Rydex Russell 2000 Fund (RYRHX) N-CSR Certified annual shareholder report (management investment company)

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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 600Rockville, Maryland 20850(Address of principal executive offices) (Zip code)

Amy J. Lee

Rydex Series Funds805 King Farm Boulevard, Suite 600Rockville, 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: March 31, 2016

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.

The registrant’s annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), is as follows:

 

3.31.2016

Rydex Funds Annual Report

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-ANN-2-0316x0317 guggenheiminvestments.com

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	3
ABOUT SHAREHOLDERS’ FUND EXPENSES	6
BANKING FUND	11
BASIC MATERIALS FUND	19
BIOTECHNOLOGY FUND	27
CONSUMER PRODUCTS FUND	35
ELECTRONICS FUND	44
ENERGY FUND	52
ENERGY SERVICES FUND	61
FINANCIAL SERVICES FUND	68
HEALTH CARE FUND	78
INTERNET FUND	87
LEISURE FUND	95
PRECIOUS METALS FUND	104
REAL ESTATE FUND	111
RETAILING FUND	120
TECHNOLOGY FUND	128
TELECOMMUNICATIONS FUND	137
TRANSPORTATION FUND	145
UTILITIES FUND	153
NOTES TO FINANCIAL STATEMENTS	161
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	173
OTHER INFORMATION	174
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	176
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	179

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2016

Dear Shareholder:

Security Investors, LLC (the “Investment Adviser”) is pleased to present the annual shareholder report for 18 of our sector funds (the “Funds”) for the annual period ended March 31, 2016.

The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), a global, diversified financial services firm.

Guggenheim Funds Distributors, LLC is the distributor of the Funds. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim and the Investment Adviser.

We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Performance Report and 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
April 30, 2016

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.

Sector funds may not be suitable for all investors. Investing in sector funds is more volatile than investing in broadly diversified funds, as there is a greater risk due to the concentration of the fund’s holdings in issuers of the same or similar offerings. These funds are considered non-diversified and can invest a greater portion of their assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of fund shares than would occur in a more diversified fund.

2 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited) March 31, 2016

Financial markets were buffeted by a variety of events over the past year, including volatility in the oil market, weak growth and a devaluation in China, ongoing stimulus from global central banks, and a delayed September rate hike by the U.S. Federal Reserve (the “Fed”)—and then capped by a 25 basis point increase in the U.S. federal funds target rate in December. While the direct impact of the move was fairly insignificant, the decision to begin normalization of interest rates after seven years of unprecedented liquidity provision was not. Indeed, in 2015, risk assets posted their worst annual performance since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concern about plunging commodity prices, and slowing economic growth in China and other emerging market economies.

As 2016 began, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Estimates for first quarter gross domestic product (“GDP”) in the U.S. were marked down, even though first quarter GDP has undershot full-year growth rates in six out of the last seven years. Risk assets rallied in the last half of the first quarter, led by a dovish pivot in the Fed’s communication that spurred a rally in crude oil and a reversal of dollar strength. The weaker dollar, along with optimism about a production freeze agreed to by a group of major oil producing countries, helped oil to rebound. After falling in the early weeks of the year to a cycle low of $26 per barrel on February 11, 2016, the front-month West Texas Intermediate (“WTI”) oil futures contract rallied as high as $40 per barrel before closing the quarter at $38 per barrel.

The outlook for economic growth outside the U.S. softened in the first quarter. A further deterioration in the euro zone inflation outlook prompted the European Central Bank (“ECB”) to announce an increase in the size of its monthly asset purchases and reduce its deposit rate to -40 basis points. European government bonds rallied following the announcement, with the 10-year German bund ending the first quarter with a yield of just 16 basis points.

Ongoing stimulus efforts in Asia also appeared likely to contribute to low U.S. rates. Chinese industrial production growth continued to slow in early 2016, prompting the People’s Bank of China (“PBOC”) to stimulate credit growth by allowing banks to hold fewer reserves against deposits. And after years of struggling with stagnant growth and low inflation, the Bank of Japan (“BOJ”) surprised markets by cutting its key interest rate to -10 basis points in January. The negative rates pushed a considerable amount of Japanese savings into foreign markets.

In an environment where global rates are moving lower and markets are already starved for yield, foreign investors began looking to the U.S. Guggenheim expects that U.S. Treasury yields will fall further as the gravitational pull of global yields gets stronger, and does not discount the possibility of 10-year U.S. Treasury yields declining to closer to 1 percent before the end of the year.

A stronger dollar has weighed on the U.S. economy, but consumer spending has been resilient. The labor market is now operating near full employment, and tight labor market conditions are beginning to spur faster wage growth. We believe the U.S. economy is fundamentally sound, and find little evidence to support the conclusion that the economy will fall into a recession in 2016.

Despite the relative health of the U.S. economy, markets are concerned that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. Our view is that the Fed remains focused on fulfilling its dual mandate objectives of maximum employment and price stability, and thus is biased toward normalizing policy. We expect further declines in the unemployment rate as job gains outstrip growth in the labor force. Meanwhile, core and headline inflation should move closer to the Fed’s target by year end, reflecting our forecasts for a tighter labor market and a modest rise in oil prices. Normally, this would result in at least two Fed rate hikes on the table for 2016, but the U.S. Fed is becoming more sensitive to global financial conditions and the extent of global money flows that occur as monetary policy in the U.S. diverges from Europe, Japan and China. As a result, we have reduced our expectations for a June rate hike, although it would normally be an easy call. We continue to believe a December rate hike is a near certainty. A solid macroeconomic backdrop and a rebalancing oil market should support an improving credit picture in the second half of 2016.

For the 12 months ended March 31, 2016, the Standard & Poor’s 500^® (“S&P 500”) Index* returned 1.78%. The Morgan Stanley Capital International (“MSCI”) Europe-Australasia-Far East (“EAFE”) Index* returned -8.27%. The return of the MSCI Emerging Markets Index* was -12.03%.

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited)(continued) March 31, 2016

In the bond market, the Barclays U.S. Aggregate Bond Index* posted a 1.96% return for the period, while the Barclays U.S. Corporate High Yield Index* returned -3.69%. The return of the Bank of America Merrill (“BofA”) Lynch 3-Month U.S. Treasury Bill Index* was 0.12% for the 12-month period.

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.

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.

Barclays U.S. Corporate High Yield Index measures the market of U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

BofA 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.

MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.

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 U.S. REIT Index is a free-float market capitalization weighted index that is comprised of equity real estate investment trust (“REIT”) securities that belong to the MSCI U.S. Investable Market 2500 Index. The MSCI U.S. REIT Index includes only REIT securities that are of reasonable size in terms of full and free float-adjusted market capitalization to ensure that the performance of the equity REIT universe can be captured and replicated in actual institutional and retail portfolios of different sizes.

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.

S&P 500^® Consumer Discretionary Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Consumer Discretionary Index includes companies in the following industries: automobiles and components, consumer durables, apparel, hotels, restaurants, leisure, media, and retailing.

S&P 500^® Consumer Staples Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Consumer Staples Index comprises companies whose businesses are less sensitive to economic cycles. It includes manufacturers and distributors of food, beverages, and tobacco and producers of nondurable household goods and personal products. It also includes food & drug retailing companies as well as hypermarkets and consumer super centers.

S&P 500^® Energy Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Energy Index comprises companies whose businesses are dominated by either of the following activities: the construction or provision of oil rigs, drilling equipment, and other energy-related equipment and services, including seismic data collection; companies engaged in the exploration, production, marketing, refining, and/or transportation of oil and gas products, coal, and other consumable fuels.

S&P 500^® Financials Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Financials Index contains companies involved in activities such as banking, mortgage finance, consumer finance, specialized finance, investment banking and brokerage, asset management and custody, corporate lending, insurance, financial investment, and real estate, including REITs.

S&P 500^® Health Care Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Health Care Index encompasses two main industry groups. The first includes companies which manufacture health care equipment and supplies or provide health care-related services, including distributors of health care products, providers of basic health-care services, and owners and operators of health care facilities and organizations. The first group also includes companies operating in the health care technology industry. The second group includes companies primarily involved in the research, development, production, and marketing of pharmaceuticals, biotechnology, and life sciences products.

S&P 500^® Industrials Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Industrials Index includes companies whose businesses are dominated by one of the following activities: the manufacture and distribution of capital goods, including aerospace & defense, construction, engineering & building products, electrical equipment, and industrial machinery; the provision of commercial services and supplies, including printing, environmental, office, and security services; the provision of professional services, including employment and research & consulting services; or the provision of transportation services, including airlines, couriers, marine, road & rail, and transportation infrastructure.

4 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2016

S&P 500^® Information Technology Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Information Technology Index covers the following general areas: technology software & services, including companies that primarily develop software in various fields such as the internet, applications, systems, databases management, and/or home entertainment, and companies that provide information technology consulting and services, as well as data processing and outsourced services; secondly, technology hardware & equipment, including manufacturers and distributors of communications equipment, computers & peripherals, electronic equipment, and related instruments; and thirdly, semiconductors & semiconductor equipment manufacturers.

S&P 500^® Materials Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Materials Index encompasses a wide range of commodity-related manufacturing industries. Included in this sector are companies that manufacture chemicals, construction materials, glass, paper, forest products, and related packaging products, and metals, minerals, and mining companies, including producers of steel.

S&P 500^® Telecommunication Services Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Telecommunications Services Index contains companies that provide communications services primarily through a fixed-line, cellular, wireless, high bandwidth, and/or fiber optic cable network.

S&P 500^® Utilities Index is a sub-index of the S&P 500^® Index, a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues). The Utilities Index encompasses those companies considered electric, gas or water utilities, or companies that operate as independent producers and/or distributors of power.

THE RYDEX FUNDS ANNUAL REPORT | 5

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 September 30, 2015 and ending March 31, 2016.

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 up to the past five years (subject to the Fund’s inception date), 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.

6 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 1. Based on actual Fund return3
Banking Fund
Investor Class	1.36%	(5.68%)	$ 1,000.00	$ 943.20	$ 6.61
A-Class	1.61%	(5.79%)	1,000.00	942.10	7.82
C-Class	2.36%	(6.16%)	1,000.00	938.40	11.44
H-Class	1.61%	(5.77%)	1,000.00	942.30	7.82
Basic Materials Fund
Investor Class	1.36%	16.52%	1,000.00	1,165.20	7.36
A-Class	1.61%	16.36%	1,000.00	1,163.60	8.71
C-Class	2.36%	15.94%	1,000.00	1,159.40	12.74
H-Class	1.60%	16.39%	1,000.00	1,163.90	8.66
Biotechnology Fund
Investor Class	1.34%	(14.70%)	1,000.00	853.00	6.21
A-Class	1.59%	(14.81%)	1,000.00	851.90	7.36
C-Class	2.34%	(15.13%)	1,000.00	848.70	10.81
H-Class	1.59%	(14.80%)	1,000.00	852.00	7.36
Consumer Products Fund
Investor Class	1.35%	11.98%	1,000.00	1,119.80	7.15
A-Class	1.60%	11.84%	1,000.00	1,118.40	8.47
C-Class	2.36%	11.42%	1,000.00	1,114.20	12.47
H-Class	1.60%	11.82%	1,000.00	1,118.20	8.47
Electronics Fund
Investor Class	1.36%	13.91%	1,000.00	1,139.10	7.27
A-Class	1.61%	13.78%	1,000.00	1,137.80	8.60
C-Class	2.36%	13.33%	1,000.00	1,133.30	12.59
H-Class	1.62%	13.76%	1,000.00	1,137.60	8.66
Energy Fund
Investor Class	1.36%	(3.01%)	1,000.00	969.90	6.70
A-Class	1.61%	(3.13%)	1,000.00	968.70	7.92
C-Class	2.36%	(3.46%)	1,000.00	965.40	11.60
H-Class	1.61%	(3.16%)	1,000.00	968.40	7.92
Energy Services Fund
Investor Class	1.36%	(2.37%)	1,000.00	976.30	6.72
A-Class	1.61%	(2.47%)	1,000.00	975.30	7.95
C-Class	2.36%	(2.82%)	1,000.00	971.80	11.63
H-Class	1.61%	(2.47%)	1,000.00	975.30	7.95
Financial Services Fund
Investor Class	1.36%	1.41%	1,000.00	1,014.10	6.85
A-Class	1.61%	1.29%	1,000.00	1,012.90	8.10
C-Class	2.36%	0.92%	1,000.00	1,009.20	11.85
H-Class	1.61%	1.28%	1,000.00	1,012.80	8.10
Health Care Fund
Investor Class	1.37%	(3.88%)	1,000.00	961.20	6.72
A-Class	1.61%	(3.98%)	1,000.00	960.20	7.89
C-Class	2.37%	(4.34%)	1,000.00	956.60	11.59
H-Class	1.62%	(3.95%)	1,000.00	960.50	7.94

THE RYDEX FUNDS ANNUAL REPORT | 7

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Internet Fund
Investor Class	1.36%	5.70%	$ 1,000.00	$ 1,057.00	$ 6.99
A-Class	1.61%	5.57%	1,000.00	1,055.70	8.27
C-Class	2.36%	5.17%	1,000.00	1,051.70	12.11
H-Class	1.61%	5.54%	1,000.00	1,055.40	8.27
Leisure Fund
Investor Class	1.36%	7.47%	1,000.00	1,074.70	7.05
A-Class	1.61%	7.32%	1,000.00	1,073.20	8.34
C-Class	2.36%	6.93%	1,000.00	1,069.30	12.21
H-Class	1.61%	7.35%	1,000.00	1,073.50	8.35
Precious Metals Fund
Investor Class	1.26%	49.50%	1,000.00	1,495.00	7.86
A-Class	1.51%	49.28%	1,000.00	1,492.80	9.41
C-Class	2.26%	48.75%	1,000.00	1,487.50	14.05
H-Class	1.51%	49.17%	1,000.00	1,491.70	9.41
Real Estate Fund
A-Class	1.59%	10.63%	1,000.00	1,106.30	8.37
C-Class	2.34%	10.19%	1,000.00	1,101.90	12.30
H-Class	1.58%	10.62%	1,000.00	1,106.20	8.32
Retailing Fund
Investor Class	1.36%	3.81%	1,000.00	1,038.10	6.93
A-Class	1.61%	3.67%	1,000.00	1,036.70	8.20
C-Class	2.36%	3.29%	1,000.00	1,032.90	11.99
H-Class	1.61%	3.68%	1,000.00	1,036.80	8.20
Technology Fund
Investor Class	1.36%	7.25%	1,000.00	1,072.50	7.05
A-Class	1.61%	7.10%	1,000.00	1,071.00	8.34
C-Class	2.36%	6.70%	1,000.00	1,067.00	12.20
H-Class	1.61%	7.11%	1,000.00	1,071.10	8.34
Telecommunications Fund
Investor Class	1.37%	8.01%	1,000.00	1,080.10	7.12
A-Class	1.61%	7.85%	1,000.00	1,078.50	8.37
C-Class	2.37%	7.41%	1,000.00	1,074.10	12.29
H-Class	1.62%	7.83%	1,000.00	1,078.30	8.42
Transportation Fund
Investor Class	1.36%	3.22%	1,000.00	1,032.20	6.91
A-Class	1.61%	3.08%	1,000.00	1,030.80	8.17
C-Class	2.36%	2.69%	1,000.00	1,026.90	11.96
H-Class	1.61%	3.12%	1,000.00	1,031.20	8.18
Utilities Fund
Investor Class	1.37%	16.97%	1,000.00	1,169.70	7.43
A-Class	1.61%	16.81%	1,000.00	1,168.10	8.73
C-Class	2.36%	16.41%	1,000.00	1,164.10	12.77
H-Class	1.61%	16.88%	1,000.00	1,168.80	8.73

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
Banking Fund
Investor Class	1.36%	5.00%	$ 1,000.00	$ 1,018.20	$ 6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Basic Materials Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.60%	5.00%	1,000.00	1,017.00	8.07
Biotechnology Fund
Investor Class	1.34%	5.00%	1,000.00	1,018.30	6.76
A-Class	1.59%	5.00%	1,000.00	1,017.05	8.02
C-Class	2.34%	5.00%	1,000.00	1,013.30	11.78
H-Class	1.59%	5.00%	1,000.00	1,017.05	8.02
Consumer Products Fund
Investor Class	1.35%	5.00%	1,000.00	1,018.25	6.81
A-Class	1.60%	5.00%	1,000.00	1,017.00	8.07
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.60%	5.00%	1,000.00	1,017.00	8.07
Electronics Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.62%	5.00%	1,000.00	1,016.90	8.17
Energy Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Energy Services Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Financial Services Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Health Care Fund
Investor Class	1.37%	5.00%	1,000.00	1,018.15	6.91
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.37%	5.00%	1,000.00	1,013.15	11.93
H-Class	1.62%	5.00%	1,000.00	1,016.90	8.17

THE RYDEX FUNDS ANNUAL REPORT | 9

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Internet Fund
Investor Class	1.36%	5.00%	$ 1,000.00	$ 1,018.20	$ 6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Leisure Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Precious Metals Fund
Investor Class	1.26%	5.00%	1,000.00	1,018.70	6.36
A-Class	1.51%	5.00%	1,000.00	1,017.45	7.62
C-Class	2.26%	5.00%	1,000.00	1,013.70	11.38
H-Class	1.51%	5.00%	1,000.00	1,017.45	7.62
Real Estate Fund
A-Class	1.59%	5.00%	1,000.00	1,017.05	8.02
C-Class	2.34%	5.00%	1,000.00	1,013.30	11.78
H-Class	1.58%	5.00%	1,000.00	1,017.10	7.97
Retailing Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Technology Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Telecommunications Fund
Investor Class	1.37%	5.00%	1,000.00	1,018.15	6.91
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.37%	5.00%	1,000.00	1,013.15	11.93
H-Class	1.62%	5.00%	1,000.00	1,016.90	8.17
Transportation Fund
Investor Class	1.36%	5.00%	1,000.00	1,018.20	6.86
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
Utilities Fund
Investor Class	1.37%	5.00%	1,000.00	1,018.15	6.91
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.61%	5.00%	1,000.00	1,016.95	8.12

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 183/366 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2015 to March 31, 2016.

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Banking Fund Investor Class returned -10.10%, compared with the S&P 500 Financials Index, which returned -4.55%. The broader S&P 500 Index returned 1.78%.

The industry that contributed the most to the performance was commercial banks, followed by thrifts & mortgage finance. The banks industry, the Fund’s largest allocation, was the leading detractor from return, followed by the capital markets industry.

Among the best-performing holdings in the Fund for the period were First Republic Bank, Bancolombia S.A. ADR, and preferred shares of Banco Bradesco S.A. ADR. The worst-performing holdings for the period were Citigroup, Inc., Deutsche Bank AG, and Credit Suisse AG ADR.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	March 30, 2001
H-Class*	April 1, 1998

Ten Largest Holdings (% of Total Net Assets)
Bank of America Corp.	3.7%
JPMorgan Chase & Co.	3.7%
Citigroup, Inc.	3.5%
Wells Fargo & Co.	3.5%
U.S. Bancorp	3.1%
PNC Financial Services Group, Inc.	2.4%
Bank of New York Mellon Corp.	2.3%
Capital One Financial Corp.	2.2%
BB&T Corp.	1.8%
State Street Corp.	1.8%
Top Ten Total	28.0%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 11

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-10.10%	2.97%	-5.22%
A-Class Shares	-10.31%	2.71%	-5.48%
A-Class Shares with sales charge†	-14.57%	1.72%	-5.94%
C-Class Shares	-10.99%	1.94%	-6.12%
C-Class Shares with CDSC‡	-11.88%	1.94%	-6.12%
H-Class Shares**	-10.34%	2.52%	-5.67%
S&P 500 Financials Index	-4.55%	8.66%	-1.48%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Financials Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

12 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
BANKING FUND

	Shares		Value
COMMON STOCKS† - 99.7%
Banks - 94.7%
Bank of America Corp.		34,184	$	462,168
JPMorgan Chase & Co.		7,801		461,975
Citigroup, Inc.		10,692		446,391
Wells Fargo & Co.		9,214		445,589
U.S. Bancorp		9,514		386,173
PNC Financial Services Group, Inc.		3,540		299,378
Bank of New York Mellon Corp.		7,811		287,679
Capital One Financial Corp.		4,004		277,517
BB&T Corp.		6,968		231,826
State Street Corp.		3,840		224,717
SunTrust Banks, Inc.		5,420		195,554
M&T Bank Corp.		1,742		193,361
Northern Trust Corp.		2,723		177,458
Fifth Third Bancorp		9,945		165,982
ICICI Bank Ltd. ADR		21,735		155,623
Citizens Financial Group, Inc.		7,247		151,825
First Republic Bank		2,193		146,141
Regions Financial Corp.		18,233		143,129
KeyCorp		12,635		139,490
HDFC Bank Ltd. ADR		2,262		139,407
Royal Bank of Canada		2,380		136,993
Toronto-Dominion Bank		3,160		136,291
HSBC Holdings plc ADR		4,310		134,127
Credicorp Ltd.		1,009		132,189
Itau Unibanco Holding S.A. ADR		15,388		132,183
Bank of Nova Scotia		2,699		131,873
Banco Bradesco S.A. ADR		17,669		131,634
Bank of Montreal		2,143		130,059
Huntington Bancshares, Inc.		13,362		127,473
Popular, Inc.		4,418		126,399
Grupo Financiero Santander Mexico SAB de CV ADR		13,801		124,623
Bancolombia S.A. ADR		3,620		123,732
Canadian Imperial Bank of Commerce		1,647		123,047
Signature Bank*		901		122,644
UBS Group AG		7,631		122,249
Credit Suisse Group AG ADR*		8,611		121,673
Banco Santander Chile ADR		6,215		120,260
ING Groep N.V. ADR		9,945		118,644
Barclays plc ADR		13,711		118,189
Deutsche Bank AG		6,887		116,666
Sumitomo Mitsui Financial Group, Inc. ADR		19,401		116,600
Comerica, Inc.		3,057		115,769
Banco Santander S.A. ADR		26,065		113,643
Banco Bilbao Vizcaya Argentaria S.A. ADR		17,171		111,955
SVB Financial Group*		1,079		110,111
CIT Group, Inc.		3,374		104,695
Zions Bancorporation		4,144		100,326
East West Bancorp, Inc.		3,060		99,389
PacWest Bancorp		2,671		99,228
Commerce Bancshares, Inc.		2,149		96,597
Western Alliance Bancorporation*		2,678		89,392
Bank of the Ozarks, Inc.		2,102		88,221
Synovus Financial Corp.		3,044		88,002
BankUnited, Inc.		2,511		86,479
Umpqua Holdings Corp.		5,414		85,866
FirstMerit Corp.		4,075		85,779
BOK Financial Corp.		1,523		83,186
Webster Financial Corp.		2,303		82,678
Cullen/Frost Bankers, Inc.		1,494		82,334
Prosperity Bancshares, Inc.		1,762		81,739
PrivateBancorp, Inc. — Class A		2,110		81,446
First Horizon National Corp.		6,203		81,259
First Citizens BancShares, Inc. — Class A		319		80,091
Home BancShares, Inc.		1,936		79,279
Bank of Hawaii Corp.		1,153		78,727
FNB Corp.		5,806		75,536
Associated Banc-Corp.		4,150		74,451
United Bankshares, Inc.		1,979		72,629
Valley National Bancorp		7,502		71,569
UMB Financial Corp.		1,384		71,456
MB Financial, Inc.		2,164		70,222
Fulton Financial Corp.		5,218		69,817
Cathay General Bancorp		2,448		69,352
Wintrust Financial Corp.		1,544		68,461
TCF Financial Corp.		5,412		66,351
Pinnacle Financial Partners, Inc.		1,344		65,937
BancorpSouth, Inc.		3,084		65,720
IBERIABANK Corp.		1,280		65,626
First Financial Bankshares, Inc.		2,163		63,982
CVB Financial Corp.		3,657		63,815
Glacier Bancorp, Inc.		2,498		63,499
Hilltop Holdings, Inc.*		3,274		61,813
Columbia Banking System, Inc.		2,004		59,960
Hancock Holding Co.		2,606		59,834
Texas Capital Bancshares, Inc.*		1,551		59,527
Community Bank System, Inc.		1,531		58,500
Trustmark Corp.		2,499		57,552
South State Corp.		891		57,229
Great Western Bancorp, Inc.		2,055		56,040
First Midwest Bancorp, Inc.		3,026		54,529
Old National Bancorp		4,473		54,526
National Penn Bancshares, Inc.		5,064		53,881
Talmer Bancorp, Inc. — Class A		2,810		50,833
Westamerica Bancorporation		1,032		50,269
BBCN Bancorp, Inc.		3,290		49,975
Boston Private Financial Holdings, Inc.		3,952		45,250
LegacyTexas Financial Group, Inc.		2,200		43,230
Total Banks				11,956,493
Savings & Loans - 3.8%
New York Community Bancorp, Inc.		8,170		129,903
People’s United Financial, Inc.		6,408		102,079
Investors Bancorp, Inc.		8,054		93,749
First Niagara Financial Group, Inc.		8,784		85,029

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 13

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
BANKING FUND

	Shares		Value
Sterling Bancorp		4,210	$	67,065
Total Savings & Loans				477,825
Insurance - 0.9%
Voya Financial, Inc.		3,735		111,191
Real Estate - 0.3%
HFF, Inc. — Class A		1,650		45,425
Total Common Stocks
(Cost $8,870,910)				12,590,934

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.7%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	94,691		94,691
Total Repurchase Agreement
(Cost $94,691)				94,691
Total Investments - 100.4%
(Cost $8,965,601)			$	12,685,625
Other Assets & Liabilities, net - (0.4)%				(55,704	)
Total Net Assets - 100.0%			$	12,629,921

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	12,590,934	$	—	$	—	$	12,590,934
Repurchase Agreement		—		94,691		—		94,691
Total	$	12,590,934	$	94,691	$	—	$	12,685,625

For the year ended March 31, 2016, there were no transfers between levels.

14 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

BANKING FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $8,870,910)	$	12,590,934
Repurchase agreements, at value (cost $94,691)		94,691
Total investments (cost $8,965,601)		12,685,625
Receivables:
Dividends		28,606
Foreign taxes reclaim		3,511
Fund shares sold		200
Total assets		12,717,942
Liabilities:
Payable for:
Fund shares redeemed		66,439
Management fees		10,705
Distribution and service fees		3,207
Transfer agent and administrative fees		3,148
Portfolio accounting fees		1,260
Miscellaneous		3,262
Total liabilities		88,021
Commitments and contingent liabilities (Note 10)		—
Net assets	$	12,629,921
Net assets consist of:
Paid in capital	$	36,844,128
Undistributed net investment income		269,048
Accumulated net realized loss on investments		(28,203,279	)
Net unrealized appreciation on investments		3,720,024
Net assets	$	12,629,921
Investor Class:
Net assets	$	7,205,601
Capital shares outstanding		128,377
Net asset value per share	$	56.13
A-Class:
Net assets	$	876,353
Capital shares outstanding		17,000
Net asset value per share	$	51.55
Maximum offering price per share (Net asset value divided by 95.25%)	$	54.12
C-Class:
Net assets	$	3,188,154
Capital shares outstanding		67,515
Net asset value per share	$	47.22
H-Class:
Net assets	$	1,359,813
Capital shares outstanding		27,078
Net asset value per share	$	50.22

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $12,374)	$	754,244
Income from securities lending, net		1,726
Interest		93
Total investment income		756,063
Expenses:
Management fees		271,370
Transfer agent and administrative fees		79,815
Distribution and service fees:
A-Class		6,285
C-Class		36,747
H-Class**		16,961
Portfolio accounting fees		31,926
Custodian fees		3,782
Trustees’ fees*		2,093
Line of credit fees		101
Miscellaneous		37,935
Total expenses		487,015
Net investment income		269,048
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(3,164,939	)
Net realized loss		(3,164,939	)
Net change in unrealized appreciation (depreciation) on:
Investments		(31,048	)
Net change in unrealized appreciation (depreciation)		(31,048	)
Net realized and unrealized loss		(3,195,987	)
Net decrease in net assets resulting from operations	$	(2,926,939	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 15

BANKING FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	269,048		$	84,494
Net realized loss on investments		(3,164,939	)		(1,094,981	)
Net change in unrealized appreciation (depreciation) on investments		(31,048	)		(1,758,526	)
Net decrease in net assets resulting from operations		(2,926,939	)		(2,769,013	)
Distributions to shareholders from:
Net investment income
Investor Class		(51,827	)		(62,935	)
A-Class		(8,948	)		(9,050	)
C-Class		(21,332	)		(30,239	)
H-Class*		(2,387	)		(2,498	)
Total distributions to shareholders		(84,494	)		(104,722	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		87,235,741			83,258,043
A-Class		10,514,018			8,604,560
C-Class		17,189,341			17,385,423
H-Class*		112,516,867			50,602,118
Distributions reinvested
Investor Class		49,679			61,028
A-Class		8,716			6,880
C-Class		21,120			27,648
H-Class*		2,376			2,476
Cost of shares redeemed
Investor Class		(123,610,616	)		(48,577,787	)
A-Class		(9,638,810	)		(15,238,033	)
C-Class		(16,568,748	)		(18,472,784	)
H-Class*		(111,099,432	)		(50,158,024	)
Net increase (decrease) from capital share transactions		(33,379,748	)		27,501,548
Net increase (decrease) in net assets		(36,391,181	)		24,627,813
Net assets:
Beginning of year		49,021,102			24,393,289
End of year	$	12,629,921		$	49,021,102
Undistributed net investment income at end of year	$	269,048		$	84,494
Capital share activity:
Shares sold
Investor Class		1,376,130			1,317,679
A-Class		175,337			147,860
C-Class		320,598			323,866
H-Class*		2,045,614			911,673
Shares issued from reinvestment of distributions
Investor Class		788			954
A-Class		150			117
C-Class		396			507
H-Class*		42			43
Shares redeemed
Investor Class		(1,949,956	)		(793,962	)
A-Class		(176,727	)		(271,097	)
C-Class		(312,183	)		(344,416	)
H-Class*		(2,033,623	)		(906,078	)
Net increase (decrease) in shares		(553,434	)		387,146

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

16 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

BANKING 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	62.71		$	63.60		$	52.58		$	46.75		$	49.75
Income (loss) from investment operations:
Net investment income (loss)a		.68			.51			.54			.54			.44
Net gain (loss) on investments (realized and unrealized)		(6.97	)		(.98	)		11.09			5.44			(3.39	)
Total from investment operations		(6.29	)		(.47	)		11.63			5.98			(2.95	)
Less distributions from:
Net investment income		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Total distributions		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Net asset value, end of period	$	56.13		$	62.71		$	63.60		$	52.58		$	46.75
Total Returnb		(10.10	%)		(0.73	%)		22.17	%		12.84	%		(5.89	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,206		$	43,989		$	11,241		$	8,915		$	29,061
Ratios to average net assets:
Net investment income (loss)		1.07	%		0.82	%		0.92	%		1.16	%		1.02	%
Total expenses		1.34	%		1.34	%		1.37	%		1.35	%		1.34	%
Portfolio turnover rate		514	%		583	%		481	%		382	%		544	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	57.76		$	58.75		$	48.74		$	43.45		$	46.38
Income (loss) from investment operations:
Net investment income (loss)a		.40			.26			.39			.36			.30
Net gain (loss) on investments (realized and unrealized)		(6.32	)		(.83	)		10.23			5.08			(3.18	)
Total from investment operations		(5.92	)		(.57	)		10.62			5.44			(2.88	)
Less distributions from:
Net investment income		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Total distributions		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Net asset value, end of period	$	51.55		$	57.76		$	58.75		$	48.74		$	43.45
Total Returnb		(10.31	%)		(0.98	%)		21.84	%		12.60	%		(6.19	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	876		$	1,054		$	8,305		$	2,103		$	3,088
Ratios to average net assets:
Net investment income (loss)		0.69	%		0.45	%		0.71	%		0.88	%		0.73	%
Total expenses		1.59	%		1.60	%		1.62	%		1.59	%		1.61	%
Portfolio turnover rate		514	%		583	%		481	%		382	%		544	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 17

BANKING 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	53.34		$	54.69		$	45.74		$	41.09		$	44.20
Income (loss) from investment operations:
Net investment income (loss)a		.03			(.14	)		(.05	)		.01			(.01	)
Net gain (loss) on investments (realized and unrealized)		(5.86	)		(.79	)		9.61			4.79			(3.05	)
Total from investment operations		(5.83	)		(.93	)		9.56			4.80			(3.06	)
Less distributions from:
Net investment income		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Total distributions		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Net asset value, end of period	$	47.22		$	53.34		$	54.69		$	45.74		$	41.09
Total Returnb		(10.99	%)		(1.71	%)		20.95	%		11.74	%		(6.88	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,188		$	3,131		$	4,307		$	4,036		$	3,841
Ratios to average net assets:
Net investment income (loss)		0.05	%		(0.26	%)		(0.10	%)		0.02	%		(0.03	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.35	%
Portfolio turnover rate		514	%		583	%		481	%		382	%		544	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	56.30		$	57.40		$	47.71		$	42.63		$	45.63
Income (loss) from investment operations:
Net investment income (loss)a		.33			(.01	)		.23			.17			.12
Net gain (loss) on investments (realized and unrealized)		(6.12	)		(.67	)		10.07			5.06			(3.07	)
Total from investment operations		(5.79	)		(.68	)		10.30			5.23			(2.95	)
Less distributions from:
Net investment income		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Total distributions		(.29	)		(.42	)		(.61	)		(.15	)		(.05	)
Net asset value, end of period	$	50.22		$	56.30		$	57.40		$	47.71		$	42.63
Total Returnb		(10.34	%)		(1.19	%)		21.64	%		12.32	%		(6.43	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,360		$	847		$	540		$	4,235		$	1,105
Ratios to average net assets:
Net investment income (loss)		0.57	%		(0.02	%)		0.44	%		0.38	%		0.30	%
Total expenses		1.68	%		1.85	%		1.87	%		1.86	%		1.83	%
Portfolio turnover rate		514	%		583	%		481	%		382	%		544	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

18 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Basic Materials Fund Investor Class returned -8.07%, compared with -6.00% for the S&P 500 Materials Index. The broader S&P 500 Index returned 1.78%.

The Fund is composed largely of two industries—chemicals, and metals & mining. The industry that contributed the most to the performance of the Fund was metals & mining, followed by the construction materials industry. Chemicals was the largest detractor from return, followed by the containers & packaging industry.

The top-performing holdings were Barrick Gold Corp, AngloGold Ashanti Ltd. ADR, and Newmont Mining Corp. The worst-performing holdings included WestRock Co., Freeport-McMoRan, Inc., and CF Industries Holdings, Inc.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	May 3, 2001
H-Class*	April 14, 1998

Ten Largest Holdings (% of Total Net Assets)
Dow Chemical Co.	3.1%
EI du Pont de Nemours & Co.	3.1%
Monsanto Co.	2.5%
LyondellBasell Industries N.V. — Class A	2.5%
Ecolab, Inc.	2.4%
Praxair, Inc.	2.4%
Air Products & Chemicals, Inc.	2.3%
PPG Industries, Inc.	2.3%
Sherwin-Williams Co.	2.1%
International Paper Co.	1.7%
Top Ten Total	24.4%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 19

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-8.07%	-3.60%	3.26%
A-Class Shares	-8.29%	-3.84%	3.01%
A-Class Shares with sales charge†	-12.65%	-4.77%	2.51%
C-Class Shares	-8.98%	-4.55%	2.23%
C-Class Shares with CDSC‡	-9.87%	-4.55%	2.23%
H-Class Shares**	-8.36%	-4.05%	2.76%
S&P 500 Materials Index	-6.00%	4.82%	5.85%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Materials Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

20 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
BASIC MATERIALS FUND

	Shares		Value
COMMON STOCKS† - 99.4%
Chemicals - 49.6%
Dow Chemical Co.		24,634	$	1,252,885
EI du Pont de Nemours & Co.		19,378		1,227,015
Monsanto Co.		11,406		1,000,762
LyondellBasell Industries N.V. — Class A		11,496		983,828
Ecolab, Inc.		8,721		972,567
Praxair, Inc.		8,372		958,176
Air Products & Chemicals, Inc.		6,468		931,715
PPG Industries, Inc.		8,190		913,103
Sherwin-Williams Co.		2,916		830,098
Valspar Corp.		5,116		547,514
Airgas, Inc.		3,836		543,331
Eastman Chemical Co.		7,388		533,635
Celanese Corp. — Class A		7,782		509,721
International Flavors & Fragrances, Inc.		4,461		507,528
Mosaic Co.		17,963		485,001
Ashland, Inc.		4,072		447,757
Albemarle Corp.		6,999		447,446
Axalta Coating Systems Ltd.*		15,320		447,344
RPM International, Inc.		9,131		432,170
CF Industries Holdings, Inc.		13,510		423,403
Potash Corporation of Saskatchewan, Inc.		23,800		405,076
Westlake Chemical Corp.		8,470		392,161
Agrium, Inc.		4,433		391,390
FMC Corp.		9,381		378,711
WR Grace & Co.*		5,296		376,969
NewMarket Corp.		826		327,311
Cabot Corp.		5,965		288,288
Huntsman Corp.		21,648		287,918
Syngenta AG ADR		3,430		284,073
Olin Corp.		16,318		283,444
Sensient Technologies Corp.		4,400		279,224
PolyOne Corp.		8,862		268,076
Methanex Corp.		8,310		266,917
HB Fuller Co.		5,843		248,035
Minerals Technologies, Inc.		4,105		233,369
Platform Specialty Products Corp.*		25,840		222,224
Chemtura Corp.*		8,280		218,592
Axiall Corp.		9,520		207,917
Total Chemicals				19,754,694
Mining - 19.5%
Newmont Mining Corp.		23,008		611,553
Barrick Gold Corp.		44,018		597,764
Alcoa, Inc.		59,089		566,072
Freeport-McMoRan, Inc.		52,860		546,572
Goldcorp, Inc.		29,851		484,482
Rio Tinto plc ADR		15,485		437,761
BHP Billiton Ltd. ADR		14,155		366,614
Agnico Eagle Mines Ltd.		10,113		365,686
AngloGold Ashanti Ltd. ADR*		26,019		356,200
Randgold Resources Ltd. ADR		3,704		336,360
Franco-Nevada Corp.		5,464		335,380
Silver Wheaton Corp.		20,128		333,722
Southern Copper Corp.		11,460		317,557
Cia de Minas Buenaventura S.A.A. ADR*		42,202		310,607
Royal Gold, Inc.		5,883		301,739
Pan American Silver Corp.		24,372		264,924
Eldorado Gold Corp.		80,300		253,748
Compass Minerals International, Inc.		3,558		252,120
Teck Resources Ltd. — Class B		31,639		240,773
Kaiser Aluminum Corp.		2,340		197,824
Stillwater Mining Co.*		17,263		183,851
Century Aluminum Co.*		16,402		115,634
Total Mining				7,776,943
Packaging & Containers - 11.4%
Ball Corp.		7,364		524,980
Sealed Air Corp.		10,793		518,171
WestRock Co.		13,159		513,595
Crown Holdings, Inc.*		8,854		439,070
Packaging Corporation of America		6,700		404,680
Sonoco Products Co.		7,550		366,704
Bemis Company, Inc.		6,972		361,010
Berry Plastics Group, Inc.*		9,466		342,196
Graphic Packaging Holding Co.		25,989		333,959
Silgan Holdings, Inc.		5,600		297,752
Owens-Illinois, Inc.*		15,840		252,806
KapStone Paper and Packaging Corp.		13,901		192,529
Total Packaging & Containers				4,547,452
Iron & Steel - 7.3%
Nucor Corp.		13,721		649,004
Steel Dynamics, Inc.		17,292		389,243
Vale S.A. ADR		89,942		378,656
Reliance Steel & Aluminum Co.		5,318		367,952
ArcelorMittal		58,114		266,162
United States Steel Corp.		15,862		254,585
Commercial Metals Co.		13,636		231,403
Carpenter Technology Corp.		5,975		204,524
Allegheny Technologies, Inc.		10,278		167,531
Total Iron & Steel				2,909,060
Building Materials - 6.3%
Vulcan Materials Co.		6,014		634,898
Martin Marietta Materials, Inc.		3,409		543,770
Cemex SAB de CV ADR*		50,987		371,185
Eagle Materials, Inc.		4,461		312,761
Louisiana-Pacific Corp.*		16,003		273,971
GCP Applied Technologies, Inc.*		10,208		203,548
Boise Cascade Co.*		7,650		158,508
Total Building Materials				2,498,641

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 21

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
BASIC MATERIALS FUND

	Shares		Value
Forest Products & Paper - 2.4%
International Paper Co.		16,513	$	677,693
Domtar Corp.		6,753		273,497
Total Forest Products & Paper				951,190
Household Products & Housewares - 1.1%
Avery Dennison Corp.		6,033		435,040
Miscellaneous Manufacturing - 0.9%
AptarGroup, Inc.		4,804		376,682
Housewares - 0.9%
Scotts Miracle-Gro Co. — Class A		4,890		355,845
Total Common Stocks
(Cost $29,747,559)				39,605,547

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.7%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	271,891		271,891
Total Repurchase Agreement
(Cost $271,891)				271,891
Total Investments - 100.1%
(Cost $30,019,450)			$	39,877,438
Other Assets & Liabilities, net - (0.1)%				(31,122	)
Total Net Assets - 100.0%			$	39,846,316

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	39,605,547	$	—	$	—	$	39,605,547
Repurchase Agreement		—		271,891		—		271,891
Total	$	39,605,547	$	271,891	$	—	$	39,877,438

For the year ended March 31, 2016, there were no transfers between levels.

22 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

BASIC MATERIALS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $29,747,559)	$	39,605,547
Repurchase agreements, at value (cost $271,891)		271,891
Total investments (cost $30,019,450)		39,877,438
Cash		6,496
Receivables:
Fund shares sold		1,637,528
Dividends		59,817
Total assets		41,581,279
Liabilities:
Payable for:
Securities purchased		1,621,637
Fund shares redeemed		72,583
Management fees		22,887
Transfer agent and administrative fees		6,731
Distribution and service fees		3,047
Portfolio accounting fees		2,693
Miscellaneous		5,385
Total liabilities		1,734,963
Commitments and contingent liabilities (Note 10)		—
Net assets	$	39,846,316
Net assets consist of:
Paid in capital	$	56,945,867
Undistributed net investment income		61,626
Accumulated net realized loss on investments		(27,019,165	)
Net unrealized appreciation on investments		9,857,988
Net assets	$	39,846,316
Investor Class:
Net assets	$	30,653,130
Capital shares outstanding		678,489
Net asset value per share	$	45.18
A-Class:
Net assets	$	4,151,949
Capital shares outstanding		97,353
Net asset value per share	$	42.65
Maximum offering price per share (Net asset value divided by 95.25%)	$	44.78
C-Class:
Net assets	$	2,429,674
Capital shares outstanding		63,075
Net asset value per share	$	38.52
H-Class:
Net assets	$	2,611,563
Capital shares outstanding		63,127
Net asset value per share	$	41.37

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $12,574)	$	577,069
Income from securities lending, net		11,127
Interest		141
Total investment income		588,337
Expenses:
Management fees		264,956
Transfer agent and administrative fees		77,928
Distribution and service fees:
A-Class		12,257
C-Class		24,655
H-Class**		14,199
Portfolio accounting fees		31,171
Custodian fees		3,685
Tax expense		3,280
Trustees’ fees*		2,310
Line of credit fees		121
Miscellaneous		36,140
Total expenses		470,702
Net investment income		117,635
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		884,104
Net realized gain		884,104
Net change in unrealized appreciation (depreciation) on:
Investments		(5,935,320	)
Net change in unrealized appreciation (depreciation)		(5,935,320	)
Net realized and unrealized loss		(5,051,216	)
Net decrease in net assets resulting from operations	$	(4,933,581	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 23

BASIC MATERIALS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	117,635		$	201,682
Net realized gain on investments		884,104			451,596
Net change in unrealized appreciation (depreciation) on investments		(5,935,320	)		(3,176,749	)
Net decrease in net assets resulting from operations		(4,933,581	)		(2,523,471	)
Distributions to shareholders from:
Net investment income
Investor Class		(195,078	)		(126,318	)
A-Class		(71,772	)		(52,521	)
C-Class		(53,293	)		(38,108	)
H-Class*		(28,410	)		(15,206	)
Total distributions to shareholders		(348,553	)		(232,153	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		80,427,494			174,133,848
A-Class		14,088,359			17,363,620
C-Class		6,344,599			21,170,418
H-Class*		83,252,748			93,725,732
Distributions reinvested
Investor Class		192,206			122,696
A-Class		67,673			48,718
C-Class		51,084			33,909
H-Class*		28,316			14,751
Cost of shares redeemed
Investor Class		(95,728,062	)		(159,713,668	)
A-Class		(15,228,557	)		(24,254,035	)
C-Class		(6,757,601	)		(22,896,209	)
H-Class*		(79,518,030	)		(93,948,162	)
Net increase (decrease) from capital share transactions		(12,779,771	)		5,801,618
Net increase (decrease) in net assets		(18,061,905	)		3,045,994
Net assets:
Beginning of year		57,908,221			54,862,227
End of year	$	39,846,316		$	57,908,221
Undistributed net investment income at end of year	$	61,626		$	213,276
Capital share activity:
Shares sold
Investor Class		1,809,760			3,328,992
A-Class		314,160			343,124
C-Class		159,907			460,459
H-Class*		1,979,353			1,959,976
Shares issued from reinvestment of distributions
Investor Class		4,625			2,376
A-Class		1,725			995
C-Class		1,437			757
H-Class*		744			310
Shares redeemed
Investor Class		(2,062,804	)		(3,045,699	)
A-Class		(348,813	)		(481,155	)
C-Class		(170,516	)		(501,150	)
H-Class*		(1,961,860	)		(1,970,445	)
Net increase (decrease) in shares		(272,282	)		98,540

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

24 | THE RYDEX FUNDS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	50.18		$	52.53		$	49.94		$	49.80		$	56.36
Income (loss) from investment operations:
Net investment income (loss)a		.26			.29			.32			.46			.09
Net gain (loss) on investments (realized and unrealized)		(4.39	)		(2.26	)		2.58			(.15	)		(6.65	)
Total from investment operations		(4.13	)		(1.97	)		2.90			.31			(6.56	)
Less distributions from:
Net investment income		(.87	)		(.38	)		(.31	)		(.17	)		—
Total distributions		(.87	)		(.38	)		(.31	)		(.17	)		—
Net asset value, end of period	$	45.18		$	50.18		$	52.53		$	49.94		$	49.80
Total Returnb		(8.07	%)		(3.77	%)		5.84	%		0.65	%		(11.66	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	30,653		$	46,509		$	33,687		$	36,012		$	36,847
Ratios to average net assets:
Net investment income (loss)		0.55	%		0.56	%		0.66	%		0.95	%		0.17	%
Total expenses		1.35	%		1.34	%		1.38	%		1.36	%		1.36	%
Portfolio turnover rate		471	%		358	%		349	%		251	%		217	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	47.54		$	49.93		$	47.60		$	47.58		$	53.99
Income (loss) from investment operations:
Net investment income (loss)a		.10			.13			.22			.32			(.01	)
Net gain (loss) on investments (realized and unrealized)		(4.12	)		(2.14	)		2.42			(.13	)		(6.40	)
Total from investment operations		(4.02	)		(2.01	)		2.64			.19			(6.41	)
Less distributions from:
Net investment income		(.87	)		(.38	)		(.31	)		(.17	)		—
Total distributions		(.87	)		(.38	)		(.31	)		(.17	)		—
Net asset value, end of period	$	42.65		$	47.54		$	49.93		$	47.60		$	47.58
Total Returnb		(8.29	%)		(4.05	%)		5.58	%		0.41	%		(11.87	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,152		$	6,194		$	13,347		$	11,104		$	9,410
Ratios to average net assets:
Net investment income (loss)		0.24	%		0.27	%		0.47	%		0.69	%		(0.03	%)
Total expenses		1.60	%		1.60	%		1.63	%		1.61	%		1.61	%
Portfolio turnover rate		471	%		358	%		349	%		251	%		217	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 25

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	43.36		$	45.91		$	44.12		$	44.45		$	50.80
Income (loss) from investment operations:
Net investment income (loss)a		(.17	)		(.23	)		(.15	)		(.03	)		(.33	)
Net gain (loss) on investments (realized and unrealized)		(3.80	)		(1.94	)		2.25			(.13	)		(6.02	)
Total from investment operations		(3.97	)		(2.17	)		2.10			(.16	)		(6.35	)
Less distributions from:
Net investment income		(.87	)		(.38	)		(.31	)		(.17	)		—
Total distributions		(.87	)		(.38	)		(.31	)		(.17	)		—
Net asset value, end of period	$	38.52		$	43.36		$	45.91		$	44.12		$	44.45
Total Returnb		(8.98	%)		(4.76	%)		4.80	%		(0.35	%)		(12.50	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,430		$	3,133		$	5,150		$	6,666		$	8,317
Ratios to average net assets:
Net investment income (loss)		(0.43	%)		(0.49	%)		(0.34	%)		(0.07	%)		(0.73	%)
Total expenses		2.35	%		2.35	%		2.38	%		2.36	%		2.36	%
Portfolio turnover rate		471	%		358	%		349	%		251	%		217	%

H-Classe	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	46.19		$	48.64		$	46.50		$	46.61		$	53.00
Income (loss) from investment operations:
Net investment income (loss)a		.09			—	c		.08			.19			.08
Net gain (loss) on investments (realized and unrealized)		(4.04	)		(2.07	)		2.37			(.13	)		(6.47	)
Total from investment operations		(3.95	)		(2.07	)		2.45			.06			(6.39	)
Less distributions from:
Net investment income		(.87	)		(.38	)		(.31	)		(.17	)		—
Total distributions		(.87	)		(.38	)		(.31	)		(.17	)		—
Net asset value, end of period	$	41.37		$	46.19		$	48.64		$	46.50		$	46.61
Total Returnb		(8.36	%)		(4.30	%)		5.31	%		0.16	%		(12.08	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,612		$	2,073		$	2,678		$	3,616		$	5,287
Ratios to average net assets:
Net investment income (loss)		0.24	%		0.00	%d		0.18	%		0.43	%		0.17	%
Total expenses		1.64	%		1.85	%		1.88	%		1.86	%		1.86	%
Portfolio turnover rate		471	%		358	%		349	%		251	%		217	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Net investment income (loss) is less than $0.01 per share.
d	Less than 0.01%.
e	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

26 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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 biological engineering, and in the design, manufacture, or sale of related biotechnology products or services (“Biotechnology Companies”).

For the one-year period ended March 31, 2016, Biotechnology Fund Investor Class returned -25.98%, compared with the S&P 500 Health Care Index, which returned -5.18%. The broader S&P 500 Index returned 1.78%.

The Fund is composed of three industries, all of which detracted from return for the period. The biotechnology industry, the Fund’s largest allocation, was the largest detractor from return, followed by the pharmaceuticals industry and then the life sciences tools & services industry.

The best-performing holdings in the Fund were Synageva, BioPharma Corp., Dyax Corp., and Amgen, Inc. The worst-performing holdings in the Fund included Endo International plc, Biogen, Inc., and BioMarin Pharmaceutical, Inc.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	March 30, 2001
H-Class*	April 1, 1998

Ten Largest Holdings (% of Total Net Assets)
Gilead Sciences, Inc.	6.0%
Amgen, Inc.	5.8%
AbbVie, Inc.	5.2%
Celgene Corp.	4.8%
Biogen, Inc.	4.2%
Regeneron Pharmaceuticals, Inc.	3.3%
Alexion Pharmaceuticals, Inc.	3.2%
Baxalta, Inc.	2.9%
Illumina, Inc.	2.7%
Mylan N.V.	2.6%
Top Ten Total	40.7%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 27

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-25.98%	19.84%	11.88%
A-Class Shares	-26.17%	19.53%	11.60%
A-Class Shares with sales charge†	-29.68%	18.37%	11.06%
C-Class Shares	-26.72%	18.63%	10.78%
C-Class Shares with CDSC‡	-27.44%	18.63%	10.78%
H-Class Shares**	-26.22%	19.29%	11.35%
S&P 500 Health Care Index	-5.18%	17.64%	9.92%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Health Care Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

28 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
BIOTECHNOLOGY FUND

	Shares		Value
COMMON STOCKS† - 99.9%
Biotechnology - 62.7%
Gilead Sciences, Inc.		238,802	$	21,936,352
Amgen, Inc.		139,199		20,870,106
Celgene Corp.*		175,105		17,526,259
Biogen, Inc.*		58,481		15,223,774
Regeneron Pharmaceuticals, Inc.*		33,094		11,928,401
Alexion Pharmaceuticals, Inc.*		83,771		11,662,599
Illumina, Inc.*		61,523		9,973,494
Vertex Pharmaceuticals, Inc.*		110,170		8,757,413
Incyte Corp.*		107,499		7,790,453
BioMarin Pharmaceutical, Inc.*		91,644		7,558,797
Medivation, Inc.*		134,960		6,205,461
Alnylam Pharmaceuticals, Inc.*		77,133		4,841,638
Ionis Pharmaceuticals, Inc.*		109,787		4,446,374
Seattle Genetics, Inc.*		123,394		4,329,895
United Therapeutics Corp.*		38,486		4,288,495
Bio-Rad Laboratories, Inc. — Class A*		29,169		3,987,986
Charles River Laboratories International, Inc.*		50,065		3,801,936
Juno Therapeutics, Inc.*		99,300		3,782,337
Prothena Corporation plc*		91,800		3,778,488
Intrexon Corp.*		108,000		3,660,120
Intercept Pharmaceuticals, Inc.*		27,535		3,537,421
Merrimack Pharmaceuticals, Inc.*		389,300		3,258,441
Myriad Genetics, Inc.*		83,480		3,124,656
Ligand Pharmaceuticals, Inc. — Class B*		28,557		3,058,169
Kite Pharma, Inc.*		64,200		2,947,422
Medicines Co.*		92,672		2,944,189
Alder Biopharmaceuticals, Inc.*		102,300		2,505,327
Novavax, Inc.*		458,085		2,363,719
Halozyme Therapeutics, Inc.*		248,655		2,354,763
Acorda Therapeutics, Inc.*		85,622		2,264,702
Achillion Pharmaceuticals, Inc.*		272,000		2,099,840
ARIAD Pharmaceuticals, Inc.*		325,189		2,077,958
Sage Therapeutics, Inc.*		64,200		2,058,252
AMAG Pharmaceuticals, Inc.*		83,100		1,944,540
ZIOPHARM Oncology, Inc.*		261,862		1,943,016
Repligen Corp.*		71,544		1,918,810
ImmunoGen, Inc.*		210,900		1,796,868
Puma Biotechnology, Inc.*		59,816		1,756,796
Exact Sciences Corp.*		241,555		1,628,081
Momenta Pharmaceuticals, Inc.*		174,600		1,613,304
PDL BioPharma, Inc.		449,770		1,497,734
NewLink Genetics Corp.*		79,523		1,447,319
PTC Therapeutics, Inc.*		154,900		997,556
Total Biotechnology				227,489,261
Pharmaceuticals - 33.6%
AbbVie, Inc.		330,700		18,889,584
Baxalta, Inc.		257,500		10,403,000
Mylan N.V.*		203,610		9,437,323
Shire plc ADR		45,000		7,735,500
Quintiles Transnational Holdings, Inc.*		83,664		5,446,526
Alkermes plc*		136,478		4,666,183
Jazz Pharmaceuticals plc*		35,600		4,647,580
OPKO Health, Inc.*		409,740		4,257,199
ACADIA Pharmaceuticals, Inc.*		147,128		4,113,699
Neurocrine Biosciences, Inc.*		98,175		3,882,822
Akorn, Inc.*		149,400		3,515,382
Horizon Pharma plc*		204,800		3,393,536
PRA Health Sciences, Inc.*		74,860		3,201,014
Anacor Pharmaceuticals, Inc.*		55,900		2,987,855
Impax Laboratories, Inc.*		92,084		2,948,530
Pacira Pharmaceuticals, Inc.*		55,600		2,945,688
Nektar Therapeutics*		203,030		2,791,663
Agios Pharmaceuticals, Inc.*		64,604		2,622,922
Ironwood Pharmaceuticals, Inc. — Class A*		232,196		2,540,224
TESARO, Inc.*		57,303		2,523,051
Ophthotech Corp.*		58,000		2,451,660
Radius Health, Inc.*		70,600		2,219,664
Amicus Therapeutics, Inc.*		257,600		2,176,720
Insys Therapeutics, Inc.*		128,035		2,047,280
Heron Therapeutics, Inc.*		96,300		1,828,737
Depomed, Inc.*		131,100		1,826,223
Portola Pharmaceuticals, Inc.*		88,370		1,802,748
Clovis Oncology, Inc.*		89,797		1,724,102
Relypsa, Inc.*		109,500		1,483,725
Eagle Pharmaceuticals, Inc.*		33,900		1,372,950
Total Pharmaceuticals				121,883,090
Healthcare-Products - 2.8%
Bio-Techne Corp.		38,897		3,676,544
QIAGEN N.V.*		141,600		3,163,344
Cepheid*		94,348		3,147,449
Total Healthcare-Products				9,987,337
Commercial Services - 0.8%
Incorporated Research Holdings, Inc. — Class A*		71,300		2,938,273
Total Common Stocks
(Cost $233,909,229)				362,297,961
RIGHTS††† - 0.0%
Chelsea Therapeutics International
Expires 12/31/17*		231,107		—
Dyax Corp.
Expires 01/25/17*		167,165		—
Clinical Data, Inc.
Expires 12/31/20*		24,000		—
Total Rights
(Cost $17,304)				—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 29

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
BIOTECHNOLOGY FUND

	Face Amount		Value
REPURCHASE AGREEMENT††,1 - 0.3%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	972,186	$	972,186
Total Repurchase Agreement
(Cost $972,186)				972,186
Total Investments - 100.2%
(Cost $234,898,719)			$	363,270,147
Other Assets & Liabilities, net - (0.2)%				(591,597	)
Total Net Assets - 100.0%			$	362,678,550

*	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	Repurchase Agreement — See Note 5.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	362,297,961	$	—	$	—	$	362,297,961
Repurchase Agreement		—		972,186		—		972,186
Rights		—		—		—		—
Total	$	362,297,961	$	972,186	$	—	$	363,270,147

For the year ended March 31, 2016, there were no transfers between levels.

30 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

BIOTECHNOLOGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $233,926,533)	$	362,297,961
Repurchase agreements, at value (cost $972,186)		972,186
Total investments (cost $234,898,719)		363,270,147
Receivables:
Fund shares sold		758,710
Dividends		28,987
Interest		6
Total assets		364,057,850
Liabilities:
Payable for:
Fund shares redeemed		878,240
Management fees		265,004
Transfer agent and administrative fees		77,942
Distribution and service fees		38,528
Portfolio accounting fees		28,677
Miscellaneous		90,909
Total liabilities		1,379,300
Commitments and contingent liabilities (Note 10)		—
Net assets	$	362,678,550
Net assets consist of:
Paid in capital	$	258,549,310
Accumulated net investment loss		(1,026,432	)
Accumulated net realized loss on investments		(23,215,756	)
Net unrealized appreciation on investments		128,371,428
Net assets	$	362,678,550
Investor Class:
Net assets	$	260,475,736
Capital shares outstanding		3,813,667
Net asset value per share	$	68.30
A-Class:
Net assets	$	48,671,621
Capital shares outstanding		764,139
Net asset value per share	$	63.69
Maximum offering price per share (Net asset value divided by 95.25%)	$	66.87
C-Class:
Net assets	$	26,185,018
Capital shares outstanding		449,348
Net asset value per share	$	58.27
H-Class:
Net assets	$	27,346,175
Capital shares outstanding		441,087
Net asset value per share	$	62.00

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	2,326,191
Income from securities lending, net		850,339
Interest		2,157
Total investment income		3,178,687
Expenses:
Management fees		5,566,841
Transfer agent and administrative fees		1,637,302
Distribution and service fees:
A-Class		211,750
C-Class		398,336
H-Class**		198,769
Portfolio accounting fees		504,699
Custodian fees		75,927
Trustees’ fees*		46,408
Line of credit fees		7,055
Miscellaneous		802,430
Total expenses		9,449,517
Net investment loss		(6,270,830	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		7,692,022
Net realized gain		7,692,022
Net change in unrealized appreciation (depreciation) on:
Investments		(184,506,116	)
Net change in unrealized appreciation (depreciation)		(184,506,116	)
Net realized and unrealized loss		(176,814,094	)
Net decrease in net assets resulting from operations	$	(183,084,924	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 31

BIOTECHNOLOGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(6,270,830	)	$	(2,286,391	)
Net realized gain on investments		7,692,022			37,059,172
Net change in unrealized appreciation (depreciation) on investments		(184,506,116	)		131,104,324
Net increase (decrease) in net assets resulting from operations		(183,084,924	)		165,877,105
Distributions to shareholders from:
Net realized gains
Investor Class		(6,254,804	)		(14,483,457	)
A-Class		(1,249,744	)		(2,447,445	)
C-Class		(670,534	)		(1,355,470	)
H-Class*		(945,732	)		(2,030,607	)
Total distributions to shareholders		(9,120,814	)		(20,316,979	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		417,939,980			565,896,488
A-Class		49,892,327			66,728,700
C-Class		25,666,356			34,835,985
H-Class*		179,430,634			173,383,484
Distributions reinvested
Investor Class		6,001,463			13,882,734
A-Class		1,177,072			2,278,723
C-Class		654,350			1,312,852
H-Class*		945,257			2,002,511
Cost of shares redeemed
Investor Class		(524,242,886	)		(501,097,404	)
A-Class		(66,310,633	)		(48,804,711	)
C-Class		(29,104,862	)		(30,485,330	)
H-Class*		(199,112,976	)		(163,288,238	)
Net increase (decrease) from capital share transactions		(137,063,918	)		116,645,794
Net increase (decrease) in net assets		(329,269,656	)		262,205,920
Net assets:
Beginning of year		691,948,206			429,742,286
End of year	$	362,678,550		$	691,948,206
(Accumulated net investment loss)/Undistributed net investment income at end of year	$	(1,026,432	)	$	1
Capital share activity:
Shares sold
Investor Class		4,464,545			7,040,074
A-Class		581,344			882,961
C-Class		323,436			511,004
H-Class*		2,176,992			2,393,490
Shares issued from reinvestment of distributions
Investor Class		69,159			174,846
A-Class		14,537			30,636
C-Class		8,806			19,095
H-Class*		11,990			27,605
Shares redeemed
Investor Class		(6,039,629	)		(6,471,507	)
A-Class		(850,368	)		(691,018	)
C-Class		(395,078	)		(470,009	)
H-Class*		(2,488,023	)		(2,283,995	)
Net increase (decrease) in shares		(2,122,289	)		1,163,182

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

32 | THE RYDEX FUNDS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	93.63		$	68.47		$	48.97		$	36.90		$	29.16
Income (loss) from investment operations:
Net investment income (loss)a		(.75	)		(.27	)		(.51	)		(.40	)		(.34	)
Net gain (loss) on investments (realized and unrealized)		(23.30	)		28.59			20.01			12.47			8.08
Total from investment operations		(24.05	)		28.32			19.50			12.07			7.74
Less distributions from:
Net realized gains		(1.28	)		(3.16	)		—			—			—
Total distributions		(1.28	)		(3.16	)		—			—			—
Net asset value, end of period	$	68.30		$	93.63		$	68.47		$	48.97		$	36.90
Total Returnb		(25.98	%)		42.19	%		39.82	%		32.71	%		26.54	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	260,476		$	498,068		$	313,324		$	171,844		$	89,027
Ratios to average net assets:
Net investment income (loss)		(0.84	%)		(0.34	%)		(0.82	%)		(0.98	%)		(1.09	%)
Total expenses		1.32	%		1.33	%		1.36	%		1.35	%		1.36	%
Portfolio turnover rate		83	%		107	%		119	%		197	%		333	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	87.63		$	64.41		$	46.18		$	34.88		$	27.64
Income (loss) from investment operations:
Net investment income (loss)a		(.91	)		(.44	)		(.62	)		(.48	)		(.37	)
Net gain (loss) on investments (realized and unrealized)		(21.75	)		26.82			18.85			11.78			7.61
Total from investment operations		(22.66	)		26.38			18.23			11.30			7.24
Less distributions from:
Net realized gains		(1.28	)		(3.16	)		—			—			—
Total distributions		(1.28	)		(3.16	)		—			—			—
Net asset value, end of period	$	63.69		$	87.63		$	64.41		$	46.18		$	34.88
Total Returnb		(26.17	%)		41.83	%		39.48	%		32.40	%		26.19	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	48,672		$	89,260		$	51,270		$	26,391		$	4,741
Ratios to average net assets:
Net investment income (loss)		(1.09	%)		(0.59	%)		(1.07	%)		(1.21	%)		(1.30	%)
Total expenses		1.57	%		1.58	%		1.61	%		1.61	%		1.61	%
Portfolio turnover rate		83	%		107	%		119	%		197	%		333	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 33

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	80.88		$	60.10		$	43.41		$	33.04		$	26.38
Income (loss) from investment operations:
Net investment income (loss)a		(1.40	)		(.92	)		(.99	)		(.73	)		(.58	)
Net gain (loss) on investments (realized and unrealized)		(19.93	)		24.86			17.68			11.10			7.24
Total from investment operations		(21.33	)		23.94			16.69			10.37			6.66
Less distributions from:
Net realized gains		(1.28	)		(3.16	)		—			—			—
Total distributions		(1.28	)		(3.16	)		—			—			—
Net asset value, end of period	$	58.27		$	80.88		$	60.10		$	43.41		$	33.04
Total Returnb		(26.72	%)		40.75	%		38.45	%		31.39	%		25.25	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	26,185		$	41,424		$	27,170		$	13,677		$	6,969
Ratios to average net assets:
Net investment income (loss)		(1.84	%)		(1.34	%)		(1.82	%)		(1.96	%)		(2.06	%)
Total expenses		2.33	%		2.33	%		2.36	%		2.36	%		2.36	%
Portfolio turnover rate		83	%		107	%		119	%		197	%		333	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	85.38		$	62.98		$	45.27		$	34.27		$	27.22
Income (loss) from investment operations:
Net investment income (loss)a		(.96	)		(.61	)		(.74	)		(.56	)		(.48	)
Net gain (loss) on investments (realized and unrealized)		(21.14	)		26.17			18.45			11.56			7.53
Total from investment operations		(22.10	)		25.56			17.71			11.00			7.05
Less distributions from:
Net realized gains		(1.28	)		(3.16	)		—			—			—
Total distributions		(1.28	)		(3.16	)		—			—			—
Net asset value, end of period	$	62.00		$	85.38		$	62.98		$	45.27		$	34.27
Total Returnb		(26.22	%)		41.49	%		39.12	%		32.10	%		25.90	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	27,346		$	63,196		$	37,978		$	22,486		$	8,313
Ratios to average net assets:
Net investment income (loss)		(1.17	%)		(0.84	%)		(1.32	%)		(1.46	%)		(1.65	%)
Total expenses		1.65	%		1.83	%		1.86	%		1.86	%		1.87	%
Portfolio turnover rate		83	%		107	%		119	%		197	%		333	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

34 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Consumer Products Fund Investor Class returned 9.65%, compared with 11.43% for the S&P 500 Consumer Staples Index. The broader S&P 500 Index returned 1.78%.

The industry that contributed the most to return was tobacco, followed by food products. The leading detractors from return were the food & staples retailing industry, followed by the personal products industry.

Fund performance for the period got the biggest boost from Philip Morris International, Inc., Reynolds American, Inc., and Tyson Foods, Inc. — Class A. The Fund’s leading detractors during the period were Whole Foods Market, Inc., SUPERVALU, Inc., and Archer-Daniels-Midland Co.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	July 24, 2001
H-Class*	August 17, 1998

Ten Largest Holdings (% of Total Net Assets)
Procter & Gamble Co.	5.3%
Coca-Cola Co.	5.1%
PepsiCo, Inc.	4.4%
Philip Morris International, Inc.	4.3%
Altria Group, Inc.	4.0%
Kraft Heinz Co.	3.5%
Reynolds American, Inc.	3.0%
Mondelez International, Inc. — Class A	2.8%
Colgate-Palmolive Co.	2.8%
Kimberly-Clark Corp.	2.5%
Top Ten Total	37.7%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 35

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

 

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	9.65%	14.15%	10.73%
A-Class Shares	9.38%	13.87%	10.46%
A-Class Shares with sales charge†	4.18%	12.77%	9.92%
C-Class Shares	8.57%	13.01%	9.64%
C-Class Shares with CDSC‡	7.57%	13.01%	9.64%
H-Class Shares**	9.29%	13.62%	10.20%
S&P 500 Consumer Staples Index	11.43%	15.18%	11.47%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Consumer Staples Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

36 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
CONSUMER PRODUCTS FUND

	Shares		Value
COMMON STOCKS† - 99.2%
Food - 38.3%
Kraft Heinz Co.		187,090	$	14,697,791
Mondelez International, Inc. — Class A		297,564		11,938,267
General Mills, Inc.		147,367		9,335,698
Kroger Co.		240,394		9,195,070
Sysco Corp.		165,715		7,743,862
Kellogg Co.		101,056		7,735,837
Tyson Foods, Inc. — Class A		114,695		7,645,569
Hormel Foods Corp.		164,747		7,123,660
ConAgra Foods, Inc.		150,432		6,712,276
Hershey Co.		72,592		6,684,997
Campbell Soup Co.		103,417		6,596,970
JM Smucker Co.		45,331		5,885,777
McCormick & Company, Inc.		54,150		5,386,842
Whole Foods Market, Inc.		149,999		4,666,469
Ingredion, Inc.		38,530		4,114,619
WhiteWave Foods Co. — Class A*		98,546		4,004,909
Pilgrim’s Pride Corp.*		147,300		3,741,420
Blue Buffalo Pet Products, Inc.*		135,300		3,471,798
Pinnacle Foods, Inc.		75,900		3,391,212
TreeHouse Foods, Inc.*		38,401		3,331,287
Post Holdings, Inc.*		46,400		3,190,928
Sprouts Farmers Market, Inc.*		107,325		3,116,718
Hain Celestial Group, Inc.*		74,360		3,042,068
Flowers Foods, Inc.		156,792		2,894,380
Lancaster Colony Corp.		23,752		2,626,259
Cal-Maine Foods, Inc.		44,850		2,328,164
Darling Ingredients, Inc.*		168,744		2,222,358
B&G Foods, Inc.		63,565		2,212,698
Sanderson Farms, Inc.		23,038		2,077,567
Dean Foods Co.		101,903		1,764,960
Fresh Market, Inc.*		57,220		1,632,487
Total Food				160,512,917
Beverages - 23.1%
Coca-Cola Co.		459,056		21,295,607
PepsiCo, Inc.		178,205		18,262,448
Constellation Brands, Inc. — Class A		54,799		8,279,581
Monster Beverage Corp.*		57,079		7,613,197
Molson Coors Brewing Co. — Class B		70,816		6,811,083
Brown-Forman Corp. — Class B		68,459		6,741,158
Dr Pepper Snapple Group, Inc.		67,433		6,029,859
Anheuser-Busch InBev S.A. ADR		46,590		5,807,909
Coca-Cola Enterprises, Inc.		101,094		5,129,510
Ambev S.A. ADR		743,282		3,850,201
Fomento Economico Mexicano SAB de CV ADR		37,783		3,638,881
Diageo plc ADR		33,560		3,620,117
Total Beverages				97,079,551
Agriculture - 14.6%
Philip Morris International, Inc.		185,623		18,211,472
Altria Group, Inc.		265,167		16,615,364
Reynolds American, Inc.		252,605		12,708,558
Archer-Daniels-Midland Co.		183,203		6,652,101
British American Tobacco plc ADR		25,900		3,027,969
Vector Group Ltd.		110,419		2,521,970
Universal Corp.		29,864		1,696,574
Total Agriculture				61,434,008
Cosmetics & Personal Care - 13.0%
Procter & Gamble Co.		269,050		22,145,506
Colgate-Palmolive Co.		168,199		11,883,259
Estee Lauder Companies, Inc. — Class A		93,956		8,860,990
Coty, Inc. — Class A		166,602		4,636,534
Unilever N.V. — Class Y		87,251		3,898,375
Edgewell Personal Care Co.		40,135		3,232,072
Total Cosmetics & Personal Care				54,656,736
Household Products & Housewares - 6.0%
Kimberly-Clark Corp.		76,909		10,345,030
Clorox Co.		47,667		6,008,902
Church & Dwight Company, Inc.		56,266		5,186,600
Spectrum Brands Holdings, Inc.		34,700		3,792,016
Total Household Products & Housewares				25,332,548
Pharmaceuticals - 2.3%
Mead Johnson Nutrition Co. — Class A		72,379		6,150,043
Herbalife Ltd.*		56,314		3,466,690
Total Pharmaceuticals				9,616,733
Retail - 1.3%
Casey’s General Stores, Inc.		28,423		3,220,894
Nu Skin Enterprises, Inc. — Class A		58,130		2,223,473
Total Retail				5,444,367
Electrical Components & Equipment - 0.6%
Energizer Holdings, Inc.		58,935		2,387,457
Total Common Stocks
(Cost $309,182,883)				416,464,317
RIGHTS††† - 0.0%
PDC
Expires 01/17/17*		93,765		—
Casa Ley
Expires 01/17/19*		93,765		—
Total Rights
(Cost $23,055)				—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 37

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
CONSUMER PRODUCTS FUND

	Face Amount		Value
REPURCHASE AGREEMENT††,1 - 0.4%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	1,690,390	$	1,690,390
Total Repurchase Agreement
(Cost $1,690,390)				1,690,390
Total Investments - 99.6%
(Cost $310,896,328)			$	418,154,707
Other Assets & Liabilities, net - 0.4%				1,484,212
Total Net Assets - 100.0%			$	419,638,919

*	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	Repurchase Agreement — See Note 5.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	416,464,317	$	—	$	—	$	416,464,317
Repurchase Agreement		—		1,690,390		—		1,690,390
Rights		—		—		—		—
Total	$	416,464,317	$	1,690,390	$	—	$	418,154,707

For the year ended March 31, 2016, there were no transfers between levels.

38 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

CONSUMER PRODUCTS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $309,205,938)	$	416,464,317
Repurchase agreements, at value (cost $1,690,390)		1,690,390
Total investments (cost $310,896,328)		418,154,707
Receivables:
Fund shares sold		2,670,993
Dividends		1,054,802
Foreign taxes reclaim		30,324
Interest		10
Total assets		421,910,836
Liabilities:
Payable for:
Fund shares redeemed		1,757,398
Management fees		283,448
Transfer agent and administrative fees		83,367
Distribution and service fees		43,757
Portfolio accounting fees		30,304
Miscellaneous		73,643
Total liabilities		2,271,917
Commitments and contingent liabilities (Note 10)		—
Net assets	$	419,638,919
Net assets consist of:
Paid in capital	$	328,623,955
Undistributed net investment income		2,859,776
Accumulated net realized loss on investments		(19,103,191	)
Net unrealized appreciation on investments		107,258,379
Net assets	$	419,638,919
Investor Class:
Net assets	$	276,577,675
Capital shares outstanding		4,401,377
Net asset value per share	$	62.84
A-Class:
Net assets	$	53,560,371
Capital shares outstanding		916,655
Net asset value per share	$	58.43
Maximum offering price per share (Net asset value divided by 95.25%)	$	61.34
C-Class:
Net assets	$	23,798,664
Capital shares outstanding		457,327
Net asset value per share	$	52.04
H-Class:
Net assets	$	65,702,209
Capital shares outstanding		1,162,797
Net asset value per share	$	56.50

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $19,621)	$	7,464,012
Income from securities lending, net		61,812
Interest		1,874
Total investment income		7,527,698
Expenses:
Management fees		2,690,660
Transfer agent and administrative fees		791,369
Distribution and service fees:
A-Class		95,675
C-Class		186,977
H-Class**		160,650
Portfolio accounting fees		300,026
Custodian fees		36,928
Tax expense		22,118
Trustees’ fees*		20,407
Line of credit fees		623
Miscellaneous		384,607
Total expenses		4,690,040
Net investment income		2,837,658
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		973,509
Net realized gain		973,509
Net change in unrealized appreciation (depreciation) on:
Investments		24,512,809
Net change in unrealized appreciation (depreciation)		24,512,809
Net realized and unrealized gain		25,486,318
Net increase in net assets resulting from operations	$	28,323,976

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 39

CONSUMER PRODUCTS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	2,837,658		$	2,817,618
Net realized gain on investments		973,509			2,102,672
Net change in unrealized appreciation (depreciation) on investments		24,512,809			28,060,008
Net increase in net assets resulting from operations		28,323,976			32,980,298
Distributions to shareholders from:
Net investment income
Investor Class		(1,910,579	)		(990,101	)
A-Class		(334,945	)		(146,232	)
C-Class		(184,219	)		(80,799	)
H-Class*		(391,960	)		(228,315	)
Net realized gains
Investor Class		(2,901,894	)		(1,759,312	)
A-Class		(508,733	)		(259,839	)
C-Class		(279,802	)		(143,573	)
H-Class*		(595,331	)		(405,693	)
Total distributions to shareholders		(7,107,463	)		(4,013,864	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		350,581,088			261,191,921
A-Class		60,872,986			31,333,989
C-Class		20,783,158			23,898,739
H-Class*		167,016,501			186,583,796
Distributions reinvested
Investor Class		4,699,482			2,302,863
A-Class		687,164			319,969
C-Class		448,009			218,591
H-Class*		985,550			632,540
Cost of shares redeemed
Investor Class		(316,067,877	)		(162,176,613	)
A-Class		(43,169,090	)		(27,757,505	)
C-Class		(16,365,257	)		(22,094,028	)
H-Class*		(155,233,554	)		(169,292,713	)
Net increase from capital share transactions		75,238,160			125,161,549
Net increase in net assets		96,454,673			154,127,983
Net assets:
Beginning of year		323,184,246			169,056,263
End of year	$	419,638,919		$	323,184,246
Undistributed net investment income at end of year	$	2,859,776		$	2,821,703

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

40 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

CONSUMER PRODUCTS FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
Investor Class		5,896,971			4,679,252
A-Class		1,101,512			596,417
C-Class		420,631			506,456
H-Class*		3,121,495			3,693,937
Shares issued from reinvestment of distributions
Investor Class		81,887			40,408
A-Class		12,863			6,008
C-Class		9,390			4,561
H-Class*		19,078			12,254
Shares redeemed
Investor Class		(5,385,440	)		(2,874,581	)
A-Class		(797,084	)		(526,497	)
C-Class		(332,936	)		(469,691	)
H-Class*		(2,917,566	)		(3,339,602	)
Net increase in shares		1,230,801			2,328,922

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 41

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	58.55		$	52.08		$	47.79		$	40.19		$	36.37
Income (loss) from investment operations:
Net investment income (loss)a		.61			.71			.46			.57			.49
Net gain (loss) on investments (realized and unrealized)		4.92			6.44			5.81			7.14			4.82
Total from investment operations		5.53			7.15			6.27			7.71			5.31
Less distributions from:
Net investment income		(.49	)		(.24	)		(.46	)		(.11	)		(.57	)
Net realized gains		(.75	)		(.44	)		(1.52	)		—			(.92	)
Total distributions		(1.24	)		(.68	)		(1.98	)		(.11	)		(1.49	)
Net asset value, end of period	$	62.84		$	58.55		$	52.08		$	47.79		$	40.19
Total Returnb		9.65	%		13.77	%		13.24	%		19.26	%		15.06	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	276,578		$	222,954		$	102,231		$	181,945		$	155,432
Ratios to average net assets:
Net investment income (loss)		1.03	%		1.27	%		0.91	%		1.38	%		1.29	%
Total expenses		1.34	%		1.34	%		1.37	%		1.35	%		1.35	%
Portfolio turnover rate		104	%		87	%		112	%		230	%		402	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	54.66		$	48.79		$	45.00		$	37.93		$	34.49
Income (loss) from investment operations:
Net investment income (loss)a		.45			.48			.33			.44			.40
Net gain (loss) on investments (realized and unrealized)		4.56			6.07			5.44			6.74			4.53
Total from investment operations		5.01			6.55			5.77			7.18			4.93
Less distributions from:
Net investment income		(.49	)		(.24	)		(.46	)		(.11	)		(.57	)
Net realized gains		(.75	)		(.44	)		(1.52	)		—			(.92	)
Total distributions		(1.24	)		(.68	)		(1.98	)		(.11	)		(1.49	)
Net asset value, end of period	$	58.43		$	54.66		$	48.79		$	45.00		$	37.93
Total Returnb		9.38	%		13.47	%		12.95	%		18.98	%		14.80	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	53,560		$	32,762		$	25,538		$	21,604		$	21,021
Ratios to average net assets:
Net investment income (loss)		0.82	%		0.92	%		0.70	%		1.12	%		1.11	%
Total expenses		1.60	%		1.60	%		1.62	%		1.60	%		1.60	%
Portfolio turnover rate		104	%		87	%		112	%		230	%		402	%

42 | THE RYDEX FUNDS 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	49.18		$	44.29		$	41.32		$	35.11		$	32.28
Income (loss) from investment operations:
Net investment income (loss)a		.03			.09			(.01	)		.13			.12
Net gain (loss) on investments (realized and unrealized)		4.07			5.48			4.96			6.19			4.20
Total from investment operations		4.10			5.57			4.95			6.32			4.32
Less distributions from:
Net investment income		(.49	)		(.24	)		(.46	)		(.11	)		(.57	)
Net realized gains		(.75	)		(.44	)		(1.52	)		—			(.92	)
Total distributions		(1.24	)		(.68	)		(1.98	)		(.11	)		(1.49	)
Net asset value, end of period	$	52.04		$	49.18		$	44.29		$	41.32		$	35.11
Total Returnb		8.57	%		12.62	%		12.11	%		18.06	%		13.91	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	23,799		$	17,717		$	14,125		$	11,699		$	9,712
Ratios to average net assets:
Net investment income (loss)		0.05	%		0.20	%		(0.02	%)		0.37	%		0.36	%
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.35	%
Portfolio turnover rate		104	%		87	%		112	%		230	%		402	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	52.94		$	47.39		$	43.87		$	37.08		$	33.84
Income (loss) from investment operations:
Net investment income (loss)a		.39			.37			.24			.35			.24
Net gain (loss) on investments (realized and unrealized)		4.41			5.86			5.26			6.55			4.49
Total from investment operations		4.80			6.23			5.50			6.90			4.73
Less distributions from:
Net investment income		(.49	)		(.24	)		(.46	)		(.11	)		(.57	)
Net realized gains		(.75	)		(.44	)		(1.52	)		—			(.92	)
Total distributions		(1.24	)		(.68	)		(1.98	)		(.11	)		(1.49	)
Net asset value, end of period	$	56.50		$	52.94		$	47.39		$	43.87		$	37.08
Total Returnb		9.29	%		13.19	%		12.66	%		18.66	%		14.49	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	65,702		$	49,751		$	27,162		$	10,148		$	16,975
Ratios to average net assets:
Net investment income (loss)		0.72	%		0.74	%		0.51	%		0.93	%		0.68	%
Total expenses		1.66	%		1.85	%		1.87	%		1.85	%		1.84	%
Portfolio turnover rate		104	%		87	%		112	%		230	%		402	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 43

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Electronics Fund Investor Class returned -2.61%, compared with 8.06% for the S&P 500 Information Technology Index. The broader S&P 500 Index returned 1.78%.

Almost all the holdings in the Fund are in the semiconductors industry and the semiconductor equipment industry. Both detracted from the Fund’s performance for the period.

For the period, Fund performance got the biggest boost from NVIDIA Corp., KLA-Tencor Corp., and Intel Corp. Holdings detracting from Fund performance for the period were Micron Technology, Inc., SunEdison, Inc., and NXP Semiconductors N.V.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	March 26, 2001
H-Class*	April 2, 1998

Ten Largest Holdings (% of Total Net Assets)
Intel Corp.	8.7%
QUALCOMM, Inc.	6.1%
Broadcom Ltd.	5.5%
Texas Instruments, Inc.	5.3%
Applied Materials, Inc.	3.5%
NVIDIA Corp.	3.2%
NXP Semiconductor N.V.	3.0%
Analog Devices, Inc.	3.0%
Taiwan Semiconductor Manufacturing Company Ltd. ADR	2.9%
Skyworks Solutions, Inc.	2.7%
Top Ten Total	43.9%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

44 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-2.61%	6.09%	1.88%
A-Class Shares	-2.84%	5.82%	1.61%
A-Class Shares with sales charge†	-7.46%	4.80%	1.12%
C-Class Shares	-3.58%	4.99%	0.88%
C-Class Shares with CDSC‡	-4.54%	4.99%	0.88%
H-Class Shares**	-2.88%	5.59%	1.39%
S&P 500 Information Technology Index	8.06%	13.76%	9.23%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Information Technology Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 45

SCHEDULE OF INVESTMENTS	March 31, 2016
ELECTRONICS FUND

	Shares		Value
COMMON STOCKS† - 99.9%
Semiconductors - 93.3%
Intel Corp.		59,055	$	1,910,428
QUALCOMM, Inc.		26,400		1,350,095
Broadcom Ltd.		7,839		1,211,126
Texas Instruments, Inc.		20,418		1,172,401
Applied Materials, Inc.		36,124		765,107
NVIDIA Corp.		19,564		697,065
NXP Semiconductor N.V.*		8,017		649,938
Analog Devices, Inc.		10,978		649,787
Taiwan Semiconductor Manufacturing Company Ltd. ADR		24,003		628,879
Skyworks Solutions, Inc.		7,635		594,767
Lam Research Corp.		6,729		555,815
Xilinx, Inc.		11,228		532,544
KLA-Tencor Corp.		7,080		515,495
Linear Technology Corp.		11,202		499,161
Micron Technology, Inc.*		47,668		499,084
Maxim Integrated Products, Inc.		13,569		499,068
Microchip Technology, Inc.		9,843		474,433
Qorvo, Inc.*		8,045		405,548
Teradyne, Inc.		14,904		321,777
Microsemi Corp.*		8,262		316,517
ON Semiconductor Corp.*		32,269		309,460
ARM Holdings plc ADR		6,733		294,165
Marvell Technology Group Ltd.		28,512		293,959
Cavium, Inc.*		4,701		287,513
ASML Holding N.V. — Class G		2,862		287,316
Atmel Corp.		35,274		286,425
Synaptics, Inc.*		3,235		257,959
Mellanox Technologies Ltd.*		4,729		256,927
Cree, Inc.*		8,775		255,353
Integrated Device Technology, Inc.*		12,490		255,296
Cypress Semiconductor Corp.		29,144		252,387
Monolithic Power Systems, Inc.		3,893		247,751
M/A-COM Technology Solutions Holdings, Inc.*		5,331		233,444
Cirrus Logic, Inc.*		6,404		233,170
Fairchild Semiconductor International, Inc. — Class A*		11,470		229,400
Himax Technologies, Inc. ADR		20,145		226,430
MKS Instruments, Inc.		5,822		219,198
Silicon Laboratories, Inc.*		4,696		211,132
Intersil Corp. — Class A		14,805		197,943
Ambarella, Inc.*		4,295		191,987
Rambus, Inc.*		13,733		188,829
Tessera Technologies, Inc.		6,008		186,248
Inphi Corp.*		5,530		184,370
Semtech Corp.*		8,219		180,736
Power Integrations, Inc.		3,639		180,713
MaxLinear, Inc. — Class A*		8,760		162,060
Veeco Instruments, Inc.*		6,906		134,529
Total Semiconductors				20,493,735
Energy-Alternate Sources - 5.5%
First Solar, Inc.*		5,579		381,994
Canadian Solar, Inc.*		11,814		227,774
SolarEdge Technologies, Inc.*		8,220		206,651
Trina Solar Ltd. ADR*		19,846		197,269
JinkoSolar Holding Company Ltd. ADR*		8,869		185,451
Total Energy-Alternate Sources				1,199,139
Electrical Components & Equipment - 1.1%
SunPower Corp. — Class A*		11,006		245,874
Total Common Stocks
(Cost $16,772,134)				21,938,748

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.6%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	128,157		128,157
Total Repurchase Agreement
(Cost $128,157)				128,157
Total Investments - 100.5%
(Cost $16,900,291)			$	22,066,905
Other Assets & Liabilities, net - (0.5)%				(111,665	)
Total Net Assets - 100.0%			$	21,955,240

*	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 Sector Classification in Other Information section.

46 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
ELECTRONICS FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	21,938,748	$	—	$	—	$	21,938,748
Repurchase Agreement		—		128,157		—		128,157
Total	$	21,938,748	$	128,157	$	—	$	22,066,905

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 47

ELECTRONICS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $16,772,134)	$	21,938,748
Repurchase agreements, at value (cost $128,157)		128,157
Total investments (cost $16,900,291)		22,066,905
Cash		4,140
Receivables:
Fund shares sold		9,860
Dividends		8,739
Total assets		22,089,644
Liabilities:
Payable for:
Fund shares redeemed		100,504
Management fees		17,983
Transfer agent and administrative fees		5,289
Distribution and service fees		3,445
Portfolio accounting fees		2,116
Miscellaneous		5,067
Total liabilities		134,404
Commitments and contingent liabilities (Note 10)		—
Net assets	$	21,955,240
Net assets consist of:
Paid in capital	$	32,692,376
Undistributed net investment income		—
Accumulated net realized loss on investments		(15,903,750	)
Net unrealized appreciation on investments		5,166,614
Net assets	$	21,955,240
Investor Class:
Net assets	$	8,216,949
Capital shares outstanding		101,153
Net asset value per share	$	81.23
A-Class:
Net assets	$	1,762,302
Capital shares outstanding		23,113
Net asset value per share	$	76.25
Maximum offering price per share (Net asset value divided by 95.25%)	$	80.05
C-Class:
Net assets	$	719,446
Capital shares outstanding		10,275
Net asset value per share	$	70.02
H-Class:
Net assets	$	11,256,543
Capital shares outstanding		151,458
Net asset value per share	$	74.32

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $10,534)	$	336,222
Income from securities lending, net		7,255
Interest		87
Total investment income		343,564
Expenses:
Management fees		215,311
Transfer agent and administrative fees		63,327
Distribution and service fees:
A-Class		3,693
C-Class		11,847
H-Class**		36,758
Portfolio accounting fees		25,330
Custodian fees		2,946
Trustees’ fees*		1,735
Line of credit fees		97
Miscellaneous		30,992
Total expenses		392,036
Net investment income		(48,472	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(613,224	)
Net realized loss		(613,224	)
Net change in unrealized appreciation (depreciation) on:
Investments		(2,220,822	)
Net change in unrealized appreciation (depreciation)		(2,220,822	)
Net realized and unrealized loss		(2,834,046	)
Net decrease in net assets resulting from operations	$	(2,882,518	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

48 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

ELECTRONICS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	(48,472	)	$	54,827
Net realized loss on investments		(613,224	)		(4,156,771	)
Net change in unrealized appreciation (depreciation) on investments		(2,220,822	)		4,425,744
Net increase (decrease) in net assets resulting from operations		(2,882,518	)		323,800
Distributions to shareholders from:
Net investment income
Investor Class		(18,251	)		—
A-Class		(3,858	)		—
C-Class		(1,389	)		—
H-Class*		(18,915	)		—
Total distributions to shareholders		(42,413	)		—
Capital share transactions:
Proceeds from sale of shares
Investor Class		83,406,696			149,252,908
A-Class		14,991,695			15,359,168
C-Class		13,427,149			18,220,155
H-Class*		136,348,968			34,345,705
Distributions reinvested
Investor Class		16,547			—
A-Class		925			—
C-Class		1,387			—
H-Class*		18,915			—
Cost of shares redeemed
Investor Class		(91,725,809	)		(140,624,704	)
A-Class		(14,864,321	)		(18,830,964	)
C-Class		(13,783,514	)		(18,183,162	)
H-Class*		(130,346,155	)		(32,080,298	)
Net increase (decrease) from capital share transactions		(2,507,517	)		7,458,808
Net increase (decrease) in net assets		(5,432,448	)		7,782,608
Net assets:
Beginning of year		27,387,688			19,605,080
End of year	$	21,955,240		$	27,387,688
Undistributed net investment income at end of year	$	—		$	42,413
Capital share activity:
Shares sold
Investor Class		1,040,573			1,964,674
A-Class		198,666			217,511
C-Class		195,375			277,943
H-Class*		1,832,769			497,436
Shares issued from reinvestment of distributions
Investor Class		213			—
A-Class		13			—
C-Class		21			—
H-Class*		266			—
Shares redeemed
Investor Class		(1,156,806	)		(1,885,797	)
A-Class		(196,930	)		(277,054	)
C-Class		(202,714	)		(277,335	)
H-Class*		(1,763,553	)		(471,009	)
Net increase (decrease) in shares		(52,107	)		46,369

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 49

ELECTRONICS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	83.54		$	69.82		$	52.11		$	55.09		$	60.57
Income (loss) from investment operations:
Net investment income (loss)a		.02			.29			(.04	)		.22			(.12	)
Net gain (loss) on investments (realized and unrealized)		(2.20	)		13.43			17.79			(3.20	)		(5.36	)
Total from investment operations		(2.18	)		13.72			17.75			(2.98	)		(5.48	)
Less distributions from:
Net investment income		(.13	)		—			(.04	)		—			—
Total distributions		(.13	)		—			(.04	)		—			—
Net asset value, end of period	$	81.23		$	83.54		$	69.82		$	52.11		$	55.09
Total Returnb		(2.61	%)		19.65	%		34.07	%		(5.41	%)		(9.05	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,217		$	18,144		$	9,655		$	2,942		$	5,453
Ratios to average net assets:
Net investment income (loss)		0.02	%		0.38	%		(0.07	%)		0.45	%		(0.22	%)
Total expenses		1.34	%		1.35	%		1.37	%		1.35	%		1.35	%
Portfolio turnover rate		769	%		562	%		1,436	%		1,640	%		1,329	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	78.62		$	65.87		$	49.29		$	52.23		$	57.59
Income (loss) from investment operations:
Net investment income (loss)a		(.20	)		(.17	)		(.33	)		.24			(.19	)
Net gain (loss) on investments (realized and unrealized)		(2.04	)		12.92			16.95			(3.18	)		(5.17	)
Total from investment operations		(2.24	)		12.75			16.62			(2.94	)		(5.36	)
Less distributions from:
Net investment income		(.13	)		—			(.04	)		—			—
Total distributions		(.13	)		—			(.04	)		—			—
Net asset value, end of period	$	76.25		$	78.62		$	65.87		$	49.29		$	52.23
Total Returnb		(2.84	%)		19.36	%		33.72	%		(5.63	%)		(9.31	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,762		$	1,680		$	5,329		$	299		$	659
Ratios to average net assets:
Net investment income (loss)		(0.26	%)		(0.24	%)		(0.59	%)		0.51	%		(0.36	%)
Total expenses		1.60	%		1.61	%		1.62	%		1.60	%		1.62	%
Portfolio turnover rate		769	%		562	%		1,436	%		1,640	%		1,329	%

50 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

ELECTRONICS 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	72.76		$	61.40		$	46.32		$	49.50		$	55.03
Income (loss) from investment operations:
Net investment income (loss)a		(.63	)		(.35	)		(.54	)		(.18	)		(.70	)
Net gain (loss) on investments (realized and unrealized)		(1.98	)		11.71			15.66			(3.00	)		(4.83	)
Total from investment operations		(2.61	)		11.36			15.12			(3.18	)		(5.53	)
Less distributions from:
Net investment income		(.13	)		—			(.04	)		—			—
Total distributions		(.13	)		—			(.04	)		—			—
Net asset value, end of period	$	70.02		$	72.76		$	61.40		$	46.32		$	49.50
Total Returnb		(3.58	%)		18.50	%		32.65	%		(6.44	%)		(10.01	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	719		$	1,280		$	1,043		$	667		$	263
Ratios to average net assets:
Net investment income (loss)		(0.91	%)		(0.55	%)		(1.03	%)		(0.41	%)		(1.42	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.36	%
Portfolio turnover rate		769	%		562	%		1,436	%		1,640	%		1,329	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	76.66		$	64.40		$	48.33		$	51.40		$	56.77
Income (loss) from investment operations:
Net investment income (loss)a		(.30	)		.06			(.17	)		(.12	)		(.34	)
Net gain (loss) on investments (realized and unrealized)		(1.91	)		12.20			16.28			(2.95	)		(5.03	)
Total from investment operations		(2.21	)		12.26			16.11			(3.07	)		(5.37	)
Less distributions from:
Net investment income		(.13	)		—			(.04	)		—			—
Total distributions		(.13	)		—			(.04	)		—			—
Net asset value, end of period	$	74.32		$	76.66		$	64.40		$	48.33		$	51.40
Total Returnb		(2.88	%)		19.04	%		33.34	%		(5.97	%)		(9.46	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,257		$	6,285		$	3,577		$	1,288		$	1,271
Ratios to average net assets:
Net investment income (loss)		(0.40	%)		0.09	%		(0.29	%)		(0.26	%)		(0.67	%)
Total expenses		1.74	%		1.85	%		1.87	%		1.85	%		1.86	%
Portfolio turnover rate		769	%		562	%		1,436	%		1,640	%		1,329	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 51

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Energy Fund Investor Class returned -27.30%, compared with -15.54% for the S&P 500 Energy Index. The broader S&P 500 Index returned 1.78%.

The integrated oil & gas industry was the only contributor to return. The coal & consumable fuels industry detracted least. The oil & gas exploration & production industry was the largest detractor from return, followed by the oil & gas storage & transportation industry.

Exxon Mobil Corp., Chevron Corp., and Cameron International Corp. were among the most significant positive contributors to Fund performance for the period. Holdings detracting the most from performance were Williams Companies, Inc., Anadarko Petroleum Corp., and Kinder Morgan, Inc.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 19, 2001
H-Class*	May 5, 1998

Ten Largest Holdings (% of Total Net Assets)
Exxon Mobil Corp.	6.7%
Chevron Corp.	4.7%
Schlumberger Ltd.	3.4%
Occidental Petroleum Corp.	2.5%
Phillips 66	2.4%
ConocoPhillips	2.4%
EOG Resources, Inc.	2.2%
Kinder Morgan, Inc.	2.2%
Valero Energy Corp.	2.0%
Halliburton Co.	1.9%
Top Ten Total	30.4%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

52 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-27.30%	-9.61%	-1.27%
A-Class Shares	-27.46%	-9.83%	-1.51%
A-Class Shares with sales charge†	-30.89%	-10.70%	-1.99%
C-Class Shares	-28.01%	-10.51%	-2.25%
C-Class Shares with CDSC‡	-28.71%	-10.51%	-2.25%
H-Class Shares**	-27.53%	-10.02%	-1.74%
S&P 500 Energy Index	-15.54%	-2.36%	3.55%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Energy Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 53

SCHEDULE OF INVESTMENTS	March 31, 2016
ENERGY FUND

	Shares		Value
COMMON STOCKS† - 99.8%
Oil & Gas – 71.1%
Exxon Mobil Corp.		28,253	$	2,361,585
Chevron Corp.		17,615		1,680,470
Occidental Petroleum Corp.		13,102		896,569
Phillips 66		9,795		848,149
ConocoPhillips		20,901		841,683
EOG Resources, Inc.		10,659		773,630
Valero Energy Corp.		11,030		707,464
Pioneer Natural Resources Co.		4,224		594,486
Anadarko Petroleum Corp.		12,723		592,510
Marathon Petroleum Corp.		15,038		559,113
Apache Corp.		10,810		527,636
Hess Corp.		9,579		504,334
Devon Energy Corp.		16,615		455,916
Concho Resources, Inc.*		4,433		447,910
Noble Energy, Inc.		14,117		443,415
Equities Corp.		6,257		420,846
Cabot Oil & Gas Corp. — Class A		18,100		411,051
Continental Resources, Inc.*		13,359		405,579
Tesoro Corp.		4,702		404,419
Marathon Oil Corp.		34,565		385,054
Cimarex Energy Co.		3,920		381,298
BP plc ADR		11,803		356,215
Royal Dutch Shell plc — Class A ADR		7,120		344,964
Cheniere Energy, Inc.*		10,002		338,368
Antero Resources Corp.*		13,452		334,551
HollyFrontier Corp.		8,947		316,008
Canadian Natural Resources Ltd.		11,646		314,442
Newfield Exploration Co.*		9,437		313,780
Helmerich & Payne, Inc.		5,221		306,577
Suncor Energy, Inc.		11,011		306,216
Diamondback Energy, Inc.*		3,962		305,787
Range Resources Corp.		8,851		286,595
Petroleo Brasileiro S.A. ADR*		47,808		279,199
Murphy Oil Corp.		10,335		260,339
Ensco plc — Class A		24,536		254,438
Transocean Ltd.		27,486		251,222
Parsley Energy, Inc. — Class A*		10,996		248,510
Encana Corp.		39,254		239,057
Energen Corp.		6,432		235,347
PBF Energy, Inc. — Class A		7,078		234,990
Noble Corporation plc		22,493		232,803
Gulfport Energy Corp.*		8,018		227,230
QEP Resources, Inc.		15,844		223,559
PDC Energy, Inc.*		3,697		219,787
Statoil ASA ADR		13,800		214,728
Southwestern Energy Co.*		26,545		214,218
RSP Permian, Inc.*		7,319		212,544
Western Refining, Inc.		7,156		208,168
Diamond Offshore Drilling, Inc.		9,293		201,937
Patterson-UTI Energy, Inc.		11,352		200,022
CNOOC Ltd. ADR		1,680		196,661
Nabors Industries Ltd.		21,239		195,399
YPF S.A. ADR		10,808		193,247
Cenovus Energy, Inc.		14,710		191,230
Chesapeake Energy Corp.		44,598		183,744
WPX Energy, Inc.*		25,653		179,314
Rice Energy, Inc.*		12,831		179,121
Rowan Companies plc — Class A		10,969		176,601
Memorial Resource Development Corp.*		16,990		172,958
Carrizo Oil & Gas, Inc.*		5,204		160,908
Matador Resources Co.*		8,454		160,288
Laredo Petroleum, Inc.*		19,034		150,940
Whiting Petroleum Corp.*		18,011		143,728
SM Energy Co.		7,247		135,809
Oasis Petroleum, Inc.*		17,552		127,779
Cobalt International Energy, Inc.*		43,022		127,775
Delek US Holdings, Inc.		8,131		123,916
Atwood Oceanics, Inc.		10,026		91,938
Ultra Petroleum Corp.*		23,445		11,676
Total Oil & Gas				25,227,750
Oil & Gas Services - 15.4%
Schlumberger Ltd.		16,469		1,214,590
Halliburton Co.		19,303		689,503
Baker Hughes, Inc.		12,046		527,976
Cameron International Corp.*		6,772		454,063
National Oilwell Varco, Inc.		13,303		413,723
FMC Technologies, Inc.*		11,442		313,053
Weatherford International plc*		36,416		283,316
Targa Resources Corp.		8,980		268,143
Core Laboratories N.V.		2,209		248,314
RPC, Inc.		16,090		228,156
Oceaneering International, Inc.		6,540		217,390
Dril-Quip, Inc.*		3,210		194,398
Superior Energy Services, Inc.		12,742		170,615
Oil States International, Inc.*		4,906		154,637
Bristow Group, Inc.		5,110		96,681
Total Oil & Gas Services				5,474,558
Pipelines - 9.3%
Kinder Morgan, Inc.		43,190		771,374
Spectra Energy Corp.		18,478		565,428
Columbia Pipeline Group, Inc.		16,529		414,878
Williams Companies, Inc.		25,104		403,421
ONEOK, Inc.		10,227		305,378
Plains GP Holdings, LP — Class A		31,075		270,042
Enbridge, Inc.		6,017		234,121
TransCanada Corp.		5,908		232,243
SemGroup Corp. — Class A		4,956		111,014
Total Pipelines				3,307,899

54 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
ENERGY FUND

	Shares		Value
Transportation - 1.0%
Golar LNG Ltd.		9,819	$	176,448
Teekay Corp.		18,720		162,115
Total Transportation				338,563
Mining - 0.9%
Cameco Corp.		14,322		183,895
US Silica Holdings, Inc.		5,896		133,957
Total Mining				317,852
Retail - 0.7%
World Fuel Services Corp.		4,873		236,730
Metal Fabricate & Hardware - 0.6%
Tenaris S.A. ADR		9,045		223,954
Coal - 0.6%
CONSOL Energy, Inc.		17,509		197,677
Energy-Alternate Sources - 0.2%
Green Plains, Inc.		4,900		78,204
Total Common Stocks
(Cost $23,142,194)				35,403,187

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.2%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	84,494		84,494
Total Repurchase Agreement
(Cost $84,494)				84,494
Total Investments - 100.0%
(Cost $23,226,688)			$	35,487,681
Other Assets & Liabilities, net - 0.0%				(4,033	)
Total Net Assets - 100.0%			$	35,483,648

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	35,403,187	$	—	$	—	$	35,403,187
Repurchase Agreement		—		84,494		—		84,494
Total	$	35,403,187	$	84,494	$	—	$	35,487,681

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 55

ENERGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $23,142,194)	$	35,403,187
Repurchase agreements, at value (cost $84,494)		84,494
Total investments (cost $23,226,688)		35,487,681
Cash		2,281
Receivables:
Fund shares sold		126,013
Dividends		20,587
Securities sold		1,242
Total assets		35,637,804
Liabilities:
Payable for:
Fund shares redeemed		108,604
Management fees		23,526
Transfer agent and administrative fees		6,920
Distribution and service fees		5,067
Portfolio accounting fees		2,768
Miscellaneous		7,271
Total liabilities		154,156
Commitments and contingent liabilities (Note 10)		—
Net assets	$	35,483,648
Net assets consist of:
Paid in capital	$	48,354,055
Undistributed net investment income		476,798
Accumulated net realized loss on investments		(25,608,198	)
Net unrealized appreciation on investments		12,260,993
Net assets	$	35,483,648
Investor Class:
Net assets	$	22,216,397
Capital shares outstanding		1,334,172
Net asset value per share	$	16.65
A-Class:
Net assets	$	6,273,841
Capital shares outstanding		400,449
Net asset value per share	$	15.67
Maximum offering price per share (Net asset value divided by 95.25%)	$	16.45
C-Class:
Net assets	$	4,198,192
Capital shares outstanding		296,979
Net asset value per share	$	14.14
H-Class:
Net assets	$	2,795,218
Capital shares outstanding		183,601
Net asset value per share	$	15.22

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $10,324)	$	1,096,822
Income from securities lending, net		48,130
Interest		149
Total investment income		1,145,101
Expenses:
Management fees		370,264
Transfer agent and administrative fees		108,901
Distribution and service fees:
A-Class		12,532
C-Class		54,081
H-Class**		16,088
Portfolio accounting fees		43,560
Custodian fees		5,047
Trustees’ fees*		2,923
Tax expense		1,112
Line of credit fees		132
Miscellaneous		53,663
Total expenses		668,303
Net investment income		476,798
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(15,081,328	)
Net realized loss		(15,081,328	)
Net change in unrealized appreciation (depreciation) on:
Investments		(4,158,406	)
Net change in unrealized appreciation (depreciation)		(4,158,406	)
Net realized and unrealized loss		19,239,734
Net decrease in net assets resulting from operations	$	(18,762,936	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

56 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

ENERGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	476,798		$	333,207
Net realized loss on investments		(15,081,328	)		(139,801	)
Net change in unrealized appreciation (depreciation) on investments		(4,158,406	)		(9,779,125	)
Net decrease in net assets resulting from operations		(18,762,936	)		(9,585,719	)
Distributions to shareholders from:
Net investment income
Investor Class		(242,198	)		(122,605	)
A-Class		(32,840	)		(21,643	)
C-Class		(41,958	)		(37,292	)
H-Class*		(17,380	)		(19,193	)
Net realized gains
Investor Class		(267,745	)		—
A-Class		(36,304	)		—
C-Class		(46,384	)		—
H-Class*		(19,214	)		—
Total distributions to shareholders		(704,023	)		(200,733	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		150,597,823			261,136,749
A-Class		36,665,768			24,712,863
C-Class		10,483,191			24,858,323
H-Class*		121,269,635			75,602,721
Distributions reinvested
Investor Class		504,502			119,147
A-Class		63,735			16,607
C-Class		86,557			35,962
H-Class*		36,578			18,825
Cost of shares redeemed
Investor Class		(144,378,187	)		(263,698,107	)
A-Class		(32,806,713	)		(25,606,281	)
C-Class		(11,203,791	)		(24,487,521	)
H-Class*		(122,368,423	)		(72,212,828	)
Net increase from capital share transactions		8,950,675			496,460
Net decrease in net assets		(10,516,284	)		(9,289,992	)
Net assets:
Beginning of year		45,999,932			55,289,924
End of year	$	35,483,648		$	45,999,932
Undistributed net investment income at end of year	$	476,798		$	334,376

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 57

ENERGY FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
Investor Class		7,239,918			8,974,883
A-Class		1,944,398			986,870
C-Class		605,861			1,026,731
H-Class*		7,088,847			2,974,818
Shares issued from reinvestment of distributions
Investor Class		26,749			4,447
A-Class		3,591			657
C-Class		5,390			1,548
H-Class*		2,120			764
Shares redeemed
Investor Class		(7,142,385	)		(8,966,417	)
A-Class		(1,760,415	)		(1,010,592	)
C-Class		(652,252	)		(1,014,166	)
H-Class*		(7,209,725	)		(2,847,072	)
Net increase in shares		152,097			132,471

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

58 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

ENERGY 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.24		$	29.70		$	26.12		$	24.58		$	28.70
Income (loss) from investment operations:
Net investment income (loss)a		.28			.21			.15			.12			.07
Net gain (loss) on investments (realized and unrealized)		(6.59	)		(6.56	)		3.43			1.89			(4.19	)
Total from investment operations		(6.31	)		(6.35	)		3.58			2.01			(4.12	)
Less distributions from:
Net investment income		(.13	)		(.11	)		—			(.07	)		—
Net realized gains		(.15	)		—			—			—			—
Return of capital		—			—			—			(.40	)		—
Total distributions		(.28	)		(.11	)		—			(.47	)		—
Net asset value, end of period	$	16.65		$	23.24		$	29.70		$	26.12		$	24.58
Total Returnb		(27.30	%)		(21.42	%)		13.71	%		8.50	%		(14.39	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	22,216		$	28,123		$	35,546		$	49,160		$	40,947
Ratios to average net assets:
Net investment income (loss)		1.38	%		0.72	%		0.55	%		0.52	%		0.27	%
Total expenses		1.35	%		1.35	%		1.37	%		1.35	%		1.36	%
Portfolio turnover rate		595	%		463	%		231	%		248	%		288	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	21.94		$	28.07		$	24.76		$	23.38		$	27.40
Income (loss) from investment operations:
Net investment income (loss)a		.19			.12			.08			.08			(.01	)
Net gain (loss) on investments (realized and unrealized)		(6.18	)		(6.14	)		3.23			1.77			(4.01	)
Total from investment operations		(5.99	)		(6.02	)		3.31			1.85			(4.02	)
Less distributions from:
Net investment income		(.13	)		(.11	)		—			(.07	)		—
Net realized gains		(.15	)		—			—			—			—
Return of capital		—			—			—			(.40	)		—
Total distributions		(.28	)		(.11	)		—			(.47	)		—
Net asset value, end of period	$	15.67		$	21.94		$	28.07		$	24.76		$	23.38
Total Returnb		(27.46	%)		(21.49	%)		13.37	%		8.20	%		(14.67	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,274		$	4,671		$	6,624		$	5,586		$	5,622
Ratios to average net assets:
Net investment income (loss)		1.02	%		0.43	%		0.30	%		0.38	%		(0.05	%)
Total expenses		1.60	%		1.60	%		1.62	%		1.60	%		1.61	%
Portfolio turnover rate		595	%		463	%		231	%		248	%		288	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 59

ENERGY 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	19.98		$	25.80		$	22.93		$	21.85		$	25.78
Income (loss) from investment operations:
Net investment income (loss)a		.02			(.05	)		(.12	)		(.09	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		(5.58	)		(5.66	)		2.99			1.64			(3.74	)
Total from investment operations		(5.56	)		(5.71	)		2.87			1.55			(3.93	)
Less distributions from:
Net investment income		(.13	)		(.11	)		—			(.07	)		—
Net realized gains		(.15	)		—			—			—			—
Return of capital		—			—			—			(.40	)		—
Total distributions		(.28	)		(.11	)		—			(.47	)		—
Net asset value, end of period	$	14.14		$	19.98		$	25.80		$	22.93		$	21.85
Total Returnb		(28.01	%)		(22.18	%)		12.52	%		7.40	%		(15.24	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,198		$	6,754		$	8,357		$	9,693		$	13,153
Ratios to average net assets:
Net investment income (loss)		0.15	%		(0.20	%)		(0.52	%)		(0.45	%)		(0.84	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.36	%
Portfolio turnover rate		595	%		463	%		231	%		248	%		288	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	21.34		$	27.40		$	24.23		$	22.95		$	26.93
Income (loss) from investment operations:
Net investment income (loss)a		.10			.07			(.02	)		.01			(.08	)
Net gain (loss) on investments (realized and unrealized)		(5.94	)		(6.02	)		3.19			1.74			(3.90	)
Total from investment operations		(5.84	)		(5.95	)		3.17			1.75			(3.98	)
Less distributions from:
Net investment income		(.13	)		(.11	)		—			(.07	)		—
Net realized gains		(.15	)		—			—			—			—
Return of capital		—			—			—			(.40	)		—
Total distributions		(.28	)		(.11	)		—			(.47	)		—
Net asset value, end of period	$	15.22		$	21.34		$	27.40		$	24.23		$	22.95
Total Returnb		(27.53	%)		(21.76	%)		13.08	%		7.92	%		(14.78	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,795		$	6,452		$	4,764		$	5,272		$	11,080
Ratios to average net assets:
Net investment income (loss)		0.55	%		0.27	%		(0.09	%)		0.06	%		(0.33	%)
Total expenses		1.70	%		1.85	%		1.87	%		1.85	%		1.86	%
Portfolio turnover rate		595	%		463	%		231	%		248	%		288	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

60 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Energy Services Fund Investor Class returned -27.05%, compared with the S&P 500 Energy Index, which returned -15.54%. The broader S&P 500 Index returned 1.78%.

The Fund is composed of two industries and both detracted from return for the period. The oil & gas equipment & services industry detracted the most from return, followed by the oil & gas drilling industry.

Cameron International Corp., RPC, Inc., and Patterson-UTI Energy, Inc. were the Fund’s best-performing holdings for the period. The Fund’s worst-performing holdings included Baker Hughes, Inc., Ensco plc — Class A, and Seadrill Ltd.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	March 30, 2001
H-Class*	April 2, 1998

Ten Largest Holdings (% of Total Net Assets)
Schlumberger Ltd.	14.9%
Halliburton Co.	8.5%
Baker Hughes, Inc.	6.5%
Cameron International Corp.	5.6%
National Oilwell Varco, Inc.	5.1%
FMC Technologies, Inc.	3.8%
Helmerich & Payne, Inc.	3.8%
Weatherford International plc	2.8%
RPC, Inc.	2.8%
Oceaneering International, Inc.	2.7%
Top Ten Total	56.5%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 61

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

 

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-27.05%	-14.45%	-4.40%
A-Class Shares	-27.22%	-14.66%	-4.64%
A-Class Shares with sales charge†	-30.67%	-15.49%	-5.10%
C-Class Shares	-27.76%	-15.30%	-5.35%
C-Class Shares with CDSC‡	-28.48%	-15.30%	-5.35%
H-Class Shares**	-27.31%	-14.87%	-4.87%
S&P 500 Energy Index	-15.54%	-2.36%	3.55%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Energy Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

62 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
ENERGY SERVICES FUND

	Shares		Value
COMMON STOCKS† - 99.9%
Oil & Gas Services - 69.2%
Schlumberger Ltd.		33,599	$	2,477,925
Halliburton Co.		39,380		1,406,654
Baker Hughes, Inc.		24,566		1,076,728
Cameron International Corp.*		13,854		928,911
National Oilwell Varco, Inc.		27,130		843,743
FMC Technologies, Inc.*		23,350		638,856
Weatherford International plc*		60,567		471,211
RPC, Inc.		32,836		465,614
Oceaneering International, Inc.		13,383		444,851
Dril-Quip, Inc.*		6,419		388,735
Core Laboratories N.V.		3,370		378,822
Superior Energy Services, Inc.		26,000		348,140
Oil States International, Inc.*		10,031		316,177
Forum Energy Technologies, Inc.*		20,781		274,309
SEACOR Holdings, Inc.*		4,562		248,401
McDermott International, Inc.*		57,229		234,067
Frank’s International N.V.		13,161		216,893
Bristow Group, Inc.		10,722		202,860
CARBO Ceramics, Inc.		9,069		128,780
Total Oil & Gas Services				11,491,677
Oil & Gas - 25.3%
Helmerich & Payne, Inc.		10,675		626,836
Transocean Ltd.		48,403		442,403
Ensco plc — Class A		40,761		422,692
Nabors Industries Ltd.		45,016		414,147
Diamond Offshore Drilling, Inc.		18,955		411,892
Patterson-UTI Energy, Inc.		23,155		407,991
Noble Corporation plc		36,627		379,089
Rowan Companies plc — Class A		22,384		360,382
Seadrill Ltd.*		62,092		204,904
Atwood Oceanics, Inc.		20,459		187,609
Precision Drilling Corp.		43,708		183,574
Unit Corp.*		17,619		155,223
Total Oil & Gas				4,196,742
Metal Fabricate & Hardware - 2.0%
Tenaris S.A. ADR		13,286		328,962
Transportation - 1.8%
Hornbeck Offshore Services, Inc.*		15,177		150,707
Tidewater, Inc.		21,037		143,683
Total Transportation				294,390
Mining - 1.6%
U.S. Silica Holdings, Inc.		12,055		273,890
Total Common Stocks
(Cost $9,173,452)				16,585,661

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.8%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	142,541		142,541
Total Repurchase Agreement
(Cost $142,541)				142,541
Total Investments - 100.7%
(Cost $9,315,993)			$	16,728,202
Other Assets & Liabilities, net - (0.7)%				(114,577	)
Total Net Assets - 100.0%			$	16,613,625

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	16,585,661	$	—	$	—	$	16,585,661
Repurchase Agreement		—		142,541		—		142,541
Total	$	16,585,661	$	142,541	$	—	$	16,728,202

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 63

ENERGY SERVICES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $9,173,452)	$	16,585,661
Repurchase agreements, at value (cost $142,541)		142,541
Total investments (cost $9,315,993)		16,728,202
Cash		2,622
Receivables:
Securities sold		1,337,054
Fund shares sold		67,295
Dividends		16,435
Total assets		18,151,608
Liabilities:
Payable for:
Fund shares redeemed		1,514,987
Management fees		11,521
Transfer agent and administrative fees		3,388
Distribution and service fees		3,132
Portfolio accounting fees		1,355
Miscellaneous		3,600
Total liabilities		1,537,983
Commitments and contingent liabilities (Note 10)		—
Net assets	$	16,613,625
Net assets consist of:
Paid in capital	$	47,797,857
Undistributed net investment income		125,275
Accumulated net realized loss on investments		(38,721,716	)
Net unrealized appreciation on investments		7,412,209
Net assets	$	16,613,625
Investor Class:
Net assets	$	9,520,520
Capital shares outstanding		335,116
Net asset value per share	$	28.41
A-Class:
Net assets	$	2,849,256
Capital shares outstanding		106,088
Net asset value per share	$	26.86
Maximum offering price per share (Net asset value divided by 95.25%)	$	28.20
C-Class:
Net assets	$	2,543,699
Capital shares outstanding		104,010
Net asset value per share	$	24.46
H-Class:
Net assets	$	1,700,150
Capital shares outstanding		65,221
Net asset value per share	$	26.07

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $3,657)	$	406,775
Income from securities lending, net		63,989
Interest		78
Total investment income		470,842
Expenses:
Management fees		187,201
Transfer agent and administrative fees		55,059
Distribution and service fees:
A-Class		7,042
C-Class		31,982
H-Class**		11,003
Portfolio accounting fees		22,024
Registration fees		17,315
Custodian fees		2,553
Trustees’ fees*		1,702
Line of credit fees		297
Miscellaneous		9,389
Total expenses		345,567
Net investment income		125,275
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(4,376,432	)
Net realized loss		(4,376,432	)
Net change in unrealized appreciation (depreciation) on:
Investments		(3,821,798	)
Net change in unrealized appreciation (depreciation)		(3,821,798	)
Net realized and unrealized loss		(8,198,230	)
Net decrease in net assets resulting from operations	$	(8,072,955	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

64 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

ENERGY SERVICES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	125,275		$	237,075
Net realized loss on investments		(4,376,432	)		(5,210,662	)
Net change in unrealized appreciation (depreciation) on investments		(3,821,798	)		(14,210,065	)
Net decrease in net assets resulting from operations		(8,072,955	)		(19,183,652	)
Distributions to shareholders from:
Net investment income
Investor Class		(130,036	)		—
A-Class		(22,719	)		—
C-Class		(36,447	)		—
H-Class*		(42,281	)		—
Total distributions to shareholders		(231,483	)		—
Capital share transactions:
Proceeds from sale of shares
Investor Class		88,241,476			155,300,672
A-Class		22,986,249			18,229,626
C-Class		7,557,655			22,985,448
H-Class*		206,028,733			138,874,968
Distributions reinvested
Investor Class		126,359			—
A-Class		22,184			—
C-Class		36,117			—
H-Class*		42,273			—
Cost of shares redeemed
Investor Class		(90,245,009	)		(160,581,256	)
A-Class		(22,683,979	)		(20,303,746	)
C-Class		(7,871,938	)		(24,839,035	)
H-Class*		(204,714,157	)		(139,441,804	)
Net decrease from capital share transactions		(474,037	)		(9,775,127	)
Net decrease in net assets		(8,778,475	)		(28,958,779	)
Net assets:
Beginning of year		25,392,100			54,350,879
End of year	$	16,613,625		$	25,392,100
Undistributed net investment income at end of year	$	125,275		$	231,483
Capital share activity:
Shares sold
Investor Class		2,540,657			2,859,922
A-Class		622,276			419,738
C-Class		251,887			503,113
H-Class*		6,776,423			2,915,122
Shares issued from reinvestment of distributions
Investor Class		3,947			—
A-Class		733			—
C-Class		1,305			—
H-Class*		1,438			—
Shares redeemed
Investor Class		(2,619,654	)		(2,982,262	)
A-Class		(611,902	)		(452,109	)
C-Class		(262,624	)		(546,543	)
H-Class*		(6,762,627	)		(2,950,353	)
Net increase (decrease) in shares		(58,141	)		(233,372	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 65

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	39.36		$	62.43		$	54.43		$	50.87		$	62.66
Income (loss) from investment operations:
Net investment income (loss)a		.29			.48			.02			(.05	)		(.14	)
Net gain (loss) on investments (realized and unrealized)		(10.90	)		(23.55	)		7.98			3.61			(11.65	)
Total from investment operations		(10.61	)		(23.07	)		8.00			3.56			(11.79	)
Less distributions from:
Net investment income		(.34	)		—			—			—			—
Total distributions		(.34	)		—			—			—			—
Net asset value, end of period	$	28.41		$	39.36		$	62.43		$	54.43		$	50.87
Total Returnb		(27.05	%)		(36.95	%)		14.70	%		7.00	%		(18.82	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,521		$	16,144		$	33,244		$	26,097		$	34,353
Ratios to average net assets:
Net investment income (loss)		0.83	%		0.86	%		0.03	%		(0.10	%)		(0.25	%)
Total expenses		1.35	%		1.36	%		1.37	%		1.35	%		1.36	%
Portfolio turnover rate		1,241	%		494	%		350	%		275	%		162	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	37.32		$	59.34		$	51.86		$	48.59		$	60.01
Income (loss) from investment operations:
Net investment income (loss)a		.24			.25			(.13	)		(.17	)		(.25	)
Net gain (loss) on investments (realized and unrealized)		(10.36	)		(22.27	)		7.61			3.44			(11.17	)
Total from investment operations		(10.12	)		(22.02	)		7.48			3.27			(11.42	)
Less distributions from:
Net investment income		(.34	)		—			—			—			—
Total distributions		(.34	)		—			—			—			—
Net asset value, end of period	$	26.86		$	37.32		$	59.34		$	51.86		$	48.59
Total Returnb		(27.22	%)		(37.11	%)		14.42	%		6.73	%		(19.03	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,849		$	3,545		$	7,557		$	5,535		$	7,115
Ratios to average net assets:
Net investment income (loss)		0.73	%		0.47	%		(0.23	%)		(0.37	%)		(0.47	%)
Total expenses		1.59	%		1.60	%		1.62	%		1.60	%		1.61	%
Portfolio turnover rate		1,241	%		494	%		350	%		275	%		162	%

66 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	34.28		$	54.92		$	48.37		$	45.66		$	56.81
Income (loss) from investment operations:
Net investment income (loss)a		(.05	)		(.12	)		(.50	)		(.49	)		(.54	)
Net gain (loss) on investments (realized and unrealized)		(9.43	)		(20.52	)		7.05			3.20			(10.61	)
Total from investment operations		(9.48	)		(20.64	)		6.55			2.71			(11.15	)
Less distributions from:
Net investment income		(.34	)		—			—			—			—
Total distributions		(.34	)		—			—			—			—
Net asset value, end of period	$	24.46		$	34.28		$	54.92		$	48.37		$	45.66
Total Returnb		(27.76	%)		(37.58	%)		13.54	%		5.94	%		(19.63	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,544		$	3,889		$	8,616		$	8,654		$	10,144
Ratios to average net assets:
Net investment income (loss)		(0.16	%)		(0.24	%)		(0.97	%)		(1.11	%)		(1.13	%)
Total expenses		2.35	%		2.36	%		2.37	%		2.35	%		2.36	%
Portfolio turnover rate		1,241	%		494	%		350	%		275	%		162	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	36.29		$	57.89		$	50.72		$	47.64		$	58.97
Income (loss) from investment operations:
Net investment income (loss)a		.05			.07			(.27	)		(.25	)		(.34	)
Net gain (loss) on investments (realized and unrealized)		(9.93	)		(21.67	)		7.44			3.33			(10.99	)
Total from investment operations		(9.88	)		(21.60	)		7.17			3.08			(11.33	)
Less distributions from:
Net investment income		(.34	)		—			—			—			—
Total distributions		(.34	)		—			—			—			—
Net asset value, end of period	$	26.07		$	36.29		$	57.89		$	50.72		$	47.64
Total Returnb		(27.31	%)		(37.33	%)		14.14	%		6.47	%		(19.21	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,700		$	1,814		$	4,933		$	9,685		$	8,025
Ratios to average net assets:
Net investment income (loss)		0.15	%		0.13	%		(0.50	%)		(0.54	%)		(0.66	%)
Total expenses		1.67	%		1.86	%		1.87	%		1.85	%		1.86	%
Portfolio turnover rate		1,241	%		494	%		350	%		275	%		162	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 67

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

FINANCIAL SERVICES FUND

OBJECTIVE: Seeks to provide capital appreciation by investing in companies involved in the financial services sector (“Financial Services Companies”).

For the one-year period ended March 31, 2016, Financial Services Fund Investor Class returned -5.95%, while the S&P 500 Financials Index returned -4.55% over the same period. The broader S&P 500 Index returned 1.78%.

The real estate investment trusts (“REITs”) industry was the largest contributor to return, followed by the insurance industry. The capital markets industry was the largest detractor from return, followed by the banks industry.

Public Storage, Digital Realty Trust, Inc., and Simon Property Group, Inc. were the best-performing holdings in the Fund for the period. The worst-performing holdings for the period were Citigroup, Inc., Morgan Stanley, and American Express Co.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 19, 2001
H-Class*	April 6, 1998

Ten Largest Holdings (% of Total Net Assets)
Berkshire Hathaway, Inc. — Class B	2.3%
JPMorgan Chase & Co.	1.8%
Wells Fargo & Co.	1.8%
Bank of America Corp.	1.5%
Citigroup, Inc.	1.3%
Goldman Sachs Group, Inc.	1.1%
Simon Property Group, Inc.	1.1%
U.S. Bancorp	1.0%
BlackRock, Inc. — Class A	1.0%
American International Group, Inc.	1.0%
Top Ten Total	13.9%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

68 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-5.95%	6.33%	-1.02%
A-Class Shares	-6.17%	6.07%	-1.26%
A-Class Shares with sales charge†	-10.63%	5.04%	-1.74%
C-Class Shares	-6.89%	5.29%	-1.98%
C-Class Shares with CDSC‡	-7.81%	5.29%	-1.98%
H-Class Shares**	-6.25%	5.85%	-1.51%
S&P 500 Financials Index	-4.55%	8.66%	-1.48%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Financials Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 69

SCHEDULE OF INVESTMENTS	March 31, 2016
FINANCIAL SERVICES FUND

	Shares			Value
COMMON STOCKS† - 99.6%
REITs - 30.5%
Simon Property Group, Inc.		1,058		$	219,736
Public Storage		693			191,150
American Tower Corp. — Class A		1,743			178,430
Crown Castle International Corp.		1,710			147,914
Equity Residential		1,906			143,008
AvalonBay Communities, Inc.		734			139,607
Welltower, Inc.		1,971			136,668
Equinix, Inc.		405	��		133,938
Ventas, Inc.		2,006			126,297
General Growth Properties, Inc.		4,186			124,450
Weyerhaeuser Co.		3,986			123,486
Prologis, Inc.		2,734			120,788
Boston Properties, Inc.		943			119,836
Vornado Realty Trust		1,220			115,205
Realty Income Corp.		1,731			108,205
Essex Property Trust, Inc.		461			107,809
Digital Realty Trust, Inc.		1,109			98,135
HCP, Inc.		2,922			95,199
Host Hotels & Resorts, Inc.		5,690			95,024
Extra Space Storage, Inc.		998			93,273
Macerich Co.		1,173			92,949
Federal Realty Investment Trust		573			89,417
UDR, Inc.		2,267			87,348
SL Green Realty Corp.		870			84,286
Kimco Realty Corp.		2,926			84,210
Annaly Capital Management, Inc.		7,651			78,499
Mid-America Apartment Communities, Inc.		734			75,022
VEREIT, Inc.		8,373			74,269
Camden Property Trust		881			74,083
Iron Mountain, Inc.		2,162			73,313
Regency Centers Corp.		968			72,455
Alexandria Real Estate Equities, Inc.		775			70,440
Omega Healthcare Investors, Inc.		1,989			70,212
Apartment Investment & Management Co. — Class A		1,678			70,174
Brixmor Property Group, Inc.		2,710			69,430
DDR Corp.		3,886			69,132
Duke Realty Corp.		3,058			68,927
WP Carey, Inc.		1,098			68,340
National Retail Properties, Inc.		1,477			68,237
American Campus Communities, Inc.		1,427			67,197
CubeSmart		1,993			66,367
American Capital Agency Corp. REIT		3,560			66,323
Equity LifeStyle Properties, Inc.		910			66,184
Lamar Advertising Co. — Class A		1,071			65,867
Kilroy Realty Corp.		1,028			63,602
Liberty Property Trust		1,801			60,261
Spirit Realty Capital, Inc.		5,326			59,918
Forest City Realty Trust, Inc. — Class A		2,838			59,853
Sovran Self Storage, Inc.		490			57,796
Highwoods Properties, Inc.		1,203			57,515
Weingarten Realty Investors		1,532			57,481
Douglas Emmett, Inc.		1,907			57,420
Starwood Property Trust, Inc.		2,945			55,749
Hospitality Properties Trust		2,092			55,564
Taubman Centers, Inc.		780			55,559
Senior Housing Properties Trust		3,067			54,869
EPR Properties		822			54,762
Equity One, Inc.		1,850			53,021
Healthcare Trust of America, Inc. — Class A		1,790			52,662
Corrections Corporation of America		1,596			51,152
STORE Capital Corp.		1,960			50,725
Equity Commonwealth*		1,780			50,232
Tanger Factory Outlet Centers, Inc.		1,365			49,672
DCT Industrial Trust, Inc.		1,256			49,574
Healthcare Realty Trust, Inc.		1,550			47,880
Rayonier, Inc.		1,919			47,361
Sunstone Hotel Investors, Inc.		3,362			47,068
Medical Properties Trust, Inc.		3,612			46,884
RLJ Lodging Trust		1,971			45,096
Two Harbors Investment Corp.		5,602			44,480
LaSalle Hotel Properties		1,753			44,368
New Residential Investment Corp. REIT		3,731			43,392
Education Realty Trust, Inc.		1,040			43,264
Brandywine Realty Trust		2,999			42,076
Corporate Office Properties Trust		1,601			42,010
NorthStar Realty Finance Corp.		3,172			41,617
Pebblebrook Hotel Trust		1,361			39,564
DiamondRock Hospitality Co.		3,841			38,871
Mack-Cali Realty Corp.		1,621			38,094
WP GLIMCHER, Inc.		3,723			35,331
Total REITs					6,185,582
Banks - 28.3%
JPMorgan Chase & Co.		6,264			370,954
Wells Fargo & Co.		7,419			358,783
Bank of America Corp.		22,602			305,579
Citigroup, Inc.		6,523			272,335
Goldman Sachs Group, Inc.		1,478			232,016
U.S. Bancorp		5,160			209,444
PNC Financial Services Group, Inc.		2,112			178,612
Morgan Stanley		6,804			170,168
Capital One Financial Corp.		2,391			165,720
Bank of New York Mellon Corp.		4,231			155,827
State Street Corp.		2,284			133,660
BB&T Corp.		3,779			125,727
M&T Bank Corp.		1,041			115,550
Northern Trust Corp.		1,622			105,706
SunTrust Banks, Inc.		2,929			105,678
HDFC Bank Ltd. ADR		1,618			99,718
Royal Bank of Canada		1,728			99,464
Toronto-Dominion Bank		2,286			98,595
ICICI Bank Ltd. ADR		13,489			96,581
Bank of Nova Scotia		1,947			95,130
Credicorp Ltd.		720			94,327

70 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
FINANCIAL SERVICES FUND

	Shares		Value
Bank of Montreal		1,539	$	93,402
Fifth Third Bancorp		5,391		89,976
Citizens Financial Group, Inc.		4,250		89,038
Banco Bradesco S.A. ADR		11,944		88,983
HSBC Holdings plc ADR		2,849		88,661
First Republic Bank		1,309		87,232
Deutsche Bank AG		4,862		82,362
Itau Unibanco Holding S.A. ADR		9,504		81,639
Popular, Inc.		2,850		81,539
Regions Financial Corp.		10,235		80,345
Barclays plc ADR		9,214		79,425
KeyCorp		7,092		78,296
Banco Santander S.A. ADR		17,384		75,794
Signature Bank*		540		73,505
Huntington Bancshares, Inc.		7,503		71,579
Comerica, Inc.		1,832		69,378
SVB Financial Group*		633		64,598
CIT Group, Inc.		2,021		62,712
Zions Bancorporation		2,478		59,992
East West Bancorp, Inc.		1,830		59,438
PacWest Bancorp		1,555		57,768
Western Alliance Bancorporation*		1,560		52,073
Bank of the Ozarks, Inc.		1,228		51,539
Synovus Financial Corp.		1,773		51,257
Umpqua Holdings Corp.		3,150		49,959
FirstMerit Corp.		2,370		49,888
Webster Financial Corp.		1,340		48,106
Cullen/Frost Bankers, Inc.		870		47,946
First Horizon National Corp.		3,636		47,632
PrivateBancorp, Inc. — Class A		1,230		47,478
Prosperity Bancshares, Inc.		1,020		47,318
Texas Capital Bancshares, Inc.*		900		34,542
Total Banks				5,732,974
Insurance - 21.4%
Berkshire Hathaway, Inc. — Class B*		3,263		462,954
American International Group, Inc.		3,649		197,227
MetLife, Inc.		3,921		172,289
Travelers Companies, Inc.		1,378		160,826
Chubb Ltd.		1,344		160,138
Marsh & McLennan Companies, Inc.		2,546		154,772
Prudential Financial, Inc.		2,134		154,117
Aflac, Inc.		2,203		139,097
Allstate Corp.		2,049		138,041
Aon plc		1,213		126,698
Hartford Financial Services Group, Inc.		2,511		115,707
Progressive Corp.		3,193		112,202
Willis Towers Watson plc		914		108,455
Everest Re Group Ltd.		525		103,651
RenaissanceRe Holdings Ltd.		840		100,657
XL Group plc — Class A		2,707		99,618
Markel Corp.*		110		98,073
Loews Corp.		2,533		96,913
Arch Capital Group Ltd.*		1,340		95,274
Axis Capital Holdings Ltd.		1,710		94,837
Endurance Specialty Holdings Ltd.		1,400		91,476
Principal Financial Group, Inc.		2,295		90,538
Manulife Financial Corp.		6,350		89,726
Cincinnati Financial Corp.		1,366		89,282
Assured Guaranty Ltd.		3,410		86,273
Lincoln National Corp.		2,090		81,928
Arthur J Gallagher & Co.		1,732		77,039
Alleghany Corp.*		150		74,430
WR Berkley Corp.		1,291		72,554
Unum Group		2,346		72,538
Torchmark Corp.		1,268		68,675
American Financial Group, Inc.		959		67,485
Reinsurance Group of America, Inc. — Class A		699		67,279
Voya Financial, Inc.		2,230		66,387
Assurant, Inc.		789		60,871
Old Republic International Corp.		3,190		58,313
AmTrust Financial Services, Inc.		2,220		57,454
First American Financial Corp.		1,438		54,802
MGIC Investment Corp.*		5,495		42,147
Radian Group, Inc.		3,310		41,044
Genworth Financial, Inc. — Class A*		10,075		27,505
Total Insurance				4,329,292
Diversified Financial Services - 13.3%
BlackRock, Inc. — Class A		600		204,342
American Express Co.		3,143		192,980
CME Group, Inc. — Class A		1,627		156,274
Charles Schwab Corp.		5,466		153,157
Intercontinental Exchange, Inc.		617		145,081
Discover Financial Services		2,497		127,147
Synchrony Financial*		4,260		122,091
Franklin Resources, Inc.		3,008		117,462
T. Rowe Price Group, Inc.		1,573		115,553
Ameriprise Financial, Inc.		1,150		108,112
TD Ameritrade Holding Corp.		3,269		103,072
Nasdaq, Inc.		1,384		91,870
Invesco Ltd.		2,838		87,325
Ally Financial, Inc.*		4,310		80,683
Affiliated Managers Group, Inc.*		483		78,439
E*TRADE Financial Corp.*		2,912		71,315
Raymond James Financial, Inc.		1,492		71,034
CBOE Holdings, Inc.		977		63,827
MarketAxess Holdings, Inc.		470		58,670
Santander Consumer USA Holdings, Inc.*		5,497		57,663
Eaton Vance Corp.		1,608		53,900
Navient Corp.		4,497		53,829
OneMain Holdings, Inc.*		1,850		50,746
Legg Mason, Inc.		1,450		50,286
LendingClub Corp.*		5,792		48,074
Janus Capital Group, Inc.		2,902		42,456
SLM Corp.*		6,563		41,741
LPL Financial Holdings, Inc.		1,550		38,440
NorthStar Asset Management Group, Inc.		3,360		38,136

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 71

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
FINANCIAL SERVICES FUND

	Shares		Value
Waddell & Reed Financial, Inc. — Class A		1,466	$	34,510
WisdomTree Investments, Inc.		2,816		32,187
Total Diversified Financial Services				2,690,402
Commercial Services - 1.7%
McGraw Hill Financial, Inc.		1,500		148,470
Moody’s Corp.		1,209		116,741
SEI Investments Co.		1,746		75,165
Total Commercial Services				340,376
Real Estate - 1.5%
Brookfield Asset Management, Inc. — Class A		2,659		92,507
CBRE Group, Inc. — Class A*		2,685		77,381
Realogy Holdings Corp.*		1,790		64,637
Jones Lang LaSalle, Inc.		524		61,476
Total Real Estate				296,001
Savings & Loans - 1.4%
New York Community Bancorp, Inc.		4,831		76,812
People’s United Financial, Inc.		3,755		59,817
Investors Bancorp, Inc.		4,720		54,941
First Niagara Financial Group, Inc.		5,145		49,804
BofI Holding, Inc.*		1,560		33,290
Total Savings & Loans				274,664
Investment Companies - 0.5%
Ares Capital Corp.		3,958		58,737
American Capital Ltd.*		3,000		45,720
Total Investment Companies				104,457
Software - 0.4%
MSCI, Inc. — Class A		999		74,006
Media - 0.3%
FactSet Research Systems, Inc.		450		68,189
Holding Companies-Diversified - 0.3%
Leucadia National Corp.		3,923		63,435
Total Common Stocks
(Cost $13,697,118)				20,159,378

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.3%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	54,189		54,189
Total Repurchase Agreement
(Cost $54,189)				54,189
Total Investments - 99.9%
(Cost $13,751,307)			$	20,213,567
Other Assets & Liabilities, net - 0.1%				27,391
Total Net Assets - 100.0%			$	20,240,958

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	20,159,378	$	—	$	—	$	20,159,378
Repurchase Agreement		—		54,189		—		54,189
Total	$	20,159,378	$	54,189	$	—	$	20,213,567

For the year ended March 31, 2016, there were no transfers between levels.

72 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL SERVICES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $13,697,118)	$	20,159,378
Repurchase agreements, at value (cost $54,189)		54,189
Total investments (cost $13,751,307)		20,213,567
Cash		1,638
Receivables:
Fund shares sold		44,892
Dividends		44,441
Total assets		20,304,538
Liabilities:
Payable for:
Fund shares redeemed		36,034
Management fees		14,564
Transfer agent and administrative fees		4,284
Distribution and service fees		1,984
Portfolio accounting fees		1,713
Miscellaneous		5,001
Total liabilities		63,580
Commitments and contingent liabilities (Note 10)		—
Net assets	$	20,240,958
Net assets consist of:
Paid in capital	$	24,638,146
Undistributed net investment income		570,253
Accumulated net realized loss on investments		(11,429,701	)
Net unrealized appreciation on investments		6,462,260
Net assets	$	20,240,958
Investor Class:
Net assets	$	15,109,596
Capital shares outstanding		140,153
Net asset value per share	$	107.81
A-Class:
Net assets	$	1,039,080
Capital shares outstanding		10,187
Net asset value per share	$	102.00
Maximum offering price per share (Net asset value divided by 95.25%)	$	107.09
C-Class:
Net assets	$	1,064,582
Capital shares outstanding		11,510
Net asset value per share	$	92.49
H-Class:
Net assets	$	3,027,700
Capital shares outstanding		30,564
Net asset value per share	$	99.06

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $8,087)	$	1,261,404
Income from securities lending, net		382
Interest		130
Total investment income		1,261,916
Expenses:
Management fees		406,657
Transfer agent and administrative fees		119,605
Distribution and service fees:
A-Class		10,164
C-Class		15,231
H-Class**		24,131
Portfolio accounting fees		47,842
Custodian fees		5,620
Trustees’ fees*		3,636
Line of credit fees		458
Miscellaneous		58,304
Total expenses		691,648
Net investment income		570,268
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(6,440,895	)
Net realized loss		(6,440,895	)
Net change in unrealized appreciation (depreciation) on:
Investments		(2,679,547	)
Net change in unrealized appreciation (depreciation)		(2,679,547	)
Net realized and unrealized loss		(9,120,442	)
Net decrease in net assets resulting from operations	$	(8,550,174	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 73

FINANCIAL SERVICES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	570,268		$	277,758
Net realized loss on investments		(6,440,895	)		(151,239	)
Net change in unrealized appreciation (depreciation) on investments		(2,679,547	)		2,347,454
Net increase (decrease) in net assets resulting from operations		(8,550,174	)		2,473,973
Distributions to shareholders from:
Net investment income
Investor Class		(197,056	)		(124,825	)
A-Class		(34,956	)		(5,719	)
C-Class		(9,406	)		(3,673	)
H-Class*		(36,355	)		(15,302	)
Net realized gains
Investor Class		(100,426	)		—
A-Class		(17,815	)		—
C-Class		(4,794	)		—
H-Class*		(18,528	)		—
Total distributions to shareholders		(419,336	)		(149,519	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		81,929,333			142,998,248
A-Class		19,166,428			16,301,408
C-Class		15,134,609			22,259,319
H-Class*		39,630,649			21,042,008
Distributions reinvested
Investor Class		230,452			50,229
A-Class		52,090			4,742
C-Class		14,200			3,317
H-Class*		54,808			15,281
Cost of shares redeemed
Investor Class		(111,107,892	)		(112,502,368	)
A-Class		(19,489,521	)		(21,300,899	)
C-Class		(15,116,335	)		(22,171,252	)
H-Class*		(39,652,502	)		(21,680,719	)
Net increase (decrease) from capital share transactions		(29,153,681	)		25,019,314
Net increase (decrease) in net assets		(38,123,191	)		27,343,768
Net assets:
Beginning of year		58,364,149			31,020,381
End of year	$	20,240,958		$	58,364,149
Undistributed net investment income at end of year	$	570,253		$	277,758

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

74 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL SERVICES FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
Investor Class		724,539			1,279,802
A-Class		178,217			151,873
C-Class		154,197			231,403
H-Class*		379,316			203,091
Shares issued from reinvestment of distributions
Investor Class		2,070			443
A-Class		494			44
C-Class		148			34
H-Class*		535			146
Shares redeemed
Investor Class		(1,018,209	)		(1,015,205	)
A-Class		(193,456	)		(203,251	)
C-Class		(155,347	)		(230,221	)
H-Class*		(391,299	)		(207,816	)
Net increase (decrease) in shares		(318,795	)		210,343

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 75

FINANCIAL 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	115.57		$	106.10		$	90.67		$	78.47		$	81.18
Income (loss) from investment operations:
Net investment income (loss)a		1.53			.92			.78			.76			.61
Net gain (loss) on investments (realized and unrealized)		(8.38	)		8.81			15.21			11.99			(3.29	)
Total from investment operations		(6.85	)		9.73			15.99			12.75			(2.68	)
Less distributions from:
Net investment income		(.60	)		(.26	)		(.56	)		(.55	)		(.03	)
Net realized gains		(.31	)		—			—			—			—
Total distributions		(.91	)		(.26	)		(.56	)		(.55	)		(.03	)
Net asset value, end of period	$	107.81		$	115.57		$	106.10		$	90.67		$	78.47
Total Returnb		(5.95	%)		9.17	%		17.67	%		16.37	%		(3.31	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	15,110		$	49,897		$	17,688		$	17,007		$	19,973
Ratios to average net assets:
Net investment income (loss)		1.36	%		0.82	%		0.81	%		0.95	%		0.86	%
Total expenses		1.34	%		1.34	%		1.37	%		1.36	%		1.34	%
Portfolio turnover rate		268	%		326	%		414	%		590	%		970	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	109.65		$	100.94		$	86.48		$	75.07		$	77.87
Income (loss) from investment operations:
Net investment income (loss)a		.92			.43			.58			.51			.45
Net gain (loss) on investments (realized and unrealized)		(7.66	)		8.54			14.44			11.45			(3.22	)
Total from investment operations		(6.74	)		8.97			15.02			11.96			(2.77	)
Less distributions from:
Net investment income		(.60	)		(.26	)		(.56	)		(.55	)		(.03	)
Net realized gains		(.31	)		—			—			—			—
Total distributions		(.91	)		(.26	)		(.56	)		(.55	)		(.03	)
Net asset value, end of period	$	102.00		$	109.65		$	100.94		$	86.48		$	75.07
Total Returnb		(6.17	%)		8.89	%		17.41	%		16.06	%		(3.57	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,039		$	2,734		$	7,698		$	1,826		$	632
Ratios to average net assets:
Net investment income (loss)		0.87	%		0.41	%		0.62	%		0.66	%		0.64	%
Total expenses		1.60	%		1.59	%		1.62	%		1.61	%		1.61	%
Portfolio turnover rate		268	%		326	%		414	%		590	%		970	%

76 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	100.28		$	93.02		$	80.30		$	70.26		$	73.42
Income (loss) from investment operations:
Net investment income (loss)a		.21			(.22	)		(.16	)		.03			(.12	)
Net gain (loss) on investments (realized and unrealized)		(7.09	)		7.74			13.44			10.56			(3.01	)
Total from investment operations		(6.88	)		7.52			13.28			10.59			(3.13	)
Less distributions from:
Net investment income		(.60	)		(.26	)		(.56	)		(.55	)		(.03	)
Net realized gains		(.31	)		—			—			—			—
Total distributions		(.91	)		(.26	)		(.56	)		(.55	)		(.03	)
Net asset value, end of period	$	92.49		$	100.28		$	93.02		$	80.30		$	70.26
Total Returnb		(6.89	%)		8.08	%		16.58	%		15.21	%		(4.27	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,065		$	1,255		$	1,051		$	1,440		$	817
Ratios to average net assets:
Net investment income (loss)		0.22	%		(0.23	%)		(0.18	%)		0.04	%		(0.18	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.36	%		2.36	%
Portfolio turnover rate		268	%		326	%		414	%		590	%		970	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	106.60		$	98.37		$	84.51		$	73.53		$	76.47
Income (loss) from investment operations:
Net investment income (loss)a		.85			.29			.24			.22			.26
Net gain (loss) on investments (realized and unrealized)		(7.48	)		8.20			14.18			11.31			(3.17	)
Total from investment operations		(6.63	)		8.49			14.42			11.53			(2.91	)
Less distributions from:
Net investment income		(.60	)		(.26	)		(.56	)		(.55	)		(.03	)
Net realized gains		(.31	)		—			—			—			—
Total distributions		(.91	)		(.26	)		(.56	)		(.55	)		(.03	)
Net asset value, end of period	$	99.06		$	106.60		$	98.37		$	84.51		$	73.53
Total Returnb		(6.25	%)		8.63	%		17.10	%		15.80	%		(3.80	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,028		$	4,479		$	4,583		$	7,103		$	4,243
Ratios to average net assets:
Net investment income (loss)		0.83	%		0.28	%		0.26	%		0.29	%		0.37	%
Total expenses		1.65	%		1.85	%		1.87	%		1.85	%		1.85	%
Portfolio turnover rate		268	%		326	%		414	%		590	%		970	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 77

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

HEALTH CARE FUND

OBJECTIVE: Seeks to provide capital appreciation by investing in companies that are involved in the health care industry (“Health Care Companies”).

For the one-year period ended March 31, 2016, Health Care Fund Investor Class returned -14.82%, compared with a return of -5.18% for the S&P 500 Health Care Index. The broader S&P 500 Index returned 1.78%.

The health care equipment & supplies industry was the largest contributor to return, followed by the life sciences tools & services industry. The biggest detractor from Fund performance was biotechnology, followed by pharmaceuticals.

The Fund’s top-performing holdings were Johnson & Johnson, Synageva BioPharma Corp., and Baxalta, Inc. The worst-performing holdings in the Fund included Valeant Pharmaceuticals International, Inc., Endo International plc, and Innoviva, Inc.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	March 30, 2001
H-Class*	May 11, 1998

Ten Largest Holdings (% of Total Net Assets)
Johnson & Johnson	3.2%
Pfizer, Inc.	2.5%
Merck & Company, Inc.	2.3%
Gilead Sciences, Inc.	2.1%
UnitedHealth Group, Inc.	2.1%
Amgen, Inc.	2.0%
Bristol-Myers Squibb Co.	2.0%
Allergan plc	1.9%
AbbVie, Inc.	1.8%
Eli Lilly & Co.	1.7%
Top Ten Total	21.6%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

78 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-14.82%	13.86%	8.48%
A-Class Shares	-15.04%	13.58%	8.23%
A-Class Shares with sales charge†	-19.08%	12.49%	7.70%
C-Class Shares	-15.67%	12.73%	7.43%
C-Class Shares with CDSC‡	-16.45%	12.73%	7.43%
H-Class Shares**	-15.08%	13.37%	7.99%
S&P 500 Health Care Index	-5.18%	17.64%	9.92%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Health Care Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 79

SCHEDULE OF INVESTMENTS	March 31, 2016
HEALTH CARE FUND

	Shares		Value
COMMON STOCKS† - 99.9%
Pharmaceuticals - 37.3%
Johnson & Johnson		19,356	$	2,094,318
Pfizer, Inc.		55,117		1,633,667
Merck & Company, Inc.		28,060		1,484,654
Bristol-Myers Squibb Co.		20,076		1,282,455
Allergan plc*		4,619		1,238,031
AbbVie, Inc.		20,539		1,173,188
Eli Lilly & Co.		15,375		1,107,154
Express Scripts Holding Co.*		12,066		828,814
McKesson Corp.		4,687		737,031
Baxalta, Inc.		15,907		642,643
Cardinal Health, Inc.		7,742		634,457
Teva Pharmaceutical Industries Ltd. ADR		11,767		629,652
Zoetis, Inc.		13,560		601,115
Mylan N.V.*		12,842		595,227
Shire plc ADR		3,422		588,242
Perrigo Company plc		4,504		576,197
Endo International plc*		19,698		554,499
AmerisourceBergen Corp. — Class A		5,820		503,721
Alkermes plc*		13,292		454,453
Jazz Pharmaceuticals plc*		3,350		437,343
GlaxoSmithKline plc ADR		10,617		430,519
AstraZeneca plc ADR		14,796		416,655
Novartis AG ADR		5,721		414,429
Novo Nordisk A/S ADR		6,770		366,866
Valeant Pharmaceuticals International, Inc.*		13,614		358,048
Mallinckrodt plc*		5,774		353,831
Quintiles Transnational Holdings, Inc.*		5,079		330,643
DexCom, Inc.*		4,450		302,199
VCA, Inc.*		4,645		267,970
OPKO Health, Inc.*		25,390		263,802
ACADIA Pharmaceuticals, Inc.*		9,115		254,855
Neurocrine Biosciences, Inc.*		6,050		239,278
Akorn, Inc.*		9,825		231,182
Catalent, Inc.*		8,460		225,628
Horizon Pharma plc*		13,310		220,547
Prestige Brands Holdings, Inc.*		3,800		202,882
Owens & Minor, Inc.		4,760		192,399
Pacira Pharmaceuticals, Inc.*		3,620		191,788
Impax Laboratories, Inc.*		5,760		184,435
Radius Health, Inc.*		4,350		136,764
Amicus Therapeutics, Inc.*		15,970		134,947
Insys Therapeutics, Inc.*		7,950		127,121
Depomed, Inc.*		8,390		116,873
Sarepta Therapeutics, Inc.*		5,810		113,411
Clovis Oncology, Inc.*		5,495		105,504
Relypsa, Inc.*		6,660		90,243
Total Pharmaceuticals				24,069,680
Healthcare-Products - 22.2%
Abbott Laboratories		22,775		952,677
Medtronic plc		12,147		911,025
Thermo Fisher Scientific, Inc.		6,369		901,787
Stryker Corp.		7,270		779,999
Becton Dickinson and Co.		4,509		684,556
Boston Scientific Corp.*		32,807		617,100
Baxter International, Inc.		14,167		581,980
Intuitive Surgical, Inc.*		968		581,816
Zimmer Biomet Holdings, Inc.		5,231		557,782
Edwards Lifesciences Corp.*		6,118		539,669
St. Jude Medical, Inc.		8,758		481,690
CR Bard, Inc.		2,328		471,816
DENTSPLY SIRONA, Inc.		7,504		462,472
Henry Schein, Inc.*		2,640		455,743
STERIS plc		5,940		422,037
Hologic, Inc.*		10,970		378,465
ResMed, Inc.		6,142		355,130
LivaNova plc*		6,281		339,048
Cooper Companies, Inc.		2,170		334,115
IDEXX Laboratories, Inc.*		4,264		333,957
Varian Medical Systems, Inc.*		4,167		333,443
Teleflex, Inc.		2,070		325,011
Align Technology, Inc.*		4,204		305,588
West Pharmaceutical Services, Inc.		4,050		280,746
Bruker Corp.		9,400		263,200
Patterson Companies, Inc.		5,567		259,033
ABIOMED, Inc.*		2,720		257,883
Alere, Inc.*		5,010		253,556
Bio-Techne Corp.		2,400		226,848
Hill-Rom Holdings, Inc.		4,480		225,344
Cepheid*		5,857		195,390
NuVasive, Inc.*		4,000		194,600
HeartWare International, Inc.*		2,840		89,233
Total Healthcare-Products				14,352,739
Biotechnology - 19.1%
Gilead Sciences, Inc.		14,837		1,362,926
Amgen, Inc.		8,580		1,286,398
Celgene Corp.*		10,792		1,080,171
Biogen, Inc.*		3,598		936,631
Regeneron Pharmaceuticals, Inc.*		2,024		729,531
Alexion Pharmaceuticals, Inc.*		5,194		723,109
Illumina, Inc.*		3,804		616,666
Vertex Pharmaceuticals, Inc.*		6,855		544,904
Incyte Corp.*		6,667		483,157
BioMarin Pharmaceutical, Inc.*		5,702		470,301
Medivation, Inc.*		8,416		386,968
Alnylam Pharmaceuticals, Inc.*		4,655		292,194
Ionis Pharmaceuticals, Inc.*		6,831		276,656
Seattle Genetics, Inc.*		7,643		268,193
United Therapeutics Corp.*		2,386		265,872
Charles River Laboratories International, Inc.*		3,105		235,794
Juno Therapeutics, Inc.*		6,170		235,015
Intrexon Corp.*		6,730		228,080
Intercept Pharmaceuticals, Inc.*		1,700		218,399
Myriad Genetics, Inc.*		5,180		193,887

80 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
HEALTH CARE FUND

	Shares		Value
Ligand Pharmaceuticals, Inc. — Class B*		1,720	$	184,195
Medicines Co.*		5,740		182,360
Kite Pharma, Inc.*		3,970		182,263
Novavax, Inc.*		28,400		146,544
Acorda Therapeutics, Inc.*		5,210		137,805
Achillion Pharmaceuticals, Inc.*		16,850		130,082
ARIAD Pharmaceuticals, Inc.*		20,115		128,535
ZIOPHARM Oncology, Inc.*		16,260		120,649
AMAG Pharmaceuticals, Inc.*		5,030		117,702
Puma Biotechnology, Inc.*		3,646		107,083
Exact Sciences Corp.*		14,940		100,696
Total Biotechnology				12,372,766
Healthcare-Services - 15.9%
UnitedHealth Group, Inc.		10,495		1,352,805
Aetna, Inc.		6,759		759,373
Anthem, Inc.		5,234		727,474
Cigna Corp.		5,180		710,903
HCA Holdings, Inc.*		8,264		645,006
Humana, Inc.		3,382		618,737
Centene Corp.*		8,408		517,659
DaVita HealthCare Partners, Inc.*		6,421		471,173
Universal Health Services, Inc. — Class B		3,416		426,044
Laboratory Corporation of America Holdings*		3,542		414,874
Quest Diagnostics, Inc.		5,484		391,832
ICON plc*		4,950		371,745
MEDNAX, Inc.*		4,716		304,748
Acadia Healthcare Company, Inc.*		5,100		281,061
Amsurg Corp. — Class A*		3,350		249,910
WellCare Health Plans, Inc.*		2,650		245,788
Envision Healthcare Holdings, Inc.*		11,450		233,580
HealthSouth Corp.		6,090		229,167
Molina Healthcare, Inc.*		3,526		227,392
LifePoint Health, Inc.*		3,021		209,204
Tenet Healthcare Corp.*		7,080		204,824
Brookdale Senior Living, Inc. — Class A*		12,761		202,645
Community Health Systems, Inc.*		10,275		190,190
Chemed Corp.		1,340		181,503
Kindred Healthcare, Inc.		10,281		126,970
Total Healthcare-Services				10,294,607
Software - 2.4%
Cerner Corp.*		9,616		509,264
IMS Health Holdings, Inc.*		13,400		355,770
athenahealth, Inc.*		2,110		292,826
Allscripts Healthcare Solutions, Inc.*		15,030		198,546
Medidata Solutions, Inc.*		4,740		183,485
Total Software				1,539,891
Electronics - 2.3%
Agilent Technologies, Inc.		10,793		430,101
Waters Corp.*		3,027		399,322
Mettler-Toledo International, Inc.*		1,070		368,893
PerkinElmer, Inc.		5,762		284,989
Total Electronics				1,483,305
Commercial Services - 0.7%
PAREXEL International Corp.*		3,650		228,965
Team Health Holdings, Inc.*		4,828		201,859
Total Commercial Services				430,824
Total Common Stocks
(Cost $41,979,750)				64,543,812
RIGHTS††† - 0.0%
Dyax Corp.
Expires 01/25/17*		5,700		—
Total Rights
(Cost $ —)				—

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.2%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	142,686		142,686
Total Repurchase Agreement
(Cost $142,686)				142,686
Total Investments - 100.1%
(Cost $42,122,436)			$	64,686,498
Other Assets & Liabilities, net - (0.1)%				(86,418	)
Total Net Assets - 100.0%			$	64,600,080

*	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	Repurchase Agreement — See Note 5.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 81

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
HEALTH CARE FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	64,543,812	$	—	$	—	$	64,543,812
Repurchase Agreement		—		142,686		—		142,686
Rights		—		—		—		—
Total	$	64,543,812	$	142,686	$	—	$	64,686,498

For the year ended March 31, 2016, there were no transfers between levels.

