 | | | | — | | | | — | | | | 87,613 | |
| Inverse Emerging Markets 2x Strategy Fund | | | (25,469 | ) | | | (485,640 | ) | | | — | | | | — | | | | (511,109 | ) |
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 43 |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
| Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statements of Operations |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | | |
| | | Equity | | | Equity | | | Interest Rate | | | Credit Default | | | | |
| Fund | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Total | |
| U.S. Long Short Momentum Fund | | $ | (7,093 | ) | | $ | — | | | $ | — | | | $ | — | | | $ | (7,093 | ) |
| Event Driven and Distressed Strategies Fund | | | 15,947 | | | | 72,633 | | | | 73,127 | | | | (27,939 | ) | | | 133,768 | |
| Emerging Markets 2x Strategy Fund | | | (1,122 | ) | | | (148,834 | ) | | | — | | | | — | | | | (149,956 | ) |
| Inverse Emerging Markets 2x Strategy Fund | | | — | | | | 107,450 | | | | — | | | | — | | | | 107,450 | |
8. Federal Income Tax Information
The Funds intend to comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and will distribute substantially all taxable net investment income and capital gains sufficient to relieve the Funds from all, or substantially all, federal income, excise and state income taxes. Therefore, no provision for federal or state income tax is required.
Tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Funds’ tax positions taken, or to be taken, on Federal income tax returns for all open tax years, and has concluded that no provision for income tax is required in the Funds’ financial statements. A fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they filed.
The RIC Modernization Act of 2010 was signed into law on December 22, 2010. It simplified some of the tax provisions applicable to regulated investment companies and the tax reporting to their shareholders, and improved the tax efficiency of certain fund structures. The changes were generally effective for taxable years beginning after the date of enactment.
One of the more prominent changes addresses capital loss carryforwards. Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. As a result of this ordering rule, pre-enactment capital loss carryforwards may potentially expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
At September 30, 2013, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value, were as follows:
| | | | | | Tax | | | Tax | | | Net | |
| | | Tax | | | Unrealized | | | Unrealized | | | Unrealized | |
| Fund Name | | Cost | | | Gain | | | Loss | | | Gain (Loss) | |
| U.S. Long Short Momentum Fund | | $ | 59,335,315 | | | $ | 3,304,718 | | | $ | (515,332 | ) | | $ | 2,789,386 | |
| Event Driven and Distressed Strategies Fund | | | 10,342,263 | | | | — | | | | — | | | | — | |
| Emerging Markets 2x Strategy Fund | | | 8,018,067 | | | | 17,280 | | | | (169,602 | ) | | | (152,322 | ) |
| Inverse Emerging Markets 2x Strategy Fund | | | 3,511,877 | | | | — | | | | — | | | | — | |
9. Securities Transactions
For the period ended September 30, 2013, the cost of purchases and proceeds from sales of investment securities, excluding government securities and short-term investments, were as follows:
| Fund | | Purchases | | | Sales | |
| U.S. Long Short Momentum Fund | | $ | 35,028,629 | | | $ | 39,163,180 | |
| Event Driven and Distressed Strategies Fund | | | 420,332 | | | | 1,368,289 | |
| Emerging Markets 2x Strategy Fund | | | 16,992,897 | | | | 12,903,403 | |
| Inverse Emerging Markets 2x Strategy Fund | | | — | | | | — | |
10. Portfolio Securities Loaned
The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statement of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within
| 44 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
this arrangement, the Funds act as the lender, Credit Suisse acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with Credit Suisse, cash collateral is invested in one or more joint repurchase agreements collateralized by obligations of the Government Agencies. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand.
At September 30, 2013, the Funds participated in securities lending as follows:
| Fund | | Value of Securities Loaned | | | Cash Collateral Received | |
| U.S. Long Short Momentum Fund | | $ | 185,650 | | | $ | 209,350 | |
The following represents a breakdown of the collateral for the joint repurchase agreements at September 30, 2013:
| Counterparty and Terms of Agreement | | Face Value | | | Repurchase Price | | | Collateral | | Par Value | | | Fair Value | |
| HSBC Securities, Inc. | | | | | | | | | | Fannie Mae | | | | | | | | |
| 0.06% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | $ | 33,647,201 | | | $ | 33,647,425 | | | 07/15/19 - 11/15/20 | | $ | 40,016,017 | | | $ | 34,319,314 | |
| RBS Securities, Inc. | | | | | | | | | | Freddie Mac | | | | | | | | |
| 0.07% | | | | | | | | | | 0.50% | | | | | | | | |
| Due 10/01/13 | | | 31,418,410 | | | | 31,418,654 | | | 01/15/16 | | | 32,093,965 | | | | 32,051,012 | |
11. Line of Credit
The Trust, along with other affiliated trusts, secured an uncommitted, $75,000,000 line of credit from U.S. Bank, N.A., which expires June 15, 2014. This line of credit is reserved for emergency or temporary purposes. Borrowings, if any, under this arrangement bear interest equal to the Prime Rate, minus 2%, which shall be paid monthly, averaging 1.25% for the period ended September 30, 2013. The Funds did not have any borrowings under this agreement at September 30, 2013.
The average daily balances borrowed for the period ended September 30, 2013 were as follows:
| Fund Name | | Average Daily Balance | |
| Emerging Markets 2x Strategy Fund | | $ | 20,585 | |
12. Legal Proceedings
Tribune Company
Rydex Series Funds has been named as a defendant and a putative member of the proposed defendant class of shareholders in the case entitled Kirschner v. FitzSimons, No. 12-2652 (S.D.N.Y.) (formerly Official Committee of Unsecured Creditors of Tribune Co. v. FitzSimons, Adv. Pro. No. 10-54010 (Bankr. D. Del.)) (the “FitzSimons action”), as a result of ownership by certain series of the Rydex Series Funds of shares in the Tribune Company (“Tribune”) in 2007, when Tribune effected a leveraged buyout transaction (“LBO”) by which Tribune converted to a privately-held company. In his complaint, the plaintiff has alleged that, in connection with the LBO, Tribune insiders and shareholders were overpaid for their Tribune stock using financing that the insiders knew would, and ultimately did, leave the Tribune Company insolvent. The plaintiff has asserted claims against certain insiders, major shareholders, professional advisers, and others involved in the LBO. The plaintiff is also attempting to obtain from former Tribune shareholders, including the Rydex Series Funds, the proceeds they received in connection with the LBO.
In June 2011, a group of Tribune creditors filed multiple actions against former Tribune shareholders involving state law constructive fraudulent conveyance claims arising out of the 2007 LBO (the “SCLFC actions”). Rydex Series Funds has been named as a defendant in one or more of these suits. In those actions, the creditors seek to recover from Tribune’s former shareholders the proceeds received in connection with the 2007 LBO.
The FitzSimons action and the SLCFC actions have been consolidated with the majority of the other Tribune LBO-related lawsuits in a multidistrict litigation proceeding captioned In re Tribune Company Fraudulent Conveyance Litig., No. 11-md-2696 (S.D.N.Y.) (the “MDL Proceeding”).
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 45 |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
On September 23, 2013, the District Court granted the defendants’ omnibus motion to dismiss the SLCFC actions, on the basis that the creditors lacked standing. On September 30, 2013, the creditors filed a notice of appeal of the September 23 order. On October 28, 2013, the defendants filed a joint notice of cross-appeal of that same order.
On November 20, 2013, the District Court ordered the parties in the FitzSimons action to meet and confer regarding a potential protocol for the briefing and argument of motions to dismiss to be filed in that action.
None of these lawsuits alleges any wrongdoing on the part of Rydex Series Funds. The following series of Rydex Series Funds held shares of Tribune and tendered these shares as part of Tribune’s LBO: Nova Fund, S&P 500® Pure Value Fund, Multi-Cap Core Equity Fund, S&P 500® Fund, Multi-Hedge Strategies Fund and Hedged Equity Fund (the “Funds”). The value of the proceeds received by the foregoing Funds was $28,220, $109,242, $9,860, $3,400, $1,181,160, and $10,880, respectively. At this stage of the proceedings, Rydex Series Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
Lyondell Chemical Company
In December 2011, Rydex Series Funds was named as a defendant in Weisfelner, as Trustee of the LB Creditor Trust, v. Fund 1 (In re Lyondell Chemical Co.), Adv. Pro. No. 10-4609 (Bankr. S.D.N.Y.).
Similar to the claims made in the Tribune matter, the Weisfelner complaint seeks to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008.
A motion to dismiss is currently pending before the Bankruptcy Court.
This lawsuit does not allege any wrongdoing on the part of Rydex Series Funds. The following series of Rydex Series Funds received cash proceeds from the cash out merger in the following amounts: Basic Materials Fund - $1,725,168; U.S. Long Short Momentum Fund - $2,193,600; Global 130/30 Strategy Fund - $37,920; Hedged Equity Fund - $1,440; and Multi-Hedge Strategies Fund - $1,116,480. At this stage of the proceedings, Rydex Series Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
13. Offsetting
In the normal course of business, the Funds may have entered in transactions subject to enforceable master netting arrangements or other similar arrangements. Generally, the right to offset in those agreements allows the funds to counteract the exposure to a specific counterparty with collateral received or delivered to that counterparty based on the terms of the arrangements. These arrangements provide for the right to liquidate upon the occurrence of an event of default, credit event upon merger or additional termination event.
The following tables present derivative financial instruments and secured financing transactions that are subject to enforceable netting arrangements and offset in the Statements of Assets and Liabilities in conformity with U.S. GAAP.
| | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | Net Amount of Assets | | | | | | | | | | |
| | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | Recognized Assets | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Received3 | | | Amount | |
| U.S. Long Short Momentum Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | $ | 22,996,578 | | | $ | — | | | $ | 22,996,578 | | | $ | — | | | $ | 22,996,578 | | | $ | — | |
| | | Securities lending | | | 185,650 | | | | — | | | | 185,650 | | | | — | | | | 185,650 | | | | — | |
| | | Total | | | 23,182,228 | | | | — | | | | 23,182,228 | | | | — | | | | 23,182,228 | | | | — | |
| Event Driven and Distressed Strategies Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 10,342,263 | | | | — | | | | 10,342,263 | | | | — | | | | 10,342,263 | | | | — | |
| | | Futures interest rate contracts | | | 80,435 | | | | — | | | | 80,435 | | | | — | | | | — | | | | 80,435 | |
| | | Swap equity contracts | | | 73,253 | | | | — | | | | 73,253 | | | | — | | | | — | | | | 73,253 | |
| | | Futures equity contracts | | | 44,256 | | | | — | | | | 44,256 | | | | — | | | | — | | | | 44,256 | |
| | | Total | | | 10,540,207 | | | | — | | | | 10,540,207 | | | | — | | | | 10,342,263 | | | | 197,944 | |
| Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 2,143,133 | | | | — | | | | 2,143,133 | | | | — | | | | 2,143,133 | | | | — | |
| | | Total | | | 2,143,133 | | | | — | | | | 2,143,133 | | | | — | | | | 2,143,133 | | | | — | |
| Inverse Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 3,511,877 | | | | — | | | | 3,511,877 | | | | — | | | | 3,511,877 | | | | — | |
| | | Swap equity contracts | | | 82,690 | | | | — | | | | 82,690 | | | | — | | | | — | | | | 82,690 | |
| | | Total | | | 3,594,567 | | | | — | | | | 3,594,567 | | | | — | | | | 3,511,877 | | | | 82,690 | |
| 46 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (concluded)
| | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | Net Amount of Liabilities | | | | | | | | | | |
| | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | Recognized Liabilities | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Pledged | | | Amount | |
| U.S. Long Short Momentum Fund | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | $ | 209,350 | | | $ | — | | | $ | 209,350 | | | $ | — | | | $ | 209,350 | | | $ | — | |
| | | Total | | | 209,350 | | | | — | | | | 209,350 | | | | — | | | | 209,350 | | | | — | |
| Event Driven and Distressed Strategies Fund | | | | | | | | | | | | | | | | | | | | | | | |
| | | Swap credit default contracts | | | 16,506 | | | | — | | | | 16,506 | | | | — | | | | — | | | | 16,506 | |
| | | Total | | | 16,506 | | | | — | | | | 16,506 | | | | — | | | | — | | | | 16,506 | |
| Emerging Markets 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | |
| | | Swap equity contracts | | | 132,271 | | | | — | | | | 132,271 | | | | — | | | | — | | | | 132,271 | |
| | | Futures equity contracts | | | 141 | | | | — | | | | 141 | | | | — | | | | — | | | | 141 | |
| | | Total | | | 132,412 | | | | — | | | | 132,412 | | | | — | | | | — | | | | 132,412 | |
1 Refer to notes 5 and 10 for additional information regarding repurchase agreements and securities lending arrangements, respectively.
2 Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
3 Excludes maintenance margin deposits held at the broker related to derivatives. These amounts are reflected as Segregated cash with broker on the Statements of Assets and Liabilities.
14. Subsequent Event
U.S. Long Short Momentum Fund Name and Principal Investment Strategies Change
At a meeting held on August 26, 2013, the Board of Trustees (the “Board”) of Rydex Series Funds (the “Trust”) approved a new name and revised principal investment strategies for the U.S. Long Short Momentum Fund. Effective October 30, 2013 the new name of the Fund will be “Long Short Equity Fund”.
The changes to the Fund’s name and principal investment strategies will not result in an increase in the Fund’s fees. Please read the Fund’s prospectus for more information on these changes.
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 47 |
| OTHER INFORMATION (Unaudited) |
Proxy Voting Information
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds’ portfolios is available, without charge and upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Schedules Information
The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1.800.820.0888.
Office Locations
The offices of Guggenheim Investments can be found in the following locations:
40 East 52nd Street
16th Floor
New York, NY 10022
(Headquarters)
Four Irvington Centre
805 King Farm Boulevard
Suite 600
Rockville, MD 20850
9401 Indian Creek Parkway
40 Corporate Woods
Suite 850
Overland Park, KS 66210
Board Considerations in Approving the Investment Advisory Agreements
At in-person meetings of the Rydex Series Funds’ (the “Trust”) Board of Trustees (the “Board”) held on May 16 and June 5, 2013 (collectively, the “Meetings”), called for the purpose of, among other things, consideration of, and voting on, the approval and continuation of the investment advisory agreement applicable to the series of the Trust (each a “Fund” and collectively, the “Funds”), the Board, including the Trustees who are not “interested persons,” as defined by the Investment Company Act of 1940, of the Trust (“Independent Trustees”), unanimously approved the continuation of the investment advisory agreement (the “Investment Advisory Agreement”) between the Trust and Security Investors, LLC (referred to herein as the “Adviser”) with respect to each of the Funds for an additional one-year period, based on the Board’s review of qualitative and quantitative information provided by the Adviser.
In reaching the conclusion to approve the continuation of the Investment Advisory Agreement, the Independent Trustees requested and obtained from the Adviser such information as the Independent Trustees deemed reasonably necessary to evaluate the Investment Advisory Agreement. The Independent Trustees carefully evaluated this information and were advised by independent legal counsel with respect to their deliberations. In addition, the Board also received a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements, and the Independent Trustees met in executive session outside the presence of Fund management, and participated in question and answer sessions with representatives of the Adviser.
In considering the continuation of the Investment Advisory Agreement, the Board determined that the agreement would enable shareholders of the Funds to continue to obtain high quality services at a cost that was appropriate, reasonable, and in the best interests of their sharehold-
| 48 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| OTHER INFORMATION (Unaudited) (continued) |
ers. The Board, including the Independent Trustees, unanimously approved the continuation of the existing Investment Advisory Agreement. In reaching their decision, the Trustees carefully considered information that they had received throughout the year as part of their regular oversight of the Funds, including, in particular, information from the Adviser that the Board had received relating to the Investment Advisory Agreement at the Meetings. The Trustees noted that, at the Meetings, they had obtained and reviewed a wide variety of information, including certain comparative information regarding performance of the Funds relative to performance of other comparable funds.
As a part of their consideration of the approval of the Investment Advisory Agreement at the Meetings, the Trustees, including the Independent Trustees, had evaluated a number of considerations, including among others: (a) the nature and quality of the Adviser’s investment advisory and other services; (b) the Adviser’s investment management personnel; (c) the Adviser’s operations and financial condition; (d) the Adviser’s brokerage practices (including any soft dollar arrangements) and investment strategies; (e) the level of the fees that the Adviser charges compared with the fees charged to comparable funds or accounts, giving special attention to the absence of breakpoints in these fees and the rationale provide by the Adviser as to why the addition of breakpoints was not currently appropriate; (f) each Fund’s overall fees and operating expenses compared with similar funds; (g) the level of the Adviser’s profitability from its Fund-related operations; (h) the Adviser’s compliance systems; (i) the Adviser’s policies and compliance procedures applicable to personal securities transactions; (j) the Adviser’s reputation, expertise and resources in the financial markets; and (k) Fund performance compared with similar funds. In its deliberations, the Board did not identify any single piece of information that was all-important or controlling. Based on the Board’s deliberations at the Meetings the Board, including all of the Independent Trustees, unanimously: (a) concluded that the terms of the Investment Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees were reasonable in light of the services that it provides to the Funds; and (c) agreed to approve and continue the Investment Advisory Agreement based upon the following considerations, among others:
| • | Nature, Extent and Quality of Services Provided by the Adviser. At the Meetings, the Board reviewed the scope of services to be provided by the Adviser under the Investment Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by the Adviser for the past year and the scope of services required to be provided during the upcoming year. The Trustees also considered the Adviser’s representations to the Board that the Adviser would continue to provide investment and related services that were of materially the same quality and quantity as services provided to the Funds in the past, and that these services are appropriate in scope and extent in light of the Funds’ operations, the competitive landscape of the investment company business and investor needs. |
| • | Fund Expenses and Performance of the Funds and the Adviser. At the Meetings, the Board reviewed statistical information provided by the Adviser regarding the expense ratio components and performance of each Fund. The Adviser engaged FUSE Research Network LLC (“FUSE”), an independent, third party research provider, to prepare advisory contract renewal reports to help the Board fulfill its advisory contract renewal responsibilities. The objective of the reports is to present the subject Funds’ relative position regarding fees, expenses and total return performance, with peer group and universe comparisons. This statistical information related to the expense ratio components included actual advisory fees, waivers/reimbursements, and gross and net total expenses for each Fund in comparison to other funds determined by FUSE to comprise each Fund’s applicable peer group. The Board also considered the Adviser’s representation that it found the peer groups compiled by FUSE to be appropriate. The statistical information related to the performance of each Fund included three month and one, three, and five year performance for the Fund compared to its peers. |
| • | Costs of Services Provided to the Funds and Profits Realized by the Adviser and its Affiliates. At the Meetings, the Board had reviewed information about the profitability of the Funds to the Adviser based on the advisory fees payable under the current Investment Advisory Agreement for the last calendar year. At the Meetings, the Board also analyzed the Funds’ expenses, including the investment advisory fees paid to the Adviser, and reviewed reports comparing the expense ratios of the Funds to those of other comparable funds. The Board also reviewed information regarding the direct revenue received by the Adviser and ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser and/or its affiliates. The Board also discussed the Adviser’s profit margin as reflected in the Adviser’s profitability analysis. |
| • | Economies of Scale. In connection with its review of the Funds’ profitability analysis at the Meetings, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ asset levels. The Trustees noted that the fees would not change due to breakpoints under the current Investment Advisory Agreement, and that no additional economies of scale would be directly realized as a result of increases in the asset levels of the Funds. In light of the relatively small size of many |
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 49 |
| OTHER INFORMATION (Unaudited) (concluded) |
of the Funds and the fact that the size of individual Funds in the complex increases and decreases significantly from time to time due to unlimited trading that is permitted among most of the Funds in the complex, the Board concluded that economies of scale were not likely to be directly realized as a result of increases in the asset levels of the individual Funds, and accordingly, fee breakpoints were not currently appropriate for the Funds.
| • | Other Benefits to the Adviser and/or its Affiliates. In addition to evaluating the services provided by the Adviser, the Board had considered the nature, extent, quality and cost of the administrative, distribution, and shareholder services performed by the Adviser’s affiliates under separate agreements at the Meetings. The Board noted that the Adviser reports portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or the Adviser at each quarterly Board meeting. |
On the basis of the information provided to it and its evaluation of that information, the Board, including the Independent Trustees, concluded that the terms of the Investment Advisory Agreement for the Funds were reasonable, and that approval of the Investment Advisory Agreement was in the best interests of the Funds.
| 50 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) |
A Board of Trustees oversees the Trust, as well as other trusts of GI, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 800.820.0888.
All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
| TRUSTEE AND OFFICER | | | | |
| | | Length of Service as Trustee | | Number of Funds |
| Name and Year of Birth | | (Year Began) | | Overseen |
| Donald C. Cacciapaglia* | | Rydex Series Funds – 2012 | | 211 |
| (1951) | | Rydex Variable Trust – 2012 | | |
| | | Rydex Dynamic Funds – 2012 | | |
| | | Rydex ETF Trust – 2012 | | |
Principal Occupations During Past Five Years: Current: Security Investors, LLC: President and CEO from April 2012 to present; Guggenheim Investments:
President and Chief Administrative Officer from February 2010 to present; Previous: Channel Capital Group, Inc.: Chairman and CEO from April 2002 to February 2010
Positions held within the Trust: Trustee from 2012 to present; President from 2012 to present
| INDEPENDENT TRUSTEES | | | | |
| | | Length of Service as Trustee | | Number of Funds |
| Name and Year of Birth | | (Year Began) | | Overseen |
| Corey A. Colehour | | Rydex Series Funds – 1993 | | 131 |
| (1945) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired; Previous: President and Senior Vice President of Schield Management Company (registered investment adviser) from 2003 to 2006
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
| | | | | |
| J. Kenneth Dalton | | Rydex Series Funds – 1995 | | 131 |
| (1941) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1995 to present; Member and Chairman of the Audit Committee from 1997 to present; Member of the Governance and Nominating Committees from 1995 to present; and Member of the Risk Oversight Committee from 2010 to present
| | | | | |
| John O. Demaret | | Rydex Series Funds – 1997 | | 131 |
| (1940) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1997 to present; Chairman of the Board from 2006 to present; Member of the Audit Committee from 1997 to present; and Member of the Risk Oversight Committee from 2010 to present
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 51 |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (continued) |
| INDEPENDENT TRUSTEES - concluded | | |
| | | Length of Service as Trustee | | Number of Funds |
| Name and Year of Birth | | (Year Began) | | Overseen |
| Werner E. Keller | | Rydex Series Funds – 2005 | | 131 |
| (1940) | | Rydex Variable Trust – 2005 | | |
| | | Rydex Dynamic Funds – 2005 | | |
| | | Rydex ETF Trust – 2005 | | |
Principal Occupations During Past Five Years: Current: Founder and President of Keller Partners, LLC (investment research firm) from 2005 to present;
Previous: Retired from 2001 to 2005
Positions held within the Trust: Vice Chairman of the Board of Trustees from 2010 to present; Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present; and Chairman and Member of the Risk Oversight Committee from 2010 to present
| | | | | |
| Thomas F. Lydon, Jr. | | Rydex Series Funds – 2005 | | 131 |
| (1960) | | Rydex Variable Trust – 2005 | | |
| | | Rydex Dynamic Funds – 2005 | | |
| | | Rydex ETF Trust – 2005 | | |
Principal Occupations During Past Five Years: Current: President of Global Trends Investments (registered investment adviser) from 1996 to present Positions held within the Trust: Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present
| | | | | |
| Patrick T. McCarville | | Rydex Series Funds – 1997 | | 131 |
| (1942) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired; Previous: Chief Executive Officer of Par Industries, Inc., d/b/a Par Leasing from 1977 to 2010
Positions held within the Trust: Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; and Chairman of the Governance and Nominating Committees from 1997 to present
| | | | | |
| Roger Somers | | Rydex Series Funds – 1993 | | 131 |
| (1944) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Founder and Chief Executive Officer of Arrow Limousine from 1965 to present
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
| 52 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (concluded)
EXECUTIVE OFFICERS
| Name, Position and | | | Principal Occupations |
| Year of Birth | | | | During Past Five Years | |
| | | |
Michael P. Byrum* Vice President (1970) | | Current: President, Security Benefit Asset Management Holdings, LLC; Senior Vice President, Security Investors, LLC; President & Chief Investment Officer, Rydex Holdings, LLC; Director & Chairman of the Board, Advisor Research Center, Inc.; and Manager, Rydex Specialized Products, LLC |
| | | |
| | | Previous: Guggenheim Distributors, LLC (f/k/a Rydex Distributors, LLC), Vice President (2009); Rydex Fund Services, LLC, Director (2009–2010), Secretary (2002–2010); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.), Director (2008–2010), Chief Investment Officer (2006–2010), President (2004–2010), Secretary (2002–2010); Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Director (2008–2010), Chief Investment Officer (2006–2010), President (2004–2010), Secretary (2002–2010); Advisor Research Center, Inc., Secretary (2006–2009), and Executive Vice President (2006) |
| | | |
Nikolaos Bonos* Vice President and Treasurer (1963) | | 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; Treasurer, SBL Fund; Security Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; and Vice President, Security Benefit Asset Management Holdings, LLC |
| | | |
| | | Previous: Security Global Investors, LLC, Senior Vice President (2010–2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) Senior Vice President (2006–2011); Rydex Fund Services, LLC (f/k/a Rydex Fund Services, Inc.), Director (2009); and Rydex Specialized Products, LLC, Chief Financial Officer (2005–2009) |
| | | |
Elisabeth Miller* Chief Compliance Officer (1968) | | Current: Chief Compliance Officer, Rydex Series Funds, Rydex Dynamic Funds, Rydex Variable Trust, Rydex ETF Trust, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund, Security Mid Cap Growth Fund, SBL Fund, Security Investors, LLC, and Guggenheim Distributors, LLC Previous: Senior Manager, Security Investors, LLC and Guggenheim Distributors, LLC (2004–2009) |
| | | |
Amy J. Lee* Vice President and Secretary (1961) | | Current: Managing Director, Guggenheim Investments; Senior Vice President & Secretary, Security Investors, LLC; Secretary & Vice President, Rydex ETF Trust, Rydex Dynamic Funds, Rydex variable Trust, SBL Fund, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund and Security Mid Cap Growth Fund; Vice President & Secretary, Rydex Holdings, LLC; Secretary, Advisor Research Center, Inc., Guggenheim Specialized Products, LLC, Guggenheim Distributors, LLC and Rydex Fund Services, LLC |
| | | |
| | | Previous: Vice President, Associate General Counsel & Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (1987–2012); Security Global Investors, LLC, Senior Vice President & Secretary (2007–2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Senior Vice President & Secretary (2010–2011) |
| | | |
Joseph M. Arruda* Assistant Treasurer (1966) | | Current: Assistant Treasurer, SBL Fund, Security Equity Fund, Security Income Fund, Security large Cap Value Fund & Security Mid Cap Growth Fund; Vice President, Security Investors, LLC; and Chief Financial Officer & Manager, Rydex Specialized Products, LLC |
| | | |
| | | Previous: Security Global Investors, LLC, Vice President (2010–2011); and Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Vice President (2004–2011) |
| * | Officers of the Funds are deemed to be “interested persons” of the Trust, within the meaning of Section 2(a)(19) of the 1940 Act, inasmuch as this person is affiliated with Guggenheim Investments. |
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 53 |
| GUGGENHEIM INVESTMENTS PRIVACY POLICIES |
Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Distributors, LLC, Security Investors, LLC, Security Distributors, Inc. and Rydex Advisory Services (Collectively “Guggenheim Investments”).
Our Commitment to You
When you become a Guggenheim Investments 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 Guggenheim Investments 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 Guggenheim Investments account application or when you request a transaction that involves Rydex and Guggenheim Investments funds or one of the Guggenheim Investments 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 Guggenheim Investments. For example, if you ask to transfer assets from another financial institution to Guggenheim Investments, we will need to provide certain information about you to that company to complete the transaction. To alert you to other Guggenheim Investments investment products and services, we may share your information within the Guggenheim Investments family of affiliated companies. This would include, for example, sharing your information within Guggenheim Investments so we can make you aware of new Rydex and Guggenheim Investments funds or the services offered through another Guggenheim Investments 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, guggenheiminvestments.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 Guggenheim Investments 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 Guggenheim Investments 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.
| 54 | THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT |
| GUGGENHEIM INVESTMENTS PRIVACY POLICIES (concluded) |
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 guggenheiminvestments.com. Should you have any questions regarding our privacy policy, contact us at 800.820.0888 or 301.296.5100.
| THE GUGGENHEIM FUNDS SEMI - ANNUAL REPORT | 55 |
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SECTOR FUNDS
BANKING FUND
BASIC MATERIALS FUND
BIOTECHNOLOGY FUND
CONSUMER PRODUCTS FUND
ELECTRONICS FUND
ENERGY FUND
ENERGY SERVICES FUND
FINANCIAL SERVICES FUND
HEALTH CARE FUND
INTERNET FUND
LEISURE FUND
PRECIOUS METALS FUND
REAL ESTATE FUND
RETAILING FUND
TECHNOLOGY FUND
TELECOMMUNICATIONS FUND
TRANSPORTATION FUND
UTILITIES FUND
RSECF-SEMI-0913x0314
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With Guggenheim Investments eDelivery you can:
| | · | View online confirmations and statements at your convenience. |
| | · | Receive email notifications when your most recent confirmations, statements and other account documents are available for review. |
| | · | Access prospectuses, annual reports and semiannual reports online. |
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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 Guggenheim Distributors, LLC.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 1 |
Dear Shareholder:
Security Investors, LLC (the “Investment Adviser”) is pleased to present the semi-annual shareholder report for one or more of our Funds (the “Funds”) for the period ended September 30, 2013.
The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC, a global, diversified financial services firm.
Guggenheim Distributors, LLC is the distributor of the Funds. Guggenheim Distributors, LLC is affiliated with Guggenheim Partners, LLC and Security Investors, LLC.
We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Fund Profile for each Fund.
We are committed to providing innovative investment solutions and appreciate the trust you place in us.
Sincerely,
Donald C. Cacciapaglia
President
October 31, 2013
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 guggenheiminvestments.com or call 800.820.0888.
The Funds may not be suitable for all investors. Investing involves risks, including the entire loss of principal amount invested. Certain Funds may be affected by risks that include those associated with sector concentration, international investing, investing in small and/or medium size companies, and/or the Funds’ possible use of investment techniques and strategies such as leverage, derivatives and short sales of securities. Please see each Fund’s prospectus for more information.
| 2 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| ECONOMIC AND MARKET OVERVIEW | September 30, 2013 |
For the first part of the six-month period ended September 30, 2013, the U.S. economy and investment markets benefited from continued monetary accommodation from the world’s central banks and an improving picture for housing and employment.
Volatility rose in the final weeks of the period, however, as markets braced for a government shutdown over a budget impasse and suspected that the U.S. economy is not expanding quickly enough. In addition, confusion clouded the expected start of the end of quantitative easing (QE), speculation over which began rattling investors as far back as May. In refraining from tapering in September, the Fed made it clear that it does not currently see enough economic growth potential to remove extreme monetary accommodation.
The pace of job creation in this economic expansion continues to be subpar. Although the unemployment rate mid-year fell to a four and a half year low, its decline was more a function of a declining labor force participation rate than exuberant hiring. Additionally, solid job gains in the private sector over the period were overshadowed by sluggish growth in aggregate earnings, owing to a rising share of part-time employment which puts downward pressure on consumption growth.
Economic data continue to confirm that housing has been the key pillar supporting the ongoing U.S. expansion, generating 50% of growth in the first half of 2013. Concerns about tapering mid-year drove interest rates higher, with mortgage rates rising by over 100 basis points from May through August. This is having a severe impact on housing, even though it may not show up in the economic data until later in the year.
Markets also have had to deal with substantial uncertainty overseas. Fears of a Chinese credit crunch stoked investor anxiety, and measures implemented to address structural problems in China’s economy appear to be temporary rather than long-term solutions. The devaluation of the Japanese yen is putting pressure on all the economies in the region, making the global economy vulnerable to an unexpected economic shock. Europe, meanwhile, is bouncing along a bottom, and the growth outlook, while improving, remains weak.
From a policy standpoint, the Fed appears to be concerned about the impact higher interest rates are having on the economy and the housing sector in particular, and it seems to be guiding long-term rates closer to the rate of inflation to stimulate growth. The Federal Open Market Committee has been very clear that the Fed will not allow interest rates to rise significantly until output and the crucial real estate market have reaccelerated.
For the six-month period ended September 30, 2013, the return of the Standard & Poor’s 500® Index* (“S&P 500”) was 8.31%. The Barclays U.S. Aggregate Bond Index* returned -1.77% for the period, while the Bank of America Merrill Lynch 3 Month U.S. Treasury Bill Index* returned 0.04%. The MSCI World Index* returned 8.88%, while the MSCI Emerging Markets Index* returned -2.78%.
The opinions and forecasts expressed may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or strategy.
*Index Definitions:
The following indices are referenced throughout this report. Indices are unmanaged and not available for direct investment. Index performance does not reflect transaction costs, fees, or expenses.
Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS.
MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets.
MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
S&P 500® Index is a capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries and is considered a representation of the U.S. stock market.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 3 |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) |
All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. Shareholders of a Fund incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; and exchange fees; and (ii) ongoing costs, including management fees, administrative services, and shareholder reports, among others. These ongoing costs, or operating expenses, are deducted from a fund’s gross income and reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets, which is known as the expense ratio. The following examples are intended to help investors understand the ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2013 and ending September 30, 2013.
The following tables illustrate a Fund’s costs in two ways:
Table 1. Based on actual Fund return. This section helps investors estimate the actual expenses paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. Investors may use the information here, together with the amount invested, to estimate the expenses paid over the period. Simply divide the Fund’s 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 provided under the heading “Expenses Paid During Period.”
Table 2. Based on hypothetical 5% return. This section is intended to help investors compare a Fund’s cost with those of other mutual funds. The table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid during the period. The example is useful in making comparisons because the U.S. Securities and Exchange Commission (the “SEC”) requires all mutual funds to calculate expenses based on the 5% return. Investors can assess a Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
The calculations illustrated above assume no shares were bought or sold during the period. Actual costs may have been higher or lower, depending on the amount of investment and the timing of any purchases or redemptions.
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, and contingent deferred sales charges (“CDSC”) on redemptions, if any. Therefore, the second table 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.
More information about a Fund’s expenses, including annual expense ratios for the past five years, can be found in the Financial Highlights section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate Fund prospectus.
| 4 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Table 1. Based on actual Fund return3 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Banking Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 9.30 | % | | | $1,000.00 | | | | $1,093.00 | | | | $7.19 | |
| Advisor Class | | | 1.87 | % | | | 9.03 | % | | | 1,000.00 | | | | 1,090.30 | | | | 9.80 | |
| A-Class | | | 1.62 | % | | | 9.15 | % | | | 1,000.00 | | | | 1,091.50 | | | | 8.49 | |
| C-Class | | | 2.37 | % | | | 8.75 | % | | | 1,000.00 | | | | 1,087.50 | | | | 12.40 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic Materials Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.39 | % | | | (3.24 | %) | | | 1,000.00 | | | | 967.60 | | | | 6.86 | |
| Advisor Class | | | 1.90 | % | | | (3.48 | %) | | | 1,000.00 | | | | 965.20 | | | | 9.36 | |
| A-Class | | | 1.65 | % | | | (3.36 | %) | | | 1,000.00 | | | | 966.40 | | | | 8.13 | |
| C-Class | | | 2.39 | % | | | (3.72 | %) | | | 1,000.00 | | | | 962.80 | | | | 11.76 | |
| | | | | | | | | | | | | | | | | | | | | |
| Biotechnology Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.36 | % | | | 26.94 | % | | | 1,000.00 | | | | 1,269.40 | | | | 7.74 | |
| Advisor Class | | | 1.86 | % | | | 26.62 | % | | | 1,000.00 | | | | 1,266.20 | | | | 10.57 | |
| A-Class | | | 1.61 | % | | | 26.79 | % | | | 1,000.00 | | | | 1,267.90 | | | | 9.15 | |
| C-Class | | | 2.36 | % | | | 26.33 | % | | | 1,000.00 | | | | 1,263.30 | | | | 13.39 | |
| | | | | | | | | | | | | | | | | | | | | |
| Consumer Products Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 4.02 | % | | | 1,000.00 | | | | 1,040.20 | | | | 7.01 | |
| Advisor Class | | | 1.87 | % | | | 3.72 | % | | | 1,000.00 | | | | 1,037.20 | | | | 9.55 | |
| A-Class | | | 1.62 | % | | | 3.87 | % | | | 1,000.00 | | | | 1,038.70 | | | | 8.28 | |
| C-Class | | | 2.37 | % | | | 3.49 | % | | | 1,000.00 | | | | 1,034.90 | | | | 12.09 | |
| | | | | | | | | | | | | | | | | | | | | |
| Electronics Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 11.92 | % | | | 1,000.00 | | | | 1,119.20 | | | | 7.28 | |
| Advisor Class | | | 1.87 | % | | | 11.63 | % | | | 1,000.00 | | | | 1,116.30 | | | | 9.92 | |
| A-Class | | | 1.62 | % | | | 11.79 | % | | | 1,000.00 | | | | 1,117.90 | | | | 8.60 | |
| C-Class | | | 2.37 | % | | | 11.36 | % | | | 1,000.00 | | | | 1,113.60 | | | | 12.56 | |
| | | | | | | | | | | | | | | | | | | | | |
| Energy Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.24 | % | | | 1,000.00 | | | | 1,052.40 | | | | 7.05 | |
| Advisor Class | | | 1.87 | % | | | 4.99 | % | | | 1,000.00 | | | | 1,049.90 | | | | 9.61 | |
| A-Class | | | 1.62 | % | | | 5.09 | % | | | 1,000.00 | | | | 1,050.90 | | | | 8.33 | |
| C-Class | | | 2.37 | % | | | 4.71 | % | | | 1,000.00 | | | | 1,047.10 | | | | 12.16 | |
| | | | | | | | | | | | | | | | | | | | | |
| Energy Services Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 7.39 | % | | | 1,000.00 | | | | 1,073.90 | | | | 7.12 | |
| Advisor Class | | | 1.87 | % | | | 7.10 | % | | | 1,000.00 | | | | 1,071.00 | | | | 9.71 | |
| A-Class | | | 1.62 | % | | | 7.25 | % | | | 1,000.00 | | | | 1,072.50 | | | | 8.42 | |
| C-Class | | | 2.37 | % | | | 6.84 | % | | | 1,000.00 | | | | 1,068.40 | | | | 12.29 | |
| | | | | | | | | | | | | | | | | | | | | |
| Financial Services Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.33 | % | | | 1,000.00 | | | | 1,053.30 | | | | 7.05 | |
| Advisor Class | | | 1.87 | % | | | 5.05 | % | | | 1,000.00 | | | | 1,050.50 | | | | 9.61 | |
| A-Class | | | 1.62 | % | | | 5.19 | % | | | 1,000.00 | | | | 1,051.90 | | | | 8.33 | |
| C-Class | | | 2.37 | % | | | 4.81 | % | | | 1,000.00 | | | | 1,048.10 | | | | 12.17 | |
| | | | | | | | | | | | | | | | | | | | | |
| Health Care Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 14.09 | % | | | 1,000.00 | | | | 1,140.90 | | | | 7.35 | |
| Advisor Class | | | 1.87 | % | | | 13.75 | % | | | 1,000.00 | | | | 1,137.50 | | | | 10.02 | |
| A-Class | | | 1.62 | % | | | 13.95 | % | | | 1,000.00 | | | | 1,139.50 | | | | 8.69 | |
| C-Class | | | 2.37 | % | | | 13.48 | % | | | 1,000.00 | | | | 1,134.80 | | | | 12.68 | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 5 |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Internet Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 25.66 | % | | | $1,000.00 | | | | $1,256.60 | | | | $7.75 | |
| Advisor Class | | | 1.87 | % | | | 25.34 | % | | | 1,000.00 | | | | 1,253.40 | | | | 10.56 | |
| A-Class | | | 1.62 | % | | | 25.49 | % | | | 1,000.00 | | | | 1,254.90 | | | | 9.16 | |
| C-Class | | | 2.37 | % | | | 25.01 | % | | | 1,000.00 | | | | 1,250.10 | | | | 13.37 | |
| | | | | | | | | | | | | | | | | | | | | |
| Leisure Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 13.75 | % | | | 1,000.00 | | | | 1,137.50 | | | | 7.34 | |
| Advisor Class | | | 1.87 | % | | | 13.48 | % | | | 1,000.00 | | | | 1,134.80 | | | | 10.01 | |
| A-Class | | | 1.62 | % | | | 13.62 | % | | | 1,000.00 | | | | 1,136.20 | | | | 8.68 | |
| C-Class | | | 2.37 | % | | | 13.20 | % | | | 1,000.00 | | | | 1,132.00 | | | | 12.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| Precious Metals Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.27 | % | | | (29.68 | %) | | | 1,000.00 | | | | 703.20 | | | | 5.42 | |
| Advisor Class | | | 1.77 | % | | | (29.86 | %) | | | 1,000.00 | | | | 701.40 | | | | 7.55 | |
| A-Class | | | 1.52 | % | | | (29.75 | %) | | | 1,000.00 | | | | 702.50 | | | | 6.49 | |
| C-Class | | | 2.27 | % | | | (30.03 | %) | | | 1,000.00 | | | | 699.70 | | | | 9.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| Real Estate Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.70 | % | | | (5.63 | %) | | | 1,000.00 | | | | 943.70 | | | | 8.28 | |
| C-Class | | | 2.40 | % | | | (5.99 | %) | | | 1,000.00 | | | | 940.10 | | | | 11.67 | |
| H-Class | | | 1.67 | % | | | (5.62 | %) | | | 1,000.00 | | | | 943.80 | | | | 8.14 | |
| | | | | | | | | | | | | | | | | | | | | |
| Retailing Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 13.91 | % | | | 1,000.00 | | | | 1,139.10 | | | | 7.35 | |
| Advisor Class | | | 1.87 | % | | | 13.55 | % | | | 1,000.00 | | | | 1,135.50 | | | | 10.01 | |
| A-Class | | | 1.62 | % | | | 13.68 | % | | | 1,000.00 | | | | 1,136.80 | | | | 8.68 | |
| C-Class | | | 2.37 | % | | | 13.22 | % | | | 1,000.00 | | | | 1,132.20 | | | | 12.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| Technology Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 13.35 | % | | | 1,000.00 | | | | 1,133.50 | | | | 7.33 | |
| Advisor Class | | | 1.87 | % | | | 13.06 | % | | | 1,000.00 | | | | 1,130.60 | | | | 9.99 | |
| A-Class | | | 1.62 | % | | | 13.07 | % | | | 1,000.00 | | | | 1,130.70 | | | | 8.65 | |
| C-Class | | | 2.37 | % | | | 12.74 | % | | | 1,000.00 | | | | 1,127.40 | | | | 12.64 | |
| | | | | | | | | | | | | | | | | | | | | |
| Telecommunications Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.39 | % | | | 4.19 | % | | | 1,000.00 | | | | 1,041.90 | | | | 7.12 | |
| Advisor Class | | | 1.88 | % | | | 3.90 | % | | | 1,000.00 | | | | 1,039.00 | | | | 9.61 | |
| A-Class | | | 1.63 | % | | | 4.14 | % | | | 1,000.00 | | | | 1,041.40 | | | | 8.34 | |
| C-Class | | | 2.38 | % | | | 4.00 | % | | | 1,000.00 | | | | 1,040.00 | | | | 12.17 | |
| | | | | | | | | | | | | | | | | | | | | |
| Transportation Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 19.71 | % | | | 1,000.00 | | | | 1,197.10 | | | | 7.55 | |
| Advisor Class | | | 1.87 | % | | | 19.41 | % | | | 1,000.00 | | | | 1,194.10 | | | | 10.29 | |
| A-Class | | | 1.62 | % | | | 19.56 | % | | | 1,000.00 | | | | 1,195.60 | | | | 8.92 | |
| C-Class | | | 2.37 | % | | | 19.11 | % | | | 1,000.00 | | | | 1,191.10 | | | | 13.02 | |
| | | | | | | | | �� | | | | | | | | | | | | |
| Utilities Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.41 | % | | | (2.35 | %) | | | 1,000.00 | | | | 976.50 | | | | 6.99 | |
| Advisor Class | | | 1.88 | % | | | (2.62 | %) | | | 1,000.00 | | | | 973.80 | | | | 9.30 | |
| A-Class | | | 1.64 | % | | | (2.49 | %) | | | 1,000.00 | | | | 975.10 | | | | 8.12 | |
| C-Class | | | 2.39 | % | | | (2.86 | %) | | | 1,000.00 | | | | 971.40 | | | | 11.81 | |
| 6 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Table 2. Based on hypothetical 5% return (before expenses) |
| | | | | | | | | | | | | | | | | | | | | |
| Banking Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | $1,000.00 | | | | $1,018.20 | | | | $6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic Materials Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.39 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.10 | | | | 7.03 | |
| Advisor Class | | | 1.90 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.54 | | | | 9.60 | |
| A-Class | | | 1.65 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.80 | | | | 8.34 | |
| C-Class | | | 2.39 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.09 | | | | 12.06 | |
| | | | | | | | | | | | | | | | | | | | | |
| Biotechnology Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.36 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.25 | | | | 6.88 | |
| Advisor Class | | | 1.86 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.74 | | | | 9.40 | |
| A-Class | | | 1.61 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.00 | | | | 8.14 | |
| C-Class | | | 2.36 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.24 | | | | 11.91 | |
| | | | | | | | | | | | | | | | | | | | | |
| Consumer Products Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Electronics Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Energy Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Energy Services Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Financial Services Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Health Care Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 7 |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (concluded) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Internet Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | $1,000.00 | | | | $1,018.20 | | | | $6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Leisure Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Precious Metals Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.70 | | | | 6.43 | |
| Advisor Class | | | 1.77 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.19 | | | | 8.95 | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| | | | | | | | | | | | | | | | | | | | | |
| Real Estate Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.70 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.55 | | | | 8.59 | |
| C-Class | | | 2.40 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.04 | | | | 12.11 | |
| H-Class | | | 1.67 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.70 | | | | 8.44 | |
| | | | | | | | | | | | | | | | | | | | | |
| Retailing Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Technology Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Telecommunications Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.39 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.10 | | | | 7.03 | |
| Advisor Class | | | 1.88 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.64 | | | | 9.50 | |
| A-Class | | | 1.63 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.90 | | | | 8.24 | |
| C-Class | | | 2.38 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.14 | | | | 12.01 | |
| | | | | | | | | | | | | | | | | | | | | |
| Transportation Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.20 | | | | 6.93 | |
| Advisor Class | | | 1.87 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.69 | | | | 9.45 | |
| A-Class | | | 1.62 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.95 | | | | 8.19 | |
| C-Class | | | 2.37 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.19 | | | | 11.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| Utilities Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.41 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.00 | | | | 7.13 | |
| Advisor Class | | | 1.88 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.64 | | | | 9.50 | |
| A-Class | | | 1.64 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.85 | | | | 8.29 | |
| C-Class | | | 2.39 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.09 | | | | 12.06 | |
| 2 | Expenses are equal to the Fund’s annualized expense ratio, net of any applicable fee waivers, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). |
| 3 | Actual cumulative return at net asset value for the period March 31, 2013 to September 30, 2013. |
| 8 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| FUND PROFILE (Unaudited) | September 30, 2013 |
BANKING FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the banking sector, including commercial banks (and their holding companies) and savings and loan institutions (“Banking Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 1, 1998 |
| A-Class | September 1, 2004 |
| C-Class | March 30, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| JPMorgan Chase & Co. | | | 4.0 | % |
| Wells Fargo & Co. | | | 3.9 | % |
| Bank of America Corp. | | | 3.8 | % |
| Citigroup, Inc. | | | 3.8 | % |
| U.S. Bancorp | | | 2.9 | % |
| Capital One Financial Corp. | | | 2.3 | % |
| PNC Financial Services Group, Inc. | | | 2.2 | % |
| Bank of New York Mellon Corp. | | | 2.1 | % |
| State Street Corp. | | | 1.9 | % |
| BB&T Corp. | | | 1.7 | % |
| Top Ten Total | | | 28.6 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 9 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| BANKING FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.5% | | | | | | | | |
| | | | | | | | | |
| REGIONAL BANKS - 38.6% | | | | | | | | |
| PNC Financial Services Group, Inc. | | | 5,047 | | | $ | 365,654 | |
| BB&T Corp. | | | 8,339 | | | | 281,440 | |
| SunTrust Banks, Inc. | | | 7,642 | | | | 247,754 | |
| Fifth Third Bancorp | | | 12,826 | | | | 231,381 | |
| M&T Bank Corp. | | | 2,031 | | | | 227,310 | |
| Regions Financial Corp. | | | 23,660 | | | | 219,092 | |
| KeyCorp | | | 17,057 | | | | 194,450 | |
| CIT Group, Inc.* | | | 3,807 | | | | 185,667 | |
| Huntington Bancshares, Inc. | | | 19,106 | | | | 157,816 | |
| Popular, Inc.* | | | 6,011 | | | | 157,669 | |
| First Republic Bank | | | 3,181 | | | | 148,330 | |
| Zions Bancorporation | | | 4,949 | | | | 135,702 | |
| East West Bancorp, Inc. | | | 4,040 | | | | 129,078 | |
| Cullen/Frost Bankers, Inc. | | | 1,800 | | | | 126,990 | |
| Signature Bank* | | | 1,385 | | | | 126,755 | |
| SVB Financial Group* | | | 1,441 | | | | 124,459 | |
| Commerce Bancshares, Inc. | | | 2,771 | | | | 121,398 | |
| First Niagara Financial Group, Inc. | | | 11,511 | | | | 119,369 | |
| Prosperity Bancshares, Inc. | | | 1,903 | | | | 117,682 | |
| City National Corp. | | | 1,765 | | | | 117,655 | |
| FirstMerit Corp. | | | 5,378 | | | | 116,756 | |
| BankUnited, Inc. | | | 3,470 | | | | 108,229 | |
| Associated Banc-Corp. | | | 6,301 | | | | 97,602 | |
| Hancock Holding Co. | | | 3,103 | | | | 97,372 | |
| First Horizon National Corp. | | | 8,683 | | | | 95,426 | |
| Bank of Hawaii Corp. | | | 1,751 | | | | 95,342 | |
| TCF Financial Corp. | | | 6,573 | | | | 93,862 | |
| UMB Financial Corp. | | | 1,725 | | | | 93,737 | |
| CapitalSource, Inc. | | | 7,804 | | | | 92,712 | |
| Susquehanna Bancshares, Inc. | | | 7,346 | | | | 92,192 | |
| Webster Financial Corp. | | | 3,593 | | | | 91,729 | |
| Fulton Financial Corp. | | | 7,755 | | | | 90,578 | |
| Valley National Bancorp1 | | | 8,566 | | | | 85,232 | |
| BancorpSouth, Inc. | | | 4,217 | | | | 84,087 | |
| Cathay General Bancorp | | | 3,550 | | | | 82,964 | |
| Texas Capital Bancshares, Inc.* | | | 1,800 | | | | 82,746 | |
| Glacier Bancorp, Inc. | | | 3,330 | | | | 82,284 | |
| First Financial Bankshares, Inc. | | | 1,390 | | | | 81,760 | |
| Umpqua Holdings Corp. | | | 5,000 | | | | 81,100 | |
| PrivateBancorp, Inc. — Class A | | | 3,777 | | | | 80,828 | |
| Bank of the Ozarks, Inc. | | | 1,660 | | | | 79,663 | |
| FNB Corp. | | | 6,562 | | | | 79,597 | |
| Trustmark Corp. | | | 3,080 | | | | 78,848 | |
| Wintrust Financial Corp. | | | 1,886 | | | | 77,458 | |
| MB Financial, Inc. | | | 2,670 | | | | 75,401 | |
| United Bankshares, Inc. | | | 2,600 | | | | 75,348 | |
| PacWest Bancorp | | | 2,180 | | | | 74,905 | |
| IBERIABANK Corp. | | | 1,434 | | | | 74,382 | |
| National Penn Bancshares, Inc. | | | 7,170 | | | | 72,059 | |
| Old National Bancorp | | | 5,040 | | | | 71,568 | |
| CVB Financial Corp. | | | 5,290 | | | | 71,521 | |
| Westamerica Bancorporation | | | 1,390 | | | | 69,139 | |
| Columbia Banking System, Inc. | | | 2,750 | | | | 67,925 | |
| Total Regional Banks | | | | | | | 6,330,003 | |
| DIVERSIFIED BANKS - 27.9% | | | | | | | | |
| Wells Fargo & Co. | | | 15,435 | | | | 637,773 | |
| U.S. Bancorp | | | 13,083 | | | | 478,575 | |
| Itau Unibanco Holding S.A. ADR | | | 14,888 | | | | 210,219 | |
| Banco Bradesco S.A. ADR | | | 14,211 | | | | 197,249 | |
| Credicorp Ltd. | | | 1,385 | | | | 177,917 | |
| Toronto-Dominion Bank | | | 1,895 | | | | 170,512 | |
| ICICI Bank Ltd. ADR | | | 5,585 | | | | 170,231 | |
| Banco Santander S.A. ADR | | | 20,628 | | | | 168,531 | |
| Banco Santander Brasil S.A. ADR | | | 24,109 | | | | 167,558 | |
| Royal Bank of Canada | | | 2,568 | | | | 164,891 | |
| HSBC Holdings plc ADR | | | 3,030 | | | | 164,408 | |
| Bank of Montreal | | | 2,446 | | | | 163,442 | |
| Bank of Nova Scotia | | | 2,830 | | | | 162,187 | |
| Comerica, Inc. | | | 4,124 | | | | 162,114 | |
| Barclays plc ADR | | | 9,289 | | | | 158,285 | |
| Canadian Imperial Bank of Commerce | | | 1,945 | | | | 155,094 | |
| Banco Bilbao Vizcaya Argentaria S.A. ADR | | | 13,837 | | | | 154,698 | |
| Bancolombia S.A. ADR | | | 2,685 | | | | 154,495 | |
| Banco Santander Chile ADR | | | 5,829 | | | | 153,244 | |
| Grupo Financiero Santander Mexico | | | | | | | | |
| SAB de CV ADR | | | 11,080 | | | | 153,126 | |
| HDFC Bank Ltd. ADR | | | 4,950 | | | | 152,361 | |
| Sumitomo Mitsui Financial Group, | | | | | | | | |
| Inc. ADR1 | | | 15,330 | | | | 149,161 | |
| Mitsubishi UFJ Financial Group, Inc. ADR | | | 23,153 | | | | 148,411 | |
| Total Diversified Banks | | | | | | | 4,574,482 | |
| OTHER DIVERSIFIED FINANCIAL SERVICES - 13.5% | | | | | | | | |
| JPMorgan Chase & Co. | | | 12,565 | | | | 649,484 | |
| Bank of America Corp. | | | 45,383 | | | | 626,285 | |
| Citigroup, Inc. | | | 12,758 | | | | 618,891 | |
| ING US, Inc. | | | 5,790 | | | | 169,126 | |
| ING Groep N.V. ADR* | | | 13,290 | | | | 150,842 | |
| Total Other Diversified Financial Services | | | | | | | 2,214,628 | |
| THRIFTS & MORTGAGE FINANCE - 8.9% | | | | | | | | |
| Ocwen Financial Corp.* | | | 2,820 | | | | 157,270 | |
| New York Community Bancorp, Inc. | | | 10,307 | | | | 155,739 | |
| Home Loan Servicing Solutions Ltd. | | | 6,782 | | | | 149,272 | |
| People’s United Financial, Inc. | | | 9,025 | | | | 129,780 | |
| Hudson City Bancorp, Inc. | | | 14,294 | | | | 129,361 | |
| Nationstar Mortgage Holdings, Inc.* | | | 2,295 | | | | 129,048 | |
| Washington Federal, Inc. | | | 4,380 | | | | 90,578 | |
| Radian Group, Inc. | | | 6,470 | | | | 90,127 | |
| MGIC Investment Corp.* | | | 12,090 | | | | 88,015 | |
| Capitol Federal Financial, Inc. | | | 6,471 | | | | 80,435 | |
| EverBank Financial Corp. | | | 5,150 | | | | 77,147 | |
| Northwest Bancshares, Inc. | | | 5,090 | | | | 67,290 | |
| Astoria Financial Corp. | | | 5,316 | | | | 66,131 | |
| BofI Holding, Inc.* | | | 850 | | | | 55,131 | |
| Total Thrifts & Mortgage Finance | | | | | | | 1,465,324 | |
| ASSET MANAGEMENT & CUSTODY BANKS - 5.4% | | | | | | | | |
| Bank of New York Mellon Corp. | | | 11,586 | | | | 349,781 | |
| State Street Corp. | | | 4,840 | | | | 318,230 | |
| Northern Trust Corp. | | | 3,900 | | | | 212,121 | |
| Total Asset Management & Custody Banks | | | | | | | 880,132 | |
| 10 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| BANKING FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| DIVERSIFIED CAPITAL MARKETS - 2.9% | | | | | | | | |
| Deutsche Bank AG | | | 3,478 | | | $ | 159,570 | |
| Credit Suisse Group AG ADR | | | 5,172 | | | | 158,005 | |
| UBS AG | | | 7,496 | | | | 153,818 | |
| Total Diversified Capital Markets | | | | | | | 471,393 | |
| CONSUMER FINANCE - 2.3% | | | | | | | | |
| Capital One Financial Corp. | | | 5,460 | | | | 375,320 | |
| Total Common Stocks | | | | | | | | |
| (Cost $11,284,593) | | | | | | | 16,311,282 | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.8% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 135,327 | | | | 135,327 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $135,327) | | | | | | | 135,327 | |
| SECURITIES LENDING COLLATERAL††,3 - 1.1% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 90,523 | | | | 90,523 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 84,527 | | | | 84,527 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $175,050) | | | | | | | 175,050 | |
| Total Investments - 101.4% | | | | | | | | |
| (Cost $11,594,970) | | | | | | $ | 16,621,659 | |
| Other Assets & Liabilities, net - (1.4)% | | | | | | | (236,662 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 16,384,997 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 11 |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $168,456 of | | | | |
| securities loaned | | | | |
| (cost $11,284,593) | | $ | 16,311,282 | |
| Repurchase agreements, at value | | | | |
| (cost $310,377) | | | 310,377 | |
| Total investments | | | | |
| (cost $11,594,970) | | | 16,621,659 | |
| Cash | | | 9 | |
| Receivables: | | | | |
| Fund shares sold | | | 242,685 | |
| Dividends | | | 24,405 | |
| Foreign taxes reclaim | | | 344 | |
| Interest | | | 75 | |
| Total assets | | | 16,889,177 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 297,772 | |
| Upon return of securities loaned | | | 175,050 | |
| Management fees | | | 10,484 | |
| Distribution and service fees | | | 4,510 | |
| Transfer agent and administrative fees | | | 3,083 | |
| Portfolio accounting fees | | | 1,234 | |
| Miscellaneous | | | 12,047 | |
| Total liabilities | | | 504,180 | |
| Net assets | | $ | 16,384,997 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 36,602,326 | |
| Undistributed net investment income | | | 213,531 | |
| Accumulated net realized loss on investments | | | (25,457,549 | ) |
| Net unrealized appreciation on investments | | | 5,026,689 | |
| Net assets | | $ | 16,384,997 | |
| Investor Class: | | | | |
| Net assets | | $ | 7,303,125 | |
| Capital shares outstanding | | | 127,087 | |
| Net asset value per share | | $ | 57.47 | |
| Advisor Class: | | | | |
| Net assets | | $ | 2,436,716 | |
| Capital shares outstanding | | | 46,845 | |
| Net asset value per share | | $ | 52.02 | |
| A-Class: | | | | |
| Net assets | | $ | 3,064,558 | |
| Capital shares outstanding | | | 57,609 | |
| Net asset value per share | | $ | 53.20 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 55.85 | |
| C-Class: | | | | |
| Net assets | | $ | 3,580,598 | |
| Capital shares outstanding | | | 71,989 | |
| Net asset value per share | | $ | 49.74 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $4,649) | | $ | 183,756 | |
| Income from securities lending, net | | | 418 | |
| Interest | | | 5 | |
| Total investment income | | | 184,179 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 70,589 | |
| Transfer agent and administrative fees | | | 20,762 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 6,778 | |
| A-Class | | | 3,396 | |
| C-Class | | | 19,286 | |
| Portfolio accounting fees | | | 8,305 | |
| Trustees’ fees* | | | 1,038 | |
| Custodian fees | | | 817 | |
| Line of credit fees | | | 65 | |
| Miscellaneous | | | 12,056 | |
| Total expenses | | | 143,092 | |
| Net investment income | | | 41,087 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 1,032,273 | |
| Net realized gain | | | 1,032,273 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (26,579 | ) |
| Net change in unrealized appreciation (depreciation) | | | (26,579 | ) |
| Net realized and unrealized gain | | | 1,005,694 | |
| Net increase in net assets resulting from operations | | $ | 1,046,781 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 12 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 41,087 | | | $ | 162,457 | |
| Net realized gain (loss) on investments | | | 1,032,273 | | | | (870,744 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (26,579 | ) | | | 614,730 | |
| Net increase (decrease) in net assets resulting from operations | | | 1,046,781 | | | | (93,557 | ) |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (34,316 | ) |
| Advisor Class | | | — | | | | (35,517 | ) |
| A-Class | | | — | | | | (2,491 | ) |
| C-Class | | | — | | | | (10,552 | ) |
| Total distributions to shareholders | | | — | | | | (82,876 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 18,050,727 | | | | 48,557,653 | |
| Advisor Class | | | 4,542,084 | | | | 27,915,563 | |
| A-Class | | | 6,152,100 | | | | 7,960,541 | |
| C-Class | | | 12,149,769 | | | | 18,118,088 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 29,924 | |
| Advisor Class | | | — | | | | 35,505 | |
| A-Class | | | — | | | | 2,316 | |
| C-Class | | | — | | | | 9,324 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (20,229,385 | ) | | | (68,846,342 | ) |
| Advisor Class | | | (6,480,475 | ) | | | (24,816,806 | ) |
| A-Class | | | (5,215,678 | ) | | | (8,398,878 | ) |
| C-Class | | | (12,920,329 | ) | | | (18,195,856 | ) |
| Net decrease from capital share transactions | | | (3,951,187 | ) | | | (17,628,968 | ) |
| Net decrease in net assets | | | (2,904,406 | ) | | | (17,805,401 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 19,289,403 | | | | 37,094,804 | |
| End of period | | $ | 16,384,997 | | | $ | 19,289,403 | |
| Undistributed net investment income at end of period | | $ | 213,531 | | | $ | 172,444 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 318,500 | | | | 1,044,393 | |
| Advisor Class | | | 89,343 | | | | 649,106 | |
| A-Class | | | 115,940 | | | | 184,181 | |
| C-Class | | | 250,259 | | | | 437,246 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 642 | |
| Advisor Class | | | — | | | | 838 | |
| A-Class | | | — | | | | 54 | |
| C-Class | | | — | | | | 229 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (360,952 | ) | | | (1,497,165 | ) |
| Advisor Class | | | (131,264 | ) | | | (587,096 | ) |
| A-Class | | | (101,490 | ) | | | (212,144 | ) |
| C-Class | | | (266,499 | ) | | | (442,727 | ) |
| Net decrease in shares | | | (86,163 | ) | | | (422,443 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 13 |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 52.58 | | | $ | 46.75 | | | $ | 49.75 | | | $ | 50.73 | | | $ | 32.62 | | | $ | 75.60 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .25 | | | | .54 | | | | .44 | | | | .13 | | | | .28 | | | | 1.30 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.64 | | | | 5.44 | | | | (3.39 | ) | | | (.99 | ) | | | 20.05 | | | | (42.98 | ) |
| Total from investment operations | | | 4.89 | | | | 5.98 | | | | (2.95 | ) | | | (.86 | ) | | | 20.33 | | | | (41.68 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Total distributions | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Net asset value, end of period | | $ | 57.47 | | | $ | 52.58 | | | $ | 46.75 | | | $ | 49.75 | | | $ | 50.73 | | | $ | 32.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.30 | % | | | 12.84 | % | | | (5.89 | %) | | | (1.66 | %) | | | 63.48 | % | | | (55.66 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 7,303 | | | $ | 8,915 | | | $ | 29,061 | | | $ | 8,711 | | | $ | 26,340 | | | $ | 23,804 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.89 | % | | | 1.16 | % | | | 1.02 | % | | | 0.27 | % | | | 0.67 | % | | | 2.42 | % |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.34 | % | | | 1.39 | % | | | 1.38 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 168 | % | | | 382 | % | | | 544 | % | | | 1,130 | % | | | 986 | % | | | 1,055 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 47.71 | | | $ | 42.63 | | | $ | 45.63 | | | $ | 46.79 | | | $ | 30.36 | | | $ | 70.70 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .08 | | | | .17 | | | | .12 | | | | (.08 | ) | | | .06 | | | | 1.20 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.23 | | | | 5.06 | | | | (3.07 | ) | | | (.96 | ) | | | 18.59 | | | | (40.24 | ) |
| Total from investment operations | | | 4.31 | | | | 5.23 | | | | (2.95 | ) | | | (1.04 | ) | | | 18.65 | | | | (39.04 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Total distributions | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Net asset value, end of period | | $ | 52.02 | | | $ | 47.71 | | | $ | 42.63 | | | $ | 45.63 | | | $ | 46.79 | | | $ | 30.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.03 | % | | | 12.32 | % | | | (6.43 | %) | | | (2.19 | %) | | | 62.66 | % | | | (55.70 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,437 | | | $ | 4,235 | | | $ | 1,105 | | | $ | 629 | | | $ | 1,291 | | | $ | 2,509 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.31 | % | | | 0.38 | % | | | 0.30 | % | | | (0.18 | %) | | | 0.17 | % | | | 2.42 | % |
| Total expenses | | | 1.87 | % | | | 1.86 | % | | | 1.83 | % | | | 1.89 | % | | | 1.88 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 168 | % | | | 382 | % | | | 544 | % | | | 1,130 | % | | | 986 | % | | | 1,055 | % |
| 14 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 48.74 | | | $ | 43.45 | | | $ | 46.38 | | | $ | 47.41 | | | $ | 30.67 | | | $ | 71.50 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .14 | | | | .36 | | | | .30 | | | | .04 | | | | .02 | | | | 1.30 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.32 | | | | 5.08 | | | | (3.18 | ) | | | (.95 | ) | | | 18.94 | | | | (40.83 | ) |
| Total from investment operations | | | 4.46 | | | | 5.44 | | | | (2.88 | ) | | | (.91 | ) | | | 18.96 | | | | (39.53 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Total distributions | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Net asset value, end of period | | $ | 53.20 | | | $ | 48.74 | | | $ | 43.45 | | | $ | 46.38 | | | $ | 47.41 | | | $ | 30.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.15 | % | | | 12.60 | % | | | (6.19 | %) | | | (1.89 | %) | | | 63.04 | % | | | (55.77 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,065 | | | $ | 2,103 | | | $ | 3,088 | | | $ | 913 | | | $ | 6,381 | | | $ | 851 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.52 | % | | | 0.88 | % | | | 0.73 | % | | | 0.09 | % | | | 0.06 | % | | | 2.71 | % |
| Total expenses | | | 1.62 | % | | | 1.59 | % | | | 1.61 | % | | | 1.64 | % | | | 1.63 | % | | | 1.62 | % |
| Portfolio turnover rate | | | 168 | % | | | 382 | % | | | 544 | % | | | 1,130 | % | | | 986 | % | | | 1,055 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 45.74 | | | $ | 41.09 | | | $ | 44.20 | | | $ | 45.51 | | | $ | 29.90 | | | $ | 69.50 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.03 | ) | | | .01 | | | | (.01 | ) | | | (.29 | ) | | | (.16 | ) | | | .90 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.03 | | | | 4.79 | | | | (3.05 | ) | | | (.90 | ) | | | 17.99 | | | | (39.20 | ) |
| Total from investment operations | | | 4.00 | | | | 4.80 | | | | (3.06 | ) | | | (1.19 | ) | | | 17.83 | | | | (38.30 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Total distributions | | | — | | | | (.15 | ) | | | (.05 | ) | | | (.12 | ) | | | (2.22 | ) | | | (1.30 | ) |
| Net asset value, end of period | | $ | 49.74 | | | $ | 45.74 | | | $ | 41.09 | | | $ | 44.20 | | | $ | 45.51 | | | $ | 29.90 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 8.75 | % | | | 11.74 | % | | | (6.88 | %) | | | (2.58 | %) | | | 60.86 | % | | | (55.64 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,581 | | | $ | 4,036 | | | $ | 3,841 | | | $ | 2,844 | | | $ | 5,607 | | | $ | 2,114 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.13 | %) | | | 0.02 | % | | | (0.03 | %) | | | (0.67 | %) | | | (0.42 | %) | | | 1.82 | % |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.35 | % | | | 2.38 | % | | | 2.38 | % | | | 2.40 | % |
| Portfolio turnover rate | | | 168 | % | | | 382 | % | | | 544 | % | | | 1,130 | % | | | 986 | % | | | 1,055 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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 the period March 31, 2008 – April 19, 2009, have been restated to reflect a 1:10 reverse share split effective April 20, 2009. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 15 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
BASIC MATERIALS FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies engaged in the mining, manufacture or sale of basic materials, such as lumber, steel, iron, aluminum, concrete, chemicals and other basic building and manufacturing materials (“Basic Materials Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 14, 1998 |
| A-Class | September 1, 2004 |
| C-Class | May 3, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Monsanto Co. | | | 3.1 | % |
| EI du Pont de Nemours & Co. | | | 3.0 | % |
| Dow Chemical Co. | | | 2.8 | % |
| Praxair, Inc. | | | 2.5 | % |
| LyondellBasell Industries N.V. — Class A | | | 2.5 | % |
| Freeport-McMoRan Copper & Gold, Inc. | | | 2.4 | % |
| Ecolab, Inc. | | | 2.3 | % |
| Barrick Gold Corp. | | | 2.1 | % |
| PPG Industries, Inc. | | | 2.0 | % |
| Potash Corporation of Saskatchewan, Inc. | | | 2.0 | % |
| Top Ten Total | | | 24.7 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 16 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| BASIC MATERIALS FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.6% | | | | | | | | |
| | | | | | | | | |
| GOLD - 14.7% | | | | | | | | |
| Barrick Gold Corp. | | | 45,429 | | | $ | 845,888 | |
| Goldcorp, Inc. | | | 27,702 | | | | 720,529 | |
| Newmont Mining Corp. | | | 21,426 | | | | 602,071 | |
| Randgold Resources Ltd. ADR | | | 5,189 | | | | 371,169 | |
| Yamana Gold, Inc. | | | 34,314 | | | | 356,866 | |
| Agnico Eagle Mines Ltd. | | | 13,085 | | | | 346,360 | |
| AngloGold Ashanti Ltd. ADR | | | 25,480 | | | | 338,374 | |
| Kinross Gold Corp. | | | 65,565 | | | | 331,103 | |
| Gold Fields Ltd. ADR | | | 64,804 | | | | 296,154 | |
| Cia de Minas Buenaventura SAA ADR | | | 25,014 | | | | 292,914 | |
| Eldorado Gold Corp. | | | 42,442 | | | | 284,786 | |
| Royal Gold, Inc. | | | 5,658 | | | | 275,318 | |
| New Gold, Inc.* | | | 40,698 | | | | 243,374 | |
| Franco-Nevada Corp. | | | 5,301 | | | | 239,923 | |
| IAMGOLD Corp. | | | 48,819 | | | | 231,890 | |
| Allied Nevada Gold Corp.* | | | 24,037 | | | | 100,475 | |
| Total Gold | | | | | | | 5,877,194 | |
| SPECIALTY CHEMICALS - 14.4% | | | | | | | | |
| Ecolab, Inc. | | | 9,255 | | | | 914,025 | |
| Sherwin-Williams Co. | | | 3,963 | | | | 721,980 | |
| Sigma-Aldrich Corp. | | | 6,171 | | | | 526,386 | |
| Celanese Corp. — Class A | | | 9,187 | | | | 484,982 | |
| Ashland, Inc. | | | 4,857 | | | | 449,175 | |
| International Flavors & Fragrances, Inc. | | | 5,211 | | | | 428,865 | |
| WR Grace & Co.* | | | 4,865 | | | | 425,201 | |
| Valspar Corp. | | | 6,135 | | | | 389,143 | |
| Albemarle Corp. | | | 6,061 | | | | 381,479 | |
| Rockwood Holdings, Inc. | | | 5,496 | | | | 367,682 | |
| RPM International, Inc. | | | 10,141 | | | | 367,104 | |
| Cytec Industries, Inc. | | | 3,608 | | | | 293,547 | |
| Total Specialty Chemicals | | | | | | | 5,749,569 | |
| DIVERSIFIED CHEMICALS - 12.1% | | | | | | | | |
| EI du Pont de Nemours & Co. | | | 20,624 | | | | 1,207,742 | |
| Dow Chemical Co. | | | 28,698 | | | | 1,102,003 | |
| PPG Industries, Inc. | | | 4,880 | | | | 815,253 | |
| Eastman Chemical Co. | | | 7,432 | | | | 578,953 | |
| FMC Corp. | | | 7,317 | | | | 524,775 | |
| Huntsman Corp. | | | 17,728 | | | | 365,374 | |
| Olin Corp. | | | 10,000 | | | | 230,700 | |
| Total Diversified Chemicals | | | | | | | 4,824,800 | |
| FERTILIZERS & AGRICULTURAL CHEMICALS - 9.9% | | | | |
| Monsanto Co. | | | 11,783 | | | | 1,229,791 | |
| Potash Corporation of Saskatchewan, Inc. | | | 25,710 | | | | 804,209 | |
| Mosaic Co. | | | 16,512 | | | | 710,346 | |
| CF Industries Holdings, Inc. | | | 2,754 | | | | 580,626 | |
| Agrium, Inc. | | | 4,122 | | | | 346,372 | |
| Sociedad Quimica y Minera de | | | | | | | | |
| Chile S.A. ADR | | | 8,950 | | | | 273,423 | |
| Total Fertilizers & Agricultural Chemicals | | | | | | | 3,944,767 | |
| STEEL - 9.6% | | | | | | | | |
| Vale S.A. ADR | | | 46,874 | | | | 731,702 | |
| Nucor Corp. | | | 13,282 | | | | 651,084 | |
| Reliance Steel & Aluminum Co. | | | 5,262 | | | | 385,547 | |
| Steel Dynamics, Inc. | | | 19,166 | | | | 320,264 | |
| Gerdau S.A. ADR | | | 40,420 | | | | 301,533 | |
| ArcelorMittal | | | 21,534 | | | | 294,370 | |
| Carpenter Technology Corp. | | | 4,961 | | | | 288,284 | |
| Allegheny Technologies, Inc. | | | 9,396 | | | | 286,766 | |
| Cliffs Natural Resources, Inc.1 | | | 13,849 | | | | 283,905 | |
| United States Steel Corp. | | | 13,714 | | | | 282,371 | |
| Total Steel | | | | | | | 3,825,826 | |
| DIVERSIFIED METALS & MINING - 9.4% | | | | | | | | |
| Freeport-McMoRan Copper & Gold, Inc. | | | 28,812 | | | | 953,100 | |
| Southern Copper Corp. | | | 27,949 | | | | 761,330 | |
| Rio Tinto plc ADR | | | 9,885 | | | | 481,993 | |
| BHP Billiton Ltd. ADR | | | 6,945 | | | | 461,843 | |
| Teck Resources Ltd. — Class B | | | 12,013 | | | | 322,429 | |
| BHP Billiton plc ADR | | | 4,280 | | | | 251,921 | |
| US Silica Holdings, Inc.1 | | | 7,941 | | | | 197,731 | |
| Molycorp, Inc.*,1 | | | 27,255 | | | | 178,793 | |
| Walter Energy, Inc. | | | 10,753 | | | | 150,865 | |
| Total Diversified Metals & Mining | | | | | | | 3,760,005 | |
| PAPER PACKAGING - 5.8% | | | | | | | | |
| Rock Tenn Co. — Class A | | | 4,435 | | | | 449,133 | |
| MeadWestvaco Corp. | | | 11,400 | | | | 437,532 | |
| Packaging Corporation of America | | | 6,590 | | | | 376,223 | |
| Sealed Air Corp. | | | 13,774 | | | | 374,515 | |
| Avery Dennison Corp. | | | 7,970 | | | | 346,854 | |
| Bemis Company, Inc. | | | 8,828 | | | | 344,380 | |
| Total Paper Packaging | | | | | | | 2,328,637 | |
| INDUSTRIAL GASES - 5.6% | | | | | | | | |
| Praxair, Inc. | | | 8,241 | | | | 990,650 | |
| Air Products & Chemicals, Inc. | | | 7,273 | | | | 775,084 | |
| Airgas, Inc. | | | 4,391 | | | | 465,666 | |
| Total Industrial Gases | | | | | | | 2,231,400 | |
| COMMODITY CHEMICALS - 4.2% | | | | | | | | |
| LyondellBasell Industries N.V. — Class A | | | 13,500 | | | | 988,605 | |
| Westlake Chemical Corp. | | | 4,170 | | | | 436,432 | |
| Axiall Corp. | | | 7,210 | | | | 272,466 | |
| Total Commodity Chemicals | | | | | | | 1,697,503 | |
| CONSTRUCTION MATERIALS - 3.9% | | | | | | | | |
| Cemex SAB de CV ADR* | | | 40,867 | | | | 456,892 | |
| Vulcan Materials Co. | | | 8,318 | | | | 430,956 | |
| Martin Marietta Materials, Inc. | | | 3,721 | | | | 365,291 | |
| Eagle Materials, Inc. | | | 4,360 | | | | 316,318 | |
| Total Construction Materials | | | | | | | 1,569,457 | |
| METAL & GLASS CONTAINERS - 3.0% | | | | | | | | |
| Ball Corp. | | | 9,392 | | | | 421,513 | |
| Crown Holdings, Inc.* | | | 9,561 | | | | 404,239 | |
| Owens-Illinois, Inc.* | | | 12,053 | | | | 361,831 | |
| Total Metal & Glass Containers | | | | | | | 1,187,583 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 17 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| BASIC MATERIALS FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| PRECIOUS METALS & MINERALS - 2.7% | | | | | | | | |
| Silver Wheaton Corp. | | | 19,692 | | | $ | 487,770 | |
| Pan American Silver Corp. | | | 23,321 | | | | 246,037 | |
| Stillwater Mining Co.* | | | 16,390 | | | | 180,454 | |
| Coeur Mining, Inc.* | | | 13,758 | | | | 165,784 | |
| Total Precious Metals & Minerals | | | | | | | 1,080,045 | |
| PAPER PRODUCTS - 2.5% | | | | | | | | |
| International Paper Co. | | | 16,463 | | | | 737,542 | |
| Domtar Corp. | | | 3,240 | | | | 257,321 | |
| Total Paper Products | | | | | | | 994,863 | |
| ALUMINUM - 1.2% | | | | | | | | |
| Alcoa, Inc. | | | 59,489 | | | | 483,051 | |
| FOREST PRODUCTS - 0.6% | | | | | | | | |
| Louisiana-Pacific Corp.* | | | 14,380 | | | | 252,944 | |
| Total Common Stocks | | | | | | | | |
| (Cost $22,651,346) | | | | | | | 39,807,644 | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.6% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 246,338 | | | | 246,338 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $246,338) | | | | | | | 246,338 | |
| SECURITIES LENDING COLLATERAL††,3 - 1.3% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 263,769 | | | | 263,769 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 246,296 | | | | 246,296 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $510,065) | | | | | | | 510,065 | |
| Total Investments - 101.5% | | | | | | | | |
| (Cost $23,407,749) | | | | | | $ | 40,564,047 | |
| Other Assets & Liabilities, net - (1.5)% | | | | | | | (606,932 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 39,957,115 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 18 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| BASIC MATERIALS FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $487,490 of | | | | |
| securities loaned | | | | |
| (cost $22,651,346) | | $ | 39,807,644 | |
| Repurchase agreements, at value | | | | |
| (cost $756,403) | | | 756,403 | |
| Total investments | | | | |
| (cost $23,407,749) | | | 40,564,047 | |
| Cash | | | 65 | |
| Receivables: | | | | |
| Securities sold | | | 3,054,737 | |
| Dividends | | | 51,301 | |
| Fund shares sold | | | 8,208 | |
| Interest | | | 1,704 | |
| Total assets | | | 43,680,062 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 3,139,072 | |
| Upon return of securities loaned | | | 510,065 | |
| Management fees | | | 28,620 | |
| Transfer agent and administrative fees | | | 8,418 | |
| Distribution and service fees | | | 5,964 | |
| Portfolio accounting fees | | | 3,367 | |
| Miscellaneous | | | 27,441 | |
| Total liabilities | | | 3,722,947 | |
| Net assets | | $ | 39,957,115 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 51,629,107 | |
| Undistributed net investment income | | | 388,290 | |
| Accumulated net realized loss on investments | | | (29,216,580 | ) |
| Net unrealized appreciation on investments | | | 17,156,298 | |
| Net assets | | $ | 39,957,115 | |
| Investor Class: | | | | |
| Net assets | | $ | 25,608,899 | |
| Capital shares outstanding | | | 529,945 | |
| Net asset value per share | | $ | 48.32 | |
| Advisor Class: | | | | |
| Net assets | | $ | 2,083,075 | |
| Capital shares outstanding | | | 46,411 | |
| Net asset value per share | | $ | 44.88 | |
| A-Class: | | | | |
| Net assets | | $ | 7,618,747 | |
| Capital shares outstanding | | | 165,622 | |
| Net asset value per share | | $ | 46.00 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 48.29 | |
| C-Class: | | | | |
| Net assets | | $ | 4,646,394 | |
| Capital shares outstanding | | | 109,382 | |
| Net asset value per share | | $ | 42.48 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $11,849) | | $ | 471,735 | |
| Income from securities lending, net | | | 8,348 | |
| Interest | | | 13 | |
| Total investment income | | | 480,096 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 187,138 | |
| Transfer agent and administrative fees | | | 55,040 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 6,416 | |
| A-Class | | | 11,316 | |
| C-Class | | | 26,256 | |
| Portfolio accounting fees | | | 22,016 | |
| Tax expense | | | 5,107 | |
| Trustees’ fees* | | | 3,124 | |
| Custodian fees | | | 2,350 | |
| Line of credit fees | | | 267 | |
| Miscellaneous | | | 31,873 | |
| Total expenses | | | 350,903 | |
| Net investment income | | | 129,193 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 5,021,014 | |
| Net realized gain | | | 5,021,014 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (7,552,599 | ) |
| Net change in unrealized appreciation (depreciation) | | | (7,552,599 | ) |
| Net realized and unrealized loss | | | (2,531,585 | ) |
| Net decrease in net assets resulting from operations | | $ | (2,402,392 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 19 |
| BASIC MATERIALS FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 129,193 | | | $ | 453,823 | |
| Net realized gain on investments | | | 5,021,014 | | | | 311,441 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (7,552,599 | ) | | | (1,310,252 | ) |
| Net decrease in net assets resulting from operations | | | (2,402,392 | ) | | | (544,988 | ) |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (159,284 | ) |
| Advisor Class | | | — | | | | (14,458 | ) |
| A-Class | | | — | | | | (29,092 | ) |
| C-Class | | | — | | | | (24,821 | ) |
Total distributions to shareholders | | | — | | | | (227,655 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 62,841,369 | | | | 175,560,604 | |
| Advisor Class | | | 4,032,320 | | | | 10,456,179 | |
| A-Class | | | 2,574,747 | | | | 6,275,946 | |
| C-Class | | | 11,965,361 | | | | 28,696,473 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 142,259 | |
| Advisor Class | | | — | | | | 10,612 | |
| A-Class | | | — | | | | 26,621 | |
| C-Class | | | — | | | | 23,063 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (71,958,257 | ) | | | (176,485,331 | ) |
| Advisor Class | | | (5,418,243 | ) | | | (11,897,822 | ) |
| A-Class | | | (5,388,870 | ) | | | (4,371,972 | ) |
| C-Class | | | (13,685,908 | ) | | | (30,128,845 | ) |
| Net decrease from capital share transactions | | | (15,037,481 | ) | | | (1,692,213 | ) |
| Net decrease in net assets | | | (17,439,873 | ) | | | (2,464,856 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 57,396,988 | | | | 59,861,844 | |
| End of period | | $ | 39,957,115 | | | $ | 57,396,988 | |
| Undistributed net investment income at end of period | | $ | 388,290 | | | $ | 259,097 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 1,311,761 | | | | 3,611,782 | |
| Advisor Class | | | 90,242 | | | | 230,287 | |
| A-Class | | | 56,425 | | | | 130,171 | |
| C-Class | | | 286,326 | | | | 667,452 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 2,927 | |
| Advisor Class | | | — | | | | 234 | |
| A-Class | | | — | | | | 574 | |
| C-Class | | | — | | | | 535 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (1,502,886 | ) | | | (3,633,585 | ) |
| Advisor Class | | | (121,593 | ) | | | (266,206 | ) |
| A-Class | | | (124,075 | ) | | | (95,233 | ) |
| C-Class | | | (328,035 | ) | | | (704,019 | ) |
| Net decrease in shares | | | (331,835 | ) | | | (55,081 | ) |
| 20 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| BASIC MATERIALS FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 49.94 | | | $ | 49.80 | | | $ | 56.36 | | | $ | 44.65 | | | $ | 27.43 | | | $ | 50.49 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .19 | | | | .46 | | | | .09 | | | | — | c | | | .24 | | | | .20 |
| Net gain (loss) on investments (realized and unrealized) | | | (1.81 | ) | | | (.15 | ) | | | (6.65 | ) | | | 11.82 | | | | 17.07 | | | | (22.77 | ) |
| Total from investment operations | | | (1.62 | ) | | | .31 | | | | (6.56 | ) | | | 11.82 | | | | 17.31 | | | | (22.57 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Total distributions | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Net asset value, end of period | | $ | 48.32 | | | $ | 49.94 | | | $ | 49.80 | | | $ | 56.36 | | | $ | 44.65 | | | $ | 27.43 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | (3.24 | %) | | | 0.65 | % | | | (11.66 | %) | | | 26.50 | % | | | 63.12 | % | | | (44.54 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 25,609 | | | $ | 36,012 | | | $ | 36,847 | | | $ | 73,606 | | | $ | 44,582 | | | $ | 98,767 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.78 | % | | | 0.95 | % | | | 0.17 | % | | | 0.00 | % | | | 0.65 | % | | | 0.46 | % |
| Total expenses | | | 1.39 | % | | | 1.36 | % | | | 1.36 | % | | | 1.39 | % | | | 1.39 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 153 | % | | | 251 | % | | | 217 | % | | | 292 | % | | | 455 | % | | | 288 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 46.50 | | | $ | 46.61 | | | $ | 53.00 | | | $ | 42.20 | | | $ | 26.06 | | | $ | 48.27 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .06 | | | | .19 | | | | .08 | | | | (.20 | ) | | | .03 | | | | .05 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.68 | ) | | | (.13 | ) | | | (6.47 | ) | | | 11.11 | | | | 16.20 | | | | (21.77 | ) |
| Total from investment operations | | | (1.62 | ) | | | .06 | | | | (6.39 | ) | | | 10.91 | | | | 16.23 | | | | (21.72 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Total distributions | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Net asset value, end of period | | $ | 44.88 | | | $ | 46.50 | | | $ | 46.61 | | | $ | 53.00 | | | $ | 42.20 | | | $ | 26.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | (3.48 | %) | | | 0.16 | % | | | (12.08 | %) | | | 25.88 | % | | | 62.30 | % | | | (44.83 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,083 | | | $ | 3,616 | | | $ | 5,287 | | | $ | 15,986 | | | $ | 8,799 | | | $ | 4,705 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.29 | % | | | 0.43 | % | | | 0.17 | % | | | (0.44 | %) | | | 0.07 | % | | | 0.13 | % |
| Total expenses | | | 1.90 | % | | | 1.86 | % | | | 1.86 | % | | | 1.89 | % | | | 1.89 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 153 | % | | | 251 | % | | | 217 | % | | | 292 | % | | | 455 | % | | | 288 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 21 |
| BASIC MATERIALS FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 47.60 | | | $ | 47.58 | | | $ | 53.99 | | | $ | 42.88 | | | $ | 26.41 | | | $ | 48.80 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .13 | | | | .32 | | | | (.01 | ) | | | (.09 | ) | | | .15 | | | | .12 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.73 | ) | | | (.13 | ) | | | (6.40 | ) | | | 11.31 | | | | 16.41 | | | | (22.02 | ) |
| Total from investment operations | | | (1.60 | ) | | | .19 | | | | (6.41 | ) | | | 11.22 | | | | 16.56 | | | | (21.90 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Total distributions | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Net asset value, end of period | | $ | 46.00 | | | $ | 47.60 | | | $ | 47.58 | | | $ | 53.99 | | | $ | 42.88 | | | $ | 26.41 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | (3.36 | %) | | | 0.41 | % | | | (11.87 | %) | | | 26.20 | % | | | 62.72 | % | | | (44.71 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 7,619 | | | $ | 11,104 | | | $ | 9,410 | | | $ | 18,187 | | | $ | 8,159 | | | $ | 3,986 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.57 | % | | | 0.69 | % | | | (0.03 | %) | | | (0.19 | %) | | | 0.40 | % | | | 0.30 | % |
| Total expenses | | | 1.65 | % | | | 1.61 | % | | | 1.61 | % | | | 1.64 | % | | | 1.65 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 153 | % | | | 251 | % | | | 217 | % | | | 292 | % | | | 455 | % | | | 288 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 44.12 | | | $ | 44.45 | | | $ | 50.80 | | | $ | 40.67 | | | $ | 25.24 | | | $ | 47.02 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.05 | ) | | | (.03 | ) | | | (.33 | ) | | | (.40 | ) | | | (.13 | ) | | | (.18 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.59 | ) | | | (.13 | ) | | | (6.02 | ) | | | 10.64 | | | | 15.65 | | | | (21.11 | ) |
| Total from investment operations | | | (1.64 | ) | | | (.16 | ) | | | (6.35 | ) | | | 10.24 | | | | 15.52 | | | | (21.29 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Total distributions | | | — | | | | (.17 | ) | | | — | | | | (.11 | ) | | | (.09 | ) | | | (.49 | ) |
| Net asset value, end of period | | $ | 42.48 | | | $ | 44.12 | | | $ | 44.45 | | | $ | 50.80 | | | $ | 40.67 | | | $ | 25.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | (3.72 | %) | | | (0.35 | %) | | | (12.50 | %) | | | 25.21 | % | | | 61.51 | % | | | (45.11 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,646 | | | $ | 6,666 | | | $ | 8,317 | | | $ | 13,353 | | | $ | 9,125 | | | $ | 4,024 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.23 | %) | | | (0.07 | %) | | | (0.73 | %) | | | (0.93 | %) | | | (0.37 | %) | | | (0.46 | %) |
| Total expenses | | | 2.39 | % | | | 2.36 | % | | | 2.36 | % | | | 2.39 | % | | | 2.40 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 153 | % | | | 251 | % | | | 217 | % | | | 292 | % | | | 455 | % | | | 288 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 22 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
BIOTECHNOLOGY FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the biotechnology industry, including companies involved in research and development, genetic or other biological engineering, and in the design, manufacture or sale of related biotechnology products or services (“Biotechnology Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 1, 1998 |
| A-Class | September 1, 2004 |
| C-Class | March 30, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Gilead Sciences, Inc. | | | 7.2 | % |
| Amgen, Inc. | | | 6.6 | % |
| Celgene Corp. | | | 6.1 | % |
| Biogen Idec, Inc. | | | 5.4 | % |
| Regeneron Pharmaceuticals, Inc. | | | 4.0 | % |
| Alexion Pharmaceuticals, Inc. | | | 3.6 | % |
| Vertex Pharmaceuticals, Inc. | | | 3.3 | % |
| Life Technologies Corp. | | | 2.7 | % |
| Pharmacyclics, Inc. | | | 2.5 | % |
| Illumina, Inc. | | | 2.4 | % |
| Top Ten Total | | | 43.8 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 23 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| BIOTECHNOLOGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.3% | | | | | | | | |
| | | | | | | | | |
| BIOTECHNOLOGY - 85.4% | | | | | | | | |
| Gilead Sciences, Inc.* | | | 447,504 | | | $ | 28,121,150 | |
| Amgen, Inc. | | | 230,954 | | | | 25,852,990 | |
| Celgene Corp.* | | | 154,657 | | | | 23,806,351 | |
| Biogen Idec, Inc.* | | | 88,033 | | | | 21,194,825 | |
| Regeneron Pharmaceuticals, Inc.* | | | 49,819 | | | | 15,586,871 | |
| Alexion Pharmaceuticals, Inc.* | | | 121,274 | | | | 14,087,188 | |
| Vertex Pharmaceuticals, Inc.* | | | 167,052 | | | | 12,665,883 | |
| Pharmacyclics, Inc.* | | | 70,280 | | | | 9,728,158 | |
| Onyx Pharmaceuticals, Inc.* | | | 70,728 | | | | 8,817,660 | |
| BioMarin Pharmaceutical, Inc.* | | | 118,694 | | | | 8,572,081 | |
| Incyte Corporation Ltd.* | | | 193,269 | | | | 7,373,212 | |
| Elan Corp. plc ADR* | | | 461,483 | | | | 7,189,905 | |
| Seattle Genetics, Inc.*,1 | | | 148,587 | | | | 6,512,568 | |
| Medivation, Inc.* | | | 103,470 | | | | 6,201,992 | |
| Theravance, Inc.* | | | 151,606 | | | | 6,199,169 | |
| Alnylam Pharmaceuticals, Inc.* | | | 95,008 | | | | 6,081,462 | |
| Cubist Pharmaceuticals, Inc.* | | | 94,138 | | | | 5,982,470 | |
| United Therapeutics Corp.* | | | 73,043 | | | | 5,759,441 | |
| Isis Pharmaceuticals, Inc.* | | | 152,780 | | | | 5,735,361 | |
| Opko Health, Inc.*,1 | | | 640,610 | | | | 5,643,774 | |
| Alkermes plc* | | | 161,019 | | | | 5,413,459 | |
| NPS Pharmaceuticals, Inc.* | | | 167,769 | | | | 5,336,732 | |
| Celldex Therapeutics, Inc.* | | | 141,910 | | | | 5,027,871 | |
| Ariad Pharmaceuticals, Inc.* | | | 270,575 | | | | 4,978,580 | |
| Amarin Corporation plc ADR*,1 | | | 779,950 | | | | 4,929,284 | |
| Cepheid, Inc.* | | | 119,576 | | | | 4,668,247 | |
| ACADIA Pharmaceuticals, Inc.* | | | 169,593 | | | | 4,658,720 | |
| Aegerion Pharmaceuticals, Inc.* | | | 54,300 | | | | 4,654,053 | |
| Sarepta Therapeutics, Inc.*,1 | | | 88,479 | | | | 4,178,863 | |
| Myriad Genetics, Inc.*,1 | | | 167,572 | | | | 3,937,942 | |
| MannKind Corp.*,1 | | | 654,200 | | | | 3,728,940 | |
| ImmunoGen, Inc.*,1 | | | 207,300 | | | | 3,528,246 | |
| Acorda Therapeutics, Inc.* | | | 101,159 | | | | 3,467,731 | |
| Ironwood Pharmaceuticals, Inc. — Class A*,1 | | | 286,024 | | | | 3,389,384 | |
| Clovis Oncology, Inc.* | | | 55,400 | | | | 3,367,212 | |
| InterMune, Inc.* | | | 211,455 | | | | 3,250,063 | |
| Halozyme Therapeutics, Inc.*,1 | | | 294,000 | | | | 3,245,760 | |
| Exelixis, Inc.*,1 | | | 519,800 | | | | 3,025,236 | |
| PDL BioPharma, Inc.1 | | | 378,913 | | | | 3,019,937 | |
| Arena Pharmaceuticals, Inc.*,1 | | | 571,300 | | | | 3,010,751 | |
| TESARO, Inc.* | | | 72,900 | | | | 2,824,146 | |
| Exact Sciences Corp.* | | | 225,900 | | | | 2,667,879 | |
| Neurocrine Biosciences, Inc.* | | | 234,700 | | | | 2,656,804 | |
| Keryx Biopharmaceuticals, Inc.* | | | 256,860 | | | | 2,594,286 | |
| Infinity Pharmaceuticals, Inc.* | | | 144,090 | | | | 2,514,371 | |
| Array BioPharma, Inc.* | | | 386,700 | | | | 2,405,274 | |
| Spectrum Pharmaceuticals, Inc.1 | | | 244,503 | | | | 2,051,380 | |
| Organovo Holdings, Inc.*,1 | | | 299,000 | | | | 1,725,230 | |
| Achillion Pharmaceuticals, Inc.* | | | 334,498 | | | | 1,010,184 | |
| Total Biotechnology | | | | | | | 332,379,076 | |
| LIFE SCIENCES TOOLS & SERVICES - 12.1% | | | | | | | | |
| Life Technologies Corp.* | | | 140,420 | | | | 10,507,629 | |
| Illumina, Inc.*,1 | | | 116,846 | | | | 9,444,662 | |
| Quintiles Transnational Holdings, Inc.* | | | 159,419 | | | | 7,154,725 | |
| Bio-Rad Laboratories, Inc. — Class A* | | | 46,080 | | | | 5,417,165 | |
| QIAGEN N.V.* | | | 240,200 | | | | 5,140,280 | |
| Techne Corp. | | | 64,004 | | | | 5,124,160 | |
| Charles River Laboratories International, Inc.* | | | 95,700 | | | | 4,427,082 | |
| Total Life Sciences Tools & Services | | | | | | | 47,215,703 | |
| PHARMACEUTICALS - 1.8% | | | | | | | | |
| Medicines Co.* | | | 128,900 | | | | 4,320,728 | |
| Nektar Therapeutics* | | | 265,980 | | | | 2,779,491 | |
| Total Pharmaceuticals | | | | | | | 7,100,219 | |
| Total Common Stocks | | | | | | | | |
| (Cost $219,685,932) | | | | | | | 386,694,998 | |
| RIGHTS - 0.0% | | | | | | | | |
| Clinical Data, Inc. | | | | | | | | |
| Expires 12/31/20*,†††,2 | | | 24,000 | | | | — | |
| Total Rights | | | | | | | | |
| (Cost $ —) | | | | | | | — | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENT††,3 - 0.3% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 1,025,324 | | | | 1,025,324 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $1,025,324) | | | | | | | 1,025,324 | |
| SECURITIES LENDING COLLATERAL††,4 - 9.6% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 19,237,438 | | | | 19,237,438 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 17,963,150 | | | | 17,963,150 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $37,200,588) | | | | | | | 37,200,588 | |
| Total Investments - 109.2% | | | | | | | | |
| (Cost $257,911,844) | | | | | | $ | 424,920,910 | |
| Other Assets & Liabilities, net - (9.2)% | | | | | | | (35,855,832 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 389,065,078 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| ††† | Value determined based on Level 3 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 3 | Repurchase Agreement — See Note 5. |
| 4 | Securities lending collateral — See Note 6.
ADR — American Depositary Receipt
plc — Public Limited Company |
| 24 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| BIOTECHNOLOGY FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $35,194,217 of | | | | |
| securities loaned | | | | |
| (cost $219,685,932) | | $ | 386,694,998 | |
| Repurchase agreements, at value | | | | |
| (cost $38,225,912) | | | 38,225,912 | |
| Total investments | | | | |
| (cost $257,911,844) | | | 424,920,910 | |
| Receivables: | | | | |
| Fund shares sold | | | 2,951,316 | |
| Interest | | | 104,782 | |
| Total assets | | | 427,977,008 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 37,200,588 | |
| Fund shares redeemed | | | 1,070,059 | |
| Management fees | | | 249,233 | |
| Transfer agent and administrative fees | | | 73,304 | |
| Distribution and service fees | | | 42,348 | |
| Portfolio accounting fees | | | 26,785 | |
| Miscellaneous | | | 249,613 | |
| Total liabilities | | | 38,911,930 | |
| Net assets | | $ | 389,065,078 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 235,615,004 | |
| Accumulated net investment loss | | | (2,688,671 | ) |
| Accumulated net realized loss on investments | | | (10,870,321 | ) |
| Net unrealized appreciation on investments | | | 167,009,066 | |
| Net assets | | $ | 389,065,078 | |
| Investor Class: | | | | |
| Net assets | | $ | 275,518,005 | |
| Capital shares outstanding | | | 4,432,077 | |
| Net asset value per share | | $ | 62.16 | |
| Advisor Class: | | | | |
| Net assets | | $ | 42,770,647 | |
| Capital shares outstanding | | | 746,144 | |
| Net asset value per share | | $ | 57.32 | |
| A-Class: | | | | |
| Net assets | | $ | 47,470,853 | |
| Capital shares outstanding | | | 810,805 | |
| Net asset value per share | | $ | 58.55 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 61.47 | |
| C-Class: | | | | |
| Net assets | | $ | 23,305,573 | |
| Capital shares outstanding | | | 425,000 | |
| Net asset value per share | | $ | 54.84 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Income from securities lending, net | | $ | 616,796 | |
| Dividends | | | 351,065 | |
| Interest | | | 133 | |
| Total investment income | | | 967,994 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 1,325,234 | |
| Transfer agent and administrative fees | | | 389,773 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 86,462 | |
| A-Class | | | 46,558 | |
| C-Class | | | 90,344 | |
| Portfolio accounting fees | | | 148,186 | |
| Custodian fees | | | 16,480 | |
| Trustees’ fees* | | | 11,671 | |
| Line of credit fees | | | 137 | |
| Miscellaneous | | | 234,046 | |
| Total expenses | | | 2,348,891 | |
| Net investment loss | | | (1,380,897 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 4,136,599 | |
| Net realized gain | | | 4,136,599 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 69,430,995 | |
| Net change in unrealized appreciation (depreciation) | | | 69,430,995 | |
| Net realized and unrealized gain | | | 73,567,594 | |
| Net increase in net assets resulting from operations | | $ | 72,186,697 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 25 |
| BIOTECHNOLOGY FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (1,380,897 | ) | | $ | (2,084,069 | ) |
| Net realized gain on investments | | | 4,136,599 | | | | 4,729,472 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 69,430,995 | | | | 51,758,234 | |
| Net increase in net assets resulting from operations | | | 72,186,697 | | | | 54,403,637 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 259,019,973 | | | | 469,000,382 | |
| Advisor Class | | | 59,073,861 | | | | 78,606,634 | |
| A-Class | | | 31,819,584 | | | | 54,901,267 | |
| C-Class | | | 20,783,253 | | | | 40,956,893 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (207,456,298 | ) | | | (426,833,879 | ) |
| Advisor Class | | | (46,327,916 | ) | | | (69,817,795 | ) |
| A-Class | | | (19,095,209 | ) | | | (38,802,538 | ) |
| C-Class | | | (15,337,755 | ) | | | (37,066,779 | ) |
| Net increase from capital share transactions | | | 82,479,493 | | | | 70,944,185 | |
| Net increase in net assets | | | 154,666,190 | | | | 125,347,822 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 234,398,888 | | | | 109,051,066 | |
| End of period | | $ | 389,065,078 | | | $ | 234,398,888 | |
| Accumulated net investment loss at end of period | | $ | (2,688,671 | ) | | $ | (1,307,774 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 4,696,849 | | | | 11,739,617 | |
| Advisor Class | | | 1,161,508 | | | | 2,073,757 | |
| A-Class | | | 603,360 | | | | 1,440,618 | |
| C-Class | | | 422,350 | | | | 1,112,660 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (3,774,181 | ) | | | (10,642,905 | ) |
| Advisor Class | | | (912,119 | ) | | | (1,819,571 | ) |
| A-Class | | | (364,076 | ) | | | (1,005,019 | ) |
| C-Class | | | (312,400 | ) | | | (1,008,536 | ) |
| Net increase in shares | | | 1,521,291 | | | | 1,890,621 | |
| 26 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| BIOTECHNOLOGY FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 48.97 | | | $ | 36.90 | | | $ | 29.16 | | | $ | 27.34 | | | $ | 19.37 | | | $ | 21.51 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.21 | ) | | | (.40 | ) | | | (.34 | ) | | | (.33 | ) | | | (.21 | ) | | | (.19 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 13.40 | | | | 12.47 | | | | 8.08 | | | | 2.15 | | | | 8.18 | | | | (1.95 | ) |
| Total from investment operations | | | 13.19 | | | | 12.07 | | | | 7.74 | | | | 1.82 | | | | 7.97 | | | | (2.14 | ) |
| Net asset value, end of period | | $ | 62.16 | | | $ | 48.97 | | | $ | 36.90 | | | $ | 29.16 | | | $ | 27.34 | | | $ | 19.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 26.94 | % | | | 32.71 | % | | | 26.54 | % | | | 6.66 | % | | | 41.15 | % | | | (9.95 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 275,518 | | | $ | 171,844 | | | $ | 89,027 | | | $ | 44,686 | | | $ | 147,631 | | | $ | 65,829 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.74 | %) | | | (0.98 | %) | | | (1.09 | %) | | | (1.26 | %) | | | (0.90 | %) | | | (0.86 | %) |
| Total expenses | | | 1.36 | % | | | 1.35 | % | | | 1.36 | % | | | 1.39 | % | | | 1.39 | % | | | 1.38 | % |
| Portfolio turnover rate | | | 61 | % | | | 197 | % | | | 333 | % | | | 337 | % | | | 316 | % | | | 370 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 45.27 | | | $ | 34.27 | | | $ | 27.22 | | | $ | 25.66 | | | $ | 18.27 | | | $ | 20.39 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.32 | ) | | | (.56 | ) | | | (.48 | ) | | | (.43 | ) | | | (.30 | ) | | | (.29 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 12.37 | | | | 11.56 | | | | 7.53 | | | | 1.99 | | | | 7.69 | | | | (1.83 | ) |
| Total from investment operations | | | 12.05 | | | | 11.00 | | | | 7.05 | | | | 1.56 | | | | 7.39 | | | | (2.12 | ) |
| Net asset value, end of period | | $ | 57.32 | | | $ | 45.27 | | | $ | 34.27 | | | $ | 27.22 | | | $ | 25.66 | | | $ | 18.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 26.62 | % | | | 32.10 | % | | | 25.90 | % | | | 6.08 | % | | | 40.45 | % | | | (10.40 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 42,771 | | | $ | 22,486 | | | $ | 8,313 | | | $ | 7,410 | | | $ | 9,144 | | | $ | 6,675 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.24 | %) | | | (1.46 | %) | | | (1.65 | %) | | | (1.77 | %) | | | (1.38 | %) | | | (1.40 | %) |
| Total expenses | | | 1.86 | % | | | 1.86 | % | | | 1.87 | % | | | 1.89 | % | | | 1.89 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 61 | % | | | 197 | % | | | 333 | % | | | 337 | % | | | 316 | % | | | 370 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 27 |
| BIOTECHNOLOGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 46.18 | | | $ | 34.88 | | | $ | 27.64 | | | $ | 25.98 | | | $ | 18.45 | | | $ | 20.54 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.26 | ) | | | (.48 | ) | | | (.37 | ) | | | (.37 | ) | | | (.25 | ) | | | (.24 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 12.63 | | | | 11.78 | | | | 7.61 | | | | 2.03 | | | | 7.78 | | | | (1.85 | ) |
| Total from investment operations | | | 12.37 | | | | 11.30 | | | | 7.24 | | | | 1.66 | | | | 7.53 | | | | (2.09 | ) |
| Net asset value, end of period | | $ | 58.55 | | | $ | 46.18 | | | $ | 34.88 | | | $ | 27.64 | | | $ | 25.98 | | | $ | 18.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 26.79 | % | | | 32.40 | % | | | 26.19 | % | | | 6.39 | % | | | 40.81 | % | | | (10.18 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 47,471 | | | $ | 26,391 | | | $ | 4,741 | | | $ | 2,211 | | | $ | 2,869 | | | $ | 4,346 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.98 | %) | | | (1.21 | %) | | | (1.30 | %) | | | (1.51 | %) | | | (1.12 | %) | | | (1.17 | %) |
| Total expenses | | | 1.61 | % | | | 1.61 | % | | | 1.61 | % | | | 1.64 | % | | | 1.64 | % | | | 1.64 | % |
| Portfolio turnover rate | | | 61 | % | | | 197 | % | | | 333 | % | | | 337 | % | | | 316 | % | | | 370 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 43.41 | | | $ | 33.04 | | | $ | 26.38 | | | $ | 24.96 | | | $ | 17.87 | | | $ | 20.03 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.43 | ) | | | (.73 | ) | | | (.58 | ) | | | (.54 | ) | | | (.38 | ) | | | (.38 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 11.86 | | | | 11.10 | | | | 7.24 | | | | 1.96 | | | | 7.47 | | | | (1.78 | ) |
| Total from investment operations | | | 11.43 | | | | 10.37 | | | | 6.66 | | | | 1.42 | | | | 7.09 | | | | (2.16 | ) |
| Net asset value, end of period | | $ | 54.84 | | | $ | 43.41 | | | $ | 33.04 | | | $ | 26.38 | | | $ | 24.96 | | | $ | 17.87 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 26.33 | % | | | 31.39 | % | | | 25.25 | % | | | 5.65 | % | | | 39.68 | % | | | (10.78 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 23,306 | | | $ | 13,677 | | | $ | 6,969 | | | $ | 3,393 | | | $ | 4,705 | | | $ | 4,028 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.75 | %) | | | (1.96 | %) | | | (2.06 | %) | | | (2.27 | %) | | | (1.78 | %) | | | (1.89 | %) |
| Total expenses | | | 2.36 | % | | | 2.36 | % | | | 2.36 | % | | | 2.39 | % | | | 2.39 | % | | | 2.39 | % |
| Portfolio turnover rate | | | 61 | % | | | 197 | % | | | 333 | % | | | 337 | % | | | 316 | % | | | 370 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 28 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
CONSUMER PRODUCTS FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies engaged in manufacturing finished goods and services both domestically and internationally (“Consumer Products Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | July 6, 1998 |
| Advisor Class | August 17, 1998 |
| A-Class | September 1, 2004 |
| C-Class | July 24, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Procter & Gamble Co. | | | 5.7 | % |
| Coca-Cola Co. | | | 5.2 | % |
| Philip Morris International, Inc. | | | 4.6 | % |
| PepsiCo, Inc. | | | 4.4 | % |
| Altria Group, Inc. | | | 3.3 | % |
| Colgate-Palmolive Co. | | | 3.0 | % |
| Mondelez International, Inc. — Class A | | | 2.9 | % |
| Kimberly-Clark Corp. | | | 2.4 | % |
| General Mills, Inc. | | | 2.3 | % |
| Kraft Foods Group, Inc. | | | 2.2 | % |
| Top Ten Total | | | 36.0 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 29 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| CONSUMER PRODUCTS FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| | | | | | | |
| COMMON STOCKS† - 99.8% | | | | | | | | |
| | | | | | | | | |
| PACKAGED FOODS & MEATS - 29.2% | | | | | | | | |
| Mondelez International, Inc. — Class A | | | 166,400 | | | $ | 5,228,287 | |
| General Mills, Inc. | | | 84,237 | | | | 4,036,637 | |
| Kraft Foods Group, Inc. | | | 76,800 | | | | 4,027,392 | |
| Kellogg Co. | | | 56,120 | | | | 3,295,928 | |
| Hershey Co. | | | 35,392 | | | | 3,273,760 | |
| Mead Johnson Nutrition Co. — Class A | | | 36,749 | | | | 2,728,981 | |
| ConAgra Foods, Inc. | | | 87,382 | | | | 2,651,170 | |
| Campbell Soup Co. | | | 62,517 | | | | 2,545,067 | |
| JM Smucker Co. | | | 22,931 | | | | 2,408,672 | |
| Hormel Foods Corp. | | | 56,086 | | | | 2,362,342 | |
| Green Mountain Coffee Roasters, Inc.* | | | 30,874 | | | | 2,325,738 | |
| Tyson Foods, Inc. — Class A | | | 79,115 | | | | 2,237,372 | |
| McCormick & Company, Inc. | | | 31,639 | | | | 2,047,043 | |
| Unilever N.V. — Class Y | | | 43,541 | | | | 1,642,367 | |
| BRF S.A. ADR | | | 66,380 | | | | 1,628,301 | |
| Flowers Foods, Inc. | | | 70,092 | | | | 1,502,772 | |
| Pilgrim’s Pride Corp.* | | | 88,200 | | | | 1,480,878 | |
| Hillshire Brands Co. | | | 45,340 | | | | 1,393,752 | |
| Hain Celestial Group, Inc.* | | | 17,580 | | | | 1,355,770 | |
| WhiteWave Foods Co. — Class A* | | | 66,900 | | | | 1,335,993 | |
| TreeHouse Foods, Inc.* | | | 16,801 | | | | 1,122,811 | |
| Dean Foods Co.* | | | 50,640 | | | | 977,352 | |
| Sanderson Farms, Inc. | | | 13,500 | | | | 880,740 | |
| Total Packaged Foods & Meats | | | | | | | 52,489,125 | |
| HOUSEHOLD PRODUCTS - 15.1% | | | | | | | | |
| Procter & Gamble Co. | | | 134,260 | | | | 10,148,712 | |
| Colgate-Palmolive Co. | | | 89,349 | | | | 5,298,396 | |
| Kimberly-Clark Corp. | | | 45,522 | | | | 4,289,083 | |
| Clorox Co. | | | 28,967 | | | | 2,367,183 | |
| Church & Dwight Company, Inc. | | | 33,666 | | | | 2,021,643 | |
| Energizer Holdings, Inc. | | | 18,565 | | | | 1,692,200 | |
| Spectrum Brands Holdings, Inc. | | | 20,600 | | | | 1,356,304 | |
| Total Household Products | | | | | | | 27,173,521 | |
| SOFT DRINKS - 14.2% | | | | | | | | |
| Coca-Cola Co. | | | 244,026 | | | | 9,243,705 | |
| PepsiCo, Inc. | | | 99,637 | | | | 7,921,142 | |
| Coca-Cola Enterprises, Inc. | | | 57,994 | | | | 2,331,939 | |
| Dr Pepper Snapple Group, Inc. | | | 48,301 | | | | 2,164,851 | |
| Monster Beverage Corp.* | | | 39,753 | | | | 2,077,094 | |
| Fomento Economico Mexicano SAB de CV ADR | | | 17,293 | | | | 1,678,977 | |
| Total Soft Drinks | | | | | | | 25,417,708 | |
| TOBACCO - 12.0% | | | | | | | | |
| Philip Morris International, Inc. | | | 95,897 | | | | 8,303,721 | |
| Altria Group, Inc. | | | 170,800 | | | | 5,866,980 | |
| Reynolds American, Inc. | | | 74,933 | | | | 3,655,232 | |
| Lorillard, Inc. | | | 65,531 | | | | 2,934,478 | |
| Universal Corp. | | | 15,300 | | | | 779,229 | |
| Total Tobacco | | | | | | | 21,539,640 | |
| FOOD RETAIL - 7.3% | | | | | | | | |
| Whole Foods Market, Inc. | | | 57,514 | | | | 3,364,568 | |
| Kroger Co. | | | 80,053 | | | | 3,229,338 | |
| Safeway, Inc. | | | 59,545 | | | | 1,904,845 | |
| Casey’s General Stores, Inc. | | | 16,623 | | | | 1,221,791 | |
| Harris Teeter Supermarkets, Inc. | | | 23,266 | | | | 1,144,455 | |
| Fresh Market, Inc.* | | | 23,520 | | | | 1,112,731 | |
| SUPERVALU, Inc.* | | | 129,482 | | | | 1,065,637 | |
| Total Food Retail | | | | | | | 13,043,365 | |
| PERSONAL PRODUCTS - 5.7% | | | | | | | | |
| Estee Lauder Companies, Inc. — Class A | | | 52,956 | | | | 3,701,624 | |
| Herbalife Ltd.1 | | | 38,054 | | | | 2,655,028 | |
| Avon Products, Inc. | | | 101,902 | | | | 2,099,181 | |
| Nu Skin Enterprises, Inc. — Class A | | | 18,230 | | | | 1,745,340 | |
| Total Personal Products | | | | | | | 10,201,173 | |
| DISTILLERS & VINTNERS - 5.1% | | | | | | | | |
| Brown-Forman Corp. — Class B | | | 39,380 | | | | 2,682,959 | |
| Constellation Brands, Inc. — Class A* | | | 41,444 | | | | 2,378,886 | |
| Beam, Inc. | | | 35,970 | | | | 2,325,461 | |
| Diageo plc ADR | | | 13,300 | | | | 1,690,164 | |
| Total Distillers & Vintners | | | | | | | 9,077,470 | |
| AGRICULTURAL PRODUCTS - 4.9% | | | | | | | | |
| Archer-Daniels-Midland Co. | | | 96,603 | | | | 3,558,855 | |
| Bunge Ltd. | | | 31,596 | | | | 2,398,452 | |
| Ingredion, Inc. | | | 24,274 | | | | 1,606,211 | |
| Darling International, Inc.* | | | 54,344 | | | | 1,149,919 | |
| Total Agricultural Products | | | | | | | 8,713,437 | |
| BREWERS - 3.9% | | | | | | | | |
| Cia de Bebidas das Americas ADR | | | 63,180 | | | | 2,422,954 | |
| Anheuser-Busch InBev N.V. ADR | | | 23,512 | | | | 2,332,390 | |
| Molson Coors Brewing Co. — Class B | | | 42,917 | | | | 2,151,429 | |
| Total Brewers | | | | | | | 6,906,773 | |
| FOOD DISTRIBUTORS - 2.4% | | | | | | | | |
| Sysco Corp. | | | 98,105 | | | | 3,122,682 | |
| United Natural Foods, Inc.* | | | 18,730 | | | | 1,259,031 | |
| Total Food Distributors | | | | | | | 4,381,713 | |
| Total Common Stocks | | | | | | | | |
| (Cost $132,356,793) | | | | | | | 178,943,925 | |
| 30 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| CONSUMER PRODUCTS FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| SECURITIES LENDING COLLATERAL††,2 - 1.0% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | $ | 945,926 | | | $ | 945,926 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 883,268 | | | | 883,268 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $1,829,194) | | | | | | | 1,829,194 | |
| Total Investments - 100.8% | | | | | | | | |
| (Cost $134,185,987) | | | | | | $ | 180,773,119 | |
| Other Assets & Liabilities, net - (0.8)% | | | | | | | (1,507,740 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 179,265,379 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 31 |
| CONSUMER PRODUCTS FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $1,829,718 of | | | | |
| securities loaned | | | | |
| (cost $132,356,793) | | $ | 178,943,925 | |
| Repurchase agreements, at value | | | | |
| (cost $1,829,194) | | | 1,829,194 | |
| Total investments | | | | |
| (cost $134,185,987) | | | 180,773,119 | |
| Cash | | | 808,399 | |
| Receivables: | | | | |
| Fund shares sold | | | 3,248,864 | |
| Dividends | | | 466,525 | |
| Interest | | | 2,289 | |
| Total assets | | | 185,299,196 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 2,647,730 | |
| Upon return of securities loaned | | | 1,829,194 | |
| Securities purchased | | | 1,249,262 | |
| Management fees | | | 114,576 | |
| Transfer agent and administrative fees | | | 33,699 | |
| Distribution and service fees | | | 23,476 | |
| Portfolio accounting fees | | | 13,479 | |
| Miscellaneous | | | 122,401 | |
| Total liabilities | | | 6,033,817 | |
| Net assets | | $ | 179,265,379 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 130,207,021 | |
| Undistributed net investment income | | | 2,426,086 | |
| Accumulated net realized gain on investments | | | 45,140 | |
| Net unrealized appreciation on investments | | | 46,587,132 | |
| Net assets | | $ | 179,265,379 | |
| Investor Class: | | | | |
| Net assets | | $ | 118,856,397 | |
| Capital shares outstanding | | | 2,391,153 | |
| Net asset value per share | | $ | 49.71 | |
| Advisor Class: | | | | |
| Net assets | | $ | 25,507,703 | |
| Capital shares outstanding | | | 560,556 | |
| Net asset value per share | | $ | 45.50 | |
| A-Class: | | | | |
| Net assets | | $ | 22,014,790 | |
| Capital shares outstanding | | | 471,004 | |
| Net asset value per share | | $ | 46.74 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 49.07 | |
| C-Class: | | | | |
| Net assets | | $ | 12,886,489 | |
| Capital shares outstanding | | | 301,379 | |
| Net asset value per share | | $ | 42.76 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $19,422) | | $ | 2,160,133 | |
| Income from securities lending, net | | | 26,291 | |
| Interest | | | 81 | |
| Total investment income | | | 2,186,505 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 828,327 | |
| Transfer agent and administrative fees | | | 243,625 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 51,085 | |
| A-Class | | | 28,847 | |
| C-Class | | | 64,602 | |
| Portfolio accounting fees | | | 97,449 | |
| Custodian fees | | | 10,860 | |
| Trustees’ fees* | | | 9,501 | |
| Line of credit fees | | | 145 | |
| Miscellaneous | | | 146,081 | |
| Total expenses | | | 1,480,522 | |
| Net investment income | | | 705,983 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 12,606,704 | |
| Net realized gain | | | 12,606,704 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (5,573,338 | ) |
| Net change in unrealized appreciation (depreciation) | | | (5,573,338 | ) |
| Net realized and unrealized gain | | | 7,033,366 | |
| Net increase in net assets resulting from operations | | $ | 7,739,349 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 32 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| CONSUMER PRODUCTS FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 705,983 | | | $ | 2,160,769 | |
| Net realized gain on investments | | | 12,606,704 | | | | 4,310,827 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (5,573,338 | ) | | | 18,511,373 | |
| Net increase in net assets resulting from operations | | | 7,739,349 | | | | 24,982,969 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (316,169 | ) |
| Advisor Class | | | — | | | | (40,225 | ) |
| A-Class | | | — | | | | (51,236 | ) |
| C-Class | | | — | | | | (33,036 | ) |
| Total distributions to shareholders | | | — | | | | (440,666 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 134,681,729 | | | | 400,842,592 | |
| Advisor Class | | | 21,785,693 | | | | 59,744,738 | |
| A-Class | | | 11,098,925 | | | | 11,183,601 | |
| C-Class | | | 14,968,822 | | | | 40,893,529 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 309,479 | |
| Advisor Class | | | — | | | | 40,024 | |
| A-Class | | | — | | | | 37,747 | |
| C-Class | | | — | | | | 31,073 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (204,278,981 | ) | | | (392,919,700 | ) |
| Advisor Class | | | (6,509,331 | ) | | | (67,940,005 | ) |
| A-Class | | | (11,432,452 | ) | | | (13,768,084 | ) |
| C-Class | | | (14,184,095 | ) | | | (40,741,804 | ) |
| Net decrease from capital share transactions | | | (53,869,690 | ) | | | (2,286,810 | ) |
| Net increase (decrease) in net assets | | | (46,130,341 | ) | | | 22,255,493 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 225,395,720 | | | | 203,140,227 | |
| End of period | | $ | 179,265,379 | | | $ | 225,395,720 | |
| Undistributed net investment income at end of period | | $ | 2,426,086 | | | $ | 1,720,103 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 2,720,528 | | | | 9,597,574 | |
| Advisor Class | | | 474,660 | | | | 1,572,679 | |
| A-Class | | | 239,525 | | | | 283,087 | |
| C-Class | | | 351,944 | | | | 1,143,508 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 7,460 | |
| Advisor Class | | | — | | | | 1,050 | |
| A-Class | | | — | | | | 966 | |
| C-Class | | | — | | | | 864 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (4,136,171 | ) | | | (9,666,092 | ) |
| Advisor Class | | | (145,453 | ) | | | (1,800,187 | ) |
| A-Class | | | (248,618 | ) | | | (358,129 | ) |
| C-Class | | | (333,690 | ) | | | (1,137,871 | ) |
| Net decrease in shares | | | (1,077,275 | ) | | | (355,091 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 33 |
| CONSUMER PRODUCTS FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 47.79 | | | $ | 40.19 | | | $ | 36.37 | | | $ | 37.83 | | | $ | 26.39 | | | $ | 36.40 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .21 | | | | .57 | | | | .49 | | | | .69 | | | | .50 | | | | .55 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.71 | | | | 7.14 | | | | 4.82 | | | | 4.40 | | | | 11.04 | | | | (10.35 | ) |
| Total from investment operations | | | 1.92 | | | | 7.71 | | | | 5.31 | | | | 5.09 | | | | 11.54 | | | | (9.80 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.11 | ) | | | (.57 | ) | | | (.82 | ) | | | (.10 | ) | | | (.21 | ) |
| Net realized gains | | | — | | | | — | | | | (.92 | ) | | | (5.73 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | (.11 | ) | | | (1.49 | ) | | | (6.55 | ) | | | (.10 | ) | | | (.21 | ) |
| Net asset value, end of period | | $ | 49.71 | | | $ | 47.79 | | | $ | 40.19 | | | $ | 36.37 | | | $ | 37.83 | | | $ | 26.39 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 4.02 | % | | | 19.26 | % | | | 15.06 | % | | | 14.81 | % | | | 43.75 | % | | | (26.96 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 118,856 | | | $ | 181,945 | | | $ | 155,432 | | | $ | 57,876 | | | $ | 182,915 | | | $ | 14,703 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.84 | % | | | 1.38 | % | | | 1.29 | % | | | 1.84 | % | | | 1.46 | % | | | 1.81 | % |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.35 | % | | | 1.38 | % | | | 1.37 | % | | | 1.38 | % |
| Portfolio turnover rate | | | 76 | % | | | 230 | % | | | 402 | % | | | 400 | % | | | 200 | % | | | 445 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 43.87 | | | $ | 37.08 | | | $ | 33.84 | | | $ | 35.77 | | | $ | 25.09 | | | $ | 34.78 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .12 | | | | .35 | | | | .24 | | | | .62 | | | | .35 | | | | .34 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.51 | | | | 6.55 | | | | 4.49 | | | | 4.00 | | | | 10.43 | | | | (9.82 | ) |
| Total from investment operations | | | 1.63 | | | | 6.90 | | | | 4.73 | | | | 4.62 | | | | 10.78 | | | | (9.48 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.11 | ) | | | (.57 | ) | | | (.82 | ) | | | (.10 | ) | | | (.21 | ) |
| Net realized gains | | | — | | | | — | | | | (.92 | ) | | | (5.73 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | (.11 | ) | | | (1.49 | ) | | | (6.55 | ) | | | (.10 | ) | | | (.21 | ) |
| Net asset value, end of period | | $ | 45.50 | | | $ | 43.87 | | | $ | 37.08 | | | $ | 33.84 | | | $ | 35.77 | | | $ | 25.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 3.72 | % | | | 18.66 | % | | | 14.49 | % | | | 14.32 | % | | | 42.99 | % | | | (27.29 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 25,508 | | | $ | 10,148 | | | $ | 16,975 | | | $ | 3,475 | | | $ | 5,824 | | | $ | 11,113 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.51 | % | | | 0.93 | % | | | 0.68 | % | | | 1.78 | % | | | 1.17 | % | | | 1.18 | % |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.84 | % | | | 1.88 | % | | | 1.88 | % | | | 1.87 | % |
| Portfolio turnover rate | | | 76 | % | | | 230 | % | | | 402 | % | | | 400 | % | | | 200 | % | | | 445 | % |
| 34 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| CONSUMER PRODUCTS FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 45.00 | | | $ | 37.93 | | | $ | 34.49 | | | $ | 36.26 | | | $ | 25.37 | | | $ | 35.09 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .15 | | | | .44 | | | | .40 | | | | .41 | | | | .55 | | | | .42 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.59 | | | | 6.74 | | | | 4.53 | | | | 4.37 | | | | 10.44 | | | | (9.93 | ) |
| Total from investment operations | | | 1.74 | | | | 7.18 | | | | 4.93 | | | | 4.78 | | | | 10.99 | | | | (9.51 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.11 | ) | | | (.57 | ) | | | (.82 | ) | | | (.10 | ) | | | (.21 | ) |
| Net realized gains | | | — | | | | — | | | | (.92 | ) | | | (5.73 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | (.11 | ) | | | (1.49 | ) | | | (6.55 | ) | | | (.10 | ) | | | (.21 | ) |
| Net asset value, end of period | | $ | 46.74 | | | $ | 45.00 | | | $ | 37.93 | | | $ | 34.49 | | | $ | 36.26 | | | $ | 25.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 3.87 | % | | | 18.98 | % | | | 14.80 | % | | | 14.58 | % | | | 43.34 | % | | | (27.14 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 22,015 | | | $ | 21,604 | | | $ | 21,021 | | | $ | 5,033 | | | $ | 21,277 | | | $ | 2,898 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.66 | % | | | 1.12 | % | | | 1.11 | % | | | 1.14 | % | | | 1.72 | % | | | 1.41 | % |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.60 | % | | | 1.63 | % | | | 1.63 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 76 | % | | | 230 | % | | | 402 | % | | | 400 | % | | | 200 | % | | | 445 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 41.32 | | | $ | 35.11 | | | $ | 32.28 | | | $ | 34.57 | | | $ | 24.36 | | | $ | 33.95 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.01 | ) | | | .13 | | | | .12 | | | | .30 | | | | .24 | | | | .19 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.45 | | | | 6.19 | | | | 4.20 | | | | 3.96 | | | | 10.07 | | | | (9.57 | ) |
| Total from investment operations | | | 1.44 | | | | 6.32 | | | | 4.32 | | | | 4.26 | | | | 10.31 | | | | (9.38 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.11 | ) | | | (.57 | ) | | | (.82 | ) | | | (.10 | ) | | | (.21 | ) |
| Net realized gains | | | — | | | | — | | | | (.92 | ) | | | (5.73 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | (.11 | ) | | | (1.49 | ) | | | (6.55 | ) | | | (.10 | ) | | | (.21 | ) |
| Net asset value, end of period | | $ | 42.76 | | | $ | 41.32 | | | $ | 35.11 | | | $ | 32.28 | | | $ | 34.57 | | | $ | 24.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 3.49 | % | | | 18.06 | % | | | 13.91 | % | | | 13.78 | % | | | 42.35 | % | | | (27.67 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 12,886 | | | $ | 11,699 | | | $ | 9,712 | | | $ | 3,484 | | | $ | 4,194 | | | $ | 3,067 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.05 | %) | | | 0.37 | % | | | 0.36 | % | | | 0.90 | % | | | 0.77 | % | | | 0.65 | % |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.35 | % | | | 2.38 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 76 | % | | | 230 | % | | | 402 | % | | | 400 | % | | | 200 | % | | | 445 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 35 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
ELECTRONICS FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the electronics sector, including semiconductor manufacturers and distributors, and makers and vendors of other electronic components and devices (“Electronics Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 2, 1998 |
| A-Class | September 1, 2004 |
| C-Class | March 26, 2001 |
| Ten Largest Holdings (% of Total Net Assets) |
| Intel Corp. | | | 8.9 | % |
| Texas Instruments, Inc. | | | 5.7 | % |
| Applied Materials, Inc. | | | 4.2 | % |
| Micron Technology, Inc. | | | 3.6 | % |
| Analog Devices, Inc. | | | 3.3 | % |
| Broadcom Corp. — Class A | | | 3.2 | % |
| Xilinx, Inc. | | | 3.0 | % |
| Altera Corp. | | | 3.0 | % |
| Taiwan Semiconductor Manufacturing Company Ltd. ADR | | | 2.8 | % |
| KLA-Tencor Corp. | | | 2.7 | % |
| Top Ten Total | | | 40.4 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 36 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| ELECTRONICS FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.9% | | | | | | | | |
| | | | | | | | | |
| SEMICONDUCTORS - 84.1% | | | | | | | | |
| Intel Corp. | | | 36,087 | | | $ | 827,113 | |
| Texas Instruments, Inc. | | | 13,209 | | | | 531,926 | |
| Micron Technology, Inc.* | | | 19,429 | | | | 339,425 | |
| Analog Devices, Inc. | | | 6,485 | | | | 305,119 | |
| Broadcom Corp. — Class A | | | 11,545 | | | | 300,285 | |
| Xilinx, Inc. | | | 6,033 | | | | 282,706 | |
| Altera Corp. | | | 7,536 | | | | 280,038 | |
| Taiwan Semiconductor Manufacturing Company Ltd. ADR | | | 15,645 | | | | 265,339 | |
| Linear Technology Corp. | | | 6,156 | | | | 244,147 | |
| NVIDIA Corp. | | | 15,381 | | | | 239,328 | |
| Maxim Integrated Products, Inc. | | | 7,905 | | | | 235,569 | |
| Microchip Technology, Inc. | | | 5,610 | | | | 226,027 | |
| Cree, Inc.* | | | 3,545 | | | | 213,374 | |
| Avago Technologies Ltd. | | | 4,312 | | | | 185,933 | |
| Skyworks Solutions, Inc.* | | | 6,927 | | | | 172,067 | |
| LSI Corp. | | | 21,336 | | | | 166,848 | |
| Freescale Semiconductor Ltd.* | | | 9,949 | | | | 165,651 | |
| NXP Semiconductor N.V.* | | | 4,392 | | | | 163,426 | |
| Marvell Technology Group Ltd. | | | 14,061 | | | | 161,702 | |
| Trina Solar Ltd. ADR* | | | 10,410 | | | | 160,939 | |
| First Solar, Inc.* | | | 3,950 | | | | 158,830 | |
| ARM Holdings plc ADR | | | 3,241 | | | | 155,957 | |
| ON Semiconductor Corp.* | | | 20,056 | | | | 146,409 | |
| SunPower Corp. — Class A* | | | 5,510 | | | | 144,142 | |
| Atmel Corp.* | | | 18,983 | | | | 141,234 | |
| Canadian Solar, Inc.* | | | 8,041 | | | | 136,617 | |
| Mellanox Technologies Ltd.* | | | 3,466 | | | | 131,569 | |
| Microsemi Corp.* | | | 4,961 | | | | 120,304 | |
| Cavium, Inc.* | | | 2,892 | | | | 119,150 | |
| Himax Technologies, Inc. ADR | | | 11,875 | | | | 118,750 | |
| Spreadtrum Communications, Inc. ADR | | | 3,891 | | | | 118,520 | |
| Semtech Corp.* | | | 3,693 | | | | 110,753 | |
| International Rectifier Corp.* | | | 4,313 | | | | 106,833 | |
| Fairchild Semiconductor International, Inc. — Class A* | | | 7,556 | | | | 104,953 | |
| RF Micro Devices, Inc.* | | | 18,297 | | | | 103,195 | |
| Intersil Corp. — Class A | | | 8,796 | | | | 98,779 | |
| Cirrus Logic, Inc.* | | | 4,259 | | | | 96,594 | |
| TriQuint Semiconductor, Inc.* | | | 11,306 | | | | 91,918 | |
| Cypress Semiconductor Corp. | | | 9,236 | | | | 86,264 | |
| OmniVision Technologies, Inc.* | | | 4,906 | | | | 75,111 | |
| Total Semiconductors | | | | | | | 7,832,844 | |
| SEMICONDUCTOR EQUIPMENT - 15.8% | | | | | | | | |
| Applied Materials, Inc. | | | 22,123 | | | | 388,036 | |
| KLA-Tencor Corp. | | | 4,156 | | | | 252,892 | |
| Lam Research Corp.* | | | 4,679 | | | | 239,518 | |
| ASML Holding N.V. — Class G | | | 1,681 | | | | 166,016 | |
| Teradyne, Inc.* | | | 8,750 | | | | 144,550 | |
| SunEdison, Inc.* | | | 13,578 | | | | 108,217 | |
| Veeco Instruments, Inc.* | | | 2,711 | | | | 100,931 | |
| GT Advanced Technologies, Inc.* | | | 8,817 | | | | 75,033 | |
| Total Semiconductor Equipment | | | | | | | 1,475,193 | |
| Total Common Stocks | | | | | | | | |
| (Cost $7,643,916) | | | | | | | 9,308,037 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENT††,1 - 0.4% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 37,343 | | | | 37,343 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $37,343) | | | | | | | 37,343 | |
| Total Investments - 100.3% | | | | | | | | |
| (Cost $7,681,259) | | | | | | $ | 9,345,380 | |
| Other Assets & Liabilities, net - (0.3)% | | | | | | | (28,363 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 9,317,017 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreement — See Note 5. |
ADR — American Depositary Receipt
plc — Public Limited Company
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 37 |
| ELECTRONICS FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $7,643,916) | | $ | 9,308,037 | |
| Repurchase agreements, at value | | | | |
| (cost $37,343) | | | 37,343 | |
| Total investments | | | | |
| (cost $7,681,259) | | | 9,345,380 | |
| Cash | | | 478 | |
| Receivables: | | | | |
| Fund shares sold | | | 3,189,349 | |
| Dividends | | | 965 | |
| Total assets | | | 12,536,172 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Securities purchased | | | 3,150,345 | |
| Fund shares redeemed | | | 58,545 | |
| Management fees | | | 2,731 | |
| Transfer agent and administrative fees | | | 803 | |
| Distribution and service fees | | | 539 | |
| Portfolio accounting fees | | | 321 | |
| Miscellaneous | | | 5,871 | |
| Total liabilities | | | 3,219,155 | |
| Net assets | | $ | 9,317,017 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 28,694,900 | |
| Undistributed net investment income | | | 7,067 | |
| Accumulated net realized loss on investments | | | (21,049,071 | ) |
| Net unrealized appreciation on investments | | | 1,664,121 | |
| Net assets | | $ | 9,317,017 | |
| Investor class: | | | | |
| Net assets | | $ | 5,476,811 | |
| Capital shares outstanding | | | 93,911 | |
| Net asset value per share | | $ | 58.32 | |
| Advisor Class: | | | | |
| Net assets | | $ | 2,649,233 | |
| Capital shares outstanding | | | 49,105 | |
| Net asset value per share | | $ | 53.95 | |
| A-Class: | | | | |
| Net assets | | $ | 719,815 | |
| Capital shares outstanding | | | 13,063 | |
| Net asset value per share | | $ | 55.10 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 57.85 | |
| C-Class: | | | | |
| Net assets | | $ | 471,158 | |
| Capital shares outstanding | | | 9,134 | |
| Net asset value per share | | $ | 51.58 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $123) | | $ | 67,433 | |
| Income from securities lending, net | | | 272 | |
| Interest | | | 2 | |
| Total investment income | | | 67,707 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 35,402 | |
| Transfer agent and administrative fees | | | 10,412 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 1,638 | |
| A-Class | | | 2,690 | |
| C-Class | | | 2,224 | |
| Portfolio accounting fees | | | 4,165 | |
| Custodian fees | | | 478 | |
| Trustees’ fees* | | | 339 | |
| Line of credit fees | | | 15 | |
| Miscellaneous | | | 6,256 | |
| Total expenses | | | 63,619 | |
| Net investment income | | | 4,088 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 567,381 | |
| Net realized gain | | | 567,381 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (289,852 | ) |
| Net change in unrealized appreciation (depreciation) | | | (289,852 | ) |
| Net realized and unrealized gain | | | 277,529 | |
| Net increase in net assets resulting from operations | | $ | 281,617 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 38 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 4,088 | | | $ | 17,513 | |
| Net realized gain on investments | | | 567,381 | | | | 422,790 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (289,852 | ) | | | (749,275 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 281,617 | | | | (308,972 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 49,152,055 | | | | 69,160,019 | |
| Advisor Class | | | 10,726,027 | | | | 21,228,472 | |
| A-Class | | | 5,472,983 | | | | 3,492,941 | |
| C-Class | | | 9,850,116 | | | | 27,559,976 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (46,602,974 | ) | | | (71,451,834 | ) |
| Advisor Class | | | (9,381,476 | ) | | | (21,186,488 | ) |
| A-Class | | | (5,254,548 | ) | | | (3,819,431 | ) |
| C-Class | | | (10,122,724 | ) | | | (27,124,726 | ) |
| Net increase (decrease) from capital share transactions | | | 3,839,459 | | | | (2,141,071 | ) |
| Net increase (decrease) in net assets | | | 4,121,076 | | | | (2,450,043 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 5,195,941 | | | | 7,645,984 | |
| End of period | | $ | 9,317,017 | | | $ | 5,195,941 | |
| Undistributed net investment income at end of period | | $ | 7,067 | | | $ | 2,979 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 890,827 | | | | 1,407,308 | |
| Advisor Class | | | 205,758 | | | | 471,632 | |
| A-Class | | | 104,748 | | | | 75,195 | |
| C-Class | | | 202,830 | | | | 633,511 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (853,369 | ) | | | (1,449,849 | ) |
| Advisor Class | | | (183,308 | ) | | | (469,703 | ) |
| A-Class | | | (97,743 | ) | | | (81,755 | ) |
| C-Class | | | (208,105 | ) | | | (624,407 | ) |
| Net increase (decrease) in shares | | | 61,638 | | | | (38,068 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 39 |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010e | | | 2009e | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 52.11 | | | $ | 55.09 | | | $ | 60.57 | | | $ | 52.33 | | | $ | 32.76 | | | $ | 50.30 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .07 | | | | .22 | | | | (.12 | ) | | | (.13 | ) | | | (.02 | ) | | | (—)c | |
| Net gain (loss) on investments (realized and unrealized) | | | 6.14 | | | | (3.20 | ) | | | (5.36 | ) | | | 8.37 | | | | 19.59 | | | | (17.54 | ) |
| Total from investment operations | | | 6.21 | | | | (2.98 | ) | | | (5.48 | ) | | | 8.24 | | | | 19.57 | | | | (17.54 | ) |
| Net asset value, end of period | | $ | 58.32 | | | $ | 52.11 | | | $ | 55.09 | | | $ | 60.57 | | | $ | 52.33 | | | $ | 32.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.92 | % | | | (5.41 | %) | | | (9.05 | %) | | | 15.75 | % | | | 59.74 | % | | | (34.89 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,477 | | | $ | 2,942 | | | $ | 5,453 | | | $ | 6,976 | | | $ | 15,988 | | | $ | 106,703 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.24 | % | | | 0.45 | % | | | (0.22 | %) | | | (0.23 | %) | | | (0.06 | %) | | | (0.03 | %) |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.35 | % | | | 1.39 | % | | | 1.38 | % | | | 1.34 | % |
| Portfolio turnover rate | | | 637 | % | | | 1,640 | % | | | 1,329 | % | | | 1,171 | % | | | 592 | % | | | 408 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010e | | | 2009e | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 48.33 | | | $ | 51.40 | | | $ | 56.77 | | | $ | 49.26 | | | $ | 31.01 | | | $ | 47.80 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .17 | | | | (.12 | ) | | | (.34 | ) | | | (.41 | ) | | | (.16 | ) | | | (.10 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.45 | | | | (2.95 | ) | | | (5.03 | ) | | | 7.92 | | | | 18.41 | | | | (16.69 | ) |
| Total from investment operations | | | 5.62 | | | | (3.07 | ) | | | (5.37 | ) | | | 7.51 | | | | 18.25 | | | | (16.79 | ) |
| Net asset value, end of period | | $ | 53.95 | | | $ | 48.33 | | | $ | 51.40 | | | $ | 56.77 | | | $ | 49.26 | | | $ | 31.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.63 | % | | | (5.97 | %) | | | (9.46 | %) | | | 15.25 | % | | | 58.85 | % | | | (35.15 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,649 | | | $ | 1,288 | | | $ | 1,271 | | | $ | 3,081 | | | $ | 1,634 | | | $ | 3,152 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.65 | % | | | (0.26 | %) | | | (0.67 | %) | | | (0.79 | %) | | | (0.39 | %) | | | (0.29 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.86 | % | | | 1.89 | % | | | 1.87 | % | | | 1.86 | % |
| Portfolio turnover rate | | | 637 | % | | | 1,640 | % | | | 1,329 | % | | | 1,171 | % | | | 592 | % | | | 408 | % |
| 40 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010e | | | 2009e | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 49.29 | | | $ | 52.23 | | | $ | 57.59 | | | $ | 49.88 | | | $ | 31.31 | | | $ | 48.25 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.06 | ) | | | .24 | | | | (.19 | ) | | | (.21 | ) | | | (.14 | ) | | | (.10 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.87 | | | | (3.18 | ) | | | (5.17 | ) | | | 7.92 | | | | 18.71 | | | | (16.84 | ) |
| Total from investment operations | | | 5.81 | | | | (2.94 | ) | | | (5.36 | ) | | | 7.71 | | | | 18.57 | | | | (16.94 | ) |
| Net asset value, end of period | | $ | 55.10 | | | $ | 49.29 | | | $ | 52.23 | | | $ | 57.59 | | | $ | 49.88 | | | $ | 31.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.79 | % | | | (5.63 | %) | | | (9.31 | %) | | | 15.46 | % | | | 59.31 | % | | | (35.13 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 720 | | | $ | 299 | | | $ | 659 | | | $ | 1,619 | | | $ | 1,329 | | | $ | 42 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.24 | %) | | | 0.51 | % | | | (0.36 | %) | | | (0.43 | %) | | | (0.31 | %) | | | (0.26 | %) |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.62 | % | | | 1.64 | % | | | 1.62 | % | | | 1.60 | % |
| Portfolio turnover rate | | | 637 | % | | | 1,640 | % | | | 1,329 | % | | | 1,171 | % | | | 592 | % | | | 408 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010e | | | 2009e | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 46.32 | | | $ | 49.50 | | | $ | 55.03 | | | $ | 47.90 | | | $ | 30.28 | | | $ | 46.90 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.18 | ) | | | (.18 | ) | | | (.70 | ) | | | (.65 | ) | | | (.51 | ) | | | (.30 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.44 | | | | (3.00 | ) | | | (4.83 | ) | | | 7.78 | | | | 18.13 | | | | (16.32 | ) |
| Total from investment operations | | | 5.26 | | | | (3.18 | ) | | | (5.53 | ) | | | 7.13 | | | | 17.62 | | | | (16.62 | ) |
| Net asset value, end of period | | $ | 51.58 | | | $ | 46.32 | | | $ | 49.50 | | | $ | 55.03 | | | $ | 47.90 | | | $ | 30.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.36 | % | | | (6.44 | %) | | | (10.01 | %) | | | 14.86 | % | | | 58.19 | % | | | (35.39 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 471 | | | $ | 667 | | | $ | 263 | | | $ | 1,246 | | | $ | 3,342 | | | $ | 460 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.74 | %) | | | (0.41 | %) | | | (1.42 | %) | | | (1.31 | %) | | | (1.21 | %) | | | (0.74 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.36 | % | | | 2.39 | % | | | 2.38 | % | | | 2.42 | % |
| Portfolio turnover rate | | | 637 | % | | | 1,640 | % | | | 1,329 | % | | | 1,171 | % | | | 592 | % | | | 408 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
| c | Net investment loss 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 the period March 31, 2008 – April 19, 2009, have been restated to reflect a 1:5 reverse share split effective April 20, 2009. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 41 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
ENERGY FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies involved in the energy field, including the exploration, production and development of oil, gas, coal and alternative sources of energy (“Energy Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: |
| Investor Class | April 21, 1998 |
| Advisor Class | May 5, 1998 |
| A-Class | September 1, 2004 |
| C-Class | April 19, 2001 |
| Ten Largest Holdings (% of Total Net Assets) |
| Exxon Mobil Corp. | | | 6.2 | % |
| Chevron Corp. | | | 4.9 | % |
| Schlumberger Ltd. | | | 3.5 | % |
| ConocoPhillips | | | 2.9 | % |
| Occidental Petroleum Corp. | | | 2.8 | % |
| Anadarko Petroleum Corp. | | | 2.2 | % |
| EOG Resources, Inc. | | | 2.2 | % |
| Halliburton Co. | | | 2.1 | % |
| Kinder Morgan, Inc. | | | 1.9 | % |
| Phillips 66 | | | 1.9 | % |
| Top Ten Total | | | 30.6 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 42 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| ENERGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 100.6% | | | | | | | | |
| | | | | | | | | |
| OIL & GAS EXPLORATION & PRODUCTION - 38.5% | | | | | | | | |
| ConocoPhillips | | | 24,449 | | | $ | 1,699,449 | |
| Anadarko Petroleum Corp. | | | 13,841 | | | | 1,287,074 | |
| EOG Resources, Inc. | | | 7,463 | | | | 1,263,337 | |
| Apache Corp. | | | 12,380 | | | | 1,054,033 | |
| Pioneer Natural Resources Co. | | | 5,125 | | | | 967,600 | |
| Noble Energy, Inc. | | | 13,676 | | | | 916,429 | |
| Marathon Oil Corp. | | | 26,147 | | | | 912,007 | |
| Devon Energy Corp. | | | 15,461 | | | | 893,027 | |
| Continental Resources, Inc.* | | | 8,011 | | | | 859,260 | |
| Chesapeake Energy Corp. | | | 29,645 | | | | 767,213 | |
| Cabot Oil & Gas Corp. | | | 19,790 | | | | 738,563 | |
| Southwestern Energy Co.* | | | 18,665 | | | | 679,033 | |
| EQT Corp. | | | 7,410 | | | | 657,415 | |
| Range Resources Corp. | | | 8,556 | | | | 649,315 | |
| Concho Resources, Inc.* | | | 5,921 | | | | 644,264 | |
| Murphy Oil Corp. | | | 10,388 | | | | 626,604 | |
| Cobalt International Energy, Inc.* | | | 23,930 | | | | 594,900 | |
| Cimarex Energy Co. | | | 5,735 | | | | 552,854 | |
| Encana Corp. | | | 30,114 | | | | 521,876 | |
| Whiting Petroleum Corp.* | | | 8,536 | | | | 510,880 | |
| Denbury Resources, Inc.* | | | 27,713 | | | | 510,196 | |
| Canadian Natural Resources Ltd. | | | 15,722 | | | | 494,300 | |
| Talisman Energy, Inc. | | | 41,998 | | | | 482,977 | |
| SM Energy Co. | | | 5,578 | | | | 430,566 | |
| Energen Corp. | | | 5,600 | | | | 427,784 | |
| Gulfport Energy Corp.* | | | 6,600 | | | | 424,644 | |
| Oasis Petroleum, Inc.* | | | 8,500 | | | | 417,605 | |
| QEP Resources, Inc. | | | 14,992 | | | | 415,128 | |
| WPX Energy, Inc.* | | | 19,367 | | | | 373,008 | |
| Newfield Exploration Co.* | | | 13,289 | | | | 363,720 | |
