Rydex Energy Fund (RYEIX) 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, 2017

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:

3.31.2017

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

GuggenheimInvestments.com RSECF-ANN-2-0317x0318

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	3
ABOUT SHAREHOLDERS’ FUND EXPENSES	5
BANKING FUND	10
BASIC MATERIALS FUND	18
BIOTECHNOLOGY FUND	26
CONSUMER PRODUCTS FUND	34
ELECTRONICS FUND	43
ENERGY FUND	51
ENERGY SERVICES FUND	60
FINANCIAL SERVICES FUND	68
HEALTH CARE FUND	79
INTERNET FUND	88
LEISURE FUND	96
PRECIOUS METALS FUND	106
REAL ESTATE FUND	114
RETAILING FUND	123
TECHNOLOGY FUND	131
TELECOMMUNICATIONS FUND	140
TRANSPORTATION FUND	148
UTILITIES FUND	156
NOTES TO FINANCIAL STATEMENTS	165
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	178
OTHER INFORMATION	179
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	181
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	185

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2017

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, 2017.

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 and Chief Executive Officer April 30, 2017

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, 2017

The market optimism that helped lift risk asset prices after the presidential election in November continued through the early part of 2017. The Standard & Poor’s 500^® (“S&P 500”) Index* set a new record, high yield corporate bond spreads approached cycle lows, and the 10-year Treasury yield rose to 2.63%, the highest level since 2014. Risk appetite faded as the first quarter drew to a close, however, as investors grappled with the implications of an unsuccessful healthcare reform bill and growing geopolitical risks.

Much of the rise in asset valuations since Donald Trump’s victory has been based on anticipation of his pro-growth policies coming to fruition, an outcome that is far from certain. Asset valuations could be getting a bit ahead of themselves, and becoming more sensitive to a temporary growth scare or setback, especially since the rollout of Trump’s new policies will not be smooth or easy.

Nevertheless, the underlying economy remains on a good trajectory. Tracking estimates for first-quarter real U.S. Gross Domestic Product (“GDP”) growth have fallen in recent weeks despite strong gains in consumer and business sentiment since the election. In late April, after the period ended, the initial estimate of first-quarter GDP growth was 0.70%. However, we attribute a large portion of the apparent weakness to seasonal factors that have depressed as-reported first quarter GDP growth over the past several years. In keeping with this pattern, we would expect the final first-quarter GDP number to be revised higher. More importantly, the prospects for quarterly GDP growth appear stronger going forward.

Consumer spending should benefit from solid income and wealth gains, with household net worth sitting at an all-time high. Recent job gains have been strong, and we anticipate a further acceleration of wage growth as the labor market continues to tighten. Buoyant consumer sentiment and low household debt service outlays also support our positive outlook. On the business investment side, we expect various factors to be supportive, including the uptick in global industrial production growth, the ongoing rise in U.S. oil drilling activity, the surge in small-business optimism, and the recovery in corporate earnings.

On March 15, the Federal Open Market Committee (“FOMC”) raised the U.S. Federal Reserve (the “Fed”) funds target rate by 25 basis points to a range of 0.75%–1.0%. The hike itself had little impact on markets because several FOMC members had indicated in the weeks leading up to the meeting that a hike was likely. Looking ahead, we believe that the market is underpricing the likely pace of Fed rate hikes in 2017 and 2018, particularly now that market optimism about fiscal stimulus is waning.

Importantly, Chair Yellen noted that the FOMC’s baseline forecast of two additional rate increases in 2017 and three more in 2018 was not conditioned on expectations for fiscal stimulus. Rather, it reflected a need to gradually remove accommodation due to the fact that the Fed has essentially achieved its dual mandate objectives for employment and inflation. Fiscal easing, she explained, could result in a faster pace of tightening, if it materializes. Markets are skeptical and are pricing in only 1.5 more rate hikes in 2017 and another 1.5 rate hikes in 2018, according to Fed funds futures contracts. We expect that the Fed will deliver three more rate hikes in 2017 and another four in 2018.

We expect to see equity and credit investors take more chips off the table unless there is concrete progress on fiscal legislation in Washington, particularly as the Fed demonstrates its desire to tighten even without fiscal stimulus. While we are optimistic about the near-term U.S. economic outlook, current valuations and growing political risks warrant a more defensive stance.

For the 12 months ended March 31, 2017, the S&P 500 Index returned 17.17%. The MSCI Europe-Australasia-Far East (“EAFE”) Index* returned 11.67%. The return of the MSCI Emerging Markets Index* was 17.22%.

In the bond market, the Bloomberg Barclays U.S. Aggregate Bond Index* posted a 0.44% return for the period, while the Bloomberg Barclays U.S. Corporate High Yield Index* returned 16.39%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.35% 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.

Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, mortgage-backed securities or “MBS” (agency fixed-rate and hybrid adjustable-rate mortgage, or “ARM”, pass-throughs), asset-backed securities (“ABS”), and commercial mortgage-backed securities (“CMBS”) (agency and non-agency).

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2017

Bloomberg Barclays U.S. Corporate High Yield Index measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. 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.

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.

4 | 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, 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, 2016 and ending March 31, 2017.

The following tables illustrate the Funds’ 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 fifth 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 the Funds’ expenses, including annual expense ratios for periods up to 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 | 5

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 1. Based on actual Fund return3
Banking Fund
Investor Class	1.39%	24.54%	$ 1,000.00	$ 1,245.40	$ 7.78
A-Class	1.63%	24.38%	1,000.00	1,243.80	9.12
C-Class	2.38%	23.92%	1,000.00	1,239.20	13.29
H-Class	1.64%	24.41%	1,000.00	1,244.10	9.18
Basic Materials Fund
Investor Class	1.38%	9.74%	1,000.00	1,097.40	7.22
A-Class	1.63%	9.58%	1,000.00	1,095.80	8.52
C-Class	2.38%	9.18%	1,000.00	1,091.80	12.41
H-Class	1.64%	9.58%	1,000.00	1,095.80	8.57
Biotechnology Fund
Investor Class	1.38%	2.06%	1,000.00	1,020.60	6.95
A-Class	1.63%	1.94%	1,000.00	1,019.40	8.21
C-Class	2.38%	1.57%	1,000.00	1,015.70	11.96
H-Class	1.63%	1.95%	1,000.00	1,019.50	8.21
Consumer Products Fund
Investor Class	1.37%	3.33%	1,000.00	1,033.30	6.94
A-Class	1.62%	3.19%	1,000.00	1,031.90	8.21
C-Class	2.37%	2.80%	1,000.00	1,028.00	11.98
H-Class	1.62%	3.19%	1,000.00	1,031.90	8.21
Electronics Fund
Investor Class	1.38%	15.05%	1,000.00	1,150.50	7.40
A-Class	1.63%	14.90%	1,000.00	1,149.00	8.73
C-Class	2.38%	14.49%	1,000.00	1,144.90	12.73
H-Class	1.64%	14.91%	1,000.00	1,149.10	8.79
Energy Fund
Investor Class	1.38%	(0.29%)	1,000.00	997.10	6.87
A-Class	1.63%	(0.42%)	1,000.00	995.80	8.11
C-Class	2.38%	(0.82%)	1,000.00	991.80	11.82
H-Class	1.63%	(0.46%)	1,000.00	995.40	8.11
Energy Services Fund
Investor Class	1.39%	5.98%	1,000.00	1,059.80	7.14
A-Class	1.64%	5.93%	1,000.00	1,059.30	8.42
C-Class	2.38%	5.50%	1,000.00	1,055.00	12.19
H-Class	1.64%	5.89%	1,000.00	1,058.90	8.42
Financial Services Fund
Investor Class	1.38%	13.51%	1,000.00	1,135.10	7.35
A-Class	1.63%	13.36%	1,000.00	1,133.60	8.67
C-Class	2.38%	12.94%	1,000.00	1,129.40	12.64
H-Class	1.64%	13.37%	1,000.00	1,133.70	8.72
Health Care Fund
Investor Class	1.38%	2.44%	1,000.00	1,024.40	6.97
A-Class	1.63%	2.29%	1,000.00	1,022.90	8.22
C-Class	2.38%	1.93%	1,000.00	1,019.30	11.98
H-Class	1.63%	2.29%	1,000.00	1,022.90	8.22

6 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Internet Fund
Investor Class	1.38%	6.48%	$ 1,000.00	$ 1,064.80	$ 7.10
A-Class	1.63%	6.34%	1,000.00	1,063.40	8.39
C-Class	2.38%	5.95%	1,000.00	1,059.50	12.22
H-Class	1.63%	6.36%	1,000.00	1,063.60	8.39
Leisure Fund
Investor Class	1.39%	14.23%	1,000.00	1,142.30	7.42
A-Class	1.63%	14.08%	1,000.00	1,140.80	8.70
C-Class	2.38%	13.66%	1,000.00	1,136.60	12.68
H-Class	1.64%	14.09%	1,000.00	1,140.90	8.75
Precious Metals Fund
Investor Class	1.28%	(13.09%)	1,000.00	869.10	5.96
A-Class	1.53%	(13.21%)	1,000.00	867.90	7.13
C-Class	2.28%	(13.53%)	1,000.00	864.70	10.60
H-Class	1.53%	(13.21%)	1,000.00	867.90	7.13
Real Estate Fund
A-Class	1.63%	0.64%	1,000.00	1,006.40	8.15
C-Class	2.38%	0.24%	1,000.00	1,002.40	11.88
H-Class	1.63%	0.64%	1,000.00	1,006.40	8.15
Retailing Fund
Investor Class	1.38%	1.55%	1,000.00	1,015.50	6.93
A-Class	1.63%	1.44%	1,000.00	1,014.40	8.19
C-Class	2.38%	1.02%	1,000.00	1,010.20	11.93
H-Class	1.63%	1.47%	1,000.00	1,014.70	8.19
Technology Fund
Investor Class	1.38%	10.62%	1,000.00	1,106.20	7.25
A-Class	1.63%	10.50%	1,000.00	1,105.00	8.55
C-Class	2.38%	10.08%	1,000.00	1,100.80	12.47
H-Class	1.63%	10.51%	1,000.00	1,105.10	8.55
Telecommunications Fund
Investor Class	1.39%	4.01%	1,000.00	1,040.10	7.07
A-Class	1.64%	3.88%	1,000.00	1,038.80	8.34
C-Class	2.39%	3.48%	1,000.00	1,034.80	12.12
H-Class	1.64%	3.91%	1,000.00	1,039.10	8.34
Transportation Fund
Investor Class	1.39%	13.66%	1,000.00	1,136.60	7.40
A-Class	1.64%	13.51%	1,000.00	1,135.10	8.73
C-Class	2.39%	13.08%	1,000.00	1,130.80	12.70
H-Class	1.64%	13.54%	1,000.00	1,135.40	8.73
Utilities Fund
Investor Class	1.37%	6.19%	1,000.00	1,061.90	7.04
A-Class	1.62%	6.06%	1,000.00	1,060.60	8.32
C-Class	2.36%	5.69%	1,000.00	1,056.90	12.10
H-Class	1.62%	6.08%	1,000.00	1,060.80	8.32

THE RYDEX FUNDS ANNUAL REPORT | 7

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
Banking Fund
Investor Class	1.39%	5.00%	$ 1,000.00	$ 1,018.00	$ 6.99
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Basic Materials Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Biotechnology Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
Consumer Products Fund
Investor Class	1.37%	5.00%	1,000.00	1,018.10	6.89
A-Class	1.62%	5.00%	1,000.00	1,016.85	8.15
C-Class	2.37%	5.00%	1,000.00	1,013.11	11.90
H-Class	1.62%	5.00%	1,000.00	1,016.85	8.15
Electronics Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Energy Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
Energy Services Fund
Investor Class	1.39%	5.00%	1,000.00	1,018.00	6.99
A-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Financial Services Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Health Care Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Internet Fund
Investor Class	1.38%	5.00%	$ 1,000.00	$ 1,018.05	$ 6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
Leisure Fund
Investor Class	1.39%	5.00%	1,000.00	1,018.00	6.99
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Precious Metals Fund
Investor Class	1.28%	5.00%	1,000.00	1,018.55	6.44
A-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
Real Estate Fund
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
Retailing Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
Technology Fund
Investor Class	1.38%	5.00%	1,000.00	1,018.05	6.94
A-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
C-Class	2.38%	5.00%	1,000.00	1,013.06	11.94
H-Class	1.63%	5.00%	1,000.00	1,016.80	8.20
Telecommunications Fund
Investor Class	1.39%	5.00%	1,000.00	1,018.00	6.99
A-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
C-Class	2.39%	5.00%	1,000.00	1,013.01	11.99
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Transportation Fund
Investor Class	1.39%	5.00%	1,000.00	1,018.00	6.99
A-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
C-Class	2.39%	5.00%	1,000.00	1,013.01	11.99
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Utilities Fund
Investor Class	1.37%	5.00%	1,000.00	1,018.10	6.89
A-Class	1.62%	5.00%	1,000.00	1,016.85	8.15
C-Class	2.36%	5.00%	1,000.00	1,013.16	11.85
H-Class	1.62%	5.00%	1,000.00	1,016.85	8.15

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 182/365 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2016 to March 31, 2017.

THE RYDEX FUNDS ANNUAL REPORT | 9

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Banking Fund Investor Class returned 37.53%, compared with the S&P 500 Financials Index, which returned 32.61%. The broader S&P 500 Index returned 17.17%.

The industry that contributed the most to the performance was banks, the Fund’s largest allocation, followed by capital markets. The thrifts & mortgage finance industry was the only detractor from return. The real estate management & development industry contributed the least to return.

Among the best-performing holdings in the Fund for the period were Bank of America Corp., JPMorgan Chase & Co., and Citigroup, Inc. The worst-performing holdings for the period were Grupo Financiero Santander Mexico SAB de CV ADR — Class B, International Bancshares Corp., and New York Community Bancorp, 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)
Citigroup, Inc.	4.3%
JPMorgan Chase & Co.	4.2%
Wells Fargo & Co.	4.1%
Bank of America Corp.	4.1%
U.S. Bancorp	3.0%
PNC Financial Services Group, Inc.	2.5%
Bank of New York Mellon Corp.	2.3%
Capital One Financial Corp.	2.1%
BB&T Corp.	2.0%
State Street Corp.	1.8%
Top Ten Total	30.4%

“Ten Largest Holdings” excludes any temporary cash investments.

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	37.53%	11.09%	-2.37%
A-Class Shares	37.21%	10.83%	-2.63%
A-Class Shares with sales charge†	30.70%	9.75%	-3.10%
C-Class Shares	36.18%	9.99%	-3.31%
C-Class Shares with CDSC‡	35.18%	9.99%	-3.31%
H-Class Shares**	37.26%	10.69%	-2.79%
S&P 500 Financials Index	32.61%	15.38%	0.18%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 | 11

SCHEDULE OF INVESTMENTS	March 31, 2017
BANKING FUND

	Shares		Value
COMMON STOCKS† - 98.4%
Banks - 92.9%
Citigroup, Inc.		43,900	$	2,626,098
JPMorgan Chase & Co.		29,228		2,567,388
Wells Fargo & Co.		45,190		2,515,276
Bank of America Corp.		106,268		2,506,862
U.S. Bancorp		36,241		1,866,412
PNC Financial Services Group, Inc.		13,012		1,564,563
Bank of New York Mellon Corp.		30,094		1,421,340
Capital One Financial Corp.		15,028		1,302,326
BB&T Corp.		26,892		1,202,071
State Street Corp.		14,020		1,116,132
SunTrust Banks, Inc.		18,900		1,045,170
M&T Bank Corp.		6,385		987,951
Northern Trust Corp.		10,545		912,986
KeyCorp		49,691		883,506
Fifth Third Bancorp		34,451		875,055
Regions Financial Corp.		58,296		847,040
Citizens Financial Group, Inc.		24,457		844,989
First Republic Bank		8,449		792,600
Huntington Bancshares, Inc.		57,832		774,370
Comerica, Inc.		10,332		708,569
HDFC Bank Ltd. ADR		8,997		676,754
Banco Bradesco S.A. ADR		65,317		668,846
HSBC Holdings plc ADR		16,281		664,590
Toronto-Dominion Bank		12,998		651,070
Royal Bank of Canada		8,920		650,357
ICICI Bank Ltd. ADR		75,100		645,860
SVB Financial Group*		3,462		644,243
Credicorp Ltd.		3,830		625,439
Bank of Nova Scotia		10,550		617,914
Popular, Inc.		15,072		613,883
Deutsche Bank AG*,1		34,920		599,227
Credit Suisse Group AG ADR		40,326		598,438
Zions Bancorporation		14,145		594,090
Canadian Imperial Bank of Commerce1		6,885		593,556
Signature Bank*		3,900		578,721
East West Bancorp, Inc.		10,744		554,498
PacWest Bancorp		9,663		514,651
Bank of the Ozarks, Inc.		9,867		513,183
Commerce Bancshares, Inc.		8,703		488,761
Cullen/Frost Bankers, Inc.1		5,463		486,044
Synovus Financial Corp.		11,327		464,634
BOK Financial Corp.		5,913		462,811
Western Alliance Bancorporation*		9,420		462,428
PrivateBancorp, Inc. — Class A		7,758		460,592
Prosperity Bancshares, Inc.		6,392		445,586
FNB Corp.		29,581		439,869
Webster Financial Corp.		8,619		431,295
First Horizon National Corp.		22,981		425,149
First Citizens BancShares, Inc. — Class A		1,264		423,908
Texas Capital Bancshares, Inc.*		5,025		419,336
IBERIABANK Corp.		5,246		414,959
BankUnited, Inc.		10,990		410,037
UMB Financial Corp.		5,328		401,252
Home BancShares, Inc.		14,790		400,365
Umpqua Holdings Corp.		22,520		399,505
Hancock Holding Co.		8,734		397,834
Associated Banc-Corp.		16,033		391,205
Wintrust Financial Corp.		5,643		390,044
MB Financial, Inc.		9,067		388,249
Chemical Financial Corp.		7,588		388,127
Bank of Hawaii Corp.		4,649		382,892
Pinnacle Financial Partners, Inc.		5,686		377,834
United Bankshares, Inc.1		8,924		377,039
Valley National Bancorp		30,048		354,566
Fulton Financial Corp.		19,822		353,823
Cathay General Bancorp		9,366		352,911
TCF Financial Corp.		20,356		346,459
BancorpSouth, Inc.		11,307		342,037
South State Corp.		3,770		336,850
Glacier Bancorp, Inc.		9,707		329,359
First Financial Bankshares, Inc.		8,196		328,660
Great Western Bancorp, Inc.		7,569		321,001
Hope Bancorp, Inc.		16,676		319,679
Old National Bancorp		18,041		313,011
First Midwest Bancorp, Inc.		13,208		312,765
CVB Financial Corp.		14,093		311,314
Columbia Banking System, Inc.		7,960		310,360
International Bancshares Corp.		8,725		308,865
Trustmark Corp.		9,575		304,389
FCB Financial Holdings, Inc. — Class A*		6,100		302,255
BNC Bancorp		8,400		294,420
United Community Banks, Inc.		10,506		290,911
LegacyTexas Financial Group, Inc.		7,006		279,539
Independent Bank Corp.		4,300		279,500
Banner Corp.		5,000		278,200
ServisFirst Bancshares, Inc.		7,600		276,488
Simmons First National Corp. — Class A		4,900		270,235
Ameris Bancorp		5,800		267,380
Westamerica Bancorporation		4,450		248,444
Boston Private Financial Holdings, Inc.		14,517		238,079
Total Banks				57,167,279
Savings & Loans - 3.3%
New York Community Bancorp, Inc.		37,966		530,385
People’s United Financial, Inc.		26,582		483,792
Investors Bancorp, Inc.		30,165		433,773
Sterling Bancorp		15,260		361,662
Banc of California, Inc.1		10,067		208,387
Total Savings & Loans				2,017,999
Diversified Financial Services - 1.3%
CIT Group, Inc.		18,349		787,723
Insurance - 0.9%
Voya Financial, Inc.		14,144		536,906
Total Common Stocks
(Cost $48,145,096)				60,509,907

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
BANKING FUND

	Shares		Value
PREFERRED STOCKS† - 1.1%
Banks - 1.1%
Itau Unibanco Holding S.A. ADR		57,403	$	692,854
Total Preferred Stocks
(Cost $522,134)				692,854
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.5%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	320,743		320,743
Total Repurchase Agreement
(Cost $320,743)				320,743
		Shares
SECURITIES LENDING COLLATERAL†,3 - 1.2%
First American Government Obligations Fund — Class Z, 0.61%4		751,055		751,055
Total Securities Lending Collateral
(Cost $751,055)				751,055
Total Investments - 101.2%
(Cost $49,739,028)			$	62,274,559
Other Assets & Liabilities, net - (1.2)%				(765,730	)
Total Net Assets - 100.0%			$	61,508,829

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	60,509,907	$	—	$	—	$	60,509,907
Preferred Stocks		692,854		—		—		692,854
Repurchase Agreement		—		320,743		—		320,743
Securities Lending Collateral		751,055		—		—		751,055
Total	$	61,953,816	$	320,743	$	—	$	62,274,559

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

BANKING FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $727,694 of securities loaned (cost $49,418,285)	$	61,953,816
Repurchase agreements, at value (cost $320,743)		320,743
Total investments (cost $49,739,028)		62,274,559
Receivables:
Securities sold		537,755
Fund shares sold		278,106
Dividends		120,936
Foreign taxes reclaim		3,614
Securities lending income		886
Interest		6
Total assets		63,215,862
Liabilities:
Payable for:
Fund shares redeemed		832,280
Return of securities loaned		751,055
Management fees		57,190
Transfer agent and administrative fees		16,820
Distribution and service fees		10,999
Portfolio accounting fees		6,728
Miscellaneous		31,961
Total liabilities		1,707,033
Commitments and contingent liabilities (Note 11)		—
Net assets	$	61,508,829
Net assets consist of:
Paid in capital	$	73,664,124
Undistributed net investment income		238,285
Accumulated net realized loss on investments		(24,929,111	)
Net unrealized appreciation on investments		12,535,531
Net assets	$	61,508,829
Investor Class:
Net assets	$	41,473,470
Capital shares outstanding		539,582
Net asset value per share	$	76.86
A-Class:
Net assets	$	5,933,652
Capital shares outstanding		84,274
Net asset value per share	$	70.41
Maximum offering price per share (Net asset value divided by 95.25%)	$	73.92
C-Class:
Net assets	$	5,634,382
Capital shares outstanding		88,063
Net asset value per share	$	63.98
H-Class:
Net assets	$	8,467,325
Capital shares outstanding		123,420
Net asset value per share	$	68.61

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $15,064)	$	870,979
Income from securities lending, net		3,567
Interest		924
Total investment income		875,470
Expenses:
Management fees		348,952
Transfer agent and administrative fees		102,633
Distribution and service fees:
A-Class		7,394
C-Class		39,429
H-Class		22,957
Portfolio accounting fees		41,053
Custodian fees		5,619
Trustees’ fees*		2,169
Line of credit fees		254
Miscellaneous		66,725
Total expenses		637,185
Net investment income		238,285
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		1,464,242
Net realized gain		1,464,242
Net change in unrealized appreciation (depreciation) on:
Investments		8,815,507
Net change in unrealized appreciation (depreciation)		8,815,507
Net realized and unrealized gain		10,279,749
Net increase in net assets resulting from operations	$	10,518,034

* 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.

BANKING FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	238,285		$	269,048
Net realized gain (loss) on investments		1,464,242			(3,164,939	)
Net change in unrealized appreciation (depreciation) on investments		8,815,507			(31,048	)
Net increase (decrease) in net assets resulting from operations		10,518,034			(2,926,939	)
Distributions to shareholders from:
Net investment income
Investor Class		(184,641	)		(51,827	)
A-Class		(30,326	)		(8,948	)
C-Class		(19,058	)		(21,332	)
H-Class		(35,023	)		(2,387	)*
Total distributions to shareholders		(269,048	)		(84,494	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		231,950,491			87,235,741
A-Class		12,517,711			10,514,018
C-Class		5,972,804			17,189,341
H-Class		248,740,610			112,516,867	*
Distributions reinvested
Investor Class		183,226			49,679
A-Class		20,961			8,716
C-Class		18,821			21,120
H-Class		35,011			2,376	*
Cost of shares redeemed
Investor Class		(205,535,966	)		(123,610,616	)
A-Class		(8,453,891	)		(9,638,810	)
C-Class		(4,560,750	)		(16,568,748	)
H-Class		(242,259,106	)		(111,099,432	)*
Net increase (decrease) from capital share transactions		38,629,922			(33,379,748	)
Net increase (decrease) in net assets		48,878,908			(36,391,181	)
Net assets:
Beginning of year		12,629,921			49,021,102
End of year	$	61,508,829		$	12,629,921
Undistributed net investment income at end of year	$	238,285		$	269,048
Capital share activity:
Shares sold
Investor Class		3,510,748			1,376,130
A-Class		195,570			175,337
C-Class		105,363			320,598
H-Class		4,361,031			2,045,614	*
Shares issued from reinvestment of distributions
Investor Class		2,544			788
A-Class		317			150
C-Class		313			396
H-Class		544			42	*
Shares redeemed
Investor Class		(3,102,087	)		(1,949,956	)
A-Class		(128,613	)		(176,727	)
C-Class		(85,128	)		(312,183	)
H-Class		(4,265,233	)		(2,033,623	)*
Net increase (decrease) in shares		595,369			(553,434	)

* 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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	56.13		$	62.71		$	63.60		$	52.58		$	46.75
Income (loss) from investment operations:
Net investment income (loss)a		.53			.68			.51			.54			.54
Net gain (loss) on investments (realized and unrealized)		20.51			(6.97	)		(.98	)		11.09			5.44
Total from investment operations		21.04			(6.29	)		(.47	)		11.63			5.98
Less distributions from:
Net investment income		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Total distributions		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Net asset value, end of period	$	76.86		$	56.13		$	62.71		$	63.60		$	52.58
Total Returnb		37.53	%		(10.10	%)		(0.73	%)		22.17	%		12.84	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	41,473		$	7,206		$	43,989		$	11,241		$	8,915
Ratios to average net assets:
Net investment income (loss)		0.74	%		1.07	%		0.82	%		0.92	%		1.16	%
Total expenses		1.38	%		1.34	%		1.34	%		1.37	%		1.35	%
Portfolio turnover rate		907	%		514	%		583	%		481	%		382	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	51.55		$	57.76		$	58.75		$	48.74		$	43.45
Income (loss) from investment operations:
Net investment income (loss)a		.33			.40			.26			.39			.36
Net gain (loss) on investments (realized and unrealized)		18.84			(6.32	)		(.83	)		10.23			5.08
Total from investment operations		19.17			(5.92	)		(.57	)		10.62			5.44
Less distributions from:
Net investment income		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Total distributions		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Net asset value, end of period	$	70.41		$	51.55		$	57.76		$	58.75		$	48.74
Total Returnb		37.21	%		(10.31	%)		(0.98	%)		21.84	%		12.60	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,934		$	876		$	1,054		$	8,305		$	2,103
Ratios to average net assets:
Net investment income (loss)		0.51	%		0.69	%		0.45	%		0.71	%		0.88	%
Total expenses		1.63	%		1.59	%		1.60	%		1.62	%		1.59	%
Portfolio turnover rate		907	%		514	%		583	%		481	%		382	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	47.22		$	53.34		$	54.69		$	45.74		$	41.09
Income (loss) from investment operations:
Net investment income (loss)a		(.05	)		.03			(.14	)		(.05	)		.01
Net gain (loss) on investments (realized and unrealized)		17.12			(5.86	)		(.79	)		9.61			4.79
Total from investment operations		17.07			(5.83	)		(.93	)		9.56			4.80
Less distributions from:
Net investment income		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Total distributions		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Net asset value, end of period	$	63.98		$	47.22		$	53.34		$	54.69		$	45.74
Total Returnb		36.18	%		(10.99	%)		(1.71	%)		20.95	%		11.74	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,634		$	3,188		$	3,131		$	4,307		$	4,036
Ratios to average net assets:
Net investment income (loss)		(0.09	%)		0.05	%		(0.26	%)		(0.10	%)		0.02	%
Total expenses		2.37	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		907	%		514	%		583	%		481	%		382	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 31, 2013c
Per Share Data
Net asset value, beginning of period	$	50.22		$	56.30		$	57.40		$	47.71		$	42.63
Income (loss) from investment operations:
Net investment income (loss)a		.29			.33			(.01	)		.23			.17
Net gain (loss) on investments (realized and unrealized)		18.41			(6.12	)		(.67	)		10.07			5.06
Total from investment operations		18.70			(5.79	)		(.68	)		10.30			5.23
Less distributions from:
Net investment income		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Total distributions		(.31	)		(.29	)		(.42	)		(.61	)		(.15	)
Net asset value, end of period	$	68.61		$	50.22		$	56.30		$	57.40		$	47.71
Total Returnb		37.26	%		(10.34	%)		(1.19	%)		21.64	%		12.32	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,467		$	1,360		$	847		$	540		$	4,235
Ratios to average net assets:
Net investment income (loss)		0.45	%		0.57	%		(0.02	%)		0.44	%		0.38	%
Total expenses		1.63	%		1.68	%		1.85	%		1.87	%		1.86	%
Portfolio turnover rate		907	%		514	%		583	%		481	%		382	%

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 | 17

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Basic Materials Fund Investor Class returned 24.85%, compared with 19.22% for the S&P 500 Materials Index. The broader S&P 500 Index returned 17.17%.

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 chemicals, followed by metals & mining. No industry detracted. The semiconductors & semiconductor equipment industry contributed the least to return.

The top-performing holdings were Vale S.A. ADR, Chemours Co., and Teck Resources Ltd. — Class B. The worst-performing holdings included Tahoe Resources, Inc., First Majestic Silver Corp., and AK Steel Holding 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:
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.	2.9%
Monsanto Co.	2.5%
LyondellBasell Industries N.V. — Class A	2.1%
Ecolab, Inc.	2.1%
Praxair, Inc.	2.1%
Air Products & Chemicals, Inc.	1.9%
Sherwin-Williams Co.	1.9%
PPG Industries, Inc.	1.8%
International Paper Co.	1.6%
Top Ten Total	22.0%

“Ten Largest Holdings” excludes any temporary cash investments.

18 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	24.65%	3.27%	3.58%
A-Class Shares	24.33%	3.01%	3.32%
A-Class Shares with sales charge†	18.42%	2.01%	2.82%
C-Class Shares	23.41%	2.24%	2.54%
C-Class Shares with CDSC‡	22.41%	2.24%	2.54%
H-Class Shares**	24.36%	2.84%	3.10%
S&P 500 Materials Index	19.22%	9.46%	5.75%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 | 19

SCHEDULE OF INVESTMENTS	March 31, 2017
BASIC MATERIALS FUND

	Shares		Value
COMMON STOCKS† - 100.1%
Chemicals - 44.6%
Dow Chemical Co.		42,124	$	2,676,558
EI du Pont de Nemours & Co.		31,718		2,547,906
Monsanto Co.		19,046		2,156,007
LyondellBasell Industries N.V. — Class A		20,385		1,858,908
Praxair, Inc.		15,122		1,793,470
Air Products & Chemicals, Inc.		12,098		1,636,738
Sherwin-Williams Co.		5,266		1,633,461
PPG Industries, Inc.		15,220		1,599,318
Celanese Corp. — Class A		11,982		1,076,583
Albemarle Corp.		10,049		1,061,577
Eastman Chemical Co.		13,068		1,055,894
FMC Corp.		14,330		997,225
International Flavors & Fragrances, Inc.		7,491		992,782
Mosaic Co.		33,523		978,201
Valspar Corp.		8,144		903,495
Potash Corporation of Saskatchewan, Inc.1		51,675		882,609
Westlake Chemical Corp.		13,360		882,428
Chemours Co.		22,390		862,015
Ashland Global Holdings, Inc.		6,852		848,346
Axalta Coating Systems Ltd.*		25,810		831,082
RPM International, Inc.		14,877		818,681
CF Industries Holdings, Inc.		27,520		807,712
Huntsman Corp.		31,318		768,544
NewMarket Corp.		1,606		727,887
Olin Corp.		21,517		707,264
WR Grace & Co.		9,456		659,178
Methanex Corp.		13,970		655,193
Agrium, Inc.1		6,733		643,338
Cabot Corp.		9,828		588,795
Platform Specialty Products Corp.*		44,940		585,119
Sensient Technologies Corp.		7,120		564,331
PolyOne Corp.		15,012		511,759
Minerals Technologies, Inc.		6,605		505,943
Ingevity Corp.*		8,100		492,885
HB Fuller Co.		9,480		488,789
Balchem Corp.		5,900		486,278
GCP Applied Technologies, Inc.*		14,000		457,100
Chemtura Corp.*		13,250		442,550
Innospec, Inc.		6,000		388,500
A. Schulman, Inc.		9,200		289,340
Total Chemicals				38,863,789
Mining – 21.0%
Barrick Gold Corp.		72,675		1,380,098
Freeport-McMoRan, Inc.*		102,456		1,368,812
Newmont Mining Corp.		39,533		1,303,008
Teck Resources Ltd. — Class B		45,641		999,538
Rio Tinto plc ADR		23,575		959,031
Goldcorp, Inc.		61,994		904,492
Silver Wheaton Corp.		42,774		891,410
BHP Billiton Ltd. ADR1		24,315		883,121
Randgold Resources Ltd. ADR		9,504		829,509
Agnico Eagle Mines Ltd.		19,240		816,546
Franco-Nevada Corp.		11,782		771,839
Alcoa Corp.		21,919		754,014
Southern Copper Corp.		19,780		709,904
Pan American Silver Corp.		40,402		707,843
AngloGold Ashanti Ltd. ADR1		64,841		698,338
First Majestic Silver Corp.*,1		84,052		682,502
Royal Gold, Inc.		9,709		680,115
Tahoe Resources, Inc.		62,348		500,655
Compass Minerals International, Inc.		6,768		459,209
Hecla Mining Co.		85,131		450,343
Stillwater Mining Co.*		25,362		438,002
Kaiser Aluminum Corp.		4,657		372,094
Coeur Mining, Inc.*		45,877		370,686
Century Aluminum Co.*		25,388		322,174
Total Mining				18,253,283
Packaging & Containers - 10.9%
Ball Corp.		14,734		1,094,147
WestRock Co.		20,869		1,085,814
Packaging Corporation of America		9,714		889,997
Sealed Air Corp.		19,743		860,400
Crown Holdings, Inc.*		15,534		822,525
Berry Plastics Group, Inc.*		15,416		748,755
Sonoco Products Co.		13,160		696,427
Bemis Company, Inc.		13,252		647,493
Graphic Packaging Holding Co.		47,329		609,124
Owens-Illinois, Inc.*		26,968		549,608
Silgan Holdings, Inc.		9,200		546,112
Greif, Inc. — Class A		9,200		506,828
KapStone Paper and Packaging Corp.		19,490		450,219
Total Packaging & Containers				9,507,449
Iron & Steel - 9.1%
Nucor Corp.		21,229		1,267,795
Vale S.A. ADR		124,582		1,183,529
Steel Dynamics, Inc.		25,255		877,864
ArcelorMittal*,1		100,014		835,117
Reliance Steel & Aluminum Co.		9,138		731,223
United States Steel Corp.		20,928		707,576
Cliffs Natural Resources, Inc.*		55,314		454,128
Commercial Metals Co.		23,491		449,383
AK Steel Holding Corp.*		59,820		430,106
Allegheny Technologies, Inc.1		23,319		418,809
Carpenter Technology Corp.		10,388		387,472
Schnitzer Steel Industries, Inc. — Class A		10,900		225,085
Total Iron & Steel				7,968,087
Building Materials - 6.6%
Vulcan Materials Co.		10,323		1,243,715
Martin Marietta Materials, Inc.		5,349		1,167,419
Cemex SAB de CV ADR*		93,624		849,170
Eagle Materials, Inc.		6,761		656,764
Louisiana-Pacific Corp.*		23,053		572,175
Summit Materials, Inc. — Class A*		21,407		528,967
Headwaters, Inc.*		17,200		403,856
US Concrete, Inc.*,1		4,520		291,766
Total Building Materials				5,713,832

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
BASIC MATERIALS FUND

	Shares		Value
Commercial Services - 2.1%
Ecolab, Inc.		14,709	$	1,843,626
Forest Products & Paper - 2.1%
International Paper Co.		27,223		1,382,384
Domtar Corp.		12,481		455,806
Total Forest Products & Paper				1,838,190
Miscellaneous Manufacturing - 1.4%
AptarGroup, Inc.		8,714		670,891
Trinseo S.A.		7,630		511,973
Total Miscellaneous Manufacturing				1,182,864
Household Products & Housewares – 0.9%
Avery Dennison Corp.		10,155		818,493
Housewares - 0.8%
Scotts Miracle-Gro Co. — Class A		7,740		722,839
Metal Fabricate & Hardware - 0.6%
Worthington Industries, Inc.		10,700		482,463
Total Common Stocks
(Cost $71,676,664)				87,194,915

	Face Amount
REPURCHASE AGREEMENT††,2 - 0.4%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	369,615		369,615
Total Repurchase Agreement
(Cost $369,615)				369,615
	Shares
SECURITIES LENDING COLLATERAL†,3 - 4.7%
First American Government Obligations Fund — Class Z, 0.61%4		4,053,465		4,053,465
Total Securities Lending Collateral
(Cost $4,053,465)				4,053,465
Total Investments - 105.2%
(Cost $76,099,744)			$	91,617,995
Other Assets & Liabilities, net - (5.2)%				(4,508,587	)
Total Net Assets - 100.0%			$	87,109,408

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	87,194,915	$	—	$	—	$	87,194,915
Repurchase Agreement		—		369,615		—		369,615
Securities Lending Collateral		4,053,465		—		—		4,053,465
Total	$	91,248,380	$	369,615	$	—	$	91,617,995

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

BASIC MATERIALS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $3,930,272 of securities loaned (cost $75,730,129)	$	91,248,380
Repurchase agreements, at value (cost $369,615)		369,615
Total investments (cost $76,099,744)		91,617,995
Cash		4,013
Receivables:
Securities sold		5,357,035
Fund shares sold		196,102
Dividends		162,627
Securities lending income		1,319
Interest		7
Total assets		97,339,098
Liabilities:
Payable for:
Fund shares redeemed		5,869,497
Return of securities loaned		4,053,465
Deferred foreign capital gain taxes		156,725
Management fees		71,031
Transfer agent and administrative fees		20,891
Distribution and service fees		10,360
Portfolio accounting fees		8,356
Miscellaneous		39,365
Total liabilities		10,229,690
Commitments and contingent liabilities (Note 11)		—
Net assets	$	87,109,408
Net assets consist of:
Paid in capital	$	87,836,098
Accumulated net investment loss		(95,895	)
Accumulated net realized loss on investments		(16,149,046	)
Net unrealized appreciation on investments		15,518,251
Net assets	$	87,109,408
Investor Class:
Net assets	$	56,853,986
Capital shares outstanding		1,020,612
Net asset value per share	$	55.71
A-Class:
Net assets	$	16,355,279
Capital shares outstanding		312,033
Net asset value per share	$	52.42
Maximum offering price per share (Net asset value divided by 95.25%)	$	55.03
C-Class:
Net assets	$	5,823,639
Capital shares outstanding		124,084
Net asset value per share	$	46.93
H-Class:
Net assets	$	8,076,504
Capital shares outstanding		158,855
Net asset value per share	$	50.84

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $23,752)	$	1,661,998
Income from securities lending, net		6,483
Interest		1,666
Total investment income		1,670,147
Expenses:
Management fees		829,719
Transfer agent and administrative fees		244,035
Distribution and service fees:
A-Class		48,670
C-Class		46,225
H-Class		24,945
Portfolio accounting fees		97,613
Custodian fees		14,712
Trustees’ fees*		9,662
Line of credit fees		315
Miscellaneous		147,817
Total expenses		1,463,713
Net investment income		206,434
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		9,183,264	a
Net realized gain		9,183,264	a
Net change in unrealized appreciation (depreciation) on:
Investments		5,660,263
Net change in unrealized appreciation (depreciation)		5,660,263
Net realized and unrealized gain		14,843,527
Net increase in net assets resulting from operations	$	15,049,961

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
a	Net of foreign capital gain taxes of $156,725.

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

BASIC MATERIALS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	206,434		$	117,635
Net realized gain on investments		9,183,264			884,104
Net change in unrealized appreciation (depreciation) on investments		5,660,263			(5,935,320	)
Net increase (decrease) in net assets resulting from operations		15,049,961			(4,933,581	)
Distributions to shareholders from:
Net investment income
Investor Class		(445,649	)		(195,078	)
A-Class		(129,410	)		(71,772	)
C-Class		(50,406	)		(53,293	)
H-Class		(44,931	)		(28,410	)*
Total distributions to shareholders		(670,396	)		(348,553	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		366,654,182			80,427,494
A-Class		60,038,778			14,088,359
C-Class		7,777,261			6,344,599
H-Class		46,556,397			83,252,748	*
Distributions reinvested
Investor Class		442,343			192,206
A-Class		124,774			67,673
C-Class		47,851			51,084
H-Class		44,870			28,316	*
Cost of shares redeemed
Investor Class		(349,084,142	)		(95,728,062	)
A-Class		(50,808,000	)		(15,228,557	)
C-Class		(5,202,949	)		(6,757,601	)
H-Class		(43,707,838	)		(79,518,030	)*
Net increase (decrease) from capital share transactions		32,883,527			(12,779,771	)
Net increase (decrease) in net assets		47,263,092			(18,061,905	)
Net assets:
Beginning of year		39,846,316			57,908,221
End of year	$	87,109,408		$	39,846,316
Accumulated net investment loss/Undistributed net investment income at end of year	$	(95,895	)	$	61,626
Capital share activity:
Shares sold
Investor Class		7,143,060			1,809,760
A-Class		1,268,197			314,160
C-Class		179,237			159,907
H-Class		1,009,782			1,979,353	*
Shares issued from reinvestment of distributions
Investor Class		8,544			4,625
A-Class		2,559			1,725
C-Class		1,093			1,437
H-Class		949			744	*
Shares redeemed
Investor Class		(6,809,481	)		(2,062,804	)
A-Class		(1,056,076	)		(348,813	)
C-Class		(119,321	)		(170,516	)
H-Class		(915,003	)		(1,961,860	)*
Net increase (decrease) in shares		713,540			(272,282	)

* 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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	45.18		$	50.18		$	52.53		$	49.94		$	49.80
Income (loss) from investment operations:
Net investment income (loss)a		.18			.26			.29			.32			.46
Net gain (loss) on investments (realized and unrealized)		10.92			(4.39	)		(2.26	)		2.58			(.15	)
Total from investment operations		11.10			(4.13	)		(1.97	)		2.90			.31
Less distributions from:
Net investment income		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Total distributions		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Net asset value, end of period	$	55.71		$	45.18		$	50.18		$	52.53		$	49.94
Total Returnb		24.65	%		(8.07	%)		(3.77	%)		5.84	%		0.65	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	56,854		$	30,653		$	46,509		$	33,687		$	36,012
Ratios to average net assets:
Net investment income (loss)		0.35	%		0.55	%		0.56	%		0.66	%		0.95	%
Total expenses		1.37	%		1.35	%		1.34	%		1.38	%		1.36	%
Portfolio turnover rate		361	%		471	%		358	%		349	%		251	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	42.65		$	47.54		$	49.93		$	47.60		$	47.58
Income (loss) from investment operations:
Net investment income (loss)a		.03			.10			.13			.22			.32
Net gain (loss) on investments (realized and unrealized)		10.31			(4.12	)		(2.14	)		2.42			(.13	)
Total from investment operations		10.34			(4.02	)		(2.01	)		2.64			.19
Less distributions from:
Net investment income		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Total distributions		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Net asset value, end of period	$	52.42		$	42.65		$	47.54		$	49.93		$	47.60
Total Returnb		24.33	%		(8.29	%)		(4.05	%)		5.58	%		0.41	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	16,355		$	4,152		$	6,194		$	13,347		$	11,104
Ratios to average net assets:
Net investment income (loss)		0.06	%		0.24	%		0.27	%		0.47	%		0.69	%
Total expenses		1.62	%		1.60	%		1.60	%		1.63	%		1.61	%
Portfolio turnover rate		361	%		471	%		358	%		349	%		251	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	38.52		$	43.36		$	45.91		$	44.12		$	44.45
Income (loss) from investment operations:
Net investment income (loss)a		(.29	)		(.17	)		(.23	)		(.15	)		(.03	)
Net gain (loss) on investments (realized and unrealized)		9.27			(3.80	)		(1.94	)		2.25			(.13	)
Total from investment operations		8.98			(3.97	)		(2.17	)		2.10			(.16	)
Less distributions from:
Net investment income		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Total distributions		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Net asset value, end of period	$	46.93		$	38.52		$	43.36		$	45.91		$	44.12
Total Returnb		23.41	%		(8.98	%)		(4.76	%)		4.80	%		(0.35	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,824		$	2,430		$	3,133		$	5,150		$	6,666
Ratios to average net assets:
Net investment income (loss)		(0.66	%)		(0.43	%)		(0.49	%)		(0.34	%)		(0.07	%)
Total expenses		2.37	%		2.35	%		2.35	%		2.38	%		2.36	%
Portfolio turnover rate		361	%		471	%		358	%		349	%		251	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	41.37		$	46.19		$	48.64		$	46.50		$	46.61
Income (loss) from investment operations:
Net investment income (loss)a		.01			.09			—	c		.08			.19
Net gain (loss) on investments (realized and unrealized)		10.03			(4.04	)		(2.07	)		2.37			(.13	)
Total from investment operations		10.04			(3.95	)		(2.07	)		2.45			.06
Less distributions from:
Net investment income		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Total distributions		(.57	)		(.87	)		(.38	)		(.31	)		(.17	)
Net asset value, end of period	$	50.84		$	41.37		$	46.19		$	48.64		$	46.50
Total Returnb		24.36	%		(8.36	%)		(4.30	%)		5.31	%		0.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,077		$	2,612		$	2,073		$	2,678		$	3,616
Ratios to average net assets:
Net investment income (loss)		0.03	%		0.24	%		—	e		0.18	%		0.43	%
Total expenses		1.62	%		1.64	%		1.85	%		1.88	%		1.86	%
Portfolio turnover rate		361	%		471	%		358	%		349	%		251	%

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	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.
e	Less than 0.01%.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Biotechnology Fund Investor Class returned 16.71%, compared with the S&P 500 Health Care Index, which returned 11.59%. The broader S&P 500 Index returned 17.17%.

The Fund is composed of three industries, all of which contributed to return for the period. The biotechnology industry, the Fund’s largest allocation, contributed the most, followed by the life sciences tools & services industry and the pharmaceuticals industry.

The best-performing holdings in the Fund were Tesaro, Inc., Incyte Corp., and Ariad Pharmaceuticals, Inc. The worst-performing holdings in the Fund included Gilead Sciences, Inc., Ophthotech Corp., and Impax Laboratories, 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)
Amgen, Inc.	5.7%
AbbVie, Inc.	5.5%
Celgene Corp.	5.3%
Gilead Sciences, Inc.	5.1%
Biogen, Inc.	4.2%
Shire plc ADR	3.9%
Regeneron Pharmaceuticals, Inc.	3.5%
Vertex Pharmaceuticals, Inc.	3.1%
Illumina, Inc.	2.9%
Alexion Pharmaceuticals, Inc.	2.8%
Top Ten Total	42.0%

“Ten Largest Holdings” excludes any temporary cash investments.

26 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	16.71%	17.91%	14.77%
A-Class Shares	16.42%	17.62%	14.48%
A-Class Shares with sales charge†	10.89%	16.48%	13.93%
C-Class Shares	15.55%	16.74%	13.64%
C-Class Shares with CDSC‡	14.55%	16.74%	13.64%
H-Class Shares**	16.39%	17.43%	14.25%
S&P 500 Health Care Index	11.59%	16.65%	10.35%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 | 27

SCHEDULE OF INVESTMENTS	March 31, 2017
BIOTECHNOLOGY FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Biotechnology - 63.3%
Amgen, Inc.		110,399	$	18,113,165
Celgene Corp.*		134,579		16,745,666
Gilead Sciences, Inc.		236,765		16,081,079
Biogen, Inc.*		48,875		13,363,403
Regeneron Pharmaceuticals, Inc.*		28,382		10,998,309
Vertex Pharmaceuticals, Inc.*		89,987		9,840,078
Illumina, Inc.*		53,059		9,053,988
Alexion Pharmaceuticals, Inc.*		73,362		8,894,409
Incyte Corp.*		64,417		8,610,620
BioMarin Pharmaceutical, Inc.*		75,392		6,617,910
Seattle Genetics, Inc.*		79,527		4,999,067
Exelixis, Inc.*		201,970		4,376,690
Bioverativ, Inc.*		79,687		4,339,754
United Therapeutics Corp.*		31,646		4,284,235
Bio-Rad Laboratories, Inc. — Class A*,1		21,082		4,202,486
Ionis Pharmaceuticals, Inc.*,1		93,141		3,744,268
Charles River Laboratories International, Inc.*		39,918		3,590,624
Alnylam Pharmaceuticals, Inc.*		68,041		3,487,101
Kite Pharma, Inc.*,1		43,800		3,437,862
Bluebird Bio, Inc.*,1		36,980		3,361,482
Medicines Co.*,1		64,308		3,144,661
Exact Sciences Corp.*,1		127,744		3,017,313
Sage Therapeutics, Inc.*		40,520		2,879,756
Prothena Corporation plc*,1		49,733		2,774,604
Intercept Pharmaceuticals, Inc.*,1		24,260		2,743,806
Juno Therapeutics, Inc.*,1		117,580		2,609,100
Ultragenyx Pharmaceutical, Inc.*		38,410		2,603,430
Ligand Pharmaceuticals, Inc. — Class B*,1		23,877		2,527,142
Intrexon Corp.*,1		127,120		2,519,518
Spark Therapeutics, Inc.*		40,020		2,134,667
Halozyme Therapeutics, Inc.*,1		156,725		2,031,156
Myriad Genetics, Inc.*,1		102,737		1,972,550
Puma Biotechnology, Inc.*		49,610		1,845,492
Five Prime Therapeutics, Inc.*		46,530		1,682,060
Alder Biopharmaceuticals, Inc.*		79,900		1,661,920
Acceleron Pharma, Inc.*		62,480		1,653,846
Acorda Therapeutics, Inc.*		70,657		1,483,797
AMAG Pharmaceuticals, Inc.*		65,026		1,466,336
Merrimack Pharmaceuticals, Inc.*,1		333,490		1,027,149
Total Biotechnology				199,920,499
Pharmaceuticals - 29.9%
AbbVie, Inc.		268,134		17,471,610
Shire plc ADR		69,840		12,168,223
TESARO, Inc.*		32,013		4,925,840
Nektar Therapeutics*		169,597		3,980,441
Jazz Pharmaceuticals plc*		26,920		3,906,900
Alkermes plc*		66,278		3,877,263
PRA Health Sciences, Inc.*		55,990		3,652,228
ACADIA Pharmaceuticals, Inc.*		98,474		3,385,536
Neurocrine Biosciences, Inc.*		77,021		3,335,009
Akorn, Inc.*		126,241		3,039,883
Agios Pharmaceuticals, Inc.*,1		48,004		2,803,434
Clovis Oncology, Inc.*		43,100		2,744,177
Ironwood Pharmaceuticals, Inc. — Class A*		156,326		2,666,922
Horizon Pharma plc*		177,714		2,626,613
Avexis, Inc.*,1		33,900		2,577,417
Portola Pharmaceuticals, Inc.*		64,880		2,542,647
Radius Health, Inc.*		58,570		2,263,731
Sarepta Therapeutics, Inc.*		74,450		2,203,720
Pacira Pharmaceuticals, Inc.*		47,040		2,145,024
Eagle Pharmaceuticals, Inc.*,1		23,760		1,970,654
Array BioPharma, Inc.*		216,870		1,938,818
Impax Laboratories, Inc.*		148,390		1,877,134
Amicus Therapeutics, Inc.*		244,110		1,740,504
Synergy Pharmaceuticals, Inc.*,1		354,600		1,652,436
Heron Therapeutics, Inc.*,1		103,000		1,545,000
Depomed, Inc.*		106,614		1,338,006
Total Pharmaceuticals				94,379,170
Healthcare-Products - 3.1%
OPKO Health, Inc.*,1		436,039		3,488,312
Bio-Techne Corp.		32,852		3,339,406
QIAGEN N.V.*		97,606		2,827,646
Total Healthcare-Products				9,655,364
Healthcare-Services - 2.4%
Quintiles IMS Holdings, Inc.*		93,144		7,500,886
Commercial Services - 0.8%
Incorporated Research Holdings, Inc. — Class A*		58,210		2,668,929
Total Common Stocks
(Cost $169,706,097)				314,124,848
RIGHTS††† - 0.0%**
Chelsea Therapeutics International
Expires 12/31/17*		231,107		—
Dyax Corp.
Expires 01/25/18*		167,165		—
Clinical Data, Inc.
Expires 12/31/20*		24,000		—
Total Rights
(Cost $17,304)				—
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.6%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	1,962,048		1,962,048
Total Repurchase Agreement
(Cost $1,962,048)				1,962,048

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
BIOTECHNOLOGY FUND

	Shares		Value
SECURITIES LENDING COLLATERAL†,3 - 8.5%
First American Government Obligations Fund — Class Z, 0.61%4		26,809,744	$	26,809,744
Total Securities Lending Collateral
(Cost $26,809,744)				26,809,744
Total Investments - 108.6%
(Cost $198,495,193)			$	342,896,640
Other Assets & Liabilities, net - (8.6)%				(27,128,572	)
Total Net Assets - 100.0%			$	315,768,068

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3			Total
Common Stocks	$	314,124,848	$	—	$	—		$	314,124,848
Repurchase Agreement		—		1,962,048		—			1,962,048
Rights		—		—		—	*		—
Securities Lending Collateral		26,809,744		—		—			26,809,744
Total	$	340,934,592	$	1,962,048	$	—		$	342,896,640

* Market value of securities is $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

BIOTECHNOLOGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $26,140,010 of securities loaned (cost $196,533,145)	$	340,934,592
Repurchase agreements, at value (cost $1,962,048)		1,962,048
Total investments (cost $198,495,193)		342,896,640
Receivables:
Securities sold		2,007,530
Fund shares sold		435,267
Dividends		56,160
Securities lending income		14,682
Interest		37
Total assets		345,410,316
Liabilities:
Payable for:
Return of securities loaned		26,809,744
Fund shares redeemed		2,341,710
Management fees		237,880
Transfer agent and administrative fees		69,964
Distribution and service fees		30,735
Portfolio accounting fees		26,298
Miscellaneous		125,917
Total liabilities		29,642,248
Commitments and contingent liabilities (Note 11)		—
Net assets	$	315,768,068
Net assets consist of:
Paid in capital	$	184,251,292
Accumulated net investment loss		(502,785	)
Accumulated net realized loss on investments		(12,381,886	)
Net unrealized appreciation on investments		144,401,447
Net assets	$	315,768,068
Investor Class:
Net assets	$	238,614,091
Capital shares outstanding		2,993,126
Net asset value per share	$	79.72
A-Class:
Net assets	$	36,849,063
Capital shares outstanding		496,889
Net asset value per share	$	74.16
Maximum offering price per share (Net asset value divided by 95.25%)	$	77.86
C-Class:
Net assets	$	20,996,932
Capital shares outstanding		311,795
Net asset value per share	$	67.34
H-Class:
Net assets	$	19,307,982
Capital shares outstanding		267,555
Net asset value per share	$	72.16

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $16,964)	$	1,943,360
Income from securities lending, net		99,216
Interest		4,624
Total investment income		2,047,200
Expenses:
Management fees		2,894,968
Transfer agent and administrative fees		851,461
Distribution and service fees:
A-Class		103,466
C-Class		241,302
H-Class		58,264
Portfolio accounting fees		317,807
Registration fees		285,920
Custodian fees		49,848
Trustees’ fees*		30,972
Line of credit fees		2,348
Miscellaneous		227,792
Total expenses		5,064,148
Net investment loss		(3,016,948	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		33,962,436
Net realized gain		33,962,436
Net change in unrealized appreciation (depreciation) on:
Investments		16,030,019
Net change in unrealized appreciation (depreciation)		16,030,019
Net realized and unrealized gain		49,992,455
Net increase in net assets resulting from operations	$	46,975,507

* 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.

BIOTECHNOLOGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(3,016,948	)	$	(6,270,830	)
Net realized gain on investments		33,962,436			7,692,022
Net change in unrealized appreciation (depreciation) on investments		16,030,019			(184,506,116	)
Net increase (decrease) in net assets resulting from operations		46,975,507			(183,084,924	)
Distributions to shareholders from:
Net realized gains
Investor Class		—			(6,254,804	)
A-Class		—			(1,249,744	)
C-Class		—			(670,534	)
H-Class		—			(945,732	)*
Total distributions to shareholders		—			(9,120,814	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		566,789,465			417,939,980
A-Class		12,173,169			49,892,327
C-Class		6,487,269			25,666,356
H-Class		248,519,397			179,430,634	*
Distributions reinvested
Investor Class		—			6,001,463
A-Class		—			1,177,072
C-Class		—			654,350
H-Class		—			945,257	*
Cost of shares redeemed
Investor Class		(624,179,693	)		(524,242,886	)
A-Class		(30,279,707	)		(66,310,633	)
C-Class		(15,081,301	)		(29,104,862	)
H-Class		(258,314,588	)		(199,112,976	)*
Net decrease from capital share transactions		(93,885,989	)		(137,063,918	)
Net decrease in net assets		(46,910,482	)		(329,269,656	)
Net assets:
Beginning of year		362,678,550			691,948,206
End of year	$	315,768,068		$	362,678,550
Accumulated net investment loss at end of year	$	(502,785	)	$	(1,026,432	)
Capital share activity:
Shares sold
Investor Class		7,604,195			4,464,545
A-Class		171,354			581,344
C-Class		102,310			323,436
H-Class		3,763,839			2,176,992	*
Shares issued from reinvestment of distributions
Investor Class		—			69,159
A-Class		—			14,537
C-Class		—			8,806
H-Class		—			11,990	*
Shares redeemed
Investor Class		(8,424,736	)		(6,039,629	)
A-Class		(438,604	)		(850,368	)
C-Class		(239,863	)		(395,078	)
H-Class		(3,937,371	)		(2,488,023	)*
Net decrease in shares		(1,398,876	)		(2,122,289	)

* 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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	68.30		$	93.63		$	68.47		$	48.97		$	36.90
Income (loss) from investment operations:
Net investment income (loss)a		(.57	)		(.75	)		(.27	)		(.51	)		(.40	)
Net gain (loss) on investments (realized and unrealized)		11.99			(23.30	)		28.59			20.01			12.47
Total from investment operations		11.42			(24.05	)		28.32			19.50			12.07
Less distributions from:
Net realized gains		—			(1.28	)		(3.16	)		—			—
Total distributions		—			(1.28	)		(3.16	)		—			—
Net asset value, end of period	$	79.72		$	68.30		$	93.63		$	68.47		$	48.97
Total Returnb		16.71	%		(25.98	%)		42.19	%		39.82	%		32.71	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	238,614		$	260,476		$	498,068		$	313,324		$	171,844
Ratios to average net assets:
Net investment income (loss)		(0.76	%)		(0.84	%)		(0.34	%)		(0.82	%)		(0.98	%)
Total expenses		1.37	%		1.32	%		1.33	%		1.36	%		1.35	%
Portfolio turnover rate		207	%		83	%		107	%		119	%		197	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	63.69		$	87.63		$	64.41		$	46.18		$	34.88
Income (loss) from investment operations:
Net investment income (loss)a		(.70	)		(.91	)		(.44	)		(.62	)		(.48	)
Net gain (loss) on investments (realized and unrealized)		11.17			(21.75	)		26.82			18.85			11.78
Total from investment operations		10.47			(22.66	)		26.38			18.23			11.30
Less distributions from:
Net realized gains		—			(1.28	)		(3.16	)		—			—
Total distributions		—			(1.28	)		(3.16	)		—			—
Net asset value, end of period	$	74.16		$	63.69		$	87.63		$	64.41		$	46.18
Total Returnb		16.42	%		(26.17	%)		41.83	%		39.48	%		32.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	36,849		$	48,672		$	89,260		$	51,270		$	26,391
Ratios to average net assets:
Net investment income (loss)		(1.01	%)		(1.09	%)		(0.59	%)		(1.07	%)		(1.21	%)
Total expenses		1.61	%		1.57	%		1.58	%		1.61	%		1.61	%
Portfolio turnover rate		207	%		83	%		107	%		119	%		197	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	58.27		$	80.88		$	60.10		$	43.41		$	33.04
Income (loss) from investment operations:
Net investment income (loss)a		(1.11	)		(1.40	)		(.92	)		(.99	)		(.73	)
Net gain (loss) on investments (realized and unrealized)		10.18			(19.93	)		24.86			17.68			11.10
Total from investment operations		9.07			(21.33	)		23.94			16.69			10.37
Less distributions from:
Net realized gains		—			(1.28	)		(3.16	)		—			—
Total distributions		—			(1.28	)		(3.16	)		—			—
Net asset value, end of period	$	67.34		$	58.27		$	80.88		$	60.10		$	43.41
Total Returnb		15.55	%		(26.72	%)		40.75	%		38.45	%		31.39	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	20,997		$	26,185		$	41,424		$	27,170		$	13,677
Ratios to average net assets:
Net investment income (loss)		(1.76	%)		(1.84	%)		(1.34	%)		(1.82	%)		(1.96	%)
Total expenses		2.36	%		2.33	%		2.33	%		2.36	%		2.36	%
Portfolio turnover rate		207	%		83	%		107	%		119	%		197	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	62.00		$	85.38		$	62.98		$	45.27		$	34.27
Income (loss) from investment operations:
Net investment income (loss)a		(.70	)		(.96	)		(.61	)		(.74	)		(.56	)
Net gain (loss) on investments (realized and unrealized)		10.86			(21.14	)		26.17			18.45			11.56
Total from investment operations		10.16			(22.10	)		25.56			17.71			11.00
Less distributions from:
Net realized gains		—			(1.28	)		(3.16	)		—			—
Total distributions		—			(1.28	)		(3.16	)		—			—
Net asset value, end of period	$	72.16		$	62.00		$	85.38		$	62.98		$	45.27
Total Returnb		16.39	%		(26.22	%)		41.49	%		39.12	%		32.10	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	19,308		$	27,346		$	63,196		$	37,978		$	22,486
Ratios to average net assets:
Net investment income (loss)		(1.04	%)		(1.17	%)		(0.84	%)		(1.32	%)		(1.46	%)
Total expenses		1.61	%		1.65	%		1.83	%		1.86	%		1.86	%
Portfolio turnover rate		207	%		83	%		107	%		119	%		197	%

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 | 33

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Consumer Products Fund Investor Class returned 6.62%, compared with 6.16% for the S&P 500 Consumer Staples Index. The broader S&P 500 Index returned 17.17%.

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

Fund performance for the period got the biggest boost from Reynolds American, Inc., Philip Morris International, Inc., and Altria Group, Inc. The Fund’s leading detractors during the period were Kroger Co., Coty, Inc. — Class A, and Hormel Foods 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:
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.	4.8%
Coca-Cola Co.	4.3%
Philip Morris International, Inc.	4.2%
PepsiCo, Inc.	4.0%
Altria Group, Inc.	3.7%
Kraft Heinz Co.	3.3%
Reynolds American, Inc.	3.1%
Colgate-Palmolive Co.	2.5%
Mondelez International, Inc. — Class A	2.5%
Kimberly-Clark Corp.	2.2%
Top Ten Total	34.6%

“Ten Largest Holdings” excludes any temporary cash investments.

34 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	6.62%	12.43%	9.75%
A-Class Shares	6.35%	12.15%	9.48%
A-Class Shares with sales charge†	1.30%	11.06%	8.95%
C-Class Shares	5.55%	11.30%	8.66%
C-Class Shares with CDSC‡	4.55%	11.30%	8.66%
H-Class Shares**	6.35%	11.96%	9.25%
S&P 500 Consumer Staples Index	6.16%	12.90%	10.58%
S&P 500 Index	17.17%	13.30%	7.51%

*	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.

THE RYDEX FUNDS ANNUAL REPORT | 35

SCHEDULE OF INVESTMENTS	March 31, 2017
CONSUMER PRODUCTS FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Food - 38.9%
Kraft Heinz Co.		113,193	$	10,279,056
Mondelez International, Inc. — Class A		182,490		7,861,669
General Mills, Inc.		97,273		5,740,080
Sysco Corp.		101,166		5,252,539
Kroger Co.		174,783		5,154,350
Kellogg Co.		67,931		4,932,470
Tyson Foods, Inc. — Class A		79,321		4,894,899
Hershey Co.		43,657		4,769,527
Hormel Foods Corp.		122,829		4,253,568
Campbell Soup Co.		71,777		4,108,515
Conagra Brands, Inc.		101,678		4,101,691
JM Smucker Co.		28,773		3,771,565
McCormick & Company, Inc.		34,916		3,406,056
WhiteWave Foods Co. — Class A*		56,681		3,182,638
Whole Foods Market, Inc.		102,240		3,038,573
Ingredion, Inc.		24,347		2,932,109
Pinnacle Foods, Inc.		44,500		2,575,215
US Foods Holding Corp.*		89,900		2,515,402
Post Holdings, Inc.*,1		28,400		2,485,568
Lamb Weston Holdings, Inc.		58,810		2,473,549
Pilgrim’s Pride Corp.1		106,889		2,405,537
TreeHouse Foods, Inc.*		25,491		2,158,068
Blue Buffalo Pet Products, Inc.*		90,119		2,072,737
Flowers Foods, Inc.		102,782		1,994,999
Snyder’s-Lance, Inc.		48,600		1,959,066
Hain Celestial Group, Inc.*		52,225		1,942,770
Lancaster Colony Corp.		14,252		1,836,228
Sprouts Farmers Market, Inc.*		76,200		1,761,744
Fresh Del Monte Produce, Inc.		29,200		1,729,516
B&G Foods, Inc.		42,131		1,695,773
Sanderson Farms, Inc.		15,498		1,609,312
Performance Food Group Co.*		66,600		1,585,080
J&J Snack Foods Corp.		11,600		1,572,496
Darling Ingredients, Inc.*		106,364		1,544,405
United Natural Foods, Inc.*		32,930		1,423,564
Hostess Brands, Inc.*		89,200		1,415,604
Dean Foods Co.		69,263		1,361,711
Cal-Maine Foods, Inc.1		34,800		1,280,640
SpartanNash Co.		33,300		1,165,167
Calavo Growers, Inc.1		16,600		1,005,960
Total Food				121,249,416
Beverages - 21.3%
Coca-Cola Co.		315,940		13,408,495
PepsiCo, Inc.		112,505		12,584,809
Constellation Brands, Inc. — Class A		34,505		5,592,226
Monster Beverage Corp.*		109,417		5,051,783
Molson Coors Brewing Co. — Class B		46,358		4,436,924
Dr Pepper Snapple Group, Inc.		43,198		4,229,948
Brown-Forman Corp. — Class B		90,456		4,177,258
Anheuser-Busch InBev S.A. ADR		37,390		4,103,926
Coca-Cola European Partners plc		89,354		3,367,752
Diageo plc ADR		27,580		3,187,696
Fomento Economico Mexicano SAB de CV ADR		33,683		2,981,619
National Beverage Corp.		24,400		2,062,532
Boston Beer Company, Inc. — Class A*,1		9,132		1,320,944
Total Beverages				66,505,912
Agriculture - 16.1%
Philip Morris International, Inc.		116,394		13,140,882
Altria Group, Inc.		159,801		11,412,987
Reynolds American, Inc.		150,890		9,509,088
Archer-Daniels-Midland Co.		112,235		5,167,300
British American Tobacco plc ADR1		57,150		3,790,188
Bunge Ltd.		41,044		3,253,147
Vector Group Ltd.1		78,032		1,623,066
Universal Corp.		19,200		1,358,400
Andersons, Inc.		26,800		1,015,720
Total Agriculture				50,270,778
Cosmetics & Personal Care - 12.4%
Procter & Gamble Co.		165,974		14,912,764
Colgate-Palmolive Co.		108,516		7,942,286
Estee Lauder Companies, Inc. — Class A		64,867		5,500,073
Coty, Inc. — Class A		194,464		3,525,632
Unilever N.V. — Class Y		66,251		3,291,350
Edgewell Personal Care Co.*		27,188		1,988,530
Avon Products, Inc.*		316,550		1,392,820
Total Cosmetics & Personal Care				38,553,455
Household Products & Housewares - 6.3%
Kimberly-Clark Corp.		51,190		6,738,140
Clorox Co.		30,324		4,088,585
Church & Dwight Company, Inc.		70,744		3,528,003
Spectrum Brands Holdings, Inc.1		20,100		2,794,101
Central Garden & Pet Co. — Class A*		37,800		1,312,416
WD-40 Co.1		11,000		1,198,450
Total Household Products & Housewares				19,659,695
Pharmaceuticals - 2.1%
Mead Johnson Nutrition Co. — Class A		45,370		4,041,559
Herbalife Ltd.*,1		39,975		2,324,147
Total Pharmaceuticals				6,365,706
Retail - 1.2%
Casey’s General Stores, Inc.1		18,523		2,079,207
Nu Skin Enterprises, Inc. — Class A		31,330		1,740,068
Total Retail				3,819,275
Holding Companies-Diversified - 0.6%
HRG Group, Inc.*		100,000		1,932,000
Electrical Components & Equipment - 0.6%
Energizer Holdings, Inc.		33,235		1,852,851
Total Common Stocks
(Cost $218,472,287)				310,209,088

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
CONSUMER PRODUCTS FUND

	Shares		Value
RIGHTS††† - 0.0%**
PDC
Expires 05/02/17*		93,765	$	—
Casa Ley
Expires 01/17/19*		93,765		—
Total Rights
(Cost $23,055)				—
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.4%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	1,254,338		1,254,338
Total Repurchase Agreement
(Cost $1,254,338)				1,254,338
		Shares
SECURITIES LENDING COLLATERAL†,3 - 2.9%
First American Government Obligations Fund — Class Z, 0.61%4		9,078,709		9,078,709
Total Securities Lending Collateral
(Cost $9,078,709)				9,078,709
Total Investments - 102.8%
(Cost $228,828,389)			$	320,542,135
Other Assets & Liabilities, net - (2.8)%				(8,821,108	)
Total Net Assets - 100.0%			$	311,721,027

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3			Total
Common Stocks	$	310,209,088	$	—	$	—		$	310,209,088
Repurchase Agreement		—		1,254,338		—			1,254,338
Rights		—		—		—	*		—
Securities Lending Collateral		9,078,709		—		—			9,078,709
Total	$	319,287,797	$	1,254,338	$	—		$	320,542,135

* Market value of securities is $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

CONSUMER PRODUCTS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $8,896,881 of securities loaned (cost $227,574,051)	$	319,287,797
Repurchase agreements, at value (cost $1,254,338)		1,254,338
Total investments (cost $228,828,389)		320,542,135
Receivables:
Dividends		726,552
Fund shares sold		181,560
Foreign taxes reclaim		25,954
Securities lending income		8,107
Interest		24
Total assets		321,484,332
Liabilities:
Payable for:
Return of securities loaned		9,078,709
Fund shares redeemed		230,551
Management fees		219,560
Transfer agent and administrative fees		64,576
Distribution and service fees		39,926
Portfolio accounting fees		24,681
Miscellaneous		105,302
Total liabilities		9,763,305
Commitments and contingent liabilities (Note 11)		—
Net assets	$	311,721,027
Net assets consist of:
Paid in capital	$	223,105,545
Undistributed net investment income		1,014,577
Accumulated net realized loss on investments		(4,112,841	)
Net unrealized appreciation on investments		91,713,746
Net assets	$	311,721,027
Investor Class:
Net assets	$	207,683,174
Capital shares outstanding		3,143,648
Net asset value per share	$	66.06
A-Class:
Net assets	$	40,271,501
Capital shares outstanding		657,919
Net asset value per share	$	61.21
Maximum offering price per share (Net asset value divided by 95.25%)	$	64.26
C-Class:
Net assets	$	28,379,825
Capital shares outstanding		525,536
Net asset value per share	$	54.00
H-Class:
Net assets	$	35,386,527
Capital shares outstanding		598,209
Net asset value per share	$	59.15

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $34,578)	$	8,838,190
Income from securities lending, net		74,323
Interest		4,811
Total investment income		8,917,324
Expenses:
Management fees		3,502,238
Transfer agent and administrative fees		1,030,071
Distribution and service fees:
A-Class		123,415
C-Class		292,993
H-Class		146,707
Portfolio accounting fees		371,176
Custodian fees		62,153
Trustees’ fees*		43,320
Line of credit fees		1,082
Miscellaneous		626,651
Total expenses		6,199,806
Net investment income		2,717,518
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		30,636,934
Net realized gain		30,636,934
Net change in unrealized appreciation (depreciation) on:
Investments		(15,544,633	)
Net change in unrealized appreciation (depreciation)		(15,544,633	)
Net realized and unrealized gain		15,092,301
Net increase in net assets resulting from operations	$	17,809,819

* 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.

CONSUMER PRODUCTS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	2,717,518		$	2,837,658
Net realized gain on investments		30,636,934			973,509
Net change in unrealized appreciation (depreciation) on investments		(15,544,633	)		24,512,809
Net increase in net assets resulting from operations		17,809,819			28,323,976
Distributions to shareholders from:
Net investment income
Investor Class		(2,259,234	)		(1,910,579	)
A-Class		(473,017	)		(334,945	)
C-Class		(350,535	)		(184,219	)
H-Class		(619,330	)		(391,960	)*
Net realized gains
Investor Class		(1,131,947	)		(2,901,894	)
A-Class		(236,997	)		(508,733	)
C-Class		(175,629	)		(279,802	)
H-Class		(310,304	)		(595,331	)*
Total distributions to shareholders		(5,556,993	)		(7,107,463	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		276,892,039			350,581,088
A-Class		33,790,536			60,872,986
C-Class		16,171,468			20,783,158
H-Class		114,109,709			167,016,501	*
Distributions reinvested
Investor Class		3,294,770			4,699,482
A-Class		587,359			687,164
C-Class		490,705			448,009
H-Class		886,577			985,550	*
Cost of shares redeemed
Investor Class		(357,313,404	)		(316,067,877	)
A-Class		(49,406,491	)		(43,169,090	)
C-Class		(12,830,920	)		(16,365,257	)
H-Class		(146,843,066	)		(155,233,554	)*
Net increase (decrease) from capital share transactions		(120,170,718	)		75,238,160
Net increase (decrease) in net assets		(107,917,892	)		96,454,673
Net assets:
Beginning of year		419,638,919			323,184,246
End of year	$	311,721,027		$	419,638,919
Undistributed net investment income at end of year	$	1,014,577		$	2,859,776

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

CONSUMER PRODUCTS FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:
Shares sold
Investor Class		4,295,268			5,896,971
A-Class		566,319			1,101,512
C-Class		304,356			420,631
H-Class		2,015,223			3,121,495	*
Shares issued from reinvestment of distributions
Investor Class		54,119			81,887
A-Class		10,403			12,863
C-Class		9,824			9,390
H-Class		16,250			19,078	*
Shares redeemed
Investor Class		(5,607,116	)		(5,385,440	)
A-Class		(835,458	)		(797,084	)
C-Class		(245,971	)		(332,936	)
H-Class		(2,596,061	)		(2,917,566	)*
Net increase (decrease) in shares		(2,012,844	)		1,230,801

* 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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	62.84		$	58.55		$	52.08		$	47.79		$	40.19
Income (loss) from investment operations:
Net investment income (loss)a		.51			.61			.71			.46			.57
Net gain (loss) on investments (realized and unrealized)		3.58			4.92			6.44			5.81			7.14
Total from investment operations		4.09			5.53			7.15			6.27			7.71
Less distributions from:
Net investment income		(.58	)		(.49	)		(.24	)		(.46	)		(.11	)
Net realized gains		(.29	)		(.75	)		(.44	)		(1.52	)		—
Total distributions		(.87	)		(1.24	)		(.68	)		(1.98	)		(.11	)
Net asset value, end of period	$	66.06		$	62.84		$	58.55		$	52.08		$	47.79
Total Returnb		6.62	%		9.65	%		13.77	%		13.24	%		19.26	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	207,683		$	276,578		$	222,954		$	102,231		$	181,945
Ratios to average net assets:
Net investment income (loss)		0.79	%		1.03	%		1.27	%		0.91	%		1.38	%
Total expenses		1.36	%		1.34	%		1.34	%		1.37	%		1.35	%
Portfolio turnover rate		75	%		104	%		87	%		112	%		230	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	58.43		$	54.66		$	48.79		$	45.00		$	37.93
Income (loss) from investment operations:
Net investment income (loss)a		.33			.45			.48			.33			.44
Net gain (loss) on investments (realized and unrealized)		3.32			4.56			6.07			5.44			6.74
Total from investment operations		3.65			5.01			6.55			5.77			7.18
Less distributions from:
Net investment income		(.58	)		(.49	)		(.24	)		(.46	)		(.11	)
Net realized gains		(.29	)		(.75	)		(.44	)		(1.52	)		—
Total distributions		(.87	)		(1.24	)		(.68	)		(1.98	)		(.11	)
Net asset value, end of period	$	61.21		$	58.43		$	54.66		$	48.79		$	45.00
Total Returnb		6.35	%		9.38	%		13.47	%		12.95	%		18.98	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	40,272		$	53,560		$	32,762		$	25,538		$	21,604
Ratios to average net assets:
Net investment income (loss)		0.56	%		0.82	%		0.92	%		0.70	%		1.12	%
Total expenses		1.62	%		1.60	%		1.60	%		1.62	%		1.60	%
Portfolio turnover rate		75	%		104	%		87	%		112	%		230	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	52.04		$	49.18		$	44.29		$	41.32		$	35.11
Income (loss) from investment operations:
Net investment income (loss)a		(.10	)		.03			.09			(.01	)		.13
Net gain (loss) on investments (realized and unrealized)		2.93			4.07			5.48			4.96			6.19
Total from investment operations		2.83			4.10			5.57			4.95			6.32
Less distributions from:
Net investment income		(.58	)		(.49	)		(.24	)		(.46	)		(.11	)
Net realized gains		(.29	)		(.75	)		(.44	)		(1.52	)		—
Total distributions		(.87	)		(1.24	)		(.68	)		(1.98	)		(.11	)
Net asset value, end of period	$	54.00		$	52.04		$	49.18		$	44.29		$	41.32
Total Returnb		5.55	%		8.57	%		12.62	%		12.11	%		18.06	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	28,380		$	23,799		$	17,717		$	14,125		$	11,699
Ratios to average net assets:
Net investment income (loss)		(0.20	%)		0.05	%		0.20	%		(0.02	%)		0.37	%
Total expenses		2.36	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		75	%		104	%		87	%		112	%		230	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	56.50		$	52.94		$	47.39		$	43.87		$	37.08
Income (loss) from investment operations:
Net investment income (loss)a		.31			.39			.37			.24			.35
Net gain (loss) on investments (realized and unrealized)		3.21			4.41			5.86			5.26			6.55
Total from investment operations		3.52			4.80			6.23			5.50			6.90
Less distributions from:
Net investment income		(.58	)		(.49	)		(.24	)		(.46	)		(.11	)
Net realized gains		(.29	)		(.75	)		(.44	)		(1.52	)		—
Total distributions		(.87	)		(1.24	)		(.68	)		(1.98	)		(.11	)
Net asset value, end of period	$	59.15		$	56.50		$	52.94		$	47.39		$	43.87
Total Returnb		6.35	%		9.29	%		13.19	%		12.66	%		18.66	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	35,387		$	65,702		$	49,751		$	27,162		$	10,148
Ratios to average net assets:
Net investment income (loss)		0.54	%		0.72	%		0.74	%		0.51	%		0.93	%
Total expenses		1.61	%		1.66	%		1.85	%		1.87	%		1.85	%
Portfolio turnover rate		75	%		104	%		87	%		112	%		230	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Electronics Fund Investor Class returned 35.41%, compared with 24.91% for the S&P 500 Information Technology Index. The broader S&P 500 Index returned 17.17%.

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

For the period, Fund performance got the biggest boost from NVIDIA Corp., Micron Technology, Inc., and Applied Materials, Inc. Holdings detracting from Fund performance for the period were First Solar, Inc., SunPower Corp. — Class A, and Acacia Communications, 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 26, 2001
H-Class	April 2, 1998

Ten Largest Holdings (% of Total Net Assets)
Intel Corp.	8.0%
Broadcom Ltd.	5.7%
QUALCOMM, Inc.	5.5%
Texas Instruments, Inc.	5.4%
NVIDIA Corp.	4.9%
Applied Materials, Inc.	3.9%
Micron Technology, Inc.	3.6%
Analog Devices, Inc.	3.3%
Lam Research Corp.	2.8%
Skyworks Solutions, Inc.	2.6%
Top Ten Total	45.7%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 43

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	35.41%	14.88%	5.87%
A -Class Shares	35.11%	14.61%	5.59%
A-Class Shares with sales charge†	28.69%	13.50%	5.07%
C-Class Shares	34.09%	13.71%	4.84%
C-Class Shares with CDSC‡	33.09%	13.71%	4.84%
H-Class Shares**	34.98%	14.37%	5.41%
S&P 500 Information Technology Index	24.91%	14.64%	11.35%
S&P 500 Index	17.17%	13.30%	7.51%

*	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.