82 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

HEALTH CARE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $41,979,750)	$	64,543,812
Repurchase agreements, at value (cost $142,686)		142,686
Total investments (cost $42,122,436)		64,686,498
Receivables:
Dividends		71,636
Fund shares sold		19,250
Total assets		64,777,384
Liabilities:
Payable for:
Fund shares redeemed		84,040
Management fees		49,024
Transfer agent and administrative fees		14,419
Distribution and service fees		9,703
Portfolio accounting fees		5,767
Miscellaneous		14,351
Total liabilities		177,304
Commitments and contingent liabilities (Note 10)		—
Net assets	$	64,600,080
Net assets consist of:
Paid in capital	$	43,497,961
Accumulated net investment loss		(54,612	)
Accumulated net realized gain on investments		(1,407,331	)
Net unrealized appreciation on investments		22,564,062
Net assets	$	64,600,080
Investor Class:
Net assets	$	44,662,662
Capital shares outstanding		1,558,662
Net asset value per share	$	28.65
A-Class:
Net assets	$	6,409,787
Capital shares outstanding		240,249
Net asset value per share	$	26.68
Maximum offering price per share (Net asset value divided by 95.25%)	$	28.01
C-Class:
Net assets	$	8,283,543
Capital shares outstanding		343,285
Net asset value per share	$	24.13
H-Class:
Net assets	$	5,244,088
Capital shares outstanding		202,378
Net asset value per share	$	25.91

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	1,617,931
Income from securities lending, net		527,124
Interest		458
Total investment income		2,145,513
Expenses:
Management fees		1,488,583
Transfer agent and administrative fees		437,817
Distribution and service fees:
A-Class		49,642
C-Class		114,137
H-Class**		160,615
Portfolio accounting fees		171,550
Custodian fees		20,330
Trustees’ fees*		13,581
Line of credit fees		2,200
Miscellaneous		205,811
Total expenses		2,664,266
Net investment loss		(518,753	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		28,773,483
Net realized gain		28,773,483
Net change in unrealized appreciation (depreciation) on:
Investments		(55,109,991	)
Net change in unrealized appreciation (depreciation)		(55,109,991	)
Net realized and unrealized loss		(26,336,508	)
Net decrease in net assets resulting from operations	$	(26,855,261	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 83

HEALTH CARE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(518,753	)	$	(733,012	)
Net realized gain on investments		28,773,483			8,068,372
Net change in unrealized appreciation (depreciation) on investments		(55,109,991	)		40,282,429
Net increase (decrease) in net assets resulting from operations		(26,855,261	)		47,617,789
Distributions to shareholders from:
Net realized gains
Investor Class		(2,551,979	)		(1,752,480	)
A-Class		(751,373	)		(250,757	)
C-Class		(771,085	)		(125,703	)
H-Class*		(2,499,031	)		(465,325	)
Total distributions to shareholders		(6,573,468	)		(2,594,265	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		288,312,509			349,067,609
A-Class		51,799,265			42,834,467
C-Class		20,161,059			27,276,806
H-Class*		245,917,636			141,454,376
Distributions reinvested
Investor Class		2,527,332			1,343,589
A-Class		734,523			203,075
C-Class		758,819			120,158
H-Class*		2,496,935			464,580
Cost of shares redeemed
Investor Class		(402,516,466	)		(302,007,365	)
A-Class		(68,969,564	)		(26,627,112	)
C-Class		(21,424,094	)		(25,514,379	)
H-Class*		(287,555,879	)		(139,767,422	)
Net increase (decrease) from capital share transactions		(167,757,925	)		68,848,382
Net increase (decrease) in net assets		(201,186,654	)		113,871,906
Net assets:
Beginning of year		265,786,734			151,914,828
End of year	$	64,600,080		$	265,786,734
Accumulated net investment loss at end of year	$	(54,612	)	$	—
Capital share activity:
Shares sold
Investor Class		8,380,890			11,255,406
A-Class		1,575,077			1,476,215
C-Class		680,967			1,010,754
H-Class*		7,391,856			4,878,949
Shares issued from reinvestment of distributions
Investor Class		81,233			41,909
A-Class		25,356			6,749
C-Class		28,863			4,361
H-Class*		88,733			15,845
Shares redeemed
Investor Class		(11,798,319	)		(9,940,130	)
A-Class		(2,214,540	)		(931,513	)
C-Class		(741,300	)		(943,291	)
H-Class*		(8,810,947	)		(4,871,552	)
Net increase (decrease) in shares		(5,312,131	)		2,003,702

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

84 | THE RYDEX FUNDS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	35.83		$	27.76		$	22.35		$	18.83		$	17.14
Income (loss) from investment operations:
Net investment income (loss)a		(.04	)		(.07	)		(.03	)		.09			.01
Net gain (loss) on investments (realized and unrealized)		(5.11	)		8.50			7.00			3.48			1.68
Total from investment operations		(5.15	)		8.43			6.97			3.57			1.69
Less distributions from:
Net investment income		—			—			(.03	)		(.05	)		—
Net realized gains		(2.03	)		(.36	)		(1.53	)		—			—
Total distributions		(2.03	)		(.36	)		(1.56	)		(.05	)		—
Net asset value, end of period	$	28.65		$	35.83		$	27.76		$	22.35		$	18.83
Total Returnb		(14.82	%)		30.51	%		31.70	%		18.98	%		9.86	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	44,663		$	175,397		$	98,209		$	104,525		$	39,036
Ratios to average net assets:
Net investment income (loss)		(0.11	%)		(0.23	%)		(0.12	%)		0.45	%		0.08	%
Total expenses		1.34	%		1.34	%		1.37	%		1.35	%		1.36	%
Portfolio turnover rate		249	%		176	%		277	%		266	%		582	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	33.60		$	26.11		$	21.15		$	17.87		$	16.30
Income (loss) from investment operations:
Net investment income (loss)a		(.13	)		(.14	)		(.09	)		.04			(.02	)
Net gain (loss) on investments (realized and unrealized)		(4.76	)		7.99			6.61			3.29			1.59
Total from investment operations		(4.89	)		7.85			6.52			3.33			1.57
Less distributions from:
Net investment income		—			—			(.03	)		(.05	)		—
Net realized gains		(2.03	)		(.36	)		(1.53	)		—			—
Total distributions		(2.03	)		(.36	)		(1.56	)		(.05	)		—
Net asset value, end of period	$	26.68		$	33.60		$	26.11		$	21.15		$	17.87
Total Returnb		(15.04	%)		30.21	%		31.36	%		18.65	%		9.63	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,410		$	28,704		$	7,909		$	3,660		$	2,964
Ratios to average net assets:
Net investment income (loss)		(0.42	%)		(0.47	%)		(0.37	%)		0.20	%		(0.13	%)
Total expenses		1.59	%		1.59	%		1.62	%		1.60	%		1.60	%
Portfolio turnover rate		249	%		176	%		277	%		266	%		582	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 85

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	30.82		$	24.16		$	19.81		$	16.86		$	15.50
Income (loss) from investment operations:
Net investment income (loss)a		(.33	)		(.33	)		(.26	)		(.09	)		(.14	)
Net gain (loss) on investments (realized and unrealized)		(4.33	)		7.35			6.17			3.09			1.50
Total from investment operations		(4.66	)		7.02			5.91			3.00			1.36
Less distributions from:
Net investment income		—			—			(.03	)		(.05	)		—
Net realized gains		(2.03	)		(.36	)		(1.53	)		—			—
Total distributions		(2.03	)		(.36	)		(1.56	)		(.05	)		—
Net asset value, end of period	$	24.13		$	30.82		$	24.16		$	19.81		$	16.86
Total Returnb		(15.67	%)		29.21	%		30.38	%		17.81	%		8.77	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,284		$	11,551		$	7,318		$	4,589		$	3,468
Ratios to average net assets:
Net investment income (loss)		(1.17	%)		(1.24	%)		(1.14	%)		(0.53	%)		(0.91	%)
Total expenses		2.35	%		2.34	%		2.37	%		2.35	%		2.36	%
Portfolio turnover rate		249	%		176	%		277	%		266	%		582	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	32.71		$	25.49		$	20.73		$	17.55		$	16.04
Income (loss) from investment operations:
Net investment income (loss)a		(.14	)		(.21	)		(.15	)		(.06	)		(.07	)
Net gain (loss) on investments (realized and unrealized)		(4.63	)		7.79			6.47			3.29			1.58
Total from investment operations		(4.77	)		7.58			6.32			3.23			1.51
Less distributions from:
Net investment income		—			—			(.03	)		(.05	)		—
Net realized gains		(2.03	)		(.36	)		(1.53	)		—			—
Total distributions		(2.03	)		(.36	)		(1.56	)		(.05	)		—
Net asset value, end of period	$	25.91		$	32.71		$	25.49		$	20.73		$	17.55
Total Returnb		(15.08	%)		29.89	%		31.03	%		18.43	%		9.41	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,244		$	50,135		$	38,480		$	3,605		$	4,275
Ratios to average net assets:
Net investment income (loss)		(0.44	%)		(0.73	%)		(0.62	%)		(0.31	%)		(0.44	%)
Total expenses		1.71	%		1.85	%		1.87	%		1.86	%		1.85	%
Portfolio turnover rate		249	%		176	%		277	%		266	%		582	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

86 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Internet Fund Investor Class returned 0.46%, compared with 8.06% for the S&P 500 Information Technology Index. The broader S&P 500 Index returned 1.78%.

The internet & catalog retail industry was the largest contributor to return, followed by the real estate investment trusts (REIT) industry. The largest detractor from return was the capital markets industry, followed by the consumer finance industry.

Alphabet, Inc. — Class A, Amazon.com, Inc., and Facebook, Inc. — Class A added the most to Fund performance for the period. Twitter, Inc., LinkedIn Corp. — Class A, and LendingClub Corp. detracted most from Fund performance for the period.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 19, 2001
H-Class*	April 6, 2000

Ten Largest Holdings (% of Total Net Assets)
Alphabet, Inc. — Class A	6.3%
Facebook, Inc. — Class A	5.1%
Amazon.com, Inc.	4.9%
Cisco Systems, Inc.	3.3%
QUALCOMM, Inc.	2.4%
Alibaba Group Holding Ltd. ADR	2.2%
Time Warner, Inc.	2.1%
Priceline Group, Inc.	2.1%
salesforce.com, Inc.	2.0%
Broadcom Ltd.	2.0%
Top Ten Total	32.4%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 87

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	0.46%	9.60%	7.73%
A-Class Shares	0.20%	9.32%	7.46%
A-Class Shares with sales charge†	-4.57%	8.26%	6.94%
C-Class Shares	-0.54%	8.51%	6.66%
C-Class Shares with CDSC‡	-1.53%	8.51%	6.66%
H-Class Shares**	0.11%	9.07%	7.20%
S&P 500 Information Technology Index	8.06%	13.76%	9.23%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Information Technology Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

88 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
INTERNET FUND

	Shares		Value
COMMON STOCKS† - 99.3%
Internet - 51.9%
Alphabet, Inc. — Class A*		2,989	$	2,280,309
Facebook, Inc. — Class A*		16,095		1,836,439
Amazon.com, Inc.*		2,972		1,764,297
Alibaba Group Holding Ltd. ADR*		10,220		807,687
Priceline Group, Inc.*		578		745,019
Baidu, Inc. ADR*		3,511		670,181
Netflix, Inc.*		6,537		668,278
Yahoo!, Inc.*		16,478		606,555
eBay, Inc.*		22,335		532,913
JD.com, Inc. ADR*		15,739		417,084
LinkedIn Corp. — Class A*		3,586		410,060
Expedia, Inc.		3,780		407,560
Ctrip.com International Ltd. ADR*		8,926		395,065
Symantec Corp.		18,791		345,379
Vipshop Holdings Ltd. ADR*		26,229		337,830
Twitter, Inc.*		20,085		332,407
TripAdvisor, Inc.*		4,803		319,400
VeriSign, Inc.*		3,487		308,739
Qihoo 360 Technology Company Ltd. ADR*		3,839		290,036
MercadoLibre, Inc.		2,405		283,429
F5 Networks, Inc.*		2,598		274,998
YY, Inc. ADR*		4,448		273,952
58.com, Inc. ADR*		4,910		273,242
Yandex N.V. — Class A*		17,701		271,179
SouFun Holdings Ltd. ADR*		45,192		270,700
Youku Tudou, Inc. ADR*		9,618		264,399
Autohome, Inc. ADR*		9,352		261,295
SINA Corp.*		5,366		254,187
Liberty Ventures*		6,195		242,348
Sohu.com, Inc.*		4,891		242,300
Bitauto Holdings Ltd. ADR*		9,217		228,489
Zillow Group, Inc. — Class A*		8,713		222,617
Zillow Group, Inc. — Class C*		9,035		214,401
IAC/InterActiveCorp		4,147		195,241
Wayfair, Inc. — Class A*		4,244		183,426
WebMD Health Corp. — Class A*		2,556		160,082
GrubHub, Inc.*		5,964		149,875
Groupon, Inc. — Class A*		37,028		147,742
Cogent Communications Holdings, Inc.		3,485		136,020
Pandora Media, Inc.*		14,536		130,097
comScore, Inc.*		4,308		129,412
Shutterfly, Inc.*		2,747		127,378
Stamps.com, Inc.*		1,168		124,135
Yelp, Inc. — Class A*		5,889		117,073
Shutterstock, Inc.*		3,108		114,157
Total Internet				18,767,412
Telecommunications - 14.3%
Cisco Systems, Inc.		42,131		1,199,470
Palo Alto Networks, Inc.*		2,407		392,678
Motorola Solutions, Inc.		4,892		370,324
Juniper Networks, Inc.		11,994		305,967
Nokia Oyj ADR		48,460		286,399
Telefonaktiebolaget LM Ericsson ADR		27,016		270,970
CommScope Holding Company, Inc.*		8,240		230,061
Arista Networks, Inc.*		3,364		212,268
ARRIS International plc*		9,219		211,299
ViaSat, Inc.*		2,546		187,080
Ubiquiti Networks, Inc.*		4,911		163,389
Ciena Corp.*		8,530		162,240
Infinera Corp.*		9,211		147,929
InterDigital, Inc.		2,541		141,407
Finisar Corp.*		7,574		138,150
Viavi Solutions, Inc.*		18,555		127,287
Polycom, Inc.*		10,755		119,918
Plantronics, Inc.		2,976		116,629
NETGEAR, Inc.*		2,834		114,409
LogMeIn, Inc.*		2,129		107,429
Ruckus Wireless, Inc.*		9,410		92,312
Gogo, Inc.*		8,123		89,434
Total Telecommunications				5,187,049
Software - 11.5%
salesforce.com, Inc.*		9,671		714,010
Intuit, Inc.		5,077		528,059
Red Hat, Inc.*		5,044		375,828
Check Point Software Technologies Ltd.*		4,111		359,589
Citrix Systems, Inc.*		4,500		353,610
NetEase, Inc. ADR		2,323		333,536
Akamai Technologies, Inc.*		5,586		310,414
NetSuite, Inc.*		3,538		242,318
Veeva Systems, Inc. — Class A*		7,300		182,792
j2 Global, Inc.		2,820		173,656
Rackspace Hosting, Inc.*		7,911		170,798
Allscripts Healthcare Solutions, Inc.*		12,436		164,280
Cornerstone OnDemand, Inc.*		4,070		133,374
Demandware, Inc.*		3,071		120,076
Total Software				4,162,340
Diversified Financial Services - 4.5%
Charles Schwab Corp.		21,986		616,047
TD Ameritrade Holding Corp.		13,212		416,574
E*TRADE Financial Corp.*		10,700		262,043
LendingClub Corp.*		21,455		178,077
BGC Partners, Inc. — Class A		17,241		156,031
Total Diversified Financial Services				1,628,772
Semiconductors - 4.4%
QUALCOMM, Inc.		17,173		878,227
Broadcom Ltd.		4,584		708,228
Total Semiconductors				1,586,455
Commercial Services - 3.9%
PayPal Holdings, Inc.*		17,614		679,901
Cimpress N.V.*		3,025		274,337

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 89

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INTERNET FUND

	Shares		Value
CoStar Group, Inc.*		1,242	$	233,707
Live Nation Entertainment, Inc.*		9,525		212,503
Total Commercial Services				1,400,448
Media - 2.1%
Time Warner, Inc.		10,526		763,661
Computers - 1.7%
BlackBerry Ltd.*		33,239		268,904
Brocade Communications Systems, Inc.		19,552		206,860
NetScout Systems, Inc.*		6,599		151,579
Total Computers				627,343
Retail - 1.7%
Liberty Interactive Corporation QVC Group — Class A*		14,056		354,914
Jumei International Holding Ltd. ADR*		39,151		254,873
Total Retail				609,787
REITs - 1.3%
Equinix, Inc.		1,412		466,963
Leisure Time - 1.1%
Qunar Cayman Islands Ltd. ADR*		6,893		273,652
Liberty TripAdvisor Holdings, Inc. — Class A*		5,900		130,744
Total Leisure Time				404,396
Aerospace & Defense - 0.9%
Harris Corp.		3,984		310,194
Total Common Stocks
(Cost $27,104,429)				35,914,820

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.3%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	105,190		105,190
Total Repurchase Agreement
(Cost $105,190)				105,190
Total Investments - 99.6%
(Cost $27,209,619)			$	36,020,010
Other Assets & Liabilities, net - 0.4%				147,696
Total Net Assets - 100.0%			$	36,167,706

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	35,914,820	$	—	$	—	$	35,914,820
Repurchase Agreement		—		105,190		—		105,190
Total	$	35,914,820	$	105,190	$	—	$	36,020,010

For the year ended March 31, 2016, there were no transfers between levels.

90 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INTERNET FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $27,104,429)	$	35,914,820
Repurchase agreements, at value (cost $105,190)		105,190
Total investments (cost $27,209,619)		36,020,010
Cash		144
Receivables:
Fund shares sold		1,785,211
Dividends		3,650
Foreign taxes reclaim		1,819
Total assets		37,810,834
Liabilities:
Payable for:
Securities purchased		1,555,499
Fund shares redeemed		40,359
Management fees		24,558
Transfer agent and administrative fees		7,223
Distribution and service fees		4,057
Portfolio accounting fees		2,889
Miscellaneous		8,543
Total liabilities		1,643,128
Commitments and contingent liabilities (Note 10)		—
Net assets	$	36,167,706
Net assets consist of:
Paid in capital	$	37,985,680
Accumulated net investment loss		(52,391	)
Accumulated net realized loss on investments		(10,575,974	)
Net unrealized appreciation on investments		8,810,391
Net assets	$	36,167,706
Investor Class:
Net assets	$	24,435,175
Capital shares outstanding		313,619
Net asset value per share	$	77.91
A-Class:
Net assets	$	1,802,822
Capital shares outstanding		24,514
Net asset value per share	$	73.54
Maximum offering price per share (Net asset value divided by 95.25%)	$	77.21
C-Class:
Net assets	$	2,797,728
Capital shares outstanding		42,078
Net asset value per share	$	66.49
H-Class:
Net assets	$	7,131,981
Capital shares outstanding		99,883
Net asset value per share	$	71.40

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $2,316)	$	293,626
Income from securities lending, net		6,671
Interest		198
Total investment income		300,495
Expenses:
Management fees		328,626
Transfer agent and administrative fees		96,654
Distribution and service fees:
A-Class		10,725
C-Class		28,144
H-Class**		33,821
Portfolio accounting fees		38,661
Custodian fees		4,505
Trustees’ fees*		2,397
Line of credit fees		57
Miscellaneous		49,498
Total expenses		593,088
Net investment loss		(292,593	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(8,402,113	)
Net realized loss		(8,402,113	)
Net change in unrealized appreciation (depreciation) on:
Investments		2,939,491
Net change in unrealized appreciation (depreciation)		2,939,491
Net realized and unrealized loss		(5,462,622	)
Net decrease in net assets resulting from operations	$	(5,755,215	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 91

INTERNET FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(292,593	)	$	(182,551	)
Net realized gain (loss) on investments		(8,402,113	)		3,805,670
Net change in unrealized appreciation (depreciation) on investments		2,939,491			(3,557,558	)
Net increase (decrease) in net assets resulting from operations		(5,755,215	)		65,561
Distributions to shareholders from:
Net realized gains
Investor Class		(131,247	)		(212,285	)
A-Class		(27,718	)		(66,053	)
C-Class		(14,060	)		(76,244	)
H-Class*		(57,824	)		(44,657	)
Total distributions to shareholders		(230,849	)		(399,239	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		97,142,398			43,138,842
A-Class		19,084,067			4,055,990
C-Class		7,825,210			11,747,458
H-Class*		181,150,735			94,544,871
Distributions reinvested
Investor Class		130,284			205,625
A-Class		27,197			53,517
C-Class		13,853			74,878
H-Class*		57,824			44,428
Cost of shares redeemed
Investor Class		(78,468,395	)		(61,299,428	)
A-Class		(19,052,730	)		(14,360,288	)
C-Class		(7,377,638	)		(14,064,904	)
H-Class*		(172,995,235	)		(105,054,927	)
Net increase (decrease) from capital share transactions		27,537,570			(40,913,938	)
Net increase (decrease) in net assets		21,551,506			(41,247,616	)
Net assets:
Beginning of year		14,616,200			55,863,816
End of year	$	36,167,706		$	14,616,200
Accumulated net investment loss at end of year	$	(52,391	)	$	—
Capital share activity:
Shares sold
Investor Class		1,219,475			568,304
A-Class		253,474			55,579
C-Class		114,412			177,866
H-Class*		2,463,941			1,359,702
Shares issued from reinvestment of distributions
Investor Class		1,607			2,672
A-Class		355			734
C-Class		199			1,124
H-Class*		777			626
Shares redeemed
Investor Class		(1,014,411	)		(821,508	)
A-Class		(256,742	)		(205,087	)
C-Class		(108,804	)		(213,643	)
H-Class*		(2,390,380	)		(1,504,575	)
Net increase (decrease) in shares		283,903			(578,206	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

92 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INTERNET 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	77.87		$	75.05		$	55.46		$	51.90		$	52.28
Income (loss) from investment operations:
Net investment income (loss)a		(.41	)		(.49	)		(.62	)		(.44	)		(.51	)
Net gain (loss) on investments (realized and unrealized)		.78			5.27			20.53			5.26			.13
Total from investment operations		.37			4.78			19.91			4.82			(.38	)
Less distributions from:
Net realized gains		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Total distributions		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Net asset value, end of period	$	77.91		$	77.87		$	75.05		$	55.46		$	51.90
Total Returnb		0.46	%		6.40	%		35.93	%		9.65	%		(0.73	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	24,435		$	8,328		$	26,828		$	6,109		$	6,206
Ratios to average net assets:
Net investment income (loss)		(0.52	%)		(0.64	%)		(0.87	%)		(0.87	%)		(1.05	%)
Total expenses		1.35	%		1.35	%		1.37	%		1.35	%		1.36	%
Portfolio turnover rate		520	%		495	%		472	%		442	%		380	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	73.71		$	71.32		$	52.85		$	49.63		$	50.13
Income (loss) from investment operations:
Net investment income (loss)a		(.69	)		(.61	)		(.79	)		(.52	)		(.64	)
Net gain (loss) on investments (realized and unrealized)		.85			4.96			19.58			5.00			.14
Total from investment operations		.16			4.35			18.79			4.48			(.50	)
Less distributions from:
Net realized gains		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Total distributions		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Net asset value, end of period	$	73.54		$	73.71		$	71.32		$	52.85		$	49.63
Total Returnb		0.20	%		6.12	%		35.58	%		9.41	%		(1.00	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,803		$	2,022		$	12,566		$	1,192		$	828
Ratios to average net assets:
Net investment income (loss)		(0.92	%)		(0.86	%)		(1.12	%)		(1.08	%)		(1.39	%)
Total expenses		1.60	%		1.61	%		1.62	%		1.60	%		1.61	%
Portfolio turnover rate		520	%		495	%		472	%		442	%		380	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 93

INTERNET 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	67.17		$	65.64		$	49.03		$	46.50		$	47.30
Income (loss) from investment operations:
Net investment income (loss)a		(1.03	)		(1.11	)		(1.16	)		(.85	)		(.94	)
Net gain (loss) on investments (realized and unrealized)		.68			4.60			18.09			4.64			.14
Total from investment operations		(.35	)		3.49			16.93			3.79			(.80	)
Less distributions from:
Net realized gains		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Total distributions		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Net asset value, end of period	$	66.49		$	67.17		$	65.64		$	49.03		$	46.50
Total Returnb		(0.54	%)		5.34	%		34.56	%		8.55	%		(1.69	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,798		$	2,436		$	4,655		$	1,111		$	643
Ratios to average net assets:
Net investment income (loss)		(1.53	%)		(1.68	%)		(1.85	%)		(1.91	%)		(2.17	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.36	%
Portfolio turnover rate		520	%		495	%		472	%		442	%		380	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	71.64		$	69.58		$	51.70		$	48.71		$	49.31
Income (loss) from investment operations:
Net investment income (loss)a		(.72	)		(.78	)		(1.07	)		(.64	)		(.71	)
Net gain (loss) on investments (realized and unrealized)		.81			4.80			19.27			4.89			.11
Total from investment operations		.09			4.02			18.20			4.25			(.60	)
Less distributions from:
Net realized gains		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Total distributions		(.33	)		(1.96	)		(.32	)		(1.26	)		—
Net asset value, end of period	$	71.40		$	71.64		$	69.58		$	51.70		$	48.71
Total Returnb		0.11	%		5.80	%		35.23	%		9.13	%		(1.24	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,132		$	1,830		$	11,814		$	552		$	719
Ratios to average net assets:
Net investment income (loss)		(0.97	%)		(1.12	%)		(1.53	%)		(1.36	%)		(1.58	%)
Total expenses		1.67	%		1.85	%		1.87	%		1.85	%		1.86	%
Portfolio turnover rate		520	%		495	%		472	%		442	%		380	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

94 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

LEISURE FUND

OBJECTIVE: Seeks to provide capital appreciation by investing in companies in leisure and entertainment businesses (“leisure companies”).

For the one-year period ended March 31, 2016, Leisure Fund Investor Class returned 1.72%, compared with 6.75% for the S&P 500 Consumer Discretionary Index. The broader S&P 500 Index returned 1.78%.

The tobacco industry was the largest contributor to return, followed by the software industry. The media industry was the largest detractor from return, followed by the automobiles segment.

Among the holdings that contributed the most to the Fund’s performance for the period were Philip Morris International, Inc., Reynolds American, Inc., and McDonald’s Corp. The Fund’s weakest holdings for the period were DISH Network Corp. — Class A, Viacom, Inc. — Class B, and Twenty-First Century Fox, Inc. — Class A.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	May 3, 2001
H-Class*	June 3, 1998

Ten Largest Holdings (% of Total Net Assets)
Walt Disney Co.	3.7%
Philip Morris International, Inc.	3.6%
Comcast Corp. — Class A	3.6%
Altria Group, Inc.	3.3%
McDonald’s Corp.	3.2%
Starbucks Corp.	2.8%
Reynolds American, Inc.	2.5%
Carnival Corp.	2.5%
Time Warner Cable, Inc.	2.2%
Time Warner, Inc.	2.2%
Top Ten Total	29.6%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 95

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	1.72%	13.63%	6.90%
A-Class Shares	1.45%	13.33%	6.63%
A-Class Shares with sales charge†	-3.38%	12.24%	6.11%
C-Class Shares	0.69%	12.51%	5.83%
C-Class Shares with CDSC‡	-0.31%	12.51%	5.83%
H-Class Shares**	1.41%	13.12%	6.40%
S&P 500 Consumer Discretionary Index	6.75%	17.13%	10.73%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Consumer Discretionary Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

96 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
LEISURE FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Media - 32.5%
Walt Disney Co.		14,209	$	1,411,096
Comcast Corp. — Class A		22,175		1,354,449
Time Warner Cable, Inc.		4,148		848,764
Time Warner, Inc.		11,584		840,419
Twenty-First Century Fox, Inc. — Class A		29,049		809,886
Thomson Reuters Corp.		15,148		613,191
CBS Corp. — Class B		10,225		563,295
Charter Communications, Inc. — Class A*		2,580		522,269
DISH Network Corp. — Class A*		10,776		498,498
Discovery Communications, Inc. — Class A*		15,863		454,158
Viacom, Inc. — Class B		10,642		439,302
Liberty Media Corp. — Class A*		10,210		394,412
Liberty Global plc*		10,039		377,065
Cablevision Systems Corp. — Class A		10,230		337,590
Scripps Networks Interactive, Inc. — Class A		5,024		329,072
News Corp. — Class A		23,543		300,644
Grupo Televisa SAB ADR		9,030		247,964
TEGNA, Inc.		10,539		247,245
AMC Networks, Inc. — Class A*		3,760		244,174
Tribune Media Co. — Class A		5,430		208,241
Sinclair Broadcast Group, Inc. — Class A		5,980		183,885
Starz — Class A*		6,597		173,699
Meredith Corp.		3,370		160,075
Media General, Inc.*		9,600		156,576
Gannett Company, Inc.		9,667		146,358
Time, Inc.		9,005		139,037
Nexstar Broadcasting Group, Inc. — Class A		2,820		124,842
MSG Networks, Inc. — Class A*		7,090		122,586
Total Media				12,248,792
Retail - 18.6%
McDonald’s Corp.		9,629		1,210,172
Starbucks Corp.		17,548		1,047,615
Yum! Brands, Inc.		7,971		652,425
Chipotle Mexican Grill, Inc. — Class A*		889		418,692
Darden Restaurants, Inc.		4,909		325,467
Domino’s Pizza, Inc.		2,094		276,115
Restaurant Brands International, Inc.		6,691		259,812
Dunkin’ Brands Group, Inc.		5,070		239,152
Panera Bread Co. — Class A*		1,158		237,193
Cracker Barrel Old Country Store, Inc.		1,330		203,051
Vista Outdoor, Inc.*		3,858		200,269
Texas Roadhouse, Inc. — Class A		4,564		198,899
Wendy’s Co.		17,913		195,073
Brinker International, Inc.		3,944		181,227
Cheesecake Factory, Inc.		3,380		179,444
Buffalo Wild Wings, Inc.*		1,197		177,300
Jack in the Box, Inc.		2,640		168,617
Papa John’s International, Inc.		2,940		159,319
Bloomin’ Brands, Inc.		9,204		155,271
Sonic Corp.		4,380		154,001
DineEquity, Inc.		1,510		141,079
Shake Shack, Inc. — Class A*		3,680		137,338
Red Robin Gourmet Burgers, Inc.*		1,570		101,218
Total Retail				7,018,749
Lodging - 10.8%
Las Vegas Sands Corp.		13,277		686,155
Hilton Worldwide Holdings, Inc.		24,050		541,605
Marriott International, Inc. — Class A		6,543		465,731
Starwood Hotels & Resorts Worldwide, Inc.		5,326		444,348
MGM Resorts International*		18,230		390,851
Wynn Resorts Ltd.		3,721		347,653
Wyndham Worldwide Corp.		4,201		321,082
Hyatt Hotels Corp. — Class A*		6,030		298,425
Melco Crown Entertainment Ltd. ADR		15,553		256,780
Boyd Gaming Corp.*		8,360		172,718
La Quinta Holdings, Inc.*		11,380		142,250
Total Lodging				4,067,598
Agriculture - 9.9%
Philip Morris International, Inc.		13,823		1,356,174
Altria Group, Inc.		19,741		1,236,970
Reynolds American, Inc.		18,818		946,734
Vector Group Ltd.		8,170		186,603
Total Agriculture				3,726,481
Beverages - 7.3%
Constellation Brands, Inc. — Class A		4,146		626,420
Molson Coors Brewing Co. — Class B		5,345		514,082
Brown-Forman Corp. — Class B		5,164		508,499
Anheuser-Busch InBev S.A. ADR		3,113		388,067
Ambev S.A. ADR		57,898		299,912
Diageo plc ADR		2,420		261,045
Boston Beer Company, Inc. — Class A*		860		159,160
Total Beverages				2,757,185
Leisure Time - 7.1%
Carnival Corp.		17,870		943,000
Royal Caribbean Cruises Ltd.		5,892		484,028
Norwegian Cruise Line Holdings Ltd.*		7,170		396,429
Harley-Davidson, Inc.		6,731		345,502
Polaris Industries, Inc.		2,840		279,683
Brunswick Corp.		4,875		233,903
Total Leisure Time				2,682,545
Entertainment - 5.6%
Six Flags Entertainment Corp.		4,650		258,029
Vail Resorts, Inc.		1,830		244,671
Cinemark Holdings, Inc.		6,296		225,586
Madison Square Garden Co. — Class A*		1,313		218,431
Regal Entertainment Group — Class A		9,580		202,521
Lions Gate Entertainment Corp.		8,977		196,147
Pinnacle Entertainment, Inc.*		4,856		170,446
DreamWorks Animation SKG, Inc. — Class A*		6,325		157,809

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 97

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
LEISURE FUND

	Shares		Value
SeaWorld Entertainment, Inc.		7,270	$	153,106
Marriott Vacations Worldwide Corp.		2,150		145,125
Penn National Gaming, Inc.*		8,040		134,188
Total Entertainment				2,106,059
Software - 3.4%
Activision Blizzard, Inc.		16,761		567,192
Electronic Arts, Inc.*		7,747		512,154
Take-Two Interactive Software, Inc.*		5,471		206,093
Total Software				1,285,439
Toys, Games & Hobbies – 1.9%
Mattel, Inc.		11,279		379,200
Hasbro, Inc.		4,512		361,411
Total Toys, Games & Hobbies				740,611
Commercial Services - 1.5%
Aramark		9,604		318,085
Live Nation Entertainment, Inc.*		10,472		233,630
Total Commercial Services				551,715
Electronics - 0.6%
IMAX Corp.*		7,320		227,579
Miscellaneous Manufacturing - 0.3%
Smith & Wesson Holding Corp.*		4,800		127,776
Total Common Stocks
(Cost $29,936,486)				37,540,529

	Face Amount
REPURCHASE AGREEMENT††,1 - 1.0%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	394,578		394,578
Total Repurchase Agreement
(Cost $394,578)				394,578
Total Investments - 100.5%
(Cost $30,331,064)			$	37,935,107
Other Assets & Liabilities, net - (0.5)%				(206,718	)
Total Net Assets - 100.0%			$	37,728,389

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	37,540,529	$	—	$	—	$	37,540,529
Repurchase Agreement		—		394,578		—		394,578
Total	$	37,540,529	$	394,578	$	—	$	37,935,107

For the year ended March 31, 2016, there were no transfers between levels.

98 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

LEISURE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $29,936,486)	$	37,540,529
Repurchase agreements, at value (cost $394,578)		394,578
Total investments (cost $30,331,064)		37,935,107
Receivables:
Dividends		65,989
Fund shares sold		38,815
Foreign taxes reclaim		3,881
Total assets		38,043,792
Liabilities:
Payable for:
Securities purchased		240,449
Management fees		25,791
Fund shares redeemed		25,120
Transfer agent and administrative fees		7,586
Distribution and service fees		5,570
Portfolio accounting fees		3,034
Miscellaneous		7,853
Total liabilities		315,403
Commitments and contingent liabilities (Note 10)		—
Net assets	$	37,728,389
Net assets consist of:
Paid in capital	$	35,330,883
Undistributed net investment income		131,755
Accumulated net realized loss on investments		(5,338,292	)
Net unrealized appreciation on investments		7,604,043
Net assets	$	37,728,389
Investor Class:
Net assets	$	15,173,316
Capital shares outstanding		247,272
Net asset value per share	$	61.36
A-Class:
Net assets	$	7,989,907
Capital shares outstanding		139,502
Net asset value per share	$	57.27
Maximum offering price per share (Net asset value divided by 95.25%)	$	60.13
C-Class:
Net assets	$	1,352,837
Capital shares outstanding		25,694
Net asset value per share	$	52.65
H-Class:
Net assets	$	13,212,329
Capital shares outstanding		236,573
Net asset value per share	$	55.85

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $9,193)	$	759,307
Income from securities lending, net		27,976
Interest		160
Total investment income		787,443
Expenses:
Management fees		374,990
Transfer agent and administrative fees		110,291
Distribution and service fees:
A-Class		25,357
C-Class		15,371
H-Class**		22,897
Portfolio accounting fees		44,116
Custodian fees		5,187
Trustees’ fees*		3,046
Line of credit fees		157
Miscellaneous		54,276
Total expenses		655,688
Net investment income		131,755
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(3,323,030	)
Net realized loss		(3,323,030	)
Net change in unrealized appreciation (depreciation) on:
Investments		84,303
Net change in unrealized appreciation (depreciation)		84,303
Net realized and unrealized loss		(3,238,727	)
Net decrease in net assets resulting from operations	$	(3,106,972	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 99

LEISURE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	131,755		$	285,529
Net realized gain (loss) on investments		(3,323,030	)		5,468,270
Net change in unrealized appreciation (depreciation) on investments		84,303			(1,903,716	)
Net increase (decrease) in net assets resulting from operations		(3,106,972	)		3,850,083
Distributions to shareholders from:
Net investment income
Investor Class		(136,576	)		(86,741	)
A-Class		(73,115	)		(3,222	)
C-Class		(10,686	)		(2,262	)
H-Class*		(65,152	)		(2,421	)
Net realized gains
Investor Class		(46,005	)		(819,251	)
A-Class		(24,629	)		(30,437	)
C-Class		(3,600	)		(21,361	)
H-Class*		(21,946	)		(22,866	)
Total distributions to shareholders		(381,709	)		(988,561	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		71,375,657			66,551,897
A-Class		23,772,534			16,562,062
C-Class		946,866			3,107,048
H-Class*		98,127,231			92,571,748
Distributions reinvested
Investor Class		178,912			233,102
A-Class		83,611			32,921
C-Class		13,503			22,369
H-Class*		87,017			25,054
Cost of shares redeemed
Investor Class		(102,869,164	)		(44,791,384	)
A-Class		(26,178,067	)		(7,989,563	)
C-Class		(1,158,823	)		(3,077,948	)
H-Class*		(91,022,759	)		(88,739,965	)
Net increase (decrease) from capital share transactions		(26,643,482	)		34,507,341
Net increase (decrease) in net assets		(30,132,163	)		37,368,863
Net assets:
Beginning of year		67,860,552			30,491,689
End of year	$	37,728,389		$	67,860,552
Undistributed net investment income at end of year	$	131,755		$	285,529

100 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

LEISURE FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
Investor Class		1,162,945			1,133,061
A-Class		421,600			301,170
C-Class		18,122			61,845
H-Class*		1,771,250			1,731,706
Shares issued from reinvestment of distributions
Investor Class		2,989			4,036
A-Class		1,495			608
C-Class		262			445
H-Class*		1,596			474
Shares redeemed
Investor Class		(1,716,917	)		(771,348	)
A-Class		(471,745	)		(147,523	)
C-Class		(22,844	)		(61,892	)
H-Class*		(1,663,736	)		(1,665,419	)
Net increase (decrease) in shares		(494,983	)		587,163

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 101

LEISURE 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	60.75		$	55.81		$	44.93		$	36.94		$	33.50
Income (loss) from investment operations:
Net investment income (loss)a		.22			.52			.20			.36			.17
Net gain (loss) on investments (realized and unrealized)		.82			5.64			10.95			7.66			3.27
Total from investment operations		1.04			6.16			11.15			8.02			3.44
Less distributions from:
Net investment income		(.32	)		(.12	)		(.27	)		(.03	)		—
Net realized gains		(.11	)		(1.10	)		—			—			—
Total distributions		(.43	)		(1.22	)		(.27	)		(.03	)		—
Net asset value, end of period	$	61.36		$	60.75		$	55.81		$	44.93		$	36.94
Total Returnb		1.72	%		11.15	%		24.83	%		21.74	%		10.27	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	15,173		$	48,494		$	24,139		$	22,005		$	12,687
Ratios to average net assets:
Net investment income (loss)		0.35	%		0.89	%		0.39	%		0.92	%		0.49	%
Total expenses		1.34	%		1.34	%		1.37	%		1.35	%		1.35	%
Portfolio turnover rate		339	%		343	%		265	%		517	%		797	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	56.88		$	52.46		$	42.35		$	34.91		$	31.75
Income (loss) from investment operations:
Net investment income (loss)a		.08			.38			.04			.29			.07
Net gain (loss) on investments (realized and unrealized)		.74			5.26			10.34			7.18			3.09
Total from investment operations		.82			5.64			10.38			7.47			3.16
Less distributions from:
Net investment income		(.32	)		(.12	)		(.27	)		(.03	)		—
Net realized gains		(.11	)		(1.10	)		—			—			—
Total distributions		(.43	)		(1.22	)		(.27	)		(.03	)		—
Net asset value, end of period	$	57.27		$	56.88		$	52.46		$	42.35		$	34.91
Total Returnb		1.45	%		10.86	%		24.53	%		21.42	%		9.95	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,990		$	10,703		$	1,778		$	1,409		$	448
Ratios to average net assets:
Net investment income (loss)		0.15	%		0.69	%		0.09	%		0.80	%		0.23	%
Total expenses		1.60	%		1.58	%		1.62	%		1.60	%		1.60	%
Portfolio turnover rate		339	%		343	%		265	%		517	%		797	%

102 | THE RYDEX FUNDS 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	52.72		$	49.07		$	39.92		$	33.16		$	30.36
Income (loss) from investment operations:
Net investment income (loss)a		(.28	)		(.19	)		(.27	)		.01			(.15	)
Net gain (loss) on investments (realized and unrealized)		.64			5.06			9.69			6.78			2.95
Total from investment operations		.36			4.87			9.42			6.79			2.80
Less distributions from:
Net investment income		(.32	)		(.12	)		(.27	)		(.03	)		—
Net realized gains		(.11	)		(1.10	)		—			—			—
Total distributions		(.43	)		(1.22	)		(.27	)		(.03	)		—
Net asset value, end of period	$	52.65		$	52.72		$	49.07		$	39.92		$	33.16
Total Returnb		0.69	%		10.04	%		23.61	%		20.54	%		9.19	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,353		$	1,590		$	1,460		$	928		$	1,345
Ratios to average net assets:
Net investment income (loss)		(0.54	%)		(0.37	%)		(0.59	%)		0.03	%		(0.50	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.35	%
Portfolio turnover rate		339	%		343	%		265	%		517	%		797	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	55.50		$	51.31		$	41.54		$	34.33		$	31.29
Income (loss) from investment operations:
Net investment income (loss)a		.27			.30			(.11	)		.29			(.01	)
Net gain (loss) on investments (realized and unrealized)		.51			5.11			10.15			6.95			3.05
Total from investment operations		.78			5.41			10.04			7.24			3.04
Less distributions from:
Net investment income		(.32	)		(.12	)		(.27	)		(.03	)		—
Net realized gains		(.11	)		(1.10	)		—			—			—
Total distributions		(.43	)		(1.22	)		(.27	)		(.03	)		—
Net asset value, end of period	$	55.85		$	55.50		$	51.31		$	41.54		$	34.33
Total Returnb		1.41	%		10.66	%		24.18	%		21.12	%		9.72	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,212		$	7,074		$	3,115		$	1,241		$	1,379
Ratios to average net assets:
Net investment income (loss)		0.49	%		0.55	%		(0.23	%)		0.80	%		(0.03	%)
Total expenses		1.64	%		1.83	%		1.87	%		1.85	%		1.86	%
Portfolio turnover rate		339	%		343	%		265	%		517	%		797	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 103

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Precious Metals Fund Investor Class returned 9.67%, compared with -6.00% for the S&P 500 Materials Index. The broader S&P 500 Index returned 1.78%.

The gold mining industry was the main contributor to return, followed by the silver mining segment. The diversified metals & mining industry detracted the most from return, followed by the precious metals & minerals segment.

The leading contributors to return were Sibanye Gold Ltd. ADR, Barrick Gold Corp., and Newmont Mining Corp. The leading detractors were Goldcorp. Inc., Freeport-McMoRan, Inc., and Royal Gold, Inc.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 27, 2001
H-Class*	August 1, 2003

Ten Largest Holdings (% of Total Net Assets)
Barrick Gold Corp.	6.6%
Newmont Mining Corp.	6.4%
Goldcorp, Inc.	6.2%
Franco-Nevada Corp.	5.4%
Randgold Resources Ltd. ADR	5.0%
Agnico Eagle Mines Ltd.	4.7%
Silver Wheaton Corp.	4.3%
AngloGold Ashanti Ltd. ADR	4.2%
Market Vectors Junior Gold Miners ETF	4.2%
Kinross Gold Corp.	3.7%
Top Ten Total	50.7%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

104 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

 

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	9.67%	-19.36%	-5.90%
A-Class Shares	9.38%	-19.57%	-6.14%
A-Class Shares with sales charge†	4.19%	-20.35%	-6.60%
C-Class Shares	8.66%	-20.15%	-6.84%
C-Class Shares with CDSC‡	7.66%	-20.15%	-6.84%
H-Class Shares**	9.17%	-19.74%	-6.36%
S&P 500 Materials Index	-6.00%	4.82%	5.85%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Materials Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 105

SCHEDULE OF INVESTMENTS	March 31, 2016
PRECIOUS METALS FUND

	Shares		Value
COMMON STOCKS† - 95.1%
Mining - 95.1%
Barrick Gold Corp.		304,168	$	4,130,602
Newmont Mining Corp.		150,289		3,994,683
Goldcorp, Inc.		239,257		3,883,141
Franco-Nevada Corp.		55,165		3,386,028
Randgold Resources Ltd. ADR		34,166		3,102,614
Agnico Eagle Mines Ltd.		81,239		2,937,602
Silver Wheaton Corp.		162,886		2,700,650
AngloGold Ashanti Ltd. ADR*		193,089		2,643,388
Kinross Gold Corp.*		672,524		2,286,582
Sibanye Gold Ltd. ADR		133,365		2,023,147
Royal Gold, Inc.		38,269		1,962,817
Freeport-McMoRan, Inc.		186,861		1,932,143
Gold Fields Ltd. ADR		487,687		1,921,487
Yamana Gold, Inc.		598,085		1,818,178
Cia de Minas Buenaventura S.A.A. ADR*		214,412		1,578,072
Eldorado Gold Corp.		495,993		1,567,338
Tahoe Resources, Inc.		151,533		1,519,876
New Gold, Inc.*		383,669		1,431,085
Pan American Silver Corp.		130,715		1,420,872
Novagold Resources, Inc.*		264,851		1,334,849
Harmony Gold Mining Company Ltd. ADR*		354,300		1,289,652
Alamos Gold, Inc. — Class A		235,225		1,244,340
Stillwater Mining Co.*		112,817		1,201,501
Hecla Mining Co.		388,644		1,080,430
Pretium Resources, Inc.*		197,927		1,058,909
First Majestic Silver Corp.*		162,713		1,054,380
IAMGOLD Corp.*		457,164		1,010,332
Coeur Mining, Inc.*		173,175		973,244
Seabridge Gold, Inc.*		76,099		834,045
Sandstorm Gold Ltd.*		224,045		737,108
Silver Standard Resources, Inc.*		127,564		707,980
Primero Mining Corp.*		314,667		569,547
AuRico Metals, Inc.*		5		3
Total Mining				59,336,625
Total Common Stocks
(Cost $37,184,517)				59,336,625
EXCHANGE-TRADED FUNDS - 4.2%
Market Vectors Junior Gold Miners ETF		94,203		2,623,554
Total Exchange-Traded Funds
(Cost $2,012,186)				2,623,554

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.6%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	396,314		396,314
Total Repurchase Agreement
(Cost $396,314)				396,314
Total Investments - 99.9%
(Cost $39,593,017)			$	62,356,493
Other Assets & Liabilities, net - 0.1%				56,216
Total Net Assets - 100.0%			$	62,412,709

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	59,336,625	$	—	$	—	$	59,336,625
Exchange-Traded Funds		2,623,554		—		—		2,623,554
Repurchase Agreement		—		396,314		—		396,314
Total	$	61,960,179	$	396,314	$	—	$	62,356,493

For the year ended March 31, 2016, there were no transfers between levels.

106 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PRECIOUS METALS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $39,196,703)	$	61,960,179
Repurchase agreements, at value (cost $396,314)		396,314
Total investments (cost $39,593,017)		62,356,493
Cash		11,895
Receivables:
Securities sold		985,156
Fund shares sold		745,614
Dividends		69,657
Total assets		64,168,815
Liabilities:
Payable for:
Fund shares redeemed		1,682,596
Management fees		37,156
Transfer agent and administrative fees		12,385
Distribution and service fees		6,819
Portfolio accounting fees		4,954
Miscellaneous		12,196
Total liabilities		1,756,106
Commitments and contingent liabilities (Note 10)		—
Net assets	$	62,412,709
Net assets consist of:
Paid in capital	$	101,525,555
Undistributed net investment income		75,723
Accumulated net realized loss on investments		(61,952,045	)
Net unrealized appreciation on investments		22,763,476
Net assets	$	62,412,709
Investor Class:
Net assets	$	49,321,041
Capital shares outstanding		1,801,959
Net asset value per share	$	27.37
A-Class:
Net assets	$	3,710,963
Capital shares outstanding		140,630
Net asset value per share	$	26.39
Maximum offering price per share (Net asset value divided by 95.25%)	$	27.71
C-Class:
Net assets	$	6,825,140
Capital shares outstanding		291,904
Net asset value per share	$	23.38
H-Class:
Net assets	$	2,555,565
Capital shares outstanding		99,656
Net asset value per share	$	25.64

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $38,588)	$	363,210
Income from securities lending, net		10,026
Interest		229
Total investment income		373,465
Expenses:
Management fees		296,433
Transfer agent and administrative fees		98,811
Distribution and service fees:
A-Class		6,982
C-Class		47,546
H-Class**		10,941
Portfolio accounting fees		39,524
Custodian fees		4,603
Trustees’ fees*		2,704
Line of credit fees		144
Miscellaneous		49,810
Total expenses		557,498
Net investment loss		(184,033	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(7,581,988	)
Net realized loss		(7,581,988	)
Net change in unrealized appreciation (depreciation) on:
Investments		12,729,730
Net change in unrealized appreciation (depreciation)		12,729,730
Net realized and unrealized gain		5,147,742
Net increase in net assets resulting from operations	$	4,963,709

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 107

PRECIOUS METALS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(184,033	)	$	(100,247	)
Net realized loss on investments		(7,581,988	)		(4,218,185	)
Net change in unrealized appreciation (depreciation) on investments		12,729,730			(12,927,536	)
Net increase (decrease) in net assets resulting from operations		4,963,709			(17,245,968	)
Distributions to shareholders from:
Net investment income
Investor Class		(126,920	)		(942,983	)
A-Class		(12,863	)		(81,766	)
C-Class		(26,376	)		(226,581	)
H-Class*		(17,754	)		(77,995	)
Total distributions to shareholders		(183,913	)		(1,329,325	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		253,246,357			228,681,951
A-Class		32,975,820			34,559,485
C-Class		11,345,908			19,812,912
H-Class*		219,344,787			81,461,920
Distributions reinvested
Investor Class		121,222			884,145
A-Class		9,017			67,165
C-Class		26,086			219,239
H-Class*		17,751			77,943
Cost of shares redeemed
Investor Class		(238,675,293	)		(228,926,568	)
A-Class		(34,545,272	)		(33,136,533	)
C-Class		(10,512,858	)		(20,795,740	)
H-Class*		(225,166,382	)		(76,224,107	)
Net increase from capital share transactions		8,187,143			6,681,812
Net increase (decrease) in net assets		12,966,939			(11,893,481	)
Net assets:
Beginning of year		49,445,770			61,339,251
End of year	$	62,412,709		$	49,445,770
Undistributed net investment income/(Accumulated net investment loss) at end of year	$	75,723		$	(249,582	)
Capital share activity:
Shares sold
Investor Class		11,832,927			7,016,300
A-Class		1,496,099			1,168,449
C-Class		599,391			697,217
H-Class*		10,896,192			2,837,152
Shares issued from reinvestment of distributions
Investor Class		6,994			30,498
A-Class		540			2,392
C-Class		1,755			8,684
H-Class*		1,092			2,851
Shares redeemed
Investor Class		(11,253,817	)		(7,028,380	)
A-Class		(1,558,936	)		(1,118,576	)
C-Class		(567,160	)		(743,130	)
H-Class*		(11,153,001	)		(2,602,821	)
Net increase in shares		302,076			270,636

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

108 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	25.11		$	35.78		$	51.65		$	65.73		$	86.74
Income (loss) from investment operations:
Net investment income (loss)a		(.07	)		.01			.36			.34			(.02	)
Net gain (loss) on investments (realized and unrealized)		2.44			(9.88	)		(16.06	)		(12.12	)		(20.70	)
Total from investment operations		2.37			(9.87	)		(15.70	)		(11.78	)		(20.72	)
Less distributions from:
Net investment income		(.11	)		(.80	)		(.17	)		(.10	)		(.29	)
Net realized gains		—			—			—			(2.20	)		—
Total distributions		(.11	)		(.80	)		(.17	)		(2.30	)		(.29	)
Net asset value, end of period	$	27.37		$	25.11		$	35.78		$	51.65		$	65.73
Total Returnb		9.67	%		(27.88	%)		(30.37	%)		(18.60	%)		(23.91	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	49,321		$	30,528		$	42,846		$	71,386		$	79,637
Ratios to average net assets:
Net investment income (loss)		(0.31	%)		0.04	%		0.96	%		0.55	%		(0.03	%)
Total expensesc		1.25	%		1.25	%		1.27	%		1.25	%		1.26	%
Portfolio turnover rate		797	%		371	%		348	%		206	%		235	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	24.28		$	34.75		$	50.28		$	64.21		$	84.97
Income (loss) from investment operations:
Net investment income (loss)a		(.12	)		(.10	)		.16			.21			(.22	)
Net gain (loss) on investments (realized and unrealized)		2.34			(9.57	)		(15.52	)		(11.84	)		(20.25	)
Total from investment operations		2.22			(9.67	)		(15.36	)		(11.63	)		(20.47	)
Less distributions from:
Net investment income		(.11	)		(.80	)		(.17	)		(.10	)		(.29	)
Net realized gains		—			—			—			(2.20	)		—
Total distributions		(.11	)		(.80	)		(.17	)		(2.30	)		(.29	)
Net asset value, end of period	$	26.39		$	24.28		$	34.75		$	50.28		$	64.21
Total Returnb		9.38	%		(28.13	%)		(30.52	%)		(18.80	%)		(24.13	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,711		$	4,928		$	5,235		$	5,988		$	6,412
Ratios to average net assets:
Net investment income (loss)		(0.54	%)		(0.29	%)		0.45	%		0.35	%		(0.30	%)
Total expensesc		1.50	%		1.50	%		1.52	%		1.50	%		1.51	%
Portfolio turnover rate		797	%		371	%		348	%		206	%		235	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 109

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	21.67		$	31.34		$	45.72		$	59.02		$	78.70
Income (loss) from investment operations:
Net investment income (loss)a		(.26	)		(.29	)		(.07	)		(.23	)		(.72	)
Net gain (loss) on investments (realized and unrealized)		2.08			(8.58	)		(14.14	)		(10.77	)		(18.67	)
Total from investment operations		1.82			(8.87	)		(14.21	)		(11.00	)		(19.39	)
Less distributions from:
Net investment income		(.11	)		(.80	)		(.17	)		(.10	)		(.29	)
Net realized gains		—			—			—			(2.20	)		—
Total distributions		(.11	)		(.80	)		(.17	)		(2.30	)		(.29	)
Net asset value, end of period	$	23.38		$	21.67		$	31.34		$	45.72		$	59.02
Total Returnb		8.66	%		(28.64	%)		(31.05	%)		(19.39	%)		(24.68	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,825		$	5,590		$	9,250		$	18,608		$	26,533
Ratios to average net assets:
Net investment income (loss)		(1.34	%)		(0.99	%)		(0.22	%)		(0.42	%)		(1.04	%)
Total expensesc		2.25	%		2.25	%		2.27	%		2.25	%		2.26	%
Portfolio turnover rate		797	%		371	%		348	%		206	%		235	%

H-Classd	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.64		$	33.92		$	49.20		$	63.02		$	83.59
Income (loss) from investment operations:
Net investment income (loss)a		(.11	)		(.14	)		.12			(.02	)		(.44	)
Net gain (loss) on investments (realized and unrealized)		2.22			(9.34	)		(15.23	)		(11.50	)		(19.84	)
Total from investment operations		2.11			(9.48	)		(15.11	)		(11.52	)		(20.28	)
Less distributions from:
Net investment income		(.11	)		(.80	)		(.17	)		(.10	)		(.29	)
Net realized gains		—			—			—			(2.20	)		—
Total distributions		(.11	)		(.80	)		(.17	)		(2.30	)		(.29	)
Net asset value, end of period	$	25.64		$	23.64		$	33.92		$	49.20		$	63.02
Total Returnb		9.17	%		(28.24	%)		(30.71	%)		(18.99	%)		(24.29	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,556		$	8,400		$	4,009		$	3,148		$	9,610
Ratios to average net assets:
Net investment income (loss)		(0.53	%)		(0.45	%)		0.34	%		(0.04	%)		(0.59	%)
Total expensesc		1.59	%		1.75	%		1.77	%		1.75	%		1.76	%
Portfolio turnover rate		797	%		371	%		348	%		206	%		235	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

110 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Real Estate Fund H-Class returned -1.49%, compared to a return of 4.05% for the MSCI U.S. REIT Index. The broader S&P 500 Index returned 1.78%.

Specialized REITs contributed the most to the performance of the Fund, followed by residential REITs. Hotel & resorts REITs detracted the most from performance, followed by mortgage REITs.

The strongest performing holdings included Public Storage, Altisource Portfolio Solutions S.A., and Digital Realty Trust, Inc. The main detractors were NorthStar Realty Finance Corp., HCP, Inc., and CBRE Group, Inc. — Class A.

Performance displayed represents past performance, which is no guarantee of future results.

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.	2.3%
Public Storage	2.0%
American Tower Corp. — Class A	1.9%
Crown Castle International Corp.	1.6%
Equity Residential	1.5%
General Growth Properties, Inc.	1.4%
Welltower, Inc.	1.4%
Weyerhaeuser Co.	1.4%
AvalonBay Communities, Inc.	1.4%
Equinix, Inc.	1.4%
Top Ten Total	16.3%
“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 111

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-1.46%	7.25%	2.29%
A-Class Shares with sales charge†	-6.14%	6.21%	1.79%
C--Class Shares	-2.25%	6.42%	1.49%
C-Class Shares with CDSC‡	-3.21%	6.42%	1.49%
H-Class Shares	-1.49%	7.22%	2.26%
MSCI U.S. REIT Index	4.05%	11.85%	6.49%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the MSCI U.S. REIT Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

112 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
REAL ESTATE FUND

	Shares		Value
COMMON STOCKS† - 99.5%
REITs - 92.9%
REITs-Diversified - 20.8%
American Tower Corp. — Class A		8,393	$	859,190
Crown Castle International Corp.		8,195		708,867
Weyerhaeuser Co.		21,140		654,917
Equinix, Inc.		1,954		646,207
Vornado Realty Trust		5,718		539,951
Digital Realty Trust, Inc.		5,210		461,033
Duke Realty Corp.		16,202		365,193
WP Carey, Inc.		5,290		329,250
Lamar Advertising Co. — Class A		5,153		316,910
Forest City Realty Trust, Inc. — Class A		13,965		294,522
Liberty Property Trust		8,645		289,262
EPR Properties		3,988		265,681
Corrections Corporation of America		7,876		252,426
Retail Properties of America, Inc. — Class A		15,861		251,397
STORE Capital Corp.		9,647		249,664
Communications Sales & Leasing, Inc.		10,935		243,304
Rayonier, Inc.		9,458		233,423
Outfront Media, Inc.		10,742		226,656
PS Business Parks, Inc.		2,183		219,413
DuPont Fabros Technology, Inc.		5,282		214,079
New Residential Investment Corp. REIT		18,287		212,678
GEO Group, Inc.		5,937		205,836
NorthStar Realty Finance Corp.		15,647		205,289
CoreSite Realty Corp.		2,839		198,758
Cousins Properties, Inc.		18,777		194,905
Washington Real Estate Investment Trust		6,296		183,906
Lexington Realty Trust		21,238		182,647
American Assets Trust, Inc.		4,381		174,890
STAG Industrial, Inc.		7,780		158,401
Potlatch Corp.		4,710		148,365
Total REITs-Diversified				9,487,020
REITs-Office Property - 11.4%
Boston Properties, Inc.		4,440		564,235
SL Green Realty Corp.		4,112		398,371
VEREIT, Inc.		42,856		380,133
Alexandria Real Estate Equities, Inc.		3,661		332,748
Kilroy Realty Corp.		4,944		305,885
Highwoods Properties, Inc.		5,812		277,872
Douglas Emmett, Inc.		9,162		275,868
Equity Commonwealth*		8,764		247,320
Gramercy Property Trust		28,922		244,391
Paramount Group, Inc.		14,796		235,996
Piedmont Office Realty Trust, Inc. — Class A		11,098		225,400
Columbia Property Trust, Inc.		9,822		215,986
Brandywine Realty Trust		14,800		207,644
Hudson Pacific Properties, Inc.		7,149		206,749
Corporate Office Properties Trust		7,872		206,561
Empire State Realty Trust, Inc. — Class A		10,998		192,795
Mack-Cali Realty Corp.		8,018		188,423
Parkway Properties, Inc.		11,138		174,421
New York REIT, Inc.		16,639		168,054
Government Properties Income Trust		8,400		149,940
Total REITs-Office Property				5,198,792
REITs-Apartments - 10.3%
Equity Residential		9,144		686,074
AvalonBay Communities, Inc.		3,436		653,527
Essex Property Trust, Inc.		2,249		525,951
UDR, Inc.		10,913		420,478
Mid-America Apartment Communities, Inc.		3,461		353,749
Camden Property Trust		4,161		349,898
Apartment Investment & Management Co. — Class A		8,075		337,697
American Campus Communities, Inc.		6,855		322,802
American Homes 4 Rent — Class A		16,359		260,108
Post Properties, Inc.		3,809		227,550
Education Realty Trust, Inc.		5,017		208,707
Colony Starwood Homes		8,257		204,361
Monogram Residential Trust, Inc.		16,826		165,904
Total REITs-Apartments				4,716,806
REITs-Health Care - 9.0%
Welltower, Inc.		9,447		655,055
Ventas, Inc.		9,628		606,179
HCP, Inc.		15,526		505,837
Omega Healthcare Investors, Inc.		9,544		336,903
Senior Housing Properties Trust		15,150		271,034
Healthcare Trust of America, Inc. — Class A		8,805		259,043
Healthcare Realty Trust, Inc.		7,641		236,030
Medical Properties Trust, Inc.		17,710		229,876
National Health Investors, Inc.		3,086		205,281
Care Capital Properties, Inc.		7,643		205,138
Physicians Realty Trust		10,072		187,138
LTC Properties, Inc.		3,716		168,112
Sabra Health Care REIT, Inc.		7,369		148,043
New Senior Investment Group, Inc.		11,610		119,583
Total REITs-Health Care				4,133,252
REITs-Shopping Centers - 7.5%
Kimco Realty Corp.		15,509		446,348
Federal Realty Investment Trust		2,775		433,039
Brixmor Property Group, Inc.		14,361		367,929
Regency Centers Corp.		4,536		339,520
DDR Corp.		19,061		339,095
Weingarten Realty Investors		7,544		283,051
Equity One, Inc.		9,139		261,924
Urban Edge Properties		8,122		209,872
Acadia Realty Trust		5,730		201,295
Kite Realty Group Trust		7,142		197,905
Retail Opportunity Investments Corp.		9,372		188,565
Ramco-Gershenson Properties Trust		8,790		158,484
Total REITs-Shopping Centers				3,427,027

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 113

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
REAL ESTATE FUND

	Shares		Value
REITs-Mortgage - 7.0%
Annaly Capital Management, Inc.		39,171	$	401,893
American Capital Agency Corp. REIT		17,401		324,181
Starwood Property Trust, Inc.		14,511		274,693
Two Harbors Investment Corp.		27,431		217,802
Blackstone Mortgage Trust, Inc. — Class A		7,762		208,487
MFA Financial, Inc.		30,407		208,288
Chimera Investment Corp.		15,137		205,712
Colony Capital, Inc. — Class A		10,671		178,953
Invesco Mortgage Capital, Inc. REIT		12,402		151,056
Hatteras Financial Corp. REIT		10,469		149,707
CYS Investments, Inc.		17,775		144,689
Apollo Commercial Real Estate Finance, Inc.		8,310		135,453
Redwood Trust, Inc.		10,351		135,391
PennyMac Mortgage Investment Trust		9,462		129,062
Capstead Mortgage Corp.		12,847		127,057
ARMOUR Residential REIT, Inc.		5,350		115,186
iStar, Inc.*		11,212		108,308
Total REITs-Mortgage				3,215,918
REITs-Regional Malls - 6.9%
Simon Property Group, Inc.		5,003		1,039,073
General Growth Properties, Inc.		22,142		658,282
Macerich Co.		5,518		437,246
Taubman Centers, Inc.		3,763		268,038
Tanger Factory Outlet Centers, Inc.		6,716		244,395
CBL & Associates Properties, Inc.		14,994		178,429
WP GLIMCHER, Inc.		18,196		172,680
Pennsylvania Real Estate Investment Trust		7,327		160,095
Total REITs-Regional Malls				3,158,238
REITs-Hotels - 6.8%
Host Hotels & Resorts, Inc.		27,843		464,977
Hospitality Properties Trust		10,041		266,689
Apple Hospitality REIT, Inc.		12,268		243,029
Sunstone Hotel Investors, Inc.		16,480		230,720
RLJ Lodging Trust		9,731		222,645
LaSalle Hotel Properties		8,651		218,957
Ryman Hospitality Properties, Inc.		3,981		204,942
Pebblebrook Hotel Trust		6,709		195,031
DiamondRock Hospitality Co.		18,832		190,580
Xenia Hotels & Resorts, Inc.		11,156		174,257
Chesapeake Lodging Trust		6,265		165,772
FelCor Lodging Trust, Inc.		17,325		140,679
Summit Hotel Properties, Inc.		11,321		135,512
Hersha Hospitality Trust		5,789		123,537
Ashford Hospitality Trust, Inc.		16,891		107,765
Total REITs-Hotels				3,085,092
REITs-Storage - 5.0%
Public Storage		3,239		893,413
Extra Space Storage, Inc.		4,707		439,916
Iron Mountain, Inc.		10,405		352,834
CubeSmart		9,586		319,214
Sovran Self Storage, Inc.		2,428		286,383
Total REITs-Storage				2,291,760
REITs-Warehouse/Industries - 4.0%
Prologis, Inc.		14,488		640,080
CyrusOne, Inc.		5,370		245,141
DCT Industrial Trust, Inc.		6,047		238,675
First Industrial Realty Trust, Inc.		9,163		208,367
EastGroup Properties, Inc.		2,989		180,446
QTS Realty Trust, Inc. — Class A		3,801		180,091
Rexford Industrial Realty, Inc.		7,178		130,352
Total REITs-Warehouse/Industries				1,823,152
REITs-Single Tenant - 2.9%
Realty Income Corp.		8,312		519,583
National Retail Properties, Inc.		7,261		335,458
Spirit Realty Capital, Inc.		26,103		293,659
Select Income REIT		8,195		188,895
Total REITs-Single Tenant				1,337,595
REITs-Manufactured Homes - 1.3%
Equity LifeStyle Properties, Inc.		4,392		319,430
Sun Communities, Inc.		3,672		262,952
Total REITs-Manufactured Homes				582,382
Total REITs				42,457,034
Real Estate - 5.4%
Real Estate Management/Services - 3.5%
CBRE Group, Inc. — Class A*		14,248		410,627
Realogy Holdings Corp.*		8,587		310,077
Jones Lang LaSalle, Inc.		2,603		305,384
Altisource Residential Corp.		18,668		224,016
Kennedy-Wilson Holdings, Inc.		9,518		208,444
Four Corners Property Trust, Inc.		7,614		136,671
Total Real Estate Management/Services				1,595,219
Real Estate Operations/Development - 1.9%
Brookfield Asset Management, Inc. — Class A		8,190		284,930
Howard Hughes Corp.*		2,482		262,819
Alexander & Baldwin, Inc.		4,589		168,325
St. Joe Co.*		8,623		147,884
Total Real Estate Operations/Development				863,958
Total Real Estate				2,459,177

114 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
REAL ESTATE FUND

	Shares		Value
Diversified Financial Services - 0.6%
Investment Management/Advisory Services - 0.6%
Altisource Portfolio Solutions S.A.*		10,457	$	252,537
Entertainment - 0.6%
Casino Services - 0.6%
Gaming and Leisure Properties, Inc.		8,143		251,782
Total Common Stocks
(Cost $38,897,340)				45,420,530

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.1%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	48,322		48,322
Total Repurchase Agreement
(Cost $48,322)				48,322
Total Investments - 99.6%
(Cost $38,945,662)			$	45,468,852
Other Assets & Liabilities, net - 0.4%				205,363
Total Net Assets - 100.0%			$	45,674,215

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	45,420,530	$	—	$	—	$	45,420,530
Repurchase Agreement		—		48,322		—		48,322
Total	$	45,420,530	$	48,322	$	—	$	45,468,852

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 115

REAL ESTATE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $38,897,340)	$	45,420,530
Repurchase agreements, at value (cost $48,322)		48,322
Total investments (cost $38,945,662)		45,468,852
Cash		273
Receivables:
Fund shares sold		1,180,326
Dividends		231,131
Total assets		46,880,582
Liabilities:
Payable for:
Securities purchased		839,515
Fund shares redeemed		314,647
Management fees		27,619
Distribution and service fees		9,280
Transfer agent and administrative fees		8,123
Portfolio accounting fees		3,249
Miscellaneous		3,934
Total liabilities		1,206,367
Commitments and contingent liabilities (Note 10)		—
Net assets	$	45,674,215
Net assets consist of:
Paid in capital	$	57,222,703
Undistributed net investment income		396,278
Accumulated net realized loss on investments		(18,467,956	)
Net unrealized appreciation on investments		6,523,190
Net assets	$	45,674,215
A-Class:
Net assets	$	9,223,201
Capital shares outstanding		247,216
Net asset value per share	$	37.31
Maximum offering price per share (Net asset value divided by 95.25%)	$	39.17
C-Class:
Net assets	$	1,947,087
Capital shares outstanding		58,019
Net asset value per share	$	33.56
H-Class:
Net assets	$	34,503,927
Capital shares outstanding		927,185
Net asset value per share	$	37.21

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $490)	$	907,649
Income from securities lending, net		7,004
Interest		85
Total investment income		914,738
Expenses:
Management fees		221,491
Transfer agent and administrative fees		65,144
Distribution and service fees:
A-Class		13,436
C-Class		22,443
H-Class		46,097
Portfolio accounting fees		26,057
Tax expense		9,095
Custodian fees		3,016
Trustees’ fees*		1,992
Line of credit fees		382
Miscellaneous		29,576
Total expenses		438,729
Net investment income		476,009
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(225,778	)
Net realized loss		(225,778	)
Net change in unrealized appreciation (depreciation) on:
Investments		(1,899,319	)
Net change in unrealized appreciation (depreciation)		(1,899,319	)
Net realized and unrealized loss		(2,125,097	)
Net decrease in net assets resulting from operations	$	(1,649,088	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

116 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

REAL ESTATE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	476,009		$	544,927
Net realized loss on investments		(225,778	)		(1,017,396	)
Net change in unrealized appreciation (depreciation) on investments		(1,899,319	)		4,374,041
Net increase (decrease) in net assets resulting from operations		(1,649,088	)		3,901,572
Distributions to shareholders from:
Net investment income
A-Class		(72,600	)		(70,427	)
C-Class		(24,943	)		(29,231	)
H-Class		(335,675	)		(291,502	)
Total distributions to shareholders		(433,218	)		(391,160	)
Capital share transactions:
Proceeds from sale of shares
A-Class		37,206,021			33,310,377
C-Class		18,768,804			30,598,523
H-Class		281,436,754			323,711,905
Distributions reinvested
A-Class		66,044			55,690
C-Class		24,184			28,740
H-Class		335,273			288,471
Cost of shares redeemed
A-Class		(34,288,463	)		(32,058,111	)
C-Class		(19,545,538	)		(30,472,287	)
H-Class		(283,137,988	)		(308,456,378	)
Net increase from capital share transactions		865,091			17,006,930
Net increase (decrease) in net assets		(1,217,215	)		20,517,342
Net assets:
Beginning of year		46,891,430			26,374,088
End of year	$	45,674,215		$	46,891,430
Undistributed net investment income at end of year	$	396,278		$	344,392
Capital share activity:
Shares sold
A-Class		1,043,014			907,893
C-Class		581,211			928,450
H-Class		7,922,736			8,887,538
Shares issued from reinvestment of distributions
A-Class		1,903			1,534
C-Class		772			870
H-Class		9,684			7,964
Shares redeemed
A-Class		(962,786	)		(867,549	)
C-Class		(608,356	)		(926,436	)
H-Class		(7,988,853	)		(8,503,320	)
Net increase (decrease) in shares		(675	)		436,944

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 117

REAL ESTATE 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	38.34		$	33.47		$	34.43		$	30.27		$	29.06
Income (loss) from investment operations:
Net investment income (loss)a		.65			.42			.65			.58			.45
Net gain (loss) on investments (realized and unrealized)		(1.24	)		4.77			(.14	)		4.18			1.07
Total from investment operations		(.59	)		5.19			.51			4.76			1.52
Less distributions from:
Net investment income		(.44	)		(.32	)		(1.47	)		(.60	)		(.31	)
Total distributions		(.44	)		(.32	)		(1.47	)		(.60	)		(.31	)
Net asset value, end of period	$	37.31		$	38.34		$	33.47		$	34.43		$	30.27
Total Returnb		(1.46	%)		15.58	%		1.86	%		16.03	%		5.42	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,223		$	6,329		$	4,124		$	12,495		$	2,364
Ratios to average net assets:
Net investment income (loss)		1.82	%		1.13	%		1.92	%		1.82	%		1.59	%
Total expenses		1.62	%		1.60	%		1.65	%		1.61	%		1.61	%
Portfolio turnover rate		880	%		599	%		788	%		699	%		974	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	34.81		$	30.64		$	31.89		$	28.29		$	27.41
Income (loss) from investment operations:
Net investment income (loss)a		.22			.23			.29			.27			.22
Net gain (loss) on investments (realized and unrealized)		(1.03	)		4.26			(.07	)		3.93			.97
Total from investment operations		(.81	)		4.49			.22			4.20			1.19
Less distributions from:
Net investment income		(.44	)		(.32	)		(1.47	)		(.60	)		(.31	)
Total distributions		(.44	)		(.32	)		(1.47	)		(.60	)		(.31	)
Net asset value, end of period	$	33.56		$	34.81		$	30.64		$	31.89		$	28.29
Total Returnb		(2.25	%)		14.73	%		1.09	%		15.12	%		4.57	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,947		$	2,937		$	2,497		$	2,910		$	1,798
Ratios to average net assets:
Net investment income (loss)		0.69	%		0.70	%		0.93	%		0.92	%		0.83	%
Total expenses		2.36	%		2.35	%		2.38	%		2.35	%		2.36	%
Portfolio turnover rate		880	%		599	%		788	%		699	%		974	%

118 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

REAL ESTATE 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	38.25		$	33.40		$	34.38		$	30.23		$	29.02
Income (loss) from investment operations:
Net investment income (loss)a		.71			.48			.52			.46			.42
Net gain (loss) on investments (realized and unrealized)		(1.31	)		4.69			(.03	)		4.29			1.10
Total from investment operations		(.60	)		5.17			.49			4.75			1.52
Less distributions from:
Net investment income		(.44	)		(.32	)		(1.47	)		(.60	)		(.31	)
Total distributions		(.44	)		(.32	)		(1.47	)		(.60	)		(.31	)
Net asset value, end of period	$	37.21		$	38.25		$	33.40		$	34.38		$	30.23
Total Returnb		(1.49	%)		15.55	%		1.84	%		15.95	%		5.42	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	34,504		$	37,625		$	19,753		$	10,273		$	13,511
Ratios to average net assets:
Net investment income (loss)		1.97	%		1.32	%		1.52	%		1.45	%		1.48	%
Total expenses		1.62	%		1.60	%		1.64	%		1.60	%		1.61	%
Portfolio turnover rate		880	%		599	%		788	%		699	%		974	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 119

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Retailing Fund Investor Class returned -4.01%, compared with 6.75% for the S&P 500 Consumer Discretionary Index. The broader S&P 500 Index returned 1.78%.

The internet & catalog retail industry contributed the most to Fund performance, followed by the distributors segment. The specialty retail industry was the leading detractor from return, followed by the multiline retail industry.

Fund performance for the period benefited the most from Amazon.com, Inc., Netflix, Inc., and Ctrip.com International Ltd. ADR. Vipshop Holdings Ltd. ADR, Jumei International Holding Ltd. ADR, and Sears Holdings Corp. were the largest detractors from the Fund’s performance for the period.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	May 9, 2001
H-Class*	April 21, 1998

Ten Largest Holdings (% of Total Net Assets)
Amazon.com, Inc.	5.9%
Wal-Mart Stores, Inc.	4.8%
Home Depot, Inc.	4.2%
CVS Health Corp.	3.5%
Walgreens Boots Alliance, Inc.	3.0%
Costco Wholesale Corp.	2.7%
Lowe’s Companies, Inc.	2.7%
Priceline Group, Inc.	2.6%
TJX Companies, Inc.	2.3%
Target Corp.	2.2%
Top Ten Total	33.9%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

120 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-4.01%	13.01%	7.22%
A-Class Shares	-4.24%	12.72%	7.01%
A-Class Shares with sales charge†	-8.79%	11.62%	6.49%
C-Class Shares	-4.94%	11.89%	6.18%
C-Class Shares with CDSC‡	-5.89%	11.89%	6.18%
H-Class Shares**	-4.31%	12.54%	6.77%
S&P 500 Consumer Discretionary Index	6.75%	17.13%	10.73%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Consumer Discretionary Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 121

SCHEDULE OF INVESTMENTS	March 31, 2016
RETAILING FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Retail - 75.1%
Wal-Mart Stores, Inc.		15,869	$	1,086,868
Home Depot, Inc.		7,085		945,352
CVS Health Corp.		7,548		782,954
Walgreens Boots Alliance, Inc.		8,136		685,377
Costco Wholesale Corp.		3,877		610,938
Lowe’s Companies, Inc.		7,997		605,773
TJX Companies, Inc.		6,692		524,318
Target Corp.		6,104		502,237
O’Reilly Automotive, Inc.*		1,463		400,364
AutoZone, Inc.*		480		382,411
L Brands, Inc.		4,187		367,659
Dollar General Corp.		4,281		366,454
Ross Stores, Inc.		6,000		347,400
Dollar Tree, Inc.*		3,926		323,738
Ulta Salon Cosmetics & Fragrance, Inc.*		1,405		272,205
Tractor Supply Co.		2,982		269,752
Macy’s, Inc.		6,058		267,097
Advance Auto Parts, Inc.		1,646		263,920
Liberty Interactive Corporation QVC Group — Class A*		10,123		255,606
The Gap, Inc.		8,363		245,872
Signet Jewelers Ltd.		1,952		242,106
Tiffany & Co.		3,255		238,852
Best Buy Company, Inc.		7,205		233,730
CarMax, Inc.*		4,557		232,863
Nordstrom, Inc.		3,895		222,833
Foot Locker, Inc.		3,437		221,687
Rite Aid Corp.*		26,207		213,587
Kohl’s Corp.		4,515		210,444
Bed Bath & Beyond, Inc.*		4,168		206,899
Staples, Inc.		18,247		201,264
Chico’s FAS, Inc.		14,927		198,081
Dick’s Sporting Goods, Inc.		3,727		174,237
Williams-Sonoma, Inc.		3,122		170,898
Michaels Companies, Inc.*		6,000		167,820
AutoNation, Inc.*		3,474		162,166
Sally Beauty Holdings, Inc.*		4,796		155,295
Burlington Stores, Inc.*		2,737		153,929
Office Depot, Inc.*		20,819		147,815
Urban Outfitters, Inc.*		4,289		141,923
Cabela’s, Inc.*		2,884		140,422
Jumei International Holding Ltd. ADR*		21,180		137,882
Penske Automotive Group, Inc.		3,580		135,682
Dillard’s, Inc. — Class A		1,559		132,375
GameStop Corp. — Class A		4,148		131,616
J.C. Penney Company, Inc.*		11,641		128,749
CST Brands, Inc.		3,353		128,386
HSN, Inc.		2,387		124,864
American Eagle Outfitters, Inc.		7,470		124,525
PriceSmart, Inc.		1,427		120,696
GNC Holdings, Inc. — Class A		3,741		118,777
Five Below, Inc.*		2,800		115,752
DSW, Inc. — Class A		4,130		114,153
Big Lots, Inc.		2,518		114,040
Lithia Motors, Inc. — Class A		1,290		112,656
Restoration Hardware Holdings, Inc.*		2,630		110,197
Abercrombie & Fitch Co. — Class A		3,466		109,318
Ascena Retail Group, Inc.*		9,766		108,012
Guess?, Inc.		5,353		100,476
Children’s Place, Inc.		1,181		98,578
Express, Inc.*		4,490		96,131
Buckle, Inc.		2,826		95,717
Mattress Firm Holding Corp.*		2,250		95,378
Genesco, Inc.*		1,307		94,431
Asbury Automotive Group, Inc.*		1,560		93,350
Sears Holdings Corp.*		6,096		93,330
Caleres, Inc.		3,210		90,811
Group 1 Automotive, Inc.		1,517		89,033
Finish Line, Inc. — Class A		3,586		75,665
Tailored Brands, Inc.		4,001		71,618
Barnes & Noble, Inc.		5,575		68,907
Hibbett Sports, Inc.*		1,890		67,851
Vitamin Shoppe, Inc.*		2,141		66,285
Outerwall, Inc.		1,560		57,704
Pier 1 Imports, Inc.		8,059		56,494
Lumber Liquidators Holdings, Inc.*		3,710		48,675
Conn’s, Inc.*		3,300		41,118
Total Retail				16,912,378
Internet – 18.0%
Amazon.com, Inc.*		2,242		1,330,941
Priceline Group, Inc.*		457		589,055
Netflix, Inc.*		4,697		480,174
Expedia, Inc.		2,855		307,826
JD.com, Inc. ADR*		10,677		282,941
Ctrip.com International Ltd. ADR*		5,820		257,593
TripAdvisor, Inc.*		3,636		241,794
Vipshop Holdings Ltd. ADR*		16,208		208,759
Wayfair, Inc. — Class A*		3,210		138,736
Groupon, Inc. — Class A*		26,680		106,453
Shutterfly, Inc.*		2,081		96,496
Total Internet				4,040,768
Distribution & Wholesale - 3.4%
Genuine Parts Co.		2,913		289,436
LKQ Corp.*		7,153		228,395
Pool Corp.		1,680		147,403
Core-Mark Holding Company, Inc.		1,230		100,319
Total Distribution & Wholesale				765,553
Commercial Services - 1.2%
Monro Muffler Brake, Inc.		1,610		115,067
Aaron’s, Inc.		3,951		99,169

122 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
RETAILING FUND

	Shares		Value
Rent-A-Center, Inc.		4,109	$	65,128
Total Commercial Services				279,364
Leisure Time - 1.1%
Qunar Cayman Islands Ltd. ADR*		3,740		148,478
Liberty TripAdvisor Holdings, Inc. — Class A*		4,243		94,025
Total Leisure Time				242,503
Oil & Gas - 0.5%
Murphy USA, Inc.*		1,931		118,660
Home Furnishings - 0.3%
Select Comfort Corp.*		3,762		72,945
Total Common Stocks
(Cost $14,057,990)				22,432,171

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.1%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	27,844		27,844
Total Repurchase Agreement
(Cost $27,844)				27,844
Total Investments - 99.7%
(Cost $14,085,834)			$	22,460,015
Other Assets & Liabilities, net - 0.3%				56,960
Total Net Assets - 100.0%			$	22,516,975

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	22,432,171	$	—	$	—	$	22,432,171
Repurchase Agreement		—		27,844		—		27,844
Total	$	22,432,171	$	27,844	$	—	$	22,460,015

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 123

RETAILING FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $14,057,990)	$	22,432,171
Repurchase agreements, at value (cost $27,844)		27,844
Total investments (cost $14,085,834)		22,460,015
Receivables:
Fund shares sold		100,107
Dividends		27,423
Total assets		22,587,545
Liabilities:
Payable for:
Fund shares redeemed		38,671
Management fees		16,072
Transfer agent and administrative fees		4,727
Distribution and service fees		4,097
Portfolio accounting fees		1,891
Miscellaneous		5,112
Total liabilities		70,570
Commitments and contingent liabilities (Note 10)		—
Net assets	$	22,516,975
Net assets consist of:
Paid in capital	$	21,943,746
Undistributed net investment income		—
Accumulated net realized loss on investments		(7,800,952	)
Net unrealized appreciation on investments		8,374,181
Net assets	$	22,516,975
Investor Class:
Net assets	$	10,265,227
Capital shares outstanding		380,484
Net asset value per share	$	26.98
A-Class:
Net assets	$	6,312,770
Capital shares outstanding		245,722
Net asset value per share	$	25.69
Maximum offering price per share (Net asset value divided by 95.25%)	$	26.97
C-Class:
Net assets	$	2,532,022
Capital shares outstanding		108,991
Net asset value per share	$	23.23
H-Class:
Net assets	$	3,406,956
Capital shares outstanding		135,903
Net asset value per share	$	25.07

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $1,425)	$	594,251
Income from securities lending, net		20,835
Interest		160
Total investment income		615,246
Expenses:
Management fees		419,737
Transfer agent and administrative fees		123,451
Distribution and service fees:
A-Class		18,482
C-Class		32,549
H-Class**		39,362
Portfolio accounting fees		49,380
Custodian fees		5,709
Trustees’ fees*		3,479
Line of credit fees		313
Miscellaneous		59,254
Total expenses		751,716
Net investment loss		(136,470	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(1,114,146	)
Net realized loss		(1,114,146	)
Net change in unrealized appreciation (depreciation) on:
Investments		(4,279,916	)
Net change in unrealized appreciation (depreciation)		(4,279,916	)
Net realized and unrealized loss		(5,394,062	)
Net decrease in net assets resulting from operations	$	(5,530,532	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

124 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

RETAILING FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(136,470	)	$	68,392
Net realized gain (loss) on investments		(1,114,146	)		1,805,839
Net change in unrealized appreciation (depreciation) on investments		(4,279,916	)		5,758,303
Net increase (decrease) in net assets resulting from operations		(5,530,532	)		7,632,534
Distributions to shareholders from:
Net investment income
Investor Class		(14,287	)		—
A-Class		(4,835	)		—
C-Class		(3,881	)		—
H-Class*		(9,230	)		—
Total distributions to shareholders		(32,233	)		—
Capital share transactions:
Proceeds from sale of shares
Investor Class		58,531,964			60,134,467
A-Class		26,869,075			35,188,984
C-Class		21,109,377			23,269,330
H-Class*		75,174,384			46,492,511
Distributions reinvested
Investor Class		14,238			—
A-Class		4,654			—
C-Class		2,509			—
H-Class*		9,207			—
Cost of shares redeemed
Investor Class		(91,432,944	)		(83,827,188	)
A-Class		(39,196,534	)		(19,080,379	)
C-Class		(21,796,959	)		(22,833,190	)
H-Class*		(79,319,706	)		(44,004,920	)
Net decrease from capital share transactions		(50,030,735	)		(4,660,385	)
Net increase (decrease) in net assets		(55,593,500	)		2,972,149
Net assets:
Beginning of year		78,110,475			75,138,326
End of year	$	22,516,975		$	78,110,475
Undistributed net investment income at end of year	$	—		$	32,233
Capital share activity:
Shares sold
Investor Class		2,149,723			2,329,184
A-Class		1,066,330			1,439,831
C-Class		896,154			1,069,690
H-Class*		2,910,370			1,959,097
Shares issued from reinvestment of distributions
Investor Class		555			—
A-Class		190			—
C-Class		113			—
H-Class*		386			—
Shares redeemed
Investor Class		(3,415,362	)		(3,453,617	)
A-Class		(1,547,153	)		(804,635	)
C-Class		(928,517	)		(1,049,685	)
H-Class*		(3,113,107	)		(1,865,868	)
Net decrease in shares		(1,980,318	)		(376,003	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 125

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	28.13		$	23.54		$	19.62		$	17.45		$	14.66
Income (loss) from investment operations:
Net investment income (loss)a		(.03	)		.11			—	b		.09			.01
Net gain (loss) on investments (realized and unrealized)		(1.10	)		4.48			3.92			2.08			2.79
Total from investment operations		(1.13	)		4.59			3.92			2.17			2.80
Less distributions from:
Net investment income		(.02	)		—			—			—			(.01	)
Total distributions		(.02	)		—			—			—			(.01	)
Net asset value, end of period	$	26.98		$	28.13		$	23.54		$	19.62		$	17.45
Total Returnc		(4.01	%)		19.50	%		19.98	%		12.44	%		19.14	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,265		$	46,283		$	65,195		$	14,671		$	34,802
Ratios to average net assets:
Net investment income (loss)		(0.10	%)		0.42	%		0.01	%		0.51	%		0.04	%
Total expenses		1.34	%		1.33	%		1.37	%		1.35	%		1.34	%
Portfolio turnover rate		238	%		395	%		671	%		472	%		822	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	26.85		$	22.48		$	18.79		$	16.77		$	14.14
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		.06			(.09	)		.03			(.03	)
Net gain (loss) on investments (realized and unrealized)		(1.05	)		4.31			3.78			1.99			2.67
Total from investment operations		(1.14	)		4.37			3.69			2.02			2.64
Less distributions from:
Net investment income		(.02	)		—			—			—			(.01	)
Total distributions		(.02	)		—			—			—			(.01	)
Net asset value, end of period	$	25.69		$	26.85		$	22.48		$	18.79		$	16.77
Total Returnc		(4.24	%)		19.44	%		19.64	%		12.05	%		18.71	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,313		$	19,502		$	2,049		$	1,500		$	5,697
Ratios to average net assets:
Net investment income (loss)		(0.36	%)		0.25	%		(0.42	%)		0.20	%		(0.18	%)
Total expenses		1.60	%		1.58	%		1.62	%		1.59	%		1.58	%
Portfolio turnover rate		238	%		395	%		671	%		472	%		822	%

126 | THE RYDEX FUNDS 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	24.46		$	20.64		$	17.40		$	15.62		$	13.27
Income (loss) from investment operations:
Net investment income (loss)a		(.24	)		(.19	)		(.23	)		(.06	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		(.97	)		4.01			3.47			1.84			2.49
Total from investment operations		(1.21	)		3.82			3.24			1.78			2.36
Less distributions from:
Net investment income		(.02	)		—			—			—			(.01	)
Total distributions		(.02	)		—			—			—			(.01	)
Net asset value, end of period	$	23.23		$	24.46		$	20.64		$	17.40		$	15.62
Total Returnc		(4.94	%)		18.51	%		18.62	%		11.40	%		17.83	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,532		$	3,455		$	2,503		$	1,831		$	2,603
Ratios to average net assets:
Net investment income (loss)		(1.04	%)		(0.88	%)		(1.16	%)		(0.39	%)		(0.96	%)
Total expenses		2.35	%		2.34	%		2.37	%		2.35	%		2.35	%
Portfolio turnover rate		238	%		395	%		671	%		472	%		822	%

H-Classd	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	26.22		$	22.00		$	18.45		$	16.45		$	13.91
Income (loss) from investment operations:
Net investment income (loss)a		(.11	)		.01			(.14	)		(.01	)		(.09	)
Net gain (loss) on investments (realized and unrealized)		(1.02	)		4.21			3.69			2.01			2.64
Total from investment operations		(1.13	)		4.22			3.55			2.00			2.55
Less distributions from:
Net investment income		(.02	)		—			—			—			(.01	)
Total distributions		(.02	)		—			—			—			(.01	)
Net asset value, end of period	$	25.07		$	26.22		$	22.00		$	18.45		$	16.45
Total Returnc		(4.31	%)		19.18	%		19.24	%		12.16	%		18.38	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,407		$	8,871		$	5,391		$	2,454		$	3,979
Ratios to average net assets:
Net investment income (loss)		(0.44	%)		0.05	%		(0.64	%)		(0.05	%)		(0.66	%)
Total expenses		1.71	%		1.83	%		1.87	%		1.85	%		1.84	%
Portfolio turnover rate		238	%		395	%		671	%		472	%		822	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Net investment income is less than $0.01 per share.
c	Total return does not reflect the impact of any applicable sales charges.
d	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 127

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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, and PC hardware and peripherals companies (“technology companies”).

For the one-year period ended March 31, 2016, Technology Fund Investor Class returned -1.14%, compared with 8.06% for the S&P 500 Information Technology Index. The broader S&P 500 Index returned 1.78%.

The internet software & services industry was the largest contributor to return, followed by the IT services industry. The technology hardware storage & peripheral industry detracted the most from return, followed by the semiconductors & semiconductor equipment industry.

Top contributing holdings were Microsoft Corp., Alphabet, Inc. — Class A, and Facebook, Inc. — Class A. Twitter, Inc., Micron Technology, Inc., and LinkedIn Corp. — Class A were the holdings detracting the most from performance for the period.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 18, 2001
H-Class*	April 29, 1998

Ten Largest Holdings (% of Total Net Assets)
Apple, Inc.	3.5%
Alphabet, Inc. — Class A	3.1%
Microsoft Corp.	3.0%
Facebook, Inc. — Class A	2.6%
Visa, Inc. — Class A	2.0%
Oracle Corp.	1.8%
Intel Corp.	1.8%
Cisco Systems, Inc.	1.7%
International Business Machines Corp.	1.7%
MasterCard, Inc. — Class A	1.4%
Top Ten Total	22.6%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

128 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-1.14%	7.68%	5.03%
A-Class Shares	-1.40%	7.38%	4.72%
A-Class Shares with sales charge†	-6.09%	6.34%	4.21%
C-Class Shares	-2.11%	6.59%	3.99%
C-Class Shares with CDSC‡	-3.09%	6.59%	3.99%
H-Class Shares**	-1.45%	7.18%	4.52%
S&P 500 Information Technology Index	8.06%	13.76%	9.23%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Information Technology Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 129

SCHEDULE OF INVESTMENTS	March 31, 2016
TECHNOLOGY FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Software – 22.8%
Microsoft Corp.		18,527	$	1,023,246
Oracle Corp.		15,455		632,264
salesforce.com, Inc.*		4,564		336,960
Adobe Systems, Inc.*		3,508		329,050
Paychex, Inc.		5,108		275,883
Activision Blizzard, Inc.		7,369		249,366
Intuit, Inc.		2,346		244,007
Electronic Arts, Inc.*		3,481		230,129
Fiserv, Inc.*		2,186		224,240
VMware, Inc. — Class A*		4,246		222,108
Fidelity National Information Services, Inc.		3,414		216,140
Workday, Inc. — Class A*		2,610		200,552
Check Point Software Technologies Ltd.*		2,290		200,306
Autodesk, Inc.*		3,127		182,336
NetEase, Inc. ADR		1,260		180,911
Red Hat, Inc.*		2,327		173,385
First Data Corp. — Class A*		13,235		171,261
CA, Inc.		5,502		169,407
Citrix Systems, Inc.*		2,081		163,525
CyberArk Software Ltd.*		3,835		163,486
SAP SE ADR		2,018		162,288
ServiceNow, Inc.*		2,580		157,844
Akamai Technologies, Inc.*		2,765		153,651
ANSYS, Inc.*		1,500		134,190
CDK Global, Inc.		2,874		133,785
Broadridge Financial Solutions, Inc.		2,100		124,551
Jack Henry & Associates, Inc.		1,470		124,318
SS&C Technologies Holdings, Inc.		1,940		123,035
Nuance Communications, Inc.*		6,240		116,626
NetSuite, Inc.*		1,670		114,378
Rackspace Hosting, Inc.*		4,993		107,799
Ultimate Software Group, Inc.*		552		106,812
PTC, Inc.*		2,933		97,258
Tyler Technologies, Inc.*		750		96,458
Tableau Software, Inc. — Class A*		1,970		90,364
Take-Two Interactive Software, Inc.*		2,310		87,018
j2 Global, Inc.		1,340		82,517
Aspen Technology, Inc.*		2,210		79,847
Proofpoint, Inc.*		1,330		71,527
CommVault Systems, Inc.*		1,600		69,072
Qlik Technologies, Inc.*		2,350		67,962
Total Software				7,889,862
Internet - 17.7%
Alphabet, Inc. — Class A*		1,421		1,084,081
Facebook, Inc. — Class A*		7,860		896,825
Alibaba Group Holding Ltd. ADR*		4,790		378,554
Baidu, Inc. ADR*		1,686		321,824
Yahoo!, Inc.*		8,050		296,321
eBay, Inc.*		10,914		260,408
LinkedIn Corp. — Class A*		1,705		194,966
Expedia, Inc.		1,770		190,840
YY, Inc. ADR*		2,741		168,818
Symantec Corp.		9,118		167,588
58.com, Inc. ADR*		2,970		165,281
SouFun Holdings Ltd. ADR*		27,428		164,294
MercadoLibre, Inc.		1,393		164,165
Qihoo 360 Technology Company Ltd. ADR*		2,150		162,433
Twitter, Inc.*		9,810		162,356
Yandex N.V. — Class A*		10,560		161,779
SINA Corp.*		3,172		150,258
VeriSign, Inc.*		1,663		147,242
F5 Networks, Inc.*		1,238		131,042
CDW Corp.		3,080		127,820
Splunk, Inc.*		2,580		126,239
IAC/InterActiveCorp		1,970		92,748
FireEye, Inc.*		4,510		81,135
WebMD Health Corp. — Class A*		1,220		76,409
GrubHub, Inc.*		2,960		74,385
Pandora Media, Inc.*		7,104		63,581
Yelp, Inc. — Class A*		2,910		57,851
Stamps.com, Inc.*		530		56,328
Total Internet				6,125,571
Computers - 17.7%
Apple, Inc.		11,197		1,220,361
International Business Machines Corp.		3,818		578,236
EMC Corp.		13,285		354,044
Accenture plc — Class A		2,637		304,310
Cognizant Technology Solutions Corp. — Class A*		4,846		303,844
Hewlett Packard Enterprise Co.		15,385		272,776
HP, Inc.		18,625		229,460
SanDisk Corp.		2,557		194,537
Infosys Ltd. ADR		10,065		191,436
Western Digital Corp.		3,390		160,144
BlackBerry Ltd.*		19,620		158,726
Seagate Technology plc		4,393		151,339
Amdocs Ltd.		2,330		140,779
CSRA, Inc.		5,160		138,804
Synopsys, Inc.*		2,790		135,147
NetApp, Inc.		4,910		133,994
Cadence Design Systems, Inc.*		5,434		128,134
Computer Sciences Corp.		3,266		112,318
Fortinet, Inc.*		3,587		109,870
NCR Corp.*		3,400		101,762
Brocade Communications Systems, Inc.		9,560		101,145
Manhattan Associates, Inc.*		1,700		96,679
EPAM Systems, Inc.*		1,270		94,831
MAXIMUS, Inc.		1,740		91,594
Leidos Holdings, Inc.		1,820		91,582
Teradata Corp.*		3,305		86,723
VeriFone Systems, Inc.*		3,050		86,132
DST Systems, Inc.		760		85,705
3D Systems Corp.*		5,411		83,708

130 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
TECHNOLOGY FUND

	Shares		Value
NetScout Systems, Inc.*		3,140	$	72,126
Stratasys Ltd.*		2,130		55,210
Lexmark International, Inc. — Class A		1,220		40,785
Total Computers				6,106,241
Semiconductors - 17.3%
Intel Corp.		18,815		608,664
QUALCOMM, Inc.		8,412		430,191
Texas Instruments, Inc.		6,506		373,574
Broadcom Ltd.		2,226		343,917
NXP Semiconductor N.V.*		3,047		247,020
Applied Materials, Inc.		11,507		243,718
Taiwan Semiconductor Manufacturing Company Ltd. ADR		9,127		239,127
NVIDIA Corp.		6,235		222,153
ARM Holdings plc ADR		5,040		220,198
Analog Devices, Inc.		3,450		204,206
Skyworks Solutions, Inc.		2,353		183,299
Lam Research Corp.		2,064		170,486
Marvell Technology Group Ltd.		16,425		169,342
ASML Holding N.V. — Class G		1,668		167,451
Xilinx, Inc.		3,525		167,191
Micron Technology, Inc.*		15,189		159,029
KLA-Tencor Corp.		2,178		158,580
Maxim Integrated Products, Inc.		4,271		157,087
Linear Technology Corp.		3,516		156,673
Microchip Technology, Inc.		3,231		155,734
Qorvo, Inc.*		2,627		132,427
IPG Photonics Corp.*		1,120		107,610
Microsemi Corp.*		2,701		103,475
Teradyne, Inc.		4,688		101,214
ON Semiconductor Corp.*		10,279		98,576
Atmel Corp.		11,237		91,244
Cavium, Inc.*		1,480		90,517
Synaptics, Inc.*		1,092		87,076
Cree, Inc.*		2,865		83,372
Cypress Semiconductor Corp.*		9,280		80,365
Integrated Device Technology, Inc.*		3,927		80,268
Cirrus Logic, Inc.*		1,967		71,618
Ambarella, Inc.*		1,350		60,345
Total Semiconductors				5,965,747
Commercial Services - 6.2%
PayPal Holdings, Inc.*		8,544		329,798
Automatic Data Processing, Inc.		3,403		305,283
FleetCor Technologies, Inc.*		1,210		179,988
Vantiv, Inc. — Class A*		3,060		164,873
Cimpress N.V.*		1,784		161,791
Western Union Co.		7,891		152,217
Total System Services, Inc.		3,143		149,544
Sabre Corp.		4,877		141,043
Global Payments, Inc.		2,150		140,395
Gartner, Inc.*		1,480		132,238
Booz Allen Hamilton Holding Corp.		3,370		102,044
Heartland Payment Systems, Inc.		1,030		99,467
WEX, Inc.*		1,100		91,696
Total Commercial Services				2,150,377
Electronics - 5.1%
Corning, Inc.		11,351		237,121
Amphenol Corp. — Class A		3,611		208,788
TE Connectivity Ltd.		3,287		203,531
Flextronics International Ltd.*		10,493		126,546
Avnet, Inc.		2,714		120,230
Arrow Electronics, Inc.*		1,836		118,257
Trimble Navigation Ltd.*		4,764		118,147
FLIR Systems, Inc.		3,220		106,099
Keysight Technologies, Inc.*		3,720		103,193
FEI Co.		1,100		97,911
Jabil Circuit, Inc.		4,930		95,001
Fitbit, Inc. — Class A*		5,900		89,385
Tech Data Corp.*		1,080		82,912
Knowles Corp.*		3,820		50,348
Total Electronics				1,757,469
Telecommunications - 5.1%
Cisco Systems, Inc.		20,592		586,254
Palo Alto Networks, Inc.*		1,150		187,611
Motorola Solutions, Inc.		2,279		172,521
Nokia Oyj ADR		28,263		167,034
Juniper Networks, Inc.		5,854		149,336
CommScope Holding Company, Inc.*		3,920		109,446
Ciena Corp.*		5,362		101,985
Arista Networks, Inc.*		1,610		101,591
ARRIS International plc*		4,392		100,665
Infinera Corp.*		4,380		70,343
Total Telecommunications				1,746,786
Diversified Financial Services - 4.1%
Visa, Inc. — Class A		8,842		676,236
MasterCard, Inc. — Class A		5,219		493,196
Alliance Data Systems Corp.*		749		164,780
Ellie Mae, Inc.*		960		87,014
Total Diversified Financial Services				1,421,226
Energy-Alternate Sources - 0.8%
Canadian Solar, Inc.*		7,630		147,106
First Solar, Inc.*		1,761		120,576
Total Energy-Alternate Sources				267,682
Auto Parts & Equipment - 0.5%
Mobileye N.V.*		4,756		177,351
Office & Business Equipment - 0.5%
Xerox Corp.		15,036		167,802

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 131

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
TECHNOLOGY FUND

	Shares		Value
Electrical Components & Equipment - 0.5%
SunPower Corp. — Class A*		3,460	$	77,296
Belden, Inc.		1,241		76,173
Total Electrical Components & Equipment				153,469
Aerospace & Defense - 0.4%
Harris Corp.		1,900		147,934
Distribution & Wholesale - 0.3%
Ingram Micro, Inc. — Class A		3,190		114,553
Media - 0.3%
FactSet Research Systems, Inc.		720		109,102
Machinery-Diversified - 0.3%
Zebra Technologies Corp. — Class A*		1,320		91,080
Total Common Stocks
(Cost $25,520,028)				34,392,252

	Face Amount
REPURCHASE AGREEMENT††,1 - 0.5%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	184,493		184,493
Total Repurchase Agreement
(Cost $184,493)				184,493
Total Investments - 100.1%
(Cost $25,704,521)			$	34,576,745
Other Assets & Liabilities, net - (0.1)%				(20,073	)
Total Net Assets - 100.0%			$	34,556,672

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	34,392,252	$	—	$	—	$	34,392,252
Repurchase Agreement		—		184,493		—		184,493
Total	$	34,392,252	$	184,493	$	—	$	34,576,745

For the year ended March 31, 2016, there were no transfers between levels.

132 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

TECHNOLOGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $25,520,028)	$	34,392,252
Repurchase agreements, at value (cost $184,493)		184,493
Total investments (cost $25,704,521)		34,576,745
Cash		954
Receivables:
Fund shares sold		2,134,155
Dividends		16,079
Foreign taxes reclaim		2,356
Total assets		36,730,289
Liabilities:
Payable for:
Securities purchased		2,039,346
Fund shares redeemed		93,399
Management fees		21,260
Transfer agent and administrative fees		6,253
Distribution and service fees		4,034
Portfolio accounting fees		2,501
Miscellaneous		6,824
Total liabilities		2,173,617
Commitments and contingent liabilities (Note 10		—
Net assets	$	34,556,672
Net assets consist of:
Paid in capital	$	33,116,768
Accumulated net investment loss		(31,528	)
Accumulated net realized loss on investments		(7,400,792	)
Net unrealized appreciation on investments		8,872,224
Net assets	$	34,556,672
Investor Class:
Net assets	$	22,166,613
Capital shares outstanding		366,221
Net asset value per share	$	60.53
A-Class:
Net assets	$	8,327,124
Capital shares outstanding		146,386
Net asset value per share	$	56.88
Maximum offering price per share (Net asset value divided by 95.25%)	$	59.72
C-Class:
Net assets	$	2,233,673
Capital shares outstanding		42,651
Net asset value per share	$	52.37
H-Class:
Net assets	$	1,829,262
Capital shares outstanding		32,828
Net asset value per share	$	55.72

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	479,793
Income from securities lending, net		6,985
Interest		157
Total investment income		486,935
Expenses:
Management fees		328,674
Transfer agent and administrative fees		96,669
Distribution and service fees:
A-Class		13,790
C-Class		26,415
H-Class**		17,450
Portfolio accounting fees		38,667
Custodian fees		4,573
Trustees’ fees*		2,629
Line of credit fees		143
Miscellaneous		48,220
Total expenses		577,230
Net investment loss		(90,295	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		123,656
Net realized gain		123,656
Net change in unrealized appreciation (depreciation) on:
Investments		(4,049,840	)
Net change in unrealized appreciation (depreciation)		(4,049,840	)
Net realized and unrealized loss		(3,926,184	)
Net decrease in net assets resulting from operations	$	(4,016,479	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 133

TECHNOLOGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(90,295	)	$	(120,266	)
Net realized gain on investments		123,656			848,143
Net change in unrealized appreciation (depreciation) on investments		(4,049,840	)		516,435
Net increase (decrease) in net assets resulting from operations		(4,016,479	)		1,244,312
Capital share transactions:
Proceeds from sale of shares
Investor Class		99,486,819			78,754,571
A-Class		20,272,499			18,659,402
C-Class		17,598,381			21,038,252
H-Class*		60,138,342			30,346,789
Cost of shares redeemed
Investor Class		(94,488,616	)		(92,812,678	)
A-Class		(21,811,056	)		(14,187,804	)
C-Class		(18,142,641	)		(21,139,205	)
H-Class*		(60,639,611	)		(34,217,663	)
Net increase (decrease) from capital share transactions		2,414,117			(13,558,336	)
Net decrease in net assets		(1,602,362	)		(12,314,024	)
Net assets:
Beginning of year		36,159,034			48,473,058
End of year	$	34,556,672		$	36,159,034
Accumulated net investment loss at end of year	$	(31,528	)	$	(178,794	)
Capital share activity:
Shares sold
Investor Class		1,642,615			1,362,713
A-Class		358,240			328,301
C-Class		332,333			413,675
H-Class*		1,063,419			573,554
Shares redeemed
Investor Class		(1,610,504	)		(1,616,398	)
A-Class		(384,505	)		(266,905	)
C-Class		(344,075	)		(416,613	)
H-Class*		(1,080,659	)		(656,798	)
Net decrease in shares		(23,136	)		(278,471	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

134 | THE RYDEX FUNDS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	61.23		$	55.90		$	43.58		$	42.92		$	41.81
Income (loss) from investment operations:
Net investment income (loss)a		(.06	)		(.10	)		(.09	)		.03			(.03	)
Net gain (loss) on investments (realized and unrealized)		(.64	)		5.43			12.41			.63			1.14
Total from investment operations		(.70	)		5.33			12.32			.66			1.11
Net asset value, end of period	$	60.53		$	61.23		$	55.90		$	43.58		$	42.92
Total Returnb		(1.14	%)		9.53	%		28.24	%		1.54	%		2.65	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	22,167		$	20,458		$	32,858		$	8,325		$	19,985
Ratios to average net assets:
Net investment income (loss)		(0.10	%)		(0.17	%)		(0.18	%)		0.10	%		(0.10	%)
Total expenses		1.35	%		1.35	%		1.37	%		1.35	%		1.36	%
Portfolio turnover rate		388	%		280	%		321	%		324	%		487	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	57.69		$	52.79		$	41.30		$	40.76		$	39.83
Income (loss) from investment operations:
Net investment income (loss)a		(.14	)		(.21	)		(.23	)		(.09	)		(.30	)
Net gain (loss) on investments (realized and unrealized)		(.67	)		5.11			11.72			.63			1.23
Total from investment operations		(.81	)		4.90			11.49			.54			.93
Net asset value, end of period	$	56.88		$	57.69		$	52.79		$	41.30		$	40.76
Total Returnb		(1.40	%)		9.28	%		27.79	%		1.32	%		2.33	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,327		$	9,960		$	5,873		$	1,998		$	7,367
Ratios to average net assets:
Net investment income (loss)		(0.25	%)		(0.39	%)		(0.47	%)		(0.27	%)		(0.76	%)
Total expenses		1.60	%		1.59	%		1.62	%		1.59	%		1.59	%
Portfolio turnover rate		388	%		280	%		321	%		324	%		487	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 135

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	53.50		$	49.30		$	38.84		$	38.65		$	38.07
Income (loss) from investment operations:
Net investment income (loss)a		(.59	)		(.58	)		(.50	)		(.33	)		(.51	)
Net gain (loss) on investments (realized and unrealized)		(.54	)		4.78			10.96			.52			1.09
Total from investment operations		(1.13	)		4.20			10.46			.19			.58
Net asset value, end of period	$	52.37		$	53.50		$	49.30		$	38.84		$	38.65
Total Returnb		(2.11	%)		8.52	%		26.90	%		0.54	%		1.50	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,234		$	2,910		$	2,827		$	1,715		$	2,743
Ratios to average net assets:
Net investment income (loss)		(1.12	%)		(1.13	%)		(1.13	%)		(0.90	%)		(1.45	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.36	%
Portfolio turnover rate		388	%		280	%		321	%		324	%		487	%

H-Classd	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	56.54		$	51.87		$	40.65		$	40.22		$	39.39
Income (loss) from investment operations:
Net investment income (loss)a		(.23	)		(.37	)		(.27	)		(.12	)		(.33	)
Net gain (loss) on investments (realized and unrealized)		(.59	)		5.04			11.49			.55			1.16
Total from investment operations		(.82	)		4.67			11.22			.43			.83
Net asset value, end of period	$	55.72		$	56.54		$	51.87		$	40.65		$	40.22
Total Returnb		(1.45	%)		9.00	%		27.60	%		1.04	%		2.13	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,829		$	2,831		$	6,915		$	1,286		$	2,361
Ratios to average net assets:
Net investment income (loss)		(0.42	%)		(0.69	%)		(0.54	%)		(0.33	%)		(0.87	%)
Total expenses		1.68	%		1.85	%		1.87	%		1.85	%		1.85	%
Portfolio turnover rate		388	%		280	%		321	%		324	%		487	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Reverse share split — Per share amounts for the periods presented through February 7, 2014 have been restated to reflect a 1:3 reverse share split effective February 7, 2014.
d	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

136 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Telecommunications Fund Investor Class returned -2.49%, compared with 18.74% for the S&P 500 Telecommunications Services Index. The broader S&P 500 Index returned 1.78%.

The diversified telecommunication services industry contributed the most to the Fund’s return, followed by the real estate investment trusts (REITs) industry. The semiconductors & semiconductor equipment industry was the leading detractor from return, followed by the wireless telecommunication services industry.

AT&T, Inc., Verizon Communications, Inc., and Cisco Systems, Inc. were the strongest performers for the period. QUALCOMM, Inc., Sierra Wireless, Inc., and Sprint Corp. detracted the most from performance during the period.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 18, 2001
H-Class*	April 1, 1998

Ten Largest Holdings (% of Total Net Assets)
AT&T, Inc.	9.5%
Verizon Communications, Inc.	9.1%
Cisco Systems, Inc.	7.3%
QUALCOMM, Inc.	5.4%
T-Mobile US, Inc.	3.5%
Crown Castle International Corp.	3.3%
Level 3 Communications, Inc.	2.6%
CenturyLink, Inc.	2.6%
Palo Alto Networks, Inc.	2.4%
Sprint Corp.	2.4%
Top Ten Total	48.1%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 137

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-2.49%	0.81%	-0.10%
A-Class Shares	-2.90%	0.56%	-0.37%
A-Class Shares with sales charge†	-7.52%	-0.41%	-0.86%
C-Class Shares	-3.59%	-0.06%	-0.99%
C-Class Shares with CDSC‡	-4.51%	-0.06%	-0.99%
H-Class Shares**	-2.95%	0.32%	-0.57%
S&P 500 Telecommunication Services Index	18.74%	10.66%	7.69%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Telecommunication Services Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

138 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
TELECOMMUNICATIONS FUND

	Shares		Value
COMMON STOCKS† - 100.0%
Telecommunications – 79.9%
AT&T, Inc.		75,672	$	2,964,073
Verizon Communications, Inc.		52,520		2,840,282
Cisco Systems, Inc.		80,484		2,291,380
T-Mobile US, Inc.*		28,387		1,087,223
Level 3 Communications, Inc.*		15,610		824,988
CenturyLink, Inc.		25,359		810,474
Palo Alto Networks, Inc.*		4,651		758,764
Sprint Corp.*		212,376		739,068
Motorola Solutions, Inc.		9,453		715,593
Juniper Networks, Inc.		22,906		584,332
Frontier Communications Corp.		89,253		498,924
Vodafone Group plc ADR		14,656		469,725
Zayo Group Holdings, Inc.*		19,130		463,711
America Movil SAB de CV — Class L ADR		28,763		446,689
CommScope Holding Company, Inc.*		15,741		439,489
Nokia Oyj ADR		72,846		430,520
China Mobile Ltd. ADR		7,578		420,200
Arista Networks, Inc.*		6,503		410,339
ARRIS International plc*		17,621		403,873
EchoStar Corp. — Class A*		8,797		389,619
BCE, Inc.		8,279		377,026
Telefonaktiebolaget LM Ericsson ADR		36,898		370,087
ViaSat, Inc.*		4,905		360,419
Telephone & Data Systems, Inc.		11,811		355,393
Telefonica Brasil S.A. ADR		27,495		343,413
Rogers Communications, Inc. — Class B		8,310		332,566
Nippon Telegraph & Telephone Corp. ADR		7,630		329,921
Telefonica S.A. ADR		29,523		328,591
VimpelCom Ltd. ADR		75,514		321,690
SK Telecom Company Ltd. ADR		15,784		318,363
Tim Participacoes S.A. ADR		28,563		315,907
Ubiquiti Networks, Inc.*		9,467		314,967
Ciena Corp.*		16,294		309,912
Infinera Corp.*		17,596		282,592
InterDigital, Inc.		4,911		273,297
Finisar Corp.*		14,627		266,796
Viavi Solutions, Inc.*		35,444		243,146
Consolidated Communications Holdings, Inc.		8,912		229,573
Polycom, Inc.*		20,551		229,144
Plantronics, Inc.		5,739		224,911
NETGEAR, Inc.*		5,468		220,743
ADTRAN, Inc.		9,587		193,849
Ruckus Wireless, Inc.*		17,973		176,315
Iridium Communications, Inc.*		21,263		167,340
Windstream Holdings, Inc.		20,230		155,366
Total Telecommunications				25,030,593
Semiconductors - 5.3%
QUALCOMM, Inc.		32,806		1,677,698
Computers - 4.2%
Brocade Communications Systems, Inc.		37,360		395,269
BlackBerry Ltd.*		46,222		373,936
NetScout Systems, Inc.*		12,736		292,546
Lumentum Holdings, Inc.*		9,076		244,780
Total Computers				1,306,531
REITs - 3.3%
Crown Castle International Corp.		12,106		1,047,169
Internet - 3.2%
F5 Networks, Inc.*		5,024		531,790
Cogent Communications Holdings, Inc.		6,699		261,462
8x8, Inc.*		19,490		196,069
Total Internet				989,321
Engineering & Construction - 2.2%
SBA Communications Corp. — Class A*		6,756		676,748
Aerospace & Defense - 1.9%
Harris Corp.		7,701		599,600
Total Common Stocks
(Cost $28,750,969)				31,327,660
RIGHTS††† - 0.0%
Leap Wireless International, Inc.
Expires 03/06/17		1,848		—
Total Rights
(Cost $4,327)				—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 139

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
TELECOMMUNICATIONS FUND

	Face Amount		Value
REPURCHASE AGREEMENT††,1 - 0.9%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	282,461	$	282,461
Total Repurchase Agreement
(Cost $282,461)				282,461
Total Investments - 100.9%
(Cost $29,037,757)			$	31,610,121
Other Assets & Liabilities, net - (0.9)%				(267,564	)
Total Net Assets - 100.0%			$	31,342,557

*	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	Repurchase Agreement — See Note 5.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	31,327,660	$	—	$	—	$	31,327,660
Repurchase Agreement		—		282,461		—		282,461
Rights		—		—		—		—
Total	$	31,327,660	$	282,461	$	—	$	31,610,121

For the year ended March 31, 2016, there were no transfers between levels.

140 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

TELECOMMUNICATIONS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $28,755,296)	$	31,327,660
Repurchase agreements, at value (cost $282,461)		282,461
Total investments (cost $29,037,757)		31,610,121
Cash		4,103
Receivables:
Fund shares sold		103,005
Dividends		15,938
Foreign taxes reclaim		925
Total assets		31,734,092
Liabilities:
Payable for:
Fund shares redeemed		355,482
Management fees		20,182
Transfer agent and administrative fees		5,936
Distribution and service fees		2,821
Portfolio accounting fees		2,374
Miscellaneous		4,740
Total liabilities		391,535
Commitments and contingent liabilities (Note 10)		—
Net assets	$	31,342,557
Net assets consist of:
Paid in capital	$	34,680,782
Undistributed net investment income		79,745
Accumulated net realized loss on investments		(5,990,334	)
Net unrealized appreciation on investments		2,572,364
Net assets	$	31,342,557
Investor Class:
Net assets	$	19,198,224
Capital shares outstanding		447,417
Net asset value per share	$	42.91
A-Class:
Net assets	$	1,543,961
Capital shares outstanding		38,711
Net asset value per share	$	39.88
Maximum offering price per share (Net asset value divided by 95.25%)	$	41.87
C-Class:
Net assets	$	247,914
Capital shares outstanding		6,805
Net asset value per share	$	36.43
H-Class:
Net assets	$	10,352,458
Capital shares outstanding		266,447
Net asset value per share	$	38.85

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $8,130)	$	252,182
Income from securities lending, net		1,557
Interest		34
Total investment income		253,773
Expenses:
Management fees		91,748
Transfer agent and administrative fees		26,985
Distribution and service fees:
A-Class		3,097
C-Class		4,240
H-Class**		4,977
Portfolio accounting fees		10,794
Custodian fees		1,347
Trustees’ fees*		466
Line of credit fees		100
Tax expense		33
Miscellaneous		13,639
Total expenses		157,426
Net investment income		96,347
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(1,013,651	)
Net realized loss		(1,013,651	)
Net change in unrealized appreciation (depreciation) on:
Investments		1,646,482
Net change in unrealized appreciation (depreciation)		1,646,482
Net realized and unrealized gain		632,831
Net increase in net assets resulting from operations	$	729,178

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 141

TELECOMMUNICATIONS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	96,347		$	80,748
Net realized gain (loss) on investments		(1,013,651	)		204,448
Net change in unrealized appreciation (depreciation) on investments		1,646,482			(310,801	)
Net increase (decrease) in net assets resulting from operations		729,178			(25,605	)
Distributions to shareholders from:
Net investment income
Investor Class		(53,710	)		(45,635	)
A-Class		(14,192	)		(16,000	)
C-Class		(14,927	)		(21,884	)
H-Class*		(14,554	)		(14,600	)
Total distributions to shareholders		(97,383	)		(98,119	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		74,044,688			18,075,159
A-Class		10,919,225			4,615,685
C-Class		11,849,862			24,640,143
H-Class*		19,440,257			12,552,746
Distributions reinvested
Investor Class		52,983			44,841
A-Class		14,149			16,000
C-Class		14,893			19,446
H-Class*		14,553			14,600
Cost of shares redeemed
Investor Class		(55,976,185	)		(19,374,802	)
A-Class		(9,651,492	)		(6,763,959	)
C-Class		(12,071,566	)		(24,414,344	)
H-Class*		(10,361,614	)		(12,596,170	)
Net increase (decrease) from capital share transactions		28,289,753			(3,170,655	)
Net increase (decrease) in net assets		28,921,548			(3,294,379	)
Net assets:
Beginning of year		2,421,009			5,715,388
End of year	$	31,342,557		$	2,421,009
Undistributed net investment income at end of year	$	79,745		$	80,748
Capital share activity:
Shares sold
Investor Class		1,679,168			392,906
A-Class		264,455			105,986
C-Class		312,004			611,975
H-Class*		531,126			294,638
Shares issued from reinvestment of distributions
Investor Class		1,285			971
A-Class		370			370
C-Class		424			486
H-Class*		390			346
Shares redeemed
Investor Class		(1,261,930	)		(419,860	)
A-Class		(236,776	)		(157,255	)
C-Class		(318,305	)		(606,562	)
H-Class*		(268,701	)		(298,908	)
Net increase (decrease) in shares		703,510			(74,907	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

142 | THE RYDEX FUNDS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	45.56		$	45.51		$	40.76		$	41.52		$	47.13
Income (loss) from investment operations:
Net investment income (loss)a		.44			.72			1.06			.81			1.23
Net gain (loss) on investments (realized and unrealized)		(1.64	)		.63			4.26			(.67	)		(5.52	)
Total from investment operations		(1.20	)		1.35			5.32			.14			(4.29	)
Less distributions from:
Net investment income		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Total distributions		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Net asset value, end of period	$	42.91		$	45.56		$	45.51		$	40.76		$	41.52
Total Returnb		(2.49	%)		2.93	%		13.12	%		0.50	%		(8.77	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	19,198		$	1,316		$	2,497		$	2,970		$	7,028
Ratios to average net assets:
Net investment income (loss)		0.97	%		1.55	%		2.47	%		2.06	%		2.86	%
Total expenses		1.34	%		1.36	%		1.38	%		1.35	%		1.36	%
Portfolio turnover rate		660	%		804	%		1,271	%		1,550	%		793	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	42.63		$	42.74		$	38.44		$	39.27		$	44.72
Income (loss) from investment operations:
Net investment income (loss)a		.58			.58			.72			.72			.54
Net gain (loss) on investments (realized and unrealized)		(1.88	)		.61			4.15			(.65	)		(4.67	)
Total from investment operations		(1.30	)		1.19			4.87			.07			(4.13	)
Less distributions from:
Net investment income		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Total distributions		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Net asset value, end of period	$	39.88		$	42.63		$	42.74		$	38.44		$	39.27
Total Returnb		(2.90	%)		2.75	%		12.80	%		0.30	%		(8.91	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,544		$	454		$	2,631		$	553		$	1,566
Ratios to average net assets:
Net investment income (loss)		1.41	%		1.35	%		1.79	%		1.98	%		1.41	%
Total expenses		1.59	%		1.60	%		1.63	%		1.61	%		1.60	%
Portfolio turnover rate		660	%		804	%		1,271	%		1,550	%		793	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 143

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	39.35		$	39.89		$	36.00		$	37.04		$	42.57
Income (loss) from investment operations:
Net investment income (loss)a		(.01	)		.06			.54			.48			.15
Net gain (loss) on investments (realized and unrealized)		(1.46	)		.70			3.92			(.62	)		(4.36	)
Total from investment operations		(1.47	)		.76			4.46			(.14	)		(4.21	)
Less distributions from:
Net investment income		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Total distributions		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Net asset value, end of period	$	36.43		$	39.35		$	39.89		$	36.00		$	37.04
Total Returnb		(3.59	%)		1.86	%		12.49	%		(0.24	%)		(9.52	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	248		$	499		$	271		$	784		$	672
Ratios to average net assets:
Net investment income (loss)		(0.03	%)		0.14	%		1.42	%		1.41	%		0.39	%
Total expenses		2.35	%		2.35	%		2.38	%		2.36	%		2.36	%
Portfolio turnover rate		660	%		804	%		1,271	%		1,550	%		793	%

H-Classd	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c			Year Ended March 31, 2012c
Per Share Data
Net asset value, beginning of period	$	41.59		$	41.86		$	37.75		$	38.69		$	44.21
Income (loss) from investment operations:
Net investment income (loss)a		.17			.60			.29			.57			.66
Net gain (loss) on investments (realized and unrealized)		(1.46	)		.43			4.39			(.61	)		(4.86	)
Total from investment operations		(1.29	)		1.03			4.68			(.04	)		(4.20	)
Less distributions from:
Net investment income		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Total distributions		(1.45	)		(1.30	)		(.57	)		(.90	)		(1.32	)
Net asset value, end of period	$	38.85		$	41.59		$	41.86		$	37.75		$	38.69
Total Returnb		(2.95	%)		2.42	%		12.53	%		(0.01	%)		(9.15	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,352		$	151		$	316		$	133		$	200
Ratios to average net assets:
Net investment income (loss)		0.44	%		1.40	%		0.74	%		1.59	%		1.65	%
Total expenses		1.64	%		1.86	%		1.88	%		1.86	%		1.85	%
Portfolio turnover rate		660	%		804	%		1,271	%		1,550	%		793	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Reverse share split — Per share amounts for the periods presented through February 7, 2014 have been restated to reflect a 1:3 reverse share split effective February 7, 2014.
d	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

144 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Transportation Fund Investor Class returned -10.80%, compared with 3.21% for the S&P 500 Industrials Index. The broader S&P 500 Index returned 1.78%.

The airlines industry was the largest contributor to return, followed by the air freight & logistics industry. The road & rail industry was the leading detractor from return, followed by the automobiles industry.

Hawaiian Holdings, Inc., United Parcel Service, Inc. — Class B, and Alaska Air Group, Inc. were the biggest contributors to performance for the period. Hertz Global Holdings, Inc., Union Pacific Corp., and BorgWarner, Inc. detracted the most from performance during the period.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	May 14, 2001
H-Class*	June 9, 1998

Ten Largest Holdings (% of Total Net Assets)
United Parcel Service, Inc. — Class B	5.0%
Union Pacific Corp.	4.1%
Ford Motor Co.	3.8%
General Motors Co.	3.6%
FedEx Corp.	3.3%
Delta Air Lines, Inc.	3.2%
Tesla Motors, Inc.	2.8%
Southwest Airlines Co.	2.8%
Johnson Controls, Inc.	2.6%
American Airlines Group, Inc.	2.6%
Top Ten Total	33.8%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 145

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

 

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-10.80%	10.77%	5.15%
A-Class Shares	-11.01%	10.50%	4.90%
A-Class Shares with sales charge†	-15.23%	9.43%	4.40%
C-Class Shares	-11.69%	9.69%	4.10%
C-Class Shares with CDSC‡	-12.57%	9.69%	4.10%
H-Class Shares**	-11.04%	10.28%	4.67%
S&P 500 Industrials Index	3.21%	10.76%	7.06%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Industrials Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

146 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
TRANSPORTATION FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Transportation - 38.9%
United Parcel Service, Inc. — Class B		14,788	$	1,559,691
Union Pacific Corp.		16,059		1,277,494
FedEx Corp.		6,306		1,026,112
Norfolk Southern Corp.		9,496		790,542
CSX Corp.		30,353		781,590
CH Robinson Worldwide, Inc.		7,106		527,478
Canadian Pacific Railway Ltd.		3,957		525,054
J.B. Hunt Transport Services, Inc.		5,819		490,192
Kansas City Southern		5,623		480,485
Expeditors International of Washington, Inc.		9,839		480,242
Canadian National Railway Co.		6,460		403,492
Old Dominion Freight Line, Inc.*		5,538		385,556
Genesee & Wyoming, Inc. — Class A*		4,731		296,634
Ryder System, Inc.		4,530		293,453
Kirby Corp.*		4,700		283,363
XPO Logistics, Inc.*		9,152		280,966
Swift Transportation Co. — Class A*		13,862		258,249
Landstar System, Inc.		3,996		258,182
Knight Transportation, Inc.		8,939		233,755
Werner Enterprises, Inc.		8,247		223,989
Matson, Inc.		5,175		207,880
Hub Group, Inc. — Class A*		4,809		196,159
Heartland Express, Inc.		10,482		194,441
Forward Air Corp.		4,160		188,531
Atlas Air Worldwide Holdings, Inc.*		3,798		160,541
Echo Global Logistics, Inc.*		5,172		140,472
ArcBest Corp.		5,317		114,794
Total Transportation				12,059,337
Airlines - 19.7%
Delta Air Lines, Inc.		20,324		989,371
Southwest Airlines Co.		19,606		878,349
American Airlines Group, Inc.		19,391		795,225
United Continental Holdings, Inc.*		12,578		752,919
Alaska Air Group, Inc.		6,317		518,120
JetBlue Airways Corp.*		20,795		439,190
Ryanair Holdings plc ADR		3,946		338,646
Copa Holdings S.A. — Class A		4,677		316,867
Spirit Airlines, Inc.*		6,184		296,708
Allegiant Travel Co. — Class A		1,523		271,185
Hawaiian Holdings, Inc.*		5,551		261,952
Virgin America, Inc.*		6,151		237,183
Total Airlines				6,095,715
Auto Parts & Equipment - 17.3%
Johnson Controls, Inc.		20,664		805,277
Delphi Automotive plc		9,786		734,146
Goodyear Tire & Rubber Co.		14,717		485,367
BorgWarner, Inc.		12,023		461,683
Lear Corp.		4,138		460,021
Autoliv, Inc.		3,455		409,348
Magna International, Inc.		9,030		387,929
Visteon Corp.		3,571		284,216
Tenneco, Inc.*		5,318		273,930
Cooper Tire & Rubber Co.		6,345		234,892
Dana Holding Corp.		16,282		229,413
Dorman Products, Inc.*		4,081		222,088
Gentherm, Inc.*		4,750		197,553
American Axle & Manufacturing Holdings, Inc.*		11,036		169,844
Total Auto Parts & Equipment				5,355,707
Auto Manufacturers - 15.7%
Ford Motor Co.		87,169		1,176,781
General Motors Co.		35,108		1,103,444
Tesla Motors, Inc.*		3,841		882,547
Tata Motors Ltd. ADR*		13,556		393,802
Fiat Chrysler Automobiles N.V.		43,182		348,047
Toyota Motor Corp. ADR		3,233		343,733
Ferrari N.V.*		7,318		305,161
Honda Motor Company Ltd. ADR		11,118		303,966
Total Auto Manufacturers				4,857,481
Commercial Services - 3.0%
Macquarie Infrastructure Corp.		5,512		371,729
Hertz Global Holdings, Inc.*		30,560		321,798
Avis Budget Group, Inc.*		9,054		247,717
Total Commercial Services				941,244
Leisure Time - 1.6%
Harley-Davidson, Inc.		9,818		503,958
Trucking & Leasing - 1.3%
AMERCO		1,140		407,333
Electronics - 1.1%
Gentex Corp.		21,818		342,324
Home Builders - 1.0%
Thor Industries, Inc.		4,703		299,910
Total Common Stocks
(Cost $21,840,616)				30,863,009

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 147

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
TRANSPORTATION FUND

	Face Amount		Value
REPURCHASE AGREEMENT††,1 - 0.8%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	240,047	$	240,047
Total Repurchase Agreement
(Cost $240,047)				240,047
Total Investments - 100.4%
(Cost $22,080,663)			$	31,103,056
Other Assets & Liabilities, net - (0.4)%				(117,696	)
Total Net Assets - 100.0%			$	30,985,360

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	30,863,009	$	—	$	—	$	30,863,009
Repurchase Agreement		—		240,047		—		240,047
Total	$	30,863,009	$	240,047	$	—	$	31,103,056

For the year ended March 31, 2016, there were no transfers between levels.

148 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

TRANSPORTATION FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $21,840,616)	$	30,863,009
Repurchase agreements, at value (cost $240,047)		240,047
Total investments (cost $22,080,663)		31,103,056
Cash		1,177
Receivables:
Fund shares sold		78,264
Dividends		9,747
Total assets		31,192,244
Liabilities:
Payable for:
Fund shares redeemed		176,000
Management fees		15,862
Transfer agent and administrative fees		4,666
Distribution and service fees		3,671
Portfolio accounting fees		1,866
Miscellaneous		4,819
Total liabilities		206,884
Commitments and contingent liabilities (Note 10)		—
Net assets	$	30,985,360
Net assets consist of:
Paid in capital	$	30,474,780
Undistributed net investment income		45,613
Accumulated net realized loss on investments		(8,557,426	)
Net unrealized appreciation on investments		9,022,393
Net assets	$	30,985,360
Investor Class:
Net assets	$	13,637,737
Capital shares outstanding		295,027
Net asset value per share	$	46.23
A-Class:
Net assets	$	5,339,688
Capital shares outstanding		124,557
Net asset value per share	$	42.87
Maximum offering price per share (Net asset value divided by 95.25%)	$	45.01
C-Class:
Net assets	$	2,977,039
Capital shares outstanding		74,259
Net asset value per share	$	40.09
H-Class:
Net assets	$	9,030,896
Capital shares outstanding		216,517
Net asset value per share	$	41.71

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $6,757)	$	549,656
Income from securities lending, net		3,708
Interest		100
Total investment income		553,464
Expenses:
Management fees		281,247
Transfer agent and administrative fees		82,719
Distribution and service fees:
A-Class		18,700
C-Class		36,147
H-Class**		9,348
Portfolio accounting fees		33,088
Registration fees		33,808
Custodian fees		3,814
Trustees’ fees*		3,086
Line of credit fees		492
Miscellaneous		5,402
Total expenses		507,851
Net investment income		45,613
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		12,642,987
Net realized gain		12,642,987
Net change in unrealized appreciation (depreciation) on:
Investments		(19,150,904	)
Net change in unrealized appreciation (depreciation)		(19,150,904	)
Net realized and unrealized loss		(6,507,917	)
Net decrease in net assets resulting from operations	$	(6,462,304	)

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 149

TRANSPORTATION FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	45,613		$	185,996
Net realized gain on investments		12,642,987			618,158
Net change in unrealized appreciation (depreciation) on investments		(19,150,904	)		8,404,635
Net increase (decrease) in net assets resulting from operations		(6,462,304	)		9,208,789
Distributions to shareholders from:
Net investment income
Investor Class		(68,541	)		—
A-Class		(39,806	)		—
C-Class		(17,180	)		—
H-Class*		(6,812	)		—
Total distributions to shareholders		(132,339	)		—
Capital share transactions:
Proceeds from sale of shares
Investor Class		59,874,682			225,561,497
A-Class		9,344,709			41,341,080
C-Class		13,489,052			28,834,797
H-Class*		25,514,022			41,190,056
Distributions reinvested
Investor Class		66,183			—
A-Class		37,973			—
C-Class		16,835			—
H-Class*		6,762			—
Cost of shares redeemed
Investor Class		(85,095,507	)		(232,830,435	)
A-Class		(18,030,528	)		(40,894,730	)
C-Class		(16,300,469	)		(26,857,147	)
H-Class*		(22,304,004	)		(37,870,325	)
Net decrease from capital share transactions		(33,380,290	)		(1,525,207	)
Net increase (decrease) in net assets		(39,974,933	)		7,683,582
Net assets:
Beginning of year		70,960,293			63,276,711
End of year	$	30,985,360		$	70,960,293
Undistributed net investment income at end of year	$	45,613		$	132,339
Capital share activity:
Shares sold
Investor Class		1,248,273			4,633,899
A-Class		212,086			919,079
C-Class		323,931			671,966
H-Class*		585,638			922,719
Shares issued from reinvestment of distributions
Investor Class		1,414			—
A-Class		874			—
C-Class		413			—
H-Class*		160			—
Shares redeemed
Investor Class		(1,779,677	)		(4,795,289	)
A-Class		(405,659	)		(912,772	)
C-Class		(390,453	)		(626,094	)
H-Class*		(501,890	)		(853,724	)
Net decrease in shares		(704,890	)		(40,216	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

150 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

TRANSPORTATION 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	52.06		$	44.63		$	32.07		$	26.96		$	27.85
Income (loss) from investment operations:
Net investment income (loss)a		.16			.18			(.04	)		(.07	)		(.06	)
Net gain (loss) on investments (realized and unrealized)		(5.78	)		7.25			12.60			5.18			(.83	)
Total from investment operations		(5.62	)		7.43			12.56			5.11			(.89	)
Less distributions from:
Net investment income		(.21	)		—			—			—			—
Total distributions		(.21	)		—			—			—			—
Net asset value, end of period	$	46.23		$	52.06		$	44.63		$	32.07		$	26.96
Total Returnb		(10.80	%)		16.65	%		39.16	%		18.95	%		(3.20	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,638		$	42,947		$	44,021		$	78,644		$	8,031
Ratios to average net assets:
Net investment income (loss)		0.33	%		0.37	%		(0.09	%)		(0.25	%)		(0.22	%)
Total expenses		1.34	%		1.35	%		1.37	%		1.37	%		1.35	%
Portfolio turnover rate		219	%		247	%		593	%		737	%		1,082	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	48.41		$	41.61		$	29.96		$	25.25		$	26.15
Income (loss) from investment operations:
Net investment income (loss)a		.04			.05			(.11	)		(.01	)		(.12	)
Net gain (loss) on investments (realized and unrealized)		(5.37	)		6.75			11.76			4.72			(.78	)
Total from investment operations		(5.33	)		6.80			11.65			4.71			(.90	)
Less distributions from:
Net investment income		(.21	)		—			—			—			—
Total distributions		(.21	)		—			—			—			—
Net asset value, end of period	$	42.87		$	48.41		$	41.61		$	29.96		$	25.25
Total Returnb		(11.01	%)		16.34	%		38.89	%		18.70	%		(3.48	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,340		$	15,359		$	12,938		$	4,558		$	1,600
Ratios to average net assets:
Net investment income (loss)		0.08	%		0.12	%		(0.28	%)		(0.05	%)		(0.51	%)
Total expenses		1.60	%		1.60	%		1.62	%		1.60	%		1.61	%
Portfolio turnover rate		219	%		247	%		593	%		737	%		1,082	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 151

TRANSPORTATION 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	45.63		$	39.52		$	28.67		$	24.34		$	25.38
Income (loss) from investment operations:
Net investment income (loss)a		(.24	)		(.27	)		(.37	)		(.26	)		(.29	)
Net gain (loss) on investments (realized and unrealized)		(5.09	)		6.38			11.22			4.59			(.75	)
Total from investment operations		(5.33	)		6.11			10.85			4.33			(1.04	)
Less distributions from:
Net investment income		(.21	)		—			—			—			—
Total distributions		(.21	)		—			—			—			—
Net asset value, end of period	$	40.09		$	45.63		$	39.52		$	28.67		$	24.34
Total Returnb		(11.69	%)		15.46	%		37.84	%		17.79	%		(4.10	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,977		$	6,405		$	3,734		$	2,727		$	2,729
Ratios to average net assets:
Net investment income (loss)		(0.57	%)		(0.62	%)		(1.07	%)		(1.06	%)		(1.24	%)
Total expenses		2.35	%		2.35	%		2.37	%		2.35	%		2.35	%
Portfolio turnover rate		219	%		247	%		593	%		737	%		1,082	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	47.12		$	40.61		$	29.32		$	24.76		$	25.70
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.10	)		(.18	)		(.15	)		(.14	)
Net gain (loss) on investments (realized and unrealized)		(5.11	)		6.61			11.47			4.71			(.80	)
Total from investment operations		(5.20	)		6.51			11.29			4.56			(.94	)
Less distributions from:
Net investment income		(.21	)		—			—			—			—
Total distributions		(.21	)		—			—			—			—
Net asset value, end of period	$	41.71		$	47.12		$	40.61		$	29.32		$	24.76
Total Returnb		(11.04	%)		16.03	%		38.51	%		18.42	%		(3.66	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,031		$	6,249		$	2,583		$	4,483		$	2,355
Ratios to average net assets:
Net investment income (loss)		(0.20	%)		(0.22	%)		(0.50	%)		(0.57	%)		(0.55	%)
Total expenses		1.72	%		1.85	%		1.87	%		1.86	%		1.86	%
Portfolio turnover rate		219	%		247	%		593	%		737	%		1,082	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

152 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

UTILITIES FUND

OBJECTIVE: Seeks to provide capital appreciation by investing in companies that operate public utilities (“utilities companies”).

For the one-year period ended March 31, 2016, Utilities Fund Investor Class returned 10.61%, compared with 15.96% for the S&P 500 Utilities Index. The broader S&P 500 Index returned 1.78%.

The electric utilities industry provided the largest contribution to return, followed by the multi-utilities segment. The independent power & renewable electricity producers detracted the most from return, followed by the oil, gas & consumable fuels industry.

Southern Co., NextEra Energy, Inc., and Consolidated Edison, Inc. were the best-performing holdings over the period, while TerraForm Power, Inc.—Class A, NRG Energy, Inc., and Dynegy, Inc. were the main detractors.

Performance displayed represents past performance, which is no guarantee of future results.

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
A-Class	September 1, 2004
C-Class	April 27, 2001
H-Class*	April 3, 2000

Ten Largest Holdings (% of Total Net Assets)
Duke Energy Corp.	3.5%
NextEra Energy, Inc.	3.4%
Southern Co.	3.2%
Dominion Resources, Inc.	3.1%
Exelon Corp.	2.7%
American Electric Power Company, Inc.	2.7%
PG&E Corp.	2.5%
Sempra Energy	2.4%
PPL Corp.	2.4%
Public Service Enterprise Group, Inc.	2.3%
Top Ten Total	28.2%
“Ten Largest Holdings” excludes any temporary cash investments.

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

THE RYDEX FUNDS ANNUAL REPORT | 153

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

 

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	10.61%	10.92%	7.82%
A-Class Shares	10.38%	10.65%	7.56%
A-Class Shares with sales charge†	5.14%	9.58%	7.03%
C-Class Shares	9.55%	9.81%	6.74%
C-Class Shares with CDSC‡	8.55%	9.81%	6.74%
H-Class Shares**	10.31%	10.41%	7.31%
S&P 500 Utilities Index	15.96%	13.68%	9.10%
S&P 500 Index	1.78%	11.58%	7.01%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the S&P 500 Utilities Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

154 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
UTILITIES FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Electric - 73.8%
Duke Energy Corp.		38,839	$	3,133,530
NextEra Energy, Inc.		26,001		3,076,957
Southern Co.		56,119		2,903,035
Dominion Resources, Inc.		37,248		2,798,069
Exelon Corp.		67,966		2,437,260
American Electric Power Company, Inc.		36,166		2,401,422
PG&E Corp.		37,973		2,267,748
PPL Corp.		55,686		2,119,966
Public Service Enterprise Group, Inc.		43,571		2,053,937
Edison International		28,258		2,031,468
Consolidated Edison, Inc.		25,974		1,990,128
Xcel Energy, Inc.		45,994		1,923,469
WEC Energy Group, Inc.		30,537		1,834,358
Eversource Energy		30,533		1,781,295
DTE Energy Co.		18,774		1,702,051
FirstEnergy Corp.		45,195		1,625,664
Entergy Corp.		19,767		1,567,128
Ameren Corp.		29,476		1,476,748
Avangrid, Inc.		36,690		1,471,636
CMS Energy Corp.		34,054		1,445,252
SCANA Corp.		19,208		1,347,441
Alliant Energy Corp.		16,512		1,226,511
Pinnacle West Capital Corp.		16,154		1,212,681
AES Corp.		98,212		1,158,902
Westar Energy, Inc.		22,649		1,123,617
ITC Holdings Corp.		24,995		1,089,032
TECO Energy, Inc.		38,925		1,071,605
OGE Energy Corp.		34,898		999,130
Calpine Corp.*		64,803		983,062
Great Plains Energy, Inc.		29,207		941,926
Cleco Corp.		14,825		818,488
IDACORP, Inc.		10,932		815,418
MDU Resources Group, Inc.		41,589		809,322
NRG Energy, Inc.		61,716		802,925
Hawaiian Electric Industries, Inc.*		24,237		785,279
Portland General Electric Co.		19,645		775,781
Black Hills Corp.		12,314		740,441
Enersis Americas S.A. ADR		52,560		730,584
Korea Electric Power Corp. ADR		28,333		729,575
NorthWestern Corp.		11,770		726,798
Abengoa Yield plc		39,985		710,934
PNM Resources, Inc.		20,367		686,775
ALLETE, Inc.		12,079		677,270
NRG Yield, Inc. — Class C		47,510		676,542
Avista Corp.		16,372		667,650
El Paso Electric Co.		12,602		578,180
Dynegy, Inc.*		37,552		539,622
Empire District Electric Co.		15,200		502,360
Talen Energy Corp.*		48,703		438,327
Total Electric				66,407,299
Gas - 19.0%
Sempra Energy		20,393		2,121,893
CenterPoint Energy, Inc.		59,346		1,241,519
AGL Resources, Inc.		18,110		1,179,685
Atmos Energy Corp.		15,622		1,160,090
NiSource, Inc.		48,566		1,144,215
UGI Corp.		27,418		1,104,671
Piedmont Natural Gas Company, Inc.		15,456		924,732
Questar Corp.		35,469		879,631
Vectren Corp.		16,947		856,840
National Fuel Gas Co.		16,810		841,341
National Grid plc ADR		11,203		800,118
WGL Holdings, Inc.		11,017		797,300
ONE Gas, Inc.		12,387		756,846
New Jersey Resources Corp.		20,475		745,904
Southwest Gas Corp.		11,252		740,944
Laclede Group, Inc.		10,635		720,521
South Jersey Industries, Inc.		20,944		595,857
Northwest Natural Gas Co.		9,600		516,960
Total Gas				17,129,067
Water - 4.1%
American Water Works Company, Inc.		21,038		1,450,150
Aqua America, Inc.		31,031		987,406
Cia de Saneamento Basico do Estado de Sao Paulo ADR		109,354		721,736
American States Water Co.		13,119		516,364
Total Water				3,675,656
Pipelines - 1.5%
Columbia Pipeline Group, Inc.		54,871		1,377,262
Kinder Morgan, Inc.		1		18
Total Pipelines				1,377,280
Energy-Alternate Sources - 1.1%
Pattern Energy Group, Inc.		26,075		497,250
TerraForm Power, Inc. — Class A		56,472		488,483
Total Energy-Alternate Sources				985,733
Total Common Stocks
(Cost $69,466,141)				89,575,035

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 155

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
UTILITIES FUND

	Face Amount		Value
REPURCHASE AGREEMENT††,1 - 1.4%
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	$	1,281,503	$	1,281,503
Total Repurchase Agreement
(Cost $1,281,503)				1,281,503
Total Investments - 100.9%
(Cost $70,747,644)			$	90,856,538
Other Assets & Liabilities, net - (0.9)%				(769,289	)
Total Net Assets - 100.0%			$	90,087,249

*	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 Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	89,575,035	$	—	$	—	$	89,575,035
Repurchase Agreement		—		1,281,503		—		1,281,503
Total	$	89,575,035	$	1,281,503	$	—	$	90,856,538

For the year ended March 31, 2016, there were no transfers between levels.

156 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

UTILITIES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $69,466,141)	$	89,575,035
Repurchase agreements, at value (cost $1,281,503)		1,281,503
Total investments (cost $70,747,644)		90,856,538
Receivables:
Fund shares sold		1,838,718
Dividends		175,058
Foreign taxes reclaim		974
Interest		8
Total assets		92,871,296
Liabilities:
Payable for:
Securities purchased		2,062,735
Fund shares redeemed		611,262
Management fees		62,330
Transfer agent and administrative fees		18,332
Distribution and service fees		14,020
Portfolio accounting fees		7,333
Miscellaneous		8,035
Total liabilities		2,784,047
Commitments and contingent liabilities (Note 10)		—
Net assets	$	90,087,249
Net assets consist of:
Paid in capital	$	76,758,015
Undistributed net investment income		—
Accumulated net realized loss on investments		(6,779,660	)
Net unrealized appreciation on investments		20,108,894
Net assets	$	90,087,249
Investor Class:
Net assets	$	50,753,137
Capital shares outstanding		1,261,563
Net asset value per share	$	40.23
A-Class:
Net assets	$	22,447,790
Capital shares outstanding		596,526
Net asset value per share	$	37.63
Maximum offering price per share (Net asset value divided by 95.25%)	$	39.51
C-Class:
Net assets	$	10,438,546
Capital shares outstanding		316,747
Net asset value per share	$	32.96
H-Class:
Net assets	$	6,447,776
Capital shares outstanding		177,137
Net asset value per share	$	36.40

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $6,521)	$	1,809,924
Income from securities lending, net		1,053
Interest		269
Total investment income		1,811,246
Expenses:
Management fees		459,134
Transfer agent and administrative fees		135,039
Distribution and service fees:
A-Class		29,121
C-Class		73,307
H-Class**		24,071
Portfolio accounting fees		54,015
Tax expense		11,152
Custodian fees		6,279
Trustees’ fees*		3,770
Line of credit fees		363
Miscellaneous		57,743
Total expenses		853,994
Net investment income		957,252
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		376,530
Net realized gain		376,530
Net change in unrealized appreciation (depreciation) on:
Investments		4,295,317
Net change in unrealized appreciation (depreciation)		4,295,317
Net realized and unrealized gain		4,671,847
Net increase in net assets resulting from operations	$	5,629,099

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 157

UTILITIES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	957,252		$	1,972,875
Net realized gain (loss) on investments		376,530			(770,439	)
Net change in unrealized appreciation (depreciation) on investments		4,295,317			2,118,506
Net increase in net assets resulting from operations		5,629,099			3,320,942
Distributions to shareholders from:
Net investment income
Investor Class		(406,169	)		(272,237	)
A-Class		(268,532	)		(26,090	)
C-Class		(122,718	)		(39,413	)
H-Class*		(173,650	)		(76,869	)
Total distributions to shareholders		(971,069	)		(414,609	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		150,469,741			270,237,495
A-Class		48,138,913			49,228,912
C-Class		22,853,937			34,705,230
H-Class*		142,307,243			237,983,954
Distributions reinvested
Investor Class		394,790			144,586
A-Class		260,843			22,710
C-Class		121,826			35,206
H-Class*		173,410			76,768
Cost of shares redeemed
Investor Class		(157,218,282	)		(313,431,370	)
A-Class		(37,759,601	)		(51,074,156	)
C-Class		(21,684,803	)		(35,228,923	)
H-Class*		(149,530,278	)		(226,632,966	)
Net decrease from capital share transactions		(1,472,261	)		(33,932,554	)
Net increase (decrease) in net assets		3,185,769			(31,026,221	)
Net assets:
Beginning of year		86,901,480			117,927,701
End of year	$	90,087,249		$	86,901,480
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold
Investor Class		4,123,058			7,335,372
A-Class		1,422,806			1,412,405
C-Class		771,627			1,145,355
H-Class*		4,366,895			7,128,509
Shares issued from reinvestment of distributions
Investor Class		11,581			3,887
A-Class		8,172			650
C-Class		4,346			1,130
H-Class*		5,619			2,266
Shares redeemed
Investor Class		(4,364,735	)		(8,665,636	)
A-Class		(1,116,343	)		(1,487,751	)
C-Class		(733,416	)		(1,166,095	)
H-Class*		(4,598,364	)		(6,800,787	)
Net decrease in shares		(98,754	)		(1,090,695	)

* Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.

158 | THE RYDEX FUNDS 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	36.98		$	34.01		$	32.71		$	29.13		$	27.00
Income (loss) from investment operations:
Net investment income (loss)a		.73			.84			.78			.74			.73
Net gain (loss) on investments (realized and unrealized)		3.09			2.26			1.98			3.96			1.80
Total from investment operations		3.82			3.10			2.76			4.70			2.53
Less distributions from:
Net investment income		(.57	)		(.13	)		(1.46	)		(1.12	)		(.40	)
Total distributions		(.57	)		(.13	)		(1.46	)		(1.12	)		(.40	)
Net asset value, end of period	$	40.23		$	36.98		$	34.01		$	32.71		$	29.13
Total Returnb		10.61	%		9.12	%		8.88	%		16.75	%		9.44	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	50,753		$	55,156		$	95,854		$	42,907		$	37,469
Ratios to average net assets:
Net investment income (loss)		2.00	%		2.31	%		2.38	%		2.45	%		2.59	%
Total expenses		1.35	%		1.35	%		1.40	%		1.35	%		1.35	%
Portfolio turnover rate		475	%		384	%		508	%		534	%		549	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	34.70		$	32.02		$	30.95		$	27.69		$	25.75
Income (loss) from investment operations:
Net investment income (loss)a		.63			.66			.63			.65			.67
Net gain (loss) on investments (realized and unrealized)		2.87			2.15			1.90			3.73			1.67
Total from investment operations		3.50			2.81			2.53			4.38			2.34
Less distributions from:
Net investment income		(.57	)		(.13	)		(1.46	)		(1.12	)		(.40	)
Total distributions		(.57	)		(.13	)		(1.46	)		(1.12	)		(.40	)
Net asset value, end of period	$	37.63		$	34.70		$	32.02		$	30.95		$	27.69
Total Returnb		10.38	%		8.78	%		8.64	%		16.46	%		9.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	22,448		$	9,782		$	11		$	6,938		$	7,912
Ratios to average net assets:
Net investment income (loss)		1.85	%		1.93	%		2.05	%		2.26	%		2.47	%
Total expenses		1.60	%		1.60	%		1.63	%		1.61	%		1.60	%
Portfolio turnover rate		475	%		384	%		508	%		534	%		549	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 159

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.

C-Class	Year Ended March 31, 2016				Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	30.70			$	28.55		$	27.96		$	25.31		$	23.76
Income (loss) from investment operations:
Net investment income (loss)a		.28				.36			.34			.42			.42
Net gain (loss) on investments (realized and unrealized)		2.55				1.92			1.71			3.35			1.53
Total from investment operations		2.83				2.28			2.05			3.77			1.95
Less distributions from:
Net investment income		(.57	)	��		(.13	)		(1.46	)		(1.12	)		(.40	)
Total distributions		(.57	)			(.13	)		(1.46	)		(1.12	)		(.40	)
Net asset value, end of period	$	32.96			$	30.70		$	28.55		$	27.96		$	25.31
Total Returnb		9.55	%			7.99	%		7.83	%		15.58	%		8.28	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,439			$	8,417		$	8,387		$	7,001		$	6,961
Ratios to average net assets:
Net investment income (loss)		0.94	%			1.18	%		1.22	%		1.62	%		1.70	%
Total expenses		2.35	%			2.35	%		2.38	%		2.36	%		2.35	%
Portfolio turnover rate		475	%			384	%		508	%		534	%		549	%

H-Classc	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	33.61		$	31.09		$	30.19		$	27.10		$	25.26
Income (loss) from investment operations:
Net investment income (loss)a		.54			.60			.69			.48			.56
Net gain (loss) on investments (realized and unrealized)		2.82			2.05			1.67			3.73			1.68
Total from investment operations		3.36			2.65			2.36			4.21			2.24
Less distributions from:
Net investment income		(.57	)		(.13	)		(1.46	)		(1.12	)		(.40	)
Total distributions		(.57	)		(.13	)		(1.46	)		(1.12	)		(.40	)
Net asset value, end of period	$	36.40		$	33.61		$	31.09		$	30.19		$	27.10
Total Returnb		10.31	%		8.53	%		8.29	%		16.23	%		8.90	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,448		$	13,546		$	2,269		$	4,812		$	8,036
Ratios to average net assets:
Net investment income (loss)		1.65	%		1.79	%		2.32	%		1.70	%		2.11	%
Total expenses		1.68	%		1.84	%		1.88	%		1.85	%		1.84	%
Portfolio turnover rate		475	%		384	%		508	%		534	%		549	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares. The financial highlights for periods prior to that date reflect the performance of the former Advisor Class — See Note 9.

160 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Organization

The Rydex Series Funds (the “Trust”), a Delaware statutory trust, is registered with the SEC under the Investment Company Act of 1940 (”1940 Act”), as an 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 seven separate classes of shares: Investor Class shares, A-Class shares, C-Class shares, H-Class shares, P-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. At March 31, 2016, the Trust consisted of fifty-three funds.

This report covers the 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 and Utilities Fund (the “Funds”), each a non-diversified investment company. Only Investor Class, A-Class, C-Class and H-Class had been issued by the Funds.

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.

Guggenheim Investments (“GI”) provides advisory services, and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI, RFS and GFD are affiliated entities.

Significant Accounting Policies

The Funds operate as investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

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.

The NAV of each Class of the Funds is calculated by dividing the market value of the Fund’s securities and other assets, less all liabilities, attributable to the Class by the number of outstanding shares of the Class.

A. The Board of Trustees of the Funds (the “Board”) has adopted policies and procedures for the valuation of the Funds’ investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Board has delegated to a valuation committee, consisting of representatives from Guggenheim’s investment management, fund administration, legal and compliance departments (the “Valuation Committee”), the day-to-day responsibility for implementing the Valuation

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NOTES TO FINANCIAL STATEMENTS (continued)

Procedures, including, under most circumstances, the responsibility for determining the fair value of the Funds’ securities or other assets.

Valuations of the Funds’ securities are supplied primarily by pricing services appointed pursuant to the processes set forth in the Valuation Procedures. The Valuation Committee convenes monthly, or more frequently as needed and will review the valuation of all assets which have been fair valued for reasonableness. The Funds’ officers, through the Valuation Committee and consistent with the monitoring and review responsibilities set forth in the Valuation Procedures, regularly review procedures used by, and valuations provided by, the pricing services.

If the pricing service cannot or does not provide a valuation for a particular investment or such valuation is deemed unreliable, such investment is fair valued by the Valuation Committee.

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, which may not necessarily represent the last sale price. If there has been no sale on such exchange or NASDAQ on a given day, the security is valued at the closing bid price on that day.

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”) are valued at the last quoted sales price.

Repurchase agreements are valued at amortized cost, provided such amounts approximate 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. Valuations in accordance with these methods are intended to reflect each security’s (or asset’s) “fair value.” Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to: (i) the type of security, (ii) the initial cost of the security, (iii) the existence of any contractual restrictions on the security’s disposition, (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies, (v) quotations or evaluated prices from broker-dealers and/or pricing services, (vi) information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), (vii) an analysis of the company’s financial statements, and (viii) an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold (e.g. the existence of pending merger activity, public offerings or tender offers that might affect the value of the security).

The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Funds to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which could affect the market and/or credit risk of the investments.

The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Reported net realized foreign exchange gains and 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.

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,

162 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

is accrued on a daily basis. Dividend income from REITs is recorded based on the income included in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts.

C. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Dividends are reinvested in additional shares unless shareholders request payment in cash. 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. 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 and service fees 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.

E. The Funds may leave cash overnight in their cash account with the custodian. 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, which was 0.25% at March 31, 2016.

F. Under the Funds’ organizational documents, their Trustees and Officers are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, 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 Funds pay GI investment advisory fees calculated at their annualized rates below, based on the average daily net assets of the Funds:

Fund	Management Fees (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 for fees calculated at the annualized rate of 0.25% based on 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 Plan applicable to A-Class shares and H-Class shares for which GFD 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 GFD at

THE RYDEX FUNDS ANNUAL REPORT | 163

NOTES TO FINANCIAL STATEMENTS (continued)

an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GFD, in turn, will pay the Service Provider out of its fees. GFD 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 a shareholder’s financial adviser for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GFD for paying the shareholder’s financial adviser an ongoing sales commission. GFD advances the first year’s service and distribution fees to the financial adviser. GFD retains the service and distribution fees on accounts with no authorized dealer of record.

For the year ended March 31, 2016, GFD retained sales charges of $349,121 relating to sales of A-Class shares of the Trust.

Certain trustees and officers of the Trust are also officers of GI, RFS and GFD.

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. The Funds’ federal tax returns are subject to examination by the Internal Revenue Service for a period of three years after they are filed.

Tax basis capital losses in excess of capital gains are carried forward to offset future net capital gains. For the year ended March 31, 2016, the following capital loss carryforward amounts were expired or used:

Fund	Expired		Used
Banking Fund	$	311,892	$	—
Electronics Fund		1,900,883		179,016
Retailing Fund		—		960,359
Technology Fund		—		1,474,600
Transportation Fund		—		10,778,478

164 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributions paid during the year ended March 31, 2016 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Banking Fund	$	84,494	$	—	$	84,494
Basic Materials Fund		348,553		—		348,553
Biotechnology Fund		9,120,814		—		9,120,814
Consumer Products Fund		7,107,463		—		7,107,463
Electronics Fund		42,413		—		42,413
Energy Fund		334,376		369,647		704,023
Energy Services Fund		231,483		—		231,483
Financial Services Fund		277,773		141,563		419,336
Health Care Fund		4,516,377		2,057,091		6,573,468
Internet Fund		142,232		88,617		230,849
Leisure Fund		285,529		96,180		381,709
Precious Metals Fund		183,913		—		183,913
Real Estate Fund		433,218		—		433,218
Retailing Fund		32,233		—		32,233
Technology Fund		—		—		—
Telecommunications Fund		97,383		—		97,383
Transportation Fund		132,339		—		132,339
Utilities Fund		968,404		2,665		971,069

The tax character of distributions paid during the year ended March 31, 2015 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Banking Fund	$	104,722	$	—	$	104,722
Basic Materials Fund		232,153		—		232,153
Biotechnology Fund		16,555,696		3,761,283		20,316,979
Consumer Products Fund		4,013,864		—		4,013,864
Electronics Fund		—		—		—
Energy Fund		200,733		—		200,733
Energy Services Fund		—		—		—
Financial Services Fund		149,519		—		149,519
Health Care Fund		498,400		2,095,865		2,594,265
Internet Fund		399,239		—		399,239
Leisure Fund		94,646		893,915		988,561
Precious Metals Fund		1,329,325		—		1,329,325
Real Estate Fund		391,160		—		391,160
Retailing Fund		—		—		—
Technology Fund		—		—		—
Telecommunications Fund		98,119		—		98,119
Transportation Fund		—		—		—
Utilities Fund		414,609		—		414,609

Note: For federal income tax purposes, short-term capital gain distributions are treated as ordinary income distributions.

THE RYDEX FUNDS ANNUAL REPORT | 165

NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributable earnings/(accumulated losses) at March 31, 2016 was as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ (Depreciation)			Capital Loss Carryforward & Other Losses
Banking Fund	$	269,048	$	—	$	(1,822,431	)	$	(22,660,824	)
Basic Materials Fund		272,721		—		2,524,336			(19,896,608	)
Biotechnology Fund		—		—		105,155,672			(1,026,432	)
Consumer Products Fund		3,614,069		—		87,400,895			—
Electronics Fund		—		—		1,327,249			(12,064,385	)
Energy Fund		476,798		—		(2,155,018	)		(11,192,187	)
Energy Services Fund		125,275		—		(1,888,283	)		(29,421,224	)
Financial Services Fund		570,253		—		2,499,116			(7,466,557	)
Health Care Fund		—		5,852,628		15,304,103			(54,612	)
Internet Fund		—		—		154,628			(1,972,602	)
Leisure Fund		131,755		—		3,717,346			(1,451,595	)
Precious Metals Fund		3,117,567		—		(11,125,562	)		(31,104,851	)
Real Estate Fund		396,278		—		1,928,318			(13,873,084	)
Retailing Fund		—		—		3,864,794			(3,291,565	)
Technology Fund		—		—		5,075,546			(3,635,642	)
Telecommunications Fund		79,745		—		1,659,098			(5,077,068	)
Transportation Fund		45,613		—		6,633,648			(6,168,681	)
Utilities Fund		—		387,725		12,941,509			—

Capital Loss Carryforward amounts may be limited due to Federal income tax regulations.