| Kodiak Oil & Gas Corp.* | | | 28,729 | | | | 346,472 | |
| Rosetta Resources, Inc.* | | | 6,100 | | | | 332,206 | |
| Ultra Petroleum Corp.* | | | 15,672 | | | | 322,373 | |
| SandRidge Energy, Inc.*,1 | | | 53,331 | | | | 312,520 | |
| Total Oil & Gas Exploration & Production | | | | | | | 22,448,632 | |
| | | | | | | | | |
| INTEGRATED OIL & GAS - 20.1% | | | | | | | | |
| Exxon Mobil Corp. | | | 41,561 | | | | 3,575,907 | |
| Chevron Corp. | | | 23,253 | | | | 2,825,240 | |
| Occidental Petroleum Corp. | | | 17,536 | | | | 1,640,317 | |
| Hess Corp. | | | 12,202 | | | | 943,703 | |
| Petroleo Brasileiro S.A. ADR | | | 51,782 | | | | 802,103 | |
| BP plc ADR | | | 17,056 | | | | 716,864 | |
| Suncor Energy, Inc. | | | 16,941 | | | | 606,149 | |
| Royal Dutch Shell plc ADR | | | 8,517 | | | | 559,397 | |
| Total Integrated Oil & Gas | | | | | | | 11,669,680 | |
| | | | | | | | | |
| OIL & GAS EQUIPMENT & SERVICES - 17.2% | | | | | | | | |
| Schlumberger Ltd. | | | 22,725 | | | | 2,007,981 | |
| Halliburton Co. | | | 25,493 | | | | 1,227,488 | |
| National Oilwell Varco, Inc. | | | 13,667 | | | | 1,067,529 | |
| Baker Hughes, Inc. | | | 17,547 | | | | 861,558 | |
| Cameron International Corp.* | | | 11,763 | | | | 686,606 | |
| FMC Technologies, Inc.* | | | 11,933 | | | | 661,327 | |
| Weatherford International Ltd.* | | | 36,795 | | | | 564,067 | |
| Oceaneering International, Inc. | | | 6,700 | | | | 544,308 | |
| Core Laboratories N.V. | | | 2,727 | | | | 461,436 | |
| Tenaris S.A. ADR | | | 9,805 | | | | 458,678 | |
| Oil States International, Inc.* | | | 4,190 | | | | 433,497 | |
| Dresser-Rand Group, Inc.* | | | 6,500 | | | | 405,600 | |
| Superior Energy Services, Inc.* | | | 14,799 | | | | 370,567 | |
| McDermott International, Inc.* | | | 33,400 | | | | 248,162 | |
| Total Oil & Gas Equipment & Services | | | | | | | 9,998,804 | |
| | | | | | | | | |
| OIL & GAS DRILLING - 8.2% | | | | | | | | |
| Noble Corp. | | | 18,887 | | | | 713,362 | |
| Ensco plc — Class A | | | 12,122 | | | | 651,558 | |
| Transocean Ltd. | | | 13,875 | | | | 617,438 | |
| Diamond Offshore Drilling, Inc. | | | 8,800 | | | | 548,416 | |
| Nabors Industries Ltd. | | | 32,200 | | | | 517,132 | |
| Helmerich & Payne, Inc. | | | 7,102 | | | | 489,683 | |
| Seadrill Ltd. | | | 10,853 | | | | 489,253 | |
| Rowan Companies plc — Class A* | | | 10,984 | | | | 403,332 | |
| Patterson-UTI Energy, Inc. | | | 14,734 | | | | 315,013 | |
| Total Oil & Gas Drilling | | | | | | | 4,745,187 | |
| | | | | | | | | |
| OIL & GAS STORAGE & TRANSPORTATION - 7.7% | | | | | | | | |
| Kinder Morgan, Inc. | | | 31,107 | | | | 1,106,475 | |
| Williams Companies, Inc. | | | 25,112 | | | | 913,072 | |
| Spectra Energy Corp. | | | 25,890 | | | | 886,215 | |
| Cheniere Energy, Inc.* | | | 16,611 | | | | 567,100 | |
| Kinder Morgan Management LLC* | | | 7,411 | | | | 555,529 | |
| Enbridge, Inc. | | | 10,800 | | | | 450,792 | |
| Total Oil & Gas Storage & Transportation | | | | | | | 4,479,183 | |
| | | | | | | | | |
| OIL & GAS REFINING & MARKETING - 7.0% | | | | | | | | |
| Phillips 66 | | | 19,072 | | | | 1,102,742 | |
| Marathon Petroleum Corp. | | | 13,236 | | | | 851,340 | |
| Valero Energy Corp. | | | 23,528 | | | | 803,481 | |
| HollyFrontier Corp. | | | 13,233 | | | | 557,242 | |
| Tesoro Corp. | | | 10,212 | | | | 449,124 | |
| Western Refining, Inc. | | | 9,840 | | | | 295,594 | |
| Total Oil & Gas Refining & Marketing | | | | | | | 4,059,523 | |
| | | | | | | | | |
| COAL & CONSUMABLE FUELS - 1.9% | | | | | | | | |
| CONSOL Energy, Inc. | | | 15,046 | | | | 506,297 | |
| Peabody Energy Corp. | | | 22,514 | | | | 388,367 | |
| Alpha Natural Resources, Inc.* | | | 33,712 | | | | 200,924 | |
| Total Coal & Consumable Fuels | | | | | | | 1,095,588 | |
| Total Common Stocks | | | | | | | | |
| (Cost $30,670,372) | | | | | | | 58,496,597 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 43 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| ENERGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.2% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 125,635 | | | $ | 125,635 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $125,635) | | | | | | | 125,635 | |
| SECURITIES LENDING COLLATERAL††,3 - 0.4% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 122,818 | | | | 122,818 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 114,682 | | | | 114,682 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $237,500) | | | | | | | 237,500 | |
| Total Investments - 101.2% | | | | | | | | |
| (Cost $31,033,507) | | | | | | $ | 58,859,732 | |
| Other Assets & Liabilities, net - (1.2)% | | | | | | | (725,428 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 58,134,304 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 44 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $222,680 of securities loaned | | | | |
| (cost $30,670,372) | | $ | 58,496,597 | |
| Repurchase agreements, at value | | | | |
| (cost $363,135) | | | 363,135 | |
| Total investments | | | | |
| (cost $31,033,507) | | | 58,859,732 | |
| Cash | | | 6,600 | |
| Receivables: | | | | |
| Fund shares sold | | | 1,967,281 | |
| Dividends | | | 18,563 | |
| Interest | | | 1,944 | |
| Total assets | | | 60,854,120 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Securities purchased | | | 1,550,236 | |
| Fund shares redeemed | | | 835,130 | |
| Upon return of securities loaned | | | 237,500 | |
| Management fees | | | 37,028 | |
| Transfer agent and administrative fees | | | 10,891 | |
| Distribution and service fees | | | 9,642 | |
| Portfolio accounting fees | | | 4,356 | |
| Miscellaneous | | | 35,033 | |
| Total liabilities | | | 2,719,816 | |
| Net Assets | | $ | 58,134,304 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 46,714,388 | |
| Undistributed net investment income | | | 115,543 | |
| Accumulated net realized loss on investments | | | (16,521,852 | ) |
| Net unrealized appreciation on investments | | | 27,826,225 | |
| Net assets | | $ | 58,134,304 | |
| Investor Class: | | | | |
| Net assets | | $ | 39,486,897 | |
| Capital shares outstanding | | | 1,436,504 | |
| Net asset value per share | | $ | 27.49 | |
| Advisor Class: | | | | |
| Net assets | | $ | 4,981,377 | |
| Capital shares outstanding | | | 195,843 | |
| Net asset value per share | | $ | 25.44 | |
| A-Class: | | | | |
| Net assets | | $ | 4,582,839 | |
| Capital shares outstanding | | | 176,101 | |
| Net asset value per share | | $ | 26.02 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 27.32 | |
| C-Class: | | | | |
| Net assets | | $ | 9,083,191 | |
| Capital shares outstanding | | | 378,316 | |
| Net asset value per share | | $ | 24.01 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $8,124) | | $ | 552,604 | |
| Income from securities lending, net | | | 21,600 | |
| Interest | | | 21 | |
| Total investment income | | | 574,225 | |
| Expenses: | | | | |
| Management fees | | | 244,987 | |
| Transfer agent and administrative fees | | | 72,055 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 12,194 | |
| A-Class | | | 6,803 | |
| C-Class | | | 44,699 | |
| Portfolio accounting fees | | | 28,822 | |
| Trustees’ fees* | | | 3,336 | |
| Custodian fees | | | 3,206 | |
| Line of credit fees | | | 51 | |
| Miscellaneous | | | 42,529 | |
| Total expenses | | | 458,682 | |
| Net investment income | | | 115,543 | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 6,811,526 | |
| Net realized gain | | | 6,811,526 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (4,111,313 | ) |
| Net change in unrealized appreciation (depreciation) | | | (4,111,313 | ) |
| Net realized and unrealized gain | | | 2,700,213 | |
| Net increase in net assets resulting from operations | | $ | 2,815,756 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 45 |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 115,543 | | | $ | 188,009 | |
| Net realized gain (loss) on investments | | | 6,811,526 | | | | (30,051 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (4,111,313 | ) | | | 3,094,351 | |
| Net increase in net assets resulting from operations | | | 2,815,756 | | | | 3,252,309 | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (105,253 | ) |
| Advisor Class | | | — | | | | (19,330 | ) |
| A-Class | | | — | | | | (14,395 | ) |
| C-Class | | | — | | | | (31,997 | ) |
| Return of capital | | | | | | | | |
| Investor Class | | | — | | | | (605,329 | ) |
| Advisor Class | | | — | | | | (111,169 | ) |
| A-Class | | | — | | | | (82,789 | ) |
| C-Class | | | — | | | | (184,019 | ) |
| Total distributions to shareholders | | | — | | | | (1,154,281 | ) |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 39,142,167 | | | | 154,529,221 | |
| Advisor Class | | | 2,432,482 | | | | 21,390,571 | |
| A-Class | | | 5,911,937 | | | | 4,920,012 | |
| C-Class | | | 13,881,837 | | | | 36,226,645 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 694,988 | |
| Advisor Class | | | — | | | | 128,424 | |
| A-Class | | | — | | | | 82,881 | |
| C-Class | | | — | | | | 209,883 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (50,545,449 | ) | | | (148,970,159 | ) |
| Advisor Class | | | (2,951,386 | ) | | | (27,017,234 | ) |
| A-Class | | | (7,361,930 | ) | | | (5,254,596 | ) |
| C-Class | | | (14,902,324 | ) | | | (40,129,113 | ) |
| Net decrease from capital share transactions | | | (14,392,666 | ) | | | (3,188,477 | ) |
| Net decrease in net assets | | | (11,576,910 | ) | | | (1,090,449 | ) |
| Net assets: | | | | | | | | |
| Beginning of period | | | 69,711,214 | | | | 70,801,663 | |
| End of period | | $ | 58,134,304 | | | $ | 69,711,214 | |
| Undistributed net investment income at end of period | | $ | 115,543 | | | $ | — | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 1,483,306 | | | | 6,309,043 | |
| Advisor Class | | | 100,286 | | | | 991,630 | |
| A-Class | | | 242,881 | | | | 210,950 | |
| C-Class | | | 600,846 | | | | 1,745,084 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 30,270 | |
| Advisor Class | | | — | | | | 6,021 | |
| A-Class | | | — | | | | 3,805 | |
| C-Class | | | — | | | | 10,380 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (1,928,851 | ) | | | (6,123,443 | ) |
| Advisor Class | | | (122,025 | ) | | | (1,262,927 | ) |
| A-Class | | | (292,363 | ) | | | (229,600 | ) |
| C-Class | | | (645,253 | ) | | | (1,934,674 | ) |
| Net decrease in shares | | | (561,173 | ) | | | (243,461 | ) |
| 46 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 26.12 | | | $ | 24.58 | | | $ | 28.70 | | | $ | 20.91 | | | $ | 14.01 | | | $ | 27.29 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .08 | | | | .12 | | | | .07 | | | | — | c | | | .10 | | | | .06 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.29 | | | | 1.89 | | | | (4.19 | ) | | | 7.82 | | | | 6.82 | | | | (12.61 | ) |
| Total from investment operations | | | 1.37 | | | | 2.01 | | | | (4.12 | ) | | | 7.82 | | | | 6.92 | | | | (12.55 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.73 | ) |
| Return of capital | | | — | | | | (.40 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.47 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | (.73 | ) |
| Net asset value, end of period | | $ | 27.49 | | | $ | 26.12 | | | $ | 24.58 | | | $ | 28.70 | | | $ | 20.91 | | | $ | 14.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 5.24 | % | | | 8.50 | % | | | (14.39 | %) | | | 37.43 | % | | | 49.37 | % | | | (46.01 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 39,487 | | | $ | 49,160 | | | $ | 40,947 | | | $ | 93,648 | | | $ | 35,228 | | | $ | 53,627 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.60 | % | | | 0.52 | % | | | 0.27 | % | | | 0.00 | % | | | 0.51 | % | | | 0.28 | % |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.36 | % | | | 1.39 | % | | | 1.38 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 70 | % | | | 248 | % | | | 288 | % | | | 273 | % | | | 228 | % | | | 310 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 24.23 | | | $ | 22.95 | | | $ | 26.93 | | | $ | 19.72 | | | $ | 13.28 | | | $ | 26.07 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .01 | | | | .01 | | | | (.08 | ) | | | (.11 | ) | | | (— | )c | | | (.04 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.20 | | | | 1.74 | | | | (3.90 | ) | | | 7.35 | | | | 6.46 | | | | (12.02 | ) |
| Total from investment operations | | | 1.21 | | | | 1.75 | | | | (3.98 | ) | | | 7.24 | | | | 6.46 | | | | (12.06 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.73 | ) |
| Return of capital | | | — | | | | (.40 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.47 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | (.73 | ) |
| Net asset value, end of period | | $ | 25.44 | | | $ | 24.23 | | | $ | 22.95 | | | $ | 26.93 | | | $ | 19.72 | | | $ | 13.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 4.99 | % | | | 7.92 | % | | | (14.78 | %) | | | 36.75 | % | | | 48.62 | % | | | (46.29 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,981 | | | $ | 5,272 | | | $ | 11,080 | | | $ | 16,015 | | | $ | 6,489 | | | $ | 4,679 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.10 | % | | | 0.06 | % | | | (0.33 | %) | | | (0.53 | %) | | | (0.02 | %) | | | (0.16 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.86 | % | | | 1.89 | % | | | 1.88 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 70 | % | | | 248 | % | | | 288 | % | | | 273 | % | | | 228 | % | | | 310 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 47 |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 24.76 | | | $ | 23.38 | | | $ | 27.40 | | | $ | 20.01 | | | $ | 13.44 | | | $ | 26.30 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .07 | | | | .08 | | | | (.01 | ) | | | (.08 | ) | | | .06 | | | | .02 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.19 | | | | 1.77 | | | | (4.01 | ) | | | 7.50 | | | | 6.53 | | | | (12.15 | ) |
| Total from investment operations | | | 1.26 | | | | 1.85 | | | | (4.02 | ) | | | 7.42 | | | | 6.59 | | | | (12.13 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.73 | ) |
| Return of capital | | | — | | | | (.40 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.47 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | (.73 | ) |
| Net asset value, end of period | | $ | 26.02 | | | $ | 24.76 | | | $ | 23.38 | | | $ | 27.40 | | | $ | 20.01 | | | $ | 13.44 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 5.09 | % | | | 8.20 | % | | | (14.67 | %) | | | 37.11 | % | | | 49.01 | % | | | (46.15 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,583 | | | $ | 5,586 | | | $ | 5,622 | | | $ | 14,752 | | | $ | 3,903 | | | $ | 4,845 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.53 | % | | | 0.38 | % | | | (0.05 | %) | | | (0.38 | %) | | | 0.35 | % | | | 0.10 | % |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.61 | % | | | 1.64 | % | | | 1.63 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 70 | % | | | 248 | % | | | 288 | % | | | 273 | % | | | 228 | % | | | 310 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 22.93 | | | $ | 21.85 | | | $ | 25.78 | | | $ | 18.97 | | | $ | 12.84 | | | $ | 25.37 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.05 | ) | | | (.09 | ) | | | (.19 | ) | | | (.20 | ) | | | (.08 | ) | | | (.14 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.13 | | | | 1.64 | | | | (3.74 | ) | | | 7.04 | | | | 6.23 | | | | (11.66 | ) |
| Total from investment operations | | | 1.08 | | | | 1.55 | | | | (3.93 | ) | | | 6.84 | | | | 6.15 | | | | (11.80 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.73 | ) |
| Return of capital | | | — | | | | (.40 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.47 | ) | | | — | | | | (.03 | ) | | | (.02 | ) | | | (.73 | ) |
| Net asset value, end of period | | $ | 24.01 | | | $ | 22.93 | | | $ | 21.85 | | | $ | 25.78 | | | $ | 18.97 | | | $ | 12.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 4.71 | % | | | 7.40 | % | | | (15.24 | %) | | | 36.09 | % | | | 47.87 | % | | | (46.55 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 9,083 | | | $ | 9,693 | | | $ | 13,153 | | | $ | 19,993 | | | $ | 13,972 | | | $ | 9,865 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.39 | %) | | | (0.45 | %) | | | (0.84 | %) | | | (0.99 | %) | | | (0.48 | %) | | | (0.65 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.36 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 70 | % | | | 248 | % | | | 288 | % | | | 273 | % | | | 228 | % | | | 310 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
| c | Net investment income (loss) 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. |
| 48 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
ENERGY SERVICES FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the energy services field, including those that provide services and equipment in the areas of oil, coal and gas exploration and production (“Energy Services Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 2, 1998 |
| A-Class | September 1, 2004 |
| C-Class | March 30, 2001 |
| Ten Largest Holdings (% of Total Net Assets) |
| Schlumberger Ltd. | | | 12.1 | % |
| Halliburton Co. | | | 7.4 | % |
| National Oilwell Varco, Inc. | | | 6.4 | % |
| Baker Hughes, Inc. | | | 5.2 | % |
| Cameron International Corp. | | | 4.1 | % |
| FMC Technologies, Inc. | | | 4.0 | % |
| Noble Corp. | | | 3.5 | % |
| Diamond Offshore Drilling, Inc. | | | 3.3 | % |
| Oceaneering International, Inc. | | | 3.3 | % |
| Ensco plc — Class A | | | 3.1 | % |
| Top Ten Total | | | 52.4 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 49 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| ENERGY SERVICES FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.8% | | | | | | | | |
| | | | | | | | | |
| OIL & GAS EQUIPMENT & SERVICES - 70.8% | | | | | | | | |
| Schlumberger Ltd. | | | 66,136 | | | $ | 5,843,777 | |
| Halliburton Co. | | | 74,231 | | | | 3,574,223 | |
| National Oilwell Varco, Inc. | | | 39,552 | | | | 3,089,407 | |
| Baker Hughes, Inc. | | | 51,165 | | | | 2,512,202 | |
| Cameron International Corp.* | | | 34,100 | | | | 1,990,417 | |
| FMC Technologies, Inc.* | | | 34,588 | | | | 1,916,867 | |
| Oceaneering International, Inc. | | | 19,525 | | | | 1,586,211 | |
| Oil States International, Inc.* | | | 11,961 | | | | 1,237,485 | |
| Weatherford International Ltd.* | | | 77,321 | | | | 1,185,331 | |
| Dresser-Rand Group, Inc.* | | | 18,866 | | | | 1,177,238 | |
| Dril-Quip, Inc.* | | | 10,108 | | | | 1,159,893 | |
| Superior Energy Services, Inc.* | | | 42,821 | | | | 1,072,238 | |
| Tidewater, Inc. | | | 15,587 | | | | 924,153 | |
| Bristow Group, Inc. | | | 11,970 | | | | 870,937 | |
| Helix Energy Solutions Group, Inc.* | | | 34,039 | | | | 863,569 | |
| Core Laboratories N.V. | | | 5,035 | | | | 851,972 | |
| Tenaris S.A. ADR | | | 18,131 | | | | 848,168 | |
| CARBO Ceramics, Inc.1 | | | 7,973 | | | | 790,204 | |
| Hornbeck Offshore Services, Inc.* | | | 13,237 | | | | 760,333 | |
| Exterran Holdings, Inc.* | | | 26,515 | | | | 731,019 | |
| McDermott International, Inc.* | | | 97,233 | | | | 722,441 | |
| Key Energy Services, Inc.* | | | 75,168 | | | | 547,975 | |
| Total Oil & Gas Equipment & Services | | | | | | | 34,256,060 | |
| OIL & GAS DRILLING - 29.0% | | | | | | | | |
| Noble Corp. | | | 44,882 | | | | 1,695,192 | |
| Diamond Offshore Drilling, Inc. | | | 25,563 | | | | 1,593,086 | |
| Ensco plc — Class A | | | 27,757 | | | | 1,491,939 | |
| Helmerich & Payne, Inc. | | | 20,564 | | | | 1,417,888 | |
| Transocean Ltd. | | | 30,780 | | | | 1,369,710 | |
| Rowan Companies plc — Class A* | | | 31,885 | | | | 1,170,817 | |
| Nabors Industries Ltd. | | | 64,461 | | | | 1,035,244 | |
| Atwood Oceanics, Inc.* | | | 18,449 | | | | 1,015,433 | |
| Seadrill Ltd. | | | 21,288 | | | | 959,663 | |
| Patterson-UTI Energy, Inc. | | | 43,007 | | | | 919,490 | |
| Unit Corp.* | | | 17,555 | | | | 816,132 | |
| Hercules Offshore, Inc.* | | | 77,438 | | | | 570,718 | |
| Total Oil & Gas Drilling | | | | | | | 14,055,312 | |
| Total Common Stocks | | | | | | | | |
| (Cost $21,575,378) | | | | | | | 48,311,372 | |
| | | Face
Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.8% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 363,336 | | | | 363,336 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $363,336) | | | | | | | 363,336 | |
| | | | | | | | | |
| SECURITIES LENDING COLLATERAL††,3 - 0.7% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 173,638 | | | | 173,638 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 162,137 | | | | 162,137 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $335,775) | | | | | | | 335,775 | |
| Total Investments - 101.3% | | | | | | | | |
| (Cost $22,274,489) | | | | | | $ | 49,010,483 | |
| Other Assets & Liabilities, net - (1.3)% | | | | | | | (624,128 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 48,386,355 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 50 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $327,063 of securities loaned | | | | |
| (cost $21,575,378) | | $ | 48,311,372 | |
| Repurchase agreements, at value | | | | |
| (cost $699,111) | | | 699,111 | |
| Total investments | | | | |
| (cost $22,274,489) | | | 49,010,483 | |
| Receivables: | | | | |
| Fund shares sold | | | 38,387 | |
| Dividends | | | 21,560 | |
| Interest | | | 3,591 | |
| Total assets | | | 49,074,021 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 335,775 | |
| Fund shares redeemed | | | 265,985 | |
| Management fees | | | 33,584 | |
| Distribution and service fees | | | 11,210 | |
| Transfer agent and administrative fees | | | 9,878 | |
| Portfolio accounting fees | | | 3,951 | |
| Miscellaneous | | | 27,283 | |
| Total liabilities | | | 687,666 | |
| Net assets | | $ | 48,386,355 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 55,074,669 | |
| Accumulated net investment loss | | | (144,581 | ) |
| Accumulated net realized loss on investments | | | (33,279,727 | ) |
| Net unrealized appreciation on investments | | | 26,735,994 | |
| Net assets | | $ | 48,386,355 | |
| Investor Class: | | | | |
| Net assets | | $ | 25,771,437 | |
| Capital shares outstanding | | | 440,929 | |
| Net asset value per share | | $ | 58.45 | |
| Advisor Class: | | | | |
| Net assets | | $ | 6,795,350 | |
| Capital shares outstanding | | | 125,093 | |
| Net asset value per share | | $ | 54.32 | |
| A-Class: | | | | |
| Net assets | | $ | 6,919,630 | |
| Capital shares outstanding | | | 124,404 | |
| Net asset value per share | | $ | 55.62 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 58.39 | |
| C-Class: | | | | |
| Net assets | | $ | 8,899,938 | |
| Capital shares outstanding | | | 172,227 | |
| Net asset value per share | | $ | 51.68 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
|
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $483) | | $ | 320,354 | |
| Income from securities lending, net | | | 12,284 | |
| Interest | | | 16 | |
| Total investment income | | | 332,654 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 200,465 | |
| Transfer agent and administrative fees | | | 58,960 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 21,386 | |
| A-Class | | | 7,828 | |
| C-Class | | | 41,124 | |
| Portfolio accounting fees | | | 23,584 | |
| Trustees’ fees* | | | 2,726 | |
| Custodian fees | | | 2,546 | |
| Line of credit fees | | | 107 | |
| Miscellaneous | | | 34,558 | |
| Total expenses | | | 393,284 | |
| Net investment loss | | | (60,630 | ) |
| | | | | |
| Net Realized and Unrealized Gain (loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 6,026,910 | |
| Net realized gain | | | 6,026,910 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (3,311,472 | ) |
| Net change in unrealized appreciation (depreciation) | | | (3,311,472 | ) |
| Net realized and unrealized gain | | | 2,715,438 | |
| Net increase in net assets resulting from operations | | $ | 2,654,808 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 51 |
| ENERGY SERVICES FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (60,630 | ) | | $ | (183,941 | ) |
| Net realized gain on investments | | | 6,026,910 | | | | 3,214,998 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (3,311,472 | ) | | | (1,359,057 | ) |
| Net increase in net assets resulting from operations | | | 2,654,808 | | | | 1,672,000 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 69,164,260 | | | | 148,932,078 | |
| Advisor Class | | | 25,280,472 | | | | 44,594,641 | |
| A-Class | | | 4,514,175 | | | | 2,262,133 | |
| C-Class | | | 12,952,045 | | | | 29,691,711 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (71,015,385 | ) | | | (157,984,849 | ) |
| Advisor Class | | | (28,414,585 | ) | | | (42,995,012 | ) |
| A-Class | | | (3,490,209 | ) | | | (4,241,348 | ) |
| C-Class | | | (13,229,888 | ) | | | (31,597,061 | ) |
| Net decrease from capital share transactions | | | (4,239,115 | ) | | | (11,337,707 | ) |
| Net decrease in net assets | | | (1,584,307 | ) | | | (9,665,707 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 49,970,662 | | | | 59,636,369 | |
| End of period | | $ | 48,386,355 | | | $ | 49,970,662 | |
| Accumulated net investment loss at end of period | | $ | (144,581 | ) | | $ | (83,951 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 1,240,955 | | | | 3,027,302 | |
| Advisor Class | | | 487,687 | | | | 956,449 | |
| A-Class | | | 83,813 | | | | 47,873 | |
| C-Class | | | 262,419 | | | | 678,750 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (1,279,506 | ) | | | (3,223,101 | ) |
| Advisor Class | | | (553,537 | ) | | | (933,961 | ) |
| A-Class | | | (66,122 | ) | | | (87,570 | ) |
| C-Class | | | (269,115 | ) | | | (721,979 | ) |
| Net decrease in shares | | | (93,406 | ) | | | (256,237 | ) |
| 52 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| ENERGY SERVICES FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 54.43 | | | $ | 50.87 | | | $ | 62.66 | | | $ | 42.83 | | | $ | 25.07 | | | $ | 58.04 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .01 | | | | (.05 | ) | | | (.14 | ) | | | (.21 | ) | | | (.01 | ) | | | (.24 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.01 | | | | 3.61 | | | | (11.65 | ) | | | 20.04 | | | | 17.77 | | | | (32.73 | ) |
| Total from investment operations | | | 4.02 | | | | 3.56 | | | | (11.79 | ) | | | 19.83 | | | | 17.76 | | | | (32.97 | ) |
| Net asset value, end of period | | $ | 58.45 | | | $ | 54.43 | | | $ | 50.87 | | | $ | 62.66 | | | $ | 42.83 | | | $ | 25.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 7.39 | % | | | 7.00 | % | | | (18.82 | %) | | | 46.27 | % | | | 70.84 | % | | | (56.81 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 25,771 | | | $ | 26,097 | | | $ | 34,353 | | | $ | 151,318 | | | $ | 49,371 | | | $ | 59,706 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.03 | % | | | (0.10 | %) | | | (0.25 | %) | | | (0.42 | %) | | | (0.01 | %) | | | (0.48 | %) |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.36 | % | | | 1.39 | % | | | 1.38 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 172 | % | | | 275 | % | | | 162 | % | | | 205 | % | | | 472 | % | | | 207 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Period Ended | | | | Year Ended | | | | Year Ended | | | | Year Ended | | | | Year Ended | | | | Year Ended | |
| | | | September 30, | | | | March 28, | | | | March 31, | | | | March 31, | | | | March 31, | | | | March 31, | |
| Advisor Class | | | 2013a | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 50.72 | | | $ | 47.64 | | | $ | 58.97 | | | $ | 40.50 | | | $ | 23.83 | | | $ | 55.45 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.12 | ) | | | (.25 | ) | | | (.34 | ) | | | (.42 | ) | | | (.26 | ) | | | (.43 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.72 | | | | 3.33 | | | | (10.99 | ) | | | 18.89 | | | | 16.93 | | | | (31.19 | ) |
| Total from investment operations | | | 3.60 | | | | 3.08 | | | | (11.33 | ) | | | 18.47 | | | | 16.67 | | | | (31.62 | ) |
| Net asset value, end of period | | $ | 54.32 | | | $ | 50.72 | | | $ | 47.64 | | | $ | 58.97 | | | $ | 40.50 | | | $ | 23.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 7.10 | % | | | 6.47 | % | | | (19.21 | %) | | | 45.61 | % | | | 69.95 | % | | | (57.02 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,795 | | | $ | 9,685 | | | $ | 8,025 | | | $ | 17,222 | | | $ | 6,631 | | | $ | 7,058 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.46 | %) | | | (0.54 | %) | | | (0.66 | %) | | | (0.93 | %) | | | (0.70 | %) | | | (0.92 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.86 | % | | | 1.89 | % | | | 1.88 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 172 | % | | | 275 | % | | | 162 | % | | | 205 | % | | | 472 | % | | | 207 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 53 |
| ENERGY SERVICES FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 51.86 | | | $ | 48.59 | | | $ | 60.01 | | | $ | 41.12 | | | $ | 24.13 | | | $ | 55.99 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.05 | ) | | | (.17 | ) | | | (.25 | ) | | | (.31 | ) | | | (.16 | ) | | | (.31 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.81 | | | | 3.44 | | | | (11.17 | ) | | | 19.20 | | | | 17.15 | | | | (31.55 | ) |
| Total from investment operations | | | 3.76 | | | | 3.27 | | | | (11.42 | ) | | | 18.89 | | | | 16.99 | | | | (31.86 | ) |
| Net asset value, end of period | | $ | 55.62 | | | $ | 51.86 | | | $ | 48.59 | | | $ | 60.01 | | | $ | 41.12 | | | $ | 24.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 7.25 | % | | | 6.73 | % | | | (19.03 | %) | | | 45.94 | % | | | 70.41 | % | | | (56.90 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,920 | | | $ | 5,535 | | | $ | 7,115 | | | $ | 24,849 | | | $ | 8,957 | | | $ | 4,920 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.20 | %) | | | (0.37 | %) | | | (0.47 | %) | | | (0.67 | %) | | | (0.43 | %) | | | (0.68 | %) |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.61 | % | | | 1.64 | % | | | 1.63 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 172 | % | | | 275 | % | | | 162 | % | | | 205 | % | | | 472 | % | | | 207 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Period Ended | | | | Year Ended | | | | Year Ended | | | | Year Ended | | | | Year Ended | | | | Year Ended | |
| | | | September 30, | | | | March 28, | | | | March 31, | | | | March 31, | | | | March 31, | | | | March 31, | |
| C-Class | | | 2013a | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 48.37 | | | $ | 45.66 | | | $ | 56.81 | | | $ | 39.22 | | | $ | 23.19 | | | $ | 54.22 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.23 | ) | | | (.49 | ) | | | (.54 | ) | | | (.60 | ) | | | (.44 | ) | | | (.64 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.54 | | | | 3.20 | | | | (10.61 | ) | | | 18.19 | | | | 16.47 | | | | (30.39 | ) |
| Total from investment operations | | | 3.31 | | | | 2.71 | | | | (11.15 | ) | | | 17.59 | | | | 16.03 | | | | (31.03 | ) |
| Net asset value, end of period | | $ | 51.68 | | | $ | 48.37 | | | $ | 45.66 | | | $ | 56.81 | | | $ | 39.22 | | | $ | 23.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 6.84 | % | | | 5.94 | % | | | (19.63 | %) | | | 44.85 | % | | | 69.12 | % | | | (57.23 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 8,900 | | | $ | 8,654 | | | $ | 10,144 | | | $ | 15,276 | | | $ | 11,059 | | | $ | 9,196 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.94 | %) | | | (1.11 | %) | | | (1.13 | %) | | | (1.43 | %) | | | (1.25 | %) | | | (1.41 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.36 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 172 | % | | | 275 | % | | | 162 | % | | | 205 | % | | | 472 | % | | | 207 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 54 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
FINANCIAL SERVICES FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the financial services sector (“Financial Services Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 2, 1998 |
| Advisor Class | April 6, 1998 |
| A-Class | September 1, 2004 |
| C-Class | April 19, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Berkshire Hathaway, Inc. — Class B | | | 3.1 | % |
| Wells Fargo & Co. | | | 2.7 | % |
| JPMorgan Chase & Co. | | | 2.6 | % |
| Bank of America Corp. | | | 2.2 | % |
| Citigroup, Inc. | | | 2.2 | % |
| Goldman Sachs Group, Inc. | | | 1.7 | % |
| American Express Co. | | | 1.7 | % |
| American International Group, Inc. | | | 1.6 | % |
| U.S. Bancorp | | | 1.5 | % |
| MetLife, Inc. | | | 1.4 | % |
| Top Ten Total | | | 20.7 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 55 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| FINANCIAL SERVICES FUND |
| | | Shares | | | Value | |
| | | | | | | |
| Common Stocks† - 99.5% | | | | | | | | |
| | | | | | | | | |
| Diversified Banks - 9.0% | | | | | | | | |
| Wells Fargo & Co. | | | 13,355 | | | $ | 551,829 | |
| U.S. Bancorp | | | 8,365 | | | | 305,992 | |
| Itau Unibanco Holding S.A. ADR | | | 11,662 | | | | 164,667 | |
| Banco Bradesco S.A. ADR | | | 11,078 | | | | 153,763 | |
| Credicorp Ltd. | | | 1,140 | | | | 146,444 | |
| Toronto-Dominion Bank | | | 1,550 | | | | 139,469 | |
| ICICI Bank Ltd. ADR | | | 4,339 | | | | 132,253 | |
| HSBC Holdings plc ADR | | | 2,291 | | | | 124,310 | |
| Comerica, Inc. | | | 2,588 | | | | 101,734 | |
| Total Diversified Banks | | | | | | | 1,820,461 | |
| Asset Management & Custody Banks - 8.7% | | | | | | | | |
| BlackRock, Inc. — Class A | | | 961 | | | | 260,067 | |
| Bank of New York Mellon Corp. | | | 7,359 | | | | 222,168 | |
| State Street Corp. | | | 3,198 | | | | 210,269 | |
| Franklin Resources, Inc. | | | 4,035 | | | | 203,969 | |
| Ameriprise Financial, Inc. | | | 1,852 | | | | 168,680 | |
| T. Rowe Price Group, Inc. | | | 2,173 | | | | 156,304 | |
| Invesco Ltd. | | | 4,347 | | | | 138,669 | |
| Northern Trust Corp. | | | 2,443 | | | | 132,875 | |
| Affiliated Managers Group, Inc.* | | | 680 | | | | 124,195 | |
| American Capital Ltd.* | | | 5,590 | | | | 76,863 | |
| Legg Mason, Inc. | | | 2,210 | | | | 73,902 | |
| Total Asset Management & Custody Banks | | | | | | | 1,767,961 | |
| Specialized Reits - 8.4% | | | | | | | | |
| Public Storage | | | 1,268 | | | | 203,577 | |
| American Tower Corp. — Class A | | | 2,720 | | | | 201,634 | |
| HCP, Inc. | | | 3,985 | | | | 163,186 | |
| Ventas, Inc. | | | 2,474 | | | | 152,151 | |
| Weyerhaeuser Co. | | | 5,308 | | | | 151,968 | |
| Health Care REIT, Inc. | | | 2,409 | | | | 150,273 | |
| Host Hotels & Resorts, Inc. | | | 7,558 | | | | 133,550 | |
| Plum Creek Timber Company, Inc. | | | 2,285 | | | | 107,007 | |
| Rayonier, Inc. | | | 1,874 | | | | 104,288 | |
| Extra Space Storage, Inc. | | | 1,920 | | | | 87,840 | |
| Senior Housing Properties Trust | | | 3,500 | | | | 81,690 | |
| Corrections Corporation of America | | | 2,131 | | | | 73,626 | |
| Omega Healthcare Investors, Inc. | | | 2,280 | | | | 68,104 | |
| Total Specialized REITs | | | | | | | 1,678,894 | |
| Regional Banks - 7.8% | | | | | | | | |
| PNC Financial Services Group, Inc. | | | 3,364 | | | | 243,723 | |
| BB&T Corp. | | | 5,331 | | | | 179,921 | |
| SunTrust Banks, Inc. | | | 4,884 | | | | 158,339 | |
| M&T Bank Corp. | | | 1,379 | | | | 154,338 | |
| Fifth Third Bancorp | | | 8,204 | | | | 148,000 | |
| Regions Financial Corp. | | | 15,121 | | | | 140,020 | |
| KeyCorp | | | 10,905 | | | | 124,317 | |
| CIT Group, Inc.* | | | 2,399 | | | | 116,999 | |
| First Republic Bank | | | 2,170 | | | | 101,187 | |
| Huntington Bancshares, Inc. | | | 12,207 | | | | 100,830 | |
| Zions Bancorporation | | | 3,300 | | | | 90,486 | |
| Total Regional Banks | | | | | | | 1,558,160 | |
| Other Diversified Financial Services - 7.1% | | | | | | | | |
| JPMorgan Chase & Co. | | | 10,183 | | | | 526,359 | |
| Bank of America Corp. | | | 32,679 | | | | 450,970 | |
| Citigroup, Inc. | | | 9,113 | | | | 442,072 | |
| Total Other Diversified Financial Services | | | | | | | 1,419,401 | |
| Property & Casualty Insurance - 6.9% | | | | | | | | |
| Travelers Companies, Inc. | | | 2,413 | | | | 204,550 | |
| Chubb Corp. | | | 2,140 | | | | 191,016 | |
| Allstate Corp. | | | 3,656 | | | | 184,811 | |
| ACE Ltd. | | | 1,922 | | | | 179,822 | |
| Progressive Corp. | | | 5,598 | | | | 152,434 | |
| XL Group plc — Class A | | | 4,539 | | | | 139,892 | |
| Axis Capital Holdings Ltd. | | | 3,190 | | | | 138,159 | |
| Cincinnati Financial Corp. | | | 2,187 | | | | 103,139 | |
| Fidelity National Financial, Inc. — Class A | | | 3,600 | | | | 95,760 | |
| Total Property & Casualty Insurance | | | | | | | 1,389,583 | |
| Retail Reits - 6.6% | | | | | | | | |
| Simon Property Group, Inc. | | | 1,789 | | | | 265,184 | |
| General Growth Properties, Inc. | | | 8,224 | | | | 158,641 | |
| Macerich Co. | | | 1,942 | | | | 109,606 | |
| Kimco Realty Corp. | | | 5,219 | | | | 105,319 | |
| Realty Income Corp. | | | 2,584 | | | | 102,714 | |
| Federal Realty Investment Trust | | | 998 | | | | 101,247 | |
| Cole Real Estate Investment, Inc. | | | 7,400 | | | | 90,724 | |
| DDR Corp. | | | 5,260 | | | | 82,635 | |
| Regency Centers Corp. | | | 1,690 | | | | 81,712 | |
| Taubman Centers, Inc. | | | 1,210 | | | | 81,445 | |
| National Retail Properties, Inc. | | | 2,315 | | | | 73,663 | |
| CBL & Associates Properties, Inc. | | | 3,530 | | | | 67,423 | |
| Total Retail REITs | | | | | | | 1,320,313 | |
| Investment Banking & Brokerage - 5.6% | | | | | | | | |
| Goldman Sachs Group, Inc. | | | 2,126 | | | | 336,353 | |
| Morgan Stanley | | | 9,920 | | | | 267,344 | |
| Charles Schwab Corp. | | | 9,690 | | | | 204,847 | |
| TD Ameritrade Holding Corp. | | | 5,659 | | | | 148,153 | |
| Raymond James Financial, Inc. | | | 2,110 | | | | 87,924 | |
| E*TRADE Financial Corp.* | | | 5,010 | | | | 82,665 | |
| Total Investment Banking & Brokerage | | | | | | | 1,127,286 | |
| Life & Health Insurance - 5.5% | | | | | | | | |
| MetLife, Inc. | | | 5,981 | | | | 280,807 | |
| Prudential Financial, Inc. | | | 2,920 | | | | 227,702 | |
| Aflac, Inc. | | | 3,418 | | | | 211,882 | |
| Principal Financial Group, Inc. | | | 3,305 | | | | 141,520 | |
| Lincoln National Corp. | | | 3,235 | | | | 135,838 | |
| Unum Group | | | 3,753 | | | | 114,241 | |
| Total Life & Health Insurance | | | | | | | 1,111,990 | |
| Consumer Finance - 4.5% | | | | | | | | |
| American Express Co. | | | 4,450 | | | | 336,064 | |
| Capital One Financial Corp. | | | 3,654 | | | | 251,176 | |
| Discover Financial Services | | | 3,759 | | | | 189,980 | |
| SLM Corp. | | | 4,982 | | | | 124,052 | |
| Total Consumer Finance | | | | | | | 901,272 | |
| 56 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| FINANCIAL SERVICES FUND |
| | | Shares | | | Value | |
| | | | | | | |
| Specialized Finance - 4.2% | | | | | | | | |
| CME Group, Inc. — Class A | | | 2,510 | | | $ | 185,439 | |
| McGraw Hill Financial, Inc. | | | 2,370 | | | | 155,448 | |
| Moody’s Corp. | | | 2,199 | | | | 154,656 | |
| IntercontinentalExchange, Inc.* | | | 803 | | | | 145,680 | |
| NYSE Euronext | | | 2,840 | | | | 119,223 | |
| NASDAQ OMX Group, Inc. | | | 2,690 | | | | 86,322 | |
| Total Specialized Finance | | | | | | | 846,768 | |
| Multi-line Insurance - 4.0% | | | | | | | | |
| American International Group, Inc. | | | 6,550 | | | | 318,526 | |
| Loews Corp. | | | 3,540 | | | | 165,460 | |
| Hartford Financial Services Group, Inc. | | | 4,661 | | | | 145,050 | |
| Genworth Financial, Inc. — Class A* | | | 7,740 | | | | 98,995 | |
| Assurant, Inc. | | | 1,510 | | | | 81,691 | |
| Total Multi-Line Insurance | | | | | | | 809,722 | |
| RESIDENTIAL REITs - 3.7% | | | | | | | | |
| Equity Residential | | | 3,149 | | | | 168,691 | |
| AvalonBay Communities, Inc. | | | 1,234 | | | | 156,829 | |
| UDR, Inc. | | | 3,948 | | | | 93,568 | |
| Essex Property Trust, Inc. | | | 629 | | | | 92,903 | |
| Camden Property Trust | | | 1,428 | | | | 87,736 | |
| American Campus Communities, Inc. | | | 2,150 | | | | 73,423 | |
| Apartment Investment & | | | | | | | | |
| Management Co. — Class A | | | 2,590 | | | | 72,365 | |
| Total Residential REITs | | | | | | | 745,515 | |
| Multi-Sector Holdings - 3.7% | | | | | | | | |
| Berkshire Hathaway, Inc. — Class B* | | | 5,469 | | | | 620,786 | |
| Leucadia National Corp. | | | 4,397 | | | | 119,774 | |
| Total Multi-Sector Holdings | | | | | | | 740,560 | |
| Office Reits - 2.2% | | | | | | | | |
| Boston Properties, Inc. | | | 1,468 | | | | 156,929 | |
| SL Green Realty Corp. | | | 1,264 | | | | 112,294 | |
| Digital Realty Trust, Inc. | | | 1,893 | | | | 100,518 | |
| BioMed Realty Trust, Inc. | | | 3,900 | | | | 72,501 | |
| Total Office REITs | | | | | | | 442,242 | |
| Reinsurance - 2.2% | | | | | | | | |
| Everest Re Group Ltd. | | | 1,028 | | | | 149,482 | |
| PartnerRe Ltd. | | | 1,580 | | | | 144,633 | |
| RenaissanceRe Holdings Ltd. | | | 1,540 | | | | 139,416 | |
| Total Reinsurance | | | | | | | 433,531 | |
| MORTGAGE REITs - 1.9% | | | | | | | | |
| Annaly Capital Management, Inc. | | | 10,430 | | | | 120,780 | |
| American Capital Agency Corp. | | | 4,894 | | | | 110,458 | |
| Starwood Property Trust, Inc. | | | 3,520 | | | | 84,374 | |
| Two Harbors Investment Corp. | | | 7,140 | | | | 69,329 | |
| Total Mortgage REITs | | | | | | | 384,941 | |
| Insurance Brokers - 1.8% | | | | | | | | |
| Marsh & McLennan Companies, Inc. | | | 4,187 | | | | 182,343 | |
| Aon plc | | | 2,283 | | | | 169,947 | |
| Total Insurance Brokers | | | | | | | 352,290 | |
| Thrifts & Mortgage Finance - 1.7% | | | | | | | | |
| Ocwen Financial Corp.* | | | 1,920 | | | | 107,078 | |
| New York Community Bancorp, Inc. | | | 6,590 | | | | 99,575 | |
| People’s United Financial, Inc. | | | 5,765 | | | | 82,901 | |
| Radian Group, Inc. | | | 4,140 | | | | 57,670 | |
| Total Thrifts & Mortgage Finance | | | | | | | 347,224 | |
| Diversified Reits - 1.6% | | | | | | | | |
| Vornado Realty Trust | | | 1,822 | | | | 153,157 | |
| Liberty Property Trust | | | 2,270 | | | | 80,812 | |
| Duke Realty Corp. | | | 5,211 | | | | 80,458 | |
| Total Diversified REITs | | | | | | | 314,427 | |
| Real Estate Services - 1.0% | | | | | | | | |
| CBRE Group, Inc. — Class A* | | | 4,460 | | | | 103,160 | |
| Realogy Holdings Corp.* | | | 2,090 | | | | 89,912 | |
| Total Real Estate Services | | | | | | | 193,072 | |
| Industrial Reits - 0.8% | | | | | | | | |
| Prologis, Inc. | | | 4,236 | | | | 159,358 | |
| Diversified Capital Markets - 0.6% | | | | | | | | |
| Deutsche Bank AG | | | 2,626 | | | | 120,481 | |
| Total Common Stocks | | | | | | | | |
| (Cost $14,367,575) | | | | | | | 19,985,452 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| Repurchase Agreement††,1 - 0.2% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 36,311 | | | | 36,311 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $36,311) | | | | | | | 36,311 | |
| Total Investments - 99.7% | | | | | | | | |
| (Cost $14,403,886) | | | | | | $ | 20,021,763 | |
| Other Assets & Liabilities, net - 0.3% | | | | | | | 57,554 | |
| Total Net Assets - 100.0% | | | | | | $ | 20,079,317 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreement — See Note 5. |
ADR — American Depositary Receipt
plc — Public Limited Company
REIT — Real Estate Investment Trust
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 57 |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
|
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $14,367,575) | | $ | 19,985,452 | |
| Repurchase agreements, at value | | | | |
| (cost $36,311) | | | 36,311 | |
| Total investments | | | | |
| (cost $14,403,886) | | | 20,021,763 | |
| Cash | | | 1,061 | |
| Receivables: | | | | |
| Securities sold | | | 650,242 | |
| Dividends | | | 39,356 | |
| Fund shares sold | | | 11,823 | |
| Total assets | | | 20,724,245 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 604,694 | |
| Management fees | | | 12,878 | |
| Transfer agent and administrative fees | | | 3,788 | |
| Distribution and service fees | | | 2,925 | |
| Portfolio accounting fees | | | 1,515 | |
| Miscellaneous | | | 19,128 | |
| Total liabilities | | | 644,928 | |
| Net assets | | $ | 20,079,317 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 19,452,686 | |
| Undistributed net investment income | | | 233,144 | |
| Accumulated net realized loss on investments | | | (5,224,390 | ) |
| Net unrealized appreciation on investments | | | 5,617,877 | |
| Net assets | | $ | 20,079,317 | |
| Investor Class: | | | | |
| Net assets | | $ | 10,801,621 | |
| Capital shares outstanding | | | 113,109 | |
| Net asset value per share | | $ | 95.50 | |
| Advisor Class: | | | | |
| Net assets | | $ | 3,012,176 | |
| Capital shares outstanding | | | 33,928 | |
| Net asset value per share | | $ | 88.78 | |
| A-Class: | | | | |
| Net assets | | $ | 5,180,808 | |
| Capital shares outstanding | | | 56,950 | |
| Net asset value per share | | $ | 90.97 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 95.51 | |
| C-Class: | | | | |
| Net assets | | $ | 1,084,712 | |
| Capital shares outstanding | | | 12,888 | |
| Net asset value per share | | $ | 84.16 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
|
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $1,900) | | $ | 302,715 | |
| Interest | | | 9 | |
| Income from securities lending, net | | | 2 | |
| Total investment income | | | 302,726 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 113,874 | |
| Transfer agent and administrative fees | | | 33,492 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 13,843 | |
| A-Class | | | 2,440 | |
| C-Class | | | 7,661 | |
| Portfolio accounting fees | | | 13,397 | |
| Custodian fees | | | 1,600 | |
| Trustees’ fees* | | | 1,119 | |
| Line of credit fees | | | 81 | |
| Miscellaneous | | | 20,196 | |
| Total expenses | | | 207,703 | |
| Net investment income | | | 95,023 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 1,576,066 | |
| Net realized gain | | | 1,576,066 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (663,750 | ) |
| Net change in unrealized appreciation (depreciation) | | | (663,750 | ) |
| Net realized and unrealized gain | | | 912,316 | |
| Net increase in net assets resulting from operations | | $ | 1,007,339 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 58 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 95,023 | | | $ | 138,121 | |
| Net realized gain on investments | | | 1,576,066 | | | | 1,636,460 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (663,750 | ) | | | 432,216 | |
| Net increase in net assets resulting from operations | | | 1,007,339 | | | | 2,206,797 | |
| | | | | | | | | |
Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (74,299 | ) |
| Advisor Class | | | — | | | | (14,247 | ) |
| A-Class | | | — | | | | (8,366 | ) |
| C-Class | | | — | | | | (6,964 | ) |
| Total distributions to shareholders | | | — | | | | (103,876 | ) |
| | | | | | | | | |
Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 43,413,169 | | | | 112,921,803 | |
| Advisor Class | | | 4,579,293 | | | | 17,902,624 | |
| A-Class | | | 5,332,184 | | | | 3,785,000 | |
| C-Class | | | 9,084,171 | | | | 12,008,532 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 73,463 | |
| Advisor Class | | | — | | | | 14,202 | |
| A-Class | | | — | | | | 3,063 | |
| C-Class | | | — | | | | 6,753 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (50,268,977 | ) | | | (117,502,931 | ) |
| Advisor Class | | | (8,823,161 | ) | | | (15,219,045 | ) |
| A-Class | | | (2,111,431 | ) | | | (2,833,487 | ) |
| C-Class | | | (9,509,727 | ) | | | (11,551,082 | ) |
| Net decrease from capital share transactions | | | (8,304,479 | ) | | | (391,105 | ) |
| Net increase (decrease) in net assets | | | (7,297,140 | ) | | | 1,711,816 | |
Net assets: | | | | | | | | |
| Beginning of period | | | 27,376,457 | | | | 25,664,641 | |
| End of period | | $ | 20,079,317 | | | $ | 27,376,457 | |
| Undistributed net investment income at end of period | | $ | 233,144 | | | $ | 138,121 | |
| | | | | | | | | |
Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 456,190 | | | | 1,435,476 | |
| Advisor Class | | | 51,366 | | | | 244,596 | |
| A-Class | | | 58,875 | | | | 47,740 | |
| C-Class | | | 107,551 | | | | 168,822 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 940 | |
| Advisor Class | | | — | | | | 195 | |
| A-Class | | | — | | | | 41 | |
| C-Class | | | — | | | | 97 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (530,654 | ) | | | (1,503,386 | ) |
| Advisor Class | | | (101,490 | ) | | | (218,443 | ) |
| A-Class | | | (23,042 | ) | | | (35,080 | ) |
| C-Class | | | (112,601 | ) | | | (162,605 | ) |
| Net decrease in shares | | | (93,805 | ) | | | (21,607 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 59 |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 90.67 | | | $ | 78.47 | | | $ | 81.18 | | | $ | 75.23 | | | $ | 44.37 | | | $ | 101.80 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .41 | | | | .76 | | | | .61 | | | | .15 | | | | .41 | | | | 1.60 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.42 | | | | 11.99 | | | | (3.29 | ) | | | 6.75 | | | | 31.07 | | | | (57.13 | ) |
| Total from investment operations | | | 4.83 | | | | 12.75 | | | | (2.68 | ) | | | 6.90 | | | | 31.48 | | | | (55.53 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Total distributions | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Net asset value, end of period | | $ | 95.50 | | | $ | 90.67 | | | $ | 78.47 | | | $ | 81.18 | | | $ | 75.23 | | | $ | 44.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 5.33 | % | | | 16.37 | % | | | (3.31 | %) | | | 9.33 | % | | | 71.12 | % | | | (54.76 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 10,802 | | | $ | 17,007 | | | $ | 19,973 | | | $ | 4,885 | | | $ | 26,364 | | | $ | 13,257 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.87 | % | | | 0.95 | % | | | 0.86 | % | | | 0.19 | % | | | 0.64 | % | | | 2.16 | % |
| Total expenses | | | 1.37 | % | | | 1.36 | % | | | 1.34 | % | | | 1.39 | % | | | 1.38 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 180 | % | | | 590 | % | | | 970 | % | | | 601 | % | | | 447 | % | | | 755 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 84.51 | | | $ | 73.53 | | | $ | 76.47 | | | $ | 71.29 | | | $ | 42.28 | | | $ | 97.80 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .13 | | | | .22 | | | | .26 | | | | (.14 | ) | | | .12 | | | | 1.30 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.14 | | | | 11.31 | | | | (3.17 | ) | | | 6.27 | | | | 29.51 | | | | (54.92 | ) |
| Total from investment operations | | | 4.27 | | | | 11.53 | | | | (2.91 | ) | | | 6.13 | | | | 29.63 | | | | (53.62 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Total distributions | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Net asset value, end of period | | $ | 88.78 | | | $ | 84.51 | | | $ | 73.53 | | | $ | 76.47 | | | $ | 71.29 | | | $ | 42.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 5.05 | % | | | 15.80 | % | | | (3.80 | %) | | | 8.76 | % | | | 70.26 | % | | | (55.06 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,012 | | | $ | 7,103 | | | $ | 4,243 | | | $ | 3,634 | | | $ | 3,285 | | | $ | 2,710 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.30 | % | | | 0.29 | % | | | 0.37 | % | | | (0.20 | %) | | | 0.21 | % | | | 1.83 | % |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.85 | % | | | 1.89 | % | | | 1.88 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 180 | % | | | 590 | % | | | 970 | % | | | 601 | % | | | 447 | % | | | 755 | % |
| 60 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | september 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 86.48 | | | $ | 75.07 | | | $ | 77.87 | | | $ | 72.38 | | | $ | 42.80 | | | $ | 98.60 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .49 | | | | .51 | | | | .45 | | | | (.01 | ) | | | .30 | | | | 1.30 | |
| Net gain (loss) on investments (realized and unrealized) | | | 4.00 | | | | 11.45 | | | | (3.22 | ) | | | 6.45 | | | | 29.90 | | | | (55.20 | ) |
| Total from investment operations | | | 4.49 | | | | 11.96 | | | | (2.77 | ) | | | 6.44 | | | | 30.20 | | | | (53.90 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Total distributions | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Net asset value, end of period | | $ | 90.97 | | | $ | 86.48 | | | $ | 75.07 | | | $ | 77.87 | | | $ | 72.38 | | | $ | 42.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 5.19 | % | | | 16.06 | % | | | (3.57 | %) | | | 9.06 | % | | | 70.74 | % | | | (54.92 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,181 | | | $ | 1,826 | | | $ | 632 | | | $ | 1,782 | | | $ | 1,408 | | | $ | 2,683 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 1.08 | % | | | 0.66 | % | | | 0.64 | % | | | (0.01 | %) | | | 0.50 | % | | | 1.97 | % |
| Total expenses | | | 1.62 | % | | | 1.61 | % | | | 1.61 | % | | | 1.64 | % | | | 1.63 | % | | | 1.62 | % |
| Portfolio turnover rate | | | 180 | % | | | 590 | % | | | 970 | % | | | 601 | % | | | 447 | % | | | 755 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 80.30 | | | $ | 70.26 | | | $ | 73.42 | | | $ | 68.79 | | | $ | 41.01 | | | $ | 95.10 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.03 | ) | | | .03 | | | | (.12 | ) | | | (.49 | ) | | | (.24 | ) | | | .80 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.89 | | | | 10.56 | | | | (3.01 | ) | | | 6.07 | | | | 28.64 | | | | (52.99 | ) |
| Total from investment operations | | | 3.86 | | | | 10.59 | | | | (3.13 | ) | | | 5.58 | | | | 28.40 | | | | (52.19 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Total distributions | | | — | | | | (.55 | ) | | | (.03 | ) | | | (.95 | ) | | | (.62 | ) | | | (1.90 | ) |
| Net asset value, end of period | | $ | 84.16 | | | $ | 80.30 | | | $ | 70.26 | | | $ | 73.42 | | | $ | 68.79 | | | $ | 41.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 4.81 | % | | | 15.21 | % | | | (4.27 | %) | | | 8.28 | % | | | 69.44 | % | | | (55.16 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,085 | | | $ | 1,440 | | | $ | 817 | | | $ | 1,114 | | | $ | 1,942 | | | $ | 1,407 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.08 | %) | | | 0.04 | % | | | (0.18 | %) | | | (0.72 | %) | | | (0.40 | %) | | | 1.13 | % |
| Total expenses | | | 2.37 | % | | | 2.36 | % | | | 2.36 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 180 | % | | | 590 | % | | | 970 | % | | | 601 | % | | | 447 | % | | | 755 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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 the period March 31, 2008 – April 19, 2009, have been restated to reflect a 1:10 reverse share split effective April 20, 2009. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 61 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
HEALTH CARE FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the health care industry (“Health Care Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 17, 1998 |
| Advisor Class | May 11, 1998 |
| A-Class | September 1, 2004 |
| C-Class | March 30, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Johnson & Johnson | | | 4.0 | % |
| Pfizer, Inc. | | | 3.6 | % |
| Merck & Company, Inc. | | | 3.1 | % |
| Gilead Sciences, Inc. | | | 2.5 | % |
| Amgen, Inc. | | | 2.3 | % |
| UnitedHealth Group, Inc. | | | 2.3 | % |
| Bristol-Myers Squibb Co. | | | 2.2 | % |
| Celgene Corp. | | | 2.2 | % |
| AbbVie, Inc. | | | 2.1 | % |
| Express Scripts Holding Co. | | | 1.9 | % |
| Top Ten Total | | | 26.2 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 62 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| HEALTH CARE FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.9% | | | | | | | | |
| | | | | | | | | |
| PHARMACEUTICALS - 32.4% | | | | | | | | |
| Johnson & Johnson | | | 56,406 | | | $ | 4,889,835 | |
| Pfizer, Inc. | | | 152,274 | | | | 4,371,786 | |
| Merck & Company, Inc. | | | 78,620 | | | | 3,743,098 | |
| Bristol-Myers Squibb Co. | | | 57,256 | | | | 2,649,808 | |
| AbbVie, Inc. | | | 56,945 | | | | 2,547,150 | |
| Eli Lilly & Co. | | | 46,033 | | | | 2,316,841 | |
| Valeant Pharmaceuticals International, Inc.* | | | 17,366 | | | | 1,811,795 | |
| Allergan, Inc. | | | 18,068 | | | | 1,634,251 | |
| Actavis, Inc.* | | | 9,887 | | | | 1,423,728 | |
| Teva Pharmaceutical Industries Ltd. ADR | | | 36,167 | | | | 1,366,389 | |
| Mylan, Inc.* | | | 32,176 | | | | 1,228,158 | |
| Zoetis, Inc. | | | 38,900 | | | | 1,210,568 | |
| Perrigo Co. | | | 8,740 | | | | 1,078,341 | |
| Warner Chilcott plc — Class A | | | 46,961 | | | | 1,073,059 | |
| Forest Laboratories, Inc.* | | | 24,917 | | | | 1,066,198 | |
| GlaxoSmithKline plc ADR | | | 20,904 | | | | 1,048,754 | |
| Jazz Pharmaceuticals plc* | | | 11,100 | | | | 1,020,867 | |
| AstraZeneca plc ADR | | | 19,488 | | | | 1,012,012 | |
| Novartis AG ADR | | | 12,879 | | | | 987,948 | |
| Hospira, Inc.* | | | 19,973 | | | | 783,341 | |
| Endo Health Solutions, Inc.* | | | 16,210 | | | | 736,582 | |
| Salix Pharmaceuticals Ltd.* | | | 9,600 | | | | 642,048 | |
| Questcor Pharmaceuticals, Inc. | | | 10,380 | | | | 602,040 | |
| Total Pharmaceuticals | | | | | | | 39,244,597 | |
| BIOTECHNOLOGY - 18.9% | | | | | | | | |
| Gilead Sciences, Inc.* | | | 49,058 | | | | 3,082,804 | |
| Amgen, Inc. | | | 25,353 | | | | 2,838,015 | |
| Celgene Corp.* | | | 16,974 | | | | 2,612,808 | |
| Biogen Idec, Inc.* | | | 9,606 | | | | 2,312,741 | |
| Regeneron Pharmaceuticals, Inc.* | | | 5,421 | | | | 1,696,068 | |
| Alexion Pharmaceuticals, Inc.* | | | 13,319 | | | | 1,547,135 | |
| Vertex Pharmaceuticals, Inc.* | | | 18,301 | | | | 1,387,582 | |
| Pharmacyclics, Inc.* | | | 7,700 | | | | 1,065,834 | |
| Elan Corp. plc ADR* | | | 66,820 | | | | 1,041,056 | |
| Onyx Pharmaceuticals, Inc.* | | | 7,800 | | | | 972,426 | |
| BioMarin Pharmaceutical, Inc.* | | | 13,000 | | | | 938,860 | |
| Medivation, Inc.* | | | 11,300 | | | | 677,322 | |
| Cubist Pharmaceuticals, Inc.* | | | 10,286 | | | | 653,675 | |
| United Therapeutics Corp.* | | | 8,000 | | | | 630,800 | |
| Ariad Pharmaceuticals, Inc.* | | | 29,639 | | | | 545,358 | |
| Sarepta Therapeutics, Inc.*,1 | | | 9,800 | | | | 462,854 | |
| Myriad Genetics, Inc.*,1 | | | 18,400 | | | | 432,400 | |
| Total Biotechnology | | | | | | | 22,897,738 | |
| HEALTH CARE EQUIPMENT - 17.8% | | | | | | | | |
| Medtronic, Inc. | | | 43,412 | | | | 2,311,689 | |
| Abbott Laboratories | | | 66,690 | | | | 2,213,441 | |
| Baxter International, Inc. | | | 27,697 | | | | 1,819,416 | |
| Stryker Corp. | | | 22,953 | | | | 1,551,393 | |
| Covidien plc | | | 23,220 | | | | 1,415,027 | |
| Becton Dickinson and Co. | | | 13,707 | | | | 1,370,974 | |
| Boston Scientific Corp.* | | | 109,315 | | | | 1,283,358 | |
| Intuitive Surgical, Inc.* | | | 3,361 | | | | 1,264,643 | |
| St. Jude Medical, Inc. | | | 23,263 | | | | 1,247,827 | |
| Zimmer Holdings, Inc. | | | 14,208 | | | | 1,167,045 | |
| CR Bard, Inc. | | | 8,199 | | | | 944,525 | |
| Edwards Lifesciences Corp.* | | | 12,920 | | | | 899,620 | |
| Varian Medical Systems, Inc.* | | | 12,036 | | | | 899,450 | |
| CareFusion Corp.* | | | 23,834 | | | | 879,475 | |
| ResMed, Inc.1 | | | 16,289 | | | | 860,385 | |
| Hologic, Inc.* | | | 37,340 | | | | 771,071 | |
| IDEXX Laboratories, Inc.* | | | 7,403 | | | | 737,709 | |
| Total Health Care Equipment | | | | | | | 21,637,048 | |
| MANAGED HEALTH CARE - 7.7% | | | | | | | | |
| UnitedHealth Group, Inc. | | | 39,474 | | | | 2,826,732 | |
| WellPoint, Inc. | | | 20,006 | | | | 1,672,702 | |
| Aetna, Inc. | | | 24,427 | | | | 1,563,817 | |
| Cigna Corp. | | | 19,943 | | | | 1,532,819 | |
| Humana, Inc. | | | 13,242 | | | | 1,235,876 | |
| WellCare Health Plans, Inc.* | | | 8,220 | | | | 573,263 | |
| Total Managed Health Care | | | | | | | 9,405,209 | |
| LIFE SCIENCES TOOLS & SERVICES - 6.4% | | | | | | | | |
| Thermo Fisher Scientific, Inc. | | | 19,492 | | | | 1,796,187 | |
| Agilent Technologies, Inc. | | | 25,214 | | | | 1,292,218 | |
| Life Technologies Corp.* | | | 15,352 | | | | 1,148,790 | |
| Illumina, Inc.*,1 | | | 12,714 | | | | 1,027,673 | |
| Waters Corp.* | | | 8,997 | | | | 955,571 | |
| Mettler-Toledo International, Inc.* | | | 3,550 | | | | 852,320 | |
| PerkinElmer, Inc. | | | 17,000 | | | | 641,750 | |
| Total Life Sciences Tools & Services | | | | | | | 7,714,509 | |
| HEALTH CARE SERVICES - 5.8% | | | | | | | | |
| Express Scripts Holding Co.* | | | 37,896 | | | | 2,341,214 | |
| DaVita HealthCare Partners, Inc.* | | | 18,902 | | | | 1,075,524 | |
| Quest Diagnostics, Inc. | | | 15,844 | | | | 979,001 | |
| Laboratory Corporation of America Holdings* | | | 9,665 | | | | 958,188 | |
| Catamaran Corp.* | | | 20,690 | | | | 950,706 | |
| Omnicare, Inc. | | | 13,779 | | | | 764,735 | |
| Total Health Care Services | | | | | | | 7,069,368 | |
| HEALTH CARE DISTRIBUTORS - 4.2% | | | | | | | | |
| McKesson Corp. | | | 13,137 | | | | 1,685,477 | |
| Cardinal Health, Inc. | | | 25,452 | | | | 1,327,322 | |
| AmerisourceBergen Corp. — Class A | | | 19,260 | | | | 1,176,786 | |
| Henry Schein, Inc.* | | | 9,284 | | | | 962,751 | |
| Total Health Care Distributors | | | | | | | 5,152,336 | |
| HEALTH CARE FACILITIES - 3.8% | | | | | | | | |
| HCA Holdings, Inc. | | | 31,927 | | | | 1,364,880 | |
| Universal Health Services, Inc. — Class B | | | 11,462 | | | | 859,535 | |
| Community Health Systems, Inc. | | | 14,900 | | | | 618,350 | |
| Tenet Healthcare Corp.* | | | 14,800 | | | | 609,612 | |
| Health Management Associates, | | | | | | | | |
| Inc. — Class A* | | | 45,700 | | | | 584,960 | |
| Brookdale Senior Living, Inc. — Class A* | | | 21,100 | | | | 554,930 | |
| Total Health Care Facilities | | | | | | | 4,592,267 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 63 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| HEAlTH CARE FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| HEALTH CARE TECHNOLOGY - 1.6% | | | | | | | | |
| Cerner Corp.* | | | 26,296 | | | $ | 1,381,855 | |
| athenahealth, Inc.* | | | 5,700 | | | | 618,792 | |
| Total Health Care Technology | | | | | | | 2,000,647 | |
| HEALTH CARE SUPPLIES - 1.3% | | | | | | | | |
| Cooper Companies, Inc. | | | 6,200 | | | | 804,078 | |
| DENTSPLY International, Inc. | | | 18,200 | | | | 790,062 | |
| Total Health Care Supplies | | | | | | | 1,594,140 | |
| Total Common Stocks | | | | | | | | |
| (Cost $80,807,449) | | | | | | | 121,307,859 | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.6% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 746,923 | | | | 746,923 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $746,923) | | | | | | | 746,923 | |
| | | | | | | | | |
| SECURITIES LENDING COLLATERAL††,3 - 1.5% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 946,049 | | | | 946,049 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 883,382 | | | | 883,382 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $1,829,431) | | | | | | | 1,829,431 | |
| Total Investments - 102.0% | | | | | | | | |
| (Cost $83,383,803) | | | | | | $ | 123,884,213 | |
| Other Assets & Liabilities, net - (2.0)% | | | | | | | (2,411,196 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 121,473,017 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 64 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| HEALTH CARE FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $1,751,392 of securities loaned | | | | |
| (cost $80,807,449) | | $ | 121,307,859 | |
| Repurchase agreements, at value | | | | |
| (cost $2,576,354) | | | 2,576,354 | |
| Total investments | | | | |
| (cost $83,383,803) | | | 123,884,213 | |
| Receivables: | | | | |
| Fund shares sold | | | 427,050 | |
| Dividends | | | 104,816 | |
| Interest | | | 1,310 | |
| Total assets | | | 124,417,389 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 1,829,431 | |
| Fund shares redeemed | | | 873,163 | |
| Management fees | | | 87,485 | |
| Transfer agent and administrative fees | | | 25,731 | |
| Portfolio accounting fees | | | 10,293 | |
| Distribution and service fees | | | 8,050 | |
| Miscellaneous | | | 110,219 | |
| Total liabilities | | | 2,944,372 | |
| Net assets | | $ | 121,473,017 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 89,288,616 | |
| Undistributed net investment income | | | 4,880 | |
| Accumulated net realized loss on investments | | | (8,320,889 | ) |
| Net unrealized appreciation on investments | | | 40,500,410 | |
| Net assets | | $ | 121,473,017 | |
| Investor Class: | | | | |
| Net assets | | $ | 105,394,234 | |
| Capital shares outstanding | | | 4,133,752 | |
| Net asset value per share | | $ | 25.50 | |
| Advisor Class: | | | | |
| Net assets | | $ | 6,805,140 | |
| Capital shares outstanding | | | 288,546 | |
| Net asset value per share | | $ | 23.58 | |
| A-Class: | | | | |
| Net assets | | $ | 4,245,669 | |
| Capital shares outstanding | | | 176,191 | |
| Net asset value per share | | $ | 24.10 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 25.30 | |
| C-Class: | | | | |
| Net assets | | $ | 5,027,974 | |
| Capital shares outstanding | | | 223,658 | |
| Net asset value per share | �� | $ | 22.48 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $103) | | $ | 792,832 | |
| Income from securities lending, net | | | 32,766 | |
| Interest | | | 53 | |
| Total investment income | | | 825,651 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 550,398 | |
| Transfer agent and administrative fees | | | 161,881 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 16,006 | |
| A-Class | | | 5,887 | |
| C-Class | | | 23,214 | |
| Portfolio accounting fees | | | 64,752 | |
| Custodian fees | | | 6,557 | |
| Trustees’ fees* | | | 5,909 | |
| Tax expense | | | 2,368 | |
| Line of credit fees | | | 150 | |
| Miscellaneous | | | 96,835 | |
| Total expenses | | | 933,957 | |
| Net investment loss | | | (108,306 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 6,009,799 | |
| Net realized gain | | | 6,009,799 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 10,214,919 | |
| Net change in unrealized appreciation (depreciation) | | | 10,214,919 | |
| Net realized and unrealized gain | | | 16,224,718 | |
| Net increase in net assets resulting from operations | | $ | 16,116,412 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 65 |
| HEALTH CARE FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income (loss) | | $ | (108,306 | ) | | $ | 364,983 | |
| Net realized gain (loss) on investments | | | 6,009,799 | | | | (3,758,797 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 10,214,919 | | | | 17,930,169 | |
| Net increase in net assets resulting from operations | | | 16,116,412 | | | | 14,536,355 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (217,663 | ) |
| Advisor Class | | | — | | | | (18,320 | ) |
| A-Class | | | — | | | | (5,822 | ) |
| C-Class | | | — | | | | (9,992 | ) |
| Total distributions to shareholders | | | — | | | | (251,797 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 169,218,930 | | | | 318,344,556 | |
| Advisor Class | | | 9,154,758 | | | | 49,746,384 | |
| A-Class | | | 6,895,537 | | | | 4,381,953 | |
| C-Class | | | 17,483,446 | | | | 34,482,974 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 216,489 | |
| Advisor Class | | | — | | | | 18,217 | |
| A-Class | | | — | | | | 4,942 | |
| C-Class | | | — | | | | 9,651 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (182,499,719 | ) | | | (266,582,144 | ) |
| Advisor Class | | | (6,821,390 | ) | | | (50,173,739 | ) |
| A-Class | | | (6,829,002 | ) | | | (4,134,009 | ) |
| C-Class | | | (17,625,228 | ) | | | (33,962,592 | ) |
| Net increase (decrease) from capital share transactions | | | (11,022,668 | ) | | | 52,352,682 | |
| Net increase in net assets | | | 5,093,744 | | | | 66,637,240 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 116,379,273 | | | | 49,742,033 | |
| End of period | | $ | 121,473,017 | | | $ | 116,379,273 | |
| Undistributed net investment income at end of period | | $ | 4,880 | | | $ | 113,186 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 7,079,335 | | | | 16,459,910 | |
| Advisor Class | | | 407,375 | | | | 2,731,471 | |
| A-Class | | | 305,435 | | | | 224,541 | |
| C-Class | | | 822,565 | | | | 1,981,649 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 11,105 | |
| Advisor Class | | | — | | | | 999 | |
| A-Class | | | — | | | | 268 | |
| C-Class | | | — | | | | 557 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (7,622,142 | ) | | | (13,867,240 | ) |
| Advisor Class | | | (292,716 | ) | | | (2,802,207 | ) |
| A-Class | | | (302,251 | ) | | | (217,683 | ) |
| C-Class | | | (830,619 | ) | | | (1,956,184 | ) |
| Net increase (decrease) in shares | | | (433,018 | ) | | | 2,567,186 | |
| 66 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| HEALTH CARE FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 22.35 | | | $ | 18.83 | | | $ | 17.14 | | | $ | 15.80 | | | $ | 11.20 | | | $ | 14.28 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.01 | ) | | | .09 | | | | .01 | | | | (.02 | ) | | | (.01 | ) | | | .07 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.16 | | | | 3.48 | | | | 1.68 | | | | 1.36 | | | | 4.62 | | | | (3.15 | ) |
| Total from investment operations | | | 3.15 | | | | 3.57 | | | | 1.69 | | | | 1.34 | | | | 4.61 | | | | (3.08 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Net asset value, end of period | | $ | 25.50 | | | $ | 22.35 | | | $ | 18.83 | | | $ | 17.14 | | | $ | 15.80 | | | $ | 11.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 14.09 | % | | | 18.98 | % | | | 9.86 | % | | | 8.48 | % | | | 41.17 | % | | | (21.57 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 105,394 | | | $ | 104,525 | | | $ | 39,036 | | | $ | 19,534 | | | $ | 195,616 | | | $ | 13,920 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.10 | %) | | | 0.45 | % | | | 0.08 | % | | | (0.10 | %) | | | (0.04 | %) | | | 0.48 | % |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.36 | % | | | 1.38 | % | | | 1.37 | % | | | 1.36 | % |
| Portfolio turnover rate | | | 124 | % | | | 266 | % | | | 582 | % | | | 619 | % | | | 241 | % | | | 745 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 20.73 | | | $ | 17.55 | | | $ | 16.04 | | | $ | 14.85 | | | $ | 10.58 | | | $ | 13.57 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.07 | ) | | | (.06 | ) | | | (.07 | ) | | | (.05 | ) | | | (.04 | ) | | | .01 | |
| Net gain (loss) on investments (realized and unrealized) | | | 2.92 | | | | 3.29 | | | | 1.58 | | | | 1.24 | | | | 4.32 | | | | (3.00 | ) |
| Total from investment operations | | | 2.85 | | | | 3.23 | | | | 1.51 | | | | 1.19 | | | | 4.28 | | | | (2.99 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Net asset value, end of period | | $ | 23.58 | | | $ | 20.73 | | | $ | 17.55 | | | $ | 16.04 | | | $ | 14.85 | | | $ | 10.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.75 | % | | | 18.43 | % | | | 9.41 | % | | | 8.01 | % | | | 40.46 | % | | | (22.03 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,805 | | | $ | 3,605 | | | $ | 4,275 | | | $ | 2,229 | | | $ | 3,432 | | | $ | 6,353 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.59 | %) | | | (0.31 | %) | | | (0.44 | %) | | | (0.36 | %) | | | (0.33 | %) | | | 0.04 | % |
| Total expenses | | | 1.87 | % | | | 1.86 | % | | | 1.85 | % | | | 1.88 | % | | | 1.88 | % | | | 1.93 | % |
| Portfolio turnover rate | | | 124 | % | | | 266 | % | | | 582 | % | | | 619 | % | | | 241 | % | | | 745 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 67 |
| HEALTH CARE FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 21.15 | | | $ | 17.87 | | | $ | 16.30 | | | $ | 15.05 | | | $ | 10.69 | | | $ | 13.68 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.04 | ) | | | .04 | | | | (.02 | ) | | | (.02 | ) | | | (.03 | ) | | | .02 | |
| Net gain (loss) on investments (realized and unrealized) | | | 2.99 | | | | 3.29 | | | | 1.59 | | | | 1.27 | | | | 4.40 | | | | (3.01 | ) |
| Total from investment operations | | | 2.95 | | | | 3.33 | | | | 1.57 | | | | 1.25 | | | | 4.37 | | | | (2.99 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Net asset value, end of period | | $ | 24.10 | | | $ | 21.15 | | | $ | 17.87 | | | $ | 16.30 | | | $ | 15.05 | | | $ | 10.69 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.95 | % | | | 18.65 | % | | | 9.63 | % | | | 8.31 | % | | | 40.88 | % | | | (21.86 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,246 | | | $ | 3,660 | | | $ | 2,964 | | | $ | 1,156 | | | $ | 6,204 | | | $ | 997 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.34 | %) | | | 0.20 | % | | | (0.13 | %) | | | (0.14 | %) | | | (0.25 | %) | | | 0.15 | % |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.60 | % | | | 1.63 | % | | | 1.62 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 124 | % | | | 266 | % | | | 582 | % | | | 619 | % | | | 241 | % | | | 745 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.81 | | | $ | 16.86 | | | $ | 15.50 | | | $ | 14.39 | | | $ | 10.30 | | | $ | 13.28 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.12 | ) | | | (.09 | ) | | | (.14 | ) | | | (.11 | ) | | | (.11 | ) | | | (.08 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.79 | | | | 3.09 | | | | 1.50 | | | | 1.22 | | | | 4.21 | | | | (2.90 | ) |
| Total from investment operations | | | 2.67 | | | | 3.00 | | | | 1.36 | | | | 1.11 | | | | 4.10 | | | | (2.98 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Total distributions | | | — | | | | (.05 | ) | | | — | | | | — | | | | (.01 | ) | | | — | |
| Net asset value, end of period | | $ | 22.48 | | | $ | 19.81 | | | $ | 16.86 | | | $ | 15.50 | | | $ | 14.39 | | | $ | 10.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.48 | % | | | 17.81 | % | | | 8.77 | % | | | 7.71 | % | | | 39.81 | % | | | (22.44 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,028 | | | $ | 4,589 | | | $ | 3,468 | | | $ | 3,870 | | | $ | 8,393 | | | $ | 5,101 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.09 | %) | | | (0.53 | %) | | | (0.91 | %) | | | (0.76 | %) | | | (0.91 | %) | | | (0.65 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.36 | % | | | 2.38 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 124 | % | | | 266 | % | | | 582 | % | | | 619 | % | | | 241 | % | | | 745 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 68 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INTERNET FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that provide products or services designed for or related to the Internet (“Internet Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 6, 2000 |
| Advisor Class | April 6, 2000 |
| A-Class | September 1, 2004 |
| C-Class | April 19, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Google, Inc. — Class A | | | 7.7 | % |
| Facebook, Inc. — Class A | | | 5.3 | % |
| Amazon.com, Inc. | | | 5.3 | % |
| Cisco Systems, Inc. | | | 5.1 | % |
| QUALCOMM, Inc. | | | 4.9 | % |
| eBay, Inc. | | | 4.0 | % |
| Time Warner, Inc. | | | 3.6 | % |
| Priceline.com, Inc. | | | 3.0 | % |
| Yahoo!, Inc. | | | 2.8 | % |
| Baidu, Inc. ADR | | | 2.5 | % |
| Top Ten Total | | | 44.2 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 69 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INTERNET FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.4% | | | | | | | | |
| | | | | | | | | |
| INTERNET SOFTWARE & SERVICES - 52.0% | | | | | | | | |
| Google, Inc. — Class A* | | | 2,652 | | | $ | 2,322,912 | |
| Facebook, Inc. — Class A* | | | 32,288 | | | | 1,622,149 | |
| eBay, Inc.* | | | 21,840 | | | | 1,218,454 | |
| Yahoo!, Inc.* | | | 25,210 | | | | 835,964 | |
| Baidu, Inc. ADR* | | | 4,889 | | | | 758,675 | |
| LinkedIn Corp. — Class A* | | | 3,004 | | | | 739,164 | |
| SINA Corp.* | | | 5,105 | | | | 414,373 | |
| Equinix, Inc.* | | | 2,229 | | | | 409,356 | |
| Akamai Technologies, Inc.* | | | 7,850 | | | | 405,845 | |
| Qihoo 360 Technology Company Ltd. ADR* | | | 4,449 | | | | 370,157 | |
| Rackspace Hosting, Inc.* | | | 6,892 | | | | 363,622 | |
| VeriSign, Inc.* | | | 7,114 | | | | 362,031 | |
| MercadoLibre, Inc. | | | 2,548 | | | | 343,751 | |
| Sohu.com, Inc.* | | | 4,263 | | | | 336,052 | |
| Yandex N.V. — Class A* | | | 8,947 | | | | 325,850 | |
| NetEase, Inc. ADR | | | 4,209 | | | | 305,615 | |
| IAC/InterActiveCorp | | | 5,580 | | | | 305,059 | |
| Youku Tudou, Inc. ADR* | | | 11,113 | | | | 304,496 | |
| CoStar Group, Inc.* | | | 1,800 | | | | 302,220 | |
| SouFun Holdings Ltd. ADR | | | 5,810 | | | | 300,028 | |
| VistaPrint N.V.* | | | 5,240 | | | | 296,165 | |
| YY, Inc. ADR* | | | 5,880 | | | | 275,066 | |
| Yelp, Inc. — Class A* | | | 3,989 | | | | 263,992 | |
| Pandora Media, Inc.* | | | 10,378 | | | | 260,799 | |
| Zillow, Inc. — Class A*,1 | | | 2,746 | | | | 231,680 | |
| AOL, Inc. | | | 6,367 | | | | 220,171 | |
| Cornerstone OnDemand, Inc.* | | | 4,240 | | | | 218,106 | |
| j2 Global, Inc.1 | | | 4,164 | | | | 206,201 | |
| Dealertrack Technologies, Inc.* | | | 4,380 | | | | 187,639 | |
| OpenTable, Inc.* | | | 2,522 | | | | 176,490 | |
| ValueClick, Inc.* | | | 8,335 | | | | 173,785 | |
| Web.com Group, Inc.* | | | 5,330 | | | | 172,372 | |
| Trulia, Inc.* | | | 3,600 | | | | 169,308 | |
| Angie’s List, Inc.*,1 | | | 7,090 | | | | 159,525 | |
| WebMD Health Corp. — Class A* | | | 5,560 | | | | 159,016 | |
| Liquidity Services, Inc.*,1 | | | 4,289 | | | | 143,939 | |
| Monster Worldwide, Inc.* | | | 22,593 | | | | 99,861 | |
| Total Internet Software & Services | | | | | | | 15,759,888 | |
| INTERNET RETAIL - 19.6% | | | | | | | | |
| Amazon.com, Inc.* | | | 5,163 | | | | 1,614,161 | |
| Priceline.com, Inc.* | | | 911 | | | | 920,976 | |
| Netflix, Inc.* | | | 1,906 | | | | 589,354 | |
| TripAdvisor, Inc.* | | | 6,076 | | | | 460,804 | |
| Ctrip.com International Ltd. ADR* | | | 7,300 | | | | 426,539 | |
| Groupon, Inc. — Class A* | | | 31,599 | | | | 354,225 | |
| Expedia, Inc. | | | 6,832 | | | | 353,829 | |
| E-Commerce China Dangdang, Inc. — Class A ADR* | | | 29,090 | | | | 304,863 | |
| Vipshop Holdings Ltd. ADR* | | | 4,770 | | | | 270,936 | |
| Liberty Ventures* | | | 2,779 | | | | 245,024 | |
| HomeAway, Inc.* | | | 7,147 | | | | 200,116 | |
| Shutterfly, Inc.* | | | 3,472 | | | | 194,015 | |
| Total Internet Retail | | | | | | | 5,934,842 | |
| cOMMUNicATiONs EqUipMENT - 14.3% | | | | | | | | |
| Cisco Systems, Inc. | | | 65,928 | | | | 1,544,033 | |
| QUALCOMM, Inc. | | | 22,253 | | | | 1,498,962 | |
| Juniper Networks, Inc.* | | | 21,742 | | | | 431,796 | |
| F5 Networks, Inc.* | | | 3,950 | | | | 338,752 | |
| Blackberry Ltd.*,1 | | | 40,068 | | | | 318,541 | |
| Ciena Corp.* | | | 8,517 | | | | 212,755 | |
| Total Communications Equipment | | | | | | | 4,344,839 | |
| sysTEMs sOFTwArE - 4.3% | | | | | | | | |
| Symantec Corp. | | | 23,557 | | | | 583,036 | |
| Red Hat, Inc.* | | | 8,142 | | | | 375,672 | |
| Check Point Software Technologies Ltd.* | | | 6,299 | | | | 356,271 | |
| Total Systems Software | | | | | | | 1,314,979 | |
| MOviEs & ENTErTAiNMENT - 3.6% | | | | | | | | |
| Time Warner, Inc. | | | 16,756 | | | | 1,102,712 | |
| ApplicATiON sOFTwArE - 2.9% | | | | | | | | |
| Intuit, Inc. | | | 9,162 | | | | 607,533 | |
| TIBCO Software, Inc.* | | | 10,887 | | | | 278,598 | |
| Total Application Software | | | | | | | 886,131 | |
| sEMicONDUcTOrs - 1.7% | | | | | | | | |
| Broadcom Corp. — Class A | | | 20,182 | | | | 524,934 | |
| iNvEsTMENT BANkiNg & BrOkErAgE - 1.0% | | | | | | | | |
| E*TRADE Financial Corp.* | | | 18,635 | | | | 307,478 | |
| Total Common Stocks | | | | | | | | |
| (Cost $24,414,607) | | | | | | | 30,175,803 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENT††,2 - 1.0% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 314,097 | | | | 314,097 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $314,097) | | | | | | | 314,097 | |
| | | | | | | | | |
| SECURITIES LENDING COLLATERAL††,3 - 1.7% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 260,606 | | | | 260,606 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 243,344 | | | | 243,344 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $503,950) | | | | | | | 503,950 | |
| Total Investments - 102.1% | | | | | | | | |
| (Cost $25,232,654) | | | | | | $ | 30,993,850 | |
| Other Assets & Liabilities, net - (2.1)% | | | | | | | (647,607 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 30,346,243 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6.
ADR — American Depositary Receipt |
| 70 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
INTERNET FUND
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $476,178 of securities loaned | | | | |
| (cost $24,414,607) | | $ | 30,175,803 | |
| Repurchase agreements, at value | | | | |
| (cost $818,047) | | | 818,047 | |
| Total investments | | | | |
| (cost $25,232,654) | | | 30,993,850 | |
| Receivables: | | | | |
| Fund shares sold | | | 291,184 | |
| Interest | | | 500 | |
| Dividends | | | 365 | |
| Total assets | | | 31,285,899 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 503,950 | |
| Fund shares redeemed | | | 392,900 | |
| Management fees | | | 20,222 | |
| Transfer agent and administrative fees | | | 5,948 | |
| Distribution and service fees | | | 3,454 | |
| Portfolio accounting fees | | | 2,379 | |
| Miscellaneous | | | 10,803 | |
| Total liabilities | �� | | 939,656 | |
Net assets | | $ | 30,346,243 | |
Net assets consist of: | | | | |
| Paid in capital | | $ | 25,397,091 | |
| Accumulated net investment loss | | | (108,333 | ) |
| Accumulated net realized loss on investments | | | (703,711 | ) |
| Net unrealized appreciation on investments | | | 5,761,196 | |
| Net assets | | $ | 30,346,243 | |
| Investor Class: | | | | |
| Net assets | | $ | 19,890,055 | |
| Capital shares outstanding | | | 285,399 | |
| Net asset value per share | | $ | 69.69 | |
| Advisor Class: | | | | |
| Net assets | | $ | 3,731,235 | |
| Capital shares outstanding | | | 57,584 | |
| Net asset value per share | | $ | 64.80 | |
| A-Class: | | | | |
| Net assets | | $ | 4,814,842 | |
| Capital shares outstanding | | | 72,597 | |
| Net asset value per share | | $ | 66.32 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 69.63 | |
C-Class: | | | | |
| Net assets | | $ | 1,910,111 | |
| Capital shares outstanding | | | 31,165 | |
| Net asset value per share | | $ | 61.29 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 | | | | |
| | | | | |
Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $59) | | $ | 28,170 | |
| Income from securities lending, net | | | 3,830 | |
| Interest | | | 4 | |
| Total investment income | | | 32,004 | |
| | | | | |
Expenses: | | | | |
| Management fees | | | 57,935 | |
| Transfer agent and administrative fees | | | 17,039 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 2,595 | |
| A-Class | | | 2,056 | |
| C-Class | | | 6,596 | |
| Portfolio accounting fees | | | 6,816 | |
| Custodian fees | | | 791 | |
| Trustees’ fees* | | | 387 | |
| Line of credit fees | | | 166 | |
| Miscellaneous | | | 10,145 | |
| Total expenses | | | 104,526 | |
| Net investment loss | | | (72,522 | ) |
| | | | | |
Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 299,970 | |
| Net realized gain | | | 299,970 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 2,517,296 | |
| Net change in unrealized appreciation (depreciation) | | | 2,517,296 | |
| Net realized and unrealized gain | | | 2,817,266 | |
| Net increase in net assets resulting from operations | | $ | 2,744,744 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 71 |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (72,522 | ) | | $ | (76,382 | ) |
| Net realized gain on investments | | | 299,970 | | | | 884,433 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 2,517,296 | | | | (551,262 | ) |
| Net increase in net assets resulting from operations | | | 2,744,744 | | | | 256,789 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net realized gains | | | | | | | | |
| Investor Class | | | — | | | | (63,522 | ) |
| Advisor Class | | | — | | | | (15,594 | ) |
| A-Class | | | — | | | | (16,401 | ) |
| C-Class | | | — | | | | (17,867 | ) |
| Total distributions to shareholders | | | — | | | | (113,384 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 67,391,251 | | | | 31,124,261 | |
| Advisor Class | | | 3,404,749 | | | | 453,813 | |
| A-Class | | | 4,347,583 | | | | 2,380,935 | |
| C-Class | | | 8,210,234 | | | | 9,906,871 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 62,343 | |
| Advisor Class | | | — | | | | 14,930 | |
| A-Class | | | — | | | | 16,078 | |
| C-Class | | | — | | | | 16,446 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (55,431,873 | ) | | | (31,339,015 | ) |
| Advisor Class | | | (488,225 | ) | | | (678,019 | ) |
| A-Class | | | (1,104,285 | ) | | | (2,032,055 | ) |
| C-Class | | | (7,692,000 | ) | | | (9,501,396 | ) |
| Net increase from capital share transactions | | | 18,637,434 | | | | 425,192 | |
| Net increase in net assets | | | 21,382,178 | | | | 568,597 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 8,964,065 | | | | 8,395,468 | |
| End of period | | $ | 30,346,243 | | | $ | 8,964,065 | |
| Accumulated net investment loss at end of period | | $ | (108,333 | ) | | $ | (35,811 | ) |
| | | | | | | | | |
Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 1,023,494 | | | | 609,789 | |
| Advisor Class | | | 55,105 | | | | 9,956 | |
| A-Class | | | 69,349 | | | | 46,920 | |
| C-Class | | | 153,056 | | | | 221,607 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 1,290 | |
| Advisor Class | | | — | | | | 331 | |
| A-Class | | | — | | | | 349 | |
| C-Class | | | — | | | | 384 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (848,243 | ) | | | (620,499 | ) |
| Advisor Class | | | (8,190 | ) | | | (14,374 | ) |
| A-Class | | | (19,303 | ) | | | (41,403 | ) |
| C-Class | | | (144,558 | ) | | | (213,154 | ) |
| Net increase in shares | | | 280,710 | | | | 1,196 | |
| 72 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 55.46 | | | $ | 51.90 | | | $ | 52.28 | | | $ | 41.74 | | | $ | 26.58 | | | $ | 38.55 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.29 | ) | | | (.44 | ) | | | (.51 | ) | | | (.34 | ) | | | (.38 | ) | | | (.29 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 14.52 | | | | 5.26 | | | | .13 | | | | 10.88 | | | | 15.54 | | | | (11.23 | ) |
| Total from investment operations | | | 14.23 | | | | 4.82 | | | | (.38 | ) | | | 10.54 | | | | 15.16 | | | | (11.52 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net realized gains | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net asset value, end of period | | $ | 69.69 | | | $ | 55.46 | | | $ | 51.90 | | | $ | 52.28 | | | $ | 41.74 | | | $ | 26.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 25.66 | % | | | 9.65 | % | | | (0.73 | %) | | | 25.25 | % | | | 57.04 | % | | | (29.63 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 19,890 | | | $ | 6,109 | | | $ | 6,206 | | | $ | 20,589 | | | $ | 21,924 | | | $ | 61,745 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.90 | %) | | | (0.87 | %) | | | (1.05 | %) | | | (0.69 | %) | | | (1.12 | %) | | | (1.01 | %) |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.36 | % | | | 1.39 | % | | | 1.37 | % | | | 1.35 | % |
| Portfolio turnover rate | | | 383 | % | | | 442 | % | | | 380 | % | | | 291 | % | | | 443 | % | | | 550 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 51.70 | | | $ | 48.71 | | | $ | 49.31 | | | $ | 39.57 | | | $ | 25.32 | | | $ | 36.95 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.43 | ) | | | (.64 | ) | | | (.71 | ) | | | (.59 | ) | | | (.58 | ) | | | (.41 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 13.53 | | | | 4.89 | | | | .11 | | | | 10.33 | | | | 14.83 | | | | (10.77 | ) |
| Total from investment operations | | | 13.10 | | | | 4.25 | | | | (.60 | ) | | | 9.74 | | | | 14.25 | | | | (11.18 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net realized gains | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net asset value, end of period | | $ | 64.80 | | | $ | 51.70 | | | $ | 48.71 | | | $ | 49.31 | | | $ | 39.57 | | | $ | 25.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 25.34 | % | | | 9.13 | % | | | (1.24 | %) | | | 24.61 | % | | | 56.28 | % | | | (29.99 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,731 | | | $ | 552 | | | $ | 719 | | | $ | 2,124 | | | $ | 3,908 | | | $ | 3,604 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.44 | %) | | | (1.36 | %) | | | (1.58 | %) | | | (1.32 | %) | | | (1.74 | %) | | | (1.43 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.86 | % | | | 1.89 | % | | | 1.88 | % | | | 1.87 | % |
| Portfolio turnover rate | | | 383 | % | | | 442 | % | | | 380 | % | | | 291 | % | | | 443 | % | | | 550 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 73 |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 52.85 | | | $ | 49.63 | | | $ | 50.13 | | | $ | 40.12 | | | $ | 25.62 | | | $ | 37.29 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.35 | ) | | | (.52 | ) | | | (.64 | ) | | | (.46 | ) | | | (.50 | ) | | | (.33 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 13.82 | | | | 5.00 | | | | .14 | | | | 10.47 | | | | 15.00 | | | | (10.89 | ) |
| Total from investment operations | | | 13.47 | | | | 4.48 | | | | (.50 | ) | | | 10.01 | | | | 14.50 | | | | (11.22 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net realized gains | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net asset value, end of period | | $ | 66.32 | | | $ | 52.85 | | | $ | 49.63 | | | $ | 50.13 | | | $ | 40.12 | | | $ | 25.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 25.49 | % | | | 9.41 | % | | | (1.00 | %) | | | 24.95 | % | | | 56.60 | % | | | (29.82 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,815 | | | $ | 1,192 | | | $ | 828 | | | $ | 1,101 | | | $ | 2,989 | | | $ | 91 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.17 | %) | | | (1.08 | %) | | | (1.39 | %) | | | (1.01 | %) | | | (1.44 | %) | | | (1.07 | %) |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.61 | % | | | 1.64 | % | | | 1.63 | % | | | 1.62 | % |
| Portfolio turnover rate | | | 383 | % | | | 442 | % | | | 380 | % | | | 291 | % | | | 443 | % | | | 550 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 49.03 | | | $ | 46.50 | | | $ | 47.30 | | | $ | 38.17 | | | $ | 24.56 | | | $ | 36.01 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.51 | ) | | | (.85 | ) | | | (.94 | ) | | | (.83 | ) | | | (.66 | ) | | | (.59 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 12.77 | | | | 4.64 | | | | .14 | | | | 9.96 | | | | 14.27 | | | | (10.41 | ) |
| Total from investment operations | | | 12.26 | | | | 3.79 | | | | (.80 | ) | | | 9.13 | | | | 13.61 | | | | (11.00 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net realized gains | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (1.26 | ) | | | — | | | | — | | | | — | | | | (.45 | ) |
| Net asset value, end of period | | $ | 61.29 | | | $ | 49.03 | | | $ | 46.50 | | | $ | 47.30 | | | $ | 38.17 | | | $ | 24.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 25.01 | % | | | 8.55 | % | | | (1.69 | %) | | | 23.92 | % | | | 55.42 | % | | | (30.28 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,910 | | | $ | 1,111 | | | $ | 643 | | | $ | 1,770 | | | $ | 1,057 | | | $ | 602 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.85 | %) | | | (1.91 | %) | | | (2.17 | %) | | | (1.92 | %) | | | (2.00 | %) | | | (1.95 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.36 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 383 | % | | | 442 | % | | | 380 | % | | | 291 | % | | | 443 | % | | | 550 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 74 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
LEISURE FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies engaged in leisure and entertainment businesses (“Leisure Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | June 3, 1998 |
| A-Class | September 1, 2004 |
| C-Class | May 3, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Philip Morris International, Inc. | | | 4.0 | % |
| Comcast Corp. — Class A | | | 3.8 | % |
| Walt Disney Co. | | | 3.7 | % |
| McDonald’s Corp. | | | 3.4 | % |
| Twenty-First Century Fox, Inc. | | | 3.1 | % |
| Altria Group, Inc. | | | 2.8 | % |
| Time Warner, Inc. | | | 2.7 | % |
| Starbucks Corp. | | | 2.7 | % |
| Las Vegas Sands Corp. | | | 2.6 | % |
| Viacom, Inc. — Class B | | | 2.2 | % |
| Top Ten Total | | | 31.0 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 75 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| lEisUrE FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.9% | | | | | | | | |
| | | | | | | | | |
| MOviEs & ENTErTAiNMENT - 16.0% | | | | | | | | |
| Walt Disney Co. | | | 17,574 | | | $ | 1,133,348 | |
| Twenty-First Century Fox, Inc. | | | 28,140 | | | | 942,690 | |
| Time Warner, Inc. | | | 12,602 | | | | 829,338 | |
| Viacom, Inc. — Class B | | | 8,118 | | | | 678,502 | |
| Lions Gate Entertainment Corp.* | | | 6,807 | | | | 238,585 | |
| Madison Square Garden Co. — Class A* | | | 3,960 | | | | 229,957 | |
| Live Nation Entertainment, Inc.* | | | 11,700 | | | | 217,035 | |
| Cinemark Holdings, Inc. | | | 6,436 | | | | 204,279 | |
| Regal Entertainment Group — Class A | | | 9,480 | | | | 179,930 | |
| DreamWorks Animation SKG, Inc. — | | | | | | | | |
| Class A* | | | 5,640 | | | | 160,514 | |
| Total Movies & Entertainment | | | | | | | 4,814,178 | |
| rEsTAUrANTs - 15.1% | | | | | | | | |
| McDonald’s Corp. | | | 10,749 | | | | 1,034,161 | |
| Starbucks Corp. | | | 10,538 | | | | 811,110 | |
| Yum! Brands, Inc. | | | 8,341 | | | | 595,464 | |
| Chipotle Mexican Grill, Inc. — Class A* | | | 919 | | | | 393,975 | |
| Darden Restaurants, Inc. | | | 5,483 | | | | 253,808 | |
| Dunkin’ Brands Group, Inc. | | | 5,210 | | | | 235,805 | |
| Panera Bread Co. — Class A* | | | 1,408 | | | | 223,210 | |
| Domino’s Pizza, Inc. | | | 3,040 | | | | 206,568 | |
| Wendy’s Co. | | | 23,120 | | | | 196,058 | |
| Brinker International, Inc. | | | 4,150 | | | | 168,200 | |
| Cheesecake Factory, Inc. | | | 3,664 | | | | 161,033 | |
| Buffalo Wild Wings, Inc.* | | | 1,397 | | | | 155,374 | |
| Krispy Kreme Doughnuts, Inc.* | | | 6,030 | | | | 116,620 | |
| Total Restaurants | | | | | | | 4,551,386 | |
| cABlE & sATElliTE - 14.5% | | | | | | | | |
| Comcast Corp. — Class A | | | 25,583 | | | | 1,155,072 | |
| Time Warner Cable, Inc. | | | 5,322 | | | | 593,935 | |
| DIRECTV* | | | 9,792 | | | | 585,072 | |
| Liberty Global plc — Class A* | | | 6,639 | | | | 526,805 | |
| DISH Network Corp. — Class A | | | 10,316 | | | | 464,323 | |
| Charter Communications, Inc. — Class A* | | | 2,920 | | | | 393,499 | |
| AMC Networks, Inc. — Class A* | | | 3,420 | | | | 234,202 | |
| Cablevision Systems Corp. — Class A | | | 12,958 | | | | 218,213 | |
| Starz — Class A* | | | 7,177 | | | | 201,889 | |
| Total Cable & Satellite | | | | | | | 4,373,010 | |
| TOBAccO - 10.0% | | | | | | | | |
| Philip Morris International, Inc. | | | 13,936 | | | | 1,206,718 | |
| Altria Group, Inc. | | | 24,809 | | | | 852,189 | |
| Reynolds American, Inc. | | | 10,895 | | | | 531,458 | |
| Lorillard, Inc. | | | 9,522 | | | | 426,395 | |
| Total Tobacco | | | | | | | 3,016,760 | |
| cAsiNOs & gAMiNg - 8.4% | | | | | | | | |
| Las Vegas Sands Corp. | | | 11,707 | | | | 777,579 | |
| Wynn Resorts Ltd. | | | 2,721 | | | | 429,945 | |
| MGM Resorts International* | | | 16,080 | | | | 328,675 | |
| Melco Crown Entertainment Ltd. ADR* | | | 8,553 | | | | 272,242 | |
| Penn National Gaming, Inc.* | | | 3,953 | | | | 218,838 | |
| International Game Technology | | | 11,538 | | | | 218,414 | |
| Bally Technologies, Inc.* | | | 2,417 | | | | 174,169 | |
| Boyd Gaming Corp.* | | | 9,090 | | | | 128,624 | |
| Total Casinos & Gaming | | | | | | | 2,548,486 | |
| BrOADcAsTiNg - 8.1% | | | | | | | | |
| CBS Corp. — Class B | | | 10,965 | | | | 604,829 | |
| Discovery Communications, Inc. — | | | | | | | | |
| Class A* | | | 7,000 | | | | 590,940 | |
| Liberty Media Corp. — Class A* | | | 3,010 | | | | 442,922 | |
| Scripps Networks Interactive, Inc. — | | | | | | | | |
| Class A | | | 4,510 | | | | 352,276 | |
| Grupo Televisa SAB ADR | | | 8,830 | | | | 246,799 | |
| Sinclair Broadcast Group, Inc. — Class A | | | 6,200 | | | | 207,824 | |
| Total Broadcasting | | | | | | | 2,445,590 | |
| HOTEls, rEsOrTs & crUisE liNEs - 6.1% | | | | | | | | |
| Carnival Corp. | | | 15,584 | | | | 508,662 | |
| Starwood Hotels & Resorts | | | | | | | | |
| Worldwide, Inc. | | | 5,716 | | | | 379,828 | |
| Marriott International, Inc. — Class A | | | 8,803 | | | | 370,254 | |
| Royal Caribbean Cruises Ltd. | | | 7,802 | | | | 298,661 | |
| Wyndham Worldwide Corp. | | | 4,895 | | | | 298,448 | |
| Total Hotels, Resorts & Cruise Lines | | | | | | | 1,855,853 | |
| pUBlisHiNg - 5.1% | | | | | | | | |
| Thomson Reuters Corp.1 | | | 16,304 | | | | 570,802 | |
| News Corp. — Class A* | | | 19,943 | | | | 320,284 | |
| Gannett Company, Inc. | | | 10,016 | | | | 268,329 | |
| Washington Post Co. — Class B | | | 390 | | | | 238,427 | |
| New York Times Co. — Class A* | | | 11,950 | | | | 150,212 | |
| Total Publishing | | | | | | | 1,548,054 | |
| DisTillErs & viNTNErs - 4.3% | | | | | | | | |
| Brown-Forman Corp. — Class B | | | 5,783 | | | | 393,996 | |
| Constellation Brands, Inc. — Class A* | | | 6,081 | | | | 349,049 | |
| Beam, Inc. | | | 5,274 | | | | 340,964 | |
| Diageo plc ADR | | | 1,770 | | | | 224,932 | |
| Total Distillers & Vintners | | | | | | | 1,308,941 | |
| lEisUrE prODUcTs - 3.8% | | | | | | | | |
| Mattel, Inc. | | | 9,299 | | | | 389,256 | |
| Polaris Industries, Inc. | | | 2,455 | | | | 317,137 | |
| Hasbro, Inc.1 | | | 5,372 | | | | 253,236 | |
| Brunswick Corp. | | | 5,044 | | | | 201,306 | |
| Total Leisure Products | | | | | | | 1,160,935 | |
| BrEwErs - 3.2% | | | | | | | | |
| Cia de Bebidas das Americas ADR | | | 8,666 | | | | 332,341 | |
| Anheuser-Busch InBev N.V. ADR | | | 3,243 | | | | 321,706 | |
| Molson Coors Brewing Co. — Class B | | | 6,296 | | | | 315,618 | |
| Total Brewers | | | | | | | 969,665 | |
| HOME ENTErTAiNMENT sOFTwArE - 2.9% | | | | | | | | |
| Activision Blizzard, Inc. | | | 27,151 | | | | 452,607 | |
| Electronic Arts, Inc.* | | | 11,260 | | | | 287,693 | |
| Take-Two Interactive Software, Inc.* | | | 7,829 | | | | 142,175 | |
| Total Home Entertainment Software | | | | | | | 882,475 | |
| 76 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| lEisUrE FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| MOTOrcyclE MANUFAcTUrErs - 1.3% | | | | | | |
| Harley-Davidson, Inc. | | | 6,267 | | | $ | 402,592 | |
| lEisUrE FAciliTiEs - 1.1% | | | | | | | | |
| Six Flags Entertainment Corp. | | | 5,400 | | | | 182,466 | |
| Life Time Fitness, Inc.* | | | 3,039 | | | | 156,417 | |
| Total Leisure Facilities | | | | | | | 338,883 | |
| Total Common Stocks | | | | | | | | |
| (Cost $21,701,357) | | | | | | | 30,216,808 | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.9% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 261,498 | | | | 261,498 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $261,498) | | | | | | | 261,498 | |
| SECURITIES LENDING COLLATERAL††,3 - 1.6% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 255,202 | | | | 255,202 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 238,296 | | | | 238,296 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $493,498) | | | | | | | 493,498 | |
| Total Investments - 102.4% | | | | | | | | |
| (Cost $22,456,353) | | | | | | $ | 30,971,804 | |
| Other Assets & Liabilities, net - (2.4)% | | | | | | | (738,849 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 30,232,955 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
| | ADR — American Depositary Receipt |
| | plc — Public Limited Company |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 77 |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $479,246 of securities loaned | | | | |
| (cost $21,701,357) | | $ | 30,216,808 | |
| Repurchase agreements, at value | | | | |
| (cost $754,996) | | | 754,996 | |
| Total investments | | | | |
| (cost $22,456,353) | | | 30,971,804 | |
| Receivables: | | | | |
| Fund shares sold | | | 243,578 | |
| Dividends | | | 54,670 | |
| Foreign taxes reclaim | | | 667 | |
| Interest | | | 134 | |
| Total assets | | | 31,270,853 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 493,498 | |
| Fund shares redeemed | | | 484,532 | |
| Management fees | | | 21,892 | |
| Transfer agent and administrative fees | | | 6,439 | |
| Portfolio accounting fees | | | 2,575 | |
| Distribution and service fees | | | 2,467 | |
| Miscellaneous | | | 26,495 | |
| Total liabilities | | | 1,037,898 | |
| Net assets | | $ | 30,232,955 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 26,096,665 | |
| Undistributed net investment income | | | 249,409 | |
| Accumulated net realized loss on investments | | | (4,628,570 | ) |
| Net unrealized appreciation on investments | | | 8,515,451 | |
| Net assets | | $ | 30,232,955 | |
| Investor Class: | | | | |
| Net assets | | $ | 24,293,256 | |
| Capital shares outstanding | | | 475,290 | |
| Net asset value per share | | $ | 51.11 | |
| Advisor Class: | | | | |
| Net assets | | $ | 3,166,085 | |
| Capital shares outstanding | | | 67,163 | |
| Net asset value per share | | $ | 47.14 | |
| A-Class: | | | | |
| Net assets | | $ | 1,425,440 | |
| Capital shares outstanding | | | 29,624 | |
| Net asset value per share | | $ | 48.12 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 50.52 | |
| C-Class: | | | | |
| Net assets | | $ | 1,348,174 | |
| Capital shares outstanding | | | 29,832 | |
| Net asset value per share | | $ | 45.19 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $3,140) | | $ | 272,097 | |
| Income from securities lending, net | | | 1,133 | |
| Interest | | | 12 | |
| Total investment income | | | 273,242 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 129,300 | |
| Transfer agent and administrative fees | | | 38,029 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 7,579 | |
| A-Class | | | 2,265 | |
| C-Class | | | 5,888 | |
| Portfolio accounting fees | | | 15,211 | |
| Custodian fees | | | 1,586 | |
| Trustees’ fees* | | | 1,339 | |
| Line of credit fees | | | 33 | |
| Miscellaneous | | | 22,698 | |
| Total expenses | | | 223,928 | |
| Net investment income | | | 49,314 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 1,796,151 | |
| Net realized gain | | | 1,796,151 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 1,794,959 | |
| Net change in unrealized appreciation (depreciation) | | | 1,794,959 | |
| Net realized and unrealized gain | | | 3,591,110 | |
| Net increase in net assets resulting from operations | | $ | 3,640,424 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 78 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
LEISURE FUND
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 49,314 | | | $ | 200,095 | |
| Net realized gain (loss) on investments | | | 1,796,151 | | | | (1,458,372 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 1,794,959 | | | | 4,422,133 | |
| Net increase in net assets resulting from operations | | | 3,640,424 | | | | 3,163,856 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (21,538 | ) |
| Advisor Class | | | — | | | | (1,404 | ) |
| A-Class | | | — | | | | (533 | ) |
| C-Class | | | — | | | | (670 | ) |
| Total distributions to shareholders | | | — | | | | (24,145 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 39,143,726 | | | | 121,992,772 | |
| Advisor Class | | | 6,607,190 | | | | 1,469,892 | |
| A-Class | | | 1,316,223 | | | | 1,396,599 | |
| C-Class | | | 841,447 | | | | 999,420 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 21,523 | |
| Advisor Class | | | — | | | | 1,397 | |
| A-Class | | | — | | | | 520 | |
| C-Class | | | — | | | | 625 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (39,742,323 | ) | | | (115,360,323 | ) |
| Advisor Class | | | (5,043,739 | ) | | | (1,820,349 | ) |
| A-Class | | | (1,546,133 | ) | | | (584,020 | ) |
| C-Class | | | (566,027 | ) | | | (1,535,038 | ) |
| Net increase from capital share transactions | | | 1,010,364 | | | | 6,583,018 | |
| Net increase in net assets | | | 4,650,788 | | | | 9,722,729 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 25,582,167 | | | | 15,859,438 | |
| End of period | | $ | 30,232,955 | | | $ | 25,582,167 | |
| Undistributed net investment income at end of period | | $ | 249,409 | | | $ | 200,095 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 796,198 | | | | 3,272,413 | |
| Advisor Class | | | 148,727 | | | | 41,315 | |
| A-Class | | | 30,080 | | | | 36,502 | |
| C-Class | | | 19,788 | | | | 28,954 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 562 | |
| Advisor Class | | | — | | | | 39 | |
| A-Class | | | — | | | | 14 | |
| C-Class | | | — | | | | 18 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (810,725 | ) | | | (3,126,614 | ) |
| Advisor Class | | | (111,430 | ) | | | (51,650 | ) |
| A-Class | | | (33,716 | ) | | | (16,098 | ) |
| C-Class | | | (13,189 | ) | | | (46,312 | ) |
| Net increase in shares | | | 25,733 | | | | 139,143 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 79 |
LEISURE 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 y | | | ear Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 44.93 | | | $ | 36.94 | | | $ | 33.50 | | | $ | 27.48 | | | $ | 15.40 | | | $ | 31.72 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .11 | | | | .36 | | | | .17 | | | | (.02 | ) | | | .03 | | | | .01 | |
| Net gain (loss) on investments (realized and unrealized) | | | 6.07 | | | | 7.66 | | | | 3.27 | | | | 6.04 | | | | 12.05 | | | | (16.33 | ) |
| Total from investment operations | | | 6.18 | | | | 8.02 | | | | 3.44 | | | | 6.02 | | | | 12.08 | | | | (16.32 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 51.11 | | | $ | 44.93 | | | $ | 36.94 | | | $ | 33.50 | | | $ | 27.48 | | | $ | 15.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.75 | % | | | 21.74 | % | | | 10.27 | % | | | 21.91 | % | | | 78.44 | % | | | (51.45 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 24,293 | | | $ | 22,005 | | | $ | 12,687 | | | $ | 2,141 | | | $ | 13,186 | | | $ | 4,132 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.44 | % | | | 0.92 | % | | | 0.49 | % | | | (0.07 | %) | | | 0.13 | % | | | 0.05 | % |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.35 | % | | | 1.39 | % | | | 1.37 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 150 | % | | | 517 | % | | | 797 | % | | | 963 | % | | | 943 | % | | | 1,529 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 41.54 | | | $ | 34.33 | | | $ | 31.29 | | | $ | 25.81 | | | $ | 14.53 | | | $ | 30.06 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.03 | ) | | | .29 | | | | (.01 | ) | | | (.16 | ) | | | (.11 | ) | | | (.03 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.63 | | | | 6.95 | | | | 3.05 | | | | 5.64 | | | | 11.39 | | | | (15.50 | ) |
| Total from investment operations | | | 5.60 | | | | 7.24 | | | | 3.04 | | | | 5.48 | | | | 11.28 | | | | (15.53 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 47.14 | | | $ | 41.54 | | | $ | 34.33 | | | $ | 31.29 | | | $ | 25.81 | | | $ | 14.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.48 | % | | | 21.12 | % | | | 9.72 | % | | | 21.23 | % | | | 77.63 | % | | | (51.66 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,166 | | | $ | 1,241 | | | $ | 1,379 | | | $ | 582 | | | $ | 1,111 | | | $ | 373 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.14 | %) | | | 0.80 | % | | | (0.03 | %) | | | (0.61 | %) | | | (0.56 | %) | | | (0.11 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.86 | % | | | 1.89 | % | | | 1.88 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 150 | % | | | 517 | % | | | 797 | % | | | 963 | % | | | 943 | % | | | 1,529 | % |
| 80 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
LEISURE FUND
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 42.35 | | | $ | 34.91 | | | $ | 31.75 | | | $ | 26.13 | | | $ | 14.67 | | | $ | 30.30 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .02 | | | | .29 | | | | .07 | | | | (.05 | ) | | | .17 | | | | (.04 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.75 | | | | 7.18 | | | | 3.09 | | | | 5.67 | | | | 11.29 | | | | (15.59 | ) |
| Total from investment operations | | | 5.77 | | | | 7.47 | | | | 3.16 | | | | 5.62 | | | | 11.46 | | | | (15.63 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 48.12 | | | $ | 42.35 | | | $ | 34.91 | | | $ | 31.75 | | | $ | 26.13 | | | $ | 14.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.62 | % | | | 21.42 | % | | | 9.95 | % | | | 21.51 | % | | | 78.12 | % | | | (51.58 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,425 | | | $ | 1,409 | | | $ | 448 | | | $ | 1,157 | | | $ | 489 | | | $ | 25 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.10 | % | | | 0.80 | % | | | 0.23 | % | | | (0.18 | %) | | | 0.74 | % | | | (0.16 | %) |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.60 | % | | | 1.63 | % | | | 1.63 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 150 | % | | | 517 | % | | | 797 | % | | | 963 | % | | | 943 | % | | | 1,529 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 39.92 | | | $ | 33.16 | | | $ | 30.36 | | | $ | 25.19 | | | $ | 14.26 | | | $ | 29.66 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.12 | ) | | | .01 | | | | (.15 | ) | | | (.30 | ) | | | (.22 | ) | | | (.18 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.39 | | | | 6.78 | | | | 2.95 | | | | 5.47 | | | | 11.15 | | | | (15.22 | ) |
| Total from investment operations | | | 5.27 | | | | 6.79 | | | | 2.80 | | | | 5.17 | | | | 10.93 | | | | (15.40 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 45.19 | | | $ | 39.92 | | | $ | 33.16 | | | $ | 30.36 | | | $ | 25.19 | | | $ | 14.26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.20 | % | | | 20.54 | % | | | 9.19 | % | | | 20.52 | % | | | 76.65 | % | | | (51.92 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,348 | | | $ | 928 | | | $ | 1,345 | | | $ | 828 | | | $ | 929 | | | $ | 123 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.58 | %) | | | 0.03 | % | | | (0.50 | %) | | | (1.13 | %) | | | (1.01 | %) | | | (0.78 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.35 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 150 | % | | | 517 | % | | | 797 | % | | | 963 | % | | | 943 | % | | | 1,529 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 81 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
PRECIOUS METALS FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in U.S. and foreign companies that are involved in the precious metals sector, including exploration, mining, production and development, and other precious metals related services (“Precious Metals Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | | |
| Investor Class | | | December 1, 1993 |
| Advisor Class | | | August 1, 2003 |
| A-Class | | | September 1, 2004 |
| C-Class | | | April 27, 2001 |
| Ten Largest Holdings (% of Total Net Assets) |
| Freeport-McMoRan Copper & Gold, Inc. | | | 9.6 | % |
| Barrick Gold Corp. | | | 7.4 | % |
| Newmont Mining Corp. | | | 7.2 | % |
| Goldcorp, Inc. | | | 6.5 | % |
| Silver Wheaton Corp. | | | 4.8 | % |
| Randgold Resources Ltd. ADR | | | 3.7 | % |
| Kinross Gold Corp. | | | 3.6 | % |
| AngloGold Ashanti Ltd. ADR | | | 3.5 | % |
| Southern Copper Corp. | | | 3.4 | % |
| Agnico Eagle Mines Ltd. | | | 3.4 | % |
| Top Ten Total | | | 53.1 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 82 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| PRECIOUS METALS FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.6% | | | | | | | | |
| | | | | | | | | |
| GOLD - 67.6% | | | | | | | | |
| Barrick Gold Corp. | | | 260,424 | | | $ | 4,849,094 | |
| Newmont Mining Corp. | | | 168,997 | | | | 4,748,816 | |
| Goldcorp, Inc. | | | 162,710 | | | | 4,232,087 | |
| Randgold Resources Ltd. ADR | | | 33,836 | | | | 2,420,289 | |
| Kinross Gold Corp. | | | 470,523 | | | | 2,376,141 | |
| AngloGold Ashanti Ltd. ADR | | | 171,859 | | | | 2,282,288 | |
| Agnico Eagle Mines Ltd. | | | 84,922 | | | | 2,247,885 | |
| Yamana Gold, Inc.1 | | | 211,719 | | | | 2,201,878 | |
| Royal Gold, Inc. | | | 42,229 | | | | 2,054,863 | |
| Eldorado Gold Corp. | | | 290,786 | | | | 1,951,174 | |
| Gold Fields Ltd. ADR | | | 394,457 | | | | 1,802,668 | |
| Cia de Minas Buenaventura SAA ADR | | | 146,670 | | | | 1,717,506 | |
| New Gold, Inc.* | | | 262,440 | | | | 1,569,391 | |
| IAMGOLD Corp. | | | 307,665 | | | | 1,461,409 | |
| Harmony Gold Mining Company Ltd. ADR | | | 349,516 | | | | 1,181,364 | |
| AuRico Gold, Inc. | | | 304,939 | | | | 1,161,818 | |
| Allied Nevada Gold Corp.*,1 | | | 243,976 | | | | 1,019,820 | |
| Franco-Nevada Corp.1 | | | 21,326 | | | | 965,215 | |
| B2Gold Corp.* | | | 333,674 | | | | 827,512 | |
| Gold Resource Corp.1 | | | 121,205 | | | | 803,589 | |
| Seabridge Gold, Inc.*,1 | | | 72,966 | | | | 763,224 | |
| Novagold Resources, Inc.*,1 | | | 280,462 | | | | 650,672 | |
| Pretium Resources, Inc.* | | | 47,728 | | | | 328,846 | |
| Alamos Gold, Inc. | | | 11,529 | | | | 179,045 | |
| Newcrest Mining Ltd. ADR | | | 16,142 | | | | 173,785 | |
| Detour Gold Corp.* | | | 19,022 | | | | 160,926 | |
| Golden Star Resources Ltd.*,1 | | | 396,900 | | | | 158,760 | |
| Total Gold | | | | | | | 44,290,065 | |
| PRECIOUS METALS & MINERALS - 19.0% | | | | | | | | |
| Silver Wheaton Corp. | | | 126,617 | | | | 3,136,304 | |
| Pan American Silver Corp. | | | 157,146 | | | | 1,657,890 | |
| Coeur Mining, Inc.* | | | 121,158 | | | | 1,459,954 | |
| Stillwater Mining Co.* | | | 125,643 | | | | 1,383,329 | |
| Hecla Mining Co. | | | 390,376 | | | | 1,225,781 | |
| Silver Standard Resources, Inc.* | | | 169,842 | | | | 1,044,528 | |
| First Majestic Silver Corp.* | | | 80,241 | | | | 951,658 | |
| Endeavour Silver Corp.* | | | 149,346 | | | | 642,188 | |
| McEwen Mining, Inc.*,1 | | | 174,956 | | | | 419,894 | |
| Dominion Diamond Corp.* | | | 27,722 | | | | 337,931 | |
| Tahoe Resources, Inc.* | | | 10,853 | | | | 194,486 | |
| Total Precious Metals & Minerals | | | | | | | 12,453,943 | |
| DIVERSIFIED METALS & MINING - 13.0% | | | | | | | | |
| Freeport-McMoRan Copper & Gold, Inc. | | | 190,355 | | | | 6,296,944 | |
| Southern Copper Corp. | | | 82,805 | | | | 2,255,608 | |
| Total Diversified Metals & Mining | | | | | | | 8,552,552 | |
| Total Common Stocks | | | | | | | | |
| (Cost $42,808,794) | | | | | | | 65,296,560 | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENT††,2 - 0.7% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 476,345 | | | | 476,345 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $476,345) | | | | | | | 476,345 | |
| | | | | | | | | |
| SECURITIES LENDING COLLATERAL††,3 - 7.3% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 2,487,217 | | | | 2,487,217 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 2,322,463 | | | | 2,322,463 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $4,809,680) | | | | | | | 4,809,680 | |
| Total Investments - 107.6% | | | | | | | | |
| (Cost $48,094,819) | | | | | | $ | 70,582,585 | |
| Other Assets & Liabilities, net - (7.6)% | | | | | | | (4,970,403 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 65,612,182 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
| | ADR — American Depositary Receipt |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 83 |
PRECIOUS METALS FUND
STATEMENT OF
ASSETS AND LIABILITIES (Unaudited) |
| September 30, 2013 | | | | |
| | | | | |
| Assets: | | | | |
| Investments, at value - including $4,364,146 of securities loaned | | | | |
| (cost $42,808,794) | | $ | 65,296,560 | |
| Repurchase agreements, at value | | | | |
| (cost $5,286,025) | | | 5,286,025 | |
| Total investments | | | | |
| (cost $48,094,819) | | | 70,582,585 | |
| Receivables: | | | | |
| Securities sold | | | 1,513,622 | |
| Fund shares sold | | | 81,243 | |
| Dividends | | | 12,333 | |
| Interest | | | 2,368 | |
| Total assets | | | 72,192,151 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 4,809,680 | |
| Fund shares redeemed | | | 1,648,884 | |
| Management fees | | | 40,922 | |
| Transfer agent and administrative fees | | | 13,641 | |
| Distribution and service fees | | | 11,818 | |
| Portfolio accounting fees | | | 5,456 | |
| Miscellaneous | | | 49,568 | |
| Total liabilities | | | 6,579,969 | |
| Net assets | | $ | 65,612,182 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 88,702,110 | |
| Undistributed net investment income | | | 849,853 | |
| Accumulated net realized loss on investments | | | (46,427,545 | ) |
| Net unrealized appreciation on investments | | | 22,487,764 | |
| Net assets | | $ | 65,612,182 | |
| Investor Class: | | | | |
| Net assets | | $ | 45,961,867 | |
| Capital shares outstanding | | | 1,265,532 | |
| Net asset value per share | | $ | 36.32 | |
| Advisor Class: | | | | |
| Net assets | | $ | 5,797,022 | |
| Capital shares outstanding | | | 167,981 | |
| Net asset value per share | | $ | 34.51 | |
| A-Class: | | | | |
| Net assets | | $ | 3,596,615 | |
| Capital shares outstanding | | | 101,820 | |
| Net asset value per share | | $ | 35.32 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 37.08 | |
| C-Class: | | | | |
| Net assets | | $ | 10,256,678 | |
| Capital shares outstanding | | | 320,585 | |
| Net asset value per share | | $ | 31.99 | |
STATEMENT OF
OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $62,636) | | $ | 1,153,631 | |
| Income from securities lending, net | | | 22,191 | |
| Interest | | | 40 | |
| Total investment income | | | 1,175,862 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 318,329 | |
| Transfer agent and administrative fees | | | 106,110 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 12,532 | |
| A-Class | | | 5,190 | |
| C-Class | | | 61,751 | |
| Portfolio accounting fees | | | 42,441 | |
| Registration fees | | | 34,357 | |
| Trustees’ fees* | | | 6,982 | |
| Custodian fees | | | 3,693 | |
| Line of credit fees | | | 117 | |
| Miscellaneous | | | 26,417 | |
| Total expenses | | | 617,919 | |
| Net investment income | | | 557,943 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (19,440,378 | ) |
| Foreign currency | | | (97 | ) |
| Net realized loss | | | (19,440,475 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (19,432,322 | ) |
| Foreign currency | | | (2 | ) |
| Net change in unrealized appreciation (depreciation) | | | (19,432,324 | ) |
| Net realized and unrealized loss | | | (38,872,799 | ) |
| Net decrease in net assets resulting from operations | | $ | (38,314,856 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 84 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
PRECIOUS METALS FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 557,943 | | | $ | 472,985 | |
| Net realized loss on investments | | | (19,440,475 | ) | | | (2,819,942 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (19,432,324 | ) | | | (17,844,799 | ) |
| Net decrease in net assets resulting from operations | | | (38,314,856 | ) | | | (20,191,756 | ) |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (192,477 | ) |
| Advisor Class | | | — | | | | (8,168 | ) |
| A-Class | | | — | | | | (15,320 | ) |
| C-Class | | | — | | | | (41,649 | ) |
| Net realized gains | | | | | | | | |
| Investor Class | | | — | | | | (4,128,966 | ) |
| Advisor Class | | | — | | | | (175,216 | ) |
| A-Class | | | — | | | | (328,641 | ) |
| C-Class | | | — | | | | (893,443 | ) |
| Total distributions to shareholders | | | — | | | | (5,783,880 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 182,660,930 | | | | 366,675,941 | |
| Advisor Class | | | 33,213,487 | | | | 66,385,396 | |
| A-Class | | | 879,533 | | | | 10,420,356 | |
| C-Class | | | 16,050,781 | | | | 55,350,011 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 4,213,393 | |
| Advisor Class | | | — | | | | 181,989 | |
| A-Class | | | — | | | | 258,731 | |
| C-Class | | | — | | | | 916,449 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (178,423,446 | ) | | | (362,487,037 | ) |
| Advisor Class | | | (29,032,286 | ) | | | (71,618,028 | ) |
| A-Class | | | (1,557,409 | ) | | | (9,211,579 | ) |
| C-Class | | | (18,993,889 | ) | | | (58,172,115 | ) |
| Net increase from capital share transactions | | | 4,797,701 | | | | 2,913,507 | |
| Net decrease in net assets | | | (33,517,155 | ) | | | (23,062,129 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 99,129,337 | | | | 122,191,466 | |
| End of period | | $ | 65,612,182 | | | $ | 99,129,337 | |
| Undistributed net investment income at end of period | | $ | 849,853 | | | $ | 291,910 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 4,480,029 | | | | 5,958,091 | |
| Advisor Class | | | 883,417 | | | | 1,151,300 | |
| A-Class | | | 23,231 | | | | 174,830 | |
| C-Class | | | 455,961 | | | | 1,016,646 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 65,701 | |
| Advisor Class | | | — | | | | 2,974 | |
| A-Class | | | — | | | | 4,140 | |
| C-Class | | | — | | | | 16,087 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (4,596,553 | ) | | | (5,853,272 | ) |
| Advisor Class | | | (779,434 | ) | | | (1,242,772 | ) |
| A-Class | | | (40,491 | ) | | | (159,753 | ) |
| C-Class | | | (542,367 | ) | | | (1,075,323 | ) |
| Net increase (decrease) in shares | | | (116,207 | ) | | | 58,649 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 85 |
PRECIOUS METALS FUND
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 51.65 | | | $ | 65.73 | | | $ | 86.74 | | | $ | 61.73 | | | $ | 46.36 | | | $ | 69.89 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .31 | | | | .34 | | | | (.02 | ) | | | (.28 | ) | | | (.44 | ) | | | (.23 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (15.64 | ) | | | (12.12 | ) | | | (20.70 | ) | | | 25.32 | | | | 15.96 | | | | (23.30 | ) |
| Total from investment operations | | | (15.33 | ) | | | (11.78 | ) | | | (20.72 | ) | | | 25.04 | | | | 15.52 | | | | (23.53 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.10 | ) | | | (.29 | ) | | | (.03 | ) | | | — | | | | — | |
| Net realized gains | | | — | | | | (2.20 | ) | | | — | | | | — | | | | (.08 | ) | | | — | |
| Return of capital | | | — | | | | — | | | | — | | | | — | | | | (.07 | ) | | | — | |
| Total distributions | | | — | | | | (2.30 | ) | | | (.29 | ) | | | (.03 | ) | | | (.15 | ) | | | — | |
| Net asset value, end of period | | $ | 36.32 | | | $ | 51.65 | | | $ | 65.73 | | | $ | 86.74 | | | $ | 61.73 | | | $ | 46.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (29.68 | %) | | | (18.60 | %) | | | (23.91 | %) | | | 40.57 | % | | | 33.44 | % | | | (33.67 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 45,962 | | | $ | 71,386 | | | $ | 79,637 | | | $ | 141,798 | | | $ | 113,546 | | | $ | 160,759 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 1.56 | % | | | 0.55 | % | | | (0.03 | %) | | | (0.37 | %) | | | (0.76 | %) | | | (0.48 | %) |
| Total expenses | | | 1.27 | % | | | 1.25 | % | | | 1.26 | % | | | 1.28 | % | | | 1.28 | % | | | 1.28 | % |
| Portfolio turnover rate | | | 159 | % | | | 206 | % | | | 235 | % | | | 322 | % | | | 383 | % | | | 245 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 49.20 | | | $ | 63.02 | | | $ | 83.59 | | | $ | 59.79 | | | $ | 45.12 | | | $ | 68.36 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .18 | | | | (.02 | ) | | | (.44 | ) | | | (.61 | ) | | | (.79 | ) | | | (.50 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (14.87 | ) | | | (11.50 | ) | | | (19.84 | ) | | | 24.44 | | | | 15.61 | | | | (22.74 | ) |
| Total from investment operations | | | (14.69 | ) | | | (11.52 | ) | | | (20.28 | ) | | | 23.83 | | | | 14.82 | | | | (23.24 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.10 | ) | | | (.29 | ) | | | (.03 | ) | | | — | | | | — | |
| Net realized gains | | | — | | | | (2.20 | ) | | | — | | | | — | | | | (.08 | ) | | | — | |
| Return of capital | | | — | | | | — | | | | — | | | | — | | | | (.07 | ) | | | — | |
| Total distributions | | | — | | | | (2.30 | ) | | | (.29 | ) | | | (.03 | ) | | | (.15 | ) | | | — | |
| Net asset value, end of period | | $ | 34.51 | | | $ | 49.20 | | | $ | 63.02 | | | $ | 83.59 | | | $ | 59.79 | | | $ | 45.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (29.86 | %) | | | (18.99 | %) | | | (24.29 | %) | | | 39.87 | % | | | 32.81 | % | | | (34.00 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,797 | | | $ | 3,148 | | | $ | 9,610 | | | $ | 30,418 | | | $ | 18,677 | | | $ | 12,056 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.97 | % | | | (0.04 | %) | | | (0.59 | %) | | | (0.86 | %) | | | (1.35 | %) | | | (1.02 | %) |
| Total expenses | | | 1.77 | % | | | 1.75 | % | | | 1.76 | % | | | 1.78 | % | | | 1.77 | % | | | 1.77 | % |
| Portfolio turnover rate | | | 159 | % | | | 206 | % | | | 235 | % | | | 322 | % | | | 383 | % | | | 245 | % |
| 86 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
PRECIOUS METALS FUND
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 50.28 | | | $ | 64.21 | | | $ | 84.97 | | | $ | 60.63 | | | $ | 45.64 | | | $ | 68.96 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .20 | | | | .21 | | | | (.22 | ) | | | (.45 | ) | | | (.59 | ) | | | (.36 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (15.16 | ) | | | (11.84 | ) | | | (20.25 | ) | | | 24.82 | | | | 15.73 | | | | (22.96 | ) |
| Total from investment operations | | | (14.96 | ) | | | (11.63 | ) | | | (20.47 | ) | | | 24.37 | | | | 15.14 | | | | (23.32 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.10 | ) | | | (.29 | ) | | | (.03 | ) | | | — | | | | — | |
| Net realized gains | | | — | | | | (2.20 | ) | | | — | | | | — | | | | (.08 | ) | | | — | |
| Return of capital | | | — | | | | — | | | | — | | | | — | | | | (.07 | ) | | | — | |
| Total distributions | | | — | | | | (2.30 | ) | | | (.29 | ) | | | (.03 | ) | | | (.15 | ) | | | — | |
| Net asset value, end of period | | $ | 35.32 | | | $ | 50.28 | | | $ | 64.21 | | | $ | 84.97 | | | $ | 60.63 | | | $ | 45.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (29.75 | %) | | | (18.80 | %) | | | (24.13 | %) | | | 40.21 | % | | | 33.14 | % | | | (33.82 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,597 | | | $ | 5,988 | | | $ | 6,412 | | | $ | 14,919 | | | $ | 8,422 | | | $ | 8,484 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 1.06 | % | | | 0.35 | % | | | (0.30 | %) | | | (0.63 | %) | | | (1.04 | %) | | | (0.71 | %) |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.51 | % | | | 1.53 | % | | | 1.52 | % | | | 1.53 | % |
| Portfolio turnover rate | | | 159 | % | | | 206 | % | | | 235 | % | | | 322 | % | | | 383 | % | | | 245 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 45.72 | | | $ | 59.02 | | | $ | 78.70 | | | $ | 56.58 | | | $ | 42.92 | | | $ | 65.38 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .05 | | | | (.23 | ) | | | (.72 | ) | | | (.94 | ) | | | (.97 | ) | | | (.68 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (13.78 | ) | | | (10.77 | ) | | | (18.67 | ) | | | 23.09 | | | | 14.78 | | | | (21.78 | ) |
| Total from investment operations | | | (13.73 | ) | | | (11.00 | ) | | | (19.39 | ) | | | 22.15 | | | | 13.81 | | | | (22.46 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.10 | ) | | | (.29 | ) | | | (.03 | ) | | | — | | | | — | |
| Net realized gains | | | — | | | | (2.20 | ) | | | — | | | | — | | | | (.08 | ) | | | — | |
| Return of capital | | | — | | | | — | | | | — | | | | — | | | | (.07 | ) | | | — | |
| Total distributions | | | — | | | | (2.30 | ) | | | (.29 | ) | | | (.03 | ) | | | (.15 | ) | | | — | |
| Net asset value, end of period | | $ | 31.99 | | | $ | 45.72 | | | $ | 59.02 | | | $ | 78.70 | | | $ | 56.58 | | | $ | 42.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (30.03 | %) | | | (19.39 | %) | | | (24.68 | %) | | | 39.18 | % | | | 32.14 | % | | | (34.35 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 10,257 | | | $ | 18,608 | | | $ | 26,533 | | | $ | 39,650 | | | $ | 23,483 | | | $ | 20,452 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.30 | % | | | (0.42 | %) | | | (1.04 | %) | | | (1.37 | %) | | | (1.81 | %) | | | (1.43 | %) |
| Total expenses | | | 2.27 | % | | | 2.25 | % | | | 2.26 | % | | | 2.28 | % | | | 2.28 | % | | | 2.27 | % |
| Portfolio turnover rate | | | 159 | % | | | 206 | % | | | 235 | % | | | 322 | % | | | 383 | % | | | 245 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 87 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
REAL ESTATE FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the real estate industry, including real estate investment trusts (“REITs”) (collectively, “Real Estate Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: |
| A-Class | September 1, 2004 |
| C-Class | February 20, 2004 |
| H-Class | February 20, 2004 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Simon Property Group, Inc. | | | 2.7 | % |
| American Tower Corp. — Class A | | | 2.2 | % |
| Public Storage | | | 2.1 | % |
| Equity Residential | | | 1.7 | % |
| Prologis, Inc. | | | 1.7 | % |
| General Growth Properties, Inc. | | | 1.7 | % |
| HCP, Inc. | | | 1.7 | % |
| Ventas, Inc. | | | 1.7 | % |
| Health Care REIT, Inc. | | | 1.7 | % |
| Weyerhaeuser Co. | | | 1.6 | % |
| Top Ten Total | | | 18.8 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 88 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| REAL ESTATE FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.6% | | | | | | | | |
| | | | | | | | | |
| REAL ESTATE INVESTMENT TRUSTS (REITs) - 91.4% | | | | | | | | |
| Specialized REITs - 27.5% | | | | | | | | |
| American Tower Corp. — Class A | | | 3,562 | | | $ | 264,050 | |
| Public Storage | | | 1,533 | | | | 246,123 | |
| HCP, Inc. | | | 4,915 | | | | 201,269 | |
| Ventas, Inc. | | | 3,230 | | | | 198,645 | |
| Health Care REIT, Inc. | | | 3,154 | | | | 196,747 | |
| Weyerhaeuser Co. | | | 6,839 | | | | 195,801 | |
| Host Hotels & Resorts, Inc. | | | 9,727 | | | | 171,876 | |
| Plum Creek Timber Company, Inc. | | | 2,762 | | | | 129,344 | |
| Rayonier, Inc. | | | 2,268 | | | | 126,214 | |
| Extra Space Storage, Inc. | | | 2,317 | | | | 106,003 | |
| Senior Housing Properties Trust | | | 4,311 | | | | 100,619 | |
| Corrections Corporation of America | | | 2,798 | | | | 96,671 | |
| Hospitality Properties Trust | | | 3,350 | | | | 94,805 | |
| Omega Healthcare Investors, Inc. | | | 2,978 | | | | 88,953 | |
| RLJ Lodging Trust | | | 3,460 | | | | 81,275 | |
| LaSalle Hotel Properties | | | 2,806 | | | | 80,027 | |
| Geo Group, Inc. | | | 2,310 | | | | 76,808 | |
| CubeSmart | | | 4,170 | | | | 74,393 | |
| Sovran Self Storage, Inc. | | | 968 | | | | 73,258 | |
| Healthcare Realty Trust, Inc. | | | 3,123 | | | | 72,173 | |
| Healthcare Trust of America, Inc. — Class A | | | 6,851 | | | | 72,073 | |
| EPR Properties | | | 1,469 | | | | 71,599 | |
| Sunstone Hotel Investors, Inc. | | | 5,391 | | | | 68,681 | |
| DiamondRock Hospitality Co. | | | 6,423 | | | | 68,533 | |
| Medical Properties Trust, Inc. | | | 5,419 | | | | 65,949 | |
| Pebblebrook Hotel Trust | | | 2,250 | | | | 64,598 | |
| Strategic Hotels & Resorts, Inc.* | | | 7,290 | | | | 63,277 | |
| Ryman Hospitality Properties, Inc. | | | 1,810 | | | | 62,463 | |
| Potlatch Corp. | | | 1,519 | | | | 60,274 | |
| Total Specialized REITs | | | | | | | 3,272,501 | |
| RETAIL REITs - 18.0% | | | | | | | | |
| Simon Property Group, Inc. | | | 2,161 | | | | 320,324 | |
| General Growth Properties, Inc. | | | 10,588 | | | | 204,242 | |
| Kimco Realty Corp. | | | 6,721 | | | | 135,630 | |
| Realty Income Corp. | | | 3,385 | | | | 134,554 | |
| Macerich Co. | | | 2,340 | | | | 132,070 | |
| Federal Realty Investment Trust | | | 1,205 | | | | 122,247 | |
| Cole Real Estate Investment, Inc. | | | 9,520 | | | | 116,715 | |
| DDR Corp. | | | 6,767 | | | | 106,310 | |
| Taubman Centers, Inc. | | | 1,469 | | | | 98,878 | |
| Regency Centers Corp. | | | 2,045 | | | | 98,876 | |
| National Retail Properties, Inc. | | | 3,023 | | | | 96,192 | |
| Weingarten Realty Investors | | | 3,053 | | | | 89,544 | |
| Tanger Factory Outlet Centers | | | 2,596 | | | | 84,759 | |
| CBL & Associates Properties, Inc. | | | 4,357 | | | | 83,219 | |
| Retail Properties of America, Inc. — Class A | | | 6,010 | | | | 82,638 | |
| Equity One, Inc. | | | 3,503 | | | | 76,576 | |
| Acadia Realty Trust | | | 2,260 | | | | 55,777 | |
| Glimcher Realty Trust | | | 5,683 | | | | 55,409 | |
| Pennsylvania Real Estate Investment Trust | | | 2,770 | | | | 51,799 | |
| Total Retail REITs | | | | | | | 2,145,759 | |
| | | | | | | | | |
| RESIDENTIAL REITs - 13.0% | | | | | | | | |
| Equity Residential | | | 3,889 | | | | 208,333 | |
| AvalonBay Communities, Inc. | | | 1,495 | | | | 190,000 | |
| UDR, Inc. | | | 4,878 | | | | 115,609 | |
| Essex Property Trust, Inc. | | | 760 | | | | 112,252 | |
| Camden Property Trust | | | 1,730 | | | | 106,291 | |
| BRE Properties, Inc. | | | 1,875 | | | | 95,175 | |
| Apartment Investment & | | | | | | | | |
| Management Co. — Class A | | | 3,384 | | | | 94,549 | |
| American Campus Communities, Inc. | | | 2,593 | | | | 88,551 | |
| Home Properties, Inc. | | | 1,489 | | | | 85,990 | |
| Equity Lifestyle Properties, Inc. | | | 2,322 | | | | 79,343 | |
| Mid-America Apartment Communities, Inc. | | | 1,254 | | | | 78,375 | |
| Post Properties, Inc. | | | 1,663 | | | | 74,868 | |
| Colonial Properties Trust | | | 3,011 | | | | 67,717 | |
| Sun Communities, Inc. | | �� | 1,360 | | | | 57,963 | |
| Education Realty Trust, Inc. | | | 5,290 | | | | 48,139 | |
| Associated Estates Realty Corp. | | | 2,760 | | | | 41,152 | |
| Total Residential REITs | | | | | | | 1,544,307 | |
| OFFICE REITs - 11.5% | | | | | | | | |
| Boston Properties, Inc. | | | 1,766 | | | | 188,786 | |
| SL Green Realty Corp. | | | 1,536 | | | | 136,458 | |
| Digital Realty Trust, Inc. | | | 2,288 | | | | 121,493 | |
| Alexandria Real Estate Equities, Inc. | | | 1,551 | | | | 99,031 | |
| Kilroy Realty Corp. | | | 1,866 | | | | 93,207 | |
| BioMed Realty Trust, Inc. | | | 4,810 | | | | 89,418 | |
| Douglas Emmett, Inc. | | | 3,760 | | | | 88,247 | |
| Highwoods Properties, Inc. | | | 2,380 | | | | 84,038 | |
| Piedmont Office Realty | | | | | | | | |
| Trust, Inc. — Class A | | | 4,626 | | | | 80,307 | |
| CommonWealth REIT | | | 3,502 | | | | 76,729 | |
| Brandywine Realty Trust | | | 5,129 | | | | 67,600 | |
| Mack-Cali Realty Corp. | | | 3,045 | | | | 66,807 | |
| Corporate Office Properties Trust | | | 2,854 | | | | 65,927 | |
| DuPont Fabros Technology, Inc. | | | 2,369 | | | | 61,049 | |
| Government Properties Income Trust | | | 2,320 | | | | 55,518 | |
| Total Office REITs | | | | | | | 1,374,615 | |
| MORTGAGE REITs - 10.8% | | | | | | | | |
| Annaly Capital Management, Inc. | | | 13,423 | | | | 155,439 | |
| American Capital Agency Corp. | | | 6,303 | | | | 142,259 | |
| Starwood Property Trust, Inc. | | | 4,342 | | | | 104,078 | |
| Two Harbors Investment Corp. | | | 9,190 | | | | 89,235 | |
| MFA Financial, Inc. | | | 10,572 | | | | 78,761 | |
| NorthStar Realty Finance Corp. | | | 7,630 | | | | 70,806 | |
| Invesco Mortgage Capital, Inc. | | | 4,419 | | | | 68,008 | |
| Hatteras Financial Corp. | | | 3,407 | | | | 63,745 | |
| Newcastle Investment Corp. | | | 10,960 | | | | 61,595 | |
| PennyMac Mortgage Investment Trust | | | 2,710 | | | | 61,463 | |
| Redwood Trust, Inc. | | | 3,090 | | | | 60,842 | |
| New Residential Investment Corp. | | | 9,190 | | | | 60,838 | |
| ARMOUR Residential REIT, Inc. | | | 14,330 | | | | 60,186 | |
| CYS Investments, Inc. | | | 6,846 | | | | 55,658 | |
| Colony Financial, Inc. | | | 2,760 | | | | 55,145 | |
| American Capital Mortgage Investment Corp. | | | 2,540 | | | | 50,190 | |
| iStar Financial, Inc.* | | | 4,090 | | | | 49,244 | |
| Total Mortgage REITs | | | | | | | 1,287,492 | |
| | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 89 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| REAL ESTATE FUND |
| | | Shares | | | Value | |
| | | | | | | |
| DIVERSIFIED REITs - 7.2% | | | | | | | | |
| Vornado Realty Trust | | | 2,211 | | | $ | 185,856 | |
| Liberty Property Trust | | | 2,976 | | | | 105,946 | |
| Duke Realty Corp. | | | 6,713 | | | | 103,649 | |
| WP Carey, Inc. | | | 1,582 | | | | 102,355 | |
| Spirit Realty Capital, Inc. | | | 9,505 | | | | 87,256 | |
| Lexington Realty Trust | | | 6,623 | | | | 74,376 | |
| American Realty Capital Properties, Inc. | | | 5,890 | | | | 71,858 | |
| Cousins Properties, Inc. | | | 6,420 | | | | 66,062 | |
| Washington Real Estate Investment Trust | | | 2,450 | | | | 61,912 | |
| Total Diversified REITs | | | | | | | 859,270 | |
| INDUSTRIAL REITs - 3.4% | | | | | | | | |
| Prologis, Inc. | | | 5,449 | | | | 204,992 | |
| DCT Industrial Trust, Inc. | | | 10,100 | | | | 72,619 | |
| EastGroup Properties, Inc. | | | 1,091 | | | | 64,598 | |
| First Industrial Realty Trust, Inc. | | | 3,960 | | | | 64,429 | |
| Total Industrial REITs | | | | | | | 406,638 | |
| Total Real Estate Investment Trusts (REITs) | | | | | | | 10,890,582 | |
| REAL ESTATE MANAGEMENT & DEVELOPMENT - 8.2% | | | | | | | | |
| Real Estate services - 3.8% | | | | | | | | |
| CBRE Group, Inc. — Class A* | | | 5,740 | | | | 132,766 | |
| Realogy Holdings Corp.* | | | 2,744 | | | | 118,047 | |
| Altisource Portfolio Solutions S.A.* | | | 732 | | | | 102,487 | |
| Jones Lang LaSalle, Inc. | | | 1,073 | | | | 93,673 | |
| Total Real Estate services | | | | | | | 446,973 | |
| REAL ESTATE OPERATING COMPANIES - 2.1% | | | | | | | | |
| Brookfield Office Properties, Inc. | | | 8,266 | | | | 157,632 | |
| Forest City Enterprises, Inc. — Class A* | | | 4,872 | | | | 92,276 | |
| Total Real Estate Operating Companies | | | | | | | 249,908 | |
| DIVERSIFIED REAL ESTATE ACTIVITIES - 1.4% | | | | | | | | |
| Brookfield Asset Management, | | | | | | | | |
| Inc. — Class A | | | 2,890 | | | | 108,086 | |
| St. Joe Co.* | | | 3,248 | | | | 63,726 | |
| Total Diversified Real Estate Activities | | | | | | | 171,812 | |
| REAL ESTATE DEVELOPMENT - 0.9% | | | | | | | | |
| Howard Hughes Corp.* | | | 933 | | | | 104,841 | |
| Total Real Estate Management & Development | | | | | | | 973,534 | |
| Total Common stocks | | | | | | | | |
| (Cost $8,815,993) | | | | | | | 11,864,116 | |
| | | | | | | | | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENT††,1 - 0.2% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 18,159 | | | | 18,159 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $18,159) | | | | | | | 18,159 | |
| Total Investments - 99.8% | | | | | | | | |
| (Cost $8,834,152) | | | | | | $ | 11,882,275 | |
| Other Assets & Liabilities, net - 0.2% | | | | | | | 26,744 | |
| Total Net Assets - 100.0% | | | | | | $ | 11,909,019 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreement — See Note 5. |
REIT — Real Estate Investment Trust
| | |
| 90 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $8,815,993) | | $ | 11,864,116 | |
| Repurchase agreements, at value | | | | |
| (cost $18,159) | | | 18,159 | |
| Total investments | | | | |
| (cost $8,834,152) | | | 11,882,275 | |
| Cash | | | 692 | |
| Receivables: | | | | |
| Securities sold | | | 1,436,318 | |
| Dividends | | | 66,394 | |
| Fund shares sold | | | 11,197 | |
| Total assets | | | 13,396,876 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 1,463,329 | |
| Management fees | | | 5,812 | |
| Distribution and service fees | | | 2,647 | |
| Transfer agent and administrative fees | | | 1,710 | |
| Portfolio accounting fees | | | 684 | |
| Miscellaneous | | | 13,675 | |
| Total liabilities | | | 1,487,857 | |
| Net assets | | $ | 11,909,019 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 25,500,102 | |
| Undistributed net investment income | | | 368,243 | |
| Accumulated net realized loss on investments | | | (17,007,449 | ) |
| Net unrealized appreciation on investments | | | 3,048,123 | |
| Net assets | | $ | 11,909,019 | |
| A-Class: | | | | |
| Net assets | | $ | 5,070,720 | |
| Capital shares outstanding | | | 156,052 | |
| Net asset value per share | | $ | 32.49 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 34.11 | |
| C-Class: | | | | |
| Net assets | | $ | 1,433,381 | |
| Capital shares outstanding | | | 47,812 | |
| Net asset value per share | | $ | 29.98 | |
| H-Class: | | | | |
| Net assets | | $ | 5,404,918 | |
| Capital shares outstanding | | | 166,645 | |
| Net asset value per share | | $ | 32.43 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $2,515) | | $ | 297,380 | |
| Income from securities lending, net | | | 2,023 | |
| Interest | | | 6 | |
| Total investment income | | | 299,409 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 81,446 | |
| Transfer agent and administrative fees | | | 23,954 | |
| Distribution and service fees: | | | | |
| A-Class | | | 4,752 | |
| C-Class | | | 12,252 | |
| H-Class | | | 16,140 | |
| Portfolio accounting fees | | | 9,582 | |
| Tax expense | | | 4,750 | |
| Trustees’ fees* | | | 1,583 | |
| Custodian fees | | | 857 | |
| Line of credit fees | | | 129 | |
| Miscellaneous | | | 14,087 | |
| Total expenses | | | 169,532 | |
| Net investment income | | | 129,877 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 2,855,763 | |
| Net realized gain | | | 2,855,763 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Investments | | | (3,954,438 | ) |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | (3,954,438 | ) |
| Net realized and unrealized loss | | | (1,098,675 | ) |
| Net decrease in net assets resulting from operations | | $ | (968,798 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 91 |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 129,877 | | | $ | 447,384 | |
| Net realized gain (loss) on investments | | | 2,855,763 | | | | (718,672 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (3,954,438 | ) | | | 855,154 | |
| Net increase (decrease) in net assets resulting from operations | | | (968,798 | ) | | | 583,866 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| A-Class | | | — | | | | (18,360 | ) |
| C-Class | | | — | | | | (59,353 | ) |
| H-Class | | | — | | | | (292,727 | ) |
| Total distributions to shareholders | | | — | | | | (370,440 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 5,567,823 | | | | 58,943,343 | |
| C-Class | | | 14,932,326 | | | | 43,646,934 | |
| H-Class | | | 85,661,954 | | | | 191,827,597 | |
| Distributions reinvested | | | | | | | | |
| A-Class | | | — | | | | 16,977 | |
| C-Class | | | — | | | | 57,394 | |
| H-Class | | | — | | | | 290,464 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (13,128,801 | ) | | | (48,200,407 | ) |
| C-Class | | | (16,194,004 | ) | | | (42,855,707 | ) |
| H-Class | | | (89,639,828 | ) | | | (195,933,585 | ) |
| Net increase (decrease) from capital share transactions | | | (12,800,530 | ) | | | 7,793,010 | |
| Net increase (decrease) in net assets | | | (13,769,328 | ) | | | 8,006,436 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 25,678,347 | | | | 17,671,911 | |
| End of period | | $ | 11,909,019 | | | $ | 25,678,347 | |
| Undistributed net investment income at end of period | | $ | 368,243 | | | $ | 238,366 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 167,486 | | | | 1,864,738 | |
| C-Class | | | 474,323 | | | | 1,492,700 | |
| H-Class | | | 2,471,621 | | | | 6,095,718 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| A-Class | | | — | | | | 557 | |
| C-Class | | | — | | | | 2,027 | |
| H-Class | | | — | | | | 9,539 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (374,341 | ) | | | (1,580,487 | ) |
| C-Class | | | (517,761 | ) | | | (1,467,018 | ) |
| H-Class | | | (2,603,825 | ) | | | (6,253,367 | ) |
| Net increase (decrease) in shares | | | (382,497 | ) | | | 164,407 | |
| |
| 92 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 34.43 | | | $ | 30.27 | | | $ | 29.06 | | | $ | 24.24 | | | $ | 12.83 | | | $ | 32.42 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .38 | | | | .58 | | | | .45 | | | | .27 | | | | .44 | | | | .74 | |
| Net gain (loss) on investments (realized and unrealized) | | | (2.32 | ) | | | 4.18 | | | | 1.07 | | | | 5.17 | | | | 11.11 | | | | (19.43 | ) |
| Total from investment operations | | | (1.94 | ) | | | 4.76 | | | | 1.52 | | | | 5.44 | | | | 11.55 | | | | (18.69 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.60 | ) | | | (.31 | ) | | | (.62 | ) | | | (.14 | ) | | | (.90 | ) |
| Total distributions | | | — | | | | (.60 | ) | | | (.31 | ) | | | (.62 | ) | | | (.14 | ) | | | (.90 | ) |
| Net asset value, end of period | | $ | 32.49 | | | $ | 34.43 | | | $ | 30.27 | | | $ | 29.06 | | | $ | 24.24 | | | $ | 12.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (5.63 | %) | | | 16.03 | % | | | 5.42 | % | | | 22.72 | % | | | 90.16 | % | | | (58.00 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,071 | | | $ | 12,495 | | | $ | 2,364 | | | $ | 3,991 | | | $ | 4,303 | | | $ | 1,554 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 2.20 | % | | | 1.82 | % | | | 1.59 | % | | | 1.07 | % | | | 2.15 | % | | | 2.81 | % |
| Total expenses | | | 1.70 | % | | | 1.61 | % | | | 1.61 | % | | | 1.63 | % | | | 1.65 | % | | | 1.68 | % |
| Portfolio turnover rate | | | 408 | % | | | 699 | % | | | 974 | % | | | 485 | % | | | 1,520 | % | | | 780 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 31.89 | | | $ | 28.29 | | | $ | 27.41 | | | $ | 23.11 | | | $ | 12.33 | | | $ | 31.44 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .18 | | | | .27 | | | | .22 | | | | .10 | | | | .40 | | | | .66 | |
| Net gain (loss) on investments (realized and unrealized) | | | (2.09 | ) | | | 3.93 | | | | .97 | | | | 4.82 | | | | 10.52 | | | | (18.87 | ) |
| Total from investment operations | | | (1.91 | ) | | | 4.20 | | | | 1.19 | | | | 4.92 | | | | 10.92 | | | | (18.21 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.60 | ) | | | (.31 | ) | | | (.62 | ) | | | (.14 | ) | | | (.90 | ) |
| Total distributions | | | — | | | | (.60 | ) | | | (.31 | ) | | | (.62 | ) | | | (.14 | ) | | | (.90 | ) |
| Net asset value, end of period | | $ | 29.98 | | | $ | 31.89 | | | $ | 28.29 | | | $ | 27.41 | | | $ | 23.11 | | | $ | 12.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (5.99 | %) | | | 15.12 | % | | | 4.57 | % | | | 21.58 | % | | | 88.70 | % | | | (58.28 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,433 | | | $ | 2,910 | | | $ | 1,798 | | | $ | 2,356 | | | $ | 2,143 | | | $ | 1,075 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 1.12 | % | | | 0.92 | % | | | 0.83 | % | | | 0.42 | % | | | 2.06 | % | | | 2.62 | % |
| Total expenses | | | 2.40 | % | | | 2.35 | % | | | 2.36 | % | | | 2.39 | % | | | 2.41 | % | | | 2.42 | % |
| Portfolio turnover rate | | | 408 | % | | | 699 | % | | | 974 | % | | | 485 | % | | | 1,520 | % | | | 780 | % |
| |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 93 |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 34.38 | | | $ | 30.23 | | | $ | 29.02 | | | $ | 24.22 | | | $ | 12.82 | | | $ | 32.40 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .20 | | | | .46 | | | | .42 | | | | .29 | | | | .50 | | | | .61 | |
| Net gain (loss) on investments (realized and unrealized) | | | (2.15 | ) | | | 4.29 | | | | 1.10 | | | | 5.13 | | | | 11.04 | | | | (19.29 | ) |
| Total from investment operations | | | (1.95 | ) | | | 4.75 | | | | 1.52 | | | | 5.42 | | | | 11.54 | | | | (18.68 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.60 | ) | | | (.31 | ) | | | (.62 | ) | | | (.14 | ) | | | (.90 | ) |
| Total distributions | | | — | | | | (.60 | ) | | | (.31 | ) | | | (.62 | ) | | | (.14 | ) | | | (.90 | ) |
| Net asset value, end of period | | $ | 32.43 | | | $ | 34.38 | | | $ | 30.23 | | | $ | 29.02 | | | $ | 24.22 | | | $ | 12.82 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (5.62 | %) | | | 15.95 | % | | | 5.42 | % | | | 22.70 | % | | | 90.15 | % | | | (58.01 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,405 | | | $ | 10,273 | | | $ | 13,511 | | | $ | 22,045 | | | $ | 34,926 | | | $ | 1,757 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 1.15 | % | | | 1.45 | % | | | 1.48 | % | | | 1.13 | % | | | 2.41 | % | | | 2.14 | % |
| Total expenses | | | 1.67 | % | | | 1.60 | % | | | 1.61 | % | | | 1.63 | % | | | 1.68 | % | | | 1.64 | % |
| Portfolio turnover rate | | | 408 | % | | | 699 | % | | | 974 | % | | | 485 | % | | | 1,520 | % | | | 780 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income per share 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. |
| |
| 94 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
RETAILING FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies engaged in merchandising finished goods and services, including department stores, mail order operations and other companies involved in selling products to consumers (“Retailing Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 21, 1998 |
| A-Class | September 1, 2004 |