44 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
ELECTRONICS FUND

	Shares		Value
COMMON STOCKS† - 99.4%
Semiconductors - 93.9%
Intel Corp.		181,159	$	6,534,405
Broadcom Ltd.		21,188		4,639,324
QUALCOMM, Inc.		78,717		4,513,633
Texas Instruments, Inc.		54,721		4,408,324
NVIDIA Corp.		36,943		4,024,201
Applied Materials, Inc.		81,970		3,188,632
Micron Technology, Inc.*		101,812		2,942,367
Analog Devices, Inc.		32,943		2,699,661
Lam Research Corp.		17,606		2,259,906
Skyworks Solutions, Inc.		21,552		2,111,665
Microchip Technology, Inc.		26,776		1,975,533
KLA-Tencor Corp.		20,141		1,914,805
Advanced Micro Devices, Inc.*		131,315		1,910,633
NXP Semiconductor N.V.*		17,932		1,855,962
Xilinx, Inc.		31,869		1,844,896
Maxim Integrated Products, Inc.		39,233		1,763,916
Taiwan Semiconductor Manufacturing Company Ltd. ADR		51,423		1,688,731
Qorvo, Inc.*		21,362		1,464,579
ON Semiconductor Corp.*		81,885		1,268,399
Teradyne, Inc.		39,740		1,235,914
ASML Holding N.V. — Class G		9,232		1,226,010
Marvell Technology Group Ltd.		79,462		1,212,590
Microsemi Corp.*		23,066		1,188,591
Silicon Motion Technology Corp. ADR		23,280		1,088,340
Cavium, Inc.*		15,122		1,083,643
Cypress Semiconductor Corp.		75,959		1,045,196
Mellanox Technologies Ltd.*		20,229		1,030,668
Cirrus Logic, Inc.*		16,315		990,157
Monolithic Power Systems, Inc.		10,423		959,958
MKS Instruments, Inc.		13,753		945,519
Entegris, Inc.*		39,010		912,834
MACOM Technology Solutions Holdings, Inc.*		18,186		878,384
Silicon Laboratories, Inc.*		11,852		871,715
Integrated Device Technology, Inc.*		36,513		864,263
Amkor Technology, Inc.*		72,780		843,520
Semtech Corp.*		21,659		732,074
Inphi Corp.*		14,879		726,393
Cabot Microelectronics Corp.		9,178		703,127
MaxLinear, Inc. — Class A*		24,700		692,835
Power Integrations, Inc.		10,479		688,994
Ambarella, Inc.*,1		12,007		656,903
Synaptics, Inc.*		13,042		645,709
Xperi Corp.		18,083		613,918
Rambus, Inc.*		45,652		599,867
Veeco Instruments, Inc.*		18,400		549,240
Lattice Semiconductor Corp.*		64,790		448,347
Impinj, Inc.*,1		13,200		399,564
Total Semiconductors				76,843,845
Electrical Components & Equipment - 1.5%
Advanced Energy Industries, Inc.*		11,954		819,566
SunPower Corp. — Class A*,1		67,427		411,305
Total Electrical Components & Equipment				1,230,871
Chemicals - 1.1%
Versum Materials, Inc.		29,870		914,022
Building Materials - 1.0%
Cree, Inc.*		29,608		791,422
Telecommunications - 1.0%
Acacia Communications, Inc.*,1		13,300		779,646
Energy-Alternate Sources - 0.9%
First Solar, Inc.*,1		27,730		751,483
Total Common Stocks
(Cost $67,315,166)				81,311,289
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.6%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	514,598		514,598
Total Repurchase Agreement
(Cost $514,598)				514,598
	Shares
SECURITIES LENDING COLLATERAL†,3 - 2.0%
First American Government Obligations Fund — Class Z, 0.61%4		1,654,882		1,654,882
Total Securities Lending Collateral
(Cost $1,654,882)				1,654,882
Total Investments - 102.0%
(Cost $69,484,646)			$	83,480,769
Other Assets & Liabilities, net - (2.0)%				(1,660,787	)
Total Net Assets - 100.0%			$	81,819,982

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 45

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
ELECTRONICS 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	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	81,311,289	$	—	$	—	$	81,311,289
Repurchase Agreement		—		514,598		—		514,598
Securities Lending Collateral		1,654,882		—		—		1,654,882
Total	$	82,966,171	$	514,598	$	—	$	83,480,769

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

ELECTRONICS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,613,030 of securities loaned (cost $68,970,048)	$	82,966,171
Repurchase agreements, at value (cost $514,598)		514,598
Total investments (cost $69,484,646)		83,480,769
Receivables:
Fund shares sold		184,313
Dividends		16,653
Securities lending income		7,492
Interest		10
Total assets		83,689,237
Liabilities:
Payable for:
Return of securities loaned		1,654,882
Fund shares redeemed		87,043
Management fees		60,232
Transfer agent and administrative fees		17,715
Distribution and service fees		8,052
Portfolio accounting fees		7,086
Miscellaneous		34,245
Total liabilities		1,869,255
Commitments and contingent liabilities (Note 11)		—
Net assets	$	81,819,982
Net assets consist of:
Paid in capital	$	76,622,136
Undistributed net investment income		27,832
Accumulated net realized loss on investments		(8,826,109	)
Net unrealized appreciation on investments		13,996,123
Net assets	$	81,819,982
Investor Class:
Net assets	$	51,722,100
Capital shares outstanding		470,202
Net asset value per share	$	110.00
A-Class:
Net assets	$	4,408,306
Capital shares outstanding		42,786
Net asset value per share	$	103.03
Maximum offering price per share (Net asset value divided by 95.25%)	$	108.17
C-Class:
Net assets	$	2,555,649
Capital shares outstanding		27,217
Net asset value per share	$	93.90
H-Class:
Net assets	$	23,133,927
Capital shares outstanding		230,570
Net asset value per share	$	100.33

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $519)	$	661,473
Income from securities lending, net		36,521
Interest		868
Total investment income		698,862
Expenses:
Management fees		386,576
Transfer agent and administrative fees		113,699
Distribution and service fees:
A-Class		5,953
C-Class		13,251
H-Class		23,940
Portfolio accounting fees		45,479
Custodian fees		6,478
Trustees’ fees*		3,268
Line of credit fees		595
Miscellaneous		71,791
Total expenses		671,030
Net investment income		27,832
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		1,912,633
Net realized gain		1,912,633
Net change in unrealized appreciation (depreciation) on:
Investments		8,829,509
Net change in unrealized appreciation (depreciation)		8,829,509
Net realized and unrealized gain		10,742,142
Net increase in net assets resulting from operations	$	10,769,974

* 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

ELECTRONICS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	27,832		$	(48,472	)
Net realized gain (loss) on investments		1,912,633			(613,224	)
Net change in unrealized appreciation (depreciation) on investments		8,829,509			(2,220,822	)
Net increase (decrease) in net assets resulting from operations		10,769,974			(2,882,518	)
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		256,339,415			83,406,696
A-Class		11,788,211			14,991,695
C-Class		4,290,342			13,427,149
H-Class		135,688,569			136,348,968	*
Distributions reinvested
Investor Class		—			16,547
A-Class		—			925
C-Class		—			1,387
H-Class		—			18,915	*
Cost of shares redeemed
Investor Class		(221,085,468	)		(91,725,809	)
A-Class		(9,887,302	)		(14,864,321	)
C-Class		(2,834,033	)		(13,783,514	)
H-Class		(125,204,966	)		(130,346,155	)*
Net increase (decrease) from capital share transactions		49,094,768			(2,507,517	)
Net increase (decrease) in net assets		59,864,742			(5,432,448	)
Net assets:
Beginning of year		21,955,240			27,387,688
End of year	$	81,819,982		$	21,955,240
Undistributed net investment income at end of year	$	27,832		$	—
Capital share activity:
Shares sold
Investor Class		2,814,942			1,040,573
A-Class		134,060			198,666
C-Class		53,496			195,375
H-Class		1,726,169			1,832,769	*
Shares issued from reinvestment of distributions
Investor Class		—			213
A-Class		—			13
C-Class		—			21
H-Class		—			266	*
Shares redeemed
Investor Class		(2,445,893	)		(1,156,806	)
A-Class		(114,387	)		(196,930	)
C-Class		(36,554	)		(202,714	)
H-Class		(1,647,057	)		(1,763,553	)*
Net increase (decrease) in shares		484,776			(52,107	)

* 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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	81.23		$	83.54		$	69.82		$	52.11		$	55.09
Income (loss) from investment operations:
Net investment income (loss)a		.15			.02			.29			(.04	)		.22
Net gain (loss) on investments (realized and unrealized)		28.62			(2.20	)		13.43			17.79			(3.20	)
Total from investment operations		28.77			(2.18	)		13.72			17.75			(2.98	)
Less distributions from:
Net investment income		—			(.13	)		—			(.04	)		—
Total distributions		—			(.13	)		—			(.04	)		—
Net asset value, end of period	$	110.00		$	81.23		$	83.54		$	69.82		$	52.11
Total Returnb		35.41	%		(2.61	%)		19.65	%		34.07	%		(5.41	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	51,722		$	8,217		$	18,144		$	9,655		$	2,942
Ratios to average net assets:
Net investment income (loss)		0.16	%		0.02	%		0.38	%		(0.07	%)		0.45	%
Total expenses		1.38	%		1.34	%		1.35	%		1.37	%		1.35	%
Portfolio turnover rate		643	%		769	%		562	%		1,436	%		1,640	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	76.25		$	78.62		$	65.87		$	49.29		$	52.23
Income (loss) from investment operations:
Net investment income (loss)a		(.18	)		(.20	)		(.17	)		(.33	)		.24
Net gain (loss) on investments (realized and unrealized)		26.96			(2.04	)		12.92			16.95			(3.18	)
Total from investment operations		26.78			(2.24	)		12.75			16.62			(2.94	)
Less distributions from:
Net investment income		—			(.13	)		—			(.04	)		—
Total distributions		—			(.13	)		—			(.04	)		—
Net asset value, end of period	$	103.03		$	76.25		$	78.62		$	65.87		$	49.29
Total Returnb		35.11	%		(2.84	%)		19.36	%		33.72	%		(5.63	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,408		$	1,762		$	1,680		$	5,329		$	299
Ratios to average net assets:
Net investment income (loss)		(0.19	%)		(0.26	%)		(0.24	%)		(0.59	%)		0.51	%
Total expenses		1.63	%		1.60	%		1.61	%		1.62	%		1.60	%
Portfolio turnover rate		643	%		769	%		562	%		1,436	%		1,640	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	70.02		$	72.76		$	61.40		$	46.32		$	49.50
Income (loss) from investment operations:
Net investment income (loss)a		(.69	)		(.63	)		(.35	)		(.54	)		(.18	)
Net gain (loss) on investments (realized and unrealized)		24.57			(1.98	)		11.71			15.66			(3.00	)
Total from investment operations		23.88			(2.61	)		11.36			15.12			(3.18	)
Less distributions from:
Net investment income		—			(.13	)		—			(.04	)		—
Total distributions		—			(.13	)		—			(.04	)		—
Net asset value, end of period	$	93.90		$	70.02		$	72.76		$	61.40		$	46.32
Total Returnb		34.09	%		(3.58	%)		18.50	%		32.65	%		(6.44	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,556		$	719		$	1,280		$	1,043		$	667
Ratios to average net assets:
Net investment income (loss)		(0.85	%)		(0.91	%)		(0.55	%)		(1.03	%)		(0.41	%)
Total expenses		2.38	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		643	%		769	%		562	%		1,436	%		1,640	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	74.32		$	76.66		$	64.40		$	48.33		$	51.40
Income (loss) from investment operations:
Net investment income (loss)a		(.08	)		(.30	)		.06			(.17	)		(.12	)
Net gain (loss) on investments (realized and unrealized)		26.09			(1.91	)		12.20			16.28			(2.95	)
Total from investment operations		26.01			(2.21	)		12.26			16.11			(3.07	)
Less distributions from:
Net investment income		—			(.13	)		—			(.04	)		—
Total distributions		—			(.13	)		—			(.04	)		—
Net asset value, end of period	$	100.33		$	74.32		$	76.66		$	64.40		$	48.33
Total Returnb		34.98	%		(2.88	%)		19.04	%		33.34	%		(5.97	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	23,134		$	11,257		$	6,285		$	3,577		$	1,288
Ratios to average net assets:
Net investment income (loss)		(0.09	%)		(0.40	%)		0.09	%		(0.29	%)		(0.26	%)
Total expenses		1.63	%		1.74	%		1.85	%		1.87	%		1.85	%
Portfolio turnover rate		643	%		769	%		562	%		1,436	%		1,640	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Energy Fund Investor Class returned 18.99%, compared with 14.26% for the S&P 500 Energy Index. The broader S&P 500 Index returned 17.17%.

The oil & gas exploration & production industry was the leading contributor to return, followed by the oil & gas storage & transportation industry. No industry detracted. The coal & consumable fuels industry contributed least, followed by the oil & gas refining & marketing industry.

Williams Companies, Inc., Chevron Corp., and Devon Energy Corp. were among the most significant positive contributors to Fund performance for the period. Holdings detracting the most from performance were Noble Corp. plc, Gulfport Energy Corp., and PBF Energy, 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 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.	5.7%
Chevron Corp.	4.4%
Schlumberger Ltd.	3.2%
ConocoPhillips	2.5%
EOG Resources, Inc.	2.4%
Kinder Morgan, Inc.	2.2%
Occidental Petroleum Corp.	2.2%
Halliburton Co.	2.0%
Phillips 66	2.0%
Anadarko Petroleum Corp.	1.8%
Top Ten Total	28.4%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 51

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	18.99%	-3.46%	-0.39%
A-Class Shares	18.65%	-3.68%	-0.64%
A-Class Shares with sales charge†	13.02%	-4.62%	-1.12%
C-Class Shares	17.76%	-4.43%	-1.38%
C-Class Shares with CDSC‡	16.76%	-4.43%	-1.38%
H-Class Shares**	18.57%	-3.88%	-0.85%
S&P 500 Energy Index	14.26%	1.72%	3.36%
S&P 500 Index	17.17%	13.30%	7.51%

*	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.

52 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
ENERGY FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Oil & Gas - 71.1%
Exxon Mobil Corp.		25,132	$	2,061,076
Chevron Corp.		14,865		1,596,055
ConocoPhillips		18,341		914,665
EOG Resources, Inc.		8,739		852,488
Occidental Petroleum Corp.		12,342		781,988
Phillips 66		9,053		717,178
Anadarko Petroleum Corp.		10,561		654,782
Pioneer Natural Resources Co.		3,396		632,437
Valero Energy Corp.		9,091		602,642
Marathon Petroleum Corp.		11,389		575,600
Devon Energy Corp.		12,745		531,721
Apache Corp.		9,650		495,914
Concho Resources, Inc.*		3,783		485,510
BP plc ADR		13,743		474,408
Continental Resources, Inc.*		10,279		466,872
Hess Corp.		9,089		438,181
Noble Energy, Inc.1		12,755		438,007
Petroleo Brasileiro S.A. ADR*		44,538		431,573
Marathon Oil Corp.		26,124		412,760
Encana Corp.		33,974		397,836
Cabot Oil & Gas Corp. — Class A		16,460		393,559
Equities Corp.		6,177		377,415
Cimarex Energy Co.		3,150		376,394
Transocean Ltd.*,1		29,763		370,550
Royal Dutch Shell plc — Class A ADR		7,020		370,165
Parsley Energy, Inc. — Class A*		10,536		342,525
Diamondback Energy, Inc.*		3,282		340,393
Ensco plc — Class A		37,719		337,585
Tesoro Corp.		4,136		335,264
Newfield Exploration Co.*		8,477		312,886
Range Resources Corp.		10,657		310,119
Helmerich & Payne, Inc.1		4,491		298,966
RSP Permian, Inc.*		7,139		295,769
Antero Resources Corp.*		12,962		295,663
Canadian Natural Resources Ltd.		8,686		284,814
Suncor Energy, Inc.		9,131		280,778
Chesapeake Energy Corp.*,1		45,638		271,090
Noble Corporation plc		43,660		270,255
WPX Energy, Inc.*		20,033		268,242
Energen Corp.*		4,862		264,687
Rice Energy, Inc.*		11,161		264,516
Murphy Oil Corp.		8,935		255,452
HollyFrontier Corp.		8,793		249,194
Southwestern Energy Co.*		28,465		232,559
PDC Energy, Inc.*		3,587		223,649
Laredo Petroleum, Inc.*		15,096		220,402
Patterson-UTI Energy, Inc.		8,981		217,969
Oasis Petroleum, Inc.*		15,276		217,836
Nabors Industries Ltd.		16,317		213,263
Western Refining, Inc.		6,077		213,120
Whiting Petroleum Corp.*		22,361		211,535
Extraction Oil & Gas, Inc.*		11,030		204,607
SM Energy Co.		8,170		196,243
Callon Petroleum Co.*		14,620		192,399
QEP Resources, Inc.*		14,994		190,574
Gulfport Energy Corp.*		10,958		188,368
Clayton Williams Energy, Inc.*		1,351		178,440
Matador Resources Co.*		7,433		176,831
Diamond Offshore Drilling, Inc.*,1		10,449		174,603
PBF Energy, Inc. — Class A		7,868		174,434
Rowan Companies plc — Class A*		10,342		161,128
SRC Energy, Inc.*		18,234		153,895
Carrizo Oil & Gas, Inc.*		5,364		153,732
Statoil ASA ADR1		8,040		138,127
Delek US Holdings, Inc.		5,450		132,272
Resolute Energy Corp.*,1		2,551		103,060
Atwood Oceanics, Inc.*,1		10,462		99,703
Sanchez Energy Corp.*,1		10,300		98,262
California Resources Corp.*		5,984		89,999
Total Oil & Gas				25,684,984
Oil & Gas Services - 13.9%
Schlumberger Ltd.		14,834		1,158,535
Halliburton Co.		14,663		721,566
Baker Hughes, Inc.		9,526		569,845
National Oilwell Varco, Inc.		11,003		441,110
TechnipFMC plc*		10,344		336,180
Weatherford International plc*		45,067		299,696
RPC, Inc.1		12,180		223,016
Oceaneering International, Inc.		6,914		187,231
Core Laboratories N.V.		1,619		187,027
Superior Energy Services, Inc.*		12,122		172,860
Dril-Quip, Inc.*		2,980		162,559
Forum Energy Technologies, Inc.*		7,555		156,389
Oil States International, Inc.*		4,459		147,816
McDermott International, Inc.*		21,577		145,645
Helix Energy Solutions Group, Inc.*		15,972		124,102
Total Oil & Gas Services				5,033,577
Pipelines - 10.4%
Kinder Morgan, Inc.		36,080		784,379
Enbridge, Inc.		13,543		566,639
Williams Companies, Inc.		19,074		564,400
ONEOK, Inc.		7,067		391,794
Targa Resources Corp.		6,540		391,746
Cheniere Energy, Inc.*		8,062		381,091
Plains GP Holdings LP — Class A		10,671		333,575
SemGroup Corp. — Class A		4,870		175,320
TransCanada Corp.		3,698		170,663
Total Pipelines				3,759,607
Coal - 1.1%
CONSOL Energy, Inc.*		13,928		233,712
Arch Coal, Inc. — Class A*		2,120		146,153
Total Coal				379,865
Mining - 1.0%
U.S. Silica Holdings, Inc.		4,621		221,762
Fairmount Santrol Holdings, Inc.*		19,840		145,427
Total Mining				367,189

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 53

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
ENERGY FUND

	Shares		Value
Metal Fabricate & Hardware - 0.7%
Tenaris S.A. ADR		7,605	$	259,635
Transportation - 0.6%
Golar LNG Ltd.1		7,279		203,302
Retail - 0.5%
World Fuel Services Corp.		4,869		176,501
Energy-Alternate Sources - 0.3%
Green Plains, Inc.		4,477		110,806
Total Common Stocks
(Cost $31,254,295)				35,975,466
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.4%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	160,429		160,429
Total Repurchase Agreement
(Cost $160,429)				160,429
		Shares
SECURITIES LENDING COLLATERAL†,3 - 4.6%
First American Government Obligations Fund — Class Z, 0.61%4		1,670,575	$	1,670,575
Total Securities Lending Collateral
(Cost $1,670,575)				1,670,575
Total Investments - 104.6%
(Cost $33,085,299)			$	37,806,470
Other Assets & Liabilities, net - (4.6)%				(1,654,272	)
Total Net Assets - 100.0%			$	36,152,198

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	35,975,466	$	—	$	—	$	35,975,466
Repurchase Agreement		—		160,429		—		160,429
Securities Lending Collateral		1,670,575		—		—		1,670,575
Total	$	37,646,041	$	160,429	$	—	$	37,806,470

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

ENERGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,640,242 of securities loaned (cost $32,924,870)	$	37,646,041
Repurchase agreements, at value (cost $160,429)		160,429
Total investments (cost $33,085,299)		37,806,470
Cash		10,228
Receivables:
Fund shares sold		669,525
Dividends		30,949
Securities lending income		307
Interest		3
Total assets		38,517,482
Liabilities:
Payable for:
Return of securities loaned		1,670,575
Securities purchased		581,695
Fund shares redeemed		51,707
Management fees		31,209
Transfer agent and administrative fees		9,179
Distribution and service fees		6,747
Portfolio accounting fees		3,672
Miscellaneous		10,500
Total liabilities		2,365,284
Commitments and contingent liabilities (Note 11)		—
Net assets	$	36,152,198
Net assets consist of:
Paid in capital	$	39,985,648
Undistributed net investment income		216,907
Accumulated net realized loss on investments		(8,771,528	)
Net unrealized appreciation on investments		4,721,171
Net assets	$	36,152,198
Investor Class:
Net assets	$	24,284,062
Capital shares outstanding		308,432
Net asset value per share	$	78.73
A-Class:
Net assets	$	4,980,299
Capital shares outstanding		67,431
Net asset value per share	$	73.86
Maximum offering price per share (Net asset value divided by 95.25%)	$	77.54
C-Class:
Net assets	$	4,331,460
Capital shares outstanding		65,533
Net asset value per share	$	66.10
H-Class:
Net assets	$	2,556,377
Capital shares outstanding		35,666
Net asset value per share	$	71.68

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $12,621)	$	1,112,951
Income from securities lending, net		4,125
Interest		864
Total investment income		1,117,940
Expenses:
Management fees		505,306
Transfer agent and administrative fees		148,620
Distribution and service fees:
A-Class		19,436
C-Class		49,775
H-Class		13,520
Portfolio accounting fees		59,447
Custodian fees		8,806
Trustees’ fees*		5,248
Line of credit fees		245
Miscellaneous		90,630
Total expenses		901,033
Net investment income		216,907
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		16,836,670
Net realized gain		16,836,670
Net change in unrealized appreciation (depreciation) on:
Investments		(7,539,822	)
Net change in unrealized appreciation (depreciation)		(7,539,822	)
Net realized and unrealized gain		9,296,848
Net increase in net assets resulting from operations	$	9,513,755

* 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 | 55

ENERGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	216,907		$	476,798
Net realized gain (loss) on investments		16,836,670			(15,081,328	)
Net change in unrealized appreciation (depreciation) on investments		(7,539,822	)		(4,158,406	)
Net increase (decrease) in net assets resulting from operations		9,513,755			(18,762,936	)
Distributions to shareholders from:
Net investment income
Investor Class		(351,546	)		(242,198	)
A-Class		(49,747	)		(32,840	)
C-Class		(41,247	)		(41,958	)
H-Class		(34,258	)		(17,380	)*
Net realized gains
Investor Class		—			(267,745	)
A-Class		—			(36,304	)
C-Class		—			(46,384	)
H-Class		—			(19,214	)*
Total distributions to shareholders		(476,798	)		(704,023	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		493,753,144			150,597,823
A-Class		16,971,738			36,665,768
C-Class		3,666,194			10,483,191
H-Class		171,920,788			121,269,635	*
Distributions reinvested
Investor Class		348,105			504,502
A-Class		48,237			63,735
C-Class		40,264			86,557
H-Class		34,251			36,578	*
Cost of shares redeemed
Investor Class		(498,261,928	)		(144,378,187	)
A-Class		(19,236,171	)		(32,806,713	)
C-Class		(4,323,277	)		(11,203,791	)
H-Class		(173,329,752	)		(122,368,423	)*
Net increase (decrease) from capital share transactions		(8,368,407	)		8,950,675
Net increase (decrease) in net assets		668,550			(10,516,284	)
Net assets:
Beginning of year		35,483,648			45,999,932
End of year	$	36,152,198		$	35,483,648
Undistributed net investment income at end of year	$	216,907		$	476,798

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

ENERGY FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:**
Shares sold
Investor Class		6,399,342			1,809,980
A-Class		236,733			486,100
C-Class		56,272			151,465
H-Class		2,421,978			1,772,212	*
Shares issued from reinvestment of distributions
Investor Class		4,391			6,687
A-Class		648			898
C-Class		603			1,348
H-Class		474			530	*
Shares redeemed
Investor Class		(6,428,844	)		(1,785,596	)
A-Class		(270,062	)		(440,104	)
C-Class		(65,587	)		(163,063	)
H-Class		(2,432,686	)		(1,802,431	)*
Net increase (decrease) in shares		(76,738	)		38,026

*	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
**	Capital share activity for the periods presented through March 31, 2017, has been restated to reflect a 1:4 reverse share split effective November 7, 2016 — See Note 10.

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	66.61		$	92.98		$	118.79		$	104.48		$	98.30
Income (loss) from investment operations:
Net investment income (loss)a		.40			1.12			.84			.60			.48
Net gain (loss) on investments (realized and unrealized)		12.24			(26.37	)		(26.21	)		13.71			7.58
Total from investment operations		12.64			(25.25	)		(25.37	)		14.31			8.06
Less distributions from:
Net investment income		(.52	)		(.52	)		(.44	)		—			(.28	)
Net realized gains		—			(.60	)		—			—			—
Return of capital		—			—			—			—			(1.60	)
Total distributions		(.52	)		(1.12	)		(.44	)		—			(1.88	)
Net asset value, end of period	$	78.73		$	66.61		$	92.98		$	118.79		$	104.48
Total Returnb		18.99	%		(27.30	%)		(21.42	%)		13.71	%		8.50	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	24,284		$	22,216		$	28,123		$	35,546		$	49,160
Ratios to average net assets:
Net investment income (loss)		0.52	%		1.38	%		0.72	%		0.55	%		0.52	%
Total expenses		1.37	%		1.35	%		1.35	%		1.37	%		1.35	%
Portfolio turnover rate		996	%		595	%		463	%		231	%		248	%

A-Class	Year Ended March 31, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	62.67		$	87.76		$	112.30		$	99.06		$	93.54
Income (loss) from investment operations:
Net investment income (loss)a		.23			.76			.48			.32			.32
Net gain (loss) on investments (realized and unrealized)		11.48			(24.73	)		(24.58	)		12.92			7.08
Total from investment operations		11.71			(23.97	)		(24.10	)		13.24			7.40
Less distributions from:
Net investment income		(.52	)		(.52	)		(.44	)		—			(.28	)
Net realized gains		—			(.60	)		—			—			—
Return of capital		—			—			—			—			(1.60	)
Total distributions		(.52	)		(1.12	)		(.44	)		—			(1.88	)
Net asset value, end of period	$	73.86		$	62.67		$	87.76		$	112.30		$	99.06
Total Returnb		18.65	%		(27.46	%)		(21.49	%)		13.37	%		8.20	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,980		$	6,274		$	4,671		$	6,624		$	5,586
Ratios to average net assets:
Net investment income (loss)		0.31	%		1.02	%		0.43	%		0.30	%		0.38	%
Total expenses		1.62	%		1.60	%		1.60	%		1.62	%		1.60	%
Portfolio turnover rate		996	%		595	%		463	%		231	%		248	%

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	56.55		$	79.93		$	103.21		$	91.72		$	87.40
Income (loss) from investment operations:
Net investment income (loss)a		(.29	)		.08			(.20	)		(.48	)		(.36	)
Net gain (loss) on investments (realized and unrealized)		10.36			(22.34	)		(22.64	)		11.97			6.56
Total from investment operations		10.07			(22.26	)		(22.84	)		11.49			6.20
Less distributions from:
Net investment income		(.52	)		(.52	)		(.44	)		—			(.28	)
Net realized gains		—			(.60	)		—			—			—
Return of capital		—			—			—			—			(1.60	)
Total distributions		(.52	)		(1.12	)		(.44	)		—			(1.88	)
Net asset value, end of period	$	66.10		$	56.55		$	79.93		$	103.21		$	91.72
Total Returnb		17.76	%		(28.01	%)		(22.18	%)		12.52	%		7.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,331		$	4,198		$	6,754		$	8,357		$	9,693
Ratios to average net assets:
Net investment income (loss)		(0.45	%)		0.15	%		(0.20	%)		(0.52	%)		(0.45	%)
Total expenses		2.37	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		996	%		595	%		463	%		231	%		248	%

H-Class	Year Ended March 31, 2017c			Year Ended March 31, 2016c,d			Year Ended March 31, 2015c,d			Year Ended March 31, 2014c,d			Year Ended March 28, 2013c,d
Per Share Data
Net asset value, beginning of period	$	60.90		$	85.36		$	109.61		$	96.92		$	91.78
Income (loss) from investment operations:
Net investment income (loss)a		.02			.40			.28			(.08	)		.04
Net gain (loss) on investments (realized and unrealized)		11.28			(23.74	)		(24.09	)		12.77			6.98
Total from investment operations		11.30			(23.34	)		(23.81	)		12.69			7.02
Less distributions from:
Net investment income		(.52	)		(.52	)		(.44	)		—			(.28	)
Net realized gains		—			(.60	)		—			—			—
Return of capital		—			—			—			—			(1.60	)
Total distributions		(.52	)		(1.12	)		(.44	)		—			(1.88	)
Net asset value, end of period	$	71.68		$	60.90		$	85.36		$	109.61		$	96.92
Total Returnb		18.57	%		(27.53	%)		(21.76	%)		13.08	%		7.92	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,556		$	2,795		$	6,452		$	4,764		$	5,272
Ratios to average net assets:
Net investment income (loss)		0.03	%		0.55	%		0.27	%		(0.09	%)		0.06	%
Total expenses		1.63	%		1.70	%		1.85	%		1.87	%		1.85	%
Portfolio turnover rate		996	%		595	%		463	%		231	%		248	%

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 March 31, 2017 have been restated to reflect a 1:4 reverse share split effective November 7, 2016 — See Note 10.
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 | 59

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Energy Services Fund Investor Class returned 14.38%, compared with the S&P 500 Energy Index, which returned 14.26%. The broader S&P 500 Index returned 17.17%.

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

Halliburton Co., Baker Hughes, Inc., and U.S. Silica Holdings, Inc. were the Fund’s best-performing holdings for the period. The Fund’s worst-performing holdings included Noble Corp. plc, Seadrill Ltd., and Weatherford International plc.

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.	9.3%
Baker Hughes, Inc.	7.3%
National Oilwell Varco, Inc.	5.7%
Transocean Ltd.	4.4%
TechnipFMC plc	3.9%
Helmerich & Payne, Inc.	3.9%
Weatherford International plc	3.4%
Ensco plc — Class A	3.1%
RPC, Inc.	2.9%
Top Ten Total	58.8%

“Ten Largest Holdings” excludes any temporary cash investments.

60 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	14.38%	-8.38%	-3.62%
A-Class Shares	14.09%	-8.60%	-3.85%
A-Class Shares with sales charge†	8.67%	-9.49%	-4.32%
C-Class Shares	13.22%	-9.29%	-4.58%
C-Class Shares with CDSC‡	12.22%	-9.29%	-4.58%
H-Class Shares**	14.02%	-8.79%	-4.07%
S&P 500 Energy Index	14.26%	1.72%	3.36%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 | 61

SCHEDULE OF INVESTMENTS	March 31, 2017
ENERGY SERVICES FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Oil & Gas Services - 64.5%
Schlumberger Ltd.		39,232	$	3,064,019
Halliburton Co.		38,783		1,908,511
Baker Hughes, Inc.		25,133		1,503,456
National Oilwell Varco, Inc.		29,048		1,164,535
TechnipFMC plc*		24,705		802,913
Weatherford International plc*		104,866		697,359
RPC, Inc.1		32,153		588,721
Oceaneering International, Inc.		18,245		494,075
Superior Energy Services, Inc.*		31,983		456,078
Dril-Quip, Inc.*		7,840		427,672
Forum Energy Technologies, Inc.*		20,302		420,251
Oil States International, Inc.*		11,802		391,236
McDermott International, Inc.*		56,971		384,554
Core Laboratories N.V.		3,256		376,133
Helix Energy Solutions Group, Inc.*		42,228		328,112
Bristow Group, Inc.		14,928		227,055
Total Oil & Gas Services				13,234,680
Oil & Gas - 27.0%
Transocean Ltd.*		72,515		902,812
Helmerich & Payne, Inc.		11,889		791,451
Ensco plc — Class A		70,687		632,649
Patterson-UTI Energy, Inc.		23,717		575,612
Noble Corporation plc		92,801		574,438
Nabors Industries Ltd.		43,148		563,944
Diamond Offshore Drilling, Inc.*,1		27,488		459,324
Rowan Companies plc — Class A*		27,304		425,396
Unit Corp.*		14,030		338,965
Atwood Oceanics, Inc.*		27,623		263,247
Total Oil & Gas				5,527,838
Mining - 4.7%
U.S. Silica Holdings, Inc.		12,243		587,541
Fairmount Santrol Holdings, Inc.*		52,375		383,909
Total Mining				971,450
Metal Fabricate & Hardware - 2.9%
Tenaris S.A. ADR		17,129		584,784
Transportation - 0.4%
Hornbeck Offshore Services, Inc.*,1		18,567		82,252
Total Common Stocks
(Cost $18,737,045)				20,401,004
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.5%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	97,972		97,972
Total Repurchase Agreement
(Cost $97,972)				97,972
	Shares
SECURITIES LENDING COLLATERAL†,3 - 2.6%
First American Government Obligations Fund — Class Z, 0.61%4		527,989		527,989
Total Securities Lending Collateral
(Cost $527,989)				527,989
Total Investments - 102.6%
(Cost $19,363,006)			$	21,026,965
Other Assets & Liabilities, net - (2.6)%				(523,322	)
Total Net Assets - 100.0%			$	20,503,643

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	ADR — American Depositary Receipt
	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, 2017
ENERGY SERVICES FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	20,401,004	$	—	$	—	$	20,401,004
Repurchase Agreement		—		97,972		—		97,972
Securities Lending Collateral		527,989		—		—		527,989
Total	$	20,928,993	$	97,972	$	—	$	21,026,965

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, 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, 2017

Assets:
Investments, at value - including $528,142 of securities loaned (cost $19,265,034)	$	20,928,993
Repurchase agreements, at value (cost $97,972)		97,972
Total investments (cost $19,363,006)		21,026,965
Receivables:
Securities sold		704,705
Dividends		38,397
Fund shares sold		5,033
Securities lending income		366
Total assets		21,775,466
Liabilities:
Payable for:
Fund shares redeemed		697,520
Return of securities loaned		527,989
Management fees		17,308
Transfer agent and administrative fees		5,091
Distribution and service fees		4,327
Portfolio accounting fees		2,036
Miscellaneous		17,552
Total liabilities		1,271,823
Commitments and contingent liabilities (Note 11)		—
Net assets	$	20,503,643
Net assets consist of:
Paid in capital	$	38,294,726
Accumulated net investment loss		(19,392	)
Accumulated net realized loss on investments		(19,435,650	)
Net unrealized appreciation on investments		1,663,959
Net assets	$	20,503,643
Investor Class:
Net assets	$	11,756,743
Capital shares outstanding		364,675
Net asset value per share	$	32.24
A-Class:
Net assets	$	1,295,404
Capital shares outstanding		42,624
Net asset value per share	$	30.39
Maximum offering price per share (Net asset value divided by 95.25%)	$	31.91
C-Class:
Net assets	$	3,258,017
Capital shares outstanding		118,717
Net asset value per share	$	27.44
H-Class:
Net assets	$	4,193,479
Capital shares outstanding		142,277
Net asset value per share	$	29.47

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $2,767)	$	345,968
Income from securities lending, net		5,215
Interest		371
Total investment income		351,554
Expenses:
Management fees		222,679
Transfer agent and administrative fees		65,494
Distribution and service fees:
A-Class		4,771
C-Class		28,759
H-Class		14,991
Portfolio accounting fees		26,197
Custodian fees		3,973
Trustees’ fees*		1,936
Line of credit fees		296
Miscellaneous		40,293
Total expenses		409,389
Net investment loss		(57,835	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		2,496,264
Net realized gain		2,496,264
Net change in unrealized appreciation (depreciation) on:
Investments		(5,748,250	)
Net change in unrealized appreciation (depreciation)		(5,748,250	)
Net realized and unrealized loss		(3,251,986	)
Net decrease in net assets resulting from operations	$	(3,309,821	)

* 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.

ENERGY SERVICES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(57,835	)	$	125,275
Net realized gain (loss) on investments		2,496,264			(4,376,432	)
Net change in unrealized appreciation (depreciation) on investments		(5,748,250	)		(3,821,798	)
Net decrease in net assets resulting from operations		(3,309,821	)		(8,072,955	)
Distributions to shareholders from:
Net investment income
Investor Class		(72,838	)		(130,036	)
A-Class		(10,527	)		(22,719	)
C-Class		(24,559	)		(36,447	)
H-Class		(17,351	)		(42,281	)*
Total distributions to shareholders		(125,275	)		(231,483	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		263,468,153			88,241,476
A-Class		8,139,379			22,986,249
C-Class		2,698,788			7,557,655
H-Class		250,508,623			206,028,733	*
Distributions reinvested
Investor Class		70,070			126,359
A-Class		10,195			22,184
C-Class		24,152			36,117
H-Class		17,345			42,273	*
Cost of shares redeemed
Investor Class		(260,388,533	)		(90,245,009	)
A-Class		(9,647,003	)		(22,683,979	)
C-Class		(2,189,013	)		(7,871,938	)
H-Class		(245,387,042	)		(204,714,157	)*
Net increase (decrease) from capital share transactions		7,325,114			(474,037	)
Net increase (decrease) in net assets		3,890,018			(8,778,475	)
Net assets:
Beginning of year		16,613,625			25,392,100
End of year	$	20,503,643		$	16,613,625
Accumulated net investment loss/Undistributed net investment income at end of year	$	(19,392	)	$	125,275
Capital share activity:
Shares sold
Investor Class		8,714,449			2,540,657
A-Class		268,911			622,276
C-Class		95,397			251,887
H-Class		8,533,238			6,776,423	*
Shares issued from reinvestment of distributions
Investor Class		2,229			3,947
A-Class		344			733
C-Class		899			1,305
H-Class		603			1,438	*
Shares redeemed
Investor Class		(8,687,119	)		(2,619,654	)
A-Class		(332,719	)		(611,902	)
C-Class		(81,589	)		(262,624	)
H-Class		(8,456,785	)		(6,762,627	)*
Net increase (decrease) in shares		57,858			(58,141	)

* 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	28.41		$	39.36		$	62.43		$	54.43		$	50.87
Income (loss) from investment operations:
Net investment income (loss)a		.01			.29			.48			.02			(.05	)
Net gain (loss) on investments (realized and unrealized)		4.07			(10.90	)		(23.55	)		7.98			3.61
Total from investment operations		4.08			(10.61	)		(23.07	)		8.00			3.56
Less distributions from:
Net investment income		(.25	)		(.34	)		—			—			—
Total distributions		(.25	)		(.34	)		—			—			—
Net asset value, end of period	$	32.24		$	28.41		$	39.36		$	62.43		$	54.43
Total Returnb		14.38	%		(27.05	%)		(36.95	%)		14.70	%		7.00	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	11,757		$	9,521		$	16,144		$	33,244		$	26,097
Ratios to average net assets:
Net investment income (loss)		0.03	%		0.83	%		0.86	%		0.03	%		(0.10	%)
Total expenses		1.38	%		1.35	%		1.36	%		1.37	%		1.35	%
Portfolio turnover rate		1,830	%		1,241	%		494	%		350	%		275	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	26.86		$	37.32		$	59.34		$	51.86		$	48.59
Income (loss) from investment operations:
Net investment income (loss)a		(.14	)		.24			.25			(.13	)		(.17	)
Net gain (loss) on investments (realized and unrealized)		3.92			(10.36	)		(22.27	)		7.61			3.44
Total from investment operations		3.78			(10.12	)		(22.02	)		7.48			3.27
Less distributions from:
Net investment income		(.25	)		(.34	)		—			—			—
Total distributions		(.25	)		(.34	)		—			—			—
Net asset value, end of period	$	30.39		$	26.86		$	37.32		$	59.34		$	51.86
Total Returnb		14.09	%		(27.22	%)		(37.11	%)		14.42	%		6.73	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,295		$	2,849		$	3,545		$	7,557		$	5,535
Ratios to average net assets:
Net investment income (loss)		(0.47	%)		0.73	%		0.47	%		(0.23	%)		(0.37	%)
Total expenses		1.62	%		1.59	%		1.60	%		1.62	%		1.60	%
Portfolio turnover rate		1,830	%		1,241	%		494	%		350	%		275	%

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	24.46		$	34.28		$	54.92		$	48.37		$	45.66
Income (loss) from investment operations:
Net investment income (loss)a		(.33	)		(.05	)		(.12	)		(.50	)		(.49	)
Net gain (loss) on investments (realized and unrealized)		3.56			(9.43	)		(20.52	)		7.05			3.20
Total from investment operations		3.23			(9.48	)		(20.64	)		6.55			2.71
Less distributions from:
Net investment income		(.25	)		(.34	)		—			—			—
Total distributions		(.25	)		(.34	)		—			—			—
Net asset value, end of period	$	27.44		$	24.46		$	34.28		$	54.92		$	48.37
Total Returnb		13.22	%		(27.76	%)		(37.58	%)		13.54	%		5.94	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,258		$	2,544		$	3,889		$	8,616		$	8,654
Ratios to average net assets:
Net investment income (loss)		(1.23	%)		(0.16	%)		(0.24	%)		(0.97	%)		(1.11	%)
Total expenses		2.37	%		2.35	%		2.36	%		2.37	%		2.35	%
Portfolio turnover rate		1,830	%		1,241	%		494	%		350	%		275	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	26.07		$	36.29		$	57.89		$	50.72		$	47.64
Income (loss) from investment operations:
Net investment income (loss)a		(.08	)		.05			.07			(.27	)		(.25	)
Net gain (loss) on investments (realized and unrealized)		3.73			(9.93	)		(21.67	)		7.44			3.33
Total from investment operations		3.65			(9.88	)		(21.60	)		7.17			3.08
Less distributions from:
Net investment income		(.25	)		(.34	)		—			—			—
Total distributions		(.25	)		(.34	)		—			—			—
Net asset value, end of period	$	29.47		$	26.07		$	36.29		$	57.89		$	50.72
Total Returnb		14.02	%		(27.31	%)		(37.33	%)		14.14	%		6.47	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,193		$	1,700		$	1,814		$	4,933		$	9,685
Ratios to average net assets:
Net investment income (loss)		(0.29	%)		0.15	%		0.13	%		(0.50	%)		(0.54	%)
Total expenses		1.62	%		1.67	%		1.86	%		1.87	%		1.85	%
Portfolio turnover rate		1,830	%		1,241	%		494	%		350	%		275	%

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, 2017

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, 2017, Financial Services Fund Investor Class returned 21.72%, while the S&P 500 Financials Index returned 32.61% over the same period. The broader S&P 500 Index returned 17.17%.

The banks industry was the largest contributor to return, followed by the insurance industry. The real estate management & development industry was the only detractor from return. The construction & engineering industry contributed least.

Bank of America Corp., JPMorgan Chase & Co., and Morgan Stanley were the best-performing holdings in the Fund for the period. The worst-performing holdings for the period were Public Storage, Simon Property Group, Inc., and GGP, 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 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	2.4%
JPMorgan Chase & Co.	2.1%
Wells Fargo & Co.	1.9%
Bank of America Corp.	1.8%
Citigroup, Inc.	1.5%
Goldman Sachs Group, Inc.	1.1%
U.S. Bancorp	1.1%
Morgan Stanley	1.0%
American Express Co.	1.0%
American International Group, Inc.	0.9%
Top Ten Total	14.8%

“Ten Largest Holdings” excludes any temporary cash investments.

68 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	21.72%	11.34%	0.18%
A-Class Shares	21.42%	11.07%	-0.06%
A-Class Shares with sales charge†	15.65%	9.99%	-0.54%
C-Class Shares	20.51%	10.25%	-0.79%
C-Class Shares with CDSC‡	19.51%	10.25%	-0.79%
H-Class Shares**	21.43%	10.89%	-0.29%
S&P 500 Financials Index	32.61%	15.38%	0.18%
S&P 500 Index	17.17%	13.30%	7.51%

*	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, 2017
FINANCIAL SERVICES FUND

	Shares		Value
COMMON STOCKS† - 99.1%
REITs - 31.1%
Simon Property Group, Inc.		3,265	$	561,677
American Tower Corp. — Class A		4,492		545,959
Public Storage		2,096		458,836
Equinix, Inc.		1,135		454,420
Crown Castle International Corp.		4,678		441,837
Prologis, Inc.		7,626		395,637
Welltower, Inc.		5,498		389,368
Weyerhaeuser Co.		11,113		377,620
Ventas, Inc.		5,710		371,378
AvalonBay Communities, Inc.1		1,979		363,344
Equity Residential		5,623		349,863
GGP, Inc.		14,504		336,203
Boston Properties, Inc.		2,500		331,026
Digital Realty Trust, Inc.		2,998		318,957
Vornado Realty Trust		3,122		313,168
Realty Income Corp.		4,996		297,412
HCP, Inc.		9,297		290,810
SBA Communications Corp.*		2,400		288,888
Host Hotels & Resorts, Inc.		14,992		279,750
Essex Property Trust, Inc.		1,204		278,762
Mid-America Apartment Communities, Inc.		2,475		251,807
Annaly Capital Management, Inc.		22,632		251,441
Regency Centers Corp.		3,749		248,896
SL Green Realty Corp.		2,321		247,465
Federal Realty Investment Trust		1,822		243,237
Alexandria Real Estate Equities, Inc.		2,120		234,302
UDR, Inc.		6,423		232,898
Iron Mountain, Inc.		6,508		232,140
Duke Realty Corp.		8,756		230,020
Macerich Co.		3,542		228,105
Extra Space Storage, Inc.		3,033		225,625
Kimco Realty Corp.		10,111		223,352
VEREIT, Inc.		25,354		215,255
Gaming and Leisure Properties, Inc.		6,029		201,489
Colony NorthStar, Inc. — Class A		15,500		200,105
Camden Property Trust		2,486		200,024
Invitation Homes, Inc.*		9,000		196,470
Kilroy Realty Corp.		2,719		195,986
Apartment Investment & Management Co. — Class A		4,407		195,450
Lamar Advertising Co. — Class A		2,614		195,370
Omega Healthcare Investors, Inc.		5,841		192,695
AGNC Investment Corp.		9,629		191,521
Equity LifeStyle Properties, Inc.		2,459		189,491
Brixmor Property Group, Inc.		8,800		188,848
American Campus Communities, Inc.		3,923		186,696
National Retail Properties, Inc.		4,277		186,563
Douglas Emmett, Inc.		4,731		181,670
Starwood Property Trust, Inc.		7,952		179,556
Liberty Property Trust		4,643		178,988
Forest City Realty Trust, Inc. — Class A		8,171		177,964
American Homes 4 Rent — Class A		7,626		175,093
Hudson Pacific Properties, Inc.		5,035		174,412
Park Hotels & Resorts, Inc.		6,700		171,988
Hospitality Properties Trust		5,450		171,838
New Residential Investment Corp.		9,938		168,747
Highwoods Properties, Inc.		3,412		167,632
EPR Properties		2,246		165,373
Senior Housing Properties Trust		8,145		164,936
Spirit Realty Capital, Inc.		16,138		163,478
CubeSmart		6,206		161,108
DuPont Fabros Technology, Inc.		3,219		159,630
CoreSite Realty Corp.		1,760		158,488
CyrusOne, Inc.		3,071		158,064
DCT Industrial Trust, Inc.		3,271		157,401
DDR Corp.		12,401		155,385
Medical Properties Trust, Inc.		11,911		153,533
Weingarten Realty Investors		4,597		153,494
Uniti Group, Inc.		5,862		151,533
Taubman Centers, Inc.		2,293		151,384
Healthcare Realty Trust, Inc.		4,591		149,208
STORE Capital Corp.		6,196		147,960
Life Storage, Inc.		1,779		146,091
Equity Commonwealth*		4,660		145,485
Gramercy Property Trust		5,418		142,493
CoreCivic, Inc.		4,464		140,259
Cousins Properties, Inc.		16,697		138,084
Sunstone Hotel Investors, Inc.		8,947		137,158
LaSalle Hotel Properties		4,588		132,823
Corporate Office Properties Trust		4,011		132,764
Education Realty Trust, Inc.		3,206		130,965
RLJ Lodging Trust		5,390		126,719
Brandywine Realty Trust		7,770		126,107
Retail Opportunity Investments Corp.		5,412		113,814
DiamondRock Hospitality Co.		9,898		110,363
Pebblebrook Hotel Trust1		3,731		108,983
Washington Prime Group, Inc.		10,923		94,921
Government Properties Income Trust		4,410		92,301
Total REITs				19,148,359
Banks - 29.9%
JPMorgan Chase & Co.		14,698		1,291,073
Wells Fargo & Co.		21,499		1,196,635
Bank of America Corp.		46,727		1,102,291
Citigroup, Inc.		15,770		943,361
Goldman Sachs Group, Inc.		3,045		699,497
U.S. Bancorp		13,013		670,170
Morgan Stanley		14,790		633,604
PNC Financial Services Group, Inc.		4,615		554,908
Bank of New York Mellon Corp.		10,893		514,476
Capital One Financial Corp.		5,420		469,697
BB&T Corp.		9,666		432,070
State Street Corp.		5,061		402,906
SunTrust Banks, Inc.		6,817		376,980
M&T Bank Corp.		2,340		362,069
Banco Bradesco S.A. ADR		32,860		336,486
Toronto-Dominion Bank		6,607		330,945
HSBC Holdings plc ADR		8,033		327,907
Credicorp Ltd.		1,999		326,437
ICICI Bank Ltd. ADR		37,853		325,536
Northern Trust Corp.		3,733		323,203

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
FINANCIAL SERVICES FUND

	Shares		Value
Fifth Third Bancorp		12,455	$	316,357
KeyCorp		17,790		316,306
Regions Financial Corp.		21,011		305,290
Credit Suisse Group AG ADR		20,391		302,602
Deutsche Bank AG*,1		17,477		299,905
Citizens Financial Group, Inc.		8,625		297,994
First Republic Bank		3,017		283,026
Huntington Bancshares, Inc.		20,793		278,418
Comerica, Inc.1		3,630		248,945
SVB Financial Group*		1,249		232,426
Signature Bank*		1,423		211,159
Zions Bancorporation		5,026		211,092
East West Bancorp, Inc.		3,809		196,582
Bank of the Ozarks, Inc.		3,543		184,271
PacWest Bancorp		3,382		180,125
Cullen/Frost Bankers, Inc.1		1,979		176,071
Commerce Bancshares, Inc.		3,120		175,219
Synovus Financial Corp.		4,006		164,326
PrivateBancorp, Inc. — Class A		2,708		160,774
Prosperity Bancshares, Inc.		2,304		160,612
Texas Capital Bancshares, Inc.*		1,859		155,134
Webster Financial Corp.		3,084		154,323
First Horizon National Corp.		8,171		151,164
UMB Financial Corp.		1,917		144,369
Umpqua Holdings Corp.		8,080		143,339
IBERIABANK Corp.		1,800		142,380
Hancock Holding Co.		3,100		141,205
Home BancShares, Inc.		5,210		141,035
Wintrust Financial Corp.		2,000		138,240
Chemical Financial Corp.		2,700		138,105
MB Financial, Inc.		3,200		137,024
United Bankshares, Inc.1		3,200		135,200
Pinnacle Financial Partners, Inc.		2,000		132,900
Fulton Financial Corp.		7,138		127,413
Cathay General Bancorp		3,300		124,344
Total Banks				18,427,926
Insurance - 19.6%
Berkshire Hathaway, Inc. — Class B*		8,877		1,479,618
American International Group, Inc.		9,334		582,721
MetLife, Inc.		10,516		555,454
Prudential Financial, Inc.		4,617		492,541
Marsh & McLennan Companies, Inc.		6,128		452,799
Travelers Cos., Inc.		3,531		425,627
Chubb Ltd.1		3,015		410,794
Willis Towers Watson plc		3,133		410,078
Allstate Corp.		4,961		404,272
Aflac, Inc.		5,516		399,469
Aon plc		3,041		360,936
Progressive Corp.		8,918		349,407
Arch Capital Group Ltd.*		3,581		339,371
Everest Re Group Ltd.		1,439		336,453
XL Group Ltd.		8,317		331,515
Hartford Financial Services Group, Inc.		6,818		327,741
Principal Financial Group, Inc.		4,962		313,152
Markel Corp.*		305		297,637
Loews Corp.		6,240		291,845
Lincoln National Corp.		4,223		276,395
Cincinnati Financial Corp.		3,537		255,619
Unum Group		5,112		239,702
Arthur J Gallagher & Co.		4,180		236,337
Torchmark Corp.		2,866		220,797
American Financial Group, Inc.		2,306		220,039
WR Berkley Corp.		3,032		214,150
Reinsurance Group of America, Inc. — Class A		1,680		213,326
Voya Financial, Inc.		5,007		190,066
Brown & Brown, Inc.		4,222		176,142
Old Republic International Corp.		8,422		172,483
Assurant, Inc.		1,772		169,527
First American Financial Corp.		4,010		157,513
Primerica, Inc.		1,820		149,604
Radian Group, Inc.		7,934		142,494
MGIC Investment Corp.*		13,150		133,210
AmTrust Financial Services, Inc.		6,623		122,261
Selective Insurance Group, Inc.		2,550		120,233
Genworth Financial, Inc. — Class A*		25,872		106,593
Total Insurance				12,077,921
Diversified Financial Services - 13.3%
American Express Co.		7,895		624,574
BlackRock, Inc. — Class A		1,506		577,566
Charles Schwab Corp.		12,888		525,959
CME Group, Inc. — Class A		3,907		464,152
Intercontinental Exchange, Inc.		7,198		430,944
Synchrony Financial		11,158		382,719
Discover Financial Services		5,429		371,289
Franklin Resources, Inc.		8,379		353,091
TD Ameritrade Holding Corp.		8,416		327,046
Ameriprise Financial, Inc.		2,505		324,848
T. Rowe Price Group, Inc.		4,352		296,589
CIT Group, Inc.		6,445		276,684
Invesco Ltd.		8,273		253,402
Nasdaq, Inc.		3,549		246,478
Raymond James Financial, Inc.		3,213		245,023
Affiliated Managers Group, Inc.		1,399		229,352
CBOE Holdings, Inc.		2,809		227,726
E*TRADE Financial Corp.*		6,468		225,669
Ally Financial, Inc.		10,963		222,878
SEI Investments Co.		4,132		208,418
SLM Corp.*		13,719		166,000
Eaton Vance Corp.		3,654		164,284
Credit Acceptance Corp.*,1		800		159,528
Navient Corp.		10,484		154,744
Legg Mason, Inc.		3,847		138,915
LPL Financial Holdings, Inc.		3,440		137,015
BGC Partners, Inc. — Class A		11,584		131,594
Federated Investors, Inc. — Class B		4,589		120,874
LendingClub Corp.*		19,747		108,411
WisdomTree Investments, Inc.1		8,870		80,540
Total Diversified Financial Services				8,176,312

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
FINANCIAL SERVICES FUND

	Shares		Value
Commercial Services - 1.7%
S&P Global, Inc.		3,317	$	433,664
Moody’s Corp.		3,007		336,904
MarketAxess Holdings, Inc.		1,050		196,865
LendingTree, Inc.*		774		97,021
Total Commercial Services				1,064,454
Savings & Loans - 1.2%
New York Community Bancorp, Inc.		13,645		190,622
People’s United Financial, Inc.		9,597		174,665
Investors Bancorp, Inc.		10,846		155,965
Washington Federal, Inc.		3,823		126,541
BofI Holding, Inc.*,1		3,405		88,973
Total Savings & Loans				736,766
Real Estate - 0.9%
CBRE Group, Inc. — Class A*		7,104		247,148
Jones Lang LaSalle, Inc.		1,443		160,822
Realogy Holdings Corp.		5,258		156,636
Total Real Estate				564,606
Holding Companies-Diversified - 0.4%
Leucadia National Corp.		8,718		226,668
Software - 0.4%
MSCI, Inc. — Class A		2,250		218,678
Investment Companies - 0.3%
Ares Capital Corp.		11,759		204,371
Media - 0.3%
FactSet Research Systems, Inc.1		1,187		195,748
Total Common Stocks
(Cost $48,489,809)				61,041,809
PREFERRED STOCKS† - 0.6%
Banks - 0.6%
Itau Unibanco Holding S.A. ADR		28,658		345,902
Total Preferred Stocks
(Cost $236,400)				345,902
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.5%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	316,082		316,082
Total Repurchase Agreement
(Cost $316,082)				316,082
	Shares
SECURITIES LENDING COLLATERAL†,3 - 2.3%
First American Government Obligations Fund — Class Z, 0.61%4		1,412,093		1,412,093
Total Securities Lending Collateral
(Cost $1,412,093)				1,412,093
Total Investments - 102.5%
(Cost $50,454,384)			$	63,115,886
Other Assets & Liabilities, net - (2.5)%				(1,540,309	)
Total Net Assets - 100.0%			$	61,575,577

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	REIT — Real Estate Investment Trust
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
FINANCIAL SERVICES FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	61,041,809	$	—	$	—	$	61,041,809
Preferred Stocks		345,902		—		—		345,902
Repurchase Agreement		—		316,082		—		316,082
Securities Lending Collateral		1,412,093		—		—		1,412,093
Total	$	62,799,804	$	316,082	$	—	$	63,115,886

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

FINANCIAL SERVICES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,376,210 of securities loaned (cost $50,138,302)	$	62,799,804
Repurchase agreements, at value (cost $316,082)		316,082
Total investments (cost $50,454,384)		63,115,886
Receivables:
Securities sold		6,560,571
Dividends		152,762
Fund shares sold		87,361
Foreign taxes reclaim		120
Securities lending income		653
Interest		6
Total assets		69,917,359
Liabilities:
Payable for:
Fund shares redeemed		6,811,301
Return of securities loaned		1,412,093
Management fees		56,406
Transfer agent and administrative fees		16,590
Distribution and service fees		7,214
Portfolio accounting fees		6,636
Miscellaneous		31,542
Total liabilities		8,341,782
Commitments and contingent liabilities (Note 11)		—
Net assets	$	61,575,577
Net assets consist of:
Paid in capital	$	58,798,486
Undistributed net investment income		373,053
Accumulated net realized loss on investments		(10,257,464	)
Net unrealized appreciation on investments		12,661,502
Net assets	$	61,575,577
Investor Class:
Net assets	$	39,213,588
Capital shares outstanding		602,023
Net asset value per share	$	65.14
A-Class:
Net assets	$	1,833,533
Capital shares outstanding		29,841
Net asset value per share	$	61.44
Maximum offering price per share (Net asset value divided by 95.25%)	$	64.51
C-Class:
Net assets	$	2,269,677
Capital shares outstanding		41,075
Net asset value per share	$	55.26
H-Class:
Net assets	$	18,258,779
Capital shares outstanding		306,015
Net asset value per share	$	59.67

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $4,567)	$	1,042,181
Income from securities lending, net		2,940
Interest		767
Total investment income		1,045,888
Expenses:
Management fees		390,705
Transfer agent and administrative fees		114,913
Distribution and service fees:
A-Class		5,294
C-Class		14,549
H-Class		18,630
Portfolio accounting fees		45,965
Custodian fees		6,346
Trustees’ fees*		3,288
Line of credit fees		232
Miscellaneous		73,081
Total expenses		673,003
Net investment income		372,885
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		1,172,406
Net realized gain		1,172,406
Net change in unrealized appreciation (depreciation) on:
Investments		6,199,242
Net change in unrealized appreciation (depreciation)		6,199,242
Net realized and unrealized gain		7,371,648
Net increase in net assets resulting from operations	$	7,744,533

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

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

FINANCIAL SERVICES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	372,885		$	570,268
Net realized gain (loss) on investments		1,172,406			(6,440,895	)
Net change in unrealized appreciation (depreciation) on investments		6,199,242			(2,679,547	)
Net increase (decrease) in net assets resulting from operations		7,744,533			(8,550,174	)
Distributions to shareholders from:
Net investment income
Investor Class		(503,291	)		(197,056	)
A-Class		(14,974	)		(34,956	)
C-Class		(13,362	)		(9,406	)
H-Class		(38,626	)		(36,355	)*
Net realized gains
Investor Class		—			(100,426	)
A-Class		—			(17,815	)
C-Class		—			(4,794	)
H-Class		—			(18,528	)*
Total distributions to shareholders		(570,253	)		(419,336	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		181,145,547			81,929,333
A-Class		11,484,050			19,166,428
C-Class		3,885,372			15,134,609
H-Class		67,386,302			39,630,649	*
Distributions reinvested
Investor Class		470,098			230,452
A-Class		14,646			52,090
C-Class		13,227			14,200
H-Class		38,622			54,808	*
Cost of shares redeemed
Investor Class		(163,986,478	)		(111,107,892	)
A-Class		(10,860,355	)		(19,489,521	)
C-Class		(2,920,279	)		(15,116,335	)
H-Class		(52,510,413	)		(39,652,502	)*
Net increase (decrease) from capital share transactions		34,160,339			(29,153,681	)
Net increase (decrease) in net assets		41,334,619			(38,123,191	)
Net assets:
Beginning of year		20,240,958			58,364,149
End of year	$	61,575,577		$	20,240,958
Undistributed net investment income at end of year	$	373,053		$	570,253

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

FINANCIAL SERVICES FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:**
Shares sold
Investor Class		3,001,546			1,449,078
A-Class		206,206			356,434
C-Class		76,106			308,394
H-Class		1,149,247			758,632	*
Shares issued from reinvestment of distributions
Investor Class		7,770			4,140
A-Class		256			988
C-Class		257			296
H-Class		696			1,070	*
Shares redeemed
Investor Class		(2,687,599	)		(2,036,418	)
A-Class		(196,995	)		(386,912	)
C-Class		(58,308	)		(310,694	)
H-Class		(905,056	)		(782,598	)*
Net increase (decrease) in shares		594,126			(637,590	)

*	Effective September 30, 2015, the Fund’s Advisor Class shares were converted into H-Class shares — See Note 9.
**	Capital share activity for the periods presented through March 31, 2017, has been restated to reflect a 2:1 share split effective October 31, 2016 — See Note 10.

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	53.90		$	57.78		$	53.05		$	45.33		$	39.23
Income (loss) from investment operations:
Net investment income (loss)a		.55			.77			.46			.39			.38
Net gain (loss) on investments (realized and unrealized)		11.14			(4.19	)		4.40			7.61			6.00
Total from investment operations		11.69			(3.42	)		4.86			8.00			6.38
Less distributions from:
Net investment income		(.45	)		(.30	)		(.13	)		(.28	)		(.28	)
Net realized gains		—			(.16	)		—			—			—
Total distributions		(.45	)		(.46	)		(.13	)		(.28	)		(.28	)
Net asset value, end of period	$	65.14		$	53.90		$	57.78		$	53.05		$	45.33
Total Returnb		21.72	%		(5.95	%)		9.17	%		17.67	%		16.37	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	39,214		$	15,110		$	49,897		$	17,688		$	17,007
Ratios to average net assets:
Net investment income (loss)		0.90	%		1.36	%		0.82	%		0.81	%		0.95	%
Total expenses		1.38	%		1.34	%		1.34	%		1.37	%		1.36	%
Portfolio turnover rate		389	%		268	%		326	%		414	%		590	%

A-Class	Year Ended March 31, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	51.00		$	54.83		$	50.47		$	43.24		$	37.53
Income (loss) from investment operations:
Net investment income (loss)a		.41			.46			.21			.29			.26
Net gain (loss) on investments (realized and unrealized)		10.48			(3.83	)		4.28			7.22			5.73
Total from investment operations		10.89			(3.37	)		4.49			7.51			5.99
Less distributions from:
Net investment income		(.45	)		(.30	)		(.13	)		(.28	)		(.28	)
Net realized gains		—			(.16	)		—			—			—
Total distributions		(.45	)		(.46	)		(.13	)		(.28	)		(.28	)
Net asset value, end of period	$	61.44		$	51.00		$	54.83		$	50.47		$	43.24
Total Returnb		21.42	%		(6.17	%)		8.89	%		17.41	%		16.06	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,834		$	1,039		$	2,734		$	7,698		$	1,826
Ratios to average net assets:
Net investment income (loss)		0.73	%		0.87	%		0.41	%		0.62	%		0.66	%
Total expenses		1.62	%		1.60	%		1.59	%		1.62	%		1.61	%
Portfolio turnover rate		389	%		268	%		326	%		414	%		590	%

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	46.24		$	50.14		$	46.51		$	40.15		$	35.13
Income (loss) from investment operations:
Net investment income (loss)a		(.07	)		.11			(.11	)		(.08	)		.02
Net gain (loss) on investments (realized and unrealized)		9.54			(3.55	)		3.87			6.72			5.28
Total from investment operations		9.47			(3.44	)		3.76			6.64			5.30
Less distributions from:
Net investment income		(.45	)		(.30	)		(.13	)		(.28	)		(.28	)
Net realized gains		—			(.16	)		—			—			—
Total distributions		(.45	)		(.46	)		(.13	)		(.28	)		(.28	)
Net asset value, end of period	$	55.26		$	46.24		$	50.14		$	46.51		$	40.15
Total Returnb		20.51	%		(6.89	%)		8.08	%		16.58	%		15.21	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,270		$	1,065		$	1,255		$	1,051		$	1,440
Ratios to average net assets:
Net investment income (loss)		(0.13	%)		0.22	%		(0.23	%)		(0.18	%)		0.04	%
Total expenses		2.37	%		2.35	%		2.35	%		2.37	%		2.36	%
Portfolio turnover rate		389	%		268	%		326	%		414	%		590	%

H-Class	Year Ended March 31, 2017c			Year Ended March 31, 2016c,d			Year Ended March 31, 2015c,d			Year Ended March 31, 2014c,d			Year Ended March 28, 2013c,d
Per Share Data
Net asset value, beginning of period	$	49.53		$	53.30		$	49.18		$	42.25		$	36.77
Income (loss) from investment operations:
Net investment income (loss)a		.33			.43			.15			.12			.11
Net gain (loss) on investments (realized and unrealized)		10.26			(3.74	)		4.10			7.09			5.65
Total from investment operations		10.59			(3.31	)		4.25			7.21			5.76
Less distributions from:
Net investment income		(.45	)		(.30	)		(.13	)		(.28	)		(.28	)
Net realized gains		—			(.16	)		—			—			—
Total distributions		(.45	)		(.46	)		(.13	)		(.28	)		(.28	)
Net asset value, end of period	$	59.67		$	49.53		$	53.30		$	49.18		$	42.25
Total Returnb		21.43	%		(6.25	%)		8.63	%		17.10	%		15.80	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	18,259		$	3,028		$	4,479		$	4,583		$	7,103
Ratios to average net assets:
Net investment income (loss)		0.58	%		0.83	%		0.28	%		0.26	%		0.29	%
Total expenses		1.63	%		1.65	%		1.85	%		1.87	%		1.85	%
Portfolio turnover rate		389	%		268	%		326	%		414	%		590	%

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	Share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 2:1 share split effective October 31, 2016 — See Note 10.
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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Health Care Fund Investor Class returned 10.20%, compared with a return of 11.59% for the S&P 500 Health Care Index. The broader S&P 500 Index returned 17.17%.

The biotechnology industry and the health care equipment & supplies industry were the largest contributors to return. No industry detracted. The IT services industry contributed the least, followed by the health care technology industry.

The Fund’s top-performing holdings were UnitedHealth Group, Inc., Incyte Corp., and Johnson & Johnson. The worst-performing holdings in the Fund included Endo International Plc, Gilead Sciences, Inc., and Perrigo Company plc.

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%
UnitedHealth Group, Inc.	2.1%
Amgen, Inc.	1.8%
AbbVie, Inc.	1.8%
Celgene Corp.	1.7%
Eli Lilly & Co.	1.7%
Gilead Sciences, Inc.	1.6%
Bristol-Myers Squibb Co.	1.6%
Top Ten Total	20.3%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 79

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	10.20%	13.93%	9.00%
A-Class Shares	9.85%	13.63%	8.73%
A-Class Shares with sales charge†	4.63%	12.53%	8.20%
C-Class Shares	9.07%	12.79%	7.94%
C-Class Shares with CDSC‡	8.13%	12.79%	7.94%
H-Class Shares**	9.87%	13.46%	8.51%
S&P 500 Health Care Index	11.59%	16.65%	10.35%
S&P 500 Index	17.17%	13.30%	7.51%

*	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.

80 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
HEALTH CARE FUND

	Shares		Value
COMMON STOCKS† - 99.3%
Pharmaceuticals - 36.0%
Johnson & Johnson		13,016	$	1,621,142
Pfizer, Inc.		37,174		1,271,723
Merck & Company, Inc.		18,520		1,176,761
AbbVie, Inc.		13,933		907,874
Eli Lilly & Co.		10,175		855,819
Bristol-Myers Squibb Co.		15,216		827,446
Allergan plc		3,300		788,436
Shire plc ADR		3,672		639,773
Express Scripts Holding Co.*		8,726		575,131
Teva Pharmaceutical Industries Ltd. ADR		15,913		510,648
McKesson Corp.		3,217		476,952
Zoetis, Inc.		8,500		453,645
Cardinal Health, Inc.		5,492		447,873
AstraZeneca plc ADR		14,156		440,818
Endo International plc*		38,003		424,113
AmerisourceBergen Corp. — Class A		4,479		396,392
Novartis AG ADR		5,331		395,933
Alkermes plc*		6,710		392,535
Mylan N.V.*		10,014		390,446
Jazz Pharmaceuticals plc*		2,688		390,109
GlaxoSmithKline plc ADR		9,067		382,265
Perrigo Company plc		5,520		366,473
Novo Nordisk A/S ADR		10,320		353,770
TESARO, Inc.*		1,590		244,653
DexCom, Inc.*		2,825		239,362
VCA, Inc.*		2,545		232,868
Nektar Therapeutics*		8,840		207,475
Mallinckrodt plc*		4,214		187,818
PRA Health Sciences, Inc.*		2,780		181,339
ACADIA Pharmaceuticals, Inc.*		5,099		175,304
Neurocrine Biosciences, Inc.*		4,030		174,499
Valeant Pharmaceuticals International, Inc.*,1		15,604		172,112
Akorn, Inc.*		6,585		158,567
Prestige Brands Holdings, Inc.*		2,606		144,789
Agios Pharmaceuticals, Inc.*,1		2,392		139,693
Ironwood Pharmaceuticals, Inc. — Class A*		8,080		137,845
Horizon Pharma plc*		9,238		136,538
Clovis Oncology, Inc.*		2,140		136,254
Owens & Minor, Inc.		3,801		131,515
Portola Pharmaceuticals, Inc.*		3,320		130,111
Sarepta Therapeutics, Inc.*		3,900		115,440
Radius Health, Inc.*		2,908		112,394
Pacira Pharmaceuticals, Inc.*		2,348		107,069
Array BioPharma, Inc.*		11,290		100,933
Eagle Pharmaceuticals, Inc.*,1		1,190		98,699
Impax Laboratories, Inc.*		7,677		97,114
Amicus Therapeutics, Inc.*		12,640		90,123
Synergy Pharmaceuticals, Inc.*,1		18,440		85,930
Depomed, Inc.*		5,505		69,088
Total Pharmaceuticals				18,293,609
Healthcare-Products - 23.5%
Abbott Laboratories		17,486		776,553
Thermo Fisher Scientific, Inc.		4,479		687,974
Danaher Corp.		7,990		683,385
Medtronic plc		7,837		631,348
Stryker Corp.		4,770		627,971
Becton Dickinson and Co.		2,947		540,598
Boston Scientific Corp.*		21,259		528,711
Baxter International, Inc.		9,204		477,319
Intuitive Surgical, Inc.*,1		598		458,349
Zimmer Biomet Holdings, Inc.		3,611		440,939
Edwards Lifesciences Corp.*		4,298		404,313
CR Bard, Inc.		1,458		362,371
Dentsply Sirona, Inc.		5,364		334,928
IDEXX Laboratories, Inc.*		2,074		320,661
Henry Schein, Inc.*		1,850		314,445
Hologic, Inc.*		7,239		308,019
ResMed, Inc.		4,012		288,744
Cooper Cos., Inc.		1,360		271,850
Align Technology, Inc.*		2,302		264,063
Teleflex, Inc.		1,300		251,849
Varian Medical Systems, Inc.*		2,757		251,245
West Pharmaceutical Services, Inc.		2,560		208,922
ABIOMED, Inc.*		1,610		201,572
Masimo Corp.*		2,050		191,183
Patterson Companies, Inc.1		4,157		188,021
Hill-Rom Holdings, Inc.		2,650		187,090
OPKO Health, Inc.*,1		22,687		181,496
Bruker Corp.		7,480		174,508
VWR Corp.*		6,130		172,866
NuVasive, Inc.*		2,242		167,433
Bio-Techne Corp.		1,640		166,706
Integra LifeSciences Holdings Corp.*		3,830		161,358
Nevro Corp.*		1,520		142,424
ICU Medical, Inc.*		880		134,376
Insulet Corp.*		3,100		133,579
Zeltiq Aesthetics, Inc.*		2,300		127,903
Varex Imaging Corp.*		3,000		100,800
Natus Medical, Inc.*		2,510		98,518
Total Healthcare-Products				11,964,390
Biotechnology - 19.5%
Amgen, Inc.		5,693		934,050
Celgene Corp.*		6,989		869,640
Gilead Sciences, Inc.		12,278		833,921
Biogen, Inc.*		2,428		663,864
Regeneron Pharmaceuticals, Inc.*		1,414		547,939
Vertex Pharmaceuticals, Inc.*		4,675		511,211
Alexion Pharmaceuticals, Inc.*		3,852		467,016
Illumina, Inc.*		2,634		449,466
Incyte Corp.*		3,304		441,646
BioMarin Pharmaceutical, Inc.*		3,952		346,907
Seattle Genetics, Inc.*		4,157		261,309
Bioverativ, Inc.*		4,169		227,043
Exelixis, Inc.*		10,450		226,452
United Therapeutics Corp.*		1,576		213,359
Bio-Rad Laboratories, Inc. — Class A*		1,050		209,307

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
HEALTH CARE FUND

	Shares		Value
Ionis Pharmaceuticals, Inc.*,1		4,828	$	194,086
Charles River Laboratories International, Inc.*		1,995		179,450
Alnylam Pharmaceuticals, Inc.*		3,485		178,606
Kite Pharma, Inc.*,1		2,182		171,265
Bluebird Bio, Inc.*		1,840		167,256
Exact Sciences Corp.*,1		6,654		157,167
Medicines Co.*		3,205		156,725
Sage Therapeutics, Inc.*		2,020		143,561
Intercept Pharmaceuticals, Inc.*,1		1,210		136,851
Juno Therapeutics, Inc.*,1		6,140		136,247
Intrexon Corp.*,1		6,630		131,407
Ultragenyx Pharmaceutical, Inc.*		1,920		130,138
Ligand Pharmaceuticals, Inc. — Class B*,1		1,190		125,950
Spark Therapeutics, Inc.*		2,000		106,680
Halozyme Therapeutics, Inc.*,1		8,090		104,846
Myriad Genetics, Inc.*,1		5,308		101,914
Puma Biotechnology, Inc.*		2,470		91,884
Alder Biopharmaceuticals, Inc.*		4,180		86,944
Five Prime Therapeutics, Inc.*		2,310		83,507
Acorda Therapeutics, Inc.*		3,715		78,015
AMAG Pharmaceuticals, Inc.*		3,330		75,092
Total Biotechnology				9,940,721
Healthcare-Services - 14.9%
UnitedHealth Group, Inc.		6,665		1,093,126
Anthem, Inc.		3,584		592,722
Aetna, Inc.		4,608		587,750
Cigna Corp.		3,733		546,847
HCA Holdings, Inc.*		5,904		525,396
Humana, Inc.		2,192		451,859
Quintiles IMS Holdings, Inc.*		4,830		388,960
DaVita, Inc.*		4,821		327,683
Laboratory Corp. of America Holdings*		2,282		327,398
Centene Corp.*		4,477		319,031
Quest Diagnostics, Inc.		3,204		314,601
Universal Health Services, Inc. — Class B		2,425		301,791
Envision Healthcare Corp.*		3,859		236,634
MEDNAX, Inc.*		3,146		218,269
WellCare Health Plans, Inc.*		1,510		211,717
Acadia Healthcare Co., Inc.*		4,100		178,760
HealthSouth Corp.		4,130		176,805
Brookdale Senior Living, Inc. — Class A*		10,964		147,247
LifePoint Health, Inc.*		2,179		142,725
Molina Healthcare, Inc.*		3,026		137,986
Tenet Healthcare Corp.*		6,690		118,480
Magellan Health, Inc.*		1,610		111,171
Air Methods Corp.*		2,490		107,070
Total Healthcare-Services				7,564,028
Electronics - 2.4%
Agilent Technologies, Inc.		7,013		370,777
Waters Corp.*		1,937		302,773
Mettler-Toledo International, Inc.*		630		301,713
PerkinElmer, Inc.		3,999		232,182
Total Electronics				1,207,445
Software - 2.2%
Cerner Corp.*		6,789		399,533
Veeva Systems, Inc. — Class A*		4,662		239,067
athenahealth, Inc.*,1		1,590		179,177
Medidata Solutions, Inc.*		2,685		154,898
Allscripts Healthcare Solutions, Inc.*		10,734		136,107
Total Software				1,108,782
Commercial Services - 0.8%
PAREXEL International Corp.*		2,418		152,600
Incorporated Research Holdings, Inc. — Class A*		2,902		133,057
HealthEquity, Inc.*		3,090		131,171
Total Commercial Services				416,828
Total Common Stocks
(Cost $44,260,840)				50,495,803
RIGHTS††† - 0.0%**
Dyax Corp.
Expires 01/25/18*		5,700		—
Total Rights
(Cost $—)				—
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.5%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	269,627		269,627
Total Repurchase Agreement
(Cost $269,627)				269,627
	Shares
SECURITIES LENDING COLLATERAL†,3 - 3.3%
First American Government Obligations Fund — Class Z, 0.61%4		1,692,284		1,692,284
Total Securities Lending Collateral
(Cost $1,692,284)				1,692,284
Total Investments - 103.1%
(Cost $46,222,751)			$	52,457,714
Other Assets & Liabilities, net - (3.1)%				(1,595,662	)
Total Net Assets - 100.0%			$	50,862,052

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
HEALTH CARE FUND

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3			Total
Common Stocks	$	50,495,803	$	—	$	—		$	50,495,803
Repurchase Agreement		—		269,627		—			269,627
Rights		—		—		—	*		—
Securities Lending Collateral		1,692,284		—		—			1,692,284
Total	$	52,188,087	$	269,627	$	—		$	52,457,714

* Security has a market value of $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

HEALTH CARE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,651,143 of securities loaned (cost $45,953,124)	$	52,188,087
Repurchase agreements, at value (cost $269,627)		269,627
Total investments (cost $46,222,751)		52,457,714
Receivables:
Fund shares sold		1,713,697
Dividends		48,642
Foreign taxes reclaim		1,265
Securities lending income		667
Interest		5
Total assets		54,221,990
Liabilities:
Payable for:
Return of securities loaned		1,692,284
Securities purchased		1,531,788
Fund shares redeemed		53,709
Management fees		38,932
Transfer agent and administrative fees		11,450
Distribution and service fees		6,368
Portfolio accounting fees		4,580
Miscellaneous		20,827
Total liabilities		3,359,938
Commitments and contingent liabilities (Note 11)		—
Net assets	$	50,862,052
Net assets consist of:
Paid in capital	$	47,094,844
Accumulated net investment loss		—
Accumulated net realized loss on investments		(2,467,755	)
Net unrealized appreciation on investments		6,234,963
Net assets	$	50,862,052
Investor Class:
Net assets	$	36,468,079
Capital shares outstanding		1,310,916
Net asset value per share	$	27.82
A-Class:
Net assets	$	4,625,935
Capital shares outstanding		180,949
Net asset value per share	$	25.56
Maximum offering price per share (Net asset value divided by 95.25%)	$	26.84
C-Class:
Net assets	$	4,959,135
Capital shares outstanding		219,644
Net asset value per share	$	22.58
H-Class:
Net assets	$	4,808,903
Capital shares outstanding		194,497
Net asset value per share	$	24.72

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $1,581)	$	508,498
Income from securities lending, net		4,002
Interest		706
Total investment income		513,206
Expenses:
Management fees		432,002
Transfer agent and administrative fees		127,059
Distribution and service fees:
A-Class		15,092
C-Class		64,206
H-Class		17,108
Portfolio accounting fees		50,823
Registration fees		51,166
Custodian fees		7,575
Trustees’ fees*		4,609
Line of credit fees		129
Miscellaneous		25,998
Total expenses		795,767
Net investment loss		(282,561	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		19,553,389
Net realized gain		19,553,389
Net change in unrealized appreciation (depreciation) on:
Investments		(16,329,099	)
Net change in unrealized appreciation (depreciation)		(16,329,099	)
Net realized and unrealized gain		3,224,290
Net increase in net assets resulting from operations	$	2,941,729

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

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

HEALTH CARE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(282,561	)	$	(518,753	)
Net realized gain on investments		19,553,389			28,773,483
Net change in unrealized appreciation (depreciation) on investments		(16,329,099	)		(55,109,991	)
Net increase (decrease) in net assets resulting from operations		2,941,729			(26,855,261	)
Distributions to shareholders from:
Net realized gains
Investor Class		(2,956,545	)		(2,551,979	)
A-Class		(740,095	)		(751,373	)
C-Class		(877,583	)		(771,085	)
H-Class		(1,278,405	)		(2,499,031	)*
Total distributions to shareholders		(5,852,628	)		(6,573,468	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		365,602,869			288,312,509
A-Class		11,961,380			51,799,265
C-Class		3,938,169			20,161,059
H-Class		26,745,003			245,917,636	*
Distributions reinvested
Investor Class		2,909,276			2,527,332
A-Class		638,573			734,523
C-Class		867,742			758,819
H-Class		1,278,332			2,496,935	*
Cost of shares redeemed
Investor Class		(375,451,784	)		(402,516,466	)
A-Class		(14,203,527	)		(68,969,564	)
C-Class		(7,750,196	)		(21,424,094	)
H-Class		(27,362,966	)		(287,555,879	)*
Net decrease from capital share transactions		(10,827,129	)		(167,757,925	)
Net decrease in net assets		(13,738,028	)		(201,186,654	)
Net assets:
Beginning of year		64,600,080			265,786,734
End of year	$	50,862,052		$	64,600,080
Accumulated net investment loss at end of year	$	—		$	(54,612	)
Capital share activity:
Shares sold
Investor Class		12,706,162			8,380,890
A-Class		436,251			1,575,077
C-Class		163,495			680,967
H-Class		1,045,237			7,391,856	*
Shares issued from reinvestment of distributions
Investor Class		111,467			81,233
A-Class		26,596			25,356
C-Class		40,816			28,863
H-Class		55,053			88,733	*
Shares redeemed
Investor Class		(13,065,375	)		(11,798,319	)
A-Class		(522,147	)		(2,214,540	)
C-Class		(327,952	)		(741,300	)
H-Class		(1,108,171	)		(8,810,947	)*
Net decrease in shares		(438,568	)		(5,312,131	)

* 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 | 85

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	28.65		$	35.83		$	27.76		$	22.35		$	18.83
Income (loss) from investment operations:
Net investment income (loss)a		(.10	)		(.04	)		(.07	)		(.03	)		.09
Net gain (loss) on investments (realized and unrealized)		2.79			(5.11	)		8.50			7.00			3.48
Total from investment operations		2.69			(5.15	)		8.43			6.97			3.57
Less distributions from:
Net investment income		—			—			—			(.03	)		(.05	)
Net realized gains		(3.52	)		(2.03	)		(.36	)		(1.53	)		—
Total distributions		(3.52	)		(2.03	)		(.36	)		(1.56	)		(.05	)
Net asset value, end of period	$	27.82		$	28.65		$	35.83		$	27.76		$	22.35
Total Returnb		10.20	%		(14.82	%)		30.51	%		31.70	%		18.98	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	36,468		$	44,663		$	175,397		$	98,209		$	104,525
Ratios to average net assets:
Net investment income (loss)		(0.36	%)		(0.11	%)		(0.23	%)		(0.12	%)		0.45	%
Total expenses		1.37	%		1.34	%		1.34	%		1.37	%		1.35	%
Portfolio turnover rate		699	%		249	%		176	%		277	%		266	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	26.68		$	33.60		$	26.11		$	21.15		$	17.87
Income (loss) from investment operations:
Net investment income (loss)a		(.17	)		(.13	)		(.14	)		(.09	)		.04
Net gain (loss) on investments (realized and unrealized)		2.57			(4.76	)		7.99			6.61			3.29
Total from investment operations		2.40			(4.89	)		7.85			6.52			3.33
Less distributions from:
Net investment income		—			—			—			(.03	)		(.05	)
Net realized gains		(3.52	)		(2.03	)		(.36	)		(1.53	)		—
Total distributions		(3.52	)		(2.03	)		(.36	)		(1.56	)		(.05	)
Net asset value, end of period	$	25.56		$	26.68		$	33.60		$	26.11		$	21.15
Total Returnb		9.85	%		(15.04	%)		30.21	%		31.36	%		18.65	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,626		$	6,410		$	28,704		$	7,909		$	3,660
Ratios to average net assets:
Net investment income (loss)		(0.62	%)		(0.42	%)		(0.47	%)		(0.37	%)		0.20	%
Total expenses		1.62	%		1.59	%		1.59	%		1.62	%		1.60	%
Portfolio turnover rate		699	%		249	%		176	%		277	%		266	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	24.13		$	30.82		$	24.16		$	19.81		$	16.86
Income (loss) from investment operations:
Net investment income (loss)a		(.33	)		(.33	)		(.33	)		(.26	)		(.09	)
Net gain (loss) on investments (realized and unrealized)		2.30			(4.33	)		7.35			6.17			3.09
Total from investment operations		1.97			(4.66	)		7.02			5.91			3.00
Less distributions from:
Net investment income		—			—			—			(.03	)		(.05	)
Net realized gains		(3.52	)		(2.03	)		(.36	)		(1.53	)		—
Total distributions		(3.52	)		(2.03	)		(.36	)		(1.56	)		(.05	)
Net asset value, end of period	$	22.58		$	24.13		$	30.82		$	24.16		$	19.81
Total Returnb		9.07	%		(15.67	%)		29.21	%		30.38	%		17.81	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,959		$	8,284		$	11,551		$	7,318		$	4,589
Ratios to average net assets:
Net investment income (loss)		(1.37	%)		(1.17	%)		(1.24	%)		(1.14	%)		(0.53	%)
Total expenses		2.37	%		2.35	%		2.34	%		2.37	%		2.35	%
Portfolio turnover rate		699	%		249	%		176	%		277	%		266	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	25.91		$	32.71		$	25.49		$	20.73		$	17.55
Income (loss) from investment operations:
Net investment income (loss)a		(.16	)		(.14	)		(.21	)		(.15	)		(.06	)
Net gain (loss) on investments (realized and unrealized)		2.49			(4.63	)		7.79			6.47			3.29
Total from investment operations		2.33			(4.77	)		7.58			6.32			3.23
Less distributions from:
Net investment income		—			—			—			(.03	)		(.05	)
Net realized gains		(3.52	)		(2.03	)		(.36	)		(1.53	)		—
Total distributions		(3.52	)		(2.03	)		(.36	)		(1.56	)		(.05	)
Net asset value, end of period	$	24.72		$	25.91		$	32.71		$	25.49		$	20.73
Total Returnb		9.87	%		(15.08	%)		29.89	%		31.03	%		18.43	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,809		$	5,244		$	50,135		$	38,480		$	3,605
Ratios to average net assets:
Net investment income (loss)		(0.62	%)		(0.44	%)		(0.73	%)		(0.62	%)		(0.31	%)
Total expenses		1.62	%		1.71	%		1.85	%		1.87	%		1.86	%
Portfolio turnover rate		699	%		249	%		176	%		277	%		266	%

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 | 87

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Internet Fund Investor Class returned 22.36%, compared with 24.91% for the S&P 500 Information Technology Index. The broader S&P 500 Index returned 17.17%.