For Federal income tax purposes, capital loss carryforwards represent realized losses of the Funds that may be carried forward and applied against future capital gains. For taxable years beginning on or before December 22, 2010, such capital losses may be carried forward for a maximum of eight years. Under the RIC Modernization Act of 2010, the 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 taxable years must be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to 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. As of March 31, 2016, capital loss carryforwards for the Funds were as follows:

	Expires in			Expires in			Expires in			Unlimited						Total Capital Loss
Fund	2017			2018			2019			Short-Term			Long-Term			Carryforward
Banking Fund	$	(1,809,926	)	$	(16,385,824	)	$	(912,723	)	$	(2,545,696	)	$	(1,006,655	)	$	(22,660,824	)
Basic Materials Fund		(6,151,760	)		(8,009,421	)		—			(5,143,141	)		(592,286	)		(19,896,608	)
Biotechnology Fund		—			—			—			—			—			—
Consumer Products Fund		—			—			—			—			—			—
Electronics Fund		(6,118,835	)		—			(3,055,204	)		(2,890,346	)		—			(12,064,385	)
Energy Fund		—			—			—			(6,961,730	)		(4,230,457	)		(11,192,187	)
Energy Services Fund		(16,789,802	)		(5,702,829	)		—			(2,922,912	)		(4,005,681	)		(29,421,224	)
Financial Services Fund		—			—			—			(4,369,001	)		(3,097,556	)		(7,466,557	)
Health Care Fund		—			—			—			—			—			—
Internet Fund		—			—			—			(1,925,774	)		(46,828	)		(1,972,602	)
Leisure Fund		—			—			—			(939,875	)		(511,720	)		(1,451,595	)
Precious Metals Fund		—			—			—			(6,419,042	)		(24,685,809	)		(31,104,851	)
Real Estate Fund		(2,247,435	)		(4,305,317	)		—			(7,095,816	)		(224,516	)		(13,873,084	)
Retailing Fund		(1,564,877	)		—			—			(1,437,831	)		(288,857	)		(3,291,565	)
Technology Fund		(2,466,468	)		—			—			—			—			(2,466,468	)
Telecommunications Fund		(1,745,552	)		—			—			(2,571,910	)		(759,606	)		(5,077,068	)
Transportation Fund		—			—			(5,518,257	)		—			—			(5,518,257	)
Utilities Fund		—			—			—			—			—			—

166 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are typically due to qualified late year losses, losses deferred due to wash sales, utilization of earnings and profits on shareholder redemption and the mark-to-market of certain passive foreign investment companies (PFICs), as well as securities no longer considered PFICs, for tax purposes. Additional differences may result from tax treatment of net investment losses and expired capital loss carryforwards. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise. These reclassifications have no effect on the net assets or NAV per share.

On the Statements of Assets and Liabilities the following adjustments were made for permanent book/tax differences:

Fund	Paid In Capital			Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
Banking Fund	$	(311,892	)	$	—	$	311,892
Basic Materials Fund		(1,270	)		79,268		(77,998	)
Biotechnology Fund		4,298,011			5,244,397		(9,542,408	)
Consumer Products Fund		(22,118	)		22,118		—
Electronics Fund		(1,949,355	)		48,472		1,900,883
Energy Fund		—			—		—
Energy Services Fund		1			—		(1	)
Financial Services Fund		—			—		—
Health Care Fund		18,470,392			464,141		(18,934,533	)
Internet Fund		(226,950	)		240,202		(13,252	)
Leisure Fund		2			—		(2	)
Precious Metals Fund		2			693,251		(693,253	)
Real Estate Fund		(9,095	)		9,095		—
Retailing Fund		(136,470	)		136,470		—
Technology Fund		(130,580	)		237,561		(106,981	)
Telecommunications Fund		(32	)		33		(1	)
Transportation Fund		—			—		—
Utilities Fund		(11,152	)		13,817		(2,665	)

At March 31, 2016, 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:

Fund	Tax Cost		Tax Unrealized Gain		Tax Unrealized Loss			Net Unrealized Gain (Loss)
Banking Fund	$	14,508,056	$	—	$	(1,822,431	)	$	(1,822,431	)
Basic Materials Fund		37,353,102		2,724,460		(200,124	)		2,524,336
Biotechnology Fund		258,114,475		134,370,999		(29,215,327	)		105,155,672
Consumer Products Fund		330,753,812		89,070,328		(1,669,433	)		87,400,895
Electronics Fund		20,739,656		1,436,861		(109,612	)		1,327,249
Energy Fund		37,642,699		—		(2,155,018	)		(2,155,018	)
Energy Services Fund		18,616,485		—		(1,888,283	)		(1,888,283	)
Financial Services Fund		17,714,451		2,768,367		(269,251	)		2,499,116
Health Care Fund		49,382,395		15,930,425		(626,322	)		15,304,103
Internet Fund		35,865,382		573,770		(419,142	)		154,628
Leisure Fund		34,217,761		4,059,994		(342,648	)		3,717,346
Precious Metals Fund		73,482,055		—		(11,125,562	)		(11,125,562	)
Real Estate Fund		43,540,534		1,953,053		(24,735	)		1,928,318
Retailing Fund		18,595,221		4,019,262		(154,468	)		3,864,794
Technology Fund		29,501,199		5,523,322		(447,776	)		5,075,546
Telecommunications Fund		29,951,023		1,772,379		(113,281	)		1,659,098
Transportation Fund		24,469,408		6,796,715		(163,067	)		6,633,648
Utilities Fund		77,915,029		13,020,461		(78,952	)		12,941,509

THE RYDEX FUNDS ANNUAL REPORT | 167

NOTES TO FINANCIAL STATEMENTS (continued)

Pursuant to Federal income tax regulations applicable to regulated investment companies, the Funds have elected to treat net capital losses and certain ordinary losses realized between November 1 and March 31 of each year as occurring on the first day of the following tax year. The Funds have also elected to treat certain ordinary losses realized between January 1 and March 31 of each year as occurring on the first day of the following tax year. For the year ended March 31, 2016, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2016:

Fund	Ordinary			Capital
Biotechnology Fund	$	(1,026,432	)	$	—
Health Care Fund		(54,612	)		—
Technology Fund		(2,535	)		(1,166,639	)
Transportation Fund		—			(650,424	)

4. Fair Value Measurement

In accordance with U.S. GAAP, fair value is defined as the price that the Funds 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. U.S. GAAP establishes a three-tier fair value hierarchy based on the types of inputs used to value assets and liabilities and requires corresponding disclosure. The hierarchy and the corresponding inputs are summarized below:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — significant other observable inputs (for example quoted prices for securities that are similar based on characteristics such as interest rates, prepayment speeds, credit risk, etc.).

Level 3 — significant unobservable inputs based on the best information available under the circumstances, to the extent observable inputs are not available, which may include assumptions.

The types of inputs available depend on a variety of factors, such as the type of security and the characteristics of the markets in which it trades, if any. Fair valuation determinations that rely on fewer or no observable inputs require greater judgment. Accordingly, fair value determinations for Level 3 securities require the greatest amount of judgment.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The suitability of the techniques and sources employed to determine fair valuation are regularly monitored and subject to change.

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 March 31, 2016, 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
0.21%					0.00%
Due 04/01/16	$	7,259,573	$	7,259,615	05/15/43	$	15,646,800	$	7,404,765

168 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 adviser, 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

During the year ended March 31, 2016, certain Funds lent their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations are net of rebates paid to borrowers and earnings on cash collateral investments shared with the lending agent. As of March 31, 2016, all Funds had ceased participation in securities lending.

7. Securities Transactions

For the year ended March 31, 2016, the cost of purchases and proceeds from sales of investment securities, excluding government securities, short-term investments and derivatives, were as follows:

Fund	Purchases		Sales
Banking Fund	$	162,942,924	$	196,279,868
Basic Materials Fund		150,097,979		163,039,438
Biotechnology Fund		526,766,560		675,700,309
Consumer Products Fund		400,358,521		329,312,104
Electronics Fund		200,703,097		203,072,199
Energy Fund		265,206,591		256,346,160
Energy Services Fund		271,985,230		272,416,028
Financial Services Fund		127,392,675		155,991,446
Health Care Fund		428,789,302		601,349,435
Internet Fund		226,413,365		199,539,764
Leisure Fund		154,166,626		180,843,115
Precious Metals Fund		335,690,505		327,939,460
Real Estate Fund		238,315,260		237,029,347
Retailing Fund		121,705,774		171,641,605
Technology Fund		152,091,470		149,795,293
Telecommunications Fund		101,357,624		73,025,290
Transportation Fund		73,598,782		107,085,588
Utilities Fund		268,291,703		269,776,110

THE RYDEX FUNDS ANNUAL REPORT | 169

NOTES TO FINANCIAL STATEMENTS (continued)

The Funds are permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by a Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each transaction is effected at the current market price to save costs, where permissible. For the year ended March 31, 2016, the Funds engaged in purchases and sales of securities, pursuant to Rule 17a-7 of the 1940 Act, as follows:

Fund	Purchases		Sales		Realized Gain (Loss)
Banking Fund	$	13,037,300	$	11,609,426	$	(252,851	)
Basic Materials Fund		12,753,240		12,087,597		(121,748	)
Biotechnology Fund		16,510,032		14,554,206		(21,910	)
Consumer Products Fund		18,983,468		10,226,267		(318,972	)
Electronics Fund		15,786,398		11,364,761		352,878
Energy Fund		27,673,711		22,074,962		(1,361,639	)
Energy Services Fund		21,960,976		23,298,556		(21,251	)
Financial Services Fund		14,087,628		16,353,308		(372,254	)
Health Care Fund		28,690,293		22,074,550		714,572
Internet Fund		34,008,994		19,110,677		(544,477	)
Leisure Fund		13,887,081		14,650,529		(241,048	)
Precious Metals Fund		12,084,902		16,374,464		(195,409	)
Real Estate Fund		31,488,075		20,350,696		46,825
Retailing Fund		13,542,454		9,907,352		98,314
Technology Fund		22,890,943		15,921,690		397,966
Telecommunications Fund		7,641,987		5,511,387		(75,167	)
Transportation Fund		4,312,604		6,890,889		675,060
Utilities Fund		14,394,421		17,440,395		(325,289	)

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 12, 2016. 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 1.31% for the year ended March 31, 2016. The Funds did not have any borrowings outstanding under this agreement at March 31, 2016.

The average daily balances borrowed for the year ended March 31, 2016, were as follows:

Fund	Average Daily Balance
Banking Fund	$	7,976
Basic Materials Fund		9,522
Biotechnology Fund		555,160
Consumer Products Fund		49,053
Electronics Fund		7,596
Energy Fund		10,398
Energy Services Fund		23,369
Financial Services Fund		34,530
Health Care Fund		173,095
Internet Fund		4,461
Leisure Fund		12,356
Precious Metals Fund		11,286
Real Estate Fund		30,042
Retailing Fund		24,612
Technology Fund		10,572
Telecommunications Fund		7,900
Transportation Fund		41,049
Utilities Fund		28,523

170 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

9. Conversion of Advisor Class Shares to H-Class Shares

Effective upon the close of business on September 30, 2015, the Funds converted their existing Advisor Class shares to H-Class shares, which effectively reduced the distribution and shareholder services fees paid by the Funds.

10. 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 May 23, 2014, the defendants filed motions to dismiss the FitzSimons action, including a global motion to dismiss Count I, which is the claim brought against former Tribune shareholders for intentional fraudulent conveyance under U.S. federal law. The Court has not yet issued a decision on any of these motions.

On March 29, 2016, the U.S. Court of Appeals for the Second Circuit issued its opinion on the appeal of the SLCFC actions. The appeals court affirmed the district court’s dismissal of those lawsuits, but on different grounds than the district court. The appeals court held that while the plaintiffs have standing under the U.S. Bankruptcy Code (which was the basis for the district court’s dismissal), their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments.

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.

THE RYDEX FUNDS ANNUAL REPORT | 171

NOTES TO FINANCIAL STATEMENTS (concluded)

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.) (the “Creditor Trust action”).

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.

On April 7, 2014, the plaintiff filed a Third Amended Complaint. In the related action entitled Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adversary Proceeding No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust action”), the plaintiff also filed a Second Amended Complaint that alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On May 8, 2014, the plaintiff in the Litigation Trust action filed a motion to certify a defendant class generally comprised of all former Lyondell shareholders that received proceeds in exchange for their shares in the 2007 merger transaction.

On July 30, 2014, the defendants filed a motion to dismiss all three lawsuits. The Court held an oral argument on the motions to dismiss and on the motion for class certification on January 14 and January 15, 2015. On September 15, 2015, the Bankruptcy Court denied the motion for class certification without prejudice to the plaintiff’s right to file a renewed motion. On November 18, 2015, the Bankruptcy Court granted the defendants’ motion to dismiss the Litigation Trust action and denied their motion to dismiss the Creditor Trust and Reichman actions. The Litigation Trust action is now over, but the plaintiff has appealed the dismissal to the U.S. District Court for the Southern District of New York. On May 4, 2016, the defendants filed a motion to dismiss, or in the alternative, for a stay of, the Creditor Trust and Reichman actions in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. The Bankruptcy Court has not yet issued a decision on the motion. Discovery has commenced, and will continue, in the Creditor Trust and Reichman actions while the May 4 motion is pending.

These lawsuits do 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; Long Short Equity Fund f/k/a 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.

172 | THE RYDEX FUNDS ANNUAL REPORT

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
of Rydex Series Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of 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 and Utilities Fund (eighteen of the series constituting the Rydex Series Funds) (the “Funds”) as of March 31, 2016, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2016, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the above listed Funds (eighteen of the series constituting the Rydex Series Funds) at March 31, 2016, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

McLean, Virginia
May 25, 2016

THE RYDEX FUNDS ANNUAL REPORT | 173

OTHER INFORMATION (Unaudited)

Tax Information

This information is being provided as required by the Internal Revenue Code. Amounts shown may differ from those elsewhere in the report because of differences in tax and financial reporting practice.

Of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
Banking Fund	100.00%
Basic Materials Fund	90.92%
Biotechnology Fund	4.90%
Consumer Products Fund	64.98%
Electronics Fund	100.00%
Energy Fund	100.00%
Energy Services Fund	100.00%
Financial Services Fund	100.00%
Health Care Fund	28.72%
Internet Fund	65.64%
Leisure Fund	100.00%
Precious Metals Fund	100.00%
Real Estate Fund	8.24%
Retailing Fund	100.00%
Telecommunications Fund	100.00%
Transportation Fund	100.00%
Utilities Fund	100.00%

Additionally, the following amounts of taxable ordinary income dividends paid during the fiscal year qualified for the lower income tax rate available to individuals under the Jobs and Growth Tax Relief Reconciliation Act of 2003:

Fund	% Qualifying
Banking Fund	100.00%
Basic Materials Fund	100.00%
Biotechnology Fund	7.39%
Consumer Products Fund	77.75%
Electronics Fund	100.00%
Energy Fund	100.00%
Energy Services Fund	100.00%
Financial Services Fund	100.00%
Health Care Fund	29.13%
Internet Fund	65.65%
Leisure Fund	100.00%
Precious Metals Fund	100.00%
Real Estate Fund	7.45%
Retailing Fund	100.00%
Telecommunications Fund	94.73%
Transportation Fund	100.00%
Utilities Fund	100.00%

174 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)(concluded)

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify as interest related dividends and qualified short-term capital gains as permitted by IRC Section 871(k)(1) and IRC Section 871(k)(2), respectively:

Fund	% Qualifying	% STCG Qualifying
Biotechnology Fund	0.00%	100.00%
Consumer Products Fund	0.00%	100.00%
Health Care Fund	0.00%	100.00%
Internet Fund	0.00%	100.00%

With respect to the taxable year ended March 31, 2016, the Funds hereby designate as capital gain dividends the amounts listed below, or, if subsequently determined to be different, the net capital gain of such year:

Fund	From long-term capital gains, subject to the 15% rate gains category:		From long-term capital gains, using proceeds from shareholder redemptions:
Biotechnology Fund	$	—	$	9,542,409
Energy Fund		369,647		—
Financial Services Fund		141,563		—
Health Care Fund		2,057,091		18,933,726
Internet Fund		88,617		—
Leisure Fund		96,180		—
Utilities Fund		2,665		—

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 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 800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.

Sector Classification

Information in the “Schedule of Investments” is categorized by sectors using sector-level Classifications defined by the Bloomberg Industry Classification System, a widely recognized industry classification system provider. Each Fund’s registration statement has investment policies relating to concentration in specific sectors/industries. For purposes of these investment policies, the Funds usually classify sectors/industries based on industry-level Classifications used by widely recognized industry classification system providers such as Bloomberg Industry Classification System, Global Industry Classification Standards and Barclays Global Classification Scheme.

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 800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 800.820.0888.

THE RYDEX FUNDS ANNUAL REPORT | 175

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 visiting guggenheiminvestments.com or by calling 800.820.0888.

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INTERESTED TRUSTEE
Donald C. Cacciapaglia** (1951)	Trustee from 2012 to present.	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group, Inc. (2002-2010).	236	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Corey A. Colehour (1945)	Trustee from 1993 to present; Member of the Audit Committee from 1994 to present; Member of the Governance Committee from 2014 to present; and Member of the Investment and Performance Committee from 2014 to present.	Retired.	134	None.
J. Kenneth Dalton (1941)	Trustee from 1995 to present; Chairman and Member of the Audit Committee from 1997 to present; and Member of the Compliance and Risk Oversight Committee from 2010 to present.	Retired.	134	Epiphany Funds (4) (2009-present).
John O. Demaret (1940)	Vice Chairman of the Board from 2014 to present (Chairman of the Board from 2006 to 2014); Trustee and Member of the Audit Committee from 1997 to present; Chairman (since 2014) and Member of the Compliance and Risk Oversight Committee from 2010 to present; Chairman and Member of the Investment and Performance Committee from 2014 to present; and Member of the Nominating Committee from 2014 to present.	Retired.	134	None.

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INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES - concluded
Werner E. Keller (1940)	Chairman of the Board from 2014 to present (Vice Chairman of the Board from 2010 to 2014); Trustee and Member of the Audit Committee from 2005 to present; and Member of the Investment and Performance Committee from 2014 to present.	Current: Founder and President, Keller Partners, LLC (investment research firm) (2005-present).	134	None.
Thomas F. Lydon, Jr. (1960)	Trustee and Member of the Audit Committee from 2005 to present; Member of the Nominating Committee from 2005 to present; and Member of the Governance Committee from 2007 to present.	Current: President, Global Trends Investments (registered investment adviser) (1996-present).	134	US Global Investors (GROW) (1995-present).
Patrick T. McCarville (1942)	Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; Chairman and Member of the Nominating Committee from 2004 to present; Chairman and Member of the Governance Committee from 2007 to present; and Member of the Compliance and Risk Oversight Committee from 2014 to present.	Retired. Former: Chief Executive Officer, Par Industries, Inc., d/b/a Par Leasing (1977-2010).	134	None.

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS
Donald C. Cacciapaglia (1951)	President (2012-present).	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group Inc. (2002-2010).
Michael P. Byrum (1970)	Vice President (1999-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); President and Chief Investment Officer, Rydex Holdings, LLC (2008-present); Director and Chairman, Advisory Research Center, Inc. (2006-present); Manager, Guggenheim Specialized Products, LLC (2005-present). Former: Vice President, Guggenheim Distributors, LLC (2009); Director (2009-2010) and Secretary (2002-2010), Rydex Fund Services, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors II, LLC.

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INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(concluded)

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS - concluded
Nikolaos Bonos (1963)	Vice President and Treasurer (2003-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); Chief Executive Officer, Guggenheim Specialized Products, LLC (2009-present); Chief Executive Officer & President, Rydex Fund Services, LLC (2009-present); Vice President, Rydex Holdings, LLC (2008-present). Former: Senior Vice President, Security Global Investors, LLC (2010-2011); and Senior Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC (2006-2011).
Elisabeth Miller (1968)	Chief Compliance Officer (2012-present).	Current: CCO, certain other funds in the Fund Complex (2012-present); CCO, Security Investors, LLC (2012-present); CCO, Guggenheim Funds Investment Advisors, LLC (2012-present); Managing Director, Guggenheim Investments (2012-present); Vice President, Guggenheim Funds Distributors, LLC (March 2014-present). Former: CCO, Guggenheim Distributors, LLC (2009-March 2014); Senior Manager, Security Investors, LLC (2004-2009); Senior Manager, Guggenheim Distributors, LLC (2004-2009).
Joseph M. Arruda (1966)	Assistant Treasurer (2006-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2006-present); Vice President, Security Investors, LLC (2010-present); CFO and Manager, Guggenheim Specialized Products, LLC (2009-present). Former: Vice President, Security Global Investors, LLC (2010-2011); Vice President, Rydex Advisors, LLC (2010); Vice President, Rydex Advisors II, LLC (2010).
Paul J. Davio (1972)	Assistant Treasurer (2014-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2014-present); Director, Guggenheim Investments (2006-present). Former: Manager, Mutual Fund Administration, Guggenheim Investments (2003-2006).
Amy J. Lee (1961)	Vice President (2009-present) and Secretary (2012-present).	Current: Chief Legal Officer, certain other funds in the Fund Complex (2013-present); Senior Managing Director, Guggenheim Investments (2012-present). Former: Vice President, Associate General Counsel and Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (2004-2012).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
**	Mr. Cacciapaglia is an “interested” person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Adviser’s parent company.
***	The “Fund Complex” includes all closed-end and open-end funds (including all of their portfolios) advised by the Adviser and any funds that have an investment adviser or servicing agent that is an affiliated person of the Adviser. Information provided is as of the date of this report.

178 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Funds Distributors, LLC, Security Investors, LLC, Security Distributors, Inc., Guggenheim Partners Investment Managers, LLC, 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

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GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(concluded)

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.

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.

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3.31.2016

Rydex Funds Annual Report

Domestic Equity Funds	Fixed Income Funds
Nova Fund	Government Long Bond 1.2x Strategy Fund
S&P 500®Fund	Inverse Government Long Bond Strategy Fund
Inverse S&P 500® Strategy Fund	High Yield Strategy Fund
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Inverse High Yield Strategy Fund
Inverse NASDAQ 100® Strategy Fund	Money Market Fund
Mid-Cap 1.5x Strategy Fund	U.S. Government Money Market Fund
Inverse Mid-Cap Strategy Fund
Russell 2000® 1.5x Strategy Fund
Russell 2000®Fund
Inverse Russell 2000® Strategy Fund
Dow Jones Industrial Average® Fund

RTB1-ANN-0316x0317 guggenheiminvestments.com

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	4
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS	6
ABOUT SHAREHOLDERS’ FUND EXPENSES	7
NOVA FUND	12
S&P 500® FUND	27
INVERSE S&P 500® STRATEGY FUND	41
MONTHLY REBALANCE NASDAQ-100® 2x STRATEGY FUND	50
INVERSE NASDAQ 100® STRATEGY FUND	60
MID-CAP 1.5x STRATEGY FUND	69
INVERSE MID-CAP STRATEGY FUND	81
RUSSELL 2000® 1.5x STRATEGY FUND	89
RUSSELL 2000® FUND	117
INVERSE RUSSELL 2000® STRATEGY FUND	144
DOW JONES INDUSTRIAL AVERAGE® FUND	152
GOVERNMENT LONG BOND 1.2x STRATEGY FUND	161
INVERSE GOVERNMENT LONG BOND STRATEGY FUND	172
HIGH YIELD STRATEGY FUND	182
INVERSE HIGH YIELD STRATEGY FUND	190
U.S. GOVERNMENT MONEY MARKET FUND	198
NOTES TO FINANCIAL STATEMENTS	205
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	226
OTHER INFORMATION	227
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	230
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	233

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2016

Dear Shareholder:

Security Investors, LLC (the “Investment Adviser”) is pleased to present the annual shareholder report for a selection of our Funds for the one-year period ended March 31, 2016.

The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), a global, diversified financial services firm.

Guggenheim Funds Distributors, LLC is the distributor of the Funds. Guggenheim Funds 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 Performance Report and 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
April 30, 2016

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.

Inverse and leveraged Funds are not suitable for all investors. ● These Funds should be utilized only by investors who (a) understand the risks associated with the use of leverage, (b) understand the consequences of seeking daily leveraged investment results, (c) understand the risk of shorting, and (d) intend to actively monitor and manage their investments. ● The more a Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● Inverse Funds involve certain risks, which include increased volatility due to the Funds’ possible use of short sales of securities and derivatives, such as options and futures. ● The Funds’ use of derivatives, such as futures, options, and swap agreements, may expose the Funds’ shareholders to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. ● Short-selling involves increased risks and costs. You risk paying more for a security than you received from its sale. ● Leveraged and inverse Funds seek to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a daily basis. Because the 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. 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. The Funds rebalance their portfolios on a daily basis, increasing exposure in response to that day’s gains or reducing exposure in response to that day’s losses. Daily rebalancing will impair a Fund’s performance if the benchmark experiences volatility. Investors should monitor their leveraged and inverse Funds’ holdings consistent with their strategies, as frequently as daily. ● For more on these and other risks, please read the prospectus.

The Fixed Income Funds may not be suitable for all investors. ● Fixed income investments are subject to credit, liquidity, interest rate, and, depending on the instrument, counterparty risk. These risks may be increased to the extent fixed income investments are concentrated in any one issuer, industry, region, or country. The market value of fixed income investments generally will fluctuate with, among other things, the financial condition of the obligors on the underlying debt obligations, general economic conditions, the condition of certain financial markets, political events, developments or trends in any particular industry, and changes in prevailing interest rates. In general, any interest rate increases can cause the price of a debt security to decrease and vice versa.

2 | THE RYDEX FUNDS ANNUAL REPORT

March 31, 2016

The High Yield Strategy Fund and Inverse High Yield Strategy Fund may not be suitable for all investors. ● The use of derivatives such as futures, options and swap agreements will expose the Funds to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. ● A highly liquid secondary market may not exist for the credit default swaps the Funds invest in, and there can be no assurance that a highly liquid secondary market will develop. ● The Funds’ market value will change in response to interest rate changes and market conditions among other factors. ● You may have a gain or loss when you sell your shares. ● In general, bond prices rise when interest rates fall, and vice versa. The Funds’ exposure to the high yield bond market may subject the Funds to greater volatility because (i) the Funds will be affected by the ability of high yield security issuers’ ability to make principal and interest payments and (ii) the prices of derivatives linked to high yield bonds may fluctuate unpredictably and not necessarily in relation to interest rates. ● It is important to note that the Funds are not guaranteed by the U.S. government. The Funds are subject to active trading risks that may increase volatility and impact their ability to achieve their investment objectives. ● Investing in the Inverse High Yield Strategy Fund involves certain risks, which include volatility due to the Fund’s possible use of short sales of security and derivatives such as options and futures.

Monthly leveraged funds are not suitable for all investors. ● These funds should be utilized only by investors who (a) understand the risks associated with the use of leverage, (b) understand the consequences of seeking monthly leveraged investment results, and (c) intend to actively monitor and manage their investments. ● The more a fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● The funds’ use of derivatives, such as futures, options, and swap agreements, may expose the funds’ shareholders to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. ● Monthly leveraged funds seek to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a monthly basis. Because monthly leveraged funds seek to track the performance of their benchmark on a monthly 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 quarterly, annual or other period performance of its benchmark. Due to the compounding of monthly returns, leveraged funds’ returns over periods other than one calendar month will likely differ in amount and possibly direction from the benchmark return for the same period. For those funds that consistently apply leverage, the value of the funds’ shares will tend to increase or decrease more than the value of any increase or decrease in its benchmark index. Monthly leveraged funds rebalance their portfolios on a monthly basis on the last day of each calendar month, increasing exposure in response to that month’s gains or reducing exposure in response to that month’s losses. ● Throughout the month, the amount of leverage that a monthly leveraged fund provides is allowed to float. Purchasing monthly leveraged funds on any day other than the last day of each calendar month will likely mean that the monthly leveraged fund’s actual leverage is different from its monthly leverage target. Investors should monitor their monthly leveraged funds’ holdings consistent with their strategies, as frequently as daily. ● For more on these and other risks, please read the monthly leveraged funds’ prospectus.

The U.S. Government Money Market Fund may not be suitable for all investors. ● An investment in the U.S. Government Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited) March 31, 2016

Financial markets were buffeted by a variety of events over the past year, including volatility in the oil market, weak growth and a devaluation in China, ongoing stimulus from global central banks, and a delayed September rate hike by the U.S. Federal Reserve (the “Fed”)—and then capped by a 25 basis point increase in the U.S. federal funds target rate in December. While the direct impact of the move was fairly insignificant, the decision to begin normalization of interest rates after seven years of unprecedented liquidity provision was not. Indeed, in 2015, risk assets posted their worst annual performance since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concern about plunging commodity prices, and slowing economic growth in China and other emerging market economies.

As 2016 began, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Estimates for first quarter gross domestic product (“GDP”) in the U.S. were marked down, even though first quarter GDP has undershot full-year growth rates in six out of the last seven years. Risk assets rallied in the last half of the first quarter, led by a dovish pivot in the Fed’s communication that spurred a rally in crude oil and a reversal of dollar strength. The weaker dollar, along with optimism about a production freeze agreed to by a group of major oil producing countries, helped oil to rebound. After falling in the early weeks of the year to a cycle low of $26 per barrel on February 11, 2016, the front-month West Texas Intermediate (“WTI”) oil futures contract rallied as high as $40 per barrel before closing the quarter at $38 per barrel.

The outlook for economic growth outside the U.S. softened in the first quarter. A further deterioration in the euro zone inflation outlook prompted the European Central Bank (“ECB”) to announce an increase in the size of its monthly asset purchases and reduce its deposit rate to -40 basis points. European government bonds rallied following the announcement, with the 10-year German bund ending the first quarter with a yield of just 16 basis points.

Ongoing stimulus efforts in Asia also appeared likely to contribute to low U.S. rates. Chinese industrial production growth continued to slow in early 2016, prompting the People’s Bank of China (“PBOC”) to stimulate credit growth by allowing banks to hold fewer reserves against deposits. And after years of struggling with stagnant growth and low inflation, the Bank of Japan (“BOJ”) surprised markets by cutting its key interest rate to -10 basis points in January. The negative rates pushed a considerable amount of Japanese savings into foreign markets.

In an environment where global rates are moving lower and markets are already starved for yield, foreign investors began looking to the U.S. Guggenheim expects that U.S. Treasury yields will fall further as the gravitational pull of global yields gets stronger, and does not discount the possibility of 10-year U.S. Treasury yields declining to closer to 1 percent before the end of the year.

A stronger dollar has weighed on the U.S. economy, but consumer spending has been resilient. The labor market is now operating near full employment, and tight labor market conditions are beginning to spur faster wage growth. We believe the U.S. economy is fundamentally sound, and find little evidence to support the conclusion that the economy will fall into a recession in 2016.

Despite the relative health of the U.S. economy, markets are concerned that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. Our view is that the Fed remains focused on fulfilling its dual mandate objectives of maximum employment and price stability, and thus is biased toward normalizing policy. We expect further declines in the unemployment rate as job gains outstrip growth in the labor force. Meanwhile, core and headline inflation should move closer to the Fed’s target by year end, reflecting our forecasts for a tighter labor market and a modest rise in oil prices. Normally, this would result in at least two Fed rate hikes on the table for 2016, but the U.S. Fed is becoming more sensitive to global financial conditions and the extent of global money flows that occur as monetary policy in the U.S. diverges from Europe, Japan and China. As a result, we have reduced our expectations for a June rate hike, although it would normally be an easy call. We continue to believe a December rate hike is a near certainty. A solid macroeconomic backdrop and a rebalancing oil market should support an improving credit picture in the second half of 2016.

For the 12 months ended March 31, 2016, the Standard & Poor’s 500^® (“S&P 500”) Index* returned 1.78%. The Morgan Stanley Capital International (“MSCI”) Europe-Australasia-Far East (“EAFE”) Index* returned -8.27%. The return of the MSCI Emerging Markets Index* was -12.03%.

4 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2016

In the bond market, the Barclays U.S. Aggregate Bond Index* posted a 1.96% return for the period, while the Barclays U.S. Corporate High Yield Index* returned -3.69%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.12% for the 12-month period.

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.

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.

Barclays U.S. Corporate High Yield Index measures the market of U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

Barclays Long Treasury Bond Index includes all publicly issued, U.S. Treasury securities that have a remaining maturity of 10 or more years, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non convertible. The Long U.S. Treasury Index is market-capitalization weighted and the securities in the index are updated on the last business day of each month.

BofA 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.

Dow Jones Industrial Average^SM (“DJIA”) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.

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.

NASDAQ-100^® Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. The index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade, and biotechnology. It does not contain securities of financial companies including investment companies.

Russell 2000^® Index measures the performance of the small-cap value segment of the U.S. equity universe.

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.

S&P MidCap 400^® Index provides investors with a benchmark for mid-sized companies. The index covers approximately 7% of the U.S. equity market, and seeks to remain an accurate measure of mid-sized companies, reflecting the risk and return characteristics of the broader mid-cap universe on an on-going basis.

THE RYDEX FUNDS ANNUAL REPORT | 5

A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited) March 31, 2016

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 Level	Index Performance	Fund Expectation	Fund NAV	Fund 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.

6 | THE RYDEX FUNDS 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 September 30, 2015 and ending March 31, 2016.

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 up to the past five years (subject to the Fund’s inception date), 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 ANNUAL REPORT | 7

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 1. Based on actual Fund return3
Nova Fund
Investor Class	1.27%	11.20%	$ 1,000.00	$ 1,112.00	$ 6.71
A-Class	1.52%	11.13%	1,000.00	1,111.30	8.02
C-Class	2.27%	10.64%	1,000.00	1,106.40	11.95
H-Class	1.52%	11.08%	1,000.00	1,110.80	8.02
S&P 500® Fund
A-Class	1.56%	7.54%	1,000.00	1,075.40	8.09
C-Class	2.32%	7.13%	1,000.00	1,071.30	12.01
H-Class	1.57%	7.51%	1,000.00	1,075.10	8.14
Inverse S&P 500® Strategy Fund
Investor Class	1.42%	(9.42%)	1,000.00	905.80	6.77
A-Class	1.67%	(9.56%)	1,000.00	904.40	7.95
C-Class	2.42%	(9.85%)	1,000.00	901.50	11.50
H-Class	1.67%	(9.63%)	1,000.00	903.70	7.95
Monthly Rebalance NASDAQ-100® 2x Strategy Fund
A-Class	1.36%	13.86%	1,000.00	1,138.60	7.27
C-Class	2.11%	13.42%	1,000.00	1,134.20	11.26
H-Class	1.35%	14.32%	1,000.00	1,143.20	7.23
Inverse NASDAQ-100® Strategy Fund
Investor Class	1.45%	(9.67%)	1,000.00	903.30	6.90
A-Class	1.70%	(9.27%)	1,000.00	907.30	8.11
C-Class	2.45%	(10.11%)	1,000.00	898.90	11.63
H-Class	1.70%	(9.76%)	1,000.00	902.40	8.09
Mid-Cap 1.5x Strategy Fund
A-Class	1.66%	8.57%	1,000.00	1,085.70	8.66
C-Class	2.42%	8.17%	1,000.00	1,081.70	12.59
H-Class	1.67%	8.73%	1,000.00	1,087.30	8.71
Inverse Mid-Cap Strategy Fund
A-Class	1.65%	(8.03%)	1,000.00	919.70	7.92
C-Class	2.41%	(8.41%)	1,000.00	915.90	11.54
H-Class	1.65%	(7.92%)	1,000.00	920.80	7.92
Russell 2000® 1.5x Strategy Fund
A-Class	1.70%	1.40%	1,000.00	1,014.00	8.56
C-Class	2.45%	1.01%	1,000.00	1,010.10	12.31
H-Class	1.70%	1.54%	1,000.00	1,015.40	8.57
Russell 2000® Fund
A-Class	1.61%	1.16%	1,000.00	1,011.60	8.10
C-Class	2.36%	0.81%	1,000.00	1,008.10	11.85
H-Class	1.62%	1.20%	1,000.00	1,012.00	8.15
Inverse Russell 2000® Strategy Fund
A-Class	1.71%	(4.86%)	1,000.00	951.40	8.34
C-Class	2.46%	(5.20%)	1,000.00	948.00	11.98
H-Class	1.71%	(4.87%)	1,000.00	951.30	8.34

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Dow Jones Industrial Average® Fund4
A-Class	1.55%	(0.80%)	$ 1,000.00	$992.00	$ 5.10
C-Class	2.30%	(1.06%)	1,000.00	989.40	7.56
H-Class	1.55%	(0.82%)	1,000.00	991.80	5.10
Government Long Bond 1.2x Strategy Fund
Investor Class	0.96%	8.00%	1,000.00	1,080.00	4.99
A-Class	1.21%	7.89%	1,000.00	1,078.90	6.29
C-Class	1.96%	7.50%	1,000.00	1,075.00	10.17
H-Class	1.21%	7.92%	1,000.00	1,079.20	6.29
Inverse Government Long Bond Strategy Fund
Investor Class	3.38%	(7.70%)	1,000.00	923.00	16.25
A-Class	3.65%	(7.82%)	1,000.00	921.80	17.54
C-Class	4.41%	(8.17%)	1,000.00	918.30	21.15
H-Class	3.48%	(7.77%)	1,000.00	922.30	16.72
High Yield Strategy Fund
A-Class	1.49%	5.01%	1,000.00	1,050.10	7.64
C-Class	2.24%	4.64%	1,000.00	1,046.40	11.46
H-Class	1.49%	4.87%	1,000.00	1,048.70	7.63
Inverse High Yield Strategy Fund
A-Class	1.51%	(7.29%)	1,000.00	927.10	7.27
C-Class	2.26%	(7.69%)	1,000.00	923.10	10.87
H-Class	1.50%	(7.20%)	1,000.00	928.00	7.23
U.S. Government Money Market Fund
Money Market Class	0.25%	0.00%	1,000.00	1,000.00	1.25

THE RYDEX FUNDS ANNUAL REPORT | 9

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
Nova Fund
Investor Class	1.27%	5.00%	$ 1,000.00	$ 1,018.65	$ 6.41
A-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
S&P 500® Fund
A-Class	1.56%	5.00%	1,000.00	1,017.20	7.87
C-Class	2.32%	5.00%	1,000.00	1,013.40	11.68
H-Class	1.57%	5.00%	1,000.00	1,017.15	7.92
Inverse S&P 500® Strategy Fund
Investor Class	1.42%	5.00%	1,000.00	1,017.90	7.16
A-Class	1.67%	5.00%	1,000.00	1,016.65	8.42
C-Class	2.42%	5.00%	1,000.00	1,012.90	12.18
H-Class	1.67%	5.00%	1,000.00	1,016.65	8.42
Monthly Rebalance NASDAQ-100® 2x Strategy Fund
A-Class	1.36%	5.00%	1,000.00	1,018.20	6.86
C-Class	2.11%	5.00%	1,000.00	1,014.45	10.63
H-Class	1.35%	5.00%	1,000.00	1,018.25	6.81
Inverse NASDAQ-100® Strategy Fund
Investor Class	1.45%	5.00%	1,000.00	1,017.75	7.31
A-Class	1.70%	5.00%	1,000.00	1,016.50	8.57
C-Class	2.45%	5.00%	1,000.00	1,012.75	12.33
H-Class	1.70%	5.00%	1,000.00	1,016.50	8.57
Mid-Cap 1.5x Strategy Fund
A-Class	1.66%	5.00%	1,000.00	1,016.70	8.37
C-Class	2.42%	5.00%	1,000.00	1,012.90	12.18
H-Class	1.67%	5.00%	1,000.00	1,016.65	8.42
Inverse Mid-Cap Strategy Fund
A-Class	1.65%	5.00%	1,000.00	1,016.75	8.32
C-Class	2.41%	5.00%	1,000.00	1,012.95	12.13
H-Class	1.65%	5.00%	1,000.00	1,016.75	8.32
Russell 2000® 1.5x Strategy Fund
A-Class	1.70%	5.00%	1,000.00	1,016.50	8.57
C-Class	2.45%	5.00%	1,000.00	1,012.75	12.33
H-Class	1.70%	5.00%	1,000.00	1,016.50	8.57
Russell 2000® Fund
A-Class	1.61%	5.00%	1,000.00	1,016.95	8.12
C-Class	2.36%	5.00%	1,000.00	1,013.20	11.88
H-Class	1.62%	5.00%	1,000.00	1,016.90	8.17
Inverse Russell 2000® Strategy Fund
A-Class	1.71%	5.00%	1,000.00	1,016.45	8.62
C-Class	2.46%	5.00%	1,000.00	1,012.70	12.38
H-Class	1.71%	5.00%	1,000.00	1,016.45	8.62

10 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Dow Jones Industrial Average® Fund4
A-Class	1.55%	5.00%	$ 1,000.00	$ 1,017.25	$ 7.82
C-Class	2.30%	5.00%	1,000.00	1,013.50	11.58
H-Class	1.55%	5.00%	1,000.00	1,017.25	7.82
Government Long Bond 1.2x Strategy Fund
Investor Class	0.96%	5.00%	1,000.00	1,020.20	4.85
A-Class	1.21%	5.00%	1,000.00	1,018.95	6.11
C-Class	1.96%	5.00%	1,000.00	1,015.20	9.87
H-Class	1.21%	5.00%	1,000.00	1,018.95	6.11
Inverse Government Long Bond Strategy Fund
Investor Class	3.38%	5.00%	1,000.00	1,008.10	16.97
A-Class	3.65%	5.00%	1,000.00	1,006.75	18.31
C-Class	4.41%	5.00%	1,000.00	1,002.95	22.08
H-Class	3.48%	5.00%	1,000.00	1,007.60	17.47
High Yield Strategy Fund
A-Class	1.49%	5.00%	1,000.00	1,017.55	7.52
C-Class	2.24%	5.00%	1,000.00	1,013.80	11.28
H-Class	1.49%	5.00%	1,000.00	1,017.55	7.52
Inverse High Yield Strategy Fund
A-Class	1.51%	5.00%	1,000.00	1,017.45	7.62
C-Class	2.26%	5.00%	1,000.00	1,013.70	11.38
H-Class	1.50%	5.00%	1,000.00	1,017.50	7.57
U.S. Government Money Market Fund
Money Market Class	0.25%	5.00%	1,000.00	1,023.75	1.26

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%, 1.66%, 2.41% and 1.66% for the Investor Class, A-Class, C-Class and H-Class, respectively. 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 183/366 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2015 to March 31, 2016.
4	Since commencement of operations: December 1, 2015. Expenses paid based on actual fund return are calculated using 121 days from the commencement of operations. Expenses paid based on hypothetical 5% return are calculated using 183 days.

THE RYDEX FUNDS ANNUAL REPORT | 11

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Nova Fund maintained a daily correlation of over 99% to its benchmark of 150% of the daily price movement of the S&P 500 Index. Nova Fund Investor Class returned -0.36%, while the S&P 500 Index returned 1.78% over the same period.

Sectors contributing the most to the performance of the underlying index were Information Technology and Consumer Staples. The sector detracting the most was Energy, followed by Health Care.

Microsoft Corp., General Electric Co., and Amazon.com, Inc. were the holdings contributing the most to the performance of the underlying index for the period. Apple, Inc., Biogen, Inc., and Kinder Morgan, Inc. — Class P detracted the most from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

 

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

12 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
Investor Class	July 12, 1993
A-Class	March 31, 2004
C-Class	March 14, 2001
H-Class	September 18, 2014

Ten Largest Holdings (% of Total Net Assets)
Apple, Inc.	2.6%
Microsoft Corp.	1.9%
Exxon Mobil Corp.	1.5%
Johnson & Johnson	1.3%
General Electric Co.	1.3%
Berkshire Hathaway, Inc. — Class B	1.1%
Facebook, Inc. — Class A	1.1%
AT&T, Inc.	1.0%
Amazon.com, Inc.	1.0%
Wells Fargo & Co.	1.0%
Top Ten Total	13.8%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-0.36%	14.94%	6.56%
A-Class Shares	-0.56%	14.67%	6.30%
A-Class Shares with sales charge†	-5.27%	13.56%	5.78%
C-Class Shares	-1.36%	13.80%	5.50%
C-Class Shares with CDSC‡	-2.35%	13.80%	5.50%
S&P 500 Index	1.78%	11.58%	7.01%
		1 Year	Since Inception (09/18/14)
H-Class Shares		-0.60%	2.58%
S&P 500 Index		1.78%	3.73%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 13

SCHEDULE OF INVESTMENTS	March 31, 2016
NOVA FUND

	Shares		Value
COMMON STOCKS† - 77.0%
Consumer, Non-cyclical - 18.5%
Johnson & Johnson		24,116	$	2,609,351
Procter & Gamble Co.		23,183		1,908,193
Coca-Cola Co.		34,055		1,579,811
Pfizer, Inc.		52,858		1,566,711
Philip Morris International, Inc.		13,541		1,328,507
PepsiCo, Inc.		12,632		1,294,527
Merck & Company, Inc.		24,255		1,283,332
Gilead Sciences, Inc.		11,946		1,097,359
Altria Group, Inc.		17,112		1,072,238
UnitedHealth Group, Inc.		8,309		1,071,031
Amgen, Inc.		6,573		985,489
Bristol-Myers Squibb Co.		14,591		932,073
Allergan plc*		3,449		924,435
Medtronic plc		12,289		921,676
AbbVie, Inc.		14,082		804,364
Celgene Corp.*		6,832		683,815
Eli Lilly & Co.		8,507		612,589
Colgate-Palmolive Co.		7,802		551,211
Mondelez International, Inc. — Class A		13,711		550,085
Abbott Laboratories		12,876		538,603
Biogen, Inc.*		1,911		497,472
Danaher Corp.		5,225		495,644
Thermo Fisher Scientific, Inc.		3,463		490,327
Kimberly-Clark Corp.		3,154		424,245
Kraft Heinz Co.		5,197		408,276
Express Scripts Holding Co.*		5,839		401,080
PayPal Holdings, Inc.*		9,724		375,346
Reynolds American, Inc.		7,235		363,993
Automatic Data Processing, Inc.		3,998		358,661
Aetna, Inc.		3,055		343,229
General Mills, Inc.		5,186		328,533
Kroger Co.		8,519		325,852
Anthem, Inc.		2,284		317,453
McKesson Corp.		1,998		314,186
Cigna Corp.		2,235		306,731
Stryker Corp.		2,738		293,760
Becton Dickinson and Co.		1,851		281,019
Alexion Pharmaceuticals, Inc.*		1,969		274,124
Regeneron Pharmaceuticals, Inc.*		682		245,820
Baxalta, Inc.		5,953		240,501
Humana, Inc.		1,296		237,103
Cardinal Health, Inc.		2,878		235,852
Constellation Brands, Inc. — Class A		1,537		232,225
McGraw Hill Financial, Inc.		2,319		229,535
Boston Scientific Corp.*		11,784		221,657
Sysco Corp.		4,589		214,444
HCA Holdings, Inc.*		2,671		208,471
Illumina, Inc.*		1,285		208,311
Baxter International, Inc.		4,788		196,691
Intuitive Surgical, Inc.*		327		196,543
Archer-Daniels-Midland Co.		5,203		188,921
Estee Lauder Companies, Inc. — Class A		1,939		182,867
Zoetis, Inc.		3,997		177,187
Monster Beverage Corp.*		1,312		174,995
Vertex Pharmaceuticals, Inc.*		2,153		171,142
Tyson Foods, Inc. — Class A		2,562		170,783
ConAgra Foods, Inc.		3,794		169,288
Kellogg Co.		2,204		168,716
Mylan N.V.*		3,602		166,953
Zimmer Biomet Holdings, Inc.		1,564		166,769
Nielsen Holdings plc		3,163		166,563
Edwards Lifesciences Corp.*		1,876		165,482
Perrigo Company plc		1,280		163,750
Molson Coors Brewing Co. — Class B		1,607		154,561
AmerisourceBergen Corp. — Class A		1,706		147,654
Dr Pepper Snapple Group, Inc.		1,637		146,381
Moody’s Corp.		1,482		143,102
Clorox Co.		1,131		142,574
Mead Johnson Nutrition Co. — Class A		1,630		138,501
St. Jude Medical, Inc.		2,479		136,345
JM Smucker Co.		1,046		135,813
CR Bard, Inc.		644		130,519
DENTSPLY SIRONA, Inc.		2,109		129,978
Henry Schein, Inc.*		716		123,603
Equifax, Inc.		1,037		118,519
Hershey Co.		1,254		115,481
Verisk Analytics, Inc. — Class A*		1,351		107,972
DaVita HealthCare Partners, Inc.*		1,448		106,254
Church & Dwight Company, Inc.		1,134		104,532
Laboratory Corporation of America Holdings*		889		104,129
Hormel Foods Corp.		2,362		102,133
Campbell Soup Co.		1,572		100,278
McCormick & Company, Inc.		1,008		100,276
Universal Health Services, Inc. — Class B		790		98,529
Coca-Cola Enterprises, Inc.		1,828		92,753
Centene Corp.*		1,484		91,370
Quest Diagnostics, Inc.		1,248		89,170
Whole Foods Market, Inc.		2,837		88,259
Brown-Forman Corp. — Class B		878		86,457
Western Union Co.		4,387		84,625
Hologic, Inc.*		2,156		74,382
Total System Services, Inc.		1,473		70,085
Cintas Corp.		765		68,705
Varian Medical Systems, Inc.*		835		66,817
Mallinckrodt plc*		978		59,932
ADT Corp.		1,445		59,621
Avery Dennison Corp.		782		56,390
H&R Block, Inc.		2,062		54,478
Robert Half International, Inc.		1,146		53,381
Endo International plc*		1,787		50,304
United Rentals, Inc.*		795		49,441
Patterson Companies, Inc.		730		33,967
Quanta Services, Inc.*		1,396		31,494

14 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NOVA FUND

	Shares		Value
Tenet Healthcare Corp.*		861	$	24,909
Total Consumer, Non-cyclical				37,689,574
Financial - 12.9%
Berkshire Hathaway, Inc. — Class B*		16,374		2,323,144
Wells Fargo & Co.		40,376		1,952,584
JPMorgan Chase & Co.		32,077		1,899,600
Visa, Inc. — Class A		16,773		1,282,799
Bank of America Corp.		90,242		1,220,072
Citigroup, Inc.		25,766		1,075,731
MasterCard, Inc. — Class A		8,570		809,865
U.S. Bancorp		14,273		579,341
Simon Property Group, Inc.		2,704		561,595
American International Group, Inc.		10,046		542,986
Goldman Sachs Group, Inc.		3,433		538,912
Chubb Ltd.		4,028		479,936
American Express Co.		7,162		439,748
MetLife, Inc.		9,585		421,164
American Tower Corp. — Class A		3,705		379,280
BlackRock, Inc. — Class A		1,103		375,648
PNC Financial Services Group, Inc.		4,380		370,417
Public Storage		1,287		354,992
Bank of New York Mellon Corp.		9,402		346,275
Morgan Stanley		13,352		333,934
Capital One Financial Corp.		4,609		319,450
Travelers Companies, Inc.		2,578		300,878
Charles Schwab Corp.		10,502		294,266
CME Group, Inc. — Class A		2,958		284,117
Prudential Financial, Inc.		3,898		281,514
Marsh & McLennan Companies, Inc.		4,555		276,899
Crown Castle International Corp.		2,917		252,321
Aon plc		2,360		246,502
Intercontinental Exchange, Inc.		1,039		244,310
Equity Residential		3,191		239,420
Aflac, Inc.		3,671		231,787
AvalonBay Communities, Inc.		1,197		227,669
BB&T Corp.		6,821		226,935
Allstate Corp.		3,306		222,725
Welltower, Inc.		3,104		215,231
Weyerhaeuser Co.		6,899		213,731
Synchrony Financial*		7,287		208,845
State Street Corp.		3,496		204,586
Prologis, Inc.		4,586		202,609
Equinix, Inc.		602		199,087
Ventas, Inc.		2,937		184,914
Discover Financial Services		3,620		184,330
Progressive Corp.		5,107		179,460
Boston Properties, Inc.		1,342		170,541
Hartford Financial Services Group, Inc.		3,467		159,759
T. Rowe Price Group, Inc.		2,169		159,335
SunTrust Banks, Inc.		4,414		159,257
M&T Bank Corp.		1,390		154,290
General Growth Properties, Inc.		5,090		151,326
Vornado Realty Trust		1,549		146,272
Willis Towers Watson plc		1,208		143,341
Ameriprise Financial, Inc.		1,477		138,853
Realty Income Corp.		2,189		136,834
Essex Property Trust, Inc.		572		133,768
HCP, Inc.		4,069		132,568
Franklin Resources, Inc.		3,263		127,420
Northern Trust Corp.		1,881		122,585
Fifth Third Bancorp		6,845		114,243
Alliance Data Systems Corp.*		518		113,960
Invesco Ltd.		3,639		111,972
Host Hotels & Resorts, Inc.		6,575		109,803
Kimco Realty Corp.		3,616		104,068
Extra Space Storage, Inc.		1,093		102,152
Citizens Financial Group, Inc.		4,613		96,642
Federal Realty Investment Trust		609		95,034
XL Group plc — Class A		2,550		93,840
Principal Financial Group, Inc.		2,370		93,497
UDR, Inc.		2,335		89,968
Loews Corp.		2,341		89,567
Regions Financial Corp.		11,255		88,352
Macerich Co.		1,108		87,798
SL Green Realty Corp.		874		84,673
Cincinnati Financial Corp.		1,293		84,510
Lincoln National Corp.		2,106		82,555
KeyCorp		7,303		80,625
Affiliated Managers Group, Inc.*		472		76,653
CBRE Group, Inc. — Class A*		2,541		73,232
Nasdaq, Inc.		1,003		66,579
Huntington Bancshares, Inc.		6,948		66,284
Unum Group		2,088		64,561
E*TRADE Financial Corp.*		2,471		60,515
Comerica, Inc.		1,528		57,865
Apartment Investment & Management Co. — Class A		1,369		57,252
Iron Mountain, Inc.		1,682		57,037
Torchmark Corp.		986		53,402
Assurant, Inc.		566		43,667
Zions Bancorporation		1,787		43,263
People’s United Financial, Inc.		2,713		43,218
Navient Corp.		2,996		35,862
Legg Mason, Inc.		941		32,634
Total Financial				26,321,041
Communications - 10.2%
Facebook, Inc. — Class A*		20,057		2,288,504
AT&T, Inc.		53,759		2,105,740
Amazon.com, Inc.*		3,374		2,002,941
Alphabet, Inc. — Class A*		2,557		1,950,735
Alphabet, Inc. — Class C*		2,597		1,934,635
Verizon Communications, Inc.		35,604		1,925,464
Walt Disney Co.		13,119		1,302,847
Comcast Corp. — Class A		21,263		1,298,744
Cisco Systems, Inc.		43,979		1,252,082
Priceline Group, Inc.*		434		559,409

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 15

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NOVA FUND

	Shares		Value
Time Warner Cable, Inc.		2,476	$	506,639
Time Warner, Inc.		6,906		501,030
Netflix, Inc.*		3,741		382,442
Yahoo!, Inc.*		7,613		280,235
Twenty-First Century Fox, Inc. — Class A		9,784		272,778
eBay, Inc.*		9,477		226,121
CBS Corp. — Class B		3,687		203,116
Omnicom Group, Inc.		2,094		174,284
CenturyLink, Inc.		4,753		151,906
Level 3 Communications, Inc.*		2,526		133,499
Viacom, Inc. — Class B		3,028		124,996
Expedia, Inc.		1,036		111,702
Twenty-First Century Fox, Inc. — Class B		3,769		106,286
Motorola Solutions, Inc.		1,387		104,996
Symantec Corp.		5,700		104,766
Interpublic Group of Companies, Inc.		3,514		80,646
Juniper Networks, Inc.		3,076		78,469
VeriSign, Inc.*		842		74,551
TripAdvisor, Inc.*		996		66,234
Cablevision Systems Corp. — Class A		1,945		64,185
F5 Networks, Inc.*		601		63,616
Frontier Communications Corp.		10,210		57,074
Discovery Communications, Inc. — Class C*		2,080		56,160
Scripps Networks Interactive, Inc. — Class A		829		54,300
TEGNA, Inc.		1,920		45,043
News Corp. — Class A		3,321		42,409
Discovery Communications, Inc. — Class A*		1,312		37,563
News Corp. — Class B		942		12,482
Total Communications				20,738,629
Technology - 9.9%
Apple, Inc.		48,459		5,281,438
Microsoft Corp.		69,124		3,817,718
Intel Corp.		41,286		1,335,602
International Business Machines Corp.		7,726		1,170,103
Oracle Corp.		27,538		1,126,580
QUALCOMM, Inc.		13,065		668,144
Accenture plc — Class A		5,488		633,315
Texas Instruments, Inc.		8,786		504,492
EMC Corp.		17,017		453,503
Adobe Systems, Inc.*		4,355		408,499
salesforce.com, Inc.*		5,512		406,951
Cognizant Technology Solutions Corp. — Class A*		5,324		333,815
Hewlett Packard Enterprise Co.		15,002		265,985
Intuit, Inc.		2,245		233,502
Applied Materials, Inc.		9,882		209,301
Fiserv, Inc.*		1,948		199,826
HP, Inc.		15,090		185,909
Electronic Arts, Inc.*		2,703		178,695
Analog Devices, Inc.		2,709		160,346
NVIDIA Corp.		4,467		159,159
Fidelity National Information Services, Inc.		2,413		152,767
Paychex, Inc.		2,808		151,660
Activision Blizzard, Inc.		4,432		149,979
Cerner Corp.*		2,645		140,079
SanDisk Corp.		1,757		133,673
Skyworks Solutions, Inc.		1,675		130,483
Red Hat, Inc.*		1,596		118,918
Autodesk, Inc.*		1,969		114,812
Lam Research Corp.		1,389		114,731
Xilinx, Inc.		2,233		105,911
Citrix Systems, Inc.*		1,346		105,769
KLA-Tencor Corp.		1,360		99,022
Western Digital Corp.		2,034		96,086
Micron Technology, Inc.*		9,067		94,931
Linear Technology Corp.		2,092		93,220
Xerox Corp.		8,321		92,862
Seagate Technology plc		2,591		89,260
Akamai Technologies, Inc.*		1,545		85,856
Microchip Technology, Inc.		1,779		85,748
CA, Inc.		2,586		79,623
NetApp, Inc.		2,527		68,962
Qorvo, Inc.*		1,128		56,862
Pitney Bowes, Inc.		1,674		36,058
Dun & Bradstreet Corp.		316		32,573
CSRA, Inc.		1,191		32,038
Teradata Corp.*		1,162		30,491
Total Technology				20,225,257
Consumer, Cyclical - 8.2%
Home Depot, Inc.		11,081		1,478,537
CVS Health Corp.		9,600		995,808
McDonald’s Corp.		7,880		990,358
Wal-Mart Stores, Inc.		13,712		939,134
Starbucks Corp.		12,918		771,205
NIKE, Inc. — Class B		11,798		725,223
Walgreens Boots Alliance, Inc.		7,542		635,338
Lowe’s Companies, Inc.		7,998		605,849
Costco Wholesale Corp.		3,844		605,738
Ford Motor Co.		34,073		459,986
TJX Companies, Inc.		5,851		458,426
Target Corp.		5,263		433,039
General Motors Co.		12,284		386,086
Delta Air Lines, Inc.		6,804		331,218
Yum! Brands, Inc.		3,572		292,368
Southwest Airlines Co.		5,577		249,850
O’Reilly Automotive, Inc.*		849		232,338
Johnson Controls, Inc.		5,665		220,765
Dollar General Corp.		2,543		217,681
American Airlines Group, Inc.		5,270		216,123
AutoZone, Inc.*		264		210,326
Carnival Corp.		3,938		207,809
Ross Stores, Inc.		3,540		204,966
L Brands, Inc.		2,226		195,465
VF Corp.		2,968		192,208
United Continental Holdings, Inc.*		3,142		188,080
Delphi Automotive plc		2,426		181,999

16 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NOVA FUND

	Shares		Value
Dollar Tree, Inc.*		2,052	$	169,208
PACCAR, Inc.		3,071		167,953
Under Armour, Inc. — Class A*		1,588		134,710
Genuine Parts Co.		1,307		129,864
Chipotle Mexican Grill, Inc. — Class A*		263		123,865
Fastenal Co.		2,522		123,578
Starwood Hotels & Resorts Worldwide, Inc.		1,475		123,059
Royal Caribbean Cruises Ltd.		1,482		121,746
Whirlpool Corp.		675		121,730
Macy’s, Inc.		2,712		119,572
Marriott International, Inc. — Class A		1,662		118,301
WW Grainger, Inc.		496		115,781
Mohawk Industries, Inc.*		556		106,141
Tractor Supply Co.		1,169		105,747
Newell Rubbermaid, Inc.		2,335		103,417
Advance Auto Parts, Inc.		641		102,778
Mattel, Inc.		2,972		99,919
Coach, Inc.		2,427		97,298
Hanesbrands, Inc.		3,423		97,008
Michael Kors Holdings Ltd.*		1,568		89,313
CarMax, Inc.*		1,711		87,432
DR Horton, Inc.		2,876		86,941
Signet Jewelers Ltd.		695		86,201
Harley-Davidson, Inc.		1,608		82,539
Best Buy Company, Inc.		2,462		79,867
Hasbro, Inc.		982		78,658
Kohl’s Corp.		1,659		77,326
Goodyear Tire & Rubber Co.		2,334		76,975
Lennar Corp. — Class A		1,574		76,119
Wyndham Worldwide Corp.		983		75,131
BorgWarner, Inc.		1,911		73,382
Tiffany & Co.		975		71,546
Bed Bath & Beyond, Inc.*		1,430		70,985
PVH Corp.		716		70,927
Darden Restaurants, Inc.		1,009		66,897
Wynn Resorts Ltd.		711		66,429
Nordstrom, Inc.		1,122		64,190
Staples, Inc.		5,644		62,253
The Gap, Inc.		1,978		58,153
Leggett & Platt, Inc.		1,186		57,402
Harman International Industries, Inc.		622		55,383
PulteGroup, Inc.		2,777		51,958
Ralph Lauren Corp. — Class A		508		48,900
AutoNation, Inc.*		647		30,202
GameStop Corp. — Class A		915		29,033
Urban Outfitters, Inc.*		759		25,115
Total Consumer, Cyclical				16,706,855
Industrial - 7.3%
General Electric Co.		81,546		2,592,348
3M Co.		5,288		881,139
Honeywell International, Inc.		6,724		753,423
Boeing Co.		5,443		690,934
United Technologies Corp.		6,798		680,480
United Parcel Service, Inc. — Class B		6,032		636,194
Union Pacific Corp.		7,397		588,430
Lockheed Martin Corp.		2,296		508,564
Caterpillar, Inc.		5,089		389,512
FedEx Corp.		2,240		364,493
General Dynamics Corp.		2,556		335,782
Raytheon Co.		2,613		320,432
Northrop Grumman Corp.		1,581		312,880
Emerson Electric Co.		5,621		305,669
Illinois Tool Works, Inc.		2,861		293,082
Eaton Corporation plc		4,011		250,928
Norfolk Southern Corp.		2,606		216,950
CSX Corp.		8,418		216,764
Waste Management, Inc.		3,622		213,698
Corning, Inc.		9,726		203,177
Deere & Co.		2,618		201,560
TE Connectivity Ltd.		3,231		200,064
Roper Technologies, Inc.		883		161,386
Cummins, Inc.		1,417		155,785
Amphenol Corp. — Class A		2,692		155,651
Stanley Black & Decker, Inc.		1,331		140,035
Ingersoll-Rand plc		2,245		139,212
Tyco International plc		3,711		136,231
Parker-Hannifin Corp.		1,181		131,185
Rockwell Automation, Inc.		1,149		130,699
Vulcan Materials Co.		1,164		122,883
Agilent Technologies, Inc.		2,865		114,170
Rockwell Collins, Inc.		1,146		105,673
AMETEK, Inc.		2,059		102,909
Republic Services, Inc. — Class A		2,080		99,112
Stericycle, Inc.*		743		93,759
Waters Corp.*		710		93,663
CH Robinson Worldwide, Inc.		1,252		92,936
Masco Corp.		2,918		91,771
Martin Marietta Materials, Inc.		562		89,645
Ball Corp.		1,239		88,328
Dover Corp.		1,355		87,167
WestRock Co.		2,219		86,608
Pentair plc		1,594		86,490
Textron, Inc.		2,370		86,410
Harris Corp.		1,089		84,790
Sealed Air Corp.		1,713		82,241
Kansas City Southern		948		81,007
L-3 Communications Holdings, Inc.		680		80,580
Snap-on, Inc.		508		79,751
Expeditors International of Washington, Inc.		1,592		77,706
J.B. Hunt Transport Services, Inc.		779		65,623
Fluor Corp.		1,214		65,192
Xylem, Inc.		1,560		63,804
Allegion plc		840		53,516
Flowserve Corp.		1,137		50,494
PerkinElmer, Inc.		960		47,482
Jacobs Engineering Group, Inc.*		1,071		46,642

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 17

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NOVA FUND

	Shares		Value
Garmin Ltd.		1,028	$	41,079
FLIR Systems, Inc.		1,202		39,606
Ryder System, Inc.		468		30,317
Owens-Illinois, Inc.*		1,407		22,456
Total Industrial				14,760,497
Energy - 5.2%
Exxon Mobil Corp.		36,294		3,033,816
Chevron Corp.		16,458		1,570,093
Schlumberger Ltd.		10,953		807,785
Occidental Petroleum Corp.		6,676		456,839
ConocoPhillips		10,804		435,077
Phillips 66		4,103		355,279
EOG Resources, Inc.		4,806		348,820
Kinder Morgan, Inc.		15,993		285,635
Halliburton Co.		7,502		267,971
Valero Energy Corp.		4,111		263,680
Anadarko Petroleum Corp.		4,444		206,957
Pioneer Natural Resources Co.		1,427		200,836
Spectra Energy Corp.		5,869		179,591
Marathon Petroleum Corp.		4,625		171,958
Baker Hughes, Inc.		3,827		167,737
Apache Corp.		3,306		161,366
Devon Energy Corp.		4,460		122,382
Hess Corp.		2,314		121,832
Noble Energy, Inc.		3,748		117,725
Concho Resources, Inc.*		1,129		114,074
Cameron International Corp.*		1,675		112,309
National Oilwell Varco, Inc.		3,284		102,132
Williams Companies, Inc.		5,965		95,858
Equities Corp.		1,395		93,828
Cabot Oil & Gas Corp. — Class A		4,003		90,908
Tesoro Corp.		1,043		89,708
Columbia Pipeline Group, Inc.		3,494		87,699
Marathon Oil Corp.		7,373		82,135
Cimarex Energy Co.		829		80,637
Newfield Exploration Co.*		1,732		57,589
Helmerich & Payne, Inc.		944		55,431
ONEOK, Inc.		1,835		54,793
FMC Technologies, Inc.*		1,983		54,255
Range Resources Corp.		1,482		47,987
First Solar, Inc.*		667		45,669
Murphy Oil Corp.		1,413		35,593
Southwestern Energy Co.*		3,406		27,486
Transocean Ltd.		2,991		27,338
Chesapeake Energy Corp.		4,522		18,631
Diamond Offshore Drilling, Inc.		563		12,234
Total Energy				10,661,673
Utilities - 2.7%
Duke Energy Corp.		6,016		485,372
NextEra Energy, Inc.		4,026		476,437
Southern Co.		7,978		412,702
Dominion Resources, Inc.		5,213		391,600
Exelon Corp.		8,040		288,314
American Electric Power Company, Inc.		4,292		284,989
PG&E Corp.		4,307		257,213
PPL Corp.		5,889		224,194
Sempra Energy		2,061		214,447
Public Service Enterprise Group, Inc.		4,426		208,642
Edison International		2,847		204,671
Consolidated Edison, Inc.		2,566		196,607
Xcel Energy, Inc.		4,436		185,514
WEC Energy Group, Inc.		2,759		165,733
Eversource Energy		2,772		161,718
DTE Energy Co.		1,569		142,246
FirstEnergy Corp.		3,703		133,197
Entergy Corp.		1,560		123,677
American Water Works Company, Inc.		1,556		107,255
Ameren Corp.		2,121		106,262
CMS Energy Corp.		2,422		102,790
SCANA Corp.		1,249		87,617
CenterPoint Energy, Inc.		3,760		78,659
Pinnacle West Capital Corp.		970		72,818
AGL Resources, Inc.		1,052		68,527
AES Corp.		5,766		68,038
NiSource, Inc.		2,794		65,827
TECO Energy, Inc.		2,058		56,657
NRG Energy, Inc.		2,752		35,804
Total Utilities				5,407,527
Basic Materials - 1.9%
Dow Chemical Co.		9,763		496,545
EI du Pont de Nemours & Co.		7,618		482,372
Monsanto Co.		3,849		337,711
Praxair, Inc.		2,489		284,865
PPG Industries, Inc.		2,331		259,883
Ecolab, Inc.		2,328		259,619
LyondellBasell Industries N.V. — Class A		3,022		258,623
Air Products & Chemicals, Inc.		1,696		244,309
Sherwin-Williams Co.		685		194,999
International Paper Co.		3,593		147,457
Nucor Corp.		2,779		131,447
Newmont Mining Corp.		4,625		122,933
Freeport-McMoRan, Inc.		10,941		113,130
Alcoa, Inc.		11,491		110,084
Eastman Chemical Co.		1,292		93,321
Mosaic Co.		3,081		83,187
Airgas, Inc.		570		80,735
International Flavors & Fragrances, Inc.		698		79,411
CF Industries Holdings, Inc.		2,037		63,840
FMC Corp.		1,168		47,152
Total Basic Materials				3,891,623
Information Technology - 0.2%
Broadcom Ltd.		3,241		500,735

18 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NOVA FUND

	Shares		Value
Diversified - 0.0%
Leucadia National Corp.		2,913	$	47,103
Total Common Stocks
(Cost $135,081,709)				156,950,514
MUTUAL FUNDS† - 0.4%
Guggenheim Strategy Fund I1		30,688		761,374
Total Mutual Funds
(Cost $760,473)				761,374

	Face Amount
FEDERAL AGENCY DISCOUNT NOTES†† - 3.9%
Farmer Mac2
0.66% due 12/09/16	$	8,000,000		7,972,560
Total Federal Agency Discount Notes
(Cost $7,963,040)				7,972,560
FEDERAL AGENCY NOTES†† - 2.5%
Federal Farm Credit Bank2
0.42% due 08/01/176		5,000,000		4,990,775
Total Federal Agency Notes
(Cost $5,000,000)				4,990,775
REPURCHASE AGREEMENTS††,3 - 14.4%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		16,658,646		16,658,646
HSBC Group issued 03/31/16 at 0.21% due 04/01/164		12,541,190		12,541,190
Total Repurchase Agreements
(Cost $29,199,836)				29,199,836
Total Investments - 98.2%
(Cost $178,005,058)			$	199,875,059
Other Assets & Liabilities, net - 1.8%				3,599,094
Total Net Assets - 100.0%			$	203,474,153

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $26,143,875)		255	$	164,064

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International April 2016 S&P 500 Index Swap 0.40%5, Terminating 04/26/16 (Notional Value $33,092,704)		16,066	$	374,346
Barclays Bank plc April 2016 S&P 500 Index Swap 0.40%5, Terminating 04/29/16 (Notional Value $85,177,352)		41,353		203,935
Credit Suisse Capital, LLC April 2016 S&P 500 Index Swap 0.43%5, Terminating 04/26/16 (Notional Value $2,953,914)		1,434		33,468
(Total Notional Value $121,223,970)			$	611,749

*	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	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	Repurchase Agreements — See Note 5.
4	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
5	Total Return based on S&P 500 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
6	Variable rate security. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 19

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
NOVA FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	156,950,514	$	—	$	—	$	—	$	—	$	156,950,514
Equity Futures Contracts		—		164,064		—		—		—		164,064
Equity Index Swap Agreements		—		—		—		611,749		—		611,749
Federal Agency Discount Notes		—		—		7,972,560		—		—		7,972,560
Federal Agency Notes		—		—		4,990,775		—		—		4,990,775
Mutual Funds		761,374		—		—		—		—		761,374
Repurchase Agreements		—		—		29,199,836		—		—		29,199,836
Total	$	157,711,888	$	164,064	$	42,163,171	$	611,749	$	—	$	200,650,872

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

20 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

NOVA FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $148,044,749)	$	169,913,849
Investments in affiliated issuers, at value (cost $760,473)		761,374
Repurchase agreements, at value (cost $29,199,836)		29,199,836
Total investments (cost $178,005,058)		199,875,059
Segregated cash with broker		9,241,250
Unrealized appreciation on swap agreements		611,749
Cash		2,334
Receivables:
Fund shares sold		1,231,717
Dividends		150,061
Swap settlement		135,858
Interest		2,025
Securities sold		557
Foreign taxes reclaim		102
Total assets		211,250,712
Liabilities:
Payable for:
Fund shares redeemed		7,427,913
Management fees		112,507
Variation margin		59,925
Transfer agent and administrative fees		37,502
Distribution and service fees		17,287
Securities purchased		16,221
Portfolio accounting fees		15,001
Miscellaneous		90,203
Total liabilities		7,776,559
Commitments and contingent liabilities (Note 13)		—
Net assets	$	203,474,153
Net assets consist of:
Paid in capital	$	184,078,028
Undistributed net investment income		36,022
Accumulated net realized gain on investments		(3,285,711	)
Net unrealized appreciation on investments		22,645,814
Net assets	$	203,474,153
Investor Class:
Net assets	$	164,820,276
Capital shares outstanding		3,351,460
Net asset value per share	$	49.18
A-Class:
Net assets	$	13,626,180
Capital shares outstanding		295,695
Net asset value per share	$	46.08
Maximum offering price per share (Net asset value divided by 95.25%)	$	48.38
C-Class:
Net assets	$	11,089,686
Capital shares outstanding		264,913
Net asset value per share	$	41.86
H-Class:
Net assets	$	13,938,011
Capital shares outstanding		302,599
Net asset value per share	$	46.06

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 21

NOVA FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $266)	$	1,702,095
Dividends from securities of affiliated issuers		214,103
Interest		43,346
Income from securities lending, net		760
Total investment income		1,960,304
Expenses:
Management fees		1,053,833
Transfer agent and administrative fees		351,278
Distribution and service fees:
Advisor Class		8,604
A-Class		18,508
C-Class		117,044
H-Class		20,537
Portfolio accounting fees		140,510
Custodian fees		16,311
Trustees’ fees*		9,436
Line of credit fees		1,828
Miscellaneous		186,393
Total expenses		1,924,282
Net investment income		36,022
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		13,457,406
Investments in affiliated issuers		(48,861	)
Swap agreements		(4,304,217	)
Futures contracts		(534,915	)
Net realized gain		8,569,413
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(10,040,910	)
Investments in affiliated issuers		901
Swap agreements		324,292
Futures contracts		112,883
Net change in unrealized appreciation (depreciation)		(9,602,834	)
Net realized and unrealized loss		(1,033,421	)
Net decrease in net assets resulting from operations	$	(997,399	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

22 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

NOVA FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	36,022		$	261,033
Net realized gain on investments		8,569,413			15,565,512
Net change in unrealized appreciation (depreciation) on investments		(9,602,834	)		5,141,300
Net increase (decrease) in net assets resulting from operations		(997,399	)		20,967,845
Distributions to shareholders from:
Net investment income
Investor Class		(220,226	)		(127,360	)
Advisor Class**		—			(24,443	)
A-Class		(16,296	)		(4,698	)
C-Class		(17,646	)		(12,406	)
H-Class**		(6,865	)		(244	)*
Total distributions to shareholders		(261,033	)		(169,151	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		1,146,890,963			608,271,001
Advisor Class**		42,136,814			251,879,413
A-Class		97,617,577			6,568,419
C-Class		5,328,959			5,111,829
H-Class**		338,809,074			88,621,421	*
Distributions reinvested
Investor Class		211,470			122,980
Advisor Class**		—			24,400
A-Class		16,174			4,554
C-Class		17,443			11,924
H-Class**		6,864			244	*
Cost of shares redeemed
Investor Class		(1,116,506,927	)		(590,801,336	)
Advisor Class**		(40,531,593	)		(259,841,399	)
A-Class		(88,372,143	)		(4,276,469	)
C-Class		(6,024,829	)		(5,079,311	)
H-Class**		(333,139,118	)		(86,211,806	)*
Conversion activity**
Advisor Class		(4,895,263	)		—
H-Class		4,895,263			—
Net increase from capital share transactions		46,460,728			14,405,864
Net increase in net assets		45,202,296			35,204,558
Net assets:
Beginning of year		158,271,857			123,067,299
End of year	$	203,474,153		$	158,271,857
Undistributed net investment income at end of year	$	36,022		$	261,033

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 23

NOVA FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
Investor Class		24,114,641			13,070,082
Advisor Class**		945,322			6,029,241
A-Class		2,237,941			148,884
C-Class		129,164			126,849
H-Class**		7,584,301			1,938,918	*
Shares issued from reinvestment of distributions
Investor Class		4,228			2,527
Advisor Class**		—			549
A-Class		345			100
C-Class		408			284
H-Class**		146			5	*
Shares redeemed
Investor Class		(23,535,529	)		(12,754,141	)
Advisor Class**		(909,434	)		(6,156,017	)
A-Class		(2,027,298	)		(95,445	)
C-Class		(146,842	)		(128,803	)
H-Class**		(7,436,202	)		(1,902,454	)*
Conversion activity**
Advisor Class		(121,453	)		—
H-Class		117,885			—
Net increase in shares		957,623			280,579

*	Since the commencement of operations: September 18, 2014.
**	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

24 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	49.42		$	42.15		$	32.05		$	26.82		$	24.59
Income (loss) from investment operations:
Net investment income (loss)a		.07			.14			.14			.05			.08
Net gain (loss) on investments (realized and unrealized)		(.25	)		7.18			9.96			5.21			2.15
Total from investment operations		(.18	)		7.32			10.10			5.26			2.23
Less distributions from:
Net investment income		(.06	)		(.05	)		—			(.03	)		—
Total distributions		(.06	)		(.05	)		—			(.03	)		—
Net asset value, end of period	$	49.18		$	49.42		$	42.15		$	32.05		$	26.82
Total Returnb		(0.36	%)		17.36	%		31.51	%		19.62	%		9.07	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	164,820		$	136,800		$	103,254		$	52,785		$	54,598
Ratios to average net assets:
Net investment income (loss)		0.14	%		0.31	%		0.37	%		0.20	%		0.36	%
Total expensesc		1.25	%		1.27	%		1.28	%		1.26	%		1.26	%
Portfolio turnover rate		619	%		403	%		259	%		137	%		116	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	46.40		$	39.67		$	30.23		$	25.38		$	23.32
Income (loss) from investment operations:
Net investment income (loss)a		(.05	)		.02			.05			(.01	)		.01
Net gain (loss) on investments (realized and unrealized)		(.21	)		6.76			9.39			4.89			2.05
Total from investment operations		(.26	)		6.78			9.44			4.88			2.06
Less distributions from:
Net investment income		(.06	)		(.05	)		—			(.03	)		—
Total distributions		(.06	)		(.05	)		—			(.03	)		—
Net asset value, end of period	$	46.08		$	46.40		$	39.67		$	30.23		$	25.38
Total Returnb		(0.56	%)		17.09	%		31.23	%		19.28	%		8.79	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,626		$	3,930		$	1,237		$	1,189		$	1,472
Ratios to average net assets:
Net investment income (loss)		(0.11	%)		0.05	%		0.14	%		(0.04	%)		0.06	%
Total expensesc		1.51	%		1.52	%		1.53	%		1.50	%		1.51	%
Portfolio turnover rate		619	%		403	%		259	%		137	%		116	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 25

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	42.50		$	36.62		$	28.11		$	23.77		$	22.01
Income (loss) from investment operations:
Net investment income (loss)a		(.34	)		(.28	)		(.20	)		(.19	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		(.24	)		6.21			8.71			4.56			1.89
Total from investment operations		(.58	)		5.93			8.51			4.37			1.76
Less distributions from:
Net investment income		(.06	)		(.05	)		—			(.03	)		—
Total distributions		(.06	)		(.05	)		—			(.03	)		—
Net asset value, end of period	$	41.86		$	42.50		$	36.62		$	28.11		$	23.77
Total Returnb		(1.36	%)		16.19	%		30.27	%		18.39	%		8.00	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,090		$	11,993		$	10,394		$	8,705		$	8,829
Ratios to average net assets:
Net investment income (loss)		(0.83	%)		(0.70	%)		(0.62	%)		(0.79	%)		(0.62	%)
Total expensesc		2.26	%		2.27	%		2.28	%		2.25	%		2.26	%
Portfolio turnover rate		619	%		403	%		259	%		137	%		116	%

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	46.40		$	44.40
Income (loss) from investment operations:
Net investment income (loss)a		(.06	)		.02
Net gain (loss) on investments (realized and unrealized)		(.22	)		2.03
Total from investment operations		(.28	)		2.05
Less distributions from:
Net investment income		(.06	)		(.05	)
Total distributions		(.06	)		(.05	)
Net asset value, end of period	$	46.06		$	46.40
Total Returnb		(0.60	%)		4.61	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,938		$	1,692
Ratios to average net assets:
Net investment income (loss)		(0.14	%)		0.08	%
Total expensesc		1.51	%		1.51	%
Portfolio turnover rate		619	%		403	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: September 18, 2014. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. The portfolio turnover rate stated is for the entire period of the Fund, not since the commencement of operations of the Class.

26 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

The broad-market S&P 500 Index returned 1.78% for the one-year period ended March 31, 2016, while the S&P 500^® Fund H-Class returned 0.06% for the same period. The Fund maintained a daily correlation of over 99% to its benchmark of the daily price movement of the S&P 500 Index.

Sectors contributing the most to the performance of the underlying index were Information Technology and Consumer Staples. The sector detracting the most was Energy, followed by Health Care.

Microsoft Corp., General Electric Co., and Amazon.com, Inc. were the holdings contributing the most to the performance of the underlying index for the period. Apple, Inc., Biogen, Inc., and Kinder Morgan, Inc. — Class P detracted the most from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

Performance displayed represents past performance, which is no guarantee of future results.

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.	2.3%
Microsoft Corp.	1.6%
Exxon Mobil Corp.	1.3%
Johnson & Johnson	1.1%
General Electric Co.	1.1%
Berkshire Hathaway, Inc. — Class B	1.0%
Facebook, Inc. — Class A	1.0%
AT&T, Inc.	0.9%
Amazon.com, Inc.	0.9%
Wells Fargo & Co.	0.8%
Top Ten Total	12.0%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 27

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (05/31/06)
A-Class Shares	0.08%	9.76%	5.77%
A-Class Shares with sales charge†	-4.66%	8.70%	5.24%
C-Class Shares	-0.67%	8.92%	4.94%
C-Class Shares with CDSC‡	-1.63%	8.92%	4.94%
H-Class Shares	0.06%	9.78%	5.76%
S&P 500 Index	1.78%	11.58%	7.30%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

28 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P 500® FUND

	Shares		Value
COMMON STOCKS† - 67.3%
Consumer, Non-cyclical - 16.1%
Johnson & Johnson		29,434	$	3,184,758
Procter & Gamble Co.		28,294		2,328,879
Coca-Cola Co.		41,564		1,928,153
Pfizer, Inc.		64,515		1,912,225
Philip Morris International, Inc.		16,527		1,621,464
PepsiCo, Inc.		15,418		1,580,037
Merck & Company, Inc.		29,603		1,566,295
Gilead Sciences, Inc.		14,580		1,339,319
Altria Group, Inc.		20,885		1,308,654
UnitedHealth Group, Inc.		10,141		1,307,175
Amgen, Inc.		8,022		1,202,738
Bristol-Myers Squibb Co.		17,808		1,137,575
Allergan plc*		4,210		1,128,406
Medtronic plc		14,999		1,124,925
AbbVie, Inc.		17,187		981,721
Celgene Corp.*		8,338		834,550
Eli Lilly & Co.		10,383		747,680
Colgate-Palmolive Co.		9,523		672,800
Mondelez International, Inc. — Class A		16,735		671,407
Abbott Laboratories		15,715		657,358
Biogen, Inc.*		2,332		607,066
Danaher Corp.		6,377		604,922
Thermo Fisher Scientific, Inc.		4,227		598,501
Kimberly-Clark Corp.		3,850		517,864
Kraft Heinz Co.		6,342		498,228
Express Scripts Holding Co.*		7,126		489,485
PayPal Holdings, Inc.*		11,868		458,105
Reynolds American, Inc.		8,831		444,288
Automatic Data Processing, Inc.		4,880		437,784
Aetna, Inc.		3,729		418,953
General Mills, Inc.		6,329		400,942
Kroger Co.		10,397		397,685
Anthem, Inc.		2,788		387,504
McKesson Corp.		2,438		383,375
Cigna Corp.		2,728		374,391
Stryker Corp.		3,342		358,563
Becton Dickinson and Co.		2,259		342,961
Alexion Pharmaceuticals, Inc.*		2,403		334,546
Regeneron Pharmaceuticals, Inc.*		833		300,247
Baxalta, Inc.		7,267		293,587
Humana, Inc.		1,582		289,427
Cardinal Health, Inc.		3,513		287,890
Constellation Brands, Inc. — Class A		1,876		283,445
McGraw Hill Financial, Inc.		2,830		280,113
Boston Scientific Corp.*		14,383		270,544
Sysco Corp.		5,601		261,735
HCA Holdings, Inc.*		3,260		254,444
Illumina, Inc.*		1,568		254,188
Baxter International, Inc.		5,844		240,072
Intuitive Surgical, Inc.*		399		239,819
Archer-Daniels-Midland Co.		6,350		230,569
Estee Lauder Companies, Inc. — Class A		2,367		223,232
Zoetis, Inc.		4,879		216,286
Monster Beverage Corp.*		1,602		213,675
Vertex Pharmaceuticals, Inc.*		2,628		208,900
Tyson Foods, Inc. — Class A		3,126		208,379
ConAgra Foods, Inc.		4,631		206,635
Kellogg Co.		2,690		205,920
Mylan N.V.*		4,397		203,801
Zimmer Biomet Holdings, Inc.		1,909		203,557
Nielsen Holdings plc		3,860		203,268
Edwards Lifesciences Corp.*		2,289		201,913
Perrigo Company plc		1,562		199,827
Molson Coors Brewing Co. — Class B		1,961		188,609
AmerisourceBergen Corp. — Class A		2,082		180,197
Dr Pepper Snapple Group, Inc.		1,998		178,661
Moody’s Corp.		1,809		174,677
Clorox Co.		1,380		173,963
Mead Johnson Nutrition Co. — Class A		1,989		169,005
St. Jude Medical, Inc.		3,025		166,375
JM Smucker Co.		1,277		165,806
CR Bard, Inc.		787		159,501
DENTSPLY SIRONA, Inc.		2,574		158,636
Henry Schein, Inc.*		874		150,879
Equifax, Inc.		1,266		144,691
Hershey Co.		1,530		140,898
Verisk Analytics, Inc. — Class A*		1,649		131,788
DaVita HealthCare Partners, Inc.*		1,768		129,736
Church & Dwight Company, Inc.		1,384		127,577
Laboratory Corporation of America Holdings*		1,084		126,969
Hormel Foods Corp.		2,883		124,661
McCormick & Company, Inc.		1,231		122,460
Campbell Soup Co.		1,918		122,349
Universal Health Services, Inc. — Class B		964		120,230
Coca-Cola Enterprises, Inc.		2,231		113,201
Centene Corp.*		1,811		111,503
Quest Diagnostics, Inc.		1,523		108,818
Whole Foods Market, Inc.		3,463		107,734
Brown-Forman Corp. — Class B		1,072		105,560
Western Union Co.		5,354		103,279
Hologic, Inc.*		2,631		90,770
Total System Services, Inc.		1,798		85,549
Cintas Corp.		934		83,883
Varian Medical Systems, Inc.*		1,019		81,540
Mallinckrodt plc*		1,194		73,168
ADT Corp.		1,763		72,741
Avery Dennison Corp.		954		68,793
H&R Block, Inc.		2,517		66,499
Robert Half International, Inc.		1,399		65,165
Endo International plc*		2,181		61,395
United Rentals, Inc.*		970		60,324

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 29

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P 500® FUND

	Shares		Value
Patterson Companies, Inc.		890	$	41,412
Quanta Services, Inc.*		1,704		38,442
Tenet Healthcare Corp.*		1,051		30,405
Total Consumer, Non-cyclical				46,000,604
Financial - 11.3%
Berkshire Hathaway, Inc. — Class B*		19,985		2,835,472
Wells Fargo & Co.		49,279		2,383,132
JPMorgan Chase & Co.		39,150		2,318,462
Visa, Inc. — Class A		20,471		1,565,622
Bank of America Corp.		110,142		1,489,120
Citigroup, Inc.		31,447		1,312,912
MasterCard, Inc. — Class A		10,459		988,376
U.S. Bancorp		17,420		707,078
Simon Property Group, Inc.		3,300		685,378
American International Group, Inc.		12,261		662,707
Goldman Sachs Group, Inc.		4,190		657,746
Chubb Ltd.		4,916		585,741
American Express Co.		8,741		536,697
MetLife, Inc.		11,698		514,010
American Tower Corp. — Class A		4,522		462,917
BlackRock, Inc. — Class A		1,347		458,749
PNC Financial Services Group, Inc.		5,345		452,026
Public Storage		1,571		433,328
Bank of New York Mellon Corp.		11,475		422,624
Morgan Stanley		16,296		407,563
Capital One Financial Corp.		5,625		389,869
Travelers Companies, Inc.		3,146		367,170
Charles Schwab Corp.		12,818		359,160
CME Group, Inc. — Class A		3,610		346,740
Prudential Financial, Inc.		4,757		343,551
Marsh & McLennan Companies, Inc.		5,560		337,993
Crown Castle International Corp.		3,560		307,940
Aon plc		2,881		300,920
Intercontinental Exchange, Inc.		1,268		298,158
Equity Residential		3,895		292,243
Aflac, Inc.		4,480		282,867
AvalonBay Communities, Inc.		1,461		277,882
BB&T Corp.		8,325		276,973
Allstate Corp.		4,035		271,838
Welltower, Inc.		3,788		262,660
Weyerhaeuser Co.		8,420		260,852
Synchrony Financial*		8,894		254,902
State Street Corp.		4,267		249,705
Prologis, Inc.		5,598		247,320
Equinix, Inc.		735		243,072
Ventas, Inc.		3,585		225,712
Discover Financial Services		4,418		224,965
Progressive Corp.		6,233		219,028
Boston Properties, Inc.		1,638		208,157
Hartford Financial Services Group, Inc.		4,231		194,964
T. Rowe Price Group, Inc.		2,647		194,449
SunTrust Banks, Inc.		5,387		194,363
M&T Bank Corp.		1,697		188,367
General Growth Properties, Inc.		6,212		184,683
Vornado Realty Trust		1,891		178,567
Willis Towers Watson plc		1,474		174,905
Ameriprise Financial, Inc.		1,802		169,406
Realty Income Corp.		2,671		166,964
Essex Property Trust, Inc.		697		163,000
HCP, Inc.		4,966		161,792
Franklin Resources, Inc.		3,983		155,536
Northern Trust Corp.		2,296		149,630
Fifth Third Bancorp		8,355		139,445
Alliance Data Systems Corp.*		632		139,040
Invesco Ltd.		4,442		136,680
Host Hotels & Resorts, Inc.		8,024		134,001
Kimco Realty Corp.		4,413		127,006
Extra Space Storage, Inc.		1,334		124,676
Citizens Financial Group, Inc.		5,630		117,949
Federal Realty Investment Trust		743		115,945
XL Group plc — Class A		3,113		114,558
Principal Financial Group, Inc.		2,893		114,129
UDR, Inc.		2,849		109,772
Loews Corp.		2,857		109,309
Regions Financial Corp.		13,737		107,835
Macerich Co.		1,352		107,132
SL Green Realty Corp.		1,067		103,371
Cincinnati Financial Corp.		1,578		103,138
Lincoln National Corp.		2,570		100,744
KeyCorp		8,913		98,400
Affiliated Managers Group, Inc.*		576		93,542
CBRE Group, Inc. — Class A*		3,102		89,400
Nasdaq, Inc.		1,224		81,249
Huntington Bancshares, Inc.		8,480		80,899
Unum Group		2,548		78,784
E*TRADE Financial Corp.*		3,016		73,862
Comerica, Inc.		1,865		70,628
Apartment Investment & Management Co. — Class A		1,670		69,839
Iron Mountain, Inc.		2,053		69,617
Torchmark Corp.		1,203		65,154
Assurant, Inc.		691		53,311
Zions Bancorporation		2,181		52,802
People’s United Financial, Inc.		3,311		52,744
Navient Corp.		3,657		43,774
Legg Mason, Inc.		1,149		39,847
Total Financial				32,124,545
Communications - 8.9%
Facebook, Inc. — Class A*		24,480		2,793,167
AT&T, Inc.		65,614		2,570,100
Amazon.com, Inc.*		4,118		2,444,610
Alphabet, Inc. — Class A*		3,121		2,381,010
Alphabet, Inc. — Class C*		3,170		2,361,492
Verizon Communications, Inc.		43,455		2,350,046
Walt Disney Co.		16,011		1,590,052
Comcast Corp. — Class A		25,952		1,585,148

30 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P 500® FUND

	Shares		Value
Cisco Systems, Inc.		53,677	$	1,528,185
Priceline Group, Inc.*		529		681,860
Time Warner Cable, Inc.		3,022		618,362
Time Warner, Inc.		8,428		611,451
Netflix, Inc.*		4,566		466,782
Yahoo!, Inc.*		9,292		342,039
Twenty-First Century Fox, Inc. — Class A		11,941		332,915
eBay, Inc.*		11,567		275,989
CBS Corp. — Class B		4,499		247,850
Omnicom Group, Inc.		2,556		212,735
CenturyLink, Inc.		5,801		185,400
Level 3 Communications, Inc.*		3,083		162,937
Viacom, Inc. — Class B		3,696		152,571
Expedia, Inc.		1,264		136,284
Twenty-First Century Fox, Inc. — Class B		4,600		129,720
Motorola Solutions, Inc.		1,692		128,084
Symantec Corp.		6,957		127,870
Interpublic Group of Companies, Inc.		4,289		98,433
Juniper Networks, Inc.		3,755		95,790
VeriSign, Inc.*		1,028		91,019
TripAdvisor, Inc.*		1,215		80,798
Cablevision Systems Corp. — Class A		2,374		78,342
F5 Networks, Inc.*		733		77,588
Frontier Communications Corp.		12,461		69,657
Discovery Communications, Inc. — Class C*		2,539		68,553
Scripps Networks Interactive, Inc. — Class A		1,012		66,286
TEGNA, Inc.		2,344		54,990
News Corp. — Class A		4,053		51,757
Discovery Communications, Inc. — Class A*		1,601		45,837
News Corp. — Class B		1,150		15,238
Total Communications				25,310,947
Technology - 8.7%
Apple, Inc.		59,144		6,445,996
Microsoft Corp.		84,367		4,659,590
Intel Corp.		50,390		1,630,116
International Business Machines Corp.		9,430		1,428,174
Oracle Corp.		33,610		1,374,985
QUALCOMM, Inc.		15,946		815,478
Accenture plc — Class A		6,698		772,949
Texas Instruments, Inc.		10,723		615,715
EMC Corp.		20,769		553,494
Adobe Systems, Inc.*		5,316		498,642
salesforce.com, Inc.*		6,727		496,654
Cognizant Technology Solutions Corp. — Class A*		6,497		407,362
Hewlett Packard Enterprise Co.		18,310		324,636
Intuit, Inc.		2,739		284,883
Applied Materials, Inc.		12,061		255,452
Fiserv, Inc.*		2,378		243,935
HP, Inc.		18,418		226,910
Electronic Arts, Inc.*		3,299		218,097
Analog Devices, Inc.		3,307		195,741
NVIDIA Corp.		5,452		194,255
Fidelity National Information Services, Inc.		2,945		186,448
Paychex, Inc.		3,427		185,092
Activision Blizzard, Inc.		5,410		183,074
Cerner Corp.*		3,228		170,955
SanDisk Corp.		2,144		163,116
Skyworks Solutions, Inc.		2,044		159,228
Red Hat, Inc.*		1,948		145,145
Autodesk, Inc.*		2,403		140,119
Lam Research Corp.		1,695		140,007
Xilinx, Inc.		2,726		129,294
Citrix Systems, Inc.*		1,642		129,028
KLA-Tencor Corp.		1,660		120,865
Western Digital Corp.		2,483		117,297
Micron Technology, Inc.*		11,066		115,861
Linear Technology Corp.		2,553		113,762
Xerox Corp.		10,156		113,341
Seagate Technology plc		3,162		108,931
Akamai Technologies, Inc.*		1,885		104,749
Microchip Technology, Inc.		2,171		104,642
CA, Inc.		3,156		97,173
NetApp, Inc.		3,084		84,162
Qorvo, Inc.*		1,377		69,415
Pitney Bowes, Inc.		2,043		44,006
Dun & Bradstreet Corp.		386		39,789
CSRA, Inc.		1,453		39,086
Teradata Corp.*		1,419		37,235
Total Technology				24,684,884
Consumer, Cyclical - 7.2%
Home Depot, Inc.		13,524		1,804,506
CVS Health Corp.		11,717		1,215,404
McDonald’s Corp.		9,617		1,208,664
Wal-Mart Stores, Inc.		16,735		1,146,180
Starbucks Corp.		15,767		941,290
NIKE, Inc. — Class B		14,399		885,107
Walgreens Boots Alliance, Inc.		9,205		775,429
Lowe’s Companies, Inc.		9,761		739,396
Costco Wholesale Corp.		4,691		739,208
Ford Motor Co.		41,586		561,411
TJX Companies, Inc.		7,142		559,575
Target Corp.		6,424		528,567
General Motors Co.		14,992		471,199
Delta Air Lines, Inc.		8,304		404,239
Yum! Brands, Inc.		4,360		356,866
Southwest Airlines Co.		6,806		304,909
O’Reilly Automotive, Inc.*		1,037		283,785
Johnson Controls, Inc.		6,915		269,478
Dollar General Corp.		3,103		265,617
American Airlines Group, Inc.		6,432		263,776
AutoZone, Inc.*		322		256,534
Carnival Corp.		4,807		253,666
Ross Stores, Inc.		4,320		250,128
L Brands, Inc.		2,717		238,580
VF Corp.		3,622		234,560

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 31

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P 500® FUND

	Shares		Value
United Continental Holdings, Inc.*		3,835	$	229,563
Delphi Automotive plc		2,960		222,059
Dollar Tree, Inc.*		2,505		206,562
PACCAR, Inc.		3,748		204,978
Under Armour, Inc. — Class A*		1,938		164,401
Genuine Parts Co.		1,595		158,479
Fastenal Co.		3,078		150,822
Chipotle Mexican Grill, Inc. — Class A*		320		150,710
Starwood Hotels & Resorts Worldwide, Inc.		1,800		150,174
Royal Caribbean Cruises Ltd.		1,809		148,609
Whirlpool Corp.		824		148,600
Macy’s, Inc.		3,310		145,938
Marriott International, Inc. — Class A		2,028		144,353
WW Grainger, Inc.		606		141,459
Mohawk Industries, Inc.*		678		129,430
Tractor Supply Co.		1,427		129,087
Newell Rubbermaid, Inc.		2,850		126,227
Advance Auto Parts, Inc.		782		125,386
Mattel, Inc.		3,627		121,940
Coach, Inc.		2,962		118,747
Hanesbrands, Inc.		4,178		118,405
Michael Kors Holdings Ltd.*		1,914		109,021
CarMax, Inc.*		2,088		106,697
DR Horton, Inc.		3,510		106,107
Signet Jewelers Ltd.		848		105,177
Harley-Davidson, Inc.		1,963		100,761
Best Buy Company, Inc.		3,005		97,482
Hasbro, Inc.		1,198		95,960
Kohl’s Corp.		2,025		94,385
Goodyear Tire & Rubber Co.		2,848		93,927
Lennar Corp. — Class A		1,921		92,900
Wyndham Worldwide Corp.		1,200		91,716
BorgWarner, Inc.		2,332		89,549
Tiffany & Co.		1,190		87,322
Bed Bath & Beyond, Inc.*		1,745		86,622
PVH Corp.		874		86,578
Darden Restaurants, Inc.		1,231		81,615
Wynn Resorts Ltd.		868		81,097
Nordstrom, Inc.		1,370		78,378
Staples, Inc.		6,888		75,975
The Gap, Inc.		2,414		70,972
Leggett & Platt, Inc.		1,447		70,035
Harman International Industries, Inc.		759		67,581
PulteGroup, Inc.		3,389		63,408
Ralph Lauren Corp. — Class A		620		59,681
AutoNation, Inc.*		789		36,831
GameStop Corp. — Class A		1,116		35,411
Urban Outfitters, Inc.*		926		30,641
Total Consumer, Cyclical				20,389,832
Industrial - 6.3%
General Electric Co.		99,528		3,163,995
3M Co.		6,454		1,075,430
Honeywell International, Inc.		8,206		919,483
Boeing Co.		6,643		843,262
United Technologies Corp.		8,298		830,630
United Parcel Service, Inc. — Class B		7,362		776,471
Union Pacific Corp.		9,029		718,256
Lockheed Martin Corp.		2,802		620,643
Caterpillar, Inc.		6,212		475,467
FedEx Corp.		2,734		444,876
General Dynamics Corp.		3,120		409,874
Raytheon Co.		3,189		391,067
Northrop Grumman Corp.		1,930		381,947
Emerson Electric Co.		6,860		373,046
Illinois Tool Works, Inc.		3,492		357,721
Eaton Corporation plc		4,895		306,231
Norfolk Southern Corp.		3,181		264,818
CSX Corp.		10,274		264,556
Waste Management, Inc.		4,421		260,839
Corning, Inc.		11,870		247,964
Deere & Co.		3,195		245,983
TE Connectivity Ltd.		3,943		244,151
Roper Technologies, Inc.		1,078		197,026
Cummins, Inc.		1,729		190,086
Amphenol Corp. — Class A		3,286		189,997
Stanley Black & Decker, Inc.		1,625		170,966
Ingersoll-Rand plc		2,740		169,907
Tyco International plc		4,529		166,260
Parker-Hannifin Corp.		1,441		160,066
Rockwell Automation, Inc.		1,402		159,478
Vulcan Materials Co.		1,420		149,909
Agilent Technologies, Inc.		3,496		139,315
Rockwell Collins, Inc.		1,399		129,002
AMETEK, Inc.		2,512		125,550
Republic Services, Inc. — Class A		2,538		120,936
Stericycle, Inc.*		907		114,454
Waters Corp.*		867		114,374
CH Robinson Worldwide, Inc.		1,528		113,423
Masco Corp.		3,562		112,025
Martin Marietta Materials, Inc.		686		109,424
Ball Corp.		1,512		107,791
Dover Corp.		1,653		106,337
WestRock Co.		2,708		105,693
Pentair plc		1,946		105,590
Textron, Inc.		2,893		105,479
Harris Corp.		1,330		103,554
Sealed Air Corp.		2,091		100,389
Kansas City Southern		1,157		98,866
L-3 Communications Holdings, Inc.		830		98,355
Snap-on, Inc.		620		97,334
Expeditors International of Washington, Inc.		1,942		94,789
J.B. Hunt Transport Services, Inc.		950		80,028
Fluor Corp.		1,482		79,583
Xylem, Inc.		1,904		77,874
Allegion plc		1,025		65,303
Flowserve Corp.		1,387		61,597

32 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P 500® FUND

	Shares		Value
PerkinElmer, Inc.		1,171	$	57,918
Jacobs Engineering Group, Inc.*		1,307		56,920
Garmin Ltd.		1,255		50,150
FLIR Systems, Inc.		1,467		48,338
Ryder System, Inc.		571		36,989
Owens-Illinois, Inc.*		1,717		27,403
Total Industrial				18,015,188
Energy - 4.6%
Exxon Mobil Corp.		44,297		3,702,786
Chevron Corp.		20,087		1,916,300
Schlumberger Ltd.		13,368		985,891
Occidental Petroleum Corp.		8,148		557,568
ConocoPhillips		13,186		531,000
Phillips 66		5,007		433,555
EOG Resources, Inc.		5,866		425,755
Kinder Morgan, Inc.		19,519		348,608
Halliburton Co.		9,156		327,052
Valero Energy Corp.		5,018		321,855
Anadarko Petroleum Corp.		5,423		252,550
Pioneer Natural Resources Co.		1,742		245,169
Spectra Energy Corp.		7,163		219,188
Marathon Petroleum Corp.		5,645		209,881
Baker Hughes, Inc.		4,671		204,730
Apache Corp.		4,035		196,948
Devon Energy Corp.		5,443		149,356
Hess Corp.		2,825		148,736
Noble Energy, Inc.		4,574		143,669
Concho Resources, Inc.*		1,377		139,132
Cameron International Corp.*		2,044		137,050
National Oilwell Varco, Inc.		4,009		124,680
Williams Companies, Inc.		7,281		117,006
Equities Corp.		1,703		114,544
Cabot Oil & Gas Corp. — Class A		4,886		110,961
Tesoro Corp.		1,273		109,491
Columbia Pipeline Group, Inc.		4,265		107,052
Marathon Oil Corp.		8,999		100,249
Cimarex Energy Co.		1,011		98,340
Newfield Exploration Co.*		2,113		70,257
Helmerich & Payne, Inc.		1,152		67,646
ONEOK, Inc.		2,240		66,886
FMC Technologies, Inc.*		2,420		66,211
Range Resources Corp.		1,809		58,575
First Solar, Inc.*		814		55,735
Murphy Oil Corp.		1,725		43,453
Southwestern Energy Co.*		4,156		33,539
Transocean Ltd.		3,651		33,370
Chesapeake Energy Corp.		5,519		22,738
Diamond Offshore Drilling, Inc.		688		14,950
Total Energy				13,012,462
Utilities - 2.3%
Duke Energy Corp.		7,343		592,434
NextEra Energy, Inc.		4,913		581,405
Southern Co.		9,737		503,695
Dominion Resources, Inc.		6,362		477,913
Exelon Corp.		9,813		351,894
American Electric Power Company, Inc.		5,238		347,803
PG&E Corp.		5,257		313,948
PPL Corp.		7,188		273,647
Sempra Energy		2,515		261,686
Public Service Enterprise Group, Inc.		5,402		254,650
Edison International		3,475		249,818
Consolidated Edison, Inc.		3,132		239,974
Xcel Energy, Inc.		5,414		226,413
WEC Energy Group, Inc.		3,367		202,256
Eversource Energy		3,383		197,364
DTE Energy Co.		1,914		173,523
FirstEnergy Corp.		4,519		162,548
Entergy Corp.		1,904		150,949
American Water Works Company, Inc.		1,899		130,898
Ameren Corp.		2,588		129,659
CMS Energy Corp.		2,956		125,453
SCANA Corp.		1,524		106,909
CenterPoint Energy, Inc.		4,590		96,023
Pinnacle West Capital Corp.		1,184		88,883
AGL Resources, Inc.		1,284		83,640
AES Corp.		7,037		83,036
NiSource, Inc.		3,411		80,363
TECO Energy, Inc.		2,512		69,155
NRG Energy, Inc.		3,359		43,701
Total Utilities				6,599,640
Basic Materials - 1.7%
Dow Chemical Co.		11,916		606,048
EI du Pont de Nemours & Co.		9,298		588,749
Monsanto Co.		4,697		412,115
Praxair, Inc.		3,038		347,698
PPG Industries, Inc.		2,846		317,301
Ecolab, Inc.		2,842		316,940
LyondellBasell Industries N.V. — Class A		3,688		315,619
Air Products & Chemicals, Inc.		2,070		298,184
Sherwin-Williams Co.		837		238,269
International Paper Co.		4,386		180,001
Nucor Corp.		3,391		160,394
Newmont Mining Corp.		5,644		150,018
Freeport-McMoRan, Inc.		13,353		138,070
Alcoa, Inc.		14,025		134,360
Eastman Chemical Co.		1,576		113,834
Mosaic Co.		3,760		101,520
Airgas, Inc.		695		98,440
International Flavors & Fragrances, Inc.		852		96,932
CF Industries Holdings, Inc.		2,486		77,911
FMC Corp.		1,426		57,568
Total Basic Materials				4,749,971

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 33

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P 500® FUND

	Shares		Value
Information Technology - 0.2%
Broadcom Ltd.		3,955	$	611,048
Diversified - 0.0%
Leucadia National Corp.		3,555		57,484
Total Common Stocks
(Cost $132,802,037)				191,556,605

	Face Amount
FEDERAL AGENCY DISCOUNT NOTES†† - 12.2%
Federal Home Loan Bank1
0.08% due 04/01/16	$	25,000,000	25,000,000
0.36% due 06/01/16		2,000,000	1,998,950
Total Federal Home Loan Bank			26,998,950
Farmer Mac1
0.66% due 12/09/16		8,000,000	7,972,560
Total Federal Agency Discount Notes
(Cost $34,961,820)			34,971,510
FEDERAL AGENCY NOTES†† - 7.1%
Federal Home Loan Banks1
0.53% due 01/11/175		15,000,000	15,001,635
Federal Farm Credit Bank1
0.42% due 08/01/175		5,000,000	4,990,775
Total Federal Agency Notes
(Cost $20,000,000)			19,992,410
REPURCHASE AGREEMENTS††,2 - 12.4%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		21,752,596	21,752,596

HSBC Group issued 03/31/16 at 0.21% due 04/01/163	13,566,166		13,566,166
Total Repurchase Agreements
(Cost $35,318,762)			35,318,762
Total Investments - 99.0%
(Cost $223,082,619)		$	281,839,287
Other Assets & Liabilities, net - 1.0%			3,040,759
Total Net Assets - 100.0%		$	284,880,046

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $20,505,000)		200	$	274,328

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International April 2016 S&P 500 Index Swap 0.40%4, Terminating 04/26/16 (Notional Value $41,092,546)		19,950	$	456,547
Credit Suisse Capital, LLC April 2016 S&P 500 Index Swap 0.43%4, Terminating 04/26/16 (Notional Value $804,819)		391		9,119
Barclays Bank plc April 2016 S&P 500 Index Swap 0.40%4, Terminating 04/29/16 (Notional Value $31,391,509)		15,241		(34,021	)
(Total Notional Value $73,288,874)			$	431,645

*	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	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
4	Total Return based on S&P 500 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
5	Variable rate security. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

34 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P 500® FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	191,556,605	$	—	$	—	$	—	$	—	$	191,556,605
Equity Futures Contracts		—		274,328		—		—		—		274,328
Equity Index Swap Agreements		—		—		—		465,666		—		465,666
Federal Agency Discount Notes		—		—		34,971,510		—		—		34,971,510
Federal Agency Notes		—		—		19,992,410		—		—		19,992,410
Repurchase Agreements		—		—		35,318,762		—		—		35,318,762
Total	$	191,556,605	$	274,328	$	90,282,682	$	465,666	$	—	$	282,579,281

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	34,021	$	—	$	34,021

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 35

S&P 500^® FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $187,763,857)	$	246,520,525
Repurchase agreements, at value (cost $35,318,762)		35,318,762
Total investments (cost $223,082,619)		281,839,287
Segregated cash with broker		3,970,000
Unrealized appreciation on swap agreements		465,666
Cash		3,713
Receivables:
Fund shares sold		1,066,245
Dividends		215,111
Interest		3,840
Swap settlement		1,293
Securities sold		674
Foreign taxes reclaim		271
Total assets		287,566,100
Liabilities:
Unrealized depreciation on swap agreements		34,021
Payable for:
Fund shares redeemed		2,094,274
Management fees		148,539
Distribution and service fees		59,144
Transfer agent and administrative fees		49,513
Variation margin		47,000
Portfolio accounting fees		29,708
Miscellaneous		223,855
Total liabilities		2,686,054
Commitments and contingent liabilities (Note 13)		—
Net assets	$	284,880,046
Net assets consist of:
Paid in capital	$	250,563,858
Undistributed net investment income		—
Accumulated net realized loss on investments		(25,146,453	)
Net unrealized appreciation on investments		59,462,641
Net assets	$	284,880,046
A-Class:
Net assets	$	39,793,186
Capital shares outstanding		998,636
Net asset value per share	$	39.85
Maximum offering price per share (Net asset value divided by 95.25%)	$	41.84
C-Class:
Net assets	$	15,667,076
Capital shares outstanding		426,459
Net asset value per share	$	36.74
H-Class:
Net assets	$	229,419,784
Capital shares outstanding		5,758,157
Net asset value per share	$	39.84

36 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P 500^® FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $470)	$	4,000,384
Interest		81,612
Income from securities lending, net		2,340
Total investment income		4,084,336
Expenses:
Management fees		1,939,381
Transfer agent and administrative fees		646,461
Distribution and service fees:		—
A-Class		67,806
C-Class		187,350
H-Class		531,821
Portfolio accounting fees		387,880
Custodian fees		29,964
Trustees’ fees*		18,785
Line of credit fees		3,291
Miscellaneous		337,376
Total expenses		4,150,115
Net investment income		(65,779	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		27,939,193
Swap agreements		(5,019,243	)
Futures contracts		1,819,577
Net realized gain		24,739,527
Net change in unrealized appreciation (depreciation) on:
Investments		(39,521,270	)
Swap agreements		446,145
Futures contracts		232,754
Net change in unrealized appreciation (depreciation)		(38,842,371	)
Net realized and unrealized loss		(14,102,844	)
Net decrease in net assets resulting from operations	$	(14,168,623	)

* 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 ANNUAL REPORT | 37

S&P 500^® FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(65,779	)	$	261,293
Net realized gain on investments		24,739,527			7,172,036
Net change in unrealized appreciation (depreciation) on investments		(38,842,371	)		19,170,148
Net increase (decrease) in net assets resulting from operations		(14,168,623	)		26,603,477
Distributions to shareholders from:
Net investment income
A-Class		(6,128	)		(17,679	)
C-Class		(5,127	)		(8,817	)
H-Class		(73,343	)		(133,918	)
Net realized gains
A-Class		(964,527	)		(487,372	)
C-Class		(806,970	)		(243,055	)
H-Class		(11,544,030	)		(3,691,790	)
Total distributions to shareholders		(13,400,125	)		(4,582,631	)
Capital share transactions:
Proceeds from sale of shares
A-Class		164,205,961			119,690,602
C-Class		36,973,427			50,549,094
H-Class		1,458,575,350			1,614,367,735
Distributions reinvested
A-Class		885,581			468,300
C-Class		784,294			244,609
H-Class		11,569,754			3,424,733
Cost of shares redeemed
A-Class		(153,213,908	)		(121,906,600	)
C-Class		(41,974,574	)		(47,582,225	)
H-Class		(1,468,966,601	)		(1,637,788,549	)
Net increase (decrease) from capital share transactions		8,839,284			(18,532,301	)
Net increase (decrease) in net assets		(18,729,464	)		3,488,545
Net assets:
Beginning of year		303,609,510			300,120,965
End of year	$	284,880,046		$	303,609,510
Undistributed net investment income at end of year	$	—		$	84,598
Capital share activity:
Shares sold
A-Class		4,121,399			2,973,303
C-Class		995,592			1,356,402
H-Class		36,101,253			40,239,115
Shares issued from reinvestment of distributions
A-Class		22,217			11,383
C-Class		21,289			6,365
H-Class		290,260			83,226
Shares redeemed
A-Class		(3,821,927	)		(3,049,603	)
C-Class		(1,134,175	)		(1,274,767	)
H-Class		(36,783,666	)		(40,944,917	)
Net decrease in shares		(187,758	)		(599,493	)

38 | THE RYDEX FUNDS 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	41.40		$	37.78		$	31.55		$	28.20		$	26.41
Income (loss) from investment operations:
Net investment income (loss)a		.03			.04			.07			.06			.01
Net gain (loss) on investments (realized and unrealized)		—			4.08			6.20			3.36			1.78
Total from investment operations		.03			4.12			6.27			3.42			1.79
Less distributions from:
Net investment income		(.01	)		(.02	)		(.04	)		(.07	)		—
Net realized gains		(1.57	)		(.48	)		—			—			—
Total distributions		(1.58	)		(.50	)		(.04	)		(.07	)		—
Net asset value, end of period	$	39.85		$	41.40		$	37.78		$	31.55		$	28.20
Total Returnb		0.08	%		10.90	%		19.87	%		12.16	%		6.78	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	39,793		$	28,022		$	28,028		$	12,014		$	13,413
Ratios to average net assets:
Net investment income (loss)		0.02	%		0.11	%		0.19	%		0.22	%		0.05	%
Total expenses		1.55	%		1.59	%		1.57	%		1.50	%		1.51	%
Portfolio turnover rate		181	%		256	%		157	%		76	%		196	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	38.58		$	35.51		$	29.87		$	26.91		$	25.41
Income (loss) from investment operations:
Net investment income (loss)a		(.26	)		(.23	)		(.19	)		(.14	)		(.20	)
Net gain (loss) on investments (realized and unrealized)		—			3.80			5.87			3.17			1.70
Total from investment operations		(.26	)		3.57			5.68			3.03			1.50
Less distributions from:
Net investment income		(.01	)		(.02	)		(.04	)		(.07	)		—
Net realized gains		(1.57	)		(.48	)		—			—			—
Total distributions		(1.58	)		(.50	)		(.04	)		(.07	)		—
Net asset value, end of period	$	36.74		$	38.58		$	35.51		$	29.87		$	26.91
Total Returnb		(0.67	%)		10.04	%		19.01	%		11.29	%		5.90	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	15,667		$	20,977		$	16,182		$	10,231		$	10,110
Ratios to average net assets:
Net investment income (loss)		(0.70	%)		(0.62	%)		(0.59	%)		(0.52	%)		(0.80	%)
Total expenses		2.31	%		2.34	%		2.32	%		2.28	%		2.26	%
Portfolio turnover rate		181	%		256	%		157	%		76	%		196	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 39

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	41.40		$	37.78		$	31.55		$	28.20		$	26.39
Income (loss) from investment operations:
Net investment income (loss)a		.03			.05			.05			.07			(.02	)
Net gain (loss) on investments (realized and unrealized)		(.01	)		4.07			6.22			3.35			1.83
Total from investment operations		.02			4.12			6.27			3.42			1.81
Less distributions from:
Net investment income		(.01	)		(.02	)		(.04	)		(.07	)		—
Net realized gains		(1.57	)		(.48	)		—			—			—
Total distributions		(1.58	)		(.50	)		(.04	)		(.07	)		—
Net asset value, end of period	$	39.84		$	41.40		$	37.78		$	31.55		$	28.20
Total Returnb		0.06	%		10.90	%		19.87	%		12.16	%		6.86	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	229,420		$	254,610		$	255,912		$	265,358		$	240,847
Ratios to average net assets:
Net investment income (loss)		0.07	%		0.12	%		0.15	%		0.24	%		(0.07	%)
Total expenses		1.55	%		1.58	%		1.56	%		1.50	%		1.50	%
Portfolio turnover rate		181	%		256	%		157	%		76	%		196	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

40 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Inverse S&P 500^® Strategy Fund maintained a daily correlation of over 99% to its benchmark of -100% of the daily price movement of the S&P 500 Index. Inverse S&P 500^® Strategy Fund Investor Class returned -5.07%, while the S&P 500 Index returned 1.78% over the same period.

Sectors contributing the most to the performance of the underlying index were Information Technology and Consumer Staples. The sector detracting the most was Energy, followed by Health Care.

Microsoft Corp., General Electric Co., and Amazon.com, Inc. were the holdings contributing the most to the performance of the underlying index for the period. Apple, Inc., Biogen, Inc., and Kinder Morgan, Inc. — Class P detracted the most from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

THE RYDEX FUNDS ANNUAL REPORT | 41

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
Investor Class	January 7, 1994
A-Class	March 31, 2004
C-Class	March 15, 2001
H-Class	September 18, 2014

The Fund invests principally in derivative investments such as swap agreements and futures contracts.

Largest Holding	(% of Total Net Assets)
Guggenheim Strategy Fund I	31.8%
“Largest Holding” excludes any temporary cash or derivative investments.

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-5.07%	-13.44%	-9.33%
A-Class Shares	-5.30%	-13.66%	-9.56%
A-Class Shares with sales charge†	-9.81%	-14.50%	-10.00%
C-Class Shares	-6.05%	-14.30%	-10.25%
C-Class Shares with CDSC‡	-6.99%	-14.30%	-10.25%
S&P 500 Index	1.78%	11.58%	7.01%
		1 Year	Since Inception (09/18/14)
H-Class Shares		-5.37%	-6.91%
S&P 500 Index		1.78%	3.73%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

42 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE S&P 500® STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 31.8%
Guggenheim Strategy Fund I1		2,301,651	$	57,103,957
Total Mutual Funds
(Cost $57,222,670)				57,103,957

	Face Amount
FEDERAL AGENCY NOTES†† - 32.1%
Federal Farm Credit Bank2
0.47% due 12/08/177	$	13,600,000	13,571,915
0.43% due 12/15/167		12,000,000	11,995,728
0.52% due 12/28/167		10,000,000	9,996,560
0.42% due 08/01/177		5,000,000	4,990,775
Total Federal Farm Credit Bank			40,554,978
Federal Home Loan Bank2
0.62% due 11/23/16		10,000,000	10,004,700
Fannie Mae3
0.44% due 09/08/17		7,000,000	6,982,990
Total Federal Agency Notes
(Cost $57,581,717)			57,542,668
FEDERAL AGENCY DISCOUNT NOTES†† - 11.9%
Federal Home Loan Bank2
0.35% due 05/06/16		10,000,000	9,997,470
0.40% due 07/15/16		3,200,000	3,196,640
0.34% due 04/15/16		100,000	99,992
Total Federal Home Loan Bank			13,294,102
Farmer Mac2
0.66% due 12/09/16		8,000,000	7,972,560
Total Federal Agency Discount Notes
(Cost $21,255,853)			21,266,662
REPURCHASE AGREEMENTS††,4 - 19.4%
HSBC Group issued 03/31/16 at 0.21% due 04/01/165		20,635,734	20,635,734

Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	14,238,042		14,238,042
Total Repurchase Agreements
(Cost $34,873,776)			34,873,776
Total Investments - 95.2%
(Cost $170,934,016)		$	170,787,063
Other Assets & Liabilities, net - 4.8%			8,575,450
Total Net Assets - 100.0%		$	179,362,513

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2016 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $512,625)		5	$	1,338

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Credit Suisse Capital, LLC April 2016 S&P 500 Index Swap 0.43%6, Terminating 04/26/16 (Notional Value $1,113,671)		541	$	(12,740	)
Barclays Bank plc April 2016 S&P 500 Index Swap 0.40%6, Terminating 04/29/16 (Notional Value $90,845,073)		44,105		(183,472	)
Goldman Sachs International April 2016 S&P 500 Index Swap 0.40%6, Terminating 04/26/16 (Notional Value $86,805,072)		42,144		(982,926	)
(Total Notional Value $178,763,816)			$	(1,179,138	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm.
4	Repurchase Agreements — See Note 5.
5	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
6	Total Return based on S&P 500 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 1016.
7	Variable rate security. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 43

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INVERSE S&P 500® STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	1,338	$	—	$	—	$	—	$	1,338
Federal Agency Discount Notes		—		—		21,266,662		—		—		21,266,662
Federal Agency Notes		—		—		57,542,668		—		—		57,542,668
Mutual Funds		57,103,957		—		—		—		—		57,103,957
Repurchase Agreements		—		—		34,873,776		—		—		34,873,776
Total	$	57,103,957	$	1,338	$	113,683,106	$	—	$	—	$	170,788,401

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements		—		—		—		1,179,138		—	$	1,179,138

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

44 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE S&P 500^® STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $78,837,570)	$	78,809,330
Investments in affiliated issuers, at value (cost $57,222,670)		57,103,957
Repurchase agreements, at value (cost $34,873,776)		34,873,776
Total investments (cost $170,934,016)		170,787,063
Segregated cash with broker		8,585,000
Receivables:
Securities sold		3,000,000
Fund shares sold		387,974
Dividends		89,363
Interest		33,819
Variation margin		4,298
Total assets		182,887,517
Liabilities:
Unrealized depreciation on swap agreements		1,179,138
Payable for:
Fund shares redeemed		1,766,124
Swap settlement		207,480
Management fees		145,539
Securities purchased		89,363
Transfer agent and administrative fees		40,427
Portfolio accounting fees		16,171
Distribution and service fees		11,238
Miscellaneous		69,524
Total liabilities		3,525,004
Commitments and contingent liabilities (Note 13)		—
Net assets	$	179,362,513
Net assets consist of:
Paid in capital	$	518,145,546
Accumulated net investment loss		(350,707	)
Accumulated net realized loss on investments		(337,107,573	)
Net unrealized depreciation on investments		(1,324,753	)
Net assets	$	179,362,513
Investor Class:
Net assets	$	153,543,936
Capital shares outstanding		11,087,794
Net asset value per share	$	13.85
A-Class:
Net assets	$	9,255,577
Capital shares outstanding		719,211
Net asset value per share	$	12.87
Maximum offering price per share (Net asset value divided by 95.25%)	$	13.51
C-Class:
Net assets	$	9,244,354
Capital shares outstanding		783,517
Net asset value per share	$	11.80
H-Class:
Net assets	$	7,318,646
Capital shares outstanding		569,019
Net asset value per share	$	12.86

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 45

INVERSE S&P 500^® STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	471,886
Interest		179,373
Total investment income		651,259
Expenses:
Management fees		1,174,542
Transfer agent and administrative fees		326,261
Distribution and service fees:
Advisor Class		4,862
A-Class		20,626
C-Class		65,056
H-Class		14,840
Portfolio accounting fees		130,503
Custodian fees		15,259
Trustees’ fees*		7,802
Line of credit fees		2,325
Miscellaneous		178,650
Total expenses		1,940,726
Net investment loss		(1,289,467	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		27,688
Investments in affiliated issuers		(81,026	)
Swap agreements		(15,465,987	)
Futures contracts		(1,069,710	)
Net realized loss		(16,589,035	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(36,983	)
Investments in affiliated issuers		(118,713	)
Swap agreements		(738,589	)
Futures contracts		(122,206	)
Net change in unrealized appreciation (depreciation)		(1,016,491	)
Net realized and unrealized loss		(17,605,526	)
Net decrease in net assets resulting from operations	$	(18,894,993	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

46 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE S&P 500^® STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(1,289,467	)	$	(1,035,920	)
Net realized loss on investments		(16,589,035	)		(16,469,720	)
Net change in unrealized appreciation (depreciation) on investments		(1,016,491	)		345,985
Net decrease in net assets resulting from operations		(18,894,993	)		(17,159,655	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		437,076,905			189,117,714
Advisor Class**		17,264,802			77,331,876
A-Class		56,820,759			20,249,187
C-Class		16,209,864			8,073,633
H-Class**		93,034,530			17,542,838	*
Cost of shares redeemed
Investor Class		(328,788,115	)		(194,157,539	)
Advisor Class**		(8,791,665	)		76,596,721	)
A-Class		(51,421,612	)		(19,772,383	)
C-Class		(11,608,019	)		(8,221,994	)
H-Class**		(107,318,749	)		(4,506,875	)*
Conversion activity**
Advisor Class		(10,823,213	)		—
H-Class		10,823,213			—
Net increase from capital share transactions		112,478,700			9,059,736
Net increase (decrease) in net assets		93,583,707			(8,099,919	)
Net assets:
Beginning of year		85,778,806			93,878,725
End of year	$	179,362,513		$	85,778,806
Accumulated net investment loss at end of year	$	(350,707	)	$	—
Capital share activity:
Shares sold
Investor Class		29,363,530			12,003,414
Advisor Class**		1,268,355			5,473,674
A-Class		4,113,569			1,363,582
C-Class		1,305,730			595,844
H-Class**		6,805,860			1,281,317	*
Shares redeemed
Investor Class		(22,439,292	)		(12,547,719	)
Advisor Class**		(644,721	)		(5,517,118	)
A-Class		(3,744,503	)		(1,361,454	)
C-Class		(930,093	)		(610,462	)
H-Class**		(7,960,487	)		(318,496	)*
Conversion activity**
Advisor Class		(779,448	)		—
H-Class		760,825			—
Net increase in shares		7,119,325			362,582

*	Since the commencement of operations: September 8, 2014.
**	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 47

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	14.59		$	16.82		$	21.03		$	24.61		$	28.50
Income (loss) from investment operations:
Net investment income (loss)a		(.13	)		(.17	)		(.25	)		(.30	)		(.38	)
Net gain (loss) on investments (realized and unrealized)		(.61	)		(2.06	)		(3.96	)		(3.28	)		(3.51	)
Total from investment operations		(.74	)		(2.23	)		(4.21	)		(3.58	)		(3.89	)
Net asset value, end of period	$	13.85		$	14.59		$	16.82		$	21.03		$	24.61
Total Returnb		(5.07	%)		(13.26	%)		(20.02	%)		(14.55	%)		(13.65	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	153,544		$	60,745		$	79,172		$	106,158		$	112,334
Ratios to average net assets:
Net investment income (loss)		(0.91	%)		(1.07	%)		(1.35	%)		(1.27	%)		(1.31	%)
Total expensesc		1.41	%		1.41	%		1.42	%		1.41	%		1.41	%
Portfolio turnover rate		63	%		103	%		—			—			—

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	13.59		$	15.71		$	19.69		$	23.10		$	26.82
Income (loss) from investment operations:
Net investment income (loss)a		(.16	)		(.19	)		(.28	)		(.34	)		(.42	)
Net gain (loss) on investments (realized and unrealized)		(.56	)		(1.93	)		(3.70	)		(3.07	)		(3.30	)
Total from investment operations		(.72	)		(2.12	)		(3.98	)		(3.41	)		(3.72	)
Net asset value, end of period	$	12.87		$	13.59		$	15.71		$	19.69		$	23.10
Total Returnb		(5.30	%)		(13.49	%)		(20.21	%)		(14.76	%)		(13.87	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,256		$	4,758		$	5,468		$	5,912		$	7,915
Ratios to average net assets:
Net investment income (loss)		(1.18	%)		(1.32	%)		(1.58	%)		(1.52	%)		(1.56	%)
Total expensesc		1.66	%		1.66	%		1.68	%		1.65	%		1.66	%
Portfolio turnover rate		63	%		103	%		—			—			—

48 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	12.56		$	14.62		$	18.46		$	21.83		$	25.53
Income (loss) from investment operations:
Net investment income (loss)a		(.24	)		(.28	)		(.38	)		(.48	)		(.59	)
Net gain (loss) on investments (realized and unrealized)		(.52	)		(1.78	)		(3.46	)		(2.89	)		(3.11	)
Total from investment operations		(.76	)		(2.06	)		(3.84	)		(3.37	)		(3.70	)
Net asset value, end of period	$	11.80		$	12.56		$	14.62		$	18.46		$	21.83
Total Returnb		(6.05	%)		(14.09	%)		(20.80	%)		(15.44	%)		(14.49	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,244		$	5,121		$	6,177		$	7,041		$	7,870
Ratios to average net assets:
Net investment income (loss)		(1.93	%)		(2.07	%)		(2.34	%)		(2.27	%)		(2.31	%)
Total expensesc		2.41	%		2.41	%		2.42	%		2.40	%		2.42	%
Portfolio turnover rate		63	%		103	%		—			—			—

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	13.59		$	14.35
Income (loss) from investment operations:
Net investment income (loss)a		(.15	)		(.09	)
Net gain (loss) on investments (realized and unrealized)		(.58	)		(.67	)
Total from investment operations		(.73	)		(.76	)
Net asset value, end of period	$	12.86		$	13.59
Total Returnb		(5.37	%)		(5.30	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,319		$	13,085
Ratios to average net assets:
Net investment income (loss)		(1.08	%)		(1.27	%)
Total expensesc		1.67	%		1.60	%
Portfolio turnover rate		63	%		103	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: September 18, 2014. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. The portfolio turnover rate stated is for the entire period of the Fund, not since the commencement of operations of the Class.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 49

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

MONTHLY REBALANCE NASDAQ-100^® 2x STRATEGY FUND

OBJECTIVE: Seeks to provide investment results that match, before fees and expenses, the performance of a specific benchmark on a calendar month basis. The Fund’s current benchmark is 200% 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 different than a full calendar month.

For the one-year period ended March 31, 2016, the Monthly Rebalance NASDAQ-100^® 2x Strategy Fund H-Class returned 8.18%, while the NASDAQ-100 Index returned 4.74% over the same period.

The Information Technology sector contributed the most to the performance of the underlying index, followed by the Consumer Discretionary sector. Health Care was the sector that detracted the most from performance, followed by the Industrials sector.

Microsoft Corp., Amazon.com, Inc., and Facebook, Inc. — Class A were the holdings contributing the most to the performance of the underlying index for the year. Apple, Inc., Biogen, Inc., and Express Scripts Holding Co. detracted the most from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

50 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
A-Class	November 28, 2014
C-Class	November 28, 2014
H-Class	November 28, 2014

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	14.1%
Apple, Inc.	8.0%
Microsoft Corp.	5.8%
Amazon.com, Inc.	3.7%
Facebook, Inc. — Class A	3.5%
Alphabet, Inc. — Class C	3.4%
Alphabet, Inc. — Class A	3.0%
Intel Corp.	2.0%
Comcast Corp. — Class A	2.0%
Cisco Systems, Inc.	1.9%
Top Ten Total	47.4%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	Since Inception (11/28/14)
A-Class Shares	5.38%	6.60%
A-Class Shares with sales charge†	0.37%	2.79%
C-Class Shares	4.40%	5.66%
C-Class Shares with CDSC‡	3.40%	5.66%
H-Class Shares	8.18%	8.54%
NASDAQ-100 Index	4.74%	3.72%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The NASDAQ-100 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 51

SCHEDULE OF INVESTMENTS	March 31, 2016
MONTHLY REBALANCE NASDAQ-100® 2x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 68.6%
Technology - 24.7%
Apple, Inc.		3,315	$	361,303
Microsoft Corp.		4,729		261,182
Intel Corp.		2,824		91,356
QUALCOMM, Inc.		894		45,720
Texas Instruments, Inc.		601		34,509
Adobe Systems, Inc.*		298		27,952
Broadcom Ltd.		165		25,493
Cognizant Technology Solutions Corp. — Class A*		364		22,823
NXP Semiconductor N.V.*		207		16,781
Intuit, Inc.		154		16,018
Activision Blizzard, Inc.		439		14,856
Applied Materials, Inc.		676		14,318
Fiserv, Inc.*		133		13,643
Electronic Arts, Inc.*		185		12,230
Paychex, Inc.		216		11,666
NVIDIA Corp.		322		11,473
Analog Devices, Inc.		185		10,950
Cerner Corp.*		203		10,751
Check Point Software Technologies Ltd.*		108		9,447
Skyworks Solutions, Inc.		115		8,958
Lam Research Corp.		95		7,847
Autodesk, Inc.*		134		7,814
CA, Inc.		249		7,667
Xilinx, Inc.		153		7,257
Citrix Systems, Inc.*		92		7,229
Western Digital Corp.		139		6,566
Micron Technology, Inc.*		620		6,491
NetEase, Inc. ADR		45		6,461
Linear Technology Corp.		143		6,372
Maxim Integrated Products, Inc.		171		6,289
Seagate Technology plc		177		6,098
Akamai Technologies, Inc.*		105		5,835
NetApp, Inc.		174		4,748
Total Technology				1,108,103
Communications - 24.4%
Amazon.com, Inc.*		281		166,814
Facebook, Inc. — Class A*		1,373		156,659
Alphabet, Inc. — Class C*		207		154,205
Alphabet, Inc. — Class A*		175		133,508
Comcast Corp. — Class A		1,455		88,871
Cisco Systems, Inc.		3,009		85,666
Priceline Group, Inc.*		29		37,379
Baidu, Inc. ADR*		162		30,923
Netflix, Inc.*		256		26,171
Yahoo!, Inc.*		566		20,834
T-Mobile US, Inc.*		489		18,728
Twenty-First Century Fox, Inc. — Class A		669		18,651
eBay, Inc.*		704		16,797
JD.com, Inc. ADR*		522		13,833
Charter Communications, Inc. — Class A*		67		13,563
Twenty-First Century Fox, Inc. — Class B		478		13,480
Liberty Global plc*		347		13,033
Sirius XM Holdings, Inc.*		3,047		12,036
Ctrip.com International Ltd. ADR*		206		9,118
Expedia, Inc.		82		8,841
Viacom, Inc. — Class B		207		8,545
Vodafone Group plc ADR		231		7,404
Symantec Corp.		390		7,168
DISH Network Corp. — Class A*		134		6,199
Liberty Global plc — Class A*		151		5,814
TripAdvisor, Inc.*		79		5,254
Liberty Media Corp. — Class C*		133		5,066
Discovery Communications, Inc. — Class C*		151		4,077
Liberty Ventures*		81		3,169
Discovery Communications, Inc. — Class A*		90		2,577
Liberty Media Corp. — Class A*		61		2,356
Total Communications				1,096,739
Consumer, Non-cyclical - 12.3%
Gilead Sciences, Inc.		817		75,049
Amgen, Inc.		450		67,468
Kraft Heinz Co.		726		57,035
Celgene Corp.*		467		46,741
Mondelez International, Inc. — Class A		938		37,633
Biogen, Inc.*		130		33,842
PayPal Holdings, Inc.*		731		28,217
Express Scripts Holding Co.*		399		27,407
Automatic Data Processing, Inc.		274		24,581
Regeneron Pharmaceuticals, Inc.*		62		22,347
Alexion Pharmaceuticals, Inc.*		134		18,655
Monster Beverage Corp.*		121		16,139
Illumina, Inc.*		88		14,266
Mylan N.V.*		293		13,581
Intuitive Surgical, Inc.*		22		13,223
Vertex Pharmaceuticals, Inc.*		147		11,685
Henry Schein, Inc.*		49		8,459
Incyte Corp.*		112		8,117
BioMarin Pharmaceutical, Inc.*		97		8,001
Verisk Analytics, Inc. — Class A*		100		7,992
Whole Foods Market, Inc.		194		6,035
Endo International plc*		133		3,744
Total Consumer, Non-cyclical				550,217
Consumer, Cyclical - 6.6%
Walgreens Boots Alliance, Inc.		645		54,334
Starbucks Corp.		884		52,775
Costco Wholesale Corp.		262		41,286
Tesla Motors, Inc.*		79		18,152
O’Reilly Automotive, Inc.*		58		15,872
American Airlines Group, Inc.		361		14,805
Ross Stores, Inc.		242		14,012
Dollar Tree, Inc.*		140		11,544
PACCAR, Inc.		210		11,485

52 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
MONTHLY REBALANCE NASDAQ-100® 2x STRATEGY FUND

	Shares		Value
Marriott International, Inc. — Class A		151	$	10,748
Fastenal Co.		173		8,477
Norwegian Cruise Line Holdings Ltd.*		136		7,519
Ulta Salon Cosmetics & Fragrance, Inc.*		38		7,362
Tractor Supply Co.		80		7,237
Liberty Interactive Corporation QVC Group — Class A*		274		6,919
Mattel, Inc.		203		6,825
Bed Bath & Beyond, Inc.*		97		4,815
Total Consumer, Cyclical				294,167
Industrial - 0.6%
CSX Corp.		576		14,831
SBA Communications Corp. — Class A*		75		7,513
Stericycle, Inc.*		51		6,436
Total Industrial				28,780
Total Common Stocks
(Cost $2,966,764)				3,078,006
MUTUAL FUNDS† - 14.1%
Guggenheim Strategy Fund I1		25,535		633,522
Total Mutual Funds
(Cost $634,344)				633,522

	Face Amount
REPURCHASE AGREEMENTS††,2 - 54.0%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	1,749,149		1,749,149
HSBC Group issued 03/31/16 at 0.21% due 04/01/163		675,633		675,633
Total Repurchase Agreements
(Cost $2,424,782)				2,424,782
Total Investments - 136.7%
(Cost $6,025,890)			$	6,136,310
Other Assets & Liabilities, net - (36.7)%				(1,647,394	)
Total Net Assets - 100.0%			$	4,488,916

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 NASDAQ-100 Index Mini Futures Contracts (Aggregate Value of Contracts $626,535)		7	$	23,360

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Barclays Bank plc April 2016 NASDAQ-100 Index Swap 0.40%4, Terminating 04/29/16 (Notional Value $4,560,937)		1,017	$	16,119
Goldman Sachs International April 2016 NASDAQ-100 Index Swap 0.40%4, Terminating 04/26/16 (Notional Value $742,982)		166		13,409
(Total Notional Value $5,303,919)			$	29,528

*	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	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
4	Total Return based on NASDAQ-100 Index +/- financing at a variable date. Rate indicated is rate effective at March 31, 2016
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 53

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
MONTHLY REBALANCE NASDAQ-100® 2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	3,078,006	$	—	$	—	$	—	$	—	$	3,078,006
Equity Futures Contracts		—		23,360		—		—		—		23,360
Equity Index Swap Agreements		—		—		—		29,528		—		29,528
Mutual Funds		633,522		—		—		—		—		633,522
Repurchase Agreements		—		—		2,424,782		—		—		2,424,782
Total	$	3,711,529	$	23,360	$	2,424,782	$	29,528	$	—	$	6,189,198

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

54 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

MONTHLY REBALANCE NASDAQ-100^® 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $2,966,764)	$	3,078,006
Investments in affiliated issuers, at value (cost $634,344)		633,522
Repurchase agreements, at value (cost $2,424,782)		2,424,782
Total investments (cost $6,025,890)		6,136,310
Segregated cash with broker		388,400
Unrealized appreciation on swap agreements		29,528
Cash		29
Receivables:
Fund shares sold		10,748
Swap settlement		4,976
Dividends		1,274
Investment adviser		1,111
Foreign taxes reclaim		672
Interest		15
Total assets		6,573,063
Liabilities:
Payable for:
Securities purchased		1,997,741
Management fees		2,724
Variation margin		945
Distribution and service fees		771
Transfer agent and administrative fees		757
Portfolio accounting fees		303
Miscellaneous		80,906
Total liabilities		2,084,147
Commitments and contingent liabilities (Note 13)		—
Net assets	$	4,488,916
Net assets consist of:
Paid in capital	$	101,098,726
Undistributed net investment income		—
Accumulated net realized loss on investments		(96,773,118	)
Net unrealized appreciation on investments		163,308
Net assets	$	4,488,916
A-Class:
Net assets	$	246,136
Capital shares outstanding		4,520
Net asset value per share	$	54.45
Maximum offering price per share (Net asset value divided by 95.25%)	$	57.18
C-Class:
Net assets	$	22,867
Capital shares outstanding		425
Net asset value per share	$	53.80
H-Class:
Net assets	$	4,219,913
Capital shares outstanding		75,638
Net asset value per share	$	55.79

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 55

MONTHLY REBALANCE NASDAQ-100^® 2x STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers	$	1,294,422
Dividends from securities of affiliated issuers		180,227
Interest		4,057
Total investment income		1,478,706
Expenses:
Management fees		1,270,257
Transfer agent and administrative fees		352,849
Distribution and service fees:
A-Class		2,535
C-Class		279
H-Class		350,244
Portfolio accounting fees		131,975
Custodian fees		16,385
Trustees’ fees*		9,221
Line of credit fees		1,122
Miscellaneous		212,612
Total expenses		2,347,479
Less:
Expenses waived by Adviser		(441,696	)
Net expenses		1,905,783
Net investment loss		(427,077	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(27,548,357	)
Investments in affiliated issuers		55,859
Swap agreements		(39,747,626	)
Futures contracts		(12,291,243	)
Net realized loss		(79,531,367	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		2,930,316
Investments in affiliated issuers		(822	)
Swap agreements		(124,275	)
Futures contracts		(369,302	)
Net change in unrealized appreciation (depreciation)		2,435,917
Net realized and unrealized loss		(77,095,450	)
Net decrease in net assets resulting from operations	$	(77,522,527	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

56 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

MONTHLY REBALANCE NASDAQ-100^® 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Period Ended March 31, 2015a
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(427,077	)	$	(340,343	)
Net realized loss on investments		(79,531,367	)		(17,241,751	)
Net change in unrealized appreciation (depreciation) on investments		2,435,917			(2,272,609	)
Net decrease in net assets resulting from operations		(77,522,527	)		(19,854,703	)
Capital share transactions:
Proceeds from sale of shares
A-Class		4,791,065			485,374
C-Class		60,141			14,050
H-Class		722,965,697			541,099,792
Cost of shares redeemed
A-Class		(4,159,012	)		(11,481	)
C-Class		(44,714	)		(50	)
H-Class		(984,738,898	)		(178,595,818	)
Net increase (decrease) from capital share transactions		(261,125,721	)		362,991,867
Net increase (decrease) in net assets		(338,648,248	)		343,137,164
Net assets:
Beginning of period		343,137,164			—
End of period	$	4,488,916		$	343,137,164
Undistributed net investment income at end of period	$	—		$	—
Capital share activity:
Shares sold
A-Class		82,637			9,226
C-Class		1,072			274
H-Class		12,184,515			10,481,242
Shares redeemed
A-Class		(87,115	)		(228	)
C-Class		(920	)		(1	)
H-Class		(18,752,891	)		(3,837,228	)
Net increase (decrease) in shares		(6,572,702	)		6,653,285

^a Since commencement of operations: November 28, 2014.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 57

MONTHLY REBALANCE NASDAQ-100^® 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.

A-Class	Year Ended March 31, 2016			Period Ended March 31, 2015a
Per Share Data
Net asset value, beginning of period	$	51.68		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.27	)		(.07	)
Net gain (loss) on investments (realized and unrealized)		3.04			1.75
Total from investment operations		2.77			1.68
Net asset value, end of period	$	54.45		$	51.68
Total Returne		5.38	%		3.36	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	246		$	465
Ratios to average net assets:
Net investment income (loss)		(0.48	%)		(0.39	%)
Total expensesc		1.70	%		1.63	%
Net expensesd,f		1.37	%		1.35	%
Portfolio turnover rate		551	%		84	%

C-Class	Year Ended March 31, 2016			Period Ended March 31, 2015a
Per Share Data
Net asset value, beginning of period	$	51.55		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.56	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		2.81			1.74
Total from investment operations		2.25			1.55
Net asset value, end of period	$	53.80		$	51.55
Total Returne		4.40	%		3.10	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	23		$	14
Ratios to average net assets:
Net investment income (loss)		(1.04	%)		(1.13	%)
Total expensesc		2.51	%		2.43	%
Net expensesd,f		2.17	%		2.13	%
Portfolio turnover rate		551	%		84	%

58 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

MONTHLY REBALANCE NASDAQ-100^® 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.

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015a
Per Share Data
Net asset value, beginning of period	$	51.57		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.17	)		(.10	)
Net gain (loss) on investments (realized and unrealized)		4.39			1.67
Total from investment operations		4.22			1.57
Net asset value, end of period	$	55.79		$	51.57
Total Returne		8.18	%		3.14	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,220		$	342,658
Ratios to average net assets:
Net investment income (loss)		(0.30	%)		(0.60	%)
Total expensesc		1.67	%		1.64	%
Net expensesd,f		1.35	%		1.35	%
Portfolio turnover rate		551	%		84	%

a	Since commencement of operations: November 28, 2014. 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	Does not include expenses of the underlying funds in which the Fund invests.
d	Net expense information reflects the expense ratios after expense waivers.
e	Total return does not reflect the impact of any applicable sales charge and has not been annualized.
f	Net expenses may include expenses that are excluded from the expense limitation agreement. Excluding these expenses, the operating expense ratios for the periods ended would be:

	03/31/16	03/31/15
A-Class	1.35%	1.35%
C-Class	2.10%	2.10%
H-Class	1.35%	1.35%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 59

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, with the NASDAQ-100 Index returning 4.74%, the Inverse NASDAQ-100^® Fund Investor Class returned -8.61%. For the one-year period ended March 31, 2016, Inverse NASDAQ-100^® Fund maintained a daily correlation of over 99% to its benchmark of -100% of the daily price movement of the NASDAQ-100 Index.

The Information Technology sector contributed the most to the performance of the underlying index, followed by the Consumer Discretionary sector. Health Care was the sector that detracted the most from performance, followed by the Industrials sector.

Microsoft Corp., Amazon.com, Inc., and Facebook, Inc. — Class A were the holdings contributing the most to the performance of the underlying index for the year. Apple, Inc., Biogen, Inc., and Express Scripts Holding Co. detracted the most from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

60 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
Investor Class	September 3, 1998
A-Class	March 31, 2004
C-Class	March 7, 2001
H-Class	September 18, 2014

The Fund invests principally in derivative investments such as swap agreements and futures contracts.

Cumulative Fund Performance*

 

Largest Holding (% of Total Net Assets)
Guggenheim Strategy Fund I	8.7%
“Largest Holding” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-8.61%	-16.56%	-13.35%
A-Class Shares	-7.63%	-16.62%	-13.48%
A-Class Shares with sales charge†	-12.02%	-17.42%	-13.90%
C-Class Shares	-9.43%	-17.45%	-14.24%
C-Class Shares with CDSC‡	-10.34%	-17.45%	-14.24%
NASDAQ-100 Index	4.74%	15.34%	11.19%
		1 Year	Since Inception (09/18/14)
H-Class Shares		-8.80%	-10.51%
NASDAQ-100 Index		4.74%	7.26%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The NASDAQ-100 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 61

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE NASDAQ-100® STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 8.6%
Guggenheim Strategy Fund I1		239,435	$	5,940,393
Total Mutual Funds
(Cost $5,937,978)				5,940,393

	Face Amount
FEDERAL AGENCY DISCOUNT NOTES†† - 43.8%
Federal Home Loan Bank2
0.08% due 04/01/16	$	30,000,000		30,000,000
Total Federal Agency Discount Notes
(Cost $30,000,000)				30,000,000
FEDERAL AGENCY NOTES†† - 5.1%
Federal Farm Credit Bank2
0.42% due 08/01/176		2,000,000		1,996,310
0.47% due 12/08/176		1,500,000		1,496,903
Total Federal Farm Credit Bank				3,493,213
Total Federal Agency Notes
(Cost $3,498,858)				3,493,213
REPURCHASE AGREEMENTS††,3 - 41.8%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		14,502,101		14,502,101
HSBC Group issued 03/31/16 at 0.21% due 04/01/164		14,106,668		14,106,668
Total Repurchase Agreements
(Cost $28,608,769)				28,608,769
Total Investments - 99.3%
(Cost $68,045,605)			$	68,042,375
Other Assets & Liabilities, net - 0.7%				470,942
Total Net Assets - 100.0%			$	68,513,317

	Contracts		Unrealized Loss
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2016 NASDAQ-100 Index Mini Futures Contracts (Aggregate Value of Contracts $9,756,045)		109	$	(247,336	)

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Barclays Bank plc April 2016 NASDAQ-100 Index Swap 0.40%5, Terminating 04/29/16 (Notional Value $2,993,894)		668	$	(7,094	)
Credit Suisse Capital, LLC April 2016 NASDAQ-100 Index Swap 0.43%5, Terminating 04/26/16 (Notional Value $1,967,893)		439		(35,691	)
Goldman Sachs International April 2016 NASDAQ-100 Index Swap 0.40%5, Terminating 04/26/16 (Notional Value $53,823,660)		12,004		(1,028,621	)
(Total Notional Value $58,785,447)			$	(1,071,406	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	Repurchase Agreements — See Note 5.
4	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
5	Total Return based on NASDAQ-100 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
6	Variable rate security. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

62 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INVERSE NASDAQ-100® STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Federal Agency Discount Notes	$	—	$	—	$	30,000,000	$	—	$	—	$	30,000,000
Federal Agency Notes		—		—		3,493,213		—		—		3,493,213
Mutual Funds		5,940,393		—		—		—		—		5,940,393
Repurchase Agreements		—		—		28,608,769		—		—		28,608,769
Total	$	5,940,393	$	—	$	62,101,982	$	—	$	—	$	68,042,375

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	247,336	$	—	$	—	$	—	$	247,336
Equity Index Swap Agreements		—		—		—		1,071,406		—		1,071,406
Total	$	—	$	247,336	$	—	$	1,071,406	$	—	$	1,318,742

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 63

INVERSE NASDAQ-100^® STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $33,498,858)	$	33,493,213
Investments in affiliated issuers, at value (cost $5,937,978)		5,940,393
Repurchase agreements, at value (cost $28,608,769)		28,608,769
Total investments (cost $68,045,605)		68,042,375
Segregated cash with broker		873,200
Receivables:
Fund shares sold		864,974
Variation margin		14,715
Dividends		10,548
Interest		1,386
Total assets		69,807,198
Liabilities:
Unrealized depreciation on swap agreements		1,071,406
Payable for:
Fund shares redeemed		122,991
Swap settlement		29,156
Management fees		21,425
Securities purchased		10,548
Transfer agent and administrative fees		5,951
Distribution and service fees		3,511
Portfolio accounting fees		2,381
Miscellaneous		26,512
Total liabilities		1,293,881
Commitments and contingent liabilities (Note 13)		—
Net assets	$	68,513,317
Net assets consist of:
Paid in capital	$	117,132,744
Accumulated net investment loss		(134,758	)
Accumulated net realized loss on investments		(47,162,697	)
Net unrealized depreciation on investments		(1,321,972	)
Net assets	$	68,513,317
Investor Class:
Net assets	$	11,857,200
Capital shares outstanding		491,908
Net asset value per share	$	24.10
A-Class:
Net assets	$	54,947,629
Capital shares outstanding		2,337,995
Net asset value per share	$	23.50
Maximum offering price per share (Net asset value divided by 95.25%)	$	24.67
C-Class:
Net assets	$	1,456,556
Capital shares outstanding		71,231
Net asset value per share	$	20.45
H-Class:
Net assets	$	251,932
Capital shares outstanding		10,857
Net asset value per share	$	23.20

64 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE NASDAQ-100^® STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	99,683
Interest		32,235
Total investment income		131,918
Expenses:
Management fees		312,302
Transfer agent and administrative fees		86,751
Distribution and service fees:
Advisor Class		610
A-Class		38,340
C-Class		14,877
H-Class		10,964
Portfolio accounting fees		34,700
Custodian fees		4,080
Trustees’ fees*		1,960
Line of credit fees		10
Miscellaneous		59,830
Total expenses		564,424
Net investment loss		(432,506	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in affiliated issuers		(85,669	)
Swap agreements		(3,710,668	)
Futures contracts		3,842
Net realized loss		(3,792,495	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(5,877	)
Investments in affiliated issuers		2,415
Swap agreements		(1,044,013	)
Futures contracts		(251,826	)
Net change in unrealized appreciation (depreciation)		(1,299,301	)
Net realized and unrealized loss		(5,091,796	)
Net decrease in net assets resulting from operations	$	(5,524,302	)

* 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 ANNUAL REPORT | 65

INVERSE NASDAQ-100^® STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(432,506	)	$	(146,491	)
Net realized loss on investments		(3,792,495	)		(2,818,916	)
Net change in unrealized appreciation (depreciation) on investments		(1,299,301	)		(42,996	)
Net decrease in net assets resulting from operations		(5,524,302	)		(3,008,403	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		259,319,436			125,263,815
Advisor Class**		20,257,419			22,352,580
A-Class		751,596,238			10,300,215
C-Class		6,855,284			6,446,046
H-Class**		298,858,706			700,911	*
Cost of shares redeemed
Investor Class		(250,066,675	)		(123,319,554	)
Advisor Class**		(18,148,285	)		(22,218,407	)
A-Class		(697,029,713	)		(9,553,897	)
C-Class		(6,200,636	)		(5,751,807	)
H-Class**		(300,183,230	)		(348,024	)*
Conversion activity**
Advisor Class		(2,231,827	)		—
H-Class		2,231,827			—
Net increase from capital share transactions		65,258,544			3,871,878
Net increase in net assets		59,734,242			863,475
Net assets:
Beginning of year		8,779,075			7,915,600
End of year	$	68,513,317		$	8,779,075
Accumulated net investment loss at end of year	$	(134,758	)	$	(30,748	)
Capital share activity:
Shares sold
Investor Class		10,086,090			4,196,223
Advisor Class**		840,367			816,404
A-Class		30,528,848			374,065
C-Class		323,457			266,428
H-Class**		12,051,490			25,422	*
Shares redeemed
Investor Class		(9,852,863	)		(4,144,984	)
Advisor Class**		(753,416	)		(817,928	)
A-Class		(28,213,263	)		(363,273	)
C-Class		(296,403	)		(241,845	)
H-Class**		(12,140,615	)		(12,256	)*
Conversion activity**
Advisor Class		(89,211	)		—
H-Class		86,816			—
Net increase in shares		2,571,297			98,256

*	Since the commencement of operations: September 18, 2014.
**	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

66 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE NASDAQ-100^® 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	26.37		$	33.09		$	43.91		$	46.95		$	59.62
Income (loss) from investment operations:
Net investment income (loss)a		(.27	)		(.33	)		(.54	)		(.60	)		(.80	)
Net gain (loss) on investments (realized and unrealized)		(2.00	)		(6.39	)		(10.28	)		(2.44	)		(11.87	)
Total from investment operations		(2.27	)		(6.72	)		(10.82	)		(3.04	)		(12.67	)
Net asset value, end of period	$	24.10		$	26.37		$	33.09		$	43.91		$	46.95
Total Returnb		(8.61	%)		(20.31	%)		(24.62	%)		(6.50	%)		(21.22	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,857		$	6,821		$	6,865		$	7,709		$	8,792
Ratios to average net assets:
Net investment income (loss)		(1.04	%)		(1.14	%)		(1.44	%)		(1.32	%)		(1.38	%)
Total expensesc		1.44	%		1.46	%		1.46	%		1.44	%		1.45	%
Portfolio turnover rate		1,674	%		149	%		—			—			—

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	25.44		$	32.00		$	42.61		$	45.77		$	58.30
Income (loss) from investment operations:
Net investment income (loss)a		(.33	)		(.37	)		(.60	)		(.70	)		(.90	)
Net gain (loss) on investments (realized and unrealized)		(1.61	)		(6.19	)		(10.01	)		(2.46	)		(11.63	)
Total from investment operations		(1.94	)		(6.56	)		(10.61	)		(3.16	)		(12.53	)
Net asset value, end of period	$	23.50		$	25.44		$	32.00		$	42.61		$	45.77
Total Returnb		(7.63	%)		(20.50	%)		(24.88	%)		(6.89	%)		(21.53	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	54,948		$	570		$	372		$	183		$	474
Ratios to average net assets:
Net investment income (loss)		(1.36	%)		(1.35	%)		(1.69	%)		(1.56	%)		(1.62	%)
Total expensesc		1.69	%		1.71	%		1.71	%		1.68	%		1.69	%
Portfolio turnover rate		1,674	%		149	%		—			—			—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 67

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	22.58		$	28.63		$	38.42		$	41.58		$	53.34
Income (loss) from investment operations:
Net investment income (loss)a		(.45	)		(.53	)		(.80	)		(.95	)		(1.20	)
Net gain (loss) on investments (realized and unrealized)		(1.68	)		(5.52	)		(8.99	)		(2.21	)		(10.56	)
Total from investment operations		(2.13	)		(6.05	)		(9.79	)		(3.16	)		(11.76	)
Net asset value, end of period	$	20.45		$	22.58		$	28.63		$	38.42		$	41.58
Total Returnb		(9.43	%)		(21.13	%)		(25.44	%)		(7.58	%)		(22.12	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,457		$	998		$	561		$	678		$	752
Ratios to average net assets:
Net investment income (loss)		(2.09	%)		(2.12	%)		(2.44	%)		(2.32	%)		(2.37	%)
Total expensesc		2.44	%		2.46	%		2.46	%		2.44	%		2.45	%
Portfolio turnover rate		1,674	%		149	%		—			—			—

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	25.44		$	27.50
Income (loss) from investment operations:
Net investment income (loss)a		(.29	)		(.20	)
Net gain (loss) on investments (realized and unrealized)		(1.95	)		(1.86	)
Total from investment operations		(2.24	)		(2.06	)
Net asset value, end of period	$	23.20		$	25.44
Total Returnb		(8.80	%)		(7.49	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	252		$	335
Ratios to average net assets:
Net investment income (loss)		(1.18	%)		(1.35	%)
Total expensesc		1.70	%		1.68	%
Portfolio turnover rate		1,674	%		149	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: September 18, 2014. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized.
e	Reverse share split — Per share amounts for the periods presented through February 21, 2014 have been restate to reflect a 1:5 reverse share split effective February 21, 2014.

68 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, the Mid-Cap 1.5x Strategy Fund H-Class returned -7.73%. Over the same period, its benchmark, the S&P MidCap 400 Index, returned -3.60%. The Fund had a correlation of more than 99% to its benchmark of 150% of the daily price movement of the S&P MidCap 400 Index.

Utilities and Telecommunications Services contributed the most to performance of the underlying index during the period. Energy was the detracted the most from the performance of the underlying index, followed by the Information Technology sector.