| C-Class | May 9, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Wal-Mart Stores, Inc. | | | 5.7 | % |
| Amazon.com, Inc. | | | 4.5 | % |
| Home Depot, Inc. | | | 3.8 | % |
| CVS Caremark Corp. | | | 3.1 | % |
| Priceline.com, Inc. | | | 2.9 | % |
| Costco Wholesale Corp. | | | 2.6 | % |
| Lowe’s Companies, Inc. | | | 2.6 | % |
| Walgreen Co. | | | 2.6 | % |
| Target Corp. | | | 2.4 | % |
| TJX Companies, Inc. | | | 2.3 | % |
| Top Ten Total | | | 32.5 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 95 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| RETAILING FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 100.3% | | | | | | | | |
| | | | | | | | | |
| APPAREL RETAIL - 17.1% | | | | | | | | |
| TJX Companies, Inc. | | | 10,122 | | | $ | 570,779 | |
| The Gap, Inc. | | | 9,639 | | | | 388,259 | |
| L Brands, Inc. | | | 6,247 | | | | 381,692 | |
| Ross Stores, Inc. | | | 4,980 | | | | 362,544 | |
| Urban Outfitters, Inc.* | | | 5,759 | | | | 211,758 | |
| Foot Locker, Inc. | | | 6,113 | | | | 207,475 | |
| DSW, Inc. — Class A | | | 2,135 | | | | 182,158 | |
| Ascena Retail Group, Inc.* | | | 8,786 | | | | 175,105 | |
| Buckle, Inc. | | | 2,733 | | | | 147,719 | |
| Chico’s FAS, Inc. | | | 8,666 | | | | 144,376 | |
| Abercrombie & Fitch Co. — Class A | | | 4,076 | | | | 144,168 | |
| American Eagle Outfitters, Inc. | | | 10,290 | | | | 143,957 | |
| Guess?, Inc. | | | 4,740 | | | | 141,489 | |
| Express, Inc.* | | | 5,330 | | | | 125,735 | |
| Men’s Wearhouse, Inc. | | | 3,523 | | | | 119,958 | |
| ANN, Inc.* | | | 3,232 | | | | 117,063 | |
| Genesco, Inc.* | | | 1,761 | | | | 115,486 | |
| Children’s Place Retail Stores, Inc.* | | | 1,798 | | | | 104,032 | |
| Finish Line, Inc. — Class A | | | 4,156 | | | | 103,360 | |
| Jos. A. Bank Clothiers, Inc.* | | | 2,273 | | | | 99,921 | |
| Francesca’s Holdings Corp.* | | | 4,400 | | | | 82,016 | |
| Aeropostale, Inc.* | | | 7,685 | | | | 72,239 | |
| Total Apparel Retail | | | | | | | 4,141,289 | |
| INTERNET RETAIL - 15.2% | | | | | | | | |
| Amazon.com, Inc.* | | | 3,477 | | | | 1,087,048 | |
| Priceline.com, Inc.* | | | 708 | | | | 715,753 | |
| Netflix, Inc.* | | | 1,361 | | | | 420,835 | |
| TripAdvisor, Inc.* | | | 4,065 | | | | 308,290 | |
| Ctrip.com International Ltd. ADR* | | | 4,710 | | | | 275,205 | |
| Expedia, Inc. | | | 4,575 | | | | 236,939 | |
| Groupon, Inc. — Class A* | | | 20,509 | | | | 229,906 | |
| Vipshop Holdings Ltd. ADR* | | | 2,520 | | | | 143,136 | |
| HomeAway, Inc.* | | | 4,780 | | | | 133,840 | |
| Shutterfly, Inc.* | | | 2,340 | | | | 130,759 | |
| Total Internet Retail | | | | | | | 3,681,711 | |
| SPECIALTY STORES - 11.3% | | | | | | | | |
| Tractor Supply Co. | | | 4,242 | | | | 284,934 | |
| Staples, Inc. | | | 19,375 | | | | 283,844 | |
| Tiffany & Co. | | | 3,683 | | | | 282,191 | |
| PetSmart, Inc. | | | 3,432 | | | | 261,724 | |
| Ulta Salon Cosmetics & Fragrance, Inc.* | | | 1,975 | | | | 235,934 | |
| Dick’s Sporting Goods, Inc. | | | 4,347 | | | | 232,043 | |
| GNC Holdings, Inc. — Class A | | | 3,930 | | | | 214,696 | |
| Cabela’s, Inc.* | | | 3,054 | | | | 192,494 | |
| Sally Beauty Holdings, Inc.* | | | 7,056 | | | | 184,585 | |
| Signet Jewelers Ltd. | | | 2,528 | | | | 181,131 | |
| Vitamin Shoppe, Inc.* | | | 2,521 | | | | 110,294 | |
| Hibbett Sports, Inc.* | | | 1,950 | | | | 109,493 | |
| OfficeMax, Inc. | | | 8,100 | | | | 103,599 | |
| Barnes & Noble, Inc.* | | | 6,200 | | | | 80,228 | |
| Total Specialty Stores | | | | | | | 2,757,190 | |
| HYPERMARKETS & SUPER CENTERS - 9.0% | | | | | | | | |
| Wal-Mart Stores, Inc. | | | 18,780 | | | | 1,388,969 | |
| Costco Wholesale Corp. | | | 5,567 | | | | 640,873 | |
| Cia Brasileira de Distribuicao Grupo | | | | | | | | |
| Pao de Acucar ADR | | | 3,462 | | | | 159,321 | |
| Total Hypermarkets & Super Centers | | | | | | | 2,189,163 | |
| AUTOMOTIVE RETAIL - 8.9% | | | | | | | | |
| AutoZone, Inc.* | | | 910 | | | | 384,684 | |
| O’Reilly Automotive, Inc.* | | | 2,703 | | | | 344,876 | |
| CarMax, Inc.* | | | 6,097 | | | | 295,522 | |
| Advance Auto Parts, Inc. | | | 2,781 | | | | 229,933 | |
| AutoNation, Inc.* | | | 4,334 | | | | 226,105 | |
| Penske Automotive Group, Inc. | | | 4,150 | | | | 177,330 | |
| CST Brands, Inc. | | | 4,650 | | | | 138,570 | |
| Murphy USA, Inc.* | | | 3,160 | | | | 127,632 | |
| Lithia Motors, Inc. — Class A | | | 1,720 | | | | 125,491 | |
| Group 1 Automotive, Inc. | | | 1,587 | | | | 123,278 | |
| Total Automotive Retail | | | | | | | 2,173,421 | |
| HOME IMPROVEMENT RETAIL - 7.0% | | | | | | | | |
| Home Depot, Inc. | | | 12,213 | | | | 926,356 | |
| Lowe’s Companies, Inc. | | | 13,245 | | | | 630,594 | |
| Lumber Liquidators Holdings, Inc.* | | | 1,410 | | | | 150,377 | |
| Total Home Improvement Retail | | | | | | | 1,707,327 | |
| GENERAL MERCHANDISE STORES - 6.8% | | | | | | | | |
| Target Corp. | | | 8,984 | | | | 574,797 | |
| Dollar General Corp.* | | | 6,791 | | | | 383,420 | |
| Dollar Tree, Inc.* | | | 5,520 | | | | 315,523 | |
| Family Dollar Stores, Inc. | | | 3,570 | | | | 257,111 | |
| Big Lots, Inc.* | | | 3,588 | | | | 133,079 | |
| Total General Merchandise Stores | | | | | | | 1,663,930 | |
| DEPARTMENT STORES - 6.6% | | | | | | | | |
| Macy’s, Inc. | | | 8,228 | | | | 356,026 | |
| Kohl’s Corp. | | | 5,849 | | | | 302,686 | |
| Nordstrom, Inc. | | | 5,351 | | | | 300,726 | |
| Sears Holdings Corp.*,1 | | | 3,980 | | | | 237,367 | |
| Dillard’s, Inc. — Class A | | | 2,149 | | | | 168,267 | |
| Saks, Inc.* | | | 8,980 | | | | 143,141 | |
| JC Penney Company, Inc.*,1 | | | 12,299 | | | | 108,477 | |
| Total Department Stores | | | | | | | 1,616,690 | |
| DRUG RETAIL - 5.7% | | | | | | | | |
| CVS Caremark Corp. | | | 13,187 | | | | 748,362 | |
| Walgreen Co. | | | 11,696 | | | | 629,245 | |
| Total Drug Retail | | | | | | | 1,377,607 | |
| HOMEFURNISHING RETAIL - 4.5% | | | | | | | | |
| Bed Bath & Beyond, Inc.* | | | 4,838 | | | | 374,267 | |
| Williams-Sonoma, Inc. | | | 3,758 | | | | 211,200 | |
| Restoration Hardware Holdings, Inc.* | | | 2,350 | | | | 148,873 | |
| Pier 1 Imports, Inc. | | | 7,018 | | | | 136,991 | |
| Aaron’s, Inc. | | | 4,677 | | | | 129,553 | |
| Select Comfort Corp.* | | | 4,337 | | | | 105,606 | |
| Total Homefurnishing Retail | | | | | | | 1,106,490 | |
| |
| 96 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| RETAILING FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMPUTER & ELECTRONICS RETAIL - 3.2% | | | | | | | | |
| Best Buy Company, Inc. | | | 8,465 | | | $ | 317,438 | |
| GameStop Corp. — Class A | | | 4,285 | | | | 212,750 | |
| Rent-A-Center, Inc. — Class A | | | 3,456 | | | | 131,674 | |
| Conn’s, Inc.* | | | 2,480 | | | | 124,099 | |
| Total Computer & Electronics Retail | | | | | | | 785,961 | |
| DISTRIBUTORS - 3.1% | | | | | | | | |
| Genuine Parts Co. | | | 3,983 | | | | 322,185 | |
| LKQ Corp.* | | | 8,840 | | | | 281,642 | |
| Pool Corp. | | | 2,540 | | | | 142,570 | |
| Total Distributors | | | | | | | 746,397 | |
| CATALOG RETAIL - 1.9% | | | | | | | | |
| Liberty Interactive Corp. — Class A* | | | 13,413 | | | | 314,803 | |
| HSN, Inc. | | | 2,930 | | | | 157,107 | |
| Total Catalog Retail | | | | | | | 471,910 | |
| Total Common stocks | | | | | | | | |
| (Cost $15,829,359) | | | | | | | 24,419,086 | |
| | | | | | | | | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.3% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 67,219 | | | | 67,219 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $67,219) | | | | | | | 67,219 | |
| SECURITIES LENDING COLLATERAL††,3 - 1.0% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 129,988 | | | | 129,988 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 121,377 | | | | 121,377 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $251,365) | | | | | | | 251,365 | |
| Total Investments - 101.6% | | | | | | | | |
| (Cost $16,147,943) | | | | | | $ | 24,737,670 | |
| Other Assets & Liabilities, net - (1.6)% | | | | | | | (378,011 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 24,359,659 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
| |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 97 |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $246,252 of | | | | |
| securities loaned | | | | |
| (cost $15,829,359) | | $ | 24,419,086 | |
| Repurchase agreements, at value | | | | |
| (cost $318,584) | | | 318,584 | |
| Total investments | | | | |
| (cost $16,147,943) | | | 24,737,670 | |
| Receivables: | | | | |
| Securities sold | | | 625,847 | |
| Fund shares sold | | | 20,889 | |
| Dividends | | | 14,497 | |
| Interest | | | 571 | |
| Total assets | | | 25,399,474 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 745,562 | |
| Upon return of securities loaned | | | 251,365 | |
| Management fees | | | 16,278 | |
| Transfer agent and administrative fees | | | 4,788 | |
| Distribution and service fees | | | 4,008 | |
| Portfolio accounting fees | | | 1,915 | |
| Miscellaneous | | | 15,899 | |
| Total liabilities | | | 1,039,815 | |
| Net assets | | $ | 24,359,659 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 23,762,968 | |
| Accumulated net investment loss | | | (20,754 | ) |
| Accumulated net realized loss on investments | | | (7,972,282 | ) |
| Net unrealized appreciation on investments | | | 8,589,727 | |
| Net assets | | $ | 24,359,659 | |
| Investor Class: | | | | |
| Net assets | | $ | 16,021,075 | |
| Capital shares outstanding | | | 716,978 | |
| Net asset value per share | | $ | 22.35 | |
| Advisor Class: | | | | |
| Net assets | | $ | 3,999,493 | |
| Capital shares outstanding | | | 190,938 | |
| Net asset value per share | | $ | 20.95 | |
| A-Class: | | | | |
| Net assets | | $ | 1,657,569 | |
| Capital shares outstanding | | | 77,601 | |
| Net asset value per share | | $ | 21.36 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 22.43 | |
| C-Class: | | | | |
| Net assets | | $ | 2,681,522 | |
| Capital shares outstanding | | | 136,102 | |
| Net asset value per share | | $ | 19.70 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $158) | | $ | 177,534 | |
| Income from securities lending, net | | | 1,651 | |
| Interest | | | 11 | |
| Total investment income | | | 179,196 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 110,745 | |
| Transfer agent and administrative fees | | | 32,572 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 7,071 | |
| A-Class | | | 3,138 | |
| C-Class | | | 11,360 | |
| Portfolio accounting fees | | | 13,029 | |
| Custodian fees | | | 1,449 | |
| Trustees’ fees* | | | 1,275 | |
| Line of credit fees | | | 131 | |
| Miscellaneous | | | 19,180 | |
| Total expenses | | | 199,950 | |
| Net investment loss | | | (20,754 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (2,262,689 | ) |
| Net realized loss | | | (2,262,689 | ) |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Investments | | | 2,252,284 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | 2,252,284 | |
| Net realized and unrealized loss | | | (10,405 | ) |
| Net decrease in net assets resulting from operations | | $ | (31,159 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| |
| 98 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| RETAILING FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income (loss) | | $ | (20,754 | ) | | $ | 101,139 | |
| Net realized gain (loss) on investments | | | (2,262,689 | ) | | | 1,744,746 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 2,252,284 | | | | (331,652 | ) |
| Net increase (decrease) in net assets resulting from operations | | | (31,159 | ) | | | 1,514,233 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 94,045,683 | | | | 124,440,704 | |
| Advisor Class | | | 15,352,019 | | | | 34,065,876 | |
| A-Class | | | 5,968,630 | | | | 9,815,440 | |
| C-Class | | | 12,796,189 | | | | 28,702,196 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (92,094,648 | ) | | | (145,758,850 | ) |
| Advisor Class | | | (13,980,801 | ) | | | (35,612,946 | ) |
| A-Class | | | (5,932,056 | ) | | | (14,039,858 | ) |
| C-Class | | | (12,220,065 | ) | | | (29,752,249 | ) |
| Net increase (decrease) from capital share transactions | | | 3,934,951 | | | | (28,139,687 | ) |
| Net increase (decrease) in net assets | | | 3,903,792 | | | | (26,625,454 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 20,455,867 | | | | 47,081,321 | |
| End of period | | $ | 24,359,659 | | | $ | 20,455,867 | |
| Accumulated net investment loss at end of period | | $ | (20,754 | ) | | $ | — | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 4,246,859 | | | | 6,997,301 | |
| Advisor Class | | | 765,164 | | | | 2,011,477 | |
| A-Class | | | 284,420 | | | | 575,762 | |
| C-Class | | | 679,978 | | | | 1,831,862 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (4,277,741 | ) | | | (8,243,663 | ) |
| Advisor Class | | | (707,242 | ) | | | (2,120,335 | ) |
| A-Class | | | (286,655 | ) | | | (835,701 | ) |
| C-Class | | | (649,109 | ) | | | (1,893,223 | ) |
| Net increase (decrease) in shares | | | 55,674 | | | | (1,676,520 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 99 |
| RETAILING FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.62 | | | $ | 17.45 | | | $ | 14.66 | | | $ | 12.75 | | | $ | 8.58 | | | $ | 11.54 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | — | c | | | .09 | | | | .01 | | | | .05 | | | | .03 | | | | (.01 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.73 | | | | 2.08 | | | | 2.79 | | | | 1.89 | | | | 4.14 | | | | (2.95 | ) |
| Total from investment operations | | | 2.73 | | | | 2.17 | | | | 2.80 | | | | 1.94 | | | | 4.17 | | | | (2.96 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Net asset value, end of period | | $ | 22.35 | | | $ | 19.62 | | | $ | 17.45 | | | $ | 14.66 | | | $ | 12.75 | | | $ | 8.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.91 | % | | | 12.44 | % | | | 19.14 | % | | | 15.20 | % | | | 48.60 | % | | | (25.65 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 16,021 | | | $ | 14,671 | | | $ | 34,802 | | | $ | 3,776 | | | $ | 12,060 | | | $ | 84,894 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.04 | % | | | 0.51 | % | | | 0.04 | % | | | 0.34 | % | | | 0.28 | % | | | (0.14 | %) |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.34 | % | | | 1.39 | % | | | 1.38 | % | | | 1.32 | % |
| Portfolio turnover rate | | | 485 | % | | | 472 | % | | | 822 | % | | | 1,062 | % | | | 1,049 | % | | | 461 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 18.45 | | | $ | 16.45 | | | $ | 13.91 | | | $ | 12.14 | | | $ | 8.20 | | | $ | 11.10 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | �� | (.06 | ) | | | (.01 | ) | | | (.09 | ) | | | (.07 | ) | | | (.06 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.56 | | | | 2.01 | | | | 2.64 | | | | 1.87 | | | | 4.00 | | | | (2.88 | ) |
| Total from investment operations | | | 2.50 | | | | 2.00 | | | | 2.55 | | | | 1.80 | | | | 3.94 | | | | (2.90 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Net asset value, end of period | | $ | 20.95 | | | $ | 18.45 | | | $ | 16.45 | | | $ | 13.91 | | | $ | 12.14 | | | $ | 8.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.55 | % | | | 12.16 | % | | | 18.38 | % | | | 14.81 | % | | | 48.05 | % | | | (26.13 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,999 | | | $ | 2,454 | | | $ | 3,979 | | | $ | 1,583 | | | $ | 2,350 | | | $ | 901 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.57 | %) | | | (0.05 | %) | | | (0.66 | %) | | | (0.58 | %) | | | (0.57 | %) | | | (0.26 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.84 | % | | | 1.89 | % | | | 1.87 | % | | | 1.88 | % |
| Portfolio turnover rate | | | 485 | % | | | 472 | % | | | 822 | % | | | 1,062 | % | | | 1,049 | % | | | 461 | % |
| 100 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| RETAILING FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 18.79 | | | $ | 16.77 | | | $ | 14.14 | | | $ | 12.31 | | | $ | 8.30 | | | $ | 11.18 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.03 | ) | | | .03 | | | | (.03 | ) | | | .18 | | | | (.01 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.60 | | | | 1.99 | | | | 2.67 | | | | 1.68 | | | | 4.02 | | | | (2.86 | ) |
| Total from investment operations | | | 2.57 | | | | 2.02 | | | | 2.64 | | | | 1.86 | | | | 4.01 | | | | (2.88 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Net asset value, end of period | | $ | 21.36 | | | $ | 18.79 | | | $ | 16.77 | | | $ | 14.14 | | | $ | 12.31 | | | $ | 8.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.68 | % | | | 12.05 | % | | | 18.71 | % | | | 15.09 | % | | | 48.31 | % | | | (25.76 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,658 | | | $ | 1,500 | | | $ | 5,697 | | | $ | 517 | | | $ | 395 | | | $ | 49 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.25 | %) | | | 0.20 | % | | | (0.18 | %) | | | 1.42 | % | | | (0.12 | %) | | | (0.17 | %) |
| Total expenses | | | 1.62 | % | | | 1.59 | % | | | 1.58 | % | | | 1.64 | % | | | 1.62 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 485 | % | | | 472 | % | | | 822 | % | | | 1,062 | % | | | 1,049 | % | | | 461 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 17.40 | | | $ | 15.62 | | | $ | 13.27 | | | $ | 11.65 | | | $ | 7.92 | | | $ | 10.76 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.11 | ) | | | (.06 | ) | | | (.13 | ) | | | (.11 | ) | | | (.10 | ) | | | (.07 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.41 | | | | 1.84 | | | | 2.49 | | | | 1.76 | | | | 3.83 | | | | (2.77 | ) |
| Total from investment operations | | | 2.30 | | | | 1.78 | | | | 2.36 | | | | 1.65 | | | | 3.73 | | | | (2.84 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.01 | ) | | | (.03 | ) | | | — | | | | — | |
| Net asset value, end of period | | $ | 19.70 | | | $ | 17.40 | | | $ | 15.62 | | | $ | 13.27 | | | $ | 11.65 | | | $ | 7.92 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.22 | % | | | 11.40 | % | | | 17.83 | % | | | 14.14 | % | | | 47.10 | % | | | (26.39 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,682 | | | $ | 1,831 | | | $ | 2,603 | | | $ | 2,705 | | | $ | 1,709 | | | $ | 1,008 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.14 | %) | | | (0.39 | %) | | | (0.96 | %) | | | (0.96 | %) | | | (1.08 | %) | | | (0.76 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.35 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 485 | % | | | 472 | % | | | 822 | % | | | 1,062 | % | | | 1,049 | % | | | 461 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 101 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
TECHNOLOGY FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the technology sector, including computer software and service companies, semiconductor manufacturers, networking and telecommunications equipment manufacturers, PC hardware and peripherals companies (“Technology Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 14, 1998 |
| Advisor Class | April 29, 1998 |
| A-Class | September 1, 2004 |
| C-Class | April 18, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | |
| Apple, Inc. | 4.3% |
| Google, Inc. — Class A | 3.4% |
| Microsoft Corp. | 3.3% |
| International Business Machines Corp. | 2.8% |
| Oracle Corp. | 2.4% |
| Facebook, Inc. — Class A | 2.3% |
| Cisco Systems, Inc. | 2.2% |
| Visa, Inc. — Class A | 2.1% |
| QUALCOMM, Inc. | 2.1% |
| Intel Corp. | 2.0% |
| Top Ten Total | 26.9% |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 102 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| TECHNOLOGY FUND | |
| | | Shares | | | Value | |
| | | | | | | | | |
| COMMON STOCKS† - 99.5% | | | | | | | | |
| | | | | | | | | |
| INTERNET SOFTWARE & SERVICES - 18.8% | | | | | | | | |
| Google, Inc. — Class A* | | | 1,411 | | | $ | 1,235,908 | |
| Facebook, Inc. — Class A* | | | 16,340 | | | | 820,922 | |
| eBay, Inc.* | | | 11,054 | | | | 616,703 | |
| Yahoo!, Inc.* | | | 12,760 | | | | 423,122 | |
| Baidu, Inc. ADR* | | | 2,686 | | | | 416,813 | |
| LinkedIn Corp. — Class A* | | | 1,595 | | | | 392,466 | |
| SINA Corp.* | | | 3,731 | | | | 302,845 | |
| MercadoLibre, Inc. | | | 2,207 | | | | 297,746 | |
| Sohu.com, Inc.* | | | 3,700 | | | | 291,671 | |
| Qihoo 360 Technology Company Ltd. ADR* | | | 3,380 | | | | 281,216 | |
| Yandex N.V. — Class A* | | | 7,397 | | | | 269,399 | |
| Equinix, Inc.* | | | 1,185 | | | | 217,625 | |
| Akamai Technologies, Inc.* | | | 4,085 | | | | 211,195 | |
| Rackspace Hosting, Inc.* | | | 3,670 | | | | 193,629 | |
| VeriSign, Inc.* | | | 3,783 | | | | 192,517 | |
| IAC/InterActiveCorp | | | 2,970 | | | | 162,370 | |
| Yelp, Inc. — Class A* | | | 2,120 | | | | 140,302 | |
| Pandora Media, Inc.* | | | 5,400 | | | | 135,702 | |
| Zillow, Inc. — Class A* | | | 1,460 | | | | 123,180 | |
| Total Internet Software & Services | | | | | | | 6,725,331 | |
| SEMICONDUCTORS - 15.6% | | | | | | | | |
| Intel Corp. | | | 31,954 | | | | 732,385 | |
| Texas Instruments, Inc. | | | 11,696 | | | | 470,997 | |
| Taiwan Semiconductor Manufacturing | | | | | | | | |
| Company Ltd. ADR | | | 18,674 | | | | 316,711 | |
| Avago Technologies Ltd. | | | 7,086 | | | | 305,548 | |
| Micron Technology, Inc.* | | | 17,206 | | | | 300,589 | |
| NXP Semiconductor N.V.* | | | 7,570 | | | | 281,680 | |
| ARM Holdings plc ADR | | | 5,822 | | | | 280,155 | |
| Analog Devices, Inc. | | | 5,730 | | | | 269,597 | |
| Broadcom Corp. — Class A | | | 10,222 | | | | 265,874 | |
| Marvell Technology Group Ltd. | | | 23,076 | | | | 265,374 | |
| Xilinx, Inc. | | | 5,328 | | | | 249,670 | |
| Altera Corp. | | | 6,656 | | | | 247,337 | |
| Linear Technology Corp. | | | 5,430 | | | | 215,354 | |
| NVIDIA Corp. | | | 13,623 | | | | 211,974 | |
| Maxim Integrated Products, Inc. | | | 6,992 | | | | 208,362 | |
| Microchip Technology, Inc. | | | 4,951 | | | | 199,476 | |
| Cree, Inc.* | | | 3,200 | | | | 192,608 | |
| Skyworks Solutions, Inc.* | | | 6,119 | | | | 151,996 | |
| LSI Corp. | | | 18,896 | | | | 147,767 | |
| First Solar, Inc.* | | | 3,570 | | | | 143,550 | |
| SunPower Corp. — Class A* | | | 4,870 | | | | 127,399 | |
| Total Semiconductors | | | | | | | 5,584,403 | |
| SYSTEMS SOFTWARE - 10.2% | | | | | | | | |
| Microsoft Corp. | | | 35,307 | | | | 1,176,076 | |
| Oracle Corp. | | | 26,165 | | | | 867,893 | |
| VMware, Inc. — Class A* | | | 4,956 | | | | 400,940 | |
| Symantec Corp. | | | 11,914 | | | | 294,872 | |
| Check Point Software Technologies Ltd.* | | | 4,980 | | | | 281,669 | |
| CA, Inc. | | | 8,712 | | | | 258,485 | |
| Red Hat, Inc.* | | | 4,237 | | | | 195,495 | |
| ServiceNow, Inc.* | | | 3,700 | | | | 192,215 | |
| Total Systems Software | | | | | | | 3,667,645 | |
| DATA PROCESSING & OUTSOURCED SERVICES - 10.2% | | | | |
| Visa, Inc. — Class A | | | 4,026 | | | | 769,368 | |
| Mastercard, Inc. — Class A | | | 956 | | | | 643,178 | |
| Automatic Data Processing, Inc. | | | 5,753 | | | | 416,402 | |
| Paychex, Inc. | | | 6,703 | | | | 272,410 | |
| Fiserv, Inc.* | | | 2,598 | | | | 262,528 | |
| Fidelity National Information Services, Inc. | | | 5,564 | | | | 258,392 | |
| Alliance Data Systems Corp.* | | | 1,109 | | | | 234,520 | |
| Western Union Co. | | | 12,200 | | | | 227,652 | |
| FleetCor Technologies, Inc.* | | | 1,960 | | | | 215,914 | |
| Computer Sciences Corp. | | | 3,836 | | | | 198,475 | |
| Total System Services, Inc. | | | 5,650 | | | | 166,223 | |
| Total Data Processing & Outsourced Services | | | | | | | 3,665,062 | |
| COMMUNICATIONS EQUIPMENT - 9.1% | | | | | | | | |
| Cisco Systems, Inc. | | | 33,372 | | | | 781,573 | |
| QUALCOMM, Inc. | | | 11,258 | | | | 758,339 | |
| Motorola Solutions, Inc. | | | 4,700 | | | | 279,086 | |
| Nokia Oyj ADR* | | | 41,580 | | | | 270,686 | |
| Blackberry Ltd.*,1 | | | 28,585 | | | | 227,251 | |
| Juniper Networks, Inc.* | | | 11,002 | | | | 218,500 | |
| Harris Corp. | | | 3,160 | | | | 187,388 | |
| F5 Networks, Inc.* | | | 2,098 | | | | 179,924 | |
| JDS Uniphase Corp.* | | | 8,947 | | | | 131,610 | |
| Ciena Corp.* | | | 4,436 | | | | 110,811 | |
| Riverbed Technology, Inc.* | | | 7,233 | | | | 105,529 | |
| Total Communications Equipment | | | | | | | 3,250,697 | |
| COMPUTER HARDWARE - 8.0% | | | | | | | | |
| Apple, Inc. | | | 3,226 | | | | 1,537,996 | |
| Hewlett-Packard Co. | | | 21,939 | | | | 460,280 | |
| Dell, Inc. | | | 25,611 | | | | 352,663 | |
| NCR Corp.* | | | 4,640 | | | | 183,790 | |
| 3D Systems Corp.*,1 | | | 3,021 | | | | 163,104 | |
| Stratasys Ltd.* | | | 1,530 | | | | 154,928 | |
| Total Computer Hardware | | | | | | | 2,852,761 | |
| APPLICATION SOFTWARE - 7.5% | | | | | | | | |
| Salesforce.com, Inc.* | | | 7,344 | | | | 381,228 | |
| Adobe Systems, Inc.* | | | 6,768 | | | | 351,530 | |
| Intuit, Inc. | | | 4,766 | | | | 316,033 | |
| SAP AG ADR | | | 3,818 | | | | 282,227 | |
| Workday, Inc. — Class A* | | | 3,210 | | | | 259,785 | |
| Citrix Systems, Inc.* | | | 3,571 | | | | 252,148 | |
| Autodesk, Inc.* | | | 5,088 | | | | 209,473 | |
| Splunk, Inc.* | | | 3,010 | | | | 180,720 | |
| Nuance Communications, Inc.* | | | 9,130 | | | | 170,685 | |
| Informatica Corp.* | | | 3,788 | | | | 147,618 | |
| TIBCO Software, Inc.* | | | 5,664 | | | | 144,942 | |
| Total Application Software | | | | | | | 2,696,389 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 103 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| TECHNOLOGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| IT CONSULTING & OTHER SERVICES - 6.6% | | | | | | | | |
| International Business Machines Corp. | | | 5,368 | | | $ | 994,045 | |
| Accenture plc — Class A | | | 4,787 | | | | 352,515 | |
| Cognizant Technology Solutions | | | | | | | | |
| Corp. — Class A* | | | 4,240 | | | | 348,189 | |
| Infosys Ltd. ADR | | | 5,932 | | | | 285,389 | |
| Teradata Corp.* | | | 3,785 | | | | 209,840 | |
| Leidos Holdings, Inc. | | | 2,634 | | | | 119,900 | |
| Science Applications International Corp.* | | | 1,505 | | | | 50,799 | |
| Total IT Consulting & Other Services | | | | | | | 2,360,677 | |
| COMPUTER STORAGE & PERIPHERALS - 4.6% | | | | | | | | |
| EMC Corp. | | | 20,015 | | | | 511,584 | |
| Seagate Technology plc | | | 7,733 | | | | 338,241 | |
| Western Digital Corp. | | | 4,362 | | | | 276,551 | |
| SanDisk Corp. | | | 4,543 | | | | 270,354 | |
| NetApp, Inc. | | | 6,239 | | | | 265,906 | |
| Total Computer Storage & Peripherals | | | | | | | 1,662,636 | |
| SEMICONDUCTOR EQUIPMENT - 3.4% | | | | | | | | |
| Applied Materials, Inc. | | | 19,585 | | | | 343,521 | |
| ASML Holding N.V. — Class G | | | 3,018 | | | | 298,058 | |
| KLA-Tencor Corp. | | | 3,758 | | | | 228,674 | |
| Lam Research Corp.* | | | 4,064 | | | | 208,036 | |
| Teradyne, Inc.* | | | 7,730 | | | | 127,700 | |
| Total Semiconductor Equipment | | | | | | | 1,205,989 | |
| ELECTRONIC MANUFACTURING SERVICES - 1.8% | | | | | | | | |
| TE Connectivity Ltd. | | | 5,597 | | | | 289,813 | |
| Trimble Navigation Ltd.* | | | 6,633 | | | | 197,066 | |
| Jabil Circuit, Inc. | | | 6,640 | | | | 143,955 | |
| Total Electronic Manufacturing Services | | | | | | | 630,834 | |
| ELECTRONIC COMPONENTS - 1.6% | | | | | | | | |
| Corning, Inc. | | | 22,262 | | | | 324,802 | |
| Amphenol Corp. — Class A | | | 3,281 | | | | 253,884 | |
| Total Electronic Components | | | | | | | 578,686 | |
| HOME ENTERTAINMENT SOFTWARE - 1.4% | | | | | | | | |
| Activision Blizzard, Inc. | | | 18,310 | | | | 305,228 | |
| Electronic Arts, Inc.* | | | 7,575 | | | | 193,541 | |
| Total Home Entertainment Software | | | | | | | 498,769 | |
| OFFICE ELECTRONICS - 0.7% | | | | | | | | |
| Xerox Corp. | | | 24,844 | | | | 255,645 | |
| Total Common Stocks | | | | | | | | |
| (Cost $27,344,408) | | | | | | | 35,635,524 | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.4% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 144,608 | | | | 144,608 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $144,608) | | | | | | | 144,608 | |
| SECURITIES LENDING COLLATERAL††,3 - 0.7% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 129,411 | | | | 129,411 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 120,839 | | | | 120,839 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $250,250) | | | | | | | 250,250 | |
| Total Investments - 100.6% | | | | | | | | |
| (Cost $27,739,266) | | | | | | $ | 36,030,382 | |
| Other Assets & Liabilities, net - (0.6)% | | | | | | | (201,562 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 35,828,820 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 104 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| TECHNOLOGY FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $241,131 of | | | | |
| securities loaned | | | | |
| (cost $27,344,408) | | $ | 35,635,524 | |
| Repurchase agreements, at value | | | | |
| (cost $394,858) | | | 394,858 | |
| Total investments | | | | |
| (cost $27,739,266) | | | 36,030,382 | |
| Cash | | | 1,646 | |
| Receivables: | | | | |
| Fund shares sold | | | 660,629 | |
| Dividends | | | 17,309 | |
| Interest | | | 843 | |
| Total assets | | | 36,710,809 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Securities purchased | | | 383,998 | |
| Upon return of securities loaned | | | 250,250 | |
| Fund shares redeemed | | | 202,234 | |
| Management fees | | | 23,052 | |
| Transfer agent and administrative fees | | | 6,780 | |
| Portfolio accounting fees | | | 2,712 | |
| Distribution and service fees | | | 2,650 | |
| Miscellaneous | | | 10,313 | |
| Total liabilities | | | 881,989 | |
| Net assets | | $ | 35,828,820 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 37,730,183 | |
| Accumulated net investment loss | | | (39,529 | ) |
| Accumulated net realized loss on investments | | | (10,152,950 | ) |
| Net unrealized appreciation on investments | | | 8,291,116 | |
| Net assets | | $ | 35,828,820 | |
| Investor Class: | | | | |
| Net assets | | $ | 30,383,592 | |
| Capital shares outstanding | | | 1,845,331 | |
| Net asset value per share | | $ | 16.47 | |
| Advisor Class: | | | | |
| Net assets | | $ | 1,743,292 | |
| Capital shares outstanding | | | 113,827 | |
| Net asset value per share | | $ | 15.32 | |
| A-Class: | | | | |
| Net assets | | $ | 1,624,127 | |
| Capital shares outstanding | | | 104,324 | |
| Net asset value per share | | $ | 15.57 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 16.35 | |
| C-Class: | | | | |
| Net assets | | $ | 2,077,809 | |
| Capital shares outstanding | | | 142,355 | |
| Net asset value per share | | $ | 14.60 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $56) | | $ | 136,655 | |
| Income from securities lending, net | | | 2,981 | |
| Interest | | | 6 | |
| Total investment income | | | 139,642 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 85,182 | |
| Transfer agent and administrative fees | | | 25,053 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 3,124 | |
| A-Class | | | 2,386 | |
| C-Class | | | 9,299 | |
| Portfolio accounting fees | | | 10,021 | |
| Custodian fees | | | 1,160 | |
| Trustees’ fees* | | | 753 | |
| Line of credit fees | | | 51 | |
| Miscellaneous | | | 14,846 | |
| Total expenses | | | 151,875 | |
| Net investment loss | | | (12,233 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 715,389 | |
| Net realized gain | | | 715,389 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Investments | | | 1,740,123 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | 1,740,123 | |
| Net realized and unrealized gain | | | 2,455,512 | |
| Net increase in net assets resulting | | | | |
| from operations | | $ | 2,443,279 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 105 |
| TECHNOLOGY FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (12,233 | ) | | $ | (14,414 | ) |
| Net realized gain on investments | | | 715,389 | | | | 2,773,692 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 1,740,123 | | | | (3,288,892 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 2,443,279 | | | | (529,614 | ) |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 36,315,920 | | | | 39,415,333 | |
| Advisor Class | | | 924,298 | | | | 407,615 | |
| A-Class | | | 2,188,048 | | | | 3,445,923 | |
| C-Class | | | 14,203,833 | | | | 23,663,292 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (16,102,479 | ) | | | (50,777,143 | ) |
| Advisor Class | | | (616,475 | ) | | | (1,416,694 | ) |
| A-Class | | | (2,772,331 | ) | | | (8,772,441 | ) |
| C-Class | | | (14,078,780 | ) | | | (24,568,978 | ) |
| Net increase (decrease) from capital share transactions | | | 20,062,034 | | | | (18,603,093 | ) |
| Net increase (decrease) in net assets | | | 22,505,313 | | | | (19,132,707 | ) |
| Net assets: | | | | | | | | |
| Beginning of period | | | 13,323,507 | | | | 32,456,214 | |
| End of period | | $ | 35,828,820 | | | $ | 13,323,507 | |
| Accumulated net investment loss at end of period | | $ | (39,529 | ) | | $ | (27,296 | ) |
| Capital Share Activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 2,339,008 | | | | 2,927,741 | |
| Advisor Class | | | 63,103 | | | | 32,225 | |
| A-Class | | | 149,530 | | | | 266,617 | |
| C-Class | | | 1,043,989 | | | | 1,984,139 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (1,066,692 | ) | | | (3,751,652 | ) |
| Advisor Class | | | (44,157 | ) | | | (113,454 | ) |
| A-Class | | | (190,348 | ) | | | (663,608 | ) |
| C-Class | | | (1,034,129 | ) | | | (2,064,584 | ) |
| Net increase (decrease) in shares | | | 1,260,304 | | | | (1,382,576 | ) |
| 106 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| TECHNOLOGY FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.53 | | | $ | 14.31 | | | $ | 13.94 | | | $ | 12.03 | | | $ | 7.70 | | | $ | 11.77 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | — | c | | | .01 | | | | (.01 | ) | | | (.06 | ) | | | (.05 | ) | | | (.03 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.94 | | | | .21 | | | | .38 | | | | 1.97 | | | | 4.38 | | | | (4.04 | ) |
| Total from investment operations | | | 1.94 | | | | .22 | | | | .37 | | | | 1.91 | | | | 4.33 | | | | (4.07 | ) |
| Net asset value, end of period | | $ | 16.47 | | | $ | 14.53 | | | $ | 14.31 | | | $ | 13.94 | | | $ | 12.03 | | | $ | 7.70 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.35 | % | | | 1.54 | % | | | 2.65 | % | | | 15.88 | % | | | 56.23 | % | | | (34.58 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 30,384 | | | $ | 8,325 | | | $ | 19,985 | | | $ | 35,408 | | | $ | 37,391 | | | $ | 11,601 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.02 | % | | | 0.10 | % | | | (0.10 | %) | | | (0.48 | %) | | | (0.52 | %) | | | (0.29 | %) |
| Total expenses | | | 1.37 | % | | | 1.35 | % | | | 1.36 | % | | | 1.39 | % | | | 1.38 | % | | | 1.37 | % |
| Portfolio turnover rate | | | 118 | % | | | 324 | % | | | 487 | % | | | 393 | % | | | 335 | % | | | 564 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.55 | | | $ | 13.41 | | | $ | 13.13 | | | $ | 11.39 | | | $ | 7.32 | | | $ | 11.27 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.04 | ) | | | (.04 | ) | | | (.11 | ) | | | (.11 | ) | | | (.11 | ) | | | (.05 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.81 | | | | .18 | | | | .39 | | | | 1.85 | | | | 4.18 | | | | (3.90 | ) |
| Total from investment operations | | | 1.77 | | | | .14 | | | | .28 | | | | 1.74 | | | | 4.07 | | | | (3.95 | ) |
| Net asset value, end of period | | $ | 15.32 | | | $ | 13.55 | | | $ | 13.41 | | | $ | 13.13 | | | $ | 11.39 | | | $ | 7.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.06 | % | | | 1.04 | % | | | 2.13 | % | | | 15.28 | % | | | 55.60 | % | | | (35.05 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,743 | | | $ | 1,286 | | | $ | 2,361 | | | $ | 6,565 | | | $ | 17,969 | | | $ | 1,914 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.52 | %) | | | (0.33 | %) | | | (0.87 | %) | | | (0.94 | %) | | | (1.04 | %) | | | (0.53 | %) |
| Total expenses | | | 1.87 | % | | | 1.85 | % | | | 1.85 | % | | | 1.88 | % | | | 1.87 | % | | | 1.87 | % |
| Portfolio turnover rate | | | 118 | % | | | 324 | % | | | 487 | % | | | 393 | % | | | 335 | % | | | 564 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 107 |
| TECHNOLOGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.77 | | | $ | 13.59 | | | $ | 13.28 | | | $ | 11.49 | | | $ | 7.37 | | | $ | 11.32 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.01 | ) | | | (.03 | ) | | | (.10 | ) | | | (.09 | ) | | | (.08 | ) | | | (.04 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.81 | | | | .21 | | | | .41 | | | | 1.88 | | | | 4.20 | | | | (3.91 | ) |
| Total from investment operations | | | 1.80 | | | | .18 | | | | .31 | | | | 1.79 | | | | 4.12 | | | | (3.95 | ) |
| Net asset value, end of period | | $ | 15.57 | | | $ | 13.77 | | | $ | 13.59 | | | $ | 13.28 | | | $ | 11.49 | | | $ | 7.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.07 | % | | | 1.32 | % | | | 2.33 | % | | | 15.58 | % | | | 55.90 | % | | | (34.89 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,624 | | | $ | 1,998 | | | $ | 7,367 | | | $ | 1,725 | | | $ | 3,936 | | | $ | 1,669 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.18 | %) | | | (0.27 | %) | | | (0.76 | %) | | | (0.73 | %) | | | (0.78 | %) | | | (0.41 | %) |
| Total expenses | | | 1.62 | % | | | 1.59 | % | | | 1.59 | % | | | 1.64 | % | | | 1.63 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 118 | % | | | 324 | % | | | 487 | % | | | 393 | % | | | 335 | % | | | 564 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 12.95 | | | $ | 12.88 | | | $ | 12.69 | | | $ | 11.05 | | | $ | 7.14 | | | $ | 11.04 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.06 | ) | | | (.11 | ) | | | (.17 | ) | | | (.17 | ) | | | (.14 | ) | | | (.12 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.71 | | | | .18 | | | | .36 | | | | 1.81 | | | | 4.05 | | | | (3.78 | ) |
| Total from investment operations | | | 1.65 | | | | .07 | | | | .19 | | | | 1.64 | | | | 3.91 | | | | (3.90 | ) |
| Net asset value, end of period | | $ | 14.60 | | | $ | 12.95 | | | $ | 12.88 | | | $ | 12.69 | | | $ | 11.05 | | | $ | 7.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 12.74 | % | | | 0.54 | % | | | 1.50 | % | | | 14.84 | % | | | 54.76 | % | | | (35.33 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,078 | | | $ | 1,715 | | | $ | 2,743 | | | $ | 2,618 | | | $ | 3,719 | | | $ | 1,335 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.94 | %) | | | (0.90 | %) | | | (1.45 | %) | | | (1.53 | %) | | | (1.49 | %) | | | (1.24 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.36 | % | | | 2.39 | % | | | 2.38 | % | | | 2.38 | % |
| Portfolio turnover rate | | | 118 | % | | | 324 | % | | | 487 | % | | | 393 | % | | | 335 | % | | | 564 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 108 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
TELECOMMUNICATIONS FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies engaged in the development, manufacture or sale of communications services or communications equipment (“Telecommunications Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 1, 1998 |
| Advisor Class | April 1, 1998 |
| A-Class | September 1, 2004 |
| C-Class | April 18, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| AT&T, Inc. | | | 9.0 | % |
| Verizon Communications, Inc. | | | 7.7 | % |
| Cisco Systems, Inc. | | | 7.4 | % |
| QUALCOMM, Inc. | | | 7.2 | % |
| Sprint Corp. | | | 3.4 | % |
| Crown Castle International Corp. | | | 3.2 | % |
| T-Mobile US, Inc. | | | 3.1 | % |
| CenturyLink, Inc. | | | 2.9 | % |
| Motorola Solutions, Inc. | | | 2.7 | % |
| Vodafone Group plc ADR | | | 2.6 | % |
| Top Ten Total | | | 49.2 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 109 |
| SCHEDULE OF INVESTMENTS (Unaudited) | | September 30, 2013 |
| TELECOMMUNICATIONS FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.5% | | | | | | | | |
| | | | | | | | | |
| COMMUNICATIONS EQUIPMENT - 44.3% | | | | | | | | |
| Cisco Systems, Inc. | | | 13,036 | | | $ | 305,303 | |
| QUALCOMM, Inc. | | | 4,398 | | | | 296,249 | |
| Motorola Solutions, Inc. | | | 1,842 | | | | 109,378 | |
| Juniper Networks, Inc.* | | | 4,299 | | | | 85,378 | |
| Harris Corp. | | | 1,210 | | | | 71,753 | |
| F5 Networks, Inc.* | | | 804 | | | | 68,951 | |
| Blackberry Ltd.* | | | 7,577 | | | | 60,237 | |
| Nokia Oyj ADR* | | | 8,651 | | | | 56,318 | |
| JDS Uniphase Corp.* | | | 3,498 | | | | 51,456 | |
| Brocade Communications Systems, Inc.* | | | 6,363 | | | | 51,222 | |
| Palo Alto Networks, Inc.* | | | 1,074 | | | | 49,211 | |
| Ubiquiti Networks, Inc. | | | 1,427 | | | | 47,933 | |
| ViaSat, Inc.* | | | 724 | | | | 46,155 | |
| Telefonaktiebolaget LM Ericsson ADR | | | 3,432 | | | | 45,817 | |
| Ciena Corp.* | | | 1,736 | | | | 43,365 | |
| ARRIS Group, Inc.* | | | 2,504 | | | | 42,718 | |
| Riverbed Technology, Inc.* | | | 2,831 | | | | 41,304 | |
| Finisar Corp.* | | | 1,776 | | | | 40,191 | |
| Plantronics, Inc. | | | 842 | | | | 38,774 | |
| Polycom, Inc.* | | | 3,490 | | | | 38,111 | |
| Aruba Networks, Inc.* | | | 2,268 | | | | 37,740 | |
| InterDigital, Inc. | | | 931 | | | | 34,754 | |
| ADTRAN, Inc. | | | 1,293 | | | | 34,446 | |
| Infinera Corp.* | | | 2,863 | | | | 32,381 | |
| Ruckus Wireless, Inc.* | | | 1,803 | | | | 30,344 | |
| NETGEAR, Inc.* | | | 977 | | | | 30,150 | |
| Ixia* | | | 1,886 | | | | 29,554 | |
| Total Communications Equipment | | | | | | | 1,819,193 | |
| WIRELESS TELECOMMUNICATION SERVICES - 26.7% | | | | | | | | |
| Sprint Corp.* | | | 22,207 | | | | 137,906 | |
| Crown Castle International Corp.* | | | 1,798 | | | | 131,308 | |
| T-Mobile US, Inc. | | | 4,824 | | | | 125,279 | |
| Vodafone Group plc ADR | | | 2,993 | | | | 105,294 | |
| SBA Communications Corp. — Class A* | | | 1,141 | | | | 91,805 | |
| America Movil SAB de CV ADR | | | 4,443 | | | | 88,016 | |
| China Mobile Ltd. ADR | | | 1,030 | | | | 58,123 | |
| Mobile Telesystems OJSC ADR* | | | 2,530 | | | | 56,318 | |
| Telephone & Data Systems, Inc. | | | 1,737 | | | | 51,328 | |
| Rogers Communications, Inc. — Class B | | | 1,133 | | | | 48,730 | |
| SK Telecom Company Ltd. ADR1 | | | 2,139 | | | | 48,555 | |
| Tim Participacoes S.A. ADR | | | 2,006 | | | | 47,281 | |
| VimpelCom Ltd. ADR | | | 3,913 | | | | 45,978 | |
| Leap Wireless International, Inc.* | | | 1,991 | | | | 31,438 | |
| NII Holdings, Inc.* | | | 4,616 | | | | 28,019 | |
| Total wireless Telecommunication services | | | | | | | 1,095,378 | |
| INTEGRATED TELECOMMUNICATION SERVICES - 25.5% | | | | | | | | |
| AT&T, Inc. | | | 10,914 | | | | 369,110 | |
| Verizon Communications, Inc. | | | 6,747 | | | | 314,815 | |
| CenturyLink, Inc. | | | 3,791 | | | | 118,962 | |
| Windstream Holdings, Inc.1 | | | 7,380 | | | | 59,040 | |
| BCE, Inc. | | | 1,195 | | | | 51,027 | |
| Telefonica Brasil S.A. ADR | | | 2,183 | | | | 48,987 | |
| Telefonica S.A. ADR* | | | 2,874 | | | | 44,490 | |
| China Unicom Hong Kong Ltd. ADR | | | 2,644 | | | | 40,770 | |
| Total Integrated Telecommunication services | | | | | | | 1,047,201 | |
| ALTERNATIvE CARRIERs - 3.0% | | | | | | | | |
| Level 3 Communications, Inc.* | | | 2,453 | | | | 65,471 | |
| tw telecom, Inc. — Class A* | | | 1,931 | | | | 57,669 | |
| Total Alternative Carriers | | | | | | | 123,140 | |
| Total Common stocks | | | | | | | | |
| (Cost $3,159,079) | | | | | | | 4,084,912 | |
| | | | | | | | |
| | | Face | | | | | |
| | | Amount | | | | | |
| REPURCHASE AGREEMENT††,2 - 0.3% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 12,858 | | | | 12,858 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $12,858) | | | | | | | 12,858 | |
| SECURITIES LENDING COLLATERAL††,3 - 1.2% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 25,466 | | | | 25,466 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 23,779 | | | | 23,779 | |
| Total securities Lending Collateral | | | | | | | | |
| (Cost $49,245) | | | | | | | 49,245 | |
| Total Investments - 101.0% | | | | | | | | |
| (Cost $3,221,182) | | | | | | $ | 4,147,015 | |
| Other Assets & Liabilities, net - (1.0)% | | | | | | | (41,020 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 4,105,995 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 6. |
| 2 | Repurchase Agreement — See Note 5. |
| 3 | Securities lending collateral — See Note 6. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 110 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| TELECOMMUNICATIONS FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $45,706 of securities loaned | | | | |
| (cost $3,159,079) | | $ | 4,084,912 | |
| Repurchase agreements, at value | | | | |
| (cost $62,103) | | | 62,103 | |
| Total investments | | | | |
| (cost $3,221,182) | | | 4,147,015 | |
| Cash | | | 1,447 | |
| Receivables: | | | | |
| Fund shares sold | | | 1,625,685 | |
| Dividends | | | 3,959 | |
| Foreign taxes reclaim | | | 227 | |
| Interest | | | 65 | |
| Total assets | | | 5,778,398 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Securities purchased | | | 1,508,613 | |
| Fund shares redeemed | | | 108,863 | |
| Upon return of securities loaned | | | 49,245 | |
| Management fees | | | 2,040 | |
| Transfer agent and administrative fees | | | 600 | |
| Distribution and service fees | | | 540 | |
| Portfolio accounting fees | | | 240 | |
| Miscellaneous | | | 2,262 | |
| Total liabilities | | | 1,672,403 | |
| Net assets | | $ | 4,105,995 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 7,967,158 | |
| Undistributed net investment income | | | 154,391 | |
| Accumulated net realized loss on investments | | | (4,941,387 | ) |
| Net unrealized appreciation on investments | | | 925,833 | |
| Net assets | | $ | 4,105,995 | |
| Investor Class: | | | | |
| Net assets | | $ | 2,949,740 | |
| Capital shares outstanding | | | 208,330 | |
| Net asset value per share | | $ | 14.16 | |
| Advisor Class: | | | | |
| Net assets | | $ | 135,468 | |
| Capital shares outstanding | | | 10,363 | |
| Net asset value per share | | $ | 13.07 | |
| A-Class: | | | | |
| Net assets | | $ | 554,444 | |
| Capital shares outstanding | | | 41,567 | |
| Net asset value per share | | $ | 13.34 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 14.01 | |
| C-Class: | | | | |
| Net assets | | $ | 466,343 | |
| Capital shares outstanding | | | 37,364 | |
| Net asset value per share | | $ | 12.48 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $1,206) | | $ | 91,383 | |
| Income from securities lending, net | | | 2,073 | |
| Interest | | | 1 | |
| Total investment income | | | 93,457 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 19,781 | |
| Transfer agent and administrative fees | | | 5,818 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 601 | |
| A-Class | | | 1,106 | |
| C-Class | | | 3,143 | |
| Portfolio accounting fees | | | 2,327 | |
| Tax expense | | | 285 | |
| Custodian fees | | | 260 | |
| Trustees’ fees* | | | 245 | |
| Line of credit fees | | | 79 | |
| Miscellaneous | | | 3,474 | |
| Total expenses | | | 37,119 | |
| Net investment income | | | 56,338 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 165,831 | |
| Net realized gain | | | 165,831 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (176,163 | ) |
| Net change in unrealized appreciation (depreciation) | | | (176,163 | ) |
| Net realized and unrealized loss | | | (10,332 | ) |
| Net increase in net assets resulting from operations | | $ | 46,006 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 111 |
| TELECOMMUNICATIONS FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 56,338 | | | $ | 103,133 | |
| Net realized gain (loss) on investments | | | 165,831 | | | | (923,019 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (176,163 | ) | | | (590,028 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 46,006 | | | | (1,409,914 | ) |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (44,154 | ) |
| Advisor Class | | | — | | | | (3,198 | ) |
| A-Class | | | — | | | | (13,939 | ) |
| C-Class | | | — | | | | (31,745 | ) |
| Total distributions to shareholders | | | — | | | | (93,036 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 22,377,486 | | | | 47,071,590 | |
| Advisor Class | | | 654,631 | | | | 220,559 | |
| A-Class | | | 1,402,101 | | | | 939,223 | |
| C-Class | | | 14,577,826 | | | | 41,193,736 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 43,205 | |
| Advisor Class | | | — | | | | 1,603 | |
| A-Class | | | — | | | | 13,939 | |
| C-Class | | | — | | | | 31,619 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (22,419,302 | ) | | | (49,823,116 | ) |
| Advisor Class | | | (639,397 | ) | | | (280,290 | ) |
| A-Class | | | (1,403,204 | ) | | | (1,937,536 | ) |
| C-Class | | | (14,931,055 | ) | | | (40,997,450 | ) |
| Net decrease from capital share transactions | | | (380,914 | ) | | | (3,522,918 | ) |
| Net decrease in net assets | | | (334,908 | ) | | | (5,025,868 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 4,440,903 | | | | 9,466,771 | |
| End of period | | $ | 4,105,995 | | | $ | 4,440,903 | |
| Undistributed net investment income at end of period | | $ | 154,391 | | | $ | 98,053 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 1,606,567 | | | | 3,557,713 | |
| Advisor Class | | | 50,172 | | | | 17,839 | |
| A-Class | | | 106,426 | | | | 77,796 | |
| C-Class | | | 1,185,658 | | | | 3,550,899 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 3,402 | |
| Advisor Class | | | — | | | | 136 | |
| A-Class | | | — | | | | 1,165 | |
| C-Class | | | — | | | | 2,823 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (1,616,834 | ) | | | (3,850,396 | ) |
| Advisor Class | | | (50,404 | ) | | | (22,917 | ) |
| A-Class | | | (108,035 | ) | | | (155,431 | ) |
| C-Class | | | (1,213,642 | ) | | | (3,542,786 | ) |
| Net decrease in shares | | | (40,092 | ) | | | (359,757 | ) |
| 112 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| TELECOMMUNICATIONS FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | september 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.59 | | | $ | 13.84 | | | $ | 15.71 | | | $ | 13.73 | | | $ | 10.29 | | | $ | 17.04 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .19 | | | | .27 | | | | .41 | | | | .10 | | | | .26 | | | | .27 | |
| Net gain (loss) on investments (realized and unrealized) | | | .38 | | | | (.22 | ) | | | (1.84 | ) | | | 1.96 | | | | 3.52 | | | | (6.68 | ) |
| Total from investment operations | | | .57 | | | | .05 | | | | (1.43 | ) | | | 2.06 | | | | 3.78 | | | | (6.41 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Total distributions | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Net asset value, end of period | | $ | 14.16 | | | $ | 13.59 | | | $ | 13.84 | | | $ | 15.71 | | | $ | 13.73 | | | $ | 10.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 4.19 | % | | | 0.50 | % | | | (8.77 | %) | | | 15.06 | % | | | 36.88 | % | | | (37.55 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,950 | | | $ | 2,970 | | | $ | 7,028 | | | $ | 48,089 | | | $ | 4,677 | | | $ | 4,440 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 2.75 | % | | | 2.06 | % | | | 2.86 | % | | | 0.73 | % | | | 2.03 | % | | | 1.92 | % |
| Total expenses | | | 1.39 | % | | | 1.35 | % | | | 1.36 | % | | | 1.39 | % | | | 1.39 | % | | | 1.39 | % |
| Portfolio turnover rate | | | 709 | % | | | 1,550 | % | | | 793 | % | | | 1,008 | % | | | 867 | % | | | 672 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 12.58 | | | $ | 12.90 | | | $ | 14.74 | | | $ | 12.94 | | | $ | 9.75 | | | $ | 16.26 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .03 | | | | .19 | | | | .22 | | | | .03 | | | | .23 | | | | .17 | |
| Net gain (loss) on investments (realized and unrealized) | | | .46 | | | | (.21 | ) | | | (1.62 | ) | | | 1.85 | | | | 3.30 | | | | (6.34 | ) |
| Total from investment operations | | | .49 | | | | (.02 | ) | | | (1.40 | ) | | | 1.88 | | | | 3.53 | | | | (6.17 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Total distributions | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Net asset value, end of period | | $ | 13.07 | | | $ | 12.58 | | | $ | 12.90 | | | $ | 14.74 | | | $ | 12.94 | | | $ | 9.75 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 3.90 | % | | | (0.01 | %) | | | (9.15 | %) | | | 14.59 | % | | | 36.35 | % | | | (37.88 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 135 | | | $ | 133 | | | $ | 200 | | | $ | 695 | | | $ | 279 | | | $ | 9,991 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.52 | % | | | 1.59 | % | | | 1.65 | % | | | 0.25 | % | | | 1.94 | % | | | 1.53 | % |
| Total expenses | | | 1.88 | % | | | 1.86 | % | | | 1.85 | % | | | 1.88 | % | | | 1.89 | % | | | 1.81 | % |
| Portfolio turnover rate | | | 709 | % | | | 1,550 | % | | | 793 | % | | | 1,008 | % | | | 867 | % | | | 672 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 113 |
| TELECOMMUNICATIONS FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 12.81 | | | $ | 13.09 | | | $ | 14.91 | | | $ | 13.07 | | | $ | 9.83 | | | $ | 16.33 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .13 | | | | .24 | | | | .18 | | | | .14 | | | | .17 | | | | .27 | |
| Net gain (loss) on investments (realized and unrealized) | | | .40 | | | | (.22 | ) | | | (1.56 | ) | | | 1.78 | | | | 3.41 | | | | (6.43 | ) |
| Total from investment operations | | | .53 | | | | .02 | | | | (1.38 | ) | | | 1.92 | | | | 3.58 | | | | (6.16 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Total distributions | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Net asset value, end of period | | $ | 13.34 | | | $ | 12.81 | | | $ | 13.09 | | | $ | 14.91 | | | $ | 13.07 | | | $ | 9.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 4.14 | % | | | 0.30 | % | | | (8.91 | %) | | | 14.75 | % | | | 36.57 | % | | | (37.66 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 554 | | | $ | 553 | | | $ | 1,566 | | | $ | 699 | | | $ | 1,093 | | | $ | 1,317 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 2.02 | % | | | 1.98 | % | | | 1.41 | % | | | 1.01 | % | | | 1.45 | % | | | 2.15 | % |
| Total expenses | | | 1.63 | % | | | 1.61 | % | | | 1.60 | % | | | 1.64 | % | | | 1.63 | % | | | 1.63 | % |
| Portfolio turnover rate | | | 709 | % | | | 1,550 | % | | | 793 | % | | | 1,008 | % | | | 867 | % | | | 672 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 12.00 | | | $ | 12.35 | | | $ | 14.19 | | | $ | 12.50 | | | $ | 9.48 | | | $ | 15.91 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .13 | | | | .16 | | | | .05 | | | | (.01 | ) | | | .10 | | | | .13 | |
| Net gain (loss) on investments (realized and unrealized) | | | .35 | | | | (.21 | ) | | | (1.45 | ) | | | 1.78 | | | | 3.26 | | | | (6.22 | ) |
| Total from investment operations | | | .48 | | | | (.05 | ) | | | (1.40 | ) | | | 1.77 | | | | 3.36 | | | | (6.09 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Total distributions | | | — | | | | (.30 | ) | | | (.44 | ) | | | (.08 | ) | | | (.34 | ) | | | (.34 | ) |
| Net asset value, end of period | | $ | 12.48 | | | $ | 12.00 | | | $ | 12.35 | | | $ | 14.19 | | | $ | 12.50 | | | $ | 9.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 4.00 | % | | | (0.24 | %) | | | (9.52 | %) | | | 14.22 | % | | | 35.59 | % | | | (38.21 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 466 | | | $ | 784 | | | $ | 672 | | | $ | 2,896 | | | $ | 1,141 | | | $ | 1,281 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 2.18 | % | | | 1.41 | % | | | 0.39 | % | | | (0.07 | %) | | | 0.86 | % | | | 0.99 | % |
| Total expenses | | | 2.38 | % | | | 2.36 | % | | | 2.36 | % | | | 2.39 | % | | | 2.39 | % | | | 2.42 | % |
| Portfolio turnover rate | | | 709 | % | | | 1,550 | % | | | 793 | % | | | 1,008 | % | | | 867 | % | | | 672 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 114 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
TRANSPORTATION FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies engaged in providing transportation services or companies engaged in the design, manufacture, distribution, or sale of transportation equipment (“Transportation Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 2, 1998 |
| Advisor Class | June 9, 1998 |
| A-Class | September 1, 2004 |
| C-Class | May 14, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | | |
| United Parcel Service, Inc. — Class B | | | 6.0 | % |
| Union Pacific Corp. | | | 5.4 | % |
| Ford Motor Co. | | | 5.2 | % |
| General Motors Co. | | | 4.5 | % |
| FedEx Corp. | | | 3.7 | % |
| Johnson Controls, Inc. | | | 3.4 | % |
| CSX Corp. | | | 3.2 | % |
| Norfolk Southern Corp. | | | 3.1 | % |
| Delta Air Lines, Inc. | | | 2.9 | % |
| Harley-Davidson, Inc. | | | 2.4 | % |
| Top Ten Total | | | 39.8 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 115 |
| SCHEDULE OF INVESTMENTS (Unaudited) | | September 30, 2013 |
| TRANSPORTATION FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.1% | | | | | | | | |
| | | | | | | | | |
| AUTO PARTS & EQUIPMENT - 19.7% | | | | | | | | |
| Johnson Controls, Inc. | | | 94,466 | | | $ | 3,920,339 | |
| BorgWarner, Inc. | | | 25,050 | | | | 2,539,820 | |
| Delphi Automotive plc | | | 41,060 | | | | 2,398,725 | |
| TRW Automotive Holdings Corp.* | | | 29,840 | | | | 2,127,890 | |
| Lear Corp. | | | 25,107 | | | | 1,796,908 | |
| Autoliv, Inc. | | | 20,000 | | | | 1,747,800 | |
| Magna International, Inc. | | | 21,120 | | | | 1,743,667 | |
| Visteon Corp.* | | | 19,625 | | | | 1,484,435 | |
| Gentex Corp. | | | 54,610 | | | | 1,397,470 | |
| Dana Holding Corp. | | | 59,350 | | | | 1,355,554 | |
| Tenneco, Inc.* | | | 26,170 | | | | 1,321,585 | |
| American Axle & Manufacturing | | | | | | | | |
| Holdings, Inc.* | | | 44,830 | | | | 884,048 | |
| Total Auto parts & Equipment | | | | | | | 22,718,241 | |
| RAILROADs - 18.5% | | | | | | | | |
| Union Pacific Corp. | | | 39,766 | | | | 6,177,251 | |
| CSX Corp. | | | 144,504 | | | | 3,719,533 | |
| Norfolk Southern Corp. | | | 46,772 | | | | 3,617,814 | |
| Kansas City Southern | | | 23,347 | | | | 2,553,228 | |
| Canadian Pacific Railway Ltd. | | | 15,438 | | | | 1,903,505 | |
| Canadian National Railway Co. | | | 18,310 | | | | 1,856,085 | |
| Genesee & Wyoming, Inc. — Class A* | | | 17,844 | | | | 1,658,957 | |
| Total Railroads | | | | | | | 21,486,373 | |
| AUTOMOBILE MANUFACTURERS - 16.8% | | | | | | | | |
| Ford Motor Co. | | | 353,305 | | | | 5,960,255 | |
| General Motors Co.* | | | 143,630 | | | | 5,166,371 | |
| Tesla Motors, Inc.* | | | 9,435 | | | | 1,824,918 | |
| Toyota Motor Corp. ADR | | | 14,140 | | | | 1,810,344 | |
| Tata Motors Ltd. ADR | | | 66,900 | | | | 1,780,878 | |
| Honda Motor Company Ltd. ADR | | | 41,140 | | | | 1,569,080 | |
| Thor Industries, Inc. | | | 22,810 | | | | 1,323,892 | |
| Total Automobile Manufacturers | | | | | | | 19,435,738 | |
| AIR FREIGHT & LOGISTICS - 13.6% | | | | | | | | |
| United Parcel Service, Inc. — Class B | | | 75,233 | | | | 6,874,040 | |
| FedEx Corp. | | | 37,810 | | | | 4,314,499 | |
| CH Robinson Worldwide, Inc. | | | 37,683 | | | | 2,244,399 | |
| Expeditors International of | | | | | | | | |
| Washington, Inc. | | | 50,751 | | | | 2,236,089 | |
| Total Air freight & Logistics | | | | | | | 15,669,027 | |
| AIRLINES - 12.9% | | | | | | | | |
| Delta Air Lines, Inc. | | | 140,207 | | | | 3,307,482 | |
| Southwest Airlines Co. | | | 161,577 | | | | 2,352,561 | |
| United Continental Holdings, Inc.* | | | 74,910 | | | | 2,300,486 | |
| Copa Holdings S.A. — Class A | | | 12,912 | | | | 1,790,507 | |
| Alaska Air Group, Inc. | | | 24,564 | | | | 1,538,198 | |
| US Airways Group, Inc.* | | | 73,154 | | | | 1,387,000 | |
| Spirit Airlines, Inc.* | | | 33,750 | | | | 1,156,613 | |
| JetBlue Airways Corp.* | | | 150,900 | | | | 1,004,994 | |
| Total Airlines | | | | | | | 14,837,841 | |
| TRUCKING - 11.3% | | | | | | | | |
| J.B. Hunt Transport Services, Inc. | | | 29,922 | | | | 2,182,211 | |
| Hertz Global Holdings, Inc.* | | | 92,629 | | | | 2,052,659 | |
| Old Dominion Freight Line, Inc.* | | | 32,680 | | | | 1,502,953 | |
| Avis Budget Group, Inc.* | | | 45,194 | | | | 1,302,943 | |
| Swift Transportation Co. — Class A* | | | 64,090 | | | | 1,293,977 | |
| Ryder System, Inc. | | | 21,661 | | | | 1,293,162 | |
| Con-way, Inc. | | | 28,162 | | | | 1,213,501 | |
| Landstar System, Inc. | | | 21,578 | | | | 1,207,936 | |
| Werner Enterprises, Inc. | | | 42,740 | | | | 997,124 | |
| Total Trucking | | | | | | | 13,046,466 | |
| TIRES & RUBBER - 2.5% | | | | | | | | |
| Goodyear Tire & Rubber Co.* | | | 78,509 | | | | 1,762,527 | |
| Cooper Tire & Rubber Co. | | | 35,500 | | | | 1,093,400 | |
| Total Tires & Rubber | | | | | | | 2,855,927 | |
| MOTORCYCLE MANUFACTURERS - 2.4% | | | | | | | | |
| Harley-Davidson, Inc. | | | 43,811 | | | | 2,814,419 | |
| MARINE - 1.4% | | | | | | | | |
| Kirby Corp.* | | | 18,728 | | | | 1,620,908 | |
| Total Common stocks | | | | | | | | |
| (Cost $102,100,857) | | | | | | | 114,484,940 | |
| | | | | | | | | |
| | | Face | | | | | |
| | | Amount | | | | | |
| REPURCHASE AGREEMENT††,1 - 0.2% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 173,846 | | | | 173,846 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $173,846) | | | | | | | 173,846 | |
| Total Investments - 99.3% | | | | | | | | |
| (Cost $102,274,703) | | | | | | $ | 114,658,786 | |
| Other Assets & Liabilities, net - 0.7% | | | | | | | 771,404 | |
| Total Net Assets - 100.0% | | | | | | $ | 115,430,190 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreement — See Note 5. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 116 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| TRANSPORTATION FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $102,100,857) | | $ | 114,484,940 | |
| Repurchase agreements, at value | | | | |
| (cost $173,846) | | | 173,846 | |
| Total investments | | | | |
| (cost $102,274,703) | | | 114,658,786 | |
| Cash | | | 2,113 | |
| Receivables: | | | | |
| Fund shares sold | | | 1,252,831 | |
| Dividends | | | 26,404 | |
| Interest | | | 194 | |
| Total assets | | | 115,940,328 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 387,243 | |
| Management fees | | | 49,680 | |
| Transfer agent and administrative fees | | | 14,612 | |
| Portfolio accounting fees | | | 5,845 | |
| Distribution and service fees | | | 5,020 | |
| Miscellaneous | | | 47,738 | |
| Total liabilities | | | 510,138 | |
| Net assets | | $ | 115,430,190 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 125,594,295 | |
| Accumulated net investment loss | | | (108,378 | ) |
| Accumulated net realized loss on investments | | | (22,439,810 | ) |
| Net unrealized appreciation on investments | | | 12,384,083 | |
| Net assets | | $ | 115,430,190 | |
| Investor Class: | | | | |
| Net assets | | $ | 96,818,898 | |
| Capital shares outstanding | | | 2,522,232 | |
| Net asset value per share | | $ | 38.39 | |
| Advisor Class: | | | | |
| Net assets | | $ | 2,187,986 | |
| Capital shares outstanding | | | 62,501 | |
| Net asset value per share | | $ | 35.01 | |
| A-Class: | | | | |
| Net assets | | $ | 12,883,963 | |
| Capital shares outstanding | | | 359,711 | |
| Net asset value per share | | $ | 35.82 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 37.61 | |
| C-Class: | | | | |
| Net assets | | $ | 3,539,343 | |
| Capital shares outstanding | | | 103,642 | |
| Net asset value per share | | $ | 34.15 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $4,304) | | $ | 318,079 | |
| Income from securities lending, net | | | 24,135 | |
| Interest | | | 18 | |
| Total investment income | | | 342,232 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 225,644 | |
| Transfer agent and administrative fees | | | 66,365 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 5,977 | |
| A-Class | | | 8,122 | |
| C-Class | | | 10,658 | |
| Portfolio accounting fees | | | 26,546 | |
| Custodian fees | | | 3,135 | |
| Trustees’ fees* | | | 1,680 | |
| Line of credit fees | | | 143 | |
| Miscellaneous | | | 40,210 | |
| Total expenses | | | 388,480 | |
| Net investment loss | | | (46,248 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 1,592,955 | |
| Net realized gain | | | 1,592,955 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 4,658,893 | |
| Net change in unrealized appreciation (depreciation) | | | 4,658,893 | |
| Net realized and unrealized gain | | | 6,251,848 | |
| Net increase in net assets resulting from operations | | $ | 6,205,600 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 117 |
| TRANSPORTATION FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (46,248 | ) | | $ | (63,909 | ) |
| Net realized gain on investments | | | 1,592,955 | | | | 770,675 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 4,658,893 | | | | 4,497,858 | |
| Net increase in net assets resulting from operations | | | 6,205,600 | | | | 5,204,624 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 211,423,442 | | | | 248,140,687 | |
| Advisor Class | | | 5,589,149 | | | | 4,891,678 | |
| A-Class | | | 13,142,248 | | | | 7,566,962 | |
| C-Class | | | 10,067,796 | | | | 22,790,129 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (197,866,207 | ) | | | (181,778,255 | ) |
| Advisor Class | | | (8,230,488 | ) | | | (2,990,536 | ) |
| A-Class | | | (5,753,080 | ) | | | (5,068,884 | ) |
| C-Class | | | (9,560,276 | ) | | | (23,059,267 | ) |
| Net increase from capital share transactions | | | 18,812,584 | | | | 70,492,514 | |
| Net increase in net assets | | | 25,018,184 | | | | 75,697,138 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 90,412,006 | | | | 14,714,868 | |
| End of period | | $ | 115,430,190 | | | $ | 90,412,006 | |
| Accumulated net investment loss at end of period | | $ | (108,378 | ) | | $ | (62,130 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 5,874,983 | | | | 8,684,455 | |
| Advisor Class | | | 171,913 | | | | 178,143 | |
| A-Class | | | 384,467 | | | | 294,246 | |
| C-Class | | | 314,615 | | | | 942,271 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (5,805,338 | ) | | | (6,529,753 | ) |
| Advisor Class | | | (262,332 | ) | | | (120,319 | ) |
| A-Class | | | (176,905 | ) | | | (205,475 | ) |
| C-Class | | | (306,082 | ) | | | (959,277 | ) |
| Net increase in shares | | | 195,321 | | | | 2,284,291 | |
| 118 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 32.07 | | | $ | 26.96 | | | $ | 27.85 | | | $ | 23.79 | | | $ | 14.38 | | | $ | 25.21 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.01 | ) | | | (.07 | ) | | | (.06 | ) | | | — | c | | | (.15 | ) | | | .07 | |
| Net gain (loss) on investments (realized and unrealized) | | | 6.33 | | | | 5.18 | | | | (.83 | ) | | | 4.06 | | | | 9.70 | | | | (10.90 | ) |
| Total from investment operations | | | 6.32 | | | | 5.11 | | | | (.89 | ) | | | 4.06 | | | | 9.55 | | | | (10.83 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Net asset value, end of period | | $ | 38.39 | | | $ | 32.07 | | | $ | 26.96 | | | $ | 27.85 | | | $ | 23.79 | | | $ | 14.38 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 19.71 | % | | | 18.95 | % | | | (3.20 | %) | | | 17.07 | % | | | 66.51 | % | | | (42.96 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 96,819 | | | $ | 78,644 | | | $ | 8,031 | | | $ | 5,320 | | | $ | 22,292 | | | $ | 20,990 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.08 | %) | | | (0.25 | %) | | | (0.22 | %) | | | 0.02 | % | | | (0.68 | %) | | | 0.33 | % |
| Total expenses | | | 1.37 | % | | | 1.37 | % | | | 1.35 | % | | | 1.38 | % | | | 1.37 | % | | | 1.38 | % |
| Portfolio turnover rate | | | 312 | % | | | 737 | % | | | 1,082 | % | | | 1,217 | % | | | 1,073 | % | | | 875 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 29.32 | | | $ | 24.76 | | | $ | 25.70 | | | $ | 22.05 | | | $ | 13.40 | | | $ | 23.59 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.09 | ) | | | (.15 | ) | | | (.14 | ) | | | (.17 | ) | | | (.18 | ) | | | .10 | |
| Net gain (loss) on investments (realized and unrealized) | | | 5.78 | | | | 4.71 | | | | (.80 | ) | | | 3.82 | | | | 8.97 | | | | (10.29 | ) |
| Total from investment operations | | | 5.69 | | | | 4.56 | | | | (.94 | ) | | | 3.65 | | | | 8.79 | | | | (10.19 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Net asset value, end of period | | $ | 35.01 | | | $ | 29.32 | | | $ | 24.76 | | | $ | 25.70 | | | $ | 22.05 | | | $ | 13.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 19.41 | % | | | 18.42 | % | | | (3.66 | %) | | | 16.55 | % | | | 65.70 | % | | | (43.20 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,188 | | | $ | 4,483 | | | $ | 2,355 | | | $ | 2,902 | | | $ | 2,795 | | | $ | 1,139 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.59 | %) | | | (0.57 | %) | | | (0.55 | %) | | | (0.74 | %) | | | (0.95 | %) | | | 0.51 | % |
| Total expenses | | | 1.87 | % | | | 1.86 | % | | | 1.86 | % | | | 1.89 | % | | | 1.88 | % | | | 1.90 | % |
| Portfolio turnover rate | | | 312 | % | | | 737 | % | | | 1,082 | % | | | 1,217 | % | | | 1,073 | % | | | 875 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 119 |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 29.96 | | | $ | 25.25 | | | $ | 26.15 | | | $ | 22.37 | | | $ | 13.55 | | | $ | 23.81 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.06 | ) | | | (.01 | ) | | | (.12 | ) | | | (.10 | ) | | | (.04 | ) | | | .08 | |
| Net gain (loss) on investments (realized and unrealized) | | | 5.92 | | | | 4.72 | | | | (.78 | ) | | | 3.88 | | | | 9.00 | | | | (10.34 | ) |
| Total from investment operations | | | 5.86 | | | | 4.71 | | | | (.90 | ) | | | 3.78 | | | | 8.96 | | | | (10.26 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Net asset value, end of period | | $ | 35.82 | | | $ | 29.96 | | | $ | 25.25 | | | $ | 26.15 | | | $ | 22.37 | | | $ | 13.55 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 19.56 | % | | | 18.70 | % | | | (3.48 | %) | | | 16.90 | % | | | 66.22 | % | | | (43.09 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 12,884 | | | $ | 4,558 | | | $ | 1,600 | | | $ | 1,239 | | | $ | 1,842 | | | $ | 561 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.34 | %) | | | (0.05 | %) | | | (0.51 | %) | | | (0.42 | %) | | | (0.22 | %) | | | 0.43 | % |
| Total expenses | | | 1.62 | % | | | 1.60 | % | | | 1.61 | % | | | 1.64 | % | | | 1.62 | % | | | 1.67 | % |
| Portfolio turnover rate | | | 312 | % | | | 737 | % | | | 1,082 | % | | | 1,217 | % | | | 1,073 | % | | | 875 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 28.67 | | | $ | 24.34 | | | $ | 25.38 | | | $ | 21.87 | | | $ | 13.40 | | | $ | 23.70 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.17 | ) | | | (.26 | ) | | | (.29 | ) | | | (.24 | ) | | | (.24 | ) | | | (.16 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.65 | | | | 4.59 | | | | (.75 | ) | | | 3.75 | | | | 8.85 | | | | (10.14 | ) |
| Total from investment operations | | | 5.48 | | | | 4.33 | | | | (1.04 | ) | | | 3.51 | | | | 8.61 | | | | (10.30 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.14 | ) | | | — | |
| Net asset value, end of period | | $ | 34.15 | | | $ | 28.67 | | | $ | 24.34 | | | $ | 25.38 | | | $ | 21.87 | | | $ | 13.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 19.11 | % | | | 17.79 | % | | | (4.10 | %) | | | 16.05 | % | | | 64.35 | % | | | (43.46 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,539 | | | $ | 2,727 | | | $ | 2,729 | | | $ | 2,069 | | | $ | 3,375 | | | $ | 2,186 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.07 | %) | | | (1.06 | %) | | | (1.24 | %) | | | (1.04 | %) | | | (1.31 | %) | | | (0.79 | %) |
| Total expenses | | | 2.37 | % | | | 2.35 | % | | | 2.35 | % | | | 2.39 | % | | | 2.38 | % | | | 2.40 | % |
| Portfolio turnover rate | | | 312 | % | | | 737 | % | | | 1,082 | % | | | 1,217 | % | | | 1,073 | % | | | 875 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 120 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
UTILITIES FUND
OBJECTIVE: Seeks to provide capital appreciation by investing in companies that operate public utilities (“Utilities Companies”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | April 3, 2000 |
| Advisor Class | April 3, 2000 |
| A-Class | September 1, 2004 |
| C-Class | April 27, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Duke Energy Corp. | | | 3.8 | % |
| Dominion Resources, Inc. | | | 3.3 | % |
| Southern Co. | | | 3.3 | % |
| NextEra Energy, Inc. | | | 3.2 | % |
| Exelon Corp. | | | 2.8 | % |
| Sempra Energy | | | 2.5 | % |
| American Electric Power Company, Inc. | | | 2.5 | % |
| PPL Corp. | | | 2.4 | % |
| PG&E Corp. | | | 2.4 | % |
| Consolidated Edison, Inc. | | | 2.2 | % |
| Top Ten Total | | | 28.4 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 121 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| UTILITIES FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.8% | | | | | | | | |
| | | | | | | | | |
| ELECTRIC UTILITIES - 45.5% | | | | | | | | |
| Duke Energy Corp. | | | 12,291 | | | $ | 820,794 | |
| Southern Co. | | | 17,395 | | | | 716,326 | |
| NextEra Energy, Inc. | | | 8,645 | | | | 692,983 | |
| Exelon Corp. | | | 20,276 | | | | 600,981 | |
| American Electric Power Company, Inc. | | | 12,466 | | | | 540,401 | |
| PPL Corp. | | | 17,479 | | | | 531,012 | |
| Edison International | | | 10,200 | | | | 469,812 | |
| FirstEnergy Corp. | | | 12,772 | | | | 465,539 | |
| Xcel Energy, Inc. | | | 16,408 | | | | 453,025 | |
| Northeast Utilities | | | 10,507 | | | | 433,414 | |
| Entergy Corp. | | | 6,320 | | | | 399,361 | |
| OGE Energy Corp. | | | 8,876 | | | | 320,335 | |
| Pinnacle West Capital Corp. | | | 5,352 | | | | 292,968 | |
| N.V. Energy, Inc. | | | 12,297 | | | | 290,332 | |
| ITC Holdings Corp. | | | 2,900 | | | | 272,194 | |
| Pepco Holdings, Inc. | | | 13,945 | | | | 257,425 | |
| Westar Energy, Inc. | | | 7,792 | | | | 238,825 | |
| Cia Energetica de Minas Gerais ADR | | | 25,813 | | | | 223,024 | |
| Great Plains Energy, Inc. | | | 10,032 | | | | 222,710 | |
| Cleco Corp. | | | 4,431 | | | | 198,686 | |
| Hawaiian Electric Industries, Inc. | | | 7,610 | | | | 191,011 | |
| IDACORP, Inc. | | | 3,913 | | | | 189,389 | |
| Enersis S.A. ADR | | | 11,434 | | | | 183,630 | |
| Portland General Electric Co. | | | 6,228 | | | | 175,816 | |
| ALLETE, Inc. | | | 3,510 | | | | 169,533 | |
| UNS Energy Corp. | | | 3,563 | | | | 166,107 | |
| UIL Holdings Corp. | | | 4,450 | | | | 165,451 | |
| PNM Resources, Inc. | | | 7,165 | | | | 162,144 | |
| Total Electric Utilities | | | | | | | 9,843,228 | |
| MULTI-UTILITIES-33.0% | | | | | | | | |
| Dominion Resources, Inc. | | | 11,481 | | | | 717,332 | |
| Sempra Energy | | | 6,372 | | | | 545,442 | |
| PG&E Corp. | | | 12,505 | | | | 511,705 | |
| Consolidated Edison, Inc. | | | 8,718 | | | | 480,711 | |
| Public Service Enterprise Group, Inc. | | | 14,596 | | | | 480,646 | |
| DTE Energy Co. | | | 6,155 | | | | 406,107 | |
| CenterPoint Energy, Inc. | | | 15,945 | | | | 382,202 | |
| NiSource, Inc. | | | 12,280 | | | | 379,329 | |
| Wisconsin Energy Corp. | | | 8,994 | | | | 363,178 | |
| Ameren Corp. | | | 9,996 | | | | 348,261 | |
| CMS Energy Corp. | | | 12,094 | | | | 318,314 | |
| SCANA Corp. | | | 6,594 | | | | 303,588 | |
| Alliant Energy Corp. | | | 5,726 | | | | 283,723 | |
| MDU Resources Group, Inc. | | | 9,939 | | | | 277,994 | |
| Integrys Energy Group, Inc. | | | 4,499 | | | | 251,449 | |
| TECO Energy, Inc. | | | 13,756 | | | | 227,524 | |
| Vectren Corp. | | | 5,977 | | | | 199,333 | |
| National Grid plc ADR | | | 3,330 | | | | 196,637 | |
| Black Hills Corp. | | | 3,631 | | | | 181,042 | |
| NorthWestern Corp. | | | 3,550 | | | | 159,466 | |
| Avista Corp. | | | 5,779 | | | | 152,566 | |
| Total Multi-Utilities | | | | | | | 7,166,549 | |
| GAS UTILITIES - 11.9% | | | | | | | | |
| ONEOK, Inc. | | | 7,437 | | | | 396,540 | |
| National Fuel Gas Co. | | | 4,277 | | | | 294,087 | |
| AGL Resources, Inc. | | | 6,098 | | | | 280,691 | |
| UGI Corp. | | | 6,529 | | | | 255,480 | |
| Questar Corp. | | | 10,987 | | | | 247,098 | |
| Atmos Energy Corp. | | | 5,642 | | | | 240,293 | |
| Piedmont Natural Gas Company, Inc. | | | 5,805 | | | | 190,868 | |
| Southwest Gas Corp. | | | 3,690 | | | | 184,500 | |
| WGL Holdings, Inc. | | | 4,241 | | | | 181,133 | |
| New Jersey Resources Corp. | | | 3,740 | | | | 164,747 | |
| Laclede Group, Inc. | | | 3,300 | | | | 148,500 | |
| Total Gas Utilities | | | | | | | 2,583,937 | |
| INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 5.8% | | | | | | | | |
| AES Corp. | | | 28,577 | | | | 379,788 | |
| NRG Energy, Inc. | | | 12,942 | | | | 353,705 | |
| Calpine Corp.* | | | 18,013 | | | | 349,993 | |
| Dynegy, Inc.* | | | 8,760 | | | | 169,243 | |
| Total Independent Power Producers & Energy Traders | | | | | | | 1,252,729 | |
| WATER UTILITIES - 3.6% | | | | | | | | |
| American Water Works Company, Inc. | | | 8,022 | | | | 331,148 | |
| Aqua America, Inc. | | | 10,276 | | | | 254,125 | |
| Cia de Saneamento Basico do | | | | | | | | |
| Estado de Sao Paulo ADR | | | 20,530 | | | | 204,479 | |
| Total Water Utilities | | | | | | | 789,752 | |
| Total Common Stocks | | | | | | | | |
| (Cost $13,459,343) | | | | | | | 21,636,195 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENT††,1 - 0.7% | | | | | | | | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/13 | | $ | 162,389 | | | | 162,389 | |
| Total Repurchase Agreement | | | | | | | | |
| (Cost $162,389) | | | | | | | 162,389 | |
| Total Investments - 100.5% | | | | | | | | |
| (Cost $13,621,732) | | | | | | $ | 21,798,584 | |
| Other Assets & Liabilities, net - (0.5)% | | | | | | | (102,263 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 21,696,321 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreement — See Note 5. |
| | ADR — American Depositary Receipt |
| | plc — Public Limited Company |
| 122 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $13,459,343) | | $ | 21,636,195 | |
| Repurchase agreements, at value | | | | |
| (cost $162,389) | | | 162,389 | |
| Total investments | | | | |
| (cost $13,621,732) | | | 21,798,584 | |
| Cash | | | 40,798 | |
| Receivables: | | | | |
| Securities sold | | | 1,293,053 | |
| Fund shares sold | | | 82,601 | |
| Dividends | | | 49,295 | |
| Total assets | | | 23,264,331 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 1,509,448 | |
| Management fees | | | 14,536 | |
| Distribution and service fees | | | 6,487 | |
| Transfer agent and administrative fees | | | 4,275 | |
| Portfolio accounting fees | | | 1,710 | |
| Miscellaneous | | | 31,554 | |
| Total liabilities | | | 1,568,010 | |
| Net assets | | $ | 21,696,321 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 17,876,581 | |
| Undistributed net investment income | | | 1,267,080 | |
| Accumulated net realized loss on investments | | | (5,624,192 | ) |
| Net unrealized appreciation on investments | | | 8,176,852 | |
| Net assets | | $ | 21,696,321 | |
| Investor Class: | | | | |
| Net assets | | $ | 9,246,981 | |
| Capital shares outstanding | | | 289,549 | |
| Net asset value per share | | $ | 31.94 | |
| Advisor Class: | | | | |
| Net assets | | $ | 3,293,166 | |
| Capital shares outstanding | | | 112,026 | |
| Net asset value per share | | $ | 29.40 | |
| A-Class: | | | | |
| Net assets | | $ | 3,668,438 | |
| Capital shares outstanding | | | 121,551 | |
| Net asset value per share | | $ | 30.18 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 31.69 | |
| C-Class: | | | | |
| Net assets | | $ | 5,487,736 | |
| Capital shares outstanding | | | 202,040 | |
| Net asset value per share | | $ | 27.16 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $10,344) | | $ | 1,234,798 | |
| Income from securities lending, net | | | 150 | |
| Interest | | | 37 | |
| Total investment income | | | 1,234,985 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 276,129 | |
| Transfer agent and administrative fees | | | 81,214 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 13,910 | |
| A-Class | | | 11,381 | |
| C-Class | | | 31,393 | |
| Portfolio accounting fees | | | 32,485 | |
| Tax expense | | | 8,018 | |
| Custodian fees | | | 3,918 | |
| Trustees’ fees* | | | 3,429 | |
| Line of credit fees | | | 585 | |
| Miscellaneous | | | 49,839 | |
| Total expenses | | | 512,301 | |
| Net investment income | | | 722,684 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 3,608,441 | |
| Net realized gain | | | 3,608,441 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (5,863,854 | ) |
| Net change in unrealized appreciation (depreciation) | | | (5,863,854 | ) |
| Net realized and unrealized loss | | | (2,255,413 | ) |
| Net decrease in net assets resulting from operations | | $ | (1,532,729 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 123 |
| UTILITIES FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 722,684 | | | $ | 1,279,361 | |
| Net realized gain on investments | | | 3,608,441 | | | | 3,942,459 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (5,863,854 | ) | | | 4,376,227 | |
| Net increase (decrease) in net assets resulting from operations | | | (1,532,729 | ) | | | 9,598,047 | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (490,500 | ) |
| Advisor Class | | | — | | | | (163,320 | ) |
| A-Class | | | — | | | | (300,120 | ) |
| C-Class | | | — | | | | (331,318 | ) |
| Total distributions to shareholders | | | — | | | | (1,285,258 | ) |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 142,504,189 | | | | 272,473,598 | |
| Advisor Class | | | 59,186,666 | | | | 61,233,923 | |
| A-Class | | | 10,352,107 | | | | 19,625,033 | |
| C-Class | | | 17,394,735 | | | | 43,779,661 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 475,143 | |
| Advisor Class | | | — | | | | 159,179 | |
| A-Class | | | — | | | | 193,096 | |
| C-Class | | | — | | | | 315,126 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (175,982,830 | ) | | | (274,125,536 | ) |
| Advisor Class | | | (59,781,661 | ) | | | (65,066,231 | ) |
| A-Class | | | (13,378,947 | ) | | | (21,375,093 | ) |
| C-Class | | | (18,723,053 | ) | | | (44,719,733 | ) |
| Net decrease from capital share transactions | | | (38,428,794 | ) | | | (7,031,834 | ) |
| Net increase (decrease) in net assets | | | (39,961,523 | ) | | | 1,280,955 | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 61,657,844 | | | | 60,376,889 | |
| End of period | | $ | 21,696,321 | | | $ | 61,657,844 | |
| Undistributed net investment income at end of period | | $ | 1,267,080 | | | $ | 544,396 | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 4,322,318 | | | | 8,971,171 | |
| Advisor Class | | | 1,956,686 | | | | 2,173,723 | |
| A-Class | | | 332,373 | | | | 683,472 | |
| C-Class | | | 626,534 | | | | 1,682,949 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 16,855 | |
| Advisor Class | | | — | | | | 6,108 | |
| A-Class | | | — | | | | 7,235 | |
| C-Class | | | — | | | | 13,033 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (5,344,472 | ) | | | (8,962,441 | ) |
| Advisor Class | | | (2,004,053 | ) | | | (2,317,009 | ) |
| A-Class | | | (434,998 | ) | | | (752,222 | ) |
| C-Class | | | (674,918 | ) | | | (1,720,566 | ) |
| Net decrease in shares | | | (1,220,530 | ) | | | (197,692 | ) |
| 124 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| UTILITIES FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 32.71 | | | $ | 29.13 | | | $ | 27.00 | | | $ | 24.80 | | | $ | 20.56 | | | $ | 29.29 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .39 | | | | .74 | | | | .73 | | | | .86 | | | | .61 | | | | .72 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.16 | ) | | | 3.96 | | | | 1.80 | | | | 2.96 | | | | 4.85 | | | | (9.32 | ) |
| Total from investment operations | | | (.77 | ) | | | 4.70 | | | | 2.53 | | | | 3.82 | | | | 5.46 | | | | (8.60 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Total distributions | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Net asset value, end of period | | $ | 31.94 | | | $ | 32.71 | | | $ | 29.13 | | | $ | 27.00 | | | $ | 24.80 | | | $ | 20.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (2.35 | %) | | | 16.75 | % | | | 9.44 | % | | | 15.94 | % | | | 26.58 | % | | | (29.40 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 9,247 | | | $ | 42,907 | | | $ | 37,469 | | | $ | 9,328 | | | $ | 9,912 | | | $ | 10,348 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 2.38 | % | | | 2.45 | % | | | 2.59 | % | | | 3.35 | % | | | 2.49 | % | | | 2.90 | % |
| Total expenses | | | 1.41 | % | | | 1.35 | % | | | 1.35 | % | | | 1.37 | % | | | 1.39 | % | | | 1.39 | % |
| Portfolio turnover rate | | | 276 | % | | | 534 | % | | | 549 | % | | | 800 | % | | | 758 | % | | | 684 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 30.19 | | | $ | 27.10 | | | $ | 25.26 | | | $ | 23.40 | | | $ | 19.56 | | | $ | 28.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .37 | | | | .48 | | | | .56 | | | | .62 | | | | .47 | | | | .63 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.16 | ) | | | 3.73 | | | | 1.68 | | | | 2.86 | | | | 4.59 | | | | (8.94 | ) |
| Total from investment operations | | | (.79 | ) | | | 4.21 | | | | 2.24 | | | | 3.48 | | | | 5.06 | | | | (8.31 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Total distributions | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Net asset value, end of period | | $ | 29.40 | | | $ | 30.19 | | | $ | 27.10 | | | $ | 25.26 | | | $ | 23.40 | | | $ | 19.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (2.62 | %) | | | 16.23 | % | | | 8.90 | % | | | 15.43 | % | | | 25.89 | % | | | (29.72 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,293 | | | $ | 4,812 | | | $ | 8,036 | | | $ | 1,240 | | | $ | 1,184 | | | $ | 5,939 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 2.48 | % | | | 1.70 | % | | | 2.11 | % | | | 2.53 | % | | | 2.07 | % | | | 2.72 | % |
| Total expenses | | | 1.88 | % | | | 1.85 | % | | | 1.84 | % | | | 1.87 | % | | | 1.88 | % | | | 1.90 | % |
| Portfolio turnover rate | | | 276 | % | | | 534 | % | | | 549 | % | | | 800 | % | | | 758 | % | | | 684 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 125 |
| UTILITIES FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 30.95 | | | $ | 27.69 | | | $ | 25.75 | | | $ | 23.77 | | | $ | 19.80 | | | $ | 28.27 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .31 | | | | .65 | | | | .67 | | | | .54 | | | | .65 | | | | .54 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.08 | ) | | | 3.73 | | | | 1.67 | | | | 3.06 | | | | 4.54 | | | | (8.88 | ) |
| Total from investment operations | | | (.77 | ) | | | 4.38 | | | | 2.34 | | | | 3.60 | | | | 5.19 | | | | (8.34 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Total distributions | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Net asset value, end of period | | $ | 30.18 | | | $ | 30.95 | | | $ | 27.69 | | | $ | 25.75 | | | $ | 23.77 | | | $ | 19.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (2.49 | %) | | | 16.46 | % | | | 9.16 | % | | | 15.70 | % | | | 26.24 | % | | | (29.54 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,668 | | | $ | 6,938 | | | $ | 7,912 | | | $ | 3,289 | | | $ | 1,721 | | | $ | 1,489 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 1.98 | % | | | 2.26 | % | | | 2.47 | % | | | 2.23 | % | | | 2.81 | % | | | 2.15 | % |
| Total expenses | | | 1.64 | % | | | 1.61 | % | | | 1.60 | % | | | 1.63 | % | | | 1.64 | % | | | 1.64 | % |
| Portfolio turnover rate | | | 276 | % | | | 534 | % | | | 549 | % | | | 800 | % | | | 758 | % | | | 684 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 27.96 | | | $ | 25.31 | | | $ | 23.76 | | | $ | 22.21 | | | $ | 18.71 | | | $ | 26.93 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .18 | | | | .42 | | | | .42 | | | | .39 | | | | .39 | | | | .32 | |
| Net gain (loss) on investments (realized and unrealized) | | | (.98 | ) | | | 3.35 | | | | 1.53 | | | | 2.78 | | | | 4.33 | | | | (8.41 | ) |
| Total from investment operations | | | (.80 | ) | | | 3.77 | | | | 1.95 | | | | 3.17 | | | | 4.72 | | | | (8.09 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Total distributions | | | — | | | | (1.12 | ) | | | (.40 | ) | | | (1.62 | ) | | | (1.22 | ) | | | (.13 | ) |
| Net asset value, end of period | | $ | 27.16 | | | $ | 27.96 | | | $ | 25.31 | | | $ | 23.76 | | | $ | 22.21 | | | $ | 18.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (2.86 | %) | | | 15.58 | % | | | 8.28 | % | | | 14.85 | % | | | 25.24 | % | | | (30.08 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,488 | | | $ | 7,001 | | | $ | 6,961 | | | $ | 4,751 | | | $ | 7,306 | | | $ | 4,127 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 1.27 | % | | | 1.62 | % | | | 1.70 | % | | | 1.72 | % | | | 1.77 | % | | | 1.31 | % |
| Total expenses | | | 2.39 | % | | | 2.36 | % | | | 2.35 | % | | | 2.38 | % | | | 2.39 | % | | | 2.39 | % |
| Portfolio turnover rate | | | 276 | % | | | 534 | % | | | 549 | % | | | 800 | % | | | 758 | % | | | 684 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income per share 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. |
| 126 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) |
| 1. | Organization and Significant Accounting Policies |
Organization
The Rydex Series Funds (the “Trust”) is registered with the SEC under the Investment Company Act of 1940 (”1940 Act”) as a non-diversified, open-ended investment company. Each series, in effect, is representing a separate Fund (collectively the “Funds”). The Trust is authorized to issue an unlimited number of shares. The Trust accounts for the assets of each Fund separately.
The Trust offers a combination of eight separate classes of shares: Investor Class shares, Advisor Class shares, A-Class shares, C-Class shares, H-Class shares, Y-Class shares, Institutional Class shares and Money Market Class shares. Sales of shares of each Class are made without a front-end sales charge at the net asset value per share (“NAV”), with the exception of A-Class shares. A-Class shares are sold at the NAV, plus the applicable front-end sales charge. The sales charge varies depending on the amount purchased, but will not exceed 4.75%. A-Class share purchases of $1 million or more are exempt from the front-end sales charge but have a 1% contingent deferred sales charge (“CDSC”) if shares are redeemed within 12 months of purchase. C-Class shares have a 1% CDSC if shares are redeemed within 12 months of purchase.
At September 30, 2013, the Trust consisted of fifty-one separate funds. This report covers the Sector Funds (the “Funds”), while the other funds are contained in separate reports. Only Investor Class, Advisor Class, A-Class, C-Class and H-Class shares had been issued by the Funds.
Guggenheim Investments (“GI”) provides advisory services and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Distributors, LLC (“GDL”) acts as principal underwriter for the Trust. GI, RFS and GDL are affiliated entities.
The Funds invest in a specific industry sector. To the extent that investments are concentrated in a single sector, the Funds are subject to legislative or regulatory changes, adverse market conditions and/or increased competition affecting such sector.
The Funds seek capital appreciation and invest substantially all of their assets in equity securities of companies involved in their sector.
The Funds are designed and operated to accommodate frequent trading by shareholders and, unlike most mutual funds, offer unlimited exchange privileges with no minimum holding periods or transactions fees, which may cause the Funds to experience high portfolio turnover.
Significant Accounting Policies
The following significant accounting policies are in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and are consistently followed by the Trust. This requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. All time references are based on Eastern Time.
A. Equity securities listed on an exchange (New York Stock Exchange (“NYSE”) or American Stock Exchange) are valued at the last quoted sales price as of the close of business on the NYSE, usually 4:00 p.m. on the valuation date. Equity securities listed on the NASDAQ market system are valued at the NASDAQ Official Closing Price on the valuation date.
Repurchase agreements are valued at amortized cost, which approximates market value.
Investments for which market quotations are not readily available are fair valued as determined in good faith by GI under the direction of the Board of Trustees using methods established or ratified by the Board of Trustees. These methods include, but are not limited to: (i) obtaining general information as to how these securities and assets trade; (ii) obtaining other information and considerations, including current values in related markets.
B. Security transactions are recorded on the trade date for financial reporting purposes. Realized gains and losses from securities transactions are recorded using the identified cost basis. Proceeds from lawsuits related to investment holdings are recorded as realized gains in the respective Fund. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Taxable non-cash dividends are recorded as dividend income. Interest income, including amortization of premiums and accretion of discounts, is accrued on a daily basis. Distributions received from investments in REITs are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distribution by the issuer.
Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Funds do not isolate that portion of the results of operations resulting from changes in foreign
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 127 |
| NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued) |
exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain and loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies and currency gains or losses realized between the trade and settlement dates on investment transactions. Net unrealized exchange gains and losses arise from changes in the fair values of assets and liabilities other than investments in securities at the fiscal period end, resulting from changes in exchange rates.
C. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.
D. The Funds may leave cash overnight in their cash account with the custodian, U.S. Bank. Periodically, a Fund may have cash due to the custodian bank as an overdraft balance. A fee is incurred on this overdraft, calculated by multiplying the overdraft by a rate based on the federal funds rate.
E. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the classes based upon the value of the outstanding shares in each class. Certain costs, such as distribution fees relating to A-Class shares and H-Class shares and service and distribution fees related to Advisor Class shares and C-Class shares, are charged directly to specific classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net assets of each Fund included in the Trust.
F. Throughout the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds and/or their affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
2. Fees and Other Transactions with Affiliates
Under the terms of an investment advisory contract, the Trust pays GI investment advisory fees calculated at the annualized rates below, based on the average daily net assets of the Funds.
| | | Management Fees | |
| Fund | | (as a % of Net Assets) | |
| Banking Fund | | | 0.85 | % |
| Basic Materials Fund | | | 0.85 | % |
| Biotechnology Fund | | | 0.85 | % |
| Consumer Products Fund | | | 0.85 | % |
| Electronics Fund | | | 0.85 | % |
| Energy Fund | | | 0.85 | % |
| Energy Services Fund | | | 0.85 | % |
| Financial Services Fund | | | 0.85 | % |
| Health Care Fund | | | 0.85 | % |
| Internet Fund | | | 0.85 | % |
| Leisure Fund | | | 0.85 | % |
| Precious Metals Fund | | | 0.75 | % |
| Real Estate Fund | | | 0.85 | % |
| Retailing Fund | | | 0.85 | % |
| Technology Fund | | | 0.85 | % |
| Telecommunications Fund | | | 0.85 | % |
| Transportation Fund | | | 0.85 | % |
| Utilities Fund | | | 0.85 | % |
RFS provides transfer agent and administrative services to the Funds calculated at an annual percentage rate of 0.25% of the average daily net assets of each Fund.
RFS also provides accounting services to the Funds for fees calculated at annualized rates below, based on the average daily net assets of each Fund.
| Fund Accounting Fees | | (as a % of net assets) | |
| On the first $250 million | | | 0.10 | % |
| On the next $250 million | | | 0.075 | % |
| On the next $250 million | | | 0.05 | % |
| Over $750 million | | | 0.03 | % |
RFS engages external service providers to perform other necessary services for the Trust, such as audit and accounting related services, legal services, custody, printing and mailing, etc., on a pass-through basis. Such expenses are allocated to various Funds within the complex based on relative net assets.
The Trust has adopted a Distribution and Shareholder Services Plan applicable to its Advisor Class shares and a Distribution Plan applicable to A-Class and H-Class shares for which GDL and other firms that provide distribution and/or shareholder services (“Service Providers”) may receive compensation. If a Service Provider provides distribution services, the Funds will pay distribution fees to GDL at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GDL, in turn, will pay the Service Provider out of its fees. GDL may, at its discretion, retain a portion of such payments to compensate itself for
| 128 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
distribution services. With regard to Advisor Class shares only, if a Service Provider provides shareholder services, GDL will receive shareholder servicing fees from the Funds at an annual rate not to exceed 0.25% of average daily net assets. GDL, in turn, will compensate Service Providers for providing such services, while retaining a portion of such payments to compensate itself for shareholder services it performs.
The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds’ C-Class shares average daily net assets. The annual 0.25% service fee compensates the shareholder’s financial advisor for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GDL for paying the shareholder’s financial advisor an ongoing sales commission. GDL advances the first year’s service and distribution fees to the financial advisor. GDL retains the service and distribution fees on accounts with no authorized dealer of record.
For the period ended September 30, 2013, GDL retained sales charges of $158,439 relating to sales of A-Class shares of the Trust.
Certain officers and trustees of the Trust are also officers of GI, RFS and GDL.
3. Federal Income Tax Information
The Funds intend to comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and will distribute substantially all taxable net investment income and capital gains sufficient to relieve the Funds from all, or substantially all, federal income, excise and state income taxes. Therefore, no provision for federal or state income tax is required.
Tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Funds’ tax positions taken, or to be taken, on Federal income tax returns for all open tax years, and has concluded that no provision for income tax is required in the Funds’ financial statements. A fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed.
The RIC Modernization Act of 2010 was signed into law on December 22, 2010. It simplified some of the tax provisions applicable to regulated investment companies and the tax reporting to their shareholders, and improved the tax efficiency of certain fund structures. The changes were generally effective for taxable years beginning after the date of enactment.
One of the more prominent changes addresses capital loss carry forwards. Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. As a result of this ordering rule, pre-enactment capital loss carry forwards may potentially expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
At September 30, 2013, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value, were as follows:
THE RYDEX FUNDS SEMI-ANNUAL REPORT | 129
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| | | | | | Tax | | | Tax | | | Net | |
| | | Tax | | | Unrealized | | | Unrealized | | | Unrealized | |
| Fund Name | | Cost | | | Gain | | | Loss | | | Gain/(Loss) | |
| Banking Fund | | $ | 15,786,159 | | | $ | 914,543 | | | $ | (79,043 | ) | | $ | 835,500 | |
| Basic Materials Fund | | | 35,379,260 | | | | 5,504,339 | | | | (319,552 | ) | | | 5,184,787 | |
| Biotechnology Fund | | | 275,619,991 | | | | 156,445,912 | | | | (7,144,993 | ) | | | 149,300,919 | |
| Consumer Products Fund | | | 146,580,720 | | | | 35,391,610 | | | | (1,199,211 | ) | | | 34,192,399 | |
| Electronics Fund | | | 8,871,549 | | | | 540,788 | | | | (66,957 | ) | | | 473,831 | |
| Energy Fund | | | 39,134,539 | | | | 20,069,136 | | | | (343,943 | ) | | | 19,725,193 | |
| Energy Services Fund | | | 28,540,708 | | | | 20,563,035 | | | | (93,260 | ) | | | 20,469,775 | |
| Financial Services Fund | | | 17,629,568 | | | | 2,566,373 | | | | (174,178 | ) | | | 2,392,195 | |
| Health Care Fund | | | 92,380,007 | | | | 31,828,254 | | | | (324,048 | ) | | | 31,504,206 | |
| Internet Fund | | | 27,014,330 | | | | 4,287,751 | | | | (308,231 | ) | | | 3,979,520 | |
| Leisure Fund | | | 23,850,214 | | | | 7,169,920 | | | | (48,330 | ) | | | 7,121,590 | |
| Precious Metals Fund | | | 85,302,872 | | | | — | | | | (14,720,287 | ) | | | (14,720,287 | ) |
| Real Estate Fund | | | 11,616,109 | | | | 390,073 | | | | (123,907 | ) | | | 266,166 | |
| Retailing Fund | | | 19,736,163 | | | | 5,236,382 | | | | (234,875 | ) | | | 5,001,507 | |
| Technology Fund | | | 29,860,585 | | | | 6,597,753 | | | | (427,956 | ) | | | 6,169,797 | |
| Telecommunications Fund | | | 4,389,893 | | | | — | | | | (242,878 | ) | | | (242,878 | ) |
| Transportation Fund | | | 104,999,764 | | | | 10,865,585 | | | | (1,206,563 | ) | | | 9,659,022 | |
| Utilities Fund | | | 17,213,417 | | | | 4,607,279 | | | | (22,112 | ) | | | 4,585,167 | |
4. Fair Value Measurement
In accordance with U.S. GAAP, 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 is utilized 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.).
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 summarizes the inputs used to value the Funds’ net assets at September 30, 2013:
130 | THE RYDEX FUNDS SEMI-ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| | | Level 1 | | | Level 2 | | | Level 3 | | | | |
| | | Investments | | | Investments | | | Investments | | | | |
| | | In Securities | | | In Securities | | | In Securities | | | Total | |
| Assets | | | | | | | | | | | | | | | | |
| Banking Fund | | $ | 16,311,282 | | | $ | 310,377 | | | $ | — | | | $ | 16,621,659 | |
| Basic Materials Fund | | | 39,807,644 | | | | 756,403 | | | | — | | | | 40,564,047 | |
| Biotechnology Fund | | | 386,694,998 | | | | 38,225,912 | | | | — | | | | 424,920,910 | |
| Consumer Products Fund | | | 178,943,925 | | | | 1,829,194 | | | | — | | | | 180,773,119 | |
| Electronics Fund | | | 9,308,037 | | | | 37,343 | | | | — | | | | 9,345,380 | |
| Energy Fund | | | 58,496,597 | | | | 363,135 | | | | — | | | | 58,859,732 | |
| Energy Services Fund | | | 48,311,372 | | | | 699,111 | | | | — | | | | 49,010,483 | |
| Financial Services Fund | | | 19,985,452 | | | | 36,311 | | | | — | | | | 20,021,763 | |
| Health Care Fund | | | 121,307,859 | | | | 2,576,354 | | | | — | | | | 123,884,213 | |
| Internet Fund | | | 30,175,803 | | | | 818,047 | | | | — | | | | 30,993,850 | |
| Leisure Fund | | | 30,216,808 | | | | 754,996 | | | | — | | | | 30,971,804 | |
| Precious Metals Fund | | | 65,296,560 | | | | 5,286,025 | | | | — | | | | 70,582,585 | |
| Real Estate Fund | | | 11,864,116 | | | | 18,159 | | | | — | | | | 11,882,275 | |
| Retailing Fund | | | 24,419,086 | | | | 318,584 | | | | — | | | | 24,737,670 | |
| Technology Fund | | | 35,635,524 | | | | 394,858 | | | | — | | | | 36,030,382 | |
| Telecommunications Fund | | | 4,084,912 | | | | 62,103 | | | | — | | | | 4,147,015 | |
| Transportation Fund | | | 114,484,940 | | | | 173,846 | | | | — | | | | 114,658,786 | |
| Utilities Fund | | | 21,636,195 | | | | 162,389 | | | | — | | | | 21,798,584 | |
For the period ended September 30, 2013, there were no transfers between levels.
5. Repurchase Agreements
The Funds transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury and U.S. Government Agencies. The collateral is in the possession of the Funds’ custodian and is evaluated to ensure that its market value exceeds, at a minimum, 102% of the original face amount of the repurchase agreements. Each Fund holds a pro rata share of the collateral based on the dollar amount of the repurchase agreement entered into by each Fund.
At September 30, 2013, the repurchase agreements in the joint account were as follows:
| Counterparty and | | | | | | | | | | | | | | |
| Terms of Agreement | | Face Value | | | Repurchase Price | | | Collateral | | Par Value | | | Fair Value | |
| Credit Suisse Group | | | | | | | | | | U.S. Treasury Note | | | | | | | | |
| 0.01% | | | | | | | | | | 0.88% | | | | | | | | |
| Due 10/01/13 | | $ | 21,096,136 | | | $ | 21,096,142 | | | 01/31/17 | | $ | 21,408,600 | | | $ | 21,518,088 | |
In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. The Funds’ investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.
6. Portfolio Securities Loaned
The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, Credit Suisse acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with Credit Suisse, cash collateral is invested in one or more joint repurchase agreements collateralized by obligations of the U.S. Treasury or Government Agencies and cash. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand.
THE RYDEX FUNDS SEMI-ANNUAL REPORT | 131
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At September 30, 2013, the Funds participated in securities lending as follows:
| | | Value of | | | Cash | |
| Fund | | Securities Loaned | | | Collateral Received | |
| Banking Fund | | $ | 168,456 | | | $ | 175,050 | |
| Basic Materials Fund | | | 487,490 | | | | 510,065 | |
| Biotechnology Fund | | | 35,194,217 | | | | 37,200,588 | |
| Consumer Products Fund | | | 1,829,718 | | | | 1,829,194 | * |
| Energy Fund | | | 222,680 | | | | 237,500 | |
| Energy Services Fund | | | 327,063 | | | | 335,775 | |
| Health Care Fund | | | 1,751,392 | | | | 1,829,431 | |
| Internet Fund | | | 476,178 | | | | 503,950 | |
| Leisure Fund | | | 479,246 | | | | 493,498 | |
| Precious Metals Fund | | | 4,364,146 | | | | 4,809,680 | |
| Retailing Fund | | | 246,252 | | | | 251,365 | |
| Technology Fund | | | 241,131 | | | | 250,250 | |
| Telecommunications Fund | | | 45,706 | | | | 49,245 | |
* Subsequent to September 30, 2013, additional collateral was received.
The following represents a breakdown of the collateral for the joint repurchase agreements at September 30, 2013:
| Counterparty and | | | | | | | | | | | | | | |
| Terms of Agreement | | Face Value | | | Repurchase Price | | | Collateral | | Par Value | | | Fair Value | |
| HSBC Securities, Inc. | | | | | | | | | | Fannie Mae | | | | | | | | |
| 0.06% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | $ | 33,647,201 | | | $ | 33,647,425 | | | 07/15/19 – 11/15/20 | | $ | 40,016,017 | | | $ | 34,319,314 | |
| RBS Securities, Inc. | | | | | | | | | | Freddie Mac | | | | | | | | |
| 0.07% | | | | | | | | | | 0.50% | | | | | | | | |
| Due 10/01/13 | | | 31,418,410 | | | | 31,418,654 | | | 01/15/16 | | | 32,093,965 | | | | 32,051,012 | |
7. Securities Transactions
For the period ended September 30, 2013, the cost of purchases and proceeds from sales of investment securities, excluding government securities and short-term investments, were as follows:
| Fund | | Purchases | | | Sales | |
| Banking Fund | | $ | 28,458,348 | | | $ | 32,351,367 | |
| Basic Materials Fund | | | 68,424,782 | | | | 83,483,839 | |
| Biotechnology Fund | | | 266,466,079 | | | | 187,476,014 | |
| Consumer Products Fund | | | 148,023,984 | | | | 199,946,909 | |
| Electronics Fund | | | 53,920,667 | | | | 50,078,337 | |
| Energy Fund | | | 40,130,774 | | | | 53,749,443 | |
| Energy Services Fund | | | 79,669,967 | | | | 83,974,762 | |
| Financial Services Fund | | | 48,243,460 | | | | 56,350,589 | |
| Health Care Fund | | | 153,596,932 | | | | 164,493,048 | |
| Internet Fund | | | 67,498,602 | | | | 49,082,973 | |
| Leisure Fund | | | 45,095,815 | | | | 43,757,630 | |
| Precious Metals Fund | | | 140,459,522 | | | | 136,078,461 | |
| Real Estate Fund | | | 77,526,906 | | | | 90,023,979 | |
| Retailing Fund | | | 111,578,478 | | | | 107,388,543 | |
| Technology Fund | | | 42,746,035 | | | | 22,777,802 | |
| Telecommunications Fund | | | 31,420,832 | | | | 31,745,910 | |
| Transportation Fund | | | 201,791,138 | | | | 183,674,053 | |
| Utilities Fund | | | 163,864,331 | | | | 201,345,419 | |
8. Line of Credit
The Trust, along with other affiliated trusts, secured an uncommitted, $75,000,000 line of credit from U.S. Bank, N.A., which expires June 15, 2014. This line of credit is reserved for emergency or temporary purposes. Borrowings, if any, under this arrangement bear interest equal to the Prime Rate, minus 2%, which shall be paid monthly, averaging 1.25% for the period ended September 30, 2013. On September 30, 2013, the Consumer Products Fund borrowed $746,000 under this agreement. The Funds did not have any other borrowings under this agreement at September 30, 2013.
132 | THE RYDEX FUNDS SEMI-ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The average daily balances borrowed for the period ended September 30, 2013 were as follows:
| Fund | | Average Daily Balance | |
| Banking Fund | | $ | 10,295 | |
| Basic Materials Fund | | | 41,956 | |
| Biotechnology Fund | | | 21,497 | |
| Consumer Products Fund | | | 26,880 | |
| Electronics Fund | | | 2,322 | |
| Energy Fund | | | 8,055 | |
| Energy Services Fund | | | 16,760 | |
| Financial Services Fund | | | 12,749 | |
| Health Care Fund | | | 23,661 | |
| Internet Fund | | | 26,060 | |
| Leisure Fund | | | 5,246 | |
| Precious Metals Fund | | | 18,426 | |
| Real Estate Fund | | | 20,361 | |
| Retailing Fund | | | 20,563 | |
| Technology Fund | | | 8,016 | |
| Telecommunications Fund | | | 12,530 | |
| Transportation Fund | | | 22,459 | |
| Utilities Fund | | | 92,087 | |
9. Legal Proceedings
Tribune Company
Rydex Series Funds has been named as a defendant and a putative member of the proposed defendant class of shareholders in the case entitled Kirschner v. FitzSimons, No. 12-2652 (S.D.N.Y.) (formerly Official Committee of Unsecured Creditors of Tribune Co. v. FitzSimons, Adv. Pro. No. 10-54010 (Bankr. D. Del.)) (the “FitzSimons action”), as a result of ownership by certain series of the Rydex Series Funds of shares in the Tribune Company (“Tribune”) in 2007, when Tribune effected a leveraged buyout transaction (“LBO”) by which Tribune converted to a privately-held company. In his complaint, the plaintiff has alleged that, in connection with the LBO, Tribune insiders and shareholders were overpaid for their Tribune stock using financing that the insiders knew would, and ultimately did, leave the Tribune Company insolvent. The plaintiff has asserted claims against certain insiders, major shareholders, professional advisers, and others involved in the LBO. The plaintiff is also attempting to obtain from former Tribune shareholders, including the Rydex Series Funds, the proceeds they received in connection with the LBO.
In June 2011, a group of Tribune creditors filed multiple actions against former Tribune shareholders involving state law constructive fraudulent conveyance claims arising out of the 2007 LBO (the “SLCFC actions”). Rydex Series Funds has been named as a defendant in one or more of these suits. In those actions, the creditors seek to recover from Tribune’s former shareholders the proceeds received in connection with the 2007 LBO.
The FitzSimons action and the SLCFC actions have been consolidated with the majority of the other Tribune LBO-related lawsuits in a multidistrict litigation proceeding captioned In re Tribune Company Fraudulent Conveyance Litig., No. 11-md-2696 (S.D.N.Y.) (the “MDL Proceeding”).
On September 23, 2013, the District Court granted the defendants’ omnibus motion to dismiss the SLCFC actions, on the basis that the creditors lacked standing. On September 30, 2013, the creditors filed a notice of appeal of the September 23 order. On October 28, 2013, the defendants filed a joint notice of cross-appeal of that same order.
On November 20, 2013, the District Court ordered the parties in the FitzSimons action to meet and confer regarding a potential protocol for the briefing and argument of motions to dismiss to be filed in that action.
None of these lawsuits alleges any wrongdoing on the part of Rydex Series Funds. The following series of Rydex Series Funds held shares of Tribune and tendered these shares as part of Tribune’s LBO: Nova Fund, S&P 500® Pure Value Fund, Multi-Cap Core Equity Fund, S&P 500® Fund, Multi-Hedge Strategies Fund and Hedged Equity Fund (the “Funds”). The value of the proceeds received by the foregoing Funds was $28,220, $109,242, $9,860, $3,400, $1,181,160, and $10,880, respectively. At this stage of the proceedings, Rydex Series Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
Lyondell Chemical Company
In December 2011, Rydex Series Funds was named as a defendant in Weisfelner, as Trustee of the LB Creditor Trust, v. Fund 1 (In re Lyondell Chemical Co.), Adv. Pro. No. 10-4609 (Bankr. S.D.N.Y.).
Similar to the claims made in the Tribune matter, the Weisfelner complaint seeks to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008.
THE RYDEX FUNDS SEMI-ANNUAL REPORT | 133
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
A motion to dismiss is currently pending before the Bankruptcy Court.
This lawsuit does not allege any wrongdoing on the part of Rydex Series Funds. The following series of Rydex Series Funds received cash proceeds from the cash out merger in the following amounts: Basic Materials Fund - $1,725,168; U.S. Long Short Momentum Fund - $2,193,600; Global 130/30 Strategy Fund - $37,920; Hedged Equity Fund - $1,440; and Multi-Hedge Strategies Fund - $1,116,480. At this stage of the proceedings, Rydex Series Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
10. Offsetting
In the normal course of business, the Funds may have entered in transactions subject to enforceable master netting arrangements or other similar arrangements. Generally, the right to offset in those agreements allows the funds to counteract the exposure to a specific counterparty with collateral received or delivered to that counterparty based on the terms of the arrangements. These arrangements provide for the right to liquidate upon the occurrence of an event of default, credit event upon merger or additional termination event.
The following tables present derivative financial instruments and secured financing transactions that are subject to enforceable netting arrangements and offset in the Statements of Assets and Liabilities in conformity with U.S. GAAP.
| | | | | | | | | | | | | | Gross Amounts Not Offset in the | |
| | | | | | | | | | | | | | Statements of Assets and Liabilities | |
| | | | | | | | | | | Net Amount of Assets | | | | | | | | | | |
| | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | Recognized Assets | | | Assets and Liabilities | | | and Liabilities | | | Instruments | | | Received | | | Amount | |
| Banking Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | $ | 310,377 | | | $ | — | | | $ | 310,377 | | | $ | — | | | $ | 310,377 | | | $ | — | |
| | | Securities lending | | | 168,456 | | | | — | | | | 168,456 | | | | — | | | | 168,456 | | | | — | |
| | | Total | | | 478,833 | | | | — | | | | 478,833 | | | | — | | | | 478,833 | | | | — | |
| Basic Materials Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 756,403 | | | | — | | | | 756,403 | | | | — | | | | 756,403 | | | | — | |
| | | Securities lending | | | 487,490 | | | | — | | | | 487,490 | | | | — | | | | 487,490 | | | | — | |
| | | Total | | | 1,243,893 | | | | — | | | | 1,243,893 | | | | — | | | | 1,243,893 | | | | — | |
| Biotechnology Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 38,225,912 | | | | — | | | | 38,225,912 | | | | — | | | | 38,225,912 | | | | — | |
| | | Securities lending | | | 35,194,217 | | | | — | | | | 35,194,217 | | | | — | | | | 35,194,217 | | | | — | |
| | | Total | | | 73,420,129 | | | | — | | | | 73,420,129 | | | | — | | | | 73,420,129 | | | | — | |
| Consumer Products Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | 1,829,718 | | | | — | | | | 1,829,718 | | | | — | | | | 1,829,718 | | | | — | |
| | | Repurchase agreements | | | 1,829,194 | | | | — | | | | 1,829,194 | | | | — | | | | 1,829,194 | | | | — | |
| | | Total | | | 3,658,912 | | | | — | | | | 3,658,912 | | | | — | | | | 3,658,912 | | | | — | |
| Electronics Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 37,343 | | | | — | | | | 37,343 | | | | — | | | | 37,343 | | | | — | |
| | | Total | | | 37,343 | | | | — | | | | 37,343 | | | | — | | | | 37,343 | | | | — | |
| Energy Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 363,135 | | | | — | | | | 363,135 | | | | — | | | | 363,135 | | | | — | |
| | | Securities lending | | | 222,680 | | | | — | | | | 222,680 | | | | — | | | | 222,680 | | | | — | |
| | | Total | | | 585,815 | | | | — | | | | 585,815 | | | | — | | | | 585,815 | | | | — | |
| Energy Services Fund | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 699,111 | | | | — | | | | 699,111 | | | | — | | | | 699,111 | | | | — | |
| | | Securities lending | | | 327,063 | | | | — | | | | 327,063 | | | | — | | | | 327,063 | | | | — | |
| | | Total | | | 1,026,174 | | | | — | | | | 1,026,174 | | | | — | | | | 1,026,174 | | | | — | |
| Financial Services Fund | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 36,311 | | | | — | | | | 36,311 | | | | — | | | | 36,311 | | | | — | |
| | | Total | | | 36,311 | | | | — | | | | 36,311 | | | | — | | | | 36,311 | | | | — | |
| Health Care Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 2,576,354 | | | | — | | | | 2,576,354 | | | | — | | | | 2,576,354 | | | | — | |
| | | Securities lending | | | 1,751,392 | | | | — | | | | 1,751,392 | | | | — | | | | 1,751,392 | | | | — | |
| | | Total | | | 4,327,746 | | | | — | | | | 4,327,746 | | | | — | | | | 4,327,746 | | | | — | |
134 | THE RYDEX FUNDS SEMI-ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (Unaudited) (concluded)
| Internet Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 818,047 | | | | — | | | | 818,047 | | | | — | | | | 818,047 | | | | — | |
| | | Securities lending | | | 476,178 | | | | — | | | | 476,178 | | | �� | — | | | | 476,178 | | | | — | |
| | | Total | | | 1,294,225 | | | | — | | | | 1,294,225 | | | | — | | | | 1,294,225 | | | | — | |
| Leisure Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 754,996 | | | | — | | | | 754,996 | | | | — | | | | 754,996 | | | | — | |
| | | Securities lending | | | 479,246 | | | | — | | | | 479,246 | | | | — | | | | 479,246 | | | | — | |
| | | Total | | | 1,234,242 | | | | — | | | | 1,234,242 | | | | — | | | | 1,234,242 | | | | — | |
| Precious Metals Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 5,286,025 | | | | — | | | | 5,286,025 | | | | — | | | | 5,286,025 | | | | — | |
| | | Securities lending | | | 4,364,146 | | | | — | | | | 4,364,146 | | | | — | | | | 4,364,146 | | | | — | |
| | | Total | | | 9,650,171 | | | | — | | | | 9,650,171 | | | | — | | | | 9,650,171 | | | | — | |
| Real Estate Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 18,159 | | | | — | | | | 18,159 | | | | — | | | | 18,159 | | | | — | |
| | | Total | | | 18,159 | | | | — | | | | 18,159 | | | | — | | | | 18,159 | | | | — | |
| Retailing Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | $318,584 | | | | $— | | | | $318,584 | | | | $— | | | | $318,584 | | | | $— | |
| | | Securities lending | | | 246,252 | | | | — | | | | 246,252 | | | | — | | | | 246,252 | | | | — | |
| | | Total | | | 564,836 | | | | — | | | | 564,836 | | | | — | | | | 564,836 | | | | — | |
| Technology Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 394,858 | | | | — | | | | 394,858 | | | | — | | | | 394,858 | | | | — | |
| | | Securities lending | | | 241,131 | | | | — | | | | 241,131 | | | | — | | | | 241,131 | | | | — | |
| | | Total | | | 635,989 | | | | — | | | | 635,989 | | | | — | | | | 635,989 | | | | — | |
| Telecommunications Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 62,103 | | | | — | | | | 62,103 | | | | — | | | | 62,103 | | | | — | |
| | | Securities lending | | | 45,706 | | | | — | | | | 45,706 | | | | — | | | | 45,706 | | | | — | |
| | | Total | | | 107,809 | | | | — | | | | 107,809 | | | | — | | | | 107,809 | | | | — | |
| Transportation Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 173,846 | | | | — | | | | 173,846 | | | | — | | | | 173,846 | | | | — | |
| | | Total | | | 173,846 | | | | — | | | | 173,846 | | | | — | | | | 173,846 | | | | — | |
| Utilities Fund | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 162,389 | | | | — | | | | 162,389 | | | | — | | | | 162,389 | | | | — | |
| | | Total | | | 162,389 | | | | — | | | | 162,389 | | | | — | | | | 162,389 | | | | — | |
| | | | | | | | | | | | | | Gross Amounts Not Offset in the | |
| | | | | | | | | | | | | | Statements of Assets and Liabilities | |
| | | | | | | | | | | Net Amount of | | | | | | | | | | |
| | | | | | | | | | | Liabilities | | | | | | | | | | |
| | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | Recognized Liabilities | | | Assets and Liabilities | | | and Liabilities | | | Instruments | | | Pledged | | | Amount | |
| Banking Fund | | Securities lending | | $ | 175,050 | | | $ | — | | | $ | 175,050 | | | $ | — | | | $ | 175,050 | | | $ | — | |
| Basic Materials Fund | | Securities lending | | | 510,065 | | | | — | | | | 510,065 | | | | — | | | | 510,065 | | | | — | |
| Biotechnology Fund | | Securities lending | | | 37,200,588 | | | | — | | | | 37,200,588 | | | | — | | | | 37,200,588 | | | | — | |
| Consumer Products Fund | | Securities lending | | | 1,829,194 | | | | — | | | | 1,829,194 | | | | — | | | | 1,829,194 | | | | — | |
| Energy Fund | | Securities lending | | | 237,500 | | | | — | | | | 237,500 | | | | — | | | | 237,500 | | | | — | |
| Energy Services Fund | | Securities lending | | | 335,775 | | | | — | | | | 335,775 | | | | — | | | | 335,775 | | | | — | |
| Health Care Fund | | Securities lending | | | 1,829,431 | | | | — | | | | 1,829,431 | | | | — | | | | 1,829,431 | | | | — | |
| Internet Fund | | Securities lending | | | 503,950 | | | | — | | | | 503,950 | | | | — | | | | 503,950 | | | | — | |
| Leisure Fund | | Securities lending | | | 493,498 | | | | — | | | | 493,498 | | | | — | | | | 493,498 | | | | — | |
| Precious Metals Fund | | Securities lending | | | 4,809,680 | | | | — | | | | 4,809,680 | | | | — | | | | 4,809,680 | | | | — | |
| Retailing Fund | | Securities lending | | | 251,365 | | | | — | | | | 251,365 | | | | — | | | | 251,365 | | | | — | |
| Technology Fund | | Securities lending | | | 250,250 | | | | — | | | | 250,250 | | | | — | | | | 250,250 | | | | — | |
| Telecommunications Fund | | Securities lending | | | 49,245 | | | | — | | | | 49,245 | | | | — | | | | 49,245 | | | | — | |
1 Refer to notes 5 and 6 for additional information regarding repurchase agreements and securities lending arrangements, respectively.
THE RYDEX FUNDS SEMI-ANNUAL REPORT | 135
OTHER INFORMATION (Unaudited)
Proxy Voting Information
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds’ portfolios is available, without charge and upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Schedules Information
The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1.800.820.0888.
Office Locations
The offices of Guggenheim Investments can be found in the following locations:
40 East 52nd Street
16th Floor
New York, NY 10022
(Headquarters)
Four Irvington Centre
805 King Farm Boulevard
Suite 600
Rockville, MD 20850
9401 Indian Creek Parkway
40 Corporate Woods
Suite 850
Overland Park, KS 66210
Board Considerations Regarding Approval of Investment Advisory Agreement
At in-person meetings of the Rydex Series Funds’ (the “Trust”) Board of Trustees (the “Board”) held on May 16 and June 5, 2013 (collectively, the “Meetings”), called for the purpose of, among other things, consideration of, and voting on, the approval and continuation of the investment advisory agreement applicable to the series of the Trust (each a “Fund” and collectively, the “Funds”), the Board, including the Trustees who are not “interested persons,” as defined by the Investment Company Act of 1940, of the Trust (“Independent Trustees”), unanimously approved the continuation of the investment advisory agreement (the “Investment Advisory Agreement”) between the Trust and Security Investors, LLC (referred to herein as the “Adviser”) with respect to each of the Funds for an additional one-year period, based on the Board’s review of qualitative and quantitative information provided by the Adviser.
In reaching the conclusion to approve the continuation of the Investment Advisory Agreement, the Independent Trustees requested and obtained from the Adviser such information as the Independent Trustees deemed reasonably necessary to evaluate the Investment Advisory Agreement. The Independent Trustees carefully evaluated this information and were advised by independent legal counsel with respect to their deliberations. In addition, the Board also received a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements, and the Independent Trustees met in executive session outside the presence of Fund management, and participated in question and answer sessions with representatives of the Adviser.
136 | THE RYDEX FUNDS SEMI-ANNUAL REPORT
OTHER INFORMATION (Unaudited) (continued)
In considering the continuation of the Investment Advisory Agreement, the Board determined that the agreement would enable shareholders of the Funds to continue to obtain high quality services at a cost that was appropriate, reasonable, and in the best interests of their shareholders. The Board, including the Independent Trustees, unanimously approved the continuation of the existing Investment Advisory Agreement. In reaching their decision, the Trustees carefully considered information that they had received throughout the year as part of their regular oversight of the Funds, including, in particular, information from the Adviser that the Board had received relating to the Investment Advisory Agreement at the Meetings. The Trustees noted that, at the Meetings, they had obtained and reviewed a wide variety of information, including certain comparative information regarding performance of the Funds relative to performance of other comparable funds.
As a part of their consideration of the approval of the Investment Advisory Agreement at the Meetings, the Trustees, including the Independent Trustees, had evaluated a number of considerations, including among others: (a) the nature and quality of the Adviser’s investment advisory and other services; (b) the Adviser’s investment management personnel; (c) the Adviser’s operations and financial condition; (d) the Adviser’s brokerage practices (including any soft dollar arrangements) and investment strategies; (e) the level of the fees that the Adviser charges compared with the fees charged to comparable funds or accounts, giving special attention to the absence of breakpoints in these fees and the rationale provide by the Adviser as to why the addition of breakpoints was not currently appropriate ; (f) each Fund’s overall fees and operating expenses compared with similar funds; (g) the level of the Adviser’s profitability from its Fund-related operations; (h) the Adviser’s compliance systems; (i) the Adviser’s policies and compliance procedures applicable to personal securities transactions; (j) the Adviser’s reputation, expertise and resources in the financial markets; and (k) Fund performance compared with similar funds. In its deliberations, the Board did not identify any single piece of information that was all-important or controlling. Based on the Board’s deliberations at the Meetings the Board, including all of the Independent Trustees, unanimously: (a) concluded that the terms of the Investment Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees were reasonable in light of the services that it provides to the Funds; and (c) agreed to approve and continue the Investment Advisory Agreement based upon the following considerations, among others:
| • | Nature, Extent and Quality of Services Provided by the Adviser. At the Meetings, the Board reviewed the scope of services to be provided by the Adviser under the Investment Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by the Adviser for the past year and the scope of services required to be provided during the upcoming year. The Trustees also considered the Adviser’s representations to the Board that the Adviser would continue to provide investment and related services that were of materially the same quality and quantity as services provided to the Funds in the past, and that these services are appropriate in scope and extent in light of the Funds’ operations, the competitive landscape of the investment company business and investor needs. |
| • | Fund Expenses and Performance of the Funds and the Adviser. At the Meetings, the Board reviewed statistical information provided by the Adviser regarding the expense ratio components and performance of each Fund. The Adviser engaged FUSE Research Network LLC (“FUSE”), an independent, third party research provider, to prepare advisory contract renewal reports to help the Board fulfill its advisory contract renewal responsibilities. The objective of the reports is to present the subject Funds’ relative position regarding fees, expenses and total return performance, with peer group and universe comparisons. This statistical information related to the expense ratio components included actual advisory fees, waivers/reimbursements, and gross and net total expenses for each Fund in comparison to other funds determined by FUSE to comprise each Fund’s applicable peer group. The Board also considered the Adviser’s representation that it found the peer groups compiled by FUSE to be appropriate. The statistical information related to the performance of each Fund included three month and one, three, and five year performance for the Fund compared to its peers. |
| • | Costs of Services Provided to the Funds and Profits Realized by the Adviser and its Affiliates. At the Meetings, the Board had reviewed information about the profitability of the Funds to the Adviser based on the advisory fees payable under the current Investment Advisory Agreement for the last calendar year. At the Meetings, the Board also analyzed the Funds’ expenses, including the investment advisory fees paid to the Adviser, and reviewed reports comparing the expense ratios of the Funds to those of other comparable funds. The Board also reviewed information regarding the direct revenue received by the Adviser and ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser and/or its affiliates. The Board also discussed the Adviser’s profit margin as reflected in the Adviser’s profitability analysis. |
THE RYDEX FUNDS SEMI-ANNUAL REPORT | 137
OTHER INFORMATION (Unaudited) (concluded)
| • | Economies of Scale. In connection with its review of the Funds’ profitability analysis at the Meetings, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ asset levels. The Trustees noted that the fees would not change due to breakpoints under the current Investment Advisory Agreement, and that no additional economies of scale would be directly realized as a result of increases in the asset levels of the Funds. In light of the relatively small size of many of the Funds and the fact that the size of individual Funds in the complex increases and decreases significantly from time to time due to unlimited trading that is permitted among most of the Funds in the complex, the Board concluded that economies of scale were not likely to be directly realized as a result of increases in the asset levels of the individual Funds, and accordingly, fee breakpoints were not currently appropriate for the Funds. |
| • | Other Benefits to the Adviser and/or its Affiliates. In addition to evaluating the services provided by the Adviser, the Board had considered the nature, extent, quality and cost of the administrative, distribution, and shareholder services performed by the Adviser’s affiliates under separate agreements at the Meetings. The Board noted that the Adviser reports portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or the Adviser at each quarterly Board meeting. |
On the basis of the information provided to it and its evaluation of that information, the Board, including the Independent Trustees, concluded that the terms of the Investment Advisory Agreement for the Funds were reasonable, and that approval of the Investment Advisory Agreement was in the best interests of the Funds.
138 | THE RYDEX FUNDS SEMI-ANNUAL REPORT
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) |
A Board of Trustees oversees the Trust, as well as other trusts of GI, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 800.820.0888.
All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
TRUSTEE AND OFFICER
| Name and | | Length of Service as Trustee | | Number of Funds |
| Year of Birth | | (Year Began) | | Overseen |
| Donald C. Cacciapaglia* | | Rydex Series Funds – 2012 | | 211 |
| (1951) | | Rydex Variable Trust – 2012 | | |
| | | Rydex Dynamic Funds – 2012 | | |
| | | Rydex ETF Trust – 2012 | | |
Principal Occupations During Past Five Years: Current: Security Investors, LLC: President and CEO from April 2012 to present; Guggenheim Investments: President and Chief Administrative Officer from February 2010 to present; Previous: Channel Capital Group, Inc.: Chairman and CEO from April 2002 to February 2010
Positions held within the Trust: Trustee from 2012 to present; President from 2012 to present
INDEPENDENT TRUSTEES
| Name and | | Length of Service as Trustee | | Number of Funds |
| Year of Birth | | (Year Began) | | Overseen |
| Corey A. Colehour | | Rydex Series Funds – 1993 | | 131 |
| (1945) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired; Previous: President and Senior Vice President of Schield Management Company (registered investment adviser) from 2003 to 2006
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
| | | | | |
| J. Kenneth Dalton | | Rydex Series Funds – 1995 | | 131 |
| (1941) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1995 to present; Member and Chairman of the Audit Committee from 1997 to present; Member of the Governance and Nominating Committees from 1995 to present; and Member of the Risk Oversight Committee from 2010 to present
| | | | | |
| John O. Demaret | | Rydex Series Funds – 1997 | | 131 |
| (1940) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1997 to present; Chairman of the Board from 2006 to present; Member of the Audit Committee from 1997 to present; and Member of the Risk Oversight Committee from 2010 to present
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 139 |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (continued) |
INDEPENDENT TRUSTEES – concluded
| Name and | | Length of Service as Trustee | | Number of Funds |
| Year of Birth | | (Year Began) | | Overseen |
| Werner E. Keller | | Rydex Series Funds – 2005 | | 131 |
| (1940) | | Rydex Variable Trust – 2005 | | |
| | | Rydex Dynamic Funds – 2005 | | |
| | | Rydex ETF Trust – 2005 | | |
Principal Occupations During Past Five Years: Current: Founder and President of Keller Partners, LLC (investment research firm) from 2005 to present;
Previous: Retired from 2001 to 2005
Positions held within the Trust: Vice Chairman of the Board of Trustees from 2010 to present; Trustee and Member of the Audit and Governance and
Nominating Committees from 2005 to present; and Chairman and Member of the Risk Oversight Committee from 2010 to present
| | | | | |
| Thomas F. Lydon, Jr. | | Rydex Series Funds – 2005 | | 131 |
| (1960) | | Rydex Variable Trust – 2005 | | |
| | | Rydex Dynamic Funds – 2005 | | |
| | | Rydex ETF Trust – 2005 | | |
Principal Occupations During Past Five Years: Current: President of Global Trends Investments (registered investment adviser) from 1996 to present
Positions held within the Trust: Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present
| | | | | |
| Patrick T. McCarville | | Rydex Series Funds – 1997 | | 131 |
| (1942) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired; Previous: Chief Executive Officer of Par Industries, Inc., d/b/a Par Leasing from 1977 to 2010
Positions held within the Trust: Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; and Chairman of the Governance and Nominating Committees from 1997 to present
| | | | | |
| Roger Somers | | Rydex Series Funds – 1993 | | 131 |
| (1944) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Founder and Chief Executive Officer of Arrow Limousine from 1965 to present
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
EXECUTIVE OFFICERS
| Name, Position and | | | | Principal Occupations | |
| Year of Birth | | | | During Past Five Years | |
| | | |
Michael P. Byrum*
Vice President (1970) | | Current: President, Security Benefit Asset Management Holdings, LLC; Senior Vice President, Security Investors, LLC; President & Chief Investment Officer, Rydex Holdings, LLC; Director & Chairman of the Board, Advisor Research Center, Inc.; and Manager, Rydex Specialized Products, LLC |
| | | |
| | | Previous: Guggenheim Distributors, LLC (f/k/a Rydex Distributors, LLC), Vice President (2009); Rydex Fund Services, LLC, Director (2009–2010), Secretary (2002–2010); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.), Director (2008–2010), Chief Investment Officer (2006–2010), President (2004–2010), Secretary (2002–2010); Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Director (2008–2010), Chief Investment Officer (2006–2010), President (2004–2010), Secretary (2002–2010); Advisor Research Center, Inc., Secretary (2006–2009), and Executive Vice President (2006) |
| 140 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (concluded) |
EXECUTIVE OFFICERS – concluded
| Name, Position and | | | | Principal Occupations | |
| Year of Birth | | | | During Past Five Years | |
| | | |
Nikolaos Bonos*
Vice President and Treasurer (1963) | | 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; Treasurer, SBL Fund; Security Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; and Vice President, Security Benefit Asset Management Holdings, LLC |
| | | |
| | | Previous: Security Global Investors, LLC, Senior Vice President (2010–2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) Senior Vice President (2006–2011); Rydex Fund Services, LLC (f/k/a Rydex Fund Services, Inc.), Director (2009); and Rydex Specialized Products, LLC, Chief Financial Officer (2005–2009) |
| | | |
Elisabeth Miller*
Chief Compliance Officer (1968) | | Current: Chief Compliance Officer, Rydex Series Funds, Rydex Dynamic Funds, Rydex Variable Trust, Rydex ETF Trust, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund, Security Mid Cap Growth Fund, SBL Fund, Security Investors, LLC, and Guggenheim Distributors, LLC |
| | | |
| | | Previous: Senior Manager, Security Investors, LLC and Guggenheim Distributors, LLC (2004–2009) |
| | | |
Amy J. Lee*
Vice President and Secretary (1961) | | Current: Managing Director, Guggenheim Investments; Senior Vice President & Secretary, Security Investors, LLC; Secretary & Vice President, Rydex ETF Trust, Rydex Dynamic Funds, Rydex Variable Trust, SBL Fund, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund and Security Mid Cap Growth Fund; Vice President & Secretary, Rydex Holdings, LLC; Secretary, Advisor Research Center, Inc., Guggenheim Specialized Products, LLC, Guggenheim Distributors, LLC and Rydex Fund Services, LLC |
| | | |
| | | Previous: Vice President, Associate General Counsel & Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (1987–2012); Security Global Investors, LLC, Senior Vice President & Secretary (2007–2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Senior Vice President & Secretary (2010–2011) |
| | | |
Joseph M. Arruda*
Assistant Treasurer (1966) | | Current: Assistant Treasurer, SBL Fund; Security Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; Vice President, Security Investors, LLC; and Chief Financial Officer & Manager, Rydex Specialized Products, LLC |
| | | |
| | | Previous: Security Global Investors, LLC, Vice President (2010–2011); and Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Vice President (2004–2011) |
| * | Officers of the Funds are deemed to be “interested persons” of the Trust, within the meaning of Section 2(a)(19) of the 1940 Act, inasmuch as this person is affiliated with Guggenheim Investments. |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 141 |
| GUGGENHEIM INVESTMENTS PRIVACY POLICIES |
Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Distributors, LLC, Security Investors, LLC, Security Distributors, Inc. and Rydex Advisory Services (Collectively “Guggenheim Investments”).
Our Commitment to You
When you become a Guggenheim Investments 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 Guggenheim Investments 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 Guggenheim Investments account application or when you request a transaction that involves Rydex and Guggenheim Investments funds or one of the Guggenheim Investments 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 Guggenheim Investments. For example, if you ask to transfer assets from another financial institution to Guggenheim Investments, we will need to provide certain information about you to that company to complete the transaction. To alert you to other Guggenheim Investments investment products and services, we may share your information within the Guggenheim Investments family of affiliated companies. This would include, for example, sharing your information within Guggenheim Investments so we can make you aware of new Rydex and Guggenheim Investments funds or the services offered through another Guggenheim Investments 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, guggenheiminvestments.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 Guggenheim Investments 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 Guggenheim Investments 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.
| 142 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| GUGGENHEIM INVESTMENTS PRIVACY POLICIES (concluded) |
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 guggenheiminvestments.com. Should you have any questions regarding our privacy policy, contact us at 800.820.0888 or 301.296.5100.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 143 |
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| DOMESTIC EQUITY FUNDS | | INTERNATIONAL EQUITY FUNDS |
| NOVA FUND | | EUROPE 1.25x STRATEGY FUND |
| S&P 500® FUND | | JAPAN 2x STRATEGY FUND |
| INVERSE S&P 500® STRATEGY FUND | | |
| NASDAQ-100® FUND | | SPECIALTY FUNDS |
| INVERSE NASDAQ-100® STRATEGY FUND | | STRENGTHENING DOLLAR 2x STRATEGY FUND |
| MID-CAP 1.5x STRATEGY FUND | | WEAKENING DOLLAR 2x STRATEGY FUND |
| INVERSE MID-CAP STRATEGY FUND | | |
| RUSSELL 2000® 1.5x STRATEGY FUND | | FIXED INCOME FUNDS |
| RUSSELL 2000® FUND | | GOVERNMENT LONG BOND 1.2x STRATEGY FUND |
| INVERSE RUSSELL 2000® STRATEGY FUND | | INVERSE GOVERNMENT LONG BOND STRATEGY FUND |
| S&P 500® PURE GROWTH FUND | | HIGH YIELD STRATEGY FUND |
| S&P 500® PURE VALUE FUND | | INVERSE HIGH YIELD STRATEGY FUND |
| S&P MIDCAP 400® PURE GROWTH FUND | | |
| S&P MIDCAP 400® PURE VALUE FUND | | MONEY MARKET FUND |
| S&P SMALLCAP 600® PURE GROWTH FUND | | U.S. GOVERNMENT MONEY MARKET FUND |
| S&P SMALLCAP 600® PURE VALUE FUND | | |
| | | |
| | | |
RBENF-SEMI-0913x0314
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With Guggenheim Investments eDelivery you can:
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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 Guggenheim Distributors, LLC.
TABLE OF CONTENTS
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 1 |
September 30, 2013
Dear Shareholder:
Security Investors, LLC (the “Investment Adviser”) is pleased to present the semi-annual shareholder report for one or more of our Funds (the “Funds”) for the period ended September 30, 2013.
The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC, a global, diversified financial services firm.
Guggenheim Distributors, LLC is the distributor of the Funds. Guggenheim Distributors, LLC is affiliated with Guggenheim Partners, LLC and Security Investors, LLC.
We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Fund Profile for each Fund.
We are committed to providing innovative investment solutions and appreciate the trust you place in us.
Sincerely,
Donald C. Cacciapaglia
President
October 31, 2013
Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at guggenheiminvestments.com or call 800.820.0888.
There can be no assurance that any investment product will achieve its investment objective(s). There are risks associated with investing, including the entire loss of principal invested. Investing involves market risks. The investment return and principal value of any investment product will fluctuate with changes in market conditions.
| 2 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| ECONOMIC AND MARKET OVERVIEW | September 30, 2013 |
For the first part of the six-month period ended September 30, 2013, the U.S. economy and investment markets benefited from continued monetary accommodation from the world’s central banks and an improving picture for housing and employment.
Volatility rose in the final weeks of the period, however, as markets braced for a government shutdown over a budget impasse and suspected that the U.S. economy is not expanding quickly enough. In addition, confusion clouded the expected start of the end of quantitative easing (QE), speculation over which began rattling investors as far back as May. In refraining from tapering in September, the Fed made it clear that it does not currently see enough economic growth potential to remove extreme monetary accommodation.
The pace of job creation in this economic expansion continues to be subpar. Although the unemployment rate mid-year fell to a four and a half year low, its decline was more a function of a declining labor force participation rate than exuberant hiring. Additionally, solid job gains in the private sector over the period were overshadowed by sluggish growth in aggregate earnings, owing to a rising share of part-time employment which puts downward pressure on consumption growth.
Economic data continue to confirm that housing has been the key pillar supporting the ongoing U.S. expansion, generating 50% of growth in the first half of 2013. Concerns about tapering mid-year drove interest rates higher, with mortgage rates rising by over 100 basis points from May through August. This is having a severe impact on housing, even though it may not show up in the economic data until later in the year.
Markets also have had to deal with substantial uncertainty overseas. Fears of a Chinese credit crunch stoked investor anxiety, and measures implemented to address structural problems in China’s economy appear to be temporary rather than long-term solutions. The devaluation of the Japanese yen is putting pressure on all the economies in the region, making the global economy vulnerable to an unexpected economic shock. Europe, meanwhile, is bouncing along a bottom, and the growth outlook, while improving, remains weak.
From a policy standpoint, the Fed appears to be concerned about the impact higher interest rates are having on the economy and the housing sector in particular, and it seems to be guiding long-term rates closer to the rate of inflation to stimulate growth. The Federal Open Market Committee has been very clear that the Fed will not allow interest rates to rise significantly until output and the crucial real estate market have reaccelerated.
For the six-month period ended September 30, 2013, the return of the Standard & Poor’s 500® Index* (“S&P 500”) was 8.31%. The Barclays U.S. Aggregate Bond Index* returned -1.77% for the period, while the Bank of America Merrill Lynch 3 Month U.S. Treasury Bill Index* returned 0.04%. The MSCI World Index* returned 8.88%, while the MSCI Emerging Markets Index* returned -2.78%.
The opinions and forecasts expressed may not actually come to pass. This information is subject to change at any time, based on market and other conditions, and should not be construed as a recommendation of any specific security or strategy.
*Index Definitions:
The following indices are referenced throughout this report. Indices are unmanaged and not available for direct investment. Index performance does not reflect transaction costs, fees, or expenses.
Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS.
MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets.
MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
S&P 500® Index is a capitalization-weighted index of 500 stocks designed to measure the performance of the broad economy, representing all major industries and is considered a representation of the U.S. stock market.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 3 |
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited)
Many of the Funds described in this report are benchmarked daily to leveraged and/or inverse leveraged versions of published indices. To properly evaluate the performance of these funds, it is essential to understand the effect of mathematical compounding on their respective returns.
Because of the nonlinear effects of leverage applied over time, it is possible for a fund to perform in line with its benchmark for several individual periods in a row, yet seem to trail the benchmark over the entire period. It is also possible that a fund that performs in-line with its benchmark on a daily basis may seem to outperform its benchmark over longer periods.
An Example of Compounding
For example, consider a hypothetical fund that is designed to produce returns that correspond to 150% of an index. On the first day of a period, the index rises from a level of 100 to a level of 106, producing a 6.0% gain and an expectation that the fund will rise by 9.0%. On the same day, the fund’s net asset value per share (“NAV”) increases from $10.00 to $10.90 for a gain of 9.0%– in line with its benchmark.
On day two, assume the index falls from 106 to 99 for a loss of about 6.6%. The fund, as expected, falls 9.9% to a price of $9.82. On each day, the fund performed exactly in line with its benchmark, but for the two-day period, the fund was down 1.8%, while the index was down only 1.0%. Without taking into account the daily compounding of returns, one would expect the fund to lose 1.5% and would see the fund as trailing by 0.3% when in fact it had performed perfectly. This example is summarized in the table below.
| | | Index | | | Index | | | Fund | | | | | | Fund | | | | |
| | | Level | | | Performance | | | Expectation | | | Fund NAV | | | Performance | | | Assessment | |
| Start | | | 100 | | | | | | | | | | | | $10.00 | | | | | | | | | |
| Day 1 | | | 106 | | | | 6.0 | % | | | 9.0 | % | | | $10.90 | | | | 9.0 | % | | | In line | |
| Day 2 | | | 99 | | | | -6.6 | % | | | -9.9 | % | | | $ 9.82 | | | | -9.9 | % | | | In line | |
| Cumulative | | | | | | | -1.0 | % | | | -1.5 | % | | | | | | | -1.8 | % | | | -0.3 | % |
As illustrated by this simple example, the effect of leverage can make it difficult to form expectations or judgments about fund performance given only the returns of the unleveraged index.
Because certain funds seek to track the performance of their benchmark on a daily basis, mathematical compounding, especially with respect to those funds that use leverage as part of their investment strategy, may prevent a fund from correlating with the monthly, quarterly, annual or other period performance of its benchmark. Due to the compounding of daily returns, leveraged and inverse funds’ returns over periods other than one day will likely differ in amount and possibly direction from the benchmark return for the same period. Investors should monitor their leveraged and inverse funds’ holdings consistent with their strategies, as frequently as daily. For those funds that consistently apply leverage, the value of the fund’s shares will tend to increase or decrease more than the value of any increase or decrease in its benchmark index. For more on correlation, leverage and other risks, please read the prospectus.
In general, any change in direction in an index will produce compounding that seems to work against an investor. Were the index to move in the same direction (either up or down) for two or more periods in a row, the compounding of those returns would work in an investor’s favor, causing the fund to seemingly beat its benchmark.
As a general rule of thumb, more leverage in a fund will magnify the compounding effect, while less leverage will generally produce results that are more in line with expectations. In addition, periods of high volatility in an underlying index will also cause the effects of compounding to be more pronounced, while lower volatility will produce a more muted effect.
| 4 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)
All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. Shareholders of a Fund incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; and exchange fees; and (ii) ongoing costs, including management fees, administrative services, and shareholder reports, among others. These ongoing costs, or operating expenses, are deducted from a fund’s gross income and reduce the investment return of the fund.
A fund’s expenses are expressed as a percentage of its average net assets, which is known as the expense ratio. The following examples are intended to help investors understand the ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2013 and ending September 30, 2013.
The following tables illustrate a Fund’s costs in two ways:
Table 1. Based on actual Fund return. This section helps investors estimate the actual expenses paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. Investors may use the information here, together with the amount invested, to estimate the expenses paid over the period. Simply divide the Fund’s 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 provided under the heading “Expenses Paid During Period.”
Table 2. Based on hypothetical 5% return. This section is intended to help investors compare a Fund’s cost with those of other mutual funds. The table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid during the period. The example is useful in making comparisons because the U.S. Securities and Exchange Commission (the “SEC”) requires all mutual funds to calculate expenses based on the 5% return. Investors can assess a Fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
The calculations illustrated above assume no shares were bought or sold during the period. Actual costs may have been higher or lower, depending on the amount of investment and the timing of any purchases or redemptions.
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, and contingent deferred sales charges (“CDSC”) on redemptions, if any. Therefore, the second table 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.
More information about a Fund’s expenses, including annual expense ratios for the past five years, can be found in the Financial Highlights section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate Fund prospectus.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 5 |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued)
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Table 1. Based on actual Fund return3 | | | | | | | | | | | |
| Nova Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.27 | % | | | 11.42 | % | | | $1,000.00 | | | | $1,114.20 | | | | $ 6.73 | |
| Advisor Class | | | 1.78 | % | | | 11.15 | % | | | 1,000.00 | | | | 1,111.50 | | | | 9.42 | |
| A-Class | | | 1.52 | % | | | 11.31 | % | | | 1,000.00 | | | | 1,113.10 | | | | 8.05 | |
| C-Class | | | 2.27 | % | | | 10.89 | % | | | 1,000.00 | | | | 1,108.90 | | | | 12.00 | |
| S&P 500® Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.54 | % | | | 7.45 | % | | | 1,000.00 | | | | 1,074.50 | | | | 8.01 | |
| C-Class | | | 2.29 | % | | | 7.03 | % | | | 1,000.00 | | | | 1,070.30 | | | | 11.88 | |
| H-Class | | | 1.54 | % | | | 7.45 | % | | | 1,000.00 | | | | 1,074.50 | | | | 8.01 | |
| Inverse S&P 500® Strategy Fund | | | | | | | | | | | |
| Investor Class | | | 1.42 | % | | | (9.03 | %) | | | 1,000.00 | | | | 909.70 | | | | 6.80 | |
| Advisor Class | | | 1.93 | % | | | (9.22 | %) | | | 1,000.00 | | | | 907.80 | | | | 9.23 | |
| A-Class | | | 1.68 | % | | | (9.14 | %) | | | 1,000.00 | | | | 908.60 | | | | 8.04 | |
| C-Class | | | 2.43 | % | | | (9.43 | %) | | | 1,000.00 | | | | 905.70 | | | | 11.61 | |
| NASDAQ-100® Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.29 | % | | | 14.31 | % | | | 1,000.00 | | | | 1,143.10 | | | | 6.93 | |
| Advisor Class | | | 1.79 | % | | | 13.97 | % | | | 1,000.00 | | | | 1,139.70 | | | | 9.60 | |
| A-Class | | | 1.54 | % | | | 14.18 | % | | | 1,000.00 | | | | 1,141.80 | | | | 8.27 | |
| C-Class | | | 2.29 | % | | | 13.75 | % | | | 1,000.00 | | | | 1,137.50 | | | | 12.27 | |
| Inverse NASDAQ-100® Strategy Fund | | | | | | | | | | | |
| Investor Class | | | 1.46 | % | | | (14.12 | %) | | | 1,000.00 | | | | 858.80 | | | | 6.80 | |
| Advisor Class | | | 1.96 | % | | | (14.34 | %) | | | 1,000.00 | | | | 856.60 | | | | 9.12 | |
| A-Class | | | 1.71 | % | | | (14.08 | %) | | | 1,000.00 | | | | 859.20 | | | | 7.97 | |
| C-Class | | | 2.46 | % | | | (14.45 | %) | | | 1,000.00 | | | | 855.50 | | | | 11.44 | |
| Mid-Cap 1.5x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.68 | % | | | 11.52 | % | | | 1,000.00 | | | | 1,115.20 | | | | 8.91 | |
| C-Class | | | 2.43 | % | | | 11.11 | % | | | 1,000.00 | | | | 1,111.10 | | | | 12.86 | |
| H-Class | | | 1.68 | % | | | 11.48 | % | | | 1,000.00 | | | | 1,114.80 | | | | 8.91 | |
| Inverse Mid-Cap Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.67 | % | | | (9.74 | %) | | | 1,000.00 | | | | 902.60 | | | | 7.97 | |
| C-Class | | | 2.43 | % | | | (10.12 | %) | | | 1,000.00 | | | | 898.80 | | | | 11.57 | |
| H-Class | | | 1.67 | % | | | (9.76 | %) | | | 1,000.00 | | | | 902.40 | | | | 7.96 | |
| Russell 2000® 1.5x Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.72 | % | | | 19.35 | % | | | 1,000.00 | | | | 1,193.50 | | | | 9.46 | |
| C-Class | | | 2.47 | % | | | 18.92 | % | | | 1,000.00 | | | | 1,189.20 | | | | 13.56 | |
| H-Class | | | 1.72 | % | | | 19.37 | % | | | 1,000.00 | | | | 1,193.70 | | | | 9.46 | |
| Russell 2000® Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.59 | % | | | 12.74 | % | | | 1,000.00 | | | | 1,127.40 | | | | 8.48 | |
| C-Class | | | 2.36 | % | | | 12.21 | % | | | 1,000.00 | | | | 1,122.10 | | | | 12.55 | |
| H-Class | | | 1.58 | % | | | 12.59 | % | | | 1,000.00 | | | | 1,125.90 | | | | 8.42 | |
| Inverse Russell 2000® Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.71 | % | | | (13.89 | %) | | | 1,000.00 | | | | 861.10 | | | | 7.98 | |
| C-Class | | | 2.47 | % | | | (14.22 | %) | | | 1,000.00 | | | | 857.80 | | | | 11.50 | |
| H-Class | | | 1.72 | % | | | (13.87 | %) | | | 1,000.00 | | | | 861.30 | | | | 8.03 | |
| S&P 500® Pure Growth Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 13.82 | % | | | 1,000.00 | | | | 1,138.20 | | | | 8.15 | |
| C-Class | | | 2.27 | % | | | 13.40 | % | | | 1,000.00 | | | | 1,134.00 | | | | 12.14 | |
| H-Class | | | 1.53 | % | | | 13.85 | % | | | 1,000.00 | | | | 1,138.50 | | | | 8.20 | |
| S&P 500® Pure Value Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 12.73 | % | | | 1,000.00 | | | | 1,127.30 | | | | 8.11 | |
| C-Class | | | 2.27 | % | | | 12.30 | % | | | 1,000.00 | | | | 1,123.00 | | | | 12.08 | |
| H-Class | | | 1.52 | % | | | 12.73 | % | | | 1,000.00 | | | | 1,127.30 | | | | 8.11 | |
| 6 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued)
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| S&P MidCap 400® Pure Growth Fund | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 9.79 | % | | | $1,000.00 | | | | $1,097.90 | | | | $ 7.99 | |
| C-Class | | | 2.27 | % | | | 9.36 | % | | | 1,000.00 | | | | 1,093.60 | | | | 11.91 | |
| H-Class | | | 1.52 | % | | | 9.80 | % | | | 1,000.00 | | | | 1,098.00 | | | | 7.99 | |
| S&P MidCap 400® Pure Value Fund | | | | | | | | | | | |
| A-Class | | | 1.53 | % | | | 8.60 | % | | | 1,000.00 | | | | 1,086.00 | | | | 8.00 | |
| C-Class | | | 2.28 | % | | | 8.19 | % | | | 1,000.00 | | | | 1,081.90 | | | | 11.90 | |
| H-Class | | | 1.52 | % | | | 8.52 | % | | | 1,000.00 | | | | 1,085.20 | | | | 7.95 | |
| S&P SmallCap 600® Pure Growth Fund | | | | | | | | | | | |
| A-Class | | | 1.53 | % | | | 15.76 | % | | | 1,000.00 | | | | 1,157.60 | | | | 8.28 | |
| C-Class | | | 2.28 | % | | | 15.32 | % | | | 1,000.00 | | | | 1,153.20 | | | | 12.31 | |
| H-Class | | | 1.52 | % | | | 15.74 | % | | | 1,000.00 | | | | 1,157.40 | | | | 8.22 | |
| S&P SmallCap 600® Pure Value Fund | | | | | | | | | | | |
| A-Class | | | 1.53 | % | | | 16.06 | % | | | 1,000.00 | | | | 1,160.60 | | | | 8.29 | |
| C-Class | | | 2.28 | % | | | 15.65 | % | | | 1,000.00 | | | | 1,156.50 | | | | 12.33 | |
| H-Class | | | 1.53 | % | | | 16.08 | % | | | 1,000.00 | | | | 1,160.80 | | | | 8.29 | |
| Europe 1.25x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.68 | % | | | 11.94 | % | | | 1,000.00 | | | | 1,119.40 | | | | 8.93 | |
| C-Class | | | 2.43 | % | | | 10.16 | % | | | 1,000.00 | | | | 1,101.60 | | | | 12.80 | |
| H-Class | | | 1.67 | % | | | 10.77 | % | | | 1,000.00 | | | | 1,107.70 | | | | 8.82 | |
| Japan 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 21.05 | % | | | 1,000.00 | | | | 1,210.50 | | | | 8.42 | |
| C-Class | | | 2.27 | % | | | 20.64 | % | | | 1,000.00 | | | | 1,206.40 | | | | 12.56 | |
| H-Class | | | 1.52 | % | | | 21.10 | % | | | 1,000.00 | | | | 1,211.00 | | | | 8.42 | |
| Strengthening Dollar 2x Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.76 | % | | | (8.56 | %) | | | 1,000.00 | | | | 914.40 | | | | 8.45 | |
| C-Class | | | 2.53 | % | | | (8.97 | %) | | | 1,000.00 | | | | 910.30 | | | | 12.12 | |
| H-Class | | | 1.77 | % | | | (8.59 | %) | | | 1,000.00 | | | | 914.10 | | | | 8.49 | |
| Weakening Dollar 2x Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.78 | % | | | 5.72 | % | | | 1,000.00 | | | | 1,057.20 | | | | 9.18 | |
| C-Class | | | 2.55 | % | | | 5.26 | % | | | 1,000.00 | | | | 1,052.60 | | | | 13.12 | |
| H-Class | | | 1.81 | % | | | 5.67 | % | | | 1,000.00 | | | | 1,056.70 | | | | 9.33 | |
| Government Long Bond 1.2x Strategy Fund | | | | | | | | | | | |
| Investor Class | | | 0.97 | % | | | (9.43 | %) | | | 1,000.00 | | | | 905.70 | | | | 4.63 | |
| Advisor Class | | | 1.46 | % | | | (10.06 | %) | | | 1,000.00 | | | | 899.40 | | | | 6.95 | |
| A-Class | | | 1.22 | % | | | (9.44 | %) | | | 1,000.00 | | | | 905.60 | | | | 5.83 | |
| C-Class | | | 1.97 | % | | | (9.94 | %) | | | 1,000.00 | | | | 900.60 | | | | 9.39 | |
| Inverse Government Long Bond Strategy Fund | | | | |
| Investor Class | | | 3.10 | % | | | 10.35 | % | | | 1,000.00 | | | | 1,103.50 | | | | 16.35 | |
| Advisor Class | | | 3.15 | % | | | 10.43 | % | | | 1,000.00 | | | | 1,104.30 | | | | 16.62 | |
| A-Class | | | 3.39 | % | | | 10.29 | % | | | 1,000.00 | | | | 1,102.90 | | | | 17.87 | |
| C-Class | | | 4.11 | % | | | 9.90 | % | | | 1,000.00 | | | | 1,099.00 | | | | 21.63 | |
| High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.51 | % | | | 2.50 | % | | | 1,000.00 | | | | 1,025.00 | | | | 7.67 | |
| C-Class | | | 2.27 | % | | | 2.14 | % | | | 1,000.00 | | | | 1,021.40 | | | | 11.50 | |
| H-Class | | | 1.52 | % | | | 2.83 | % | | | 1,000.00 | | | | 1,028.30 | | | | 7.73 | |
| Inverse High Yield Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | (4.75 | %) | | | 1,000.00 | | | | 952.50 | | | | 7.44 | |
| C-Class | | | 2.27 | % | | | (5.13 | %) | | | 1,000.00 | | | | 948.70 | | | | 11.09 | |
| H-Class | | | 1.52 | % | | | (4.62 | %) | | | 1,000.00 | | | | 953.80 | | | | 7.44 | |
| U.S. Government Money Market Fund | | | | | | | | | | | |
| Money Market Class | | | 0.09 | % | | | 0.00 | % | | | 1,000.00 | | | | 1,000.00 | | | | 0.45 | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 7 |
ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued)
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| Table 2. Based on hypothetical 5% return (before expenses) | | | | | | | | |
| Nova Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.27 | % | | | 5.00 | % | | | $1,000.00 | | | | $1,018.70 | | | | $ 6.43 | |
| Advisor Class | | | 1.78 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.14 | | | | 9.00 | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| S&P 500® Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.54 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.35 | | | | 7.79 | |
| C-Class | | | 2.29 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.59 | | | | 11.56 | |
| H-Class | | | 1.54 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.35 | | | | 7.79 | |
| Inverse S&P 500® Strategy Fund | | | | | | | | | | | |
| Investor Class | | | 1.42 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.95 | | | | 7.18 | |
| Advisor Class | | | 1.93 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.39 | | | | 9.75 | |
| A-Class | | | 1.68 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.65 | | | | 8.49 | |
| C-Class | | | 2.43 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.89 | | | | 12.26 | |
| NASDAQ-100® Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 1.29 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.60 | | | | 6.53 | |
| Advisor Class | | | 1.79 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.09 | | | | 9.05 | |
| A-Class | | | 1.54 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.35 | | | | 7.79 | |
| C-Class | | | 2.29 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.59 | | | | 11.56 | |
| Inverse NASDAQ-100® Strategy Fund | | | | | | | | | | | |
| Investor Class | | | 1.46 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.75 | | | | 7.38 | |
| Advisor Class | | | 1.96 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.24 | | | | 9.90 | |
| A-Class | | | 1.71 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.50 | | | | 8.64 | |
| C-Class | | | 2.46 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.73 | | | | 12.41 | |
| Mid-Cap 1.5x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.68 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.65 | | | | 8.49 | |
| C-Class | | | 2.43 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.89 | | | | 12.26 | |
| H-Class | | | 1.68 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.65 | | | | 8.49 | |
| Inverse Mid-Cap Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.67 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.70 | | | | 8.44 | |
| C-Class | | | 2.43 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.89 | | | | 12.26 | |
| H-Class | | | 1.67 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.70 | | | | 8.44 | |
| Russell 2000® 1.5x Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.72 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.44 | | | | 8.69 | |
| C-Class | | | 2.47 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.68 | | | | 12.46 | |
| H-Class | | | 1.72 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.44 | | | | 8.69 | |
| Russell 2000® Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.59 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.10 | | | | 8.04 | |
| C-Class | | | 2.36 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.24 | | | | 11.91 | |
| H-Class | | | 1.58 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.15 | | | | 7.99 | |
| Inverse Russell 2000® Strategy Fund | | | | | | | | | | | |
| A-Class | | | 1.71 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.50 | | | | 8.64 | |
| C-Class | | | 2.47 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.68 | | | | 12.46 | |
| H-Class | | | 1.72 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.44 | | | | 8.69 | |
| S&P 500® Pure Growth Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| H-Class | | | 1.53 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.40 | | | | 7.74 | |
| 8 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (continued) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| S&P 500® Pure Value Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | $1,000.00 | | | | $1,017.45 | | | | $ 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| S&P MidCap 400® Pure Growth Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| S&P MidCap 400® Pure Value Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.53 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.40 | | | | 7.74 | |
| C-Class | | | 2.28 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.64 | | | | 11.51 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| S&P SmallCap 600® Pure Growth Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.53 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.40 | | | | 7.74 | |
| C-Class | | | 2.28 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.64 | | | | 11.51 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| S&P SmallCap 600® Pure Value Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.53 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.40 | | | | 7.74 | |
| C-Class | | | 2.28 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.64 | | | | 11.51 | |
| H-Class | | | 1.53 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.40 | | | | 7.74 | |
| Europe 1.25x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.68 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.65 | | | | 8.49 | |
| C-Class | | | 2.43 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.89 | | | | 12.26 | |
| H-Class | | | 1.67 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.70 | | | | 8.44 | |
| Japan 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| Strengthening Dollar 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.76 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.24 | | | | 8.90 | |
| C-Class | | | 2.53 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.38 | | | | 12.76 | |
| H-Class | | | 1.77 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.19 | | | | 8.95 | |
| Weakening Dollar 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.78 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,016.14 | | | | 9.00 | |
| C-Class | | | 2.55 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,012.28 | | | | 12.86 | |
| H-Class | | | 1.81 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.99 | | | | 9.15 | |
| Government Long Bond 1.2x Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | 0.97 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,020.21 | | | | 4.91 | |
| Advisor Class | | | 1.46 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.75 | | | | 7.38 | |
| A-Class | | | 1.22 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,018.95 | | | | 6.17 | |
| C-Class | | | 1.97 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,015.19 | | | | 9.95 | |
| Inverse Government Long Bond Strategy Fund | | | | | | | | | | | | | | | | |
| Investor Class | | | 3.10 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,009.53 | | | | 15.62 | |
| Advisor Class | | | 3.15 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,009.28 | | | | 15.87 | |
| A-Class | | | 3.39 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,008.07 | | | | 17.07 | |
| C-Class | | | 4.11 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,004.46 | | | | 20.65 | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 9 |
| ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited) (concluded) |
| | | | | | | | | Beginning | | | Ending | | | Expenses | |
| | | Expense | | | Fund | | | Account Value | | | Account Value | | | Paid During | |
| | | Ratio1 | | | Return | | | March 31, 2013 | | | September 30, 2013 | | | Period2 | |
| High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.51 | % | | | 5.00 | % | | | $1,000.00 | | | | $1,017.50 | | | | $ 7.64 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| Inverse High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | |
| A-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| C-Class | | | 2.27 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,013.69 | | | | 11.46 | |
| H-Class | | | 1.52 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,017.45 | | | | 7.69 | |
| U.S. Government Money Market Fund | | | | | | | | | | | | | | | | | | | | |
| Money Market Class | | | 0.09 | % | | | 5.00 | % | | | 1,000.00 | | | | 1,024.62 | | | | 0.46 | |
| 1 | This ratio represents annualized Net Expenses, which include interest expense related to securities sold short. Excluding short interest expense, the operating expense ratio of the Inverse Government Long Bond Strategy Fund would be 1.41%, 1.90%, 1.66% and 2.41% for the Investor Class, Advisor Class, A-Class and C-Class, respectively. This ratio excludes expenses of the underlying funds in which the Funds invest. |
| 2 | Expenses are equal to the Fund’s annualized expense ratio, net of any applicable fee waivers, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). |
| 3 | Actual cumulative return at net asset value for the period March 31, 2013 to September 30, 2013. |
| 10 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| FUND PROFILE (Unaudited) | September 30, 2013 |
NOVA FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 150% of the performance of the S&P 500® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates: | |
| Investor Class | July 12, 1993 |
| Advisor Class | October 15, 1998 |
| A-Class | March 31, 2004 |
| C-Class | March 14, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | | | |
| Apple, Inc. | | | 2.1 | % |
| Exxon Mobil Corp. | | | 1.8 | % |
| Microsoft Corp. | | | 1.2 | % |
| Google, Inc. — Class A | | | 1.2 | % |
| Johnson & Johnson | | | 1.2 | % |
| General Electric Co. | | | 1.2 | % |
| Chevron Corp. | | | 1.1 | % |
| Procter & Gamble Co. | | | 1.0 | % |
| Berkshire Hathaway, Inc. — Class B | | | 1.0 | % |
| Wells Fargo & Co. | | | 1.0 | % |
| Top Ten Total | | | 12.8 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 11 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| NOVA FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 72.8% | | | | | | | | |
| | | | | | | | | |
| INFORMATION TECHNOLOGY - 13.0% | | | | | | | | |
| Apple, Inc. | | | 4,046 | | | $ | 1,928,931 | |
| Microsoft Corp. | | | 33,769 | | | | 1,124,845 | |
| Google, Inc. — Class A* | | | 1,243 | | | | 1,088,756 | |
| International Business Machines Corp. | | | 4,590 | | | | 849,976 | |
| Cisco Systems, Inc. | | | 23,889 | | | | 559,480 | |
| Oracle Corp. | | | 15,883 | | | | 526,839 | |
| QUALCOMM, Inc. | | | 7,647 | | | | 515,102 | |
| Intel Corp. | | | 22,191 | | | | 508,618 | |
| Visa, Inc. — Class A | | | 2,298 | | | | 439,148 | |
| Mastercard, Inc. — Class A | | | 464 | | | | 312,170 | |
| eBay, Inc.* | | | 5,190 | | | | 289,550 | |
| EMC Corp. | | | 9,266 | | | | 236,839 | |
| Accenture plc — Class A | | | 2,874 | | | | 211,641 | |
| Texas Instruments, Inc. | | | 4,905 | | | | 197,524 | |
| Hewlett-Packard Co. | | | 8,561 | | | | 179,610 | |
| Automatic Data Processing, Inc. | | | 2,147 | | | | 155,400 | |
| Yahoo!, Inc.* | | | 4,231 | | | | 140,300 | |
| Salesforce.com, Inc.* | | | 2,442 | | | | 126,764 | |
| Cognizant Technology Solutions Corp. — Class A* | | | 1,341 | | | | 110,123 | |
| Adobe Systems, Inc.* | | | 2,084 | | | | 108,243 | |
| TE Connectivity Ltd. | | | 1,841 | | | | 95,327 | |
| Corning, Inc. | | | 6,509 | | | | 94,966 | |
| Applied Materials, Inc. | | | 5,360 | | | | 94,014 | |
| Dell, Inc. | | | 6,534 | | | | 89,973 | |
| Intuit, Inc. | | | 1,326 | | | | 87,927 | |
| Micron Technology, Inc.* | | | 4,630 | | | | 80,886 | |
| Symantec Corp. | | | 3,116 | | | | 77,121 | |
| Analog Devices, Inc. | | | 1,387 | | | | 65,258 | |
| NetApp, Inc. | | | 1,517 | | | | 64,655 | |
| Broadcom Corp. — Class A | | | 2,453 | | | | 63,803 | |
| SanDisk Corp. | | | 1,070 | | | | 63,676 | |
| Motorola Solutions, Inc. | | | 1,054 | | | | 62,587 | |
| Fidelity National Information Services, Inc. | | | 1,303 | | | | 60,511 | |
| Seagate Technology plc | | | 1,379 | | | | 60,317 | |
| Western Digital Corp. | | | 942 | | | | 59,723 | |
| Citrix Systems, Inc.* | | | 838 | | | | 59,171 | |
| Paychex, Inc. | | | 1,453 | | | | 59,050 | |
| Fiserv, Inc.* | | | 579 | | | | 58,508 | |
| Xilinx, Inc. | | | 1,182 | | | | 55,389 | |
| Amphenol Corp. — Class A | | | 712 | | | | 55,095 | |
| Xerox Corp. | | | 5,164 | | | | 53,138 | |
| Altera Corp. | | | 1,425 | | | | 52,953 | |
| Western Union Co. | | | 2,463 | | | | 45,960 | |
| KLA-Tencor Corp. | | | 742 | | | | 45,151 | |
| Juniper Networks, Inc.* | | | 2,262 | | | | 44,923 | |
| CA, Inc. | | | 1,459 | | | | 43,289 | |
| Linear Technology Corp. | | | 1,041 | | | | 41,286 | |
| Akamai Technologies, Inc.* | | | 791 | | | | 40,895 | |
| Autodesk, Inc.* | | | 990 | | | | 40,758 | |
| Teradata Corp.* | | | 731 | | | | 40,527 | |
| NVIDIA Corp. | | | 2,574 | | | | 40,051 | |
| Red Hat, Inc.* | | | 845 | | | | 38,988 | |
| Lam Research Corp.* | | | 727 | | | | 37,215 | |
| Microchip Technology, Inc. | | | 878 | | | | 35,375 | |
| Electronic Arts, Inc.* | | | 1,369 | | | | 34,978 | |
| Computer Sciences Corp. | | | 659 | | | | 34,097 | |
| VeriSign, Inc.* | | | 599 | | | | 30,483 | |
| F5 Networks, Inc.* | | | 353 | | | | 30,273 | |
| Harris Corp. | | | 477 | | | | 28,286 | |
| Molex, Inc. | | | 608 | | | | 23,420 | |
| Total System Services, Inc. | | | 741 | | | | 21,800 | |
| FLIR Systems, Inc. | | | 637 | | | | 20,002 | |
| LSI Corp. | | | 2,434 | | | | 19,034 | |
| Jabil Circuit, Inc. | | | 822 | | | | 17,821 | |
| JDS Uniphase Corp.* | | | 1,057 | | | | 15,548 | |
| Teradyne, Inc.* | | | 852 | | | | 14,075 | |
| First Solar, Inc.* | | | 311 | | | | 12,505 | |
| Total Information Technology | | | | | | | 11,920,647 | |
| FINANCIALS - 11.8% | | | | | | | | |
| Berkshire Hathaway, Inc. — Class B* | | | 8,014 | | | | 909,670 | |
| Wells Fargo & Co. | | | 21,527 | | | | 889,495 | |
| JPMorgan Chase & Co. | | | 16,765 | | | | 866,583 | |
| Bank of America Corp. | | | 47,861 | | | | 660,482 | |
| Citigroup, Inc. | | | 13,550 | | | | 657,311 | |
| American International Group, Inc. | | | 6,581 | | | | 320,034 | |
| American Express Co. | | | 4,133 | | | | 312,123 | |
| U.S. Bancorp | | | 8,191 | | | | 299,627 | |
| Goldman Sachs Group, Inc. | | | 1,857 | | | | 293,795 | |
| MetLife, Inc. | | | 4,986 | | | | 234,093 | |
| Simon Property Group, Inc. | | | 1,386 | | | | 205,447 | |
| Capital One Financial Corp. | | | 2,609 | | | | 179,343 | |
| PNC Financial Services Group, Inc. | | | 2,370 | | | | 171,707 | |
| Morgan Stanley | | | 6,195 | | | | 166,955 | |
| Prudential Financial, Inc. | | | 2,076 | | | | 161,886 | |
| Bank of New York Mellon Corp. | | | 5,122 | | | | 154,632 | |
| BlackRock, Inc. — Class A | | | 558 | | | | 151,006 | |
| ACE Ltd. | | | 1,515 | | | | 141,744 | |
| Travelers Companies, Inc. | | | 1,661 | | | | 140,803 | |
| State Street Corp. | | | 1,990 | | | | 130,843 | |
| American Tower Corp. — Class A | | | 1,762 | | | | 130,617 | |
| Aflac, Inc. | | | 2,076 | | | | 128,691 | |
| Charles Schwab Corp. | | | 5,149 | | | | 108,850 | |
| Discover Financial Services | | | 2,151 | | | | 108,712 | |
| Marsh & McLennan Companies, Inc. | | | 2,452 | | | | 106,785 | |
| BB&T Corp. | | | 3,137 | | | | 105,874 | |
| Allstate Corp. | | | 2,070 | | | | 104,639 | |
| Public Storage | | | 649 | | | | 104,196 | |
| CME Group, Inc. — Class A | | | 1,396 | | | | 103,137 | |
| Aon plc | | | 1,367 | | | | 101,759 | |
| Chubb Corp. | | | 1,140 | | | | 101,756 | |
| Franklin Resources, Inc. | | | 1,813 | | | | 91,647 | |
| Prologis, Inc. | | | 2,218 | | | | 83,441 | |
| T. Rowe Price Group, Inc. | | | 1,157 | | | | 83,223 | |
| HCP, Inc. | | | 2,030 | | | | 83,129 | |
| McGraw Hill Financial, Inc. | | | 1,229 | | | | 80,610 | |
| Ventas, Inc. | | | 1,310 | | | | 80,565 | |
| Ameriprise Financial, Inc. | | | 880 | | | | 80,150 | |
| Equity Residential | | | 1,493 | | | | 79,980 | |
| Health Care REIT, Inc. | | | 1,278 | | | | 79,722 | |
| SunTrust Banks, Inc. | | | 2,401 | | | | 77,840 | |
| 12 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| NOVA FUND | |
| | | | Shares | | | | Value | |
| | | | | | | | | |
| Weyerhaeuser Co. | | | 2,605 | | | $ | 74,581 | |
| Boston Properties, Inc. | | | 677 | | | | 72,371 | |
| Fifth Third Bancorp | | | 3,955 | | | | 71,348 | |
| AvalonBay Communities, Inc. | | | 545 | | | | 69,264 | |
| Progressive Corp. | | | 2,462 | | | | 67,040 | |
| Vornado Realty Trust | | | 778 | | | | 65,399 | |
| M&T Bank Corp. | | | 577 | | | | 64,578 | |
| Loews Corp. | | | 1,361 | | | | 63,613 | |
| Hartford Financial Services Group, Inc. | | | 2,026 | | | | 63,049 | |
| Invesco Ltd. | | | 1,974 | | | | 62,971 | |
| Moody’s Corp. | | | 862 | | | | 60,624 | |
| Host Hotels & Resorts, Inc. | | | 3,337 | | | | 58,965 | |
| IntercontinentalExchange, Inc.* | | | 321 | | | | 58,236 | |
| Regions Financial Corp. | | | 6,222 | | | | 57,616 | |
| Northern Trust Corp. | | | 1,003 | | | | 54,553 | |
| Principal Financial Group, Inc. | | | 1,223 | | | | 52,369 | |
| Lincoln National Corp. | | | 1,176 | | | | 49,380 | |
| SLM Corp. | | | 1,941 | | | | 48,331 | |
| KeyCorp | | | 4,058 | | | | 46,261 | |
| NYSE Euronext | | | 1,080 | | | | 45,338 | |
| XL Group plc — Class A | | | 1,272 | | | | 39,203 | |
| Leucadia National Corp. | | | 1,396 | | | | 38,027 | |
| Kimco Realty Corp. | | | 1,821 | | | | 36,748 | |
| Unum Group | | | 1,172 | �� | | | 35,676 | |
| Macerich Co. | | | 623 | | | | 35,162 | |
| Plum Creek Timber Company, Inc. | | | 731 | | | | 34,233 | |
| Comerica, Inc. | | | 828 | | | | 32,549 | |
| Cincinnati Financial Corp. | | | 653 | | | | 30,795 | |
| Huntington Bancshares, Inc. | | | 3,692 | | | | 30,496 | |
| Torchmark Corp. | | | 406 | | | | 29,374 | |
| CBRE Group, Inc. — Class A* | | | 1,237 | | | | 28,612 | |
| Genworth Financial, Inc. — Class A* | | | 2,199 | | | | 28,125 | |
| Zions Bancorporation | | | 819 | | | | 22,457 | |
| E*TRADE Financial Corp.* | | | 1,277 | | | | 21,071 | |
| People’s United Financial, Inc. | | | 1,432 | | | | 20,592 | |
| Hudson City Bancorp, Inc. | | | 2,122 | | | | 19,204 | |
| Assurant, Inc. | | | 339 | | | | 18,340 | |
| Apartment Investment & Management Co. — Class A | | | 652 | | | | 18,217 | |
| NASDAQ OMX Group, Inc. | | | 511 | | | | 16,398 | |
| Legg Mason, Inc. | | | 483 | | | | 16,152 | |
| Total Financials | | | | | | | 10,830,220 | |
| HEALTH CARE - 9.5% | | | | | | | | |
| Johnson & Johnson | | | 12,557 | | | | 1,088,565 | |
| Pfizer, Inc. | | | 29,495 | | | | 846,801 | |
| Merck & Company, Inc. | | | 13,041 | | | | 620,882 | |
| Gilead Sciences, Inc.* | | | 6,817 | | | | 428,379 | |
| Amgen, Inc. | | | 3,357 | | | | 375,783 | |
| Bristol-Myers Squibb Co. | | | 7,332 | | | | 339,325 | |
| UnitedHealth Group, Inc. | | | 4,525 | | | | 324,036 | |
| AbbVie, Inc. | | | 7,067 | | | | 316,107 | |
| Celgene Corp.* | | | 1,832 | | | | 282,000 | |
| Biogen Idec, Inc.* | | | 1,059 | | | | 254,965 | |
| Medtronic, Inc. | | | 4,441 | | | | 236,484 | |
| Abbott Laboratories | | | 6,923 | | | | 229,774 | |
| Express Scripts Holding Co.* | | | 3,630 | | | | 224,261 | |
| Eli Lilly & Co. | | | 4,422 | | | | 222,559 | |
| Baxter International, Inc. | | | 2,415 | | | | 158,642 | |
| Thermo Fisher Scientific, Inc. | | | 1,609 | | | | 148,269 | |
| McKesson Corp. | | | 1,018 | | | | 130,610 | |
| Covidien plc | | | 2,046 | | | | 124,683 | |
| Allergan, Inc. | | | 1,320 | | | | 119,394 | |
| WellPoint, Inc. | | | 1,333 | | | | 111,452 | |
| Actavis, Inc.* | | | 772 | | | | 111,168 | |
| Regeneron Pharmaceuticals, Inc.* | | | 349 | | | | 109,192 | |
| Aetna, Inc. | | | 1,655 | | | | 105,953 | |
| Alexion Pharmaceuticals, Inc.* | | | 870 | | | | 101,059 | |
| Cigna Corp. | | | 1,259 | | | | 96,767 | |
| Stryker Corp. | | | 1,315 | | | | 88,881 | |
| Becton Dickinson and Co. | | | 865 | | | | 86,517 | |
| Cardinal Health, Inc. | | | 1,515 | | | | 79,007 | |
| Vertex Pharmaceuticals, Inc.* | | | 1,040 | | | | 78,853 | |
| Agilent Technologies, Inc. | | | 1,470 | | | | 75,338 | |
| Boston Scientific Corp.* | | | 5,980 | | | | 70,205 | |
| Zoetis, Inc. | | | 2,230 | | | | 69,398 | |
| Cerner Corp.* | | | 1,312 | | | | 68,946 | |
| St. Jude Medical, Inc. | | | 1,275 | | | | 68,391 | |
| Intuitive Surgical, Inc.* | | | 179 | | | | 67,352 | |
| Mylan, Inc.* | | | 1,701 | | | | 64,927 | |
| Humana, Inc. | | | 695 | | | | 64,864 | |
| AmerisourceBergen Corp. — Class A | | | 1,031 | | | | 62,994 | |
| Zimmer Holdings, Inc. | | | 757 | | | | 62,180 | |
| Life Technologies Corp.* | | | 769 | | | | 57,544 | |
| Perrigo Co. | | | 420 | | | | 51,820 | |
| Forest Laboratories, Inc.* | | | 1,054 | | | | 45,101 | |
| DaVita HealthCare Partners, Inc.* | | | 782 | | | | 44,496 | |
| Quest Diagnostics, Inc. | | | 676 | | | | 41,770 | |
| Waters Corp.* | | | 380 | | | | 40,360 | |
| CR Bard, Inc. | | | 350 | | | | 40,320 | |
| Laboratory Corporation of America Holdings* | | | 400 | | | | 39,656 | |
| Varian Medical Systems, Inc.* | | | 480 | | | | 35,870 | |
| CareFusion Corp.* | | | 956 | | | | 35,276 | |
| Edwards Lifesciences Corp.* | | | 498 | | | | 34,676 | |
| Hospira, Inc.* | | | 739 | | | | 28,984 | |
| DENTSPLY International, Inc. | | | 638 | | | | 27,696 | |
| Tenet Healthcare Corp.* | | | 456 | | | | 18,783 | |
| PerkinElmer, Inc. | | | 496 | | | | 18,724 | |
| Patterson Companies, Inc. | | | 372 | | | | 14,954 | |
| Total Health Care | | | | | | | 8,690,993 | |
| CONSUMER DISCRETIONARY - 9.1% | | | | | | | | |
| Comcast Corp. — Class A | | | 11,650 | | | | 525,997 | |
| Amazon.com, Inc.* | | | 1,652 | | | | 516,480 | |
| Home Depot, Inc. | | | 6,378 | | | | 483,771 | |
| Walt Disney Co. | | | 7,401 | | | | 477,289 | |
| McDonald’s Corp. | | | 4,457 | | | | 428,807 | |
| Twenty-First Century Fox, Inc. | | | 8,846 | | | | 296,341 | |
| Ford Motor Co. | | | 17,551 | | | | 296,086 | |
| Time Warner, Inc. | | | 4,102 | | | | 269,953 | |
| Starbucks Corp. | | | 3,346 | | | | 257,542 | |
| NIKE, Inc. — Class B | | | 3,332 | | | | 242,036 | |
| Priceline.com, Inc.* | | | 226 | | | | 228,475 | |
| Lowe’s Companies, Inc. | | | 4,688 | | | | 223,196 | |
| Target Corp. | | | 2,809 | | | | 179,719 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 13 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| NOVA FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| TJX Companies, Inc. | | | 3,185 | | | $ | 179,602 | |
| Viacom, Inc. — Class B | | | 1,932 | | | | 161,477 | |
| General Motors Co.* | | | 4,191 | | | | 150,750 | |
| Yum! Brands, Inc. | | | 1,991 | | | | 142,137 | |
| Time Warner Cable, Inc. | | | 1,271 | | | | 141,844 | |
| CBS Corp. — Class B | | | 2,505 | | | | 138,176 | |
| DIRECTV* | | | 2,278 | | | | 136,111 | |
| Johnson Controls, Inc. | | | 3,052 | | | | 126,658 | |
| Discovery Communications, Inc. — Class A* | | | 1,032 | | | | 87,121 | |
| Netflix, Inc.* | | | 267 | | | | 82,559 | |
| VF Corp. | | | 391 | | | | 77,828 | |
| Dollar General Corp.* | | | 1,328 | | | | 74,979 | |
| Bed Bath & Beyond, Inc.* | | | 969 | | | | 74,962 | |
| Delphi Automotive plc | | | 1,257 | | | | 73,434 | |
| Omnicom Group, Inc. | | | 1,144 | | | | 72,576 | |
| Macy’s, Inc. | | | 1,672 | | | | 72,348 | |
| Ross Stores, Inc. | | | 965 | | | | 70,252 | |
| AutoZone, Inc.* | | | 162 | | | | 68,483 | |
| Coach, Inc. | | | 1,253 | | | | 68,326 | |
| L Brands, Inc. | | | 1,086 | | | | 66,355 | |
| Mattel, Inc. | | | 1,540 | | | | 64,465 | |
| Harley-Davidson, Inc. | | | 990 | | | | 63,598 | |
| Carnival Corp. | | | 1,947 | | | | 63,551 | |
| O’Reilly Automotive, Inc.* | | | 483 | | | | 61,626 | |
| Chipotle Mexican Grill, Inc. — Class A* | | | 143 | | | | 61,304 | |
| Starwood Hotels & Resorts Worldwide, Inc. | | | 867 | | | | 57,612 | |
| Wynn Resorts Ltd. | | | 362 | | | | 57,199 | |
| Dollar Tree, Inc.* | | | 997 | | | | 56,989 | |
| Genuine Parts Co. | | | 688 | | | | 55,652 | |
| Whirlpool Corp. | | | 352 | | | | 51,547 | |
| BorgWarner, Inc. | | | 507 | | | | 51,405 | |
| The Gap, Inc. | | | 1,231 | | | | 49,585 | |
| CarMax, Inc.* | | | 992 | | | | 48,082 | |
| Kohl’s Corp. | | | 907 | | | | 46,937 | |
| Best Buy Company, Inc. | | | 1,202 | | | | 45,075 | |
| Ralph Lauren Corp. — Class A | | | 272 | | | | 44,807 | |
| PVH Corp. | | | 364 | | | | 43,203 | |
| Staples, Inc. | | | 2,946 | | | | 43,159 | |
| Marriott International, Inc. — Class A | | | 1,018 | | | | 42,817 | |
| Scripps Networks Interactive, Inc. — Class A | | | 491 | | | | 38,352 | |
| TripAdvisor, Inc.* | | | 502 | | | | 38,072 | |
| Tiffany & Co. | | | 489 | | | | 37,467 | |
| Nordstrom, Inc. | | | 646 | | | | 36,305 | |
| Wyndham Worldwide Corp. | | | 591 | | | | 36,033 | |
| News Corp. — Class A* | | | 2,221 | | | | 35,669 | |
| PetSmart, Inc. | | | 465 | | | | 35,461 | |
| Newell Rubbermaid, Inc. | | | 1,280 | | | | 35,200 | |
| H&R Block, Inc. | | | 1,220 | | | | 32,525 | |
| Interpublic Group of Companies, Inc. | | | 1,885 | | | | 32,384 | |
| Family Dollar Stores, Inc. | | | 429 | | | | 30,897 | |
| Gannett Company, Inc. | | | 1,024 | | | | 27,433 | |
| Darden Restaurants, Inc. | | | 585 | | | | 27,080 | |
| Lennar Corp. — Class A | | | 743 | | | | 26,301 | |
| PulteGroup, Inc. | | | 1,561 | | | | 25,757 | |
| Fossil Group, Inc.* | | | 221 | | | | 25,689 | |
| GameStop Corp. — Class A | | | 517 | | | | 25,669 | |
| Goodyear Tire & Rubber Co.* | | | 1,099 | | | | 24,673 | |
| Expedia, Inc. | | | 475 | | | | 24,600 | |
| Garmin Ltd. | | | 544 | | | | 24,584 | |
| DR Horton, Inc. | | | 1,264 | | | | 24,560 | |
| Hasbro, Inc.1 | | | 516 | | | | 24,324 | |
| International Game Technology | | | 1,161 | | | | 21,978 | |
| Harman International Industries, Inc. | | | 302 | | | | 20,001 | |
| Leggett & Platt, Inc. | | | 637 | | | | 19,206 | |
| Urban Outfitters, Inc.* | | | 485 | | | | 17,833 | |
| Cablevision Systems Corp. — Class A | | | 954 | | | | 16,065 | |
| AutoNation, Inc.* | | | 291 | | | | 15,181 | |
| Abercrombie & Fitch Co. — Class A | | | 345 | | | | 12,203 | |
| JC Penney Company, Inc.* | | | 1,357 | | | | 11,969 | |
| Washington Post Co. — Class B | | | 17 | | | | 10,393 | |
| Total Consumer Discretionary | | | | | | | 8,314,147 | |
| INDUSTRIALS - 7.8% | | | | | | | | |
| General Electric Co. | | | 45,369 | | | | 1,083,865 | |
| United Technologies Corp. | | | 3,759 | | | | 405,295 | |
| Boeing Co. | | | 3,094 | | | | 363,545 | |
| 3M Co. | | | 2,893 | | | | 345,453 | |
| Union Pacific Corp. | | | 2,071 | | | | 321,709 | |
| United Parcel Service, Inc. — Class B | | | 3,220 | | | | 294,212 | |
| Honeywell International, Inc. | | | 3,493 | | | | 290,059 | |
| Caterpillar, Inc. | | | 2,839 | | | | 236,688 | |
| Emerson Electric Co. | | | 3,182 | | | | 205,875 | |
| Danaher Corp. | | | 2,670 | | | | 185,085 | |
| Lockheed Martin Corp. | | | 1,200 | | | | 153,060 | |
| FedEx Corp. | | | 1,324 | | | | 151,082 | |
| Precision Castparts Corp. | | | 651 | | | | 147,933 | |
| Eaton Corporation plc | | | 2,112 | | | | 145,390 | |
| Illinois Tool Works, Inc. | | | 1,835 | | | | 139,955 | |
| Deere & Co. | | | 1,708 | | | | 139,014 | |
| General Dynamics Corp. | | | 1,483 | | | | 129,792 | |
| CSX Corp. | | | 4,536 | | | | 116,757 | |
| Raytheon Co. | | | 1,437 | | | | 110,750 | |
| Norfolk Southern Corp. | | | 1,395 | | | | 107,903 | |
| Cummins, Inc. | | | 775 | | | | 102,974 | |
| Northrop Grumman Corp. | | | 1,029 | | | | 98,023 | |
| Delta Air Lines, Inc. | | | 3,822 | | | | 90,161 | |
| PACCAR, Inc. | | | 1,574 | | | | 87,609 | |
| Waste Management, Inc. | | | 1,940 | | | | 80,006 | |
| Ingersoll-Rand plc | | | 1,210 | | | | 78,577 | |
| WW Grainger, Inc. | | | 281 | | | | 73,541 | |
| Parker Hannifin Corp. | | | 665 | | | | 72,299 | |
| Tyco International Ltd. | | | 2,055 | | | | 71,884 | |
| Dover Corp. | | | 761 | | | | 68,361 | |
| Rockwell Automation, Inc. | | | 623 | | | | 66,624 | |
| Stanley Black & Decker, Inc. | | | 709 | | | | 64,214 | |
| Fastenal Co. | | | 1,220 | | | | 61,305 | |
| Roper Industries, Inc. | | | 440 | | | | 58,463 | |
| Pentair Ltd. | | | 885 | | | | 57,472 | |
| Kansas City Southern | | | 490 | | | | 53,586 | |
| Fluor Corp. | | | 729 | | | | 51,730 | |
| AMETEK, Inc. | | | 1,090 | | | | 50,162 | |
| Southwest Airlines Co. | | | 3,149 | | | | 45,849 | |
| Stericycle, Inc.* | | | 383 | | | | 44,198 | |
| CH Robinson Worldwide, Inc. | | | 706 | | | | 42,049 | |
| 14 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| NOVA FUND | |
| | | | Shares | | | | Value | |
| | | | | | | | | |
| Expeditors International of Washington, Inc. | | | 924 | | | $ | 40,711 | |
| Rockwell Collins, Inc. | | | 599 | | | | 40,648 | |
| Republic Services, Inc. — Class A | | | 1,214 | | | | 40,499 | |
| Flowserve Corp. | | | 631 | | | | 39,368 | |
| Pall Corp. | | | 496 | | | | 38,212 | |
| L-3 Communications Holdings, Inc. | | | 398 | | | | 37,611 | |
| ADT Corp. | | | 888 | | | | 36,106 | |
| Nielsen Holdings N.V. | | | 954 | | | | 34,773 | |
| Textron, Inc. | | | 1,254 | | | | 34,623 | |
| Jacobs Engineering Group, Inc.* | | | 585 | | | | 34,035 | |
| Masco Corp. | | | 1,590 | | | | 33,835 | |
| Equifax, Inc. | | | 544 | | | | 32,558 | |
| Quanta Services, Inc.* | | | 955 | | | | 26,272 | |
| Snap-on, Inc. | | | 262 | | | | 26,069 | |
| Robert Half International, Inc. | | | 624 | | | | 24,355 | |
| Joy Global, Inc. | | | 474 | | | | 24,193 | |
| Cintas Corp. | | | 460 | | | | 23,552 | |
| Xylem, Inc. | | | 830 | | | | 23,182 | |
| Iron Mountain, Inc. | | | 756 | | | | 20,427 | |
| Dun & Bradstreet Corp. | | | 175 | | | | 18,174 | |
| Pitney Bowes, Inc. | | | 904 | | | | 16,444 | |
| Ryder System, Inc. | | | 229 | | | | 13,671 | |
| Total Industrials | | | | | | | 7,151,827 | |
| ENERGY - 7.6% | | | | | | | | |
| Exxon Mobil Corp. | | | 19,609 | | | | 1,687,158 | |
| Chevron Corp. | | | 8,612 | | | | 1,046,358 | |
| Schlumberger Ltd. | | | 5,892 | | | | 520,617 | |
| ConocoPhillips | | | 5,447 | | | | 378,621 | |
| Occidental Petroleum Corp. | | | 3,593 | | | | 336,089 | |
| Anadarko Petroleum Corp. | | | 2,240 | | | | 208,298 | |
| EOG Resources, Inc. | | | 1,210 | | | | 204,829 | |
| Halliburton Co. | | | 3,765 | | | | 181,285 | |
| Phillips 66 | | | 2,719 | | | | 157,213 | |
| Apache Corp. | | | 1,797 | | | | 152,997 | |
| National Oilwell Varco, Inc. | | | 1,910 | | | | 149,190 | |
| Pioneer Natural Resources Co. | | | 613 | | | | 115,734 | |
| Williams Companies, Inc. | | | 3,044 | | | | 110,680 | |
| Marathon Oil Corp. | | | 3,161 | | | | 110,256 | |
| Noble Energy, Inc. | | | 1,600 | | | | 107,216 | |
| Kinder Morgan, Inc. | | | 2,995 | | | | 106,532 | |
| Spectra Energy Corp. | | | 2,984 | | | | 102,142 | |
| Hess Corp. | | | 1,281 | | | | 99,073 | |
| Devon Energy Corp. | | | 1,698 | | | | 98,076 | |
| Baker Hughes, Inc. | | | 1,979 | | | | 97,169 | |
| Marathon Petroleum Corp. | | | 1,400 | | | | 90,048 | |
| Valero Energy Corp. | | | 2,414 | | | | 82,438 | |
| Cabot Oil & Gas Corp. | | | 1,879 | | | | 70,124 | |
| Cameron International Corp.* | | | 1,092 | | | | 63,740 | |
| Equities Corp. | | | 670 | | | | 59,442 | |
| Chesapeake Energy Corp. | | | 2,262 | | | | 58,541 | |
| FMC Technologies, Inc.* | | | 1,052 | | | | 58,302 | |
| Southwestern Energy Co.* | | | 1,563 | | | | 56,862 | |
| Ensco plc — Class A | | | 1,041 | | | | 55,955 | |
| Range Resources Corp. | | | 732 | | | | 55,551 | |
| Murphy Oil Corp. | | | 781 | | | | 47,110 | |
| Noble Corp. | | | 1,129 | | | | 42,642 | |
| CONSOL Energy, Inc. | | | 1,023 | | | | 34,423 | |
| Helmerich & Payne, Inc. | | | 475 | | | | 32,751 | |
| Denbury Resources, Inc.* | | | 1,658 | | | | 30,524 | |
| Tesoro Corp. | | | 599 | | | | 26,344 | |
| QEP Resources, Inc. | | | 802 | | | | 22,207 | |
| Peabody Energy Corp. | | | 1,206 | | | | 20,804 | |
| Rowan Companies plc — Class A* | | | 555 | | | | 20,380 | |
| Diamond Offshore Drilling, Inc. | | | 307 | | | | 19,132 | |
| Nabors Industries Ltd. | | | 1,156 | | | | 18,565 | |
| WPX Energy, Inc.* | | | 891 | | | | 17,161 | |
| Newfield Exploration Co.* | | | 609 | | | | 16,668 | |
| Total Energy | | | | | | | 6,969,247 | |
| CONSUMER STAPLES - 7.3% | | | | | | | | |
| Procter & Gamble Co. | | | 12,199 | | | | 922,122 | |
| Coca-Cola Co. | | | 16,988 | | | | 643,505 | |
| Philip Morris International, Inc. | | | 7,210 | | | | 624,314 | |
| PepsiCo, Inc. | | | 6,871 | | | | 546,245 | |
| Wal-Mart Stores, Inc. | | | 7,247 | | | | 535,988 | |
| CVS Caremark Corp. | | | 5,477 | | | | 310,820 | |
| Altria Group, Inc. | | | 8,926 | | | | 306,608 | |
| Mondelez International, Inc. — Class A | | | 7,934 | | | | 249,286 | |
| Colgate-Palmolive Co. | | | 3,924 | | | | 232,693 | |
| Costco Wholesale Corp. | | | 1,949 | | | | 224,369 | |
| Walgreen Co. | | | 3,875 | | | | 208,475 | |
| Kimberly-Clark Corp. | | | 1,709 | | | | 161,022 | |
| Kraft Foods Group, Inc. | | | 2,652 | | | | 139,071 | |
| General Mills, Inc. | | | 2,862 | | | | 137,147 | |
| Archer-Daniels-Midland Co. | | | 2,940 | | | | 108,310 | |
| Whole Foods Market, Inc. | | | 1,657 | | | | 96,935 | |
| Kroger Co. | | | 2,309 | | | | 93,145 | |
| Sysco Corp. | | | 2,618 | | | | 83,331 | |
| Estee Lauder Companies, Inc. — Class A | | | 1,138 | | | | 79,546 | |
| Lorillard, Inc. | | | 1,662 | | | | 74,424 | |
| Reynolds American, Inc. | | | 1,414 | | | | 68,975 | |
| Kellogg Co. | | | 1,145 | | | | 67,246 | |
| Mead Johnson Nutrition Co. — Class A | | | 901 | | | | 66,908 | |
| Hershey Co. | | | 663 | | | | 61,328 | |
| ConAgra Foods, Inc. | | | 1,884 | | | | 57,161 | |
| Brown-Forman Corp. — Class B | | | 727 | | | | 49,530 | |
| JM Smucker Co. | | | 470 | | | | 49,369 | |
| Clorox Co. | | | 581 | | | | 47,479 | |
| Beam, Inc. | | | 726 | | | | 46,936 | |
| Coca-Cola Enterprises, Inc. | | | 1,112 | | | | 44,714 | |
| Constellation Brands, Inc. — Class A* | | | 737 | | | | 42,304 | |
| Dr Pepper Snapple Group, Inc. | | | 903 | | | | 40,472 | |
| Avon Products, Inc. | | | 1,928 | | | | 39,717 | |
| McCormick & Company, Inc. | | | 585 | | | | 37,850 | |
| Tyson Foods, Inc. — Class A | | | 1,241 | | | | 35,095 | |
| Molson Coors Brewing Co. — Class B | | | 700 | | | | 35,091 | |
| Safeway, Inc. | | | 1,080 | | | | 34,549 | |
| Campbell Soup Co. | | | 792 | | | | 32,242 | |
| Monster Beverage Corp.* | | | 601 | | | | 31,402 | |
| Hormel Foods Corp. | | | 603 | | | | 25,398 | |
| Total Consumer Staples | | | | | | | 6,691,122 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 15 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| NOVA FUND |
| | | Shares | | | Value | |
| | | | | | | | | |
| MATERIALS - 2.6% | | | | | | | | |
| Monsanto Co. | | | 2,378 | | | $ | 248,192 | |
| EI du Pont de Nemours & Co. | | | 4,110 | | | | 240,681 | |
| Dow Chemical Co. | | | 5,390 | | | | 206,976 | |
| Praxair, Inc. | | | 1,317 | | | | 158,317 | |
| Freeport-McMoRan Copper & Gold, Inc. | | | 4,625 | | | | 152,995 | |
| LyondellBasell Industries N.V. — Class A | | | 2,001 | | | | 146,533 | |
| Ecolab, Inc. | | | 1,206 | | | | 119,105 | |
| PPG Industries, Inc. | | | 640 | | | | 106,918 | |
| Air Products & Chemicals, Inc. | | | 937 | | | | 99,856 | |
| International Paper Co. | | | 1,990 | | | | 89,152 | |
| Sherwin-Williams Co. | | | 392 | | | | 71,415 | |
| Nucor Corp. | | | 1,418 | | | | 69,510 | |
| Mosaic Co. | | | 1,515 | | | | 65,175 | |
| Newmont Mining Corp. | | | 2,215 | | | | 62,242 | |
| CF Industries Holdings, Inc. | | | 259 | | | | 54,605 | |
| Eastman Chemical Co. | | | 686 | | | | 53,439 | |
| Sigma-Aldrich Corp. | | | 540 | | | | 46,062 | |
| FMC Corp. | | | 611 | | | | 43,821 | |
| Alcoa, Inc. | | | 4,766 | | | | 38,700 | |
| Airgas, Inc. | | | 299 | | | | 31,709 | |
| MeadWestvaco Corp. | | | 790 | | | | 30,320 | |
| Vulcan Materials Co. | | | 579 | | | | 29,998 | |
| International Flavors & Fragrances, Inc. | | | 364 | | | | 29,957 | |
| Ball Corp. | | | 649 | | | | 29,127 | |
| Sealed Air Corp. | | | 872 | | | | 23,709 | |
| Owens-Illinois, Inc.* | | | 735 | | | | 22,065 | |
| Avery Dennison Corp. | | | 441 | | | | 19,192 | |
| Bemis Company, Inc. | | | 454 | | | | 17,711 | |
| Allegheny Technologies, Inc. | | | 478 | | | | 14,589 | |
| Cliffs Natural Resources, Inc. | | | 680 | | | | 13,940 | |
| United States Steel Corp. | | | 647 | | | | 13,322 | |
| Total Materials | | | | | | | 2,349,333 | |
| UTILITIES - 2.3% | | | | | | | | |
| Duke Energy Corp. | | | 3,142 | | | | 209,823 | |
| Dominion Resources, Inc. | | | 2,584 | | | | 161,449 | |
| Southern Co. | | | 3,897 | | | | 160,478 | |
| NextEra Energy, Inc. | | | 1,888 | | | | 151,342 | |
| Exelon Corp. | | | 3,812 | | | | 112,988 | |
| American Electric Power Company, Inc. | | | 2,166 | | | | 93,896 | |
| Sempra Energy | | | 1,014 | | | | 86,798 | |
| PPL Corp. | | | 2,816 | | | | 85,550 | |
| PG&E Corp. | | | 1,988 | | | | 81,349 | |
| Public Service Enterprise Group, Inc. | | | 2,259 | | | | 74,389 | |
| Consolidated Edison, Inc. | | | 1,303 | | | | 71,847 | |
| FirstEnergy Corp. | | | 1,859 | | | | 67,761 | |
| Edison International | | | 1,453 | | | | 66,925 | |
| Xcel Energy, Inc. | | | 2,217 | | | | 61,211 | |
| Northeast Utilities | | | 1,399 | | | | 57,709 | |
| DTE Energy Co. | | | 778 | | | | 51,332 | |
| Entergy Corp. | | | 792 | | | | 50,046 | |
| ONEOK, Inc. | | | 923 | | | | 49,214 | |
| CenterPoint Energy, Inc. | | | 1,910 | | | | 45,783 | |
| NiSource, Inc. | | | 1,391 | | | | 42,968 | |
| Wisconsin Energy Corp. | | | 1,019 | | | | 41,147 | |
| NRG Energy, Inc. | | | 1,439 | | | | 39,328 | |
| Ameren Corp. | | | 1,082 | | | | 37,697 | |
| AES Corp. | | | 2,747 | | | | 36,508 | |
| CMS Energy Corp. | | | 1,181 | | | | 31,084 | |
| SCANA Corp. | | | 627 | | | | 28,867 | |
| Pinnacle West Capital Corp. | | | 489 | | | | 26,768 | |
| AGL Resources, Inc. | | | 533 | | | | 24,534 | |
| Pepco Holdings, Inc. | | | 1,114 | | | | 20,564 | |
| Integrys Energy Group, Inc. | | | 358 | | | | 20,009 | |
| TECO Energy, Inc. | | | 914 | | | | 15,118 | |
| Total Utilities | | | | | | | 2,104,482 | |
| TELECOMMUNICATION SERVICES - 1.8% | | | | | | | | |
| AT&T, Inc. | | | 23,659 | | | | 800,147 | |
| Verizon Communications, Inc. | | | 12,748 | | | | 594,822 | |
| Crown Castle International Corp.* | | | 1,310 | | | | 95,669 | |
| CenturyLink, Inc. | | | 2,678 | | | | 84,036 | |
| Windstream Holdings, Inc.1 | | | 2,644 | | | | 21,152 | |
| Frontier Communications Corp.1 | | | 4,457 | | | | 18,586 | |
| Total Telecommunication Services | | | | | | | 1,614,412 | |
| Total Common Stocks | | | | | | | | |
| (Cost $47,997,504) | | | | | | | 66,636,430 | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENTS††,2 - 7.9% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 3,729,842 | | | | 3,729,842 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/133 | | | 2,757,694 | | | | 2,757,694 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 420,997 | | | | 420,997 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 328,530 | | | | 328,530 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $7,237,063) | | | | | | | 7,237,063 | |
| SECURITIES LENDING COLLATERAL††,4 - 0.0% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 8,371 | | | | 8,371 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 7,817 | | | | 7,817 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $16,188) | | | | | | | 16,188 | |
| Total Investments - 80.7% | | | | | | | | |
| (Cost $55,250,755) | | | | | | $ | 73,889,681 | |
| Other Assets & Liabilities, net - 19.3% | | | | | | | 17,626,051 | |
| Total Net Assets - 100.0% | | | | | | $ | 91,515,732 | |
| 16 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| NOVA FUND |
| | | | | | Unrealized | |
| | | Contracts | | | Loss | |
| | | | | | | | | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 S&P 500 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $1,425,025) | | | 17 | | | $ | (4,741 | ) |
| | | | | | | | | |
| | | | Units | | | | | |
| EQUITY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 S&P 500 Index | | | | | | | | |
| Swap, Terminating 10/23/135 | | | | | | | | |
| (Notional Value $22,116,297) | | | 13,152 | | | $ | (41,304 | ) |
| Goldman Sachs International | | | | | | | | |
| October 2013 S&P 500 Index | | | | | | | | |
| Swap, Terminating 10/31/135 | | | | | | | | |
| (Notional Value $10,376,540) | | | 6,171 | | | | (104,934 | ) |
| Barclays Bank plc | | | | | | | | |
| October 2013 S&P 500 Index | | | | | | | | |
| Swap, Terminating 10/31/135 | | | | | | | | |
| (Notional Value $36,985,168) | | | 21,995 | | | | (175,143 | ) |
| (Total Notional Value $69,478,005) | | | | | | $ | (321,381 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 4 | Securities lending collateral — See Note 11. |
| 5 | Total Return based on S&P 500 Index +/- financing at a variable rate. |
plc — Public Limited Company
REIT — Real Estate Investment Trust
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 17 |
| NOVA FUND |
| |
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | |
| Investments, at value - including $15,484 of | | | | |
| securities loaned | | | | |
| (cost $47,997,504) | | $ | 66,636,430 | |
| Repurchase agreements, at value | | | | |
| (cost $7,253,251) | | | 7,253,251 | |
| Total investments | | | | |
| (cost $55,250,755) | | | 73,889,681 | |
| Segregated cash with broker | | | 2,399,500 | |
| Cash | | | 428 | |
| Receivables: | | | | |
| Fund shares sold | | | 16,278,348 | |
| Dividends | | | 69,395 | |
| Foreign taxes reclaim | | | 35 | |
| Interest | | | 15 | |
| Other assets | | | 4,177 | |
| Total assets | | | 92,641,579 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 321,381 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 625,045 | |
| Management fees | | | 43,249 | |
| Securities purchased | | | 25,201 | |
| Upon return of securities loaned | | | 16,188 | |
| Transfer agent and administrative fees | | | 14,416 | |
| Distribution and service fees | | | 10,268 | |
| Variation margin | | | 8,415 | |
| Portfolio accounting fees | | | 5,767 | |
| Miscellaneous | | | 55,917 | |
| Total liabilities | | | 1,125,847 | |
| Net assets | | $ | 91,515,732 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 103,554,685 | |
| Undistributed net investment income | | | 89,182 | |
| Accumulated net realized loss on investments | | | (30,440,939 | ) |
| Net unrealized appreciation on investments | | | 18,312,804 | |
| Net assets | | $ | 91,515,732 | |
| Investor Class: | | | | |
| Net assets | | $ | 74,135,738 | |
| Capital shares outstanding | | | 2,076,078 | |
| Net asset value per share | | $ | 35.71 | |
| Advisor Class: | | | | |
| Net assets | | $ | 6,552,804 | |
| Capital shares outstanding | | | 199,808 | |
| Net asset value per share | | $ | 32.80 | |
| A-Class: | | | | |
| Net assets | | $ | 1,136,526 | |
| Capital shares outstanding | | | 33,776 | |
| Net asset value per share | | $ | 33.65 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 35.33 | |
| C-Class: | | | | |
| Net assets | | $ | 9,690,664 | |
| Capital shares outstanding | | | 310,860 | |
| Net asset value per share | | $ | 31.17 | |
STATEMENT OF
OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | |
| Dividends (net of foreign withholding tax of $178) | | $ | 653,097 | |
| Interest | | | 1,488 | |
| Income from securities lending, net | | | 142 | |
| Total investment income | | | 654,727 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 283,947 | |
| Transfer agent and administrative fees | | | 94,649 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 23,966 | |
| A-Class | | | 1,440 | |
| C-Class | | | 46,742 | |
| Portfolio accounting fees | | | 37,859 | |
| Custodian fees | | | 4,044 | |
| Trustees’ fees* | | | 3,822 | |
| Line of credit fees | | | 6 | |
| Miscellaneous | | | 58,225 | |
| Total expenses | | | 554,700 | |
| Net investment income | | | 100,027 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (363,723 | ) |
| Swap agreements | | | 2,673,827 | |
| Futures contracts | | | 1,752,406 | |
| Net realized gain | | | 4,062,510 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 3,041,769 | |
| Swap agreements | | | (556,240 | ) |
| Futures contracts | | | (13,303 | ) |
| Net change in unrealized appreciation (depreciation) | | | 2,472,226 | |
| Net realized and unrealized gain | | | 6,534,736 | |
| Net increase in net assets resulting from operations | | $ | 6,634,763 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 18 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| NOVA FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income (loss) | | $ | 100,027 | | | $ | (15,582 | ) |
| Net realized gain on investments | | | 4,062,510 | | | | 14,699,226 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 2,472,226 | | | | (3,334,359 | ) |
| Net increase in net assets resulting from operations | | | 6,634,763 | | | | 11,349,285 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | — | | | | (57,812 | ) |
| Advisor Class | | | — | | | | (4,536 | ) |
| A-Class | | | — | | | | (1,140 | ) |
| C-Class | | | — | | | | (8,918 | ) |
| Total distributions to shareholders | | | — | | | | (72,406 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 189,911,520 | | | | 318,487,378 | |
| Advisor Class | | | 99,643,532 | | | | 349,562,781 | |
| A-Class | | | 220,944 | | | | 553,775 | |
| C-Class | | | 1,483,780 | | | | 3,903,743 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | — | | | | 56,051 | |
| Advisor Class | | | — | | | | 4,491 | |
| A-Class | | | — | | | | 985 | |
| C-Class | | | — | | | | 8,561 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (172,908,124 | ) | | | (328,304,032 | ) |
| Advisor Class | | | (106,452,073 | ) | | | (350,291,346 | ) |
| A-Class | | | (387,213 | ) | | | (1,019,449 | ) |
| C-Class | | | (1,452,377 | ) | | | (5,430,052 | ) |
| Net increase (decrease) from capital share transactions | | | 10,059,989 | | | | (12,467,114 | ) |
| Net increase (decrease) in net assets | | | 16,694,752 | | | | (1,190,235 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 74,820,980 | | | | 76,011,215 | |
| End of period | | $ | 91,515,732 | | | $ | 74,820,980 | |
| Undistributed/(Accumulated) net investment income/(loss) at end of period | | $ | 89,182 | | | $ | (10,845 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 5,467,995 | | | | 11,739,305 | |
| Advisor Class | | | 3,103,252 | | | | 14,143,960 | |
| A-Class | | | 6,746 | | | | 22,082 | |
| C-Class | | | 50,029 | | | | 165,288 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | — | | | | 2,049 | |
| Advisor Class | | | — | | | | 178 | |
| A-Class | | | — | | | | 38 | |
| C-Class | | | — | | | | 356 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (5,038,999 | ) | | | (12,129,842 | ) |
| Advisor Class | | | (3,314,878 | ) | | | (14,179,836 | ) |
| A-Class | | | (12,313 | ) | | | (40,802 | ) |
| C-Class | | | (48,819 | ) | | | (227,471 | ) |
| Net increase (decrease) in shares | | | 213,013 | | | | (504,695 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 19 |
| NOVA FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | | 2013a | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 32.05 | | | $ | 26.82 | | | $ | 24.59 | | | $ | 20.28 | | | $ | 11.40 | | | $ | 26.13 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .08 | | | | .05 | | | | .08 | | | | .02 | | | | .06 | | | | .19 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.58 | | | | 5.21 | | | | 2.15 | | | | 4.31 | | | | 8.97 | | | | (14.83 | ) |
| Total from investment operations | | | 3.66 | | | | 5.26 | | | | 2.23 | | | | 4.33 | | | | 9.03 | | | | (14.64 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Net asset value, end of period | | $ | 35.71 | | | $ | 32.05 | | | $ | 26.82 | | | $ | 24.59 | | | $ | 20.28 | | | $ | 11.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 11.42 | % | | | 19.62 | % | | | 9.07 | % | | | 21.38 | % | | | 79.36 | % | | | (56.06 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 74,136 | | | $ | 52,785 | | | $ | 54,598 | | | $ | 65,102 | | | $ | 77,268 | | | $ | 32,603 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.45 | % | | | 0.20 | % | | | 0.36 | % | | | 0.11 | % | | | 0.33 | % | | | 0.93 | % |
| Total expenses | | | 1.27 | % | | | 1.26 | % | | | 1.26 | % | | | 1.29 | % | | | 1.28 | % | | | 1.28 | % |
| Portfolio turnover rate | | | 115 | % | | | 137 | % | | | 116 | % | | | 53 | % | | | 68 | % | | | 143 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | | 2013a | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 29.51 | | | $ | 24.85 | | | $ | 22.88 | | | $ | 18.97 | | | $ | 10.73 | | | $ | 24.72 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | — | d | | | (.11 | ) | | | (.04 | ) | | | (.07 | ) | | | (.01 | ) | | | .08 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.29 | | | | 4.80 | | | | 2.01 | | | | 4.00 | | | | 8.40 | | | | (13.98 | ) |
| Total from investment operations | | | 3.29 | | | | 4.69 | | | | 1.97 | | | | 3.93 | | | | 8.39 | | | | (13.90 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Net asset value, end of period | | $ | 32.80 | | | $ | 29.51 | | | $ | 24.85 | | | $ | 22.88 | | | $ | 18.97 | | | $ | 10.73 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 11.15 | % | | | 18.93 | % | | | 8.57 | % | | | 20.75 | % | | | 78.35 | % | | | (56.26 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,553 | | | $ | 12,141 | | | $ | 11,112 | | | $ | 6,318 | | | $ | 11,746 | | | $ | 10,853 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | — | e | | | (0.43 | %) | | | (0.18 | %) | | | (0.37 | %) | | | (0.03 | %) | | | 0.45 | % |
| Total expenses | | | 1.78 | % | | | 1.75 | % | | | 1.75 | % | | | 1.79 | % | | | 1.78 | % | | | 1.79 | % |
| Portfolio turnover rate | | | 115 | % | | | 137 | % | | | 116 | % | | | 53 | % | | | 68 | % | | | 143 | % |
| 20 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| NOVA FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | | 2013a | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 30.23 | | | $ | 25.38 | | | $ | 23.32 | | | $ | 19.28 | | | $ | 10.88 | | | $ | 24.99 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .03 | | | | (.01 | ) | | | .01 | | | | (.02 | ) | | | .03 | | | | .13 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.39 | | | | 4.89 | | | | 2.05 | | | | 4.08 | | | | 8.52 | | | | (14.15 | ) |
| Total from investment operations | | | 3.42 | | | | 4.88 | | | | 2.06 | | | | 4.06 | | | | 8.55 | | | | (14.02 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Net asset value, end of period | | $ | 33.65 | | | $ | 30.23 | | | $ | 25.38 | | | $ | 23.32 | | | $ | 19.28 | | | $ | 10.88 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 11.31 | % | | | 19.28 | % | | | 8.79 | % | | | 21.09 | % | | | 78.74 | % | | | (56.13 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,137 | | | $ | 1,189 | | | $ | 1,472 | | | $ | 5,843 | | | $ | 1,876 | | | $ | 3,612 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.20 | % | | | (0.04 | %) | | | 0.06 | % | | | (0.11 | %) | | | 0.18 | % | | | 0.70 | % |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.51 | % | | | 1.54 | % | | | 1.54 | % | | | 1.54 | % |
| Portfolio turnover rate | | | 115 | % | | | 137 | % | | | 116 | % | | | 53 | % | | | 68 | % | | | 143 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 28.11 | | | $ | 23.77 | | | $ | 22.01 | | | $ | 18.33 | | | $ | 10.42 | | | $ | 24.14 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.08 | ) | | | (.19 | ) | | | (.13 | ) | | | (.16 | ) | | | (.09 | ) | | | (.01 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.14 | | | | 4.56 | | | | 1.89 | | | | 3.86 | | | | 8.15 | | | | (13.62 | ) |
| Total from investment operations | | | 3.06 | | | | 4.37 | | | | 1.76 | | | | 3.70 | | | | 8.06 | | | | (13.63 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | (.02 | ) | | | (.15 | ) | | | (.09 | ) |
| Net asset value, end of period | | $ | 31.17 | | | $ | 28.11 | | | $ | 23.77 | | | $ | 22.01 | | | $ | 18.33 | | | $ | 10.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 10.89 | % | | | 18.39 | % | | | 8.00 | % | | | 20.22 | % | | | 77.51 | % | | | (56.49 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 9,691 | | | $ | 8,705 | | | $ | 8,829 | | | $ | 10,461 | | | $ | 10,661 | | | $ | 9,314 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.55 | %) | | | (0.79 | %) | | | (0.62 | %) | | | (0.85 | %) | | | (0.61 | %) | | | (0.05 | %) |
| Total expenses | | | 2.27 | % | | | 2.25 | % | | | 2.26 | % | | | 2.29 | % | | | 2.28 | % | | | 2.29 | % |
| Portfolio turnover rate | | | 115 | % | | | 137 | % | | | 116 | % | | | 53 | % | | | 68 | % | | | 143 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| e | Net investment income is less than 0.01% per share. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 21 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
S&P 500® FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is the S&P 500® Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | | | |
| A-Class | | | May 31, 2006 | |
| C-Class | | | May 31, 2006 | |
| H-Class | | | May 31, 2006 | |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Apple, Inc. | | | 2.5 | % |
| Exxon Mobil Corp. | | | 2.2 | % |
| Microsoft Corp. | | | 1.5 | % |
| Google, Inc. — Class A | | | 1.4 | % |
| Johnson & Johnson | | | 1.4 | % |
| General Electric Co. | | | 1.4 | % |
| Chevron Corp. | | | 1.4 | % |
| Procter & Gamble Co. | | | 1.2 | % |
| Berkshire Hathaway, Inc. — Class B | | | 1.2 | % |
| Wells Fargo & Co. | | | 1.2 | % |
| Top Ten Total | | | 15.4 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 22 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| S&P 500® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 87.7% | | | | | | | | |
| | | | | | | | | |
| INFORMATION TECHNOLOGY - 15.7% | | | | | | | | |
| Apple, Inc. | | | 17,435 | | | $ | 8,312,136 | |
| Microsoft Corp. | | | 145,506 | | | | 4,846,804 | |
| Google, Inc. — Class A* | | | 5,366 | | | | 4,700,133 | |
| International Business Machines Corp. | | | 19,766 | | | | 3,660,268 | |
| Cisco Systems, Inc. | | | 102,926 | | | | 2,410,526 | |
| Oracle Corp. | | | 68,451 | | | | 2,270,520 | |
| QUALCOMM, Inc. | | | 32,933 | | | | 2,218,367 | |
| Intel Corp. | | | 95,629 | | | | 2,191,816 | |
| Visa, Inc. — Class A | | | 9,905 | | | | 1,892,846 | |
| Mastercard, Inc. — Class A | | | 1,991 | | | | 1,339,505 | |
| eBay, Inc.* | | | 22,362 | | | | 1,247,576 | |
| EMC Corp. | | | 39,943 | | | | 1,020,944 | |
| Accenture plc — Class A | | | 12,376 | | | | 911,368 | |
| Texas Instruments, Inc. | | | 21,140 | | | | 851,308 | |
| Hewlett-Packard Co. | | | 36,893 | | | | 774,015 | |
| Automatic Data Processing, Inc. | | | 9,276 | | | | 671,397 | |
| Yahoo!, Inc.* | | | 18,219 | | | | 604,142 | |
| Salesforce.com, Inc.* | | | 10,528 | | | | 546,508 | |
| Cognizant Technology Solutions | | | | | | | | |
| Corp. — Class A* | | | 5,780 | | | | 474,654 | |
| Adobe Systems, Inc.* | | | 8,960 | | | | 465,382 | |
| TE Connectivity Ltd. | | | 7,936 | | | | 410,926 | |
| Corning, Inc. | | | 28,037 | | | | 409,060 | |
| Applied Materials, Inc. | | | 23,089 | | | | 404,981 | |
| Dell, Inc. | | | 28,175 | | | | 387,970 | |
| Intuit, Inc. | | | 5,696 | | | | 377,702 | |
| Micron Technology, Inc.* | | | 19,934 | | | | 348,247 | |
| Symantec Corp. | | | 13,413 | | | | 331,972 | |
| Analog Devices, Inc. | | | 5,966 | | | | 280,700 | |
| NetApp, Inc. | | | 6,533 | | | | 278,436 | |
| Broadcom Corp. — Class A | | | 10,558 | | | | 274,614 | |
| SanDisk Corp. | | | 4,612 | | | | 274,460 | |
| Motorola Solutions, Inc. | | | 4,547 | | | | 270,001 | |
| Seagate Technology plc | | | 5,957 | | | | 260,559 | |
| Fidelity National Information | | | | | | | | |
| Services, Inc. | | | 5,610 | | | | 260,528 | |
| Western Digital Corp. | | | 4,051 | | | | 256,833 | |
| Citrix Systems, Inc.* | | | 3,598 | | | | 254,055 | |
| Paychex, Inc. | | | 6,244 | | | | 253,756 | |
| Fiserv, Inc.* | | | 2,500 | | | | 252,625 | |
| Xilinx, Inc. | | | 5,111 | | | | 239,501 | |
| Amphenol Corp. — Class A | | | 3,053 | | | | 236,241 | |
| Xerox Corp. | | | 22,242 | | | | 228,870 | |
| Altera Corp. | | | 6,136 | | | | 228,014 | |
| Western Union Co. | | | 10,592 | | | | 197,647 | |
| KLA-Tencor Corp. | | | 3,179 | | | | 193,442 | |
| Juniper Networks, Inc.* | | | 9,732 | | | | 193,278 | |
| CA, Inc. | | | 6,301 | | | | 186,951 | |
| Linear Technology Corp. | | | 4,472 | | | | 177,360 | |
| Akamai Technologies, Inc.* | | | 3,415 | | | | 176,556 | |
| Autodesk, Inc.* | | | 4,274 | | | | 175,961 | |
| Teradata Corp.* | | | 3,130 | | | | 173,527 | |
| NVIDIA Corp. | | | 11,102 | | | | 172,747 | |
| Red Hat, Inc.* | | | 3,636 | | | | 167,765 | |
| Lam Research Corp.* | | | 3,125 | | | | 159,969 | |
| Microchip Technology, Inc. | | | 3,792 | | | | 152,780 | |
| Electronic Arts, Inc.* | | | 5,893 | | | | 150,566 | |
| Computer Sciences Corp. | | | 2,833 | | | | 146,579 | |
| VeriSign, Inc.* | | | 2,598 | | | | 132,212 | |
| F5 Networks, Inc.* | | | 1,511 | | | | 129,583 | |
| Harris Corp. | | | 2,055 | | | | 121,862 | |
| Molex, Inc. | | | 2,632 | | | | 101,385 | |
| Total System Services, Inc. | | | 3,200 | | | | 94,144 | |
| FLIR Systems, Inc. | | | 2,732 | | | | 85,785 | |
| LSI Corp. | | | 10,505 | | | | 82,149 | |
| Jabil Circuit, Inc. | | | 3,538 | | | | 76,704 | |
| JDS Uniphase Corp.* | | | 4,559 | | | | 67,063 | |
| Teradyne, Inc.* | | | 3,680 | | | | 60,794 | |
| First Solar, Inc.* | | | 1,333 | | | | 53,600 | |
| Total Information Technology | | | | | | | 51,360,675 | |
| FINANCIALS - 14.3% | | | | | | |
| Berkshire Hathaway, Inc. — Class B* | | | 34,548 | | | | 3,921,542 | |
| Wells Fargo & Co. | | | 92,751 | | | | 3,832,471 | |
| JPMorgan Chase & Co. | | | 72,262 | | | | 3,735,224 | |
| Bank of America Corp. | | | 206,224 | | | | 2,845,892 | |
| Citigroup, Inc. | | | 58,367 | | | | 2,831,383 | |
| American International Group, Inc. | | | 28,345 | | | | 1,378,418 | |
| American Express Co. | | | 17,803 | | | | 1,344,482 | |
| U.S. Bancorp | | | 35,307 | | | | 1,291,530 | |
| Goldman Sachs Group, Inc. | | | 8,019 | | | | 1,268,686 | |
| MetLife, Inc. | | | 21,494 | | | | 1,009,143 | |
| Simon Property Group, Inc. | | | 5,956 | | | | 882,858 | |
| Capital One Financial Corp. | | | 11,240 | | | | 772,638 | |
| PNC Financial Services Group, Inc. | | | 10,199 | | | | 738,918 | |
| Morgan Stanley | | | 26,691 | | | | 719,322 | |
| Prudential Financial, Inc. | | | 8,928 | | | | 696,205 | |
| Bank of New York Mellon Corp. | | | 22,089 | | | | 666,867 | |
| BlackRock, Inc. — Class A | | | 2,426 | | | | 656,524 | |
| ACE Ltd. | | | 6,530 | | | | 610,947 | |
| Travelers Companies, Inc. | | | 7,162 | | | | 607,123 | |
| State Street Corp. | | | 8,566 | | | | 563,215 | |
| American Tower Corp. — Class A | | | 7,584 | | | | 562,202 | |
| Aflac, Inc. | | | 8,920 | | | | 552,951 | |
| Discover Financial Services | | | 9,285 | | | | 469,264 | |
| Charles Schwab Corp. | | | 22,184 | | | | 468,970 | |
| Marsh & McLennan Companies, Inc. | | | 10,544 | | | | 459,191 | |
| BB&T Corp. | | | 13,509 | | | | 455,929 | |
| Allstate Corp. | | | 8,897 | | | | 449,743 | |
| Public Storage | | | 2,780 | | | | 446,329 | |
| CME Group, Inc. — Class A | | | 6,036 | | | | 445,940 | |
| Aon plc | | | 5,898 | | | | 439,047 | |
| Chubb Corp. | | | 4,906 | | | | 437,910 | |
| Franklin Resources, Inc. | | | 7,805 | | | | 394,543 | |
| Prologis, Inc. | | | 9,570 | | | | 360,023 | |
| T. Rowe Price Group, Inc. | | | 4,995 | | | | 359,290 | |
| HCP, Inc. | | | 8,745 | | | | 358,108 | |
| McGraw Hill Financial, Inc. | | | 5,290 | | | | 346,971 | |
| Ventas, Inc. | | | 5,634 | | | | 346,491 | |
| Ameriprise Financial, Inc. | | | 3,799 | | | | 346,013 | |
| Equity Residential | | | 6,432 | | | | 344,562 | |
| Health Care REIT, Inc. | | | 5,503 | | | | 343,277 | |
| SunTrust Banks, Inc. | | | 10,344 | | | | 335,352 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 23 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| S&P 500® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Weyerhaeuser Co. | | | 11,217 | | | $ | 321,143 | |
| Boston Properties, Inc. | | | 2,924 | | | | 312,576 | |
| Fifth Third Bancorp | | | 17,034 | | | | 307,293 | |
| AvalonBay Communities, Inc. | | | 2,331 | | | | 296,247 | |
| Progressive Corp. | | | 10,616 | | | | 289,074 | |
| Vornado Realty Trust | | | 3,331 | | | | 280,004 | |
| M&T Bank Corp. | | | 2,495 | | | | 279,240 | |
| Loews Corp. | | | 5,868 | | | | 274,270 | |
| Hartford Financial Services Group, Inc. | | | 8,738 | | | | 271,927 | |
| Invesco Ltd. | | | 8,503 | | | | 271,246 | |
| Moody’s Corp. | | | 3,721 | | | | 261,698 | |
| Host Hotels & Resorts, Inc. | | | 14,399 | | | | 254,430 | |
| IntercontinentalExchange, Inc.* | | | 1,402 | | | | 254,351 | |
| Regions Financial Corp. | | | 26,792 | | | | 248,094 | |
| Northern Trust Corp. | | | 4,336 | | | | 235,835 | |
| Principal Financial Group, Inc. | | | 5,261 | | | | 225,276 | |
| Lincoln National Corp. | | | 5,076 | | | | 213,141 | |
| SLM Corp. | | | 8,380 | | | | 208,662 | |
| KeyCorp | | | 17,492 | | | | 199,409 | |
| NYSE Euronext | | | 4,665 | | | | 195,837 | |
| XL Group plc — Class A | | | 5,501 | | | | 169,541 | |
| Leucadia National Corp. | | | 6,010 | | | | 163,712 | |
| Kimco Realty Corp. | | | 7,855 | | | | 158,514 | |
| Unum Group | | | 5,058 | | | | 153,966 | |
| Macerich Co. | | | 2,701 | | | | 152,444 | |
| Plum Creek Timber Company, Inc. | | | 3,134 | | | | 146,765 | |
| Comerica, Inc. | | | 3,550 | | | | 139,551 | |
| Cincinnati Financial Corp. | | | 2,825 | | | | 133,227 | |
| Huntington Bancshares, Inc. | | | 15,934 | | | | 131,615 | |
| Torchmark Corp. | | | 1,757 | | | | 127,119 | |
| CBRE Group, Inc. — Class A* | | | 5,322 | | | | 123,098 | |
| Genworth Financial, Inc. — Class A* | | | 9,479 | | | | 121,236 | |
| Zions Bancorporation | | | 3,539 | | | | 97,039 | |
| E*TRADE Financial Corp.* | | | 5,504 | | | | 90,816 | |
| People’s United Financial, Inc. | | | 6,165 | | | | 88,653 | |
| Hudson City Bancorp, Inc. | | | 9,122 | | | | 82,554 | |
| Apartment Investment & | | | | | | | | |
| Management Co. — Class A | | | 2,809 | | | | 78,483 | |
| Assurant, Inc. | | | 1,444 | | | | 78,120 | |
| NASDAQ OMX Group, Inc. | | | 2,216 | | | | 71,111 | |
| Legg Mason, Inc. | | | 2,078 | | | | 69,488 | |
| Total Financials | | | | | | | 46,672,299 | |
| HEALTH CARE - 11.4% | | | | | | | | |
| Johnson & Johnson | | | 54,091 | | | | 4,689,148 | |
| Pfizer, Inc. | | | 127,088 | | | | 3,648,696 | |
| Merck & Company, Inc. | | | 56,175 | | | | 2,674,492 | |
| Gilead Sciences, Inc.* | | | 29,382 | | | | 1,846,365 | |
| Amgen, Inc. | | | 14,466 | | | | 1,619,324 | |
| Bristol-Myers Squibb Co. | | | 31,602 | | | | 1,462,541 | |
| UnitedHealth Group, Inc. | | | 19,516 | | | | 1,397,540 | |
| AbbVie, Inc. | | | 30,434 | | | | 1,361,313 | |
| Celgene Corp.* | | | 7,890 | | | | 1,214,508 | |
| Biogen Idec, Inc.* | | | 4,570 | | | | 1,100,273 | |
| Medtronic, Inc. | | | 19,150 | | | | 1,019,739 | |
| Abbott Laboratories | | | 29,837 | | | | 990,290 | |
| Express Scripts Holding Co.* | | | 15,623 | | | | 965,189 | |
| Eli Lilly & Co. | | | 19,022 | | | | 957,377 | |
| Baxter International, Inc. | | | 10,421 | | | | 684,555 | |
| Thermo Fisher Scientific, Inc. | | | 6,914 | | | | 637,126 | |
| McKesson Corp. | | | 4,397 | | | | 564,135 | |
| Covidien plc | | | 8,828 | | | | 537,978 | |
| Allergan, Inc. | | | 5,705 | | | | 516,017 | |
| WellPoint, Inc. | | | 5,737 | | | | 479,671 | |
| Actavis, Inc.* | | | 3,321 | | | | 478,224 | |
| Regeneron Pharmaceuticals, Inc.* | | | 1,505 | | | | 470,869 | |
| Aetna, Inc. | | | 7,135 | | | | 456,783 | |
| Alexion Pharmaceuticals, Inc.* | | | 3,748 | | | | 435,368 | |
| Cigna Corp. | | | 5,434 | | | | 417,657 | |
| Stryker Corp. | | | 5,655 | | | | 382,221 | |
| Becton Dickinson and Co. | | | 3,726 | | | | 372,675 | |
| Cardinal Health, Inc. | | | 6,520 | | | | 340,018 | |
| Vertex Pharmaceuticals, Inc.* | | | 4,470 | | | | 338,915 | |
| Agilent Technologies, Inc. | | | 6,356 | | | | 325,745 | |
| Boston Scientific Corp.* | | | 25,779 | | | | 302,645 | |
| Zoetis, Inc. | | | 9,588 | | | | 298,379 | |
| Cerner Corp.* | | | 5,664 | | | | 297,643 | |
| St. Jude Medical, Inc. | | | 5,511 | | | | 295,610 | |
| Intuitive Surgical, Inc.* | | | 767 | | | | 288,599 | |
| Mylan, Inc.* | | | 7,339 | | | | 280,130 | |
| Humana, Inc. | | | 2,999 | | | | 279,897 | |
| AmerisourceBergen Corp. — Class A | | | 4,433 | | | | 270,856 | |
| Zimmer Holdings, Inc. | | | 3,256 | | | | 267,448 | |
| Life Technologies Corp.* | | | 3,309 | | | | 247,612 | |
| Perrigo Co. | | | 1,812 | | | | 223,565 | |
| Forest Laboratories, Inc.* | | | 4,540 | | | | 194,267 | |
| DaVita HealthCare Partners, Inc.* | | | 3,382 | | | | 192,436 | |
| Quest Diagnostics, Inc. | | | 2,917 | | | | 180,241 | |
| CR Bard, Inc. | | | 1,521 | | | | 175,219 | |
| Waters Corp.* | | | 1,640 | | | | 174,184 | |
| Laboratory Corporation of | | | | | | | | |
| America Holdings* | | | 1,727 | | | | 171,215 | |
| Varian Medical Systems, Inc.* | | | 2,070 | | | | 154,691 | |
| CareFusion Corp.* | | | 4,111 | | | | 151,696 | |
| Edwards Lifesciences Corp.* | | | 2,152 | | | | 149,844 | |
| Hospira, Inc.* | | | 3,188 | | | | 125,033 | |
| DENTSPLY International, Inc. | | | 2,734 | | | | 118,683 | |
| PerkinElmer, Inc. | | | 2,147 | | | | 81,049 | |
| Tenet Healthcare Corp.* | | | 1,948 | | | | 80,238 | |
| Patterson Companies, Inc. | | | 1,599 | | | | 64,280 | |
| Total Health Care | | | | | | | 37,450,212 | |
| CONSUMER DISCRETIONARY - 10.9% | | | | | | | | |
| Comcast Corp. — Class A | | | 50,208 | | | | 2,266,890 | |
| Amazon.com, Inc.* | | | 7,101 | | | | 2,220,056 | |
| Home Depot, Inc. | | | 27,496 | | | | 2,085,572 | |
| Walt Disney Co. | | | 31,889 | | | | 2,056,522 | |
| McDonald’s Corp. | | | 19,194 | | | | 1,846,656 | |
| Twenty-First Century Fox, Inc. | | | 38,134 | | | | 1,277,489 | |
| Ford Motor Co. | | | 75,622 | | | | 1,275,743 | |
| Time Warner, Inc. | | | 17,656 | | | | 1,161,941 | |
| Starbucks Corp. | | | 14,426 | | | | 1,110,369 | |
| NIKE, Inc. — Class B | | | 14,360 | | | | 1,043,110 | |
| Priceline.com, Inc.* | | | 983 | | | | 993,764 | |
| Lowe’s Companies, Inc. | | | 20,190 | | | | 961,246 | |
| Target Corp. | | | 12,121 | | | | 775,501 | |
| 24 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| S&P 500® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| TJX Companies, Inc. | | | 13,728 | | | $ | 774,121 | |
| Viacom, Inc. — Class B | | | 8,336 | | | | 696,723 | |
| General Motors Co.* | | | 18,069 | | | | 649,942 | |
| Time Warner Cable, Inc. | | | 5,493 | | | | 613,019 | |
| Yum! Brands, Inc. | | | 8,562 | | | | 611,241 | |
| CBS Corp. — Class B | | | 10,794 | | | | 595,397 | |
| DIRECTV* | | | 9,802 | | | | 585,670 | |
| Johnson Controls, Inc. | | | 13,135 | | | | 545,103 | |
| Discovery Communications, | | | | | | | | |
| Inc. — Class A* | | | 4,431 | | | | 374,065 | |
| Netflix, Inc.* | | | 1,130 | | | | 349,407 | |
| VF Corp. | | | 1,685 | | | | 335,400 | |
| Bed Bath & Beyond, Inc.* | | | 4,179 | | | | 323,287 | |
| Dollar General Corp.* | | | 5,712 | | | | 322,500 | |
| Delphi Automotive plc | | | 5,423 | | | | 316,812 | |
| Omnicom Group, Inc. | | | 4,939 | | | | 313,330 | |
| Macy’s, Inc. | | | 7,218 | | | | 312,322 | |
| Ross Stores, Inc. | | | 4,157 | | | | 302,629 | |
| Coach, Inc. | | | 5,412 | | | | 295,116 | |
| AutoZone, Inc.* | | | 683 | | | | 288,725 | |
| L Brands, Inc. | | | 4,675 | | | | 285,643 | |
| Mattel, Inc. | | | 6,612 | | | | 276,779 | |
| Harley-Davidson, Inc. | | | 4,275 | | | | 274,626 | |
| Carnival Corp. | | | 8,402 | | | | 274,241 | |
| O’Reilly Automotive, Inc.* | | | 2,078 | | | | 265,132 | |
| Chipotle Mexican Grill, Inc. — Class A* | | | 594 | | | | 254,648 | |
| Starwood Hotels & Resorts | | | | | | | | |
| Worldwide, Inc. | | | 3,739 | | | | 248,457 | |
| Wynn Resorts Ltd. | | | 1,551 | | | | 245,073 | |
| Dollar Tree, Inc.* | | | 4,274 | | | | 244,302 | |
| Genuine Parts Co. | | | 2,974 | | | | 240,567 | |
| Whirlpool Corp. | | | 1,530 | | | | 224,053 | |
| BorgWarner, Inc. | | | 2,196 | | | | 222,652 | |
| The Gap, Inc. | | | 5,303 | | | | 213,605 | |
| CarMax, Inc.* | | | 4,285 | | | | 207,694 | |
| Kohl’s Corp. | | | 3,918 | | | | 202,757 | |
| Best Buy Company, Inc. | | | 5,181 | | | | 194,288 | |
| Ralph Lauren Corp. — Class A | | | 1,165 | | | | 191,910 | |
| Staples, Inc. | | | 12,680 | | | | 185,762 | |
| PVH Corp. | | | 1,561 | | | | 185,275 | |
| Marriott International, Inc. — Class A | | | 4,371 | | | | 183,844 | |
| Scripps Networks Interactive, | | | | | | | | |
| Inc. — Class A | | | 2,101 | | | | 164,109 | |
| TripAdvisor, Inc.* | | | 2,140 | | | | 162,298 | |
| Tiffany & Co. | | | 2,107 | | | | 161,438 | |
| Wyndham Worldwide Corp. | | | 2,557 | | | | 155,900 | |
| Nordstrom, Inc. | | | 2,773 | | | | 155,843 | |
| News Corp. — Class A* | | | 9,560 | | | | 153,534 | |
| PetSmart, Inc. | | | 1,995 | | | | 152,139 | |
| Newell Rubbermaid, Inc. | | | 5,523 | | | | 151,883 | |
| H&R Block, Inc. | | | 5,257 | | | | 140,152 | |
| Interpublic Group of Companies, Inc. | | | 8,099 | | | | 139,141 | |
| Family Dollar Stores, Inc. | | | 1,856 | | | | 133,669 | |
| Gannett Company, Inc. | | | 4,401 | | | | 117,903 | |
| Darden Restaurants, Inc. | | | 2,498 | | | | 115,632 | |
| Lennar Corp. — Class A | | | 3,185 | | | | 112,748 | |
| Fossil Group, Inc.* | | | 968 | | | | 112,520 | |
| GameStop Corp. — Class A | | | 2,245 | | | | 111,464 | |
| PulteGroup, Inc. | | | 6,707 | | | | 110,666 | |
| Garmin Ltd. | | | 2,367 | | | | 106,965 | |
| Expedia, Inc. | | | 2,064 | | | | 106,895 | |
| DR Horton, Inc. | | | 5,455 | | | | 105,991 | |
| Goodyear Tire & Rubber Co.* | | | 4,721 | | | | 105,986 | |
| Hasbro, Inc.1 | | | 2,216 | | | | 104,462 | |
| International Game Technology | | | 5,015 | | | | 94,934 | |
| Harman International Industries, Inc. | | | 1,306 | | | | 86,496 | |
| Leggett & Platt, Inc. | | | 2,729 | | | | 82,279 | |
| Urban Outfitters, Inc.* | | | 2,088 | | | | 76,776 | |
| Cablevision Systems Corp. — Class A | | | 4,101 | | | | 69,061 | |
| AutoNation, Inc.* | | | 1,236 | | | | 64,482 | |
| Washington Post Co. — Class B | | | 88 | | | | 53,799 | |
| Abercrombie & Fitch Co. — Class A | | | 1,472 | | | | 52,065 | |
| JC Penney Company, Inc.* | | | 5,840 | | | | 51,509 | |
| Total Consumer Discretionary | | | | | | | 35,813,715 | |
| INDUSTRIALS - 9.4% | | | | | | | | |
| General Electric Co. | | | 195,484 | | | | 4,670,112 | |
| United Technologies Corp. | | | 16,203 | | | | 1,747,006 | |
| Boeing Co. | | | 13,327 | | | | 1,565,922 | |
| 3M Co. | | | 12,465 | | | | 1,488,446 | |
| Union Pacific Corp. | | | 8,905 | | | | 1,383,303 | |
| United Parcel Service, Inc. — Class B | | | 13,871 | | | | 1,267,393 | |
| Honeywell International, Inc. | | | 15,064 | | | | 1,250,915 | |
| Caterpillar, Inc. | | | 12,213 | | | | 1,018,197 | |
| Emerson Electric Co. | | | 13,714 | | | | 887,295 | |
| Danaher Corp. | | | 11,485 | | | | 796,140 | |
| Lockheed Martin Corp. | | | 5,171 | | | | 659,561 | |
| FedEx Corp. | | | 5,698 | | | | 650,199 | |
| Precision Castparts Corp. | | | 2,790 | | | | 634,000 | |
| Eaton Corporation plc | | | 9,090 | | | | 625,756 | |
| Illinois Tool Works, Inc. | | | 7,906 | | | | 602,991 | |
| Deere & Co. | | | 7,350 | | | | 598,217 | |
| General Dynamics Corp. | | | 6,383 | | | | 558,640 | |
| CSX Corp. | | | 19,559 | | | | 503,449 | |
| Raytheon Co. | | | 6,189 | | | | 476,986 | |
| Norfolk Southern Corp. | | | 5,988 | | | | 463,172 | |
| Cummins, Inc. | | | 3,343 | | | | 444,184 | |
| Northrop Grumman Corp. | | | 4,417 | | | | 420,763 | |
| Delta Air Lines, Inc. | | | 16,463 | | | | 388,362 | |
| PACCAR, Inc. | | | 6,798 | | | | 378,377 | |
| Waste Management, Inc. | | | 8,376 | | | | 345,426 | |
| Ingersoll-Rand plc | | | 5,190 | | | | 337,039 | |
| WW Grainger, Inc. | | | 1,198 | | | | 313,528 | |
| Parker Hannifin Corp. | | | 2,863 | | | | 311,265 | |
| Tyco International Ltd. | | | 8,874 | | | | 310,413 | |
| Dover Corp. | | | 3,274 | | | | 294,103 | |
| Rockwell Automation, Inc. | | | 2,662 | | | | 284,674 | |
| Stanley Black & Decker, Inc. | | | 3,071 | | | | 278,140 | |
| Fastenal Co. | | | 5,246 | | | | 263,612 | |
| Roper Industries, Inc. | | | 1,903 | | | | 252,852 | |
| Pentair Ltd. | | | 3,825 | | | | 248,396 | |
| Kansas City Southern | | | 2,118 | | | | 231,624 | |
| Fluor Corp. | | | 3,127 | | | | 221,891 | |
| AMETEK, Inc. | | | 4,690 | | | | 215,834 | |
| Southwest Airlines Co. | | | 13,557 | | | | 197,390 | |
| Stericycle, Inc.* | | | 1,643 | | | | 189,602 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 25 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| S&P 500® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| CH Robinson Worldwide, Inc. | | | 3,058 | | | $ | 182,134 | |
| Rockwell Collins, Inc. | | | 2,588 | | | | 175,622 | |
| Expeditors International of Washington, Inc. | | | 3,964 | | | | 174,654 | |
| Republic Services, Inc. — Class A | | | 5,207 | | | | 173,706 | |
| Flowserve Corp. | | | 2,701 | | | | 168,515 | |
| Pall Corp. | | | 2,146 | | | | 165,328 | |
| L-3 Communications Holdings, Inc. | | | 1,717 | | | | 162,257 | |
| ADT Corp. | | | 3,842 | | | | 156,216 | |
| Nielsen Holdings N.V. | | | 4,122 | | | | 150,247 | |
| Textron, Inc. | | | 5,383 | | | | 148,625 | |
| Jacobs Engineering Group, Inc.* | | | 2,527 | | | | 147,021 | |
| Masco Corp. | | | 6,854 | | | | 145,853 | |
| Equifax, Inc. | | | 2,324 | | | | 139,091 | |
| Quanta Services, Inc.* | | | 4,101 | | | | 112,819 | |
| Snap-on, Inc. | | | 1,117 | | | | 111,142 | |
| Joy Global, Inc. | | | 2,039 | | | | 104,071 | |
| Robert Half International, Inc. | | | 2,665 | | | | 104,015 | |
| Cintas Corp. | | | 1,971 | | | | 100,916 | |
| Xylem, Inc. | | | 3,557 | | | | 99,347 | |
| Iron Mountain, Inc. | | | 3,269 | | | | 88,328 | |
| Dun & Bradstreet Corp. | | | 748 | | | | 77,680 | |
| Pitney Bowes, Inc. | | | 3,872 | | | | 70,432 | |
| Ryder System, Inc. | | | 1,007 | | | | 60,118 | |
| Total Industrials | | | | | | | 30,793,312 | |
| ENERGY - 9.2% | | | | | | | | |
| Exxon Mobil Corp. | | | 84,490 | | | | 7,269,519 | |
| Chevron Corp. | | | 37,078 | | | | 4,504,976 | |
| Schlumberger Ltd. | | | 25,394 | | | | 2,243,814 | |
| ConocoPhillips | | | 23,481 | | | | 1,632,164 | |
| Occidental Petroleum Corp. | | | 15,468 | | | | 1,446,877 | |
| Anadarko Petroleum Corp. | | | 9,655 | | | | 897,818 | |
| EOG Resources, Inc. | | | 5,229 | | | | 885,165 | |
| Halliburton Co. | | | 16,233 | | | | 781,619 | |
| Phillips 66 | | | 11,728 | | | | 678,113 | |
| Apache Corp. | | | 7,749 | | | | 659,750 | |
| National Oilwell Varco, Inc. | | | 8,209 | | | | 641,205 | |
| Pioneer Natural Resources Co. | | | 2,654 | | | | 501,075 | |
| Williams Companies, Inc. | | | 13,116 | | | | 476,897 | |
| Marathon Oil Corp. | | | 13,627 | | | | 475,310 | |
| Noble Energy, Inc. | | | 6,900 | | | | 462,369 | |
| Kinder Morgan, Inc. | | | 12,922 | | | | 459,636 | |
| Spectra Energy Corp. | | | 12,852 | | | | 439,924 | |
| Hess Corp. | | | 5,537 | | | | 428,232 | |
| Devon Energy Corp. | | | 7,321 | | | | 422,861 | |
| Baker Hughes, Inc. | | | 8,511 | | | | 417,890 | |
| Marathon Petroleum Corp. | | | 6,010 | | | | 386,563 | |
| Valero Energy Corp. | | | 10,406 | | | | 355,365 | |
| Cabot Oil & Gas Corp. | | | 8,070 | | | | 301,172 | |
| Cameron International Corp.* | | | 4,727 | | | | 275,915 | |
| Equities Corp. | | | 2,896 | | | | 256,933 | |
| Chesapeake Energy Corp. | | | 9,723 | | | | 251,631 | |
| FMC Technologies, Inc.* | | | 4,540 | | | | 251,607 | |
| Southwestern Energy Co.* | | | 6,749 | | | | 245,529 | |
| Ensco plc — Class A | | | 4,481 | | | | 240,854 | |
| Range Resources Corp. | | | 3,139 | | | | 238,219 | |
| Murphy Oil Corp. | | | 3,374 | | | | 203,520 | |
| Noble Corp. | | | 4,864 | | | | 183,713 | |
| CONSOL Energy, Inc. | | | 4,395 | | | | 147,892 | |
| Helmerich & Payne, Inc. | | | 2,038 | | | | 140,520 | |
| Denbury Resources, Inc.* | | | 7,160 | | | | 131,816 | |
| Tesoro Corp. | | | 2,600 | | | | 114,348 | |
| QEP Resources, Inc. | | | 3,443 | | | | 95,337 | |
| Peabody Energy Corp. | | | 5,179 | | | | 89,338 | |
| Rowan Companies plc — Class A* | | | 2,389 | | | | 87,724 | |
| Diamond Offshore Drilling, Inc. | | | 1,339 | | | | 83,446 | |
| Nabors Industries Ltd. | | | 4,979 | | | | 79,963 | |
| WPX Energy, Inc.* | | | 3,852 | | | | 74,190 | |
| Newfield Exploration Co.* | | | 2,606 | | | | 71,326 | |
| Total Energy | | | | | | | 30,032,135 | |
| CONSUMER STAPLES - 8.8% | | | | | | | | |
| Procter & Gamble Co. | | | 52,574 | | | | 3,974,068 | |
| Coca-Cola Co. | | | 73,182 | | | | 2,772,135 | |
| Philip Morris International, Inc. | | | 31,069 | | | | 2,690,265 | |
| PepsiCo, Inc. | | | 29,608 | | | | 2,353,836 | |
| Wal-Mart Stores, Inc. | | | 31,243 | | | | 2,310,732 | |
| CVS Caremark Corp. | | | 23,582 | | | | 1,338,279 | |
| Altria Group, Inc. | | | 38,480 | | | | 1,321,788 | |
| Mondelez International, Inc. — Class A | | | 34,181 | | | | 1,073,967 | |
| Colgate-Palmolive Co. | | | 16,928 | | | | 1,003,830 | |
| Costco Wholesale Corp. | | | 8,384 | | | | 965,166 | |
| Walgreen Co. | | | 16,695 | | | | 898,191 | |
| Kimberly-Clark Corp. | | | 7,354 | | | | 692,894 | |
| Kraft Foods Group, Inc. | | | 11,431 | | | | 599,442 | |
| General Mills, Inc. | | | 12,325 | | | | 590,614 | |
| Archer-Daniels-Midland Co. | | | 12,658 | | | | 466,321 | |
| Whole Foods Market, Inc. | | | 7,145 | | | | 417,982 | |
| Kroger Co. | | | 9,946 | | | | 401,222 | |
| Sysco Corp. | | | 11,293 | | | | 359,456 | |
| Estee Lauder Companies, Inc. — Class A | | | 4,914 | | | | 343,489 | |
| Lorillard, Inc. | | | 7,171 | | | | 321,117 | |
| Reynolds American, Inc. | | | 6,071 | | | | 296,143 | |
| Kellogg Co. | | | 4,933 | | | | 289,715 | |
| Mead Johnson Nutrition Co. — Class A | | | 3,878 | | | | 287,980 | |
| Hershey Co. | | | 2,870 | | | | 265,475 | |
| ConAgra Foods, Inc. | | | 8,102 | | | | 245,815 | |
| Brown-Forman Corp. — Class B | | | 3,113 | | | | 212,088 | |
| JM Smucker Co. | | | 2,019 | | | | 212,076 | |
| Clorox Co. | | | 2,507 | | | | 204,872 | |
| Beam, Inc. | | | 3,101 | | | | 200,480 | |
| Coca-Cola Enterprises, Inc. | | | 4,768 | | | | 191,721 | |
| Constellation Brands, Inc. — Class A* | | | 3,187 | | | | 182,934 | |
| Dr Pepper Snapple Group, Inc. | | | 3,904 | | | | 174,977 | |
| Avon Products, Inc. | | | 8,322 | | | | 171,433 | |
| McCormick & Company, Inc. | | | 2,532 | | | | 163,820 | |
| Molson Coors Brewing Co. — Class B | | | 3,029 | | | | 151,844 | |
| Tyson Foods, Inc. — Class A | | | 5,342 | | | | 151,072 | |
| Safeway, Inc. | | | 4,630 | | | | 148,114 | |
| Campbell Soup Co. | | | 3,423 | | | | 139,350 | |
| Monster Beverage Corp.* | | | 2,600 | | | | 135,850 | |
| Hormel Foods Corp. | | | 2,580 | | | | 108,670 | |
| Total Consumer Staples | | | | | | | 28,829,223 | |
| 26 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| S&P 500® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| MATERIALS - 3.1% | | | | | | | | |
| Monsanto Co. | | | 10,233 | | | $ | 1,068,018 | |
| EI du Pont de Nemours & Co. | | | 17,729 | | | | 1,038,211 | |
| Dow Chemical Co. | | | 23,232 | | | | 892,109 | |
| Praxair, Inc. | | | 5,655 | | | | 679,788 | |
| Freeport-McMoRan Copper & Gold, Inc. | | | 19,929 | | | | 659,251 | |
| LyondellBasell Industries N.V. — Class A | | | 8,602 | | | | 629,924 | |
| Ecolab, Inc. | | | 5,207 | | | | 514,243 | |
| PPG Industries, Inc. | | | 2,739 | | | | 457,577 | |
| Air Products & Chemicals, Inc. | | | 4,023 | | | | 428,731 | |
| International Paper Co. | | | 8,555 | | | | 383,264 | |
| Sherwin-Williams Co. | | | 1,676 | | | | 305,334 | |
| Nucor Corp. | | | 6,108 | | | | 299,414 | |
| Mosaic Co. | | | 6,536 | | | | 281,179 | |
| Newmont Mining Corp. | | | 9,550 | | | | 268,355 | |
| CF Industries Holdings, Inc. | | | 1,099 | | | | 231,702 | |
| Eastman Chemical Co. | | | 2,964 | | | | 230,896 | |
| Sigma-Aldrich Corp. | | | 2,302 | | | | 196,361 | |
| FMC Corp. | | | 2,617 | | | | 187,691 | |
| Alcoa, Inc. | | | 20,543 | | | | 166,809 | |
| Airgas, Inc. | | | 1,267 | | | | 134,365 | |
| MeadWestvaco Corp. | | | 3,406 | | | | 130,722 | |
| Vulcan Materials Co. | | | 2,498 | | | | 129,421 | |
| International Flavors & Fragrances, Inc. | | | 1,567 | | | | 128,964 | |
| Ball Corp. | | | 2,781 | | | | 124,811 | |
| Sealed Air Corp. | | | 3,757 | | | | 102,153 | |
| Owens-Illinois, Inc.* | | | 3,154 | | | | 94,683 | |
| Avery Dennison Corp. | | | 1,888 | | | | 82,166 | |
| Bemis Company, Inc. | | | 1,975 | | | | 77,045 | |
| Allegheny Technologies, Inc. | | | 2,069 | | | | 63,146 | |
| Cliffs Natural Resources, Inc. | | | 2,941 | | | | 60,291 | |
| United States Steel Corp. | | | 2,783 | | | | 57,302 | |
| Total Materials | | | | | | | 10,103,926 | |
| UTILITIES - 2.8% | | | | | | | | |
| Duke Energy Corp. | | | 13,555 | | | | 905,204 | |
| Dominion Resources, Inc. | | | 11,118 | | | | 694,654 | |
| Southern Co. | | | 16,777 | | | | 690,877 | |
| NextEra Energy, Inc. | | | 8,146 | | | | 652,983 | |
| Exelon Corp. | | | 16,444 | | | | 487,400 | |
| American Electric Power Company, Inc. | | | 9,347 | | | | 405,192 | |
| Sempra Energy | | | 4,360 | | | | 373,217 | |
| PPL Corp. | | | 12,132 | | | | 368,570 | |
| PG&E Corp. | | | 8,546 | | | | 349,702 | |
| Public Service Enterprise Group, Inc. | | | 9,710 | | | | 319,750 | |
| Consolidated Edison, Inc. | | | 5,623 | | | | 310,052 | |
| FirstEnergy Corp. | | | 8,023 | | | | 292,438 | |
| Edison International | | | 6,253 | | | | 288,013 | |
| Xcel Energy, Inc. | | | 9,548 | | | | 263,620 | |
| Northeast Utilities | | | 6,038 | | | | 249,068 | |
| DTE Energy Co. | | | 3,360 | | | | 221,693 | |
| Entergy Corp. | | | 3,426 | | | | 216,489 | |
| ONEOK, Inc. | | | 3,962 | | | | 211,254 | |
| CenterPoint Energy, Inc. | | | 8,228 | | | | 197,225 | |
| NiSource, Inc. | | | 6,006 | | | | 185,525 | |
| Wisconsin Energy Corp. | | | 4,377 | | | | 176,743 | |
| NRG Energy, Inc. | | | 6,198 | | | | 169,392 | |
| Ameren Corp. | | | 4,667 | | | | 162,598 | |
| AES Corp. | | | 11,808 | | | | 156,928 | |
| CMS Energy Corp. | | | 5,103 | | | | 134,311 | |
| SCANA Corp. | | | 2,684 | | | | 123,571 | |
| Pinnacle West Capital Corp. | | | 2,114 | | | | 115,720 | |
| AGL Resources, Inc. | | | 2,276 | | | | 104,764 | |
| Pepco Holdings, Inc. | | | 4,788 | | | | 88,386 | |
| Integrys Energy Group, Inc. | | | 1,525 | | | | 85,232 | |
| TECO Energy, Inc. | | | 3,914 | | | | 64,738 | |
| Total Utilities | | | | | | | 9,065,309 | |
| TELECOMMUNICATION SERVICES - 2.1% | | | | | | | | |
| AT&T, Inc. | | | 101,952 | | | | 3,448,017 | |
| Verizon Communications, Inc. | | | 54,929 | | | | 2,562,987 | |
| Crown Castle International Corp.* | | | 5,631 | | | | 411,232 | |
| CenturyLink, Inc. | | | 11,530 | | | | 361,811 | |
| Windstream Holdings, Inc.1 | | | 11,379 | | | | 91,032 | |
| Frontier Communications Corp.1 | | | 19,188 | | | | 80,014 | |
| Total Telecommunication Services | | | | | | | 6,955,093 | |
| Total Common Stocks | | | | | | | | |
| (Cost $212,478,448) | | | | | | | 287,075,899 | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENTS††,2 - 20.2% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 52,011,829 | | | | 52,011,829 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 5,870,705 | | | | 5,870,705 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 4,581,279 | | | | 4,581,279 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/133 | | | 3,567,292 | | | | 3,567,292 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $66,031,105) | | | | | | | 66,031,105 | |
| SECURITIES LENDING COLLATERAL††,4 - 0.0% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 77,423 | | | | 77,423 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 72,295 | | | | 72,295 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $149,718) | | | | | | | 149,718 | |
| Total Investments - 107.9% | | | | | | | | |
| (Cost $278,659,271) | | | | | | $ | 353,256,722 | |
| Other Assets & Liabilities, net - (7.9)% | | | | | | | (25,924,236 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 327,332,486 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 27 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| S&P 500® FUND | |
| | | Contracts | | | Unrealized
Loss | |
| | | | | | | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 S&P 500 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $27,997,550) | | | 334 | | | $ | (563,678 | ) |
| | | Units | | | | |
| EQUITY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Barclays Bank plc | | | | | | | | |
| October 2013 S&P 500 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $1,317,302) | | | 783 | | | $ | (5,299 | ) |
| Goldman Sachs International | | | | | | | | |
| October 2013 S&P 500 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $2,075,100) | | | 1,234 | | | | (20,985 | ) |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 S&P 500 Index Swap, | | | | | | | | |
| Terminating 10/23/135 | | | | | | | | |
| (Notional Value $10,076,943) | | | 5,993 | | | | (60,257 | ) |
| (Total Notional Value $13,469,345) | | | | | | $ | (86,541 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 4 | Securities lending collateral — See Note 11. |
| 5 | Total Return based on S&P 500 Index +/- financing at a variable rate. |
| | plc — Public Limited Company |
| | REIT — Real Estate Investment Trust |
| 28 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $141,769 of securities loaned | | | | |
| (cost $212,478,448) | | $ | 287,075,899 | |
| Repurchase agreements, at value | | | | |
| (cost $66,180,823) | | | 66,180,823 | |
| Total investments | | | | |
| (cost $278,659,271) | | | 353,256,722 | |
| Segregated cash with broker | | | 2,759,000 | |
| Cash | | | 2,728 | |
| Receivables: | | | | |
| Securities sold | | | 15,927,870 | |
| Fund shares sold | | | 2,617,478 | |
| Dividends | | | 361,419 | |
| Foreign taxes reclaim | | | 210 | |
| Interest | | | 170 | |
| Other assets | | | 4,386 | |
| Total assets | | | 374,929,983 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 86,541 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 46,291,396 | |
| Management fees | | | 205,806 | |
| Variation margin | | | 165,330 | |
| Swap settlement | | | 161,433 | |
| Upon return of securities loaned | | | 149,718 | |
| Securities purchased | | | 116,356 | |
| Distribution and service fees | | | 77,065 | |
| Transfer agent and administrative fees | | | 68,602 | |
| Portfolio accounting fees | | | 41,162 | |
| Miscellaneous | | | 234,088 | |
| Total Liabilities | | | 47,597,497 | |
| Net assets | | $ | 327,332,486 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 293,550,160 | |
| Undistributed net investment income | | | 170,643 | |
| Accumulated net realized loss on investments | | | (40,335,549 | ) |
| Net unrealized appreciation on investments | | | 73,947,232 | |
| Net assets | | $ | 327,332,486 | |
| A-Class: | | | | |
| Net assets | | $ | 25,673,709 | |
| Capital shares outstanding | | | 757,317 | |
| Net asset value per share | | $ | 33.90 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 35.59 | |
| C-Class: | | | | |
| Net assets | | $ | 15,351,043 | |
| Capital shares outstanding | | | 480,114 | |
| Net asset value per share | | $ | 31.97 | |
| H-Class: | | | | |
| Net assets | | $ | 286,307,734 | |
| Capital shares outstanding | | | 8,445,169 | |
| Net asset value per share | | $ | 33.90 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $802) | | $ | 2,616,421 | |
| Interest | | | 9,393 | |
| Income from securities lending, net | | | 1,012 | |
| Total investment income | | | 2,626,826 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 1,172,682 | |
| Transfer agent and administrative fees | | | 390,895 | |
| Distribution and service fees: | | | | |
| A-Class | | | 21,575 | |
| C-Class | | | 62,628 | |
| H-Class | | | 353,664 | |
| Portfolio accounting fees | | | 178,354 | |
| Custodian fees | | | 15,408 | |
| Trustees’ fees* | | | 15,403 | |
| Line of credit fees | | | 111 | |
| Miscellaneous | | | 241,058 | |
| Total expenses | | | 2,451,778 | |
| Net investment income | | | 175,048 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 5,360,098 | |
| Swap agreements | | | (2,148,587 | ) |
| Futures contracts | | | (394,709 | ) |
| Net realized gain | | | 2,816,802 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 9,016,830 | |
| Swap agreements | | | (346,035 | ) |
| Futures contracts | | | (565,581 | ) |
| Net change in unrealized appreciation (depreciation) | | | 8,105,214 | |
| Net realized and unrealized gain | | | 10,922,016 | |
| Net increase in net assets resulting from operations | | $ | 11,097,064 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 29 |
| S&P 500® FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 175,048 | | | $ | 552,358 | |
| Net realized gain on investments | | | 2,816,802 | | | | 1,566,444 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 8,105,214 | | | | 17,913,896 | |
| Net increase in net assets resulting from operations | | | 11,097,064 | | | | 20,032,698 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| A-Class | | | — | | | | (20,560 | ) |
| C-Class | | | — | | | | (24,329 | ) |
| H-Class | | | — | | | | (561,984 | ) |
| Total distributions to shareholders | | | — | | | | (606,873 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 36,939,248 | | | | 64,513,152 | |
| C-Class | | | 39,640,807 | | | | 108,459,874 | |
| H-Class | | | 917,811,407 | | | | 1,437,709,986 | |
| Distributions reinvested | | | | | | | | |
| A-Class | | | — | | | | 17,839 | |
| C-Class | | | — | | | | 23,112 | |
| H-Class | | | — | | | | 378,849 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (24,370,903 | ) | | | (67,248,396 | ) |
| C-Class | | | (35,294,527 | ) | | | (109,371,658 | ) |
| H-Class | | | (906,093,392 | ) | | | (1,430,676,174 | ) |
| Net increase from capital share transactions | | | 28,632,640 | | | | 3,806,584 | |
| Net increase in net assets | | | 39,729,704 | | | | 23,232,409 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 287,602,782 | | | | 264,370,373 | |
| End of period | | $ | 327,332,486 | | | $ | 287,602,782 | |
| Undistributed/(Accumulated) net investment income/(loss) at end of period | | $ | 170,643 | | | $ | (4,405 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 1,118,668 | | | | 2,325,920 | |
| C-Class | | | 1,268,367 | | | | 4,026,873 | |
| H-Class | | | 27,593,524 | | | | 50,643,688 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| A-Class | | | — | | | | 622 | |
| C-Class | | | — | | | | 849 | |
| H-Class | | | — | | | | 13,207 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (742,169 | ) | | | (2,421,335 | ) |
| C-Class | | | (1,130,760 | ) | | | (4,060,876 | ) |
| H-Class | | | (27,559,743 | ) | | | (50,785,708 | ) |
| Net increase (decrease) in shares | | | 547,887 | | | | (256,760 | ) |
| 30 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P 500® FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 31.55 | | | $ | 28.20 | | | $ | 26.41 | | | $ | 23.18 | | | $ | 15.79 | | | $ | 25.92 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .02 | | | | .06 | | | | .01 | | | | (.06 | ) | | | .07 | | | | .12 | |
| Net gain (loss) on investments (realized and unrealized) | | | 2.33 | | | | 3.36 | | | | 1.78 | | | | 3.29 | | | | 7.43 | | | | (10.21 | ) |
| Total from investment operations | | | 2.35 | | | | 3.42 | | | | 1.79 | | | | 3.23 | | | | 7.50 | | | | (10.09 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (— | )c | | | (.11 | ) | | | (.04 | ) |
| Total distributions | | | — | | | | (.07 | ) | | | — | | | | (— | ) | | | (.11 | ) | | | (.04 | ) |
| Net asset value, end of period | | $ | 33.90 | | | $ | 31.55 | | | $ | 28.20 | | | $ | 26.41 | | | $ | 23.18 | | | $ | 15.79 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 7.45 | % | | | 12.16 | % | | | 6.78 | % | | | 13.94 | % | | | 47.55 | % | | | (38.95 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 25,674 | | | $ | 12,014 | | | $ | 13,413 | | | $ | 10,288 | | | $ | 46,312 | | | $ | 29,409 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.12 | % | | | 0.22 | % | | | 0.05 | % | | | (0.25 | %) | | | 0.34 | % | | | 0.68 | % |
| Total expenses | | | 1.54 | % | | | 1.50 | % | | | 1.51 | % | | | 1.54 | % | | | 1.53 | % | | | 1.52 | % |
| Portfolio turnover rate | | | 66 | % | | | 76 | % | | | 196 | % | | | 202 | % | | | 58 | % | | | 168 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 29.87 | | | $ | 26.91 | | | $ | 25.41 | | | $ | 22.50 | | | $ | 15.44 | | | $ | 25.55 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.10 | ) | | | (.14 | ) | | | (.20 | ) | | | (.27 | ) | | | (.08 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.20 | | | | 3.17 | | | | 1.70 | | | | 3.18 | | | | 7.25 | | | | (10.05 | ) |
| Total from investment operations | | | 2.10 | | | | 3.03 | | | | 1.50 | | | | 2.91 | | | | 7.17 | | | | (10.07 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (— | )c | | | (.11 | ) | | | (.04 | ) |
| Total distributions | | | — | | | | (.07 | ) | | | — | | | | (— | ) | | | (.11 | ) | | | (.04 | ) |
| Net asset value, end of period | | $ | 31.97 | | | $ | 29.87 | | | $ | 26.91 | | | $ | 25.41 | | | $ | 22.50 | | | $ | 15.44 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 7.03 | % | | | 11.29 | % | | | 5.90 | % | | | 12.93 | % | | | 46.49 | % | | | (39.43 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 15,351 | | | $ | 10,231 | | | $ | 10,110 | | | $ | 10,032 | | | $ | 11,456 | | | $ | 7,295 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.62 | %) | | | (0.52 | %) | | | (0.80 | %) | | | (1.11 | %) | | | (0.41 | %) | | | (0.08 | %) |
| Total expenses | | | 2.29 | % | | | 2.28 | % | | | 2.26 | % | | | 2.29 | % | | | 2.28 | % | | | 2.28 | % |
| Portfolio turnover rate | | | 66 | % | | | 76 | % | | | 196 | % | | | 202 | % | | | 58 | % | | | 168 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 31 |
| S&P 500® FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 31.55 | | | $ | 28.20 | | | $ | 26.39 | | | $ | 23.17 | | | $ | 15.78 | | | $ | 25.90 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .02 | | | | .07 | | | | (.02 | ) | | | (.09 | ) | | | .06 | | | | .13 | |
| Net gain (loss) on investments (realized and unrealized) | | | 2.33 | | | | 3.35 | | | | 1.83 | | | | 3.31 | | | | 7.44 | | | | (10.21 | ) |
| Total from investment operations | | | 2.35 | | | | 3.42 | | | | 1.81 | | | | 3.22 | | | | 7.50 | | | | (10.08 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.07 | ) | | | — | | | | (— | )c | | | (.11 | ) | | | (.04 | ) |
| Total distributions | | | — | | | | (.07 | ) | | | — | | | | (— | ) | | | (.11 | ) | | | (.04 | ) |
| Net asset value, end of period | | $ | 33.90 | | | $ | 31.55 | | | $ | 28.20 | | | $ | 26.39 | | | $ | 23.17 | | | $ | 15.78 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 7.45 | % | | | 12.16 | % | | | 6.86 | % | | | 13.90 | % | | | 47.58 | % | | | (38.94 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 286,308 | | | $ | 265,358 | | | $ | 240,847 | | | $ | 249,090 | | | $ | 194,193 | | | $ | 139,759 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.14 | % | | | 0.24 | % | | | (0.07 | %) | | | (0.37 | %) | | | 0.29 | % | | | 0.64 | % |
| Total expenses | | | 1.54 | % | | | 1.50 | % | | | 1.50 | % | | | 1.54 | % | | | 1.53 | % | | | 1.53 | % |
| Portfolio turnover rate | | | 66 | % | | | 76 | % | | | 196 | % | | | 202 | % | | | 58 | % | | | 168 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share was computed using average shares outstanding throughout the period. |
| c | Less than $0.01 per share. |
| d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
| 32 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE S&P 500® STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is the inverse (opposite) of the performance of the S&P 500® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Investor Class | | | January 7, 1994 | |
| Advisor Class | | | August 5, 1998 | |
| A-Class | | | March 31, 2004 | |
| C-Class | | | March 15, 2001 | |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 33 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE S&P 500® Strategy FUND | |
| | | Face
Amount | | | Value | |
| | | | |
| FEDERAL AGENCY DISCOUNT NOTES†† - 47.9% | | | | | | | | |
| Farmer Mac1 | | | | | | | | |
| 0.16% due 02/25/14 | | $ | 15,000,000 | | | $ | 14,998,170 | |
| 0.11% due 03/25/14 | | | 10,000,000 | | | | 9,998,540 | |
| 0.07% due 03/25/14 | | | 10,000,000 | | | | 9,998,540 | |
| Total Farmer Mac | | | | | | | 34,995,250 | |
| Freddie Mac2 | | | | | | | | |
| 0.12% due 10/16/13 | | | 10,000,000 | | | | 9,999,920 | |
| 0.17% due 11/19/13 | | | 10,000,000 | | | | 9,999,730 | |
| 0.08% due 02/24/14 | | | 10,000,000 | | | | 9,998,780 | |
| Total Freddie Mac | | | | | | | 29,998,430 | |
| Federal Home Loan Bank1 | | | | | | | | |
| 0.08% due 02/14/14 | | | 20,000,000 | | | | 19,997,740 | |
| Fannie Mae2 | | | | | | | | |
| 0.16% due 10/01/13 | | | 10,000,000 | | | | 10,000,000 | |
| Total Federal Agency Discount Notes | | | | | | | | |
| (Cost $94,969,184) | | | | | | | 94,991,420 | |
| REPURCHASE AGREEMENTS††,3 - 46.8% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 61,865,532 | | | | 61,865,532 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/134 | | | 18,505,950 | | | | 18,505,950 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 6,982,916 | | | | 6,982,916 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 5,449,207 | | | | 5,449,207 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $92,803,605) | | | | | | | 92,803,605 | |
| Total Investments - 94.7% | | | | | | | | |
| (Cost $187,772,789) | | | | | | $ | 187,795,025 | |
| Other Assets & Liabilities, net - 5.3% | | | | | | | 10,481,809 | |
| Total Net Assets - 100.0% | | | | | | $ | 198,276,834 | |
| | | | | | unrealized | |
| | | Contracts | | | Gain | |
| | | | | | | |
| EQUITY FUTURES CONTRACTS SOLD SHORT† | | | | | | | | |
| December 2013 S&P 500 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $43,756,650) | | | 522 | | | $ | 982,679 | |
| | | Units | | | | |
| EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 S&P 500 Index Swap, | | | | | | | | |
| Terminating 10/23/135 | | | | | | | | |
| (Notional Value $112,642,867) | | | 66,988 | | | $ | 670,447 | |
| Barclays Bank plc | | | | | | | | |
| October 2013 S&P 500 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $35,826,183) | | | 21,305 | | | | 215,758 | |
| Goldman Sachs International | | | | | | | | |
| October 2013 S&P 500 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $6,517,661) | | | 3,876 | | | | 52,787 | |
| (Total Notional Value $154,986,711) | | | | | | $ | 938,992 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government. |
| 2 | 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. |
| 3 | Repurchase Agreements — See Note 5. |
| 4 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 5 | Total Return based on S&P 500 Index +/- financing at a variable rate.
plc — Public Limited Company |
| 34 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE S&P 500® Strategy FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $94,969,184) | | $ | 94,991,420 | |
| Repurchase agreements, at value | | | | |
| (cost $92,803,605) | | | 92,803,605 | |
| Total investments | | | | |
| (cost $187,772,789) | | | 187,795,025 | |
| Segregated cash with broker | | | 9,732,940 | |
| Unrealized appreciation on swap agreements | | | 938,992 | |
| Receivables: | | | | |
| Fund shares sold | | | 560,902 | |
| Variation margin | | | 258,390 | |
| Interest | | | 47 | |
| Total assets | | | 199,286,296 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 714,973 | |
| Management fees | | | 143,360 | |
| Transfer agent and administrative fees | | | 39,822 | |
| Portfolio accounting fees | | | 15,929 | |
| Distribution and service fees | | | 9,031 | |
| Miscellaneous | | | 86,347 | |
| Total liabilities | | | 1,009,462 | |
| Net assets | | $ | 198,276,834 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 580,135,111 | |
| Accumulated net investment loss | | | (1,715,954 | ) |
| Accumulated net realized loss on investments | | | (382,086,230 | ) |
| Net unrealized appreciation on investments | | | 1,943,907 | |
| Net assets | | $ | 198,276,834 | |
| Investor Class: | | | | |
| Net assets | | $ | 180,821,888 | |
| Capital shares outstanding | | | 9,449,863 | |
| Net asset value per share | | $ | 19.13 | |
| Advisor Class: | | | | |
| Net assets | | $ | 6,356,164 | |
| Capital shares outstanding | | | 362,628 | |
| Net asset value per share | | $ | 17.53 | |
| A-Class: | | | | |
| Net assets | | $ | 3,794,741 | |
| Capital shares outstanding | | | 212,084 | |
| Net asset value per share | | $ | 17.89 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 18.78 | |
| C-Class: | | | | |
| Net assets | | $ | 7,304,041 | |
| Capital shares outstanding | | | 436,857 | |
| Net asset value per share | | $ | 16.72 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Interest | | $ | 59,660 | |
| Total investment income | | | 59,660 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 784,308 | |
| Transfer agent and administrative fees | | | 217,863 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 24,225 | |
| A-Class | | | 7,016 | |
| C-Class | | | 37,179 | |
| Portfolio accounting fees | | | 87,144 | |
| Custodian fees | | | 9,964 | |
| Trustees’ fees* | | | 8,209 | |
| Miscellaneous | | | 133,416 | |
| Total expenses | | | 1,309,324 | |
| Net investment loss | | | (1,249,664 | ) |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Swap agreements | | | (11,478,551 | ) |
| Futures contracts | | | (6,207,025 | ) |
| Net realized loss | | | (17,685,576 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 3,082 | |
| Swap agreements | | | 1,327,429 | |
| Futures contracts | | | 1,243,722 | |
| Net change in unrealized appreciation (depreciation) | | | 2,574,233 | |
| Net realized and unrealized loss | | | (15,111,343 | ) |
| Net decrease in net assets resulting from operations | | $ | (16,361,007 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 35 |
| INVERSE S&P 500® STRATEGY FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (1,249,664 | ) | | $ | (2,111,038 | ) |
| Net realized loss on investments | | | (17,685,576 | ) | | | (23,000,794 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 2,574,233 | | | | (379,315 | ) |
| Net decrease in net assets resulting from operations | | | (16,361,007 | ) | | | (25,491,147 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 275,691,229 | | | | 290,140,547 | |
| Advisor Class | | | 24,757,385 | | | | 70,061,389 | |
| A-Class | | | 13,492,462 | | | | 15,522,986 | |
| C-Class | | | 6,948,280 | | | | 15,210,173 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (187,556,681 | ) | | | (275,618,714 | ) |
| Advisor Class | | | (26,910,078 | ) | | | (64,204,487 | ) |
| A-Class | | | (14,797,086 | ) | | | (16,274,985 | ) |
| C-Class | | | (5,872,768 | ) | | | (14,556,925 | ) |
| Net increase from capital share transactions | | | 85,752,743 | | | | 20,279,984 | |
| Net increase (decrease) in net assets | | | 69,391,736 | | | | (5,211,163 | ) |
| | | | | | | | | |
| Net Assets: | | | | | | | | |
| Beginning of period | | | 128,885,098 | | | | 134,096,261 | |
| End of period | | $ | 198,276,834 | | | $ | 128,885,098 | |
| Accumulated net investment loss at end of period | | $ | (1,715,954 | ) | | $ | (466,290 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 13,930,180 | | | | 11,922,834 | |
| Advisor Class | | | 1,339,601 | | | | 3,161,277 | |
| A-Class | | | 709,516 | | | | 706,864 | |
| C-Class | | | 397,113 | | | | 704,780 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (9,528,867 | ) | | | (11,439,101 | ) |
| Advisor Class | | | (1,483,264 | ) | | | (2,918,160 | ) |
| A-Class | | | (797,695 | ) | | | (749,248 | ) |
| C-Class | | | (341,607 | ) | | | (683,975 | ) |
| Net increase in shares | | | 4,224,977 | | | | 705,271 | |
| 36 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE S&P 500® STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 21.03 | | | $ | 24.61 | | | $ | 28.50 | | | $ | 34.38 | | | $ | 54.23 | | | $ | 40.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.13 | ) | | | (.30 | ) | | | (.38 | ) | | | (.41 | ) | | | (.47 | ) | | | .12 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.77 | ) | | | (3.28 | ) | | | (3.51 | ) | | | (5.47 | ) | | | (19.32 | ) | | | 14.94 | |
| Total from investment operations | | | (1.90 | ) | | | (3.58 | ) | | | (3.89 | ) | | | (5.88 | ) | | | (19.79 | ) | | | 15.06 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Net asset value, end of period | | $ | 19.13 | | | $ | 21.03 | | | $ | 24.61 | | | $ | 28.50 | | | $ | 34.38 | | | $ | 54.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.03 | %) | | | (14.55 | %) | | | (13.65 | %) | | | (17.10 | %) | | | (36.51 | %) | | | 37.66 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 180,822 | | | $ | 106,158 | | | $ | 112,334 | | | $ | 118,410 | | | $ | 171,423 | | | $ | 217,740 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (1.36 | %) | | | (1.27 | %) | | | (1.31 | %) | | | (1.22 | %) | | | (1.16 | %) | | | 0.25 | % |
| Total expenses | | | 1.42 | % | | | 1.41 | % | | | 1.41 | % | | | 1.44 | % | | | 1.43 | % | | | 1.43 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.31 | | | $ | 22.71 | | | $ | 26.44 | | | $ | 32.06 | | | $ | 50.83 | | | $ | 37.72 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.17 | ) | | | (.39 | ) | | | (.48 | ) | | | (.54 | ) | | | (.63 | ) | | | (.13 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.61 | ) | | | (3.01 | ) | | | (3.25 | ) | | | (5.08 | ) | | | (18.08 | ) | | | 14.07 | |
| Total from investment operations | | | (1.78 | ) | | | (3.40 | ) | | | (3.73 | ) | | | (5.62 | ) | | | (18.71 | ) | | | 13.94 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Net asset value, end of period | | $ | 17.53 | | | $ | 19.31 | | | $ | 22.71 | | | $ | 26.44 | | | $ | 32.06 | | | $ | 50.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.22 | %) | | | (14.97 | %) | | | (14.11 | %) | | | (17.53 | %) | | | (36.82 | %) | | | 36.96 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,356 | | | $ | 9,775 | | | $ | 5,978 | | | $ | 6,434 | | | $ | 9,607 | | | $ | 15,305 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.85 | %) | | | (1.77 | %) | | | (1.81 | %) | | | (1.72 | %) | | | (1.63 | %) | | | (0.30 | %) |
| Total expenses | | | 1.93 | % | | | 1.90 | % | | | 1.91 | % | | | 1.93 | % | | | 1.93 | % | | | 1.93 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 37 |
| INVERSE S&P 500® STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.69 | | | $ | 23.10 | | | $ | 26.82 | | | $ | 32.43 | | | $ | 51.30 | | | $ | 37.97 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.15 | ) | | | (.34 | ) | | | (.42 | ) | | | (.48 | ) | | | (.53 | ) | | | — | d |
| Net gain (loss) on investments (realized and unrealized) | | | (1.65 | ) | | | (3.07 | ) | | | (3.30 | ) | | | (5.13 | ) | | | (18.28 | ) | | | 14.16 | |
| Total from investment operations | | | (1.80 | ) | | | (3.41 | ) | | | (3.72 | ) | | | (5.61 | ) | | | (18.81 | ) | | | 14.16 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Net asset value, end of period | | $ | 17.89 | | | $ | 19.69 | | | $ | 23.10 | | | $ | 26.82 | | | $ | 32.43 | | | $ | 51.30 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.14 | %) | | | (14.76 | %) | | | (13.87 | %) | | | (17.30 | %) | | | (36.68 | %) | | | 37.30 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,795 | | | $ | 5,912 | | | $ | 7,915 | | | $ | 5,029 | | | $ | 28,565 | | | $ | 18,381 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (1.60 | %) | | | (1.52 | %) | | | (1.56 | %) | | | (1.47 | %) | | | (1.42 | %) | | | 0.00 | % |
| Total expenses | | | 1.68 | % | | | 1.65 | % | | | 1.66 | % | | | 1.68 | % | | | 1.67 | % | | | 1.68 | % |
| Portfolio turnover rate | | | ��� | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 18.46 | | | $ | 21.83 | | | $ | 25.53 | | | $ | 31.12 | | | $ | 49.59 | | | $ | 37.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.20 | ) | | | (.48 | ) | | | (.59 | ) | | | (.67 | ) | | | (.79 | ) | | | (.28 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.54 | ) | | | (2.89 | ) | | | (3.11 | ) | | | (4.92 | ) | | | (17.62 | ) | | | 13.70 | |
| Total from investment operations | | | (1.74 | ) | | | (3.37 | ) | | | (3.70 | ) | | | (5.59 | ) | | | (18.41 | ) | | | 13.42 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.06 | ) | | | (.83 | ) |
| Net asset value, end of period | | $ | 16.72 | | | $ | 18.46 | | | $ | 21.83 | | | $ | 25.53 | | | $ | 31.12 | | | $ | 49.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.43 | %) | | | (15.44 | %) | | | (14.49 | %) | | | (17.96 | %) | | | (37.14 | %) | | | 36.27 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 7,304 | | | $ | 7,041 | | | $ | 7,870 | | | $ | 11,817 | | | $ | 16,041 | | | $ | 19,674 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.35 | %) | | | (2.27 | %) | | | (2.31 | %) | | | (2.23 | %) | | | (2.15 | %) | | | (0.67 | %) |
| Total expenses | | | 2.43 | % | | | 2.40 | % | | | 2.42 | % | | | 2.44 | % | | | 2.43 | % | | | 2.43 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 38 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
NASDAQ-100® FUND
OBJECTIVE: Seeks to provide investment results that correspond, before fees and expenses, to a benchmark for over-the-counter securities on a daily basis. The Fund’s current benchmark is the NASDAQ-100 Index® (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| Investor Class | | February 14, 1994 |
| Advisor Class | | September 22, 1998 |
| A-Class | | March 31, 2004 |
| C-Class | | March 26, 2001 |
| Ten Largest Holdings (% of Total Net Assets) |
| Apple, Inc. | | | 10.5 | % |
| Microsoft Corp. | | | 6.7 | % |
| Google, Inc. — Class A | | | 5.8 | % |
| Amazon.com, Inc. | | | 3.5 | % |
| Cisco Systems, Inc. | | | 3.0 | % |
| QUALCOMM, Inc. | | | 2.8 | % |
| Intel Corp. | | | 2.8 | % |
| Comcast Corp. — Class A | | | 2.3 | % |
| Gilead Sciences, Inc. | | | 2.3 | % |
| Facebook, Inc. — Class A | | | 2.2 | % |
| Top Ten Total | | | 41.9 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 39 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| NASDAQ-100® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 87.3% | | | | | | | | |
| | | | | | | | | |
| INFORMATION TECHNOLOGY - 50.1% | | | | | | | | |
| Apple, Inc. | | | 140,378 | | | $ | 66,925,212 | |
| Microsoft Corp. | | | 1,287,082 | | | | 42,872,702 | |
| Google, Inc. — Class A* | | | 42,327 | | | | 37,074,642 | |
| Cisco Systems, Inc. | | | 825,767 | | | | 19,339,463 | |
| QUALCOMM, Inc. | | | 265,053 | | | | 17,853,970 | |
| Intel Corp. | | | 769,776 | | | | 17,643,267 | |
| Facebook, Inc. — Class A* | | | 280,831 | | | | 14,108,949 | |
| eBay, Inc.* | | | 200,019 | | | | 11,159,060 | |
| Texas Instruments, Inc. | | | 170,142 | | | | 6,851,618 | |
| Baidu, Inc. ADR* | | | 42,445 | | | | 6,586,615 | |
| Automatic Data Processing, Inc. | | | 74,605 | | | | 5,399,910 | |
| Yahoo!, Inc.* | | | 157,652 | | | | 5,227,740 | |
| Adobe Systems, Inc.* | | | 77,602 | | | | 4,030,648 | |
| Cognizant Technology Solutions Corp. — Class A* | | | 46,570 | | | | 3,824,328 | |
| Dell, Inc. | | | 271,691 | | | | 3,741,185 | |
| Applied Materials, Inc. | | | 185,849 | | | | 3,259,792 | |
| Intuit, Inc. | | | 45,881 | | | | 3,042,369 | |
| Activision Blizzard, Inc. | | | 172,973 | | | | 2,883,460 | |
| Micron Technology, Inc.* | | | 160,460 | | | | 2,803,236 | |
| Symantec Corp. | | | 108,067 | | | | 2,674,658 | |
| Seagate Technology plc | | | 55,129 | | | | 2,411,343 | |
| Western Digital Corp. | | | 36,621 | | | | 2,321,771 | |
| Paychex, Inc. | | | 56,483 | | | | 2,295,469 | |
| Analog Devices, Inc. | | | 48,004 | | | | 2,258,588 | |
| NetApp, Inc. | | | 52,549 | | | | 2,239,638 | |
| SanDisk Corp. | | | 37,141 | | | | 2,210,261 | |
| Broadcom Corp. — Class A | | | 81,735 | | | | 2,125,927 | |
| CA, Inc. | | | 70,400 | | | | 2,088,768 | |
| Citrix Systems, Inc.* | | | 28,954 | | | | 2,044,442 | |
| Fiserv, Inc.* | | | 20,101 | | | | 2,031,206 | |
| Xilinx, Inc. | | | 41,146 | | | | 1,928,102 | |
| Altera Corp. | | | 49,360 | | | | 1,834,218 | |
| Check Point Software Technologies Ltd.* | | | 30,357 | | | | 1,716,992 | |
| Avago Technologies Ltd. | | | 38,149 | | | | 1,644,985 | |
| KLA-Tencor Corp. | | | 25,604 | | | | 1,558,003 | |
| Linear Technology Corp. | | | 36,031 | | | | 1,428,989 | |
| Akamai Technologies, Inc.* | | | 27,528 | | | | 1,423,198 | |
| Autodesk, Inc.* | | | 34,381 | | | | 1,415,466 | |
| Equinix, Inc.* | | | 7,636 | | | | 1,402,351 | |
| NVIDIA Corp. | | | 89,399 | | | | 1,391,048 | |
| Maxim Integrated Products, Inc. | | | 44,015 | | | | 1,311,647 | |
| Microchip Technology, Inc. | | | 30,482 | | | | 1,228,120 | |
| F5 Networks, Inc.* | | | 12,101 | | | | 1,037,782 | |
| Nuance Communications, Inc.* | | | 47,951 | | | | 896,444 | |
| Total Information Technology | | | | | | | 319,547,582 | |
| CONSUMER DISCRETIONARY - 17.8% | | | | | | | | |
| Amazon.com, Inc.* | | | 70,594 | | | | 22,070,508 | |
| Comcast Corp. — Class A | | | 329,665 | | | | 14,884,375 | |
| Starbucks Corp. | | | 116,102 | | | | 8,936,371 | |
| Priceline.com, Inc.* | | | 7,956 | | | | 8,043,118 | |
| Twenty-First Century Fox, Inc. | | | 234,523 | | | | 7,856,520 | |
| Viacom, Inc. — Class B | | | 65,789 | | | | 5,498,645 | |
| DIRECTV* | | | 84,827 | | | | 5,068,413 | |
| Sirius XM Radio, Inc. | | | 959,405 | | | | 3,712,897 | |
| Tesla Motors, Inc.*,1 | | | 18,764 | | | | 3,629,333 | |
| Netflix, Inc.* | | | 9,107 | | | | 2,815,975 | |
| Liberty Global plc — Class A* | | | 34,502 | | | | 2,737,734 | |
| Bed Bath & Beyond, Inc.* | | | 33,646 | | | | 2,602,855 | |
| Liberty Media Corp. — Class A* | | | 17,094 | | | | 2,515,382 | |
| Wynn Resorts Ltd. | | | 15,626 | | | | 2,469,064 | |
| Ross Stores, Inc. | | | 33,786 | | | | 2,459,621 | |
| Mattel, Inc. | | | 53,238 | | | | 2,228,543 | |
| O’Reilly Automotive, Inc.* | | | 16,773 | | | | 2,140,067 | |
| Charter Communications, Inc. — Class A* | | | 15,677 | | | | 2,112,633 | |
| Dollar Tree, Inc.* | | | 34,459 | | | | 1,969,676 | |
| Discovery Communications, Inc. — Class A* | | | 22,752 | | | | 1,920,724 | |
| Liberty Interactive Corp. — Class A* | | | 75,946 | | | | 1,782,453 | |
| Staples, Inc. | | | 102,051 | | | | 1,495,047 | |
| Garmin Ltd.1 | | | 30,179 | | | | 1,363,789 | |
| Fossil Group, Inc.* | | | 8,727 | | | | 1,014,426 | |
| Expedia, Inc. | | | 19,040 | | | | 986,082 | |
| Sears Holdings Corp.*,1 | | | 16,447 | | | | 980,899 | |
| Total Consumer Discretionary | | | | | | | 113,295,150 | |
| HEALTH CARE - 11.9% | | | | | | | | |
| Gilead Sciences, Inc.* | | | 236,501 | | | | 14,861,722 | |
| Amgen, Inc. | | | 116,406 | | | | 13,030,488 | |
| Celgene Corp.* | | | 63,549 | | | | 9,782,098 | |
| Biogen Idec, Inc.* | | | 36,722 | | | | 8,841,189 | |
| Express Scripts Holding Co.* | | | 125,808 | | | | 7,772,418 | |
| Regeneron Pharmaceuticals, Inc.* | | | 14,939 | | | | 4,673,965 | |
| Alexion Pharmaceuticals, Inc.* | | | 30,220 | | | | 3,510,355 | |
| Cerner Corp.* | | | 53,015 | | | | 2,785,939 | |
| Vertex Pharmaceuticals, Inc.* | | | 35,970 | | | | 2,727,245 | |
| Intuitive Surgical, Inc.* | | | 6,141 | | | | 2,310,674 | |
| Mylan, Inc.* | | | 58,998 | | | | 2,251,954 | |
| Catamaran Corp.* | | | 31,852 | | | | 1,463,599 | |
| Henry Schein, Inc.* | | | 13,364 | | | | 1,385,847 | |
| DENTSPLY International, Inc. | | | 21,989 | | | | 954,542 | |
| Total Health Care | | | | | | | 76,352,035 | |
| CONSUMER STAPLES - 4.3% | | | | | | | | |
| Mondelez International, Inc. — Class A | | | 275,135 | | | | 8,644,741 | |
| Costco Wholesale Corp. | | | 67,478 | | | | 7,768,067 | |
| Kraft Foods Group, Inc. | | | 92,022 | | | | 4,825,634 | |
| Whole Foods Market, Inc. | | | 57,563 | | | | 3,367,436 | |
| Green Mountain Coffee Roasters, Inc.* | | | 23,293 | | | | 1,754,662 | |
| Monster Beverage Corp.* | | | 25,863 | | | | 1,351,342 | |
| Total Consumer Staples | | | | | | | 27,711,882 | |
| INDUSTRIALS - 1.8% | | | | | | | | |
| PACCAR, Inc. | | | 54,693 | | | | 3,044,212 | |
| Fastenal Co. | | | 45,866 | | | | 2,304,767 | |
| Verisk Analytics, Inc. — Class A* | | | 25,943 | | | | 1,685,257 | |
| Stericycle, Inc.* | | | 13,272 | | | | 1,531,589 | |
| CH Robinson Worldwide, Inc. | | | 24,620 | | | | 1,466,367 | |
| Expeditors International of Washington, Inc. | | | 31,896 | | | | 1,405,338 | |
| Total Industrials | | | | | | | 11,437,530 | |
| 40 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| NASDAQ-100® FUND | |
| | | Shares | | | Value | |
| TELECOMMUNICATION SERVICES - 1.1% | | | | | | | | |
| Vodafone Group plc ADR | | | 155,640 | | | $ | 5,475,415 | |
| SBA Communications Corp. — Class A* | | | 19,747 | | | | 1,588,844 | |
| Total Telecommunication Services | | | | | | | 7,064,259 | |
| MATERIALS - 0.3% | | | | | | | | |
| Sigma-Aldrich Corp. | | | 18,576 | | | | 1,584,532 | |
| Randgold Resources Ltd. ADR | | | 7,656 | | | | 547,634 | |
| Total Materials | | | | | | | 2,132,166 | |
| Total Common Stocks | | | | | | | | |
| (Cost $259,863,085) | | | | | | | 557,540,604 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENTS††,2 - 12.5% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 59,468,319 | | | | 59,468,319 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/133 | | | 8,522,641 | | | | 8,522,641 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 6,712,337 | | | | 6,712,337 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 5,238,057 | | | | 5,238,057 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $79,941,354) | | | | | | | 79,941,354 | |
| SECURITIES LENDING COLLATERAL††,4 - 0.6% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 2,056,397 | | | | 2,056,397 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 1,920,181 | | | | 1,920,181 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $3,976,578) | | | | | | | 3,976,578 | |
| Total Investments - 100.4% | | | | | | | | |
| (Cost $343,781,017) | | | | | | $ | 641,458,536 | |
| Other Assets & Liabilities, net - (0.4)% | | | | | | | (2,478,331 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 638,980,205 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain (Loss) | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 NASDAQ-100 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $38,589,000) | | | 600 | | | $ | 18,950 | |
| | | | | | | | | |
| | | | Units | | | | | |
| EQUITY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 NASDAQ-100 Index Swap, | | | | | | | | |
| Terminating 10/23/135 | | | | | | | | |
| (Notional Value $2,616,456) | | | 813 | | | $ | (8,050 | ) |
| Barclays Bank plc | | | | | | | | |
| October 2013 NASDAQ-100 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $17,081,261) | | | 5,308 | | | | (61,968 | ) |
| Goldman Sachs International | | | | | | | | |
| October 2013 NASDAQ-100 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $22,064,121) | | | 6,856 | | | | (104,958 | ) |
| (Total Notional Value $41,761,838) | | | | | | $ | (174,976 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 4 | Securities lending collateral — See Note 11. |
| 5 | Total Return based on NASDAQ-100 Index +/- financing at a variable rate. |
ADR — American Depositary Receipt
plc — Public Limited Company
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 41 |
| STATEMENT OF ASSETS | | | |
| AND LIABILITIES (Unaudited) | | | |
| September 30, 2013 | | | |
| | | | | |
| Assets: | | | | |
| Investments, at value - including $3,927,556 of securities loaned | | | | |
| (cost $259,863,085) | | $ | 557,540,604 | |
| Repurchase agreements, at value | | | | |
| (cost $83,917,932) | | | 83,917,932 | |
| Total investments | | | | |
| (cost $343,781,017) | | | 641,458,536 | |
| Cash | | | 17,414 | |
| Receivables: | | | | |
| Fund shares sold | | | 4,713,664 | |
| Dividends | | | 232,729 | |
| Variation margin | | | 18,950 | |
| Foreign taxes reclaim | | | 2,696 | |
| Interest | | | 2,565 | |
| Total assets | | | 646,446,554 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 174,976 | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 3,976,578 | |
| Fund shares redeemed | | | 2,188,917 | |
| Management fees | | | 365,353 | |
| Swap settlement | | | 159,999 | |
| Transfer agent and administrative fees | | | 121,784 | |
| Portfolio accounting fees | | | 38,741 | |
| Distribution and service fees | | | 28,185 | |
| Miscellaneous | | | 411,816 | |
| Total liabilities | | | 7,466,349 | |
| Net assets | | $ | 638,980,205 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 240,902,141 | |
| Accumulated net investment loss | | | (568,038 | ) |
| Accumulated net realized gain on investments | | | 101,124,609 | |
| Net unrealized appreciation on investments | | | 297,521,493 | |
| Net assets | | $ | 638,980,205 | |
| Investor Class: | | | | |
| Net assets | | $ | 572,781,508 | |
| Capital shares outstanding | | | 27,261,453 | |
| Net asset value per share | | $ | 21.01 | |
| Advisor Class: | | | | |
| Net assets | | $ | 35,507,725 | |
| Capital shares outstanding | | | 1,828,190 | |
| Net asset value per share | | $ | 19.42 | |
| A-Class: | | | | |
| Net assets | | $ | 16,469,405 | |
| Capital shares outstanding | | | 827,927 | |
| Net asset value per share | | $ | 19.89 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 20.88 | |
| C-Class: | | | | |
| Net assets | | $ | 14,221,567 | |
| Capital shares outstanding | | | 770,666 | |
| Net asset value per share | | $ | 18.45 | |
| STATEMENT OF | | | |
| OPERATIONS (Unaudited) | | | |
| Period Ended September 30, 2013 | | | |
| | | | | |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $2,022) | | $ | 3,820,470 | |
| Income from securities lending, net | | | 6,804 | |
| Interest | | | 4,686 | |
| Total investment income | | | 3,831,960 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 2,133,514 | |
| Transfer agent and administrative fees | | | 711,172 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 111,554 | |
| A-Class | | | 24,385 | |
| C-Class | | | 64,905 | |
| Portfolio accounting fees | | | 236,219 | |
| Trustees’ fees* | | | 36,076 | |
| Custodian fees | | | 29,730 | |
| Line of credit fees | | | 105 | |
| Miscellaneous | | | 527,094 | |
| Total expenses | | | 3,874,754 | |
| Net investment loss | | | (42,794 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 57,225,427 | |
| Swap agreements | | | 6,082,698 | |
| Futures contracts | | | 904,029 | |
| Net realized gain | | | 64,212,154 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 19,674,208 | |
| Swap agreements | | | (247,225 | ) |
| Futures contracts | | | 17,137 | |
| Net change in unrealized appreciation (depreciation) | | | 19,444,120 | |
| Net realized and unrealized gain | | | 83,656,274 | |
| Net increase in net assets resulting from operations | | $ | 83,613,480 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 42 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| NASDAQ-100® FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income (loss) | | $ | (42,794 | ) | | $ | 460,302 | |
| Net realized gain on investments | | | 64,212,154 | | | | 111,630,461 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 19,444,120 | | | | (110,322,128 | ) |
| Net increase in net assets resulting from operations | | | 83,613,480 | | | | 1,768,635 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 371,582,796 | | | | 1,477,916,448 | |
| Advisor Class | | | 354,150,577 | | | | 480,871,589 | |
| A-Class | | | 38,345,121 | | | | 68,152,115 | |
| C-Class | | | 10,799,617 | | | | 29,758,316 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (324,736,671 | ) | | | (1,792,700,742 | ) |
| Advisor Class | | | (351,038,269 | ) | | | (526,907,940 | ) |
| A-Class | | | (47,376,725 | ) | | | (58,126,520 | ) |
| C-Class | | | (11,230,049 | ) | | | (32,187,854 | ) |
| Net increase (decrease) from capital share transactions | | | 40,496,397 | | | | (353,224,588 | ) |
| Net increase (decrease) in net assets | | | 124,109,877 | | | | (351,455,953 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 514,870,328 | | | | 866,326,281 | |
| End of period | | $ | 638,980,205 | | | $ | 514,870,328 | |
| Accumulated net investment loss at end of period | | $ | (568,038 | ) | | $ | (525,244 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 18,953,973 | | | | 83,557,992 | |
| Advisor Class | | | 19,931,934 | | | | 29,677,623 | |
| A-Class | | | 2,105,955 | | | | 4,019,789 | |
| C-Class | | | 629,180 | | | | 1,929,154 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (16,791,702 | ) | | | (101,458,207 | ) |
| Advisor Class | | | (19,097,020 | ) | | | (32,634,043 | ) |
| A-Class | | | (2,636,000 | ) | | | (3,516,436 | ) |
| C-Class | | | (660,805 | ) | | | (2,076,951 | ) |
| Net increase (decrease) in shares | | | 2,435,515 | | | | (20,501,079 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 43 |
| NASDAQ-100® FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 18.38 | | | $ | 17.92 | | | $ | 15.23 | | | $ | 12.83 | | | $ | 8.15 | | | $ | 11.81 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | — | c | | | .02 | | | | (.05 | ) | | | (.07 | ) | | | (.07 | ) | | | (.06 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.63 | | | | .44 | | | | 2.74 | | | | 2.47 | | | | 4.75 | | | | (3.60 | ) |
| Total from investment operations | | | 2.63 | | | | .46 | | | | 2.69 | | | | 2.40 | | | | 4.68 | | | | (3.66 | ) |
| Net asset value, end of period | | $ | 21.01 | | | $ | 18.38 | | | $ | 17.92 | | | $ | 15.23 | | | $ | 12.83 | | | $ | 8.15 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 14.31 | % | | | 2.57 | % | | | 17.66 | % | | | 18.71 | % | | | 57.42 | % | | | (30.99 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 572,782 | | | $ | 461,269 | | | $ | 770,626 | | | $ | 579,925 | | | $ | 571,761 | | | $ | 389,944 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.04 | % | | | 0.13 | % | | | (0.34 | %) | | | (0.50 | %) | | | (0.63 | %) | | | (0.59 | %) |
| Total expenses | | | 1.29 | % | | | 1.26 | % | | | 1.27 | % | | | 1.31 | % | | | 1.30 | % | | | 1.30 | % |
| Portfolio turnover rate | | | 78 | % | | | 94 | % | | | 94 | % | | | 39 | % | | | 34 | % | | | 55 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 17.04 | | | $ | 16.70 | | | $ | 14.27 | | | $ | 12.09 | | | $ | 7.72 | | | $ | 11.23 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.03 | ) | | | (.08 | ) | | | (.13 | ) | | | (.12 | ) | | | (.12 | ) | | | (.11 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.41 | | | | .42 | | | | 2.56 | | | | 2.30 | | | | 4.49 | | | | (3.40 | ) |
| Total from investment operations | | | 2.38 | | | | .34 | | | | 2.43 | | | | 2.18 | | | | 4.37 | | | | (3.51 | ) |
| Net asset value, end of period | | $ | 19.42 | | | $ | 17.04 | | | $ | 16.70 | | | $ | 14.27 | | | $ | 12.09 | | | $ | 7.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.97 | % | | | 2.04 | % | | | 17.03 | % | | | 18.03 | % | | | 56.61 | % | | | (31.26 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 35,508 | | | $ | 16,930 | | | $ | 65,970 | | | $ | 120,277 | | | $ | 17,859 | | | $ | 18,078 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.32 | %) | | | (0.51 | %) | | | (0.87 | %) | | | (1.00 | %) | | | (1.13 | %) | | | (1.11 | %) |
| Total expenses | | | 1.79 | % | | | 1.75 | % | | | 1.76 | % | | | 1.80 | % | | | 1.80 | % | | | 1.79 | % |
| Portfolio turnover rate | | | 78 | % | | | 94 | % | | | 94 | % | | | 39 | % | | | 34 | % | | | 55 | % |
| 44 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| NASDAQ-100® FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 17.42 | | | $ | 17.03 | | | $ | 14.52 | | | $ | 12.27 | | | $ | 7.82 | | | $ | 11.35 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.01 | ) | | | (.02 | ) | | | (.09 | ) | | | (.11 | ) | | | (.09 | ) | | | (.08 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.48 | | | | .41 | | | | 2.60 | | | | 2.36 | | | | 4.54 | | | | (3.45 | ) |
| Total from investment operations | | | 2.47 | | | | .39 | | | | 2.51 | | | | 2.25 | | | | 4.45 | | | | (3.53 | ) |
| Net asset value, end of period | | $ | 19.89 | | | $ | 17.42 | | | $ | 17.03 | | | $ | 14.52 | | | $ | 12.27 | | | $ | 7.82 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 14.18 | % | | | 2.29 | % | | | 17.29 | % | | | 18.34 | % | | | 56.91 | % | | | (31.10 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 16,469 | | | $ | 23,656 | | | $ | 14,553 | | | $ | 19,806 | | | $ | 15,128 | | | $ | 3,140 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.13 | %) | | | (0.09 | %) | | | (0.61 | %) | | | (0.81 | %) | | | (0.86 | %) | | | (0.82 | %) |
| Total expenses | | | 1.54 | % | | | 1.52 | % | | | 1.53 | % | | | 1.56 | % | | | 1.55 | % | | | 1.55 | % |
| Portfolio turnover rate | | | 78 | % | | | 94 | % | | | 94 | % | | | 39 | % | | | 34 | % | | | 55 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.22 | | | $ | 15.97 | | | $ | 13.72 | | | $ | 11.67 | | | $ | 7.49 | | | $ | 10.95 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.08 | ) | | | (.13 | ) | | | (.19 | ) | | | (.19 | ) | | | (.16 | ) | | | (.15 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 2.31 | | | | .38 | | | | 2.44 | | | | 2.24 | | | | 4.34 | | | | (3.31 | ) |
| Total from investment operations | | | 2.23 | | | | .25 | | | | 2.25 | | | | 2.05 | | | | 4.18 | | | | (3.46 | ) |
| Net asset value, end of period | | $ | 18.45 | | | $ | 16.22 | | | $ | 15.97 | | | $ | 13.72 | | | $ | 11.67 | | | $ | 7.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 13.75 | % | | | 1.57 | % | | | 16.40 | % | | | 17.57 | % | | | (55.81 | %) | | | (31.60 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 14,222 | | | $ | 13,015 | | | $ | 15,177 | | | $ | 11,864 | | | $ | 12,216 | | | $ | 6,368 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.97 | %) | | | (0.84 | %) | | | (1.35 | %) | | | (1.52 | %) | | | (1.63 | %) | | | (1.59 | %) |
| Total expenses | | | 2.29 | % | | | 2.26 | % | | | 2.27 | % | | | 2.31 | % | | | 2.30 | % | | | 2.30 | % |
| Portfolio turnover rate | | | 78 | % | | | 94 | % | | | 94 | % | | | 39 | % | | | 34 | % | | | 55 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 45 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE NASDAQ-100® STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is the inverse (opposite) of the performance of the NASDAQ-100 Index® (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| Investor Class | | September 3, 1998 |
| Advisor Class | | August 1, 2003 |
| A-Class | | March 31, 2004 |
| C-Class | | March 7, 2001 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| 46 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE NASDAQ-100® STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 94.2% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 7,689,301 | | | $ | 7,689,301 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 1,352,961 | | | | 1,352,961 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 867,911 | | | | 867,911 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 677,285 | | | | 677,285 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $10,587,458) | | | | | | | 10,587,458 | |
| Total Investments - 94.2% | | | | | | | | |
| (Cost $10,587,458) | | | | | | $ | 10,587,458 | |
| Other Assets & Liabilities, net - 5.8% | | | | | | | 651,216 | |
| Total Net Assets - 100.0% | | | | | | $ | 11,238,674 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain (Loss) | |
| | | | | | | |
| EQUITY FUTURES CONTRACTS SOLD SHORT† | | | | | | | | |
| December 2013 NASDAQ-100 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $578,835) | | | 9 | | | $ | (3,136 | ) |
| | | | | | | | | |
| | | | Units | | | | | |
| EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | | | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 NASDAQ-100 Index Swap, | | | | | | | | |
| Terminating 10/23/133 | | | | | | | | |
| (Notional Value $4,524,631) | | | 1,406 | | | $ | 15,641 | |
| Goldman Sachs International | | | | | | | | |
| October 2013 NASDAQ-100 Index Swap, | | | | | | | | |
| Terminating 10/31/133 | | | | | | | | |
| (Notional Value $3,149,867) | | | 979 | | | | 14,993 | |
| Barclays Bank plc | | | | | | | | |
| October 2013 NASDAQ-100 Index Swap, | | | | | | | | |
| Terminating 10/31/133 | | | | | | | | |
| (Notional Value $3,033,656) | | | 943 | | | | 11,069 | |
| (Total Notional Value $10,708,154) | | | | | | $ | 41,703 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Total Return based on NASDAQ-100 Index +/- financing at a variable rate. |
plc — Public Limited Company
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 47 |
| INVERSE NASDAQ-100® STRATEGY FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $10,587,458) | | $ | 10,587,458 | |
| Segregated cash with broker | | | 459,800 | |