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.

Amazon.com, Inc., Facebook, Inc. — Class A, and LinkedIn Corp. — Class A added the most to Fund performance for the period. Fang Holdings Ltd. ADR — Class A, Palo Alto Networks, Inc., and LM Ericsson Telefon AB ADR — Class B 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	6.4%
Amazon.com, Inc.	5.7%
Facebook, Inc. — Class A	5.5%
Cisco Systems, Inc.	3.5%
Priceline Group, Inc.	2.6%
Broadcom Ltd.	2.5%
QUALCOMM, Inc.	2.5%
Time Warner, Inc.	2.3%
Netflix, Inc.	2.2%
salesforce.com, Inc.	2.1%
Top Ten Total	35.3%

“Ten Largest Holdings” excludes any temporary cash investments.

88 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	22.36%	14.28%	9.68%
A-Class Shares	22.04%	13.99%	9.40%
A-Class Shares with sales charge†	16.24%	12.89%	8.87%
C-Class Shares	21.13%	13.14%	8.59%
C-Class Shares with CDSC‡	20.13%	13.14%	8.59%
H-Class Shares**	22.09%	13.80%	9.17%
S&P 500 Information Technology Index	24.91%	14.64%	11.35%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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 | 89

SCHEDULE OF INVESTMENTS	March 31, 2017
INTERNET FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Internet - 50.3%
Alphabet, Inc. — Class A*		1,860	$	1,576,907
Amazon.com, Inc.*		1,571		1,392,755
Facebook, Inc. — Class A*		9,527		1,353,310
Priceline Group, Inc.*		352		626,549
Netflix, Inc.*		3,639		537,881
Yahoo!, Inc.*		9,477		439,828
Alibaba Group Holding Ltd. ADR*		3,990		430,242
eBay, Inc.*		11,986		402,370
Baidu, Inc. ADR*		2,067		356,599
Symantec Corp.		9,418		288,945
Expedia, Inc.		2,237		282,242
JD.com, Inc. ADR*		8,302		258,275
Ctrip.com International Ltd. ADR*		4,933		242,457
Twitter, Inc.*		14,444		215,938
Palo Alto Networks, Inc.*		1,858		209,359
VeriSign, Inc.*		2,266		197,391
F5 Networks, Inc.*		1,378		196,461
MercadoLibre, Inc.		880		186,094
Weibo Corp. ADR*		3,372		175,951
SINA Corp.*		2,413		174,026
GoDaddy, Inc. — Class A*		4,450		168,655
TripAdvisor, Inc.*		3,821		164,914
Shopify, Inc. — Class A*,1		2,400		163,416
Zillow Group, Inc. — Class A*		4,743		160,361
IAC/InterActiveCorp*		2,157		159,014
Zillow Group, Inc. — Class C*,1		4,685		157,744
Vipshop Holdings Ltd. ADR*		11,705		156,145
YY, Inc. ADR*		3,271		150,826
58.com, Inc. ADR*		4,053		143,436
Match Group, Inc.*,1		8,299		135,523
Wayfair, Inc. — Class A*,1		3,083		124,831
Pandora Media, Inc.*,1		9,450		111,605
GrubHub, Inc.*,1		3,315		109,030
Liberty Expedia Holdings, Inc. — Class A*		2,299		104,559
Yelp, Inc. — Class A*		3,188		104,407
WebMD Health Corp. — Class A*		1,819		95,825
Cogent Communications Holdings, Inc.		2,190		94,280
Stamps.com, Inc.*,1		752		88,999
Shutterfly, Inc.*		1,774		85,666
Shutterstock, Inc.*,1		1,918		79,309
NIC, Inc.		3,700		74,740
Etsy, Inc.*		6,971		74,102
comScore, Inc.*		3,377		72,909
Total Internet				12,323,876
Telecommunications - 13.6%
Cisco Systems, Inc.		25,387		858,080
Motorola Solutions, Inc.		2,925		252,194
Juniper Networks, Inc.		7,654		213,011
Arista Networks, Inc.*		1,572		207,928
CommScope Holding Company, Inc.*		4,634		193,284
LogMeIn, Inc.		1,558		151,905
ARRIS International plc*		5,687		150,421
Ubiquiti Networks, Inc.*,1		2,617		131,530
ViaSat, Inc.*		1,970		125,725
Ciena Corp.*		5,151		121,615
Finisar Corp.*		4,259		116,441
InterDigital, Inc.		1,327		114,520
Viavi Solutions, Inc.*		9,827		105,345
Acacia Communications, Inc.*,1		1,790		104,930
Gogo, Inc.*,1		8,123		89,353
Oclaro, Inc.*		8,716		85,591
Ixia*		4,330		85,085
NETGEAR, Inc.*		1,625		80,519
Infinera Corp.*		7,294		74,618
ADTRAN, Inc.		3,168		65,736
Total Telecommunications				3,327,831
Software - 11.5%
salesforce.com, Inc.*		6,108		503,850
Intuit, Inc.		3,018		350,058
Red Hat, Inc.*		3,037		262,701
NetEase, Inc. ADR		875		248,500
Citrix Systems, Inc.*		2,891		241,080
Akamai Technologies, Inc.*		3,431		204,831
Veeva Systems, Inc. — Class A*		3,469		177,890
Momo, Inc. ADR*		4,490		152,974
j2 Global, Inc.		1,573		131,990
Twilio, Inc. — Class A*,1		3,500		101,045
Allscripts Healthcare Solutions, Inc.*		7,959		100,920
Cornerstone OnDemand, Inc.*		2,490		96,836
New Relic, Inc.*		2,530		93,787
2U, Inc.*		2,320		92,011
SPS Commerce, Inc.*		1,150		67,264
Total Software				2,825,737
Semiconductors - 5.0%
Broadcom Ltd.		2,842		622,284
QUALCOMM, Inc.		10,572		606,198
Total Semiconductors				1,228,482
Diversified Financial Services - 4.8%
Charles Schwab Corp.		11,517		470,009
TD Ameritrade Holding Corp.		7,490		291,061
E*TRADE Financial Corp.*		5,768		201,246
BGC Partners, Inc. — Class A		10,404		118,189
LendingClub Corp.*		17,684		97,085
Total Diversified Financial Services				1,177,590
Commercial Services - 4.3%
PayPal Holdings, Inc.*		11,193		481,523
CoStar Group, Inc.*		825		170,956
Live Nation Entertainment, Inc.*		5,554		168,675
Cimpress N.V.*,1		1,830		157,728
NutriSystem, Inc.		1,575		87,413
Total Commercial Services				1,066,295
Computers - 3.6%
Check Point Software Technologies Ltd.*		2,185		224,312
BlackBerry Ltd.*		22,160		171,740
Brocade Communications Systems, Inc.		12,014		149,935

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
INTERNET FUND

	Shares		Value
NetScout Systems, Inc.*		3,260	$	123,717
Lumentum Holdings, Inc.*		2,261		120,624
Nutanix, Inc. — Class A*,1		5,490		103,047
Total Computers				893,375
Media - 2.3%
Time Warner, Inc.		5,889		575,414
REITs - 1.6%
Equinix, Inc.		954		381,953
Retail - 1.2%
Liberty Interactive Corporation QVC Group — Class A*		9,930		198,799
HSN, Inc.		2,528		93,789
Total Retail				292,588
Aerospace & Defense - 1.0%
Harris Corp.		2,214		246,352
Leisure Time - 0.3%
Liberty TripAdvisor Holdings, Inc. — Class A*		4,831		68,117
Total Common Stocks
(Cost $17,505,738)				24,407,610

	Face Amount
REPURCHASE AGREEMENT††,2 - 0.7%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	176,513		176,513
Total Repurchase Agreement
(Cost $176,513)				176,513
	Shares
SECURITIES LENDING COLLATERAL†,3 - 4.9%
First American Government Obligations Fund — Class Z, 0.61%4		1,190,549		1,190,549
Total Securities Lending Collateral
(Cost $1,190,549)				1,190,549
Total Investments - 105.1%
(Cost $18,872,800)			$	25,774,672
Other Assets & Liabilities, net - (5.1)%				(1,260,811	)
Total Net Assets - 100.0%			$	24,513,861

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	24,407,610	$	—	$	—	$	24,407,610
Repurchase Agreement		—		176,513		—		176,513
Securities Lending Collateral		1,190,549		—		—		1,190,549
Total	$	25,598,159	$	176,513	$	—	$	25,774,672

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

INTERNET FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,164,381 of securities loaned (cost $18,696,287)	$	25,598,159
Repurchase agreements, at value (cost $176,513)		176,513
Total investments (cost $18,872,800)		25,774,672
Receivables:
Securities sold		1,322,243
Fund shares sold		5,272
Dividends		2,189
Securities lending income		2,086
Interest		3
Total assets		27,106,465
Liabilities:
Payable for:
Fund shares redeemed		1,365,137
Return of securities loaned		1,190,549
Management fees		18,513
Transfer agent and administrative fees		5,445
Distribution and service fees		2,925
Portfolio accounting fees		2,178
Miscellaneous		7,857
Total liabilities		2,592,604
Commitments and contingent liabilities (Note 11)		—
Net assets	$	24,513,861
Net assets consist of:
Paid in capital	$	21,654,933
Accumulated net investment loss		(121,973	)
Accumulated net realized loss on investments		(3,920,971	)
Net unrealized appreciation on investments		6,901,872
Net assets	$	24,513,861
Investor Class:
Net assets	$	17,669,796
Capital shares outstanding		185,347
Net asset value per share	$	95.33
A-Class:
Net assets	$	2,139,390
Capital shares outstanding		23,836
Net asset value per share	$	89.75
Maximum offering price per share (Net asset value divided by 95.25%)	$	94.23
C-Class:
Net assets	$	2,321,041
Capital shares outstanding		28,816
Net asset value per share	$	80.55
H-Class:
Net assets	$	2,383,634
Capital shares outstanding		27,341
Net asset value per share	$	87.18

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $8,192)	$	185,978
Income from securities lending, net		14,992
Interest		485
Total investment income		201,455
Expenses:
Management fees		256,763
Transfer agent and administrative fees		75,518
Distribution and service fees:
A-Class		7,058
C-Class		26,196
H-Class		8,225
Portfolio accounting fees		30,207
Registration fees		23,707
Custodian fees		4,529
Trustees’ fees*		2,966
Line of credit fees		98
Miscellaneous		22,056
Total expenses		457,323
Net investment loss		(255,868	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		6,746,908
Net realized gain		6,746,908
Net change in unrealized appreciation (depreciation) on:
Investments		(1,908,519	)
Net change in unrealized appreciation (depreciation)		(1,908,519	)
Net realized and unrealized gain		4,838,389
Net increase in net assets resulting from operations	$	4,582,521

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

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

INTERNET FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(255,868	)	$	(292,593	)
Net realized gain (loss) on investments		6,746,908			(8,402,113	)
Net change in unrealized appreciation (depreciation) on investments		(1,908,519	)		2,939,491
Net increase (decrease) in net assets resulting from operations		4,582,521			(5,755,215	)
Distributions to shareholders from:
Net realized gains
Investor Class		—			(131,247	)
A-Class		—			(27,718	)
C-Class		—			(14,060	)
H-Class		—			(57,824	)*
Total distributions to shareholders		—			(230,849	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		156,156,448			97,142,398
A-Class		14,112,884			19,084,067
C-Class		2,667,685			7,825,210
H-Class		24,642,372			181,150,735	*
Distributions reinvested
Investor Class		—			130,284
A-Class		—			27,197
C-Class		—			13,853
H-Class		—			57,824	*
Cost of shares redeemed
Investor Class		(166,115,723	)		(78,468,395	)
A-Class		(14,079,122	)		(19,052,730	)
C-Class		(3,621,718	)		(7,377,638	)
H-Class		(29,999,192	)		(172,995,235	)*
Net increase (decrease) from capital share transactions		(16,236,366	)		27,537,570
Net increase (decrease) in net assets		(11,653,845	)		21,551,506
Net assets:
Beginning of year		36,167,706			14,616,200
End of year	$	24,513,861		$	36,167,706
Accumulated net investment loss at end of year	$	(121,973	)	$	(52,391	)
Capital share activity:
Shares sold
Investor Class		1,807,372			1,219,475
A-Class		181,366			253,474
C-Class		36,275			114,412	*
H-Class		326,408			2,463,941
Shares issued from reinvestment of distributions
Investor Class		—			1,607
A-Class		—			355
C-Class		—			199
H-Class		—			777	*
Shares redeemed
Investor Class		(1,935,644	)		(1,014,411	)
A-Class		(182,044	)		(256,742	)
C-Class		(49,537	)		(108,804	)
H-Class		(398,950	)		(2,390,380	)*
Net increase (decrease) in shares		(214,754	)		283,903

* 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 | 93

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	77.91		$	77.87		$	75.05		$	55.46		$	51.90
Income (loss) from investment operations:
Net investment income (loss)a		(.60	)		(.41	)		(.49	)		(.62	)		(.44	)
Net gain (loss) on investments (realized and unrealized)		18.02			.78			5.27			20.53			5.26
Total from investment operations		17.42			.37			4.78			19.91			4.82
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	$	95.33		$	77.91		$	77.87		$	75.05		$	55.46
Total Returnb		22.36	%		0.46	%		6.40	%		35.93	%		9.65	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	17,670		$	24,435		$	8,328		$	26,828		$	6,109
Ratios to average net assets:
Net investment income (loss)		(0.70	%)		(0.52	%)		(0.64	%)		(0.87	%)		(0.87	%)
Total expenses		1.37	%		1.35	%		1.35	%		1.37	%		1.35	%
Portfolio turnover rate		518	%		520	%		495	%		472	%		442	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	73.54		$	73.71		$	71.32		$	52.85		$	49.63
Income (loss) from investment operations:
Net investment income (loss)a		(.76	)		(.69	)		(.61	)		(.79	)		(.52	)
Net gain (loss) on investments (realized and unrealized)		16.97			.85			4.96			19.58			5.00
Total from investment operations		16.21			.16			4.35			18.79			4.48
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	$	89.75		$	73.54		$	73.71		$	71.32		$	52.85
Total Returnb		22.04	%		0.20	%		6.12	%		35.58	%		9.41	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,139		$	1,803		$	2,022		$	12,566		$	1,192
Ratios to average net assets:
Net investment income (loss)		(0.95	%)		(0.92	%)		(0.86	%)		(1.12	%)		(1.08	%)
Total expenses		1.62	%		1.60	%		1.61	%		1.62	%		1.60	%
Portfolio turnover rate		518	%		520	%		495	%		472	%		442	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	66.49		$	67.17		$	65.64		$	49.03		$	46.50
Income (loss) from investment operations:
Net investment income (loss)a		(1.24	)		(1.03	)		(1.11	)		(1.16	)		(.85	)
Net gain (loss) on investments (realized and unrealized)		15.30			.68			4.60			18.09			4.64
Total from investment operations		14.06			(.35	)		3.49			16.93			3.79
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	$	80.55		$	66.49		$	67.17		$	65.64		$	49.03
Total Returnb		21.13	%		(0.54	%)		5.34	%		34.56	%		8.55	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,321		$	2,798		$	2,436		$	4,655		$	1,111
Ratios to average net assets:
Net investment income (loss)		(1.71	%)		(1.53	%)		(1.68	%)		(1.85	%)		(1.91	%)
Total expenses		2.37	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		518	%		520	%		495	%		472	%		442	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	71.40		$	71.64		$	69.58		$	51.70		$	48.71
Income (loss) from investment operations:
Net investment income (loss)a		(.78	)		(.72	)		(.78	)		(1.07	)		(.64	)
Net gain (loss) on investments (realized and unrealized)		16.56			.81			4.80			19.27			4.89
Total from investment operations		15.78			.09			4.02			18.20			4.25
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	$	87.18		$	71.40		$	71.64		$	69.58		$	51.70
Total Returnb		22.09	%		0.11	%		5.80	%		35.23	%		9.13	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,384		$	7,132		$	1,830		$	11,814		$	552
Ratios to average net assets:
Net investment income (loss)		(1.03	%)		(0.97	%)		(1.12	%)		(1.53	%)		(1.36	%)
Total expenses		1.62	%		1.67	%		1.85	%		1.87	%		1.85	%
Portfolio turnover rate		518	%		520	%		495	%		472	%		442	%

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 | 95

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Leisure Fund Investor Class returned 16.20%, compared with 13.17% for the S&P 500 Consumer Discretionary Index. The broader S&P 500 Index returned 17.17%.

The media industry was the largest contributor to return, followed by the hotels, restaurants & leisure industry. The leisure products industry was the only detractor; the equity real estate investment trust (REITs) industry contributed least.

Among the holdings that contributed the most to the Fund’s performance for the period were Charter Communications, Inc. — Class A, Comcast Corp. — Class A, and Time Warner, Inc. The Fund’s weakest holdings for the period were Vista Outdoor, Inc., Gannett Co., Inc., and Liberty Global plc — Class C.

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.	3.6%
Comcast Corp. — Class A	3.5%
Philip Morris International, Inc.	3.5%
Altria Group, Inc.	3.0%
McDonald’s Corp.	2.7%
Charter Communications, Inc. — Class A	2.7%
Reynolds American, Inc.	2.5%
Starbucks Corp.	2.5%
Time Warner, Inc.	2.3%
Twenty-First Century Fox, Inc. — Class A	2.1%
Top Ten Total	28.4%

“Ten Largest Holdings” excludes any temporary cash investments.

96 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	16.20%	14.83%	7.47%
A-Class Shares	15.91%	14.54%	7.20%
A-Class Shares with sales charge†	10.40%	13.43%	6.68%
C-Class Shares	15.05%	13.69%	6.40%
C-Class Shares with CDSC‡	14.05%	13.69%	6.40%
H-Class Shares**	15.90%	14.36%	7.00%
S&P 500 Consumer Discretionary Index	13.17%	16.25%	10.61%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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 | 97

SCHEDULE OF INVESTMENTS	March 31, 2017
LEISURE FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Media - 28.6%
Walt Disney Co.		6,807	$	771,846
Comcast Corp. — Class A		20,300		763,077
Charter Communications, Inc. — Class A*		1,776		581,320
Time Warner, Inc.		5,072		495,585
Twenty-First Century Fox, Inc. — Class A		13,979		452,780
CBS Corp. — Class B		4,495		311,772
DISH Network Corp. — Class A*		4,906		311,482
Viacom, Inc. — Class B		5,432		253,240
Discovery Communications, Inc. — Class A*		8,271		240,603
Liberty Broadband Corp. — Class C*		2,640		228,096
Liberty Global plc — Class C*		6,059		212,307
Scripps Networks Interactive, Inc. — Class A		2,314		181,348
Grupo Televisa SAB ADR		6,740		174,836
News Corp. — Class A		12,295		159,835
TEGNA, Inc.		5,209		133,455
Sinclair Broadcast Group, Inc. — Class A1		2,880		116,640
AMC Networks, Inc. — Class A*,1		1,960		115,013
Cable One, Inc.		170		106,160
Nexstar Media Group, Inc. — Class A		1,499		105,155
Tribune Media Co. — Class A		2,800		104,356
Meredith Corp.		1,540		99,484
Time, Inc.		4,115		79,625
MSG Networks, Inc. — Class A*		3,270		76,355
Scholastic Corp.		1,570		66,835
Gray Television, Inc.*		4,190		60,755
Total Media				6,201,960
Retail - 18.7%
McDonald’s Corp.		4,569		592,187
Starbucks Corp.		9,304		543,260
Yum! Brands, Inc.		4,261		272,278
Chipotle Mexican Grill, Inc. — Class A*		488		217,414
Darden Restaurants, Inc.		2,323		194,365
Yum China Holdings, Inc.*		6,871		186,891
Domino’s Pizza, Inc.		924		170,293
Restaurant Brands International, Inc.		2,771		154,456
Panera Bread Co. — Class A*,1		568		148,742
Dunkin’ Brands Group, Inc.		2,310		126,311
Cracker Barrel Old Country Store, Inc.1		700		111,475
Wendy’s Co.		7,770		105,750
Texas Roadhouse, Inc. — Class A		2,324		103,488
Jack in the Box, Inc.		1,010		102,737
Papa John’s International, Inc.		1,264		101,171
Cheesecake Factory, Inc.		1,590		100,742
Buffalo Wild Wings, Inc.*		607		92,719
Dave & Buster’s Entertainment, Inc.*		1,516		92,612
Brinker International, Inc.1		1,944		85,458
Bloomin’ Brands, Inc.		4,272		84,287
Bob Evans Farms, Inc.		1,030		66,816
Shake Shack, Inc. — Class A*		1,950		65,130
Sonic Corp.		2,459		62,360
DineEquity, Inc.		1,060		57,685
BJ’s Restaurants, Inc.*		1,360		54,944
Wingstop, Inc.1		1,892		53,506
Red Robin Gourmet Burgers, Inc.*		890		52,021
Fiesta Restaurant Group, Inc.*		1,980		47,916
Total Retail				4,047,014
Lodging - 11.5%
Las Vegas Sands Corp.		6,747		385,052
Marriott International, Inc. — Class A		3,767		354,777
Hilton Worldwide Holdings, Inc.		4,300		251,378
MGM Resorts International		8,370		229,338
Melco Crown Entertainment Ltd. ADR		11,323		209,928
Wynn Resorts Ltd.		1,761		201,828
Wyndham Worldwide Corp.		2,011		169,507
Hyatt Hotels Corp. — Class A*,1		2,790		150,604
Choice Hotels International, Inc.		1,720		107,672
ILG, Inc.		4,634		97,129
Hilton Grand Vacations, Inc.*		3,347		95,925
Boyd Gaming Corp.*		4,295		94,533
La Quinta Holdings, Inc.*		5,208		70,412
Caesars Entertainment Corp.*		7,140		68,187
Total Lodging				2,486,270
Agriculture - 10.7%
Philip Morris International, Inc.		6,702		756,655
Altria Group, Inc.		9,202		657,207
Reynolds American, Inc.		8,686		547,392
British American Tobacco plc ADR1		2,770		183,706
Vector Group Ltd.		4,493		93,454
Universal Corp.		1,109		78,462
Total Agriculture				2,316,876
Entertainment - 9.1%
Vail Resorts, Inc.		840		161,196
IMAX Corp.*		4,540		154,360
Six Flags Entertainment Corp.		2,250		133,853
Lions Gate Entertainment Corp. — Class A*		5,009		133,039
Cinemark Holdings, Inc.		2,986		132,399
Lions Gate Entertainment Corp. — Class B*		5,381		131,189
Madison Square Garden Co. — Class A*		623		124,419
International Game Technology plc		5,200		123,240
AMC Entertainment Holdings, Inc. — Class A		3,760		118,252
Regal Entertainment Group — Class A1		4,800		108,384
Marriott Vacations Worldwide Corp.		961		96,033
Churchill Downs, Inc.		585		92,926
Red Rock Resorts, Inc. — Class A		4,177		92,646
Scientific Games Corp. — Class A*		3,653		86,393
Penn National Gaming, Inc.*		4,357		80,300
International Speedway Corp. — Class A		1,990		73,531
SeaWorld Entertainment, Inc.		3,890		71,070
Pinnacle Entertainment, Inc.*		3,146		61,410
Total Entertainment				1,974,640

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
LEISURE FUND

	Shares		Value
Leisure Time - 6.5%
Carnival Corp.		6,369	$	375,198
Royal Caribbean Cruises Ltd.		2,692		264,112
Norwegian Cruise Line Holdings Ltd.*		3,800		192,774
Harley-Davidson, Inc.		3,049		184,465
Brunswick Corp.		2,185		133,722
Polaris Industries, Inc.1		1,500		125,700
Planet Fitness, Inc. — Class A1		3,990		76,887
Vista Outdoor, Inc.*		2,998		61,729
Total Leisure Time				1,414,587
Beverages - 5.7%
Constellation Brands, Inc. — Class A		1,986		321,871
Molson Coors Brewing Co. — Class B		2,675		256,024
Brown-Forman Corp. — Class B		5,208		240,505
Anheuser-Busch InBev S.A. ADR		1,763		193,507
Diageo plc ADR		1,370		158,345
Boston Beer Company, Inc. — Class A*,1		530		76,665
Total Beverages				1,246,917
Software - 3.7%
Activision Blizzard, Inc.		7,085		353,259
Electronic Arts, Inc.*		3,370		301,682
Take-Two Interactive Software, Inc.*		2,389		141,596
Total Software				796,537
Toys, Games & Hobbies - 1.7%
Hasbro, Inc.		2,032		202,834
Mattel, Inc.		6,669		170,793
Total Toys, Games & Hobbies				373,627
REITs - 1.3%
Gaming and Leisure Properties, Inc.		4,668		156,005
Park Hotels & Resorts, Inc.		5,115		131,302
Total REITs				287,307
Food Service - 0.8%
Aramark		4,616		170,192
Commercial Services - 0.7%
Live Nation Entertainment, Inc.*		4,791		145,503
Miscellaneous Manufacturing - 0.5%
American Outdoor Brands Corp.*,1		3,060		60,618
Sturm Ruger & Company, Inc.1		1,050		56,228
Total Miscellaneous Manufacturing				116,846
Total Common Stocks
(Cost $15,702,115)				21,578,276
RIGHTS††† - 0.0%**
Nexstar Media Group CVR
Expires 01/18/19		8,160		—
Total Rights
(Cost $—)				—
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.1%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	29,733		29,733
Total Repurchase Agreement
(Cost $29,733)				29,733
	Shares
SECURITIES LENDING COLLATERAL†,3 - 4.2%
First American Government Obligations Fund — Class Z, 0.61%4		908,995		908,995
Total Securities Lending Collateral
(Cost $908,995)				908,995
Total Investments - 103.8%
(Cost $16,640,843)			$	22,517,004
Other Assets & Liabilities, net - (3.8)%				(827,412	)
Total Net Assets - 100.0%			$	21,689,592

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6
4	Rate indicated is the 7 day yield as of March 31, 2017.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	CVR — Contingent Value Rights
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
LEISURE FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3			Total
Common Stocks	$	21,578,276	$	—	$	—		$	21,578,276
Repurchase Agreement		—		29,733		—			29,733
Rights		—		—		—	*		—
Securities Lending Collateral		908,995		—		—			908,995
Total	$	22,487,271	$	29,733	$	—		$	22,517,004

* Security has a market value of $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

LEISURE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $892,138 of securities loaned (cost $16,611,110)	$	22,487,271
Repurchase agreements, at value (cost $29,733)		29,733
Total investments (cost $16,640,843)		22,517,004
Receivables:
Fund shares sold		2,530,913
Securities sold		63,990
Dividends		44,022
Foreign taxes reclaim		3,881
Securities lending income		572
Total assets		25,160,382
Liabilities:
Payable for:
Securities purchased		2,527,518
Return of securities loaned		908,995
Management fees		15,486
Transfer agent and administrative fees		4,555
Fund shares redeemed		4,492
Distribution and service fees		2,093
Portfolio accounting fees		1,822
Miscellaneous		5,829
Total liabilities		3,470,790
Commitments and contingent liabilities (Note 11)		—
Net assets	$	21,689,592
Net assets consist of:
Paid in capital	$	16,688,048
Undistributed net investment income		470,823
Accumulated net realized gain on investments		(1,345,440	)
Net unrealized appreciation on investments		5,876,161
Net assets	$	21,689,592
Investor Class:
Net assets	$	14,412,728
Capital shares outstanding		203,131
Net asset value per share	$	70.95
A-Class:
Net assets	$	2,180,320
Capital shares outstanding		33,019
Net asset value per share	$	66.03
Maximum offering price per share (Net asset value divided by 95.25%)	$	69.32
C-Class:
Net assets	$	1,327,059
Capital shares outstanding		22,035
Net asset value per share	$	60.23
H-Class:
Net assets	$	3,769,485
Capital shares outstanding		58,549
Net asset value per share	$	64.38

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $3,409)	$	589,929
Income from securities lending, net		4,090
Interest		384
Total investment income		594,403
Expenses:
Management fees		240,244
Transfer agent and administrative fees		70,660
Distribution and service fees:
A-Class		16,463
C-Class		12,568
H-Class		13,654
Portfolio accounting fees		28,264
Registration fees		22,014
Custodian fees		4,142
Trustees’ fees*		1,887
Line of credit fees		101
Miscellaneous		22,383
Total expenses		432,380
Net investment income		162,023
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		6,743,496
Net realized gain		6,743,496
Net change in unrealized appreciation (depreciation) on:
Investments		(1,727,882	)
Net change in unrealized appreciation (depreciation)		(1,727,882	)
Net realized and unrealized gain		5,015,614
Net increase in net assets resulting from operations	$	5,177,637

* 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 | 101

LEISURE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	162,023		$	131,755
Net realized gain (loss) on investments		6,743,496			(3,323,030	)
Net change in unrealized appreciation (depreciation) on investments		(1,727,882	)		84,303
Net increase (decrease) in net assets resulting from operations		5,177,637			(3,106,972	)
Distributions to shareholders from:
Net investment income
Investor Class		(79,568	)		(136,576	)
A-Class		(31,053	)		(73,115	)
C-Class		(6,507	)		(10,686	)
H-Class		(14,627	)		(65,152	)*
Net realized gains
Investor Class		—			(46,005	)
A-Class		—			(24,629	)
C-Class		—			(3,600	)
H-Class		—			(21,946	)*
Total distributions to shareholders		(131,755	)		(381,709	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		73,417,889			71,375,657
A-Class		17,978,158			23,772,534
C-Class		303,924			946,866
H-Class		38,389,308			98,127,231	*
Distributions reinvested
Investor Class		77,283			178,912
A-Class		29,016			83,611
C-Class		6,322			13,503
H-Class		14,567			87,017	*
Cost of shares redeemed
Investor Class		(77,077,573	)		(102,869,164	)
A-Class		(24,564,037	)		(26,178,067	)
C-Class		(505,982	)		(1,158,823	)
H-Class		(49,153,554	)		(91,022,759	)*
Net decrease from capital share transactions		(21,084,679	)		(26,643,482	)
Net decrease in net assets		(16,038,797	)		(30,132,163	)
Net assets:
Beginning of year		37,728,389			67,860,552
End of year	$	21,689,592		$	37,728,389
Undistributed net investment income at end of year	$	470,823		$	131,755

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

LEISURE FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:
Shares sold
Investor Class		1,144,896			1,162,945
A-Class		304,282			421,600
C-Class		5,480			18,122
H-Class		661,870			1,771,250	*
Shares issued from reinvestment of distributions
Investor Class		1,225			2,989
A-Class		494			1,495
C-Class		118			262
H-Class		254			1,596	*
Shares redeemed
Investor Class		(1,190,262	)		(1,716,917	)
A-Class		(411,259	)		(471,745	)
C-Class		(9,257	)		(22,844	)
H-Class		(840,148	)		(1,663,736	)*
Net decrease in shares		(332,307	)		(494,983	)

* 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 | 103

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	61.36		$	60.75		$	55.81		$	44.93		$	36.94
Income (loss) from investment operations:
Net investment income (loss)a		.52			.22			.52			.20			.36
Net gain (loss) on investments (realized and unrealized)		9.38			.82			5.64			10.95			7.66
Total from investment operations		9.90			1.04			6.16			11.15			8.02
Less distributions from:
Net investment income		(.31	)		(.32	)		(.12	)		(.27	)		(.03	)
Net realized gains		—			(.11	)		(1.10	)		—			—
Total distributions		(.31	)		(.43	)		(1.22	)		(.27	)		(.03	)
Net asset value, end of period	$	70.95		$	61.36		$	60.75		$	55.81		$	44.93
Total Returnb		16.20	%		1.72	%		11.15	%		24.83	%		21.74	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	14,413		$	15,173		$	48,494		$	24,139		$	22,005
Ratios to average net assets:
Net investment income (loss)		0.81	%		0.35	%		0.89	%		0.39	%		0.92	%
Total expenses		1.38	%		1.34	%		1.34	%		1.37	%		1.35	%
Portfolio turnover rate		352	%		339	%		343	%		265	%		517	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	57.27		$	56.88		$	52.46		$	42.35		$	34.91
Income (loss) from investment operations:
Net investment income (loss)a		.23			.08			.38			.04			.29
Net gain (loss) on investments (realized and unrealized)		8.84			.74			5.26			10.34			7.18
Total from investment operations		9.07			.82			5.64			10.38			7.47
Less distributions from:
Net investment income		(.31	)		(.32	)		(.12	)		(.27	)		(.03	)
Net realized gains		—			(.11	)		(1.10	)		—			—
Total distributions		(.31	)		(.43	)		(1.22	)		(.27	)		(.03	)
Net asset value, end of period	$	66.03		$	57.27		$	56.88		$	52.46		$	42.35
Total Returnb		15.91	%		1.45	%		10.86	%		24.53	%		21.42	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,180		$	7,990		$	10,703		$	1,778		$	1,409
Ratios to average net assets:
Net investment income (loss)		0.40	%		0.15	%		0.69	%		0.09	%		0.80	%
Total expenses		1.62	%		1.60	%		1.58	%		1.62	%		1.60	%
Portfolio turnover rate		352	%		339	%		343	%		265	%		517	%

104 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	52.65		$	52.72		$	49.07		$	39.92		$	33.16
Income (loss) from investment operations:
Net investment income (loss)a		(.18	)		(.28	)		(.19	)		(.27	)		.01
Net gain (loss) on investments (realized and unrealized)		8.07			.64			5.06			9.69			6.78
Total from investment operations		7.89			.36			4.87			9.42			6.79
Less distributions from:
Net investment income		(.31	)		(.32	)		(.12	)		(.27	)		(.03	)
Net realized gains		—			(.11	)		(1.10	)		—			—
Total distributions		(.31	)		(.43	)		(1.22	)		(.27	)		(.03	)
Net asset value, end of period	$	60.23		$	52.65		$	52.72		$	49.07		$	39.92
Total Returnb		15.05	%		0.69	%		10.04	%		23.61	%		20.54	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,327		$	1,353		$	1,590		$	1,460		$	928
Ratios to average net assets:
Net investment income (loss)		(0.33	%)		(0.54	%)		(0.37	%)		(0.59	%)		0.03	%
Total expenses		2.37	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		352	%		339	%		343	%		265	%		517	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	55.85		$	55.50		$	51.31		$	41.54		$	34.33
Income (loss) from investment operations:
Net investment income (loss)a		.20			.27			.30			(.11	)		.29
Net gain (loss) on investments (realized and unrealized)		8.64			.51			5.11			10.15			6.95
Total from investment operations		8.84			.78			5.41			10.04			7.24
Less distributions from:
Net investment income		(.31	)		(.32	)		(.12	)		(.27	)		(.03	)
Net realized gains		—			(.11	)		(1.10	)		—			—
Total distributions		(.31	)		(.43	)		(1.22	)		(.27	)		(.03	)
Net asset value, end of period	$	64.38		$	55.85		$	55.50		$	51.31		$	41.54
Total Returnb		15.90	%		1.41	%		10.66	%		24.18	%		21.12	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,769		$	13,212		$	7,074		$	3,115		$	1,241
Ratios to average net assets:
Net investment income (loss)		0.34	%		0.49	%		0.55	%		(0.23	%)		0.80	%
Total expenses		1.63	%		1.64	%		1.83	%		1.87	%		1.85	%
Portfolio turnover rate		352	%		339	%		343	%		265	%		517	%

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 | 105

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Precious Metals Fund Investor Class returned 17.82%, compared with 19.22% for the S&P 500 Materials Index. The broader S&P 500 Index returned 17.17%.

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 Barrick Gold Corp., Newmont Mining Corp., and Pretium Resources, Inc. The leading detractors were Sibanye Gold Ltd. ADR, Harmony Gold Mining Company Ltd. ADR, and New 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%
Freeport-McMoRan, Inc.	6.3%
Newmont Mining Corp.	6.0%
Goldcorp, Inc.	4.8%
Franco-Nevada Corp.	4.8%
Agnico Eagle Mines Ltd.	4.4%
Silver Wheaton Corp.	4.4%
Randgold Resources Ltd. ADR	4.0%
VanEck Vectors Junior Gold Miners ETF	3.8%
Royal Gold, Inc.	3.1%
Top Ten Total	48.2%

“Ten Largest Holdings” excludes any temporary cash investments.

106 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	16.91%	-12.12%	-4.71%
A-Class Shares	16.59%	-12.36%	-4.96%
A-Class Shares with sales charge†	11.04%	-13.21%	-5.42%
C-Class Shares	15.76%	-12.99%	-5.66%
C-Class Shares with CDSC‡	14.76%	-12.99%	-5.66%
H-Class Shares**	16.65%	-12.50%	-5.15%
S&P 500 Materials Index	19.22%	9.46%	5.75%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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 | 107

SCHEDULE OF INVESTMENTS	March 31, 2017
PRECIOUS METALS FUND

	Shares		Value
COMMON STOCKS† - 96.4%
Mining - 96.4%
Barrick Gold Corp.		233,048	$	4,425,583
Freeport-McMoRan, Inc.*		313,436		4,187,505
Newmont Mining Corp.		121,764		4,013,342
Goldcorp, Inc.		220,927		3,223,325
Franco-Nevada Corp.		48,483		3,176,121
Agnico Eagle Mines Ltd.		68,614		2,911,978
Silver Wheaton Corp.		139,362		2,904,304
Randgold Resources Ltd. ADR		30,654		2,675,481
Royal Gold, Inc.		29,747		2,083,777
AngloGold Ashanti Ltd. ADR1		181,021		1,949,596
Kinross Gold Corp.*		553,408		1,942,462
Cia de Minas Buenaventura S.A.A. ADR		135,436		1,630,649
Gold Fields Ltd. ADR		442,121		1,560,687
Pan American Silver Corp.		87,975		1,541,322
Tahoe Resources, Inc.		190,368		1,528,655
Eldorado Gold Corp.1		442,441		1,508,724
B2Gold Corp.*		521,323		1,475,344
Alamos Gold, Inc. — Class A		182,820		1,468,045
Yamana Gold, Inc.1		525,428		1,450,181
Hecla Mining Co.		260,388		1,377,453
Sibanye Gold Ltd. ADR1		153,782		1,354,819
Stillwater Mining Co.*		77,703		1,341,931
Pretium Resources, Inc.*,1		122,776		1,314,931
IAMGOLD Corp.*		312,881		1,251,524
New Gold, Inc.*		413,918		1,233,476
Coeur Mining, Inc.*		140,159		1,132,485
Novagold Resources, Inc.*		226,323		1,102,193
First Majestic Silver Corp.*,1		134,345		1,090,881
Silver Standard Resources, Inc.*		97,685		1,036,438
Harmony Gold Mining Company Ltd. ADR1		397,549		973,995
McEwen Mining, Inc.1		278,657		847,117
Fortuna Silver Mines, Inc.*		157,373		818,340
Sandstorm Gold Ltd.*,1		174,514		745,175
Seabridge Gold, Inc.*,1		63,931		703,241
Richmont Mines, Inc.*		83,164		590,464
Endeavour Silver Corp.*,1		182,650		580,827
MAG Silver Corp.*		34,200		449,046
Gold Resource Corp.		50,500		228,260
AuRico Metals, Inc.*		5		4
Total Mining				63,829,681
Total Common Stocks
(Cost $43,726,160)				63,829,681
EXCHANGE-TRADED FUNDS† - 3.8%
VanEck Vectors Junior Gold Miners ETF		70,578		2,539,396
Total Exchange-Traded Funds
(Cost $1,636,478)				2,539,396
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.2%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	116,578		116,578
Total Repurchase Agreement
(Cost $116,578)				116,578
	Shares
SECURITIES LENDING COLLATERAL†,3 - 10.1%
First American Government Obligations Fund — Class Z, 0.61%4		6,731,112		6,731,112
Total Securities Lending Collateral
(Cost $6,731,112)				6,731,112
Total Investments - 110.6%
(Cost $52,210,328)			$	73,216,767
Other Assets & Liabilities, net - (10.6)%				(7,040,216	)
Total Net Assets - 100.0%			$	66,176,551

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	ADR — American Depositary Receipt
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
PRECIOUS METALS FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	63,829,681	$	—	$	—	$	63,829,681
Exchange-Traded Funds		2,539,396		—		—		2,539,396
Repurchase Agreement		—		116,578		—		116,578
Securities Lending Collateral		6,731,112		—		—		6,731,112
Total	$	73,100,189	$	116,578	$	—	$	73,216,767

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

PRECIOUS METALS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $6,470,140 of securities loaned (cost $52,093,750)	$	73,100,189
Repurchase agreements, at value (cost $116,578)		116,578
Total investments (cost $52,210,328)		73,216,767
Receivables:
Securities sold		1,177,941
Fund shares sold		697,422
Dividends		47,824
Securities lending income		5,755
Total assets		75,145,709
Liabilities:
Payable for:
Return of securities loaned		6,731,112
Fund shares redeemed		1,628,638
Deferred foreign capital gains taxes		518,061
Management fees		40,789
Transfer agent and administrative fees		13,596
Distribution and service fees		9,476
Portfolio accounting fees		5,438
Miscellaneous		22,048
Total liabilities		8,969,158
Commitments and contingent liabilities (Note 11)		—
Net assets	$	66,176,551
Net assets consist of:
Paid in capital	$	100,487,649
Accumulated net investment loss		(234,463	)
Accumulated net realized loss on investments		(54,905,569	)
Net unrealized appreciation on investments		20,828,934
Net assets	$	66,176,551
Investor Class:
Net assets	$	43,530,155
Capital shares outstanding		1,412,242
Net asset value per share	$	30.82
A-Class:
Net assets	$	12,085,191
Capital shares outstanding		408,434
Net asset value per share	$	29.59
Maximum offering price per share (Net asset value divided by 95.25%)	$	31.07
C-Class:
Net assets	$	7,606,921
Capital shares outstanding		293,859
Net asset value per share	$	25.89
H-Class:
Net assets	$	2,954,284
Capital shares outstanding		102,841
Net asset value per share	$	28.73

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $40,173)	$	564,450
Income from securities lending, net		31,437
Interest		1,744
Total investment income		597,631
Expenses:
Management fees		725,776
Transfer agent and administrative fees		241,925
Distribution and service fees:
A-Class		29,377
C-Class		84,106
H-Class		13,493
Portfolio accounting fees		96,769
Custodian fees		14,558
Trustees’ fees*		11,043
Line of credit fees		151
Miscellaneous		141,760
Total expenses		1,358,958
Net investment loss		(761,327	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		10,615,233	a
Foreign currency		(51	)
Net realized gain		10,615,182
Net change in unrealized appreciation (depreciation) on:
Investments		(1,934,542	)b
Net change in unrealized appreciation (depreciation)		(1,934,542	)
Net realized and unrealized gain		8,680,640
Net increase in net assets resulting from operations	$	7,919,313

*	Relates to Trustees not deemed “interested persons” within the meaning of Section 2(a)(19) of the 1940 Act.
a	Net of foreign capital gain taxes of $340,556.
b	Net of deferred foreign capital gain taxes of $177,505.

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

PRECIOUS METALS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(761,327	)	$	(184,033	)
Net realized gain (loss) on investments		10,615,182			(7,581,988	)
Net change in unrealized appreciation (depreciation) on investments		(1,934,542	)		12,729,730
Net increase in net assets resulting from operations		7,919,313			4,963,709
Distributions to shareholders from:
Net investment income
Investor Class		(2,205,828	)		(126,920	)
A-Class		(423,349	)		(12,863	)
C-Class		(340,156	)		(26,376	)
H-Class		(148,234	)		(17,754	)*
Total distributions to shareholders		(3,117,567	)		(183,913	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		617,795,119			253,246,357
A-Class		28,200,735			32,975,820
C-Class		9,381,549			11,345,908
H-Class		78,064,423			219,344,787	*
Distributions reinvested
Investor Class		2,149,219			121,222
A-Class		409,011			9,017
C-Class		335,809			26,086
H-Class		147,702			17,751	*
Cost of shares redeemed
Investor Class		(629,758,275	)		(238,675,293	)
A-Class		(20,496,890	)		(34,545,272	)
C-Class		(9,377,725	)		(10,512,858	)
H-Class		(77,888,581	)		(225,166,382	)*
Net increase (decrease) from capital share transactions		(1,037,904	)		8,187,143
Net increase in net assets		3,763,842			12,966,939
Net assets:
Beginning of year		62,412,709			49,445,770
End of year	$	66,176,551		$	62,412,709
Accumulated net investment loss/Undistributed net investment income at end of year	$	(234,463	)	$	75,723
Capital share activity:
Shares sold
Investor Class		17,910,788			11,832,927
A-Class		836,189			1,496,099
C-Class		313,607			599,391
H-Class		2,469,224			10,896,192	*
Shares issued from reinvestment of distributions
Investor Class		70,420			6,994
A-Class		13,945			540
C-Class		13,051			1,755
H-Class		5,186			1,092	*
Shares redeemed
Investor Class		(18,370,925	)		(11,253,817	)
A-Class		(582,330	)		(1,558,936	)
C-Class		(324,703	)		(567,160	)
H-Class		(2,471,225	)		(11,153,001	)*
Net increase (decrease) in shares		(116,773	)		302,076

* 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 | 111

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	27.37		$	25.11		$	35.78		$	51.65		$	65.73
Income (loss) from investment operations:
Net investment income (loss)a		(.23	)		(.07	)		.01			.36			.34
Net gain (loss) on investments (realized and unrealized)		4.85			2.44			(9.88	)		(16.06	)		(12.12	)
Total from investment operations		4.62			2.37			(9.87	)		(15.70	)		(11.78	)
Less distributions from:
Net investment income		(1.17	)		(.11	)		(.80	)		(.17	)		(.10	)
Net realized gains		—			—			—			—			(2.20	)
Total distributions		(1.17	)		(.11	)		(.80	)		(.17	)		(2.30	)
Net asset value, end of period	$	30.82		$	27.37		$	25.11		$	35.78		$	51.65
Total Returnb		16.91	%		9.67	%		(27.88	%)		(30.37	%)		(18.60	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	43,530		$	49,321		$	30,528		$	42,846		$	71,386
Ratios to average net assets:
Net investment income (loss)		(0.67	%)		(0.31	%)		0.04	%		0.96	%		0.55	%
Total expensesc		1.27	%		1.25	%		1.25	%		1.27	%		1.25	%
Portfolio turnover rate		508	%		797	%		371	%		348	%		206	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	26.39		$	24.28		$	34.75		$	50.28		$	64.21
Income (loss) from investment operations:
Net investment income (loss)a		(.27	)		(.12	)		(.10	)		.16			.21
Net gain (loss) on investments (realized and unrealized)		4.64			2.34			(9.57	)		(15.52	)		(11.84	)
Total from investment operations		4.37			2.22			(9.67	)		(15.36	)		(11.63	)
Less distributions from:
Net investment income		(1.17	)		(.11	)		(.80	)		(.17	)		(.10	)
Net realized gains		—			—			—			—			(2.20	)
Total distributions		(1.17	)		(.11	)		(.80	)		(.17	)		(2.30	)
Net asset value, end of period	$	29.59		$	26.39		$	24.28		$	34.75		$	50.28
Total Returnb		16.59	%		9.38	%		(28.13	%)		(30.52	%)		(18.80	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	12,085		$	3,711		$	4,928		$	5,235		$	5,988
Ratios to average net assets:
Net investment income (loss)		(0.82	%)		(0.54	%)		(0.29	%)		0.45	%		0.35	%
Total expensesc		1.52	%		1.50	%		1.50	%		1.52	%		1.50	%
Portfolio turnover rate		508	%		797	%		371	%		348	%		206	%

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

PRECIOUS METALS FUND

FINANCIAL HIGHLIGHTS (concluded)

This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	23.38		$	21.67		$	31.34		$	45.72		$	59.02
Income (loss) from investment operations:
Net investment income (loss)a		(.46	)		(.26	)		(.29	)		(.07	)		(.23	)
Net gain (loss) on investments (realized and unrealized)		4.14			2.08			(8.58	)		(14.14	)		(10.77	)
Total from investment operations		3.68			1.82			(8.87	)		(14.21	)		(11.00	)
Less distributions from:
Net investment income		(1.17	)		(.11	)		(.80	)		(.17	)		(.10	)
Net realized gains		—			—			—			—			(2.20	)
Total distributions		(1.17	)		(.11	)		(.80	)		(.17	)		(2.30	)
Net asset value, end of period	$	25.89		$	23.38		$	21.67		$	31.34		$	45.72
Total Returnb		15.76	%		8.66	%		(28.64	%)		(31.05	%)		(19.39	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,607		$	6,825		$	5,590		$	9,250		$	18,608
Ratios to average net assets:
Net investment income (loss)		(1.59	%)		(1.34	%)		(0.99	%)		(0.22	%)		(0.42	%)
Total expensesc		2.27	%		2.25	%		2.25	%		2.27	%		2.25	%
Portfolio turnover rate		508	%		797	%		371	%		348	%		206	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	25.64		$	23.64		$	33.92		$	49.20		$	63.02
Income (loss) from investment operations:
Net investment income (loss)a		(.31	)		(.11	)		(.14	)		.12			(.02	)
Net gain (loss) on investments (realized and unrealized)		4.57			2.22			(9.34	)		(15.23	)		(11.50	)
Total from investment operations		4.26			2.11			(9.48	)		(15.11	)		(11.52	)
Less distributions from:
Net investment income		(1.17	)		(.11	)		(.80	)		(.17	)		(.10	)
Net realized gains		—			—			—			—			(2.20	)
Total distributions		(1.17	)		(.11	)		(.80	)		(.17	)		(2.30	)
Net asset value, end of period	$	28.73		$	25.64		$	23.64		$	33.92		$	49.20
Total Returnb		16.65	%		9.17	%		(28.24	%)		(30.71	%)		(18.99	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,954		$	2,556		$	8,400		$	4,009		$	3,148
Ratios to average net assets:
Net investment income (loss)		(0.94	%)		(0.53	%)		(0.45	%)		0.34	%		(0.04	%)
Total expensesc		1.52	%		1.59	%		1.75	%		1.77	%		1.75	%
Portfolio turnover rate		508	%		797	%		371	%		348	%		206	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Real Estate Fund H-Class returned 7.18%, compared to a return of 3.17% for the MSCI U.S. REIT Index. The broader S&P 500 Index returned 17.17%.

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 American Tower Corp. — Class A, Equinix, Inc., and New Residential Investment Corp. The main detractors were Simon Property Group, Inc., Public Storage, and GGP, 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)
Simon Property Group, Inc.	2.1%
American Tower Corp. — Class A	2.1%
Public Storage	1.8%
Crown Castle International Corp.	1.7%
Equinix, Inc.	1.6%
Prologis, Inc.	1.5%
Welltower, Inc.	1.5%
Weyerhaeuser Co.	1.4%
AvalonBay Communities, Inc.	1.4%
Ventas, Inc.	1.4%
Top Ten Total	16.5%

“Ten Largest Holdings” excludes any temporary cash investments.

114 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	7.17%	7.60%	1.44%
A-Class Shares with sales charge†	2.08%	6.56%	0.95%
C-Class Shares	6.37%	6.78%	0.65%
C-Class Shares with CDSC‡	5.37%	6.78%	0.65%
H-Class Shares	7.18%	7.57%	1.42%
MSCI U.S. REIT Index	3.17%	9.82%	4.71%
S&P 500 Index	17.17%	13.30%	7.51%

*	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.

THE RYDEX FUNDS ANNUAL REPORT | 115

SCHEDULE OF INVESTMENTS	March 31, 2017
REAL ESTATE FUND

	Shares		Value
COMMON STOCKS† - 99.5%
REITs - 95.4%
REITs-DIVERSIFIED - 25.8%
American Tower Corp. — Class A		1,573	$	191,181
Crown Castle International Corp.		1,642		155,086
Equinix, Inc.		367		146,935
Weyerhaeuser Co.		3,858		131,095
Vornado Realty Trust		1,106		110,943
Digital Realty Trust, Inc.		1,030		109,582
SBA Communications Corp.*		840		101,111
Duke Realty Corp.		3,053		80,202
Gaming and Leisure Properties, Inc.		2,109		70,483
Colony NorthStar, Inc. — Class A		5,373		69,365
Lamar Advertising Co. — Class A		919		68,686
WP Carey, Inc.		1,080		67,198
Forest City Realty Trust, Inc. — Class A		2,862		62,334
Liberty Property Trust		1,606		61,911
New Residential Investment Corp.		3,462		58,785
EPR Properties		771		56,769
CoreSite Realty Corp.		626		56,371
DuPont Fabros Technology, Inc.		1,128		55,938
Uniti Group, Inc.		2,034		52,579
GEO Group, Inc.1		1,107		51,332
STORE Capital Corp.		2,149		51,318
Gramercy Property Trust		1,902		50,023
Outfront Media, Inc.		1,867		49,569
CoreCivic, Inc.		1,540		48,387
Cousins Properties, Inc.		5,825		48,173
Rayonier, Inc.		1,688		47,838
Retail Properties of America, Inc. — Class A		3,299		47,572
PS Business Parks, Inc.		403		46,248
Lexington Realty Trust		3,980		39,720
Washington Real Estate Investment Trust		1,262		39,475
STAG Industrial, Inc.		1,528		38,231
American Assets Trust, Inc.		851		35,606
Potlatch Corp.		778		35,555
Total REITs-Diversified				2,335,601
REITs-OFFICE PROPERTY - 11.4%
Boston Properties, Inc.		880		116,520
SL Green Realty Corp.		794		84,655
Alexandria Real Estate Equities, Inc.		751		83,001
VEREIT, Inc.		8,797		74,687
Kilroy Realty Corp.		947		68,260
Douglas Emmett, Inc.		1,641		63,014
Hudson Pacific Properties, Inc.		1,739		60,239
Highwoods Properties, Inc.		1,168		57,384
Equity Commonwealth*		1,633		50,982
Paramount Group, Inc.		3,046		49,376
Empire State Realty Trust, Inc. — Class A		2,260		46,646
Corporate Office Properties Trust		1,402		46,406
Piedmont Office Realty Trust, Inc. — Class A		2,131		45,561
Brandywine Realty Trust		2,698		43,789
Columbia Property Trust, Inc.		1,922		42,765
Mack-Cali Realty Corp.		1,485		40,006
New York REIT, Inc.		3,419		33,130
Government Properties Income Trust		1,547		32,379
Total REITs-Office Property				1,038,800
REITs-APARTMENTS - 10.8%
AvalonBay Communities, Inc.		706		129,621
Equity Residential		1,967		122,386
Essex Property Trust, Inc.		429		99,326
Mid-America Apartment Communities, Inc.		861		87,598
UDR, Inc.		2,222		80,570
Apartment Investment & Management Co. — Class A		1,545		68,521
Invitation Homes, Inc.*		3,120		68,110
Camden Property Trust		843		67,828
American Campus Communities, Inc.		1,379		65,627
American Homes 4 Rent — Class A		2,649		60,821
Colony Starwood Homes		1,468		49,839
Education Realty Trust, Inc.		1,105		45,139
Monogram Residential Trust, Inc.		3,313		33,031
Total REITs-Apartments				978,417
REITs-HEALTH CARE - 9.3%
Welltower, Inc.		1,896		134,274
Ventas, Inc.		1,973		128,323
HCP, Inc.		3,234		101,160
Omega Healthcare Investors, Inc.		2,040		67,300
Senior Housing Properties Trust		2,814		56,984
Healthcare Trust of America, Inc. — Class A		1,743		54,835
Medical Properties Trust, Inc.		4,153		53,532
Healthcare Realty Trust, Inc.		1,574		51,155
Physicians Realty Trust		2,313		45,959
National Health Investors, Inc.		609		44,232
Care Capital Properties, Inc.		1,503		40,386
Sabra Health Care REIT, Inc.		1,261		35,220
Quality Care Properties, Inc.*		1,843		34,759
Total REITs-Health Care				848,119
REITs-HOTELS - 6.8%
Host Hotels & Resorts, Inc.		5,216		97,330
MGM Growth Properties LLC — Class A		2,355		63,703
Hospitality Properties Trust		1,883		59,371
Park Hotels & Resorts, Inc.		2,310		59,298
Apple Hospitality REIT, Inc.		2,788		53,251
Sunstone Hotel Investors, Inc.		3,096		47,462
LaSalle Hotel Properties		1,591		46,059
Ryman Hospitality Properties, Inc.		731		45,198
RLJ Lodging Trust		1,888		44,387
DiamondRock Hospitality Co.		3,448		38,445
Pebblebrook Hotel Trust1		1,305		38,119
FelCor Lodging Trust, Inc.		3,510		26,360
Total REITs-Hotels				618,983

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
REAL ESTATE FUND

	Shares		Value
REITs-SHOPPING CENTERS - 6.6%
Regency Centers Corp.		1,305	$	86,639
Federal Realty Investment Trust		605		80,768
Kimco Realty Corp.		3,533		78,044
Brixmor Property Group, Inc.		3,070		65,882
DDR Corp.		4,302		53,904
Weingarten Realty Investors		1,613		53,858
Urban Edge Properties		1,612		42,396
Acadia Realty Trust		1,358		40,821
Retail Opportunity Investments Corp.		1,867		39,263
Kite Realty Group Trust		1,612		34,658
Ramco-Gershenson Properties Trust		1,949		27,325
Total REITs-Shopping Centers				603,558
REITs-REGIONAL MALLS - 6.1%
Simon Property Group, Inc.		1,123		193,190
GGP, Inc.		5,030		116,595
Macerich Co.		1,218		78,439
Taubman Centers, Inc.		788		52,024
Tanger Factory Outlet Centers, Inc.		1,415		46,370
Washington Prime Group, Inc.		3,818		33,178
CBL & Associates Properties, Inc.		3,441		32,827
Total REITs-Regional Malls				552,623
REITs-MORTGAGE - 5.5%
Annaly Capital Management, Inc.		7,882		87,569
AGNC Investment Corp.		3,352		66,671
Starwood Property Trust, Inc.		2,780		62,772
Chimera Investment Corp.		2,537		51,197
Two Harbors Investment Corp.		4,950		47,471
MFA Financial, Inc.		5,573		45,030
Blackstone Mortgage Trust, Inc. — Class A		1,445		44,737
Apollo Commercial Real Estate Finance, Inc.		1,822		34,272
Invesco Mortgage Capital, Inc.		2,208		34,047
CYS Investments, Inc.		3,573		28,405
Total REITs-Mortgage				502,171
REITs-STORAGE - 4.7%
Public Storage		729		159,585
Iron Mountain, Inc.		2,258		80,543
Extra Space Storage, Inc.		1,063		79,077
CubeSmart		2,148		55,762
Life Storage, Inc.		608		49,929
Total REITs-Storage				424,896
REITs-WAREHOUSE/INDUSTRIES - 4.1%
Prologis, Inc.		2,640		136,963
DCT Industrial Trust, Inc.		1,147		55,194
CyrusOne, Inc.		1,056		54,352
First Industrial Realty Trust, Inc.		1,714		45,644
EastGroup Properties, Inc.		549		40,368
QTS Realty Trust, Inc. — Class A		811		39,536
Total REITs-Warehouse/Industries				372,057
REITs-SINGLE TENANT - 2.9%
Realty Income Corp.		1,756		104,536
National Retail Properties, Inc.		1,491		65,037
Spirit Realty Capital, Inc.		5,595		56,677
Select Income REIT		1,523		39,278
Total REITs-Single Tenant				265,528
REITs-MAnufactured Homes - 1.4%
Equity LifeStyle Properties, Inc.		861		66,349
Sun Communities, Inc.		785		63,059
Total REITs-Manufactured Homes				129,408
Total REITs				8,670,161
Real Estate - 4.1%
Real Estate Management/Services - 2.7%
CBRE Group, Inc. — Class A*		2,487		86,522
Jones Lang LaSalle, Inc.		517		57,620
Realogy Holdings Corp.		1,833		54,605
Kennedy-Wilson Holdings, Inc.		1,877		41,669
Total Real Estate Management/Services				240,416
Real Estate Operations/Development - 1.4%
Brookfield Asset Management, Inc. — Class A		2,091		76,238
Howard Hughes Corp.*		472		55,342
Total Real Estate Operations/Development				131,580
Total Real Estate				371,996
Total Common Stocks
(Cost $7,796,524)				9,042,157
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.1%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	5,230		5,230
Total Repurchase Agreement
(Cost $5,230)				5,230
	Shares
SECURITIES LENDING COLLATERAL†,3 - 0.8%
First American Government Obligations Fund — Class Z, 0.61%4		68,932		68,932
Total Securities Lending Collateral
(Cost $68,932)				68,932
Total Investments - 100.4%
(Cost $7,870,686)			$	9,116,319
Other Assets & Liabilities, net - (0.4)%				(32,872	)
Total Net Assets - 100.0%			$	9,083,447

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
REAL ESTATE 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	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	9,042,157	$	—	$	—	$	9,042,157
Repurchase Agreement		—		5,230		—		5,230
Securities Lending Collateral		68,932		—		—		68,932
Total	$	9,111,089	$	5,230	$	—	$	9,116,319

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

REAL ESTATE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $67,894 of securities loaned (cost $7,865,456)	$	9,111,089
Repurchase agreements, at value (cost $5,230)		5,230
Total investments (cost $7,870,686)		9,116,319
Cash		421
Receivables:
Securities sold		567,388
Fund shares sold		121,329
Dividends		57,147
Total assets		9,862,604
Liabilities:
Payable for:
Fund shares redeemed		689,983
Return of securities loaned		68,932
Management fees		9,202
Distribution and service fees		3,328
Transfer agent and administrative fees		2,707
Portfolio accounting fees		1,082
Miscellaneous		3,923
Total liabilities		779,157
Commitments and contingent liabilities (Note11)		—
Net assets	$	9,083,447
Net assets consist of:
Paid in capital	$	14,276,002
Accumulated net investment loss		(25,641	)
Accumulated net realized loss on investments		(6,412,547	)
Net unrealized appreciation on investments		1,245,633
Net assets	$	9,083,447
A-Class:
Net assets	$	1,762,363
Capital shares outstanding		46,928
Net asset value per share	$	37.55
Maximum offering price per share (Net asset value divided by 95.25%)	$	39.42
C-Class:
Net assets	$	998,800
Capital shares outstanding		30,013
Net asset value per share	$	33.28
H-Class:
Net assets	$	6,322,284
Capital shares outstanding		168,821
Net asset value per share	$	37.45

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $1,270)	$	953,237
Interest		457
Income from securities lending, net		93
Total investment income		953,787
Expenses:
Management fees		339,693
Transfer agent and administrative fees		99,910
Distribution and service fees:
A-Class		15,802
C-Class		17,908
H-Class		79,631
Portfolio accounting fees		39,963
Custodian fees		6,462
Trustees’ fees*		5,219
Line of credit fees		136
Miscellaneous		59,198
Total expenses		663,922
Net investment income		289,865
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		9,807,974
Net realized gain		9,807,974
Net change in unrealized appreciation (depreciation) on:
Investments		(5,277,557	)
Net change in unrealized appreciation (depreciation)		(5,277,557	)
Net realized and unrealized gain		4,530,417
Net increase in net assets resulting from operations	$	4,820,282

* 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 | 119

REAL ESTATE FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	289,865		$	476,009
Net realized gain (loss) on investments		9,807,974			(225,778	)
Net change in unrealized appreciation (depreciation) on investments		(5,277,557	)		(1,899,319	)
Net increase (decrease) in net assets resulting from operations		4,820,282			(1,649,088	)
Distributions to shareholders from:
Net investment income
A-Class		(210,089	)		(72,600	)
C-Class		(95,358	)		(24,943	)
H-Class		(528,698	)		(335,675	)
Total distributions to shareholders		(834,145	)		(433,218	)
Capital share transactions:
Proceeds from sale of shares
A-Class		13,401,514			37,206,021
C-Class		6,904,190			18,768,804
H-Class		489,324,519			281,436,754
Distributions reinvested
A-Class		203,192			66,044
C-Class		93,788			24,184
H-Class		527,824			335,273
Cost of shares redeemed
A-Class		(21,614,444	)		(34,288,463	)
C-Class		(7,926,493	)		(19,545,538	)
H-Class		(521,490,995	)		(283,137,988	)
Net increase (decrease) from capital share transactions		(40,576,905	)		865,091
Net decrease in net assets		(36,590,768	)		(1,217,215	)
Net assets:
Beginning of year		45,674,215			46,891,430
End of year	$	9,083,447		$	45,674,215
(Accumulated net investment loss)/Undistributed net investment income at end of year	$	(25,641	)	$	396,278
Capital share activity:
Shares sold
A-Class		349,580			1,043,014
C-Class		198,544			581,211
H-Class		12,883,150			7,922,736
Shares issued from reinvestment of distributions
A-Class		5,852			1,903
C-Class		3,040			772
H-Class		15,242			9,684
Shares redeemed
A-Class		(555,720	)		(962,786	)
C-Class		(229,590	)		(608,356	)
H-Class		(13,656,756	)		(7,988,853	)
Net decrease in shares		(986,658	)		(675	)

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	37.31		$	38.34		$	33.47		$	34.43		$	30.27
Income (loss) from investment operations:
Net investment income (loss)a		.34			.65			.42			.65			.58
Net gain (loss) on investments (realized and unrealized)		2.15			(1.24	)		4.77			(.14	)		4.18
Total from investment operations		2.49			(.59	)		5.19			.51			4.76
Less distributions from:
Net investment income		(2.25	)		(.44	)		(.32	)		(1.47	)		(.60	)
Total distributions		(2.25	)		(.44	)		(.32	)		(1.47	)		(.60	)
Net asset value, end of period	$	37.55		$	37.31		$	38.34		$	33.47		$	34.43
Total Returnb		7.17	%		(1.46	%)		15.58	%		1.86	%		16.03	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,762		$	9,223		$	6,329		$	4,124		$	12,495
Ratios to average net assets:
Net investment income (loss)		0.89	%		1.82	%		1.13	%		1.92	%		1.82	%
Total expenses		1.63	%		1.62	%		1.60	%		1.65	%		1.61	%
Portfolio turnover rate		1,060	%		880	%		599	%		788	%		699	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	33.56		$	34.81		$	30.64		$	31.89		$	28.29
Income (loss) from investment operations:
Net investment income (loss)a		.19			.22			.23			.29			.27
Net gain (loss) on investments (realized and unrealized)		1.78			(1.03	)		4.26			(.07	)		3.93
Total from investment operations		1.97			(.81	)		4.49			.22			4.20
Less distributions from:
Net investment income		(2.25	)		(.44	)		(.32	)		(1.47	)		(.60	)
Total distributions		(2.25	)		(.44	)		(.32	)		(1.47	)		(.60	)
Net asset value, end of period	$	33.28		$	33.56		$	34.81		$	30.64		$	31.89
Total Returnb		6.37	%		(2.25	%)		14.73	%		1.09	%		15.12	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	999		$	1,947		$	2,937		$	2,497		$	2,910
Ratios to average net assets:
Net investment income (loss)		0.56	%		0.69	%		0.70	%		0.93	%		0.92	%
Total expenses		2.38	%		2.36	%		2.35	%		2.38	%		2.35	%
Portfolio turnover rate		1,060	%		880	%		599	%		788	%		699	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 121

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	37.21		$	38.25		$	33.40		$	34.38		$	30.23
Income (loss) from investment operations:
Net investment income (loss)a		.27			.71			.48			.52			.46
Net gain (loss) on investments (realized and unrealized)		2.22			(1.31	)		4.69			(.03	)		4.29
Total from investment operations		2.49			(.60	)		5.17			.49			4.75
Less distributions from:
Net investment income		(2.25	)		(.44	)		(.32	)		(1.47	)		(.60	)
Total distributions		(2.25	)		(.44	)		(.32	)		(1.47	)		(.60	)
Net asset value, end of period	$	37.45		$	37.21		$	38.25		$	33.40		$	34.38
Total Returnb		7.18	%		(1.49	%)		15.55	%		1.84	%		15.95	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,322		$	34,504		$	37,625		$	19,753		$	10,273
Ratios to average net assets:
Net investment income (loss)		0.70	%		1.97	%		1.32	%		1.52	%		1.45	%
Total expenses		1.62	%		1.62	%		1.60	%		1.64	%		1.60	%
Portfolio turnover rate		1,060	%		880	%		599	%		788	%		699	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Retailing Fund Investor Class returned -0.74%, compared with 13.17% for the S&P 500 Consumer Discretionary Index. The broader S&P 500 Index returned 17.17%.

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., Priceline Group, Inc., and Netflix, Inc. CVS Health Corp., L Brands, Inc., and Target 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.	7.3%
Wal-Mart Stores, Inc.	5.2%
Home Depot, Inc.	4.6%
Priceline Group, Inc.	3.3%
Walgreens Boots Alliance, Inc.	3.2%
CVS Health Corp.	3.1%
Costco Wholesale Corp.	3.0%
Lowe’s Companies, Inc.	2.9%
Netflix, Inc.	2.8%
TJX Companies, Inc.	2.5%
Top Ten Total	37.9%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 123

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	-0.74%	8.96%	6.39%
A-Class Shares	-0.97%	8.71%	6.16%
A-Class Shares with sales charge†	-5.67%	7.65%	5.65%
C-Class Shares	-1.76%	7.90%	5.34%
C-Class Shares with CDSC‡	-2.75%	7.90%	5.34%
H-Class Shares**	-0.96%	8.60%	5.96%
S&P 500 Consumer Discretionary Index	13.17%	16.25%	10.61%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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.

124 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
RETAILING FUND

	Shares		Value
COMMON STOCKS† - 99.9%
Retail - 73.4%
Wal-Mart Stores, Inc.		8,514	$	613,689
Home Depot, Inc.		3,673		539,306
Walgreens Boots Alliance, Inc.		4,576		380,036
CVS Health Corp.		4,631		363,534
Costco Wholesale Corp.		2,087		349,969
Lowe’s Companies, Inc.		4,161		342,076
TJX Companies, Inc.		3,692		291,963
Target Corp.		4,098		226,169
Ross Stores, Inc.		3,125		205,843
O’Reilly Automotive, Inc.*		743		200,492
AutoZone, Inc.*		256		185,101
Dollar Tree, Inc.*		2,263		177,555
Dollar General Corp.		2,495		173,976
Ulta Beauty, Inc.*		605		172,564
Best Buy Co., Inc.		3,405		167,356
Genuine Parts Co.		1,613		149,057
L Brands, Inc.		3,097		145,868
Tiffany & Co.1		1,515		144,380
Advance Auto Parts, Inc.		890		131,951
CarMax, Inc.*		2,210		130,875
Foot Locker, Inc.		1,707		127,700
The Gap, Inc.		5,247		127,450
Liberty Interactive Corporation QVC Group — Class A*		6,090		121,922
Macy’s, Inc.		4,070		120,634
Tractor Supply Co.		1,742		120,146
Nordstrom, Inc.1		2,545		118,521
Burlington Stores, Inc.*		1,107		107,700
Kohl’s Corp.		2,663		106,014
Bed Bath & Beyond, Inc.		2,503		98,768
Staples, Inc.		11,124		97,557
Dick’s Sporting Goods, Inc.		1,967		95,714
Williams-Sonoma, Inc.		1,702		91,261
Signet Jewelers Ltd.		1,287		89,150
Michaels Companies, Inc.*		3,730		83,515
Cabela’s, Inc.*		1,555		82,586
AutoNation, Inc.*		1,924		81,366
Penske Automotive Group, Inc.		1,690		79,109
Rite Aid Corp.*		18,382		78,124
CST Brands, Inc.		1,613		77,569
Sally Beauty Holdings, Inc.*		3,422		69,946
PriceSmart, Inc.		747		68,873
Urban Outfitters, Inc.*		2,839		67,455
Five Below, Inc.*		1,520		65,831
American Eagle Outfitters, Inc.		4,574		64,173
RH*,1		1,347		62,312
Children’s Place, Inc.1		504		60,505
GameStop Corp. — Class A		2,661		60,006
Big Lots, Inc.		1,208		58,805
Ollie’s Bargain Outlet Holdings, Inc.*		1,750		58,625
HSN, Inc.		1,551		57,542
Lithia Motors, Inc. �� Class A		670		57,386
J.C. Penney Company, Inc.*,1		9,031		55,631
Chico’s FAS, Inc.		3,837		54,485
Dillard’s, Inc. — Class A1		1,023		53,442
DSW, Inc. — Class A		2,510		51,907
Sears Holdings Corp.*,1		4,400		50,556
Group 1 Automotive, Inc.		661		48,967
Asbury Automotive Group, Inc.*		750		45,075
Guess?, Inc.1		3,810		42,482
Genesco, Inc.*		737		40,867
Ascena Retail Group, Inc.*		8,709		37,100
Abercrombie & Fitch Co. — Class A		3,020		36,029
Tailored Brands, Inc.		2,280		34,063
Express, Inc.*		3,723		33,917
Hibbett Sports, Inc.*		1,120		33,040
Lumber Liquidators Holdings, Inc.*,1		1,543		32,388
Pier 1 Imports, Inc.1		4,400		31,504
Francesca’s Holdings Corp.*		1,980		30,393
GNC Holdings, Inc. — Class A1		3,871		28,491
Finish Line, Inc. — Class A		1,998		28,432
Zumiez, Inc.*		1,520		27,816
Fred’s, Inc. — Class A1		1,950		25,545
Big 5 Sporting Goods Corp.1		1,531		23,118
Conn’s, Inc.*		2,310		20,213
Total Retail				8,613,486
Internet - 21.3%
Amazon.com, Inc.*		962		852,852
Priceline Group, Inc.*		217		386,252
Netflix, Inc.*		2,234		330,208
Expedia, Inc.		1,375		173,484
JD.com, Inc. ADR*		5,220		162,394
Ctrip.com International Ltd. ADR*		3,110		152,857
TripAdvisor, Inc.*		2,344		101,167
Vipshop Holdings Ltd. ADR*		7,552		100,744
Wayfair, Inc. — Class A*,1		1,892		76,607
Liberty Expedia Holdings, Inc. — Class A*		1,416		64,400
Shutterfly, Inc.*		1,091		52,684
Etsy, Inc.*		4,278		45,475
Total Internet				2,499,124
Distribution & Wholesale - 2.2%
LKQ Corp.*		4,085		119,569
Pool Corp.		756		90,213
Core-Mark Holding Company, Inc.		1,523		47,502
Total Distribution & Wholesale				257,284
Commercial Services - 1.6%
Aaron’s, Inc.		1,971		58,618
NutriSystem, Inc.		970		53,835
Monro Muffler Brake, Inc.		992		51,683
Rent-A-Center, Inc.1		3,071		27,240
Total Commercial Services				191,376
Oil & Gas - 0.6%
Murphy USA, Inc.*		931		68,354
Home Furnishings - 0.4%
Select Comfort Corp.*		1,702		42,193

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
RETAILING FUND

	Shares		Value
Leisure Time - 0.4%
Liberty TripAdvisor Holdings, Inc. — Class A*		2,962	$	41,764
Total Common Stocks
(Cost $8,294,606)				11,713,581
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.9%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	100,875		100,875
Total Repurchase Agreement
(Cost $100,875)				100,875
		Shares
SECURITIES LENDING COLLATERAL†,3 - 5.4%
First American Government Obligations Fund — Class Z, 0.61%4		637,750		637,750
Total Securities Lending Collateral
(Cost $637,750)				637,750
Total Investments - 106.2%
(Cost $9,033,231)			$	12,452,206
Other Assets & Liabilities, net - (6.2)%				(726,120	)
Total Net Assets - 100.0%			$	11,726,086

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	11,713,581	$	—	$	—	$	11,713,581
Repurchase Agreement		—		100,875		—		100,875
Securities Lending Collateral		637,750		—		—		637,750
Total	$	12,351,331	$	100,875	$	—	$	12,452,206

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

RETAILING FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $618,934 of securities loaned (cost $8,932,356)	$	12,351,331
Repurchase agreements, at value (cost $100,875)		100,875
Total investments (cost $9,033,231)		12,452,206
Receivables:
Securities sold		2,292,403
Fund shares sold		17,101
Dividends		27,800
Securities lending income		1,449
Total assets		14,790,959
Liabilities:
Payable for:
Fund shares redeemed		2,385,638
Return of securities loaned		637,750
Management fees		19,098
Transfer agent and administrative fees		5,617
Distribution and service fees		2,356
Portfolio accounting fees		2,247
Miscellaneous		12,167
Total liabilities		3,064,873
Commitments and contingent liabilities (Note 11)		—
Net assets	$	11,726,086
Net assets consist of:
Paid in capital	$	11,484,337
Undistributed net investment income		—
Accumulated net realized loss on investments		(3,177,226	)
Net unrealized appreciation on investments		3,418,975
Net assets	$	11,726,086
Investor Class:
Net assets	$	8,497,645
Capital shares outstanding		317,352
Net asset value per share	$	26.78
A-Class:
Net assets	$	1,216,760
Capital shares outstanding		47,822
Net asset value per share	$	25.44
Maximum offering price per share (Net asset value divided by 95.25%)	$	26.71
C-Class:
Net assets	$	1,601,027
Capital shares outstanding		70,137
Net asset value per share	$	22.83
H-Class:
Net assets	$	410,654
Capital shares outstanding		16,536
Net asset value per share	$	24.83

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $1,271)	$	241,468
Income from securities lending, net		5,692
Interest		243
Total investment income		247,403
Expenses:
Management fees		144,221
Transfer agent and administrative fees		42,418
Distribution and service fees:
A-Class		3,940
C-Class		21,060
H-Class		4,019
Portfolio accounting fees		16,967
Registration fees		16,019
Custodian fees		2,445
Trustees’ fees*		1,362
Line of credit fees		166
Miscellaneous		9,892
Total expenses		262,509
Net investment loss		(15,106	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		4,196,154
Net realized gain		4,196,154
Net change in unrealized appreciation (depreciation) on:
Investments		(4,955,206	)
Net change in unrealized appreciation (depreciation)		(4,955,206	)
Net realized and unrealized loss		(759,052	)
Net decrease in net assets resulting from operations	$	(774,158	)

* 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 | 127

RETAILING FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(15,106	)	$	(136,470	)
Net realized gain (loss) on investments		4,196,154			(1,114,146	)
Net change in unrealized appreciation (depreciation) on investments		(4,955,206	)		(4,279,916	)
Net decrease in net assets resulting from operations		(774,158	)		(5,530,532	)
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		118,388,461			58,531,964
A-Class		2,184,386			26,869,075
C-Class		1,975,138			21,109,377
H-Class		44,643,931			75,174,384	*
Distributions reinvested
Investor Class		—			14,238
A-Class		—			4,654
C-Class		—			2,509
H-Class		—			9,207	*
Cost of shares redeemed
Investor Class		(119,709,090	)		(91,432,944	)
A-Class		(7,079,757	)		(39,196,534	)
C-Class		(2,867,907	)		(21,796,959	)
H-Class		(47,551,893	)		(79,319,706	)*
Net decrease from capital share transactions		(10,016,731	)		(50,030,735	)
Net decrease in net assets		(10,790,889	)		(55,593,500	)
Net assets:
Beginning of year		22,516,975			78,110,475
End of year	$	11,726,086		$	22,516,975
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold
Investor Class		4,468,767			2,149,723
A-Class		86,254			1,066,330
C-Class		87,780			896,154
H-Class		1,886,660			2,910,370	*
Shares issued from reinvestment of distributions
Investor Class		—			555
A-Class		—			190
C-Class		—			113
H-Class		—			386	*
Shares redeemed
Investor Class		(4,531,899	)		(3,415,362	)
A-Class		(284,154	)		(1,547,153	)
C-Class		(126,634	)		(928,517	)
H-Class		(2,006,027	)		(3,113,107	)*
Net decrease in shares		(419,253	)		(1,980,318	)

* 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 SEE NOTES TO FINANCIAL STATEMENTS.