Global Payments, Inc., Waste Connections, Inc., and Atmos Energy Corp. contributed the most to the performance of the underlying index for the period. Peabody Energy Corp., SunEdison, Inc., and Community Health Systems, Inc., were the largest detractors from performance of the underlying index for the period.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

THE RYDEX FUNDS ANNUAL REPORT | 69

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
A-Class	March 31, 2004
C-Class	August 20, 2001
H-Class	August 16, 2001

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	9.6%
Jarden Corp.	0.6%
Alaska Air Group, Inc.	0.5%
LKQ Corp.	0.5%
Acuity Brands, Inc.	0.5%
Mettler-Toledo International, Inc.	0.5%
Foot Locker, Inc.	0.5%
Fortune Brands Home & Security, Inc.	0.5%
Global Payments, Inc.	0.4%
Alliant Energy Corp.	0.4%
Top Ten Total	14.0%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-7.86%	10.87%	6.35%
A-Class Shares with sales charge†	-12.24%	9.80%	5.83%
C-Class Shares	-8.55%	10.06%	5.56%
C-Class Shares with CDSC‡	-9.46%	10.06%	5.56%
H-Class Shares	-7.73%	10.96%	6.38%
S&P MidCap 400 Index	-3.60%	9.52%	7.78%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P MidCap 400 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

70 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 75.6%
Financial - 18.3%
Everest Re Group Ltd.		443	$	87,462
Arthur J Gallagher & Co.		1,837		81,710
Duke Realty Corp.		3,590		80,918
New York Community Bancorp, Inc.		5,047		80,247
Mid-America Apartment Communities, Inc.		783		80,030
Alleghany Corp.*		160		79,391
Camden Property Trust		902		75,849
Regency Centers Corp.		1,013		75,823
Signature Bank*		553		75,273
Alexandria Real Estate Equities, Inc.		762		69,258
National Retail Properties, Inc.		1,464		67,637
Reinsurance Group of America, Inc. — Class A		677		65,161
American Campus Communities, Inc.		1,352		63,666
Raymond James Financial, Inc.		1,329		63,273
Omega Healthcare Investors, Inc.		1,718		60,646
Kilroy Realty Corp.		957		59,210
WR Berkley Corp.		1,018		57,212
CBOE Holdings, Inc.		849		55,465
Jones Lang LaSalle, Inc.		468		54,906
SVB Financial Group*		536		54,699
RenaissanceRe Holdings Ltd.		448		53,684
Lamar Advertising Co. — Class A		852		52,398
American Financial Group, Inc.		737		51,862
Liberty Property Trust		1,517		50,759
MarketAxess Holdings, Inc.		389		48,559
East West Bancorp, Inc.		1,493		48,493
Sovran Self Storage, Inc.		409		48,242
Highwoods Properties, Inc.		997		47,667
Old Republic International Corp.		2,529		46,230
Taubman Centers, Inc.		625		44,519
Weingarten Realty Investors		1,183		44,386
PacWest Bancorp		1,187		44,097
Senior Housing Properties Trust		2,464		44,081
EPR Properties		657		43,769
Douglas Emmett, Inc.		1,453		43,750
First American Financial Corp.		1,132		43,141
Brown & Brown, Inc.		1,194		42,745
Hospitality Properties Trust		1,573		41,779
Endurance Specialty Holdings Ltd.		639		41,752
Hanover Insurance Group, Inc.		444		40,058
Eaton Vance Corp.		1,191		39,922
Corrections Corporation of America		1,217		39,005
Commerce Bancshares, Inc.		863		38,792
Synovus Financial Corp.		1,311		37,901
Umpqua Holdings Corp.		2,286		36,256
FirstMerit Corp.		1,720		36,206
Tanger Factory Outlet Centers, Inc.		984		35,808
First Niagara Financial Group, Inc.		3,682		35,642
Bank of the Ozarks, Inc.		847		35,549
Webster Financial Corp.		949		34,069
CNO Financial Group, Inc.		1,864		33,403
Post Properties, Inc.		557		33,275
Healthcare Realty Trust, Inc.		1,061		32,774
First Horizon National Corp.		2,467		32,318
PrivateBancorp, Inc. — Class A		824		31,806
CoreLogic, Inc.*		916		31,785
Prosperity Bancshares, Inc.		682		31,638
Rayonier, Inc.		1,274		31,442
Cullen/Frost Bankers, Inc.		566		31,192
Bank of Hawaii Corp.		447		30,521
Aspen Insurance Holdings Ltd.		633		30,194
LaSalle Hotel Properties		1,172		29,663
Federated Investors, Inc. — Class B		981		28,302
FNB Corp.		2,174		28,284
SLM Corp.*		4,424		28,137
Associated Banc-Corp.		1,554		27,879
Communications Sales & Leasing, Inc.		1,246		27,724
Equity One, Inc.		941		26,969
First Industrial Realty Trust, Inc.		1,158		26,333
Corporate Office Properties Trust		981		25,741
Urban Edge Properties		958		24,755
Fulton Financial Corp.		1,802		24,111
Care Capital Properties, Inc.		870		23,351
Janus Capital Group, Inc.		1,524		22,296
Primerica, Inc.		499		22,220
Valley National Bancorp		2,321		22,142
Mack-Cali Realty Corp.		930		21,855
Cathay General Bancorp		768		21,757
TCF Financial Corp.		1,771		21,712
Washington Federal, Inc.		950		21,518
Stifel Financial Corp.*		721		21,342
Mercury General Corp.		378		20,979
Waddell & Reed Financial, Inc. — Class A		848		19,962
BancorpSouth, Inc.		880		18,753
Hancock Holding Co.		804		18,460
WP GLIMCHER, Inc.		1,923		18,249
Alexander & Baldwin, Inc.		478		17,533
Trustmark Corp.		702		16,167
Kemper Corp.		501		14,815
International Bancshares Corp.		575		14,180
Genworth Financial, Inc. — Class A*,1		5,166		14,103
WisdomTree Investments, Inc.		1,175		13,430
Potlatch Corp.		422		13,293
Total Financial				3,725,320
Industrial - 13.6%
Acuity Brands, Inc.		454		99,035
Mettler-Toledo International, Inc.*		280		96,533
Fortune Brands Home & Security, Inc.		1,635		91,626
Waste Connections, Inc.		1,270		82,029
Wabtec Corp.		954		75,643
Huntington Ingalls Industries, Inc.		486		66,553
Carlisle Companies, Inc.		666		66,267
IDEX Corp.		788		65,309
Trimble Navigation Ltd.*		2,604		64,579

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 71

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
Arrow Electronics, Inc.*		944	$	60,803
Avnet, Inc.		1,362		60,337
AO Smith Corp.		775		59,139
Packaging Corporation of America		978		59,071
Hubbell, Inc.		553		58,579
Lennox International, Inc.		413		55,833
Orbital ATK, Inc.		611		53,120
AptarGroup, Inc.		652		51,124
Sonoco Products Co.		1,048		50,901
Bemis Company, Inc.		983		50,900
Old Dominion Freight Line, Inc.*		713		49,640
Keysight Technologies, Inc.*		1,778		49,322
B/E Aerospace, Inc.		1,060		48,887
AECOM*		1,584		48,772
Graco, Inc.		572		48,025
Gentex Corp.		2,998		47,039
Nordson Corp.		556		42,278
Donaldson Company, Inc.		1,280		40,845
Lincoln Electric Holdings, Inc.		668		39,125
Jabil Circuit, Inc.		1,977		38,097
FEI Co.		424		37,740
Zebra Technologies Corp. — Class A*		539		37,191
Genesee & Wyoming, Inc. — Class A*		591		37,056
AGCO Corp.		736		36,579
Eagle Materials, Inc.		512		35,896
Curtiss-Wright Corp.		462		34,960
Cognex Corp.		881		34,315
ITT Corp.		929		34,271
Kirby Corp.*		558		33,642
National Instruments Corp.		1,048		31,555
Teledyne Technologies, Inc.*		358		31,554
Oshkosh Corp.		759		31,020
Woodward, Inc.		578		30,068
Regal Beloit Corp.		464		29,274
CLARCOR, Inc.		506		29,242
Valmont Industries, Inc.		236		29,226
Trinity Industries, Inc.		1,586		29,040
Landstar System, Inc.		440		28,428
Terex Corp.		1,127		28,040
Tech Data Corp.*		364		27,944
Crane Co.		514		27,684
Clean Harbors, Inc.*		544		26,841
Belden, Inc.		436		26,762
Energizer Holdings, Inc.		642		26,007
Louisiana-Pacific Corp.*		1,486		25,440
Timken Co.		723		24,213
KBR, Inc.		1,476		22,848
Silgan Holdings, Inc.		420		22,331
GATX Corp.		437		20,758
Esterline Technologies Corp.*		307		19,669
Granite Construction, Inc.		409		19,550
Kennametal, Inc.		827		18,599
KLX, Inc.*		548		17,613
Vishay Intertechnology, Inc.		1,407		17,180
Joy Global, Inc.1		1,016		16,327
Triumph Group, Inc.		512		16,118
MSA Safety, Inc.		330		15,956
Werner Enterprises, Inc.		464		12,602
Knowles Corp.*		918		12,099
Greif, Inc. — Class A		267		8,744
Total Industrial				2,763,793
Consumer, Non-cyclical - 11.9%
Jarden Corp.*		2,145		126,468
Global Payments, Inc.		1,342		87,633
ResMed, Inc.		1,453		84,013
Ingredion, Inc.		746		79,665
Cooper Companies, Inc.		502		77,293
Gartner, Inc.*		855		76,394
WhiteWave Foods Co. — Class A*		1,830		74,370
IDEXX Laboratories, Inc.*		930		72,839
Teleflex, Inc.		432		67,828
STERIS plc		891		63,306
MEDNAX, Inc.*		973		62,875
SEI Investments Co.		1,427		61,432
ManpowerGroup, Inc.		750		61,065
Align Technology, Inc.*		752		54,663
United Therapeutics Corp.*		471		52,484
West Pharmaceutical Services, Inc.		751		52,059
TreeHouse Foods, Inc.*		585		50,749
Service Corporation International		2,022		49,903
Edgewell Personal Care Co.		616		49,606
VCA, Inc.*		838		48,344
Post Holdings, Inc.*		665		45,732
Hain Celestial Group, Inc.*		1,070		43,774
Sprouts Farmers Market, Inc.*		1,467		42,601
WellCare Health Plans, Inc.*		458		42,479
Amsurg Corp. — Class A*		556		41,478
ABIOMED, Inc.*		408		38,682
Charles River Laboratories International, Inc.*		485		36,830
Bio-Techne Corp.		385		36,390
Flowers Foods, Inc.		1,939		35,794
RR Donnelley & Sons Co.		2,167		35,539
PAREXEL International Corp.*		557		34,941
Live Nation Entertainment, Inc.*		1,513		33,755
WEX, Inc.*		401		33,427
Deluxe Corp.		508		31,745
LifePoint Health, Inc.*		448		31,024
Hill-Rom Holdings, Inc.		590		29,677
Bio-Rad Laboratories, Inc. — Class A*		216		29,532
Molina Healthcare, Inc.*		426		27,473
Catalent, Inc.*		1,021		27,231
Rollins, Inc.		976		26,469
Owens & Minor, Inc.		651		26,313
Snyder’s-Lance, Inc.		820		25,814
LivaNova plc*		441		23,805
Lancaster Colony Corp.		202		22,335

72 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
CEB, Inc.		339	$	21,944
Avon Products, Inc.		4,519		21,736
Community Health Systems, Inc.*		1,170		21,657
Graham Holdings Co. — Class B		45		21,600
United Natural Foods, Inc.*		522		21,037
Akorn, Inc.*		831		19,553
Boston Beer Company, Inc. — Class A*		98		18,137
Aaron’s, Inc.		671		16,842
Dean Foods Co.		952		16,489
SUPERVALU, Inc.*		2,760		15,898
Sotheby’s		572		15,290
FTI Consulting, Inc.*		428		15,198
Halyard Health, Inc.*		484		13,905
DeVry Education Group, Inc.		590		10,189
Tootsie Roll Industries, Inc.		188		6,559
Total Consumer, Non-cyclical				2,411,863
Consumer, Cyclical - 10.6%
Alaska Air Group, Inc.		1,294		106,133
LKQ Corp.*		3,178		101,474
Foot Locker, Inc.		1,424		91,848
JetBlue Airways Corp.*		3,332		70,372
Domino’s Pizza, Inc.		517		68,173
NVR, Inc.*		38		65,830
Polaris Industries, Inc.		627		61,747
Carter’s, Inc.		537		56,589
Ingram Micro, Inc. — Class A		1,540		55,301
Panera Bread Co. — Class A*		239		48,954
Toro Co.		565		48,658
Toll Brothers, Inc.*		1,609		47,482
Williams-Sonoma, Inc.		858		46,967
Casey’s General Stores, Inc.		405		45,894
Brunswick Corp.		945		45,341
Dunkin’ Brands Group, Inc.		951		44,859
Dick’s Sporting Goods, Inc.		935		43,711
Copart, Inc.*		1,058		43,135
Skechers U.S.A., Inc. — Class A*		1,356		41,290
Tempur Sealy International, Inc.*		648		39,392
Cinemark Holdings, Inc.		1,095		39,234
Pool Corp.		436		38,255
MSC Industrial Direct Company, Inc. — Class A		500		38,155
Cracker Barrel Old Country Store, Inc.		248		37,862
Office Depot, Inc.*		5,128		36,409
Watsco, Inc.		267		35,976
World Fuel Services Corp.		735		35,706
J.C. Penney Company, Inc.*		3,177		35,138
Scotts Miracle-Gro Co. — Class A		472		34,347
Kate Spade & Co.*		1,329		33,916
Vista Outdoor, Inc.*		634		32,911
Tupperware Brands Corp.		524		30,382
Thor Industries, Inc.		474		30,227
CST Brands, Inc.		785		30,058
Buffalo Wild Wings, Inc.*		195		28,883
American Eagle Outfitters, Inc.		1,725		28,756
Brinker International, Inc.		593		27,248
CalAtlantic Group, Inc.		793		26,502
Cheesecake Factory, Inc.		468		24,846
Wendy’s Co.		2,270		24,720
Cabela’s, Inc.*		500		24,345
Big Lots, Inc.		514		23,279
Jack in the Box, Inc.		360		22,993
Abercrombie & Fitch Co. — Class A		697		21,983
Dana Holding Corp.		1,550		21,840
Deckers Outdoor Corp.*		337		20,190
Ascena Retail Group, Inc.*		1,772		19,598
Herman Miller, Inc.		621		19,183
Fossil Group, Inc.*		430		19,101
DreamWorks Animation SKG, Inc. — Class A*		740		18,463
Chico’s FAS, Inc.		1,387		18,405
HNI Corp.		458		17,940
TRI Pointe Group, Inc.*		1,512		17,811
HSN, Inc.		331		17,315
KB Home		878		12,538
Guess?, Inc.		661		12,407
International Speedway Corp. — Class A		277		10,224
MDC Holdings, Inc.		407		10,199
Total Consumer, Cyclical				2,150,495
Technology - 8.3%
ANSYS, Inc.*		915		81,857
Synopsys, Inc.*		1,573		76,197
Cadence Design Systems, Inc.*		3,169		74,725
CDK Global, Inc.		1,605		74,713
Broadridge Financial Solutions, Inc.		1,233		73,129
Jack Henry & Associates, Inc.		818		69,178
MSCI, Inc. — Class A		923		68,376
Ultimate Software Group, Inc.*		299		57,857
Computer Sciences Corp.		1,433		49,281
Fortinet, Inc.*		1,514		46,374
Teradyne, Inc.		2,121		45,792
Microsemi Corp.*		1,166		44,669
Tyler Technologies, Inc.*		342		43,985
Manhattan Associates, Inc.*		758		43,107
PTC, Inc.*		1,189		39,427
NCR Corp.*		1,285		38,460
DST Systems, Inc.		329		37,101
IPG Photonics Corp.*		379		36,414
Atmel Corp.		4,373		35,509
MAXIMUS, Inc.		673		35,427
Fair Isaac Corp.		326		34,585
Leidos Holdings, Inc.		667		33,563
VeriFone Systems, Inc.*		1,143		32,278
Cree, Inc.*		1,047		30,468
Synaptics, Inc.*		381		30,381
j2 Global, Inc.		480		29,558
Integrated Device Technology, Inc.*		1,400		28,616
Cypress Semiconductor Corp.*		3,256		28,197
SYNNEX Corp.		301		27,870

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 73

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
Convergys Corp.		1,002	$	27,826
Allscripts Healthcare Solutions, Inc.*		1,965		25,958
ACI Worldwide, Inc.*		1,236		25,696
Rackspace Hosting, Inc.*		1,156		24,958
Fairchild Semiconductor International, Inc. — Class A*		1,179		23,580
NetScout Systems, Inc.*		1,023		23,498
Science Applications International Corp.		429		22,883
Lexmark International, Inc. — Class A		643		21,495
Mentor Graphics Corp.		1,036		21,062
Diebold, Inc.		676		19,543
Advanced Micro Devices, Inc.*		6,668		19,004
CommVault Systems, Inc.*		436		18,822
Intersil Corp. — Class A		1,373		18,357
Silicon Laboratories, Inc.*		401		18,029
Acxiom Corp.*		807		17,302
3D Systems Corp.*		1,105		17,094
Total Technology				1,692,201
Utilities - 4.6%
Alliant Energy Corp.		1,178		87,502
Atmos Energy Corp.		1,059		78,642
Westar Energy, Inc.		1,470		72,927
UGI Corp.		1,784		71,877
OGE Energy Corp.		2,072		59,321
Aqua America, Inc.		1,837		58,453
Great Plains Energy, Inc.		1,600		51,600
Questar Corp.		1,816		45,037
National Fuel Gas Co.		880		44,044
Vectren Corp.		859		43,431
MDU Resources Group, Inc.		2,026		39,426
IDACORP, Inc.		522		38,936
WGL Holdings, Inc.		517		37,415
Hawaiian Electric Industries, Inc.*		1,117		36,191
Cleco Corp.		628		34,672
ONE Gas, Inc.		543		33,177
New Jersey Resources Corp.		892		32,496
Black Hills Corp.		531		31,929
PNM Resources, Inc.		827		27,886
Talen Energy Corp.*		667		6,003
Total Utilities				930,965
Basic Materials - 3.8%
Valspar Corp.		754		80,694
Albemarle Corp.		1,165		74,478
Ashland, Inc.		656		72,133
RPM International, Inc.		1,379		65,268
Steel Dynamics, Inc.		2,515		56,612
Reliance Steel & Aluminum Co.		746		51,616
NewMarket Corp.		103		40,815
Royal Gold, Inc.		677		34,723
Cabot Corp.		647		31,270
Olin Corp.		1,714		29,772
Sensient Technologies Corp.		467		29,636
PolyOne Corp.		885		26,771
Domtar Corp.		650		26,325
Compass Minerals International, Inc.		350		24,801
United States Steel Corp.		1,518		24,364
Minerals Technologies, Inc.		362		20,580
Commercial Metals Co.		1,206		20,466
Allegheny Technologies, Inc.		1,130		18,419
Worthington Industries, Inc.		472		16,822
Carpenter Technology Corp.		486		16,636
Total Basic Materials				762,201
Energy - 2.6%
HollyFrontier Corp.		1,832		64,706
Energen Corp.		1,007		36,846
Gulfport Energy Corp.*		1,277		36,190
Oceaneering International, Inc.		1,015		33,738
QEP Resources, Inc.		1,981		27,952
Patterson-UTI Energy, Inc.		1,527		26,907
Nabors Industries Ltd.		2,922		26,882
CONSOL Energy, Inc.		2,377		26,836
Noble Corporation plc		2,524		26,123
Ensco plc — Class A		2,460		25,510
Murphy USA, Inc.*		407		25,010
Dril-Quip, Inc.*		394		23,861
Superior Energy Services, Inc.		1,571		21,036
Rowan Companies plc — Class A		1,295		20,850
Western Refining, Inc.		701		20,392
NOW, Inc.*		1,113		19,722
WPX Energy, Inc.*		2,430		16,986
Oil States International, Inc.*		534		16,832
SM Energy Co.		707		13,249
Denbury Resources, Inc.		3,641		8,083
SunEdison, Inc.*		3,289		1,777
Total Energy				519,488
Communications - 1.9%
FactSet Research Systems, Inc.		427		64,703
ARRIS International plc*		1,857		42,562
AMC Networks, Inc. — Class A*		632		41,042
Telephone & Data Systems, Inc.		981		29,518
Ciena Corp.*		1,341		25,506
John Wiley & Sons, Inc. — Class A		504		24,640
InterDigital, Inc.		363		20,201
Cable One, Inc.		46		20,108
Meredith Corp.		391		18,573
Time, Inc.		1,088		16,799
New York Times Co. — Class A		1,274		15,874
Polycom, Inc.*		1,390		15,499
comScore, Inc.*		488		14,660
NeuStar, Inc. — Class A*		558		13,727

74 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
Plantronics, Inc.		348	$	13,638
Total Communications				377,050
Total Common Stocks
(Cost $13,831,288)				15,333,376
MUTUAL FUNDS† - 9.6%
Guggenheim Strategy Fund I1		78,527		1,948,249
Total Mutual Funds
(Cost $1,949,435)				1,948,249

	Face Amount
REPURCHASE AGREEMENTS††,2 - 6.1%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	633,778		633,778
HSBC Group issued 03/31/16 at 0.21% due 04/01/163		607,576		607,576
Total Repurchase Agreements
(Cost $1,241,354)				1,241,354
Total Investments - 91.3%
(Cost $17,022,077)			$	18,522,979
Other Assets & Liabilities, net - 8.7%				1,760,856
Total Net Assets - 100.0%			$	20,283,835

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Value of Contracts $4,034,800)		28	$	149,439

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Credit Suisse Capital, LLC April 2016 S&P MidCap 400 Index Swap 0.43%4, Terminating 04/26/16 (Notional Value $2,433,640)		1,684	$	56,832
Goldman Sachs International April 2016 S&P MidCap 400 Index Swap 0.40%4, Terminating 04/27/16 (Notional Value $1,435,355)		993		18,451
Barclays Bank plc April 2016 S&P MidCap 400 Index Swap 0.40%4, Terminating 04/29/16 (Notional Value $7,201,027)		4,983		7,801
(Total Notional Value $11,070,022)			$	83,084

*	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	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
4	Total Return based on S&P MidCap 400 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 75

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
MID-CAP 1.5x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	15,333,376	$	—	$	—	$	—	$	—	$	15,333,376
Equity Futures Contracts		—		149,439		—		—		—		149,439
Equity Index Swap Agreements		—		—		—		83,084		—		83,084
Mutual Funds		1,948,249		—		—		—		—		1,948,249
Repurchase Agreements		—		—		1,241,354		—		—		1,241,354
Total	$	17,281,625	$	149,439	$	1,241,354	$	83,084	$	—	$	18,755,502

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

76 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

MID-CAP 1.5x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $13,831,288)	$	15,333,376
Investments in affiliated issuers, at value (cost $1,949,435)		1,948,249
Repurchase agreements, at value (cost $1,241,354)		1,241,354
Total investments (cost $17,022,077)		18,522,979
Segregated cash with broker		794,200
Unrealized appreciation on swap agreements		83,084
Cash		449
Receivables:
Fund shares sold		918,391
Dividends		17,611
Variation margin		496
Interest		8
Total assets		20,337,218
Liabilities:
Payable for:
Management fees		14,229
Licensing fees		9,707
Fund shares redeemed		7,424
Distribution and service fees		6,754
Securities purchased		4,305
Transfer agent and administrative fees		3,953
Portfolio accounting fees		1,581
Miscellaneous		5,430
Total liabilities		53,383
Commitments and contingent liabilities (Note 13)		—
Net assets	$	20,283,835
Net assets consist of:
Paid in capital	$	18,668,914
Accumulated net investment loss		(81,090	)
Accumulated net realized gain on investments		(37,414	)
Net unrealized appreciation on investments		1,733,425
Net assets	$	20,283,835
A-Class:
Net assets	$	1,878,810
Capital shares outstanding		30,479
Net asset value per share	$	61.64
Maximum offering price per share (Net asset value divided by 95.25%)	$	64.71
C-Class:
Net assets	$	4,793,688
Capital shares outstanding		87,582
Net asset value per share	$	54.73
H-Class:
Net assets	$	13,611,337
Capital shares outstanding		220,067
Net asset value per share	$	61.85

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers	$	271,203
Dividends from securities of affiliated issuers		68,947
Interest		15,369
Income from securities lending, net		477
Total investment income		355,996
Expenses:
Management fees		458,305
Transfer agent and administrative fees		127,307
Distribution and service fees:
A-Class		10,905
C-Class		47,077
H-Class		104,632
Portfolio accounting fees		49,948
Custodian fees		5,884
Trustees’ fees*		3,856
Line of credit fees		131
Miscellaneous		70,350
Total expenses		878,395
Net investment loss		(522,399	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		5,567,040
Investments in affiliated issuers		23,985
Swap agreements		(3,767,326	)
Futures contracts		1,828,163
Net realized gain		3,651,862
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(3,678,282	)
Investments in affiliated issuers		(1,186	)
Swap agreements		(192,729	)
Futures contracts		148,921
Net change in unrealized appreciation (depreciation)		(3,723,276	)
Net realized and unrealized loss		(71,414	)
Net decrease in net assets resulting from operations	$	(593,813	)

* 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 ANNUAL REPORT | 77

MID-CAP 1.5x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(522,399	)	$	(268,931	)
Net realized gain on investments		3,651,862			12,898,103
Net change in unrealized appreciation (depreciation) on investments		(3,723,276	)		(1,836,576	)
Net increase (decrease) in net assets resulting from operations		(593,813	)		10,792,596
Distributions to shareholders from:
Net realized gains
A-Class		(39,098	)		(7,007	)
C-Class		(32,393	)		(16,371	)
H-Class		(1,799,216	)		(613,785	)
Total distributions to shareholders		(1,870,707	)		(637,163	)
Capital share transactions:
Proceeds from sale of shares
A-Class		12,111,577			4,910,310
C-Class		2,908,743			1,521,171
H-Class		867,760,588			529,535,828
Distributions reinvested
A-Class		30,028			6,996
C-Class		31,941			15,357
H-Class		573,424			344,886
Cost of shares redeemed
A-Class		(14,445,041	)		(2,478,109	)
C-Class		(2,169,886	)		(2,066,363	)
H-Class		(870,431,834	)		(542,160,150	)
Net decrease from capital share transactions		(3,630,460	)		(10,370,074	)
Net decrease in net assets		(6,094,980	)		(214,641	)
Net assets:
Beginning of year		26,378,815			26,593,456
End of year	$	20,283,835		$	26,378,815
Accumulated net investment loss at end of year	$	(81,090	)	$	—
Capital share activity:
Shares sold
A-Class		201,123			76,447
C-Class		51,115			28,166
H-Class		14,189,381			8,717,857
Shares issued from reinvestment of distributions
A-Class		473			114
C-Class		566			278
H-Class		9,018			5,604
Shares redeemed
A-Class		(250,294	)		(42,389	)
C-Class		(40,676	)		(38,071	)
H-Class		(14,221,967	)		(8,811,347	)
Net decrease in shares		(61,261	)		(63,341	)

78 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	67.32		$	58.48		$	45.07		$	36.23		$	37.14
Income (loss) from investment operations:
Net investment income (loss)a		(.47	)		(.41	)		(.35	)		(.16	)		(.23	)
Net gain (loss) on investments (realized and unrealized)		(4.81	)		9.45			13.76			9.00			(.68	)
Total from investment operations		(5.28	)		9.04			13.41			8.84			(.91	)
Less distributions from:
Net realized gains		(.40	)		(.20	)		—			—			—
Total distributions		(.40	)		(.20	)		—			—			—
Net asset value, end of period	$	61.64		$	67.32		$	58.48		$	45.07		$	36.23
Total Returnb		(7.86	%)		15.50	%		29.75	%		24.40	%		(2.45	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,879		$	5,330		$	2,632		$	2,199		$	1,997
Ratios to average net assets:
Net investment income (loss)		(0.75	%)		(0.66	%)		(0.68	%)		(0.43	%)		(0.68	%)
Total expensesc		1.65	%		1.64	%		1.67	%		1.66	%		1.66	%
Portfolio turnover rate		1,506	%		598	%		563	%		447	%		141	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	60.27		$	52.77		$	40.97		$	33.18		$	34.26
Income (loss) from investment operations:
Net investment income (loss)a		(.78	)		(.76	)		(.64	)		(.41	)		(.43	)
Net gain (loss) on investments (realized and unrealized)		(4.36	)		8.46			12.44			8.20			(.65	)
Total from investment operations		(5.14	)		7.70			11.80			7.79			(1.08	)
Less distributions from:
Net realized gains		(.40	)		(.20	)		—			—			—
Total distributions		(.40	)		(.20	)		—			—			—
Net asset value, end of period	$	54.73		$	60.27		$	52.77		$	40.97		$	33.18
Total Returnb		(8.55	%)		14.63	%		28.80	%		23.48	%		(3.15	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,794		$	4,615		$	4,549		$	5,107		$	4,815
Ratios to average net assets:
Net investment income (loss)		(1.41	%)		(1.39	%)		(1.40	%)		(1.23	%)		(1.42	%)
Total expensesc		2.40	%		2.40	%		2.42	%		2.40	%		2.41	%
Portfolio turnover rate		1,506	%		598	%		563	%		447	%		141	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 79

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	67.45		$	58.56		$	45.13		$	36.27		$	37.12
Income (loss) from investment operations:
Net investment income (loss)a		(.57	)		(.29	)		(.34	)		(.15	)		(.24	)
Net gain (loss) on investments (realized and unrealized)		(4.63	)		9.38			13.77			9.01			(.61	)
Total from investment operations		(5.20	)		9.09			13.43			8.86			(.85	)
Less distributions from:
Net realized gains		(.40	)		(.20	)		—			—			—
Total distributions		(.40	)		(.20	)		—			—			—
Net asset value, end of period	$	61.85		$	67.45		$	58.56		$	45.13		$	36.27
Total Returnb		(7.73	%)		15.56	%		29.76	%		24.43	%		(2.29	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,611		$	16,433		$	19,413		$	57,067		$	16,974
Ratios to average net assets:
Net investment income (loss)		(0.93	%)		(0.47	%)		(0.66	%)		(0.41	%)		(0.72	%)
Total expensesc		1.66	%		1.66	%		1.68	%		1.67	%		1.66	%
Portfolio turnover rate		1,506	%		598	%		563	%		447	%		141	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.

80 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one year ended March 31, 2016, Inverse Mid-Cap Strategy Fund H-Class returned -0.07%. Over the same period, its benchmark, the S&P MidCap 400 Index, returned -3.60%. Inverse Mid-Cap Strategy Fund achieved a daily correlation of 99% to its benchmark of -100% of the daily price movement of the S&P MidCap 400 Index.

Utilities and Telecommunications Services contributed the most to performance of the underlying index during the period. Energy was the detracted the most from the performance of the underlying index, followed by the Information Technology sector.

Global Payments, Inc., Waste Connections, Inc., and Atmos Energy Corp. contributed the most to the performance of the underlying index for the period. Peabody Energy Corp., SunEdison, Inc., and Community Health Systems, Inc., were the largest detractors from performance of the underlying index for the period.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

THE RYDEX FUNDS ANNUAL REPORT | 81

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

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.

Cumulative Fund Performance*

Largest Holding (% of Total Net Assets)
Guggenheim Strategy Fund I	32.0%
“Largest Holding” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-0.16%	-12.87%	-11.20%
A-Class Shares with sales charge†	-4.89%	-13.71%	-11.63%
C-Class Shares	-0.96%	-13.54%	-11.89%
C-Class Shares with CDSC‡	-1.95%	-13.54%	-11.89%
H-Class Shares	-0.07%	-12.86%	-11.21%
S&P MidCap 400 Index	-3.60%	9.52%	7.78%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P MidCap 400 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

82 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE MID-CAP STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 32.0%
Guggenheim Strategy Fund I1		39,503	$	980,068
Total Mutual Funds
(Cost $982,243)				980,068

	Face Amount
REPURCHASE AGREEMENTS††,2 - 60.1%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	1,191,437		1,191,437
HSBC Group issued 03/31/16 at 0.21% due 04/01/163		651,200		651,200
Total Repurchase Agreements
(Cost $1,842,637)				1,842,637
Total Investments - 92.1%
(Cost $2,824,880)			$	2,822,705
Other Assets & Liabilities, net - 7.9%				241,432
Total Net Assets - 100.0%			$	3,064,137

	Contracts		Unrealized Loss
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2016 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Value of Contracts $576,400)		4	$	(24,045	)

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Barclays Bank plc April 2016 S&P MidCap 400 Index Swap 0.40%4, Terminating 04/29/16 (Notional Value $797,581)		552	$	(1,027	)
Credit Suisse Capital, LLC April 2016 S&P MidCap 400 Index Swap 0.43%4, Terminating 04/26/16 (Notional Value $306,189)		212		(7,190	)
Goldman Sachs International April 2016 S&P MidCap 400 Index Swap 0.40%4, Terminating 04/27/16 (Notional Value $1,381,413)		956		(26,387	)
(Total Notional Value $2,485,183)			$	(34,604	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
4	Total Return based on S&P MidCap 400 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 83

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INVERSE MID-CAP STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Mutual Funds	$	980,068	$	—	$	—	$	—	$	—	$	980,068
Repurchase Agreements		—		—		1,842,637		—		—		1,842,637
Total	$	980,068	$	—	$	1,842,637	$	—	$	—	$	2,822,705

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	24,045	$	—	$	—	$	—	$	24,045
Equity Index Swap Agreements		—		—		—		34,604		—		34,604
Total	$	—	$	24,045	$	—	$	34,604	$	—	$	58,649

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

84 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE MID-CAP STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in affiliated issuers, at value (cost $982,243)	$	980,068
Repurchase agreements, at value (cost $1,842,637)		1,842,637
Total investments (cost $2,824,880)		2,822,705
Segregated cash with broker		276,800
Receivables:
Fund shares sold		7,367
Dividends		1,612
Interest		11
Total assets		3,108,495
Liabilities:
Unrealized depreciation on swap agreements		34,604
Payable for:
Management fees		3,558
Securities purchased		1,612
Distribution and service fees		1,193
Transfer agent and administrative fees		988
Portfolio accounting fees		395
Fund shares redeemed		100
Variation margin		80
Miscellaneous		1,828
Total liabilities		44,358
Commitments and contingent liabilities (Note 13)		—
Net assets	$	3,064,137
Net assets consist of:
Paid in capital	$	15,131,505
Accumulated net investment loss		(12,012	)
Accumulated net realized loss on investments		(11,994,532	)
Net unrealized depreciation on investments		(60,824	)
Net assets	$	3,064,137
A-Class:
Net assets	$	110,901
Capital shares outstanding		3,612	��
Net asset value per share	$	30.70
Maximum offering price per share (Net asset value divided by 95.25%)	$	32.24
C-Class:
Net assets	$	273,057
Capital shares outstanding		9,792
Net asset value per share	$	27.89
H-Class:
Net assets	$	2,680,179
Capital shares outstanding		87,338
Net asset value per share	$	30.69

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	12,216
Interest		2,880
Total investment income		15,096
Expenses:
Management fees		40,078
Transfer agent and administrative fees		11,133
Distribution and service fees:
A-Class		181
C-Class		2,451
H-Class		10,339
Portfolio accounting fees		4,453
Custodian fees		518
Trustees’ fees*		301
Miscellaneous		5,914
Total expenses		75,368
Net investment loss		(60,272	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		888
Investments in affiliated issuers		(4,630	)
Swap agreements		310,209
Futures contracts		249,231
Net realized gain		555,698
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		1,070
Investments in affiliated issuers		(2,175	)
Swap agreements		9,928
Futures contracts		(24,045	)
Net change in unrealized appreciation (depreciation)		(15,222	)
Net realized and unrealized gain		540,476
Net increase in net assets resulting from operations	$	480,204

* 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 ANNUAL REPORT | 85

INVERSE MID-CAP STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(60,272	)	$	(53,802	)
Net realized gain (loss) on investments		555,698			(384,074	)
Net change in unrealized appreciation (depreciation) on investments		(15,222	)		7,665
Net increase (decrease) in net assets resulting from operations		480,204			(430,211	)
Capital share transactions:
Proceeds from sale of shares
A-Class		2,309,572			718,727
C-Class		572,876			110,445
H-Class		102,675,850			22,439,039
Cost of shares redeemed
A-Class		(2,246,291	)		(734,756	)
C-Class		(364,765	)		(134,631	)
H-Class		(103,514,443	)		(22,866,538	)
Net decrease from capital share transactions		(567,201	)		(467,714	)
Net decrease in net assets		(86,997	)		(897,925	)
Net assets:
Beginning of year		3,151,134			4,049,059
End of year	$	3,064,137		$	3,151,134
Accumulated net investment loss at end of year	$	(12,012	)	$	(13,602	)
Capital share activity:
Shares sold
A-Class		69,625			20,062
C-Class		18,922			3,394
H-Class		3,247,874			668,274
Shares redeemed
A-Class		(67,547	)		(21,136	)
C-Class		(12,293	)		(4,230	)
H-Class		(3,258,727	)		(677,878	)
Net decrease in shares		(2,146	)		(11,514	)

86 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	30.76		$	35.55		$	44.64		$	54.64		$	61.14
Income (loss) from investment operations:
Net investment income (loss)a		(.38	)		(.48	)		(.64	)		(.84	)		(1.02	)
Net gain (loss) on investments (realized and unrealized)		.32			(4.31	)		(8.45	)		(9.16	)		(5.48	)
Total from investment operations		(.06	)		(4.79	)		(9.09	)		(10.00	)		(6.50	)
Net asset value, end of period	$	30.70		$	30.76		$	35.55		$	44.64		$	54.64
Total Returnb		(0.16	%)		(13.47	%)		(20.36	%)		(18.29	%)		(10.65	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	111		$	47		$	93		$	26		$	115
Ratios to average net assets:
Net investment income (loss)		(1.18	%)		(1.40	%)		(1.65	%)		(1.52	%)		(1.63	%)
Total expensesc		1.65	%		1.66	%		1.67	%		1.64	%		1.66	%
Portfolio turnover rate		199	%		38	%		—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	28.16		$	32.78		$	41.49		$	51.18		$	57.72
Income (loss) from investment operations:
Net investment income (loss)a		(.59	)		(.67	)		(.90	)		(1.14	)		(1.44	)
Net gain (loss) on investments (realized and unrealized)		.32			(3.95	)		(7.81	)		(8.55	)		(5.10	)
Total from investment operations		(.27	)		(4.62	)		(8.71	)		(9.69	)		(6.54	)
Net asset value, end of period	$	27.89		$	28.16		$	32.78		$	41.49		$	51.18
Total Returnb		(0.96	%)		(14.09	%)		(20.99	%)		(18.93	%)		(11.33	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	273		$	89		$	131		$	216		$	121
Ratios to average net assets:
Net investment income (loss)		(2.00	%)		(2.13	%)		(2.40	%)		(2.29	%)		(2.39	%)
Total expensesc		2.41	%		2.41	%		2.42	%		2.40	%		2.42	%
Portfolio turnover rate		199	%		38	%		—			—			—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 87

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	30.70		$	35.49		$	44.59		$	54.57		$	61.08
Income (loss) from investment operations:
Net investment income (loss)a		(.42	)		(.47	)		(.66	)		(.81	)		(1.05	)
Net gain (loss) on investments (realized and unrealized)		.41			(4.32	)		(8.44	)		(9.17	)		(5.46	)
Total from investment operations		(.01	)		(4.79	)		(9.10	)		(9.98	)		(6.51	)
Net asset value, end of period	$	30.69		$	30.70		$	35.49		$	44.59		$	54.57
Total Returnb		(0.07	%)		(13.47	%)		(20.39	%)		(18.31	%)		(10.66	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,680		$	3,015		$	3,825		$	1,409		$	1,578
Ratios to average net assets:
Net investment income (loss)		(1.32	%)		(1.38	%)		(1.65	%)		(1.53	%)		(1.64	%)
Total expensesc		1.65	%		1.65	%		1.67	%		1.65	%		1.67	%
Portfolio turnover rate		199	%		38	%		—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Reverse share split — Per share amounts for the periods presented through February 7, 2014 have been restated to reflect a 1:3 reverse share split effective February 7, 2014.

88 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Russell 2000^® 1.5x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 150% of the daily price movement of the Russell 2000 Index. Russell 2000^® 1.5x Strategy Fund H-Class returned -16.63%, while the Russell 2000 Index returned -1.34% over the same time period.

Among sectors, the biggest performance contributors to the underlying index during the period were Utilities and Telecommunications Services. The Health Care sector detracted the most from return, followed by the Energy sector.

Synageva BioPharma Corp., Dyax Corp., and Piedmont Natural Gas Company, Inc. were the largest contributors to the performance of the underlying index for the year. Puma Biotechnology, Inc., Celldex Therapeutics, Inc., and SemGroup Corp. – Class A were the leading detractors from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

THE RYDEX FUNDS ANNUAL REPORT | 89

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
A-Class	March 31, 2004
C-Class	January 23, 2001
H-Class	November 1, 2000

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	0.6%
STERIS plc	0.3%
CubeSmart	0.3%
West Pharmaceutical Services, Inc.	0.2%
TreeHouse Foods, Inc.	0.2%
Vail Resorts, Inc.	0.2%
Piedmont Natural Gas Company, Inc.	0.2%
Sovran Self Storage, Inc.	0.2%
MarketAxess Holdings, Inc.	0.2%
Highwoods Properties, Inc.	0.2%
Top Ten Total	2.6%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-16.75%	7.14%	3.07%
A-Class Shares with sales charge†	-20.69%	6.10%	2.57%
C-Class Shares	-17.36%	6.34%	2.28%
C-Class Shares with CDSC‡	-18.12%	6.34%	2.28%
H-Class Shares	-16.63%	7.18%	3.07%
Russell 2000 Index	-1.34%	11.40%	8.15%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Russell 2000 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

90 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 70.7%
Financial - 18.5%
CubeSmart		754	$	25,108
Sovran Self Storage, Inc.		169		19,934
MarketAxess Holdings, Inc.		158		19,723
Highwoods Properties, Inc.		399		19,076
First American Financial Corp.		460		17,530
Investors Bancorp, Inc.		1,408		16,388
EPR Properties		243		16,190
Sun Communities, Inc.		215		15,396
Gramercy Property Trust		1,781		15,049
DCT Industrial Trust, Inc.		377		14,880
Umpqua Holdings Corp.		936		14,845
FirstMerit Corp.		704		14,819
CyrusOne, Inc.		314		14,334
CNO Financial Group, Inc.		798		14,299
Bank of the Ozarks, Inc.		331		13,892
Webster Financial Corp.		385		13,822
Prosperity Bancshares, Inc.		297		13,778
Healthcare Realty Trust, Inc.		431		13,313
Western Alliance Bancorporation*		390		13,018
PrivateBancorp, Inc. — Class A		334		12,892
Medical Properties Trust, Inc.		993		12,889
RLJ Lodging Trust		561		12,835
Sunstone Hotel Investors, Inc.		896		12,544
RLI Corp.		183		12,234
LaSalle Hotel Properties		480		12,149
New Residential Investment Corp. REIT		978		11,374
FNB Corp.		871		11,332
Ellie Mae, Inc.*		125		11,330
Education Realty Trust, Inc.		271		11,273
MGIC Investment Corp.*		1,442		11,061
GEO Group, Inc.		317		10,990
DuPont Fabros Technology, Inc.		268		10,862
United Bankshares, Inc.		295		10,827
Fulton Financial Corp.		809		10,824
First Industrial Realty Trust, Inc.		470		10,688
National Health Investors, Inc.		159		10,577
Urban Edge Properties		409		10,568
MB Financial, Inc.		319		10,352
Acadia Realty Trust		292		10,258
Home BancShares, Inc.		242		9,910
Kite Realty Group Trust		355		9,837
Equity One, Inc.		339		9,716
Wintrust Financial Corp.		218		9,666
Mack-Cali Realty Corp.		411		9,659
Radian Group, Inc.		778		9,647
Cathay General Bancorp		339		9,604
Pebblebrook Hotel Trust		329		9,564
Cousins Properties, Inc.		920		9,550
Ryman Hospitality Properties, Inc.		185		9,524
Valley National Bancorp		987		9,416
Primerica, Inc.		208		9,262
Hudson Pacific Properties, Inc.		316		9,139
Washington Federal, Inc.		403		9,128
Janus Capital Group, Inc.		623		9,113
Selective Insurance Group, Inc.		242		8,860
BancorpSouth, Inc.		410		8,737
Physicians Realty Trust		466		8,658
Kennedy-Wilson Holdings, Inc.		394		8,629
DiamondRock Hospitality Co.		852		8,622
UMB Financial Corp.		167		8,622
Stifel Financial Corp.*		288		8,524
Retail Opportunity Investments Corp.		422		8,491
Washington Real Estate Investment Trust		289		8,442
PS Business Parks, Inc.		83		8,342
IBERIABANK Corp.		162		8,306
First Citizens BancShares, Inc. — Class A		33		8,285
EastGroup Properties, Inc.		137		8,271
Glacier Bancorp, Inc.		321		8,160
Sterling Bancorp		509		8,108
First Financial Bankshares, Inc.		272		8,046
Colony Capital, Inc. — Class A		474		7,949
Blackhawk Network Holdings, Inc.*		231		7,923
Capitol Federal Financial, Inc.		597		7,916
CVB Financial Corp.		451		7,870
WageWorks, Inc.*		152		7,693
Evercore Partners, Inc. — Class A		147		7,606
Hancock Holding Co.		331		7,600
Alexander & Baldwin, Inc.		207		7,593
Lexington Realty Trust		872		7,499
Pinnacle Financial Partners, Inc.		152		7,457
Texas Capital Bancshares, Inc.*		194		7,446
Xenia Hotels & Resorts, Inc.		474		7,404
South State Corp.		115		7,386
Columbia Banking System, Inc.		245		7,330
LTC Properties, Inc.		161		7,284
CoreSite Realty Corp.		103		7,211
BGC Partners, Inc. — Class A		778		7,041
Monogram Residential Trust, Inc.		707		6,971
New York REIT, Inc.		690		6,969
Community Bank System, Inc.		181		6,916
Financial Engines, Inc.		220		6,915
Argo Group International Holdings Ltd.		119		6,829
Chesapeake Lodging Trust		253		6,694
Trustmark Corp.		287		6,610
Pennsylvania Real Estate Investment Trust		293		6,402
Enstar Group Ltd.*		39		6,341
National Penn Bancshares, Inc.		595		6,331
American Assets Trust, Inc.		158		6,307
EverBank Financial Corp.		411		6,202
Select Income REIT		266		6,131
Hilltop Holdings, Inc.*		323		6,098
Eagle Bancorp, Inc.*		127		6,096
Old National Bancorp		497		6,058
Ramco-Gershenson Properties Trust		336		6,058

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 91

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Astoria Financial Corp.		382	$	6,051
PRA Group, Inc.*		205		6,025
First Midwest Bancorp, Inc.		331		5,965
Invesco Mortgage Capital, Inc. REIT		487		5,932
Aircastle Ltd.		265		5,894
Hatteras Financial Corp. REIT		411		5,877
Northwest Bancshares, Inc.		431		5,823
American Equity Investment Life Holding Co.		346		5,813
Simmons First National Corp. — Class A		127		5,724
Provident Financial Services, Inc.		282		5,694
International Bancshares Corp.		230		5,672
QTS Realty Trust, Inc. — Class A		119		5,638
Renasant Corp.		171		5,628
Parkway Properties, Inc.		359		5,622
STAG Industrial, Inc.		276		5,619
BofI Holding, Inc.*		261		5,570
Sabra Health Care REIT, Inc.		277		5,565
Horace Mann Educators Corp.		175		5,547
WisdomTree Investments, Inc.		484		5,532
Kemper Corp.		185		5,470
CYS Investments, Inc.		671		5,462
Potlatch Corp.		173		5,450
Government Properties Income Trust		299		5,337
Westamerica Bancorporation		108		5,261
BBCN Bancorp, Inc.		338		5,134
Chemical Financial Corp.		143		5,104
Independent Bank Corp.		111		5,102
NBT Bancorp, Inc.		187		5,040
Park National Corp.		55		4,950
FelCor Lodging Trust, Inc.		608		4,937
Essent Group Ltd.*		236		4,909
Kearny Financial Corp.		397		4,903
WesBanco, Inc.		165		4,902
Beneficial Bancorp, Inc.*		351		4,805
Hersha Hospitality Trust		224		4,780
Great Western Bancorp, Inc.		175		4,772
First Financial Bancorp		262		4,763
Union Bankshares Corp.		192		4,729
Redwood Trust, Inc.		358		4,683
Yadkin Financial Corp.		190		4,497
MBIA, Inc.*		504		4,460
STORE Capital Corp.		172		4,451
Summit Hotel Properties, Inc.		371		4,441
HFF, Inc. — Class A		161		4,432
Tompkins Financial Corp.		68		4,352
PennyMac Mortgage Investment Trust		317		4,324
Terreno Realty Corp.		183		4,291
Rexford Industrial Realty, Inc.		235		4,268
AMERISAFE, Inc.		81		4,256
WSFS Financial Corp.		130		4,228
ServisFirst Bancshares, Inc.		95		4,218
United Community Banks, Inc.		226		4,174
United Fire Group, Inc.		95		4,163
Third Point Reinsurance Ltd.*		358		4,070
FNFV Group*		375		4,069
Franklin Street Properties Corp.		382		4,053
Ameris Bancorp		137		4,052
Apollo Commercial Real Estate Finance, Inc.		248		4,042
Boston Private Financial Holdings, Inc.		353		4,042
Capstead Mortgage Corp.		407		4,025
St. Joe Co.*		234		4,013
Colony Starwood Homes		162		4,010
Nelnet, Inc. — Class A		101		3,975
LegacyTexas Financial Group, Inc.		202		3,969
FCB Financial Holdings, Inc. — Class A*		119		3,958
Infinity Property & Casualty Corp.		49		3,945
Talmer Bancorp, Inc. — Class A		218		3,944
S&T Bancorp, Inc.		148		3,812
Employers Holdings, Inc.		135		3,799
New Senior Investment Group, Inc.		367		3,780
Investors Real Estate Trust		520		3,774
Navigators Group, Inc.*		45		3,774
First Merchants Corp.		160		3,771
Banner Corp.		89		3,742
TowneBank		193		3,704
National General Holdings Corp.		170		3,670
Safety Insurance Group, Inc.		64		3,652
Stewart Information Services Corp.		97		3,519
iStar, Inc.*		363		3,507
Chatham Lodging Trust		163		3,493
Alexander’s, Inc.		9		3,425
Agree Realty Corp.		88		3,385
ARMOUR Residential REIT, Inc.		157		3,380
Berkshire Hills Bancorp, Inc.		125		3,361
First Commonwealth Financial Corp.		378		3,349
Cohen & Steers, Inc.		86		3,347
Universal Health Realty Income Trust		59		3,319
Banc of California, Inc.		189		3,308
City Holding Co.		69		3,297
Northfield Bancorp, Inc.		199		3,272
Brookline Bancorp, Inc.		297		3,270
Lakeland Financial Corp.		71		3,250
Meridian Bancorp, Inc.		233		3,243
Investment Technology Group, Inc.		145		3,205
Monmouth Real Estate Investment Corp.		268		3,187
American Capital Mortgage Investment Corp.		217		3,187
Oritani Financial Corp.		187		3,173
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		162		3,114
Wilshire Bancorp, Inc.		300		3,090
Ambac Financial Group, Inc.*		191		3,018
State Bank Financial Corp.		152		3,004
Hanmi Financial Corp.		136		2,995
Sandy Spring Bancorp, Inc.		105		2,922
Altisource Residential Corp.		243		2,916
CenterState Banks, Inc.		193		2,874

92 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Encore Capital Group, Inc.*		111	$	2,857
Rouse Properties, Inc.		155		2,849
Piper Jaffray Cos.*		57		2,825
Southside Bancshares, Inc.		108		2,816
Capital Bank Financial Corp. — Class A		91		2,807
Cardinal Financial Corp.		137		2,788
Maiden Holdings Ltd.		215		2,782
Greenhill & Company, Inc.		124		2,753
Walker & Dunlop, Inc.*		112		2,718
Flushing Financial Corp.		125		2,703
BNC Bancorp		127		2,682
Greenlight Capital Re Ltd. — Class A*		123		2,680
Customers Bancorp, Inc.*		113		2,670
PHH Corp.*		211		2,646
United Financial Bancorp, Inc.		210		2,644
Cedar Realty Trust, Inc.		361		2,610
CareTrust REIT, Inc.		204		2,591
Cass Information Systems, Inc.		49		2,565
1st Source Corp.		80		2,547
FBL Financial Group, Inc. — Class A		41		2,522
Dime Community Bancshares, Inc.		142		2,502
Pacific Premier Bancorp, Inc.*		117		2,500
Urstadt Biddle Properties, Inc. — Class A		118		2,472
Ladder Capital Corp. — Class A		198		2,465
Heartland Financial USA, Inc.		80		2,463
TriCo Bancshares		97		2,456
TrustCo Bank Corp. NY		404		2,448
Stock Yards Bancorp, Inc.		63		2,427
Universal Insurance Holdings, Inc.		136		2,421
Washington Trust Bancorp, Inc.		63		2,351
First Interstate BancSystem, Inc. — Class A		83		2,335
Community Trust Bancorp, Inc.		66		2,331
Central Pacific Financial Corp.		106		2,308
Diamond Hill Investment Group, Inc.		13		2,306
Enterprise Financial Services Corp.		85		2,298
Silver Bay Realty Trust Corp.		154		2,288
Virtus Investment Partners, Inc.		29		2,265
Ashford Hospitality Trust, Inc.		354		2,259
First Potomac Realty Trust		249		2,256
Heritage Financial Corp.		128		2,249
New York Mortgage Trust, Inc. REIT		464		2,199
Saul Centers, Inc.		41		2,174
Getty Realty Corp.		108		2,142
Moelis & Co. — Class A		75		2,117
First Busey Corp.		102		2,089
ConnectOne Bancorp, Inc.		127		2,076
National Western Life Group, Inc. — Class A		9		2,076
Anworth Mortgage Asset Corp.		445		2,074
National Storage Affiliates Trust		97		2,056
KCG Holdings, Inc. — Class A*		165		1,972
German American Bancorp, Inc.		61		1,964
HomeStreet, Inc.*		94		1,956
Bryn Mawr Bank Corp.		76		1,955
MainSource Financial Group, Inc.		92		1,940
Westwood Holdings Group, Inc.		33		1,935
Bridge Bancorp, Inc.		63		1,920
Clifton Bancorp, Inc.		124		1,875
Flagstar Bancorp, Inc.*		87		1,867
Forestar Group, Inc.*		143		1,865
Apollo Residential Mortgage, Inc.		136		1,825
CoBiz Financial, Inc.		154		1,820
CatchMark Timber Trust, Inc. — Class A		168		1,819
Cowen Group, Inc. — Class A*		473		1,802
Waterstone Financial, Inc.		131		1,792
Virtu Financial, Inc. — Class A		81		1,791
Western Asset Mortgage Capital Corp. REIT		178		1,789
BancFirst Corp.		31		1,768
Financial Institutions, Inc.		60		1,744
Resource Capital Corp.		153		1,721
RE/MAX Holdings, Inc. — Class A		50		1,715
International. FCStone, Inc.*		64		1,711
Federal Agricultural Mortgage Corp. — Class C		45		1,698
Heritage Insurance Holdings, Inc.		105		1,677
State National Companies, Inc.		133		1,676
Great Southern Bancorp, Inc.		45		1,671
Nationstar Mortgage Holdings, Inc.*		167		1,653
HomeTrust Bancshares, Inc.*		90		1,650
Univest Corporation of Pennsylvania		84		1,639
Lakeland Bancorp, Inc.		161		1,634
Blue Hills Bancorp, Inc.		119		1,627
Mercantile Bank Corp.		72		1,614
First Financial Corp.		47		1,608
Seacoast Banking Corporation of Florida*		101		1,595
InfraREIT, Inc.		93		1,586
First Bancorp		84		1,583
Dynex Capital, Inc.		238		1,583
AG Mortgage Investment Trust, Inc.		121		1,581
Anchor BanCorp Wisconsin, Inc.*		35		1,577
First of Long Island Corp.		55		1,568
Ashford Hospitality Prime, Inc.		133		1,552
Gladstone Commercial Corp.		94		1,540
First Defiance Financial Corp.		40		1,536
Peoples Bancorp, Inc.		78		1,524
Preferred Bank/Los Angeles CA		50		1,513
Citizens, Inc.*		208		1,506
CU Bancorp*		71		1,503
Bank Mutual Corp.		198		1,499
Opus Bank		44		1,496
Marcus & Millichap, Inc.*		58		1,473
Meta Financial Group, Inc.		32		1,459
Whitestone REIT — Class B		115		1,446
First BanCorp*		494		1,442
First Community Bancshares, Inc.		72		1,428
Independent Bank Corp.		98		1,426
Armada Hoffler Properties, Inc.		126		1,418
State Auto Financial Corp.		64		1,412

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 93

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Stonegate Bank		47	$	1,408
United Insurance Holdings Corp.		73		1,402
OM Asset Management plc		105		1,402
Altisource Portfolio Solutions S.A.*		56		1,352
Camden National Corp.		32		1,344
Pacific Continental Corp.		83		1,339
First NBC Bank Holding Co.*		65		1,338
HCI Group, Inc.		40		1,332
OFG Bancorp		189		1,321
Arlington Asset Investment Corp. — Class A		104		1,303
Houlihan Lokey, Inc.		52		1,295
Preferred Apartment Communities, Inc. — Class A		102		1,293
Arrow Financial Corp.		48		1,275
Park Sterling Corp.		191		1,274
Suffolk Bancorp		50		1,262
Fidelity & Guaranty Life		48		1,260
Ares Commercial Real Estate Corp.		115		1,259
West Bancorporation, Inc.		68		1,240
Bank of Marin Bancorp		25		1,231
United Community Financial Corp.		209		1,227
Walter Investment Management Corp.*		160		1,222
OneBeacon Insurance Group Ltd. — Class A		96		1,222
Southwest Bancorp, Inc.		81		1,219
RAIT Financial Trust		386		1,212
Horizon Bancorp		49		1,211
Fidelity Southern Corp.		75		1,203
QCR Holdings, Inc.		50		1,193
Peoples Financial Services Corp.		32		1,190
One Liberty Properties, Inc.		53		1,188
Federated National Holding Co.		60		1,180
World Acceptance Corp.*		30		1,138
TriState Capital Holdings, Inc.*		90		1,134
National Bankshares, Inc.		33		1,133
Ocwen Financial Corp.*		456		1,126
Independent Bank Group, Inc.		41		1,123
Ladenburg Thalmann Financial Services, Inc.*		447		1,118
Peapack Gladstone Financial Corp.		66		1,115
Republic Bancorp, Inc. — Class A		43		1,111
Global Indemnity plc — Class A*		35		1,090
First Connecticut Bancorp, Inc.		68		1,085
Easterly Government Properties, Inc.		58		1,074
CNB Financial Corp.		61		1,073
NMI Holdings, Inc. — Class A*		212		1,071
Territorial Bancorp, Inc.		41		1,068
Triumph Bancorp, Inc.*		67		1,061
Orchid Island Capital, Inc.		102		1,058
NexPoint Residential Trust, Inc.		80		1,047
Real Industry, Inc.*		120		1,044
Citizens & Northern Corp.		52		1,034
FRP Holdings, Inc.*		29		1,032
Heritage Commerce Corp.		103		1,031
Charter Financial Corp.		76		1,026
CorEnergy Infrastructure Trust, Inc.		51		1,026
GAMCO Investors, Inc. — Class A		27		1,001
UMH Properties, Inc.		100		992
Ames National Corp.		40		990
OceanFirst Financial Corp.		56		990
Baldwin & Lyons, Inc. — Class B		40		984
Independence Realty Trust, Inc.		137		975
Guaranty Bancorp		63		974
Fox Chase Bancorp, Inc.		50		966
American National Bankshares, Inc.		37		937
MidWestOne Financial Group, Inc.		34		933
BankFinancial Corp.		78		922
Sierra Bancorp		50		908
NewStar Financial, Inc.*		103		901
GAIN Capital Holdings, Inc.		137		899
National Interstate Corp.		30		898
First Bancorp, Inc.		46		897
Old Second Bancorp, Inc.*		125		896
Consolidated-Tomoka Land Co.		19		877
EMC Insurance Group, Inc.		34		872
Farmers Capital Bank Corp.		33		872
Bluerock Residential Growth REIT, Inc.		80		870
Enterprise Bancorp, Inc.		33		866
Sun Bancorp, Inc.*		41		849
First Business Financial Services, Inc.		37		848
Heritage Oaks Bancorp		107		834
Bar Harbor Bankshares		25		831
Acacia Research Corp.		217		822
Regional Management Corp.*		48		821
Bancorp, Inc.*		143		818
Atlas Financial Holdings, Inc.*		44		798
BSB Bancorp, Inc.*		35		786
Crawford & Co. — Class B		121		784
Trupanion, Inc.*		79		778
Penns Woods Bancorp, Inc.		20		771
Associated Capital Group, Inc. — Class A*		27		757
RMR Group, Inc. — Class A*		30		750
Cascade Bancorp*		131		748
Enova International, Inc.*		118		745
Tiptree Financial, Inc. — Class A		127		724
Hingham Institution for Savings		6		715
eHealth, Inc.*		76		714
Oppenheimer Holdings, Inc. — Class A		44		694
CommunityOne Bancorp*		52		691
Hallmark Financial Services, Inc.*		60		690
Capital City Bank Group, Inc.		46		671
PennyMac Financial Services, Inc. — Class A*		56		659
Merchants Bancshares, Inc.		22		654
Calamos Asset Management, Inc. — Class A		76		645
Kansas City Life Insurance Co.		16		640
C1 Financial, Inc.*		26		629
Franklin Financial Network, Inc.*		23		621
Access National Corp.		31		615

94 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
National Commerce Corp.*		26	$	614
Century Bancorp, Inc. — Class A		15		584
Marlin Business Services Corp.		37		529
Bear State Financial, Inc.*		57		528
Donegal Group, Inc. — Class A		36		518
Impac Mortgage Holdings, Inc.*		37		513
Independence Holding Co.		31		494
United Development Funding IV††		150		480
Green Bancorp, Inc.*		61		462
Pzena Investment Management, Inc. — Class A		53		400
On Deck Capital, Inc.*		50		390
Stonegate Mortgage Corp.*		62		356
Live Oak Bancshares, Inc.		20		300
Hampton Roads Bankshares, Inc.*		146		258
Allegiance Bancshares, Inc.*		13		239
Ashford, Inc.*		5		228
Great Ajax Corp.		18		201
BBX Capital Corp. — Class A*		12		192
People’s Utah Bancorp		12		190
Equity Bancshares, Inc. — Class A*		9		189
CIFC LLC		26		185
Medley Management, Inc. — Class A		25		138
ZAIS Group Holdings, Inc.*		18		87
Fifth Street Asset Management, Inc.		25		77
JG Wentworth Co. — Class A*		62		76
Altisource Asset Management Corp.*		4		47
RCS Capital Corp. — Class A*		269		3
Total Financial				1,832,733
Consumer, Non-cyclical - 14.8%
STERIS plc		362		25,721
West Pharmaceutical Services, Inc.		305		21,142
TreeHouse Foods, Inc.*		242		20,994
Post Holdings, Inc.*		261		17,949
WellCare Health Plans, Inc.*		187		17,344
Amsurg Corp. — Class A*		229		17,084
ABIOMED, Inc.*		177		16,781
Euronet Worldwide, Inc.*		220		16,305
Heartland Payment Systems, Inc.		155		14,968
PAREXEL International Corp.*		234		14,678
HealthSouth Corp.		388		14,600
Neurocrine Biosciences, Inc.*		363		14,356
Deluxe Corp.		212		13,247
Team Health Holdings, Inc.*		306		12,793
Cimpress N.V.*		139		12,606
Helen of Troy Ltd.*		121		12,546
Prestige Brands Holdings, Inc.*		222		11,853
Healthcare Services Group, Inc.		303		11,153
Myriad Genetics, Inc.*		295		11,041
Owens & Minor, Inc.		268		10,833
Molina Healthcare, Inc.*		167		10,770
Cantel Medical Corp.		146		10,419
Ultragenyx Pharmaceutical, Inc.*		163		10,319
Bright Horizons Family Solutions, Inc.*		159		10,300
Catalent, Inc.*		383		10,214
Cepheid*		305		10,174
LivaNova plc*		188		10,148
ACADIA Pharmaceuticals, Inc.*		358		10,009
NuVasive, Inc.*		205		9,973
Chemed Corp.		73		9,888
Impax Laboratories, Inc.*		304		9,734
Monro Muffler Brake, Inc.		135		9,648
B&G Foods, Inc.		269		9,364
Anacor Pharmaceuticals, Inc.*		174		9,300
Snyder’s-Lance, Inc.		294		9,249
Darling Ingredients, Inc.*		701		9,232
United Natural Foods, Inc.*		229		9,228
Sanderson Farms, Inc.		102		9,198
CEB, Inc.		142		9,191
Medicines Co.*		281		8,927
Lancaster Colony Corp.		79		8,735
Grand Canyon Education, Inc.*		200		8,548
Vector Group Ltd.		364		8,314
Pacira Pharmaceuticals, Inc.*		155		8,212
On Assignment, Inc.*		220		8,121
Integra LifeSciences Holdings Corp.*		120		8,083
Insulet Corp.*		241		7,992
Ligand Pharmaceuticals, Inc. — Class B*		74		7,925
Neogen Corp.*		157		7,904
Masimo Corp.*		186		7,782
ABM Industries, Inc.		238		7,690
Nektar Therapeutics*		558		7,673
Haemonetics Corp.*		219		7,660
Magellan Health, Inc.*		107		7,269
Boston Beer Company, Inc. — Class A*		39		7,218
Matthews International Corp. — Class A		140		7,205
Sotheby’s		264		7,057
Dean Foods Co.		401		6,945
Brink’s Co.		206		6,920
Globus Medical, Inc. — Class A*		291		6,911
Cal-Maine Foods, Inc.		133		6,904
Cardtronics, Inc.*		191		6,874
J&J Snack Foods Corp.		63		6,822
AMN Healthcare Services, Inc.*		202		6,789
WD-40 Co.		62		6,697
SUPERVALU, Inc.*		1,124		6,473
Tumi Holdings, Inc.*		238		6,383
Kite Pharma, Inc.*		139		6,381
Wright Medical Group N.V.*		379		6,291
FTI Consulting, Inc.*		177		6,284
ICU Medical, Inc.*		60		6,246
Travelport Worldwide Ltd.		448		6,120
Korn/Ferry International		214		6,054
Air Methods Corp.*		167		6,049
Prothena Corporation plc*		145		5,968
Fresh Del Monte Produce, Inc.		141		5,932
Novavax, Inc.*		1,138		5,872

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 95

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Ironwood Pharmaceuticals, Inc. — Class A*		535	$	5,853
Cambrex Corp.*		133		5,852
Advisory Board Co.*		180		5,805
Amedisys, Inc.*		120		5,801
Huron Consulting Group, Inc.*		98		5,703
Halyard Health, Inc.*		198		5,689
Universal Corp.		96		5,454
HMS Holdings Corp.*		376		5,396
Natus Medical, Inc.*		140		5,380
Select Medical Holdings Corp.*		446		5,267
ExamWorks Group, Inc.*		177		5,232
Fresh Market, Inc.*		183		5,221
CONMED Corp.		117		4,907
Ensign Group, Inc.		216		4,890
SpartanNash Co.		160		4,850
LifeLock, Inc.*		401		4,840
Acorda Therapeutics, Inc.*		182		4,814
Kindred Healthcare, Inc.		385		4,755
Emergent BioSolutions, Inc.*		129		4,689
DeVry Education Group, Inc.		271		4,680
TrueBlue, Inc.*		178		4,655
Affymetrix, Inc.*		328		4,595
Innoviva, Inc.		361		4,545
ARIAD Pharmaceuticals, Inc.*		711		4,543
Green Dot Corp. — Class A*		195		4,479
Radius Health, Inc.*		140		4,402
TESARO, Inc.*		99		4,359
Abaxis, Inc.		96		4,357
Portola Pharmaceuticals, Inc.*		212		4,325
FibroGen, Inc.*		203		4,322
Ophthotech Corp.*		101		4,269
Halozyme Therapeutics, Inc.*		450		4,262
Insperity, Inc.		82		4,242
Diplomat Pharmacy, Inc.*		154		4,220
Surgical Care Affiliates, Inc.*		91		4,211
ACCO Brands Corp.*		467		4,193
Analogic Corp.		53		4,188
Amicus Therapeutics, Inc.*		492		4,157
Cynosure, Inc. — Class A*		94		4,147
Merrimack Pharmaceuticals, Inc.*		491		4,110
MiMedx Group, Inc.*		461		4,029
NxStage Medical, Inc.*		268		4,017
Nevro Corp.*		71		3,994
TherapeuticsMD, Inc.*		617		3,949
Five Prime Therapeutics, Inc.*		96		3,900
EVERTEC, Inc.		279		3,900
Achillion Pharmaceuticals, Inc.*		499		3,852
Greatbatch, Inc.*		108		3,849
Exelixis, Inc.*		957		3,828
Andersons, Inc.		121		3,801
HealthEquity, Inc.*		154		3,799
Repligen Corp.*		139		3,728
Zeltiq Aesthetics, Inc.*		137		3,721
Sarepta Therapeutics, Inc.*		190		3,709
Team, Inc.*		122		3,706
Meridian Bioscience, Inc.		177		3,648
ZIOPHARM Oncology, Inc.*		488		3,621
Calavo Growers, Inc.		63		3,595
PRA Health Sciences, Inc.*		84		3,592
Rent-A-Center, Inc.		225		3,566
Depomed, Inc.*		255		3,552
Luminex Corp.*		183		3,550
Merit Medical Systems, Inc.*		187		3,458
AMAG Pharmaceuticals, Inc.*		146		3,416
Orthofix International N.V.*		80		3,322
Insmed, Inc.*		261		3,307
Apollo Education Group, Inc. — Class A*		401		3,294
Navigant Consulting, Inc.*		205		3,241
Coca-Cola Bottling Company Consolidated		20		3,196
Intra-Cellular Therapies, Inc.*		113		3,141
ImmunoGen, Inc.*		366		3,118
Inogen, Inc.*		67		3,014
Seaboard Corp.*		1		3,003
Dynavax Technologies Corp.*		156		3,001
Providence Service Corp.*		58		2,962
Anika Therapeutics, Inc.*		66		2,952
Central Garden & Pet Co. — Class A*		180		2,932
USANA Health Sciences, Inc.*		24		2,914
McGrath RentCorp		116		2,909
ICF International, Inc.*		83		2,853
PharMerica Corp.*		129		2,852
Tootsie Roll Industries, Inc.		81		2,843
LDR Holding Corp.*		108		2,753
Exact Sciences Corp.*		407		2,743
Capella Education Co.		52		2,737
National Healthcare Corp.		43		2,679
Inovio Pharmaceuticals, Inc.*		305		2,657
LendingTree, Inc.*		27		2,640
US Physical Therapy, Inc.		53		2,636
Spectranetics Corp.*		180		2,614
Cempra, Inc.*		149		2,610
Endologix, Inc.*		312		2,608
RPX Corp.*		230		2,590
NutriSystem, Inc.		123		2,567
Triple-S Management Corp. — Class B*		103		2,561
Pacific Biosciences of California, Inc.*		299		2,542
MacroGenics, Inc.*		134		2,513
TriNet Group, Inc.*		175		2,511
Resources Connection, Inc.		160		2,490
Omeros Corp.*		162		2,485
Viad Corp.		85		2,479
Acceleron Pharma, Inc.*		92		2,428
Alder Biopharmaceuticals, Inc.*		99		2,425
John B Sanfilippo & Son, Inc.		35		2,418
Kelly Services, Inc. — Class A		126		2,409
Cerus Corp.*		405		2,402

96 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Momenta Pharmaceuticals, Inc.*		259	$	2,393
Vascular Solutions, Inc.*		73		2,375
Atrion Corp.		6		2,372
Heron Therapeutics, Inc.*		124		2,355
PDL BioPharma, Inc.		697		2,321
SciClone Pharmaceuticals, Inc.*		211		2,321
Capital Senior Living Corp.*		125		2,315
HeartWare International, Inc.*		73		2,294
Strayer Education, Inc.*		47		2,291
Theravance Biopharma, Inc.*		121		2,275
Incorporated Research Holdings, Inc. — Class A*		55		2,267
Clovis Oncology, Inc.*		118		2,266
Supernus Pharmaceuticals, Inc.*		146		2,227
Inter Parfums, Inc.		72		2,225
Paylocity Holding Corp.*		66		2,161
Ennis, Inc.		110		2,151
Ingles Markets, Inc. — Class A		57		2,138
Coherus Biosciences, Inc.*		100		2,123
CBIZ, Inc.*		210		2,119
Weis Markets, Inc.		47		2,118
Quidel Corp.*		122		2,106
Lexicon Pharmaceuticals, Inc.*		176		2,103
Epizyme, Inc.*		173		2,097
Kforce, Inc.		105		2,056
Keryx Biopharmaceuticals, Inc.*		440		2,055
National Beverage Corp.*		48		2,031
Lannett Company, Inc.*		113		2,026
Arena Pharmaceuticals, Inc.*		1,028		2,025
Retrophin, Inc.*		148		2,022
AtriCure, Inc.*		120		2,020
Phibro Animal Health Corp. — Class A		74		2,001
Enanta Pharmaceuticals, Inc.*		68		1,997
Geron Corp.*		671		1,959
LHC Group, Inc.*		55		1,956
Accuray, Inc.*		335		1,936
Sage Therapeutics, Inc.*		59		1,892
Genomic Health, Inc.*		76		1,883
Relypsa, Inc.*		138		1,870
Heidrick & Struggles International, Inc.		78		1,849
Spectrum Pharmaceuticals, Inc.*		284		1,806
Invacare Corp.		137		1,804
Sangamo BioSciences, Inc.*		295		1,785
Revlon, Inc. — Class A*		49		1,784
Array BioPharma, Inc.*		599		1,767
OraSure Technologies, Inc.*		240		1,735
SP Plus Corp.*		71		1,708
Weight Watchers International, Inc.*		117		1,700
MannKind Corp.*		1,048		1,687
Smart & Final Stores, Inc.*		103		1,669
Performance Food Group Co.*		71		1,658
Universal American Corp.		230		1,642
Xencor, Inc.*		121		1,624
Chefs’ Warehouse, Inc.*		80		1,623
Albany Molecular Research, Inc.*		106		1,621
Amphastar Pharmaceuticals, Inc.*		135		1,620
NewLink Genetics Corp.*		88		1,602
Rockwell Medical, Inc.*		213		1,600
Carriage Services, Inc. — Class A		74		1,599
Insys Therapeutics, Inc.*		100		1,599
Cross Country Healthcare, Inc.*		137		1,593
Celldex Therapeutics, Inc.*		420		1,588
Quad/Graphics, Inc.		122		1,579
Raptor Pharmaceutical Corp.*		342		1,573
American Public Education, Inc.*		76		1,568
Omega Protein Corp.*		92		1,558
Hackett Group, Inc.		102		1,543
NeoGenomics, Inc.*		227		1,530
James River Group Holdings Ltd.		47		1,516
Vanda Pharmaceuticals, Inc.*		177		1,480
CorVel Corp.*		37		1,459
Eagle Pharmaceuticals, Inc.*		36		1,458
Forrester Research, Inc.		43		1,445
Adeptus Health, Inc. — Class A*		26		1,444
Medifast, Inc.		47		1,419
K12, Inc.*		143		1,414
Accelerate Diagnostics, Inc.*		98		1,408
Cardiovascular Systems, Inc.*		135		1,400
Atara Biotherapeutics, Inc.*		72		1,370
Dermira, Inc.*		66		1,365
Revance Therapeutics, Inc.*		78		1,362
Landauer, Inc.		41		1,356
Agenus, Inc.*		324		1,348
BioTelemetry, Inc.*		115		1,343
Healthways, Inc.*		132		1,332
Intersect ENT, Inc.*		70		1,330
AngioDynamics, Inc.*		107		1,315
Career Education Corp.*		288		1,308
Progenics Pharmaceuticals, Inc.*		296		1,291
TG Therapeutics, Inc.*		150		1,278
Monster Worldwide, Inc.*		386		1,258
CryoLife, Inc.		117		1,258
Corcept Therapeutics, Inc.*		263		1,231
XenoPort, Inc.*		271		1,222
Arrowhead Research Corp.*		253		1,219
STAAR Surgical Co.*		165		1,219
La Jolla Pharmaceutical Co.*		58		1,213
Tejon Ranch Co.*		58		1,193
MGP Ingredients, Inc.		49		1,188
Synergy Pharmaceuticals, Inc.*		425		1,173
Advaxis, Inc.*		129		1,165
Sucampo Pharmaceuticals, Inc. — Class A*		106		1,159
Almost Family, Inc.*		31		1,154
Akebia Therapeutics, Inc.*		127		1,144
Sagent Pharmaceuticals, Inc.*		94		1,144
Great Lakes Dredge & Dock Corp.*		256		1,142

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 97

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
CSS Industries, Inc.		40	$	1,117
Trevena, Inc.*		135		1,116
K2M Group Holdings, Inc.*		75		1,112
Seneca Foods Corp. — Class A*		32		1,112
ANI Pharmaceuticals, Inc.*		33		1,111
Infinity Pharmaceuticals, Inc.*		208		1,096
Natural Health Trends Corp.		33		1,094
Esperion Therapeutics, Inc.*		64		1,082
Loxo Oncology, Inc.*		39		1,066
ServiceSource International, Inc.*		250		1,065
Aerie Pharmaceuticals, Inc.*		87		1,058
Mirati Therapeutics, Inc.*		49		1,049
Cytokinetics, Inc.*		147		1,036
Immunomedics, Inc.*		410		1,025
Vectrus, Inc.*		45		1,024
SurModics, Inc.*		55		1,013
Spark Therapeutics, Inc.*		34		1,003
Utah Medical Products, Inc.		16		1,001
Editas Medicine, Inc.*		29		1,001
Chimerix, Inc.*		194		991
RTI Surgical, Inc.*		244		976
Lion Biotechnologies, Inc.*		191		970
Zogenix, Inc.*		105		970
Penumbra, Inc.*		21		966
Organovo Holdings, Inc.*		443		961
Seres Therapeutics, Inc.*		36		956
OvaScience, Inc.*		100		949
GenMark Diagnostics, Inc.*		179		943
Concert Pharmaceuticals, Inc.*		69		943
Otonomy, Inc.*		63		940
Galena Biopharma, Inc.*		687		934
PTC Therapeutics, Inc.*		144		927
Foundation Medicine, Inc.*		51		927
Farmer Brothers Co.*		33		920
Amplify Snack Brands, Inc.*		64		916
Franklin Covey Co.*		52		915
Elizabeth Arden, Inc.*		111		909
Surgery Partners, Inc.*		67		888
Nutraceutical International Corp.*		36		877
Karyopharm Therapeutics, Inc.*		98		874
BioCryst Pharmaceuticals, Inc.*		308		872
Civitas Solutions, Inc.*		50		872
Exactech, Inc.*		43		871
NanoString Technologies, Inc.*		57		868
Barrett Business Services, Inc.		30		863
Teligent, Inc.*		176		862
Oxford Immunotec Global plc*		86		852
Regulus Therapeutics, Inc.*		120		832
Ascent Capital Group, Inc. — Class A*		56		829
Vital Therapies, Inc.*		90		816
Aralez Pharmaceuticals, Inc.*		228		809
Natural Grocers by Vitamin Cottage, Inc.*		38		808
TransEnterix, Inc.*		190		808
Alarm.com Holdings, Inc.*		34		806
Paratek Pharmaceuticals, Inc.*		52		789
InVivo Therapeutics Holdings Corp.*		113		789
Cellular Biomedicine Group, Inc.*		42		783
ARC Document Solutions, Inc.*		173		779
Rigel Pharmaceuticals, Inc.*		374		778
LeMaitre Vascular, Inc.		50		776
Versartis, Inc.*		96		770
CRA International, Inc.*		39		766
Curis, Inc.*		472		760
MoneyGram International, Inc.*		124		759
CytRx Corp.*		281		753
Limoneira Co.		49		745
Sorrento Therapeutics, Inc.*		137		737
BioSpecifics Technologies Corp.*		21		731
OncoMed Pharmaceuticals, Inc.*		72		728
Bridgepoint Education, Inc.*		72		726
Village Super Market, Inc. — Class A		30		725
Blueprint Medicines Corp.*		40		722
Idera Pharmaceuticals, Inc.*		363		719
Foamix Pharmaceuticals Ltd.*		110		717
Genocea Biosciences, Inc.*		92		712
Cutera, Inc.*		63		709
Tetraphase Pharmaceuticals, Inc.*		153		708
Sequenom, Inc.*		501		706
RadNet, Inc.*		146		705
Aratana Therapeutics, Inc.*		126		696
Anthera Pharmaceuticals, Inc.*		192		695
BioTime, Inc.*		240		689
Axovant Sciences Ltd.*		60		689
Heska Corp.*		24		684
PFSweb, Inc.*		52		682
Adamas Pharmaceuticals, Inc.*		47		680
Pfenex, Inc.*		69		678
AAC Holdings, Inc.*		34		673
Electro Rent Corp.		71		657
Tandem Diabetes Care, Inc.*		75		653
National Research Corp. — Class A		42		653
Aimmune Therapeutics, Inc.*		48		651
Durect Corp.*		477		644
Civeo Corp.*		522		642
Everi Holdings, Inc.*		279		639
BioDelivery Sciences International, Inc.*		196		633
Immune Design Corp.*		48		624
BioScrip, Inc.*		291		623
Ocular Therapeutix, Inc.*		64		618
VIVUS, Inc.*		441		617
Ignyta, Inc.*		91		616
Navidea Biopharmaceuticals, Inc.*		640		604
CPI Card Group, Inc.		73		602
Ardelyx, Inc.*		76		591
Oncothyreon, Inc.*		462		587
Trovagene, Inc.*		126		586

98 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Antares Pharma, Inc.*		657	$	572
Avexis, Inc.*		20		545
Collegium Pharmaceutical, Inc.*		30		545
Flexion Therapeutics, Inc.*		59		543
SeaSpine Holdings Corp.*		36		527
Cara Therapeutics, Inc.*		84		522
Novocure Ltd.*		36		521
Applied Genetic Technologies Corp.*		37		517
CTI BioPharma Corp.*		965		513
Care.com, Inc.*		81		498
Collectors Universe, Inc.		30		498
Endocyte, Inc.*		159		493
Liberty Tax, Inc.		25		490
Glaukos Corp.*		29		489
Senomyx, Inc.*		186		484
ConforMIS, Inc.*		44		473
Inventure Foods, Inc.*		83		469
Zafgen, Inc.*		70		468
Addus HomeCare Corp.*		27		464
Osiris Therapeutics, Inc.		81		463
Aduro Biotech, Inc.*		36		461
Global Blood Therapeutics, Inc.*		29		460
Aclaris Therapeutics, Inc.*		24		455
Synutra International, Inc.*		90		447
T2 Biosystems, Inc.*		45		444
Alico, Inc.		16		442
Nature’s Sunshine Products, Inc.		45		432
Catalyst Pharmaceuticals, Inc.*		367		429
Avalanche Biotechnologies, Inc.*		83		429
Harvard Bioscience, Inc.*		142		429
CytomX Therapeutics, Inc.*		33		426
Nobilis Health Corp.*		136		424
Five Star Quality Care, Inc.*		183		419
Entellus Medical, Inc.*		23		418
Medgenics, Inc.*		94		414
Natera, Inc.*		42		400
Aegerion Pharmaceuticals, Inc.*		106		392
Universal Technical Institute, Inc.		90		388
Peregrine Pharmaceuticals, Inc.*		915		385
CorMedix, Inc.*		145		384
Teladoc, Inc.*		40		384
CDI Corp.		61		383
Vitae Pharmaceuticals, Inc.*		57		378
Pendrell Corp.*		706		374
Craft Brew Alliance, Inc.*		44		362
Genesis Healthcare, Inc.*		156		362
Unilife Corp.*		525		357
Dicerna Pharmaceuticals, Inc.*		64		343
REGENXBIO, Inc.*		31		335
Neff Corp. — Class A*		45		335
Edge Therapeutics, Inc.*		36		329
Bellicum Pharmaceuticals, Inc.*		35		327
Invitae Corp.*		31		317
Volt Information Sciences, Inc.*		41		309
Veracyte, Inc.*		57		308
Stemline Therapeutics, Inc.*		66		308
Assembly Biosciences, Inc.*		61		306
XOMA Corp.*		387		299
ChemoCentryx, Inc.*		119		296
Northwest Biotherapeutics, Inc.*		199		291
MyoKardia, Inc.*		27		289
Chiasma, Inc.*		31		284
Fibrocell Science, Inc.*		111		278
Second Sight Medical Products, Inc.*		57		275
Agile Therapeutics, Inc.*		44		273
Patriot National, Inc.*		35		270
Calithera Biosciences, Inc.*		47		267
Tokai Pharmaceuticals, Inc.*		47		264
Affimed N.V.*		70		262
Proteon Therapeutics, Inc.*		33		255
Cidara Therapeutics, Inc.*		20		254
Neos Therapeutics, Inc.*		23		248
Orexigen Therapeutics, Inc.*		434		244
Cambium Learning Group, Inc.*		55		235
Sientra, Inc.*		34		233
NantKwest, Inc.*		28		230
iRadimed Corp.*		12		230
Alimera Sciences, Inc.*		129		226
Lifeway Foods, Inc.*		20		217
Verastem, Inc.*		137		216
Voyager Therapeutics, Inc.*		24		210
Asterias Biotherapeutics, Inc.*		44		207
Nuvectra Corp.*		36		195
Pernix Therapeutics Holdings, Inc.*		185		194
Dimension Therapeutics, Inc.*		24		188
Alliance HealthCare Services, Inc.*		25		180
Corium International, Inc.*		45		174
XBiotech, Inc.*		17		161
EndoChoice Holdings, Inc.*		28		146
Invuity, Inc.*		20		144
Zynerba Pharmaceuticals, Inc.*		15		142
vTv Therapeutics, Inc. — Class A*		26		134
Threshold Pharmaceuticals, Inc.*		271		125
Abeona Therapeutics, Inc.*		48		123
aTyr Pharma, Inc.*		26		102
Lantheus Holdings, Inc.*		52		98
Arcadia Biosciences, Inc.*		35		97
Catabasis Pharmaceuticals, Inc.*		19		96
Synta Pharmaceuticals Corp.*		386		93
Tobira Therapeutics, Inc.*		11		90
Nivalis Therapeutics, Inc.*		21		88
Oncocyte Corp.*		12		55
Fairway Group Holdings Corp.*		96		34
Carbylan Therapeutics, Inc.*		52		33
SFX Entertainment, Inc.*		221		9
Total Consumer, Non-cyclical				1,463,093

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 99

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares			Value
Consumer, Cyclical - 9.4%
Vail Resorts, Inc.		154		$	20,591
Casey’s General Stores, Inc.		165			18,697
Burlington Stores, Inc.*		320			17,996
Pool Corp.		185			16,232
Texas Roadhouse, Inc. — Class A		297			12,943
American Eagle Outfitters, Inc.		775			12,918
Tenneco, Inc.*		248			12,773
Cracker Barrel Old Country Store, Inc.		82			12,519
Buffalo Wild Wings, Inc.*		81			11,998
Cheesecake Factory, Inc.		207			10,990
CalAtlantic Group, Inc.		327			10,929
Five Below, Inc.*		248			10,252
Big Lots, Inc.		226			10,236
Jack in the Box, Inc.		159			10,155
Allegiant Travel Co. — Class A		57	��		10,149
Hawaiian Holdings, Inc.*		203			9,580
Abercrombie & Fitch Co. — Class A		295			9,304
Dana Holding Corp.		656			9,243
Deckers Outdoor Corp.*		152			9,106
Cooper Tire & Rubber Co.		244			9,033
Pinnacle Entertainment, Inc.*		257			9,020
Steven Madden Ltd.*		239			8,853
Beacon Roofing Supply, Inc.*		211			8,654
Lithia Motors, Inc. — Class A		97			8,471
Bloomin’ Brands, Inc.		501			8,452
Express, Inc.*		389			8,328
G-III Apparel Group Ltd.*		169			8,262
Churchill Downs, Inc.		55			8,133
TRI Pointe Group, Inc.*		686			8,081
Wolverine World Wide, Inc.		438			8,068
Ascena Retail Group, Inc.*		729			8,063
DreamWorks Animation SKG, Inc. — Class A*		322			8,034
Core-Mark Holding Company, Inc.		98			7,993
Herman Miller, Inc.		253			7,814
Chico’s FAS, Inc.		574			7,617
Marriott Vacations Worldwide Corp.		110			7,425
Sonic Corp.		211			7,419
HNI Corp.		189			7,403
Children’s Place, Inc.		88			7,345
Columbia Sportswear Co.		122			7,331
HSN, Inc.		138			7,219
Liberty TripAdvisor Holdings, Inc. — Class A*		318			7,047
PriceSmart, Inc.		83			7,020
Boyd Gaming Corp.*		339			7,004
UniFirst Corp.		63			6,875
Genesco, Inc.*		95			6,864
DineEquity, Inc.		72			6,727
Papa John’s International, Inc.		123			6,665
Asbury Automotive Group, Inc.*		109			6,523
Mobile Mini, Inc.		195			6,438
Gentherm, Inc.*		152			6,322
G&K Services, Inc. — Class A		86			6,300
Dorman Products, Inc.*		114			6,204
Meritage Homes Corp.*		168			6,125
SeaWorld Entertainment, Inc.		290			6,107
Restoration Hardware Holdings, Inc.*		143			5,991
Group 1 Automotive, Inc.		99			5,810
La-Z-Boy, Inc.		217			5,802
Penn National Gaming, Inc.*		339			5,658
First Cash Financial Services, Inc.		120			5,528
Steelcase, Inc. — Class A		354			5,282
Caleres, Inc.		186			5,262
Interface, Inc. — Class A		281			5,210
ScanSource, Inc.*		129			5,209
Essendant, Inc.		163			5,205
Popeyes Louisiana Kitchen, Inc.*		98			5,102
La Quinta Holdings, Inc.*		402			5,025
American Axle & Manufacturing Holdings, Inc.*		322			4,956
KB Home		347			4,955
Guess?, Inc.		263			4,937
Cash America International, Inc.		125			4,830
Knoll, Inc.		207			4,482
iRobot Corp.*		126			4,448
SkyWest, Inc.		219			4,378
International Speedway Corp. — Class A		118			4,355
Cato Corp. — Class A		112			4,318
Select Comfort Corp.*		222			4,304
Diamond Resorts International, Inc.*		177			4,301
Krispy Kreme Doughnuts, Inc.*		275			4,287
Oxford Industries, Inc.		62			4,168
Cooper-Standard Holding, Inc.*		58			4,167
MDC Holdings, Inc.		166			4,160
Finish Line, Inc. — Class A		196			4,136
Virgin America, Inc.*		107			4,126
Buckle, Inc.		120			4,064
American Woodmark Corp.*		54			4,028
National CineMedia, Inc.		261			3,970
Bob Evans Farms, Inc.		85			3,969
TiVo, Inc.*		412			3,918
Belmond Ltd. — Class A*		411			3,900
Red Robin Gourmet Burgers, Inc.*		60			3,868
Universal Electronics, Inc.*		62			3,843
Wabash National Corp.*		288			3,801
BJ’s Restaurants, Inc.*		91			3,783
Wesco Aircraft Holdings, Inc.*		262			3,770
Dave & Buster’s Entertainment, Inc.*		97			3,762
Fiesta Restaurant Group, Inc.*		114			3,737
Denny’s Corp.*		358			3,709
Mattress Firm Holding Corp.*		87			3,688
Tailored Brands, Inc.		205			3,670
Cavco Industries, Inc.*		38			3,551
Hibbett Sports, Inc.*		98			3,518
Francesca’s Holdings Corp.*		180			3,449
Ethan Allen Interiors, Inc.		108			3,437
Vitamin Shoppe, Inc.*		111			3,437

100 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Zoe’s Kitchen, Inc.*		82	$	3,197
Meritor, Inc.*		392		3,160
Crocs, Inc.*		327		3,146
Carmike Cinemas, Inc.*		104		3,124
Outerwall, Inc.		83		3,070
Callaway Golf Co.		331		3,019
Standard Motor Products, Inc.		85		2,945
Motorcar Parts of America, Inc.*		77		2,924
Rush Enterprises, Inc. — Class A*		150		2,736
Ruth’s Hospitality Group, Inc.		148		2,725
Navistar International Corp.*		217		2,717
Pier 1 Imports, Inc.		383		2,685
Regis Corp.*		175		2,658
Barnes & Noble, Inc.		215		2,657
BMC Stock Holdings, Inc.*		159		2,643
ClubCorp Holdings, Inc.		187		2,625
Biglari Holdings, Inc.*		7		2,602
Sonic Automotive, Inc. — Class A		140		2,587
Nautilus, Inc.*		133		2,570
Winnebago Industries, Inc.		114		2,559
AMC Entertainment Holdings, Inc. — Class A		90		2,519
Tower International, Inc.		90		2,448
Interval Leisure Group, Inc.		166		2,397
Fred’s, Inc. — Class A		158		2,356
H&E Equipment Services, Inc.		133		2,331
Installed Building Products, Inc.*		84		2,235
Modine Manufacturing Co.*		203		2,235
Superior Industries International, Inc.		99		2,186
Carrols Restaurant Group, Inc.*		151		2,180
Douglas Dynamics, Inc.		95		2,176
Chuy’s Holdings, Inc.*		70		2,175
MarineMax, Inc.*		108		2,103
Scientific Games Corp. — Class A*		213		2,009
Taylor Morrison Home Corp. — Class A*		138		1,949
M/I Homes, Inc.*		104		1,940
Movado Group, Inc.		68		1,872
Haverty Furniture Companies, Inc.		87		1,841
Vera Bradley, Inc.*		90		1,831
Libbey, Inc.		93		1,730
Shoe Carnival, Inc.		64		1,725
Tile Shop Holdings, Inc.*		115		1,714
Zumiez, Inc.*		86		1,713
Del Frisco’s Restaurant Group, Inc.*		100		1,658
Kimball International, Inc. — Class B		146		1,657
Iconix Brand Group, Inc.*		203		1,634
DTS, Inc.*		75		1,634
Party City Holdco, Inc.*		107		1,609
Caesars Entertainment Corp.*		235		1,598
PetMed Express, Inc.		86		1,540
Tuesday Morning Corp.*		187		1,530
Hooker Furniture Corp.		46		1,511
Lumber Liquidators Holdings, Inc.*		115		1,509
Marcus Corp.		78		1,478
Conn’s, Inc.*		118		1,471
Bassett Furniture Industries, Inc.		46		1,466
Unifi, Inc.*		63		1,443
LGI Homes, Inc.*		59		1,428
Ruby Tuesday, Inc.*		264		1,420
Eros International plc*		120		1,381
Eldorado Resorts, Inc.*		120		1,373
Barnes & Noble Education, Inc.*		136		1,333
Isle of Capri Casinos, Inc.*		94		1,316
Veritiv Corp.*		35		1,304
Kirkland’s, Inc.		74		1,296
Daktronics, Inc.		163		1,288
Federal-Mogul Holdings Corp.*		129		1,275
Potbelly Corp.*		93		1,266
Stage Stores, Inc.		156		1,257
Malibu Boats, Inc. — Class A*		76		1,246
WCI Communities, Inc.*		66		1,226
Beazer Homes USA, Inc.*		139		1,212
William Lyon Homes — Class A*		83		1,203
Caesars Acquisition Co. — Class A*		196		1,200
Citi Trends, Inc.		66		1,177
PC Connection, Inc.		45		1,161
Culp, Inc.		44		1,154
Fox Factory Holding Corp.*		72		1,138
Century Communities, Inc.*		65		1,110
Flexsteel Industries, Inc.		25		1,092
NACCO Industries, Inc. — Class A		19		1,091
Planet Fitness, Inc. — Class A*		66		1,072
Ollie’s Bargain Outlet Holdings, Inc.*		44		1,031
America’s Car-Mart, Inc.*		41		1,025
Speedway Motorsports, Inc.		50		992
Titan International, Inc.		183		985
Winmark Corp.		10		980
Miller Industries, Inc.		48		973
Sequential Brands Group, Inc.*		152		971
Horizon Global Corp.*		77		969
Sportsman’s Warehouse Holdings, Inc.*		76		958
Perry Ellis International, Inc.*		52		957
Arctic Cat, Inc.		55		924
Stein Mart, Inc.		125		916
Habit Restaurants, Inc. — Class A*		49		913
Shake Shack, Inc. — Class A*		24		896
Metaldyne Performance Group, Inc.		53		891
Big 5 Sporting Goods Corp.		78		867
Strattec Security Corp.		15		861
Titan Machinery, Inc.*		74		855
Reading International, Inc. — Class A*		70		839
Monarch Casino & Resort, Inc.*		43		837
Hovnanian Enterprises, Inc. — Class A*		507		791
Destination XL Group, Inc.*		152		786
Build-A-Bear Workshop, Inc. — Class A*		60		779
Jamba, Inc.*		63		779
El Pollo Loco Holdings, Inc.*		57		760

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 101

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Weyco Group, Inc.		28	$	745
Freshpet, Inc.*		96		704
Green Brick Partners, Inc.*		92		698
Lifetime Brands, Inc.		46		693
West Marine, Inc.*		76		691
Intrawest Resorts Holdings, Inc.*		77		658
Cherokee, Inc.*		37		658
EZCORP, Inc. — Class A*		220		653
Noodles & Co.*		55		652
Duluth Holdings, Inc.*		33		643
Superior Uniform Group, Inc.		36		642
Wingstop, Inc.*		28		635
J Alexander’s Holdings, Inc.*		59		623
Performance Sports Group Ltd.*		192		611
AV Homes, Inc.*		53		602
Bojangles’, Inc.*		35		595
JAKKS Pacific, Inc.*		80		595
New Home Company, Inc.*		47		576
Bravo Brio Restaurant Group, Inc.*		65		504
Escalade, Inc.		42		494
Johnson Outdoors, Inc. — Class A		22		489
Systemax, Inc.*		55		482
Vince Holding Corp.*		76		481
Boot Barn Holdings, Inc.*		51		479
Kona Grill, Inc.*		36		466
Papa Murphy’s Holdings, Inc.*		39		466
Black Diamond, Inc.*		97		438
MCBC Holdings, Inc.*		30		423
VOXX International Corp. — Class A*		90		402
Container Store Group, Inc.*		67		393
Christopher & Banks Corp.*		158		378
Skullcandy, Inc.*		100		356
Tilly’s, Inc. — Class A*		52		348
Marine Products Corp.		45		342
Commercial Vehicle Group, Inc.*		127		337
Fogo De Chao, Inc.*		21		328
Castle Brands, Inc.*		283		266
Accuride Corp.*		165		256
Flex Pharma, Inc.*		23		252
Blue Bird Corp.*		22		239
Empire Resorts, Inc.*		13		177
Morgans Hotel Group Co.*		115		159
bebe stores, Inc.*		121		67
Total Consumer, Cyclical				923,116
Industrial - 9.0%
Berry Plastics Group, Inc.*		507		18,328
FEI Co.		176		15,666
Curtiss-Wright Corp.		191		14,453
Woodward, Inc.		277		14,409
Teledyne Technologies, Inc.*		150		13,221
EMCOR Group, Inc.		266		12,927
CLARCOR, Inc.		213		12,308
Tech Data Corp.*		156		11,976
Littelfuse, Inc.		96		11,818
Belden, Inc.		181		11,109
Generac Holdings, Inc.*		294		10,949
EnerSys		189		10,531
Louisiana-Pacific Corp.*		605		10,358
Dycom Industries, Inc.*		145		9,377
XPO Logistics, Inc.*		304		9,333
Coherent, Inc.*		101		9,283
Universal Display Corp.*		171		9,251
Rexnord Corp.*		432		8,734
Masonite International Corp.*		128		8,384
Esterline Technologies Corp.*		128		8,201
Barnes Group, Inc.		233		8,162
HEICO Corp. — Class A		169		8,044
Hillenbrand, Inc.		267		7,997
Granite Construction, Inc.		167		7,983
IMAX Corp.*		256		7,959
Moog, Inc. — Class A*		174		7,948
Sanmina Corp.*		337		7,880
Tetra Tech, Inc.		256		7,633
Proto Labs, Inc.*		99		7,632
Matson, Inc.		184		7,392
Applied Industrial Technologies, Inc.		170		7,377
Universal Forest Products, Inc.		85		7,295
RBC Bearings, Inc.*		99		7,253
KLX, Inc.*		224		7,199
Mueller Industries, Inc.		242		7,120
Vishay Intertechnology, Inc.		575		7,021
John Bean Technologies Corp.		124		6,995
Swift Transportation Co. — Class A*		374		6,968
Knight Transportation, Inc.		266		6,956
Simpson Manufacturing Company, Inc.		179		6,832
Itron, Inc.*		163		6,800
Mueller Water Products, Inc. — Class A		683		6,748
Watts Water Technologies, Inc. — Class A		120		6,616
Advanced Energy Industries, Inc.*		190		6,610
Drew Industries, Inc.		102		6,575
Franklin Electric Company, Inc.		202		6,498
Actuant Corp. — Class A		253		6,252
Hub Group, Inc. — Class A*		153		6,241
Headwaters, Inc.*		313		6,210
AZZ, Inc.		109		6,169
Trex Company, Inc.*		128		6,135
Smith & Wesson Holding Corp.*		228		6,069
MSA Safety, Inc.		124		5,995
Forward Air Corp.		131		5,937
MasTec, Inc.*		283		5,728
Plexus Corp.*		143		5,651
Exponent, Inc.		110		5,611
EnPro Industries, Inc.		97		5,595
OSI Systems, Inc.*		84		5,501
Brady Corp. — Class A		203		5,449
Apogee Enterprises, Inc.		124		5,442

102 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Sturm Ruger & Company, Inc.		79	$	5,402
Nordic American Tankers Ltd.		379		5,341
HEICO Corp.		87		5,231
Benchmark Electronics, Inc.*		222		5,117
Werner Enterprises, Inc.		188		5,106
KapStone Paper and Packaging Corp.		366		5,069
Comfort Systems USA, Inc.		158		5,020
Kaman Corp.		116		4,952
Knowles Corp.*		371		4,890
AAON, Inc.		174		4,872
Fabrinet*		150		4,853
II-VI, Inc.*		223		4,841
Methode Electronics, Inc.		163		4,766
Rogers Corp.*		79		4,730
Briggs & Stratton Corp.		189		4,521
Albany International Corp. — Class A		120		4,511
Atlas Air Worldwide Holdings, Inc.*		106		4,481
TASER International, Inc.*		227		4,456
Scorpio Tankers, Inc.		759		4,426
Aerojet Rocketdyne Holdings, Inc.*		266		4,357
ESCO Technologies, Inc.		111		4,327
Greif, Inc. — Class A		131		4,290
Standex International Corp.		54		4,202
Lindsay Corp.		57		4,081
US Ecology, Inc.		92		4,063
Badger Meter, Inc.		61		4,057
Tennant Co.		78		4,015
Primoris Services Corp.		165		4,010
Heartland Express, Inc.		214		3,970
Newport Corp.*		169		3,887
Rofin-Sinar Technologies, Inc.*		120		3,866
Gibraltar Industries, Inc.*		131		3,747
Astec Industries, Inc.		80		3,734
US Concrete, Inc.*		62		3,694
Cubic Corp.		92		3,676
Astronics Corp.*		94		3,586
Federal Signal Corp.		265		3,514
AAR Corp.		151		3,514
Ship Finance International Ltd.		252		3,501
Boise Cascade Co.*		168		3,481
Air Transport Services Group, Inc.*		224		3,445
Encore Wire Corp.		88		3,426
Echo Global Logistics, Inc.*		126		3,422
CIRCOR International, Inc.		73		3,386
TriMas Corp.*		192		3,364
Aegion Corp. — Class A*		156		3,290
Sun Hydraulics Corp.		96		3,186
Altra Industrial Motion Corp.		112		3,111
Greenbrier Companies, Inc.		112		3,096
Advanced Drainage Systems, Inc.		143		3,046
Saia, Inc.*		107		3,012
Multi-Color Corp.		54		2,881
Chart Industries, Inc.*		130		2,824
Hyster-Yale Materials Handling, Inc.		40		2,664
Summit Materials, Inc. — Class A*		135		2,626
Raven Industries, Inc.		162		2,595
General Cable Corp.		208		2,540
Lydall, Inc.*		78		2,537
Quanex Building Products Corp.		144		2,500
Continental Building Products, Inc.*		134		2,487
Tutor Perini Corp.*		159		2,471
AVX Corp.		196		2,464
Patrick Industries, Inc.*		54		2,451
Builders FirstSource, Inc.*		215		2,423
Griffon Corp.		156		2,410
ArcBest Corp.		111		2,396
CTS Corp.		152		2,392
Insteel Industries, Inc.		78		2,384
FARO Technologies, Inc.*		74		2,384
Aerovironment, Inc.*		84		2,379
Alamo Group, Inc.		42		2,340
Global Brass & Copper Holdings, Inc.		91		2,270
DHT Holdings, Inc.		394		2,269
MYR Group, Inc.*		89		2,235
TAL International Group, Inc.*		141		2,177
Kadant, Inc.		47		2,123
Gorman-Rupp Co.		81		2,100
GSI Group, Inc.*		146		2,067
Blount International, Inc.*		206		2,056
PGT, Inc.*		203		1,998
Nortek, Inc.*		41		1,980
Haynes International, Inc.		53		1,935
Argan, Inc.		55		1,934
Marten Transport Ltd.		102		1,909
Harsco Corp.		340		1,853
Checkpoint Systems, Inc.*		179		1,811
Trinseo S.A.*		49		1,803
Park-Ohio Holdings Corp.		42		1,798
PowerSecure International, Inc.*		95		1,776
Mistras Group, Inc.*		71		1,759
National Presto Industries, Inc.		21		1,759
American Railcar Industries, Inc.		43		1,751
Stoneridge, Inc.*		119		1,733
GasLog Ltd.		177		1,724
Frontline Ltd.		203		1,699
TTM Technologies, Inc.*		251		1,669
Tredegar Corp.		106		1,666
NCI Building Systems, Inc.*		115		1,633
Chase Corp.		30		1,578
NN, Inc.		114		1,560
TimkenSteel Corp.		169		1,538
GP Strategies Corp.*		55		1,507
Roadrunner Transportation Systems, Inc.*		119		1,483
Teekay Tankers Ltd. — Class A		404		1,483
Textainer Group Holdings Ltd.		94		1,395
Park Electrochemical Corp.		87		1,393

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 103

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Kimball Electronics, Inc.*		124	$	1,385
Tidewater, Inc.		200		1,366
Hornbeck Offshore Services, Inc.*		136		1,350
Columbus McKinnon Corp.		85		1,340
Myers Industries, Inc.		104		1,337
Multi Packaging Solutions International Ltd.*		81		1,315
YRC Worldwide, Inc.*		139		1,295
Ply Gem Holdings, Inc.*		92		1,293
VSE Corp.		18		1,222
Celadon Group, Inc.		116		1,216
Covenant Transportation Group, Inc. — Class A*		50		1,210
ZAGG, Inc.*		133		1,198
NVE Corp.		21		1,187
Powell Industries, Inc.		39		1,163
Mesa Laboratories, Inc.		12		1,156
Casella Waste Systems, Inc. — Class A*		168		1,126
AEP Industries, Inc.		17		1,122
LSI Industries, Inc.		92		1,081
Applied Optoelectronics, Inc.*		72		1,074
LSB Industries, Inc.*		84		1,071
Kratos Defense & Security Solutions, Inc.*		210		1,040
Milacron Holdings Corp.*		62		1,022
Dorian LPG Ltd.*		106		996
Fluidigm Corp.*		122		985
DXP Enterprises, Inc.*		53		931
Hurco Companies, Inc.		28		924
Multi-Fineline Electronix, Inc.*		39		905
American Science & Engineering, Inc.		32		886
Graham Corp.		43		856
FreightCar America, Inc.		52		810
LB Foster Co. — Class A		44		799
USA Truck, Inc.*		42		791
Sparton Corp.*		43		774
CECO Environmental Corp.		123		764
Control4 Corp.*		94		748
Vishay Precision Group, Inc.*		53		743
Vicor Corp.*		70		734
Ducommun, Inc.*		47		717
CAI International, Inc.*		73		705
Olympic Steel, Inc.		39		675
Bel Fuse, Inc. — Class B		44		642
Ardmore Shipping Corp.		76		642
Orion Marine Group, Inc.*		119		616
Universal Truckload Services, Inc.		36		593
NV5 Global, Inc.*		22		590
Navios Maritime Acquisition Corp.		348		553
TRC Companies, Inc.*		73		529
Heritage-Crystal Clean, Inc.*		53		527
Hill International, Inc.*		155		522
Gener8 Maritime, Inc.*		72		508
Imprivata, Inc.*		39		493
Lawson Products, Inc.*		25		490
Allied Motion Technologies, Inc.		27		486
Radiant Logistics, Inc.*		133		475
Navios Maritime Holdings, Inc.		396		447
Omega Flex, Inc.		12		417
Core Molding Technologies, Inc.*		33		412
PAM Transportation Services, Inc.*		13		400
Scorpio Bulkers, Inc.*		119		390
Northwest Pipe Co.*		41		378
Nordic American Offshore Ltd.		80		358
Twin Disc, Inc.		35		355
Handy & Harman Ltd.*		12		328
Power Solutions International, Inc.*		20		276
Fenix Parts, Inc.*		59		271
Xerium Technologies, Inc.*		47		245
Golden Ocean Group Ltd.*		284		197
Safe Bulkers, Inc.		161		129
NL Industries, Inc.*		33		75
Eagle Bulk Shipping, Inc.*		94		34
Ultrapetrol Bahamas Ltd.*		91		25
Total Industrial				885,322
Technology - 7.8%
Tyler Technologies, Inc.*		143		18,392
Microsemi Corp.*		466		17,851
Manhattan Associates, Inc.*		313		17,800
Guidewire Software, Inc.*		298		16,235
EPAM Systems, Inc.*		208		15,532
MAXIMUS, Inc.		280		14,739
Cavium, Inc.*		235		14,372
Fair Isaac Corp.		132		14,004
Take-Two Interactive Software, Inc.*		359		13,524
Aspen Technology, Inc.*		362		13,079
j2 Global, Inc.		205		12,623
Blackbaud, Inc.		199		12,515
Synaptics, Inc.*		156		12,439
Integrated Device Technology, Inc.*		581		11,876
Convergys Corp.		420		11,663
SYNNEX Corp.		122		11,295
Qlik Technologies, Inc.*		388		11,221
CACI International, Inc. — Class A*		103		10,990
Monolithic Power Systems, Inc.		168		10,692
Science Applications International Corp.		195		10,401
ACI Worldwide, Inc.*		496		10,312
Fairchild Semiconductor International, Inc. — Class A*		494		9,880
Cirrus Logic, Inc.*		269		9,794
Medidata Solutions, Inc.*		235		9,096
NetScout Systems, Inc.*		391		8,981
Proofpoint, Inc.*		167		8,980
Verint Systems, Inc.*		260		8,679
Mentor Graphics Corp.		425		8,640
MKS Instruments, Inc.		227		8,546
Electronics for Imaging, Inc.*		199		8,436
CommVault Systems, Inc.*		192		8,289
Silicon Laboratories, Inc.*		181		8,138

104 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Entegris, Inc.*		595	$	8,103
Diebold, Inc.		275		7,950
Advanced Micro Devices, Inc.*		2,702		7,701
Intersil Corp. — Class A		566		7,567
Cornerstone OnDemand, Inc.*		229		7,503
ExlService Holdings, Inc.*		141		7,304
Rovi Corp.*		355		7,281
Cray, Inc.*		173		7,250
MicroStrategy, Inc. — Class A*		40		7,189
Acxiom Corp.*		332		7,118
Tessera Technologies, Inc.		223		6,913
Syntel, Inc.*		135		6,741
Rambus, Inc.*		490		6,738
FleetMatics Group plc*		162		6,595
CSG Systems International, Inc.		139		6,277
Power Integrations, Inc.		125		6,208
Semtech Corp.*		282		6,201
Imperva, Inc.*		120		6,060
Ambarella, Inc.*		133		5,945
Stratasys Ltd.*		216		5,599
Demandware, Inc.*		142		5,551
Inphi Corp.*		163		5,434
Super Micro Computer, Inc.*		157		5,351
Synchronoss Technologies, Inc.*		165		5,336
Bottomline Technologies de, Inc.*		174		5,305
Progress Software Corp.*		215		5,186
BroadSoft, Inc.*		124		5,003
Sykes Enterprises, Inc.*		165		4,980
QLogic Corp.*		370		4,973
Paycom Software, Inc.*		134		4,770
Envestnet, Inc.*		175		4,760
Insight Enterprises, Inc.*		165		4,726
Virtusa Corp.*		126		4,720
RealPage, Inc.*		224		4,668
Ebix, Inc.		114		4,650
M/A-COM Technology Solutions Holdings, Inc.*		100		4,379
Cabot Microelectronics Corp.		105		4,296
Luxoft Holding, Inc.*		78		4,292
Omnicell, Inc.*		154		4,292
MaxLinear, Inc. — Class A*		220		4,070
Monotype Imaging Holdings, Inc.		170		4,066
Callidus Software, Inc.*		235		3,920
Pegasystems, Inc.		152		3,858
MTS Systems Corp.		63		3,834
ManTech International Corp. — Class A		111		3,551
HubSpot, Inc.*		80		3,490
Veeco Instruments, Inc.*		171		3,331
Quality Systems, Inc.		212		3,231
Diodes, Inc.*		159		3,196
SPS Commerce, Inc.*		70		3,006
Brooks Automation, Inc.		286		2,974
Mercury Systems, Inc.*		145		2,944
Photronics, Inc.*		282		2,936
Lattice Semiconductor Corp.*		496		2,817
InvenSense, Inc. — Class A*		329		2,764
Qualys, Inc.*		106		2,683
Interactive Intelligence Group, Inc.*		73		2,659
Ultratech, Inc.*		117		2,555
2U, Inc.*		112		2,531
Computer Programs & Systems, Inc.		48		2,502
Amkor Technology, Inc.*		420		2,474
Applied Micro Circuits Corp.*		374		2,416
inContact, Inc.*		261		2,320
Silver Spring Networks, Inc.*		155		2,286
Globant S.A.*		70		2,160
Cvent, Inc.*		99		2,119
TeleTech Holdings, Inc.		75		2,082
Epiq Systems, Inc.		137		2,058
CEVA, Inc.*		87		1,958
pdvWireless, Inc.*		55		1,889
Xura, Inc.*		96		1,888
Rudolph Technologies, Inc.*		136		1,858
FormFactor, Inc.*		244		1,774
Nimble Storage, Inc.*		215		1,686
Pure Storage, Inc. — Class A*		122		1,670
Unisys Corp.*		212		1,632
Xcerra Corp.*		250		1,630
SciQuest, Inc.*		117		1,624
Nanometrics, Inc.*		102		1,616
Actua Corp.*		172		1,557
PDF Solutions, Inc.*		115		1,539
Glu Mobile, Inc.*		511		1,441
Engility Holdings, Inc.*		76		1,426
LivePerson, Inc.*		242		1,416
Vocera Communications, Inc.*		109		1,390
Axcelis Technologies, Inc.*		482		1,350
Press Ganey Holdings, Inc.*		44		1,324
Tangoe, Inc.*		166		1,310
Cohu, Inc.		110		1,307
Sapiens International Corporation N.V.		109		1,306
InnerWorkings, Inc.*		158		1,256
Cascade Microtech, Inc.*		58		1,196
PROS Holdings, Inc.*		101		1,191
IXYS Corp.		105		1,178
Mattson Technology, Inc.*		318		1,161
Alpha & Omega Semiconductor Ltd.*		94		1,114
Benefitfocus, Inc.*		33		1,101
Silicon Graphics International Corp.*		148		1,054
Sigma Designs, Inc.*		150		1,020
Digi International, Inc.*		106		1,000
QAD, Inc. — Class A		47		999
Immersion Corp.*		119		983
Digimarc Corp.*		32		970
Exar Corp.*		167		960
Model N, Inc.*		89		959
American Software, Inc. — Class A		106		954

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 105

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
KEYW Holding Corp.*		142	$	943
Avid Technology, Inc.*		137		926
Five9, Inc.*		101		898
DSP Group, Inc.*		95		866
Brightcove, Inc.*		138		861
Eastman Kodak Co.*		79		857
MobileIron, Inc.*		189		854
TubeMogul, Inc.*		66		854
Datalink Corp.*		87		795
Seachange International, Inc.*		142		784
OPOWER, Inc.*		111		756
Jive Software, Inc.*		198		748
Ultra Clean Holdings, Inc.*		134		718
Ciber, Inc.*		335		707
Varonis Systems, Inc.*		38		694
Agilysys, Inc.*		65		664
Quantum Corp.*		1,038		633
New Relic, Inc.*		24		626
Carbonite, Inc.*		77		614
Evolent Health, Inc. — Class A*		56		591
ExOne Co.*		45		591
Barracuda Networks, Inc.*		35		539
Everyday Health, Inc.*		92		515
Kopin Corp.*		306		508
Castlight Health, Inc. — Class B*		143		476
EMCORE Corp.*		94		470
Park City Group, Inc.*		46		416
Amber Road, Inc.*		75		406
MINDBODY, Inc. — Class A*		30		400
Guidance Software, Inc.*		93		400
Instructure, Inc.*		21		377
Hortonworks, Inc.*		32		362
Workiva, Inc.*		31		361
Appfolio, Inc. — Class A*		24		294
Digital Turbine, Inc.*		239		284
Imation Corp.*		148		229
Xactly Corp.*		33		226
Violin Memory, Inc.*		386		202
Apigee Corp.*		22		183
Code Rebel Corp.*		5		23
Total Technology				769,100
Communications - 4.3%
ViaSat, Inc.*		181		13,301
Houghton Mifflin Harcourt Co.*		530		10,568
WebMD Health Corp. — Class A*		160		10,022
Ciena Corp.*		524		9,967
Infinera Corp.*		565		9,075
Sinclair Broadcast Group, Inc. — Class A		281		8,640
InterDigital, Inc.		153		8,514
Finisar Corp.*		441		8,044
GrubHub, Inc.*		319		8,017
Cogent Communications Holdings, Inc.		196		7,650
Meredith Corp.		156		7,409
New York Times Co. — Class A		584		7,277
Time, Inc.		465		7,180
Shutterfly, Inc.*		151		7,001
Media General, Inc.*		407		6,638
Stamps.com, Inc.*		61		6,483
Polycom, Inc.*		580		6,467
Anixter International, Inc.*		121		6,305
comScore, Inc.*		208		6,249
Plantronics, Inc.		151		5,918
Nexstar Broadcasting Group, Inc. — Class A		133		5,888
NeuStar, Inc. — Class A*		235		5,781
Consolidated Communications Holdings, Inc.		214		5,513
NETGEAR, Inc.*		136		5,490
Shenandoah Telecommunications Co.		205		5,484
LogMeIn, Inc.*		106		5,349
DigitalGlobe, Inc.*		308		5,328
West Corp.		222		5,066
NIC, Inc.		278		5,012
ADTRAN, Inc.		243		4,913
Zendesk, Inc.*		228		4,773
Infoblox, Inc.*		254		4,343
MDC Partners, Inc. — Class A		184		4,342
Ubiquiti Networks, Inc.*		130		4,325
Scholastic Corp.		113		4,223
Wayfair, Inc. — Class A*		91		3,933
EW Scripps Co. — Class A		251		3,913
8x8, Inc.*		374		3,762
Web.com Group, Inc.*		186		3,687
AVG Technologies N.V.*		174		3,611
Vonage Holdings Corp.*		788		3,601
Gigamon, Inc.*		116		3,598
RingCentral, Inc. — Class A*		227		3,575
Cincinnati Bell, Inc.*		890		3,444
Atlantic Tele-Network, Inc.		44		3,337
Windstream Holdings, Inc.		428		3,287
Perficient, Inc.*		150		3,258
Ixia*		257		3,202
New Media Investment Group, Inc.		190		3,162
Gray Television, Inc.*		269		3,153
Ruckus Wireless, Inc.*		320		3,139
Shutterstock, Inc.*		83		3,049
Globalstar, Inc.*		2,021		2,971
Marketo, Inc.*		148		2,896
Gogo, Inc.*		258		2,841
CalAmp Corp.*		154		2,761
Iridium Communications, Inc.*		349		2,747
Quotient Technology, Inc.*		259		2,745
General Communication, Inc. — Class A*		148		2,711
Endurance International Group Holdings, Inc.*		249		2,622
Bankrate, Inc.*		283		2,595
ORBCOMM, Inc.*		254		2,573
EarthLink Holdings Corp.		438		2,483
HealthStream, Inc.*		107		2,364

106 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Inteliquent, Inc.		142	$	2,279
World Wrestling Entertainment, Inc. — Class A		128		2,260
Oclaro, Inc.*		415		2,241
VASCO Data Security International, Inc.*		134		2,064
FTD Companies, Inc.*		78		2,048
ShoreTel, Inc.*		274		2,039
Entravision Communications Corp. — Class A		271		2,016
Q2 Holdings, Inc.*		83		1,995
Rubicon Project, Inc.*		109		1,993
Loral Space & Communications, Inc.*		56		1,967
ePlus, Inc.*		24		1,932
Lands’ End, Inc.*		75		1,913
XO Group, Inc.*		112		1,798
Spok Holdings, Inc.		99		1,733
GTT Communications, Inc.*		104		1,720
Global Eagle Entertainment, Inc.*		197		1,678
NeoPhotonics Corp.*		119		1,671
Comtech Telecommunications Corp.		69		1,613
Wix.com Ltd.*		79		1,601
Sonus Networks, Inc.*		210		1,581
Textura Corp.*		84		1,565
DHI Group, Inc.*		189		1,525
Angie’s List, Inc.*		186		1,501
Chegg, Inc.*		324		1,445
Lionbridge Technologies, Inc.*		273		1,381
Intralinks Holdings, Inc.*		171		1,347
Calix, Inc.*		189		1,340
Harmonic, Inc.*		409		1,337
FairPoint Communications, Inc.*		89		1,324
Extreme Networks, Inc.*		425		1,322
RetailMeNot, Inc.*		163		1,306
Blue Nile, Inc.		50		1,286
Lumos Networks Corp.*		97		1,245
Straight Path Communications, Inc. — Class B*		40		1,241
Journal Media Group, Inc.		103		1,232
Boingo Wireless, Inc.*		155		1,197
Safeguard Scientifics, Inc.*		88		1,166
TrueCar, Inc.*		208		1,163
Hawaiian Telcom Holdco, Inc.*		49		1,154
Entercom Communications Corp. — Class A*		108		1,143
IDT Corp. — Class B		71		1,107
ChannelAdvisor Corp.*		92		1,035
Daily Journal Corp.*		5		978
Zix Corp.*		244		959
Alliance Fiber Optic Products, Inc.*		62		917
Blucora, Inc.*		174		898
VirnetX Holding Corp.*		192		881
Black Box Corp.		65		876
Tribune Publishing Co.		112		865
A10 Networks, Inc.*		144		852
Reis, Inc.		36		848
1-800-Flowers.com, Inc. — Class A*		106		835
Bazaarvoice, Inc.*		259		816
Central European Media Enterprises Ltd. — Class A*		313		798
Clearfield, Inc.*		48		771
Crown Media Holdings, Inc. — Class A*		147		747
Etsy, Inc.*		85		740
Overstock.com, Inc.*		51		733
United Online, Inc.*		62		715
RigNet, Inc.*		52		711
Telenav, Inc.*		120		708
NTELOS Holdings Corp.*		74		681
Box, Inc. — Class A*		55		674
KVH Industries, Inc.*		68		649
Saga Communications, Inc. — Class A		16		641
Internap Corp.*		233		636
TechTarget, Inc.*		83		616
Marchex, Inc. — Class B		138		614
Hemisphere Media Group, Inc.*		43		565
Liquidity Services, Inc.*		102		528
Harte-Hanks, Inc.		205		519
QuinStreet, Inc.*		151		516
Aerohive Networks, Inc.*		99		494
Limelight Networks, Inc.*		258		467
Rapid7, Inc.*		34		444
HC2 Holdings, Inc.*		112		428
Rocket Fuel, Inc.*		128		403
Preformed Line Products Co.		11		402
RealNetworks, Inc.*		98		398
Marin Software, Inc.*		127		384
Intelsat S.A.*		130		328
Townsquare Media, Inc. — Class A*		29		325
Cumulus Media, Inc. — Class A*		694		322
Novatel Wireless, Inc.*		160		283
Sizmek, Inc.*		91		264
EVINE Live, Inc.*		212		248
Travelzoo, Inc.*		30		244
ModusLink Global Solutions, Inc.*		160		235
Corindus Vascular Robotics, Inc.*		96		95
Connecture, Inc.*		29		74
MaxPoint Interactive, Inc.*		29		51
Total Communications				422,255
Utilities - 3.0%
Piedmont Natural Gas Company, Inc.		334		19,982
IDACORP, Inc.		214		15,963
WGL Holdings, Inc.		211		15,270
Portland General Electric Co.		377		14,889
Cleco Corp.		257		14,189
ONE Gas, Inc.		223		13,625
New Jersey Resources Corp.		363		13,224
Southwest Gas Corp.		199		13,104
Black Hills Corp.		217		13,048
Laclede Group, Inc.		184		12,466
NorthWestern Corp.		200		12,350
ALLETE, Inc.		207		11,606

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 107

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
PNM Resources, Inc.		338	$	11,397
Avista Corp.		264		10,766
South Jersey Industries, Inc.		290		8,251
El Paso Electric Co.		171		7,845
MGE Energy, Inc.		147		7,681
Dynegy, Inc.*		517		7,430
Ormat Technologies, Inc.		158		6,516
American States Water Co.		160		6,297
Northwest Natural Gas Co.		116		6,247
Empire District Electric Co.		185		6,114
California Water Service Group		203		5,424
Otter Tail Corp.		159		4,710
Chesapeake Utilities Corp.		65		4,093
NRG Yield, Inc. — Class C		267		3,802
Abengoa Yield plc		208		3,698
Talen Energy Corp.*		354		3,186
Unitil Corp.		59		2,507
SJW Corp.		67		2,435
Connecticut Water Service, Inc.		51		2,300
Middlesex Water Co.		69		2,129
NRG Yield, Inc. — Class A		146		1,981
York Water Co.		55		1,679
Atlantic Power Corp.		518		1,274
PICO Holdings, Inc.*		98		1,003
Artesian Resources Corp. — Class A		34		951
EnerNOC, Inc.*		115		860
Consolidated Water Company Ltd.		63		767
Ameresco, Inc. — Class A*		85		405
Genie Energy Ltd. — Class B*		53		403
Spark Energy, Inc. — Class A		13		234
Total Utilities				292,101
Basic Materials - 2.1%
Sensient Technologies Corp.		201		12,754
Olin Corp.		700		12,159
PolyOne Corp.		379		11,465
HB Fuller Co.		214		9,084
Minerals Technologies, Inc.		147		8,357
Commercial Metals Co.		491		8,332
Balchem Corp.		132		8,187
Chemtura Corp.*		285		7,524
Worthington Industries, Inc.		204		7,271
Carpenter Technology Corp.		201		6,880
Axiall Corp.		298		6,509
US Silica Holdings, Inc.		272		6,180
Kaiser Aluminum Corp.		73		6,172
Stillwater Mining Co.*		512		5,453
Quaker Chemical Corp.		57		4,837
Stepan Co.		82		4,534
Neenah Paper, Inc.		71		4,520
Innospec, Inc.		103		4,466
Hecla Mining Co.		1,572		4,370
Schweitzer-Mauduit International, Inc.		129		4,061
PH Glatfelter Co.		184		3,814
Clearwater Paper Corp.*		76		3,687
Ferro Corp.*		310		3,680
A. Schulman, Inc.		124		3,375
Coeur Mining, Inc.*		577		3,243
Calgon Carbon Corp.		224		3,140
AK Steel Holding Corp.*		755		3,118
Univar, Inc.*		171		2,938
Aceto Corp.		124		2,921
Innophos Holdings, Inc.		94		2,906
Deltic Timber Corp.		47		2,827
Ferroglobe plc		276		2,432
Cliffs Natural Resources, Inc.*		773		2,319
Kraton Performance Polymers, Inc.*		133		2,301
Materion Corp.		86		2,277
Schnitzer Steel Industries, Inc. — Class A		112		2,065
American Vanguard Corp.*		124		1,957
Koppers Holdings, Inc.*		87		1,955
Rayonier Advanced Materials, Inc.		197		1,872
Tronox Ltd. — Class A		270		1,725
Hawkins, Inc.		45		1,624
Century Aluminum Co.*		226		1,593
Landec Corp.*		114		1,197
OMNOVA Solutions, Inc.*		199		1,106
Orchids Paper Products Co.		39		1,073
KMG Chemicals, Inc.		41		946
Oil-Dri Corporation of America		21		709
Kronos Worldwide, Inc.		96		549
United States Lime & Minerals, Inc.		8		480
Energy Fuels, Inc.*		186		411
Uranium Energy Corp.*		414		310
Intrepid Potash, Inc.*		238		264
Ryerson Holding Corp.*		46		256
Rentech, Inc.*		111		246
Valhi, Inc.		81		96
Horsehead Holding Corp.*		241		36
Total Basic Materials				208,563
Energy - 1.7%
PDC Energy, Inc.*		198		11,772
Parsley Energy, Inc. — Class A*		424		9,582
Western Refining, Inc.		302		8,784
RSP Permian, Inc.*		279		8,102
Carrizo Oil & Gas, Inc.*		248		7,668
Oil States International, Inc.*		219		6,902
Matador Resources Co.*		340		6,446
MRC Global, Inc.*		437		5,742
Oasis Petroleum, Inc.*		775		5,642
McDermott International, Inc.*		1,107		4,528
Pattern Energy Group, Inc.		237		4,519
SEACOR Holdings, Inc.*		77		4,193
SemGroup Corp. — Class A		186		4,166
Synergy Resources Corp.*		512		3,978
Delek US Holdings, Inc.		244		3,718
Callon Petroleum Co.*		413		3,655

108 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Forum Energy Technologies, Inc.*		252	$	3,326
Bristow Group, Inc.		148		2,800
Green Plains, Inc.		161		2,570
Helix Energy Solutions Group, Inc.*		450		2,520
Atwood Oceanics, Inc.		274		2,512
Thermon Group Holdings, Inc.*		136		2,388
Archrock, Inc.		295		2,360
Exterran Corp.*		147		2,273
TETRA Technologies, Inc.*		338		2,146
Matrix Service Co.*		113		2,000
Unit Corp.*		214		1,885
SunCoke Energy, Inc.		277		1,801
Renewable Energy Group, Inc.*		187		1,765
Flotek Industries, Inc.*		227		1,664
REX American Resources Corp.*		29		1,609
Newpark Resources, Inc.*		357		1,542
Plug Power, Inc.*		736		1,509
Tesco Corp.		165		1,421
Sanchez Energy Corp.*		257		1,411
Alon USA Energy, Inc.		133		1,373
Bill Barrett Corp.*		212		1,319
Par Pacific Holdings, Inc.*		68		1,276
FutureFuel Corp.		104		1,226
Panhandle Oil and Gas, Inc. — Class A		70		1,212
CARBO Ceramics, Inc.		83		1,179
Natural Gas Services Group, Inc.*		54		1,168
Parker Drilling Co.*		519		1,100
Northern Oil and Gas, Inc.*		262		1,045
PHI, Inc.*		53		1,001
Era Group, Inc.*		100		938
Clean Energy Fuels Corp.*		302		885
Contango Oil & Gas Co.*		74		872
Trecora Resources*		86		827
EXCO Resources, Inc.*		768		760
Geospace Technologies Corp.*		56	��	691
Solazyme, Inc.*		340		691
Fairmount Santrol Holdings, Inc.*		272		683
Gulfmark Offshore, Inc. — Class A*		109		673
FuelCell Energy, Inc.*		95		643
Pacific Ethanol, Inc.*		135		632
Ring Energy, Inc.*		119		601
Pioneer Energy Services Corp.*		273		601
Basic Energy Services, Inc.*		208		574
Westmoreland Coal Co.*		76		548
Evolution Petroleum Corp.		104		505
Cloud Peak Energy, Inc.*		259		505
Sunrun, Inc.*		76		492
TerraForm Global, Inc. — Class A		183		436
Jones Energy, Inc. — Class A*		123		410
Abraxas Petroleum Corp.*		399		403
Gastar Exploration, Inc.*		345		380
ION Geophysical Corp.*		45		364
Independence Contract Drilling, Inc.*		76		363
Adams Resources & Energy, Inc.		9		360
C&J Energy Services Ltd.*		239		337
Bonanza Creek Energy, Inc.*		211		335
Halcon Resources Corp.*		341		328
Isramco, Inc.*		4		327
W&T Offshore, Inc.*		149		326
Ultra Petroleum Corp.*		650		324
Enphase Energy, Inc.*		133		310
Eclipse Resources Corp.*		204		294
Energy XXI Ltd.		401		250
Key Energy Services, Inc.*		648		239
Vivint Solar, Inc.*		88		233
Clayton Williams Energy, Inc.*		25		223
Hallador Energy Co.		46		210
Approach Resources, Inc.*		176		204
Stone Energy Corp.*		243		192
Peabody Energy Corp.*		79		183
Rex Energy Corp.*		233		179
Seventy Seven Energy, Inc.*		274		159
SandRidge Energy, Inc.*		2,356		132
Erin Energy Corp.*		59		111
Triangle Petroleum Corp.*		198		107
North Atlantic Drilling Ltd.*		31		85
TransAtlantic Petroleum Ltd.*		110		83
Earthstone Energy, Inc.*		6		73
Penn Virginia Corp.*		391		60
Total Energy				170,939
Diversified - 0.1%
HRG Group, Inc.*		334		4,653
National Bank Holdings Corp. — Class A		144		2,936
Resource America, Inc. — Class A		72		415
Total Diversified				8,004
Government - 0.0%
Banco Latinoamericano de Comercio Exterior S.A. — Class E		128		3,100
Total Common Stocks
(Cost $6,303,870)				6,978,326
WARRANTS†† - 0.0%
Tejon Ranch Co.
$10.50, 08/31/16†		54		—
Magnum Hunter Resources Corp.
$8.50, 04/15/16		252		—
Imperial Holdings, Inc.
$10.75, 10/06/19		4		—
Total Warrants
(Cost $344)				—
RIGHTS††† - 0.0%
Vince Holding Corp.
Expires 04/14/16††		76		20

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 109

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Dyax Corp.
Expires 01/25/17		714	$	—
Omthera Pharmaceuticals, Inc.
Expires 12/31/20		57		—
Leap Wireless International, Inc.
Expires 03/06/17		513		—
Total Rights
(Cost $416)				20
MUTUAL FUNDS† - 0.6%
Guggenheim Strategy Fund I1		2,302		57,101
Total Mutual Funds
(Cost $57,170)				57,101

	Face Amount
REPURCHASE AGREEMENTS††,2 - 20.6%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	1,357,601		1,357,601
HSBC Group issued 03/31/16 at 0.21% due 04/01/163		677,946		677,946
Total Repurchase Agreements
(Cost $2,035,547)				2,035,547
Total Investments - 91.9%
(Cost $8,397,347)			$	9,070,994
Other Assets & Liabilities, net - 8.1%				797,768
Total Net Assets - 100.0%			$	9,868,762

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $554,450)		5	$	10,302

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International April 2016 Russell 2000 Index Swap 0.40%4, Terminating 04/26/16 (Notional Value $1,762,027)		1,582	$	54,836
Credit Suisse Capital, LLC April 2016 Russell 2000 Index Swap 0.43%4, Terminating 04/26/16 (Notional Value $754,745)		677		26,598
Barclays Bank plc April 2016 Russell 2000 Index Swap 0.40%4, Terminating 04/29/16 (Notional Value $4,707,574)		4,226		10,909
(Total Notional Value $7,224,346)			$	92,343

*	Non-income producing security.
†	Value determined based on Level 1 inputs, unless otherwise noted — See Note 4.
††	Value determined based on Level 2 inputs, unless otherwise noted — See Note 4.
†††	Value determined based on Level 3 inputs, unless otherwise noted — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
4	Total Return based on Russell 2000 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	REIT — Real Estate Investment Trust
	See Sector Classification in Other Information section.

110 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
RUSSELL 2000® 1.5x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	6,977,846	$	—	$	480	$	—	$	—	$	6,978,326
Equity Futures Contracts		—		10,302		—		—		—		10,302
Equity Index Swap Agreements		—		—		—		92,343		—		92,343
Mutual Funds		57,101		—		—		—		—		57,101
Repurchase Agreements		—		—		2,035,547		—		—		2,035,547
Rights		—		—		20		—		—		20
Warrants		—		—		—		—		—		—
Total	$	7,034,947	$	10,302	$	2,036,047	$	92,343	$	—	$	9,173,639

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 111

RUSSELL 2000^® 1.5x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $6,304,630)	$	6,978,346
Investments in affiliated issuers, at value (cost $57,170)		57,101
Repurchase agreements, at value (cost $2,035,547)		2,035,547
Total investments (cost $8,397,347)		9,070,994
Segregated cash with broker		401,800
Unrealized appreciation on swap agreements		92,343
Cash		8
Receivables:
Fund shares sold		306,161
Securities sold		52,782
Dividends		9,849
Variation margin		6,292
Interest		13
Foreign taxes reclaim		7
Total assets		9,940,249
Liabilities:
Payable for:
Fund shares redeemed		28,684
Securities purchased		25,560
Management fees		7,281
Distribution and service fees		2,846
Transfer agent and administrative fees		2,023
Portfolio accounting fees		809
Miscellaneous		4,284
Total liabilities		71,487
Commitments and contingent liabilities (Note 13)		—
Net assets	$	9,868,762
Net assets consist of:
Paid in capital	$	9,327,758
Accumulated net investment loss		(35,883	)
Accumulated net realized gain on investments		(199,405	)
Net unrealized appreciation on investments		776,292
Net assets	$	9,868,762
A-Class:
Net assets	$	497,020
Capital shares outstanding		11,098
Net asset value per share	$	44.78
Maximum offering price per share (Net asset value divided by 95.25%)	$	47.01
C-Class:
Net assets	$	1,322,403
Capital shares outstanding		33,527
Net asset value per share	$	39.44
H-Class:
Net assets	$	8,049,339
Capital shares outstanding		179,889
Net asset value per share	$	44.75

112 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

RUSSELL 2000^® 1.5x STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $134)	$	122,442
Dividends from securities of affiliated issuers		24,881
Interest		7,439
Income from securities lending, net		1,693
Total investment income		156,455
Expenses:
Management fees		200,185
Transfer agent and administrative fees		55,607
Distribution and service fees:
A-Class		1,433
C-Class		15,563
H-Class		50,283
Portfolio accounting fees		22,243
Custodian fees		2,571
Trustees’ fees*		1,656
Line of credit fees		270
Miscellaneous		39,465
Total expenses		389,276
Net investment loss		(232,821	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		1,781,069
Investments in affiliated issuers		3,205
Swap agreements		(1,182,700	)
Futures contracts		1,433,228
Net realized gain		2,034,802
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(2,632,541	)
Investments in affiliated issuers		(69	)
Swap agreements		(77,690	)
Futures contracts		(3,753	)
Net change in unrealized appreciation (depreciation)		(2,714,053	)
Net realized and unrealized loss		(679,251	)
Net decrease in net assets resulting from operations	$	(912,072	)

* 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 ANNUAL REPORT | 113

RUSSELL 2000^® 1.5x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(232,821	)	$	(174,277	)
Net realized gain on investments		2,034,802			6,937,664
Net change in unrealized appreciation (depreciation) on investments		(2,714,053	)		(2,841,277	)
Net increase (decrease) in net assets resulting from operations		(912,072	)		3,922,110
Distributions to shareholders from:
Net realized gains
A-Class		(37,011	)		(2,196	)
C-Class		(125,275	)		(7,355	)
H-Class		(816,653	)		(234,847	)
Total distributions to shareholders		(978,939	)		(244,398	)
Capital share transactions:
Proceeds from sale of shares
A-Class		4,129,543			1,893,905
C-Class		123,456			98,855
H-Class		340,767,371			232,124,981
Distributions reinvested
A-Class		34,810			1,903
C-Class		123,960			7,229
H-Class		813,382			133,841
Cost of shares redeemed
A-Class		(4,165,989	)		(1,896,108	)
C-Class		(293,524	)		(299,746	)
H-Class		(350,796,800	)		(236,252,696	)
Net decrease from capital share transactions		(9,263,791	)		(4,187,836	)
Net decrease in net assets		(11,154,802	)		(510,124	)
Net assets:
Beginning of year		21,023,564			21,533,688
End of year	$	9,868,762		$	21,023,564
Accumulated net investment loss at end of year	$	(35,883	)	$	(4,597	)
Capital share activity:
Shares sold
A-Class		74,547			37,732
C-Class		2,397			2,156
H-Class		6,930,733			4,439,943
Shares issued from reinvestment of distributions
A-Class		723			36
C-Class		2,917			153
H-Class		16,938			2,554
Shares redeemed
A-Class		(74,982	)		(38,492	)
C-Class		(6,389	)		(6,473	)
H-Class		(7,088,735	)		(4,480,213	)
Net decrease in shares		(141,851	)		(42,604	)

114 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

RUSSELL 2000^® 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	58.05		$	53.23		$	39.32		$	32.20		$	34.37
Income (loss) from investment operations:
Net investment income (loss)a		(.43	)		(.39	)		(.37	)		(.16	)		(.39	)
Net gain (loss) on investments (realized and unrealized)		(9.03	)		5.41			14.28			7.28			(1.78	)
Total from investment operations		(9.46	)		5.02			13.91			7.12			(2.17	)
Less distributions from:
Net realized gains		(3.81	)		(.20	)		—			—			—
Total distributions		(3.81	)		(.20	)		—			—			—
Net asset value, end of period	$	44.78		$	58.05		$	53.23		$	39.32		$	32.20
Total Returnb		(16.75	%)		9.48	%		35.38	%		22.11	%		(6.31	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	497		$	627		$	614		$	392		$	1,355
Ratios to average net assets:
Net investment income (loss)		(0.85	%)		(0.74	%)		(0.78	%)		(0.51	%)		(1.24	%)
Total expensesc		1.70	%		1.70	%		1.72	%		1.71	%		1.73	%
Portfolio turnover rate		971	%		830	%		472	%		527	%		177	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	52.01		$	48.08		$	35.78		$	29.52		$	31.75
Income (loss) from investment operations:
Net investment income (loss)a		(.73	)		(.70	)		(.65	)		(.34	)		(.54	)
Net gain (loss) on investments (realized and unrealized)		(8.03	)		4.83			12.95			6.60			(1.69	)
Total from investment operations		(8.76	)		4.13			12.30			6.26			(2.23	)
Less distributions from:
Net realized gains		(3.81	)		(.20	)		—			—			—
Total distributions		(3.81	)		(.20	)		—			—			—
Net asset value, end of period	$	39.44		$	52.01		$	48.08		$	35.78		$	29.52
Total Returnb		(17.36	%)		8.64	%		34.38	%		21.21	%		(7.02	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,322		$	1,800		$	1,864		$	1,685		$	1,839
Ratios to average net assets:
Net investment income (loss)		(1.62	%)		(1.49	%)		(1.55	%)		(1.15	%)		(1.99	%)
Total expensesc		2.45	%		2.45	%		2.47	%		2.46	%		2.49	%
Portfolio turnover rate		971	%		830	%		472	%		527	%		177	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 115

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	57.94		$	53.13		$	39.24		$	32.13		$	34.29
Income (loss) from investment operations:
Net investment income (loss)a		(.51	)		(.40	)		(.37	)		(.08	)		(.37	)
Net gain (loss) on investments (realized and unrealized)		(8.87	)		5.41			14.26			7.19			(1.79	)
Total from investment operations		(9.38	)		5.01			13.89			7.11			(2.16	)
Less distributions from:
Net realized gains		(3.81	)		(.20	)		—			—			—
Total distributions		(3.81	)		(.20	)		—			—			—
Net asset value, end of period	$	44.75		$	57.94		$	53.13		$	39.24		$	32.13
Total Returnb		(16.63	%)		9.48	%		35.40	%		22.13	%		(6.30	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,049		$	18,596		$	19,056		$	44,955		$	14,902
Ratios to average net assets:
Net investment income (loss)		(1.01	%)		(0.76	%)		(0.81	%)		(0.25	%)		(1.24	%)
Total expensesc		1.70	%		1.70	%		1.72	%		1.71	%		1.73	%
Portfolio turnover rate		971	%		830	%		472	%		527	%		177	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.

116 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

Russell 2000^® Fund H-Class turned in a -11.43% performance for the one-year period ended March 31, 2016. Its benchmark, the Russell 2000 Index, returned -1.34% for the period. Russell 2000^® Fund maintained a daily correlation of over 99% to its benchmark of the daily price movement of the Russell 2000 Index.

Among sectors, the biggest performance contributors to the underlying index during the period were Utilities and Telecommunications Services. The Health Care sector detracted the most from return, followed by the Energy sector.

Synageva BioPharma Corp., Dyax Corp., and Piedmont Natural Gas Company, Inc. were the largest contributors to the performance of the underlying index for the year. Puma Biotechnology, Inc., Celldex Therapeutics, Inc., and SemGroup Corp. – Class A were the leading detractors from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

Performance displayed represents past performance, which is no guarantee of future results.