| Unrealized appreciation on swap agreements | | | 41,703 | |
| Receivables: | | | | |
| Fund shares sold | | | 225,230 | |
| Variation margin | | | 1,305 | |
| Interest | | | 6 | |
| Other assets | | | 30,366 | |
| Total assets | | | 11,345,868 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 81,879 | |
| Management fees | | | 9,182 | |
| Transfer agent and administrative fees | | | 2,551 | |
| Distribution and service fees | | | 1,787 | |
| Portfolio accounting fees | | | 1,020 | |
| Miscellaneous | | | 10,775 | |
| Total liabilities | | | 107,194 | |
| Net assets | | $ | 11,238,674 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 91,571,108 | |
| Accumulated net investment loss | | | (159,333 | ) |
| Accumulated net realized loss on investments | | | (80,211,668 | ) |
| Net unrealized appreciation on investments | | | 38,567 | |
| Net assets | | $ | 11,238,674 | |
| Investor Class: | | | | |
| Net assets | | $ | 7,513,229 | |
| Capital shares outstanding | | | 995,834 | |
| Net asset value per share | | $ | 7.54 | |
| Advisor Class: | | | | |
| Net assets | | $ | 2,729,012 | |
| Capital shares outstanding | | | 380,712 | |
| Net asset value per share | | $ | 7.17 | |
| A-Class: | | | | |
| Net assets | | $ | 285,282 | |
| Capital shares outstanding | | | 38,995 | |
| Net asset value per share | | $ | 7.32 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 7.69 | |
| C-Class: | | | | |
| Net assets | | $ | 711,151 | |
| Capital shares outstanding | | | 108,253 | |
| Net asset value per share | | $ | 6.57 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Interest | | $ | 1,565 | |
| Total investment income | | | 1,565 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 57,551 | |
| Transfer agent and administrative fees | | | 15,986 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 7,085 | |
| A-Class | | | 320 | |
| C-Class | | | 3,990 | |
| Portfolio accounting fees | | | 6,394 | |
| Trustees’ fees* | | | 762 | |
| Custodian fees | | | 699 | |
| Miscellaneous | | | 11,860 | |
| Total expenses | | | 104,647 | |
| Net investment loss | | | (103,082 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 30,367 | |
| Swap agreements | | | (1,418,639 | ) |
| Futures contracts | | | (431,308 | ) |
| Net realized loss | | | (1,819,580 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Swap agreements | | | 69,277 | |
| Futures contracts | | | 13,978 | |
| Net change in unrealized appreciation (depreciation) | | | 83,255 | |
| Net realized and unrealized loss | | | (1,736,325 | ) |
| Net decrease in net assets resulting from operations | | $ | (1,839,407 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 48 | the RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE NASDAQ-100® STRATEGY FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (103,082 | ) | | $ | (215,845 | ) |
| Net realized loss on investments | | | (1,819,580 | ) | | | (1,529,851 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 83,255 | | | | (85,807 | ) |
| Net decrease in net assets resulting from operations | | | (1,839,407 | ) | | | (1,831,503 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 72,723,401 | | | | 171,623,947 | |
| Advisor Class | | | 15,326,487 | | | | 21,701,866 | |
| A-Class | | | 410,232 | | | | 2,082,298 | |
| C-Class | | | 1,240,103 | | | | 10,143,906 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (71,642,385 | ) | | | (171,487,070 | ) |
| Advisor Class | | | (14,367,172 | ) | | | (19,284,493 | ) |
| A-Class | | | (265,237 | ) | | | (2,284,696 | ) |
| C-Class | | | (1,088,377 | ) | | | (10,147,691 | ) |
| Net increase from capital share transactions | | | 2,337,052 | | | | 2,348,067 | |
| Net increase in net assets | | | 497,645 | | | | 516,564 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 10,741,029 | | | | 10,224,465 | |
| End of period | | $ | 11,238,674 | | | $ | 10,741,029 | |
| Accumulated net investment loss at end of period | | $ | (159,333 | ) | | $ | (56,251 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 9,023,554 | | | | 18,431,274 | |
| Advisor Class | | | 2,005,532 | | | | 2,392,488 | |
| A-Class | | | 52,296 | | | | 219,030 | |
| C-Class | | | 173,049 | | | | 1,225,599 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (8,905,551 | ) | | | (18,489,682 | ) |
| Advisor Class | | | (1,884,249 | ) | | | (2,156,089 | ) |
| A-Class | | | (34,738 | ) | | | (249,333 | ) |
| C-Class | | | (153,057 | ) | | | (1,227,725 | ) |
| Net increase in shares | | | 276,836 | | | | 145,562 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 49 |
| INVERSE NASDAQ-100® STRATEGY 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 8.78 | | | $ | 9.39 | | | $ | 11.92 | | | $ | 15.07 | | | $ | 25.09 | | | $ | 21.27 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.06 | ) | | | (.12 | ) | | | (.16 | ) | | | (.18 | ) | | | (.25 | ) | | | (.06 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.18 | ) | | | (.49 | ) | | | (2.37 | ) | | | (2.97 | ) | | | (9.77 | ) | | | 4.25 | |
| Total from investment operations | | | (1.24 | ) | | | (.61 | ) | | | (2.53 | ) | | | (3.15 | ) | | | (10.02 | ) | | | 4.19 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Net asset value, end of period | | $ | 7.54 | | | $ | 8.78 | | | $ | 9.39 | | | $ | 11.92 | | | $ | 15.07 | | | $ | 25.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (14.12 | %) | | | (6.50 | %) | | | (21.22 | %) | | | (20.90 | %) | | | (39.94 | %) | | | 19.48 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 7,513 | | | $ | 7,709 | | | $ | 8,792 | | | $ | 32,978 | | | $ | 21,137 | | | $ | 33,672 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.43 | %) | | | (1.32 | %) | | | (1.38 | %) | | | (1.30 | %) | | | (1.35 | %) | | | (0.26 | %) |
| Total expenses | | | 1.46 | % | | | 1.44 | % | | | 1.45 | % | | | 1.47 | % | | | 1.47 | % | | | 1.46 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 8.37 | | | $ | 9.00 | | | $ | 11.43 | | | $ | 14.54 | | | $ | 24.37 | | | $ | 20.77 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.07 | ) | | | (.16 | ) | | | (.21 | ) | | | (.24 | ) | | | (.32 | ) | | | (.06 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.13 | ) | | | (.47 | ) | | | (2.22 | ) | | | (2.87 | ) | | | (9.51 | ) | | | 4.03 | |
| Total from investment operations | | | (1.20 | ) | | | (.63 | ) | | | (2.43 | ) | | | (3.11 | ) | | | (9.83 | ) | | | 3.97 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Net asset value, end of period | | $ | 7.17 | | | $ | 8.37 | | | $ | 9.00 | | | $ | 11.43 | | | $ | 14.54 | | | $ | 24.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (14.34 | %) | | | (7.00 | %) | | | (21.26 | %) | | | (21.39 | %) | | | (40.34 | %) | | | 18.88 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,729 | | | $ | 2,171 | | | $ | 207 | | | $ | 642 | | | $ | 916 | | | $ | 476 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.94 | %) | | | (1.83 | %) | | | (1.91 | %) | | | (1.80 | %) | | | (1.84 | %) | | | (0.29 | %) |
| Total expenses | | | 1.96 | % | | | 1.95 | % | | | 1.95 | % | | | 1.97 | % | | | 1.97 | % | | | 1.97 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 50 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE NASDAQ-100® STRATEGY FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 8.52 | | | $ | 9.15 | | | $ | 11.66 | | | $ | 14.78 | | | $ | 24.67 | | | $ | 20.97 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.07 | ) | | | (.14 | ) | | | (.18 | ) | | | (.21 | ) | | | (.26 | ) | | | (.22 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.13 | ) | | | (.49 | ) | | | (2.33 | ) | | | (2.91 | ) | | | (9.63 | ) | | | 4.29 | |
| Total from investment operations | | | (1.20 | ) | | | (.63 | ) | | | (2.51 | ) | | | (3.12 | ) | | | (9.89 | ) | | | 4.07 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Net asset value, end of period | | $ | 7.32 | | | $ | 8.52 | | | $ | 9.15 | | | $ | 11.66 | | | $ | 14.78 | | | $ | 24.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (14.08 | %) | | | (6.89 | %) | | | (21.53 | %) | | | (21.11 | %) | | | (40.09 | %) | | | 19.18 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 285 | | | $ | 183 | | | $ | 474 | | | $ | 946 | | | $ | 1,041 | | | $ | 2,301 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.69 | %) | | | (1.56 | %) | | | (1.62 | %) | | | (1.54 | %) | | | (1.37 | %) | | | (0.92 | %) |
| Total expenses | | | 1.71 | % | | | 1.68 | % | | | 1.69 | % | | | 1.72 | % | | | 1.71 | % | | | 1.71 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 7.68 | | | $ | 8.32 | | | $ | 10.67 | | | $ | 13.62 | | | $ | 22.91 | | | $ | 19.63 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.09 | ) | | | (.19 | ) | | | (.24 | ) | | | (.29 | ) | | | (.39 | ) | | | (.25 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.02 | ) | | | (.45 | ) | | | (2.11 | ) | | | (2.66 | ) | | | (8.90 | ) | | | 3.90 | |
| Total from investment operations | | | (1.11 | ) | | | (.64 | ) | | | (2.35 | ) | | | (2.95 | ) | | | (9.29 | ) | | | 3.65 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.37 | ) |
| Net asset value, end of period | | $ | 6.57 | | | $ | 7.68 | | | $ | 8.32 | | | $ | 10.67 | | | $ | 13.62 | | | $ | 22.91 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (14.45 | %) | | | (7.58 | %) | | | (22.12 | %) | | | (21.66 | %) | | | (40.55 | %) | | | 18.35 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 711 | | | $ | 678 | | | $ | 752 | | | $ | 2,435 | | | $ | 1,858 | | | $ | 3,066 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.43 | %) | | | (2.32 | %) | | | (2.37 | %) | | | (2.29 | %) | | | (2.33 | %) | | | (1.19 | %) |
| Total expenses | | | 2.46 | % | | | 2.44 | % | | | 2.45 | % | | | 2.47 | % | | | 2.47 | % | | | 2.47 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 51 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
MID-CAP 1.5x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of a specific benchmark for mid-cap securities on a daily basis. The Fund’s current benchmark is 150% of the performance of the S&P MidCap 400® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | March 31, 2004 |
| C-Class | | August 20, 2001 |
| H-Class | | August 16, 2001 |
| Ten Largest Holdings (% of Total Net Assets) | | |
| Alliance Data Systems Corp. | | 0.6% |
| Green Mountain Coffee Roasters, Inc. | | 0.5% |
| Affiliated Managers Group, Inc. | | 0.5% |
| LKQ Corp. | | 0.5% |
| Tractor Supply Co. | | 0.5% |
| Equinix, Inc. | | 0.5% |
| Henry Schein, Inc. | | 0.5% |
| Oceaneering International, Inc. | | 0.5% |
| HollyFrontier Corp. | | 0.5% |
| Cimarex Energy Co. | | 0.5% |
| Top Ten Total | | 5.1% |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 52 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| MID-CAP 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 76.4% | | | | | | | | |
| | | | | | | | | |
| FINANCIALS - 17.2% | | | | | | | | |
| Affiliated Managers Group, Inc.* | | | 550 | | | $ | 100,451 | |
| SL Green Realty Corp. | | | 957 | | | | 85,019 | |
| Realty Income Corp. | | | 2,042 | | | | 81,170 | |
| Everest Re Group Ltd. | | | 506 | | | | 73,577 | |
| Rayonier, Inc. | | | 1,318 | | | | 73,347 | |
| Alleghany Corp.* | | | 175 | | | | 71,689 | |
| Federal Realty Investment Trust | | | 689 | | | | 69,899 | |
| New York Community Bancorp, Inc. | | | 4,592 | | | | 69,386 | |
| UDR, Inc. | | | 2,616 | | | | 61,999 | |
| Fidelity National Financial, Inc. — Class A | | | 2,250 | | | | 59,850 | |
| Essex Property Trust, Inc. | | | 398 | | | | 58,785 | |
| Arthur J Gallagher & Co. | | | 1,333 | | | | 58,185 | |
| Camden Property Trust | | | 884 | | | | 54,313 | |
| Raymond James Financial, Inc. | | | 1,286 | | | | 53,588 | |
| Liberty Property Trust | | | 1,492 | | | | 53,115 | |
| Duke Realty Corp. | | | 3,383 | | | | 52,233 | |
| MSCI, Inc. — Class A* | | | 1,264 | | | | 50,889 | |
| Extra Space Storage, Inc. | | | 1,103 | | | | 50,462 | |
| Reinsurance Group of America, Inc. — Class A | | | 739 | | | | 49,506 | |
| Eaton Vance Corp. | | | 1,261 | | | | 48,965 | |
| WR Berkley Corp. | | | 1,142 | | | | 48,946 | |
| Alexandria Real Estate Equities, Inc. | | | 743 | | | | 47,441 | |
| SEI Investments Co. | | | 1,512 | | | | 46,736 | |
| Regency Centers Corp. | | | 960 | | | | 46,416 | |
| Waddell & Reed Financial, Inc. — Class A | | | 897 | | | | 46,178 | |
| East West Bancorp, Inc. | | | 1,439 | | | | 45,977 | |
| Senior Housing Properties Trust | | | 1,961 | | | | 45,770 | |
| HCC Insurance Holdings, Inc. | | | 1,039 | | | | 45,529 | |
| Signature Bank* | | | 497 | | | | 45,485 | |
| Taubman Centers, Inc. | | | 670 | | | | 45,098 | |
| Kilroy Realty Corp. | | | 850 | | | | 42,458 | |
| Corrections Corporation of America | | | 1,205 | | | | 41,633 | |
| CBOE Holdings, Inc. | | | 914 | | | | 41,340 | |
| Hospitality Properties Trust | | | 1,453 | | | | 41,120 | |
| Jones Lang LaSalle, Inc. | | | 468 | | | | 40,856 | |
| BRE Properties, Inc. | | | 800 | | | | 40,608 | |
| SVB Financial Group* | | | 470 | | | | 40,594 | |
| National Retail Properties, Inc. | | | 1,260 | | | | 40,093 | |
| American Financial Group, Inc. | | | 741 | | | | 40,058 | |
| Brown & Brown, Inc. | | | 1,235 | | | | 39,644 | |
| Old Republic International Corp. | | | 2,513 | | | | 38,700 | |
| Cullen/Frost Bankers, Inc. | | | 546 | | | | 38,520 | |
| First Niagara Financial Group, Inc. | | | 3,690 | | | | 38,265 | |
| FirstMerit Corp. | | | 1,723 | | | | 37,406 | |
| American Campus Communities, Inc. | | | 1,094 | | | | 37,360 | |
| BioMed Realty Trust, Inc. | | | 1,998 | | | | 37,143 | |
| Omega Healthcare Investors, Inc. | | | 1,223 | | | | 36,531 | |
| Prosperity Bancshares, Inc. | | | 585 | | | | 36,176 | |
| Commerce Bancshares, Inc. | | | 801 | | | | 35,092 | |
| Protective Life Corp. | | | 820 | | | | 34,891 | |
| Weingarten Realty Investors | | | 1,173 | | | | 34,404 | |
| Home Properties, Inc. | | | 588 | | | | 33,957 | |
| Synovus Financial Corp. | | | 10,190 | | | | 33,627 | |
| City National Corp. | | | 496 | | | | 33,063 | |
| Highwoods Properties, Inc. | | | 933 | | | | 32,944 | |
| First Horizon National Corp. | | | 2,510 | | | | 27,585 | |
| First American Financial Corp. | | | 1,116 | | | | 27,175 | |
| Hancock Holding Co. | | | 855 | | | | 26,830 | |
| Associated Banc-Corp. | | | 1,727 | | | | 26,751 | |
| Federated Investors, Inc. — Class B | | | 980 | | | | 26,617 | |
| Aspen Insurance Holdings Ltd. | | | 705 | | | | 25,584 | |
| StanCorp Financial Group, Inc. | | | 465 | | | | 25,584 | |
| Hanover Insurance Group, Inc. | | | 460 | | | | 25,447 | |
| Bank of Hawaii Corp. | | | 467 | | | | 25,428 | |
| TCF Financial Corp. | | | 1,712 | | | | 24,447 | |
| Webster Financial Corp. | | | 941 | | | | 24,024 | |
| Fulton Financial Corp. | | | 2,015 | | | | 23,535 | |
| Primerica, Inc. | | | 568 | | | | 22,913 | |
| Washington Federal, Inc. | | | 1,078 | | | | 22,293 | |
| Corporate Office Properties Trust | | | 910 | | | | 21,021 | |
| Valley National Bancorp | | | 2,074 | | | | 20,636 | |
| Mack-Cali Realty Corp. | | | 921 | | | | 20,207 | |
| Apollo Investment Corp. | | | 2,342 | | | | 19,087 | |
| Mercury General Corp. | | | 380 | | | | 18,358 | |
| Kemper Corp. | | | 545 | | | | 18,312 | |
| Trustmark Corp. | | | 704 | | | | 18,022 | |
| Cathay General Bancorp | | | 769 | | | | 17,972 | |
| BancorpSouth, Inc. | | | 871 | | | | 17,368 | |
| Potlatch Corp. | | | 422 | | | | 16,745 | |
| Alexander & Baldwin, Inc.* | | | 449 | | | | 16,173 | |
| Equity One, Inc. | | | 657 | | | | 14,362 | |
| Westamerica Bancorporation | | | 278 | | | | 13,828 | |
| Greenhill & Company, Inc. | | | 275 | | | | 13,717 | |
| Janus Capital Group, Inc. | | | 1,559 | | | | 13,267 | |
| International Bancshares Corp. | | | 595 | | | | 12,870 | |
| Astoria Financial Corp. | | | 869 | | | | 10,810 | |
| Total Financials | | | | | | | 3,323,455 | |
| INFORMATION TECHNOLOGY - 12.4% | | | | | | | | |
| Alliance Data Systems Corp.* | | | 512 | | | | 108,272 | |
| Equinix, Inc.* | | | 510 | | | | 93,661 | |
| ANSYS, Inc.* | | | 967 | | | | 83,664 | |
| Trimble Navigation Ltd.* | | | 2,677 | | | | 79,534 | |
| Cree, Inc.* | | | 1,249 | | | | 75,177 | |
| NCR Corp.* | | | 1,725 | | | | 68,327 | |
| Rackspace Hosting, Inc.* | | | 1,189 | | | | 62,732 | |
| Synopsys, Inc.* | | | 1,608 | | | | 60,621 | |
| Avnet, Inc. | | | 1,428 | | | | 59,562 | |
| Gartner, Inc.* | | | 970 | | | | 58,201 | |
| Concur Technologies, Inc.* | | | 486 | | | | 53,703 | |
| 3D Systems Corp.* | | | 982 | | | | 53,018 | |
| Arrow Electronics, Inc.* | | | 1,044 | | | | 50,665 | |
| Skyworks Solutions, Inc.* | | | 1,959 | | | | 48,662 | |
| FactSet Research Systems, Inc. | | | 422 | | | | 46,040 | |
| Jack Henry & Associates, Inc. | | | 888 | | | | 45,830 | |
| Informatica Corp.* | | | 1,126 | | | | 43,880 | |
| TIBCO Software, Inc.* | | | 1,591 | | | | 40,714 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 53 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| MID-CAP 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| CommVault Systems, Inc.* | | | 458 | | | $ | 40,226 | |
| Global Payments, Inc. | | | 787 | | | | 40,199 | |
| Cadence Design Systems, Inc.* | | | 2,954 | | | | 39,879 | |
| MICROS Systems, Inc.* | | | 798 | | | | 39,852 | |
| Broadridge Financial Solutions, Inc. | | | 1,243 | | | | 39,465 | |
| Solera Holdings, Inc. | | | 722 | | | | 38,172 | |
| Ingram Micro, Inc. — Class A* | | | 1,596 | | | | 36,788 | |
| WEX, Inc.* | | | 406 | | | | 35,627 | |
| PTC, Inc.* | | | 1,245 | | | | 35,395 | |
| Leidos Holdings, Inc.* | | | 758 | | | | 34,481 | |
| NeuStar, Inc. — Class A* | | | 670 | | | | 33,152 | |
| Atmel Corp.* | | | 4,454 | | | | 33,138 | |
| National Instruments Corp. | | | 1,014 | | | | 31,363 | |
| Lender Processing Services, Inc. | | | 889 | | | | 29,577 | |
| AOL, Inc. | | | 804 | | | | 27,802 | |
| CoreLogic, Inc.* | | | 992 | | | | 26,834 | |
| Ciena Corp.* | | | 1,074 | | | | 26,828 | |
| VeriFone Systems, Inc.* | | | 1,135 | | | | 25,946 | |
| Compuware Corp. | | | 2,241 | | | | 25,099 | |
| Riverbed Technology, Inc.* | | | 1,713 | | | | 24,993 | |
| Advanced Micro Devices, Inc.* | | | 6,380 | | | | 24,244 | |
| Zebra Technologies Corp. — Class A* | | | 530 | | | | 24,131 | |
| SolarWinds, Inc.* | | | 684 | | | | 23,981 | |
| Mentor Graphics Corp. | | | 1,007 | | | | 23,534 | |
| DST Systems, Inc. | | | 311 | | | | 23,453 | |
| ACI Worldwide, Inc.* | | | 410 | | | | 22,165 | |
| Acxiom Corp.* | | | 771 | | | | 21,889 | |
| Lexmark International, Inc. — Class A | | | 654 | | | | 21,582 | |
| Semtech Corp.* | | | 710 | | | | 21,293 | |
| Plantronics, Inc. | | | 454 | | | | 20,907 | |
| Rovi Corp.* | | | 1,064 | | | | 20,397 | |
| Fair Isaac Corp. | | | 367 | | | | 20,288 | |
| Convergys Corp. | | | 1,081 | | | | 20,269 | |
| SunEdison, Inc.* | | | 2,514 | | | | 20,037 | |
| Diebold, Inc. | | | 669 | | | | 19,642 | |
| Tech Data Corp.* | | | 393 | | | | 19,615 | |
| Polycom, Inc.* | | | 1,767 | | | | 19,296 | |
| Fairchild Semiconductor International, Inc. — Class A* | | | 1,334 | | | | 18,529 | |
| International Rectifier Corp.* | | | 740 | | | | 18,330 | |
| Vishay Intertechnology, Inc.* | | | 1,380 | | | | 17,788 | |
| Silicon Laboratories, Inc.* | | | 409 | | | | 17,468 | |
| Itron, Inc.* | | | 406 | | | | 17,389 | |
| RF Micro Devices, Inc.* | | | 2,929 | | | | 16,520 | |
| ADTRAN, Inc. | | | 602 | | | | 16,037 | |
| InterDigital, Inc. | | | 427 | | | | 15,940 | |
| ValueClick, Inc.* | | | 727 | | | | 15,158 | |
| Intersil Corp. — Class A | | | 1,327 | | | | 14,902 | |
| Science Applications International Corp.* | | | 433 | | | | 14,609 | |
| Advent Software, Inc. | | | 429 | | | | 13,621 | |
| Integrated Device Technology, Inc.* | | | 1,421 | | | | 13,386 | |
| Cypress Semiconductor Corp. | | | 1,430 | | | | 13,356 | |
| ManTech International Corp. — Class A | | | 248 | | | | 7,132 | |
| Monster Worldwide, Inc.* | | | 1,177 | | | | 5,202 | |
| Total Information Technology | | | | | | | 2,399,169 | |
| INDUSTRIALS - 12.3% | | | | | | | | |
| B/E Aerospace, Inc.* | | | 1,026 | | | | 75,739 | |
| Fortune Brands Home & Security, Inc. | | | 1,734 | | | | 72,187 | |
| Towers Watson & Co. — Class A | | | 670 | | | | 71,663 | |
| J.B. Hunt Transport Services, Inc. | | | 954 | | | | 69,575 | |
| Wabtec Corp. | | | 1,000 | | | | 62,870 | |
| Hubbell, Inc. — Class B | | | 565 | | | | 59,178 | |
| Manpowergroup, Inc. | | | 811 | | | | 58,992 | |
| Waste Connections, Inc. | | | 1,291 | | | | 58,625 | |
| Lincoln Electric Holdings, Inc. | | | 858 | | | | 57,161 | |
| AGCO Corp. | | | 943 | | | | 56,976 | |
| United Rentals, Inc.* | | | 969 | | | | 56,483 | |
| IDEX Corp. | | | 853 | | | | 55,659 | |
| Donaldson Company, Inc. | | | 1,408 | | | | 53,687 | |
| Kirby Corp.* | | | 596 | | | | 51,584 | |
| KBR, Inc. | | | 1,543 | | | | 50,363 | |
| Timken Co. | | | 827 | | | | 49,951 | |
| Graco, Inc. | | | 640 | | | | 47,398 | |
| Carlisle Companies, Inc. | | | 663 | | | | 46,602 | |
| Nordson Corp. | | | 632 | | | | 46,534 | |
| Alaska Air Group, Inc. | | | 732 | | | | 45,838 | |
| Oshkosh Corp.* | | | 909 | | | | 44,523 | |
| URS Corp. | | | 785 | | | | 42,194 | |
| Genesee & Wyoming, Inc. — Class A* | | | 445 | | | | 41,372 | |
| Acuity Brands, Inc. | | | 443 | | | | 40,765 | |
| MSC Industrial Direct Company, Inc. — Class A | | | 501 | | | | 40,756 | |
| SPX Corp. | | | 472 | | | | 39,950 | |
| Valmont Industries, Inc. | | | 282 | | | | 39,173 | |
| Terex Corp.* | | | 1,159 | | | | 38,942 | |
| Triumph Group, Inc. | | | 539 | | | | 37,849 | |
| Trinity Industries, Inc. | | | 817 | | | | 37,051 | |
| Copart, Inc.* | | | 1,160 | | | | 36,876 | |
| Kennametal, Inc. | | | 807 | | | | 36,799 | |
| Lennox International, Inc. | | | 478 | | | | 35,974 | |
| Huntington Ingalls Industries, Inc. | | | 518 | | | | 34,913 | |
| ITT Corp. | | | 940 | | | | 33,793 | |
| Clean Harbors, Inc.* | | | 576 | | | | 33,788 | |
| AECOM Technology Corp.* | | | 1,048 | | | | 32,771 | |
| Alliant Techsystems, Inc. | | | 331 | | | | 32,292 | |
| Regal-Beloit Corp. | | | 471 | | | | 31,995 | |
| Crane Co. | | | 506 | | | | 31,205 | |
| Exelis, Inc. | | | 1,962 | | | | 30,823 | |
| RR Donnelley & Sons Co. | | | 1,893 | | | | 29,909 | |
| CLARCOR, Inc. | | | 523 | | | | 29,042 | |
| Landstar System, Inc. | | | 475 | | | | 26,591 | |
| Watsco, Inc. | | | 280 | | | | 26,396 | |
| Esterline Technologies Corp.* | | | 330 | | | | 26,364 | |
| Woodward, Inc. | | | 629 | | | | 25,682 | |
| Con-way, Inc. | | | 590 | | | | 25,423 | |
| Corporate Executive Board Co. | | | 347 | | | | 25,199 | |
| GATX Corp. | | | 480 | | | | 22,810 | |
| Deluxe Corp. | | | 527 | | | | 21,955 | |
| Harsco Corp. | | | 839 | | | | 20,891 | |
| Herman Miller, Inc. | | | 611 | | | | 17,830 | |
| Rollins, Inc. | | | 669 | | | | 17,735 | |
| 54 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| MID-CAP 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Mine Safety Appliances Co. | | | 330 | | | $ | 17,031 | |
| HNI Corp. | | | 469 | | | | 16,968 | |
| General Cable Corp. | | | 515 | | | | 16,351 | |
| FTI Consulting, Inc.* | | | 429 | | | | 16,216 | |
| JetBlue Airways Corp.* | | | 2,264 | | | | 15,078 | |
| UTI Worldwide, Inc. | | | 949 | | | | 14,339 | |
| Brink’s Co. | | | 506 | | | | 14,320 | |
| Matson, Inc. | | | 441 | | | | 11,567 | |
| Granite Construction, Inc. | | | 377 | | | | 11,536 | |
| Werner Enterprises, Inc. | | | 475 | | | | 11,082 | |
| Total Industrials | | | | | | | 2,381,184 | |
| CONSUMER DISCRETIONARY - 10.8% | | | | | | | | |
| LKQ Corp.* | | | 3,126 | | | | 99,594 | |
| Tractor Supply Co. | | | 1,462 | | | | 98,203 | |
| Polaris Industries, Inc. | | | 670 | | | | 86,551 | |
| Mohawk Industries, Inc.* | | | 639 | | | | 83,230 | |
| Under Armour, Inc. — Class A* | | | 834 | | | | 66,261 | |
| Hanesbrands, Inc. | | | 1,027 | | | | 63,992 | |
| Advance Auto Parts, Inc. | | | 755 | | | | 62,424 | |
| Signet Jewelers Ltd. | | | 843 | | | | 60,401 | |
| Jarden Corp.* | | | 1,234 | | | | 59,726 | |
| Dick’s Sporting Goods, Inc. | | | 1,063 | | | | 56,743 | |
| Foot Locker, Inc. | | | 1,543 | | | | 52,370 | |
| Williams-Sonoma, Inc. | | | 924 | | | | 51,929 | |
| Toll Brothers, Inc.* | | | 1,585 | | | | 51,402 | |
| Carter’s, Inc. | | | 621 | | | | 47,128 | |
| Tupperware Brands Corp. | | | 539 | | | | 46,553 | |
| Panera Bread Co. — Class A* | | | 291 | | | | 46,132 | |
| AMC Networks, Inc. — Class A* | | | 619 | | | | 42,389 | |
| Service Corporation International | | | 2,205 | | | | 41,057 | |
| NVR, Inc.* | | | 44 | | | | 40,444 | |
| Domino’s Pizza, Inc. | | | 576 | | | | 39,139 | |
| Gentex Corp. | | | 1,507 | | | | 38,564 | |
| Sotheby’s | | | 710 | | | | 34,882 | |
| Cinemark Holdings, Inc. | | | 1,078 | | | | 34,216 | |
| Lamar Advertising Co. — Class A* | | | 683 | | | | 32,121 | |
| Cabela’s, Inc.* | | | 490 | | | | 30,885 | |
| Bally Technologies, Inc.* | | | 402 | | | | 28,968 | |
| Brinker International, Inc. | | | 690 | | | | 27,966 | |
| Chico’s FAS, Inc. | | | 1,677 | | | | 27,939 | |
| Tempur Sealy International, Inc.* | | | 628 | | | | 27,607 | |
| Thor Industries, Inc. | | | 466 | | | | 27,047 | |
| Ascena Retail Group, Inc.* | | | 1,326 | | | | 26,427 | |
| Wendy’s Co. | | | 2,946 | | | | 24,982 | |
| American Eagle Outfitters, Inc. | | | 1,767 | | | | 24,720 | |
| Deckers Outdoor Corp.* | | | 361 | | | | 23,797 | |
| John Wiley & Sons, Inc. — Class A | | | 488 | | | | 23,272 | |
| Cheesecake Factory, Inc. | | | 514 | | | | 22,590 | |
| Big Lots, Inc.* | | | 604 | | | | 22,402 | |
| Aaron’s, Inc. | | | 787 | | | | 21,800 | |
| Apollo Group, Inc. — Class A* | | | 1,034 | | | | 21,517 | |
| Life Time Fitness, Inc.* | | | 414 | | | | 21,309 | |
| Rent-A-Center, Inc. — Class A | | | 558 | | | | 21,260 | |
| DreamWorks Animation SKG, Inc. — Class A* | | | 741 | | | | 21,089 | |
| CST Brands, Inc. | | | 635 | | | | 18,923 | |
| HSN, Inc. | | | 349 | | | | 18,713 | |
| Murphy USA, Inc.* | | | 462 | | | | 18,660 | |
| Guess?, Inc. | | | 619 | | | | 18,477 | |
| Meredith Corp. | | | 386 | | | | 18,381 | |
| DeVry, Inc. | | | 594 | | | | 18,153 | |
| ANN, Inc.* | | | 477 | | | | 17,277 | |
| Saks, Inc.* | | | 1,064 | | | | 16,960 | |
| New York Times Co. — Class A* | | | 1,312 | | | | 16,492 | |
| Bob Evans Farms, Inc. | | | 284 | | | | 16,265 | |
| KB Home | | | 866 | | | | 15,605 | |
| WMS Industries, Inc.* | | | 572 | | | | 14,843 | |
| MDC Holdings, Inc. | | | 408 | | | | 12,244 | |
| Office Depot, Inc.* | | | 2,497 | | | | 12,061 | |
| Valassis Communications, Inc. | | | 393 | | | | 11,350 | |
| Matthews International Corp. — Class A | | | 286 | | | | 10,891 | |
| International Speedway Corp. — Class A | | | 287 | | | | 9,270 | |
| Scientific Games Corp. — Class A* | | | 505 | | | | 8,166 | |
| Aeropostale, Inc.* | | | 821 | | | | 7,717 | |
| Scholastic Corp. | | | 267 | | | | 7,650 | |
| Regis Corp. | | | 454 | | | | 6,665 | |
| Total Consumer Discretionary | | | | | | | 2,075,791 | |
| HEALTH CARE - 6.8% | | | | | | | | |
| Henry Schein, Inc.* | | | 900 | | | | 93,330 | |
| ResMed, Inc. | | | 1,476 | | | | 77,963 | |
| Mettler-Toledo International, Inc.* | | | 308 | | | | 73,948 | |
| Universal Health Services, Inc. — Class B | | | 935 | | | | 70,115 | |
| Cooper Companies, Inc. | | | 510 | | | | 66,142 | |
| Omnicare, Inc. | | | 1,076 | | | | 59,718 | |
| Hologic, Inc.* | | | 2,817 | | | | 58,171 | |
| IDEXX Laboratories, Inc.* | | | 547 | | | | 54,509 | |
| Endo Health Solutions, Inc.* | | | 1,187 | | | | 53,938 | |
| MEDNAX, Inc.* | | | 529 | | | | 53,112 | |
| Covance, Inc.* | | | 583 | | | | 50,406 | |
| Cubist Pharmaceuticals, Inc.* | | | 689 | | | | 43,786 | |
| Salix Pharmaceuticals Ltd.* | | | 646 | | | | 43,204 | |
| Community Health Systems, Inc. | | | 983 | | | | 40,795 | |
| United Therapeutics Corp.* | | | 477 | | | | 37,611 | |
| Teleflex, Inc. | | | 426 | | | | 35,051 | |
| Health Management Associates, Inc. — Class A* | | | 2,710 | | | | 34,688 | |
| WellCare Health Plans, Inc.* | | | 458 | | | | 31,941 | |
| Techne Corp. | | | 345 | | | | 27,621 | |
| STERIS Corp. | | | 618 | | | | 26,549 | |
| Mallinckrodt plc* | | | 601 | | | | 26,498 | |
| Health Net, Inc.* | | | 828 | | | | 26,248 | |
| VCA Antech, Inc.* | | | 920 | | | | 25,263 | |
| Allscripts Healthcare Solutions, Inc.* | | | 1,651 | | | | 24,550 | |
| Bio-Rad Laboratories, Inc. — Class A* | | | 208 | | | | 24,452 | |
| Charles River Laboratories International, Inc.* | | | 516 | | | | 23,870 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 55 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| MID-CAP 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| LifePoint Hospitals, Inc.* | | | 495 | | | $ | 23,082 | |
| Owens & Minor, Inc. | | | 661 | | | | 22,864 | |
| Thoratec Corp.* | | | 600 | | | | 22,374 | |
| Hill-Rom Holdings, Inc. | | | 611 | | | | 21,892 | |
| HMS Holdings Corp.* | | | 920 | | | | 19,789 | |
| Masimo Corp. | | | 539 | | | | 14,359 | |
| Total Health Care | | | | | | | 1,307,839 | |
| Materials - 5.4% | | | | | | | | |
| Rock Tenn Co. — Class A | | | 748 | | | | 75,750 | |
| Ashland, Inc. | | | 752 | | | | 69,545 | |
| Packaging Corporation of America | | | 1,029 | | | | 58,746 | |
| Reliance Steel & Aluminum Co. | | | 798 | | | | 58,469 | |
| Albemarle Corp. | | | 849 | | | | 53,437 | |
| Valspar Corp. | | | 842 | | | | 53,408 | |
| RPM International, Inc. | | | 1,389 | | | | 50,282 | |
| Martin Marietta Materials, Inc. | | | 481 | | | | 47,219 | |
| Aptargroup, Inc. | | | 690 | | | | 41,490 | |
| Sonoco Products Co. | | | 1,047 | | | | 40,770 | |
| Steel Dynamics, Inc. | | | 2,305 | | | | 38,517 | |
| Eagle Materials, Inc. | | | 514 | | | | 37,291 | |
| NewMarket Corp. | | | 122 | | | | 35,125 | |
| Royal Gold, Inc. | | | 678 | | | | 32,991 | |
| Carpenter Technology Corp. | | | 553 | | | | 32,135 | |
| Cytec Industries, Inc. | | | 383 | | | | 31,161 | |
| Domtar Corp. | | | 340 | | | | 27,003 | |
| Compass Minerals International, Inc. | | | 346 | | | | 26,389 | |
| Cabot Corp. | | | 617 | | | | 26,352 | |
| Louisiana-Pacific Corp.* | | | 1,459 | | | | 25,664 | |
| Scotts Miracle-Gro Co. — Class A | | | 455 | | | | 25,038 | |
| Sensient Technologies Corp. | | | 521 | | | | 24,951 | |
| Silgan Holdings, Inc. | | | 456 | | | | 21,432 | |
| Commercial Metals Co. | | | 1,216 | | | | 20,611 | |
| Olin Corp. | | | 840 | | | | 19,379 | |
| Worthington Industries, Inc. | | | 552 | | | | 19,005 | |
| Minerals Technologies, Inc. | | | 360 | | | | 17,773 | |
| Greif, Inc. — Class A | | | 313 | | | | 15,346 | |
| Intrepid Potash, Inc. | | | 582 | | | | 9,126 | |
| Total Materials | | | | | | | 1,034,405 | |
| Energy - 4.4% | | | | | | | | |
| Oceaneering International, Inc. | | | 1,129 | | | | 91,720 | |
| HollyFrontier Corp. | | | 2,083 | | | | 87,715 | |
| Cimarex Energy Co. | | | 905 | | | | 87,243 | |
| Oil States International, Inc.* | | | 578 | | | | 59,800 | |
| Energen Corp. | | | 755 | | | | 57,674 | |
| SM Energy Co. | | | 695 | | | | 53,647 | |
| Dresser-Rand Group, Inc.* | | | 799 | | | | 49,858 | |
| Dril-Quip, Inc.* | | | 425 | | | | 48,769 | |
| Superior Energy Services, Inc.* | | | 1,659 | | | | 41,541 | |
| Rosetta Resources, Inc.* | | | 637 | | | | 34,691 | |
| Atwood Oceanics, Inc.* | | | 598 | | | | 32,914 | |
| Patterson-UTI Energy, Inc. | | | 1,539 | | | | 32,904 | |
| Tidewater, Inc. | | | 519 | | | | 30,772 | |
| World Fuel Services Corp. | | | 762 | | | | 28,430 | |
| Helix Energy Solutions Group, Inc.* | | | 1,028 | | | | 26,080 | |
| Unit Corp.* | | | 452 | | | | 21,013 | |
| CARBO Ceramics, Inc. | | | 209 | | | | 20,714 | |
| Alpha Natural Resources, Inc.* | | | 2,312 | | | | 13,779 | |
| Bill Barrett Corp.* | | | 504 | | | | 12,655 | |
| Arch Coal, Inc. | | | 2,208 | | | | 9,075 | |
| Total Energy | | | | | | | 840,994 | |
| Utilities - 3.8% | | | | | | | | |
| OGE Energy Corp. | | | 2,066 | | | | 74,562 | |
| National Fuel Gas Co. | | | 872 | | | | 59,959 | |
| N.V. Energy, Inc. | | | 2,454 | | | | 57,938 | |
| Alliant Energy Corp. | | | 1,158 | | | | 57,379 | |
| MDU Resources Group, Inc. | | | 1,967 | | | | 55,017 | |
| UGI Corp. | | | 1,186 | | | | 46,408 | |
| Aqua America, Inc. | | | 1,837 | | | | 45,429 | |
| Questar Corp. | | | 1,827 | | | | 41,089 | |
| Westar Energy, Inc. | | | 1,327 | | | | 40,673 | |
| Atmos Energy Corp. | | | 944 | | | | 40,205 | |
| Great Plains Energy, Inc. | | | 1,602 | | | | 35,564 | |
| Vectren Corp. | | | 854 | | | | 28,481 | |
| Cleco Corp. | | | 628 | | | | 28,160 | |
| Hawaiian Electric Industries, Inc. | | | 1,037 | | | | 26,029 | |
| IDACORP, Inc. | | | 522 | | | | 25,265 | |
| Black Hills Corp. | | | 469 | | | | 23,384 | |
| WGL Holdings, Inc. | | | 537 | | | | 22,935 | |
| PNM Resources, Inc. | | | 827 | | | | 18,715 | |
| Total Utilities | | | | | | | 727,192 | |
| Consumer Staples - 2.9% | | | | | | | | |
| Green Mountain Coffee Roasters, Inc.* | | | 1,367 | | | | 102,976 | |
| Church & Dwight Company, Inc. | | | 1,442 | | | | 86,592 | |
| Energizer Holdings, Inc. | | | 647 | | | | 58,974 | |
| Ingredion, Inc. | | | 809 | | | | 53,532 | |
| Hillshire Brands Co. | | | 1,283 | | | | 39,439 | |
| Flowers Foods, Inc. | | | 1,822 | | | | 39,064 | |
| WhiteWave Foods Co. — Class A* | | | 1,804 | | | | 36,026 | |
| United Natural Foods, Inc.* | | | 515 | | | | 34,618 | |
| Harris Teeter Supermarkets, Inc. | | | 515 | | | | 25,332 | |
| Dean Foods Co.* | | | 979 | | | | 18,895 | |
| SUPERVALU, Inc.* | | | 2,046 | | | | 16,839 | |
| Lancaster Colony Corp. | | | 202 | | | | 15,815 | |
| Post Holdings, Inc.* | | | 342 | | | | 13,807 | |
| Universal Corp. | | | 239 | | | | 12,172 | |
| Tootsie Roll Industries, Inc. | | | 211 | | | | 6,503 | |
| Total Consumer Staples | | | | | | | 560,584 | |
| Telecommunication Services - 0.4% | | | | | | | | |
| tw telecom, Inc. — Class A* | | | 1,517 | | | | 45,306 | |
| Telephone & Data Systems, Inc. | | | 1,026 | | | | 30,318 | |
| Total Telecommunication Services | | | | | | | 75,624 | |
| Total Common Stocks | | | | | | | | |
| (Cost $9,081,515) | | | | | | | 14,726,237 | |
| 56 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| MID-CAP 1.5x STRATEGY FUND |
| | | Face | | | | |
| | | Amount | | | Value | |
| REPURCHASE AGREEMENTS††,1 - 25.3% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 3,348,712 | | | $ | 3,348,712 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 860,076 | | | | 860,076 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 377,977 | | | | 377,977 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 294,959 | | | | 294,959 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $4,881,724) | | | | | | | 4,881,724 | |
| Total Investments - 101.7% | | | | | | | | |
| (Cost $13,963,239) | | | | | | $ | 19,607,961 | |
| Other Assets & Liabilities, net - (1.7)% | | | | | | | (326,883 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 19,281,078 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain (Loss) | |
| | | | | | | | | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 S&P MidCap 400 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $5,836,460) | | | 47 | | | $ | 41,754 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | Units | | | | | |
| EQUITY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 S&P MidCap 400 | | | | | | | | |
| Index Swap, Terminating 10/23/133 | | | | | | | | |
| (Notional Value $2,156,419) | | | 1,734 | | | $ | (481 | ) |
| Barclays Bank plc | | | | | | | | |
| October 2013 S&P MidCap 400 | | | | | | | | |
| Index Swap, Terminating 10/31/133 | | | | | | | | |
| (Notional Value $2,610,862) | | | 2,099 | | | | (566 | ) |
| Goldman Sachs International | | | | | | | | |
| October 2013 S&P MidCap 400 | | | | | | | | |
| Index Swap, Terminating 10/31/133 | | | | | | | | |
| (Notional Value $3,572,168) | | | 2,872 | | | | (13,836 | ) |
| (Total Notional Value $8,339,449) | | | | | | $ | (14,883 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Total Return based on S&P MidCap 400 Index +/- financing at a variable rate. |
| | plc — Public Limited Company |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 57 |
MID-CAP 1.5x STRATEGY FUND
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $9,081,515) | | $ | 14,726,237 | |
| Repurchase agreements, at value | | | | |
| (cost $4,881,724) | | | 4,881,724 | |
| Total investments | | | | |
| (cost $13,963,239) | | | 19,607,961 | |
| Segregated cash with broker | | | 571,500 | |
| Cash | | | 44,438 | |
| Receivables: | | | | |
| Fund shares sold | | | 17,016 | |
| Dividends | | | 13,481 | |
| Interest | | | 3 | |
| Total assets | | | 20,254,399 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 14,883 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 892,097 | |
| Management fees | | | 13,190 | |
| Distribution and service fees | | | 5,979 | |
| Swap settlement | | | 5,416 | |
| Transfer agent and administrative fees | | | 3,664 | |
| Variation margin | | | 1,880 | |
| Portfolio accounting fees | | | 1,466 | |
| Miscellaneous | | | 34,746 | |
| Total liabilities | | | 973,321 | |
| Net assets | | $ | 19,281,078 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 20,819,782 | |
| Accumulated net investment loss | | | (250,269 | ) |
| Accumulated net realized loss on investments | | | (6,960,028 | ) |
| Net unrealized appreciation on investments | | | 5,671,593 | |
| Net assets | | $ | 19,281,078 | |
| A-Class: | | | | |
| Net assets | | $ | 1,590,601 | |
| Capital shares outstanding | | | 31,650 | |
| Net asset value per share | | $ | 50.26 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 52.77 | |
| C-Class: | | | | |
| Net assets | | $ | 3,969,600 | |
| Capital shares outstanding | | | 87,207 | |
| Net asset value per share | | $ | 45.52 | |
| H-Class: | | | | |
| Net assets | | $ | 13,720,877 | |
| Capital shares outstanding | | | 272,708 | |
| Net asset value per share | | $ | 50.31 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends | | $ | 184,098 | |
| Interest | | | 990 | |
| Income from securities lending, net | | | 499 | |
| Total investment income | | | 185,587 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 144,397 | |
| Transfer agent and administrative fees | | | 40,110 | |
| Distribution and service fees: | | | | |
| A-Class | | | 1,980 | |
| C-Class | | | 20,462 | |
| H-Class | | | 33,015 | |
| Portfolio accounting fees | | | 16,044 | |
| Trustees’ fees* | | | 2,255 | |
| Custodian fees | | | 1,700 | |
| Miscellaneous | | | 24,485 | |
| Total expenses | | | 284,448 | |
| Net investment loss | | | (98,861 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 3,535,707 | |
| Swap agreements | | | (442,713 | ) |
| Futures contracts | | | 263,162 | |
| Net realized gain | | | 3,356,156 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (3,404,720 | ) |
| Swap agreements | | | (227,622 | ) |
| Futures contracts | | | (638,063 | ) |
| Net change in unrealized appreciation (depreciation) | | | (4,270,405 | ) |
| Net realized and unrealized loss | | | (914,249 | ) |
| Net decrease in net assets resulting from operations | | $ | (1,013,110 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 58 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
MID-CAP 1.5x STRATEGY FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (98,861 | ) | | $ | (182,679 | ) |
| Net realized gain on investments | | | 3,356,156 | | | | 8,380,359 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (4,270,405 | ) | | | 4,856,908 | |
| Net increase (decrease) in net assets resulting from operations | | | (1,013,110 | ) | | | 13,054,588 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 872,623 | | | | 6,093,533 | |
| C-Class | | | 1,627,974 | | | | 5,836,319 | |
| H-Class | | | 73,480,797 | | | | 306,913,190 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (1,609,157 | ) | | | (6,186,951 | ) |
| C-Class | | | (3,129,307 | ) | | | (6,337,463 | ) |
| H-Class | | | (115,321,505 | ) | | | (278,786,299 | ) |
| Net increase (decrease) from capital share transactions | | | (44,078,575 | ) | | | 27,532,329 | |
| Net increase (decrease) in net assets | | | (45,091,685 | ) | | | 40,586,917 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 64,372,763 | | | | 23,785,846 | |
| End of period | | $ | 19,281,078 | | | $ | 64,372,763 | |
| Accumulated net investment loss at end of period | | $ | (250,269 | ) | | $ | (151,408 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 18,282 | | | | 150,735 | |
| C-Class | | | 38,065 | | | | 171,185 | |
| H-Class | | | 1,557,198 | | | | 8,203,357 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (35,420 | ) | | | (157,070 | ) |
| C-Class | | | (75,498 | ) | | | (191,671 | ) |
| H-Class | | | (2,549,022 | ) | | | (7,406,790 | ) |
| Net increase (decrease) in shares | | | (1,046,395 | ) | | | 769,746 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 59 |
MID-CAP 1.5x STRATEGY FUND
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 45.07 | | | $ | 36.23 | | | $ | 37.14 | | | $ | 26.89 | | | $ | 13.33 | | | $ | 32.39 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.13 | ) | | | (.16 | ) | | | (.23 | ) | | | (.26 | ) | | | (.16 | ) | | | — | c |
| Net gain (loss) on investments (realized and unrealized) | | | 5.32 | | | | 9.00 | | | | (.68 | ) | | | 10.51 | | | | 13.72 | | | | (17.74 | ) |
| Total from investment operations | | | 5.19 | | | | 8.84 | | | | (.91 | ) | | | 10.25 | | | | 13.56 | | | | (17.74 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.32 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.32 | ) |
| Net asset value, end of period | | $ | 50.26 | | | $ | 45.07 | | | $ | 36.23 | | | $ | 37.14 | | | $ | 26.89 | | | $ | 13.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.52 | % | | | 24.40 | % | | | (2.45 | %) | | | 38.12 | % | | | 101.73 | % | | | (54.70 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,591 | | | $ | 2,199 | | | $ | 1,997 | | | $ | 1,877 | | | $ | 1,567 | | | $ | 1,080 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.55 | %) | | | (0.43 | %) | | | (0.68 | %) | | | (0.88 | %) | | | (0.79 | %) | | | 0.01 | % |
| Total expenses | | | 1.68 | % | | | 1.66 | % | | | 1.66 | % | | | 1.70 | % | | | 1.69 | % | | | 1.68 | % |
| Portfolio turnover rate | | | 64 | % | | | 447 | % | | | 141 | % | | | 211 | % | | | 219 | % | | | 204 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 40.97 | | | $ | 33.18 | | | $ | 34.26 | | | $ | 24.98 | | | $ | 12.47 | | | $ | 30.73 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.28 | ) | | | (.41 | ) | | | (.43 | ) | | | (.43 | ) | | | (.27 | ) | | | (.17 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.83 | | | | 8.20 | | | | (.65 | ) | | | 9.71 | | | | 12.78 | | | | (16.77 | ) |
| Total from investment operations | | | 4.55 | | | | 7.79 | | | | (1.08 | ) | | | 9.28 | | | | 12.51 | | | | (16.94 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.32 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.32 | ) |
| Net asset value, end of period | | $ | 45.52 | | | $ | 40.97 | | | $ | 33.18 | | | $ | 34.26 | | | $ | 24.98 | | | $ | 12.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.11 | % | | | 23.48 | % | | | (3.15 | %) | | | 37.15 | % | | | 100.32 | % | | | (55.06 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,970 | | | $ | 5,107 | | | $ | 4,815 | | | $ | 6,045 | | | $ | 4,069 | | | $ | 2,954 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.30 | %) | | | (1.23 | %) | | | (1.42 | %) | | | (1.59 | %) | | | (1.43 | %) | | | (0.72 | %) |
| Total expenses | | | 2.43 | % | | | 2.40 | % | | | 2.41 | % | | | 2.44 | % | | | 2.44 | % | | | 2.43 | % |
| Portfolio turnover rate | | | 64 | % | | | 447 | % | | | 141 | % | | | 211 | % | | | 219 | % | | | 204 | % |
| 60 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
MID-CAP 1.5x STRATEGY FUND
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 45.13 | | | $ | 36.27 | | | $ | 37.12 | | | $ | 26.89 | | | $ | 13.33 | | | $ | 32.40 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.12 | ) | | | (.15 | ) | | | (.24 | ) | | | (.28 | ) | | | (.15 | ) | | | .01 | |
| Net gain (loss) on investments (realized and unrealized) | | | 5.30 | | | | 9.01 | | | | (.61 | ) | | | 10.51 | | | | 13.71 | | | | (17.76 | ) |
| Total from investment operations | | | 5.18 | | | | 8.86 | | | | (.85 | ) | | | 10.23 | | | | 13.56 | | | | (17.75 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.32 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.32 | ) |
| Net asset value, end of period | | $ | 50.31 | | | $ | 45.13 | | | $ | 36.27 | | | $ | 37.12 | | | $ | 26.89 | | | $ | 13.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 11.48 | % | | | 24.43 | % | | | (2.29 | %) | | | 38.04 | % | | | 101.73 | % | | | (54.71 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 13,721 | | | $ | 57,067 | | | $ | 16,974 | | | $ | 42,647 | | | $ | 30,825 | | | $ | 11,063 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.51 | %) | | | (0.41 | %) | | | (0.72 | %) | | | (0.91 | %) | | | (0.73 | %) | | | 0.06 | % |
| Total expenses | | | 1.68 | % | | | 1.67 | % | | | 1.66 | % | | | 1.70 | % | | | 1.68 | % | | | 1.68 | % |
| Portfolio turnover rate | | | 64 | % | | | 447 | % | | | 141 | % | | | 211 | % | | | 219 | % | | | 204 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 61 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE MID-CAP STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is the inverse (opposite) of the performance of the S&P MidCap 400 Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | March 31, 2004 |
| C-Class | February 20, 2004 |
| H-Class | February 20, 2004 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| 62 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE MID-CAP STRATEGY FUND |
| | | Face | | | | |
| | | Amount | | | Value | |
| REPURCHASE AGREEMENTS††,1 - 94.7% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 3,129,304 | | | $ | 3,129,304 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 415,860 | | | | 415,860 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 353,212 | | | | 353,212 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 275,634 | | | | 275,634 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $4,174,010) | | | | | | | 4,174,010 | |
| Total Investments - 94.7% | | | | | | | | |
| (Cost $4,174,010) | | | | | | $ | 4,174,010 | |
| Other Assets & Liabilities, net - 5.3% | | | | | | | 231,741 | |
| Total Net Assets - 100.0% | | | | | | $ | 4,405,751 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain (Loss) | |
| EQUITY FUTURES CONTRACTS SOLD SHORT† | | | | | | | | |
| December 2013 S&P MidCap 400 Index | | | | | | | | |
| Mini Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $2,111,060) | | | 17 | | | $ | (14,689 | ) |
| | | | | | | | | |
| | | | Units | | | | | |
| EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | | | | |
| Goldman Sachs International | | | | | | | | |
| October 2013 S&P MidCap 400 | | | | | | | | |
| Index Swap, Terminating 10/31/133 | | | | | | | | |
| (Notional Value $1,661,041) | | | 1,335 | | | $ | 6,371 | |
| Barclays Bank plc | | | | | | | | |
| October 2013 S&P MidCap 400 | | | | | | | | |
| Index Swap, Terminating 10/31/133 | | | | | | | | |
| (Notional Value $292,047) | | | 235 | | | | 62 | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 S&P MidCap 400 | | | | | | | | |
| Index Swap, Terminating 10/23/133 | | | | | | | | |
| (Notional Value $274,303) | | | 221 | | | | 61 | |
| (Total Notional Value $2,227,391) | | | | | | $ | 6,494 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Total Return based on S&P MidCap 400 Index +/- financing at a variable rate. |
| | plc — Public Limited Company |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 63 |
INVERSE MID-CAP STRATEGY FUND
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $4,174,010) | | $ | 4,174,010 | |
| Segregated cash with broker | | | 156,500 | |
| Unrealized appreciation on swap agreements | | | 6,494 | |
| Receivables: | | | | |
| Fund shares sold | | | 75,231 | |
| Variation margin | | | 680 | |
| Interest | | | 2 | |
| Total assets | | | 4,412,917 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Management fees | | | 2,830 | |
| Distribution and service fees | | | 904 | |
| Transfer agent and administrative fees | | | 786 | |
| Portfolio accounting fees | | | 314 | |
| Fund shares redeemed | | | 29 | |
| Miscellaneous | | | 2,303 | |
| Total liabilities | | | 7,166 | |
| Net assets | | $ | 4,405,751 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 20,746,043 | |
| Accumulated net investment loss | | | (44,125 | ) |
| Accumulated net realized loss on investments | | | (16,287,972 | ) |
| Net unrealized depreciation on investments | | | (8,195 | ) |
| Net assets | | $ | 4,405,751 | |
| A-Class: | | | | |
| Net assets | | $ | 59,612 | |
| Capital shares outstanding | | | 4,438 | |
| Net asset value per share | | $ | 13.43 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 14.10 | |
| C-Class: | | | | |
| Net assets | | $ | 201,127 | |
| Capital shares outstanding | | | 16,178 | |
| Net asset value per share | | $ | 12.43 | |
| H-Class: | | | | |
| Net assets | | $ | 4,145,012 | |
| Capital shares outstanding | | | 309,092 | |
| Net asset value per share | | $ | 13.41 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | |
| Interest | | $ | 472 | |
| Total investment income | | | 472 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 17,516 | |
| Transfer agent and administrative fees | | | 4,866 | |
| Distribution and service fees: | | | | |
| A-Class | | | 34 | |
| C-Class | | | 1,165 | |
| H-Class | | | 4,540 | |
| Portfolio accounting fees | | | 1,946 | |
| Custodian fees | | | 219 | |
| Trustees’ fees* | | | 206 | |
| Miscellaneous | | | 2,979 | |
| Total expenses | | | 33,471 | |
| Net investment loss | | | (32,999 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Swap agreements | | | (301,357 | ) |
| Futures contracts | | | (133,133 | ) |
| Net realized loss | | | (434,490 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Swap agreements | | | 11,993 | |
| Futures contracts | | | 14,801 | |
| Net change in unrealized appreciation (depreciation) | | | 26,794 | |
| Net realized and unrealized loss | | | (407,696 | ) |
| Net decrease in net assets resulting from operations | | $ | (440,695 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 64 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
INVERSE MID-CAP STRATEGY FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (32,999 | ) | | $ | (62,762 | ) |
| Net realized loss on investments | | | (434,490 | ) | | | (835,742 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 26,794 | | | | (40,001 | ) |
| Net decrease in net assets resulting from operations | | | (440,695 | ) | | | (938,505 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 164,879 | | | | 25,409 | |
| C-Class | | | 438,785 | | | | 2,334,604 | |
| H-Class | | | 19,141,989 | | | | 37,209,370 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (126,048 | ) | | | (107,844 | ) |
| C-Class | | | (420,944 | ) | | | (2,099,321 | ) |
| H-Class | | | (16,002,176 | ) | | | (36,588,355 | ) |
| Net increase from capital share transactions | | | 3,196,485 | | | | 773,863 | |
| Net increase (decrease) in net assets | | | 2,755,790 | | | | (164,642 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 1,649,961 | | | | 1,814,603 | |
| End of period | | $ | 4,405,751 | | | $ | 1,649,961 | |
| Accumulated net investment loss at end of period | | $ | (44,125 | ) | | $ | (11,126 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 11,335 | | | | 1,477 | |
| C-Class | | | 32,978 | | | | 134,348 | |
| H-Class | | | 1,335,810 | | | | 2,062,719 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (8,613 | ) | | | (6,103 | ) |
| C-Class | | | (32,386 | ) | | | (125,849 | ) |
| H-Class | | | (1,121,514 | ) | | | (2,054,688 | ) |
| Net increase in shares | | | 217,610 | | | | 11,904 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 65 |
| INVERSE MID-CAP STRATEGY FUND |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.88 | | | $ | 18.21 | | | $ | 20.38 | | | $ | 27.37 | | | $ | 48.21 | | | $ | 37.07 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.12 | ) | | | (.28 | ) | | | (.34 | ) | | | (.39 | ) | | | (.52 | ) | | | (.22 | ) |
| Net gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| (realized and unrealized) | | | (1.33 | ) | | | (3.05 | ) | | | (1.83 | ) | | | (6.60 | ) | | | (20.32 | ) | | | 11.40 | |
| Total from investment operations | | | (1.45 | ) | | | (3.33 | ) | | | (2.17 | ) | | | (6.99 | ) | | | (20.84 | ) | | | 11.18 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.04 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.04 | ) |
| Net asset value, end of period | | $ | 13.43 | | | $ | 14.88 | | | $ | 18.21 | | | $ | 20.38 | | | $ | 27.37 | | | $ | 48.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.74 | %) | | | (18.29 | %) | | | (10.65 | %) | | | (25.54 | %) | | | (43.23 | %) | | | 30.14 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 60 | | | $ | 26 | | | $ | 115 | | | $ | 268 | | | $ | 733 | | | $ | 452 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.65 | %) | | | (1.52 | %) | | | (1.63 | %) | | | (1.54 | %) | | | (1.56 | %) | | | (0.55 | %) |
| Total expenses | | | 1.67 | % | | | 1.64 | % | | | 1.66 | % | | | 1.69 | % | | | 1.69 | % | | | 1.68 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.83 | | | $ | 17.06 | | | $ | 19.24 | | | $ | 26.03 | | | $ | 46.24 | | | $ | 35.82 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.16 | ) | | | (.38 | ) | | | (.48 | ) | | | (.55 | ) | | | (.75 | ) | | | (.41 | ) |
| Net gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| (realized and unrealized) | | | (1.24 | ) | | | (2.85 | ) | | | (1.70 | ) | | | (6.24 | ) | | | (19.46 | ) | | | 10.87 | |
| Total from investment operations | | | (1.40 | ) | | | (3.23 | ) | | | (2.18 | ) | | | (6.79 | ) | | | (20.21 | ) | | | 10.46 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.04 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.04 | ) |
| Net asset value, end of period | | $ | 12.43 | | | $ | 13.83 | | | $ | 17.06 | | | $ | 19.24 | | | $ | 26.03 | | | $ | 46.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (10.12 | %) | | | (18.93 | %) | | | (11.33 | %) | | | (26.09 | %) | | | (43.71 | %) | | | 29.18 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 201 | | | $ | 216 | | | $ | 121 | | | $ | 337 | | | $ | 268 | | | $ | 327 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.40 | %) | | | (2.29 | %) | | | (2.39 | %) | | | (2.29 | %) | | | (2.30 | %) | | | (1.07 | %) |
| Total expenses | | | 2.43 | % | | | 2.40 | % | | | 2.42 | % | | | 2.44 | % | | | 2.43 | % | | | 2.43 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| 66 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| INVERSE MID-CAP STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.86 | | | $ | 18.19 | | | $ | 20.36 | | | $ | 27.35 | | | $ | 48.21 | | | $ | 37.07 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.12 | ) | | | (.27 | ) | | | (.35 | ) | | | (.40 | ) | | | (.55 | ) | | | (.27 | ) |
| Net gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| (realized and unrealized) | | | (1.33 | ) | | | (3.06 | ) | | | (1.82 | ) | | | (6.59 | ) | | | (20.31 | ) | | | 11.45 | |
| Total from investment operations | | | (1.45 | ) | | | (3.33 | ) | | | (2.17 | ) | | | (6.99 | ) | | | (20.86 | ) | | | 11.18 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.04 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.04 | ) |
| Net asset value, end of period | | $ | 13.41 | | | $ | 14.86 | | | $ | 18.19 | | | $ | 20.36 | | | $ | 27.35 | | | $ | 48.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.76 | %) | | | (18.31 | %) | | | (10.66 | %) | | | (25.56 | %) | | | (43.27 | %) | | | 30.14 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,145 | | | $ | 1,409 | | | $ | 1,578 | | | $ | 1,845 | | | $ | 2,891 | | | $ | 7,350 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.65 | %) | | | (1.53 | %) | | | (1.64 | %) | | | (1.53 | %) | | | (1.55 | %) | | | (0.62 | %) |
| Total expenses | | | 1.67 | % | | | 1.65 | % | | | 1.67 | % | | | 1.69 | % | | | 1.68 | % | | | 1.70 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| See Notes to Financial Statements. | the RYDEX FUNDS SEMI-ANNUAL REPORT | 67 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
RUSSELL 2000® 1.5x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of a specific benchmark for small-cap securities on a daily basis. The Fund’s current benchmark is 150% of the performance of the Russell 2000® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | March 31, 2004 |
| C-Class | | January 23, 2001 |
| H-Class | | November 1, 2000 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| CoStar Group, Inc. | | | 0.2 | % |
| Isis Pharmaceuticals, Inc. | | | 0.2 | % |
| CommVault Systems, Inc. | | | 0.2 | % |
| Acuity Brands, Inc. | | | 0.2 | % |
| Ultimate Software Group, Inc. | | | 0.2 | % |
| athenahealth, Inc. | | | 0.2 | % |
| Middleby Corp. | | | 0.2 | % |
| Chart Industries, Inc. | | | 0.2 | % |
| Prosperity Bancshares, Inc. | | | 0.2 | % |
| Alnylam Pharmaceuticals, Inc. | | | 0.2 | % |
| Top Ten Total | | | 2.0 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 68 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | | | |
| COMMON STOCKS† - 72.3% | | | | | | | | |
| | | | | | | | | |
| Financials - 16.3% | | | | | | | | |
| Prosperity Bancshares, Inc. | | | 984 | | | $ | 60,850 | |
| FirstMerit Corp. | | | 2,724 | | | | 59,137 | |
| CNO Financial Group, Inc. | | | 3,639 | | | | 52,403 | |
| Highwoods Properties, Inc. | | | 1,461 | | | | 51,587 | |
| Portfolio Recovery Associates, Inc.* | | | 829 | | | | 49,691 | |
| RLJ Lodging Trust | | | 2,034 | | | | 47,778 | |
| Financial Engines, Inc. | | | 793 | | | | 47,136 | |
| Prospect Capital Corp. | | | 4,215 | | | | 47,124 | |
| LaSalle Hotel Properties | | | 1,559 | | | | 44,462 | |
| Hancock Holding Co. | | | 1,389 | | | | 43,586 | |
| Stifel Financial Corp.* | | | 1,051 | | | | 43,322 | |
| First American Financial Corp. | | | 1,779 | | | | 43,318 | |
| Radian Group, Inc. | | | 2,831 | | | | 39,435 | |
| CubeSmart | | | 2,177 | | | | 38,838 | |
| MGIC Investment Corp.* | | | 5,320 | | | | 38,730 | |
| Sovran Self Storage, Inc. | | | 511 | | | | 38,672 | |
| Geo Group, Inc. | | | 1,163 | | | | 38,670 | |
| Chambers Street Properties | | | 4,380 | | | | 38,457 | |
| Susquehanna Bancshares, Inc. | | | 3,053 | | | | 38,314 | |
| EPR Properties | | | 785 | | | | 38,261 | |
| MarketAxess Holdings, Inc. | | | 627 | | | | 37,645 | |
| Primerica, Inc. | | | 933 | | | | 37,637 | |
| Webster Financial Corp. | | | 1,468 | | | | 37,477 | |
| NorthStar Realty Finance Corp. | | | 3,882 | | | | 36,024 | |
| Healthcare Realty Trust, Inc. | | | 1,555 | | | | 35,936 | |
| Enstar Group Ltd.* | | | 258 | | | | 35,242 | |
| DCT Industrial Trust, Inc. | | | 4,764 | | | | 34,252 | |
| DiamondRock Hospitality Co. | | | 3,200 | | | | 34,144 | |
| Sunstone Hotel Investors, Inc. | | | 2,669 | | | | 34,003 | |
| Invesco Mortgage Capital, Inc. | | | 2,207 | | | | 33,965 | |
| Colonial Properties Trust | | | 1,458 | | | | 32,790 | |
| Medical Properties Trust, Inc. | | | 2,616 | | | | 31,837 | |
| Lexington Realty Trust | | | 2,778 | | | | 31,197 | |
| BancorpSouth, Inc. | | | 1,557 | | | | 31,046 | |
| American Realty Capital Properties, Inc. | | | 2,540 | | | | 30,988 | |
| Platinum Underwriters Holdings Ltd. | | | 516 | | | | 30,821 | |
| First Financial Bankshares, Inc. | | | 523 | | | | 30,762 | |
| RLI Corp. | | | 349 | | | | 30,509 | |
| Texas Capital Bancshares, Inc.* | | | 661 | | | | 30,385 | |
| Capitol Federal Financial, Inc. | | | 2,437 | | | | 30,292 | |
| Cathay General Bancorp | | | 1,292 | | | | 30,193 | |
| Apollo Investment Corp. | | | 3,669 | | | | 29,902 | |
| Umpqua Holdings Corp. | | | 1,838 | | | | 29,811 | |
| EastGroup Properties, Inc. | | | 494 | | | | 29,250 | |
| Glacier Bancorp, Inc. | | | 1,180 | | | | 29,158 | |
| First Industrial Realty Trust, Inc. | | | 1,781 | | | | 28,977 | |
| FNB Corp. | | | 2,381 | | | | 28,882 | |
| Pebblebrook Hotel Trust | | | 1,001 | | | | 28,739 | |
| UMB Financial Corp. | | | 526 | | | | 28,583 | |
| Trustmark Corp. | | | 1,105 | | | | 28,288 | |
| Cousins Properties, Inc. | | | 2,723 | | | | 28,020 | |
| First Cash Financial Services, Inc.* | | | 477 | | | | 27,642 | |
| New Residential Investment Corp. | | | 4,160 | | | | 27,539 | |
| Washington Real Estate Investment Trust | | | 1,077 | | | | 27,216 | |
| American Equity Investment Life Holding Co. | | | 1,264 | | | | 26,822 | |
| DuPont Fabros Technology, Inc. | | | 1,026 | | | | 26,440 | |
| Redwood Trust, Inc. | | | 1,341 | | | | 26,404 | |
| Potlatch Corp. | | | 657 | | | | 26,070 | |
| PennyMac Mortgage Investment Trust | | | 1,144 | | | | 25,946 | |
| Strategic Hotels & Resorts, Inc.* | | | 2,975 | | | | 25,823 | |
| ARMOUR Residential REIT, Inc. | | | 6,128 | | | | 25,738 | |
| Evercore Partners, Inc. — Class A | | | 522 | | | | 25,698 | |
| Home Loan Servicing Solutions Ltd. | | | 1,151 | | | | 25,334 | |
| MB Financial, Inc. | | | 891 | | | | 25,162 | |
| IBERIABANK Corp. | | | 485 | | | | 25,157 | |
| Alexander & Baldwin, Inc.* | | | 698 | | | | 25,142 | |
| Ryman Hospitality Properties, Inc. | | | 725 | | | | 25,020 | |
| Wintrust Financial Corp. | | | 605 | | | | 24,847 | |
| Sun Communities, Inc. | | | 577 | | | | 24,591 | |
| Bank of the Ozarks, Inc. | | | 509 | | | | 24,427 | |
| Symetra Financial Corp. | | | 1,344 | | | | 23,950 | |
| United Bankshares, Inc.1 | | | 825 | | | | 23,909 | |
| Walter Investment Management Corp.* | | | 603 | | | | 23,843 | |
| Old National Bancorp | | | 1,669 | | | | 23,700 | |
| CYS Investments, Inc. | | | 2,857 | | | | 23,227 | |
| Western Alliance Bancorporation* | | | 1,217 | | | | 23,038 | |
| Glimcher Realty Trust | | | 2,361 | | | | 23,020 | |
| National Health Investors, Inc. | | | 399 | | | | 22,699 | |
| PS Business Parks, Inc. | | | 304 | | | | 22,684 | |
| Home BancShares, Inc. | | | 746 | | | | 22,656 | |
| Greenhill & Company, Inc. | | | 453 | | | | 22,596 | |
| Selective Insurance Group, Inc. | | | 922 | | | | 22,588 | |
| PrivateBancorp, Inc. — Class A | | | 1,053 | | | | 22,534 | |
| PHH Corp.* | | | 946 | | | | 22,458 | |
| Acadia Realty Trust | | | 906 | | | | 22,360 | |
| Community Bank System, Inc. | | | 650 | | | | 22,178 | |
| Westamerica Bancorporation | | | 441 | | | | 21,935 | |
| First Financial Holdings, Inc. | | | 395 | | | | 21,788 | |
| PacWest Bancorp | | | 628 | | | | 21,578 | |
| LTC Properties, Inc. | | | 567 | | | | 21,535 | |
| Equity One, Inc. | | | 981 | | | | 21,445 | |
| Government Properties Income Trust | | | 895 | | | | 21,417 | |
| Colony Financial, Inc. | | | 1,068 | | | | 21,339 | |
| Montpelier Re Holdings Ltd. | | | 814 | | | | 21,205 | |
| Pennsylvania Real Estate Investment Trust | | | 1,111 | | | | 20,776 | |
| Janus Capital Group, Inc. | | | 2,440 | | | | 20,764 | |
| Cash America International, Inc. | | | 458 | | | | 20,738 | |
| Columbia Banking System, Inc. | | | 835 | | | | 20,625 | |
| Fifth Street Finance Corp. | | | 1,990 | | | | 20,477 | |
| CVB Financial Corp. | | | 1,507 | | | | 20,375 | |
| Northwest Bancshares, Inc. | | | 1,535 | | | | 20,293 | |
| EverBank Financial Corp. | | | 1,319 | | | | 19,759 | |
| Amtrust Financial Services, Inc. | | | 504 | | | | 19,686 | |
| National Penn Bancshares, Inc. | | | 1,914 | | | | 19,236 | |
| WisdomTree Investments, Inc.* | | | 1,648 | | | | 19,133 | |
| Main Street Capital Corp. | | | 638 | | | | 19,095 | |
| Argo Group International Holdings Ltd. | | | 444 | | | | 19,039 | |
| Chesapeake Lodging Trust | | | 808 | | | | 19,020 | |
| Hilltop Holdings, Inc.* | | | 1,019 | | | | 18,852 | |
| American Capital Mortgage | | | | | | | | |
| Investment Corp. | | | 954 | | | | 18,851 | |
| See Notes to Financial Statements. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 69 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| International Bancshares Corp. | | | 870 | | | $ | 18,818 | |
| Franklin Street Properties Corp. | | | 1,472 | | | | 18,753 | |
| Hersha Hospitality Trust — Class A | | | 3,317 | | | | 18,542 | |
| First Midwest Bancorp, Inc. | | | 1,225 | | | | 18,510 | |
| Encore Capital Group, Inc.* | | | 403 | | | | 18,482 | |
| Capstead Mortgage Corp. | | | 1,569 | | | | 18,467 | |
| Horace Mann Educators Corp. | | | 645 | | | | 18,305 | |
| Astoria Financial Corp. | | | 1,444 | | | | 17,963 | |
| Investors Bancorp, Inc. | | | 818 | | | | 17,898 | |
| BBCN Bancorp, Inc. | | | 1,284 | | | | 17,668 | |
| National Bank Holdings Corp. — Class A | | | 855 | | | | 17,562 | |
| Pinnacle Financial Partners, Inc.* | | | 575 | | | | 17,141 | |
| Education Realty Trust, Inc. | | | 1,859 | | | | 16,917 | |
| American Assets Trust, Inc. | | | 554 | | | | 16,903 | |
| iStar Financial, Inc.* | | | 1,402 | | | | 16,880 | |
| NBT Bancorp, Inc. | | | 724 | | | | 16,638 | |
| Solar Capital Ltd. | | | 735 | | | | 16,295 | |
| Retail Opportunity Investments Corp. | | | 1,166 | | | | 16,114 | |
| Kennedy-Wilson Holdings, Inc. | | | 860 | | | | 15,962 | |
| Sterling Financial Corp. | | | 555 | | | | 15,901 | |
| Provident Financial Services, Inc. | | | 975 | | | | 15,805 | |
| Hercules Technology Growth Capital, Inc. | | | 1,003 | | | | 15,296 | |
| Park National Corp. | | | 193 | | | | 15,262 | |
| Ramco-Gershenson Properties Trust | | | 985 | | | | 15,179 | |
| Virtus Investment Partners, Inc.* | | | 93 | | | | 15,126 | |
| Employers Holdings, Inc. | | | 504 | | | | 14,989 | |
| First Financial Bancorp | | | 957 | | | | 14,518 | |
| Boston Private Financial Holdings, Inc. | | | 1,305 | | | | 14,486 | |
| Nelnet, Inc. — Class A | | | 373 | | | | 14,342 | |
| World Acceptance Corp.* | | | 159 | | | | 14,297 | |
| Inland Real Estate Corp. | | | 1,395 | | | | 14,271 | |
| EZCORP, Inc. — Class A* | | | 838 | | | | 14,145 | |
| Credit Acceptance Corp.* | | | 127 | | | | 14,073 | |
| Sabra Health Care REIT, Inc. | | | 610 | | | | 14,036 | |
| Associated Estates Realty Corp. | | | 935 | | | | 13,941 | |
| KCG Holdings, Inc. — Class A* | | | 1,605 | | | | 13,915 | |
| Hudson Pacific Properties, Inc. | | | 710 | | | | 13,810 | |
| Investors Real Estate Trust | | | 1,662 | | | | 13,712 | |
| STAG Industrial, Inc. | | | 680 | | | | 13,682 | |
| HFF, Inc. — Class A | | | 546 | | | | 13,678 | |
| ViewPoint Financial Group, Inc. | | | 659 | | | | 13,622 | |
| Ambac Financial Group, Inc.* | | | 740 | | | | 13,424 | |
| Renasant Corp. | | | 493 | | | | 13,395 | |
| Independent Bank Corp. | | | 373 | | | | 13,316 | |
| Triangle Capital Corp. | | | 453 | | | | 13,305 | |
| Greenlight Capital Re Ltd. — Class A* | | | 463 | | | | 13,168 | |
| BofI Holding, Inc.* | | | 201 | | | | 13,037 | |
| WesBanco, Inc. | | | 428 | | | | 12,724 | |
| Parkway Properties, Inc. | | | 714 | | | | 12,688 | |
| FelCor Lodging Trust, Inc.* | | | 2,030 | | | | 12,505 | |
| Infinity Property & Casualty Corp. | | | 193 | | | | 12,468 | |
| Resource Capital Corp. | | | 2,093 | | | | 12,432 | |
| Chemical Financial Corp. | | | 443 | | | | 12,369 | |
| Ashford Hospitality Trust, Inc. | | | 1,001 | | | | 12,352 | |
| CapLease, Inc. | | | 1,452 | | | | 12,327 | |
| PennantPark Investment Corp. | | | 1,094 | | | | 12,318 | |
| Banner Corp. | | | 322 | | | | 12,288 | |
| Forestar Group, Inc.* | | | 566 | | | | 12,186 | |
| Oritani Financial Corp. | | | 740 | | | | 12,180 | |
| First Commonwealth Financial Corp. | | | 1,597 | | | | 12,121 | |
| First Potomac Realty Trust | | | 958 | | | | 12,042 | |
| OFG Bancorp | | | 741 | | | | 11,997 | |
| S&T Bancorp, Inc. | | | 495 | | | | 11,989 | |
| Banco Latinoamericano de Comercio | | | | | | | | |
| Exterior S.A. — Class E | | | 479 | | | | 11,937 | |
| CoreSite Realty Corp. | | | 351 | | | | 11,913 | |
| FXCM, Inc. — Class A | | | 599 | | | | 11,830 | |
| BGC Partners, Inc. — Class A | | | 2,089 | | | | 11,803 | |
| BlackRock Kelso Capital Corp. | | | 1,221 | | | | 11,587 | |
| Northfield Bancorp, Inc. | | | 954 | | | | 11,582 | |
| Anworth Mortgage Asset Corp. | | | 2,378 | | | | 11,486 | |
| Campus Crest Communities, Inc. | | | 1,058 | | | | 11,426 | |
| City Holding Co. | | | 264 | | | | 11,415 | |
| Safety Insurance Group, Inc. | | | 211 | | | | 11,177 | |
| Stewart Information Services Corp. | | | 349 | | | | 11,165 | |
| Green Dot Corp. — Class A* | | | 420 | | | | 11,059 | |
| Tompkins Financial Corp. | | | 239 | | | | 11,047 | |
| eHealth, Inc.* | | | 342 | | | | 11,033 | |
| Cohen & Steers, Inc. | | | 312 | | | | 11,017 | |
| Piper Jaffray Cos.* | | | 319 | | | | 10,939 | |
| United Community Banks, Inc.* | | | 716 | | | | 10,740 | |
| Brookline Bancorp, Inc. | | | 1,141 | | | | 10,737 | |
| United Fire Group, Inc. | | | 348 | | | | 10,604 | |
| AMERISAFE, Inc. | | | 296 | | | | 10,511 | |
| Eagle Bancorp, Inc.* | | | 364 | | | | 10,298 | |
| Berkshire Hills Bancorp, Inc. | | | 406 | | | | 10,195 | |
| Summit Hotel Properties, Inc. | | | 1,078 | | | | 9,907 | |
| Golub Capital BDC, Inc. | | | 566 | | | | 9,814 | |
| Maiden Holdings Ltd. | | | 817 | | | | 9,649 | |
| Sandy Spring Bancorp, Inc. | | | 414 | | | | 9,630 | |
| Bancorp, Inc.* | | | 542 | | | | 9,604 | |
| Investment Technology Group, Inc.* | | | 608 | | | | 9,558 | |
| Navigators Group, Inc.* | | | 165 | | | | 9,532 | |
| Excel Trust, Inc. | | | 787 | | | | 9,444 | |
| Altisource Residential Corp. | | | 410 | | | | 9,422 | |
| Community Trust Bancorp, Inc. | | | 230 | | | | 9,336 | |
| Select Income REIT | | | 360 | | | | 9,288 | |
| Flushing Financial Corp. | | | 502 | | | | 9,262 | |
| Apollo Commercial Real Estate Finance, Inc. | | | 602 | | | | 9,193 | |
| TrustCo Bank Corp. NY | | | 1,532 | | | | 9,131 | |
| Capital Bank Financial Corp. — Class A* | | | 410 | | | | 9,000 | |
| ICG Group, Inc.* | | | 628 | | | | 8,911 | |
| Alexander’s, Inc. | | | 31 | | | | 8,870 | |
| Kite Realty Group Trust | | | 1,487 | | | | 8,818 | |
| Dime Community Bancshares, Inc. | | | 527 | | | | 8,775 | |
| New Mountain Finance Corp. | | | 606 | | | | 8,732 | |
| Lakeland Financial Corp. | | | 266 | | | | 8,685 | |
| THL Credit, Inc. | | | 552 | | | | 8,622 | |
| StellarOne Corp. | | | 380 | | | | 8,550 | |
| Hanmi Financial Corp. | | | 513 | | | | 8,500 | |
| TICC Capital Corp. | | | 868 | | | | 8,463 | |
| State Bank Financial Corp. | | | 528 | | | | 8,379 | |
| First Merchants Corp. | | | 481 | | | | 8,336 | |
| 70 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| Cardinal Financial Corp. | | | 504 | | | $ | 8,331 | |
| Simmons First National Corp. — Class A | | | 267 | | | | 8,301 | |
| Universal Health Realty Income Trust | | | 198 | | | | 8,290 | |
| PICO Holdings, Inc.* | | | 381 | | | | 8,252 | |
| Urstadt Biddle Properties, Inc. — Class A | | | 414 | | | | 8,230 | |
| Wilshire Bancorp, Inc. | | | 1,006 | | | | 8,229 | |
| GAMCO Investors, Inc. — Class A | | | 106 | | | | 8,049 | |
| Getty Realty Corp. | | | 414 | | | | 8,044 | |
| RAIT Financial Trust | | | 1,136 | | | | 8,043 | |
| Southside Bancshares, Inc. | | | 297 | | | | 7,966 | |
| Dynex Capital, Inc. | | | 904 | | | | 7,928 | |
| NewStar Financial, Inc.* | | | 433 | | | | 7,911 | |
| Provident New York Bancorp | | | 715 | | | | 7,786 | |
| Union First Market Bankshares Corp. | | | 333 | | | | 7,782 | |
| AG Mortgage Investment Trust, Inc. | | | 459 | | | | 7,629 | |
| Apollo Residential Mortgage, Inc. | | | 520 | | | | 7,587 | |
| Rouse Properties, Inc. | | | 366 | | | | 7,532 | |
| WSFS Financial Corp. | | | 125 | | | | 7,531 | |
| Capital Southwest Corp. | | | 218 | | | | 7,458 | |
| Washington Trust Bancorp, Inc. | | | 237 | | | | 7,449 | |
| Medley Capital Corp. | | | 540 | | | | 7,447 | |
| Terreno Realty Corp. | | | 408 | | | | 7,246 | |
| DFC Global Corp.* | | | 656 | | | | 7,209 | |
| Ameris Bancorp* | | | 385 | | | | 7,076 | |
| Virginia Commerce Bancorp, Inc.* | | | 451 | | | | 7,004 | |
| Tejon Ranch Co.* | | | 227 | | | | 7,000 | |
| Heartland Financial USA, Inc. | | | 249 | | | | 6,937 | |
| First Interstate Bancsystem, Inc. — Class A | | | 287 | | | | 6,931 | |
| Crawford & Co. — Class B | | | 714 | | | | 6,926 | |
| Sterling Bancorp | | | 504 | | | | 6,920 | |
| SY Bancorp, Inc. | | | 242 | | | | 6,856 | |
| TCP Capital Corp. | | | 418 | | | | 6,780 | |
| First BanCorp* | | | 1,188 | | | | 6,748 | |
| FBL Financial Group, Inc. — Class A | | | 150 | | | | 6,735 | |
| National Western Life Insurance Co. — Class A | | | 33 | | | | 6,658 | |
| Tower Group International Ltd. | | | 938 | | | | 6,566 | |
| 1st Source Corp. | | | 243 | | | | 6,542 | |
| Lakeland Bancorp, Inc. | | | 578 | | | | 6,503 | |
| Chatham Lodging Trust | | | 364 | | | | 6,501 | |
| New York Mortgage Trust, Inc. | | | 1,040 | | | | 6,500 | |
| Agree Realty Corp. | | | 215 | | | | 6,489 | |
| BancFirst Corp. | | | 120 | | | | 6,488 | |
| HCI Group, Inc. | | | 158 | | | | 6,453 | |
| Arlington Asset Investment Corp. — Class A | | | 270 | | | | 6,421 | |
| Central Pacific Financial Corp. | | | 357 | | | | 6,319 | |
| Monmouth Real Estate Investment Corp. — | | | | | | | | |
| Class A | | | 694 | | | | 6,295 | |
| Western Asset Mortgage Capital Corp. | | | 393 | | | | 6,284 | |
| TowneBank | | | 435 | | | | 6,273 | |
| Taylor Capital Group, Inc.* | | | 283 | | | | 6,268 | |
| First Busey Corp. | | | 1,196 | | | | 6,231 | |
| Bryn Mawr Bank Corp. | | | 230 | | | | 6,203 | |
| Cedar Realty Trust, Inc. | | | 1,186 | | | | 6,143 | |
| Citizens, Inc.* | | | 711 | | | | 6,143 | |
| CyrusOne, Inc. | | | 320 | | | | 6,074 | |
| Trico Bancshares | | | 260 | | | | 5,923 | |
| MCG Capital Corp. | | | 1,167 | | | | 5,882 | |
| Saul Centers, Inc. | | | 125 | | | | 5,781 | |
| Rockville Financial, Inc. | | | 441 | | | | 5,733 | |
| HomeTrust Bancshares, Inc.* | | | 342 | | | | 5,643 | |
| First Financial Corp. | | | 178 | | | | 5,619 | |
| CoBiz Financial, Inc. | | | 581 | | | | 5,612 | |
| OneBeacon Insurance Group Ltd. — | | | | | | | | |
| Class A | | | 379 | | | | 5,594 | |
| Westwood Holdings Group, Inc. | | | 115 | | | | 5,526 | |
| Cowen Group, Inc. — Class A* | | | 1,601 | | | | 5,523 | |
| AmREIT, Inc. — Class B | | | 317 | | | | 5,500 | |
| Federal Agricultural Mortgage Corp. — | | | | | | | | |
| Class C | | | 164 | | | | 5,474 | |
| Safeguard Scientifics, Inc.* | | | 344 | | | | 5,397 | |
| Meadowbrook Insurance Group, Inc. | | | 815 | | | | 5,298 | |
| German American Bancorp, Inc. | | | 210 | | | | 5,296 | |
| Univest Corporation of Pennsylvania | | | 280 | | | | 5,278 | |
| Winthrop Realty Trust | | | 473 | | | | 5,274 | |
| United Financial Bancorp, Inc. | | | 325 | | | | 5,255 | |
| MVC Capital, Inc. | | | 398 | | | | 5,198 | |
| Hudson Valley Holding Corp. | | | 276 | | | | 5,183 | |
| Beneficial Mutual Bancorp, Inc.* | | | 519 | | | | 5,174 | |
| Customers Bancorp, Inc.* | | | 320 | | | | 5,152 | |
| State Auto Financial Corp. | | | 244 | | | | 5,109 | |
| MainSource Financial Group, Inc. | | | 335 | | | | 5,089 | |
| Enterprise Financial Services Corp. | | | 301 | | | | 5,051 | |
| First of Long Island Corp. | | | 128 | | | | 4,973 | |
| American Safety Insurance Holdings Ltd.* | | | 164 | | | | 4,953 | |
| Camden National Corp. | | | 121 | | | | 4,949 | |
| Metro Bancorp, Inc.* | | | 232 | | | | 4,874 | |
| First Community Bancshares, Inc. | | | 298 | | | | 4,872 | |
| Southwest Bancorp, Inc.* | | | 325 | | | | 4,813 | |
| Centerstate Banks, Inc. | | | 491 | | | | 4,753 | |
| Park Sterling Corp. | | | 740 | | | | 4,743 | |
| GSV Capital Corp.* | | | 320 | | | | 4,742 | |
| Bank Mutual Corp. | | | 756 | | | | 4,740 | |
| International. FCStone, Inc.* | | | 231 | | | | 4,724 | |
| Flagstar Bancorp, Inc.* | | | 320 | | | | 4,723 | |
| OmniAmerican Bancorp, Inc.* | | | 190 | | | | 4,647 | |
| First Bancorp | | | 321 | | | | 4,638 | |
| Great Southern Bancorp, Inc. | | | 164 | | | | 4,630 | |
| Global Indemnity plc — Class A* | | | 181 | | | | 4,608 | |
| Financial Institutions, Inc. | | | 225 | | | | 4,604 | |
| Arrow Financial Corp. | | | 177 | | | | 4,528 | |
| Fidus Investment Corp. | | | 233 | | | | 4,520 | |
| GFI Group, Inc. | | | 1,141 | | | | 4,507 | |
| Diamond Hill Investment Group, Inc. | | | 42 | | | | 4,492 | |
| Republic Bancorp, Inc. — Class A | | | 163 | | | | 4,491 | |
| Medallion Financial Corp. | | | 299 | | | | 4,449 | |
| Aviv REIT, Inc. | | | 190 | | | | 4,332 | |
| Walker & Dunlop, Inc.* | | | 272 | | | | 4,328 | |
| Ares Commercial Real Estate Corp. | | | 347 | | | | 4,313 | |
| KCAP Financial, Inc. | | | 469 | | | | 4,212 | |
| Whitestone REIT — Class B | | | 285 | | | | 4,198 | |
| HomeStreet, Inc. | | | 217 | | | | 4,188 | |
| See Notes to Financial Statements. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 71 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| Yadkin Financial Corp.* | | | 240 | | | $ | 4,135 | |
| Gladstone Commercial Corp. | | | 228 | | | | 4,095 | |
| National Bankshares, Inc. | | | 114 | | | | 4,091 | |
| Citizens & Northern Corp. | | | 205 | | | | 4,088 | |
| Gramercy Property Trust, Inc.* | | | 976 | | | | 4,050 | |
| First Connecticut Bancorp, Inc. | | | 275 | | | | 4,043 | |
| Charter Financial Corp. | | | 374 | | | | 4,039 | |
| BNC Bancorp | | | 300 | | | | 4,002 | |
| One Liberty Properties, Inc. | | | 196 | | | | 3,975 | |
| FBR & Co.* | | | 148 | | | | 3,968 | |
| Universal Insurance Holdings, Inc. | | | 562 | | | | 3,962 | |
| PennyMac Financial Services, Inc. — Class A* | | | 210 | | | | 3,946 | |
| Heritage Financial Corp. | | | 254 | | | | 3,942 | |
| West Bancorporation, Inc. | | | 284 | | | | 3,919 | |
| Pacific Continental Corp. | | | 298 | | | | 3,907 | |
| Territorial Bancorp, Inc. | | | 177 | | | | 3,889 | |
| Silver Bay Realty Trust Corp. | | | 248 | | | | 3,884 | |
| First Defiance Financial Corp. | | | 166 | | | | 3,883 | |
| American Residential Properties, Inc.* | | | 220 | | | | 3,874 | |
| Bank of Marin Bancorp | | | 92 | | | | 3,823 | |
| Baldwin & Lyons, Inc. — Class B | | | 156 | | | | 3,803 | |
| OceanFirst Financial Corp. | | | 224 | | | | 3,788 | |
| Peoples Bancorp, Inc. | | | 180 | | | | 3,758 | |
| Penns Woods Bancorp, Inc. | | | 75 | | | | 3,737 | |
| Manning & Napier, Inc. — Class A | | | 224 | | | | 3,736 | |
| MetroCorp Bancshares, Inc. | | | 269 | | | | 3,701 | |
| Ames National Corp. | | | 162 | | | | 3,689 | |
| Consolidated-Tomoka Land Co. | | | 95 | | | | 3,657 | |
| Meta Financial Group, Inc. | | | 96 | | | | 3,648 | |
| Pacific Premier Bancorp, Inc.* | | | 270 | | | | 3,629 | |
| Firsthand Technology Value Fund, Inc.* | | | 148 | | | | 3,623 | |
| Banc of California, Inc. | | | 261 | | | | 3,610 | |
| Independent Bank Group, Inc. | | | 100 | | | | 3,600 | |
| Phoenix Companies, Inc.* | | | 93 | | | | 3,596 | |
| Marlin Business Services Corp. | | | 144 | | | | 3,594 | |
| Fidelity Southern Corp. | | | 234 | | | | 3,590 | |
| 1st United Bancorp, Inc. | | | 485 | | | | 3,555 | |
| Washington Banking Co. | | | 252 | | | | 3,543 | |
| Fox Chase Bancorp, Inc. | | | 203 | | | | 3,532 | |
| CNB Financial Corp. | | | 206 | | | | 3,512 | |
| Solar Senior Capital Ltd. | | | 193 | | | | 3,489 | |
| Guaranty Bancorp | | | 248 | | | | 3,395 | |
| Bridge Bancorp, Inc. | | | 155 | | | | 3,333 | |
| Thomas Properties Group, Inc. | | | 493 | | | | 3,313 | |
| PennantPark Floating Rate Capital Ltd. | | | 240 | | | | 3,307 | |
| Preferred Bank/Los Angeles CA* | | | 185 | | | | 3,291 | |
| Suffolk Bancorp* | | | 185 | | | | 3,278 | |
| Franklin Financial Corp. | | | 171 | | | | 3,242 | |
| Horizon Bancorp | | | 137 | | | | 3,199 | |
| Sierra Bancorp | | | 203 | | | | 3,193 | |
| Calamos Asset Management, Inc. — Class A | | | 318 | | | | 3,177 | |
| Meridian Interstate Bancorp, Inc.* | | | 145 | | | | 3,160 | |
| United Community Financial Corp.* | | | 798 | | | | 3,104 | |
| BankFinancial Corp. | | | 346 | | | | 3,086 | |
| Gladstone Investment Corp. | | | 437 | | | | 3,081 | |
| Armada Hoffler Properties, Inc. | | | 310 | | | | 3,072 | |
| Ladenburg Thalmann Financial Services, Inc.* | | | 1,694 | | | | 3,066 | |
| Kansas City Life Insurance Co. | | | 69 | | | | 3,051 | |
| Mercantile Bank Corp. | | | 140 | | | | 3,049 | |
| Tree.com, Inc. | | | 116 | | | | 3,046 | |
| National Interstate Corp. | | | 109 | | | | 3,031 | |
| Gladstone Capital Corp. | | | 345 | | | | 3,012 | |
| Regional Management Corp.* | | | 94 | | | | 2,989 | |
| NewBridge Bancorp* | | | 410 | | | | 2,989 | |
| Home Federal Bancorp, Inc. | | | 237 | | | | 2,981 | |
| MPG Office Trust, Inc.* | | | 950 | | | | 2,974 | |
| Stellus Capital Investment Corp. | | | 196 | | | | 2,936 | |
| American National Bankshares, Inc. | | | 125 | | | | 2,900 | |
| MidWestOne Financial Group, Inc. | | | 111 | | | | 2,854 | |
| Eastern Insurance Holdings, Inc. | | | 116 | | | | 2,832 | |
| Oppenheimer Holdings, Inc. — Class A | | | 159 | | | | 2,825 | |
| Center Bancorp, Inc. | | | 197 | | | | 2,805 | |
| First Financial Northwest, Inc. | | | 268 | | | | 2,795 | |
| Merchants Bancshares, Inc. | | | 95 | | | | 2,750 | |
| CU Bancorp* | | | 150 | | | | 2,738 | |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | | | 240 | | | | 2,736 | |
| Bank of Kentucky Financial Corp. | | | 99 | | | | 2,704 | |
| First Bancorp, Inc. | | | 161 | | | | 2,702 | |
| Heritage Commerce Corp. | | | 352 | | | | 2,693 | |
| SWS Group, Inc.* | | | 481 | | | | 2,684 | |
| ESB Financial Corp. | | | 210 | | | | 2,678 | |
| Nicholas Financial, Inc. | | | 164 | | | | 2,672 | |
| AV Homes, Inc.* | | | 152 | | | | 2,654 | |
| JAVELIN Mortgage Investment Corp. | | | 224 | | | | 2,650 | |
| Peapack Gladstone Financial Corp. | | | 142 | | | | 2,634 | |
| Provident Financial Holdings, Inc. | | | 158 | | | | 2,624 | |
| Farmers Capital Bank Corp.* | | | 120 | | | | 2,623 | |
| Northrim BanCorp, Inc. | | | 108 | | | | 2,603 | |
| Seacoast Banking Corporation of Florida* | | | 1,199 | | | | 2,602 | |
| Bridge Capital Holdings* | | | 152 | | | | 2,581 | |
| NGP Capital Resources Co. | | | 345 | | | | 2,563 | |
| Bar Harbor Bankshares | | | 69 | | | | 2,539 | |
| Sun Bancorp, Inc.* | | | 656 | | | | 2,512 | |
| Capital City Bank Group, Inc.* | | | 210 | | | | 2,474 | |
| UMH Properties, Inc. | | | 247 | | | | 2,453 | |
| Kearny Financial Corp.* | | | 235 | | | | 2,402 | |
| Westfield Financial, Inc. | | | 337 | | | | 2,379 | |
| C&F Financial Corp. | | | 49 | | | | 2,372 | |
| Intervest Bancshares Corp. — Class A* | | | 298 | | | | 2,363 | |
| EMC Insurance Group, Inc. | | | 77 | | | | 2,324 | |
| Imperial Holdings, Inc.* | | | 360 | | | | 2,279 | |
| Macatawa Bank Corp.* | | | 422 | | | | 2,270 | |
| Enterprise Bancorp, Inc. | | | 120 | | | | 2,269 | |
| Gain Capital Holdings, Inc. | | | 175 | | | | 2,203 | |
| Doral Financial Corp.* | | | 114 | | | | 2,175 | |
| Roma Financial Corp.* | | | 116 | | | | 2,156 | |
| First Security Group, Inc.* | | | 1,030 | | | | 2,142 | |
| Heritage Oaks Bancorp* | | | 332 | | | | 2,125 | |
| Home Bancorp, Inc.* | | | 117 | | | | 2,113 | |
| Chemung Financial Corp. | | | 60 | | | | 2,078 | |
| 72 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| Hallmark Financial Services, Inc.* | | | 233 | | | $ | 2,067 | |
| MidSouth Bancorp, Inc. | | | 133 | | | | 2,062 | |
| First Marblehead Corp.* | | | 2,466 | | | | 2,022 | |
| LCNB Corp. | | | 103 | | | | 2,018 | |
| NASB Financial, Inc.* | | | 68 | | | | 1,865 | |
| Independence Holding Co. | | | 128 | | | | 1,828 | |
| WhiteHorse Finance, Inc. | | | 120 | | | | 1,812 | |
| CommunityOne Bancorp* | | | 178 | | | | 1,759 | |
| Horizon Technology Finance Corp. | | | 132 | | | | 1,758 | |
| Middleburg Financial Corp. | | | 90 | | | | 1,735 | |
| BBX Capital Corp. — Class A* | | | 120 | | | | 1,724 | |
| Clifton Savings Bancorp, Inc. | | | 139 | | | | 1,722 | |
| Consumer Portfolio Services, Inc.* | | | 290 | | | | 1,720 | |
| Access National Corp. | | | 120 | | | | 1,711 | |
| First NBC Bank Holding Co.* | | | 70 | | | | 1,707 | |
| Century Bancorp, Inc. — Class A | | | 51 | | | | 1,700 | |
| Ellington Residential Mortgage REIT | | | 110 | | | | 1,691 | |
| Donegal Group, Inc. — Class A | | | 118 | | | | 1,651 | |
| Resource America, Inc. — Class A | | | 200 | | | | 1,606 | |
| JMP Group, Inc. | | | 255 | | | | 1,578 | |
| ZAIS Financial Corp. | | | 90 | | | | 1,562 | |
| Investors Title Co. | | | 20 | | | | 1,502 | |
| ESSA Bancorp, Inc. | | | 142 | | | | 1,480 | |
| Tristate Capital Holdings, Inc.* | | | 110 | | | | 1,418 | |
| Garrison Capital, Inc. | | | 95 | | | | 1,404 | |
| Hingham Institution for Savings | | | 19 | | | | 1,328 | |
| Pzena Investment Management, Inc. — Class A | | | 188 | | | | 1,275 | |
| ConnectOne Bancorp, Inc.* | | | 35 | | | | 1,229 | |
| Waterstone Financial, Inc.* | | | 120 | | | | 1,218 | |
| VantageSouth Bancshares, Inc.* | | | 200 | | | | 1,062 | |
| Fortegra Financial Corp.* | | | 116 | | | | 987 | |
| Health Insurance Innovations, Inc. — Class A* | | | 80 | | | | 956 | |
| Palmetto Bancshares, Inc.* | | | 70 | | | | 913 | |
| CIFC Corp. | | | 110 | | | | 868 | |
| Hampton Roads Bankshares, Inc.* | | | 550 | | | | 781 | |
| Cascade Bancorp* | | | 108 | | | | 630 | |
| California First National Bancorp | | | 35 | | | | 597 | |
| First Federal Bancshares of Arkansas, Inc.* | | | 54 | | | | 505 | |
| Total Financials | | | | | | | 5,707,238 | |
| | | | | | | | | |
| INFORMATION TECHNOLOGY - 13.1% | | | | | | | | |
| CoStar Group, Inc.* | | | 478 | | | | 80,256 | |
| CommVault Systems, Inc.* | | | 757 | | | | 66,488 | |
| Ultimate Software Group, Inc.* | | | 444 | | | | 65,445 | |
| FEI Co. | | | 678 | | | | 59,529 | |
| WEX, Inc.* | | | 642 | | | | 56,335 | |
| PTC, Inc.* | | | 1,953 | | | | 55,523 | |
| Aspen Technology, Inc.* | | | 1,542 | | | | 53,276 | |
| MAXIMUS, Inc. | | | 1,119 | | | | 50,399 | |
| Qlik Technologies, Inc.* | | | 1,424 | | | | 48,758 | |
| Belden, Inc. | | | 720 | | | | 46,116 | |
| Tyler Technologies, Inc.* | | | 512 | | | | 44,785 | |
| Cognex Corp. | | | 1,402 | | | | 43,966 | |
| Ciena Corp.* | | | 1,652 | | | | 41,267 | |
| ViaSat, Inc.* | | | 641 | | | | 40,864 | |
| Anixter International, Inc.* | | | 443 | | | | 38,833 | |
| Sourcefire, Inc.* | | | 507 | | | | 38,491 | |
| Microsemi Corp.* | | | 1,533 | | | | 37,176 | |
| j2 Global, Inc. | | | 748 | | | | 37,040 | |
| SS&C Technologies Holdings, Inc.* | | | 957 | | | | 36,462 | |
| Mentor Graphics Corp. | | | 1,556 | | | | 36,364 | |
| ACI Worldwide, Inc.* | | | 657 | | | | 35,517 | |
| Finisar Corp.* | | | 1,530 | | | | 34,624 | |
| Cavium, Inc.* | | | 840 | | | | 34,608 | |
| Cornerstone OnDemand, Inc.* | | | 672 | | | | 34,567 | |
| Acxiom Corp.* | | | 1,208 | | | | 34,295 | |
| Hittite Microwave Corp.* | | | 523 | | | | 34,178 | |
| Infoblox, Inc.* | | | 817 | | | | 34,167 | |
| Semtech Corp.* | | | 1,100 | | | | 32,989 | |
| Guidewire Software, Inc.* | | | 698 | | | | 32,883 | |
| Yelp, Inc. — Class A* | | | 496 | | | | 32,824 | |
| Plantronics, Inc. | | | 709 | | | | 32,649 | |
| Euronet Worldwide, Inc.* | | | 817 | | | | 32,516 | |
| ARRIS Group, Inc.* | | | 1,906 | | | | 32,516 | |
| Convergys Corp. | | | 1,715 | | | | 32,156 | |
| Zillow, Inc. — Class A* | | | 380 | | | | 32,060 | |
| Fair Isaac Corp. | | | 578 | | | | 31,952 | |
| Verint Systems, Inc.* | | | 860 | | | | 31,872 | |
| Aruba Networks, Inc.* | | | 1,865 | | | | 31,034 | |
| Dealertrack Technologies, Inc.* | | | 712 | | | | 30,501 | |
| SunEdison, Inc.* | | | 3,795 | | | | 30,246 | |
| VistaPrint N.V.*,1 | | | 529 | | | | 29,899 | |
| Manhattan Associates, Inc.* | | | 312 | | | | 29,780 | |
| Blackbaud, Inc. | | | 741 | | | | 28,929 | |
| Littelfuse, Inc. | | | 361 | | | | 28,237 | |
| International Rectifier Corp.* | | | 1,131 | | | | 28,015 | |
| Sapient Corp.* | | | 1,794 | | | | 27,933 | |
| Itron, Inc.* | | | 638 | | | | 27,326 | |
| Cardtronics, Inc.* | | | 732 | | | | 27,157 | |
| SYNNEX Corp.* | | | 436 | | | | 26,792 | |
| ADTRAN, Inc. | | | 978 | | | | 26,054 | |
| RF Micro Devices, Inc.* | | | 4,616 | | | | 26,034 | |
| CACI International, Inc. — Class A* | | | 376 | | | | 25,985 | |
| OpenTable, Inc.* | | | 371 | | | | 25,963 | |
| TiVo, Inc.* | | | 2,085 | | | | 25,937 | |
| ValueClick, Inc.* | | | 1,242 | | | | 25,896 | |
| Power Integrations, Inc. | | | 474 | | | | 25,667 | |
| InterDigital, Inc. | | | 667 | | | | 24,899 | |
| Coherent, Inc. | | | 405 | | | | 24,887 | |
| OSI Systems, Inc.* | | | 329 | | | | 24,501 | |
| NIC, Inc. | | | 1,052 | | | | 24,312 | |
| Electronics for Imaging, Inc.* | | | 766 | | | | 24,268 | |
| Take-Two Interactive Software, Inc.* | | | 1,334 | | | | 24,225 | |
| Veeco Instruments, Inc.* | | | 645 | | | | 24,013 | |
| Cirrus Logic, Inc.* | | | 1,058 | | | | 23,995 | |
| Sanmina Corp.* | | | 1,371 | | | | 23,978 | |
| Synaptics, Inc.* | | | 537 | | | | 23,778 | |
| Heartland Payment Systems, Inc. | | | 593 | | | | 23,554 | |
| Progress Software Corp.* | | | 906 | | | | 23,447 | |
| Intersil Corp. — Class A | | | 2,076 | | | | 23,313 | |
| Entegris, Inc.* | | | 2,288 | | | | 23,223 | |
| MKS Instruments, Inc. | | | 865 | | | | 23,000 | |
| Cypress Semiconductor Corp. | | | 2,407 | | | | 22,481 | |
| Web.com Group, Inc.* | | | 683 | | | | 22,088 | |
| See Notes to Financial Statements. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 73 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| PMC - Sierra, Inc.* | | | 3,335 | | | $ | 22,078 | |
| Synchronoss Technologies, Inc.* | | | 580 | | | | 22,075 | |
| TriQuint Semiconductor, Inc.* | | | 2,675 | | | | 21,748 | |
| Infinera Corp.* | | | 1,917 | | | | 21,681 | |
| Trulia, Inc.* | | | 455 | | | | 21,399 | |
| Universal Display Corp.* | | | 663 | | | | 21,236 | |
| Plexus Corp.* | | | 561 | | | | 20,869 | |
| Integrated Device Technology, Inc.* | | | 2,164 | | | | 20,385 | |
| Benchmark Electronics, Inc.* | | | 885 | | | | 20,258 | |
| Syntel, Inc. | | | 251 | | | | 20,105 | |
| Cray, Inc.* | | | 819 | | | | 19,713 | |
| NETGEAR, Inc.* | | | 627 | | | | 19,349 | |
| Monolithic Power Systems, Inc. | | | 601 | | | | 18,198 | |
| Unisys Corp.* | | | 722 | | | | 18,187 | |
| Monotype Imaging Holdings, Inc. | | | 621 | | | | 17,798 | |
| Bottomline Technologies de, Inc.* | | | 635 | | | | 17,704 | |
| RealPage, Inc.*,1 | | | 760 | | | | 17,602 | |
| SunPower Corp. — Class A* | | | 668 | | | | 17,475 | |
| Methode Electronics, Inc. | | | 616 | | | | 17,248 | |
| Rambus, Inc.* | | | 1,830 | | | | 17,202 | |
| comScore, Inc.* | | | 585 | | | | 16,947 | |
| BroadSoft, Inc.* | | | 470 | | | | 16,934 | |
| Fusion-io, Inc.* | | | 1,257 | | | | 16,831 | |
| Tessera Technologies, Inc. | | | 868 | | | | 16,796 | |
| Advent Software, Inc. | | | 529 | | | | 16,796 | |
| Interactive Intelligence Group, Inc.* | | | 262 | | | | 16,634 | |
| Rogers Corp.* | | | 279 | | | | 16,595 | |
| GT Advanced Technologies, Inc.*,1 | | | 1,947 | | | | 16,569 | |
| MTS Systems Corp. | | | 257 | | | | 16,538 | |
| WebMD Health Corp. — Class A* | | | 576 | | | | 16,474 | |
| SPS Commerce, Inc.* | | | 245 | | | | 16,395 | |
| InvenSense, Inc. — Class A* | | | 925 | | | | 16,299 | |
| QLogic Corp.* | | | 1,455 | | | | 15,918 | |
| iGATE Corp.* | | | 573 | | | | 15,906 | |
| ScanSource, Inc.* | | | 458 | | | | 15,847 | |
| Bankrate, Inc.* | | | 763 | | | | 15,695 | |
| Angieʼs List, Inc.* | | | 689 | | | | 15,503 | |
| Blucora, Inc.* | | | 674 | | | | 15,489 | |
| NetScout Systems, Inc.* | | | 601 | | | | 15,368 | |
| Applied Micro Circuits Corp.* | | | 1,184 | | | | 15,274 | |
| ExlService Holdings, Inc.* | | | 525 | | | | 14,952 | |
| MicroStrategy, Inc. — Class A* | | | 144 | | | | 14,941 | |
| Cabot Microelectronics Corp.* | | | 379 | | | | 14,599 | |
| Ixia* | | | 924 | | | | 14,479 | |
| Diodes, Inc.* | | | 588 | | | | 14,406 | |
| Measurement Specialties, Inc.* | | | 261 | | | | 14,157 | |
| Proofpoint, Inc.* | | | 436 | | | | 14,004 | |
| Harmonic, Inc.* | | | 1,818 | | | | 13,980 | |
| CSG Systems International, Inc. | | | 558 | | | | 13,978 | |
| VirnetX Holding Corp.* | | | 681 | | | | 13,892 | |
| Ellie Mae, Inc.* | | | 434 | | | | 13,892 | |
| Ultratech, Inc.* | | | 456 | | | | 13,817 | |
| ATMI, Inc.* | | | 519 | | | | 13,764 | |
| Imperva, Inc.* | | | 324 | | | | 13,614 | |
| OmniVision Technologies, Inc.* | | | 889 | | | | 13,611 | |
| Liquidity Services, Inc.* | | | 403 | | | | 13,525 | |
| Insight Enterprises, Inc.* | | | 702 | | | | 13,282 | |
| Tellabs, Inc. | | | 5,827 | | | | 13,227 | |
| PROS Holdings, Inc.* | | | 377 | | | | 12,890 | |
| Active Network, Inc.* | | | 888 | | | | 12,707 | |
| LogMeIn, Inc.* | | | 403 | | | | 12,513 | |
| EPAM Systems, Inc.* | | | 361 | | | | 12,455 | |
| United Online, Inc. | | | 1,517 | | | | 12,106 | |
| Demandware, Inc.* | | | 261 | | | | 12,092 | |
| Constant Contact, Inc.* | | | 510 | | | | 12,082 | |
| ServiceSource International, Inc.* | | | 999 | | | | 12,068 | |
| FARO Technologies, Inc.* | | | 286 | | | | 12,061 | |
| Tangoe, Inc.* | | | 504 | | | | 12,025 | |
| Sonus Networks, Inc.* | | | 3,541 | | | | 11,969 | |
| Ruckus Wireless, Inc.* | | | 710 | | | | 11,949 | |
| Comverse, Inc.* | | | 363 | | | | 11,598 | |
| Sykes Enterprises, Inc.* | | | 647 | | | | 11,588 | |
| Emulex Corp.* | | | 1,490 | | | | 11,562 | |
| Advanced Energy Industries, Inc.* | | | 656 | | | | 11,493 | |
| Envestnet, Inc.* | | | 370 | | | | 11,470 | |
| Checkpoint Systems, Inc.* | | | 675 | | | | 11,273 | |
| Rofin-Sinar Technologies, Inc.* | | | 464 | | | | 11,233 | |
| Pegasystems, Inc. | | | 281 | | | | 11,187 | |
| MoneyGram International, Inc.* | | | 571 | | | | 11,180 | |
| ManTech International Corp. — Class A | | | 384 | | | | 11,044 | |
| Move, Inc.* | | | 648 | | | | 10,984 | |
| Badger Meter, Inc. | | | 235 | | | | 10,928 | |
| EVERTEC, Inc. | | | 490 | | | | 10,883 | |
| Digital River, Inc.* | | | 579 | | | | 10,347 | |
| FleetMatics Group plc* | | | 270 | | | | 10,139 | |
| Perficient, Inc.* | | | 552 | | | | 10,135 | |
| Newport Corp.* | | | 644 | | | | 10,066 | |
| Brooks Automation, Inc. | | | 1,077 | | | | 10,027 | |
| CalAmp Corp.* | | | 565 | | | | 9,961 | |
| Responsys, Inc.* | | | 602 | | | | 9,933 | |
| Stamps.com, Inc.* | | | 216 | | | | 9,921 | |
| Park Electrochemical Corp. | | | 342 | | | | 9,798 | |
| Volterra Semiconductor Corp.* | | | 415 | | | | 9,545 | |
| Virtusa Corp.* | | | 327 | | | | 9,503 | |
| AVG Technologies N.V.* | | | 393 | | | | 9,408 | |
| Silicon Graphics International Corp.* | | | 557 | | | | 9,051 | |
| Accelrys, Inc.* | | | 917 | | | | 9,042 | |
| Cass Information Systems, Inc. | | | 164 | | | | 8,753 | |
| Shutterstock, Inc.* | | | 120 | | | | 8,726 | |
| PDF Solutions, Inc.* | | | 407 | | | | 8,649 | |
| SciQuest, Inc.* | | | 384 | | | | 8,625 | |
| CTS Corp. | | | 542 | | | | 8,547 | |
| Global Cash Access Holdings, Inc.* | | | 1,091 | | | | 8,521 | |
| Lattice Semiconductor Corp.* | | | 1,910 | | | | 8,519 | |
| LivePerson, Inc.* | | | 896 | | | | 8,458 | |
| Monster Worldwide, Inc.* | | | 1,907 | | | | 8,429 | |
| TTM Technologies, Inc.* | | | 863 | | | | 8,414 | |
| Calix, Inc.* | | | 658 | | | | 8,376 | |
| Exar Corp.* | | | 622 | | | | 8,341 | |
| Ebix, Inc. | | | 836 | | | | 8,310 | |
| EarthLink, Inc. | | | 1,673 | | | | 8,281 | |
| TeleTech Holdings, Inc.* | | | 329 | | | | 8,255 | |
| Jive Software, Inc.* | | | 656 | | | | 8,200 | |
| Black Box Corp. | | | 262 | | | | 8,028 | |
| 74 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® 1.5x strategy FUND | | |
| | | Shares | | | Value | |
| | | | | | | |
| Extreme Networks, Inc.* | | | 1,524 | | | $ | 7,955 | |
| Forrester Research, Inc. | | | 216 | | | | 7,940 | |
| Spansion, Inc. — Class A* | | | 779 | | | | 7,860 | |
| Fabrinet* | | | 462 | | | | 7,780 | |
| Photronics, Inc.* | | | 991 | | | | 7,760 | |
| Bazaarvoice, Inc.* | | | 781 | | | | 7,091 | |
| Micrel, Inc. | | | 768 | | | | 6,996 | |
| Super Micro Computer, Inc.* | | | 516 | | | | 6,987 | |
| Epiq Systems, Inc. | | | 521 | | | | 6,888 | |
| Silicon Image, Inc.* | | | 1,264 | | | | 6,750 | |
| Ubiquiti Networks, Inc. | | | 200 | | | | 6,718 | |
| Daktronics, Inc. | | | 596 | | | | 6,669 | |
| Comtech Telecommunications Corp. | | | 272 | | | | 6,615 | |
| Entropic Communications, Inc.* | | | 1,471 | | | | 6,443 | |
| DTS, Inc.* | | | 304 | | | | 6,384 | |
| Ceva, Inc.* | | | 362 | | | | 6,245 | |
| Internap Network Services Corp.* | | | 893 | | | | 6,206 | |
| Rudolph Technologies, Inc.* | | | 540 | | | | 6,156 | |
| Seachange International, Inc.* | | | 536 | | | | 6,148 | |
| FormFactor, Inc.* | | | 888 | | | | 6,092 | |
| Nanometrics, Inc.* | | | 376 | | | | 6,061 | |
| Ambarella, Inc.* | | | 310 | | | | 6,051 | |
| Immersion Corp.* | | | 458 | | | | 6,041 | |
| ShoreTel, Inc.* | | | 971 | | | | 5,865 | |
| Oplink Communications, Inc.* | | | 305 | | | | 5,740 | |
| Dice Holdings, Inc.* | | | 667 | | | | 5,676 | |
| Actuate Corp.* | | | 769 | | | | 5,652 | |
| Electro Rent Corp. | | | 311 | | | | 5,642 | |
| Inphi Corp.* | | | 418 | | | | 5,614 | |
| Callidus Software, Inc.* | | | 608 | | | | 5,575 | |
| XO Group, Inc.* | | | 431 | | | | 5,569 | |
| IntraLinks Holdings, Inc.* | | | 624 | | | | 5,491 | |
| Globecomm Systems, Inc.* | | | 385 | | | | 5,402 | |
| Qualys, Inc.* | | | 250 | | | | 5,348 | |
| E2open, Inc.* | | | 238 | | | | 5,331 | |
| Mercury Systems, Inc.* | | | 525 | | | | 5,245 | |
| Procera Networks, Inc.* | | | 338 | | | | 5,236 | |
| Brightcove, Inc.* | | | 462 | | | | 5,198 | |
| LTX-Credence Corp.* | | | 773 | | | | 5,086 | |
| Integrated Silicon Solution, Inc.* | | | 461 | | | | 5,020 | |
| Zix Corp.* | | | 1,017 | | | | 4,973 | |
| Anaren, Inc.* | | | 194 | | | | 4,947 | |
| Amkor Technology, Inc.* | | | 1,139 | | | | 4,886 | |
| QuinStreet, Inc.* | | | 510 | | | | 4,820 | |
| Parkervision, Inc.* | | | 1,438 | | | | 4,817 | |
| Quantum Corp.* | | | 3,482 | | | | 4,805 | |
| GSI Group, Inc.* | | | 495 | | | | 4,722 | |
| RealD, Inc.* | | | 666 | | | | 4,662 | |
| Electro Scientific Industries, Inc. | | | 397 | | | | 4,649 | |
| Blackhawk Network Holdings, Inc.* | | | 190 | | | | 4,566 | |
| support.com, Inc.* | | | 823 | | | | 4,485 | |
| Cohu, Inc. | | | 410 | | | | 4,473 | |
| PLX Technology, Inc.* | | | 743 | | | | 4,473 | |
| Kopin Corp.* | | | 1,094 | | | | 4,409 | |
| Maxwell Technologies, Inc.* | | | 477 | | | | 4,331 | |
| Zygo Corp.* | | | 269 | | | | 4,299 | |
| NVE Corp.* | | | 83 | | | | 4,236 | |
| Computer Task Group, Inc. | | | 262 | | | | 4,234 | |
| Digi International, Inc.* | | | 417 | | | | 4,174 | |
| Datalink Corp.* | | | 306 | | | | 4,137 | |
| CIBER, Inc.* | | | 1,228 | | | | 4,052 | |
| Millennial Media, Inc.* | | | 569 | | | | 4,023 | |
| Supertex, Inc. | | | 158 | | | | 4,004 | |
| Higher One Holdings, Inc.* | | | 520 | | | | 3,988 | |
| Peregrine Semiconductor Corp.* | | | 438 | | | | 3,929 | |
| IXYS Corp. | | | 402 | | | | 3,879 | |
| Xoom Corp.* | | | 120 | | | | 3,817 | |
| Axcelis Technologies, Inc.* | | | 1,783 | | | | 3,762 | |
| Aeroflex Holding Corp.* | | | 534 | | | | 3,759 | |
| VASCO Data Security International, Inc.* | | | 473 | | | | 3,732 | |
| Marketo, Inc.* | | | 117 | | | | 3,730 | |
| Demand Media, Inc.* | | | 590 | | | | 3,729 | |
| Alliance Fiber Optic Products, Inc. | | | 180 | | | | 3,685 | |
| Travelzoo, Inc.* | | | 137 | | | | 3,636 | |
| Rally Software Development Corp.* | | | 120 | | | | 3,595 | |
| Lionbridge Technologies, Inc.* | | | 953 | | | | 3,517 | |
| ChannelAdvisor Corp.* | | | 95 | | | | 3,480 | |
| KVH Industries, Inc.* | | | 252 | | | | 3,478 | |
| Rubicon Technology, Inc.* | | | 285 | | | | 3,451 | |
| ePlus, Inc. | | | 66 | | | | 3,411 | |
| Tessco Technologies, Inc. | | | 101 | | | | 3,404 | |
| American Software, Inc. — Class A | | | 387 | | | | 3,305 | |
| Marchex, Inc. — Class B | | | 453 | | | | 3,298 | |
| Global Eagle Entertainment, Inc.* | | | 350 | | | | 3,269 | |
| Symmetricom, Inc.* | | | 672 | | | | 3,239 | |
| eGain Corp.* | | | 210 | | | | 3,169 | |
| Vringo, Inc.* | | | 1,100 | | | | 3,168 | |
| RealNetworks, Inc.* | | | 367 | | | | 3,142 | |
| MaxLinear, Inc. — Class A* | | | 377 | | | | 3,125 | |
| Rosetta Stone, Inc.* | | | 190 | | | | 3,084 | |
| KEMET Corp.* | | | 733 | | | | 3,064 | |
| PRGX Global, Inc.* | | | 487 | | | | 3,049 | |
| Mesa Laboratories, Inc. | | | 45 | | | | 3,042 | |
| Avid Technology, Inc.* | | | 506 | | | | 3,036 | |
| Hackett Group, Inc. | | | 421 | | | | 3,002 | |
| Carbonite, Inc.* | | | 199 | | | | 2,985 | |
| Vishay Precision Group, Inc.* | | | 205 | | | | 2,983 | |
| M/A-COM Technology Solutions | | | | | | | | |
| Holdings, Inc.* | | | 173 | | | | 2,944 | |
| Pericom Semiconductor Corp.* | | | 374 | | | | 2,917 | |
| MoSys, Inc.* | | | 766 | | | | 2,850 | |
| Sigma Designs, Inc.* | | | 509 | | | | 2,845 | |
| Uni-Pixel, Inc.* | | | 160 | | | | 2,837 | |
| Vocus, Inc.* | | | 302 | | | | 2,812 | |
| Limelight Networks, Inc.* | | | 1,441 | | | | 2,781 | |
| Agilysys, Inc.* | | | 233 | | | | 2,777 | |
| Unwired Planet, Inc.* | | | 1,598 | | | | 2,765 | |
| Bel Fuse, Inc. — Class B | | | 158 | | | | 2,756 | |
| Ultra Clean Holdings, Inc.* | | | 398 | | | | 2,750 | |
| PC-Telephone, Inc. | | | 307 | | | | 2,717 | |
| ANADIGICS, Inc.* | | | 1,343 | | | | 2,646 | |
| Neonode, Inc.* | | | 411 | | | | 2,639 | |
| Numerex Corp. — Class A* | | | 238 | | | | 2,606 | |
| Glu Mobile, Inc.*,1 | | | 929 | | | | 2,592 | |
| See Notes to Financial Statements. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 75 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Aviat Networks, Inc.* | | | 998 | | | $ | 2,575 | |
| Guidance Software, Inc.* | | | 276 | | | | 2,503 | |
| Westell Technologies, Inc. — Class A* | | | 726 | | | | 2,432 | |
| Spark Networks, Inc.* | | | 291 | | | | 2,421 | |
| NeoPhotonics Corp.* | | | 323 | | | | 2,387 | |
| GSI Technology, Inc.* | | | 338 | | | | 2,376 | |
| Alpha & Omega Semiconductor Ltd.* | | | 280 | | | | 2,355 | |
| Multi-Fineline Electronix, Inc.* | | | 142 | | | | 2,303 | |
| DSP Group, Inc.* | | | 326 | | | | 2,298 | |
| Imation Corp.* | | | 558 | | | | 2,288 | |
| Richardson Electronics Ltd. | | | 200 | | | | 2,274 | |
| Reis, Inc.* | | | 140 | | | | 2,264 | |
| PC Connection, Inc. | | | 150 | | | | 2,264 | |
| Mindspeed Technologies, Inc.* | | | 706 | | | | 2,146 | |
| Speed Commerce, Inc.* | | | 650 | | | | 2,132 | |
| Digimarc Corp. | | | 104 | | | | 2,101 | |
| Mitek Systems, Inc.* | | | 400 | | | | 2,072 | |
| TeleCommunication Systems, Inc. — Class A* | | | 780 | | | | 1,919 | |
| Marin Software, Inc.* | | | 147 | | | | 1,845 | |
| Planet Payment, Inc.* | | | 698 | | | | 1,773 | |
| Audience, Inc.* | | | 153 | | | | 1,720 | |
| Sapiens International Corporation N.V. | | | 283 | | | | 1,712 | |
| ModusLink Global Solutions, Inc.* | | | 615 | | | | 1,685 | |
| Telenav, Inc.* | | | 286 | | | | 1,670 | |
| Silver Spring Networks, Inc.* | | | 95 | | | | 1,646 | |
| Intermolecular, Inc.* | | | 284 | | | | 1,565 | |
| Hutchinson Technology, Inc.* | | | 380 | | | | 1,322 | |
| Cyan, Inc.* | | | 130 | | | | 1,307 | |
| Model N, Inc.* | | | 130 | | | | 1,287 | |
| QAD, Inc. — Class A | | | 94 | | | | 1,282 | |
| Radisys Corp.* | | | 377 | | | | 1,210 | |
| TechTarget, Inc.* | | | 232 | | | | 1,158 | |
| Viasystems Group, Inc.* | | | 55 | | | | 795 | |
| Net Element International, Inc.* | | | 40 | | | | 184 | |
| Total Information Technology | | | | | | | 4,593,129 | |
| Industrials - 10.5% | | | | | | | | |
| Acuity Brands, Inc. | | | 712 | | | | 65,519 | |
| Middleby Corp.* | | | 312 | | | | 65,181 | |
| Chart Industries, Inc.* | | | 496 | | | | 61,028 | |
| US Airways Group, Inc.* | | | 3,110 | | | | 58,967 | |
| HEICO Corp. | | | 866 | | | | 58,664 | |
| Teledyne Technologies, Inc.* | | | 608 | | | | 51,637 | |
| EnerSys, Inc. | | | 781 | | | | 47,352 | |
| Actuant Corp. — Class A | | | 1,197 | | | | 46,491 | |
| Woodward, Inc. | | | 1,131 | | | | 46,179 | |
| CLARCOR, Inc. | | | 815 | | | | 45,257 | |
| Moog, Inc. — Class A* | | | 757 | | | | 44,413 | |
| EMCOR Group, Inc. | | | 1,104 | | | | 43,200 | |
| Esterline Technologies Corp.* | | | 509 | | | | 40,664 | |
| Watsco, Inc. | | | 425 | | | | 40,064 | |
| Corporate Executive Board Co. | | | 544 | | | | 39,506 | |
| DigitalGlobe, Inc.* | | | 1,235 | | | | 39,051 | |
| Generac Holdings, Inc. | | | 856 | | | | 36,500 | |
| Curtiss-Wright Corp. | | | 772 | | | | 36,253 | |
| Applied Industrial Technologies, Inc. | | | 697 | | | | 35,895 | |
| USG Corp.* | | | 1,249 | | | | 35,695 | |
| Deluxe Corp. | | | 832 | | | | 34,661 | |
| Advisory Board Co.* | | | 582 | | | | 34,617 | |
| Spirit Airlines, Inc.* | | | 990 | | | | 33,927 | |
| Polypore International, Inc.* | | | 760 | | | | 31,137 | |
| Barnes Group, Inc. | | | 886 | | | | 30,939 | |
| Franklin Electric Company, Inc. | | | 771 | | | | 30,377 | |
| Beacon Roofing Supply, Inc.* | | | 810 | | | | 29,864 | |
| MasTec, Inc.* | | | 978 | | | | 29,633 | |
| United Stationers, Inc. | | | 666 | | | | 28,972 | |
| Healthcare Services Group, Inc. | | | 1,116 | | | | 28,747 | |
| Herman Miller, Inc. | | | 969 | | | | 28,275 | |
| Swift Transportation Co. — Class A* | | | 1,386 | | | | 27,984 | |
| Tetra Tech, Inc.* | | | 1,071 | | | | 27,729 | |
| HNI Corp. | | | 751 | | | | 27,171 | |
| Mueller Industries, Inc. | | | 467 | | | | 25,998 | |
| Watts Water Technologies, Inc. — Class A | | | 458 | | | | 25,817 | |
| General Cable Corp. | | | 810 | | | | 25,718 | |
| TAL International Group, Inc. | | | 546 | | | | 25,515 | |
| Allegiant Travel Co. — Class A | | | 242 | | | | 25,497 | |
| JetBlue Airways Corp.* | | | 3,802 | | | | 25,321 | |
| FTI Consulting, Inc.* | | | 664 | | | | 25,099 | |
| RBC Bearings, Inc.* | | | 375 | | | | 24,709 | |
| UniFirst Corp. | | | 236 | | | | 24,643 | |
| On Assignment, Inc.* | | | 742 | | | | 24,485 | |
| Mine Safety Appliances Co. | | | 464 | | | | 23,947 | |
| Trimas Corp.* | | | 639 | | | | 23,835 | |
| Hub Group, Inc. — Class A* | | | 604 | | | | 23,695 | |
| ABM Industries, Inc. | | | 886 | | | | 23,585 | |
| Steelcase, Inc. — Class A | | | 1,384 | | | | 23,002 | |
| Brady Corp. — Class A | | | 753 | | | | 22,967 | |
| UTI Worldwide, Inc. | | | 1,490 | | | | 22,514 | |
| Brink’s Co. | | | 789 | | | | 22,329 | |
| Simpson Manufacturing Company, Inc. | | | 668 | | | | 21,757 | |
| Proto Labs, Inc.* | | | 280 | | | | 21,389 | |
| Mobile Mini, Inc.* | | | 623 | | | | 21,219 | |
| Orbital Sciences Corp.* | | | 979 | | | | 20,735 | |
| EnPro Industries, Inc.* | | | 343 | | | | 20,652 | |
| WageWorks, Inc.* | | | 408 | | | | 20,584 | |
| Mueller Water Products, Inc. — Class A | | | 2,576 | | | | 20,582 | |
| Huron Consulting Group, Inc.* | | | 379 | | | | 19,939 | |
| Forward Air Corp. | | | 492 | | | | 19,852 | |
| Atlas Air Worldwide Holdings, Inc.* | | | 427 | | | | 19,689 | |
| Granite Construction, Inc. | | | 642 | | | | 19,645 | |
| Aircastle Ltd. | | | 1,124 | | | | 19,569 | |
| G&K Services, Inc. — Class A | | | 323 | | | | 19,506 | |
| Raven Industries, Inc. | | | 593 | | | | 19,397 | |
| Interface, Inc. — Class A | | | 969 | | | | 19,225 | |
| Acacia Research Corp. | | | 807 | | | | 18,609 | |
| Kaydon Corp. | | | 523 | | | | 18,577 | |
| Matson, Inc. | | | 700 | | | | 18,361 | |
| Tennant Co. | | | 296 | | | | 18,352 | |
| CIRCOR International, Inc. | | | 293 | | | | 18,219 | |
| AAR Corp. | | | 666 | | | | 18,202 | |
| Cubic Corp. | | | 331 | | | | 17,768 | |
| AZZ, Inc. | | | 419 | | | | 17,539 | |
| Werner Enterprises, Inc. | | | 745 | | | | 17,381 | |
| Korn/Ferry International* | | | 810 | | | | 17,334 | |
| 76 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Lindsay Corp. | | | 211 | | | $ | 17,222 | |
| Kaman Corp. | | | 445 | | | | 16,848 | |
| Albany International Corp. — Class A | | | 459 | | | | 16,464 | |
| GrafTech International Ltd.* | | | 1,907 | | | | 16,114 | |
| TrueBlue, Inc.* | | | 668 | | | | 16,039 | |
| Knight Transportation, Inc. | | | 970 | | | | 16,024 | |
| GenCorp, Inc.* | | | 997 | | | | 15,982 | |
| Briggs & Stratton Corp. | | | 792 | | | | 15,935 | |
| II-VI, Inc.* | | | 835 | | | | 15,715 | |
| Exponent, Inc. | | | 215 | | | | 15,446 | |
| Aegion Corp. — Class A* | | | 644 | | | | 15,282 | |
| Griffon Corp. | | | 1,209 | | | | 15,161 | |
| Rush Enterprises, Inc. — Class A* | | | 570 | | | | 15,111 | |
| Hyster-Yale Materials Handling, Inc. | | | 168 | | | | 15,065 | |
| Dycom Industries, Inc.* | | | 536 | | | | 15,003 | |
| Primoris Services Corp. | | | 579 | | | | 14,747 | |
| McGrath RentCorp | | | 408 | | | | 14,566 | |
| Trex Company, Inc.* | | | 288 | | | | 14,265 | |
| Wesco Aircraft Holdings, Inc.* | | | 677 | | | | 14,170 | |
| ESCO Technologies, Inc. | | | 426 | | | | 14,156 | |
| Apogee Enterprises, Inc. | | | 471 | | | | 13,979 | |
| Universal Forest Products, Inc. | | | 328 | | | | 13,809 | |
| Insperity, Inc. | | | 367 | | | | 13,799 | |
| Team, Inc.* | | | 339 | | | | 13,475 | |
| Knoll, Inc. | | | 792 | | | | 13,416 | |
| Encore Wire Corp. | | | 340 | | | | 13,410 | |
| Textainer Group Holdings Ltd. | | | 350 | | | | 13,255 | |
| Wabash National Corp.* | | | 1,136 | | | | 13,246 | |
| Federal Signal Corp.* | | | 1,024 | | | | 13,179 | |
| Tutor Perini Corp.* | | | 606 | | | | 12,920 | |
| Titan International, Inc. | | | 882 | | | | 12,912 | |
| H&E Equipment Services, Inc.* | | | 485 | | | | 12,882 | |
| Sun Hydraulics Corp. | | | 352 | | | | 12,760 | |
| Navigant Consulting, Inc.* | | | 816 | | | | 12,615 | |
| Quad/Graphics, Inc. | | | 415 | | | | 12,599 | |
| Saia, Inc.* | | | 404 | | | | 12,597 | |
| Meritor, Inc.* | | | 1,591 | | | | 12,505 | |
| Taser International, Inc.* | | | 838 | | | | 12,495 | |
| Standex International Corp. | | | 208 | | | | 12,355 | |
| AAON, Inc. | | | 465 | | | | 12,350 | |
| ACCO Brands Corp.* | | | 1,852 | | | | 12,297 | |
| SkyWest, Inc. | | | 845 | | | | 12,269 | |
| Astec Industries, Inc. | | | 335 | | | | 12,047 | |
| DXP Enterprises, Inc.* | | | 152 | | | | 12,003 | |
| Altra Holdings, Inc. | | | 442 | | | | 11,894 | |
| John Bean Technologies Corp. | | | 474 | | | | 11,793 | |
| Quanex Building Products Corp. | | | 616 | | | | 11,599 | |
| ICF International, Inc.* | | | 326 | | | | 11,544 | |
| Rexnord Corp.* | | | 542 | | | | 11,274 | |
| Arkansas Best Corp. | | | 415 | | | | 10,653 | |
| Heartland Express, Inc. | | | 749 | | | | 10,628 | |
| Comfort Systems USA, Inc. | | | 618 | | | | 10,389 | |
| XPO Logistics, Inc.* | | | 473 | | | | 10,250 | |
| Astronics Corp.* | | | 206 | | | | 10,240 | |
| Greenbrier Companies, Inc.* | | | 412 | | | | 10,189 | |
| Thermon Group Holdings, Inc.* | | | 440 | | | | 10,168 | |
| Nortek, Inc.* | | | 146 | | | | 10,032 | |
| Gorman-Rupp Co. | | | 246 | | | | 9,870 | |
| Republic Airways Holdings, Inc.* | | | 816 | | | | 9,710 | |
| Blount International, Inc.* | | | 798 | | | | 9,664 | |
| Powell Industries, Inc.* | | | 154 | | | | 9,439 | |
| RPX Corp.* | | | 527 | | | | 9,238 | |
| US Ecology, Inc. | | | 306 | | | | 9,220 | |
| Resources Connection, Inc. | | | 669 | | | | 9,078 | |
| Engility Holdings, Inc.* | | | 280 | | | | 8,884 | |
| MYR Group, Inc.* | | | 354 | | | | 8,602 | |
| American Science & Engineering, Inc. | | | 142 | | | | 8,564 | |
| Roadrunner Transportation Systems, Inc.* | | | 300 | | | | 8,472 | |
| Kelly Services, Inc. — Class A | | | 434 | | | | 8,450 | |
| Viad Corp. | | | 325 | | | | 8,109 | |
| Kforce, Inc. | | | 443 | | | | 7,837 | |
| Barrett Business Services, Inc. | | | 116 | | | | 7,808 | |
| Ennis, Inc. | | | 432 | | | | 7,793 | |
| LB Foster Co. — Class A | | | 170 | | | | 7,776 | |
| West Corp. | | | 350 | | | | 7,760 | |
| Columbus McKinnon Corp.* | | | 322 | | | | 7,738 | |
| Great Lakes Dredge & Dock Corp. | | | 970 | | | | 7,197 | |
| Consolidated Graphics, Inc.* | | | 128 | | | | 7,176 | |
| Gibraltar Industries, Inc.* | | | 500 | | | | 7,130 | |
| InnerWorkings, Inc.* | | | 725 | | | | 7,120 | |
| Aerovironment, Inc.* | | | 307 | | | | 7,092 | |
| Aceto Corp. | | | 451 | | | | 7,045 | |
| KEYW Holding Corp.* | | | 523 | | | | 7,034 | |
| Multi-Color Corp. | | | 204 | | | | 6,922 | |
| Standard Parking Corp.* | | | 251 | | | | 6,749 | |
| Marten Transport Ltd. | | | 381 | | | | 6,534 | |
| EnerNOC, Inc.* | | | 434 | | | | 6,506 | |
| GP Strategies Corp.* | | | 247 | | | | 6,476 | |
| Hawaiian Holdings, Inc.* | | | 858 | | | | 6,384 | |
| CAI International, Inc.* | | | 274 | | | | 6,376 | |
| Air Transport Services Group, Inc.* | | | 847 | | | | 6,344 | |
| Layne Christensen Co.* | | | 317 | | | | 6,327 | |
| American Railcar Industries, Inc. | | | 160 | | | | 6,277 | |
| Celadon Group, Inc. | | | 331 | | | | 6,180 | |
| Echo Global Logistics, Inc.* | | | 294 | | | | 6,156 | |
| Furmanite Corp.* | | | 618 | | | | 6,118 | |
| Kratos Defense & Security Solutions, Inc.* | | | 728 | | | | 6,028 | |
| Kadant, Inc. | | | 178 | | | | 5,979 | |
| Capstone Turbine Corp.* | | | 4,992 | | | | 5,891 | |
| American Woodmark Corp.* | | | 169 | | | | 5,856 | |
| Kimball International, Inc. — Class B | | | 526 | | | | 5,833 | |
| Graham Corp. | | | 160 | | | | 5,781 | |
| National Presto Industries, Inc. | | | 82 | | | | 5,774 | |
| Heidrick & Struggles International, Inc. | | | 301 | | | | 5,737 | |
| Michael Baker Corp. | | | 140 | | | | 5,666 | |
| PowerSecure International, Inc.* | | | 348 | | | | 5,585 | |
| Global Power Equipment Group, Inc. | | | 275 | | | | 5,530 | |
| Alamo Group, Inc. | | | 113 | | | | 5,527 | |
| Douglas Dynamics, Inc. | | | 370 | | | | 5,450 | |
| Park-Ohio Holdings Corp.* | | | 140 | | | | 5,379 | |
| PGT, Inc.* | | | 537 | | | | 5,322 | |
| Energy Recovery, Inc.* | | | 720 | | | | 5,220 | |
| Dynamic Materials Corp. | | | 223 | | | | 5,169 | |
| Ducommun, Inc.* | | | 180 | | | | 5,162 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 77 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Pendrell Corp.* | | | 2,645 | | | $ | 5,131 | |
| Argan, Inc. | | | 232 | | | | 5,097 | |
| Northwest Pipe Co.* | | | 151 | | | | 4,965 | |
| Lydall, Inc.* | | | 285 | | | | 4,893 | |
| Pike Electric Corp. | | | 419 | | | | 4,743 | |
| Insteel Industries, Inc. | | | 290 | | | | 4,669 | |
| Orion Marine Group, Inc.* | | | 448 | | | | 4,664 | |
| Titan Machinery, Inc.* | | | 288 | | | | 4,628 | |
| CBIZ, Inc.* | | | 618 | | | | 4,598 | |
| NN, Inc. | | | 286 | | | | 4,450 | |
| ExOne Co.* | | | 103 | | | | 4,388 | |
| Mistras Group, Inc.* | | | 258 | | | | 4,386 | |
| TMS International Corp. — Class A | | | 248 | | | | 4,325 | |
| Builders FirstSource, Inc.* | | | 729 | | | | 4,287 | |
| Sparton Corp.* | | | 168 | | | | 4,284 | |
| NCI Building Systems, Inc.* | | | 334 | | | | 4,255 | |
| FreightCar America, Inc. | | | 200 | | | | 4,136 | |
| CECO Environmental Corp. | | | 290 | | | | 4,083 | |
| Houston Wire & Cable Co. | | | 298 | | | | 4,014 | |
| Patriot Transportation Holding, Inc.* | | | 118 | | | | 3,992 | |
| Performant Financial Corp.* | | | 365 | | | | 3,986 | |
| Odyssey Marine Exploration, Inc.* | | | 1,292 | | | | 3,889 | |
| Twin Disc, Inc. | | | 145 | | | | 3,789 | |
| Casella Waste Systems, Inc. — Class A* | | | 639 | | | | 3,674 | |
| Ply Gem Holdings, Inc.* | | | 260 | | | | 3,635 | |
| CDI Corp. | | | 231 | | | | 3,537 | |
| Pacer International, Inc.* | | | 569 | | | | 3,522 | |
| FuelCell Energy, Inc.*,1 | | | 2,598 | | | | 3,351 | |
| Accuride Corp.* | | | 651 | | | | 3,346 | |
| Preformed Line Products Co. | | | 46 | | | | 3,309 | |
| Patrick Industries, Inc.* | | | 110 | | | | 3,306 | |
| Ameresco, Inc. — Class A* | | | 323 | | | | 3,236 | |
| Schawk, Inc. — Class A | | | 215 | | | | 3,191 | |
| Quality Distribution, Inc.* | | | 345 | | | | 3,188 | |
| Miller Industries, Inc. | | | 186 | | | | 3,158 | |
| VSE Corp. | | | 67 | | | | 3,146 | |
| Coleman Cable, Inc. | | | 149 | | | | 3,145 | |
| Flow International Corp.* | | | 786 | | | | 3,136 | |
| Commercial Vehicle Group, Inc.* | | | 389 | | | | 3,096 | |
| Costa, Inc.* | | | 161 | | | | 3,062 | |
| Courier Corp. | | | 193 | | | | 3,053 | |
| YRC Worldwide, Inc.* | | | 180 | | | | 3,038 | |
| CRA International, Inc.* | | | 163 | | | | 3,035 | |
| Hardinge, Inc. | | | 196 | | | | 3,028 | |
| LSI Industries, Inc. | | | 348 | | | | 2,937 | |
| ARC Document Solutions, Inc.* | | | 625 | | | | 2,869 | |
| Tecumseh Products Co. — Class A* | | | 310 | | | | 2,775 | |
| Hurco Companies, Inc. | | | 107 | | | | 2,767 | |
| Cenveo, Inc.* | | | 898 | | | | 2,649 | |
| Ampco-Pittsburgh Corp. | | | 147 | | | | 2,634 | |
| Heritage-Crystal Clean, Inc.* | | | 145 | | | | 2,613 | |
| International Shipholding Corp. | | | 94 | | | | 2,579 | |
| Franklin Covey Co.* | | | 143 | | | | 2,567 | |
| PMFG, Inc.* | | | 344 | | | | 2,546 | |
| National Technical Systems, Inc.* | | | 110 | | | | 2,514 | |
| Sterling Construction Company, Inc.* | | | 269 | | | | 2,488 | |
| Universal Truckload Services, Inc. | | | 91 | | | | 2,426 | |
| Power Solutions International, Inc.* | | | 40 | | | | 2,365 | |
| Vicor Corp.* | | | 285 | | | | 2,331 | |
| Global Brass & Copper Holdings, Inc.* | | | 130 | | | | 2,280 | |
| Manitex International, Inc.* | | | 208 | | | | 2,273 | |
| LMI Aerospace, Inc.* | | | 170 | | | | 2,271 | |
| Edgen Group, Inc. — Class A* | | | 280 | | | | 2,128 | |
| Enphase Energy, Inc.* | | | 257 | | | | 2,092 | |
| Xerium Technologies, Inc.* | | | 180 | | | | 2,086 | |
| TRC Companies, Inc.* | | | 263 | | | | 1,946 | |
| American Superconductor Corp.* | | | 795 | | | | 1,860 | |
| Acorn Energy, Inc. | | | 301 | | | | 1,776 | |
| Innovative Solutions & Support, Inc. | | | 200 | | | | 1,592 | |
| API Technologies Corp.* | | | 524 | | | | 1,535 | |
| Intersections, Inc. | | | 161 | | | | 1,412 | |
| NL Industries, Inc. | | | 121 | | | | 1,373 | |
| Ultrapetrol Bahamas Ltd.* | | | 350 | | | | 1,309 | |
| Revolution Lighting Technologies, Inc.* | | | 490 | | | | 1,254 | |
| Swisher Hygiene, Inc.* | | | 1,863 | | | | 1,130 | |
| BlueLinx Holdings, Inc.* | | | 556 | | | | 1,084 | |
| Omega Flex, Inc. | | | 51 | | | | 963 | |
| Erickson Air-Crane, Inc.* | | | 60 | | | | 940 | |
| Compx International, Inc. | | | 17 | | | | 221 | |
| Total Industrials | | | | | | | 3,681,922 | |
| Consumer Discretionary - 10.0% | | | | | | | | |
| Brunswick Corp. | | | 1,496 | | | | 59,705 | |
| Sotheby’s | | | 1,123 | | | | 55,174 | |
| Dana Holding Corp. | | | 2,401 | | | | 54,840 | |
| Tenneco, Inc.* | | | 992 | | | | 50,096 | |
| Fifth & Pacific Companies, Inc.* | | | 1,975 | | | | 49,631 | |
| Lumber Liquidators Holdings, Inc.* | | | 452 | | | | 48,206 | |
| Wolverine World Wide, Inc. | | | 822 | | | | 47,865 | |
| Pool Corp. | | | 768 | | | | 43,108 | |
| Live Nation Entertainment, Inc.* | | | 2,310 | | | | 42,850 | |
| Vail Resorts, Inc. | | | 586 | | | | 40,657 | |
| Rent-A-Center, Inc. — Class A | | | 1,057 | | | | 40,271 | |
| Cheesecake Factory, Inc. | | | 869 | | | | 38,192 | |
| Sinclair Broadcast Group, Inc. — Class A | | | 1,126 | | | | 37,745 | |
| Life Time Fitness, Inc.* | | | 705 | | | | 36,286 | |
| Shutterfly, Inc.* | | | 639 | | | | 35,707 | |
| Steven Madden Ltd.* | | | 659 | | | | 35,474 | |
| Buffalo Wild Wings, Inc.* | | | 311 | | | | 34,589 | |
| Cracker Barrel Old Country Store, Inc. | | | 324 | | | | 33,450 | |
| Express, Inc.* | | | 1,389 | | | | 32,768 | |
| Cooper Tire & Rubber Co. | | | 1,034 | | | | 31,847 | |
| Iconix Brand Group, Inc.* | | | 945 | | | | 31,393 | |
| Ryland Group, Inc. | | | 761 | | | | 30,852 | |
| Pier 1 Imports, Inc. | | | 1,558 | | | | 30,413 | |
| Grand Canyon Education, Inc.* | | | 737 | | | | 29,687 | |
| HSN, Inc. | | | 547 | | | | 29,330 | |
| Penske Automotive Group, Inc. | | | 681 | | | | 29,100 | |
| Jack in the Box, Inc.* | | | 727 | | | | 29,080 | |
| Group 1 Automotive, Inc. | | | 366 | | | | 28,431 | |
| Men’s Wearhouse, Inc. | | | 824 | | | | 28,057 | |
| ANN, Inc.* | | | 767 | | | | 27,781 | |
| Meredith Corp. | | | 583 | | | | 27,763 | |
| Saks, Inc.* | | | 1,705 | | | | 27,177 | |
| 78 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Asbury Automotive Group, Inc.* | | | 505 | | | $ | 26,866 | |
| Texas Roadhouse, Inc. — Class A | | | 1,016 | | | | 26,700 | |
| Lithia Motors, Inc. — Class A | | | 363 | | | | 26,484 | |
| New York Times Co. — Class A* | | | 2,104 | | | | 26,447 | |
| Genesco, Inc.* | | | 400 | | | | 26,232 | |
| Bob Evans Farms, Inc. | | | 458 | | | | 26,230 | |
| Meritage Homes Corp.* | | | 588 | | | | 25,255 | |
| Buckle, Inc. | | | 459 | | | | 24,809 | |
| Hillenbrand, Inc. | | | 904 | | | | 24,742 | |
| KB Home | | | 1,372 | | | | 24,723 | |
| Hibbett Sports, Inc.* | | | 430 | | | | 24,145 | |
| Pinnacle Entertainment, Inc.* | | | 955 | | | | 23,923 | |
| Monro Muffler Brake, Inc.1 | | | 509 | | | | 23,663 | |
| Five Below, Inc.* | | | 538 | | | | 23,538 | |
| Belo Corp. — Class A | | | 1,711 | | | | 23,441 | |
| WMS Industries, Inc.* | | | 898 | | | | 23,303 | |
| Helen of Troy Ltd.* | | | 518 | | | | 22,895 | |
| Outerwall, Inc.* | | | 452 | | | | 22,595 | |
| Select Comfort Corp.* | | | 924 | | | | 22,499 | |
| Children’s Place Retail Stores, Inc.* | | | 376 | | | | 21,755 | |
| Nexstar Broadcasting Group, Inc. — Class A | | | 486 | | | | 21,629 | |
| American Axle & Manufacturing Holdings, Inc.* | | | 1,096 | | | | 21,613 | |
| Vitamin Shoppe, Inc.* | | | 492 | | | | 21,525 | |
| Bloomin’ Brands, Inc.* | | | 906 | | | | 21,391 | |
| Marriott Vacations Worldwide Corp.* | | | 479 | | | | 21,075 | |
| SHFL Entertainment, Inc.* | | | 911 | | | | 20,953 | |
| Krispy Kreme Doughnuts, Inc.* | | | 1,071 | | | | 20,713 | |
| Orient-Express Hotels Ltd. — Class A* | | | 1,571 | | | | 20,392 | |
| Dorman Products, Inc. | | | 408 | | | | 20,216 | |
| Jos. A. Bank Clothiers, Inc.* | | | 459 | | | | 20,178 | |
| Finish Line, Inc. — Class A | | | 808 | | | | 20,095 | |
| Sturm Ruger & Company, Inc. | | | 320 | | | | 20,042 | |
| Skechers U.S.A., Inc. — Class A* | | | 630 | | | | 19,599 | |
| Crocs, Inc.* | | | 1,438 | | | | 19,571 | |
| Churchill Downs, Inc. | | | 226 | | | | 19,554 | |
| Jones Group, Inc. | | | 1,301 | | | | 19,528 | |
| Office Depot, Inc.* | | | 4,028 | | | | 19,455 | |
| La-Z-Boy, Inc. | | | 855 | | | | 19,417 | |
| Standard Pacific Corp.* | | | 2,429 | | | | 19,213 | |
| MDC Holdings, Inc. | | | 634 | | | | 19,026 | |
| DineEquity, Inc. | | | 275 | | | | 18,975 | |
| Ascent Capital Group, Inc. — Class A* | | | 232 | | | | 18,704 | |
| Valassis Communications, Inc. | | | 642 | | | | 18,541 | |
| Conn’s, Inc.* | | | 367 | | | | 18,365 | |
| Restoration Hardware Holdings, Inc.* | | | 288 | | | | 18,245 | |
| OfficeMax, Inc. | | | 1,421 | | | | 18,175 | |
| Papa John’s International, Inc. | | | 260 | | | | 18,169 | |
| National CineMedia, Inc. | | | 933 | | | | 17,596 | |
| Multimedia Games Holding Company, Inc.* | | | 509 | | | | 17,586 | |
| iRobot Corp.* | | | 464 | | | | 17,479 | |
| AFC Enterprises, Inc.* | | | 398 | | | | 17,349 | |
| Matthews International Corp. — Class A | | | 444 | | | | 16,908 | |
| Drew Industries, Inc. | | | 371 | | | | 16,895 | |
| Brown Shoe Company, Inc. | | | 708 | | | | 16,617 | |
| Sonic Corp.* | | | 932 | | | | 16,543 | |
| Red Robin Gourmet Burgers, Inc.* | | | 232 | | | | 16,495 | |
| Boyd Gaming Corp.* | | | 1,128 | | | | 15,961 | |
| Tumi Holdings, Inc.* | | | 791 | | | | 15,939 | |
| Stewart Enterprises, Inc. — Class A | | | 1,196 | | | | 15,715 | |
| G-III Apparel Group Ltd.* | | | 282 | | | | 15,394 | |
| Quiksilver, Inc.* | | | 2,165 | | | | 15,220 | |
| Oxford Industries, Inc. | | | 222 | | | | 15,092 | |
| Sonic Automotive, Inc. — Class A | | | 634 | | | | 15,089 | |
| Interval Leisure Group, Inc. | | | 638 | | | | 15,076 | |
| International Speedway Corp. — Class A | | | 457 | | | | 14,761 | |
| LifeLock, Inc.* | | | 990 | | | | 14,682 | |
| Steiner Leisure Ltd.* | | | 247 | | | | 14,432 | |
| Loral Space & Communications, Inc. | | | 212 | | | | 14,359 | |
| K12, Inc.* | | | 447 | | | | 13,803 | |
| Francesca’s Holdings Corp.* | | | 716 | | | | 13,346 | |
| CEC Entertainment, Inc. | | | 286 | | | | 13,116 | |
| Columbia Sportswear Co. | | | 212 | | | | 12,769 | |
| Cato Corp. — Class A | | | 453 | | | | 12,675 | |
| Core-Mark Holding Company, Inc. | | | 190 | | | | 12,624 | |
| Scientific Games Corp. — Class A* | | | 776 | | | | 12,548 | |
| Scholastic Corp. | | | 436 | | | | 12,491 | |
| Movado Group, Inc. | | | 285 | | | | 12,469 | |
| Arctic Cat, Inc. | | | 216 | | | | 12,323 | |
| Fiesta Restaurant Group, Inc.* | | | 327 | | | | 12,315 | |
| Caesars Entertainment Corp.* | | | 614 | | | | 12,102 | |
| Aeropostale, Inc.* | | | 1,276 | | | | 11,994 | |
| Winnebago Industries, Inc.* | | | 461 | | | | 11,968 | |
| ITT Educational Services, Inc.* | | | 380 | | | | 11,780 | |
| BJ’s Restaurants, Inc.* | | | 410 | | | | 11,775 | |
| MDC Partners, Inc. — Class A | | | 415 | | | | 11,612 | |
| Smith & Wesson Holding Corp.* | | | 1,052 | | | | 11,561 | |
| Biglari Holdings, Inc.* | | | 28 | | | | 11,555 | |
| Ethan Allen Interiors, Inc. | | | 412 | | | | 11,482 | |
| Regis Corp. | | | 772 | | | | 11,333 | |
| Modine Manufacturing Co.* | | | 768 | | | | 11,236 | |
| Pep Boys-Manny Moe & Jack* | | | 877 | | | | 10,936 | |
| American Public Education, Inc.* | | | 284 | | | | 10,735 | |
| Tuesday Morning Corp.* | | | 702 | | | | 10,720 | |
| Gentherm, Inc.* | | | 545 | | | | 10,399 | |
| Standard Motor Products, Inc. | | | 317 | | | | 10,195 | |
| Stage Stores, Inc. | | | 530 | | | | 10,176 | |
| rue21, Inc.* | | | 247 | | | | 9,964 | |
| Capella Education Co.* | | | 176 | | | | 9,955 | |
| LeapFrog Enterprises, Inc. — Class A* | | | 1,043 | | | | 9,825 | |
| Hovnanian Enterprises, Inc. — Class A* | | | 1,846 | | | | 9,655 | |
| Chuy’s Holdings, Inc.* | | | 267 | | | | 9,583 | |
| Zumiez, Inc.*,1 | | | 346 | | | | 9,527 | |
| Fred’s, Inc. — Class A | | | 600 | | | | 9,390 | |
| EW Scripps Co. — Class A* | | | 507 | | | | 9,303 | |
| Denny’s Corp.* | | | 1,514 | | | | 9,266 | |
| Maidenform Brands, Inc.* | | | 379 | | | | 8,903 | |
| Tile Shop Holdings, Inc.* | | | 300 | | | | 8,847 | |
| Universal Electronics, Inc.* | | | 242 | | | | 8,719 | |
| Barnes & Noble, Inc.* | | | 660 | | | | 8,540 | |
| Blue Nile, Inc.* | | | 206 | | | | 8,432 | |
| Carmike Cinemas, Inc.* | | | 377 | | | | 8,324 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 79 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Callaway Golf Co. | | | 1,153 | | | $ | 8,209 | |
| Zale Corp.* | | | 540 | | | | 8,208 | |
| Libbey, Inc.* | | | 345 | | | | 8,204 | |
| M/I Homes, Inc.* | | | 392 | | | | 8,083 | |
| Haverty Furniture Companies, Inc. | | | 316 | | | | 7,751 | |
| Strayer Education, Inc. | | | 180 | | | | 7,474 | |
| Ruby Tuesday, Inc.* | | | 993 | | | | 7,448 | |
| Beazer Homes USA, Inc.* | | | 406 | | | | 7,308 | |
| Vera Bradley, Inc.* | | | 348 | | | | 7,155 | |
| Destination Maternity Corp. | | | 223 | | | | 7,091 | |
| Ruth’s Hospitality Group, Inc. | | | 587 | | | | 6,962 | |
| Mattress Firm Holding Corp.* | | | 218 | | | | 6,932 | |
| Bright Horizons Family Solutions, Inc.* | | | 190 | | | | 6,808 | |
| NutriSystem, Inc. | | | 469 | | | | 6,744 | |
| Superior Industries International, Inc. | | | 376 | | | | 6,704 | |
| Central European Media Enterprises Ltd. — Class A* | | | 1,255 | | | | 6,614 | |
| Shoe Carnival, Inc. | | | 243 | | | | 6,563 | |
| Gray Television, Inc.* | | | 830 | | | | 6,516 | |
| Cumulus Media, Inc. — Class A* | | | 1,229 | | | | 6,514 | |
| Digital Generation, Inc.* | | | 495 | | | | 6,400 | |
| Cavco Industries, Inc.* | | | 111 | | | | 6,321 | |
| Stein Mart, Inc. | | | 455 | | | | 6,243 | |
| Harte-Hanks, Inc. | | | 704 | | | | 6,216 | |
| Journal Communications, Inc. — Class A* | | | 722 | | | | 6,173 | |
| Education Management Corp.* | | | 652 | | | | 5,946 | |
| America’s Car-Mart, Inc.* | | | 128 | | | | 5,774 | |
| Wet Seal, Inc. — Class A* | | | 1,454 | | | | 5,714 | |
| Rentrak Corp.* | | | 175 | | | | 5,709 | |
| Unifi, Inc.* | | | 244 | | | | 5,700 | |
| Bridgepoint Education, Inc.* | | | 309 | | | | 5,574 | |
| RadioShack Corp.* | | | 1,624 | | | | 5,538 | |
| Overstock.com, Inc.* | | | 186 | | | | 5,519 | |
| PetMed Express, Inc. | | | 331 | | | | 5,392 | |
| Federal-Mogul Corp.* | | | 317 | | | | 5,322 | |
| Entravision Communications Corp. — Class A | | | 899 | | | | 5,304 | |
| Town Sports International Holdings, Inc. | | | 400 | | | | 5,192 | |
| Stoneridge, Inc.* | | | 477 | | | | 5,156 | |
| Carriage Services, Inc. — Class A | | | 255 | | | | 4,947 | |
| Bravo Brio Restaurant Group, Inc.* | | | 323 | | | | 4,877 | |
| Remy International, Inc. | | | 240 | | | | 4,858 | |
| World Wrestling Entertainment, Inc. — Class A | | | 471 | | | | 4,790 | |
| MarineMax, Inc.* | | | 382 | | | | 4,660 | |
| NACCO Industries, Inc. — Class A | | | 84 | | | | 4,655 | |
| Black Diamond, Inc.* | | | 379 | | | | 4,609 | |
| William Lyon Homes — Class A* | | | 226 | | | | 4,592 | |
| Citi Trends, Inc.* | | | 262 | | | | 4,580 | |
| Media General, Inc. — Class A* | | | 320 | | | | 4,563 | |
| Fuel Systems Solutions, Inc.* | | | 231 | | | | 4,541 | |
| Marcus Corp. | | | 307 | | | | 4,461 | |
| Sears Hometown and Outlet Stores, Inc.* | | | 140 | | | | 4,445 | |
| Destination XL Group, Inc.* | | | 686 | | | | 4,438 | |
| Big 5 Sporting Goods Corp. | | | 272 | | | | 4,374 | |
| Christopher & Banks Corp.* | | | 590 | | | | 4,254 | |
| Kirkland’s, Inc.* | | | 229 | | | | 4,223 | |
| Universal Technical Institute, Inc. | | | 348 | | | | 4,221 | |
| VOXX International Corp. — Class A* | | | 300 | | | | 4,110 | |
| Perry Ellis International, Inc. | | | 205 | | | | 3,862 | |
| Orbitz Worldwide, Inc.* | | | 396 | | | | 3,813 | |
| hhgregg, Inc.* | | | 210 | | | | 3,761 | |
| Jamba, Inc.* | | | 280 | | | | 3,746 | |
| Nautilus, Inc.* | | | 508 | | | | 3,668 | |
| Saga Communications, Inc. — Class A | | | 82 | | | | 3,639 | |
| CSS Industries, Inc. | | | 147 | | | | 3,529 | |
| Entercom Communications Corp. — Class A* | | | 398 | | | | 3,494 | |
| TRI Pointe Homes, Inc.* | | | 237 | | | | 3,479 | |
| Speedway Motorsports, Inc. | | | 194 | | | | 3,473 | |
| bebe stores, Inc. | | | 569 | | | | 3,465 | |
| Del Frisco’s Restaurant Group, Inc.* | | | 170 | | | | 3,429 | |
| Spartan Motors, Inc. | | | 561 | | | | 3,405 | |
| Morgans Hotel Group Co.* | | | 439 | | | | 3,376 | |
| West Marine, Inc.* | | | 275 | | | | 3,355 | |
| Weyco Group, Inc. | | | 118 | | | | 3,342 | |
| RG Barry Corp. | | | 167 | | | | 3,158 | |
| Vitacost.com, Inc.* | | | 359 | | | | 3,052 | |
| Carrols Restaurant Group, Inc.* | | | 494 | | | | 3,013 | |
| McClatchy Co. — Class A* | | | 991 | | | | 2,973 | |
| Bassett Furniture Industries, Inc. | | | 181 | | | | 2,930 | |
| Mac-Gray Corp. | | | 199 | | | | 2,897 | |
| Corinthian Colleges, Inc.* | | | 1,305 | | | | 2,858 | |
| ValueVision Media, Inc. — Class A* | | | 640 | | | | 2,784 | |
| New York & Company, Inc.* | | | 471 | | | | 2,722 | |
| Nathan’s Famous, Inc.* | | | 51 | | | | 2,692 | |
| Hooker Furniture Corp. | | | 179 | | | | 2,676 | |
| Culp, Inc. | | | 142 | | | | 2,657 | |
| Lifetime Brands, Inc. | | | 173 | | | | 2,645 | |
| Monarch Casino & Resort, Inc.* | | | 139 | | | | 2,638 | |
| Isle of Capri Casinos, Inc.* | | | 347 | | | | 2,623 | |
| Winmark Corp. | | | 34 | | | | 2,506 | |
| Career Education Corp.* | | | 904 | | | | 2,495 | |
| Luby’s, Inc.* | | | 339 | | | | 2,434 | |
| AH Belo Corp. — Class A | | | 310 | | | | 2,434 | |
| Dex Media, Inc.* | | | 295 | | | | 2,398 | |
| Bon-Ton Stores, Inc. | | | 223 | | | | 2,353 | |
| Tilly’s, Inc. — Class A* | | | 161 | | | | 2,336 | |
| Global Sources Ltd.* | | | 314 | | | | 2,330 | |
| Pacific Sunwear of California, Inc.* | | | 760 | | | | 2,280 | |
| Zagg, Inc.* | | | 501 | | | | 2,255 | |
| Johnson Outdoors, Inc. — Class A* | | | 84 | | | | 2,253 | |
| Flexsteel Industries, Inc. | | | 83 | | | | 2,073 | |
| Blyth, Inc. | | | 149 | | | | 2,061 | |
| 1-800-Flowers.com, Inc. — Class A* | | | 416 | | | | 2,051 | |
| Tower International, Inc.* | | | 99 | | | | 1,979 | |
| ReachLocal, Inc.* | | | 166 | | | | 1,977 | |
| Daily Journal Corp.* | | | 13 | | | | 1,911 | |
| Ignite Restaurant Group, Inc.* | | | 123 | | | | 1,909 | |
| Reading International, Inc. — Class A* | | | 281 | | | | 1,846 | |
| Lincoln Educational Services Corp. | | | 397 | | | | 1,830 | |
| EveryWare Global, Inc.* | | | 160 | | | | 1,824 | |
| Skullcandy, Inc.* | | | 293 | | | | 1,811 | |
| Einstein Noah Restaurant Group, Inc. | | | 104 | | | | 1,801 | |
| 80 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Crown Media Holdings, Inc. — Class A* | | | 566 | | | $ | 1,743 | |
| Systemax, Inc. | | | 181 | | | | 1,678 | |
| Hemisphere Media Group, Inc.* | | | 140 | | | | 1,645 | |
| Body Central Corp.* | | | 268 | | | | 1,635 | |
| Gordmans Stores, Inc. | | | 141 | | | | 1,586 | |
| Marine Products Corp. | | | 168 | | | | 1,525 | |
| JAKKS Pacific, Inc. | | | 308 | | | | 1,383 | |
| Salem Communications Corp. — Class A | | | 166 | | | | 1,374 | |
| JTH Holding, Inc. — Class A* | | | 70 | | | | 1,327 | |
| Shiloh Industries, Inc. | | | 101 | | | | 1,323 | |
| American Apparel, Inc.* | | | 950 | | | | 1,235 | |
| Diversified Restaurant Holdings, Inc.* | | | 170 | | | | 1,115 | |
| Martha Stewart Living Omnimedia, Inc. — Class A* | | | 475 | | | | 1,093 | |
| Trans World Entertainment Corp. | | | 180 | | | | 833 | |
| Beasley Broadcasting Group, Inc. — Class A | | | 76 | | | | 660 | |
| Total Consumer Discretionary | | | | | | | 3,522,723 | |
| Health Care - 9.3% | | | | | | | | |
| Isis Pharmaceuticals, Inc.* | | | 1,830 | | | | 68,697 | |
| athenahealth, Inc.* | | | 601 | | | | 65,246 | |
| Alnylam Pharmaceuticals, Inc.* | | | 948 | | | | 60,680 | |
| Align Technology, Inc.* | | | 1,196 | | | | 57,551 | |
| Centene Corp.* | | | 889 | | | | 56,861 | |
| NPS Pharmaceuticals, Inc.* | | | 1,636 | | | | 52,040 | |
| WellCare Health Plans, Inc.* | | | 711 | | | | 49,585 | |
| HealthSouth Corp. | | | 1,427 | | | | 49,202 | |
| Questcor Pharmaceuticals, Inc. | | | 848 | | | | 49,183 | |
| PAREXEL International Corp.* | | | 942 | | | | 47,316 | |
| Celldex Therapeutics, Inc.* | | | 1,322 | | | | 46,838 | |
| West Pharmaceutical Services, Inc. | | | 1,130 | | | | 46,499 | |
| Medidata Solutions, Inc.* | | | 443 | | | | 43,826 | |
| Cepheid, Inc.* | | | 1,104 | | | | 43,100 | |
| Team Health Holdings, Inc.* | | | 1,125 | | | | 42,683 | |
| ViroPharma, Inc.* | | | 1,069 | | | | 42,011 | |
| STERIS Corp. | | | 964 | | | | 41,412 | |
| Aegerion Pharmaceuticals, Inc.* | | | 482 | | | | 41,312 | |
| Owens & Minor, Inc. | | | 1,037 | | | | 35,870 | |
| Thoratec Corp.* | | | 950 | | | | 35,426 | |
| Medicines Co.* | | | 1,029 | | | | 34,492 | |
| Haemonetics Corp.* | | | 836 | | | | 33,340 | |
| DexCom, Inc.* | | | 1,150 | | | | 32,465 | |
| MWI Veterinary Supply, Inc.* | | | 212 | | | | 31,664 | |
| Insulet Corp.* | | | 871 | | | | 31,565 | |
| ACADIA Pharmaceuticals, Inc.* | | | 1,147 | | | | 31,508 | |
| HMS Holdings Corp.* | | | 1,435 | | | | 30,867 | |
| Air Methods Corp. | | | 643 | | | | 27,392 | |
| Opko Health, Inc.* | | | 3,055 | | | | 26,915 | |
| Magellan Health Services, Inc.* | | | 443 | | | | 26,562 | |
| Sarepta Therapeutics, Inc.* | | | 540 | | | | 25,504 | |
| MedAssets, Inc.* | | | 993 | | | | 25,242 | |
| Acorda Therapeutics, Inc.* | | | 724 | | | | 24,819 | |
| ImmunoGen, Inc.*,1 | | | 1,387 | | | | 23,607 | |
| Neogen Corp.* | | | 386 | | | | 23,438 | |
| Impax Laboratories, Inc.* | | | 1,133 | | | | 23,238 | |
| Cyberonics, Inc.* | | | 454 | | | | 23,036 | |
| Acadia Healthcare Company, Inc.* | | | 574 | | | | 22,633 | |
| Pacira Pharmaceuticals, Inc.* | | | 451 | | | | 21,689 | |
| Chemed Corp. | | | 303 | | | | 21,665 | |
| Masimo Corp. | | | 800 | | | | 21,312 | |
| Volcano Corp.* | | | 888 | | | | 21,241 | |
| Amsurg Corp. — Class A* | | | 520 | | | | 20,644 | |
| Santarus, Inc.* | | | 911 | | | | 20,561 | |
| InterMune, Inc.* | | | 1,323 | | | | 20,335 | |
| HeartWare International, Inc.* | | | 275 | | | | 20,133 | |
| MAKO Surgical Corp.* | | | 678 | | | | 20,008 | |
| Puma Biotechnology, Inc.* | | | 370 | | | | 19,854 | |
| Nektar Therapeutics* | | | 1,881 | | | | 19,656 | |
| Hanger, Inc.* | | | 567 | | | | 19,142 | |
| Arena Pharmaceuticals, Inc.*,1 | | | 3,569 | | | | 18,809 | |
| Akorn, Inc.* | | | 952 | | | | 18,735 | |
| Synageva BioPharma Corp.* | | | 290 | | | | 18,360 | |
| PDL BioPharma, Inc. | | | 2,298 | | | | 18,315 | |
| Ironwood Pharmaceuticals, Inc. — Class A* | | | 1,530 | | | | 18,131 | |
| NuVasive, Inc.* | | | 723 | | | | 17,706 | |
| Exelixis, Inc.* | | | 3,015 | | | | 17,547 | |
| Wright Medical Group, Inc.* | | | 655 | | | | 17,082 | |
| Cantel Medical Corp. | | | 532 | | | | 16,944 | |
| Analogic Corp. | | | 203 | | | | 16,776 | |
| Endologix, Inc.* | | | 1,023 | | | | 16,501 | |
| ArthroCare Corp.* | | | 463 | | | | 16,474 | |
| Molina Healthcare, Inc.* | | | 455 | | | | 16,198 | |
| Halozyme Therapeutics, Inc.* | | | 1,462 | | | | 16,140 | |
| Meridian Bioscience, Inc. | | | 670 | | | | 15,846 | |
| Globus Medical, Inc. — Class A* | | | 899 | | | | 15,697 | |
| Clovis Oncology, Inc.* | | | 258 | | | | 15,681 | |
| Vivus, Inc.*,1 | | | 1,656 | | | | 15,434 | |
| Abaxis, Inc. | | | 361 | | | | 15,198 | |
| CONMED Corp. | | | 446 | | | | 15,160 | |
| Auxilium Pharmaceuticals, Inc.* | | | 799 | | | | 14,566 | |
| ICU Medical, Inc.* | | | 214 | | | | 14,537 | |
| Raptor Pharmaceutical Corp.* | | | 971 | | | | 14,507 | |
| IPC The Hospitalist Company, Inc.* | | | 281 | | | | 14,334 | |
| Quality Systems, Inc. | | | 658 | | | | 14,298 | |
| MannKind Corp.* | | | 2,441 | | | | 13,914 | |
| Infinity Pharmaceuticals, Inc.* | | | 789 | | | | 13,768 | |
| Keryx Biopharmaceuticals, Inc.* | | | 1,345 | | | | 13,585 | |
| Exact Sciences Corp.* | | | 1,141 | | | | 13,475 | |
| Quidel Corp.* | | | 471 | | | | 13,376 | |
| Astex Pharmaceuticals, Inc.* | | | 1,555 | | | | 13,186 | |
| Omnicell, Inc.* | | | 555 | | | | 13,142 | |
| Greatbatch, Inc.* | | | 385 | | | | 13,102 | |
| NxStage Medical, Inc.* | | | 986 | | | | 12,976 | |
| Ensign Group, Inc. | | | 314 | | | | 12,909 | |
| Integra LifeSciences Holdings Corp.* | | | 320 | | | | 12,880 | |
| ExamWorks Group, Inc.* | | | 494 | | | | 12,839 | |
| HealthStream, Inc.* | | | 332 | | | | 12,576 | |
| Neurocrine Biosciences, Inc.* | | | 1,108 | | | | 12,543 | |
| Ligand Pharmaceuticals, Inc. — Class B* | | | 287 | | | | 12,421 | |
| Dyax Corp.* | | | 1,797 | | | | 12,327 | |
| Emeritus Corp.* | | | 662 | | | | 12,267 | |
| Luminex Corp.* | | | 610 | | | | 12,200 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 81 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Bio-Reference Labs, Inc.* | | | 407 | | | $ | 12,161 | |
| ABIOMED, Inc.* | | | 635 | | | | 12,109 | |
| Kindred Healthcare, Inc. | | | 890 | | | | 11,953 | |
| Vanguard Health Systems, Inc.* | | | 568 | | | | 11,934 | |
| Array BioPharma, Inc.* | | | 1,918 | | | | 11,930 | |
| Momenta Pharmaceuticals, Inc.* | | | 788 | | | | 11,339 | |
| Spectranetics Corp.* | | | 661 | | | | 11,092 | |
| AMN Healthcare Services, Inc.* | | | 750 | | | | 10,320 | |
| Computer Programs & Systems, Inc. | | | 176 | | | | 10,296 | |
| Healthways, Inc.* | | | 553 | | | | 10,236 | |
| Optimer Pharmaceuticals, Inc.* | | | 807 | | | | 10,168 | |
| AVANIR Pharmaceuticals, Inc. — Class A* | | | 2,382 | | | | 10,100 | |
| Capital Senior Living Corp.* | | | 469 | | | | 9,919 | |
| Repros Therapeutics, Inc.* | | | 369 | | | | 9,889 | |
| Orexigen Therapeutics, Inc.* | | | 1,540 | | | | 9,456 | |
| Sangamo Biosciences, Inc.* | | | 886 | | | | 9,285 | |
| Fluidigm Corp.* | | | 418 | | | | 9,171 | |
| Accuray, Inc.* | | | 1,218 | | | | 9,001 | |
| Invacare Corp. | | | 520 | | | | 8,980 | |
| Lexicon Pharmaceuticals, Inc.* | | | 3,723 | | | | 8,824 | |
| Amedisys, Inc.* | | | 512 | | | | 8,817 | |
| Insmed, Inc.* | | | 560 | | | | 8,742 | |
| Accretive Health, Inc.* | | | 949 | | | | 8,655 | |
| Spectrum Pharmaceuticals, Inc. | | | 1,030 | | | | 8,642 | |
| Genomic Health, Inc.* | | | 279 | | | | 8,532 | |
| Merit Medical Systems, Inc.* | | | 698 | | | | 8,467 | |
| National Healthcare Corp. | | | 179 | | | | 8,461 | |
| Emergent Biosolutions, Inc.* | | | 443 | | | | 8,439 | |
| Idenix Pharmaceuticals, Inc.* | | | 1,619 | | | | 8,435 | |
| TESARO, Inc.* | | | 217 | | | | 8,407 | |
| BioScrip, Inc.* | | | 945 | | | | 8,297 | |
| Tornier N.V.* | | | 422 | | | | 8,157 | |
| Staar Surgical Co.* | | | 599 | | | | 8,110 | |
| Landauer, Inc. | | | 153 | | | | 7,841 | |
| Intercept Pharmaceuticals, Inc.* | | | 113 | | | | 7,800 | |
| Cerus Corp.* | | | 1,145 | | | | 7,683 | |
| KYTHERA Biopharmaceuticals, Inc.* | | | 168 | | | | 7,678 | |
| Hi-Tech Pharmacal Company, Inc. | | | 177 | | | | 7,638 | |
| AMAG Pharmaceuticals, Inc.* | | | 353 | | | | 7,582 | |
| Dendreon Corp.*,1 | | | 2,582 | | | | 7,565 | |
| Antares Pharma, Inc.* | | | 1,850 | | | | 7,511 | |
| Immunomedics, Inc.* | | | 1,199 | | | | 7,422 | |
| Rockwell Medical, Inc.* | | | 648 | | | | 7,394 | |
| Affymetrix, Inc.* | | | 1,166 | | | | 7,229 | |
| Geron Corp.* | | | 2,145 | | | | 7,186 | |
| Triple-S Management Corp. — Class B* | | | 388 | | | | 7,135 | |
| Natus Medical, Inc.* | | | 502 | | | | 7,118 | |
| Cynosure, Inc. — Class A* | | | 312 | | | | 7,117 | |
| PharMerica Corp.* | | | 534 | | | | 7,086 | |
| GenMark Diagnostics, Inc.* | | | 580 | | | | 7,047 | |
| Novavax, Inc.* | | | 2,224 | | | | 7,028 | |
| Cardiovascular Systems, Inc.* | | | 344 | | | | 6,897 | |
| Corvel Corp.* | | | 186 | | | | 6,876 | |
| Depomed, Inc.* | | | 914 | | | | 6,837 | |
| Stemline Therapeutics, Inc.* | | | 147 | | | | 6,658 | |
| Endocyte, Inc.* | | | 497 | | | | 6,625 | |
| Orthofix International N.V.* | | | 312 | | | | 6,508 | |
| Vocera Communications, Inc.* | | | 349 | | | | 6,491 | |
| Cambrex Corp.* | | | 490 | | | | 6,468 | |
| Cadence Pharmaceuticals, Inc.* | | | 1,005 | | | | 6,342 | |
| Select Medical Holdings Corp. | | | 785 | | | | 6,335 | |
| US Physical Therapy, Inc. | | | 201 | | | | 6,247 | |
| Gentiva Health Services, Inc.* | | | 509 | | | | 6,128 | |
| Synergy Pharmaceuticals, Inc.* | | | 1,315 | | | | 6,010 | |
| Lannett Company, Inc.* | | | 275 | | | | 6,001 | |
| Merrimack Pharmaceuticals, Inc.* | | | 1,567 | | | | 5,955 | |
| Atrion Corp. | | | 23 | | | | 5,952 | |
| Vanda Pharmaceuticals, Inc.* | | | 535 | | | | 5,869 | |
| Curis, Inc.* | | | 1,314 | | | | 5,860 | |
| SurModics, Inc.* | | | 243 | | | | 5,779 | |
| MiMedx Group, Inc.* | | | 1,370 | | | | 5,713 | |
| Repligen Corp.* | | | 511 | | | | 5,667 | |
| OraSure Technologies, Inc.* | | | 922 | | | | 5,541 | |
| Sagent Pharmaceuticals, Inc.* | | | 267 | | | | 5,447 | |
| AngioDynamics, Inc.* | | | 409 | | | | 5,399 | |
| Furiex Pharmaceuticals, Inc.* | | | 120 | | | | 5,279 | |
| Navidea Biopharmaceuticals, Inc.* | | | 1,963 | | | | 5,202 | |
| TearLab Corp.* | | | 470 | | | | 5,198 | |
| NewLink Genetics Corp.* | | | 276 | | | | 5,183 | |
| Rigel Pharmaceuticals, Inc.* | | | 1,426 | | | | 5,105 | |
| XOMA Corp.* | | | 1,127 | | | | 5,049 | |
| Albany Molecular Research, Inc.* | | | 390 | | | | 5,027 | |
| Sequenom, Inc.* | | | 1,876 | | | | 5,009 | |
| Symmetry Medical, Inc.* | | | 609 | | | | 4,969 | |
| Unilife Corp.*,1 | | | 1,495 | | | | 4,963 | |
| Greenway Medical Technologies* | | | 238 | | | | 4,915 | |
| Progenics Pharmaceuticals, Inc.* | | | 968 | | | | 4,869 | |
| Providence Service Corp.* | | | 169 | | | | 4,849 | |
| Anika Therapeutics, Inc.* | | | 200 | | | | 4,792 | |
| Achillion Pharmaceuticals, Inc.* | | | 1,580 | | | | 4,772 | |
| Universal American Corp. | | | 626 | | | | 4,770 | |
| LHC Group, Inc.* | | | 201 | | | | 4,715 | |
| Omeros Corp.* | | | 482 | | | | 4,700 | |
| Vascular Solutions, Inc.* | | | 275 | | | | 4,620 | |
| SciClone Pharmaceuticals, Inc.* | | | 881 | | | | 4,467 | |
| Osiris Therapeutics, Inc.* | | | 268 | | | | 4,460 | |
| Anacor Pharmaceuticals, Inc.* | | | 417 | | | | 4,429 | |
| ZIOPHARM Oncology, Inc.* | | | 1,094 | | | | 4,321 | |
| Portola Pharmaceuticals, Inc.* | | | 160 | | | | 4,280 | |
| Pacific Biosciences of California, Inc.* | | | 773 | | | | 4,275 | |
| Synta Pharmaceuticals Corp.*,1 | | | 664 | | | | 4,190 | |
| AcelRx Pharmaceuticals, Inc.* | | | 380 | | | | 4,093 | |
| XenoPort, Inc.* | | | 710 | | | | 4,033 | |
| Prothena Corporation plc* | | | 196 | | | | 3,965 | |
| Epizyme, Inc.* | | | 97 | | | | 3,893 | |
| AtriCure, Inc.* | | | 341 | | | | 3,744 | |
| TherapeuticsMD, Inc.* | | | 1,270 | | | | 3,721 | |
| PhotoMedex, Inc.* | | | 232 | | | | 3,689 | |
| Hyperion Therapeutics, Inc.* | | | 140 | | | | 3,658 | |
| Cempra, Inc.* | | | 316 | | | | 3,634 | |
| Five Star Quality Care, Inc.* | | | 702 | | | | 3,629 | |
| Rochester Medical Corp.* | | | 181 | | | | 3,613 | |
| Threshold Pharmaceuticals, Inc.* | | | 774 | | | | 3,599 | |
| Dynavax Technologies Corp.* | | | 2,998 | | | | 3,598 | |
| 82 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Peregrine Pharmaceuticals, Inc.* | | | 2,460 | | | $ | 3,469 | |
| RTI Surgical, Inc.* | | | 923 | | | | 3,452 | |
| Verastem, Inc.* | | | 277 | | | | 3,446 | |
| Ampio Pharmaceuticals, Inc.* | | | 449 | | | | 3,368 | |
| Chindex International, Inc.* | | | 196 | | | | 3,342 | |
| Chelsea Therapeutics International Ltd.* | | | 1,100 | | | | 3,311 | |
| Cytokinetics, Inc.* | | | 430 | | | | 3,264 | |
| Exactech, Inc.* | | | 157 | | | | 3,164 | |
| Insys Therapeutics, Inc.* | | | 90 | | | | 3,149 | |
| Galena Biopharma, Inc.* | | | 1,368 | | | | 3,105 | |
| CryoLife, Inc. | | | 442 | | | | 3,094 | |
| Chimerix, Inc.* | | | 140 | | | | 3,077 | |
| Cell Therapeutics, Inc.* | | | 1,848 | | | | 3,031 | |
| Utah Medical Products, Inc. | | | 50 | | | | 2,972 | |
| National Research Corp. — Class A* | | | 156 | | | | 2,937 | |
| Coronado Biosciences, Inc.* | | | 410 | | | | 2,878 | |
| Horizon Pharma, Inc.* | | | 847 | | | | 2,863 | |
| Merge Healthcare, Inc.* | | | 1,077 | | | | 2,811 | |
| Almost Family, Inc. | | | 144 | | | | 2,798 | |
| Derma Sciences, Inc.* | | | 223 | | | | 2,761 | |
| BioDelivery Sciences International, Inc.* | | | 501 | | | | 2,720 | |
| Cross Country Healthcare, Inc.* | | | 444 | | | | 2,691 | |
| Zeltiq Aesthetics, Inc.* | | | 295 | | | | 2,676 | |
| Sunesis Pharmaceuticals, Inc.* | | | 523 | | | | 2,594 | |
| Pozen, Inc.* | | | 441 | | | | 2,527 | |
| Addus HomeCare Corp.* | | | 86 | | | | 2,491 | |
| Targacept, Inc.* | | | 468 | | | | 2,485 | |
| Solta Medical, Inc.* | | | 1,163 | | | | 2,419 | |
| Cytori Therapeutics, Inc.* | | | 1,037 | | | | 2,416 | |
| Receptos, Inc.* | | | 90 | | | | 2,337 | |
| Biotime, Inc.* | | | 607 | | | | 2,307 | |
| SIGA Technologies, Inc.* | | | 599 | | | | 2,300 | |
| OncoGenex Pharmaceutical, Inc.* | | | 247 | | | | 2,290 | |
| Arqule, Inc.* | | | 969 | | | | 2,258 | |
| Accelerate Diagnostics, Inc.* | | | 168 | | | | 2,253 | |
| ChemoCentryx, Inc.* | | | 400 | | | | 2,224 | |
| Harvard Bioscience, Inc.* | | | 422 | | | | 2,220 | |
| Alliance HealthCare Services, Inc.* | | | 80 | | | | 2,215 | |
| Cutera, Inc.* | | | 247 | | | | 2,198 | |
| Zogenix, Inc.* | | | 1,179 | | | | 2,193 | |
| Tetraphase Pharmaceuticals, Inc.* | | | 190 | | | | 2,162 | |
| Alphatec Holdings, Inc.* | | | 1,019 | | | | 2,007 | |
| Durata Therapeutics, Inc.* | | | 212 | | | | 1,916 | |
| Supernus Pharmaceuticals, Inc.* | | | 250 | | | | 1,833 | |
| MEI Pharma, Inc.* | | | 160 | | | | 1,814 | |
| AVEO Pharmaceuticals, Inc.* | | | 850 | | | | 1,760 | |
| Medical Action Industries, Inc.* | | | 240 | | | | 1,594 | |
| NeoGenomics, Inc.* | | | 530 | | | | 1,590 | |
| Vical, Inc.* | | | 1,239 | | | | 1,549 | |
| Regulus Therapeutics, Inc.* | | | 161 | | | | 1,518 | |
| OvaScience, Inc.* | | | 148 | | | | 1,467 | |
| Skilled Healthcare Group, Inc. — Class A* | | | 327 | | | | 1,426 | |
| Sucampo Pharmaceuticals, Inc. — Class A* | | | 227 | | | | 1,416 | |
| Cornerstone Therapeutics, Inc.* | | | 149 | | | | 1,402 | |
| Corcept Therapeutics, Inc.* | | | 872 | | | | 1,386 | |
| Enanta Pharmaceuticals, Inc.* | | | 60 | | | | 1,375 | |
| Nanosphere, Inc.* | | | 680 | | | | 1,360 | |
| TG Therapeutics, Inc.* | | | 250 | | | | 1,273 | |
| Fibrocell Science, Inc.* | | | 280 | | | | 1,226 | |
| Amicus Therapeutics, Inc.* | | | 496 | | | | 1,151 | |
| Alimera Sciences, Inc.* | | | 280 | | | | 1,053 | |
| Enzon Pharmaceuticals, Inc. | | | 611 | | | | 1,026 | |
| Biolase, Inc.* | | | 525 | | | | 1,003 | |
| GTx, Inc.* | | | 443 | | | | 890 | |
| Pernix Therapeutics Holdings* | | | 285 | | | | 778 | |
| KaloBios Pharmaceuticals, Inc.* | | | 140 | | | | 633 | |
| USMD Holdings, Inc.* | | | 20 | | | | 530 | |
| Total Health Care | | | | | | | 3,281,837 | |
| Energy - 4.0% | | | | | | | | |
| Rosetta Resources, Inc.* | | | 1,006 | | | | 54,786 | |
| Kodiak Oil & Gas Corp.* | | | 4,346 | | | | 52,412 | |
| Helix Energy Solutions Group, Inc.* | | | 1,728 | | | | 43,840 | |
| Bristow Group, Inc. | | | 587 | | | | 42,710 | |
| SemGroup Corp. — Class A | | | 690 | | | | 39,345 | |
| Energy XXI Bermuda Ltd. | | | 1,300 | | | | 39,259 | |