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	26.98		$	28.13		$	23.54		$	19.62		$	17.45
Income (loss) from investment operations:
Net investment income (loss)a		.03			(.03	)		.11			—	b		.09
Net gain (loss) on investments (realized and unrealized)		(.23	)		(1.10	)		4.48			3.92			2.08
Total from investment operations		(.20	)		(1.13	)		4.59			3.92			2.17
Less distributions from:
Net investment income		—			(.02	)		—			—			—
Total distributions		—			(.02	)		—			—			—
Net asset value, end of period	$	26.78		$	26.98		$	28.13		$	23.54		$	19.62
Total Returnc		(0.74	%)		(4.01	%)		19.50	%		19.98	%		12.44	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,498		$	10,265		$	46,283		$	65,195		$	14,671
Ratios to average net assets:
Net investment income (loss)		0.10	%		(0.10	%)		0.42	%		0.01	%		0.51	%
Total expenses		1.37	%		1.34	%		1.33	%		1.37	%		1.35	%
Portfolio turnover rate		887	%		238	%		395	%		671	%		472	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	25.69		$	26.85		$	22.48		$	18.79		$	16.77
Income (loss) from investment operations:
Net investment income (loss)a		(.08	)		(.09	)		.06			(.09	)		.03
Net gain (loss) on investments (realized and unrealized)		(.17	)		(1.05	)		4.31			3.78			1.99
Total from investment operations		(.25	)		(1.14	)		4.37			3.69			2.02
Less distributions from:
Net investment income		—			(.02	)		—			—			—
Total distributions		—			(.02	)		—			—			—
Net asset value, end of period	$	25.44		$	25.69		$	26.85		$	22.48		$	18.79
Total Returnc		(0.97	%)		(4.24	%)		19.44	%		19.64	%		12.05	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,217		$	6,313		$	19,502		$	2,049		$	1,500
Ratios to average net assets:
Net investment income (loss)		(0.34	%)		(0.36	%)		0.25	%		(0.42	%)		0.20	%
Total expenses		1.62	%		1.60	%		1.58	%		1.62	%		1.59	%
Portfolio turnover rate		887	%		238	%		395	%		671	%		472	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 129

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	23.23		$	24.46		$	20.64		$	17.40		$	15.62
Income (loss) from investment operations:
Net investment income (loss)a		(.23	)		(.24	)		(.19	)		(.23	)		(.06	)
Net gain (loss) on investments (realized and unrealized)		(.17	)		(.97	)		4.01			3.47			1.84
Total from investment operations		(.40	)		(1.21	)		3.82			3.24			1.78
Less distributions from:
Net investment income		—			(.02	)		—			—			—
Total distributions		—			(.02	)		—			—			—
Net asset value, end of period	$	22.83		$	23.23		$	24.46		$	20.64		$	17.40
Total Returnc		(1.76	%)		(4.94	%)		18.51	%		18.62	%		11.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,601		$	2,532		$	3,455		$	2,503		$	1,831
Ratios to average net assets:
Net investment income (loss)		(1.00	%)		(1.04	%)		(0.88	%)		(1.16	%)		(0.39	%)
Total expenses		2.37	%		2.35	%		2.34	%		2.37	%		2.35	%
Portfolio turnover rate		887	%		238	%		395	%		671	%		472	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	25.07		$	26.22		$	22.00		$	18.45		$	16.45
Income (loss) from investment operations:
Net investment income (loss)a		(—	)b		(.11	)		.01			(.14	)		(.01	)
Net gain (loss) on investments (realized and unrealized)		(.24	)		(1.02	)		4.21			3.69			2.01
Total from investment operations		(.24	)		(1.13	)		4.22			3.55			2.00
Less distributions from:
Net investment income		—			(.02	)		—			—			—
Total distributions		—			(.02	)		—			—			—
Net asset value, end of period	$	24.83		$	25.07		$	26.22		$	22.00		$	18.45
Total Returnc		(0.96	%)		(4.31	%)		19.18	%		19.24	%		12.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	411		$	3,407		$	8,871		$	5,391		$	2,454
Ratios to average net assets:
Net investment income (loss)		—	e		(0.44	%)		0.05	%		(0.64	%)		(0.05	%)
Total expenses		1.62	%		1.71	%		1.83	%		1.87	%		1.85	%
Portfolio turnover rate		887	%		238	%		395	%		671	%		472	%

a	Net investment income (loss) per share was computed using average shares outstanding throughout the period.
b	Net investment income (loss) 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.
e	Less than (0.01)%.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Technology Fund Investor Class returned 24.63%, compared with 24.91% for the S&P 500 Information Technology Index. The broader S&P 500 Index returned 17.17%.

The semiconductors & semiconductor equipment industry was the largest contributor to return, followed by the software industry. The Internet & direct mail marketing/retail industry was the only industry to detract from return; the electronic equipment & instruments industry contributed least.

Top contributing holdings were NVIDIA Corp., Apple, Inc., and Microsoft Corp. YY, Inc., ADR — Class A, 58.com, Inc. ADR — Class A, and First Solar, Inc. 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.	3.7%
Alphabet, Inc. — Class A	3.2%
Microsoft Corp.	3.1%
Facebook, Inc. — Class A	2.8%
Visa, Inc. — Class A	1.9%
Intel Corp.	1.8%
Oracle Corp.	1.7%
Cisco Systems, Inc.	1.7%
International Business Machines Corp.	1.7%
Mastercard, Inc. — Class A	1.4%
Top Ten Total	23.0%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 131

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	24.63%	11.94%	7.21%
A-Class Shares	24.37%	11.65%	6.91%
A-Class Shares with sales charge†	18.45%	10.57%	6.39%
C-Class Shares	23.41%	10.84%	6.14%
C-Class Shares with CDSC‡	22.41%	10.84%	6.14%
H-Class Shares**	24.32%	11.48%	6.72%
S&P 500 Information Technology Index	24.91%	14.64%	11.35%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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.

132 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
TECHNOLOGY FUND

	Shares		Value
COMMON STOCKS† - 99.3%
Software - 23.7%
Microsoft Corp.		38,715	$	2,549,769
Oracle Corp.		32,548		1,451,966
Adobe Systems, Inc.*		7,168		932,772
salesforce.com, Inc.*		10,298		849,481
Activision Blizzard, Inc.		13,862		691,160
VMware, Inc. — Class A*,1		7,288		671,516
Intuit, Inc.		5,111		592,825
Electronic Arts, Inc.*		6,561		587,341
NetEase, Inc. ADR		1,970		559,480
Fidelity National Information Services, Inc.		6,983		555,987
Fiserv, Inc.*		4,756		548,414
Paychex, Inc.		8,514		501,475
Autodesk, Inc.*		5,667		490,025
Workday, Inc. — Class A*		5,390		448,879
Red Hat, Inc.*		5,149		445,389
ServiceNow, Inc.*		4,870		425,979
First Data Corp. — Class A*		26,505		410,828
Citrix Systems, Inc.*		4,898		408,444
CA, Inc.		12,783		405,477
Synopsys, Inc.*		5,020		362,093
ANSYS, Inc.*		3,210		343,053
Akamai Technologies, Inc.*		5,732		342,200
CDK Global, Inc.		5,259		341,888
Cadence Design Systems, Inc.*		10,425		327,345
Splunk, Inc.*		5,090		317,056
Broadridge Financial Solutions, Inc.		4,495		305,435
Jack Henry & Associates, Inc.		3,272		304,623
SS&C Technologies Holdings, Inc.		8,220		290,988
Take-Two Interactive Software, Inc.*		4,687		277,798
Ultimate Software Group, Inc.*		1,404		274,075
PTC, Inc.*		5,053		265,535
Tyler Technologies, Inc.*		1,693		261,670
Nuance Communications, Inc.*		14,610		252,899
Aspen Technology, Inc.*		4,000		235,680
Tableau Software, Inc. — Class A*		4,460		220,993
j2 Global, Inc.		2,633		220,935
Manhattan Associates, Inc.*		4,165		216,788
Blackbaud, Inc.		2,700		207,009
Paycom Software, Inc.*		3,500		201,285
Twilio, Inc. — Class A*,1		5,840		168,601
Cornerstone OnDemand, Inc.*		4,230		164,505
CommVault Systems, Inc.*		3,220		163,576
Synchronoss Technologies, Inc.*		4,700		114,680
Total Software				19,707,917
Semiconductors - 18.6%
Intel Corp.		40,994		1,478,653
Broadcom Ltd.		4,815		1,054,293
QUALCOMM, Inc.		17,847		1,023,347
Texas Instruments, Inc.		12,406		999,427
NVIDIA Corp.		8,256		899,326
Applied Materials, Inc.		18,580		722,762
Micron Technology, Inc.*		23,084		667,128
Analog Devices, Inc.		7,486		613,478
NXP Semiconductor N.V.*		5,873		607,856
Taiwan Semiconductor Manufacturing Company Ltd. ADR		17,915		588,329
Lam Research Corp.		3,918		502,914
Marvell Technology Group Ltd.		31,244		476,783
Skyworks Solutions, Inc.		4,847		474,909
Microchip Technology, Inc.		6,006		443,123
KLA-Tencor Corp.		4,568		434,280
Advanced Micro Devices, Inc.*		29,769		433,139
Xilinx, Inc.		7,109		411,540
Maxim Integrated Products, Inc.		8,746		393,220
Qorvo, Inc.*		4,798		328,951
ON Semiconductor Corp.*		18,611		288,284
IPG Photonics Corp.*		2,345		283,042
Teradyne, Inc.		8,988		279,527
Microsemi Corp.*		5,191		267,492
Cavium, Inc.*		3,410		244,361
Cypress Semiconductor Corp.		17,184		236,452
Cirrus Logic, Inc.*		3,596		218,241
Monolithic Power Systems, Inc.		2,300		211,830
MKS Instruments, Inc.		3,025		207,969
Integrated Device Technology, Inc.*		8,295		196,343
MACOM Technology Solutions Holdings, Inc.*		4,000		193,200
Ambarella, Inc.*,1		2,620		143,340
Synaptics, Inc.*		2,842		140,707
Total Semiconductors				15,464,246
Computers - 15.9%
Apple, Inc.		21,632		3,107,653
International Business Machines Corp.		8,138		1,417,151
Hewlett Packard Enterprise Co.		30,274		717,494
Cognizant Technology Solutions Corp. — Class A*		11,326		674,124
HP, Inc.		34,559		617,915
Western Digital Corp.		6,768		558,564
Check Point Software Technologies Ltd.*		5,260		539,992
Accenture plc — Class A		4,487		537,902
Infosys Ltd. ADR		32,040		506,232
Seagate Technology plc		8,813		404,781
NetApp, Inc.		8,991		376,273
Computer Sciences Corp.1		4,976		343,394
Amdocs Ltd.		5,390		328,736
Leidos Holdings, Inc.		5,960		304,794
Fortinet, Inc.*		7,663		293,876
NCR Corp.*		5,720		261,289
Brocade Communications Systems, Inc.		20,292		253,244
CSRA, Inc.		8,360		244,864
MAXIMUS, Inc.		3,598		223,796
Teradata Corp.*		7,175		223,286
Conduent, Inc.*		12,816		215,052
NetScout Systems, Inc.*		5,489		208,308
Lumentum Holdings, Inc.*		3,787		202,036
Diebold Nixdorf, Inc.		5,600		171,920
Electronics for Imaging, Inc.*		3,500		170,905
VeriFone Systems, Inc.*		8,550		160,142

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
TECHNOLOGY FUND

	Shares		Value
3D Systems Corp.*,1	��	9,724	$	145,471
Total Computers				13,209,194
Internet - 15.5%
Alphabet, Inc. — Class A*		3,101		2,629,028
Facebook, Inc. — Class A*		16,081		2,284,306
Alibaba Group Holding Ltd. ADR*		7,643		824,145
Yahoo!, Inc.*		16,004		742,746
Baidu, Inc. ADR*		4,047		698,188
eBay, Inc.*		20,176		677,308
Symantec Corp.		15,851		486,309
SINA Corp.*		6,537		471,448
MercadoLibre, Inc.		2,223		470,098
Twitter, Inc.*		24,413		364,974
Palo Alto Networks, Inc.*		3,120		351,562
CDW Corp.		5,698		328,832
VeriSign, Inc.*		3,744		326,140
F5 Networks, Inc.*		2,238		319,072
Zillow Group, Inc. — Class C*,1		7,908		266,262
IAC/InterActiveCorp*		3,550		261,706
Pandora Media, Inc.*,1		15,969		188,594
Proofpoint, Inc.*		2,520		187,387
GrubHub, Inc.*,1		5,560		182,868
FireEye, Inc.*,1		14,330		180,701
Yelp, Inc. — Class A*		5,402		176,915
WebMD Health Corp. — Class A*		3,045		160,411
Stamps.com, Inc.*,1		1,248		147,701
Imperva, Inc.*		3,100		127,255
Total Internet				12,853,956
Commercial Services - 6.4%
PayPal Holdings, Inc.*		18,887		812,519
Automatic Data Processing, Inc.		7,399		757,583
Vantiv, Inc. — Class A*		6,140		393,697
FleetCor Technologies, Inc.*		2,550		386,147
Global Payments, Inc.		4,751		383,311
Western Union Co.		17,274		351,526
Total System Services, Inc.		6,513		348,185
Gartner, Inc.*		2,971		320,838
CoStar Group, Inc.*		1,400		290,108
Square, Inc. — Class A*		16,180		279,590
Sabre Corp.		12,657		268,202
Booz Allen Hamilton Holding Corp.		7,082		250,632
Euronet Worldwide, Inc.*		2,760		236,035
WEX, Inc.*,1		2,190		226,665
Total Commercial Services				5,305,038
Telecommunications - 6.2%
Cisco Systems, Inc.		42,794		1,446,437
Motorola Solutions, Inc.		4,888		421,443
Juniper Networks, Inc.		12,893		358,812
Arista Networks, Inc.*		2,580		341,257
CommScope Holding Company, Inc.*		7,828		326,506
ARRIS International plc*		9,575		253,259
LogMeIn, Inc.		2,518		245,505
Ubiquiti Networks, Inc.*,1		4,291		215,666
ViaSat, Inc.*		3,300		210,606
Ciena Corp.*		8,686		205,076
Finisar Corp.*		7,200		196,848
InterDigital, Inc.		2,200		189,860
Viavi Solutions, Inc.*		16,600		177,952
Acacia Communications, Inc.*,1		2,985		174,981
Oclaro, Inc.*		14,732		144,668
NETGEAR, Inc.*		2,700		133,785
Gigamon, Inc.*		3,500		124,425
Total Telecommunications				5,167,086
Electronics - 5.2%
Corning, Inc.		20,686		558,521
Amphenol Corp. — Class A		7,241		515,341
TE Connectivity Ltd.		6,381		475,704
Flex Ltd.*		19,957		335,277
Trimble, Inc.*		9,934		317,986
Arrow Electronics, Inc.*		3,900		286,299
Avnet, Inc.		5,864		268,337
Jabil Circuit, Inc.		8,793		254,294
FLIR Systems, Inc.		6,810		247,067
Coherent, Inc.*,1		1,200		246,768
Tech Data Corp.*		2,153		202,167
Sanmina Corp.*		4,840		196,504
Itron, Inc.*		2,700		163,890
TTM Technologies, Inc.*		8,820		142,267
Fitbit, Inc. — Class A*,1		20,830		123,314
Total Electronics				4,333,736
Diversified Financial Services - 4.3%
Visa, Inc. — Class A		17,451		1,550,870
Mastercard, Inc. — Class A		10,656		1,198,480
Alliance Data Systems Corp.		1,639		408,111
Ellie Mae, Inc.*		1,980		198,535
Blackhawk Network Holdings, Inc.*		4,300		174,580
Total Diversified Financial Services				3,530,576
Electrical Components & Equipment - 0.7%
Universal Display Corp.		2,650		228,165
Littelfuse, Inc.		1,287		205,804
Advanced Energy Industries, Inc.*		2,668		182,918
Total Electrical Components & Equipment				616,887
Machinery-Diversified - 0.7%
Cognex Corp.		3,550		298,023
Zebra Technologies Corp. — Class A*		2,624		239,440
Total Machinery-Diversified				537,463
Auto Parts & Equipment - 0.6%
Mobileye N.V.*		8,100		497,340
Aerospace & Defense - 0.5%
Harris Corp.		3,650		406,136
Office & Business Equipment - 0.4%
Xerox Corp.		41,122		301,835
Building Materials - 0.2%
Cree, Inc.*		6,745		180,294

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
TECHNOLOGY FUND

	Shares		Value
Media - 0.2%
TiVo Corp.		9,000	$	168,750
Energy-Alternate Sources - 0.2%
First Solar, Inc.*,1		6,187		167,668
Total Common Stocks
(Cost $69,431,258)				82,448,122
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.9%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	745,729		745,729
Total Repurchase Agreement
(Cost $745,729)				745,729
		Shares
SECURITIES LENDING COLLATERAL†,3 - 2.5%
First American Government Obligations Fund — Class Z, 0.61%4		2,068,380		2,068,380
Total Securities Lending Collateral
(Cost $2,068,380)				2,068,380
Total Investments - 102.7%
(Cost $72,245,367)			$	85,262,231
Other Assets & Liabilities, net - (2.7)%				(2,245,417	)
Total Net Assets - 100.0%			$	83,016,814

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	82,448,122	$	—	$	—	$	82,448,122
Repurchase Agreement		—		745,729		—		745,729
Securities Lending Collateral		2,068,380		—		—		2,068,380
Total	$	84,516,502	$	745,729	$	—	$	85,262,231

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

TECHNOLOGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $2,023,836 of securities loaned (cost $71,499,638)	$	84,516,502
Repurchase agreements, at value (cost $745,729)		745,729
Total investments (cost $72,245,367)		85,262,231
Receivables:
Fund shares sold		1,597,263
Dividends		38,586
Foreign taxes reclaim		1,105
Securities lending income		1,955
Interest		14
Total assets		86,901,154
Liabilities:
Overdraft due to custodian bank		3,725
Payable for:
Return of securities loaned		2,068,380
Securities purchased		1,619,126
Fund shares redeemed		71,855
Management fees		58,001
Transfer agent and administrative fees		17,059
Distribution and service fees		7,774
Portfolio accounting fees		6,823
Miscellaneous		31,597
Total liabilities		3,884,340
Commitments and contingent liabilities (Note 11)		—
Net assets	$	83,016,814
Net assets consist of:
Paid in capital	$	73,380,265
Accumulated net investment loss		(108,130	)
Accumulated net realized loss on investments		(3,272,185	)
Net unrealized appreciation on investments		13,016,864
Net assets	$	83,016,814
Investor Class:
Net assets	$	55,016,200
Capital shares outstanding		729,184
Net asset value per share	$	75.45
A-Class:
Net assets	$	3,293,784
Capital shares outstanding		46,561
Net asset value per share	$	70.74
Maximum offering price per share (Net asset value divided by 95.25%)	$	74.27
C-Class:
Net assets	$	3,202,557
Capital shares outstanding		49,545
Net asset value per share	$	64.64
H-Class:
Net assets	$	21,504,273
Capital shares outstanding		310,436
Net asset value per share	$	69.27

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $3,658)	$	590,826
Income from securities lending, net		18,346
Interest		853
Total investment income		610,025
Expenses:
Management fees		421,478
Transfer agent and administrative fees		123,964
Distribution and service fees:
A-Class		12,127
C-Class		20,400
H-Class		25,646
Portfolio accounting fees		49,585
Custodian fees		6,954
Trustees’ fees*		3,791
Line of credit fees		387
Miscellaneous		77,917
Total expenses		742,249
Net investment loss		(132,224	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		6,670,155
Net realized gain		6,670,155
Net change in unrealized appreciation (depreciation) on:
Investments		4,144,640
Net change in unrealized appreciation (depreciation)		4,144,640
Net realized and unrealized gain		10,814,795
Net increase in net assets resulting from operations	$	10,682,571

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

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

TECHNOLOGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(132,224	)	$	(90,295	)
Net realized gain on investments		6,670,155			123,656
Net change in unrealized appreciation (depreciation) on investments		4,144,640			(4,049,840	)
Net increase (decrease) in net assets resulting from operations		10,682,571			(4,016,479	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		164,308,988			99,486,819
A-Class		15,140,469			20,272,499
C-Class		4,835,439			17,598,381
H-Class		59,582,617			60,138,342	*
Cost of shares redeemed
Investor Class		(138,630,626	)		(94,488,616	)
A-Class		(20,841,622	)		(21,811,056	)
C-Class		(4,264,033	)		(18,142,641	)
H-Class		(42,353,661	)		(60,639,611	)*
Net increase from capital share transactions		37,777,571			2,414,117
Net increase (decrease) in net assets		48,460,142			(1,602,362	)
Net assets:
Beginning of year		34,556,672			36,159,034
End of year	$	83,016,814		$	34,556,672
Accumulated net investment loss at end of year	$	(108,130	)	$	(31,528	)
Capital share activity:
Shares sold
Investor Class		2,453,827			1,642,615
A-Class		240,039			358,240
C-Class		83,451			332,333
H-Class		989,015			1,063,419	*
Shares redeemed
Investor Class		(2,090,864	)		(1,610,504	)
A-Class		(339,864	)		(384,505	)
C-Class		(76,557	)		(344,075	)
H-Class		(711,407	)		(1,080,659	)*
Net increase (decrease) in shares		547,640			(23,136	)

* 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 | 137

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	60.53		$	61.23		$	55.90		$	43.58		$	42.92
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.06	)		(.10	)		(.09	)		.03
Net gain (loss) on investments (realized and unrealized)		15.01			(.64	)		5.43			12.41			.63
Total from investment operations		14.92			(.70	)		5.33			12.32			.66
Net asset value, end of period	$	75.45		$	60.53		$	61.23		$	55.90		$	43.58
Total Returnb		24.63	%		(1.14	%)		9.53	%		28.24	%		1.54	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	55,016		$	22,167		$	20,458		$	32,858		$	8,325
Ratios to average net assets:
Net investment income (loss)		(0.13	%)		(0.10	%)		(0.17	%)		(0.18	%)		0.10	%
Total expenses		1.38	%		1.35	%		1.35	%		1.37	%		1.35	%
Portfolio turnover rate		320	%		388	%		280	%		321	%		324	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	56.88		$	57.69		$	52.79		$	41.30		$	40.76
Income (loss) from investment operations:
Net investment income (loss)a		(.25	)		(.14	)		(.21	)		(.23	)		(.09	)
Net gain (loss) on investments (realized and unrealized)		14.11			(.67	)		5.11			11.72			.63
Total from investment operations		13.86			(.81	)		4.90			11.49			.54
Net asset value, end of period	$	70.74		$	56.88		$	57.69		$	52.79		$	41.30
Total Returnb		24.37	%		(1.40	%)		9.28	%		27.79	%		1.32	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,294		$	8,327		$	9,960		$	5,873		$	1,998
Ratios to average net assets:
Net investment income (loss)		(0.40	%)		(0.25	%)		(0.39	%)		(0.47	%)		(0.27	%)
Total expenses		1.63	%		1.60	%		1.59	%		1.62	%		1.59	%
Portfolio turnover rate		320	%		388	%		280	%		321	%		324	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	52.37		$	53.50		$	49.30		$	38.84		$	38.65
Income (loss) from investment operations:
Net investment income (loss)a		(.64	)		(.59	)		(.58	)		(.50	)		(.33	)
Net gain (loss) on investments (realized and unrealized)		12.91			(.54	)		4.78			10.96			.52
Total from investment operations		12.27			(1.13	)		4.20			10.46			.19
Net asset value, end of period	$	64.64		$	52.37		$	53.50		$	49.30		$	38.84
Total Returnb		23.41	%		(2.11	%)		8.52	%		26.90	%		0.54	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,203		$	2,234		$	2,910		$	2,827		$	1,715
Ratios to average net assets:
Net investment income (loss)		(1.12	%)		(1.12	%)		(1.13	%)		(1.13	%)		(0.90	%)
Total expenses		2.37	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		320	%		388	%		280	%		321	%		324	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014c,d			Year Ended March 28, 2013c,d
Per Share Data
Net asset value, beginning of period	$	55.72		$	56.54		$	51.87		$	40.65		$	40.22
Income (loss) from investment operations:
Net investment income (loss)a		(.30	)		(.23	)		(.37	)		(.27	)		(.12	)
Net gain (loss) on investments (realized and unrealized)		13.85			(.59	)		5.04			11.49			.55
Total from investment operations		13.55			(.82	)		4.67			11.22			.43
Net asset value, end of period	$	69.27		$	55.72		$	56.54		$	51.87		$	40.65
Total Returnb		24.32	%		(1.45	%)		9.00	%		27.60	%		1.04	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	21,504		$	1,829		$	2,831		$	6,915		$	1,286
Ratios to average net assets:
Net investment income (loss)		(0.46	%)		(0.42	%)		(0.69	%)		(0.54	%)		(0.33	%)
Total expenses		1.63	%		1.68	%		1.85	%		1.87	%		1.85	%
Portfolio turnover rate		320	%		388	%		280	%		321	%		324	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Telecommunications Fund Investor Class returned 14.21%, compared with 1.69% for the S&P 500 Telecommunications Services Index. The broader S&P 500 Index returned 17.17%.

The communications equipment industry contributed the most to the Fund’s return, followed by the wireless communications services industry. The diversified telecommunications services industry detracted the most from return, followed by the technology hardware storage and peripheral industry.

Sprint Corp., T-Mobile US, Inc., and Cisco Systems, Inc. were the strongest performers for the period. Palo Alto Networks, Inc., Verizon Communications, Inc., and LM Ericsson Telefon AB ADR — Class B 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.	10.2%
Verizon Communications, Inc.	9.0%
Cisco Systems, Inc.	8.4%
QUALCOMM, Inc.	5.9%
T-Mobile US, Inc.	4.8%
Crown Castle International Corp.	3.9%
Sprint Corp.	3.8%
Level 3 Communications, Inc.	3.0%
SBA Communications Corp.	2.5%
Motorola Solutions, Inc.	2.5%
Top Ten Total	54.0%

“Ten Largest Holdings” excludes any temporary cash investments.

140 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	14.21%	5.44%	0.48%
A-Class Shares	13.88%	5.15%	0.23%
A-Class Shares with sales charge†	8.47%	4.14%	-0.26%
C-Class Shares	13.05%	4.49%	-0.43%
C-Class Shares with CDSC‡	12.05%	4.49%	-0.43%
H-Class Shares**	13.94%	4.97%	0.03%
S&P 500 Telecommunication Services Index	1.69%	10.28%	5.22%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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 | 141

SCHEDULE OF INVESTMENTS	March 31, 2017
TELECOMMUNICATIONS FUND

	Shares		Value
COMMON STOCKS† - 100.0%
Telecommunications - 75.9%
AT&T, Inc.		37,559	$	1,560,576
Verizon Communications, Inc.		28,136		1,371,630
Cisco Systems, Inc.		37,668		1,273,178
T-Mobile US, Inc.*		11,385		735,358
Sprint Corp.*		67,206		583,348
Level 3 Communications, Inc.*		7,864		449,978
Motorola Solutions, Inc.		4,331		373,419
CenturyLink, Inc.1		15,192		358,075
Vodafone Group plc ADR		11,996		317,054
Juniper Networks, Inc.		11,348		315,815
Arista Networks, Inc.*		2,337		309,115
CommScope Holding Company, Inc.*		6,876		286,798
Zayo Group Holdings, Inc.*		8,480		278,992
EchoStar Corp. — Class A*		4,067		231,616
America Movil SAB de CV — Class L ADR		15,863		224,779
ARRIS International plc*		8,443		223,317
Ubiquiti Networks, Inc.*,1		3,885		195,260
China Mobile Ltd. ADR		3,480		192,200
ViaSat, Inc.*		2,921		186,418
Ciena Corp.*		7,647		180,546
Finisar Corp.*		6,316		172,679
InterDigital, Inc.		1,960		169,148
Telephone & Data Systems, Inc.		6,367		168,789
Viavi Solutions, Inc.*		14,575		156,244
Acacia Communications, Inc.*,1		2,654		155,577
Oclaro, Inc.*		12,939		127,061
Ixia*		6,420		126,153
NETGEAR, Inc.*		2,414		119,614
Shenandoah Telecommunications Co.		4,058		113,827
Vonage Holdings Corp.*		17,850		112,812
Infinera Corp.*		10,824		110,730
Consolidated Communications Holdings, Inc.1		4,524		105,952
ADTRAN, Inc.		4,704		97,608
Iridium Communications, Inc.*,1		9,914		95,670
Windstream Holdings, Inc.1		16,694		90,982
Total Telecommunications				11,570,318
REITs - 6.4%
Crown Castle International Corp.		6,243		589,652
SBA Communications Corp.*		3,185		383,378
Total REITs				973,030
Semiconductors - 5.9%
QUALCOMM, Inc.		15,691		899,722
Internet - 5.6%
Palo Alto Networks, Inc.*		2,760		310,997
F5 Networks, Inc.*		2,052		292,554
Cogent Communications Holdings, Inc.		3,240		139,482
8x8, Inc.*		7,563		115,336
Total Internet				858,369
Computers - 3.8%
Brocade Communications Systems, Inc.		17,830		222,518
NetScout Systems, Inc.*		4,828		183,223
Lumentum Holdings, Inc.*		3,355		178,989
Total Computers				584,730
Aerospace & Defense - 2.4%
Harris Corp.		3,289		365,967
Total Common Stocks
(Cost $13,461,247)				15,252,136
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.3%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	45,796		45,796
Total Repurchase Agreement
(Cost $45,796)				45,796
	Shares
SECURITIES LENDING COLLATERAL†,3 - 5.4%
First American Government Obligations Fund — Class Z, 0.61%4		817,455		817,455
Total Securities Lending Collateral
(Cost $817,455)				817,455
Total Investments - 105.7%
(Cost $14,324,498)			$	16,115,387
Other Assets & Liabilities, net - (5.7)%				(876,154	)
Total Net Assets - 100.0%			$	15,239,233

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
TELECOMMUNICATIONS FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	15,252,136	$	—	$	—	$	15,252,136
Repurchase Agreement		—		45,796		—		45,796
Securities Lending Collateral		817,455		—		—		817,455
Total	$	16,069,591	$	45,796	$	—	$	16,115,387

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

TELECOMMUNICATIONS FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $802,010 of securities loaned (cost $14,278,702)	$	16,069,591
Repurchase agreements, at value (cost $45,796)		45,796
Total investments (cost $14,324,498)		16,115,387
Receivables:
Securities sold		6,050,494
Fund shares sold		26,011
Dividends		8,922
Securities lending income		884
Foreign taxes reclaim		369
Total assets		22,202,067
Liabilities:
Payable for:
Fund shares redeemed		6,125,243
Return of securities loaned		817,455
Management fees		11,155
Transfer agent and administrative fees		3,281
Distribution and service fees		2,179
Portfolio accounting fees		1,312
Miscellaneous		2,209
Total liabilities		6,962,834
Commitments and contingent liabilities (Note 11)		—
Net assets	$	15,239,233
Net assets consist of:
Paid in capital	$	14,325,555
Undistributed net investment income		133,323
Accumulated net realized loss on investments		(1,010,534	)
Net unrealized appreciation on investments		1,790,889
Net assets	$	15,239,233
Investor Class:
Net assets	$	12,539,225
Capital shares outstanding		261,507
Net asset value per share	$	47.95
A-Class:
Net assets	$	1,080,913
Capital shares outstanding		24,353
Net asset value per share	$	44.39
Maximum offering price per share (Net asset value divided by 95.25%)	$	46.60
C-Class:
Net assets	$	405,853
Capital shares outstanding		10,112
Net asset value per share	$	40.14
H-Class:
Net assets	$	1,213,242
Capital shares outstanding		28,075
Net asset value per share	$	43.21

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $14,158)	$	706,791
Income from securities lending, net		3,547
Interest		377
Total investment income		710,715
Expenses:
Management fees		232,711
Transfer agent and administrative fees		68,445
Distribution and service fees:
A-Class		16,800
C-Class		4,813
H-Class		17,082
Portfolio accounting fees		27,377
Custodian fees		4,369
Trustees’ fees*		2,517
Line of credit fees		280
Miscellaneous		41,088
Total expenses		415,482
Net investment income		295,233
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		3,661,119
Net realized gain		3,661,119
Net change in unrealized appreciation (depreciation) on:
Investments		(781,475	)
Net change in unrealized appreciation (depreciation)		(781,475	)
Net realized and unrealized gain		2,879,644
Net increase in net assets resulting from operations	$	3,174,877

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

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

TELECOMMUNICATIONS FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	295,233		$	96,347
Net realized gain (loss) on investments		3,661,119			(1,013,651	)
Net change in unrealized appreciation (depreciation) on investments		(781,475	)		1,646,482
Net increase in net assets resulting from operations		3,174,877			729,178
Distributions to shareholders from:
Net investment income
Investor Class		(148,366	)		(53,710	)
A-Class		(18,046	)		(14,192	)
C-Class		(15,410	)		(14,927	)
H-Class		(59,833	)		(14,554	)*
Total distributions to shareholders		(241,655	)		(97,383	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		102,887,896			74,044,688
A-Class		52,341,342			10,919,225
C-Class		3,895,441			11,849,862
H-Class		55,785,784			19,440,257	*
Distributions reinvested
Investor Class		147,778			52,983
A-Class		17,422			14,149
C-Class		15,386			14,893
H-Class		59,833			14,553	*
Cost of shares redeemed
Investor Class		(109,831,997	)		(55,976,185	)
A-Class		(54,681,307	)		(9,651,492	)
C-Class		(3,803,624	)		(12,071,566	)
H-Class		(65,870,500	)		(10,361,614	)*
Net increase (decrease) from capital share transactions		(19,036,546	)		28,289,753
Net increase (decrease) in net assets		(16,103,324	)		28,921,548
Net assets:
Beginning of year		31,342,557			2,421,009
End of year	$	15,239,233		$	31,342,557
Undistributed net investment income at end of year	$	133,323		$	79,745
Capital share activity:
Shares sold
Investor Class		2,237,261			1,679,168
A-Class		1,269,793			264,455
C-Class		102,253			312,004
H-Class		1,323,661			531,126	*
Shares issued from reinvestment of distributions
Investor Class		3,252			1,285
A-Class		414			370
C-Class		403			424
H-Class		1,460			390	*
Shares redeemed
Investor Class		(2,426,423	)		(1,261,930	)
A-Class		(1,284,565	)		(236,776	)
C-Class		(99,349	)		(318,305	)
H-Class		(1,563,493	)		(268,701	)*
Net increase (decrease) in shares		(435,333	)		703,510

* 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 | 145

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	42.91		$	45.56		$	45.51		$	40.76		$	41.52
Income (loss) from investment operations:
Net investment income (loss)a		.49			.44			.72			1.06			.81
Net gain (loss) on investments (realized and unrealized)		5.55			(1.64	)		.63			4.26			(.67	)
Total from investment operations		6.04			(1.20	)		1.35			5.32			.14
Less distributions from:
Net investment income		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Total distributions		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Net asset value, end of period	$	47.95		$	42.91		$	45.56		$	45.51		$	40.76
Total Returnb		14.21	%		(2.49	%)		2.93	%		13.12	%		0.50	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	12,539		$	19,198		$	1,316		$	2,497		$	2,970
Ratios to average net assets:
Net investment income (loss)		1.09	%		0.97	%		1.55	%		2.47	%		2.06	%
Total expenses		1.38	%		1.34	%		1.36	%		1.38	%		1.35	%
Portfolio turnover rate		605	%		660	%		804	%		1,271	%		1,550	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	39.88		$	42.63		$	42.74		$	38.44		$	39.27
Income (loss) from investment operations:
Net investment income (loss)a		.32			.58			.58			.72			.72
Net gain (loss) on investments (realized and unrealized)		5.19			(1.88	)		.61			4.15			(.65	)
Total from investment operations		5.51			(1.30	)		1.19			4.87			.07
Less distributions from:
Net investment income		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Total distributions		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Net asset value, end of period	$	44.39		$	39.88		$	42.63		$	42.74		$	38.44
Total Returnb		13.88	%		(2.90	%)		2.75	%		12.80	%		0.30	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,081		$	1,544		$	454		$	2,631		$	553
Ratios to average net assets:
Net investment income (loss)		0.75	%		1.41	%		1.35	%		1.79	%		1.98	%
Total expenses		1.62	%		1.59	%		1.60	%		1.63	%		1.61	%
Portfolio turnover rate		605	%		660	%		804	%		1,271	%		1,550	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	36.43		$	39.35		$	39.89		$	36.00		$	37.04
Income (loss) from investment operations:
Net investment income (loss)a		.03			(.01	)		.06			.54			.48
Net gain (loss) on investments (realized and unrealized)		4.68			(1.46	)		.70			3.92			(.62	)
Total from investment operations		4.71			(1.47	)		.76			4.46			(.14	)
Less distributions from:
Net investment income		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Total distributions		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Net asset value, end of period	$	40.14		$	36.43		$	39.35		$	39.89		$	36.00
Total Returnb		13.05	%		(3.59	%)		1.86	%		12.49	%		(0.24	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	406		$	248		$	499		$	271		$	784
Ratios to average net assets:
Net investment income (loss)		0.07	%		(0.03	%)		0.14	%		1.42	%		1.41	%
Total expenses		2.37	%		2.35	%		2.35	%		2.38	%		2.36	%
Portfolio turnover rate		605	%		660	%		804	%		1,271	%		1,550	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014c,d			Year Ended March 28, 2013c,d
Per Share Data
Net asset value, beginning of period	$	38.85		$	41.59		$	41.86		$	37.75		$	38.69
Income (loss) from investment operations:
Net investment income (loss)a		.58			.17			.60			.29			.57
Net gain (loss) on investments (realized and unrealized)		4.78			(1.46	)		.43			4.39			(.61	)
Total from investment operations		5.36			(1.29	)		1.03			4.68			(.04	)
Less distributions from:
Net investment income		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Total distributions		(1.00	)		(1.45	)		(1.30	)		(.57	)		(.90	)
Net asset value, end of period	$	43.21		$	38.85		$	41.59		$	41.86		$	37.75
Total Returnb		13.94	%		(2.95	%)		2.42	%		12.53	%		(0.01	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,213		$	10,353		$	151		$	316		$	133
Ratios to average net assets:
Net investment income (loss)		1.44	%		0.44	%		1.40	%		0.74	%		1.59	%
Total expenses		1.62	%		1.64	%		1.86	%		1.88	%		1.86	%
Portfolio turnover rate		605	%		660	%		804	%		1,271	%		1,550	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Transportation Fund Investor Class returned 16.14%, compared with 18.38% for the S&P 500 Industrials Index. The broader S&P 500 Index returned 17.17%.

The road & rail industry was the largest contributor to return, followed by the auto components industry. The building products industry was the only detractor from return; the trading companies & distributors industry contributed least.

CSX Corp., Union Pacific Corp., and Norfolk Southern Corp. were the biggest contributors to performance for the period. Hertz Global Holdings, Inc., Ford Motor Co., and Autoliv, 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	4.8%
Union Pacific Corp.	4.7%
FedEx Corp.	3.6%
General Motors Co.	3.6%
Tesla, Inc.	3.4%
CSX Corp.	3.3%
Ford Motor Co.	3.3%
Southwest Airlines Co.	2.9%
Delta Air Lines, Inc.	2.9%
Norfolk Southern Corp.	2.8%
Top Ten Total	35.3%

“Ten Largest Holdings” excludes any temporary cash investments.

148 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	16.14%	14.88%	6.41%
A-Class Shares	15.87%	14.61%	6.18%
A-Class Shares with sales charge†	10.36%	13.50%	5.66%
C-Class Shares	15.00%	13.74%	5.36%
C-Class Shares with CDSC‡	14.00%	13.74%	5.36%
H-Class Shares**	15.88%	14.43%	5.96%
S&P 500 Industrials Index	18.38%	14.17%	8.15%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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 | 149

SCHEDULE OF INVESTMENTS	March 31, 2017
TRANSPORTATION FUND

	Shares		Value
COMMON STOCKS† - 99.8%
Transportation - 41.6%
United Parcel Service, Inc. — Class B		19,908	$	2,136,128
Union Pacific Corp.		19,489		2,064,274
FedEx Corp.		8,116		1,583,837
CSX Corp.		31,043		1,445,052
Norfolk Southern Corp.		11,066		1,239,060
CH Robinson Worldwide, Inc.		9,306		719,261
Expeditors International of Washington, Inc.		12,414		701,267
J.B. Hunt Transport Services, Inc.		7,529		690,711
Canadian Pacific Railway Ltd.		4,567		670,984
Kansas City Southern		7,773		666,612
Old Dominion Freight Line, Inc.		6,718		574,860
Canadian National Railway Co.		7,440		550,039
XPO Logistics, Inc.*		10,322		494,321
ZTO Express Cayman, Inc. ADR*,1		35,080		459,197
Genesee & Wyoming, Inc. — Class A*		6,571		445,908
Ryder System, Inc.		5,838		440,419
Kirby Corp.*		6,040		426,122
Landstar System, Inc.		4,846		415,060
Swift Transportation Co. — Class A*		17,652		362,572
Knight Transportation, Inc.		10,749		336,981
Werner Enterprises, Inc.		11,177		292,837
Heartland Express, Inc.		13,902		278,735
Hub Group, Inc. — Class A*		5,854		271,626
Atlas Air Worldwide Holdings, Inc.*		4,743		262,999
Forward Air Corp.		5,497		261,492
Saia, Inc.*		5,210		230,803
ArcBest Corp.		6,700		174,200
YRC Worldwide, Inc.*		11,530		126,945
Total Transportation				18,322,302
Airlines - 18.9%
Southwest Airlines Co.		23,663		1,272,122
Delta Air Lines, Inc.		27,450		1,261,601
United Continental Holdings, Inc.*		15,252		1,077,401
American Airlines Group, Inc.		24,240		1,025,352
Alaska Air Group, Inc.		7,967		734,717
JetBlue Airways Corp.*		28,815		593,877
Copa Holdings S.A. — Class A		4,200		471,450
Ryanair Holdings plc ADR*		5,456		452,739
Spirit Airlines, Inc.*,1		8,024		425,834
Allegiant Travel Co. — Class A		2,333		373,863
Hawaiian Holdings, Inc.*		7,395		343,498
SkyWest, Inc.		8,170		279,823
Total Airlines				8,312,277
Auto Parts & Equipment - 15.6%
Delphi Automotive plc		8,689		699,377
Lear Corp.		4,778		676,469
Goodyear Tire & Rubber Co.		18,356		660,816
BorgWarner, Inc.		15,520		648,581
Magna International, Inc.		11,760		507,562
Autoliv, Inc.1		4,915		502,608
Adient plc		6,853		498,008
Tenneco, Inc.		6,228		388,752
Visteon Corp.*		3,961		387,980
Dorman Products, Inc.*		4,561		374,595
Dana, Inc.		18,832		363,646
Cooper Tire & Rubber Co.		7,695		341,273
Cooper-Standard Holdings, Inc.*		2,765		306,721
Gentherm, Inc.*		6,734		264,310
American Axle & Manufacturing Holdings, Inc.*		13,216		248,196
Total Auto Parts & Equipment				6,868,894
Auto Manufacturers - 14.6%
General Motors Co.		44,564		1,575,784
Tesla, Inc.*,1		5,361		1,491,966
Ford Motor Co.		123,761		1,440,578
Fiat Chrysler Automobiles N.V.*		52,702		576,033
Ferrari N.V.		6,376		474,119
Tata Motors Ltd. ADR		12,981		462,773
Toyota Motor Corp. ADR		3,923		426,116
Total Auto Manufacturers				6,447,369
Commercial Services - 3.9%
AMERCO		1,610		613,716
Macquarie Infrastructure Corp.		7,072		569,862
Avis Budget Group, Inc.*		10,894		322,245
Hertz Global Holdings, Inc.*,1		12,858		225,529
Total Commercial Services				1,731,352
Leisure Time - 2.4%
Harley-Davidson, Inc.		11,649		704,765
LCI Industries		3,520		351,296
Total Leisure Time				1,056,061
Home Builders - 1.6%
Thor Industries, Inc.		5,033		483,822
Winnebago Industries, Inc.		7,210		210,893
Total Home Builders				694,715
Electronics - 1.2%
Gentex Corp.		25,278		539,180
Total Common Stocks
(Cost $34,062,227)				43,972,150
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.5%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	231,743		231,743
Total Repurchase Agreement
(Cost $231,743)				231,743

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
TRANSPORTATION FUND

	Shares		Value
SECURITIES LENDING COLLATERAL†,3 - 5.0%
First American Government Obligations Fund — Class Z, 0.61%4		2,221,801	$	2,221,801
Total Securities Lending Collateral
(Cost $2,221,801)				2,221,801
Total Investments - 105.3%
(Cost $36,515,771)			$	46,425,694
Other Assets & Liabilities, net - (5.3)%				(2,338,111	)
Total Net Assets - 100.0%			$	44,087,583

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	43,972,150	$	—	$	—	$	43,972,150
Repurchase Agreement		—		231,743		—		231,743
Securities Lending Collateral		2,221,801		—		—		2,221,801
Total	$	46,193,951	$	231,743	$	—	$	46,425,694

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

TRANSPORTATION FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $2,182,998 of securities loaned (cost $36,284,028)	$	46,193,951
Repurchase agreements, at value (cost $231,743)		231,743
Total investments (cost $36,515,771)		46,425,694
Cash		2,619
Receivables:
Fund shares sold		127,455
Dividends		12,394
Foreign taxes reclaim		191
Securities lending income		1,300
Interest		4
Total assets		46,569,657
Liabilities:
Payable for:
Return of securities loaned		2,221,801
Fund shares redeemed		184,760
Management fees		37,215
Transfer agent and administrative fees		10,946
Distribution and service fees		4,768
Portfolio accounting fees		4,378
Miscellaneous		18,206
Total liabilities		2,482,074
Commitments and contingent liabilities (Note 11)		—
Net assets	$	44,087,583
Net assets consist of:
Paid in capital	$	37,530,490
Accumulated net investment loss		(1,009	)
Accumulated net realized loss on investments		(3,351,821	)
Net unrealized appreciation on investments		9,909,923
Net assets	$	44,087,583
Investor Class:
Net assets	$	32,911,360
Capital shares outstanding		614,988
Net asset value per share	$	53.52
A-Class:
Net assets	$	4,742,345
Capital shares outstanding		95,807
Net asset value per share	$	49.50
Maximum offering price per share (Net asset value divided by 95.25%)	$	51.97
C-Class:
Net assets	$	2,306,422
Capital shares outstanding		50,218
Net asset value per share	$	45.93
H-Class:
Net assets	$	4,127,456
Capital shares outstanding		85,714
Net asset value per share	$	48.15

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $6,626)	$	540,740
Income from securities lending, net		7,596
Interest		577
Total investment income		548,913
Expenses:
Management fees		306,978
Transfer agent and administrative fees		90,288
Distribution and service fees:
A-Class		15,397
C-Class		23,888
H-Class		11,671
Portfolio accounting fees		36,115
Custodian fees		5,183
Trustees’ fees*		2,208
Line of credit fees		580
Tax expense		85
Miscellaneous		57,795
Total expenses		550,188
Net investment loss		(1,275	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		5,205,605
Net realized gain		5,205,605
Net change in unrealized appreciation (depreciation) on:
Investments		887,530
Net change in unrealized appreciation (depreciation)		887,530
Net realized and unrealized gain		6,093,135
Net increase in net assets resulting from operations	$	6,091,860

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

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

TRANSPORTATION FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	(1,275	)	$	45,613
Net realized gain on investments		5,205,605			12,642,987
Net change in unrealized appreciation (depreciation) on investments		887,530			(19,150,904	)
Net increase (decrease) in net assets resulting from operations		6,091,860			(6,462,304	)
Distributions to shareholders from:
Net investment income
Investor Class		(75,133	)		(68,541	)
A-Class		(20,987	)		(39,806	)
C-Class		(7,137	)		(17,180	)
H-Class		(15,737	)		(6,812	)*
Total distributions to shareholders		(118,994	)		(132,339	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		122,086,249			59,874,682
A-Class		19,099,228			9,344,709
C-Class		4,867,697			13,489,052
H-Class		143,717,449			25,514,022	*
Distributions reinvested
Investor Class		73,847			66,183
A-Class		20,353			37,973
C-Class		6,873			16,835
H-Class		15,696			6,762	*
Cost of shares redeemed
Investor Class		(106,399,464	)		(85,095,507	)
A-Class		(20,440,514	)		(18,030,528	)
C-Class		(5,771,671	)		(16,300,469	)
H-Class		(150,146,386	)		(22,304,004	)*
Net increase (decrease) from capital share transactions		7,129,357			(33,380,290	)
Net increase (decrease) in net assets		13,102,223			(39,974,933	)
Net assets:
Beginning of year		30,985,360			70,960,293
End of year	$	44,087,583		$	30,985,360
(Accumulated net investment loss)/Undistributed net investment income at end of year	$	(1,009	)	$	45,613
Capital share activity:
Shares sold
Investor Class		2,457,004			1,248,273
A-Class		417,626			212,086
C-Class		114,437			323,931
H-Class		3,310,254			585,638	*
Shares issued from reinvestment of distributions
Investor Class		1,486			1,414
A-Class		443			874
C-Class		161			413
H-Class		351			160	*
Shares redeemed
Investor Class		(2,138,529	)		(1,779,677	)
A-Class		(446,819	)		(405,659	)
C-Class		(138,639	)		(390,453	)
H-Class		(3,441,408	)		(501,890	)*
Net increase (decrease) in shares		136,367			(704,890	)

* 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 | 153

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	46.23		$	52.06		$	44.63		$	32.07		$	26.96
Income (loss) from investment operations:
Net investment income (loss)a		.09			.16			.18			(.04	)		(.07	)
Net gain (loss) on investments (realized and unrealized)		7.37			(5.78	)		7.25			12.60			5.18
Total from investment operations		7.46			(5.62	)		7.43			12.56			5.11
Less distributions from:
Net investment income		(.17	)		(.21	)		—			—			—
Total distributions		(.17	)		(.21	)		—			—			—
Net asset value, end of period	$	53.52		$	46.23		$	52.06		$	44.63		$	32.07
Total Returnb		16.14	%		(10.80	%)		16.65	%		39.16	%		18.95	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	32,911		$	13,638		$	42,947		$	44,021		$	78,644
Ratios to average net assets:
Net investment income (loss)		0.17	%		0.33	%		0.37	%		(0.09	%)		(0.25	%)
Total expenses		1.38	%		1.34	%		1.35	%		1.37	%		1.37	%
Portfolio turnover rate		676	%		219	%		247	%		593	%		737	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	42.87		$	48.41		$	41.61		$	29.96		$	25.25
Income (loss) from investment operations:
Net investment income (loss)a		(.06	)		.04			.05			(.11	)		(.01	)
Net gain (loss) on investments (realized and unrealized)		6.86			(5.37	)		6.75			11.76			4.72
Total from investment operations		6.80			(5.33	)		6.80			11.65			4.71
Less distributions from:
Net investment income		(.17	)		(.21	)		—			—			—
Total distributions		(.17	)		(.21	)		—			—			—
Net asset value, end of period	$	49.50		$	42.87		$	48.41		$	41.61		$	29.96
Total Returnb		15.87	%		(11.01	%)		16.34	%		38.89	%		18.70	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,742		$	5,340		$	15,359		$	12,938		$	4,558
Ratios to average net assets:
Net investment income (loss)		(0.12	%)		0.08	%		0.12	%		(0.28	%)		(0.05	%)
Total expenses		1.63	%		1.60	%		1.60	%		1.62	%		1.60	%
Portfolio turnover rate		676	%		219	%		247	%		593	%		737	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	40.09		$	45.63		$	39.52		$	28.67		$	24.34
Income (loss) from investment operations:
Net investment income (loss)a		(.34	)		(.24	)		(.27	)		(.37	)		(.26	)
Net gain (loss) on investments (realized and unrealized)		6.35			(5.09	)		6.38			11.22			4.59
Total from investment operations		6.01			(5.33	)		6.11			10.85			4.33
Less distributions from:
Net investment income		(.17	)		(.21	)		—			—			—
Total distributions		(.17	)		(.21	)		—			—			—
Net asset value, end of period	$	45.93		$	40.09		$	45.63		$	39.52		$	28.67
Total Returnb		15.00	%		(11.69	%)		15.46	%		37.84	%		17.79	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,306		$	2,977		$	6,405		$	3,734		$	2,727
Ratios to average net assets:
Net investment income (loss)		(0.81	%)		(0.57	%)		(0.62	%)		(1.07	%)		(1.06	%)
Total expenses		2.38	%		2.35	%		2.35	%		2.37	%		2.35	%
Portfolio turnover rate		676	%		219	%		247	%		593	%		737	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	41.71		$	47.12		$	40.61		$	29.32		$	24.76
Income (loss) from investment operations:
Net investment income (loss)a		(.13	)		(.09	)		(.10	)		(.18	)		(.15	)
Net gain (loss) on investments (realized and unrealized)		6.74			(5.11	)		6.61			11.47			4.71
Total from investment operations		6.61			(5.20	)		6.51			11.29			4.56
Less distributions from:
Net investment income		(.17	)		(.21	)		—			—			—
Total distributions		(.17	)		(.21	)		—			—			—
Net asset value, end of period	$	48.15		$	41.71		$	47.12		$	40.61		$	29.32
Total Returnb		15.88	%		(11.04	%)		16.03	%		38.51	%		18.42	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,127		$	9,031		$	6,249		$	2,583		$	4,483
Ratios to average net assets:
Net investment income (loss)		(0.30	%)		(0.20	%)		(0.22	%)		(0.50	%)		(0.57	%)
Total expenses		1.63	%		1.72	%		1.85	%		1.87	%		1.86	%
Portfolio turnover rate		676	%		219	%		247	%		593	%		737	%

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 | 155

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Utilities Fund Investor Class returned 8.04%, compared with 7.06% for the S&P 500 Utilities Index. The broader S&P 500 Index returned 17.17%.

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.

CenterPoint Energy, Inc., NRG Energy, Inc., and NextEra Energy, Inc. were the best-performing holdings over the period, while Calpine Corp., Dynegy, Inc. and Korea Electric Power Corp. ADR 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)
NextEra Energy, Inc.	4.0%
Duke Energy Corp.	3.9%
Dominion Resources, Inc.	3.7%
Southern Co.	3.6%
PG&E Corp.	3.0%
American Electric Power Company, Inc.	3.0%
Exelon Corp.	3.0%
Sempra Energy	2.7%
Edison International	2.7%
PPL Corp.	2.6%
Top Ten Total	32.2%

“Ten Largest Holdings” excludes any temporary cash investments.

156 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	8.04%	10.64%	5.87%
A-Class Shares	7.75%	10.36%	5.62%
A-Class Shares with sales charge†	2.63%	9.29%	5.10%
C-Class Shares	6.97%	9.54%	4.82%
C-Class Shares with CDSC‡	6.03%	9.54%	4.82%
H-Class Shares**	7.80%	10.19%	5.41%
S&P 500 Utilities Index	7.06%	12.10%	6.69%
S&P 500 Index	17.17%	13.30%	7.51%

*	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 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 | 157

SCHEDULE OF INVESTMENTS	March 31, 2017
UTILITIES FUND

	Shares		Value
COMMON STOCKS† - 99.6%
Electric - 77.0%
NextEra Energy, Inc.		14,768	$	1,895,767
Duke Energy Corp.		22,665		1,858,756
Dominion Resources, Inc.		22,234		1,724,690
Southern Co.		34,275		1,706,209
PG&E Corp.		21,559		1,430,655
American Electric Power Company, Inc.		21,187		1,422,283
Exelon Corp.		39,334		1,415,237
Edison International		15,732		1,252,425
PPL Corp.		33,288		1,244,638
Consolidated Edison, Inc.		15,575		1,209,555
Xcel Energy, Inc.		26,484		1,177,214
Public Service Enterprise Group, Inc.		26,286		1,165,784
WEC Energy Group, Inc.		17,844		1,081,882
DTE Energy Co.		10,454		1,067,458
Eversource Energy		18,060		1,061,567
FirstEnergy Corp.		29,333		933,376
Entergy Corp.		11,960		908,482
Avangrid, Inc.		21,055		899,891
Ameren Corp.		16,386		894,512
CMS Energy Corp.		19,524		873,504
Pinnacle West Capital Corp.		9,020		752,088
Alliant Energy Corp.		18,730		741,895
SCANA Corp.		11,313		739,305
Westar Energy, Inc.		12,464		676,421
AES Corp.		59,014		659,777
OGE Energy Corp.		18,107		633,383
Great Plains Energy, Inc.		21,284		621,918
NRG Energy, Inc.		32,064		599,597
MDU Resources Group, Inc.		20,822		569,898
IDACORP, Inc.		6,110		506,886
Portland General Electric Co.		10,947		486,266
Calpine Corp.*		43,548		481,205
Hawaiian Electric Industries, Inc.		14,104		469,804
Black Hills Corp.		6,931		460,704
ALLETE, Inc.		6,704		453,928
PNM Resources, Inc.		11,509		425,833
NorthWestern Corp.		7,111		417,416
Avista Corp.		9,980		389,719
MGE Energy, Inc.1		5,780		375,700
El Paso Electric Co.		7,107		358,904
Dynegy, Inc.*		31,827		250,160
Total Electric				36,294,692
Gas - 17.3%
Sempra Energy		11,706		1,293,514
CenterPoint Energy, Inc.		30,786		848,770
UGI Corp.		14,691		725,735
Atmos Energy Corp.		8,917		704,354
NiSource, Inc.		28,944		688,578
Vectren Corp.		9,371		549,234
National Fuel Gas Co.		9,169		546,656
WGL Holdings, Inc.		6,083		502,030
Southwest Gas Holdings, Inc.		5,896		488,837
ONE Gas, Inc.		6,887		465,561
New Jersey Resources Corp.		11,519		456,152
Spire, Inc.		6,412		432,810
South Jersey Industries, Inc.		11,907		424,485
Total Gas				8,126,716
Water - 3.9%
American Water Works Co., Inc.		11,955		929,740
Aqua America, Inc.		18,571		597,058
California Water Service Group		9,169		328,709
Total Water				1,855,507
Energy-Alternate Sources - 1.4%
Pattern Energy Group, Inc.		15,970		321,476
TerraForm Power, Inc. — Class A*		25,693		317,822
Total Energy-Alternate Sources				639,298
Pipelines - 0.0%**
Kinder Morgan, Inc.		1		22
Total Common Stocks
(Cost $38,999,384)				46,916,235
	Face Amount
REPURCHASE AGREEMENT††,2 - 0.4%
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	$	173,795		173,795
Total Repurchase Agreement
(Cost $173,795)				173,795
	Shares
SECURITIES LENDING COLLATERAL†,3 - 0.0%**
First American Government Obligations Fund — Class Z, 0.61%4		21,909		21,909
Total Securities Lending Collateral
(Cost $21,909)				21,909
Total Investments - 100.0%
(Cost $39,195,088)			$	47,111,939
Other Assets & Liabilities, net - 0.0%				15,320
Total Net Assets - 100.0%			$	47,127,259

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
UTILITIES FUND

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreement — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	46,916,235	$	—	$	—	$	46,916,235
Repurchase Agreement		—		173,795		—		173,795
Securities Lending Collateral		21,909		—		—		21,909
Total	$	46,938,144	$	173,795	$	—	$	47,111,939

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

UTILITIES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $21,255 of securities loaned (cost $39,021,293)	$	46,938,144
Repurchase agreements, at value (cost $173,795)		173,795
Total investments (cost $39,195,088)		47,111,939
Receivables:
Fund shares sold		55,087
Dividends		85,427
Foreign taxes reclaim		315
Interest		3
Total assets		47,252,771
Liabilities:
Payable for:
Fund shares redeemed		48,136
Management fees		24,494
Return of securities loaned		21,909
Distribution and service fees		8,716
Transfer agent and administrative fees		7,204
Portfolio accounting fees		2,882
Miscellaneous		12,171
Total liabilities		125,512
Commitments and contingent liabilities (Note 11)		—
Net assets	$	47,127,259
Net assets consist of:
Paid in capital	$	43,112,801
Undistributed net investment income		—
Accumulated net realized loss on investments		(3,902,393	)
Net unrealized appreciation on investments		7,916,851
Net assets	$	47,127,259
Investor Class:
Net assets	$	24,116,015
Capital shares outstanding		613,002
Net asset value per share	$	39.34
A-Class:
Net assets	$	9,362,674
Capital shares outstanding		256,978
Net asset value per share	$	36.43
Maximum offering price per share (Net asset value divided by 95.25%)	$	38.25
C-Class:
Net assets	$	8,269,772
Capital shares outstanding		265,473
Net asset value per share	$	31.15
H-Class:
Net assets	$	5,378,798
Capital shares outstanding		153,142
Net asset value per share	$	35.12

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $11,621)	$	1,908,793
Interest		791
Income from securities lending, net		377
Total investment income		1,909,961
Expenses:
Management fees		564,765
Transfer agent and administrative fees		166,107
Distribution and service fees:
A-Class		35,219
C-Class		100,495
H-Class		15,323
Portfolio accounting fees		66,442
Custodian fees		10,607
Trustees’ fees*		8,413
Line of credit fees		394
Miscellaneous		102,422
Total expenses		1,070,187
Net investment income		839,774
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		11,894,279
Net realized gain		11,894,279
Net change in unrealized appreciation (depreciation) on:
Investments		(12,192,043	)
Net change in unrealized appreciation (depreciation)		(12,192,043	)
Net realized and unrealized loss		(297,764	)
Net increase in net assets resulting from operations	$	542,010

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

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

UTILITIES FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	839,774		$	957,252
Net realized gain on investments		11,894,279			376,530
Net change in unrealized appreciation (depreciation) on investments		(12,192,043	)		4,295,317
Net increase in net assets resulting from operations		542,010			5,629,099
Distributions to shareholders from:
Net investment income
Investor Class		(577,820	)		(406,169	)
A-Class		(127,704	)		(268,532	)
C-Class		(237,845	)		(122,718	)
H-Class		(188,129	)		(173,650	)*
Net realized gains
Investor Class		(1,895,220	)		—
A-Class		(418,860	)		—
C-Class		(780,119	)		—
H-Class		(617,055	)		—	*
Total distributions to shareholders		(4,842,752	)		(971,069	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		282,505,858			150,469,741
A-Class		40,059,210			48,138,913
C-Class		6,907,165			22,853,937
H-Class		103,464,307			142,307,243	*
Distributions reinvested
Investor Class		2,434,848			394,790
A-Class		536,124			260,843
C-Class		1,004,274			121,826
H-Class		803,467			173,410	*
Cost of shares redeemed
Investor Class		(307,478,614	)		(157,218,282	)
A-Class		(54,062,337	)		(37,759,601	)
C-Class		(9,547,021	)		(21,684,803	)
H-Class		(105,286,529	)		(149,530,278	)*
Net decrease from capital share transactions		(38,659,248	)		(1,472,261	)
Net increase (decrease) in net assets		(42,959,990	)		3,185,769
Net assets:
Beginning of year		90,087,249			86,901,480
End of year	$	47,127,259		$	90,087,249
Undistributed net investment income at end of year	$	—		$	—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 161

UTILITIES FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:
Shares sold
Investor Class		6,973,833			4,123,058
A-Class		1,063,262			1,422,806
C-Class		209,067			771,627
H-Class		2,848,092			4,366,895	*
Shares issued from reinvestment of distributions
Investor Class		68,472			11,581
A-Class		16,261			8,172
C-Class		35,537			4,346
H-Class		25,290			5,619	*
Shares redeemed
Investor Class		(7,690,866	)		(4,364,735	)
A-Class		(1,419,071	)		(1,116,343	)
C-Class		(295,878	)		(733,416	)
H-Class		(2,897,377	)		(4,598,364	)*
Net decrease in shares		(1,063,378	)		(98,754	)

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

162 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	40.23		$	36.98		$	34.01		$	32.71		$	29.13
Income (loss) from investment operations:
Net investment income (loss)a		.59			.73			.84			.78			.74
Net gain (loss) on investments (realized and unrealized)		2.25			3.09			2.26			1.98			3.96
Total from investment operations		2.84			3.82			3.10			2.76			4.70
Less distributions from:
Net investment income		(.87	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net realized gains		(2.86	)		—			—			—			—
Total distributions		(3.73	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net asset value, end of period	$	39.34		$	40.23		$	36.98		$	34.01		$	32.71
Total Returnb		8.04	%		10.61	%		9.12	%		8.88	%		16.75	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	24,116		$	50,753		$	55,156		$	95,854		$	42,907
Ratios to average net assets:
Net investment income (loss)		1.47	%		2.00	%		2.31	%		2.38	%		2.45	%
Total expenses		1.38	%		1.35	%		1.35	%		1.40	%		1.35	%
Portfolio turnover rate		507	%		475	%		384	%		508	%		534	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	37.63		$	34.70		$	32.02		$	30.95		$	27.69
Income (loss) from investment operations:
Net investment income (loss)a		.45			.63			.66			.63			.65
Net gain (loss) on investments (realized and unrealized)		2.08			2.87			2.15			1.90			3.73
Total from investment operations		2.53			3.50			2.81			2.53			4.38
Less distributions from:
Net investment income		(.87	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net realized gains		(2.86	)		—			—			—			—
Total distributions		(3.73	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net asset value, end of period	$	36.43		$	37.63		$	34.70		$	32.02		$	30.95
Total Returnb		7.75	%		10.38	%		8.78	%		8.64	%		16.46	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,363		$	22,448		$	9,782		$	11		$	6,938
Ratios to average net assets:
Net investment income (loss)		1.20	%		1.85	%		1.93	%		2.05	%		2.26	%
Total expenses		1.63	%		1.60	%		1.60	%		1.63	%		1.61	%
Portfolio turnover rate		507	%		475	%		384	%		508	%		534	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 163

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	32.96		$	30.70		$	28.55		$	27.96		$	25.31
Income (loss) from investment operations:
Net investment income (loss)a		.22			.28			.36			.34			.42
Net gain (loss) on investments (realized and unrealized)		1.70			2.55			1.92			1.71			3.35
Total from investment operations		1.92			2.83			2.28			2.05			3.77
Less distributions from:
Net investment income		(.87	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net realized gains		(2.86	)		—			—			—			—
Total distributions		(3.73	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net asset value, end of period	$	31.15		$	32.96		$	30.70		$	28.55		$	27.96
Total Returnb		6.97	%		9.55	%		7.99	%		7.83	%		15.58	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,270		$	10,439		$	8,417		$	8,387		$	7,001
Ratios to average net assets:
Net investment income (loss)		0.69	%		0.94	%		1.18	%		1.22	%		1.62	%
Total expenses		2.37	%		2.35	%		2.35	%		2.38	%		2.36	%
Portfolio turnover rate		507	%		475	%		384	%		508	%		534	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	36.40		$	33.61		$	31.09		$	30.19		$	27.10
Income (loss) from investment operations:
Net investment income (loss)a		.41			.54			.60			.69			.48
Net gain (loss) on investments (realized and unrealized)		2.04			2.82			2.05			1.67			3.73
Total from investment operations		2.45			3.36			2.65			2.36			4.21
Less distributions from:
Net investment income		(.87	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net realized gains		(2.86	)		—			—			—			—
Total distributions		(3.73	)		(.57	)		(.13	)		(1.46	)		(1.12	)
Net asset value, end of period	$	35.12		$	36.40		$	33.61		$	31.09		$	30.19
Total Returnb		7.80	%		10.31	%		8.53	%		8.29	%		16.23	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,379		$	6,448		$	13,546		$	2,269		$	4,812
Ratios to average net assets:
Net investment income (loss)		1.13	%		1.65	%		1.79	%		2.32	%		1.70	%
Total expenses		1.62	%		1.68	%		1.84	%		1.88	%		1.85	%
Portfolio turnover rate		507	%		475	%		384	%		508	%		534	%

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.

164 | 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, 2017, the Trust consisted of fifty-three funds.

This report covers 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.

Security Investors, LLC, which operates under the name Guggenheim Investments (“GI”), provides advisory services. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI 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, 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 and/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, to 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 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.

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NOTES TO FINANCIAL STATEMENTS (continued)

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 using methods established or ratified by the Board. 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 market prices; sale prices; broker quotes; and models which derive prices based on inputs such as prices of securities with comparable maturities and characteristics, or based on inputs such as anticipated cash flows or collateral, spread over Treasuries, and other information analysis.

B. 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.

C. The Funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Funds invest. These foreign taxes, if any, are paid by the Funds and reflected in their Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of dividend income and foreign taxes on capital gains from sales of investments are included with the net realized and unrealized gain (loss) on investments. Foreign taxes payable or deferred as of March 31, 2017, if any, are disclosed in the Funds’ Statements of Assets and Liabilities.

D. 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.

E. 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.

F. 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.

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NOTES TO FINANCIAL STATEMENTS (continued)

G. 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 0.82% at March 31, 2017.

H. Under the Funds’ organizational documents, the 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 the 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%

GI 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, 2017, GFD retained sales charges of $252,227 relating to sales of A-Class shares of the Trust.

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

On October 4, 2016, Rydex Fund Services, LLC (“RFS”) was purchased by MUFG Investor Services and as of that date RFS ceased to be an affiliate of GI. In connection with its acquisition, RFS changed its name to MUFG Investor Services (US), LLC (“MUIS”). This change had no impact on the financial statements of the Trust.

MUIS acts as the Trust’s administrator, transfer agent and accounting agent. As administrator, transfer agent and accounting agent, MUIS is responsible for maintaining the books and records of the Trust’s securities and cash. For providing the aforementioned services, MUIS is entitled to receive a monthly fee equal to an annual percentage of the Funds’ average daily net assets subject to certain minimum monthly fees and out of pocket expenses.

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

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NOTES TO FINANCIAL STATEMENTS (continued)

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.

The tax character of distributions paid during the year ended March 31, 2017 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Banking Fund	$	269,048	$	—	$	269,048
Basic Materials Fund		670,396		—		670,396
Consumer Products Fund		4,654,580		902,413		5,556,993
Energy Fund		476,798		—		476,798
Energy Services Fund		125,275		—		125,275
Financial Services Fund		570,253		—		570,253
Health Care Fund		—		5,852,628		5,852,628
Leisure Fund		131,755		—		131,755
Precious Metals Fund		3,117,567		—		3,117,567
Real Estate Fund		834,145		—		834,145
Telecommunications Fund		241,655		—		241,655
Transportation Fund		118,994		—		118,994
Utilities Fund		1,131,498		3,711,254		4,842,752

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
Telecommunications Fund		97,383		—		97,383
Transportation Fund		132,339		—		132,339
Utilities Fund		968,404		2,665		971,069

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

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NOTES TO FINANCIAL STATEMENTS (continued)

The tax components of accumulated earnings/(deficit) as of March 31, 2017 were as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation (Depreciation)			Capital Loss Carryforward & Other Losses			Other Temporary Differences
Banking Fund	$	238,285	$	—	$	7,846,151		$	(20,239,731	)	$	—
Basic Materials Fund		401,894		—		7,037,562			(8,009,421	)		(156,724	)
Biotechnology Fund		—		17,204,989		114,814,572			(502,785	)		—
Consumer Products Fund		2,820,723		7,799,718		77,995,041			—			—
Electronics Fund		27,832		—		8,225,218			(3,055,204	)		—
Energy Fund		216,907		—		(3,399,889	)		(650,468	)		—
Energy Services Fund		—		—		(5,313,023	)		(12,478,060	)		—
Financial Services Fund		373,064		—		6,324,482			(3,920,455	)		—
Health Care Fund		1,012,134		2,944,365		(189,291	)		—			—
Internet Fund		—		—		3,709,361			(850,433	)		—
Leisure Fund		1,306,512		—		3,695,032			—			—
Precious Metals Fund		3,137,437		—		(10,839,468	)		(26,268,511	)		(340,556	)
Real Estate Fund		—		—		391,361			(5,583,916	)		—
Retailing Fund		—		—		618,777			(377,028	)		—
Technology Fund		—		1,400,557		8,248,622			(12,630	)		—
Telecommunications Fund		133,323		—		780,355			—			—
Transportation Fund		—		—		7,313,419			(756,326	)		—
Utilities Fund		—		—		4,014,458			—			—

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, 2017, capital loss carryforwards for the Funds were as follows:

							Unlimited						Total
Fund	Expires in 2018			Expires in 2019			Short-Term			Long-Term			Capital Loss Carryforward
Banking Fund	$	(16,385,824	)	$	(912,723	)	$	(1,911,765	)	$	(1,029,419	)	$	(20,239,731	)
Basic Materials Fund		(8,009,421	)		—			—			—			(8,009,421	)
Electronics Fund		—			(3,055,204	)		—			—			(3,055,204	)
Energy Fund		—			—			(650,468	)		—			(650,468	)
Energy Services Fund		(5,702,829	)		—			(4,869,903	)		(1,885,936	)		(12,458,668	)
Financial Services Fund		—			—			(1,883,819	)		(2,036,636	)		(3,920,455	)
Internet Fund		—			—			(792,834	)		—			(792,834	)
Precious Metals Fund		—			—			(5,013,256	)		(21,255,255	)		(26,268,511	)
Real Estate Fund		(4,305,317	)		—			(1,252,958	)		—			(5,558,275	)
Transportation Fund		—			(755,317	)		—			—			(755,317	)

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NOTES TO FINANCIAL STATEMENTS (continued)

For the year ended March 31, 2017, the following capital loss carryforward amounts expired or were used:

Fund	Expired		Utilized		Total
Banking Fund	$	1,809,926	$	633,931	$	2,443,857
Basic Materials Fund		1,991,256		9,895,931		11,887,187
Electronics Fund		5,165,008		3,844,173		9,009,181
Energy Fund		—		10,541,719		10,541,719
Energy Services Fund		16,789,802		2,119,745		18,909,547
Financial Services Fund		—		3,546,102		3,546,102
Internet Fund		—		1,179,768		1,179,768
Leisure Fund		—		1,451,595		1,451,595
Precious Metals		—		4,836,340		4,836,340
Real Estate Fund		2,247,435		6,067,374		8,314,809
Retailing Fund		427,402		2,864,163		3,291,565
Technology Fund		—		2,466,468		2,466,468
Telecommunications Fund		1,318,682		3,758,386		5,077,068
Transportation Fund		—		4,762,940		4,762,940

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” or disposition 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 operating losses, foreign capital gains tax, dividend relcassifications, overdistributions, excise taxes paid, and expiration of capital loss carryforward amounts. 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 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)
Banking Fund	$	(1,809,926	)	$	—		$	1,809,926
Basic Materials Fund		(1,993,296	)		306,441			1,686,855
Biotechnology Fund		19,587,971			3,540,595			(23,128,566	)
Consumer Products Fund		14,652,308			(860,601	)		(13,791,707	)
Electronics Fund		(5,165,008	)		—			5,165,008
Energy Fund		—			—			—
Energy Services Fund		(16,828,245	)		38,443			16,789,802
Financial Services Fund		1			168			(169	)
Health Care Fund		14,424,012			337,173			(14,761,185	)
Internet Fund		(94,381	)		186,286			(91,905	)
Leisure Fund		2,441,844			308,800			(2,750,644	)
Precious Metals Fund		(3	)		3,568,708			(3,568,705	)
Real Estate Fund		(2,369,796	)		122,361			2,247,435
Retailing Fund		(442,678	)		15,106			427,572
Technology Fund		2,485,926			55,622			(2,541,548	)
Telecommunications Fund		(1,318,681	)		—			1,318,681
Transportation Fund		(73,647	)		73,647			—
Utilities Fund		5,014,034			291,724			(5,305,758	)

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NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, 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	$	54,428,408	$	7,863,084	$	(16,933	)	$	7,846,151
Basic Materials Fund		84,580,433		7,854,542		(816,980	)		7,037,562
Biotechnology Fund		228,082,068		118,175,454		(3,360,882	)		114,814,572
Consumer Products Fund		242,547,094		79,609,586		(1,614,545	)		77,995,041
Electronics Fund		75,255,551		9,022,903		(797,685	)		8,225,218
Energy Fund		41,206,359		—		(3,399,889	)		(3,399,889	)
Energy Services Fund		26,339,988		—		(5,313,023	)		(5,313,023	)
Financial Services Fund		56,791,404		6,828,667		(504,185	)		6,324,482
Health Care Fund		52,647,005		454,514		(643,805	)		(189,291	)
Internet Fund		22,065,311		3,902,044		(192,683	)		3,709,361
Leisure Fund		18,821,972		3,790,942		(95,910	)		3,695,032
Precious Metals Fund		83,878,729		—		(10,661,962	)		(10,661,962	)
Real Estate Fund		8,724,958		399,007		(7,646	)		391,361
Retailing Fund		11,833,429		779,984		(161,207	)		618,777
Technology Fund		77,013,609		8,876,250		(627,628	)		8,248,622
Telecommunications Fund		15,335,032		931,974		(151,619	)		780,355
Transportation Fund		39,112,275		7,349,248		(35,829	)		7,313,419
Utilities Fund		43,097,481		4,236,389		(221,931	)		4,014,458

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, 2017, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2017:

Fund	Ordinary			Capital
Biotechnology Fund	$	(502,785	)	$	—
Energy Services Fund		(19,392	)		—
Internet Fund		(57,599	)		—
Real Estate Fund		(25,641	)		—
Retailing Fund		—			(377,028	)
Technology Fund		(12,630	)		—
Transportation Fund		(1,009	)		—

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.

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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, 2017, 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 Securities, Inc.					U.S. Treasury Strips
0.68%					0.00%
Due 04/03/17	$	9,111,744	$	9,112,261	05/15/43	$	20,946,900	$	9,293,985

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, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.

6. Portfolio Securities Loaned

The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, U.S. Bank acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with U.S. Bank, cash collateral and proceeds are invested in the First American Government Obligations Fund — Class Z. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand. Securities lending transactions are accounted for as secured borrowings. The remaining contractual maturity of the securities lending agreement is overnight and continuous.

172 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, the Funds participated in securities lending transactions, which are subject to enforceable netting arrangements, as follows:

	Gross Amounts Not Offset in the Statements of Assets and Liabilities							Securities Lending Collateral
Fund	Value of Securities Loaned		Collateral Received(a)			Net Amount		Cash Collateral Invested		Cash Collateral Uninvested		Total Collateral
Banking Fund	$	727,694	$	(727,694	)	$	—	$	751,055	$	—	$	751,055
Basic Materials Fund		3,930,272		(3,930,272	)		—		4,053,465		—		4,053,465
Biotechnology Fund		26,140,010		(26,140,010	)		—		26,809,744		—		26,809,744
Consumer Products Fund		8,896,881		(8,896,881	)		—		9,078,709		—		9,078,709
Electronics Fund		1,613,030		(1,613,030	)		—		1,654,882		—		1,654,882
Energy Fund		1,640,242		(1,640,242	)		—		1,670,575		—		1,670,575
Energy Services Fund		528,142		(527,989	)*		153		527,989		—		527,989	*
Financial Services Fund		1,376,210		(1,376,210	)		—		1,412,093		—		1,412,093
Health Care Fund		1,651,143		(1,651,143	)		—		1,692,284		—		1,692,284
Internet Fund		1,164,381		(1,164,381	)		—		1,190,549		—		1,190,549
Leisure Fund		892,138		(892,138	)		—		908,995		—		908,995
Precious Metals Fund		6,470,140		(6,470,140	)		—		6,731,112		—		6,731,112
Real Estate Fund		67,894		(67,894	)		—		68,932		—		68,932
Retailing Fund		618,934		(618,934	)		—		637,750		—		637,750
Technology Fund		2,023,836		(2,023,836	)		—		2,068,380		—		2,068,380
Telecommunications Fund		802,010		(802,010	)		—		817,455		—		817,455
Transportation Fund		2,182,998		(2,182,998	)		—		2,221,801		—		2,221,801
Utilities Fund		21,255		(21,255	)		—		21,909		—		21,909

(a)	Actual collateral received by the Fund may be greater than the amount shown due to overcollateralization.
*	Subsequent to March 31, 2017, additional collateral was received.

In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. GI, acting under the supervision of the Board, reviews the value of the collateral and the creditworthiness of those banks and dealers to evaluate potential risks.

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NOTES TO FINANCIAL STATEMENTS (continued)

7. Securities Transactions

For the year ended March 31, 2017, 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	$	414,083,291	$	375,732,876
Basic Materials Fund		367,780,645		335,163,915
Biotechnology Fund		694,384,440		792,455,408
Consumer Products Fund		303,424,562		424,186,000
Electronics Fund		332,829,248		284,178,950
Energy Fund		562,726,331		571,404,264
Energy Services Fund		478,095,588		471,024,362
Financial Services Fund		205,258,695		171,144,451
Health Care Fund		352,272,077		369,511,295
Internet Fund		162,051,471		178,383,436
Leisure Fund		101,050,687		122,019,790
Precious Metals Fund		456,150,258		460,798,497
Real Estate Fund		411,152,614		451,369,115
Retailing Fund		149,394,367		159,353,905
Technology Fund		199,496,014		162,246,309
Telecommunications Fund		172,335,400		191,246,214
Transportation Fund		242,171,249		235,044,269
Utilities Fund		341,034,475		383,239,063

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 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, 2017, 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	$	33,956,135	$	22,061,117	$	713,809
Basic Materials Fund		32,077,721		24,921,544		991,580
Biotechnology Fund		33,956,676		50,547,089		3,713,028
Consumer Products Fund		24,106,646		17,583,929		1,686,385
Electronics Fund		19,597,115		18,531,495		316,329
Energy Fund		42,759,505		46,847,913		466,175
Energy Services Fund		34,934,009		25,363,206		(155,847	)
Financial Services Fund		27,571,676		34,552,529		(119,128	)
Health Care Fund		40,277,355		42,571,105		(479,640	)
Internet Fund		26,025,123		24,009,004		782,065
Leisure Fund		8,934,862		13,621,312		766,639
Precious Metals Fund		35,316,400		32,238,673		1,979,374
Real Estate Fund		25,511,821		29,970,276		663,561
Retailing Fund		10,451,485		12,025,537		460,886
Technology Fund		36,493,511		24,188,150		226,949
Telecommunications Fund		11,180,005		13,036,384		817,798
Transportation Fund		9,827,932		8,057,021		395,838
Utilities Fund		19,836,811		17,450,978		601,810

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NOTES TO FINANCIAL STATEMENTS (continued)

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 11, 2017. 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 1.58% for the year ended March 31, 2017. The Funds did not have any borrowings outstanding under this agreement at March 31, 2017.

The average daily balances borrowed for the year ended March 31, 2017, were as follows:

Fund	Average Daily Balance
Banking Fund	$	16,307
Basic Materials Fund		19,321
Biotechnology Fund		149,705
Consumer Products Fund		67,276
Electronics Fund		37,821
Energy Fund		15,921
Energy Services Fund		19,221
Financial Services Fund		14,140
Health Care Fund		8,184
Internet Fund		6,329
Leisure Fund		6,224
Precious Metals Fund		9,951
Real Estate Fund		8,751
Retailing Fund		10,717
Technology Fund		23,666
Telecommunications Fund		17,105
Transportation Fund		36,406
Utilities Fund		25,262

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. Share Splits

Share splits occurred for the following Funds at the close of business:

Fund	Effective Date	Split Type
Energy Fund	November 7, 2016	One-for-Four Reverse Split
Financial Services Fund	October 31, 2016	Two-for-One Share Split

The effect of the reverse share split was to divide the number of outstanding shares of the Energy Fund by its split ratio, resulting in a corresponding increase in the NAV. The effect of the share split was to multiply the number of outstanding shares of the Financial Services Fund by its split ratio, resulting in a corresponding decrease in the NAV. The share transactions presented in the Statements of Changes in net assets and the per share data in the Financial Highlights for each of the periods presented prior to the effective date, have been restated to reflect these respective share splits. There were no changes in net assets, results of operations or total return as a result of these transactions.

11. 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-

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NOTES TO FINANCIAL STATEMENTS (continued)

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 Tribune 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 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, their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments. On April 12, 2016, the Plaintiffs in the SLCFC actions filed a petition seeking rehearing en banc before the appeals court. On July 22, 2016, the appeals court denied the petition. On September 9, 2016, the plaintiffs filed a petition for writ of certiorari in the U.S. Supreme Court challenging the Second Circuit’s decision that the safe harbor of Section 546(e) applied to their claims. The shareholder defendants, including the Funds, filed a joint brief in opposition to the petition for certiorari on October 24, 2016. The Supreme Court has not yet granted or denied the petition for certiorari.

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. On January 6, 2017, the United States District Court for the Southern District of New York granted the shareholder defendants’ motion to dismiss the intentional fraudulent conveyance claim in the FitzSimons action. In dismissing the intentional fraudulent conveyance claim, the Court denied the plaintiff’s request to amend the complaint. The plaintiff requested that the Court direct entry of a final judgment in order to make the order immediately appealable. On February 23, 2017, the Court issued an order stating that it intends to permit an interlocutory appeal of the dismissal order, but will wait to do so until it has resolved outstanding motions to dismiss filed by other defendants. Accordingly, the timing of the appeal is uncertain.

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”). Its funds may also be putative members of the proposed defendant classes in Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adv. Pro. No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust Action”) and Weisfelner, as Trustee of the LB Creditor Trust, v. Reichman (In re Lyondell Chemical Co.), Adv. Pro. No. 12-1570 (Bankr. S.D.N.Y.) (“Reichman”).

Similar to the claims made in the Tribune matter, the Weisfelner complaints seek to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008. The Creditor Trust

176 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (concluded)

Action and Reichman allege claims against the former Lyondell shareholders under state law for both constructive fraudulent transfer and intentional fraudulent transfer. The Litigation Trust Action alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On April 7, 2014, the plaintiff filed a Third Amended Complaint in the Creditor Trust Action, a Second Amended Complaint in the Litigation Trust Action, and an Amended Complaint in Reichman.