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)
STERIS plc	0.1%
CubeSmart	0.1%
West Pharmaceutical Services, Inc.	0.1%
TreeHouse Foods, Inc.	0.1%
Vail Resorts, Inc.	0.1%
Piedmont Natural Gas Company, Inc.	0.1%
MarketAxess Holdings, Inc.	0.1%
Sovran Self Storage, Inc.	0.1%
Highwoods Properties, Inc.	0.1%
Casey’s General Stores, Inc.	0.1%
Top Ten Total	1.0%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 117

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (05/31/06)
A-Class Shares	-11.43%	5.53%	4.30%
A-Class Shares with sales charge†	-15.64%	4.51%	3.79%
C-Class Shares	-12.07%	4.69%	3.48%
C-Class Shares with CDSC‡	-12.93%	4.69%	3.48%
H-Class Shares	-11.43%	5.50%	4.28%
Russell 2000 Index	-1.34%	11.40%	8.50%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Russell 2000 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on H-Class shares and A-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

118 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
COMMON STOCKS† - 19.6%
Financial - 5.1%
CubeSmart		1,284	$	42,757
MarketAxess Holdings, Inc.		274		34,203
Sovran Self Storage, Inc.		288		33,970
Highwoods Properties, Inc.		690		32,988
First American Financial Corp.		795		30,296
EPR Properties		419		27,914
Investors Bancorp, Inc.		2,398		27,914
Sun Communities, Inc.		371		26,567
Gramercy Property Trust		3,077		26,001
DCT Industrial Trust, Inc.		652		25,734
Umpqua Holdings Corp.		1,618		25,662
FirstMerit Corp.		1,216		25,598
CNO Financial Group, Inc.		1,364		24,443
CyrusOne, Inc.		535		24,423
Bank of the Ozarks, Inc.		572		24,007
Webster Financial Corp.		666		23,909
Prosperity Bancshares, Inc.		513		23,798
Healthcare Realty Trust, Inc.		736		22,734
PrivateBancorp, Inc. — Class A		577		22,272
Medical Properties Trust, Inc.		1,710		22,196
RLJ Lodging Trust		969		22,170
Sunstone Hotel Investors, Inc.		1,530		21,419
RLI Corp.		317		21,195
Western Alliance Bancorporation*		631		21,063
LaSalle Hotel Properties		828		20,957
New Residential Investment Corp. REIT		1,690		19,655
Ellie Mae, Inc.*		216		19,578
FNB Corp.		1,482		19,281
Education Realty Trust, Inc.		462		19,219
MGIC Investment Corp.*		2,491		19,107
GEO Group, Inc.		548		18,999
DuPont Fabros Technology, Inc.		463		18,765
United Bankshares, Inc.		509		18,680
First Industrial Realty Trust, Inc.		812		18,465
National Health Investors, Inc.		275		18,293
MB Financial, Inc.		551		17,880
Acadia Realty Trust		504		17,707
Radian Group, Inc.		1,404		17,411
Fulton Financial Corp.		1,296		17,340
Home BancShares, Inc.		419		17,158
Kite Realty Group Trust		613		16,986
Urban Edge Properties		651		16,822
Equity One, Inc.		584		16,737
Cathay General Bancorp		586		16,601
Cousins Properties, Inc.		1,589		16,494
Ryman Hospitality Properties, Inc.		319		16,422
Valley National Bancorp		1,705		16,266
Primerica, Inc.		355		15,808
Hudson Pacific Properties, Inc.		546		15,790
Janus Capital Group, Inc.		1,077		15,756
Washington Federal, Inc.		695		15,742
Wintrust Financial Corp.		348		15,430
Mack-Cali Realty Corp.		654		15,369
Pebblebrook Hotel Trust		527		15,320
Selective Insurance Group, Inc.		418		15,303
BancorpSouth, Inc.		708		15,087
UMB Financial Corp.		289		14,921
Kennedy-Wilson Holdings, Inc.		681		14,914
DiamondRock Hospitality Co.		1,472		14,897
Physicians Realty Trust		794		14,753
Stifel Financial Corp.*		498		14,741
Retail Opportunity Investments Corp.		728		14,647
Washington Real Estate Investment Trust		500		14,605
PS Business Parks, Inc.		143		14,373
IBERIABANK Corp.		280		14,356
EastGroup Properties, Inc.		237		14,308
Glacier Bancorp, Inc.		554		14,083
Sterling Bancorp		879		14,002
First Financial Bankshares, Inc.		470		13,903
First Citizens BancShares, Inc. — Class A		55		13,809
Colony Capital, Inc. — Class A		819		13,734
Capitol Federal Financial, Inc.		1,032		13,684
Blackhawk Network Holdings, Inc.*		398		13,652
CVB Financial Corp.		779		13,594
WageWorks, Inc.*		262		13,260
Alexander & Baldwin, Inc.		358		13,131
Hancock Holding Co.		571		13,110
Evercore Partners, Inc. — Class A		253		13,093
Lexington Realty Trust		1,507		12,960
Pinnacle Financial Partners, Inc.		263		12,903
Texas Capital Bancshares, Inc.*		335		12,857
Xenia Hotels & Resorts, Inc.		819		12,793
Columbia Banking System, Inc.		423		12,656
CoreSite Realty Corp.		178		12,462
LTC Properties, Inc.		274		12,396
BGC Partners, Inc. — Class A		1,344		12,163
Monogram Residential Trust, Inc.		1,221		12,039
New York REIT, Inc.		1,191		12,029
Community Bank System, Inc.		313		11,960
Financial Engines, Inc.		380		11,942
Argo Group International Holdings Ltd.		204		11,708
Chesapeake Lodging Trust		437		11,563
Trustmark Corp.		495		11,400
South State Corp.		177		11,369
Pennsylvania Real Estate Investment Trust		507		11,078
Invesco Mortgage Capital, Inc. REIT		903		10,999
National Penn Bancshares, Inc.		1,027		10,927
American Assets Trust, Inc.		273		10,898
Enstar Group Ltd.*		67		10,893
EverBank Financial Corp.		710		10,714
Select Income REIT		460		10,603
Hilltop Holdings, Inc.*		558		10,535
Eagle Bancorp, Inc.*		219		10,512
Old National Bancorp		858		10,459

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 119

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Ramco-Gershenson Properties Trust		580	$	10,457
Astoria Financial Corp.		660		10,454
PRA Group, Inc.*		354		10,404
First Midwest Bancorp, Inc.		572		10,307
Aircastle Ltd.		458		10,186
Hatteras Financial Corp. REIT		710		10,153
Northwest Bancshares, Inc.		742		10,024
American Equity Investment Life Holding Co.		595		9,996
Simmons First National Corp. — Class A		218		9,825
International Bancshares Corp.		397		9,790
STAG Industrial, Inc.		478		9,732
Parkway Properties, Inc.		621		9,725
QTS Realty Trust, Inc. — Class A		205		9,713
Provident Financial Services, Inc.		481		9,711
Renasant Corp.		295		9,708
Sabra Health Care REIT, Inc.		478		9,603
BofI Holding, Inc.*		450		9,603
Horace Mann Educators Corp.		302		9,570
WisdomTree Investments, Inc.		837		9,567
CYS Investments, Inc.		1,160		9,442
Kemper Corp.		319		9,433
Potlatch Corp.		298		9,387
Government Properties Income Trust		516		9,211
Westamerica Bancorporation		187		9,109
BBCN Bancorp, Inc.		583		8,856
MBIA, Inc.*		998		8,832
Chemical Financial Corp.		247		8,815
Independent Bank Corp.		191		8,778
NBT Bancorp, Inc.		322		8,678
Park National Corp.		95		8,550
FelCor Lodging Trust, Inc.		1,051		8,534
Essent Group Ltd.*		408		8,486
Kearny Financial Corp.		686		8,472
WesBanco, Inc.		282		8,378
Beneficial Bancorp, Inc.*		607		8,310
Great Western Bancorp, Inc.		303		8,263
First Financial Bancorp		452		8,217
Union Bankshares Corp.		330		8,128
Summit Hotel Properties, Inc.		640		7,661
HFF, Inc. — Class A		277		7,626
Yadkin Financial Corp.		316		7,480
PennyMac Mortgage Investment Trust		547		7,461
Redwood Trust, Inc.		565		7,390
Terreno Realty Corp.		315		7,386
Rexford Industrial Realty, Inc.		406		7,373
STORE Capital Corp.		283		7,324
AMERISAFE, Inc.		139		7,303
WSFS Financial Corp.		223		7,252
United Community Banks, Inc.		391		7,222
Hersha Hospitality Trust		338		7,213
ServisFirst Bancshares, Inc.		162		7,193
Tompkins Financial Corp.		110		7,040
Third Point Reinsurance Ltd.*		619		7,038
Franklin Street Properties Corp.		660		7,003
Apollo Commercial Real Estate Finance, Inc.		429		6,992
Ameris Bancorp		236		6,981
Boston Private Financial Holdings, Inc.		609		6,973
Capstead Mortgage Corp.		703		6,953
Colony Starwood Homes		280		6,930
St. Joe Co.*		404		6,929
LegacyTexas Financial Group, Inc.		349		6,858
FCB Financial Holdings, Inc. — Class A*		205		6,818
Nelnet, Inc. — Class A		172		6,772
Infinity Property & Casualty Corp.		84		6,762
Talmer Bancorp, Inc. — Class A		373		6,748
Employers Holdings, Inc.		234		6,585
S&T Bancorp, Inc.		255		6,569
Navigators Group, Inc.*		78		6,542
First Merchants Corp.		277		6,529
Investors Real Estate Trust		899		6,526
New Senior Investment Group, Inc.		633		6,520
United Fire Group, Inc.		148		6,485
Banner Corp.		154		6,474
TowneBank		334		6,409
National General Holdings Corp.		292		6,304
ARMOUR Residential REIT, Inc.		292		6,287
Safety Insurance Group, Inc.		110		6,277
Stewart Information Services Corp.		168		6,095
FNFV Group*		556		6,033
Chatham Lodging Trust		281		6,021
Berkshire Hills Bancorp, Inc.		216		5,808
First Commonwealth Financial Corp.		652		5,777
Cohen & Steers, Inc.		148		5,760
Brookline Bancorp, Inc.		514		5,659
Northfield Bancorp, Inc.		344		5,655
Banc of California, Inc.		321		5,618
Meridian Bancorp, Inc.		403		5,610
Investment Technology Group, Inc.		251		5,547
Agree Realty Corp.		144		5,539
Lakeland Financial Corp.		121		5,539
American Capital Mortgage Investment Corp.		375		5,506
Oritani Financial Corp.		323		5,481
Monmouth Real Estate Investment Corp.		459		5,458
iStar, Inc.*		556		5,371
City Holding Co.		112		5,351
Wilshire Bancorp, Inc.		518		5,335
Alexander’s, Inc.		14		5,328
Ambac Financial Group, Inc.*		330		5,214
State Bank Financial Corp.		262		5,177
Universal Health Realty Income Trust		92		5,175
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		269		5,170
Hanmi Financial Corp.		234		5,153
Altisource Residential Corp.		420		5,040
CenterState Banks, Inc.		333		4,958
Sandy Spring Bancorp, Inc.		178		4,954

120 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Rouse Properties, Inc.		268	$	4,926
Encore Capital Group, Inc.*		191		4,916
Southside Bancshares, Inc.		186		4,849
Piper Jaffray Cos.*		97		4,807
Maiden Holdings Ltd.		371		4,801
Cardinal Financial Corp.		235		4,782
Capital Bank Financial Corp. — Class A		155		4,782
Greenhill & Company, Inc.		215		4,773
Walker & Dunlop, Inc.*		194		4,708
Flushing Financial Corp.		216		4,670
Customers Bancorp, Inc.*		196		4,631
Greenlight Capital Re Ltd. — Class A*		212		4,619
BNC Bancorp		218		4,604
United Financial Bancorp, Inc.		363		4,570
PHH Corp.*		364		4,565
Cedar Realty Trust, Inc.		624		4,512
CareTrust REIT, Inc.		350		4,445
Cass Information Systems, Inc.		84		4,397
FBL Financial Group, Inc. — Class A		71		4,368
Heartland Financial USA, Inc.		139		4,280
Pacific Premier Bancorp, Inc.*		200		4,274
Urstadt Biddle Properties, Inc. — Class A		204		4,274
TrustCo Bank Corp. NY		697		4,224
Universal Insurance Holdings, Inc.		235		4,183
TriCo Bancshares		165		4,178
Stock Yards Bancorp, Inc.		108		4,161
Washington Trust Bancorp, Inc.		109		4,068
Community Trust Bancorp, Inc.		115		4,062
First Interstate BancSystem, Inc. — Class A		144		4,051
Dime Community Bancshares, Inc.		228		4,017
Silver Bay Realty Trust Corp.		267		3,965
Enterprise Financial Services Corp.		146		3,948
Virtus Investment Partners, Inc.		50		3,906
First Potomac Realty Trust		431		3,905
Ashford Hospitality Trust, Inc.		612		3,905
Diamond Hill Investment Group, Inc.		22		3,902
Heritage Financial Corp.		222		3,901
1st Source Corp.		120		3,821
Saul Centers, Inc.		72		3,817
New York Mortgage Trust, Inc. REIT		802		3,801
Getty Realty Corp.		187		3,708
National Western Life Group, Inc. — Class A		16		3,690
Central Pacific Financial Corp.		169		3,679
Ladder Capital Corp. — Class A		292		3,635
First Busey Corp.		177		3,625
Moelis & Co. — Class A		128		3,613
Anworth Mortgage Asset Corp.		769		3,584
ConnectOne Bancorp, Inc.		218		3,564
National Storage Affiliates Trust		168		3,562
HomeStreet, Inc.*		162		3,371
Bryn Mawr Bank Corp.		131		3,371
MainSource Financial Group, Inc.		159		3,353
Bridge Bancorp, Inc.		109		3,321
Flagstar Bancorp, Inc.*		151		3,240
Westwood Holdings Group, Inc.		55		3,226
Forestar Group, Inc.*		247		3,221
Apollo Residential Mortgage, Inc.		235		3,154
CoBiz Financial, Inc.		266		3,144
CatchMark Timber Trust, Inc. — Class A		290		3,141
German American Bancorp, Inc.		97		3,123
Cowen Group, Inc. — Class A*		817		3,113
Western Asset Mortgage Capital Corp. REIT		307		3,085
Virtu Financial, Inc. — Class A		139		3,073
Financial Institutions, Inc.		104		3,023
BancFirst Corp.		53		3,023
KCG Holdings, Inc. — Class A*		249		2,976
RE/MAX Holdings, Inc. — Class A		86		2,950
International. FCStone, Inc.*		110		2,940
State National Companies, Inc.		229		2,885
Federal Agricultural Mortgage Corp. — Class C		76		2,867
Heritage Insurance Holdings, Inc.		179		2,859
Nationstar Mortgage Holdings, Inc.*		288		2,851
Clifton Bancorp, Inc.		188		2,843
Great Southern Bancorp, Inc.		76		2,822
Lakeland Bancorp, Inc.		278		2,822
Univest Corporation of Pennsylvania		144		2,809
Blue Hills Bancorp, Inc.		205		2,802
Mercantile Bank Corp.		124		2,780
First Financial Corp.		81		2,771
Seacoast Banking Corporation of Florida*		174		2,747
InfraREIT, Inc.		161		2,745
First Bancorp		145		2,733
AG Mortgage Investment Trust, Inc.		208		2,719
Waterstone Financial, Inc.		198		2,709
Gladstone Commercial Corp.		162		2,654
Peoples Bancorp, Inc.		135		2,638
Resource Capital Corp.		233		2,621
First Defiance Financial Corp.		68		2,612
Citizens, Inc.*		360		2,606
CU Bancorp*		123		2,604
Preferred Bank/Los Angeles CA		86		2,602
Bank Mutual Corp.		342		2,589
Opus Bank		76		2,584
HomeTrust Bancshares, Inc.*		140		2,566
First of Long Island Corp.		90		2,565
Anchor BanCorp Wisconsin, Inc.*		56		2,523
Marcus & Millichap, Inc.*		99		2,514
Meta Financial Group, Inc.		55		2,508
First BanCorp*		853		2,491
Whitestone REIT — Class B		197		2,476
First Community Bancshares, Inc.		124		2,460
Stonegate Bank		82		2,457
Independent Bank Corp.		168		2,444
State Auto Financial Corp.		110		2,427
United Insurance Holdings Corp.		126		2,420
OM Asset Management plc		180		2,403

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 121

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Dynex Capital, Inc.		361	$	2,401
Ashford Hospitality Prime, Inc.		201		2,346
Altisource Portfolio Solutions S.A.*		97		2,343
Armada Hoffler Properties, Inc.		206		2,318
Pacific Continental Corp.		143		2,307
OFG Bancorp		327		2,286
First NBC Bank Holding Co.*		111		2,285
Camden National Corp.		54		2,268
Houlihan Lokey, Inc.		89		2,216
Park Sterling Corp.		329		2,194
Arrow Financial Corp.		82		2,179
Fidelity & Guaranty Life		83		2,178
Bank of Marin Bancorp		44		2,166
Ares Commercial Real Estate Corp.		197		2,157
West Bancorporation, Inc.		118		2,151
Suffolk Bancorp		85		2,145
Walter Investment Management Corp.*		277		2,116
United Community Financial Corp.		360		2,113
OneBeacon Insurance Group Ltd. — Class A		166		2,113
Southwest Bancorp, Inc.		140		2,107
Arlington Asset Investment Corp. — Class A		168		2,105
HCI Group, Inc.		63		2,098
RAIT Financial Trust		665		2,088
Preferred Apartment Communities, Inc. — Class A		163		2,067
One Liberty Properties, Inc.		92		2,062
Fidelity Southern Corp.		128		2,053
Horizon Bancorp		83		2,052
QCR Holdings, Inc.		86		2,051
Peoples Financial Services Corp.		55		2,046
Federated National Holding Co.		104		2,045
World Acceptance Corp.*		52		1,972
TriState Capital Holdings, Inc.*		156		1,966
Ocwen Financial Corp.*		788		1,946
Independent Bank Group, Inc.		71		1,945
Ladenburg Thalmann Financial Services, Inc.*		773		1,933
Peapack Gladstone Financial Corp.		113		1,910
Global Indemnity plc — Class A*		61		1,899
Republic Bancorp, Inc. — Class A		73		1,886
First Connecticut Bancorp, Inc.		118		1,883
CNB Financial Corp.		106		1,865
Easterly Government Properties, Inc.		100		1,852
NMI Holdings, Inc. — Class A*		365		1,843
NexPoint Residential Trust, Inc.		139		1,820
FRP Holdings, Inc.*		50		1,780
Citizens & Northern Corp.		89		1,769
National Bankshares, Inc.		51		1,750
CorEnergy Infrastructure Trust, Inc.		87		1,750
OceanFirst Financial Corp.		98		1,733
Triumph Bancorp, Inc.*		109		1,725
UMH Properties, Inc.		173		1,716
GAMCO Investors, Inc. — Class A		46		1,705
Baldwin & Lyons, Inc. — Class B		69		1,698
Heritage Commerce Corp.		169		1,692
Guaranty Bancorp		109		1,685
Independence Realty Trust, Inc.		236		1,680
Fox Chase Bancorp, Inc.		86		1,662
Orchid Island Capital, Inc.		160		1,659
Ames National Corp.		66		1,634
American National Bankshares, Inc.		64		1,621
Territorial Bancorp, Inc.		62		1,616
BankFinancial Corp.		135		1,596
MidWestOne Financial Group, Inc.		58		1,592
Real Industry, Inc.*		180		1,566
Sierra Bancorp		86		1,561
National Interstate Corp.		52		1,556
GAIN Capital Holdings, Inc.		237		1,555
Old Second Bancorp, Inc.*		216		1,549
First Bancorp, Inc.		79		1,541
NewStar Financial, Inc.*		176		1,540
Charter Financial Corp.		112		1,512
Bluerock Residential Growth REIT, Inc.		138		1,501
Enterprise Bancorp, Inc.		56		1,469
Bar Harbor Bankshares		44		1,462
Farmers Capital Bank Corp.		55		1,453
Sun Bancorp, Inc.*		70		1,450
First Business Financial Services, Inc.		63		1,445
EMC Insurance Group, Inc.		56		1,436
Consolidated-Tomoka Land Co.		31		1,430
Acacia Research Corp.		374		1,417
Bancorp, Inc.*		247		1,413
Atlas Financial Holdings, Inc.*		76		1,379
Regional Management Corp.*		79		1,352
Crawford & Co. — Class B		208		1,348
Heritage Oaks Bancorp		172		1,340
BSB Bancorp, Inc.*		59		1,326
Penns Woods Bancorp, Inc.		34		1,310
Cascade Bancorp*		226		1,290
Associated Capital Group, Inc. — Class A*		46		1,289
Tiptree Financial, Inc. — Class A		220		1,254
eHealth, Inc.*		131		1,230
Enova International, Inc.*		191		1,205
Oppenheimer Holdings, Inc. — Class A		76		1,199
Hallmark Financial Services, Inc.*		104		1,196
CommunityOne Bancorp*		90		1,195
Hingham Institution for Savings		10		1,191
Trupanion, Inc.*		120		1,182
Capital City Bank Group, Inc.		79		1,153
PennyMac Financial Services, Inc. — Class A*		97		1,141
Calamos Asset Management, Inc. — Class A		131		1,112
Franklin Financial Network, Inc.*		40		1,080
Merchants Bancshares, Inc.		36		1,071
Access National Corp.		53		1,051
C1 Financial, Inc.*		43		1,041
National Commerce Corp.*		44		1,039
RMR Group, Inc. — Class A*		39		975

122 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Century Bancorp, Inc. — Class A		25	$	973
Marlin Business Services Corp.		64		916
Bear State Financial, Inc.*		97		899
Donegal Group, Inc. — Class A		62		892
Impac Mortgage Holdings, Inc.*		63		874
Independence Holding Co.		52		828
Green Bancorp, Inc.*		99		749
Pzena Investment Management, Inc. — Class A		92		695
On Deck Capital, Inc.*		85		662
United Development Funding IV††		200		640
Stonegate Mortgage Corp.*		107		614
Live Oak Bancshares, Inc.		31		465
Hampton Roads Bankshares, Inc.*		251		444
Great Ajax Corp.		32		358
Ashford, Inc.*		7		319
CIFC LLC		44		312
BBX Capital Corp. — Class A*		19		303
Allegiance Bancshares, Inc.*		13		239
Medley Management, Inc. — Class A		43		237
Equity Bancshares, Inc. — Class A*		11		231
People’s Utah Bancorp		13		206
ZAIS Group Holdings, Inc.*		28		136
JG Wentworth Co. — Class A*		106		129
Fifth Street Asset Management, Inc.		42		129
Altisource Asset Management Corp.*		6		71
RCS Capital Corp. — Class A*		361		4
Total Financial				3,135,349
Consumer, Non-cyclical - 4.1%
STERIS plc		625		44,405
West Pharmaceutical Services, Inc.		528		36,600
TreeHouse Foods, Inc.*		412		35,742
Post Holdings, Inc.*		452		31,085
WellCare Health Plans, Inc.*		323		29,959
Amsurg Corp. — Class A*		396		29,542
ABIOMED, Inc.*		304		28,821
Euronet Worldwide, Inc.*		380		28,162
Heartland Payment Systems, Inc.		268		25,881
PAREXEL International Corp.*		405		25,405
HealthSouth Corp.		671		25,250
Neurocrine Biosciences, Inc.*		626		24,757
Deluxe Corp.		366		22,872
Team Health Holdings, Inc.*		528		22,077
Cimpress N.V.*		241		21,856
Helen of Troy Ltd.*		209		21,671
Prestige Brands Holdings, Inc.*		384		20,502
Healthcare Services Group, Inc.		524		19,288
Myriad Genetics, Inc.*		509		19,051
Owens & Minor, Inc.		463		18,714
Molina Healthcare, Inc.*		288		18,573
Cantel Medical Corp.		252		17,982
Ultragenyx Pharmaceutical, Inc.*		282		17,852
Bright Horizons Family Solutions, Inc.*		274		17,749
Cepheid*		526		17,546
LivaNova plc*		325		17,543
NuVasive, Inc.*		355		17,270
ACADIA Pharmaceuticals, Inc.*		616		17,222
Chemed Corp.		125		16,931
Impax Laboratories, Inc.*		526		16,842
Monro Muffler Brake, Inc.		233		16,653
Catalent, Inc.*		613		16,349
Anacor Pharmaceuticals, Inc.*		301		16,087
Snyder’s-Lance, Inc.		508		15,978
B&G Foods, Inc.		458		15,943
CEB, Inc.		245		15,858
Medicines Co.*		486		15,440
Darling Ingredients, Inc.*		1,171		15,422
Lancaster Colony Corp.		136		15,038
United Natural Foods, Inc.*		367		14,790
Sanderson Farms, Inc.		164		14,790
Grand Canyon Education, Inc.*		345		14,745
Vector Group Ltd.		629		14,367
Pacira Pharmaceuticals, Inc.*		266		14,093
On Assignment, Inc.*		379		13,994
Integra LifeSciences Holdings Corp.*		206		13,875
Ligand Pharmaceuticals, Inc. — Class B*		129		13,814
Insulet Corp.*		416		13,795
Neogen Corp.*		272		13,695
Masimo Corp.*		321		13,431
ABM Industries, Inc.		411		13,280
Nektar Therapeutics*		965		13,269
Haemonetics Corp.*		379		13,257
Matthews International Corp. — Class A		242		12,457
Magellan Health, Inc.*		183		12,431
Boston Beer Company, Inc. — Class A*		67		12,400
Brink’s Co.		357		11,992
Dean Foods Co.		692		11,985
Globus Medical, Inc. — Class A*		503		11,946
Cal-Maine Foods, Inc.		229		11,887
Cardtronics, Inc.*		328		11,805
J&J Snack Foods Corp.		109		11,803
AMN Healthcare Services, Inc.*		349		11,730
WD-40 Co.		107		11,557
SUPERVALU, Inc.*		1,920		11,059
Tumi Holdings, Inc.*		411		11,023
Kite Pharma, Inc.*		237		10,881
Wright Medical Group N.V.*		654		10,856
FTI Consulting, Inc.*		305		10,831
Sotheby’s		405		10,826
ICU Medical, Inc.*		103		10,722
Travelport Worldwide Ltd.		774		10,573
Korn/Ferry International		370		10,467
Air Methods Corp.*		288		10,431
Fresh Del Monte Produce, Inc.		244		10,265
Prothena Corporation plc*		247		10,167
Novavax, Inc.*		1,966		10,145
Cambrex Corp.*		230		10,120

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 123

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Ironwood Pharmaceuticals, Inc. — Class A*		924	$	10,109
Advisory Board Co.*		311		10,030
Amedisys, Inc.*		207		10,006
Halyard Health, Inc.*		341		9,797
Universal Corp.		166		9,430
HMS Holdings Corp.*		649		9,313
Natus Medical, Inc.*		242		9,300
Huron Consulting Group, Inc.*		158		9,194
Select Medical Holdings Corp.*		770		9,094
Fresh Market, Inc.*		316		9,015
ExamWorks Group, Inc.*		303		8,957
CONMED Corp.		202		8,472
Ensign Group, Inc.		373		8,445
SpartanNash Co.		276		8,366
LifeLock, Inc.*		692		8,352
Acorda Therapeutics, Inc.*		314		8,305
Emergent BioSolutions, Inc.*		222		8,070
DeVry Education Group, Inc.		467		8,065
TrueBlue, Inc.*		307		8,028
Affymetrix, Inc.*		567		7,944
Innoviva, Inc.		624		7,856
ARIAD Pharmaceuticals, Inc.*		1,228		7,847
Green Dot Corp. — Class A*		337		7,741
Radius Health, Inc.*		242		7,608
Kindred Healthcare, Inc.		612		7,558
TESARO, Inc.*		171		7,529
FibroGen, Inc.*		350		7,452
Abaxis, Inc.		163		7,399
Halozyme Therapeutics, Inc.*		778		7,368
Portola Pharmaceuticals, Inc.*		361		7,364
Insperity, Inc.		142		7,346
Ophthotech Corp.*		173		7,313
Surgical Care Affiliates, Inc.*		158		7,312
Diplomat Pharmacy, Inc.*		265		7,261
ACCO Brands Corp.*		806		7,237
Cynosure, Inc. — Class A*		163		7,192
Amicus Therapeutics, Inc.*		850		7,183
Analogic Corp.		90		7,111
Merrimack Pharmaceuticals, Inc.*		842		7,048
MiMedx Group, Inc.*		797		6,966
NxStage Medical, Inc.*		464		6,955
Nevro Corp.*		122		6,864
Five Prime Therapeutics, Inc.*		166		6,745
EVERTEC, Inc.		482		6,738
TherapeuticsMD, Inc.*		1,051		6,726
Greatbatch, Inc.*		187		6,665
Achillion Pharmaceuticals, Inc.*		862		6,655
Exelixis, Inc.*		1,643		6,572
HealthEquity, Inc.*		266		6,562
Andersons, Inc.		208		6,533
Repligen Corp.*		240		6,437
Team, Inc.*		211		6,410
Zeltiq Aesthetics, Inc.*		236		6,410
Sarepta Therapeutics, Inc.*		326		6,364
Meridian Bioscience, Inc.		306		6,307
PRA Health Sciences, Inc.*		146		6,243
ZIOPHARM Oncology, Inc.*		841		6,240
Rent-A-Center, Inc.		389		6,166
Calavo Growers, Inc.		108		6,162
Luminex Corp.*		316		6,130
Depomed, Inc.*		440		6,129
Seaboard Corp.*		2		6,006
Merit Medical Systems, Inc.*		323		5,972
AMAG Pharmaceuticals, Inc.*		252		5,897
Orthofix International N.V.*		138		5,730
Insmed, Inc.*		451		5,714
Apollo Education Group, Inc. — Class A*		692		5,685
Navigant Consulting, Inc.*		354		5,597
Intra-Cellular Therapies, Inc.*		196		5,449
Coca-Cola Bottling Company Consolidated		34		5,432
ImmunoGen, Inc.*		632		5,385
Inogen, Inc.*		115		5,173
Dynavax Technologies Corp.*		268		5,156
Providence Service Corp.*		100		5,107
Central Garden & Pet Co. — Class A*		310		5,050
USANA Health Sciences, Inc.*		41		4,978
PharMerica Corp.*		223		4,931
Tootsie Roll Industries, Inc.		141		4,930
ICF International, Inc.*		143		4,915
Anika Therapeutics, Inc.*		107		4,785
Exact Sciences Corp.*		703		4,738
LDR Holding Corp.*		185		4,716
Capella Education Co.		89		4,685
Inovio Pharmaceuticals, Inc.*		527		4,590
National Healthcare Corp.		73		4,548
Spectranetics Corp.*		311		4,516
Cempra, Inc.*		257		4,503
LendingTree, Inc.*		46		4,498
Endologix, Inc.*		537		4,489
RPX Corp.*		398		4,481
US Physical Therapy, Inc.		89		4,426
NutriSystem, Inc.		212		4,424
Triple-S Management Corp. — Class B*		177		4,400
McGrath RentCorp		175		4,389
TriNet Group, Inc.*		302		4,334
MacroGenics, Inc.*		231		4,331
Resources Connection, Inc.		276		4,295
Viad Corp.		147		4,287
Omeros Corp.*		277		4,249
John B Sanfilippo & Son, Inc.		61		4,214
Acceleron Pharma, Inc.*		159		4,196
Alder Biopharmaceuticals, Inc.*		171		4,188
Kelly Services, Inc. — Class A		218		4,168
Cerus Corp.*		699		4,145
Momenta Pharmaceuticals, Inc.*		448		4,140
Vascular Solutions, Inc.*		127		4,131

124 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares			Value
Heron Therapeutics, Inc.*		214	��	$	4,064
PDL BioPharma, Inc.		1,203			4,006
SciClone Pharmaceuticals, Inc.*		364			4,004
Capital Senior Living Corp.*		216			4,000
HeartWare International, Inc.*		127			3,990
Atrion Corp.		10			3,954
Clovis Oncology, Inc.*		204			3,917
Incorporated Research Holdings, Inc. — Class A*		95			3,915
Strayer Education, Inc.*		80			3,900
Supernus Pharmaceuticals, Inc.*		252			3,843
Inter Parfums, Inc.		124			3,832
Pacific Biosciences of California, Inc.*		444			3,774
Theravance Biopharma, Inc.*		199			3,741
Paylocity Holding Corp.*		114			3,732
Coherus Biosciences, Inc.*		173			3,673
CBIZ, Inc.*		363			3,663
Ennis, Inc.		187			3,656
Weis Markets, Inc.		81			3,650
Lexicon Pharmaceuticals, Inc.*		305			3,645
Quidel Corp.*		211			3,642
Ingles Markets, Inc. — Class A		97			3,638
Epizyme, Inc.*		294			3,563
National Beverage Corp.*		84			3,555
Keryx Biopharmaceuticals, Inc.*		760			3,549
Kforce, Inc.		180			3,524
AtriCure, Inc.*		208			3,501
Arena Pharmaceuticals, Inc.*		1,775			3,497
Retrophin, Inc.*		255			3,483
Lannett Company, Inc.*		194			3,478
Phibro Animal Health Corp. — Class A		128			3,461
Enanta Pharmaceuticals, Inc.*		116			3,407
Geron Corp.*		1,159			3,384
LHC Group, Inc.*		95			3,378
Accuray, Inc.*		579			3,347
Relypsa, Inc.*		239			3,238
Sage Therapeutics, Inc.*		101			3,238
Genomic Health, Inc.*		130			3,220
Heidrick & Struggles International, Inc.		134			3,176
Spectrum Pharmaceuticals, Inc.*		491			3,123
Invacare Corp.		237			3,121
Sangamo BioSciences, Inc.*		510			3,086
Revlon, Inc. — Class A*		84			3,058
Array BioPharma, Inc.*		1,035			3,053
OraSure Technologies, Inc.*		413			2,986
SP Plus Corp.*		123			2,959
Weight Watchers International, Inc.*		202			2,935
MannKind Corp.*		1,810			2,914
Smart & Final Stores, Inc.*		178			2,884
Performance Food Group Co.*		122			2,849
Chefs’ Warehouse, Inc.*		138			2,800
Albany Molecular Research, Inc.*		183			2,798
Amphastar Pharmaceuticals, Inc.*		233			2,796
Xencor, Inc.*		208			2,791
NewLink Genetics Corp.*		153			2,785
Rockwell Medical, Inc.*		369			2,771
Insys Therapeutics, Inc.*		172			2,750
Cross Country Healthcare, Inc.*		235			2,733
Celldex Therapeutics, Inc.*		722			2,729
Raptor Pharmaceutical Corp.*		590			2,714
Quad/Graphics, Inc.		209			2,704
Omega Protein Corp.*		159			2,693
Hackett Group, Inc.		176			2,660
NeoGenomics, Inc.*		393			2,649
Universal American Corp.		366			2,613
James River Group Holdings Ltd.		81			2,613
Accelerate Diagnostics, Inc.*		180			2,587
Vanda Pharmaceuticals, Inc.*		307			2,567
Eagle Pharmaceuticals, Inc.*		63			2,552
Adeptus Health, Inc. — Class A*		45			2,499
American Public Education, Inc.*		119			2,455
Forrester Research, Inc.		73			2,454
CorVel Corp.*		62			2,444
K12, Inc.*		247			2,443
Carriage Services, Inc. — Class A		112			2,420
Medifast, Inc.		80			2,415
Cardiovascular Systems, Inc.*		232			2,406
Atara Biotherapeutics, Inc.*		124			2,360
Agenus, Inc.*		560			2,330
Dermira, Inc.*		112			2,316
BioTelemetry, Inc.*		198			2,313
Intersect ENT, Inc.*		121			2,299
Healthways, Inc.*		227			2,290
Landauer, Inc.		69			2,282
AngioDynamics, Inc.*		184			2,261
Career Education Corp.*		498			2,261
Revance Therapeutics, Inc.*		128			2,235
Progenics Pharmaceuticals, Inc.*		511			2,228
TG Therapeutics, Inc.*		259			2,207
Monster Worldwide, Inc.*		667			2,174
Corcept Therapeutics, Inc.*		454			2,125
Akebia Therapeutics, Inc.*		234			2,108
STAAR Surgical Co.*		285			2,106
Arrowhead Research Corp.*		436			2,102
Tejon Ranch Co.*		100			2,057
La Jolla Pharmaceutical Co.*		97			2,028
Synergy Pharmaceuticals, Inc.*		734			2,026
CryoLife, Inc.		187			2,010
Advaxis, Inc.*		221			1,996
Sucampo Pharmaceuticals, Inc. — Class A*		182			1,989
Great Lakes Dredge & Dock Corp.*		443			1,976
Sagent Pharmaceuticals, Inc.*		162			1,972
ANI Pharmaceuticals, Inc.*		58			1,952
XenoPort, Inc.*		431			1,944
Almost Family, Inc.*		52			1,936
Natural Health Trends Corp.		58			1,923

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 125

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
K2M Group Holdings, Inc.*		129	$	1,913
Seneca Foods Corp. — Class A*		55		1,911
CSS Industries, Inc.		68		1,899
Infinity Pharmaceuticals, Inc.*		359		1,892
ServiceSource International, Inc.*		431		1,836
Trevena, Inc.*		222		1,836
Aerie Pharmaceuticals, Inc.*		150		1,824
MGP Ingredients, Inc.		74		1,794
Cytokinetics, Inc.*		254		1,791
Immunomedics, Inc.*		707		1,768
Vectrus, Inc.*		77		1,752
Loxo Oncology, Inc.*		64		1,750
SurModics, Inc.*		95		1,749
Spark Therapeutics, Inc.*		59		1,741
Editas Medicine, Inc.*		50		1,725
Mirati Therapeutics, Inc.*		80		1,712
Chimerix, Inc.*		334		1,707
Utah Medical Products, Inc.		27		1,689
RTI Surgical, Inc.*		421		1,684
Lion Biotechnologies, Inc.*		330		1,676
GenMark Diagnostics, Inc.*		309		1,628
Esperion Therapeutics, Inc.*		96		1,623
OvaScience, Inc.*		171		1,623
Seres Therapeutics, Inc.*		61		1,620
PTC Therapeutics, Inc.*		248		1,597
Otonomy, Inc.*		107		1,596
Farmer Brothers Co.*		57		1,589
Franklin Covey Co.*		90		1,583
Foundation Medicine, Inc.*		87		1,582
Galena Biopharma, Inc.*		1,162		1,580
Zogenix, Inc.*		171		1,580
Elizabeth Arden, Inc.*		191		1,564
Penumbra, Inc.*		34		1,564
Concert Pharmaceuticals, Inc.*		113		1,544
Surgery Partners, Inc.*		116		1,538
Exactech, Inc.*		75		1,520
Karyopharm Therapeutics, Inc.*		169		1,507
BioCryst Pharmaceuticals, Inc.*		532		1,506
Civitas Solutions, Inc.*		86		1,499
Barrett Business Services, Inc.		52		1,495
NanoString Technologies, Inc.*		98		1,492
Nutraceutical International Corp.*		61		1,485
Teligent, Inc.*		303		1,485
Oxford Immunotec Global plc*		147		1,457
Ascent Capital Group, Inc. — Class A*		98		1,451
Organovo Holdings, Inc.*		667		1,447
Regulus Therapeutics, Inc.*		207		1,435
Natural Grocers by Vitamin Cottage, Inc.*		66		1,404
TransEnterix, Inc.*		327		1,390
Aralez Pharmaceuticals, Inc.*		389		1,381
InVivo Therapeutics Holdings Corp.*		194		1,354
Vital Therapies, Inc.*		149		1,351
LeMaitre Vascular, Inc.		87		1,350
Paratek Pharmaceuticals, Inc.*		89		1,350
ARC Document Solutions, Inc.*		299		1,346
Rigel Pharmaceuticals, Inc.*		646		1,344
Cellular Biomedicine Group, Inc.*		71		1,324
Versartis, Inc.*		165		1,323
Amplify Snack Brands, Inc.*		92		1,317
CRA International, Inc.*		67		1,316
MoneyGram International, Inc.*		215		1,316
Curis, Inc.*		816		1,314
CytRx Corp.*		485		1,300
Village Super Market, Inc. — Class A		53		1,280
Limoneira Co.		84		1,277
OncoMed Pharmaceuticals, Inc.*		124		1,254
Bridgepoint Education, Inc.*		124		1,250
Blueprint Medicines Corp.*		69		1,245
Idera Pharmaceuticals, Inc.*		627		1,241
Tetraphase Pharmaceuticals, Inc.*		265		1,227
Sequenom, Inc.*		866		1,221
BioSpecifics Technologies Corp.*		35		1,219
RadNet, Inc.*		252		1,217
Alarm.com Holdings, Inc.*		51		1,209
Aratana Therapeutics, Inc.*		217		1,198
Heska Corp.*		42		1,197
Genocea Biosciences, Inc.*		154		1,192
Pfenex, Inc.*		120		1,180
BioTime, Inc.*		410		1,177
PFSweb, Inc.*		88		1,155
AAC Holdings, Inc.*		58		1,148
Tandem Diabetes Care, Inc.*		130		1,132
Electro Rent Corp.		121		1,120
National Research Corp. — Class A		72		1,120
Sorrento Therapeutics, Inc.*		208		1,119
Durect Corp.*		825		1,114
Aimmune Therapeutics, Inc.*		82		1,112
Everi Holdings, Inc.*		483		1,106
Axovant Sciences Ltd.*		96		1,102
BioDelivery Sciences International, Inc.*		339		1,095
Foamix Pharmaceuticals Ltd.*		166		1,082
BioScrip, Inc.*		503		1,076
Cutera, Inc.*		95		1,069
Immune Design Corp.*		82		1,066
VIVUS, Inc.*		761		1,065
Ignyta, Inc.*		157		1,063
Ocular Therapeutix, Inc.*		110		1,063
Anthera Pharmaceuticals, Inc.*		291		1,053
Navidea Biopharmaceuticals, Inc.*		1,105		1,044
Trovagene, Inc.*		217		1,009
Antares Pharma, Inc.*		1,135		988
Civeo Corp.*		787		968
Flexion Therapeutics, Inc.*		102		938
Avexis, Inc.*		34		926
SeaSpine Holdings Corp.*		63		922
Applied Genetic Technologies Corp.*		65		909

126 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Oncothyreon, Inc.*		696	$	884
Adamas Pharmaceuticals, Inc.*		61		882
Care.com, Inc.*		141		867
Cara Therapeutics, Inc.*		139		865
Collectors Universe, Inc.		52		863
Endocyte, Inc.*		275		853
Liberty Tax, Inc.		43		842
Senomyx, Inc.*		321		835
Zafgen, Inc.*		121		808
Inventure Foods, Inc.*		143		808
Addus HomeCare Corp.*		47		808
Osiris Therapeutics, Inc.		139		794
Global Blood Therapeutics, Inc.*		50		793
Aduro Biotech, Inc.*		61		781
Synutra International, Inc.*		156		775
Alico, Inc.		28		773
Ardelyx, Inc.*		97		754
Glaukos Corp.*		44		742
Harvard Bioscience, Inc.*		245		740
T2 Biosystems, Inc.*		75		740
Avalanche Biotechnologies, Inc.*		143		739
Nature’s Sunshine Products, Inc.		77		739
Nobilis Health Corp.*		234		730
Entellus Medical, Inc.*		40		728
Collegium Pharmaceutical, Inc.*		40		726
Five Star Quality Care, Inc.*		317		726
ConforMIS, Inc.*		65		699
Medgenics, Inc.*		155		682
Aegerion Pharmaceuticals, Inc.*		184		681
CTI BioPharma Corp.*		1,268		674
Universal Technical Institute, Inc.		155		668
CPI Card Group, Inc.		81		667
CorMedix, Inc.*		250		663
CDI Corp.		104		653
Pendrell Corp.*		1,219		646
Catalyst Pharmaceuticals, Inc.*		552		646
Vitae Pharmaceuticals, Inc.*		97		643
Teladoc, Inc.*		66		634
Genesis Healthcare, Inc.*		269		624
Craft Brew Alliance, Inc.*		74		609
Natera, Inc.*		63		600
Dicerna Pharmaceuticals, Inc.*		111		595
Novocure Ltd.*		41		594
Bellicum Pharmaceuticals, Inc.*		61		570
Neff Corp. — Class A*		76		565
Invitae Corp.*		54		552
Stemline Therapeutics, Inc.*		115		536
Veracyte, Inc.*		99		535
Assembly Biosciences, Inc.*		105		527
Volt Information Sciences, Inc.*		70		527
XOMA Corp.*		669		517
Aclaris Therapeutics, Inc.*		27		512
ChemoCentryx, Inc.*		205		510
Unilife Corp.*		738		502
Northwest Biotherapeutics, Inc.*		343		501
Peregrine Pharmaceuticals, Inc.*		1,174		494
Fibrocell Science, Inc.*		192		480
Agile Therapeutics, Inc.*		76		472
Patriot National, Inc.*		61		470
CytomX Therapeutics, Inc.*		36		464
Calithera Biosciences, Inc.*		81		460
Cidara Therapeutics, Inc.*		35		445
Proteon Therapeutics, Inc.*		55		426
Orexigen Therapeutics, Inc.*		750		422
Chiasma, Inc.*		46		421
Second Sight Medical Products, Inc.*		87		420
Affimed N.V.*		112		419
Cambium Learning Group, Inc.*		95		406
iRadimed Corp.*		21		402
Sientra, Inc.*		58		397
Tokai Pharmaceuticals, Inc.*		70		393
Alimera Sciences, Inc.*		222		389
Neos Therapeutics, Inc.*		35		378
Verastem, Inc.*		237		374
Lifeway Foods, Inc.*		34		368
Asterias Biotherapeutics, Inc.*		77		362
Edge Therapeutics, Inc.*		39		357
REGENXBIO, Inc.*		33		356
Nuvectra Corp.*		62		337
Pernix Therapeutics Holdings, Inc.*		319		335
MyoKardia, Inc.*		29		311
Corium International, Inc.*		76		293
XBiotech, Inc.*		30		284
Alliance HealthCare Services, Inc.*		37		266
NantKwest, Inc.*		32		263
Voyager Therapeutics, Inc.*		27		236
Threshold Pharmaceuticals, Inc.*		468		215
Abeona Therapeutics, Inc.*		83		212
Dimension Therapeutics, Inc.*		27		211
aTyr Pharma, Inc.*		44		173
EndoChoice Holdings, Inc.*		31		162
Arcadia Biosciences, Inc.*		58		161
Zynerba Pharmaceuticals, Inc.*		17		161
Synta Pharmaceuticals Corp.*		666		160
Tobira Therapeutics, Inc.*		19		155
vTv Therapeutics, Inc. — Class A*		30		155
Invuity, Inc.*		21		152
Catabasis Pharmaceuticals, Inc.*		22		111
Lantheus Holdings, Inc.*		58		110
Oncocyte Corp.*		21		97
Nivalis Therapeutics, Inc.*		23		96
Carbylan Therapeutics, Inc.*		90		58
Fairway Group Holdings Corp.*		151		53
SFX Entertainment, Inc.*		336		13
Total Consumer, Non-cyclical				2,506,443

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 127

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Consumer, Cyclical - 2.6%
Vail Resorts, Inc.		267	$	35,698
Casey’s General Stores, Inc.		285		32,296
Burlington Stores, Inc.*		553		31,100
Pool Corp.		319		27,989
Texas Roadhouse, Inc. — Class A		513		22,357
American Eagle Outfitters, Inc.		1,320		22,004
Tenneco, Inc.*		424		21,841
Cracker Barrel Old Country Store, Inc.		141		21,526
Buffalo Wild Wings, Inc.*		139		20,589
Cheesecake Factory, Inc.		358		19,006
CalAtlantic Group, Inc.		564		18,849
Allegiant Travel Co. — Class A		98		17,449
Five Below, Inc.*		400		16,536
Hawaiian Holdings, Inc.*		350		16,517
Big Lots, Inc.		364		16,486
Jack in the Box, Inc.		254		16,223
Abercrombie & Fitch Co. — Class A		510		16,085
Dana Holding Corp.		1,121		15,795
Cooper Tire & Rubber Co.		422		15,622
Pinnacle Entertainment, Inc.*		444		15,584
Bloomin’ Brands, Inc.		909		15,335
Steven Madden Ltd.*		413		15,297
Beacon Roofing Supply, Inc.*		363		14,887
Lithia Motors, Inc. — Class A		166		14,498
Deckers Outdoor Corp.*		240		14,378
G-III Apparel Group Ltd.*		292		14,275
TRI Pointe Group, Inc.*		1,185		13,959
Chico’s FAS, Inc.		1,051		13,947
Wolverine World Wide, Inc.		757		13,944
Ascena Retail Group, Inc.*		1,259		13,925
DreamWorks Animation SKG, Inc. — Class A*		557		13,897
Core-Mark Holding Company, Inc.		169		13,783
Churchill Downs, Inc.		93		13,753
Herman Miller, Inc.		437		13,500
Express, Inc.*		620		13,274
Marriott Vacations Worldwide Corp.		190		12,825
HNI Corp.		326		12,769
Sonic Corp.		360		12,658
Columbia Sportswear Co.		210		12,619
Children’s Place, Inc.		151		12,604
HSN, Inc.		238		12,450
Liberty TripAdvisor Holdings, Inc. — Class A*		549		12,166
PriceSmart, Inc.		143		12,095
Boyd Gaming Corp.*		585		12,086
UniFirst Corp.		109		11,894
Genesco, Inc.*		162		11,705
DineEquity, Inc.		124		11,585
Asbury Automotive Group, Inc.*		186		11,130
Mobile Mini, Inc.		336		11,094
Gentherm, Inc.*		263		10,938
Papa John’s International, Inc.		201		10,892
G&K Services, Inc. — Class A		147		10,768
Dorman Products, Inc.*		196		10,666
Meritage Homes Corp.*		290		10,573
SeaWorld Entertainment, Inc.		501		10,551
Restoration Hardware Holdings, Inc.*		245		10,265
La-Z-Boy, Inc.		375		10,028
Group 1 Automotive, Inc.		170		9,977
Penn National Gaming, Inc.*		585		9,764
First Cash Financial Services, Inc.		207		9,534
Steelcase, Inc. — Class A		611		9,116
Caleres, Inc.		321		9,081
Interface, Inc. — Class A		485		8,992
Essendant, Inc.		281		8,972
Popeyes Louisiana Kitchen, Inc.*		169		8,798
La Quinta Holdings, Inc.*		687		8,588
American Axle & Manufacturing Holdings, Inc.*		556		8,557
Guess?, Inc.		454		8,522
ScanSource, Inc.*		196		7,915
KB Home		551		7,868
Knoll, Inc.		358		7,751
iRobot Corp.*		218		7,695
SkyWest, Inc.		379		7,576
International Speedway Corp. — Class A		204		7,530
Select Comfort Corp.*		384		7,445
Cato Corp. — Class A		193		7,440
Krispy Kreme Doughnuts, Inc.*		476		7,421
Diamond Resorts International, Inc.*		305		7,412
Oxford Industries, Inc.		107		7,194
Cash America International, Inc.		186		7,187
MDC Holdings, Inc.		286		7,167
Bob Evans Farms, Inc.		153		7,144
Virgin America, Inc.*		185		7,134
Finish Line, Inc. — Class A		338		7,132
Cooper-Standard Holding, Inc.*		99		7,112
Buckle, Inc.		208		7,045
American Woodmark Corp.*		94		7,011
National CineMedia, Inc.		451		6,860
TiVo, Inc.*		712		6,771
Vitamin Shoppe, Inc.*		218		6,749
Belmond Ltd. — Class A*		710		6,738
Red Robin Gourmet Burgers, Inc.*		103		6,640
Wabash National Corp.*		498		6,575
Universal Electronics, Inc.*		106		6,571
BJ’s Restaurants, Inc.*		158		6,568
Wesco Aircraft Holdings, Inc.*		453		6,519
Dave & Buster’s Entertainment, Inc.*		166		6,437
Denny’s Corp.*		619		6,413
Fiesta Restaurant Group, Inc.*		195		6,392
Mattress Firm Holding Corp.*		150		6,359
Tailored Brands, Inc.		354		6,337
Cavco Industries, Inc.*		65		6,075
Hibbett Sports, Inc.*		167		5,995
Ethan Allen Interiors, Inc.		187		5,950
Francesca’s Holdings Corp.*		309		5,920

128 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Zoe’s Kitchen, Inc.*		142	$	5,537
Crocs, Inc.*		565		5,435
Carmike Cinemas, Inc.*		180		5,407
Meritor, Inc.*		670		5,400
Callaway Golf Co.		572		5,217
Standard Motor Products, Inc.		146		5,059
Motorcar Parts of America, Inc.*		132		5,013
Rush Enterprises, Inc. — Class A*		260		4,742
Ruth’s Hospitality Group, Inc.		256		4,713
Outerwall, Inc.		127		4,698
Navistar International Corp.*		374		4,682
Pier 1 Imports, Inc.		661		4,634
Barnes & Noble, Inc.		372		4,598
BMC Stock Holdings, Inc.*		275		4,571
ClubCorp Holdings, Inc.		321		4,507
Biglari Holdings, Inc.*		12		4,461
Winnebago Industries, Inc.		198		4,445
Nautilus, Inc.*		230		4,444
Sonic Automotive, Inc. — Class A		240		4,435
AMC Entertainment Holdings, Inc. — Class A		156		4,366
Tower International, Inc.		155		4,216
Interval Leisure Group, Inc.		287		4,144
Fred’s, Inc. — Class A		272		4,056
Regis Corp.*		264		4,010
H&E Equipment Services, Inc.		228		3,997
Installed Building Products, Inc.*		146		3,885
Modine Manufacturing Co.*		351		3,865
Superior Industries International, Inc.		172		3,798
Chuy’s Holdings, Inc.*		121		3,759
Douglas Dynamics, Inc.		164		3,757
Carrols Restaurant Group, Inc.*		260		3,754
MarineMax, Inc.*		187		3,641
Scientific Games Corp. — Class A*		368		3,470
Taylor Morrison Home Corp. — Class A*		238		3,361
M/I Homes, Inc.*		180		3,357
Movado Group, Inc.		118		3,249
Vera Bradley, Inc.*		156		3,173
Haverty Furniture Companies, Inc.		149		3,153
Libbey, Inc.		160		2,976
Shoe Carnival, Inc.		110		2,966
Tile Shop Holdings, Inc.*		197		2,937
Zumiez, Inc.*		146		2,908
Del Frisco’s Restaurant Group, Inc.*		173		2,868
Kimball International, Inc. — Class B		252		2,860
DTS, Inc.*		130		2,831
Iconix Brand Group, Inc.*		350		2,818
Party City Holdco, Inc.*		184		2,767
Caesars Entertainment Corp.*		406		2,761
PetMed Express, Inc.		148		2,650
Tuesday Morning Corp.*		322		2,634
Lumber Liquidators Holdings, Inc.*		198		2,598
Hooker Furniture Corp.		79		2,595
Marcus Corp.		135		2,558
Bassett Furniture Industries, Inc.		79		2,517
Unifi, Inc.*		109		2,497
LGI Homes, Inc.*		103		2,494
Ruby Tuesday, Inc.*		455		2,448
Eros International plc*		207		2,383
Eldorado Resorts, Inc.*		207		2,368
Barnes & Noble Education, Inc.*		235		2,303
Isle of Capri Casinos, Inc.*		162		2,268
Daktronics, Inc.		281		2,220
Conn’s, Inc.*		178		2,218
Kirkland’s, Inc.		126		2,206
Federal-Mogul Holdings Corp.*		222		2,193
Potbelly Corp.*		159		2,164
Veritiv Corp.*		58		2,161
Malibu Boats, Inc. — Class A*		130		2,132
WCI Communities, Inc.*		113		2,100
Caesars Acquisition Co. — Class A*		339		2,075
William Lyon Homes — Class A*		143		2,072
Beazer Homes USA, Inc.*		236		2,058
Citi Trends, Inc.		114		2,033
PC Connection, Inc.		78		2,013
Culp, Inc.		76		1,993
Fox Factory Holding Corp.*		124		1,960
Century Communities, Inc.*		111		1,895
Stage Stores, Inc.		234		1,886
Flexsteel Industries, Inc.		43		1,878
Planet Fitness, Inc. — Class A*		114		1,851
NACCO Industries, Inc. — Class A		30		1,722
Titan International, Inc.		317		1,705
Speedway Motorsports, Inc.		86		1,705
Sequential Brands Group, Inc.*		263		1,681
Horizon Global Corp.*		133		1,673
Sportsman’s Warehouse Holdings, Inc.*		132		1,663
Miller Industries, Inc.		82		1,663
Perry Ellis International, Inc.*		90		1,657
Arctic Cat, Inc.		95		1,596
Stein Mart, Inc.		215		1,576
America’s Car-Mart, Inc.*		63		1,575
Winmark Corp.		16		1,568
Shake Shack, Inc. — Class A*		42		1,567
Habit Restaurants, Inc. — Class A*		83		1,546
Strattec Security Corp.		26		1,492
Big 5 Sporting Goods Corp.		134		1,489
Ollie’s Bargain Outlet Holdings, Inc.*		63		1,476
Titan Machinery, Inc.*		126		1,457
Reading International, Inc. — Class A*		121		1,450
Monarch Casino & Resort, Inc.*		74		1,440
Metaldyne Performance Group, Inc.		84		1,412
Hovnanian Enterprises, Inc. — Class A*		875		1,365
Destination XL Group, Inc.*		263		1,360
Build-A-Bear Workshop, Inc. — Class A*		104		1,351
El Pollo Loco Holdings, Inc.*		99		1,321
Weyco Group, Inc.		48		1,278

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 129

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
West Marine, Inc.*		131	$	1,191
Lifetime Brands, Inc.		79		1,191
Jamba, Inc.*		96		1,187
Green Brick Partners, Inc.*		156		1,184
EZCORP, Inc. — Class A*		380		1,129
Cherokee, Inc.*		63		1,121
Intrawest Resorts Holdings, Inc.*		131		1,120
Freshpet, Inc.*		152		1,114
J Alexander’s Holdings, Inc.*		101		1,067
Performance Sports Group Ltd.*		333		1,059
Bojangles’, Inc.*		61		1,038
JAKKS Pacific, Inc.*		139		1,034
AV Homes, Inc.*		90		1,022
Noodles & Co.*		83		984
Wingstop, Inc.*		43		975
Superior Uniform Group, Inc.		54		962
New Home Company, Inc.*		77		944
Escalade, Inc.		73		859
Bravo Brio Restaurant Group, Inc.*		110		853
Johnson Outdoors, Inc. — Class A		37		822
Boot Barn Holdings, Inc.*		87		818
Kona Grill, Inc.*		62		803
Papa Murphy’s Holdings, Inc.*		66		789
Black Diamond, Inc.*		166		750
Systemax, Inc.*		83		728
Vince Holding Corp.*		113		715
Duluth Holdings, Inc.*		36		702
Container Store Group, Inc.*		116		681
Christopher & Banks Corp.*		273		652
VOXX International Corp. — Class A*		145		648
Marine Products Corp.		78		592
Commercial Vehicle Group, Inc.*		220		583
Skullcandy, Inc.*		161		573
Tilly’s, Inc. — Class A*		83		555
MCBC Holdings, Inc.*		33		464
Castle Brands, Inc.*		488		459
Accuride Corp.*		284		440
Flex Pharma, Inc.*		40		439
Blue Bird Corp.*		37		401
Fogo De Chao, Inc.*		24		375
Empire Resorts, Inc.*		23		314
Morgans Hotel Group Co.*		198		273
bebe stores, Inc.*		208		114
Total Consumer, Cyclical				1,579,148
Industrial - 2.5%
Berry Plastics Group, Inc.*		876		31,667
FEI Co.		305		27,148
Curtiss-Wright Corp.		325		24,594
Woodward, Inc.		453		23,566
Teledyne Technologies, Inc.*		259		22,829
EMCOR Group, Inc.		460		22,356
CLARCOR, Inc.		368		21,266
Tech Data Corp.*		269		20,651
Littelfuse, Inc.		165		20,313
Belden, Inc.		313		19,212
Generac Holdings, Inc.*		507		18,881
EnerSys		326		18,165
Louisiana-Pacific Corp.*		1,045		17,890
XPO Logistics, Inc.*		525		16,118
Coherent, Inc.*		175		16,083
Dycom Industries, Inc.*		248		16,038
Universal Display Corp.*		295		15,960
Rexnord Corp.*		747		15,104
Masonite International Corp.*		221		14,476
Barnes Group, Inc.		402		14,082
HEICO Corp. — Class A		293		13,947
Esterline Technologies Corp.*		217		13,903
Hillenbrand, Inc.		462		13,837
Granite Construction, Inc.		289		13,814
IMAX Corp.*		443		13,773
Sanmina Corp.*		575		13,444
Proto Labs, Inc.*		171		13,182
Tetra Tech, Inc.		442		13,181
Matson, Inc.		319		12,814
Applied Industrial Technologies, Inc.		295		12,804
Universal Forest Products, Inc.		148		12,701
RBC Bearings, Inc.*		172		12,601
KLX, Inc.*		386		12,406
Mueller Industries, Inc.		418		12,298
Moog, Inc. — Class A*		269		12,288
Vishay Intertechnology, Inc.		993		12,125
John Bean Technologies Corp.		214		12,072
Swift Transportation Co. — Class A*		646		12,036
Knight Transportation, Inc.		459		12,003
Itron, Inc.*		282		11,765
Simpson Manufacturing Company, Inc.		308		11,756
Mueller Water Products, Inc. — Class A		1,180		11,658
Drew Industries, Inc.		177		11,410
Watts Water Technologies, Inc. — Class A		206		11,357
Franklin Electric Company, Inc.		349		11,227
Hub Group, Inc. — Class A*		265		10,809
Actuant Corp. — Class A		437		10,798
Headwaters, Inc.*		541		10,733
AZZ, Inc.		189		10,697
Smith & Wesson Holding Corp.*		394		10,488
Trex Company, Inc.*		218		10,449
Advanced Energy Industries, Inc.*		300		10,437
MSA Safety, Inc.		215		10,396
Forward Air Corp.		227		10,288
MasTec, Inc.*		490		9,918
Exponent, Inc.		191		9,742
Plexus Corp.*		246		9,722
EnPro Industries, Inc.		167		9,633
OSI Systems, Inc.*		145		9,496
Brady Corp. — Class A		350		9,394
Apogee Enterprises, Inc.		214		9,392

130 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Sturm Ruger & Company, Inc.		137	$	9,368
Nordic American Tankers Ltd.		654		9,214
Benchmark Electronics, Inc.*		384		8,851
Werner Enterprises, Inc.		325		8,827
Comfort Systems USA, Inc.		274		8,705
KapStone Paper and Packaging Corp.		625		8,656
Kaman Corp.		199		8,495
HEICO Corp.		141		8,478
Knowles Corp.*		640		8,435
Fabrinet*		260		8,411
AAON, Inc.		300		8,400
II-VI, Inc.*		385		8,358
Methode Electronics, Inc.		281		8,216
Rogers Corp.*		137		8,202
Briggs & Stratton Corp.		327		7,822
Albany International Corp. — Class A		208		7,819
Atlas Air Worldwide Holdings, Inc.*		183		7,735
TASER International, Inc.*		392		7,695
Scorpio Tankers, Inc.		1,311		7,643
Aerojet Rocketdyne Holdings, Inc.*		459		7,518
ESCO Technologies, Inc.		191		7,445
Greif, Inc. — Class A		225		7,369
Standex International Corp.		94		7,314
Badger Meter, Inc.		106		7,050
US Ecology, Inc.		159		7,021
Primoris Services Corp.		284		6,901
Tennant Co.		134		6,898
Heartland Express, Inc.		369		6,845
Newport Corp.*		292		6,716
Rofin-Sinar Technologies, Inc.*		205		6,605
Gibraltar Industries, Inc.*		227		6,492
Astec Industries, Inc.		139		6,487
US Concrete, Inc.*		107		6,375
Cubic Corp.		159		6,354
Federal Signal Corp.		459		6,086
AAR Corp.		260		6,050
Ship Finance International Ltd.		434		6,028
Boise Cascade Co.*		290		6,009
Air Transport Services Group, Inc.*		387		5,952
Encore Wire Corp.		152		5,917
Echo Global Logistics, Inc.*		217		5,894
Astronics Corp.*		154		5,875
Lindsay Corp.		82		5,872
CIRCOR International, Inc.		126		5,845
TriMas Corp.*		332		5,817
Aegion Corp. — Class A*		269		5,673
Sun Hydraulics Corp.		166		5,510
Greenbrier Companies, Inc.		193		5,335
Altra Industrial Motion Corp.		192		5,334
Advanced Drainage Systems, Inc.		247		5,261
Saia, Inc.*		183		5,151
Multi-Color Corp.		93		4,962
Chart Industries, Inc.*		224		4,865
Hyster-Yale Materials Handling, Inc.		69		4,595
Raven Industries, Inc.		277		4,438
General Cable Corp.		359		4,383
Summit Materials, Inc. — Class A*		222		4,318
Quanex Building Products Corp.		248		4,305
Continental Building Products, Inc.*		231		4,287
Tutor Perini Corp.*		275		4,274
AVX Corp.		339		4,261
Patrick Industries, Inc.*		93		4,221
Builders FirstSource, Inc.*		370		4,170
Insteel Industries, Inc.		135		4,127
Aerovironment, Inc.*		145		4,106
ArcBest Corp.		190		4,102
FARO Technologies, Inc.*		127		4,091
Lydall, Inc.*		125		4,065
Global Brass & Copper Holdings, Inc.		158		3,942
DHT Holdings, Inc.		681		3,923
Alamo Group, Inc.		70		3,900
MYR Group, Inc.*		153		3,842
CTS Corp.		243		3,825
TAL International Group, Inc.*		244		3,767
Griffon Corp.		237		3,662
Kadant, Inc.		80		3,613
Gorman-Rupp Co.		139		3,604
GSI Group, Inc.*		252		3,568
Blount International, Inc.*		357		3,563
PGT, Inc.*		350		3,444
Nortek, Inc.*		71		3,429
Argan, Inc.		95		3,340
Haynes International, Inc.		91		3,322
Marten Transport Ltd.		175		3,276
Harsco Corp.		587		3,199
Checkpoint Systems, Inc.*		308		3,117
Trinseo S.A.*		84		3,092
PowerSecure International, Inc.*		165		3,084
Mistras Group, Inc.*		123		3,047
National Presto Industries, Inc.		36		3,015
GasLog Ltd.		305		2,971
Stoneridge, Inc.*		204		2,970
Frontline Ltd.		349		2,921
Tredegar Corp.		184		2,892
TTM Technologies, Inc.*		433		2,879
NCI Building Systems, Inc.*		199		2,826
Park-Ohio Holdings Corp.		64		2,740
NN, Inc.		195		2,668
TimkenSteel Corp.		293		2,666
Chase Corp.		50		2,630
American Railcar Industries, Inc.		64		2,607
GP Strategies Corp.*		95		2,603
Roadrunner Transportation Systems, Inc.*		206		2,567
Teekay Tankers Ltd. — Class A		696		2,554
Park Electrochemical Corp.		150		2,402
Kimball Electronics, Inc.*		214		2,390

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 131

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Textainer Group Holdings Ltd.		161	$	2,389
Tidewater, Inc.		345		2,356
Hornbeck Offshore Services, Inc.*		235		2,334
Columbus McKinnon Corp.		147		2,317
Myers Industries, Inc.		178		2,289
Multi Packaging Solutions International Ltd.*		139		2,256
YRC Worldwide, Inc.*		240		2,237
Ply Gem Holdings, Inc.*		158		2,220
Celadon Group, Inc.		200		2,096
Covenant Transportation Group, Inc. — Class A*		85		2,056
VSE Corp.		30		2,037
NVE Corp.		36		2,035
Mesa Laboratories, Inc.		21		2,023
Powell Industries, Inc.		67		1,997
Casella Waste Systems, Inc. — Class A*		290		1,943
LSI Industries, Inc.		159		1,868
Applied Optoelectronics, Inc.*		124		1,848
LSB Industries, Inc.*		145		1,849
AEP Industries, Inc.		28		1,848
ZAGG, Inc.*		202		1,820
Milacron Holdings Corp.*		108		1,781
Dorian LPG Ltd.*		184		1,730
Fluidigm Corp.*		211		1,703
Kratos Defense & Security Solutions, Inc.*		332		1,643
DXP Enterprises, Inc.*		92		1,616
Hurco Companies, Inc.		48		1,584
Multi-Fineline Electronix, Inc.*		66		1,532
American Science & Engineering, Inc.		54		1,495
Graham Corp.		74		1,473
FreightCar America, Inc.		90		1,402
LB Foster Co. — Class A		76		1,380
USA Truck, Inc.*		72		1,356
Sparton Corp.*		73		1,313
Vishay Precision Group, Inc.*		92		1,289
Vicor Corp.*		121		1,268
CECO Environmental Corp.		203		1,261
Ducommun, Inc.*		81		1,235
Control4 Corp.*		153		1,218
CAI International, Inc.*		126		1,217
Olympic Steel, Inc.		66		1,142
Bel Fuse, Inc. — Class B		76		1,110
Ardmore Shipping Corp.		131		1,107
Orion Marine Group, Inc.*		205		1,062
NV5 Global, Inc.*		37		993
Navios Maritime Acquisition Corp.		602		957
Universal Truckload Services, Inc.		58		955
Heritage-Crystal Clean, Inc.*		92		914
TRC Companies, Inc.*		125		906
Hill International, Inc.*		268		903
Imprivata, Inc.*		67		846
Allied Motion Technologies, Inc.		46		828
Lawson Products, Inc.*		42		822
Radiant Logistics, Inc.*		229		818
Gener8 Maritime, Inc.*		106		748
Omega Flex, Inc.		21		730
Core Molding Technologies, Inc.*		56		699
Navios Maritime Holdings, Inc.		597		675
PAM Transportation Services, Inc.*		21		647
Northwest Pipe Co.*		70		645
Scorpio Bulkers, Inc.*		196		643
Nordic American Offshore Ltd.		139		623
Twin Disc, Inc.		61		618
Handy & Harman Ltd.*		19		520
Power Solutions International, Inc.*		34		469
Fenix Parts, Inc.*		101		465
Xerium Technologies, Inc.*		81		423
Golden Ocean Group Ltd.*		490		341
Safe Bulkers, Inc.		278		223
NL Industries, Inc.*		50		113
Eagle Bulk Shipping, Inc.*		163		59
Ultrapetrol Bahamas Ltd.*		156		42
Total Industrial				1,518,312
Technology - 2.2%
Tyler Technologies, Inc.*		247		31,766
Manhattan Associates, Inc.*		541		30,766
Microsemi Corp.*		797		30,532
Guidewire Software, Inc.*		515		28,056
EPAM Systems, Inc.*		359		26,807
MAXIMUS, Inc.		483		25,425
Cavium, Inc.*		406		24,830
Fair Isaac Corp.		228		24,189
Take-Two Interactive Software, Inc.*		620		23,356
Aspen Technology, Inc.*		626		22,617
j2 Global, Inc.		353		21,737
Blackbaud, Inc.		344		21,634
Synaptics, Inc.*		270		21,530
Integrated Device Technology, Inc.*		989		20,215
Convergys Corp.		725		20,134
SYNNEX Corp.		210		19,443
Qlik Technologies, Inc.*		670		19,376
CACI International, Inc. — Class A*		176		18,779
Monolithic Power Systems, Inc.		290		18,456
Science Applications International Corp.		338		18,029
ACI Worldwide, Inc.*		856		17,796
Fairchild Semiconductor International, Inc. — Class A*		854		17,080
Cirrus Logic, Inc.*		465		16,931
Medidata Solutions, Inc.*		405		15,677
Proofpoint, Inc.*		289		15,542
NetScout Systems, Inc.*		675		15,505
Verint Systems, Inc.*		450		15,021
Mentor Graphics Corp.		733		14,902
MKS Instruments, Inc.		391		14,722
Electronics for Imaging, Inc.*		343		14,540
CommVault Systems, Inc.*		332		14,332
Silicon Laboratories, Inc.*		313		14,072

132 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Entegris, Inc.*		1,028	$	14,001
Diebold, Inc.		476		13,761
Advanced Micro Devices, Inc.*		4,664		13,292
Cornerstone OnDemand, Inc.*		395		12,944
Intersil Corp. — Class A		967		12,929
ExlService Holdings, Inc.*		244		12,639
Cray, Inc.*		299		12,531
Rovi Corp.*		606		12,429
Acxiom Corp.*		573		12,285
MicroStrategy, Inc. — Class A*		68		12,221
Tessera Technologies, Inc.		386		11,966
Rambus, Inc.*		847		11,646
Syntel, Inc.*		230		11,484
FleetMatics Group plc*		280		11,399
CSG Systems International, Inc.		240		10,838
Power Integrations, Inc.		216		10,727
Semtech Corp.*		487		10,709
Ambarella, Inc.*		230		10,281
Imperva, Inc.*		195		9,848
Stratasys Ltd.*		373		9,668
Demandware, Inc.*		245		9,580
Inphi Corp.*		281		9,369
Super Micro Computer, Inc.*		270		9,202
Synchronoss Technologies, Inc.*		284		9,185
Bottomline Technologies de, Inc.*		300		9,147
Progress Software Corp.*		371		8,949
BroadSoft, Inc.*		214		8,635
Sykes Enterprises, Inc.*		286		8,631
QLogic Corp.*		640		8,602
Paycom Software, Inc.*		231		8,224
Insight Enterprises, Inc.*		284		8,134
Virtusa Corp.*		217		8,129
RealPage, Inc.*		387		8,065
Ebix, Inc.		195		7,954
Envestnet, Inc.*		284		7,725
M/A-COM Technology Solutions Holdings, Inc.*		172		7,532
Luxoft Holding, Inc.*		135		7,429
Cabot Microelectronics Corp.		181		7,405
Omnicell, Inc.*		265		7,385
MaxLinear, Inc. — Class A*		379		7,012
Monotype Imaging Holdings, Inc.		293		7,009
Callidus Software, Inc.*		405		6,755
Pegasystems, Inc.		262		6,650
MTS Systems Corp.		109		6,633
HubSpot, Inc.*		137		5,976
Veeco Instruments, Inc.*		296		5,766
ManTech International Corp. — Class A		178		5,694
Quality Systems, Inc.		366		5,578
Diodes, Inc.*		275		5,528
SPS Commerce, Inc.*		121		5,196
Brooks Automation, Inc.		495		5,148
Mercury Systems, Inc.*		251		5,095
Photronics, Inc.*		487		5,070
Lattice Semiconductor Corp.*		857		4,868
InvenSense, Inc. — Class A*		568		4,771
Interactive Intelligence Group, Inc.*		127		4,625
Qualys, Inc.*		182		4,606
Ultratech, Inc.*		202		4,412
Computer Programs & Systems, Inc.		82		4,274
Amkor Technology, Inc.*		725		4,270
2U, Inc.*		188		4,249
inContact, Inc.*		451		4,010
Silver Spring Networks, Inc.*		266		3,924
Applied Micro Circuits Corp.*		594		3,837
Cvent, Inc.*		171		3,659
Epiq Systems, Inc.		237		3,560
Globant S.A.*		112		3,456
CEVA, Inc.*		151		3,398
TeleTech Holdings, Inc.		119		3,303
Xura, Inc.*		166		3,265
pdvWireless, Inc.*		95		3,262
Rudolph Technologies, Inc.*		234		3,196
FormFactor, Inc.*		422		3,068
Nimble Storage, Inc.*		372		2,916
Pure Storage, Inc. — Class A*		210		2,874
Unisys Corp.*		366		2,818
SciQuest, Inc.*		202		2,804
Nanometrics, Inc.*		176		2,788
Actua Corp.*		298		2,697
PDF Solutions, Inc.*		197		2,636
Xcerra Corp.*		400		2,608
Glu Mobile, Inc.*		882		2,487
Engility Holdings, Inc.*		132		2,476
LivePerson, Inc.*		418		2,445
Vocera Communications, Inc.*		189		2,410
Axcelis Technologies, Inc.*		833		2,332
Cohu, Inc.		190		2,257
Tangoe, Inc.*		286		2,257
Press Ganey Holdings, Inc.*		74		2,226
InnerWorkings, Inc.*		272		2,162
Sapiens International Corporation N.V.		175		2,097
PROS Holdings, Inc.*		175		2,063
IXYS Corp.		182		2,042
Cascade Microtech, Inc.*		99		2,041
Mattson Technology, Inc.*		549		2,004
Benefitfocus, Inc.*		58		1,934
Silicon Graphics International Corp.*		255		1,816
Sigma Designs, Inc.*		259		1,761
Digi International, Inc.*		183		1,726
Digimarc Corp.*		56		1,697
Immersion Corp.*		204		1,685
Alpha & Omega Semiconductor Ltd.*		140		1,659
Exar Corp.*		288		1,656
Model N, Inc.*		153		1,648
American Software, Inc. — Class A		183		1,647
KEYW Holding Corp.*		245		1,627

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 133

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Avid Technology, Inc.*		237	$	1,602
QAD, Inc. — Class A		75		1,594
Five9, Inc.*		172		1,529
DSP Group, Inc.*		164		1,496
Brightcove, Inc.*		238		1,485
TubeMogul, Inc.*		113		1,462
Eastman Kodak Co.*		129		1,400
Datalink Corp.*		151		1,380
Seachange International, Inc.*		244		1,347
OPOWER, Inc.*		191		1,301
Jive Software, Inc.*		342		1,293
MobileIron, Inc.*		285		1,288
Ultra Clean Holdings, Inc.*		231		1,238
Ciber, Inc.*		578		1,220
Varonis Systems, Inc.*		65		1,186
Agilysys, Inc.*		112		1,144
New Relic, Inc.*		42		1,095
Carbonite, Inc.*		133		1,060
ExOne Co.*		76		999
Quantum Corp.*		1,580		964
Barracuda Networks, Inc.*		59		909
Evolent Health, Inc. — Class A*		84		887
Everyday Health, Inc.*		158		885
Castlight Health, Inc. — Class B*		247		823
Kopin Corp.*		488		810
EMCORE Corp.*		143		715
Amber Road, Inc.*		130		703
Park City Group, Inc.*		77		696
Workiva, Inc.*		54		629
MINDBODY, Inc. — Class A*		47		627
Hortonworks, Inc.*		54		610
Guidance Software, Inc.*		140		602
Digital Turbine, Inc.*		394		469
Instructure, Inc.*		24		431
Appfolio, Inc. — Class A*		35		428
Violin Memory, Inc.*		666		348
Imation Corp.*		224		347
Apigee Corp.*		38		316
Xactly Corp.*		35		240
Code Rebel Corp.*		7		33
Total Technology				1,321,687
Communications - 1.2%
ViaSat, Inc.*		313		22,998
Houghton Mifflin Harcourt Co.*		903		18,006
WebMD Health Corp. — Class A*		277		17,350
Ciena Corp.*		905		17,213
Infinera Corp.*		976		15,675
Sinclair Broadcast Group, Inc. — Class A		486		14,944
InterDigital, Inc.		265		14,747
Finisar Corp.*		762		13,899
GrubHub, Inc.*		551		13,847
Cogent Communications Holdings, Inc.		338		13,193
Meredith Corp.		269		12,777
New York Times Co. — Class A		1,008		12,560
Time, Inc.		803		12,398
Shutterfly, Inc.*		259		12,010
Media General, Inc.*		703		11,466
Stamps.com, Inc.*		105		11,159
Polycom, Inc.*		990		11,039
Anixter International, Inc.*		209		10,891
comScore, Inc.*		356		10,694
Plantronics, Inc.		258		10,111
Nexstar Broadcasting Group, Inc. — Class A		228		10,094
NeuStar, Inc. — Class A*		406		9,988
Consolidated Communications Holdings, Inc.		370		9,530
NETGEAR, Inc.*		236		9,527
Shenandoah Telecommunications Co.		355		9,496
DigitalGlobe, Inc.*		532		9,204
LogMeIn, Inc.*		181		9,133
West Corp.		383		8,740
NIC, Inc.		481		8,672
Zendesk, Inc.*		394		8,247
MDC Partners, Inc. — Class A		319		7,528
Ubiquiti Networks, Inc.*		225		7,486
Infoblox, Inc.*		435		7,438
ADTRAN, Inc.		366		7,401
Scholastic Corp.		196		7,325
EW Scripps Co. — Class A		434		6,766
8x8, Inc.*		646		6,499
Web.com Group, Inc.*		321		6,362
Wayfair, Inc. — Class A*		147		6,353
Gigamon, Inc.*		201		6,235
AVG Technologies N.V.*		300		6,225
Vonage Holdings Corp.*		1,362		6,224
RingCentral, Inc. — Class A*		393		6,190
Cincinnati Bell, Inc.*		1,538		5,952
Windstream Holdings, Inc.		739		5,676
Perficient, Inc.*		260		5,647
Ixia*		445		5,545
Atlantic Tele-Network, Inc.		73		5,536
New Media Investment Group, Inc.		328		5,458
Gray Television, Inc.*		463		5,426
Ruckus Wireless, Inc.*		553		5,425
Shutterstock, Inc.*		144		5,289
Globalstar, Inc.*		3,492		5,133
Marketo, Inc.*		255		4,990
CalAmp Corp.*		265		4,751
Quotient Technology, Inc.*		448		4,749
Iridium Communications, Inc.*		602		4,738
General Communication, Inc. — Class A*		256		4,690
Gogo, Inc.*		412		4,536
Endurance International Group Holdings, Inc.*		430		4,528
Bankrate, Inc.*		489		4,484
ORBCOMM, Inc.*		438		4,437
EarthLink Holdings Corp.		756		4,287
HealthStream, Inc.*		185		4,087

134 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Inteliquent, Inc.		246	$	3,948
World Wrestling Entertainment, Inc. — Class A		220		3,885
Oclaro, Inc.*		717		3,872
ShoreTel, Inc.*		473		3,519
FTD Companies, Inc.*		133		3,491
Entravision Communications Corp. — Class A		467		3,474
Q2 Holdings, Inc.*		143		3,438
Rubicon Project, Inc.*		188		3,437
Loral Space & Communications, Inc.*		96		3,372
VASCO Data Security International, Inc.*		215		3,311
ePlus, Inc.*		40		3,220
XO Group, Inc.*		194		3,114
Lands’ End, Inc.*		121		3,087
GTT Communications, Inc.*		179		2,961
Global Eagle Entertainment, Inc.*		340		2,897
NeoPhotonics Corp.*		204		2,864
Spok Holdings, Inc.		159		2,784
Comtech Telecommunications Corp.		119		2,781
Wix.com Ltd.*		137		2,777
Sonus Networks, Inc.*		363		2,733
Textura Corp.*		145		2,701
DHI Group, Inc.*		326		2,631
Angie’s List, Inc.*		321		2,590
Chegg, Inc.*		560		2,498
Lionbridge Technologies, Inc.*		472		2,388
Intralinks Holdings, Inc.*		295		2,325
Calix, Inc.*		326		2,311
Extreme Networks, Inc.*		734		2,283
FairPoint Communications, Inc.*		153		2,277
RetailMeNot, Inc.*		282		2,259
Blue Nile, Inc.		87		2,237
Straight Path Communications, Inc. — Class B*		69		2,141
Journal Media Group, Inc.		179		2,141
Lumos Networks Corp.*		166		2,131
Harmonic, Inc.*		649		2,122
Boingo Wireless, Inc.*		268		2,069
TrueCar, Inc.*		359		2,007
Safeguard Scientifics, Inc.*		151		2,001
Entercom Communications Corp. — Class A*		186		1,968
Hawaiian Telcom Holdco, Inc.*		83		1,955
IDT Corp. — Class B		121		1,886
ChannelAdvisor Corp.*		159		1,789
Zix Corp.*		422		1,658
Alliance Fiber Optic Products, Inc.*		107		1,583
Blucora, Inc.*		300		1,548
VirnetX Holding Corp.*		332		1,524
Black Box Corp.		113		1,522
Tribune Publishing Co.		193		1,490
A10 Networks, Inc.*		249		1,474
Reis, Inc.		62		1,460
1-800-Flowers.com, Inc. — Class A*		183		1,442
Bazaarvoice, Inc.*		447		1,408
Central European Media Enterprises Ltd. — Class A*		540		1,377
Daily Journal Corp.*		7		1,370
Clearfield, Inc.*		83		1,334
Crown Media Holdings, Inc. — Class A*		252		1,280
Etsy, Inc.*		147		1,279
Overstock.com, Inc.*		87		1,251
United Online, Inc.*		107		1,235
Telenav, Inc.*		207		1,221
RigNet, Inc.*		89		1,218
NTELOS Holdings Corp.*		127		1,168
Box, Inc. — Class A*		94		1,152
KVH Industries, Inc.*		118		1,127
Internap Corp.*		403		1,100
TechTarget, Inc.*		144		1,068
Marchex, Inc. — Class B		238		1,059
Saga Communications, Inc. — Class A		26		1,042
Hemisphere Media Group, Inc.*		74		972
Liquidity Services, Inc.*		177		917
Harte-Hanks, Inc.		354		896
QuinStreet, Inc.*		261		893
Aerohive Networks, Inc.*		170		848
Limelight Networks, Inc.*		446		807
HC2 Holdings, Inc.*		192		733
Preformed Line Products Co.		20		730
RealNetworks, Inc.*		170		690
Marin Software, Inc.*		219		661
Rapid7, Inc.*		50		654
Rocket Fuel, Inc.*		194		611
Townsquare Media, Inc. — Class A*		50		561
Intelsat S.A.*		206		519
Novatel Wireless, Inc.*		276		489
Cumulus Media, Inc. — Class A*		1,046		486
Sizmek, Inc.*		158		458
EVINE Live, Inc.*		365		427
Travelzoo, Inc.*		51		414
ModusLink Global Solutions, Inc.*		277		407
Corindus Vascular Robotics, Inc.*		165		163
Connecture, Inc.*		49		125
MaxPoint Interactive, Inc.*		50		89
Total Communications				724,619
Utilities - 0.8%
Piedmont Natural Gas Company, Inc.		578		34,581
IDACORP, Inc.		369		27,524
WGL Holdings, Inc.		365		26,414
Portland General Electric Co.		651		25,708
Cleco Corp.		444		24,513
ONE Gas, Inc.		386		23,585
New Jersey Resources Corp.		628		22,878
Southwest Gas Corp.		344		22,652
Black Hills Corp.		375		22,549
Laclede Group, Inc.		318		21,545
NorthWestern Corp.		345		21,304

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 135

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
ALLETE, Inc.		358	$	20,073
PNM Resources, Inc.		584		19,692
Avista Corp.		457		18,636
South Jersey Industries, Inc.		502		14,282
El Paso Electric Co.		296		13,580
MGE Energy, Inc.		254		13,272
Dynegy, Inc.*		884		12,703
Ormat Technologies, Inc.		273		11,259
American States Water Co.		277		10,903
Northwest Natural Gas Co.		200		10,770
Empire District Electric Co.		320		10,576
California Water Service Group		351		9,379
Otter Tail Corp.		275		8,146
Chesapeake Utilities Corp.		111		6,990
NRG Yield, Inc. — Class C		458		6,522
Abengoa Yield plc		360		6,401
Talen Energy Corp.*		612		5,508
Unitil Corp.		102		4,334
SJW Corp.		116		4,217
Connecticut Water Service, Inc.		82		3,698
Middlesex Water Co.		118		3,640
NRG Yield, Inc. — Class A		253		3,433
York Water Co.		94		2,869
Atlantic Power Corp.		894		2,199
PICO Holdings, Inc.*		169		1,729
Artesian Resources Corp. — Class A		56		1,566
EnerNOC, Inc.*		198		1,481
Consolidated Water Company Ltd.		108		1,314
Ameresco, Inc. — Class A*		147		701
Genie Energy Ltd. — Class B*		92		700
Spark Energy, Inc. — Class A		22		396
Total Utilities				504,222
Basic Materials - 0.6%
Sensient Technologies Corp.		343		21,767
Olin Corp.		1,210		21,018
PolyOne Corp.		654		19,784
HB Fuller Co.		370		15,707
Minerals Technologies, Inc.		255		14,497
Commercial Metals Co.		849		14,408
Balchem Corp.		228		14,141
Chemtura Corp.*		493		13,015
Carpenter Technology Corp.		370		12,665
Worthington Industries, Inc.		352		12,545
Axiall Corp.		515		11,247
Kaiser Aluminum Corp.		126		10,652
US Silica Holdings, Inc.		464		10,542
Stillwater Mining Co.*		885		9,426
Quaker Chemical Corp.		97		8,231
Stepan Co.		141		7,796
Neenah Paper, Inc.		122		7,767
Innospec, Inc.		178		7,718
Hecla Mining Co.		2,716		7,550
Schweitzer-Mauduit International, Inc.		223		7,020
PH Glatfelter Co.		317		6,571
Ferro Corp.*		535		6,350
Clearwater Paper Corp.*		130		6,306
A. Schulman, Inc.		215		5,852
Coeur Mining, Inc.*		997		5,603
Calgon Carbon Corp.		387		5,426
AK Steel Holding Corp.*		1,304		5,386
Univar, Inc.*		295		5,068
Aceto Corp.		213		5,018
Deltic Timber Corp.		80		4,812
Innophos Holdings, Inc.		144		4,451
Ferroglobe plc		477		4,202
Kraton Performance Polymers, Inc.*		229		3,962
Materion Corp.		148		3,919
Schnitzer Steel Industries, Inc. — Class A		194		3,577
Koppers Holdings, Inc.*		151		3,393
Cliffs Natural Resources, Inc.*		1,124		3,372
American Vanguard Corp.*		213		3,361
Tronox Ltd. — Class A		466		2,978
Rayonier Advanced Materials, Inc.		298		2,831
Hawkins, Inc.		78		2,815
Century Aluminum Co.*		361		2,545
Landec Corp.*		198		2,079
OMNOVA Solutions, Inc.*		344		1,913
Orchids Paper Products Co.		67		1,843
KMG Chemicals, Inc.		71		1,638
Oil-Dri Corporation of America		35		1,182
United States Lime & Minerals, Inc.		15		900
Kronos Worldwide, Inc.		154		881
Energy Fuels, Inc.*		320		707
Uranium Energy Corp.*		716		536
Intrepid Potash, Inc.*		412		457
Ryerson Holding Corp.*		80		445
Rentech, Inc.*		168		373
Valhi, Inc.		140		165
Horsehead Holding Corp.*		416		62
Total Basic Materials				358,475
Energy - 0.5%
PDC Energy, Inc.*		338		20,094
Parsley Energy, Inc. — Class A*		731		16,521
Western Refining, Inc.		522		15,185
RSP Permian, Inc.*		480		13,939
Carrizo Oil & Gas, Inc.*		426		13,172
Oil States International, Inc.*		378		11,914
Matador Resources Co.*		584		11,073
MRC Global, Inc.*		755		9,921
Oasis Petroleum, Inc.*		1,320		9,610
Pattern Energy Group, Inc.		409		7,799
SEACOR Holdings, Inc.*		134		7,296
SemGroup Corp. — Class A		322		7,213
McDermott International, Inc.*		1,750		7,158
Synergy Resources Corp.*		872		6,775
Delek US Holdings, Inc.		421		6,416

136 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Callon Petroleum Co.*		703	$	6,222
Forum Energy Technologies, Inc.*		435		5,742
Bristow Group, Inc.		255		4,825
Green Plains, Inc.		278		4,437
Helix Energy Solutions Group, Inc.*		777		4,351
Atwood Oceanics, Inc.		474		4,347
Thermon Group Holdings, Inc.*		235		4,126
Archrock, Inc.		509		4,072
Exterran Corp.*		251		3,880
TETRA Technologies, Inc.*		584		3,708
Matrix Service Co.*		196		3,469
Unit Corp.*		370		3,260
SunCoke Energy, Inc.		478		3,107
Renewable Energy Group, Inc.*		320		3,021
Flotek Industries, Inc.*		392		2,873
Newpark Resources, Inc.*		617		2,665
Plug Power, Inc.*		1,272		2,607
Tesco Corp.		286		2,462
REX American Resources Corp.*		43		2,385
Alon USA Energy, Inc.		228		2,353
Bill Barrett Corp.*		367		2,283
Par Pacific Holdings, Inc.*		116		2,176
Sanchez Energy Corp.*		387		2,125
FutureFuel Corp.		178		2,099
Panhandle Oil and Gas, Inc. — Class A		121		2,095
CARBO Ceramics, Inc.		144		2,045
Natural Gas Services Group, Inc.*		93		2,012
Parker Drilling Co.*		897		1,902
Northern Oil and Gas, Inc.*		452		1,803
PHI, Inc.*		92		1,738
Clean Energy Fuels Corp.*		522		1,529
Contango Oil & Gas Co.*		128		1,509
Trecora Resources*		148		1,424
Era Group, Inc.*		151		1,416
Solazyme, Inc.*		587		1,191
Geospace Technologies Corp.*		96		1,185
Fairmount Santrol Holdings, Inc.*		469		1,177
Gulfmark Offshore, Inc. — Class A*		187		1,154
EXCO Resources, Inc.*		1,158		1,145
FuelCell Energy, Inc.*		162		1,097
Pacific Ethanol, Inc.*		234		1,095
Pioneer Energy Services Corp.*		472		1,038
Westmoreland Coal Co.*		131		945
Ring Energy, Inc.*		179		904
Evolution Petroleum Corp.		180		875
Cloud Peak Energy, Inc.*		447		872
Basic Energy Services, Inc.*		313		864
TerraForm Global, Inc. — Class A		315		750
Sunrun, Inc.*		112		726
Jones Energy, Inc. — Class A*		212		706
Abraxas Petroleum Corp.*		689		696
Gastar Exploration, Inc.*		595		655
Adams Resources & Energy, Inc.		15		600
C&J Energy Services Ltd.*		414		584
Bonanza Creek Energy, Inc.*		365		580
Independence Contract Drilling, Inc.*		121		577
Ultra Petroleum Corp.*		1,123		559
W&T Offshore, Inc.*		255		558
ION Geophysical Corp.*		69		558
Halcon Resources Corp.*		539		518
Eclipse Resources Corp.*		352		507
Isramco, Inc.*		6		490
Enphase Energy, Inc.*		202		471
Energy XXI Ltd.		693		432
Vivint Solar, Inc.*		151		400
Clayton Williams Energy, Inc.*		43		384
Hallador Energy Co.		80		366
Key Energy Services, Inc.*		976		361
Stone Energy Corp.*		419		331
Peabody Energy Corp.		135		313
Approach Resources, Inc.*		265		307
Rex Energy Corp.*		353		271
Seventy Seven Energy, Inc.*		412		239
Erin Energy Corp.*		100		188
Triangle Petroleum Corp.*		342		185
SandRidge Energy, Inc.*		3,175		178
North Atlantic Drilling Ltd.*		52		142
TransAtlantic Petroleum Ltd.*		188		141
Earthstone Energy, Inc.*		9		109
Penn Virginia Corp.*		526		81
Total Energy				291,659
Diversified - 0.0%
HRG Group, Inc.*		577		8,038
National Bank Holdings Corp. — Class A		220		4,486
Resource America, Inc. — Class A		108		623
Total Diversified				13,147
Government - 0.0%
Banco Latinoamericano de Comercio Exterior S.A. — Class E		220		5,328
Total Common Stocks
(Cost $10,840,505)				11,958,389
WARRANTS†† - 0.0%
Magnum Hunter Resources Corp.
$8.50, 04/15/16		264		—
Tejon Ranch Co.
$10.50, 08/31/16†		29		—
Total Warrants
(Cost $150)				—
RIGHTS††† - 0.0%
Vince Holding Corp.
Expires 04/14/16††		113		29

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 137

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
RUSSELL 2000® FUND

	Shares		Value
Omthera Pharmaceuticals, Inc.
Expires 12/31/20		86	$	—
Leap Wireless International, Inc.
Expires 03/06/17		1,211		—
Dyax Corp.
Expires 01/25/17		757		—
Total Rights
(Cost $1,661)				29

	Face Amount
REPURCHASE AGREEMENTS††,1 - 73.9%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	32,840,675		32,840,675
HSBC Group issued 03/31/16 at 0.21% due 04/01/162		12,223,497		12,223,497
Total Repurchase Agreements
(Cost $45,064,172)				45,064,172
Total Investments - 93.5%
(Cost $55,906,488)			$	57,022,590
Other Assets & Liabilities, net - 6.5%				3,982,026
Total Net Assets - 100.0%			$	61,004,616

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $887,120)		8	$	41,311

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Barclays Bank plc April 2016 Russell 2000 Index Swap 0.40%3, Terminating 04/29/16 (Notional Value $36,815,351)		33,047	$	144,828
Goldman Sachs International April 2016 Russell 2000 Index Swap 0.40%3, Terminating 04/26/16 (Notional Value $10,643,563)		9,554		70,084
Credit Suisse Capital, LLC April 2016 Russell 2000 Index Swap 0.43%3, Terminating 04/26/16 (Notional Value $267,679)		240		9,433
(Total Notional Value $47,726,593)			$	224,345

*	Non-income producing security.
†	Value determined based on Level 1 inputs, unless otherwise noted — See Note 4.
††	Value determined based on Level 2 inputs, unless otherwise noted — See Note 4.
†††	Value determined based on Level 3 inputs, unless otherwise noted — 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 March 31, 2016.
3	Total Return based on Russell 2000 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	REIT — Real Estate Investment Trust
	See Sector Classification in Other Information section.

138 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
RUSSELL 2000® FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	11,957,749	$	—	$	640	$	—	$	—	$	11,958,389
Equity Futures Contracts		—		41,311		—		—		—		41,311
Equity Index Swap Agreements		—		—		—		224,345		—		224,345
Repurchase Agreements		—		—		45,064,172		—		—		45,064,172
Rights		—		—		29		—		—		29
Warrants		—		—		—		—		—		—
Total	$	11,957,749	$	41,311	$	45,064,841	$	224,345	$	—	$	57,288,246

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 139

RUSSELL 2000^® FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $10,842,316)	$	11,958,418
Repurchase agreements, at value (cost $45,064,172)		45,064,172
Total investments (cost $55,906,488)		57,022,590
Segregated cash with broker		3,734,200
Unrealized appreciation on swap agreements		224,345
Cash		15
Receivables:
Fund shares sold		105,868
Securities sold		32,445
Variation margin		27,250
Dividends		16,692
Interest		281
Foreign taxes reclaim		17
Total assets		61,163,703
Liabilities:
Payable for:
Securities purchased		60,276
Management fees		33,262
Fund shares redeemed		20,042
Distribution and service fees		12,990
Transfer agent and administrative fees		11,088
Portfolio accounting fees		6,652
Miscellaneous		14,777
Total liabilities		159,087
Commitments and contingent liabilities (Note 13)		—
Net assets	$	61,004,616
Net assets consist of:
Paid in capital	$	62,928,811
Accumulated net investment loss		(93,094	)
Accumulated net realized loss on investments		(3,212,859	)
Net unrealized appreciation on investments		1,381,758
Net assets	$	61,004,616
A-Class:
Net assets	$	11,993,136
Capital shares outstanding		357,353
Net asset value per share	$	33.56
Maximum offering price per share (Net asset value divided by 95.25%)	$	35.23
C-Class:
Net assets	$	2,760,423
Capital shares outstanding		89,684
Net asset value per share	$	30.78
H-Class:
Net assets	$	46,251,057
Capital shares outstanding		1,381,555
Net asset value per share	$	33.48

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $320)	$	212,437
Interest		18,725
Income from securities lending, net		3,692
Total investment income		234,854
Expenses:
Management fees		264,456
Transfer agent and administrative fees		88,153
Distribution and service fees:
A-Class		15,413
C-Class		33,517
H-Class		64,364
Portfolio accounting fees		52,893
Custodian fees		4,096
Trustees’ fees*		2,705
Miscellaneous		62,304
Total expenses		587,901
Net investment loss		(353,047	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(4,718,214	)
Swap agreements		470,905
Futures contracts		2,075,266
Foreign currency		(1	)
Net realized loss		(2,172,044	)
Net change in unrealized appreciation (depreciation) on:
Investments		897,469
Swap agreements		178,089
Futures contracts		(304,454	)
Net change in unrealized appreciation (depreciation)		771,104
Net realized and unrealized loss		(1,400,940	)
Net decrease in net assets resulting from operations	$	(1,753,987	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

140 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

RUSSELL 2000^® FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(353,047	)	$	(416,534	)
Net realized gain (loss) on investments		(2,172,044	)		13,808,708
Net change in unrealized appreciation (depreciation) on investments		771,104			(10,497,814	)
Net increase (decrease) in net assets resulting from operations		(1,753,987	)		2,894,360
Distributions to shareholders from:
Net realized gains
A-Class		(378,494	)		(428,859	)
C-Class		(84,593	)		(120,935	)
H-Class		(279,804	)		(2,896,710	)
Total distributions to shareholders		(742,891	)		(3,446,504	)
Capital share transactions:
Proceeds from sale of shares
A-Class		44,154,351			44,122,051
C-Class		14,311,898			22,066,473
H-Class		344,016,927			516,907,387
Distributions reinvested
A-Class		344,126			423,430
C-Class		76,580			105,736
H-Class		275,570			2,810,032
Cost of shares redeemed
A-Class		(44,563,233	)		(34,232,043	)
C-Class		(15,370,265	)		(21,273,536	)
H-Class		(325,825,130	)		(534,945,783	)
Net increase (decrease) from capital share transactions		17,420,824			(4,016,253	)
Net increase (decrease) in net assets		14,923,946			(4,568,397	)
Net assets:
Beginning of year		46,080,670			50,649,067
End of year	$	61,004,616		$	46,080,670
Accumulated net investment loss at end of year	$	(93,094	)	$	(368	)
Capital share activity:
Shares sold
A-Class		1,257,318			1,191,618
C-Class		422,747			636,256
H-Class		9,826,186			14,045,560
Shares issued from reinvestment of distributions
A-Class		9,852			11,478
C-Class		2,386			3,089
H-Class		7,908			76,360
Shares redeemed
A-Class		(1,267,797	)		(930,285	)
C-Class		(453,761	)		(612,792	)
H-Class		(9,171,878	)		(14,573,641	)
Net increase (decrease) in shares		632,961			(152,357	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 141

RUSSELL 2000^® 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	38.88		$	37.80		$	32.26		$	28.20		$	28.54
Income (loss) from investment operations:
Net investment income (loss)a		(.29	)		(.25	)		(.27	)		(.13	)		(.23	)
Net gain (loss) on investments (realized and unrealized)		(4.12	)		2.61			7.54			4.19			(.11	)
Total from investment operations		(4.41	)		2.36			7.27			4.06			(.34	)
Less distributions from:
Net realized gains		(.91	)		(1.28	)		(1.73	)		—			—
Total distributions		(.91	)		(1.28	)		(1.73	)		—			—
Net asset value, end of period	$	33.56		$	38.88		$	37.80		$	32.26		$	28.20
Total Returnb		(11.43	%)		6.42	%		22.87	%		14.40	%		(1.19	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,993		$	13,920		$	3,219		$	3,723		$	670
Ratios to average net assets:
Net investment income (loss)		(0.83	%)		(0.67	%)		(0.77	%)		(0.44	%)		(0.89	%)
Total expenses		1.59	%		1.57	%		1.60	%		1.55	%		1.58	%
Portfolio turnover rate		442	%		947	%		267	%		160	%		121	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	36.00		$	35.36		$	30.54		$	26.90		$	27.46
Income (loss) from investment operations:
Net investment income (loss)a		(.51	)		(.60	)		(.48	)		(.31	)		(.46	)
Net gain (loss) on investments (realized and unrealized)		(3.80	)		2.52			7.03			3.95			(.10	)
Total from investment operations		(4.31	)		1.92			6.55			3.64			(.56	)
Less distributions from:
Net realized gains		(.91	)		(1.28	)		(1.73	)		—			—
Total distributions		(.91	)		(1.28	)		(1.73	)		—			—
Net asset value, end of period	$	30.78		$	36.00		$	35.36		$	30.54		$	26.90
Total Returnb		(12.07	%)		5.61	%		21.78	%		13.53	%		(2.04	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,760		$	4,259		$	3,245		$	2,599		$	6,285
Ratios to average net assets:
Net investment income (loss)		(1.56	%)		(1.77	%)		(1.47	%)		(1.19	%)		(1.83	%)
Total expenses		2.35	%		2.57	%		2.37	%		2.31	%		2.34	%
Portfolio turnover rate		442	%		947	%		267	%		160	%		121	%

142 | THE RYDEX FUNDS 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	38.79		$	37.73		$	32.25		$	28.16		$	28.52
Income (loss) from investment operations:
Net investment income (loss)a		(.35	)		(.28	)		(.27	)		(.12	)		(.22	)
Net gain (loss) on investments (realized and unrealized)		(4.05	)		2.62			7.48			4.21			(.14	)
Total from investment operations		(4.40	)		2.34			7.21			4.09			(.36	)
Less distributions from:
Net realized gains		(.91	)		(1.28	)		(1.73	)		—			—
Total distributions		(.91	)		(1.28	)		(1.73	)		—			—
Net asset value, end of period	$	33.48		$	38.79		$	37.73		$	32.25		$	28.16
Total Returnb		(11.43	%)		6.37	%		22.69	%		14.52	%		(1.26	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	46,251		$	27,902		$	44,185		$	101,053		$	63,447
Ratios to average net assets:
Net investment income (loss)		(0.97	%)		(0.77	%)		(0.78	%)		(0.42	%)		(0.83	%)
Total expenses		1.60	%		1.58	%		1.59	%		1.52	%		1.58	%
Portfolio turnover rate		442	%		947	%		267	%		160	%		121	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 143

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Inverse Russell 2000^® Strategy Fund maintained a daily correlation of over 99% to its benchmark of -100% of the daily price movement of the Russell 2000 Index. Inverse Russell 2000^® Strategy Fund H-Class returned 5.22% while the Russell 2000 Index returned -1.34% over the same time period.

Among sectors, the biggest performance contributors to the underlying index during the period were Utilities and Telecommunications Services. The Health Care sector detracted the most from return, followed by the Energy sector.

Synageva BioPharma Corp., Dyax Corp., and Piedmont Natural Gas Company, Inc. were the largest contributors to the performance of the underlying index for the year. Puma Biotechnology, Inc., Celldex Therapeutics, Inc., and SemGroup Corp. – Class A were the leading detractors from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

144 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Largest Holding (% of Total Net Assets)
Guggenheim Strategy Fund I	16.0%
“Largest Holding” excludes any temporary cash or derivative 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.

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	5.27%	-12.31%	-11.19%
A-Class Shares with sales charge†	0.26%	-13.16%	-11.62%
C-Class Shares	4.50%	-12.94%	-11.85%
C-Class Shares with CDSC‡	3.50%	-12.94%	-11.85%
H-Class Shares	5.22%	-12.28%	-11.18%
Russell 2000 Index	-1.34%	11.40%	8.15%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Russell 2000 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on H-Class shares and A-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 145

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE RUSSELL 2000® STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 16.0%
Guggenheim Strategy Fund I1		266,451	$	6,610,653
Total Mutual Funds
(Cost $6,607,961)				6,610,653

	Face Amount
FEDERAL AGENCY NOTES†† - 8.5%
Fannie Mae2
0.44% due 09/08/173	$	2,000,000		1,995,140
Federal Farm Credit Bank4
0.47% due 12/08/173		1,500,000		1,496,903
Total Federal Agency Notes
(Cost $3,498,568)				3,492,043
REPURCHASE AGREEMENTS††,5 - 21.5%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		5,515,997		5,515,997
HSBC Group issued 03/31/16 at 0.21% due 04/01/166		3,365,285		3,365,285
Total Repurchase Agreements
(Cost $8,881,282)				8,881,282
Total Investments - 46.0%
(Cost $18,987,811)			$	18,983,978
Other Assets & Liabilities, net - 54.0%				22,253,328
Total Net Assets - 100.0%			$	41,237,306

	Contracts		Unrealized Loss
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2016 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $1,108,900)		10	$	(2,499	)

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Credit Suisse Capital, LLC April 2016 Russell 2000 Index Swap 0.43%7, Terminating 04/26/16 (Notional Value $1,129,301)		1,014	$	(39,967	)
Barclays Bank plc April 2016 Russell 2000 Index Swap 0.40%7, Terminating 04/29/16 (Notional Value $25,766,501)		23,129		(43,898	)
Goldman Sachs International April 2016 Russell 2000 Index Swap 0.40%7, Terminating 04/26/16 (Notional Value $13,311,664)		11,949		(258,997	)
(Total Notional Value $40,207,466)			$	(342,862	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
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	Variable rate security. Rate indicated is rate effective at March 31, 2016.
4	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
5	Repurchase Agreements — See Note 5.
6	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
7	Total Return based on Russell 2000 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

146 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INVERSE RUSSELL 2000® STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Federal Agency Notes	$	—	$	—	$	3,492,043	$	—	$	—	$	3,492,043
Mutual Funds		6,610,653		—		—		—		—		6,610,653
Repurchase Agreements		—		—		8,881,282		—		—		8,881,282
Total	$	6,610,653	$	—	$	12,373,325	$	—	$	—	$	18,983,978

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	2,499	$	—	$	—	$	—	$	2,499
Equity Index Swap Agreements		—		—		—		342,862		—		342,862
Total	$	—	$	2,499	$	—	$	342,862	$	—	$	345,361

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 147

INVERSE RUSSELL 2000^® STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $3,498,568)	$	3,492,043
Investments in affiliated issuers, at value (cost $6,607,961)		6,610,653
Repurchase agreements, at value (cost $8,881,282)		8,881,282
Total investments (cost $18,987,811)		18,983,978
Segregated cash with broker		984,000
Receivables:
Fund shares sold		21,690,564
Dividends		14,231
Interest		1,125
Total assets		41,673,898
Liabilities:
Unrealized depreciation on swap agreements		342,862
Payable for:
Management fees		23,946
Fund shares redeemed		14,424
Securities purchased		14,230
Distribution and service fees		7,786
Transfer agent and administrative fees		6,652
Portfolio accounting fees		2,661
Variation margin		1,900
Miscellaneous		22,131
Total liabilities		436,592
Commitments and contingent liabilities (Note 13)		—
Net assets	$	41,237,306
Net assets consist of:
Paid in capital	$	89,219,118
Accumulated net investment loss		(185,674	)
Accumulated net realized loss on investments		(47,446,944	)
Net unrealized depreciation on investments		(349,194	)
Net assets	$	41,237,306
A-Class:
Net assets	$	2,794,721
Capital shares outstanding		90,866
Net asset value per share	$	30.76
Maximum offering price per share (Net asset value divided by 95.25%)	$	32.29
C-Class:
Net assets	$	1,729,092
Capital shares outstanding		61,597
Net asset value per share	$	28.07
H-Class:
Net assets	$	36,713,493
Capital shares outstanding		1,190,861
Net asset value per share	$	30.83

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	116,197
Interest		39,124
Total investment income		155,321
Expenses:
Management fees		328,717
Transfer agent and administrative fees		91,310
Distribution and service fees:
A-Class		3,204
C-Class		16,908
H-Class		83,879
Portfolio accounting fees		36,524
Custodian fees		4,282
Trustees’ fees*		1,951
Miscellaneous		67,128
Total expenses		633,903
Net investment loss		(478,582	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		87
Investments in affiliated issuers		(101,064	)
Swap agreements		1,102,774
Futures contracts		(2,809,872	)
Net realized loss		(1,808,075	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(7,933	)
Investments in affiliated issuers		2,692
Swap agreements		(270,032	)
Futures contracts		(8,259	)
Net change in unrealized appreciation (depreciation)		(283,532	)
Net realized and unrealized loss		(2,091,607	)
Net decrease in net assets resulting from operations	$	(2,570,189	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

148 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE RUSSELL 2000^® STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(478,582	)	$	(356,667	)
Net realized loss on investments		(1,808,075	)		(2,623,240	)
Net change in unrealized appreciation (depreciation) on investments		(283,532	)		124,941
Net decrease in net assets resulting from operations		(2,570,189	)		(2,854,966	)
Capital share transactions:
Proceeds from sale of shares
A-Class		9,085,916			15,968,383
C-Class		1,059,867			6,202,950
H-Class		505,306,463			115,461,343
Cost of shares redeemed
A-Class		(6,953,249	)		(21,273,561	)
C-Class		(1,084,198	)		(4,906,679	)
H-Class		(471,955,412	)		(119,810,604	)
Net increase (decrease) from capital share transactions		35,459,387			(8,358,168	)
Net increase (decrease) in net assets		32,889,198			(11,213,134	)
Net assets:
Beginning of year		8,348,108			19,561,242
End of year	$	41,237,306		$	8,348,108
Accumulated net investment loss at end of year	$	(185,674	)	$	(45,359	)
Capital share activity:
Shares sold
A-Class		278,747			473,685
C-Class		36,768			204,651
H-Class		15,797,309			3,469,349
Shares redeemed
A-Class		(218,466	)		(664,308	)
C-Class		(37,693	)		(160,695	)
H-Class		(14,803,569	)		(3,625,353	)
Net increase (decrease) in shares		1,053,096			(302,671	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 149

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	29.22		$	33.01		$	43.21		$	52.38		$	59.31
Income (loss) from investment operations:
Net investment income (loss)a		(.39	)		(.46	)		(.61	)		(.81	)		(1.02	)
Net gain (loss) on investments (realized and unrealized)		1.93			(3.33	)		(9.59	)		(8.36	)		(5.91	)
Total from investment operations		1.54			(3.79	)		(10.20	)		(9.17	)		(6.93	)
Net asset value, end of period	$	30.76		$	29.22		$	33.01		$	43.21		$	52.38
Total Returnb		5.27	%		(11.48	%)		(23.59	%)		(17.53	%)		(11.68	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,795		$	894		$	7,302		$	635		$	612
Ratios to average net assets:
Net investment income (loss)		(1.23	%)		(1.40	%)		(1.69	%)		(1.60	%)		(1.66	%)
Total expensesc		1.70	%		1.71	%		1.72	%		1.72	%		1.75	%
Portfolio turnover rate		584	%		189	%		—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	26.86		$	30.59		$	40.30		$	49.22		$	56.14
Income (loss) from investment operations:
Net investment income (loss)a		(.58	)		(.63	)		(.83	)		(1.14	)		(1.41	)
Net gain (loss) on investments (realized and unrealized)		1.79			(3.10	)		(8.88	)		(7.78	)		(5.51	)
Total from investment operations		1.21			(3.73	)		(9.71	)		(8.92	)		(6.92	)
Net asset value, end of period	$	28.07		$	26.86		$	30.59		$	40.30		$	49.22
Total Returnb		4.50	%		(12.19	%)		(24.08	%)		(18.16	%)		(12.29	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,729		$	1,680		$	568		$	409		$	837
Ratios to average net assets:
Net investment income (loss)		(2.08	%)		(2.13	%)		(2.45	%)		(2.35	%)		(2.43	%)
Total expensesc		2.45	%		2.45	%		2.47	%		2.47	%		2.51	%
Portfolio turnover rate		584	%		189	%		—			—			—

150 | THE RYDEX FUNDS 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	29.30		$	33.11		$	43.26		$	52.42		$	59.37
Income (loss) from investment operations:
Net investment income (loss)a		(.41	)		(.46	)		(.65	)		(.84	)		(1.05	)
Net gain (loss) on investments (realized and unrealized)		1.94			(3.35	)		(9.50	)		(8.32	)		(5.90	)
Total from investment operations		1.53			(3.81	)		(10.15	)		(9.16	)		(6.95	)
Net asset value, end of period	$	30.83		$	29.30		$	33.11		$	43.26		$	52.42
Total Returnb		5.22	%		(11.51	%)		(23.46	%)		(17.46	%)		(11.72	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	36,713		$	5,775		$	11,691		$	12,822		$	17,283
Ratios to average net assets:
Net investment income (loss)		(1.28	%)		(1.41	%)		(1.69	%)		(1.62	%)		(1.70	%)
Total expensesc		1.70	%		1.70	%		1.72	%		1.74	%		1.77	%
Portfolio turnover rate		584	%		189	%		—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Reverse share split — Per share amounts for the periods presented through February 7, 2014 have been restated to reflect a 1:3 reverse share split effective February 7, 2014.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 151

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

DOW JONES INDUSTRIAL AVERAGE^® 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 Dow Jones Industrials Average^® Index (the “underlying index”).

The inception date for the Fund was December 1, 2015. For the abbreviated annual period ended March 31, 2016, the Dow Jones Industrial Average^® Fund H-Class returned -0.82%. Over the same period, its benchmark, the Dow Jones Industrial Average^® Index, returned -0.32%.

Sectors contributing the most to the performance of the underlying index for the abbreviated period were Health Care and Consumer Staples. The sector detracting the most was Financials, followed by Consumer Discretionary.

UnitedHealth Group, Inc., International Business Machines Corp., and 3M Company were the holdings contributing the most to the performance of the underlying index for the abbreviated period. Walt Disney Company, Boeing Company, and Goldman Sachs Group, Inc., detracted the most from the performance of the underlying index for the abbreviated period.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

Holdings Diversification (Market Exposure as % of Net Assets)

152 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
A-Class	December 1, 2015
C-Class	December 1, 2015
H-Class	December 1, 2015

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	6.0%
3M Co.	4.2%
Goldman Sachs Group, Inc.	3.9%
International Business Machines Corp.	3.8%
Home Depot, Inc.	3.3%
UnitedHealth Group, Inc.	3.2%
Boeing Co.	3.2%
McDonald’s Corp.	3.1%
Travelers Companies, Inc.	2.9%
Apple, Inc.	2.7%
Top Ten Total	36.3%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Period Ended March 31, 2016

	Since Inception (12/01/15)
A-Class Shares	-0.80%
A-Class Shares with sales charge‡	-5.51%
C-Class Shares	-1.06%
C-Class Shares with CDSC†	-2.05%
H-Class Shares	-0.82%
Dow Jones Industrial Average Index	-0.32%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Dow Jones Industrial Average Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on H-Class shares and A-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.
‡	Fund returns are calculated using the maximum sales charge of 4.75%.

THE RYDEX FUNDS ANNUAL REPORT | 153

SCHEDULE OF INVESTMENTS	March 31, 2016
DOW JONES INDUSTRIAL AVERAGE® FUND

	Shares		Value
COMMON STOCKS† - 64.4%
Industrial - 12.5%
3M Co.		15,954	$	2,658,416
Boeing Co.		15,954		2,025,201
United Technologies Corp.		15,954		1,596,995
Caterpillar, Inc.		15,954		1,221,119
General Electric Co.		15,954		507,178
Total Industrial				8,008,909
Financial - 11.7%
Goldman Sachs Group, Inc.		15,954		2,504,459
Travelers Companies, Inc.		15,954		1,861,991
Visa, Inc. — Class A		15,954		1,220,162
American Express Co.		15,954		979,576
JPMorgan Chase & Co.		15,954		944,796
Total Financial				7,510,984
Consumer, Non-cyclical - 11.2%
UnitedHealth Group, Inc.		15,954		2,056,471
Johnson & Johnson		15,954		1,726,222
Procter & Gamble Co.		15,954		1,313,174
Merck & Company, Inc.		15,954		844,126
Coca-Cola Co.		15,954		740,106
Pfizer, Inc.		15,954		472,877
Total Consumer, Non-cyclical				7,152,976
Consumer, Cyclical - 9.7%
Home Depot, Inc.		15,954		2,128,743
McDonald’s Corp.		15,954		2,005,099
Wal-Mart Stores, Inc.		15,954		1,092,689
NIKE, Inc. — Class B		15,954		980,692
Total Consumer, Cyclical				6,207,223
Technology - 8.7%
International Business Machines Corp.		15,954		2,416,234
Apple, Inc.		15,954		1,738,826
Microsoft Corp.		15,954		881,139
Intel Corp.		15,954		516,112
Total Technology				5,552,311
Communications - 4.5%
Walt Disney Co.		15,954	$	1,584,392
Verizon Communications, Inc.		15,954		862,792
Cisco Systems, Inc.		15,954		454,210
Total Communications				2,901,394
Energy - 4.5%
Chevron Corp.		15,954		1,522,011
Exxon Mobil Corp.		15,954		1,333,595
Total Energy				2,855,606
Basic Materials - 1.6%
EI du Pont de Nemours & Co.		15,954		1,010,207
Total Common Stocks
(Cost $40,446,285)				41,199,610
MUTUAL FUNDS† - 6.0%
Guggenheim Strategy Fund I1		155,640		3,861,421
Total Mutual Funds
(Cost $3,862,125)				3,861,421

	Face Amount
REPURCHASE AGREEMENTS††,2 - 26.5%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	12,646,618		12,646,618
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		4,300,388		4,300,388
Total Repurchase Agreements
(Cost $16,947,006)				16,947,006
Total Investments - 96.9%
(Cost $61,255,416)			$	62,008,037
Other Assets & Liabilities, net - 3.1%				1,997,781
Total Net Assets - 100.0%			$	64,005,818

154 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
DOW JONES INDUSTRIAL AVERAGE® FUND

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 Dow Jones Industrial Average Index Mini Futures Contracts (Aggregate Value of Contracts $7,212,720)		82	$	160,718

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Barclays Bank plc April 2016 Dow Jones Industrial Average Index Swap 0.40%3, Terminating 04/29/16 (Notional Value $15,592,789)		882	$	43,245

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	Total Return based on Dow Jones Industrial Average Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 155

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
DOW JONES INDUSTRIAL AVERAGE® FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	41,199,610	$	—	$	—	$	—	$	—	$	41,199,610
Equity Futures Contracts		—		160,718		—		—		—		160,718
Equity Index Swap Agreements		—		—		—		43,245		—		43,245
Mutual Funds		3,861,421		—		—		—		—		3,861,421
Repurchase Agreements		—		—		16,947,006		—		—		16,947,006
Total	$	45,061,031	$	160,718	$	16,947,006	$	43,245	$	—	$	62,212,000

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

156 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

DOW JONES INDUSTRIAL AVERAGE^® FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $40,446,285)	$	41,199,610
Investments in affiliated issuers, at value (cost $3,862,125)		3,861,421
Repurchase agreements, at value (cost $16,947,006)		16,947,006
Total investments (cost $61,255,416)		62,008,037
Segregated cash with broker		1,523,700
Unrealized appreciation on swap agreements		43,245
Receivables:
Fund shares sold		489,775
Dividends		10,382
Interest		106
Total assets		64,075,245
Liabilities:
Payable for:
Fund shares redeemed		19,275
Management fees		14,088
Variation margin		12,397
Securities purchased		5,214
Distribution and service fees		5,142
Transfer agent and administrative fees		4,696
Portfolio accounting fees		1,878
Miscellaneous		6,737
Total liabilities		69,427
Commitments and contingent liabilities (Note 13)		—
Net assets	$	64,005,818
Net assets consist of:
Paid in capital	$	63,399,480
Accumulated net investment loss		—
Accumulated net realized loss on investments		(350,246	)
Net unrealized appreciation on investments		956,584
Net assets	$	64,005,818
A-Class:
Net assets	$	44,351,286
Capital shares outstanding		894,092
Net asset value per share	$	49.60
Maximum offering price per share (Net asset value divided by 95.25%)	$	52.07
C-Class:
Net assets	$	731,849
Capital shares outstanding		14,793
Net asset value per share	$	49.47
H-Class:
Net assets	$	18,922,683
Capital shares outstanding		381,560
Net asset value per share	$	49.59

STATEMENT OF OPERATIONS

Period Ended March 31, 2016**

Investment Income:
Dividends from securities of unaffiliated issuers	$	57,676
Dividends from securities of affiliated issuers		11,161
Interest		2,458
Total investment income		71,295
Expenses:
Management fees		38,886
Transfer agent and administrative fees		12,962
Distribution and service fees:
A-Class		6,335
C-Class		1,785
H-Class		6,181
Portfolio accounting fees		5,185
Custodian fees		660
Trustees’ fees*		136
Miscellaneous		9,405
Total expenses		81,535
Net investment loss		(10,240	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(856,803	)
Investments in affiliated issuers		964
Swap agreements		336,032
Futures contracts		169,795
Net realized loss		(350,012	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		753,325
Investments in affiliated issuers		(704	)
Swap agreements		43,245
Futures contracts		160,718
Net change in unrealized appreciation (depreciation)		956,584
Net realized and unrealized gain		606,572
Net increase in net assets resulting from operations	$	596,332

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
**	Since commencement of operations: December 1, 2015.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 157

DOW JONES INDUSTRIAL AVERAGE^® FUND

STATEMENT OF CHANGES IN NET ASSETS

	Period Ended March 31, 2016a
Increase (Decrease) in NetAssetsfromOperations:
Net investment loss	$	(10,240	)
Net realized loss on investments		(350,012	)
Net change in unrealized appreciation (depreciation) on investments		956,584
Net increase in net assets resulting from operations		596,332
Capital share transactions:
Proceeds from sale of shares
A-Class		62,850,014
C-Class		930,648
H-Class		34,887,020
Cost of shares redeemed
A-Class		(19,048,769	)
C-Class		(221,789	)
H-Class		(15,987,638	)
Net increase from capital share transactions		63,409,486
Net increase in net assets		64,005,818
Net assets:
Beginning of period		—
End of period	$	64,005,818
Accumulated net investment loss at end of year	$	—
Capital share activity:
Shares sold
A-Class		1,299,093
C-Class		19,674
H-Class		716,927
Shares redeemed
A-Class		(405,001	)
C-Class		(4,881	)
H-Class		(335,367	)
Net increase in shares		1,290,445

^a Since commencement of operations: December 1, 2015.

158 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

DOW JONES INDUSTRIAL AVERAGE^® 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 period presented.

A-Class	Period Ended March 31, 2016a
Per Share Data
Net asset value, beginning of period	$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.03	)
Net gain (loss) on investments (realized and unrealized)		(.37	)
Total from investment operations		(.40	)
Net asset value, end of period	$	49.60
Total Returnd		(0.80	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	44,351
Ratios to average net assets:
Net investment income (loss)		(0.21	%)
Total expensesc		1.55	%
Portfolio turnover rate		98	%

C-Class	Period Ended March 31, 2016a
Per Share Data
Net asset value, beginning of period	$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.07	)
Net gain (loss) on investments (realized and unrealized)		(.46	)
Total from investment operations		(.53	)
Net asset value, end of period	$	49.47
Total Returnd		(1.06	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	732
Ratios to average net assets:
Net investment income (loss)		(0.43	%)
Total expensesc		2.30	%
Portfolio turnover rate		98	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 159

DOW JONES INDUSTRIAL AVERAGE^® 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 period presented.

H-Class	Period Ended March 31, 2016a
Per Share Data
Net asset value, beginning of period	$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.03	)
Net gain (loss) on investments (realized and unrealized)		(.38	)
Total from investment operations		(.41	)
Net asset value, end of period	$	49.59
Total Returnd		(0.82	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	18,923
Ratios to average net assets:
Net investment income (loss)		(0.17	%)
Total expensesc		1.55	%
Portfolio turnover rate		98	%

a	Since commencement of operations: December 1, 2015. 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	Does not include expenses of the underlying funds in which the Fund invests.
d	Total return does not reflect the impact of any applicable sales charges.

160 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, the Government Long Bond 1.2x Strategy Fund Investor Class returned 0.33%. The price movement of the Long Treasury Bond was -2.44% for the same period. The Fund maintained a daily correlation of over 99% to its benchmark.

The return of a comparison index, the Barclays Long Treasury Bond Index, was 2.77%.

The yield on the 30-year bond was 2.54% at the beginning of the period and 2.61% on March 31, 2016. Despite what appeared to be a tight range, the yield remained mostly above those levels during the period, hitting its low of 2.48% in April 2015 and reaching its high of 3.25% in June 2015. The year was more stable than the prior period, when government bond yields of many industrial economies, including the U.S., dipped to multiyear lows, as the U.S. Federal Reserve was winding down its quantitative easing program and debating when to restore some “normalization” to U.S. interest rates.

In December 2015, the Fed announced a 25-basis-point increase in the federal funds target rate. The result was the worst annual performance of risk assets since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concerns about plunging commodity prices, and slowing economic growth in China and other emerging market countries. At the beginning of 2016, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Treasury bonds benefited from a safe haven bid, driving yields to among their lowest of the period in the first quarter of 2016.

The period was also affected by continuation of quantitative easing programs, particularly in Europe and Japan. These conditions helped support the U.S. Treasury market, given the relative attractiveness of U.S. government bond yields.

Despite the relative health of the U.S. economy, markets are questioning the Fed’s resolve to increase rates further. Giving rise to this view are concerns that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. However, it appears that the Fed is biased toward normalizing interest rate policy. As long as core and headline inflation move closer to the Fed’s target in 2016, which support forecasts for a tighter labor market and a modest rise in oil prices, other Fed rate hikes remain a possibility in 2016.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

THE RYDEX FUNDS ANNUAL REPORT | 161

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2016

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

Inception Dates:
Investor Class	January 3, 1994
A-Class	March 31, 2004
C-Class	May 2, 2001
H-Class	September 18, 2014

The Fund invests principally in U.S. Government securities and in derivative investments such as futures contracts.

Largest Holdings (% of Total Net Assets)
U.S. Treasury Bond	61.0%
Guggenheim Strategy Fund I	26.3%
Total	87.3%
“Largest Holdings” excludes any temporary cash or derivative investments.

162 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	0.33%	13.09%	9.06%
A-Class Shares	0.12%	12.92%	8.86%
A-Class Shares with sales charge†	-4.64%	11.83%	8.33%
C-Class Shares	-0.62%	12.00%	7.98%
C-Class Shares with CDSC‡	-1.60%	12.00%	7.98%
Daily Price Movement of Long Treasury Bond**	-2.44%	6.57%	3.70%
Barclays Long Treasury Bond Index	2.77%	9.67%	7.97%
		1 Year	Since Inception (09/18/14)
H-Class Shares		0.26%	14.23%
Daily Price Movement of Long Treasury Bond**		-2.44%	9.34%
Barclays Long Treasury Bond Index		2.77%	12.02%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Barclays Long Treasury Bond Index and Daily Price Movement of Long Treasury Bond are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Does not reflect any interest.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 163

SCHEDULE OF INVESTMENTS	March 31, 2016
GOVERNMENT LONG BOND 1.2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 26.3%
Guggenheim Strategy Fund I1		1,258,949	$	31,234,529
Total Mutual Funds
(Cost $31,221,923)				31,234,529

	Face Amount
U.S. GOVERNMENT SECURITIES†† - 61.0%
U.S. Treasury Bond
2.50% due 02/15/46	$	74,300,000		72,442,501
Total U.S. Government Securities
(Cost $71,106,540)				72,442,501
REPURCHASE AGREEMENTS††,2 - 23.7%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		21,045,661		21,045,661
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		7,156,420		7,156,420
Total Repurchase Agreements
(Cost $28,202,081)				28,202,081
Total Investments - 111.0%
(Cost $130,530,544)			$	131,879,111
Other Assets & Liabilities, net - (11.0)%				(13,106,628	)
Total Net Assets - 100.0%			$	118,772,483

	Contracts		Unrealized Gain
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2016 U.S. Treasury Ultra Long Bond Futures Contracts (Aggregate Value of Contracts $83,692,813)		485	$	1,504,882

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
	See Sector Classification in Other Information section.

164 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
GOVERNMENT LONG BOND 1.2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Interest Rate Futures Contracts	$	—	$	1,504,882	$	—	$	—	$	—	$	1,504,882
Mutual Funds		31,234,529		—		—		—		—		31,234,529
Repurchase Agreements		—		—		28,202,081		—		—		28,202,081
U.S. Government Securities		—		—		72,442,501		—		—		72,442,501
Total	$	31,234,529	$	1,504,882	$	100,644,582	$	—	$	—	$	133,383,993

* Other financial instruments include futures contracts, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 165

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $71,106,540)	$	72,442,501
Investments in affiliated issuers, at value (cost $31,221,923)		31,234,529
Repurchase agreements, at value (cost $28,202,081)		28,202,081
Total investments (cost $130,530,544)		131,879,111
Segregated cash with broker		3,033,600
Receivables:
Securities sold		7,042,253
Fund shares sold		2,889,839
Variation margin		690,667
Interest		234,915
Dividends		14,914
Total assets		145,785,299
Liabilities:
Payable for:
Fund shares redeemed		26,841,814
Management fees		60,549
Transfer agent and administrative fees		24,220
Distribution and service fees		21,310
Securities purchased		14,914
Portfolio accounting fees		12,110
Miscellaneous		37,899
Total liabilities		27,012,816
Commitments and contingent liabilities (Note 13)		—
Net assets	$	118,772,483
Net assets consist of:
Paid in capital	$	117,289,423
Accumulated net investment loss		—
Accumulated net realized loss on investments		(1,370,389	)
Net unrealized appreciation on investments		2,853,449
Net assets	$	118,772,483
Investor Class:
Net assets	$	56,419,230
Capital shares outstanding		970,715
Net asset value per share	$	58.12
A-Class:
Net assets	$	9,437,881
Capital shares outstanding		161,322
Net asset value per share	$	58.50
Maximum offering price per share (Net asset value divided by 95.25%)	$	61.42
C-Class:
Net assets	$	3,275,901
Capital shares outstanding		56,358
Net asset value per share	$	58.13
H-Class:
Net assets	$	49,639,471
Capital shares outstanding		847,873
Net asset value per share	$	58.55

166 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Interest	$	2,884,463
Dividends from securities of affiliated issuers		149,526
Total investment income		3,033,989
Expenses:
Management fees		655,574
Transfer agent and administrative fees		262,232
Distribution and service fees:
Advisor Class		16,626
A-Class		8,862
C-Class		29,085
H-Class		169,745
Portfolio accounting fees		130,468
Registration fees		96,725
Custodian fees		15,248
Trustees’ fees*		9,621
Line of credit fees		1,609
Miscellaneous		66,349
Total expenses		1,462,144
Net investment income		1,571,845
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		8,483,360
Investments in affiliated issuers		(72,726	)
Futures contracts		9,382,592
Net realized gain		17,793,226
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(858,692	)
Investments in affiliated issuers		12,606
Futures contracts		(929,071	)
Net change in unrealized appreciation (depreciation)		(1,775,157	)
Net realized and unrealized gain		16,018,069
Net increase in net assets resulting from operations	$	17,589,914

* 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 ANNUAL REPORT | 167

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	1,571,845		$	1,497,181
Net realized gain on investments		17,793,226			32,098,810
Net change in unrealized appreciation (depreciation) on investments		(1,775,157	)		3,308,347
Net increase in net assets resulting from operations		17,589,914			36,904,338
Distributions to shareholders from:
Net investment income
Investor Class		(951,034	)		(703,362	)
Advisor Class**		(40,983	)		(473,253	)
A-Class		(53,217	)		(28,531	)
C-Class		(29,111	)		(8,930	)
H-Class**		(903,740	)		(301,178	)*
Total distributions to shareholders		(1,978,085	)		(1,515,254	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		883,887,497			660,449,135
Advisor Class**		209,857,554			3,280,358,617
A-Class		40,024,720			36,939,152
C-Class		10,755,886			33,913,164
H-Class**		3,211,356,226			1,267,499,822	*
Distributions reinvested
Investor Class		945,843			697,459
Advisor Class**		40,282			463,311
A-Class		49,337			27,051
C-Class		26,814			7,765
H-Class**		902,679			301,178	*
Cost of shares redeemed
Investor Class		(897,206,827	)		(658,880,369	)
Advisor Class**		(212,004,112	)		(3,412,680,611	)
A-Class		(34,656,013	)		(35,500,878	)
C-Class		(10,299,100	)		(34,886,168	)
H-Class**		(3,257,317,015	)		(1,195,580,232	)*
Conversion activity**
Advisor Class		(7,238,724	)		—
H-Class		7,238,724			—
Net decrease from capital share transactions		(53,636,229	)		(56,871,604	)
Net decrease in net assets		(38,024,400	)		(21,482,520	)
Net assets:
Beginning of year		156,796,883			178,279,403
End of year	$	118,772,483		$	156,796,883
Accumulated net investment loss at end of year	$	—		$	—

168 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
Investor Class		16,290,807			12,620,583
Advisor Class**		3,932,239			66,215,971
A-Class		741,077			676,780
C-Class		196,471			652,055
H-Class**		58,647,379			22,022,660	*
Shares issued from reinvestment of distributions
Investor Class		17,306			13,125
Advisor Class**		756			9,160
A-Class		905			504
C-Class		498			151
H-Class**		16,483			5,002	*
Shares redeemed
Investor Class		(16,377,059	)		(12,545,418	)
Advisor Class**		(3,973,055	)		(68,905,187	)
A-Class		(645,888	)		(649,474	)
C-Class		(189,233	)		(673,432	)
H-Class**		(59,266,476	)		(20,709,076	)*
Conversion activity**
Advisor Class		(133,556	)		—
H-Class		131,901			—
Net decrease in shares		(609,445	)		(1,266,596	)

*	Since commencement of operations: September 18, 2014.
**	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 169

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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	59.12		$	45.80		$	48.55		$	44.73		$	34.28
Income (loss) from investment operations:
Net investment income (loss)a		.76			.63			.61			.57			.96
Net gain (loss) on investments (realized and unrealized)		(.67	)		13.34			(2.76	)		4.21			10.45
Total from investment operations		.09			13.97			(2.15	)		4.78			11.41
Less distributions from:
Net investment income		(1.09	)		(.65	)		(.60	)		(.72	)		(.96	)
Net realized gains		—			—			—			(.24	)		—
Total distributions		(1.09	)		(.65	)		(.60	)		(.96	)		(.96	)
Net asset value, end of period	$	58.12		$	59.12		$	45.80		$	48.55		$	44.73
Total Returnb		0.33	%		30.66	%		(4.37	%)		10.63	%		33.38	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	56,419		$	61,460		$	43,573		$	281,800		$	43,709
Ratios to average net assets:
Net investment income (loss)		1.39	%		1.21	%		1.22	%		1.15	%		2.24	%
Total expensesc		0.94	%		0.95	%		0.97	%		0.95	%		0.95	%
Portfolio turnover rate		2,699	%		1,932	%		2,661	%		1,759	%		2,322	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	59.47		$	46.07		$	48.73		$	44.77		$	34.34
Income (loss) from investment operations:
Net investment income (loss)a		.64			.51			.48			.48			.87
Net gain (loss) on investments (realized and unrealized)		(.65	)		13.42			(2.65	)		4.29			10.43
Total from investment operations		(.01	)		13.93			(2.17	)		4.77			11.30
Less distributions from:
Net investment income		(.96	)		(.53	)		(.49	)		(.57	)		(.87	)
Net realized gains		—			—			—			(.24	)		—
Total distributions		(.96	)		(.53	)		(.49	)		(.81	)		(.87	)
Net asset value, end of period	$	58.50		$	59.47		$	46.07		$	48.73		$	44.77
Total Returnb		0.12	%		30.37	%		(4.40	%)		10.62	%		33.00	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,438		$	3,879		$	1,724		$	15,476		$	10,885
Ratios to average net assets:
Net investment income (loss)		1.16	%		0.97	%		1.04	%		0.94	%		2.02	%
Total expensesc		1.20	%		1.20	%		1.22	%		1.20	%		1.20	%
Portfolio turnover rate		2,699	%		1,932	%		2,661	%		1,759	%		2,322	%

170 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	59.09		$	45.79		$	48.51		$	44.63		$	34.25
Income (loss) from investment operations:
Net investment income (loss)a		.22			.13			.12			.15			.57
Net gain (loss) on investments (realized and unrealized)		(.64	)		13.30			(2.71	)		4.21			10.35
Total from investment operations		(.42	)		13.43			(2.59	)		4.36			10.92
Less distributions from:
Net investment income		(.54	)		(.13	)		(.13	)		(.24	)		(.54	)
Net realized gains		—			—			—			(.24	)		—
Total distributions		(.54	)		(.13	)		(.13	)		(.48	)		(.54	)
Net asset value, end of period	$	58.13		$	59.09		$	45.79		$	48.51		$	44.63
Total Returnb		(0.62	%)		29.37	%		(5.33	%)		9.69	%		32.01	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,276		$	2,873		$	3,198		$	4,594		$	4,451
Ratios to average net assets:
Net investment income (loss)		0.41	%		0.26	%		0.34	%		0.31	%		1.32	%
Total expensesc		1.95	%		1.95	%		1.97	%		1.94	%		1.95	%
Portfolio turnover rate		2,699	%		1,932	%		2,661	%		1,759	%		2,322	%

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	59.44		$	48.83
Income (loss) from investment operations:
Net investment income (loss)a		.61			.28
Net gain (loss) on investments (realized and unrealized)		(.54	)		10.59
Total from investment operations		.07			10.87
Less distributions from:
Net investment income		(.96	)		(.26	)
Total distributions		(.96	)		(.26	)
Net asset value, end of period	$	58.55		$	59.44
Total Returnb		0.26	%		22.28	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	49,639		$	78,382
Ratios to average net assets:
Net investment income (loss)		1.11	%		0.89	%
Total expensesc		1.20	%		1.18	%
Portfolio turnover rate		2,699	%		1,932	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: September 18, 2014. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. The portfolio turnover rate stated is for the entire period of the Fund, not since the commencement of operations of the Class.
e	Reverse share split — Per share amounts for the periods presented through February 7, 2014 have been restated to reflect a 1:3 reverse share split effective February 7, 2014.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 171

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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 contract 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.

For the one-year period ended March 31, 2016, the Inverse Government Long Bond Strategy Fund Investor Class returned -4.22%. The price movement of the Long Treasury Bond was -2.44% for the same period. The Fund maintained a daily correlation of over 99% to its benchmark.

The return of a comparison index, the Barclays Long Treasury Bond Index, was 2.77%.

The yield on the 30-year bond was 2.54% at the beginning of the period and 2.62% on March 31, 2016. Despite what appeared to be a tight range, the yield remained mostly above those levels during the period, hitting its low of 2.48% in April 2015 and reaching its high of 3.25% in June 2015. The year was more stable than the prior period, when government bond yields of many industrial economies, including the U.S., dipped to multiyear lows, as the U.S. Federal Reserve was winding down its quantitative easing program and debating when to restore some “normalization” to U.S. interest rates.

In December 2015, the Fed announced a 25-basis-point increase in the federal funds target rate. The result was the worst annual performance of risk assets since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concerns about plunging commodity prices, and slowing economic growth in China and other emerging market countries. At the beginning of 2016, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Treasury bonds benefited from a safe haven bid, driving yields to among their lowest of the period in the first quarter of 2016.

The period was also affected by continuation of quantitative easing programs, particularly in Europe and Japan. These conditions helped support the U.S. Treasury market, given the relative attractiveness of U.S. government bond yields.

Despite the relative health of the U.S. economy, markets are questioning the Fed’s resolve to increase rates further. Giving rise to this view are concerns that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. However, it appears that the Fed is biased toward normalizing interest rate policy. As long as core and headline inflation move closer to the Fed’s target in 2016, which support forecasts for a tighter labor market and a modest rise in oil prices, other Fed rate hikes remain a possibility in 2016.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

172 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2016

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

Inception Dates:
Investor Class	March 3, 1995
A-Class	March 31, 2004
C-Class	March 28, 2001
H-Class	September 18, 2014

The Fund invests principally in short sales and derivative investments such as futures contracts.

Largest Long Holding (% of Total Net Assets)
Guggenheim Strategy Fund I	19.4%
“Largest Long Holding” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 173

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	-4.22%	-12.12%	-9.39%
A-Class Shares	-4.47%	-12.35%	-9.61%
A-Class Shares with sales charge†	-9.01%	-13.20%	-10.05%
C-Class Shares	-5.18%	-13.00%	-10.29%
C-Class Shares with CDSC‡	-6.13%	-13.00%	-10.29%
Daily Price Movement of Long Treasury Bond**	-2.44%	6.57%	3.70%
Barclays Long Treasury Bond Index	2.77%	9.67%	7.97%
		1 Year	Since Inception (09/18/14)
H-Class Shares		-4.47%	-14.17%
Daily Price Movement of Long Treasury Bond**		-2.44%	9.34%
Barclays Long Treasury Bond Index		2.77%	12.02%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Barclays Long Treasury Bond Index and Daily Price Movement of Long Treasury Bond are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structures.
**	Does not reflect any interest.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

174 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE GOVERNMENT LONG BOND STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 19.4%
Guggenheim Strategy Fund I1		1,623,193	$	40,271,414
Total Mutual Funds
(Cost $40,274,548)				40,271,414

	Face Amount
FEDERAL AGENCY NOTES†† - 41.9%
Federal Farm Credit Bank2
0.47% due 12/08/173	$	14,000,000	13,971,090
0.43% due 12/15/163		12,000,000	11,995,728
0.52% due 12/28/163		10,000,000	9,996,560
0.42% due 08/01/173		6,000,000	5,988,930
0.52% due 07/20/163		4,000,000	4,000,988
Total Federal Farm Credit Bank			45,953,296
Federal Home Loan Bank2
0.62% due 11/23/16		10,000,000	10,004,700
0.53% due 01/11/173		10,000,000	10,001,090
Total Federal Home Loan Bank			20,005,790
Farmer Mac2
0.90% due 06/09/16		15,000,000	15,016,530
Fannie Mae4
0.44% due 09/08/173		6,000,000	5,985,420
Total Federal Agency Notes
(Cost $87,000,908)			86,961,036
FEDERAL AGENCY DISCOUNT NOTES†† - 13.5%
Federal Home Loan Bank2
0.35% due 05/06/16		25,000,000	24,993,675
0.34% due 04/15/16		825,000	824,932
Total Federal Home Loan Bank			25,818,607
Farmer Mac2
0.36% due 04/29/16		2,160,000	2,159,648
Total Federal Agency Discount Notes
(Cost $27,975,800)			27,978,255

REPURCHASE AGREEMENTS†† - 55.9%
Individual Repurchase Agreement5
Barclays Capital issued 03/31/16 at (0.15)% due 04/01/16 (secured by U.S. Treasury Bond, at a rate of 2.50% and maturing 02/15/46 as collateral, with a value of $116,391,690) to be repurchased at $114,109,025	114,109,500		114,109,500
Joint Repurchase Agreements6
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	1,417,654		1,417,654
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	482,063		482,063
Total Repurchase Agreements
(Cost $116,009,217)			116,009,217
Total Investments - 130.7%
(Cost $271,260,473)		$	271,219,922
U.S. GOVERNMENT SECURITIES SOLD SHORT†† - (75.5)%
U.S. Treasury Bond
2.50% due 02/15/46	160,800,000		(156,780,000	)
Total U.S. Government Securities Sold Short
(Proceeds $156,573,113)			(156,780,000	)
Other Assets & Liabilities, net - 44.8%			93,039,496
Total Net Assets - 100.0%		$	207,479,418

	Contracts		Unrealized Gain
INTEREST RATE FUTURES CONTRACTS SOLD SHORT†
June 2016 U.S. Treasury Ultra Long Bond Futures Contracts (Aggregate Value of Contracts $60,224,313)		349	$	318,981

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	Variable rate security. Rate indicated is rate effective at March 31, 2016.
4	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.
5	All or portion of this security is pledged as short collateral at March 31, 2016.
6	Repurchase Agreements — See Note 5.
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 175

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INVERSE GOVERNMENT LONG BOND STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Federal Agency Discount Notes	$	—	$	—	$	27,978,255	$	—	$	—	$	27,978,255
Federal Agency Notes		—		—		86,961,036		—		—		86,961,036
Interest Rate Futures Contracts		—		318,981		—		—		—		318,981
Mutual Funds		40,271,414		—		—		—		—		40,271,414
Repurchase Agreements		—		—		116,009,217		—		—		116,009,217
Total	$	40,271,414	$	318,981	$	230,948,508	$	—	$	—	$	271,538,903

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
U.S. Government Securities	$	—	$	—	$	156,780,000	$	—	$	—	$	156,780,000
Total	$	—	$	—	$	156,780,000	$	—	$	—	$	156,780,000

* Other financial instruments include futures contracts, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

176 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE GOVERNMENT LONG BOND STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $114,976,708)	$	114,939,291
Investments in affiliated issuers, at value (cost $40,274,548)		40,271,414
Repurchase agreements, at value (cost $116,009,217)		116,009,217
Total investments (cost $271,260,473)		271,219,922
Segregated cash with broker		1,334,400
Receivables:
Fund shares sold		54,117,511
Securities sold		40,101,717
Interest		81,054
Dividends		79,068
Total assets		366,933,672
Liabilities:
Securities sold short, at value (proceeds $156,573,113)		156,780,000
Payable for:
Fund shares redeemed		1,521,825
Variation margin		304,344
Management fees		133,317
Securities purchased		79,068
Transfer agent and administrative fees		37,032
Distribution and service fees		33,308
Portfolio accounting fees		14,813
Miscellaneous		550,547
Total liabilities		159,454,254
Commitments and contingent liabilities (Note 13)		—
Net assets	$	207,479,418
Net assets consist of:
Paid in capital	$	581,029,847
Accumulated net investment loss		(1,260,455	)
Accumulated net realized loss on investments		(372,361,517	)
Net unrealized appreciation on investments		71,543
Net assets	$	207,479,418
Investor Class:
Net assets	$	89,070,773
Capital shares outstanding		2,599,259
Net asset value per share	$	34.27
A-Class:
Net assets	$	17,676,405
Capital shares outstanding		533,866
Net asset value per share	$	33.11
Maximum offering price per share (Net asset value divided by 95.25%)	$	34.76
C-Class:
Net assets	$	27,899,295
Capital shares outstanding		947,043
Net asset value per share	$	29.46
H-Class:
Net assets	$	72,832,945
Capital shares outstanding		2,199,002
Net asset value per share	$	33.12

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 177

INVERSE GOVERNMENT LONG BOND STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	600,927
Interest		259,993
Total investment income		860,920
Expenses:
Management fees		1,845,903
Transfer agent and administrative fees		512,750
Distribution and service fees:
Advisor Class		18,893
A-Class		57,327
C-Class		348,297
H-Class		72,335
Portfolio accounting fees		203,832
Short interest expense		4,249,163
Custodian fees		23,821
Trustees’ fees*		14,867
Line of credit fees		521
Miscellaneous		256,164
Total expenses		7,603,873
Net investment loss		(6,742,953	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		86,730
Investments in affiliated issuers		(351,102	)
Futures contracts		1,321,738
Securities sold short		(3,607,505	)
Net realized loss		(2,550,139	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(50,581	)
Investments in affiliated issuers		72,643
Securities sold short		2,532,338
Futures contracts		1,300,717
Net change in unrealized appreciation (depreciation)		3,855,117
Net realized and unrealized gain		1,304,978
Net decrease in net assets resulting from operations	$	(5,437,975	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

178 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE GOVERNMENT LONG BOND STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(6,742,953	)	$	(9,014,925	)
Net realized loss on investments		(2,550,139	)		(72,078,090	)
Net change in unrealized appreciation (depreciation) on investments		3,855,117			(905,546	)
Net decrease in net assets resulting from operations		(5,437,975	)		(81,998,561	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		419,488,684			297,049,590
Advisor Class**		77,182,234			2,869,893,061
A-Class		21,327,705			9,691,719
C-Class		10,592,963			31,214,542
H-Class**		2,119,121,239			1,071,187,111	*
Cost of shares redeemed
Investor Class		(430,488,671	)		(332,060,409	)
Advisor Class**		(80,838,817	)		(2,856,681,364	)
A-Class		(24,329,743	)		(29,814,806	)
C-Class		(17,049,334	)		(40,220,259	)
H-Class**		(2,100,739,161	)		(1,021,206,700	)*
Conversion activity**
Advisor Class		(8,597,033	)		—
H-Class		8,597,033			—
Net decrease from capital share transactions		(5,732,901	)		(947,515	)
Net decrease in net assets		(11,170,876	)		(82,946,076	)
Net assets:
Beginning of year		218,650,294			301,596,370
End of year	$	207,479,418		$	218,650,294
Accumulated net investment loss at end of year	$	(1,260,455	)	$	(1,507,712	)
Capital share activity:
Shares sold
Investor Class		11,180,250			7,228,729
Advisor Class**		2,146,208			70,764,860
A-Class		580,663			258,256
C-Class		319,610			864,726
H-Class**		58,800,072			29,826,219	*
Shares redeemed
Investor Class		(11,534,880	)		(8,137,808	)
Advisor Class**		(2,246,748	)		(70,800,361	)
A-Class		(669,422	)		(751,587	)
C-Class		(527,194	)		(1,130,632	)
H-Class**		(58,103,890	)		(28,562,804	)*
Conversion activity**
Advisor Class		(245,419	)		—
H-Class		239,405			—
Net increase (decrease) in shares		(61,345	)		(440,402	)

*	Since commencement of operations: September 18, 2014.
**	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 179

INVERSE GOVERNMENT LONG BOND 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	35.78		$	46.01		$	43.94		$	48.33		$	65.42
Income (loss) from investment operations:
Net investment income (loss)a		(1.15	)		(1.15	)		(1.65	)		(1.20	)		(2.15	)
Net gain (loss) on investments (realized and unrealized)		(.36	)		(9.08	)		3.72			(3.19	)		(14.94	)
Total from investment operations		(1.51	)		(10.23	)		2.07			(4.39	)		(17.09	)
Net asset value, end of period	$	34.27		$	35.78		$	46.01		$	43.94		$	48.33
Total Returnb		(4.22	%)		(22.23	%)		4.69	%		(9.10	%)		(26.07	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	89,071		$	105,696		$	177,735		$	143,739		$	247,454
Ratios to average net assets:
Net investment income (loss)		(3.07	%)		(2.80	%)		(3.46	%)		(2.82	%)		(3.99	%)
Total expensesc,f		3.48	%		3.15	%		3.50	%		2.99	%		4.13	%
Portfolio turnover rate		838	%		2,190	%		1,097	%		1,309	%		1,107	%

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	34.66		$	44.68		$	42.77		$	47.18		$	64.00
Income (loss) from investment operations:
Net investment income (loss)a		(1.20	)		(1.23	)		(1.73	)		(1.35	)		(2.25	)
Net gain (loss) on investments (realized and unrealized)		(.35	)		(8.79	)		3.64			(3.06	)		(14.57	)
Total from investment operations		(1.55	)		(10.02	)		1.91			(4.41	)		(16.82	)
Net asset value, end of period	$	33.11		$	34.66		$	44.68		$	42.77		$	47.18
Total Returnb		(4.47	%)		(22.43	%)		4.51	%		(9.43	%)		(26.25	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	17,676		$	21,580		$	49,859		$	32,842		$	37,607
Ratios to average net assets:
Net investment income (loss)		(3.32	%)		(3.06	%)		(3.73	%)		(3.20	%)		(4.24	%)
Total expensesc,f		3.75	%		3.40	%		3.78	%		3.37	%		4.38	%
Portfolio turnover rate		838	%		2,190	%		1,097	%		1,309	%		1,107	%

180 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	31.07		$	40.35		$	38.92		$	43.25		$	59.09
Income (loss) from investment operations:
Net investment income (loss)a		(1.31	)		(1.36	)		(1.86	)		(1.50	)		(2.40	)
Net gain (loss) on investments (realized and unrealized)		(.30	)		(7.92	)		3.29			(2.83	)		(13.44	)
Total from investment operations		(1.61	)		(9.28	)		1.43			(4.33	)		(15.84	)
Net asset value, end of period	$	29.46		$	31.07		$	40.35		$	38.92		$	43.25
Total Returnb		(5.18	%)		(23.00	%)		3.73	%		(10.06	%)		(26.82	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	27,899		$	35,874		$	57,323		$	55,404		$	69,472
Ratios to average net assets:
Net investment income (loss)		(4.08	%)		(3.78	%)		(4.45	%)		(3.96	%)		(4.98	%)
Total expensesc,f		4.50	%		4.14	%		4.49	%		4.13	%		5.12	%
Portfolio turnover rate		838	%		2,190	%		1,097	%		1,309	%		1,107	%

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	34.67		$	41.85
Income (loss) from investment operations:
Net investment income (loss)a		(1.15	)		(.52	)
Net gain (loss) on investments (realized and unrealized)		(.40	)		(6.66	)
Total from investment operations		(1.55	)		(7.18	)
Net asset value, end of period	$	33.12		$	34.67
Total Returnb		(4.47	%)		(17.16	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	72,833		$	43,800
Ratios to average net assets:
Net investment income (loss)		(3.17	%)		(2.75	%)
Total expensesc,f		3.61	%		3.07	%
Portfolio turnover rate		838	%		2,190	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: September 18, 2014. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. The portfolio turnover rate stated is for the entire period of the Fund, not since the commencement of operations of the Class.
e	Reverse share split — Per share amounts for the periods presented through February 21, 2014 have been restated to reflect a 1:5 reverse share split effective February 21, 2014.
f	Total expenses may include interest expense related to short sales. Excluding interest expense, the operating expense ratio for the period and years ended would be:

	3/31/16	3/31/15	3/31/14	3/28/13	3/31/12
Investor Class	1.40%	1.40%	1.41%	1.39%	1.39%
A-Class	1.65%	1.65%	1.66%	1.64%	1.65%
C-Class	2.40%	2.40%	2.41%	2.39%	2.40%
H-Class	1.65%	1.60%	—	—	—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 181

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

High Yield Strategy Fund H-Class returned 1.36% for the one-year period ended March 31, 2016. For comparison, the Barclays U.S. Corporate High Yield Index returned -3.69%.

After a difficult 2015 and early 2016, high yield reversed course midway through the first quarter of 2016. This rise, which occurred in conjunction with rising oil prices, supported the view that the decline in leveraged credit over much of the period was tied to the commodity bear market, and a sentiment-driven spillover into credits tied to other industries. The primary driver of recent wide spreads in the high-yield market continued to persist through the end March 2016, as the oil market remained characterized by a significant supply-demand imbalance. Among the near-term risks were further weakness in oil, the impact of a potential Fed hike over the summer, and the meaningful wave of downgrades that lie ahead in oil and basic materials.

The consumer, cyclical and the consumer non-cyclical sectors contributed the most to the performance of the Barclays U.S. Corporate High Yield Index. The energy and basic industry (including mining) segments detracted the most.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

 

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

182 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

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.

Cumulative Fund Performance*

Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	21.3%
iShares iBoxx $ High Yield Corporate Bond ETF	8.6%
SPDR Barclays High Yield Bond ETF	8.5%
Guggenheim Strategy Fund II	7.2%
Total	45.6%
“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (04/16/07)
A-Class Shares	1.66%	6.54%	6.07%
A-Class Shares with sales charge†	-3.18%	5.51%	5.49%
C-Class Shares	0.70%	5.71%	5.25%
C-Class Shares with CDSC‡	-0.27%	5.71%	5.25%
H-Class Shares	1.36%	6.56%	6.07%
Barclays U.S. Corporate High Yield Index	-3.69%	4.93%	6.48%
S&P 500 Index	1.78%	11.58%	6.12%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Index and the Barclays U.S. Corporate High Yield Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 183

SCHEDULE OF INVESTMENTS	March 31, 2016
HIGH YIELD STRATEGY FUND

	Shares		Value
EXCHANGE-TRADED FUNDS - 17.1%
iShares iBoxx $ High Yield Corporate Bond ETF		843,590	$	68,912,867
SPDR Barclays High Yield Bond ETF		1,973,015		67,575,764
Total Exchange-Traded Funds
(Cost $132,354,322)				136,488,631
MUTUAL FUNDS† - 28.5%
Guggenheim Strategy Fund I1		6,848,885		169,920,842
Guggenheim Strategy Fund II1		2,325,041		57,405,255
Total Mutual Funds
(Cost $227,149,372)				227,326,097

	Face Amount
FEDERAL AGENCY DISCOUNT NOTES†† - 30.2%
Federal Home Loan Bank2
0.08% due 04/01/16	$	100,000,000	100,000,000
0.23% due 04/01/16		30,000,000	30,000,000
0.25% due 04/06/16		6,600,000	6,599,771
0.20% due 04/01/16		4,000,000	4,000,000
Total Federal Home Loan Bank			140,599,771
Fannie Mae3
0.08% due 04/01/16		100,000,000	100,000,000
Total Federal Agency Discount Notes
(Cost $240,599,771)			240,599,771

REPURCHASE AGREEMENTS††,4 - 14.1%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	83,709,434		83,709,434
HSBC Group issued 03/31/16 at 0.21% due 04/01/16	28,464,766		28,464,766
Total Repurchase Agreements
(Cost $112,174,200)			112,174,200
Total Investments - 89.9%
(Cost $712,277,665)		$	716,588,699
Other Assets & Liabilities, net - 10.1%			80,236,421
Total Net Assets - 100.0%		$	796,825,120

	Contracts		Unrealized Gain
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2016 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $568,284,820)		4,689	$	2,828,738

CENTRALLY CLEARED CREDIT DEFAULT SWAPS PROTECTION SOLD††
Index	Counterparty	Exchange	Protection Premium Rate		Maturity Date	Notional Principal		Notional Value			Upfront Premiums Paid		Unrealized Appreciation
CDX.NA.HY.26 Index	Barclays Bank plc	ICE	5.00	%	06/20/21	$	280,100,000	$	(287,802,750	)	$	4,391,841	$	3,310,909
CDX.NA.HY.26 Index	Goldman Sachs International	ICE	5.00	%	06/20/21	$	361,200,000	$	(371,133,000	)		5,003,568		4,929,432
											$	9,395,409	$	8,240,341

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm.
4	Repurchase Agreements — See Note 5.
	plc — Public Limited Company
	CDX.NA.HY.26 Index — Credit Default Swap North American High Yield Series 26 Index
	ICE — Intercontinental Exchange
	See Sector Classification in Other Information section.

184 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
HIGH YIELD STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Exchange-Traded Funds	$	136,488,631	$	—	$	—	$	—	$	—	$	136,488,631
Credit Default Swaps		—		—		—		8,240,341		—		8,240,341
Federal Agency Discount Notes		—		—		240,599,771		—		—		240,599,771
Interest Rate Futures Contracts		—		2,828,738		—		—		—		2,828,738
Mutual Funds		227,326,097		—		—		—		—		227,326,097
Repurchase Agreements		—		—		112,174,200		—		—		112,174,200
Total	$	363,814,728	$	2,828,738	$	352,773,971	$	8,240,341	$	—	$	727,657,778

* Other financial instruments include futures contracts and credit default swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 185

HIGH YIELD STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $372,954,093)	$	377,088,402
Investments in affiliated issuers, at value (cost $227,149,372)		227,326,097
Repurchase agreements, at value (cost $112,174,200)		112,174,200
Total investments (cost $712,277,665)		716,588,699
Segregated cash with broker		20,925,207
Unamortized upfront premiums paid on credit default swaps		9,395,409
Unrealized appreciation on swap agreements		8,240,341
Receivables:
Fund shares sold		44,159,680
Variation margin		1,086,436
Protection fees on credit default swap		979,764
Interest		701
Dividends		241,250
Total assets		801,617,487
Liabilities:
Payable for:
Fund shares redeemed		2,388,475
Securities purchased		1,464,292
Management fees		439,816
Distribution and service fees		147,839
Transfer agent and administrative fees		146,606
Portfolio accounting fees		44,965
Miscellaneous		160,374
Total liabilities		4,792,367
Commitments and contingent liabilities (Note 13)		—
Net assets	$	796,825,120
Net assets consist of:
Paid in capital	$	786,592,294
Accumulated net investment income		5,356,385
Accumulated net realized loss on investments		(10,503,672	)
Net unrealized appreciation on investments		15,380,113
Net assets	$	796,825,120
A-Class:
Net assets	$	11,786,677
Capital shares outstanding		505,334
Net asset value per share	$	23.32
Maximum offering price per share (Net asset value divided by 95.25%)	$	24.48
C-Class:
Net assets	$	2,020,054
Capital shares outstanding		95,050
Net asset value per share	$	21.25
H-Class:
Net assets	$	783,018,389
Capital shares outstanding		33,588,384
Net asset value per share	$	23.31

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers	$	1,156,559
Dividends from securities of affiliated issuers		1,018,424
Interest		125,023
Income from securities lending, net		17,677
Total investment income		2,317,683
Expenses:
Management fees		2,021,278
Transfer agent and administrative fees		673,760
Distribution and service fees:
A-Class		25,581
C-Class		23,802
H-Class		642,228
Portfolio accounting fees		227,931
Tax expense		34,593
Custodian fees		31,292
Trustees’ fees*		13,698
Line of credit fees		282
Miscellaneous		326,752
Total expenses		4,021,197
Net investment loss		(1,703,514	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(2,236,410	)
Investments in affiliated issuers		104,292
Swap agreements		12,943,952
Futures contracts		(4,322,206	)
Net realized gain		6,489,628
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		3,974,143
Investments in affiliated issuers		(20,455	)
Swap agreements		6,585,981
Futures contracts		(84,465	)
Net change in unrealized appreciation (depreciation)		10,455,204
Net realized and unrealized gain		16,944,832
Net increase in net assets resulting from operations	$	15,241,318

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

186 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

HIGH YIELD STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(1,703,514	)	$	(1,594,178	)
Net realized gain (loss) on investments		6,489,628			(416,193	)
Net change in unrealized appreciation (depreciation) on investments		10,455,204			4,983,734
Net increase in net assets resulting from operations		15,241,318			2,973,363
Distributions to shareholders from:
Net investment income
A-Class		(371,618	)		—
C-Class		(81,569	)		—
H-Class		(7,985,052	)		—
Total distributions to shareholders		(8,438,239	)		—
Capital share transactions:
Proceeds from sale of shares
A-Class		146,402,399			111,821,153
C-Class		6,136,367			6,349,542
H-Class		2,450,058,825			1,444,459,495
Distributions reinvested
A-Class		324,878			—
C-Class		77,774			—
H-Class		7,939,241			—
Cost of shares redeemed
A-Class		(143,631,198	)		(114,269,767	)
C-Class		(7,731,465	)		(7,975,098	)
H-Class		(2,304,764,599	)		(913,063,243	)
Net increase from capital share transactions		154,812,222			527,322,082
Net increase in net assets		161,615,301			530,295,445
Net assets:
Beginning of year		635,209,819			104,914,374
End of year	$	796,825,120		$	635,209,819
Undistributed net investment income at end of year	$	5,356,385		$	5,031,017
Capital share activity:
Shares sold
A-Class		6,185,339			4,778,273
C-Class		292,032			295,743
H-Class		106,740,553			61,500,842
Shares issued from reinvestment of distributions
A-Class		14,262			—
C-Class		3,739			—
H-Class		348,212			—
Shares redeemed
A-Class		(6,118,943	)		(4,899,564	)
C-Class		(365,790	)		(370,259	)
H-Class		(99,505,770	)		(39,302,340	)
Net increase in shares		7,593,634			22,002,695

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 187

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.84		$	22.89		$	25.16		$	22.93		$	21.98
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.15	)		(.30	)		(.22	)		(.27	)
Net gain (loss) on investments (realized and unrealized)		.46			1.10			2.13			3.13			1.77
Total from investment operations		.37			.95			1.83			2.91			1.50
Less distributions from:
Net investment income		(.89	)		—			(1.14	)		(.43	)		(.55	)
Net realized gains		—			—			(2.96	)		(.25	)		—
Total distributions		(.89	)		—			(4.10	)		(.68	)		(.55	)
Net asset value, end of period	$	23.32		$	23.84		$	22.89		$	25.16		$	22.93
Total Returnb		1.66	%		4.06	%		7.53	%		12.86	%		6.94	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,787		$	10,123		$	12,499		$	10,777		$	11,890
Ratios to average net assets:
Net investment income (loss)		(0.40	%)		(0.63	%)		(1.21	%)		(0.92	%)		(1.21	%)
Total expensesc		1.49	%		1.50	%		1.53	%		1.50	%		1.49	%
Portfolio turnover rate		521	%		393	%		205	%		95	%		583	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	22.01		$	21.29		$	23.83		$	21.92		$	21.19
Income (loss) from investment operations:
Net investment income (loss)a		(.19	)		(.27	)		(.44	)		(.37	)		(.45	)
Net gain (loss) on investments (realized and unrealized)		.32			.99			2.00			2.96			1.73
Total from investment operations		.13			.72			1.56			2.59			1.28
Less distributions from:
Net investment income		(.89	)		—			(1.14	)		(.43	)		(.55	)
Net realized gains		—			—			(2.96	)		(.25	)		—
Total distributions		(.89	)		—			(4.10	)		(.68	)		(.55	)
Net asset value, end of period	$	21.25		$	22.01		$	21.29		$	23.83		$	21.92
Total Returnb		0.70	%		3.33	%		6.74	%		11.98	%		6.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,020		$	3,632		$	5,100		$	6,958		$	7,343
Ratios to average net assets:
Net investment income (loss)		(0.88	%)		(1.25	%)		(1.89	%)		(1.62	%)		(2.10	%)
Total expensesc		2.24	%		2.25	%		2.28	%		2.27	%		2.25	%
Portfolio turnover rate		521	%		393	%		205	%		95	%		583	%

188 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.90		$	22.94		$	25.12		$	22.90		$	21.95
Income (loss) from investment operations:
Net investment income (loss)a		(.15	)		(.19	)		(.24	)		(.24	)		(.28	)
Net gain (loss) on investments (realized and unrealized)		.45			1.15			2.16			3.14			1.78
Total from investment operations		.30			.96			1.92			2.90			1.50
Less distributions from:
Net investment income		(.89	)		—			(1.14	)		(.43	)		(.55	)
Net realized gains		—			—			(2.96	)		(.25	)		—
Total distributions		(.89	)		—			(4.10	)		(.68	)		(.55	)
Net asset value, end of period	$	23.31		$	23.90		$	22.94		$	25.12		$	22.90
Total Returnb		1.36	%		4.14	%		7.86	%		12.83	%		6.95	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	783,018		$	621,455		$	87,315		$	434,113		$	266,950
Ratios to average net assets:
Net investment income (loss)		(0.64	%)		(0.81	%)		(0.97	%)		(0.99	%)		(1.26	%)
Total expensesc		1.49	%		1.46	%		1.53	%		1.51	%		1.49	%
Portfolio turnover rate		521	%		393	%		205	%		95	%		583	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 189

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

Inverse High Yield Strategy Fund H-Class returned -6.67% for the one year period ended March 31, 2016. For comparison, the Barclays U.S. Corporate High Yield Index returned -3.69%.

After a difficult 2015 and early 2016, high yield reversed course midway through the first quarter of 2016. This rise, which occurred in conjunction with rising oil prices, supported the view that the decline in leveraged credit over much of the period was tied to the commodity bear market, and a sentiment-driven spillover into credits tied to other industries. The primary driver of recent wide spreads in the high-yield market continued to persist through the end of March 2016, as the oil market remained characterized by a significant supply-demand imbalance. Among the near-term risks were further weakness in oil, the impact of a potential Fed hike over the summer, and the meaningful wave of downgrades that lie ahead in oil and basic materials.

The consumer, cyclical and the consumer non-cyclical sectors contributed the most to the performance of the Barclays U.S. Corporate High Yield Index. The energy and basic industry (including mining) segments detracted the most.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

190 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

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.

Cumulative Fund Performance*

Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	30.2%
Guggenheim Strategy Fund II	29.9%
Total	60.1%
“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (04/16/07)
A-Class Shares	-6.81%	-10.94%	-10.49%
A-Class Shares with sales charge†	-11.24%	-11.80%	-10.97%
C-Class Shares	-7.59%	-11.47%	-11.05%
C-Class Shares with CDSC‡	-8.52%	-11.47%	-11.05%
H-Class Shares	-6.67%	-10.71%	-10.34%
Barclays U.S. Corporate High Yield Index	-3.69%	4.93%	6.48%
S&P 500 Index	1.78%	11.58%	6.12%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Barclays U.S. Corporate High Yield Index and the S&P 500 Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on H-Class shares and A-Class shares only; performance for C-Class shares will vary due to differences in fee structures.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 191

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE HIGH YIELD STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 60.1%
Guggenheim Strategy Fund I1		82,907	$	2,056,929
Guggenheim Strategy Fund II1		82,343		2,033,059
Total Mutual Funds
(Cost $4,090,376)				4,089,988

	Face Amount
REPURCHASE AGREEMENTS††,2 - 101.1%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	5,135,347		5,135,347
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		1,746,236		1,746,236
Total Repurchase Agreements
(Cost $6,881,583)				6,881,583
Total Investments - 161.2%
(Cost $10,971,959)			$	10,971,571
Other Assets & Liabilities, net - (61.2)%				(4,164,386	)
Total Net Assets - 100.0%			$	6,807,185

	Contracts		Unrealized Loss
INTEREST RATE FUTURES CONTRACTS SOLD SHORT†
June 2016 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $5,938,570)		49	$	(5,700	)

CENTRALLY CLEARED CREDIT DEFAULT SWAPS PROTECTION PURCHASED††
Index	Counterparty	Exchange	Protection Premium Rate		Maturity Date	Notional Principal		Notional Value		Upfront Premiums Received			Unrealized Depreciation
CDX.NA.HY.26 Index	Goldman Sachs International	ICE	5.00	%	06/20/21	$	4,600,000	$	4,726,500	$	(64,351	)	$	(62,149	)
CDX.NA.HY.26 Index	Barclays Bank plc	ICE	5.00	%	06/20/21		2,050,000		2,106,375		(28,678	)		(27,697	)
										$	(93,029	)	$	(89,846	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
	plc — Public Limited Company
	CDX.NA.HY.26 Index — Credit Default Swap North American High Yield Series 26 Index
	ICE — Intercontinental Exchange
	See Sector Classification in Other Information section.

192 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
INVERSE HIGH YIELD STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Mutual Funds	$	4,089,988	$	—	$	—	$	—	$	—	$	4,089,988
Repurchase Agreements		—		—		6,881,583		—		—		6,881,583
Total	$	4,089,988	$	—	$	6,881,583	$	—	$	—	$	10,971,571

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Credit Default Swaps	$	—	$	—	$	—	$	89,846	$	—	$	89,846
Interest Rate Futures Contracts		—		5,700		—		—		—		5,700
Total	$	—	$	5,700	$	—	$	89,846	$	—	$	95,546

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 193

INVERSE HIGH YIELD STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in affiliated issuers, at value (cost $4,090,376)	$	4,089,988
Repurchase agreements, at value (cost $6,881,583)		6,881,583
Total investments (cost $10,971,959)		10,971,571
Segregated cash with broker		782,390
Receivables:
Fund shares sold		12,028
Dividends		6,299
Interest		43
Total assets		11,772,331
Liabilities:
Unamortized upfront premiums received on credit default swaps		93,029
Unrealized depreciation on swap agreements		89,846
Payable for:
Fund shares redeemed		4,584,757
Securities purchased		133,010
Variation margin		21,157
Protection fees on credit default swaps		10,228
Management fees		10,096
Distribution and service fees		4,494
Transfer agent and administrative fees		3,365
Portfolio accounting fees		1,346
Miscellaneous		13,818
Total liabilities		4,965,146
Commitments and contingent liabilities (Note 13)		—
Net assets	$	6,807,185
Net assets consist of:
Paid in capital	$	22,521,125
Accumulated net investment loss		(524,020	)
Accumulated net realized loss on investments		(15,093,986	)
Net unrealized depreciation on investments		(95,934	)
Net assets	$	6,807,185
A-Class:
Net assets	$	2,641,654
Capital shares outstanding		147,393
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	$	1,652,867
Capital shares outstanding		97,700
Net asset value per share	$	16.92
H-Class:
Net assets	$	2,512,664
Capital shares outstanding		138,248
Net asset value per share	$	18.18

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	241,732
Interest		20,702
Total investment income		262,434
Expenses:
Management fees		322,909
Transfer agent and administrative fees		107,636
Distribution and service fees:
A-Class		22,693
C-Class		13,052
H-Class		81,680
Portfolio accounting fees		43,054
Custodian fees		5,047
Trustees’ fees*		2,915
Miscellaneous		55,161
Total expenses		654,147
Net investment loss		(391,713	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(35	)
Investments in affiliated issuers		(194,556	)
Swap agreements		2,511,150
Futures contracts		(2,454,387	)
Net realized loss		(137,828	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(2,037	)
Investments in affiliated issuers		(388	)
Swap agreements		(80,174	)
Futures contracts		12,219
Net change in unrealized appreciation (depreciation)		(70,380	)
Net realized and unrealized loss		(208,208	)
Net decrease in net assets resulting from operations	$	(599,921	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

194 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE HIGH YIELD STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(391,713	)	$	(170,580	)
Net realized loss on investments		(137,828	)		(2,039,229	)
Net change in unrealized appreciation (depreciation) on investments		(70,380	)		(27,512	)
Net decrease in net assets resulting from operations		(599,921	)		(2,237,321	)
Capital share transactions:
Proceeds from sale of shares
A-Class		259,628,046			159,702,077
C-Class		6,506,143			1,688,742
H-Class		1,025,905,429			127,515,789
Cost of shares redeemed
A-Class		(256,881,526	)		(163,681,021	)
C-Class		(5,476,553	)		(2,426,887	)
H-Class		(1,025,503,843	)		(126,501,026	)
Net increase (decrease) from capital share transactions		4,177,696			(3,702,326	)
Net increase (decrease) in net assets		3,577,775			(5,939,647	)
Net assets:
Beginning of year		3,229,410			9,169,057
End of year	$	6,807,185		$	3,229,410
Accumulated net investment loss at end of year	$	(524,020	)	$	(81,106	)
Capital share activity:
Shares sold
A-Class		13,577,516			7,767,769
C-Class		363,762			86,161
H-Class		53,359,685			6,204,216
Shares redeemed
A-Class		(13,449,441	)		(7,990,799	)
C-Class		(306,152	)		(123,220	)
H-Class		(53,330,482	)		(6,209,959	)
Net increase (decrease) in shares		214,888			(265,832	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 195

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	19.23		$	21.27		$	23.98		$	28.15		$	31.99
Income (loss) from investment operations:
Net investment income (loss)a		(.20	)		(.21	)		(.35	)		(.37	)		(.43	)
Net gain (loss) on investments (realized and unrealized)		(1.11	)		(1.83	)		(2.36	)		(3.80	)		(3.41	)
Total from investment operations		(1.31	)		(2.04	)		(2.71	)		(4.17	)		(3.84	)
Net asset value, end of period	$	17.92		$	19.23		$	21.27		$	23.98		$	28.15
Total Returnb		(6.81	%)		(9.59	%)		(11.30	%)		(14.81	%)		(11.98	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,642		$	372		$	5,155		$	157		$	556
Ratios to average net assets:
Net investment income (loss)		(1.07	%)		(1.02	%)		(1.52	%)		(1.38	%)		(1.39	%)
Total expensesc		1.50	%		1.52	%		1.54	%		1.49	%		1.51	%
Portfolio turnover rate		1,722	%		784	%		—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	18.31		$	20.23		$	22.98		$	27.21		$	31.12
Income (loss) from investment operations:
Net investment income (loss)a		(.29	)		(.30	)		(.50	)		(.53	)		(.55	)
Net gain (loss) on investments (realized and unrealized)		(1.10	)		(1.62	)		(2.25	)		(3.70	)		(3.36	)
Total from investment operations		(1.39	)		(1.92	)		(2.75	)		(4.23	)		(3.91	)
Net asset value, end of period	$	16.92		$	18.31		$	20.23		$	22.98		$	27.21
Total Returnb		(7.59	%)		(9.49	%)		(11.97	%)		(15.51	%)		(12.60	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,653		$	734		$	1,561		$	2,037		$	693
Ratios to average net assets:
Net investment income (loss)		(1.60	%)		(1.53	%)		(2.28	%)		(2.13	%)		(1.87	%)
Total expensesc		2.25	%		2.25	%		2.30	%		2.25	%		2.26	%
Portfolio turnover rate		1,722	%		784	%		—			—			—

196 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	19.48		$	21.37		$	24.04		$	28.22		$	32.04
Income (loss) from investment operations:
Net investment income (loss)a		(.16	)		(.19	)		(.35	)		(.36	)		(.47	)
Net gain (loss) on investments (realized and unrealized)		(1.14	)		(1.70	)		(2.32	)		(3.82	)		(3.35	)
Total from investment operations		(1.30	)		(1.89	)		(2.67	)		(4.18	)		(3.82	)
Net asset value, end of period	$	18.18		$	19.48		$	21.37		$	24.04		$	28.22
Total Returnb		(6.67	%)		(8.84	%)		(11.11	%)		(14.81	%)		(11.92	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,513		$	2,124		$	2,453		$	9,208		$	13,357
Ratios to average net assets:
Net investment income (loss)		(0.84	%)		(0.93	%)		(1.50	%)		(1.38	%)		(1.51	%)
Total expensesc		1.50	%		1.51	%		1.52	%		1.50	%		1.51	%
Portfolio turnover rate		1,722	%		784	%		—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 197

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

U.S. GOVERNMENT MONEY MARKET FUND

OBJECTIVE: Seeks to provide security of principal, high current income, and liquidity.

For the one-year period ended March 31, 2016, U.S. Government Money Market Fund returned 0.00%.

Interest rates remained at low levels throughout the period, although the U.S. Federal Reserve did increase its federal funds rate by 25 basis points in December, starting the process of a return to normalization of interest rates after seven years of unprecedented liquidity provision. Short-term government agency and repurchase agreement rates were range-bound through the period.

Effective August 1, 2016, Government Money Market - Money Market Class will invest at least 99.5% of its total assets in U.S. government securities, cash, and/or repurchase agreements that are fully collateralized by U.S. government securities or cash (the Fund currently invests at least 80% of its net assets in such securities). As a government money market fund, the Fund will continue to seek to maintain a stable $1.00 net asset value, though there is no guarantee that it will be able to do so.

The changes are the result of recent SEC amendments to Rule 2a-7 under the Investment Company Act of 1940. Government Money Market - Money Market Class will not impose liquidity fees and/or redemption gates. Even though strict regulations of government money market funds can result in lower yields, such funds may also have a high degree of safety and liquidity.

Performance displayed represents past performance, which is no guarantee of future results.

An investment in the U.S. Government Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Holdings Diversification (Market Exposure as % of Net Assets)

FADN — Federal Agency Discount Note
FAN — Federal Agency Note

Inception Date: June 18, 2012

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.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Money Market Class	0.00%	0.00%	0.90%

* The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes.