| Targa Resources Corp. | | | 529 | | | | 38,596 | |
| Berry Petroleum Co. — Class A | | | 866 | | | | 37,351 | |
| PDC Energy, Inc.* | | | 575 | | | | 34,236 | |
| Hornbeck Offshore Services, Inc.* | | | 584 | | | | 33,545 | |
| CARBO Ceramics, Inc. | | | 320 | | | | 31,715 | |
| SEACOR Holdings, Inc. | | | 328 | | | | 29,664 | |
| Scorpio Tankers, Inc. | | | 2,991 | | | | 29,192 | |
| Western Refining, Inc. | | | 882 | | | | 26,496 | |
| Stone Energy Corp.* | | | 816 | | | | 26,463 | |
| Exterran Holdings, Inc.* | | | 943 | | | | 25,999 | |
| Carrizo Oil & Gas, Inc.* | | | 655 | | | | 24,438 | |
| Bonanza Creek Energy, Inc.* | | | 484 | | | | 23,358 | |
| Gulfmark Offshore, Inc. — Class A | | | 440 | | | | 22,392 | |
| Alpha Natural Resources, Inc.* | | | 3,607 | | | | 21,497 | |
| Bill Barrett Corp.* | | | 788 | | | | 19,787 | |
| Hercules Offshore, Inc.* | | | 2,626 | | | | 19,354 | |
| EPL Oil & Gas, Inc.* | | | 498 | | | | 18,481 | |
| Key Energy Services, Inc.* | | | 2,483 | | | | 18,101 | |
| Geospace Technologies Corp.* | | | 214 | | | | 18,040 | |
| Newpark Resources, Inc.* | | | 1,411 | | | | 17,863 | |
| Magnum Hunter Resources Corp.*,1 | | | 2,825 | | | | 17,430 | |
| Forum Energy Technologies, Inc.* | | | 635 | | | | 17,151 | |
| Halcon Resources Corp.* | | | 3,749 | | | | 16,608 | |
| Rex Energy Corp.* | | | 743 | | | | 16,569 | |
| Crosstex Energy, Inc. | | | 787 | | | | 16,440 | |
| TETRA Technologies, Inc.* | | | 1,283 | | | | 16,076 | |
| Northern Oil and Gas, Inc.* | | | 1,046 | | | | 15,094 | |
| Approach Resources, Inc.* | | | 570 | | | | 14,980 | |
| EXCO Resources, Inc. | | | 2,208 | | | | 14,882 | |
| C&J Energy Services, Inc.* | | | 735 | | | | 14,759 | |
| Cloud Peak Energy, Inc.* | | | 992 | | | | 14,553 | |
| Clean Energy Fuels Corp.* | | | 1,121 | | | | 14,326 | |
| Arch Coal, Inc. | | | 3,481 | | | | 14,307 | |
| Ship Finance International Ltd. | | | 904 | | | | 13,804 | |
| Diamondback Energy, Inc.* | | | 312 | | | | 13,304 | |
| Matador Resources Co.* | | | 809 | | | | 13,211 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 83 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Delek US Holdings, Inc. | | | 610 | | | $ | 12,865 | |
| Comstock Resources, Inc. | | | 794 | | | | 12,633 | |
| Sanchez Energy Corp.* | | | 464 | | | | 12,254 | |
| Forest Oil Corp.* | | | 1,945 | | | | 11,865 | |
| ION Geophysical Corp.* | | | 2,176 | | | | 11,315 | |
| Parker Drilling Co.* | | | 1,963 | | | | 11,189 | |
| Goodrich Petroleum Corp.* | | | 436 | | | | 10,590 | |
| W&T Offshore, Inc. | | | 568 | | | | 10,065 | |
| Triangle Petroleum Corp.* | | | 951 | | | | 9,339 | |
| Resolute Energy Corp.* | | | 1,112 | | | | 9,296 | |
| Era Group, Inc.* | | | 328 | | | | 8,915 | |
| Nordic American Tankers Ltd. | | | 1,080 | | | | 8,899 | |
| Matrix Service Co.* | | | 431 | | | | 8,456 | |
| Solazyme, Inc.* | | | 779 | | | | 8,390 | |
| PHI, Inc.* | | | 217 | | | | 8,183 | |
| Tesco Corp.* | | | 493 | | | | 8,169 | |
| Swift Energy Co.* | | | 710 | | | | 8,108 | |
| Synergy Resources Corp.* | | | 827 | | | | 8,063 | |
| Contango Oil & Gas Co. | | | 215 | | | | 7,901 | |
| Pioneer Energy Services Corp.* | | | 1,022 | | | | 7,675 | |
| Rentech, Inc. | | | 3,696 | | | | 7,318 | |
| RigNet, Inc.* | | | 197 | | | | 7,135 | |
| Green Plains Renewable Energy, Inc. | | | 426 | | | | 6,837 | |
| GasLog Ltd. | | | 418 | | | | 6,241 | |
| Basic Energy Services, Inc.* | | | 488 | | | | 6,168 | |
| Penn Virginia Corp.* | | | 898 | | | | 5,972 | |
| Willbros Group, Inc.* | | | 649 | | | | 5,958 | |
| Gulf Island Fabrication, Inc. | | | 237 | | | | 5,809 | |
| Natural Gas Services Group, Inc.* | | | 213 | | | | 5,713 | |
| Vantage Drilling Co.* | | | 3,300 | | | | 5,709 | |
| Nuverra Environmental Solutions, Inc.* | | | 2,328 | | | | 5,331 | |
| Renewable Energy Group, Inc.* | | | 350 | | | | 5,303 | |
| Vaalco Energy, Inc.* | | | 945 | | | | 5,273 | |
| Clayton Williams Energy, Inc.* | | | 94 | | | | 4,932 | |
| Dawson Geophysical Co.* | | | 141 | | | | 4,578 | |
| Equal Energy Ltd. | | | 960 | | | | 4,522 | |
| Emerald Oil, Inc.* | | | 599 | | | | 4,307 | |
| Endeavour International Corp.* | | | 776 | | | | 4,152 | |
| Knightsbridge Tankers Ltd. | | | 397 | | | | 4,037 | |
| Quicksilver Resources, Inc.* | | | 2,035 | | | | 4,009 | |
| Gastar Exploration Ltd.* | | | 1,000 | | | | 3,950 | |
| Alon USA Energy, Inc. | | | 381 | | | | 3,890 | |
| BPZ Resources, Inc.* | | | 1,937 | | | | 3,777 | |
| PetroQuest Energy, Inc.* | | | 925 | | | | 3,709 | |
| Miller Energy Resources, Inc.* | | | 497 | | | | 3,608 | |
| Callon Petroleum Co.* | | | 646 | | | | 3,534 | |
| Warren Resources, Inc.* | | | 1,202 | | | | 3,522 | |
| Abraxas Petroleum Corp.* | | | 1,341 | | | | 3,446 | |
| Cal Dive International, Inc.* | | | 1,598 | | | | 3,276 | |
| Panhandle Oil and Gas, Inc. — Class A | | | 114 | | | | 3,224 | |
| Mitcham Industries, Inc.* | | | 210 | | | | 3,211 | |
| Uranium Energy Corp.* | | | 1,402 | | | | 3,155 | |
| Evolution Petroleum Corp.* | | | 274 | | | | 3,085 | |
| FX Energy, Inc.* | | | 871 | | | | 2,996 | |
| REX American Resources Corp.* | | | 92 | | | | 2,828 | |
| Midstates Petroleum Company, Inc.* | | | 544 | | | | 2,791 | |
| Teekay Tankers Ltd. — Class A | | | 1,011 | | | | 2,649 | |
| Bolt Technology Corp. | | | 139 | | | | 2,509 | |
| Westmoreland Coal Co.* | | | 187 | | | | 2,465 | |
| Ur-Energy, Inc.* | | | 1,990 | | | | 2,308 | |
| Apco Oil and Gas International, Inc.* | | | 157 | | | | 2,239 | |
| Frontline Ltd.*,1 | | | 842 | | | | 2,231 | |
| TGC Industries, Inc. | | | 256 | | | | 2,020 | |
| KiOR, Inc. — Class A* | | | 715 | | | | 2,016 | |
| Adams Resources & Energy, Inc. | | | 32 | | | | 1,776 | |
| Isramco, Inc.* | | | 14 | | | | 1,735 | |
| Crimson Exploration, Inc.* | | | 359 | | | | 1,081 | |
| Hallador Energy Co. | | | 146 | | | | 1,066 | |
| Global Geophysical Services, Inc.* | | | 372 | | | | 1,008 | |
| Amyris, Inc.*,1 | | | 433 | | | | 1,000 | |
| ZaZa Energy Corp.* | | | 607 | | | | 698 | |
| L&L Energy, Inc.* | | | 498 | | | | 632 | |
| Total Energy | | | | | | | 1,417,323 | |
| Materials - 3.5% | | | | | | | | |
| PolyOne Corp. | | | 1,626 | | | | 49,933 | |
| Axiall Corp. | | | 1,146 | | | | 43,307 | |
| Louisiana-Pacific Corp.* | | | 2,279 | | | | 40,087 | |
| Sensient Technologies Corp. | | | 807 | | | | 38,646 | |
| HB Fuller Co. | | | 824 | | | | 37,236 | |
| Chemtura Corp.* | | | 1,604 | | | | 36,876 | |
| Commercial Metals Co. | | | 1,907 | | | | 32,323 | |
| Schweitzer-Mauduit International, Inc. | | | 510 | | | | 30,869 | |
| Olin Corp. | | | 1,314 | | | | 30,314 | |
| Worthington Industries, Inc. | | | 872 | | | | 30,023 | |
| Graphic Packaging Holding Co.* | | | 3,440 | | | | 29,447 | |
| KapStone Paper and Packaging Corp. | | | 672 | | | | 28,762 | |
| Minerals Technologies, Inc. | | | 570 | | | | 28,141 | |
| Balchem Corp. | | | 485 | | | | 25,099 | |
| Texas Industries, Inc.* | | | 356 | | | | 23,607 | |
| Kaiser Aluminum Corp. | | | 303 | | | | 21,589 | |
| Stillwater Mining Co.* | | | 1,930 | | | | 21,248 | |
| Boise, Inc. | | | 1,652 | | | | 20,815 | |
| Coeur Mining, Inc.* | | | 1,651 | | | | 19,895 | |
| SunCoke Energy, Inc.* | | | 1,136 | | | | 19,312 | |
| PH Glatfelter Co. | | | 703 | | | | 19,030 | |
| Innophos Holdings, Inc. | | | 359 | | | | 18,948 | |
| Berry Plastics Group, Inc.* | | | 910 | | | | 18,173 | |
| Flotek Industries, Inc.* | | | 785 | | | | 18,055 | |
| Innospec, Inc. | | | 382 | | | | 17,824 | |
| Stepan Co. | | | 308 | | | | 17,781 | |
| OM Group, Inc.* | | | 519 | | | | 17,532 | |
| Clearwater Paper Corp.* | | | 363 | | | | 17,341 | |
| Hecla Mining Co. | | | 5,466 | | | | 17,163 | |
| Calgon Carbon Corp.* | | | 881 | | | | 16,730 | |
| RTI International Metals, Inc.* | | | 510 | | | | 16,340 | |
| Globe Specialty Metals, Inc. | | | 1,054 | | | | 16,242 | |
| Quaker Chemical Corp. | | | 214 | | | | 15,633 | |
| Resolute Forest Products, Inc.* | | | 1,133 | | | | 14,978 | |
| AMCOL International Corp. | | | 453 | | | | 14,804 | |
| Koppers Holdings, Inc. | | | 341 | | | | 14,544 | |
| Walter Energy, Inc. | | | 1,030 | | | | 14,451 | |
| Intrepid Potash, Inc. | | | 900 | | | | 14,112 | |
| A. Schulman, Inc. | | | 478 | | | | 14,082 | |
| 84 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Molycorp, Inc.* | | | 2,030 | | | $ | 13,317 | |
| American Vanguard Corp. | | | 469 | | | | 12,625 | |
| Deltic Timber Corp. | | | 177 | | | | 11,530 | |
| Schnitzer Steel Industries, Inc. — Class A | | | 416 | | | | 11,457 | |
| Ferro Corp.* | | | 1,196 | | | | 10,896 | |
| Materion Corp. | | | 338 | | | | 10,836 | |
| Headwaters, Inc.* | | | 1,205 | | | | 10,833 | |
| Tredegar Corp. | | | 409 | | | | 10,634 | |
| Wausau Paper Corp. | | | 815 | | | | 10,587 | |
| Kraton Performance Polymers, Inc.* | | | 528 | | | | 10,344 | |
| LSB Industries, Inc.* | | | 307 | | | | 10,294 | |
| Neenah Paper, Inc. | | | 260 | | | | 10,221 | |
| Haynes International, Inc. | | | 205 | | | | 9,293 | |
| Myers Industries, Inc. | | | 453 | | | | 9,110 | |
| Horsehead Holding Corp.* | | | 721 | | | | 8,984 | |
| US Silica Holdings, Inc. | | | 352 | | | | 8,765 | |
| AK Steel Holding Corp.*,1 | | | 2,233 | | | | 8,374 | |
| Zoltek Companies, Inc.* | | | 442 | | | | 7,377 | |
| Advanced Emissions Solutions, Inc.* | | | 169 | | | | 7,220 | |
| Allied Nevada Gold Corp.* | | | 1,700 | | | | 7,106 | |
| Century Aluminum Co.* | | | 851 | | | | 6,851 | |
| OMNOVA Solutions, Inc.* | | | 775 | | | | 6,626 | |
| Boise Cascade Co.* | | | 240 | | | | 6,468 | |
| FutureFuel Corp. | | | 354 | | | | 6,358 | |
| Zep, Inc. | | | 369 | | | | 6,000 | |
| Hawkins, Inc. | | | 151 | | | | 5,699 | |
| AEP Industries, Inc.* | | | 75 | | | | 5,573 | |
| American Pacific Corp.* | | | 97 | | | | 5,312 | |
| Taminco Corp.* | | | 260 | | | | 5,278 | |
| Landec Corp.* | | | 429 | | | | 5,234 | |
| AM Castle & Co.* | | | 292 | | | | 4,701 | |
| US Concrete, Inc.* | | | 230 | | | | 4,614 | |
| Olympic Steel, Inc. | | | 143 | | | | 3,973 | |
| Universal Stainless & Alloy Products, Inc.* | | | 114 | | | | 3,708 | |
| Gold Resource Corp. | | | 541 | | | | 3,587 | |
| Chase Corp. | | | 107 | | | | 3,144 | |
| KMG Chemicals, Inc. | | | 142 | | | | 3,123 | |
| Arabian American Development Co.* | | | 328 | | | | 2,985 | |
| Paramount Gold and Silver Corp.* | | | 2,257 | | | | 2,912 | |
| Penford Corp.* | | | 160 | | | | 2,291 | |
| Handy & Harman Ltd.* | | | 92 | | | | 2,196 | |
| UFP Technologies, Inc.* | | | 94 | | | | 2,140 | |
| Midway Gold Corp.* | | | 1,832 | | | | 1,750 | |
| United States Lime & Minerals, Inc.* | | | 29 | | | | 1,699 | |
| General Moly, Inc.* | | | 951 | | | | 1,569 | |
| Noranda Aluminum Holding Corp. | | | 555 | | | | 1,365 | |
| GSE Holding, Inc.* | | | 140 | | | | 291 | |
| Total Materials | | | | | | | 1,226,542 | |
| Consumer Staples - 2.9% | | | | | | | | |
| Rite Aid Corp.* | | | 11,968 | | | | 56,968 | |
| United Natural Foods, Inc.* | | �� | 799 | | | | 53,709 | |
| Hain Celestial Group, Inc.* | | | 627 | | | | 48,353 | |
| Casey’s General Stores, Inc. | | | 623 | | | | 45,790 | |
| Darling International, Inc.* | | | 1,932 | | | | 40,881 | |
| TreeHouse Foods, Inc.* | | | 591 | | | | 39,496 | |
| Harris Teeter Supermarkets, Inc. | | | 802 | | | | 39,450 | |
| Boston Beer Company, Inc. — Class A* | | | 135 | | | | 32,969 | |
| B&G Foods, Inc. — Class A | | | 872 | | | | 30,128 | |
| PriceSmart, Inc. | | | 313 | | | | 29,810 | |
| SUPERVALU, Inc.* | | | 3,323 | | | | 27,348 | |
| Prestige Brands Holdings, Inc.* | | | 837 | | | | 25,209 | |
| Sanderson Farms, Inc. | | | 375 | | | | 24,465 | |
| Lancaster Colony Corp. | | | 307 | | | | 24,035 | |
| Spectrum Brands Holdings, Inc. | | | 352 | | | | 23,175 | |
| Snyders-Lance, Inc. | | | 785 | | | | 22,647 | |
| Andersons, Inc. | | | 310 | | | | 21,669 | |
| Post Holdings, Inc.* | | | 533 | | | | 21,517 | |
| J&J Snack Foods Corp. | | | 244 | | | | 19,696 | |
| Universal Corp. | | | 380 | | | | 19,353 | |
| Fresh Del Monte Produce, Inc. | | | 638 | | | | 18,936 | |
| WD-40 Co. | | | 262 | | | | 17,004 | |
| Pilgrim’s Pride Corp.* | | | 998 | | | | 16,756 | |
| Vector Group Ltd. | | | 1,038 | | | | 16,719 | |
| Susser Holdings Corp.* | | | 299 | | | | 15,892 | |
| Boulder Brands, Inc.* | | | 969 | | | | 15,543 | |
| Elizabeth Arden, Inc.* | | | 411 | | | | 15,174 | |
| Cal-Maine Foods, Inc. | | | 250 | | | | 12,025 | |
| Dole Food Company, Inc.* | | | 851 | | | | 11,591 | |
| Annie’s, Inc.* | | | 225 | | | | 11,048 | |
| Seaboard Corp. | | | 4 | | | | 10,992 | |
| Tootsie Roll Industries, Inc.1 | | | 323 | | | | 9,955 | |
| Chiquita Brands International, Inc.* | | | 766 | | | | 9,698 | |
| Diamond Foods, Inc.* | | | 371 | | | | 8,748 | |
| Weis Markets, Inc. | | | 175 | | | | 8,565 | |
| USANA Health Sciences, Inc.* | | | 96 | | | | 8,332 | |
| Inter Parfums, Inc. | | | 276 | | | | 8,277 | |
| Spartan Stores, Inc. | | | 368 | | | | 8,118 | |
| Fairway Group Holdings Corp.* | | | 250 | | | | 6,390 | |
| Ingles Markets, Inc. — Class A | | | 219 | | | | 6,292 | |
| Medifast, Inc.* | | | 227 | | | | 6,104 | |
| Calavo Growers, Inc. | | | 201 | | | | 6,078 | |
| Natural Grocers by Vitamin Cottage, Inc.* | | | 150 | | | | 5,955 | |
| Harbinger Group, Inc.* | | | 535 | | | | 5,548 | |
| Nash Finch Co. | | | 204 | | | | 5,388 | |
| Chefs’ Warehouse, Inc.* | | | 231 | | | | 5,336 | |
| Star Scientific, Inc.*,1 | | | 2,727 | | | | 5,209 | |
| Coca-Cola Bottling Company Consolidated | | | 80 | | | | 5,009 | |
| Revlon, Inc. — Class A* | | | 180 | | | | 4,999 | |
| Central Garden and Pet Co. — Class A* | | | 682 | | | | 4,672 | |
| Lifevantage Corp.* | | | 1,857 | | | | 4,420 | |
| Limoneira Co. | | | 168 | | | | 4,314 | |
| Seneca Foods Corp. — Class A* | | | 142 | | | | 4,273 | |
| Pantry, Inc.* | | | 383 | | | | 4,244 | |
| Alliance One International, Inc.* | | | 1,444 | | | | 4,202 | |
| Village Super Market, Inc. — Class A | | | 105 | | | | 3,992 | |
| Roundy’s, Inc. | | | 413 | | | | 3,552 | |
| Female Health Co. | | | 357 | | | | 3,524 | |
| Nutraceutical International Corp. | | | 148 | | | | 3,514 | |
| National Beverage Corp. | | | 188 | | | | 3,358 | |
| Nature’s Sunshine Products, Inc. | | | 173 | | | | 3,299 | |
| Omega Protein Corp.* | | | 319 | | | | 3,244 | |
| John B Sanfilippo & Son, Inc. | | | 137 | | | | 3,177 | |
| Oil-Dri Corporation of America | | | 82 | | | | 2,767 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 85 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Shares | | | Value | |
| Orchids Paper Products Co. | | | 96 | | | $ | 2,656 | |
| Inventure Foods, Inc.* | | | 232 | | | | 2,436 | |
| Craft Brew Alliance, Inc.* | | | 176 | | | | 2,365 | |
| Arden Group, Inc. — Class A | | | 18 | | | | 2,340 | |
| Alico, Inc. | | | 53 | | | | 2,182 | |
| Griffin Land & Nurseries, Inc. | | | 49 | | | | 1,573 | |
| Synutra International, Inc.* | | | 289 | | | | 1,532 | |
| Farmer Bros Co.* | | | 95 | | | | 1,431 | |
| Lifeway Foods, Inc. | | | 78 | | | | 1,054 | |
| Total Consumer Staples | | | | | | | 1,006,470 | |
| UTILITIES - 2.1% | | | | | | | | |
| Cleco Corp. | | | 986 | | | | 44,212 | |
| Piedmont Natural Gas Company, Inc. | | | 1,232 | | | | 40,509 | |
| IDACORP, Inc. | | | 813 | | | | 39,349 | |
| Southwest Gas Corp. | | | 774 | | | | 38,700 | |
| Black Hills Corp. | | | 726 | | | | 36,199 | |
| WGL Holdings, Inc. | | | 842 | | | | 35,962 | |
| Portland General Electric Co. | | | 1,241 | | | | 35,033 | |
| Dynegy, Inc.* | | | 1,640 | | | | 31,686 | |
| UNS Energy Corp. | | | 671 | | | | 31,282 | |
| ALLETE, Inc. | | | 646 | | | | 31,202 | |
| UIL Holdings Corp. | | | 830 | | | | 30,859 | |
| South Jersey Industries, Inc. | | | 519 | | | | 30,403 | |
| New Jersey Resources Corp. | | | 676 | | | | 29,778 | |
| PNM Resources, Inc. | | | 1,304 | | | | 29,510 | |
| NorthWestern Corp. | | | 616 | | | | 27,671 | |
| Avista Corp. | | | 978 | | | | 25,819 | |
| Laclede Group, Inc. | | | 531 | | | | 23,895 | |
| El Paso Electric Co. | | | 653 | | | | 21,810 | |
| MGE Energy, Inc. | | | 376 | | | | 20,511 | |
| Northwest Natural Gas Co. | | | 441 | | | | 18,513 | |
| American States Water Co. | | | 628 | | | | 17,307 | |
| Otter Tail Corp. | | | 592 | | | | 16,339 | |
| California Water Service Group | | | 775 | | | | 15,748 | |
| Empire District Electric Co. | | | 690 | | | | 14,945 | |
| Chesapeake Utilities Corp. | | | 162 | | | | 8,503 | |
| Atlantic Power Corp. | | | 1,956 | | | | 8,430 | |
| Ormat Technologies, Inc. | | | 285 | | | | 7,629 | |
| SJW Corp. | | | 262 | | | | 7,341 | |
| Unitil Corp. | | | 225 | | | | 6,586 | |
| Connecticut Water Service, Inc. | | | 180 | | | | 5,789 | |
| Middlesex Water Co. | | | 267 | | | | 5,711 | |
| York Water Co. | | | 214 | | | | 4,295 | |
| Consolidated Water Company Ltd. | | | 246 | | | | 3,683 | |
| Artesian Resources Corp. — Class A | | | 124 | | | | 2,759 | |
| Delta Natural Gas Company, Inc. | | | 113 | | | | 2,496 | |
| Genie Energy Ltd. — Class B | | | 213 | | | | 2,087 | |
| Pure Cycle Corp.* | | | 290 | | | | 1,340 | |
| Total Utilities | | | | | | | 753,891 | |
| TELECOMMUNICATION SERVICES - 0.6% | | | | | | | | |
| Cogent Communications Group, Inc. | | | 778 | | | | 25,090 | |
| NII Holdings, Inc.* | | | 2,820 | | | | 17,117 | |
| Leap Wireless International, Inc.* | | | 899 | | | | 14,195 | |
| 8x8, Inc.* | | | 1,191 | | | | 11,993 | |
| Consolidated Communications Holdings, Inc. | | | 659 | | | | 11,362 | |
| Shenandoah Telecommunications Co. | | | 400 | | | | 9,640 | |
| Cincinnati Bell, Inc.* | | | 3,417 | | | | 9,294 | |
| Atlantic Tele-Network, Inc. | | | 155 | | | | 8,080 | |
| Vonage Holdings Corp.* | | | 2,555 | | | | 8,023 | |
| Premiere Global Services, Inc.* | | | 791 | | | | 7,878 | |
| inContact, Inc.* | | | 880 | | | | 7,278 | |
| Iridium Communications, Inc.* | | | 1,052 | | | | 7,238 | |
| Lumos Networks Corp. | | | 261 | | | | 5,656 | |
| Inteliquent, Inc. | | | 529 | | | | 5,110 | |
| USA Mobility, Inc. | | | 354 | | | | 5,013 | |
| General Communication, Inc. — Class A* | | | 512 | | | | 4,874 | |
| NTELOS Holdings Corp. | | | 259 | | | | 4,869 | |
| IDT Corp. — Class B | | | 250 | | | | 4,438 | |
| Hawaiian Telcom Holdco, Inc.* | | | 165 | | | | 4,389 | |
| magicJack VocalTec Ltd.* | | | 304 | | | | 3,912 | |
| Fairpoint Communications, Inc.* | | | 351 | | | | 3,352 | |
| ORBCOMM, Inc.* | | | 591 | | | | 3,115 | |
| Towerstream Corp.* | | | 1,074 | | | | 3,072 | |
| Cbeyond, Inc.* | | | 432 | | | | 2,769 | |
| HickoryTech Corp. | | | 222 | | | | 2,526 | |
| Boingo Wireless, Inc.* | | | 303 | | | | 2,121 | |
| Primus Telecommunications Group, Inc. | | | 202 | | | | 685 | |
| Straight Path Communications, Inc. — Class B* | | | 130 | | | | 684 | |
| Total Telecommunication Services | | | | | | | 193,773 | |
| Total Common Stocks | | | | | | | | |
| (Cost $19,462,799) | | | | | | | 25,384,848 | |
| WARRANTS - 0.0% | | | | | | | | |
| Tejon Ranch Co. | | | | | | | | |
| $10.50, 08/31/16*,† | | | 54 | | | | 149 | |
| Magnum Hunter Resources Corp. | | | | | | | | |
| $10.50, 10/14/13*,†† | | | 23 | | | | — | |
| Magnum Hunter Resources Corp. | | | | | | | | |
| $8.50, 09/12/15*,†† | | | 282 | | | | — | |
| Total Warrants | | | | | | | | |
| (Cost $344) | | | | | | | 149 | |
| RIGHTS†† - 0.0% | | | | | | | | |
| Omthera Pharmaceuticals, Inc. | | | | | | | | |
| Expires 12/31/20* | | | 57 | | | | 34 | |
| Total Rights | | | | | | | | |
| (Cost $—) | | | | | | | 34 | |
| 86 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| RUSSELL 2000® 1.5x STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| REPURCHASE AGREEMENTS††,2 - 23.9% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 4,488,743 | | | $ | 4,488,743 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/133 | | | 3,025,592 | | | | 3,025,592 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 506,656 | | | | 506,656 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 395,375 | | | | 395,375 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $8,416,366) | | | | | | | 8,416,366 | |
| | | | | | | | | |
| SECURITIES LENDING COLLATERAL††,4 - 0.2% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 39,460 | | | | 39,460 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 36,846 | | | | 36,846 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $76,306) | | | | | | | 76,306 | |
| Total Investments - 96.4% | | | | | | | | |
| (Cost $27,955,815) | | | | | | $ | 33,877,703 | |
| Other Assets & Liabilities, net - 3.6% | | | | | | | 1,275,802 | |
| Total Net Assets - 100.0% | | | | | | $ | 35,153,505 | |
| | | | | | Unrealized | |
| | | Contracts | | | Loss | |
| | | | | | | | | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 Russell 2000 Index Mini | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $8,253,630) | | | 77 | | | $ | (3,897 | ) |
| | | Units | | | | |
| EQUITY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/23/135 | | | | | | | | |
| (Notional Value $2,753,913) | | | 2,565 | | | $ | (963 | ) |
| Barclays Bank plc | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $4,986,056) | | | 4,643 | | | | (1,819 | ) |
| Goldman Sachs International | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $11,311,154) | | | 10,534 | | | | (47,814 | ) |
| (Total Notional Value $19,051,123) | | | | | | $ | (50,596 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 4 | Securities lending collateral — See Note 11. |
| 5 | Total Return based on Russell 2000 Index +/- financing at a variable rate. |
| | plc — Public Limited Company |
| | REIT — Real Estate Investment Trust |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 87 |
| RUSSELL 2000® 1.5x STRATEGY FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $72,411 of securities loaned | | | | |
| (cost $19,463,143) | | $ | 25,385,031 | |
| Repurchase agreements, at value | | | | |
| (cost $8,492,672) | | | 8,492,672 | |
| Total investments | | | | |
| (cost $27,955,815) | | | 33,877,703 | |
| Foreign currency, at value | | | | |
| (cost $105) | | | 105 | |
| Segregated cash with broker | | | 440,000 | |
| Cash | | | 4,733 | |
| Receivables: | | | | |
| Fund shares sold | | | 1,159,424 | |
| Dividends | | | 26,886 | |
| Interest | | | 710 | |
| Total assets | | | 35,509,561 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 50,596 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 132,726 | |
| Upon return of securities loaned | | | 76,306 | |
| Management fees | | | 24,043 | |
| Swap settlement | | | 11,400 | |
| Distribution and service fees | | | 7,697 | |
| Transfer agent and administrative fees | | | 6,679 | |
| Variation margin | | | 3,897 | |
| Portfolio accounting fees | | | 2,671 | |
| Miscellaneous | | | 40,041 | |
| Total liabilities | | | 356,056 | |
| Net assets | | $ | 35,153,505 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 34,527,678 | |
| Accumulated net investment loss | | | (225,264 | ) |
| Accumulated net realized loss on investments | | | (5,016,305 | ) |
| Net unrealized appreciation on investments | | | 5,867,396 | |
| Net assets | | $ | 35,153,505 | |
| A-Class: | | | | |
| Net assets | | $ | 1,967,620 | |
| Capital shares outstanding | | | 41,925 | |
| Net asset value per share | | $ | 46.93 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 49.27 | |
| C-Class: | | | | |
| Net assets | | $ | 1,849,146 | |
| Capital shares outstanding | | | 43,462 | |
| Net asset value per share | | $ | 42.55 | |
| H-Class: | | | | |
| Net assets | | $ | 31,336,739 | |
| Capital shares outstanding | | | 669,039 | |
| Net asset value per share | | $ | 46.84 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013 |
| Investment Income: | | | |
| Dividends (net of foreign withholding tax of $156) | | $ | 184,758 | |
| Income from securities lending, net | | | 4,946 | |
| Interest | | | 807 | |
| Total investment income | | | 190,511 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 159,499 | |
| Transfer agent and administrative fees | | | 44,305 | |
| Distribution and service fees: | | | | |
| A-Class | | | 885 | |
| C-Class | | | 8,439 | |
| H-Class | | | 41,310 | |
| Portfolio accounting fees | | | 17,722 | |
| Custodian fees | | | 1,845 | |
| Trustees’ fees* | | | 1,826 | |
| Line of credit fees | | | 246 | |
| Miscellaneous | | | 35,167 | |
| Total expenses | | | 311,244 | |
| Net investment loss | | | (120,733 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 402,990 | |
| Swap agreements | | | 345,332 | |
| Futures contracts | | | 1,110,018 | |
| Foreign currency | | | (1 | ) |
| Net realized gain | | | 1,858,339 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 1,760,198 | |
| Swap agreements | | | (104,446 | ) |
| Futures contracts | | | (9,302 | ) |
| Foreign currency | | | 1 | |
| Net change in unrealized appreciation (depreciation) | | | 1,646,451 | |
| Net realized and unrealized gain | | | 3,504,790 | |
| Net increase in net assets resulting from operations | | $ | 3,384,057 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 88 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| RUSSELL 2000® 1.5x STRATEGY FUND |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (120,733 | ) | | $ | (89,798 | ) |
| Net realized gain on investments | | | 1,858,339 | | | | 4,305,014 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 1,646,451 | | | | 2,376,583 | |
| Net increase in net assets resulting from operations | | | 3,384,057 | | | | 6,591,799 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 1,511,415 | | | | 228,253 | |
| C-Class | | | 200,682 | | | | 228,943 | |
| H-Class | | | 117,420,871 | | | | 250,947,697 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (85,195 | ) | | | (1,182,104 | ) |
| C-Class | | | (325,471 | ) | | | (670,266 | ) |
| H-Class | | | (133,984,744 | ) | | | (227,207,565 | ) |
| Net increase (decrease) from capital share transactions | | | (15,262,442 | ) | | | 22,344,958 | |
| Net increase (decrease) in net assets | | | (11,878,385 | ) | | | 28,936,757 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 47,031,890 | | | | 18,095,133 | |
| End of period | | $ | 35,153,505 | | | $ | 47,031,890 | |
| Accumulated net investment loss at end of period | | $ | (225,264 | ) | | $ | (104,531 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 34,057 | | | | 6,710 | |
| C-Class | | | 5,212 | | | | 7,508 | |
| H-Class | | | 2,765,714 | | | | 7,767,546 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (2,112 | ) | | | (38,805 | ) |
| C-Class | | | (8,839 | ) | | | (22,694 | ) |
| H-Class | | | (3,242,317 | ) | | | (7,085,665 | ) |
| Net increase (decrease) in shares | | | (448,285 | ) | | | 634,600 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 89 |
| RUSSELL 2000® 1.5x STRATEGY 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 39.32 | | | $ | 32.20 | | | $ | 34.37 | | | $ | 25.24 | | | $ | 12.49 | | | $ | 28.62 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.10 | ) | | | (.16 | ) | | | (.39 | ) | | | (.35 | ) | | | (.11 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 7.71 | | | | 7.28 | | | | (1.78 | ) | | | 9.48 | | | | 12.86 | | | | (16.11 | ) |
| Total from investment operations | | | 7.61 | | | | 7.12 | | | | (2.17 | ) | | | 9.13 | | | | 12.75 | | | | (16.13 | ) |
| Net asset value, end of period | | $ | 46.93 | | | $ | 39.32 | | | $ | 32.20 | | | $ | 34.37 | | | $ | 25.24 | | | $ | 12.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 19.35 | % | | | 22.11 | % | | | (6.31 | %) | | | 36.17 | % | | | 102.08 | % | | | (56.36 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,968 | | | $ | 392 | | | $ | 1,355 | | | $ | 2,312 | | | $ | 585 | | | $ | 591 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.48 | %) | | | (0.51 | %) | | | (1.24 | %) | | | (1.25 | %) | | | (0.59 | %) | | | (0.07 | %) |
| Total expenses | | | 1.72 | % | | | 1.71 | % | | | 1.73 | % | | | 1.72 | % | | | 1.71 | % | | | 1.70 | % |
| Portfolio turnover rate | | | 150 | % | | | 527 | % | | | 177 | % | | | 211 | % | | | 109 | % | | | 288 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 35.78 | | | $ | 29.52 | | | $ | 31.75 | | | $ | 23.50 | | | $ | 11.71 | | | $ | 27.10 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.27 | ) | | | (.34 | ) | | | (.54 | ) | | | (.47 | ) | | | (.24 | ) | | | (.18 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 7.04 | | | | 6.60 | | | | (1.69 | ) | | | 8.72 | | | | 12.03 | | | | (15.21 | ) |
| Total from investment operations | | | 6.77 | | | | 6.26 | | | | (2.23 | ) | | | 8.25 | | | | 11.79 | | | | (15.39 | ) |
| Net asset value, end of period | | $ | 42.55 | | | $ | 35.78 | | | $ | 29.52 | | | $ | 31.75 | | | $ | 23.50 | | | $ | 11.71 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 18.92 | % | | | 21.21 | % | | | (7.02 | %) | | | 35.11 | % | | | 100.68 | % | | | (56.79 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,849 | | | $ | 1,685 | | | $ | 1,839 | | | $ | 2,786 | | | $ | 2,782 | | | $ | 3,381 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.41 | %) | | | (1.15 | %) | | | (1.99 | %) | | | (1.90 | %) | | | (1.36 | %) | | | (0.83 | %) |
| Total expenses | | | 2.47 | % | | | 2.46 | % | | | 2.49 | % | | | 2.47 | % | | | 2.46 | % | | | 2.45 | % |
| Portfolio turnover rate | | | 150 | % | | | 527 | % | | | 177 | % | | | 211 | % | | | 109 | % | | | 288 | % |
| 90 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| RUSSELL 2000® 1.5x STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 39.24 | | | $ | 32.13 | | | $ | 34.29 | | | $ | 25.21 | | | $ | 12.47 | | | $ | 28.62 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.14 | ) | | | (.08 | ) | | | (.37 | ) | | | (.35 | ) | | | (.19 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 7.74 | | | | 7.19 | | | | (1.79 | ) | | | 9.43 | | | | 12.93 | | | | (16.13 | ) |
| Total from investment operations | | | 7.60 | | | | 7.11 | | | | (2.16 | ) | | | 9.08 | | | | 12.74 | | | | (16.15 | ) |
| Net asset value, end of period | | $ | 46.84 | | | $ | 39.24 | | | $ | 32.13 | | | $ | 34.29 | | | $ | 25.21 | | | $ | 12.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 19.37 | % | | | 22.13 | % | | | (6.30 | %) | | | 36.02 | % | | | 102.17 | % | | | (56.43 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 31,337 | | | $ | 44,955 | | | $ | 14,902 | | | $ | 37,780 | | | $ | 23,320 | | | $ | 13,807 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.65 | %) | | | (0.25 | %) | | | (1.24 | %) | | | (1.25 | %) | | | (0.94 | %) | | | (0.07 | %) |
| Total expenses | | | 1.72 | % | | | 1.71 | % | | | 1.73 | % | | | 1.72 | % | | | 1.71 | % | | | 1.70 | % |
| Portfolio turnover rate | | | 150 | % | | | 527 | % | | | 177 | % | | | 211 | % | | | 109 | % | | | 288 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 91 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
RUSSELL 2000® FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is the Russell 2000® Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | May 31, 2006 |
| C-Class | | May 31, 2006 |
| H-Class | | May 31, 2006 |
| Ten Largest Holdings (% of Total Net Assets) |
| CoStar Group, Inc. | | | 0.2 | % |
| Isis Pharmaceuticals, Inc. | | | 0.1 | % |
| Ultimate Software Group, Inc. | | | 0.1 | % |
| CommVault Systems, Inc. | | | 0.1 | % |
| athenahealth, Inc. | | | 0.1 | % |
| Acuity Brands, Inc. | | | 0.1 | % |
| Middleby Corp. | | | 0.1 | % |
| Prosperity Bancshares, Inc. | | | 0.1 | % |
| Chart Industries, Inc. | | | 0.1 | % |
| Alnylam Pharmaceuticals, Inc. | | | 0.1 | % |
| Top Ten Total | | | 1.1 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 92 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | | | |
| COMMON STOCKS† - 49.8% | | | | | | | | |
| | | | | | | | | |
| FINANCIALS - 11.1% | | | | | | | | |
| Prosperity Bancshares, Inc. | | | 1,561 | | | $ | 96,533 | |
| FirstMerit Corp. | | | 4,283 | | | | 92,985 | |
| CNO Financial Group, Inc. | | | 5,750 | | | | 82,800 | |
| Portfolio Recovery Associates, Inc.* | | | 1,311 | | | | 78,581 | |
| Financial Engines, Inc. | | | 1,268 | | | | 75,371 | |
| RLJ Lodging Trust | | | 3,202 | | | | 75,216 | |
| LaSalle Hotel Properties | | | 2,470 | | | | 70,445 | |
| Highwoods Properties, Inc. | | | 1,972 | | | | 69,632 | |
| Hancock Holding Co. | | | 2,198 | | | | 68,974 | |
| First American Financial Corp. | | | 2,795 | | | | 68,057 | |
| Stifel Financial Corp.* | | | 1,640 | | | | 67,601 | |
| Prospect Capital Corp. | | | 5,986 | | | | 66,923 | |
| Radian Group, Inc. | | | 4,473 | | | | 62,308 | |
| Geo Group, Inc. | | | 1,853 | | | | 61,612 | |
| CubeSmart | | | 3,442 | | | | 61,405 | |
| Sovran Self Storage, Inc. | | | 809 | | | | 61,225 | |
| MGIC Investment Corp.* | | | 8,391 | | | | 61,086 | |
| Susquehanna Bancshares, Inc. | | | 4,826 | | | | 60,566 | |
| Webster Financial Corp. | | | 2,338 | | | | 59,689 | |
| Primerica, Inc. | | | 1,473 | | | | 59,421 | |
| EPR Properties | | | 1,215 | | | | 59,219 | |
| MarketAxess Holdings, Inc. | | | 971 | | | | 58,299 | |
| Healthcare Realty Trust, Inc. | | | 2,430 | | | | 56,157 | |
| DCT Industrial Trust, Inc. | | | 7,522 | | | | 54,083 | |
| DiamondRock Hospitality Co. | | | 5,057 | | | | 53,958 | |
| Invesco Mortgage Capital, Inc. | | | 3,497 | | | | 53,818 | |
| Chambers Street Properties | | | 6,120 | | | | 53,733 | |
| Sunstone Hotel Investors, Inc. | | | 4,213 | | | | 53,674 | |
| Colonial Properties Trust | | | 2,290 | | | | 51,502 | |
| BancorpSouth, Inc. | | | 2,460 | | | | 49,052 | |
| Lexington Realty Trust | | | 4,365 | | | | 49,019 | |
| American Realty Capital Properties, Inc. | | | 3,980 | | | | 48,556 | |
| RLI Corp. | | | 552 | | | | 48,256 | |
| Texas Capital Bancshares, Inc.* | | | 1,049 | | | | 48,223 | |
| First Financial Bankshares, Inc. | | | 815 | | | | 47,938 | |
| Capitol Federal Financial, Inc. | | | 3,854 | | | | 47,905 | |
| Cathay General Bancorp | | | 2,036 | | | | 47,581 | |
| Apollo Investment Corp. | | | 5,816 | | | | 47,400 | |
| Umpqua Holdings Corp. | | | 2,898 | | | | 47,006 | |
| Glacier Bancorp, Inc. | | | 1,866 | | | | 46,109 | |
| Pebblebrook Hotel Trust | | | 1,592 | | | | 45,706 | |
| EastGroup Properties, Inc. | | | 771 | | | | 45,651 | |
| UMB Financial Corp. | | | 839 | | | | 45,591 | |
| FNB Corp. | | | 3,754 | | | | 45,536 | |
| First Industrial Realty Trust, Inc. | | | 2,776 | | | | 45,166 | |
| Platinum Underwriters Holdings Ltd. | | | 752 | | | | 44,917 | |
| Medical Properties Trust, Inc. | | | 3,666 | | | | 44,615 | |
| Trustmark Corp. | | | 1,734 | | | | 44,390 | |
| First Cash Financial Services, Inc.* | | | 751 | | | | 43,520 | |
| Washington Real Estate Investment Trust | | | 1,722 | | | | 43,515 | |
| New Residential Investment Corp. | | | 6,540 | | | | 43,294 | |
| Redwood Trust, Inc. | | | 2,127 | | | | 41,880 | |
| Potlatch Corp. | | | 1,047 | | | | 41,545 | |
| DuPont Fabros Technology, Inc. | | | 1,612 | | | | 41,541 | |
| Strategic Hotels & Resorts, Inc.* | | | 4,690 | | | | 40,709 | |
| ARMOUR Residential REIT, Inc. | | | 9,678 | | | | 40,648 | |
| Evercore Partners, Inc. — Class A | | | 819 | | | | 40,319 | |
| MB Financial, Inc. | | | 1,421 | | | | 40,129 | |
| Alexander & Baldwin, Inc.* | | | 1,114 | | | | 40,126 | |
| IBERIABANK Corp. | | | 770 | | | | 39,940 | |
| Sun Communities, Inc. | | | 930 | | | | 39,637 | |
| NorthStar Realty Finance Corp. | | | 4,270 | | | | 39,626 | |
| Wintrust Financial Corp. | | | 962 | | | | 39,509 | |
| Ryman Hospitality Properties, Inc. | | | 1,136 | | | | 39,203 | |
| Bank of the Ozarks, Inc. | | | 808 | | | | 38,776 | |
| United Bankshares, Inc.1 | | | 1,301 | | | | 37,703 | |
| Walter Investment Management Corp.* | | | 952 | | | | 37,642 | |
| Symetra Financial Corp. | | | 2,109 | | | | 37,582 | |
| Old National Bancorp | | | 2,620 | | | | 37,204 | |
| CYS Investments, Inc. | | | 4,512 | | | | 36,683 | |
| Home Loan Servicing Solutions Ltd. | | | 1,661 | | | | 36,559 | |
| Greenhill & Company, Inc. | | | 732 | | | | 36,512 | |
| Glimcher Realty Trust | | | 3,738 | | | | 36,447 | |
| Western Alliance Bancorporation* | | | 1,914 | | | | 36,232 | |
| National Health Investors, Inc. | | | 634 | | | | 36,068 | |
| PrivateBancorp, Inc. — Class A | | | 1,680 | | | | 35,952 | |
| Home BancShares, Inc. | | | 1,167 | | | | 35,442 | |
| Community Bank System, Inc. | | | 1,038 | | | | 35,417 | |
| Enstar Group Ltd.* | | | 257 | | | | 35,106 | |
| Acadia Realty Trust | | | 1,421 | | | | 35,070 | |
| Selective Insurance Group, Inc. | | | 1,431 | | | | 35,060 | |
| PHH Corp.* | | | 1,476 | | | | 35,040 | |
| American Equity Investment Life Holding Co. | | | 1,651 | | | | 35,034 | |
| PS Business Parks, Inc. | | | 468 | | | | 34,922 | |
| Westamerica Bancorporation | | | 696 | | | | 34,619 | |
| First Financial Holdings, Inc. | | | 622 | | | | 34,310 | |
| LTC Properties, Inc. | | | 903 | | | | 34,296 | |
| Equity One, Inc. | | | 1,554 | | | | 33,970 | |
| Government Properties Income Trust | | | 1,414 | | | | 33,837 | |
| PacWest Bancorp | | | 979 | | | | 33,638 | |
| Cash America International, Inc. | | | 741 | | | | 33,552 | |
| Colony Financial, Inc. | | | 1,671 | | | | 33,387 | |
| Pennsylvania Real Estate Investment Trust | | | 1,762 | | | | 32,949 | |
| Janus Capital Group, Inc. | | | 3,860 | | | | 32,849 | |
| Columbia Banking System, Inc. | | | 1,316 | | | | 32,505 | |
| Fifth Street Finance Corp. | | | 3,122 | | | | 32,125 | |
| Northwest Bancshares, Inc. | | | 2,429 | | | | 32,111 | |
| CVB Financial Corp. | | | 2,375 | | | | 32,110 | |
| Amtrust Financial Services, Inc.1 | | | 806 | | | | 31,482 | |
| EverBank Financial Corp. | | | 2,079 | | | | 31,143 | |
| National Penn Bancshares, Inc. | | | 3,027 | | | | 30,421 | |
| WisdomTree Investments, Inc.* | | | 2,598 | | | | 30,163 | |
| American Capital Mortgage Investment Corp. | | | 1,526 | | | | 30,154 | |
| Argo Group International Holdings Ltd. | | | 701 | | | | 30,059 | |
| International Bancshares Corp. | | | 1,384 | | | | 29,936 | |
| Hilltop Holdings, Inc.* | | | 1,607 | | | | 29,730 | |
| Montpelier Re Holdings Ltd. | | | 1,139 | | | | 29,671 | |
| Franklin Street Properties Corp. | | | 2,323 | | | | 29,595 | |
| Chesapeake Lodging Trust | | | 1,256 | | | | 29,566 | |
| PennyMac Mortgage Investment Trust | | | 1,293 | | | | 29,325 | |
| Hersha Hospitality Trust — Class A | | | 5,242 | | | | 29,303 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 93 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | | | |
| First Midwest Bancorp, Inc. | | | 1,939 | | | $ | 29,298 | |
| Encore Capital Group, Inc.* | | | 637 | | | | 29,213 | |
| Horace Mann Educators Corp. | | | 1,029 | | | | 29,202 | |
| Capstead Mortgage Corp. | | | 2,469 | | | | 29,060 | |
| Astoria Financial Corp. | | | 2,280 | | | | 28,363 | |
| BBCN Bancorp, Inc. | | | 2,046 | | | | 28,153 | |
| National Bank Holdings Corp. — Class A | | | 1,347 | | | | 27,667 | |
| Pinnacle Financial Partners, Inc.* | | | 907 | | | | 27,038 | |
| Education Realty Trust, Inc. | | | 2,952 | | | | 26,863 | |
| iStar Financial, Inc.* | | | 2,200 | | | | 26,488 | |
| American Assets Trust, Inc. | | | 865 | | | | 26,391 | |
| NBT Bancorp, Inc. | | | 1,130 | | | | 25,967 | |
| Solar Capital Ltd. | | | 1,164 | | | | 25,806 | |
| Kennedy-Wilson Holdings, Inc. | | | 1,354 | | | | 25,130 | |
| Sterling Financial Corp. | | | 875 | | | | 25,069 | |
| Provident Financial Services, Inc. | | | 1,546 | | | | 25,061 | |
| Investors Bancorp, Inc. | | | 1,144 | | | | 25,031 | |
| Virtus Investment Partners, Inc.* | | | 150 | | | | 24,396 | |
| Main Street Capital Corp. | | | 814 | | | | 24,363 | |
| Hercules Technology Growth Capital, Inc. | | | 1,591 | | | | 24,263 | |
| Employers Holdings, Inc. | | | 802 | | | | 23,851 | |
| Ramco-Gershenson Properties Trust | | | 1,539 | | | | 23,716 | |
| Park National Corp. | | | 296 | | | | 23,408 | |
| Boston Private Financial Holdings, Inc. | | | 2,058 | | | | 22,844 | |
| First Financial Bancorp | | | 1,492 | | | | 22,634 | |
| Nelnet, Inc. — Class A | | | 588 | | | | 22,609 | |
| Inland Real Estate Corp. | | | 2,206 | | | | 22,567 | |
| Retail Opportunity Investments Corp. | | | 1,618 | | | | 22,361 | |
| EZCORP, Inc. — Class A* | | | 1,321 | | | | 22,298 | |
| Sabra Health Care REIT, Inc. | | | 963 | | | | 22,159 | |
| Hudson Pacific Properties, Inc. | | | 1,124 | | | | 21,862 | |
| STAG Industrial, Inc. | | | 1,085 | | | | 21,830 | |
| Investors Real Estate Trust | | | 2,611 | | | | 21,541 | |
| ViewPoint Financial Group, Inc. | | | 1,036 | | | | 21,414 | |
| Renasant Corp. | | | 788 | | | | 21,410 | |
| HFF, Inc. — Class A | | | 853 | | | | 21,368 | |
| Ambac Financial Group, Inc.* | | | 1,165 | | | | 21,133 | |
| World Acceptance Corp.*,1 | | | 235 | | | | 21,131 | |
| Independent Bank Corp. | | | 591 | | | | 21,099 | |
| Triangle Capital Corp. | | | 709 | | | | 20,823 | |
| Associated Estates Realty Corp. | | | 1,396 | | | | 20,814 | |
| Greenlight Capital Re Ltd. — Class A* | | | 725 | | | | 20,619 | |
| BofI Holding, Inc.* | | | 315 | | | | 20,431 | |
| Parkway Properties, Inc. | | | 1,126 | | | | 20,009 | |
| Chemical Financial Corp. | | | 715 | | | | 19,963 | |
| Credit Acceptance Corp.* | | | 180 | | | | 19,946 | |
| WesBanco, Inc. | | | 665 | | | | 19,770 | |
| FelCor Lodging Trust, Inc.* | | | 3,207 | | | | 19,755 | |
| CapLease, Inc. | | | 2,295 | | | | 19,485 | |
| Resource Capital Corp. | | | 3,280 | | | | 19,483 | |
| PennantPark Investment Corp. | | | 1,718 | | | | 19,345 | |
| Oritani Financial Corp. | | | 1,175 | | | | 19,341 | |
| Banner Corp. | | | 506 | | | | 19,309 | |
| First Commonwealth Financial Corp. | | | 2,534 | | | | 19,233 | |
| Forestar Group, Inc.* | | | 892 | | | | 19,205 | |
| Infinity Property & Casualty Corp. | | | 297 | | | | 19,186 | |
| First Potomac Realty Trust | | | 1,523 | | | | 19,144 | |
| OFG Bancorp | | | 1,180 | | | | 19,104 | |
| Banco Latinoamericano de Comercio Exterior S.A. — Class E | | | 760 | | | | 18,939 | |
| FXCM, Inc. — Class A | | | 947 | | | | 18,703 | |
| S&T Bancorp, Inc. | | | 769 | | | | 18,625 | |
| BGC Partners, Inc. — Class A | | | 3,290 | | | | 18,589 | |
| Northfield Bancorp, Inc. | | | 1,504 | | | | 18,259 | |
| BlackRock Kelso Capital Corp. | | | 1,913 | | | | 18,154 | |
| Anworth Mortgage Asset Corp. | | | 3,746 | | | | 18,093 | |
| Ashford Hospitality Trust, Inc. | | | 1,466 | | | | 18,090 | |
| CoreSite Realty Corp. | | | 532 | | | | 18,056 | |
| Campus Crest Communities, Inc. | | | 1,665 | | | | 17,982 | |
| Stewart Information Services Corp. | | | 548 | | | | 17,531 | |
| City Holding Co. | | | 405 | | | | 17,512 | |
| Tompkins Financial Corp. | | | 378 | | | | 17,471 | |
| Green Dot Corp. — Class A* | | | 660 | | | | 17,378 | |
| Safety Insurance Group, Inc. | | | 328 | | | | 17,374 | |
| Cousins Properties, Inc. | | | 1,678 | | | | 17,267 | |
| Brookline Bancorp, Inc. | | | 1,817 | | | | 17,098 | |
| Cohen & Steers, Inc. | | | 482 | | | | 17,019 | |
| AMERISAFE, Inc. | | | 478 | | | | 16,974 | |
| United Community Banks, Inc.* | | | 1,110 | | | | 16,650 | |
| Berkshire Hills Bancorp, Inc. | | | 650 | | | | 16,322 | |
| Eagle Bancorp, Inc.* | | | 573 | | | | 16,210 | |
| United Fire Group, Inc. | | | 528 | | | | 16,088 | |
| KCG Holdings, Inc. — Class A* | | | 1,840 | | | | 15,953 | |
| Summit Hotel Properties, Inc. | | | 1,705 | | | | 15,669 | |
| Navigators Group, Inc.* | | | 269 | | | | 15,540 | |
| Golub Capital BDC, Inc. | | | 894 | | | | 15,502 | |
| Maiden Holdings Ltd. | | | 1,292 | | | | 15,259 | |
| eHealth, Inc.* | | | 472 | | | | 15,226 | |
| Alexander’s, Inc. | | | 53 | | | | 15,164 | |
| Investment Technology Group, Inc.* | | | 960 | | | | 15,091 | |
| Bancorp, Inc.* | | | 850 | | | | 15,062 | |
| Altisource Residential Corp. | | | 650 | | | | 14,937 | |
| Sandy Spring Bancorp, Inc. | | | 641 | | | | 14,910 | |
| Excel Trust, Inc. | | | 1,236 | | | | 14,832 | |
| Flushing Financial Corp. | | | 796 | | | | 14,686 | |
| TrustCo Bank Corp. NY | | | 2,441 | | | | 14,548 | |
| Apollo Commercial Real Estate Finance, Inc. | | | 952 | | | | 14,537 | |
| Community Trust Bancorp, Inc. | | | 358 | | | | 14,531 | |
| Piper Jaffray Cos.* | | | 416 | | | | 14,265 | |
| Capital Bank Financial Corp. — Class A* | | | 642 | | | | 14,092 | |
| Kite Realty Group Trust | | | 2,369 | | | | 14,048 | |
| Lakeland Financial Corp. | | | 427 | | | | 13,942 | |
| ICG Group, Inc.* | | | 981 | | | | 13,920 | |
| Dime Community Bancshares, Inc. | | | 821 | | | | 13,670 | |
| Hanmi Financial Corp. | | | 812 | | | | 13,455 | |
| TICC Capital Corp. | | | 1,362 | | | | 13,280 | |
| Simmons First National Corp. — Class A | | | 427 | | | | 13,275 | |
| StellarOne Corp. | | | 584 | | | | 13,140 | |
| Wilshire Bancorp, Inc. | | | 1,599 | | | | 13,080 | |
| State Bank Financial Corp. | | | 823 | | | | 13,061 | |
| Select Income REIT | | | 505 | | | | 13,029 | |
| First Merchants Corp. | | | 749 | | | | 12,980 | |
| New Mountain Finance Corp. | | | 900 | | | | 12,969 | |
| Getty Realty Corp. | | | 666 | | | | 12,940 | |
| 94 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | | | |
| Cardinal Financial Corp. | | | 778 | | | $ | 12,860 | |
| Urstadt Biddle Properties, Inc. — Class A | | | 645 | | | | 12,823 | |
| RAIT Financial Trust | | | 1,811 | | | | 12,822 | |
| Universal Health Realty Income Trust | | | 306 | | | | 12,812 | |
| PICO Holdings, Inc.* | | | 584 | | | | 12,649 | |
| Provident New York Bancorp | | | 1,151 | | | | 12,534 | |
| Dynex Capital, Inc. | | | 1,419 | | | | 12,445 | |
| Southside Bancshares, Inc. | | | 461 | | | | 12,364 | |
| NewStar Financial, Inc.* | | | 676 | | | | 12,351 | |
| Union First Market Bankshares Corp. | | | 523 | | | | 12,223 | |
| Apollo Residential Mortgage, Inc. | | | 828 | | | | 12,081 | |
| AG Mortgage Investment Trust, Inc. | | | 726 | | | | 12,066 | |
| WSFS Financial Corp. | | | 199 | | | | 11,990 | |
| GAMCO Investors, Inc. — Class A | | | 156 | | | | 11,845 | |
| Rouse Properties, Inc. | | | 570 | | | | 11,731 | |
| Capital Southwest Corp. | | | 340 | | | | 11,631 | |
| Washington Trust Bancorp, Inc. | | | 366 | | | | 11,503 | |
| DFC Global Corp.* | | | 1,046 | | | | 11,496 | |
| Ameris Bancorp* | | | 621 | | | | 11,414 | |
| National Western Life Insurance Co. — Class A | | | 55 | | | | 11,097 | |
| Sterling Bancorp | | | 802 | | | | 11,011 | |
| TCP Capital Corp. | | | 676 | | | | 10,965 | |
| Tejon Ranch Co.* | | | 354 | | | | 10,918 | |
| Virginia Commerce Bancorp, Inc.* | | | 694 | | | | 10,778 | |
| First Interstate Bancsystem, Inc. — Class A | | | 443 | | | | 10,698 | |
| First BanCorp* | | | 1,864 | | | | 10,588 | |
| Heartland Financial USA, Inc. | | | 379 | | | | 10,559 | |
| 1st Source Corp. | | | 390 | | | | 10,499 | |
| Tower Group International Ltd. | | | 1,490 | | | | 10,430 | |
| FBL Financial Group, Inc. — Class A | | | 230 | | | | 10,327 | |
| New York Mortgage Trust, Inc. | | | 1,652 | | | | 10,325 | |
| Agree Realty Corp. | | | 341 | | | | 10,291 | |
| Terreno Realty Corp. | | | 572 | | | | 10,159 | |
| SY Bancorp, Inc. | | | 358 | | | | 10,142 | |
| Western Asset Mortgage Capital Corp. | | | 630 | | | | 10,074 | |
| Central Pacific Financial Corp. | | | 565 | | | | 10,001 | |
| Monmouth Real Estate Investment Corp. — Class A | | | 1,101 | | | | 9,986 | |
| BancFirst Corp. | | | 184 | | | | 9,949 | |
| Taylor Capital Group, Inc.* | | | 444 | | | | 9,835 | |
| TowneBank | | | 682 | | | | 9,834 | |
| First Busey Corp. | | | 1,871 | | | | 9,748 | |
| Arlington Asset Investment Corp. — Class A | | | 409 | | | | 9,726 | |
| Citizens, Inc.* | | | 1,122 | | | | 9,694 | |
| Cedar Realty Trust, Inc. | | | 1,871 | | | | 9,692 | |
| HCI Group, Inc. | | | 236 | | | | 9,638 | |
| CyrusOne, Inc. | | | 495 | | | | 9,395 | |
| Bryn Mawr Bank Corp. | | | 344 | | | | 9,278 | |
| MCG Capital Corp. | | | 1,840 | | | | 9,274 | |
| Trico Bancshares | | | 407 | | | | 9,271 | |
| Rockville Financial, Inc. | | | 713 | | | | 9,269 | |
| First Financial Corp. | | | 293 | | | | 9,250 | |
| Saul Centers, Inc. | | | 199 | | | | 9,204 | |
| Medley Capital Corp. | | | 655 | | | | 9,032 | |
| Federal Agricultural Mortgage Corp. — Class C | | | 268 | | | | 8,946 | |
| HomeTrust Bancshares, Inc.* | | | 536 | | | | 8,844 | |
| CoBiz Financial, Inc. | | | 914 | | | | 8,829 | |
| Cowen Group, Inc. — Class A* | | | 2,523 | | | | 8,704 | |
| OneBeacon Insurance Group Ltd. — Class A | | | 581 | | | | 8,576 | |
| Westwood Holdings Group, Inc. | | | 176 | | | | 8,457 | |
| Winthrop Realty Trust | | | 756 | | | | 8,429 | |
| Meadowbrook Insurance Group, Inc. | | | 1,292 | | | | 8,398 | |
| Customers Bancorp, Inc.* | | | 520 | | | | 8,372 | |
| Safeguard Scientifics, Inc.* | | | 532 | | | | 8,347 | |
| THL Credit, Inc. | | | 531 | | | | 8,294 | |
| German American Bancorp, Inc. | | | 326 | | | | 8,222 | |
| United Financial Bancorp, Inc. | | | 507 | | | | 8,198 | |
| Camden National Corp. | | | 200 | | | | 8,180 | |
| Beneficial Mutual Bancorp, Inc.* | | | 818 | | | | 8,155 | |
| Diamond Hill Investment Group, Inc. | | | 76 | | | | 8,128 | |
| Univest Corporation of Pennsylvania | | | 428 | | | | 8,068 | |
| State Auto Financial Corp. | | | 385 | | | | 8,062 | |
| First of Long Island Corp. | | | 207 | | | | 8,042 | |
| MVC Capital, Inc. | | | 614 | | | | 8,019 | |
| AmREIT, Inc. — Class B | | | 457 | | | | 7,929 | |
| Hudson Valley Holding Corp. | | | 422 | | | | 7,925 | |
| Enterprise Financial Services Corp. | | | 470 | | | | 7,887 | |
| MainSource Financial Group, Inc. | | | 518 | | | | 7,868 | |
| Metro Bancorp, Inc.* | | | 362 | | | | 7,606 | |
| Flagstar Bancorp, Inc.* | | | 515 | | | | 7,601 | |
| Bank Mutual Corp. | | | 1,200 | | | | 7,524 | |
| First Community Bancshares, Inc. | | | 459 | | | | 7,505 | |
| Southwest Bancorp, Inc.* | | | 505 | | | | 7,479 | |
| Centerstate Banks, Inc. | | | 770 | | | | 7,454 | |
| Great Southern Bancorp, Inc. | | | 264 | | | | 7,453 | |
| Park Sterling Corp. | | | 1,154 | | | | 7,397 | |
| International. FCStone, Inc.* | | | 361 | | | | 7,382 | |
| Lakeland Bancorp, Inc. | | | 655 | | | | 7,369 | |
| American Safety Insurance Holdings Ltd.* | | | 243 | | | | 7,339 | |
| GSV Capital Corp.* | | | 495 | | | | 7,336 | |
| First Bancorp | | | 507 | | | | 7,326 | |
| Financial Institutions, Inc. | | | 355 | | | | 7,263 | |
| Medallion Financial Corp. | | | 483 | | | | 7,187 | |
| OmniAmerican Bancorp, Inc.* | | | 292 | | | | 7,142 | |
| GFI Group, Inc. | | | 1,803 | | | | 7,122 | |
| Arrow Financial Corp. | | | 270 | | | | 6,895 | |
| Fidus Investment Corp. | | | 353 | | | | 6,848 | |
| Aviv REIT, Inc. | | | 300 | | | | 6,840 | |
| Republic Bancorp, Inc. — Class A | | | 247 | | | | 6,805 | |
| Crawford & Co. — Class B | | | 701 | | | | 6,800 | |
| Walker & Dunlop, Inc.* | | | 424 | | | | 6,746 | |
| KCAP Financial, Inc. | | | 732 | | | | 6,573 | |
| Whitestone REIT — Class B | | | 442 | | | | 6,511 | |
| First Connecticut Bancorp, Inc. | | | 439 | | | | 6,453 | |
| HomeStreet, Inc. | | | 332 | | | | 6,408 | |
| Chatham Lodging Trust | | | 358 | | | | 6,394 | |
| Gramercy Property Trust, Inc.* | | | 1,540 | | | | 6,391 | |
| Yadkin Financial Corp.* | | | 370 | | | | 6,375 | |
| Gladstone Commercial Corp. | | | 351 | | | | 6,304 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 95 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Citizens & Northern Corp. | | | 316 | | | $ | 6,301 | |
| BNC Bancorp | | | 470 | | | | 6,270 | |
| Charter Financial Corp. | | | 579 | | | | 6,253 | |
| American Residential Properties, Inc.* | | | 355 | | | | 6,252 | |
| National Bankshares, Inc. | | | 174 | | | | 6,245 | |
| Silver Bay Realty Trust Corp. | | | 395 | | | | 6,186 | |
| One Liberty Properties, Inc. | | | 302 | | | | 6,125 | |
| FBR & Co.* | | | 227 | | | | 6,086 | |
| Pacific Continental Corp. | | | 462 | | | | 6,057 | |
| Heritage Financial Corp. | | | 388 | | | | 6,022 | |
| PennyMac Financial Services, Inc. — Class A* | | | 320 | | | | 6,013 | |
| Territorial Bancorp, Inc. | | | 272 | | | | 5,976 | |
| OceanFirst Financial Corp. | | | 352 | | | | 5,952 | |
| Bank of Marin Bancorp | | | 142 | | | | 5,900 | |
| First Defiance Financial Corp. | | | 252 | | | | 5,894 | |
| Manning & Napier, Inc. — Class A | | | 353 | | | | 5,888 | |
| Consolidated-Tomoka Land Co. | | | 152 | | | | 5,850 | |
| Phoenix Companies, Inc.* | | | 151 | | | | 5,839 | |
| Peoples Bancorp, Inc. | | | 275 | | | | 5,742 | |
| Baldwin & Lyons, Inc. — Class B | | | 235 | | | | 5,729 | |
| Washington Banking Co. | | | 404 | | | | 5,680 | |
| 1st United Bancorp, Inc. | | | 774 | | | | 5,673 | |
| Pacific Premier Bancorp, Inc.* | | | 420 | | | | 5,645 | |
| MetroCorp Bancshares, Inc. | | | 407 | | | | 5,600 | |
| Global Indemnity plc — Class A* | | | 217 | | | | 5,525 | |
| CNB Financial Corp. | | | 322 | | | | 5,490 | |
| Fox Chase Bancorp, Inc. | | | 313 | | | | 5,446 | |
| Solar Senior Capital Ltd. | | | 300 | | | | 5,424 | |
| Ames National Corp. | | | 236 | | | | 5,374 | |
| Horizon Bancorp | | | 229 | | | | 5,347 | |
| Franklin Financial Corp. | | | 282 | | | | 5,347 | |
| Preferred Bank/Los Angeles CA* | | | 300 | | | | 5,337 | |
| Firsthand Technology Value Fund, Inc.* | | | 216 | | | | 5,288 | |
| Suffolk Bancorp* | | | 297 | | | | 5,263 | |
| Marlin Business Services Corp. | | | 209 | | | | 5,217 | |
| Thomas Properties Group, Inc. | | | 774 | | | | 5,201 | |
| Guaranty Bancorp | | | 377 | | | | 5,161 | |
| Calamos Asset Management, Inc. — Class A | | | 516 | | | | 5,155 | |
| West Bancorporation, Inc. | | | 373 | | | | 5,147 | |
| Banc of California, Inc. | | | 367 | | | | 5,076 | |
| Fidelity Southern Corp. | | | 330 | | | | 5,062 | |
| Mercantile Bank Corp. | | | 229 | | | | 4,988 | |
| Sierra Bancorp | | | 316 | | | | 4,971 | |
| Armada Hoffler Properties, Inc. | | | 495 | | | | 4,905 | |
| Bridge Bancorp, Inc. | | | 227 | | | | 4,881 | |
| Gladstone Investment Corp. | | | 684 | | | | 4,822 | |
| Ladenburg Thalmann Financial Services, Inc.* | | | 2,660 | | | | 4,815 | |
| American National Bankshares, Inc. | | | 206 | | | | 4,779 | |
| NewBridge Bancorp* | | | 655 | | | | 4,775 | |
| BankFinancial Corp. | | | 535 | | | | 4,772 | |
| Universal Insurance Holdings, Inc. | | | 673 | | | | 4,745 | |
| Meta Financial Group, Inc. | | | 124 | | | | 4,712 | |
| National Interstate Corp. | | | 169 | | | | 4,700 | |
| Kansas City Life Insurance Co. | | | 105 | | | | 4,643 | |
| Gladstone Capital Corp. | | | 531 | | | | 4,636 | |
| MPG Office Trust, Inc.* | | | 1,480 | | | | 4,632 | |
| Oppenheimer Holdings, Inc. — Class A | | | 260 | | | | 4,620 | |
| Home Federal Bancorp, Inc. | | | 366 | | | | 4,604 | |
| Meridian Interstate Bancorp, Inc.* | | | 211 | | | | 4,598 | |
| Stellus Capital Investment Corp. | | | 305 | | | | 4,569 | |
| Ares Commercial Real Estate Corp. | | | 360 | | | | 4,475 | |
| Regional Management Corp.* | | | 140 | | | | 4,452 | |
| PennantPark Floating Rate Capital Ltd. | | | 320 | | | | 4,410 | |
| MidWestOne Financial Group, Inc. | | | 171 | | | | 4,396 | |
| CU Bancorp* | | | 240 | | | | 4,380 | |
| Center Bancorp, Inc. | | | 306 | | | | 4,357 | |
| Peapack Gladstone Financial Corp. | | | 233 | | | | 4,322 | |
| Bank of Kentucky Financial Corp. | | | 157 | | | | 4,288 | |
| Nicholas Financial, Inc. | | | 262 | | | | 4,268 | |
| Hannon Armstrong Sustainable Infrastructure Capital, Inc. | | | 374 | | | | 4,264 | |
| Bridge Capital Holdings* | | | 251 | | | | 4,262 | |
| Tree.com, Inc. | | | 161 | | | | 4,228 | |
| Merchants Bancshares, Inc. | | | 145 | | | | 4,198 | |
| SWS Group, Inc.* | | | 751 | | | | 4,191 | |
| ESB Financial Corp. | | | 328 | | | | 4,182 | |
| AV Homes, Inc.* | | | 239 | | | | 4,173 | |
| First Bancorp, Inc. | | | 248 | | | | 4,161 | |
| Farmers Capital Bank Corp.* | | | 190 | | | | 4,153 | |
| JAVELIN Mortgage Investment Corp. | | | 350 | | | | 4,141 | |
| Seacoast Banking Corporation of Florida* | | | 1,900 | | | | 4,123 | |
| Heritage Commerce Corp. | | | 534 | | | | 4,085 | |
| Northrim BanCorp, Inc. | | | 168 | | | | 4,049 | |
| First Financial Northwest, Inc. | | | 388 | | | | 4,047 | |
| Sun Bancorp, Inc.* | | | 1,047 | | | | 4,010 | |
| Eastern Insurance Holdings, Inc. | | | 163 | | | | 3,979 | |
| C&F Financial Corp. | | | 82 | | | | 3,969 | |
| NGP Capital Resources Co. | | | 531 | | | | 3,945 | |
| UMH Properties, Inc. | | | 394 | | | | 3,912 | |
| Provident Financial Holdings, Inc. | | | 232 | | | | 3,854 | |
| Capital City Bank Group, Inc.* | | | 320 | | | | 3,770 | |
| Kearny Financial Corp.* | | | 362 | | | | 3,700 | |
| Intervest Bancshares Corp. — Class A* | | | 464 | | | | 3,680 | |
| Bar Harbor Bankshares | | | 99 | | | | 3,642 | |
| Penns Woods Bancorp, Inc. | | | 73 | | | | 3,637 | |
| Gain Capital Holdings, Inc. | | | 288 | | | | 3,626 | |
| Enterprise Bancorp, Inc. | | | 191 | | | | 3,612 | |
| Independent Bank Group, Inc. | | | 100 | | | | 3,600 | |
| Roma Financial Corp.* | | | 191 | | | | 3,551 | |
| EMC Insurance Group, Inc. | | | 113 | | | | 3,410 | |
| MidSouth Bancorp, Inc. | | | 217 | | | | 3,364 | |
| First Security Group, Inc.* | | | 1,615 | | | | 3,359 | |
| Heritage Oaks Bancorp* | | | 520 | | | | 3,328 | |
| Westfield Financial, Inc. | | | 468 | | | | 3,304 | |
| Macatawa Bank Corp.* | | | 613 | | | | 3,298 | �� |
| United Community Financial Corp.* | | | 824 | | | | 3,205 | |
| Hallmark Financial Services, Inc.* | | | 359 | | | | 3,184 | |
| Doral Financial Corp.* | | | 166 | | | | 3,167 | |
| Chemung Financial Corp. | | | 90 | | | | 3,117 | |
| Home Bancorp, Inc.* | | | 164 | | | | 2,962 | |
| LCNB Corp. | | | 150 | | | | 2,939 | |
| NASB Financial, Inc.* | | | 107 | | | | 2,935 | |
| 96 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Century Bancorp, Inc. — Class A | | | 86 | | | $ | 2,866 | |
| Independence Holding Co. | | | 199 | | | | 2,842 | |
| Imperial Holdings, Inc.* | | | 447 | | | | 2,830 | |
| Horizon Technology Finance Corp. | | | 210 | | | | 2,797 | |
| Clifton Savings Bancorp, Inc. | | | 224 | | | | 2,775 | |
| WhiteHorse Finance, Inc. | | | 180 | | | | 2,718 | |
| Access National Corp. | | | 190 | | | | 2,709 | |
| Donegal Group, Inc. — Class A | | | 193 | | | | 2,700 | |
| CommunityOne Bancorp* | | | 270 | | | | 2,668 | |
| BBX Capital Corp. — Class A* | | | 180 | | | | 2,587 | |
| JMP Group, Inc. | | | 407 | | | | 2,519 | |
| Resource America, Inc. — Class A | | | 313 | | | | 2,513 | |
| Middleburg Financial Corp. | | | 130 | | | | 2,506 | |
| Consumer Portfolio Services, Inc.* | | | 420 | | | | 2,491 | |
| Ellington Residential Mortgage REIT | | | 160 | | | | 2,459 | |
| First NBC Bank Holding Co.* | | | 100 | | | | 2,438 | |
| ZAIS Financial Corp. | | | 140 | | | | 2,429 | |
| ESSA Bancorp, Inc. | | | 233 | | | | 2,428 | |
| Hingham Institution for Savings | | | 32 | | | | 2,237 | |
| Garrison Capital, Inc. | | | 150 | | | | 2,217 | |
| Investors Title Co. | | | 28 | | | | 2,103 | |
| Tristate Capital Holdings, Inc.* | | | 160 | | | | 2,062 | |
| Pzena Investment Management, Inc. — Class A | | | 295 | | | | 2,000 | |
| First Marblehead Corp.* | | | 2,437 | | | | 1,998 | |
| Waterstone Financial, Inc.* | | | 193 | | | | 1,959 | |
| VantageSouth Bancshares, Inc.* | | | 310 | | | | 1,646 | |
| Palmetto Bancshares, Inc.* | | | 110 | | | | 1,434 | |
| ConnectOne Bancorp, Inc.* | | | 40 | | | | 1,404 | |
| Fortegra Financial Corp.* | | | 162 | | | | 1,379 | |
| CIFC Corp. | | | 174 | | | | 1,373 | |
| Health Insurance Innovations, Inc. — Class A* | | | 110 | | | | 1,315 | |
| Hampton Roads Bankshares, Inc.* | | | 870 | | | | 1,235 | |
| Cascade Bancorp* | | | 158 | | | | 921 | |
| California First National Bancorp | | | 49 | | | | 836 | |
| First Federal Bancshares of Arkansas, Inc.* | | | 73 | | | | 683 | |
| Total Financials | | | | | | | 8,792,117 | |
| INFORMATION TECHNOLOGY - 9.0% | | | | | | | | |
| CoStar Group, Inc.* | | | 733 | | | | 123,071 | |
| Ultimate Software Group, Inc.* | | | 719 | | | | 105,980 | |
| CommVault Systems, Inc.* | | | 1,203 | | | | 105,659 | |
| WEX, Inc.* | | | 1,004 | | | | 88,100 | |
| PTC, Inc.* | | | 3,091 | | | | 87,876 | |
| Aspen Technology, Inc.* | | | 2,420 | | | | 83,610 | |
| FEI Co. | | | 940 | | | | 82,533 | |
| MAXIMUS, Inc. | | | 1,771 | | | | 79,766 | |
| Qlik Technologies, Inc.* | | | 2,250 | | | | 77,039 | |
| Belden, Inc. | | | 1,143 | | | | 73,209 | |
| Tyler Technologies, Inc.* | | | 817 | | | | 71,463 | |
| Cognex Corp. | | | 2,254 | | | | 70,686 | |
| Ciena Corp.* | | | 2,626 | | | | 65,596 | |
| ViaSat, Inc.* | | | 1,026 | | | | 65,407 | |
| Anixter International, Inc.* | | | 699 | | | | 61,275 | |
| Sourcefire, Inc.* | | | 804 | | | | 61,040 | |
| j2 Global, Inc.1 | | | 1,182 | | | | 58,533 | |
| Microsemi Corp.* | | | 2,401 | | | | 58,223 | |
| Mentor Graphics Corp. | | | 2,468 | | | | 57,677 | |
| SS&C Technologies Holdings, Inc.* | | | 1,505 | | | | 57,341 | |
| ACI Worldwide, Inc.* | | | 1,027 | | | | 55,520 | |
| Cavium, Inc.* | | | 1,330 | | | | 54,796 | |
| Finisar Corp.* | | | 2,414 | | | | 54,628 | |
| Infoblox, Inc.* | | | 1,299 | | | | 54,324 | |
| Acxiom Corp.* | | | 1,908 | | | | 54,168 | |
| Cornerstone OnDemand, Inc.* | | | 1,039 | | | | 53,446 | |
| Hittite Microwave Corp.* | | | 813 | | | | 53,130 | |
| Semtech Corp.* | | | 1,744 | | | | 52,303 | |
| Fair Isaac Corp. | | | 932 | | | | 51,521 | |
| Plantronics, Inc. | | | 1,117 | | | | 51,438 | |
| Euronet Worldwide, Inc.* | | | 1,290 | | | | 51,342 | |
| ARRIS Group, Inc.* | | | 3,009 | | | | 51,334 | |
| Yelp, Inc. — Class A* | | | 770 | | | | 50,959 | |
| Guidewire Software, Inc.* | | | 1,081 | | | | 50,926 | |
| Convergys Corp. | | | 2,715 | | | | 50,906 | |
| Verint Systems, Inc.* | | | 1,363 | | | | 50,513 | |
| Aruba Networks, Inc.* | | | 2,945 | | | | 49,005 | |
| Dealertrack Technologies, Inc.* | | | 1,124 | | | | 48,152 | |
| Manhattan Associates, Inc.* | | | 502 | | | | 47,916 | |
| SunEdison, Inc.* | | | 6,000 | | | | 47,820 | |
| VistaPrint N.V.*,1 | | | 845 | | | | 47,759 | |
| Blackbaud, Inc. | | | 1,185 | | | | 46,262 | |
| Sapient Corp.* | | | 2,859 | | | | 44,515 | |
| International Rectifier Corp.* | | | 1,797 | | | | 44,512 | |
| Littelfuse, Inc. | | | 565 | | | | 44,195 | |
| Itron, Inc.* | | | 1,024 | | | | 43,858 | |
| Cardtronics, Inc.* | | | 1,161 | | | | 43,073 | |
| SYNNEX Corp.* | | | 682 | | | | 41,909 | |
| Zillow, Inc. — Class A* | | | 490 | | | | 41,341 | |
| CACI International, Inc. — Class A* | | | 597 | | | | 41,259 | |
| OpenTable, Inc.* | | | 588 | | | | 41,148 | |
| ValueClick, Inc.* | | | 1,972 | | | | 41,116 | |
| RF Micro Devices, Inc.* | | | 7,272 | | | | 41,014 | |
| TiVo, Inc.* | | | 3,274 | | | | 40,729 | |
| ADTRAN, Inc. | | | 1,528 | | | | 40,706 | |
| Power Integrations, Inc. | | | 746 | | | | 40,396 | |
| InterDigital, Inc. | | | 1,064 | | | | 39,719 | |
| NIC, Inc. | | | 1,682 | | | | 38,871 | |
| OSI Systems, Inc.* | | | 517 | | | | 38,501 | |
| Coherent, Inc. | | | 625 | | | | 38,406 | |
| Take-Two Interactive Software, Inc.* | | | 2,099 | | | | 38,118 | |
| Electronics for Imaging, Inc.* | | | 1,203 | | | | 38,112 | |
| Veeco Instruments, Inc.* | | | 1,014 | | | | 37,751 | |
| Heartland Payment Systems, Inc. | | | 942 | | | | 37,416 | |
| Sanmina Corp.* | | | 2,136 | | | | 37,359 | |
| Synaptics, Inc.* | | | 841 | | | | 37,239 | |
| Cirrus Logic, Inc.* | | | 1,636 | | | | 37,104 | |
| Intersil Corp. — Class A | | | 3,290 | | | | 36,947 | |
| Progress Software Corp.* | | | 1,423 | | | | 36,827 | |
| Entegris, Inc.* | | | 3,600 | | | | 36,540 | |
| MKS Instruments, Inc. | | | 1,372 | | | | 36,481 | |
| Cypress Semiconductor Corp. | | | 3,804 | | | | 35,529 | |
| Web.com Group, Inc.* | | | 1,086 | | | | 35,121 | |
| PMC - Sierra, Inc.* | | | 5,277 | | | | 34,934 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 97 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| TriQuint Semiconductor, Inc.* | | | 4,220 | | | $ | 34,309 | |
| Infinera Corp.* | | | 2,992 | | | | 33,840 | |
| Trulia, Inc.* | | | 715 | | | | 33,626 | |
| Universal Display Corp.* | | | 1,035 | | | | 33,151 | |
| Plexus Corp.* | | | 882 | | | | 32,810 | |
| Syntel, Inc. | | | 403 | | | | 32,280 | |
| Benchmark Electronics, Inc.* | | | 1,404 | | | | 32,138 | |
| Integrated Device Technology, Inc.* | | | 3,405 | | | | 32,075 | |
| NETGEAR, Inc.* | | | 997 | | | | 30,767 | |
| Unisys Corp.* | | | 1,139 | | | | 28,691 | |
| Synchronoss Technologies, Inc.* | | | 753 | | | | 28,659 | |
| Monolithic Power Systems, Inc. | | | 946 | | | | 28,645 | |
| Monotype Imaging Holdings, Inc. | | | 989 | | | | 28,345 | |
| SunPower Corp. — Class A* | | | 1,067 | | | | 27,913 | |
| RealPage, Inc.*,1 | | | 1,205 | | | | 27,908 | |
| Bottomline Technologies de, Inc.* | | | 976 | | | | 27,211 | |
| Rambus, Inc.* | | | 2,889 | | | | 27,157 | |
| Methode Electronics, Inc. | | | 961 | | | | 26,908 | |
| Advent Software, Inc. | | | 842 | | | | 26,734 | |
| comScore, Inc.* | | | 922 | | | | 26,710 | |
| Rogers Corp.* | | | 444 | | | | 26,409 | |
| Tessera Technologies, Inc. | | | 1,361 | | | | 26,335 | |
| MTS Systems Corp. | | | 409 | | | | 26,319 | |
| Fusion-io, Inc.* | | | 1,964 | | | | 26,298 | |
| GT Advanced Technologies, Inc.* | | | 3,088 | | | | 26,279 | |
| BroadSoft, Inc.* | | | 724 | | | | 26,086 | |
| SPS Commerce, Inc.* | | | 388 | | | | 25,965 | |
| WebMD Health Corp. — Class A* | | | 907 | | | | 25,940 | |
| InvenSense, Inc. — Class A* | | | 1,465 | | | | 25,813 | |
| Interactive Intelligence Group, Inc.* | | | 401 | | | | 25,459 | |
| QLogic Corp.* | | | 2,300 | | | | 25,162 | |
| iGATE Corp.* | | | 905 | | | | 25,123 | |
| ScanSource, Inc.* | | | 724 | | | | 25,050 | |
| MicroStrategy, Inc. — Class A* | | | 238 | | | | 24,695 | |
| Cray, Inc.* | | | 1,024 | | | | 24,647 | |
| Bankrate, Inc.* | | | 1,192 | | | | 24,519 | |
| Blucora, Inc.* | | | 1,060 | | | | 24,359 | |
| Angie’s List, Inc.* | | | 1,080 | | | | 24,300 | |
| ExlService Holdings, Inc.* | | | 847 | | | | 24,123 | |
| NetScout Systems, Inc.* | | | 933 | | | | 23,857 | |
| Cabot Microelectronics Corp.* | | | 598 | | | | 23,035 | |
| Ixia* | | | 1,461 | | | | 22,894 | |
| Diodes, Inc.* | | | 929 | | | | 22,761 | |
| VirnetX Holding Corp.* | | | 1,091 | | | | 22,256 | |
| ATMI, Inc.* | | | 830 | | | | 22,012 | |
| Ellie Mae, Inc.* | | | 685 | | | | 21,927 | |
| Imperva, Inc.* | | | 521 | | | | 21,892 | |
| CSG Systems International, Inc. | | | 872 | | | | 21,844 | |
| Measurement Specialties, Inc.* | | | 401 | | | | 21,750 | |
| Liquidity Services, Inc.*,1 | | | 645 | | | | 21,646 | |
| Ultratech, Inc.* | | | 713 | | | | 21,604 | |
| Applied Micro Circuits Corp.* | | | 1,659 | | | | 21,401 | |
| Insight Enterprises, Inc.* | | | 1,130 | | | | 21,380 | |
| OmniVision Technologies, Inc.* | | | 1,393 | | | | 21,327 | |
| Tellabs, Inc. | | | 9,199 | | | | 20,882 | |
| Harmonic, Inc.* | | | 2,622 | | | | 20,163 | |
| Active Network, Inc.* | | | 1,400 | | | | 20,034 | |
| PROS Holdings, Inc.* | | | 578 | | | | 19,762 | |
| EPAM Systems, Inc.* | | | 565 | | | | 19,493 | |
| LogMeIn, Inc.* | | | 627 | | | | 19,468 | |
| Demandware, Inc.* | | | 420 | | | | 19,459 | |
| Tangoe, Inc.* | | | 801 | | | | 19,112 | |
| ServiceSource International, Inc.* | | | 1,581 | | | | 19,098 | |
| United Online, Inc. | | | 2,388 | | | | 19,056 | |
| Ruckus Wireless, Inc.* | | | 1,130 | | | | 19,018 | |
| Constant Contact, Inc.* | | | 797 | | | | 18,881 | |
| Sonus Networks, Inc.* | | | 5,576 | | | | 18,847 | |
| FARO Technologies, Inc.* | | | 445 | | | | 18,766 | |
| Emulex Corp.* | | | 2,354 | | | | 18,267 | |
| Sykes Enterprises, Inc.* | | | 1,014 | | | | 18,161 | |
| Proofpoint, Inc.* | | | 564 | | | | 18,116 | |
| Comverse, Inc.* | | | 565 | | | | 18,052 | |
| Envestnet, Inc.* | | | 579 | | | | 17,949 | |
| Pegasystems, Inc. | | | 450 | | | | 17,915 | |
| ManTech International Corp. — Class A | | | 620 | | | | 17,831 | |
| Advanced Energy Industries, Inc.* | | | 1,016 | | | | 17,800 | |
| Checkpoint Systems, Inc.* | | | 1,061 | | | | 17,719 | |
| Rofin-Sinar Technologies, Inc.* | | | 730 | | | | 17,673 | |
| Move, Inc.* | | | 1,032 | | | | 17,492 | |
| EVERTEC, Inc. | | | 760 | | | | 16,880 | |
| Badger Meter, Inc. | | | 363 | | | | 16,880 | |
| Digital River, Inc.* | | | 911 | | | | 16,280 | |
| Brooks Automation, Inc. | | | 1,724 | | | | 16,050 | |
| CalAmp Corp.* | | | 910 | | | | 16,043 | |
| Perficient, Inc.* | | | 862 | | | | 15,826 | |
| Newport Corp.* | | | 1,009 | | | | 15,771 | |
| Responsys, Inc.* | | | 949 | | | | 15,659 | |
| Park Electrochemical Corp. | | | 543 | | | | 15,557 | |
| FleetMatics Group plc* | | | 414 | | | | 15,546 | |
| Virtusa Corp.* | | | 530 | | | | 15,402 | |
| Stamps.com, Inc.* | | | 330 | | | | 15,157 | |
| Volterra Semiconductor Corp.* | | | 642 | | | | 14,766 | |
| AVG Technologies N.V.* | | | 615 | | | | 14,723 | |
| Silicon Graphics International Corp.* | | | 879 | | | | 14,284 | |
| Accelrys, Inc.* | | | 1,447 | | | | 14,267 | |
| Cass Information Systems, Inc. | | | 267 | | | | 14,250 | |
| PDF Solutions, Inc.* | | | 653 | | | | 13,876 | |
| Shutterstock, Inc.* | | | 190 | | | | 13,817 | |
| CTS Corp. | | | 867 | | | | 13,673 | |
| LivePerson, Inc.* | | | 1,429 | | | | 13,490 | |
| Global Cash Access Holdings, Inc.* | | | 1,712 | | | | 13,371 | |
| TTM Technologies, Inc.* | | | 1,371 | | | | 13,367 | |
| Monster Worldwide, Inc.* | | | 3,015 | | | | 13,326 | |
| Lattice Semiconductor Corp.* | | | 2,986 | | | | 13,318 | |
| Exar Corp.* | | | 988 | | | | 13,249 | |
| EarthLink, Inc. | | | 2,668 | | | | 13,207 | |
| Calix, Inc.* | | | 1,031 | | | | 13,125 | |
| SciQuest, Inc.* | | | 584 | | | | 13,117 | |
| TeleTech Holdings, Inc.* | | | 513 | | | | 12,871 | |
| Black Box Corp. | | | 418 | | | | 12,808 | |
| Jive Software, Inc.* | | | 1,020 | | | | 12,750 | |
| Extreme Networks, Inc.* | | | 2,405 | | | | 12,554 | |
| Spansion, Inc. — Class A* | | | 1,223 | | | | 12,340 | |
| Photronics, Inc.* | | | 1,572 | | | | 12,309 | |
| 98 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Fabrinet* | | | 729 | | | $ | 12,276 | |
| Forrester Research, Inc. | | | 321 | | | | 11,800 | |
| Bazaarvoice, Inc.* | | | 1,243 | | | | 11,286 | |
| Super Micro Computer, Inc.* | | | 825 | | | | 11,171 | |
| MoneyGram International, Inc.* | | | 569 | | | | 11,141 | |
| Micrel, Inc. | | | 1,207 | | | | 10,996 | |
| Ubiquiti Networks, Inc. | | | 326 | | | | 10,950 | |
| Epiq Systems, Inc. | | | 812 | | | | 10,735 | |
| Silicon Image, Inc.* | | | 1,995 | | | | 10,653 | |
| Daktronics, Inc. | | | 947 | | | | 10,597 | |
| Comtech Telecommunications Corp. | | | 435 | | | | 10,579 | |
| Entropic Communications, Inc.* | | | 2,317 | | | | 10,148 | |
| Ceva, Inc.* | | | 569 | | | | 9,815 | |
| DTS, Inc.* | | | 467 | | | | 9,807 | |
| Seachange International, Inc.* | | | 846 | | | | 9,704 | |
| Rudolph Technologies, Inc.* | | | 844 | | | | 9,622 | |
| Internap Network Services Corp.* | | | 1,382 | | | | 9,605 | |
| Immersion Corp.* | | | 726 | | | | 9,576 | |
| Nanometrics, Inc.* | | | 594 | | | | 9,575 | |
| FormFactor, Inc.* | | | 1,392 | | | | 9,549 | |
| Oplink Communications, Inc.* | | | 495 | | | | 9,316 | |
| Ambarella, Inc.* | | | 475 | | | | 9,272 | |
| ShoreTel, Inc.* | | | 1,519 | | | | 9,175 | |
| Inphi Corp.* | | | 673 | | | | 9,038 | |
| Actuate Corp.* | | | 1,226 | | | | 9,011 | |
| XO Group, Inc.* | | | 694 | | | | 8,966 | |
| Callidus Software, Inc.* | | | 975 | | | | 8,941 | |
| Dice Holdings, Inc.* | | | 1,050 | | | | 8,936 | |
| Electro Rent Corp. | | | 489 | | | | 8,870 | |
| IntraLinks Holdings, Inc.* | | | 993 | | | | 8,738 | |
| E2open, Inc.* | | | 385 | | | | 8,624 | |
| Globecomm Systems, Inc.* | | | 613 | | | | 8,600 | |
| Mercury Systems, Inc.* | | | 840 | | | | 8,392 | |
| Ebix, Inc. | | | 827 | | | | 8,220 | |
| Procera Networks, Inc.* | | | 526 | | | | 8,148 | |
| Brightcove, Inc.* | | | 723 | | | | 8,134 | |
| Qualys, Inc.* | | | 380 | | | | 8,128 | |
| LTX-Credence Corp.* | | | 1,232 | | | | 8,107 | |
| Integrated Silicon Solution, Inc.* | | | 722 | | | | 7,863 | |
| Zix Corp.* | | | 1,601 | | | | 7,829 | |
| QuinStreet, Inc.* | | | 812 | | | | 7,673 | |
| Parkervision, Inc.* | | | 2,290 | | | | 7,672 | |
| Anaren, Inc.* | | | 298 | | | | 7,599 | |
| Quantum Corp.* | | | 5,495 | | | | 7,583 | |
| GSI Group, Inc.* | | | 777 | | | | 7,413 | |
| RealD, Inc.* | | | 1,046 | | | | 7,322 | |
| Blackhawk Network Holdings, Inc.* | | | 300 | | | | 7,209 | |
| Electro Scientific Industries, Inc. | | | 614 | | | | 7,190 | |
| PLX Technology, Inc.* | | | 1,182 | | | | 7,116 | |
| support.com, Inc.* | | | 1,301 | | | | 7,090 | |
| Cohu, Inc. | | | 642 | | | | 7,004 | |
| Kopin Corp.* | | | 1,716 | | | | 6,915 | |
| Zygo Corp.* | | | 431 | | | | 6,887 | |
| Maxwell Technologies, Inc.* | | | 753 | | | | 6,837 | |
| Digi International, Inc.* | | | 672 | | | | 6,727 | |
| Amkor Technology, Inc.* | | | 1,545 | | | | 6,628 | |
| Supertex, Inc. | | | 259 | | | | 6,563 | |
| Computer Task Group, Inc. | | | 403 | | | | 6,512 | |
| Millennial Media, Inc.* | | | 915 | | | | 6,469 | |
| CIBER, Inc.* | | | 1,926 | | | | 6,356 | |
| NVE Corp.* | | | 123 | | | | 6,278 | |
| Higher One Holdings, Inc.* | | | 812 | | | | 6,228 | |
| Peregrine Semiconductor Corp.* | | | 684 | | | | 6,135 | |
| IXYS Corp. | | | 621 | | | | 5,993 | |
| Alliance Fiber Optic Products, Inc. | | | 290 | | | | 5,936 | |
| Axcelis Technologies, Inc.* | | | 2,797 | | | | 5,902 | |
| VASCO Data Security International, Inc.* | | | 744 | | | | 5,870 | |
| Demand Media, Inc.* | | | 925 | | | | 5,846 | |
| Xoom Corp.* | | | 180 | | | | 5,726 | |
| Marketo, Inc.* | | | 176 | | | | 5,611 | |
| KVH Industries, Inc.* | | | 405 | | | | 5,589 | |
| Lionbridge Technologies, Inc.* | | | 1,502 | | | | 5,542 | |
| Rubicon Technology, Inc.* | | | 455 | | | | 5,510 | |
| ChannelAdvisor Corp.* | | | 150 | | | | 5,495 | |
| Rally Software Development Corp.* | | | 180 | | | | 5,393 | |
| Travelzoo, Inc.* | | | 202 | | | | 5,361 | |
| American Software, Inc. — Class A | | | 623 | | | | 5,320 | |
| Global Eagle Entertainment, Inc.* | | | 550 | | | | 5,137 | |
| eGain Corp.* | | | 340 | | | | 5,131 | |
| Symmetricom, Inc.* | | | 1,060 | | | | 5,109 | |
| Vringo, Inc.* | | | 1,730 | | | | 4,982 | |
| RealNetworks, Inc.* | | | 578 | | | | 4,948 | |
| MaxLinear, Inc. — Class A* | | | 594 | | | | 4,924 | |
| KEMET Corp.* | | | 1,162 | | | | 4,857 | |
| Rosetta Stone, Inc.* | | | 297 | | | | 4,820 | |
| Avid Technology, Inc.* | | | 802 | | | | 4,812 | |
| Hackett Group, Inc. | | | 672 | | | | 4,791 | |
| Tessco Technologies, Inc. | | | 142 | | | | 4,785 | |
| Datalink Corp.* | | | 350 | | | | 4,732 | |
| M/A-COM Technology Solutions Holdings, Inc.* | | | 274 | | | | 4,663 | |
| Carbonite, Inc.* | | | 310 | | | | 4,650 | |
| Vishay Precision Group, Inc.* | | | 319 | | | | 4,641 | |
| PRGX Global, Inc.* | | | 741 | | | | 4,639 | |
| Uni-Pixel, Inc.* | | | 260 | | | | 4,610 | |
| Pericom Semiconductor Corp.* | | | 590 | | | | 4,602 | |
| Mesa Laboratories, Inc. | | | 68 | | | | 4,597 | |
| Vocus, Inc.* | | | 490 | | | | 4,562 | |
| MoSys, Inc.* | | | 1,217 | | | | 4,527 | |
| Bel Fuse, Inc. — Class B | | | 259 | | | | 4,517 | |
| Sigma Designs, Inc.* | | | 794 | | | | 4,438 | |
| ePlus, Inc. | | | 85 | | | | 4,393 | |
| Agilysys, Inc.* | | | 359 | | | | 4,279 | |
| Marchex, Inc. — Class B | | | 587 | | | | 4,273 | |
| Ultra Clean Holdings, Inc.* | | | 613 | | | | 4,236 | |
| PC-Telephone, Inc. | | | 475 | | | | 4,204 | |
| ANADIGICS, Inc.* | | | 2,129 | | | | 4,194 | |
| Neonode, Inc.* | | | 650 | | | | 4,173 | |
| Aviat Networks, Inc.* | | | 1,588 | | | | 4,097 | |
| Glu Mobile, Inc.*,1 | | | 1,461 | | | | 4,076 | |
| Numerex Corp. — Class A* | | | 360 | | | | 3,942 | |
| Unwired Planet, Inc.* | | | 2,251 | | | | 3,894 | |
| NeoPhotonics Corp.* | | | 526 | | | | 3,887 | |
| Westell Technologies, Inc. — Class A* | | | 1,153 | | | | 3,863 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 99 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Guidance Software, Inc.* | | | 423 | | | $ | 3,837 | |
| Spark Networks, Inc.* | | | 458 | | | | 3,811 | |
| Alpha & Omega Semiconductor Ltd.* | | | 451 | | | | 3,793 | |
| Multi-Fineline Electronix, Inc.* | | | 231 | | | | 3,747 | |
| GSI Technology, Inc.* | | | 530 | | | | 3,726 | |
| Aeroflex Holding Corp.* | | | 522 | | | | 3,675 | |
| DSP Group, Inc.* | | | 510 | | | | 3,596 | |
| PC Connection, Inc. | | | 238 | | | | 3,591 | |
| Imation Corp.* | | | 874 | | | | 3,583 | |
| Richardson Electronics Ltd. | | | 311 | | | | 3,536 | |
| Speed Commerce, Inc.* | | | 1,040 | | | | 3,411 | |
| Mindspeed Technologies, Inc.* | | | 1,121 | | | | 3,408 | |
| Reis, Inc.* | | | 210 | | | | 3,396 | |
| Digimarc Corp. | | | 158 | | | | 3,192 | |
| Mitek Systems, Inc.* | | | 610 | | | | 3,160 | |
| TeleCommunication Systems, Inc. — Class A* | | | 1,230 | | | | 3,026 | |
| Marin Software, Inc.* | | | 240 | | | | 3,012 | |
| Audience, Inc.* | | | 252 | | | | 2,832 | |
| Planet Payment, Inc.* | | | 1,094 | | | | 2,779 | |
| Limelight Networks, Inc.* | | | 1,430 | | | | 2,760 | |
| Telenav, Inc.* | | | 457 | | | | 2,669 | |
| Sapiens International Corporation N.V. | | | 440 | | | | 2,662 | |
| ModusLink Global Solutions, Inc.* | | | 955 | | | | 2,617 | |
| Silver Spring Networks, Inc.* | | | 150 | | | | 2,600 | |
| Intermolecular, Inc.* | | | 447 | | | | 2,463 | |
| Cyan, Inc.* | | | 210 | | | | 2,111 | |
| Hutchinson Technology, Inc.* | | | 600 | | | | 2,088 | |
| QAD, Inc. — Class A | | | 153 | | | | 2,087 | |
| Model N, Inc.* | | | 203 | | | | 2,010 | |
| Radisys Corp.* | | | 598 | | | | 1,920 | |
| TechTarget, Inc.* | | | 357 | | | | 1,781 | |
| Viasystems Group, Inc.* | | | 92 | | | | 1,329 | |
| Net Element International, Inc.* | | | 55 | | | | 253 | |
| Total Information Technology | | | | | | | 7,184,104 | |
| INDUSTRIALS - 7.3% | | | | | | | | |
| Acuity Brands, Inc. | | | 1,106 | | | | 101,775 | |
| Middleby Corp.* | | | 483 | | | | 100,903 | |
| Chart Industries, Inc.* | | | 783 | | | | 96,339 | |
| US Airways Group, Inc.* | | | 4,964 | | | | 94,117 | |
| HEICO Corp. | | | 1,376 | | | | 93,209 | |
| Teledyne Technologies, Inc.* | | | 964 | | | | 81,872 | |
| EnerSys, Inc. | | | 1,245 | | | | 75,484 | |
| Actuant Corp. — Class A | | | 1,889 | | | | 73,369 | |
| Woodward, Inc. | | | 1,775 | | | | 72,473 | |
| CLARCOR, Inc. | | | 1,286 | | | | 71,412 | |
| Moog, Inc. — Class A* | | | 1,171 | | | | 68,703 | |
| EMCOR Group, Inc. | | | 1,733 | | | | 67,813 | |
| Esterline Technologies Corp.* | | | 804 | | | | 64,232 | |
| Corporate Executive Board Co. | | | 869 | | | | 63,108 | |
| Watsco, Inc. | | | 659 | | | | 62,124 | |
| DigitalGlobe, Inc.* | | | 1,922 | | | | 60,774 | |
| Curtiss-Wright Corp. | | �� | 1,213 | | | | 56,962 | |
| USG Corp.* | | | 1,985 | | | | 56,731 | |
| Generac Holdings, Inc. | | | 1,328 | | | | 56,626 | |
| Applied Industrial Technologies, Inc. | | | 1,085 | | | | 55,878 | |
| Deluxe Corp. | | | 1,319 | | | | 54,949 | |
| Advisory Board Co.* | | | 915 | | | | 54,425 | |
| Spirit Airlines, Inc.* | | | 1,559 | | | | 53,427 | |
| Polypore International, Inc.* | | | 1,205 | | | | 49,369 | |
| Barnes Group, Inc. | | | 1,391 | | | | 48,574 | |
| Franklin Electric Company, Inc. | | | 1,228 | | | | 48,383 | |
| MasTec, Inc.* | | | 1,540 | | | | 46,663 | |
| Beacon Roofing Supply, Inc.* | | | 1,258 | | | | 46,382 | |
| United Stationers, Inc. | | | 1,051 | | | | 45,718 | |
| Healthcare Services Group, Inc. | | | 1,770 | | | | 45,596 | |
| Herman Miller, Inc. | | | 1,514 | | | | 44,178 | |
| Swift Transportation Co. — Class A* | | | 2,164 | | | | 43,690 | |
| Tetra Tech, Inc.* | | | 1,676 | | | | 43,392 | |
| HNI Corp. | | | 1,171 | | | | 42,367 | |
| Watts Water Technologies, Inc. — Class A | | | 737 | | | | 41,545 | |
| General Cable Corp. | | | 1,290 | | | | 40,958 | |
| TAL International Group, Inc. | | | 876 | | | | 40,935 | |
| Allegiant Travel Co. — Class A | | | 385 | | | | 40,564 | |
| Mueller Industries, Inc. | | | 726 | | | | 40,416 | |
| JetBlue Airways Corp.* | | | 6,017 | | | | 40,073 | |
| UniFirst Corp. | | | 380 | | | | 39,680 | |
| FTI Consulting, Inc.* | | | 1,039 | | | | 39,274 | |
| RBC Bearings, Inc.* | | | 592 | | | | 39,007 | |
| On Assignment, Inc.* | | | 1,182 | | | | 39,005 | |
| Trimas Corp.* | | | 1,027 | | | | 38,307 | |
| ABM Industries, Inc. | | | 1,416 | | | | 37,694 | |
| Mine Safety Appliances Co. | | | 727 | | | | 37,520 | |
| Hub Group, Inc. — Class A* | | | 956 | | | | 37,504 | |
| Brady Corp. — Class A | | | 1,197 | | | | 36,509 | |
| Steelcase, Inc. — Class A | | | 2,176 | | | | 36,165 | |
| UTI Worldwide, Inc. | | | 2,350 | | | | 35,509 | |
| Brink’s Co. | | | 1,243 | | | | 35,177 | |
| Simpson Manufacturing Company, Inc. | | | 1,052 | | | | 34,264 | |
| Proto Labs, Inc.* | | | 443 | | | | 33,841 | |
| Mobile Mini, Inc.* | | | 991 | | | | 33,754 | |
| Orbital Sciences Corp.* | | | 1,555 | | | | 32,935 | |
| Mueller Water Products, Inc. — Class A | | | 4,087 | | | | 32,655 | |
| WageWorks, Inc.* | | | 647 | | | | 32,640 | |
| EnPro Industries, Inc.* | | | 530 | | | | 31,911 | |
| Huron Consulting Group, Inc.* | | | 600 | | | | 31,566 | |
| Forward Air Corp. | | | 774 | | | | 31,231 | |
| Granite Construction, Inc. | | | 1,007 | | | | 30,815 | |
| Atlas Air Worldwide Holdings, Inc.* | | | 668 | | | | 30,801 | |
| Aircastle Ltd. | | | 1,768 | | | | 30,781 | |
| Raven Industries, Inc. | | | 938 | | | | 30,682 | |
| G&K Services, Inc. — Class A | | | 503 | | | | 30,376 | |
| Interface, Inc. — Class A | | | 1,531 | | | | 30,375 | |
| Kaydon Corp. | | | 832 | | | | 29,553 | |
| Tennant Co. | | | 475 | | | | 29,450 | |
| Acacia Research Corp. | | | 1,273 | | | | 29,355 | |
| Matson, Inc. | | | 1,100 | | | | 28,853 | |
| AAR Corp. | | | 1,024 | | | | 27,986 | |
| CIRCOR International, Inc. | | | 449 | | | | 27,919 | |
| Werner Enterprises, Inc. | | | 1,183 | | | | 27,599 | |
| AZZ, Inc. | | | 656 | | | | 27,461 | |
| Cubic Corp. | | | 509 | | | | 27,323 | |
| Korn/Ferry International* | | | 1,258 | | | | 26,921 | |
| Kaman Corp. | | | 698 | | | | 26,426 | |
| 100 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Lindsay Corp. | | | 321 | | | $ | 26,201 | |
| Albany International Corp. — Class A | | | 724 | | | | 25,970 | |
| GrafTech International Ltd.* | | | 3,024 | | | | 25,553 | |
| TrueBlue, Inc.* | | | 1,052 | | | | 25,259 | |
| Briggs & Stratton Corp. | | | 1,247 | | | | 25,090 | |
| GenCorp, Inc.* | | | 1,563 | | | | 25,055 | |
| Knight Transportation, Inc. | | | 1,516 | | | | 25,044 | |
| II-VI, Inc.* | | | 1,320 | | | | 24,842 | |
| Hyster-Yale Materials Handling, Inc. | | | 276 | | | | 24,749 | |
| Exponent, Inc. | | | 336 | | | | 24,138 | |
| Aegion Corp. — Class A* | | | 1,011 | | | | 23,991 | |
| Dycom Industries, Inc.* | | | 851 | | | | 23,819 | |
| Rush Enterprises, Inc. — Class A* | | | 893 | | | | 23,673 | |
| McGrath RentCorp | | | 652 | | | | 23,276 | |
| Primoris Services Corp. | | | 908 | | | | 23,127 | |
| ESCO Technologies, Inc. | | | 688 | | | | 22,862 | |
| Wesco Aircraft Holdings, Inc.* | | | 1,063 | | | | 22,249 | |
| Apogee Enterprises, Inc. | | | 746 | | | | 22,141 | |
| Trex Company, Inc.* | | | 447 | | | | 22,140 | |
| Insperity, Inc. | | | 579 | | | | 21,770 | |
| Universal Forest Products, Inc. | | | 513 | | | | 21,597 | |
| Encore Wire Corp. | | | 539 | | | | 21,258 | |
| Knoll, Inc. | | | 1,247 | | | | 21,124 | |
| Team, Inc.* | | | 527 | | | | 20,948 | |
| Textainer Group Holdings Ltd. | | | 553 | | | | 20,942 | |
| Federal Signal Corp.* | | | 1,612 | | | | 20,746 | |
| Wabash National Corp.* | | | 1,767 | | | | 20,603 | |
| H&E Equipment Services, Inc.* | | | 770 | | | | 20,451 | |
| Tutor Perini Corp.* | | | 957 | | | | 20,403 | |
| Titan International, Inc. | | | 1,387 | | | | 20,306 | |
| Navigant Consulting, Inc.* | | | 1,305 | | | | 20,175 | |
| Sun Hydraulics Corp. | | | 550 | | | | 19,938 | |
| Meritor, Inc.* | | | 2,518 | | | | 19,791 | |
| Taser International, Inc.* | | | 1,325 | | | | 19,756 | |
| DXP Enterprises, Inc.* | | | 248 | | | | 19,585 | |
| Saia, Inc.* | | | 626 | | | | 19,519 | |
| SkyWest, Inc. | | | 1,344 | | | | 19,515 | |
| ACCO Brands Corp.* | | | 2,935 | | | | 19,488 | |
| Quad/Graphics, Inc. | | | 641 | | | | 19,460 | |
| Standex International Corp. | | | 325 | | | | 19,305 | |
| AAON, Inc. | | | 721 | | | | 19,150 | |
| Astec Industries, Inc. | | | 522 | | | | 18,771 | |
| Altra Holdings, Inc. | | | 697 | | | | 18,756 | |
| John Bean Technologies Corp. | | | 746 | | | | 18,560 | |
| Quanex Building Products Corp. | | | 956 | | | | 18,001 | |
| ICF International, Inc.* | | | 507 | | | | 17,953 | |
| Arkansas Best Corp. | | | 668 | | | | 17,148 | |
| Heartland Express, Inc. | | | 1,182 | | | | 16,773 | |
| Rexnord Corp.* | | | 784 | | | | 16,307 | |
| Comfort Systems USA, Inc. | | | 964 | | | | 16,205 | |
| Thermon Group Holdings, Inc.* | | | 698 | | | | 16,131 | |
| Astronics Corp.* | | | 320 | | | | 15,907 | |
| Nortek, Inc.* | | | 229 | | | | 15,735 | |
| Gorman-Rupp Co. | | | 391 | | | | 15,687 | |
| Greenbrier Companies, Inc.* | | | 627 | | | | 15,506 | |
| Blount International, Inc.* | | | 1,276 | | | | 15,452 | |
| Republic Airways Holdings, Inc.* | | | 1,266 | | | | 15,065 | |
| Griffon Corp. | | | 1,187 | | | | 14,885 | |
| RPX Corp.* | | | 838 | | | | 14,690 | |
| Resources Connection, Inc. | | | 1,055 | | | | 14,316 | |
| US Ecology, Inc. | | | 472 | | | | 14,221 | |
| Powell Industries, Inc.* | | | 231 | | | | 14,158 | |
| Engility Holdings, Inc.* | | | 440 | | | | 13,961 | |
| Kelly Services, Inc. — Class A | | | 697 | | | | 13,571 | |
| Viad Corp. | | | 527 | | | | 13,149 | |
| MYR Group, Inc.* | | | 538 | | | | 13,073 | |
| Roadrunner Transportation Systems, Inc.* | | | 453 | | | | 12,793 | |
| Barrett Business Services, Inc. | | | 186 | | | | 12,520 | |
| American Science & Engineering, Inc. | | | 206 | | | | 12,424 | |
| Kforce, Inc. | | | 698 | | | | 12,348 | |
| Ennis, Inc. | | | 679 | | | | 12,249 | |
| West Corp. | | | 550 | | | | 12,194 | |
| Columbus McKinnon Corp.* | | | 504 | | | | 12,111 | |
| LB Foster Co. — Class A | | | 253 | | | | 11,572 | |
| Great Lakes Dredge & Dock Corp. | | | 1,534 | | | | 11,382 | |
| Gibraltar Industries, Inc.* | | | 794 | | | | 11,322 | |
| InnerWorkings, Inc.* | | | 1,145 | | | | 11,244 | |
| KEYW Holding Corp.* | | | 824 | | | | 11,083 | |
| Aceto Corp. | | | 708 | | | | 11,059 | |
| Aerovironment, Inc.* | | | 474 | | | | 10,949 | |
| Standard Parking Corp.* | | | 399 | | | | 10,729 | |
| Multi-Color Corp. | | | 315 | | | | 10,688 | |
| CAI International, Inc.* | | | 448 | | | | 10,425 | |
| Marten Transport Ltd. | | | 602 | | | | 10,324 | |
| Layne Christensen Co.* | | | 515 | | | | 10,279 | |
| Consolidated Graphics, Inc.* | | | 183 | | | | 10,259 | |
| EnerNOC, Inc.* | | | 681 | | | | 10,208 | |
| Air Transport Services Group, Inc.* | | | 1,340 | | | | 10,037 | |
| Hawaiian Holdings, Inc.* | | | 1,345 | | | | 10,007 | |
| GP Strategies Corp.* | | | 376 | | | | 9,859 | |
| Kadant, Inc. | | | 293 | | | | 9,842 | |
| Celadon Group, Inc. | | | 518 | | | | 9,671 | |
| American Railcar Industries, Inc. | | | 246 | | | | 9,651 | |
| Furmanite Corp.* | | | 968 | | | | 9,583 | |
| Echo Global Logistics, Inc.* | | | 457 | | | | 9,570 | |
| Kratos Defense & Security Solutions, Inc.* | | | 1,132 | | | | 9,373 | |
| Graham Corp. | | | 258 | | | | 9,322 | |
| Kimball International, Inc. — Class B | | | 839 | | | | 9,305 | |
| Capstone Turbine Corp.* | | | 7,877 | | | | 9,295 | |
| Michael Baker Corp. | | | 226 | | | | 9,146 | |
| Heidrick & Struggles International, Inc. | | | 466 | | | | 8,882 | |
| Global Power Equipment Group, Inc. | | | 440 | | | | 8,848 | |
| American Woodmark Corp.* | | | 252 | | | | 8,732 | |
| Park-Ohio Holdings Corp.* | | | 227 | | | | 8,721 | |
| Alamo Group, Inc. | | | 178 | | | | 8,706 | |
| PGT, Inc.* | | | 860 | | | | 8,523 | |
| Douglas Dynamics, Inc. | | | 574 | | | | 8,455 | |
| National Presto Industries, Inc. | | | 119 | | | | 8,379 | |
| Energy Recovery, Inc.* | | | 1,145 | | | | 8,301 | |
| Dynamic Materials Corp. | | | 352 | | | | 8,159 | |
| Pendrell Corp.* | | | 4,188 | | | | 8,125 | |
| Northwest Pipe Co.* | | | 240 | | | | 7,891 | |
| Argan, Inc. | | | 357 | | | | 7,843 | |
| Ducommun, Inc.* | | | 270 | | | | 7,744 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 101 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Pike Electric Corp. | | | 675 | | | $ | 7,641 | |
| Insteel Industries, Inc. | | | 469 | | | | 7,551 | |
| Lydall, Inc.* | | | 437 | | | | 7,503 | |
| CBIZ, Inc.* | | | 984 | | | | 7,321 | |
| Orion Marine Group, Inc.* | | | 703 | | | | 7,318 | |
| PowerSecure International, Inc.* | | | 444 | | | | 7,126 | |
| Titan Machinery, Inc.* | | | 443 | | | | 7,119 | |
| Mistras Group, Inc.* | | | 410 | | | | 6,970 | |
| NN, Inc. | | | 446 | | | | 6,940 | |
| ExOne Co.* | | | 160 | | | | 6,816 | |
| NCI Building Systems, Inc.* | | | 534 | | | | 6,803 | |
| Builders FirstSource, Inc.* | | | 1,157 | | | | 6,803 | |
| Sparton Corp.* | | | 264 | | | | 6,732 | |
| CECO Environmental Corp. | | | 458 | | | | 6,449 | |
| FreightCar America, Inc. | | | 310 | | | | 6,411 | |
| TMS International Corp. — Class A | | | 367 | | | | 6,400 | |
| Performant Financial Corp.* | | | 574 | | | | 6,268 | |
| Houston Wire & Cable Co. | | | 463 | | | | 6,237 | |
| Odyssey Marine Exploration, Inc.* | | | 2,044 | | | | 6,152 | |
| XPO Logistics, Inc.* | | | 276 | | | | 5,981 | |
| Casella Waste Systems, Inc. — Class A* | | | 996 | | | | 5,727 | |
| Pacer International, Inc.* | | | 913 | | | | 5,651 | |
| Patriot Transportation Holding, Inc.* | | | 166 | | | | 5,616 | |
| Ply Gem Holdings, Inc.* | | | 400 | | | | 5,592 | |
| CDI Corp. | | | 360 | | | | 5,512 | |
| Twin Disc, Inc. | | | 210 | | | | 5,487 | |
| Accuride Corp.* | | | 1,038 | | | | 5,335 | |
| FuelCell Energy, Inc.*,1 | | | 4,105 | | | | 5,295 | |
| Schawk, Inc. — Class A | | | 348 | | | | 5,164 | |
| Patrick Industries, Inc.* | | | 170 | | | | 5,109 | |
| Ameresco, Inc. — Class A* | | | 504 | | | | 5,050 | |
| VSE Corp. | | | 107 | | | | 5,024 | |
| Quality Distribution, Inc.* | | | 542 | | | | 5,008 | |
| Flow International Corp.* | | | 1,250 | | | | 4,988 | |
| Commercial Vehicle Group, Inc.* | | | 616 | | | | 4,903 | |
| CRA International, Inc.* | | | 262 | | | | 4,878 | |
| Miller Industries, Inc. | | | 284 | | | | 4,822 | |
| LSI Industries, Inc. | | | 560 | | | | 4,726 | |
| Hardinge, Inc. | | | 303 | | | | 4,681 | |
| Courier Corp. | | | 291 | | | | 4,604 | |
| Costa, Inc.* | | | 242 | | | | 4,603 | |
| Coleman Cable, Inc. | | | 217 | | | | 4,581 | |
| ARC Document Solutions, Inc.* | | | 974 | | | | 4,471 | |
| Hurco Companies, Inc. | | | 166 | | | | 4,293 | |
| Tecumseh Products Co. — Class A* | | | 475 | | | | 4,251 | |
| Preformed Line Products Co. | | | 59 | | | | 4,244 | |
| Franklin Covey Co.* | | | 236 | | | | 4,236 | |
| Heritage-Crystal Clean, Inc.* | | | 229 | | | | 4,127 | |
| National Technical Systems, Inc.* | | | 180 | | | | 4,113 | |
| Cenveo, Inc.* | | | 1,390 | | | | 4,101 | |
| PMFG, Inc.* | | | 544 | | | | 4,026 | |
| International Shipholding Corp. | | | 145 | | | | 3,979 | |
| Sterling Construction Company, Inc.* | | | 430 | | | | 3,978 | |
| Ampco-Pittsburgh Corp. | | | 214 | | | | 3,835 | |
| Vicor Corp.* | | | 457 | | | | 3,738 | |
| Global Brass & Copper Holdings, Inc.* | | | 210 | | | | 3,683 | |
| LMI Aerospace, Inc.* | | | 267 | | | | 3,567 | |
| YRC Worldwide, Inc.* | | | 210 | | | | 3,545 | |
| Manitex International, Inc.* | | | 314 | | | | 3,432 | |
| Enphase Energy, Inc.* | | | 414 | | | | 3,370 | |
| Edgen Group, Inc. — Class A* | | | 443 | | | | 3,367 | |
| Universal Truckload Services, Inc. | | | 125 | | | | 3,333 | |
| Xerium Technologies, Inc.* | | | 280 | | | | 3,245 | |
| TRC Companies, Inc.* | | | 410 | | | | 3,034 | |
| Power Solutions International, Inc.* | | | 50 | | | | 2,956 | |
| Acorn Energy, Inc. | | | 467 | | | | 2,755 | |
| Innovative Solutions & Support, Inc. | | | 325 | | | | 2,587 | |
| American Superconductor Corp.* | | | 1,062 | | | | 2,485 | |
| API Technologies Corp.* | | | 838 | | | | 2,455 | |
| Intersections, Inc. | | | 240 | | | | 2,105 | |
| Ultrapetrol Bahamas Ltd.* | | | 550 | | | | 2,057 | |
| Revolution Lighting Technologies, Inc.* | | | 765 | | | | 1,958 | |
| NL Industries, Inc. | | | 170 | | | | 1,930 | |
| Swisher Hygiene, Inc.* | | | 2,941 | | | | 1,784 | |
| BlueLinx Holdings, Inc.* | | | 876 | | | | 1,708 | |
| Erickson Air-Crane, Inc.* | | | 100 | | | | 1,566 | |
| Omega Flex, Inc. | | | 67 | | | | 1,266 | |
| Compx International, Inc. | | | 24 | | | | 312 | |
| Total Industrials | | | | | | | 5,764,243 | |
| CONSUMER DISCRETIONARY - 6.9% | | | | | | | | |
| Brunswick Corp. | | | 2,336 | | | | 93,231 | |
| Dana Holding Corp. | | | 3,801 | | | | 86,815 | |
| Sotheby’s | | | 1,761 | | | | 86,517 | |
| Tenneco, Inc.* | | | 1,576 | | | | 79,588 | |
| Fifth & Pacific Companies, Inc.* | | | 3,101 | | | | 77,927 | |
| Lumber Liquidators Holdings, Inc.* | | | 706 | | | | 75,295 | |
| Wolverine World Wide, Inc. | | | 1,293 | | | | 75,292 | |
| Pool Corp. | | | 1,207 | | | | 67,749 | |
| Live Nation Entertainment, Inc.* | | | 3,640 | | | | 67,521 | |
| Vail Resorts, Inc. | | | 921 | | | | 63,898 | |
| Cheesecake Factory, Inc. | | | 1,376 | | | | 60,474 | |
| Sinclair Broadcast Group, Inc. — Class A | | | 1,766 | | | | 59,197 | |
| Life Time Fitness, Inc.* | | | 1,111 | | | | 57,183 | |
| Steven Madden Ltd.* | | | 1,033 | | | | 55,606 | |
| Shutterfly, Inc.* | | | 979 | | | | 54,706 | |
| Buffalo Wild Wings, Inc.* | | | 483 | | | | 53,718 | |
| Rent-A-Center, Inc. — Class A | | | 1,381 | | | | 52,616 | |
| Cracker Barrel Old Country Store, Inc. | | | 508 | | | | 52,445 | |
| Express, Inc.* | | | 2,207 | | | | 52,064 | |
| Cooper Tire & Rubber Co. | | | 1,639 | | | | 50,481 | |
| Iconix Brand Group, Inc.* | | | 1,471 | | | | 48,867 | |
| Ryland Group, Inc. | | | 1,193 | | | | 48,365 | |
| Pier 1 Imports, Inc. | | | 2,449 | | | | 47,803 | |
| Grand Canyon Education, Inc.* | | | 1,176 | | | | 47,369 | |
| HSN, Inc. | | | 875 | | | | 46,917 | |
| Penske Automotive Group, Inc. | | | 1,091 | | | | 46,619 | |
| Jack in the Box, Inc.* | | | 1,146 | | | | 45,840 | |
| Men’s Wearhouse, Inc. | | | 1,300 | | | | 44,265 | |
| ANN, Inc.* | | | 1,222 | | | | 44,261 | |
| Meredith Corp. | | | 922 | | | | 43,905 | |
| Group 1 Automotive, Inc. | | | 560 | | | | 43,501 | |
| Saks, Inc.* | | | 2,698 | | | | 43,006 | |
| Asbury Automotive Group, Inc.* | | | 808 | | | | 42,986 | |
| 102 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Texas Roadhouse, Inc. — Class A | | | 1,617 | | | $ | 42,495 | |
| New York Times Co. — Class A* | | | 3,340 | | | | 41,983 | |
| Lithia Motors, Inc. — Class A | | | 573 | | | | 41,806 | |
| Bob Evans Farms, Inc. | | | 724 | | | | 41,463 | |
| Genesco, Inc.* | | | 617 | | | | 40,463 | |
| Meritage Homes Corp.* | | | 936 | | | | 40,201 | |
| Buckle, Inc. | | | 725 | | | | 39,186 | |
| KB Home | | | 2,156 | | | | 38,851 | |
| Hillenbrand, Inc. | | | 1,418 | | | | 38,811 | |
| Pinnacle Entertainment, Inc.* | | | 1,508 | | | | 37,775 | |
| Hibbett Sports, Inc.* | | | 672 | | | | 37,733 | |
| Monro Muffler Brake, Inc.1 | | | 805 | | | | 37,424 | |
| Five Below, Inc.* | | | 852 | | | | 37,275 | |
| WMS Industries, Inc.* | | | 1,418 | | | | 36,797 | |
| Belo Corp. — Class A | | | 2,684 | | | | 36,771 | |
| Outerwall, Inc.* | | | 731 | | | | 36,543 | |
| Helen of Troy Ltd.* | | | 817 | | | | 36,112 | |
| Select Comfort Corp.* | | | 1,436 | | | | 34,967 | |
| Vitamin Shoppe, Inc.* | | | 788 | | | | 34,475 | |
| Children’s Place Retail Stores, Inc.* | | | 594 | | | | 34,369 | |
| American Axle & Manufacturing Holdings, Inc.* | | | 1,742 | | | | 34,352 | |
| Bloomin’ Brands, Inc.* | | | 1,432 | | | | 33,810 | |
| Nexstar Broadcasting Group, Inc. — Class A | | | 755 | | | | 33,601 | |
| SHFL Entertainment, Inc.* | | | 1,460 | | | | 33,580 | |
| Marriott Vacations Worldwide Corp.* | | | 749 | | | | 32,956 | |
| Krispy Kreme Doughnuts, Inc.* | | | 1,698 | | | | 32,839 | |
| Dorman Products, Inc. | | | 654 | | | | 32,406 | |
| Orient-Express Hotels Ltd. — Class A* | | | 2,478 | | | | 32,164 | |
| Jos. A. Bank Clothiers, Inc.* | | | 724 | | | | 31,827 | |
| Finish Line, Inc. — Class A | | | 1,269 | | | | 31,560 | |
| Jones Group, Inc. | | | 2,074 | | | | 31,131 | |
| Skechers U.S.A., Inc. — Class A* | | | 1,000 | | | | 31,110 | |
| Sturm Ruger & Company, Inc.1 | | | 496 | | | | 31,064 | |
| Crocs, Inc.* | | | 2,281 | | | | 31,044 | |
| Churchill Downs, Inc. | | | 356 | | | | 30,801 | |
| Office Depot, Inc.* | | | 6,368 | | | | 30,757 | |
| La-Z-Boy, Inc. | | | 1,353 | | | | 30,727 | |
| Standard Pacific Corp.* | | | 3,832 | | | | 30,311 | |
| MDC Holdings, Inc. | | | 1,005 | | | | 30,160 | |
| Ascent Capital Group, Inc. — Class A* | | | 364 | | | | 29,346 | |
| DineEquity, Inc. | | | 425 | | | | 29,325 | |
| Restoration Hardware Holdings, Inc.* | | | 459 | | | | 29,078 | |
| Conn’s, Inc.* | | | 580 | | | | 29,023 | |
| Papa John’s International, Inc. | | | 415 | | | | 29,000 | |
| Valassis Communications, Inc. | | | 1,001 | | | | 28,909 | |
| OfficeMax, Inc. | | | 2,250 | | | | 28,778 | |
| National CineMedia, Inc. | | | 1,473 | | | | 27,781 | |
| iRobot Corp.* | | | 732 | | | | 27,574 | |
| Matthews International Corp. — Class A | | | 718 | | | | 27,341 | |
| Drew Industries, Inc. | | | 589 | | | | 26,823 | |
| AFC Enterprises, Inc.* | | | 613 | | | | 26,721 | |
| Brown Shoe Company, Inc. | | | 1,118 | | | | 26,239 | |
| Sonic Corp.* | | | 1,454 | | | | 25,809 | |
| Multimedia Games Holding Company, Inc.* | | | 743 | | | | 25,671 | |
| Red Robin Gourmet Burgers, Inc.* | | | 358 | | | | 25,454 | |
| Tumi Holdings, Inc.* | | | 1,234 | | | | 24,865 | |
| Stewart Enterprises, Inc. — Class A | | | 1,871 | | | | 24,585 | |
| Interval Leisure Group, Inc. | | | 1,022 | | | | 24,150 | |
| Quiksilver, Inc.* | | | 3,433 | | | | 24,134 | |
| Sonic Automotive, Inc. — Class A | | | 1,004 | | | | 23,895 | |
| G-III Apparel Group Ltd.* | | | 431 | | | | 23,528 | |
| International Speedway Corp. — Class A | | | 722 | | | | 23,321 | |
| LifeLock, Inc.* | | | 1,570 | | | | 23,283 | |
| Oxford Industries, Inc. | | | 340 | | | | 23,113 | |
| Loral Space & Communications, Inc. | | | 332 | | | | 22,487 | |
| Steiner Leisure Ltd.* | | | 376 | | | | 21,970 | |
| K12, Inc.* | | | 701 | | | | 21,647 | |
| Francesca’s Holdings Corp.* | | | 1,136 | | | | 21,175 | |
| CEC Entertainment, Inc. | | | 459 | | | | 21,050 | |
| Movado Group, Inc. | | | 459 | | | | 20,081 | |
| Scientific Games Corp. — Class A* | | | 1,236 | | | | 19,986 | |
| Cato Corp. — Class A | | | 711 | | | | 19,894 | |
| Columbia Sportswear Co. | | | 329 | | | | 19,816 | |
| Scholastic Corp. | | | 682 | | | | 19,539 | |
| Arctic Cat, Inc. | | | 338 | | | | 19,283 | |
| Fiesta Restaurant Group, Inc.* | | | 512 | | | | 19,282 | |
| Core-Mark Holding Company, Inc. | | | 289 | | | | 19,202 | |
| Aeropostale, Inc.* | | | 2,033 | | | | 19,110 | |
| Winnebago Industries, Inc.* | | | 729 | | | | 18,925 | |
| Caesars Entertainment Corp.* | | | 954 | | | | 18,803 | |
| ITT Educational Services, Inc.* | | | 600 | | | | 18,600 | |
| BJ’s Restaurants, Inc.* | | | 641 | | | | 18,410 | |
| Smith & Wesson Holding Corp.* | | | 1,662 | | | | 18,265 | |
| MDC Partners, Inc. — Class A | | | 652 | | | | 18,243 | |
| Regis Corp. | | | 1,231 | | | | 18,071 | |
| Modine Manufacturing Co.* | | | 1,223 | | | | 17,892 | |
| Ethan Allen Interiors, Inc. | | | 638 | | | | 17,781 | |
| American Public Education, Inc.* | | | 455 | | | | 17,199 | |
| Pep Boys-Manny Moe & Jack* | | | 1,374 | | | | 17,134 | |
| Tuesday Morning Corp.* | | | 1,111 | | | | 16,965 | |
| Boyd Gaming Corp.* | | | 1,191 | | | | 16,853 | |
| Gentherm, Inc.* | | | 869 | | | | 16,581 | |
| Standard Motor Products, Inc. | | | 515 | | | | 16,562 | |
| Capella Education Co.* | | | 289 | | | | 16,346 | |
| Stage Stores, Inc. | | | 846 | | | | 16,243 | |
| LeapFrog Enterprises, Inc. — Class A* | | | 1,648 | | | | 15,524 | |
| Hovnanian Enterprises, Inc. — Class A* | | | 2,927 | | | | 15,308 | |
| rue21, Inc.* | | | 376 | | | | 15,168 | |
| Chuy’s Holdings, Inc.* | | | 420 | | | | 15,074 | |
| Zumiez, Inc.* | | | 543 | | | | 14,952 | |
| EW Scripps Co. — Class A* | | | 808 | | | | 14,827 | |
| Fred’s, Inc. — Class A | | | 945 | | | | 14,789 | |
| Denny’s Corp.* | | | 2,373 | | | | 14,523 | |
| Maidenform Brands, Inc.* | | | 598 | | | | 14,047 | |
| Tile Shop Holdings, Inc.* | | | 475 | | | | 14,008 | |
| Universal Electronics, Inc.* | | | 385 | | | | 13,872 | |
| Barnes & Noble, Inc.* | | | 1,047 | | | | 13,548 | |
| Callaway Golf Co. | | | 1,843 | | | | 13,122 | |
| Libbey, Inc.* | | | 547 | | | | 13,009 | |
| M/I Homes, Inc.* | | | 625 | | | | 12,888 | |
| Zale Corp.* | | | 840 | | | | 12,768 | |
| Blue Nile, Inc.* | | | 310 | | | | 12,688 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 103 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Haverty Furniture Companies, Inc. | | | 515 | | | $ | 12,633 | |
| Biglari Holdings, Inc.* | | | 29 | | | | 11,967 | |
| Ruby Tuesday, Inc.* | | | 1,580 | | | | 11,850 | |
| Beazer Homes USA, Inc.* | | | 651 | | | | 11,718 | |
| Vera Bradley, Inc.* | | | 564 | | | | 11,596 | |
| Strayer Education, Inc. | | | 277 | | | | 11,501 | |
| Destination Maternity Corp. | | | 350 | | | | 11,130 | |
| Bright Horizons Family Solutions, Inc.* | | | 310 | | | | 11,107 | |
| Mattress Firm Holding Corp.* | | | 346 | | | | 11,003 | |
| Ruth’s Hospitality Group, Inc. | | | 924 | | | | 10,959 | |
| Superior Industries International, Inc. | | | 598 | | | | 10,662 | |
| NutriSystem, Inc. | | | 733 | | | | 10,541 | |
| Central European Media Enterprises Ltd. — Class A* | | | 1,985 | | | | 10,461 | |
| Cumulus Media, Inc. — Class A* | | | 1,943 | | | | 10,298 | |
| Gray Television, Inc.* | | | 1,300 | | | | 10,205 | |
| Shoe Carnival, Inc. | | | 377 | | | | 10,183 | |
| Cavco Industries, Inc.* | | | 175 | | | | 9,966 | |
| Harte-Hanks, Inc. | | | 1,116 | | | | 9,854 | |
| Stein Mart, Inc. | | | 711 | | | | 9,755 | |
| Journal Communications, Inc. — Class A* | | | 1,140 | | | | 9,747 | |
| America’s Car-Mart, Inc.* | | | 212 | | | | 9,563 | |
| Wet Seal, Inc. — Class A* | | | 2,298 | | | | 9,031 | |
| Unifi, Inc.* | | | 384 | | | | 8,971 | |
| Rentrak Corp.* | | | 272 | | | | 8,873 | |
| RadioShack Corp.* | | | 2,580 | | | | 8,798 | |
| Federal-Mogul Corp.* | | | 506 | | | | 8,496 | |
| Bridgepoint Education, Inc.* | | | 470 | | | | 8,479 | |
| Entravision Communications Corp. — Class A | | | 1,430 | | | | 8,437 | |
| PetMed Express, Inc. | | | 514 | | | | 8,373 | |
| Overstock.com, Inc.* | | | 282 | | | | 8,367 | |
| Digital Generation, Inc.* | | | 626 | | | | 8,094 | |
| Town Sports International Holdings, Inc. | | | 619 | | | | 8,035 | |
| Carmike Cinemas, Inc.* | | | 360 | | | | 7,949 | |
| Stoneridge, Inc.* | | | 733 | | | | 7,924 | |
| Carriage Services, Inc. — Class A | | | 407 | | | | 7,896 | |
| Bravo Brio Restaurant Group, Inc.* | | | 506 | | | | 7,641 | |
| World Wrestling Entertainment, Inc. — Class A | | | 741 | | | | 7,536 | |
| MarineMax, Inc.* | | | 602 | | | | 7,344 | |
| Remy International, Inc. | | | 360 | | | | 7,286 | |
| Media General, Inc. — Class A* | | | 510 | | | | 7,273 | |
| William Lyon Homes — Class A* | | | 354 | | | | 7,193 | |
| Black Diamond, Inc.* | | | 583 | | | | 7,089 | |
| Destination XL Group, Inc.* | | | 1,090 | | | | 7,052 | |
| Citi Trends, Inc.* | | | 402 | | | | 7,027 | |
| Sears Hometown and Outlet Stores, Inc.* | | | 220 | | | | 6,985 | |
| Fuel Systems Solutions, Inc.* | | | 355 | | | | 6,979 | |
| Big 5 Sporting Goods Corp. | | | 433 | | | | 6,963 | |
| Marcus Corp. | | | 477 | | | | 6,931 | |
| Christopher & Banks Corp.* | | | 940 | | | | 6,777 | |
| NACCO Industries, Inc. — Class A | | | 120 | | | | 6,650 | |
| Universal Technical Institute, Inc. | | | 546 | | | | 6,623 | |
| VOXX International Corp. — Class A* | | | 482 | | | | 6,603 | |
| Kirkland’s, Inc.* | | | 354 | | | | 6,528 | |
| Orbitz Worldwide, Inc.* | | | 616 | | | | 5,932 | |
| Perry Ellis International, Inc. | | | 314 | | | | 5,916 | |
| hhgregg, Inc.* | | | 328 | | | | 5,874 | |
| Education Management Corp.* | | | 640 | | | | 5,837 | |
| Nautilus, Inc.* | | | 804 | | | | 5,805 | |
| Jamba, Inc.* | | | 427 | | | | 5,713 | |
| TRI Pointe Homes, Inc.* | | | 385 | | | | 5,652 | |
| Del Frisco’s Restaurant Group, Inc.* | | | 278 | | | | 5,607 | |
| bebe stores, Inc. | | | 903 | | | | 5,499 | |
| Speedway Motorsports, Inc. | | | 302 | | | | 5,406 | |
| Entercom Communications Corp. — Class A* | | | 614 | | | | 5,391 | |
| West Marine, Inc.* | | | 440 | | | | 5,368 | |
| Spartan Motors, Inc. | | | 879 | | | | 5,336 | |
| Saga Communications, Inc. — Class A | | | 119 | | | | 5,281 | |
| Morgans Hotel Group Co.* | | | 686 | | | | 5,275 | |
| CSS Industries, Inc. | | | 214 | | | | 5,138 | |
| Vitacost.com, Inc.* | | | 565 | | | | 4,803 | |
| McClatchy Co. — Class A* | | | 1,574 | | | | 4,722 | |
| RG Barry Corp. | | | 249 | | | | 4,709 | |
| Weyco Group, Inc. | | | 164 | | | | 4,644 | |
| Bassett Furniture Industries, Inc. | | | 278 | | | | 4,501 | |
| Mac-Gray Corp. | | | 309 | | | | 4,499 | |
| Corinthian Colleges, Inc.* | | | 2,045 | | | | 4,479 | |
| ValueVision Media, Inc. — Class A* | | | 1,010 | | | | 4,394 | |
| New York & Company, Inc.* | | | 745 | | | | 4,306 | |
| Isle of Capri Casinos, Inc.* | | | 552 | | | | 4,173 | |
| Monarch Casino & Resort, Inc.* | | | 217 | | | | 4,119 | |
| Hooker Furniture Corp. | | | 269 | | | | 4,022 | |
| Lifetime Brands, Inc. | | | 259 | | | | 3,960 | |
| Career Education Corp.* | | | 1,430 | | | | 3,947 | |
| Winmark Corp. | | | 53 | | | | 3,907 | |
| Culp, Inc. | | | 206 | | | | 3,854 | |
| AH Belo Corp. — Class A | | | 480 | | | | 3,768 | |
| Tilly’s, Inc. — Class A* | | | 259 | | | | 3,758 | |
| Carrols Restaurant Group, Inc.* | | | 613 | | | | 3,739 | |
| Luby’s, Inc.* | | | 515 | | | | 3,698 | |
| Bon-Ton Stores, Inc. | | | 345 | | | | 3,640 | |
| Dex Media, Inc.* | | | 443 | | | | 3,602 | |
| Global Sources Ltd.* | | | 485 | | | | 3,599 | |
| Pacific Sunwear of California, Inc.* | | | 1,190 | | | | 3,570 | |
| Zagg, Inc.* | | | 792 | | | | 3,564 | |
| Nathan’s Famous, Inc.* | | | 65 | | | | 3,431 | |
| Blyth, Inc. | | | 245 | | | | 3,388 | |
| Daily Journal Corp.* | | | 23 | | | | 3,381 | |
| 1-800-Flowers.com, Inc. — Class A* | | | 671 | | | | 3,308 | |
| Johnson Outdoors, Inc. — Class A* | | | 120 | | | | 3,218 | |
| ReachLocal, Inc.* | | | 264 | | | | 3,144 | |
| Tower International, Inc.* | | | 154 | | | | 3,078 | |
| Reading International, Inc. — Class A* | | | 454 | | | | 2,983 | |
| Flexsteel Industries, Inc. | | | 119 | | | | 2,971 | |
| EveryWare Global, Inc.* | | | 256 | | | | 2,918 | |
| Skullcandy, Inc.* | | | 462 | | | | 2,855 | |
| Lincoln Educational Services Corp. | | | 617 | | | | 2,844 | |
| Ignite Restaurant Group, Inc.* | | | 182 | | | | 2,825 | |
| Einstein Noah Restaurant Group, Inc. | | | 159 | | | | 2,754 | |
| Crown Media Holdings, Inc. — Class A* | | | 893 | | | | 2,750 | |
| Gordmans Stores, Inc. | | | 234 | | | | 2,633 | |
| 104 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Body Central Corp.* | | | 428 | | | $ | 2,611 | |
| Hemisphere Media Group, Inc.* | | | 220 | | | | 2,585 | |
| Marine Products Corp. | | | 276 | | | | 2,506 | |
| Systemax, Inc. | | | 269 | | | | 2,494 | |
| JTH Holding, Inc. — Class A* | | | 120 | | | | 2,274 | |
| JAKKS Pacific, Inc. | | | 496 | | | | 2,227 | |
| Salem Communications Corp. — Class A | | | 262 | | | | 2,169 | |
| Shiloh Industries, Inc. | | | 157 | | | | 2,057 | |
| American Apparel, Inc.* | | | 1,495 | | | | 1,944 | |
| Diversified Restaurant Holdings, Inc.* | | | 280 | | | | 1,837 | |
| Martha Stewart Living Omnimedia, Inc. — Class A* | | | 754 | | | | 1,734 | |
| Trans World Entertainment Corp. | | | 270 | | | | 1,250 | |
| Beasley Broadcasting Group, Inc. — Class A | | | 106 | | | | 921 | |
| Total Consumer Discretionary | | | | | | | 5,505,982 | |
| HEALTH CARE - 6.4% | | | | | | | | |
| Isis Pharmaceuticals, Inc.* | | | 2,909 | | | | 109,204 | |
| athenahealth, Inc.* | | | 946 | | | | 102,698 | |
| Alnylam Pharmaceuticals, Inc.* | | | 1,500 | | | | 96,015 | |
| Align Technology, Inc.* | | | 1,889 | | | | 90,899 | |
| Centene Corp.* | | | 1,403 | | | | 89,735 | |
| NPS Pharmaceuticals, Inc.* | | | 2,596 | | | | 82,579 | |
| WellCare Health Plans, Inc.* | | | 1,121 | | | | 78,179 | |
| Questcor Pharmaceuticals, Inc. | | | 1,341 | | | | 77,777 | |
| HealthSouth Corp. | | | 2,254 | | | | 77,719 | |
| Celldex Therapeutics, Inc.* | | | 2,089 | | | | 74,013 | |
| West Pharmaceutical Services, Inc. | | | 1,794 | | | | 73,823 | |
| PAREXEL International Corp.* | | | 1,467 | | | | 73,688 | |
| Medidata Solutions, Inc.* | | | 687 | | | | 67,965 | |
| Cepheid, Inc.* | | | 1,737 | | | | 67,812 | |
| Team Health Holdings, Inc.* | | | 1,776 | | | | 67,381 | |
| ViroPharma, Inc.* | | | 1,691 | | | | 66,455 | |
| STERIS Corp. | | | 1,527 | | | | 65,599 | |
| Aegerion Pharmaceuticals, Inc.* | | | 749 | | | | 64,196 | |
| Owens & Minor, Inc. | | | 1,638 | | | | 56,658 | |
| Thoratec Corp.* | | | 1,480 | | | | 55,189 | |
| Haemonetics Corp.* | | | 1,318 | | | | 52,562 | |
| DexCom, Inc.* | | | 1,833 | | | | 51,746 | |
| Insulet Corp.* | | | 1,385 | | | | 50,192 | |
| ACADIA Pharmaceuticals, Inc.* | | | 1,814 | | | | 49,831 | |
| MWI Veterinary Supply, Inc.* | | | 327 | | | | 48,841 | |
| HMS Holdings Corp.* | | | 2,270 | | | | 48,828 | |
| Medicines Co.* | | | 1,303 | | | | 43,676 | |
| Air Methods Corp. | | | 1,002 | | | | 42,685 | |
| Magellan Health Services, Inc.* | | | 698 | | | | 41,852 | |
| MedAssets, Inc.* | | | 1,576 | | | | 40,062 | |
| Sarepta Therapeutics, Inc.* | | | 800 | | | | 37,784 | |
| Neogen Corp.* | | | 621 | | | | 37,707 | |
| ImmunoGen, Inc.*,1 | | | 2,191 | | | | 37,291 | |
| Cyberonics, Inc.* | | | 715 | | | | 36,279 | |
| Impax Laboratories, Inc.* | | | 1,766 | | | | 36,221 | |
| Acadia Healthcare Company, Inc.* | | | 914 | | | | 36,039 | |
| Acorda Therapeutics, Inc.* | | | 1,045 | | | | 35,823 | |
| Chemed Corp. | | | 492 | | | | 35,178 | |
| Pacira Pharmaceuticals, Inc.* | | | 706 | | | | 33,952 | |
| Volcano Corp.* | | | 1,413 | | | | 33,799 | |
| Masimo Corp. | | | 1,261 | | | | 33,593 | |
| InterMune, Inc.* | | | 2,115 | | | | 32,508 | |
| Amsurg Corp. — Class A* | | | 817 | | | | 32,435 | |
| Santarus, Inc.* | | | 1,431 | | | | 32,298 | |
| MAKO Surgical Corp.* | | | 1,091 | | | | 32,195 | |
| Nektar Therapeutics* | | | 2,992 | | | | 31,266 | |
| HeartWare International, Inc.* | | | 422 | | | | 30,895 | |
| Puma Biotechnology, Inc.* | | | 570 | | | | 30,586 | |
| Hanger, Inc.* | | | 894 | | | | 30,181 | |
| Arena Pharmaceuticals, Inc.* | | | 5,632 | | | | 29,681 | |
| Akorn, Inc.* | | | 1,501 | | | | 29,540 | |
| PDL BioPharma, Inc.1 | | | 3,617 | | | | 28,827 | |
| Ironwood Pharmaceuticals, Inc. — Class A* | | | 2,408 | | | | 28,535 | |
| NuVasive, Inc.* | | | 1,146 | | | | 28,066 | |
| Exelixis, Inc.*,1 | | | 4,758 | | | | 27,692 | |
| Synageva BioPharma Corp.* | | | 437 | | | | 27,666 | |
| Wright Medical Group, Inc.* | | | 1,041 | | | | 27,149 | |
| Cantel Medical Corp. | | | 846 | | | | 26,945 | |
| Molina Healthcare, Inc.* | | | 736 | | | | 26,202 | |
| Endologix, Inc.* | | | 1,620 | | | | 26,131 | |
| ArthroCare Corp.* | | | 729 | | | | 25,938 | |
| Analogic Corp. | | | 312 | | | | 25,784 | |
| Halozyme Therapeutics, Inc.* | | | 2,302 | | | | 25,414 | |
| Meridian Bioscience, Inc. | | | 1,074 | | | | 25,400 | |
| Globus Medical, Inc. — Class A* | | | 1,414 | | | | 24,688 | |
| Opko Health, Inc.* | | | 2,788 | | | | 24,562 | |
| CONMED Corp. | | | 721 | | | | 24,507 | |
| Vivus, Inc.* | | | 2,607 | | | | 24,297 | |
| Abaxis, Inc. | | | 563 | | | | 23,702 | |
| Auxilium Pharmaceuticals, Inc.* | | | 1,278 | | | | 23,298 | |
| Quality Systems, Inc. | | | 1,036 | | | | 22,512 | |
| ICU Medical, Inc.* | | | 330 | | | | 22,417 | |
| IPC The Hospitalist Company, Inc.* | | | 431 | | | | 21,985 | |
| MannKind Corp.* | | | 3,852 | | | | 21,956 | |
| Infinity Pharmaceuticals, Inc.* | | | 1,241 | | | | 21,655 | |
| Keryx Biopharmaceuticals, Inc.* | | | 2,114 | | | | 21,351 | |
| Greatbatch, Inc.* | | | 622 | | | | 21,167 | |
| Omnicell, Inc.* | | | 890 | | | | 21,075 | |
| Integra LifeSciences Holdings Corp.* | | | 520 | | | | 20,930 | |
| Exact Sciences Corp.* | | | 1,757 | | | | 20,750 | |
| Astex Pharmaceuticals, Inc.* | | | 2,445 | | | | 20,734 | |
| Ensign Group, Inc. | | | 501 | | | | 20,596 | |
| Quidel Corp.*,1 | | | 725 | | | | 20,590 | |
| ExamWorks Group, Inc.* | | | 787 | | | | 20,454 | |
| NxStage Medical, Inc.* | | | 1,541 | | | | 20,280 | |
| Raptor Pharmaceutical Corp.* | | | 1,338 | | | | 19,990 | |
| Ligand Pharmaceuticals, Inc. — Class B* | | | 460 | | | | 19,909 | |
| HealthStream, Inc.* | | | 518 | | | | 19,622 | |
| Neurocrine Biosciences, Inc.* | | | 1,721 | | | | 19,482 | |
| Dyax Corp.* | | | 2,823 | | | | 19,366 | |
| Emeritus Corp.* | | | 1,045 | | | | 19,364 | |
| Clovis Oncology, Inc.* | | | 318 | | | | 19,328 | |
| Luminex Corp.* | | | 964 | | | | 19,280 | |
| ABIOMED, Inc.* | | | 997 | | | | 19,013 | |
| Kindred Healthcare, Inc. | | | 1,401 | | | | 18,815 | |
| Array BioPharma, Inc.* | | | 3,019 | | | | 18,778 | |
| Bio-Reference Labs, Inc.* | | | 628 | | | | 18,765 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 105 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Vanguard Health Systems, Inc.* | | | 872 | | | $ | 18,321 | |
| Spectranetics Corp.* | | | 1,046 | | | | 17,552 | |
| Momenta Pharmaceuticals, Inc.* | | | 1,219 | | | | 17,541 | |
| Computer Programs & Systems, Inc. | | | 284 | | | | 16,614 | |
| Healthways, Inc.* | | | 888 | | | | 16,437 | |
| AMN Healthcare Services, Inc.* | | | 1,190 | | | | 16,374 | |
| AVANIR Pharmaceuticals, Inc. — Class A* | | | 3,753 | | | | 15,913 | |
| Optimer Pharmaceuticals, Inc.* | | | 1,259 | | | | 15,863 | |
| Capital Senior Living Corp.* | | | 739 | | | | 15,630 | |
| Orexigen Therapeutics, Inc.* | | | 2,452 | | | | 15,055 | |
| Sangamo Biosciences, Inc.* | | | 1,388 | | | | 14,546 | |
| Fluidigm Corp.* | | | 660 | | | | 14,480 | |
| Repros Therapeutics, Inc.* | | | 540 | | | | 14,472 | |
| Invacare Corp. | | | 827 | | | | 14,282 | |
| Accuray, Inc.* | | | 1,916 | | | | 14,159 | |
| Amedisys, Inc.* | | | 813 | | | | 14,000 | |
| Lexicon Pharmaceuticals, Inc.* | | | 5,875 | | | | 13,924 | |
| Accretive Health, Inc.* | | | 1,523 | | | | 13,890 | |
| Idenix Pharmaceuticals, Inc.* | | | 2,580 | | | | 13,442 | |
| Emergent Biosolutions, Inc.* | | | 703 | | | | 13,392 | |
| Merit Medical Systems, Inc.* | | | 1,097 | | | | 13,307 | |
| TESARO, Inc.* | | | 343 | | | | 13,288 | |
| BioScrip, Inc.* | | | 1,512 | | | | 13,275 | |
| Genomic Health, Inc.* | | | 430 | | | | 13,149 | |
| Tornier N.V.* | | | 674 | | | | 13,028 | |
| Staar Surgical Co.* | | | 947 | | | | 12,822 | |
| National Healthcare Corp. | | | 271 | | | | 12,810 | |
| Insmed, Inc.* | | | 820 | | | | 12,800 | |
| Spectrum Pharmaceuticals, Inc. | | | 1,496 | | | | 12,551 | |
| Hi-Tech Pharmacal Company, Inc. | | | 289 | | | | 12,470 | |
| Landauer, Inc. | | | 242 | | | | 12,403 | |
| Cerus Corp.* | | | 1,799 | | | | 12,071 | |
| KYTHERA Biopharmaceuticals, Inc.* | | | 264 | | | | 12,065 | |
| Dendreon Corp.*,1 | | | 4,080 | | | | 11,954 | |
| AMAG Pharmaceuticals, Inc.* | | | 556 | | | | 11,943 | |
| Antares Pharma, Inc.* | | | 2,918 | | | | 11,847 | |
| Immunomedics, Inc.* | | | 1,893 | | | | 11,718 | |
| Rockwell Medical, Inc.* | | | 1,017 | | | | 11,604 | |
| Affymetrix, Inc.* | | | 1,841 | | | | 11,414 | |
| Cynosure, Inc. — Class A* | | | 498 | | | | 11,359 | |
| Geron Corp.* | | | 3,369 | | | | 11,286 | |
| Natus Medical, Inc.* | | | 790 | | | | 11,202 | |
| Triple-S Management Corp. — Class B* | | | 607 | | | | 11,163 | |
| Novavax, Inc.* | | | 3,488 | | | | 11,022 | |
| Depomed, Inc.* | | | 1,465 | | | | 10,958 | |
| Stemline Therapeutics, Inc.* | | | 240 | | | | 10,870 | |
| Corvel Corp.* | | | 294 | | | | 10,869 | |
| Cardiovascular Systems, Inc.* | | | 534 | | | | 10,707 | |
| Orthofix International N.V.* | | | 501 | | | | 10,451 | |
| Endocyte, Inc.* | | | 779 | | | | 10,384 | |
| PharMerica Corp.* | | | 769 | | | | 10,205 | |
| Select Medical Holdings Corp. | | | 1,263 | | | | 10,192 | |
| Vocera Communications, Inc.* | | | 547 | | | | 10,174 | |
| Cambrex Corp.* | | | 769 | | | | 10,151 | |
| Cadence Pharmaceuticals, Inc.* | | | 1,597 | | | | 10,077 | |
| Atrion Corp. | | | 38 | | | | 9,834 | |
| Gentiva Health Services, Inc.* | | | 809 | | | | 9,740 | |
| US Physical Therapy, Inc. | | | 308 | | | | 9,573 | |
| Synergy Pharmaceuticals, Inc.* | | | 2,079 | | | | 9,501 | |
| Intercept Pharmaceuticals, Inc.* | | | 136 | | | | 9,388 | |
| Merrimack Pharmaceuticals, Inc.* | | | 2,454 | | | | 9,325 | |
| Curis, Inc.* | | | 2,086 | | | | 9,304 | |
| Lannett Company, Inc.* | | | 425 | | | | 9,274 | |
| MiMedx Group, Inc.* | | | 2,180 | | | | 9,091 | |
| Repligen Corp.* | | | 808 | | | | 8,961 | |
| SurModics, Inc.* | | | 374 | | | | 8,894 | |
| Sagent Pharmaceuticals, Inc.* | | | 430 | | | | 8,772 | |
| OraSure Technologies, Inc.* | | | 1,433 | | | | 8,612 | |
| AngioDynamics, Inc.* | | | 637 | | | | 8,408 | |
| NewLink Genetics Corp.* | | | 439 | | | | 8,244 | |
| Navidea Biopharmaceuticals, Inc.* | | | 3,096 | | | | 8,204 | |
| Rigel Pharmaceuticals, Inc.* | | | 2,252 | | | | 8,062 | |
| Providence Service Corp.* | | | 278 | | | | 7,976 | |
| Sequenom, Inc.* | | | 2,980 | | | | 7,957 | |
| Unilife Corp.* | | | 2,360 | | | | 7,835 | |
| Symmetry Medical, Inc.* | | | 960 | | | | 7,834 | |
| Albany Molecular Research, Inc.* | | | 600 | | | | 7,734 | |
| Achillion Pharmaceuticals, Inc.* | | | 2,501 | | | | 7,553 | |
| Universal American Corp. | | | 991 | | | | 7,551 | |
| Greenway Medical Technologies* | | | 365 | | | | 7,537 | |
| Omeros Corp.* | | | 773 | | | | 7,537 | |
| GenMark Diagnostics, Inc.* | | | 620 | | | | 7,533 | |
| Anika Therapeutics, Inc.* | | | 312 | | | | 7,476 | |
| Furiex Pharmaceuticals, Inc.* | | | 168 | | | | 7,390 | |
| LHC Group, Inc.* | | | 310 | | | | 7,273 | |
| Progenics Pharmaceuticals, Inc.* | | | 1,442 | | | | 7,253 | |
| Vascular Solutions, Inc.* | | | 426 | | | | 7,157 | |
| Osiris Therapeutics, Inc.* | | | 430 | | | | 7,155 | |
| SciClone Pharmaceuticals, Inc.* | | | 1,397 | | | | 7,083 | |
| Vanda Pharmaceuticals, Inc.* | | | 637 | | | | 6,988 | |
| Anacor Pharmaceuticals, Inc.* | | | 650 | | | | 6,903 | |
| ZIOPHARM Oncology, Inc.* | | | 1,736 | | | | 6,857 | |
| Synta Pharmaceuticals Corp.*,1 | | | 1,052 | | | | 6,638 | |
| XOMA Corp.* | | | 1,476 | | | | 6,612 | |
| Portola Pharmaceuticals, Inc.* | | | 246 | | | | 6,581 | |
| TearLab Corp.* | | | 590 | | | | 6,525 | |
| XenoPort, Inc.* | | | 1,123 | | | | 6,379 | |
| Epizyme, Inc.* | | | 156 | | | | 6,260 | |
| Prothena Corporation plc* | | | 304 | | | | 6,150 | |
| AcelRx Pharmaceuticals, Inc.* | | | 570 | | | | 6,139 | |
| Pacific Biosciences of California, Inc.* | | | 1,096 | | | | 6,061 | |
| AtriCure, Inc.* | | | 541 | | | | 5,940 | |
| TherapeuticsMD, Inc.* | | | 2,020 | | | | 5,919 | |
| Five Star Quality Care, Inc.* | | | 1,111 | | | | 5,744 | |
| PhotoMedex, Inc.* | | | 360 | | | | 5,724 | |
| Dynavax Technologies Corp.* | | | 4,731 | | | | 5,677 | |
| Threshold Pharmaceuticals, Inc.* | | | 1,213 | | | | 5,640 | |
| Rochester Medical Corp.* | | | 274 | | | | 5,469 | |
| RTI Surgical, Inc.* | | | 1,459 | | | | 5,457 | |
| Ampio Pharmaceuticals, Inc.* | | | 717 | | | | 5,378 | |
| Hyperion Therapeutics, Inc.* | | | 205 | | | | 5,357 | |
| Peregrine Pharmaceuticals, Inc.* | | | 3,770 | | | | 5,316 | |
| Verastem, Inc.* | | | 422 | | | | 5,250 | |
| Chelsea Therapeutics International Ltd.* | | | 1,730 | | | | 5,207 | |
| 106 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND |
| | | Shares | | | Value | |
| | | | | | | |
| Chindex International, Inc.* | | | 304 | | | $ | 5,183 | |
| Utah Medical Products, Inc. | | | 87 | | | | 5,171 | |
| CryoLife, Inc. | | | 714 | | | | 4,998 | |
| Exactech, Inc.* | | | 246 | | | | 4,957 | |
| Galena Biopharma, Inc.* | | | 2,154 | | | | 4,890 | |
| National Research Corp. — Class A* | | | 255 | | | | 4,802 | |
| Cell Therapeutics, Inc.* | | | 2,914 | | | | 4,779 | |
| Insys Therapeutics, Inc.* | | | 135 | | | | 4,724 | |
| Cytokinetics, Inc.* | | | 610 | | | | 4,630 | |
| Chimerix, Inc.* | | | 210 | | | | 4,616 | |
| Horizon Pharma, Inc.* | | | 1,332 | | | | 4,502 | |
| Merge Healthcare, Inc.* | | | 1,685 | | | | 4,398 | |
| Derma Sciences, Inc.* | | | 354 | | | | 4,383 | |
| Cross Country Healthcare, Inc.* | | | 700 | | | | 4,242 | |
| BioDelivery Sciences International, Inc.* | | | 770 | | | | 4,181 | |
| Sunesis Pharmaceuticals, Inc.* | | | 835 | | | | 4,142 | |
| Zeltiq Aesthetics, Inc.* | | | 453 | | | | 4,109 | |
| Almost Family, Inc. | | | 210 | | | | 4,080 | |
| Pozen, Inc.* | | | 698 | | | | 4,000 | |
| Receptos, Inc.* | | | 150 | | | | 3,896 | |
| Addus HomeCare Corp.* | | | 134 | | | | 3,882 | |
| Solta Medical, Inc.* | | | 1,835 | | | | 3,817 | |
| Targacept, Inc.* | | | 717 | | | | 3,807 | |
| Cytori Therapeutics, Inc.* | | | 1,633 | | | | 3,805 | |
| SIGA Technologies, Inc.* | | | 948 | | | | 3,640 | |
| Biotime, Inc.* | | | 954 | | | | 3,625 | |
| Alliance HealthCare Services, Inc.* | | | 130 | | | | 3,600 | |
| Arqule, Inc.* | | | 1,538 | | | | 3,584 | |
| Coronado Biosciences, Inc.* | | | 509 | | | | 3,573 | |
| ChemoCentryx, Inc.* | | | 640 | | | | 3,558 | |
| Accelerate Diagnostics, Inc.* | | | 264 | | | | 3,540 | |
| OncoGenex Pharmaceutical, Inc.* | | | 376 | | | | 3,486 | |
| Harvard Bioscience, Inc.* | | | 657 | | | | 3,456 | |
| Zogenix, Inc.* | | | 1,852 | | | | 3,445 | |
| Tetraphase Pharmaceuticals, Inc.* | | | 300 | | | | 3,414 | |
| Cutera, Inc.* | | | 375 | | | | 3,338 | |
| Cempra, Inc.* | | | 285 | | | | 3,278 | |
| Alphatec Holdings, Inc.* | | | 1,600 | | | | 3,152 | |
| Durata Therapeutics, Inc.* | | | 337 | | | | 3,046 | |
| MEI Pharma, Inc.* | | | 250 | | | | 2,835 | |
| Supernus Pharmaceuticals, Inc.* | | | 381 | | | | 2,793 | |
| AVEO Pharmaceuticals, Inc.* | | | 1,339 | | | | 2,772 | |
| NeoGenomics, Inc.* | | | 850 | | | | 2,550 | |
| Medical Action Industries, Inc.* | | | 380 | | | | 2,523 | |
| Vical, Inc.* | | | 1,964 | | | | 2,455 | |
| Regulus Therapeutics, Inc.* | | | 242 | | | | 2,282 | |
| Skilled Healthcare Group, Inc. — Class A* | | | 515 | | | | 2,245 | |
| Sucampo Pharmaceuticals, Inc. — Class A* | | | 357 | | | | 2,228 | |
| OvaScience, Inc.* | | | 224 | | | | 2,220 | |
| Corcept Therapeutics, Inc.* | | | 1,377 | | | | 2,189 | |
| Nanosphere, Inc.* | | | 1,090 | | | | 2,180 | |
| Cornerstone Therapeutics, Inc.* | | | 228 | | | | 2,145 | |
| Enanta Pharmaceuticals, Inc.* | | | 90 | | | | 2,063 | |
| Fibrocell Science, Inc.* | | | 435 | | | | 1,905 | |
| TG Therapeutics, Inc.* | | | 370 | | | | 1,883 | |
| Amicus Therapeutics, Inc.* | | | 779 | | | | 1,807 | |
| Alimera Sciences, Inc.* | | | 440 | | | | 1,654 | |
| Enzon Pharmaceuticals, Inc. | | | 973 | | | | 1,635 | |
| Biolase, Inc.* | | | 823 | | | | 1,572 | |
| GTx, Inc.* | | | 673 | | | | 1,353 | |
| Pernix Therapeutics Holdings* | | | 453 | | | | 1,237 | |
| KaloBios Pharmaceuticals, Inc.* | | | 230 | | | | 1,040 | |
| USMD Holdings, Inc.* | | | 30 | | | | 795 | |
| Total Health Care | | | | | | | 5,108,835 | |
| | | | | | | | | |
| ENERGY - 2.8% | | | | | | | | |
| Rosetta Resources, Inc.* | | | 1,580 | | | | 86,046 | |
| Kodiak Oil & Gas Corp.* | | | 6,861 | | | | 82,744 | |
| Helix Energy Solutions Group, Inc.* | | | 2,739 | | | | 69,489 | |
| Bristow Group, Inc. | | | 938 | | | | 68,249 | |
| SemGroup Corp. — Class A | | | 1,089 | | | | 62,095 | |
| Energy XXI Bermuda Ltd. | | | 2,056 | | | | 62,091 | |
| Targa Resources Corp. | | | 849 | | | | 61,943 | |
| Berry Petroleum Co. — Class A | | | 1,359 | | | | 58,614 | |
| Hornbeck Offshore Services, Inc.* | | | 919 | | | | 52,787 | |
| CARBO Ceramics, Inc. | | | 505 | | | | 50,051 | |
| SEACOR Holdings, Inc. | | | 514 | | | | 46,486 | |
| Western Refining, Inc. | | | 1,398 | | | | 41,995 | |
| Stone Energy Corp.* | | | 1,288 | | | | 41,770 | |
| Exterran Holdings, Inc.* | | | 1,485 | | | | 40,941 | |
| PDC Energy, Inc.* | | | 673 | | | | 40,070 | |
| Carrizo Oil & Gas, Inc.* | | | 1,045 | | | | 38,989 | |
| Scorpio Tankers, Inc. | | | 3,749 | | | | 36,590 | |
| Bonanza Creek Energy, Inc.* | | | 757 | | | | 36,533 | |
| Gulfmark Offshore, Inc. — Class A | | | 686 | | | | 34,911 | |
| Alpha Natural Resources, Inc.* | | | 5,714 | | | | 34,055 | |
| Bill Barrett Corp.* | | | 1,265 | | | | 31,764 | |
| Hercules Offshore, Inc.* | | | 4,121 | | | | 30,372 | |
| Key Energy Services, Inc.* | | | 3,940 | | | | 28,723 | |
| EPL Oil & Gas, Inc.* | | | 771 | | | | 28,612 | |
| Newpark Resources, Inc.* | | | 2,227 | | | | 28,194 | |
| Geospace Technologies Corp.* | | | 328 | | | | 27,650 | |
| Forum Energy Technologies, Inc.* | | | 1,020 | | | | 27,550 | |
| Magnum Hunter Resources Corp.*,1 | | | 4,441 | | | | 27,401 | |
| Rex Energy Corp.* | | | 1,168 | | | | 26,046 | |
| Crosstex Energy, Inc. | | | 1,227 | | | | 25,632 | |
| TETRA Technologies, Inc.* | | | 2,025 | | | | 25,373 | |
| Northern Oil and Gas, Inc.* | | | 1,650 | | | | 23,810 | |
| EXCO Resources, Inc. | | | 3,514 | | | | 23,684 | |
| Approach Resources, Inc.* | | | 897 | | | | 23,573 | |
| C&J Energy Services, Inc.* | | | 1,159 | | | | 23,273 | |
| Cloud Peak Energy, Inc.* | | | 1,576 | | | | 23,120 | |
| Arch Coal, Inc. | | | 5,489 | | | | 22,560 | |
| Clean Energy Fuels Corp.* | | | 1,760 | | | | 22,493 | |
| Halcon Resources Corp.*,1 | | | 4,872 | | | | 21,583 | |
| Ship Finance International Ltd. | | | 1,395 | | | | 21,302 | |
| Matador Resources Co.* | | | 1,284 | | | | 20,968 | |
| Delek US Holdings, Inc. | | | 957 | | | | 20,183 | |
| Comstock Resources, Inc. | | | 1,253 | | | | 19,935 | |
| Sanchez Energy Corp.* | | | 730 | | | | 19,279 | |
| Forest Oil Corp.* | | | 3,084 | | | | 18,812 | |
| Diamondback Energy, Inc.* | | | 430 | | | | 18,335 | |
| ION Geophysical Corp.* | | | 3,445 | | | | 17,914 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 107 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND |
| | | Shares | | | Value | |
| | | | | | | |
| Parker Drilling Co.* | | | 3,078 | | | $ | 17,545 | |
| Goodrich Petroleum Corp.* | | | 685 | | | | 16,639 | |
| W&T Offshore, Inc. | | | 903 | | | | 16,001 | |
| Resolute Energy Corp.* | | | 1,755 | | | | 14,672 | |
| Era Group, Inc.* | | | 524 | | | | 14,242 | |
| Nordic American Tankers Ltd. | | | 1,705 | | | | 14,049 | |
| Solazyme, Inc.* | | | 1,235 | | | | 13,301 | |
| Matrix Service Co.* | | | 674 | | | | 13,224 | |
| Tesco Corp.* | | | 775 | | | | 12,842 | |
| Swift Energy Co.* | | | 1,120 | | | | 12,790 | |
| PHI, Inc.* | | | 322 | | | | 12,143 | |
| Pioneer Energy Services Corp.* | | | 1,610 | | | | 12,091 | |
| Contango Oil & Gas Co. | | | 328 | | | | 12,054 | |
| Rentech, Inc. | | | 5,844 | | | | 11,571 | |
| Synergy Resources Corp.* | | | 1,182 | | | | 11,525 | |
| RigNet, Inc.* | | | 304 | | | | 11,011 | |
| Green Plains Renewable Energy, Inc. | | | 650 | | | | 10,433 | |
| GasLog Ltd. | | | 658 | | | | 9,824 | |
| Basic Energy Services, Inc.* | | | 766 | | | | 9,682 | |
| Penn Virginia Corp.* | | | 1,431 | | | | 9,516 | |
| Willbros Group, Inc.* | | | 1,034 | | | | 9,492 | |
| Triangle Petroleum Corp.* | | | 944 | | | | 9,270 | |
| Vantage Drilling Co.* | | | 5,203 | | | | 9,001 | |
| Gulf Island Fabrication, Inc. | | | 361 | | | | 8,848 | |
| Natural Gas Services Group, Inc.* | | | 317 | | | | 8,502 | |
| Nuverra Environmental Solutions, Inc.* | | | 3,691 | | | | 8,452 | |
| Vaalco Energy, Inc.* | | | 1,495 | | | | 8,342 | |
| Renewable Energy Group, Inc.* | | | 550 | | | | 8,333 | |
| Clayton Williams Energy, Inc.* | | | 153 | | | | 8,028 | |
| Emerald Oil, Inc.* | | | 942 | | | | 6,773 | |
| Dawson Geophysical Co.* | | | 203 | | | | 6,591 | |
| Endeavour International Corp.* | | | 1,218 | | | | 6,516 | |
| Knightsbridge Tankers Ltd. | | | 634 | | | | 6,448 | |
| Quicksilver Resources, Inc.* | | | 3,224 | | | | 6,351 | |
| Alon USA Energy, Inc. | | | 601 | | | | 6,136 | |
| BPZ Resources, Inc.* | | | 3,050 | | | | 5,948 | |
| PetroQuest Energy, Inc.* | | | 1,478 | | | | 5,927 | |
| Miller Energy Resources, Inc.* | | | 791 | | | | 5,743 | |
| Gastar Exploration Ltd.* | | | 1,433 | | | | 5,660 | |
| Callon Petroleum Co.* | | | 1,030 | | | | 5,634 | |
| Warren Resources, Inc.* | | | 1,881 | | | | 5,511 | |
| Abraxas Petroleum Corp.* | | | 2,126 | | | | 5,464 | |
| Cal Dive International, Inc.* | | | 2,535 | | | | 5,197 | |
| Panhandle Oil and Gas, Inc. — Class A | | | 183 | | | | 5,175 | |
| Mitcham Industries, Inc.* | | | 329 | | | | 5,030 | |
| Uranium Energy Corp.* | | | 2,210 | | | | 4,973 | |
| Evolution Petroleum Corp.* | | | 439 | | | | 4,943 | |
| FX Energy, Inc.* | | | 1,384 | | | | 4,761 | |
| Equal Energy Ltd. | | | 950 | | | | 4,475 | |
| Midstates Petroleum Company, Inc.* | | | 858 | | | | 4,402 | |
| REX American Resources Corp.* | | | 138 | | | | 4,242 | |
| Teekay Tankers Ltd. — Class A | | | 1,607 | | | | 4,210 | |
| Bolt Technology Corp. | | | 226 | | | | 4,079 | |
| Westmoreland Coal Co.* | | | 303 | | | | 3,994 | |
| Ur-Energy, Inc.* | | | 3,140 | | | | 3,642 | |
| Frontline Ltd.*,1 | | | 1,336 | | | | 3,540 | |
| Apco Oil and Gas International, Inc.* | | | 232 | | | | 3,308 | |
| KiOR, Inc. — Class A* | | | 1,137 | | | | 3,206 | |
| Adams Resources & Energy, Inc. | | | 53 | | | | 2,942 | |
| TGC Industries, Inc. | | | 372 | | | | 2,935 | |
| Isramco, Inc.* | | | 23 | | | | 2,851 | |
| Crimson Exploration, Inc.* | | | 559 | | | | 1,683 | |
| Global Geophysical Services, Inc.* | | | 594 | | | | 1,610 | |
| Hallador Energy Co. | | | 219 | | | | 1,599 | |
| Amyris, Inc.*,1 | | | 677 | | | | 1,564 | |
| ZaZa Energy Corp.* | | | 958 | | | | 1,102 | |
| L&L Energy, Inc.* | | | 774 | | | | 983 | |
| Total Energy | | | | | | | 2,193,161 | |
| | | | | | | | | |
| MATERIALS - 2.4% | | | | | | | | |
| PolyOne Corp. | | | 2,571 | | | | 78,954 | |
| Axiall Corp. | | | 1,801 | | | | 68,060 | |
| Louisiana-Pacific Corp.* | | | 3,606 | | | | 63,429 | |
| Sensient Technologies Corp. | | | 1,292 | | | | 61,874 | |
| HB Fuller Co. | | | 1,296 | | | | 58,566 | |
| Chemtura Corp.* | | | 2,545 | | | | 58,510 | |
| Commercial Metals Co. | | | 3,024 | | | | 51,256 | |
| Schweitzer-Mauduit International, Inc. | | | 805 | | | | 48,726 | |
| Olin Corp. | | | 2,080 | | | | 47,986 | |
| Worthington Industries, Inc. | | | 1,366 | | | | 47,031 | |
| Graphic Packaging Holding Co.* | | | 5,429 | | | | 46,472 | |
| KapStone Paper and Packaging Corp. | | | 1,056 | | | | 45,196 | |
| Minerals Technologies, Inc. | | | 905 | | | | 44,680 | |
| Balchem Corp. | | | 772 | | | | 39,951 | |
| Texas Industries, Inc.* | | | 560 | | | | 37,134 | |
| Kaiser Aluminum Corp. | | | 493 | | | | 35,127 | |
| Stillwater Mining Co.* | | | 3,052 | | | | 33,602 | |
| Boise, Inc. | | | 2,605 | | | | 32,823 | |
| Coeur Mining, Inc.* | | | 2,627 | | | | 31,655 | |
| SunCoke Energy, Inc.* | | | 1,814 | | | | 30,837 | |
| PH Glatfelter Co. | | | 1,109 | | | | 30,021 | |
| Innophos Holdings, Inc. | | | 560 | | | | 29,557 | |
| Berry Plastics Group, Inc.* | | | 1,430 | | | | 28,557 | |
| Flotek Industries, Inc.* | | | 1,236 | | | | 28,428 | |
| Innospec, Inc. | | | 606 | | | | 28,276 | |
| OM Group, Inc.* | | | 830 | | | | 28,037 | |
| Stepan Co. | | | 482 | | | | 27,826 | |
| Clearwater Paper Corp.* | | | 571 | | | | 27,277 | |
| Hecla Mining Co. | | | 8,604 | | | | 27,017 | |
| Calgon Carbon Corp.* | | | 1,397 | | | | 26,529 | |
| RTI International Metals, Inc.* | | | 813 | | | | 26,048 | |
| Globe Specialty Metals, Inc. | | | 1,664 | | | | 25,642 | |
| Quaker Chemical Corp. | | | 336 | | | | 24,545 | |
| Resolute Forest Products, Inc.* | | | 1,808 | | | | 23,902 | |
| AMCOL International Corp. | | | 718 | | | | 23,464 | |
| Koppers Holdings, Inc. | | | 540 | | | | 23,031 | |
| Walter Energy, Inc. | | | 1,620 | | | | 22,729 | |
| A. Schulman, Inc. | | | 764 | | | | 22,507 | |
| Intrepid Potash, Inc. | | | 1,410 | | | | 22,109 | |
| Molycorp, Inc.* | | | 3,210 | | | | 21,058 | |
| American Vanguard Corp. | | | 734 | | | | 19,759 | |
| Deltic Timber Corp. | | | 291 | | | | 18,956 | |
| Schnitzer Steel Industries, Inc. — Class A | | | 670 | | | | 18,452 | |
| Ferro Corp.* | | | 1,871 | | | | 17,045 | |
| Headwaters, Inc.* | | | 1,885 | | | | 16,946 | |
| 108 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| RUSSELL 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Materion Corp. | | | 526 | | | $ | 16,864 | |
| LSB Industries, Inc.* | | | 498 | | | | 16,698 | |
| Wausau Paper Corp. | | | 1,277 | | | | 16,588 | |
| Kraton Performance Polymers, Inc.* | | | 840 | | | | 16,456 | |
| Tredegar Corp. | | | 632 | | | | 16,432 | |
| Neenah Paper, Inc. | | | 407 | | | | 15,999 | |
| Myers Industries, Inc. | | | 732 | | | | 14,721 | |
| Haynes International, Inc. | | | 317 | | | | 14,370 | |
| Horsehead Holding Corp.* | | | 1,139 | | | | 14,192 | |
| US Silica Holdings, Inc. | | | 556 | | | | 13,844 | |
| AK Steel Holding Corp.*,1 | | | 3,530 | | | | 13,238 | |
| Zoltek Companies, Inc.* | | | 715 | | | | 11,933 | |
| Allied Nevada Gold Corp.* | | | 2,690 | | | | 11,244 | |
| Advanced Emissions Solutions, Inc.* | | | 260 | | | | 11,107 | |
| Century Aluminum Co.* | | | 1,326 | | | | 10,674 | |
| OMNOVA Solutions, Inc.* | | | 1,218 | | | | 10,414 | |
| FutureFuel Corp. | | | 558 | | | | 10,022 | |
| Zep, Inc. | | | 589 | | | | 9,577 | |
| Hawkins, Inc. | | | 239 | | | | 9,020 | |
| Boise Cascade Co.* | | | 320 | | | | 8,624 | |
| American Pacific Corp.* | | | 156 | | | | 8,543 | |
| Landec Corp.* | | | 671 | | | | 8,186 | |
| Taminco Corp.* | | | 400 | | | | 8,120 | |
| AEP Industries, Inc.* | | | 103 | | | | 7,654 | |
| AM Castle & Co.* | | | 449 | | | | 7,229 | |
| US Concrete, Inc.* | | | 340 | | | | 6,820 | |
| Olympic Steel, Inc. | | | 235 | | | | 6,528 | |
| Universal Stainless & Alloy Products, Inc.* | | | 175 | | | | 5,693 | |
| Gold Resource Corp. | | | 852 | | | | 5,649 | |
| Chase Corp. | | | 171 | | | | 5,024 | |
| Arabian American Development Co.* | | | 509 | | | | 4,632 | |
| Paramount Gold and Silver Corp.* | | | 3,564 | | | | 4,598 | |
| KMG Chemicals, Inc. | | | 209 | | | | 4,596 | |
| Penford Corp.* | | | 250 | | | | 3,580 | |
| UFP Technologies, Inc.* | | | 141 | | | | 3,211 | |
| Handy & Harman Ltd.* | | | 133 | | | | 3,175 | |
| Midway Gold Corp.* | | | 2,906 | | | | 2,775 | |
| United States Lime & Minerals, Inc.* | | | 46 | | | | 2,696 | |
| General Moly, Inc.* | | | 1,481 | | | | 2,444 | |
| Noranda Aluminum Holding Corp. | | | 876 | | | | 2,155 | |
| GSE Holding, Inc.* | | | 203 | | | | 422 | |
| Total Materials | | | | | | | 1,935,334 | |
| | | | | | | | | |
| CONSUMER STAPLES - 2.0% | | | | | | | | |
| Rite Aid Corp.* | | | 18,886 | | | | 89,897 | |
| United Natural Foods, Inc.* | | | 1,279 | | | | 85,973 | |
| Hain Celestial Group, Inc.* | | | 994 | | | | 76,658 | |
| Casey’s General Stores, Inc. | | | 991 | | | | 72,838 | |
| Darling International, Inc.* | | | 3,054 | | | | 64,623 | |
| Harris Teeter Supermarkets, Inc. | | | 1,281 | | | | 63,012 | |
| TreeHouse Foods, Inc.* | | | 940 | | | | 62,820 | |
| Boston Beer Company, Inc. — Class A* | | | 215 | | | | 52,506 | |
| B&G Foods, Inc. — Class A | | | 1,368 | | | | 47,264 | |
| PriceSmart, Inc. | | | 487 | | | | 46,382 | |
| SUPERVALU, Inc.* | | | 5,250 | | | | 43,208 | |
| Prestige Brands Holdings, Inc.* | | | 1,318 | | | | 39,697 | |
| Sanderson Farms, Inc. | | | 597 | | | | 38,948 | |
| Lancaster Colony Corp. | | | 476 | | | | 37,266 | |
| Spectrum Brands Holdings, Inc. | | | 553 | | | | 36,409 | |
| Snyders-Lance, Inc. | | | 1,228 | | | | 35,428 | |
| Post Holdings, Inc.* | | | 845 | | | | 34,113 | |
| Andersons, Inc. | | | 481 | | | | 33,622 | |
| J&J Snack Foods Corp. | | | 388 | | | | 31,319 | |
| Universal Corp. | | | 603 | | | | 30,710 | |
| Fresh Del Monte Produce, Inc. | | | 977 | | | | 28,997 | |
| Vector Group Ltd. | | | 1,637 | | | | 26,355 | |
| Pilgrim’s Pride Corp.* | | | 1,567 | | | | 26,310 | |
| WD-40 Co. | | | 401 | | | | 26,024 | |
| Susser Holdings Corp.* | | | 468 | | | | 24,874 | |
| Boulder Brands, Inc.* | | | 1,543 | | | | 24,750 | |
| Elizabeth Arden, Inc.* | | | 667 | | | | 24,626 | |
| Seaboard Corp. | | | 7 | | | | 19,236 | |
| Cal-Maine Foods, Inc. | | | 379 | | | | 18,230 | |
| Dole Food Company, Inc.* | | | 1,326 | | | | 18,060 | |
| Annie’s, Inc.* | | | 350 | | | | 17,185 | |
| Tootsie Roll Industries, Inc.1 | | | 505 | | | | 15,564 | |
| Chiquita Brands International, Inc.* | | | 1,198 | | | | 15,167 | |
| Weis Markets, Inc. | | | 288 | | | | 14,095 | |
| Diamond Foods, Inc.* | | | 575 | | | | 13,559 | |
| USANA Health Sciences, Inc.* | | | 154 | | | | 13,366 | |
| Inter Parfums, Inc. | | | 423 | | | | 12,686 | |
| Spartan Stores, Inc. | | | 563 | | | | 12,420 | |
| Fairway Group Holdings Corp.* | | | 410 | | | | 10,480 | |
| Medifast, Inc.* | | | 354 | | | | 9,519 | |
| Calavo Growers, Inc. | | | 314 | | | | 9,495 | |
| Natural Grocers by Vitamin Cottage, Inc.* | | | 224 | | | | 8,893 | |
| Harbinger Group, Inc.* | | | 854 | | | | 8,856 | |
| Ingles Markets, Inc. — Class A | | | 304 | | | | 8,734 | |
| Nash Finch Co. | | | 316 | | | | 8,346 | |
| Chefs’ Warehouse, Inc.* | | | 356 | | | | 8,224 | |
| Star Scientific, Inc.*,1 | | | 4,305 | | | | 8,223 | |
| Revlon, Inc. — Class A* | | | 294 | | | | 8,164 | |
| Central Garden and Pet Co. — Class A* | | | 1,083 | | | | 7,419 | |
| Coca-Cola Bottling Company Consolidated | | | 115 | | | | 7,202 | |
| Lifevantage Corp.* | | | 2,934 | | | | 6,983 | |
| Pantry, Inc.* | | | 610 | | | | 6,759 | |
| Alliance One International, Inc.* | | | 2,265 | | | | 6,591 | |
| Limoneira Co. | | | 255 | | | | 6,548 | |
| Seneca Foods Corp. — Class A* | | | 206 | | | | 6,199 | |
| Village Super Market, Inc. — Class A | | | 160 | | | | 6,083 | |
| Roundy’s, Inc. | | | 654 | | | | 5,624 | |
| Female Health Co. | | | 562 | | | | 5,547 | |
| Nature’s Sunshine Products, Inc. | | | 286 | | | | 5,454 | |
| Omega Protein Corp.* | | | 517 | | | | 5,258 | |
| National Beverage Corp. | | | 290 | | | | 5,179 | |
| Nutraceutical International Corp. | | | 216 | | | | 5,128 | |
| John B Sanfilippo & Son, Inc. | | | 210 | | | | 4,870 | |
| Orchids Paper Products Co. | | | 156 | | | | 4,317 | |
| Oil-Dri Corporation of America | | | 117 | | | | 3,948 | |
| Arden Group, Inc. — Class A | | | 30 | | | | 3,900 | |
| Inventure Foods, Inc.* | | | 359 | | | | 3,770 | |
| Craft Brew Alliance, Inc.* | | | 267 | | | | 3,588 | |
| Alico, Inc. | | | 73 | | | | 3,005 | |
| Synutra International, Inc.* | | | 447 | | | | 2,369 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 109 |
| SCHEDULE OF INVESTMENTS (Unaudited) (continued) | September 30, 2013 |
| russell 2000® FUND | |
| | | Shares | | | Value | |
| | | | | | | | | |
| Farmer Bros Co.* | | | 153 | | | $ | 2,304 | |
| Griffin Land & Nurseries, Inc. | | | 66 | | | | 2,119 | |
| Lifeway Foods, Inc. | | | 112 | | | | 1,513 | |
| Total Consumer Staples | | | | | | | 1,584,808 | |
| | | | | | | | | |
| UTILITIES - 1.5% | | | | | | | | |
| Cleco Corp. | | | 1,560 | | | | 69,949 | |
| Piedmont Natural Gas Company, Inc. | | | 1,949 | | | | 64,082 | |
| IDACORP, Inc. | | | 1,302 | | | | 63,017 | |
| Southwest Gas Corp. | | | 1,193 | | | | 59,650 | |
| Black Hills Corp. | | | 1,147 | | | | 57,188 | |
| WGL Holdings, Inc. | | | 1,336 | | | | 57,061 | |
| Portland General Electric Co. | | | 1,953 | | | | 55,133 | |
| UNS Energy Corp. | | | 1,075 | | | | 50,117 | |
| Dynegy, Inc.* | | | 2,590 | | | | 50,039 | |
| ALLETE, Inc. | | | 1,033 | | | | 49,894 | |
| UIL Holdings Corp. | | | 1,310 | | | | 48,706 | |
| South Jersey Industries, Inc. | | | 831 | | | | 48,680 | |
| New Jersey Resources Corp. | | | 1,084 | | | | 47,750 | |
| PNM Resources, Inc. | | | 2,057 | | | | 46,550 | |
| NorthWestern Corp. | | | 981 | | | | 44,067 | |
| Avista Corp. | | | 1,554 | | | | 41,026 | |
| Laclede Group, Inc. | | | 841 | | | | 37,845 | |
| El Paso Electric Co. | | | 1,042 | | | | 34,803 | |
| MGE Energy, Inc. | | | 592 | | | | 32,294 | |
| Northwest Natural Gas Co. | | | 696 | | | | 29,218 | |
| American States Water Co. | | | 986 | | | | 27,174 | |
| Otter Tail Corp. | | | 942 | | | | 25,999 | |
| California Water Service Group | | | 1,238 | | | | 25,156 | |
| Empire District Electric Co. | | | 1,107 | | | | 23,978 | |
| Atlantic Power Corp. | | | 3,102 | | | | 13,370 | |
| Chesapeake Utilities Corp. | | | 250 | | | | 13,123 | |
| Ormat Technologies, Inc. | | | 456 | | | | 12,207 | |
| SJW Corp. | | | 400 | | | | 11,208 | |
| Unitil Corp. | | | 353 | | | | 10,332 | |
| Middlesex Water Co. | | | 405 | | | | 8,663 | |
| Connecticut Water Service, Inc. | | | 269 | | | | 8,651 | |
| York Water Co. | | | 330 | | | | 6,623 | |
| Consolidated Water Company Ltd. | | | 381 | | | | 5,704 | |
| Artesian Resources Corp. — Class A | | | 192 | | | | 4,272 | |
| Delta Natural Gas Company, Inc. | | | 173 | | | | 3,822 | |
| Genie Energy Ltd. — Class B | | | 326 | | | | 3,195 | |
| Pure Cycle Corp.* | | | 445 | | | | 2,056 | |
| Total Utilities | | | | | | | 1,192,602 | |
| | | | | | | | | |
| TELECOMMUNICATION SERVICES - 0.4% | | | | | | | | |
| Cogent Communications Group, Inc. | | | 1,220 | | | | 39,345 | |
| NII Holdings, Inc.* | | | 4,450 | | | | 27,011 | |
| Leap Wireless International, Inc.* | | | 1,391 | | | | 21,964 | |
| 8x8, Inc.* | | | 1,867 | | | | 18,801 | |
| Consolidated Communications | | | | | | | | |
| Holdings, Inc. | | | 1,035 | | | | 17,844 | |
| Shenandoah Telecommunications Co. | | | 618 | | | | 14,894 | |
| Cincinnati Bell, Inc.* | | | 5,374 | | | | 14,617 | |
| Vonage Holdings Corp.* | | | 4,013 | | | | 12,601 | |
| Premiere Global Services, Inc.* | | | 1,246 | | | | 12,410 | |
| Atlantic Tele-Network, Inc. | | | 232 | | | | 12,094 | |
| Iridium Communications, Inc.* | | | 1,657 | | | | 11,400 | |
| inContact, Inc.* | | | 1,375 | | | | 11,371 | |
| Lumos Networks Corp. | | | 398 | | | | 8,625 | |
| Inteliquent, Inc. | | | 841 | | | | 8,124 | |
| USA Mobility, Inc. | | | 557 | | | | 7,887 | |
| General Communication, Inc. — Class A* | | | 815 | | | | 7,759 | |
| NTELOS Holdings Corp. | | | 390 | | | | 7,332 | |
| Hawaiian Telcom Holdco, Inc.* | | | 270 | | | | 7,182 | |
| IDT Corp. — Class B | | | 398 | | | | 7,065 | |
| magicJack VocalTec Ltd.* | | | 483 | | | | 6,216 | |
| Fairpoint Communications, Inc.* | | | 533 | | | | 5,090 | |
| ORBCOMM, Inc.* | | | 941 | | | | 4,959 | |
| Towerstream Corp.* | | | 1,721 | | | | 4,922 | |
| Cbeyond, Inc.* | | | 695 | | | | 4,455 | |
| HickoryTech Corp. | | | 346 | | | | 3,937 | |
| Boingo Wireless, Inc.* | | | 477 | | | | 3,339 | |
| Primus Telecommunications Group, Inc. | | | 314 | | | | 1,064 | |
| Straight Path Communications, Inc. — | | | | | | | | |
| Class B* | | | 199 | | | | 1,047 | |
| Total Telecommunication Services | | | | | | | 303,355 | |
| | | | | | | | | |
| Total Common Stocks | | | | | | | | |
| (Cost $31,128,612) | | | | | | | 39,564,541 | |
| | | | | | | | | |
| WARRANTS - 0.0% | | | | | | | | |
| Tejon Ranch Co. | | | | | | | | |
| $10.50, 08/31/16*,† | | | 29 | | | | 80 | |
| Magnum Hunter Resources Corp. | | | | | | | | |
| $8.50, 09/12/15*,†† | | | 444 | | | | — | |
| Magnum Hunter Resources Corp. | | | | | | | | |
| $10.50, 10/14/13*,†† | | | 17 | | | | — | |
| Total Warrants | | | | | | | | |
| (Cost $150) | | | | | | | 80 | |
| RIGHTS†† - 0.0% | | | | | | | | |
| Omthera Pharmaceuticals, Inc. | | | | | | | | |
| Expires 12/31/20* | | | 86 | | | | 52 | |
| Total Rights | | | | | | | | |
| (Cost $ —) | | | | | | | 52 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENTS††,2 - 52.3% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 30,169,455 | | | | 30,169,455 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/133 | | | 5,325,539 | | | | 5,325,539 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 3,405,302 | | | | 3,405,302 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 2,657,370 | | | | 2,657,370 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $41,557,666) | | | | | | | 41,557,666 | |
| 110 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| russell 2000® FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| SECURITIES LENDING COLLATERAL††,4 - 0.3% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | $ | 107,255 | | | $ | 107,255 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 100,150 | | | | 100,150 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $207,405) | | | | | | | 207,405 | |
| Total Investments - 102.4% | | | | | | | | |
| (Cost $72,893,833) | | | | | | $ | 81,329,744 | |
| Other Assets & Liabilities, net - (2.4)% | | | | | | | (1,938,935 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 79,390,809 | |
| | | | | | Unrealized | |
| | | Units | | | Loss | |
| | | | | | | |
| EQUITY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Barclays Bank plc | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $4,807,930) | | | 4,478 | | | $ | (1,754 | ) |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/23/135 | | | | | | | | |
| (Notional Value $18,610,933) | | | 17,332 | | | | (6,101 | ) |
| Goldman Sachs International | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/31/135 | | | | | | | | |
| (Notional Value $15,977,453) | | | 14,879 | | | | (66,143 | ) |
| (Total Notional Value $39,396,316) | | | | | | $ | (73,998 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 4 | Securities lending collateral — See Note 11. |
| 5 | Total Return based on Russell 2000 Index +/- financing at a variable rate. |
plc — Public Limited Company
REIT — Real Estate Investment Trust
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 111 |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $197,356 of securities loaned | | | | |
| (cost $31,128,762) | | $ | 39,564,673 | |
| Repurchase agreements, at value | | | | |
| (cost $41,765,071) | | | 41,765,071 | |
| Total investments | | | | |
| (cost $72,893,833) | | | 81,329,744 | |
| Foreign currency, at value | | | | |
| (cost $54) | | | 54 | |
| Cash | | | 6,959 | |
| Receivables: | | | | |
| Fund shares sold | | | 79,371 | |
| Dividends | | | 40,116 | |
| Interest | | | 961 | |
| Total assets | | | 81,457,205 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 73,998 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 1,600,976 | |
| Upon return of securities loaned | | | 207,405 | |
| Management fees | | | 42,213 | |
| Distribution and service fees | | | 15,590 | |
| Swap settlement | | | 14,970 | |
| Transfer agent and administrative fees | | | 14,071 | |
| Portfolio accounting fees | | | 8,443 | |
| Miscellaneous | | | 88,730 | |
| Total liabilities | | | 2,066,396 | |
| Net assets | | $ | 79,390,809 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 68,065,112 | |
| Accumulated net investment loss | | | (575,161 | ) |
| Accumulated net realized gain on investments | | | 3,538,945 | |
| Net unrealized appreciation on investments | | | 8,361,913 | |
| Net assets | | $ | 79,390,809 | |
| A-Class: | | | | |
| Net assets | | $ | 5,039,572 | |
| Capital shares outstanding | | | 138,580 | |
| Net asset value per share | | $ | 36.37 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 38.18 | |
| C-Class: | | | | |
| Net assets | | $ | 2,682,406 | |
| Capital shares outstanding | | | 78,274 | |
| Net asset value per share | | $ | 34.27 | |
| H-Class: | | | | |
| Net assets | | $ | 71,668,831 | |
| Capital shares outstanding | | | 1,973,577 | |
| Net asset value per share | | $ | 36.31 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $320) | | $ | 385,378 | |
| Income from securities lending, net | | | 20,414 | |
| Interest | | | 5,659 | |
| Total investment income | | | 411,451 | |
| Expenses: | | | | |
| Management fees | | | 366,212 | |
| Transfer agent and administrative fees | | | 122,071 | |
| Distribution and service fees: | | | | |
| A-Class | | | 5,944 | |
| C-Class | | | 11,865 | |
| H-Class | | | 113,162 | |
| Portfolio accounting fees | | | 54,479 | |
| Custodian fees | | | 5,274 | |
| Trustees’ fees* | | | 4,236 | |
| Line of credit fees | | | 27 | |
| Miscellaneous | | | 98,521 | |
| Total expenses | | | 781,791 | |
| Net investment loss | | | (370,340 | ) |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 6,502,814 | |
| Swap agreements | | | (438,214 | ) |
| Futures contracts | | | 2,153,567 | |
| Foreign currency | | | (1 | ) |
| Net realized gain | | | 8,218,166 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (602,482 | ) |
| Swap agreements | | | (140,026 | ) |
| Futures contracts | | | (19,224 | ) |
| Net change in unrealized appreciation (depreciation) | | | (761,732 | ) |