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 these lawsuits. The Bankruptcy Court held oral argument on the motion 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 intentional fraudulent transfer claims in the Creditor Trust Action, the Litigation Trust Action, and in Reichman, but denied the motion to dismiss the constructive fraudulent transfer claims in the Creditor Trust Action and in Reichman. The Bankruptcy Court entered final judgment dismissing the Litigation Trust Action, but the plaintiff 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 Action and Reichman in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. On July 20, 2016, the Bankruptcy Court issued a report and recommendation granting the defendants’ motion to dismiss. The U.S. District Court for the Southern District of New York has not yet accepted the Bankruptcy Court’s recommendation or entered a final judgment.

On July 27, 2016, the District Court reversed the Bankruptcy Court and reinstated the federal law intentional fraudulent transfer claim in the Litigation Trust Action and remanded to the Bankruptcy Court for further proceedings. The District Court found that the fraudulent intent that mattered was that of Lyondell’s CEO, not its board, because the CEO’s intent could be imputed to Lyondell under Delaware law agency principles. The District Court did note, however, that plaintiff faces a high standard for proving “actual intent” to harm creditors, and that it remains to be seen whether plaintiff will be able to make this showing. On August 11, 2016, the shareholder defendants filed a motion for reconsideration and/or to certify an interlocutory appeal of the District Court’s opinion. On October 5, 2016, the District Court denied the motion for reconsideration and/or to certify an interlocutory appeal. In light of this ruling, the federal intentional fraudulent conveyance claim will move forward before the Bankruptcy Court, but a schedule for that case has not yet been set.

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.

THE RYDEX FUNDS ANNUAL REPORT | 177

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, 2017, 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, 2017, by correspondence with the custodian 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 position of the above listed Funds (eighteen of the series constituting the Rydex Series Funds) at March 31, 2017, 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.

Tysons, Virginia

May 30, 2017

178 | 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, 2017, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
Banking Fund	100.00%
Basic Materials Fund	86.55%
Consumer Products Fund	89.22%
Energy Fund	100.00%
Energy Services Fund	100.00%
Financial Services Fund	67.86%
Leisure Fund	100.00%
Precious Metals Fund	2.40%
Real Estate Fund	1.17%
Telecommunications Fund	100.00%
Transportation Fund	100.00%
Utilities Fund	77.18%

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%
Consumer Products Fund	92.64%
Energy Fund	100.00%
Energy Services Fund	100.00%
Financial Services Fund	100.00%
Leisure Fund	100.00%
Precious Metals Fund	7.71%
Real Estate Fund	5.96%
Telecommunications Fund	100.00%
Transportation Fund	100.00%
Utilities Fund	76.68%

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2017, 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	% Short-Term Capital Gain Qualifying
Consumer Products Fund	—	100.00%

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OTHER INFORMATION (Unaudited) (concluded)

With respect to the taxable year ended March 31, 2017, 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	$	—	$	20,467,430
Consumer Products Fund		902,413		6,264,059
Health Care Fund		5,852,628		14,424,012
Leisure Fund		—		1,783,756
Technology Fund		—		2,485,928
Utilities Fund		3,711,254		3,915,429

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 https://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 https://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 https://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.

180 | 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)	President and 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).	230	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Guggenheim Partners Investment Management Holdings, LLC (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Angela Brock-Kyle***** (1959)	Trustee from August 2016 to present.	Current: Founder and Chief Executive Officer, B.O.A.R.D.S (consulting firm) Former: Senior Leader, TIAA (financial services firm) (1987-2012).	135	Infinity Property & Casualty Corporation (2014-present).
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.	135	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.	135	Epiphany Funds (4) (2009-present).

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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
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.	135	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).	135	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).	135	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).	135	None.
Sandra G. Sponem***** (1958)	Trustee from August 2016 to present.	Current: Senior Vice President and Chief Financial Officer, M.A. Mortenson Companies, Inc. (general contracting firm) (2007-present).	135	None.

182 | THE RYDEX FUNDS ANNUAL REPORT

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
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.
Joanna M. Catalucci (1966)	AML Officer (2016-present)	Current: Chief Compliance Officer, certain funds in the Fund Complex (2012-present); Senior Managing Director, Guggenheim Investments (2014-present); AML Officer, certain funds in the Fund Complex (2016-present). Former: Chief Compliance Officer and Secretary, certain other funds in the Fund Complex (2008-2012); Senior Vice President & Chief Compliance Officer, Security Investors, LLC and certain affiliates (2010-2012); Chief Compliance Officer and Senior Vice President, Rydex Advisors, LLC and certain affiliates (2010-2011).
James M. Howley (1972)	Assistant Treasurer (2016-present)	Current: Managing Director, Guggenheim Investments (2004-present); Assistant Treasurer, certain other funds in the Fund Complex (2006-present). Former: Manager, Mutual Fund Administration of Van Kampen Investments, Inc. (1996-2004).
Keith D. Kemp (1960)	Assistant Treasurer (2016-present)	Current: Treasurer and Assistant Treasurer, certain other funds in the Fund Complex (2010-present); Managing Director of Guggenheim Partners Investment Management, LLC (2015-present); Chief Financial Officer, Guggenheim Specialized Products, LLC (2016-present). Former: Managing Director and Director, Transparent Value, LLC (2010-2016); Director, Guggenheim Partners Investment Management, LLC (2010-2015); Chief Operating Officer, Macquarie Capital Investment Management (2007-2009).
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).
Glenn McWhinnie (1969)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2009-present). Former: Tax Compliance Manager, Ernst & Young LLP (1996-2009).
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).

THE RYDEX FUNDS ANNUAL REPORT | 183

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
Adam J. Nelson (1979)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2015-present); Assistant Treasurer, certain other funds in the Fund Complex (2015-present). Former: Assistant Vice President and Fund Administration Director, State Street Corporation (2013-2015); Fund Administration Assistant Director, State Street (2011-2013); Fund Administration Manager, State Street (2009-2011).
Kimberly J. Scott (1974)	Assistant Treasurer (2016-present)	Current: Director, Guggenheim Investments (2012-present); Assistant Treasurer, certain other funds in the Fund Complex (2012-present). Former: Financial Reporting Manager, Invesco, Ltd. (2010-2011); Vice President/Assistant Treasurer, Mutual Fund Administration for Van Kampen Investments, Inc./Morgan Stanley Investment Management (2009-2010); Manager of Mutual Fund Administration, Van Kampen Investments, Inc./Morgan Stanley Investment Management (2005-2009).
John L. Sullivan (1955)	Chief Financial Officer and Treasurer (2016-present)	Current: CFO, Chief Accounting Officer and Treasurer, certain other funds in the Fund Complex (2010-present); Senior Managing Director, Guggenheim Investments (2010-present). Former: Managing Director and CCO, each of the funds in the Van Kampen Investments fund complex (2004-2010); Managing Director and Head of Fund Accounting and Administration, Morgan Stanley Investment Management (2002-2004); CFO and Treasurer, Van Kampen Funds (1996-2004).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 227 West Monroe Street, Chicago, Illinois 60606.
**	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.
****	Certain of the Trustees may serve as directors on the boards of companies not required to be disclosed above, including certain non-profit companies and charitable foundations.
*****	Mses. Brock-Kyle and Sponem commence serving as independent Trustees effective August 18, 2016.

184 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Guggenheim Investments as used herein refers to Guggenheim Partners, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Investment Management, LLC, Guggenheim Funds Distributors, LLC and Security Investors, LLC as well as the funds in the Guggenheim Funds complex (the “funds”).

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 personal information about you, we hold ourselves to high standards in its safekeeping and use. This means, most importantly, that we do not sell client or account information to anyone—whether you are a current or former Guggenheim Investments client.

The Information We Collect About You and How We Collect It

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 Funds or one of the Guggenheim affiliated companies. “Nonpublic personal information” is personally identifiable information about you. For example it includes 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 Share Your Personal Information

As a matter of policy, we do not disclose your nonpublic personal information to nonaffiliated third parties except as required or permitted by law. 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 your personal 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. In connection with servicing your accounts or 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 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 personal 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 share personal information about you if we are compelled by law to do so, if you direct us to do so with your consent, or in other circumstances as permitted by law.

How We Safeguard Your Personal Information

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Guggenheim Investments, access to such information is limited to those who need it to perform their jobs such as servicing your account, resolving problems or informing you of new products and services.

THE RYDEX FUNDS ANNUAL REPORT | 185

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3.31.2017

Rydex Funds Annual Report

Domestic Equity Funds

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

Fixed Income Funds

Government Long Bond 1.2x Strategy Fund

Inverse Government Long Bond Strategy Fund

High Yield Strategy Fund

Inverse High Yield Strategy Fund

Money Market Fund

U.S. Government Money Market Fund

GuggenheimInvestments.com RTB1-ANN-0317x0318

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	40
MONTHLY REBALANCE NASDAQ-100® 2x STRATEGY FUND	49
INVERSE NASDAQ-100® STRATEGY FUND	58
MID-CAP 1.5x STRATEGY FUND	67
INVERSE MID-CAP STRATEGY FUND	79
RUSSELL 2000® 1.5x STRATEGY FUND	87
RUSSELL 2000® FUND	113
INVERSE RUSSELL 2000® STRATEGY FUND	140
DOW JONES INDUSTRIAL AVERAGE® FUND	148
GOVERNMENT LONG BOND 1.2x STRATEGY FUND	156
INVERSE GOVERNMENT LONG BOND STRATEGY FUND	167
HIGH YIELD STRATEGY FUND	177
INVERSE HIGH YIELD STRATEGY FUND	186
U.S. GOVERNMENT MONEY MARKET FUND	194
NOTES TO FINANCIAL STATEMENTS	200
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	223
OTHER INFORMATION	224
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	226
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	230

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2017

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, 2017.

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 and Chief Executive Officer
April 30, 2017

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, 2017

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, 2017

The market optimism that helped lift risk asset prices after the presidential election in November continued through the early part of 2017. The Standard & Poor’s^® (“S&P 500”) Index set a new record, high yield corporate bond spreads approached cycle lows, and the 10-year Treasury yield rose to 2.63%, the highest level since 2014. Risk appetite faded as the first quarter drew to a close, however, as investors grappled with the implications of an unsuccessful healthcare reform bill and growing geopolitical risks.

Much of the rise in asset valuations since Donald Trump’s victory has been based on anticipation of his pro-growth policies coming to fruition, an outcome that is far from certain. Asset valuations could be getting a bit ahead of themselves, and becoming more sensitive to a temporary growth scare or setback, especially since the rollout of Trump’s new policies will not be smooth or easy.

Nevertheless, the underlying economy remains on a good trajectory. Tracking estimates for first-quarter real U.S. Gross Domestic Product (“GDP”) growth have fallen in recent weeks despite strong gains in consumer and business sentiment since the election. In late April, after the period ended, the initial estimate of first-quarter GDP growth was 0.7%. However, we attribute a large portion of the apparent weakness to seasonal factors that have depressed as-reported first quarter GDP growth over the past several years. In keeping with this pattern, we would expect the final first-quarter GDP number to be revised higher. More importantly, the prospects for quarterly GDP growth appear stronger going forward.

Consumer spending should benefit from solid income and wealth gains, with household net worth sitting at an all-time high. Recent job gains have been strong, and we anticipate a further acceleration of wage growth as the labor market continues to tighten. Buoyant consumer sentiment and low household debt service outlays also support our positive outlook. On the business investment side, we expect various factors to be supportive, including the uptick in global industrial production growth, the ongoing rise in U.S. oil drilling activity, the surge in small-business optimism, and the recovery in corporate earnings.

On March 15, the Federal Open Market Committee (“FOMC”) raised the U.S. Federal Reserve (the “Fed”) funds target rate by 25 basis points to a range of 0.75–1.0%. The hike itself had little impact on markets because several FOMC members had indicated in the weeks leading up to the meeting that a hike was likely. Looking ahead, we believe that the market is underpricing the likely pace of the Fed rate hikes in 2017 and 2018, particularly now that market optimism about fiscal stimulus is waning.

Importantly, Chair Yellen noted that the FOMC’s baseline forecast of two additional rate increases in 2017 and three more in 2018 was not conditioned on expectations for fiscal stimulus. Rather, it reflected a need to gradually remove accommodation due to the fact that the Fed has essentially achieved its dual mandate objectives for employment and inflation. Fiscal easing, she explained, could result in a faster pace of tightening, if it materializes. Markets are skeptical and are pricing in only 1.5 more rate hikes in 2017 and another 1.5 rate hikes in 2018, according to fed funds futures contracts. We expect that the Fed will deliver three more rate hikes in 2017 and another four in 2018.

We expect to see equity and credit investors take more chips off the table unless there is concrete progress on fiscal legislation in Washington, particularly as the Fed demonstrates its desire to tighten even without fiscal stimulus. While we are optimistic about the near-term U.S. economic outlook, current valuations and growing political risks warrant a more defensive stance.

For the 12 months ended March 31, 2017, the S&P 500 Index* returned 17.17%. The MSCI Europe-Australasia-Far East (“EAFE”) Index* returned 11.67%. The return of the MSCI Emerging Markets Index* was 17.22%.

In the bond market, the Bloomberg Barclays U.S. Aggregate Bond Index* posted a 0.44% return for the period, while the Bloomberg Barclays U.S. Corporate High Yield Index* returned 16.39%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.35% 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, 2017

*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.

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.

Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, mortgage-backed securities or “MBS” (agency fixed-rate and hybrid adjustable-rate mortgage, or “ARM”, pass-throughs), asset-backed securities (“ABS”), and commercial mortgage-backed securities (“CMBS”) (agency and non-agency).

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

Bloomberg 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.

Dow Jones Industrial Average^® 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)

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.

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, 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, 2016 and ending March 31, 2017.

The following tables illustrate the Funds’ 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 fifth 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 the Funds’ expenses, including annual expense ratios for periods up to 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, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 1. Based on actual Fund return3
Nova Fund
Investor Class	1.28%	14.14%	$ 1,000.00	$ 1,141.40	$ 6.83
A-Class	1.53%	13.98%	1,000.00	1,139.80	8.16
C-Class	2.28%	13.54%	1,000.00	1,135.40	12.14
H-Class	1.53%	14.03%	1,000.00	1,140.30	8.16
S&P 500® Fund
A-Class	1.58%	9.17%	1,000.00	1,091.70	8.24
C-Class	2.33%	8.80%	1,000.00	1,088.00	12.13
H-Class	1.59%	9.20%	1,000.00	1,092.00	8.29
Inverse S&P 500® Strategy Fund
Investor Class	1.43%	(9.32%)	1,000.00	906.80	6.80
A-Class	1.68%	(9.42%)	1,000.00	905.80	7.98
C-Class	2.43%	(9.78%)	1,000.00	902.20	11.52
H-Class	1.68%	(9.49%)	1,000.00	905.10	7.98
Monthly Rebalance NASDAQ-100® 2x Strategy Fund
A-Class	1.35%	23.82%	1,000.00	1,238.20	7.53
C-Class	2.10%	23.32%	1,000.00	1,233.20	11.69
H-Class	1.35%	23.78%	1,000.00	1,237.80	7.53
Inverse NASDAQ-100® Strategy Fund
Investor Class	1.47%	(10.96%)	1,000.00	890.40	6.93
A-Class	1.72%	(11.11%)	1,000.00	888.90	8.10
C-Class	2.47%	(11.42%)	1,000.00	885.80	11.61
H-Class	1.72%	(11.07%)	1,000.00	889.30	8.10
Mid-Cap 1.5x Strategy Fund
A-Class	1.68%	16.79%	1,000.00	1,167.90	9.08
C-Class	2.43%	16.39%	1,000.00	1,163.90	13.11
H-Class	1.68%	16.88%	1,000.00	1,168.80	9.08
Inverse Mid-Cap Strategy Fund
A-Class	1.69%	(11.00%)	1,000.00	890.00	7.96
C-Class	2.43%	(11.33%)	1,000.00	886.70	11.43
H-Class	1.68%	(11.01%)	1,000.00	889.90	7.92
Russell 2000® 1.5x Strategy Fund
A-Class	1.74%	16.15%	1,000.00	1,161.50	9.38
C-Class	2.48%	15.71%	1,000.00	1,157.10	13.34
H-Class	1.73%	16.02%	1,000.00	1,160.20	9.32
Russell 2000® Fund
A-Class	1.64%	10.55%	1,000.00	1,105.50	8.61
C-Class	2.39%	10.15%	1,000.00	1,101.50	12.52
H-Class	1.64%	10.58%	1,000.00	1,105.80	8.61
Inverse Russell 2000® Strategy Fund
A-Class	1.73%	(11.60%)	1,000.00	884.00	8.13
C-Class	2.48%	(11.86%)	1,000.00	881.40	11.63
H-Class	1.73%	(11.57%)	1,000.00	884.30	8.13

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Dow Jones Industrial Average® Fund
A-Class	1.57%	13.41%	$ 1,000.00	$ 1,134.10	$ 8.35
C-Class	2.32%	12.99%	1,000.00	1,129.90	12.32
H-Class	1.58%	13.42%	1,000.00	1,134.20	8.41
Government Long Bond 1.2x Strategy Fund
Investor Class	0.99%	(15.89%)	1,000.00	841.10	4.54
A-Class	1.24%	(15.92%)	1,000.00	840.80	5.69
C-Class	1.98%	(16.24%)	1,000.00	837.60	9.07
H-Class	1.24%	(15.96%)	1,000.00	840.40	5.69
Inverse Government Long Bond Strategy Fund
Investor Class	3.72%	13.96%	1,000.00	1,139.60	19.84
A-Class	4.01%	13.84%	1,000.00	1,138.40	21.38
C-Class	4.75%	13.39%	1,000.00	1,133.90	25.27
H-Class	3.96%	13.83%	1,000.00	1,138.30	21.11
High Yield Strategy Fund
A-Class	1.52%	2.30%	1,000.00	1,023.00	7.67
C-Class	2.27%	1.90%	1,000.00	1,019.00	11.43
H-Class	1.52%	2.26%	1,000.00	1,022.60	7.66
Inverse High Yield Strategy Fund
A-Class	1.53%	(3.01%)	1,000.00	969.90	7.51
C-Class	2.28%	(3.31%)	1,000.00	966.90	11.18
H-Class	1.53%	(2.22%)	1,000.00	977.80	7.54
U.S. Government Money Market Fund
Money Market Class	0.56%	0.01%	1,000.00	1,000.10	2.79

THE RYDEX FUNDS ANNUAL REPORT | 9

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
Nova Fund
Investor Class	1.28%	5.00%	$ 1,000.00	$ 1,018.55	$ 6.44
A-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
S&P 500® Fund
A-Class	1.58%	5.00%	1,000.00	1,017.05	7.95
C-Class	2.33%	5.00%	1,000.00	1,013.31	11.70
H-Class	1.59%	5.00%	1,000.00	1,017.00	8.00
Inverse S&P 500® Strategy Fund
Investor Class	1.43%	5.00%	1,000.00	1,017.80	7.19
A-Class	1.68%	5.00%	1,000.00	1,016.55	8.45
C-Class	2.43%	5.00%	1,000.00	1,012.81	12.19
H-Class	1.68%	5.00%	1,000.00	1,016.55	8.45
Monthly Rebalance NASDAQ-100® 2x Strategy Fund
A-Class	1.35%	5.00%	1,000.00	1,018.20	6.79
C-Class	2.10%	5.00%	1,000.00	1,014.46	10.55
H-Class	1.35%	5.00%	1,000.00	1,018.20	6.79
Inverse NASDAQ-100® Strategy Fund
Investor Class	1.47%	5.00%	1,000.00	1,017.60	7.39
A-Class	1.72%	5.00%	1,000.00	1,016.36	8.65
C-Class	2.47%	5.00%	1,000.00	1,012.62	12.39
H-Class	1.72%	5.00%	1,000.00	1,016.36	8.65
Mid-Cap 1.5x Strategy Fund
A-Class	1.68%	5.00%	1,000.00	1,016.55	8.45
C-Class	2.43%	5.00%	1,000.00	1,012.81	12.19
H-Class	1.68%	5.00%	1,000.00	1,016.55	8.45
Inverse Mid-Cap Strategy Fund
A-Class	1.69%	5.00%	1,000.00	1,016.50	8.50
C-Class	2.43%	5.00%	1,000.00	1,012.81	12.19
H-Class	1.68%	5.00%	1,000.00	1,016.55	8.45
Russell 2000® 1.5x Strategy Fund
A-Class	1.74%	5.00%	1,000.00	1,016.26	8.75
C-Class	2.48%	5.00%	1,000.00	1,012.57	12.44
H-Class	1.73%	5.00%	1,000.00	1,016.31	8.70
Russell 2000® Fund
A-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
C-Class	2.39%	5.00%	1,000.00	1,013.01	11.99
H-Class	1.64%	5.00%	1,000.00	1,016.75	8.25
Inverse Russell 2000® Strategy Fund
A-Class	1.73%	5.00%	1,000.00	1,016.31	8.70
C-Class	2.48%	5.00%	1,000.00	1,012.57	12.44
H-Class	1.73%	5.00%	1,000.00	1,016.31	8.70

10 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Dow Jones Industrial Average® Fund
A-Class	1.57%	5.00%	$ 1,000.00	$ 1,017.10	$ 7.90
C-Class	2.32%	5.00%	1,000.00	1,013.36	11.65
H-Class	1.58%	5.00%	1,000.00	1,017.05	7.95
Government Long Bond 1.2x Strategy Fund
Investor Class	0.99%	5.00%	1,000.00	1,020.00	4.99
A-Class	1.24%	5.00%	1,000.00	1,018.75	6.24
C-Class	1.98%	5.00%	1,000.00	1,015.06	9.95
H-Class	1.24%	5.00%	1,000.00	1,018.75	6.24
Inverse Government Long Bond Strategy Fund
Investor Class	3.72%	5.00%	1,000.00	1,006.38	18.61
A-Class	4.01%	5.00%	1,000.00	1,004.94	20.04
C-Class	4.75%	5.00%	1,000.00	1,001.25	23.70
H-Class	3.96%	5.00%	1,000.00	1,005.19	19.80
High Yield Strategy Fund
A-Class	1.52%	5.00%	1,000.00	1,017.35	7.64
C-Class	2.27%	5.00%	1,000.00	1,013.61	11.40
H-Class	1.52%	5.00%	1,000.00	1,017.35	7.64
Inverse High Yield Strategy Fund
A-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
U.S. Government Money Market Fund
Money Market Class	0.56%	5.00%	1,000.00	1,022.14	2.82

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 1.43%, 1.63%, 2.43% and 1.68% 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 182/365 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2016 to March 31, 2017.

THE RYDEX FUNDS ANNUAL REPORT | 11

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 23.84%, while the S&P 500 Index returned 17.17% over the same period.

Sectors contributing the most to the performance of the underlying index were Information Technology and Financials. No sector detracted; the Telecommunications Services sector contributed least, followed by the Real Estate sector.

Apple, Inc., Amazon.com, Inc., and JPMorgan Chase & Co. were the holdings contributing the most to the performance of the underlying index for the period. Gilead Sciences, Inc., CVS Health Corp., and Allergan plc 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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, 2017

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

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	11.4%
Guggenheim Strategy Fund II	11.0%
Apple, Inc.	1.4%
Microsoft Corp.	0.9%
Amazon.com, Inc.	0.6%
Exxon Mobil Corp.	0.6%
Johnson & Johnson	0.6%
Facebook, Inc. — Class A	0.6%
Berkshire Hathaway, Inc. — Class B	0.6%
JPMorgan Chase of Co.	0.6%
Top Ten Total	28.3%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	23.84%	17.90%	7.45%
A-Class Shares	23.57%	17.63%	7.19%
A-Class Shares with sales charge†	17.70%	16.49%	6.67%
C-Class Shares	22.60%	16.73%	6.38%
C-Class Shares with CDSC‡	21.60%	16.73%	6.38%
S&P 500 Index	17.17%	13.30%	7.51%

	1 Year	Since Inception (09/18/14)
H-Class Shares	23.56%	10.41%
S&P 500 Index	17.17%	8.85%

*	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, 2017
NOVA FUND

		Shares		Value
COMMON STOCKS† - 36.8%
Consumer, Non-cyclical - 8.3%
Johnson & Johnson			5,384	$	670,576
Procter & Gamble Co.			5,073		455,809
Pfizer, Inc.			11,810		404,019
Philip Morris International, Inc.			3,078		347,506
Merck & Company, Inc.			5,448		346,166
Coca-Cola Co.			7,667		325,387
PepsiCo, Inc.			2,832		316,788
UnitedHealth Group, Inc.			1,909		313,094
Altria Group, Inc.			3,848		274,824
Amgen, Inc.			1,461		239,705
Medtronic plc			2,716		218,801
AbbVie, Inc.			3,163		206,101
Celgene Corp.*			1,544		192,120
Bristol-Myers Squibb Co.			3,319		180,487
Gilead Sciences, Inc.			2,593		176,117
Eli Lilly & Co.			1,927		162,080
Allergan plc			665		158,882
Abbott Laboratories			3,429		152,282
Mondelez International, Inc. — Class A			3,029		130,490
Colgate-Palmolive Co.			1,752		128,229
Thermo Fisher Scientific, Inc.			775		119,040
Biogen, Inc.*			428		117,024
Kraft Heinz Co.			1,183		107,428
Danaher Corp.			1,211		103,577
Reynolds American, Inc.			1,641		103,416
PayPal Holdings, Inc.*			2,228		95,849
Kimberly-Clark Corp.			706		92,931
Automatic Data Processing, Inc.			891		91,230
Aetna, Inc.			698		89,030
Anthem, Inc.			525		86,825
Stryker Corp.			614		80,833
Express Scripts Holding Co.*			1,202		79,223
Becton Dickinson and Co.			422		77,412
Cigna Corp.			510		74,710
General Mills, Inc.			1,151		67,921
Boston Scientific Corp.*			2,705		67,273
S&P Global, Inc.			513		67,070
Ecolab, Inc.			521		65,302
McKesson Corp.			421		62,418
Humana, Inc.			296		61,017
Regeneron Pharmaceuticals, Inc.*			151		58,514
Intuitive Surgical, Inc.*			73		55,952
Constellation Brands, Inc. — Class A			343		55,590
Alexion Pharmaceuticals, Inc.*			446		54,073
Kroger Co.			1,833		54,055
Vertex Pharmaceuticals, Inc.*			493		53,910
Archer-Daniels-Midland Co.			1,133		52,163
Zoetis, Inc.			976		52,089
Sysco Corp.	��		986		51,193
Cardinal Health, Inc.			626		51,051
HCA Holdings, Inc.*			573		50,991
Baxter International, Inc.			964		49,993
Illumina, Inc.*			290		49,486
Zimmer Biomet Holdings, Inc.			399		48,722
Incyte Corp.*			350		46,785
Edwards Lifesciences Corp.*			422		39,698
Estee Lauder Cos., Inc. — Class A			441		37,393
Moody’s Corp.			329		36,861
Monster Beverage Corp.*			798		36,844
Kellogg Co.			502		36,450
Mylan N.V.*			914		35,637
Dr Pepper Snapple Group, Inc.			363		35,545
CR Bard, Inc.			143		35,541
Tyson Foods, Inc. — Class A			569		35,113
Molson Coors Brewing Co. — Class B			366		35,030
Clorox Co.			255		34,382
Conagra Brands, Inc.			820		33,079
Equifax, Inc.			238		32,544
Mead Johnson Nutrition Co. — Class A			364		32,425
JM Smucker Co.			231		30,279
Hershey Co.			277		30,262
Laboratory Corp. of America Holdings*			203		29,124
AmerisourceBergen Corp. — Class A			328		29,028
Dentsply Sirona, Inc.			456		28,473
Nielsen Holdings plc			667		27,554
IDEXX Laboratories, Inc.*			175		27,057
Quest Diagnostics, Inc.			273		26,806
Henry Schein, Inc.*			157		26,685
Church & Dwight Company, Inc.			505		25,184
Verisk Analytics, Inc. — Class A*			307		24,910
Global Payments, Inc.			302		24,365
Centene Corp.*			341		24,300
Hologic, Inc.*			554		23,573
McCormick & Co., Inc.			226		22,046
Universal Health Services, Inc. — Class B			177		22,028
Campbell Soup Co.			384		21,980
Cintas Corp.			171		21,638
DaVita, Inc.*			309		21,003
United Rentals, Inc.*			167		20,883
Western Union Co.			954		19,414
Cooper Cos., Inc.			97		19,389
Perrigo Company plc			284		18,855
Whole Foods Market, Inc.			632		18,783
Hormel Foods Corp.			535		18,527
Total System Services, Inc.			327		17,481
Coty, Inc. — Class A			934		16,933
Varian Medical Systems, Inc.*			185		16,859
Brown-Forman Corp. — Class B			351		16,209
Envision Healthcare Corp.*			233		14,288
Avery Dennison Corp.			177		14,266
Robert Half International, Inc.			254		12,403
Quanta Services, Inc.*			300		11,133
H&R Block, Inc.			411		9,556
Mallinckrodt plc*			208		9,271
Patterson Companies, Inc.1			163		7,372
Total Consumer, Non-cyclical					9,138,018
Financial - 6.8%
Berkshire Hathaway, Inc. — Class B*			3,769		628,216
JPMorgan Chase & Co.			7,087		622,522
Wells Fargo & Co.			8,935		497,322

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NOVA FUND

	Shares		Value
Bank of America Corp.		19,892	$	469,252
Citigroup, Inc.		5,498		328,890
Visa, Inc. — Class A		3,687		327,664
Mastercard, Inc. — Class A		1,869		210,206
Goldman Sachs Group, Inc.		735		168,844
U.S. Bancorp		3,160		162,740
Chubb Ltd.		924		125,895
Morgan Stanley		2,851		122,137
American Express Co.		1,502		118,823
PNC Financial Services Group, Inc.		965		116,031
American International Group, Inc.		1,846		115,245
MetLife, Inc.		2,157		113,933
Simon Property Group, Inc.		635		109,239
American Tower Corp. — Class A		848		103,066
Charles Schwab Corp.		2,410		98,352
Bank of New York Mellon Corp.		2,059		97,247
BlackRock, Inc. — Class A		241		92,426
Prudential Financial, Inc.		853		90,998
Capital One Financial Corp.		954		82,674
CME Group, Inc. — Class A		674		80,071
Marsh & McLennan Companies, Inc.		1,022		75,516
BB&T Corp.		1,604		71,699
Intercontinental Exchange, Inc.		1,182		70,766
Crown Castle International Corp.		715		67,532
Travelers Cos., Inc.		555		66,900
Public Storage		296		64,797
Aon plc		521		61,837
Equinix, Inc.		154		61,657
Allstate Corp.		724		58,999
Aflac, Inc.		797		57,719
State Street Corp.		712		56,682
Prologis, Inc.		1,050		54,474
SunTrust Banks, Inc.		975		53,918
Synchrony Financial		1,528		52,410
Discover Financial Services		765		52,318
Welltower, Inc.		719		50,920
Weyerhaeuser Co.		1,486		50,494
AvalonBay Communities, Inc.		272		49,939
M&T Bank Corp.		306		47,347
Ventas, Inc.		704		45,788
Equity Residential		728		45,296
Progressive Corp.		1,152		45,135
Boston Properties, Inc.		305		40,385
Ameriprise Financial, Inc.		306		39,682
KeyCorp		2,128		37,836
Fifth Third Bancorp		1,489		37,821
Northern Trust Corp.		427		36,970
Hartford Financial Services Group, Inc.		742		35,668
Citizens Financial Group, Inc.		1,010		34,896
Regions Financial Corp.		2,391		34,741
Vornado Realty Trust		342		34,306
Digital Realty Trust, Inc.		316		33,619
Principal Financial Group, Inc.		530		33,448
Willis Towers Watson plc		253		33,115
T. Rowe Price Group, Inc.		483		32,916
Realty Income Corp.		538		32,027
Essex Property Trust, Inc.		130		30,099
Lincoln National Corp.		447		29,256
HCP, Inc.		929		29,059
Huntington Bancshares, Inc.		2,155		28,855
Franklin Resources, Inc.		684		28,824
Alliance Data Systems Corp.		111		27,639
Host Hotels & Resorts, Inc.		1,467		27,374
GGP, Inc.		1,159		26,866
Loews Corp.		548		25,630
Invesco Ltd.		801		24,535
Comerica, Inc.1		349		23,934
Mid-America Apartment Communities, Inc.		225		22,892
Cincinnati Financial Corp.		297		21,464
Unum Group		455		21,335
SL Green Realty Corp.		200		21,324
XL Group Ltd.		526		20,966
CBRE Group, Inc. — Class A*		597		20,770
Arthur J Gallagher & Co.		354		20,015
Alexandria Real Estate Equities, Inc.		176		19,452
Raymond James Financial, Inc.		254		19,370
Regency Centers Corp.		290		19,253
UDR, Inc.		530		19,218
Federal Realty Investment Trust		143		19,091
E*TRADE Financial Corp.*		545		19,015
Kimco Realty Corp.		845		18,666
Extra Space Storage, Inc.		250		18,598
Affiliated Managers Group, Inc.		113		18,525
Iron Mountain, Inc.		487		17,371
Zions Bancorporation		402		16,884
Torchmark Corp.		217		16,718
Nasdaq, Inc.		228		15,835
Macerich Co.		240		15,456
CBOE Holdings, Inc.		182		14,755
Apartment Investment & Management Co. — Class A		312		13,837
People’s United Financial, Inc.		629		11,448
Assurant, Inc.		110		10,524
Navient Corp.		577		8,517
Total Financial				7,404,736
Technology - 5.2%
Apple, Inc.		10,410		1,495,500
Microsoft Corp.		15,333		1,009,831
Intel Corp.		9,381		338,373
International Business Machines Corp.		1,703		296,560
Oracle Corp.		5,947		265,296
Broadcom Ltd.		796		174,292
QUALCOMM, Inc.		2,931		168,064
Texas Instruments, Inc.		1,983		159,750
Accenture plc — Class A		1,235		148,052
Adobe Systems, Inc.*		984		128,047
NVIDIA Corp.		1,169		127,339
salesforce.com, Inc.*		1,299		107,155
Applied Materials, Inc.		2,143		83,363
Hewlett Packard Enterprise Co.		3,303		78,281

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NOVA FUND

	Shares		Value
Cognizant Technology Solutions Corp. — Class A*		1,208	$	71,900
Activision Blizzard, Inc.		1,372		68,408
HP, Inc.		3,360		60,077
Micron Technology, Inc.*		2,057		59,447
Analog Devices, Inc.		722		59,168
Intuit, Inc.		482		55,907
Electronic Arts, Inc.*		612		54,786
Fidelity National Information Services, Inc.		652		51,911
Fiserv, Inc.*		426		49,122
Western Digital Corp.		572		47,207
Lam Research Corp.		323		41,460
Paychex, Inc.		634		37,343
Skyworks Solutions, Inc.		367		35,959
Cerner Corp.*		582		34,251
Autodesk, Inc.*		389		33,637
Microchip Technology, Inc.		429		31,652
Red Hat, Inc.*		354		30,621
KLA-Tencor Corp.		311		29,567
Xilinx, Inc.		494		28,598
Seagate Technology plc		586		26,915
Citrix Systems, Inc.*		310		25,851
NetApp, Inc.		538		22,515
Advanced Micro Devices, Inc.*		1,531		22,276
Synopsys, Inc.*		299		21,567
Akamai Technologies, Inc.*		344		20,537
CA, Inc.		622		19,730
Qorvo, Inc.*		251		17,209
Xerox Corp.		1,694		12,434
CSRA, Inc.		288		8,436
Teradata Corp.*		260		8,091
Dun & Bradstreet Corp.		73		7,880
Total Technology				5,674,365
Communications - 5.1%
Amazon.com, Inc.*		786		696,820
Facebook, Inc. — Class A*		4,673		663,800
AT&T, Inc.		12,186		506,329
Alphabet, Inc. — Class A*		590		500,202
Alphabet, Inc. — Class C*		586		486,122
Verizon Communications, Inc.		8,088		394,290
Comcast Corp. — Class A		9,391		353,007
Cisco Systems, Inc.		9,936		335,836
Walt Disney Co.		2,886		327,244
Priceline Group, Inc.*		98		174,437
Time Warner, Inc.		1,536		150,083
Charter Communications, Inc. — Class A*		427		139,766
Netflix, Inc.*		854		126,230
Yahoo!, Inc.*		1,742		80,846
Twenty-First Century Fox, Inc. — Class A		2,088		67,630
eBay, Inc.*		2,006		67,341
CBS Corp. — Class B		738		51,188
Omnicom Group, Inc.		465		40,088
Symantec Corp.		1,228		37,675
Level 3 Communications, Inc.*		580		33,188
Viacom, Inc. — Class B		689		32,121
Twenty-First Century Fox, Inc. — Class B		966		30,699
Expedia, Inc.		239		30,155
DISH Network Corp. — Class A*		450		28,571
Motorola Solutions, Inc.		327		28,194
CenturyLink, Inc.1		1,085		25,573
Juniper Networks, Inc.		758		21,095
Interpublic Group of Cos., Inc.		779		19,140
F5 Networks, Inc.*		129		18,392
VeriSign, Inc.*		177		15,418
Scripps Networks Interactive, Inc. — Class A		190		14,890
Discovery Communications, Inc. — Class C*		428		12,117
TEGNA, Inc.		426		10,914
News Corp. — Class A		757		9,841
TripAdvisor, Inc.*		224		9,668
Discovery Communications, Inc. — Class A*		303		8,814
News Corp. — Class B		238		3,213
Total Communications				5,550,937
Industrial - 3.6%
General Electric Co.		17,312		515,898
3M Co.		1,183		226,343
Boeing Co.		1,130		199,851
Honeywell International, Inc.		1,510		188,553
Union Pacific Corp.		1,615		171,061
United Technologies Corp.		1,487		166,856
United Parcel Service, Inc. — Class B		1,368		146,786
Lockheed Martin Corp.		495		132,462
Caterpillar, Inc.		1,164		107,973
General Dynamics Corp.		565		105,768
FedEx Corp.		486		94,843
Raytheon Co.		581		88,603
CSX Corp.		1,838		85,559
Northrop Grumman Corp.		346		82,293
Illinois Tool Works, Inc.		619		81,999
Johnson Controls International plc		1,863		78,470
Emerson Electric Co.		1,280		76,621
Eaton Corp. plc		892		66,142
Norfolk Southern Corp.		577		64,607
Deere & Co.		581		63,248
Waste Management, Inc.		803		58,555
TE Connectivity Ltd.		705		52,558
Corning, Inc.		1,842		49,734
Cummins, Inc.		307		46,418
Amphenol Corp. — Class A		610		43,414
Parker-Hannifin Corp.		264		42,324
Ingersoll-Rand plc		515		41,880
Roper Technologies, Inc.		202		41,711
Stanley Black & Decker, Inc.		303		40,260
Rockwell Automation, Inc.		255		39,706
Fortive Corp.		597		35,951
Agilent Technologies, Inc.		639		33,784
Vulcan Materials Co.		263		31,686
Republic Services, Inc. — Class A		458		28,767
Harris Corp.		247		27,484

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NOVA FUND

	Shares		Value
Martin Marietta Materials, Inc.		125	$	27,281
WestRock Co.		497		25,859
Ball Corp.		347		25,768
Textron, Inc.		536		25,508
L3 Technologies, Inc.		154		25,455
Rockwell Collins, Inc.		260		25,262
Waters Corp.*		159		24,854
Dover Corp.		309		24,828
AMETEK, Inc.		455		24,606
Mettler-Toledo International, Inc.*		51		24,424
Arconic, Inc.		874		23,021
TransDigm Group, Inc.		99		21,796
CH Robinson Worldwide, Inc.		280		21,641
Masco Corp.		636		21,618
Pentair plc		332		20,843
Expeditors International of Washington, Inc.		357		20,167
Snap-on, Inc.		115		19,397
Fortune Brands Home & Security, Inc.		304		18,498
Kansas City Southern		212		18,181
Xylem, Inc.		356		17,878
Acuity Brands, Inc.		87		17,748
Sealed Air Corp.		384		16,735
J.B. Hunt Transport Services, Inc.		172		15,779
Fluor Corp.		277		14,576
Allegion plc		189		14,307
Stericycle, Inc.*		169		14,008
Jacobs Engineering Group, Inc.		240		13,267
PerkinElmer, Inc.		218		12,657
Flowserve Corp.		259		12,541
Garmin Ltd.		228		11,653
FLIR Systems, Inc.		271		9,832
Ryder System, Inc.		106		7,997
Total Industrial				3,976,153
Consumer, Cyclical - 3.3%
Home Depot, Inc.		2,417		354,887
Wal-Mart Stores, Inc.		2,988		215,375
McDonald’s Corp.		1,625		210,616
Starbucks Corp.		2,892		168,864
CVS Health Corp.		2,035		159,747
NIKE, Inc. — Class B		2,629		146,514
Costco Wholesale Corp.		871		146,058
Lowe’s Cos., Inc.		1,718		141,237
Walgreens Boots Alliance, Inc.		1,692		140,521
TJX Cos., Inc.		1,293		102,251
General Motors Co.		2,705		95,649
Ford Motor Co.		7,745		90,152
Delta Air Lines, Inc.		1,450		66,641
Southwest Airlines Co.		1,221		65,641
Target Corp.		1,104		60,930
Marriott International, Inc. — Class A		624		58,769
Ross Stores, Inc.		782		51,510
O’Reilly Automotive, Inc.*		182		49,110
Carnival Corp.		829		48,836
PACCAR, Inc.		696		46,771
Newell Brands, Inc.		957		45,142
Delphi Automotive plc		535		43,062
Yum! Brands, Inc.		667		42,621
American Airlines Group, Inc.		1,000		42,300
AutoZone, Inc.*		56		40,491
United Continental Holdings, Inc.*		568		40,124
Dollar Tree, Inc.*		468		36,719
VF Corp.		657		36,115
Dollar General Corp.		504		35,144
Ulta Beauty, Inc.*		116		33,087
Royal Caribbean Cruises Ltd.		332		32,573
Fastenal Co.		574		29,561
Mohawk Industries, Inc.*		125		28,686
Genuine Parts Co.		294		27,169
Best Buy Co., Inc.		537		26,394
Chipotle Mexican Grill, Inc. — Class A*		57		25,395
Whirlpool Corp.		148		25,357
WW Grainger, Inc.		107		24,905
Coach, Inc.		557		23,021
Alaska Air Group, Inc.		245		22,594
L Brands, Inc.		477		22,467
DR Horton, Inc.		674		22,451
Hasbro, Inc.		222		22,160
CarMax, Inc.*		371		21,971
Advance Auto Parts, Inc.		146		21,646
Harley-Davidson, Inc.		350		21,175
Lennar Corp. — Class A		403		20,630
Darden Restaurants, Inc.		246		20,583
Tiffany & Co.1		212		20,204
Foot Locker, Inc.		263		19,675
Wynn Resorts Ltd.		158		18,108
Goodyear Tire & Rubber Co.		499		17,964
LKQ Corp.*		611		17,884
Macy’s, Inc.		603		17,872
Tractor Supply Co.		259		17,863
Wyndham Worldwide Corp.		208		17,532
Mattel, Inc.		679		17,389
BorgWarner, Inc.		397		16,591
PVH Corp.		157		16,245
Hanesbrands, Inc.		751		15,591
Kohl’s Corp.		350		13,934
PulteGroup, Inc.		568		13,376
Leggett & Platt, Inc.		265		13,335
Michael Kors Holdings Ltd.*		322		12,271
Bed Bath & Beyond, Inc.		298		11,759
Staples, Inc.		1,291		11,322
Gap, Inc.		435		10,566
Nordstrom, Inc.1		226		10,525
Signet Jewelers Ltd.		138		9,559
Ralph Lauren Corp. — Class A		112		9,141
Under Armour, Inc. — Class A*,1		365		7,220
Under Armour, Inc. — Class C*		366		6,698
AutoNation, Inc.*		130		5,498
Total Consumer, Cyclical				3,601,744
Energy - 2.4%
Exxon Mobil Corp.		8,227		674,697
Chevron Corp.		3,756		403,282

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NOVA FUND

	Shares		Value
Schlumberger Ltd.		2,766	$	216,024
ConocoPhillips		2,452		122,281
EOG Resources, Inc.		1,145		111,694
Occidental Petroleum Corp.		1,516		96,054
Halliburton Co.		1,720		84,641
Kinder Morgan, Inc.		3,809		82,808
Phillips 66		875		69,317
Anadarko Petroleum Corp.		1,109		68,758
Pioneer Natural Resources Co.		337		62,760
Valero Energy Corp.		895		59,330
Marathon Petroleum Corp.		1,047		52,915
Baker Hughes, Inc.		844		50,488
Williams Companies, Inc.		1,639		48,498
Devon Energy Corp.		1,041		43,431
Apache Corp.		753		38,697
Concho Resources, Inc.*		294		37,732
National Oilwell Varco, Inc.		751		30,108
TechnipFMC plc*		926		30,095
Noble Energy, Inc.1		864		29,670
Marathon Oil Corp.		1,681		26,560
Hess Corp.		534		25,744
ONEOK, Inc.		418		23,174
Cimarex Energy Co.		189		22,584
Cabot Oil & Gas Corp. — Class A		943		22,547
Equities Corp.		344		21,018
Tesoro Corp.		232		18,806
Newfield Exploration Co.*		395		14,579
Helmerich & Payne, Inc.1		215		14,313
Range Resources Corp.		373		10,854
Transocean Ltd.*,1		772		9,611
Murphy Oil Corp.		322		9,206
Chesapeake Energy Corp.*,1		1,511		8,975
Southwestern Energy Co.*		988		8,072
Total Energy				2,649,323
Utilities - 1.2%
NextEra Energy, Inc.		928		119,127
Duke Energy Corp.		1,388		113,830
Southern Co.		1,966		97,867
Dominion Resources, Inc.		1,246		96,653
PG&E Corp.		1,006		66,758
Exelon Corp.		1,839		66,167
American Electric Power Company, Inc.		976		65,519
Sempra Energy		497		54,919
Edison International		646		51,428
PPL Corp.		1,349		50,439
Consolidated Edison, Inc.		605		46,984
Xcel Energy, Inc.		1,006		44,717
Public Service Enterprise Group, Inc.		1,004		44,527
WEC Energy Group, Inc.		626		37,954
Eversource Energy		629		36,973
DTE Energy Co.		356		36,351
FirstEnergy Corp.		878		27,938
American Water Works Co., Inc.		354		27,531
Entergy Corp.		356		27,042
Ameren Corp.		481		26,258
CMS Energy Corp.		555		24,831
CenterPoint Energy, Inc.		855		23,572
SCANA Corp.		284		18,559
Pinnacle West Capital Corp.		221		18,427
Alliant Energy Corp.		452		17,904
NiSource, Inc.		642		15,273
AES Corp.		1,308		14,623
NRG Energy, Inc.		627		11,725
Total Utilities				1,283,896
Basic Materials - 0.9%
Dow Chemical Co.		2,215		140,741
EI du Pont de Nemours & Co.		1,715		137,766
Monsanto Co.		870		98,484
Praxair, Inc.		566		67,128
LyondellBasell Industries N.V. — Class A		655		59,729
Air Products & Chemicals, Inc.		432		58,445
PPG Industries, Inc.		510		53,591
Sherwin-Williams Co.		161		49,941
International Paper Co.		816		41,436
Nucor Corp.		633		37,803
Freeport-McMoRan, Inc.*		2,638		35,244
Newmont Mining Corp.		1,055		34,773
Albemarle Corp.		223		23,558
Eastman Chemical Co.		291		23,513
International Flavors & Fragrances, Inc.		157		20,807
Mosaic Co.		695		20,280
FMC Corp.		265		18,441
CF Industries Holdings, Inc.		463		13,589
Total Basic Materials				935,269
Diversified - 0.0%**
Leucadia National Corp.		643		16,718
Total Common Stocks
(Cost $38,580,155)				40,231,159
MUTUAL FUNDS† - 22.4%
Guggenheim Strategy Fund I2		497,947		12,473,562
Guggenheim Strategy Fund II2		482,440		12,060,988
Total Mutual Funds
(Cost $24,368,825)				24,534,550

	Face Amount
FEDERAL AGENCY NOTES†† - 24.0%
Federal Home Loan Bank3
1.00% due 06/09/17	$	11,215,000	11,218,185
0.63% due 05/30/17		9,100,000	9,097,379
Freddie Mac4
1.13% due 01/26/223,5		5,000,000	4,999,865
Fannie Mae4
0.75% due 05/17/193,5		1,000,000	999,716
Total Federal Agency Notes
(Cost $26,324,889)			26,315,145

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NOVA FUND

	Face Amount		Value
FEDERAL AGENCY DISCOUNT NOTES†† - 4.6%
Federal Home Loan Bank3
0.55% due 05/05/17	$	3,000,000	$	2,998,053
Fannie Mae4
0.51% due 04/03/17		2,000,000		1,999,943
Total Federal Agency Discount Notes
(Cost $4,998,399)				4,997,996
U.S. TREASURY BILLS†† - 2.7%
U.S. Treasury Bill
0.52% due 06/01/176,7,10		2,000,000		1,997,698
0.52% due 05/11/176,7,8		1,000,000		999,241
Total U.S. Treasury Bills
(Cost $2,997,637)				2,996,939
REPURCHASE AGREEMENTS††,9 - 4.1%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		1,843,793		1,843,793
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/1710		1,242,957		1,242,957
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,187,841		1,187,841
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		182,079		182,079
Total Repurchase Agreements
(Cost $4,456,670)				4,456,670

	Shares
SECURITIES LENDING COLLATERAL†,11 - 0.1%
First American Government Obligations Fund — Class Z, 0.61%12		104,739		104,739
Total Securities Lending Collateral
(Cost $104,739)				104,739
Total Investments - 94.7%
(Cost $101,831,314)			$	103,637,198
Other Assets & Liabilities, net - 5.3%				5,813,350
Total Net Assets - 100.0%			$	109,450,548

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $23,933,700)		203	$	132,837

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 S&P 500 Index Swap 1.23%13, Terminating 04/28/17 (Notional Value $13,453,281)		5,694	$	118,036
Goldman Sachs International April 2017 S&P 500 Index Swap 1.46%13, Terminating 04/27/17 (Notional Value $6,411,729)		2,714		58,066
Barclays Bank plc April 2017 S&P 500 Index Swap 1.31%13, Terminating 04/28/17 (Notional Value $80,245,539)		33,963		(189,668	)
(Total Notional Value $100,110,549)			$	(13,566	)

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 19

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
NOVA FUND

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Affiliated issuer — See Note 10.
3	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
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	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
6	Rate indicated is the effective yield at the time of purchase.
7	Zero coupon rate security.
8	All or a portion of this security is pledged as futures collateral at March 31, 2017.
9	Repurchase Agreements — See Note 5.
10	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
11	Securities lending collateral — See Note 6.
12	Rate indicated is the 7 day yield as of March 31, 2017.
13	Total Return based on S&P 500 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	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, 2017 (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	$	40,231,159	$	—	$	—	$	—	$	—	$	40,231,159
Equity Futures Contracts		—		132,837		—		—		—		132,837
Equity Index Swap Agreements		—		—		—		176,102		—		176,102
Federal Agency Discount Notes		—		—		4,997,996		—		—		4,997,996
Federal Agency Notes		—		—		26,315,145		—		—		26,315,145
Mutual Funds		24,534,550		—		—		—		—		24,534,550
Repurchase Agreements		—		—		4,456,670		—		—		4,456,670
Securities Lending Collateral		104,739		—		—		—		—		104,739
U.S. Treasury Bills		—		—		2,996,939		—		—		2,996,939
Total	$	64,870,448	$	132,837	$	38,766,750	$	176,102	$	—	$	103,946,137

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	189,668	$	—	$	189,668

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, 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, 2017

Assets:
Investments in unaffiliated issuers, at value - including $102,644 of securities loaned (cost $73,005,819)	$	74,645,978
Investments in affiliated issuers, at value (cost $24,368,825)		24,534,550
Repurchase agreements, at value (cost $4,456,670)		4,456,670
Total investments (cost $101,831,314)		103,637,198
Segregated cash with broker		5,087,854
Unrealized appreciation on swap agreements		176,102
Receivables:
Swap settlement		367,113
Fund shares sold		2,003,227
Dividends		133,939
Interest		67,043
Securities lending income		42
Total assets		111,472,518
Liabilities:
Unrealized depreciation on swap agreements		189,668
Payable for:
Fund shares redeemed		1,254,244
Management fees		173,314
Return of securities loaned		104,739
Variation margin		66,990
Transfer agent and administrative fees		57,771
Portfolio accounting fees		21,724
Distribution and service fees		17,880
Miscellaneous		135,640
Total liabilities		2,021,970
Commitments and contingent liabilities (Note 14)		—
Net assets	$	109,450,548
Net assets consist of:
Paid in capital	$	101,209, 586
Undistributed net investment income		141,851
Accumulated net realized gain on investments		6,173,956
Net unrealized appreciation on investments		1,925,155
Net assets	$	109,450,548
Investor Class:
Net assets	$	78,530,738
Capital shares outstanding		1,305,792
Net asset value per share	$	60.14
A-Class:
Net assets	$	3,528,194
Capital shares outstanding		62,800
Net asset value per share	$	56.18
Maximum offering price per share(Net asset value divided by 95.25%)	$	58.98
C-Class:
Net assets	$	9,675,540
Capital shares outstanding		191,333
Net asset value per share	$	50.57
H-Class:
Net assets	$	17,716,076
Capital shares outstanding		315,517
Net asset value per share	$	56.15

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

NOVA FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $50)	$	2,279,078
Interest		315,211
Dividends from securities of affiliated issuers		417,666
Income from securities lending, net		745
Total investment income		3,012,700
Expenses:
Management fees		1,584,215
Transfer agent and administrative fees		528,072
Distribution and service fees:
A-Class		25,693
C-Class		96,194
H-Class		47,681
Portfolio accounting fees		207,932
Custodian fees		30,805
Trustees’ fees*		19,387
Line of credit fees		1,148
Miscellaneous		329,722
Total expenses		2,870,849
Net investment income		141,851
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	33,976,169
Investments in affiliated issuers		54,712
Swap agreements		29,520,672
Futures contracts		5,411,114
Net realized gain		68,962,667
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		(20,228,940	)
Investments in affiliated issuers		164,824
Swap agreements		(625,316	)
Futures contracts		(31,227	)
Net change in unrealized appreciation(depreciation)		(20,720,659	)
Net realized and unrealized gain		48,242,008
Net increase in net assets resulting from operations	$	48,383,859

* 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	141,851		$	36,022
Net realized gain on investments		68,962,667			8,569,413
Net change in unrealized appreciation (depreciation) on investments		(20,720,659	)		(9,602,834	)
Net increase (decrease) in net assets resulting from operations		48,383,859			(997,399	)
Distributions to shareholders from:
Net investment income
Investor Class		(28,278	)		(220,226	)
Advisor Class		—			—	*
A-Class		(2,002	)		(16,296	)
C-Class	��	(4,396	)		(17,646	)
H-Class		(1,346	)		(6,865	)*
Net realized gains
Investor Class		(899,670	)		—
Advisor Class		—			—	*
A-Class		(63,689	)		—
C-Class		(139,858	)		—
H-Class		(42,826	)		—	*
Total distributions to shareholders		(1,182,065	)		(261,033	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		3,038,362,973			1,146,890,963
Advisor Class		—			42,136,814	*
A-Class		195,568,022			97,617,577
C-Class		2,393,360			5,328,959
H-Class		578,220,052			338,809,074	*
Distributions reinvested
Investor Class		871,266			211,470
Advisor Class		—			—	*
A-Class		64,676			16,174
C-Class		143,560			17,443
H-Class		44,161			6,864	*
Cost of shares redeemed
Investor Class		(3,164,196,094	)		(1,116,506,927	)
Advisor Class		—			(40,531,593	)*
A-Class		(207,737,340	)		(88,372,143	)
C-Class		(5,741,761	)		(6,024,829	)
H-Class		(579,218,274	)		(333,139,118	)*
Conversion activity*
Advisor Class		—			(4,895,263	)
H-Class		—			4,895,263
Net increase (decrease) from capital share transactions		(141,225,399	)		46,460,728
Net increase (decrease) in net assets		(94,023,605	)		45,202,296
Net assets:
Beginning of year		203,474,153			158,271,857
End of year	$	109,450,548		$	203,474,153
Undistributed net investment income at end of year	$	141,851		$	36,022

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

NOVA FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:
Shares sold
Investor Class		55,401,102			24,114,641
Advisor Class		—			945,322	*
A-Class		3,848,301			2,237,941
C-Class		52,915			129,164
H-Class		11,361,682			7,584,301	*
Shares issued from reinvestment of distributions
Investor Class		16,298			4,228
Advisor Class		—			—	*
A-Class		1,294			345
C-Class		3,182			408
H-Class		884			146	*
Shares redeemed
Investor Class		(57,463,068	)		(23,535,529	)
Advisor Class		—			(909,434	)*
A-Class		(4,082,490	)		(2,027,298	)
C-Class		(129,677	)		(146,842	)
H-Class		(11,349,648	)		(7,436,202	)*
Conversion Activity*
Advisor Class		—			(121,453	)
H-Class		—			117,885
Net increase (decrease) in shares		(2,339,225	)		957,623

* Effective September 30, 2015, all outstanding Advisor Class 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	49.18		$	49.42		$	42.15		$	32.05		$	26.82
Income (loss) from investment operations:
Net investment income (loss)a		.08			.07			.14			.14			.05
Net gain (loss) on investments (realized and unrealized)		11.56			(.25	)		7.18			9.96			5.21
Total from investment operations		11.64			(.18	)		7.32			10.10			5.26
Less distributions from:
Net investment income		(.02	)		(.06	)		(.05	)		—			(.03	)
Net realized gains		(.66	)		—			—			—			—
Total distributions		(.68	)		(.06	)		(.05	)		—			(.03	)
Net asset value, end of period	$	60.14		$	49.18		$	49.42		$	42.15		$	32.05
Total Returnb		23.84	%		(0.36	%)		17.36	%		31.51	%		19.62	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	78,531		$	164,820		$	136,800		$	103,254		$	52,785
Ratios to average net assets:
Net investment income (loss)		0.15	%		0.14	%		0.31	%		0.37	%		0.20	%
Total expensesc		1.28	%		1.25	%		1.27	%		1.28	%		1.26	%
Portfolio turnover rate		1,288	%		619	%		403	%		259	%		137	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	46.08		$	46.40		$	39.67		$	30.23		$	25.38
Income (loss) from investment operations:
Net investment income (loss)a		(.02	)		(.05	)		.02			.05			(.01	)
Net gain (loss) on investments (realized and unrealized)		10.80			(.21	)		6.76			9.39			4.89
Total from investment operations		10.78			(.26	)		6.78			9.44			4.88
Less distributions from:
Net investment income		(.02	)		(.06	)		(.05	)		—			(.03	)
Net realized gains		(.66	)		—			—			—			—
Total distributions		(.68	)		(.06	)		(.05	)		—			(.03	)
Net asset value, end of period	$	56.18		$	46.08		$	46.40		$	39.67		$	30.23
Total Returnb		23.57	%		(0.56	%)		17.09	%		31.23	%		19.28	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,528		$	13,626		$	3,930		$	1,237		$	1,189
Ratios to average net assets:
Net investment income (loss)		(0.05	%)		(0.11	%)		0.05	%		0.14	%		(0.04	%)
Total expensesc		1.53	%		1.51	%		1.52	%		1.53	%		1.50	%
Portfolio turnover rate		1,288	%		619	%		403	%		259	%		137	%

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	41.86		$	42.50		$	36.62		$	28.11		$	23.77
Income (loss) from investment operations:
Net investment income (loss)a		(.40	)		(.34	)		(.28	)		(.20	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		9.79			(.24	)		6.21			8.71			4.56
Total from investment operations		9.39			(.58	)		5.93			8.51			4.37
Less distributions from:
Net investment income		(.02	)		(.06	)		(.05	)		—			(.03	)
Net realized gains		(.66	)		—			—			—			—
Total distributions		(.68	)		(.06	)		(.05	)		—			(.03	)
Net asset value, end of period	$	50.57		$	41.86		$	42.50		$	36.62		$	28.11
Total Returnb		22.60	%		(1.36	%)		16.19	%		30.27	%		18.39	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,676		$	11,090		$	11,993		$	10,394		$	8,705
Ratios to average net assets:
Net investment income (loss)		(0.89	%)		(0.83	%)		(0.70	%)		(0.62	%)		(0.79	%)
Total expensesc		2.27	%		2.26	%		2.27	%		2.28	%		2.25	%
Portfolio turnover rate		1,288	%		619	%		403	%		259	%		137	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Period Ended March 28, 2015d
Per Share Data
Net asset value, beginning of period	$	46.06		$	46.40		$	44.40
Income (loss) from investment operations:
Net investment income (loss)a		(.07	)		(.06	)		.02
Net gain (loss) on investments (realized and unrealized)		10.84			(.22	)		2.03
Total from investment operations		10.77			(.28	)		2.05
Less distributions from:
Net investment income		(.02	)		(.06	)		(.05	)
Net realized gains		(.66	)		—			—
Total distributions		(.68	)		(.06	)		(.05	)
Net asset value, end of period	$	56.15		$	46.06		$	46.40
Total Returnb		23.56	%		(0.60	%)		4.61	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	17,716		$	13,938		$	1,692
Ratios to average net assets:
Net investment income (loss)		(0.15	%)		(0.14	%)		0.08	%
Total expensesc		1.52	%		1.51	%		1.51	%
Portfolio turnover rate		1,288	%		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, 2017

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 17.17% for the one-year period ended March 31, 2017, while the S&P 500^® Fund H-Class returned 15.20% 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 Financials. No sector detracted; the Telecommunications Services sector contributed least, followed by the Real Estate sector.

Apple, Inc., Amazon.com, Inc., and JPMorgan Chase & Co. were the holdings contributing the most to the performance of the underlying index for the period. Gilead Sciences, Inc., CVS Health Corp., and Allergan plc 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.	3.4%
Microsoft Corp.	2.3%
Amazon.com, Inc.	1.6%
Exxon Mobil Corp.	1.5%
Johnson & Johnson	1.5%
Facebook, Inc. — Class A	1.5%
Berkshire Hathaway, Inc. — Class B	1.4%
JPMorgan Chase & Co.	1.4%
General Electric Co.	1.2%
Freddie Mac	1.2%
Top Ten Total	17.0%

“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, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	15.17%	11.44%	6.03%
A-Class Shares with sales charge†	9.70%	10.36%	5.51%
C-Class Shares	14.33%	10.60%	5.20%
C-Class Shares with CDSC‡	13.33%	10.60%	5.20%
H-Class Shares	15.20%	11.44%	6.03%
S&P 500 Index	17.17%	13.30%	7.51%

*	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, 2017
S&P 500® FUND

	Shares		Value
COMMON STOCKS† - 91.0%
Consumer, Non-cyclical - 20.7%
Johnson & Johnson		32,740	$	4,077,768
Procter & Gamble Co.		30,847		2,771,603
Pfizer, Inc.		71,817		2,456,860
Philip Morris International, Inc.		18,719		2,113,375
Merck & Company, Inc.		33,129		2,105,017
Coca-Cola Co.		46,625		1,978,766
PepsiCo, Inc.		17,221		1,926,341
UnitedHealth Group, Inc.		11,576		1,898,580
Altria Group, Inc.		23,402		1,671,371
Amgen, Inc.		8,886		1,457,927
Medtronic plc		16,517		1,330,610
AbbVie, Inc.		19,233		1,253,222
Celgene Corp.*		9,387		1,168,024
Bristol-Myers Squibb Co.		20,183		1,097,552
Gilead Sciences, Inc.		15,771		1,071,166
Eli Lilly & Co.		11,716		985,433
Allergan plc		4,044		966,192
Abbott Laboratories		20,851		925,993
Mondelez International, Inc. — Class A		18,421		793,578
Colgate-Palmolive Co.		10,653		779,693
Thermo Fisher Scientific, Inc.		4,711		723,609
Biogen, Inc.*		2,605		712,259
Kraft Heinz Co.		7,196		653,469
Danaher Corp.		7,361		629,586
Reynolds American, Inc.		9,979		628,877
PayPal Holdings, Inc.*		13,551		582,964
Kimberly-Clark Corp.		4,291		564,824
Automatic Data Processing, Inc.		5,417		554,647
Aetna, Inc.		4,244		541,322
Anthem, Inc.		3,190		527,562
Stryker Corp.		3,734		491,581
Express Scripts Holding Co.*		7,309		481,736
Becton Dickinson and Co.		2,568		471,074
Cigna Corp.		3,101		454,265
General Mills, Inc.		6,999		413,011
Boston Scientific Corp.*		16,452		409,161
S&P Global, Inc.		3,118		407,647
Ecolab, Inc.		3,168		397,077
McKesson Corp.		2,559		379,398
Humana, Inc.		1,802		371,464
Regeneron Pharmaceuticals, Inc.*		916		354,959
Intuitive Surgical, Inc.*,1		443		339,546
Constellation Brands, Inc. — Class A		2,084		337,754
Kroger Co.		11,149		328,784
Alexion Pharmaceuticals, Inc.*		2,710		328,560
Vertex Pharmaceuticals, Inc.*		2,998		327,831
Archer-Daniels-Midland Co.		6,891		317,262
Zoetis, Inc.		5,936		316,804
Sysco Corp.		5,997		311,364
Cardinal Health, Inc.		3,806		310,379
HCA Holdings, Inc.*		3,484		310,041
Baxter International, Inc.		5,865		304,159
Illumina, Inc.*		1,765		301,180
Zimmer Biomet Holdings, Inc.		2,426		296,239
Incyte Corp.*		2,125		284,049
Edwards Lifesciences Corp.*		2,564		241,195
Estee Lauder Cos., Inc. — Class A		2,682		227,407
Moody’s Corp.		2,003		224,416
Monster Beverage Corp.*		4,854		224,109
Kellogg Co.		3,051		221,533
Mylan N.V.*		5,556		216,628
Dr Pepper Snapple Group, Inc.		2,209		216,305
CR Bard, Inc.		869		215,981
Tyson Foods, Inc. — Class A		3,462		213,640
Molson Coors Brewing Co. — Class B		2,225		212,955
Clorox Co.		1,547		208,582
Conagra Brands, Inc.		4,989		201,256
Equifax, Inc.		1,446		197,726
Mead Johnson Nutrition Co. — Class A		2,213		197,134
JM Smucker Co.		1,405		184,167
Hershey Co.		1,684		183,977
Laboratory Corp. of America Holdings*		1,234		177,042
AmerisourceBergen Corp. — Class A		1,992		176,292
Dentsply Sirona, Inc.		2,771		173,021
Nielsen Holdings plc		4,055		167,512
IDEXX Laboratories, Inc.*		1,061		164,041
Quest Diagnostics, Inc.		1,659		162,897
Henry Schein, Inc.*		956		162,491
Church & Dwight Company, Inc.		3,072		153,201
Verisk Analytics, Inc. — Class A*		1,867		151,488
Global Payments, Inc.		1,837		148,209
Centene Corp.*		2,075		147,865
Hologic, Inc.*		3,370		143,394
Universal Health Services, Inc. — Class B		1,078		134,157
McCormick & Co., Inc.		1,371		133,741
Campbell Soup Co.		2,334		133,598
Cintas Corp.		1,039		131,475
DaVita, Inc.*		1,878		127,648
United Rentals, Inc.*		1,017		127,176
Western Union Co.		5,803		118,091
Cooper Cos., Inc.		590		117,935
Perrigo Company plc		1,730		114,855
Whole Foods Market, Inc.		3,844		114,244
Hormel Foods Corp.		3,253		112,651
Total System Services, Inc.		1,991		106,439
Coty, Inc. — Class A		5,679		102,960
Varian Medical Systems, Inc.*		1,128		102,795
Brown-Forman Corp. — Class B		2,134		98,548
Avery Dennison Corp.		1,079		86,967
Envision Healthcare Corp.*		1,417		86,890
Robert Half International, Inc.		1,542		75,296
Quanta Services, Inc.*		1,825		67,726
H&R Block, Inc.		2,499		58,102
Mallinckrodt plc*		1,264		56,336
Patterson Companies, Inc.1		992		44,868
Total Consumer, Non-cyclical				55,560,477
Financial - 16.8%
Berkshire Hathaway, Inc. — Class B*		22,917		3,819,806
JPMorgan Chase & Co.		43,100		3,785,903
Wells Fargo & Co.		54,335		3,024,286

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® FUND

	Shares		Value
Bank of America Corp.		120,966	$	2,853,588
Citigroup, Inc.		33,432		1,999,902
Visa, Inc. — Class A		22,419		1,992,376
Mastercard, Inc. — Class A		11,368		1,278,559
Goldman Sachs Group, Inc.		4,470		1,026,849
U.S. Bancorp		19,214		989,521
Chubb Ltd.1		5,620		765,725
Morgan Stanley		17,339		742,803
American Express Co.		9,135		722,671
PNC Financial Services Group, Inc.		5,866		705,327
American International Group, Inc.		11,229		701,026
MetLife, Inc.		13,119		692,945
Simon Property Group, Inc.1		3,859		663,864
American Tower Corp. — Class A		5,154		626,416
Charles Schwab Corp.		14,658		598,193
Bank of New York Mellon Corp.		12,518		591,225
BlackRock, Inc. — Class A		1,467		562,609
Prudential Financial, Inc.		5,188		553,456
Capital One Financial Corp.		5,800		502,628
CME Group, Inc. — Class A		4,098		486,842
Marsh & McLennan Companies, Inc.		6,214		459,152
BB&T Corp.		9,754		436,004
Intercontinental Exchange, Inc.		7,188		430,346
Crown Castle International Corp.		4,350		410,858
Travelers Cos., Inc.		3,375		406,823
Public Storage		1,802		394,476
Aon plc		3,169		376,129
Equinix, Inc.		924		369,942
Allstate Corp.		4,406		359,045
Aflac, Inc.		4,844		350,802
State Street Corp.		4,332		344,871
Prologis, Inc.		6,387		331,358
SunTrust Banks, Inc.		5,929		327,874
Synchrony Financial		9,294		318,784
Discover Financial Services		4,652		318,150
Welltower, Inc.		4,375		309,837
Weyerhaeuser Co.		9,038		307,111
AvalonBay Communities, Inc.1		1,657		304,225
M&T Bank Corp.		1,860		287,798
Ventas, Inc.		4,279		278,306
Equity Residential		4,429		275,572
Progressive Corp.		7,008		274,573
Boston Properties, Inc.1		1,856		245,754
Ameriprise Financial, Inc.		1,859		241,075
KeyCorp		12,940		230,073
Fifth Third Bancorp		9,055		229,997
Northern Trust Corp.		2,595		224,675
Hartford Financial Services Group, Inc.		4,512		216,892
Citizens Financial Group, Inc.		6,143		212,241
Regions Financial Corp.		14,543		211,310
Vornado Realty Trust		2,077		208,344
Digital Realty Trust, Inc.		1,922		204,482
Principal Financial Group, Inc.		3,226		203,593
Willis Towers Watson plc		1,537		201,178
T. Rowe Price Group, Inc.		2,937		200,157
Realty Income Corp.		3,271		194,723
Essex Property Trust, Inc.		791		183,140
Lincoln National Corp.		2,717		177,828
HCP, Inc.		5,649		176,701
Huntington Bancshares, Inc.		13,103		175,449
Franklin Resources, Inc.		4,161		175,345
Alliance Data Systems Corp.		674		167,826
Host Hotels & Resorts, Inc.		8,920		166,447
GGP, Inc.		7,047		163,349
Loews Corp.		3,331		155,791
Invesco Ltd.		4,869		149,137
Comerica, Inc.1		2,122		145,527
Mid-America Apartment Communities, Inc.		1,370		139,384
Cincinnati Financial Corp.		1,809		130,736
Unum Group		2,766		129,698
SL Green Realty Corp.		1,212		129,223
XL Group Ltd.		3,197		127,432
CBRE Group, Inc. — Class A*		3,628		126,218
Arthur J Gallagher & Co.		2,155		121,844
Alexandria Real Estate Equities, Inc.		1,072		118,477
Raymond James Financial, Inc.		1,542		117,593
Regency Centers Corp.		1,762		116,979
UDR, Inc.1		3,225		116,939
Federal Realty Investment Trust		870		116,145
E*TRADE Financial Corp.*		3,314		115,625
Kimco Realty Corp.		5,136		113,454
Extra Space Storage, Inc.		1,519		112,998
Affiliated Managers Group, Inc.		684		112,135
Iron Mountain, Inc.		2,959		105,548
Zions Bancorporation		2,442		102,564
Torchmark Corp.		1,321		101,770
Nasdaq, Inc.		1,388		96,397
Macerich Co.		1,459		93,960
CBOE Holdings, Inc.		1,107		89,744
Apartment Investment & Management Co. — Class A		1,894		83,999
People’s United Financial, Inc.		3,823		69,579
Assurant, Inc.		671		64,195
Navient Corp.		3,511		51,822
Total Financial				45,024,048
Technology - 12.8%
Apple, Inc.		63,306		9,094,540
Microsoft Corp.		93,242		6,140,918
Intel Corp.		57,049		2,057,758
International Business Machines Corp.		10,357		1,803,568
Oracle Corp.		36,163		1,613,231
Broadcom Ltd.		4,839		1,059,547
QUALCOMM, Inc.		17,822		1,021,913
Texas Instruments, Inc.		12,062		971,715
Accenture plc — Class A		7,513		900,658
Adobe Systems, Inc.*		5,981		778,307
NVIDIA Corp.		7,107		774,166
salesforce.com, Inc.*		7,902		651,835
Applied Materials, Inc.		13,030		506,868
Hewlett Packard Enterprise Co.		20,088		476,086

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® FUND

	Shares		Value
Cognizant Technology Solutions Corp. — Class A*		7,344	$	437,115
Activision Blizzard, Inc.		8,346		416,132
HP, Inc.		20,433		365,342
Micron Technology, Inc.*		12,508		361,481
Analog Devices, Inc.		4,392		359,924
Intuit, Inc.		2,932		340,083
Electronic Arts, Inc.*		3,718		332,835
Fidelity National Information Services, Inc.		3,966		315,773
Fiserv, Inc.*		2,588		298,422
Western Digital Corp.		3,476		286,874
Lam Research Corp.		1,965		252,227
Paychex, Inc.		3,854		227,001
Skyworks Solutions, Inc.		2,231		218,593
Cerner Corp.*		3,541		208,388
Autodesk, Inc.*		2,363		204,329
Microchip Technology, Inc.		2,611		192,640
Red Hat, Inc.*		2,150		185,975
KLA-Tencor Corp.		1,891		179,777
Xilinx, Inc.		3,003		173,844
Seagate Technology plc		3,562		163,603
Citrix Systems, Inc.*		1,886		157,274
NetApp, Inc.		3,269		136,808
Advanced Micro Devices, Inc.*		9,308		135,431
Synopsys, Inc.*		1,815		130,916
Akamai Technologies, Inc.*		2,090		124,773
CA, Inc.		3,783		119,997
Qorvo, Inc.*		1,526		104,623
Xerox Corp.		10,304		75,631
CSRA, Inc.		1,751		51,287
Teradata Corp.*		1,579		49,138
Dun & Bradstreet Corp.		444		47,925
Total Technology				34,505,271
Communications - 12.6%
Amazon.com, Inc.*		4,779		4,236,775
Facebook, Inc. — Class A*		28,418		4,036,777
AT&T, Inc.		74,106		3,079,104
Alphabet, Inc. — Class A*		3,585		3,039,363
Alphabet, Inc. — Class C*		3,566		2,958,211
Verizon Communications, Inc.		49,186		2,397,818
Comcast Corp. — Class A		57,106		2,146,614
Cisco Systems, Inc.		60,426		2,042,400
Walt Disney Co.		17,553		1,990,334
Priceline Group, Inc.*,1		593		1,055,522
Time Warner, Inc.		9,343		912,905
Charter Communications, Inc. — Class A*		2,596		849,722
Netflix, Inc.*		5,193		767,577
Yahoo!, Inc.*		10,592		491,575
Twenty-First Century Fox, Inc. — Class A		12,698		411,288
eBay, Inc.*		12,198		409,487
CBS Corp. — Class B		4,488		311,287
Omnicom Group, Inc.		2,830		243,974
Symantec Corp.		7,467		229,088
Level 3 Communications, Inc.*		3,525		201,701
Viacom, Inc. — Class B		4,193		195,478
Twenty-First Century Fox, Inc. — Class B		5,877		186,771
Expedia, Inc.		1,455		183,577
DISH Network Corp. — Class A*		2,738		173,836
Motorola Solutions, Inc.		1,988		171,405
CenturyLink, Inc.1		6,595		155,444
Juniper Networks, Inc.		4,609		128,268
Interpublic Group of Cos., Inc.		4,738		116,413
F5 Networks, Inc.*		781		111,347
VeriSign, Inc.*		1,074		93,556
Scripps Networks Interactive, Inc. — Class A		1,153		90,361
Discovery Communications, Inc. — Class C*		2,603		73,691
TEGNA, Inc.		2,591		66,381
News Corp. — Class A		4,606		59,878
TripAdvisor, Inc.*		1,362		58,784
Discovery Communications, Inc. — Class A*		1,841		53,555
News Corp. — Class B		1,445		19,508
Total Communications				33,749,775
Industrial - 9.0%
General Electric Co.		105,276		3,137,225
3M Co.		7,194		1,376,428
Boeing Co.		6,873		1,215,558
Honeywell International, Inc.		9,185		1,146,931
Union Pacific Corp.		9,819		1,040,029
United Technologies Corp.		9,043		1,014,715
United Parcel Service, Inc. — Class B		8,316		892,306
Lockheed Martin Corp.		3,012		806,011
Caterpillar, Inc.		7,077		656,463
General Dynamics Corp.		3,434		642,845
FedEx Corp.		2,958		577,254
Raytheon Co.		3,534		538,935
CSX Corp.		11,179		520,382
Northrop Grumman Corp.		2,107		501,129
Illinois Tool Works, Inc.1		3,763		498,484
Johnson Controls International plc		11,327		477,093
Emerson Electric Co.		7,784		465,950
Eaton Corp. plc		5,426		402,337
Norfolk Southern Corp.		3,505		392,455
Deere & Co.1		3,536		384,929
Waste Management, Inc.		4,881		355,923
TE Connectivity Ltd.		4,286		319,521
Corning, Inc.		11,199		302,373
Cummins, Inc.		1,867		282,290
Amphenol Corp. — Class A		3,711		264,112
Parker-Hannifin Corp.1		1,608		257,795
Ingersoll-Rand plc		3,131		254,613
Roper Technologies, Inc.		1,229		253,776
Stanley Black & Decker, Inc.		1,841		244,614
Rockwell Automation, Inc.		1,552		241,662
Fortive Corp.		3,632		218,718
Agilent Technologies, Inc.		3,886		205,453
Vulcan Materials Co.		1,597		192,407
Republic Services, Inc. — Class A		2,782		174,737
Harris Corp.		1,502		167,128

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® FUND

	Shares		Value
Martin Marietta Materials, Inc.		761	$	166,088
WestRock Co.		3,021		157,182
Ball Corp.		2,112		156,837
L3 Technologies, Inc.		939		155,207
Textron, Inc.		3,259		155,096
Rockwell Collins, Inc.		1,579		153,416
Waters Corp.*		966		150,995
Dover Corp.		1,876		150,737
Mettler-Toledo International, Inc.*,1		313		149,899
AMETEK, Inc.		2,769		149,748
Arconic, Inc.		5,316		140,023
TransDigm Group, Inc.		599		131,876
CH Robinson Worldwide, Inc.1		1,706		131,857
Masco Corp.		3,865		131,371
Pentair plc		2,017		126,627
Expeditors International of Washington, Inc.		2,173		122,753
Snap-on, Inc.		699		117,900
Fortune Brands Home & Security, Inc.		1,847		112,390
Kansas City Southern		1,287		110,373
Xylem, Inc.		2,166		108,777
Acuity Brands, Inc.		532		108,528
Sealed Air Corp.		2,334		101,716
J.B. Hunt Transport Services, Inc.		1,047		96,052
Fluor Corp.		1,681		88,454
Allegion plc		1,151		87,131
Stericycle, Inc.*		1,027		85,128
Jacobs Engineering Group, Inc.		1,461		80,764
PerkinElmer, Inc.		1,325		76,930
Flowserve Corp.		1,575		76,262
Garmin Ltd.		1,388		70,941
FLIR Systems, Inc.		1,645		59,681
Ryder System, Inc.		645		48,659
Total Industrial				24,181,979
Consumer, Cyclical - 8.1%
Home Depot, Inc.		14,699		2,158,255
Wal-Mart Stores, Inc.		18,170		1,309,695
McDonald’s Corp.		9,882		1,280,806
Starbucks Corp.		17,585		1,026,788
CVS Health Corp.		12,376		971,516
NIKE, Inc. — Class B		15,991		891,178
Costco Wholesale Corp.		5,296		888,086
Lowe’s Cos., Inc.		10,449		859,012
Walgreens Boots Alliance, Inc.		10,289		854,501
TJX Cos., Inc.		7,866		622,042
General Motors Co.		16,448		581,601
Ford Motor Co.		47,100		548,244
Delta Air Lines, Inc.		8,818		405,275
Southwest Airlines Co.		7,424		399,114
Target Corp.		6,711		370,380
Marriott International, Inc. — Class A		3,795		357,414
Ross Stores, Inc.		4,755		313,212
O’Reilly Automotive, Inc.*		1,105		298,174
Carnival Corp.		5,043		297,083
PACCAR, Inc.		4,234		284,525
Newell Brands, Inc.		5,821		274,577
Delphi Automotive plc		3,253		261,834
Yum! Brands, Inc.		4,055		259,115
American Airlines Group, Inc.		6,083		257,311
AutoZone, Inc.*		343		248,006
United Continental Holdings, Inc.*		3,455		244,061
Dollar Tree, Inc.*		2,848		223,454
VF Corp.		3,997		219,716
Dollar General Corp.		3,067		213,862
Ulta Beauty, Inc.*		705		201,086
Royal Caribbean Cruises Ltd.		2,022		198,378
Fastenal Co.		3,490		179,735
Mohawk Industries, Inc.*		761		174,642
Genuine Parts Co.		1,790		165,414
Best Buy Co., Inc.		3,268		160,622
Chipotle Mexican Grill, Inc. — Class A*		346		154,150
Whirlpool Corp.		899		154,026
WW Grainger, Inc.		653		151,992
Coach, Inc.		3,386		139,943
Alaska Air Group, Inc.		1,489		137,316
DR Horton, Inc.		4,100		136,570
L Brands, Inc.		2,898		136,496
Hasbro, Inc.1		1,350		134,757
CarMax, Inc.*		2,258		133,719
Advance Auto Parts, Inc.		890		131,951
Harley-Davidson, Inc.		2,128		128,744
Lennar Corp. — Class A		2,452		125,518
Darden Restaurants, Inc.		1,498		125,338
Tiffany & Co.1		1,291		123,032
Foot Locker, Inc.		1,597		119,472
Wynn Resorts Ltd.		959		109,911
Goodyear Tire & Rubber Co.		3,037		109,332
LKQ Corp.*		3,716		108,767
Tractor Supply Co.		1,577		108,766
Macy’s, Inc.		3,669		108,750
Wyndham Worldwide Corp.		1,267		106,795
Mattel, Inc.		4,132		105,821
BorgWarner, Inc.		2,412		100,797
PVH Corp.1		955		98,814
Hanesbrands, Inc.1		4,570		94,873
Kohl’s Corp.		2,129		84,755
PulteGroup, Inc.		3,452		81,295
Leggett & Platt, Inc.		1,614		81,216
Michael Kors Holdings Ltd.*		1,960		74,696
Bed Bath & Beyond, Inc.		1,813		71,541
Staples, Inc.		7,850		68,845
Gap, Inc.		2,647		64,296
Nordstrom, Inc.1		1,374		63,987
Signet Jewelers Ltd.		840		58,187
Ralph Lauren Corp. — Class A		678		55,338
Under Armour, Inc. — Class A*,1		2,216		43,832
Under Armour, Inc. — Class C*		2,224		40,699
AutoNation, Inc.*,1		791		33,451
Total Consumer, Cyclical				21,906,502
Energy - 6.0%
Exxon Mobil Corp.		50,033		4,103,207
Chevron Corp.		22,843		2,452,653