198 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
U.S. GOVERNMENT MONEY MARKET FUND

	Face Amount		Value
FEDERAL AGENCY NOTES†† - 24.1%
Federal Farm Credit Bank1
0.52% due 07/20/162	$	42,000,000	$	42,005,152
0.57% due 12/14/162		25,000,000		24,998,226
0.42% due 07/08/162		23,000,000		23,000,000
Total Federal Farm Credit Bank				90,003,378
Federal Home Loan Bank1
0.52% due 10/19/162		45,000,000		45,000,000
0.54% due 10/12/162		20,000,000		19,998,837
Total Federal Home Loan Bank				64,998,837
Total Federal Agency Notes
(Cost $155,002,215)				155,002,215
FEDERAL AGENCY DISCOUNT NOTES†† - 24.0%
Federal Home Loan Bank1
0.39% due 06/10/16		100,000,000		99,924,167
0.58% due 09/14/16		20,000,000		19,946,511
0.25% due 04/01/16		14,242,000		14,242,000
Total Federal Home Loan Bank				134,112,678
Federal Farm Credit Bank1
0.29% due 05/02/16		11,772,000		11,768,959
Freddie Mac3
0.27% due 04/04/16		8,500,000		8,499,805
Total Federal Agency Discount Notes
(Cost $154,381,442)				154,381,442
U.S. GOVERNMENT SECURITIES†† - 10.7%
U.S. Treasury Notes
0.37% due 07/31/162		44,107,000		44,113,388
0.40% due 10/31/162		25,000,000		25,001,911
Total U.S. Treasury Notes				69,115,299
Total U.S. Government Securities
(Cost $69,115,299)				69,115,299
CORPORATE BONDS†† - 1.0%
Financial Institutions - 1.0%
National Australia Bank Limited
1.16% due 07/25/162		4,830,000		4,836,558
Canadian Imperial Bank of Commerce
1.13% due 07/18/162		1,820,000		1,822,102
Total Financial Institutions				6,658,660
Total Corporate Bonds
(Cost $6,658,660)				6,658,660
COMMERCIAL PAPER†† - 20.9%
Nordea Bank AB
0.68% due 06/06/16		10,000,000		9,987,533
0.67% due 07/18/16		10,000,000		9,979,750
Total Nordea Bank AB				19,967,283
Bank of Nova Scotia
0.72% due 06/06/16		15,000,000		14,979,873
ING US Funding LLC
0.67% due 06/10/16		10,000,000		9,986,972
0.84% due 07/06/16		5,000,000		4,988,800
Total ING US Funding LLC				14,975,772
Coca-Cola Company
0.67% due 07/11/16		15,000,000		14,971,804
Skandinaviska Enskilda Banken AB
0.80% due 07/29/16		15,000,000		14,960,334
Prudential plc
0.70% due 06/15/16		10,000,000		9,985,417
Danske Corporation
0.82% due 07/07/164		10,000,000		9,977,906
Societe Generale SA
0.83% due 07/06/16		10,000,000		9,977,867
UBS Finance Delaware LLC
0.85% due 07/05/16		10,000,000		9,977,569
Toyota Motor Credit Corp
0.82% due 07/29/16		10,000,000		9,972,894
Natixis NY Branch
0.70% due 05/31/16		5,000,000		4,994,167
Total Commercial Paper
(Cost $134,740,886)				134,740,886

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 199

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
U.S. GOVERNMENT MONEY MARKET FUND

	Face Amount		Value
REPURCHASE AGREEMENTS†† - 33.0%
Individual Repurchase Agreement
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16 (secured by U.S. Treasury Notes, 0.13% 01/15/22 - 07/15/22 with a value of $151,427,409) to be repurchased at $148,459,188	$	148,458,240	$	148,458,240
Joint Repurchase Agreements5
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		47,522,602		47,522,602
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		16,159,705		16,159,705
Total Repurchase Agreements
(Cost $212,140,547)				212,140,547
Total Investments - 113.7%
(Cost $732,039,049)			$	732,039,049
Other Assets & Liabilities, net - (13.7)%				(88,166,999	)
Total Net Assets - 100.0%			$	643,872,050

††	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	Variable rate security. Rate indicated is rate effective at March 31, 2016.
3	On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm.
4	Security is a 144A or Section 4(a)(2) security. The total market value of 144A or Section 4(a)(2) securities is $9,977,906 (cost $9,977,906), or 1.5% of total net assets. These securities have been determined to be liquid under guidelines established by the Board of Trustees.
5	Repurchase Agreements — See Note 5.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

200 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
U.S. GOVERNMENT MONEY MARKET FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Commercial Paper	$	—	$	134,740,886	$	—	$	134,740,886
Corporate Bonds		—		6,658,660		—		6,658,660
Federal Agency Discount Notes		—		154,381,442		—		154,381,442
Federal Agency Notes		—		155,002,215		—		155,002,215
Repurchase Agreements		—		212,140,547		—		212,140,547
U.S. Government Securities		—		69,115,299		—		69,115,299
Total	$	—	$	732,039,049	$	—	$	732,039,049

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 201

U.S. GOVERNMENT MONEY MARKET FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $519,898,502)	$	519,898,502
Repurchase agreements, at value (cost $212,140,547)		212,140,547
Total investments (cost $732,039,049)		732,039,049
Receivables:
Fund shares sold		31,058,627
Interest		187,954
Total assets		763,285,630
Liabilities:
Overdraft due to custodian bank		125
Payable for:
Fund shares redeemed		119,046,665
Transfer agent and administrative fees		119,049
Portfolio accounting fees		46,180
Management fees		7,931
Miscellaneous		193,630
Total liabilities		119,413,580
Commitments and contingent liabilities (Note 13)		—
Net assets	$	643,872,050
Net assets consist of:
Paid in capital	$	643,542,699
Undistributed net investment income		—
Accumulated net realized gain on investments		329,351
Net assets	$	643,872,050
Capital shares outstanding		644,118,946
Net asset value per share	$	1.00

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Interest	$	2,014,355
Other income		985
Total investment income		2,015,340
Expenses:
Management fees		4,673,743
Transfer agent and administrative fees		1,869,515
Portfolio accounting fees		616,695
Registration fees		589,930
Custodian fees		108,810
Trustees’ fees*		65,649
Line of credit fees		295
Miscellaneous		583,965
Total expenses		8,508,602
Less:
Expenses waived by service company		(1,773,061	)
Expenses waived by Adviser		(4,720,543	)
Total waived expenses		(6,493,604	)
Net expenses		2,014,998
Net investment income		342
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		347,141
Net realized gain		347,141
Net increase in net assets resulting from operations	$	347,483

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

202 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

U.S. GOVERNMENT MONEY MARKET FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	342		$	300
Net realized gain (loss) on investments		347,141			(17,790	)
Net increase (decrease) in net assets resulting from operations		347,483			(17,490	)
Distributions to shareholders from:
Net investment income		(342	)		(526	)
Net realized gains		—			(21,943	)
Total distributions to shareholders		(342	)		(22,469	)
Capital share transactions:
Proceeds from sale of shares		12,102,235,298			10,417,562,989
Distributions reinvested		264			22,085
Cost of shares redeemed		(12,153,259,388	)		(10,503,131,193	)
Net decrease from capital share transactions		(51,023,826	)		(85,546,119	)
Net decrease in net assets		(50,676,685	)		(85,586,078	)
Net assets:
Beginning of year		694,548,735			780,134,813
End of year	$	643,872,050		$	694,548,735
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold		12,102,235,298			10,417,562,989
Shares issued from reinvestment of distributions		270			22,293
Shares redeemed		(12,153,259,388	)		(10,503,131,193	)
Net decrease in shares		(51,023,820	)		(85,545,911	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 203

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.

Money Market Classa	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Period Ended March 28, 2013			Period Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income (loss) from investment operations:
Net investment income (loss)		—	b		—	b		—	b		—	b		—	b
Net gain (loss) on investments (realized and unrealized)		—	b		—	b		—	b		—	b		—	b
Total from investment operations		—	b		—	b		—	b		—	b		—	b
Less distributions from:
Net investment income		(—	)b		(—	)b		(—	)b		(—	)b		(—	)b
Net realized gains		—			(—	)b		(—	)b		—			(—	)b
Total distributions		(—	)b		(—	)b		(—	)b		(—	)b		(—	)b
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Return		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	643,872		$	694,549		$	780,135		$	848,370		$	607,565
Ratios to average net assets:
Net investment income (loss)		0.00	%d		0.00	%d		0.00	%d		0.00	%d		0.00	%d
Total expenses		0.91	%		0.92	%		0.93	%		0.95	%		0.91	%
Net expensesc		0.22	%		0.08	%		0.09	%		0.17	%		0.11	%
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	Less than $0.01 per share.
c	Net expense information reflects the expense ratios after expense waivers.
d	Less than 0.01%.

204 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Organization

The Rydex Series Funds (the “Trust”), a Delaware statutory trust, is registered with the SEC under the Investment Company Act of 1940 (”1940 Act”), as an 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 seven separate classes of shares: Investor Class shares, A-Class shares, C-Class shares, H-Class shares, P-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. At March 31, 2016, the Trust consisted of fifty-three funds.

This report covers the Nova Fund, S&P 500^® Fund, Inverse S&P 500^® Strategy Fund, Monthly Rebalance NASDAQ-100^® 2x Strategy Fund, Inverse NASDAQ-100^® Strategy Fund, Mid-Cap 1.5x Strategy Fund, Inverse Mid-Cap Strategy Fund, Russell 2000^® 1.5x Strategy Fund, Russell 2000^® Fund, Inverse Russell 2000^® Strategy Fund, Dow Jones Industrial Average^® Fund, Government Long Bond 1.2x Strategy Fund, Inverse Government Long Bond Strategy Fund, High Yield Strategy Fund, Inverse High Yield Strategy Fund, and U.S. Government Money Market Fund (the “Funds”), each a non-diversified investment company, with the exception of the U.S. Government Money Markey Fund, which is a diversified investment company. Only Investor Class, A-Class, C-Class, H-Class and Money Market Class shares had been issued by the Funds.

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.

Guggenheim Investments (“GI”) provides advisory services, and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI, RFS and GFD are affiliated entities.

Significant Accounting Policies

The Funds operate as investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

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.

The NAV of each Class of the Funds is calculated by dividing the market value of the Fund’s securities and other assets, less all liabilities, attributable to the Class by the number of outstanding shares of the Class.

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 Russell 2000^® Fund and the S&P 500^® 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 March 31, 2016, afternoon NAV.

THE RYDEX FUNDS ANNUAL REPORT | 205

NOTES TO FINANCIAL STATEMENTS (continued)

A. The Board of Trustees of the Funds (the “Board”) has adopted policies and procedures for the valuation of the Funds’ investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Board has delegated to a valuation committee, consisting of representatives from Guggenheim’s investment management, fund administration, legal and compliance departments (the “Valuation Committee”), the day-to-day responsibility for implementing the Valuation Procedures, including, under most circumstances, the responsibility for determining the fair value of the Funds’ securities or other assets.

Valuations of the Funds’ securities are supplied primarily by pricing services appointed pursuant to the processes set forth in the Valuation Procedures. The Valuation Committee convenes monthly, or more frequently as needed and will review the valuation of all assets which have been fair valued for reasonableness. The Funds’ officers, through the Valuation Committee and consistent with the monitoring and review responsibilities set forth in the Valuation Procedures, regularly review procedures used by, and valuations provided by, the pricing services.

If the pricing service cannot or does not provide a valuation for a particular investment or such valuation is deemed unreliable, such investment is fair valued by the Valuation Committee.

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, which may not necessarily represent the last sale price. If there has been no sale on such exchange or NASDAQ on a given day, the security is valued at the closing bid price on that day.

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 (“CEFs”) are valued at the last quoted sales price.

The U.S. Government Money Market Fund values debt securities at amortized cost pursuant to Rule 2a-7 of the 1940 Act, provided such amount approximates market value.

With the exception of the U.S. Government Money Market Fund, U.S. government securities are valued by either independent pricing services, the last traded fill price, or at the reported bid price at the close of business.

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 spreads, 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 are valued at amortized cost, provided such amount approximates market value.

Repurchase agreements are valued at amortized cost, provided such amounts approximate market value.

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 OTC swap agreements 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. The swap’s value is then adjusted to include dividends accrued, and financing charges and/or interest associated with the swap agreements.

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. Valuations in accordance with these methods are intended to reflect each security’s (or asset’s) “fair value.” Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to: (i)

206 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

the type of security, (ii) the initial cost of the security, (iii) the existence of any contractual restrictions on the security’s disposition, (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies, (v) quotations or evaluated prices from broker-dealers and/or pricing services, (vi) information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), (vii) an analysis of the company’s financial statements, and (viii) an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold (e.g. the existence of pending merger activity, public offerings or tender offers that might affect the value of the security).

In connection with futures contracts and other derivative investments, such factors may include 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.

B. 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.

C. 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 interest expense. In addition, the Fund must pay out the dividend rate of the equity or coupon rate of the obligation to the lender and record this as an expense. Short dividend or 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 Fund may also receive rebate income from the broker resulting from the investment of the proceeds from securities sold short.

D. 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.

E. 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.

F. The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Funds to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which could affect the market and/or credit risk of the investments.

The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

THE RYDEX FUNDS ANNUAL REPORT | 207

NOTES TO FINANCIAL STATEMENTS (continued)

Reported net realized foreign exchange gains and 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.

G. 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. Dividend income from REITs is recorded based on the income included in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts.

H. 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.

I. 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 and service fees 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. The Funds may leave cash overnight in their cash account with the custodian. 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, which was 0.25% at March 31, 2016.

K. Under the Funds’ organizational documents, their Trustees and Officers are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, 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 and Derivatives

As part of their investment strategy, the Funds utilize short sales and a variety of derivative instruments. 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. Valuation and accounting treatment of these instruments can be found under Significant Accounting Policies in Note 1 of these Notes to Financial Statements.

Short Sales

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.

Derivatives

Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more other assets, such as securities, currencies, commodities or indices. Derivative instruments may be used to increase investment flexibility (including to maintain cash reserves while maintaining exposure to certain other assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. Derivative instruments may also be used to mitigate

208 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. U.S. GAAP requires disclosures to enable investors to better understand how and why a Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund’s financial position and results of operations. The Funds may utilize derivatives for the following purposes:

Index Exposure: the use of an instrument to obtain exposure to a listed or other type of index.

Duration: the use of an instrument to manage the interest rate risk of a portfolio.

Liquidity: the ability to buy or sell exposure with little price/market impact.

Leverage: gaining total exposure to equities or other assets on the long and short sides at greater than 100% of invested capital.

For any Fund whose investment strategy consistently involves applying leverage, the value of the Fund’s shares will tend to increase or decrease more than the value of any increase or decrease in the underlying index or other asset. In addition, because an investment in derivative instruments generally requires a small investment relative to the amount of investment exposure assumed, an opportunity for increased net income is created; but, at the same time, leverage risk will increase. The Fund’s use of leverage, through borrowings or instruments such as derivatives, may cause the Fund to be more volatile and riskier than if they had not been leveraged.

Futures

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, 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 a Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default. Cash deposits are shown as segregated cash with broker on the Statements of Assets and Liabilities; securities held as collateral are noted on the Schedules of Investments.

The following table represents the Funds’ use and volume of futures on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Nova Fund	Index exposure, Leverage, Liquidity,	$	22,199,797	$	—
S&P 500® Fund	Index exposure, Liquidity		14,113,113		—
Inverse S&P 500® Strategy Fund	Index exposure, Liquidity		—		2,656,975
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Index exposure, Leverage, Liquidity		6,087,348		—
Inverse NASDAQ-100® Strategy Fund	Index exposure, Liquidity		—		4,958,955
Mid-Cap 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		6,979,268		—
Inverse Mid-Cap Strategy Fund	Index exposure, Liquidity		—		181,520
Russell 2000® 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		1,296,555		—
Russell 2000® Fund	Index exposure, Leverage, Liquidity		749,655		—
Inverse Russell 2000® Strategy Fund	Index exposure, Liquidity		—		1,020,313
Dow Jones Industrial Average® Fund	Index exposure, Liquidity		3,822,985		—
Government Long Bond 1.2x Strategy Fund	Index exposure, Leverage, Liquidity, Duration		51,822,586		—
Inverse Government Long Bond Strategy Fund	Index exposure, Liquidity, Duration		—		77,663,961
High Yield Strategy Fund	Index exposure, Liquidity, Duration		159,463,955		—
Inverse High Yield Strategy Fund	Index exposure, Liquidity, Duration		—		42,144,547

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NOTES TO FINANCIAL STATEMENTS (continued)

Swaps

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 Fund utilizing OTC swaps 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 if the underlying asset declines in value. Certain standardized swaps are subject to mandatory central clearing. Central clearing generally reduces counterparty credit risk and increases liquidity, but central clearing does not make swap transactions risk-free. 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.

Total return swaps involve commitments where single or multiple cash flows are exchanged based on the price of an underlying reference asset (such as index or basket) or a fixed or variable interest rate. Index swaps will usually be computed based on the current index value as of the close of regular trading on the NYSE or other exchange, with the swap value being adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreement. A fund utilizing a total return index swap 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 if the underlying index declines in value.

The following table represents the Funds’ use and volume of total return swaps on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Nova Fund	Index exposure, Leverage, Liquidity	$	118,943,637	$	—
S&P 500® Fund	Index exposure, Liquidity		43,384,295		—
Inverse S&P 500® Strategy Fund	Index exposure, Liquidity		—		141,502,718
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Index exposure, Leverage, Liquidity		67,355,053		—
Inverse NASDAQ-100® Strategy Fund	Index exposure, Liquidity		—		32,094,362
Mid-Cap 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		15,606,723		—
Inverse Mid-Cap Strategy Fund	Index exposure, Liquidity		—		4,021,350
Russell 2000® 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		12,170,307		—
Russell 2000® Fund	Index exposure, Leverage, Liquidity		14,662,237		—
Inverse Russell 2000® Strategy Fund	Index exposure, Liquidity		—		40,238,677
Dow Jones Industrial Average® Fund	Index exposure, Liquidity		10,837,933		—

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. In accordance with its principal investment strategy, the Funds enter into credit default swaps as a seller of protection primarily to gain exposure similar to the high yield bond market. 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 pay 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. In the event a credit event occurs, an adjustment will be made to any upfront premiums that were received by a reduction of 1.00% per credit event.

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.

210 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

The following table represents the Funds’ use and volume of credit default swaps on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
High Yield Strategy Fund	Index exposure, Liquidity, Duration	$	185,655,502	$	—
Inverse High Yield Strategy Fund	Index exposure, Liquidity, Duration		—		51,134,747

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.

Derivative Investment Holdings Categorized by Risk Exposure

The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of March 31, 2016:

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 March 31, 2016:

Asset Derivative Investments Value
Fund	Futures Equity Contracts		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2016
Nova Fund	$	164,064	$	611,749	$	—	$	—	$	775,813
S&P 500® Fund		274,328		465,666		—		—		739,994
Inverse S&P 500® Strategy Fund		1,338		—		—		—		1,338
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		23,360		29,528		—		—		52,888
Mid-Cap 1.5x Strategy Fund		149,439		83,084		—		—		232,523
Russell 2000® 1.5x Strategy Fund		10,302		92,343		—		—		102,645
Russell 2000® Fund		41,311		224,345		—		—		265,656
Dow Jones Industrial Average® Fund		160,718		43,245		—		—		203,963
Government Long Bond 1.2x Strategy Fund		—		—		1,504,882		—		1,504,882
Inverse Government Long Bond Strategy Fund		—		—		318,981		—		318,981
High Yield Strategy Fund		—		—		2,828,738		8,240,341		11,069,079

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NOTES TO FINANCIAL STATEMENTS (continued)

Liability Derivative Investments Value
Fund	Futures Equity Contracts		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2016
S&P 500® Fund	$	—	$	34,021	$	—	$	—	$	34,021
Inverse S&P 500® Strategy Fund		—		1,179,138		—		—		1,179,138
Inverse NASDAQ-100® Strategy Fund		247,336		1,071,406		—		—		1,318,742
Inverse Mid-Cap Strategy Fund		24,045		34,604		—		—		58,649
Inverse Russell 2000® Strategy Fund		2,499		342,862		—		—		345,361
Inverse High Yield Strategy Fund		—		—		5,700		89,846		95,546

* 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 year ended March 31, 2016:

Derivative Investment Type	Location of Gain (Loss) on Derivatives
Equity/Interest Rate Contracts	Net realized gain (loss) on futures contracts
	Net change in unrealized appreciation (depreciation) on futures contracts
Equity/Credit 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 year ended March 31, 2016:

Realized Gain (Loss) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts			Swaps Equity Contracts			Futures Interest Rate Contracts			Swaps Credit Default Contracts		Total
Nova Fund	$	(534,915	)	$	(4,304,217	)	$	—		$	—	$	(4,839,132	)
S&P 500® Fund		1,819,577			(5,019,243	)		—			—		(3,199,666	)
Inverse S&P 500® Strategy Fund		(1,069,710	)		(15,465,987	)		—			—		(16,535,697	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		(12,291,243	)		(39,747,626	)		—			—		(52,038,869	)
Inverse NASDAQ-100® Strategy Fund		3,842			(3,710,668	)		—			—		(3,706,826	)
Mid-Cap 1.5x Strategy Fund		1,828,163			(3,767,326	)		—			—		(1,939,163	)
Inverse Mid-Cap Strategy Fund		249,231			310,209			—			—		559,440
Russell 2000® 1.5x Strategy Fund		1,433,228			(1,182,700	)		—			—		250,528
Russell 2000® Fund		2,075,266			470,905			—			—		2,546,171
Inverse Russell 2000® Strategy Fund		(2,809,872	)		1,102,774			—			—		(1,707,098	)
Dow Jones Industrial Average® Fund		169,795			336,032			—			—		505,827
Government Long Bond 1.2x Strategy Fund		—			—			9,382,592			—		9,382,592
Inverse Government Long Bond Strategy Fund		—			—			1,321,738			—		1,321,738
High Yield Strategy Fund		—			—			(4,322,206	)		12,943,952		8,621,746
Inverse High Yield Strategy Fund		—			—			(2,454,387	)		2,511,150		56,763

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NOTES TO FINANCIAL STATEMENTS (continued)

Change in Unrealized Appreciation(Depreciation) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts*			Swaps Equity Contracts			Futures Interest Rate Contracts			Swaps Credit Default Contracts			Total
Nova Fund	$	112,883		$	324,292		$	—		$	—		$	437,175
S&P 500® Fund		232,754			446,145			—			—			678,899
Inverse S&P 500® Strategy Fund		(122,206	)		(738,589	)		—			—			(860,795	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		(369,302	)		(124,275	)		—			—			(493,577	)
Inverse NASDAQ-100® Strategy Fund		(251,826	)		(1,044,013	)		—			—			(1,295,839	)
Mid-Cap 1.5x Strategy Fund		148,921			(192,729	)		—			—			(43,808	)
Inverse Mid-Cap Strategy Fund		(24,045	)		9,928			—			—			(14,117	)
Russell 2000® 1.5x Strategy Fund		(3,753	)		(77,690	)		—			—			(81,443	)
Russell 2000® Fund		(304,454	)		178,089			—			—			(126,365	)
Inverse Russell 2000® Strategy Fund		(8,259	)		(270,032	)		—			—			(278,291	)
Dow Jones Industrial Average® Fund		160,718			43,245			—			—			203,963
Government Long Bond 1.2x Strategy Fund		—			—			(929,071	)		—			(929,071	)
Inverse Government Long Bond Strategy Fund		—			—			1,300,717			—			1,300,717
High Yield Strategy Fund		—			—			(84,465	)		6,585,981			6,501,516
Inverse High Yield Strategy Fund		—			—			12,219			(80,174	)		(67,955	)

In conjunction with the use of short sales and derivative instruments, 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 the Funds.

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 their annualized rates below, based on the average daily net assets of the Funds:

Fund	Management Fees (as a % of Net Assets)
Nova Fund	0.75%
S&P 500® Fund	0.75%
Inverse S&P 500® Strategy Fund	0.90%
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	0.90%
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%
Dow Jones Industrial Average® Fund	0.75%
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%

GI has contractually agreed to reduce fees and/or reimburse expenses for the Monthly Rebalance NASDAQ-100^® 2x Strategy Fund to the extent necessary to keep net operating expenses for A-Class, C-Class and H-Class shares (including Rule 12b-1 fees if any) (excluding brokerage, dividends on securities sold short, acquired fund fees and expenses, interest, taxes, litigation, indemnification, and extraordinary expenses) from exceeding 1.35%, 2.10% and 1.35% of the Fund’s

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NOTES TO FINANCIAL STATEMENTS (continued)

A-Class, C-Class and H-Class shares average daily net assets, respectively. 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 1.35%, 2.10% and 1.35%, respectively. This agreement may be terminated only with the approval of the Fund’s Board of Trustees.

RFS provides transfer agent and administrative services to the Funds 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:

Fund	Transfer Agent and Administrative Fees (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.

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 Plan applicable to A-Class shares and H-Class shares for which GFD 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 GFD at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GFD, in turn, will pay the Service Provider out of its fees. GFD 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 a shareholder’s financial adviser for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GFD for paying the shareholder’s financial adviser an ongoing sales commission. GFD advances the first year’s service and distribution fees to the financial adviser. GFD retains the service and distribution fees on accounts with no authorized dealer of record.

GI and its affiliates have voluntarily agreed to waive their fees, including but not limited to accounting, shareholder investor 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 investor services fees are waived, dealer compensation will be reduced to the extent of such waiver.

For the year ended March 31, 2016, GFD retained sales charges of $349,121 relating to sales of A-Class shares of the Trust.

Certain trustees and officers of the Trust are also officers of GI, RFS and GFD.

214 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

4. Fair Value Measurement

In accordance with U.S. GAAP, fair value is defined as the price that the Funds 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. U.S. GAAP establishes a three-tier fair value hierarchy based on the types of inputs used to value assets and liabilities and requires corresponding disclosure. The hierarchy and the corresponding inputs are summarized below:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — significant other observable inputs (for example quoted prices for securities that are similar based on characteristics such as interest rates, prepayment speeds, credit risk, etc.).

Level 3 — significant unobservable inputs based on the best information available under the circumstances, to the extent observable inputs are not available, which may include assumptions.

The types of inputs available depend on a variety of factors, such as the type of security and the characteristics of the markets in which it trades, if any. Fair valuation determinations that rely on fewer or no observable inputs require greater judgment. Accordingly, fair value determinations for Level 3 securities require the greatest amount of judgment.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The suitability of the techniques and sources employed to determine fair valuation are regularly monitored and subject to change.

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 March 31, 2016, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement		Face Value		Repurchase Price	Collateral		Par Value		Fair Value
Royal Bank of Canada					U.S. TIP Bonds
0.23%					0.13% - 0.38%
Due 04/01/16	$	364,541,761	$	364,544,090	04/15/17 - 07/15/23	$	353,293,600	$	371,832,617
HSBC Group					U.S. Treasury Strips
0.21%					0.00%
Due 04/01/16		182,287,605		182,288,668	05/15/43		392,890,600		185,933,378

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 adviser, 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

During the year ended March 31, 2016, certain Funds lent their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations are net of rebates paid to borrowers and earnings on cash collateral investments shared with the lending agent. As of March 31, 2016, all Funds had ceased participation in securities lending.

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NOTES TO FINANCIAL STATEMENTS (continued)

7. Offsetting

In the normal course of business, the Funds enter into 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.

In order to better define their contractual rights and to secure rights that will help the Funds mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs OTC derivatives, including foreign exchange contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Funds and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as segregated cash with broker/receivable for variation margin, or payable for swap settlement/variation margin. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold (e.g., $300,000) before a transfer is required to be made. To the extent amounts due to the Funds from their counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty nonperformance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe to be of good standing and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.

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
Fund	Instrument	Gross Amounts of Recognized Assets1		Gross Amounts Offset In the Statements of Assets and Liabilities		Net Amount of Assets Presented on the Statements of Assets and Liabilities		Financial Instruments		Cash Collateral Received		Net Amount
Nova Fund	Swap equity contracts	$	611,749	$	—	$	611,749	$	—	$	—	$	611,749
S&P 500® Fund	Swap equity contracts		465,666		—		465,666		—		—		465,666
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Swap equity contracts		29,528		—		29,528		—		—		29,528
Mid-Cap 1.5x Strategy Fund	Swap equity contracts		83,084		—		83,084		—		—		83,084
Russell 2000® 1.5x Strategy Fund	Swap equity contracts		92,343		—		92,343		—		—		92,343
Russell 2000® Fund	Swap equity contracts		224,345		—		224,345		—		—		224,345
Dow Jones Industrial Average® Fund	Swap equity contracts		43,245		—		43,245		—		—		43,245

216 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

								Gross Amounts Not Offset in the Statements of Assets and Liabilities
Fund	Instrument	Gross Amounts of Recognized Liabilities1		Gross Amounts Offset In the Statements of Assets and Liabilities		Net Amount of Liabilities Presented on theStatements of Assets and Liabilities		Financial Instruments		Cash Collateral Pledged		Net Amount
S&P 500® Fund	Swap equity contracts	$	34,021	$	—	$	34,021	$	—	$	34,021	$	—
Inverse S&P 500® Strategy Fund	Swap equity contracts		1,179,138		—		1,179,138		995,666		183,472		—
Inverse NASDAQ-100® Strategy Fund	Swap equity contracts		1,071,406		—		1,071,406		1,064,312		7,094		—
Inverse Mid-Cap Strategy Fund	Swap equity contracts		34,604		—		34,604		33,577		1,027		—
Inverse Russell 2000® Strategy Fund	Swap equity contracts		342,862		—		342,862		298,964		43,898		—

¹ Exchange-traded futures and centrally cleared swaps are excluded from these reported amounts.

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. The Funds’ federal tax returns are subject to examination by the Internal Revenue Service for a period of three years after they are filed.

Tax basis capital losses in excess of capital gains are carried forward to offset future net capital gains. For the year ended March 31, 2016, the following capital loss carryforward amounts were expired or used:

Fund	Expired		Used
Nova Fund	$	—	$	2,155,773
Inverse NASDAQ-100® Strategy Fund		8,534,020		—
Inverse Mid-Cap Strategy Fund		850,800		531,810
Inverse Russell 2000® Strategy Fund		7,459,340		—
Government Long Bond 1.2x Strategy Fund		—		12,466,827
Inverse Government Long Bond Strategy Fund		2,188,094		1,563,156
High Yield Strategy Fund		—		218,279
Inverse High Yield Strategy Fund		—		3,296,808
U.S. Government Money Market Fund		—		17,790

THE RYDEX FUNDS ANNUAL REPORT | 217

NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributions paid during the year ended March 31, 2016 is as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Return of Capital		Total Distributions
Nova Fund	$	261,033	$	—	$	—	$	261,033
S&P 500® Fund		2,010,881		11,389,244		—		13,400,125
Inverse S&P 500® Strategy Fund		—		—		—		—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		—		—		—		—
Inverse NASDAQ-100® Strategy Fund		—		—		—		—
Mid-Cap 1.5x Strategy Fund		1,870,707		—		—		1,870,707
Inverse Mid-Cap Strategy Fund		—		—		—		—
Russell 2000® 1.5x Strategy Fund		978,939		—		—		978,939
Russell 2000® Fund		742,891		—		—		742,891
Inverse Russell 2000® Strategy Fund		—		—		—		—
Dow Jones Industrial Average® Fund		—		—		—		—
Government Long Bond 1.2x Strategy Fund		1,571,845		406,240		—		1,978,085
Inverse Government Long Bond Strategy Fund		—		—		—		—
High Yield Strategy Fund		8,438,239		—		—		8,438,239
Inverse High Yield Strategy Fund		—		—		—		—
U.S. Government Money Market Fund		342		—		—		342

The tax character of distributions paid during the year ended March 31, 2015 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Return of Capital		Total Distributions
Nova Fund	$	169,151	$	—	$	—	$	169,151
S&P 500® Fund		1,683,213		2,899,418		—		4,582,631
Inverse S&P 500® Strategy Fund		—		—		—		—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		—		—		—		—
Inverse NASDAQ-100® Strategy Fund		—		—		—		—
Mid-Cap 1.5x Strategy Fund		227,935		409,228		—		637,163
Inverse Mid-Cap Strategy Fund		—		—		—		—
Russell 2000® 1.5x Strategy Fund		—		244,398		—		244,398
Russell 2000® Fund		2,480,559		965,945		—		3,446,504
Inverse Russell 2000® Strategy Fund		—		—		—		—
Government Long Bond 1.2x Strategy Fund		1,497,181		—		18,073		1,515,254
Inverse Government Long Bond Strategy Fund		—		—		—		—
High Yield Strategy Fund		—		—		—		—
Inverse High Yield Strategy Fund		—		—		—		—
U.S. Government Money Market Fund		22,469		—		—		22,469

Note: For federal income tax purposes, short-term capital gain distributions are treated as ordinary income distributions.

218 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributable earnings/(accumulated losses) at March 31, 2016 is as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ (Depreciation)			Capital Loss Carryforward & Other Losses
Nova Fund	$	36,022	$	1,146,043	$	18,214,060		$	—
S&P 500® Fund		—		1,221,915		33,094,273			—
Inverse S&P 500® Strategy Fund		—		—		(1,361,037	)		(337,421,996	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		—		—		18,942			(96,628,752	)
Inverse NASDAQ-100® Strategy Fund		—		—		(1,086,587	)		(47,532,840	)
Mid-Cap 1.5x Strategy Fund		—		715,324		980,687			(81,090	)
Inverse Mid-Cap Strategy Fund		—		—		(36,942	)		(12,030,426	)
Russell 2000® 1.5x Strategy Fund		—		197,147		378,429			(34,572	)
Russell 2000® Fund		—		—		(1,765,612	)		(158,583	)
Inverse Russell 2000® Strategy Fund		—		—		(362,647	)		(47,619,165	)
Dow Jones Industrial Average® Fund		249,466		198,308		158,564			—
Government Long Bond 1.2x Strategy Fund		—		1,662,337		(179,277	)		—
Inverse Government Long Bond Strategy Fund		—		—		(1,217,657	)		(372,332,772	)
High Yield Strategy Fund		5,356,385		—		10,638,274			(5,761,833	)
Inverse High Yield Strategy Fund		—		—		(92,699	)		(15,621,241	)
U.S. Government Money Market Fund		329,351		—		—			—

Capital Loss Carryforward amounts may be limited due to Federal income tax regulations.

For Federal income tax purposes, capital loss carryforwards represent realized losses of the Funds that may be carried forward and applied against future capital gains. For taxable years beginning on or before December 22, 2010, such capital losses may be carried forward for a maximum of eight years. Under the RIC Modernization Act of 2010, the 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 taxable years must be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to 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. As of March 31, 2016, capital loss carryforwards for the Funds were as follows:

	Expires in			Expires in			Expires in			Unlimited						Total Capital Loss
Fund	2017			2018			2019			Short-Term			Long-Term			Carryforward
Nova Fund	$	—		$	—		$	—		$	—		$	—		$	—
S&P 500® Fund		—			—			—			—			—			—
Inverse S&P 500 Strategy Fund		—			(107,667,355	)		(64,265,070	)		(143,057,874	)		(22,080,990	)		(337,071,289	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		—			—			—			(88,051,841	)		(8,576,911	)		(96,628,752	)
Inverse NASDAQ-100® Strategy Fund		—			(16,105,314	)		(9,266,829	)		(19,595,347	)		(2,430,592	)		(47,398,082	)
Mid-Cap 1.5x Strategy Fund		—			—			—			—			—			—
Inverse Mid-Cap Strategy Fund		—			(6,411,872	)		(1,499,847	)		(3,437,485	)		(669,210	)		(12,018,414	)
Russell 2000® 1.5x Strategy Fund		—			—			—			—			—			—
Russell 2000® Fund		—			—			—			(66,813	)		—			(66,813	)
Inverse Russell 2000® Strategy Fund		—			(15,938,452	)		(10,451,551	)		(15,615,362	)		(5,428,126	)		(47,433,491	)
Dow Jones Industrial Average® Fund		—			—			—			—			—			—
Government Long Bond 1.2x Strategy Fund		—			—			—			—			—			—
Inverse Government Long Bond Strategy Fund		(24,167,315	)		(68,305,233	)		(23,242,075	)		(209,984,061	)		(45,373,633	)		(371,072,317	)
High Yield Strategy Fund		—			—			—			(2,960,891	)		(2,800,942	)		(5,761,833	)
Inverse High Yield Strategy Fund		—			(3,356,295	)		(4,361,182	)		(5,287,802	)		(2,091,942	)		(15,097,221	)
U.S. Government Money Market Fund		—			—			—			—			—			—

THE RYDEX FUNDS ANNUAL REPORT | 219

NOTES TO FINANCIAL STATEMENTS (continued)

Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are typically due to qualified late year losses, losses deferred due to wash sales, utilization of earnings and profits on shareholder redemptions, and the “mark-to-market of certain passive foreign investment companies (PFICs) for tax purposes. Additional differences may result from tax treatment of net investment losses and expired capital loss carryforwards. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise. These reclassifications have no effect on the net assets or NAV per share.

On the Statements of Assets and Liabilities the following adjustments were made for permanent book/tax differences:

Fund	Paid In Capital			Undistributed Net Investment Income (Loss)			Accumulated Net Realized Gain (Loss)
Nova Fund	$	3,941,188		$	—		$	(3,941,188	)
S&P 500® Fund		10,339,458			65,779			(10,405,237	)
Inverse S&P 500® Strategy Fund		(938,760	)		938,760			—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		(427,077	)		427,077			—
Inverse NASDAQ-100® Strategy Fund		(8,862,516	)		328,496			8,534,020
Mid-Cap 1.5x Strategy Fund		2,024,848			441,309			(2,466,157	)
Inverse Mid-Cap Strategy Fund		(912,662	)		61,862			850,800
Russell 2000® 1.5x Strategy Fund		1,126,425			201,535			(1,327,960	)
Russell 2000® Fund		(259,801	)		260,321			(520	)
Inverse Russell 2000® Strategy Fund		(7,797,607	)		338,267			7,459,340
Dow Jones Industrial Average® Fund		(10,006	)		10,240			(234	)
Government Long Bond 1.2x Strategy Fund		1,051,276			406,240			(1,457,516	)
Inverse Government Long Bond Strategy Fund		(9,178,304	)		6,990,210			2,188,094
High Yield Strategy Fund		(19,723	)		10,467,121			(10,447,398	)
Inverse High Yield Strategy Fund		(1,904,549	)		(51,201	)		1,955,750
U.S. Government Money Market Fund		—			—			—

At March 31, 2016, 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:

Fund	Tax Cost		Tax Unrealized Gain		Tax Unrealized Loss			Net Unrealized Gain (Loss)
Nova Fund	$	182,272,748	$	18,392,313	$	(790,002	)	$	17,602,311
S&P 500® Fund		249,176,659		33,549,700		(887,072	)		32,662,628
Inverse S&P 500® Strategy Fund		170,968,962		21,214		(203,113	)		(181,899	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		6,146,895		26,781		(37,366	)		(10,585	)
Inverse NASDAQ-100® Strategy Fund		68,057,556		—		(15,181	)		(15,181	)
Mid-Cap 1.5x Strategy Fund		17,625,374		1,127,961		(230,356	)		897,605
Inverse Mid-Cap Strategy Fund		2,825,043		2		(2,340	)		(2,338	)
Russell 2000® 1.5x Strategy Fund		8,784,908		724,236		(438,150	)		286,086
Russell 2000® Fund		59,012,548		—		(1,989,958	)		(1,989,958	)
Inverse Russell 2000® Strategy Fund		19,003,764		—		(19,786	)		(19,786	)
Dow Jones Industrial Average® Fund		61,892,718		461,010		(345,691	)		115,319
Government Long Bond 1.2x Strategy Fund		132,058,388		—		(179,277	)		(179,277	)
Inverse Government Long Bond Strategy Fund		272,230,692		—		(1,010,770	)		(1,010,770	)
High Yield Strategy Fund		714,190,766		2,412,591		(14,658	)		2,397,933
Inverse High Yield Strategy Fund		10,974,424		—		(2,853	)		(2,853	)
U.S. Government Money Market Fund		732,039,049		2,746		(2,746	)		—

220 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

Pursuant to Federal income tax regulations applicable to regulated investment companies, the Funds have elected to treat net capital losses and certain ordinary losses realized between November 1 and March 31 of each year as occurring on the first day of the following tax year. The Funds have also elected to treat certain ordinary losses realized between January 1 and March 31 of each year as occurring on the first day of the following tax year. For the year ended March 31, 2016, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2016:

Fund	Ordinary
Inverse S&P 500® Strategy Fund	$	(350,707	)
Inverse NASDAQ-100® Strategy Fund		(134,758	)
Mid-Cap 1.5x Strategy Fund		(81,090	)
Inverse Mid-Cap Strategy Fund		(12,012	)
Russell 2000® 1.5x Strategy Fund		(34,572	)
Russell 2000® Fund		(91,770	)
Inverse Russell 2000® Strategy Fund		(185,674	)
Inverse Government Long Bond Strategy Fund		(1,260,455	)
Inverse High Yield Strategy Fund		(524,020	)

9. Securities Transactions

For the year ended March 31, 2016, the cost of purchases and proceeds from sales of investment securities, excluding government securities, short-term investments and derivatives, were as follows:

Fund	Purchases		Sales
Nova Fund	$	667,538,106	$	649,870,155
S&P 500® Fund		355,184,900		415,445,762
Inverse S&P 500® Strategy Fund		124,851,349		41,500,000
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		610,012,149		871,560,924
Inverse NASDAQ-100® Strategy Fund		183,998,301		176,400,000
Mid-Cap 1.5x Strategy Fund		345,595,469		345,268,713
Inverse Mid-Cap Strategy Fund		2,527,217		2,250,000
Russell 2000® 1.5x Strategy Fund		130,179,110		137,573,788
Russell 2000® Fund		82,451,588		67,110,554
Inverse Russell 2000® Strategy Fund		68,464,411		60,400,000
Dow Jones Industrial Average® Fund		66,462,578		21,298,330
Government Long Bond 1.2x Strategy Fund		299,124,755		292,650,000
Inverse Government Long Bond Strategy Fund		234,735,630		172,430,343
High Yield Strategy Fund		843,454,559		605,291,900
Inverse High Yield Strategy Fund		213,541,732		210,700,000
U.S. Government Money Market Fund		—		30,002,500

For the year ended March 31, 2016, the cost of purchases and proceeds from sales of government securities were as follows:

Fund	Purchases		Sales
Government Long Bond 1.2x Strategy Fund	$	2,551,948,672	$	2,579,764,560
Inverse Government Long Bond Strategy Fund		1,666,114,180		1,699,916,016

THE RYDEX FUNDS ANNUAL REPORT | 221

NOTES TO FINANCIAL STATEMENTS (continued)

The Funds are permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by a Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each transaction is effected at the current market price to save costs, where permissible. For the year ended March 31, 2016, the Funds engaged in purchases and sales of securities, pursuant to Rule 17a-7 of the 1940 Act, as follows:

Fund	Purchases		Sales		Realized Gain (Loss)
Nova Fund	$	162,118,972	$	177,164,679	$	1,700,976
S&P 500® Fund		214,941,133		236,075,870		7,364,652
Inverse S&P 500® Strategy Fund		9,165,927		—		—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		285,016,648		284,107,199		(6,149,204	)
Mid-Cap 1.5x Strategy Fund		3,541,623		2,783,576		(41,416	)
Russell 2000® 1.5x Strategy Fund		32,146,009		45,646,533		1,724,906
Russell 2000® Fund		79,451,305		31,150,117		(1,755,055	)
Dow Jones Industrial Average® Fund		8,865,433		4,803,029		(254,019	)
Inverse Government Long Bond Strategy Fund		34,923,589		—		—
High Yield Strategy Fund		8,379,994		15,598,915		(46,624	)
U.S. Government Money Market Fund		27,110,423		118,765,335		23,857

10. Affiliated Transactions

Investments representing 5% or more of the outstanding voting shares of a portfolio company of a fund, or control of or by, or common control under GI, result in that portfolio company being considered an affiliated company of such fund, as defined in the 1940 Act.

The Funds may invest in the Guggenheim Strategy Funds Trust consisting of Guggenheim Strategy Fund I, Guggenheim Strategy Fund II, Guggenheim Strategy Fund III, and Guggenheim Variable Insurance Strategy Fund III (collectively, the “Cash Management Funds”), open-end management investment companies managed by GI. The Cash Management Funds, which launched on March 11, 2014, are offered as cash management options only to mutual funds, trusts, and other accounts managed by GI and/or its affiliates, and are not available to the public. The Cash Management Funds pay no investment management fees. The Cash Management Funds’ annual report on Form N-CSR dated September 30, 2015, is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at http://www.sec.gov/Archives/edgar/data/1601445/000089180415000857/gug63224-ncsr.htm.

Transactions during the year ended March 31, 2016, in which the portfolio company is an “affiliated person”, were as follows:

Affiliated issuers by Fund	Value 03/31/15		Additions		Reductions			Value 03/31/16		Shares 03/31/16		Investment Income		Realized Gain (Loss)
Nova Fund
Guggenheim Strategy Fund I	$	—	$	180,826,314	$	(180,000,000	)	$	761,374		30,688	$	214,103	$	(48,861	)
Inverse S&P 500® Strategy Fund
Guggenheim Strategy Fund I	$	—	$	98,810,143	$	(41,500,000	)	$	57,103,957		2,301,651	$	471,886	$	(81,026	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund
Guggenheim Strategy Fund I	$	—	$	190,851,038	$	(190,200,000	)	$	633,522		25,535	$	180,227	$	55,859
Inverse NASDAQ-100® Strategy Fund
Guggenheim Strategy Fund I	$	—	$	182,423,879	$	(176,400,000	)	$	5,940,393		239,435	$	99,683	$	(85,669	)

222 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

Affiliated issuers by Fund	Value 03/31/15		Additions		Reductions			Value 03/31/16		Shares 03/31/16		Investment Income		Realized Gain (Loss)
Mid-Cap 1.5x Strategy Fund
Guggenheim Strategy Fund I	$	—	$	97,378,670	$	(95,450,000	)	$	1,948,249		78,527	$	68,947	$	23,985
Inverse Mid-Cap Strategy Fund
Guggenheim Strategy Fund I	$	—	$	3,234,916	$	(2,250,000	)	$	980,068		39,503	$	12,216	$	(4,630	)
Russell 2000® 1.5x Strategy Fund
Guggenheim Strategy Fund I	$	—	$	57,707,289	$	(57,650,000	)	$	57,101		2,302	$	24,881	$	3,205
Inverse Russell 2000® Strategy Fund
Guggenheim Strategy Fund I	$	—	$	67,110,405	$	(60,400,000	)	$	6,610,653		266,451	$	116,197	$	(101,064	)
Dow Jones Industrial Average® Fund
Guggenheim Strategy Fund I	$	—	$	11,411,161	$	(7,550,000	)	$	3,861,421		155,640	$	11,161	$	964
Government Long Bond 1.2x Strategy Fund
Guggenheim Strategy Fund I	$	—	$	321,965,011	$	(290,650,000	)	$	31,234,529		1,258,949	$	149,526	$	(72,726	)
Inverse Government Long Bond Strategy Fund
Guggenheim Strategy Fund I	$	53,244,134	$	186,750,927	$	(199,500,000	)	$	40,271,414		1,623,193	$	600,927	$	(351,102	)
High Yield Strategy Fund
Guggenheim Strategy Fund I	$	64,315,270	$	471,875,269	$	(366,400,000	)	$	169,920,842		6,848,885	$	624,781	$	117,447
Guggenheim Strategy Fund II		33,783,080		176,668,643		(153,000,000	)		57,405,255		2,325,041		393,643		(13,155	)
	$	98,098,350	$	648,543,912	$	(519,400,000	)	$	227,326,097			$	1,018,424	$	104,292
Inverse High Yield Strategy Fund
Guggenheim Strategy Fund I	$	—	$	113,074,642	$	(110,950,000	)	$	2,056,929		82,907	$	101,877	$	(66,025	)
Guggenheim Strategy Fund II		—		101,912,327		(99,750,000	)		2,033,059		82,343		139,855		(128,531	)
	$	—	$	214,986,969	$	(210,700,000	)	$	4,089,988			$	241,732	$	(194,556	)

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 12, 2016. 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 year ended March 31, 2016. The Funds did not have any borrowings outstanding under this agreement at March 31, 2016.

The average daily balances borrowed during the year ended March 31, 2016, were as follows:

Fund	Average Daily Balance
Nova Fund	$	143,874
S&P 500® Fund		258,951
Inverse S&P 500® Strategy Fund		182,989
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		88,293
Inverse NASDAQ-100® Strategy Fund		820
Mid-Cap 1.5x Strategy Fund		10,270
Russell 2000® 1.5x Strategy Fund		21,282
Russell 2000® Fund		63,228
Government Long Bond 1.2x Strategy Fund		126,634
Inverse Government Long Bond Strategy Fund		40,964
High Yield Strategy Fund		22,218
U.S. Government Money Market Fund		23,211

THE RYDEX FUNDS ANNUAL REPORT | 223

NOTES TO FINANCIAL STATEMENTS (continued)

12. Conversion of Advisor Class Shares and Class H Shares

Effective following the close of business on September 30, 2015, all outstanding Advisor Class shares of the Nova Fund, Inverse S&P 500^® Strategy Fund, Inverse NASDAQ-100^® Strategy Fund, Government Long Bond 1.2x Strategy Fund and Inverse Government Long Bond Strategy Fund converted into Class H shares of the Funds and the Funds no longer offer Advisor Class shares. The conversion of all outstanding Advisor Class shares was effected by exchanging shareholders Advisor Class shares for Class H shares. Advisor Class shareholders of the Funds received Class H shares of the Fund with a value equal to the value of their investment in Advisor Class shares of the Funds on September 30, 2015.

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 May 23, 2014, the defendants filed motions to dismiss the FitzSimons action, including a global motion to dismiss Count I, which is the claim brought against former Tribune shareholders for intentional fraudulent conveyance under U.S. federal law. The Court has not yet issued a decision on any of these motions.

On March 29, 2016, the U.S. Court of Appeals for the Second Circuit issued its opinion on the appeal of the SLCFC actions. The appeals court affirmed the district court’s dismissal of those lawsuits, but on different grounds than the district court. The appeals court held that while the plaintiffs have standing under the U.S. Bankruptcy Code (which was the basis for the district court’s dismissal), their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments.

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.

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NOTES TO FINANCIAL STATEMENTS (concluded)

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.) (the “Creditor Trust action”).

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.

On April 7, 2014, the plaintiff filed a Third Amended Complaint. In the related action entitled Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adversary Proceeding No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust action”), the plaintiff also filed a Second Amended Complaint that alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On May 8, 2014, the plaintiff in the Litigation Trust action filed a motion to certify a defendant class generally comprised of all former Lyondell shareholders that received proceeds in exchange for their shares in the 2007 merger transaction.

On July 30, 2014, the defendants filed a motion to dismiss all three lawsuits. The Court held an oral argument on the motions to dismiss and on the motion for class certification on January 14 and January 15, 2015. On September 15, 2015, the Bankruptcy Court denied the motion for class certification without prejudice to the plaintiff’s right to file a renewed motion. On November 18, 2015, the Bankruptcy Court granted the defendants’ motion to dismiss the Litigation Trust action and denied their motion to dismiss the Creditor Trust and Reichman actions. The Litigation Trust action is now over, but the plaintiff has appealed the dismissal to the U.S. District Court for the Southern District of New York. On May 4, 2016, the defendants filed a motion to dismiss, or in the alternative, for a stay of, the Creditor Trust and Reichman actions in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. The Bankruptcy Court has not yet issued a decision on the motion. Discovery has commenced, and will continue, in the Creditor Trust and Reichman actions while the May 4 motion is pending.

These lawsuits do 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; Long Short Equity Fund f/k/a 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.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
of Rydex Series Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Nova Fund, S&P 500^® Fund, Inverse S&P 500^® Strategy Fund, Monthly Rebalance NASDAQ-100^® 2x Strategy Fund, Inverse NASDAQ-100^® Strategy Fund, Mid-Cap 1.5x Strategy Fund, Inverse Mid-Cap Strategy Fund, Russell 2000^® 1.5x Strategy Fund, Russell 2000^® Fund, Inverse Russell 2000^® Strategy Fund, Dow Jones Industrial Average^® Fund, Government Long Bond 1.2x Strategy Fund, Inverse Government Long Bond Strategy Fund, High Yield Strategy Fund, Inverse High Yield Strategy Fund, and U.S. Government Money Market Fund (sixteen of the series constituting the Rydex Series Funds) (the “Funds”) as of March 31, 2016, and the related statements of operations, the statements of changes in net assets, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2016, by correspondence with the custodian, transfer agent, and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of the above listed Funds (sixteen of the series constituting the Rydex Series Funds) at March 31, 2016, and the results of their operations, the changes in their net assets, and their financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

McLean, Virginia
May 25, 2016

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OTHER INFORMATION (Unaudited)

Tax Information

This information is being provided as required by the Internal Revenue Code. Amounts shown may differ from those elsewhere in the report because of differences in tax and financial reporting practice.

Of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
Nova Fund	100.00%
S&P 500® Fund	46.60%
Mid-Cap 1.5x Strategy Fund	1.31%
Russell 2000® 1.5x Strategy Fund	2.94%
Russell 2000® Fund	3.53%

Additionally, the following amounts of taxable ordinary income dividends paid during the fiscal year qualified for the lower income tax rate available to individuals under the Jobs and Growth Tax Relief Reconciliation Act of 2003:

Fund	% Qualifying
Nova Fund	100.00%
S&P 500® Fund	46.03%
Mid-Cap 1.5x Strategy Fund	1.29%
Russell 2000® 1.5x Strategy Fund	2.92%
Russell 2000® Fund	2.58%

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify as interest related dividends and qualified short-term capital gains as permitted by IRC Section 871(k)(1) and IRC Section 871(k)(2), respectively:

Fund	% Qualifying	% STCG Qualifying
S&P 500® Fund	0.00%	100.00%
Mid-Cap 1.5x Strategy Fund	0.00%	100.00%
Russell 2000® 1.5x Strategy Fund	0.00%	100.00%
Russell 2000® Fund	0.00%	100.00%
Government Long Bond 1.2x Strategy Fund	100.00%	0.00%
High Yield Strategy Fund	10.78%	0.00%
U.S. Government Money Market Fund	100.00%	0.00%

With respect to the taxable year ended March 31, 2016, the Funds hereby designate as capital gain dividends the amounts listed below, or, if subsequently determined to be different, the net capital gain of such year:

Fund	From long-term capital gains, subject to the 15% rate gains category:		From long-term capital gains, using proceeds from shareholder redemptions:
Nova Fund	$	—	$	3,941,188
S&P 500® Fund		11,389,244		10,405,237
Mid-Cap 1.5x Strategy Fund		—		2,466,157
Russell 2000® 1.5x Strategy Fund		—		1,323,554
Government Long Bond 1.2x Strategy Fund		406,240		1,051,276

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OTHER INFORMATION (Unaudited)(continued)

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 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 800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.

Sector Classification

Information in the “Schedule of Investments” is categorized by sectors using sector-level Classifications defined by the Bloomberg Industry Classification System, a widely recognized industry classification system provider. Each Fund’s registration statement has investment policies relating to concentration in specific sectors/industries. For purposes of these investment policies, the Funds usually classify sectors/industries based on industry-level Classifications used by widely recognized industry classification system providers such as Bloomberg Industry Classification System, Global Industry Classification Standards and Barclays Global Classification Scheme.

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 800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 800.820.0888.

Board Considerations in Approving the Investment Advisory Agreement for the Dow Jones Industrial Average^® Fund

The Board of Trustees (the “Board”) of Rydex Series Funds (the “Trust”), including the Trustees who are not “interested persons,” as defined by the Investment Company Act of 1940, of the Trust (“Independent Trustees”), attended an in-person meeting held on August 18, 2015 (the “August Meeting”), called for the purpose of, among other things, the consideration of, and voting on, the approval of the investment advisory agreement (the “DJIA Investment Advisory Agreement”) between the Trust and Security Investors, LLC (the “Advisor”) applicable to the Dow Jones Industrial Average^® Fund, a new series of the Trust (the “DJIA Fund”). The Board unanimously approved the DJIA Investment Advisory Agreement based on the Board’s review of qualitative and quantitative information provided by the Advisor.

Prior to reaching the conclusion to approve the DJIA Investment Advisory Agreement, the Independent Trustees requested and obtained from the Advisor such information as the Independent Trustees deemed reasonably necessary to evaluate the DJIA Investment Advisory Agreement. In addition, the Board received a memorandum from fund counsel regarding the responsibilities of the Board with respect to the approval of investment advisory agreements and participated in question and answer sessions with representatives of the Advisor. The Trustees also carefully considered information that they had received about the Advisor throughout the year as part of their regular oversight of the other series of the Trust. At the August Meeting, the Board obtained and reviewed a wide variety of information, including certain comparative information regarding the DJIA Fund’s proposed fees and expenses relative to the fees and expenses of other comparable funds (the “FUSE reports”). The Independent Trustees carefully evaluated this information, met in executive session outside the presence of fund management, and were advised by independent legal counsel with respect to their deliberations.

At the August Meeting, the Board, including the Independent Trustees, evaluated a number of factors, including among others: (a) the nature, extent and quality of the investment advisory and other services to be provided by the Advisor; (b) the Advisor’s investment management personnel; (c) the Advisor’s operations and financial condition; (d) the expected benefits (such as soft dollars) to the Advisor and its affiliates from their relationship with the DJIA Fund; (e) a comparison of the DJIA Fund’s projected advisory fees to the advisory fees charged to comparable funds or accounts, giving special attention to the absence of breakpoints in these fees and the Advisor’s rationale for not providing for breakpoints at this point in time; (f) the DJIA Fund’s expected overall fees and operating expenses compared with those of similar funds; (g) the Advisor’s compliance processes and systems; (h) the Advisor’s compliance policies and procedures; and (i) the

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OTHER INFORMATION (Unaudited)(concluded)

Advisor’s reputation, expertise and resources in the financial markets. In its deliberations, the Trustees did not identify any single piece of information that was all-important or controlling, noting that each Trustee could attribute different weights to the various factors considered.

Based on the Board’s deliberations at the August Meeting, the Board, including all of the Independent Trustees, unanimously: (a) concluded that the terms of the DJIA Investment Advisory Agreement are fair and reasonable; (b) concluded that the Advisor’s fees are reasonable in light of the services that it will provide to the DJIA Fund; and (c) agreed to approve the DJIA Investment Advisory Agreement based upon the following considerations, among others:

● Nature, Extent and Quality of Services Provided by the Advisor. The Board reviewed the scope of services to be provided by the Advisor under the DJIA Investment Advisory Agreement and determined that the Advisor was capable of providing high quality advisory services to the DJIA Fund, as indicated by the nature and quality of services provided by the Advisor in the past, the firm’s management capabilities, the professional qualifications and experience of its portfolio managers, and its investment and management oversight processes. Based on the foregoing, the Trustees determined that the approval of the DJIA Investment Advisory Agreement would enable shareholders of the Fund to receive high quality services at a cost that was appropriate and reasonable.

● Fund Expenses and Performance of the DJIA Fund and the Advisor. As the DJIA Fund had not yet commenced operations, the Board was not able to review the DJIA Fund’s performance. However, the Board considered the Advisor’s track record of successfully managing funds that seek to track the performance of a benchmark and determined that the Advisor would have the capabilities, resources, and personnel necessary to provide the DJIA Fund with a reasonable potential for positive performance. The Board also reviewed statistical information provided by the Advisor regarding the DJIA Fund’s proposed expense ratio. The Advisor engaged FUSE Research Network LLC (“FUSE”), an independent, third party research provider, to prepare a report to help the Board compare the DJIA Fund’s fees and expenses to those of comparable funds in the DJIA Fund’s peer group, and the broader peer universe, as determined by FUSE. In the report, the DJIA Fund’s proposed expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses, are compared to those of another fund with shared key characteristics (e.g., asset size, fee structure, sector or industry investment focus) determined by FUSE to comprise the DJIA Fund’s applicable peer group. The Board also considered the Advisor’s representation that it found the peer group compiled by FUSE to be appropriate due to the frequent-trading nature of the DJIA Fund’s proposed investment strategy. Based on the foregoing, the Board determined that the proposed advisory fee to be paid by the DJIA Fund is reasonable in relation to the nature and quality of the services to be provided by the Advisor.

● Costs of Services Provided to the DJIA Fund and Profits Realized by the Advisor and its Affiliates. With respect to the cost of advisory services provided and the Advisor’s profitability, the Board concluded that it was too early to predict the profitability of the DJIA Fund to the Advisor, but noted that they would monitor the Advisor’s profitability with respect to the DJIA Fund after the DJIA Fund commenced operations.

● Economies of Scale. The Board noted that because the DJIA Fund had not yet commenced operations, there were as of now, no economies of scale to share with shareholders. The Board noted that it intends to continue monitoring the existence of economies of scale as the DJIA Fund grows in size.

● Other Benefits to the Advisor and/or its Affiliates. In addition to evaluating the Advisor’s services, the Board considered the nature and amount of other benefits to be received by the Advisor and its affiliates as a result of their relationship with the DJIA Fund, including any soft dollar usage by the Advisor and any intangible benefits. In particular, the Board considered the nature, extent, quality, and cost of certain administrative, distribution, and shareholder services to be performed by the Advisor’s affiliates and the fees to be paid to the Advisor’s affiliates for those services under separate agreements and the Distribution and Shareholders Services Plan pursuant to Rule 12b-1 of the 1940 Act. In light of the costs of providing services pursuant to the separate agreements as well as the Advisor’s and its affiliates’ commitment to the DJIA Fund, the Board concluded the ancillary benefits the Advisor and its affiliates received were reasonable.

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 DJIA Investment Advisory Agreement were reasonable, and that approval of the DJIA Investment Advisory Agreement was in the best interests of the DJIA Fund and its shareholders.

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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 visiting guggenheiminvestments.com or by calling 800.820.0888.

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INTERESTED TRUSTEE
Donald C. Cacciapaglia** (1951)	Trustee from 2012 to present.	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group, Inc. (2002-2010).	236	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Corey A. Colehour (1945)	Trustee from 1993 to present; Member of the Audit Committee from 1994 to present; Member of the Governance Committee from 2014 to present; and Member of the Investment and Performance Committee from 2014 to present.	Retired.	134	None.
J. Kenneth Dalton (1941)	Trustee from 1995 to present; Chairman and Member of the Audit Committee from 1997 to present; and Member of the Compliance and Risk Oversight Committee from 2010 to present.	Retired.	134	Epiphany Funds (4) (2009-present).
John O. Demaret (1940)	Vice Chairman of the Board from 2014 to present (Chairman of the Board from 2006 to 2014); Trustee and Member of the Audit Committee from 1997 to present; Chairman (since 2014) and Member of the Compliance and Risk Oversight Committee from 2010 to present; Chairman and Member of the Investment and Performance Committee from 2014 to present; and Member of the Nominating Committee from 2014 to present.	Retired.	134	None.

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INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES - concluded
Werner E. Keller (1940)	Chairman of the Board from 2014 to present (Vice Chairman of the Board from 2010 to 2014); Trustee and Member of the Audit Committee from 2005 to present; and Member of the Investment and Performance Committee from 2014 to present.	Current: Founder and President, Keller Partners, LLC (investment research firm) (2005-present).	134	None.
Thomas F. Lydon, Jr. (1960)	Trustee and Member of the Audit Committee from 2005 to present; Member of the Nominating Committee from 2005 to present; and Member of the Governance Committee from 2007 to present.	Current: President, Global Trends Investments (registered investment adviser) (1996-present).	134	US Global Investors (GROW) (1995-present).
Patrick T. McCarville (1942)	Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; Chairman and Member of the Nominating Committee from 2004 to present; Chairman and Member of the Governance Committee from 2007 to present; and Member of the Compliance and Risk Oversight Committee from 2014 to present.	Retired. Former: Chief Executive Officer, Par Industries, Inc., d/b/a Par Leasing (1977-2010).	134	None.

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS
Donald C. Cacciapaglia (1951)	President (2012-present).	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group Inc. (2002-2010).
Michael P. Byrum (1970)	Vice President (1999-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); President and Chief Investment Officer, Rydex Holdings, LLC (2008-present); Director and Chairman, Advisory Research Center, Inc. (2006-present); Manager, Guggenheim Specialized Products, LLC (2005-present). Former: Vice President, Guggenheim Distributors, LLC (2009); Director (2009-2010) and Secretary (2002-2010), Rydex Fund Services, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors II, LLC.

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INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(concluded)

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS - concluded
Nikolaos Bonos (1963)	Vice President and Treasurer (2003-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); Chief Executive Officer, Guggenheim Specialized Products, LLC (2009-present); Chief Executive Officer & President, Rydex Fund Services, LLC (2009-present); Vice President, Rydex Holdings, LLC (2008-present). Former: Senior Vice President, Security Global Investors, LLC (2010-2011); and Senior Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC (2006-2011).
Elisabeth Miller (1968)	Chief Compliance Officer (2012-present).	Current: CCO, certain other funds in the Fund Complex (2012-present); CCO, Security Investors, LLC (2012-present); CCO, Guggenheim Funds Investment Advisors, LLC (2012-present); Managing Director, Guggenheim Investments (2012-present); Vice President, Guggenheim Funds Distributors, LLC (March 2014-present). Former: CCO, Guggenheim Distributors, LLC (2009-March 2014); Senior Manager, Security Investors, LLC (2004-2009); Senior Manager, Guggenheim Distributors, LLC (2004-2009).
Joseph M. Arruda (1966)	Assistant Treasurer (2006-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2006-present); Vice President, Security Investors, LLC (2010-present); CFO and Manager, Guggenheim Specialized Products, LLC (2009-present). Former: Vice President, Security Global Investors, LLC (2010-2011); Vice President, Rydex Advisors, LLC (2010); Vice President, Rydex Advisors II, LLC (2010).
Paul J. Davio (1972)	Assistant Treasurer (2014-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2014-present); Director, Guggenheim Investments (2006-present). Former: Manager, Mutual Fund Administration, Guggenheim Investments (2003-2006).
Amy J. Lee (1961)	Vice President (2009-present) and Secretary (2012-present).	Current: Chief Legal Officer, certain other funds in the Fund Complex (2013-present); Senior Managing Director, Guggenheim Investments (2012-present). Former: Vice President, Associate General Counsel and Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (2004-2012).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
**	Mr. Cacciapaglia is an “interested” person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Adviser’s parent company.
***	The “Fund Complex” includes all closed-end and open-end funds (including all of their portfolios) advised by the Adviser and any funds that have an investment adviser or servicing agent that is an affiliated person of the Adviser. Information provided is as of the date of this report.

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GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Funds Distributors, LLC, Security Investors, LLC, Security Distributors, Inc., Guggenheim Partners Investment Managers, LLC, 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.

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GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(concluded)

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.

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.

234 | THE RYDEX FUNDS ANNUAL REPORT

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3.31.2016

Rydex Funds Annual Report

Domestic Equity Funds	International Equity Funds
S&P 500® Pure Growth Fund	Europe 1.25x Strategy Fund
S&P 500® Pure Value Fund	Japan 2x Strategy Fund
S&P MidCap 400® Pure Growth Fund	Specialty Funds
S&P MidCap 400® Pure Value Fund	Strengthening Dollar 2x Strategy Fund
S&P SmallCap 600® Pure Growth Fund	Weakening Dollar 2x Strategy Fund
S&P SmallCap 600® Pure Value Fund

RTB2-ANN-0316x0317 guggenheiminvestments.com

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	4
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS	6
ABOUT SHAREHOLDERS’ FUND EXPENSES	7
S&P 500® PURE GROWTH FUND	10
S&P 500® PURE VALUE FUND	18
S&P MIDCAP 400® PURE GROWTH FUND	26
S&P MIDCAP 400® PURE VALUE FUND	34
S&P SMALLCAP 600® PURE GROWTH FUND	42
S&P SMALLCAP 600® PURE VALUE FUND	51
EUROPE 1.25x STRATEGY FUND	60
JAPAN 2x STRATEGY FUND	68
STRENGTHENING DOLLAR 2x STRATEGY FUND	75
WEAKENING DOLLAR 2x STRATEGY FUND	83
NOTES TO FINANCIAL STATEMENTS	90
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	105
OTHER INFORMATION	106
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	109
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	112

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2016

Dear Shareholder:

Security Investors, LLC (the “Investment Adviser”) is pleased to present the annual shareholder report for a selection of our Funds (the “Funds”) for the one-year period ended March 31, 2016.

The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), a global, diversified financial services firm.

Guggenheim Funds Distributors, LLC is the distributor of the Funds. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim and the Investment Adviser.

We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Performance Report and 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
April 30, 2016

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.

Inverse and leveraged Funds are not suitable for all investors. ● These Funds should be utilized only by investors who (a) understand the risks associated with the use of leverage, (b) understand the consequences of seeking daily leveraged investment results, (c) understand the risk of shorting, and (d) intend to actively monitor and manage their investments. ● The more a Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● Inverse Funds involve certain risks, which include increased volatility due to the Funds’ possible use of short sales of securities and derivatives, such as options and futures. ● The Funds’ use of derivatives, such as futures, options, and swap agreements, may expose the Funds’ shareholders to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. ● Short-selling involves increased risks and costs. You risk paying more for a security than you received from its sale. ● Leveraged and inverse Funds seek to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a daily basis. Because the 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. 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. The Funds rebalance their portfolios on a daily basis, increasing exposure in response to that day’s gains or reducing exposure in response to that day’s losses. Daily rebalancing will impair a Fund’s performance if the benchmark experiences volatility. Investors should monitor their leveraged and inverse Funds’ holdings consistent with their strategies, as frequently as daily. ● For more on these and other risks, please read the prospectus.

Pure Style Funds may not be suitable for all investors. ● The Funds are subject to the risk that large, medium and small-capitalization stocks may underperform other segments of the equity market or the equity market as a whole ● Value stocks are subject to the risk that the intrinsic value of the stock may never be realized by the market or that the price goes down. Growth stocks typically invest a high portion of their earnings back into their business and may lack the dividend yield that could cushion their decline in a market downturn. Growth stocks may be more volatile than other stocks because they are more sensitive to investor perceptions regarding the growth potential of the issuing company. ● The Funds are subject to the risk that unanticipated early closings of securities exchanges and other financial markets may result in the Funds’ inability to buy or sell securities or other financial instruments on that day. In certain circumstances, it may be difficult for the Funds to purchase and sell particular investments within a reasonable time at a fair price. ● Unlike many investment companies, the Funds are not actively “managed.” This means that based on market and economic conditions, the Funds’ performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities. ● The Funds are subject to active trading and tracking error risks, which may increase volatility, impact the Funds’ ability to achieve their investment objective and may decrease the Funds’ performance. ● These Funds are considered non-diversified and can invest a greater portion of their assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of Fund shares than would occur in a more diversified fund. ● Securities are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. ● Please read the prospectus for more detailed information regarding these and other risks.

2 | THE RYDEX FUNDS ANNUAL REPORT

March 31, 2016

The Strengthening Dollar 2x Strategy Fund is subject to a number of risks and may not be suitable for all investors. ● The Fund’s use of derivatives such as futures and swap agreements may expose the fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. ● The Fund’s 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. ● The more the Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. These risks may cause the Fund to experience higher losses and/or volatility than a Fund that does not invest in derivatives, use leverage or have exposure to foreign currencies. ● Also, the Fund is subject to active trading and tracking error risks that may increase volatility, decrease performance and impact the Fund’s ability to achieve its investment objective. This fund is considered non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of fund shares than would occur in a more diversified fund. ● For more on these and other risks, please read the prospectus.

The Weakening Dollar 2x Strategy Fund is subject to a number of risks and may not be suitable for all investors. ● The Fund’s use of derivatives such as futures and swap agreements may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. ● The Fund’s indirect 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. ● The more the Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. These risks may cause the Fund to experience higher losses and/or volatility than a fund that does not invest in derivatives, use leverage or have exposure to foreign currencies. ● Also, the Fund is subject to active trading and tracking error risks that may increase volatility, decrease performance and impact the Fund’s ability to achieve its investment objective. This Fund is considered non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of Fund shares than would occur in a more diversified fund. ● For more on these and other risks, please read the prospectus.

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited) March 31, 2016

Financial markets were buffeted by a variety of events over the past year, including volatility in the oil market, weak growth and a devaluation in China, ongoing stimulus from global central banks, and a delayed September rate hike by the U.S. Federal Reserve (the “Fed”)—and then capped by a 25-basis-point increase in the U.S. federal funds target rate in December. While the direct impact of the move was fairly insignificant, the decision to begin normalization of interest rates after seven years of unprecedented liquidity provision was not. Indeed, in 2015, risk assets posted their worst annual performance since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concern about plunging commodity prices, and slowing economic growth in China and other emerging market economies.

As 2016 began, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Estimates for first quarter gross domestic product (“GDP”) in the U.S. were marked down, even though first quarter GDP has undershot full-year growth rates in six out of the last seven years. Risk assets rallied in the last half of the first quarter, led by a dovish pivot in the Fed’s communication that spurred a rally in crude oil and a reversal of dollar strength. The weaker dollar, along with optimism about a production freeze agreed to by a group of major oil producing countries, helped oil to rebound. After falling in the early weeks of the year to a cycle low of $26 per barrel on February 11, 2016, the front-month West Texas Intermediate (“WTI”) oil futures contract rallied as high as $40 per barrel before closing the quarter at $38 per barrel.

The outlook for economic growth outside the U.S. softened in the first quarter. A further deterioration in the euro zone inflation outlook prompted the European Central Bank (“ECB”) to announce an increase in the size of its monthly asset purchases and reduce its deposit rate to -40 basis points. European government bonds rallied following the announcement, with the 10-year German bund ending the first quarter with a yield of just 16 basis points.

Ongoing stimulus efforts in Asia also appeared likely to contribute to low U.S. rates. Chinese industrial production growth continued to slow in early 2016, prompting the People’s Bank of China (“PBOC”) to stimulate credit growth by allowing banks to hold fewer reserves against deposits. And after years of struggling with stagnant growth and low inflation, the Bank of Japan (“BOJ”) surprised markets by cutting its key interest rate to -10 basis points in January. The negative rates pushed a considerable amount of Japanese savings into foreign markets.

In an environment where global rates are moving lower and markets are already starved for yield, foreign investors began looking to the U.S. Guggenheim expects that U.S. Treasury yields will fall further as the gravitational pull of global yields gets stronger, and does not discount the possibility of 10-year U.S. Treasury yields declining to closer to 1 percent before the end of the year.

A stronger dollar has weighed on the U.S. economy, but consumer spending has been resilient. The labor market is now operating near full employment, and tight labor market conditions are beginning to spur faster wage growth. We believe the U.S. economy is fundamentally sound, and find little evidence to support the conclusion that the economy will fall into a recession in 2016.

Despite the relative health of the U.S. economy, markets are concerned that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. Our view is that the Fed remains focused on fulfilling its dual mandate objectives of maximum employment and price stability, and thus is biased toward normalizing policy. We expect further declines in the unemployment rate as job gains outstrip growth in the labor force. Meanwhile, core and headline inflation should move closer to the Fed’s target by year end, reflecting our forecasts for a tighter labor market and a modest rise in oil prices. Normally, this would result in at least two Fed rate hikes on the table for 2016, but the U.S. Fed is becoming more sensitive to global financial conditions and the extent of global money flows that occur as monetary policy in the US diverges from Europe, Japan and China. As a result, we have reduced our expectations for a June rate hike, although it would normally be an easy call. We continue to believe a December rate hike is a near certainty. A solid macroeconomic backdrop and a rebalancing oil market should support an improving credit picture in the second half of 2016.

For the 12 months ended March 31, 2016, the Standard & Poor’s 500^® (“S&P 500”) Index* returned 1.78%. The Morgan Stanley Capital International (“MSCI”) Europe-Australasia-Far East (“EAFE”) Index* returned -8.27%. The return of the MSCI Emerging Markets Index* was -12.03%.

4 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2016

In the bond market, the Barclays U.S. Aggregate Bond Index* posted a 1.96% return for the period, while the Barclays U.S. Corporate High Yield Index* returned -3.69%. The return of the Bank of America Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.12% for the 12-month period.

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 (“BofA”) 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.

Barclays U.S. Corporate High Yield Index measures the market of U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

STOXX ^® Europe 50 Index provides a blue-chip representation of super-sector leaders in Europe. The index covers 50 stocks from developed European countries such as Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.

MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.

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.

Nikkei-225 Stock Average Index is a price-weighted index comprised of Japan’s top 225 blue-chip companies on the Tokyo Stock Exchange.

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.

S&P 500^® Pure Growth Index is narrow in focus, containing only those S&P 500 Index companies with strong growth characteristics as selected by S&P. The S&P 500 Index is a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues).

S&P 500^® Pure Value Index is narrow in focus, containing only those S&P 500 Index companies with strong value characteristics as selected by S&P. The S&P 500 Index is a capitalization-weighted index covering 500 industrial, utility, transportation, and financial companies of the U.S. markets (mostly NYSE Euronext issues).

S&P MidCap 400^® Pure Growth Index is narrow in focus, containing only those S&P MidCap 400 Index companies with strong growth characteristics as selected by S&P. The S&P MidCap 400 Index measures the performance of the mid-capitalization sector of the U.S. equity market.

S&P MidCap 400^® Pure Value Index is narrow in focus, containing only those S&P MidCap 400 Index companies with strong value characteristics as selected by S&P. The S&P MidCap 400 Index measures the performance of the mid-capitalization sector of the U.S. equity market.

S&P SmallCap 600^® Pure Growth Index is narrow in focus, containing only those S&P SmallCap 600 Index companies with strong growth characteristics as selected by S&P. The S&P SmallCap 600 Index measures the performance of the small-capitalization sector of the U.S. equity market.

S&P SmallCap 600^® Pure Value Index is narrow in focus, containing only those S&P SmallCap 600 Index companies with strong value characteristics as selected by S&P. The S&P SmallCap 600 Index measures the performance of the small-capitalization sector of the U.S. equity market.

The USD or U.S. Dollar Index^® (USDX) is an index that determines the relative value of the United States dollar to a basket of foreign currencies. This formulated “basket” of currencies comprises the weighting of six other currencies as follows: euro (EUR), 57.6% + Japanese yen (JPY), 13.6% + pound sterling (GBP), 11.9% + Canadian dollar (CAD), 9.1% + Swedish krona (SEK), 4.2% + Swiss franc (CHF) 3.6%.

THE RYDEX FUNDS ANNUAL REPORT | 5

A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited) March 31, 2016

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 Level	Index Performance	Fund Expectation	Fund NAV	Fund 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.

6 | THE RYDEX FUNDS 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 September 30, 2015 and ending March 31, 2016.

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 up to the past five years (subject to the Fund’s inception date), 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 ANNUAL REPORT | 7

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 1. Based on actual Fund return3
S&P 500® Pure Growth Fund
A-Class	1.52%	2.45%	$ 1,000.00	$ 1,024.50	$ 7.69
C-Class	2.27%	2.08%	1,000.00	1,020.80	11.47
H-Class	1.52%	2.45%	1,000.00	1,024.50	7.69
S&P 500® Pure Value Fund
A-Class	1.51%	6.23%	1,000.00	1,062.30	7.79
C-Class	2.27%	5.82%	1,000.00	1,058.20	11.68
H-Class	1.52%	6.22%	1,000.00	1,062.20	7.84
S&P MidCap 400® Pure Growth Fund
A-Class	1.52%	(2.32%)	1,000.00	976.80	7.51
C-Class	2.27%	(2.69%)	1,000.00	973.10	11.20
H-Class	1.52%	(2.32%)	1,000.00	976.80	7.51
S&P MidCap 400® Pure Value Fund
A-Class	1.51%	6.24%	1,000.00	1,062.40	7.79
C-Class	2.27%	5.83%	1,000.00	1,058.30	11.68
H-Class	1.52%	6.25%	1,000.00	1,062.50	7.84
S&P SmallCap 600® Pure Growth Fund
A-Class	1.52%	(2.37%)	1,000.00	976.30	7.51
C-Class	2.27%	(2.73%)	1,000.00	972.70	11.20
H-Class	1.52%	(2.37%)	1,000.00	976.30	7.51
S&P SmallCap 600® Pure Value Fund
A-Class	1.52%	6.97%	1,000.00	1,069.70	7.86
C-Class	2.27%	6.57%	1,000.00	1,065.70	11.72
H-Class	1.52%	7.00%	1,000.00	1,070.00	7.87
Europe 1.25x Strategy Fund
A-Class	1.68%	(5.76%)	1,000.00	942.40	8.16
C-Class	2.43%	(6.12%)	1,000.00	938.80	11.78
H-Class	1.68%	(5.81%)	1,000.00	941.90	8.16
Japan 2x Strategy Fund
A-Class	1.52%	1.03%	1,000.00	1,010.30	7.64
C-Class	2.26%	0.65%	1,000.00	1,006.50	11.34
H-Class	1.51%	1.12%	1,000.00	1,011.20	7.59
Strengthening Dollar 2x Strategy Fund
A-Class	1.71%	(4.91%)	1,000.00	950.90	8.34
C-Class	2.46%	(5.27%)	1,000.00	947.30	11.98
H-Class	1.71%	(4.89%)	1,000.00	951.10	8.34
Weakening Dollar 2x Strategy Fund
A-Class	1.71%	2.53%	1,000.00	1,025.30	8.66
C-Class	2.46%	2.14%	1,000.00	1,021.40	12.43
H-Class	1.71%	2.62%	1,000.00	1,026.20	8.66

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
S&P 500® Pure Growth Fund
A-Class	1.52%	5.00%	$ 1,000.00	$ 1,017.40	$ 7.67
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
S&P 500® Pure Value Fund
A-Class	1.51%	5.00%	1,000.00	1,017.45	7.62
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
S&P MidCap 400® Pure Growth Fund
A-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
S&P MidCap 400® Pure Value Fund
A-Class	1.51%	5.00%	1,000.00	1,017.45	7.62
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
S&P SmallCap 600® Pure Growth Fund
A-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
S&P SmallCap 600® Pure Value Fund
A-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
Europe 1.25x Strategy Fund
A-Class	1.68%	5.00%	1,000.00	1,016.60	8.47
C-Class	2.43%	5.00%	1,000.00	1,012.85	12.23
H-Class	1.68%	5.00%	1,000.00	1,016.60	8.47
Japan 2x Strategy Fund
A-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
C-Class	2.26%	5.00%	1,000.00	1,013.70	11.38
H-Class	1.51%	5.00%	1,000.00	1,017.45	7.62
Strengthening Dollar 2x Strategy Fund
A-Class	1.71%	5.00%	1,000.00	1,016.45	8.62
C-Class	2.46%	5.00%	1,000.00	1,012.70	12.38
H-Class	1.71%	5.00%	1,000.00	1,016.45	8.62
Weakening Dollar 2x Strategy Fund
A-Class	1.71%	5.00%	1,000.00	1,016.45	8.62
C-Class	2.46%	5.00%	1,000.00	1,012.70	12.38
H-Class	1.71%	5.00%	1,000.00	1,016.45	8.62

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 183/366 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2015 to March 31, 2016.

THE RYDEX FUNDS ANNUAL REPORT | 9

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, S&P 500^® Pure Growth Fund H-Class returned -4.91%, compared with a gain of -3.27% for the S&P 500 Pure Growth Index. The Fund maintained a daily correlation of over 99% to its benchmark.

Consumer Staples was the sector contributing the most to the performance of the underlying index, followed by Materials. Health Care was the sector that detracted the most from the performance of the underlying index, followed by Energy.

Stocks that contributed the most to the return of the underlying index were Facebook, Inc. – Class A, VeriSign, Inc., and Constellation Brands, Inc. – Class A. Micron Technology, Inc., Range Resources Corp., and Biogen, Inc. were the largest detractors from performance of the underlying index.

Performance displayed represents past performance, which is no guarantee of future results.

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)
Facebook, Inc. — Class A	2.0%
Centene Corp.	1.9%
Constellation Brands, Inc. — Class A	1.8%
Broadcom Ltd.	1.8%
Electronic Arts, Inc.	1.6%
salesforce.com, Inc.	1.5%
VeriSign, Inc.	1.4%
O’Reilly Automotive, Inc.	1.4%
Amazon.com, Inc.	1.4%
Skyworks Solutions, Inc.	1.4%
Top Ten Total	16.2%
“Ten Largest Holdings” excludes any temporary cash investments.

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-4.90%	10.65%	7.88%
A-Class Shares with sales charge†	-9.43%	9.58%	7.36%
C-Class Shares	-5.61%	9.83%	7.06%
C-Class Shares with CDSC‡	-6.53%	9.83%	7.06%
H-Class Shares	-4.91%	10.66%	7.88%
S&P 500 Pure Growth Index	-3.27%	12.51%	9.72%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Pure Growth Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 11

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P 500® PURE GROWTH FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Consumer, Non-cyclical - 25.9%
Centene Corp.*		47,600	$	2,930,733
Constellation Brands, Inc. — Class A		18,905		2,856,356
Aetna, Inc.		15,900		1,786,365
Gilead Sciences, Inc.		18,963		1,741,940
Cigna Corp.		12,300		1,688,052
Hologic, Inc.*		47,900		1,652,550
Total System Services, Inc.		34,607		1,646,601
McGraw Hill Financial, Inc.		15,790		1,562,894
Regeneron Pharmaceuticals, Inc.*		4,318		1,556,380
Mondelez International, Inc. — Class A		38,773		1,555,573
Equifax, Inc.		13,000		1,485,770
Edwards Lifesciences Corp.*		16,520		1,457,229
AmerisourceBergen Corp. — Class A		16,170		1,399,514
Reynolds American, Inc.		27,182		1,367,526
Boston Scientific Corp.*		67,737		1,274,133
Avery Dennison Corp.		17,497		1,261,709
Hormel Foods Corp.		28,688		1,240,469
Monster Beverage Corp.*		9,196		1,226,562
Biogen, Inc.*		4,694		1,221,942
Celgene Corp.*		11,656		1,166,649
Verisk Analytics, Inc. — Class A*		13,890		1,110,089
Illumina, Inc.*		6,351		1,029,561
Laboratory Corporation of America Holdings*		8,150		954,610
Alexion Pharmaceuticals, Inc.*		6,745		939,039
Cintas Corp.		9,530		855,889
Moody’s Corp.		8,803		850,018
CR Bard, Inc.		3,530		715,425
Becton Dickinson and Co.		4,100		622,462
Dr Pepper Snapple Group, Inc.		6,800		608,056
Allergan plc*		2,032		544,637
Total Consumer, Non-cyclical				40,308,733
Technology - 18.7%
Broadcom Ltd.		17,865		2,760,143
Electronic Arts, Inc.*		37,587		2,484,876
salesforce.com, Inc.*		30,450		2,248,123
Skyworks Solutions, Inc.		27,012		2,104,235
Activision Blizzard, Inc.		61,852		2,093,072
Cognizant Technology Solutions Corp. — Class A*		28,266		1,772,278
NVIDIA Corp.		48,683		1,734,575
Red Hat, Inc.*		22,389		1,668,204
Lam Research Corp.		19,142		1,581,130
Fiserv, Inc.*		15,186		1,557,780
Citrix Systems, Inc.*		15,808		1,242,193
Apple, Inc.		10,285		1,120,962
Applied Materials, Inc.		47,780		1,011,980
Microchip Technology, Inc.		20,591		992,486
Qorvo, Inc.*		19,344		975,131
Akamai Technologies, Inc.*		15,073		837,607
Cerner Corp.*		13,898		736,038
Accenture plc — Class A		6,100		703,940
Microsoft Corp.		12,400		684,852
Paychex, Inc.		11,579		625,382
Total Technology				28,934,987
Consumer, Cyclical - 17.7%
O’Reilly Automotive, Inc.*		8,001		2,189,553
DR Horton, Inc.		67,500		2,040,525
Under Armour, Inc. — Class A*		23,690		2,009,623
Starbucks Corp.		30,700		1,832,790
Dollar Tree, Inc.*		21,870		1,803,400
AutoZone, Inc.*		2,150		1,712,883
Lennar Corp. — Class A		34,645		1,675,432
Home Depot, Inc.		11,550		1,541,116
Signet Jewelers Ltd.		11,100		1,376,733
Advance Auto Parts, Inc.		8,275		1,326,814
NIKE, Inc. — Class B		21,300		1,309,311
Lowe’s Companies, Inc.		16,050		1,215,788
Mohawk Industries, Inc.*		5,700		1,088,130
Tractor Supply Co.		11,500		1,040,290
Southwest Airlines Co.		21,642		969,562
Ross Stores, Inc.		16,350		946,665
Chipotle Mexican Grill, Inc. — Class A*		1,810		852,456
TJX Companies, Inc.		8,500		665,975
Delphi Automotive plc		8,100		607,662
Hanesbrands, Inc.		20,700		586,638
Newell Rubbermaid, Inc.		13,080		579,313
Total Consumer, Cyclical				27,370,659
Communications - 14.0%
Facebook, Inc. — Class A*		27,017		3,082,639
VeriSign, Inc.*		25,105		2,222,797
Amazon.com, Inc.*		3,600		2,137,104
Expedia, Inc.		19,189		2,068,958
Netflix, Inc.*		18,549		1,896,264
TripAdvisor, Inc.*		21,930		1,458,345
Priceline Group, Inc.*		1,131		1,457,814
eBay, Inc.*		44,958		1,072,698
Time Warner Cable, Inc.		4,700		961,714
Cablevision Systems Corp. — Class A		28,600		943,800
Alphabet, Inc. — Class A*		1,202		917,006
Walt Disney Co.		9,000		893,790
Alphabet, Inc. — Class C*		1,187		884,256
Juniper Networks, Inc.		31,446		802,187
Discovery Communications, Inc. — Class C*		18,400		496,800
Discovery Communications, Inc. — Class A*		10,670		305,482
Total Communications				21,601,654
Financial - 13.6%
XL Group plc — Class A		55,200		2,031,360
Extra Space Storage, Inc.		20,900		1,953,314
Equity Residential		22,405		1,681,048
Visa, Inc. — Class A		18,482		1,413,503
Public Storage		4,600		1,268,818

12 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P 500® PURE GROWTH FUND

	Shares		Value
Prologis, Inc.		28,436	$	1,256,302
Intercontinental Exchange, Inc.		5,140		1,208,620
Kimco Realty Corp.		40,647		1,169,821
CBRE Group, Inc. — Class A*		39,827		1,147,814
Equinix, Inc.		3,276		1,083,406
MasterCard, Inc. — Class A		11,096		1,048,572
UDR, Inc.		26,721		1,029,560
E*TRADE Financial Corp.*		41,004		1,004,188
AvalonBay Communities, Inc.		4,871		926,464
American Tower Corp. — Class A		7,894		808,109
Crown Castle International Corp.		8,900		769,850
Charles Schwab Corp.		26,514		742,922
Alliance Data Systems Corp.*		2,232		491,040
Total Financial				21,034,711
Industrial - 7.3%
PerkinElmer, Inc.		36,571		1,808,802
Vulcan Materials Co.		16,197		1,709,916
Masco Corp.		52,600		1,654,270
Martin Marietta Materials, Inc.		8,060		1,285,651
Northrop Grumman Corp.		5,800		1,147,820
Stanley Black & Decker, Inc.		8,000		841,680
Snap-on, Inc.		4,940		775,531
Amphenol Corp. — Class A		13,400		774,788
Roper Technologies, Inc.		3,900		712,803
Boeing Co.		4,400		558,536
Total Industrial				11,269,797
Energy - 1.8%
Cameron International Corp.*		24,840		1,665,522
Pioneer Natural Resources Co.		8,000		1,125,920
Total Energy				2,791,442
Basic Materials - 0.5%
Sherwin-Williams Co.		2,850		811,310
Total Common Stocks
(Cost $128,358,002)				154,123,293

	Face Amount
REPURCHASE AGREEMENTS††,1 - 0.6%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	672,661		672,661
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		228,734		228,734
Total Repurchase Agreements
(Cost $901,395)				901,395
Total Investments - 100.1%
(Cost $129,259,397)			$	155,024,688
Other Assets & Liabilities, net - (0.1)%				(219,654	)
Total Net Assets - 100.0%			$	154,805,034

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	154,123,293	$	—	$	—	$	154,123,293
Repurchase Agreements		—		901,395		—		901,395
Total	$	154,123,293	$	901,395	$	—	$	155,024,688

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 13

S&P 500^® PURE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $128,358,002)	$	154,123,293
Repurchase agreements, at value (cost $901,395)		901,395
Total investments (cost $129,259,397)		155,024,688
Cash		22,094
Receivables:
Securities sold		12,265,295
Fund shares sold		2,257,768
Dividends		78,614
Interest		6
Total assets		169,648,465
Liabilities:
Payable for:
Fund shares redeemed		14,590,103
Management fees		100,121
Distribution and service fees		44,283
Transfer agent and administrative fees		33,374
Portfolio accounting fees		13,349
Miscellaneous		62,201
Total liabilities		14,843,431
Commitments and contingent liabilities (Note 12)		—
Net assets	$	154,805,034
Net assets consist of:
Paid in capital	$	141,365,135
Accumulated net investment loss		(50,197	)
Accumulated net realized loss on investments		(12,275,195	)
Net unrealized appreciation on investments		25,765,291
Net assets	$	154,805,034
A-Class:
Net assets	$	24,036,794
Capital shares outstanding		464,566
Net asset value per share	$	51.74
Maximum offering price per share (Net asset value divided by 95.25%)	$	54.32
C-Class:
Net assets	$	17,545,576
Capital shares outstanding		373,407
Net asset value per share	$	46.99
H-Class:
Net assets	$	113,222,664
Capital shares outstanding		2,188,664
Net asset value per share	$	51.73

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $193)	$	1,817,813
Interest		787
Total investment income		1,818,600
Expenses:
Management fees		1,200,896
Transfer agent and administrative fees		400,299
Distribution and service fees:
A-Class		73,576
C-Class		216,438
H-Class		272,613
Portfolio accounting fees		160,118
Custodian fees		18,595
Trustees’ fees*		11,246
Line of credit fees		1,462
Miscellaneous		210,842
Total expenses		2,566,085
Net investment loss		(747,485	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(5,914,175	)
Net realized loss		(5,914,175	)
Net change in unrealized appreciation (depreciation) on:
Investments		(4,755,558	)
Net change in unrealized appreciation (depreciation)		(4,755,558	)
Net realized and unrealized loss		(10,669,733	)
Net decrease in net assets resulting from operations	$	(11,417,218	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

14 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P 500^® PURE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(747,485	)	$	(1,197,722	)
Net realized gain (loss) on investments		(5,914,175	)		10,011,328
Net change in unrealized appreciation (depreciation) on investments		(4,755,558	)		4,587,390
Net increase (decrease) in net assets resulting from operations		(11,417,218	)		13,400,996
Distributions to shareholders from:
Net realized gains
A-Class		(857,343	)		(602,725	)
C-Class		(687,448	)		(628,949	)
H-Class		(3,476,889	)		(3,232,222	)
Total distributions to shareholders		(5,021,680	)		(4,463,896	)
Capital share transactions:
Proceeds from sale of shares
A-Class		57,800,935			37,179,898
C-Class		7,117,304			14,859,172
H-Class		424,273,419			422,548,514
Distributions reinvested
A-Class		847,945			569,662
C-Class		679,901			609,646
H-Class		3,448,540			3,196,101
Cost of shares redeemed
A-Class		(56,458,547	)		(34,342,245	)
C-Class		(10,768,882	)		(11,449,505	)
H-Class		(408,794,397	)		(429,533,249	)
Net increase from capital share transactions		18,146,218			3,637,994
Net increase in net assets		1,707,320			12,575,094
Net assets:
Beginning of year		153,097,714			140,522,620
End of year	$	154,805,034		$	153,097,714
Accumulated net investment loss at end of year	$	(50,197	)	$	(363,241	)
Capital share activity:
Shares sold
A-Class		1,065,419			703,638
C-Class		144,257			302,375
H-Class		8,047,777			7,902,853
Shares issued from reinvestment of distributions
A-Class		15,838			10,626
C-Class		13,944			12,364
H-Class		64,423			59,629
Shares redeemed
A-Class		(1,078,093	)		(646,079	)
C-Class		(227,917	)		(233,689	)
H-Class		(7,797,307	)		(8,126,262	)
Net increase (decrease) in shares		248,341			(14,545	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 15

S&P 500^® 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	55.85		$	50.81		$	38.86		$	34.54		$	33.15
Income (loss) from investment operations:
Net investment income (loss)a		(.22	)		(.33	)		(.23	)		(.13	)		(.20	)
Net gain (loss) on investments (realized and unrealized)		(2.47	)		6.86			12.18			4.45			1.82
Total from investment operations		(2.69	)		6.53			11.95			4.32			1.62
Less distributions from:
Net realized gains		(1.42	)		(1.49	)		—			—			(.23	)
Total distributions		(1.42	)		(1.49	)		—			—			(.23	)
Net asset value, end of period	$	51.74		$	55.85		$	50.81		$	38.86		$	34.54
Total Returnb		(4.90	%)		12.98	%		30.75	%		12.51	%		4.96	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	24,037		$	25,768		$	19,978		$	15,001		$	2,846
Ratios to average net assets:
Net investment income (loss)		(0.41	%)		(0.62	%)		(0.51	%)		(0.38	%)		(0.62	%)
Total expenses		1.50	%		1.50	%		1.52	%		1.51	%		1.52	%
Portfolio turnover rate		290	%		274	%		594	%		421	%		586	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	51.23		$	47.07		$	36.27		$	32.48		$	31.42
Income (loss) from investment operations:
Net investment income (loss)a		(.57	)		(.67	)		(.52	)		(.38	)		(.41	)
Net gain (loss) on investments (realized and unrealized)		(2.25	)		6.32			11.32			4.17			1.70
Total from investment operations		(2.82	)		5.65			10.80			3.79			1.29
Less distributions from:
Net realized gains		(1.42	)		(1.49	)		—			—			(.23	)
Total distributions		(1.42	)		(1.49	)		—			—			(.23	)
Net asset value, end of period	$	46.99		$	51.23		$	47.07		$	36.27		$	32.48
Total Returnb		(5.61	%)		12.13	%		29.78	%		11.70	%		4.15	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	17,546		$	22,701		$	17,042		$	8,692		$	11,623
Ratios to average net assets:
Net investment income (loss)		(1.16	%)		(1.37	%)		(1.24	%)		(1.19	%)		(1.35	%)
Total expenses		2.25	%		2.25	%		2.27	%		2.25	%		2.26	%
Portfolio turnover rate		290	%		274	%		594	%		421	%		586	%

16 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	55.84		$	50.80		$	38.84		$	34.52		$	33.13
Income (loss) from investment operations:
Net investment income (loss)a		(.18	)		(.34	)		(.23	)		(.15	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		(2.51	)		6.87			12.19			4.47			1.81
Total from investment operations		(2.69	)		6.53			11.96			4.32			1.62
Less distributions from:
Net realized gains		(1.42	)		(1.49	)		—			—			(.23	)
Total distributions		(1.42	)		(1.49	)		—			—			(.23	)
Net asset value, end of period	$	51.73		$	55.84		$	50.80		$	38.84		$	34.52
Total Returnb		(4.91	%)		12.98	%		30.79	%		12.51	%		4.96	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	113,223		$	104,628		$	103,502		$	52,483		$	36,627
Ratios to average net assets:
Net investment income (loss)		(0.35	%)		(0.65	%)		(0.50	%)		(0.43	%)		(0.59	%)
Total expenses		1.51	%		1.50	%		1.52	%		1.50	%		1.51	%
Portfolio turnover rate		290	%		274	%		594	%		421	%		586	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 17

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, S&P 500^® Pure Value Fund H-Class returned -5.44%, compared with a gain of -3.88% for the S&P 500 Pure Value Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The Utilities sector was the leading contributor to the performance of the underlying index, followed by the Consumer Staples sector. Energy was the largest detractor from performance, followed by the Financials sector.

The strongest contributors to performance of the underlying index for the year included Tyson Foods, Inc. – Class A, Newmont Mining Corp., and Assurant, Inc. The stocks that detracted most from performance of the underlying index were Chesapeake Energy Corp., Marathon Oil Corp., and Devon Energy Corp.

Performance displayed represents past performance, which is no guarantee of future results.

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)
NRG Energy, Inc.	2.5%
HP, Inc.	2.4%
Archer-Daniels-Midland Co.	1.9%
Exelon Corp.	1.8%
Alcoa, Inc.	1.8%
Newmont Mining Corp.	1.6%
Staples, Inc.	1.6%
Fluor Corp.	1.6%
AES Corp.	1.6%
Leucadia National Corp.	1.5%
Top Ten Total	18.3%
“Ten Largest Holdings” excludes any temporary cash investments.

18 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-5.44%	10.36%	5.41%
A-Class Shares with sales charge†	-9.93%	9.29%	4.90%
C-Class Shares	-6.15%	9.54%	4.65%
C-Class Shares with CDSC‡	-7.05%	9.54%	4.65%
H-Class Shares	-5.44%	10.36%	5.44%
S&P 500 Pure Value Index	-3.88%	12.65%	8.04%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P 500 Pure Value Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 19

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P 500® PURE VALUE FUND

	Shares		Value
COMMON STOCKS† - 99.4%
Financial - 23.5%
MetLife, Inc.		27,060	$	1,189,017
Prudential Financial, Inc.		16,323		1,178,847
Loews Corp.		29,295		1,120,827
Allstate Corp.		14,510		977,538
Hartford Financial Services Group, Inc.		20,862		961,321
American International Group, Inc.		15,858		857,125
Capital One Financial Corp.		11,547		800,323
Unum Group		25,698		794,582
Lincoln National Corp.		20,186		791,291
Bank of America Corp.		55,469		749,941
Citigroup, Inc.		17,767		741,772
Regions Financial Corp.		93,400		733,189
Navient Corp.		56,620		677,741
SunTrust Banks, Inc.		16,447		593,408
Zions Bancorporation		23,512		569,226
Travelers Companies, Inc.		4,839		564,760
KeyCorp		51,013		563,184
Legg Mason, Inc.		16,140		559,736
Berkshire Hathaway, Inc. — Class B*		3,804		539,712
Goldman Sachs Group, Inc.		3,432		538,755
JPMorgan Chase & Co.		9,047		535,763
Chubb Ltd.		4,467		532,243
Comerica, Inc.		13,323		504,542
People’s United Financial, Inc.		30,293		482,567
Fifth Third Bancorp		28,747		479,787
Aflac, Inc.		7,519		474,750
PNC Financial Services Group, Inc.		5,432		459,384
Principal Financial Group, Inc.		10,731		423,338
BB&T Corp.		12,291		408,922
Bank of New York Mellon Corp.		7,545		277,882
Total Financial				20,081,473
Consumer, Cyclical - 17.6%
Staples, Inc.		124,127		1,369,121
Wal-Mart Stores, Inc.		17,943		1,228,916
Best Buy Company, Inc.		37,874		1,228,633
General Motors Co.		36,175		1,136,980
GameStop Corp. — Class A		35,362		1,122,036
Ford Motor Co.		81,761		1,103,774
Kohl’s Corp.		22,197		1,034,602
Macy’s, Inc.		19,770		871,659
United Continental Holdings, Inc.*		12,451		745,317
AutoNation, Inc.*		15,880		741,278
PVH Corp.		6,920		685,495
Urban Outfitters, Inc.*		20,690		684,632
Whirlpool Corp.		3,698		666,897
PulteGroup, Inc.		28,960		541,842
Target Corp.		6,189		509,231
PACCAR, Inc.		7,740		423,301
The Gap, Inc.		13,990		411,306
Bed Bath & Beyond, Inc.*		6,460		320,674
Johnson Controls, Inc.		7,207		280,857
Total Consumer, Cyclical				15,106,551
Utilities - 15.2%
NRG Energy, Inc.		165,849		2,157,695
Exelon Corp.		42,696		1,531,079
AES Corp.		113,217		1,335,961
FirstEnergy Corp.		26,593		956,550
NiSource, Inc.		30,019		707,248
Duke Energy Corp.		7,519		606,633
Consolidated Edison, Inc.		7,743		593,269
Entergy Corp.		6,724		533,079
Public Service Enterprise Group, Inc.		10,928		515,146
SCANA Corp.		6,773		475,126
DTE Energy Co.		5,156		467,443
American Electric Power Company, Inc.		6,915		459,156
Edison International		6,353		456,717
Ameren Corp.		8,284		415,028
CenterPoint Energy, Inc.		18,901		395,409
Pinnacle West Capital Corp.		5,170		388,112
PG&E Corp.		5,984		357,364
Eversource Energy		5,948		347,006
Xcel Energy, Inc.		8,267		345,726
Total Utilities				13,043,747
Energy - 10.3%
Valero Energy Corp.		18,966		1,216,480
National Oilwell Varco, Inc.		37,898		1,178,628
Diamond Offshore Drilling, Inc.		46,625		1,013,162
First Solar, Inc.*		13,105		897,299
Phillips 66		9,933		860,098
Chevron Corp.		8,078		770,640
Marathon Petroleum Corp.		17,174		638,529
Transocean Ltd.		65,067		594,712
Helmerich & Payne, Inc.		9,432		553,847
Hess Corp.		9,670		509,126
Marathon Oil Corp.		27,012		300,914
Baker Hughes, Inc.		6,472		283,668
Total Energy				8,817,103
Consumer, Non-cyclical - 10.0%
Archer-Daniels-Midland Co.		44,790		1,626,324
Anthem, Inc.		9,147		1,271,342
Quanta Services, Inc.*		52,780		1,190,717
Tyson Foods, Inc. — Class A		15,848		1,056,428
Cardinal Health, Inc.		9,773		800,897
McKesson Corp.		4,470		702,908
Tenet Healthcare Corp.*		23,900		691,427
Sysco Corp.		10,481		489,777
Whole Foods Market, Inc.		14,190		441,451
Express Scripts Holding Co.*		4,780		328,338
Total Consumer, Non-cyclical				8,599,609

20 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P 500® PURE VALUE FUND

	Shares		Value
Industrial - 8.1%
Fluor Corp.		25,161	$	1,351,145
Jacobs Engineering Group, Inc.*		28,653		1,247,838
Ryder System, Inc.		15,091		977,595
WestRock Co.		20,090		784,113
Corning, Inc.		28,220		589,516
Cummins, Inc.		4,610		506,824
Eaton Corporation plc		7,810		488,594
Caterpillar, Inc.		5,280		404,131
Textron, Inc.		8,290		302,253
Owens-Illinois, Inc.*		16,903		269,772
Total Industrial				6,921,781
Basic Materials - 5.7%
Alcoa, Inc.		156,794		1,502,087
Newmont Mining Corp.		52,818		1,403,902
Nucor Corp.		14,980		708,554
Mosaic Co.		24,340		657,180
Freeport-McMoRan, Inc.		57,633		595,925
Total Basic Materials				4,867,648
Technology - 4.2%
HP, Inc.		165,165		2,034,832
Xerox Corp.		100,097		1,117,083
Western Digital Corp.		9,440		445,946
Total Technology				3,597,861
Communications - 3.3%
CenturyLink, Inc.		35,173		1,124,129
Frontier Communications Corp.		141,105		788,777
News Corp. — Class A		53,616		684,676
News Corp. — Class B		15,100		200,075
Total Communications				2,797,657
Diversified - 1.5%
Leucadia National Corp.		81,803		1,322,755
Total Common Stocks
(Cost $70,019,458)				85,156,185

	Face Amount
REPURCHASE AGREEMENTS††,1 - 1.1%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	730,223		730,223
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		248,307		248,307
Total Repurchase Agreements
(Cost $978,530)				978,530
Total Investments - 100.5%
(Cost $70,997,988)			$	86,134,715
Other Assets & Liabilities, net - (0.5)%				(466,983	)
Total Net Assets - 100.0%			$	85,667,732

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	85,156,185	$	—	$	—	$	85,156,185
Repurchase Agreements		—		978,530		—		978,530
Total	$	85,156,185	$	978,530	$	—	$	86,134,715

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 21

S&P 500^® PURE VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $70,019,458)	$	85,156,185
Repurchase agreements, at value (cost $978,530)		978,530
Total investments (cost $70,997,988)		86,134,715
Receivables:
Securities sold		12,965,086
Dividends		187,257
Fund shares sold		163,770
Interest		6
Total assets		99,450,834
Liabilities:
Payable for:
Fund shares redeemed		13,630,968
Management fees		60,953
Distribution and service fees		22,498
Transfer agent and administrative fees		20,318
Portfolio accounting fees		8,127
Miscellaneous		40,238
Total liabilities		13,783,102
Commitments and contingent liabilities (Note 12)		—
Net assets	$	85,667,732
Net assets consist of:
Paid in capital	$	82,145,203
Undistributed net investment income		792,718
Accumulated net realized loss on investments		(12,406,916	)
Net unrealized appreciation on investments		15,136,727
Net assets	$	85,667,732
A-Class:
Net assets	$	11,135,094
Capital shares outstanding		84,318
Net asset value per share	$	132.06
Maximum offering price per share (Net asset value divided by 95.25%)	$	138.65
C-Class:
Net assets	$	3,549,596
Capital shares outstanding		30,333
Net asset value per share	$	117.02
H-Class:
Net assets	$	70,983,042
Capital shares outstanding		535,507
Net asset value per share	$	132.55

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	1,890,679
Income from securities lending, net		34,600
Interest		298
Total investment income		1,925,577
Expenses:
Management fees		546,694
Transfer agent and administrative fees		182,232
Distribution and service fees:
A-Class		38,439
C-Class		51,741
H-Class		130,857
Portfolio accounting fees		72,892
Registration fees		62,065
Custodian fees		8,469
Trustees’ fees*		5,666
Line of credit fees		239
Miscellaneous		33,565
Total expenses		1,132,859
Net investment income		792,718
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(2,973,025	)
Securities sold short		(2,836	)
Net realized loss		(2,975,861	)
Net change in unrealized appreciation (depreciation) on:
Investments		540,213
Net change in unrealized appreciation (depreciation)		540,213
Net realized and unrealized loss		(2,435,648	)
Net decrease in net assets resulting from operations	$	(1,642,930	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

22 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P 500^® PURE VALUE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	792,718		$	1,084,891
Net realized gain (loss) on investments		(2,975,861	)		5,872,408
Net change in unrealized appreciation (depreciation) on investments		540,213			(1,346,174	)
Net increase (decrease) in net assets resulting from operations		(1,642,930	)		5,611,125
Distributions to shareholders from:
Net investment income
A-Class		(230,654	)		(27,416	)
C-Class		(81,084	)		(8,632	)
H-Class		(773,153	)		(94,796	)
Net realized gains
A-Class		(381,595	)		(814,700	)
C-Class		(134,145	)		(256,525	)
H-Class		(1,279,106	)		(2,817,022	)
Total distributions to shareholders		(2,879,737	)		(4,019,091	)
Capital share transactions:
Proceeds from sale of shares
A-Class		21,610,017			63,590,141
C-Class		5,196,156			9,712,015
H-Class		283,243,022			502,106,517
Distributions reinvested
A-Class		607,532			826,012
C-Class		214,297			260,348
H-Class		2,039,461			2,878,464
Cost of shares redeemed
A-Class		(25,025,972	)		(52,604,015	)
C-Class		(7,319,303	)		(8,669,041	)
H-Class		(261,907,569	)		(572,669,115	)
Net increase (decrease) from capital share transactions		18,657,641			(54,568,674	)
Net increase (decrease) in net assets		14,134,974			(52,976,640	)
Net assets:
Beginning of year		71,532,758			124,509,398
End of year	$	85,667,732		$	71,532,758
Undistributed net investment income at end of year	$	792,718		$	1,084,891
Capital share activity:
Shares sold
A-Class		162,628			439,661
C-Class		41,410			73,971
H-Class		2,130,187			3,448,759
Shares issued from reinvestment of distributions
A-Class		4,542			5,624
C-Class		1,803			1,971
H-Class		15,192			19,528
Shares redeemed
A-Class		(194,662	)		(364,842	)
C-Class		(61,980	)		(66,550	)
H-Class		(1,945,823	)		(3,942,732	)
Net increase (decrease) in shares		153,297			(384,610	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 23

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	145.09		$	141.39		$	111.68		$	93.49		$	90.21
Income (loss) from investment operations:
Net investment income (loss)a		1.46			1.14			.61			.58			.30
Net gain (loss) on investments (realized and unrealized)		(9.28	)		6.83			35.01			17.75			2.98
Total from investment operations		(7.82	)		7.97			35.62			18.33			3.28
Less distributions from:
Net investment income		(1.96	)		(.14	)		(.23	)		(.14	)		—
Net realized gains		(3.25	)		(4.13	)		(5.68	)		—			—
Total distributions		(5.21	)		(4.27	)		(5.91	)		(.14	)		—
Net asset value, end of period	$	132.06		$	145.09		$	141.39		$	111.68		$	93.49
Total Returnb		(5.44	%)		5.60	%		32.21	%		19.63	%		3.64	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,135		$	16,222		$	4,435		$	1,303		$	1,846
Ratios to average net assets:
Net investment income (loss)		1.08	%		0.78	%		0.47	%		0.61	%		0.34	%
Total expenses		1.50	%		1.51	%		1.52	%		1.51	%		1.51	%
Portfolio turnover rate		365	%		295	%		410	%		669	%		762	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	130.15		$	128.19		$	102.46		$	86.42		$	83.99
Income (loss) from investment operations:
Net investment income (loss)a		.34			.04			(.30	)		(.19	)		(.36	)
Net gain (loss) on investments (realized and unrealized)		(8.26	)		6.19			31.94			16.37			2.79
Total from investment operations		(7.92	)		6.23			31.64			16.18			2.43
Less distributions from:
Net investment income		(1.96	)		(.14	)		(.23	)		(.14	)		—
Net realized gains		(3.25	)		(4.13	)		(5.68	)		—			—
Total distributions		(5.21	)		(4.27	)		(5.91	)		(.14	)		—
Net asset value, end of period	$	117.02		$	130.15		$	128.19		$	102.46		$	86.42
Total Returnb		(6.15	%)		4.81	%		31.21	%		18.76	%		2.88	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,550		$	6,390		$	5,090		$	3,430		$	2,128
Ratios to average net assets:
Net investment income (loss)		0.28	%		0.03	%		(0.26	%)		(0.22	%)		(0.45	%)
Total expenses		2.25	%		2.25	%		2.27	%		2.26	%		2.27	%
Portfolio turnover rate		365	%		295	%		410	%		669	%		762	%

24 | THE RYDEX FUNDS 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	145.62		$	141.89		$	112.06		$	93.80		$	90.50
Income (loss) from investment operations:
Net investment income (loss)a		1.60			.97			.51			.57			.33
Net gain (loss) on investments (realized and unrealized)		(9.46	)		7.03			35.23			17.83			2.97
Total from investment operations		(7.86	)		8.00			35.74			18.40			3.30
Less distributions from:
Net investment income		(1.96	)		(.14	)		(.23	)		(.14	)		—
Net realized gains		(3.25	)		(4.13	)		(5.68	)		—			—
Total distributions		(5.21	)		(4.27	)		(5.91	)		(.14	)		—
Net asset value, end of period	$	132.55		$	145.62		$	141.89		$	112.06		$	93.80
Total Returnb		(5.44	%)		5.60	%		32.21	%		19.64	%		3.65	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	70,983		$	48,920		$	114,984		$	78,480		$	68,886
Ratios to average net assets:
Net investment income (loss)		1.17	%		0.66	%		0.40	%		0.58	%		0.38	%
Total expenses		1.50	%		1.51	%		1.52	%		1.52	%		1.51	%
Portfolio turnover rate		365	%		295	%		410	%		669	%		762	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 25

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, S&P MidCap 400^® Pure Growth Fund H-Class returned -9.22%, compared with a gain of -7.93% for the S&P MidCap 400 Pure Growth Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The Energy and Utilities sectors contributed the most to the performance of the underlying index for the period. The Health Care sector detracted the most from return, followed by the Financials sector.

Global Payments, Inc., Extra Space Storage, Inc., and NVR, Inc. added the most to the performance of the underlying index for the period. WisdomTree Investments, Inc., Akorn, Inc., and Trinity Industries, Inc. detracted the most from the performance of the underlying index for the period.

Performance displayed represents past performance, which is no guarantee of future results.

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)
Skechers U.S.A., Inc. — Class A	2.7%
Convergys Corp.	2.5%
ABIOMED, Inc.	2.3%
Alexander & Baldwin, Inc.	2.2%
Synaptics, Inc.	2.1%
WisdomTree Investments, Inc.	2.0%
NVR, Inc.	1.9%
Post Holdings, Inc.	1.9%
Sprouts Farmers Market, Inc.	1.9%
Vista Outdoor, Inc.	1.9%
Top Ten Total	21.4%
“Ten Largest Holdings” excludes any temporary cash investments.

26 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-9.23%	6.66%	7.72%
A-Class Shares with sales charge†	-13.55%	5.62%	7.20%
C-Class Shares	-9.92%	5.86%	6.92%
C-Class Shares with CDSC‡	-10.77%	5.86%	6.92%
H-Class Shares	-9.22%	6.65%	7.73%
S&P MidCap 400 Pure Growth Index	-7.93%	7.90%	9.43%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P MidCap 400 Pure Growth Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 27

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P MIDCAP 400® PURE GROWTH FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Technology - 24.6%
Convergys Corp.		128,100	$	3,557,337
Synaptics, Inc.*		38,059		3,034,825
Ultimate Software Group, Inc.*		12,986		2,512,792
ACI Worldwide, Inc.*		117,850		2,450,102
j2 Global, Inc.		36,600		2,253,828
Fortinet, Inc.*		66,175		2,026,940
IPG Photonics Corp.*		19,600		1,883,168
Manhattan Associates, Inc.*		32,700		1,859,649
MAXIMUS, Inc.		35,250		1,855,560
Integrated Device Technology, Inc.*		90,442		1,848,634
Fair Isaac Corp.		17,101		1,814,245
Microsemi Corp.*		46,600		1,785,246
MSCI, Inc. — Class A		21,225		1,572,348
Tyler Technologies, Inc.*		11,500		1,479,015
Jack Henry & Associates, Inc.		16,120		1,363,268
DST Systems, Inc.		10,400		1,172,808
Broadridge Financial Solutions, Inc.		18,120		1,074,697
Cadence Design Systems, Inc.*		42,792		1,009,035
CDK Global, Inc.		19,898		926,252
Total Technology				35,479,749
Consumer, Non-cyclical - 22.3%
ABIOMED, Inc.*		34,800		3,299,388
Post Holdings, Inc.*		39,900		2,743,922
Sprouts Farmers Market, Inc.*		94,300		2,738,472
Amsurg Corp. — Class A*		32,800		2,446,880
Global Payments, Inc.		28,980		1,892,394
WhiteWave Foods Co. — Class A*		39,687		1,612,880
SEI Investments Co.		37,324		1,606,798
United Therapeutics Corp.*		14,091		1,570,160
Align Technology, Inc.*		21,420		1,557,020
CEB, Inc.		21,048		1,362,437
PAREXEL International Corp.*		21,454		1,345,809
Service Corporation International		49,945		1,232,643
MEDNAX, Inc.*		18,430		1,190,947
VCA, Inc.*		18,425		1,062,938
Gartner, Inc.*		11,725		1,047,629
Rollins, Inc.		33,072		896,913
STERIS plc		12,000		852,600
Flowers Foods, Inc.		44,500		821,470
Charles River Laboratories International, Inc.*		9,650		732,821
Akorn, Inc.*		30,593		719,853
Bio-Techne Corp.		7,480		707,010
LivaNova plc*		12,400		669,352
Total Consumer, Non-cyclical				32,110,336
Financial - 20.5%
Alexander & Baldwin, Inc.		86,970		3,190,060
WisdomTree Investments, Inc.		248,900		2,844,927
MarketAxess Holdings, Inc.		21,277		2,656,008
Old Republic International Corp.		126,040		2,304,011
Bank of the Ozarks, Inc.		47,207		1,981,277
Lamar Advertising Co. — Class A		31,436		1,933,314
Equity One, Inc.		66,800		1,914,488
PrivateBancorp, Inc. — Class A		48,400		1,868,240
Signature Bank*		13,701		1,864,980
Weingarten Realty Investors		40,500		1,519,560
First Horizon National Corp.		96,500		1,264,150
SVB Financial Group*		11,800		1,204,190
CBOE Holdings, Inc.		17,382		1,135,566
Sovran Self Storage, Inc.		9,277		1,094,222
Communications Sales & Leasing, Inc.		42,970		956,083
Healthcare Realty Trust, Inc.		30,300		935,967
Jones Lang LaSalle, Inc.		7,700		903,364
Total Financial				29,570,407
Consumer, Cyclical - 19.1%
Skechers U.S.A., Inc. — Class A*		129,732		3,950,339
NVR, Inc.*		1,600		2,771,840
Vista Outdoor, Inc.*		52,500		2,725,275
Tempur Sealy International, Inc.*		37,280		2,266,251
LKQ Corp.*		52,890		1,688,778
Pool Corp.		19,105		1,676,273
Wendy’s Co.		153,517		1,671,801
JetBlue Airways Corp.*		73,540		1,553,164
Alaska Air Group, Inc.		18,834		1,544,765
Toll Brothers, Inc.*		51,890		1,531,274
Buffalo Wild Wings, Inc.*		8,000		1,184,960
Domino’s Pizza, Inc.		8,285		1,092,460
Carter’s, Inc.		10,084		1,062,652
Toro Co.		12,200		1,050,664
Panera Bread Co. — Class A*		5,000		1,024,150
Dunkin’ Brands Group, Inc.		16,095		759,201
Total Consumer, Cyclical				27,553,847
Industrial - 8.5%
Fortune Brands Home & Security, Inc.		33,657		1,886,138
AO Smith Corp.		23,900		1,823,809
Lennox International, Inc.		12,900		1,743,951
Acuity Brands, Inc.		7,600		1,657,864
Zebra Technologies Corp. — Class A*		22,912		1,580,928
Eagle Materials, Inc.		20,141		1,412,086
Packaging Corporation of America		23,317		1,408,347
Cognex Corp.		20,480		797,696
Total Industrial				12,310,819
Communications - 4.6%
ARRIS International plc*		106,813		2,448,154
AMC Networks, Inc. — Class A*		30,565		1,984,891
Ciena Corp.*		59,900		1,139,298
FactSet Research Systems, Inc.		6,600		1,000,098
Total Communications				6,572,441
Total Common Stocks
(Cost $131,138,558)				143,597,599

28 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P MIDCAP 400® PURE GROWTH FUND

	Face Amount		Value
REPURCHASE AGREEMENTS††,1 - 0.5%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	523,276	$	523,276
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		177,936		177,936
Total Repurchase Agreements
(Cost $701,212)				701,212
Total Investments - 100.1%
(Cost $131,839,770)			$	144,298,811
Other Assets & Liabilities, net - (0.1)%				(87,869	)
Total Net Assets - 100.0%			$	144,210,942

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	143,597,599	$	—	$	—	$	143,597,599
Repurchase Agreements		—		701,212		—		701,212
Total	$	143,597,599	$	701,212	$	—	$	144,298,811

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 29

S&P MIDCAP 400^® PURE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $131,138,558)	$	143,597,599
Repurchase agreements, at value (cost $701,212)		701,212
Total investments (cost $131,839,770)		144,298,811
Receivables:
Securities sold		1,073,468
Dividends		67,210
Fund shares sold		34,291
Interest		4
Total assets		145,473,784
Liabilities:
Payable for:
Fund shares redeemed		1,005,476
Management fees		89,281
Distribution and service fees		42,542
Transfer agent and administrative fees		29,760
Portfolio accounting fees		11,904
Miscellaneous		83,879
Total liabilities		1,262,842
Commitments and contingent liabilities (Note 12)		—
Net assets	$	144,210,942
Net assets consist of:
Paid in capital	$	139,725,244
Accumulated net investment loss		(267,173	)
Accumulated net realized loss on investments		(7,706,170	)
Net unrealized appreciation on investments		12,459,041
Net assets	$	144,210,942
A-Class:
Net assets	$	29,017,113
Capital shares outstanding		623,856
Net asset value per share	$	46.51
Maximum offering price per share (Net asset value divided by 95.25%)	$	48.83
C-Class:
Net assets	$	20,278,890
Capital shares outstanding		489,715
Net asset value per share	$	41.41
H-Class:
Net assets	$	94,914,939
Capital shares outstanding		2,038,470
Net asset value per share	$	46.56

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	1,442,538
Interest		732
Income from securities lending, net		215
Total investment income		1,443,485
Expenses:
Management fees		1,366,558
Transfer agent and administrative fees		455,519
Distribution and service fees:
A-Class		96,935
C-Class		248,778
H-Class		296,390
Portfolio accounting fees		182,206
Custodian fees		21,146
Trustees’ fees*		13,276
Line of credit fees		957
Miscellaneous		236,077
Total expenses		2,917,842
Net investment loss		(1,474,357	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		618,071
Net realized gain		618,071
Net change in unrealized appreciation (depreciation) on:
Investments		(19,480,581	)
Net change in unrealized appreciation (depreciation)		(19,480,581	)
Net realized and unrealized loss		(18,862,510	)
Net decrease in net assets resulting from operations	$	(20,336,867	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

30 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P MIDCAP 400^® PURE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(1,474,357	)	$	(1,378,718	)
Net realized gain on investments		618,071			29,700,840
Net change in unrealized appreciation (depreciation) on investments		(19,480,581	)		(18,164,089	)
Net increase (decrease) in net assets resulting from operations		(20,336,867	)		10,158,033
Distributions to shareholders from:
Net realized gains
A-Class		(2,228,224	)		(7,116,622	)
C-Class		(1,333,119	)		(4,084,213	)
H-Class		(6,095,021	)		(22,003,582	)
Total distributions to shareholders		(9,656,364	)		(33,204,417	)
Capital share transactions:
Proceeds from sale of shares
A-Class		53,831,940			39,741,275
C-Class		8,486,478			6,287,664
H-Class		132,856,460			147,612,847
Distributions reinvested
A-Class		2,217,738			6,967,839
C-Class		1,326,118			3,990,817
H-Class		6,025,101			21,471,603
Cost of shares redeemed
A-Class		(60,087,772	)		(61,004,231	)
C-Class		(12,136,902	)		(9,508,175	)
H-Class		(150,323,558	)		(215,228,354	)
Net decrease from capital share transactions		(17,804,397	)		(59,668,715	)
Net decrease in net assets		(47,797,628	)		(82,715,099	)
Net assets:
Beginning of year		192,008,570			274,723,669
End of year	$	144,210,942		$	192,008,570
Accumulated net investment loss at end of year	$	(267,173	)	$	—
Capital share activity:
Shares sold
A-Class		1,045,660			737,028
C-Class		181,153			127,220
H-Class		2,636,800			2,657,949
Shares issued from reinvestment of distributions
A-Class		45,094			138,912
C-Class		30,201			87,942
H-Class		122,362			427,636
Shares redeemed
A-Class		(1,221,580	)		(1,132,013	)
C-Class		(270,847	)		(193,674	)
H-Class		(3,033,087	)		(3,955,768	)
Net decrease in shares		(464,244	)		(1,104,768	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 31

S&P MIDCAP 400^® 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	53.86		$	58.66		$	49.76		$	44.11		$	42.76
Income (loss) from investment operations:
Net investment income (loss)a		(.36	)		(.29	)		(.22	)		(.19	)		(.45	)
Net gain (loss) on investments (realized and unrealized)		(4.48	)		3.88			11.05			5.84			1.80
Total from investment operations		(4.84	)		3.59			10.83			5.65			1.35
Less distributions from:
Net realized gains		(2.51	)		(8.39	)		(1.93	)		—			—
Total distributions		(2.51	)		(8.39	)		(1.93	)		—			—
Net asset value, end of period	$	46.51		$	53.86		$	58.66		$	49.76		$	44.11
Total Returnb		(9.23	%)		7.18	%		21.90	%		12.81	%		3.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	29,017		$	40,648		$	59,293		$	45,638		$	36,052
Ratios to average net assets:
Net investment income (loss)		(0.71	%)		(0.53	%)		(0.40	%)		(0.43	%)		(1.09	%)
Total expenses		1.50	%		1.51	%		1.52	%		1.50	%		1.50	%
Portfolio turnover rate		143	%		134	%		131	%		188	%		226	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	48.60		$	54.13		$	46.39		$	41.43		$	40.47
Income (loss) from investment operations:
Net investment income (loss)a		(.66	)		(.64	)		(.58	)		(.49	)		(.71	)
Net gain (loss) on investments (realized and unrealized)		(4.02	)		3.50			10.25			5.45			1.67
Total from investment operations		(4.68	)		2.86			9.67			4.96			.96
Less distributions from:
Net realized gains		(2.51	)		(8.39	)		(1.93	)		—			—
Total distributions		(2.51	)		(8.39	)		(1.93	)		—			—
Net asset value, end of period	$	41.41		$	48.60		$	54.13		$	46.39		$	41.43
Total Returnb		(9.92	%)		6.39	%		20.98	%		12.00	%		2.35	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	20,279		$	26,689		$	28,567		$	18,837		$	16,228
Ratios to average net assets:
Net investment income (loss)		(1.46	%)		(1.26	%)		(1.15	%)		(1.19	%)		(1.83	%)
Total expenses		2.25	%		2.26	%		2.27	%		2.25	%		2.25	%
Portfolio turnover rate		143	%		134	%		131	%		188	%		226	%

32 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	53.91		$	58.71		$	49.80		$	44.14		$	42.81
Income (loss) from investment operations:
Net investment income (loss)a		(.36	)		(.29	)		(.18	)		(.20	)		(.44	)
Net gain (loss) on investments (realized and unrealized)		(4.48	)		3.88			11.02			5.86			1.77
Total from investment operations		(4.84	)		3.59			10.84			5.66			1.33
Less distributions from:
Net realized gains		(2.51	)		(8.39	)		(1.93	)		—			—
Total distributions		(2.51	)		(8.39	)		(1.93	)		—			—
Net asset value, end of period	$	46.56		$	53.91		$	58.71		$	49.80		$	44.14
Total Returnb		(9.22	%)		7.18	%		21.91	%		12.82	%		3.11	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	94,915		$	124,672		$	186,863		$	242,157		$	312,510
Ratios to average net assets:
Net investment income (loss)		(0.71	%)		(0.52	%)		(0.33	%)		(0.45	%)		(1.08	%)
Total expenses		1.50	%		1.51	%		1.52	%		1.50	%		1.50	%
Portfolio turnover rate		143	%		134	%		131	%		188	%		226	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 33

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, S&P MidCap 400^® Pure Value Fund H-Class returned -6.86%, compared with a return of -4.94% for the S&P MidCap 400 Pure Value Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The sectors that contributed the most to the performance of the underlying index for the period were Utilities and Materials. The Energy sector detracted the most from performance, followed by the Health Care sector.

Ingram Micro, Inc. – Class A, Talen Energy Corp., and Joy Global, Inc. contributed the most to the performance of the underlying index for the period. Peabody Energy Corp., Community Health Systems, Inc., and SunEdison, Inc. detracted the most from the performance of the underlying index for the period.

Performance displayed represents past performance, which is no guarantee of future results.

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)
Joy Global, Inc.	2.7%
United States Steel Corp.	2.6%
Terex Corp.	2.4%
Allegheny Technologies, Inc.	2.3%
KB Home	2.2%
Talen Energy Corp.	2.2%
Tech Data Corp.	2.1%
Commercial Metals Co.	2.1%
Arrow Electronics, Inc.	2.0%
Reliance Steel & Aluminum Co.	2.0%
Top Ten Total	22.6%
“Ten Largest Holdings” excludes any temporary cash investments.

34 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-6.88%	6.36%	4.30%
A-Class Shares with sales charge†	-11.30%	5.33%	3.79%
C-Class Shares	-7.58%	5.54%	3.48%
C-Class Shares with CDSC‡	-8.50%	5.54%	3.48%
H-Class Shares	-6.86%	6.34%	4.29%
S&P MidCap 400 Pure Value Index	-4.94%	8.99%	7.25%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P MidCap 400 Pure Value Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 35

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P MIDCAP 400® PURE VALUE FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Industrial - 22.6%
Joy Global, Inc.		90,998	$	1,462,338
Terex Corp.		52,535		1,307,071
Tech Data Corp.*		15,001		1,151,627
Arrow Electronics, Inc.*		17,459		1,124,534
Avnet, Inc.		21,733		962,772
Triumph Group, Inc.		26,778		842,971
AECOM*		22,691		698,656
KLX, Inc.*		21,491		690,721
Vishay Intertechnology, Inc.		51,271		626,019
Greif, Inc. — Class A		18,771		614,750
Jabil Circuit, Inc.		28,525		549,677
AGCO Corp.		11,008		547,098
Trinity Industries, Inc.		26,902		492,576
Oshkosh Corp.		11,936		487,824
Granite Construction, Inc.		6,430		307,354
Regal Beloit Corp.		4,854		306,239
GATX Corp.		5,620		266,950
Total Industrial				12,439,177
Consumer, Cyclical - 16.5%
KB Home		84,594		1,208,002
Ingram Micro, Inc. — Class A		29,916		1,074,284
World Fuel Services Corp.		19,844		964,022
Abercrombie & Fitch Co. — Class A		20,941		660,480
Fossil Group, Inc.*		14,291		634,806
Office Depot, Inc.*		89,132		632,837
CST Brands, Inc.		16,385		627,382
Ascena Retail Group, Inc.*		50,772		561,538
Dana Holding Corp.		36,306		511,552
Big Lots, Inc.		10,356		469,023
J.C. Penney Company, Inc.*		37,399		413,633
Dick’s Sporting Goods, Inc.		8,199		383,303
Deckers Outdoor Corp.*		5,608		335,975
Guess?, Inc.		17,737		332,923
Cabela’s, Inc.*		5,316		258,836
Total Consumer, Cyclical				9,068,596
Financial - 15.2%
Reinsurance Group of America, Inc. — Class A		9,088		874,720
Hanover Insurance Group, Inc.		6,476		584,266
Aspen Insurance Holdings Ltd.		11,970		570,969
CNO Financial Group, Inc.		31,069		556,756
Endurance Specialty Holdings Ltd.		8,306		542,714
Everest Re Group Ltd.		2,388		471,463
Senior Housing Properties Trust		22,838		408,572
Kemper Corp.		13,434		397,243
Alleghany Corp.*		777		385,547
Hancock Holding Co.		16,745		384,466
Genworth Financial, Inc. — Class A*		129,726		354,152
First American Financial Corp.		9,222		351,450
WR Berkley Corp.		6,003		337,369
First Niagara Financial Group, Inc.		31,746		307,301
Umpqua Holdings Corp.		17,488		277,360
Associated Banc-Corp.		14,877		266,893
FirstMerit Corp.		12,174		256,263
Trustmark Corp.		10,833		249,484
Prosperity Bancshares, Inc.		4,778		221,651
Stifel Financial Corp.*		6,690		198,024
International Bancshares Corp.		7,265		179,155
TCF Financial Corp.		14,228		174,435
Total Financial				8,350,253
Basic Materials - 13.5%
United States Steel Corp.		89,064		1,429,476
Allegheny Technologies, Inc.		76,269		1,243,185
Commercial Metals Co.		67,112		1,138,891
Reliance Steel & Aluminum Co.		15,675		1,084,553
Domtar Corp.		22,691		918,986
Steel Dynamics, Inc.		33,308		749,763
Carpenter Technology Corp.		9,594		328,403
Worthington Industries, Inc.		7,896		281,413
Olin Corp.		14,718		255,652
Total Basic Materials				7,430,322
Consumer, Non-cyclical - 11.7%
Community Health Systems, Inc.*		46,515		860,992
United Natural Foods, Inc.*		21,194		854,118
Aaron’s, Inc.		28,365		711,962
Owens & Minor, Inc.		16,599		670,932
ManpowerGroup, Inc.		7,534		613,418
LifePoint Health, Inc.*		7,203		498,808
DeVry Education Group, Inc.		28,502		492,230
RR Donnelley & Sons Co.		28,593		468,925
Graham Holdings Co. — Class B		936		449,280
Dean Foods Co.		25,214		436,706
FTI Consulting, Inc.*		10,576		375,554
Total Consumer, Non-cyclical				6,432,925
Energy - 8.9%
WPX Energy, Inc.*		103,090		720,599
Murphy USA, Inc.*		9,347		574,373
Noble Corporation plc		50,766		525,429
CONSOL Energy, Inc.		45,880		517,985
SM Energy Co.		26,894		503,994
Patterson-UTI Energy, Inc.		25,034		441,099
Western Refining, Inc.		12,826		373,109
HollyFrontier Corp.		9,942		351,151
Oil States International, Inc.*		10,958		345,396
NOW, Inc.*		16,352		289,757
Rowan Companies plc — Class A		12,883		207,416
SunEdison, Inc.*		102,572		55,409
Total Energy				4,905,717

36 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P MIDCAP 400® PURE VALUE FUND

 

	Shares		Value
Utilities - 5.3%
Talen Energy Corp.*	131,645	$	1,184,804
MDU Resources Group, Inc.	28,345		551,594
Great Plains Energy, Inc.	11,920		384,421

PNM Resources, Inc.	8,538	287,901
Hawaiian Electric Industries, Inc.	7,893	255,733
ONE Gas, Inc.	3,952	241,467
Total Utilities		2,905,920
Technology - 4.0%
Computer Sciences Corp.	22,725	781,512
SYNNEX Corp.	6,532	604,798
3D Systems Corp.*	36,632	566,697
Lexmark International, Inc. — Class A	7,613	254,503
Total Technology		2,207,510
Communications - 1.8%
Telephone & Data Systems, Inc.	33,356	1,003,682
Total Common Stocks
(Cost $49,826,591)		54,744,102

	Face Amount
REPURCHASE AGREEMENTS††,1 - 0.9%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	366,621		366,621
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		124,666		124,666
Total Repurchase Agreements
(Cost $491,287)				491,287
Total Investments - 100.4%
(Cost $50,317,878)			$	55,235,389
Other Assets & Liabilities, net - (0.4)%				(247,073	)
Total Net Assets - 100.0%			$	54,988,316

*	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
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	54,744,102	$	—	$	—	$	54,744,102
Repurchase Agreements		—		491,287		—		491,287
Total	$	54,744,102	$	491,287	$	—	$	55,235,389

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 37

S&P MIDCAP 400^® PURE VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $49,826,591)	$	54,744,102
Repurchase agreements, at value (cost $491,287)		491,287
Total investments (cost $50,317,878)		55,235,389
Cash		1,754
Receivables:
Fund shares sold		637,533
Dividends		35,546
Interest		3
Total assets		55,910,225
Liabilities:
Payable for:
Securities purchased		809,862
Fund shares redeemed		58,089
Management fees		23,230
Distribution and service fees		9,035
Transfer agent and administrative fees		7,743
Portfolio accounting fees		3,097
Miscellaneous		10,853
Total liabilities		921,909
Commitments and contingent liabilities (Note 12)		—
Net assets	$	54,988,316
Net assets consist of:
Paid in capital	$	54,893,247
Undistributed net investment income		52,548
Accumulated net realized loss on investments		(4,874,990	)
Net unrealized appreciation on investments		4,917,511
Net assets	$	54,988,316
A-Class:
Net assets	$	4,774,591
Capital shares outstanding		112,534
Net asset value per share	$	42.43
Maximum offering price per share (Net asset value divided by 95.25%)	$	44.55
C-Class:
Net assets	$	2,165,355
Capital shares outstanding		56,486
Net asset value per share	$	38.33
H-Class:
Net assets	$	48,048,370
Capital shares outstanding		1,133,667
Net asset value per share	$	42.38

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	289,769
Income from securities lending, net		3,537
Interest		87
Total investment income		293,393
Expenses:
Management fees		112,326
Transfer agent and administrative fees		37,442
Distribution and service fees:
A-Class		4,301
C-Class		20,577
H-Class		27,997
Portfolio accounting fees		14,977
Custodian fees		1,748
Trustees’ fees*		944
Line of credit fees		47
Miscellaneous		20,486
Total expenses		240,845
Net investment income		52,548
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(1,107,050	)
Net realized loss		(1,107,050	)
Net change in unrealized appreciation (depreciation) on:
Investments		1,847,168
Net change in unrealized appreciation (depreciation)		1,847,168
Net realized and unrealized gain		740,118
Net increase in net assets resulting from operations	$	792,666

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

38 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P MIDCAP 400^® PURE VALUE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	52,548		$	28,715
Net realized gain (loss) on investments		(1,107,050	)		821,447
Net change in unrealized appreciation (depreciation) on investments		1,847,168			(111,329	)
Net increase in net assets resulting from operations		792,666			738,833
Distributions to shareholders from:
Net investment income
A-Class		(2,509	)		(1,894	)
C-Class		(4,545	)		(3,562	)
H-Class		(21,661	)		(13,489	)
Total distributions to shareholders		(28,715	)		(18,945	)
Capital share transactions:
Proceeds from sale of shares
A-Class		7,839,706			11,223,218
C-Class		1,496,883			3,652,910
H-Class		117,775,736			118,121,754
Distributions reinvested
A-Class		2,473			1,845
C-Class		4,535			3,500
H-Class		21,374			13,216
Cost of shares redeemed
A-Class		(4,655,658	)		(11,626,460	)
C-Class		(2,314,575	)		(2,948,860	)
H-Class		(79,851,430	)		(120,382,579	)
Net increase (decrease) from capital share transactions		40,319,044			(1,941,456	)
Net increase (decrease) in net assets		41,082,995			(1,221,568	)
Net assets:
Beginning of year		13,905,321			15,126,889
End of year	$	54,988,316		$	13,905,321
Undistributed net investment income at end of year	$	52,548		$	28,715
Capital share activity:
Shares sold
A-Class		185,812			253,969
C-Class		42,699			91,046
H-Class		2,852,823			2,697,009
Shares issued from reinvestment of distributions
A-Class		58			41
C-Class		118			86
H-Class		505			296
Shares redeemed
A-Class		(115,018	)		(267,091	)
C-Class		(59,256	)		(74,102	)
H-Class		(1,916,239	)		(2,746,513	)
Net increase (decrease) in shares		991,502			(45,259	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 39

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	45.68		$	43.04		$	36.18		$	30.88		$	31.43
Income (loss) from investment operations:
Net investment income (loss)a		.16			.11			(.03	)		.07			.06
Net gain (loss) on investments (realized and unrealized)		(3.30	)		2.58			7.08			5.23			(.61	)
Total from investment operations		(3.14	)		2.69			7.05			5.30			(.55	)
Less distributions from:
Net investment income		(.11	)		(.05	)		(.19	)		—			—
Total distributions		(.11	)		(.05	)		(.19	)		—			—
Net asset value, end of period	$	42.43		$	45.68		$	43.04		$	36.18		$	30.88
Total Returnb		(6.88	%)		6.25	%		19.49	%		17.16	%		(1.75	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,775		$	1,904		$	2,357		$	1,571		$	6,817
Ratios to average net assets:
Net investment income (loss)		0.39	%		0.26	%		(0.06	%)		0.23	%		0.22	%
Total expenses		1.50	%		1.51	%		1.52	%		1.51	%		1.49	%
Portfolio turnover rate		493	%		638	%		506	%		757	%		619	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	41.59		$	39.48		$	33.46		$	28.78		$	29.53
Income (loss) from investment operations:
Net investment income (loss)a		(.12	)		(.18	)		(.25	)		(.13	)		(.16	)
Net gain (loss) on investments (realized and unrealized)		(3.03	)		2.34			6.46			4.81			(.59	)
Total from investment operations		(3.15	)		2.16			6.21			4.68			(.75	)
Less distributions from:
Net investment income		(.11	)		(.05	)		(.19	)		—			—
Total distributions		(.11	)		(.05	)		(.19	)		—			—
Net asset value, end of period	$	38.33		$	41.59		$	39.48		$	33.46		$	28.78
Total Returnb		(7.58	%)		5.47	%		18.57	%		16.26	%		(2.54	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,165		$	3,033		$	2,207		$	3,413		$	2,194
Ratios to average net assets:
Net investment income (loss)		(0.30	%)		(0.44	%)		(0.71	%)		(0.45	%)		(0.60	%)
Total expenses		2.25	%		2.26	%		2.28	%		2.26	%		2.26	%
Portfolio turnover rate		493	%		638	%		506	%		757	%		619	%

40 | THE RYDEX FUNDS 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	45.62		$	42.98		$	36.16		$	30.86		$	31.42
Income (loss) from investment operations:
Net investment income (loss)a		.20			.11			.06			.08			.01
Net gain (loss) on investments (realized and unrealized)		(3.33	)		2.58			6.95			5.22			(.57	)
Total from investment operations		(3.13	)		2.69			7.01			5.30			(.56	)
Less distributions from:
Net investment income		(.11	)		(.05	)		(.19	)		—			—
Total distributions		(.11	)		(.05	)		(.19	)		—			—
Net asset value, end of period	$	42.38		$	45.62		$	42.98		$	36.16		$	30.86
Total Returnb		(6.86	%)		6.26	%		19.39	%		17.17	%		(1.78	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	48,048		$	8,968		$	10,563		$	78,237		$	18,838
Ratios to average net assets:
Net investment income (loss)		0.47	%		0.25	%		0.15	%		0.24	%		0.02	%
Total expenses		1.51	%		1.51	%		1.52	%		1.52	%		1.51	%
Portfolio turnover rate		493	%		638	%		506	%		757	%		619	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 41

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, S&P SmallCap 600^® Pure Growth Fund H-Class returned -11.24%, compared with a gain of -9.66% for the S&P SmallCap 600 Pure Growth Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The Consumer Staples sector and the Telecommunications Services sector contributed the most to the performance of the underlying index for the period. The Health Care sector was the largest detractor from performance, followed by the Consumer Discretionary sector.

The best-performing stocks in the S&P SmallCap 600 Pure Growth Index were Take-Two Interactive Software, Inc., Skechers U.S.A., Inc., – Class A, and CoreSite Realty Corp. The weakest performers in the underlying index were Lannett Company, Inc., Depomed, Inc., and Carrizo Oil & Gas, Inc.

Performance displayed represents past performance, which is no guarantee of future results.

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)
Ligand Pharmaceuticals, Inc. — Class B	1.8%
Supernus Pharmaceuticals, Inc.	1.4%
Fabrinet	1.3%
Meritage Homes Corp.	1.3%
PGT, Inc.	1.3%
LendingTree, Inc.	1.3%
First Midwest Bancorp, Inc.	1.2%
Headwaters, Inc.	1.2%
Cirrus Logic, Inc.	1.2%
Pinnacle Entertainment, Inc.	1.2%
Top Ten Total	13.2%
“Ten Largest Holdings” excludes any temporary cash investments.

42 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-11.24%	7.71%	5.39%
A-Class Shares with sales charge†	-15.46%	6.67%	4.88%
C-Class Shares	-11.90%	6.90%	4.61%
C-Class Shares with CDSC‡	-12.78%	6.90%	4.61%
H-Class Shares	-11.24%	7.70%	5.38%
S&P SmallCap 600 Pure Growth Index	-9.66%	9.75%	7.55%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P SmallCap 600 Pure Growth Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 43

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P SMALLCAP 600® PURE GROWTH FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Consumer, Non-cyclical - 34.8%
Ligand Pharmaceuticals, Inc. — Class B*		5,069	$	542,839
Supernus Pharmaceuticals, Inc.*		27,063		412,710
LendingTree, Inc.*		3,870		378,409
MiMedx Group, Inc.*		37,194		325,076
AMN Healthcare Services, Inc.*		9,632		323,732
TrueBlue, Inc.*		10,812		282,733
Emergent BioSolutions, Inc.*		7,775		282,621
Zeltiq Aesthetics, Inc.*		10,290		279,477
On Assignment, Inc.*		7,230		266,932
Cal-Maine Foods, Inc.		5,141		266,869
Heartland Payment Systems, Inc.		2,735		264,119
Depomed, Inc.*		18,788		261,717
NuVasive, Inc.*		5,360		260,764
Masimo Corp.*		5,918		247,609
Cross Country Healthcare, Inc.*		20,935		243,474
Affymetrix, Inc.*		17,110		239,711
Cantel Medical Corp.		3,339		238,271
NutriSystem, Inc.		11,345		236,770
Cynosure, Inc. — Class A*		5,186		228,806
Almost Family, Inc.*		6,137		228,542
Prestige Brands Holdings, Inc.*		4,278		228,402
Repligen Corp.*		8,327		223,330
Surgical Care Affiliates, Inc.*		4,740		219,367
Helen of Troy Ltd.*		2,057		213,290
Heidrick & Struggles International, Inc.		8,810		208,797
Cambrex Corp.*		4,717		207,548
Vascular Solutions, Inc.*		6,012		195,571
Albany Molecular Research, Inc.*		12,669		193,709
Calavo Growers, Inc.		3,102		177,000
Neogen Corp.*		3,508		176,628
Natus Medical, Inc.*		4,484		172,320
Nektar Therapeutics*		12,517		172,109
Monro Muffler Brake, Inc.		2,381		170,170
Merit Medical Systems, Inc.*		8,854		163,710
US Physical Therapy, Inc.		3,141		156,202
Korn/Ferry International		5,486		155,199
LHC Group, Inc.*		4,189		148,961
Matthews International Corp. — Class A		2,816		144,940
Chemed Corp.		1,058		143,306
Lannett Company, Inc.*		7,770		139,316
B&G Foods, Inc.		3,839		133,636
Luminex Corp.*		6,714		130,252
SurModics, Inc.*		6,893		126,900
Healthcare Services Group, Inc.		3,319		122,172
WD-40 Co.		1,113		120,215
Integra LifeSciences Holdings Corp.*		1,612		108,584
CorVel Corp.*		2,620		103,280
Impax Laboratories, Inc.*		2,782		89,080
Acorda Therapeutics, Inc.*		2,710		71,680
Phibro Animal Health Corp. — Class A		2,518		68,087
Total Consumer, Non-cyclical				10,494,942
Financial - 18.9%
First Midwest Bancorp, Inc.		20,540		370,130
CoreSite Realty Corp.		4,899		342,979
Home BancShares, Inc.		7,313		299,467
Ameris Bancorp		9,423		278,732
BofI Holding, Inc.*		12,726		271,572
Walker & Dunlop, Inc.*		11,159		270,829
Universal Insurance Holdings, Inc.		14,729		262,177
Employers Holdings, Inc.		8,713		245,184
Talmer Bancorp, Inc. — Class A		13,209		238,951
Education Realty Trust, Inc.		5,386		224,058
Pinnacle Financial Partners, Inc.		4,558		223,615
Acadia Realty Trust		6,224		218,649
Hanmi Financial Corp.		9,735		214,365
Simmons First National Corp. — Class A		4,682		211,018
Northfield Bancorp, Inc.		12,390		203,692
Evercore Partners, Inc. — Class A		3,880		200,790
Bank Mutual Corp.		25,303		191,544
Four Corners Property Trust, Inc.		10,235		183,718
AMERISAFE, Inc.		2,932		154,047
Financial Engines, Inc.		4,850		152,436
HFF, Inc. — Class A		5,504		151,525
RLI Corp.		2,155		144,083
BBCN Bancorp, Inc.		9,280		140,963
Banner Corp.		3,001		126,162
LegacyTexas Financial Group, Inc.		5,979		117,487
Retail Opportunity Investments Corp.		5,672		114,121
First Financial Bankshares, Inc.		3,720		110,038
Total Financial				5,662,332
Industrial - 17.9%
Fabrinet*		12,435		402,272
PGT, Inc.*		39,198		385,709
Headwaters, Inc.*		18,635		369,719
TASER International, Inc.*		16,209		318,183
US Concrete, Inc.*		5,206		310,174
II-VI, Inc.*		13,478		292,607
Universal Forest Products, Inc.		3,272		280,803
Dycom Industries, Inc.*		4,110		265,793
Griffon Corp.		14,687		226,914
AZZ, Inc.		3,937		222,834
Drew Industries, Inc.		3,348		215,812
Lydall, Inc.*		6,520		212,031
US Ecology, Inc.		4,546		200,751
Comfort Systems USA, Inc.		6,176		196,212
John Bean Technologies Corp.		3,420		192,922
Proto Labs, Inc.*		2,180		168,056
Sturm Ruger & Company, Inc.		2,411		164,864
Trex Company, Inc.*		3,326		159,415
Methode Electronics, Inc.		5,026		146,960
AAON, Inc.		5,208		145,824

44 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P SMALLCAP 600® PURE GROWTH FUND

	Shares		Value
Matson, Inc.		3,587	$	144,090
Apogee Enterprises, Inc.		3,066		134,567
Exponent, Inc.		2,614		133,340
OSI Systems, Inc.*		1,351		88,477
Total Industrial				5,378,329
Consumer, Cyclical - 11.0%
Meritage Homes Corp.*		10,730		391,215
Pinnacle Entertainment, Inc.*		9,942		348,964
Installed Building Products, Inc.*		11,255		299,496
Lithia Motors, Inc. — Class A		2,830		247,144
American Woodmark Corp.*		2,994		223,322
Allegiant Travel Co. — Class A		1,206		214,741
Hawaiian Holdings, Inc.*		4,360		205,748
Francesca’s Holdings Corp.*		9,212		176,502
Ruth’s Hospitality Group, Inc.		9,408		173,201
Interface, Inc. — Class A		9,070		168,158
Monarch Casino & Resort, Inc.*		8,322		161,946
Gentherm, Inc.*		3,879		161,328
Boyd Gaming Corp.*		7,580		156,603
Papa John’s International, Inc.		2,507		135,854
Popeyes Louisiana Kitchen, Inc.*		2,584		134,523
Sonic Corp.		2,579		90,678
Total Consumer, Cyclical				3,289,423
Technology - 9.6%
Cirrus Logic, Inc.*		9,748		354,924
Ebix, Inc.		6,519		265,910
Take-Two Interactive Software, Inc.*		6,856		258,266
Blackbaud, Inc.		3,729		234,517
ExlService Holdings, Inc.*		4,424		229,163
Monolithic Power Systems, Inc.		3,137		199,639
Cray, Inc.*		4,579		191,906
Tessera Technologies, Inc.		5,883		182,373
Kopin Corp.*		92,615		153,741
Virtusa Corp.*		3,986		149,316
Medidata Solutions, Inc.*		3,790		146,711
Rambus, Inc.*		10,647		146,396
Synchronoss Technologies, Inc.*		4,415		142,781
CEVA, Inc.*		5,088		114,480
Omnicell, Inc.*		3,683		102,645
Total Technology				2,872,768
Communications - 4.4%
Stamps.com, Inc.*		2,724		289,507
LogMeIn, Inc.*		5,187		261,736
World Wrestling Entertainment, Inc. — Class A		10,513		185,660
8x8, Inc.*		16,439		165,376
NIC, Inc.		7,443		134,197
HealthStream, Inc.*		5,344		118,049
Blue Nile, Inc.		3,418		87,877
General Communication, Inc. — Class A*		3,945		72,272
Total Communications				1,314,674
Basic Materials - 1.9%
Balchem Corp.		3,224		199,953
Innospec, Inc.		3,328		144,302
Aceto Corp.		5,091		119,944
Deltic Timber Corp.		1,934		116,330
Total Basic Materials				580,529
Energy - 0.6%
Synergy Resources Corp.*		22,186		172,385
Utilities - 0.5%
Piedmont Natural Gas Company, Inc.		2,440		145,985
Total Common Stocks
(Cost $26,186,301)				29,911,367

	Face Amount
REPURCHASE AGREEMENTS††,1 - 0.5%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	120,333		120,333
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		40,918		40,918
Total Repurchase Agreements
(Cost $161,251)				161,251
Total Investments - 100.1%
(Cost $26,347,552)			$	30,072,618
Other Assets & Liabilities, net - (0.1)%				(33,745	)
Total Net Assets - 100.0%			$	30,038,873

*	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 Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 45

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P SMALLCAP 600® PURE GROWTH FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	29,911,367	$	—	$	—	$	29,911,367
Repurchase Agreements		—		161,251		—		161,251
Total	$	29,911,367	$	161,251	$	—	$	30,072,618

For the year ended March 31, 2016, there were no transfers between levels.

46 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P SMALLCAP 600^® PURE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $26,186,301)	$	29,911,367
Repurchase agreements, at value (cost $161,251)		161,251
Total investments (cost $26,347,552)		30,072,618
Receivables:
Securities sold		959,066
Fund shares sold		22,139
Dividends		16,175
Interest		1
Total assets		31,069,999
Liabilities:
Payable for:
Fund shares redeemed		894,760
Securities purchased		82,372
Management fees		20,987
Distribution and service fees		8,596
Transfer agent and administrative fees		6,996
Portfolio accounting fees		2,798
Miscellaneous		14,617
Total liabilities		1,031,126
Commitments and contingent liabilities (Note 12)		—
Net assets	$	30,038,873
Net assets consist of:
Paid in capital	$	32,297,835
Undistributed net investment income		—
Accumulated net realized loss on investments		(5,984,028	)
Net unrealized appreciation on investments		3,725,066
Net assets	$	30,038,873
A-Class:
Net assets	$	2,450,504
Capital shares outstanding		46,874
Net asset value per share	$	52.28
Maximum offering price per share (Net asset value divided by 95.25%)	$	54.89
C-Class:
Net assets	$	2,542,039
Capital shares outstanding		53,159
Net asset value per share	$	47.82
H-Class:
Net assets	$	25,046,330
Capital shares outstanding		479,183
Net asset value per share	$	52.27

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	508,876
Income from securities lending, net		18,211
Interest		196
Total investment income		527,283
Expenses:
Management fees		386,651
Transfer agent and administrative fees		128,884
Distribution and service fees:
A-Class		10,063
C-Class		47,403
H-Class		106,970
Portfolio accounting fees		51,553
Custodian fees		5,976
Trustees’ fees*		3,476
Line of credit fees		391
Miscellaneous		64,938
Total expenses		806,305
Net investment loss		(279,022	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(3,903,116	)
Net realized loss		(3,903,116	)
Net change in unrealized appreciation (depreciation) on:
Investments		(3,825,915	)
Securities sold short		(16	)
Net change in unrealized appreciation (depreciation)		(3,825,931	)
Net realized and unrealized loss		(7,729,047	)
Net decrease in net assets resulting from operations	$	(8,008,069	)

* 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 ANNUAL REPORT | 47

S&P SMALLCAP 600^® PURE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(279,022	)	$	(188,117	)
Net realized gain (loss) on investments		(3,903,116	)		2,956,093
Net change in unrealized appreciation (depreciation) on investments		(3,825,931	)		2,390,655
Net increase (decrease) in net assets resulting from operations		(8,008,069	)		5,158,631
Capital share transactions:
Proceeds from sale of shares
A-Class		6,933,578			1,853,974
C-Class		4,477,038			4,335,594
H-Class		162,349,042			126,430,453
Cost of shares redeemed
A-Class		(6,602,316	)		(6,513,702	)
C-Class		(6,727,877	)		(3,479,599	)
H-Class		(181,452,955	)		(97,243,555	)
Net increase (decrease) from capital share transactions		(21,023,490	)		25,383,165
Net increase (decrease) in net assets		(29,031,559	)		30,541,796
Net assets:
Beginning of year		59,070,432			28,528,636
End of year	$	30,038,873		$	59,070,432
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold
A-Class		118,395			33,948
C-Class		84,005			85,842
H-Class		2,856,633			2,360,921
Shares redeemed
A-Class		(119,475	)		(123,092	)
C-Class		(130,988	)		(72,433	)
H-Class		(3,240,197	)		(1,818,920	)
Net increase (decrease) in shares		(431,627	)		466,266

48 | THE RYDEX FUNDS 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	58.90		$	52.99		$	41.94		$	37.97		$	36.06
Income (loss) from investment operations:
Net investment income (loss)a		(.20	)		(.46	)		(.31	)		(.12	)		(.35	)
Net gain (loss) on investments (realized and unrealized)		(6.42	)		6.37			11.36			4.09			2.26
Total from investment operations		(6.62	)		5.91			11.05			3.97			1.91
Net asset value, end of period	$	52.28		$	58.90		$	52.99		$	41.94		$	37.97
Total Returnb		(11.24	%)		11.15	%		26.35	%		10.46	%		5.30	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,451		$	2,825		$	7,265		$	995		$	1,018
Ratios to average net assets:
Net investment income (loss)		(0.36	%)		(0.88	%)		(0.60	%)		(0.31	%)		(1.00	%)
Total expenses		1.50	%		1.51	%		1.53	%		1.51	%		1.52	%
Portfolio turnover rate		309	%		380	%		677	%		645	%		500	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	54.28		$	49.21		$	39.24		$	35.79		$	34.25
Income (loss) from investment operations:
Net investment income (loss)a		(.62	)		(.74	)		(.66	)		(.42	)		(.57	)
Net gain (loss) on investments (realized and unrealized)		(5.84	)		5.81			10.63			3.87			2.11
Total from investment operations		(6.46	)		5.07			9.97			3.45			1.54
Net asset value, end of period	$	47.82		$	54.28		$	49.21		$	39.24		$	35.79
Total Returnb		(11.90	%)		10.30	%		25.41	%		9.64	%		4.50	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,542		$	5,436		$	4,268		$	3,122		$	2,568
Ratios to average net assets:
Net investment income (loss)		(1.19	%)		(1.50	%)		(1.46	%)		(1.17	%)		(1.71	%)
Total expenses		2.25	%		2.25	%		2.28	%		2.26	%		2.26	%
Portfolio turnover rate		309	%		380	%		677	%		645	%		500	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 49

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	58.89		$	52.99		$	41.94		$	37.97		$	36.07
Income (loss) from investment operations:
Net investment income (loss)a		(.28	)		(.31	)		(.38	)		(.31	)		(.39	)
Net gain (loss) on investments (realized and unrealized)		(6.34	)		6.21			11.43			4.28			2.29
Total from investment operations		(6.62	)		5.90			11.05			3.97			1.90
Net asset value, end of period	$	52.27		$	58.89		$	52.99		$	41.94		$	37.97
Total Returnb		(11.24	%)		11.13	%		26.35	%		10.46	%		5.27	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	25,046		$	50,810		$	16,996		$	5,844		$	29,214
Ratios to average net assets:
Net investment income (loss)		(0.49	%)		(0.58	%)		(0.77	%)		(0.81	%)		(1.10	%)
Total expenses		1.50	%		1.49	%		1.52	%		1.50	%		1.52	%
Portfolio turnover rate		309	%		380	%		677	%		645	%		500	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

50 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, S&P SmallCap 600^® Pure Value Fund H-Class returned -10.27%, compared with a return of -8.71% for the S&P SmallCap 600 Pure Value Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The sectors that contributed the most to return were the Materials and Consumer Staples sectors. The Energy sector was the leading detractor from return, followed by the Health Care sector.

The stocks that contributed the most to return of the S&P SmallCap 600 Pure Value Index were Century Aluminum Co., Pep Boys—Manny, Moe & Jack, and SPX Corp. Those that detracted the most from return of the underlying index were Hanger, Inc., Republic Airways Holdings, Inc., and ION Geophysical Corp.

Performance displayed represents past performance, which is no guarantee of future results.