| Net realized and unrealized gain | | | 7,456,434 | |
| Net increase in net assets resulting from operations | | $ | 7,086,094 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 112 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (370,340 | ) | | $ | (297,416 | ) |
| Net realized gain (loss) on investments | | | 8,218,166 | | | | (622,314 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (761,732 | ) | | | 4,499,506 | |
| Net increase in net assets resulting from operations | | | 7,086,094 | | | | 3,579,776 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 26,010,215 | | | | 19,300,015 | |
| C-Class | | | 18,813,413 | | | | 40,043,936 | |
| H-Class | | | 305,016,467 | | | | 360,726,416 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (25,039,926 | ) | | | (16,932,532 | ) |
| C-Class | | | (19,026,347 | ) | | | (43,861,024 | ) |
| H-Class | | | (340,844,928 | ) | | | (325,882,691 | ) |
| Net increase (decrease) from capital share transactions | | | (35,071,106 | ) | | | 33,394,120 | |
| Net increase (decrease) in net assets | | | (27,985,012 | ) | | | 36,973,896 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 107,375,821 | | | | 70,401,925 | |
| End of period | | $ | 79,390,809 | | | $ | 107,375,821 | |
| Accumulated net investment loss at end of period | | $ | (575,161 | ) | | $ | (204,821 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 756,935 | | | | 678,363 | |
| C-Class | | | 589,209 | | | | 1,497,023 | |
| H-Class | | | 8,994,014 | | | | 12,748,953 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (733,756 | ) | | | (586,707 | ) |
| C-Class | | | (596,052 | ) | | | (1,645,575 | ) |
| H-Class | | | (10,154,111 | ) | | | (11,868,039 | ) |
| Net increase (decrease) in shares | | | (1,143,761 | ) | | | 824,018 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 113 |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 32.26 | | | $ | 28.20 | | | $ | 28.54 | | | $ | 22.96 | | | $ | 14.31 | | | $ | 23.57 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.13 | ) | | | (.13 | ) | | | (.23 | ) | | | (.24 | ) | | | (.15 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.24 | | | | 4.19 | | | | (.11 | ) | | | 5.82 | | | | 8.80 | | | | (9.24 | ) |
| Total from investment operations | | | 4.11 | | | | 4.06 | | | | (.34 | ) | | | 5.58 | | | | 8.65 | | | | (9.26 | ) |
| Net asset value, end of period | | $ | 36.37 | | | $ | 32.26 | | | $ | 28.20 | | | $ | 28.54 | | | $ | 22.96 | | | $ | 14.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 12.74 | % | | | 14.40 | % | | | (1.19 | %) | | | 24.30 | % | | | 60.45 | % | | | (39.29 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,040 | | | $ | 3,723 | | | $ | 670 | | | $ | 755 | | | $ | 1,313 | | | $ | 2,309 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.74 | %) | | | (0.44 | %) | | | (0.89 | %) | | | (1.01 | %) | | | (0.81 | %) | | | (0.13 | %) |
| Total expenses | | | 1.59 | % | | | 1.55 | % | | | 1.58 | % | | | 1.56 | % | | | 1.57 | % | | | 1.56 | % |
| Portfolio turnover rate | | | 125 | % | | | 160 | % | | | 121 | % | | | 284 | % | | | 370 | % | | | 485 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 30.54 | | | $ | 26.90 | | | $ | 27.46 | | | $ | 22.29 | | | $ | 14.00 | | | $ | 23.28 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.23 | ) | | | (.31 | ) | | | (.46 | ) | | | (.47 | ) | | | (.34 | ) | | | (.15 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.96 | | | | 3.95 | | | | (.10 | ) | | | 5.64 | | | | 8.63 | | | | (9.13 | ) |
| Total from investment operations | | | 3.73 | | | | 3.64 | | | | (.56 | ) | | | 5.17 | | | | 8.29 | | | | (9.28 | ) |
| Net asset value, end of period | | $ | 34.27 | | | $ | 30.54 | | | $ | 26.90 | | | $ | 27.46 | | | $ | 22.29 | | | $ | 14.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 12.21 | % | | | 13.53 | % | | | (2.40 | %) | | | 23.25 | % | | | 59.21 | % | | | (39.86 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,682 | | | $ | 2,599 | | | $ | 6,285 | | | $ | 7,068 | | | $ | 2,860 | | | $ | 2,123 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.52 | %) | | | (1.19 | %) | | | (1.83 | %) | | | (1.87 | %) | | | (1.56 | %) | | | (0.82 | %) |
| Total expenses | | | 2.36 | % | | | 2.31 | % | | | 2.34 | % | | | 2.31 | % | | | 2.30 | % | | | 2.29 | % |
| Portfolio turnover rate | | | 125 | % | | | 160 | % | | | 121 | % | | | 284 | % | | | 370 | % | | | 485 | % |
| 114 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| RUSSELL 2000® FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 32.25 | | | $ | 28.16 | | | $ | 28.52 | | | $ | 22.93 | | | $ | 14.31 | | | $ | 23.57 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.12 | ) | | | (.12 | ) | | | (.22 | ) | | | (.27 | ) | | | (.16 | ) | | | (.02 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.18 | | | | 4.21 | | | | (.14 | ) | | | 5.86 | | | | 8.78 | | | | (9.24 | ) |
| Total from investment operations | | | 4.06 | | | | 4.09 | | | | (.36 | ) | | | 5.59 | | | | 8.62 | | | | (9.26 | ) |
| Net asset value, end of period | | $ | 36.31 | | | $ | 32.25 | | | $ | 28.16 | | | $ | 28.52 | | | $ | 22.93 | | | $ | 14.31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 12.59 | % | | | 14.52 | % | | | (1.26 | %) | | | 24.32 | % | | | 60.24 | % | | | (39.29 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 71,669 | | | $ | 101,053 | | | $ | 63,447 | | | $ | 32,389 | | | $ | 32,790 | | | $ | 19,847 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.74 | %) | | | (0.42 | %) | | | (0.83 | %) | | | (1.09 | %) | | | (0.83 | %) | | | (0.09 | %) |
| Total expenses | | | 1.58 | % | | | 1.52 | % | | | 1.58 | % | | | 1.57 | % | | | 1.56 | % | | | 1.55 | % |
| Portfolio turnover rate | | | 125 | % | | | 160 | % | | | 121 | % | | | 284 | % | | | 370 | % | | | 485 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 115 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE RUSSELL 2000® STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is the inverse (opposite) of the performance of the Russell 2000® Index (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
Inception Dates:
| A-Class | March 31, 2004 |
| C-Class | February 20, 2004 |
| H-Class | February 20, 2004 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| 116 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE RUSSELL 2000® STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 100.0% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 15,992,902 | | | $ | 15,992,902 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 4,187,394 | | | | 4,187,394 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 1,805,158 | | | | 1,805,158 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 1,408,678 | | | | 1,408,678 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $23,394,132) | | | | | | | 23,394,132 | |
| Total Investments - 100.0% | | | | | | | | |
| (Cost $23,394,132) | | | | | | $ | 23,394,132 | |
| Other Assets & Liabilities, net - 0.0% | | | | | | | (3,085 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 23,391,047 | |
| | | | | | Unrealized | |
| | | Units | | | Gain | |
| | | | | | | |
| EQUITY INDEX SWAP AGREEMENTS SOLD SHORT†† | | | | | | | | |
| Credit Suisse Capital, LLC | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/23/133 | | | | | | | | |
| (Notional Value $21,782,920) | | | 20,286 | | | $ | 7,866 | |
| Goldman Sachs International | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/31/133 | | | | | | | | |
| (Notional Value $532,515) | | | 496 | | | | 1,393 | |
| Barclays Bank plc | | | | | | | | |
| October 2013 Russell 2000 Index Swap, | | | | | | | | |
| Terminating 10/31/133 | | | | | | | | |
| (Notional Value $1,040,172) | | | 969 | | | | 383 | |
| (Total Notional Value $23,355,607) | | | | | | $ | 9,642 | |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as equity index swap collateral at September 30, 2013. |
| 3 | Total Return based on Russell 2000 Index +/- financing at a variable rate. |
| | plc — Public Limited Company |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 117 |
INVERSE RUSSELL 2000® STRATEGY FUND
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $23,394,132) | | $ | 23,394,132 | |
| Segregated cash with broker | | | 30,000 | |
| Unrealized appreciation on swap agreements | | | 9,642 | |
| Receivable for swap settlement | | | 74 | |
| Receivables: | | | | |
| Fund shares sold | | | 21,062 | |
| Interest | | | 12 | |
| Total assets | | | 23,454,922 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 22,627 | |
| Management fees | | | 17,568 | |
| Distribution and service fees | | | 5,165 | |
| Transfer agent and administrative fees | | | 4,880 | |
| Portfolio accounting fees | | | 1,952 | |
| Miscellaneous | | | 11,683 | |
| Total liabilities | | | 63,875 | |
| Net assets | | $ | 23,391,047 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 84,810,246 | |
| Accumulated net investment loss | | | (195,871 | ) |
| Accumulated net realized loss on investments | | | (61,232,970 | ) |
| Net unrealized appreciation on investments | | | 9,642 | |
| Net assets | | $ | 23,391,047 | |
| A-Class: | | | | |
| Net assets | | $ | 12,550,464 | |
| Capital shares outstanding | | | 1,012,123 | |
| Net asset value per share | | $ | 12.40 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 13.02 | |
| C-Class: | | | | |
| Net assets | | $ | 435,447 | |
| Capital shares outstanding | | | 37,802 | |
| Net asset value per share | | $ | 11.52 | |
| H-Class: | | | | |
| Net assets | | $ | 10,405,136 | |
| Capital shares outstanding | | | 837,738 | |
| Net asset value per share | | $ | 12.42 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | |
| Interest | | $ | 2,316 | |
| Total investment income | | | 2,316 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 76,976 | |
| Transfer agent and administrative fees | | | 21,382 | |
| Distribution and service fees: | | | | |
| A-Class | | | 4,034 | |
| C-Class | | | 2,255 | |
| H-Class | | | 16,785 | |
| Portfolio accounting fees | | | 8,553 | |
| Custodian fees | | | 1,062 | |
| Trustees’ fees* | | | 926 | |
| Miscellaneous | | | 16,805 | |
| Total expenses | | | 148,778 | |
| Net investment loss | | | (146,462 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Swap agreements | | | (2,271,683 | ) |
| Futures contracts | | | (1,293,248 | ) |
| Net realized loss | | | (3,564,931 | ) |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Swap agreements | | | 32,486 | |
| Futures contracts | | | 72 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | 32,558 | |
| Net realized and unrealized loss | | | (3,532,373 | ) |
| Net decrease in net assets resulting | | | | |
| from operations | | $ | (3,678,835 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 118 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
INVERSE RUSSELL 2000® STRATEGY FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (146,462 | ) | | $ | (349,622 | ) |
| Net realized loss on investments | | | (3,564,931 | ) | | | (4,103,057 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 32,558 | | | | 43,338 | |
| Net decrease in net assets resulting from operations | | | (3,678,835 | ) | | | (4,409,341 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 14,113,316 | | | | 4,824,492 | |
| C-Class | | | 1,840,695 | | | | 1,964,837 | |
| H-Class | | | 53,647,952 | | | | 105,081,288 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (1,505,136 | ) | | | (4,493,515 | ) |
| C-Class | | | (1,729,327 | ) | | | (2,258,787 | ) |
| H-Class | | | (53,163,491 | ) | | | (105,574,736 | ) |
| Net increase (decrease) from capital share transactions | | | 13,204,009 | | | | (456,421 | ) |
| Net increase (decrease) in net assets | | | 9,525,174 | | | | (4,865,762 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 13,865,873 | | | | 18,731,635 | |
| End of period | | $ | 23,391,047 | | | $ | 13,865,873 | |
| Accumulated net investment loss at end of period | | $ | (195,871 | ) | | $ | (49,409 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 1,086,786 | | | | 278,656 | |
| C-Class | | | 148,066 | | | | 117,391 | |
| H-Class | | | 3,913,951 | | | | 5,897,300 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (118,756 | ) | | | (269,632 | ) |
| C-Class | | | (140,725 | ) | | | (137,918 | ) |
| H-Class | | | (3,965,311 | ) | | | (5,997,259 | ) |
| Net increase (decrease) in shares | | | 924,011 | | | | (111,462 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 119 |
INVERSE RUSSELL 2000® STRATEGY FUND
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.40 | | | $ | 17.46 | | | $ | 19.77 | | | $ | 27.00 | | | $ | 48.02 | | | $ | 39.05 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.11 | ) | | | (.27 | ) | | | (.34 | ) | | | (.38 | ) | | | (.54 | ) | | | (.21 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.89 | ) | | | (2.79 | ) | | | (1.97 | ) | | | (6.85 | ) | | | (20.48 | ) | | | 9.57 | |
| Total from investment operations | | | (2.00 | ) | | | (3.06 | ) | | | (2.31 | ) | | | (7.23 | ) | | | (21.02 | ) | | | 9.36 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) |
| Net asset value, end of period | | $ | 12.40 | | | $ | 14.40 | | | $ | 17.46 | | | $ | 19.77 | | | $ | 27.00 | | | $ | 48.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (13.89 | %) | | | (17.53 | %) | | | (11.68 | %) | | | (26.78 | %) | | | (43.77 | %) | | | 23.91 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 12,550 | | | $ | 635 | | | $ | 612 | | | $ | 1,114 | | | $ | 1,765 | | | $ | 2,299 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.70 | %) | | | (1.60 | %) | | | (1.66 | %) | | | (1.53 | %) | | | (1.58 | %) | | | (0.50 | %) |
| Total expensesd | | | 1.71 | % | | | 1.72 | % | | | 1.75 | % | | | 1.71 | % | | | 1.71 | % | | | 1.96 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | 214 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.43 | | | $ | 16.41 | | | $ | 18.71 | | | $ | 25.75 | | | $ | 46.15 | | | $ | 37.80 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.15 | ) | | | (.38 | ) | | | (.47 | ) | | | (.55 | ) | | | (.76 | ) | | | (.40 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.76 | ) | | | (2.60 | ) | | | (1.83 | ) | | | (6.49 | ) | | | (19.64 | ) | | | 9.14 | |
| Total from investment operations | | | (1.91 | ) | | | (2.98 | ) | | | (2.30 | ) | | | (7.04 | ) | | | (20.40 | ) | | | 8.74 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) |
| Net asset value, end of period | | $ | 11.52 | | | $ | 13.43 | | | $ | 16.41 | | | $ | 18.71 | | | $ | 25.75 | | | $ | 46.15 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (14.22 | %) | | | (18.16 | %) | | | (12.29 | %) | | | (27.34 | %) | | | (44.20 | %) | | | 23.06 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 435 | | | $ | 409 | | | $ | 837 | | | $ | 1,158 | | | $ | 2,003 | | | $ | 2,199 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.44 | %) | | | (2.35 | %) | | | (2.43 | %) | | | (2.28 | %) | | | (2.34 | %) | | | (1.03 | %) |
| Total expensesd | | | 2.47 | % | | | 2.47 | % | | | 2.51 | % | | | 2.46 | % | | | 2.46 | % | | | 2.76 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | 214 | % |
| 120 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
INVERSE RUSSELL 2000® STRATEGY FUND
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.42 | | | $ | 17.47 | | | $ | 19.79 | | | $ | 27.01 | | | $ | 48.05 | | | $ | 39.07 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.12 | ) | | | (.28 | ) | | | (.35 | ) | | | (.38 | ) | | | (.53 | ) | | | (.19 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.88 | ) | | | (2.77 | ) | | | (1.97 | ) | | | (6.84 | ) | | | (20.51 | ) | | | 9.56 | |
| Total from investment operations | | | (2.00 | ) | | | (3.05 | ) | | | (2.32 | ) | | | (7.22 | ) | | | (21.04 | ) | | | 9.37 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) |
| Net asset value, end of period | | $ | 12.42 | | | $ | 14.42 | | | $ | 17.47 | | | $ | 19.79 | | | $ | 27.01 | | | $ | 48.05 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (13.87 | %) | | | (17.46 | %) | | | (11.72 | %) | | | (26.73 | %) | | | (43.79 | %) | | | 23.93 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 10,405 | | | $ | 12,822 | | | $ | 17,283 | | | $ | 9,572 | | | $ | 25,924 | | | $ | 30,131 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.69 | %) | | | (1.62 | %) | | | (1.70 | %) | | | (1.53 | %) | | | (1.58 | %) | | | (0.45 | %) |
| Total expensesd | | | 1.72 | % | | | 1.74 | % | | | 1.77 | % | | | 1.71 | % | | | 1.71 | % | | | 1.97 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | 214 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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 expenses may include interest and dividend expense related to short sales. Excluding interest and dividend expense, the operating expense ratios for the periods ended would be: |
| | | 09/30/13 | | | 03/28/13 | | | 03/31/12 | | | 03/31/11 | | | 03/31/10 | | | 03/31/09 | |
| A-Class | | | 1.71 | % | | | 1.72 | % | | | 1.75 | % | | | 1.71 | % | | | 1.71 | % | | | 1.71 | % |
| C-Class | | | 2.47 | % | | | 2.47 | % | | | 2.51 | % | | | 2.46 | % | | | 2.46 | % | | | 2.45 | % |
| H-Class | | | 1.72 | % | | | 1.74 | % | | | 1.77 | % | | | 1.71 | % | | | 1.71 | % | | | 1.70 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 121 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
S&P 500® PURE GROWTH FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a benchmark for large-cap growth securities on a daily basis. The Fund’s current benchmark is the S&P 500® Pure Growth Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | September 1, 2004 |
| C-Class | February 20, 2004 |
| H-Class | February 20, 2004 |
| Ten Largest Holdings (% of Total Net Assets) | |
| SLM Corp. | 2.6% |
| Netflix, Inc. | 2.5% |
| Regeneron Pharmaceuticals, Inc. | 2.1% |
| Seagate Technology plc | 2.0% |
| Southwest Airlines Co. | 1.9% |
| TripAdvisor, Inc. | 1.7% |
| Gilead Sciences, Inc. | 1.7% |
| Life Technologies Corp. | 1.6% |
| Celgene Corp. | 1.6% |
| Mylan, Inc. | 1.6% |
| Top Ten Total | 19.3% |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 122 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
S&P 500® PURE GROWTH FUND
| | | Shares | | | Value | |
| COMMON STOCKS† - 99.2% | | | | | | | | |
| Consumer Discretionary - 29.0% | | | | | | | | |
| Netflix, Inc.* | | | 7,605 | | | $ | 2,351,543 | |
| TripAdvisor, Inc.* | | | 21,402 | | | | 1,623,128 | |
| Scripps Networks Interactive, Inc. — Class A | | | 17,684 | | | | 1,381,298 | |
| Comcast Corp. — Class A | | | 30,200 | | | | 1,363,530 | |
| Newell Rubbermaid, Inc. | | | 48,090 | | | | 1,322,475 | |
| Delphi Automotive plc | | | 22,200 | | | | 1,296,924 | |
| Priceline.com, Inc.* | | | 1,271 | | | | 1,284,917 | |
| PVH Corp. | | | 10,040 | | | | 1,191,647 | |
| The Gap, Inc. | | | 26,270 | | | | 1,058,155 | |
| Amazon.com, Inc.* | | | 3,044 | | | | 951,676 | |
| BorgWarner, Inc. | | | 8,880 | | | | 900,343 | |
| Time Warner, Inc. | | | 13,090 | | | | 861,453 | |
| DR Horton, Inc. | | | 41,280 | | | | 802,070 | |
| Discovery Communications, Inc. — Class A* | | | 8,833 | | | | 745,682 | |
| Lowe’s Companies, Inc. | | | 14,820 | | | | 705,580 | |
| TJX Companies, Inc. | | | 12,268 | | | | 691,793 | |
| CBS Corp. — Class B | | | 12,490 | | | | 688,948 | |
| Time Warner Cable, Inc. | | | 5,980 | | | | 667,368 | |
| Twenty-First Century Fox, Inc. | | | 19,500 | | | | 653,250 | |
| Home Depot, Inc. | | | 8,610 | | | | 653,069 | |
| DIRECTV* | | | 10,779 | | | | 644,045 | |
| Urban Outfitters, Inc.* | | | 17,150 | | | | 630,606 | |
| Wyndham Worldwide Corp. | | | 9,930 | | | | 605,432 | |
| Wynn Resorts Ltd. | | | 3,611 | | | | 570,574 | |
| PetSmart, Inc. | | | 7,450 | | | | 568,137 | |
| Ross Stores, Inc. | | | 7,623 | | | | 554,954 | |
| AutoZone, Inc.* | | | 1,218 | | | | 514,885 | |
| Fossil Group, Inc.* | | | 4,290 | | | | 498,670 | |
| Lennar Corp. — Class A | | | 13,780 | | | | 487,812 | |
| L Brands, Inc. | | | 7,760 | | | | 474,136 | |
| Leggett & Platt, Inc. | | | 11,200 | | | | 337,680 | |
| PulteGroup, Inc. | | | 15,980 | | | | 263,670 | |
| Total Consumer Discretionary | | | | | | | 27,345,450 | |
| | | | | | | | | |
| Health Care - 19.6% | | | | | | | | |
| Regeneron Pharmaceuticals, Inc.* | | | 6,420 | | | | 2,008,625 | |
| Gilead Sciences, Inc.* | | | 25,828 | | | | 1,623,032 | |
| Life Technologies Corp.* | | | 20,133 | | | | 1,506,552 | |
| Celgene Corp.* | | | 9,721 | | | | 1,496,354 | |
| Mylan, Inc.* | | | 39,100 | | | | 1,492,447 | |
| Agilent Technologies, Inc. | | | 25,140 | | | | 1,288,425 | |
| Vertex Pharmaceuticals, Inc.* | | | 15,400 | | | | 1,167,628 | |
| Alexion Pharmaceuticals, Inc.* | | | 9,580 | | | | 1,112,813 | |
| Actavis, Inc.* | | | 7,590 | | | | 1,092,960 | |
| Eli Lilly & Co. | | | 18,420 | | | | 927,079 | |
| Amgen, Inc. | | | 7,150 | | | | 800,371 | |
| AbbVie, Inc. | | | 14,540 | | | | 650,374 | |
| Biogen Idec, Inc.* | | | 2,629 | | | | 632,958 | |
| PerkinElmer, Inc. | | | 16,020 | | | | 604,755 | |
| Zoetis, Inc. | | | 18,700 | | | | 581,944 | |
| DaVita HealthCare Partners, Inc.* | | | 8,720 | | | | 496,168 | |
| Intuitive Surgical, Inc.* | | | 1,221 | | | | 459,426 | |
| Cerner Corp.* | | | 7,604 | | | | 399,590 | |
| Edwards Lifesciences Corp.* | | | 3,280 | | | | 228,386 | |
| Total Health Care | | | | | | | 18,569,887 | |
| | | | | | | | | |
| Information Technology - 15.6% | | | | | | | | |
| Seagate Technology plc | | | 42,314 | | | | 1,850,814 | |
| Yahoo!, Inc.* | | | 33,879 | | | | 1,123,429 | |
| Visa, Inc. — Class A | | | 5,379 | | | | 1,027,927 | |
| eBay, Inc.* | | | 17,507 | | | | 976,716 | |
| Apple, Inc. | | | 1,959 | | | | 933,953 | |
| Applied Materials, Inc. | | | 52,192 | | | | 915,448 | |
| Salesforce.com, Inc.* | | | 17,486 | | | | 907,698 | |
| Teradyne, Inc.* | | | 49,493 | | | | 817,624 | |
| Google, Inc. — Class A* | | | 799 | | | | 699,852 | |
| Adobe Systems, Inc.* | | | 13,204 | | | | 685,816 | |
| Amphenol Corp. — Class A | | | 8,158 | | | | 631,266 | |
| Intel Corp. | | | 27,211 | | | | 623,675 | |
| KLA-Tencor Corp. | | | 10,200 | | | | 620,670 | |
| QUALCOMM, Inc. | | | 8,368 | | | | 563,668 | |
| LSI Corp. | | | 69,875 | | | | 546,423 | |
| Mastercard, Inc. — Class A | | | 735 | | | | 494,493 | |
| Akamai Technologies, Inc.* | | | 9,119 | | | | 471,452 | |
| Cognizant Technology Solutions Corp. — Class A* | | | 5,651 | | | | 464,060 | |
| Broadcom Corp. — Class A | | | 16,562 | | | | 430,778 | |
| Total Information Technology | | | | | | | 14,785,762 | |
| | | | | | | | | |
| Financials - 13.8% | | | | | | | | |
| SLM Corp. | | | 99,920 | | | | 2,488,009 | |
| Discover Financial Services | | | 28,760 | | | | 1,453,530 | |
| Bank of America Corp. | | | 105,040 | | | | 1,449,552 | |
| Huntington Bancshares, Inc. | | | 160,900 | | | | 1,329,034 | |
| Zions Bancorporation | | | 39,370 | | | | 1,079,525 | |
| Ameriprise Financial, Inc. | | | 10,650 | | | | 970,001 | |
| Moody’s Corp. | | | 11,950 | | | | 840,444 | |
| Franklin Resources, Inc. | | | 16,430 | | | | 830,537 | |
| U.S. Bancorp | | | 20,330 | | | | 743,671 | |
| American Express Co. | | | 6,960 | | | | 525,619 | |
| American Tower Corp. — Class A | | | 6,907 | | | | 512,016 | |
| T. Rowe Price Group, Inc. | | | 6,260 | | | | 450,282 | |
| Health Care REIT, Inc. | | | 6,890 | | | | 429,798 | |
| Total Financials | | | | | | | 13,102,018 | |
| | | | | | | | | |
| Industrials - 8.7% | | | | | | | | |
| Southwest Airlines Co. | | | 122,430 | | | | 1,782,581 | |
| Boeing Co. | | | 10,280 | | | | 1,207,900 | |
| PACCAR, Inc. | | | 17,640 | | | | 981,842 | |
| Quanta Services, Inc.* | | | 21,710 | | | | 597,242 | |
| Snap-on, Inc. | | | 5,800 | | | | 577,100 | |
| AMETEK, Inc. | | | 12,000 | | | | 552,240 | |
| Cummins, Inc. | | | 4,080 | | | | 542,110 | |
| Cintas Corp. | | | 9,450 | | | | 483,840 | |
| Illinois Tool Works, Inc. | | | 6,000 | | | | 457,620 | |
| Stericycle, Inc.* | | | 3,369 | | | | 388,783 | |
| Masco Corp. | | | 16,890 | | | | 359,419 | |
| Equifax, Inc. | | | 5,440 | | | | 325,584 | |
| Total Industrials | | | | | | | 8,256,261 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 123 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
S&P 500® PURE growth FUND
| | | Shares | | | Value | |
| Materials - 5.0% | | | | | | | | |
| Eastman Chemical Co. | | | 12,620 | | | $ | 983,097 | |
| Sherwin-Williams Co. | | | 4,910 | | | | 894,504 | |
| CF Industries Holdings, Inc. | | | 3,370 | | | | 710,497 | |
| PPG Industries, Inc. | | | 3,290 | | | | 549,627 | |
| Ecolab, Inc. | | | 5,160 | | | | 509,602 | |
| Ball Corp. | | | 8,920 | | | | 400,330 | |
| FMC Corp. | | | 5,268 | | | | 377,821 | |
| Mosaic Co. | | | 7,500 | | | | 322,650 | |
| Total Materials | | | | | | | 4,748,128 | |
| | | | | | | | | |
| Energy - 5.0% | | | | | | | | |
| Tesoro Corp. | | | 32,780 | | | | 1,441,664 | |
| Denbury Resources, Inc.* | | | 73,850 | | | | 1,359,579 | |
| EOG Resources, Inc. | | | 4,730 | | | | 800,694 | |
| Pioneer Natural Resources Co. | | | 3,078 | | | | 581,126 | |
| Noble Energy, Inc. | | | 7,850 | | | | 526,029 | |
| Total Energy | | | | | | | 4,709,092 | |
| | | | | | | | | |
| Consumer Staples - 1.7% | | | | | | | | |
| Constellation Brands, Inc. — Class A* | | | 12,350 | | | | 708,890 | |
| Monster Beverage Corp.* | | | 9,780 | | | | 511,005 | |
| Dr Pepper Snapple Group, Inc. | | | 7,880 | | | | 353,182 | |
| Total Consumer Staples | | | | | | | 1,573,077 | |
| | | | | | | | | |
| Telecommunication Services - 0.8% | | | | | | | | |
| Crown Castle International Corp.* | | | 10,191 | | | | 744,249 | |
| Total Common Stocks | | | | | | | | |
| (Cost $72,632,444) | | | | | | | 93,833,924 | |
| | | Face | | | | |
| | | Amount | | | Value | |
| REPURCHASE AGREEMENTS††,1 - 0.9% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 731,918 | | | $ | 731,918 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 82,613 | | | | 82,613 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 64,468 | | | | 64,468 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $878,999) | | | | | | | 878,999 | |
| Total Investments - 100.1% | | | | | | | | |
| (Cost $73,511,443) | | | | | | $ | 94,712,923 | |
| Other Assets & Liabilities, net - (0.1)% | | | | | | | (102,855 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 94,610,068 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| | plc — Public Limited Company |
| | REIT — Real Estate Investment Trust |
| 124 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
S&P 500® PURE GROWTH FUND
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $72,632,444) | | $ | 93,833,924 | |
| Repurchase agreements, at value | | | | |
| (cost $878,999) | | | 878,999 | |
| Total investments | | | | |
| (cost $73,511,443) | | | 94,712,923 | |
| Receivables: | | | | |
| Fund shares sold | | | 243,132 | |
| Dividends | | | 46,123 | |
| Total assets | | | 95,002,178 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 223,716 | |
| Management fees | | | 51,842 | |
| Distribution and service fees | | | 23,719 | |
| Transfer agent and administrative fees | | | 17,281 | |
| Portfolio accounting fees | | | 6,912 | |
| Miscellaneous | | | 68,640 | |
| Total liabilities | | | 392,110 | |
| Net assets | | $ | 94,610,068 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 72,600,057 | |
| Accumulated net investment loss | | | (349,508 | ) |
| Accumulated net realized gain on investments | | | 1,158,039 | |
| Net unrealized appreciation on investments | | | 21,201,480 | |
| Net assets | | $ | 94,610,068 | |
| A-Class: | | | | |
| Net assets | | $ | 17,109,786 | |
| Capital shares outstanding | | | 386,806 | |
| Net asset value per share | | $ | 44.23 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 46.44 | |
| C-Class: | | | | |
| Net assets | | $ | 11,121,904 | |
| Capital shares outstanding | | | 270,424 | |
| Net asset value per share | | $ | 41.13 | |
| H-Class: | | | | |
| Net assets | | $ | 66,378,378 | |
| Capital shares outstanding | | | 1,501,164 | |
| Net asset value per share | | $ | 44.22 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends | | $ | 499,282 | |
| Interest | | | 84 | |
| Total investment income | | | 499,366 | |
| Expenses: | | | | |
| Management fees | | | 322,068 | |
| Transfer agent and administrative fees | | | 107,356 | |
| Distribution and service fees: | | | | |
| A-Class | | | 16,921 | |
| C-Class | | | 51,193 | |
| H-Class | | | 77,637 | |
| Portfolio accounting fees | | | 42,942 | |
| Trustees’ fees* | | | 4,608 | |
| Custodian fees | | | 4,488 | |
| Line of credit fees | | | 413 | |
| Miscellaneous | | | 66,125 | |
| Total expenses | | | 693,751 | |
| Net investment loss | | | (194,385 | ) |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 4,648,349 | |
| Net realized gain | | | 4,648,349 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Investments | | | 4,232,014 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | 4,232,014 | |
| Net realized and unrealized gain | | | 8,880,363 | |
| Net increase in net assets resulting | | | | |
| from operations | | $ | 8,685,978 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 125 |
| S&P 500® PURE GROWTH FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (194,385 | ) | | $ | (421,412 | ) |
| Net realized gain on investments | | | 4,648,349 | | | | 6,628,478 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 4,232,014 | | | | 4,519,502 | |
| Net increase in net assets resulting from operations | | | 8,685,978 | | | | 10,726,568 | |
| | | | | | | | | |
| Capital Share Transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 17,658,114 | | | | 30,199,935 | |
| C-Class | | | 4,154,412 | | | | 5,764,339 | |
| H-Class | | | 257,836,656 | | | | 334,423,793 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (17,202,230 | ) | | | (19,263,351 | ) |
| C-Class | | | (3,009,845 | ) | | | (9,351,215 | ) |
| H-Class | | | (249,689,750 | ) | | | (327,419,156 | ) |
| Net increase from capital share transactions | | | 9,747,357 | | | | 14,354,345 | |
| Net increase in net assets | | | 18,433,335 | | | | 25,080,913 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 76,176,733 | | | | 51,095,820 | |
| End of period | | $ | 94,610,068 | | | $ | 76,176,733 | |
| Accumulated net investment loss at end of period | | $ | (349,508 | ) | | $ | (155,123 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 424,053 | | | | 876,613 | |
| C-Class | | | 107,466 | | | | 180,850 | |
| H-Class | | | 6,308,990 | | | | 9,972,171 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (423,299 | ) | | | (572,944 | ) |
| C-Class | | | (76,704 | ) | | | (299,082 | ) |
| H-Class | | | (6,158,921 | ) | | | (9,682,045 | ) |
| Net increase in shares | | | 181,585 | | | | 475,563 | |
| 126 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P 500® PURE 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 38.86 | | | $ | 34.54 | | | $ | 33.15 | | | $ | 26.51 | | | $ | 15.82 | | | $ | 25.11 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.09 | ) | | | (.13 | ) | | | (.20 | ) | | | (.18 | ) | | | (.18 | ) | | | (.11 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.46 | | | | 4.45 | | | | 1.82 | | | | 6.82 | | | | 10.87 | | | | (9.18 | ) |
| Total from investment operations | | | 5.37 | | | | 4.32 | | | | 1.62 | | | | 6.64 | | | | 10.69 | | | | (9.29 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.23 | ) | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.23 | ) | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 44.23 | | | $ | 38.86 | | | $ | 34.54 | | | $ | 33.15 | | | $ | 26.51 | | | $ | 15.82 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.82 | % | | | 12.51 | % | | | 4.96 | % | | | 25.05 | % | | | 67.57 | % | | | (37.00 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 17,110 | | | $ | 15,001 | | | $ | 2,846 | | | $ | 2,704 | | | $ | 1,774 | | | $ | 2,346 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.44 | %) | | | (0.38 | %) | | | (0.62 | %) | | | (0.65 | %) | | | (0.81 | %) | | | (0.46 | %) |
| Total expenses | | | 1.52 | % | | | 1.51 | % | | | 1.52 | % | | | 1.53 | % | | | 1.52 | % | | | 1.53 | % |
| Portfolio turnover rate | | | 324 | % | | | 421 | % | | | 586 | % | | | 808 | % | | | 699 | % | | | 573 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 36.27 | | | $ | 32.48 | | | $ | 31.42 | | | $ | 25.32 | | | $ | 15.23 | | | $ | 24.35 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.23 | ) | | | (.38 | ) | | | (.41 | ) | | | (.41 | ) | | | (.30 | ) | | | (.23 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.09 | | | | 4.17 | | | | 1.70 | | | | 6.51 | | | | 10.39 | | | | (8.89 | ) |
| Total from investment operations | | | 4.86 | | | | 3.79 | | | | 1.29 | | | | 6.10 | | | | 10.09 | | | | (9.12 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.23 | ) | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.23 | ) | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 41.13 | | | $ | 36.27 | | | $ | 32.48 | | | $ | 31.42 | | | $ | 25.32 | | | $ | 15.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.40 | % | | | 11.70 | % | | | 4.15 | % | | | 24.09 | % | | | 66.25 | % | | | (37.45 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 11,122 | | | $ | 8,692 | | | $ | 11,623 | | | $ | 8,384 | | | $ | 6,494 | | | $ | 2,111 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.17 | %) | | | (1.19 | %) | | | (1.35 | %) | | | (1.53 | %) | | | (1.40 | %) | | | (1.13 | %) |
| Total expenses | | | 2.27 | % | | | 2.25 | % | | | 2.26 | % | | | 2.29 | % | | | 2.28 | % | | | 2.29 | % |
| Portfolio turnover rate | | | 324 | % | | | 421 | % | | | 586 | % | | | 808 | % | | | 699 | % | | | 573 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 127 |
| S&P 500® PURE GROWTH FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 38.84 | | | $ | 34.52 | | | $ | 33.13 | | | $ | 26.50 | | | $ | 15.81 | | | $ | 25.10 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.07 | ) | | | (.15 | ) | | | (.19 | ) | | | (.26 | ) | | | (.14 | ) | | | (.09 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 5.45 | | | | 4.47 | | | | 1.81 | | | | 6.89 | | | | 10.83 | | | | (9.20 | ) |
| Total from investment operations | | | 5.38 | | | | 4.32 | | | | 1.62 | | | | 6.63 | | | | 10.69 | | | | (9.29 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | (.23 | ) | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | (.23 | ) | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 44.22 | | | $ | 38.84 | | | $ | 34.52 | | | $ | 33.13 | | | $ | 26.50 | | | $ | 15.81 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 13.85 | % | | | 12.51 | % | | | 4.96 | % | | | 25.02 | % | | | 67.62 | % | | | (37.01 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 66,378 | | | $ | 52,483 | | | $ | 36,627 | | | $ | 38,831 | | | $ | 15,874 | | | $ | 12,512 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.34 | %) | | | (0.43 | %) | | | (0.59 | %) | | | (0.89 | %) | | | (0.60 | %) | | | (0.41 | %) |
| Total expenses | | | 1.53 | % | | | 1.50 | % | | | 1.51 | % | | | 1.55 | % | | | 1.53 | % | | | 1.53 | % |
| Portfolio turnover rate | | | 324 | % | | | 421 | % | | | 586 | % | | | 808 | % | | | 699 | % | | | 573 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 128 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
S&P 500® Pure Value Fund | |
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a benchmark for large-cap value securities on a daily basis. The Fund’s current benchmark is the S&P 500® Pure Value Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | | | |
| A-Class | | | September 1, 2004 | |
| C-Class | | | February 20, 2004 | |
| H-Class | | | February 20, 2004 | |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Genworth Financial, Inc. — Class A | | | 3.2 | % |
| Assurant, Inc. | | | 2.4 | % |
| WellPoint, Inc. | | | 2.4 | % |
| Xerox Corp. | | | 2.1 | % |
| Safeway, Inc. | | | 2.1 | % |
| Hartford Financial Services Group, Inc. | | | 1.9 | % |
| Tyson Foods, Inc. — Class A | | | 1.8 | % |
| Humana, Inc. | | | 1.8 | % |
| Hess Corp. | | | 1.8 | % |
| Archer-Daniels-Midland Co. | | | 1.8 | % |
| Top Ten Total | | | 21.3 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 129 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| S&P 500® PURE value FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.5% | | | | | | | | |
| | | | | | | | | |
| FINANCIALS - 34.7% | | | | | | | | |
| Genworth Financial, Inc. — Class A* | | | 148,940 | | | $ | 1,904,942 | |
| Assurant, Inc. | | | 26,283 | | | | 1,421,910 | |
| Hartford Financial Services Group, Inc. | | | 35,163 | | | | 1,094,273 | |
| Lincoln National Corp. | | | 23,774 | | | | 998,269 | |
| MetLife, Inc. | | | 20,564 | | | | 965,480 | |
| Unum Group | | | 28,917 | | | | 880,233 | |
| American International Group, Inc. | | | 17,536 | | | | 852,776 | |
| Principal Financial Group, Inc. | | | 17,547 | | | | 751,363 | |
| E*TRADE Financial Corp.* | | | 42,432 | | | | 700,128 | |
| Allstate Corp. | | | 12,920 | | | | 653,106 | |
| Leucadia National Corp. | | | 21,104 | | | | 574,873 | |
| NASDAQ OMX Group, Inc. | | | 17,835 | | | | 572,325 | |
| SunTrust Banks, Inc. | | | 17,565 | | | | 569,456 | |
| Citigroup, Inc. | | | 11,648 | | | | 565,044 | |
| NYSE Euronext | | | 13,251 | | | | 556,277 | |
| Legg Mason, Inc. | | | 16,542 | | | | 553,164 | |
| JPMorgan Chase & Co. | | | 9,549 | | | | 493,588 | |
| Goldman Sachs Group, Inc. | | | 3,013 | | | | 476,687 | |
| XL Group plc — Class A | | | 15,422 | | | | 475,306 | |
| Morgan Stanley | | | 16,806 | | | | 452,922 | |
| PNC Financial Services Group, Inc. | | | 6,093 | | | | 441,438 | |
| Capital One Financial Corp. | | | 6,277 | | | | 431,481 | |
| Loews Corp. | | | 9,056 | | | | 423,277 | |
| Travelers Companies, Inc. | | | 4,610 | | | | 390,790 | |
| CME Group, Inc. — Class A | | | 5,110 | | | | 377,527 | |
| ACE Ltd. | | | 3,880 | | | | 363,013 | |
| Fifth Third Bancorp | | | 19,545 | | | | 352,592 | |
| Torchmark Corp. | | | 4,862 | | | | 351,766 | |
| State Street Corp. | | | 5,200 | | | | 341,900 | |
| People’s United Financial, Inc. | | | 22,327 | | | | 321,062 | |
| BB&T Corp. | | | 7,866 | | | | 265,478 | |
| Aflac, Inc. | | | 3,910 | | | | 242,381 | |
| Wells Fargo & Co. | | | 5,230 | | | | 216,104 | |
| Berkshire Hathaway, Inc. — Class B* | | | 1,900 | | | | 215,669 | |
| Chubb Corp. | | | 2,400 | | | | 214,224 | |
| Total Financials | | | | | | | 20,460,824 | |
| ENERGY - 12.4% | | | | | | | | |
| Hess Corp. | | | 13,581 | | | | 1,050,355 | |
| Valero Energy Corp. | | | 25,074 | | | | 856,277 | |
| ConocoPhillips | | | 11,162 | | | | 775,871 | |
| Phillips 66 | | | 12,498 | | | | 722,634 | |
| Murphy Oil Corp. | | | 10,720 | | | | 646,630 | |
| Nabors Industries Ltd. | | | 39,948 | | | | 641,565 | |
| Newfield Exploration Co.* | | | 16,925 | | | | 463,237 | |
| Baker Hughes, Inc. | | | 6,949 | | | | 341,196 | |
| Apache Corp. | | | 3,200 | | | | 272,448 | |
| Chevron Corp. | | | 2,100 | | | | 255,150 | |
| WPX Energy, Inc.* | | | 12,415 | | | | 239,113 | |
| Rowan Companies plc — Class A* | | | 6,510 | | | | 239,047 | |
| Peabody Energy Corp. | | | 13,548 | | | | 233,703 | |
| Marathon Oil Corp. | | | 6,694 | | | | 233,487 | |
| Devon Energy Corp. | | | 3,100 | | | | 179,056 | |
| Ensco plc — Class A | | | 2,700 | | | | 145,125 | |
| Total Energy | | | | | | | 7,294,894 | |
| HEALTH CARE - 11.0% | | | | | | | | |
| WellPoint, Inc. | | | 16,704 | | | | 1,396,621 | |
| Humana, Inc. | | | 11,296 | | | | 1,054,256 | |
| Aetna, Inc. | | | 11,398 | | | | 729,700 | |
| Cardinal Health, Inc. | | | 12,917 | | | | 673,621 | |
| McKesson Corp. | | | 4,813 | | | | 617,508 | |
| AmerisourceBergen Corp. — Class A | | | 9,560 | | | | 584,116 | |
| Tenet Healthcare Corp.* | | | 12,882 | | | | 530,610 | |
| Cigna Corp. | | | 6,780 | | | | 521,111 | |
| UnitedHealth Group, Inc. | | | 5,905 | | | | 422,857 | |
| Total Health Care | | | | | | | 6,530,400 | |
| CONSUMER STAPLES - 9.7% | | | | | | | | |
| Safeway, Inc. | | | 38,608 | | | | 1,235,070 | |
| Tyson Foods, Inc. — Class A | | | 37,683 | | | | 1,065,676 | |
| Archer-Daniels-Midland Co. | | | 28,260 | | | | 1,041,098 | |
| Kroger Co. | | | 14,940 | | | | 602,680 | |
| Walgreen Co. | | | 10,424 | | | | 560,811 | |
| CVS Caremark Corp. | | | 6,815 | | | | 386,751 | |
| Molson Coors Brewing Co. — Class B | | | 6,458 | | | | 323,740 | |
| Mondelez International, Inc. — Class A | | | 9,820 | | | | 308,544 | |
| Sysco Corp. | | | 5,982 | | | | 190,407 | |
| Total Consumer Staples | | | | | | | 5,714,777 | |
| CONSUMER DISCRETIONARY - 9.3% | | | | | | | | |
| Ford Motor Co. | | | 42,860 | | | | 723,048 | |
| Goodyear Tire & Rubber Co.* | | | 30,722 | | | | 689,709 | |
| Staples, Inc. | | | 42,020 | | | | 615,593 | |
| Washington Post Co. — Class B | | | 968 | | | | 591,787 | |
| Best Buy Company, Inc. | | | 15,160 | | | | 568,500 | |
| Johnson Controls, Inc. | | | 12,370 | | | | 513,355 | |
| Whirlpool Corp. | | | 3,238 | | | | 474,173 | |
| Harman International Industries, Inc. | | | 6,820 | | | | 451,689 | |
| Kohl’s Corp. | | | 7,210 | | | | 373,117 | |
| Macy’s, Inc. | | | 4,300 | | | | 186,061 | |
| Target Corp. | | | 2,700 | | | | 172,746 | |
| JC Penney Company, Inc.*,1 | | | 18,811 | | | | 165,913 | |
| Total Consumer Discretionary | | | | | | | 5,525,691 | |
| INFORMATION TECHNOLOGY - 6.9% | | | | | | | | |
| Xerox Corp. | | | 120,672 | | | | 1,241,715 | |
| Western Digital Corp. | | | 13,504 | | | | 856,154 | |
| Dell, Inc. | | | 62,012 | | | | 853,905 | |
| Jabil Circuit, Inc. | | | 32,866 | | | | 712,535 | |
| Corning, Inc. | | | 28,919 | | | | 421,928 | |
| Total Information Technology | | | | | | | 4,086,237 | |
| INDUSTRIALS - 6.8% | | | | | | | | |
| L-3 Communications Holdings, Inc. | | | 6,254 | | | | 591,002 | |
| Ryder System, Inc. | | | 9,183 | | | | 548,225 | |
| Jacobs Engineering Group, Inc.* | | | 9,135 | | | | 531,474 | |
| Fluor Corp. | | | 7,210 | | | | 511,622 | |
| Northrop Grumman Corp. | | | 4,637 | | | | 441,721 | |
| Pitney Bowes, Inc. | | | 18,550 | | | | 337,425 | |
| General Dynamics Corp. | | | 3,800 | | | | 332,576 | |
| Textron, Inc. | | | 9,190 | | | | 253,736 | |
| FedEx Corp. | | | 2,200 | | | | 251,042 | |
| Raytheon Co. | | | 3,000 | | | | 231,210 | |
| Total Industrials | | | | | | | 4,030,033 | |
| 130 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| S&P 500® PURE value FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| MATERIALS - 4.6% | | | | | | | | |
| Alcoa, Inc. | | | 75,171 | | | $ | 610,388 | |
| United States Steel Corp.1 | | | 27,466 | | | | 565,524 | |
| Allegheny Technologies, Inc. | | | 15,930 | | | | 486,184 | |
| Cliffs Natural Resources, Inc.1 | | | 20,858 | | | | 427,589 | |
| LyondellBasell Industries N.V. — Class A | | | 3,100 | | | | 227,013 | |
| Dow Chemical Co. | | | 5,479 | | | | 210,394 | |
| Avery Dennison Corp. | | | 4,630 | | | | 201,498 | |
| Total Materials | | | | | | | 2,728,590 | |
| UTILITIES - 3.8% | | | | | | | | |
| NRG Energy, Inc. | | | 22,230 | | | | 607,546 | |
| Ameren Corp. | | | 8,920 | | | | 310,773 | |
| Pepco Holdings, Inc. | | | 16,102 | | | | 297,242 | |
| Exelon Corp. | | | 7,010 | | | | 207,776 | |
| Entergy Corp. | | | 3,100 | | | | 195,889 | |
| Integrys Energy Group, Inc. | | | 3,197 | | | | 178,680 | |
| Public Service Enterprise Group, Inc. | | | 5,020 | | | | 165,309 | |
| PPL Corp. | | | 5,410 | | | | 164,356 | |
| FirstEnergy Corp. | | | 3,810 | | | | 138,875 | |
| Total Utilities | | | | | | | 2,266,446 | |
| TELECOMMUNICATION SERVICES - 0.3% | | | | | | | | |
| Frontier Communications Corp.1 | | | 43,061 | | | | 179,564 | |
| Total Common Stocks | | | | | | | | |
| (Cost $41,396,109) | | | | | | | 58,817,456 | |
| | | Face | | | | |
| | | amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,2 - 0.6% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 288,545 | | | $ | 288,545 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 32,569 | | | | 32,569 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 25,415 | | | | 25,415 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $346,529) | | | | | | | 346,529 | |
| SECURITIES LENDING COLLATERAL††,3 - 1.5% | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 471,423 | | | | 471,423 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 440,195 | | | | 440,195 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $911,618) | | | | | | | 911,618 | |
| Total Investments - 101.6% | | | | | | | | |
| (Cost $42,654,256) | | | | | | $ | 60,075,603 | |
| Other Assets & Liabilities, net - (1.6)% | | | | | | | (959,797 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 59,115,806 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | Securities lending collateral — See Note 11. |
| | plc — Public Limited Company |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 131 |
| S&P 500® PURE VALUE FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Investments, at value - including $872,603 of securities loaned | | | | |
| (cost $41,396,109) | | $ | 58,817,456 | |
| Repurchase agreements, at value | | | | |
| (cost $1,258,147) | | | 1,258,147 | |
| Total investments | | | | |
| (cost $42,654,256) | | | 60,075,603 | |
| Cash | | | 2,439 | |
| Receivables: | | | | |
| Securities sold | | | 447,056 | |
| Dividends | | | 75,859 | |
| Fund shares sold | | | 35,033 | |
| Interest | | | 980 | |
| Total assets | | | 60,636,970 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 911,618 | |
| Fund shares redeemed | | | 460,324 | |
| Management fees | | | 38,749 | |
| Distribution and service fees | | | 15,157 | |
| Transfer agent and administrative fees | | | 12,916 | |
| Portfolio accounting fees | | | 5,166 | |
| Miscellaneous | | | 77,234 | |
| Total liabilities | | | 1,521,164 | |
| Net assets | | $ | 59,115,806 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 41,026,440 | |
| Undistributed net investment income | | | 165,025 | |
| Accumulated net realized gain on investments | | | 502,994 | |
| Net unrealized appreciation on investments | | | 17,421,347 | |
| Net assets | | $ | 59,115,806 | |
| A-Class: | | | | |
| Net assets | | $ | 1,647,093 | |
| Capital shares outstanding | | | 13,082 | |
| Net asset value per share | | $ | 125.90 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 132.18 | |
| C-Class: | | | | |
| Net assets | | $ | 3,704,175 | |
| Capital shares outstanding | | | 32,193 | |
| Net asset value per share | | $ | 115.06 | |
| H-Class: | | | | |
| Net assets | | $ | 53,764,538 | |
| Capital shares outstanding | | | 425,616 | |
| Net asset value per share | | $ | 126.32 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $323) | | $ | 774,157 | |
| Income from securities lending, net | | | 10,621 | |
| Interest | | | 70 | |
| Total investment income | | | 784,848 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 297,407 | |
| Transfer agent and administrative fees | | | 99,136 | |
| Distribution and service fees: | | | | |
| A-Class | | | 1,875 | |
| C-Class | | | 20,228 | |
| H-Class | | | 92,203 | |
| Portfolio accounting fees | | | 39,654 | |
| Custodian fees | | | 4,032 | |
| Trustees’ fees* | | | 3,495 | |
| Line of credit fees | | | 158 | |
| Miscellaneous | | | 61,635 | |
| Total expenses | | | 619,823 | |
| Net investment income | | | 165,025 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 5,396,226 | |
| Net realized gain | | | 5,396,226 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 2,491,780 | |
| Net change in unrealized appreciation (depreciation) | | | 2,491,780 | |
| Net realized and unrealized gain | | | 7,888,006 | |
| Net increase in net assets resulting from operations | | $ | 8,053,031 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 132 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 165,025 | | | $ | 279,740 | |
| Net realized gain on investments | | | 5,396,226 | | | | 1,028,278 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 2,491,780 | | | | 11,830,369 | |
| Net increase in net assets resulting from operations | | | 8,053,031 | | | | 13,138,387 | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| A-Class | | | — | | | | (1,693 | ) |
| C-Class | | | — | | | | (4,761 | ) |
| H-Class | | | — | | | | (75,280 | ) |
| Total distributions to shareholders | | | — | | | | (81,734 | ) |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 1,059,434 | | | | 2,083,800 | |
| C-Class | | | 2,452,529 | | | | 6,944,252 | |
| H-Class | | | 183,696,109 | | | | 361,945,129 | |
| Distributions reinvested | | | | | | | | |
| A-Class | | | — | | | | 1,115 | |
| C-Class | | | — | | | | 4,685 | |
| H-Class | | | — | | | | 74,022 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (892,968 | ) | | | (2,824,534 | ) |
| C-Class | | | (2,619,119 | ) | | | (6,186,034 | ) |
| H-Class | | | (215,847,273 | ) | | | (364,745,391 | ) |
| Net decrease from capital share transactions | | | (32,151,288 | ) | | | (2,702,956 | ) |
| Net increase (decrease) in net assets | | | (24,098,257 | ) | | | 10,353,697 | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 83,214,063 | | | | 72,860,366 | |
| End of period | | $ | 59,115,806 | | | $ | 83,214,063 | |
| Undistributed net investment income at end of period | | $ | 165,025 | | | $ | — | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 8,702 | | | | 20,237 | |
| C-Class | | | 22,813 | | | | 77,396 | |
| H-Class | | | 1,570,550 | | | | 3,748,552 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| A-Class | | | — | | | | 12 | |
| C-Class | | | — | | | | 54 | |
| H-Class | | | — | | | | 781 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (7,290 | ) | | | (28,327 | ) |
| C-Class | | | (24,102 | ) | | | (68,596 | ) |
| H-Class | | | (1,845,273 | ) | | | (3,783,354 | ) |
| Net decrease in shares | | | (274,600 | ) | | | (33,245 | ) |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 133 |
| S&P 500® PURE VALUE FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 111.68 | | | $ | 93.49 | | | $ | 90.21 | | | $ | 79.66 | | | $ | 35.58 | | | $ | 100.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .28 | | | | .58 | | | | .30 | | | | .01 | | | | .26 | | | | 1.95 | |
| Net gain (loss) on investments (realized and unrealized) | | | 13.94 | | | | 17.75 | | | | 2.98 | | | | 11.87 | | | | 44.60 | | | | (57.52 | ) |
| Total from investment operations | | | 14.22 | | | | 18.33 | | | | 3.28 | | | | 11.88 | | | | 44.86 | | | | (55.57 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.14 | ) | | | — | | | | (1.33 | ) | | | (.78 | ) | | | (1.05 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (7.80 | ) |
| Total distributions | | | — | | | | (.14 | ) | | | — | | | | (1.33 | ) | | | (.78 | ) | | | (8.85 | ) |
| Net asset value, end of period | | $ | 125.90 | | | $ | 111.68 | | | $ | 93.49 | | | $ | 90.21 | | | $ | 79.66 | | | $ | 35.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 12.73 | % | | | 19.63 | % | | | 3.64 | % | | | 15.14 | % | | | 126.37 | % | | | (57.28 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,647 | | | $ | 1,303 | | | $ | 1,846 | | | $ | 2,329 | | | $ | 8,156 | | | $ | 203 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.46 | % | | | 0.61 | % | | | 0.34 | % | | | 0.01 | % | | | 0.39 | % | | | 2.16 | % |
| Total expenses | | | 1.52 | % | | | 1.51 | % | | | 1.51 | % | | | 1.54 | % | | | 1.52 | % | | | 1.53 | % |
| Portfolio turnover rate | | | 204 | % | | | 669 | % | | | 762 | % | | | 820 | % | | | 673 | % | | | 1,448 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 102.46 | | | $ | 86.42 | | | $ | 83.99 | | | $ | 74.81 | | | $ | 33.66 | | | $ | 96.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.10 | ) | | | (.19 | ) | | | (.36 | ) | | | (.51 | ) | | | (.02 | ) | | | 1.40 | |
| Net gain (loss) on investments (realized and unrealized) | | | 12.70 | | | | 16.37 | | | | 2.79 | | | | 11.02 | | | | 41.95 | | | | (54.89 | ) |
| Total from investment operations | | | 12.60 | | | | 16.18 | | | | 2.43 | | | | 10.51 | | | | 41.93 | | | | (53.49 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.14 | ) | | | — | | | | (1.33 | ) | | | (.78 | ) | | | (1.05 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (7.80 | ) |
| Total distributions | | | — | | | | (.14 | ) | | | — | | | | (1.33 | ) | | | (.78 | ) | | | (8.85 | ) |
| Net asset value, end of period | | $ | 115.06 | | | $ | 102.46 | | | $ | 86.42 | | | $ | 83.99 | | | $ | 74.81 | | | $ | 33.66 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 12.30 | % | | | 18.76 | % | | | 2.88 | % | | | 14.28 | % | | | 124.86 | % | | | (57.55 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,704 | | | $ | 3,430 | | | $ | 2,128 | | | $ | 5,690 | | | $ | 4,876 | | | $ | 1,129 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.18 | %) | | | (0.22 | %) | | | (0.45 | %) | | | (0.68 | %) | | | (0.03 | %) | | | 2.44 | % |
| Total expenses | | | 2.27 | % | | | 2.26 | % | | | 2.27 | % | | | 2.29 | % | | | 2.27 | % | | | 2.29 | % |
| Portfolio turnover rate | | | 204 | % | | | 669 | % | | | 762 | % | | | 820 | % | | | 673 | % | | | 1,448 | % |
| 134 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P 500® PURE VALUE FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010d | | | 2009d | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 112.06 | | | $ | 93.80 | | | $ | 90.50 | | | $ | 79.91 | | | $ | 35.67 | | | $ | 100.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .27 | | | | .57 | | | | .33 | | | | (.02 | ) | | | .32 | | | | 1.40 | |
| Net gain (loss) on investments (realized and unrealized) | | | 13.99 | | | | 17.83 | | | | 2.97 | | | | 11.94 | | | | 44.70 | | | | (56.88 | ) |
| Total from investment operations | | | 14.26 | | | | 18.40 | | | | 3.30 | | | | 11.92 | | | | 45.02 | | | | (55.48 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.14 | ) | | | — | | | | (1.33 | ) | | | (.78 | ) | | | (1.05 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (7.80 | ) |
| Total distributions | | | — | | | | (.14 | ) | | | — | | | | (1.33 | ) | | | (.78 | ) | | | (8.85 | ) |
| Net asset value, end of period | | $ | 126.32 | | | $ | 112.06 | | | $ | 93.80 | | | $ | 90.50 | | | $ | 79.91 | | | $ | 35.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 12.73 | % | | | 19.64 | % | | | 3.65 | % | | | 15.14 | % | | | 126.50 | % | | | (57.23 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 53,765 | | | $ | 78,480 | | | $ | 68,886 | | | $ | 26,852 | | | $ | 148,578 | | | $ | 4,558 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.45 | % | | | 0.58 | % | | | 0.38 | % | | | (0.03 | %) | | | 0.47 | % | | | 2.36 | % |
| Total expenses | | | 1.52 | % | | | 1.52 | % | | | 1.51 | % | | | 1.54 | % | | | 1.54 | % | | | 1.53 | % |
| Portfolio turnover rate | | | 204 | % | | | 669 | % | | | 762 | % | | | 820 | % | | | 673 | % | | | 1,448 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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 | Reverse share split — Per share amounts for the period March 31, 2008 through April 19, 2009 have been restated to reflect a 1:5 reverse share split effective April 20, 2009. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 135 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
S&P MidCap 400® Pure Growth Fund
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a benchmark for mid-cap growth securities on a daily basis. The Fund’s current benchmark is the S&P MidCap 400® Pure Growth Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | September 1, 2004 |
| C-Class | February 20, 2004 |
| H-Class | February 20, 2004 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| 3D Systems Corp. | | | 3.9 | % |
| Thor Industries, Inc. | | | 2.5 | % |
| Worthington Industries, Inc. | | | 2.3 | % |
| Chico’s FAS, Inc. | | | 2.2 | % |
| Semtech Corp. | | | 2.1 | % |
| LKQ Corp. | | | 2.1 | % |
| Terex Corp. | | | 2.0 | % |
| United Therapeutics Corp. | | | 1.9 | % |
| City National Corp. | | | 1.9 | % |
| Williams-Sonoma, Inc. | | | 1.8 | % |
| Top Ten Total | | | 22.7 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 136 | the RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| S&P MIDCAP 400® PURE GROWTH FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 101.1% | | | | | | | | |
| | | | | | | | | |
| CONSUMER DISCRETIONARY - 28.3% | | | | | | | | |
| Thor Industries, Inc. | | | 114,900 | | | $ | 6,668,796 | |
| Chico’s FAS, Inc. | | | 350,200 | | | | 5,834,333 | |
| LKQ Corp.* | | | 170,470 | | | | 5,431,174 | |
| Williams-Sonoma, Inc. | | | 85,400 | | | | 4,799,480 | |
| Polaris Industries, Inc. | | | 34,533 | | | | 4,460,973 | |
| Under Armour, Inc. — Class A* | | | 53,620 | | | | 4,260,109 | |
| Jarden Corp.* | | | 82,700 | | | | 4,002,680 | |
| Ascena Retail Group, Inc.* | | | 193,900 | | | | 3,864,427 | |
| Bob Evans Farms, Inc. | | | 59,696 | | | | 3,418,790 | |
| Gentex Corp. | | | 126,566 | | | | 3,238,824 | |
| Cinemark Holdings, Inc. | | | 94,200 | | | | 2,989,908 | |
| Foot Locker, Inc. | | | 76,300 | | | | 2,589,622 | |
| ANN, Inc.* | | | 63,200 | | | | 2,289,104 | |
| Hanesbrands, Inc. | | | 36,700 | | | | 2,286,777 | |
| Cabela’s, Inc.* | | | 33,000 | | | | 2,079,990 | |
| AMC Networks, Inc. — Class A* | | | 30,200 | | | | 2,068,096 | |
| Dick’s Sporting Goods, Inc. | | | 38,200 | | | | 2,039,116 | |
| Service Corporation International | | | 108,900 | | | | 2,027,718 | |
| Lamar Advertising Co. — Class A* | | | 36,500 | | | | 1,716,595 | |
| Tractor Supply Co. | | | 25,408 | | | | 1,706,655 | |
| Carter’s, Inc. | | | 21,400 | | | | 1,624,046 | |
| MDC Holdings, Inc. | | | 51,100 | | | | 1,533,511 | |
| Toll Brothers, Inc.* | | | 43,900 | | | | 1,423,677 | |
| HSN, Inc. | | | 24,394 | | | | 1,308,006 | |
| American Eagle Outfitters, Inc. | | | 74,700 | | | | 1,045,053 | |
| Total Consumer Discretionary | | | | | | | 74,707,460 | |
| INFORMATION TECHNOLOGY - 26.2% | | | | | | | | |
| 3D Systems Corp.*,1 | | | 190,700 | | | | 10,295,893 | |
| Semtech Corp.* | | | 182,940 | | | | 5,486,371 | |
| Alliance Data Systems Corp.* | | | 21,119 | | | | 4,466,035 | |
| Ciena Corp.* | | | 171,600 | | | | 4,286,568 | |
| CoreLogic, Inc.* | | | 140,800 | | | | 3,808,640 | |
| Mentor Graphics Corp. | | | 136,600 | | | | 3,192,341 | |
| WEX, Inc.* | | | 36,269 | | | | 3,182,605 | |
| Equinix, Inc.* | | | 17,100 | | | | 3,140,415 | |
| ValueClick, Inc.* | | | 149,200 | | | | 3,110,820 | |
| Skyworks Solutions, Inc.* | | | 121,500 | | | | 3,018,060 | |
| NeuStar, Inc. — Class A* | | | 59,876 | | | | 2,962,664 | |
| Rackspace Hosting, Inc.* | | | 55,575 | | | | 2,932,137 | |
| CommVault Systems, Inc.* | | | 32,900 | | | | 2,889,607 | |
| Concur Technologies, Inc.* | | | 25,670 | | | | 2,836,535 | |
| Cree, Inc.* | | | 40,700 | | | | 2,449,733 | |
| Trimble Navigation Ltd.* | | | 68,094 | | | | 2,023,073 | |
| ACI Worldwide, Inc.* | | | 36,579 | | | | 1,977,461 | |
| Itron, Inc.* | | | 39,800 | | | | 1,704,634 | |
| InterDigital, Inc. | | | 45,400 | | | | 1,694,782 | |
| Atmel Corp.* | | | 181,300 | | | | 1,348,872 | |
| SolarWinds, Inc.* | | | 37,160 | | | | 1,302,830 | |
| Cadence Design Systems, Inc.* | | | 83,600 | | | | 1,128,600 | |
| Total Information Technology | | | | | | | 69,238,676 | |
| FINANCIALS - 15.6% | | | | | | | | |
| City National Corp. | | | 73,708 | | | | 4,913,374 | |
| SVB Financial Group* | | | 54,100 | | | | 4,672,617 | |
| First American Financial Corp. | | | 190,600 | | | | 4,641,110 | |
| Cathay General Bancorp | | | 196,707 | | | | 4,597,043 | |
| Washington Federal, Inc. | | | 199,397 | | | | 4,123,530 | |
| Synovus Financial Corp. | | | 1,228,900 | | | | 4,055,370 | |
| Affiliated Managers Group, Inc.* | | | 16,900 | | | | 3,086,616 | |
| Signature Bank* | | | 26,001 | | | | 2,379,612 | |
| Waddell & Reed Financial, Inc. — Class A | | | 39,100 | | | | 2,012,868 | |
| Corrections Corporation of America | | | 55,911 | | | | 1,931,725 | |
| Jones Lang LaSalle, Inc. | | | 19,700 | | | | 1,719,810 | |
| Extra Space Storage, Inc. | | | 33,300 | | | | 1,523,475 | |
| Eaton Vance Corp. | | | 39,000 | | | | 1,514,370 | |
| Total Financials | | | | | | | 41,171,520 | |
| INDUSTRIALS - 14.5% | | | | | | | | |
| Terex Corp.* | | | 155,600 | | | | 5,228,160 | |
| Alaska Air Group, Inc. | | | 74,965 | | | | 4,694,308 | |
| Nordson Corp. | | | 39,600 | | | | 2,915,749 | |
| Lennox International, Inc. | | | 38,600 | | | | 2,905,036 | |
| Timken Co. | | | 47,200 | | | | 2,850,880 | |
| Lincoln Electric Holdings, Inc. | | | 42,300 | | | | 2,818,026 | |
| Valmont Industries, Inc. | | | 19,993 | | | | 2,777,228 | |
| Fortune Brands Home & Security, Inc. | | | 64,500 | | | | 2,685,135 | |
| J.B. Hunt Transport Services, Inc. | | | 32,600 | | | | 2,377,518 | |
| Copart, Inc.* | | | 73,274 | | | | 2,329,380 | |
| Wabtec Corp. | | | 31,060 | | | | 1,952,742 | |
| Graco, Inc. | | | 25,100 | | | | 1,858,906 | |
| B/E Aerospace, Inc.* | | | 22,300 | | | | 1,646,186 | |
| Clean Harbors, Inc.* | | | 22,893 | | | | 1,342,903 | |
| Total Industrials | | | | | | | 38,382,157 | |
| MATERIALS - 6.4% | | | | | | | | |
| Worthington Industries, Inc. | | | 178,449 | | | | 6,143,999 | |
| Valspar Corp. | | | 45,800 | | | | 2,905,094 | |
| NewMarket Corp. | | | 7,347 | | | | 2,115,275 | |
| Louisiana-Pacific Corp.* | | | 106,000 | | | | 1,864,540 | |
| Packaging Corporation of America | | | 30,200 | | | | 1,724,118 | |
| Eagle Materials, Inc. | | | 19,900 | | | | 1,443,745 | |
| Royal Gold, Inc. | | | 15,321 | | | | 745,520 | |
| Total Materials | | | | | | | 16,942,291 | |
| HEALTH CARE - 6.4% | | | | | | | | |
| United Therapeutics Corp.* | | | 63,452 | | | | 5,003,190 | |
| ResMed, Inc.1 | | | 64,038 | | | | 3,382,487 | |
| Cooper Companies, Inc. | | | 16,769 | | | | 2,174,772 | |
| Mallinckrodt plc* | | | 42,100 | | | | 1,856,189 | |
| Salix Pharmaceuticals Ltd.* | | | 25,200 | | | | 1,685,376 | |
| Thoratec Corp.* | | | 38,865 | | | | 1,449,276 | |
| Charles River Laboratories | | | | | | | | |
| International, Inc.* | | | 29,800 | | | | 1,378,548 | |
| Total Health Care | | | | | | | 16,929,838 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 137 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| S&P MIDCAP 400® PURE GROWTH FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| Energy - 1.7% | | | | | | | | |
| HollyFrontier Corp. | | | 109,100 | | | $ | 4,594,201 | |
| Consumer Staples - 1.3% | | | | | | | | |
| Ingredion, Inc. | | | 50,654 | | | | 3,351,775 | |
| Telecommunication Services - 0.7% | | | | | | | | |
| tw telecom, Inc. — Class A* | | | 65,800 | | | | 1,965,117 | |
| Total Common Stocks | | | | | | | | |
| (Cost $199,464,367) | | | | | | | 267,283,035 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | Amount | | | | | |
| REPURCHASE AGREEMENTS††,2 - 0.3% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 722,140 | | | | 722,140 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 81,510 | | | | 81,510 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 63,607 | | | | 63,607 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $867,257) | | | | | | | 867,257 | |
| | | | | | | |
| SECURITIES LENDING COLLATERAL††,3 - 3.8% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 5,175,426 | | | | 5,175,426 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 4,832,606 | | | | 4,832,606 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $10,008,032) | | | | | | | 10,008,032 | |
| Total Investments - 105.2% | | | | | | | | |
| (Cost $210,339,656) | | | | | | $ | 278,158,324 | |
| Other Assets & Liabilities, net - (5.2)% | | | | | | | (13,655,889 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 264,502,435 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | Securities lending collateral — See Note 11. |
plc — Public Limited Company
| 138 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P MIDCAP 400® PURE GROWTH FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value - including $9,681,343 of securities loaned | | | | |
| (cost $199,464,367) | | $ | 267,283,035 | |
| Repurchase agreements, at value | | | | |
| (cost $10,875,289) | | | 10,875,289 | |
| Total investments | | | | |
| (cost $210,339,656) | | | 278,158,324 | |
| Receivables: | | | | |
| Fund shares sold | | | 314,049 | |
| Dividends | | | 108,426 | |
| Interest | | | 31,225 | |
| Total assets | | | 278,612,024 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 10,008,032 | |
| Fund shares redeemed | | | 3,627,066 | |
| Management fees | | | 151,779 | |
| Distribution and service fees | | | 64,119 | |
| Transfer agent and administrative fees | | | 50,593 | |
| Portfolio accounting fees | | | 19,973 | |
| Miscellaneous | | | 188,027 | |
| Total liabilities | | | 14,109,589 | |
| Net assets | | $ | 264,502,435 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 188,488,734 | |
| Accumulated net investment loss | | | (993,886 | ) |
| Accumulated net realized gain on investments | | | 9,188,919 | |
| Net unrealized appreciation on investments | | | 67,818,668 | |
| Net assets | | $ | 264,502,435 | |
| A-Class: | | | | |
| Net assets | | $ | 55,257,846 | |
| Capital shares outstanding | | | 1,011,485 | |
| Net asset value per share | | $ | 54.63 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 57.35 | |
| C-Class: | | | | |
| Net assets | | $ | 23,802,692 | |
| Capital shares outstanding | | | 469,159 | |
| Net asset value per share | | $ | 50.73 | |
| H-Class: | | | | |
| Net assets | | $ | 185,441,897 | |
| Capital shares outstanding | | | 3,391,629 | |
| Net asset value per share | | $ | 54.68 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Dividends | | $ | 1,811,166 | |
| Income from securities lending, net | | | 171,327 | |
| Interest | | | 285 | |
| Total investment income | | | 1,982,778 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 1,098,056 | |
| Transfer agent and administrative fees | | | 366,019 | |
| Distribution and service fees: | | | | |
| A-Class | | | 64,966 | |
| C-Class | | | 105,367 | |
| H-Class | | | 274,711 | |
| Portfolio accounting fees | | | 141,088 | |
| Custodian fees | | | 16,170 | |
| Trustees’ fees* | | | 15,357 | |
| Line of credit fees | | | 85 | |
| Miscellaneous | | | 225,629 | |
| Total expenses | | | 2,307,448 | |
| Net investment loss | | | (324,670 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 8,570,620 | |
| Net realized gain | | | 8,570,620 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 12,744,916 | |
| Net change in unrealized appreciation (depreciation) | | | 12,744,916 | |
| Net realized and unrealized gain | | | 21,315,536 | |
| Net increase in net assets resulting from operations | | $ | 20,990,866 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 139 |
| S&P MIDCAP 400® PURE GROWTH FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (324,670 | ) | | $ | (1,391,814 | ) |
| Net realized gain on investments | | | 8,570,620 | | | | 43,157,278 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 12,744,916 | | | | (15,645,534 | ) |
| Net increase in net assets resulting from operations | | | 20,990,866 | | | | 26,119,930 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 28,336,682 | | | | 41,130,201 | |
| C-Class | | | 6,184,124 | | | | 8,791,379 | |
| H-Class | | | 119,735,617 | | | | 400,202,090 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (23,356,983 | ) | | | (36,479,630 | ) |
| C-Class | | | (3,113,336 | ) | | | (8,135,216 | ) |
| H-Class | | | (190,906,501 | ) | | | (489,786,477 | ) |
| Net decrease from capital share transactions | | | (63,120,397 | ) | | | (84,277,653 | ) |
| Net decrease in net assets | | | (42,129,531 | ) | | | (58,157,723 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 306,631,966 | | | | 364,789,689 | |
| End of period | | $ | 264,502,435 | | | $ | 306,631,966 | |
| Accumulated net investment loss at end of period | | $ | (993,886 | ) | | $ | (669,216 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 554,181 | | | | 928,330 | |
| C-Class | | | 128,141 | | | | 212,846 | |
| H-Class | | | 2,351,583 | | | | 9,129,844 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (459,859 | ) | | | (828,529 | ) |
| C-Class | | | (65,082 | ) | | | (198,463 | ) |
| H-Class | | | (3,822,591 | ) | | | (11,346,472 | ) |
| Net decrease in shares | | | (1,313,627 | ) | | | (2,102,444 | ) |
| 140 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P MIDCAP 400® PURE 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 49.76 | | | $ | 44.11 | | | $ | 42.76 | | | $ | 32.21 | | | $ | 18.19 | | | $ | 26.65 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.06 | ) | | | (.19 | ) | | | (.45 | ) | | | (.38 | ) | | | (.28 | ) | | | (.24 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.93 | | | | 5.84 | | | | 1.80 | | | | 10.93 | | | | 14.30 | | | | (8.22 | ) |
| Total from investment operations | | | 4.87 | | | | 5.65 | | | | 1.35 | | | | 10.55 | | | | 14.02 | | | | (8.46 | ) |
| Net asset value, end of period | | $ | 54.63 | | | $ | 49.76 | | | $ | 44.11 | | | $ | 42.76 | | | $ | 32.21 | | | $ | 18.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.79 | % | | | 12.81 | % | | | 3.16 | % | | | 32.75 | % | | | 77.08 | % | | | (31.74 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 55,258 | | | $ | 45,638 | | | $ | 36,052 | | | $ | 25,237 | | | $ | 2,242 | | | $ | 723 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.24 | %) | | | (0.43 | %) | | | (1.09 | %) | | | (1.04 | %) | | | (1.03 | %) | | | (0.93 | %) |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.50 | % | | | 1.54 | % | | | 1.53 | % | | | 1.58 | % |
| Portfolio turnover rate | | | 45 | % | | | 188 | % | | | 226 | % | | | 448 | % | | | 626 | % | | | 1,281 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 46.39 | | | $ | 41.43 | | | $ | 40.47 | | | $ | 30.71 | | | $ | 17.48 | | | $ | 25.79 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.23 | ) | | | (.49 | ) | | | (.71 | ) | | | (.63 | ) | | | (.44 | ) | | | (.42 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.57 | | | | 5.45 | | | | 1.67 | | | | 10.39 | | | | 13.67 | | | | (7.89 | ) |
| Total from investment operations | | | 4.34 | | | | 4.96 | | | | .96 | | | | 9.76 | | | | 13.23 | | | | (8.31 | ) |
| Net asset value, end of period | | $ | 50.73 | | | $ | 46.39 | | | $ | 41.43 | | | $ | 40.47 | | | $ | 30.71 | | | $ | 17.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.36 | % | | | 12.00 | % | | | 2.35 | % | | | 31.78 | % | | | 75.69 | % | | | (32.22 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 23,803 | | | $ | 18,837 | | | $ | 16,228 | | | $ | 10,102 | | | $ | 3,780 | | | $ | 3,477 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.96 | %) | | | (1.19 | %) | | | (1.83 | %) | | | (1.83 | %) | | | (1.77 | %) | | | (1.72 | %) |
| Total expenses | | | 2.27 | % | | | 2.25 | % | | | 2.25 | % | | | 2.29 | % | | | 2.28 | % | | | 2.32 | % |
| Portfolio turnover rate | | | 45 | % | | | 188 | % | | | 226 | % | | | 448 | % | | | 626 | % | | | 1,281 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 141 |
| S&P MIDCAP 400® PURE GROWTH FUND | |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 49.80 | | | $ | 44.14 | | | $ | 42.81 | | | $ | 32.25 | | | $ | 18.21 | | | $ | 26.68 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.04 | ) | | | (.20 | ) | | | (.44 | ) | | | (.38 | ) | | | (.26 | ) | | | (.22 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 4.92 | | | | 5.86 | | | | 1.77 | | | | 10.94 | | | | 14.30 | | | | (8.25 | ) |
| Total from investment operations | | | 4.88 | | | | 5.66 | | | | 1.33 | | | | 10.56 | | | | 14.04 | | | | (8.47 | ) |
| Net asset value, end of period | | $ | 54.68 | | | $ | 49.80 | | | $ | 44.14 | | | $ | 42.81 | | | $ | 32.25 | | | $ | 18.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.80 | % | | | 12.82 | % | | | 3.11 | % | | | 32.74 | % | | | 77.10 | % | | | (31.75 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 185,442 | | | $ | 242,157 | | | $ | 312,510 | | | $ | 212,654 | | | $ | 64,449 | | | $ | 15,591 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.15 | %) | | | (0.45 | %) | | | (1.08 | %) | | | (1.02 | %) | | | (0.99 | %) | | | (0.95 | %) |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.50 | % | | | 1.55 | % | | | 1.54 | % | | | 1.55 | % |
| Portfolio turnover rate | | | 45 | % | | | 188 | % | | | 226 | % | | | 448 | % | | | 626 | % | | | 1,281 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 142 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
| S&P MIDCAP 400® PURE VALUE FUND |
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a benchmark for mid-cap value securities on a daily basis. The Fund’s current benchmark is the S&P MidCap 400® Pure Value Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: |
| A-Class | September 1, 2004 |
| C-Class | February 20, 2004 |
| H-Class | February 20, 2004 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Ingram Micro, Inc. — Class A | | | 2.6 | % |
| Hanover Insurance Group, Inc. | | | 2.4 | % |
| URS Corp. | | | 2.4 | % |
| Manpowergroup, Inc. | | | 2.3 | % |
| JetBlue Airways Corp. | | | 2.2 | % |
| Community Health Systems, Inc. | | | 2.1 | % |
| StanCorp Financial Group, Inc. | | | 2.1 | % |
| Avnet, Inc. | | | 2.1 | % |
| Reinsurance Group of America, Inc. — Class A | | | 2.0 | % |
| Protective Life Corp. | | | 1.9 | % |
| Top Ten Total | | | 22.1 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 143 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| S&P MIDCAP 400® PURE VALUE FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.6% | | | | | | | | |
| | | | | | | | | |
| INDUSTRIALS - 24.1% | | | | | | | | |
| URS Corp. | | | 10,077 | | | $ | 541,638 | |
| Manpowergroup, Inc. | | | 7,155 | | | | 520,455 | |
| JetBlue Airways Corp.* | | | 76,072 | | | | 506,640 | |
| Oshkosh Corp.* | | | 8,369 | | | | 409,913 | |
| Con-way, Inc. | | | 8,269 | | | | 356,311 | |
| Huntington Ingalls Industries, Inc. | | | 5,268 | | | | 355,063 | |
| General Cable Corp. | | | 10,704 | | | | 339,852 | |
| Alliant Techsystems, Inc. | | | 3,222 | | | | 314,338 | |
| AECOM Technology Corp.* | | | 9,084 | | | | 284,057 | |
| Exelis, Inc. | | | 16,820 | | | | 264,242 | |
| RR Donnelley & Sons Co. | | | 15,560 | | | | 245,848 | |
| AGCO Corp. | | | 4,005 | | | | 241,982 | |
| UTI Worldwide, Inc. | | | 15,681 | | | | 236,940 | |
| Trinity Industries, Inc. | | | 4,290 | | | | 194,552 | |
| FTI Consulting, Inc.* | | | 4,080 | | | | 154,224 | |
| Brink’s Co. | | | 5,030 | | | | 142,349 | |
| KBR, Inc. | | | 3,658 | | | | 119,397 | |
| Esterline Technologies Corp.* | | | 1,420 | | | | 113,444 | |
| SPX Corp. | | | 1,160 | | | | 98,182 | |
| Granite Construction, Inc. | | | 3,190 | | | | 97,614 | |
| Total Industrials | | | | | | | 5,537,041 | |
| FINANCIALS - 21.8% | | | | | | | | |
| Hanover Insurance Group, Inc. | | | 9,830 | | | | 543,795 | |
| StanCorp Financial Group, Inc. | | | 8,642 | | | | 475,483 | |
| Reinsurance Group of America, Inc. — Class A | | | 6,853 | | | | 459,082 | |
| Protective Life Corp. | | | 10,289 | | | | 437,797 | |
| American Financial Group, Inc. | | | 6,137 | | | | 331,766 | |
| Old Republic International Corp. | | | 20,654 | | | | 318,072 | |
| Aspen Insurance Holdings Ltd. | | | 7,536 | | | | 273,481 | |
| Everest Re Group Ltd. | | | 1,717 | | | | 249,669 | |
| Kemper Corp. | | | 7,311 | | | | 245,650 | |
| First Niagara Financial Group, Inc. | | | 19,966 | | | | 207,048 | |
| Astoria Financial Corp. | | | 16,342 | | | | 203,294 | |
| Associated Banc-Corp. | | | 11,216 | | | | 173,735 | |
| BancorpSouth, Inc. | | | 8,537 | | | | 170,228 | |
| FirstMerit Corp. | | | 6,860 | | | | 148,931 | |
| Mercury General Corp. | | | 3,050 | | | | 147,346 | |
| International Bancshares Corp. | | | 6,717 | | | | 145,289 | |
| HCC Insurance Holdings, Inc. | | | 2,860 | | | | 125,325 | |
| WR Berkley Corp. | | | 2,428 | | | | 104,064 | |
| Apollo Investment Corp. | | | 11,591 | | | | 94,466 | |
| New York Community Bancorp, Inc. | | | 5,601 | | | | 84,631 | |
| Janus Capital Group, Inc. | | | 8,131 | | | | 69,195 | |
| Total Financials | | | | | | | 5,008,347 | |
| INFORMATION TECHNOLOGY - 15.7% | | | | | | | | |
| Ingram Micro, Inc. — Class A* | | | 26,386 | | | | 608,197 | |
| Avnet, Inc. | | | 11,344 | | | | 473,158 | |
| Arrow Electronics, Inc.* | | | 8,985 | | | | 436,042 | |
| Tech Data Corp.* | | | 8,321 | | | | 415,301 | |
| ManTech International Corp. — Class A | | | 14,407 | | | | 414,346 | |
| Vishay Intertechnology, Inc.* | | | 21,856 | | | | 281,724 | |
| Lexmark International, Inc. — Class A | | | 8,500 | | | | 280,500 | |
| Monster Worldwide, Inc.* | | | 48,706 | | | | 215,281 | |
| Leidos Holdings, Inc.* | | | 4,110 | | | | 187,087 | |
| Intersil Corp. — Class A | | | 9,920 | | | | 111,402 | |
| Convergys Corp. | | | 5,700 | | | | 106,875 | |
| Diebold, Inc. | | | 2,440 | | | | 71,638 | |
| Leidos Holdings, Inc. | | | 100 | | | | 4,552 | |
| Science Applications International Corp.* | | | 22 | | | | 728 | |
| Total Information Technology | | | | | | | 3,606,831 | |
| HEALTH CARE - 11.0% | | | | | | | | |
| Community Health Systems, Inc. | | | 11,628 | | | | 482,561 | |
| WellCare Health Plans, Inc.* | | | 5,220 | | | | 364,043 | |
| LifePoint Hospitals, Inc.* | | | 7,800 | | | | 363,714 | |
| Health Net, Inc.* | | | 10,239 | | | | 324,576 | |
| Health Management Associates, Inc. — Class A* | | | 25,167 | | | | 322,138 | |
| Owens & Minor, Inc. | | | 8,115 | | | | 280,698 | |
| Omnicare, Inc. | | | 3,695 | | | | 205,073 | |
| Universal Health Services, Inc. — Class B | | | 2,610 | | | | 195,724 | |
| Total Health Care | | | | | | | 2,538,527 | |
| MATERIALS - 8.0% | | | | | | | | |
| Commercial Metals Co. | | | 22,373 | | | | 379,222 | |
| Steel Dynamics, Inc. | | | 15,896 | | | | 265,622 | |
| Reliance Steel & Aluminum Co. | | | 3,239 | | | | 237,322 | |
| Domtar Corp. | | | 2,710 | | | | 215,228 | |
| Rock Tenn Co. — Class A | | | 2,060 | | | | 208,616 | |
| Greif, Inc. — Class A | | | 3,467 | | | | 169,987 | |
| Minerals Technologies, Inc. | | | 3,070 | | | | 151,566 | |
| Cabot Corp. | | | 2,801 | | | | 119,631 | |
| Olin Corp. | | | 3,590 | | | | 82,821 | |
| Total Materials | | | | | | | 1,830,015 | |
| CONSUMER DISCRETIONARY - 7.5% | | | | | | | | |
| Scholastic Corp. | | | 8,832 | | | | 253,037 | |
| Big Lots, Inc.* | | | 6,790 | | | | 251,841 | |
| Saks, Inc.* | | | 12,760 | | | | 203,394 | |
| Wendy’s Co. | | | 20,887 | | | | 177,122 | |
| WMS Industries, Inc.* | | | 6,370 | | | | 165,302 | |
| Apollo Group, Inc. — Class A* | | | 7,610 | | | | 158,364 | |
| Valassis Communications, Inc. | | | 4,523 | | | | 130,624 | |
| Rent-A-Center, Inc. — Class A | | | 3,400 | | | | 129,540 | |
| DeVry, Inc. | | | 3,880 | | | | 118,573 | |
| Regis Corp. | | | 5,790 | | | | 84,997 | |
| Aeropostale, Inc.* | | | 5,830 | | | | 54,802 | |
| Total Consumer Discretionary | | | | | | | 1,727,596 | |
| ENERGY - 5.1% | | | | | | | | |
| Superior Energy Services, Inc.* | | | 12,590 | | | | 315,255 | |
| World Fuel Services Corp. | | | 5,727 | | | | 213,674 | |
| Tidewater, Inc. | | | 2,400 | | | | 142,296 | |
| Bill Barrett Corp.* | | | 5,230 | | | | 131,325 | |
| Helix Energy Solutions Group, Inc.* | | | 4,260 | | | | 108,076 | |
| Alpha Natural Resources, Inc.* | | | 16,490 | | | | 98,281 | |
| Arch Coal, Inc. | | | 20,276 | | | | 83,334 | |
| Unit Corp.* | | | 1,570 | | | | 72,989 | |
| Total Energy | | | | | | | 1,165,230 | |
| 144 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| S&P MIDCAP 400® PURE VALUE FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| CONSUMER STAPLES - 3.0% | | | | | | | | |
| Universal Corp. | | | 4,394 | | | $ | 223,786 | |
| Harris Teeter Supermarkets, Inc. | | | 3,650 | | | | 179,544 | |
| Dean Foods Co.* | | | 8,080 | | | | 155,944 | |
| Post Holdings, Inc.* | | | 3,040 | | | | 122,725 | |
| Total Consumer Staples | | | | | | | 681,999 | |
| UTILITIES - 1.8% | | | | | | | | |
| Great Plains Energy, Inc. | | | 6,164 | | | | 136,841 | |
| UGI Corp. | | | 2,674 | | | | 104,634 | |
| Atmos Energy Corp. | | | 1,997 | | | | 85,052 | |
| Hawaiian Electric Industries, Inc. | | | 3,300 | | | | 82,830 | |
| Total Utilities | | | | | | | 409,357 | |
| TELECOMMUNICATION SERVICES - 1.6% | | | | | | | | |
| Telephone & Data Systems, Inc. | | | 12,574 | | | | 371,562 | |
| Total Common Stocks | | | | | | | | |
| (Cost $16,775,457) | | | | | | | 22,876,505 | |
| | | Face | | | | |
| | | Amount | | | | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 0.0% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 209 | | | | 209 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 24 | | | | 24 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 18 | | | | 18 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $251) | | | | | | | 251 | |
| Total Investments - 99.6% | | | | | | | | |
| (Cost $16,775,708) | | | | | | $ | 22,876,756 | |
| Other Assets & Liabilities, net - 0.4% | | | | | | | 94,161 | |
| Total Net Assets - 100.0% | | | | | | $ | 22,970,917 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 145 |
| S&P MIDCAP 400® PURE VALUE FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $16,775,457) | | $ | 22,876,505 | |
| Repurchase agreements, at value | | | | |
| (cost $251) | | | 251 | |
| Total investments | | | | |
| (cost $16,775,708) | | | 22,876,756 | |
| Cash | | | 163,838 | |
| Receivables: | | | | |
| Dividends | | | 39,018 | |
| Fund shares sold | | | 21,297 | |
| Interest | | | 91 | �� |
| Total assets | | | 23,101,000 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 32,134 | |
| Management fees | | | 30,297 | |
| Distribution and service fees | | | 11,801 | |
| Transfer agent and administrative fees | | | 10,099 | |
| Portfolio accounting fees | | | 4,040 | |
| Miscellaneous | | | 41,712 | |
| Total liabilities | | | 130,083 | |
| Net assets | | $ | 22,970,917 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 25,991,659 | |
| Undistributed net investment income | | | 67,894 | |
| Accumulated net realized loss on investments | | | (9,189,684 | ) |
| Net unrealized appreciation on investments | | | 6,101,048 | |
| Net assets | | $ | 22,970,917 | |
| A-Class: | | | | |
| Net assets | | $ | 1,362,644 | |
| Capital shares outstanding | | | 34,679 | |
| Net asset value per share | | $ | 39.29 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 41.25 | |
| C-Class: | | | | |
| Net assets | | $ | 3,227,949 | |
| Capital shares outstanding | | | 89,170 | |
| Net asset value per share | | $ | 36.20 | |
| H-Class: | | | | |
| Net assets | | $ | 18,380,324 | |
| Capital shares outstanding | | | 468,402 | |
| Net asset value per share | | $ | 39.24 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| |
| Investment Income: | | | |
| Dividends | | $ | 348,854 | |
| Income from securities lending, net | | | 4,871 | |
| Interest | | | 52 | |
| Total investment income | | | 353,777 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 160,787 | |
| Transfer agent and administrative fees | | | 53,595 | |
| Distribution and service fees: | | | | |
| A-Class | | | 1,913 | |
| C-Class | | | 14,751 | |
| H-Class | | | 47,995 | |
| Portfolio accounting fees | | | 21,438 | |
| Custodian fees | | | 2,464 | |
| Trustees’ fees* | | | 1,660 | |
| Line of credit fees | | | 178 | |
| Miscellaneous | | | 33,212 | |
| Total expenses | | | 337,993 | |
| Net investment income | | | 15,784 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (1,307,557 | ) |
| Net realized loss | | | (1,307,557 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 647,234 | |
| Net change in unrealized appreciation (depreciation) | | | 647,234 | |
| Net realized and unrealized loss | | | (660,323 | ) |
| Net decrease in net assets resulting from operations | | $ | (644,539 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 146 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P MIDCAP 400® PURE VALUE FUND |
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 15,784 | | | $ | 52,110 | |
| Net realized gain (loss) on investments | | | (1,307,557 | ) | | | 2,246,723 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 647,234 | | | | 2,605,745 | |
| Net increase (decrease) in net assets resulting from operations | | | (644,539 | ) | | | 4,904,578 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 8,755,063 | | | | 12,852,758 | |
| C-Class | | | 1,948,768 | | | | 4,206,889 | |
| H-Class | | | 122,092,134 | | | | 285,882,528 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (9,138,048 | ) | | | (18,281,006 | ) |
| C-Class | | | (2,322,408 | ) | | | (3,298,820 | ) |
| H-Class | | | (180,941,477 | ) | | | (230,894,273 | ) |
| Net increase (decrease) from capital share transactions | | | (59,605,968 | ) | | | 50,468,076 | |
| Net increase (decrease) in net assets | | | (60,250,507 | ) | | | 55,372,654 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 83,221,424 | | | | 27,848,770 | |
| End of period | | $ | 22,970,917 | | | $ | 83,221,424 | |
| Undistributed net investment income at end of period | | $ | 67,894 | | | $ | 52,110 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 223,820 | | | | 404,286 | |
| C-Class | | | 55,303 | | | | 142,762 | |
| H-Class | | | 3,163,897 | | | | 8,710,220 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (232,563 | ) | | | (581,601 | ) |
| C-Class | | | (68,129 | ) | | | (116,987 | ) |
| H-Class | | | (4,859,275 | ) | | | (7,156,790 | ) |
| Net increase (decrease) in shares | | | (1,716,947 | ) | | | 1,401,890 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 147 |
| S&P MIDCAP 400® PURE VALUE FUND |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 36.18 | | | $ | 30.88 | | | $ | 31.43 | | | $ | 30.45 | | | $ | 13.68 | | | $ | 29.72 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.08 | ) | | | .07 | | | | .06 | | | | .02 | | | | .12 | | | | .47 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.19 | | | | 5.23 | | | | (.61 | ) | | | 3.64 | | | | 16.75 | | | | (16.51 | ) |
| Total from investment operations | | | 3.11 | | | | 5.30 | | | | (.55 | ) | | | 3.66 | | | | 16.87 | | | | (16.04 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | (.17 | ) | | | (.10 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | (2.51 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | (2.68 | ) | | | (.10 | ) | | | — | |
| Net asset value, end of period | | $ | 39.29 | | | $ | 36.18 | | | $ | 30.88 | | | $ | 31.43 | | | $ | 30.45 | | | $ | 13.68 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 8.60 | % | | | 17.16 | % | | | (1.75 | %) | | | 12.81 | % | | | 123.41 | % | | | (53.97 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,363 | | | $ | 1,571 | | | $ | 6,817 | | | $ | 785 | | | $ | 10,888 | | | $ | 100 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.43 | %) | | | 0.23 | % | | | 0.22 | % | | | 0.08 | % | | | 0.43 | % | | | 1.66 | % |
| Total expenses | | | 1.53 | % | | | 1.51 | % | | | 1.49 | % | | | 1.53 | % | | | 1.52 | % | | | 1.54 | % |
| Portfolio turnover rate | | | 219 | % | | | 757 | % | | | 619 | % | | | 407 | % | | | 443 | % | | | 977 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 33.46 | | | $ | 28.78 | | | $ | 29.53 | | | $ | 28.96 | | | $ | 13.12 | | | $ | 28.78 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.13 | ) | | | (.13 | ) | | | (.16 | ) | | | (.23 | ) | | | (.06 | ) | | | .39 | |
| Net gain (loss) on investments (realized and unrealized) | | | 2.87 | | | | 4.81 | | | | (.59 | ) | | | 3.48 | | | | 16.00 | | | | (16.05 | ) |
| Total from investment operations | | | 2.74 | | | | 4.68 | | | | (.75 | ) | | | 3.25 | | | | 15.94 | | | | (15.66 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | (.17 | ) | | | (.10 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | (2.51 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | (2.68 | ) | | | (.10 | ) | | | — | |
| Net asset value, end of period | | $ | 36.20 | | | $ | 33.46 | | | $ | 28.78 | | | $ | 29.53 | | | $ | 28.96 | | | $ | 13.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 8.19 | % | | | 16.26 | % | | | (2.54 | %) | | | 12.03 | % | | | 121.59 | % | | | (54.41 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,228 | | | $ | 3,413 | | | $ | 2,194 | | | $ | 2,311 | | | $ | 2,478 | | | $ | 627 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.77 | %) | | | (0.45 | %) | | | (0.60 | %) | | | (0.83 | %) | | | (0.24 | %) | | | 1.58 | % |
| Total expenses | | | 2.28 | % | | | 2.26 | % | | | 2.26 | % | | | 2.30 | % | | | 2.29 | % | | | 2.29 | % |
| Portfolio turnover rate | | | 219 | % | | | 757 | % | | | 619 | % | | | 407 | % | | | 443 | % | | | 977 | % |
| 148 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P MIDCAP 400® PURE VALUE FUND |
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 36.16 | | | $ | 30.86 | | | $ | 31.42 | | | $ | 30.43 | | | $ | 13.67 | | | $ | 29.71 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .03 | | | | .08 | | | | .01 | | | | (.06 | ) | | | .10 | | | | .47 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.05 | | | | 5.22 | | | | (.57 | ) | | | 3.73 | | | | 16.76 | | | | (16.51 | ) |
| Total from investment operations | | | 3.08 | | | | 5.30 | | | | (.56 | ) | | | 3.67 | | | | 16.86 | | | | (16.04 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | (.17 | ) | | | (.10 | ) | | | — | |
| Net realized gains | | | — | | | | — | | | | — | | | | (2.51 | ) | | | — | | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | (2.68 | ) | | | (.10 | ) | | | — | |
| Net asset value, end of period | | $ | 39.24 | | | $ | 36.16 | | | $ | 30.86 | | | $ | 31.42 | | | $ | 30.43 | | | $ | 13.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 8.52 | % | | | 17.17 | % | | | (1.78 | %) | | | 12.85 | % | | | 123.43 | % | | | (53.99 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 18,380 | | | $ | 78,237 | | | $ | 18,838 | | | $ | 54,206 | | | $ | 199,458 | | | $ | 3,985 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.16 | % | | | 0.24 | % | | | 0.02 | % | | | (0.19 | %) | | | 0.37 | % | | | 2.01 | % |
| Total expenses | | | 1.52 | % | | | 1.52 | % | | | 1.51 | % | | | 1.54 | % | | | 1.53 | % | | | 1.54 | % |
| Portfolio turnover rate | | | 219 | % | | | 757 | % | | | 619 | % | | | 407 | % | | | 443 | % | | | 977 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 149 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
S&P SMALLCAP 600® PURE GROWTH FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a benchmark for small-cap growth securities on a daily basis. The Fund’s current benchmark is the S&P SmallCap 600® Pure Growth Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | September 1, 2004 |
| C-Class | | February 20, 2004 |
| H-Class | | February 20, 2004 |
| Ten Largest Holdings (% of Total Net Assets) |
| Tuesday Morning Corp. | | | 2.2 | % |
| Blucora, Inc. | | | 2.0 | % |
| HFF, Inc. — Class A | | | 1.7 | % |
| Winnebago Industries, Inc. | | | 1.7 | % |
| On Assignment, Inc. | | | 1.6 | % |
| Perficient, Inc. | | | 1.4 | % |
| Cognex Corp. | | | 1.3 | % |
| XO Group, Inc. | | | 1.3 | % |
| Home BancShares, Inc. | | | 1.3 | % |
| Measurement Specialties, Inc. | | | 1.2 | % |
| Top Ten Total | | | 15.7 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| 150 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| S&P SMALLCAP 600® PURE GROWTH FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.2% | | | | | | | | |
| | | | | | | | | |
| INFORMATION TECHNOLOGY - 28.0% | | | | | | | | |
| Blucora, Inc.* | | | 33,710 | | | $ | 774,655 | |
| Perficient, Inc.* | | | 30,374 | | | | 557,667 | |
| Cognex Corp. | | | 16,286 | | | | 510,729 | |
| XO Group, Inc.* | | | 39,332 | | | | 508,169 | |
| Measurement Specialties, Inc.* | | | 8,755 | | | | 474,871 | |
| Dealertrack Technologies, Inc.* | | | 9,990 | | | | 427,972 | |
| Cirrus Logic, Inc.* | | | 18,570 | | | | 421,168 | |
| Sourcefire, Inc.* | | | 5,489 | | | | 416,725 | |
| OpenTable, Inc.* | | | 5,721 | | | | 400,356 | |
| CalAmp Corp.* | | | 20,432 | | | | 360,217 | |
| Kulicke & Soffa Industries, Inc.* | | | 28,657 | | | | 330,988 | |
| Ultratech, Inc.* | | | 10,600 | | | | 321,180 | |
| Advanced Energy Industries, Inc.* | | | 18,130 | | | | 317,638 | |
| Ixia* | | | 19,623 | | | | 307,492 | |
| Dice Holdings, Inc.* | | | 35,256 | | | | 300,029 | |
| Interactive Intelligence Group, Inc.* | | | 4,688 | | | | 297,640 | |
| Electronics for Imaging, Inc.* | | | 8,380 | | | | 265,478 | |
| Rudolph Technologies, Inc.* | | | 23,140 | | | | 263,796 | |
| FEI Co. | | | 2,860 | | | | 251,108 | |
| NETGEAR, Inc.* | | | 8,069 | | | | 249,009 | |
| Tyler Technologies, Inc.* | | | 2,833 | | | | 247,803 | |
| MAXIMUS, Inc. | | | 5,314 | | | | 239,342 | |
| Manhattan Associates, Inc.* | | | 2,500 | | | | 238,625 | |
| Littelfuse, Inc. | | | 3,035 | | | | 237,398 | |
| Monolithic Power Systems, Inc. | | | 7,205 | | | | 218,167 | |
| Stamps.com, Inc.* | | | 4,467 | | | | 205,169 | |
| Liquidity Services, Inc.* | | | 5,822 | | | | 195,386 | |
| Entropic Communications, Inc.* | | | 43,376 | | | | 189,987 | |
| Procera Networks, Inc.* | | | 11,655 | | | | 180,536 | |
| Veeco Instruments, Inc.* | | | 4,497 | | | | 167,423 | |
| iGATE Corp.* | | | 5,610 | | | | 155,734 | |
| ExlService Holdings, Inc.* | | | 5,250 | | | | 149,520 | |
| NIC, Inc. | | | 6,070 | | | | 140,278 | |
| Microsemi Corp.* | | | 5,664 | | | | 137,352 | |
| Nanometrics, Inc.* | | | 7,430 | | | | 119,772 | |
| VASCO Data Security International, Inc.* | | | 14,235 | | | | 112,314 | |
| NetScout Systems, Inc.* | | | 3,403 | | | | 87,015 | |
| ARRIS Group, Inc.* | | | 4,954 | | | | 84,515 | |
| LivePerson, Inc.* | | | 7,581 | | | | 71,565 | |
| Total Information Technology | | | | | | | 10,934,788 | |
| FINANCIALS - 22.0% | | | | | | | | |
| HFF, Inc. — Class A | | | 27,053 | | | | 677,678 | |
| Home BancShares, Inc. | | | 16,260 | | | | 493,815 | |
| PrivateBancorp, Inc. — Class A | | | 21,981 | | | | 470,393 | |
| PacWest Bancorp | | | 12,841 | | | | 441,217 | |
| Sabra Health Care REIT, Inc. | | | 18,465 | | | | 424,880 | |
| Cardinal Financial Corp. | | | 24,620 | | | | 406,969 | |
| Pinnacle Financial Partners, Inc.* | | | 12,882 | | | | 384,012 | |
| Portfolio Recovery Associates, Inc.* | | | 6,382 | | | | 382,536 | |
| Oritani Financial Corp. | | | 23,100 | | | | 380,225 | |
| First Commonwealth Financial Corp. | | | 46,449 | | | | 352,548 | |
| BofI Holding, Inc.* | | | 5,410 | | | | 350,893 | |
| Texas Capital Bancshares, Inc.* | | | 7,597 | | | | 349,234 | |
| BBCN Bancorp, Inc. | | | 23,593 | | | | 324,640 | |
| CoreSite Realty Corp. | | | 9,270 | | | | 314,624 | |
| Virtus Investment Partners, Inc.* | | | 1,890 | | | | 307,390 | |
| ViewPoint Financial Group, Inc. | | | 14,305 | | | | 295,684 | |
| Encore Capital Group, Inc.* | | | 6,190 | | | | 283,873 | |
| National Penn Bancshares, Inc. | | | 25,394 | | | | 255,210 | |
| MarketAxess Holdings, Inc. | | | 3,740 | | | | 224,550 | |
| Wilshire Bancorp, Inc. | | | 27,085 | | | | 221,555 | |
| FNB Corp. | | | 18,250 | | | | 221,373 | |
| eHealth, Inc.* | | | 6,588 | | | | 212,529 | |
| Bank of the Ozarks, Inc. | | | 4,391 | | | | 210,724 | |
| First Cash Financial Services, Inc.* | | | 3,329 | | | | 192,916 | |
| Geo Group, Inc. | | | 4,531 | | | | 150,656 | |
| Boston Private Financial Holdings, Inc. | | | 12,870 | | | | 142,857 | |
| Universal Health Realty Income Trust | | | 2,747 | | | | 115,017 | |
| Total Financials | | | | | | | 8,587,998 | |
| CONSUMER DISCRETIONARY - 17.3% | | | | | | | | |
| Tuesday Morning Corp.* | | | 57,073 | | | | 871,505 | |
| Winnebago Industries, Inc.* | | | 25,310 | | | | 657,048 | |
| Arctic Cat, Inc. | | | 8,250 | | | | 470,662 | |
| Multimedia Games Holding Company, Inc.* | | | 12,970 | | | | 448,114 | |
| Drew Industries, Inc. | | | 9,440 | | | | 429,898 | |
| Lumber Liquidators Holdings, Inc.* | | | 3,684 | | | | 392,899 | |
| Francesca’s Holdings Corp.* | | | 20,408 | | | | 380,405 | |
| Dorman Products, Inc. | | | 6,940 | | | | 343,877 | |
| Sturm Ruger & Company, Inc.1 | | | 4,922 | | | | 308,264 | |
| Movado Group, Inc. | | | 6,315 | | | | 276,281 | |
| Steven Madden Ltd.* | | | 4,564 | | | | 245,680 | |
| iRobot Corp.* | | | 6,005 | | | | 226,208 | |
| Buffalo Wild Wings, Inc.* | | | 1,513 | | | | 168,276 | |
| SHFL Entertainment, Inc.* | | | 7,310 | | | | 168,130 | |
| Outerwall, Inc.*,1 | | | 3,259 | | | | 162,917 | |
| Pool Corp. | | | 2,653 | | | | 148,913 | |
| Select Comfort Corp.* | | | 6,091 | | | | 148,316 | |
| Oxford Industries, Inc. | | | 2,010 | | | | 136,640 | |
| Brunswick Corp. | | | 3,244 | | | | 129,468 | |
| Papa John’s International, Inc. | | | 1,850 | | | | 129,278 | |
| M/I Homes, Inc.* | | | 5,520 | | | | 113,822 | |
| Ethan Allen Interiors, Inc. | | | 3,847 | | | | 107,216 | |
| Vitamin Shoppe, Inc.* | | | 2,111 | | | | 92,356 | |
| Meritage Homes Corp.* | | | 1,970 | | | | 84,612 | |
| American Public Education, Inc.* | | | 2,195 | | | | 82,971 | |
| Total Consumer Discretionary | | | | | | | 6,723,756 | |
| HEALTH CARE - 13.9% | | | | | | | | |
| Akorn, Inc.* | | | 20,520 | | | | 403,834 | |
| MWI Veterinary Supply, Inc.* | | | 2,629 | | | | 392,667 | |
| Cynosure, Inc. — Class A* | | | 14,190 | | | | 323,674 | |
| Medicines Co.* | | | 9,612 | | | | 322,194 | |
| ViroPharma, Inc.* | | | 7,783 | | | | 305,872 | |
| Luminex Corp.* | | | 14,951 | | | | 299,020 | |
| Bio-Reference Labs, Inc.*,1 | | | 9,648 | | | | 288,282 | |
| PAREXEL International Corp.* | | | 5,315 | | | | 266,972 | |
| Cantel Medical Corp. | | | 8,235 | | | | 262,285 | |
| Greatbatch, Inc.* | | | 7,490 | | | | 254,885 | |
| Acorda Therapeutics, Inc.* | | | 6,135 | | | | 210,308 | |
| Analogic Corp. | | | 2,528 | | | | 208,914 | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 151 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| S&P SMALLCAP 600® PURE GROWTH FUND | |
| | | Shares | | | Value | |
| | | | | | | |
| HealthStream, Inc.* | | | 5,510 | | | $ | 208,719 | |
| Impax Laboratories, Inc.* | | | 9,250 | | | | 189,718 | |
| Cyberonics, Inc.* | | | 3,571 | | | | 181,193 | |
| Hanger, Inc.* | | | 5,080 | | | | 171,501 | |
| Cambrex Corp.* | | | 12,455 | | | | 164,406 | |
| Questcor Pharmaceuticals, Inc. | | | 2,696 | | | | 156,368 | |
| Air Methods Corp. | | | 3,317 | | | | 141,304 | |
| Abaxis, Inc. | | | 3,270 | | | | 137,667 | |
| Spectrum Pharmaceuticals, Inc. | | | 15,611 | | | | 130,976 | |
| ICU Medical, Inc.* | | | 1,790 | | | | 121,594 | |
| Arqule, Inc.* | | | 40,819 | | | | 95,108 | |
| Neogen Corp.* | | | 1,558 | | | | 94,602 | |
| Landauer, Inc. | | | 1,256 | | | | 64,370 | |
| Total Health Care | | | | | | | 5,396,433 | |
| INDUSTRIALS - 7.3% | | | | | | | | |
| On Assignment, Inc.* | | | 18,910 | | | | 624,031 | |
| Standex International Corp. | | | 7,057 | | | | 419,186 | |
| Lydall, Inc.* | | | 17,153 | | | | 294,517 | |
| Toro Co. | | | 5,030 | | | | 273,380 | |
| Allegiant Travel Co. — Class A | | | 2,401 | | | | 252,969 | |
| Old Dominion Freight Line, Inc.* | | | 5,240 | | | | 240,988 | |
| Lindsay Corp. | | | 2,503 | | | | 204,295 | |
| AZZ, Inc. | | | 4,405 | | | | 184,393 | |
| Healthcare Services Group, Inc. | | | 4,620 | | | | 119,011 | |
| Quanex Building Products Corp. | | | 6,280 | | | | 118,252 | |
| Franklin Electric Company, Inc. | | | 2,584 | | | | 101,810 | |
| Total Industrials | | | | | | | 2,832,832 | |
| MATERIALS - 4.1% | | | | | | | | |
| PolyOne Corp. | | | 11,230 | | | | 344,873 | |
| SunCoke Energy, Inc.* | | | 14,159 | | | | 240,703 | |
| American Vanguard Corp. | | | 7,310 | | | | 196,785 | |
| HB Fuller Co. | | | 3,910 | | | | 176,693 | |
| Deltic Timber Corp. | | | 2,529 | | | | 164,739 | |
| Quaker Chemical Corp. | | | 2,245 | | | | 163,997 | |
| Texas Industries, Inc.* | | | 1,670 | | | | 110,738 | |
| Headwaters, Inc.* | | | 11,920 | | | | 107,161 | |
| Globe Specialty Metals, Inc. | | | 5,290 | | | | 81,519 | |
| Total Materials | | | | | | | 1,587,208 | |
| CONSUMER STAPLES - 3.8% | | | | | | | | |
| Prestige Brands Holdings, Inc.* | | | 15,108 | | | | 455,054 | |
| Darling International, Inc.* | | | 17,153 | | | | 362,957 | |
| Medifast, Inc.* | | | 9,562 | | | | 257,122 | |
| Hain Celestial Group, Inc.* | | | 3,092 | | | | 238,455 | |
| Inter Parfums, Inc. | | | 5,000 | | | | 149,950 | |
| Total Consumer Staples | | | | | | | 1,463,538 | |
| ENERGY - 2.8% | | | | | | | | |
| Geospace Technologies Corp.* | | | 5,620 | | | | 473,766 | |
| Northern Oil and Gas, Inc.* | | | 21,360 | | | | 308,224 | |
| Gulfport Energy Corp.* | | | 4,640 | | | | 298,538 | |
| Total Energy | | | | | | | 1,080,528 | |
| Total Common Stocks | | | | | | | | |
| (Cost $32,172,535) | | | | | | | 38,607,081 | |
| | | Face | | | | |
| | | Amount | | | | |
| REPURCHASE AGREEMENTS††,2 - 0.7% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 211,842 | | | | 211,842 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 23,911 | | | | 23,911 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 18,659 | | | | 18,659 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $254,412) | | | | | | | 254,412 | |
| | | | | | | | | |
| SECURITIES LENDING COLLATERAL††,3 - 1.2% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 251,150 | | | | 251,150 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 234,514 | | | | 234,514 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $485,664) | | | | | | | 485,664 | |
| Total Investments - 101.1% | | | | | | | | |
| (Cost $32,912,611) | | | | | | $ | 39,347,157 | |
| Other Assets & Liabilities, net - (1.1)% | | | | | | | (446,416 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 38,900,741 | |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | Repurchase Agreements — See Note 5. |
| 3 | Securities lending collateral — See Note 11. |
| | REIT — Real Estate Investment Trust |
| 152 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P SMALLCAP 600® PURE GROWTH FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| |
| Assets: | | | | |
| Investments, at value - including $469,156 of securities loaned | | | | |
| (cost $32,172,535) | | $ | 38,607,081 | |
| Repurchase agreements, at value | | | | |
| (cost $740,076) | | | 740,076 | |
| Total investments | | | | |
| (cost $32,912,611) | | | 39,347,157 | |
| Receivables: | | | | |
| Fund shares sold | | | 309,618 | |
| Dividends | | | 8,550 | |
| Interest | | | 4,125 | |
| Total assets | | | 39,669,450 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 485,664 | |
| Fund shares redeemed | | | 190,068 | |
| Management fees | | | 39,417 | |
| Distribution and service fees | | | 15,720 | |
| Transfer agent and administrative fees | | | 13,139 | |
| Portfolio accounting fees | | | 5,256 | |
| Miscellaneous | | | 19,445 | |
| Total liabilities | | | 768,709 | |
| Net assets | | $ | 38,900,741 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 41,879,863 | |
| Accumulated net investment loss | | | (246,749 | ) |
| Accumulated net realized loss on investments | | | (9,166,919 | ) |
| Net unrealized appreciation on investments | | | 6,434,546 | |
| Net assets | | $ | 38,900,741 | |
| A-Class: | | | | |
| Net assets | | $ | 1,531,355 | |
| Capital shares outstanding | | | 31,540 | |
| Net asset value per share | | $ | 48.55 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 50.97 | |
| C-Class: | | | | |
| Net assets | | $ | 4,720,939 | |
| Capital shares outstanding | | | 104,321 | |
| Net asset value per share | | $ | 45.25 | |
| H-Class: | | | | |
| Net assets | | $ | 32,648,447 | |
| Capital shares outstanding | | | 672,543 | |
| Net asset value per share | | $ | 48.54 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| |
| Investment Income: | | | |
| Dividends | | $ | 68,090 | |
| Income from securities lending, net | | | 8,764 | |
| Interest | | | 19 | |
| Total investment income | | | 76,873 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 123,811 | |
| Transfer agent and administrative fees | | | 41,271 | |
| Distribution and service fees: | | | | |
| A-Class | | | 1,584 | |
| C-Class | | | 18,138 | |
| H-Class | | | 35,152 | |
| Portfolio accounting fees | | | 16,508 | |
| Custodian fees | | | 2,048 | |
| Trustees’ fees* | | | 832 | |
| Line of credit fees | | | 64 | |
| Miscellaneous | | | 25,404 | |
| Total expenses | | | 264,812 | |
| Net investment loss | | | (187,939 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 884,910 | |
| Net realized gain | | | 884,910 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 4,429,216 | |
| Net change in unrealized appreciation (depreciation) | | | 4,429,216 | |
| Net realized and unrealized gain | | | 5,314,126 | |
| Net increase in net assets resulting from operations | | $ | 5,126,187 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 153 |
| S&P SMALLCAP 600® PURE GROWTH FUND |
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (187,939 | ) | | $ | (147,248 | ) |
| Net realized gain on investments | | | 884,910 | | | | 3,739,856 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 4,429,216 | | | | (3,270,046 | ) |
| Net increase in net assets resulting from operations | | | 5,126,187 | | | | 322,562 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 695,986 | | | | 262,159 | |
| C-Class | | | 1,881,049 | | | | 3,152,967 | |
| H-Class | | | 140,926,644 | | | | 115,243,662 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (356,920 | ) | | | (376,615 | ) |
| C-Class | | | (809,040 | ) | | | (2,707,371 | ) |
| H-Class | | | (118,524,631 | ) | | | (138,735,744 | ) |
| Net increase (decrease) from capital share transactions | | | 23,813,088 | | | | (23,160,942 | ) |
| Net increase (decrease) in net assets | | | 28,939,275 | | | | (22,838,380 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 9,961,466 | | | | 32,799,846 | |
| End of period | | $ | 38,900,741 | | | $ | 9,961,466 | |
| Accumulated net investment loss at end of period | | $ | (246,749 | ) | | $ | (58,810 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 15,594 | | | | 6,970 | |
| C-Class | | | 44,532 | | | | 85,398 | |
| H-Class | | | 3,090,999 | | | | 3,009,338 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (7,773 | ) | | | (10,058 | ) |
| C-Class | | | (19,771 | ) | | | (77,582 | ) |
| H-Class | | | (2,557,807 | ) | | | (3,639,339 | ) |
| Net increase (decrease) in shares | | | 565,774 | | | | (625,273 | ) |
| 154 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| S&P SMALLCAP 600® PURE GROWTH FUND |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 41.94 | | | $ | 37.97 | | | $ | 36.06 | | | $ | 28.49 | | | $ | 16.93 | | | $ | 27.43 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.21 | ) | | | (.12 | ) | | | (.35 | ) | | | (.34 | ) | | | (.28 | ) | | | (.19 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 6.82 | | | | 4.09 | | | | 2.26 | | | | 7.91 | | | | 11.84 | | | | (10.31 | ) |
| Total from investment operations | | | 6.61 | | | | 3.97 | | | | 1.91 | | | | 7.57 | | | | 11.56 | | | | (10.50 | ) |
| Net asset value, end of period | | $ | 48.55 | | | $ | 41.94 | | | $ | 37.97 | | | $ | 36.06 | | | $ | 28.49 | | | $ | 16.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 15.76 | % | | | 10.46 | % | | | 5.30 | % | | | 26.57 | % | | | 68.28 | % | | | (33.28 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,531 | | | $ | 995 | | | $ | 1,018 | | | $ | 2,115 | | | $ | 750 | | | $ | 117 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.93 | %) | | | (0.31 | %) | | | (1.00 | %) | | | (1.15 | %) | | | (1.15 | %) | | | (0.73 | %) |
| Total expenses | | | 1.53 | % | | | 1.51 | % | | | 1.52 | % | | | 1.54 | % | | | 1.54 | % | | | 1.54 | % |
| Portfolio turnover rate | | | 362 | % | | | 645 | % | | | 500 | % | | | 732 | % | | | 1,476 | % | | | 1,066 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 39.24 | | | $ | 35.79 | | | $ | 34.25 | | | $ | 27.25 | | | $ | 16.32 | | | $ | 26.65 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.35 | ) | | | (.42 | ) | | | (.57 | ) | | | (.54 | ) | | | (.42 | ) | | | (.32 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 6.36 | | | | 3.87 | | | | 2.11 | | | | 7.54 | | | | 11.35 | | | | (10.01 | ) |
| Total from investment operations | | | 6.01 | | | | 3.45 | | | | 1.54 | | | | 7.00 | | | | 10.93 | | | | (10.33 | ) |
| Net asset value, end of period | | $ | 45.25 | | | $ | 39.24 | | | $ | 35.79 | | | $ | 34.25 | | | $ | 27.25 | | | $ | 16.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 15.32 | % | | | 9.64 | % | | | 4.50 | % | | | 25.69 | % | | | 66.97 | % | | | (38.76 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,721 | | | $ | 3,122 | | | $ | 2,568 | | | $ | 3,072 | | | $ | 1,658 | | | $ | 369 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.67 | %) | | | (1.17 | %) | | | (1.71 | %) | | | (1.80 | %) | | | (1.82 | %) | | | (1.28 | %) |
| Total expenses | | | 2.28 | % | | | 2.26 | % | | | 2.26 | % | | | 2.29 | % | | | 2.28 | % | | | 2.29 | % |
| Portfolio turnover rate | | | 362 | % | | | 645 | % | | | 500 | % | | | 732 | % | | | 1,476 | % | | | 1,066 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 155 |
| S&P smallcap 600® PURE growth FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 41.94 | | | $ | 37.97 | | | $ | 36.07 | | | $ | 28.48 | | | $ | 16.94 | | | $ | 27.45 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.25 | ) | | | (.31 | ) | | | (.39 | ) | | | (.34 | ) | | | (.25 | ) | | | (.13 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 6.85 | | | | 4.28 | | | | 2.29 | | | | 7.93 | | | | 11.79 | | | | (10.38 | ) |
| Total from investment operations | | | 6.60 | | | | 3.97 | | | | 1.90 | | | | 7.59 | | | | 11.54 | | | | (10.51 | ) |
| Net asset value, end of period | | $ | 48.54 | | | $ | 41.94 | | | $ | 37.97 | | | $ | 36.07 | | | $ | 28.48 | | | $ | 16.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 15.74 | % | | | 10.46 | % | | | 5.27 | % | | | 26.65 | % | | | 68.12 | % | | | (38.29 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 32,648 | | | $ | 5,844 | | | $ | 29,214 | | | $ | 92,084 | | | $ | 10,072 | | | $ | 9,795 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.08 | %) | | | (0.81 | %) | | | (1.10 | %) | | | (1.07 | %) | | | (1.05 | %) | | | (0.55 | %) |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.52 | % | | | 1.55 | % | | | 1.53 | % | | | 1.56 | % |
| Portfolio turnover rate | | | 362 | % | | | 645 | % | | | 500 | % | | | 732 | % | | | 1,476 | % | | | 1,066 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 156 | the RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
S&P SMALLCAP 600® PURE VALUE FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a benchmark for small-cap value securities on a daily basis. The Fund’s current benchmark is the S&P SmallCap 600® Pure Value Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | September 1, 2004 |
| C-Class | | February 20, 2004 |
| H-Class | | February 20, 2004 |
| Ten Largest Holdings (% of Total Net Assets) | | | |
| Arkansas Best Corp. | | | 2.7 | % |
| VOXX International Corp. — Class A | | | 2.4 | % |
| Boyd Gaming Corp. | | | 2.1 | % |
| AAR Corp. | | | 1.9 | % |
| SYNNEX Corp. | | | 1.7 | % |
| Amedisys, Inc. | | | 1.7 | % |
| Kelly Services, Inc. — Class A | | | 1.5 | % |
| Olympic Steel, Inc. | | | 1.5 | % |
| OM Group, Inc. | | | 1.4 | % |
| GT Advanced Technologies, Inc. | | | 1.4 | % |
| Top Ten Total | | | 18.3 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
| the RYDEX FUNDS SEMI-ANNUAL REPORT | 157 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| S&P SMALLCAP 600® PURE value FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 99.8% | | | | | | | | |
| | | | | | | | | |
| Consumer Discretionary - 24.8% | | | | | | | | |
| VOXX International Corp. — Class A* | | | 37,391 | | | $ | 512,257 | |
| Boyd Gaming Corp.* | | | 31,742 | | | | 449,148 | |
| OfficeMax, Inc. | | | 22,217 | | | | 284,155 | |
| Quiksilver, Inc.* | | | 35,611 | | | | 250,345 | |
| Corinthian Colleges, Inc.*,1 | | | 105,474 | | | | 230,987 | |
| Stein Mart, Inc. | | | 16,237 | | | | 222,771 | |
| Kirkland’s, Inc.* | | | 11,656 | | | | 214,937 | |
| Live Nation Entertainment, Inc.* | | | 11,481 | | | | 212,973 | |
| Pep Boys-Manny Moe & Jack* | | | 16,313 | | | | 203,422 | |
| Fred’s, Inc. — Class A | | | 12,375 | | | | 193,669 | |
| Universal Electronics, Inc.* | | | 5,217 | | | | 187,969 | |
| ITT Educational Services, Inc.*,1 | | | 6,022 | | | | 186,682 | |
| MarineMax, Inc.* | | | 14,355 | | | | 175,131 | |
| Group 1 Automotive, Inc. | | | 2,247 | | | | 174,547 | |
| Spartan Motors, Inc. | | | 25,444 | | | | 154,445 | |
| Barnes & Noble, Inc.* | | | 11,180 | | | | 144,669 | |
| Sonic Automotive, Inc. — Class A | | | 6,000 | | | | 142,800 | |
| Perry Ellis International, Inc. | | | 7,427 | | | | 139,925 | |
| Standard Motor Products, Inc. | | | 4,330 | | | | 139,253 | |
| Ruby Tuesday, Inc.* | | | 16,549 | | | | 124,118 | |
| Red Robin Gourmet Burgers, Inc.* | | | 1,732 | | | | 123,145 | |
| Big 5 Sporting Goods Corp. | | | 6,650 | | | | 106,932 | |
| EW Scripps Co. — Class A* | | | 5,585 | | | | 102,485 | |
| Lincoln Educational Services Corp. | | | 20,387 | | | | 93,984 | |
| Blyth, Inc.1 | | | 6,775 | | | | 93,698 | |
| Monarch Casino & Resort, Inc.* | | | 4,560 | | | | 86,549 | |
| Marcus Corp. | | | 5,886 | | | | 85,524 | |
| Genesco, Inc.* | | | 1,160 | | | | 76,073 | |
| Career Education Corp.* | | | 22,577 | | | | 62,313 | |
| Biglari Holdings, Inc.* | | | 140 | | | | 57,774 | |
| Men’s Wearhouse, Inc. | | | 1,490 | | | | 50,735 | |
| JAKKS Pacific, Inc. | | | 8,093 | | | | 36,338 | |
| Total Consumer Discretionary | | | | | | | 5,319,753 | |
| INDUSTRIALS - 19.9% | | | | | | | | |
| Arkansas Best Corp. | | | 22,093 | | | | 567,127 | |
| AAR Corp. | | | 15,058 | | | | 411,535 | |
| Kelly Services, Inc. — Class A | | | 16,232 | | | | 316,036 | |
| SkyWest, Inc. | | | 17,451 | | | | 253,389 | |
| ABM Industries, Inc. | | | 7,387 | | | | 196,642 | |
| Consolidated Graphics, Inc.* | | | 3,358 | | | | 188,249 | |
| Griffon Corp. | | | 14,938 | | | | 187,322 | |
| United Stationers, Inc. | | | 4,264 | | | | 185,484 | |
| Comfort Systems USA, Inc. | | | 9,704 | | | | 163,124 | |
| Orbital Sciences Corp.* | | | 7,010 | | | | 148,472 | |
| CDI Corp. | | | 9,100 | | | | 139,321 | |
| Heidrick & Struggles International, Inc. | | | 6,617 | | | | 126,120 | |
| TrueBlue, Inc.* | | | 5,220 | | | | 125,332 | |
| Navigant Consulting, Inc.* | | | 7,930 | | | | 122,598 | |
| Universal Forest Products, Inc. | | | 2,799 | | | | 117,838 | |
| Atlas Air Worldwide Holdings, Inc.* | | | 2,470 | | | | 113,892 | |
| EMCOR Group, Inc. | | | 2,843 | | | | 111,247 | |
| Moog, Inc. — Class A* | | | 1,748 | | | | 102,555 | |
| Viad Corp. | | | 4,048 | | | | 100,998 | |
| Curtiss-Wright Corp. | | | 2,060 | | | | 96,738 | |
| Dycom Industries, Inc.* | | | 3,360 | | | | 94,046 | |
| Gibraltar Industries, Inc.* | | | 6,333 | | | | 90,309 | |
| Astec Industries, Inc. | | | 1,990 | | | | 71,560 | |
| Korn/Ferry International* | | | 3,300 | | | | 70,620 | |
| Insperity, Inc. | | | 1,861 | | | | 69,974 | |
| Powell Industries, Inc.* | | | 957 | | | | 58,655 | |
| Briggs & Stratton Corp. | | | 1,983 | | | | 39,898 | |
| Total Industrials | | | | | | | 4,269,081 | |
| INFORMATION TECHNOLOGY - 17.4% | | | | | | | | |
| SYNNEX Corp.* | | | 5,963 | | | | 366,426 | |
| GT Advanced Technologies, Inc.*,1 | | | 33,999 | | | | 289,331 | |
| Benchmark Electronics, Inc.* | | | 10,591 | | | | 242,429 | |
| Methode Electronics, Inc. | | | 8,140 | | | | 227,920 | |
| CIBER, Inc.* | | | 64,846 | | | | 213,992 | |
| CACI International, Inc. — Class A* | | | 2,910 | | | | 201,110 | |
| Plexus Corp.* | | | 5,309 | | | | 197,495 | |
| Insight Enterprises, Inc.* | | | 10,190 | | | | 192,795 | |
| ScanSource, Inc.* | | | 5,568 | | | | 192,653 | |
| Super Micro Computer, Inc.* | | | 12,671 | | | | 171,565 | |
| CTS Corp. | | | 9,314 | | | | 146,882 | |
| Anixter International, Inc.* | | | 1,634 | | | | 143,236 | |
| Brooks Automation, Inc. | | | 14,515 | | | | 135,134 | |
| QuinStreet, Inc.* | | | 13,401 | | | | 126,640 | |
| United Online, Inc. | | | 15,597 | | | | 124,464 | |
| Sykes Enterprises, Inc.* | | | 5,496 | | | | 98,433 | |
| Mercury Systems, Inc.* | | | 9,204 | | | | 91,948 | |
| Bel Fuse, Inc. — Class B | | | 4,937 | | | | 86,102 | |
| Digital River, Inc.* | | | 4,545 | | | | 81,219 | |
| Newport Corp.* | | | 5,163 | | | | 80,698 | |
| Rubicon Technology, Inc.*,1 | | | 6,100 | | | | 73,871 | |
| QLogic Corp.* | | | 4,920 | | | | 53,825 | |
| Pericom Semiconductor Corp.* | | | 6,809 | | | | 53,110 | |
| Cohu, Inc. | | | 4,203 | | | | 45,855 | |
| Comtech Telecommunications Corp. | | | 1,720 | | | | 41,830 | |
| Digi International, Inc.* | | | 4,123 | | | | 41,271 | |
| Total Information Technology | | | | | | | 3,720,234 | |
| FINANCIALS - 10.5% | | | | | | | | |
| Stewart Information Services Corp. | | | 6,779 | | | | 216,859 | |
| United Fire Group, Inc. | | | 6,882 | | | | 209,695 | |
| Horace Mann Educators Corp. | | | 7,102 | | | | 201,555 | |
| Meadowbrook Insurance Group, Inc. | | | 29,880 | | | | 194,220 | |
| First BanCorp* | | | 22,724 | | | | 129,072 | |
| Selective Insurance Group, Inc. | | | 4,935 | | | | 120,908 | |
| Infinity Property & Casualty Corp. | | | 1,845 | | | | 119,187 | |
| Cash America International, Inc. | | | 2,340 | | | | 105,955 | |
| Bank Mutual Corp. | | | 15,625 | | | | 97,969 | |
| Navigators Group, Inc.* | | | 1,670 | | | | 96,476 | |
| Umpqua Holdings Corp. | | | 5,840 | | | | 94,725 | |
| SWS Group, Inc.* | | | 16,518 | | | | 92,170 | |
| Interactive Brokers Group, Inc. — Class A | | | 4,880 | | | | 91,598 | |
| Calamos Asset Management, Inc. — Class A | | | 9,065 | | | | 90,559 | |
| Tower Group International Ltd. | | | 12,733 | | | | 89,131 | |
| Safety Insurance Group, Inc. | | | 1,432 | | | | 75,853 | |
| Stifel Financial Corp.* | | | 1,540 | | | | 63,479 | |
| 158 | the RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| S&P SMALLCAP 600® PURE value FUND |
| | | Shares | | | Value | |
| | | | | | | |
| Provident Financial Services, Inc. | | | 3,710 | | | $ | 60,139 | |
| EZCORP, Inc. — Class A* | | | 3,010 | | | | 50,809 | |
| Old National Bancorp | | | 3,220 | | | | 45,724 | |
| Total Financials | | | | | | | 2,246,083 | |
| HEALTH CARE - 8.6% | | | | | | | | |
| Amedisys, Inc.* | | | 20,627 | | | | 355,197 | |
| Kindred Healthcare, Inc. | | | 15,363 | | | | 206,325 | |
| Invacare Corp. | | | 10,644 | | | | 183,822 | |
| Gentiva Health Services, Inc.* | | | 13,949 | | | | 167,946 | |
| PharMerica Corp.* | | | 12,235 | | | | 162,358 | |
| Almost Family, Inc. | | | 6,552 | | | | 127,305 | |
| Centene Corp.* | | | 1,760 | | | | 112,570 | |
| Magellan Health Services, Inc.* | | | 1,820 | | | | 109,127 | |
| Cross Country Healthcare, Inc.* | | | 15,881 | | | | 96,239 | |
| Molina Healthcare, Inc.* | | | 2,660 | | | | 94,696 | |
| LHC Group, Inc.* | | | 3,822 | | | | 89,664 | |
| Affymetrix, Inc.* | | | 11,606 | | | | 71,957 | |
| Ensign Group, Inc. | | | 1,470 | | | | 60,432 | |
| Total Health Care | | | | | | | 1,837,638 | |
| MATERIALS - 7.4% | | | | | | | | |
| Olympic Steel, Inc. | | | 11,336 | | | | 314,914 | |
| OM Group, Inc.* | | | 9,073 | | | | 306,485 | |
| Materion Corp. | | | 7,247 | | | | 232,339 | |
| AM Castle & Co.* | | | 10,000 | | | | 161,000 | |
| PH Glatfelter Co. | | | 5,430 | | | | 146,990 | |
| Zep, Inc. | | | 6,632 | | | | 107,836 | |
| A. Schulman, Inc. | | | 3,613 | | | | 106,439 | |
| Century Aluminum Co.* | | | 9,625 | | | | 77,481 | |
| Clearwater Paper Corp.* | | | 1,350 | | | | 64,490 | |
| Kaiser Aluminum Corp. | | | 870 | | | | 61,988 | |
| Total Materials | | | | | | | 1,579,962 | |
| CONSUMER STAPLES - 5.6% | | | | | | | | |
| Spartan Stores, Inc. | | | 12,229 | | | | 269,771 | |
| Andersons, Inc. | | | 3,745 | | | | 261,776 | |
| Seneca Foods Corp. — Class A* | | | 6,098 | | | | 183,489 | |
| Alliance One International, Inc.* | | | 58,541 | | | | 170,354 | |
| Casey’s General Stores, Inc. | | | 1,713 | | | | 125,906 | |
| Nash Finch Co. | | | 4,051 | | | | 106,987 | |
| Central Garden and Pet Co. — Class A* | | | 12,154 | | | | 83,255 | |
| Total Consumer Staples | | | | | | | 1,201,538 | |
| ENERGY - 4.6% | | | | | | | | |
| Matrix Service Co.* | | | 10,175 | | | | 199,633 | |
| Basic Energy Services, Inc.* | | | 14,911 | | | | 188,475 | |
| Pioneer Energy Services Corp.* | | | 18,610 | | | | 139,761 | |
| TETRA Technologies, Inc.* | | | 7,200 | | | | 90,216 | |
| Stone Energy Corp.* | | | 2,450 | | | | 79,453 | |
| Era Group, Inc.* | | | 2,511 | | | | 68,249 | |
| Swift Energy Co.* | | | 5,711 | | | | 65,220 | |
| SEACOR Holdings, Inc. | | | 715 | | | | 64,665 | |
| Cloud Peak Energy, Inc.* | | | 3,400 | | | | 49,878 | |
| Gulf Island Fabrication, Inc. | | | 1,580 | | | | 38,726 | |
| Total Energy | | | | | | | 984,276 | |
| TELECOMMUNICATION SERVICES - 0.7% | | | | | | | | |
| USA Mobility, Inc. | | | 6,510 | | | | 92,181 | |
| Cbeyond, Inc.* | | | 7,570 | | | | 48,524 | |
| Total Telecommunication Services | | | | | | | 140,705 | |
| UTILITIES - 0.3% | | | | | | | | |
| Avista Corp. | | | 2,074 | | | | 54,754 | |
| Total Common Stocks | | | | | | | | |
| (Cost $14,134,555) | | | | | | | 21,354,024 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | amount | | | | | |
| REPURCHASE AGREEMENTS††,2 - 0.3% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 50,473 | | | | 50,473 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 5,697 | | | | 5,697 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 4,446 | | | | 4,446 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $60,616) | | | | | | | 60,616 | |
| SECURITIES LENDING COLLATERAL††,3 - 2.0% | | | | | | | | |
| Repurchase Agreements | | | | | | | | |
| HSBC Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.06% | | | | | | | | |
| due 10/01/13 | | | 220,382 | | | | 220,382 | |
| RBS Securities, Inc. | | | | | | | | |
| issued 09/30/13 at 0.07% | | | | | | | | |
| due 10/01/13 | | | 205,783 | | | | 205,783 | |
| Total Securities Lending Collateral | | | | | | | | |
| (Cost $426,165) | | | | | | | 426,165 | |
| Total Investments - 102.1% | | | | | | | | |
| (Cost $14,621,336) | | | | | | $ | 21,840,805 | |
| Other Assets & Liabilities, net - (2.1)% | | | | | | | (458,832 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 21,381,973 | |
| * | | Non-income producing security. |
| † | | Value determined based on Level 1 inputs — See Note 4. |
| †† | | Value determined based on Level 2 inputs — See Note 4. |
| 1 | | All or portion of this security is on loan at September 30, 2013 — See Note 11. |
| 2 | | Repurchase Agreements — See Note 5. |
| 3 | | Securities lending collateral — See Note 11. |
| See Notes to Financial Statements. | the RYDEX FUNDS SEMI-ANNUAL REPORT | 159 |
| S&P SMALLCAP 600® PURE value FUND |
| STATEMENT OF ASSETS | | | |
| AND LIABILITIES (Unaudited) | | | |
| September 30, 2013 | | | | |
| | | | | |
| Assets: | | | | |
| Investments, at value - including $416,632 of securities loaned | | | | |
| (cost $14,134,555) | | $ | 21,354,024 | |
| Repurchase agreements, at value | | | | |
| (cost $486,781) | | | 486,781 | |
| Total investments | | | | |
| (cost $14,621,336) | | | 21,840,805 | |
| Receivables: | | | | |
| Fund shares sold | | | 14,715 | |
| Dividends | | | 5,746 | |
| Interest | | | 1,136 | |
| Total assets | | | 21,862,402 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Upon return of securities loaned | | | 426,165 | |
| Management fees | | | 14,686 | |
| Fund shares redeemed | | | 8,999 | |
| Distribution and service fees | | | 7,787 | |
| Transfer agent and administrative fees | | | 4,895 | |
| Portfolio accounting fees | | | 1,958 | |
| Miscellaneous | | | 15,939 | |
| Total liabilities | | | 480,429 | |
| Net assets | | $ | 21,381,973 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 49,198,734 | |
| Accumulated net investment loss | | | (110,124 | ) |
| Accumulated net realized loss on investments | | | (34,926,106 | ) |
| Net unrealized appreciation on investments | | | 7,219,469 | |
| Net assets | | $ | 21,381,973 | |
| A-Class: | | | | |
| Net assets | | $ | 1,732,627 | |
| Capital shares outstanding | | | 76,344 | |
| Net asset value per share | | $ | 22.69 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 23.82 | |
| C-Class: | | | | |
| Net assets | | $ | 5,313,055 | |
| Capital shares outstanding | | | 262,347 | |
| Net asset value per share | | $ | 20.25 | |
| H-Class: | | | | |
| Net assets | | $ | 14,336,291 | |
| Capital shares outstanding | | | 634,371 | |
| Net asset value per share | | $ | 22.60 | |
| STATEMENT OF | | | |
| OPERATIONS (Unaudited) | | | |
| Period Ended September 30, 2013 | | | | |
| | | | | |
| Investment Income: | | | | |
| Dividends | | $ | 214,019 | |
| Income from securities lending, net | | | 10,099 | |
| Interest | | | 28 | |
| Total investment income | | | 224,146 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 126,803 | |
| Transfer agent and administrative fees | | | 42,268 | |
| Distribution and service fees: | | | | |
| A-Class | | | 2,010 | |
| C-Class | | | 22,337 | |
| H-Class | | | 34,673 | |
| Portfolio accounting fees | | | 16,907 | |
| Custodian fees | | | 2,008 | |
| Trustees’ fees* | | | 1,271 | |
| Line of credit fees | | | 50 | |
| Miscellaneous | | | 26,479 | |
| Total expenses | | | 274,806 | |
| Net investment loss | | | (50,660 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (426,670 | ) |
| Net realized loss | | | (426,670 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 2,743,437 | |
| Net change in unrealized appreciation (depreciation) | | | 2,743,437 | |
| Net realized and unrealized gain | | | 2,316,767 | |
| Net increase in net assets resulting | | | | |
| from operations | | $ | 2,266,107 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| 160 | the RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| S&P SMALLCAP 600® PURE value FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (50,660 | ) | | $ | (80,501 | ) |
| Net realized gain (loss) on investments | | | (426,670 | ) | | | 1,767,052 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 2,743,437 | | | | (1,845,358 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 2,266,107 | | | | (158,807 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 763,128 | | | | 1,084,422 | |
| C-Class | | | 2,037,451 | | | | 3,744,708 | |
| H-Class | | | 87,114,189 | | | | 180,897,767 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (796,242 | ) | | | (622,298 | ) |
| C-Class | | | (1,287,163 | ) | | | (2,186,008 | ) |
| H-Class | | | (104,941,577 | ) | | | (173,747,207 | ) |
| Net increase (decrease) from capital share transactions | | | (17,110,214 | ) | | | 9,171,384 | |
| Net increase (decrease) in net assets | | | (14,844,107 | ) | | | 9,012,577 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 36,226,080 | | | | 27,213,503 | |
| End of period | | $ | 21,381,973 | | | $ | 36,226,080 | |
| Accumulated net investment loss at end of period | | $ | (110,124 | ) | | $ | (59,464 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 35,402 | | | | 61,434 | |
| C-Class | | | 106,540 | | | | 239,487 | |
| H-Class | | | 4,063,522 | | | | 10,656,634 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (38,372 | ) | | | (38,446 | ) |
| C-Class | | | (68,679 | ) | | | (141,911 | ) |
| H-Class | | | (5,007,801 | ) | | | (10,507,170 | ) |
| Net increase (decrease) in shares | | | (909,388 | ) | | | 270,028 | |
| See Notes to Financial Statements. | the RYDEX FUNDS SEMI-ANNUAL REPORT | 161 |
| S&P SMALLCAP 600® PURE 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.55 | | | $ | 17.07 | | | $ | 17.42 | | | $ | 19.60 | | | $ | 11.08 | | | $ | 26.56 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.04 | ) | | | (.01 | ) | | | (.12 | ) | | | (.13 | ) | | | (.13 | ) | | | .50 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.18 | | | | 2.49 | | | | (.23 | ) | | | 1.20 | | | | 15.44 | | | | (15.61 | ) |
| Total from investment operations | | | 3.14 | | | | 2.48 | | | | (.35 | ) | | | 1.07 | | | | 15.31 | | | | (15.11 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.03 | ) | | | (.37 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | (3.25 | ) | | | (6.76 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | (3.25 | ) | | | (6.79 | ) | | | (.37 | ) |
| Net asset value, end of period | | $ | 22.69 | | | $ | 19.55 | | | $ | 17.07 | | | $ | 17.42 | | | $ | 19.60 | | | $ | 11.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 16.06 | % | | | 14.53 | % | | | (2.01 | %) | | | 6.98 | % | | | 150.09 | % | | | (57.21 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,733 | | | $ | 1,551 | | | $ | 961 | | | $ | 8,845 | | | $ | 5,529 | | | $ | 78 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.37 | %) | | | (0.08 | %) | | | (0.71 | %) | | | (0.73 | %) | | | (0.62 | %) | | | 2.04 | % |
| Total expenses | | | 1.53 | % | | | 1.51 | % | | | 1.53 | % | | | 1.53 | % | | | 1.53 | % | | | 1.54 | % |
| Portfolio turnover rate | | | 208 | % | | | 655 | % | | | 744 | % | | | 692 | % | | | 443 | % | | | 878 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 17.51 | | | $ | 15.40 | | | $ | 15.85 | | | $ | 18.27 | | | $ | 10.62 | | | $ | 25.71 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.10 | ) | | | (.13 | ) | | | (.20 | ) | | | (.23 | ) | | | (.27 | ) | | | .04 | |
| Net gain (loss) on investments (realized and unrealized) | | | 2.84 | | | | 2.24 | | | | (.25 | ) | | | 1.06 | | | | 14.71 | | | | (14.76 | ) |
| Total from investment operations | | | 2.74 | | | | 2.11 | | | | (.45 | ) | | | .83 | | | | 14.44 | | | | (14.72 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.03 | ) | | | (.37 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | (3.25 | ) | | | (6.76 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | (3.25 | ) | | | (6.79 | ) | | | (.37 | ) |
| Net asset value, end of period | | $ | 20.25 | | | $ | 17.51 | | | $ | 15.40 | | | $ | 15.85 | | | $ | 18.27 | | | $ | 10.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 15.65 | % | | | 13.70 | % | | | (2.84 | %) | | | 6.12 | % | | | 148.23 | % | | | (57.59 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 5,313 | | | $ | 3,932 | | | $ | 1,955 | | | $ | 2,243 | | | $ | 8,999 | | | $ | 691 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (1.06 | %) | | | (0.84 | %) | | | (1.39 | %) | | | (1.37 | %) | | | (1.39 | %) | | | 0.21 | % |
| Total expenses | | | 2.28 | % | | | 2.26 | % | | | 2.26 | % | | | 2.28 | % | | | 2.28 | % | | | 2.32 | % |
| Portfolio turnover rate | | | 208 | % | | | 655 | % | | | 744 | % | | | 692 | % | | | 443 | % | | | 878 | % |
| 162 | the RYDEX FUNDS SEMI-ANNUAL REPORT | See Notes to Financial Statements. |
| S&P SMALLCAP 600® PURE value FUND |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 19.47 | | | $ | 17.00 | | | $ | 17.38 | | | $ | 19.57 | | | $ | 11.07 | | | $ | 26.53 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.02 | ) | | | (.06 | ) | | | (.11 | ) | | | (.11 | ) | | | (.12 | ) | | | .27 | |
| Net gain (loss) on investments (realized and unrealized) | | | 3.15 | | | | 2.53 | | | | (.27 | ) | | | 1.17 | | | | 15.41 | | | | (15.36 | ) |
| Total from investment operations | | | 3.13 | | | | 2.47 | | | | (.38 | ) | | | 1.06 | | | | 15.29 | | | | (15.09 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | (.03 | ) | | | (.37 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | (3.25 | ) | | | (6.76 | ) | | | — | |
| Total distributions | | | — | | | | — | | | | — | | | | (3.25 | ) | | | (6.79 | ) | | | (.37 | ) |
| Net asset value, end of period | | $ | 22.60 | | | $ | 19.47 | | | $ | 17.00 | | | $ | 17.38 | | | $ | 19.57 | | | $ | 11.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 16.08 | % | | | 14.53 | % | | | (2.19 | %) | | | 6.94 | % | | | 150.07 | % | | | (57.20 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 14,336 | | | $ | 30,743 | | | $ | 24,298 | | | $ | 15,980 | | | $ | 216,500 | | | $ | 21,489 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.17 | %) | | | (0.32 | %) | | | (0.69 | %) | | | (0.56 | %) | | | (0.62 | %) | | | 1.40 | % |
| Total expenses | | | 1.53 | % | | | 1.51 | % | | | 1.49 | % | | | 1.54 | % | | | 1.54 | % | | | 1.55 | % |
| Portfolio turnover rate | | | 208 | % | | | 655 | % | | | 744 | % | | | 692 | % | | | 443 | % | | | 878 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| See Notes to Financial Statements. | the RYDEX FUNDS SEMI-ANNUAL REPORT | 163 |
| FUND PROFILE (Unaudited) | September 30, 2013 |
EUROPE 1.25x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of a specific benchmark. The Fund’s current benchmark is 125% of the fair value of the Europe STOXX 50® Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | March 31, 2004 |
| C-Class | | May 10, 2001 |
| H-Class | | May 8, 2000 |
| Ten Largest Holdings (% of Total Net Assets) |
| Nestle S.A. ADR | | | 3.3 | % |
| Novartis AG ADR | | | 3.1 | % |
| HSBC Holdings plc ADR | | | 2.9 | % |
| Vodafone Group plc ADR | | | 2.7 | % |
| Roche Holding AG ADR | | | 2.6 | % |
| Total S.A. ADR | | | 2.1 | % |
| BP plc ADR | | | 2.0 | % |
| GlaxoSmithKline plc ADR | | | 1.9 | % |
| Royal Dutch Shell plc ADR | | | 1.9 | % |
| British American Tobacco plc ADR | | | 1.8 | % |
| Top Ten Total | | | 24.3 | % |
“Ten Largest Holdings” exclude any temporary cash or derivative investments.
INVESTMENT CONCENTRATION
At September 30, 2013, the investment diversification of the Fund by country was as follows:
| Country | | % of Common Stocks | | | Value | |
| Britain | | | 34.1 | % | | $ | 6,120,025 | |
| Switzerland | | | 21.6 | % | | | 3,862,227 | |
| Germany | | | 15.2 | % | | | 2,730,314 | |
| France | | | 10.6 | % | | | 1,894,519 | |
| Netherlands | | | 5.9 | % | | | 1,066,366 | |
| Spain | | | 5.9 | % | | | 1,060,540 | |
| Australia | | | 2.2 | % | | | 398,734 | |
| Belgium | | | 1.8 | % | | | 322,598 | |
| Other | | | 2.7 | % | | | 485,092 | |
| Total Common Stocks | | | 100.0 | % | | $ | 17,940,415 | |
| 164 | the RYDEX FUNDS SEMI-ANNUAL REPORT |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| europe 1.25x strategy FUND |
| | | Shares | | | Value | |
| | | | | | | |
| COMMON STOCKS† - 61.3% | | | | | | | | |
| | | | | | | | | |
| FINANCIALS - 14.0% | | | | | | | | |
| HSBC Holdings plc ADR | | | 15,654 | | | $ | 849,386 | |
| Banco Santander S.A. ADR | | | 55,254 | | | | 451,425 | |
| BNP Paribas S.A. ADR | | | 10,250 | | | | 346,963 | |
| UBS AG | | | 16,504 | | | | 338,662 | |
| Allianz SE ADR | | | 20,642 | | | | 326,556 | |
| Banco Bilbao Vizcaya Argentaria S.A. ADR | | | 28,215 | | | | 315,444 | |
| Lloyds Banking Group plc ADR* | | | 63,161 | | | | 303,804 | |
| Barclays plc ADR | | | 16,106 | | | | 274,446 | |
| ING Groep N.V. ADR* | | | 22,874 | | | | 259,620 | |
| Credit Suisse Group AG ADR | | | 7,672 | | | | 234,380 | |
| Deutsche Bank AG | | | 4,568 | | | | 209,580 | |
| Zurich Insurance Group AG ADR | | | 6,651 | | | | 170,864 | |
| Total Financials | | | | | | | 4,081,130 | |
| HEALTH CARE - 12.2% | | | | | | | | |
| Novartis AG ADR | | | 11,882 | | | | 911,469 | |
| Roche Holding AG ADR | | | 11,484 | | | | 775,515 | |
| GlaxoSmithKline plc ADR | | | 10,908 | | | | 547,254 | |
| Sanofi ADR | | | 10,175 | | | | 515,160 | |
| Bayer AG ADR | | | 3,692 | | | | 435,434 | |
| AstraZeneca plc ADR | | | 7,243 | | | | 376,129 | |
| Total Health Care | | | | | | | 3,560,961 | |
| CONSUMER STAPLES - 10.8% | | | | | | | | |
| Nestle S.A. ADR | | | 13,773 | | | | 958,601 | |
| British American Tobacco plc ADR | | | 5,095 | | | | 535,739 | |
| Diageo plc ADR | | | 3,008 | | | | 382,257 | |
| Anheuser-Busch InBev N.V. ADR | | | 3,252 | | | | 322,598 | |
| Unilever N.V. | | | 6,911 | | | | 260,683 | |
| Reckitt Benckiser Group plc ADR†† | | | 16,043 | | | | 234,860 | |
| Tesco plc ADR | | | 13,353 | | | | 234,479 | |
| Unilever plc ADR | | | 5,911 | | | | 228,046 | |
| Total Consumer Staples | | | | | | | 3,157,263 | |
| ENERGY - 7.9% | | | | | | | | |
| Total S.A. ADR | | | 10,524 | | | | 609,549 | |
| BP plc ADR | | | 13,706 | | | | 576,063 | |
| Royal Dutch Shell plc ADR | | | 8,314 | | | | 546,064 | |
| Eni SpA ADR | | | 6,455 | | | | 297,124 | |
| BG Group plc ADR | | | 14,834 | | | | 282,736 | |
| Total Energy | | | | | | | 2,311,536 | |
| MATERIALS - 4.7% | | | | | | | | |
| BHP Billiton Ltd. ADR | | | 5,996 | | | | 398,734 | |
| BASF SE ADR | | | 4,099 | | | | 393,504 | |
| Rio Tinto plc ADR | | | 7,807 | | | | 380,669 | |
| Air Liquide S.A. ADR | | | 7,302 | | | | 202,850 | |
| Total Materials | | | | | | | 1,375,757 | |
| TELECOMMUNICATION SERVICES - 4.4% | | | | | | | | |
| Vodafone Group plc ADR | | | 22,336 | | | | 785,781 | |
| Telefonica S.A. ADR* | | | 18,971 | | | | 293,671 | |
| Deutsche Telekom AG ADR | | | 14,962 | | | | 218,445 | |
| Total Telecommunication Services | | | | | | | 1,297,897 | |
| INDUSTRIALS - 3.1% | | | | | | | | |
| Siemens AG ADR | | | 3,774 | | | | 454,805 | |
| ABB Ltd. ADR | | | 9,898 | | | | 233,494 | |
| Schneider Electric S.A. ADR | | | 13,033 | | | | 219,997 | |
| Total Industrials | | | | | | | 908,296 | |
| CONSUMER DISCRETIONARY - 2.1% | | | | | | | | |
| Daimler AG ADR†† | | | 4,991 | | | | 389,287 | |
| Cie Financiere Richemont S.A. ADR | | | 24,166 | | | | 239,243 | |
| Total Consumer Discretionary | | | | | | | 628,530 | |
| INFORMATION TECHNOLOGY - 1.7% | | | | | | | | |
| SAP AG ADR | | | 4,095 | | | | 302,702 | |
| Telefonaktiebolaget LM | | | | | | | | |
| Ericsson — Class B ADR | | | 14,080 | | | | 187,968 | |
| Total Information Technology | | | | | | | 490,670 | |
| UTILITIES - 0.4% | | | | | | | | |
| National Grid plc ADR | | | 2,174 | | | | 128,375 | |
| Total Common Stocks | | | | | | | | |
| (Cost $17,058,150) | | | | | | | 17,940,415 | |
| | | | | | | | | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENTS††,1 - 33.3% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 8,104,623 | | | | 8,104,623 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 914,789 | | | | 914,789 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 713,867 | | | | 713,867 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $9,733,279) | | | | | | | 9,733,279 | |
| Total Investments - 94.6% | | | | | | | | |
| (Cost $26,791,429) | | | | | | $ | 27,673,694 | |
| Other Assets & Liabilities, net - 5.4% | | | | | | | 1,570,594 | |
| Total Net Assets - 100.0% | | | | | | $ | 29,244,288 | |
| See Notes to Financial Statements. | the RYDEX FUNDS SEMI-ANNUAL REPORT | 165 |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| europe 1.25x strategy FUND | | |
| | | | | | unrealized | |
| | | Contracts | | | Gain (Loss) | |
| CURRENCY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 Euro FX Currency | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $18,942,000) | | | 112 | | | $ | 302,399 | |
| | | | | | | | | |
| EQUITY FUTURES CONTRACTS PURCHASED†† | | | | | | | | |
| December 2013 STOXX 50 Index | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $18,694,623) | | | 500 | | | $ | (129,917 | ) |
| * | Non-income producing security. |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
ADR — American Depositary Receipt
plc — Public Limited Company
| 166 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| europe 1.25x strategy FUND | | |
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $17,058,150) | | $ | 17,940,415 | |
| Repurchase agreements, at value | | | | |
| (cost $9,733,279) | | | 9,733,279 | |
| Total investments | | | | |
| (cost $26,791,429) | | | 27,673,694 | |
| Segregated cash with broker | | | 1,693,056 | |
| Cash | | | 74,927 | |
| Receivables: | | | | |
| Fund shares sold | | | 57,890 | |
| Dividends | | | 33,857 | |
| Foreign taxes reclaim | | | 10,191 | |
| Interest | | | 5 | |
| Other assets | | | 30,600 | |
| Total assets | | | 29,574,220 | |
| Liabilities: | | | | |
| Foreign currency, at value | | | 74,848 | |
| Payable for: | | | | |
| Variation margin | | | 109,242 | |
| Fund shares redeemed | | | 87,433 | |
| Management fees | | | 19,997 | |
| Distribution and service fees | | | 6,016 | |
| Transfer agent and administrative fees | | | 5,555 | |
| Portfolio accounting fees | | | 2,222 | |
| Miscellaneous | | | 24,619 | |
| Total liabilities | | | 329,932 | |
| Net assets | | $ | 29,244,288 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 42,103,127 | |
| Accumulated net investment loss | | | (16,703 | ) |
| Accumulated net realized loss on investments | | | (13,896,935 | ) |
| Net unrealized appreciation on investments and foreign currency | | | 1,054,799 | |
| Net assets | | $ | 29,244,288 | |
| A-Class: | | | | |
| Net assets | | $ | 2,927,972 | |
| Capital shares outstanding | | | 184,677 | |
| Net asset value per share | | $ | 15.85 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 16.64 | |
| C-Class: | | | | |
| Net assets | | $ | 785,393 | |
| Capital shares outstanding | | | 55,303 | |
| Net asset value per share | | $ | 14.20 | |
| H-Class: | | | | |
| Net assets | | $ | 25,530,923 | |
| Capital shares outstanding | | | 1,623,549 | |
| Net asset value per share | | $ | 15.73 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends (net of foreign withholding tax of $6,502) | | $ | 165,791 | |
| Interest | | | 580 | |
| Income from securities lending, net | | | 47 | |
| Total investment income | | | 166,418 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 67,436 | |
| Transfer agent and administrative fees | | | 18,732 | |
| Distribution and service fees: | | | | |
| A-Class | | | 4,357 | |
| C-Class | | | 1,991 | |
| H-Class | | | 13,877 | |
| Portfolio accounting fees | | | 7,493 | |
| Registration fees | | | 6,584 | |
| Trustees’ fees* | | | 1,391 | |
| Custodian fees | | | 554 | |
| Line of credit fees | | | 7 | |
| Miscellaneous | | | 4,550 | |
| Total expenses | | | 126,972 | |
| Net investment income | | | 39,446 | |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (816,208 | ) |
| Futures contracts | | | 253,696 | |
| Foreign currency | | | 8,443 | |
| Net realized loss | | | (554,069 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 699,587 | |
| Futures contracts | | | 227,844 | |
| Foreign currency | | | 59 | |
| Net change in unrealized appreciation (depreciation) | | | 927,490 | |
| Net realized and unrealized gain | | | 373,421 | |
| Net increase in net assets resulting from operations | | $ | 412,867 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 167 |
| europe 1.25x strategy FUND | | |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income (loss) | | $ | 39,446 | | | $ | (52,462 | ) |
| Net realized gain (loss) on investments | | | (554,069 | ) | | | 3,559,313 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 927,490 | | | | 178,740 | |
| Net increase in net assets resulting from operations | | | 412,867 | | | | 3,685,591 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| A-Class | | | — | | | | (60,314 | ) |
| C-Class | | | — | | | | (2,197 | ) |
| H-Class | | | — | | | | (58,838 | ) |
| Total distributions to shareholders | | | — | | | | (121,349 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 31,010,390 | | | | 90,816,378 | |
| C-Class | | | 2,648,703 | | | | 5,587,424 | |
| H-Class | | | 99,627,277 | | | | 241,512,218 | |
| Distributions reinvested | | | | | | | | |
| A-Class | | | — | | | | 59,279 | |
| C-Class | | | — | | | | 2,187 | |
| H-Class | | | — | | | | 58,304 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (31,675,355 | ) | | | (90,230,686 | ) |
| C-Class | | | (2,318,354 | ) | | | (5,730,709 | ) |
| H-Class | | | (85,530,900 | ) | | | (239,461,432 | ) |
| Net increase from capital share transactions | | | 13,761,761 | | | | 2,612,963 | |
| Net increase in net assets | | | 14,174,628 | | | | 6,177,205 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 15,069,660 | | | | 8,892,455 | |
| End of period | | $ | 29,244,288 | | | $ | 15,069,660 | |
| Accumulated net investment loss at end of period | | $ | (16,703 | ) | | $ | (56,149 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 2,064,641 | | | | 7,021,653 | |
| C-Class | | | 194,410 | | | | 486,881 | |
| H-Class | | | 6,700,091 | | | | 18,478,661 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| A-Class | | | — | | | | 4,388 | |
| C-Class | | | — | | | | 177 | |
| H-Class | | | — | | | | 4,309 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (2,156,446 | ) | | | (6,804,798 | ) |
| C-Class | | | (170,274 | ) | | | (493,981 | ) |
| H-Class | | | (5,833,900 | ) | | | (18,342,051 | ) |
| Net increase in shares | | | 798,522 | | | | 355,239 | |
| 168 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| europe 1.25x strategy FUND | | |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.16 | | | $ | 12.57 | | | $ | 14.06 | | | $ | 14.18 | | | $ | 8.36 | | | $ | 22.25 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .08 | | | | (.03 | ) | | | .10 | | | | .08 | | | | .04 | | | | .18 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.61 | | | | 1.65 | | | | (1.59 | ) | | | (.20 | ) | | | 5.78 | | | | (14.07 | ) |
| Total from investment operations | | | 1.69 | | | | 1.62 | | | | (1.49 | ) | | | (.12 | ) | | | 5.82 | | | | (13.89 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 15.85 | | | $ | 14.16 | | | $ | 12.57 | | | $ | 14.06 | | | $ | 14.18 | | | $ | 8.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 11.94 | % | | | 12.92 | % | | | (10.60 | %) | | | (0.85 | %) | | | 69.62 | % | | | (62.43 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,928 | | | $ | 3,916 | | | $ | 694 | | | $ | 455 | | | $ | 463 | | | $ | 316 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 1.08 | % | | | (0.23 | %) | | | 0.77 | % | | | 0.66 | % | | | 0.33 | % | | | 1.05 | % |
| Total expenses | | | 1.68 | % | | | 1.67 | % | | | 1.67 | % | | | 1.69 | % | | | 1.66 | % | | | 1.68 | % |
| Portfolio turnover rate | | | 412 | % | | | 903 | % | | | 318 | % | | | 515 | % | | | 1,353 | % | | | 384 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 12.89 | | | $ | 11.53 | | | $ | 12.97 | | | $ | 13.17 | | | $ | 7.83 | | | $ | 21.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.02 | ) | | | (.10 | ) | | | — | d | | | .03 | | | | (.04 | ) | | | .07 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.33 | | | | 1.49 | | | | (1.44 | ) | | | (.23 | ) | | | 5.38 | | | | (13.24 | ) |
| Total from investment operations | | | 1.31 | | | | 1.39 | | | | (1.44 | ) | | | (.20 | ) | | | 5.34 | | | | (13.17 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 14.20 | | | $ | 12.89 | | | $ | 11.53 | | | $ | 12.97 | | | $ | 13.17 | | | $ | 7.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 10.16 | % | | | 12.09 | % | | | (11.10 | %) | | | (1.52 | %) | | | 68.20 | % | | | (62.71 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 785 | | | $ | 402 | | | $ | 439 | | | $ | 638 | | | $ | 2,111 | | | $ | 754 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (0.24 | %) | | | (0.83 | %) | | | 0.03 | % | | | 0.22 | % | | | (0.36 | %) | | | 0.42 | % |
| Total expenses | | | 2.43 | % | | | 2.42 | % | | | 2.43 | % | | | 2.43 | % | | | 2.42 | % | | | 2.43 | % |
| Portfolio turnover rate | | | 412 | % | | | 903 | % | | | 318 | % | | | 515 | % | | | 1,353 | % | | | 384 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 169 |
| europe 1.25x strategy FUND | | |
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.20 | | | $ | 12.59 | | | $ | 14.06 | | | $ | 14.20 | | | $ | 8.36 | | | $ | 22.26 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | .03 | | | | (.02 | ) | | | .16 | | | | .09 | | | | .03 | | | | .21 | |
| Net gain (loss) on investments (realized and unrealized) | | | 1.50 | | | | 1.66 | | | | (1.63 | ) | | | (.23 | ) | | | 5.81 | | | | (14.11 | ) |
| Total from investment operations | | | 1.53 | | | | 1.64 | | | | (1.47 | ) | | | (.14 | ) | | | 5.84 | | | | (13.90 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.03 | ) | | | — | | | | — | | | | — | | | | — | |
| Net asset value, end of period | | $ | 15.73 | | | $ | 14.20 | | | $ | 12.59 | | | $ | 14.06 | | | $ | 14.20 | | | $ | 8.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 10.77 | % | | | 13.06 | % | | | (10.46 | %) | | | (0.99 | %) | | | 69.86 | % | | | (62.44 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 25,531 | | | $ | 10,752 | | | $ | 7,759 | | | $ | 23,238 | | | $ | 6,989 | | | $ | 4,739 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.38 | % | | | (0.18 | %) | | | 1.22 | % | | | 0.70 | % | | | 0.21 | % | | | 1.22 | % |
| Total expenses | | | 1.67 | % | | | 1.67 | % | | | 1.68 | % | | | 1.69 | % | | | 1.70 | % | | | 1.71 | % |
| Portfolio turnover rate | | | 412 | % | | | 903 | % | | | 318 | % | | | 515 | % | | | 1,353 | % | | | 384 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 170 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
JAPAN 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of a specific benchmark.
The Fund’s current benchmark is 200% of the fair value of the Nikkei-225 Stock Average Index (the “underlying index”).