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® FUND

	Shares		Value
Schlumberger Ltd.		16,822	$	1,313,798
ConocoPhillips		14,912		743,661
EOG Resources, Inc.		6,960		678,947
Occidental Petroleum Corp.		9,222		584,306
Halliburton Co.		10,460		514,737
Kinder Morgan, Inc.		23,166		503,629
Phillips 66		5,323		421,688
Anadarko Petroleum Corp.		6,745		418,190
Pioneer Natural Resources Co.		2,049		381,585
Valero Energy Corp.		5,442		360,750
Marathon Petroleum Corp.		6,368		321,839
Baker Hughes, Inc.		5,132		306,996
Williams Companies, Inc.		9,965		294,864
Devon Energy Corp.		6,329		264,046
Apache Corp.		4,581		235,418
Concho Resources, Inc.*		1,788		229,472
National Oilwell Varco, Inc.		4,570		183,211
TechnipFMC plc*		5,630		182,975
Noble Energy, Inc.1		5,254		180,422
Marathon Oil Corp.		10,223		161,523
Hess Corp.		3,246		156,490
ONEOK, Inc.		2,542		140,929
Cimarex Energy Co.		1,148		137,175
Cabot Oil & Gas Corp. — Class A		5,733		137,076
Equities Corp.		2,091		127,760
Tesoro Corp.		1,412		114,457
Newfield Exploration Co.*		2,400		88,584
Helmerich & Payne, Inc.1		1,309		87,140
Range Resources Corp.		2,270		66,057
Transocean Ltd.*,1		4,697		58,478
Murphy Oil Corp.		1,955		55,893
Chesapeake Energy Corp.*,1		9,191		54,595
Southwestern Energy Co.*		6,008		49,085
Total Energy				16,111,636
Utilities - 2.9%
NextEra Energy, Inc.		5,642		724,265
Duke Energy Corp.		8,442		692,328
Southern Co.		11,958		595,269
Dominion Resources, Inc.		7,579		587,902
PG&E Corp.		6,116		405,858
Exelon Corp.		11,180		402,256
American Electric Power Company, Inc.		5,933		398,282
Sempra Energy		3,023		334,042
Edison International		3,931		312,947
PPL Corp.		8,202		306,673
Consolidated Edison, Inc.		3,681		285,866
Xcel Energy, Inc.		6,120		272,034
Public Service Enterprise Group, Inc.		6,108		270,890
WEC Energy Group, Inc.		3,808		230,879
Eversource Energy		3,823		224,716
DTE Energy Co.		2,165		221,068
FirstEnergy Corp.		5,339		169,887
American Water Works Co., Inc.		2,150		167,206
Entergy Corp.		2,165		164,453
Ameren Corp.		2,928		159,840
CMS Energy Corp.		3,377		151,087
CenterPoint Energy, Inc.		5,197		143,281
SCANA Corp.		1,724		112,663
Pinnacle West Capital Corp.		1,343		111,979
Alliant Energy Corp.		2,747		108,809
NiSource, Inc.		3,902		92,829
AES Corp.		7,954		88,926
NRG Energy, Inc.		3,813		71,303
Total Utilities				7,807,538
Basic Materials - 2.1%
Dow Chemical Co.		13,469		855,821
EI du Pont de Nemours & Co.		10,432		838,003
Monsanto Co.		5,290		598,827
Praxair, Inc.		3,440		407,984
LyondellBasell Industries N.V. — Class A		3,983		363,210
Air Products & Chemicals, Inc.		2,625		355,136
PPG Industries, Inc.		3,102		325,958
Sherwin-Williams Co.		980		303,986
International Paper Co.		4,962		251,970
Nucor Corp.		3,847		229,743
Freeport-McMoRan, Inc.*		16,045		214,361
Newmont Mining Corp.		6,413		211,372
Albemarle Corp.		1,358		143,459
Eastman Chemical Co.		1,768		142,854
International Flavors & Fragrances, Inc.		953		126,301
Mosaic Co.		4,225		123,286
FMC Corp.		1,613		112,249
CF Industries Holdings, Inc.		2,813		82,562
Total Basic Materials				5,687,082
Diversified - 0.0%**
Leucadia National Corp.		3,907		101,582
Total Common Stocks
(Cost $194,804,954)				244,635,890

	Face Amount
FEDERAL AGENCY DISCOUNT NOTES†† - 5.6%
Fannie Mae2
0.52% due 04/03/173	$	15,000,000	14,999,417
Total Federal Agency Discount Notes
(Cost $14,999,417)			14,999,417
FEDERAL AGENCY NOTES†† - 1.1%
Freddie Mac2
0.75% due 10/26/183		3,105,000	3,100,737
Total Federal Agency Notes
(Cost $3,105,000)			3,100,737

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® FUND

	Face Amount		Value
U.S. TREASURY BILLS†† - 0.2%
U.S. Treasury Bill
0.52% due 05/11/174,5,6,8	$	500,000	$	499,621
Total U.S. Treasury Bills
(Cost $499,708)				499,621
REPURCHASE AGREEMENTS††,7 - 3.2%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		4,040,804		4,040,804
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		2,603,236		2,603,236
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/178		1,431,660		1,431,660
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		399,039		399,039
Total Repurchase Agreements
(Cost $8,474,739)				8,474,739

	Shares
SECURITIES LENDING COLLATERAL†,9 - 1.6%
First American Government Obligations Fund — Class Z, 0.61%10		4,187,038		4,187,038
Total Securities Lending Collateral
(Cost $4,187,038)				4,187,038
Total Investments - 102.7%
(Cost $226,070,856)			$	275,897,442
Other Assets & Liabilities, net - (2.7)%				(7,262,706	)
Total Net Assets - 100.0%			$	268,634,736

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $1,768,500)		15	$	3,736

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 S&P 500 Index Swap 1.23%11, Terminating 04/28/17 (Notional Value $5,888,940)		2,492	$	43,470
Goldman Sachs International April 2017 S&P 500 Index Swap 1.46%11, Terminating 04/27/17 (Notional Value $3,837,565)		1,624		34,754
Barclays Bank plc April 2017 S&P 500 Index Swap 1.31%11, Terminating 04/28/17 (Notional Value $12,436,398)		5,264		(29,695	)
(Total Notional Value $22,162,903)			$	48,529

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm.
3	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
4	All or a portion of this security is pledged as futures collateral at March 31, 2017.
5	Rate indicated is the effective yield at the time of purchase.
6	Zero coupon rate security.
7	Repurchase Agreements — See Note 5.
8	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
9	Securities lending collateral — See Note - 6.
10	Rate indicated is the 7 day yield as of March 31, 2017.
11	Total Return based on S&P 500 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	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, 2017
S&P 500® FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	244,635,890	$	—	$	—	$	—	$	—	$	244,635,890
Equity Futures Contracts		—		3,736		—		—		—		3,736
Equity Index Swap Agreements		—		—		—		78,224		—		78,224
Federal Agency Discount Notes		—		—		14,999,417		—		—		14,999,417
Federal Agency Notes		—		—		3,100,737		—		—		3,100,737
Repurchase Agreements		—		—		8,474,739		—		—		8,474,739
Securities Lending Collateral		4,187,038		—		—		—		—		4,187,038
U.S. Treasury Bills		—		—		499,621		—		—		499,621
Total	$	248,822,928	$	3,736	$	27,074,514	$	78,224	$	—	$	275,979,402

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	29,695	$	—	$	29,695

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, 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, 2017

Assets:
Investments, at value - including $4,096,308 of securities loaned (cost $217,596,117)	$	267,422,703
Repurchase agreements, at value (cost $8,474,739)		8,474,739
Total investments (cost $226,070,856)		275,897,442
Segregated cash with broker		1,640,000
Unrealized appreciation on swap agreements		78,224
Receivables:
Fund shares sold		3,478,541
Dividends		253,533
Interest		4,371
Securities lending income		667
Total assets		281,352,778
Liabilities:
Unrealized depreciation on swap agreements		29,695
Payable for:
Fund shares redeemed		7,881,942
Return of securities loaned		4,187,038
Management fees		171,277
Distribution and service fees		69,439
Transfer agent and administrative fees		57,092
Portfolio accounting fees		34,256
Variation margin		4,950
Swap settlement		359
Miscellaneous		281,994
Total liabilities		12,718,042
Commitments and contingent liabilities (Note 14)		—
Net assets	$	268,634,736
Net assets consist of:
Paid in capital	$	230,737,044
Undistributed net investment income		—
Accumulated net realized gain on investments		(11,981,159	)
Net unrealized appreciation on investments		49,878,851
Net assets	$	268,634,736
A-Class:
Net assets	$	20,960,199
Capital shares outstanding		460,467
Net asset value per share	$	45.52
Maximum offering price per share(Net asset value divided by 95.25%)	$	47.79
C-Class:
Net assets	$	20,930,961
Capital shares outstanding		502,901
Net asset value per share	$	41.62
H-Class:
Net assets	$	226,743,576
Capital shares outstanding		4,982,025
Net asset value per share	$	45.51

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $136)	$	4,327,187
Interest		197,608
Income from securities lending, net		4,102
Total investment income		4,528,897
Expenses:
Management fees		1,954,034
Transfer agent and administrative fees		651,346
Distribution and service fees:
A-Class		71,132
C-Class		175,828
H-Class		536,261
Portfolio accounting fees		390,810
Custodian fees		38,113
Trustees’ fees*		21,207
Miscellaneous		409,123
Total expenses		4,247,854
Net investment income		281,043
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		39,994,847
Swap agreements		3,350,516
Futures contracts		2,535,939
Net realized gain		45,881,302
Net change in unrealized appreciation(depreciation) on:
Investments		(8,930,081	)
Swap agreements		(383,116	)
Futures contracts		(270,593	)
Net change in unrealized appreciation(depreciation)		(9,583,790	)
Net realized and unrealized gain		36,297,512
Net increase in net assets resulting from operations	$	36,578,555

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

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

S&P 500^® FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	281,043		$	(65,779	)
Net realized gain on investments		45,881,302			24,739,527
Net change in unrealized appreciation (depreciation) on investments		(9,583,790	)		(38,842,371	)
Net increase (decrease) in net assets resulting from operations		36,578,555			(14,168,623	)
Distributions to shareholders from:
Net investment income
A-Class		(29,671	)		(6,128	)
C-Class		(28,356	)		(5,127	)
H-Class		(293,993	)		(73,343	)
Net realized gains
A-Class		(174,898	)		(964,527	)
C-Class		(167,151	)		(806,970	)
H-Class		(1,732,984	)		(11,544,030	)
Total distributions to shareholders		(2,427,053	)		(13,400,125	)
Capital share transactions:
Proceeds from sale of shares
A-Class		109,316,182			164,205,961
C-Class		22,735,429			36,973,427
H-Class		1,205,465,115			1,458,575,350
Distributions reinvested
A-Class		193,648			885,581
C-Class		186,917			784,294
H-Class		2,014,895			11,569,754
Cost of shares redeemed
A-Class		(131,672,483	)		(153,213,908	)
C-Class		(20,167,745	)		(41,974,574	)
H-Class		(1,238,468,770	)		(1,468,966,601	)
Net increase (decrease) from capital share transactions		(50,396,812	)		8,839,284
Net decrease in net assets		(16,245,310	)		(18,729,464	)
Net assets:
Beginning of year		284,880,046			303,609,510
End of year	$	268,634,736		$	284,880,046
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold
A-Class		2,539,581			4,121,399
C-Class		592,763			995,592
H-Class		28,720,011			36,101,253
Shares issued from reinvestment of distributions
A-Class		4,549			22,217
C-Class		4,790			21,289
H-Class		47,342			290,260
Shares redeemed
A-Class		(3,082,299	)		(3,821,927	)
C-Class		(521,111	)		(1,134,175	)
H-Class		(29,543,485	)		(36,783,666	)
Net decrease in shares		(1,237,859	)		(187,758	)

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	39.85		$	41.40		$	37.78		$	31.55		$	28.20
Income (loss) from investment operations:
Net investment income (loss)a		.06			.03			.04			.07			.06
Net gain (loss) on investments (realized and unrealized)		5.97			—			4.08			6.20			3.36
Total from investment operations		6.03			.03			4.12			6.27			3.42
Less distributions from:
Net investment income		(.05	)		(.01	)		(.02	)		(.04	)		(.07	)
Net realized gains		(.31	)		(1.57	)		(.48	)		—			—
Total distributions		(.36	)		(1.58	)		(.50	)		(.04	)		(.07	)
Net asset value, end of period	$	45.52		$	39.85		$	41.40		$	37.78		$	31.55
Total Returnb		15.17	%		0.08	%		10.90	%		19.87	%		12.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	20,960		$	39,793		$	28,022		$	28,028		$	12,014
Ratios to average net assets:
Net investment income (loss)		0.14	%		0.02	%		0.11	%		0.19	%		0.22	%
Total expenses		1.57	%		1.55	%		1.59	%		1.57	%		1.50	%
Portfolio turnover rate		133	%		181	%		256	%		157	%		76	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	36.74		$	38.58		$	35.51		$	29.87		$	26.91
Income (loss) from investment operations:
Net investment income (loss)a		(.22	)		(.26	)		(.23	)		(.19	)		(.14	)
Net gain (loss) on investments (realized and unrealized)		5.46			—			3.80			5.87			3.17
Total from investment operations		5.24			(.26	)		3.57			5.68			3.03
Less distributions from:
Net investment income		(.05	)		(.01	)		(.02	)		(.04	)		(.07	)
Net realized gains		(.31	)		(1.57	)		(.48	)		—			—
Total distributions		(.36	)		(1.58	)		(.50	)		(.04	)		(.07	)
Net asset value, end of period	$	41.62		$	36.74		$	38.58		$	35.51		$	29.87
Total Returnb		14.33	%		(0.67	%)		10.04	%		19.01	%		11.29	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	20,931		$	15,667		$	20,977		$	16,182		$	10,231
Ratios to average net assets:
Net investment income (loss)		(0.57	%)		(0.70	%)		(0.62	%)		(0.59	%)		(0.52	%)
Total expenses		2.33	%		2.31	%		2.34	%		2.32	%		2.28	%
Portfolio turnover rate		133	%		181	%		256	%		157	%		76	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	39.84		$	41.40		$	37.78		$	31.55		$	28.20
Income (loss) from investment operations:
Net investment income (loss)a		.07			.03			.05			.05			.07
Net gain (loss) on investments (realized and unrealized)		5.96			(.01	)		4.07			6.22			3.35
Total from investment operations		6.03			.02			4.12			6.27			3.42
Less distributions from:
Net investment income		(.05	)		(.01	)		(.02	)		(.04	)		(.07	)
Net realized gains		(.31	)		(1.57	)		(.48	)		—			—
Total distributions		(.36	)		(1.58	)		(.50	)		(.04	)		(.07	)
Net asset value, end of period	$	45.51		$	39.84		$	41.40		$	37.78		$	31.55
Total Returnb		15.20	%		0.06	%		10.90	%		19.87	%		12.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	226,744		$	229,420		$	254,610		$	255,912		$	265,358
Ratios to average net assets:
Net investment income (loss)		0.16	%		0.07	%		0.12	%		0.15	%		0.24	%
Total expenses		1.58	%		1.55	%		1.58	%		1.56	%		1.50	%
Portfolio turnover rate		133	%		181	%		256	%		157	%		76	%

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 | 39

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 -15.34%, while the S&P 500 Index returned 17.17% over the same period.

Sectors contributing the most to the performance of the underlying index were Information Technology and Financials. No sector detracted; the Telecommunications Services sector contributed least, followed by the Real Estate sector.

Apple, Inc., Amazon.com, Inc., and JPMorgan Chase & Co. were the holdings contributing the most to the performance of the underlying index for the period. Gilead Sciences, Inc., CVS Health Corp., and Allergan plc 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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. 

40 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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.

Cumulative Fund Performance*

Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund II	8.4%
Guggenheim Strategy Fund I	6.9%
Total	15.3%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	-15.34%	-13.78%	-10.53%
A-Class Shares	-15.54%	-14.00%	-10.76%
A-Class Shares with sales charge†	-19.54%	-14.83%	-11.19%
C-Class Shares	-16.20%	-14.65%	-11.44%
C-Class Shares with CDSC‡	-17.04%	-14.65%	-11.44%
S&P 500 Index	17.17%	13.30%	7.51%

	1 Year	Since Inception (09/18/14)
H-Class Shares	-15.47%	-10.39%
S&P 500 Index	17.17%	8.85%

*	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 | 41

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE S&P 500® STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 15.3%
Guggenheim Strategy Fund II1		310,783	$	7,769,577
Guggenheim Strategy Fund I1		252,188		6,317,313
Total Mutual Funds
(Cost $13,966,032)				14,086,890

	Face Amount
FEDERAL AGENCY NOTES†† - 44.2%
Freddie Mac2
0.80% due 10/27/17	$	7,500,000	7,491,600
1.38% due 05/30/18		5,000,000	5,003,615
0.63% due 05/15/184		5,000,000	4,997,660
0.75% due 10/26/184		5,000,000	4,993,135
0.75% due 10/28/194		5,000,000	4,988,560
0.75% due 05/26/17		4,800,000	4,799,424
Total Freddie Mac			32,273,994
Farmer Mac3
5.13% due 04/19/17		8,000,000	8,015,800
Federal Farm Credit Bank3
0.88% due 12/08/174		600,000	600,922
Total Federal Agency Notes
(Cost $40,924,411)			40,890,716
U.S. TREASURY BILLS†† - 11.9%
U.S. Treasury Bill
0.71% due 04/27/175,6		10,000,000	9,995,130
0.52% due 06/01/175,6,8		1,000,000	998,849
Total U.S. Treasury Bills
(Cost $10,993,983)			10,993,979
FEDERAL AGENCY DISCOUNT NOTES†† - 7.6%
Federal Home Loan Bank3
0.75% due 04/10/17		3,100,000	3,099,419
0.54% due 05/05/17		2,000,000	1,998,701
0.75% due 04/07/17		1,200,000	1,199,850
0.75% due 04/05/17		750,000	749,938
Total Federal Home Loan Bank			7,047,908
Total Federal Agency Discount Notes
(Cost $7,048,177)			7,047,908

REPURCHASE AGREEMENTS††,7 - 20.4%
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/178	9,578,347		9,578,347
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	5,302,770		5,302,770
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	3,416,243		3,416,243
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	523,661		523,661
Total Repurchase Agreements
(Cost $18,821,021)			18,821,021
Total Investments - 99.4%
(Cost $91,753,624)		$	91,840,514
Other Assets & Liabilities, net - 0.6%			511,731
Total Net Assets - 100.0%		$	92,352,245

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2017 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $1,296,900)		11	$	5,843

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Barclays Bank plc April 2017 S&P 500 Index Swap 1.16%9, Terminating 04/28/17 (Notional Value $19,983,660)		8,458	$	46,637
BNP Paribas April 2017 S&P 500 Index Swap 0.73%9, Terminating 04/28/17 (Notional Value $24,455,735)		10,351		(217,453	)
Goldman Sachs International April 2017 S&P 500 Index Swap 1.36%9, Terminating 04/27/17 (Notional Value $46,597,254)		19,722		(421,990	)
(Total Notional Value $91,036,649)			$	(592,806	)

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
INVERSE S&P 500® STRATEGY FUND

†	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	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
4	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
5	Zero coupon rate security.
6	Rate indicated is the effective yield at the time of purchase.
7	Repurchase Agreements — See Note 5.
8	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
9	Total Return based on S&P 500 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	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, 2017 (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	$	—	$	5,843	$	—	$	—	$	—	$	5,843
Equity Index Swap Agreements		—		—		—		46,637		—		46,637
Federal Agency Discount Notes		—		—		7,047,908		—		—		7,047,908
Federal Agency Notes		—		—		40,890,716		—		—		40,890,716
Mutual Funds		14,086,890		—		—		—		—		14,086,890
Repurchase Agreements		—		—		18,821,021		—		—		18,821,021
U.S. Treasury Bills		—		—		10,993,979		—		—		10,993,979
Total	$	14,086,890	$	5,843	$	77,753,624	$	46,637	$	—	$	91,892,994

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	639,443	$	—	$	639,443

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

INVERSE S&P 500^® STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $58,966,571)	$	58,932,603
Investments in affiliated issuers, at value (cost $13,966,032)		14,086,890
Repurchase agreements, at value (cost $18,821,021)		18,821,021
Total investments (cost $91,753,624)		91,840,514
Segregated cash with broker		997,330
Unrealized appreciation on swap agreements		46,637
Receivables:
Variation margin		3,630
Fund shares sold		30,879
Dividends		26,263
Interest		281,135
Total assets		93,226,388
Liabilities:
Unrealized depreciation on swap agreements		639,443
Payable for:
Fund shares redeemed		84,301
Management fees		62,301
Transfer agent and administrative fees		17,306
Distribution and service fees		7,062
Portfolio accounting fees		6,922
Swap settlement		1,118
Miscellaneous		55,690
Total liabilities		874,143
Commitments and contingent liabilities (Note 14)		—
Net assets	$	92,352,245
Net assets consist of:
Paid in capital	$	452,155,047
Accumulated net investment loss		(122,695	)
Accumulated net realized loss on investments		(359,180,034	)
Net unrealized depreciation on investments		(500,073	)
Net assets	$	92,352,245
Investor Class:
Net assets	$	76,403,604
Capital shares outstanding		1,085,997
Net asset value per share	$	70.35
A-Class:
Net assets	$	6,331,398
Capital shares outstanding		97,081
Net asset value per share	$	65.22
Maximum offering price per share(Net asset value divided by 95.25%)	$	68.47
C-Class:
Net assets	$	6,760,474
Capital shares outstanding		113,934
Net asset value per share	$	59.34
H-Class:
Net assets	$	2,856,769
Capital shares outstanding		43,803
Net asset value per share	$	65.22

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

INVERSE S&P 500^® STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	523,802
Dividends from securities of affiliated issuers		440,859
Total investment income		964,661
Expenses:
Management fees		1,205,720
Transfer agent and administrative fees		334,922
Distribution and service fees:
A-Class		27,166
C-Class		72,567
H-Class		15,589
Portfolio accounting fees		133,967
Registration fees		108,033
Custodian fees		20,576
Trustees’ fees*		13,715
Line of credit fees		585
Miscellaneous		93,589
Total expenses		2,026,429
Net investment loss		(1,061,768	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	69,468
Investments in affiliated issuers		91,504
Swap agreements		(20,257,180	)
Futures contracts		(1,976,253	)
Net realized loss		(22,072,461	)
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		(5,728	)
Investments in affiliated issuers		239,572
Swap agreements		586,331
Futures contracts		4,505
Net change in unrealized appreciation(depreciation)		824,680
Net realized and unrealized loss		(21,247,781	)
Net decrease in net assets resulting from operations	$	(22,309,549	)

* 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 | 45

INVERSE S&P 500^® STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(1,061,768	)	$	(1,289,467	)
Net realized loss on investments		(22,072,461	)		(16,589,035	)
Net change in unrealized appreciation (depreciation) on investments		824,680			(1,016,491	)
Net decrease in net assets resulting from operations		(22,309,549	)		(18,894,993	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		216,913,681			437,076,905
Advisor Class		—			17,264,802	*
A-Class		40,603,523			56,820,759
C-Class		14,721,850			16,209,864
H-Class		74,772,925			93,034,530	*
Cost of shares redeemed
Investor Class		(276,226,585	)		(328,788,115	)
Advisor Class		—			(8,791,665	)*
A-Class		(41,519,960	)		(51,421,612	)
C-Class		(16,239,943	)		(11,608,019	)
H-Class		(77,726,210	)		(107,318,749	)*
Conversion activity*
Advisor Class		—			(10,823,213	)
H-Class		—			10,823,213
Net increase (decrease) from capital share transactions		(64,700,719	)		112,478,700
Net increase (decrease) in net assets		(87,010,268	)		93,583,707
Net assets:
Beginning of year		179,362,513			85,778,806
End of year	$	92,352,245		$	179,362,513
Accumulated net investment loss at end of year	$	(122,695	)	$	(350,707	)
Capital share activity**:
Shares sold
Investor Class		2,775,050			4,893,922
Advisor Class		—			211,392	*
A-Class		543,016			685,595
C-Class		232,771			217,622
H-Class		1,020,456			1,134,310	*
Shares redeemed
Investor Class		(3,537,019	)		(3,739,882	)
Advisor Class		—			(107,454	)*
A-Class		(565,804	)		(624,084	)
C-Class		(249,423	)		(155,016	)
H-Class		(1,071,490	)		(1,326,748	)*
Conversion activity*
Advisor Class		—			(129,908	)
H-Class		—			126,804
Net increase (decrease) in shares		(852,443	)		1,186,554

*	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.
**	Capital share activity for the periods presented through March 31, 2017 has been restated to reflect a 1:6 reverse share split effective October 28, 2016 — See Note 13.

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

INVERSE S&P 500^® STRATEGY FUND

FINANCIAL HIGHLIGHTS

This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.

Investor Class	Year Ended March 31, 2017e			Year Ended March 31, 2016e			Year Ended March 31, 2015e			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	83.09		$	87.54		$	100.90		$	126.16		$	147.65
Income (loss) from investment operations:
Net investment income (loss)a		(.55	)		(.78	)		(1.02	)		(1.50	)		(1.80	)
Net gain (loss) on investments (realized and unrealized)		(12.19	)		(3.67	)		(12.34	)		(23.76	)		(19.69	)
Total from investment operations		(12.74	)		(4.45	)		(13.36	)		(25.26	)		(21.49	)
Net asset value, end of period	$	70.35		$	83.09		$	87.54		$	100.90		$	126.16
Total Returnb		(15.34	%)		(5.07	%)		(13.26	%)		(20.02	%)		(14.55	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	76,404		$	153,544		$	60,745		$	79,172		$	106,158
Ratios to average net assets:
Net investment income (loss)		(0.70	%)		(0.91	%)		(1.07	%)		(1.35	%)		(1.27	%)
Total expensesc		1.42	%		1.41	%		1.41	%		1.42	%		1.41	%
Portfolio turnover rate		114	%		63	%		103	%		—			—

A-Class	Year Ended March 31, 2017e			Year Ended March 31, 2016e			Year Ended March 31, 2015e			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	77.21		$	81.54		$	94.27		$	118.13		$	138.59
Income (loss) from investment operations:
Net investment income (loss)a		(.70	)		(.96	)		(1.14	)		(1.68	)		(2.04	)
Net gain (loss) on investments (realized and unrealized)		(11.29	)		(3.37	)		(11.59	)		(22.18	)		(18.42	)
Total from investment operations		(11.99	)		(4.33	)		(12.73	)		(23.86	)		(20.46	)
Net asset value, end of period	$	65.22		$	77.21		$	81.54		$	94.27		$	118.13
Total Returnb		(15.54	%)		(5.30	%)		(13.49	%)		(20.21	%)		(14.76	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,331		$	9,256		$	4,758		$	5,468		$	5,912
Ratios to average net assets:
Net investment income (loss)		(0.96	%)		(1.18	%)		(1.32	%)		(1.58	%)		(1.52	%)
Total expensesc		1.67	%		1.66	%		1.66	%		1.68	%		1.65	%
Portfolio turnover rate		114	%		63	%		103	%		—			—

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

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, 2017e			Year Ended March 31, 2016e			Year Ended March 31, 2015e			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	70.79		$	75.34		$	87.73		$	110.78		$	130.97
Income (loss) from investment operations:
Net investment income (loss)a		(1.12	)		(1.44	)		(1.68	)		(2.28	)		(2.88	)
Net gain (loss) on investments (realized and unrealized)		(10.33	)		(3.11	)		(10.71	)		(20.77	)		(17.31	)
Total from investment operations		(11.45	)		(4.55	)		(12.39	)		(23.05	)		(20.19	)
Net asset value, end of period	$	59.34		$	70.79		$	75.34		$	87.73		$	110.78
Total Returnb		(16.20	%)		(6.05	%)		(14.09	%)		(20.80	%)		(15.44	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,760		$	9,244		$	5,121		$	6,177		$	7,041
Ratios to average net assets:
Net investment income (loss)		(1.69	%)		(1.93	%)		(2.07	%)		(2.34	%)		(2.27	%)
Total expensesc		2.42	%		2.41	%		2.41	%		2.42	%		2.40	%
Portfolio turnover rate		114	%		63	%		103	%		—			—

H-Class	Year Ended March 31, 2017e			Year Ended March 31, 2016e			Period Ended March 31, 2015d,e
Per Share Data
Net asset value, beginning of period	$	77.17		$	81.54		$	86.10
Income (loss) from investment operations:
Net investment income (loss)a		(.70	)		(.90	)		(.54	)
Net gain (loss) on investments (realized and unrealized)		(11.25	)		(3.47	)		(4.02	)
Total from investment operations		(11.95	)		(4.37	)		(4.56	)
Net asset value, end of period	$	65.22		$	77.17		$	81.54
Total Returnb		(15.47	%)		(5.37	%)		(5.30	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,857		$	7,319		$	13,085
Ratios to average net assets:
Net investment income (loss)		(0.96	%)		(1.08	%)		(1.27	%)
Total expensesc		1.67	%		1.67	%		1.60	%
Portfolio turnover rate		114	%		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 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 March 31, 2017 have been restated to reflect a 1:6 reverse share split effective October 28, 2016 — See Note 13.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, the Monthly Rebalanced NASDAQ-100^® 2X Strategy Fund H-Class returned 45.64%, while the NASDAQ-100 Index returned 22.77% over the same period.

The Information Technology sector contributed the most to the performance of the underlying index, followed by the Consumer Discretionary sector. No sector detracted. The Real Estate sector contributed the least to the performance of the underlying index, followed by the Telecommunications Services sector.

Apple, Inc., Amazon.com, Inc., and Microsoft Corp. were the holdings contributing the most to the performance of the underlying index for the year. Gilead Sciences, Inc., Baidu, Inc. ADR, and Stericycle, Inc. 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 49

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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)
Apple, Inc.	8.5%
Guggenheim Strategy Fund I	5.8%
Guggenheim Strategy Fund II	5.8%
Microsoft Corp.	5.8%
Amazon.com, Inc.	4.8%
Facebook, Inc. — Class A	3.8%
Alphabet, Inc. — Class C	3.3%
Alphabet, Inc. — Class A	2.9%
Comcast Corp. — Class A	2.0%
Intel Corp.	1.9%
Top Ten Total	44.6%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	Since Inception (11/28/14)
A-Class Shares	45.65%	21.83%
A-Class Shares with sales charge†	38.72%	19.32%
C-Class Shares	44.52%	20.81%
C-Class Shares with CDSC‡	43.52%	20.81%
H-Class Shares	45.64%	23.09%
NASDAQ-100 Index	22.77%	11.48%

*	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.

50 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
MONTHLY REBALANCE NASDAQ-100 2x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 70.9%
Technology - 26.5%
Apple, Inc.		17,626	$	2,532,150
Microsoft Corp.		25,961		1,709,792
Intel Corp.		15,884		572,935
Broadcom Ltd.		1,347		294,939
QUALCOMM, Inc.		4,962		284,521
Texas Instruments, Inc.		3,358		270,520
Adobe Systems, Inc.*		1,660		216,016
NVIDIA Corp.		1,903		207,294
Applied Materials, Inc.		3,628		141,129
Activision Blizzard, Inc.		2,526		125,946
Cognizant Technology Solutions Corp. — Class A*		2,038		121,302
Micron Technology, Inc.*		3,705		107,075
Intuit, Inc.		859		99,635
Electronic Arts, Inc.*		1,036		92,743
Analog Devices, Inc.		1,039		85,146
Fiserv, Inc.*		721		83,139
Western Digital Corp.		968		79,889
NetEase, Inc. ADR		252		71,568
Paychex, Inc.		1,206		71,033
Lam Research Corp.		547		70,213
Cerner Corp.*		1,108		65,206
Autodesk, Inc.*		748		64,680
Skyworks Solutions, Inc.		621		60,846
Check Point Software Technologies Ltd.*		576		59,132
Microchip Technology, Inc.		727		53,638
KLA-Tencor Corp.		527		50,102
Xilinx, Inc.		836		48,396
Seagate Technology plc		992		45,563
CA, Inc.		1,404		44,535
Citrix Systems, Inc.*		525		43,780
Maxim Integrated Products, Inc.		950		42,712
Akamai Technologies, Inc.*		582		34,745
Total Technology				7,850,320
Communications - 26.4%
Amazon.com, Inc.*		1,603		1,421,123
Facebook, Inc. — Class A*		7,912		1,123,900
Alphabet, Inc. — Class C*		1,166		967,268
Alphabet, Inc. — Class A*		998		846,104
Comcast Corp. — Class A		15,900		597,681
Cisco Systems, Inc.		16,824		568,651
Charter Communications, Inc. — Class A*		903		295,570
Priceline Group, Inc.*		165		293,695
Netflix, Inc.*		1,446		213,733
T-Mobile US, Inc.*		2,777		179,366
Baidu, Inc. ADR*		925		159,581
Yahoo!, Inc.*		3,205		148,744
eBay, Inc.*		3,652		122,598
Twenty-First Century Fox, Inc. — Class A		3,535		114,498
JD.com, Inc. ADR*		3,081		95,850
Twenty-First Century Fox, Inc. — Class B		2,683		85,266
Sirius XM Holdings, Inc.1		15,841		81,581
Liberty Global plc — Class C*		2,119		74,250
Ctrip.com International Ltd. ADR*		1,409		69,252
Symantec Corp.		2,079		63,784
Expedia, Inc.		460		58,038
Viacom, Inc. — Class B		1,167		54,406
DISH Network Corp. — Class A*		762		48,379
Vodafone Group plc ADR		1,462		38,641
Liberty Global plc — Class A*		851		30,525
Discovery Communications, Inc. — Class C*		771		21,827
TripAdvisor, Inc.*		441		19,034
Discovery Communications, Inc. — Class A*		513		14,923
Liberty Ventures*		273		12,143
Liberty Global plc LiLAC — Class C*		405		9,331
Liberty Global plc LiLAC — Class A*		169		3,759
Total Communications				7,833,501
Consumer, Non-cyclical - 11.5%
Amgen, Inc.		2,474		405,910
Kraft Heinz Co.		4,089		371,322
Celgene Corp.*		2,614		325,260
Gilead Sciences, Inc.		4,391		298,237
Mondelez International, Inc. — Class A		5,129		220,957
Biogen, Inc.*		725		198,230
PayPal Holdings, Inc.*		4,057		174,532
Automatic Data Processing, Inc.		1,508		154,404
Regeneron Pharmaceuticals, Inc.*		350		135,629
Express Scripts Holding Co.*		2,035		134,127
Intuitive Surgical, Inc.*,1		130		99,641
Alexion Pharmaceuticals, Inc.*		755		91,536
Vertex Pharmaceuticals, Inc.*		835		91,307
Monster Beverage Corp.*		1,918		88,554
Incyte Corp.*		636		85,014
Illumina, Inc.*		491		83,784
Mylan N.V.*		1,798		70,104
BioMarin Pharmaceutical, Inc.*		581		51,000
Dentsply Sirona, Inc.		776		48,453
Shire plc ADR		276		48,087
IDEXX Laboratories, Inc.*		296		45,765
Verisk Analytics, Inc. — Class A*		559		45,357
Henry Schein, Inc.*		266		45,212
Cintas Corp.		353		44,669
Hologic, Inc.*		938		39,912
Total Consumer, Non-cyclical				3,397,003
Consumer, Cyclical - 5.9%
Walgreens Boots Alliance, Inc.		3,626		301,139
Starbucks Corp.		4,896		285,877
Costco Wholesale Corp.		1,476		247,510
Tesla, Inc.*,1		504		140,263
Marriott International, Inc. — Class A		1,289		121,398
Ross Stores, Inc.		1,324		87,212
O’Reilly Automotive, Inc.*		308		83,111
PACCAR, Inc.		1,179		79,229
American Airlines Group, Inc.		1,694		71,656
Dollar Tree, Inc.*		793		62,219
Ulta Beauty, Inc.*		209		59,613

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
MONTHLY REBALANCE NASDAQ-100 2x STRATEGY FUND

	Shares		Value
Fastenal Co.		972	$	50,058
Hasbro, Inc.		418		41,724
Norwegian Cruise Line Holdings Ltd.*		764		38,758
Tractor Supply Co.		439		30,278
Mattel, Inc.		1,150		29,452
Liberty Interactive Corporation QVC Group — Class A*		1,428		28,589
Total Consumer, Cyclical				1,758,086
Industrial - 0.6%
CSX Corp.		3,112		144,863
J.B. Hunt Transport Services, Inc.		374		34,311
Total Industrial				179,174
Total Common Stocks
(Cost $18,783,348)				21,018,084
MUTUAL FUNDS† - 11.6%
Guggenheim Strategy Fund I2		68,654		1,719,776
Guggenheim Strategy Fund II2		68,784		1,719,595
Total Mutual Funds
(Cost $3,427,002)				3,439,371

	Face Amount
U.S. TREASURY BILLS†† - 1.7%
U.S. Treasury Bill
0.52% due 06/01/17 3,4,6	$	500,000	499,425
Total U.S. Treasury Bills
(Cost $499,555)			499,425
REPURCHASE AGREEMENTS††,5 - 10.2%
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/176		1,199,554	1,199,554
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		1,055,111	1,055,111
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		679,742	679,742
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		104,195	104,195
Total Repurchase Agreements
(Cost $3,038,602)			3,038,602

	Shares
SECURITIES LENDING COLLATERAL†,7 - 0.8%
First American Government Obligations Fund — Class Z, 0.61%8		246,980	$	246,980
Total Securities Lending Collateral
(Cost $246,980)				246,980
Total Investments - 95.2%
(Cost $25,995,487)			$	28,242,462
Other Assets & Liabilities, net - 4.8%				1,430,197
Total Net Assets - 100.0%			$	29,672,659

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 NASDAQ-100 Index Mini Futures Contracts (Aggregate Value of Contracts $869,840)	8	$	8,109

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 NASDAQ-100 Swap 1.23%9, Terminating 04/28/17 (Notional Value $8,527,736)		1,569	$	82,541
Goldman Sachs International April 2017 NASDAQ-100 Swap 1.56%9, Terminating 04/27/17 (Notional Value $4,548,868)		837		51,585
Barclays Bank plc April 2017 NASDAQ-100 Swap 1.26%9, Terminating 04/28/17 (Notional Value $24,400,306)		4,489		(18,290	)
(Total Notional Value $37,476,910)			$	115,836

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
MONTHLY REBALANCE NASDAQ-100 2x STRATEGY 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	All or portion of this security is on loan at March 31, 2017 — See Note 6 .
2	Affiliated issuer — See Note 10.
3	Rate indicated is the effective yield at the time of purchase.
4	Zero coupon rate security.
5	Repurchase Agreements — See Note 5.
6	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
7	Securities lending collateral — See Note 6.
8	Rate indicated is the 7 day yield as of March 31, 2017.
9	Total Return based on NASDAQ-100 Index+/- financing at a variable rate. Rate indicated is rate effective at March 31, 2017.
	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, 2017 (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	$	21,018,084	$	—	$	—	$	—	$	—	$	21,018,084
Equity Futures Contracts		—		8,109		—		—		—		8,109
Equity Index Swap Agreements		—		—		—		134,126		—		134,126
Mutual Funds		3,439,371		—		—		—		—		3,439,371
Repurchase Agreements		—		—		3,038,602		—		—		3,038,602
Securities Lending Collateral		246,980		—		—		—		—		246,980
U.S. Treasury Bills		—		—		499,425		—		—		499,425
Total	$	24,704,435	$	8,109	$	3,538,027	$	134,126	$	—	$	28,384,697

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	18,290	$	—	$	18,290

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 53

MONTHLY REBALANCE NASDAQ-100 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $239,460 of securities loaned (cost $19,529,883)	$	21,764,489
Investments in affiliated issuers, at value (cost $3,427,002)		3,439,371
Repurchase agreements, at value (cost $3,038,602)		3,038,602
Total investments (cost $25,995,487)		28,242,462
Segregated cash with broker		1,696,075
Unrealized appreciation on swap agreements		134,126
Receivables:
Swap settlement		169
Fund shares sold		12,769
Dividends		11,653
Interest		59
Securities lending income		135
Investment adviser		9,522
Total assets		30,106,970
Liabilities:
Unrealized depreciation on swap agreements		18,290
Payable for:
Return of securities loaned		246,980
Licensing fees		88,302
Fund shares redeemed		29,923
Management fees		23,351
Distribution and service fees		6,624
Transfer agent and administrative fees		6,486
Portfolio accounting fees		2,594
Variation margin		160
Miscellaneous		11,601
Total liabilities		434,311
Commitments and contingent liabilities (Note 14)		—
Net assets	$	29,672,659
Net assets consist of:
Paid in capital	$	122,611,613
Accumulated net investment loss		(25,894	)
Accumulated net realized loss on investments		(95,283,980	)
Net unrealized appreciation on investments		2,370,920
Net assets	$	29,672,659
A-Class:
Net assets	$	1,010,488
Capital shares outstanding		12,739
Net asset value per share	$	79.32
Maximum offering price per share(Net asset value divided by 95.25%)	$	83.28
C-Class:
Net assets	$	89,457
Capital shares outstanding		1,150
Net asset value per share	$	77.79
H-Class:
Net assets	$	28,572,714
Capital shares outstanding		351,665
Net asset value per share	$	81.25

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $727)	$	165,691
Dividends from securities of affiliated issuers		57,255
Interest		6,364
Income from securities lending, net		799
Total investment income		230,109
Expenses:
Management fees		207,038
Transfer agent and administrative fees		57,511
Distribution and service fees:
A-Class		1,153
C-Class		526
H-Class		56,226
Portfolio accounting fees		23,004
Registration fees		27,899
Custodian fees		3,280
Trustees’ fees*		2,282
Line of credit fees		131
Miscellaneous		17,335
Total expenses		396,385
Less:
Expenses waived by Adviser		(85,167	)
Net expenses		311,218
Net investment loss		(81,109	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(983,854	)
Investments in affiliated issuers		7,888
Swap agreements		2,440,771
Futures contracts		24,333
Net realized gain		1,489,138
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		2,123,365
Investments in affiliated issuers		13,190
Swap agreements		86,308
Futures contracts		(15,251	)
Net change in unrealized appreciation(depreciation)		2,207,612
Net realized and unrealized gain		3,696,750
Net increase in net assets resulting from operations	$	3,615,641

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

54 | 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(81,109	)	$	(427,077	)
Net realized gain (loss) on investments		1,489,138			(79,531,367	)
Net change in unrealized appreciation (depreciation) on investments		2,207,612			2,435,917
Net increase (decrease) in net assets resulting from operations		3,615,641			(77,522,527	)
Capital share transactions:
Proceeds from sale of shares
A-Class		1,029,778			4,791,065
C-Class		434,997			60,141
H-Class		92,047,101			722,965,697
Cost of shares redeemed
A-Class		(464,494	)		(4,159,012	)
C-Class		(380,929	)		(44,714	)
H-Class		(71,098,351	)		(984,738,898	)
Net increase (decrease) from capital share transactions		21,568,102			(261,125,721	)
Net increase (decrease) in net assets		25,183,743			(338,648,248	)
Net assets:
Beginning of year		4,488,916			343,137,164
End of year	$	29,672,659		$	4,488,916
Accumulated net investment loss at end of year	$	(25,894	)	$	—
Capital share activity:
Shares sold
A-Class		15,538			82,637
C-Class		5,962			1,072
H-Class		1,422,966			12,184,515
Shares redeemed
A-Class		(7,319	)		(87,115	)
C-Class		(5,237	)		(920	)
H-Class		(1,146,939	)		(18,752,891	)
Net increase (decrease) in shares		284,971			(6,572,702	)

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

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, 2017			Year Ended March 31, 2016			Period Ended March 31, 2015a
Per Share Data
Net asset value, beginning of period	$	54.45		$	51.68		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.18	)		(.27	)		(.07	)
Net gain (loss) on investments (realized and unrealized)		25.05			3.04			1.75
Total from investment operations		24.87			2.77			1.68
Net asset value, end of period	$	79.32		$	54.45		$	51.68
Total Returne		45.65	%		5.38	%		3.36	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,010		$	246		$	465
Ratios to average net assets:
Net investment income (loss)		(0.28	%)		(0.48	%)		(0.39	%)
Total expensesc		1.72	%		1.70	%		1.63	%
Net expensesd		1.35	%		1.37	%		1.35	%
Portfolio turnover rate		259	%		551	%		84	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Period Ended March 31, 2015a
Per Share Data
Net asset value, beginning of period	$	53.80		$	51.55		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.73	)		(.56	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		24.72			2.81			1.74
Total from investment operations		23.99			2.25			1.55
Net asset value, end of period	$	77.79		$	53.80		$	51.55
Total Returne		44.52	%		4.40	%		3.10	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	89		$	23		$	14
Ratios to average net assets:
Net investment income (loss)		(1.10	%)		(1.04	%)		(1.13	%)
Total expensesc		2.47	%		2.51	%		2.43	%
Net expensesd		2.10	%		2.17	%		2.13	%
Portfolio turnover rate		259	%		551	%		84	%

56 | 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, 2017			Year Ended March 31, 2016			Period Ended March 31, 2015a
Per Share Data
Net asset value, beginning of period	$	55.79		$	51.57		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.23	)		(.17	)		(.10	)
Net gain (loss) on investments (realized and unrealized)		25.69			4.39			1.67
Total from investment operations		25.46			4.22			1.57
Net asset value, end of period	$	81.25		$	55.79		$	51.57
Total Returne		45.64	%		8.18	%		3.14	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	28,573		$	4,220		$	342,658
Ratios to average net assets:
Net investment income (loss)		(0.35	%)		(0.30	%)		(0.60	%)
Total expensesc		1.72	%		1.67	%		1.64	%
Net expensesd		1.35	%		1.35	%		1.35	%
Portfolio turnover rate		259	%		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.
f	Net expenses may include expenses that are excluded from the expense limitation agreement. Excluding these expenses, the operating expense ratios for the years ended would be:

	3/31/17	3/31/16	3/31/15
A-Class	1.35%	1.35%	1.35%
C-Class	2.10%	2.10%	2.10%
H-Class	1.35%	1.35%	1.35%

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, with the NASDAQ-100 Index returning 22.77%, the Inverse NASDAQ-100^® Fund Investor Class returned -19.42%. For the one-year period ended March 31, 2017, 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. No sector detracted. The Real Estate sector contributed the least to the performance of the underlying index, followed by the Telecommunications Services sector.

Apple, Inc., Amazon.com, Inc., and Microsoft Corp. were the holdings contributing the most to the performance of the underlying index for the year. Gilead Sciences, Inc., Baidu, Inc. ADR, and Stericycle, Inc. 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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.

58 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 Holdings (% of Total Net Assets)
Guggenheim Strategy Fund II	24.7%
Guggenheim Strategy Fund I	24.7%
Total	49.4%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	-19.42%	-16.18%	-15.37%
A-Class Shares	-19.54%	-16.20%	-15.49%
A-Class Shares with sales charge†	-23.36%	-17.02%	-15.91%
C-Class Shares	-20.26%	-17.06%	-16.24%
C-Class Shares with CDSC‡	-21.05%	-17.06%	-16.24%
NASDAQ-100 Index	22.77%	16.06%	12.99%

	1 Year	Since Inception (09/18/14)
H-Class Shares	-19.65%	-14.24%
NASDAQ-100 Index	22.77%	13.14%

*	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 | 59

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE NASDAQ-100® STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 49.3%
Guggenheim Strategy Fund II1		104,998	$	2,624,943
Guggenheim Strategy Fund I1		104,616		2,620,638
Total Mutual Funds
(Cost $5,211,634)				5,245,581

	Face Amount
FEDERAL AGENCY NOTES†† - 23.6%
Federal Farm Credit Bank2
1.15% due 08/10/183	$	2,500,000		2,501,685
Total Federal Agency Notes
(Cost $2,498,972)				2,501,685
FEDERAL AGENCY DISCOUNT NOTES†† - 2.8%
Federal Home Loan Bank2
0.75% due 04/11/173		300,000		299,938
Total Federal Agency Discount Notes
(Cost $299,938)				299,938
REPURCHASE AGREEMENTS††,4 - 47.0%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		2,152,336		2,152,336
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,386,615		1,386,615
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/175		1,235,706		1,235,706
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		212,548		212,548
Total Repurchase Agreements
(Cost $4,987,205)				4,987,205
					��
Total Investments - 122.7%
(Cost $12,997,749)			$	13,034,409
Other Assets & Liabilities, net - (22.7)%				(2,415,598	)
Total Net Assets - 100.0%			$	10,618,811

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2017 NASDAQ-100 Index Mini Futures Contracts (Aggregate Value of Contracts $761,110)		7	$	(7,107	)

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Barclays Bank plc April 2017 NASDAQ-100 Index Swap 1.11%6, Terminating 04/28/17 (Notional Value $1,176,935)		217	$	849
BNP Paribas April 2017 NASDAQ-100 Index Swap 0.73%6, Terminating 04/28/17 (Notional Value $4,548,597)		837		(18,104	)
Goldman Sachs International April 2017 NASDAQ-100 Index Swap 1.26%6, Terminating 04/27/17 (Notional Value $4,117,291)		757		(46,832	)
(Total Notional Value $9,842,823)			$	(64,087	)

†	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, 2017.
4	Repurchase Agreements — See Note 5.
5	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
6	Total Return based on NASDAQ-100 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
INVERSE NASDAQ-100® STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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 Index Swap Agreements	$	—	$	—	$	—	$	849	$	—	$	849
Federal Agency Discount Notes		—		—		299,938		—		—		299,938
Federal Agency Notes		—		—		2,501,685		—		—		2,501,685
Mutual Funds		5,245,581		—		—		—		—		5,245,581
Repurchase Agreements		—		—		4,987,205		—		—		4,987,205
Total	$	5,245,581	$	—	$	7,788,828	$	849	$	—	$	13,035,258

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	7,107	$	—	$	—	$	—	$	7,107
Equity Index Swap Agreements		—		—		—		64,936		—		64,936
Total	$	—	$	7,107	$	—	$	64,936	$	—	$	72,043

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 61

INVERSE NASDAQ-100^® STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $2,798,910)	$	2,801,623
Investments in affiliated issuers, at value (cost $5,211,634)		5,245,581
Repurchase agreements, at value (cost $4,987,205)		4,987,205
Total investments (cost $12,997,749)		13,034,409
Segregated cash with broker		277,300
Unrealized appreciation on swap agreements		849
Receivables:
Variation margin		140
Fund shares sold		42,088
Dividends		9,639
Interest		3,483
Total assets		13,367,908
Liabilities:
Unrealized depreciation on swap agreements		64,936
Payable for:
Fund shares redeemed		2,633,045
Swap settlement		31,077
Management fees		8,325
Transfer agent and administrative fees		2,313
Distribution and service fees		1,739
Portfolio accounting fees		925
Miscellaneous		6,737
Total liabilities		2,749,097
Commitments and contingent liabilities (Note 14)		—
Net assets	$	10,618,811
Net assets consist of:
Paid in capital	$	64,098,190
Accumulated net investment loss		(8,539	)
Accumulated net realized loss on investments		(53,436,306	)
Net unrealized depreciation on investments		(34,534	)
Net assets	$	10,618,811
Investor Class:
Net assets	$	6,286,094
Capital shares outstanding		80,924
Net asset value per share	$	77.68
A-Class:
Net assets	$	2,625,658
Capital shares outstanding		34,717
Net asset value per share	$	75.63
Maximum offering price per share(Net asset value divided by 95.25%)	$	79.40
C-Class:
Net assets	$	1,246,700
Capital shares outstanding		19,111
Net asset value per share	$	65.23
H-Class:
Net assets	$	460,359
Capital shares outstanding		6,174
Net asset value per share	$	74.56

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

INVERSE NASDAQ-100^® STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of affiliated issuers	$	109,929
Interest		50,536
Total investment income		160,465
Expenses:
Management fees		185,307
Transfer agent and administrative fees		51,474
Distribution and service fees:
A-Class		21,065
C-Class		16,039
H-Class		3,190
Portfolio accounting fees		20,590
Registration fees		19,779
Custodian fees		3,513
Trustees’ fees*		1,851
Line of credit fees		76
Miscellaneous		18,022
Total expenses		340,906
Net investment loss		(180,441	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	(821	)
Investments in affiliated issuers		16,106
Swap agreements		(5,443,416	)
Futures contracts		(845,478	)
Net realized loss		(6,273,609	)
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		8,358
Investments in affiliated issuers		31,533
Swap agreements		1,007,318
Futures contracts		240,229
Net change in unrealized appreciation(depreciation)		1,287,438
Net realized and unrealized loss		(4,986,171	)
Net decrease in net assets resulting from operations	$	(5,166,612	)

* 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 | 63

INVERSE NASDAQ-100^® STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(180,441	)	$	(432,506	)
Net realized loss on investments		(6,273,609	)		(3,792,495	)
Net change in unrealized appreciation (depreciation) on investments		1,287,438			(1,299,301	)
Net decrease in net assets resulting from operations		(5,166,612	)		(5,524,302	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		68,630,748			259,319,436
Advisor Class		—			20,257,419	*
A-Class		196,691,141			751,596,238
C-Class		4,397,242			6,855,284
H-Class		37,021,976			298,858,706	*
Cost of shares redeemed
Investor Class		(72,329,507	)		(250,066,675	)
Advisor Class		—			(18,148,285	)*
A-Class		(246,743,211	)		(697,029,713	)
C-Class		(4,285,878	)		(6,200,636	)
H-Class		(36,110,405	)		(300,183,230	)*
Conversion activity*
Advisor Class		—			(2,231,827	)
H-Class		—			2,231,827
Net increase (decrease) from capital share transactions		(52,727,894	)		65,258,544
Net increase (decrease) in net assets		(57,894,506	)		59,734,242
Net assets:
Beginning of year		68,513,317			8,779,075
End of year	$	10,618,811		$	68,513,317
Accumulated net investment loss at end of year	$	(8,539	)	$	(134,758	)
Capital share activity**:
Shares sold
Investor Class		780,223			2,521,523
Advisor Class		—			210,092
A-Class		2,137,082			7,632,212
C-Class		59,951			80,864
H-Class		412,562			3,012,873	*
Shares redeemed
Investor Class		(822,276	)		(2,463,216	)
Advisor Class		—			(188,354	)*
A-Class		(2,686,864	)		(7,053,316	)
C-Class		(58,648	)		(74,101	)
H-Class		(409,102	)		(3,035,154	)*
Conversion activity*
Advisor Class		—			(22,303	)
H-Class		—			21,704
Net increase (decrease) in shares		(587,072	)		642,824

*	Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.
**	Capital share activity for the periods presented through March 31, 2017 has been restated to reflect a 1:4 reverse split effective November 4, 2016 — See Note 13.

64 | 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, 2017f			Year Ended March 31, 2016f			Year Ended March 31, 2015f			Year Ended March 31, 2014e,f			Year Ended March 28, 2013e,f
Per Share Data
Net asset value, beginning of period	$	96.42		$	105.47		$	132.37		$	175.63		$	187.81
Income (loss) from investment operations:
Net investment income (loss)a		(.51	)		(1.08	)		(1.32	)		(2.16	)		(2.40	)
Net gain (loss) on investments (realized and unrealized)		(18.23	)		(7.97	)		(25.58	)		(41.10	)		(9.78	)
Total from investment operations		(18.74	)		(9.05	)		(26.90	)		(43.26	)		(12.18	)
Net asset value, end of period	$	77.68		$	96.42		$	105.47		$	132.37		$	175.63
Total Returnb		(19.42	%)		(8.61	%)		(20.31	%)		(24.62	%)		(6.50	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,286		$	11,857		$	6,821		$	6,865		$	7,709
Ratios to average net assets:
Net investment income (loss)		(0.57	%)		(1.04	%)		(1.14	%)		(1.44	%)		(1.32	%)
Total expensesc		1.46	%		1.44	%		1.46	%		1.46	%		1.44	%
Portfolio turnover rate		486	%		1,674	%		149	%		—			—

A-Class	Year Ended March 31, 2017f			Year Ended March 31, 2016f			Year Ended March 31, 2015f			Year Ended March 31, 2014e,f			Year Ended March 28, 2013e,f
Per Share Data
Net asset value, beginning of period	$	94.01		$	101.76		$	127.98		$	170.45		$	183.06
Income (loss) from investment operations:
Net investment income (loss)a		(1.00	)		(1.32	)		(1.48	)		(2.40	)		(2.80	)
Net gain (loss) on investments (realized and unrealized)		(17.38	)		(6.43	)		(24.74	)		(40.07	)		(9.81	)
Total from investment operations		(18.38	)		(7.75	)		(26.22	)		(42.47	)		(12.61	)
Net asset value, end of period	$	75.63		$	94.01		$	101.76		$	127.98		$	170.45
Total Returnb		(19.54	%)		(7.63	%)		(20.50	%)		(24.88	%)		(6.89	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,626		$	54,948		$	570		$	372		$	183
Ratios to average net assets:
Net investment income (loss)		(1.08	%)		(1.36	%)		(1.35	%)		(1.69	%)		(1.56	%)
Total expensesc		1.70	%		1.69	%		1.71	%		1.71	%		1.68	%
Portfolio turnover rate		486	%		1,674	%		149	%		—			—

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

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, 2017f			Year Ended March 31, 2016f			Year Ended March 31, 2015f			Year Ended March 31, 2014e,f			Year Ended March 28, 2013e,f
Per Share Data
Net asset value, beginning of period	$	81.79		$	90.32		$	114.51		$	153.69		$	166.31
Income (loss) from investment operations:
Net investment income (loss)a		(1.14	)		(1.80	)		(2.12	)		(3.20	)		(3.80	)
Net gain (loss) on investments (realized and unrealized)		(15.42	)		(6.73	)		(22.07	)		(35.98	)		(8.82	)
Total from investment operations		(16.56	)		(8.53	)		(24.19	)		(39.18	)		(12.62	)
Net asset value, end of period	$	65.23		$	81.79		$	90.32		$	114.51		$	153.69
Total Returnb		(20.26	%)		(9.43	%)		(21.13	%)		(25.44	%)		(7.58	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,247		$	1,457		$	998		$	561		$	678
Ratios to average net assets:
Net investment income (loss)		(1.51	%)		(2.09	%)		(2.12	%)		(2.44	%)		(2.32	%)
Total expensesc		2.46	%		2.44	%		2.46	%		2.46	%		2.44	%
Portfolio turnover rate		486	%		1,674	%		149	%		—			—

H-Class	Year Ended March 31, 2017f			Year Ended March 31, 2016f			Period Ended March 31, 2015d,f
Per Share Data
Net asset value, beginning of period	$	92.82		$	101.76		$	110.00
Income (loss) from investment operations:
Net investment income (loss)a		(.86	)		(1.16	)		(.80	)
Net gain (loss) on investments (realized and unrealized)		(17.40	)		(7.78	)		(7.44	)
Total from investment operations		(18.26	)		(8.94	)		(8.24	)
Net asset value, end of period	$	74.56		$	92.82		$	101.76
Total Returnb		(19.65	%)		(8.80	%)		(7.49	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	460		$	252		$	335
Ratios to average net assets:
Net investment income (loss)		(0.95	%)		(1.18	%)		(1.35	%)
Total expensesc		1.70	%		1.70	%		1.68	%
Portfolio turnover rate		486	%		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. The portfolio turnover rate 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	Reverse share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 1:4 reverse share split effective November 4, 2016 — See Note 13.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, the Mid-Cap 1.5x Strategy Fund H-Class returned 29.97%. Over the same period, its benchmark, the S&P MidCap 400 Index, returned 20.92%. 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.

Information Technology and Financials contributed the most to performance of the underlying index during the period. Telecommunications Services was the only sector that detracted; Energy contributed the least.

Advanced Micro Devices, Inc., Computer Sciences Corp., and SVB Financial Group contributed the most to the performance of the underlying index for the period. Alaska Air Group, Inc., Vista Outdoor, Inc., and Life Storage, 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 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 67

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 II	34.2%
Guggenheim Strategy Fund I	29.6%
ResMed, Inc.	0.1%
WhiteWave Foods Co. — Class A	0.1%
SVB Financial Group	0.1%
Computer Sciences Corp.	0.1%
Alleghany Corp.	0.1%
Everest Re Group Ltd.	0.1%
CDK Global, Inc.	0.1%
Duke Realty Corp.	0.1%
Top Ten Total	64.6%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	29.88%	17.41%	8.42%
A-Class Shares with sales charge†	23.72%	16.27%	7.89%
C-Class Shares	28.94%	16.54%	7.62%
C-Class Shares with CDSC‡	27.94%	16.54%	7.62%
H-Class Shares	29.97%	17.48%	8.46%
S&P MidCap 400 Index	20.92%	13.32%	8.96%

*	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.

68 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 14.7%
Financial - 3.7%
SVB Financial Group*		138	$	25,679
Alleghany Corp.*		41		25,200
Everest Re Group Ltd.		107		25,017
Duke Realty Corp.		935		24,563
Reinsurance Group of America, Inc. — Class A		169		21,460
Signature Bank*		141		20,923
East West Bancorp, Inc.		379		19,560
Kilroy Realty Corp.		257		18,524
Camden Property Trust		230		18,506
American Financial Group, Inc.		192		18,321
WR Berkley Corp.		255		18,011
New York Community Bancorp, Inc.		1,284		17,937
SEI Investments Co.		352		17,754
Omega Healthcare Investors, Inc.		517		17,056
National Retail Properties, Inc.		387		16,881
PacWest Bancorp		315		16,777
American Campus Communities, Inc.		350		16,657
Lamar Advertising Co. — Class A		218		16,293
RenaissanceRe Holdings Ltd.		108		15,622
Liberty Property Trust		386		14,880
Douglas Emmett, Inc.		382		14,669
SLM Corp.*		1,128		13,649
Hospitality Properties Trust		432		13,621
Eaton Vance Corp.		302		13,578
Jones Lang LaSalle, Inc.		119		13,263
Cullen/Frost Bankers, Inc.		149		13,257
Synovus Financial Corp.		322		13,208
Old Republic International Corp.		643		13,169
Highwoods Properties, Inc.		267		13,118
Commerce Bancshares, Inc.		230		12,917
Prosperity Bancshares, Inc.		183		12,757
Senior Housing Properties Trust		625		12,656
Brown & Brown, Inc.		302		12,599
FNB Corp.		842		12,521
Bank of the Ozarks, Inc.		240		12,482
PrivateBancorp, Inc. — Class A		210		12,468
EPR Properties		169		12,443
Webster Financial Corp.		242		12,110
DCT Industrial Trust, Inc.		242		11,645
First Horizon National Corp.		614		11,359
First American Financial Corp.		289		11,352
Medical Properties Trust, Inc.		844		10,879
Texas Capital Bancshares, Inc.*		130		10,849
Taubman Centers, Inc.		159		10,497
Weingarten Realty Investors		310		10,351
Umpqua Holdings Corp.		579		10,271
Hancock Holding Co.		222		10,112
Hanover Insurance Group, Inc.		112		10,087
CyrusOne, Inc.		195		10,037
Life Storage, Inc.		122		10,019
Healthcare Realty Trust, Inc.		306		9,945
Primerica, Inc.		120		9,864
Associated Banc-Corp.		399		9,736
CoreCivic, Inc.		309		9,709
Chemical Financial Corp.		187		9,565
Uniti Group, Inc.*		369		9,539
Wintrust Financial Corp.		137		9,469
CNO Financial Group, Inc.		457		9,369
Bank of Hawaii Corp.		112		9,224
Rayonier, Inc.		323		9,154
GEO Group, Inc.1		197		9,135
Cousins Properties, Inc.		1,100		9,097
Stifel Financial Corp.*		179		8,984
UMB Financial Corp.		115		8,661
LaSalle Hotel Properties		297		8,598
Corporate Office Properties Trust		259		8,573
Tanger Factory Outlet Centers, Inc.		253		8,291
Legg Mason, Inc.		228		8,233
First Industrial Realty Trust, Inc.		308		8,202
Valley National Bancorp		694		8,189
Fulton Financial Corp.		458		8,175
Aspen Insurance Holdings Ltd.		157		8,172
MB Financial, Inc.		187		8,007
Education Realty Trust, Inc.		192		7,843
Washington Federal, Inc.		235		7,779
TCF Financial Corp.		449		7,642
Cathay General Bancorp		197		7,423
BancorpSouth, Inc.		224		6,776
Federated Investors, Inc. — Class B		243		6,401
Mack-Cali Realty Corp.		236		6,358
Urban Edge Properties		241		6,338
Care Capital Properties, Inc.		221		5,938
Mercury General Corp.		96		5,855
Trustmark Corp.		178		5,659
International Bancshares Corp.		153		5,416
Genworth Financial, Inc. — Class A*		1,310		5,397
Alexander & Baldwin, Inc.		121		5,387
Kemper Corp.		128		5,107
Janus Capital Group, Inc.		378		4,990
Potlatch Corp.		107		4,890
Quality Care Properties, Inc.*		246		4,640
Washington Prime Group, Inc.		487		4,232
Waddell & Reed Financial, Inc. — Class A1		222		3,774
Total Financial				1,071,300
Industrial - 2.8%
Huntington Ingalls Industries, Inc.		121		24,229
Packaging Corporation of America		248		22,722
Trimble, Inc.*		663		21,222
AO Smith Corp.		387		19,799
Cognex Corp.		226		18,973
IDEX Corp.		200		18,701
Carlisle Companies, Inc.		170		18,090
Wabtec Corp.1		227		17,705
Keysight Technologies, Inc.*		481		17,383
Nordson Corp.		141		17,319
Arrow Electronics, Inc.*		234		17,178
B/E Aerospace, Inc.		267		17,117
Lennox International, Inc.		102		17,065
Hubbell, Inc.		136		16,327

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 69

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
Gentex Corp.		755	$	16,104
Donaldson Company, Inc.		347		15,795
Old Dominion Freight Line, Inc.		182		15,573
Avnet, Inc.		339		15,513
Orbital ATK, Inc.		151		14,798
AECOM*		408		14,521
Lincoln Electric Holdings, Inc.		162		14,071
Jabil Circuit, Inc.		479		13,853
Graco, Inc.1		147		13,839
Sonoco Products Co.		261		13,812
Oshkosh Corp.		196		13,444
Coherent, Inc.*		65		13,367
Zebra Technologies Corp. — Class A*		139		12,684
AptarGroup, Inc.		164		12,627
Eagle Materials, Inc.		127		12,337
Bemis Company, Inc.		243		11,873
Teledyne Technologies, Inc.*		93		11,761
Genesee & Wyoming, Inc. — Class A*		161		10,925
Curtiss-Wright Corp.		117		10,677
Trinity Industries, Inc.		400		10,620
AGCO Corp.		175		10,532
Kirby Corp.*		142		10,018
EMCOR Group, Inc.		157		9,883
Crane Co.		132		9,878
Woodward, Inc.		145		9,848
Littelfuse, Inc.		60		9,595
ITT, Inc.		232		9,517
Landstar System, Inc.		110		9,422
Louisiana-Pacific Corp.*		379		9,407
Valmont Industries, Inc.		59		9,175
Energizer Holdings, Inc.		163		9,087
National Instruments Corp.		279		9,084
EnerSys		114		8,999
Regal Beloit Corp.		118		8,927
Terex Corp.		278		8,729
Owens-Illinois, Inc.*		426		8,682
SYNNEX Corp.		77		8,619
Tech Data Corp.*		91		8,545
Timken Co.		184		8,317
Kennametal, Inc.		211		8,278
Dycom Industries, Inc.*		83		7,715
Belden, Inc.		111		7,680
Clean Harbors, Inc.*		137		7,620
Joy Global, Inc.		262		7,402
Cree, Inc.*		256		6,843
Esterline Technologies Corp.*		78		6,712
GATX Corp.1		104		6,340
KLX, Inc.*		138		6,169
Silgan Holdings, Inc.		98		5,817
MSA Safety, Inc.		82		5,797
Vishay Intertechnology, Inc.		352		5,790
KBR, Inc.		376		5,651
Worthington Industries, Inc.		116		5,230
Granite Construction, Inc.		104		5,220
Knowles Corp.*		233		4,415
Greif, Inc. — Class A		68		3,746
Werner Enterprises, Inc.		118		3,092
Total Industrial				817,805
Consumer, Non-cyclical - 2.3%
ResMed, Inc.		372		26,772
WhiteWave Foods Co. — Class A*		466		26,165
Gartner, Inc.*		217		23,434
Teleflex, Inc.		118		22,860
Ingredion, Inc.		189		22,761
Align Technology, Inc.*		198		22,712
VCA, Inc.*		214		19,580
MarketAxess Holdings, Inc.		99		18,562
ManpowerGroup, Inc.		178		18,257
MEDNAX, Inc.*		247		17,137
WellCare Health Plans, Inc.*		116		16,265
United Therapeutics Corp.*		118		15,975
West Pharmaceutical Services, Inc.		193		15,750
STERIS plc		223		15,490
Bioverativ, Inc.*		284		15,467
Lamb Weston Holdings, Inc.		365		15,352
Service Corp. International		495		15,286
Post Holdings, Inc.*		169		14,790
ABIOMED, Inc.*		106		13,271
TreeHouse Foods, Inc.*		149		12,614
Charles River Laboratories International, Inc.*		125		11,243
Edgewell Personal Care Co.*		151		11,044
Hill-Rom Holdings, Inc.		156		11,014
Masimo Corp.*		118		11,005
Bio-Rad Laboratories, Inc. — Class A*		55		10,964
Live Nation Entertainment, Inc.*		348		10,569
WEX, Inc.*		101		10,454
Hain Celestial Group, Inc.*		272		10,118
HealthSouth Corp.		234		10,018
Bio-Techne Corp.		98		9,962
NuVasive, Inc.*		133		9,932
Flowers Foods, Inc.		483		9,375
Rollins, Inc.		252		9,357
Catalent, Inc.*		328		9,289
Deluxe Corp.		128		9,238
Snyder’s-Lance, Inc.		225		9,070
CoreLogic, Inc.*		222		9,040
PAREXEL International Corp.*		134		8,457
Sprouts Farmers Market, Inc.*		337		7,791
Prestige Brands Holdings, Inc.*		139		7,723
Graham Holdings Co. — Class B		12		7,195
LifePoint Health, Inc.*		105		6,878
Helen of Troy Ltd.*		71		6,688
Avis Budget Group, Inc.*		226		6,685
CEB, Inc.		85		6,681
Lancaster Colony Corp.		51		6,571
Endo International plc*		522		5,826
United Natural Foods, Inc.*		133		5,750
Globus Medical, Inc. — Class A*		189		5,598
LivaNova plc*		114		5,587
Owens & Minor, Inc.		160		5,536
Akorn, Inc.*		229		5,514

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
Sotheby’s*		121	$	5,503
DeVry Education Group, Inc.		150		5,318
Molina Healthcare, Inc.*		112		5,107
Avon Products, Inc.*		1,151		5,064
Aaron’s, Inc.		167		4,967
Dean Foods Co.		239		4,699
Halyard Health, Inc.*		123		4,685
FTI Consulting, Inc.*		108		4,446
Tenet Healthcare Corp.*		210		3,719
Boston Beer Company, Inc. — Class A*,1		24		3,472
Tootsie Roll Industries, Inc.		47		1,769
Total Consumer, Non-cyclical				687,421
Consumer, Cyclical - 1.7%
Domino’s Pizza, Inc.		126		23,221
NVR, Inc.*,1		9		18,961
JetBlue Airways Corp.*		886		18,260
Toro Co.		284		17,739
Copart, Inc.*		269		16,659
Panera Bread Co. — Class A*,1		56		14,664
Brunswick Corp.		235		14,382
Toll Brothers, Inc.*		389		14,047
Dunkin’ Brands Group, Inc.		242		13,232
Polaris Industries, Inc.1		154		12,905
Pool Corp.		108		12,888
Cinemark Holdings, Inc.		278		12,327
MSC Industrial Direct Company, Inc. — Class A		118		12,126
Thor Industries, Inc.		126		12,112
Casey’s General Stores, Inc.		103		11,562
Carter’s, Inc.		128		11,494
Watsco, Inc.		80		11,454
Williams-Sonoma, Inc.		212		11,367
Dick’s Sporting Goods, Inc.		231		11,240
Scotts Miracle-Gro Co. — Class A		116		10,833
Cracker Barrel Old Country Store, Inc.1		63		10,033
Skechers U.S.A., Inc. — Class A*		352		9,663
CST Brands, Inc.		199		9,570
Jack in the Box, Inc.		83		8,443
Tupperware Brands Corp.		133		8,342
Kate Spade & Co.*		337		7,829
Sally Beauty Holdings, Inc.*		377		7,706
Texas Roadhouse, Inc. — Class A		169		7,526
Cheesecake Factory, Inc.		117		7,413
Dana, Inc.		379		7,318
Nu Skin Enterprises, Inc. — Class A		130		7,220
Cabela’s, Inc.*		135		7,170
CalAtlantic Group, Inc.		190		7,116
Buffalo Wild Wings, Inc.*		46		7,027
Wendy’s Co.		506		6,887
World Fuel Services Corp.		184		6,670
Michaels Companies, Inc.*		296		6,627
Office Depot, Inc.		1,353		6,312
American Eagle Outfitters, Inc.		449		6,300
Cooper Tire & Rubber Co.		138		6,120
GameStop Corp. — Class A		268		6,043
Tempur Sealy International, Inc.*		123		5,715
Big Lots, Inc.		117		5,696
Brinker International, Inc.1		129		5,671
Papa John’s International, Inc.		70		5,603
Urban Outfitters, Inc.*		232		5,512
HNI Corp.		116		5,347
Churchill Downs, Inc.		32		5,083
Deckers Outdoor Corp.*		84		5,017
J.C. Penney Company, Inc.*,1		811		4,996
Herman Miller, Inc.		157		4,953
Chico’s FAS, Inc.		340		4,828
TRI Pointe Group, Inc.*		379		4,753
KB Home		219		4,354
Dillard’s, Inc. — Class A1		66		3,448
HSN, Inc.		84		3,116
International Speedway Corp. — Class A		67		2,476
Total Consumer, Cyclical				515,376
Technology - 1.7%
Computer Sciences Corp.1		371		25,602
CDK Global, Inc.		381		24,768
ANSYS, Inc.*		224		23,940
MSCI, Inc. — Class A		238		23,131
Cadence Design Systems, Inc.*		733		23,016
Broadridge Financial Solutions, Inc.		311		21,132
Leidos Holdings, Inc.		376		19,229
Jack Henry & Associates, Inc.		204		18,992
Teradyne, Inc.		527		16,390
PTC, Inc.*		304		15,975
Take-Two Interactive Software, Inc.*		267		15,825
Microsemi Corp.*		303		15,613
Ultimate Software Group, Inc.*		78		15,226
Fortinet, Inc.*		392		15,033
NCR Corp.*		328		14,983
Tyler Technologies, Inc.*		88		13,601
Brocade Communications Systems, Inc.		1,072		13,379
Cypress Semiconductor Corp.		862		11,861
IPG Photonics Corp.*		98		11,829
j2 Global, Inc.		127		10,657
MAXIMUS, Inc.		170		10,574
Fair Isaac Corp.		82		10,574
Cirrus Logic, Inc.*		169		10,257
DST Systems, Inc.		83		10,168
Manhattan Associates, Inc.*		185		9,629
Monolithic Power Systems, Inc.		100		9,210
NetScout Systems, Inc.*		241		9,146
Science Applications International Corp.		115		8,556
Integrated Device Technology, Inc.*		351		8,308
Silicon Laboratories, Inc.*		110		8,091
ACI Worldwide, Inc.*		308		6,588
Pitney Bowes, Inc.		490		6,424
Diebold Nixdorf, Inc.		198		6,079
Allscripts Healthcare Solutions, Inc.*		475		6,023
Acxiom Corp.*		205		5,836
CommVault Systems, Inc.*		110		5,588
VeriFone Systems, Inc.*		293		5,488
Convergys Corp.		248		5,245
NeuStar, Inc. — Class A*		145		4,807

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
MID-CAP 1.5x STRATEGY FUND

	Shares		Value
Synaptics, Inc.*		93	$	4,604
3D Systems Corp.*,1		283		4,234
Total Technology				505,611
Utilities - 0.8%
UGI Corp.		455		22,476
Atmos Energy Corp.		277		21,880
Westar Energy, Inc.		373		20,242
OGE Energy Corp.		525		18,364
Great Plains Energy, Inc.		566		16,539
Aqua America, Inc.		467		15,014
MDU Resources Group, Inc.		513		14,041
National Fuel Gas Co.		224		13,355
Vectren Corp.		218		12,777
WGL Holdings, Inc.		135		11,142
IDACORP, Inc.		132		10,951
Southwest Gas Holdings, Inc.		125		10,364
Hawaiian Electric Industries, Inc.		286		9,527
Black Hills Corp.		140		9,306
ONE Gas, Inc.		137		9,261
New Jersey Resources Corp.		227		8,989
PNM Resources, Inc.		209		7,733
NorthWestern Corp.		127		7,455
Total Utilities				239,416
Basic Materials - 0.7%
Steel Dynamics, Inc.		637		22,141
Valspar Corp.		192		21,300
RPM International, Inc.		351		19,316
Chemours Co.		482		18,557
United States Steel Corp.		458		15,484
Reliance Steel & Aluminum Co.		192		15,364
Olin Corp.		435		14,299
Royal Gold, Inc.		172		12,049
NewMarket Corp.		24		10,878
Cabot Corp.		164		9,825
Sensient Technologies Corp.		117		9,273
PolyOne Corp.		216		7,363
Minerals Technologies, Inc.		92		7,047
Compass Minerals International, Inc.		89		6,039
Domtar Corp.		165		6,026
Commercial Metals Co.		304		5,816
Allegheny Technologies, Inc.		286		5,137
Carpenter Technology Corp.		123		4,588
Total Basic Materials				210,502
Energy - 0.5%
WPX Energy, Inc.*		1,042		13,952
Energen Corp.*		255		13,882
HollyFrontier Corp.		466		13,206
Patterson-UTI Energy, Inc.		437		10,606
Nabors Industries Ltd.		750		9,803
QEP Resources, Inc.*		630		8,007
CONSOL Energy, Inc.*		464		7,786
Western Refining, Inc.		209		7,330
Gulfport Energy Corp.*		418		7,186
Ensco plc — Class A		797		7,133
Oceaneering International, Inc.		258		6,987
Murphy USA, Inc.*		91		6,681
SM Energy Co.		257		6,173
Superior Energy Services, Inc.*		402		5,733
First Solar, Inc.*,1		205		5,556
Dril-Quip, Inc.*		99		5,400
Rowan Companies plc — Class A*		330		5,141
NOW, Inc.*		283		4,800
Oil States International, Inc.*		135		4,475
Noble Corporation plc		643		3,980
Diamond Offshore Drilling, Inc.*,1		169		2,824
Total Energy				156,641
Communications - 0.4%
FactSet Research Systems, Inc.		104		17,151
LogMeIn, Inc.		138		13,455
ARRIS International plc*		500		13,225
ViaSat, Inc.*		139		8,871
Ciena Corp.*		371		8,759
AMC Networks, Inc. — Class A*,1		148		8,685
InterDigital, Inc.		90		7,767
Cable One, Inc.		12		7,494
Frontier Communications Corp.1		3,084		6,600
Telephone & Data Systems, Inc.		246		6,521
John Wiley & Sons, Inc. — Class A		118		6,348
Meredith Corp.		96		6,202
WebMD Health Corp. — Class A*		99		5,215
Time, Inc.		261		5,050
Plantronics, Inc.		87		4,708
New York Times Co. — Class A		320		4,608
Total Communications				130,659
Materials - 0.1%
Ashland Global Holdings, Inc.		164		20,304
Versum Materials, Inc.		286		8,752
Total Materials				29,056
Total Common Stocks
(Cost $4,052,796)				4,363,787
MUTUAL FUNDS† - 63.8%
Guggenheim Strategy Fund II2		406,403		10,160,083
Guggenheim Strategy Fund I2		351,421		8,803,108
Total Mutual Funds
(Cost $18,911,614)				18,963,191

	Face Amount
FEDERAL AGENCY NOTES†† - 6.7%
Farmer Mac3
1.23% due 01/25/184	$	1,000,000	1,002,987
Freddie Mac5
0.75% due 10/26/184,6		1,000,000	998,627
Total Federal Agency Notes
(Cost $2,000,008)			2,001,614

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
MID-CAP 1.5x STRATEGY FUND

	Face Amount		Value
U.S. TREASURY BILLS†† - 5.9%
U.S. Treasury Bill
0.52% due 06/01/17 7,8,11	$	1,500,000	$	1,498,274
0.52% due 05/11/17 7,8,9		250,000		249,810
Total U.S. Treasury Bills
(Cost $1,748,520)				1,748,084
REPURCHASE AGREEMENTS††,10 - 6.6%
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/1711		1,822,369		1,822,369
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		77,247		77,247
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		49,765		49,765
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		7,628		7,628
Total Repurchase Agreements
(Cost $1,957,009)				1,957,009

	Shares
SECURITIES LENDING COLLATERAL†,12 - 0.4%
First American Government Obligations Fund — Class Z, 0.61%13		126,128		126,128
Total Securities Lending Collateral
(Cost $126,128)				126,128
Total Investments - 98.1%
(Cost $28,796,075)			$	29,159,813
Other Assets & Liabilities, net - 1.9%				565,832
Total Net Assets - 100.0%			$	29,725,645

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Value of Contracts $2,061,960)		12	$	8,303

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 S&P MidCap 400 Index Swap 1.08%14, Terminating 04/28/17 (Notional Value $25,593,752)		14,883	$	420,712
Goldman Sachs International April 2017 S&P MidCap 400 Index Swap 1.31%14, Terminating 04/27/17 (Notional Value $5,099,905)		2,966		84,695
Barclays Bank plc April 2017 S&P MidCap 400 Index Swap 1.21%14, Terminating 04/28/17 (Notional Value $7,551,034)		4,391		4,009
(Total Notional Value $38,244,691)			$	509,416

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
MID-CAP 1.5x STRATEGY 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	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Affiliated issuer — See Note 10.
3	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
4	Variable rate security. Rate indicated is rate effective at March 31, 2017.
5	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.
6	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
7	Rate indicated is the effective yield at the time of purchase.
8	Zero coupon rate security.
9	All or a portion of this security is pledged as futures collateral at March 31, 2017.
10	Repurchase Agreements — See Note 5.
11	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
12	Securities lending collateral — See Note 6.
13	Rate indicated is the 7 day yield as of March 31, 2017.
14	Total Return based on S&P MidCap 400 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	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, 2017 (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	$	4,363,787	$	—	$	—	$	—	$	—	$	4,363,787
Equity Futures Contracts		—		8,303		—		—		—		8,303
Equity Index Swap Agreements		—		—		—		509,416		—		509,416
Federal Agency Notes		—		—		2,001,614		—		—		2,001,614
Mutual Funds		18,963,191		—		—		—		—		18,963,191
Repurchase Agreements		—		—		1,957,009		—		—		1,957,009
Securities Lending Collateral		126,128		—		—		—		—		126,128
U.S. Treasury Bills		—		—		1,748,084		—		—		1,748,084
Total	$	23,453,106	$	8,303	$	5,706,707	$	509,416	$	—	$	29,677,532

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

MID-CAP 1.5x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $122,888 of securities loaned (cost $7,927,452)	$	8,239,613
Investments in affiliated issuers, at value (cost $18,911,614)		18,963,191
Repurchase agreements, at value (cost $1,957,009)		1,957,009
Total investments (cost $28,796,075)		29,159,813
Unrealized appreciation on swap agreements		509,416
Segregated cash with broker		3,103
Receivables:
Swap settlement		4,985
Variation margin		316
Fund shares sold		214,642
Dividends		41,212
Interest		3,288
Securities lending income		36
Total assets		29,936,811
Liabilities:
Payable for:
Return of securities loaned		126,128
Management fees		24,309
Licensing fees		11,796
Distribution and service fees		11,641
Securities purchased		9,469
Transfer agent and administrative fees		6,753
Fund shares redeemed		6,128
Portfolio accounting fees		2,701
Miscellaneous		12,241
Total liabilities		211,166
Commitments and contingent liabilities (Note 14)		—
Net assets	$	29,725,645
Net assets consist of:
Paid in capital	$	27,645,190
Undistributed net investment income		—
Accumulated net realized gain on investments		1,198,998
Net unrealized appreciation on investments		881,457
Net assets	$	29,725,645
A-Class:
Net assets	$	1,935,240
Capital shares outstanding		24,221
Net asset value per share	$	79.90
Maximum offering price per share(Net asset value divided by 95.25%)	$	83.88
C-Class:
Net assets	$	7,719,637
Capital shares outstanding		109,629
Net asset value per share	$	70.42
H-Class:
Net assets	$	20,070,768
Capital shares outstanding		250,156
Net asset value per share	$	80.23

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers	$	456,051
Dividends from securities of affiliated issuers		213,800
Interest		76,356
Income from securities lending, net		1,690
Total investment income		747,897
Expenses:
Management fees		556,026
Transfer agent and administrative fees		154,452
Distribution and service fees:
A-Class		5,479
C-Class		65,950
H-Class		132,485
Portfolio accounting fees		59,182
Custodian fees		8,306
Trustees’ fees*		3,857
Line of credit fees		4
Miscellaneous		102,346
Total expenses		1,088,087
Net investment loss		(340,190	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(232,014	)
Investments in affiliated issuers		4,672
Swap agreements		6,550,533
Futures contracts		5,345,274
Net realized gain		11,668,465
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		(1,189,928	)
Investments in affiliated issuers		52,763
Swap agreements		426,333
Futures contracts		(141,136	)
Net change in unrealized appreciation(depreciation)		(851,968	)
Net realized and unrealized gain		10,816,497
Net increase in net assets resulting from operations	$	10,476,307

* 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 | 75

MID-CAP 1.5x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(340,190	)	$	(522,399	)
Net realized gain on investments		11,668,465			3,651,862
Net change in unrealized appreciation (depreciation) on investments		(851,968	)		(3,723,276	)
Net increase (decrease) in net assets resulting from operations		10,476,307			(593,813	)
Distributions to shareholders from:
Net realized gains
A-Class		(5,668	)		(39,098	)
C-Class		(15,978	)		(32,393	)
H-Class		(693,678	)		(1,799,216	)
Total distributions to shareholders		(715,324	)		(1,870,707	)
Capital share transactions:
Proceeds from sale of shares
A-Class		59,054,189			12,111,577
C-Class		2,596,544			2,908,743
H-Class		992,509,796			867,760,588
Distributions reinvested
A-Class		3,889			30,028
C-Class		15,931			31,941
H-Class		252,871			573,424
Cost of shares redeemed
A-Class		(58,826,949	)		(14,445,041	)
C-Class		(1,331,076	)		(2,169,886	)
H-Class		(994,594,368	)		(870,431,834	)
Net decrease from capital share transactions		(319,173	)		(3,630,460	)
Net increase (decrease) in net assets		9,441,810			(6,094,980	)
Net assets:
Beginning of year		20,283,835			26,378,815
End of year	$	29,725,645		$	20,283,835
Undistributed net investment income/Accumulated net investment loss at end of year	$	—		$	(81,090	)
Capital share activity:
Shares sold
A-Class		822,566			201,123
C-Class		43,403			51,115
H-Class		13,926,583			14,189,381
Shares issued from reinvestment of distributions
A-Class		53			473
C-Class		245			566
H-Class		3,418			9,018
Shares redeemed
A-Class		(828,877	)		(250,294	)
C-Class		(21,601	)		(40,676	)
H-Class		(13,899,912	)		(14,221,967	)
Net increase (decrease) in shares		45,878			(61,261	)

76 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	61.64		$	67.32		$	58.48		$	45.07		$	36.23
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.47	)		(.41	)		(.35	)		(.16	)
Net gain (loss) on investments (realized and unrealized)		18.50			(4.81	)		9.45			13.76			9.00
Total from investment operations		18.41			(5.28	)		9.04			13.41			8.84
Less distributions from:
Net realized gains		(.15	)		(.40	)		(.20	)		—			—
Total distributions		(.15	)		(.40	)		(.20	)		—			—
Net asset value, end of period	$	79.90		$	61.64		$	67.32		$	58.48		$	45.07
Total Returnb		29.88	%		(7.86	%)		15.50	%		29.75	%		24.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,935		$	1,879		$	5,330		$	2,632		$	2,199
Ratios to average net assets:
Net investment income (loss)		(0.13	%)		(0.75	%)		(0.66	%)		(0.68	%)		(0.43	%)
Total expensesc		1.68	%		1.65	%		1.64	%		1.67	%		1.66	%
Portfolio turnover rate		1,216	%		1,506	%		598	%		563	%		447	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	54.73		$	60.27		$	52.77		$	40.97		$	33.18
Income (loss) from investment operations:
Net investment income (loss)a		(.65	)		(.78	)		(.76	)		(.64	)		(.41	)
Net gain (loss) on investments (realized and unrealized)		16.49			(4.36	)		8.46			12.44			8.20
Total from investment operations		15.84			(5.14	)		7.70			11.80			7.79
Less distributions from:
Net realized gains		(.15	)		(.40	)		(.20	)		—			—
Total distributions		(.15	)		(.40	)		(.20	)		—			—
Net asset value, end of period	$	70.42		$	54.73		$	60.27		$	52.77		$	40.97
Total Returnb		28.94	%		(8.55	%)		14.63	%		28.80	%		23.48	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,720		$	4,794		$	4,615		$	4,549		$	5,107
Ratios to average net assets:
Net investment income (loss)		(1.05	%)		(1.41	%)		(1.39	%)		(1.40	%)		(1.23	%)
Total expensesc		2.42	%		2.40	%		2.40	%		2.42	%		2.40	%
Portfolio turnover rate		1,216	%		1,506	%		598	%		563	%		447	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	61.85		$	67.45		$	58.56		$	45.13		$	36.27
Income (loss) from investment operations:
Net investment income (loss)a		(.37	)		(.57	)		(.29	)		(.34	)		(.15	)
Net gain (loss) on investments (realized and unrealized)		18.90			(4.63	)		9.38			13.77			9.01
Total from investment operations		18.53			(5.20	)		9.09			13.43			8.86
Less distributions from:
Net realized gains		(.15	)		(.40	)		(.20	)		—			—
Total distributions		(.15	)		(.40	)		(.20	)		—			—
Net asset value, end of period	$	80.23		$	61.85		$	67.45		$	58.56		$	45.13
Total Returnb		29.97	%		(7.73	%)		15.56	%		29.76	%		24.43	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	20,071		$	13,611		$	16,433		$	19,413		$	57,067
Ratios to average net assets:
Net investment income (loss)		(0.50	%)		(0.93	%)		(0.47	%)		(0.66	%)		(0.41	%)
Total expensesc		1.68	%		1.66	%		1.66	%		1.68	%		1.67	%
Portfolio turnover rate		1,216	%		1,506	%		598	%		563	%		447	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Inverse Mid-Cap Strategy Fund H-Class returned -18.87%. Over the same period, its benchmark, the S&P MidCap 400 Index, returned 20.92%. 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.