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)
Century Aluminum Co.	2.6%
Rent-A-Center, Inc.	1.6%
Roadrunner Transportation Systems, Inc.	1.5%
SPX Corp.	1.5%
SpartanNash Co.	1.5%
Seneca Foods Corp. — Class A	1.5%
Kelly Services, Inc. — Class A	1.4%
LSB Industries, Inc.	1.4%
Orion Marine Group, Inc.	1.3%
Exterran Corp.	1.3%
Top Ten Total	15.6%
“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 51

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-10.27%	5.86%	2.03%
A-Class Shares with sales charge†	-14.54%	4.83%	1.54%
C-Class Shares	-10.97%	5.05%	1.24%
C-Class Shares with CDSC‡	-11.86%	5.05%	1.24%
H-Class Shares	-10.27%	5.83%	2.01%
S&P SmallCap 600 Value Index	-8.71%	8.40%	5.23%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The S&P SmallCap 600 Pure Value Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

52 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
S&P SMALLCAP 600® PURE VALUE FUND

	Shares		Value
COMMON STOCKS† - 99.0%
Industrial - 27.4%
Roadrunner Transportation Systems, Inc.*		25,871	$	322,352
SPX Corp.		21,373		321,023
LSB Industries, Inc.*		23,165		295,354
Orion Marine Group, Inc.*		52,915		274,100
Benchmark Electronics, Inc.*		10,856		250,232
Checkpoint Systems, Inc.*		23,853		241,392
Sanmina Corp.*		9,945		232,514
MYR Group, Inc.*		9,133		229,330
Chart Industries, Inc.*		10,243		222,478
ArcBest Corp.		10,142		218,966
Celadon Group, Inc.		20,548		215,343
Atlas Air Worldwide Holdings, Inc.*		4,946		209,067
TimkenSteel Corp.		22,790		207,389
TTM Technologies, Inc.*		25,905		172,268
Greenbrier Companies, Inc.		6,209		171,617
Saia, Inc.*		6,044		170,139
Briggs & Stratton Corp.		6,976		166,866
Hornbeck Offshore Services, Inc.*		16,354		162,395
Bel Fuse, Inc. — Class B		10,625		155,125
Plexus Corp.*		3,695		146,026
Hub Group, Inc. — Class A*		3,181		129,753
Echo Global Logistics, Inc.*		4,754		129,119
Olympic Steel, Inc.		7,337		127,003
SPX FLOW, Inc.*		4,790		120,133
Powell Industries, Inc.		3,659		109,075
Boise Cascade Co.*		4,661		96,576
AAR Corp.		4,101		95,430
Aegion Corp. — Class A*		4,067		85,773
EMCOR Group, Inc.		1,759		85,487
Kaman Corp.		1,782		76,074
Tidewater, Inc.		10,332		70,568
Marten Transport Ltd.		3,453		64,640
Haynes International, Inc.		1,568		57,232
Applied Industrial Technologies, Inc.		1,196		51,906
Astec Industries, Inc.		1,111		51,850
Tredegar Corp.		3,007		47,270
Total Industrial				5,781,865
Consumer, Cyclical - 25.9%
Big 5 Sporting Goods Corp.		23,213		257,896
Stage Stores, Inc.		31,199		251,465
SkyWest, Inc.		12,112		242,119
Barnes & Noble Education, Inc.*		23,136		226,733
Finish Line, Inc. — Class A		10,728		226,361
Tuesday Morning Corp.*		26,741		218,741
Ruby Tuesday, Inc.*		39,817		214,216
Genesco, Inc.*		2,905		209,886
Tailored Brands, Inc.		11,600		207,640
Iconix Brand Group, Inc.*		24,658		198,497
ScanSource, Inc.*		4,856		196,085
Zumiez, Inc.*		8,853		176,352
Veritiv Corp.*		4,446		165,658
Barnes & Noble, Inc.		12,939		159,926
VOXX International Corp. — Class A*		34,688		155,055
Essendant, Inc.		4,714		150,518
Cash America International, Inc.		3,808		147,141
Perry Ellis International, Inc.*		7,603		139,970
EZCORP, Inc. — Class A*		43,174		128,227
Fred’s, Inc. — Class A		8,557		127,585
Kirkland’s, Inc.		6,918		121,134
Sonic Automotive, Inc. — Class A		6,548		121,007
Children’s Place, Inc.		1,379		115,105
Group 1 Automotive, Inc.		1,870		109,750
Titan International, Inc.		19,217		103,387
Caleres, Inc.		3,635		102,834
Stein Mart, Inc.		13,988		102,532
Superior Industries International, Inc.		4,566		100,817
Lumber Liquidators Holdings, Inc.*		7,199		94,451
Biglari Holdings, Inc.*		223		82,891
Arctic Cat, Inc.		4,886		82,085
Regis Corp.*		4,991		75,813
Vera Bradley, Inc.*		3,634		73,916
Express, Inc.*		3,370		72,152
Vitamin Shoppe, Inc.*		2,260		69,970
Wolverine World Wide, Inc.		3,745		68,983
Movado Group, Inc.		2,269		62,466
Daktronics, Inc.		5,820		45,978
Unifi, Inc.*		1,825		41,811
Total Consumer, Cyclical				5,447,153
Consumer, Non-cyclical - 15.6%
Rent-A-Center, Inc.		21,120		334,752
SpartanNash Co.		10,229		310,041
Seneca Foods Corp. — Class A*		8,838		307,032
Kelly Services, Inc. — Class A		15,654		299,305
Magellan Health, Inc.*		3,217		218,531
Darling Ingredients, Inc.*		15,265		201,040
Andersons, Inc.		5,772		181,299
ABM Industries, Inc.		4,944		159,741
Kindred Healthcare, Inc.		12,638		156,080
Universal Corp.		2,588		147,024
Universal Technical Institute, Inc.		32,200		138,782
CDI Corp.		18,798		118,051
Sanderson Farms, Inc.		1,270		114,529
Select Medical Holdings Corp.		9,540		112,667
Central Garden & Pet Co. — Class A*		5,522		89,953
AngioDynamics, Inc.*		7,277		89,434
Green Dot Corp. — Class A*		3,170		72,815
Viad Corp.		2,040		59,486
Invacare Corp.		3,911		51,508
PharMerica Corp.*		1,972		43,601
Healthways, Inc.*		3,899		39,341
Central Garden & Pet Co.*		1,672		27,320
Total Consumer, Non-cyclical				3,272,332

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 53

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
S&P SMALLCAP 600® PURE VALUE FUND

	Shares		Value
Energy - 9.9%
Exterran Corp.*		17,064	$	263,810
Atwood Oceanics, Inc.		25,330		232,276
Archrock, Inc.		26,079		208,632
SunCoke Energy, Inc.		24,032		156,208
Green Plains, Inc.		9,342		149,098
Gulf Island Fabrication, Inc.		18,761		147,274
Helix Energy Solutions Group, Inc.*		25,741		144,150
Era Group, Inc.*		14,139		132,624
SEACOR Holdings, Inc.*		2,312		125,888
Newpark Resources, Inc.*		26,321		113,707
Bristow Group, Inc.		4,933		93,332
Cloud Peak Energy, Inc.*		45,250		88,238
REX American Resources Corp.*		1,277		70,835
Pioneer Energy Services Corp.*		31,731		69,808
Rex Energy Corp.*		72,266		55,522
Basic Energy Services, Inc.*		14,170		39,109
Total Energy				2,090,511
Financial - 7.1%
Enova International, Inc.*		27,720		174,913
Piper Jaffray Cos.*		3,511		174,005
Calamos Asset Management, Inc. — Class A		16,651		141,367
World Acceptance Corp.*		3,534		134,009
International. FCStone, Inc.*		4,404		117,719
First BanCorp*		36,846		107,591
OFG Bancorp		14,073		98,370
Capstead Mortgage Corp.		9,395		92,917
Infinity Property & Casualty Corp.		1,114		89,677
Encore Capital Group, Inc.*		2,987		76,885
Stewart Information Services Corp.		2,069		75,063
Navigators Group, Inc.*		842		70,619
Horace Mann Educators Corp.		2,215		70,193
American Equity Investment Life Holding Co.		3,705		62,244
Total Financial				1,485,572
Basic Materials - 6.4%
Century Aluminum Co.*		78,855		555,928
PH Glatfelter Co.		9,413		195,131
Chemours Co.		21,718		152,026
Materion Corp.		4,808		127,316
A. Schulman, Inc.		2,887		78,584
Clearwater Paper Corp.*		1,486		72,086
Innophos Holdings, Inc.		2,020		62,438
Stepan Co.		1,031		57,004
Intrepid Potash, Inc.*		34,414		38,200
Total Basic Materials				1,338,713
Communications - 3.6%
Comtech Telecommunications Corp.		5,515		128,885
Anixter International, Inc.*		2,424		126,315
Iridium Communications, Inc.*		13,860		109,078
Black Box Corp.		7,393		99,584
FTD Companies, Inc.*		3,491		91,639
Gannett Company, Inc.		4,269		64,632
Scholastic Corp.		1,510		56,429
Sizmek, Inc.*		13,840		40,136
Blucora, Inc.*		6,281		32,410
Total Communications				749,108
Technology - 3.1%
Insight Enterprises, Inc.*		6,797		194,666
Ciber, Inc.*		66,011		139,282
ManTech International Corp. — Class A		3,113		99,585
CACI International, Inc. — Class A*		635		67,755
Kulicke & Soffa Industries, Inc.*		5,410		61,241
Engility Holdings, Inc.*		2,852		53,504
Brooks Automation, Inc.		4,040		42,016
Total Technology				658,049
Total Common Stocks
(Cost $16,869,030)				20,823,303

	Face Amount
REPURCHASE AGREEMENTS††,1 - 1.1%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	171,451		171,451
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		58,301		58,301
Total Repurchase Agreements
(Cost $229,752)				229,752
Total Investments - 100.1%
(Cost $17,098,782)			$	21,053,055
Other Assets & Liabilities, net - (0.1)%				(22,630	)
Total Net Assets - 100.0%			$	21,030,425

*	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 Sector Classification in Other Information section.

54 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
S&P SMALLCAP 600® PURE VALUE FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	20,823,303	$	—	$	—	$	20,823,303
Repurchase Agreements		—		229,752		—		229,752
Total	$	20,823,303	$	229,752	$	—	$	21,053,055

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 55

S&P SMALLCAP 600^® PURE VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $16,869,030)	$	20,823,303
Repurchase agreements, at value (cost $229,752)		229,752
Total investments (cost $17,098,782)		21,053,055
Receivables:
Fund shares sold		48,894
Dividends		14,902
Interest		2
Total assets		21,116,853
Liabilities:
Payable for:
Securities purchased		33,975
Fund shares redeemed		18,822
Management fees		13,409
Distribution and service fees		5,607
Transfer agent and administrative fees		4,470
Portfolio accounting fees		1,788
Miscellaneous		8,357
Total liabilities		86,428
Commitments and contingent liabilities (Note 12)		—
Net assets	$	21,030,425
Net assets consist of:
Paid in capital	$	46,940,121
Accumulated net investment loss		(10,227	)
Accumulated net realized loss on investments		(29,853,742	)
Net unrealized appreciation on investments		3,954,273
Net assets	$	21,030,425
A-Class:
Net assets	$	1,112,800
Capital shares outstanding		48,055
Net asset value per share	$	23.16
Maximum offering price per share (Net asset value divided by 95.25%)	$	24.31
C-Class:
Net assets	$	1,846,627
Capital shares outstanding		91,050
Net asset value per share	$	20.28
H-Class:
Net assets	$	18,070,998
Capital shares outstanding		783,330
Net asset value per share	$	23.07

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $536)	$	187,222
Income from securities lending, net		7,211
Interest		103
Total investment income		194,536
Expenses:
Management fees		126,094
Transfer agent and administrative fees		42,031
Distribution and service fees:
A-Class		3,964
C-Class		22,958
H-Class		32,328
Portfolio accounting fees		16,812
Custodian fees		1,954
Trustees’ fees*		1,150
Line of credit fees		52
Miscellaneous		21,984
Total expenses		269,327
Net investment loss		(74,791	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(1,683,099	)
Net realized loss		(1,683,099	)
Net change in unrealized appreciation (depreciation) on:
Investments		635,355
Net change in unrealized appreciation (depreciation)		635,355
Net realized and unrealized loss		(1,047,744	)
Net decrease in net assets resulting from operations	$	(1,122,535	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

56 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

S&P SMALLCAP 600^® PURE VALUE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(74,791	)	$	(30,655	)
Net realized gain (loss) on investments		(1,683,099	)		2,268,375
Net change in unrealized appreciation (depreciation) on investments		635,355			(1,503,522	)
Net increase (decrease) in net assets resulting from operations		(1,122,535	)		734,198
Capital share transactions:
Proceeds from sale of shares
A-Class		2,492,235			3,277,688
C-Class		1,032,252			2,725,130
H-Class		83,674,345			108,245,422
Cost of shares redeemed
A-Class		(2,714,593	)		(2,703,495	)
C-Class		(1,957,269	)		(4,064,150	)
H-Class		(76,422,564	)		(120,076,906	)
Net increase (decrease) from capital share transactions		6,104,406			(12,596,311	)
Net increase (decrease) in net assets		4,981,871			(11,862,113	)
Net assets:
Beginning of year		16,048,554			27,910,667
End of year	$	21,030,425		$	16,048,554
Accumulated net investment loss at end of year	$	(10,227	)	$	—
Capital share activity:
Shares sold
A-Class		99,870			133,032
C-Class		48,000			123,385
H-Class		3,744,799			4,385,027
Shares redeemed
A-Class		(113,497	)		(110,967	)
C-Class		(92,281	)		(185,935	)
H-Class		(3,403,948	)		(4,818,402	)
Net increase (decrease) in shares		282,943			(473,860	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 57

S&P SMALLCAP 600^® 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	25.81		$	25.66		$	19.55		$	17.07		$	17.42
Income (loss) from investment operations:
Net investment income (loss)a		(.10	)		(.03	)		(.09	)		(.01	)		(.12	)
Net gain (loss) on investments (realized and unrealized)		(2.55	)		.18			6.20			2.49			(.23	)
Total from investment operations		(2.65	)		.15			6.11			2.48			(.35	)
Net asset value, end of period	$	23.16		$	25.81		$	25.66		$	19.55		$	17.07
Total Returnb		(10.27	%)		0.58	%		31.25	%		14.53	%		(2.01	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,113		$	1,592		$	1,016		$	1,551		$	961
Ratios to average net assets:
Net investment income (loss)		(0.42	%)		(0.10	%)		(0.39	%)		(0.08	%)		(0.71	%)
Total expenses		1.50	%		1.50	%		1.52	%		1.51	%		1.53	%
Portfolio turnover rate		417	%		579	%		658	%		655	%		744	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	22.78		$	22.81		$	17.51		$	15.40		$	15.85
Income (loss) from investment operations:
Net investment income (loss)a		(.24	)		(.19	)		(.22	)		(.13	)		(.20	)
Net gain (loss) on investments (realized and unrealized)		(2.26	)		.16			5.52			2.24			(.25	)
Total from investment operations		(2.50	)		(.03	)		5.30			2.11			(.45	)
Net asset value, end of period	$	20.28		$	22.78		$	22.81		$	17.51		$	15.40
Total Returnb		(10.97	%)		(0.13	%)		30.27	%		13.70	%		(2.84	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,847		$	3,082		$	4,514		$	3,932		$	1,955
Ratios to average net assets:
Net investment income (loss)		(1.17	%)		(0.84	%)		(1.10	%)		(0.84	%)		(1.39	%)
Total expenses		2.25	%		2.25	%		2.27	%		2.26	%		2.26	%
Portfolio turnover rate		417	%		579	%		658	%		655	%		744	%

58 | THE RYDEX FUNDS 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	25.71		$	25.55		$	19.47		$	17.00		$	17.38
Income (loss) from investment operations:
Net investment income (loss)a		(.07	)		(.01	)		(.06	)		(.06	)		(.11	)
Net gain (loss) on investments (realized and unrealized)		(2.57	)		.17			6.14			2.53			(.27	)
Total from investment operations		(2.64	)		.16			6.08			2.47			(.38	)
Net asset value, end of period	$	23.07		$	25.71		$	25.55		$	19.47		$	17.00
Total Returnb		(10.27	%)		0.63	%		31.23	%		14.53	%		(2.19	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	18,071		$	11,374		$	22,380		$	30,743		$	24,298
Ratios to average net assets:
Net investment income (loss)		(0.32	%)		(0.03	%)		(0.25	%)		(0.32	%)		(0.69	%)
Total expenses		1.50	%		1.50	%		1.53	%		1.51	%		1.49	%
Portfolio turnover rate		417	%		579	%		658	%		655	%		744	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 59

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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 STOXX^® Europe 50 Index (the “underlying index”).

For the one-year period ended March 31, 2016, Europe 1.25x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 125% of the daily price movement of the STOXX Europe 50 Index. Europe 1.25x Strategy Fund H-Class returned -15.64% while the STOXX Europe 50 Index returned -10.99% over the same period.

The sectors that contributed most to the performance of the underlying index were Consumer Staples and Information Technology. The sectors detracting the most from return were Financials and Health Care.

The stocks that contributed the most to the performance of the underlying index were British American Tobacco PLC, SAP SE, and Reckitt Benckiser Group PLC. Those that detracted the most from the performance of the underlying index were Novartis AG, HSBC Holdings plc, Total S.A., and Banco Santander SA.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the period, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

60 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
A-Class	March 31, 2004
C-Class	May 10, 2001
H-Class	May 8, 2000

INVESTMENT CONCENTRATION

At March 31, 2016, the investment diversification of the Fund by country was as follows:

Country	% of Common Stocks	Value
United Kingdom	35%	$1,126,115
Switzerland	21%	675,605
Germany	16%	521,724
France	12%	401,171
Spain	4%	143,021
Netherlands	3%	107,841
Denmark	3%	95,536
Other	6%	178,068
Total Securities	100%	$3,249,081

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	14.2%
Nestle S.A. ADR	3.8%
Novartis AG ADR	2.9%
Roche Holding AG ADR	2.8%
HSBC Holdings plc ADR	1.9%
Total S.A. ADR	1.8%
British American Tobacco plc ADR	1.7%
Novo Nordisk A/S ADR	1.6%
Royal Dutch Shell plc — Class A ADR	1.6%
GlaxoSmithKline plc ADR	1.6%
Top Ten Total	33.9%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-15.58%	-1.25%	-3.72%
A-Class Shares with sales charge†	-19.61%	-2.20%	-4.19%
C-Class Shares	-16.14%	-2.17%	-4.53%
C-Class Shares with CDSC‡	-16.97%	-2.17%	-4.53%
H-Class Shares	-15.64%	-1.43%	-3.81%
STOXX Europe 50 Index	-10.99%	0.59%	0.46%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The STOXX Europe 50 Index (Total Return/Dollars) is an unmanaged index and, unlike the Fund, has no management fee or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C–Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 61

SCHEDULE OF INVESTMENTS	March 31, 2016
EUROPE 1.25x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 55.8%
Consumer, Non-cyclical - 25.2%
Nestle S.A. ADR		2,958	$	220,696
Novartis AG ADR		2,329		168,712
Roche Holding AG ADR		5,236		160,352
British American Tobacco plc ADR		867		101,361
Novo Nordisk A/S ADR		1,763		95,536
GlaxoSmithKline plc ADR		2,250		91,238
Bayer AG ADR		765		89,735
Anheuser-Busch InBev S.A. ADR		713		88,883
Sanofi ADR		2,194		88,111
AstraZeneca plc ADR		2,317		65,247
Unilever N.V. — Class Y		1,454		64,965
Diageo plc ADR		584		62,996
Reckitt Benckiser Group plc ADR		3,082		60,161
Unilever plc ADR		1,217		54,984
Imperial Brands plc ADR		443		49,195
Total Consumer, Non-cyclical				1,462,172
Financial - 11.7%
HSBC Holdings plc ADR		3,624		112,779
Allianz SE ADR		4,256		69,373
Banco Santander S.A. ADR		13,536		59,017
Lloyds Banking Group plc ADR		14,722		58,152
UBS Group AG		3,343		53,556
BNP Paribas S.A. ADR		2,071		52,106
AXA S.A. ADR		1,930		45,162
Prudential plc ADR		1,192		44,342
ING Groep N.V. ADR		3,594		42,876
Banco Bilbao Vizcaya Argentaria S.A. ADR		5,892		38,416
Barclays plc ADR		3,858		33,256
Zurich Insurance Group AG ADR		1,391		29,753
Credit Suisse Group AG ADR*		1,719		24,289
Deutsche Bank AG		1,276		21,615
Total Financial				684,692
Energy - 5.4%
Total S.A. ADR		2,264		102,831
Royal Dutch Shell plc — Class A ADR		1,951		94,526
BP plc ADR		2,808		84,745
Eni SpA ADR		1,179		35,629
Total Energy				317,731
Communications - 3.9%
Vodafone Group plc ADR		2,446		78,394
Deutsche Telekom AG ADR		2,942		52,692
BT Group plc ADR		1,607		51,553
Telefonica S.A. ADR		4,096		45,588
Total Communications				228,227
Industrial - 2.6%
Siemens AG ADR		743		78,609
ABB Ltd. ADR*		2,047		39,753
Schneider Electric SE ADR		2,713		34,130
Total Industrial				152,492
Consumer, Cyclical - 2.5%
Daimler AG ADR		924		72,035
LVMH Moet Hennessy Louis Vuitton SE ADR		1,262		43,122
Cie Financiere Richemont S.A. ADR		4,856		32,050
Total Consumer, Cyclical				147,207
Basic Materials - 2.3%
BASF SE ADR		853		64,402
Air Liquide S.A. ADR		1,597		35,709
Rio Tinto plc ADR		1,116		31,549
Total Basic Materials				131,660
Technology - 1.3%
SAP SE ADR		911		73,263
Utilities - 0.9%
National Grid plc ADR		723		51,637
Total Common Stocks
(Cost $2,998,619)				3,249,081
MUTUAL FUNDS† - 14.2%
Guggenheim Strategy Fund I1		33,421		829,184
Total Mutual Funds
(Cost $829,055)				829,184
	Face Amount
REPURCHASE AGREEMENTS††,2 - 20.9%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	911,452		911,452
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		309,932		309,932
Total Repurchase Agreements
(Cost $1,221,384)				1,221,384
Total Investments - 90.9%
(Cost $5,049,058)			$	5,299,649
Other Assets & Liabilities, net - 9.1%				532,561
Total Net Assets - 100.0%			$	5,832,210

62 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
EUROPE 1.25x STRATEGY FUND

	Contracts		Unrealized Gain (Loss)
CURRENCY FUTURES CONTRACTS PURCHASED†
June 2016 Euro FX Futures Contracts (Aggregate Value of Contracts $3,991,050)		28	$	58,789
EQUITY FUTURES CONTRACTS PURCHASED††
June 2016 STOXX 50 Index Futures Contracts (Aggregate Value of Contracts $3,947,932)		127	$	(40,265	)

*	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	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	3,249,081	$	—	$	—	$	—	$	—	$	3,249,081
Currency Futures Contracts		—		58,789		—		—		—		58,789
Mutual Funds		829,184		—		—		—		—		829,184
Repurchase Agreements		—		—		1,221,384		—		—		1,221,384
Total	$	4,078,265	$	58,789	$	1,221,384	$	—	$	—	$	5,358,438
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	—	$	—	$	40,265	$	—	$	40,265

* Other financial instruments include futures contracts which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 63

EUROPE 1.25x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $2,998,619)	$	3,249,081
Investments in affiliated issuers, at value (cost $829,055)		829,184
Repurchase agreements, at value (cost $1,221,384)		1,221,384
Total investments (cost $5,049,058)		5,299,649
Segregated cash with broker		449,467
Cash		7,677
Receivables:
Fund shares sold		1,187,012
Dividends		26,190
Foreign taxes reclaim		8,397
Swap settlement		1,009
Interest		8
Total assets		6,979,409
Liabilities:
Foreign currency, at value (cost $7,575)		7,693
Payable for:
Securities purchased		1,001,144
Fund shares redeemed		88,778
Variation margin		38,622
Management fees		4,602
Distribution and service fees		1,564
Transfer agent and administrative fees		1,278
Portfolio accounting fees		511
Miscellaneous		3,007
Total liabilities		1,147,199
Commitments and contingent liabilities (Note 12)		—
Net assets	$	5,832,210
Net assets consist of:
Paid in capital	$	21,254,181
Undistributed net investment income		35,360
Accumulated net realized loss on investments		(15,726,430	)
Net unrealized appreciation on investments		269,099
Net assets	$	5,832,210
A-Class:
Net assets	$	858,836
Capital shares outstanding		65,979
Net asset value per share	$	13.02
Maximum offering price per share (Net asset value divided by 95.25%)	$	13.67
C-Class:
Net assets	$	440,431
Capital shares outstanding		38,511
Net asset value per share	$	11.44
H-Class:
Net assets	$	4,532,943
Capital shares outstanding		351,473
Net asset value per share	$	12.90

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $11,560)	$	173,369
Dividends from securities of affiliated issuers		16,414
Interest		2,183
Income from securities lending, net		183
Total investment income		192,149
Expenses:
Management fees		95,605
Transfer agent and administrative fees		26,557
Distribution and service fees:
A-Class		3,417
C-Class		8,666
H-Class		20,974
Portfolio accounting fees		10,623
Custodian fees		1,315
Trustees’ fees*		793
Line of credit fees		36
Miscellaneous		14,824
Total expenses		182,810
Net investment income		9,339
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(1,154,143	)
Investments in affiliated issuers		(866	)
Futures contracts		(2,768,096	)
Foreign currency		26,021
Net realized loss		(3,897,084	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(335,471	)
Investments in affiliated issuers		129
Futures contracts		179,558
Foreign currency		(848	)
Net change in unrealized appreciation (depreciation)		(156,632	)
Net realized and unrealized loss		(4,053,716	)
Net decrease in net assets resulting from operations	$	(4,044,377	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

64 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

EUROPE 1.25x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	9,339		$	62,790
Net realized gain (loss) on investments		(3,897,084	)		201,415
Net change in unrealized appreciation (depreciation) on investments		(156,632	)		(1,066,510	)
Net decrease in net assets resulting from operations		(4,044,377	)		(802,305	)
Distributions to shareholders from:
Net investment income
A-Class		(11,155	)		(3,176	)
C-Class		(4,305	)		(1,621	)
H-Class		(47,957	)		(21,638	)
Total distributions to shareholders		(63,417	)		(26,435	)
Capital share transactions:
Proceeds from sale of shares
A-Class		15,260,055			10,994,698
C-Class		10,931,446			18,931,297
H-Class		215,847,170			200,800,044
Distributions reinvested
A-Class		10,089			2,063
C-Class		3,535			1,530
H-Class		47,645			21,551
Cost of shares redeemed
A-Class		(15,266,742	)		(12,260,495	)
C-Class		(11,364,439	)		(18,280,475	)
H-Class		(217,436,663	)		(202,112,879	)
Net decrease from capital share transactions		(1,967,904	)		(1,902,666	)
Net decrease in net assets		(6,075,698	)		(2,731,406	)
Net assets:
Beginning of year		11,907,908			14,639,314
End of year	$	5,832,210		$	11,907,908
Undistributed net investment income at end of year	$	35,360		$	63,417
Capital share activity:
Shares sold
A-Class		993,478			706,168
C-Class		810,875			1,263,133
H-Class		14,291,238			12,265,910
Shares issued from reinvestment of distributions
A-Class		688			126
C-Class		274			105
H-Class		3,279			1,328
Shares redeemed
A-Class		(1,003,095	)		(778,025	)
C-Class		(846,950	)		(1,223,396	)
H-Class		(14,573,480	)		(12,306,127	)
Net decrease in shares		(323,693	)		(70,778	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 65

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	15.55		$	17.40		$	14.16		$	12.57		$	14.06
Income (loss) from investment operations:
Net investment income (loss)a		(.01	)		.05			.16			(.03	)		.10
Net gain (loss) on investments (realized and unrealized)		(2.40	)		(1.85	)		3.08			1.65			(1.59	)
Total from investment operations		(2.41	)		(1.80	)		3.24			1.62			(1.49	)
Less distributions from:
Net investment income		(.12	)		(.05	)		—			(.03	)		—
Total distributions		(.12	)		(.05	)		—			(.03	)		—
Net asset value, end of period	$	13.02		$	15.55		$	17.40		$	14.16		$	12.57
Total Returnb		(15.58	%)		(10.33	%)		22.88	%		12.92	%		(10.60	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	859		$	1,165		$	2,551		$	3,916		$	694
Ratios to average net assets:
Net investment income (loss)		(0.08	%)		0.33	%		1.00	%		(0.23	%)		0.77	%
Total expensesc		1.67	%		1.72	%		1.72	%		1.67	%		1.67	%
Portfolio turnover rate		920	%		608	%		654	%		903	%		318	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	13.77		$	15.52		$	12.89		$	11.53		$	12.97
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.08	)		(.07	)		(.10	)		—	d
Net gain (loss) on investments (realized and unrealized)		(2.12	)		(1.62	)		2.70			1.49			(1.44	)
Total from investment operations		(2.21	)		(1.70	)		2.63			1.39			(1.44	)
Less distributions from:
Net investment income		(.12	)		(.05	)		—			(.03	)		—
Total distributions		(.12	)		(.05	)		—			(.03	)		—
Net asset value, end of period	$	11.44		$	13.77		$	15.52		$	12.89		$	11.53
Total Returnb		(16.14	%)		(10.94	%)		20.40	%		12.09	%		(11.10	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	440		$	1,023		$	535		$	402		$	439
Ratios to average net assets:
Net investment income (loss)		(0.64	%)		(0.50	%)		(0.48	%)		(0.83	%)		0.03	%
Total expensesc		2.42	%		2.48	%		2.47	%		2.42	%		2.43	%
Portfolio turnover rate		920	%		608	%		654	%		903	%		318	%

66 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	15.42		$	17.26		$	14.20		$	12.59		$	14.06
Income (loss) from investment operations:
Net investment income (loss)a		.03			.10			.03			(.02	)		.16
Net gain (loss) on investments (realized and unrealized)		(2.43	)		(1.89	)		3.03			1.66			(1.63	)
Total from investment operations		(2.40	)		(1.79	)		3.06			1.64			(1.47	)
Less distributions from:
Net investment income		(.12	)		(.05	)		—			(.03	)		—
Total distributions		(.12	)		(.05	)		—			(.03	)		—
Net asset value, end of period	$	12.90		$	15.42		$	17.26		$	14.20		$	12.59
Total Returnb		(15.64	%)		(10.36	%)		21.55	%		13.06	%		(10.46	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,533		$	9,719		$	11,553		$	10,752		$	7,759
Ratios to average net assets:
Net investment income (loss)		0.19	%		0.62	%		0.19	%		(0.18	%)		1.22	%
Total expensesc		1.66	%		1.72	%		1.71	%		1.67	%		1.68	%
Portfolio turnover rate		920	%		608	%		654	%		903	%		318	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Net investment income is less than $0.01 per share.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 67

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, Japan 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the fair value of the Nikkei-225 Stock Average Index. Japan 2x Strategy Fund H-Class returned -15.36%, while the Nikkei-225 Stock Average Index returned -6.96% over the same time period.

The sectors that contributed the most to the performance of the underlying index were Consumer Staples and Health Care. The Industrials sector detracted the most from performance, followed by Consumer Discretionary.

Stocks that contributed the most to the return of the underlying index were KDDI Corp., Terumo Corp., and Shionogi & Company Ltd. Those that detracted the most from the performance of the underlying index were Fast Retailing Company Ltd., Fanuc Corp., and SoftBank Group Corp.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the period, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

68 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

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.

Cumulative Fund Performance*

Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	26.0%
Total	26.0%
“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (02/22/08)
A-Class Shares	-15.41%	5.67%	-2.89%
A-Class Shares with sales charge†	-19.43%	4.64%	-3.47%
C-Class Shares	-16.06%	5.03%	-3.53%
C-Class Shares with CDSC‡	-16.90%	5.03%	-3.53%
H-Class Shares	-15.36%	5.73%	-2.83%
Nikkei-225 Stock Average Index	-6.96%	4.81%	2.06%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Nikkei-225 Stock Average Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 69

SCHEDULE OF INVESTMENTS	March 31, 2016
JAPAN 2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 26.0%
Guggenheim Strategy Fund I1		29,499	$	731,860
Total Mutual Funds
(Cost $731,741)				731,860

	Face Amount
REPURCHASE AGREEMENTS††,2 - 52.5%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	1,105,266		1,105,266
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		375,838		375,838
Total Repurchase Agreements
(Cost $1,481,104)				1,481,104
Total Investments - 78.5%
(Cost $2,212,845)			$	2,212,964
Other Assets & Liabilities, net - 21.5%				607,228
Total Net Assets - 100.0%			$	2,820,192

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 Nikkei-225 (CME) Index Futures Contracts (Aggregate Value of Contracts $5,629,675)		67	$	51,535
CURRENCY FUTURES CONTRACTS PURCHASED†
June 2016 Japanese Yen Futures Contracts (Aggregate Value of Contracts $5,675,025)		51	$	41,205

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Currency Futures Contracts	$	—	$	41,205	$	—	$	—	$	—	$	41,205
Equity Futures Contracts		—		51,535		—		—		—		51,535
Mutual Funds		731,860		—		—		—		—		731,860
Repurchase Agreements		—		—		1,481,104		—		—		1,481,104
Total	$	731,860	$	92,740	$	1,481,104	$	—	$	—	$	2,305,704

* Other financial instruments include futures contracts, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

70 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

JAPAN 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in affiliated issuers, at value (cost $731,741)	$	731,860
Repurchase agreements, at value (cost $1,481,104)		1,481,104
Total investments (cost $2,212,845)		2,212,964
Segregated cash with broker		374,660
Receivables:
Securities sold		300,000
Fund shares sold		21,030
Dividends		1,334
Swap settlement		1,225
Interest		9
Total assets		2,911,222
Liabilities:
Payable for:
Variation margin		82,981
Management fees		1,830
Securities purchased		1,334
Distribution and service fees		646
Transfer agent and administrative fees		610
Portfolio accounting fees		244
Fund shares redeemed		108
Miscellaneous		3,277
Total liabilities		91,030
Commitments and contingent liabilities (Note 12)		—
Net assets	$	2,820,192
Net assets consist of:
Paid in capital	$	7,006,477
Accumulated net investment loss		(6,851	)
Accumulated net realized loss on investments		(4,272,293	)
Net unrealized appreciation on investments		92,859
Net assets	$	2,820,192
A-Class:
Net assets	$	351,119
Capital shares outstanding		17,822
Net asset value per share	$	19.70
Maximum offering price per share (Net asset value divided by 95.25%)	$	20.68
C-Class:
Net assets	$	56,092
Capital shares outstanding		3,006
Net asset value per share	$	18.66
H-Class:
Net assets	$	2,412,981
Capital shares outstanding		121,939
Net asset value per share	$	19.79

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	23,239
Interest		3,236
Total investment income		26,475
Expenses:
Management fees		63,037
Transfer agent and administrative fees		21,012
Distribution and service fees:
A-Class		3,675
C-Class		1,855
H-Class		16,873
Portfolio accounting fees		8,405
Custodian fees		971
Trustees’ fees*		547
Line of credit fees		55
Miscellaneous		10,023
Total expenses		126,453
Net investment loss		(99,978	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(196	)
Investments in affiliated issuers		347
Futures contracts		(2,415,306	)
Net realized loss		(2,415,155	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(2,831	)
Investments in affiliated issuers		119
Futures contracts		79,168
Net change in unrealized appreciation (depreciation)		76,456
Net realized and unrealized loss		(2,338,699	)
Net decrease in net assets resulting from operations	$	(2,438,677	)

* 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 ANNUAL REPORT | 71

JAPAN 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(99,978	)	$	(68,249	)
Net realized loss on investments		(2,415,155	)		(181,521	)
Net change in unrealized appreciation (depreciation) on investments		76,456			(249,399	)
Net decrease in net assets resulting from operations		(2,438,677	)		(499,169	)
Capital share transactions:
Proceeds from sale of shares
A-Class		20,504,500			14,492,697
C-Class		6,950,127			10,475,739
H-Class		183,725,129			76,998,182
Cost of shares redeemed
A-Class		(20,500,320	)		(14,473,442	)
C-Class		(7,166,305	)		(10,254,244	)
H-Class		(195,879,916	)		(62,946,467	)
Net increase (decrease) from capital share transactions		(12,366,785	)		14,292,465
Net increase (decrease) in net assets		(14,805,462	)		13,793,296
Net assets:
Beginning of year		17,625,654			3,832,358
End of year	$	2,820,192		$	17,625,654
Accumulated net investment loss at end of year	$	(6,851	)	$	—
Capital share activity:
Shares sold
A-Class		877,539			736,387
C-Class		313,705			545,198
H-Class		7,987,209			3,746,308
Shares redeemed
A-Class		(878,900	)		(749,545	)
C-Class		(324,966	)		(536,530	)
H-Class		(8,586,498	)		(3,185,268	)
Net increase (decrease) in shares		(611,911	)		556,550

72 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

JAPAN 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.29		$	19.31		$	17.39		$	15.45		$	14.95
Income (loss) from investment operations:
Net investment income (loss)a		(.28	)		(.25	)		(.31	)		(.20	)		(.22	)
Net gain (loss) on investments (realized and unrealized)		(3.31	)		4.23			2.23			2.14			.72
Total from investment operations		(3.59	)		3.98			1.92			1.94			.50
Net asset value, end of period	$	19.70		$	23.29		$	19.31		$	17.39		$	15.45
Total Returnb		(15.41	%)		20.61	%		11.04	%		12.56	%		3.34	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	351		$	447		$	624		$	2,025		$	1,428
Ratios to average net assets:
Net investment income (loss)		(1.22	%)		(1.27	%)		(1.50	%)		(1.40	%)		(1.49	%)
Total expensesc		1.51	%		1.54	%		1.52	%		1.51	%		1.51	%
Portfolio turnover rate		543	%		405	%		—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	22.23		$	18.49		$	16.76		$	14.99		$	14.60
Income (loss) from investment operations:
Net investment income (loss)a		(.42	)		(.39	)		(.43	)		(.29	)		(.31	)
Net gain (loss) on investments (realized and unrealized)		(3.15	)		4.13			2.16			2.06			.70
Total from investment operations		(3.57	)		3.74			1.73			1.77			.39
Net asset value, end of period	$	18.66		$	22.23		$	18.49		$	16.76		$	14.99
Total Returnb		(16.06	%)		20.23	%		10.32	%		11.81	%		2.67	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	56		$	317		$	104		$	246		$	140
Ratios to average net assets:
Net investment income (loss)		(1.91	%)		(2.04	%)		(2.25	%)		(2.15	%)		(2.23	%)
Total expensesc		2.24	%		2.30	%		2.27	%		2.25	%		2.26	%
Portfolio turnover rate		543	%		405	%		—			—			—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 73

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.38		$	19.38		$	17.44		$	15.49		$	14.98
Income (loss) from investment operations:
Net investment income (loss)a		(.27	)		(.26	)		(.30	)		(.20	)		(.22	)
Net gain (loss) on investments (realized and unrealized)		(3.32	)		4.26			2.24			2.15			.73
Total from investment operations		(3.59	)		4.00			1.94			1.95			.51
Net asset value, end of period	$	19.79		$	23.38		$	19.38		$	17.44		$	15.49
Total Returnb		(15.36	%)		20.64	%		11.12	%		12.59	%		3.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,413		$	16,862		$	3,104		$	9,020		$	4,574
Ratios to average net assets:
Net investment income (loss)		(1.17	%)		(1.28	%)		(1.50	%)		(1.40	%)		(1.48	%)
Total expensesc		1.49	%		1.54	%		1.52	%		1.50	%		1.51	%
Portfolio turnover rate		543	%		405	%		—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.

74 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Strengthening Dollar 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the U.S. Dollar Index. Strengthening Dollar 2x Strategy Fund H-Class returned -11.00%, compared with a return of -3.83% for its benchmark, the U.S. Dollar Index.

The currencies that contributed most to performance of the underlying index for the period were the British pound and the Canadian dollar. The euro and the Japanese yen detracted the most from performance of the underlying index for the period.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives used during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the period, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

THE RYDEX FUNDS ANNUAL REPORT | 75

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

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.

Cumulative Fund Performance*

Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	29.4%
Guggenheim Strategy Fund II	29.0%
Total	58.4%
“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-11.01%	4.20%	-2.37%
A-Class Shares with sales charge†	-15.24%	3.20%	-2.84%
C-Class Shares	-11.69%	3.41%	-3.05%
C-Class Shares with CDSC‡	-12.53%	3.41%	-3.05%
H-Class Shares	-11.00%	4.22%	-2.39%
U.S. Dollar Index	-3.83%	4.51%	0.53%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The U.S. Dollar Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

76 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
STRENGTHENING DOLLAR 2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 58.4%
Guggenheim Strategy Fund I1		171,547	$	4,256,077
Guggenheim Strategy Fund II1		170,059		4,198,744
Total Mutual Funds
(Cost $8,473,133)				8,454,821

	Face Amount
FEDERAL AGENCY DISCOUNT NOTES†† - 20.8%
Federal Home Loan Bank2
0.36% due 06/01/16	$	3,000,000		2,998,425
Total Federal Agency Discount Notes
(Cost $2,998,170)				2,998,425
REPURCHASE AGREEMENTS††,3 - 17.2%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		1,442,266		1,442,266
HSBC Group issued 03/31/16 at 0.21% due 04/01/164		1,037,916		1,037,916
Total Repurchase Agreements
(Cost $2,480,182)				2,480,182
Total Investments - 96.4%
(Cost $13,951,485)			$	13,933,428
Other Assets & Liabilities, net - 3.6%				513,075
Total Net Assets - 100.0%			$	14,446,503

	Contracts		Unrealized Loss
CURRENCY FUTURES CONTRACTS PURCHASED†
June 2016 U.S. Dollar Index Futures Contracts (Aggregate Value of Contracts $21,669,125)		229	$	(580,808	)

	Units
OTC CURRENCY INDEX SWAP AGREEMENTS††
Goldman Sachs International June 2016 U.S. Dollar Index Swap 0.63%5, Terminating 06/13/16 (Notional Value $7,219,815)		76,320	$	(128,960	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	Repurchase Agreements — See Note 5.
4	All or a portion of this security is pledged as currency index swap collateral at March 31, 2016.
5	Total Return based on U.S. Dollar Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 77

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
STRENGTHENING DOLLAR 2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Federal Agency Discount Notes	$	—	$	—	$	2,998,425	$	—	$	—	$	2,998,425
Mutual Funds		8,454,821		—		—		—		—		8,454,821
Repurchase Agreements		—		—		2,480,182		—		—		2,480,182
Total	$	8,454,821	$	—	$	5,478,607	$	—	$	—	$	13,933,428
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Currency Futures Contracts	$	—	$	580,808	$	—	$	—	$	—	$	580,808
Currency Index Swap Agreements		—		—		—		128,960		—		128,960
Total	$	—	$	580,808	$	—	$	128,960	$	—	$	709,768

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

78 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

STRENGTHENING DOLLAR 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $2,998,170)	$	2,998,425
Investments in affiliated issuers, at value (cost $8,473,133)		8,454,821
Repurchase agreements, at value (cost $2,480,182)		2,480,182
Total investments (cost $13,951,485)		13,933,428
Segregated cash with broker		464,000
Receivables:
Fund shares sold		359,272
Dividends		18,221
Interest		15
Total assets		14,774,936
Liabilities:
Unrealized depreciation on swap agreements		128,960
Payable for:
Fund shares redeemed		58,109
Variation margin		45,022
Licensing fees		37,846
Securities purchased		18,221
Management fees		13,558
Swap settlement		8,658
Distribution and service fees		4,984
Transfer agent and administrative fees		3,766
Portfolio accounting fees		1,507
Miscellaneous		7,802
Total liabilities		328,433
Commitments and contingent liabilities (Note 12)		—
Net assets	$	14,446,503
Net assets consist of:
Paid in capital	$	36,434,484
Accumulated net investment loss		(67,896	)
Accumulated net realized loss on investments		(21,192,260	)
Net unrealized depreciation on investments		(727,825	)
Net assets	$	14,446,503
A-Class:
Net assets	$	1,899,719
Capital shares outstanding		39,844
Net asset value per share	$	47.68
Maximum offering price per share (Net asset value divided by 95.25%)	$	50.06
C-Class:
Net assets	$	1,938,410
Capital shares outstanding		44,457
Net asset value per share	$	43.60
H-Class:
Net assets	$	10,608,374
Capital shares outstanding		223,376
Net asset value per share	$	47.49

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	378,498
Interest		35,298
Total investment income		413,796
Expenses:
Management fees		639,403
Transfer agent and administrative fees		177,612
Distribution and service fees:
A-Class		12,572
C-Class		22,898
H-Class		159,315
Portfolio accounting fees		71,044
Registration fees		56,733
Custodian fees		8,832
Trustees’ fees*		5,738
Line of credit fees		1,731
Miscellaneous		63,072
Total expenses		1,218,950
Net investment loss		(805,154	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		1,973
Investments in affiliated issuers		(117,067	)
Swap agreements		(281,468	)
Futures contracts		(21,983,602	)
Net realized loss		(22,380,164	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(35,934	)
Investments in affiliated issuers		(51,954	)
Swap agreements		(2,093,416	)
Futures contracts		2,571,552
Net change in unrealized appreciation (depreciation)		390,248
Net realized and unrealized loss		(21,989,916	)
Net decrease in net assets resulting from operations	$	(22,795,070	)

* 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 ANNUAL REPORT | 79

STRENGTHENING DOLLAR 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(805,154	)	$	(1,079,027	)
Net realized gain (loss) on investments		(22,380,164	)		42,278,489
Net change in unrealized appreciation (depreciation) on investments		390,248			(1,273,849	)
Net increase (decrease) in net assets resulting from operations		(22,795,070	)		39,925,613
Distributions to shareholders from:
Net realized gains
A-Class		(113,496	)		—
C-Class		(105,875	)		—
H-Class		(6,764,514	)		—
Total distributions to shareholders		(6,983,885	)		—
Capital share transactions:
Proceeds from sale of shares
A-Class		36,241,604			67,660,509
C-Class		11,646,199			13,335,647
H-Class		582,298,261			803,295,701
Distributions reinvested
A-Class		112,352			—
C-Class		97,269			—
H-Class		6,753,618			—
Cost of shares redeemed
A-Class		(48,102,984	)		(61,334,808	)
C-Class		(13,148,692	)		(12,659,892	)
H-Class		(709,370,706	)		(687,933,691	)
Net increase (decrease) from capital share transactions		(133,473,079	)		122,363,466
Net increase (decrease) in net assets		(163,252,034	)		162,289,079
Net assets:
Beginning of year		177,698,537			15,409,458
End of year	$	14,446,503		$	177,698,537
Accumulated net investment loss at end of year	$	(67,896	)	$	(455,964	)
Capital share activity:
Shares sold
A-Class		685,083			1,496,935
C-Class		238,619			313,093
H-Class		10,937,592			17,612,624
Shares issued from reinvestment of distributions
A-Class		2,098			—
C-Class		1,981			—
H-Class		126,662			—
Shares redeemed
A-Class		(930,136	)		(1,306,603	)
C-Class		(270,556	)		(297,401	)
H-Class		(13,687,898	)		(15,021,156	)
Net increase (decrease) in shares		(2,896,555	)		2,797,492

80 | THE RYDEX FUNDS 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	55.75		$	38.36		$	42.75		$	40.35		$	40.39
Income (loss) from investment operations:
Net investment income (loss)a		(.58	)		(.56	)		(.69	)		(.63	)		(.66	)
Net gain (loss) on investments (realized and unrealized)		(5.32	)		17.95			(3.70	)		3.03			.62
Total from investment operations		(5.90	)		17.39			(4.39	)		2.40			(.04	)
Less distributions from:
Net realized gains		(2.17	)		—			—			—			—
Total distributions		(2.17	)		—			—			—			—
Net asset value, end of period	$	47.68		$	55.75		$	38.36		$	42.75		$	40.35
Total Returnb		(11.01	%)		45.33	%		(10.27	%)		5.95	%		(0.07	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,900		$	15,765		$	3,547		$	10,427		$	6,875
Ratios to average net assets:
Net investment income (loss)		(1.10	%)		(1.19	%)		(1.72	%)		(1.53	%)		(1.62	%)
Total expensesc		1.69	%		1.68	%		1.74	%		1.66	%		1.68	%
Portfolio turnover rate		376	%		299	%		—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	51.55		$	35.74		$	40.15		$	38.14		$	38.48
Income (loss) from investment operations:
Net investment income (loss)a		(.85	)		(.81	)		(.94	)		(.90	)		(.90	)
Net gain (loss) on investments (realized and unrealized)		(4.93	)		16.62			(3.47	)		2.91			.56
Total from investment operations		(5.78	)		15.81			(4.41	)		2.01			(.34	)
Less distributions from:
Net realized gains		(2.17	)		—			—			—			—
Total distributions		(2.17	)		—			—			—			—
Net asset value, end of period	$	43.60		$	51.55		$	35.74		$	40.15		$	38.14
Total Returnb		(11.69	%)		44.24	%		(10.96	%)		5.27	%		(0.94	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,938		$	3,836		$	2,099		$	3,530		$	4,091
Ratios to average net assets:
Net investment income (loss)		(1.75	%)		(1.96	%)		(2.48	%)		(2.29	%)		(2.36	%)
Total expensesc		2.45	%		2.44	%		2.50	%		2.42	%		2.44	%
Portfolio turnover rate		376	%		299	%		—			—			—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 81

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d			Year Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	55.53		$	38.21		$	42.60		$	40.17		$	40.20
Income (loss) from investment operations:
Net investment income (loss)a		(.59	)		(.56	)		(.69	)		(.63	)		(.66	)
Net gain (loss) on investments (realized and unrealized)		(5.28	)		17.88			(3.70	)		3.06			.63
Total from investment operations		(5.87	)		17.32			(4.39	)		2.43			(.03	)
Less distributions from:
Net realized gains		(2.17	)		—			—			—			—
Total distributions		(2.17	)		—			—			—			—
Net asset value, end of period	$	47.49		$	55.53		$	38.21		$	42.60		$	40.17
Total Returnb		(11.00	%)		45.33	%		(10.31	%)		6.05	%		(0.07	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,608		$	158,098		$	9,764		$	11,979		$	21,982
Ratios to average net assets:
Net investment income (loss)		(1.12	%)		(1.19	%)		(1.72	%)		(1.53	%)		(1.62	%)
Total expensesc		1.70	%		1.68	%		1.74	%		1.66	%		1.69	%
Portfolio turnover rate		376	%		299	%		—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Reverse share split — Per share amounts for the periods presented through February 7, 2014 have been restated to reflect a 1:3 reverse share split effective February 7, 2014.

82 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Weakening Dollar 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of -200% of the daily price movement of the U.S. Dollar Index. Weakening Dollar 2x Strategy Fund H-Class returned 6.54%, compared with a return of -3.83% for its benchmark, the U.S. Dollar Index.

The currencies that contributed most to performance of the underlying index for the period were the British pound and the Canadian dollar. The euro and the Japanese yen detracted the most from performance of the underlying index for the period.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives used during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the period, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

THE RYDEX FUNDS ANNUAL REPORT | 83

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

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.

Cumulative Fund Performance*

Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund II	22.6%
Guggenheim Strategy Fund I	22.3%
Total	44.9%
“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	6.54%	-9.21%	-1.95%
A-Class Shares with sales charge†	1.46%	-10.08%	-2.43%
C-Class Shares	5.74%	-9.88%	-2.69%
C-Class Shares with CDSC‡	4.74%	-9.88%	-2.69%
H-Class Shares	6.54%	-9.20%	-1.95%
U.S. Dollar Index	-3.83%	4.51%	0.53%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The U.S. Dollar Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

84 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
WEAKENING DOLLAR 2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 44.9%
Guggenheim Strategy Fund II1		50,172	$	1,238,749
Guggenheim Strategy Fund I1		49,486		1,227,757
Total Mutual Funds
(Cost $2,464,999)				2,466,506

	Face Amount
REPURCHASE AGREEMENTS††,2 - 43.0%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	1,581,872		1,581,872
HSBC Group issued 03/31/16 at 0.21% due 04/01/163		782,280		782,280
Total Repurchase Agreements
(Cost $2,364,152)				2,364,152
Total Investments - 87.9%
(Cost $4,829,151)			$	4,830,658
Other Assets & Liabilities, net - 12.1%				664,191
Total Net Assets - 100.0%			$	5,494,849

	Contracts		Unrealized Gain
CURRENCY FUTURES CONTRACTS SOLD SHORT†
June 2016 U.S. Dollar Index Futures Contracts (Aggregate Value of Contracts $9,557,125)		101	$	250,159

	Units
OTC CURRENCY INDEX SWAP AGREEMENTS SOLD SHORT††
Goldman Sachs International June 2016 U.S. Dollar Index Swap 0.63%4, Terminating 06/13/16 (Notional Value $1,451,210)		15,341	$	10,893

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as currency index swap collateral at March 31, 2016.
4	Total Return based on U.S. Dollar Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Currency Futures Contracts	$	—	$	250,159	$	—	$	—	$	—	$	250,159
Currency Index Swap Agreements		—		—		—		10,893		—		10,893
Mutual Funds		2,466,506		—		—		—		—		2,466,506
Repurchase Agreements		—		—		2,364,152		—		—		2,364,152
Total	$	2,466,506	$	250,159	$	2,364,152	$	10,893	$	—	$	5,091,710

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 85

WEAKENING DOLLAR 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in affiliated issuers, at value (cost $2,464,999)	$	2,466,506
Repurchase agreements, at value (cost $2,364,152)		2,364,152
Total investments (cost $4,829,151)		4,830,658
Segregated cash with broker		202,000
Unrealized appreciation on swap agreements		10,893
Receivables:
Fund shares sold		580,706
Variation margin		19,594
Dividends		6,024
Interest		14
Other		1,472
Total assets		5,651,361
Liabilities:
Payable for:
Fund shares redeemed		138,117
Securities purchased		6,024
Management fees		5,159
Swap settlement		3,426
Distribution and service fees		1,780
Transfer agent and administrative fees		1,433
Portfolio accounting fees		573
Total liabilities		156,512
Commitments and contingent liabilities (Note 12)		—
Net assets	$	5,494,849
Net assets consist of:
Paid in capital	$	24,341,012
Accumulated net investment loss		(13,865	)
Accumulated net realized loss on investments		(19,094,857	)
Net unrealized appreciation on investments		262,559
Net assets	$	5,494,849
A-Class:
Net assets	$	1,313,867
Capital shares outstanding		104,671
Net asset value per share	$	12.55
Maximum offering price per share (Net asset value divided by 95.25%)	$	13.18
C-Class:
Net assets	$	535,511
Capital shares outstanding		46,857
Net asset value per share	$	11.43
H-Class:
Net assets	$	3,645,471
Capital shares outstanding		290,734
Net asset value per share	$	12.54

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of affiliated issuers	$	45,882
Interest		4,249
Total investment income		50,131
Expenses:
Management fees		69,983
Transfer agent and administrative fees		19,440
Distribution and service fees:
A-Class		2,792
C-Class		4,977
H-Class		15,403
Portfolio accounting fees		7,776
Custodian fees		907
Trustees’ fees*		479
Miscellaneous		14,028
Total expenses		135,785
Net investment loss		(85,654	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in affiliated issuers		(24,267	)
Swap agreements		(57,248	)
Futures contracts		(1,205,417	)
Net realized loss		(1,286,932	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(621	)
Investments in affiliated issuers		1,507
Swap agreements		3,994
Futures contracts		197,547
Net change in unrealized appreciation (depreciation)		202,427
Net realized and unrealized loss		(1,084,505	)
Net decrease in net assets resulting from operations	$	(1,170,159	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

86 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

WEAKENING DOLLAR 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(85,654	)	$	(87,166	)
Net realized loss on investments		(1,286,932	)		(2,630,844	)
Net change in unrealized appreciation (depreciation) on investments		202,427			110,616
Net decrease in net assets resulting from operations		(1,170,159	)		(2,607,394	)
Capital share transactions:
Proceeds from sale of shares
A-Class		8,961,442			13,033,004
C-Class		5,359,174			1,510,966
H-Class		95,822,345			51,409,264
Cost of shares redeemed
A-Class		(8,222,299	)		(13,313,243	)
C-Class		(4,968,724	)		(1,961,174	)
H-Class		(94,608,486	)		(51,148,755	)
Net increase (decrease) from capital share transactions		2,343,452			(469,938	)
Net increase (decrease) in net assets		1,173,293			(3,077,332	)
Net assets:
Beginning of year		4,321,556			7,398,888
End of year	$	5,494,849		$	4,321,556
(Accumulated net investment loss)/Undistributed net investment income at end of year	$	(13,865	)	$	1
Capital share activity:
Shares sold
A-Class		738,819			799,412
C-Class		466,299			119,140
H-Class		7,895,392			3,382,831
Shares redeemed
A-Class		(677,291	)		(819,501	)
C-Class		(434,477	)		(153,809	)
H-Class		(7,914,945	)		(3,378,114	)
Net increase (decrease) in shares		73,797			(50,041	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 87

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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	11.78		$	17.86		$	16.95		$	18.95		$	20.34
Income (loss) from investment operations:
Net investment income (loss)a		(.14	)		(.20	)		(.30	)		(.28	)		(.33	)
Net gain (loss) on investments (realized and unrealized)		.91			(5.88	)		1.21			(1.72	)		(1.06	)
Total from investment operations		.77			(6.08	)		.91			(2.00	)		(1.39	)
Net asset value, end of period	$	12.55		$	11.78		$	17.86		$	16.95		$	18.95
Total Returnb		6.54	%		(34.04	%)		5.37	%		(10.55	%)		(6.83	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,314		$	508		$	1,129		$	1,346		$	2,881
Ratios to average net assets:
Net investment income (loss)		(1.13	%)		(1.23	%)		(1.73	%)		(1.53	%)		(1.62	%)
Total expensesc		1.70	%		1.70	%		1.75	%		1.65	%		1.70	%
Portfolio turnover rate		699	%		219	%		—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	10.81		$	16.51		$	15.79		$	17.79		$	19.23
Income (loss) from investment operations:
Net investment income (loss)a		(.20	)		(.29	)		(.40	)		(.38	)		(.44	)
Net gain (loss) on investments (realized and unrealized)		.82			(5.41	)		1.12			(1.62	)		(1.00	)
Total from investment operations		.62			(5.70	)		.72			(2.00	)		(1.44	)
Net asset value, end of period	$	11.43		$	10.81		$	16.51		$	15.79		$	17.79
Total Returnb		5.74	%		(34.52	%)		4.56	%		(11.24	%)		(7.49	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	536		$	163		$	821		$	1,687		$	2,826
Ratios to average net assets:
Net investment income (loss)		(1.81	%)		(1.94	%)		(2.49	%)		(2.27	%)		(2.36	%)
Total expensesc		2.45	%		2.46	%		2.52	%		2.39	%		2.44	%
Portfolio turnover rate		699	%		219	%		—			—			—

88 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	11.77		$	17.83		$	16.93		$	18.93		$	20.32
Income (loss) from investment operations:
Net investment income (loss)a		(.13	)		(.19	)		(.30	)		(.27	)		(.32	)
Net gain (loss) on investments (realized and unrealized)		.90			(5.87	)		1.20			(1.73	)		(1.07	)
Total from investment operations		.77			(6.06	)		.90			(2.00	)		(1.39	)
Net asset value, end of period	$	12.54		$	11.77		$	17.83		$	16.93		$	18.93
Total Returnb		6.54	%		(33.99	%)		5.32	%		(10.57	%)		(6.84	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,645		$	3,651		$	5,449		$	10,058		$	13,551
Ratios to average net assets:
Net investment income (loss)		(1.04	%)		(1.20	%)		(1.74	%)		(1.52	%)		(1.61	%)
Total expensesc		1.70	%		1.70	%		1.76	%		1.64	%		1.69	%
Portfolio turnover rate		699	%		219	%		—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 89

NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Organization

The Rydex Series Funds (the “Trust”), a Delaware statutory trust, is registered with the SEC under the Investment Company Act of 1940 (”1940 Act”), as an 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 seven separate classes of shares: Investor Class shares, A-Class shares, C-Class shares, H-Class shares, P-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. At March 31, 2016, the Trust consisted of fifty-three funds.

This report covers the S&P 500^® Pure Growth Fund, S&P 500^® Pure Value Fund, S&P MidCap 400^® Pure Growth Fund, S&P MidCap 400^® Pure Value Fund, S&P SmallCap 600^® Pure Growth Fund, S&P SmallCap 600^® Pure Value Fund, Europe 1.25x Strategy Fund, Japan 2x Strategy Fund, Strengthening Dollar 2x Strategy Fund and Weakening Dollar 2x Strategy Fund (the “Funds”), each a non-diversified investment company. Only A-Class, C-Class and H-Class shares had been issued by the Funds.

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.

Guggenheim Investments (“GI”) provides advisory services, and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI, RFS and GFD are affiliated entities.

Significant Accounting Policies

The Funds operate as investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

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.

The NAV of each Class of the Funds is calculated by dividing the market value of the Fund’s securities and other assets, less all liabilities, attributable to the Class by the number of outstanding shares of the Class.

A. The Board of Trustees of the Funds (the “Board”) has adopted policies and procedures for the valuation of the Funds’ investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Board has delegated to a valuation committee, consisting of representatives from Guggenheim’s investment management, fund administration, legal and compliance departments (the “Valuation Committee”), the day-to-day responsibility for implementing the Valuation Procedures, including, under most circumstances, the responsibility for determining the fair value of the Funds’ securities or other assets.

Valuations of the Funds’ securities are supplied primarily by pricing services appointed pursuant to the processes set forth in the Valuation Procedures. The Valuation Committee convenes monthly, or more frequently as needed and will review the valuation of all assets which have been fair valued for reasonableness. The Funds’ officers, through the Valuation Committee and consistent with the monitoring and review

90 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

responsibilities set forth in the Valuation Procedures, regularly review procedures used by, and valuations provided by, the pricing services.

If the pricing service cannot or does not provide a valuation for a particular investment or such valuation is deemed unreliable, such investment is fair valued by the Valuation Committee.

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, which may not necessarily represent the last sale price. If there has been no sale on such exchange or NASDAQ on a given day, the security is valued at the closing bid price on that day.

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 (“CEFs”) are valued at the last quoted sales price.

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 spreads, 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 are valued at amortized cost, provided such amount approximates market value.

Repurchase agreements are valued at amortized cost, provided such amounts approximate market value.

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 currency index 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 broker quote.

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. Valuations in accordance with these methods are intended to reflect each security’s (or asset’s) “fair value.” Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to: (i) the type of security, (ii) the initial cost of the security, (iii) the existence of any contractual restrictions on the security’s disposition, (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies, (v) quotations or evaluated prices from broker-dealers and/or pricing services, (vi) information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), (vii) an analysis of the company’s financial statements, and (viii) an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold (e.g. the existence of pending merger activity, public offerings or tender offers that might affect the value of the security).

In connection with futures contracts and other derivative investments, such factors may include 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.

B. 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.

C. 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

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NOTES TO FINANCIAL STATEMENTS (continued)

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.

D. 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.

E. 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.

F. 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. Dividend income from REITs is recorded based on the income included in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts.

G. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Dividends are reinvested in additional shares unless shareholders request payment in cash. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.

H. 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 and service fees 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.

I. The Funds may leave cash overnight in their cash account with the custodian. 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, which was 0.25% at March 31, 2016.

J. Under the Funds’ organizational documents, their Trustees and Officers are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, 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 and Derivatives

As part of their investment strategy, the Funds utilize a variety of derivative instruments. 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. Valuation and accounting treatment of these instruments can be found under Significant Accounting Policies in Note 1 of these Notes to Financial Statements.

Derivatives

Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more other assets, such as securities, currencies, commodities or indices. Derivative instruments may

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be used to increase investment flexibility (including to maintain cash reserves while maintaining exposure to certain other assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. Derivative instruments may also be used to mitigate certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. U.S. GAAP requires disclosures to enable investors to better understand how and why a Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund’s financial position and results of operations.

The Funds may utilize derivatives for the following purposes:

Index Exposure: the use of an instrument to obtain exposure to a listed or other type of index.

Leverage: gaining total exposure to equities or other assets on the long and short sides at greater than 100% of invested capital.

Liquidity: the ability to buy or sell exposure with little price/market impact.

For any Fund whose investment strategy consistently involves applying leverage, the value of the Fund’s shares will tend to increase or decrease more than the value of any increase or decrease in the underlying index or other asset. In addition, because an investment in derivative instruments generally requires a small investment relative to the amount of investment exposure assumed, an opportunity for increased net income is created; but, at the same time, leverage risk will increase. The Fund’s use of leverage, through borrowings or instruments such as derivatives, may cause the Fund to be more volatile and riskier than if they had not been leveraged.

Futures

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, 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 a Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default. Cash deposits are shown as segregated cash with broker on the Statements of Assets and Liabilities; securities held as collateral are noted on the Schedules of Investments.

The following table represents the Funds’ use and volume of futures on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Europe 1.25x Strategy Fund	Index exposure, Leverage, Liquidity	$	9,460,107	$	—
Japan 2x Strategy Fund	Index exposure, Leverage, Liquidity		18,264,378		—
Strengthening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity		50,274,106		—
Weakening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		14,372,613

Swaps

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 Fund utilizing OTC swaps 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 if the underlying asset declines in value. Certain standardized swaps are subject to mandatory central clearing. Central clearing generally reduces counterparty credit risk and increases liquidity, but central clearing does not make swap transactions risk-free. 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.

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NOTES TO FINANCIAL STATEMENTS (continued)

Currency swaps enable the Funds to gain exposure to currencies in a market without actually possessing a given currency, or to hedge a position. Currency swaps involves the exchange of the principal and interest in one currency for the principal and interest in another currency. As in other types of OTC swaps, the Funds may be at risk due to the counterparty’s inability to perform.

The following table represents the Funds’ use and volume of currency swaps on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Strengthening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity	$	14,047,229	$	—
Weakening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		1,971,699

Derivative Investment Holdings Categorized by Risk Exposure

The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of March 31, 2016:

Derivative Investment Type	Asset Derivatives	Liability Derivatives
Equity/Currency contracts	Variation margin	Variation margin
	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 March 31, 2016:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Futures Currency Contracts*		Swaps Currency Contracts		Total Value at March 31, 2016
Europe 1.25x Strategy Fund	$	—	$	58,789	$	—	$	58,789
Japan 2x Strategy Fund		51,535		41,205		—		92,740
Weakening Dollar 2x Strategy Fund		—		250,159		10,893		261,052

Liability Derivative Investments Value
Fund	Futures Equity Contracts*		Futures Currency Contracts*		Swaps Currency Contracts		Total Value at March 31, 2016
Europe 1.25x Strategy Fund	$	40,265	$	—	$	—	$	40,265
Strengthening Dollar 2x Strategy Fund		—		580,808		128,960		709,768

* 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 year ended March 31, 2016:

Derivative Investment Type	Location of Gain (Loss) on Derivatives
Equity/Currency 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

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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 year ended March 31, 2016:

Realized Gain (Loss) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts			Futures Currency Contracts			Swaps Currency Contracts			Total
Europe 1.25x Strategy Fund	$	(4,464,756	)	$	1,696,660		$	—		$	(2,768,096	)
Japan 2x Strategy Fund		(2,343,855	)		(71,451	)		—			(2,415,306	)
Strengthening Dollar 2x Strategy Fund		—			(21,983,602	)		(281,468	)		(22,265,070	)
Weakening Dollar 2x Strategy Fund		—			(1,205,417	)		(57,248	)		(1,262,665	)

Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts		Futures Currency Contracts			Swaps Currency Contracts			Total
Europe 1.25x Strategy Fund	$	51,443	$	128,115		$	—		$	179,558
Japan 2x Strategy Fund		114,552		(35,384	)		—			79,168
Strengthening Dollar 2x Strategy Fund		—		2,571,552			(2,093,416	)		478,136
Weakening Dollar 2x Strategy Fund		—		197,547			3,994			201,541

In conjunction with the use of derivative instruments, 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 the Funds.

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 their annualized rates below, based on the average daily net assets of the Funds:

Fund	Management Fees (as a % of Net Assets)
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%

RFS provides transfer agent and administrative services to the Funds for fees calculated at the annualized rate of 0.25% based on the average daily net assets of each Fund.

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NOTES TO FINANCIAL STATEMENTS (continued)

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 Plan applicable to A-Class shares and H-Class shares for which GFD 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 GFD at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GFD, in turn, will pay the Service Provider out of its fees. GFD 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 a shareholder’s financial adviser for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GFD for paying the shareholder’s financial adviser an ongoing sales commission. GFD advances the first year’s service and distribution fees to the financial adviser. GFD retains the service and distribution fees on accounts with no authorized dealer of record.

For the year ended March 31, 2016, GFD retained sales charges of $349,121 relating to sales of A-Class shares of the Trust.

Certain trustees and officers of the Trust are also officers of GI, RFS and GFD.

4. Fair Value Measurement

In accordance with U.S. GAAP, fair value is defined as the price that the Funds 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. U.S. GAAP establishes a three-tier fair value hierarchy based on the types of inputs used to value assets and liabilities and requires corresponding disclosure. The hierarchy and the corresponding inputs are summarized below:

Level 1 —  quoted prices in active markets for identical assets or liabilities.

Level 2 — significant other observable inputs (for example quoted prices for securities that are similar based on characteristics such as interest rates, prepayment speeds, credit risk, etc.).

Level 3 — significant unobservable inputs based on the best information available under the circumstances, to the extent observable inputs are not available, which may include assumptions.

The types of inputs available depend on a variety of factors, such as the type of security and the characteristics of the markets in which it trades, if any. Fair valuation determinations that rely on fewer or no observable inputs require greater judgment. Accordingly, fair value determinations for Level 3 securities require the greatest amount of judgment.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The suitability of the techniques and sources employed to determine fair valuation are regularly monitored and subject to change.

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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 March 31, 2016, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement		Face Value		Repurchase Price	Collateral		Par Value		Fair Value
Royal Bank of Canada					U.S. TIP Bonds
0.23%					0.13% - 0.38%
Due 04/01/16	$	364,541,761	$	364,544,090	04/15/17 - 07/15/23	$	353,293,600	$	371,832,617
HSBC Group					U.S. Treasury Strips
0.21%					0.00%
Due 04/01/16		182,287,605		182,288,668	05/15/43		392,890,600		185,933,378

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 adviser, 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

During the year ended March 31, 2016, certain Funds lent their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations are net of rebates paid to borrowers and earnings on cash collateral investments shared with the lending agent. As of March 31, 2016, all Funds had ceased participation in securities lending.

7. Offsetting

In the normal course of business, the Funds enter into 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.

In order to better define their contractual rights and to secure rights that will help the Funds mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs OTC derivatives, including foreign exchange contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Funds and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as segregated cash with broker/receivable for variation margin, or payable for swap settlement/variation margin. Generally, the amount of collateral due from or to a counterparty must

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NOTES TO FINANCIAL STATEMENTS (continued)

exceed a minimum transfer amount threshold (e.g., $300,000) before a transfer is required to be made. To the extent amounts due to the Funds from their counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty nonperformance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe to be of good standing and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.

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
Fund	Instrument	Gross Amounts of Recognized Assets1		Gross Amounts Offset In the Statements of Assets and Liabilities		Net Amount of Assets Presented on the Statements of Assets and Liabilities		Financial Instruments		Cash Collateral Received		Net Amount
Weakening Dollar 2x Strategy Fund	Swap currency contracts	$	10,893	$	—	$	10,893	$	—	$	—	$	10,893

								Gross Amounts Not Offset in the Statements of Assets and Liabilities
Fund	Instrument	Gross Amounts of Recognized Liabilities1		Gross Amounts Offset In the Statements of Assets and Liabilities		Net Amount of Liabilities Presented on the Statements of Assets and Liabilities		Financial Instruments		Cash Collateral Pledged		Net Amount
Strengthening Dollar 2x Strategy Fund	Swap currency contracts	$	128,960	$	—	$	128,960	$	128,960	$	—	$	—

¹ Exchange-traded futures are excluded from these reported amounts.

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. The Funds’ federal tax returns are subject to examination by the Internal Revenue Service for a period of three years after they are filed.

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Tax basis capital losses in excess of capital gains are carried forward to offset future net capital gains. For the year ended March 31, 2016, the following capital loss carryforward amounts were used:

Fund	Amount
S&P SmallCap 600® Pure Growth Fund	$	107,730

The tax character of distributions paid during the year ended March 31, 2016 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
S&P 500® Pure Growth Fund	$	—	$	5,021,680	$	5,021,680
S&P 500® Pure Value Fund		2,879,737		—		2,879,737
S&P MidCap 400® Pure Growth Fund		—		9,656,364		9,656,364
S&P MidCap 400® Pure Value Fund		28,715		—		28,715
S&P SmallCap 600® Pure Growth Fund		—		—		—
S&P SmallCap 600® Pure Value Fund		—		—		—
Europe 1.25x Strategy Fund		63,417		—		63,417
Japan 2x Strategy Fund		—		—		—
Strengthening Dollar 2x Strategy Fund		—		6,983,885		6,983,885
Weakening Dollar 2x Strategy Fund		—		—		—

The tax character of distributions paid during the year ended March 31, 2015 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
S&P 500® Pure Growth Fund	$	4,463,896	$	—	$	4,463,896
S&P 500® Pure Value Fund		2,272,512		1,746,579		4,019,091
S&P MidCap 400® Pure Growth Fund		15,520,167		17,684,250		33,204,417
S&P MidCap 400® Pure Value Fund		18,945		—		18,945
S&P SmallCap 600® Pure Growth Fund		—		—		—
S&P SmallCap 600® Pure Value Fund		—		—		—
Europe 1.25x Strategy Fund		26,435		—		26,435
Japan 2x Strategy Fund		—		—		—
Strengthening Dollar 2x Strategy Fund		—		—		—
Weakening Dollar 2x Strategy Fund		—		—		—

Note: For federal income tax purposes, short-term capital gain distributions are treated as ordinary income distributions.

The tax character of distributable earnings/(accumulated losses) at March 31, 2016 was as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ (Depreciation)			Capital Loss Carryforward & Other Losses
S&P 500® Pure Growth Fund	$	—	$	—	$	16,521,895		$	(3,081,996	)
S&P 500® Pure Value Fund		792,718		—		3,005,107			(275,296	)
S&P MidCap 400® Pure Growth Fund		—		—		5,840,078			(1,354,380	)
S&P MidCap 400® Pure Value Fund		52,548		—		2,086,169			(2,043,648	)
S&P SmallCap 600® Pure Growth Fund		—		—		913,777			(3,172,739	)
S&P SmallCap 600® Pure Value Fund		—		—		(380,811	)		(25,528,885	)
Europe 1.25x Strategy Fund		35,360		—		(367,438	)		(15,089,893	)
Japan 2x Strategy Fund		—		—		(2,687	)		(4,183,598	)
Strengthening Dollar 2x Strategy Fund		—		—		(22,833	)		(21,965,148	)
Weakening Dollar 2x Strategy Fund		—		—		(1,412	)		(18,844,751	)

Capital Loss Carryforward amounts may be limited due to Federal income tax regulations.

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For Federal income tax purposes, capital loss carryforwards represent realized losses of the Funds that may be carried forward and applied against future capital gains. For taxable years beginning on or before December 22, 2010, such capital losses may be carried forward for a maximum of eight years. Under the RIC Modernization Act of 2010, the 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 taxable years must be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to 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. As of March 31, 2016, capital loss carryforwards for the Funds were as follows:

	Expires in			Expires in			Expires in			Unlimited						Total Capital Loss
Fund	2017			2018			2019			Short-Term			Long-Term			Carryforward
S&P 500® Pure Growth Fund	$	—		$	—		$	—		$	(3,031,799	)	$	—		$	(3,031,799	)
S&P 500® Pure Value Fund		—			—			—			(275,296	)		—			(275,296	)
S&P MidCap 400® Pure Growth Fund		—			—			—			—			—			—
S&P MidCap 400® Pure Value Fund		—			—			(1,389,782	)		(653,866	)		—			(2,043,648	)
S&P SmallCap 600® Pure Growth Fund		(24,099	)		(56,524	)		—			—			—			(80,623	)
S&P SmallCap 600® Pure Value Fund		—			—			(25,498,182	)		(20,476	)		—			(25,518,658	)
Europe 1.25x Strategy Fund		(8,826,483	)		—			(2,098,062	)		(2,159,810	)		(2,005,538	)		(15,089,893	)
Japan 2x Strategy Fund		(973,570	)		—			—			(1,255,744	)		(1,947,433	)		(4,176,747	)
Strengthening Dollar 2x Strategy Fund		—			—			—			(8,822,690	)		(13,074,562	)		(21,897,252	)
Weakening Dollar 2x Strategy Fund		(6,635,880	)		—			(3,988,430	)		(3,301,177	)		(4,905,399	)		(18,830,886	)

Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are typically due to qualified late year losses, losses deferred due to wash sales, utilization of earnings and profits on shareholder redemptions, and the mark-to-market on futures contracts for tax purposes. Additional differences may result from tax treatment of net investment losses and foreign currency. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise. These reclassifications have no effect on the net assets or NAV per share.

On the Statements of Assets and Liabilities the following adjustments were made for permanent book/tax differences:

Fund	Paid In Capital			Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
S&P 500® Pure Growth Fund	$	(1,060,529	)	$	1,060,529	$	—
S&P 500® Pure Value Fund		1			—		(1	)
S&P MidCap 400® Pure Growth Fund		2,727,740			1,207,184		(3,934,924	)
S&P MidCap 400® Pure Value Fund		—			—		—
S&P SmallCap 600® Pure Growth Fund		(279,021	)		279,022		(1	)
S&P SmallCap 600® Pure Value Fund		(64,564	)		64,564		—
Europe 1.25x Strategy Fund		—			26,021		(26,021	)
Japan 2x Strategy Fund		(93,127	)		93,127		—
Strengthening Dollar 2x Strategy Fund		(1,193,222	)		1,193,222		—
Weakening Dollar 2x Strategy Fund		(71,789	)		71,788		1

100 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2016, 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:

Fund	Tax Cost		Tax Unrealized Gain		Tax Unrealized Loss			Net Unrealized Gain (Loss)
S&P 500® Pure Growth Fund	$	138,502,793	$	17,811,309	$	(1,289,414	)	$	16,521,895
S&P 500® Pure Value Fund		83,129,608		3,143,252		(138,145	)		3,005,107
S&P MidCap 400® Pure Growth Fund		138,458,733		12,716,533		(6,876,455	)		5,840,078
S&P MidCap 400® Pure Value Fund		53,149,220		2,749,238		(663,069	)		2,086,169
S&P SmallCap 600® Pure Growth Fund		29,158,841		1,772,270		(858,493	)		913,777
S&P SmallCap 600® Pure Value Fund		21,433,866		—		(380,811	)		(380,811	)
Europe 1.25x Strategy Fund		5,667,070		—		(367,421	)		(367,421	)
Japan 2x Strategy Fund		2,215,651		—		(2,687	)		(2,687	)
Strengthening Dollar 2x Strategy Fund		13,956,261		246		(23,079	)		(22,833	)
Weakening Dollar 2x Strategy Fund		4,832,070		—		(1,412	)		(1,412	)

Pursuant to Federal income tax regulations applicable to regulated investment companies, the Funds have elected to treat net capital losses and certain ordinary losses realized between November 1 and March 31 of each year as occurring on the first day of the following tax year. The Funds have also elected to treat certain ordinary losses realized between January 1 and March 31 of each year as occurring on the first day of the following tax year. For the year ended March 31, 2016, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2016:

Fund	Ordinary			Capital
S&P 500® Pure Growth Fund	$	(50,197	)	$	—
S&P MidCap 400® Pure Growth Fund		(267,173	)		(1,087,207	)
S&P SmallCap 600® Pure Growth Fund		—			(3,092,116	)
S&P Small Cap 600® Pure Value Fund		(10,227	)		—
Japan 2x Strategy Fund		(6,851	)		—
Strengthening Dollar 2x Strategy Fund		(67,896	)		—
Weakening Dollar 2x Strategy Fund		(13,865	)		—

9. Securities Transactions

For the year ended March 31, 2016, the cost of purchases and proceeds from sales of investment securities, excluding government securities, short-term investments and derivatives, were as follows:

Fund	Purchases		Sales
S&P 500® Pure Growth Fund	$	478,735,878	$	465,337,303
S&P 500® Pure Value Fund		287,925,055		271,436,788
S&P MidCap 400® Pure Growth Fund		256,383,581		284,842,422
S&P MidCap 400® Pure Value Fund		124,289,496		84,109,609
S&P SmallCap 600® Pure Growth Fund		155,423,985		176,453,758
S&P SmallCap 600® Pure Value Fund		78,237,656		72,238,720
Europe 1.25x Strategy Fund		54,287,113		53,697,814
Japan 2x Strategy Fund		12,373,239		13,050,000
Strengthening Dollar 2x Strategy Fund		105,628,416		148,800,000
Weakening Dollar 2x Strategy Fund		24,145,882		23,000,000

THE RYDEX FUNDS ANNUAL REPORT | 101

NOTES TO FINANCIAL STATEMENTS (continued)

The Funds are permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by a Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each transaction is effected at the current market price to save costs, where permissible. For the year ended March 31, 2016, the Funds engaged in purchases and sales of securities, pursuant to Rule 17a-7 of the 1940 Act, as follows:

Fund	Purchases		Sales		Received Gain (Loss)
S&P 500® Pure Growth Fund	$	49,342,735	$	65,760,514	$	(1,580,450	)
S&P 500® Pure Value Fund		33,289,806		40,253,809		(320,049	)
S&P MidCap 400® Pure Growth Fund		10,901,832		12,675,914		(282,096	)
S&P MidCap 400® Pure Value Fund		8,403,326		9,801,497		(121,890	)
S&P SmallCap 600® Pure Growth Fund		15,896,036		16,359,716		(788,779	)
S&P SmallCap 600® Pure Value Fund		4,146,618		7,209,585		231,078
Europe 1.25x Strategy Fund		14,841,615		13,541,995		77,977
Strengthening Dollar 2x Strategy Fund		4,980,988		—		—

10. Affiliated Transactions

Investments representing 5% or more of the outstanding voting shares of a portfolio company of a fund, or control of or by, or common control under GI, result in that portfolio company being considered an affiliated company of such fund, as defined in the 1940 Act.

The Funds may invest in the Guggenheim Strategy Funds Trust consisting of Guggenheim Strategy Fund I, Guggenheim Strategy Fund II, Guggenheim Strategy Fund III, and Guggenheim Variable Insurance Strategy Fund III (collectively, the “Cash Management Funds”), open-end management investment companies managed by GI. The Cash Management Funds, which launched on March 11, 2014, are offered as cash management options only to mutual funds, trusts, and other accounts managed by GI and/or its affiliates, and are not available to the public. The Cash Management Funds pay no investment management fees. The Cash Management Funds’ annual report on Form N-CSR dated September 30, 2015 is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at http://www.sec.gov/Archives/edgar/data/1601445/000089180415000857/gug63224-ncsr.htm.

Transactions during the year ended March 31, 2016, in which the portfolio company is an “affiliated person”, were as follows:

Affiliated issuers by Fund	Value 03/31/15		Additions		Reductions			Value 03/31/16		Shares 03/31/16		Investment Income		Realized Gain (Loss)
Europe 1.25x Strategy Fund
Guggenheim Strategy Fund I	$	—	$	18,130,048	$	(17,300,000	)	$	829,184		33,421	$	16,414	$	(866	)
Japan 2x Strategy Fund
Guggenheim Strategy Fund I		—		13,784,226		(13,050,000	)		731,860		29,499		23,239		347
Strengthening Dollar 2x Strategy Fund
Guggenheim Strategy Fund I		—		93,363,397		(89,050,000	)		4,256,077		171,547		165,323		(16,235	)
Guggenheim Strategy Fund II		25,333,425		38,763,210		(59,750,000	)		4,198,744		170,059		213,175		(100,832	)
		25,333,425		132,126,607		(148,800,000	)		8,454,821				378,498		(117,067	)
Weakening Dollar 2x Strategy Fund
Guggenheim Strategy Fund I		—		15,335,774		(14,100,000	)		1,227,757		49,486		19,987		(8,421	)
Guggenheim Strategy Fund II		—		10,154,114		(8,900,000	)		1,238,749		50,172		25,895		(15,846	)
		—		25,489,888		(23,000,000	)		2,466,506				45,882		(24,267	)

102 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 12, 2016. 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 year ended March 31, 2016. The Funds did not have any borrowings outstanding under this agreement at March 31, 2016.

The average daily balances borrowed for the year ended March 31, 2016, were as follows:

Fund	Average Daily Balance
S&P 500® Pure Growth Fund	$	115,021
S&P 500® Pure Value Fund		18,822
S&P MidCap 400® Pure Growth Fund		75,275
S&P MidCap 400® Pure Value Fund		3,695
S&P SmallCap 600® Pure Growth Fund		30,763
S&P SmallCap 600® Pure Value Fund		4,115
Europe 1.25x Strategy Fund		2,839
Japan 2x Strategy Fund		4,317
Strengthening Dollar 2x Strategy Fund		136,241

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 “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 May 23, 2014, the defendants filed motions to dismiss the FitzSimons action, including a global motion to dismiss Count I, which is the claim brought against former Tribune shareholders for intentional fraudulent conveyance under U.S. federal law. The Court has not yet issued a decision on any of these motions.

THE RYDEX FUNDS ANNUAL REPORT | 103

NOTES TO FINANCIAL STATEMENTS (concluded)

On March 29, 2016, the U.S. Court of Appeals for the Second Circuit issued its opinion on the appeal of the SLCFC actions. The appeals court affirmed the district court’s dismissal of those lawsuits, but on different grounds than the district court. The appeals court held that while the plaintiffs have standing under the U.S. Bankruptcy Code (which was the basis for the district court’s dismissal), their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments.

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.) (the “Creditor Trust action”).

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.

On April 7, 2014, the plaintiff filed a Third Amended Complaint. In the related action entitled Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adversary Proceeding No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust action”), the plaintiff also filed a Second Amended Complaint that alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On May 8, 2014, the plaintiff in the Litigation Trust action filed a motion to certify a defendant class generally comprised of all former Lyondell shareholders that received proceeds in exchange for their shares in the 2007 merger transaction.

On July 30, 2014, the defendants filed a motion to dismiss all three lawsuits. The Court held an oral argument on the motions to dismiss and on the motion for class certification on January 14 and January 15, 2015. On September 15, 2015, the Bankruptcy Court denied the motion for class certification without prejudice to the plaintiff’s right to file a renewed motion. On November 18, 2015, the Bankruptcy Court granted the defendants’ motion to dismiss the Litigation Trust action and denied their motion to dismiss the Creditor Trust and Reichman actions. The Litigation Trust action is now over, but the plaintiff has appealed the dismissal to the U.S. District Court for the Southern District of New York. On May 4, 2016, the defendants filed a motion to dismiss, or in the alternative, for a stay of, the Creditor Trust and Reichman actions in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. The Bankruptcy Court has not yet issued a decision on the motion. Discovery has commenced, and will continue, in the Creditor Trust and Reichman actions while the May 4 motion is pending.

These lawsuits do 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; Long Short Equity Fund f/k/a 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.

104 | THE RYDEX FUNDS ANNUAL REPORT

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
of Rydex Series Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of S&P 500^® Pure Growth Fund, S&P 500^® Pure Value Fund, S&P MidCap 400^® Pure Growth Fund, S&P MidCap 400^® Pure Value Fund, S&P SmallCap 600^® Pure Growth Fund, S&P SmallCap 600^® Pure Value Fund, Europe 1.25x Strategy Fund, Japan 2x Strategy Fund, Strengthening Dollar 2x Strategy Fund and Weakening Dollar 2x Strategy Fund (ten of the series constituting the Rydex Series Funds) (the “Funds”) as of March 31, 2016, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2016, by correspondence with the custodian, transfer agent, and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the above listed Funds (ten of the series constituting the Rydex Series Funds) at March 31, 2016, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

McLean, Virginia
May 25, 2016

THE RYDEX FUNDS ANNUAL REPORT | 105

OTHER INFORMATION (Unaudited)

Tax Information

This information is being provided as required by the Internal Revenue Code. Amounts shown may differ from those elsewhere in the report because of differences in tax and financial reporting practice.

Of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
S&P 500® Pure Value Fund	13.82%
S&P MidCap 400® Pure Value Fund	100.00%

Additionally, the following amounts of taxable ordinary income dividends paid during the fiscal year qualified for the lower income tax rate available to individuals under the Jobs and Growth Tax Relief Reconciliation Act of 2003:

Fund	% Qualifying
S&P 500® Pure Value Fund	37.91%
S&P MidCap 400® Pure Value Fund	100.00%
Europe 1.25x Strategy Fund	32.03%

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify as interest related dividends and qualified short-term capital gains as permitted by IRC Section 871(k)(1) and IRC Section 871(k)(2), respectively:

Fund	% Qualifying	% STCG Qualifying
S&P 500® Pure Value Fund	0.00%	100.00%

With respect to the taxable year ended March 31, 2016, the Funds hereby designate as capital gain dividends the amounts listed below, or, if subsequently determined to be different, the net capital gain of such year:

Fund	From long-term capital gains, subject to the 15% rate gains category:		From long-term capital gains, using proceeds from shareholder redemptions:
S&P 500® Pure Growth Fund	$	5,021,680	$	—
S&P MidCap 400® Pure Growth Fund		9,656,364		3,290,945
Strengthening Dollar 2x Strategy Fund		6,983,885		—

For the fiscal year ending March 31, 2016, Europe 1.25x Strategy Fund earned gross income derived from foreign sources totaling $18,972. The Fund paid foreign taxes totaling $11,158 for the fiscal year and may pass these taxes through to shareholders, who may be able to claim them as a foreign tax credit. A final determination will be made at the end of the calendar year. The Fund will notify shareholders of amounts for use in preparing 2016 income tax forms in January 2017.

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 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 800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.

106 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)(continued)

Sector Classification

Information in the “Schedule of Investments” is categorized by sectors using sector-level Classifications defined by the Bloomberg Industry Classification System, a widely recognized industry classification system provider. Each Fund’s registration statement has investment policies relating to concentration in specific sectors/industries. For purposes of these investment policies, the Funds usually classify sectors/industries based on industry-level Classifications used by widely recognized industry classification system providers such as Bloomberg Industry Classification System, Global Industry Classification Standards and Barclays Global Classification Scheme.

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 800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 800.820.0888.

Board Considerations in Approving the Investment Advisory Agreement for the Dow Jones Industrial Average^® Fund

The Board of Trustees (the “Board”) of Rydex Series Funds (the “Trust”), including the Trustees who are not “interested persons,” as defined by the Investment Company Act of 1940, of the Trust (“Independent Trustees”), attended an in-person meeting held on August 18, 2015 (the “August Meeting”), called for the purpose of, among other things, the consideration of, and voting on, the approval of the investment advisory agreement (the “DJIA Investment Advisory Agreement”) between the Trust and Security Investors, LLC (the “Advisor”) applicable to the Dow Jones Industrial Average^® Fund, a new series of the Trust (the “DJIA Fund”). The Board unanimously approved the DJIA Investment Advisory Agreement based on the Board’s review of qualitative and quantitative information provided by the Advisor.

Prior to reaching the conclusion to approve the DJIA Investment Advisory Agreement, the Independent Trustees requested and obtained from the Advisor such information as the Independent Trustees deemed reasonably necessary to evaluate the DJIA Investment Advisory Agreement. In addition, the Board received a memorandum from fund counsel regarding the responsibilities of the Board with respect to the approval of investment advisory agreements and participated in question and answer sessions with representatives of the Advisor. The Trustees also carefully considered information that they had received about the Advisor throughout the year as part of their regular oversight of the other series of the Trust. At the August Meeting, the Board obtained and reviewed a wide variety of information, including certain comparative information regarding the DJIA Fund’s proposed fees and expenses relative to the fees and expenses of other comparable funds (the “FUSE reports”). The Independent Trustees carefully evaluated this information, met in executive session outside the presence of fund management, and were advised by independent legal counsel with respect to their deliberations.

At the August Meeting, the Board, including the Independent Trustees, evaluated a number of factors, including among others: (a) the nature, extent and quality of the investment advisory and other services to be provided by the Advisor; (b) the Advisor’s investment management personnel; (c) the Advisor’s operations and financial condition; (d) the expected benefits (such as soft dollars) to the Advisor and its affiliates from their relationship with the DJIA Fund; (e) a comparison of the DJIA Fund’s projected advisory fees to the advisory fees charged to comparable funds or accounts, giving special attention to the absence of breakpoints in these fees and the Advisor’s rationale for not providing for breakpoints at this point in time; (f) the DJIA Fund’s expected overall fees and operating expenses compared with those of similar funds; (g) the Advisor’s compliance processes and systems; (h) the Advisor’s compliance policies and procedures; and (i) the Advisor’s reputation, expertise and resources in the financial markets. In its deliberations, the Trustees did not identify any single piece of information that was all-important or controlling, noting that each Trustee could attribute different weights to the various factors considered.

Based on the Board’s deliberations at the August Meeting, the Board, including all of the Independent Trustees, unanimously: (a) concluded that the terms of the DJIA Investment Advisory Agreement are fair and reasonable; (b) concluded that the Advisor’s fees are reasonable in light of the services that it will provide to the DJIA Fund; and (c) agreed to approve the DJIA Investment Advisory Agreement based upon the following considerations, among others:

THE RYDEX FUNDS ANNUAL REPORT | 107

OTHER INFORMATION (Unaudited)(concluded)

● Nature, Extent and Quality of Services Provided by the Advisor. The Board reviewed the scope of services to be provided by the Advisor under the DJIA Investment Advisory Agreement and determined that the Advisor was capable of providing high quality advisory services to the DJIA Fund, as indicated by the nature and quality of services provided by the Advisor in the past, the firm’s management capabilities, the professional qualifications and experience of its portfolio managers, and its investment and management oversight processes. Based on the foregoing, the Trustees determined that the approval of the DJIA Investment Advisory Agreement would enable shareholders of the Fund to receive high quality services at a cost that was appropriate and reasonable.

● Fund Expenses and Performance of the DJIA Fund and the Advisor. As the DJIA Fund had not yet commenced operations, the Board was not able to review the DJIA Fund’s performance. However, the Board considered the Advisor’s track record of successfully managing funds that seek to track the performance of a benchmark and determined that the Advisor would have the capabilities, resources, and personnel necessary to provide the DJIA Fund with a reasonable potential for positive performance. The Board also reviewed statistical information provided by the Advisor regarding the DJIA Fund’s proposed expense ratio. The Advisor engaged FUSE Research Network LLC (“FUSE”), an independent, third party research provider, to prepare a report to help the Board compare the DJIA Fund’s fees and expenses to those of comparable funds in the DJIA Fund’s peer group, and the broader peer universe, as determined by FUSE. In the report, the DJIA Fund’s proposed expense ratio components, including advisory fees, waivers/reimbursements, and gross and net total expenses, are compared to those of another fund with shared key characteristics (e.g., asset size, fee structure, sector or industry investment focus) determined by FUSE to comprise the DJIA Fund’s applicable peer group. The Board also considered the Advisor’s representation that it found the peer group compiled by FUSE to be appropriate due to the frequent-trading nature of the DJIA Fund’s proposed investment strategy. Based on the foregoing, the Board determined that the proposed advisory fee to be paid by the DJIA Fund is reasonable in relation to the nature and quality of the services to be provided by the Advisor.

● Costs of Services Provided to the DJIA Fund and Profits Realized by the Advisor and its Affiliates. With respect to the cost of advisory services provided and the Advisor’s profitability, the Board concluded that it was too early to predict the profitability of the DJIA Fund to the Advisor, but noted that they would monitor the Advisor’s profitability with respect to the DJIA Fund after the DJIA Fund commenced operations.

● Economies of Scale. The Board noted that because the DJIA Fund had not yet commenced operations, there were as of now, no economies of scale to share with shareholders. The Board noted that it intends to continue monitoring the existence of economies of scale as the DJIA Fund grows in size.

● Other Benefits to the Advisor and/or its Affiliates. In addition to evaluating the Advisor’s services, the Board considered the nature and amount of other benefits to be received by the Advisor and its affiliates as a result of their relationship with the DJIA Fund, including any soft dollar usage by the Advisor and any intangible benefits. In particular, the Board considered the nature, extent, quality, and cost of certain administrative, distribution, and shareholder services to be performed by the Advisor’s affiliates and the fees to be paid to the Advisor’s affiliates for those services under separate agreements and the Distribution and Shareholders Services Plan pursuant to Rule 12b-1 of the 1940 Act. In light of the costs of providing services pursuant to the separate agreements as well as the Advisor’s and its affiliates’ commitment to the DJIA Fund, the Board concluded the ancillary benefits the Advisor and its affiliates received were reasonable.

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 DJIA Investment Advisory Agreement were reasonable, and that approval of the DJIA Investment Advisory Agreement was in the best interests of the DJIA Fund and its shareholders.

108 | THE RYDEX FUNDS 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 visiting guggenheiminvestments.com or by calling 800.820.0888.

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INTERESTED TRUSTEE
Donald C. Cacciapaglia** (1951)	Trustee from 2012 to present.	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group, Inc. (2002-2010).	236	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Corey A. Colehour (1945)	Trustee from 1993 to present; Member of the Audit Committee from 1994 to present; Member of the Governance Committee from 2014 to present; and Member of the Investment and Performance Committee from 2014 to present.	Retired.	134	None.
J. Kenneth Dalton (1941)	Trustee from 1995 to present; Chairman and Member of the Audit Committee from 1997 to present; and Member of the Compliance and Risk Oversight Committee from 2010 to present.	Retired.	134	Epiphany Funds (4) (2009-present).
John O. Demaret (1940)	Vice Chairman of the Board from 2014 to present (Chairman of the Board from 2006 to 2014); Trustee and Member of the Audit Committee from 1997 to present; Chairman (since 2014) and Member of the Compliance and Risk Oversight Committee from 2010 to present; Chairman and Member of the Investment and Performance Committee from 2014 to present; and Member of the Nominating Committee from 2014 to present.	Retired.	134	None.

THE RYDEX FUNDS ANNUAL REPORT | 109

INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES - concluded
Werner E. Keller (1940)	Chairman of the Board from 2014 to present (Vice Chairman of the Board from 2010 to 2014); Trustee and Member of the Audit Committee from 2005 to present; and Member of the Investment and Performance Committee from 2014 to present.	Current: Founder and President, Keller Partners, LLC (investment research firm) (2005-present).	134	None.
Thomas F. Lydon, Jr. (1960)	Trustee and Member of the Audit Committee from 2005 to present; Member of the Nominating Committee from 2005 to present; and Member of the Governance Committee from 2007 to present.	Current: President, Global Trends Investments (registered investment adviser) (1996-present).	134	US Global Investors (GROW) (1995-present).
Patrick T. McCarville (1942)	Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; Chairman and Member of the Nominating Committee from 2004 to present; Chairman and Member of the Governance Committee from 2007 to present; and Member of the Compliance and Risk Oversight Committee from 2014 to present.	Retired. Former: Chief Executive Officer, Par Industries, Inc., d/b/a Par Leasing (1977-2010).	134	None.

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS
Donald C. Cacciapaglia (1951)	President (2012-present).	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group Inc. (2002-2010).
Michael P. Byrum (1970)	Vice President (1999-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); President and Chief Investment Officer, Rydex Holdings, LLC (2008-present); Director and Chairman, Advisory Research Center, Inc. (2006-present); Manager, Guggenheim Specialized Products, LLC (2005-present). Former: Vice President, Guggenheim Distributors, LLC (2009); Director (2009-2010) and Secretary (2002-2010), Rydex Fund Services, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors II, LLC.

110 | THE RYDEX FUNDS ANNUAL REPORT

INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(concluded)

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS - concluded
Nikolaos Bonos (1963)	Vice President and Treasurer (2003-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); Chief Executive Officer, Guggenheim Specialized Products, LLC (2009-present); Chief Executive Officer & President, Rydex Fund Services, LLC (2009-present); Vice President, Rydex Holdings, LLC (2008-present). Former: Senior Vice President, Security Global Investors, LLC (2010-2011); and Senior Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC (2006-2011).
Elisabeth Miller (1968)	Chief Compliance Officer (2012-present).	Current: CCO, certain other funds in the Fund Complex (2012-present); CCO, Security Investors, LLC (2012-present); CCO, Guggenheim Funds Investment Advisors, LLC (2012-present); Managing Director, Guggenheim Investments (2012-present); Vice President, Guggenheim Funds Distributors, LLC (March 2014-present). Former: CCO, Guggenheim Distributors, LLC (2009-March 2014); Senior Manager, Security Investors, LLC (2004-2009); Senior Manager, Guggenheim Distributors, LLC (2004-2009).
Joseph M. Arruda (1966)	Assistant Treasurer (2006-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2006-present); Vice President, Security Investors, LLC (2010-present); CFO and Manager, Guggenheim Specialized Products, LLC (2009-present). Former: Vice President, Security Global Investors, LLC (2010-2011); Vice President, Rydex Advisors, LLC (2010); Vice President, Rydex Advisors II, LLC (2010).
Paul J. Davio (1972)	Assistant Treasurer (2014-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2014-present); Director, Guggenheim Investments (2006-present). Former: Manager, Mutual Fund Administration, Guggenheim Investments (2003-2006).
Amy J. Lee (1961)	Vice President (2009-present) and Secretary (2012-present).	Current: Chief Legal Officer, certain other funds in the Fund Complex (2013-present); Senior Managing Director, Guggenheim Investments (2012-present). Former: Vice President, Associate General Counsel and Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (2004-2012).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
**	Mr. Cacciapaglia is an “interested” person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Adviser’s parent company.
***	The “Fund Complex” includes all closed-end and open-end funds (including all of their portfolios) advised by the Adviser and any funds that have an investment adviser or servicing agent that is an affiliated person of the Adviser. Information provided is as of the date of this report.

THE RYDEX FUNDS ANNUAL REPORT | 111

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Funds Distributors, LLC, Security Investors, LLC, Security Distributors, Inc., Guggenheim Partners Investment Managers, LLC, 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.

112 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(concluded)

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.

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 ANNUAL REPORT | 113

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3.31.2016

Rydex Funds Annual Report

Domestic Equity Fund

NASDAQ-100^® Fund

ROTC-ANN-2-0316x0317 guggenheiminvestments.com

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	3
ABOUT SHAREHOLDERS’ FUND EXPENSES	6
NASDAQ-100® FUND	9
NOTES TO FINANCIAL STATEMENTS	25
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	44
OTHER INFORMATION	45
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	47
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	52

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2016

Dear Shareholder:

Security Investors, LLC (the “Investment Adviser”) is pleased to present the annual shareholder report for one of our Rydex Funds (the “Fund”). This report covers performance for the one-year period ended March 31, 2016.

The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), a global, diversified financial services firm.

Guggenheim Funds Distributors, LLC is the distributor of the Funds. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim and the Investment Adviser.

We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Performance Report and Fund Profile for the Fund.

We are committed to providing innovative investment solutions and appreciate the trust you place in us.

Sincerely,

Donald C. Cacciapaglia
President
April 30, 2016

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. The Fund is subject to the risk that large-capitalization stocks may underperform other segments of the equity market or the equity markets as a whole.

2 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited) March 31, 2016

Financial markets were buffeted by a variety of events over the past year, including volatility in the oil market, weak growth and a devaluation in China, ongoing stimulus from global central banks, and a delayed September rate hike by the U.S. Federal Reserve (the “Fed”)—and then capped by a 25 basis point increase in the U.S. federal funds target rate in December. While the direct impact of the move was fairly insignificant, the decision to begin normalization of interest rates after seven years of unprecedented liquidity provision was not. Indeed, in 2015, risk assets posted their worst annual performance since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concern about plunging commodity prices, and slowing economic growth in China and other emerging market economies.

As 2016 began, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Estimates for first quarter gross domestic product (“GDP”) in the U.S. were marked down, even though first quarter GDP has undershot full-year growth rates in six out of the last seven years. Risk assets rallied in the last half of the first quarter, led by a dovish pivot in the Fed’s communication that spurred a rally in crude oil and a reversal of dollar strength. The weaker dollar, along with optimism about a production freeze agreed to by a group of major oil producing countries, helped oil to rebound. After falling in the early weeks of the year to a cycle low of $26 per barrel on February 11, 2016, the front-month West Texas Intermediate (“WTI”) oil futures contract rallied as high as $40 per barrel before closing the quarter at $38 per barrel.

The outlook for economic growth outside the U.S. softened in the first quarter. A further deterioration in the euro zone inflation outlook prompted the European Central Bank (“ECB”) to announce an increase in the size of its monthly asset purchases and reduce its deposit rate to -40 basis points. European government bonds rallied following the announcement, with the 10-year German bund ending the first quarter with a yield of just 16 basis points.

Ongoing stimulus efforts in Asia also appeared likely to contribute to low U.S. rates. Chinese industrial production growth continued to slow in early 2016, prompting the People’s Bank of China (“PBOC”) to stimulate credit growth by allowing banks to hold fewer reserves against deposits. And after years of struggling with stagnant growth and low inflation, the Bank of Japan (“BOJ”) surprised markets by cutting its key interest rate to -10 basis points in January. The negative rates pushed a considerable amount of Japanese savings into foreign markets.

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited)(continued) March 31, 2016

In an environment where global rates are moving lower and markets are already starved for yield, foreign investors began looking to the U.S. Guggenheim expects that U.S. Treasury yields will fall further as the gravitational pull of global yields gets stronger, and does not discount the possibility of 10-year U.S. Treasury yields declining to closer to 1 percent before the end of the year.

A stronger dollar has weighed on the U.S. economy, but consumer spending has been resilient. The labor market is now operating near full employment, and tight labor market conditions are beginning to spur faster wage growth. We believe the U.S. economy is fundamentally sound, and find little evidence to support the conclusion that the economy will fall into a recession in 2016.

Despite the relative health of the U.S. economy, markets are concerned that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. Our view is that the Fed remains focused on fulfilling its dual mandate objectives of maximum employment and price stability, and thus is biased toward normalizing policy. We expect further declines in the unemployment rate as job gains outstrip growth in the labor force. Meanwhile, core and headline inflation should move closer to the Fed’s target by year end, reflecting our forecasts for a tighter labor market and a modest rise in oil prices. Normally, this would result in at least two Fed rate hikes on the table for 2016, but the U.S. Fed is becoming more sensitive to global financial conditions and the extent of global money flows that occur as monetary policy in the U.S. diverges from Europe, Japan and China. As a result, we have reduced our expectations for a June rate hike, although it would normally be an easy call. We continue to believe a December rate hike is a near certainty. A solid macroeconomic backdrop and a rebalancing oil market should support an improving credit picture in the second half of 2016.

For the 12 months ended March 31, 2016, the Standard & Poor’s 500^® (“S&P 500”) Index* returned 1.78%. The Morgan Stanley Capital International (“MSCI”) Europe-Australasia-Far East (“EAFE”) Index* returned -8.27%. The return of the MSCI Emerging Markets Index* was -12.03%.

In the bond market, the Barclays U.S. Aggregate Bond Index* posted a 1.96% return for the period, while the Barclays U.S. Corporate High Yield Index* returned -3.69%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.12% for the 12-month period.

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.

4 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2016

*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.

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.

Barclays U.S. Corporate High Yield Index measures the market of U.S. dollar denominated, noninvestment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

BofA 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.

MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.

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.

NASDAQ-100^® Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization. The index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade, and biotechnology. It does not contain securities of financial companies, including investment companies.

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 ANNUAL REPORT | 5

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 September 30, 2015 and ending March 31, 2016.

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.

6 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

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 up to the past five years (subject to the Fund’s inception date), 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 ANNUAL REPORT | 7

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 1. Based on actual Fund return3
NASDAQ-100® Fund
Investor Class	1.27%	7.21%	$ 1,000.00	$ 1,072.10	$ 6.58
A-Class	1.52%	7.14%	1,000.00	1,071.40	7.87
C-Class	2.27%	6.67%	1,000.00	1,066.70	11.73
H-Class	1.52%	7.10%	1,000.00	1,071.00	7.87
Table 2. Based on hypothetical 5% return (before expenses)
NASDAQ-100® Fund
Investor Class	1.27%	5.00%	$ 1,000.00	$ 1,018.65	$ 6.41
A-Class	1.52%	5.00%	1,000.00	1,017.40	7.67
C-Class	2.27%	5.00%	1,000.00	1,013.65	11.43
H-Class	1.52%	5.00%	1,000.00	1,017.40	7.67

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 183/366 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2015 to March 31, 2016.

8 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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”).

For the one-year period ended March 31, 2016, NASDAQ-100^® Fund maintained a daily correlation of over 99% to its benchmark of 100% of the daily price movement of the NASDAQ-100^® Index. The NASDAQ-100^® Fund Investor Class returned 3.49%, while the NASDAQ-100^® Index returned 4.74% over the same period.

The Information Technology sector contributed the most to the performance of the underlying index, followed by the Consumer Discretionary sector. Health Care was the sector that detracted the most from the performance of the underlying index, followed by the Industrials sector.

Microsoft Corp., Amazon.com, Inc., and Facebook, Inc. — Class A were the holdings contributing the most to the performance of the underlying index for the year. Apple, Inc., Biogen, Inc., and Express Scripts Holding Co. detracted the most from the performance of the underlying index for the year.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

The Fund invests excess cash into the Guggenheim Strategy Funds, which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one-year period ended March 31, 2016, investment in the Guggenheim Strategy Funds benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

THE RYDEX FUNDS ANNUAL REPORT | 9

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2016

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

Inception Dates:
Investor Class	February 14, 1994
A-Class	March 31, 2004
C-Class	March 26, 2001
H-Class	September 18, 2014

Ten Largest Holdings (% of Total Net Assets)
Apple, Inc.	8.4%
Guggenheim Strategy Fund I	6.7%
Microsoft Corp.	6.1%
Amazon.com, Inc.	3.9%
Guggenheim Strategy Fund II	3.8%
Facebook, Inc. — Class A	3.6%
Alphabet, Inc. — Class C	3.6%
Alphabet, Inc. — Class A	3.1%
Intel Corp.	2.1%
Comcast Corp. — Class A	2.1%
Top Ten Total	43.4%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2016

Cumulative Fund Performance*

 

THE RYDEX FUNDS ANNUAL REPORT | 11

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
Investor Class Shares	3.49%	13.97%	9.95%
A-Class Shares	3.26%	13.68%	9.66%
A-Class Shares with sales charge†	-1.66%	12.58%	9.12%
C-Class Shares	2.48%	12.83%	8.87%
C-Class Shares with CDSC‡	1.48%	12.83%	8.87%
NASDAQ-100 Index	4.74%	15.34%	11.19%
		1 Year	Since Inception (09/18/14)
H-Class Shares		3.18%	5.63%
NASDAQ-100 Index		4.74%	7.26%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The NASDAQ-100 Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on the Investor Class shares and A-Class shares only; performance for C-Class shares and H-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

12 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
NASDAQ-100® FUND

	Shares		Value
COMMON STOCKS† - 71.4%
Technology - 25.7%
Apple, Inc.		722,129	$	78,704,840
Microsoft Corp.		1,030,110		56,892,976
Intel Corp.		615,256		19,903,532
QUALCOMM, Inc.		194,694		9,956,651
Texas Instruments, Inc.		130,925		7,517,714
Adobe Systems, Inc.*		64,903		6,087,902
Broadcom Ltd.		36,010		5,563,545
Cognizant Technology Solutions Corp. — Class A*		79,333		4,974,179
NXP Semiconductor N.V.*		45,063		3,653,257
Intuit, Inc.		33,448		3,478,926
Activision Blizzard, Inc.		95,727		3,239,402
Applied Materials, Inc.		147,266		3,119,094
Fiserv, Inc.*		29,035		2,978,410
Electronic Arts, Inc.*		40,285		2,663,241
Paychex, Inc.		47,010		2,539,010
NVIDIA Corp.		70,069		2,496,558
Analog Devices, Inc.		40,378		2,389,974
Cerner Corp.*		44,284		2,345,281
Check Point Software Technologies Ltd.*		23,555		2,060,356
Skyworks Solutions, Inc.		24,963		1,944,618
Autodesk, Inc.*		29,346		1,711,165
Lam Research Corp.		20,694		1,709,324
CA, Inc.		54,279		1,671,250
Xilinx, Inc.		33,281		1,578,518
Citrix Systems, Inc.*		20,054		1,575,843
Western Digital Corp.		30,316		1,432,127
Micron Technology, Inc.*		135,118		1,414,685
NetEase, Inc. ADR		9,825		1,410,674
Linear Technology Corp.		31,172		1,389,024
Maxim Integrated Products, Inc.		37,301		1,371,931
Seagate Technology plc		38,606		1,329,977
Akamai Technologies, Inc.*		23,020		1,279,221
NetApp, Inc.		38,075		1,039,067
Total Technology				241,422,272
Communications - 25.4%
Amazon.com, Inc.*		61,324		36,404,379
Facebook, Inc. — Class A*		298,894		34,103,805
Alphabet, Inc. — Class C*		45,004		33,525,730
Alphabet, Inc. — Class A*		38,106		29,071,067
Comcast Corp. — Class A		316,869		19,354,359
Cisco Systems, Inc.		655,386		18,658,839
Priceline Group, Inc.*		6,462		8,329,260
Baidu, Inc. ADR*		35,298		6,737,682
Netflix, Inc.*		55,754		5,699,731
Yahoo!, Inc.*		123,313		4,539,152
T-Mobile US, Inc.*		106,591		4,082,436
Twenty-First Century Fox, Inc. — Class A		145,797		4,064,821
eBay, Inc.*		153,515		3,662,868
JD.com, Inc. ADR*		113,610		3,010,665
Charter Communications, Inc. — Class A*		14,644		2,964,385
Twenty-First Century Fox, Inc. — Class B		103,999		2,932,772
Liberty Global plc*		75,674		2,842,315
Sirius XM Holdings, Inc.*		663,704		2,621,631
Ctrip.com International Ltd. ADR*		44,815		1,983,512
Expedia, Inc.		17,944		1,934,722
Viacom, Inc. — Class B		45,123		1,862,677
Vodafone Group plc ADR		50,546		1,619,999
Symantec Corp.		84,946		1,561,307
DISH Network Corp. — Class A*		29,405		1,360,275
Liberty Global plc — Class A*		32,925		1,267,613
TripAdvisor, Inc.*		17,253		1,147,325
Liberty Media Corp. — Class C*		28,987		1,104,115
Discovery Communications, Inc. — Class C*		32,974		890,298
Liberty Ventures*		17,586		687,964
Discovery Communications, Inc. — Class A*		19,548		559,659

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 13

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NASDAQ-100® FUND

	Shares		Value
Liberty Media Corp. — Class A*		13,312	$	514,243
Total Communications				239,099,606
Consumer, Non-cyclical - 12.8%
Gilead Sciences, Inc.		178,018		16,352,734
Amgen, Inc.		97,953		14,686,094
Kraft Heinz Co.		158,041		12,415,701
Celgene Corp.*		101,804		10,189,563
Mondelez International, Inc. — Class A		204,328		8,197,639
Biogen, Inc.*		28,481		7,414,174
PayPal Holdings, Inc.*		159,242		6,146,741
Express Scripts Holding Co.*		87,007		5,976,511
Automatic Data Processing, Inc.		59,579		5,344,832
Regeneron Pharmaceuticals, Inc.*		13,398		4,829,175
Alexion Pharmaceuticals, Inc.*		29,342		4,084,993
Monster Beverage Corp.*		26,429		3,525,100
Illumina, Inc.*		19,067		3,090,951
Mylan N.V.*		63,907		2,962,089
Intuitive Surgical, Inc.*		4,868		2,925,911
Vertex Pharmaceuticals, Inc.*		32,090		2,550,834
Henry Schein, Inc.*		10,672		1,842,307
Incyte Corp.*		24,381		1,766,891
Verisk Analytics, Inc. — Class A*		21,885		1,749,049
BioMarin Pharmaceutical, Inc.*		21,046		1,735,874
Whole Foods Market, Inc.		42,278		1,315,269
Endo International plc*		28,940		814,661
Total Consumer, Non-cyclical				119,917,093
Consumer, Cyclical - 6.8%
Walgreens Boots Alliance, Inc.		140,497		11,835,467
Starbucks Corp.		192,508		11,492,728
Costco Wholesale Corp.		57,277		9,025,710
Tesla Motors, Inc.*		17,199		3,951,814
O’Reilly Automotive, Inc.*		12,658		3,463,988
American Airlines Group, Inc.		78,537		3,220,802
Ross Stores, Inc.		52,748		3,054,109
Dollar Tree, Inc.*		30,580		2,521,627
PACCAR, Inc.		45,762		2,502,724
Marriott International, Inc. — Class A		33,013		2,349,866
Fastenal Co.		37,577		1,841,273
Norwegian Cruise Line Holdings Ltd.*		29,605		1,636,860
Ulta Salon Cosmetics & Fragrance, Inc.*		8,297		1,607,461
Tractor Supply Co.		17,419		1,575,723
Liberty Interactive Corporation QVC Group — Class A*		59,679		1,506,895
Mattel, Inc.		44,283		1,488,794
Bed Bath & Beyond, Inc.*		21,306		1,057,630
Total Consumer, Cyclical				64,133,471
Industrial - 0.7%
CSX Corp.		125,442		3,230,132
SBA Communications Corp. — Class A*		16,313		1,634,073
Stericycle, Inc.*		11,069		1,396,797
Total Industrial				6,261,002
Total Common Stocks
(Cost $390,496,326)				670,833,444
MUTUAL FUNDS† - 10.5%
Guggenheim Strategy Fund I1		2,539,787		63,012,120
Guggenheim Strategy Fund II1		1,461,684		36,088,986
Total Mutual Funds
(Cost $99,243,726)				99,101,106

14 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
NASDAQ-100® FUND

	Face Amount		Value
FEDERAL AGENCY NOTES†† - 5.7%
Federal Home Loan Bank2
0.53% due 01/11/173	$	25,000,000	$	25,002,725
0.62% due 11/23/16		5,000,000		5,002,350
Total Federal Home Loan Bank				30,005,075
Federal Farm Credit Bank2
0.41% due 11/22/163		10,000,000		9,996,930
0.42% due 08/01/173		9,000,000		8,983,395
0.52% due 12/28/163		5,000,000		4,998,280
Total Federal Farm Credit Bank				23,978,605
Fannie Mae4
0.44% due 09/08/173		10,000,000		9,975,700
Total Federal Agency Notes
(Cost $64,000,218)				63,959,380
FEDERAL AGENCY DISCOUNT NOTES†† - 5.1%
Federal Home Loan Bank2
0.08% due 04/01/16		15,000,000		15,000,000
0.58% due 09/14/16		14,810,000		14,781,313
Total Federal Home Loan Bank				29,781,313
Farmer Mac2
0.66% due 12/09/16		8,000,000		7,972,560
Total Federal Agency Discount Notes
(Cost $37,733,431)				37,753,873
REPURCHASE AGREEMENTS††,5 - 5.2%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		28,365,564		28,365,564
HSBC Group issued 03/31/16 at 0.21% due 04/01/166		20,685,906		20,685,906
Total Repurchase Agreements
(Cost $49,051,470)				49,051,470
Total Investments - 97.9%
(Cost $640,525,171)			$	920,699,273
Other Assets & Liabilities, net - 2.1%				19,354,525
Total Net Assets - 100.0%			$	940,053,798

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 NASDAQ-100 Index Mini Futures Contracts (Aggregate Value of Contracts $9,398,025)		105	$	400,437

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International April 2016 NASDAQ-100 Index Swap 0.40%7, Terminating 04/27/16 (Notional Value $44,964,701)		10,029	$	740,703
Barclays Bank plc April 2016 NASDAQ-100 Index Swap 0.40%7, Terminating 04/29/16 (Notional Value $184,197,452)		41,082		612,252
Credit Suisse Capital, LLC April 2016 NASDAQ-100 Index Swap 0.43%7, Terminating 04/26/16 (Notional Value $29,722,925)		6,629		535,838
(Total Notional Value $258,885,078)			$	1,888,793

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 15

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
NASDAQ-100® FUND

*	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	Affiliated issuer — See Note 10.
2	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
3	Variable rate security. Rate indicated is rate effective at March 31, 2016.
4	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.
5	Repurchase Agreements — See Note 5.
6	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
7	Total Return based on NASDAQ-100 Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	670,833,444	$	—	$	—	$	—	$	—	$	670,833,444
Equity Futures Contracts		—		400,437		—		—		—		400,437
Equity Index Swap Agreements		—		—		—		1,888,793		—		1,888,793
Federal Agency Discount Notes		—		—		37,753,873		—		—		37,753,873
Federal Agency Notes		—		—		63,959,380		—		—		63,959,380
Mutual Funds		99,101,106		—		—		—		—		99,101,106
Repurchase Agreements		—		—		49,051,470		—		—		49,051,470
Total	$	769,934,550	$	400,437	$	150,764,723	$	1,888,793	$	—	$	922,988,503

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

16 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

STATEMENT OF ASSETS AND LIABILITIES

NASDAQ-100^® FUND

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $492,229,975)	$	772,546,697
Investments in affiliated issuers, at value (cost $99,243,726)		99,101,106
Repurchase agreements, at value (cost $49,051,470)		49,051,470
Total investments (cost $640,525,171)		920,699,273
Segregated cash with broker		17,724,000
Unrealized appreciation on swap agreements		1,888,793
Cash		14,942
Receivables:
Fund shares sold		3,238,450
Dividends		419,905
Swap settlement		65,252
Interest		22,135
Foreign taxes reclaim		2,094
Total assets		944,074,844
Liabilities:
Payable for:
Fund shares redeemed		2,387,832
Management fees		548,324
Licensing fees		381,589
Securities purchased		186,457
Transfer agent and administrative fees		182,775
Distribution and service fees		67,909
Portfolio accounting fees		50,519
Variation margin		14,175
Miscellaneous		201,466
Total liabilities		4,021,046
Commitments and contingent liabilities (Note 12)		—
Net assets	$	940,053,798
Net assets consist of:
Paid in capital	$	678,284,852
Undistributed net investment income		—
Accumulated net realized gain on investments		(20,694,386	)
Net unrealized appreciation on investments		282,463,332
Net assets	$	940,053,798
Investor Class:
Net assets	$	667,017,607
Capital shares outstanding		25,899,868
Net asset value per share	$	25.75
A-Class:
Net assets	$	60,499,062
Capital shares outstanding		2,516,935
Net asset value per share	$	24.04
Maximum offering price per share (Net asset value divided by 95.25%)	$	25.24
C-Class:
Net assets	$	38,899,588
Capital shares outstanding		1,799,147
Net asset value per share	$	21.62
H-Class:
Net assets	$	173,637,541
Capital shares outstanding		7,234,524
Net asset value per share	$	24.00

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT 17

STATEMENT OF OPERATIONS

NASDAQ-100^® FUND

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $1,822)	$	7,573,025
Dividends from securities of affiliated issuers		2,274,109
Interest		193,386
Income from securities lending, net		9,027
Total investment income		10,049,547
Expenses:
Management fees		7,154,507
Transfer agent and administrative fees		2,384,836
Distribution and service fees:
Advisor Class		70,388
A-Class		215,059
C-Class		363,298
H-Class		202,641
Portfolio accounting fees		624,247
Custodian fees		110,822
Trustees’ fees*		65,856
Line of credit fees		18,292
Miscellaneous		1,573,118
Total expenses		12,783,064
Net investment loss		(2,733,517	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	136,806,610
Investments in affiliated issuers		(496,916	)
Swap agreements		1,476,323
Futures contracts		1,659,621
Net realized gain		139,445,638
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(127,814,195	)
Investments in affiliated issuers		(381,616	)
Swap agreements		1,781,098
Futures contracts		(634,659	)
Net change in unrealized appreciation (depreciation)		(127,049,372	)
Net realized and unrealized gain		12,396,266
Net increase in net assets resulting from operations	$	9,662,749

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

18 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

STATEMENTS OF CHANGES IN NET ASSETS

NASDAQ-100^® FUND

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(2,733,517	)	$	(1,194,397	)
Net realized gain on investments		139,445,638			105,677,408
Net change in unrealized appreciation (depreciation) on investments		(127,049,372	)		63,640,660
Net increase in net assets resulting from operations		9,662,749			168,123,671
Distributions to shareholders from:
Net realized gains
Investor Class		(15,721,868	)		(11,799,003	)
Advisor Class**		—			(844,563	)
A-Class		(2,634,742	)		(713,323	)
C-Class		(956,856	)		(455,105	)
H-Class**		(6,738,531	)		(13,134	)
Total distributions to shareholders		(26,051,997	)		(13,825,128	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		1,011,361,829			1,029,136,798
Advisor Class**		94,137,245			977,291,285
A-Class		817,538,269			126,142,545
C-Class		26,584,585			31,988,339
H-Class**		1,591,642,598			1,146,379,957	*
Distributions reinvested
Investor Class		15,251,133			10,894,558
Advisor Class**		—			841,695
A-Class		2,570,836			687,698
C-Class		931,242			439,832
H-Class**		6,738,458			13,134	*
Cost of shares redeemed
Investor Class		(1,120,085,951	)		(1,013,748,379	)
Advisor Class**		(139,879,099	)		(984,316,693	)
A-Class		(827,926,638	)		(83,648,854	)
C-Class		(20,071,986	)		(22,518,343	)
H-Class**		(1,453,762,548	)		(1,132,744,353	)*
Conversion activity**
Advisor Class		(20,538,756	)		—
H-Class		20,538,756			—
Net increase from capital share transactions		5,029,973			86,839,219
Net increase (decrease) in net assets		(11,359,275	)		241,137,762

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 19

STATEMENTS OF CHANGES IN NET ASSETS(concluded)

NASDAQ-100^® FUND

	Year Ended March 31, 2016			Year Ended March 31, 2015
Net assets:
Beginning of year	$	951,413,073		$	710,275,311
End of year	$	940,053,798		$	951,413,073
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold
Investor Class		38,934,513			43,087,905
Advisor Class**		4,004,926			47,220,519
A-Class		34,504,136			5,505,586
C-Class		1,215,431			1,558,513
H-Class**		66,106,678			49,097,507	*
Shares issued from reinvestment of distributions
Investor Class		569,923			438,589
Advisor Class**		—			37,226
A-Class		102,833			29,528
C-Class		41,297			20,727
H-Class**		269,863			563	*
Shares redeemed
Investor Class		(43,913,512	)		(42,808,208	)
Advisor Class**		(5,986,255	)		(46,232,015	)
A-Class		(35,068,368	)		(3,638,949	)
C-Class		(953,984	)		(1,123,559	)
H-Class**		(60,544,558	)		(48,592,615	)*
Conversion activity**
Advisor Class		(924,136	)		—
H-Class		897,086			—
Net increase in shares		(744,127	)		4,601,317

*	Since commencement of operations: September 18, 2014.
**	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 13

20 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL HIGHLIGHTS

NASDAQ-100^® 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.

Investor Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	25.38		$	21.38		$	18.38		$	17.92		$	15.23
Income (loss) from investment operations:
Net investment income (loss)a		(.05	)		(.01	)		.02			.02			(.05	)
Net gain (loss) on investments (realized and unrealized)		.96			4.39			5.01			.44			2.74
Total from investment operations		.91			4.38			5.03			.46			2.69
Less distributions from:
Net realized gains		(.54	)		(.38	)		(2.03	)		—			—
Total distributions		(.54	)		(.38	)		(2.03	)		—			—
Net asset value, end of period	$	25.75		$	25.38		$	21.38		$	18.38		$	17.92
Total Returnb		3.49	%		20.53	%		27.74	%		2.57	%		17.66	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	667,018		$	769,257		$	632,598		$	461,269		$	770,626
Ratios to average net assets:
Net investment income (loss)		(0.19	%)		(0.05	%)		0.10	%		0.13	%		(0.34	%)
Total expensesc		1.25	%		1.26	%		1.29	%		1.26	%		1.27	%
Portfolio turnover rate		228	%		267	%		141	%		94	%		94	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT 21

FINANCIAL HIGHLIGHTS (continued)

NASDAQ-100^® 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	23.78		$	20.10		$	17.42		$	17.03		$	14.52
Income (loss) from investment operations:
Net investment income (loss)a		(.10	)		(.06	)		(.03	)		(.02	)		(.09	)
Net gain (loss) on investments (realized and unrealized)		.90			4.12			4.74			.41			2.60
Total from investment operations		.80			4.06			4.71			.39			2.51
Less distributions from:
Net realized gains		(.54	)		(.38	)		(2.03	)		—			—
Total distributions		(.54	)		(.38	)		(2.03	)		—			—
Net asset value, end of period	$	24.04		$	23.78		$	20.10		$	17.42		$	17.03
Total Returnb		3.26	%		20.24	%		27.42	%		2.29	%		17.29	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	60,499		$	70,821		$	21,751		$	23,656		$	14,553
Ratios to average net assets:
Net investment income (loss)		(0.42	%)		(0.29	%)		(0.14	%)		(0.09	%)		(0.61	%)
Total expensesc		1.51	%		1.50	%		1.54	%		1.52	%		1.53	%
Portfolio turnover rate		228	%		267	%		141	%		94	%		94	%

22 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

FINANCIAL HIGHLIGHTS (continued)

NASDAQ-100^® 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.

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	21.60		$	18.42		$	16.22		$	15.97		$	13.72
Income (loss) from investment operations:
Net investment income (loss)a		(.26	)		(.21	)		(.16	)		(.13	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		.82			3.77			4.39			.38			2.44
Total from investment operations		.56			3.56			4.23			.25			2.25
Less distributions from:
Net realized gains		(.54	)		(.38	)		(2.03	)		—			—
Total distributions		(.54	)		(.38	)		(2.03	)		—			—
Net asset value, end of period	$	21.62		$	21.60		$	18.42		$	16.22		$	15.97
Total Returnb		2.48	%		19.37	%		26.46	%		1.57	%		16.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	38,900		$	32,324		$	19,175		$	13,015		$	15,177
Ratios to average net assets:
Net investment income (loss)		(1.19	%)		(1.05	%)		(0.89	%)		(0.84	%)		(1.35	%)
Total expensesc		2.26	%		2.25	%		2.29	%		2.26	%		2.27	%
Portfolio turnover rate		228	%		267	%		141	%		94	%		94	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT 23

FINANCIAL HIGHLIGHTS (concluded)

NASDAQ-100^® 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.

H-Class	Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	23.76		$	22.91
Income (loss) from investment operations:
Net investment income (loss)a		(.13	)		.01
Net gain (loss) on investments (realized and unrealized)		.91			1.22
Total from investment operations		.78			1.23
Less distributions from:
Net realized gains		(.54	)		(.38	)
Total distributions		(.54	)		(.38	)
Net asset value, end of period	$	24.00		$	23.76
Total Returnb		3.18	%		5.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	173,638		$	12,009
Ratios to average net assets:
Net investment income (loss)		(0.51	%)		0.07	%
Total expensesc		1.51	%		1.47	%
Portfolio turnover rate		228	%		267	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: September 18, 2014. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. The portfolio turnover rate stated is for the entire period of the Fund, not since commencement of operation of the Class.

24 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Organization

The Rydex Series Funds (the “Trust”), a Delaware statutory trust, is registered with the SEC under the Investment Company Act of 1940 (”1940 Act”), as an 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 seven separate classes of shares: Investor Class shares, A-Class shares, C-Class shares, H-Class shares, P-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 require a minimum initial investment of $2 million and a minimum account balance of $1 million. At March 31, 2016, the Trust consisted of fifty-three funds (the “Funds”).

This report covers the NASDAQ-100^® Fund (the “Fund”), a non-diversified investment company. Only Investor Class, A-Class, C-Class and H-Class shares had been issued by the Fund.

The Fund is designed and operated to accommodate frequent trading by shareholders and, unlike most mutual funds, offers unlimited exchange privileges with no minimum holding periods or transactions fees, which may cause the Fund to experience high portfolio turnover.

Guggenheim Investments (“GI”) provides advisory services, and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI, RFS and GFD are affiliated entities.

THE RYDEX FUNDS ANNUAL REPORT | 25

NOTES TO FINANCIAL STATEMENTS (continued)

Significant Accounting Policies

The Fund operates as an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

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.

The NAV of each Class of the Fund is calculated by dividing the market value of the Fund’s securities and other assets, less all liabilities, attributable to the Class by the number of outstanding shares of the Class.

A. The Board of Trustees of the Fund (the “Board”) has adopted policies and procedures for the valuation of the Fund’s investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Board has delegated to a valuation committee, consisting of representatives from Guggenheim’s investment management, fund administration, legal and compliance departments (the “Valuation Committee”), the day-to-day responsibility for implementing the Valuation Procedures, including, under most circumstances, the responsibility for determining the fair value of the Fund’s securities or other assets.

Valuations of the Fund’s securities are supplied primarily by pricing services appointed pursuant to the processes set forth in the Valuation Procedures. The Valuation Committee convenes monthly, or more frequently as needed and will review the valuation of all assets which have been fair valued for reasonableness. The Fund’s officers, through the Valuation Committee and consistent with the monitoring and review responsibilities set forth in the Valuation Procedures, regularly review procedures used by, and valuations provided by, the pricing services.

If the pricing service cannot or does not provide a valuation for a particular investment or such valuation is deemed unreliable, such investment is fair valued by the Valuation Committee.

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

26 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

Price on the valuation date, which may not necessarily represent the last sale price. If there has been no sale on such exchange or NASDAQ on a given day, the security is valued at the closing bid price on that day.

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 (“CEFs”) are valued at the last quoted sales price.

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 spreads, 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 are valued at amortized cost, provided such amount approximates market value.

Repurchase agreements are valued at amortized cost, provided such amounts approximate market value.

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 OTC 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. The swap’s value is then adjusted to include dividends accrued, and financing charges and/or interest associated with the swap agreements.

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.

Valuations in accordance with these methods are intended to reflect each security’s (or asset’s) “fair value.” Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to: (i) the type of security, (ii) the initial cost of the security, (iii) the existence of any

THE RYDEX FUNDS ANNUAL REPORT | 27

NOTES TO FINANCIAL STATEMENTS (continued)

contractual restrictions on the security’s disposition, (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies, (v) quotations or evaluated prices from broker-dealers and/or pricing services, (vi) information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), (vii) an analysis of the company’s financial statements, and (viii) an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold (e.g. the existence of pending merger activity, public offerings or tender offers that might affect the value of the security).

In connection with futures contracts and other derivative investments, such factors may include 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.

B. Certain U.S. Government and Agency Obligations are traded on a discount basis; the interest rates shown on the Schedule of Investments reflect the effective rates paid at the time of purchase by the Fund. Other securities bear interest at the rates shown, payable at fixed dates through maturity.

C. Upon entering into a futures contract, the 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.

D. 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.

E. 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 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. Dividend income from REITs is recorded based on the income included

28 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts.

F. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Dividends are reinvested in additional shares unless shareholders request payment in cash. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.

G. 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 and service fees 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.

H. The Fund may leave cash overnight in its cash account with the custodian. Periodically, the 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, which was 0.25% at March 31, 2016.

I. Under the Fund’s organizational documents, its Trustees and Officers are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, throughout the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund and/or its affiliates that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.

2. Financial Instruments and Derivatives

As part of its investment strategy, the Fund utilizes a variety of derivative instruments. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statement of Assets and Liabilities. Valuation and accounting treatment of these instruments can be found under Significant Accounting Policies in Note 1 of these Notes to Financial Statements.

THE RYDEX FUNDS ANNUAL REPORT | 29

NOTES TO FINANCIAL STATEMENTS (continued)

Derivatives

Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more other assets, such as securities, currencies, commodities or indices. Derivative instruments may be used to increase investment flexibility (including to maintain cash reserves while maintaining exposure to certain other assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. Derivative instruments may also be used to mitigate certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. U.S. GAAP requires disclosures to enable investors to better understand how and why a Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund’s financial position and results of operations.

The Funds may utilize derivatives for the following purposes:

Index Exposure: the use of an instrument to obtain exposure to a listed or other type of index.

Liquidity: the ability to buy or sell exposure with little price/market impact.

Futures

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, 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 a Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default. Cash deposits are shown as segregated cash with broker on the Statement of Assets and Liabilities; securities held as collateral are noted on the Schedule of Investments.

The following table represents the Fund’s use and volume of futures on a quarterly basis:

		Average Notional
Fund	Use		Long
NASDAQ-100® Fund	Index exposure, Liquidity		$	67,830,574

30 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

Swaps

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 Fund utilizing OTC swaps 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 if the underlying asset declines in value. Certain standardized swaps are subject to mandatory central clearing. Central clearing generally reduces counterparty credit risk and increases liquidity, but central clearing does not make swap transactions risk-free. 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.

Total return swaps involve commitments where single or multiple cash flows are exchanged based on the price of an underlying reference asset (such as index or basket) or a fixed or variable interest rate. Index swaps will usually be computed based on the current index value as of the close of regular trading on the NYSE or other exchange, with the swap value being adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreement. A fund utilizing a total return index swap 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 if the underlying index declines in value.

The following table represents the Fund’s use and volume of total return swaps on a quarterly basis:

		Average Notional
Fund	Use		Long
NASDAQ-100® Fund	Index exposure, Liquidity		$	325,115,117

Derivative Investment Holdings Categorized by Risk Exposure

The following is a summary of the location of derivative investments on the Fund’s Statement of Assets and Liabilities as of March 31, 2016:

Derivative Investment Type	Asset Derivatives	Liability Derivatives
Equity contracts	Unrealized appreciation on swap agreements	Variation margin

THE RYDEX FUNDS ANNUAL REPORT | 31

NOTES TO FINANCIAL STATEMENTS (continued)

The following table sets forth the fair value of the Fund’s derivative investments categorized by primary risk exposure at March 31, 2016:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Total Value at March 31, 2016
NASDAQ-100® Fund	$	400,437	$	1,888,793	$	2,289,230

* Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedules of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The following is a summary of the location of derivative investments on the Fund’s Statement of Operations for the year ended March 31, 2016:

Derivative Investment Type	Location of Gain (Loss) on Derivatives
Equity 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 Fund’s realized gain (loss) and change in unrealized appreciation (depreciation) on derivative investments recognized on the Statement of Operations categorized by primary risk exposure for the year ended March 31, 2016:

Realized Gain (Loss) on Derivative Investments Recognized on the Statement of Operations
Fund	Futures Equity Contracts		Swaps Equity Contracts		Total
NASDAQ-100® Fund	$	1,659,621	$	1,476,323	$	3,135,944

Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statement of Operations
Fund	Futures Equity Contracts			Swaps Equity Contracts		Total
NASDAQ-100® Fund	$	(634,659	)	$	1,781,098	$	1,146,439

32 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

In conjunction with the use of derivative instruments, the Fund is required to maintain collateral in various forms. The Fund uses, 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 the 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 Fund pays GI investment advisory fees calculated at an annualized rate of 0.75% of the average daily net assets of the Fund.

RFS provides transfer agent and administrative services to the Fund calculated at the annualized rate of 0.25% based on the average daily net assets of the Fund.

RFS also provides accounting services to the Fund for fees calculated at annualized rates below, based on the average daily net assets of the 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 Plan applicable to A-Class shares and H-Class shares for which GFD and other firms that provide distribution and/or shareholder services (“Service Providers”) may receive compensation. If a Service Provider provides distribution services, the Fund will pay distribution fees to GFD at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GFD, in turn, will pay the Service Provider out of its fees. GFD 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 Fund to pay annual distribution and service fees of 1.00% of the Fund’s C-Class shares average daily net assets.

THE RYDEX FUNDS ANNUAL REPORT | 33

NOTES TO FINANCIAL STATEMENTS (continued)

The annual 0.25% service fee compensates a shareholder’s financial adviser for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GFD for paying the shareholder’s financial adviser an ongoing sales commission. GFD advances the first year’s service and distribution fees to the financial adviser. GFD retains the service and distribution fees on accounts with no authorized dealer of record.

For the year ended March 31, 2016, GFD retained sales charges of $349,121 relating to sales of A-Class shares of the Trust.

Certain trustees and officers of the Trust are also officers of GI, RFS and GFD.

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. U.S. GAAP establishes a three-tier fair value hierarchy based on the types of inputs used to value assets and liabilities and requires corresponding disclosure. The hierarchy and the corresponding inputs are summarized below:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — significant other observable inputs (for example quoted prices for securities that are similar based on characteristics such as interest rates, prepayment speeds, credit risk, etc.).

Level 3 — significant unobservable inputs based on the best information available under the circumstances, to the extent observable inputs are not available, which may include assumptions.

The types of inputs available depend on a variety of factors, such as the type of security and the characteristics of the markets in which it trades, if any. Fair valuation determinations that rely on fewer or no observable inputs require greater judgment. Accordingly, fair value determinations for Level 3 securities require the greatest amount of judgment.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The suitability of the techniques and sources employed to determine fair valuation are regularly monitored and subject to change.

34 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (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 March 31, 2016, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement		Face Value		Repurchase Price	Collateral		Par Value		Fair Value
Royal Bank of Canada					U.S. TIP Bonds
0.23%					0.13% - 0.38%
Due 04/01/16	$	364,541,761	$	364,544,090	04/15/17 - 07/15/23	$	353,293,600	$	371,832,617
HSBC Group					U.S. Treasury Strips
0.21%					0.00%
Due 04/01/16		182,287,605		182,288,668	05/15/43		392,890,600		185,933,378

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 adviser, 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

During the year ended March 31, 2016, the Fund lent its securities to approved brokers to earn additional income. Security lending income shown on the Statement of Operations is net of rebates paid to borrowers and earnings on cash collateral investments shared with the lending agent. As of March 31, 2016, the Fund ceased participation in securities lending.

THE RYDEX FUNDS ANNUAL REPORT | 35

NOTES TO FINANCIAL STATEMENTS (continued)

7. Offsetting

In the normal course of business, the Fund enters into transactions subject to enforceable master netting arrangements or other similar arrangements. Generally, the right to offset in those agreements allows the Fund 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.

In order to better define their contractual rights and to secure rights that will help the Fund mitigate its counterparty risk, the Fund may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with its derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs OTC derivatives, including foreign exchange contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Fund and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Fund and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as segregated cash with broker/receivable for variation margin, or payable for swap settlement/variation margin. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold (e.g., $300,000) before a transfer is required to be made. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty nonperformance. The Fund attempts to mitigate counterparty risk by only entering into agreements with counterparties that they believe to be of good standing and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.

36 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

The following table presents derivative financial instruments and secured financing transactions that are subject to enforceable netting arrangements and offset in the Statement of Assets and Liabilities in conformity with U.S. GAAP.

								Gross Amounts Not Offset in the Statement of Assets and Liabilities
Fund	Instrument	Gross Amounts of Recognized Assets1		Gross Amounts Offset In the Statement of Assets and Liabilities		Net Amount of Assets Presented on the Statement of Assets and Liabilities		Financial Instruments		Cash Collateral Received		Net Amount
NASDAQ-100® Fund	Swap equity contracts	$	1,888,793	$	—	$	1,888,793	$	—	$	—	$	1,888,793

¹ Exchange-traded futures are excluded from these reported amounts.

8. Federal Income Tax Information

The Fund intends 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 Fund 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 Fund’s 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 Fund’s 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 Fund’s financial statements. The Fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three years after they are filed.

The tax character of distributions paid during the year ended March 31, 2016 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
NASDAQ-100® Fund	$	26,051,997	$	—	$	26,051,997

THE RYDEX FUNDS ANNUAL REPORT | 37

NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributions paid during the year ended March 31, 2015 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
NASDAQ-100® Fund	$	13,825,128	$	—	$	13,825,128

Note: For federal income tax purposes, short-term capital gain distributions are treated as ordinary income distributions.

The tax character of distributable earnings/(accumulated losses) at March 31, 2016 was as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ (Depreciation)		Capital Loss Carryforward & Other Losses
NASDAQ-100® Fund	$	4,776,285	$	9,569,870	$	247,422,791	$	—

As of March 31, 2016, the Fund had no capital loss carryforward.

Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are typically due to wash sales, mark-to-market on futures contracts, and utilization of earnings and profits on shareholder redemptions. Additional differences may result from tax treatment of net investment losses. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise. These reclassifications have no effect on the net assets or NAV per share.

On the Statements of Assets and Liabilities the following adjustments were made for permanent book/tax differences:

Fund	Paid In Capital		Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
NASDAQ-100® Fund	$	130,749,775	$	2,733,517	$	(133,483,292	)

38 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2016, 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:

Fund	Tax Cost		Tax Unrealized Gain		Tax Unrealized Loss			Net Unrealized Gain
NASDAQ-100® Fund	$	675,165,275	$	251,445,808	$	(5,911,810	)	$	245,533,998

9. Securities Transactions

For the year ended March 31, 2016, the cost of purchases and proceeds from sales of investment securities, excluding government securities, short-term investments and derivatives, were as follows:

Fund	Purchases		Sales
NASDAQ-100® Fund	$	1,872,338,714	$	1,926,500,609

The Fund is permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by a Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each transaction is effected at the current market price to save costs, where permissible. For the year ended March 31, 2016, the Fund engaged in purchases and sales of securities, pursuant to Rule 17a-7 of the 1940 Act, as follows:

Fund	Purchases		Sales		Realized Gain
NASDAQ-100® Fund	$	457,281,266	$	461,997,100	$	25,907,289

10. Affiliated Transactions

Investments representing 5% or more of the outstanding voting shares of a portfolio company of a fund, or control of or by, or common control under GI, result in that portfolio company being considered an affiliated company of such fund, as defined in the 1940 Act.

THE RYDEX FUNDS ANNUAL REPORT | 39

NOTES TO FINANCIAL STATEMENTS (continued)

The Fund may invest in the Guggenheim Strategy Funds Trust consisting of Guggenheim Strategy Fund I, Guggenheim Strategy Fund II, Guggenheim Strategy Fund III, and Guggenheim Variable Insurance Strategy Fund III (collectively, the “Cash Management Funds”), open-end management investment companies managed by GI. The Cash Management Funds, which launched on March 11, 2014, are offered as cash management options only to mutual funds, trusts, and other accounts managed by GI and/or its affiliates, and are not available to the public. The Cash Management Funds pay no investment management fees. The Cash Management Funds’ annual report on Form N-CSR dated September 30, 2015 is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at http://www.sec.gov/Archives/edgar/data/1601445/000089180415000857/gug63224-ncsr.htm.

Transactions during the year ended March 31, 2016, in which the portfolio company is an “affiliated person”, were as follows:

Affiliated issuers by Fund	Value 03/31/15		Additions		Reductions			Value 03/31/16		Shares 03/31/16		Investment Income		Realized Loss
NASDAQ-100® Fund
Guggenheim Strategy Fund I	$	139,227,564	$	629,729,874	$	(705,300,000	)	$	63,012,120		2,539,787	$	1,879,658	$	(342,631	)
Guggenheim Strategy Fund II		—		141,431,387		(105,100,000	)		36,088,986		1,461,684		394,451		(154,285	)
	$	139,227,564	$	771,161,261	$	(810,400,000	)	$	99,101,106			$	2,274,109	$	(496,916	)

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 12, 2016. 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 1.31% for the year ended March 31, 2016. The Fund did not have any borrowings outstanding under this agreement at March 31, 2016.

Fund	Average Daily Balance
NASDAQ-100® Fund	$	1,439,381

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

40 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 May 23, 2014, the defendants filed motions to dismiss the FitzSimons action, including a global motion to dismiss Count I, which is the claim brought against former Tribune shareholders for intentional fraudulent conveyance under U.S. federal law. The Court has not yet issued a decision on any of these motions.

On March 29, 2016, the U.S. Court of Appeals for the Second Circuit issued its opinion on the appeal of the SLCFC actions. The appeals court affirmed the district court’s dismissal of those lawsuits, but on different grounds than the district court. The appeals court held that while the plaintiffs have standing under the U.S. Bankruptcy Code (which was the basis for the district court’s dismissal), their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments.

THE RYDEX FUNDS ANNUAL REPORT | 41

NOTES TO FINANCIAL STATEMENTS (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.) (the “Creditor Trust action”).

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.

On April 7, 2014, the plaintiff filed a Third Amended Complaint. In the related action entitled Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adversary Proceeding No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust action”), the plaintiff also filed a Second Amended Complaint that alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On May 8, 2014, the plaintiff in the Litigation Trust action filed a motion to certify a defendant class generally comprised of all former Lyondell shareholders that received proceeds in exchange for their shares in the 2007 merger transaction.

On July 30, 2014, the defendants filed a motion to dismiss all three lawsuits. The Court held an oral argument on the motions to dismiss and on the motion for class certification on January 14 and January 15, 2015. On September 15, 2015, the Bankruptcy Court denied the motion for class certification without prejudice to the plaintiff’s right to file a renewed motion. On November 18, 2015, the Bankruptcy Court granted the defendants’ motion to dismiss the Litigation Trust action and denied their motion to dismiss the Creditor Trust and Reichman actions. The Litigation Trust action is now over, but the plaintiff has appealed the dismissal to the U.S. District Court for the Southern District of New York. On May 4, 2016, the defendants filed a motion to dismiss, or in the alternative, for a stay of, the Creditor

42 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (concluded)

Trust and Reichman actions in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. The Bankruptcy Court has not yet issued a decision on the motion. Discovery has commenced, and will continue, in the Creditor Trust and Reichman actions while the May 4 motion is pending.

These lawsuits do 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; Long Short Equity Fund f/k/a 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. Conversion of Advisor Class Shares and Class H Shares

Effective following the close of business on September 30, 2015, all outstanding Advisor Class shares of the NASDAQ-100^® Fund were converted into Class H shares of the Fund. The conversion of all outstanding Advisor Class shares was effected by exchanging shareholders’ Advisor Class shares for Class H shares. Advisor Class shareholders of the Fund received Class H shares of the Fund with a value equal to the value of their investment in Advisor Class shares of the Fund on September 30, 2015.

THE RYDEX FUNDS ANNUAL REPORT | 43

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
of Rydex Series Funds:

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NASDAQ-100^® Fund (one of the series constituting the Rydex Series Funds) (the “Fund”) as of March 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2016, by correspondence with the custodian, transfer agent, and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of NASDAQ-100^® Fund (one of the series constituting the Rydex Series Funds) at March 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

McLean, Virginia
May 25, 2016

44 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)

Tax Information

This information is being provided as required by the Internal Revenue Code. Amounts shown may differ from those elsewhere in the report because of differences in tax and financial reporting practice.

Of the ordinary income distributions paid during the year, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
NASDAQ-100® Fund	12.39%

Additionally, the following amounts of taxable ordinary income dividends paid during the fiscal year qualified for the lower income tax rate available to individuals under the Jobs and Growth Tax Relief Reconciliation Act of 2003:

Fund	% Qualifying
NASDAQ-100® Fund	11.82%

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify as interest related dividends and qualified short-term capital gains as permitted by IRC Section 871(k)(1) and IRC Section 871(k)(2), respectively:

Fund	% Qualifying	% STCG Qualifying
NASDAQ-100® Fund	0.00%	100.00%

With respect to the taxable year ended March 31, 2016, the Fund hereby designates as capital gain dividends the amounts listed below, or, if subsequently determined to be different, the net capital gain of such year:

Fund	From long-term capital gains, subject to the 15% rate gains category:		From long-term capital gains, using proceeds from shareholder redemptions:
NASDAQ-100® Fund	$	—	$	130,749,775

THE RYDEX FUNDS ANNUAL REPORT | 45

OTHER INFORMATION (concluded)

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 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 800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.

Sector Classification

Information in the “Schedule of Investments” is categorized by sectors using sector-level Classifications defined by the Bloomberg Industry Classification System, a widely recognized industry classification system provider. Each Fund’s registration statement has investment policies relating to concentration in specific sectors/industries. For purposes of these investment policies, the Funds usually classify sectors/industries based on industry-level Classifications used by widely recognized industry classification system providers such as Bloomberg Industry Classification System, Global Industry Classification Standards and Barclays Global Classification Scheme.

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 800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 800.820.0888.

46 | THE RYDEX FUNDS 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 visiting guggenheiminvestments.com or by calling 800.820.0888.

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INTERESTED TRUSTEE
Donald C. Cacciapaglia** (1951)	Trustee from 2012 to present.	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group, Inc. (2002-2010).	237	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Corey A. Colehour (1945)	Trustee from 1993 to present; Member of the Audit Committee from 1994 to present; Member of the Governance Committee from 2014 to present; and Member of the Investment and Performance Committee from 2014 to present.	Retired.	133	None.

THE RYDEX FUNDS ANNUAL REPORT | 47

INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES - continued
J. Kenneth Dalton (1941)	Trustee from 1995 to present; Chairman and Member of the Audit Committee from 1997 to present; and Member of the Compliance and Risk Oversight Committee from 2010 to present.	Retired.	133	Epiphany Funds (4) (2009-present).
John O. Demaret (1940)	Vice Chairman of the Board from 2014 to present (Chairman of the Board from 2006 to 2014); Trustee and Member of the Audit Committee from 1997 to present; Chairman (since 2014) and Member of the Compliance and Risk Oversight Committee from 2010 to present; Chairman and Member of the Investment and Performance Committee from 2014 to present; and Member of the Nominating Committee from 2014 to present.	Retired.	133	None.
Werner E. Keller (1940)	Chairman of the Board from 2014 to present (Vice Chairman of the Board from 2010 to 2014); Trustee and Member of the Audit Committee from 2005 to present; and Member of the Investment and Performance Committee from 2014 to present.	Current: Founder and President, Keller Partners, LLC (investment research firm) (2005-present).	133	None.

48 | THE RYDEX FUNDS ANNUAL REPORT

INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES - concluded
Thomas F. Lydon, Jr. (1960)	Trustee and Member of the Audit Committee from 2005 to present; Member of the Nominating Committee from 2005 to present; and Member of the Governance Committee from 2007 to present.	Current: President, Global Trends Investments (registered investment adviser) (1996-present).	133	US Global Investors (GROW) (1995-present).
Patrick T. McCarville (1942)	Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; Chairman and Member of the Nominating Committee from 2004 to present; Chairman and Member of the Governance Committee from 2007 to present; and Member of the Compliance and Risk Oversight Committee from 2014 to present.	Retired. Former: Chief Executive Officer, Par Industries, Inc., d/b/a Par Leasing (1977-2010).	133	None.

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS
Donald C. Cacciapaglia (1951)	President (2012-present).	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group Inc. (2002-2010).

THE RYDEX FUNDS ANNUAL REPORT | 49

INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS - continued
Michael P. Byrum (1970)	Vice President (1999-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); President and Chief Investment Officer, Rydex Holdings, LLC (2008-present); Director and Chairman, Advisory Research Center, Inc. (2006-present); Manager, Guggenheim Specialized Products, LLC (2005-present). Former: Vice President, Guggenheim Distributors, LLC (2009); Director (2009-2010) and Secretary (2002-2010), Rydex Fund Services, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors II, LLC.
Nikolaos Bonos (1963)	Vice President and Treasurer (2003-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); Chief Executive Officer, Guggenheim Specialized Products, LLC (2009-present); Chief Executive Officer & President, Rydex Fund Services, LLC (2009-present); Vice President, Rydex Holdings, LLC (2008-present). Former: Senior Vice President, Security Global Investors, LLC (2010-2011); and Senior Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC (2006-2011).
Elisabeth Miller (1968)	Chief Compliance Officer (2012-present).	Current: CCO, certain other funds in the Fund Complex (2012-present); CCO, Security Investors, LLC (2012-present); CCO, Guggenheim Funds Investment Advisors, LLC (2012-present); Managing Director, Guggenheim Investments (2012-present); Vice President, Guggenheim Funds Distributors, LLC (March 2014-present). Former: CCO, Guggenheim Distributors, LLC (2009-March 2014); Senior Manager, Security Investors, LLC (2004-2009); Senior Manager, Guggenheim Distributors, LLC (2004-2009).

50 | THE RYDEX FUNDS ANNUAL REPORT

INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(concluded)

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS - concluded
Joseph M. Arruda (1966)	Assistant Treasurer (2006-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2006-present); Vice President, Security Investors, LLC (2010-present); CFO and Manager, Guggenheim Specialized Products, LLC (2009-present). Former: Vice President, Security Global Investors, LLC (2010-2011); Vice President, Rydex Advisors, LLC (2010); Vice President, Rydex Advisors II, LLC (2010).
Paul J. Davio (1972)	Assistant Treasurer (2014-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2014-present); Director, Guggenheim Investments (2006-present). Former: Manager, Mutual Fund Administration, Guggenheim Investments (2003-2006).
Amy J. Lee (1961)	Vice President (2009-present) and Secretary (2012-present).	Current: Chief Legal Officer, certain other funds in the Fund Complex (2013-present); Senior Managing Director, Guggenheim Investments (2012-present). Former: Vice President, Associate General Counsel and Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (2004-2012).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
**	Mr. Cacciapaglia is an “interested” person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Adviser’s parent company.
***	The “Fund Complex” includes all closed-end and open-end funds (including all of their portfolios) advised by the Adviser and any funds that have an investment adviser or servicing agent that is an affiliated person of the Adviser. Information provided is as of the date of this report.

THE RYDEX FUNDS ANNUAL REPORT | 51

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Funds Distributors, LLC, Security Investors, LLC, Security Distributors, Inc., Guggenheim Partners Investment Managers, LLC, 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

52 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(continued)

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.

THE RYDEX FUNDS ANNUAL REPORT | 53

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(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.

54 | THE RYDEX FUNDS ANNUAL REPORT

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3.31.2016

Rydex Funds Annual Report

Guggenheim Alternatives Funds

Guggenheim Long Short Equity 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

Rydex Fixed Income Fund

Rydex Emerging Markets Bond Strategy Fund

RSTF-ANN-0316x0317 guggenheiminvestments.com

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	4
A BRIEF NOTE ON THE COMPOUNDING OF RETURNS	6
ABOUT SHAREHOLDERS’ FUND EXPENSES	7
LONG SHORT EQUITY FUND	10
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND	23
EMERGING MARKETS 2x STRATEGY FUND	38
INVERSE EMERGING MARKETS 2x STRATEGY FUND	46
EMERGING MARKETS BOND STRATEGY FUND	53
NOTES TO FINANCIAL STATEMENTS	61
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	78
OTHER INFORMATION	79
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	80
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	83

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2016

Dear Shareholder:

Security Investors, LLC (the “Investment Adviser”) is pleased to present the annual shareholder report for a selection of our alternative strategy Funds (the “Funds”) for the one-year period ended March 31, 2016.

The Investment Adviser is part of Guggenheim Investments, which represents the investment management businesses of Guggenheim Partners, LLC (“Guggenheim”), a global, diversified financial services firm.

Guggenheim Funds Distributors, LLC is the distributor of the Funds. Guggenheim Funds Distributors, LLC is affiliated with Guggenheim and the Investment Adviser.

We encourage you to read the Economic and Market Overview section of the report, which follows this letter, and then the Performance Report and 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
April 30, 2016

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.

Alternative funds may not be suitable for all investors because of the sophisticated and aggressive investment techniques the funds employ, such as leverage, derivatives and short selling. ● The more you invest in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● The use of short selling involves increased risks and costs. You risk paying more for a security than you received from its sale. Theoretically, stocks sold short have the risk of unlimited losses. ● The use of derivatives such as futures, options and swap agreements may expose an investment to additional risks that it would not be subject to if you invested directly in the securities underlying those derivatives. ● Additionally, certain alternative strategies tied to hard assets such as commodities, currencies and real estate, may be subject to greater volatility as they may be affected by overall market movements, changes in interest rates or factors affecting a particular industry, commodity or currency, such as droughts, floods, weather, livestock disease, embargos, tariff s and international economic, political and regulatory developments. ● No investment strategy can guarantee a return in a declining market. Additionally, an investor could lose all or a substantial amount of their investment.

The Long Short Equity Fund may not be suitable for all investors. ● The Fund is subject to the risk that the Adviser’s use of a momentum-driven investment strategy may cause the Fund to underperform other types of mutual funds that use different investment strategies during periods when momentum investing is out of favor. ● It is possible that the stocks the Fund holds long will decline in value at the same time that the stocks or indices being shorted increase in value, thereby increasing potential losses to the Fund. ● The Fund’s loss on a short sale is potentially unlimited because there is no upper limit on the price a borrowed security could attain. ● The more the Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● The use of derivatives, such as futures, options and swap agreements, may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. ● The Fund may invest in American Depositary Receipts (“ADRs”) therefore subjecting the value of the Fund’s portfolio to fluctuations in foreign exchange rates. ● This Fund is considered nondiversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of Fund shares than would occur in a more diversified fund. See the prospectus for more information on these and additional risks.

The Event Driven and Distressed Strategies Fund is subject to a number of risks and is not suitable for all investors. ● The Fund’s use of derivatives such as futures, options, structured notes, exchange-traded notes and swap agreements may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. ● Certain of the derivative instruments, such as swaps and structured notes, are also subject to the risks of counterparty default and adverse tax treatment. ● The Fund’s use of short selling involves increased risk and costs, including paying more for a security than it received from its sale and the risk of unlimited losses. ● The more the Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● The Fund’s investments in foreign markets may increase the Fund’s volatility due to the impact of diplomatic, political or economic developments on the country in question. ● Additionally, the Fund’s 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.

2 | THE RYDEX FUNDS ANNUAL REPORT

March 31, 2016

dollar will decline in value relative to the currencies. ● The Fund’s fixed income investments will change in value in response to interest rate changes and other factors. ● The Fund’s exposure to the high yield bond market may subject the Fund to greater volatility because (i) it will be affected by the ability of high yield security issuers’ ability to make principal and interest payments and (ii) the prices of derivatives linked to high yield bonds may fluctuate unpredictably and not necessarily in relation to interest rates. ● The Fund’s exposure to the event driven market is considered speculative and may subject the Fund to additional losses. ● In certain circumstances the Fund may be subject to liquidity risk and it may be difficult for the Fund to purchase and sell particular investments within a reasonable time at a fair price. ● This Fund is considered non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of Fund shares than would occur in a more diversified Fund. See the prospectus for more information on these and additional risks.

Inverse and leveraged Funds are not suitable for all investors. ● These Funds should be utilized only by investors who (a) understand the risks associated with the use of leverage, (b) understand the consequences of seeking daily leveraged investment results, (c) understand the risk of shorting, and (d) intend to actively monitor and manage their investments. ● The more a Fund invests in leveraged instruments, the more the leverage will magnify any gains or losses on those investments. ● Inverse Funds involve certain risks, which include increased volatility due to the Funds’ possible use of short sales of securities and derivatives, such as options and futures. ● The Funds’ use of derivatives, such as futures, options and swap agreements, may expose the Funds’ shareholders to additional risks that they would not be subject to if they invested directly in the securities underlying those derivatives. ● Short-selling involves increased risks and costs. You risk paying more for a security than you received from its sale. ● Leveraged and inverse Funds seek to provide investment results that match the performance of a specific benchmark, before fees and expenses, on a daily basis. Because the 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. 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. The Funds rebalance their portfolios on a daily basis, increasing exposure in response to that day’s gains or reducing exposure in response to that day’s losses. Daily rebalancing will impair a fund’s performance if the benchmark experiences volatility. Investors should monitor their leveraged and inverse Funds’ holdings consistent with their strategies, as frequently as daily. ● For more on these and other risks, please read the prospectus. ● The leveraged and Inverse Emerging Markets Funds’ investments in developed and emerging foreign markets may increase the Funds’ volatility due to the impact of diplomatic, political or economic developments on the country in question. ● Additionally, the Funds’ direct and indirect exposure to foreign currencies subjects the Funds 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 currencies. ● A Fund’s investment in the securities of non-U.S. companies in the form of American Depositary Receipts (ADRs) poses special risks associated with international investing, including fluctuating exchange rates, government regulations and differences in liquidity, which may affect the volatility and performance of a fund.

The Emerging Markets Bond Strategy Fund may not be suitable for all investors. Investments in securities, in general, are subject to market risks that may cause their prices to fluctuate over time. An investment in the Fund may lose money. ● The Fund’s investments in bonds and financial instruments that in combination have economic characteristics similar to emerging markets bonds carries additional risks when compared to investing in U.S. securities, due to the impact of diplomatic, political or economic developments in the country in question. ● The Fund’s investments in derivatives, including credit default swaps, may pose risks in addition to those associated with investing directly in securities or other investments, including illiquidity of the derivatives, imperfect correlations with underlying investments or the Fund’s other portfolio holdings, lack of availability and counterparty risk. To the extent the Fund invests in derivatives to seek to hedge risk or limit leveraged exposure created by other investments, there is no guarantee that such hedging strategies will be effective at managing risk or limiting exposure to leveraged investments. ● The Fund’s exposure to high yield securities may subject the Fund to greater volatility. ● The Fund’s market value will change in response to interest rate changes and market conditions among other factors. In general, bond prices rise when interest rates fall and vice versa. ● The Fund’s investments in bank obligations may expose it to adverse developments in or related to the banking industry. ● The Funds use of leverage will exaggerate the effect on net asset value of any increase or decrease in the market value of the Fund’s portfolio. ● The 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. ● The Fund’s investments in other investment vehicles subject the Fund to those risks and expenses affecting the investment vehicle. ● This Fund is considered non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single security could cause greater fluctuations in the value of fund shares than would occur in a more diversified fund. ● See the prospectus for more information on these and other risks.

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited) March 31, 2016

Financial markets were buffeted by a variety of events over the past year, including volatility in the oil market, weak growth and a devaluation in China, ongoing stimulus from global central banks, and a delayed September rate hike by the U.S. Federal Reserve (the “Fed”)—and then capped by a 25 basis point increase in the U.S. federal funds target rate in December. While the direct impact of the move was fairly insignificant, the decision to begin normalization of interest rates after seven years of unprecedented liquidity provision was not. Indeed, in 2015, risk assets posted their worst annual performance since the 2008 financial crisis, as market participants’ expectations for the start of rate hikes collided with concern about plunging commodity prices, and slowing economic growth in China and other emerging market economies.