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | | |
| A-Class | | February 22, 2008 |
| C-Class | | February 22, 2008 |
| H-Class | | February 22, 2008 |
The Fund invests principally in derivative investments such as futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 171 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| JAPAN 2x strategy FUND | | |
| | | Face | | | | |
| | | amount | | | Value | |
| | | | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 87.9% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 5,317,092 | | | $ | 5,317,092 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 600,153 | | | | 600,153 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 468,337 | | | | 468,337 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $6,385,582) | | | | | | | 6,385,582 | |
| Total Investments - 87.9% | | | | | | | | |
| (Cost $6,385,582) | | | | | | $ | 6,385,582 | |
| Other Assets & Liabilities, net - 12.1% | | | | | | | 882,620 | |
| Total Net Assets - 100.0% | | | | | | $ | 7,268,202 | |
| | | | | | unrealized | |
| | | Contracts | | | Gain | |
| | | | | | | | | |
| EQUITY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 Nikkei-225 Index | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $14,571,775) | | | 199 | | | $ | 161,560 | |
| CURRENCY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 Japanese Yen | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $14,502,225) | | | 114 | | | $ | 158,475 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 172 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $6,385,582) | | $ | 6,385,582 | |
| Segregated cash with broker | | | 1,301,300 | |
| Receivables: | | | | |
| Fund shares sold | | | 1,454 | |
| Interest | | | 3 | |
| Other assets | | | 37,149 | |
| Total assets | | | 7,725,488 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 373,544 | |
| Variation margin | | | 69,842 | |
| Management fees | | | 3,405 | |
| Distribution and service fees | | | 1,407 | |
| Transfer agent and administrative fees | | | 1,135 | |
| Portfolio accounting fees | | | 454 | |
| Miscellaneous | | | 7,499 | |
| Total liabilities | | | 457,286 | |
| Net assets | | $ | 7,268,202 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 8,787,911 | |
| Accumulated net investment loss | | | (108,820 | ) |
| Accumulated net realized loss on investments | | | (1,730,924 | ) |
| Net unrealized appreciation on investments | | | 320,035 | |
| Net assets | | $ | 7,268,202 | |
| A-Class: | | | | |
| Net assets | | $ | 775,088 | |
| Capital shares outstanding | | | 36,819 | |
| Net asset value per share | | $ | 21.05 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 22.10 | |
| C-Class: | | | | |
| Net assets | | $ | 459,800 | |
| Capital shares outstanding | | | 22,739 | |
| Net asset value per share | | $ | 20.22 | |
| H-Class: | | | | |
| Net assets | | $ | 6,033,314 | |
| Capital shares outstanding | | | 285,690 | |
| Net asset value per share | | $ | 21.12 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Interest | | $ | 1,368 | |
| Total investment income | | | 1,368 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 39,302 | |
| Transfer agent and administrative fees | | | 13,101 | |
| Distribution and service fees: | | | | |
| A-Class | | | 2,053 | |
| C-Class | | | 3,632 | |
| H-Class | | | 10,140 | |
| Portfolio accounting fees | | | 5,241 | |
| Custodian fees | | | 617 | |
| Trustees’ fees* | | | 352 | |
| Miscellaneous | | | 8,050 | |
| Total expenses | | | 82,488 | |
| Net investment loss | | | (81,120 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 37,149 | |
| Futures contracts | | | 1,199,559 | |
| Net realized gain | | | 1,236,708 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Futures contracts | | | (1,198,696 | ) |
| Net change in unrealized appreciation (depreciation) | | | (1,198,696 | ) |
| Net realized and unrealized gain | | | 38,012 | |
| Net decrease in net assets resulting from operations | | $ | (43,108 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 173 |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (81,120 | ) | | $ | (66,743 | ) |
| Net realized gain (loss) on investments | | | 1,236,708 | | | | (139,216 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (1,198,696 | ) | | | 826,029 | |
| Net increase (decrease) in net assets resulting from operations | | | (43,108 | ) | | | 620,070 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 2,935,701 | | | | 4,927,467 | |
| C-Class | | | 4,715,858 | | | | 742,044 | |
| H-Class | | | 63,213,373 | | | | 47,073,229 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (4,410,953 | ) | | | (4,579,922 | ) |
| C-Class | | | (4,414,740 | ) | | | (627,063 | ) |
| H-Class | | | (66,018,740 | ) | | | (43,007,680 | ) |
| Net increase (decrease) from capital share transactions | | | (3,979,501 | ) | | | 4,528,075 | |
| Net increase (decrease) in net assets | | | (4,022,609 | ) | | | 5,148,145 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 11,290,811 | | | | 6,142,666 | |
| End of period | | $ | 7,268,202 | | | $ | 11,290,811 | |
| Accumulated net investment loss at end of period | | $ | (108,820 | ) | | $ | (27,700 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 148,603 | | | | 342,232 | |
| C-Class | | | 251,125 | | | | 55,951 | |
| H-Class | | | 3,211,447 | | | | 3,436,691 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (228,238 | ) | | | (318,220 | ) |
| C-Class | | | (243,045 | ) | | | (50,642 | ) |
| H-Class | | | (3,442,877 | ) | | | (3,214,905 | ) |
| Net increase (decrease) in shares | | | (302,985 | ) | | | 251,107 | |
| 174 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 17.39 | | | $ | 15.45 | | | $ | 14.95 | | | $ | 16.49 | | | $ | 9.01 | | | $ | 25.12 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.14 | ) | | | (.20 | ) | | | (.22 | ) | | | (.24 | ) | | | (.19 | ) | | | (.06 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.80 | | | | 2.14 | | | | .72 | | | | (1.30 | ) | | | 7.67 | | | | (16.24 | ) |
| Total from investment operations | | | 3.66 | | | | 1.94 | | | | .50 | | | | (1.54 | ) | | | 7.48 | | | | (16.30 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.01 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.01 | ) |
| Payments by affiliates | | | — | | | | — | | | | — | | | | — | | | | — | | | | .20 | c |
| Net asset value, end of period | | $ | 21.05 | | | $ | 17.39 | | | $ | 15.45 | | | $ | 14.95 | | | $ | 16.49 | | | $ | 9.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 21.05 | % | | | 12.56 | % | | | 3.34 | % | | | (9.34 | %) | | | 83.02 | % | | | (64.10 | %)c |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 775 | | | $ | 2,025 | | | $ | 1,428 | | | $ | 5,931 | | | $ | 2,234 | | | $ | 299 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.49 | %) | | | (1.40 | %) | | | (1.49 | %) | | | (1.45 | %) | | | (1.42 | %) | | | (0.42 | %) |
| Total expenses | | | 1.52 | % | | | 1.51 | % | | | 1.51 | % | | | 1.55 | % | | | 1.53 | % | | | 1.53 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.76 | | | $ | 14.99 | | | $ | 14.60 | | | $ | 16.23 | | | $ | 8.94 | | | $ | 25.10 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.21 | ) | | | (.29 | ) | | | (.31 | ) | | | (.31 | ) | | | (.31 | ) | | | (.17 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.67 | | | | 2.06 | | | | .70 | | | | (1.32 | ) | | | 7.60 | | | | (16.18 | ) |
| Total from investment operations | | | 3.46 | | | | 1.77 | | | | .39 | | | | (1.63 | ) | | | 7.29 | | | | (16.35 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.01 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.01 | ) |
| Payments by affiliates | | | — | | | | — | | | | — | | | | — | | | | — | | | | .20 | c |
| Net asset value, end of period | | $ | 20.22 | | | $ | 16.76 | | | $ | 14.99 | | | $ | 14.60 | | | $ | 16.23 | | | $ | 8.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 20.64 | % | | | 11.81 | % | | | 2.67 | % | | | (10.04 | %) | | | 81.54 | % | | | (64.35 | %)c |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 460 | | | $ | 246 | | | $ | 140 | | | $ | 189 | | | $ | 432 | | | $ | 879 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.24 | %) | | | (2.15 | %) | | | (2.23 | %) | | | (2.18 | %) | | | (2.20 | %) | | | (0.98 | %) |
| Total expenses | | | 2.27 | % | | | 2.25 | % | | | 2.26 | % | | | 2.29 | % | | | 2.28 | % | | | 2.26 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 175 |
| JAPAN 2x STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 17.44 | | | $ | 15.49 | | | $ | 14.98 | | | $ | 16.48 | | | $ | 9.01 | | | $ | 25.12 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.15 | ) | | | (.20 | ) | | | (.22 | ) | | | (.23 | ) | | | (.21 | ) | | | (.08 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 3.83 | | | | 2.15 | | | | .73 | | | | (1.27 | ) | | | 7.68 | | | | (16.22 | ) |
| Total from investment operations | | | 3.68 | | | | 1.95 | | | | .51 | | | | (1.50 | ) | | | 7.47 | | | | (16.30 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.01 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (.01 | ) |
| Payments by affiliates | | | — | | | | — | | | | — | | | | — | | | | — | | | | .20 | c |
| Net asset value, end of period | | $ | 21.12 | | | $ | 17.44 | | | $ | 15.49 | | | $ | 14.98 | | | $ | 16.48 | | | $ | 9.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnd | | | 21.10 | % | | | 12.59 | % | | | 3.40 | % | | | (9.10 | %) | | | 82.91 | % | | | (64.10 | %)c |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,033 | | | $ | 9,020 | | | $ | 4,574 | | | $ | 5,356 | | | $ | 5,414 | | | $ | 6,531 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.50 | %) | | | (1.40 | %) | | | (1.48 | %) | | | (1.44 | %) | | | (1.44 | %) | | | (0.55 | %) |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.51 | % | | | 1.54 | % | | | 1.53 | % | | | 1.52 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share was computed using average shares outstanding throughout the period. |
| c | Excluding the reimbursement, the Fund’s total return would have been -64.90%, -65.15% and -64.90% for the A-Class, C-Class and H-Class, respectively. |
| d | Total return does not reflect the impact of any applicable sales charges and has not been annualized. |
| 176 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
| | |
| STRENGTHENING DOLLAR 2x STRATEGY FUND |
OBJECTIVE: Seeks to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a daily basis. The Fund’s current benchmark is 200% of the performance of the U.S. Dollar Index® (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: |
| A-Class | May 25, 2005 |
| C-Class | May 25, 2005 |
| H-Class | May 25, 2005 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 177 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| STRENGTHENING DOLLAR 2x STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 97.4% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 18,280,211 | | | $ | 18,280,211 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 2,063,333 | | | | 2,063,333 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 1,610,148 | | | | 1,610,148 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 296,387 | | | | 296,387 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $22,250,079) | | | | | | | 22,250,079 | |
| Total Investments - 97.4% | | | | | | | | |
| (Cost $22,250,079) | | | | | | $ | 22,250,079 | |
| Other Assets & Liabilities, net - 2.6% | | | | | | | 602,630 | |
| Total Net Assets - 100.0% | | | | | | $ | 22,852,709 | |
| | | | | | Unrealized | |
| | | Contracts | | | Loss | |
| | | | | | | |
| CURRENCY FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 U.S. Dollar Index | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $44,655,140) | | | 556 | | | $ | (903,851 | ) |
| | | | | | | | | |
| | | | Units | | | | | |
| CURRENCY INDEX SWAP AGREEMENTS†† | | | | | | | | |
| Goldman Sachs International | | | | | | | | |
| November 2013 U.S. Dollar Index Swap, | | | | | | | | |
| Terminating 11/29/133 | | | | | | | | |
| (Notional Value $1,293,938) | | | 16,116 | | | $ | (5,068 | ) |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as currency index swap collateral at September 30, 2013. |
| 3 | Total Return based on U.S. Dollar Index +/- financing at a variable rate. |
| 178 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STRENGTHENING DOLLAR 2x STRATEGY FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $22,250,079) | | $ | 22,250,079 | |
| Segregated cash with broker | | | 889,600 | |
| Receivables: | | | | |
| Fund shares sold | | | 6,798 | |
| Interest | | | 13 | |
| Total assets | | | 23,146,490 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 5,068 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 207,968 | |
| Variation margin | | | 34,472 | |
| Management fees | | | 16,747 | |
| Swap settlement | | | 6,697 | |
| Distribution and service fees | | | 6,021 | |
| Transfer agent and administrative fees | | | 4,652 | |
| Portfolio accounting fees | | | 1,861 | |
| Miscellaneous | | | 10,295 | |
| Total liabilities | | | 293,781 | |
| Net assets | | $ | 22,852,709 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 45,479,132 | |
| Accumulated net investment loss | | | (306,672 | ) |
| Accumulated net realized loss on investments | | | (21,410,832 | ) |
| Net unrealized depreciation on investments | | | (908,919 | ) |
| Net assets | | $ | 22,852,709 | |
| A-Class: | | | | |
| Net assets | | $ | 8,815,837 | |
| Capital shares outstanding | | | 676,610 | |
| Net asset value per share | | $ | 13.03 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 13.68 | |
| C-Class: | | | | |
| Net assets | | $ | 2,206,060 | |
| Capital shares outstanding | | | 181,059 | |
| Net asset value per share | | $ | 12.18 | |
| H-Class: | | | | |
| Net assets | | $ | 11,830,812 | |
| Capital shares outstanding | | | 911,573 | |
| Net asset value per share | | $ | 12.98 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Interest | | $ | 3,170 | |
| Total investment income | | | 3,170 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 104,075 | |
| Transfer agent and administrative fees | | | 28,910 | |
| Distribution and service fees: | | | | |
| A-Class | | | 8,210 | |
| C-Class | | | 16,193 | |
| H-Class | | | 16,651 | |
| Portfolio accounting fees | | | 11,564 | |
| Licensing fees | | | 11,035 | |
| Custodian fees | | | 1,556 | |
| Trustees’ fees* | | | 1,534 | |
| Miscellaneous | | | 16,746 | |
| Total expenses | | | 216,474 | |
| Net investment loss | | | (213,304 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Swap agreements | | | 138,604 | |
| Futures contracts | | | (1,322,648 | ) |
| Net realized loss | | | (1,184,044 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Swap agreements | | | (162,070 | ) |
| Futures contracts | | | (1,036,132 | ) |
| Net change in unrealized appreciation (depreciation) | | | (1,198,202 | ) |
| Net realized and unrealized loss | | | (2,382,246 | ) |
| Net decrease in net assets resulting from operations | | $ | (2,595,550 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 179 |
| STRENGTHENING DOLLAR 2x STRATEGY FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (213,304 | ) | | $ | (570,602 | ) |
| Net realized gain (loss) on investments | | | (1,184,044 | ) | | | 2,848,327 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (1,198,202 | ) | | | 1,035,107 | |
| Net increase (decrease) in net assets resulting from operations | | | (2,595,550 | ) | | | 3,312,832 | |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 17,816,547 | | | | 48,521,608 | |
| C-Class | | | 9,538,098 | | | | 34,253,394 | |
| H-Class | | | 37,281,573 | | | | 176,827,477 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (18,418,622 | ) | | | (45,619,434 | ) |
| C-Class | | | (10,615,731 | ) | | | (34,994,261 | ) |
| H-Class | | | (36,089,826 | ) | | | (189,312,228 | ) |
| Net decrease from capital share transactions | | | (487,961 | ) | | | (10,323,444 | ) |
| Net decrease in net assets | | | (3,083,511 | ) | | | (7,010,612 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 25,936,220 | | | | 32,946,832 | |
| End of period | | $ | 22,852,709 | | | $ | 25,936,220 | |
| Accumulated net investment loss at end of period | | $ | (306,672 | ) | | $ | (93,368 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 1,284,661 | | | | 3,515,259 | |
| C-Class | | | 735,934 | | | | 2,618,502 | |
| H-Class | | | 2,684,809 | | | | 12,735,724 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (1,339,702 | ) | | | (3,294,726 | ) |
| C-Class | | | (818,636 | ) | | | (2,676,528 | ) |
| H-Class | | | (2,616,882 | ) | | | (13,533,620 | ) |
| Net decrease in shares | | | (69,816 | ) | | | (635,389 | ) |
| 180 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| STRENGTHENING DOLLAR 2x STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.25 | | | $ | 13.45 | | | $ | 13.46 | | | $ | 16.38 | | | $ | 19.64 | | | $ | 19.85 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.12 | ) | | | (.21 | ) | | | (.22 | ) | | | (.25 | ) | | | (.25 | ) | | | .02 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.10 | ) | | | 1.01 | | | | .21 | | | | (2.67 | ) | | | (3.01 | ) | | | 6.50 | |
| Total from investment operations | | | (1.22 | ) | | | .80 | | | | (.01 | ) | | | (2.92 | ) | | | (3.26 | ) | | | 6.52 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6.73 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6.73 | ) |
| Net asset value, end of period | | $ | 13.03 | | | $ | 14.25 | | | $ | 13.45 | | | $ | 13.46 | | | $ | 16.38 | | | $ | 19.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (8.56 | %) | | | 5.95 | % | | | (0.07 | %) | | | (17.83 | %) | | | (16.60 | %) | | | 30.59 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 8,816 | | | $ | 10,427 | | | $ | 6,875 | | | $ | 6,115 | | | $ | 16,833 | | | $ | 7,314 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (1.73 | %) | | | (1.53 | %) | | | (1.62 | %) | | | (1.55 | %) | | | (1.57 | %) | | | 0.07 | % |
| Total expenses | | | 1.76 | % | | | 1.66 | % | | | 1.68 | % | | | 1.71 | % | | | 1.67 | % | | | 1.69 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 13.38 | | | $ | 12.71 | | | $ | 12.83 | | | $ | 15.74 | | | $ | 19.01 | | | $ | 19.42 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.16 | ) | | | (.30 | ) | | | (.30 | ) | | | (.35 | ) | | | (.36 | ) | | | (.14 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (1.04 | ) | | | .97 | | | | .18 | | | | (2.56 | ) | | | (2.91 | ) | | | 6.46 | |
| Total from investment operations | | | (1.20 | ) | | | .67 | | | | (.12 | ) | | | (2.91 | ) | | | (3.27 | ) | | | 6.32 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6.73 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6.73 | ) |
| Net asset value, end of period | | $ | 12.18 | | | $ | 13.38 | | | $ | 12.71 | | | $ | 12.83 | | | $ | 15.74 | | | $ | 19.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (8.97 | %) | | | 5.27 | % | | | (0.94 | %) | | | (18.49 | %) | | | (17.20 | %) | | | 30.36 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 2,206 | | | $ | 3,530 | | | $ | 4,091 | | | $ | 4,028 | | | $ | 10,594 | | | $ | 5,728 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.50 | %) | | | (2.29 | %) | | | (2.36 | %) | | | (2.29 | %) | | | (2.31 | %) | | | (0.66 | %) |
| Total expenses | | | 2.53 | % | | | 2.42 | % | | | 2.44 | % | | | 2.46 | % | | | 2.42 | % | | | 2.44 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 181 |
| STRENGTHENING DOLLAR 2x STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 14.20 | | | $ | 13.39 | | | $ | 13.40 | | | $ | 16.31 | | | $ | 19.56 | | | $ | 19.83 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss)b | | | (.12 | ) | | | (.21 | ) | | | (.22 | ) | | | (.25 | ) | | | (.25 | ) | | | .02 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.10 | ) | | | 1.02 | | | | .21 | | | | (2.66 | ) | | | (3.00 | ) | | | 6.44 | |
| Total from investment operations | | | (1.22 | ) | | | .81 | | | | (.01 | ) | | | (2.91 | ) | | | (3.25 | ) | | | 6.46 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6.73 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6.73 | ) |
| Net asset value, end of period | | $ | 12.98 | | | $ | 14.20 | | | $ | 13.39 | | | $ | 13.40 | | | $ | 16.31 | | | $ | 19.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (8.59 | %) | | | 6.05 | % | | | (0.07 | %) | | | (17.84 | %) | | | (16.62 | %) | | | 30.25 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 11,831 | | | $ | 11,979 | | | $ | 21,982 | | | $ | 20,733 | | | $ | 60,944 | | | $ | 22,147 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | (1.74 | %) | | | (1.53 | %) | | | (1.62 | %) | | | (1.55 | %) | | | (1.57 | %) | | | 0.08 | % |
| Total expenses | | | 1.77 | % | | | 1.66 | % | | | 1.69 | % | | | 1.72 | % | | | 1.67 | % | | | 1.69 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income (loss) per share 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. |
| 182 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
WEAKENING DOLLAR 2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a daily basis. The Fund’s current benchmark is 200% of the inverse (opposite) of the performance of the U.S. Dollar Index® (the “underlying index”). The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | May 25, 2005 |
| C-Class | May 25, 2005 |
| H-Class | May 25, 2005 |
The Fund invests principally in derivative investments such as swap agreements and futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 183 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| WEAKENING DOLLAR 2x STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | |
| REPURCHASE AGREEMENTS††,1 - 96.3% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 7,462,218 | | | $ | 7,462,218 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 842,279 | | | | 842,279 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 657,283 | | | | 657,283 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 84,187 | | | | 84,187 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $9,045,967) | | | | | | | 9,045,967 | |
| Total Investments - 96.3% | | | | | | | | |
| (Cost $9,045,967) | | | | | | $ | 9,045,967 | |
| Other Assets & Liabilities, net - 3.7% | | | | | | | 344,500 | |
| Total Net Assets - 100.0% | | | | | | $ | 9,390,467 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain | |
| | | | | | | |
| CURRENCY FUTURES CONTRACTS SOLD SHORT† | | | | | | | | |
| December 2013 U.S. Dollar Index | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $17,990,560) | | | 224 | | | $ | 350,597 | |
| | | | | | | | | |
| | | | Units | | | | | |
| CURRENCY INDEX SWAP AGREEMENTS SOLD SHORT†† | | | | | | | | |
| Goldman Sachs International | | | | | | | | |
| November 2013 U.S. Dollar Index Swap, | | | | | | | | |
| Terminating 11/29/133 | | | | | | | | |
| (Notional Value $811,134) | | | 10,102 | | | $ | 19,083 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as currency index swap collateral at September 30, 2013. |
| 3 | Total Return based on U.S. Dollar Index +/- financing at a variable rate. |
| 184 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| WEAKENING DOLLAR 2x STRATEGY FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $9,045,967) | | $ | 9,045,967 | |
| Segregated cash with broker | | | 360,000 | |
| Unrealized appreciation on swap agreements | | | 19,083 | |
| Receivables: | | | | |
| Variation margin | | | 13,947 | |
| Fund shares sold | | | 1,804 | |
| Interest | | | 5 | |
| Total assets | | | 9,440,806 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 16,184 | |
| Swap settlement | | | 11,408 | |
| Licensing fees | | | 8,554 | |
| Management fees | | | 6,311 | |
| Distribution and service fees | | | 2,663 | |
| Transfer agent and administrative fees | | | 1,753 | |
| Portfolio accounting fees | | | 701 | |
| Miscellaneous | | | 2,765 | |
| Total liabilities | | | 50,339 | |
| Net assets | | $ | 9,390,467 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 24,828,613 | |
| Accumulated net investment loss | | | (169,040 | ) |
| Accumulated net realized loss on investments | | | (15,638,786 | ) |
| Net unrealized appreciation on investments | | | 369,680 | |
| Net assets | | $ | 9,390,467 | |
| A-Class: | | | | |
| Net assets | | $ | 1,203,729 | |
| Capital shares outstanding | | | 67,165 | |
| Net asset value per share | | $ | 17.92 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 18.81 | |
| C-Class: | | | | |
| Net assets | | $ | 1,528,844 | |
| Capital shares outstanding | | | 91,967 | |
| Net asset value per share | | $ | 16.62 | |
| H-Class: | | | | |
| Net assets | | $ | 6,657,894 | |
| Capital shares outstanding | | | 372,228 | |
| Net asset value per share | | $ | 17.89 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | | |
| Interest | | $ | 1,567 | |
| Total investment income | | | 1,567 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 47,687 | |
| Transfer agent and administrative fees | | | 13,247 | |
| Distribution and service fees: | | | | |
| A-Class | | | 2,482 | |
| C-Class | | | 8,854 | |
| H-Class | | | 8,551 | |
| Portfolio accounting fees | | | 5,299 | |
| Licensing fees | | | 7,216 | |
| Trustees’ fees* | | | 852 | |
| Custodian fees | | | 563 | |
| Miscellaneous | | | 7,567 | |
| Total expenses | | | 102,318 | |
| Net investment loss | | | (100,751 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Swap agreements | | | (116,313 | ) |
| Futures contracts | | | (170,001 | ) |
| Net realized loss | | | (286,314 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Swap agreements | | | 81,309 | |
| Futures contracts | | | 403,594 | |
| Net change in unrealized appreciation (depreciation) | | | 484,903 | |
| Net realized and unrealized gain | | | 198,589 | |
| Net increase in net assets resulting from operations | | $ | 97,838 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 185 |
WEAKENING DOLLAR 2x STRATEGY FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (100,751 | ) | | $ | (280,568 | ) |
| Net realized loss on investments | | | (286,314 | ) | | | (1,135,991 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | 484,903 | | | | (591,726 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 97,838 | | | | (2,008,285 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 12,852,617 | | | | 26,292,609 | |
| C-Class | | | 5,722,373 | | | | 5,700,939 | |
| H-Class | | | 14,412,753 | | | | 77,055,138 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (12,756,039 | ) | | | (27,378,877 | ) |
| C-Class | | | (5,919,189 | ) | | | (6,540,815 | ) |
| H-Class | | | (18,110,919 | ) | | | (79,287,767 | ) |
| Net decrease from capital share transactions | | | (3,798,404 | ) | | | (4,158,773 | ) |
| Net decrease in net assets | | | (3,700,566 | ) | | | (6,167,058 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 13,091,033 | | | | 19,258,091 | |
| End of period | | $ | 9,390,467 | | | $ | 13,091,033 | |
| Accumulated net investment loss at end of period | | $ | (169,040 | ) | | $ | (68,289 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 737,033 | | | | 1,439,290 | |
| C-Class | | | 356,230 | | | | 336,378 | |
| H-Class | | | 832,605 | | | | 4,279,770 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (749,251 | ) | | | (1,511,880 | ) |
| C-Class | | | (371,097 | ) | | | (388,412 | ) |
| H-Class | | | (1,054,446 | ) | | | (4,401,489 | ) |
| Net decrease in shares | | | (248,926 | ) | | | (246,343 | ) |
| 186 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
WEAKENING DOLLAR 2x STRATEGY FUND
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.95 | | | $ | 18.95 | | | $ | 20.34 | | | $ | 17.98 | | | $ | 16.38 | | | $ | 29.27 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.15 | ) | | | (.28 | ) | | | (.33 | ) | | | (.28 | ) | | | (.30 | ) | | | (.07 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.12 | | | | (1.72 | ) | | | (1.06 | ) | | | 2.64 | | | | 1.90 | | | | (8.77 | ) |
| Total from investment operations | | | .97 | | | | (2.00 | ) | | | (1.39 | ) | | | 2.36 | | | | 1.60 | | | | (8.84 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.28 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2.77 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (4.05 | ) |
| Net asset value, end of period | | $ | 17.92 | | | $ | 16.95 | | | $ | 18.95 | | | $ | 20.34 | | | $ | 17.98 | | | $ | 16.38 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 5.72 | % | | | (10.55 | %) | | | (6.83 | %) | | | 13.13 | % | | | 9.77 | % | | | (29.87 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,204 | | | $ | 1,346 | | | $ | 2,881 | | | $ | 5,576 | | | $ | 6,753 | | | $ | 17,642 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.75 | %) | | | (1.53 | %) | | | (1.62 | %) | | | (1.54 | %) | | | (1.57 | %) | | | (0.30 | %) |
| Total expenses | | | 1.78 | % | | | 1.65 | % | | | 1.70 | % | | | 1.71 | % | | | 1.68 | % | | | 1.69 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 15.79 | | | $ | 17.79 | | | $ | 19.23 | | | $ | 17.12 | | | $ | 15.73 | | | $ | 28.53 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.20 | ) | | | (.38 | ) | | | (.44 | ) | | | (.39 | ) | | | (.43 | ) | | | (.21 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.03 | | | | (1.62 | ) | | | (1.00 | ) | | | 2.50 | | | | 1.82 | | | | (8.54 | ) |
| Total from investment operations | | | .83 | | | | (2.00 | ) | | | (1.44 | ) | | | 2.11 | | | | 1.39 | | | | (8.75 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.28 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2.77 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (4.05 | ) |
| Net asset value, end of period | | $ | 16.62 | | | $ | 15.79 | | | $ | 17.79 | | | $ | 19.23 | | | $ | 17.12 | | | $ | 15.73 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 5.26 | % | | | (11.24 | %) | | | (7.49 | %) | | | 12.32 | % | | | 8.84 | % | | | (30.37 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,529 | | | $ | 1,687 | | | $ | 2,826 | | | $ | 3,963 | | | $ | 5,314 | | | $ | 8,687 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.52 | %) | | | (2.27 | %) | | | (2.36 | %) | | | (2.29 | %) | | | (2.32 | %) | | | (0.93 | %) |
| Total expenses | | | 2.55 | % | | | 2.39 | % | | | 2.44 | % | | | 2.46 | % | | | 2.43 | % | | | 2.45 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 187 |
WEAKENING DOLLAR 2x STRATEGY FUND
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.93 | | | $ | 18.93 | | | $ | 20.32 | | | $ | 17.96 | | | $ | 16.37 | | | $ | 29.25 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.15 | ) | | | (.27 | ) | | | (.32 | ) | | | (.28 | ) | | | (.30 | ) | | | (.03 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.11 | | | | (1.73 | ) | | | (1.07 | ) | | | 2.64 | | | | 1.89 | | | | (8.80 | ) |
| Total from investment operations | | | .96 | | | | (2.00 | ) | | | (1.39 | ) | | | 2.36 | | | | 1.59 | | | | (8.83 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.28 | ) |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2.77 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | (4.05 | ) |
| Net asset value, end of period | | $ | 17.89 | | | $ | 16.93 | | | $ | 18.93 | | | $ | 20.32 | | | $ | 17.96 | | | $ | 16.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 5.67 | % | | | (10.57 | %) | | | (6.84 | %) | | | 13.14 | % | | | 9.71 | % | | | (29.86 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 6,658 | | | $ | 10,058 | | | $ | 13,551 | | | $ | 23,432 | | | $ | 30,036 | | | $ | 60,249 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.78 | %) | | | (1.52 | %) | | | (1.61 | %) | | | (1.54 | %) | | | (1.57 | %) | | | (0.13 | %) |
| Total expenses | | | 1.81 | % | | | 1.64 | % | | | 1.69 | % | | | 1.71 | % | | | 1.68 | % | | | 1.70 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 188 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
GOVERNMENT LONG BOND 1.2x STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correspond, before fees and expenses, to a benchmark for U.S. Government securities on a daily basis. The Fund’s current benchmark is 120% of the daily price movement of the Long Treasury Bond. The Long Treasury Bond is the U.S. Treasury bond with the longest maturity, which is currently 30 years. The price movement of the Long Treasury Bond is based on the daily price change of the most recently issued Long Treasury Bond. The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | January 3, 1994 |
| Advisor Class | August 1, 2003 |
| A-Class | March 31, 2004 |
| C-Class | May 2, 2001 |
The Fund invests principally in U.S. Government securities and in derivative investments such as futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 189 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| GOVERNMENT LONG BOND 1.2x STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| U.S. GOVERNMENT SECURITIES† - 86.6% | | | | | | | | |
| U.S. Treasury Bond | | | | | | | | |
| 3.62% due 08/15/43 | | $ | 50,954,000 | | | $ | 50,380,767 | |
| Total U.S. Government Securities | | | | | | | | |
| (Cost $48,783,887) | | | | | | | 50,380,767 | |
| REPURCHASE AGREEMENTS††,1 - 19.9% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 9,651,605 | | | | 9,651,605 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 1,089,401 | | | | 1,089,401 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 850,128 | | | | 850,128 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $11,591,134) | | | | | | | 11,591,134 | |
| Total Investments - 106.5% | | | | | | | | |
| (Cost $60,375,021) | | | | | | $ | 61,971,901 | |
| Other Assets & Liabilities, net - (6.5)% | | | | | | | (3,773,189 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 58,198,712 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain | |
| INTEREST RATE FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 U.S. Treasury Ultra Long Bond | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $20,874,000) | | | 147 | | | $ | 667,976 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 190 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
GOVERNMENT LONG BOND 1.2x STRATEGY FUND
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $48,783,887) | | $ | 50,380,767 | |
| Repurchase agreements, at value | | | | |
| (cost $11,591,134) | | | 11,591,134 | |
| Total investments | | | | |
| (cost $60,375,021) | | | 61,971,901 | |
| Cash | | | 87,000,378 | |
| Segregated cash with broker | | | 4,578,525 | |
| Receivables: | | | | |
| Securities sold | | | 92,151,500 | |
| Interest | | | 1,097,036 | |
| Fund shares sold | | | 84,683 | |
| Total assets | | | 246,884,023 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 187,553,168 | |
| Variation margin | | | 312,492 | |
| Management fees | | | 80,151 | |
| Distribution and service fees | | | 64,467 | |
| Transfer agent and administrative fees | | | 32,061 | |
| Portfolio accounting fees | | | 15,989 | |
| Miscellaneous | | | 626,983 | |
| Total liabilities | | | 188,685,311 | |
| Net assets | | $ | 58,198,712 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 103,437,078 | |
| Undistributed net investment income | | | 2,334 | |
| Accumulated net realized loss on investments | | | (47,505,556 | ) |
| Net unrealized appreciation on investments | | | 2,264,856 | |
| Net assets | | $ | 58,198,712 | |
| Investor Class: | | | | |
| Net assets | | $ | 26,041,266 | |
| Capital shares outstanding | | | 1,789,259 | |
| Net asset value per share | | $ | 14.55 | |
| Advisor Class: | | | | |
| Net assets | | $ | 17,641,471 | |
| Capital shares outstanding | | | 1,229,374 | |
| Net asset value per share | | $ | 14.35 | |
| A-Class: | | | | |
| Net assets | | $ | 11,020,968 | |
| Capital shares outstanding | | | 753,808 | |
| Net asset value per share | | $ | 14.62 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 15.35 | |
| C-Class: | | | | |
| Net assets | | $ | 3,495,007 | |
| Capital shares outstanding | | | 240,397 | |
| Net asset value per share | | $ | 14.54 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Interest | | $ | 2,916,266 | |
| Total investment income | | | 2,916,266 | |
| Expenses: | | | | |
| Management fees | | | 665,152 | |
| Transfer agent and administrative fees | | | 266,064 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 339,707 | |
| A-Class | | | 11,763 | |
| C-Class | | | 19,868 | |
| Portfolio accounting fees | | | 124,914 | |
| Custodian fees | | | 15,867 | |
| Trustees’ fees* | | | 14,375 | |
| Line of credit fees | | | 383 | |
| Miscellaneous | | | 199,784 | |
| Total expenses | | | 1,657,877 | |
| Net investment income | | | 1,258,389 | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | (25,055,021 | ) |
| Futures contracts | | | (18,606,531 | ) |
| Net realized loss | | | (43,661,552 | ) |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Investments | | | (673,736 | ) |
| Futures contracts | | | 1,485,390 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | 811,654 | |
| Net realized and unrealized loss | | | (42,849,898 | ) |
| Net decrease in net assets resulting | | | | |
| from operations | | $ | (41,591,509 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 191 |
GOVERNMENT LONG BOND 1.2x STRATEGY FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 1,258,389 | | | $ | 2,593,966 | |
| Net realized gain (loss) on investments | | | (43,661,552 | ) | | | 27,126,384 | |
| Net change in unrealized appreciation (depreciation) on investments | | | 811,654 | | | | 1,096,853 | |
| Net increase (decrease) in net assets resulting from operations | | | (41,591,509 | ) | | | 30,817,203 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Investor Class | | | (719,787 | ) | | | (2,127,527 | ) |
| Advisor Class | | | (479,727 | ) | | | (551,392 | ) |
| A-Class | | | (50,851 | ) | | | (66,997 | ) |
| C-Class | | | (5,690 | ) | | | (24,074 | ) |
| Net realized gains | | | | | | | | |
| Investor Class | | | — | | | | (623,474 | ) |
| Advisor Class | | | — | | | | (95,242 | ) |
| A-Class | | | — | | | | (10,206 | ) |
| C-Class | | | — | | | | (24,298 | ) |
| Total distributions to shareholders | | | (1,256,055 | ) | | | (3,523,210 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 833,399,441 | | | | 4,398,937,441 | |
| Advisor Class | | | 4,177,400,054 | | | | 2,577,283,551 | |
| A-Class | | | 53,225,590 | | | | 169,090,892 | |
| C-Class | | | 17,058,279 | | | | 58,589,050 | |
| Distributions reinvested | | | | | | | | |
| Investor Class | | | 693,711 | | | | 2,688,476 | |
| Advisor Class | | | 479,161 | | | | 641,252 | |
| A-Class | | | 18,719 | | | | 50,869 | |
| C-Class | | | 5,104 | | | | 44,860 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (1,083,328,820 | ) | | | (4,168,594,233 | ) |
| Advisor Class | | | (4,229,930,996 | ) | | | (2,508,113,796 | ) |
| A-Class | | | (55,976,741 | ) | | | (163,895,099 | ) |
| C-Class | | | (17,711,127 | ) | | | (58,947,953 | ) |
| Net increase (decrease) from capital share transactions | | | (304,667,625 | ) | | | 307,775,310 | |
| Net increase (decrease) in net assets | | | (347,515,189 | ) | | | 335,069,303 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 405,713,901 | | | | 70,644,598 | |
| End of period | | $ | 58,198,712 | | | $ | 405,713,901 | |
| Undistributed net investment income at end of period | | $ | 2,334 | | | $ | — | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 53,765,293 | | | | 263,692,387 | |
| Advisor Class | | | 276,660,318 | | | | 158,020,133 | |
| A-Class | | | 3,388,495 | | | | 10,204,545 | |
| C-Class | | | 1,108,500 | | | | 3,483,146 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Investor Class | | | 43,909 | | | | 156,605 | |
| Advisor Class | | | 32,229 | | | | 37,497 | |
| A-Class | | | 1,244 | | | | 2,987 | |
| C-Class | | | 350 | | | | 2,617 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (69,431,615 | ) | | | (249,368,699 | ) |
| Advisor Class | | | (281,923,075 | ) | | | (152,382,645 | ) |
| A-Class | | | (3,588,677 | ) | | | (9,984,222 | ) |
| C-Class | | | (1,152,558 | ) | | | (3,500,820 | ) |
| Net increase (decrease) in shares | | | (21,095,587 | ) | | | 20,363,531 | |
| 192 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
GOVERNMENT LONG BOND 1.2x STRATEGY FUND
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.18 | | | $ | 14.91 | | | $ | 11.43 | | | $ | 10.96 | | | $ | 13.74 | | | $ | 11.78 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .10 | | | | .19 | | | | .32 | | | | .36 | | | | .36 | | | | .36 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.62 | ) | | | 1.40 | | | | 3.48 | | | | .47 | | | | (2.78 | ) | | | 1.97 | |
| Total from investment operations | | | (1.52 | ) | | | 1.59 | | | | 3.80 | | | | .83 | | | | (2.42 | ) | | | 2.33 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (.11 | ) | | | (.24 | ) | | | (.32 | ) | | | (.36 | ) | | | (.36 | ) | | | (.37 | ) |
| Net realized gains | | | — | | | | (.08 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | (.11 | ) | | | (.32 | ) | | | (.32 | ) | | | (.36 | ) | | | (.36 | ) | | | (.37 | ) |
| Net asset value, end of period | | $ | 14.55 | | | $ | 16.18 | | | $ | 14.91 | | | $ | 11.43 | | | $ | 10.96 | | | $ | 13.74 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.43 | %) | | | 10.63 | % | | | 33.38 | % | | | 7.42 | % | | | (17.71 | %) | | | 20.17 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 26,041 | | | $ | 281,800 | | | $ | 43,709 | | | $ | 44,707 | | | $ | 282,388 | | | $ | 43,237 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 1.23 | % | | | 1.15 | % | | | 2.24 | % | | | 3.03 | % | | | 3.16 | % | | | 2.79 | % |
| Total expenses | | | 0.97 | % | | | 0.95 | % | | | 0.95 | % | | | 0.98 | % | | | 0.98 | % | | | 0.98 | % |
| Portfolio turnover rate | | | 1,226 | % | | | 1,759 | % | | | 2,322 | % | | | 1,930 | % | | | 1,503 | % | | | 1,794 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.08 | | | $ | 14.78 | | | $ | 11.36 | | | $ | 10.88 | | | $ | 13.66 | | | $ | 11.72 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .05 | | | | .11 | | | | .25 | | | | .31 | | | | .32 | | | | .31 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.71 | ) | | | 1.42 | | | | 3.42 | | | | .47 | | | | (2.80 | ) | | | 1.93 | |
| Total from investment operations | | | (1.66 | ) | | | 1.53 | | | | 3.67 | | | | .78 | | | | (2.48 | ) | | | 2.24 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (.07 | ) | | | (.15 | ) | | | (.25 | ) | | | (.30 | ) | | | (.30 | ) | | | (.30 | ) |
| Net realized gains | | | — | | | | (.08 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | (.07 | ) | | | (.23 | ) | | | (.25 | ) | | | (.30 | ) | | | (.30 | ) | | | (.30 | ) |
| Net asset value, end of period | | $ | 14.35 | | | $ | 16.08 | | | $ | 14.78 | | | $ | 11.36 | | | $ | 10.88 | | | $ | 13.66 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (10.06 | %) | | | 10.21 | % | | | 32.56 | % | | | 7.03 | % | | | (18.18 | %) | | | 19.49 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 17,641 | | | $ | 103,845 | | | $ | 11,600 | | | $ | 31,420 | | | $ | 28,990 | | | $ | 7,867 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.71 | % | | | 0.63 | % | | | 1.77 | % | | | 2.46 | % | | | 2.76 | % | | | 2.49 | % |
| Total expenses | | | 1.46 | % | | | 1.43 | % | | | 1.45 | % | | | 1.48 | % | | | 1.48 | % | | | 1.48 | % |
| Portfolio turnover rate | | | 1,226 | % | | | 1,759 | % | | | 2,322 | % | | | 1,930 | % | | | 1,503 | % | | | 1,794 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 193 |
GOVERNMENT LONG BOND 1.2x STRATEGY FUND
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.24 | | | $ | 14.92 | | | $ | 11.45 | | | $ | 10.96 | | | $ | 13.75 | | | $ | 11.79 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .09 | | | | .16 | | | | .29 | | | | .33 | | | | .33 | | | | .34 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.62 | ) | | | 1.43 | | | | 3.47 | | | | .49 | | | | (2.79 | ) | | | 1.95 | |
| Total from investment operations | | | (1.53 | ) | | | 1.59 | | | | 3.76 | | | | .82 | | | | (2.46 | ) | | | 2.29 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (.09 | ) | | | (.19 | ) | | | (.29 | ) | | | (.33 | ) | | | (.33 | ) | | | (.33 | ) |
| Net realized gains | | | — | | | | (.08 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | (.09 | ) | | | (.27 | ) | | | (.29 | ) | | | (.33 | ) | | | (.33 | ) | | | (.33 | ) |
| Net asset value, end of period | | $ | 14.62 | | | $ | 16.24 | | | $ | 14.92 | | | $ | 11.45 | | | $ | 10.96 | | | $ | 13.75 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.44 | %) | | | 10.62 | % | | | 33.00 | % | | | 7.35 | % | | | (17.98 | %) | | | 19.84 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 11,021 | | | $ | 15,476 | | | $ | 10,885 | | | $ | 2,753 | | | $ | 5,576 | | | $ | 11,119 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 1.08 | % | | | 0.94 | % | | | 2.02 | % | | | 2.75 | % | | | 2.84 | % | | | 2.74 | % |
| Total expenses | | | 1.22 | % | | | 1.20 | % | | | 1.20 | % | | | 1.23 | % | | | 1.24 | % | | | 1.23 | % |
| Portfolio turnover rate | | | 1,226 | % | | | 1,759 | % | | | 2,322 | % | | | 1,930 | % | | | 1,503 | % | | | 1,794 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 16.17 | | | $ | 14.88 | | | $ | 11.42 | | | $ | 10.94 | | | $ | 13.72 | | | $ | 11.77 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment incomeb | | | .03 | | | | .05 | | | | .19 | | | | .24 | | | | .25 | | | | .25 | |
| Net gain (loss) on investments (realized and unrealized) | | | (1.64 | ) | | | 1.40 | | | | 3.45 | | | | .48 | | | | (2.78 | ) | | | 1.94 | |
| Total from investment operations | | | (1.61 | ) | | | 1.45 | | | | 3.64 | | | | .72 | | | | (2.53 | ) | | | 2.19 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (.02 | ) | | | (.08 | ) | | | (.18 | ) | | | (.24 | ) | | | (.25 | ) | | | (.24 | ) |
| Net realized gains | | | — | | | | (.08 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | (.02 | ) | | | (.16 | ) | | | (.18 | ) | | | (.24 | ) | | | (.25 | ) | | | (.24 | ) |
| Net asset value, end of period | | $ | 14.54 | | | $ | 16.17 | | | $ | 14.88 | | | $ | 11.42 | | | $ | 10.94 | | | $ | 13.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (9.94 | %) | | | 9.69 | % | | | 32.01 | % | | | 6.47 | % | | | (18.56 | %) | | | 18.90 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 3,495 | | | $ | 4,594 | | | $ | 4,451 | | | $ | 6,091 | | | $ | 12,695 | | | $ | 5,502 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.40 | % | | | 0.31 | % | | | 1.32 | % | | | 1.93 | % | | | 2.17 | % | | | 2.00 | % |
| Total expenses | | | 1.97 | % | | | 1.94 | % | | | 1.95 | % | | | 1.97 | % | | | 2.00 | % | | | 1.97 | % |
| Portfolio turnover rate | | | 1,226 | % | | | 1,759 | % | | | 2,322 | % | | | 1,930 | % | | | 1,503 | % | | | 1,794 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment income per share 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. |
| 194 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE GOVERNMENT LONG BOND STRATEGY FUND
OBJECTIVE: Seeks to provide total returns that inversely correlate, before fees and expenses, to the price movements of a benchmark for U.S. Treasury debt instruments or futures contracts on a specified debt instrument on a daily basis. The Fund’s current benchmark is the inverse (opposite) of the daily price movement of the Long Treasury Bond. The Long Treasury Bond is the U.S. Treasury bond with the longest maturity, which is currently 30 years. The price movement of the Long Treasury Bond is based on the daily price change of the most recently issued Long Treasury Bond. The Fund does not seek to achieve its investment objective over a period of time greater than one day.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| Investor Class | March 3, 1995 |
| Advisor Class | August 1, 2003 |
| A-Class | March 31, 2004 |
| C-Class | March 28, 2001 |
The Fund invests principally in short sales and derivative investments such as futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 195 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE GOVERNMENT LONG BOND STRATEGY FUND |
| | | Face | | | | |
| | | Amount | | | Value | |
| | | | | | | | | |
| FEDERAL AGENCY DISCOUNT NOTES†† - 51.3% | | | | | | | | |
| Farmer Mac1 | | | | | | | | |
| 0.01% due 10/01/13 | | $ | 100,000,000 | | | $ | 100,000,000 | |
| 0.08% due 01/15/14 | | | 15,082,000 | | | | 15,081,109 | |
| 0.11% due 03/25/14 | | | 15,000,000 | | | | 14,997,810 | |
| 0.07% due 03/25/14 | | | 15,000,000 | | | | 14,997,810 | |
| 0.10% due 04/01/14 | | | 15,000,000 | | | | 14,996,970 | |
| 0.16% due 02/25/14 | | | 10,000,000 | | | | 9,998,780 | |
| 0.10% due 04/25/14 | | | 9,491,000 | | | | 9,488,827 | |
| Total Farmer Mac | | | | | | | 179,561,306 | |
| Freddie Mac2 | | | | | | | | |
| 0.12% due 10/16/13 | | | 15,000,000 | | | | 14,999,880 | |
| 0.08% due 02/24/14 | | | 15,000,000 | | | | 14,998,170 | |
| 0.09% due 03/13/14 | | | 15,000,000 | | | | 14,997,960 | |
| 0.11% due 06/10/14 | | | 15,000,000 | | | | 14,993,700 | |
| Total Freddie Mac | | | | | | | 59,989,710 | |
| Federal Home Loan Bank1 | | | | | | | | |
| 0.15% due 03/26/14 | | | 28,600,000 | | | | 28,595,796 | |
| 0.10% due 04/25/14 | | | 10,000,000 | | | | 9,997,710 | |
| Total Federal Home Loan Bank | | | | | | | 38,593,506 | |
| Fannie Mae2 | | | | | | | | |
| 0.07% due 01/03/14 | | | 15,000,000 | | | | 14,999,220 | |
| 0.12% due 02/18/14 | | | 10,000,000 | | | | 9,998,830 | |
| Total Fannie Mae | | | | | | | 24,998,050 | |
| Total Federal Agency Discount Notes | | | | | | | | |
| (Cost $303,078,622) | | | | | | | 303,142,572 | |
| FEDERAL AGENCY NOTES†† - 2.5% | | | | | | | | |
| Federal Home Loan Bank1 | | | | | | | | |
| 0.09% due 02/12/14 | | | 15,000,000 | | | | 15,000,540 | |
| Total Federal Agency Notes | | | | | | | | |
| (Cost $15,000,000) | | | | | | | 15,000,540 | |
| REPURCHASE AGREEMENTS†† - 53.2% | | | | | | | | |
| Individual Repurchase Agreement3 | | | | | | | | |
| Barclays Capital issued 09/30/13 | | | | | | | | |
| at (0.05)% due 10/01/13 | | | | | | | | |
| (secured by a U.S. Treasury | | | | | | | | |
| Bond, at rate of 3.63% and | | | | | | | | |
| maturing 08/15/43 as collateral, | | | | | | | | |
| with a value of $255,478,703 | | | | | | | | |
| to be repurchased at $250,468,968 | | | 250,469,316 | | | | 250,469,316 | |
| Joint Repurchase Agreements4 | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 53,325,588 | | | | 53,325,588 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 6,018,992 | | | | 6,018,992 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 4,696,996 | | | | 4,696,996 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $314,510,892) | | | | | | | 314,510,892 | |
| Total Long Investments - 107.0% | | | | | | | | |
| (Cost $632,589,514) | | | | | | $ | 632,654,004 | |
| U.S. GOVERNMENT SECURITIES SOLD SHORT† - (48.3)% | | | | | | | | |
| U.S. Treasury Bond | | | | | | | | |
| 3.62% due 08/15/43 | | | 288,919,000 | | | | (285,668,661 | ) |
| Total U.S. Government Securities Sold Short | | | | | | | | |
| (Proceeds $279,046,954) | | | | | | | (285,668,661 | ) |
| Other Assets & Liabilities, net - 41.3% | | | | | | | 244,009,896 | |
| Total Net Assets - 100.0% | | | | | | $ | 590,995,239 | |
| | | | | | Unrealized | |
| | | Contracts | | | Loss | |
| INTEREST RATE FUTURES CONTRACTS SOLD SHORT† | | | | | | | | |
| December 2013 U.S. Treasury Ultra Long Bond | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $341,652,000) | | | 2,406 | | | | (2,497,317 | ) |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government. |
| 2 | 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. |
| 3 | All or a portion of this security is pledged as short collateral at September 30, 2013. |
| 4 | Repurchase Agreements — See Note 5. |
| 196 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE GOVERNMENT LONG BOND STRATEGY FUND |
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited) | | | |
| September 30, 2013 | | | |
| | | | |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $318,078,622) | | $ | 318,143,112 | |
| Repurchase agreements, at value | | | | |
| (cost $314,510,892) | | | 314,510,892 | |
| Total investments | | | | |
| (cost $632,589,514) | | | 632,654,004 | |
| Segregated cash with broker | | | 3,847,950 | |
| Receivables: | | | | |
| Fund shares sold | | | 209,750,983 | |
| Securities sold | | | 32,431,000 | |
| Variation margin | | | 315,157 | |
| Interest | | | 153,380 | |
| Total assets | | | 879,152,474 | |
| Liabilities: | | | | |
| Securities sold short, at value | | | | |
| (proceeds $279,046,954) | | | 285,668,661 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 433,144 | |
| Management fees | | | 307,359 | |
| Distribution and service fees | | | 90,437 | |
| Transfer agent and administrative fees | | | 85,377 | |
| Portfolio accounting fees | | | 29,957 | |
| Miscellaneous | | | 1,542,300 | |
| Total liabilities | | | 288,157,235 | |
| Net assets | | $ | 590,995,239 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 1,023,333,647 | |
| Accumulated net investment loss | | | (9,231,465 | ) |
| Accumulated net realized loss on investments | | | (414,052,409 | ) |
| Net unrealized depreciation on investments | | | (9,054,534 | ) |
| Net assets | | $ | 590,995,239 | |
| Investor Class: | | | | |
| Net assets | | $ | 237,247,866 | |
| Capital shares outstanding | | | 24,469,224 | |
| Net asset value per share | | $ | 9.70 | |
| Advisor Class: | | | | |
| Net assets | | $ | 216,096,485 | |
| Capital shares outstanding | | | 23,464,441 | |
| Net asset value per share | | $ | 9.21 | |
| A-Class: | | | | |
| Net assets | | $ | 70,865,142 | |
| Capital shares outstanding | | | 7,518,521 | |
| Net asset value per share | | $ | 9.43 | |
| Maximum offering price per share (Net asset value divided by 95.25%) | | $ | 9.90 | |
| C-Class: | | | | |
| Net assets | | $ | 66,785,746 | |
| Capital shares outstanding | | | 7,815,611 | |
| Net asset value per share | | $ | 8.55 | |
STATEMENT OF
OPERATIONS (Unaudited) | | | |
| Period Ended September 30, 2013 | | | |
| | | | |
| Investment Income: | | | | |
| Interest | | $ | 50,009 | |
| Total investment income | | | 50,009 | |
| Expenses: | | | | |
| Management fees | | | 1,791,533 | |
| Transfer agent and administrative fees | | | 497,648 | |
| Distribution and service fees: | | | | |
| Advisor Class | | | 221,784 | |
| A-Class | | | 63,832 | |
| C-Class | | | 301,345 | |
| Portfolio accounting fees | | | 177,535 | |
| Short interest expense | | | 3,183,816 | |
| Custodian fees | | | 21,235 | |
| Trustees’ fees* | | | 19,318 | |
| Line of credit fees | | | 923 | |
| Miscellaneous | | | 293,509 | |
| Total expenses | | | 6,572,478 | |
| Net investment loss | | | (6,522,469 | ) |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Futures contracts | | | 23,516,584 | |
| Securities sold short | | | 16,828,560 | |
| Net realized gain | | | 40,345,144 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 60,467 | |
| Securities sold short | | | (5,415,305 | ) |
| Futures contracts | | | (2,292,969 | ) |
| Net change in unrealized appreciation (depreciation) | | | (7,647,807 | ) |
| Net realized and unrealized gain | | | 32,697,337 | |
| Net increase in net assets resulting from operations | | $ | 26,174,868 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 197 |
| INVERSE GOVERNMENT LONG BOND STRATEGY FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | | (Unaudited) | | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (6,522,469 | ) | | $ | (10,875,290 | ) |
| Net realized gain (loss) on investments | | | 40,345,144 | | | | (17,708,508 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (7,647,807 | ) | | | (24,405,350 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 26,174,868 | | | | (52,989,148 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Investor Class | | | 790,213,663 | | | | 3,594,467,805 | |
| Advisor Class | | | 3,319,462,468 | | | | 2,168,935,484 | |
| A-Class | | | 72,351,943 | | | | 100,243,846 | |
| C-Class | | | 19,350,756 | | | | 19,297,982 | |
| Cost of shares redeemed | | | | | | | | |
| Investor Class | | | (711,875,693 | ) | | | (3,668,091,952 | ) |
| Advisor Class | | | (3,116,722,095 | ) | | | (2,344,063,973 | ) |
| A-Class | | | (38,392,331 | ) | | | (101,709,475 | ) |
| C-Class | | | (13,329,111 | ) | | | (26,000,280 | ) |
| Net increase (decrease) from capital share transactions | | | 321,059,600 | | | | (256,920,563 | ) |
| Net increase (decrease) in net assets | | | 347,234,468 | | | | (309,909,711 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 243,760,771 | | | | 553,670,482 | |
| End of period | | $ | 590,995,239 | | | $ | 243,760,771 | |
| Accumulated net investment loss at end of period | | $ | (9,231,465 | ) | | $ | (2,708,996 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 84,876,624 | | | | 415,498,961 | |
| Advisor Class | | | 373,189,275 | | | | 260,105,303 | |
| A-Class | | | 7,765,990 | | | | 11,795,275 | |
| C-Class | | | 2,338,943 | | | | 2,497,307 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (76,764,047 | ) | | | (424,741,010 | ) |
| Advisor Class | | | (351,136,266 | ) | | | (280,261,535 | ) |
| A-Class | | | (4,087,003 | ) | | | (11,940,868 | ) |
| C-Class | | | (1,640,125 | ) | | | (3,412,838 | ) |
| Net increase (decrease) in shares | | | 34,543,391 | | | | (30,459,405 | ) |
| 198 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE GOVERNMENT LONG BOND STRATEGY 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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Investor Class | | | 2013a | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 8.79 | | | $ | 9.67 | | | $ | 13.08 | | | $ | 14.65 | | | $ | 13.32 | | | $ | 16.81 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.14 | ) | | | (.24 | ) | | | (.43 | ) | | | (.62 | ) | | | (.33 | ) | | | (.11 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.05 | | | | (.64 | ) | | | (2.98 | ) | | | (.95 | ) | | | 1.66 | | | | (3.38 | ) |
| Total from investment operations | | | .91 | | | | (.88 | ) | | | (3.41 | ) | | | (1.57 | ) | | | 1.33 | | | | (3.49 | ) |
| Net asset value, end of period | | $ | 9.70 | | | $ | 8.79 | | | $ | 9.67 | | | $ | 13.08 | | | $ | 14.65 | | | $ | 13.32 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 10.35 | % | | | (9.10 | %) | | | (26.07 | %) | | | (10.72 | %) | | | 9.98 | % | | | (20.76 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 237,248 | | | $ | 143,739 | | | $ | 247,454 | | | $ | 406,031 | | | $ | 376,574 | | | $ | 269,155 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (3.08 | %) | | | (2.82 | %) | | | (3.99 | %) | | | (4.78 | %) | | | (2.23 | %) | | | (0.72 | %) |
| Total expensesd | | | 3.10 | % | | | 2.99 | % | | | 4.13 | % | | | 5.06 | % | | | 2.53 | % | | | 2.80 | % |
| Portfolio turnover rate | | | 589 | % | | | 1,309 | % | | | 1,107 | % | | | 771 | % | | | 985 | % | | | 584 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Advisor Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 8.34 | | | $ | 9.23 | | | $ | 12.60 | | | $ | 14.17 | | | $ | 12.95 | | | $ | 16.41 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.14 | ) | | | (.27 | ) | | | (.41 | ) | | | (.66 | ) | | | (.39 | ) | | | (.18 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.01 | | | | (.62 | ) | | | (2.96 | ) | | | (.91 | ) | | | 1.61 | | | | (3.28 | ) |
| Total from investment operations | | | .87 | | | | (.89 | ) | | | (3.37 | ) | | | (1.57 | ) | | | 1.22 | | | | (3.46 | ) |
| Net asset value, end of period | | $ | 9.21 | | | $ | 8.34 | | | $ | 9.23 | | | $ | 12.60 | | | $ | 14.17 | | | $ | 12.95 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 10.43 | % | | | (9.64 | %) | | | (26.75 | %) | | | (11.08 | %) | | | 9.42 | % | | | (21.08 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 216,096 | | | $ | 11,776 | | | $ | 199,137 | | | $ | 44,798 | | | $ | 66,668 | | | $ | 35,153 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (3.13 | %) | | | (3.29 | %) | | | (4.22 | %) | | | (5.28 | %) | | | (2.79 | %) | | | (1.19 | %) |
| Total expensesd | | | 3.15 | % | | | 3.45 | % | | | 4.38 | % | | | 5.56 | % | | | 3.09 | % | | | 3.36 | % |
| Portfolio turnover rate | | | 589 | % | | | 1,309 | % | | | 1,107 | % | | | 771 | % | | | 985 | % | | | 584 | % |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 199 |
| INVERSE GOVERNMENT LONG BOND STRATEGY FUND |
FINANCIAL HIGHLIGHTS (concluded)
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 8.55 | | | $ | 9.44 | | | $ | 12.80 | | | $ | 14.36 | | | $ | 13.10 | | | $ | 16.57 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.15 | ) | | | (.27 | ) | | | (.45 | ) | | | (.64 | ) | | | (.35 | ) | | | (.15 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | 1.03 | | | | (.62 | ) | | | (2.91 | ) | | | (.92 | ) | | | 1.61 | | | | (3.32 | ) |
| Total from investment operations | | | .88 | | | | (.89 | ) | | | (3.36 | ) | | | (1.56 | ) | | | 1.26 | | | | (3.47 | ) |
| Net asset value, end of period | | $ | 9.43 | | | $ | 8.55 | | | $ | 9.44 | | | $ | 12.80 | | | $ | 14.36 | | | $ | 13.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 10.29 | % | | | (9.43 | %) | | | (26.25 | %) | | | (10.86 | %) | | | 9.62 | % | | | (20.94 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 70,865 | | | $ | 32,842 | | | $ | 37,607 | | | $ | 73,475 | | | $ | 80,151 | | | $ | 54,574 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (3.36 | %) | | | (3.20 | %) | | | (4.24 | %) | | | (5.03 | %) | | | (2.47 | %) | | | (0.94 | %) |
| Total expensesd | | | 3.39 | % | | | 3.37 | % | | | 4.38 | % | | | 5.31 | % | | | 2.77 | % | | | 3.00 | % |
| Portfolio turnover rate | | | 589 | % | | | 1,309 | % | | | 1,107 | % | | | 771 | % | | | 985 | % | | | 584 | % |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 7.78 | | | $ | 8.65 | | | $ | 11.82 | | | $ | 13.36 | | | $ | 12.28 | | | $ | 15.65 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.17 | ) | | | (.30 | ) | | | (.48 | ) | | | (.68 | ) | | | (.43 | ) | | | (.25 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | .94 | | | | (.57 | ) | | | (2.69 | ) | | | (.86 | ) | | | 1.51 | | | | (3.12 | ) |
| Total from investment operations | | | .77 | | | | (.87 | ) | | | (3.17 | ) | | | (1.54 | ) | | | 1.08 | | | | (3.37 | ) |
| Net asset value, end of period | | $ | 8.55 | | | $ | 7.78 | | | $ | 8.65 | | | $ | 11.82 | | | $ | 13.36 | | | $ | 12.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 9.90 | % | | | (10.06 | %) | | | (26.82 | %) | | | (11.53 | %) | | | 8.79 | % | | | (21.53 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 66,786 | | | $ | 55,404 | | | $ | 69,472 | | | $ | 114,470 | | | $ | 140,451 | | | $ | 123,413 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (4.08 | %) | | | (3.96 | %) | | | (4.98 | %) | | | (5.78 | %) | | | (3.17 | %) | | | (1.70 | %) |
| Total expensesd | | | 4.11 | % | | | 4.13 | % | | | 5.12 | % | | | 6.06 | % | | | 3.47 | % | | | 3.81 | % |
| Portfolio turnover rate | | | 589 | % | | | 1,309 | % | | | 1,107 | % | | | 771 | % | | | 985 | % | | | 584 | % |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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 expenses may include interest expense related to short sales. Excluding interest expense, the operating expense ratios for the period and years ended would be: |
| | | 09/30/13 | | 03/28/13 | | 03/31/12 | | 03/31/11 | | 03/31/10 | | 03/31/09 |
| Investor Class | | | 1.41 | % | | | 1.39 | % | | | 1.39 | % | | | 1.42 | % | | | 1.41 | % | | | 1.41 | % |
| Advisor Class | | | 1.90 | % | | | 1.88 | % | | | 1.87 | % | | | 1.91 | % | | | 1.91 | % | | | 1.91 | % |
| A-Class | | | 1.66 | % | | | 1.64 | % | | | 1.65 | % | | | 1.67 | % | | | 1.66 | % | | | 1.65 | % |
| C-Class | | | 2.41 | % | | | 2.39 | % | | | 2.40 | % | | | 2.42 | % | | | 2.41 | % | | | 2.41 | % |
| 200 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
HIGH YIELD STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of the high yield bond market.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | April 16, 2007 |
| C-Class | April 16, 2007 |
| H-Class | April 16, 2007 |
The Fund invests principally in derivative investments such as high yield credit default swap agreements and futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 201 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| HIGH YIELD STRATEGY FUND |
| | | Shares | | | Value | |
| EXCHANGE TRADED FUNDS† - 1.9% | | | | | | | | |
| iShares iBoxx $ High Yield | | | | | | | | |
| Corporate Bond ETF | | | 18,098 | | | $ | 1,657,053 | |
| Total Exchange Traded Funds | | | | | | | | |
| (Cost $1,589,673) | | | | | | | 1,657,053 | |
| | | | Face | | | | | |
| | | | Amount | | | | | |
| REPURCHASE AGREEMENTS††,1 - 93.6% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 70,553,888 | | | | 70,553,888 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 7,963,593 | | | | 7,963,593 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 6,214,491 | | | | 6,214,491 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 220,034 | | | | 220,034 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $84,952,006) | | | | | | | 84,952,006 | |
| Total Investments - 95.5% | | | | | | | | |
| (Cost $86,541,679) | | | | | | $ | 86,609,059 | |
| Other Assets & Liabilities, net - 4.5% | | | | | | | 4,120,243 | |
| Total Net Assets - 100.0% | | | | | | $ | 90,729,302 | |
| | | | | | Unrealized | |
| | | Contracts | | | Gain | |
| INTEREST RATE FUTURES CONTRACTS PURCHASED† | | | | | | | | |
| December 2013 U.S. Treasury 5 Year Note | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $74,090,250) | | | 612 | | | $ | 725,746 | |
| CREDIT DEFAULT SWAP AGREEMENT PROTECTION SOLD††,3 |
| | | | | Protection | | | | | | | | | | | | Upfront | | | | |
| | | | | Premium | | | Maturity | | | Notional | | | Notional | | | Payments | | | Unrealized | |
| Index | | Counterparty | | Rate | | | Date | | | Principal | | | Value | | | Paid | | | Depreciation | |
| CDX.NA.HY-21 Index | | Goldman Sachs International | | | 5.00 | % | | | 12/20/18 | | | $ | 10,000,000 | | | $ | (10,437,500 | ) | | $ | 461,773 | | | $ | (24,273 | ) |
| CDX.NA.HY-21 Index | | Barclays Bank plc | | | 5.00 | % | | | 12/20/18 | | | | 74,300,000 | | | | (77,550,625 | ) | | | 3,430,975 | | | | (180,350 | ) |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as credit default swap collateral at September 30, 2013. |
| 3 | Credit Default Swaps — See Note 6. |
| 202 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
HIGH YIELD STRATEGY FUND
STATEMENT OF ASSETS
AND LIABILITIES (Unaudited)
September 30, 2013
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $1,589,673) | | $ | 1,657,053 | |
| Repurchase agreements, at value | | | | |
| (cost $84,952,006) | | | 84,952,006 | |
| Total investments | | | | |
| (cost $86,541,679) | | | 86,609,059 | |
| Segregated cash with broker | | | 1,433,087 | |
| Unamortized upfront payments paid | | | | |
| on credit default swaps | | | 3,892,748 | |
| Receivables: | | | | |
| Protection fees on credit default swaps | | | 131,824 | |
| Fund shares sold | | | 77,263 | |
| Variation margin | | | 53,026 | |
| Credit default swaps settlement | | | 42,295 | |
| Interest | | | 84 | |
| Total assets | | | 92,239,386 | |
| Liabilities: | | | | |
| Unrealized depreciation on swap agreements | | | 204,623 | |
| Overdraft due to custodian bank | | | 3 | |
| Payable for: | | | | |
| Fund shares redeemed | | | 1,064,388 | |
| Management fees | | | 31,316 | |
| Distribution and service fees | | | 13,219 | |
| Transfer agent and administrative fees | | | 10,439 | |
| Portfolio accounting fees | | | 4,175 | |
| Custodian fees | | | 493 | |
| Miscellaneous | | | 181,428 | |
| Total liabilities | | | 1,510,084 | |
| Net assets | | $ | 90,729,302 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 59,105,235 | |
| Undistributed net investment income | | | 5,015,420 | |
| Accumulated net realized gain on investments | | | 26,020,144 | |
| Net unrealized appreciation on investments | | | 588,503 | |
| Net assets | | $ | 90,729,302 | |
| A-Class: | | | | |
| Net assets | | $ | 17,469,382 | |
| Capital shares outstanding | | | 677,382 | |
| Net asset value per share | | $ | 25.79 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 27.08 | |
| C-Class: | | | | |
| Net assets | | $ | 4,311,928 | |
| Capital shares outstanding | | | 177,165 | |
| Net asset value per share | | $ | 24.34 | |
| H-Class: | | | | |
| Net assets | | $ | 68,947,992 | |
| Capital shares outstanding | | | 2,669,308 | |
| Net asset value per share | | $ | 25.83 | |
STATEMENT OF
OPERATIONS (Unaudited)
Period Ended September 30, 2013
| Investment Income: | | | | |
| Dividends | | $ | 621,965 | |
| Interest | | | 42,647 | |
| Income from securities lending, net | | | 7,401 | |
| Total investment income | | | 672,013 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 763,998 | |
| Transfer agent and administrative fees | | | 254,666 | |
| Distribution and service fees: | | | | |
| A-Class | | | 15,891 | |
| C-Class | | | 31,513 | |
| H-Class | | | 230,897 | |
| Portfolio accounting fees | | | 92,713 | |
| Registration fees | | | 95,005 | |
| Trustees’ fees* | | | 20,711 | |
| Custodian fees | | | 8,304 | |
| Prime broker interest expense | | | 1,248 | |
| Miscellaneous | | | 53,293 | |
| Total expenses | | | 1,568,239 | |
| Net investment loss | | | (896,226 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 393,833 | |
| Swap agreements | | | 6,491,975 | |
| Futures contracts | | | (2,919,840 | ) |
| Net realized gain | | | 3,965,968 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) on: | | | | |
| Investments | | | (1,097,451 | ) |
| Swap agreements | | | (946,590 | ) |
| Futures contracts | | | 362,984 | |
| Net change in unrealized appreciation | | | | |
| (depreciation) | | | (1,681,057 | ) |
| Net realized and unrealized gain | | | 2,284,911 | |
| Net increase in net assets resulting | | | | |
| from operations | | $ | 1,388,685 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 203 |
HIGH YIELD STRATEGY FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (896,226 | ) | | $ | (3,556,053 | ) |
| Net realized gain on investments | | | 3,965,968 | | | | 38,742,737 | |
| Net change in unrealized appreciation (depreciation) on investments | | | (1,681,057 | ) | | | 4,323,218 | |
| Net increase in net assets resulting from operations | | | 1,388,685 | | | | 39,509,902 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| A-Class | | | — | | | | (512,061 | ) |
| C-Class | | | — | | | | (118,088 | ) |
| H-Class | | | — | | | | (7,099,893 | ) |
| Net realized gains | | | | | | | | |
| A-Class | | | — | | | | (289,960 | ) |
| C-Class | | | — | | | | (66,869 | ) |
| H-Class | | | — | | | | (4,020,392 | ) |
| Total distributions to shareholders | | | — | | | | (12,107,263 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 94,291,478 | | | | 180,394,541 | |
| C-Class | | | 14,925,329 | | | | 58,421,116 | |
| H-Class | | | 360,607,609 | | | | 857,060,522 | |
| Distributions reinvested | | | | | | | | |
| A-Class | | | — | | | | 378,053 | |
| C-Class | | | — | | | | 169,710 | |
| H-Class | | | — | | | | 10,977,334 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (88,121,779 | ) | | | (183,362,099 | ) |
| C-Class | | | (17,656,328 | ) | | | (59,616,169 | ) |
| H-Class | | | (726,554,110 | ) | | | (726,159,066 | ) |
| Net increase (decrease) from capital share transactions | | | (362,507,801 | ) | | | 138,263,942 | |
| Net increase (decrease) in net assets | | | (361,119,116 | ) | | | 165,666,581 | |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 451,848,418 | | | | 286,181,837 | |
| End of period | | $ | 90,729,302 | | | $ | 451,848,418 | |
| Undistributed net investment income at end of period | | $ | 5,015,420 | | | $ | 5,911,646 | |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 3,715,680 | | | | 7,565,849 | |
| C-Class | | | 617,906 | | | | 2,584,176 | |
| H-Class | | | 14,158,033 | | | | 36,387,768 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| A-Class | | | — | | | | 15,798 | |
| C-Class | | | — | | | | 7,470 | |
| H-Class | | | — | | | | 459,495 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (3,466,655 | ) | | | (7,671,852 | ) |
| C-Class | | | (732,755 | ) | | | (2,634,577 | ) |
| H-Class | | | (28,771,982 | ) | | | (31,221,244 | ) |
| Net increase (decrease) in shares | | | (14,479,773 | ) | | | 5,492,883 | |
| 204 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
HIGH YIELD STRATEGY FUND
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 25.16 | | | $ | 22.93 | | | $ | 21.98 | | | $ | 20.42 | | | $ | 16.64 | | | $ | 24.31 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.15 | ) | | | (.22 | ) | | | (.27 | ) | | | (.30 | ) | | | (.26 | ) | | | (.16 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | .78 | | | | 3.13 | | | | 1.77 | | | | 3.37 | | | | 5.39 | | | | (3.51 | ) |
| Total from investment operations | | | .63 | | | | 2.91 | | | | 1.50 | | | | 3.07 | | | | 5.13 | | | | (3.67 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.43 | ) | | | (.55 | ) | | | (1.51 | ) | | | (1.35 | ) | | | (4.00 | ) |
| Net realized gains | | | — | | | | (.25 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.68 | ) | | | (.55 | ) | | | (1.51 | ) | | | (1.35 | ) | | | (4.00 | ) |
| Net asset value, end of period | | $ | 25.79 | | | $ | 25.16 | | | $ | 22.93 | | | $ | 21.98 | | | $ | 20.42 | | | $ | 16.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 2.50 | % | | | 12.86 | % | | | 6.94 | % | | | 15.21 | % | | | 31.07 | % | | | (16.15 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 17,469 | | | $ | 10,777 | | | $ | 11,890 | | | $ | 14,561 | | | $ | 4,800 | | | $ | 5,748 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.14 | %) | | | (0.92 | %) | | | (1.21 | %) | | | (1.40 | %) | | | (1.37 | %) | | | (0.71 | %) |
| Total expensesd | | | 1.51 | % | | | 1.50 | % | | | 1.49 | % | | | 1.54 | % | | | 1.54 | % | | | 1.57 | % |
| Portfolio turnover rate | | | 5 | % | | | 95 | % | | | 583 | % | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 23.83 | | | $ | 21.92 | | | $ | 21.19 | | | $ | 19.87 | | | $ | 16.33 | | | $ | 24.12 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.22 | ) | | | (.37 | ) | | | (.45 | ) | | | (.45 | ) | | | (.40 | ) | | | (.25 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | .73 | | | | 2.96 | | | | 1.73 | | | | 3.28 | | | | 5.29 | | | | (3.54 | ) |
| Total from investment operations | | | .51 | | | | 2.59 | | | | 1.28 | | | | 2.83 | | | | 4.89 | | | | (3.79 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.43 | ) | | | (.55 | ) | | | (1.51 | ) | | | (1.35 | ) | | | (4.00 | ) |
| Net realized gains | | | — | | | | (.25 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.68 | ) | | | (.55 | ) | | | (1.51 | ) | | | (1.35 | ) | | | (4.00 | ) |
| Net asset value, end of period | | $ | 24.34 | | | $ | 23.83 | | | $ | 21.92 | | | $ | 21.19 | | | $ | 19.87 | | | $ | 16.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 2.14 | % | | | 11.98 | % | | | 6.16 | % | | | 14.40 | % | | | 30.17 | % | | | (16.83 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 4,312 | | | $ | 6,958 | | | $ | 7,343 | | | $ | 6,129 | | | $ | 3,351 | | | $ | 1,773 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.80 | %) | | | (1.62 | %) | | | (2.10 | %) | | | (2.13 | %) | | | (2.13 | %) | | | (1.21 | %) |
| Total expensesd | | | 2.27 | % | | | 2.27 | % | | | 2.25 | % | | | 2.28 | % | | | 2.29 | % | | | 2.32 | % |
| Portfolio turnover rate | | | 5 | % | | | 95 | % | | | 583 | % | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 205 |
| HIGH YIELD STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 25.12 | | | $ | 22.90 | | | $ | 21.95 | | | $ | 20.38 | | | $ | 16.61 | | | $ | 24.28 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.11 | ) | | | (.24 | ) | | | (.28 | ) | | | (.30 | ) | | | (.26 | ) | | | (.04 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | .82 | | | | 3.14 | | | | 1.78 | | | | 3.38 | | | | 5.38 | | | | (3.63 | ) |
| Total from investment operations | | | .71 | | | | 2.90 | | | | 1.50 | | | | 3.08 | | | | 5.12 | | | | (3.67 | ) |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | (.43 | ) | | | (.55 | ) | | | (1.51 | ) | | | (1.35 | ) | | | (4.00 | ) |
| Net realized gains | | | — | | | | (.25 | ) | | | — | | | | — | | | | — | | | | — | |
| Total distributions | | | — | | | | (.68 | ) | | | (.55 | ) | | | (1.51 | ) | | | (1.35 | ) | | | (4.00 | ) |
| Net asset value, end of period | | $ | 25.83 | | | $ | 25.12 | | | $ | 22.90 | | | $ | 21.95 | | | $ | 20.38 | | | $ | 16.61 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | 2.83 | % | | | 12.83 | % | | | 6.95 | % | | | 15.29 | % | | | 31.07 | % | | | (16.16 | %) |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 68,948 | | | $ | 434,113 | | | $ | 266,950 | | | $ | 116,106 | | | $ | 16,368 | | | $ | 239,528 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (0.83 | %) | | | (0.99 | %) | | | (1.26 | %) | | | (1.38 | %) | | | (1.37 | %) | | | (0.20 | %) |
| Total expensesd | | | 1.52 | % | | | 1.51 | % | | | 1.49 | % | | | 1.53 | % | | | 1.53 | % | | | 1.56 | % |
| Portfolio turnover rate | | | 5 | % | | | 95 | % | | | 583 | % | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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 | Does not include expenses of the underlying funds in which the Fund invests. |
| 206 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
INVERSE HIGH YIELD STRATEGY FUND
OBJECTIVE: Seeks to provide investment results that inversely correlate, before fees and expenses, to the performance of the high yield bond market.
Holdings Diversification (Market Exposure as % of Net Assets)
“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.
| Inception Dates: | |
| A-Class | April 16, 2007 |
| C-Class | April 16, 2007 |
| H-Class | April 16, 2007 |
The Fund invests principally in derivative investments such as high yield credit default swap agreements and futures contracts.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 207 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| INVERSE HIGH YIELD STRATEGY FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| REPURCHASE AGREEMENTS††,1 - 46.5% | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | $ | 7,956,999 | | | $ | 7,956,999 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 898,126 | | | | 898,126 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 700,864 | | | | 700,864 | |
| Credit Suisse Group | | | | | | | | |
| issued 09/30/13 at 0.01% | | | | | | | | |
| due 10/01/132 | | | 65,980 | | | | 65,980 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $9,621,969) | | | | | | | 9,621,969 | |
| Total Investments - 46.5% | | | | | | | | |
| (Cost $9,621,969) | | | | | | $ | 9,621,969 | |
| Other Assets & Liabilities, net - 53.5% | | | | | | | 11,053,431 | |
| Total Net Assets - 100.0% | | | | | | $ | 20,675,400 | |
| | | | | | | | | |
| | | | | | Unrealized | |
| | | Contracts | | | Loss | |
| INTEREST RATE FUTURES CONTRACTS SOLD SHORT† | | | | | | | | |
| December 2013 U.S. Treasury 5 Year Note | | | | | | | | |
| Futures Contracts | | | | | | | | |
| (Aggregate Value of | | | | | | | | |
| Contracts $17,190,875) | | | 142 | | | $ | (60,393 | ) |
CREDIT DEFAULT SWAP AGREEMENT PROTECTION PURCHASED††,3
| | | | | Protection | | | | | | | | | | | Upfront | | | | |
| | | | | Premium | | | Maturity | | Notional | | | Notional | | | Payments | | | Unrealized | |
| Index | | Counterparty | | Rate | | | Date | | Principal | | | Value | | | Received | | | Appreciation | |
| CDX.NA.HY-21 Index | | Barclays Bank plc | | | 5.00 | % | | 12/20/18 | | $ | 19,800,000 | | | $ | 20,666,250 | | | $ | (883,208 | ) | | $ | 16,958 | |
| † | Value determined based on Level 1 inputs — See Note 4. |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | Repurchase Agreements — See Note 5. |
| 2 | All or a portion of this security is pledged as credit default swap collateral at September 30, 2013. |
| 3 | Credit Default Swaps — See Note 6. |
| 208 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE HIGH YIELD STRATEGY FUND |
| |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
September 30, 2013
| Assets: | | | | |
| Repurchase agreements, at value | | | | |
| (cost $9,621,969) | | $ | 9,621,969 | |
| Segregated cash with broker | | | 855,931 | |
| Unrealized appreciation on swap agreements | | | 16,958 | |
| Receivables: | | | | |
| Fund shares sold | | | 10,701,405 | |
| Credit default swaps settlement | | | 443,333 | |
| Protection fees on credit default swaps | | | 1,839 | |
| Total assets | | | 21,641,435 | |
| Liabilities: | | | | |
| Unamortized upfront payments received on credit default swaps | | | 883,208 | |
| Payable for: | | | | |
| Management fees | | | 17,723 | |
| Fund shares redeemed | | | 11,516 | |
| Distribution and service fees | | | 7,442 | |
| Variation margin | | | 7,073 | |
| Transfer agent and administrative fees | | | 5,908 | |
| Portfolio accounting fees | | | 2,363 | |
| Miscellaneous | | | 30,802 | |
| Total liabilities | | | 966,035 | |
| Net assets | | $ | 20,675,400 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 35,993,617 | |
| Accumulated net investment loss | | | (580,393 | ) |
| Accumulated net realized loss on investments | | | (14,694,389 | ) |
| Net unrealized depreciation on investments | | | (43,435 | ) |
| Net assets | | $ | 20,675,400 | |
| A-Class: | | | | |
| Net assets | | $ | 757,641 | |
| Capital shares outstanding | | | 33,175 | |
| Net asset value per share | | $ | 22.84 | |
| Maximum offering price per share | | | | |
| (Net asset value divided by 95.25%) | | $ | 23.98 | |
| C-Class: | | | | |
| Net assets | | $ | 1,749,761 | |
| Capital shares outstanding | | | 80,277 | |
| Net asset value per share | | $ | 21.80 | |
| H-Class: | | | | |
| Net assets | | $ | 18,167,998 | |
| Capital shares outstanding | | | 792,339 | |
| Net asset value per share | | $ | 22.93 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
Period Ended September 30, 2013
| Investment Income: | | | | |
| Interest | | $ | 3,921 | |
| Total investment income | | | 3,921 | |
| | | | | |
| Expenses: | | | | |
| Management fees | | | 172,185 | |
| Transfer agent and administrative fees | | | 57,395 | |
| Distribution and service fees: | | | | |
| A-Class | | | 13,833 | |
| C-Class | | | 10,740 | |
| H-Class | | | 40,877 | |
| Portfolio accounting fees | | | 22,958 | |
| Custodian fees | | | 2,507 | |
| Trustees’ fees* | | | 1,275 | |
| Prime broker interest expense | | | 356 | |
| Miscellaneous | | | 34,690 | |
| Total expenses | | | 356,816 | |
| Net investment loss | | | (352,895 | ) |
| | | | | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 44,654 | |
| Swap agreements | | | (1,778,668 | ) |
| Futures contracts | | | 1,833,744 | |
| Net realized gain | | | 99,730 | |
Net change in unrealized appreciation
(depreciation) on: | | | | |
| Swap agreements | | | 37,831 | |
| Futures contracts | | | (51,233 | ) |
Net change in unrealized appreciation
(depreciation) | | | (13,402 | ) |
| Net realized and unrealized gain | | | 86,328 | |
| Net decrease in net assets resulting from operations | | $ | (266,567 | ) |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 209 |
| INVERSE HIGH YIELD STRATEGY FUND |
| |
| STATEMENTS OF CHANGES IN NET ASSETS |
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| | | | | | | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment loss | | $ | (352,895 | ) | | $ | (269,189 | ) |
| Net realized gain (loss) on investments | | | 99,730 | | | | (4,159,614 | ) |
| Net change in unrealized appreciation (depreciation) on investments | | | (13,402 | ) | | | (105,367 | ) |
| Net decrease in net assets resulting from operations | | | (266,567 | ) | | | (4,534,170 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| A-Class | | | 77,650,249 | | | | 60,080,922 | |
| C-Class | | | 8,581,241 | | | | 8,417,111 | |
| H-Class | | | 246,549,885 | | | | 384,851,085 | |
| Cost of shares redeemed | | | | | | | | |
| A-Class | | | (77,187,852 | ) | | | (59,399,320 | ) |
| C-Class | | | (8,739,289 | ) | | | (6,874,799 | ) |
| H-Class | | | (237,314,401 | ) | | | (385,744,592 | ) |
| Net increase from capital share transactions | | | 9,539,833 | | | | 1,330,407 | |
| Net increase (decrease) in net assets | | | 9,273,266 | | | | (3,203,763 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of period | | | 11,402,134 | | | | 14,605,897 | |
| End of period | | $ | 20,675,400 | | | $ | 11,402,134 | |
| Accumulated net investment loss at end of period | | $ | (580,393 | ) | | $ | (227,498 | ) |
| | | | | | | | | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| A-Class | | | 3,291,871 | | | | 2,222,764 | |
| C-Class | | | 380,553 | | | | 339,193 | |
| H-Class | | | 10,448,355 | | | | 14,453,392 | |
| Shares redeemed | | | | | | | | |
| A-Class | | | (3,265,224 | ) | | | (2,235,986 | ) |
| C-Class | | | (388,919 | ) | | | (276,015 | ) |
| H-Class | | | (10,039,043 | ) | | | (14,543,669 | ) |
| Net increase (decrease) in shares | | | 427,593 | | | | (40,321 | ) |
| 210 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| INVERSE HIGH YIELD STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| A-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 23.98 | | | $ | 28.15 | | | $ | 31.99 | | | $ | 38.51 | | | $ | 55.13 | | | $ | 51.26 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.18 | ) | | | (.37 | ) | | | (.43 | ) | | | (.47 | ) | | | (.63 | ) | | | (.10 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (.96 | ) | | | (3.80 | ) | | | (3.41 | ) | | | (6.05 | ) | | | (15.60 | ) | | | 5.29 | |
| Total from investment operations | | | (1.14 | ) | | | (4.17 | ) | | | (3.84 | ) | | | (6.52 | ) | | | (16.23 | ) | | | 5.19 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) | | | (1.32 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) | | | (1.32 | ) |
| Net asset value, end of period | | $ | 22.84 | | | $ | 23.98 | | | $ | 28.15 | | | $ | 31.99 | | | $ | 38.51 | | | $ | 55.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (4.75 | %) | | | (14.81 | %) | | | (11.98 | %) | | | (16.96 | %) | | | 29.47 | % | | | 10.17 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 758 | | | $ | 157 | | | $ | 556 | | | $ | 1,512 | | | $ | 2,269 | | | $ | 2,278 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.51 | %) | | | (1.38 | %) | | | (1.39 | %) | | | (1.39 | %) | | | (1.43 | %) | | | (0.19 | %) |
| Total expenses | | | 1.52 | % | | | 1.49 | % | | | 1.51 | % | | | 1.53 | % | | | 1.54 | % | | | 1.52 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | Period Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | | | Year Ended | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| C-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 22.98 | | | $ | 27.21 | | | $ | 31.12 | | | $ | 37.77 | | | $ | 54.49 | | | $ | 51.06 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.25 | ) | | | (.53 | ) | | | (.55 | ) | | | (.72 | ) | | | (.95 | ) | | | (.52 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (.93 | ) | | | (3.70 | ) | | | (3.36 | ) | | | (5.93 | ) | | | (15.38 | ) | | | 5.27 | |
| Total from investment operations | | | (1.18 | ) | | | (4.23 | ) | | | (3.91 | ) | | | (6.65 | ) | | | (16.33 | ) | | | 4.75 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) | | | (1.32 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) | | | (1.32 | ) |
| Net asset value, end of period | | $ | 21.80 | | | $ | 22.98 | | | $ | 27.21 | | | $ | 31.12 | | | $ | 37.77 | | | $ | 54.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (5.13 | %) | | | (15.51 | %) | | | (12.60 | %) | | | (17.61 | %) | | | (30.00 | %) | | | 9.34 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 1,750 | | | $ | 2,037 | | | $ | 693 | | | $ | 2,535 | | | $ | 2,055 | | | $ | 869 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (2.24 | %) | | | (2.13 | %) | | | (1.87 | %) | | | (2.13 | %) | | | (2.18 | %) | | | (1.00 | %) |
| Total expenses | | | 2.27 | % | | | 2.25 | % | | | 2.26 | % | | | 2.28 | % | | | 2.29 | % | | | 2.28 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 211 |
| INVERSE HIGH YIELD STRATEGY FUND |
| |
| FINANCIAL HIGHLIGHTS (concluded) |
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| H-Class | | 2013a | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 24.04 | | | $ | 28.22 | | | $ | 32.04 | | | $ | 38.60 | | | $ | 55.26 | | | $ | 51.38 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment lossb | | | (.18 | ) | | | (.36 | ) | | | (.47 | ) | | | (.50 | ) | | | (.61 | ) | | | (.29 | ) |
| Net gain (loss) on investments (realized and unrealized) | | | (.93 | ) | | | (3.82 | ) | | | (3.35 | ) | | | (6.06 | ) | | | (15.66 | ) | | | 5.49 | |
| Total from investment operations | | | (1.11 | ) | | | (4.18 | ) | | | (3.82 | ) | | | (6.56 | ) | | | (16.27 | ) | | | 5.20 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized gains | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) | | | (1.32 | ) |
| Total distributions | | | — | | | | — | | | | — | | | | — | | | | (.39 | ) | | | (1.32 | ) |
| Net asset value, end of period | | $ | 22.93 | | | $ | 24.04 | | | $ | 28.22 | | | $ | 32.04 | | | $ | 38.60 | | | $ | 55.26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Returnc | | | (4.62 | %) | | | (14.81 | %) | | | (11.92 | %) | | | (16.99 | %) | | | (29.47 | %) | | | 10.17 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 18,168 | | | $ | 9,208 | | | $ | 13,357 | | | $ | 9,699 | | | $ | 27,954 | | | $ | 13,799 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | (1.50 | %) | | | (1.38 | %) | | | (1.51 | %) | | | (1.38 | %) | | | (1.43 | %) | | | (0.55 | %) |
| Total expenses | | | 1.52 | % | | | 1.50 | % | | | 1.51 | % | | | 1.53 | % | | | 1.53 | % | | | 1.53 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| b | Net investment loss per share 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. |
| 212 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| FUND PROFILE (Unaudited) | September 30, 2013 |
U.S. GOVERNMENT MONEY MARKET FUND
OBJECTIVE: Seeks to provide security of principal, high current income, and liquidity.
Holdings Diversification (Market Exposure as % of Net Assets)
FADN — Federal Agency Discount Notes
FAN — Federal Agency Notes
| Inception Date: | December 1, 1993 |
The Fund invests principally in money market instruments issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities and enters into repurchase agreements fully collateralized by U.S. government securities.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 213 |
| SCHEDULE OF INVESTMENTS (Unaudited) | September 30, 2013 |
| U.S. GOVERNMENT MONEY MARKET FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| FEDERAL AGENCY DISCOUNT NOTES†† - 26.5% | | | | | | | | |
| Farmer Mac1 | | | | | | | | |
| 0.01% due 10/01/13 | | $ | 100,000,000 | | | $ | 100,000,000 | |
| 0.21% due 11/01/13 | | | 10,000,000 | | | | 9,998,192 | |
| 0.20% due 11/25/13 | | | 10,000,000 | | | | 9,996,944 | |
| 0.15% due 04/23/14 | | | 10,000,000 | | | | 9,991,500 | |
| 0.16% due 06/18/14 | | | 10,000,000 | | | | 9,988,444 | |
| 0.12% due 12/30/13 | | | 7,467,000 | | | | 7,464,760 | |
| Total Farmer Mac | | | | | | | 147,439,840 | |
| Federal Farm Credit Bank1 | | | | | | | | |
| 0.03% due 10/23/13 | | | 15,000,000 | | | | 14,999,725 | |
| 0.18% due 10/18/13 | | | 10,000,000 | | | | 9,999,150 | |
| 0.20% due 11/05/13 | | | 10,000,000 | | | | 9,998,056 | |
| Total Federal Farm Credit Bank | | | | | | | 34,996,931 | |
| Federal Home Loan Bank1 | | | | | | | | |
| 0.12% due 12/26/13 | | | 10,000,000 | | | | 9,997,134 | |
| 0.11% due 01/03/14 | | | 10,000,000 | | | | 9,997,128 | |
| 0.18% due 05/01/14 | | | 10,000,000 | | | | 9,989,694 | |
| Total Federal Home Loan Bank | | | | | | | 29,983,956 | |
| Freddie Mac2 | | | | | | | | |
| 0.15% due 04/08/14 | | | 10,000,000 | | | | 9,992,125 | |
| Total Federal Agency Discount Notes | | | | | | | | |
| (Cost $222,412,852) | | | | | | | 222,412,852 | |
| FEDERAL AGENCY NOTES†† - 8.3% | | | | | | | | |
| Federal Home Loan Bank1 | | | | | | | | |
| 0.18% due 04/15/14 | | | 10,000,000 | | | | 10,000,000 | |
| 0.16% due 06/11/14 | | | 10,000,000 | | | | 10,000,000 | |
| 0.16% due 06/30/14 | | | 10,000,000 | | | | 10,000,000 | |
| 0.12% due 10/04/13 | | | 10,000,000 | | | | 9,999,945 | |
| 0.12% due 03/21/14 | | | 10,000,000 | | | | 9,999,400 | |
| 0.12% due 04/11/14 | | | 10,000,000 | | | | 9,998,305 | |
| 0.12% due 09/12/14 | | | 10,000,000 | | | | 9,994,565 | |
| Total Federal Home Loan Bank | | | | | | | 69,992,215 | |
| Total Federal Agency Notes | | | | | | | | |
| (Cost $69,992,215) | | | | | | | 69,992,215 | |
| COMMERCIAL PAPER†† - 19.6% | | | | | | | | |
| Prudential plc | | | | | | | | |
| 0.28% due 10/25/133 | | | 10,000,000 | | | | 9,998,133 | |
| 0.20% due 11/20/133 | | | 5,000,000 | | | | 4,998,611 | |
| Total Prudential plc | | | | | | | 14,996,744 | |
| Societe Generale North America, Inc. | | | | | | | | |
| 0.47% due 11/13/13 | | | 10,000,000 | | | | 9,994,386 | |
| 0.21% due 12/02/13 | | | 5,000,000 | | | | 4,998,192 | |
| Total Societe Generale North America, Inc. | | | | | | | 14,992,578 | |
| UBS Finance Delaware LLC | | | | | | | | |
| 0.25% due 10/23/13 | | | 10,000,000 | | | | 9,998,473 | |
| 0.30% due 04/03/14 | | | 5,000,000 | | | | 4,992,333 | |
| Total UBS Finance Delaware LLC | | | | | | | 14,990,806 | |
| ING US Funding LLC | | | | | | | | |
| 0.29% due 01/16/14 | | | 10,000,000 | | | | 9,991,380 | |
| 0.23% due 11/01/13 | | | 5,000,000 | | | | 4,999,010 | |
| Total ING US Funding LLC | | | | | | | 14,990,390 | |
| Nestle Capital Corp. | | | | | | | | |
| 0.12% due 05/02/143 | | | 15,000,000 | | | | 14,989,350 | |
| General Electric Capital Corp. | | | | | | | | |
| 0.18% due 04/24/14 | | | 15,000,000 | | | | 14,984,625 | |
| Jupiter Securitization Company LLC | | | | | | | | |
| 0.23% due 03/19/143 | | | 15,000,000 | | | | 14,983,804 | |
| Toyota Motor Credit Corp. | | | | | | | | |
| 0.20% due 11/20/13 | | | 10,000,000 | | | | 9,997,222 | |
| BNP Paribas Finance, Inc. | | | | | | | | |
| 0.37% due 11/05/13 | | | 10,000,000 | | | | 9,996,404 | |
| Barclays US Funding Corp. | | | | | | | | |
| 0.46% due 05/23/14 | | | 10,000,000 | | | | 9,970,100 | |
| John Deere Financial Ltd. | | | | | | | | |
| 0.07% due 10/04/133 | | | 9,600,000 | | | | 9,599,944 | |
| Westpac Banking Corp. | | | | | | | | |
| 0.24% due 01/14/143 | | | 9,500,000 | | | | 9,493,350 | |
| Sheffield Receivables Corp. | | | | | | | | |
| 0.19% due 10/08/133 | | | 5,000,000 | | | | 4,999,815 | |
| Coca-Cola Co. | | | | | | | | |
| 0.12% due 10/16/133 | | | 5,000,000 | | | | 4,999,750 | |
| Total Commercial Paper | | | | | | | | |
| (Cost $163,984,882) | | | | | | | 163,984,882 | |
| 214 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| SCHEDULE OF INVESTMENTS (Unaudited) (concluded) | September 30, 2013 |
| U.S. GOVERNMENT MONEY MARKET FUND | |
| | | Face | | | | |
| | | Amount | | | Value | |
| REPURCHASE AGREEMENTS†† - 47.8% | | | | | | | | |
| Individual Repurchase Agreement | | | | | | | | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 secured by: | | | | | | | | |
| U.S. Treasury Bills, 0.00% | | | | | | | | |
| 01/02/14 – 07/24/14 | | | | | | | | |
| with a value $147,510,969 | | | | | | | | |
| to be repurchased at $147,510,969 | | $ | 144,618,594 | | | $ | 144,618,594 | |
| Joint Repurchase Agreements4 | | | | | | | | |
| HSBC Group | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 213,634,059 | | | | 213,634,059 | |
| Mizuho Financial Group, Inc. | | | | | | | | |
| issued 09/30/13 at 0.03% | | | | | | | | |
| due 10/01/13 | | | 24,113,408 | | | | 24,113,408 | |
| Deutsche Bank | | | | | | | | |
| issued 09/30/13 at 0.02% | | | | | | | | |
| due 10/01/13 | | | 18,817,203 | | | | 18,817,203 | |
| Total Repurchase Agreements | | | | | | | | |
| (Cost $401,183,264) | | | | | | | 401,183,264 | |
| Total Investments - 102.2% | | | | | | | | |
| (Cost $857,573,213) | | | | | | $ | 857,573,213 | |
| Other Assets & Liabilities, net - (2.2)% | | | | | | | (18,684,993 | ) |
| Total Net Assets - 100.0% | | | | | | $ | 838,888,220 | |
| †† | Value determined based on Level 2 inputs — See Note 4. |
| 1 | The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government. |
| 2 | 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. |
| 3 | Security is a 144A or Section 4(a)(2) security. The total market value of 144A or Section 4(a)(2) securities is $74,062,757 (cost $74,062,757), or 8.8% of total net assets. |
| 4 | Repurchase Agreements — See Note 5. |
plc — Public Limited Company
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 215 |
| U.S. GOVERNMENT MONEY MARKET FUND |
| STATEMENT OF ASSETS |
| AND LIABILITIES (Unaudited) |
| September 30, 2013 |
| Assets: | | | | |
| Investments, at value | | | | |
| (cost $456,389,949) | | $ | 456,389,949 | |
| Repurchase agreements, at value | | | | |
| (cost $401,183,264) | | | 401,183,264 | |
| Total investments | | | | |
| (cost $857,573,213) | | | 857,573,213 | |
| Cash | | | 5,375,432 | |
| Receivables: | | | | |
| Fund shares sold | | | 26,825,998 | |
| Interest | | | 34,773 | |
| Total assets | | | 889,809,416 | |
| Liabilities: | | | | |
| Payable for: | | | | |
| Fund shares redeemed | | | 50,358,077 | |
| Miscellaneous | | | 563,119 | |
| Total liabilities | | | 50,921,196 | |
| Net assets | | $ | 838,888,220 | |
| Net assets consist of: | | | | |
| Paid in capital | | $ | 838,864,670 | |
| Undistributed net investment income | | | 2 | |
| Accumulated net realized gain on investments | | | 23,548 | |
| Net unrealized appreciation on investments | | | — | |
| Net assets | | $ | 838,888,220 | |
| Capital shares outstanding | | | 839,440,901 | |
| Net asset value per share | | $ | 1.00 | |
| STATEMENT OF |
| OPERATIONS (Unaudited) |
| Period Ended September 30, 2013 |
| Investment Income: | | | |
| Interest | | $ | 451,803 | |
| Total investment income | | | 451,803 | |
| Expenses: | | | | |
| Management fees | | | 2,614,381 | |
| Transfer agent and administrative fees | | | 1,045,764 | |
| Portfolio accounting fees | | | 326,033 | |
| Registration fees | | | 263,649 | |
| Custodian fees | | | 58,629 | |
| Trustees’ fees* | | | 53,567 | |
| Miscellaneous | | | 507,163 | |
| Total expenses | | | 4,869,186 | |
| Less: | | | | |
| Expenses waived by service company | | | (1,369,868 | ) |
| Expenses waived by Advisor | | | (3,047,708 | ) |
| Total waived expenses | | | (4,417,576 | ) |
| Net expenses | | | 451,610 | |
| Net investment income | | | 193 | |
| Net Realized and Unrealized Gain (Loss): | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 22,121 | |
| Net realized gain | | | 22,121 | |
| Net increase in net assets resulting from operations | | $ | 22,314 | |
* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940.
| 216 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| U.S. GOVERNMENT MONEY MARKET FUND |
STATEMENTS OF CHANGES IN NET ASSETS
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| Increase (Decrease) In Net Assets From Operations: | | | | | | | | |
| Net investment income | | $ | 193 | | | $ | 344 | |
| Net realized gain on investments | | | 22,121 | | | | 1,465 | |
| Net increase in net assets resulting from operations | | | 22,314 | | | | 1,809 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net investment income | | | | | | | | |
| Money Market Class* | | | (191 | ) | | | (345 | ) |
| Investor2 Class | | | — | | | | (3 | ) |
| Advisor Class | | | — | | | | (22 | ) |
| A-Class | | | — | | | | (3 | ) |
| C-Class | | | — | | | | (3 | ) |
| Total distributions to shareholders | | | (191 | ) | | | (376 | ) |
| | | | | | | | | |
| Capital share transactions: | | | | | | | | |
| Proceeds from sale of shares | | | | | | | | |
| Money Market Class* | | | 6,781,350,207 | | | | 13,013,527,296 | |
| Investor2 Class | | | — | | | | 5,842,956 | |
| Advisor Class | | | — | | | | 1,158,477,495 | |
| A-Class | | | — | | | | 74,372,553 | |
| C-Class | | | — | | | | 87,542,579 | |
| Distributions reinvested | | | | | | | | |
| Money Market Class* | | | 127 | | | | 242 | |
| Investor2 Class | | | — | | | | 1 | |
| Advisor Class | | | — | | | | 21 | |
| A-Class | | | — | | | | 2 | |
| C-Class | | | — | | | | 1 | |
| Cost of shares redeemed | | | | | | | | |
| Money Market Class* | | | (6,790,854,540 | ) | | | (13,061,917,403 | ) |
| Investor2 Class | | | — | | | | (8,730,690 | ) |
| Advisor Class | | | — | | | | (1,602,575,758 | ) |
| A-Class | | | — | | | | (83,203,673 | ) |
| C-Class | | | — | | | | (78,326,643 | ) |
| Conversion activity** | | | | | | | | |
| Money Market Class* | | | — | | | | 289,192,453 | |
| Investor2 Class | | | — | | | | (34,998,123 | ) |
| Advisor Class | | | — | | | | (179,664,763 | ) |
| A-Class | | | — | | | | (29,552,538 | ) |
| C-Class | | | — | | | | (44,977,029 | ) |
| Net decrease from capital share transactions | | | (9,504,206 | ) | | | (494,991,021 | ) |
| Net decrease in net assets | | | (9,482,083 | ) | | | (494,989,588 | ) |
| | | | | | | | | |
| Net assets: | | | | | | | | |
| Beginning of year | | | 848,370,303 | | | | 1,343,359,891 | |
| End of year | | $ | 838,888,220 | | | $ | 848,370,303 | |
| Undistributed net investment income at end of year | | $ | 2 | | | $ | — | |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 217 |
| U.S. GOVERNMENT MONEY MARKET FUND |
STATEMENTS OF CHANGES IN NET ASSETS (concluded)
| | | Period Ended | | | Year | |
| | | September 30, | | | Ended | |
| | | 2013 | | | March 28, | |
| | | (Unaudited) | | | 2013 | |
| Capital share activity: | | | | | | | | |
| Shares sold | | | | | | | | |
| Money Market Class* | | | 6,781,350,207 | | | | 13,013,011,949 | |
| Investor2 Class | | | — | | | | 5,842,955 | |
| Advisor Class | | | — | | | | 1,158,365,043 | |
| A-Class | | | — | | | | 74,372,552 | |
| C-Class | | | — | | | | 87,542,579 | |
| Shares issued from reinvestment of distributions | | | | | | | | |
| Money Market Class* | | | 127 | | | | 296 | |
| Investor2 Class | | | — | | | | 1 | |
| Advisor Class | | | — | | | | 25 | |
| A-Class | | | — | | | | 2 | |
| C-Class | | | — | | | | 1 | |
| Shares redeemed | | | | | | | | |
| Money Market Class* | | | (6,790,854,539 | ) | | | (13,061,402,052 | ) |
| Investor2 Class | | | — | | | | (8,730,690 | ) |
| Advisor Class | | | — | | | | (1,602,463,309 | ) |
| A-Class | | | — | | | | (83,203,673 | ) |
| C-Class | | | — | | | | (78,326,643 | ) |
| Conversion activity** | | | | | | | | |
| Money Market Class* | | | — | | | | 289,368,668 | |
| Investor2 Class | | | — | | | | (34,994,846 | ) |
| Advisor Class | | | — | | | | (179,777,212 | ) |
| A-Class | | | — | | | | (29,569,296 | ) |
| C-Class | | | — | | | | (45,027,314 | ) |
| Net decrease in shares | | | (9,504,205 | ) | | | (494,990,964 | ) |
| * | The Money Market Class commenced operations on June 15, 2012. Operating results presented reflect the operating history of the Investor Class for periods to June 15, 2012 — See Note 12. |
| ** | Effective June 15, 2012, the Fund’s Investor Class shares, Advisor Class shares, A-Class shares, C-Class shares and Investor2 Class shares were converted into the newly created Money Market Class — See Note 12. |
| 218 | THE RYDEX FUNDS SEMI-ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS. |
| U.S. GOVERNMENT MONEY MARKET FUND |
FINANCIAL HIGHLIGHTS
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 | |
| | | September 30, | | | March 28, | | | March 31, | | | March 31, | | | March 31, | | | March 31, | |
| Money Market Classa | | 2013b | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | |
| Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment loss | | | — | c | | | — | c | | | — | c | | | — | c | | | — | c | | | .01 | |
| Net gain (loss) on investments (realized and unrealized) | | | — | | | | — | c | | | — | c | | | — | c | | | — | | | | — | |
| Total from investment operations | | | — | c | | | — | c | | | — | c | | | — | c | | | — | c | | | .01 | |
| Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (— | )c | | | (— | )c | | | (— | )c | | | (— | )c | | | (— | )c | | | (.01 | ) |
| Net realized gains | | | — | | | | — | | | | (— | )c | | | (— | )c | | | — | | | | — | |
| Total distributions | | | (— | )c | | | (— | )c | | | (— | )c | | | (— | )c | | | (— | )c | | | (.01 | ) |
| Net asset value, end of period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Return | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.01 | % | | | 0.01 | % | | | 1.06 | % |
| Ratios/Supplemental Data | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 838,888 | | | $ | 848,370 | | | $ | 607,565 | | | $ | 833,899 | | | $ | 872,765 | | | $ | 1,114,286 | |
| Ratios to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | | 0.00 | %d | | | 0.00 | %d | | | 0.00 | %d | | | 0.01 | % | | | 0.01 | % | | | 1.02 | % |
| Total expenses | | | 0.93 | % | | | 0.95 | % | | | 0.91 | % | | | 0.94 | % | | | 0.93 | % | | | 0.95 | % |
| Net expensese | | | 0.09 | % | | | 0.17 | % | | | 0.11 | % | | | 0.22 | % | | | 0.37 | % | | | 0.90 | % |
| Portfolio turnover rate | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| a | Effective June 15, 2012, the Fund’s Investor Class shares, Advisor Class shares, A-Class shares, C-Class shares and Investor2 Class shares were converted into the newly created Money Market Class. The financial highlights for periods prior to that date reflect the performance of the former Investor Class. |
| b | Unaudited figures for the period ended September 30, 2013. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. |
| c | Less than $0.01 per share. |
| e | Net expense information reflects the expense ratios after expense waivers. |
| SEE NOTES TO FINANCIAL STATEMENTS. | THE RYDEX FUNDS SEMI-ANNUAL REPORT | 219 |
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. Organization and Significant Accounting Policies
Organization
The Rydex Series Funds (the “Trust”) is registered with the SEC under the Investment Company Act of 1940 (“1940 Act”) as a non-diversified, open-ended investment company of the series type. Each series, in effect, is representing a separate Fund. The Trust is authorized to issue an unlimited number of no par value shares. The Trust accounts for the assets of each Fund separately.
The Trust offers a combination of eight separate classes of shares: Investor Class shares, Advisor Class shares, A-Class shares, C-Class shares, H-Class shares, Y-Class shares, Institutional Class shares and Money Market Class shares. Sales of shares of each Class are made without a front-end sales charge at the net asset value per share (“NAV”), with the exception of A-Class shares. A-Class shares are sold at the NAV, plus the applicable front-end sales charge. The sales charge varies depending on the amount purchased, but will not exceed 4.75%. A-Class share purchases of $1 million or more are exempt from the front-end sales charge but have a 1% contingent deferred sales charge (“CDSC”) if shares are redeemed within 12 months of purchase. C-Class shares have a 1% CDSC if shares are redeemed within 12 months of purchase. 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 CDSC.
At September 30, 2013, the Trust consisted of fifty-one separate funds. This report covers the Target Beta Funds (the “Funds”), while the other funds are contained in separate reports. Only A-Class, C-Class, H-Class, Advisor Class, Investor Class and Money Market Class shares had been issued by the Funds.
Guggenheim Investments (“GI”) provides advisory services and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Distributors, LLC (“GDL”) acts as principal underwriter for the Trust. GI, RFS and GDL are affiliated entities.
The Funds are designed and operated to accommodate frequent trading by shareholders and, unlike most mutual funds, offer unlimited exchange privileges with no minimum holding periods or transaction fees, which may cause the Funds to experience high portfolio turnover.
Significant Accounting Policies
The following significant accounting policies are in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and are consistently followed by the Trust. This requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. All time references are based on Eastern Time.
A. The Trust calculates a NAV twice each business day, first in the morning and again in the afternoon for the Russell 2000® Fund and the S&P 500® Fund. All other Funds in this report will price at the afternoon NAV. The morning NAV is calculated at 10:45 a.m. and the afternoon NAV is calculated at the close of the New York Stock Exchange (“NYSE”), usually 4:00 p.m. The NAV is calculated using the current market value of each Fund’s total assets as of the respective time of calculation. These financial statements are based on the September 30, 2013, afternoon NAV.
Equity securities listed on an exchange (NYSE or American Stock Exchange) are valued at the last quoted sales price as of the close of business on the NYSE, usually 4:00 p.m. on the valuation date. Equity securities listed on the NASDAQ market system are valued at the NASDAQ Official Closing Price on the valuation date.
The value of futures contracts is accounted for using the unrealized gain or loss on the contracts that is determined by marking the contracts to their current realized settlement prices. Financial futures contracts are valued at the 4:00 p.m. price on the valuation date. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., the futures contract is valued at the Official Settlement Price of the exchange. However, the underlying securities from which the futures contract value is derived are monitored until 4:00 p.m. to determine if fair valuation would provide a more accurate valuation.
The value of equity index and credit default swap agreements entered into by a Fund is accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the last quoted value of the index that the swap pertains to at the close of the NYSE, adjusted to include dividends accrued, and financing charges and/or interest associated with the swap agreements.
The value of currency index swap agreements entered into by a Fund is accounted for using the unrealized gain or loss on the agreements that is determined using a broker quote for the value of the index and financing charges and/or interest associated with the swap agreements.
The U.S. Government Money Market Fund values debt securities at amortized cost pursuant to Rule 2a-7 of the 1940 Act, which approximates market value.
| 220 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
With the exception of the U.S. Government Money Market Fund, U.S. government securities are valued by independent pricing services, the last traded fill price, or at the reported bid price at the close of business. Other debt securities with a maturity of greater than 60 days at acquisition are valued at prices that reflect broker/ dealer-supplied valuations or are obtained from independent pricing services, which may consider the trade activity, treasury yields, yields or price of bonds of comparable quality, coupon, maturity, and type, as well as prices quoted by dealers who make markets in such securities. Short-term debt securities with a maturity of 60 days or less at acquisition and repurchase agreements are valued at amortized cost, which approximates market value.
Open-end investment companies (“Mutual Funds”) are valued at their NAV as of the close of business on the valuation date. Exchange Traded Funds (“ETFs”) and closed-end investment companies are valued at the last quoted sales price.
Investments for which market quotations are not readily available are fair valued as determined in good faith by GI under the direction of the Board of Trustees using methods established or ratified by the Board of Trustees. These methods include, but are not limited to: (i) obtaining general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, obtaining information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) obtaining other information and considerations, including current values in related markets.
B. Security transactions are recorded on the trade date for financial reporting purposes. Realized gains and losses from securities transactions are recorded using the identified cost basis. Proceeds from lawsuits related to investment holdings are recorded as realized gains in the respective Fund. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Taxable non-cash dividends are recorded as dividend income. Interest income, including amortization of premiums and accretion of discounts, is accrued on a daily basis. Distributions received from investments in REITs are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distribution by the issuer.
C. Dividends from net investment income are declared daily in the Government Long Bond 1.2x Strategy Fund and the U.S. Government Money Market Fund. Dividends are reinvested in additional shares unless shareholders request payment in cash. Distributions of net investment income in the remaining Funds and distributions of net realized gains, if any, in all Funds are declared at least annually and recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.
D. When a Fund engages in a short sale of a security, an amount equal to the proceeds is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the market value of the short sale. The Fund maintains a segregated account of cash and/or securities as collateral for short sales.
Fees, if any, paid to brokers to borrow securities in connection with short sales are recorded as short interest expense. In addition, the Fund must pay out the dividend rate of the equity or coupon rate of the treasury obligation to the lender and record this as an expense. Short dividend or short interest expense is a cost associated with the investment objective of short sales transactions, rather than an operational cost associated with the day-to-day management of any mutual fund. The Funds may also receive rebate income from the broker resulting from the investment of the proceeds from securities sold short.
E. Upon entering into a futures contract, a Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is affected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
F. Swap agreements are marked-to-market daily and the change, if any, is recorded as unrealized gain or loss. Payments received or made as a result of an agreement or termination of the agreement are recognized as realized gains or losses.
Credit default swap agreements are marked-to-market daily and the change, if any, is recorded as unrealized gain or loss. Upfront payments received or made by a Fund on credit default swap agreements are amortized over the expected life of the agreement. Periodic payments received or paid by a Fund are recorded as realized gains or losses. Payments received or made as a result of a credit event or termination of the contract are recognized, net of a proportional amount of the upfront payment, as realized gains or losses.
G. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Trust does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain and loss from investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 221 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies and currency gains or losses realized between the trade and settlement dates on investment transactions. Net unrealized exchange gains and losses arise from changes in the fair values of assets and liabilities other than investments in securities at the fiscal period end, resulting from changes in exchange rates.
H. Certain U.S. Government and Agency Obligations are traded on a discount basis; the interest rates shown on the Schedules of Investments reflect the effective rates paid at the time of purchase by the Funds. Other securities bear interest at the rates shown, payable at fixed dates through maturity.
I. The Funds may leave cash overnight in their cash account with the custodian, U.S. Bank. Periodically, a Fund may have cash due to the custodian bank as an overdraft balance. A fee is incurred on this overdraft, calculated by multiplying the overdraft by a rate based on the federal funds rate.
Segregated cash with the broker is held as collateral for investments in derivative instruments such as futures contracts or swap agreements.
J. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the Classes based upon the value of the outstanding shares in each Class. Certain costs, such as distribution fees relating to A-Class shares and H-Class shares and service and distribution fees related to Advisor Class shares and C-Class shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net assets of each Fund included in the Trust.
K. Throughout the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds and/or their affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
2. Financial Instruments
As part of their investment strategy, the Funds utilize short sales and a variety of derivative instruments including futures and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities.
A short sale is a transaction in which a Fund sells a security it does not own. If the security sold short decreases in price between the time the Fund sells the security and closes its short position, that Fund will realize a gain on the transaction. Conversely, if the security increases in price during the period, that Fund will realize a loss on the transaction. The risk of such price increases is the principal risk of engaging in short sales.
A futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities or other instruments at a set price for delivery at a future date. There are significant risks associated with a Fund’s use of futures contracts and related options, including (i) there may be an imperfect or no correlation between the changes in market value of the underlying asset and the prices of futures contracts; (ii) there may not be a liquid secondary market for a futures contract; (iii) trading restrictions or limitations may be imposed by an exchange; and (iv) government regulations may restrict trading in futures contracts. When investing in futures, there is minimal counterparty credit risk to the Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default.
A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. A credit default swap enables a Fund to buy or sell protection against a defined credit event of an issuer or a basket of securities. Generally, the seller of credit protection against an issuer or basket of securities receives a periodic payment from the buyer to compensate against potential default events. If a default event occurs, the seller must pay the buyer the full notional value of the reference obligation in exchange for the reference obligation. If no default occurs, the counterparty will pay the stream of payments and have no further obligations to the Fund selling the credit protection. A Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty, or in the case of a credit default swap in which the Fund is selling credit protection, the default of a third party issuer. Additionally, there is no guarantee that a Fund or an underlying fund could eliminate its exposure under an outstanding swap agreement by entering into an offsetting swap agreement with the same or another party.
| 222 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
In conjunction with the use of short sales, futures and swap agreements, the Funds are required to maintain collateral in various forms. The Funds use, where appropriate, depending on the financial instrument utilized and the broker involved, margin deposits at the broker, cash and/or securities segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund.
The Trust has established counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. The Trust monitors the counterparty credit risk.
3. Fees and Other Transactions with Affiliates
Under the terms of an investment advisory contract, the Funds pay GI investment advisory fees calculated at the annualized rates below, based on the average daily net assets of the Funds.
| | | Management Fees | |
| Fund | | (as a % of Net Assets) | |
| Nova Fund | | | 0.75 | % |
| S&P 500® Fund | | | 0.75 | % |
| Inverse S&P 500® Strategy Fund | | | 0.90 | % |
| NASDAQ-100® Fund | | | 0.75 | % |
| Inverse NASDAQ-100® Strategy Fund | | | 0.90 | % |
| Mid-Cap 1.5x Strategy Fund | | | 0.90 | % |
| Inverse Mid-Cap Strategy Fund | | | 0.90 | % |
| Russell 2000® 1.5x Strategy Fund | | | 0.90 | % |
| Russell 2000® Fund | | | 0.75 | % |
| Inverse Russell 2000® Strategy Fund | | | 0.90 | % |
| S&P 500® Pure Growth Fund | | | 0.75 | % |
| S&P 500® Pure Value Fund | | | 0.75 | % |
| S&P MidCap 400® Pure Growth Fund | | | 0.75 | % |
| S&P MidCap 400® Pure Value Fund | | | 0.75 | % |
| S&P SmallCap 600® Pure Growth Fund | | | 0.75 | % |
| S&P SmallCap 600® Pure Value Fund | | | 0.75 | % |
| Europe 1.25x Strategy Fund | | | 0.90 | % |
| Japan 2x Strategy Fund | | | 0.75 | % |
| Strengthening Dollar 2x Strategy Fund | | | 0.90 | % |
| Weakening Dollar 2x Strategy Fund | | | 0.90 | % |
| Government Long Bond 1.2x Strategy Fund | | | 0.50 | % |
| Inverse Government Long Bond Strategy Fund | | | 0.90 | % |
| High Yield Strategy Fund | | | 0.75 | % |
| Inverse High Yield Strategy Fund | | | 0.75 | % |
| U.S. Government Money Market Fund | | | 0.50 | % |
RFS provides transfer agent and administrative services to the Trust for fees calculated at the annualized rates below based on the average daily net assets of the Funds. For these services, RFS receives the following:
| | | Transfer Agent and | |
| | | Administrative Fees | |
| Fund | | (as a % of Net Assets) | |
| Government Long Bond 1.2x Strategy Fund | | | 0.20 | % |
| U.S. Government Money Market Fund | | | 0.20 | % |
| Remaining Funds | | | 0.25 | % |
RFS also provides accounting services to the Funds for fees calculated at annualized rates below, based on the average daily net assets of each Fund. Effective August 1, 2013, S&P 500® Fund and Russell 2000® Fund increased their fund accounting fees to 0.15% of fund net assets.
| Fund Accounting Fees | | (as a % of net assets) | |
| S&P 500® Fund | | | 0.15 | % |
| Russell 2000® Fund | | | 0.15 | % |
| Remaining Funds | | | | |
| On the first $250 million | | | 0.10 | % |
| On the next $250 million | | | 0.075 | % |
| On the next $250 million | | | 0.05 | % |
| Over $750 million | | | 0.03 | % |
RFS engages external service providers to perform other necessary services for the Trust, such as audit and accounting related services, legal services, custody, printing and mailing, etc., on a pass-through basis. Such expenses are allocated to various Funds within the complex based on relative net assets.
The Trust has adopted a Distribution and Shareholder Services Plan applicable to its Advisor Class shares and a Distribution Plan applicable to A-Class shares and H-Class shares for which GDL and other firms that provide distribution and/or shareholder services (“Service Providers”) may receive compensation. If a Service Provider provides distribution services, the Funds will pay distribution fees to GDL at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GDL, in turn, will pay the Service Provider out of its fees. GDL may, at its discretion, retain a portion of such payments to compensate itself for distribution services. With regard to Advisor Class shares only, if a Service Provider provides shareholder services, GDL will receive shareholder servicing fees from the Funds at an annual rate not to exceed 0.25% of average daily net assets. GDL, in turn, will compensate Service Providers for providing such services, while retaining a portion of such payments to compensate itself for shareholder services it performs.
The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds’ C-Class shares average daily net assets. The annual 0.25% service fee compensates the shareholder’s financial advisor for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GDL for paying the shareholder’s financial advisor an ongoing sales commission. GDL advances the first year’s service and distribution fees to the financial advisor. GDL retains the service and distribution fees on accounts with no authorized dealer of record.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 223 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
GI and its affiliates have voluntarily agreed to waive their fees, including but not limited to accounting, shareholder services and investment advisory fees, in an attempt to maintain a positive net yield for the U.S. Government Money Market Fund. GI or its affiliates may terminate this voluntary waiver at any time upon notice to the Fund. When shareholder services fees are waived, dealer compensation will be reduced to the extent of such waiver.
For the period ended September 30, 2013, GDL retained sales charges of $158,439 relating to sales of A-Class shares of the Trust.
Certain officers and trustees of the Trust are also officers of GI, RFS and GDL.
4. Fair Value Measurement
In accordance with U.S. GAAP, 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 is utilized 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.).
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 summarizes the inputs used to value the Funds’ net assets at September 30, 2013:
| | | Level 1 | | | Level 1 | | Level 2 | | | Level 2 | | | Level 3 | | | |
| | | Investments | | | Other Financial | | Investments | | | Other Financial | | | Investments | | | |
| | | In Securities | | | Instruments* | | In Securities | | | Instruments* | | | In Securities | | Total | |
| Assets | | | | | | | | | | | | | | | | | | | | |
| Nova Fund | | $ | 66,636,430 | | $ | — | | $ | 7,253,251 | | | $ | — | | $ | — | | $ | 73,889,681 | |
| S&P 500® Fund | | | 287,075,899 | | | — | | | 66,180,823 | | | | — | | | — | | | 353,256,722 | |
| Inverse S&P 500® Strategy Fund | | | — | | | 982,679 | | | 187,795,025 | | | | 938,992 | | | — | | | 189,716,696 | |
| NASDAQ-100® Fund | | | 557,540,604 | | | 18,950 | | | 83,917,932 | | | | — | | | — | | | 641,477,486 | |
| Inverse NASDAQ-100® Strategy Fund | | | — | | | — | | | 10,587,458 | | | | 41,703 | | | — | | | 10,629,161 | |
| Mid-Cap 1.5x Strategy Fund | | | 14,726,237 | | | 41,754 | | | 4,881,724 | | | | — | | | — | | | 19,649,715 | |
| Inverse Mid-Cap Strategy Fund | | | — | | | — | | | 4,174,010 | | | | 6,494 | | | — | | | 4,180,504 | |
| Russell 2000® 1.5x Strategy Fund | | | 25,384,997 | | | — | | | 8,492,706 | | | | — | | | — | | | 33,877,703 | |
| Russell 2000® Fund | | | 39,564,621 | | | — | | | 41,765,123 | | | | — | | | — | | | 81,329,744 | |
| Inverse Russell 2000® Strategy Fund | | | — | | | — | | | 23,394,132 | | | | 9,642 | | | — | | | 23,403,774 | |
| S&P 500® Pure Growth Fund | | | 93,833,924 | | | — | | | 878,999 | | | | — | | | — | | | 94,712,923 | |
| S&P 500® Pure Value Fund | | | 58,817,456 | | | — | | | 1,258,147 | | | | — | | | — | | | 60,075,603 | |
| S&P MidCap 400® Pure Growth Fund | | | 267,283,035 | | | — | | | 10,875,289 | | | | — | | | — | | | 278,158,324 | |
| S&P MidCap 400® Pure Value Fund | | | 22,876,505 | | | — | | | 251 | | | | — | | | — | | | 22,876,756 | |
| S&P SmallCap 600® Pure Growth Fund | | | 38,607,081 | | | — | | | 740,076 | | | | — | | | — | | | 39,347,157 | |
| S&P SmallCap 600® Pure Value Fund | | | 21,354,024 | | | — | | | 486,781 | | | | — | | | — | | | 21,840,805 | |
| Europe 1.25x Strategy Fund | | | 17,940,415 | | | 302,399 | | | 9,733,279 | | | | — | | | — | | | 27,976,093 | |
| Japan 2x Strategy Fund | | | — | | | 320,035 | | | 6,385,582 | | | | — | | | — | | | 6,705,617 | |
| Strengthening Dollar 2x Strategy Fund | | | — | | | — | | | 22,250,079 | | | | — | | | — | | | 22,250,079 | |
| Weakening Dollar 2x Strategy Fund | | | — | | | 350,597 | | | 9,045,967 | | | | 19,083 | | | — | | | 9,415,647 | |
| Government Long Bond 1.2x Strategy Fund | | | 50,380,767 | | | 667,976 | | | 11,591,134 | | | | — | | | — | | | 62,639,877 | |
| Inverse Government Long Bond Strategy Fund | | | — | | | — | | | 632,654,004 | | | | — | | | — | | | 632,654,004 | |
| High Yield Strategy Fund | | | 1,657,053 | | | 725,746 | | | 84,952,006 | | | | — | | | — | | | 87,334,805 | |
| Inverse High Yield Strategy Fund | | | — | | | — | | | 9,621,969 | | | | 16,958 | | | — | | | 9,638,927 | |
| U.S. Government Money Market Fund | | | — | | | — | | | 857,573,213 | | | | — | | | — | | | 857,573,213 | |
| 224 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| | | Level 1 | | | Level 1 | | | Level 2 | | | Level 2 | | | Level 3 | | | | |
| | | Investments | | | Other Financial | | | Investments | | | Other Financial | | | Investments | | | | |
| | | In Securities | | | Instruments* | | | In Securities | | | Instruments* | | | In Securities | | | Total | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Nova Fund | | $ | — | | | $ | 4,741 | | | $ | — | | | $ | 321,381 | | | $ | — | | | $ | 326,122 | |
| S&P 500® Fund | | | — | | | | 563,678 | | | | — | | | | 86,541 | | | | — | | | | 650,219 | |
| NASDAQ-100® Fund | | | — | | | | — | | | | — | | | | 174,976 | | | | — | | | | 174,976 | |
| Inverse NASDAQ-100® Strategy Fund | | | — | | | | 3,136 | | | | — | | | | — | | | | — | | | | 3,136 | |
| Mid-Cap 1.5x Strategy Fund | | | — | | | | — | | | | — | | | | 14,883 | | | | — | | | | 14,883 | |
| Inverse Mid-Cap Strategy Fund | | | — | | | | 14,689 | | | | — | | | | — | | | | — | | | | 14,689 | |
| Russell 2000® 1.5x Strategy Fund | | | — | | | | 3,897 | | | | — | | | | 50,596 | | | | — | | | | 54,493 | |
| Russell 2000® Fund | | | — | | | | — | | | | — | | | | 73,998 | | | | — | | | | 73,998 | |
| Europe 1.25x Strategy Fund | | | — | | | | — | | | | — | | | | 129,917 | | | | — | | | | 129,917 | |
| Strengthening Dollar 2x Strategy Fund | | | — | | | | 903,851 | | | | — | | | | 5,068 | | | | — | | | | 908,919 | |
| Inverse Government Long Bond Strategy Fund | | | 285,668,661 | | | | 2,497,317 | | | | — | | | | — | | | | — | | | | 288,165,978 | |
| High Yield Strategy Fund | | | — | | | | — | | | | — | | | | 204,623 | | | | — | | | | 204,623 | |
| Inverse High Yield Strategy Fund | | | — | | | | 60,393 | | | | — | | | | — | | | | — | | | | 60,393 | |
* Other financial instruments may include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.
For the period ended September 30, 2013, there were no transfers between levels.
5. Repurchase Agreements
The Funds transfer uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury and U.S. Government Agencies. The collateral is in the possession of the Funds’ custodian and is evaluated to ensure that its market value exceeds, at a minimum, 102% of the original face amount of the repurchase agreements. Each Fund holds a pro rata share of the collateral based on the dollar amount of the repurchase agreement entered into by each Fund.
At September 30, 2013, the repurchase agreements in the joint account were as follows:
| Counterparty and | | | | | | | | | | | | | | |
| Terms of Agreement | | Face Value | | | Repurchase Price | | | Collateral | | Par Value | | | Fair Value | |
| HSBC Group | | | | | | | | | | U.S. Treasury Strips | | | | | | | | |
| 0.02% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | $ | 727,000,000 | | | $ | 727,000,404 | | | 05/15/16 - 02/15/42 | | $ | 1,709,093,900 | | | $ | 741,540,069 | |
| Mizuho Financial Group, Inc. | | | | | | | | | | U.S. Treasury Bill | | | | | | | | |
| 0.03% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | | 82,013,150 | | | | 82,013,218 | | | 07/24/14 | | | 83,697,000 | | | | 83,653,478 | |
| Deutsche Bank | | | | | | | | | | U.S. Treasury Note | | | | | | | | |
| 0.02% | | | | | | | | | | 3.13% | | | | | | | | |
| Due 10/01/13 | | | 64,000,000 | | | | 64,000,036 | | | 05/15/21 | | | 60,395,900 | | | | 65,280,006 | |
| Credit Suisse Group | | | | | | | | | | U.S. Treasury Note | | | | | | | | |
| 0.01% | | | | | | | | | | 0.88% | | | | | | | | |
| Due 10/01/13 | | | 52,640,363 | | | | 52,640,378 | | | 01/31/17 | | | 53,420,000 | | | | 53,693,200 | |
In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. GI, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 225 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
6. Disclosures about Credit Derivatives
In accordance with its principal investment strategy, the High Yield Strategy Fund enters into credit default swaps as a seller of protection primarily to gain exposure similar to the high yield bond market. Credit default swaps are instruments which allow for the full or partial transfer of third party credit risk, with respect to a particular entity or entities, from one counterparty to the other. A seller of credit default swaps is selling credit protection or assuming credit risk with respect to the underlying entity or entities. If a credit event occurs, as defined under the terms of the swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index. The Notional Principal reflects the maximum potential amount the Fund could be required to make as a seller of credit protection if a credit event occurs. As the seller of protection, the Fund receives periodic premium payments from the counterparty and may also receive or pay an upfront premium adjustment to the stated periodic premium.
The quoted market prices and resulting market values for credit default swap agreements on securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative had the notional amount of the swap agreement been closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
The table on page 202 included in the Schedule of Investments summarizes the information with regard to sold protection on credit default swap contracts as of September 30, 2013.
7. Derivative Investment Holdings Categorized by Risk Exposure
U.S. GAAP requires 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.
The following Funds utilized derivatives for the following purposes:
| | Futures | Swaps |
| Fund Name | Index Exposure | Liquidity | Index Exposure | Liquidity |
| Nova Fund | x | x | x | x |
| S&P 500® Fund | x | x | x | x |
| Inverse S&P 500® Strategy Fund | x | x | x | x |
| NASDAQ-100® Fund | x | x | x | x |
| Inverse NASDAQ-100® Strategy Fund | x | x | x | x |
| Mid-Cap 1.5x Strategy Fund | x | x | x | x |
| Inverse Mid-Cap Strategy Fund | x | x | x | x |
| Russell 2000® 1.5x Strategy Fund | x | x | x | x |
| Russell 2000® Fund | x | x | x | x |
| Inverse Russell 2000® Strategy Fund | x | x | x | x |
| Europe 1.25x Strategy Fund | x | x | — | — |
| Japan 2x Strategy Fund | x | x | — | — |
| Strengthening Dollar 2x Strategy Fund | x | x | x | x |
| Weakening Dollar 2x Strategy Fund | x | x | x | x |
| Government Long Bond 1.2x Strategy Fund | x | x | — | — |
| Inverse Government Long Bond Strategy Fund | x | x | — | — |
| High Yield Strategy Fund | x | x | x | x |
| Inverse High Yield Strategy Fund | x | x | x | x |
| 226 | The RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The following table represents the notional amount of derivative instruments outstanding, as an approximate percentage of the Funds’ net assets on a daily basis.
| | | Approximate percentage of Fund's | |
| | | net assets on a daily basis | |
| Fund | | Long | | | Short | |
| Nova Fund | | | 80 | % | | | — | |
| S&P 500® Fund | | | 15 | % | | | — | |
| Inverse S&P 500® Strategy Fund | | | — | | | | 100 | % |
| NASDAQ-100® Fund | | | 15 | % | | | — | |
| Inverse NASDAQ-100® Strategy Fund | | | — | | | | 100 | % |
| Mid-Cap 1.5x Strategy Fund | | | 75 | % | | | — | |
| Inverse Mid-Cap Strategy Fund | | | — | | | | 100 | % |
| Russell 2000® 1.5x Strategy Fund | | | 80 | % | | | — | |
| Russell 2000® Fund | | | 50 | % | | | — | |
| Inverse Russell 2000® Strategy Fund | | | — | | | | 100 | % |
| Europe 1.25x Strategy Fund* | | | 65 | % | | | — | |
| Japan 2x Strategy Fund* | | | 200 | % | | | — | |
| Strengthening Dollar 2x Strategy Fund | | | 200 | % | | | — | |
| Weakening Dollar 2x Strategy Fund | | | — | | | | 200 | % |
| Government Long Bond 1.2x Strategy Fund | | | 35 | % | | | — | |
| Inverse Government Long Bond Strategy Fund | | | — | | | | 60 | % |
| High Yield Strategy Fund* | | | 95 | % | | | — | |
| Inverse High Yield Strategy Fund* | | | — | | | | 100 | % |
*These Funds utilize a combination of currency and/or financial-linked derivatives to obtain exposure to their benchmarks. The gross derivative instrument exposure is 130%, 400%, 180% and 185% for the Europe 1.25x Strategy Fund, Japan 2x Strategy Fund, High Yield Strategy Fund and Inverse High Yield Strategy Fund, respectively.
The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of September 30, 2013:
| Derivative Investment Type | | Asset Derivatives | | Liability Derivatives |
| Equity/Interest Rate/Currency contracts | | Variation margin | | Variation margin |
| Equity/Currency/Credit contracts | | Unrealized appreciation on swap agreements | | Unrealized depreciation on swap agreements |
The following table sets forth the fair value of the Funds’ derivative investments categorized by primary risk exposure at September 30, 2013:
| Asset Derivative Investments Value |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | Futures | | | Swaps Credit | | | Total Value at | |
| | | Equity | | | Equity | | | Currency | | | Currency | | | Interest Rate | | | Default | | | September 30, | |
| Fund | | Contracts* | | | Contracts | | | Contracts* | | | Contracts | | | Contracts* | | | Contracts | | | 2013 | |
| Inverse S&P 500® Strategy Fund | | $ | 982,679 | | | $ | 938,992 | | | $ | — | | | | $ — | | | $ | — | | | | $ — | | | $ | 1,921,671 | |
| NASDAQ-100® Fund | | | 18,950 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 18,950 | |
| Inverse NASDAQ-100® Strategy Fund | | | — | | | | 41,703 | | | | — | | | | — | | | | — | | | | — | | | | 41,703 | |
| Mid-Cap 1.5x Strategy Fund | | | 41,754 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 41,754 | |
| Inverse Mid-Cap Strategy Fund | | | — | | | | 6,494 | | | | — | | | | — | | | | — | | | | — | | | | 6,494 | |
| Inverse Russell 2000® Strategy Fund | | | — | | | | 9,642 | | | | — | | | | — | | | | — | | | | — | | | | 9,642 | |
| Europe 1.25x Strategy Fund | | | — | | | | — | | | | 302,399 | | | | — | | | | — | | | | — | | | | 302,399 | |
| Japan 2x Strategy Fund | | | 161,560 | | | | — | | | | 158,475 | | | | — | | | | — | | | | — | | | | 320,035 | |
| Weakening Dollar 2x Strategy Fund | | | — | | | | — | | | | 350,597 | | | | 19,083 | | | | — | | | | — | | | | 369,680 | |
| Government Long Bond 1.2x Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 667,976 | | | | — | | | | 667,976 | |
| High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 725,746 | | | | — | | | | 725,746 | |
| Inverse High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 16,958 | | | | 16,958 | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 227 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| Liability Derivative Investments Value |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | Futures | | | Swaps Credit | | | Total Value at | |
| | | Equity | | | Equity | | | Currency | | | Currency | | | Interest Rate | | | Default | | | September 30, | |
| Fund | | Contracts* | | | Contracts | | | Contracts* | | | Contracts | | | Contracts* | | | Contracts | | | 2013 | |
| Nova Fund | | $ | 4,741 | | | $ | 321,381 | | | | $ — | | | | $ — | | | $ | — | | | | $ — | | | | $ 326,122 | |
| S&P 500® Fund | | | 563,678 | | | | 86,541 | | | | — | | | | — | | | | — | | | | | | | | 650,219 | |
| NASDAQ-100® Fund | | | — | | | | 174,976 | | | | — | | | | — | | | | — | | | | — | | | | 174,976 | |
| Inverse NASDAQ-100® Strategy Fund | | | 3,136 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,136 | |
| Mid-Cap 1.5x Strategy Fund | | | — | | | | 14,883 | | | | — | | | | — | | | | — | | | | — | | | | 14,883 | |
| Inverse Mid-Cap Strategy Fund | | | 14,689 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,689 | |
| Russell 2000® 1.5x Strategy Fund | | | 3,897 | | | | 50,596 | | | | — | | | | — | | | | — | | | | — | | | | 54,493 | |
| Russell 2000® Fund | | | — | | | | 73,998 | | | | — | | | | — | | | | — | | | | — | | | | 73,998 | |
| Europe 1.25x Strategy Fund | | | 129,917 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 129,917 | |
| Strengthening Dollar 2x Strategy Fund | | | — | | | | — | | | | 903,851 | | | | 5,068 | | | | — | | | | — | | | | 908,919 | |
| Inverse Government Long Bond Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 2,497,317 | | | | — | | | | 2,497,317 | |
| High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 204,623 | | | | 204,623 | |
| Inverse High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 60,393 | | | | — | | | | 60,393 | |
* Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.
The following is a summary of the location of derivative investments on the Funds' Statements of Operations for the period ended September 30, 2013:
| Derivative Investment Type | | Location of Gain (Loss) on Derivatives |
| Equity/Currency/Credit contracts | | Net realized gain (loss) on swap agreements |
| | | Net change in unrealized appreciation (depreciation) on swap agreements |
| Equity/Interest Rate/Currency contracts | | Net realized gain (loss) on futures contracts |
| | | Net change in unrealized appreciation (depreciation) on futures contracts |
The following is a summary of the Funds’ realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized on the Statements of Operations categorized by primary risk exposure for the period ended September 30, 2013:
| Realized Gain(Loss) on Derivative Investments Recognized on the Statements of Operations |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | Futures | | | Swaps | | | | |
| | | Equity | | | Equity | | | Currency | | | Currency | | | Interest Rate | | | Credit Default | | | | |
| Fund | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Total | |
| Nova Fund | | $ | 1,752,406 | | | $ | 2,673,827 | | | $ | — | | | | $ — | | | $ | — | | | $ | — | | | $ | 4,426,233 | |
| S&P 500® Fund | | | (394,709 | ) | | | (2,148,587 | ) | | | — | | | | — | | | | — | | | | — | | | | (2,543,296 | ) |
| Inverse S&P 500® Strategy Fund | | | (6,207,025 | ) | | | (11,478,551 | ) | | | — | | | | — | | | | — | | | | — | | | | (17,685,576 | ) |
| NASDAQ-100® Fund | | | 904,029 | | | | 6,082,698 | | | | — | | | | — | | | | — | | | | — | | | | 6,986,727 | |
| Inverse NASDAQ-100® Strategy Fund | | | (431,308 | ) | | | (1,418,639 | ) | | | — | | | | — | | | | — | | | | — | | | | (1,849,947 | ) |
| Mid-Cap 1.5x Strategy Fund | | | 263,162 | | | | (442,713 | ) | | | — | | | | — | | | | — | | | | — | | | | (179,551 | ) |
| Inverse Mid-Cap Strategy Fund | | | (133,133 | ) | | | (301,357 | ) | | | — | | | | — | | | | — | | | | — | | | | (434,490 | ) |
| Russell 2000® 1.5x Strategy Fund | | | 1,110,018 | | | | 345,332 | | | | — | | | | — | | | | — | | | | — | | | | 1,455,350 | |
| Russell 2000® Fund | | | 2,153,567 | | | | (438,214 | ) | | | — | | | | — | | | | — | | | | — | | | | 1,715,353 | |
| Inverse Russell 2000® Strategy Fund | | | (1,293,248 | ) | | | (2,271,683 | ) | | | — | | | | — | | | | — | | | | — | | | | (3,564,931 | ) |
| Europe 1.25x Strategy Fund | | | 23,452 | | | | — | | | | 230,244 | | | | — | | | | — | | | | — | | | | 253,696 | |
| Japan 2x Strategy Fund | | | 1,399,911 | | | | — | | | | (200,352 | ) | | | — | | | | — | | | | — | | | | 1,199,559 | |
| Strengthening Dollar 2x Strategy Fund | | | — | | | | — | | | | (1,322,648 | ) | | | 138,604 | | | | — | | | | — | | | | (1,184,044 | ) |
| Weakening Dollar 2x Strategy Fund | | | — | | | | — | | | | (170,001 | ) | | | (116,313 | ) | | | — | | | | — | | | | (286,314 | ) |
| Government Long Bond 1.2x Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | (18,606,531 | ) | | | — | | | | (18,606,531 | ) |
| Inverse Government Long Bond Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 23,516,584 | | | | — | | | | 23,516,584 | |
| High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | (2,919,840 | ) | | | 6,491,975 | | | | 3,572,135 | |
| Inverse High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 1,833,744 | | | | (1,778,668 | ) | | | 55,076 | |
| 228 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statements of Operations |
| | | Futures | | | Swaps | | | Futures | | | Swaps | | | Futures | | | Swaps | | | | |
| | | Equity | | | Equity | | | Currency | | | Currency | | | Interest Rate | | | Credit Default | | | | |
| Fund | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Contracts | | | Total | |
| Nova Fund | | $ | (13,303 | ) | | $ | (556,240 | ) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (569,543 | ) |
| S&P 500® Fund | | | (565,581 | ) | | | (346,035 | ) | | | — | | | | — | | | | — | | | | — | | | | (911,616 | ) |
| Inverse S&P 500® Strategy Fund | | | 1,243,722 | | | | 1,327,429 | | | | — | | | | — | | | | — | | | | — | | | | 2,571,151 | |
| NASDAQ-100® Fund | | | 17,137 | | | | (247,225 | ) | | | — | | | | — | | | | — | | | | — | | | | (230,088 | ) |
| Inverse NASDAQ-100® Strategy Fund | | | 13,978 | | | | 69,277 | | | | — | | | | — | | | | — | | | | — | | | | 83,255 | |
| Mid-Cap 1.5x Strategy Fund | | | (638,063 | ) | | | (227,622 | ) | | | — | | | | — | | | | — | | | | — | | | | (865,685 | ) |
| Inverse Mid-Cap Strategy Fund | | | 14,801 | | | | 11,993 | | | | — | | | | — | | | | — | | | | — | | | | 26,794 | |
| Russell 2000® 1.5x Strategy Fund | | | (9,302 | ) | | | (104,446 | ) | | | — | | | | — | | | | — | | | | — | | | | (113,748 | ) |
| Russell 2000® Fund | | | (19,224 | ) | | | (140,026 | ) | | | — | | | | — | | | | — | | | | — | | | | (159,250 | ) |
| Inverse Russell 2000® Strategy Fund | | | 72 | | | | 32,486 | | | | — | | | | — | | | | — | | | | — | | | | 32,558 | |
| Europe 1.25x Strategy Fund | | | (131,224 | ) | | | — | | | | 359,068 | | | | — | | | | — | | | | — | | | | 227,844 | |
| Japan 2x Strategy Fund | | | (897,374 | ) | | | — | | | | (301,322 | ) | | | — | | | | — | | | | — | | | | (1,198,696 | ) |
| Strengthening Dollar 2x Strategy Fund | | | — | | | | — | | | | (1,036,132 | ) | | | (162,070 | ) | | | — | | | | — | | | | (1,198,202 | ) |
| Weakening Dollar 2x Strategy Fund | | | — | | | | — | | | | 403,594 | | | | 81,309 | | | | — | | | | — | | | | 484,903 | |
| Government Long Bond 1.2x Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 1,485,390 | | | | — | | | | 1,485,390 | |
| Inverse Government Long Bond Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | (2,292,969 | ) | | | — | | | | (2,292,969 | ) |
| High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | 362,984 | | | | (946,590 | ) | | | (583,606 | ) |
| Inverse High Yield Strategy Fund | | | — | | | | — | | | | — | | | | — | | | | (51,233 | ) | | | 37,831 | | | | (13,402 | ) |
8. Federal Income Tax Information
The Funds intend to comply with the provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and will distribute substantially all taxable net investment income and capital gains sufficient to relieve the Funds from all, or substantially all, federal income, excise and state income taxes. Therefore, no provision for federal or state income tax is required.
Tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns are evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Funds’ tax positions taken, or to be taken, on Federal income tax returns for all open tax years, and has concluded that no provision for income tax is required in the Funds’ financial statements. A fund's federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed.
The RIC Modernization Act of 2010 was signed into law on December 22, 2010. It simplified some of the tax provisions applicable to regulated investment companies, the tax reporting to their shareholders and improved the tax efficiency of certain fund structures. The changes were generally effective for taxable years beginning after the date of enactment.
One of the more prominent changes addresses capital loss carry forwards. Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. As a result of this ordering rule, pre-enactment capital carry forwards may potentially expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 229 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At September 30, 2013, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value, were as follows:
| | | | | | Tax | | | Tax | | | Net | |
| | | Tax | | | Unrealized | | | Unrealized | | | Unrealized | |
| Fund Name | | Cost | | | Gain | | | Loss | | | Gain (Loss) | |
| Nova Fund | | $ | 59,345,753 | | | $ | 14,842,374 | | | $ | (298,446 | ) | | $ | 14,543,928 | |
| S&P 500® Fund | | | 301,295,531 | | | | 53,497,773 | | | | (1,536,582 | ) | | | 51,961,191 | |
| Inverse S&P 500® Strategy Fund | | | 187,772,789 | | | | 22,236 | | | | — | | | | 22,236 | |
| NASDAQ-100® Fund | | | 362,121,858 | | | | 281,019,388 | | | | (1,682,710 | ) | | | 279,336,678 | |
| Inverse NASDAQ-100® Strategy Fund | | | 10,587,458 | | | | — | | | | — | | | | — | |
| Mid-Cap 1.5x Strategy Fund | | | 15,554,417 | | | | 4,128,141 | | | | (74,597 | ) | | | 4,053,544 | |
| Inverse Mid-Cap Strategy Fund | | | 4,174,010 | | | | — | | | | — | | | | — | |
| Russell 2000® 1.5x Strategy Fund | | | 30,349,313 | | | | 3,806,382 | | | | (277,992 | ) | | | 3,528,390 | |
| Russell 2000® Fund | | | 3,618,678 | | | | 8,081,941 | | | | (370,875 | ) | | | 7,711,066 | |
| Inverse Russell 2000® Strategy Fund | | | 23,394,132 | | | | — | | | | — | | | | — | |
| S&P 500® Pure Growth Fund | | | 77,152,698 | | | | 17,988,368 | | | | (428,143 | ) | | | 17,560,225 | |
| S&P 500® Pure Value Fund | | | 47,542,899 | | | | 12,706,041 | | | | (173,337 | ) | | | 12,532,704 | |
| S&P MidCap 400® Pure Growth Fund | | | 215,758,241 | | | | 65,361,143 | | | | (2,961,060 | ) | | | 62,400,083 | |
| S&P MidCap 400® Pure Value Fund | | | 18,809,803 | | | | 4,122,265 | | | | (55,312 | ) | | | 4,066,953 | |
| S&P SmallCap 600® Pure Growth Fund | | | 35,414,520 | | | | 4,257,734 | | | | (325,097 | ) | | | 3,932,637 | |
| S&P SmallCap 600® Pure Value Fund | | | 18,697,570 | | | | 3,402,569 | | | | (259,334 | ) | | | 3,143,235 | |
| Europe 1.25x Strategy Fund | | | 27,614,766 | | | | 227,241 | | | | (168,313 | ) | | | 58,928 | |
| Japan 2x Strategy Fund | | | 6,385,582 | | | | — | | | | — | | | | — | |
| Strengthening Dollar 2x Strategy Fund | | | 22,250,079 | | | | — | | | | — | | | | — | |
| Weakening Dollar 2x Strategy Fund | | | 9,045,967 | | | | — | | | | — | | | | — | |
| Government Long Bond 1.2x Strategy Fund | | | 61,207,955 | | | | 763,946 | | | | — | | | | 763,946 | |
| Inverse Government Long Bond Strategy Fund | | | 635,788,233 | | | | — | | | | (3,134,229 | ) | | | (3,134,229 | ) |
| High Yield Strategy Fund | | | 86,559,872 | | | | 49,187 | | | | — | | | | 49,187 | |
| Inverse High Yield Strategy Fund | | | 9,621,969 | | | | — | | | | — | | | | — | |
| U.S. Government Money Market Fund | | | 857,573,213 | | | | — | | | | — | | | | — | |
9. Securities Transactions
For the period ended September 30, 2013, the cost of purchases and proceeds from sales of investment securities, excluding government securities and short-term investments, were as follows:
| Fund | | Purchases | | | Sales | |
| Nova Fund | | $ | 81,680,977 | | | $ | 67,992,339 | |
| S&P 500® Fund | | | 214,712,470 | | | | 157,680,207 | |
| Inverse S&P 500® Strategy Fund | | | — | | | | — | |
| NASDAQ-100® Fund | | | 405,722,923 | | | | 412,315,523 | |
| Inverse NASDAQ-100® Strategy Fund | | | — | | | | — | |
| Mid-Cap 1.5x Strategy Fund | | | 15,493,691 | | | | 40,634,692 | |
| Inverse Mid-Cap Strategy Fund | | | — | | | | — | |
| Russell 2000® 1.5x Strategy Fund | | | 44,905,643 | | | | 51,777,257 | |
| Russell 2000® Fund | | | 64,542,286 | | | | 92,729,456 | |
| Inverse Russell 2000® Strategy Fund | | | — | | | | — | |
| S&P 500® Pure Growth Fund | | | 260,477,063 | | | | 251,442,415 | |
| S&P 500® Pure Value Fund | | | 162,457,304 | | | | 194,151,489 | |
| S&P MidCap 400® Pure Growth Fund | | | 127,251,925 | | | | 186,569,298 | |
| S&P MidCap 400® Pure Value Fund | | | 98,149,428 | | | | 157,446,095 | |
| S&P SmallCap 600® Pure Growth Fund | | | 128,337,618 | | | | 104,968,052 | |
| S&P SmallCap 600® Pure Value Fund | | | 66,385,532 | | | | 83,368,715 | |
| Europe 1.25x Strategy Fund | | | 54,691,181 | | | | 44,007,087 | |
| Japan 2x Strategy Fund | | | — | | | | — | |
| Strengthening Dollar 2x Strategy Fund | | | — | | | | — | |
| Weakening Dollar 2x Strategy Fund | | | — | | | | — | |
| Government Long Bond 1.2x Strategy Fund | | | — | | | | — | |
| Inverse Government Long Bond Strategy Fund | | | — | | | | — | |
| High Yield Strategy Fund | | | 960,750 | | | | 45,642,332 | |
| Inverse High Yield Strategy Fund | | | 6,573,952 | | | | 6,618,607 | |
| U.S. Government Money Market Fund | | | 10,000,000 | | | | — | |
| 230 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
For the period ended September 30, 2013, the cost of purchases and proceeds from sales of government securities were:
| | | Purchases | | | Sales | |
| Government Long Bond 1.2x Strategy Fund | | $ | 2,102,632,212 | | | $ | 2,262,386,416 | |
| Inverse Government Long Bond Strategy Fund | | | 1,304,094,081 | | | | 1,153,662,620 | |
10. Line of Credit
The Trust, along with other affiliated trusts, secured an uncommitted, $75,000,000 line of credit from U.S. Bank, N.A., which expires June 15, 2014. This line of credit is reserved for emergency or temporary purposes. Borrowings, if any, under this arrangement bear interest equal to the Prime Rate, minus 2%, which shall be paid monthly, averaging 1.25% for the period ended September 30, 2013. The Funds did not have any borrowings under this agreement at September 30, 2013.
The average daily balances borrowed for the period ended September 30, 2013 were as follows:
| Fund | | Amount | |
| Nova Fund | | $ | 902 | |
| S&P 500® Fund | | | 17,475 | |
| NASDAQ-100® Fund | | | 16,579 | |
| Russell 2000® 1.5x Strategy Fund | | | 38,607 | |
| Russell 2000® Fund | | | 4,197 | |
| S&P 500® Pure Growth Fund | | | 65,005 | |
| S&P 500® Pure Value Fund | | | 24,923 | |
| S&P MidCap 400® Pure Growth Fund | | | 13,355 | |
| S&P MidCap 400® Pure Value Fund | | | 29,738 | |
| S&P SmallCap 600® Pure Growth Fund | | | 10,066 | |
| S&P SmallCap 600® Pure Value Fund | | | 7,803 | |
| Europe 1.25x Strategy Fund | | | 1,087 | |
| Government Long Bond 1.2x Strategy Fund | | | 60,262 | |
| Inverse Government Long Bond Strategy Fund | | | 145,328 | |
11. Portfolio Securities Loaned
The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, Credit Suisse acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with Credit Suisse, cash collateral is invested in one or more joint repurchase agreements collateralized by obligations of the U.S. Treasury or Government Agencies and cash. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand.
At September 30, 2013, the Funds participated in securities lending as follows:
| | Value of | | | Cash | |
| Fund | | Securities Loaned | | | Collateral Received | |
| Nova Fund | | $ | 15,484 | | | $ | 16,188 | |
| S&P 500® Fund | | | 141,769 | | | | 149,718 | |
| NASDAQ-100® Fund | | | 3,927,556 | | | | 3,976,578 | |
| Russell 2000® 1.5x Strategy Fund | | | 72,411 | | | | 76,306 | |
| Russell 2000® Fund | | | 197,356 | | | | 207,405 | |
| S&P 500® Pure Value Fund | | | 872,603 | | | | 911,618 | |
| S&P MidCap 400® Pure Growth Fund | | | 9,681,343 | | | | 10,008,032 | |
| S&P SmallCap 600® Pure Growth Fund | | | 469,156 | | | | 485,664 | |
| S&P SmallCap 600® Pure Value Fund | | | 416,632 | | | | 426,165 | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 231 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The following represents a breakdown of the collateral for the joint repurchase agreements at September 30, 2013:
| Counterparty and | | | | | | | | | | | | | | |
| Terms of Agreement | | Face Value | | | Repurchase Price | | | Collateral | | Par Value | | | Fair Value | |
| HSBC Securities, Inc. | | | | | | | | | | Fannie Mae | | | | | | | | |
| 0.06% | | | | | | | | | | 0.00% | | | | | | | | |
| Due 10/01/13 | | $ | 33,647,201 | | | $ | 33,647,425 | | | 07/15/19 - 11/15/20 | | $ | 40,016,017 | | | $ | 34,319,314 | |
| RBS Securities, Inc. | | | | | | | | | | Freddie Mac | | | | | | | | |
| 0.07% | | | | | | | | | | 0.50% | | | | | | | | |
| Due 10/01/13 | | | 31,418,410 | | | | 31,418,654 | | | 01/15/16 | | | 32,093,965 | | | | 32,051,012 | |
12. U.S. Government Money Market Fund Consolidation
Effective June 15, 2012, 816,436,768 Investor Class shares, 179,777,212 Advisor Class shares, 29,569,296 A-Class shares, 45,027,314 C-Class shares, and 34,994,846 Investor2 Class shares of the U.S. Government Money Market Fund (the “Fund”) were converted to the Fund’s new share class, the Money Market Class shares, at a 1 for 1 conversion ratio. The Money Market Class shares expense structure was substantially similar to the former Investor Class. Accordingly, for financial reporting purposes, the Money Market Class’ operating results presented in the financial statements and financial highlights reflect the operating history of the Investor Class for periods prior to June 15, 2012.
13. Legal Proceedings
Tribune Company
Rydex Series Funds has been named as a defendant and a putative member of the proposed defendant class of shareholders in the case entitled Kirschner v. FitzSimons, No. 12-2652 (S.D.N.Y.) (formerly Official Committee of Unsecured Creditors of Tribune Co. v. FitzSimons, Adv. Pro. No. 10-54010 (Bankr. D. Del.)) (the “FitzSimons action”), as a result of ownership by certain series of the Rydex Series Funds of shares in the Tribune Company (“Tribune”) in 2007, when Tribune effected a leveraged buyout transaction (“LBO”) by which Tribune converted to a privately-held company. In his complaint, the plaintiff has alleged that, in connection with the LBO, Tribune insiders and shareholders were overpaid for their Tribune stock using financing that the insiders knew would, and ultimately did, leave the Tribune Company insolvent. The plaintiff has asserted claims against certain insiders, major shareholders, professional advisers, and others involved in the LBO. The plaintiff is also attempting to obtain from former Tribune shareholders, including the Rydex Series Funds, the proceeds they received in connection with the LBO.
In June 2011, a group of Tribune creditors filed multiple actions against former Tribune shareholders involving state law constructive fraudulent conveyance claims arising out of the 2007 LBO (the “SLCFC actions”). Rydex Series Funds has been named as a defendant in one or more of these suits. In those actions, the creditors seek to recover from Tribune’s former shareholders the proceeds received in connection with the 2007 LBO.
The FitzSimons action and the SLCFC actions have been consolidated with the majority of the other Tribune LBO-related lawsuits in a multidistrict litigation proceeding captioned In re Tribune Company Fraudulent Conveyance Litig., No. 11-md-2696 (S.D.N.Y.) (the “MDL Proceeding”).
On September 23, 2013, the District Court granted the defendants’ omnibus motion to dismiss the SLCFC actions, on the basis that the creditors lacked standing. On September 30, 2013, the creditors filed a notice of appeal of the September 23 order. On October 28, 2013, the defendants filed a joint notice of cross-appeal of that same order.
On November 20, 2013, the District Court ordered the parties in the FitzSimons action to meet and confer regarding a potential protocol for the briefing and argument of motions to dismiss to be filed in that action.
| 232 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
None of these lawsuits alleges any wrongdoing on the part of Rydex Series Funds. The following series of Rydex Series Funds held shares of Tribune and tendered these shares as part of Tribune’s LBO: Nova Fund, S&P 500® Pure Value Fund, Multi-Cap Core Equity Fund, S&P 500® Fund, Multi-Hedge Strategies Fund and Hedged Equity Fund (the “Funds”). The value of the proceeds received by the foregoing Funds was $28,220, $109,242, $9,860, $3,400, $1,181,160, and $10,880, respectively. At this stage of the proceedings, Rydex Series Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
Lyondell Chemical Company
In December 2011, Rydex Series Funds was named as a defendant in Weisfelner, as Trustee of the LB Creditor Trust, v. Fund 1 (In re Lyondell Chemical Co.), Adv. Pro. No. 10-4609 (Bankr. S.D.N.Y.).
Similar to the claims made in the Tribune matter, the Weisfelner complaint seeks to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008.
A motion to dismiss is currently pending before the Bankruptcy Court.
This lawsuit does not allege any wrongdoing on the part of Rydex Series Funds. The following series of Rydex Series Funds received cash proceeds from the cash out merger in the following amounts: Basic Materials Fund - $1,725,168; U.S. Long Short Momentum Fund - $2,193,600; Global 130/30 Strategy Fund - $37,920; Hedged Equity Fund - $1,440; and Multi-Hedge Strategies Fund - $1,116,480. At this stage of the proceedings, Rydex Series Funds is not able to make a reliable predication as to the outcome of these lawsuits or the effect, if any, on a Fund’s net asset value.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 233 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
14. Offsetting
In the normal course of business, the Funds may have entered in transactions subject to enforceable master netting arrangements or other similar arrangements. Generally, the right to offset in those agreements allows the Funds to counteract the exposure to a specific counterparty with collateral received or delivered to that counterparty based on the terms of the arrangements. These arrangements provide for the right to liquidate upon the occurrence of an event of default, credit event upon merger or additional termination event.
The following tables present derivative financial instruments and secured financing transactions that are subject to enforceable netting arrangements and offset in the Statements of Assets and Liabilities in conformity with U.S. GAAP.
| | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | Net Amount of Assets | | | | | | | | | | |
| | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | Recognized Assets | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Received3 | | | Amount | |
| Nova Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | $ | 7,253,251 | | | $ | — | | | $ | 7,253,251 | | | $ | — | | | $ | 7,253,251 | | | $ | — | |
| | | Securities lending | | | 15,484 | | | | — | | | | 15,484 | | | | — | | | | 15,484 | | | | — | |
| | | Total | | | 7,268,735 | | | | — | | | | 7,268,735 | | | | — | | | | 7,268,735 | | | | — | |
| S&P 500® Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 66,180,823 | | | | — | | | | 66,180,823 | | | | — | | | | 66,180,823 | | | | — | |
| | | Securities lending | | | 141,769 | | | | — | | | | 141,769 | | | | — | | | | 141,769 | | | | — | |
| | | Total | | | 66,322,592 | | | | — | | | | 66,322,592 | | | | — | | | | 66,322,592 | | | | — | |
| Inverse S&P 500® Strategy Fund | | | | | | |
| | | Repurchase agreements | | | 92,803,605 | | | | — | | | | 92,803,605 | | | | — | | | | 92,803,605 | | | | — | |
| | | Futures equity contracts | | | 982,679 | | | | — | | | | 982,679 | | | | — | | | | — | | | | 982,679 | |
| | | Swap equity contracts | | | 938,992 | | | | — | | | | 938,992 | | | | — | | | | — | | | | 938,992 | |
| | | Total | | | 94,725,276 | | | | — | | | | 94,725,276 | | | | — | | | | 92,803,605 | | | | 1,921,671 | |
| NASDAQ-100® Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 83,917,932 | | | | — | | | | 83,917,932 | | | | — | | | | 83,917,932 | | | | — | |
| | | Securities lending | | | 3,927,556 | | | | — | | | | 3,927,556 | | | | — | | | | 3,927,556 | | | | — | |
| | | Futures equity contracts | | | 18,950 | | | | — | | | | 18,950 | | | | — | | | | — | | | | 18,950 | |
| | | Total | | | 87,864,438 | | | | — | | | | 87,864,438 | | | | — | | | | 87,845,488 | | | | 18,950 | |
| Inverse NASDAQ-100® Strategy Fund | | | | | | |
| | | Repurchase agreements | | | 10,587,458 | | | | — | | | | 10,587,458 | | | | — | | | | 10,587,458 | | | | — | |
| | | Swap equity contracts | | | 41,703 | | | | — | | | | 41,703 | | | | — | | | | — | | | | 41,703 | |
| | | Total | | | 10,629,161 | | | | — | | | | 10,629,161 | | | | — | | | | 10,587,458 | | | | 41,703 | |
| Mid-Cap 1.5x Strategy Fund | | | | | | |
| | | Repurchase agreements | | | 4,881,724 | | | | — | | | | 4,881,724 | | | | — | | | | 4,881,724 | | | | — | |
| | | Futures equity contracts | | | 41,754 | | | | — | | | | 41,754 | | | | — | | | | — | | | | 41,754 | |
| | | Total | | | 4,923,478 | | | | — | | | | 4,923,478 | | | | — | | | | 4,881,724 | | | | 41,754 | |
| Inverse Mid-Cap Strategy Fund | | | | | | |
| | | Repurchase agreements | | | 4,174,010 | | | | — | | | | 4,174,010 | | | | — | | | | 4,174,010 | | | | — | |
| | | Swap equity contracts | | | 6,494 | | | | — | | | | 6,494 | | | | — | | | | — | | | | 6,494 | |
| | | Total | | | 4,180,504 | | | | — | | | | 4,180,504 | | | | — | | | | 4,174,010 | | | | 6,494 | |
| Russell 2000® 1.5x Strategy Fund | | | | | | |
| | | Repurchase agreements | | | 8,492,672 | | | | — | | | | 8,492,672 | | | | — | | | | 8,492,672 | | | | — | |
| | | Securities lending | | | 72,411 | | | | — | | | | 72,411 | | | | — | | | | 72,411 | | | | — | |
| | | Total | | | 8,565,083 | | | | — | | | | 8,565,083 | | | | — | | | | 8,565,083 | | | | — | |
| Russell 2000® Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 41,765,071 | | | | — | | | | 41,765,071 | | | | — | | | | 41,765,071 | | | | — | |
| | | Securities lending | | | 197,356 | | | | — | | | | 197,356 | | | | — | | | | 197,356 | | | | — | |
| | | Total | | | 41,962,427 | | | | — | | | | 41,962,427 | | | | — | | | | 41,962,427 | | | | — | |
| 234 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | Net Amount of Assets | | | | | | | | | | |
| | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | Recognized Assets | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Received3 | | | Amount | |
| Inverse Russell 2000® Strategy Fund | | | | | | | | | | |
| | | Repurchase agreements | | $ | 23,394,132 | | | $ | — | | | $ | 23,394,132 | | | $ | — | | | $ | 23,394,132 | | | $ | — | |
| | | Swap equity contracts | | | 9,642 | | | | — | | | | 9,642 | | | | — | | | | — | | | | 9,642 | |
| | | Total | | | 23,403,774 | | | | — | | | | 23,403,774 | | | | — | | | | 23,394,132 | | | | 9,642 | |
| S&P 500® Pure Growth Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 878,999 | | | | — | | | | 878,999 | | | | — | | | | 878,999 | | | | — | |
| S&P 500® Pure Value Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 1,258,147 | | | | — | | | | 1,258,147 | | | | — | | | | 1,258,147 | | | | — | |
| | | Securities lending | | | 872,603 | | | | — | | | | 872,603 | | | | — | | | | 872,603 | | | | — | |
| | | Total | | | 2,130,750 | | | | — | | | | 2,130,750 | | | | — | | | | 2,130,750 | | | | — | |
| S&P MidCap 400® Pure Growth Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 10,875,289 | | | | — | | | | 10,875,289 | | | | — | | | | 10,875,289 | | | | — | |
| | | Securities lending | | | 9,681,343 | | | | — | | | | 9,681,343 | | | | — | | | | 9,681,343 | | | | — | |
| | | Total | | | 20,556,632 | | | | — | | | | 20,556,632 | | | | — | | | | 20,556,632 | | | | — | |
| S&P MidCap 400® Pure Value Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 251 | | | | — | | | | 251 | | | | — | | | | 251 | | | | — | |
| S&P SmallCap 600® Pure Growth Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 740,076 | | | | — | | | | 740,076 | | | | — | | | | 740,076 | | | | — | |
| | | Securities lending | | | 469,156 | | | | — | | | | 469,156 | | | | — | | | | 469,156 | | | | — | |
| | | Total | | | 1,209,232 | | | | — | | | | 1,209,232 | | | | — | | | | 1,209,232 | | | | — | |
| S&P SmallCap 600® Pure Value Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 486,781 | | | | — | | | | 486,781 | | | | — | | | | 486,781 | | | | — | |
| | | Securities lending | | | 416,632 | | | | — | | | | 416,632 | | | | — | | | | 416,632 | | | | — | |
| | | Total | | | 903,413 | | | | — | | | | 903,413 | | | | — | | | | 903,413 | | | | — | |
| Europe 1.25x Strategy Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 9,733,279 | | | | — | | | | 9,733,279 | | | | — | | | | 9,733,279 | | | | — | |
| | | Futures currency contracts | | | 302,399 | | | | — | | | | 302,399 | | | | — | | | | — | | | | 302,399 | |
| | | Total | | | 10,035,678 | | | | — | | | | 10,035,678 | | | | — | | | | 9,733,279 | | | | 302,399 | |
| Japan 2x Strategy Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 6,385,582 | | | | — | | | | 6,385,582 | | | | — | | | | 6,385,582 | | | | — | |
| | | Futures equity contracts | | | 161,560 | | | | — | | | | 161,560 | | | | — | | | | — | | | | 161,560 | |
| | | Futures currency contracts | | | 158,475 | | | | — | | | | 158,475 | | | | — | | | | — | | | | 158,475 | |
| | | Total | | | 6,705,617 | | | | — | | | | 6,705,617 | | | | — | | | | 6,385,582 | | | | 320,035 | |
| Strengthening Dollar 2x Strategy Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 22,250,079 | | | | — | | | | 22,250,079 | | | | — | | | | 22,250,079 | | | | — | |
| Weakening Dollar 2x Strategy Fund | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 9,045,967 | | | | — | | | | 9,045,967 | | | | — | | | | 9,045,967 | | | | — | |
| | | Futures currency contracts | | | 350,597 | | | | — | | | | 350,597 | | | | — | | | | — | | | | 350,597 | |
| | | Swap currency contracts | | | 19,083 | | | | — | | | | 19,083 | | | | — | | | | — | | | | 19,083 | |
| | | Total | | | 9,415,647 | | | | — | | | | 9,415,647 | | | | — | | | | 9,045,967 | | | | 369,680 | |
| Government Long Bond 1.2x Strategy Fund | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | 11,591,134 | | | | — | | | | 11,591,134 | | | | — | | | | 11,591,134 | | | | — | |
| | | Futures interest rate contracts | | | 667,976 | | | | — | | | | 667,976 | | | | — | | | | — | | | | 667,976 | |
| | | Total | | | 12,259,110 | | | | — | | | | 12,259,110 | | | | — | | | | 11,591,134 | | | | 667,976 | |
| Inverse Government Long Bond Strategy Fund | | | | | | |
| | | Repurchase agreements | | | 314,510,892 | | | | — | | | | 314,510,892 | | | | — | | | | 314,510,892 | | | | — | |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 235 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
| | | | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | | | Net Amount of Assets | | | | | | | | | | |
| | | | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | | | Recognized Assets | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Received3 | | | Amount | |
| High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | | $ | 84,952,006 | | | $ | — | | | $ | 84,952,006 | | | $ | — | | | $ | 84,952,006 | | | $ | — | |
| | | Futures interest rate contracts | | | | | 725,746 | | | | — | | | | 725,746 | | | | — | | | | — | | | | 725,746 | |
| | | | | Total | | | 85,677,752 | | | | — | | | | 85,677,752 | | | | — | | | | 84,952,006 | | | | 725,746 | |
| Inverse High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Repurchase agreements | | | | | 9,621,969 | | | | — | | | | 9,621,969 | | | | — | | | | 9,621,969 | | | | — | |
| | | Swap credit default contracts | | | | | 16,958 | | | | — | | | | 16,958 | | | | — | | | | — | | | | 16,958 | |
| | | | | Total | | | 9,638,927 | | | | — | | | | 9,638,927 | | | | — | | | | 9,621,969 | | | | 16,958 | |
| U.S. Government Money Market Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Repurchase agreements | | | | | 401,183,264 | | | | — | | | | 401,183,264 | | | | — | | | | 401,183,264 | | | | — | |
| | | | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | | | Net Amount of | | | | | | | | | | |
| | | | | | | | | | | | | Liabilities | | | | | | | | | | |
| | | | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | | | Recognized Liabilities | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Pledged | | | Amount | |
| Nova Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Swap equity contracts | | | | $ | 321,381 | | | $ | — | | | $ | 321,381 | | | $ | — | | | $ | — | | | $ | 321,381 | |
| | | Securities lending | | | | | 16,188 | | | | — | | | | 16,188 | | | | — | | | | 16,188 | | | | — | |
| | | Futures equity contracts | | | | | 4,741 | | | | — | | | | 4,741 | | | | — | | | | — | | | | 4,741 | |
| | | | | Total | | | 342,310 | | | | — | | | | 342,310 | | | | — | | | | 16,188 | | | | 326,122 | |
| S&P 500® Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Futures equity contracts | | | | | 563,678 | | | | — | | | | 563,678 | | | | — | | | | — | | | | 563,678 | |
| | | Securities lending | | | | | 149,718 | | | | — | | | | 149,718 | | | | — | | | | 149,718 | | | | — | |
| | | Swap equity contracts | | | | | 86,541 | | | | — | | | | 86,541 | | | | — | | | | — | | | | 86,541 | |
| | | | | Total | | | 799,937 | | | | — | | | | 799,937 | | | | — | | | | 149,718 | | | | 650,219 | |
| NASDAQ-100® Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | | 3,976,578 | | | | — | | | | 3,976,578 | | | | — | | | | 3,976,578 | | | | — | |
| | | Swap equity contracts | | | | | 174,976 | | | | — | | | | 174,976 | | | | — | | | | — | | | | 174,976 | |
| | | | | Total | | | 4,151,554 | | | | — | | | | 4,151,554 | | | | — | | | | 3,976,578 | | | | 174,976 | |
| Inverse NASDAQ-100® Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Futures equity contracts | | | | | 3,136 | | | | — | | | | 3,136 | | | | — | | | | — | | | | 3,136 | |
| Mid-Cap 1.5x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Swap equity contracts | | | | | 14,883 | | | | — | | | | 14,883 | | | | — | | | | — | | | | 14,883 | |
| Inverse Mid-Cap Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Futures equity contracts | | | | | 14,689 | | | | — | | | | 14,689 | | | | — | | | | — | | | | 14,689 | |
| Russell 2000® 1.5x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | | 76,306 | | | | — | | | | 76,306 | | | | — | | | | 76,306 | | | | — | |
| | | Swap equity contracts | | | | | 50,596 | | | | — | | | | 50,596 | | | | — | | | | — | | | | 50,596 | |
| | | Futures equity contracts | | | | | 3,897 | | | | — | | | | 3,897 | | | | — | | | | — | | | | 3,897 | |
| | | | | Total | | | 130,799 | | | | — | | | | 130,799 | | | | — | | | | 76,306 | | | | 54,493 | |
| Russell 2000® Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | | 207,405 | | | | — | | | | 207,405 | | | | — | | | | 207,405 | | | | — | |
| | | Swap equity contracts | | | | | 73,998 | | | | — | | | | 73,998 | | | | — | | | | — | | | | 73,998 | |
| | | | Total | | | 281,403 | | | | — | | | | 281,403 | | | | — | | | | 207,405 | | | | 73,998 | |
| 236 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (concluded)
| | | | | | | | | | | | | | | | Gross Amounts Not Offset | | | | |
| | | | | | | | | | | | | | | | in the Statements of | | | | |
| | | | | | | | | | | | | | | | Assets and Liabilities | | | | |
| | | | | | | | | | | | | Net Amount of | | | | | | | | | | |
| | | | | | | | | | | | | Liabilities | | | | | | | | | | |
| | | | | | | | | | Gross Amounts Offset | | | Presented on the | | | | | | Cash | | | | |
| | | | | | | Gross Amounts of | | | in the Statements of | | | Statements of Assets | | | Financial | | | Collateral | | | Net | |
| Fund | | Instrument1 | | | | Recognized Liabilities | | | Assets and Liabilities | | | and Liabilities2 | | | Instruments | | | Pledged | | | Amount | |
| S&P 500® Pure Value Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | $ | 911,618 | | | $ | — | | | $ | 911,618 | | | $ | — | | | $ | 911,618 | | | $ | — | |
| S&P MidCap 400® Pure Growth Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | | 10,008,032 | | | | — | | | | 10,008,032 | | | | — | | | | 10,008,032 | | | | — | |
| S&P SmallCap 600® Pure Growth Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | | 485,664 | | | | — | | | | 485,664 | | | | — | | | | 485,664 | | | | — | |
| S&P SmallCap 600® Pure Value Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Securities lending | | | | | 426,165 | | | | — | | | | 426,165 | | | | — | | | | 426,165 | | | | — | |
| Europe 1.25x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Futures equity contracts | | | | | 129,917 | | | | — | | | | 129,917 | | | | — | | | | — | | | | 129,917 | |
| Strengthening Dollar 2x Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Futures currency contracts | | | | | 903,851 | | | | — | | | | 903,851 | | | | — | | | | — | | | | 903,851 | |
| | | Swap currency contracts | | | | | 5,068 | | | | — | | | | 5,068 | | | | — | | | | — | | | | 5,068 | |
| | | | | Total | | | 908,919 | | | | — | | | | 908,919 | | | | — | | | | — | | | | 908,919 | |
| Inverse Government Long Bond Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Futures interest rate contracts | | | | | 2,497,317 | | | | — | | | | 2,497,317 | | | | — | | | | — | | | | 2,497,317 | |
| High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Swap credit default contracts | | | | | 204,623 | | | | — | | | | 204,623 | | | | — | | | | — | | | | 204,623 | |
| Inverse High Yield Strategy Fund | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Futures interest rate contracts | | | | | 60,393 | | | | — | | | | 60,393 | | | | — | | | | — | | | | 60,393 | |
| 1 | Refer to notes 5 and 11 for additional information regarding repurchase agreements and securities lending arrangements, respectively. |
| 2 | Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedules of Investments. Only current day’s variation margin is reported within the |
Statements of Assets and Liabilities.
| 3 | Excludes maintenance margin deposits held at the broker related to derivatives. These amounts are reflected as Segregated cash with broker on the Statements of Assets and |
Liabilities.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 237 |
| OTHER INFORMATION (Unaudited) |
Proxy Voting Information
A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds’ portfolios is available, without charge and upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1.800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.
Quarterly Portfolio Schedules Information
The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1.800.820.0888.
Office Locations
The offices of Guggenheim Investments can be found in the following locations:
40 East 52nd Street
16th Floor
New York, NY 10022
(Headquarters)
Four Irvington Centre
805 King Farm Boulevard
Suite 600
Rockville, MD 20850
9401 Indian Creek Parkway
40 Corporate Woods
Suite 850
Overland Park, KS 66210
| 238 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| OTHER INFORMATION (Unaudited) (continued) |
Board Considerations Regarding Approval of Investment Advisory Agreement
At in-person meetings of the Rydex Series Funds’ (the “Trust”) Board of Trustees (the “Board”) held on May 16 and June 5, 2013 (collectively, the “Meetings”), called for the purpose of, among other things, consideration of, and voting on, the approval and continuation of the investment advisory agreement applicable to the series of the Trust (each a “Fund” and collectively, the “Funds”), the Board, including the Trustees who are not “interested persons,” as defined by the Investment Company Act of 1940, of the Trust (“Independent Trustees”), unanimously approved the continuation of the investment advisory agreement (the “Investment Advisory Agreement”) between the Trust and Security Investors, LLC (referred to herein as the “Adviser”) with respect to each of the Funds for an additional one-year period, based on the Board’s review of qualitative and quantitative information provided by the Adviser.
In reaching the conclusion to approve the continuation of the Investment Advisory Agreement, the Independent Trustees requested and obtained from the Adviser such information as the Independent Trustees deemed reasonably necessary to evaluate the Investment Advisory Agreement. The Independent Trustees carefully evaluated this information and were advised by independent legal counsel with respect to their deliberations. In addition, the Board also received a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements, and the Independent Trustees met in executive session outside the presence of Fund management, and participated in question and answer sessions with representatives of the Adviser.
In considering the continuation of the Investment Advisory Agreement, the Board determined that the agreement would enable shareholders of the Funds to continue to obtain high quality services at a cost that was appropriate, reasonable, and in the best interests of their shareholders. The Board, including the Independent Trustees, unanimously approved the continuation of the existing Investment Advisory Agreement. In reaching their decision, the Trustees carefully considered information that they had received throughout the year as part of their regular oversight of the Funds, including, in particular, information from the Adviser that the Board had received relating to the Investment Advisory Agreement at the Meetings. The Trustees noted that, at the Meetings, they had obtained and reviewed a wide variety of information, including certain comparative information regarding performance of the Funds relative to performance of other comparable funds.
As a part of their consideration of the approval of the Investment Advisory Agreement at the Meetings, the Trustees, including the Independent Trustees, had evaluated a number of considerations, including among others: (a) the nature and quality of the Adviser’s investment advisory and other services; (b) the Adviser’s investment management personnel; (c) the Adviser’s operations and financial condition; (d) the Adviser’s brokerage practices (including any soft dollar arrangements) and investment strategies; (e) the level of the fees that the Adviser charges compared with the fees charged to comparable funds or accounts, giving special attention to the absence of breakpoints in these fees and the rationale provide by the Adviser as to why the addition of breakpoints was not currently appropriate; (f) each Fund’s overall fees and operating expenses compared with similar funds; (g) the level of the Adviser’s profitability from its Fund-related operations; (h) the Adviser’s compliance systems; (i) the Adviser’s policies and compliance procedures applicable to personal securities transactions; (j) the Adviser’s reputation, expertise and resources in the financial markets; and (k) Fund performance compared with similar funds. In its deliberations, the Board did not identify any single piece of information that was all-important or controlling. Based on the Board’s deliberations at the Meetings the Board, including all of the Independent Trustees, unanimously: (a) concluded that the terms of the Investment Advisory Agreement are fair and reasonable; (b) concluded that the Adviser’s fees were reasonable in light of the services that it provides to the Funds; and (c) agreed to approve and continue the Investment Advisory Agreement based upon the following considerations, among others:
| • | Nature, Extent and Quality of Services Provided by the Adviser. At the Meetings, the Board reviewed the scope of services to be provided by the Adviser under the Investment Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by the Adviser for the past year and the scope of services required to be provided during the upcoming year. The Trustees also considered the Adviser’s representations to the Board that the Adviser would continue to provide investment and related services that were of materially the same quality and quantity as services provided to the Funds in the past, and that these services are appropriate in scope and extent in light of the Funds’ operations, the competitive landscape of the investment company business and investor needs. |
| • | Fund Expenses and Performance of the Funds and the Adviser. At the Meetings, the Board reviewed statistical information provided by the Adviser regarding the expense ratio components and performance of each Fund. The Adviser engaged FUSE Research Network LLC (“FUSE”), an independent, third party research provider, to prepare advisory contract renewal reports to help the Board fulfill its advisory contract renewal responsibilities. The objective of the reports is to present the subject Funds’ relative position regarding fees, expenses and total return performance, with peer group and universe comparisons. This statistical information related to the expense ratio components included actual advisory fees, waivers/reimbursements, and gross and net total expenses for each Fund in comparison to other funds determined by FUSE to comprise each Fund’s applicable peer group. The Board also considered the Adviser’s representation that it found the peer groups compiled by FUSE to be appropriate. The statistical information related to the performance of each Fund included three month and one, three, and five year performance for the Fund compared to its peers. |
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 239 |
| OTHER INFORMATION (Unaudited) (concluded) |
| • | Costs of Services Provided to the Funds and Profits Realized by the Adviser and its Affiliates. At the Meetings, the Board had reviewed information about the profitability of the Funds to the Adviser based on the advisory fees payable under the current Investment Advisory Agreement for the last calendar year. At the Meetings, the Board also analyzed the Funds’ expenses, including the investment advisory fees paid to the Adviser, and reviewed reports comparing the expense ratios of the Funds to those of other comparable funds. The Board also reviewed information regarding the direct revenue received by the Adviser and ancillary revenue received by the Adviser and/or its affiliates in connection with the services provided to the Funds by the Adviser and/or its affiliates. The Board also discussed the Adviser’s profit margin as reflected in the Adviser’s profitability analysis. |
| • | Economies of Scale. In connection with its review of the Funds’ profitability analysis at the Meetings, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds’ asset levels. The Trustees noted that the fees would not change due to breakpoints under the current Investment Advisory Agreement, and that no additional economies of scale would be directly realized as a result of increases in the asset levels of the Funds. In light of the relatively small size of many of the Funds and the fact that the size of individual Funds in the complex increases and decreases significantly from time to time due to unlimited trading that is permitted among most of the Funds in the complex, the Board concluded that economies of scale were not likely to be directly realized as a result of increases in the asset levels of the individual Funds, and accordingly, fee breakpoints were not currently appropriate for the Funds. |
| • | Other Benefits to the Adviser and/or its Affiliates. In addition to evaluating the services provided by the Adviser, the Board had considered the nature, extent, quality and cost of the administrative, distribution, and shareholder services performed by the Adviser’s affiliates under separate agreements at the Meetings. The Board noted that the Adviser reports portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or the Adviser at each quarterly Board meeting. |
On the basis of the information provided to it and its evaluation of that information, the Board, including the Independent Trustees, concluded that the terms of the Investment Advisory Agreement for the Funds were reasonable, and that approval of the Investment Advisory Agreement was in the best interests of the Funds.
| 240 | THE RYDEX FUNDS SEMI-ANNUAL REPORT |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) |
A Board of Trustees oversees the Trust, as well as other trusts of GI, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 800.820.0888.
All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
TRUSTEE AND OFFICER
| Name and | | Length of Service as Trustee | | Number of Funds |
| Year of Birth | | (Year Began) | | Overseen |
| Donald C. Cacciapaglia* | | Rydex Series Funds – 2012 | | 211 |
| (1951) | | Rydex Variable Trust – 2012 | | |
| | | Rydex Dynamic Funds – 2012 | | |
| | | Rydex ETF Trust – 2012 | | |
Principal Occupations During Past Five Years: Current: Security Investors, LLC: President and CEO from April 2012 to present; Guggenheim Investments: President and Chief Administrative Officer from February 2010 to present; Previous: Channel Capital Group, Inc.: Chairman and CEO from April 2002 to February 2010
Positions held within the Trust: Trustee from 2012 to present; President from 2012 to present
INDEPENDENT TRUSTEES
| Name and | | Length of Service as Trustee | | Number of Funds |
| Year of Birth | | (Year Began) | | Overseen |
| Corey A. Colehour | | Rydex Series Funds – 1993 | | 131 |
| (1945) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired; Previous: President and Senior Vice President of Schield Management Company (registered investment adviser) from 2003 to 2006
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
| | | | | |
| J. Kenneth Dalton | | Rydex Series Funds – 1995 | | 131 |
| (1941) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1995 to present; Member and Chairman of the Audit Committee from 1997 to present; Member of the Governance and Nominating Committees from 1995 to present; and Member of the Risk Oversight Committee from 2010 to present
| | | | | |
| John O. Demaret | | Rydex Series Funds – 1997 | | 131 |
| (1940) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired
Positions held within the Trust: Trustee from 1997 to present; Chairman of the Board from 2006 to present; Member of the Audit Committee from 1997 to present; and Member of the Risk Oversight Committee from 2010 to present
| | | | | |
| Werner E. Keller | | Rydex Series Funds – 2005 | | 131 |
| (1940) | | Rydex Variable Trust – 2005 | | |
| | | Rydex Dynamic Funds – 2005 | | |
| | | Rydex ETF Trust – 2005 | | |
Principal Occupations During Past Five Years: Current: Founder and President of Keller Partners, LLC (investment research firm) from 2005 to present; Previous: Retired from 2001 to 2005
Positions held within the Trust: Vice Chairman of the Board of Trustees from 2010 to present; Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present; and Chairman and Member of the Risk Oversight Committee from 2010 to present
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 241 |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (continued) |
INDEPENDENT TRUSTEES - concluded
| Name and | | Length of Service as Trustee | | Number of Funds |
| Year of Birth | | (Year Began) | | Overseen |
| Thomas F. Lydon, Jr. | | Rydex Series Funds – 2005 | | 131 |
| (1960) | | Rydex Variable Trust – 2005 | | |
| | | Rydex Dynamic Funds – 2005 | | |
| | | Rydex ETF Trust – 2005 | | |
Principal Occupations During Past Five Years: Current: President of Global Trends Investments (registered investment adviser) from 1996 to present
Positions held within the Trust: Trustee and Member of the Audit and Governance and Nominating Committees from 2005 to present
| | | | | |
| Patrick T. McCarville | | Rydex Series Funds – 1997 | | 131 |
| (1942) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Retired; Previous: Chief Executive Officer of Par Industries, Inc., d/b/a Par Leasing from 1977 to 2010
Positions held within the Trust: Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; and Chairman of the Governance and Nominating Committees from 1997 to present
| | | | | |
| Roger Somers | | Rydex Series Funds – 1993 | | 131 |
| (1944) | | Rydex Variable Trust – 1998 | | |
| | | Rydex Dynamic Funds – 1999 | | |
| | | Rydex ETF Trust – 2003 | | |
Principal Occupations During Past Five Years: Current: Founder and Chief Executive Officer of Arrow Limousine from 1965 to present
Positions held within the Trust: Trustee from 1993 to present; Member of the Audit and Governance and Nominating Committees from 1995 to present
EXECUTIVE OFFICERS
| Name, Position and | | | Principal Occupations | |
| Year of Birth | | | During Past Five Years | |
| | | |
Michael P. Byrum* Vice President (1970) | | Current: President, Security Benefit Asset Management Holdings, LLC; Senior Vice President, Security Investors, LLC; President & Chief Investment Officer, Rydex Holdings, LLC; Director & Chairman of the Board, Advisor Research Center, Inc.; and Manager, Rydex Specialized Products, LLC |
| | | |
| | | Previous: Guggenheim Distributors, LLC (f/k/a Rydex Distributors, LLC), Vice President (2009); Rydex Fund Services, LLC, Director (2009–2010), Secretary (2002–2010); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.), Director (2008–2010), Chief Investment Officer (2006–2010), President (2004–2010), Secretary (2002–2010); Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Director (2008–2010), Chief Investment Officer (2006–2010), President (2004–2010), Secretary (2002–2010); Advisor Research Center, Inc., Secretary (2006–2009), and Executive Vice President (2006) |
| | | |
Nikolaos Bonos*
Vice President and Treasurer (1963) | | 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; Treasurer, SBL Fund; Security Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; and Vice President, Security Benefit Asset Management Holdings, LLC |
| | | |
| | | Previous: Security Global Investors, LLC, Senior Vice President (2010-2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) Senior Vice President (2006-2011); Rydex Fund Services, LLC (f/k/a Rydex Fund Services, Inc.), Director (2009); and Rydex Specialized Products, LLC, Chief Financial Officer (2005-2009) |
| 242 | the RYDEX FUNDS SEMI-ANNUAL REPORT |
| INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited) (concluded) |
EXECUTIVE OFFICERS – concluded
| Name, Position and | | | Principal Occupations | |
| Year of Birth | | | During Past Five Years | |
| | | |
Elisabeth Miller* Chief Compliance Officer (1968) | | Current: Chief Compliance Officer, Rydex Series Funds, Rydex Dynamic Funds, Rydex Variable Trust, Rydex ETF Trust, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund, Security Mid Cap Growth Fund, SBL Fund, Security Investors, LLC, and Guggenheim Distributors, LLC |
| | | |
| | | Previous: Senior Manager, Security Investors, LLC and Guggenheim Distributors, LLC (2004–2009) |
| | | |
Amy J. Lee* Vice President and Secretary (1961) | | Current: Managing Director, Guggenheim Investments; Senior Vice President & Secretary, Security Investors, LLC; Secretary & Vice President, Rydex ETF Trust, Rydex Dynamic Funds, Rydex Variable Trust, SBL Fund, Security Equity Fund, Security Income Fund, Security Large Cap Value Fund and Security Mid Cap Growth Fund; Vice President & Secretary, Rydex Holdings, LLC; Secretary, Advisor Research Center, Inc., Guggenheim Specialized Products, LLC, Guggenheim Distributors, LLC and Rydex Fund Services, LLC Previous: Vice President, Associate General Counsel & Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (1987–2012); Security Global Investors, LLC, Senior Vice President & Secretary (2007–2011); Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Senior Vice President & Secretary (2010–2011) |
| | | |
Joseph M. Arruda*
Assistant Treasurer (1966) | | Current: Assistant Treasurer, SBL Fund; Security Equity Fund; Security Income Fund; Security Large Cap Value Fund & Security Mid Cap Growth Fund; Vice President, Security Investors, LLC; and Chief Financial Officer & Manager, Rydex Specialized Products, LLC |
| | | |
| | Previous: Security Global Investors, LLC, Vice President (2010–2011); and Rydex Advisors, LLC (f/k/a PADCO Advisors, Inc.) & Rydex Advisors II, LLC (f/k/a PADCO Advisors II, Inc.), Vice President (2004–2011) |
* Officers of the Funds are deemed to be “interested persons” of the Trust, within the meaning of Section 2(a) (19) of the 1940 Act, in as much as this person is affiliated with Guggenheim Investments.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 243 |
| GUGGENHEIM INVESTMENTS PRIVACY POLICIES |
Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Distributors, LLC, Security Investors, LLC, Security Distributors, Inc. and Rydex Advisory Services (Collectively “Guggenheim Investments”).
Our Commitment to You
When you become a Guggenheim Investments 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 Guggenheim Investments 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 Guggenheim Investments account application or when you request a transaction that involves Rydex and Guggenheim Investments funds or one of the Guggenheim Investments 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 Guggenheim Investments. For example, if you ask to transfer assets from another financial institution to Guggenheim Investments, we will need to provide certain information about you to that company to complete the transaction. To alert you to other Guggenheim Investments investment products and services, we may share your information within the Guggenheim Investments family of affiliated companies. This would include, for example, sharing your information within Guggenheim Investments so we can make you aware of new Rydex and Guggenheim Investments funds or the services offered through another Guggenheim Investments 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, guggenheiminvestments.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 Guggenheim Investments 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 Guggenheim Investments 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.
| 244 | the RYDEX FUNDS SEMI-ANNUAL REPORT |
| GUGGENHEIM INVESTMENTS PRIVACY POLICIES (concluded) |
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 guggenheiminvestments.com. Should you have any questions regarding our privacy policy, contact us at 800.820.0888 or 301.296.5100.
| THE RYDEX FUNDS SEMI-ANNUAL REPORT | 245 |
Item 2. Code of Ethics.
Not applicable at this time.
Item 3. Audit Committee Financial Expert.
Not applicable at this time.
Item 4. Principal Accountant Fees and Services.
Not applicable at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
Schedule of Investments is included as part of the report to shareholders filed 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 Managers 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.
Not applicable.
Item 11. Controls and Procedures.
(a) The registrant’s President (principal executive officer) and Treasurer (principal financial officer) have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective as of that date in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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.
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) | Rydex Series Funds | |
| By (Signature and Title)* | /s/ Donald C. Cacciapaglia | |
| | Donald C. Cacciapaglia, President | |
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/ Donald C. Cacciapaglia | |
| | Donald C. Cacciapaglia, President | |
| By (Signature and Title)* | /s/ Nikolaos Bonos | |
| | Nikolaos Bonos, Vice President and Treasurer | |
* Print the name and title of each signing officer under his or her signature.