Information Technology and Financials contributed the most to performance of the underlying index during the period. Telecommunications Services was the only sector that detracted; Energy contributed the least.

Advanced Micro Devices, Inc., Computer Sciences Corp., and SVB Financial Group contributed the most to the performance of the underlying index for the period. Alaska Air Group, Inc., Vista Outdoor, Inc., and Life Storage, 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 79

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	15.7%
Guggenheim Strategy Fund II	15.7%
Total	31.4%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	-18.89%	-14.53%	-12.92%
A-Class Shares with sales charge†	-22.74%	-15.36%	-13.34%
C-Class Shares	-19.51%	-15.19%	-13.59%
C-Class Shares with CDSC‡	-20.31%	-15.19%	-13.59%
H-Class Shares	-18.87%	-14.52%	-12.93%
S&P MidCap 400 Index	20.92%	13.32%	8.96%

*	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 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.

80 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE MID-CAP STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 31.4%
Guggenheim Strategy Fund I1		5,440	$	136,272
Guggenheim Strategy Fund II1		5,446		136,140
Total Mutual Funds
(Cost $270,358)				272,412

	Face Amount
REPURCHASE AGREEMENTS††,2 - 40.8%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	172,574		172,574
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		111,179		111,179
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/173		54,202		54,202
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		17,042		17,042
Total Repurchase Agreements
(Cost $354,997)				354,997
Total Investments - 72.2%
(Cost $625,355)			$	627,409
Other Assets & Liabilities, net - 27.8%				241,392
Total Net Assets - 100.0%			$	868,801

	Units		Unrealized Loss
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Barclays Bank plc April 2017 S&P MidCap 400 Index Swap 1.06%4, Terminating 04/28/17 (Notional Value $431,807)		251	$	(240	)
Goldman Sachs International April 2017 S&P MidCap 400 Index Swap 1.01%4, Terminating 04/27/17 (Notional Value $130,822)		76		(2,175	)
BNP Paribas April 2017 S&P MidCap 400 Index Swap 0.58%4, Terminating 04/28/17 (Notional Value $306,163)		178		(2,601	)
(Total Notional Value $868,792)			$	(5,016	)

†	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, 2017.
4	Total Return based on S&P MidCap 400 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	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, 2017
INVERSE MID-CAP STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 2 - Other*		Level 3		Total
Mutual Funds	$	272,412	$	—	$	—	$	—	$	272,412
Repurchase Agreements		—		354,997		—		—		354,997
Total	$	272,412	$	354,997	$	—	$	—	$	627,409

Investments in Securities (Liabilities)	Level 1		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	5,016	$	—	$	5,016

* Other financial instruments include swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

INVERSE MID-CAP STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in affiliated issuers, at value (cost $270,358)	$	272,412
Repurchase agreements, at value (cost $354,997)		354,997
Total investments (cost $625,355)		627,409
Segregated cash with broker		257,200
Receivables:
Fund shares sold		141
Dividends		500
Interest		7
Total assets		885,257
Liabilities:
Unrealized depreciation on swap agreements		5,016
Payable for:
Fund shares redeemed		8,598
Variation margin		22
Licensing fees		874
Management fees		691
Swap settlement		468
Distribution and service fees		218
Transfer agent and administrative fees		192
Portfolio accounting fees		77
Miscellaneous		300
Total liabilities		16,456
Commitments and contingent liabilities (Note 14)		—
Net assets	$	868,801
Net assets consist of:
Paid in capital	$	13,376,396
Accumulated net investment loss		(2,680	)
Accumulated net realized loss on investments		(12,501,953	)
Net unrealized depreciation on investments		(2,962	)
Net assets	$	868,801
A-Class:
Net assets	$	226,404
Capital shares outstanding		9,087
Net asset value per share	$	24.92
Maximum offering price per share(Net asset value divided by 95.25%)	$	26.16
C-Class:
Net assets	$	36,471
Capital shares outstanding		1,624
Net asset value per share	$	22.46
H-Class:
Net assets	$	605,926
Capital shares outstanding		24,330
Net asset value per share	$	24.90

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of affiliated issuers	$	7,139
Interest		3,404
Total investment income		10,543
Expenses:
Management fees		16,392
Transfer agent and administrative fees		4,553
Distribution and service fees:
A-Class		416
C-Class		2,160
H-Class		3,597
Portfolio accounting fees		1,821
Registration fees		1,923
Custodian fees		276
Trustees’ fees*		162
Miscellaneous		831
Total expenses		32,131
Net investment loss		(21,588	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in affiliated issuers		477
Swap agreements		(446,478	)
Futures contracts		(61,420	)
Net realized loss		(507,421	)
Net change in unrealized appreciation(depreciation) on:
Investments in affiliated issuers		4,229
Swap agreements		29,588
Futures contracts		24,045
Net change in unrealized appreciation(depreciation)		57,862
Net realized and unrealized loss		(449,559	)
Net decrease in net assets resulting from operations	$	(471,147	)

* 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 | 83

INVERSE MID-CAP STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(21,588	)	$	(60,272	)
Net realized gain (loss) on investments		(507,421	)		555,698
Net change in unrealized appreciation (depreciation) on investments		57,862			(15,222	)
Net increase (decrease) in net assets resulting from operations		(471,147	)		480,204
Capital share transactions:
Proceeds from sale of shares
A-Class		1,671,153			2,309,572
C-Class		106,446			572,876
H-Class		22,574,011			102,675,850
Cost of shares redeemed
A-Class		(1,524,458	)		(2,246,291	)
C-Class		(288,863	)		(364,765	)
H-Class		(24,262,478	)		(103,514,443	)
Net decrease from capital share transactions		(1,724,189	)		(567,201	)
Net decrease in net assets		(2,195,336	)		(86,997	)
Net assets:
Beginning of year		3,064,137			3,151,134
End of year	$	868,801		$	3,064,137
Accumulated net investment loss at end of year	$	(2,680	)	$	(12,012	)
Capital share activity:
Shares sold
A-Class		64,427			69,625
C-Class		4,126			18,922
H-Class		826,452			3,247,874
Shares redeemed
A-Class		(58,952	)		(67,547	)
C-Class		(12,294	)		(12,293	)
H-Class		(889,460	)		(3,258,727	)
Net decrease in shares		(65,701	)		(2,146	)

84 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	30.70		$	30.76		$	35.55		$	44.64		$	54.64
Income (loss) from investment operations:
Net investment income (loss)a		(.28	)		(.38	)		(.48	)		(.64	)		(.84	)
Net gain (loss) on investments (realized and unrealized)		(5.50	)		.32			(4.31	)		(8.45	)		(9.16	)
Total from investment operations		(5.78	)		(.06	)		(4.79	)		(9.09	)		(10.00	)
Net asset value, end of period	$	24.92		$	30.70		$	30.76		$	35.55		$	44.64
Total Returnb		(18.89	%)		(0.16	%)		(13.47	%)		(20.36	%)		(18.29	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	226		$	111		$	47		$	93		$	26
Ratios to average net assets:
Net investment income (loss)		(1.02	%)		(1.18	%)		(1.40	%)		(1.65	%)		(1.52	%)
Total expensesc		1.68	%		1.65	%		1.66	%		1.67	%		1.64	%
Portfolio turnover rate		120	%		199	%		38	%		—			—

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	27.89		$	28.16		$	32.78		$	41.49		$	51.18
Income (loss) from investment operations:
Net investment income (loss)a		(.48	)		(.59	)		(.67	)		(.90	)		(1.14	)
Net gain (loss) on investments (realized and unrealized)		(4.95	)		.32			(3.95	)		(7.81	)		(8.55	)
Total from investment operations		(5.43	)		(.27	)		(4.62	)		(8.71	)		(9.69	)
Net asset value, end of period	$	22.46		$	27.89		$	28.16		$	32.78		$	41.49
Total Returnb		(19.51	%)		(0.96	%)		(14.09	%)		(20.99	%)		(18.93	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	36		$	273		$	89		$	131		$	216
Ratios to average net assets:
Net investment income (loss)		(1.85	%)		(2.00	%)		(2.13	%)		(2.40	%)		(2.29	%)
Total expensesc		2.42	%		2.41	%		2.41	%		2.42	%		2.40	%
Portfolio turnover rate		120	%		199	%		38	%		—			—

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	30.69		$	30.70		$	35.49		$	44.59		$	54.57
Income (loss) from investment operations:
Net investment income (loss)a		(.31	)		(.42	)		(.47	)		(.66	)		(.81	)
Net gain (loss) on investments (realized and unrealized)		(5.48	)		.41			(4.32	)		(8.44	)		(9.17	)
Total from investment operations		(5.79	)		(.01	)		(4.79	)		(9.10	)		(9.98	)
Net asset value, end of period	$	24.90		$	30.69		$	30.70		$	35.49		$	44.59
Total Returnb		(18.87	%)		(0.07	%)		(13.47	%)		(20.39	%)		(18.31	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	606		$	2,680		$	3,015		$	3,825		$	1,409
Ratios to average net assets:
Net investment income (loss)		(1.10	%)		(1.32	%)		(1.38	%)		(1.65	%)		(1.53	%)
Total expensesc		1.67	%		1.65	%		1.65	%		1.67	%		1.65	%
Portfolio turnover rate		120	%		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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 37.80%, while the Russell 2000 Index returned 26.22% over the same time period.

Among sectors, the biggest performance contributors to the underlying index during the period were Financials and Information Technology. No sector detracted; the Telecommunications Services sector contributed the least to return, followed by the Consumer Staples sector.

Advanced Micro Devices, Inc., Chemours Co., and Exelisis, Inc. were the largest contributors to the performance of the underlying index for the year. Myriad Genetics, Inc., Abercrombie & Fitch Co. Class A, and Impax Laboratories, Inc. 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 87

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 II	30.3%
Guggenheim Strategy Fund I	27.6%
Advanced Micro Devices, Inc.	0.1%
Chemours Co.	0.1%
Microsemi Corp.	0.1%
Take-Two Interactive Software, Inc.	0.1%
Olin Corp.	0.1%
LogMeIn, Inc.	0.1%
New Residential Investment Corp.	0.1%
Coherent, Inc.	0.1%
Top Ten Total	58.7%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	38.01%	15.77%	6.07%
A-Class Shares with sales charge†	31.47%	14.64%	5.55%
C-Class Shares	36.98%	14.90%	5.26%
C-Class Shares with CDSC‡	35.98%	14.90%	5.26%
H-Class Shares	37.80%	15.77%	6.05%
Russell 2000 Index	26.22%	15.60%	9.44%

*	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.

88 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 23.5%
Financial - 6.4%
New Residential Investment Corp.		413	$	7,012
FNB Corp.		441		6,560
Prosperity Bancshares, Inc.		93		6,482
PrivateBancorp, Inc. — Class A		109		6,470
Bank of the Ozarks, Inc.		124		6,448
Webster Financial Corp.		127		6,354
Investors Bancorp, Inc.		413		5,938
Hudson Pacific Properties, Inc.		170		5,889
Texas Capital Bancshares, Inc.*		69		5,757
IBERIABANK Corp.		70		5,536
Umpqua Holdings Corp.		307		5,445
Primerica, Inc.		66		5,425
Radian Group, Inc.		300		5,387
Medical Properties Trust, Inc.		409		5,271
GEO Group, Inc.1		113		5,240
Healthcare Realty Trust, Inc.		159		5,168
DuPont Fabros Technology, Inc.		104		5,157
Gramercy Property Trust		196		5,155
CNO Financial Group, Inc.		250		5,125
Wintrust Financial Corp.		72		4,977
Hancock Holding Co.		108		4,919
MGIC Investment Corp.*		474		4,801
UMB Financial Corp.		63		4,745
Chemical Financial Corp.		92		4,706
Sunstone Hotel Investors, Inc.		302		4,629
Ellie Mae, Inc.*		46		4,612
Home BancShares, Inc.		168		4,548
MB Financial, Inc.		106		4,539
Stifel Financial Corp.*		89		4,468
LaSalle Hotel Properties		149		4,314
First Industrial Realty Trust, Inc.		161		4,287
Fulton Financial Corp.		239		4,266
Physicians Realty Trust		214		4,252
CoreSite Realty Corp.		47		4,232
Evercore Partners, Inc. — Class A		54		4,207
Washington Federal, Inc.		127		4,203
Education Realty Trust, Inc.		102		4,166
Sterling Bancorp		175		4,148
Valley National Bancorp		344		4,059
RLJ Lodging Trust		170		3,997
Pinnacle Financial Partners, Inc.		59		3,921
Cathay General Bancorp		103		3,881
Cousins Properties, Inc.		469		3,879
National Health Investors, Inc.		52		3,777
Ryman Hospitality Properties, Inc.		61		3,772
Essent Group Ltd.*		104		3,762
United Bankshares, Inc.1		88		3,718
First Citizens BancShares, Inc. — Class A		11		3,689
WageWorks, Inc.*		51		3,687
Selective Insurance Group, Inc.		78		3,679
BancorpSouth, Inc.		119		3,600
Glacier Bancorp, Inc.		106		3,597
First Financial Bankshares, Inc.		88		3,529
Great Western Bancorp, Inc.		82		3,478
BGC Partners, Inc. — Class A		303		3,442
Hope Bancorp, Inc.		178		3,412
Mack-Cali Realty Corp.		124		3,341
Acadia Realty Trust		111		3,336
Community Bank System, Inc.		60		3,299
Urban Edge Properties		125		3,288
EastGroup Properties, Inc.		44		3,235
Financial Engines, Inc.		74		3,223
QTS Realty Trust, Inc. — Class A		66		3,218
Old National Bancorp		185		3,210
Lexington Realty Trust		320		3,194
RLI Corp.		53		3,181
Washington Real Estate Investment Trust		101		3,159
Retail Opportunity Investments Corp.		150		3,155
Columbia Banking System, Inc.		80		3,119
CVB Financial Corp.		141		3,115
DiamondRock Hospitality Co.		279		3,111
Blackhawk Network Holdings, Inc.*		76		3,085
Enstar Group Ltd.*		16		3,061
Colony Starwood Homes		90		3,056
Trustmark Corp.		94		2,988
PS Business Parks, Inc.		26		2,984
South State Corp.		33		2,949
Pebblebrook Hotel Trust1		99		2,892
Hilltop Holdings, Inc.		105		2,884
Genworth Financial, Inc. — Class A*		699		2,880
Alexander & Baldwin, Inc.		64		2,849
American Equity Investment Life Holding Co.		119		2,812
EverBank Financial Corp.		143		2,786
United Community Banks, Inc.		98		2,714
International Bancshares Corp.		76		2,690
First Midwest Bancorp, Inc.		112		2,652
STAG Industrial, Inc.		106		2,652
Argo Group International Holdings Ltd.		39		2,644
Janus Capital Group, Inc.		200		2,640
Astoria Financial Corp.		128		2,625
Potlatch Corp.		57		2,605
Capitol Federal Financial, Inc.		176		2,575
Kennedy-Wilson Holdings, Inc.		115		2,553
LTC Properties, Inc.		53		2,538
Eagle Bancorp, Inc.*		42		2,507
LendingClub Corp.*		456		2,503
TowneBank		77		2,495
Sabra Health Care REIT, Inc.		89		2,486
LegacyTexas Financial Group, Inc.		62		2,474
Xenia Hotels & Resorts, Inc.		144		2,458
Kite Realty Group Trust		114		2,451
Invesco Mortgage Capital, Inc.		157		2,421
ServisFirst Bancshares, Inc.		65		2,365
Horace Mann Educators Corp.		57		2,340
Banner Corp.		42		2,337
Monogram Residential Trust, Inc.		234		2,333
First Financial Bancorp		84		2,306
American Assets Trust, Inc.		55		2,301
Independent Bank Corp.		35		2,275

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Select Income REIT		88	$	2,270
CBL & Associates Properties, Inc.		235		2,242
First Merchants Corp.		57		2,241
Northwest Bancshares, Inc.		133		2,240
Kemper Corp.		56		2,234
Washington Prime Group, Inc.		257		2,233
Simmons First National Corp. — Class A		40		2,206
BofI Holding, Inc.*,1		84		2,195
NBT Bancorp, Inc.		59		2,187
Renasant Corp.		55		2,183
Provident Financial Services, Inc.		84		2,171
Global Net Lease, Inc.		90		2,168
Ameris Bancorp		47		2,167
WesBanco, Inc.		56		2,134
Union Bankshares Corp.		60		2,111
PRA Group, Inc.*		63		2,088
FCB Financial Holdings, Inc. — Class A*		42		2,081
Rexford Industrial Realty, Inc.		92		2,071
Government Properties Income Trust		98		2,051
Park National Corp.		19		1,999
BNC Bancorp		57		1,998
Apollo Commercial Real Estate Finance, Inc.		105		1,975
Chesapeake Lodging Trust		82		1,964
Four Corners Property Trust, Inc.		84		1,918
Summit Hotel Properties, Inc.		120		1,918
Westamerica Bancorporation		34		1,898
Pacific Premier Bancorp, Inc.*		49		1,889
Waddell & Reed Financial, Inc. — Class A1		111		1,887
Boston Private Financial Holdings, Inc.		113		1,853
Kearny Financial Corp.		121		1,821
Franklin Street Properties Corp.		146		1,772
Terreno Realty Corp.		63		1,764
Redwood Trust, Inc.		106		1,761
WSFS Financial Corp.		38		1,746
PennyMac Mortgage Investment Trust		95		1,686
Navigators Group, Inc.		31		1,683
CYS Investments, Inc.		211		1,677
Employers Holdings, Inc.		44		1,670
S&T Bancorp, Inc.		48		1,661
First Commonwealth Financial Corp.		123		1,631
AMERISAFE, Inc.1		25		1,623
CenterState Banks, Inc.		62		1,606
Aircastle Ltd.		66		1,593
National General Holdings Corp.		67		1,592
Beneficial Bancorp, Inc.		97		1,552
Walker & Dunlop, Inc.*		37		1,543
Ramco-Gershenson Properties Trust		110		1,542
MBIA, Inc.*		182		1,542
Agree Realty Corp.		32		1,535
Tompkins Financial Corp.		19		1,530
Infinity Property & Casualty Corp.		16		1,528
Berkshire Hills Bancorp, Inc.		42		1,514
Brookline Bancorp, Inc.		96		1,502
Heartland Financial USA, Inc.		30		1,499
Seritage Growth Properties1		34		1,467
WisdomTree Investments, Inc.1		159		1,444
Pennsylvania Real Estate Investment Trust		95		1,438
Capital Bank Financial Corp. — Class A		33		1,432
RE/MAX Holdings, Inc. — Class A		24		1,426
Lakeland Financial Corp.		33		1,423
FelCor Lodging Trust, Inc.		189		1,419
Banc of California, Inc.1		68		1,408
Safety Insurance Group, Inc.		20		1,402
Capstead Mortgage Corp.		133		1,402
HFF, Inc. — Class A		50		1,384
CareTrust REIT, Inc.		81		1,362
Cardinal Financial Corp.		45		1,347
Stewart Information Services Corp.		30		1,325
Hanmi Financial Corp.		43		1,322
Sandy Spring Bancorp, Inc.		32		1,312
Alexander’s, Inc.		3		1,296
First Busey Corp.		44		1,294
City Holding Co.		20		1,290
Central Pacific Financial Corp.		42		1,283
State Bank Financial Corp.		49		1,280
Piper Jaffray Cos.		20		1,277
National Storage Affiliates Trust		53		1,267
United Fire Group, Inc.		29		1,240
Nelnet, Inc. — Class A		28		1,227
Meridian Bancorp, Inc.		67		1,226
Maiden Holdings Ltd.		87		1,218
Monmouth Real Estate Investment Corp.		85		1,213
FNFV Group*		91		1,206
St. Joe Co.*		70		1,193
Ambac Financial Group, Inc.*		63		1,188
Stock Yards Bancorp, Inc.		29		1,179
United Financial Bancorp, Inc.		69		1,174
Parkway, Inc.		59		1,174
Tier REIT, Inc.		67		1,163
Universal Health Realty Income Trust		18		1,161
ARMOUR Residential REIT, Inc.		51		1,158
Moelis & Co. — Class A		30		1,155
Southside Bancshares, Inc.		34		1,141
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		56		1,131
Universal Insurance Holdings, Inc.		46		1,127
iStar, Inc.*		95		1,121
Cohen & Steers, Inc.		28		1,119
Greenhill & Company, Inc.		38		1,113
Hersha Hospitality Trust		59		1,109
Customers Bancorp, Inc.*		35		1,104
Third Point Reinsurance Ltd.*		91		1,101
Altisource Residential Corp.		72		1,098
New Senior Investment Group, Inc.		106		1,081
BancFirst Corp.		12		1,079
National Bank Holdings Corp. — Class A		33		1,073
MTGE Investment Corp.		64		1,072
Northfield Bancorp, Inc.		59		1,063
Enterprise Financial Services Corp.		25		1,060
MainSource Financial Group, Inc.		32		1,054
Washington Trust Bancorp, Inc.		21		1,035

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
First Interstate BancSystem, Inc. — Class A		26	$	1,031
Independent Bank Group, Inc.		16		1,029
Chatham Lodging Trust		52		1,027
Flushing Financial Corp.		38		1,021
Lakeland Bancorp, Inc.		52		1,019
Encore Capital Group, Inc.*		33		1,016
Heritage Financial Corp.		41		1,015
Silver Bay Realty Trust Corp.		47		1,008
InfraREIT, Inc.		56		1,008
Houlihan Lokey, Inc.		29		999
KCG Holdings, Inc. — Class A*		56		998
TrustCo Bank Corp. NY		127		997
Investors Real Estate Trust		168		997
TriCo Bancshares		28		995
Cass Information Systems, Inc.		15		992
1st Source Corp.		21		986
Seacoast Banking Corporation of Florida*		41		983
Meta Financial Group, Inc.		11		974
Investment Technology Group, Inc.		47		952
New York Mortgage Trust, Inc. REIT		153		944
PHH Corp.*		74		942
Oritani Financial Corp.		55		935
First BanCorp*		165		932
OceanFirst Financial Corp.		33		930
Camden National Corp.		21		925
ConnectOne Bancorp, Inc.		38		922
FBL Financial Group, Inc. — Class A		14		916
Community Trust Bancorp, Inc.		20		915
National Western Life Group, Inc. — Class A1		3		912
Preferred Bank/Los Angeles CA		17		912
Getty Realty Corp.		36		910
Bryn Mawr Bank Corp.		23		909
James River Group Holdings Ltd.		21		900
German American Bancorp, Inc.		19		899
HomeStreet, Inc.*		32		894
Dime Community Bancshares, Inc.		44		893
Easterly Government Properties, Inc.		45		891
Greenlight Capital Re Ltd. — Class A*		40		884
NorthStar Realty Europe Corp.		76		881
Univest Corporation of Pennsylvania		34		881
Park Sterling Corp.		71		874
CoBiz Financial, Inc.		52		874
Saul Centers, Inc.		14		863
OM Asset Management plc		56		847
PJT Partners, Inc. — Class A		24		842
First Potomac Realty Trust		81		833
CU Bancorp*		21		833
Urstadt Biddle Properties, Inc. — Class A		40		822
Bridge Bancorp, Inc.		23		805
Stonegate Bank		17		801
INTL FCStone, Inc.*		21		797
Ladder Capital Corp. — Class A		55		794
First Bancorp		27		791
Flagstar Bancorp, Inc.*		28		789
First of Long Island Corp.		29		784
Diamond Hill Investment Group, Inc.		4		778
NMI Holdings, Inc. — Class A*		68		775
Ocwen Financial Corp.*		140		766
Great Southern Bancorp, Inc.		15		758
Mercantile Bank Corp.		22		757
Farmer Mac — Class C		13		748
Virtus Investment Partners, Inc.		7		741
Anworth Mortgage Asset Corp.		133		738
Nationstar Mortgage Holdings, Inc.*		45		709
OFG Bancorp1		60		708
Peoples Bancorp, Inc.		22		697
Independence Realty Trust, Inc.		74		693
Ashford Hospitality Trust, Inc.		108		688
Pacific Continental Corp.		28		686
AG Mortgage Investment Trust, Inc.		38		686
Horizon Bancorp		26		682
QCR Holdings, Inc.		16		678
TriState Capital Holdings, Inc.*		29		677
First Financial Corp.		14		665
Forestar Group, Inc.*		48		655
Southwest Bancorp, Inc.		25		654
Bar Harbor Bankshares		20		645
First Defiance Financial Corp.		13		644
Gladstone Commercial Corp.		31		641
Waterstone Financial, Inc.		35		639
CatchMark Timber Trust, Inc. — Class A		55		634
Fidelity Southern Corp.		28		627
Financial Institutions, Inc.		19		626
Altisource Portfolio Solutions S.A.*,1		17		626
Armada Hoffler Properties, Inc.		45		625
State National Companies, Inc.		43		619
Virtu Financial, Inc. — Class A		35		595
Peapack Gladstone Financial Corp.1		20		592
Blue Hills Bancorp, Inc.		33		589
Live Oak Bancshares, Inc.		27		585
NexPoint Residential Trust, Inc.		24		580
State Auto Financial Corp.		21		576
CorEnergy Infrastructure Trust, Inc.		17		574
Cedar Realty Trust, Inc.		114		572
Independent Bank Corp.		27		559
First Foundation, Inc.*		36		558
Allegiance Bancshares, Inc.*		15		558
Western Asset Mortgage Capital Corp.		57		557
United Community Financial Corp.		66		550
First Community Bancshares, Inc.		22		549
HCI Group, Inc.		12		547
Bank Mutual Corp.		58		545
Bank of NT Butterfield & Son Ltd.		17		542
Arrow Financial Corp.		16		542
Triumph Bancorp, Inc.*		21		542
HomeTrust Bancshares, Inc.*		23		541
Enova International, Inc.*		36		535
Westwood Holdings Group, Inc.		10		534
First Financial Northwest, Inc.		30		530
Cowen Group, Inc. — Class A*		35		523
Nicolet Bankshares, Inc.*		11		521

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Bank of Marin Bancorp		8	$	515
Heritage Commerce Corp.		36		508
West Bancorporation, Inc.		22		505
UMH Properties, Inc.		33		502
Green Bancorp, Inc.*		28		498
RMR Group, Inc. — Class A		10		495
Marcus & Millichap, Inc.*		20		492
Farmers National Banc Corp.		34		488
Whitestone REIT — Class B		35		484
Citizens, Inc.*		65		483
Ares Commercial Real Estate Corp.		36		482
Republic Bancorp, Inc. — Class A		14		481
CNB Financial Corp.		20		478
Clifton Bancorp, Inc.		29		470
Sierra Bancorp		17		466
Opus Bank		23		463
Global Indemnity Ltd*		12		462
Heritage Insurance Holdings, Inc.		36		460
Enterprise Bancorp, Inc.		13		452
People’s Utah Bancorp		17		450
Dynex Capital, Inc.		63		447
First Connecticut Bancorp, Inc.		18		446
Fidelity & Guaranty Life		16		445
National Commerce Corp.*		12		439
Old Second Bancorp, Inc.		39		439
Atlantic Capital Bancshares, Inc.*		23		436
GAIN Capital Holdings, Inc.		52		433
Community Healthcare Trust, Inc.		18		430
Arlington Asset Investment Corp. — Class A		30		424
Peoples Financial Services Corp.		10		418
OneBeacon Insurance Group Ltd. — Class A		26		416
World Acceptance Corp.*		8		414
Resource Capital Corp.		42		410
American National Bankshares, Inc.		11		410
Preferred Apartment Communities, Inc. — Class A		31		410
WMIH Corp.*		282		409
RAIT Financial Trust		127		406
Farmers Capital Bank Corp.		10		404
One Liberty Properties, Inc.		17		397
Acacia Research Corp.*		69		397
Merchants Bancshares, Inc.		8		390
First Bancorp, Inc.		14		382
MidWestOne Financial Group, Inc.		11		377
Charter Financial Corp.		19		374
Citizens & Northern Corp.		16		372
First Mid-Illinois Bancshares, Inc.		11		372
Ames National Corp.		12		367
United Insurance Holdings Corp.		23		367
HarborOne Bancorp, Inc.*		19		361
Access National Corp.		12		360
Bancorp, Inc.*		70		357
Western New England Bancorp, Inc.		34		357
Macatawa Bank Corp.		36		356
Hingham Institution for Savings		2		354
Ladenburg Thalmann Financial Services, Inc.*		141		350
Cascade Bancorp*		45		347
Safeguard Scientifics, Inc.*		27		343
Territorial Bancorp, Inc.		11		343
Old Line Bancshares, Inc.		12		342
Sun Bancorp, Inc.		14		342
NewStar Financial, Inc.		32		339
National Bankshares, Inc.		9		338
On Deck Capital, Inc.*		67		338
EMC Insurance Group, Inc.		12		337
Ashford Hospitality Prime, Inc.		31		329
PennyMac Financial Services, Inc. — Class A*		19		324
Capital City Bank Group, Inc.		15		321
FRP Holdings, Inc.*		8		320
Shore Bancshares, Inc.		19		317
Investors Title Co.		2		316
Federated National Holding Co.		18		314
Regional Management Corp.*		16		311
BSB Bancorp, Inc.*		11		311
Marlin Business Services Corp.		12		309
WashingtonFirst Bankshares, Inc.		11		308
Century Bancorp, Inc. — Class A		5		304
eHealth, Inc.*		25		301
Baldwin & Lyons, Inc. — Class B		12		293
Guaranty Bancorp		12		292
BankFinancial Corp.		20		290
Kinsale Capital Group, Inc.		9		288
LCNB Corp.		12		286
First Business Financial Services, Inc.		11		286
Southern Missouri Bancorp, Inc.		8		284
Middleburg Financial Corp.		7		280
Bankwell Financial Group, Inc.		8		275
Premier Financial Bancorp, Inc.		13		273
MBT Financial Corp.		24		272
Franklin Financial Network, Inc.*		7		271
Northrim BanCorp, Inc.		9		270
Trupanion, Inc.*		19		270
Home Bancorp, Inc.		8		270
Consolidated-Tomoka Land Co.		5		268
First Northwest Bancorp*		17		264
Southern First Bancshares, Inc.*		8		261
Great Ajax Corp.		20		261
Penns Woods Bancorp, Inc.		6		261
Codorus Valley Bancorp, Inc.		10		259
Summit Financial Group, Inc.		12		258
Southern National Bancorp of Virginia, Inc.		15		254
MutualFirst Financial, Inc.		8		252
Owens Realty Mortgage, Inc.		14		249
Stratus Properties, Inc.		9		247
Central Valley Community Bancorp		12		246
Orrstown Financial Services, Inc.		11		246
First Community Financial Partners, Inc.*		19		242
Carolina Financial Corp.		8		240

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Oppenheimer Holdings, Inc. — Class A		14	$	239
ACNB Corp.		8		231
Xenith Bankshares, Inc.*		9		228
Bear State Financial, Inc.		24		226
SI Financial Group, Inc.		16		225
Tiptree, Inc. — Class A		30		219
Associated Capital Group, Inc. — Class A		6		217
Republic First Bancorp, Inc.*		26		216
Union Bankshares, Inc.		5		215
Donegal Group, Inc. — Class A		12		211
Hallmark Financial Services, Inc.*		19		210
City Office REIT, Inc.		17		207
Atlas Financial Holdings, Inc.*		15		205
Independence Holding Co.		11		205
Chemung Financial Corp.		5		198
Pzena Investment Management, Inc. — Class A		20		197
Orchid Island Capital, Inc.1		19		190
C&F Financial Corp.		4		185
Bluerock Residential Growth REIT, Inc.		15		185
Global Medical REIT, Inc.		20		182
GAMCO Investors, Inc. — Class A		6		178
ESSA Bancorp, Inc.		12		175
Impac Mortgage Holdings, Inc.*		14		174
County Bancorp, Inc.		6		174
Blue Capital Reinsurance Holdings Ltd.		9		174
Midland States Bancorp, Inc.		5		172
Crawford & Co. — Class B		17		171
Veritex Holdings, Inc.*		6		169
Provident Financial Holdings, Inc.		9		168
Pacific Mercantile Bancorp*		21		159
Equity Bancshares, Inc. — Class A*		4		127
FBR & Co.		7		126
Provident Bancorp, Inc.*		6		126
Silvercrest Asset Management Group, Inc. — Class A		9		120
First Internet Bancorp		4		118
Manning & Napier, Inc. — Class A		20		114
Trinity Place Holdings, Inc.*,1		15		110
Real Industry, Inc.*		36		103
Farmland Partners, Inc.		9		101
Greene County Bancorp, Inc.		4		93
Hennessy Advisors, Inc.		5		84
First NBC Bank Holding Co.*		21		84
Medley Management, Inc. — Class A		8		66
California First National Bancorp		3		49
Fifth Street Asset Management, Inc.		7		32
Walter Investment Management Corp.*		25		27
Total Financial				711,859
Consumer, Non-cyclical - 4.5%
Exelixis, Inc.*		315		6,825
TESARO, Inc.*		40		6,154
Masimo Corp.*		58		5,408
HealthSouth Corp.		124		5,309
NuVasive, Inc.*		69		5,153
Bluebird Bio, Inc.*		56		5,089
Deluxe Corp.		69		4,979
Kite Pharma, Inc.*		60		4,708
Nektar Therapeutics*		197		4,623
PAREXEL International Corp.*		73		4,608
Medicines Co.*		93		4,547
Grand Canyon Education, Inc.*		63		4,512
Wright Medical Group N.V.*		144		4,481
Snyder’s-Lance, Inc.		111		4,473
Bright Horizons Family Solutions, Inc.*		61		4,423
Healthcare Services Group, Inc.		97		4,180
Prestige Brands Holdings, Inc.*		74		4,111
Cantel Medical Corp.		50		4,005
Catalent, Inc.*		139		3,935
Chemed Corp.		21		3,837
B&G Foods, Inc.		91		3,663
CEB, Inc.		46		3,615
Helen of Troy Ltd.*		38		3,580
Integra LifeSciences Holdings Corp.*		84		3,539
Insulet Corp.*		81		3,490
Exact Sciences Corp.*,1		147		3,472
On Assignment, Inc.*		70		3,396
Brink’s Co.		63		3,367
ABM Industries, Inc.		77		3,357
Lancaster Colony Corp.		26		3,350
Neogen Corp.*		51		3,344
Ultragenyx Pharmaceutical, Inc.*		49		3,321
Horizon Pharma plc*		224		3,311
Darling Ingredients, Inc.*		228		3,310
Sotheby’s*		68		3,092
Nevro Corp.*		33		3,092
DeVry Education Group, Inc.		87		3,084
ICU Medical, Inc.*		20		3,054
Ironwood Pharmaceuticals, Inc. — Class A*		179		3,054
Owens & Minor, Inc.		87		3,011
Penumbra, Inc.*,1		36		3,004
Clovis Oncology, Inc.*		47		2,992
Sage Therapeutics, Inc.*		42		2,985
United Natural Foods, Inc.*		69		2,984
J&J Snack Foods Corp.		22		2,982
Matthews International Corp. — Class A		44		2,977
Cardtronics plc — Class A*		63		2,945
Cimpress N.V.*		34		2,931
Sanderson Farms, Inc.1		28		2,908
Haemonetics Corp.*		71		2,880
Globus Medical, Inc. — Class A*		97		2,873
Ligand Pharmaceuticals, Inc. — Class B*		26		2,752
Molina Healthcare, Inc.*		60		2,736
Prothena Corporation plc*,1		49		2,734
Zeltiq Aesthetics, Inc.*		49		2,725
Advisory Board Co.*		58		2,714
Aaron’s, Inc.		91		2,706
Incorporated Research Holdings, Inc. — Class A*		59		2,705
Avon Products, Inc.*		611		2,688

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Vector Group Ltd.		129	$	2,683
AMN Healthcare Services, Inc.*		66		2,680
Fresh Del Monte Produce, Inc.		45		2,665
Portola Pharmaceuticals, Inc.*		68		2,665
HealthEquity, Inc.*		61		2,589
Halyard Health, Inc.*		66		2,514
Dean Foods Co.		127		2,497
Korn/Ferry International		79		2,488
Cambrex Corp.*		45		2,477
NxStage Medical, Inc.*		89		2,388
FTI Consulting, Inc.*		58		2,388
HMS Holdings Corp.*		117		2,379
Monro Muffler Brake, Inc.		45		2,345
Pacira Pharmaceuticals, Inc.*		51		2,325
NutriSystem, Inc.		40		2,220
Magellan Health, Inc.*		32		2,210
WD-40 Co.		20		2,179
PRA Health Sciences, Inc.*		33		2,153
Universal Corp.		30		2,123
Array BioPharma, Inc.*		233		2,083
Sarepta Therapeutics, Inc.*		69		2,042
Supernus Pharmaceuticals, Inc.*		65		2,034
Air Methods Corp.*		47		2,021
Green Dot Corp. — Class A*		60		2,002
Select Medical Holdings Corp.*		149		1,989
Halozyme Therapeutics, Inc.*,1		153		1,983
ACCO Brands Corp.*		149		1,959
Amedisys, Inc.*		38		1,941
Travelport Worldwide Ltd.		161		1,895
Boston Beer Company, Inc. — Class A*,1		13		1,881
Theravance Biopharma, Inc.*		51		1,878
Insperity, Inc.		21		1,862
SpartanNash Co.		52		1,819
FibroGen, Inc.*		73		1,799
Myriad Genetics, Inc.*,1		93		1,786
Natus Medical, Inc.*		45		1,766
Merit Medical Systems, Inc.*		60		1,734
Spectranetics Corp.*		59		1,718
Inogen, Inc.*		22		1,706
TriNet Group, Inc.*		59		1,705
Radius Health, Inc.*		44		1,701
Integer Holdings Corp.*		42		1,688
CONMED Corp.		38		1,688
Aerie Pharmaceuticals, Inc.*		37		1,678
Repligen Corp.*		47		1,654
Central Garden & Pet Co. — Class A*		47		1,632
Cal-Maine Foods, Inc.1		44		1,619
TrueBlue, Inc.*		59		1,614
Innoviva, Inc.*		111		1,535
Navigant Consulting, Inc.*		66		1,509
Insmed, Inc.*		86		1,506
TherapeuticsMD, Inc.*,1		209		1,505
Coca-Cola Bottling Company Consolidated		7		1,443
SUPERVALU, Inc.*		368		1,420
Puma Biotechnology, Inc.*		38		1,414
Amicus Therapeutics, Inc.*		198		1,412
Abaxis, Inc.		29		1,407
EVERTEC, Inc.		88		1,400
Spark Therapeutics, Inc.*		26		1,387
Five Prime Therapeutics, Inc.*		38		1,374
Alder Biopharmaceuticals, Inc.*		66		1,373
Andersons, Inc.		36		1,364
Capella Education Co.		16		1,360
Community Health Systems, Inc.*		153		1,357
MiMedx Group, Inc.*,1		142		1,353
National Beverage Corp.		16		1,352
Emergent BioSolutions, Inc.*		46		1,336
Analogic Corp.		17		1,290
Tivity Health, Inc.*		44		1,280
Impax Laboratories, Inc.*		101		1,278
Cardiovascular Systems, Inc.*		45		1,272
Acorda Therapeutics, Inc.*		60		1,260
Ensign Group, Inc.		66		1,241
Blueprint Medicines Corp.*		31		1,240
Performance Food Group Co.*		52		1,238
Huron Consulting Group, Inc.*		29		1,221
Viad Corp.		27		1,220
Calavo Growers, Inc.		20		1,212
Strayer Education, Inc.		15		1,207
Synergy Pharmaceuticals, Inc.*		258		1,202
Momenta Pharmaceuticals, Inc.*		90		1,202
US Physical Therapy, Inc.		18		1,175
Corcept Therapeutics, Inc.*		104		1,140
Glaukos Corp.*		22		1,129
LendingTree, Inc.*		9		1,128
Dermira, Inc.*		33		1,126
Paylocity Holding Corp.*		29		1,120
AMAG Pharmaceuticals, Inc.*		49		1,105
Xencor, Inc.*		46		1,100
Team, Inc.*		40		1,082
LHC Group, Inc.*		20		1,078
McGrath RentCorp		32		1,074
ZIOPHARM Oncology, Inc.*,1		169		1,071
BioTelemetry, Inc.*		37		1,071
National Healthcare Corp.		15		1,070
Depomed, Inc.*		85		1,067
ICF International, Inc.*		25		1,033
Luminex Corp.		55		1,010
Quad/Graphics, Inc.		40		1,010
Diplomat Pharmacy, Inc.*		63		1,005
Eagle Pharmaceuticals, Inc.*,1		12		995
OraSure Technologies, Inc.*		76		983
Acceleron Pharma, Inc.*		37		979
Kindred Healthcare, Inc.		117		977
MGP Ingredients, Inc.		18		976
Epizyme, Inc.*		56		960
PharMerica Corp.*		41		959
Heska Corp.*		9		945
Atrion Corp.		2		936
Retrophin, Inc.*		50		923
CBIZ, Inc.*		68		921
Versartis, Inc.*		43		918

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Progenics Pharmaceuticals, Inc.*		97	$	916
Orthofix International N.V.*,1		24		916
Flexion Therapeutics, Inc.*		34		915
Tootsie Roll Industries, Inc.		24		911
Coherus Biosciences, Inc.*		43		909
K12, Inc.*		47		900
Immunomedics, Inc.*		136		880
John B Sanfilippo & Son, Inc.		12		878
Kelly Services, Inc. — Class A		40		874
AtriCure, Inc.*		45		862
Lannett Company, Inc.*,1		38		849
BioCryst Pharmaceuticals, Inc.*		101		848
Global Blood Therapeutics, Inc.*		23		848
Omeros Corp.*,1		56		847
Lexicon Pharmaceuticals, Inc.*,1		59		846
Loxo Oncology, Inc.*		20		842
Inter Parfums, Inc.		23		841
Quidel Corp.*		37		838
MacroGenics, Inc.*		45		837
Weis Markets, Inc.		14		835
RPX Corp.*		69		828
Anika Therapeutics, Inc.*		19		825
Endologix, Inc.*		112		811
SP Plus Corp.*		24		810
Career Education Corp.*,1		93		809
USANA Health Sciences, Inc.*		14		806
Meridian Bioscience, Inc.		58		800
Providence Service Corp.*		18		800
Heron Therapeutics, Inc.*,1		53		795
Genomic Health, Inc.*		25		787
Kforce, Inc.		33		784
Aimmune Therapeutics, Inc.*,1		36		782
Intra-Cellular Therapies, Inc.*		48		780
Ingles Markets, Inc. — Class A		18		777
Accelerate Diagnostics, Inc.*,1		32		774
CryoLife, Inc.*		44		733
Almost Family, Inc.*		15		729
Vanda Pharmaceuticals, Inc.*		52		728
K2M Group Holdings, Inc.*		35		718
Amphastar Pharmaceuticals, Inc.*		49		711
Esperion Therapeutics, Inc.*		20		706
GenMark Diagnostics, Inc.*		55		705
Phibro Animal Health Corp. — Class A		25		703
Laureate Education, Inc. — Class A*		49		698
NewLink Genetics Corp.*		29		699
Spectrum Pharmaceuticals, Inc.*		107		696
MoneyGram International, Inc.*		41		689
Achillion Pharmaceuticals, Inc.*		163		686
Landauer, Inc.		14		683
Keryx Biopharmaceuticals, Inc.*,1		110		678
SciClone Pharmaceuticals, Inc.*		69		676
Resources Connection, Inc.		40		670
Medifast, Inc.		15		666
Heidrick & Struggles International, Inc.		25		659
Atara Biotherapeutics, Inc.*		32		658
Enanta Pharmaceuticals, Inc.*		21		647
Cross Country Healthcare, Inc.*		45		646
AngioDynamics, Inc.*		37		642
Rent-A-Center, Inc.1		72		639
Cerus Corp.*		141		627
Cytokinetics, Inc.*		48		617
Inovio Pharmaceuticals, Inc.*		93		616
CorVel Corp.*		14		609
Omega Protein Corp.		30		602
Intersect ENT, Inc.*		35		600
La Jolla Pharmaceutical Co.*		20		597
TG Therapeutics, Inc.*,1		51		594
Weight Watchers International, Inc.*,1		38		592
Hackett Group, Inc.		30		584
NeoGenomics, Inc.*		74		584
Revance Therapeutics, Inc.*		28		582
Foundation Medicine, Inc.*		18		581
Ennis, Inc.		34		578
Pacific Biosciences of California, Inc.*		111		574
Lion Biotechnologies, Inc.*		77		574
Carriage Services, Inc. — Class A		21		570
Universal American Corp.*		57		568
Novocure Ltd.*		70		567
Ardelyx, Inc.*		44		557
Forrester Research, Inc.		14		557
Central Garden & Pet Co.*		15		556
Triple-S Management Corp. — Class B*		31		545
ANI Pharmaceuticals, Inc.*		11		545
STAAR Surgical Co.*		55		539
Invacare Corp.		45		536
Capital Senior Living Corp.*		38		534
Cara Therapeutics, Inc.*,1		29		533
Aduro Biotech, Inc.*,1		49		527
Teladoc, Inc.*,1		21		525
Accuray, Inc.*		110		523
REGENXBIO, Inc.*		27		521
Merrimack Pharmaceuticals, Inc.*,1		169		521
PDL BioPharma, Inc.		229		520
Axovant Sciences Ltd.*		34		508
Albany Molecular Research, Inc.*		36		505
Sangamo Therapeutics, Inc.*		97		504
Arena Pharmaceuticals, Inc.*		340		496
Barrett Business Services, Inc.		9		492
Surgery Partners, Inc.*		25		488
Paratek Pharmaceuticals, Inc.*		25		481
Celldex Therapeutics, Inc.*		133		480
Novavax, Inc.*		375		480
Geron Corp.*		210		477
Tetraphase Pharmaceuticals, Inc.*		51		469
LeMaitre Vascular, Inc.		19		468
CytomX Therapeutics, Inc.*		27		466
Oxford Immunotec Global plc*		30		465
PTC Therapeutics, Inc.*		47		462
Alarm.com Holdings, Inc.*		15		461
Enzo Biochem, Inc.*		55		460
Akebia Therapeutics, Inc.*		50		460
Textainer Group Holdings Ltd.		30		459

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 95

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
American Public Education, Inc.*		20	$	458
Teligent, Inc.*		58		453
ImmunoGen, Inc.*		116		449
Revlon, Inc. — Class A*		16		446
BioSpecifics Technologies Corp.*		8		438
Tejon Ranch Co.*		20		438
Curis, Inc.*		155		431
Rockwell Medical, Inc.*		67		419
Surmodics, Inc.*		17		409
Advaxis, Inc.*		50		409
Otonomy, Inc.*		33		404
NanoString Technologies, Inc.*		20		397
Farmer Brothers Co.*		11		389
CRA International, Inc.		11		389
Civitas Solutions, Inc.*		21		385
Adamas Pharmaceuticals, Inc.*		22		385
Agenus, Inc.*		102		385
Chimerix, Inc.*		60		383
Primo Water Corp.*		28		380
XBiotech, Inc.*		23		379
Exactech, Inc.*,1		15		378
AxoGen, Inc.*		36		375
Concert Pharmaceuticals, Inc.*		22		375
Smart & Final Stores, Inc.*		31		375
Chefs’ Warehouse, Inc.*		26		361
Zogenix, Inc.*		33		358
Idera Pharmaceuticals, Inc.*		144		356
Ignyta, Inc.*		41		353
Addus HomeCare Corp.*		11		352
Insys Therapeutics, Inc.*,1		33		347
Bellicum Pharmaceuticals, Inc.*		28		346
Nutraceutical International Corp.		11		343
Sucampo Pharmaceuticals, Inc. — Class A*		31		341
Amplify Snack Brands, Inc.*,1		40		336
Vectrus, Inc.*		15		335
Limoneira Co.		16		335
Cutera, Inc.*		16		331
CAI International, Inc.*		21		331
ServiceSource International, Inc.*		85		330
Medpace Holdings, Inc.*		11		328
Great Lakes Dredge & Dock Corp.*		82		328
BioTime, Inc.*		95		328
Dynavax Technologies Corp.*		55		327
Seneca Foods Corp. — Class A*		9		325
RTI Surgical, Inc.*		80		320
Natera, Inc.*		36		319
Natural Health Trends Corp.		11		318
Utah Medical Products, Inc.		5		312
RadNet, Inc.*		52		307
Avexis, Inc.*		4		304
WaVe Life Sciences Ltd.*		11		303
Organovo Holdings, Inc.*		93		296
CSS Industries, Inc.		11		285
Franklin Covey Co.*		14		283
OncoMed Pharmaceuticals, Inc.*		30		276
Seres Therapeutics, Inc.*		24		270
BioScrip, Inc.*		156		265
Village Super Market, Inc. — Class A		10		265
Anavex Life Sciences Corp.*		46		264
Collectors Universe, Inc.		10		261
ConforMIS, Inc.*		50		261
Bridgepoint Education, Inc.*		24		256
Neff Corp. — Class A*		13		253
Care.com, Inc.*		20		250
MediciNova, Inc.*		41		246
Aratana Therapeutics, Inc.*		46		244
Rigel Pharmaceuticals, Inc.*		73		242
Craft Brew Alliance, Inc.*		18		240
National Research Corp. — Class A		12		236
Cempra, Inc.*		62		233
Karyopharm Therapeutics, Inc.*		18		231
Quorum Health Corp.*		42		228
Trevena, Inc.*		62		228
ChemoCentryx, Inc.*		31		226
MyoKardia, Inc.*		17		224
Editas Medicine, Inc.*		10		223
Infinity Pharmaceuticals, Inc.*		69		223
Voyager Therapeutics, Inc.*		16		212
Minerva Neurosciences, Inc.*		26		211
Aclaris Therapeutics, Inc.*		7		209
American Renal Associates Holdings, Inc.*		12		203
Cellular Biomedicine Group, Inc.*		17		201
ARC Document Solutions, Inc.*		58		200
Invitae Corp.*		18		199
Ascent Capital Group, Inc. — Class A*		14		198
Edge Therapeutics, Inc.*		21		191
Durect Corp.*		176		185
InVivo Therapeutics Holdings Corp.*		45		182
Athersys, Inc.*		106		181
Reata Pharmaceuticals, Inc. — Class A*		8		181
B. Riley Financial, Inc.		12		180
Fortress Biotech, Inc.*		47		174
Synutra International, Inc.*		29		173
AcelRx Pharmaceuticals, Inc.*		50		158
Ophthotech Corp.*		43		157
Egalet Corp.*,1		30		153
Entellus Medical, Inc.*		11		152
Zafgen, Inc.*		31		144
Alliance One International, Inc.*		11		141
Protagonist Therapeutics, Inc.*		11		141
Pfenex, Inc.*		24		139
Ocular Therapeutix, Inc.*		15		139
Sorrento Therapeutics, Inc.*		35		138
Genesis Healthcare, Inc.*		52		137
Endocyte, Inc.*		53		136
Information Services Group, Inc.*		43		135
Natural Grocers by Vitamin Cottage, Inc.*,1		13		135
MannKind Corp.*		91		134
Cidara Therapeutics, Inc.*		17		133
Alico, Inc.		5		132
Nobilis Health Corp.*,1		77		131

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
PFSweb, Inc.*		20	$	131
Iridex Corp.*		11		131
Osiris Therapeutics, Inc.*		27		130
Immune Design Corp.*		19		129
Liberty Tax, Inc.		9		128
Vital Therapies, Inc.*		32		128
Intellia Therapeutics, Inc.*		9		127
Turning Point Brands, Inc.*		8		125
Applied Genetic Technologies Corp.*		18		124
CPI Card Group, Inc.		29		122
Nature’s Sunshine Products, Inc.		12		120
AAC Holdings, Inc.*		14		119
Audentes Therapeutics, Inc.*		7		119
TransEnterix, Inc.*		97		117
Tactile Systems Technology, Inc.*		6		114
Syros Pharmaceuticals, Inc.*		7		112
Stemline Therapeutics, Inc.*		13		111
Collegium Pharmaceutical, Inc.*		11		111
Inventure Foods, Inc.*		25		111
Arrowhead Pharmaceuticals, Inc.*		58		107
ChromaDex Corp.*,1		38		102
Asterias Biotherapeutics, Inc.*		30		102
Bio-Path Holdings, Inc.*		123		102
Veracyte, Inc.*		11		101
Selecta Biosciences, Inc.*		7		100
T2 Biosystems, Inc.*		19		100
Syndax Pharmaceuticals, Inc.*		7		96
GlycoMimetics, Inc.*		17		92
Lifevantage Corp.*		17		91
Lipocine, Inc.*		23		90
Regulus Therapeutics, Inc.*		54		89
Cambium Learning Group, Inc.*		18		88
Titan Pharmaceuticals, Inc.*		26		86
OvaScience, Inc.*		45		84
Adverum Biotechnologies, Inc.*		31		84
Corvus Pharmaceuticals, Inc.*		4		83
TerraVia Holdings, Inc.*		110		80
Neos Therapeutics, Inc.*		11		79
Proteostasis Therapeutics, Inc.*		10		78
NantKwest, Inc.*		22		78
ViewRay, Inc.*		9		77
Lifeway Foods, Inc.*		7		75
vTv Therapeutics, Inc. — Class A*		11		72
Aevi Genomic Medicine, Inc.*		38		71
PharmAthene, Inc.		86		70
Eiger BioPharmaceuticals, Inc.*		6		69
Senseonics Holdings, Inc.*		38		68
Flex Pharma, Inc.*		15		66
Axsome Therapeutics, Inc.*		16		62
CytRx Corp.*		138		61
Agile Therapeutics, Inc.*		19		61
Ampio Pharmaceuticals, Inc.*		67		54
iRadimed Corp.*		6		53
Mirati Therapeutics, Inc.*		10		52
Clearside Biomedical, Inc.*		6		48
Avinger, Inc.*		25		48
Inotek Pharmaceuticals Corp.*		23		46
Aptevo Therapeutics, Inc.*		22		45
Patriot National, Inc.		16		45
Trovagene, Inc.*		39		45
Kadmon Holdings, Inc.*		11		40
Synthetic Biologics, Inc.*		59		37
Adeptus Health, Inc. — Class A*,1		19		34
Tandem Diabetes Care, Inc.*		25		30
Dimension Therapeutics, Inc.*		16		28
Anthera Pharmaceuticals, Inc.*		56		24
Second Sight Medical Products, Inc.*		19		23
Tokai Pharmaceuticals, Inc.*		14		12
Galena Biopharma, Inc.*		16		10
Argos Therapeutics, Inc.*		19		9
Total Consumer, Non-cyclical				501,808
Industrial - 3.3%
Coherent, Inc.*		34		6,992
XPO Logistics, Inc.*		136		6,513
Teledyne Technologies, Inc.*		48		6,069
Curtiss-Wright Corp.		63		5,749
EMCOR Group, Inc.		84		5,288
Woodward, Inc.		74		5,027
Universal Display Corp.		58		4,994
Louisiana-Pacific Corp.*		200		4,964
EnerSys		61		4,815
Littelfuse, Inc.		30		4,797
Tech Data Corp.*		49		4,601
SYNNEX Corp.		40		4,478
Kennametal, Inc.		110		4,314
Sanmina Corp.*		102		4,141
Belden, Inc.		59		4,082
Dycom Industries, Inc.*		42		3,904
Joy Global, Inc.		138		3,899
Advanced Energy Industries, Inc.*		55		3,771
MasTec, Inc.*		92		3,685
Barnes Group, Inc.		70		3,594
Esterline Technologies Corp.*		41		3,528
John Bean Technologies Corp.		40		3,518
GATX Corp.1		57		3,474
Golar LNG Ltd.		123		3,436
Generac Holdings, Inc.*		91		3,392
Summit Materials, Inc. — Class A*		137		3,386
Masonite International Corp.*		42		3,329
Tetra Tech, Inc.		80		3,268
KLX, Inc.*		73		3,263
MSA Safety, Inc.		44		3,110
Vishay Intertechnology, Inc.		189		3,109
Applied Industrial Technologies, Inc.		50		3,093
II-VI, Inc.*		83		2,992
Moog, Inc. — Class A*		44		2,963
Hillenbrand, Inc.		82		2,940
Knight Transportation, Inc.		93		2,916
RBC Bearings, Inc.*		30		2,913
Itron, Inc.*		47		2,853
Trex Company, Inc.*		41		2,845
Worthington Industries, Inc.		63		2,841

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Franklin Electric Company, Inc.		65	$	2,798
Granite Construction, Inc.		55		2,760
KapStone Paper and Packaging Corp.		118		2,726
Plexus Corp.*		47		2,717
Mueller Industries, Inc.		78		2,670
Rexnord Corp.*		114		2,631
Mueller Water Products, Inc. — Class A		217		2,565
Universal Forest Products, Inc.		26		2,562
Trinseo S.A.		38		2,551
TopBuild Corp.*		54		2,538
Simpson Manufacturing Company, Inc.		58		2,499
Brady Corp. — Class A		64		2,474
Headwaters, Inc.*		101		2,371
Watts Water Technologies, Inc. — Class A		38		2,369
Knowles Corp.*		123		2,331
Methode Electronics, Inc.		51		2,326
Apogee Enterprises, Inc.		38		2,265
Benchmark Electronics, Inc.*		69		2,194
Hub Group, Inc. — Class A*		47		2,181
Actuant Corp. — Class A		82		2,161
Rogers Corp.*		25		2,147
Swift Transportation Co. — Class A*		104		2,136
AZZ, Inc.		35		2,082
EnPro Industries, Inc.		29		2,064
Fabrinet*		49		2,059
Exponent, Inc.		34		2,025
AAON, Inc.		57		2,015
Forward Air Corp.		42		1,998
ESCO Technologies, Inc.		34		1,975
Comfort Systems USA, Inc.		52		1,906
Matson, Inc.		60		1,906
Greif, Inc. — Class A		34		1,872
Gibraltar Industries, Inc.*		45		1,854
Cubic Corp.		35		1,848
Atlas Air Worldwide Holdings, Inc.*		33		1,830
Standex International Corp.		18		1,802
Kaman Corp.		37		1,781
Aerojet Rocketdyne Holdings, Inc.*		82		1,779
Triumph Group, Inc.		69		1,777
OSI Systems, Inc.*		24		1,752
Albany International Corp. — Class A		38		1,750
Tennant Co.		24		1,744
Builders FirstSource, Inc.*		116		1,728
SPX FLOW, Inc.*		49		1,701
Proto Labs, Inc.*		33		1,686
Tutor Perini Corp.*		53		1,685
TASER International, Inc.*,1		72		1,641
Werner Enterprises, Inc.		62		1,624
TTM Technologies, Inc.*		100		1,613
Astec Industries, Inc.		26		1,599
Greenbrier Companies, Inc.		37		1,595
AAR Corp.		47		1,581
Saia, Inc.*		35		1,551
American Outdoor Brands Corp.*,1		76		1,506
Raven Industries, Inc.		51		1,482
Chart Industries, Inc.*		42		1,467
Boise Cascade Co.*		54		1,442
Badger Meter, Inc.		39		1,433
SPX Corp.*		59		1,431
Harsco Corp.*		112		1,428
Patrick Industries, Inc.*		20		1,418
US Ecology, Inc.		30		1,406
Altra Industrial Motion Corp.		35		1,363
Multi-Color Corp.		19		1,349
Briggs & Stratton Corp.		60		1,347
Sturm Ruger & Company, Inc.1		25		1,339
TriMas Corp.*		64		1,328
Lindsay Corp.		15		1,322
CIRCOR International, Inc.		22		1,308
Heartland Express, Inc.		65		1,303
Primoris Services Corp.		56		1,300
Applied Optoelectronics, Inc.*		23		1,292
US Concrete, Inc.*		20		1,291
Encore Wire Corp.		28		1,288
Argan, Inc.		19		1,257
Ship Finance International Ltd.		83		1,220
GoPro, Inc. — Class A*,1		140		1,218
General Cable Corp.		67		1,203
Continental Building Products, Inc.*		49		1,201
Novanta, Inc.*		45		1,195
Lydall, Inc.*		22		1,179
Caesarstone Ltd.*		32		1,160
Sun Hydraulics Corp.		32		1,156
JELD-WEN Holding, Inc.*		35		1,150
Federal Signal Corp.		83		1,146
Aegion Corp. — Class A*		49		1,123
Nordic American Tankers Ltd.1		137		1,121
Air Transport Services Group, Inc.*		68		1,091
Advanced Drainage Systems, Inc.		49		1,073
TimkenSteel Corp.*		56		1,059
AVX Corp.		64		1,048
Griffon Corp.		42		1,035
Scorpio Tankers, Inc.		227		1,008
Manitowoc Company, Inc.*		176		1,003
Alamo Group, Inc.		13		990
Quanex Building Products Corp.		48		972
Global Brass & Copper Holdings, Inc.		28		963
CTS Corp.		43		916
NN, Inc.		36		907
Kadant, Inc.		15		890
GasLog Ltd.		57		875
Insteel Industries, Inc.		24		867
Chase Corp.		9		859
ArcBest Corp.		33		858
DXP Enterprises, Inc.*		22		833
Echo Global Logistics, Inc.*		39		833
Astronics Corp.*		26		825
FARO Technologies, Inc.*		23		822
MYR Group, Inc.*		20		820
Aerovironment, Inc.*		28		785
Casella Waste Systems, Inc. — Class A*		54		762
Gorman-Rupp Co.		24		754

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Hyster-Yale Materials Handling, Inc.		13	$	733
Marten Transport Ltd.		31		727
Kratos Defense & Security Solutions, Inc.*		93		724
National Presto Industries, Inc.		7		715
PGT Innovations, Inc.*		66		710
Scorpio Bulkers, Inc.*		77		708
Haynes International, Inc.		18		686
Stoneridge, Inc.*		37		671
Columbus McKinnon Corp.		26		645
Kimball Electronics, Inc.*		38		644
NCI Building Systems, Inc.*		37		635
Advanced Disposal Services, Inc.*		28		633
Teekay Corp.		69		631
Frontline Ltd.1		89		600
Babcock & Wilcox Enterprises, Inc.*		64		598
Tredegar Corp.		34		597
Ply Gem Holdings, Inc.*		30		591
Armstrong Flooring, Inc.*		32		589
DHT Holdings, Inc.		127		568
VSE Corp.		13		530
Greif, Inc. — Class B		8		522
Multi Packaging Solutions International Ltd.*		29		521
Forterra, Inc.*		26		507
NVE Corp.		6		497
YRC Worldwide, Inc.*		45		495
Mistras Group, Inc.*		23		492
Mesa Laboratories, Inc.		4		491
Park Electrochemical Corp.		26		464
Myers Industries, Inc.		29		460
GP Strategies Corp.*		18		455
American Railcar Industries, Inc.1		11		452
Atkore International Group, Inc.*		17		447
TRC Companies, Inc.*		25		436
Park-Ohio Holdings Corp.		12		431
Control4 Corp.*		27		426
CECO Environmental Corp.		40		420
Powell Industries, Inc.		12		413
Energy Recovery, Inc.*		49		408
Ducommun, Inc.*		14		403
NV5 Global, Inc.*		10		376
Milacron Holdings Corp.*		20		372
Vicor Corp.*		22		354
Dorian LPG Ltd.*		33		347
Teekay Tankers Ltd. — Class A		163		334
Bel Fuse, Inc. — Class B		13		332
LSI Industries, Inc.		32		323
Graham Corp.		14		322
Covenant Transportation Group, Inc. — Class A*		17		320
Ardmore Shipping Corp.1		39		314
Energous Corp.*,1		20		312
Gener8 Maritime, Inc.*		54		306
Roadrunner Transportation Systems, Inc.*		42		289
Vishay Precision Group, Inc.*		18		284
Hurco Companies, Inc.		9		280
Orion Group Holdings, Inc.*		37		276
Sparton Corp.*		13		273
ZAGG, Inc.*		37		266
Electro Scientific Industries, Inc.*		38		265
LSB Industries, Inc.*,1		28		263
Radiant Logistics, Inc.*		52		260
Celadon Group, Inc.		37		242
Olympic Steel, Inc.		13		241
UFP Technologies, Inc.*		9		233
Heritage-Crystal Clean, Inc.*		17		233
Fluidigm Corp.*		39		222
IES Holdings, Inc.*		12		217
Layne Christensen Co.*		24		212
Overseas Shipholding Group, Inc. — Class A*		54		208
FreightCar America, Inc.		16		200
Hornbeck Offshore Services, Inc.*,1		45		199
International Seaways, Inc.*		10		191
Omega Flex, Inc.		4		191
Navios Maritime Acquisition Corp.		111		191
Hill International, Inc.*		45		187
Hardinge, Inc.		16		180
Lawson Products, Inc.*		8		180
Ampco-Pittsburgh Corp.		12		169
Gencor Industries, Inc.*		11		164
Allied Motion Technologies, Inc.		8		161
Universal Logistics Holdings, Inc.		11		158
Aqua Metals, Inc.*,1		8		156
Costamare, Inc.		21		140
Willis Lease Finance Corp.*		6		134
American Superconductor Corp.*		16		110
Handy & Harman Ltd.*		4		109
USA Truck, Inc.*		12		88
NL Industries, Inc.*		12		77
Tidewater, Inc.*		66		76
Power Solutions International, Inc.*		7		71
PAM Transportation Services, Inc.*		4		65
Total Industrial				368,809
Consumer, Cyclical - 2.7%
Tenneco, Inc.		77		4,806
Jack in the Box, Inc.		46		4,678
Texas Roadhouse, Inc. — Class A		92		4,097
Beacon Roofing Supply, Inc.*		83		4,080
Dana, Inc.		207		3,997
Cheesecake Factory, Inc.		63		3,992
Cracker Barrel Old Country Store, Inc.1		25		3,981
Buffalo Wild Wings, Inc.*		26		3,972
Office Depot, Inc.		766		3,572
Cooper Tire & Rubber Co.		77		3,415
Hawaiian Holdings, Inc.*		73		3,391
Wolverine World Wide, Inc.		135		3,370
ILG, Inc.		158		3,311
Steven Madden Ltd.*		85		3,277
American Eagle Outfitters, Inc.		232		3,255
FirstCash, Inc.		66		3,243
Dave & Buster’s Entertainment, Inc.*		53		3,238

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Five Below, Inc.*		74	$	3,205
LCI Industries		32		3,194
Anixter International, Inc.*		40		3,171
Papa John’s International, Inc.		38		3,042
Dorman Products, Inc.*		37		3,039
Big Lots, Inc.		62		3,018
Churchill Downs, Inc.		19		3,018
Children’s Place, Inc.1		25		3,001
Marriott Vacations Worldwide Corp.		30		2,997
UniFirst Corp.		21		2,970
HNI Corp.		63		2,903
Bloomin’ Brands, Inc.		144		2,841
IMAX Corp.*		82		2,788
Deckers Outdoor Corp.*		46		2,748
Lithia Motors, Inc. — Class A		32		2,741
Allegiant Travel Co. — Class A		17		2,724
TRI Pointe Group, Inc.*		207		2,597
Herman Miller, Inc.		82		2,587
Chico’s FAS, Inc.		181		2,570
RH*,1		55		2,544
Boyd Gaming Corp.*		114		2,509
PriceSmart, Inc.		27		2,489
iRobot Corp.*,1		37		2,447
SkyWest, Inc.		70		2,398
KB Home		114		2,267
Columbia Sportswear Co.		38		2,233
Cooper-Standard Holdings, Inc.*		20		2,219
Group 1 Automotive, Inc.		29		2,148
AMC Entertainment Holdings, Inc. — Class A		68		2,139
Gentherm, Inc.*		51		2,002
Steelcase, Inc. — Class A		119		1,993
American Axle & Manufacturing Holdings, Inc.*		106		1,991
Meritage Homes Corp.*		54		1,987
Core-Mark Holding Company, Inc.		63		1,965
Meritor, Inc.*		114		1,953
DSW, Inc. — Class A		93		1,923
Mobile Mini, Inc.		63		1,922
Penn National Gaming, Inc.*		104		1,917
Wabash National Corp.1		90		1,861
La-Z-Boy, Inc.		68		1,835
MDC Holdings, Inc.		59		1,773
Select Comfort Corp.*		71		1,759
Bob Evans Farms, Inc.		27		1,751
American Woodmark Corp.*		19		1,744
BMC Stock Holdings, Inc.*		76		1,718
Interface, Inc. — Class A		90		1,715
Scientific Games Corp. — Class A*		72		1,703
SeaWorld Entertainment, Inc.		93		1,700
Navistar International Corp.*		69		1,699
Asbury Automotive Group, Inc.*		28		1,683
HSN, Inc.		44		1,632
Knoll, Inc.		67		1,595
Caleres, Inc.		60		1,585
La Quinta Holdings, Inc.*		117		1,582
Genesco, Inc.*		28		1,553
Sonic Corp.		61		1,547
Triton International Ltd.		57		1,470
Pinnacle Entertainment, Inc.*		75		1,464
Callaway Golf Co.		132		1,460
ClubCorp Holdings, Inc.		90		1,445
Standard Motor Products, Inc.		29		1,425
Installed Building Products, Inc.*		27		1,424
Liberty TripAdvisor Holdings, Inc. — Class A*		101		1,424
Cavco Industries, Inc.*		12		1,397
Belmond Ltd. — Class A*		115		1,392
Universal Electronics, Inc.*		20		1,370
Rush Enterprises, Inc. — Class A*		41		1,356
ScanSource, Inc.*		34		1,335
G-III Apparel Group Ltd.*		60		1,313
Denny’s Corp.*		106		1,311
DineEquity, Inc.		24		1,306
International Speedway Corp. — Class A		35		1,293
BJ’s Restaurants, Inc.*		32		1,293
Oxford Industries, Inc.		20		1,145
Abercrombie & Fitch Co. — Class A		95		1,133
Taylor Morrison Home Corp. — Class A*		51		1,087
H&E Equipment Services, Inc.		44		1,079
National CineMedia, Inc.		85		1,074
Ethan Allen Interiors, Inc.		35		1,073
Winnebago Industries, Inc.		36		1,053
Red Robin Gourmet Burgers, Inc.*		18		1,052
Fossil Group, Inc.*,1		59		1,030
Ascena Retail Group, Inc.*		241		1,027
Caesars Acquisition Co. — Class A*		66		1,016
Tailored Brands, Inc.		68		1,016
Guess?, Inc.		86		959
Express, Inc.*		103		938
Ollie’s Bargain Outlet Holdings, Inc.*		28		938
Red Rock Resorts, Inc. — Class A		42		932
Isle of Capri Casinos, Inc.*		35		923
Ruth’s Hospitality Group, Inc.		46		922
Douglas Dynamics, Inc.		30		920
Hibbett Sports, Inc.*		31		915
AdvancePierre Foods Holdings, Inc.		29		904
Fiesta Restaurant Group, Inc.*		36		871
Wesco Aircraft Holdings, Inc.*		76		866
Tile Shop Holdings, Inc.		45		865
Biglari Holdings, Inc.*		2		864
Superior Industries International, Inc.		34		862
Fox Factory Holding Corp.*		30		861
Kimball International, Inc. — Class B		52		858
Finish Line, Inc. — Class A		59		840
Francesca’s Holdings Corp.*		54		829
SiteOne Landscape Supply, Inc.*		17		823
Barnes & Noble, Inc.		88		814
Modine Manufacturing Co.*		66		805
Nautilus, Inc.*		44		803
Marcus Corp.		25		803
Pier 1 Imports, Inc.1		111		795

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Essendant, Inc.		52	$	788
M/I Homes, Inc.*		32		784
Cato Corp. — Class A		35		769
Sonic Automotive, Inc. — Class A		38		762
Tower International, Inc.		28		759
Eldorado Resorts, Inc.*		39		738
Motorcar Parts of America, Inc.*		24		738
MarineMax, Inc.*		34		736
Caesars Entertainment Corp.*		77		735
Lumber Liquidators Holdings, Inc.*,1		35		735
Crocs, Inc.*		102		721
LGI Homes, Inc.*,1		21		712
Buckle, Inc.		38		707
GNC Holdings, Inc. — Class A1		96		707
Shake Shack, Inc. — Class A*		21		701
Carrols Restaurant Group, Inc.*		48		679
William Lyon Homes — Class A*		32		660
Chuy’s Holdings, Inc.*		22		656
Fred’s, Inc. — Class A1		50		655
Vitamin Shoppe, Inc.*,1		32		645
Titan International, Inc.		61		631
Unifi, Inc.*		22		625
Rush Enterprises, Inc. — Class B*		20		624
Regis Corp.*		52		609
Haverty Furniture Companies, Inc.		25		609
Wingstop, Inc.		21		594
Del Frisco’s Restaurant Group, Inc.*		32		578
EZCORP, Inc. — Class A*		70		571
Veritiv Corp.*		11		570
Malibu Boats, Inc. — Class A*		25		561
Intrawest Resorts Holdings, Inc.*		22		550
Camping World Holdings, Inc. — Class A		17		548
Barnes & Noble Education, Inc.*		57		547
Acushnet Holdings Corp.*		31		536
Beazer Homes USA, Inc.*		44		534
Century Communities, Inc.*		21		533
Hooker Furniture Corp.		17		528
Movado Group, Inc.		21		524
PetMed Express, Inc.		26		524
Party City Holdco, Inc.*		37		520
REV Group, Inc.		18		496
Daktronics, Inc.		51		482
Zoe’s Kitchen, Inc.*		26		481
Metaldyne Performance Group, Inc.		21		480
PC Connection, Inc.		16		477
Culp, Inc.		15		468
Potbelly Corp.*		33		459
Zumiez, Inc.*		25		458
Flexsteel Industries, Inc.		9		454
Iconix Brand Group, Inc.*		60		451
Shoe Carnival, Inc.		18		442
Libbey, Inc.		29		422
Eros International plc*,1		41		422
PICO Holdings, Inc.*		30		420
Monarch Casino & Resort, Inc.*		14		414
Del Taco Restaurants, Inc.*		31		411
America’s Car-Mart, Inc.*		11		401
Miller Industries, Inc.		15		395
Perry Ellis International, Inc.*		18		387
Hovnanian Enterprises, Inc. — Class A*		168		381
Bassett Furniture Industries, Inc.		14		377
Spartan Motors, Inc.		47		376
Titan Machinery, Inc.*		24		368
Supreme Industries, Inc. — Class A		18		365
Big 5 Sporting Goods Corp.		24		362
Reading International, Inc. — Class A*		23		357
GMS, Inc.*		10		350
NACCO Industries, Inc. — Class A		5		349
Winmark Corp.		3		339
Habit Restaurants, Inc. — Class A*		19		336
Freshpet, Inc.*,1		30		330
Planet Fitness, Inc. — Class A		17		328
Citi Trends, Inc.1		19		323
El Pollo Loco Holdings, Inc.*,1		27		323
Lifetime Brands, Inc.		16		322
Green Brick Partners, Inc.*		32		318
Speedway Motorsports, Inc.		16		301
Duluth Holdings, Inc. — Class B*,1		14		298
Bojangles’, Inc.*		14		287
AV Homes, Inc.*		16		263
Johnson Outdoors, Inc. — Class A		7		256
Weyco Group, Inc.		9		253
Vera Bradley, Inc.*		27		251
Nathan’s Famous, Inc.*		4		251
Conn’s, Inc.*		28		245
Tuesday Morning Corp.*		63		236
Kirkland’s, Inc.*		19		236
Ruby Tuesday, Inc.*		83		233
West Marine, Inc.		24		229
Century Casinos, Inc.*		29		219
Sequential Brands Group, Inc.*		54		210
Superior Uniform Group, Inc.		11		205
Golden Entertainment, Inc.		15		198
Horizon Global Corp.*		14		194
Escalade, Inc.		15		194
J Alexander’s Holdings, Inc.*		19		191
New Home Company, Inc.*		18		188
Marine Products Corp.		17		185
At Home Group, Inc.*		12		182
Boot Barn Holdings, Inc.*		18		178
MCBC Holdings, Inc.		11		178
Systemax, Inc.		16		177
Delta Apparel, Inc.*		10		176
Sears Holdings Corp.*,1		15		172
Lindblad Expeditions Holdings, Inc.*		19		170
Build-A-Bear Workshop, Inc. — Class A*		19		168
Sportsman’s Warehouse Holdings, Inc.*,1		35		167
Jamba, Inc.*		18		163
Tilly’s, Inc. — Class A		17		153
Destination XL Group, Inc.*		51		145
Red Lion Hotels Corp.*		20		141
Strattec Security Corp.		5		139