As 2016 began, forecasts for U.S. and global economic growth were downgraded, and recession fears surged along with market volatility. Estimates for first quarter gross domestic product (“GDP”) in the U.S. were marked down, even though first quarter GDP has undershot full-year growth rates in six out of the last seven years. Risk assets rallied in the last half of the first quarter, led by a dovish pivot in the Fed’s communication that spurred a rally in crude oil and a reversal of dollar strength. The weaker dollar, along with optimism about a production freeze agreed to by a group of major oil producing countries, helped oil to rebound. After falling in the early weeks of the year to a cycle low of $26 per barrel on February 11, 2016, the front-month West Texas Intermediate (“WTI”) oil futures contract rallied as high as $40 per barrel before closing the quarter at $38 per barrel.

The outlook for economic growth outside the U.S. softened in the first quarter. A further deterioration in the euro zone inflation outlook prompted the European Central Bank (“ECB”) to announce an increase in the size of its monthly asset purchases and reduce its deposit rate to -40 basis points. European government bonds rallied following the announcement, with the 10-year German bund ending the first quarter with a yield of just 16 basis points.

Ongoing stimulus efforts in Asia also appeared likely to contribute to low U.S. rates. Chinese industrial production growth continued to slow in early 2016, prompting the People’s Bank of China (“PBOC”) to stimulate credit growth by allowing banks to hold fewer reserves against deposits. And after years of struggling with stagnant growth and low inflation, the Bank of Japan (“BOJ”) surprised markets by cutting its key interest rate to -10 basis points in January. The negative rates pushed a considerable amount of Japanese savings into foreign markets.

In an environment where global rates are moving lower and markets are already starved for yield, foreign investors began looking to the U.S. Guggenheim expects that U.S. Treasury yields will fall further as the gravitational pull of global yields gets stronger, and does not discount the possibility of 10-year U.S. Treasury yields declining to closer to 1 percent before the end of the year.

A stronger dollar has weighed on the U.S. economy, but consumer spending has been resilient. The labor market is now operating near full employment, and tight labor market conditions are beginning to spur faster wage growth. We believe the U.S. economy is fundamentally sound, and find little evidence to support the conclusion that the economy will fall into a recession in 2016.

Despite the relative health of the U.S. economy, markets are concerned that sluggish global growth will hold back the U.S. expansion, that inflation will remain below the Fed’s target for longer, and that tighter conditions in credit markets have raised recession risks. Our view is that the Fed remains focused on fulfilling its dual mandate objectives of maximum employment and price stability, and thus is biased toward normalizing policy. We expect further declines in the unemployment rate as job gains outstrip growth in the labor force. Meanwhile, core and headline inflation should move closer to the Fed’s target by year end, reflecting our forecasts for a tighter labor market and a modest rise in oil prices. Normally, this would result in at least two Fed rate hikes on the table for 2016, but the U.S. Fed is becoming more sensitive to global financial conditions and the extent of global money flows that occur as monetary policy in the U.S. diverges from Europe, Japan and China. As a result, we have reduced our expectations for a June rate hike, although it would normally be an easy call. We continue to believe a December rate hike is a near certainty. A solid macroeconomic backdrop and a rebalancing oil market should support an improving credit picture in the second half of 2016.

For the 12 months ended March 31, 2016, the Standard & Poor’s 500^® (“S&P 500”) Index* returned 1.78%. The Morgan Stanley Capital International (“MSCI”) Europe-Australasia-Far East (“EAFE”) Index* returned -8.27%. The return of the MSCI Emerging Markets Index* was -12.03%.

4 | THE RYDEX FUNDS ANNUAL REPORT

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2016

In the bond market, the Barclays U.S. Aggregate Bond Index* posted a 1.96% return for the period, while the Barclays U.S. Corporate High Yield Index* returned -3.69%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.12% for the 12-month period.

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.

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.

Barclays U.S. Corporate High Yield Index measures the market of U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below.

BofA 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.

MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada.

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.

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.

BofA Merrill Lynch U.S. Dollar Emerging Markets Sovereign Plus Index tracks the performance of U.S. dollar-denominated emerging market and crossover sovereign debt publicly issued in the eurobond or U.S. domestic market. Qualifying countries must have a BBB1 or lower foreign currency long-term sovereign debt rating (based on an average of Moody’s, S&P and Fitch). Countries that are not rated, or that are rated “D” or “SD” by one or several rating agencies qualify for inclusion in the index but individual non-performing securities are removed. Qualifying securities must have at least one year remaining term to final maturity, at least 18 months to maturity at point of issuance, a fixed or floating coupon and a minimum amount outstanding of $250 million. Local currency debt is excluded from the Index. Index constituents are capitalization-weighted based on their current amount outstanding times the market price plus accrued interest.

BNY Mellon Emerging Markets 50 ADR Index is capitalization-weighted and designed to track the performance of approximately 50 emerging market-based depositary receipts.

Credit Suisse Event Driven Liquid Index reflects the returns of a dynamic basket of liquid, investable market factors selected and weighted in accordance with an algorithm that aims to approximate the aggregate returns of the universe of event driven hedge fund managers, as represented by the Event Driven sector of the Dow Jones Credit Suisse Hedge Fund Index.

HFRX Equity Hedge Index is designed to be representative of the overall composition of the equity hedge segment of the hedge fund universe. In an equity hedge strategy both long and short positions primarily in equities are maintained. Equities which are believed to be undervalued are bought and equities which are believed to be overvalued are sold.

Russell 3000^® Index measures the performance of the largest 3000 U.S. companies, representing approximately 98% of the investable U.S. equity market.

THE RYDEX FUNDS ANNUAL REPORT | 5

A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited) March 31, 2016

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 Level	Index Performance	Fund Expectation	Fund NAV	Fund 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.

6 | THE RYDEX FUNDS 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 September 30, 2015 and ending March 31, 2016.

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 up to the past five years (subject to the Fund’s inception date), 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 ANNUAL REPORT | 7

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 1. Based on actual Fund return3
Long Short Equity Fund
A-Class	2.61%	(2.24%)	$ 1,000.00	$ 977.60	$ 12.90
C-Class	3.36%	(2.63%)	1,000.00	973.70	16.58
P-Class	2.61%	(2.23%)	1,000.00	977.70	12.90
Institutional Class	2.35%	(2.15%)	1,000.00	978.50	11.62
Event Driven and Distressed Strategies Fund
A-Class	1.90%	3.83%	1,000.00	1,038.30	9.68
C-Class	2.66%	3.42%	1,000.00	1,034.20	13.53
P-Class	1.90%	3.83%	1,000.00	1,038.30	9.68
Institutional Class	1.65%	3.97%	1,000.00	1,039.70	8.41
Emerging Markets 2x Strategy Fund
A-Class	1.76%	18.90%	1,000.00	1,189.00	9.63
C-Class	2.49%	18.40%	1,000.00	1,184.00	13.60
H-Class	1.76%	18.94%	1,000.00	1,189.40	9.63
Inverse Emerging Markets 2x Strategy Fund
A-Class	1.75%	(26.85%)	1,000.00	731.50	7.58
C-Class	2.54%	(27.15%)	1,000.00	728.50	10.98
H-Class	1.74%	(26.61%)	1,000.00	733.90	7.54
Emerging Markets Bond Strategy Fund
A-Class	1.58%	8.76%	1,000.00	1,087.60	8.25
C-Class	2.33%	7.70%	1,000.00	1,077.00	12.10
H-Class	1.58%	8.40%	1,000.00	1,084.00	8.23

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2015	Ending Account Value March 31, 2016	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
Long Short Equity Fund
A-Class	2.61%	5.00%	$ 1,000.00	$ 1,011.95	$ 13.13
C-Class	3.36%	5.00%	1,000.00	1,008.20	16.87
P-Class	2.61%	5.00%	1,000.00	1,011.95	13.13
Institutional Class	2.35%	5.00%	1,000.00	1,013.25	11.83
Event Driven and Distressed Strategies Fund
A-Class	1.90%	5.00%	1,000.00	1,015.50	9.57
C-Class	2.66%	5.00%	1,000.00	1,011.70	13.38
P-Class	1.90%	5.00%	1,000.00	1,015.50	9.57
Institutional Class	1.65%	5.00%	1,000.00	1,016.75	8.32
Emerging Markets 2x Strategy Fund
A-Class	1.76%	5.00%	1,000.00	1,016.20	8.87
C-Class	2.49%	5.00%	1,000.00	1,012.55	12.53
H-Class	1.76%	5.00%	1,000.00	1,016.20	8.87
Inverse Emerging Markets 2x Strategy Fund
A-Class	1.75%	5.00%	1,000.00	1,016.25	8.82
C-Class	2.54%	5.00%	1,000.00	1,012.30	12.78
H-Class	1.74%	5.00%	1,000.00	1,016.30	8.77
Emerging Markets Bond Strategy Fund
A-Class	1.58%	5.00%	1,000.00	1,017.10	7.97
C-Class	2.33%	5.00%	1,000.00	1,013.35	11.73
H-Class	1.58%	5.00%	1,000.00	1,017.10	7.97

¹ Annualized and excludes expenses of the underlying funds in which the Funds invest. This ratio represents Net Expenses, which includes interest and dividend expense related to securities sold short. Excluding these expenses, the operating expense ratios would be:

	Long Short Equity Fund
A-Class	1.67%
C-Class	2.42%
P-Class	1.67%
Institutional Class	1.42%

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 183/366 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2015 to March 31, 2016.

THE RYDEX FUNDS ANNUAL REPORT | 9

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

LONG SHORT EQUITY FUND

OBJECTIVE: Seeks long-term capital appreciation.

For the one-year period ended March 31, 2016, the Long Short Equity Fund P-Class returned -5.55%. The Fund’s benchmark, the HFRX Equity Hedge Index, returned -7.24%.

The Fund had annualized risk of 7.4%, which was marginally higher than the 7.2% annualized risk of the HFRX Equity Hedge Fund Index. Realized beta for the Fund came in at 0.70 relative to the benchmark for this one-year period.

On a gross return basis, risk factors contributed 2.50% to fund performance. An average net short position to the Price Volatility factor and an average net long position to the Relative Strength factor contributed 1.80% and 0.78%, respectively. An average net short position to the Book/Price factor detracted -0.27%, while an average net long position to the Earnings Variability factor detracted -0.24%. The Fund’s average forecast beta of 47% was the greatest detractor at -4.15%. Stock specific risk added 1.45% on a gross basis for the year.

Industry factors detracted -2.12% on a gross basis. Average net long positions to companies in the Tobacco and Computer Software industries contributed 0.32% and 0.27%, respectively. Average net long positions to companies in the Drugs and Retail Soft Goods industries detracted -0.42% and -0.36%, respectively.

For the year, the Fund’s average long exposure was 83.2% of fund assets, while its corresponding short exposure was -38.8%.

The Fund invests excess cash into the Guggenheim Strategy Funds which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one-year period ended March 31, 2016, investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

 

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Inception Dates:
A-Class	March 31, 2004
C-Class	March 22, 2002
P-Class**	March 22, 2002
Institutional Class	November 30, 2011

Cumulative Fund Performance*

Ten Largest Long Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	4.0%
Blue Buffalo Pet Products, Inc.	0.6%
White Mountains Insurance Group Ltd.	0.6%
Columbia Pipeline Group, Inc.	0.6%
WESCO International, Inc.	0.5%
Computer Sciences Corp.	0.5%
Eagle Materials, Inc.	0.5%
Armstrong World Industries, Inc.	0.5%
Masco Corp.	0.5%
Wynn Resorts Ltd.	0.5%
Top Ten Total	8.8%
“Ten Largest Long Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	10 Year
A-Class Shares	-5.57%	1.41%	1.73%
A-Class Shares with sales charge†	-10.08%	0.43%	1.24%
C-Class Shares	-6.28%	0.66%	0.98%
C-Class Shares with CDSC‡	-7.22%	0.66%	0.98%
P-Class Shares	-5.55%	1.42%	1.74%
S&P 500 Index	1.78%	11.58%	7.01%
HFRX Equity Hedge Index	-7.24%	-1.33%	-1.13%
		1 Year	Since Inception (11/30/11)
Institutional Class Shares		-5.37%	5.33%
S&P 500 Index		1.78%	14.70%
HFRX Equity Hedge Index		-7.24%	2.45%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The HFRX Equity Hedge Index and the S&P 500 Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on A-Class shares and P-Class shares only; performance for C-Class shares and Institutional Class shares will vary due to differences in fee structure.
**	H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 11

SCHEDULE OF INVESTMENTS	March 31, 2016
LONG SHORT EQUITY FUND

	Shares		Value
COMMON STOCKS† - 78.3%
Consumer, Non-cyclical - 24.8%
Blue Buffalo Pet Products, Inc.*,1		12,881	$	330,526
General Mills, Inc.1		4,206		266,449
Danaher Corp.1		2,800		265,608
Teleflex, Inc.1		1,691		265,503
Abbott Laboratories1		6,345		265,411
Hain Celestial Group, Inc.*,1		6,454		264,033
Philip Morris International, Inc.1		2,642		259,207
Sysco Corp.1		5,546		259,165
Coca-Cola Co.1		5,585		259,088
McGraw Hill Financial, Inc.1		2,600		257,348
Bunge Ltd.1		4,528		256,602
PepsiCo, Inc.1		2,500		256,200
Pilgrim’s Pride Corp.*		10,076		255,930
Tyson Foods, Inc. — Class A1		3,838		255,841
Molson Coors Brewing Co. — Class B1		2,656		255,454
Bio-Techne Corp.1		2,700		255,204
VWR Corp.*,1		9,423		254,986
Baxter International, Inc.1		6,178		253,792
Sabre Corp.1		8,772		253,686
Kraft Heinz Co.1		3,220		252,963
Ingredion, Inc.1		2,359		251,918
Kimberly-Clark Corp.1		1,872		251,803
Colgate-Palmolive Co.1		3,561		251,585
Charles River Laboratories International, Inc.*,1		3,300		250,603
Moody’s Corp.1		2,590		250,090
Church & Dwight Company, Inc.1		2,708		249,623
JM Smucker Co.1		1,915		248,644
Quintiles Transnational Holdings, Inc.*,1		3,800		247,380
Altria Group, Inc.1		3,935		246,567
Cooper Companies, Inc.1		1,600		246,352
Brown-Forman Corp. — Class B1		2,500		246,175
Bio-Rad Laboratories, Inc. — Class A*,1		1,800		246,096
WhiteWave Foods Co. — Class A*,1		6,041		245,506
ManpowerGroup, Inc.1		3,000		244,260
Procter & Gamble Co.1		2,964		243,967
Bruker Corp.1		8,700		243,600
Clorox Co.1		1,904		240,018
Archer-Daniels-Midland Co.1		6,597		239,537
Hill-Rom Holdings, Inc.1		4,762		239,529
Whole Foods Market, Inc.1		7,698		239,485
Robert Half International, Inc.1		5,100		237,558
Reynolds American, Inc.1		4,713		237,111
Constellation Brands, Inc. — Class A1		1,569		237,060
Mondelez International, Inc. — Class A1		5,901		236,748
Monster Beverage Corp.*,1		1,715		228,747
Dr Pepper Snapple Group, Inc.1		2,524		225,696
Thermo Fisher Scientific, Inc.1		1,500		212,385
Illumina, Inc.*,1		1,300		210,743
ResMed, Inc.1		3,164		182,942
DexCom, Inc.*,1		2,502		169,911
Aaron’s, Inc.1		6,431		161,418
QIAGEN N.V.*,1		5,027		112,303
Community Health Systems, Inc.*,1		5,529		102,342
Morningstar, Inc.1		1,000		88,270
Sprouts Farmers Market, Inc.*,1		2,995		86,975
IDEXX Laboratories, Inc.*,1		181		14,176
Total Consumer, Non-cyclical				12,910,119
Industrial - 11.5%
Eagle Materials, Inc.		3,941		276,304
Armstrong World Industries, Inc.*,1		5,700		275,710
Masco Corp.1		8,621		271,130
Lennox International, Inc.1		1,992		269,298
Cummins, Inc.1		2,431		267,264
3M Co.1		1,587		264,441
USG Corp.*,1		10,639		263,954
Carlisle Companies, Inc.1		2,646		263,277
Roper Technologies, Inc.1		1,433		261,909
General Electric Co.1		8,200		260,678
BWX Technologies, Inc.1		7,650		256,734
Agilent Technologies, Inc.1		6,400		255,040
B/E Aerospace, Inc.1		5,504		253,844
Triumph Group, Inc.1		7,852		247,181
Owens Corning1		5,225		247,038
L-3 Communications Holdings, Inc.1		2,066		244,821
Energizer Holdings, Inc.1		6,000		243,060
PerkinElmer, Inc.1		4,900		242,354
General Dynamics Corp.1		1,820		239,094
Orbital ATK, Inc.1		2,691		233,956
Spirit AeroSystems Holdings, Inc. — Class A*,1		5,129		232,651
Joy Global, Inc.1		14,051		225,800
Trinity Industries, Inc.1		11,158		204,303
Fitbit, Inc. — Class A*,1		9,625		145,819
Stericycle, Inc.*,1		824		103,981
ITT Corp.1		2,706		99,824
AGCO Corp.1		315		15,656
Total Industrial				6,165,121
Financial - 10.6%
White Mountains Insurance Group Ltd.1		400		321,039
Rayonier, Inc.1		10,743		265,137
CME Group, Inc. — Class A1		2,700		259,335
Prudential Financial, Inc.1		3,557		256,886
Loews Corp.1		6,500		248,690
MFA Financial, Inc.1		36,130		247,490
Taubman Centers, Inc.1		3,444		245,316
Assured Guaranty Ltd.1		9,690		245,157
Lincoln National Corp.1		6,254		245,157
Chimera Investment Corp.1		17,950		243,941
MetLife, Inc.1		5,549		243,823
Old Republic International Corp.1		13,080		239,102
Macerich Co.1		3,000		237,720
American Financial Group, Inc.1		3,369		237,077
CBOE Holdings, Inc.1		3,506		229,047
CNA Financial Corp.1		6,600		212,388

12 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
LONG SHORT EQUITY FUND

	Shares		Value
Allied World Assurance Company Holdings AG1		5,800	$	202,652
Genworth Financial, Inc. — Class A*,1		74,044		202,140
Nasdaq, Inc.1		3,034		201,397
Two Harbors Investment Corp.1		23,908		189,830
Intercontinental Exchange, Inc.1		800		188,112
CIT Group, Inc.		6,000		186,180
Citigroup, Inc.1		4,200		175,350
Cullen/Frost Bankers, Inc.1		1,800		99,198
Validus Holdings Ltd.1		1,900		89,661
NorthStar Realty Europe Corp.1		5,400		62,640
Total Financial				5,574,465
Consumer, Cyclical - 9.1%
WESCO International, Inc.*,1		5,191		283,793
Wynn Resorts Ltd.1		2,900		270,947
Brunswick Corp.1		5,512		264,467
Genuine Parts Co.1		2,654		263,701
Polaris Industries, Inc.1		2,650		260,972
Mattel, Inc.1		7,759		260,858
Six Flags Entertainment Corp.1		4,690		260,248
Hasbro, Inc.1		3,191		255,599
Hyatt Hotels Corp. — Class A*,1		5,162		255,467
Darden Restaurants, Inc.1		3,828		253,796
Wal-Mart Stores, Inc.1		3,577		244,989
Vista Outdoor, Inc.*,1		4,683		243,095
CST Brands, Inc.1		6,340		242,759
Chipotle Mexican Grill, Inc. — Class A*,1		470		221,356
Fossil Group, Inc.*,1		4,815		213,882
Michael Kors Holdings Ltd.*,1		2,706		154,134
Copa Holdings S.A. — Class A1		2,100		142,275
Ralph Lauren Corp. — Class A1		1,264		121,673
Coach, Inc.1		2,682		107,521
Nu Skin Enterprises, Inc. — Class A		2,700		103,275
Walgreens Boots Alliance, Inc.1		1,171		98,645
American Airlines Group, Inc.1		2,400		98,424
Best Buy Company, Inc.1		1,750		56,770
Total Consumer, Cyclical				4,678,646
Utilities - 8.1%
Vectren Corp.1		5,291		267,512
Edison International1		3,720		267,431
Exelon Corp.1		7,457		267,408
Public Service Enterprise Group, Inc.1		5,600		263,984
PG&E Corp.1		4,399		262,708
Atmos Energy Corp.1		3,516		261,098
UGI Corp.1		6,478		260,999
MDU Resources Group, Inc.1		13,256		257,962
SCANA Corp.1		3,657		256,539
Ameren Corp.1		5,100		255,510
National Fuel Gas Co.1		5,075		254,004
Aqua America, Inc.1		7,877		250,647
American Water Works Company, Inc.1		3,623		249,733
Southern Co.1		4,754		245,924
OGE Energy Corp.1		7,133		204,218
NiSource, Inc.1		5,960		140,418
DTE Energy Co.1		1,184		107,341
Sempra Energy1		964		100,304
Total Utilities				4,173,740
Technology - 6.2%
Computer Sciences Corp.1		8,149		280,245
Xerox Corp.1		23,724		264,760
Dun & Bradstreet Corp.1		2,514		259,143
CA, Inc.1		8,384		258,143
Synopsys, Inc.*,1		5,200		251,888
Genpact Ltd.*,1		9,230		250,964
DST Systems, Inc.1		2,156		243,132
Microsoft Corp.1		4,400		243,012
Intel Corp.1		7,500		242,625
Cadence Design Systems, Inc.*,1		9,625		226,958
Leidos Holdings, Inc.1		4,477		225,283
Pitney Bowes, Inc.1		9,897		213,181
Tableau Software, Inc. — Class A*,1		2,800		128,436
Linear Technology Corp.1		576		25,667
Accenture plc — Class A1		100		11,540
Total Technology				3,124,977
Communications - 3.8%
Telephone & Data Systems, Inc.1		9,000		270,810
Netflix, Inc.*,1		2,471		252,610
John Wiley & Sons, Inc. — Class A1		4,899		239,512
Expedia, Inc.1		2,200		237,205
Amazon.com, Inc.*,1		394		233,894
Symantec Corp.1		12,242		225,009
FireEye, Inc.*,1		11,956		215,088
Groupon, Inc. — Class A*,1		51,875		206,981
CenturyLink, Inc.1		3,500		111,860
Gannett Company, Inc.1		1,488		22,528
United States Cellular Corp.*,1		200		9,138
Total Communications				2,024,635
Energy - 3.7%
Columbia Pipeline Group, Inc.1		12,678		318,217
Marathon Oil Corp.1		22,153		246,784
Kinder Morgan, Inc.1		13,424		239,753
Murphy USA, Inc.*,1		3,742		229,946
Cheniere Energy, Inc.*,1		6,535		221,079
Murphy Oil Corp.1		7,200		181,368
PBF Energy, Inc. — Class A1		5,100		169,320
Valero Energy Corp.1		2,100		134,694
Exxon Mobil Corp.1		800		66,872
SM Energy Co.1		2,800		52,472
Noble Corporation plc1		2,014		20,845
HollyFrontier Corp.1		100		3,532
Total Energy				1,884,882

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 13

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
LONG SHORT EQUITY FUND

	Shares		Value
Basic Materials - 0.5%
LyondellBasell Industries N.V. — Class A1		1,400	$	119,811
United States Steel Corp.1		5,969		95,802
Mosaic Co.1		2,319		62,613
Total Basic Materials				278,226
Total Common Stocks
(Cost $39,945,827)				40,814,811
MUTUAL FUNDS† - 4.0%
Guggenheim Strategy Fund I2		82,824		2,054,852
Guggenheim Strategy Fund II2		571		14,088
Total Mutual Funds
(Cost $2,079,755)				2,068,940

	Face Amount
REPURCHASE AGREEMENTS††,3 - 13.7%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	5,253,495		5,253,495
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		1,786,411		1,786,411
Total Repurchase Agreements
(Cost $7,039,906)				7,039,906
Total Investments - 96.0%
(Cost $49,065,488)			$	49,923,657

	Shares
COMMON STOCKS SOLD SHORT† - (44.2)%
Utilities - (0.5)%
Calpine Corp.*		7,811	(118,493	)
AES Corp.		11,443	(135,027	)
Total Utilities			(253,520	)
Basic Materials - (2.9)%
Eastman Chemical Co.		628	(45,360	)
NewMarket Corp.		288	(114,123	)
International Flavors & Fragrances, Inc.		1,020	(116,045	)
Monsanto Co.		1,338	(117,396	)
Compass Minerals International, Inc.		1,661	(117,698	)
PPG Industries, Inc.		1,060	(118,179	)
Ecolab, Inc.		1,092	(121,780	)
Sherwin-Williams Co.		450	(128,102	)
Praxair, Inc.		1,131	(129,443	)
Domtar Corp.		3,370	(136,485	)
Valspar Corp.		1,538	(164,596	)
Allegheny Technologies, Inc.		11,793	(192,226	)
Total Basic Materials			(1,501,433	)
Technology - (3.1)%
Rackspace Hosting, Inc.*		602	(12,997	)
Inovalon Holdings, Inc. — Class A*		919	(17,020	)
SS&C Technologies Holdings, Inc.		894	(56,697	)
Cerner Corp.*		1,629	(86,272	)
Akamai Technologies, Inc.*		2,223	(123,533	)
IMS Health Holdings, Inc.*		4,745	(125,980	)
NetApp, Inc.		4,754	(129,737	)
Apple, Inc.		1,194	(130,134	)
Broadcom Ltd.		845	(130,553	)
IPG Photonics Corp.*		1,385	(133,071	)
HP, Inc.		11,050	(136,136	)
Hewlett Packard Enterprise Co.		8,000	(141,840	)
Lexmark International, Inc. — Class A		4,372	(146,156	)
NCR Corp.*		5,000	(149,650	)
Total Technology			(1,519,776	)
Communications - (3.3)%
DISH Network Corp. — Class A*		394	(18,226	)
LinkedIn Corp. — Class A*		274	(31,332	)
Level 3 Communications, Inc.*		697	(36,836	)
Yahoo!, Inc.*		1,248	(45,939	)
CommScope Holding Company, Inc.*		1,800	(50,256	)
Alphabet, Inc. — Class C*		78	(58,106	)
Alphabet, Inc. — Class A*		78	(59,506	)
Zillow Group, Inc. — Class C*		2,653	(62,956	)
Zillow Group, Inc. — Class A*		2,494	(63,722	)
Viacom, Inc. — Class B		2,535	(104,645	)
Twitter, Inc.*		6,380	(105,589	)
eBay, Inc.*		4,518	(107,799	)
Time Warner, Inc.		1,686	(122,319	)
VeriSign, Inc.*		1,385	(122,628	)
GoDaddy, Inc. — Class A*		3,856	(124,664	)
CDW Corp.		3,021	(125,372	)
Comcast Corp. — Class A		2,064	(126,070	)
Thomson Reuters Corp.		3,201	(129,577	)
Cisco Systems, Inc.		4,566	(129,994	)
Facebook, Inc. — Class A*		1,140	(130,074	)
Total Communications			(1,755,610	)
Consumer, Cyclical - (5.7)%
HD Supply Holdings, Inc.*		319	(10,549	)
Harman International Industries, Inc.		560	(49,862	)
World Fuel Services Corp.		1,674	(81,323	)
Lions Gate Entertainment Corp.		4,290	(93,737	)
Thor Industries, Inc.		1,522	(97,058	)
Southwest Airlines Co.		2,400	(107,520	)
L Brands, Inc.		1,253	(110,026	)
Foot Locker, Inc.		1,720	(110,940	)
Hanesbrands, Inc.		3,949	(111,915	)
Tempur Sealy International, Inc.*		1,860	(113,069	)

14 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
LONG SHORT EQUITY FUND

	Shares		Value
Williams-Sonoma, Inc.		2,200	$	(120,428	)
Ross Stores, Inc.		2,088		(120,895	)
Cabela’s, Inc.*		2,520		(122,699	)
Madison Square Garden Co. — Class A*		751		(124,936	)
Advance Auto Parts, Inc.		790		(126,669	)
Scotts Miracle-Gro Co. — Class A		1,745		(126,984	)
Home Depot, Inc.		953		(127,159	)
United Continental Holdings, Inc.*		2,130		(127,502	)
TJX Companies, Inc.		1,630		(127,711	)
Signet Jewelers Ltd.		1,040		(128,991	)
Tupperware Brands Corp.		2,241		(129,933	)
WW Grainger, Inc.		558		(130,254	)
Alaska Air Group, Inc.		1,590		(130,412	)
Dollar General Corp.		1,553		(132,937	)
Cinemark Holdings, Inc.		3,750		(134,363	)
Harley-Davidson, Inc.		2,642		(135,614	)
Total Consumer, Cyclical				(2,933,486	)
Financial - (6.5)%
Franklin Resources, Inc.		133		(5,194	)
Iron Mountain, Inc.		898		(30,451	)
Artisan Partners Asset Management, Inc. — Class A		1,710		(52,736	)
Ameriprise Financial, Inc.		845		(79,438	)
E*TRADE Financial Corp.*		4,580		(112,164	)
LendingClub Corp.*		13,756		(114,175	)
Bank of New York Mellon Corp.		3,240		(119,329	)
SLM Corp.*		19,090		(121,412	)
Santander Consumer USA Holdings, Inc.*		11,580		(121,474	)
Capital One Financial Corp.		1,778		(123,233	)
Synchrony Financial*		4,318		(123,754	)
Ally Financial, Inc.*		6,619		(123,908	)
T. Rowe Price Group, Inc.		1,697		(124,662	)
Jones Lang LaSalle, Inc.		1,070		(125,532	)
TD Ameritrade Holding Corp.		3,982		(125,552	)
People’s United Financial, Inc.		7,913		(126,054	)
OneMain Holdings, Inc.*		4,605		(126,315	)
Charles Schwab Corp.		4,545		(127,352	)
CBRE Group, Inc. — Class A*		4,429		(127,644	)
Interactive Brokers Group, Inc. — Class A		3,254		(127,947	)
Simon Property Group, Inc.		617		(128,145	)
BlackRock, Inc. — Class A		380		(129,417	)
Navient Corp.		10,836		(129,707	)
Howard Hughes Corp.*		1,225		(129,715	)
Discover Financial Services		2,548		(129,744	)
American Express Co.		2,117		(129,984	)
Realogy Holdings Corp.*		3,605		(130,177	)
Eaton Vance Corp.		3,890		(130,393	)
Invesco Ltd.		4,250		(130,773	)
Affiliated Managers Group, Inc.*		810		(131,543	)
Total Financial				(3,437,924	)
Industrial - (6.9)%
AptarGroup, Inc.		764		(59,905	)
Silgan Holdings, Inc.		1,260		(66,994	)
Donaldson Company, Inc.		2,404		(76,712	)
Jacobs Engineering Group, Inc.*		2,199		(95,766	)
KBR, Inc.		6,703		(103,762	)
Owens-Illinois, Inc.*		6,950		(110,922	)
Manitowoc Foodservice, Inc.*		7,546		(111,228	)
Golar LNG Ltd.		6,198		(111,378	)
SunPower Corp. — Class A*		4,996		(111,611	)
Kansas City Southern		1,429		(122,108	)
Union Pacific Corp.		1,535		(122,109	)
AMERCO		347		(123,987	)
National Instruments Corp.		4,126		(124,234	)
Bemis Company, Inc.		2,430		(125,825	)
Dover Corp.		1,956		(125,829	)
CSX Corp.		4,900		(126,175	)
Old Dominion Freight Line, Inc.*		1,815		(126,360	)
Crane Co.		2,348		(126,463	)
Landstar System, Inc.		1,966		(127,023	)
Genesee & Wyoming, Inc. — Class A*		2,026		(127,031	)
Pentair plc		2,346		(127,294	)
Amphenol Corp. — Class A		2,202		(127,320	)
Sonoco Products Co.		2,630		(127,740	)
AECOM*		4,151		(127,810	)
TopBuild Corp.*		4,303		(127,971	)
AMETEK, Inc.		2,565		(128,199	)
Ball Corp.		1,811		(129,106	)
Ryder System, Inc.		2,002		(129,690	)
United Parcel Service, Inc. — Class B		1,230		(129,728	)
Zebra Technologies Corp. — Class A*		1,886		(130,134	)
J.B. Hunt Transport Services, Inc.		1,558		(131,246	)
Covanta Holding Corp.		8,050		(135,723	)
Total Industrial				(3,777,383	)
Energy - (7.8)%
California Resources Corp.		1,418		(1,461	)
Whiting Petroleum Corp.*		2,310		(18,434	)
Rice Energy, Inc.*		1,343		(18,748	)
Denbury Resources, Inc.		10,229		(22,708	)
Newfield Exploration Co.*		962		(31,987	)
National Oilwell Varco, Inc.		1,720		(53,492	)
EOG Resources, Inc.		996		(72,290	)
Memorial Resource Development Corp.*		7,694		(78,325	)
Devon Energy Corp.		2,885		(79,164	)
RPC, Inc.		5,750		(81,535	)
Anadarko Petroleum Corp.		1,834		(85,409	)
Phillips 66		1,077		(93,257	)
Nabors Industries Ltd.		10,286		(94,631	)
QEP Resources, Inc.		7,413		(104,597	)
Cobalt International Energy, Inc.*		36,222		(107,579	)
Cimarex Energy Co.		1,120		(108,942	)
Hess Corp.		2,166		(114,040	)
Energen Corp.		3,176		(116,210	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 15

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
LONG SHORT EQUITY FUND

	Shares		Value
Noble Energy, Inc.		3,809	$	(119,641	)
ConocoPhillips		3,004		(120,971	)
Occidental Petroleum Corp.		1,771		(121,190	)
First Solar, Inc.*		1,776		(121,603	)
Weatherford International plc*		15,805		(122,963	)
Cabot Oil & Gas Corp. — Class A		5,452		(123,815	)
FMC Technologies, Inc.*		4,536		(124,105	)
Patterson-UTI Energy, Inc.		7,070		(124,574	)
Spectra Energy Corp.		4,091		(125,185	)
Apache Corp.		2,570		(125,442	)
Diamondback Energy, Inc.*		1,627		(125,572	)
Concho Resources, Inc.*		1,247		(125,997	)
Dril-Quip, Inc.*		2,130		(128,993	)
Kosmos Energy Ltd.*		22,710		(132,172	)
Frank’s International N.V.		8,050		(132,664	)
Chevron Corp.		1,405		(134,037	)
Gulfport Energy Corp.*		4,825		(136,741	)
ONEOK, Inc.		4,684		(139,864	)
Continental Resources, Inc.*		4,751		(144,240	)
Equities Corp.		2,192		(147,433	)
WPX Energy, Inc.*		21,152		(147,850	)
Total Energy				(4,007,861	)
Consumer, Non-cyclical - (7.5)%
Perrigo Company plc		12		(1,535	)
Endo International plc*		408		(11,485	)
McKesson Corp.		78		(12,266	)
Universal Health Services, Inc. — Class B		157		(19,581	)
Medivation, Inc.*		762		(35,037	)
Estee Lauder Companies, Inc. — Class A		421		(39,705	)
Macquarie Infrastructure Corp.		603		(40,666	)
Avis Budget Group, Inc.*		3,680		(100,685	)
Express Scripts Holding Co.*		1,496		(102,760	)
Vertex Pharmaceuticals, Inc.*		1,300		(103,337	)
Regeneron Pharmaceuticals, Inc.*		300		(108,132	)
Allergan plc*		428		(114,717	)
Alnylam Pharmaceuticals, Inc.*		1,830		(114,869	)
Acadia Healthcare Company, Inc.*		2,101		(115,786	)
Akorn, Inc.*		4,925		(115,885	)
Rollins, Inc.		4,311		(116,914	)
BioMarin Pharmaceutical, Inc.*		1,420		(117,122	)
MEDNAX, Inc.*		1,817		(117,415	)
Alexion Pharmaceuticals, Inc.*		850		(118,337	)
UnitedHealth Group, Inc.		930		(119,877	)
Celgene Corp.*		1,203		(120,408	)
ServiceMaster Global Holdings, Inc.*		3,200		(120,576	)
Live Nation Entertainment, Inc.*		5,460		(121,813	)
Biogen, Inc.*		468		(121,830	)
Alkermes plc*		3,580		(122,400	)
Service Corporation International		4,983		(122,980	)
Incyte Corp.*		1,710		(123,924	)
Hertz Global Holdings, Inc.*		11,797		(124,222	)
Johnson & Johnson		1,160		(125,512	)
AbbVie, Inc.		2,200		(125,664	)
Amgen, Inc.		845		(126,691	)
CoStar Group, Inc.*		674		(126,827	)
Mylan N.V.*		2,758		(127,833	)
DaVita HealthCare Partners, Inc.*		1,748		(128,268	)
SEI Investments Co.		3,026		(130,269	)
Jazz Pharmaceuticals plc*		998		(130,289	)
VCA, Inc.*		2,305		(132,975	)
Seattle Genetics, Inc.*		3,797		(133,237	)
Zoetis, Inc.		3,027		(134,186	)
Total Consumer, Non-cyclical				(4,026,015	)
Total Common Stock Sold Short
(Proceeds $24,251,457)				(23,213,008	)
Total Securities Sold Short- (44.2)%
(Proceeds $24,251,457)			$	(23,213,008	)
Other Assets & Liabilities, net - 48.2%				24,854,247
Total Net Assets - 100.0%			$	51,564,896

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $307,575)		3	$	5,937

*	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 March 31, 2016.
2	Affiliated issuer — See Note 10.
3	Repurchase Agreements — See Note 5.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

16 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
LONG SHORT EQUITY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 3		Total
Common Stocks	$	40,814,811	$	—	$	—	$	—	$	40,814,811
Equity Futures Contracts		—		5,937		—		—		5,937
Mutual Funds		2,068,940		—		—		—		2,068,940
Repurchase Agreements		—		—		7,039,906		—		7,039,906
Total	$	42,883,751	$	5,937	$	7,039,906	$	—	$	49,929,594
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 3		Total
Common Stocks	$	23,213,008	$	—	$	—	$	—	$	23,213,008

* Other financial instruments include futures contracts, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 17

LONG SHORT EQUITY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $39,945,827)	$	40,814,811
Investments in affiliated issuers, at value (cost $2,079,755)		2,068,940
Repurchase agreements, at value (cost $7,039,906)		7,039,906
Total investments (cost $49,065,488)		49,923,657
Segregated cash with broker		24,998,905
Cash		3,702
Receivables:
Dividends		68,575
Fund shares sold		10,071
Interest		44
Total assets		75,004,954
Liabilities:
Securities sold short, at value (proceeds $24,251,457)		23,213,008
Payable for:
Fund shares redeemed		108,242
Management fees		38,685
Distribution and service fees		21,305
Transfer agent and administrative fees		10,746
Portfolio accounting fees		4,298
Securities purchased		2,799
Variation margin		705
Miscellaneous		40,270
Total liabilities		23,440,058
Commitments and contingent liabilities (Note 12)		—
Net assets	$	51,564,896
Net assets consist of:
Paid in capital	$	117,837,315
Undistributed net investment income		—
Accumulated net realized loss on investments		(68,174,974	)
Net unrealized appreciation on investments		1,902,555
Net assets	$	51,564,896
A-Class:
Net assets	$	10,802,558
Capital shares outstanding		708,007
Net asset value per share	$	15.26
Maximum offering price per share (Net asset value divided by 95.25%)	$	16.02
C-Class:
Net assets	$	16,760,297
Capital shares outstanding		1,221,621
Net asset value per share	$	13.72
P-Class:
Net assets	$	23,476,606
Capital shares outstanding		1,533,720
Net asset value per share	$	15.31
Institutional Class:
Net assets	$	525,435
Capital shares outstanding		33,895
Net asset value per share	$	15.50

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $2,109)	$	889,627
Dividends from securities of affiliated issuers		30,548
Income from securities lending, net		14,215
Interest		3,269
Total investment income		937,659
Expenses:
Management fees		463,036
Transfer agent and administrative fees		128,621
Distribution and service fees:
A-Class		27,093
C-Class		183,304
P-Class		54,731
Portfolio accounting fees		51,448
Short sales dividend expense		354,409
Prime broker interest expense		80,174
Custodian fees		7,610
Trustees’ fees*		3,473
Line of credit fees		7
Miscellaneous		67,665
Total expenses		1,421,571
Net investment loss		(483,912	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(2,859,998	)
Investments in affiliated issuers		(4,074	)
Futures contracts		(14,419	)
Securities sold short		920,659
Net realized loss		(1,957,832	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(1,185,760	)
Investments in affiliated issuers		(10,815	)
Securities sold short		546,389
Futures contracts		5,937
Net change in unrealized appreciation (depreciation)		(644,249	)
Net realized and unrealized loss		(2,602,081	)
Net decrease in net assets resulting from operations	$	(3,085,993	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

18 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

LONG SHORT EQUITY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(483,912	)	$	(353,812	)
Net realized gain (loss) on investments		(1,957,832	)		3,614,279
Net change in unrealized appreciation (depreciation) on investments		(644,249	)		(437,260	)
Net increase (decrease) in net assets resulting from operations		(3,085,993	)		2,823,207
Capital share transactions:
Proceeds from sale of shares
A-Class		11,165,376			2,265,846
C-Class		909,384			789,638
P-Class*		16,740,494			3,875,899
Institutional Class		305,681			380,674
Cost of shares redeemed
A-Class		(5,781,828	)		(4,148,005	)
C-Class		(2,910,089	)		(4,392,338	)
P-Class*		(12,054,766	)		(14,347,395	)
Institutional Class		(60,140	)		(116,016	)
Net increase (decrease) from capital share transactions		8,314,112			(15,691,697	)
Net increase (decrease) in net assets		5,228,119			(12,868,490	)
Net assets:
Beginning of year		46,336,777			59,205,267
End of year	$	51,564,896		$	46,336,777
Undistributed net investment income/(Accumulated net investment loss) at end of year	$	—		$	(164,159	)
Capital share activity:
Shares sold
A-Class		702,460			147,669
C-Class		63,821			58,483
P-Class*		1,069,799			251,585
Institutional Class		19,194			25,112
Shares redeemed
A-Class		(369,701	)		(273,585	)
C-Class		(205,085	)		(320,706	)
P-Class*		(771,059	)		(953,740	)
Institutional Class		(3,751	)		(7,468	)
Net increase (decrease) in shares		505,678			(1,072,650	)

* H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015 — See Note 13.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 19

LONG SHORT EQUITY 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	16.16		$	15.07		$	13.48		$	13.28		$	14.28
Income (loss) from investment operations:
Net investment income (loss)a		(.10	)		(.06	)		(.13	)		(.05	)		.03
Net gain (loss) on investments (realized and unrealized)		(.80	)		1.15			1.72			.30			(1.03	)
Total from investment operations		(.90	)		1.09			1.59			.25			(1.00	)
Less distributions from:
Net investment income		—			—			—			(.05	)		—
Total distributions		—			—			—			(.05	)		—
Net asset value, end of period	$	15.26		$	16.16		$	15.07		$	13.48		$	13.28
Total Returnb		(5.57	%)		7.23	%		11.80	%		1.89	%		(7.00	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,803		$	6,063		$	7,552		$	13,106		$	16,510
Ratios to average net assets:
Net investment income (loss)		(0.66	%)		(0.42	%)		(0.91	%)		(0.35	%)		0.21	%
Total expensesc,f		2.53	%		2.17	%		2.34	%		1.92	%		1.66	%
Portfolio turnover rate		224	%		331	%		256	%		183	%		190	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	14.64		$	13.76		$	12.40		$	12.31		$	13.33
Income (loss) from investment operations:
Net investment income (loss)a		(.21	)		(.16	)		(.24	)		(.14	)		(.07	)
Net gain (loss) on investments (realized and unrealized)		(.71	)		1.04			1.60			.28			(.95	)
Total from investment operations		(.92	)		.88			1.36			.14			(1.02	)
Less distributions from:
Net investment income		—			—			—			(.05	)		—
Total distributions		—			—			—			(.05	)		—
Net asset value, end of period	$	13.72		$	14.64		$	13.76		$	12.40		$	12.31
Total Returnb		(6.28	%)		6.40	%		10.97	%		1.14	%		(7.65	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	16,760		$	19,952		$	22,354		$	23,554		$	32,503
Ratios to average net assets:
Net investment income (loss)		(1.45	%)		(1.16	%)		(1.79	%)		(1.12	%)		(0.54	%)
Total expensesc,f		3.24	%		2.92	%		3.11	%		2.69	%		2.41	%
Portfolio turnover rate		224	%		331	%		256	%		183	%		190	%

20 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

LONG SHORT EQUITY 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.

P-Class*	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	16.21		$	15.12		$	13.53		$	13.33		$	14.32
Income (loss) from investment operations:
Net investment income (loss)a		(.11	)		(.07	)		(.16	)		(.04	)		.03
Net gain (loss) on investments (realized and unrealized)		(.79	)		1.16			1.75			.29			(1.02	)
Total from investment operations		(.90	)		1.09			1.59			.25			(.99	)
Less distributions from:
Net investment income		—			—			—			(.05	)		—
Total distributions		—			—			—			(.05	)		—
Net asset value, end of period	$	15.31		$	16.21		$	15.12		$	13.53		$	13.33
Total Returnb		(5.55	%)		7.21	%		11.75	%		1.88	%		(6.91	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	23,477		$	20,020		$	29,287		$	26,257		$	54,589
Ratios to average net assets:
Net investment income (loss)		(0.67	%)		(0.43	%)		(1.07	%)		(0.29	%)		0.20	%
Total expensesc,f		2.50	%		2.17	%		2.36	%		1.88	%		1.66	%
Portfolio turnover rate		224	%		331	%		256	%		183	%		190	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 21

LONG SHORT EQUITY 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.

Institutional Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Period Ended March 31, 2012d
Per Share Data
Net asset value, beginning of period	$	16.38		$	15.24		$	13.60		$	13.33		$	12.39
Income (loss) from investment operations:
Net investment income (loss)a		(.05	)		(—	)e		(.12	)		(.02	)		.06
Net gain (loss) on investments (realized and unrealized)		(.83	)		1.14			1.76			.31			.88
Total from investment operations		(.88	)		1.14			1.64			.29			.94
Less distributions from:
Net investment income		—			—			—			(.02	)		—
Total distributions		—			—			—			(.02	)		—
Net asset value, end of period	$	15.50		$	16.38		$	15.24		$	13.60		$	13.33
Total Returnb		(5.37	%)		7.48	%		12.06	%		2.15	%		7.59	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	525		$	302		$	12		$	11		$	11
Ratios to average net assets:
Net investment income (loss)		(0.29	%)		(0.01	%)		(0.82	%)		(0.17	%)		1.29	%
Total expensesc,f		2.27	%		1.95	%		2.11	%		1.72	%		1.36	%
Portfolio turnover rate		224	%		331	%		256	%		183	%		190	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Since commencement of operations: November 30, 2011. Percentage amounts for the period, except total return and portfolio turnover rate, have been annualized. The portfolio turnover rate stated is for the entire period of the Fund, not since commencement of operations of the class.
e	Net investment loss is less than $0.01 per share.
f	Excluding interest and dividend expense related to short sales, the operating expense ratios for the years or periods presented would be:

	03/31/16	03/31/15	03/31/14	03/28/13	03/31/12
A-Class	1.66%	1.66%	1.68%	1.65%	1.66%
C-Class	2.41%	2.41%	2.42%	2.40%	2.41%
P-Class	1.66%	1.66%	1.67%	1.65%	1.66%
Institutional Class	1.41%	1.40%	1.42%	1.41%	N/A

* H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015 — See Note 13.

22 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

OBJECTIVE: Seeks to achieve capital growth.

The Event Driven and Distressed Strategies Fund P-Class returned -2.52% for the one-year period ended March 31, 2016. By comparison, the S&P 500 Index returned 1.78% and the Credit Suisse Event Driven Liquid Index returned -7.31%.

The Fund gains exposure to event driven and distressed situations through various exposures, such as merger arbitrage, high yield, equities, and volatility. During the period, the Fund used derivatives, such as swaps and futures, as the primary instrument to gain exposure to these factors. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

The main positive driver of performance was from merger arbitrage. High yield exposures contributed negatively to performance along with equity exposures, through small cap equities and stocks of high yield companies, during the period. Throughout the year, the largest exposures were to high yield, followed by merger arbitrage. There was no exposure to market volatility during the period.

The Fund invests excess cash into the Guggenheim Strategy Funds which, in turn, invest in a diversified portfolio of debt securities and financial instruments providing exposure to fixed-income markets. The investment objective of the Guggenheim Strategy Funds is to seek a high level of income consistent with the preservation of capital. For the one-year period ended March 31, 2016, investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments such as overnight repurchase agreements.

Performance displayed represents past performance, which is no guarantee of future results.

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments or investments in Guggenheim Strategy Funds Trust mutual funds. Investments in those Funds do not provide “market exposure” to meet the Fund’s investment objective, but will significantly increase the portfolio’s exposure to certain other asset categories (and their associated risks), which may cause the Fund to deviate from its principal investment strategy, including: (i) high yield, high risk debt securities rated below the top four long-term rating categories by a nationally recognized statistical rating organization (also known as “junk bonds”); (ii) securities issued by the U.S. government or its agencies and instrumentalities; (iii) CLOs and similar investments; and (iv) other short-term fixed income securities.

Inception Dates:
A-Class	June 30, 2010
C-Class	June 30, 2010
P-Class**	June 30, 2010
Institutional Class	June 30, 2010

The Fund invests principally in derivative investments such as swap agreements and futures contracts.

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund II	26.3%
Guggenheim Strategy Fund I	26.2%
iShares iBoxx $ High Yield Corporate Bond ETF	23.9%
General Motors Co.	0.2%
Netflix, Inc.	0.2%
Petroleo Brasileiro S.A. ADR	0.2%
Royal Bank of Scotland Group plc ADR	0.2%
Nokia Oyj ADR	0.2%
Yum! Brands, Inc.	0.2%
Exelon Corp.	0.2%
Top Ten Total	77.8%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 23

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (06/30/10)
A-Class Shares	-2.52%	2.23%	4.64%
A-Class Shares with sales charge†	-7.16%	1.24%	3.76%
C-Class Shares	-3.25%	1.47%	3.84%
C-Class Shares with CDSC‡	-4.20%	1.47%	3.84%
Institutional Class Shares	-2.23%	2.50%	4.91%
P-Class Shares	-2.52%	2.23%	4.64%
Credit Suisse Event Driven Liquid Index	-7.31%	2.29%	4.77%
S&P 500 Index	1.78%	11.58%	15.22%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The Credit Suisse Event Driven Liquid Index and the S&P 500 Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on A-Class shares and P-Class shares only; performance for C-Class shares and Institutional Class shares will vary due to differences in fee structures.
**	H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

24 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
COMMON STOCKS† - 10.1%
Consumer, Cyclical - 2.3%
General Motors Co.		515	$	16,186
Yum! Brands, Inc.		135		11,050
L Brands, Inc.		96		8,430
American Airlines Group, Inc.		203		8,325
Hilton Worldwide Holdings, Inc.		331		7,454
United Continental Holdings, Inc.*		121		7,243
Dollar Tree, Inc.*		78		6,432
Royal Caribbean Cruises Ltd.		72		5,915
Norwegian Cruise Line Holdings Ltd.*		77		4,257
Liberty Interactive Corporation QVC Group — Class A*		164		4,141
MGM Resorts International*		190		4,074
DR Horton, Inc.		123		3,719
Best Buy Company, Inc.		113		3,666
Hanesbrands, Inc.		129		3,656
Fiat Chrysler Automobiles N.V.		438		3,530
Lennar Corp. — Class A		70		3,385
LKQ Corp.*		103		3,290
Wynn Resorts Ltd.		35		3,270
Foot Locker, Inc.		46		2,967
Goodyear Tire & Rubber Co.		88		2,903
Darden Restaurants, Inc.		43		2,851
Rite Aid Corp.*		348		2,836
Lear Corp.		25		2,778
PVH Corp.		27		2,675
PulteGroup, Inc.		116		2,170
HD Supply Holdings, Inc.*		63		2,083
Michaels Companies, Inc.*		70		1,958
Carter’s, Inc.		17		1,791
Six Flags Entertainment Corp.		31		1,720
Toll Brothers, Inc.*		57		1,682
Sally Beauty Holdings, Inc.*		48		1,554
Scotts Miracle-Gro Co. — Class A		21		1,528
Brunswick Corp.		31		1,487
Cinemark Holdings, Inc.		39		1,398
CalAtlantic Group, Inc.		41		1,370
Office Depot, Inc.*		187		1,328
Tempur Sealy International, Inc.*		21		1,277
International Game Technology plc		67		1,223
Gaming and Leisure Properties, Inc.		39		1,206
J.C. Penney Company, Inc.*		104		1,150
GameStop Corp. — Class A		36		1,142
Penske Automotive Group, Inc.		30		1,136
Lions Gate Entertainment Corp.		52		1,136
Cedar Fair, LP		19		1,130
Regal Entertainment Group — Class A		53		1,120
Extended Stay America, Inc.		67		1,092
Allegiant Travel Co. — Class A		6		1,068
Vista Outdoor, Inc.*		20		1,038
Choice Hotels International, Inc.		19		1,027
Tenneco, Inc.*		19		979
Wendy’s Co.		88		958
CST Brands, Inc.		25		957
AMC Entertainment Holdings, Inc. — Class A		33		924
Churchill Downs, Inc.		6		888
Beacon Roofing Supply, Inc.*		20		820
Boyd Gaming Corp.*		38		785
WESCO International, Inc.*		14		765
DreamWorks Animation SKG, Inc. — Class A*		29		724
Dana Holding Corp.		50		705
Pinnacle Entertainment, Inc.*		20		702
Cooper Tire & Rubber Co.		18		666
TRI Pointe Group, Inc.*		54		636
Wolverine World Wide, Inc.		33		608
Party City Holdco, Inc.*		39		587
Sears Holdings Corp.*		38		582
Taylor Morrison Home Corp. — Class A*		41		579
Ferrellgas Partners, LP		31		539
Mobile Mini, Inc.		15		495
Asbury Automotive Group, Inc.*		8		479
Meritage Homes Corp.*		13		474
Group 1 Automotive, Inc.		8		470
Penn National Gaming, Inc.*		28		467
First Cash Financial Services, Inc.		10		461
Caleres, Inc.		15		424
MDC Holdings, Inc.		16		401
KB Home		28		400
Metaldyne Performance Group, Inc.		23		387
American Axle & Manufacturing Holdings, Inc.*		25		385
Navistar International Corp.*		28		351
National CineMedia, Inc.		21		319
Sonic Automotive, Inc. — Class A		16		296
Interval Leisure Group, Inc.		19		274
Scientific Games Corp. — Class A*		29		273
Meritor, Inc.*		31		250
Carmike Cinemas, Inc.*		8		240
H&E Equipment Services, Inc.		12		210
Isle of Capri Casinos, Inc.*		14		196
Outerwall, Inc.		5		185
Carrols Restaurant Group, Inc.*		12		173
Eldorado Resorts, Inc.*		15		172
WCI Communities, Inc.*		9		167
William Lyon Homes — Class A*		11		159
M/I Homes, Inc.*		8		149
Conn’s, Inc.*		11		137
Ruby Tuesday, Inc.*		21		113
Beazer Homes USA, Inc.*		12		105
Titan International, Inc.		19		102
Perry Ellis International, Inc.*		5		92
Hovnanian Enterprises, Inc. — Class A*		51		80
Total Consumer, Cyclical				182,137
Consumer, Non-cyclical - 1.9%
HCA Holdings, Inc.*		135		10,537
Constellation Brands, Inc. — Class A		65		9,821

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 25

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
Fresenius Medical Care AG & Company KGaA ADR		205	$	9,036
ConAgra Foods, Inc.		143		6,380
Nielsen Holdings plc		120		6,319
Valeant Pharmaceuticals International, Inc.*		233		6,129
DaVita HealthCare Partners, Inc.*		70		5,137
Grifols S.A. ADR		299		4,626
Jarden Corp.*		73		4,303
Universal Health Services, Inc. — Class B		33		4,116
Centene Corp.*		57		3,521
Hologic, Inc.*		97		3,347
Endo International plc*		95		2,674
Quintiles Transnational Holdings, Inc.*		41		2,669
Sabre Corp.		92		2,661
Mallinckrodt plc*		43		2,635
WhiteWave Foods Co. — Class A*		59		2,398
ADT Corp.		55		2,269
Teleflex, Inc.		14		2,197
Spectrum Brands Holdings, Inc.		20		2,186
Pilgrim’s Pride Corp.*		86		2,184
MEDNAX, Inc.*		32		2,068
United Rentals, Inc.*		30		1,866
Pinnacle Foods, Inc.		39		1,743
ServiceMaster Global Holdings, Inc.*		44		1,658
Acadia Healthcare Company, Inc.*		30		1,653
TreeHouse Foods, Inc.*		19		1,648
Edgewell Personal Care Co.		20		1,611
Service Corporation International		65		1,605
Post Holdings, Inc.*		23		1,582
Alere, Inc.*		31		1,569
Hertz Global Holdings, Inc.*		147		1,548
Live Nation Entertainment, Inc.*		68		1,517
Amsurg Corp. — Class A*		19		1,417
WellCare Health Plans, Inc.*		15		1,391
Molina Healthcare, Inc.*		19		1,225
HealthSouth Corp.		31		1,167
RR Donnelley & Sons Co.		70		1,147
Hill-Rom Holdings, Inc.		22		1,107
WEX, Inc.*		13		1,084
Team Health Holdings, Inc.*		25		1,045
LifePoint Health, Inc.*		15		1,039
Tenet Healthcare Corp.*		35		1,013
Horizon Pharma plc*		61		1,011
Deluxe Corp.		16		1,000
Cimpress N.V.*		11		998
Prestige Brands Holdings, Inc.*		18		961
Graham Holdings Co. — Class B		2		960
Vector Group Ltd.		41		936
Avis Budget Group, Inc.*		33		903
Owens & Minor, Inc.		21		849
Avon Products, Inc.		158		760
Community Health Systems, Inc.*		40		740
Darling Ingredients, Inc.*		56		737
B&G Foods, Inc.		21		731
CEB, Inc.		11		712
Revlon, Inc. — Class A*		18		655
Surgical Care Affiliates, Inc.*		14		648
Cott Corp.		41		569
Sotheby’s		21		561
Cardtronics, Inc.*		15		540
Dean Foods Co.		31		537
Select Medical Holdings Corp.*		45		531
SUPERVALU, Inc.*		89		512
FTI Consulting, Inc.*		13		462
ExamWorks Group, Inc.*		14		414
Greatbatch, Inc.*		11		392
Kindred Healthcare, Inc.		29		358
ACCO Brands Corp.*		35		314
AMAG Pharmaceuticals, Inc.*		13		304
Rent-A-Center, Inc.		17		269
StoneMor Partners, LP		11		268
Ingles Markets, Inc. — Class A		7		263
Central Garden & Pet Co.*		16		261
Quad/Graphics, Inc.		17		220
Elizabeth Arden, Inc.*		10		82
Everi Holdings, Inc.*		22		50
BioScrip, Inc.*		23		49
Snyder’s-Lance, Inc.		1		28
Nuvectra Corp.*		1		4
Total Consumer, Non-cyclical				146,437
Communications - 1.4%
Netflix, Inc.*		143		14,619
Nokia Oyj ADR		1,931		11,415
T-Mobile US, Inc.*		274		10,495
Charter Communications, Inc. — Class A*		37		7,489
DISH Network Corp. — Class A*		156		7,217
Sirius XM Holdings, Inc.*		1,701		6,719
Level 3 Communications, Inc.*		121		6,395
CenturyLink, Inc.		184		5,881
Expedia, Inc.		50		5,391
Sprint Corp.*		1,382		4,809
VeriSign, Inc.*		36		3,187
Cablevision Systems Corp. — Class A		92		3,036
CDW Corp.		55		2,283
Frontier Communications Corp.		401		2,242
Zayo Group Holdings, Inc.*		81		1,963
CommScope Holding Company, Inc.*		64		1,787
AMC Networks, Inc. — Class A*		25		1,624
EchoStar Corp. — Class A*		32		1,417
IAC/InterActiveCorp		28		1,318
United States Cellular Corp.*		28		1,279
ViaSat, Inc.*		17		1,249
Tribune Media Co. — Class A		32		1,227
Sinclair Broadcast Group, Inc. — Class A		32		984
Starz — Class A*		33		869
Media General, Inc.*		44		718

26 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
West Corp.		28	$	639
Gannett Company, Inc.		41		621
Cogent Communications Holdings, Inc.		15		585
Anixter International, Inc.*		11		573
Plantronics, Inc.		12		470
NeuStar, Inc. — Class A*		18		443
Nexstar Broadcasting Group, Inc. — Class A		10		443
Consolidated Communications Holdings, Inc.		17		438
MDC Partners, Inc. — Class A		17		401
DigitalGlobe, Inc.*		21		363
Bankrate, Inc.*		34		312
Gray Television, Inc.*		25		293
Cincinnati Bell, Inc.*		71		275
Windstream Holdings, Inc.		33		253
General Communication, Inc. — Class A*		13		238
EarthLink Holdings Corp.		36		204
Entercom Communications Corp. — Class A*		14		148
Total Communications				112,312
Financial - 1.1%
Royal Bank of Scotland Group plc ADR*		1,924		12,274
Crown Castle International Corp.		110		9,514
Equinix, Inc.		23		7,605
Discover Financial Services		137		6,975
Ally Financial, Inc.*		164		3,070
Icahn Enterprises, LP		44		2,774
AerCap Holdings N.V.*		68		2,636
Unum Group		80		2,474
Iron Mountain, Inc.		71		2,408
CIT Group, Inc.		68		2,110
Lamar Advertising Co. — Class A		32		1,968
Realogy Holdings Corp.*		50		1,806
Navient Corp.		116		1,389
Howard Hughes Corp.*		13		1,377
Credit Acceptance Corp.*		7		1,271
Hanover Insurance Group, Inc.		14		1,263
Corrections Corporation of America		39		1,250
Synovus Financial Corp.		43		1,244
BankUnited, Inc.		35		1,205
American Capital Ltd.*		78		1,189
Communications Sales & Leasing, Inc.		51		1,135
First Niagara Financial Group, Inc.		117		1,133
CyrusOne, Inc.		24		1,096
CNO Financial Group, Inc.		60		1,075
Medical Properties Trust, Inc.		82		1,064
CoreLogic, Inc.*		30		1,041
First Horizon National Corp.		78		1,022
Popular, Inc.		35		1,001
Outfront Media, Inc.		46		971
DuPont Fabros Technology, Inc.		22		892
Ryman Hospitality Properties, Inc.		17		875
GEO Group, Inc.		25		867
Kennedy-Wilson Holdings, Inc.		39		854
BGC Partners, Inc. — Class A		92		833
Radian Group, Inc.		67		831
QTS Realty Trust, Inc. — Class A		14		663
Aircastle Ltd.		27		600
Genworth Financial, Inc. — Class A*		177		483
Ladder Capital Corp. — Class A		36		448
Sabra Health Care REIT, Inc.		22		442
Potlatch Corp.		14		441
FelCor Lodging Trust, Inc.		48		390
Nationstar Mortgage Holdings, Inc.*		38		376
KCG Holdings, Inc. — Class A*		30		359
iStar, Inc.*		26		251
PHH Corp.*		18		226
Forestar Group, Inc.*		14		183
Fly Leasing Ltd. ADR		11		140
Ocwen Financial Corp.*		45		111
Walter Investment Management Corp.*		12		92
Enova International, Inc.*		11		69
Total Financial				85,766
Energy - 1.0%
Petroleo Brasileiro S.A. ADR*		2,131		12,445
Concho Resources, Inc.*		43		4,344
Williams Companies, Inc.		254		4,083
Tesoro Corp.		40		3,440
Cheniere Energy Partners, LP		114		3,288
Energy Transfer Equity, LP		353		2,517
Weatherford International plc*		297		2,312
Antero Resources Corp.*		91		2,263
Newfield Exploration Co.*		65		2,161
ONEOK, Inc.		71		2,120
Equities Midstream Partners, LP		26		1,935
Diamondback Energy, Inc.*		23		1,775
Range Resources Corp.		54		1,749
Tesoro Logistics, LP		31		1,415
Boardwalk Pipeline Partners, LP		84		1,238
Genesis Energy, LP		37		1,176
Energen Corp.		32		1,171
Gulfport Energy Corp.*		40		1,134
Transocean Ltd.		124		1,133
Sunoco, LP		34		1,125
PBF Energy, Inc. — Class A		33		1,096
NuStar Energy, LP		27		1,091
DCP Midstream Partners, LP		38		1,035
QEP Resources, Inc.		72		1,016
RSP Permian, Inc.*		34		987
Chesapeake Energy Corp.		231		952
PDC Energy, Inc.*		15		892
CONSOL Energy, Inc.		78		880
Western Refining, Inc.		30		873
Murphy USA, Inc.*		14		860
CVR Energy, Inc.		29		757
Northern Tier Energy, LP		31		731
Memorial Resource Development Corp.*		69		702
Holly Energy Partners, LP		20		677

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 27

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
WPX Energy, Inc.*		92	$	643
Carrizo Oil & Gas, Inc.*		20		618
Suburban Propane Partners, LP		20		598
Matador Resources Co.*		31		587
Rice Energy, Inc.*		42		586
Whiting Petroleum Corp.*		72		575
Laredo Petroleum, Inc.*		70		555
Oasis Petroleum, Inc.*		61		444
Precision Drilling Corp.		104		437
Forum Energy Technologies, Inc.*		32		422
SM Energy Co.		22		412
TerraForm Power, Inc. — Class A		46		398
Western Refining Logistics, LP		16		374
Summit Midstream Partners, LP		22		374
SemGroup Corp. — Class A		16		358
McDermott International, Inc.*		83		339
SEACOR Holdings, Inc.*		6		327
Calumet Specialty Products Partners, LP		25		294
NGL Energy Partners, LP		39		293
Baytex Energy Corp.		72		286
Crestwood Equity Partners, LP		24		280
Denbury Resources, Inc.		125		278
Bristow Group, Inc.		12		227
Archrock Partners, LP		20		222
Atwood Oceanics, Inc.		22		202
Unit Corp.*		17		150
TerraForm Global, Inc. — Class A		61		145
Rose Rock Midstream, LP		12		142
SunCoke Energy Partners, LP		17		126
Sanchez Energy Corp.*		22		121
Bill Barrett Corp.*		17		106
Parker Drilling Co.*		42		89
Northern Oil and Gas, Inc.*		21		84
Era Group, Inc.*		7		66
Memorial Production Partners, LP		30		64
CSI Compressco, LP		11		63
W&T Offshore, Inc.*		28		61
Pioneer Energy Services Corp.*		22		48
Ocean Rig UDW, Inc.		57		47
Westmoreland Coal Co.*		6		43
Basic Energy Services, Inc.*		15		41
Cloud Peak Energy, Inc.*		21		41
Clayton Williams Energy, Inc.*		4		36
EV Energy Partners, LP		17		33
Bonanza Creek Energy, Inc.*		19		30
Approach Resources, Inc.*		16		19
Stone Energy Corp.*		23		18
Total Energy				77,075
Industrial - 1.0%
Vulcan Materials Co.		44		4,645
SBA Communications Corp. — Class A*		41		4,108
TransDigm Group, Inc.*		18		3,966
Martin Marietta Materials, Inc.		22		3,509
Masco Corp.		110		3,460
Ball Corp.		47		3,352
Sealed Air Corp.		65		3,120
Crown Holdings, Inc.*		47		2,331
Sensata Technologies Holding N.V.*		57		2,214
Flextronics International Ltd.*		182		2,195
Huntington Ingalls Industries, Inc.		15		2,054
Spirit AeroSystems Holdings, Inc. — Class A*		45		2,041
Allegion plc		32		2,039
Owens Corning		39		1,843
Orbital ATK, Inc.		20		1,739
AECOM*		51		1,570
Berry Plastics Group, Inc.*		39		1,410
Graphic Packaging Holding Co.		109		1,401
Zebra Technologies Corp. — Class A*		18		1,242
USG Corp.*		50		1,241
Jabil Circuit, Inc.		64		1,233
XPO Logistics, Inc.*		37		1,136
Silgan Holdings, Inc.		20		1,063
Oshkosh Corp.		24		981
Trinity Industries, Inc.		52		952
Clean Harbors, Inc.*		19		937
Belden, Inc.		15		920
Owens-Illinois, Inc.*		56		894
Energizer Holdings, Inc.		21		851
Terex Corp.		34		846
Louisiana-Pacific Corp.*		49		839
EnerSys		15		836
Covanta Holding Corp.		43		725
Summit Materials, Inc. — Class A*		35		681
Masonite International Corp.*		10		655
Hillenbrand, Inc.		21		629
Greif, Inc. — Class A		19		622
Sanmina Corp.*		26		608
Trinseo S.A.*		16		589
Moog, Inc. — Class A*		12		548
MasTec, Inc.*		27		546
Triumph Group, Inc.		17		535
Headwaters, Inc.*		25		496
Actuant Corp. — Class A		20		494
Builders FirstSource, Inc.*		39		440
EnPro Industries, Inc.		7		404
Aerojet Rocketdyne Holdings, Inc.*		22		360
NCI Building Systems, Inc.*		25		355
Briggs & Stratton Corp.		14		335
Ply Gem Holdings, Inc.*		23		323
Multi-Color Corp.		6		320
Nortek, Inc.*		6		290
Gibraltar Industries, Inc.*		10		286
Boise Cascade Co.*		13		269
Tutor Perini Corp.*		17		264
Griffon Corp.		16		247
Martin Midstream Partners, LP		12		240

28 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
General Cable Corp.		18	$	220
Teekay Corp.		25		217
SPX Corp.		14		210
Manitowoc Company, Inc.		45		195
Park-Ohio Holdings Corp.		4		171
Harsco Corp.		28		153
AEP Industries, Inc.		2		132
Hornbeck Offshore Services, Inc.*		13		129
NN, Inc.		9		123
LSB Industries, Inc.*		8		102
Kratos Defense & Security Solutions, Inc.*		20		99
Navios Maritime Holdings, Inc.		37		42
Total Industrial				74,022
Technology - 0.6%
NXP Semiconductor N.V.*		115		9,323
Activision Blizzard, Inc.		244		8,257
Micron Technology, Inc.*		354		3,707
IHS, Inc. — Class A*		23		2,855
MSCI, Inc. — Class A		33		2,445
Qorvo, Inc.*		45		2,268
Open Text Corp.		41		2,124
SS&C Technologies Holdings, Inc.		33		2,092
Nuance Communications, Inc.*		101		1,888
Brocade Communications Systems, Inc.		134		1,418
Microsemi Corp.*		37		1,417
NCR Corp.*		44		1,317
Leidos Holdings, Inc.		24		1,208
j2 Global, Inc.		17		1,047
Rackspace Hosting, Inc.*		45		972
ACI Worldwide, Inc.*		39		811
Entegris, Inc.*		47		640
Amkor Technology, Inc.*		81		477
Unisys Corp.*		17		131
Magnachip Semiconductor Corp.*		12		65
Total Technology				44,462
Basic Materials - 0.5%
ArcelorMittal		1,058		4,845
Alcoa, Inc.		461		4,416
Celanese Corp. — Class A		49		3,210
Ashland, Inc.		21		2,309
Steel Dynamics, Inc.		82		1,846
WR Grace & Co.*		24		1,708
Teck Resources Ltd. — Class B		206		1,568
Kinross Gold Corp.*		400		1,359
Huntsman Corp.		82		1,091
Olin Corp.		57		990
Methanex Corp.		30		964
PolyOne Corp.		29		877
Univar, Inc.*		48		825
United States Steel Corp.		50		803
Compass Minerals International, Inc.		11		779
Eldorado Gold Corp.		235		743
Platform Specialty Products Corp.*		82		705
Commercial Metals Co.		38		645
New Gold, Inc.*		168		627
Allegheny Technologies, Inc.		37		603
Chemtura Corp.*		22		581
Kaiser Aluminum Corp.		6		507
Axiall Corp.		23		502
Chemours Co.		61		427
Neenah Paper, Inc.		6		382
Hecla Mining Co.		130		361
PH Glatfelter Co.		15		311
Clearwater Paper Corp.*		6		291
Constellium N.V. — Class A*		56		291
IAMGOLD Corp.*		131		290
Coeur Mining, Inc.*		51		287
A. Schulman, Inc.		10		272
Tronox Ltd. — Class A		41		262
AK Steel Holding Corp.*		63		260
Century Aluminum Co.*		30		212
Mercer International, Inc.		22		208
Kraton Performance Polymers, Inc.*		10		173
Resolute Forest Products, Inc.*		30		165
Koppers Holdings, Inc.*		7		157
Total Basic Materials				36,852
Utilities - 0.3%
Exelon Corp.		307		11,008
FirstEnergy Corp.		141		5,072
AES Corp.		219		2,584
Calpine Corp.*		120		1,821
NRG Energy, Inc.		107		1,392
AmeriGas Partners, LP		31		1,348
NRG Yield, Inc. — Class C		61		869
NRG Yield, Inc. — Class A		64		868
Dynegy, Inc.*		39		560
Talen Energy Corp.*		42		378
Global Partners, LP		11		149
Total Utilities				26,049
Diversified - 0.0%
Leucadia National Corp.		127		2,054
HRG Group, Inc.*		66		919
Total Diversified				2,973
Total Common Stocks
(Cost $745,714)				788,085
EXCHANGE-TRADED FUNDS - 23.9%
iShares iBoxx $ High Yield Corporate Bond ETF		22,700		1,854,362
Total Exchange-Traded Funds
(Cost $1,984,813)				1,854,362

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 29

SCHEDULE OF INVESTMENTS (continued)	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
MUTUAL FUNDS† - 52.4%
Guggenheim Strategy Fund II1		82,614	$	2,039,748
Guggenheim Strategy Fund I1		81,888		2,031,647
Total Mutual Funds
(Cost $4,101,312)				4,071,395

	Face Amount
REPURCHASE AGREEMENTS††,2 - 9.2%
HSBC Group issued 03/31/16 at 0.21% due 04/01/163	$	523,685		523,685
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		186,703		186,703
Total Repurchase Agreements
(Cost $710,388)				710,388
Total Investments - 95.6%
(Cost $7,542,227)			$	7,424,230
Other Assets & Liabilities, net - 4.4%				337,688
Total Net Assets - 100.0%			$	7,761,918

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $776,230)		7	$	29,249
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2016 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $3,393,469)		28	$	10,418

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Credit Suisse International, LLC April 2016 Credit Suisse Merger Arbitrage Liquid Index Swap 0.62%4, Terminating 04/20/16 (Notional Value $3,489,968)		3,064	$	67,900

CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENT PROTECTION SOLD††
Index	Counterparty	Exchange	Protection Premium Rate		Maturity Date	Notional Principal		Notional Value			Upfront Premiums Paid		Unrealized Appreciation
CDX.NA.HY.26 Index	Goldman Sachs International	ICE	5.00	%	06/20/21	$	4,000,000	$	(4,110,000	)	$	44,138	$	65,862

*	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	Affiliated issuer — See Note 10.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2016.
4	Total Return based on Credit Suisse Merger Arbitrage Liquid Index +/- financing at a variable rate. Rate indicated is rate effective March 31, 2016.
	ADR — American Depositary Receipt
	ICE — Intercontinental Exchange
	plc — Public Limited Company
	REIT — Real Estate Investment Trust
	CDX.NA.HY.26 Index — Credit Default Swap High Yield Series 26 Index
	See Sector Classification in Other Information section.

30 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Exchange-Traded Funds	$	1,854,362	$	—	$	—	$	—	$	—	$	1,854,362
Common Stocks		788,085		—		—		—		—		788,085
Credit Default Swaps		—		—		—		65,862		—		65,862
Equity Futures Contracts		—		29,249		—		—		—		29,249
Equity Index Swap Agreements		—		—		—		67,900		—		67,900
Interest Rate Futures Contracts		—		10,418		—		—		—		10,418
Mutual Funds		4,071,395		—		—		—		—		4,071,395
Repurchase Agreements		—		—		710,388		—		—		710,388
Total	$	6,713,842	$	39,667	$	710,388	$	133,762	$	—	$	7,597,659

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 31

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments in unaffiliated issuers, at value (cost $2,730,527)	$	2,642,447
Investments in affiliated issuers, at value (cost $4,101,312)		4,071,395
Repurchase agreements, at value (cost $710,388)		710,388
Total investments (cost $7,542,227)		7,424,230
Segregated cash with broker		174,026
Unrealized appreciation on swap agreements		133,762
Unamortized upfront premiums paid on credit default swaps		44,138
Cash		4
Receivables:
Swap settlement		14,489
Variation margin		8,330
Dividends		6,680
Protection fees on credit default swaps		6,115
Investment adviser		818
Foreign taxes reclaim		53
Total assets		7,812,645
Liabilities:
Payable for:
Fund shares redeemed		19,065
Licensing fees		14,242
Securities purchased		6,276
Management fees		5,795
Transfer agent and administrative fees		1,610
Distribution and service fees		1,275
Portfolio accounting fees		644
Miscellaneous		1,820
Total liabilities		50,727
Commitments and contingent liabilities (Note 12)		—
Net assets	$	7,761,918
Net assets consist of:
Paid in capital	$	8,469,469
Undistributed net investment income		263,164
Accumulated net realized loss on investments		(1,026,147	)
Net unrealized appreciation on investments		55,432
Net assets	$	7,761,918
A-Class:
Net assets	$	927,299
Capital shares outstanding		35,992
Net asset value per share	$	25.76
Maximum offering price per share (Net asset value divided by 95.25%)	$	27.04
C-Class:
Net assets	$	879,206
Capital shares outstanding		35,852
Net asset value per share	$	24.52
P-Class:
Net assets	$	1,666,519
Capital shares outstanding		64,684
Net asset value per share	$	25.76
Institutional Class:
Net assets	$	4,288,894
Capital shares outstanding		163,853
Net asset value per share	$	26.18

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $161)	$	121,018
Dividends from securities of affiliated issuers		53,119
Interest		1,053
Income from securities lending, net		828
Total investment income		176,018
Expenses:
Management fees		79,189
Transfer agent and administrative fees		21,997
Distribution and service fees:
A-Class		2,595
C-Class		10,161
P-Class		6,707
Portfolio accounting fees		8,799
Licensing fees		30,796
Custodian fees		1,106
Trustees’ fees*		631
Line of credit fees		5
Miscellaneous		10,918
Total expenses		172,904
Less:
Expenses waived by Adviser		(8,878	)
Net expenses		164,026
Net investment income		11,992
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(65,404	)
Investments in affiliated issuers		(442	)
Swap agreements		(108,247	)
Futures contracts		33,043
Net realized loss		(141,050	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(238,410	)
Investments in affiliated issuers		(29,917	)
Swap agreements		118,172
Futures contracts		(16,488	)
Net change in unrealized appreciation (depreciation)		(166,643	)
Net realized and unrealized loss		(307,693	)
Net decrease in net assets resulting from operations	$	(295,701	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

32 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	11,992		$	(122,551	)
Net realized loss on investments		(141,050	)		(459,938	)
Net change in unrealized appreciation (depreciation) on investments		(166,643	)		317,978
Net decrease in net assets resulting from operations		(295,701	)		(264,511	)
Distributions to shareholders from:
Net investment income
A-Class		(12,552	)		(3,504	)
C-Class		(14,515	)		(3,120	)
P-Class*		(34,475	)		(7,993	)
Institutional Class		(60,688	)		(7,317	)
Net realized gains
A-Class		—			(66,854	)
C-Class		—			(59,527	)
P-Class*		—			(152,483	)
Institutional Class		—			(139,593	)
Total distributions to shareholders		(122,230	)		(440,391	)
Capital share transactions:
Proceeds from sale of shares
A-Class		271,562			2,380,986
C-Class		18,599			524,109
P-Class*		592,653			2,315,469
Institutional Class		2,069,459			3,241,410
Distributions reinvested
A-Class		11,362			58,305
C-Class		14,503			61,687
P-Class*		33,768			157,641
Institutional Class		60,495			146,099
Cost of shares redeemed
A-Class		(682,794	)		(5,215,772	)
C-Class		(331,230	)		(517,330	)
P-Class*		(2,108,872	)		(5,658,844	)
Institutional Class		(1,434,110	)		(465,399	)
Net decrease from capital share transactions		(1,484,605	)		(2,971,639	)
Net decrease in net assets		(1,902,536	)		(3,676,541	)
Net assets:
Beginning of year		9,664,454			13,340,995
End of year	$	7,761,918		$	9,664,454
Undistributed net investment income at end of year	$	263,164		$	121,207

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 33

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2016			Year Ended March 31, 2015
Capital share activity:
Shares sold
A-Class		10,542			85,090
C-Class		741			19,302
P-Class*		22,446			83,244
Institutional Class		78,280			115,101
Shares issued from reinvestment of distributions
A-Class		455			2,286
C-Class		609			2,515
P-Class*		1,353			6,180
Institutional Class		2,387			5,658
Shares redeemed
A-Class		(26,123	)		(187,661	)
C-Class		(13,297	)		(19,532	)
P-Class*		(82,826	)		(205,278	)
Institutional Class		(54,656	)		(16,890	)
Net decrease in shares		(60,089	)		(109,985	)

* H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015 — See Note 13.

34 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

EVENT DRIVEN AND DISTRESSED STRATEGIES 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	26.82		$	28.42		$	27.56		$	25.37		$	26.86
Income (loss) from investment operations:
Net investment income (loss)a		.03			(.31	)		(.49	)		(.21	)		(.37	)
Net gain (loss) on investments (realized and unrealized)		(.72	)		(.09	)		3.09			2.40			(.36	)
Total from investment operations		(.69	)		(.40	)		2.60			2.19			(.73	)
Less distributions from:
Net investment income		(.37	)		(.06	)		—			—			—
Net realized gains		—			(1.14	)		(1.74	)		—			(.76	)
Total distributions		(.37	)		(1.20	)		(1.74	)		—			(.76	)
Net asset value, end of period	$	25.76		$	26.82		$	28.42		$	27.56		$	25.37
Total Returnb		(2.52	%)		(1.18	%)		9.58	%		8.63	%		(2.60	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	927		$	1,371		$	4,303		$	2,080		$	2,595
Ratios to average net assets:
Net investment income (loss)		0.11	%		(1.10	%)		(1.73	%)		(0.80	%)		(1.43	%)
Total expensesc		2.00	%		2.01	%		2.02	%		2.03	%		1.93	%
Net expensesd		1.90	%		1.90	%		1.90	%		1.91	%		1.85	%
Portfolio turnover rate		32	%		107	%		161	%		228	%		513	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	25.74		$	27.53		$	26.95		$	24.99		$	26.67
Income (loss) from investment operations:
Net investment income (loss)a		(.16	)		(.45	)		(.67	)		(.43	)		(.52	)
Net gain (loss) on investments (realized and unrealized)		(.69	)		(.14	)		2.99			2.39			(.40	)
Total from investment operations		(.85	)		(.59	)		2.32			1.96			(.92	)
Less distributions from:
Net investment income		(.37	)		(.06	)		—			—			—
Net realized gains		—			(1.14	)		(1.74	)		—			(.76	)
Total distributions		(.37	)		(1.20	)		(1.74	)		—			(.76	)
Net asset value, end of period	$	24.52		$	25.74		$	27.53		$	26.95		$	24.99
Total Returnb		(3.25	%)		(1.92	%)		8.74	%		7.89	%		(3.38	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	879		$	1,230		$	1,253		$	1,038		$	1,022
Ratios to average net assets:
Net investment income (loss)		(0.64	%)		(1.68	%)		(2.45	%)		(1.67	%)		(2.04	%)
Total expensesc		2.75	%		2.75	%		2.77	%		2.79	%		2.66	%
Net expensesd		2.65	%		2.65	%		2.65	%		2.66	%		2.60	%
Portfolio turnover rate		32	%		107	%		161	%		228	%		513	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 35

EVENT DRIVEN AND DISTRESSED STRATEGIES 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.

P-Class*	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	26.82		$	28.42		$	27.57		$	25.37		$	26.86
Income (loss) from investment operations:
Net investment income (loss)a		.02			(.29	)		(.49	)		(.23	)		(.34	)
Net gain (loss) on investments (realized and unrealized)		(.71	)		(.11	)		3.08			2.43			(.39	)
Total from investment operations		(.69	)		(.40	)		2.59			2.20			(.73	)
Less distributions from:
Net investment income		(.37	)		(.06	)		—			—			—
Net realized gains		—			(1.14	)		(1.74	)		—			(.76	)
Total distributions		(.37	)		(1.20	)		(1.74	)		—			(.76	)
Net asset value, end of period	$	25.76		$	26.82		$	28.42		$	27.57		$	25.37
Total Returnb		(2.52	%)		(1.18	%)		9.54	%		8.67	%		(2.60	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,667		$	3,318		$	6,809		$	6,134		$	6,183
Ratios to average net assets:
Net investment income (loss)		0.09	%		(1.05	%)		(1.72	%)		(0.88	%)		(1.33	%)
Total expensesc		2.00	%		2.01	%		2.02	%		2.03	%		1.91	%
Net expensesd		1.90	%		1.90	%		1.90	%		1.91	%		1.85	%
Portfolio turnover rate		32	%		107	%		161	%		228	%		513	%

36 | THE RYDEX FUNDS 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.

Institutional Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	27.17		$	28.71		$	27.76		$	25.49		$	26.91
Income (loss) from investment operations:
Net investment income (loss)a		.10			(.16	)		(.42	)		(.19	)		(.23	)
Net gain (loss) on investments (realized and unrealized)		(.72	)		(.18	)		3.11			2.46			(.43	)
Total from investment operations		(.62	)		(.34	)		2.69			2.27			(.66	)
Less distributions from:
Net investment income		(.37	)		(.06	)		—			—			—
Net realized gains		—			(1.14	)		(1.74	)		—			(.76	)
Total distributions		(.37	)		(1.20	)		(1.74	)		—			(.76	)
Net asset value, end of period	$	26.18		$	27.17		$	28.71		$	27.76		$	25.49
Total Returnb		(2.23	%)		(0.96	%)		9.84	%		8.91	%		(2.34	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,289		$	3,746		$	975		$	891		$	329
Ratios to average net assets:
Net investment income (loss)		0.37	%		(0.57	%)		(1.46	%)		(0.70	%)		(0.90	%)
Total expensesc		1.75	%		1.75	%		1.77	%		1.80	%		1.61	%
Net expensesd		1.65	%		1.65	%		1.65	%		1.67	%		1.58	%
Portfolio turnover rate		32	%		107	%		161	%		228	%		513	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Does not include expenses of the underlying funds in which the Fund invests.
d	Net expense information reflects the expense ratios after expense waivers.
*	H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015 — See Note 13.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 37

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Emerging Markets 2x Strategy Fund H-Class returned -24.88%, while the BNY Mellon Emerging Markets 50 ADR Index returned -8.86% over the same period. For comparison, the S&P 500 Index returned 1.78%.

For the period, Emerging Markets 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of 200% of the daily price movement of the BNY Mellon Emerging Markets 50 ADR Index.

For the period, the sectors contributing the most to the performance of the underlying index were Information Technology and Utilities. The sectors detracting the most from the return of the underlying index were Financials and Energy.

The stocks in the underlying benchmark which rose the most over the past year were Ctrip.com International ADR, Netease, Inc ADR, and Korea Electric Power Corp. ADR. The stocks in the underlying benchmark which fell the most over the past year were Cia Brasileira de Dis PRF, China Life Insurance Co. ADR, and PetroChina Co. Ltd ADR.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s negative performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

Performance displayed represents past performance, which is no guarantee of future results.

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

38 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

COUNTRY DIVERSIFICATION

At March 31, 2016, the investment diversification of the Fund by country was as follows:

Country	% of Common Stocks	Value
China	30%	$ 3,887,259
Brazil	15%	1,903,200
Taiwan, Province of China	14%	1,854,764
India	10%	1,364,053
Republic of Korea	8%	1,026,214
Mexico	8%	980,533
Cayman Islands	7%	858,763
Other	8%	1,045,508
Total Common Stocks	100%	$ 12,920,294

The chart above reflects percentages of the value of common stocks.

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Taiwan Semiconductor Manufacturing Company Ltd. ADR	8.4%
Alibaba Group Holding Ltd. ADR	7.7%
China Mobile Ltd. ADR	5.3%
Baidu, Inc. ADR	4.5%
Infosys Ltd. ADR	3.3%
America Movil SAB de CV — Class L ADR	2.3%
Itau Unibanco Holding S.A. ADR	2.3%
HDFC Bank Ltd. ADR	2.2%
JD.com, Inc. ADR	2.0%
Ambev S.A. ADR	2.0%
Top Ten Total	40.0%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (10/29/10)
A-Class Shares	-24.84%	-18.29%	-15.85%
A-Class Shares with sales charge†	-28.41%	-19.08%	-16.60%
C-Class Shares	-25.48%	-18.66%	-16.27%
C-Class Shares with CDSC‡	-26.21%	-18.66%	-16.27%
H-Class Shares	-24.88%	-18.27%	-15.83%
BNY Mellon Emerging Markets 50 ADR Index	-8.86%	-5.98%	-4.52%
S&P 500 Index	1.78%	11.58%	13.16%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The BNY Mellon Emerging Markets 50 ADR Index and the S&P 500 Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 39

SCHEDULE OF INVESTMENTS	March 31, 2016
EMERGING MARKETS 2x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 73.9%
Communications - 29.3%
Alibaba Group Holding Ltd. ADR*		16,942	$	1,338,926
China Mobile Ltd. ADR		16,611		921,081
Baidu, Inc. ADR*		4,084		779,554
America Movil SAB de CV — Class L ADR		25,597		397,521
JD.com, Inc. ADR*		13,449		356,399
Ctrip.com International Ltd. ADR*		5,231		231,524
Chunghwa Telecom Company Ltd. ADR		5,735		193,614
Telekomunikasi Indonesia Persero Tbk PT ADR		3,726		189,467
Grupo Televisa SAB ADR		6,601		181,263
China Unicom Hong Kong Ltd. ADR		8,659		113,952
Qihoo 360 Technology Company Ltd. ADR*		1,483		112,041
China Telecom Corporation Ltd. ADR		2,094		109,956
SK Telecom Company Ltd. ADR		5,372		108,353
Telefonica Brasil S.A. ADR		7,093		88,592
Total Communications				5,122,243
Technology - 14.3%
Taiwan Semiconductor Manufacturing Company Ltd. ADR		56,321		1,475,610
Infosys Ltd. ADR		30,127		573,016
NetEase, Inc. ADR		1,106		158,799
Wipro Ltd. ADR		8,859		111,446
Advanced Semiconductor Engineering, Inc. ADR		18,955		110,887
United Microelectronics Corp. ADR		35,891		74,653
Total Technology				2,504,411
Financial - 10.9%
Itau Unibanco Holding S.A. ADR		45,817		393,569
HDFC Bank Ltd. ADR		6,174		380,504
Banco Bradesco S.A. ADR		39,332		293,023
China Life Insurance Company Ltd. ADR		22,453		275,947
Shinhan Financial Group Company Ltd. ADR*		7,154		251,892
KB Financial Group, Inc. ADR*		5,829		160,822
ICICI Bank Ltd. ADR		21,449		153,575
Total Financial				1,909,332
Energy - 7.1%
CNOOC Ltd. ADR		2,425		283,871
China Petroleum & Chemical Corp. ADR		3,849		250,762
Sasol Ltd. ADR		7,658		226,217
PetroChina Company Ltd. ADR		3,183		211,033
Petroleo Brasileiro S.A. Preferred ADR*		30,849		139,746
Petroleo Brasileiro S.A. ADR*		22,457		131,149
Total Energy				1,242,778
Consumer, Non-cyclical - 4.5%
Ambev S.A. ADR		66,370		343,797
Fomento Economico Mexicano SAB de CV ADR		1,989		191,560
BRF S.A. ADR		9,200		130,824
Coca-Cola Femsa SAB de CV ADR		750		62,288
Dr Reddy’s Laboratories Ltd. ADR		1,260		56,939
Total Consumer, Non-cyclical				785,408
Basic Materials - 3.6%
POSCO ADR		4,841		229,124
Ultrapar Participacoes S.A. ADR		6,548		126,245
Vale S.A. ADR		22,813		96,043
Vale S.A. Preferred ADR		30,583		95,419
AngloGold Ashanti Ltd. ADR*		6,066		83,044
Total Basic Materials				629,875
Utilities - 2.0%
Korea Electric Power Corp. ADR*		7,748		199,511
Enersis Americas S.A. ADR		5,777		80,300
Empresa Nacional de Electricidad S.A. ADR		1,650		68,657
Total Utilities				348,468
Industrial - 1.7%
Cemex SAB de CV ADR*		20,316		147,901
LG Display Company Ltd. ADR*		6,694		76,512
Embraer S.A. ADR		2,458		64,793
Total Industrial				289,206
Consumer, Cyclical - 0.5%
Tata Motors Ltd. ADR*		3,049		88,573
Total Common Stocks
(Cost $11,935,487)				12,920,294

	Face Amount
REPURCHASE AGREEMENTS††,1 - 32.8%
HSBC Group issued 03/31/16 at 0.21% due 04/01/162	$	4,175,893		4,175,893
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		1,565,564		1,565,564
Total Repurchase Agreements
(Cost $5,741,457)				5,741,457
Total Investments - 106.7%
(Cost $17,676,944)			$	18,661,751
Other Assets & Liabilities, net - (6.7)%				(1,163,841	)
Total Net Assets - 100.0%			$	17,497,910

40 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
EMERGING MARKETS 2x STRATEGY FUND

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2016 MSCI Emerging Markets Index Mini Futures Contracts (Aggregate Value of Contracts $2,125,170)		51	$	34,432

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International April 2016 Bank of New York Mellon Emerging Markets 50 ADR Index Swap 0.40%3, Terminating 04/27/16 (Notional Value $19,902,690)		10,070	$	370,957

*	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 March 31, 2016.
3	Total Return based on Bank of New York Mellon Emerging Markets 50 ADR Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	ADR — American Depositary Receipt
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	12,920,294	$	—	$	—	$	—	$	—	$	12,920,294
Equity Futures Contracts		—		34,432		—		—		—		34,432
Equity Index Swap Agreements		—		—		—		370,957		—		370,957
Repurchase Agreements		—		—		5,741,457		—		—		5,741,457
Total	$	12,920,294	$	34,432	$	5,741,457	$	370,957	$	—	$	19,067,140

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 41

EMERGING MARKETS 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $11,935,487)	$	12,920,294
Repurchase agreements, at value (cost $5,741,457)		5,741,457
Total investments (cost $17,676,944)		18,661,751
Unrealized appreciation on swap agreements		370,957
Segregated cash with broker		91,800
Cash		20
Receivables:
Fund shares sold		1,186,648
Swap settlement		61,596
Dividends		659
Foreign taxes reclaim		148
Interest		34
Total assets		20,373,613
Liabilities:
Payable for:
Fund shares redeemed		2,843,600
Management fees		14,285
Distribution and service fees		4,193
Transfer agent and administrative fees		3,968
Variation margin		3,061
Portfolio accounting fees		2,381
Miscellaneous		4,215
Total liabilities		2,875,703
Commitments and contingent liabilities (Note 12)		—
Net assets	$	17,497,910
Net assets consist of:
Paid in capital	$	31,680,588
Accumulated net investment loss		(33,899	)
Accumulated net realized loss on investments		(15,538,975	)
Net unrealized appreciation on investments		1,390,196
Net assets	$	17,497,910
A-Class:
Net assets	$	3,988,205
Capital shares outstanding		89,040
Net asset value per share	$	44.79
Maximum offering price per share (Net asset value divided by 95.25%)	$	47.02
C-Class:
Net assets	$	271,486
Capital shares outstanding		6,233
Net asset value per share	$	43.56
H-Class:
Net assets	$	13,238,219
Capital shares outstanding		295,207
Net asset value per share	$	44.84

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends (net of foreign withholding tax of $6,725)	$	94,640
Interest		3,302
Income from securities lending, net		957
Total investment income		98,899
Expenses:
Management fees		89,690
Transfer agent and administrative fees		24,916
Distribution and service fees:
A-Class		1,848
C-Class		6,022
H-Class		21,564
Portfolio accounting fees		14,950
Registration fees		9,470
Custodian fees		1,265
Trustees’ fees*		681
Line of credit fees		66
Miscellaneous		6,575
Total expenses		177,047
Net investment loss		(78,148	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(1,840,788	)
Swap agreements		(2,020,431	)
Futures contracts		(178,437	)
Net realized loss		(4,039,656	)
Net change in unrealized appreciation (depreciation) on:
Investments		929,367
Swap agreements		299,432
Futures contracts		34,443
Net change in unrealized appreciation (depreciation)		1,263,242
Net realized and unrealized loss		(2,776,414	)
Net decrease in net assets resulting from operations	$	(2,854,562	)

* Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.

42 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

EMERGING MARKETS 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(78,148	)	$	76,506
Net realized loss on investments		(4,039,656	)		(8,079,092	)
Net change in unrealized appreciation (depreciation) on investments		1,263,242			(353,133	)
Net decrease in net assets resulting from operations		(2,854,562	)		(8,355,719	)
Distributions to shareholders from:
Net investment income
A-Class		(12,572	)		—
C-Class		(4,644	)		—
H-Class		(35,994	)		—
Total distributions to shareholders		(53,210	)		—
Capital share transactions:
Proceeds from sale of shares
A-Class		43,678,611			34,963,639
C-Class		20,590,651			43,038,252
H-Class		334,036,652			445,957,288
Distributions reinvested
A-Class		12,352			—
C-Class		4,644			—
H-Class		35,584			—
Cost of shares redeemed
A-Class		(40,616,785	)		(35,480,152	)
C-Class		(21,571,134	)		(42,085,644	)
H-Class		(319,569,790	)		(440,104,061	)
Net increase from capital share transactions		16,600,785			6,289,322
Net increase (decrease) in net assets		13,693,013			(2,066,397	)
Net assets:
Beginning of year		3,804,897			5,871,294
End of year	$	17,497,910		$	3,804,897
(Accumulated net investment loss)/Undistributed net investment income at end of year	$	(33,899	)	$	53,210
Capital share activity:
Shares sold
A-Class		896,183			525,431
C-Class		401,507			596,138
H-Class		6,540,164			6,042,313
Shares issued from reinvestment of distributions
A-Class		288			—
C-Class		111			—
H-Class		830			—
Shares redeemed
A-Class		(813,738	)		(530,350	)
C-Class		(417,067	)		(580,699	)
H-Class		(6,281,031	)		(6,078,169	)
Net increase (decrease) in shares		327,247			(25,336	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 43

EMERGING MARKETS 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	60.50		$	66.27		$	73.59		$	87.40		$	134.76
Income (loss) from investment operations:
Net investment income (loss)a		(.23	)		(.37	)		(.54	)		(.35	)		(—	)b
Net gain (loss) on investments (realized and unrealized)		(14.83	)		(5.40	)		(6.78	)		(13.46	)		(41.76	)
Total from investment operations		(15.06	)		(5.77	)		(7.32	)		(13.81	)		(41.76	)
Less distributions from:
Net investment income		(.65	)		—			—			—			—
Net realized gains		—			—			—			—			(5.60	)
Total distributions		(.65	)		—			—			—			(5.60	)
Net asset value, end of period	$	44.79		$	60.50		$	66.27		$	73.59		$	87.40
Total Returnc		(24.84	%)		(8.72	%)		(9.96	%)		(15.79	%)		(30.00	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,988		$	382		$	744		$	106		$	363
Ratios to average net assets:
Net investment income (loss)		(0.48	%)		(0.53	%)		(0.82	%)		(0.51	%)		(0.01	%)
Total expenses		1.75	%		1.75	%		1.81	%		1.88	%		1.77	%
Net expenses		1.75	%		1.75	%		1.76	%d		1.75	%d		1.69	%d
Portfolio turnover rate		2,874	%		1,085	%		1,412	%		730	%		883	%

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	59.37		$	65.46		$	72.92		$	87.31		$	134.13
Income (loss) from investment operations:
Net investment income (loss)a		(.74	)		(.73	)		(1.04	)		(1.25	)		(.90	)
Net gain (loss) on investments (realized and unrealized)		(14.42	)		(5.36	)		(6.42	)		(13.14	)		(40.32	)
Total from investment operations		(15.16	)		(6.09	)		(7.46	)		(14.39	)		(41.22	)
Less distributions from:
Net investment income		(.65	)		—			—			—			—
Net realized gains		—			—			—			—			(5.60	)
Total distributions		(.65	)		—			—			—			(5.60	)
Net asset value, end of period	$	43.56		$	59.37		$	65.46		$	72.92		$	87.31
Total Returnc		(25.48	%)		(9.32	%)		(10.21	%)		(16.49	%)		(29.75	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	271		$	1,287		$	409		$	108		$	62
Ratios to average net assets:
Net investment income (loss)		(1.49	%)		(0.99	%)		(1.73	%)		(1.61	%)		(0.87	%)
Total expenses		2.46	%		2.48	%		2.66	%		2.59	%		2.54	%
Net expenses		2.46	%		2.48	%		2.61	%d		2.46	%d		2.46	%d
Portfolio turnover rate		2,874	%		1,085	%		1,412	%		730	%		883	%

44 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e			Year Ended March 31, 2012e
Per Share Data
Net asset value, beginning of period	$	60.61		$	66.37		$	73.87		$	87.74		$	134.69
Income (loss) from investment operations:
Net investment income (loss)a		(.41	)		.20			(.34	)		(.35	)		(.35	)
Net gain (loss) on investments (realized and unrealized)		(14.71	)		(5.96	)		(7.16	)		(13.52	)		(41.00	)
Total from investment operations		(15.12	)		(5.76	)		(7.50	)		(13.87	)		(41.35	)
Less distributions from:
Net investment income		(.65	)		—			—			—			—
Net realized gains		—			—			—			—			(5.60	)
Total distributions		(.65	)		—			—			—			(5.60	)
Net asset value, end of period	$	44.84		$	60.61		$	66.37		$	73.87		$	87.74
Total Returnc		(24.88	%)		(8.71	%)		(10.19	%)		(15.78	%)		(29.70	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,238		$	2,136		$	4,719		$	2,087		$	4,713
Ratios to average net assets:
Net investment income (loss)		(0.76	%)		0.25	%		(0.51	%)		(0.49	%)		(0.37	%)
Total expenses		1.74	%		1.75	%		1.80	%		1.83	%		1.77	%
Net expenses		1.74	%		1.75	%		1.74	%d		1.69	%d		1.69	%d
Portfolio turnover rate		2,874	%		1,085	%		1,412	%		730	%		883	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Net investment loss is less than $0.01 per share.
c	Total return does not reflect the impact of any applicable sales charges.
d	Net expense information reflects the expense ratios after expense waivers.
e	Reverse share split — Per share amounts for the periods presented through February 21, 2014 have been restated to reflect a 1:5 reverse share split effective February 21, 2014.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 45

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

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.

For the one-year period ended March 31, 2016, Inverse Emerging Markets 2x Strategy Fund H-Class returned 0.48%, while the BNY Mellon Emerging Markets 50 ADR Index returned -8.86% over the same period. For comparison, the S&P 500 Index returned 1.78%.

For the period, Inverse Emerging Markets 2x Strategy Fund maintained a daily correlation of over 99% to its benchmark of -200% of the daily price movement of the BNY Mellon Emerging Markets 50 ADR Index.

For the period, the sectors contributing the most to the performance of the underlying index were Information Technology and Utilities. The sectors detracting the most from the return of the underlying index were Financials and Energy.

The stocks in the underlying benchmark which rose the most over the past year were Ctrip.com International ADR, Netease, Inc ADR, and Korea Electric Power Corp. ADR. The stocks in the underlying benchmark which fell the most over the past year were Cia Brasileira de Dis PRF, China Life Insurance Co. ADR, and PetroChina Co. Ltd ADR.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

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 to ensure that they are consistent with their strategies, as frequently as daily.

The effects of compounding may cause the longer-term correlation of the Fund to its benchmark to diminish. The apparent discrepancy between the leveraged and unleveraged indices is the result of compounding, which is described briefly on page 6 of this report.

Performance displayed represents past performance, which is no guarantee of future results.

46 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Holdings Diversification (Market Exposure as % of Net Assets)

“Holdings Diversification (Market Exposure as % of Net Assets)” excludes any temporary cash investments.

Cumulative Fund Performance*

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 and futures contracts.

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	5 Year	Since Inception (10/29/10)
A-Class Shares	0.53%	-4.31%	-6.90%
A-Class Shares with sales charge†	-4.23%	-5.23%	-7.73%
C-Class Shares	-0.29%	-4.09%	-6.56%
C-Class Shares with CDSC‡	-1.29%	-4.09%	-6.56%
H-Class Shares	0.48%	-4.41%	-6.99%
BNY Mellon Emerging Markets 50 ADR Index	-8.86%	-5.98%	-4.52%
S&P 500 Index	1.78%	11.58%	13.16%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The BNY Mellon Emerging Markets 50 ADR Index and the S&P 500 Index are unmanaged indices and, unlike the Fund, have no management fees or operating expenses to reduce their reported returns. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

THE RYDEX FUNDS ANNUAL REPORT | 47

SCHEDULE OF INVESTMENTS	March 31, 2016
INVERSE EMERGING MARKETS 2x STRATEGY FUND

	Face Amount		Value
REPURCHASE AGREEMENTS††,1 - 10.8%
HSBC Group issued 03/31/16 at 0.21% due 04/01/162	$	1,472,100	$	1,472,100
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16		1,458,452		1,458,452
Total Repurchase Agreements
(Cost $2,930,552)				2,930,552
Total Investments - 10.8%
(Cost $2,930,552)			$	2,930,552
Other Assets & Liabilities, net - 89.2%				24,224,642
Total Net Assets - 100.0%			$	27,155,194

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2016 MSCI Emerging Markets Index Mini Futures Contracts (Aggregate Value of Contracts $4,583,700)		110	$	140

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Goldman Sachs International April 2016 Bank of New York Mellon Emerging Markets 50 ADR Index Swap 0.40%3, Terminating 04/27/16 (Notional Value $49,755,621)		25,174	$	(44,047	)

†	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 March 31, 2016.
3	Total Return based on Bank of New York Mellon Emerging Markets 50 ADR Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2016.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	140	$	—	$	—	$	—	$	140
Repurchase Agreements		—		—		2,930,552		—		—		2,930,552
Total	$	—	$	140	$	2,930,552	$	—	$	—	$	2,930,692
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	44,047	$	—	$	44,047

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

48 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE EMERGING MARKETS 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Repurchase agreements, at value (cost $2,930,552)	$	2,930,552
Receivables:
Fund shares sold		25,815,990
Variation margin		116
Interest		18
Total assets		28,746,676
Liabilities:
Unrealized depreciation on swap agreements		44,047
Payable for:
Fund shares redeemed		1,448,767
Swap settlement		62,158
Management fees		16,703
Distribution and service fees		4,831
Transfer agent and administrative fees		4,640
Portfolio accounting fees		2,784
Miscellaneous		7,552
Total liabilities		1,591,482
Commitments and contingent liabilities (Note 12)		—
Net assets	$	27,155,194
Net assets consist of:
Paid in capital	$	44,564,384
Accumulated net investment loss		(91,444	)
Accumulated net realized loss on investments		(17,273,839	)
Net unrealized depreciation on investments		(43,907	)
Net assets	$	27,155,194
A-Class:
Net assets	$	447,709
Capital shares outstanding		26,379
Net asset value per share	$	16.97
Maximum offering price per share (Net asset value divided by 95.25%)	$	17.82
C-Class:
Net assets	$	371,438
Capital shares outstanding		21,464
Net asset value per share	$	17.31
H-Class:
Net assets	$	26,336,047
Capital shares outstanding		1,560,216
Net asset value per share	$	16.88

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Interest	$	18,128
Total investment income		18,128
Expenses:
Management fees		169,344
Transfer agent and administrative fees		47,041
Distribution and service fees:
A-Class		877
C-Class		7,780
H-Class		44,222
Portfolio accounting fees		28,226
Custodian fees		2,305
Trustees’ fees*		1,431
Miscellaneous		31,891
Total expenses		333,117
Net investment loss		(314,989	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Swap agreements		(3,603,088	)
Futures contracts		(1,471,232	)
Net realized loss		(5,074,320	)
Net change in unrealized appreciation (depreciation) on:
Swap agreements		431,759
Futures contracts		107,047
Net change in unrealized appreciation (depreciation)		538,806
Net realized and unrealized loss		(4,535,514	)
Net decrease in net assets resulting from operations	$	(4,850,503	)

* 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 ANNUAL REPORT | 49

INVERSE EMERGING MARKETS 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(314,989	)	$	(211,160	)
Net realized loss on investments		(5,074,320	)		(6,625,291	)
Net change in unrealized appreciation (depreciation) on investments		538,806			74,346
Net decrease in net assets resulting from operations		(4,850,503	)		(6,762,105	)
Capital share transactions:
Proceeds from sale of shares
A-Class		6,224,104			11,215,785
C-Class		26,363,997			33,937,543
H-Class		537,108,862			297,810,126
Cost of shares redeemed
A-Class		(5,365,150	)		(15,735,897	)
C-Class		(26,282,809	)		(34,133,165	)
H-Class		(529,298,402	)		(274,012,457	)
Net increase from capital share transactions		8,750,602			19,081,935
Net increase in net assets		3,900,099			12,319,830
Net assets:
Beginning of year		23,255,095			10,935,265
End of year	$	27,155,194		$	23,255,095
Accumulated net investment loss at end of year	$	(91,444	)	$	(106,562	)
Capital share activity:
Shares sold
A-Class		334,307			737,908
C-Class		1,396,331			2,098,236
H-Class		26,997,163			18,525,000
Shares redeemed
A-Class		(311,601	)		(999,205	)
C-Class		(1,380,757	)		(2,106,091	)
H-Class		(26,811,435	)		(17,467,759	)
Net increase in shares		224,008			788,089

50 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

INVERSE EMERGING MARKETS 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	16.87		$	18.34		$	19.23		$	19.29		$	21.15
Income (loss) from investment operations:
Net investment income (loss)a		(.32	)		(.29	)		(.35	)		(.33	)		(.39	)
Net gain (loss) on investments (realized and unrealized)		.42			(1.18	)		(.54	)		.27			(1.47	)
Total from investment operations		.10			(1.47	)		(.89	)		(.06	)		(1.86	)
Net asset value, end of period	$	16.97		$	16.87		$	18.34		$	19.23		$	19.29
Total Returnb		0.53	%		(7.96	%)		(4.63	%)		(0.26	%)		(8.84	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	448		$	62		$	4,859		$	258		$	8
Ratios to average net assets:
Net investment income (loss)		(1.59	%)		(1.74	%)		(1.74	%)		(1.60	%)		(1.66	%)
Total expenses		1.75	%		1.75	%		1.78	%		1.85	%		1.78	%
Net expenses		1.75	%		1.75	%		1.75	%c		1.71	%c		1.69	%c
Portfolio turnover rate		—			—			—			—			—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	17.37		$	19.03		$	20.07		$	20.25		$	21.33
Income (loss) from investment operations:
Net investment income (loss)a		(.47	)		(.39	)		(.52	)		(.49	)		(.55	)
Net gain (loss) on investments (realized and unrealized)		.41			(1.27	)		(.52	)		.31			(.53	)
Total from investment operations		(.06	)		(1.66	)		(1.04	)		(.18	)		(1.08	)
Net asset value, end of period	$	17.31		$	17.37		$	19.03		$	20.07		$	20.25
Total Returnb		(0.29	%)		(8.78	%)		(5.23	%)		(0.84	%)		(5.06	%)d
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	371		$	102		$	262		$	115		$	1,261
Ratios to average net assets:
Net investment income (loss)		(2.44	%)		(2.47	%)		(2.44	%)		(2.41	%)		(2.41	%)
Total expenses		2.50	%		2.48	%		2.48	%		2.65	%		2.53	%
Net expenses		2.50	%		2.48	%		2.46	%c		2.51	%c		2.44	%c
Portfolio turnover rate		—			—			—			—			—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 51

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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013			Year Ended March 31, 2012
Per Share Data
Net asset value, beginning of period	$	16.80		$	18.33		$	19.22		$	19.29		$	21.15
Income (loss) from investment operations:
Net investment income (loss)a		(.34	)		(.28	)		(.35	)		(.33	)		(.38	)
Net gain (loss) on investments (realized and unrealized)		.42			(1.25	)		(.54	)		.26			(1.48	)
Total from investment operations		.08			(1.53	)		(.89	)		(.07	)		(1.86	)
Net asset value, end of period	$	16.88		$	16.80		$	18.33		$	19.22		$	19.29
Total Returnb		0.48	%		(8.35	%)		(4.63	%)		(0.36	%)		(8.79	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	26,336		$	23,091		$	5,815		$	1,942		$	2,215
Ratios to average net assets:
Net investment income (loss)		(1.65	%)		(1.71	%)		(1.74	%)		(1.56	%)		(1.67	%)
Total expenses		1.74	%		1.73	%		1.78	%		1.82	%		1.79	%
Net expenses		1.74	%		1.73	%		1.76	%c		1.68	%c		1.70	%c
Portfolio turnover rate		—			—			—			—			—

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Total return does not reflect the impact of any applicable sales charges.
c	Net expense information reflects the expense ratios after expense waivers.
d	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.

52 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2016

EMERGING MARKETS BOND STRATEGY FUND

OBJECTIVE: Seeks to provide investment results that correlate, before fees and expenses, to the performance of the emerging markets bond market as defined by the Adviser.

The Emerging Markets Bond Fund H-Class returned 4.82% for the one-year period ended March 31, 2016. By comparison, the Bank of America Merrill Lynch U.S. Dollar Emerging Markets Sovereign Plus Index returned 3.71% over the same period.

Increased global economic instability over the past year led to volatility of credit spreads across most countries. The slowing of the Chinese economy has weakened demand for raw materials, negatively affecting exporters of raw materials. In addition volatility in oil prices affected the credit spreads of countries with a high dependency on oil revenues.

Over the past year, of the countries remaining within the credit default swaps used by the Fund, Russia was the only country which experienced a tightening of credit spreads. Venezuela, South Africa, and Brazil were the three countries which experienced the largest increase in credit spreads. During this period, Ukraine defaulted, which was a negative impact for the fund.

Derivatives in the Fund were used to help provide exposure to the composition of the benchmark in the highest efficient manner and to provide leverage, not for hedging purposes. The results of derivatives use during the period were within our expectations and were a factor in the Fund’s positive performance.

Performance displayed represents past performance, which is no guarantee of future results.

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 8, 2013
C-Class	October 8, 2013
H-Class	October 8, 2013

The Fund invests principally in derivate instruments such as swap agreements and futures contracts.

Largest Holdings (% of Total Net Assets)
iShares JP Morgan USD Emerging Markets Bond ETF	20.0%
PowerShares Emerging Markets Sovereign Debt Portfolio	20.0%
Total	40.0%
“Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 53

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2016

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2016

	1 Year	Since Inception (10/08/13)
A-Class Shares	5.13%	0.11%
A-Class Shares with sales charge†	0.12%	-1.84%
C-Class Shares	3.73%	-0.93%
C-Class Shares with CDSC‡	2.85%	-0.93%
H-Class Shares	4.82%	-0.16%
BofA Merrill Lynch U.S. Dollar Emerging Markets Sovereign Plus Index	3.71%	5.43%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns are historical and include changes in principal and reinvested dividends and capital gains and do not reflect the effect of taxes. The BofA ML US Dollar Emerging Markets Sovereign Plus Index is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return. The graphs are based on A-Class shares and H-Class shares only; performance for C-Class shares will vary due to differences in fee structure.
†	Fund returns are calculated using the maximum sales charge of 4.75%.
‡	Fund returns include a CDSC of 1% if redeemed within 12 months of purchase.

54 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2016
EMERGING MARKETS BOND STRATEGY FUND

	Shares		Value
EXCHANGE-TRADED FUNDS - 40.0%
iShares JP Morgan USD Emerging Markets Bond ETF		1,087	$	119,951
PowerShares Emerging Markets Sovereign Debt Portfolio		4,233		119,794
Total Exchange-Traded Funds
(Cost $230,200)				239,745

	Face Amount
REPURCHASE AGREEMENTS††,1 - 42.7%
Royal Bank of Canada issued 03/31/16 at 0.23% due 04/01/16	$	191,390		191,390
HSBC Group issued 03/31/16 at 0.21% due 04/01/16		65,081		65,081
Total Repurchase Agreements
(Cost $256,471)				256,471
Total Investments - 82.7%
(Cost $486,671)			$	496,216
Other Assets & Liabilities, net - 17.3%				103,734
Total Net Assets - 100.0%			$	599,950

	Contracts		Unrealized Gain
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2016 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $121,195)		1	$	1,623
June 2016 U.S. Treasury 10 Year Note Futures Contracts (Aggregate Value of Contracts $260,844)		2		1,528
(Total Aggregate Value of Contracts $382,039)			$	3,151

CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENTS PROTECTION SOLD††
Index	Counterparty	Exchange	Protection Premium Rate			Maturity Date	Notional Principal		Notional Value			Upfront Premiums Received			Unrealized Depreciation
CDX.EM-25 Index	Barclays Bank plc	ICE		1.00	%	06/20/21	$	200,000	$	(182,462	)	$	(17,110	)	$	(428	)
CDX.EM-25 Index	Goldman Sachs International	ICE		1.00	%	06/20/21		350,000		(319,308	)		(29,612	)		(1,080	)
												$	(46,722	)	$	(1,508	)

†	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.
	ICE — Intercontinental Exchange
	plc — Public Limited Company
	CDX.EM-25 Index — Credit Default Swap Emerging Markets Series 25 Index
	See Sector Classification in Other Information section

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 55

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2016
EMERGING MARKETS BOND STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2016 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Exchange-Traded Funds	$	239,745	$	—	$	—	$	—	$	—	$	239,745
Interest Rate Futures Contracts		—		3,151		—		—		—		3,151
Repurchase Agreements		—		—		256,471		—		—		256,471
Total	$	239,745	$	3,151	$	256,471	$	—	$	—	$	499,367
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Credit Default Swaps	$	—	$	—	$	—	$	1,508	$	—	$	1,508

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

For the year ended March 31, 2016, there were no transfers between levels.

56 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

EMERGING MARKETS BOND STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2016

Assets:
Investments, at value (cost $230,200)	$	239,745
Repurchase agreements, at value (cost $256,471)		256,471
Total investments (cost $486,671)		496,216
Segregated cash with broker		146,468
Receivables:
Dividends		31,164
Fund shares sold		7,924
Variation margin		1,104
Interest		200
Total assets		683,076
Liabilities:
Unamortized upfront premiums received on credit default swaps		46,722
Unrealized depreciation on swap agreements		1,508
Payable for:
Management fees		14,562
Distribution and service fees		4,930
Transfer agent and administrative fees		4,854
Securities purchased		4,292
Portfolio accounting fees		2,913
Fund shares redeemed		5
Miscellaneous		3,340
Total liabilities		83,126
Commitments and contingent liabilities (Note 12)		—
Net assets	$	599,950
Net assets consist of:
Paid in capital	$	557,835
Undistributed net investment income		10,603
Accumulated net realized gain on investments		20,324
Net unrealized appreciation on investments		11,188
Net assets	$	599,950
A-Class:
Net assets	$	258,728
Capital shares outstanding		14,225
Net asset value per share	$	18.19
Maximum offering price per share (Net asset value divided by 95.25%)	$	19.10
C-Class:
Net assets	$	129,440
Capital shares outstanding		7,340
Net asset value per share	$	17.63
H-Class:
Net assets	$	211,782
Capital shares outstanding		11,734
Net asset value per share	$	18.05

STATEMENT OF OPERATIONS

Year Ended March 31, 2016

Investment Income:
Dividends	$	62,260
Interest		1,960
Total investment income		64,220
Expenses:
Management fees		17,219
Transfer agent and administrative fees		5,741
Distribution and service fees:
A-Class		4,765
C-Class		511
H-Class		851
Portfolio accounting fees		3,446
Custodian fees		276
Trustees’ fees*		42
Miscellaneous		3,615
Total expenses		36,466
Net investment income		27,754
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		252,666
Swap agreements		597,568
Futures contracts		(122,136	)
Net realized gain		728,098
Net change in unrealized appreciation (depreciation) on:
Investments		8,955
Swap agreements		(636	)
Futures contracts		2,357
Net change in unrealized appreciation (depreciation)		10,676
Net realized and unrealized gain		738,774
Net increase in net assets resulting from operations	$	766,528

* 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 ANNUAL REPORT | 57

EMERGING MARKETS BOND STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2016			Year Ended March 31, 2015
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	27,754		$	(78,087	)
Net realized gain (loss) on investments		728,098			(201,722	)
Net change in unrealized appreciation (depreciation) on investments		10,676			(39,251	)
Net increase (decrease) in net assets resulting from operations		766,528			(319,060	)
Distributions to shareholders from:
Net investment income
A-Class		(4,095	)		(7,457	)
C-Class		(6,486	)		(2,377	)
H-Class		(18,553	)		(181,291	)
Total distributions to shareholders		(29,134	)		(191,125	)
Capital share transactions:
Proceeds from sale of shares
A-Class		33,166,270			18,252,568
C-Class		183,968			1,144,653
H-Class		4,344,437			3,651,528
Distributions reinvested
A-Class		4,095			6,103
C-Class		4,976			2,377
H-Class		18,553			33,679
Cost of shares redeemed
A-Class		(33,725,205	)		(18,413,103	)
C-Class		(90,538	)		(1,123,838	)
H-Class		(4,269,575	)		(8,907,076	)
Net decrease from capital share transactions		(363,019	)		(5,353,109	)
Net increase (decrease) in net assets		374,375			(5,863,294	)
Net assets:
Beginning of year		225,575			6,088,869
End of year	$	599,950		$	225,575
Undistributed net investment income at end of year	$	10,603		$	5,111
Capital share activity:
Shares sold
A-Class		1,894,659			689,810
C-Class		10,061			44,326
H-Class		231,296			149,092
Shares issued from reinvestment of distributions
A-Class		240			297
C-Class		299			117
H-Class		1,091			1,645
Shares redeemed
A-Class		(1,882,576	)		(708,041	)
C-Class		(4,690	)		(43,173	)
H-Class		(228,207	)		(364,753	)
Net increase (decrease) in shares		22,173			(230,680	)

58 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

EMERGING MARKETS BOND 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.

A-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Period Ended March 31, 2014a
Per Share Data
Net asset value, beginning of period	$	20.38		$	25.17		$	25.00
Income (loss) from investment operations:
Net investment income (loss)b		.28			(.36	)		(.21	)
Net gain (loss) on investments (realized and unrealized)		.56			(.94	)		.38
Total from investment operations		.84			(1.30	)		.17
Less distributions from:
Net investment income		(3.03	)		(3.49	)		—
Total distributions		(3.03	)		(3.49	)		—
Net asset value, end of period	$	18.19		$	20.38		$	25.17
Total Returnc		5.13	%		(5.31	%)		0.72	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	259		$	39		$	499
Ratios to average net assets:
Net investment income (loss)		1.59	%		(1.50	%)		(1.78	%)
Total expensesd		1.58	%		1.71	%		1.83	%
Portfolio turnover rate		21,555	%		655	%		—

C-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Period Ended March 31, 2014a
Per Share Data
Net asset value, beginning of period	$	20.08		$	25.09		$	25.00
Income (loss) from investment operations:
Net investment income (loss)b		(.25	)		(.45	)		(.28	)
Net gain (loss) on investments (realized and unrealized)		.83			(1.07	)		.37
Total from investment operations		.58			(1.52	)		.09
Less distributions from:
Net investment income		(3.03	)		(3.49	)		—
Total distributions		(3.03	)		(3.49	)		—
Net asset value, end of period	$	17.63		$	20.08		$	25.09
Total Returnc		3.73	%		(6.19	%)		0.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	129		$	34		$	10
Ratios to average net assets:
Net investment income (loss)		(1.33	%)		(1.85	%)		(2.34	%)
Total expensesd		2.32	%		2.24	%		2.39	%
Portfolio turnover rate		21,555	%		655	%		—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 59

EMERGING MARKETS 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.

H-Class	Year Ended March 31, 2016			Year Ended March 31, 2015			Period Ended March 31, 2014a
Per Share Data
Net asset value, beginning of period	$	20.29		$	25.18		$	25.00
Income (loss) from investment operations:
Net investment income (loss)b		(.11	)		(.39	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		.90			(1.01	)		.37
Total from investment operations		.79			(1.40	)		.18
Less distributions from:
Net investment income		(3.03	)		(3.49	)		—
Total distributions		(3.03	)		(3.49	)		—
Net asset value, end of period	$	18.05		$	20.29		$	25.18
Total Returnc		4.82	%		(5.74	%)		0.80	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	212		$	153		$	5,580
Ratios to average net assets:
Net investment income (loss)		(0.55	%)		(1.64	%)		(1.62	%)
Total expensesd		1.56	%		1.74	%		1.64	%
Portfolio turnover rate		21,555	%		655	%		—

a	Since commencement of operations: October 8, 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	Does not include expenses of the underlying funds in which the Fund invests.

60 | THE RYDEX FUNDS ANNUAL REPORT SEE NOTES TO FINANCIAL STATEMENTS.

NOTES TO FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Organization

The Rydex Series Funds (the “Trust”), a Delaware statutory trust, is registered with the SEC under the Investment Company Act of 1940 (”1940 Act”), as an 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 seven separate classes of shares: Investor Class shares, A-Class shares, C-Class shares, H-Class shares, P-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 require a minimum initial investment of $2 million and a minimum account balance of $1 million. At March 31, 2016, the Trust consisted of fifty-three funds.

This report covers the Long Short Equity Fund, Event Driven and Distressed Strategies Fund, Emerging Markets 2x Strategy Fund, Inverse Emerging Markets 2x Strategy Fund and Emerging Markets Bond Strategy Fund (the “Funds”), each a non-diversified investment company. Only A-Class, C-Class, H-Class, P-Class and Institutional Class shares had been issued by the Funds.

The International Equity Funds and Fixed Income Fund 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.

Guggenheim Investments (“GI”) provides advisory services, and Rydex Fund Services, LLC (“RFS”) provides transfer agent, administrative and accounting services to the Trust. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI, RFS and GFD are affiliated entities.

Significant Accounting Policies

The Funds operate as investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

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.

The NAV of each Class of the Funds is calculated by dividing the market value of the Fund’s securities and other assets, less all liabilities, attributable to the Class by the number of outstanding shares of the Class.

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, Inverse Emerging Markets 2x Strategy Fund and Emerging Markets Bond 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 March 31, 2016, afternoon NAV.

A. The Board of Trustees of the Funds (the “Board”) has adopted policies and procedures for the valuation of the Funds’ investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Board has delegated to a valuation committee, consisting of representatives from Guggenheim’s investment management, fund administration, legal and compliance departments (the “Valuation Committee”), the day-to-day responsibility for implementing the Valuation Procedures, including, under most circumstances, the responsibility for determining the fair value of the Funds’ securities or other assets.

THE RYDEX FUNDS ANNUAL REPORT | 61

NOTES TO FINANCIAL STATEMENTS (continued)

Valuations of the Funds’ securities are supplied primarily by pricing services appointed pursuant to the processes set forth in the Valuation Procedures. The Valuation Committee convenes monthly, or more frequently as needed and will review the valuation of all assets which have been fair valued for reasonableness. The Funds’ officers, through the Valuation Committee and consistent with the monitoring and review responsibilities set forth in the Valuation Procedures, regularly review procedures used by, and valuations provided by, the pricing services.

If the pricing service cannot or does not provide a valuation for a particular investment or such valuation is deemed unreliable, such investment is fair valued by the Valuation Committee.

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, which may not necessarily represent the last sale price. If there has been no sale on such exchange or NASDAQ on a given day, the security is valued at the closing bid price on that day.

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 (“CEFs”) are valued at the last quoted sales price.

Repurchase agreements are valued at amortized cost, provided such amounts approximate market value.

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 OTC swap agreements 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. The swap’s value is then adjusted to include dividends accrued, and financing charges and/or interest associated with the swap agreements.

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.

Valuations in accordance with these methods are intended to reflect each security’s (or asset’s) “fair value.” Each such determination is based on a consideration of all relevant factors, which are likely to vary from one pricing context to another. Examples of such factors may include, but are not limited to: (i) the type of security, (ii) the initial cost of the security, (iii) the existence of any contractual restrictions on the security’s disposition, (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies, (v) quotations or evaluated prices from broker-dealers and/or pricing services, (vi) information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), (vii) an analysis of the company’s financial statements, and (viii) an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold (e.g. the existence of pending merger activity, public offerings or tender offers that might affect the value of the security).

In connection with futures contracts and other derivative investments, such factors may include 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.

B. 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 interest expense. In addition, the Fund must pay out the dividend rate of the equity or coupon rate of the obligation to the lender and record this as an expense. Short dividend or interest expense is a cost associated with the

62 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

investment objective of short sales transactions, rather than an operational cost associated with the day-to-day management of any mutual fund. The Fund may also receive rebate income from the broker resulting from the investment of the proceeds from securities sold short.

C. 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.

D. 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.

E. The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Funds to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which could affect the market and/or credit risk of the investments. The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Reported net realized foreign exchange gains and 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 fi scal period end, resulting from changes in exchange rates.

F. 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. Dividend income from REITs is recorded based on the income included in the distributions received from the REIT investments using published REIT classifications, including some management estimates when actual amounts are not available. Distributions received in excess of this estimated amount are recorded as a reduction of the cost of investments or reclassified to capital gains. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after its fiscal year-end, and may differ from the estimated amounts.

G. Distributions of net investment income and net realized gains, if any, are declared and paid at least annually. Dividends are reinvested in additional shares unless shareholders request payment in cash. Distributions are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from U.S. GAAP.

H. 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 and service fees 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.

THE RYDEX FUNDS ANNUAL REPORT | 63

NOTES TO FINANCIAL STATEMENTS (continued)

I. The Funds may leave cash overnight in their cash account with the custodian. 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, which was 0.25% at March 31, 2016.

J. Under the Funds’ organizational documents, their Trustees and Officers are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, 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 and Derivatives

As part of their investment strategy, the Funds utilize short sales and a variety of derivative instruments. 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. Valuation and accounting treatment of these instruments can be found under Significant Accounting Policies in Note 1 of these Notes to Financial Statements.

Short Sales

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.

Derivatives

Derivatives are instruments whose values depend on, or are derived from, in whole or in part, the value of one or more other assets, such as securities, currencies, commodities or indices. Derivative instruments may be used to increase investment flexibility (including to maintain cash reserves while maintaining exposure to certain other assets), for risk management (hedging) purposes, to facilitate trading, to reduce transaction costs and to pursue higher investment returns. Derivative instruments may also be used to mitigate certain investment risks, such as foreign currency exchange rate risk, interest rate risk and credit risk. U.S. GAAP requires disclosures to enable investors to better understand how and why a Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund’s financial position and results of operations. The Funds may utilize derivatives for the following purposes:

Duration: the use of an instrument to manage the interest rate risk of a portfolio.

Index Exposure: the use of an instrument to obtain exposure to a listed or other type of index.

Leverage: gaining total exposure to equities or other assets on the long and short sides at greater than 100% of invested capital.

Liquidity: the ability to buy or sell exposure with little price/market impact.

For those Funds whose investment strategy consistently involves applying leverage, the value of the Fund’s shares will tend to increase or decrease more than the value of any increase or decrease in the underlying index or other asset. In addition, because an investment in derivative instruments generally requires a small investment relative to the amount of investment exposure assumed, an opportunity for increased net income is created; but, at the same time, leverage risk will increase. The Fund’s use of leverage, through borrowings or instruments such as derivatives, may cause the Fund to be more volatile and riskier than if they had not been leveraged.

Futures

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, 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 a Fund because futures are exchange-traded and the exchange’s

64 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

clearinghouse, as counterparty to all exchange-traded futures, guarantees against default. Cash deposits are shown as segregated cash with broker on the Statements of Assets and Liabilities; securities held as collateral are noted on the Schedules of Investments.

The following table represents the Funds’ use and volume of futures on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Long Short Equity Fund	Index exposure, Liquidity	$	333,238	$	—
Event Driven and Distressed Strategies Fund	Index exposure, Liquidity, Duration		5,314,307		—
Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		1,070,280		—
Inverse Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		3,213,111
Emerging Markets Bond Strategy Fund	Index exposure, Leverage, Liquidity, Duration		248,893		—

Swaps

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 Fund utilizing OTC swaps 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 if the underlying asset declines in value. Certain standardized swaps are subject to mandatory central clearing. Central clearing generally reduces counterparty credit risk and increases liquidity, but central clearing does not make swap transactions risk-free. 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.

Total return swaps involve commitments where single or multiple cash flows are exchanged based on the price of an underlying reference asset (such as index or basket) or a fixed or variable interest rate. Index swaps will usually be computed based on the current index value as of the close of regular trading on the NYSE or other exchange, with the swap value being adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreement. A fund utilizing a total return index swap 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 if the underlying index declines in value.

The following table represents the Funds’ use and volume of total return swaps on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Event Driven and Distressed Strategies Fund	Index exposure, Liquidity	$	3,760,932	$	—
Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		21,255,660		—
Inverse Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		62,848,712

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. In accordance with its principal investment strategy, the Funds enter into credit default swaps as a seller of protection primarily to gain exposure similar to the high yield bond market. 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 pay 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. In the event a credit event occurs, an adjustment will be made to any upfront premiums that were received by a reduction of 1.00% per credit event.

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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 following table represents the Funds’ use and volume of credit default swaps on a quarterly basis:

		Average Notional
Fund	Use		Long
Event Driven and Distressed Strategies Fund	Index exposure, Liquidity, Duration		$	5,356,441
Emerging Markets Bond Strategy Fund	Index exposure, Leverage, Liquidity, Duration			313,187

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.

Derivative Investment Holdings Categorized by Risk Exposure

The following is a summary of the location of derivative investments on the Funds’ Statements of Assets and Liabilities as of March 31, 2016:

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 March 31, 2016:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2016
Long Short Equity Fund	$	5,937	$	—	$	—	$	—	$	5,937
Event Driven and Distressed Strategies Fund		29,249		67,900		10,418		65,862		173,429
Emerging Markets 2x Strategy Fund		34,432		370,957		—		—		405,389
Inverse Emerging Markets 2x Strategy Fund		140		—		—		—		140
Emerging Markets Bond Strategy Fund		—		—		3,151		—		3,151

Liability Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2016
Inverse Emerging Markets 2x Strategy Fund	$	—	$	44,047	$	—	$	—	$	44,047
Emerging Markets Bond Strategy Fund		—		—		—		1,508		1,508

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* 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 year ended March 31, 2016:

Derivative Investment Type	Location of Gain (Loss) on Derivatives
Equity/Interest Rate contracts	Net realized gain (loss) on futures contracts
	Net change in unrealized appreciation (depreciation) on futures contracts
Equity/Credit 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 year ended March 31, 2016:

Realized Gain (Loss) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts			Swaps Equity Contracts			Futures Interest Rate Contracts			Swaps Credit Default Contracts			Total
Long Short Equity Fund	$	(14,419	)	$	—		$	—		$	—		$	(14,419	)
Event Driven and Distressed Strategies Fund		(81,701	)		(33,031	)		114,744			(75,216	)		(75,204	)
Emerging Markets 2x Strategy Fund		(178,437	)		(2,020,431	)		—			—			(2,198,868	)
Inverse Emerging Markets 2x Strategy Fund		(1,471,232	)		(3,603,088	)		—			—			(5,074,320	)
Emerging Markets Bond Strategy Fund		—			—			(122,136	)		597,568			475,432

Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts		Swaps Equity Contracts		Futures Interest Rate Contracts			Swaps Credit Default Contracts			Total
Long Short Equity Fund	$	5,937	$	—	$	—		$	—		$	5,937
Event Driven and Distressed Strategies Fund		5,878		69,940		(22,366	)		48,232			101,684
Emerging Markets 2x Strategy Fund		34,443		299,432		—			—			333,875
Inverse Emerging Markets 2x Strategy Fund		107,047		431,759		—			—			538,806
Emerging Markets Bond Strategy Fund		—		—		2,357			(636	)		1,721

In conjunction with the use of short sales and derivative instruments, 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 the Funds.

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.

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NOTES TO FINANCIAL STATEMENTS (continued)

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, 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 their annualized rates below, based on the average daily net assets of the Funds:

Fund	Management Fees (as a % of Net Assets)
Long Short Equity 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%
Emerging Markets Bond Strategy Fund	0.75%

RFS provides transfer agent and administrative services to the Funds for fees calculated at the annualized rate of 0.25% based on the average daily net assets of each Fund.

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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)
Emerging Markets 2x Strategy Fund	0.15%
Inverse Emerging Markets 2x Strategy Fund	0.15%
Emerging Markets Bond Strategy 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 Plan applicable to A-Class shares, H-Class shares and P-Class shares for which GFD 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 GFD at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. GFD, in turn, will pay the Service Provider out of its fees. GFD 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 a shareholder’s financial adviser for providing ongoing services to the shareholder. The annual distribution fee of 0.75% reimburses GFD for paying the shareholder’s financial adviser an ongoing sales commission. GFD advances the first year’s service and distribution fees to the financial adviser. GFD retains the service and distribution fees on accounts with no authorized dealer of record.

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, P-Class, and Institutional Class shares (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividends on securities sold short, and extraordinary expenses) from exceeding 1.90%, 2.65%, 1.90%, and 1.65%, respectively. 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 only with the approval of the Fund’s Board.

For the year ended March 31, 2016, GFD retained sales charges of $349,121 relating to sales of A-Class shares of the Trust.

Certain trustees and officers of the Trust are also officers of GI, RFS and GFD.

4. Fair Value Measurement

In accordance with U.S. GAAP, fair value is defined as the price that the Funds 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. U.S. GAAP establishes a three-tier fair value hierarchy based on the types of inputs used to value assets and liabilities and requires corresponding disclosure. The hierarchy and the corresponding inputs are summarized below:

Level 1 — quoted prices in active markets for identical assets or liabilities.

Level 2 — significant other observable inputs (for example quoted prices for securities that are similar based on characteristics such as interest rates, prepayment speeds, credit risk, etc.).

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NOTES TO FINANCIAL STATEMENTS (continued)

Level 3 — significant unobservable inputs based on the best information available under the circumstances, to the extent observable inputs are not available, which may include assumptions.

The types of inputs available depend on a variety of factors, such as the type of security and the characteristics of the markets in which it trades, if any. Fair valuation determinations that rely on fewer or no observable inputs require greater judgment. Accordingly, fair value determinations for Level 3 securities require the greatest amount of judgment.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The suitability of the techniques and sources employed to determine fair valuation are regularly monitored and subject to change.

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 March 31, 2016, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement		Face Value		Repurchase Price	Collateral		Par Value		Fair Value
Royal Bank of Canada					U.S. TIP Bonds
0.23%					0.13% - 0.38%
Due 04/01/16	$	364,541,761	$	364,544,090	04/15/17 - 07/15/23	$	353,293,600	$	371,832,617
HSBC Group					U.S. Treasury Strips
0.21%					0.00%
Due 04/01/16		182,287,605		182,288,668	05/15/43		392,890,600		185,933,378

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 adviser, 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

During the year ended March 31, 2016, certain Funds lent their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations are net of rebates paid to borrowers and earnings on cash collateral investments shared with the lending agent. As of March 31, 2016, all Funds had ceased participation in securities lending.

7. Offsetting

In the normal course of business, the Funds enter into 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.

In order to better define their contractual rights and to secure rights that will help the Funds mitigate their counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with their derivative contract counterparties. An ISDA Master Agreement is a bilateral

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NOTES TO FINANCIAL STATEMENTS (continued)

agreement between a Fund and a counterparty that governs OTC derivatives, including foreign exchange contracts, and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of a default (close-out netting) or similar event, including the bankruptcy or insolvency of the counterparty.

For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by the Funds and the counterparty. For financial reporting purposes, cash collateral that has been pledged to cover obligations of the Funds and cash collateral received from the counterparty, if any, is reported separately on the Statements of Assets and Liabilities as segregated cash with broker/receivable for variation margin, or payable for swap settlement/variation margin. Generally, the amount of collateral due from or to a counterparty must exceed a minimum transfer amount threshold (e.g., $300,000) before a transfer is required to be made. To the extent amounts due to the Funds from their counterparties are not fully collateralized, contractually or otherwise, the Funds bear the risk of loss from counterparty nonperformance. The Funds attempt to mitigate counterparty risk by only entering into agreements with counterparties that they believe to be of good standing and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Assets and Liabilities.

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
Fund	Instrument	Gross Amounts of Recognized Assets1		Gross Amounts Offset In the Statements of Assets and Liabilities		Net Amount of Assets Presented on the Statements of Assets and Liabilities		Financial Instruments		Cash Collateral Received		Net Amount
Event Driven and Distressed Strategies Fund	Swap equity contracts	$	67,900	$	—	$	67,900	$	—	$	—	$	67,900
Emerging Markets 2x Strategy Fund	Swap equity contracts		370,957		—		370,957		—		—		370,957

								Gross Amounts Not Offset in the Statements of Assets and Liabilities
Fund	Instrument	Gross Amounts of Recognized Liabilities1		Gross Amounts Offset In the Statements of Assets and Liabilities		Net Amount of Liabilities Presented on the Statements of Assets and Liabilities		Financial Instruments		Cash Collateral Pledged		Net Amount
Inverse Emerging Markets 2x Strategy Fund	Swap equity contracts	$	44,047	$	—	$	44,047	$	44,047	$	—	$	—

¹ Centrally cleared swaps and exchange-traded futures are excluded from these reported amounts.

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NOTES TO FINANCIAL STATEMENTS (continued)

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. The Funds’ federal tax returns are subject to examination by the Internal Revenue Service for a period of three years after they are filed.

Tax basis capital losses in excess of capital gains are carried forward to offset future net capital gains. For the year ended March 31, 2016, the following capital loss carryforward amounts were used:

Fund	Amount
Emerging Markets Bond Strategy Fund	$	479,142

The tax character of distributions paid during the year ended March 31, 2016 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Long Short Equity Fund	$	—	$	—	$	—
Event Driven and Distressed Strategies Fund		122,230		—		122,230
Emerging Markets 2x Strategy Fund		53,210		—		53,210
Inverse Emerging Markets 2x Strategy Fund		—		—		—
Emerging Markets Bond Strategy Fund		29,134		—		29,134

The tax character of distributions paid during the year ended March 31, 2015 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Long Short Equity Fund	$	—	$	—	$	—
Event Driven and Distressed Strategies Fund		430,324		10,067		440,391
Emerging Markets 2x Strategy Fund		—		—		—
Inverse Emerging Markets 2x Strategy Fund		—		—		—
Emerging Markets Bond Strategy Fund		191,125		—		191,125

Note: For federal income tax purposes, short-term capital gain distributions are treated as ordinary income distributions.

The tax character of distributable earnings/(accumulated losses) at March 31, 2016 was as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ (Depreciation)			Capital Loss Carryforward & Other Losses
Long Short Equity Fund	$	—	$	—	$	1,759,311		$	(68,031,730	)
Event Driven and Distressed Strategies Fund		265,023		—		(50,150	)		(922,424	)
Emerging Markets 2x Strategy Fund		—		—		949,485			(15,132,163	)
Inverse Emerging Markets 2x Strategy Fund		—		—		(44,047	)		(17,365,143	)
Emerging Markets Bond Strategy Fund		33,500		—		8,615			—

Capital Loss Carryforward amounts may be limited due to Federal income tax regulations.

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For Federal income tax purposes, capital loss carryforwards represent realized losses of the Funds that may be carried forward and applied against future capital gains. For taxable years beginning on or before December 22, 2010, such capital losses may be carried forward for a maximum of eight years. Under the RIC Modernization Act of 2010, the 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 taxable years must be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to 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. As of March 31, 2016, capital loss carryforwards for the Funds were as follows:

	Expires in			Expires in			Unlimited						Total Capital Loss
Fund	2017			2018			Short-Term			Long-Term			Carryforward
Long Short Equity Fund	$	(46,806,630	)	$	(19,377,927	)	$	(1,847,173	)	$	—		$	(68,031,730	)
Event Driven and Distressed Strategies Fund		—			—			(922,424	)		—			(922,424	)
Emerging Markets 2x Strategy Fund		—			—			(13,525,118	)		(1,573,146	)		(15,098,264	)
Inverse Emerging Markets 2x Strategy Fund		—			—			(16,394,258	)		(879,441	)		(17,273,699	)
Emerging Markets Bond Strategy Fund		—			—			—			—			—

Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are typically due to qualified late year losses, losses deferred due to wash sales, utilization of earnings and profits on shareholder redemptions, mark-to-market on futures contracts and the mark-to-market of certain passive foreign investment companies (PFICs) for tax purposes. Additional differences may result from tax treatment of net investment losses and swap investments. To the extent these differences are permanent, reclassifications are made to the appropriate equity accounts in the period that the differences arise. These reclassifications have no effect on the net assets or NAV per share.

On the Statements of Assets and Liabilities the following adjustments were made for permanent book/tax differences:

Fund	Paid In Capital			Undistributed Net Investment Income		Accumulated Net Realized Gain (Loss)
Long Short Equity Fund	$	(640,466	)	$	648,071	$	(7,605	)
Event Driven and Distressed Strategies Fund		2			252,195		(252,197	)
Emerging Markets 2x Strategy Fund		(44,249	)		44,249		—
Inverse Emerging Markets 2x Strategy Fund		(330,107	)		330,107		—
Emerging Markets Bond Strategy Fund		220,966			6,872		(227,838	)

At March 31, 2016, 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:

Fund	Tax Cost		Tax Unrealized Gain		Tax Unrealized Loss			Net Unrealized Gain (Loss)
Long Short Equity Fund	$	49,202,795	$	2,825,650	$	(2,104,788	)	$	720,862
Event Driven and Distressed Strategies Fund		7,608,142		55,179		(239,091	)		(183,912	)
Emerging Markets 2x Strategy Fund		18,083,223		612,137		(33,609	)		578,528
Inverse Emerging Markets 2x Strategy Fund		2,930,552		—		—			—
Emerging Markets Bond Strategy Fund		487,601		8,615		—			8,615

Pursuant to Federal income tax regulations applicable to regulated investment companies, the Funds have elected to treat net capital losses and certain ordinary losses realized between November 1 and March 31 of each year as occurring on the first day of the following tax year. The Funds have also elected to treat certain ordinary losses realized between January 1

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NOTES TO FINANCIAL STATEMENTS (continued)

and March 31 of each year as occurring on the first day of the following tax year. For the year ended March 31, 2016, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2016:

Fund	Ordinary
Emerging Markets 2x Strategy Fund	$	(33,899	)
Inverse Emerging Markets 2x Strategy Fund		(91,444	)

9. Securities Transactions

For the year ended March 31, 2016, the cost of purchases and proceeds from sales of investment securities, excluding government securities, short-term investments and derivatives, were as follows:

Fund	Purchases		Sales
Long Short Equity Fund	$	145,329,850	$	154,358,435
Event Driven and Distressed Strategies Fund		2,119,616		3,363,074
Emerging Markets 2x Strategy Fund		155,583,873		143,171,003
Emerging Markets Bond Strategy Fund		16,106,980		16,178,249

The Funds are permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by a Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each transaction is effected at the current market price to save costs, where permissible. For the year ended March 31, 2016, the Funds engaged in purchases and sales of securities, pursuant to Rule 17a-7 of the 1940 Act, as follows:

Fund	Purchases		Sales		Realized Gain
Emerging Markets 2x Strategy Fund	$	500,599	$	—	$	—

10. Affiliated Transactions

Investments representing 5% or more of the outstanding voting shares of a portfolio company of a fund, or control of or by, or common control under GI, result in that portfolio company being considered an affiliated company of such fund, as defined in the 1940 Act.

The Funds may invest in the Guggenheim Strategy Funds Trust consisting of Guggenheim Strategy Fund I, Guggenheim Strategy Fund II, Guggenheim Strategy Fund III, and Guggenheim Variable Insurance Strategy Fund III (collectively, the “Cash Management Funds”), open-end management investment companies managed by GI. The Cash Management Funds, which launched on March 11, 2014, are offered as cash management options only to mutual funds, trusts, and other accounts managed by GI and/or its affiliates, and are not available to the public. The Cash Management Funds pay no investment management fees. The Cash Management Funds’ annual report on Form N-CSR dated September 30, 2015 is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at http://www.sec.gov/Archives/edgar/data/1601445/000089180415000857/gug63224-ncsr.htm.

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NOTES TO FINANCIAL STATEMENTS (continued)

Transactions during the year ended March 31, 2016, in which the portfolio company is an “affiliated person”, were as follows:

Affiliated issuers by Fund	Value 03/31/15		Additions		Reductions			Value 03/31/16		Shares 03/31/16		Investment Income		Realized Gain (Loss)
Long Short Equity Fund
Guggenheim Strategy Fund I	$	—	$	3,064,684	$	(1,000,000	)	$	2,054,852		82,824	$	30,316	$	(4,074	)
Guggenheim Strategy Fund II		—		14,213		—			14,088		571		232		—
	$	—	$	3,078,897	$	(1,000,000	)	$	2,068,940			$	30,548	$	(4,074	)
Event Driven and Distressed Strategies Fund
Guggenheim Strategy Fund I	$	—	$	2,139,707	$	(100,000	)	$	2,031,647		81,888	$	20,822	$	(57	)
Guggenheim Strategy Fund II		—		2,159,039		(100,000	)		2,039,748		82,614		32,297		(385	)
	$	—	$	4,298,746	$	(200,000	)	$	4,071,395			$	53,119	$	(442	)

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 12, 2016. 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 1.31% for the year ended March 31, 2016. The Funds did not have any borrowings outstanding under this agreement at March 31, 2016.

The average daily balances borrowed for the year ended March 31, 2016, were as follows:

Fund	Average Daily Balance
Long Short Equity Fund	$	525
Event Driven and Distressed Strategies Fund		390
Emerging Markets 2x Strategy Fund		5,201

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 “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”).

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NOTES TO FINANCIAL STATEMENTS (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 May 23, 2014, the defendants filed motions to dismiss the FitzSimons action, including a global motion to dismiss Count I, which is the claim brought against former Tribune shareholders for intentional fraudulent conveyance under U.S. federal law. The Court has not yet issued a decision on any of these motions.

On March 29, 2016, the U.S. Court of Appeals for the Second Circuit issued its opinion on the appeal of the SLCFC actions. The appeals court affirmed the district court’s dismissal of those lawsuits, but on different grounds than the district court. The appeals court held that while the plaintiffs have standing under the U.S. Bankruptcy Code (which was the basis for the district court’s dismissal), their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments.

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.) (the “Creditor Trust action”).

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.

On April 7, 2014, the plaintiff filed a Third Amended Complaint. In the related action entitled Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adversary Proceeding No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust action”), the plaintiff also filed a Second Amended Complaint that alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On May 8, 2014, the plaintiff in the Litigation Trust action filed a motion to certify a defendant class generally comprised of all former Lyondell shareholders that received proceeds in exchange for their shares in the 2007 merger transaction.

On July 30, 2014, the defendants filed a motion to dismiss all three lawsuits. The Court held an oral argument on the motions to dismiss and on the motion for class certification on January 14 and January 15, 2015. On September 15, 2015, the Bankruptcy Court denied the motion for class certification without prejudice to the plaintiff’s right to file a renewed motion. On November 18, 2015, the Bankruptcy Court granted the defendants’ motion to dismiss the Litigation Trust action and denied their motion to dismiss the Creditor Trust and Reichman actions. The Litigation Trust action is now over, but the plaintiff has appealed the dismissal to the U.S. District Court for the Southern District of New York. On May 4, 2016, the defendants filed a motion to dismiss, or in the alternative, for a stay of, the Creditor Trust and Reichman actions in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. The Bankruptcy Court has not yet issued a decision on the motion. Discovery has commenced, and will continue, in the Creditor Trust and Reichman actions while the May 4 motion is pending.

These lawsuits do 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; Long Short Equity Fund f/k/a 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.

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NOTES TO FINANCIAL STATEMENTS (concluded)

13. H-Class Shares Redesignated as P-Class Shares

Effective following the close of business on April 30, 2015, (the “Redesignation Date”), all outstanding H-Class shares of the Event Driven and Distressed Strategies Fund and Long Short Equity Fund (collectively, the “Funds”) were redesignated as P-Class shares, and the Funds will no longer offer H-Class shares.

P-Class shares of the Funds are offered primarily through broker/dealers and other financial intermediaries with which GFD has an agreement for the use of P-Class shares of the Funds in investment products, programs or accounts. P-Class shares do not have a minimum initial investment amount, subsequent investment amount or a minimum account balance. The Funds reserve the right to modify their minimum investment amount and account balance requirements at any time, with or without prior notice to you.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders
of Rydex Series Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Long Short Equity Fund, Event Driven and Distressed Strategies Fund, Emerging Markets 2x Strategy Fund, Inverse Emerging Markets 2x Strategy Fund and Emerging Markets Bond Strategy Fund (five of the series constituting the Rydex Series Funds) (the “Funds”) as of March 31, 2016, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2016, by correspondence with the custodian, transfer agent and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the above listed Funds (five of the series constituting the Rydex Series Funds) at March 31, 2016, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the years or periods indicated therein, in conformity with U.S. generally accepted accounting principles.

McLean, Virginia
May 25, 2016

78 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)

Tax Information

This information is being provided as required by the Internal Revenue Code. Amounts shown may differ from those elsewhere in the report because of differences in tax and financial reporting practice.

Of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2016, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	Ordinary
Event Driven and Distressed Strategies Fund	7.88%

Additionally, the following amounts of taxable ordinary income dividends paid during the fiscal year qualified for the lower income tax rate available to individuals under the Jobs and Growth Tax Relief Reconciliation Act of 2003:

Fund	Ordinary
Event Driven and Distressed Strategies Fund	3.88%
Emerging Markets 2x Strategy Fund	100.00%

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 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 800.820.0888. This information is also available from the EDGAR database on the SEC’s website at http://www.sec.gov.

Sector Classification

Information in the “Schedule of Investments” is categorized by sectors using sector-level Classifications defined by the Bloomberg Industry Classification System, a widely recognized industry classification system provider. Each Fund’s registration statement has investment policies relating to concentration in specific sectors/industries. For purposes of these investment policies, the Funds usually classify sectors/industries based on industry-level Classifications used by widely recognized industry classification system providers such as Bloomberg Industry Classification System, Global Industry Classification Standards and Barclays Global Classification Scheme.

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 800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 800.820.0888.

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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 visiting guggenheiminvestments.com or by calling 800.820.0888.

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INTERESTED TRUSTEE
Donald C. Cacciapaglia** (1951)	Trustee from 2012 to present.	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group, Inc. (2002-2010).	237	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Corey A. Colehour (1945)	Trustee from 1993 to present; Member of the Audit Committee from 1994 to present; Member of the Governance Committee from 2014 to present; and Member of the Investment and Performance Committee from 2014 to present.	Retired.	133	None.
J. Kenneth Dalton (1941)	Trustee from 1995 to present; Chairman and Member of the Audit Committee from 1997 to present; and Member of the Compliance and Risk Oversight Committee from 2010 to present.	Retired.	133	Epiphany Funds (4) (2009-present).
John O. Demaret (1940)	Vice Chairman of the Board from 2014 to present (Chairman of the Board from 2006 to 2014); Trustee and Member of the Audit Committee from 1997 to present; Chairman (since 2014) and Member of the Compliance and Risk Oversight Committee from 2010 to present; Chairman and Member of the Investment and Performance Committee from 2014 to present; and Member of the Nominating Committee from 2014 to present.	Retired.	133	None.

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INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(continued)

Name, Address* and Year of Birth of Trustee	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee***	Other Directorships Held by Trustee
INDEPENDENT TRUSTEES - concluded
Werner E. Keller (1940)	Chairman of the Board from 2014 to present (Vice Chairman of the Board from 2010 to 2014); Trustee and Member of the Audit Committee from 2005 to present; and Member of the Investment and Performance Committee from 2014 to present.	Current: Founder and President, Keller Partners, LLC (investment research firm) (2005-present).	133	None.
Thomas F. Lydon, Jr. (1960)	Trustee and Member of the Audit Committee from 2005 to present; Member of the Nominating Committee from 2005 to present; and Member of the Governance Committee from 2007 to present.	Current: President, Global Trends Investments (registered investment adviser) (1996-present).	133	US Global Investors (GROW) (1995-present).
Patrick T. McCarville (1942)	Trustee from 1997 to present; Member of the Audit Committee from 1997 to present; Chairman and Member of the Nominating Committee from 2004 to present; Chairman and Member of the Governance Committee from 2007 to present; and Member of the Compliance and Risk Oversight Committee from 2014 to present.	Retired. Former: Chief Executive Officer, Par Industries, Inc., d/b/a Par Leasing (1977-2010).	133	None.

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS
Donald C. Cacciapaglia (1951)	President (2012-present).	Current: President and CEO, certain other funds in the Fund Complex (2012-present); Vice Chairman, Guggenheim Investments (2010-present). Former: Chairman and CEO, Channel Capital Group Inc. (2002-2010).
Michael P. Byrum (1970)	Vice President (1999-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); President and Chief Investment Officer, Rydex Holdings, LLC (2008-present); Director and Chairman, Advisory Research Center, Inc. (2006-present); Manager, Guggenheim Specialized Products, LLC (2005-present). Former: Vice President, Guggenheim Distributors, LLC (2009); Director (2009-2010) and Secretary (2002-2010), Rydex Fund Services, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors, LLC; Director (2008-2010), Chief Investment Officer (2006-2010), President (2004-2010) and Secretary (2002-2010), Rydex Advisors II, LLC.

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INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (Unaudited)(concluded)

Name, Address* and Year of Birth	Position(s) Held with the Trust, Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years
OFFICERS - concluded
Nikolaos Bonos (1963)	Vice President and Treasurer (2003-present).	Current: Senior Vice President, Security Investors, LLC (2010-present); Chief Executive Officer, Guggenheim Specialized Products, LLC (2009-present); Chief Executive Officer & President, Rydex Fund Services, LLC (2009-present); Vice President, Rydex Holdings, LLC (2008-present). Former: Senior Vice President, Security Global Investors, LLC (2010-2011); and Senior Vice President, Rydex Advisors, LLC and Rydex Advisors II, LLC (2006-2011).
Elisabeth Miller (1968)	Chief Compliance Officer (2012-present).	Current: CCO, certain other funds in the Fund Complex (2012-present); CCO, Security Investors, LLC (2012-present); CCO, Guggenheim Funds Investment Advisors, LLC (2012-present); Managing Director, Guggenheim Investments (2012-present); Vice President, Guggenheim Funds Distributors, LLC (March 2014-present). Former: CCO, Guggenheim Distributors, LLC (2009-March 2014); Senior Manager, Security Investors, LLC (2004-2009); Senior Manager, Guggenheim Distributors, LLC (2004-2009).
Joseph M. Arruda (1966)	Assistant Treasurer (2006-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2006-present); Vice President, Security Investors, LLC (2010-present); CFO and Manager, Guggenheim Specialized Products, LLC (2009-present). Former: Vice President, Security Global Investors, LLC (2010-2011); Vice President, Rydex Advisors, LLC (2010); Vice President, Rydex Advisors II, LLC (2010).
Paul J. Davio (1972)	Assistant Treasurer (2014-present).	Current: Assistant Treasurer, certain other funds in the Fund Complex (2014-present); Director, Guggenheim Investments (2006-present). Former: Manager, Mutual Fund Administration, Guggenheim Investments (2003-2006).
Amy J. Lee (1961)	Vice President (2009-present) and Secretary (2012-present).	Current: Chief Legal Officer, certain other funds in the Fund Complex (2013-present); Senior Managing Director, Guggenheim Investments (2012-present). Former: Vice President, Associate General Counsel and Assistant Secretary, Security Benefit Life Insurance Company and Security Benefit Corporation (2004-2012).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 805 King Farm Boulevard, Suite 600, Rockville, MD 20850.
**	Mr. Cacciapaglia is an “interested” person of the Trust, as that term is defined in the 1940 Act by virtue of his affiliation with the Adviser’s parent company.
***	The “Fund Complex” includes all closed-end and open-end funds (including all of their portfolios) advised by the Adviser and any funds that have an investment adviser or servicing agent that is an affiliated person of the Adviser. Information provided is as of the date of this report.

82 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Rydex Funds, Guggenheim Funds, Rydex Investments, Guggenheim Funds Distributors, LLC, Security Investors, LLC, Security Distributors, Inc., Guggenheim Partners Investment Managers, LLC, 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.

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GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(concluded)

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.

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.

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Item 2. Code of Ethics.

The registrant’s Board of Trustees has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. No substantive amendments were approved or waivers were granted to the Code during the period covered by this report.  The Code is filed as an exhibit to this Form N-CSR.

Item 3. Audit Committee Financial Expert.

The registrant's Board of Trustees has determined that Werner Keller, an "independent" Trustee serving on the registrant's audit committee, is an "audit committee financial expert," as defined in Item 3 of Form N-CSR. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.

Item 4. Principal Accountant Fees and Services.

(a)Audit Fees: The aggregate Audit Fees billed by the registrant’s principal accountant, for the audit of the annual financial statements in connection with statutory and regulatory filings for the fiscal years ended March 31, 2016 and March 31, 2015 were $798,622 and $744,325, respectively.

(b)Audit Related Fees: The aggregate Audit Related Fees by the registrant’s principal accountant billed for the fiscal years ended March 31, 2016 and March 31, 2015 were $0 and $0, respectively.

The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor to the registrant’s investment adviser (not including any sub‑investment adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant (“Service Affiliates”) which required pre‑approval by the Audit Committee which related to the review of the transfer agent function for the fiscal years ended March 31, 2016 and March 31, 2015 were $38,585 and $36,750, respectively.

(c)Tax Fees: The aggregate Tax Fees billed by the registrant’s principal accountant for professional services rendered for tax compliance, tax advice, and tax planning, including preparation of tax returns and distribution assistance, for the fiscal years ended March 31, 2016 and March 31, 2015 were $387,911 and $334,575, respectively.

(d)All Other Fees: The aggregate All Other Fees billed by the registrant’s principal accountant for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item, for the fiscal years ended March 31, 2016 and March 31, 2015 were $0 and $0, respectively.

(e)The audit committee has adopted a policy whereby audit and non-audit services performed by the registrant’s principal accountant for the registrant, its investment advisor, and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings.  If such service is required between regularly scheduled audit committee meetings, the chairman of the audit committee, J. Kenneth Dalton, is authorized to pre-approve the service with full committee approval at the next scheduled meeting.  There shall be no waivers of the pre-approval process.  No services described in (b)-(d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f)Not applicable.

(g)The aggregate non-audit fees billed by the registrant’s accountant for the most recent fiscal year and the preceding fiscal year for services rendered to the registrant, the investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant were $426,496 and $371,325, respectively.  These aggregate fees were less than the aggregate fees billed for the same periods by the registrant’s principal accountant for audit services rendered to the registrant, the investment advisor, and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant.

(h)All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee.  As such, the audit committee has considered these services in maintaining the principal accountant’s independence.

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)(1)The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is attached.

(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 and Chief Executive Officer
Date	June 9, 2016
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 and Chief Executive Officer
Date	June 9, 2016
By (Signature and Title)*	/s/ Nikolaos Bonos
	Nikolaos Bonos, Vice
	President and Treasurer
Date	June 9, 2016

^* Print the name and title of each signing officer under his or her signature.