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares			Value
Blue Bird Corp.*		8		$	137
Stein Mart, Inc.		44			132
UCP, Inc. — Class A*		12			122
JAKKS Pacific, Inc.*		21			116
Fogo De Chao, Inc.*		7			114
Unique Fabricating, Inc.		9			108
Gaia, Inc.*		10			100
Empire Resorts, Inc.*		4			97
Noodles & Co.*		16			92
Stage Stores, Inc.1		35			91
Container Store Group, Inc.*		21			89
Luby’s, Inc.*		26			81
Kona Grill, Inc.*		10			63
Sears Hometown and Outlet Stores, Inc.*		15			59
Vince Holding Corp.*		30			47
CompX International, Inc.		2			31
Performance Sports Group Ltd.*		30			25
Workhorse Group, Inc.*		9			24
Total Consumer, Cyclical					296,470
Technology - 2.5%
Advanced Micro Devices, Inc.*		1,042			15,374
Microsemi Corp.*		158			8,141
Take-Two Interactive Software, Inc.*		135			8,001
Cavium, Inc.*		89			6,377
Aspen Technology, Inc.*		108			6,363
Fair Isaac Corp.		44			5,674
MAXIMUS, Inc.		90			5,598
j2 Global, Inc.		66			5,538
Cirrus Logic, Inc.*		88			5,340
MKS Instruments, Inc.		74			5,087
Blackbaud, Inc.		66			5,060
EPAM Systems, Inc.*		67			5,060
Monolithic Power Systems, Inc.		54			4,972
NetScout Systems, Inc.*		124			4,706
Entegris, Inc.*		196			4,585
Integrated Device Technology, Inc.*		186			4,403
Science Applications International Corp.		59			4,390
Medidata Solutions, Inc.*		76			4,384
Silicon Laboratories, Inc.*		58			4,266
CACI International, Inc. — Class A*		33			3,871
Lumentum Holdings, Inc.*		71			3,787
Verint Systems, Inc.*		86			3,730
Paycom Software, Inc.*		62			3,566
ACI Worldwide, Inc.*		160			3,422
Electronics for Imaging, Inc.*		66			3,222
Acxiom Corp.*		108			3,075
Semtech Corp.*		90			3,042
Diebold Nixdorf, Inc.		95			2,917
CommVault Systems, Inc.*		54			2,744
Inphi Corp.*		56			2,734
Cornerstone OnDemand, Inc.*		69			2,683
Convergys Corp.		125			2,644
MicroStrategy, Inc. — Class A*		14			2,629
RealPage, Inc.*		75			2,618
Ambarella, Inc.*		45			2,462
NeuStar, Inc. — Class A*		74			2,453
Cabot Microelectronics Corp.		32			2,451
Power Integrations, Inc.		37			2,433
Synaptics, Inc.*		49			2,426
HubSpot, Inc.*		39			2,361
XPERI CORP.		68			2,308
Mercury Systems, Inc.*		59			2,304
3D Systems Corp.*		150			2,243
Pegasystems, Inc.		50			2,193
MaxLinear, Inc. — Class A*		78			2,188
Ebix, Inc.1		35			2,144
ExlService Holdings, Inc.*		45			2,131
MACOM Technology Solutions Holdings, Inc.*		44			2,125
Brooks Automation, Inc.		94			2,106
Insight Enterprises, Inc.*		51			2,096
Progress Software Corp.		70			2,034
2U, Inc.*		51			2,023
Omnicell, Inc.*		49			1,992
Rambus, Inc.*		151			1,984
Envestnet, Inc.*		58			1,873
Callidus Software, Inc.*		84			1,793
CSG Systems International, Inc.		45			1,701
Veeco Instruments, Inc.*		56			1,672
BroadSoft, Inc.*		41			1,648
Amkor Technology, Inc.*		140			1,623
Sykes Enterprises, Inc.*		55			1,617
InvenSense, Inc. — Class A*		114			1,440
Synchronoss Technologies, Inc.*		58			1,415
Qualys, Inc.*		37			1,402
Stratasys Ltd.*,1		68			1,393
Super Micro Computer, Inc.*		54			1,369
Bottomline Technologies de, Inc.*		56			1,324
Diodes, Inc.*		54			1,299
SPS Commerce, Inc.*		22			1,287
Globant S.A.*		35			1,274
MTS Systems Corp.		23			1,266
Cray, Inc.*		56			1,226
ManTech International Corp. — Class A		34			1,177
Lattice Semiconductor Corp.*		167			1,156
New Relic, Inc.*		31			1,149
Virtusa Corp.*		38			1,148
Monotype Imaging Holdings, Inc.		57			1,146
FormFactor, Inc.*		95			1,126
Box, Inc. — Class A*		67			1,093
Nimble Storage, Inc.*		87			1,088
Quality Systems, Inc.*		70			1,067
Unisys Corp.*		70	��		977
Nanometrics, Inc.*		32			975
Photronics, Inc.*		91			974
CEVA, Inc.*		27			959
Rudolph Technologies, Inc.*		42			941
Pure Storage, Inc. — Class A*,1		95			934
Ultratech, Inc.*		29			859
PROS Holdings, Inc.*		35			847
Vocera Communications, Inc.*		34			844
PDF Solutions, Inc.*		37			837

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Syntel, Inc.		46	$	774
Five9, Inc.*,1		46		757
Exar Corp.*		58		755
Axcelis Technologies, Inc.*		40		752
Ultra Clean Holdings, Inc.*		44		742
Engility Holdings, Inc.*		25		724
Actua Corp.*		51		717
Cotiviti Holdings, Inc.*		17		708
Barracuda Networks, Inc.*		30		693
Cohu, Inc.		36		665
TeleTech Holdings, Inc.		22		651
Xcerra Corp.*		73		649
Silver Spring Networks, Inc.*		53		598
InnerWorkings, Inc.*		54		538
Hortonworks, Inc.*		54		530
MINDBODY, Inc. — Class A*		19		522
LivePerson, Inc.*		74		507
Benefitfocus, Inc.*,1		18		503
IXYS Corp.		34		495
Evolent Health, Inc. — Class A*		22		491
Carbonite, Inc.*		24		487
Bazaarvoice, Inc.*		113		486
Workiva, Inc.*		31		485
Computer Programs & Systems, Inc.1		16		448
Varonis Systems, Inc.*		14		445
Sapiens International Corporation N.V.		33		425
Blackline, Inc.*		14		417
Digi International, Inc.*		35		417
Alpha & Omega Semiconductor Ltd.*		24		413
Digimarc Corp.*		14		378
Brightcove, Inc.*		42		374
Xactly Corp.*		31		369
QAD, Inc. — Class A		13		362
American Software, Inc. — Class A		35		360
Kopin Corp.*		85		349
DSP Group, Inc.*		29		348
Jive Software, Inc.*		80		344
Immersion Corp.*		39		338
Instructure, Inc.*		14		328
Glu Mobile, Inc.*		143		325
Sigma Designs, Inc.*		51		319
EMCORE Corp.		35		315
Model N, Inc.*		30		314
Appfolio, Inc. — Class A*		11		299
pdvWireless, Inc.*		13		284
MobileIron, Inc.*		65		283
Mitek Systems, Inc.*		41		273
Eastman Kodak Co.*		23		265
KEYW Holding Corp.*		28		264
Maxwell Technologies, Inc.*		44		256
Rosetta Stone, Inc.*		26		254
GigPeak, Inc.*		81		249
Impinj, Inc.*,1		8		242
Exa Corp.*		19		241
Planet Payment, Inc.*		60		239
DMC Global, Inc.		19		236
Park City Group, Inc.*		18		222
USA Technologies, Inc.*		51		217
Avid Technology, Inc.*		46		214
Castlight Health, Inc. — Class B*		56		204
Radisys Corp.*		50		200
Agilysys, Inc.*		21		198
Tangoe, Inc.*		37		196
Amber Road, Inc.*		24		185
Guidance Software, Inc.*		31		183
ExOne Co.*,1		15		153
NCI, Inc. — Class A*		8		120
ALJ Regional Holdings, Inc.*		26		97
Cogint, Inc.*		20		93
SecureWorks Corp. — Class A*		8		76
NantHealth, Inc.*,1		10		50
Majesco*		9		46
Total Technology				277,835
Communications - 1.5%
LogMeIn, Inc.		72		7,019
Ciena Corp.*		191		4,509
Proofpoint, Inc.*		58		4,314
InterDigital, Inc.		49		4,228
ViaSat, Inc.*		66		4,212
Nexstar Media Group, Inc. — Class A		60		4,208
Sinclair Broadcast Group, Inc. — Class A1		102		4,131
Finisar Corp.*		150		4,101
GrubHub, Inc.*,1		112		3,683
Viavi Solutions, Inc.*		326		3,495
Meredith Corp.1		52		3,359
Zendesk, Inc.*		112		3,141
TiVo Corp.		162		3,038
DigitalGlobe, Inc.*		88		2,882
WebMD Health Corp. — Class A*		53		2,791
Time, Inc.		142		2,748
Cogent Communications Holdings, Inc.		59		2,539
New York Times Co. — Class A		173		2,491
Plantronics, Inc.		46		2,489
Stamps.com, Inc.*,1		21		2,486
ePlus, Inc.*		18		2,431
Shutterfly, Inc.*		48		2,318
RingCentral, Inc. — Class A*		81		2,293
NETGEAR, Inc.*		46		2,279
Liberty Media Corporation-Liberty Formula One — Class C*		64		2,186
Infinera Corp.*		196		2,005
EW Scripps Co. — Class A*		83		1,946
MSG Networks, Inc. — Class A*		83		1,938
8x8, Inc.*		123		1,875
Shenandoah Telecommunications Co.		65		1,823
Ubiquiti Networks, Inc.*		36		1,809
Wayfair, Inc. — Class A*,1		44		1,782
NIC, Inc.		88		1,777
Ixia*		89		1,749
Houghton Mifflin Harcourt Co.*		171		1,736
Vonage Holdings Corp.*		265		1,675
Imperva, Inc.*		40		1,642

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Gigamon, Inc.*		46	$	1,635
Consolidated Communications Holdings, Inc.1		68		1,593
Scholastic Corp.		37		1,575
Etsy, Inc.*		146		1,552
Oclaro, Inc.*		155		1,522
West Corp.		60		1,465
ADTRAN, Inc.		67		1,390
Windstream Holdings, Inc.1		254		1,384
Gannett Company, Inc.		164		1,374
Gray Television, Inc.*		89		1,291
Q2 Holdings, Inc.*		35		1,219
TrueCar, Inc.*,1		75		1,159
Web.com Group, Inc.*		59		1,139
World Wrestling Entertainment, Inc. — Class A		51		1,133
Iridium Communications, Inc.*,1		114		1,100
Extreme Networks, Inc.*		144		1,081
ATN International, Inc.		15		1,056
Cincinnati Bell, Inc.*		59		1,044
Liberty Media Corporation-Liberty Braves — Class C*		44		1,041
Shutterstock, Inc.*,1		25		1,034
Liberty Media Corporation-Liberty Media — Class A*		31		1,014
Blucora, Inc.*		55		952
Chegg, Inc.*,1		111		937
GTT Communications, Inc.*		36		877
ORBCOMM, Inc.*		90		860
Gogo, Inc.*		78		858
Perficient, Inc.*		49		851
Quotient Technology, Inc.*		89		850
HealthStream, Inc.*		35		848
CalAmp Corp.*		50		840
New Media Investment Group, Inc.		58		824
Globalstar, Inc.*		506		810
General Communication, Inc. — Class A*		37		770
MDC Partners, Inc. — Class A		72		677
Loral Space & Communications, Inc.*		17		670
Endurance International Group Holdings, Inc.*		83		652
Boingo Wireless, Inc.*		50		650
Bankrate, Inc.*		66		637
Harmonic, Inc.*		106		631
XO Group, Inc.*		34		585
ShoreTel, Inc.*		93		572
A10 Networks, Inc.*		62		567
VASCO Data Security International, Inc.*		42		567
Entravision Communications Corp. — Class A		90		558
Spok Holdings, Inc.		28		532
tronc, Inc.*		37		515
Entercom Communications Corp. — Class A1		36		515
Straight Path Communications, Inc. — Class B*,1		14		504
Trade Desk, Inc. — Class A*		13		485
FairPoint Communications, Inc.*		29		481
FTD Companies, Inc.*		23		463
Lumos Networks Corp.*		26		460
Comtech Telecommunications Corp.		31		457
Sonus Networks, Inc.*		67		442
RetailMeNot, Inc.*		54		437
Lands’ End, Inc.*		20		429
Daily Journal Corp.*		2		429
Calix, Inc.*		58		421
Acacia Communications, Inc.*,1		7		410
Rapid7, Inc.*		27		404
Silicom Ltd.		8		397
Telenav, Inc.*		45		389
NeoPhotonics Corp.*		43		387
RigNet, Inc.*		18		386
1-800-Flowers.com, Inc. — Class A*		35		357
ChannelAdvisor Corp.*		32		357
Zix Corp.*		74		356
MeetMe, Inc.*		58		342
Central European Media Enterprises Ltd. — Class A*		106		329
Angie’s List, Inc.*		56		319
Liberty Media Corporation - Liberty Braves — Class A*		13		311
Rubicon Project, Inc.*		52		306
IDT Corp. — Class B		23		293
Overstock.com, Inc.*		17		292
HC2 Holdings, Inc.*		47		291
DHI Group, Inc.*		69		273
Liquidity Services, Inc.*		33		264
Saga Communications, Inc. — Class A		5		255
Limelight Networks, Inc.*		98		253
Clearfield, Inc.*		15		247
Reis, Inc.		12		215
Global Eagle Entertainment, Inc.*		66		211
Preformed Line Products Co.		4		209
Hawaiian Telcom Holdco, Inc.*		9		206
QuinStreet, Inc.*		52		203
TechTarget, Inc.*		22		199
Intelsat S.A.*		44		183
Black Box Corp.		20		179
KVH Industries, Inc.*		21		176
RealNetworks, Inc.*		33		160
Rightside Group Ltd.*		16		159
VirnetX Holding Corp.*,1		67		154
Autobytel, Inc.*		12		150
Townsquare Media, Inc. — Class A*		12		146
Aerohive Networks, Inc.*		33		139
Marchex, Inc. — Class B*		47		128
Salem Media Group, Inc. — Class A		16		119
Radio One, Inc. — Class D*		34		112
Corindus Vascular Robotics, Inc.*		77		101
NII Holdings, Inc.*		74		96
Global Sources Ltd.*		11		91
Numerex Corp. — Class A*		19		91

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Hemisphere Media Group, Inc.*		7	$	82
Value Line, Inc.		2		34
Total Communications				166,303
Basic Materials - 1.0%
Chemours Co.		254		9,780
Olin Corp.		230		7,560
Sensient Technologies Corp.		63		4,994
US Silica Holdings, Inc.		95		4,559
PolyOne Corp.		115		3,920
Minerals Technologies, Inc.		49		3,753
Ingevity Corp.*		60		3,651
Balchem Corp.		44		3,626
HB Fuller Co.		69		3,558
GCP Applied Technologies, Inc.*		99		3,232
Commercial Metals Co.		160		3,060
Cliffs Natural Resources, Inc.*		360		2,956
Chemtura Corp.*		88		2,939
Stillwater Mining Co.*		170		2,936
AK Steel Holding Corp.*		398		2,862
Hecla Mining Co.		528		2,793
Allegheny Technologies, Inc.		152		2,730
Carpenter Technology Corp.		64		2,387
Quaker Chemical Corp.		17		2,238
Stepan Co.		26		2,049
Innospec, Inc.		31		2,007
Kaiser Aluminum Corp.		24		1,917
Coeur Mining, Inc.*		229		1,850
Univar, Inc.*		60		1,839
Ferro Corp.*		115		1,747
Schweitzer-Mauduit International, Inc.		42		1,740
Neenah Paper, Inc.		23		1,718
Tronox Ltd. — Class A		89		1,642
Innophos Holdings, Inc.		26		1,403
PH Glatfelter Co.		61		1,326
Clearwater Paper Corp.*		23		1,288
Kraton Corp.*		41		1,268
A. Schulman, Inc.		39		1,227
Koppers Holdings, Inc.*		28		1,186
Deltic Timber Corp.		14		1,094
Calgon Carbon Corp.		70		1,022
Ferroglobe plc		91		940
Materion Corp.		27		906
Century Aluminum Co.*		69		876
Fairmount Santrol Holdings, Inc.*		116		850
Rayonier Advanced Materials, Inc.		60		807
Schnitzer Steel Industries, Inc. — Class A		36		743
CSW Industrials, Inc.*		19		697
American Vanguard Corp.		39		647
Hawkins, Inc.		13		637
Aceto Corp.		39		617
OMNOVA Solutions, Inc.*		60		594
KMG Chemicals, Inc.		12		553
Kronos Worldwide, Inc.		30		493
Landec Corp.*		37		444
Gold Resource Corp.		69		312
Orchids Paper Products Co.1		12		288
Oil-Dri Corporation of America		7		261
United States Lime & Minerals, Inc.		3		237
Ryerson Holding Corp.*		18		227
Codexis, Inc.*		47		226
AgroFresh Solutions, Inc.*		30		131
Valhi, Inc.		34		112
Total Basic Materials				111,455
Utilities - 0.8%
WGL Holdings, Inc.		71		5,859
IDACORP, Inc.		70		5,806
Southwest Gas Holdings, Inc.		67		5,554
Portland General Electric Co.		124		5,508
ONE Gas, Inc.		72		4,867
Black Hills Corp.		71		4,720
New Jersey Resources Corp.		118		4,673
ALLETE, Inc.		69		4,672
Spire, Inc.		62		4,185
PNM Resources, Inc.		111		4,107
NorthWestern Corp.		67		3,933
South Jersey Industries, Inc.		110		3,922
Avista Corp.		88		3,436
MGE Energy, Inc.		49		3,185
Ormat Technologies, Inc.		55		3,139
El Paso Electric Co.		57		2,879
California Water Service Group		67		2,402
Northwest Natural Gas Co.		38		2,246
American States Water Co.		50		2,215
Otter Tail Corp.		53		2,009
Atlantica Yield plc		81		1,698
NRG Yield, Inc. — Class C		88		1,558
Chesapeake Utilities Corp.		21		1,453
Dynegy, Inc.*		162		1,273
SJW Group		22		1,061
Unitil Corp.		19		856
NRG Yield, Inc. — Class A		49		852
Middlesex Water Co.		22		813
Connecticut Water Service, Inc.		15		797
York Water Co.		18		631
Atlantic Power Corp.*		160		424
Artesian Resources Corp. — Class A		11		358
Delta Natural Gas Company, Inc.		10		304
Consolidated Water Company Ltd.		20		233
EnerNOC, Inc.*		37		222
Spark Energy, Inc. — Class A		6		192
Ameresco, Inc. — Class A*		29		190
Genie Energy Ltd. — Class B		17		123
Global Water Resources, Inc.		11		96
Total Utilities				92,451
Energy - 0.8%
RSP Permian, Inc.*		137		5,675
PDC Energy, Inc.*		78		4,863
Oasis Petroleum, Inc.*		324		4,620
Western Refining, Inc.		112		3,928
SemGroup Corp. — Class A		92		3,312
Callon Petroleum Co.*		237		3,119

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 105

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
Matador Resources Co.*		113	$	2,688
NOW, Inc.*		148		2,510
MRC Global, Inc.*		130		2,383
Oil States International, Inc.*		70		2,320
McDermott International, Inc.*		336		2,268
Carrizo Oil & Gas, Inc.*		78		2,235
SRC Energy, Inc.*		257		2,169
Delek US Holdings, Inc.		86		2,087
Pattern Energy Group, Inc.		92		1,852
Forum Energy Technologies, Inc.*		83		1,718
Unit Corp.*		70		1,692
TerraForm Power, Inc. — Class A*		121		1,497
SEACOR Holdings, Inc.*		21		1,453
Exterran Corp.*		45		1,415
Helix Energy Solutions Group, Inc.*		177		1,375
Green Plains, Inc.		51		1,262
Denbury Resources, Inc.*		487		1,256
Archrock, Inc.		97		1,203
Clayton Williams Energy, Inc.*		8		1,057
Flotek Industries, Inc.*		76		972
Newpark Resources, Inc.*		114		923
Thermon Group Holdings, Inc.*		44		917
Atwood Oceanics, Inc.*,1		96		915
Seadrill Ltd.*		523		863
Sanchez Energy Corp.*,1		86		820
SunCoke Energy, Inc.*		89		797
REX American Resources Corp.*		8		724
Par Pacific Holdings, Inc.*		43		709
Bristow Group, Inc.		46		700
California Resources Corp.*		45		677
Keane Group, Inc.*		43		615
TerraForm Global, Inc. — Class A*		126		605
Matrix Service Co.*		36		594
Jagged Peak Energy, Inc.*		44		574
Renewable Energy Group, Inc.*		53		554
Alon USA Energy, Inc.		44		536
Tesco Corp.*		64		515
FutureFuel Corp.		34		482
Sunrun, Inc.*		87		470
Natural Gas Services Group, Inc.*		17		443
CVR Energy, Inc.1		22		442
Panhandle Oil and Gas, Inc. — Class A		21		403
Era Group, Inc.*		27		358
Westmoreland Coal Co.*		24		348
Plug Power, Inc.*		244		337
Clean Energy Fuels Corp.*		121		309
Geospace Technologies Corp.*		19		308
Ring Energy, Inc.*		28		303
Cobalt International Energy, Inc.*		566		302
Trecora Resources*		27		300
Parker Drilling Co.*		167		292
TETRA Technologies, Inc.*		71		289
Pacific Ethanol, Inc.*		40		274
Evolution Petroleum Corp.		33		264
EP Energy Corp. — Class A*		54		257
Independence Contract Drilling, Inc.*		42		231
Jones Energy, Inc. — Class A*		87		222
Contango Oil & Gas Co.*		30		220
Eclipse Resources Corp.*		79		201
Pioneer Energy Services Corp.*		50		200
Abraxas Petroleum Corp.*		97		196
CARBO Ceramics, Inc.*		15		196
PHI, Inc.*		16		192
Bill Barrett Corp.*		38		173
Willbros Group, Inc.*		61		167
Northern Oil and Gas, Inc.*		64		166
TPI Composites, Inc.*		8		152
Dawson Geophysical Co.*		27		150
W&T Offshore, Inc.*		50		139
EXCO Resources, Inc.*		193		120
Adams Resources & Energy, Inc.		3		112
Vivint Solar, Inc.*		32		90
Erin Energy Corp.*		19		46
Earthstone Energy, Inc.*		3		38
FuelCell Energy, Inc.*		22		30
Total Energy				82,189
Diversified - 0.0%**
HRG Group, Inc.*		164		3,168
Wins Finance Holdings, Inc.*,1		2		290
Total Diversified				3,458
Government - 0.0%**
Banco Latinoamericano de Comercio Exterior S.A. — Class E		42		1,165
Total Common Stocks
(Cost $2,334,423)				2,613,802
WARRANTS†† - 0.0%**
Imperial Holdings, Inc.
$10.75, 10/06/19		4		—
Total Warrants
(Cost $—)				—
RIGHTS††† - 0.0%**
Tobira Therapeutics CVR
Expires 11/02/18		14		—
Trinity Place Holdings, Inc.
Expires 04/03/17		1		—
Omthera Pharmaceuticals, Inc.
Expires 12/31/20		57		—
Dyax Corp.
Expires 01/25/18		714		—
Nexstar Media Group, Inc.
Expires 01/18/19		85		—
Total Rights
(Cost $—)				—

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 57.9%
Guggenheim Strategy Fund II2		134,597	$	3,364,931
Guggenheim Strategy Fund I2		122,323		3,064,195
Total Mutual Funds
(Cost $6,416,279)				6,429,126

	Face Amount
REPURCHASE AGREEMENTS††,3 - 12.2%
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/174	$	596,074	596,074
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		437,253	437,253
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		281,694	281,694
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		43,180	43,180
Total Repurchase Agreements
(Cost $1,358,201)			1,358,201

	Shares
SECURITIES LENDING COLLATERAL†,5 - 0.8%
First American Government Obligations Fund — Class Z, 0.61%6		92,617		92,617
Total Securities Lending Collateral
(Cost $92,617)				92,617
Total Investments - 94.4%
(Cost $10,201,520)			$	10,493,746
Other Assets & Liabilities, net - 5.6%				618,996
Total Net Assets - 100.0%			$	11,112,742

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $1,383,800)		20	$	41,565

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 Russell 2000 Index Swap 0.58%7, Terminating 04/28/17 (Notional Value $8,326,687)		6,008	$	165,042
Goldman Sachs International April 2017 Russell 2000 Index Swap 0.81%7, Terminating 04/27/17 (Notional Value $1,298,157)		937		27,409
Barclays Bank plc April 2017 Russell 2000 Index Swap 0.81%7, Terminating 04/28/17 (Notional Value $3,056,157)		2,205		7,743
(Total Notional Value $12,681,001)			$	200,194

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Affiliated issuer — See Note 10.
3	Repurchase Agreements — See Note 5.
4	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
5	Securities lending collateral — See Note 6.
6	Rate indicated is the 7 day yield as of March 31, 2017.
7	Total Return based on Russell 2000 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	plc — Public Limited Company
	REIT — Real Estate Investment Trust
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
RUSSELL 2000® 1.5x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	2,613,802	$	—	$	—		$	—	$	—		$	2,613,802
Equity Futures Contracts		—		41,565		—			—		—			41,565
Equity Index Swap Agreements		—		—		—			200,194		—			200,194
Mutual Funds		6,429,126		—		—			—		—			6,429,126
Repurchase Agreements		—		—		1,358,201			—		—			1,358,201
Rights		—		—		—			—		—	**		—
Securities Lending Collateral		92,617		—		—			—		—			92,617
Warrants		—		—		—	**		—		—			—
Total	$	9,135,545	$	41,565	$	1,358,201		$	200,194	$	—		$	10,735,505

*	Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.
**	Security has a market value of $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

RUSSELL 2000^® 1.5x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $90,208 of securities loaned (cost $2,427,040)	$	2,706,419
Investments in affiliated issuers, at value (cost $6,416,279)		6,429,126
Repurchase agreements, at value (cost $1,358,201)		1,358,201
Total investments (cost $10,201,520)		10,493,746
Segregated cash with broker		496,000
Unrealized appreciation on swap agreements		200,194
Cash		181
Receivables:
Variation margin		2,500
Securities sold		54,745
Fund shares sold		10,987
Dividends		14,746
Interest		27
Securities lending income		139
Total assets		11,273,265
Liabilities:
Payable for:
Return of securities loaned		92,617
Securities purchased		24,424
Management fees		12,242
Licensing fees		9,931
Fund shares redeemed		7,236
Distribution and service fees		4,360
Transfer agent and administrative fees		3,400
Portfolio accounting fees		1,360
Miscellaneous		4,953
Total liabilities		160,523
Commitments and contingent liabilities (Note 14)		—
Net assets	$	11,112,742
Net assets consist of:
Paid in capital	$	13,650,025
Accumulated net investment loss		(30,945	)
Accumulated net realized loss on investments		(3,040,323	)
Net unrealized appreciation on investments		533,985
Net assets	$	11,112,742
A-Class:
Net assets	$	1,171,912
Capital shares outstanding		20,929
Net asset value per share	$	55.99
Maximum offering price per share(Net asset value divided by 95.25%)	$	58.78
C-Class:
Net assets	$	1,493,602
Capital shares outstanding		30,965
Net asset value per share	$	48.24
H-Class:
Net assets	$	8,447,228
Capital shares outstanding		151,226
Net asset value per share	$	55.86

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $27)	$	67,343
Dividends from securities of affiliated issuers		75,592
Interest		53,163
Income from securities lending, net		1,811
Other income		28
Total investment income		197,937
Expenses:
Management fees		227,184
Transfer agent and administrative fees		63,107
Distribution and service fees:
A-Class		2,246
C-Class		14,544
H-Class		57,225
Portfolio accounting fees		25,242
Custodian fees		3,592
Trustees’ fees*		1,799
Line of credit fees		231
Miscellaneous		52,964
Total expenses		448,134
Net investment loss		(250,197	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		2,405,872
Investments in affiliated issuers		9,969
Swap agreements		(3,178,858	)
Futures contracts		(771,801	)
Net realized loss		(1,534,818	)
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		(394,337	)
Investments in affiliated issuers		12,916
Swap agreements		107,851
Futures contracts		31,263
Net change in unrealized appreciation(depreciation)		(242,307	)
Net realized and unrealized loss		(1,777,125	)
Net decrease in net assets resulting from operations	$	(2,027,322	)

* 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 | 109

RUSSELL 2000^® 1.5x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(250,197	)	$	(232,821	)
Net realized gain (loss) on investments		(1,534,818	)		2,034,802
Net change in unrealized appreciation (depreciation) on investments		(242,307	)		(2,714,053	)
Net decrease in net assets resulting from operations		(2,027,322	)		(912,072	)
Distributions to shareholders from:
Net realized gains
A-Class		(89,296	)		(37,011	)
C-Class		(161,707	)		(125,275	)
H-Class		(799,962	)		(816,653	)
Total distributions to shareholders		(1,050,965	)		(978,939	)
Capital share transactions:
Proceeds from sale of shares
A-Class		1,237,997			4,129,543
C-Class		155,476			123,456
H-Class		656,240,773			340,767,371
Distributions reinvested
A-Class		83,282			34,810
C-Class		159,867			123,960
H-Class		795,517			813,382
Cost of shares redeemed
A-Class		(832,386	)		(4,165,989	)
C-Class		(442,235	)		(293,524	)
H-Class		(653,076,024	)		(350,796,800	)
Net increase (decrease) from capital share transactions		4,322,267			(9,263,791	)
Net increase (decrease) in net assets		1,243,980			(11,154,802	)
Net assets:
Beginning of year		9,868,762			21,023,564
End of year	$	11,112,742		$	9,868,762
Accumulated net investment loss at end of year	$	(30,945	)	$	(35,883	)
Capital share activity:
Shares sold
A-Class		24,980			74,547
C-Class		3,593			2,397
H-Class		12,853,203			6,930,733
Shares issued from reinvestment of distributions
A-Class		1,620			723
C-Class		3,600			2,917
H-Class		15,495			16,938
Shares redeemed
A-Class		(16,769	)		(74,982	)
C-Class		(9,755	)		(6,389	)
H-Class		(12,897,361	)		(7,088,735	)
Net decrease in shares		(21,394	)		(141,851	)

110 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	44.78		$	58.05		$	53.23		$	39.32		$	32.20
Income (loss) from investment operations:
Net investment income (loss)a		(.32	)		(.43	)		(.39	)		(.37	)		(.16	)
Net gain (loss) on investments (realized and unrealized)		16.87			(9.03	)		5.41			14.28			7.28
Total from investment operations		16.55			(9.46	)		5.02			13.91			7.12
Less distributions from:
Net realized gains		(5.34	)		(3.81	)		(.20	)		—			—
Total distributions		(5.34	)		(3.81	)		(.20	)		—			—
Net asset value, end of period	$	55.99		$	44.78		$	58.05		$	53.23		$	39.32
Total Returnb		38.01	%		(16.75	%)		9.48	%		35.38	%		22.11	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,172		$	497		$	627		$	614		$	392
Ratios to average net assets:
Net investment income (loss)		(0.62	%)		(0.85	%)		(0.74	%)		(0.78	%)		(0.51	%)
Total expensesc		1.73	%		1.70	%		1.70	%		1.72	%		1.71	%
Portfolio turnover rate		1,315	%		971	%		830	%		472	%		527	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	39.44		$	52.01		$	48.08		$	35.78		$	29.52
Income (loss) from investment operations:
Net investment income (loss)a		(.63	)		(.73	)		(.70	)		(.65	)		(.34	)
Net gain (loss) on investments (realized and unrealized)		14.77			(8.03	)		4.83			12.95			6.60
Total from investment operations		14.14			(8.76	)		4.13			12.30			6.26
Less distributions from:
Net realized gains		(5.34	)		(3.81	)		(.20	)		—			—
Total distributions		(5.34	)		(3.81	)		(.20	)		—			—
Net asset value, end of period	$	48.24		$	39.44		$	52.01		$	48.08		$	35.78
Total Returnb		36.98	%		(17.36	%)		8.64	%		34.38	%		21.21	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,494		$	1,322		$	1,800		$	1,864		$	1,685
Ratios to average net assets:
Net investment income (loss)		(1.41	%)		(1.62	%)		(1.49	%)		(1.55	%)		(1.15	%)
Total expensesc		2.47	%		2.45	%		2.45	%		2.47	%		2.46	%
Portfolio turnover rate		1,315	%		971	%		830	%		472	%		527	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 111

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	44.75		$	57.94		$	53.13		$	39.24		$	32.13
Income (loss) from investment operations:
Net investment income (loss)a		(.51	)		(.51	)		(.40	)		(.37	)		(.08	)
Net gain (loss) on investments (realized and unrealized)		16.96			(8.87	)		5.41			14.26			7.19
Total from investment operations		16.45			(9.38	)		5.01			13.89			7.11
Less distributions from:
Net realized gains		(5.34	)		(3.81	)		(.20	)		—			—
Total distributions		(5.34	)		(3.81	)		(.20	)		—			—
Net asset value, end of period	$	55.86		$	44.75		$	57.94		$	53.13		$	39.24
Total Returnb		37.80	%		(16.63	%)		9.48	%		35.40	%		22.13	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,447		$	8,049		$	18,596		$	19,056		$	44,955
Ratios to average net assets:
Net investment income (loss)		(0.98	%)		(1.01	%)		(0.76	%)		(0.81	%)		(0.25	%)
Total expensesc		1.73	%		1.70	%		1.70	%		1.72	%		1.71	%
Portfolio turnover rate		1,315	%		971	%		830	%		472	%		527	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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 23.95% performance for the one-year period ended March 31, 2016. Its benchmark, the Russell 2000 Index, returned 26.22% 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 Financials and Information Technology. No sector detracted; the Telecommunications Services sector contributed the least to return, followed by the Consumer Staples sector.

Advanced Micro Devices, Inc., Chemours Co., and Exelisis, Inc. were the largest contributors to the performance of the underlying index for the year. Myriad Genetics, Inc., Abercrombie & Fitch Co. Class A, and Impax Laboratories, Inc. 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.

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)
Advanced Micro Devices, Inc.	0.5%
Chemours Co.	0.3%
Microsemi Corp.	0.3%
Take-Two Interactive Software, Inc.	0.3%
Olin Corp.	0.2%
LogMeIn, Inc.	0.2%
New Residential Investment Corp.	0.2%
Coherent, Inc.	0.2%
Exelixis, Inc.	0.2%
FNB Corp.	0.2%
Top Ten Total	2.6%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 113

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	23.96%	10.43%	5.38%
A-Class Shares with sales charge†	18.08%	9.36%	4.86%
C-Class Shares	23.03%	9.57%	4.53%
C-Class Shares with CDSC‡	22.03%	9.57%	4.53%
H-Class Shares	23.95%	10.41%	5.35%
Russell 2000 Index	26.22%	15.60%	9.44%

*	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.

114 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
COMMON STOCKS† - 83.2%
Financial - 22.7%
New Residential Investment Corp.		6,465	$	109,775
FNB Corp.		6,956		103,434
Prosperity Bancshares, Inc.		1,464		102,055
PrivateBancorp, Inc. — Class A		1,718		101,998
Bank of the Ozarks, Inc.		1,941		100,951
Webster Financial Corp.		2,008		100,480
Investors Bancorp, Inc.		6,509		93,599
Hudson Pacific Properties, Inc.		2,652		91,865
Texas Capital Bancshares, Inc.*		1,077		89,876
IBERIABANK Corp.		1,096		86,694
Umpqua Holdings Corp.		4,835		85,773
Radian Group, Inc.		4,711		84,609
Primerica, Inc.		1,028		84,501
Medical Properties Trust, Inc.		6,443		83,051
GEO Group, Inc.1		1,761		81,658
Hancock Holding Co.		1,792		81,626
Healthcare Realty Trust, Inc.		2,498		81,185
Gramercy Property Trust		3,080		81,004
DuPont Fabros Technology, Inc.		1,632		80,931
CNO Financial Group, Inc.		3,920		80,360
Wintrust Financial Corp.		1,127		77,898
MGIC Investment Corp.*		7,466		75,631
UMB Financial Corp.		982		73,954
Chemical Financial Corp.		1,441		73,707
Sunstone Hotel Investors, Inc.		4,756		72,909
Ellie Mae, Inc.*		717		71,894
Home BancShares, Inc.		2,647		71,654
MB Financial, Inc.		1,658		70,996
Stifel Financial Corp.*		1,403		70,417
First Industrial Realty Trust, Inc.		2,541		67,667
LaSalle Hotel Properties		2,334		67,569
Fulton Financial Corp.		3,762		67,152
Physicians Realty Trust		3,352		66,604
Evercore Partners, Inc. — Class A		854		66,527
Pinnacle Financial Partners, Inc.		1,000		66,450
CoreSite Realty Corp.		733		66,007
Washington Federal, Inc.		1,989		65,836
Sterling Bancorp		2,773		65,720
Education Realty Trust, Inc.		1,608		65,687
Cousins Properties, Inc.		7,833		64,779
Valley National Bancorp		5,419		63,944
United Bankshares, Inc.		1,500		63,375
RLJ Lodging Trust		2,668		62,725
Cathay General Bancorp		1,624		61,192
National Health Investors, Inc.		816		59,266
Essent Group Ltd.*		1,633		59,066
Ryman Hospitality Properties, Inc.		950		58,739
Selective Insurance Group, Inc.		1,244		58,654
WageWorks, Inc.*		799		57,768
BancorpSouth, Inc.		1,895		57,324
Glacier Bancorp, Inc.		1,667		56,561
First Financial Bankshares, Inc.		1,396		55,980
First Citizens BancShares, Inc. — Class A		166		55,671
Great Western Bancorp, Inc.		1,291		54,751
BGC Partners, Inc. — Class A		4,762		54,096
Hope Bancorp, Inc.		2,807		53,810
Colony Starwood Homes		1,570		53,302
Mack-Cali Realty Corp.		1,953		52,614
Acadia Realty Trust		1,748		52,544
Community Bank System, Inc.		942		51,791
Urban Edge Properties		1,963		51,627
Financial Engines, Inc.		1,170		50,953
EastGroup Properties, Inc.		691		50,809
Old National Bancorp		2,907		50,436
Washington Real Estate Investment Trust		1,606		50,236
Lexington Realty Trust		5,030		50,199
RLI Corp.		832		49,936
QTS Realty Trust, Inc. — Class A		1,024		49,920
South State Corp.		557		49,768
Columbia Banking System, Inc.		1,270		49,517
Retail Opportunity Investments Corp.		2,353		49,484
PS Business Parks, Inc.		431		49,462
DiamondRock Hospitality Co.		4,392		48,971
CVB Financial Corp.		2,213		48,885
Blackhawk Network Holdings, Inc.*		1,202		48,801
Enstar Group Ltd.*		249		47,633
Trustmark Corp.		1,475		46,890
First Midwest Bancorp, Inc.		1,933		45,773
Pebblebrook Hotel Trust1		1,565		45,714
Alexander & Baldwin, Inc.		1,020		45,410
Genworth Financial, Inc. — Class A*		11,010		45,362
Hilltop Holdings, Inc.		1,641		45,078
STAG Industrial, Inc.		1,793		44,861
American Equity Investment Life Holding Co.		1,875		44,306
EverBank Financial Corp.		2,253		43,888
Argo Group International Holdings Ltd.		630		42,714
United Community Banks, Inc.		1,535		42,504
International Bancshares Corp.		1,198		42,409
Janus Capital Group, Inc.		3,159		41,698
Astoria Financial Corp.		2,014		41,307
Capitol Federal Financial, Inc.		2,789		40,803
Potlatch Corp.		889		40,627
Kennedy-Wilson Holdings, Inc.		1,805		40,071
Eagle Bancorp, Inc.*		669		39,939
TowneBank		1,223		39,625
LTC Properties, Inc.		825		39,517
LendingClub Corp.*		7,195		39,501
Sabra Health Care REIT, Inc.		1,413		39,465
Kite Realty Group Trust		1,809		38,894
LegacyTexas Financial Group, Inc.		970		38,703
Xenia Hotels & Resorts, Inc.		2,263		38,629
Invesco Mortgage Capital, Inc.		2,463		37,980
Independent Bank Corp.		566		36,790
First Financial Bancorp		1,340		36,783
Monogram Residential Trust, Inc.		3,685		36,739
ServisFirst Bancshares, Inc.		1,008		36,671
Banner Corp.		657		36,555
Renasant Corp.		919		36,475
Horace Mann Educators Corp.		887		36,411

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
American Assets Trust, Inc.		856	$	35,815
Select Income REIT		1,387		35,771
Northwest Bancshares, Inc.		2,102		35,398
Simmons First National Corp. — Class A		641		35,351
Washington Prime Group, Inc.		4,065		35,325
CBL & Associates Properties, Inc.		3,692		35,222
First Merchants Corp.		891		35,034
Global Net Lease, Inc.		1,452		34,964
Kemper Corp.		868		34,633
Provident Financial Services, Inc.		1,336		34,536
NBT Bancorp, Inc.		927		34,364
Ameris Bancorp		745		34,345
BofI Holding, Inc.*,1		1,311		34,256
WesBanco, Inc.		878		33,461
PRA Group, Inc.*		1,008		33,415
Union Bankshares Corp.		948		33,351
Apollo Commercial Real Estate Finance, Inc.		1,736		32,654
FCB Financial Holdings, Inc. — Class A*		655		32,456
Rexford Industrial Realty, Inc.		1,435		32,317
Government Properties Income Trust		1,534		32,107
Chesapeake Lodging Trust		1,300		31,147
BNC Bancorp		888		31,124
Park National Corp.		291		30,613
Summit Hotel Properties, Inc.		1,894		30,266
Four Corners Property Trust, Inc.		1,321		30,158
Westamerica Bancorporation		540		30,148
Pacific Premier Bancorp, Inc.*		770		29,684
Waddell & Reed Financial, Inc. — Class A1		1,737		29,529
Boston Private Financial Holdings, Inc.		1,791		29,372
WSFS Financial Corp.		626		28,765
Kearny Financial Corp.		1,910		28,746
Franklin Street Properties Corp.		2,285		27,741
Redwood Trust, Inc.		1,668		27,705
Terreno Realty Corp.		988		27,664
CenterState Banks, Inc.		1,046		27,091
AMERISAFE, Inc.1		415		26,934
Navigators Group, Inc.		491		26,661
Employers Holdings, Inc.		702		26,641
PennyMac Mortgage Investment Trust		1,491		26,465
CYS Investments, Inc.		3,315		26,354
Agree Realty Corp.		544		26,091
Berkshire Hills Bancorp, Inc.		721		25,992
S&T Bancorp, Inc.		747		25,846
First Commonwealth Financial Corp.		1,938		25,698
Tompkins Financial Corp.		317		25,534
Aircastle Ltd.		1,044		25,192
National General Holdings Corp.		1,059		25,162
Walker & Dunlop, Inc.*		602		25,097
Heartland Financial USA, Inc.		497		24,825
Beneficial Bancorp, Inc.		1,536		24,576
MBIA, Inc.*		2,878		24,377
Ramco-Gershenson Properties Trust		1,723		24,156
Brookline Bancorp, Inc.		1,514		23,694
Seritage Growth Properties1		546		23,560
CareTrust REIT, Inc.		1,380		23,212
Capital Bank Financial Corp. — Class A		534		23,176
RE/MAX Holdings, Inc. — Class A		388		23,066
WisdomTree Investments, Inc.1		2,514		22,827
Lakeland Financial Corp.		527		22,724
Pennsylvania Real Estate Investment Trust		1,494		22,619
Infinity Property & Casualty Corp.		236		22,538
FelCor Lodging Trust, Inc.		2,983		22,402
Stewart Information Services Corp.		500		22,090
Banc of California, Inc.1		1,067		22,087
Safety Insurance Group, Inc.		315		22,082
Capstead Mortgage Corp.		2,089		22,018
HFF, Inc. — Class A		785		21,721
Sandy Spring Bancorp, Inc.		515		21,110
Hanmi Financial Corp.		686		21,095
National Storage Affiliates Trust		870		20,793
City Holding Co.		319		20,569
Cardinal Financial Corp.		687		20,569
Monmouth Real Estate Investment Corp.		1,424		20,320
Alexander’s, Inc.		47		20,297
Piper Jaffray Cos.		317		20,240
United Fire Group, Inc.		473		20,230
Central Pacific Financial Corp.		662		20,217
Enterprise Financial Services Corp.		473		20,055
Maiden Holdings Ltd.		1,432		20,048
State Bank Financial Corp.		765		19,982
First Busey Corp.		677		19,904
Nelnet, Inc. — Class A		443		19,430
Meridian Bancorp, Inc.		1,055		19,307
Hannon Armstrong Sustainable Infrastructure Capital, Inc.		946		19,109
FNFV Group*		1,439		19,067
Stock Yards Bancorp, Inc.		465		18,902
Southside Bancshares, Inc.		563		18,900
St. Joe Co.*		1,105		18,840
United Financial Bancorp, Inc.		1,097		18,660
Ambac Financial Group, Inc.*		985		18,577
Parkway, Inc.		925		18,398
Customers Bancorp, Inc.*		581		18,319
Cohen & Steers, Inc.		457		18,266
ARMOUR Residential REIT, Inc.		804		18,259
Tier REIT, Inc.		1,045		18,141
Greenhill & Company, Inc.		607		17,785
Moelis & Co. — Class A		460		17,710
iStar, Inc.*		1,500		17,700
Universal Insurance Holdings, Inc.1		715		17,518
Third Point Reinsurance Ltd.*		1,445		17,485
Universal Health Realty Income Trust		271		17,480
Altisource Residential Corp.		1,145		17,461
Lakeland Bancorp, Inc.		879		17,228
First Interstate BancSystem, Inc. — Class A		431		17,089
National Bank Holdings Corp. — Class A		525		17,063
New Senior Investment Group, Inc.		1,669		17,024
Hersha Hospitality Trust		905		17,005
MTGE Investment Corp.		1,006		16,851
MainSource Financial Group, Inc.		505		16,630
Northfield Bancorp, Inc.		920		16,578

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Flushing Financial Corp.		607	$	16,310
Chatham Lodging Trust		821		16,215
Washington Trust Bancorp, Inc.		326		16,072
1st Source Corp.		342		16,057
Encore Capital Group, Inc.*		521		16,047
Heritage Financial Corp.		645		15,964
Meta Financial Group, Inc.		180		15,930
Cass Information Systems, Inc.		240		15,864
TriCo Bancshares		443		15,740
OceanFirst Financial Corp.		558		15,722
Investors Real Estate Trust		2,650		15,714
Houlihan Lokey, Inc.		456		15,709
InfraREIT, Inc.		871		15,678
TrustCo Bank Corp. NY		1,997		15,676
Independent Bank Group, Inc.		243		15,625
Silver Bay Realty Trust Corp.		727		15,608
KCG Holdings, Inc. — Class A*		873		15,566
Seacoast Banking Corporation of Florida*		648		15,539
ConnectOne Bancorp, Inc.		639		15,496
BancFirst Corp.		171		15,373
Community Trust Bancorp, Inc.		333		15,235
HomeStreet, Inc.*		544		15,205
National Western Life Group, Inc. — Class A1		49		14,904
New York Mortgage Trust, Inc. REIT		2,406		14,845
PHH Corp.*		1,159		14,754
Camden National Corp.		334		14,709
First BanCorp*		2,602		14,701
German American Bancorp, Inc.		310		14,675
Investment Technology Group, Inc.		720		14,580
Getty Realty Corp.		573		14,480
Bryn Mawr Bank Corp.		364		14,378
Oritani Financial Corp.		844		14,348
Preferred Bank/Los Angeles CA		265		14,220
Greenlight Capital Re Ltd. — Class A*		642		14,188
Easterly Government Properties, Inc.		712		14,090
CU Bancorp*		355		14,076
FBL Financial Group, Inc. — Class A		215		14,072
Univest Corporation of Pennsylvania		542		14,038
NorthStar Realty Europe Corp.		1,209		14,012
Park Sterling Corp.		1,128		13,886
Dime Community Bancshares, Inc.		684		13,885
CoBiz Financial, Inc.		814		13,675
Bridge Bancorp, Inc.		390		13,650
PJT Partners, Inc. — Class A		388		13,615
James River Group Holdings Ltd.		312		13,372
Ladder Capital Corp. — Class A		926		13,371
OM Asset Management plc		877		13,260
Urstadt Biddle Properties, Inc. — Class A		640		13,158
First Potomac Realty Trust		1,268		13,035
Diamond Hill Investment Group, Inc.		67		13,035
Flagstar Bancorp, Inc.*		458		12,911
Saul Centers, Inc.		209		12,879
Virtus Investment Partners, Inc.		120		12,708
First of Long Island Corp.		468		12,659
First Bancorp		431		12,624
INTL FCStone, Inc.*		329		12,489
Forestar Group, Inc.*		911		12,435
Stonegate Bank		262		12,338
NMI Holdings, Inc. — Class A*		1,080		12,312
Ocwen Financial Corp.*		2,201		12,039
Mercantile Bank Corp.		348		11,971
Great Southern Bancorp, Inc.		234		11,817
Independence Realty Trust, Inc.		1,250		11,713
Anworth Mortgage Asset Corp.		2,094		11,622
Horizon Bancorp		429		11,248
TriState Capital Holdings, Inc.*		480		11,208
OFG Bancorp1		946		11,163
Nationstar Mortgage Holdings, Inc.*		708		11,158
Pacific Continental Corp.		455		11,148
Peoples Bancorp, Inc.		351		11,113
AG Mortgage Investment Trust, Inc.		614		11,083
QCR Holdings, Inc.		260		11,011
Ashford Hospitality Trust, Inc.		1,710		10,893
Farmer Mac — Class C		188		10,823
Bar Harbor Bankshares		324		10,701
Gladstone Commercial Corp.		517		10,686
Armada Hoffler Properties, Inc.		749		10,404
First Financial Corp.		218		10,355
Southwest Bancorp, Inc.		395		10,329
Peapack Gladstone Financial Corp.1		344		10,179
Fidelity Southern Corp.		454		10,161
Waterstone Financial, Inc.		556		10,147
Financial Institutions, Inc.		303		9,984
CatchMark Timber Trust, Inc. — Class A		850		9,792
Blue Hills Bancorp, Inc.		539		9,621
State National Companies, Inc.		667		9,605
First Defiance Financial Corp.		192		9,506
NexPoint Residential Trust, Inc.		393		9,495
Virtu Financial, Inc. — Class A		551		9,367
Access National Corp.1		312		9,366
Westwood Holdings Group, Inc.		175		9,347
State Auto Financial Corp.		338		9,278
Altisource Portfolio Solutions S.A.*,1		252		9,274
Live Oak Bancshares, Inc.		428		9,266
Independent Bank Corp.		445		9,212
Cedar Realty Trust, Inc.		1,805		9,061
Republic First Bancorp, Inc.*		1,089		9,039
First Foundation, Inc.*		577		8,949
Allegiance Bancshares, Inc.*		240		8,928
CorEnergy Infrastructure Trust, Inc.		261		8,817
Guaranty Bancorp		360		8,766
Western Asset Mortgage Capital Corp.		895		8,744
Triumph Bancorp, Inc.*		338		8,720
HCI Group, Inc.		189		8,615
Enova International, Inc.*		579		8,598
Bank of NT Butterfield & Son Ltd.		268		8,552
First Community Bancshares, Inc.		342		8,540
Franklin Financial Network, Inc.*		220		8,525
HomeTrust Bancshares, Inc.*		362		8,507
United Community Financial Corp.		1,017		8,482
Bank of Marin Bancorp		131		8,430

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Bank Mutual Corp.		892	$	8,385
Arrow Financial Corp.		247		8,373
Cowen Group, Inc. — Class A*		558		8,342
UMH Properties, Inc.		547		8,320
Whitestone REIT — Class B		595		8,235
Green Bancorp, Inc.*		453		8,063
Heritage Commerce Corp.		570		8,037
West Bancorporation, Inc.		347		7,964
Nicolet Bankshares, Inc.*		166		7,858
Ares Commercial Real Estate Corp.		587		7,854
Marcus & Millichap, Inc.*		318		7,816
Farmers National Banc Corp.		543		7,792
Clifton Bancorp, Inc.		479		7,755
Carolina Financial Corp.		253		7,590
First Connecticut Bancorp, Inc.		306		7,589
Opus Bank		375		7,556
Citizens, Inc.*		1,016		7,549
RMR Group, Inc. — Class A		152		7,524
People’s Utah Bancorp		284		7,512
Heritage Insurance Holdings, Inc.		581		7,419
Republic Bancorp, Inc. — Class A		211		7,256
CNB Financial Corp.		303		7,239
Fidelity & Guaranty Life		260		7,228
Atlantic Capital Bancshares, Inc.*		379		7,182
Old Second Bancorp, Inc.		628		7,065
Global Indemnity Ltd*		183		7,044
Arlington Asset Investment Corp. — Class A		494		6,980
OneBeacon Insurance Group Ltd. — Class A		436		6,976
Sierra Bancorp		254		6,967
Dynex Capital, Inc.		981		6,955
Enterprise Bancorp, Inc.		200		6,952
World Acceptance Corp.*		133		6,887
Preferred Apartment Communities, Inc. — Class A		516		6,816
GAIN Capital Holdings, Inc.		816		6,797
National Commerce Corp.*		185		6,771
One Liberty Properties, Inc.		289		6,751
American National Bankshares, Inc.		179		6,668
Community Healthcare Trust, Inc.		276		6,596
Farmers Capital Bank Corp.		161		6,504
City Office REIT, Inc.		534		6,488
Resource Capital Corp.		662		6,468
WMIH Corp.*		4,440		6,438
RAIT Financial Trust		2,008		6,426
Farmland Partners, Inc.		569		6,356
Acacia Research Corp.*		1,092		6,279
Peoples Financial Services Corp.		150		6,270
MidWestOne Financial Group, Inc.		180		6,172
Merchants Bancshares, Inc.		126		6,136
HarborOne Bancorp, Inc.*		320		6,077
First Bancorp, Inc.		222		6,050
United Insurance Holdings Corp.		375		5,981
Orchid Island Capital, Inc.1		597		5,964
Citizens & Northern Corp.		256		5,960
Charter Financial Corp.		298		5,862
First Mid-Illinois Bancshares, Inc.		173		5,854
Western New England Bancorp, Inc.		548		5,754
Veritex Holdings, Inc.*		204		5,736
Bluerock Residential Growth REIT, Inc.		465		5,724
Ames National Corp.		187		5,722
Macatawa Bank Corp.		578		5,711
Sun Bancorp, Inc.		234		5,710
Bancorp, Inc.*		1,099		5,605
National Bankshares, Inc.		149		5,595
Safeguard Scientifics, Inc.*		440		5,588
FRP Holdings, Inc.*		138		5,520
Ladenburg Thalmann Financial Services, Inc.*		2,211		5,483
Ashford Hospitality Prime, Inc.		507		5,379
Cascade Bancorp*		687		5,297
On Deck Capital, Inc.*		1,049		5,287
NewStar Financial, Inc.		498		5,269
Old Line Bancshares, Inc.		183		5,212
WashingtonFirst Bankshares, Inc.		185		5,180
Territorial Bancorp, Inc.		166		5,174
FB Financial Corp.*		146		5,163
Capital City Bank Group, Inc.		240		5,134
Hingham Institution for Savings		29		5,129
EMC Insurance Group, Inc.		182		5,107
PennyMac Financial Services, Inc. — Class A*		297		5,064
MedEquities Realty Trust, Inc.		449		5,033
BSB Bancorp, Inc.*		176		4,972
Investors Title Co.		31		4,903
BankFinancial Corp.		332		4,821
Consolidated-Tomoka Land Co.		90		4,819
Baldwin & Lyons, Inc. — Class B		197		4,817
Federated National Holding Co.		275		4,793
eHealth, Inc.*		394		4,744
Kinsale Capital Group, Inc.		146		4,678
Marlin Business Services Corp.		181		4,661
Codorus Valley Bancorp, Inc.		177		4,586
LCNB Corp.		192		4,579
Shore Bancshares, Inc.		274		4,579
First Business Financial Services, Inc.		176		4,569
Southern Missouri Bancorp, Inc.		128		4,547
Regional Management Corp.*		231		4,488
Trupanion, Inc.*,1		315		4,479
Northrim BanCorp, Inc.		148		4,447
Penns Woods Bancorp, Inc.		102		4,432
MBT Financial Corp.		389		4,415
Bankwell Financial Group, Inc.		125		4,299
Premier Financial Bancorp, Inc.		204		4,290
Home Bancorp, Inc.		126		4,253
Great Ajax Corp.		325		4,241
Southern National Bancorp of Virginia, Inc.		245		4,148
Xenith Bankshares, Inc.*		163		4,135
Southern First Bancshares, Inc.*		126		4,114
Century Bancorp, Inc. — Class A		65		3,954
Equity Bancshares, Inc. — Class A*		124		3,939

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Summit Financial Group, Inc.		182	$	3,920
Central Valley Community Bancorp		191		3,916
Owens Realty Mortgage, Inc.		219		3,898
First Internet Bancorp		129		3,806
First Community Financial Partners, Inc.*		297		3,787
ACNB Corp.		131		3,779
MutualFirst Financial, Inc.		119		3,754
Stratus Properties, Inc.		136		3,726
First Northwest Bancorp*		240		3,720
Bear State Financial, Inc.		393		3,694
Oppenheimer Holdings, Inc. — Class A		216		3,694
Union Bankshares, Inc.		85		3,651
Tiptree, Inc. — Class A		500		3,650
Orrstown Financial Services, Inc.		162		3,621
Associated Capital Group, Inc. — Class A		99		3,579
Trinity Place Holdings, Inc.*,1		478		3,494
SI Financial Group, Inc.		243		3,414
Hallmark Financial Services, Inc.*		305		3,370
First Financial Northwest, Inc.		188		3,322
C&F Financial Corp.		71		3,287
Donegal Group, Inc. — Class A		182		3,207
Atlas Financial Holdings, Inc.*		232		3,167
Pzena Investment Management, Inc. — Class A		320		3,149
County Bancorp, Inc.		105		3,051
Global Medical REIT, Inc.		332		3,015
Independence Holding Co.		156		2,902
GAMCO Investors, Inc. — Class A		96		2,841
Midland States Bancorp, Inc.		81		2,786
Impac Mortgage Holdings, Inc.*		218		2,716
Chemung Financial Corp.		68		2,686
Provident Financial Holdings, Inc.		144		2,686
Crawford & Co. — Class B		262		2,628
ESSA Bancorp, Inc.		178		2,595
Pacific Mercantile Bancorp*		335		2,529
Blue Capital Reinsurance Holdings Ltd.		130		2,509
FBR & Co.		128		2,310
Silvercrest Asset Management Group, Inc. — Class A		154		2,048
Provident Bancorp, Inc.*		97		2,032
Manning & Napier, Inc. — Class A		327		1,864
Real Industry, Inc.*		573		1,633
Hennessy Advisors, Inc.		95		1,597
Greene County Bancorp, Inc.		66		1,541
First NBC Bank Holding Co.*		342		1,368
Medley Management, Inc. — Class A		125		1,038
Paragon Commercial Corp.*		19		1,016
California First National Bancorp		52		842
Fifth Street Asset Management, Inc.		112		515
Griffin Industrial Realty, Inc.		15		464
Walter Investment Management Corp.*		408		441
United Development Funding IV		200		380
Total Financial				11,334,475
Consumer, Non-cyclical - 16.0%
Exelixis, Inc.*		4,973		107,766
TESARO, Inc.*		610		93,862
Masimo Corp.*		894		83,375
HealthSouth Corp.		1,941		83,094
NuVasive, Inc.*		1,084		80,953
Bluebird Bio, Inc.*		877		79,720
Deluxe Corp.		1,070		77,222
Kite Pharma, Inc.*,1		944		74,096
Nektar Therapeutics*		3,112		73,039
PAREXEL International Corp.*		1,149		72,513
Medicines Co.*		1,473		72,030
Snyder’s-Lance, Inc.		1,761		70,985
Grand Canyon Education, Inc.*		983		70,393
Wright Medical Group N.V.*		2,257		70,238
Bright Horizons Family Solutions, Inc.*		960		69,590
Healthcare Services Group, Inc.		1,540		66,359
Chemed Corp.		354		64,671
Prestige Brands Holdings, Inc.*		1,164		64,672
Cantel Medical Corp.		784		62,798
Catalent, Inc.*		2,179		61,709
B&G Foods, Inc.		1,438		57,879
Helen of Troy Ltd.*		613		57,745
Ultragenyx Pharmaceutical, Inc.*		826		55,987
Integra LifeSciences Holdings Corp.*		1,322		55,696
CEB, Inc.		703		55,256
Exact Sciences Corp.*		2,312		54,610
Insulet Corp.*		1,261		54,336
On Assignment, Inc.*		1,113		54,015
ABM Industries, Inc.		1,220		53,191
Lancaster Colony Corp.		411		52,953
Brink’s Co.		985		52,648
Neogen Corp.*,1		797		52,242
Darling Ingredients, Inc.*		3,593		52,170
Horizon Pharma plc*		3,528		52,144
Penumbra, Inc.*,1		601		50,153
Clovis Oncology, Inc.*		780		49,663
Nevro Corp.*		525		49,193
ICU Medical, Inc.*		322		49,168
Sotheby’s*		1,078		49,028
DeVry Education Group, Inc.		1,368		48,496
Ironwood Pharmaceuticals, Inc. — Class A*		2,830		48,280
Cimpress N.V.*,1		549		47,317
Matthews International Corp. — Class A		699		47,288
Owens & Minor, Inc.		1,366		47,264
United Natural Foods, Inc.*		1,085		46,904
Sage Therapeutics, Inc.*		659		46,835
Cardtronics plc — Class A*		986		46,095
Sanderson Farms, Inc.1		438		45,482
Globus Medical, Inc. — Class A*		1,533		45,407
Haemonetics Corp.*		1,119		45,398
J&J Snack Foods Corp.		328		44,464
Ligand Pharmaceuticals, Inc. — Class B*,1		417		44,135
Zeltiq Aesthetics, Inc.*		776		43,153
Molina Healthcare, Inc.*		946		43,137

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Aaron’s, Inc.		1,438	$	42,766
Prothena Corporation plc*		760		42,400
Avon Products, Inc.*		9,636		42,398
Vector Group Ltd.		2,030		42,224
Portola Pharmaceuticals, Inc.*		1,077		42,208
AMN Healthcare Services, Inc.*		1,035		42,020
Advisory Board Co.*		896		41,933
Fresh Del Monte Produce, Inc.		707		41,876
Incorporated Research Holdings, Inc. — Class A*		905		41,494
HealthEquity, Inc.*		943		40,030
Korn/Ferry International		1,253		39,457
Dean Foods Co.		2,004		39,399
Halyard Health, Inc.*		1,024		39,004
Cambrex Corp.*		697		38,370
Universal Corp.		535		37,851
HMS Holdings Corp.*		1,844		37,489
FTI Consulting, Inc.*		908		37,382
NxStage Medical, Inc.*		1,392		37,347
Pacira Pharmaceuticals, Inc.*		797		36,343
Monro Muffler Brake, Inc.		687		35,793
NutriSystem, Inc.		637		35,353
Magellan Health, Inc.*		511		35,285
PRA Health Sciences, Inc.*		529		34,507
WD-40 Co.		308		33,557
Array BioPharma, Inc.*		3,660		32,720
Sarepta Therapeutics, Inc.*		1,097		32,471
Supernus Pharmaceuticals, Inc.*		1,026		32,114
Theravance Biopharma, Inc.*		865		31,849
Air Methods Corp.*		738		31,734
Amedisys, Inc.*		611		31,216
Select Medical Holdings Corp.*		2,334		31,159
Green Dot Corp. — Class A*		933		31,125
Halozyme Therapeutics, Inc.*,1		2,384		30,897
ACCO Brands Corp.*		2,325		30,574
Insperity, Inc.		343		30,407
Travelport Worldwide Ltd.		2,528		29,755
Myriad Genetics, Inc.*		1,477		28,358
Aerie Pharmaceuticals, Inc.*		625		28,344
SpartanNash Co.		808		28,272
FibroGen, Inc.*		1,145		28,224
Boston Beer Company, Inc. — Class A*,1		193		27,917
Natus Medical, Inc.*		711		27,907
Inogen, Inc.*		357		27,689
Spectranetics Corp.*		934		27,203
Merit Medical Systems, Inc.*		941		27,195
Integer Holdings Corp.*		669		26,894
CONMED Corp.		603		26,779
Radius Health, Inc.*		690		26,669
TriNet Group, Inc.*		921		26,617
Repligen Corp.*		739		26,013
Central Garden & Pet Co. — Class A*		732		25,415
TrueBlue, Inc.*		921		25,189
Seaboard Corp.		6		25,017
Cal-Maine Foods, Inc.1		677		24,914
Innoviva, Inc.*		1,768		24,451
Navigant Consulting, Inc.*		1,040		23,774
Insmed, Inc.*		1,354		23,709
TherapeuticsMD, Inc.*,1		3,283		23,638
Abaxis, Inc.		480		23,280
Puma Biotechnology, Inc.*		611		22,729
SUPERVALU, Inc.*		5,817		22,453
Spark Therapeutics, Inc.*		418		22,296
Andersons, Inc.		587		22,247
Amicus Therapeutics, Inc.*		3,116		22,217
EVERTEC, Inc.		1,390		22,101
National Beverage Corp.		256		21,639
Community Health Systems, Inc.*		2,414		21,412
Dermira, Inc.*		627		21,387
Five Prime Therapeutics, Inc.*		590		21,329
MiMedx Group, Inc.*,1		2,236		21,309
Alder Biopharmaceuticals, Inc.*		1,024		21,299
Coca-Cola Bottling Company Consolidated		103		21,220
Capella Education Co.1		247		21,001
Analogic Corp.		272		20,645
Emergent BioSolutions, Inc.*		710		20,618
Calavo Growers, Inc.		338		20,483
Tivity Health, Inc.*		697		20,283
Impax Laboratories, Inc.*		1,602		20,265
Synergy Pharmaceuticals, Inc.*,1		4,302		20,047
Huron Consulting Group, Inc.*		473		19,913
Viad Corp.		440		19,888
Blueprint Medicines Corp.*		495		19,795
Acorda Therapeutics, Inc.*		940		19,740
Cardiovascular Systems, Inc.*		697		19,708
Ensign Group, Inc.		1,044		19,627
Performance Food Group Co.*		819		19,492
Momenta Pharmaceuticals, Inc.*		1,421		18,970
Glaukos Corp.*		366		18,776
Xencor, Inc.*		776		18,562
Strayer Education, Inc.		230		18,513
Paylocity Holding Corp.*		472		18,233
Corcept Therapeutics, Inc.*		1,633		17,898
LHC Group, Inc.*		328		17,679
LendingTree, Inc.*		139		17,424
National Healthcare Corp.		244		17,397
McGrath RentCorp		514		17,255
US Physical Therapy, Inc.		264		17,239
AMAG Pharmaceuticals, Inc.*		763		17,206
Team, Inc.*		632		17,096
BioTelemetry, Inc.*		590		17,081
ZIOPHARM Oncology, Inc.*,1		2,658		16,852
Depomed, Inc.*		1,335		16,754
ICF International, Inc.*		395		16,314
Global Blood Therapeutics, Inc.*,1		435		16,030
Eagle Pharmaceuticals, Inc.*		193		16,007
Quad/Graphics, Inc.		634		16,002
Luminex Corp.		869		15,964
Diplomat Pharmacy, Inc.*		1,000		15,950
Acceleron Pharma, Inc.*		599		15,856
Kindred Healthcare, Inc.		1,843		15,389
OraSure Technologies, Inc.*		1,186		15,335

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Coherus Biosciences, Inc.*		718	$	15,186
Flexion Therapeutics, Inc.*		564		15,177
PharMerica Corp.*		646		15,116
Epizyme, Inc.*		880		15,092
MGP Ingredients, Inc.		274		14,859
CBIZ, Inc.*		1,080		14,634
Versartis, Inc.*		685		14,625
Retrophin, Inc.*		792		14,620
Orthofix International N.V.*,1		383		14,611
Tootsie Roll Industries, Inc.		389		14,520
Progenics Pharmaceuticals, Inc.*		1,523		14,377
K12, Inc.*		739		14,152
Heska Corp.*		134		14,067
Kelly Services, Inc. — Class A		642		14,034
Inter Parfums, Inc.		382		13,962
Loxo Oncology, Inc.*		330		13,886
Immunomedics, Inc.*		2,130		13,781
John B Sanfilippo & Son, Inc.		186		13,613
Atrion Corp.		29		13,578
Lannett Company, Inc.*,1		606		13,544
BioCryst Pharmaceuticals, Inc.*		1,606		13,490
Omeros Corp.*,1		885		13,381
Anika Therapeutics, Inc.*		308		13,380
Quidel Corp.*		587		13,290
Lexicon Pharmaceuticals, Inc.*,1		924		13,250
Ingles Markets, Inc. — Class A		306		13,204
AtriCure, Inc.*		687		13,156
USANA Health Sciences, Inc.*		227		13,075
RPX Corp.*		1,086		13,032
MacroGenics, Inc.*		697		12,964
Genomic Health, Inc.*		409		12,879
Endologix, Inc.*		1,773		12,837
SP Plus Corp.*		378		12,758
Teladoc, Inc.*,1		510		12,750
Kforce, Inc.		536		12,730
Career Education Corp.*,1		1,462		12,719
Meridian Bioscience, Inc.		912		12,586
Providence Service Corp.*		283		12,577
Aimmune Therapeutics, Inc.*,1		574		12,473
Weis Markets, Inc.		209		12,467
Intra-Cellular Therapies, Inc.*		751		12,204
Accelerate Diagnostics, Inc.*,1		504		12,197
GenMark Diagnostics, Inc.*		927		11,884
Heron Therapeutics, Inc.*,1		787		11,805
K2M Group Holdings, Inc.*		562		11,527
Phibro Animal Health Corp. — Class A		410		11,521
CryoLife, Inc.*		689		11,472
NewLink Genetics Corp.*		473		11,399
Amphastar Pharmaceuticals, Inc.*		779		11,296
Vanda Pharmaceuticals, Inc.*		802		11,228
Esperion Therapeutics, Inc.*		313		11,052
Spectrum Pharmaceuticals, Inc.*		1,695		11,018
Laureate Education, Inc. — Class A*		768		10,958
MoneyGram International, Inc.*		647		10,876
Achillion Pharmaceuticals, Inc.*		2,563		10,790
SciClone Pharmaceuticals, Inc.*		1,096		10,741
Keryx Biopharmaceuticals, Inc.*,1		1,726		10,632
Heidrick & Struggles International, Inc.		401		10,566
Enanta Pharmaceuticals, Inc.*		341		10,503
Resources Connection, Inc.		625		10,469
Atara Biotherapeutics, Inc.*		508		10,439
AngioDynamics, Inc.*		590		10,237
Landauer, Inc.		208		10,140
Medifast, Inc.		228		10,116
Rent-A-Center, Inc.1		1,135		10,067
Cross Country Healthcare, Inc.*		701		10,066
Cerus Corp.*		2,215		9,857
Almost Family, Inc.*		201		9,769
Inovio Pharmaceuticals, Inc.*		1,451		9,606
Omega Protein Corp.		479		9,604
Hackett Group, Inc.		491		9,569
Intersect ENT, Inc.*		557		9,553
Cytokinetics, Inc.*		741		9,522
Ennis, Inc.		559		9,503
Foundation Medicine, Inc.*		294		9,482
Weight Watchers International, Inc.*		606		9,435
CorVel Corp.*		216		9,396
TG Therapeutics, Inc.*		806		9,390
Universal American Corp.*		934		9,312
Revance Therapeutics, Inc.*		447		9,298
Lion Biotechnologies, Inc.*		1,234		9,193
NeoGenomics, Inc.*		1,160		9,152
Pacific Biosciences of California, Inc.*		1,756		9,079
La Jolla Pharmaceutical Co.*		304		9,074
Novocure Ltd.*		1,108		8,975
Triple-S Management Corp. — Class B*		510		8,961
Carriage Services, Inc. — Class A		323		8,760
Avexis, Inc.*		114		8,667
Capital Senior Living Corp.*		615		8,647
Ardelyx, Inc.*		683		8,640
Forrester Research, Inc.		217		8,626
STAAR Surgical Co.*		876		8,585
ANI Pharmaceuticals, Inc.*		173		8,565
REGENXBIO, Inc.*		443		8,550
Barrett Business Services, Inc.		155		8,466
Cara Therapeutics, Inc.*,1		460		8,459
Aduro Biotech, Inc.*,1		776		8,342
Accuray, Inc.*		1,743		8,279
Invacare Corp.		693		8,247
Merrimack Pharmaceuticals, Inc.*,1		2,669		8,221
PDL BioPharma, Inc.		3,614		8,204
Central Garden & Pet Co.*		221		8,192
Axovant Sciences Ltd.*		534		7,978
Albany Molecular Research, Inc.*		568		7,969
Surgery Partners, Inc.*		407		7,937
Sangamo Therapeutics, Inc.*		1,519		7,899
Arena Pharmaceuticals, Inc.*		5,362		7,829
American Public Education, Inc.*		339		7,763
CytomX Therapeutics, Inc.*		447		7,720
Paratek Pharmaceuticals, Inc.*		401		7,719
Textainer Group Holdings Ltd.		496		7,589
Novavax, Inc.*		5,905		7,558

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 121

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Rigel Pharmaceuticals, Inc.*		2,280	$	7,547
Celldex Therapeutics, Inc.*		2,090		7,545
Oxford Immunotec Global plc*		486		7,528
Geron Corp.*,1		3,302		7,496
Tetraphase Pharmaceuticals, Inc.*		795		7,306
Karyopharm Therapeutics, Inc.*		567		7,280
LeMaitre Vascular, Inc.		295		7,266
Enzo Biochem, Inc.*		868		7,265
Akebia Therapeutics, Inc.*		786		7,231
PTC Therapeutics, Inc.*		727		7,154
ImmunoGen, Inc.*		1,843		7,132
Revlon, Inc. — Class A*		256		7,130
Teligent, Inc.*		905		7,068
Alarm.com Holdings, Inc.*		225		6,917
Surmodics, Inc.*		283		6,806
Curis, Inc.*		2,440		6,783
Aclaris Therapeutics, Inc.*,1		226		6,739
NanoString Technologies, Inc.*		335		6,656
Tejon Ranch Co.*		304		6,655
Rockwell Medical, Inc.*		1,048		6,560
Organovo Holdings, Inc.*		2,056		6,538
Primo Water Corp.*		477		6,478
BioSpecifics Technologies Corp.*		118		6,466
Otonomy, Inc.*		526		6,444
Advaxis, Inc.*		784		6,405
Adamas Pharmaceuticals, Inc.*		365		6,388
XBiotech, Inc.*,1		382		6,299
Farmer Brothers Co.*		176		6,222
Concert Pharmaceuticals, Inc.*		361		6,159
CRA International, Inc.		174		6,147
Smart & Final Stores, Inc.*		506		6,123
Civitas Solutions, Inc.*		330		6,056
elf Beauty, Inc.*		210		6,047
Agenus, Inc.*		1,598		6,024
AxoGen, Inc.*		575		6,009
Chimerix, Inc.*		933		5,953
Invitae Corp.*		534		5,906
Zogenix, Inc.*		542		5,881
Chefs’ Warehouse, Inc.*		423		5,880
iRhythm Technologies, Inc.*		155		5,828
Exactech, Inc.*,1		228		5,746
Bellicum Pharmaceuticals, Inc.*		459		5,664
Sucampo Pharmaceuticals, Inc. — Class A*,1		513		5,643
Nutraceutical International Corp.		180		5,607
Idera Pharmaceuticals, Inc.*		2,267		5,599
Ignyta, Inc.*		644		5,538
BioTime, Inc.*		1,591		5,489
Insys Therapeutics, Inc.*,1		514		5,402
CAI International, Inc.*		343		5,399
Amplify Snack Brands, Inc.*,1		639		5,368
Limoneira Co.		256		5,353
Medpace Holdings, Inc.*		178		5,313
Cutera, Inc.*		256		5,299
Vectrus, Inc.*		233		5,208
Seneca Foods Corp. — Class A*		144		5,198
Addus HomeCare Corp.*		162		5,184
ServiceSource International, Inc.*		1,334		5,176
Great Lakes Dredge & Dock Corp.*		1,292		5,168
Dynavax Technologies Corp.*		850		5,058
Natera, Inc.*		570		5,056
RTI Surgical, Inc.*		1,256		5,024
CSS Industries, Inc.		187		4,847
RadNet, Inc.*		813		4,797
Natural Health Trends Corp.		163		4,711
Utah Medical Products, Inc.		75		4,673
Franklin Covey Co.*		223		4,505
WaVe Life Sciences Ltd.*		162		4,455
Seres Therapeutics, Inc.*		390		4,395
Collectors Universe, Inc.		164		4,280
OncoMed Pharmaceuticals, Inc.*		464		4,273
Village Super Market, Inc. — Class A		160		4,240
BioScrip, Inc.*		2,459		4,180
Bridgepoint Education, Inc.*		390		4,161
Ocular Therapeutix, Inc.*		442		4,102
Anavex Life Sciences Corp.*		714		4,098
ConforMIS, Inc.*		782		4,082
Neff Corp. — Class A*		208		4,046
MediciNova, Inc.*,1		649		3,888
Aratana Therapeutics, Inc.*		729		3,864
Care.com, Inc.*		307		3,841
Ra Pharmaceuticals, Inc.*		178		3,790
MyoKardia, Inc.*		282		3,708
Craft Brew Alliance, Inc.*		276		3,685
ChemoCentryx, Inc.*		504		3,669
Cempra, Inc.*		976		3,660
National Research Corp. — Class A		183		3,605
Trevena, Inc.*		978		3,589
Stemline Therapeutics, Inc.*		418		3,574
Quorum Health Corp.*		649		3,531
Infinity Pharmaceuticals, Inc.*		1,074		3,469
Voyager Therapeutics, Inc.*		256		3,389
Minerva Neurosciences, Inc.*		416		3,370
Editas Medicine, Inc.*		150		3,348
Edge Therapeutics, Inc.*		355		3,234
American Renal Associates Holdings, Inc.*		191		3,224
Collegium Pharmaceutical, Inc.*		320		3,219
Ascent Capital Group, Inc. — Class A*		223		3,151
Cellular Biomedicine Group, Inc.*		266		3,139
ARC Document Solutions, Inc.*		898		3,098
Reata Pharmaceuticals, Inc. — Class A*		136		3,080
Jounce Therapeutics, Inc.*		140		3,079
Veracyte, Inc.*		334		3,066
AnaptysBio, Inc.*		110		3,053
B. Riley Financial, Inc.		203		3,045
Durect Corp.*		2,760		2,898
InVivo Therapeutics Holdings Corp.*		704		2,851
Athersys, Inc.*		1,665		2,847
Fortress Biotech, Inc.*		746		2,760
Synutra International, Inc.*		461		2,743
Myovant Sciences Ltd.*		230		2,700
Arrowhead Pharmaceuticals, Inc.*		1,449		2,681

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Entellus Medical, Inc.*		180	$	2,484
Egalet Corp.*,1		485		2,474
Neos Therapeutics, Inc.*		341		2,455
Ophthotech Corp.*		667		2,441
AcelRx Pharmaceuticals, Inc.*		774		2,438
Alliance One International, Inc.*		182		2,339
Zafgen, Inc.*		500		2,330
Pfenex, Inc.*		398		2,312
Cidara Therapeutics, Inc.*		282		2,200
Sorrento Therapeutics, Inc.*		551		2,176
Genesis Healthcare, Inc.*		819		2,162
Intellia Therapeutics, Inc.*		153		2,156
Audentes Therapeutics, Inc.*		126		2,147
Information Services Group, Inc.*		679		2,139
Iridex Corp.*		180		2,137
Endocyte, Inc.*		831		2,136
Protagonist Therapeutics, Inc.*		166		2,126
Liberty Tax, Inc.		149		2,123
MannKind Corp.*		1,419		2,100
PFSweb, Inc.*		321		2,096
Vital Therapies, Inc.*		518		2,072
Nobilis Health Corp.*,1		1,214		2,064
Immune Design Corp.*		303		2,060
Natural Grocers by Vitamin Cottage, Inc.*,1		198		2,057
Turning Point Brands, Inc.*		131		2,044
CPI Card Group, Inc.1		459		1,928
Applied Genetic Technologies Corp.*		277		1,911
Nature’s Sunshine Products, Inc.		186		1,860
AAC Holdings, Inc.*		216		1,842
TransEnterix, Inc.*		1,522		1,842
Inventure Foods, Inc.*		415		1,834
Alico, Inc.		69		1,822
Tactile Systems Technology, Inc.*		91		1,724
Asterias Biotherapeutics, Inc.*		496		1,686
ChromaDex Corp.*		626		1,684
T2 Biosystems, Inc.*		319		1,678
Mirati Therapeutics, Inc.*		315		1,638
Syros Pharmaceuticals, Inc.*		102		1,625
Clearside Biomedical, Inc.*		204		1,620
Lifevantage Corp.*		300		1,611
Selecta Biosciences, Inc.*		112		1,604
Bio-Path Holdings, Inc.*		1,935		1,600
Corvus Pharmaceuticals, Inc.*		73		1,516
Cambium Learning Group, Inc.*		293		1,436
GlycoMimetics, Inc.*		261		1,417
Syndax Pharmaceuticals, Inc.*		103		1,413
Lipocine, Inc.*		362		1,412
Regulus Therapeutics, Inc.*		849		1,401
Proteostasis Therapeutics, Inc.*		175		1,369
Titan Pharmaceuticals, Inc.*		412		1,360
Adverum Biotechnologies, Inc.*		503		1,358
NantKwest, Inc.*		365		1,296
OvaScience, Inc.*		686		1,283
TerraVia Holdings, Inc.*		1,718		1,245
ViewRay, Inc.*		145		1,234
Synthetic Biologics, Inc.*		1,765		1,113
PharmAthene, Inc.		1,363		1,106
Lifeway Foods, Inc.*		103		1,105
Aevi Genomic Medicine, Inc.*		594		1,105
vTv Therapeutics, Inc. — Class A*		167		1,094
Senseonics Holdings, Inc.*		608		1,088
Eiger BioPharmaceuticals, Inc.*		91		1,042
CytRx Corp.*		2,310		1,026
Flex Pharma, Inc.*		232		1,021
Axsome Therapeutics, Inc.*		243		948
Agile Therapeutics, Inc.*		290		929
Ampio Pharmaceuticals, Inc.*		1,053		842
Avinger, Inc.*		417		792
iRadimed Corp.*,1		89		792
Inotek Pharmaceuticals Corp.*		382		764
Aptevo Therapeutics, Inc.*		355		731
Trovagene, Inc.*		616		708
Patriot National, Inc.1		238		671
Kadmon Holdings, Inc.*		177		641
Adeptus Health, Inc. — Class A*,1		302		544
Tandem Diabetes Care, Inc.*		407		488
Dimension Therapeutics, Inc.*		267		467
Second Sight Medical Products, Inc.*		311		376
Anthera Pharmaceuticals, Inc.*		861		366
Tokai Pharmaceuticals, Inc.*		216		180
Argos Therapeutics, Inc.*		315		142
Galena Biopharma, Inc.*		231		141
Total Consumer, Non-cyclical				8,018,734
Industrial - 11.7%
Coherent, Inc.*		529		108,784
XPO Logistics, Inc.*		2,142		102,581
Teledyne Technologies, Inc.*		749		94,720
Curtiss-Wright Corp.		969		88,431
EMCOR Group, Inc.		1,325		83,408
Woodward, Inc.		1,159		78,719
Louisiana-Pacific Corp.*		3,154		78,282
Universal Display Corp.		907		78,093
Littelfuse, Inc.		485		77,556
EnerSys		953		75,230
Tech Data Corp.*		766		71,927
SYNNEX Corp.		639		71,530
Kennametal, Inc.1		1,728		67,788
Sanmina Corp.*		1,607		65,244
Belden, Inc.		917		63,447
Dycom Industries, Inc.*		668		62,091
Joy Global, Inc.		2,157		60,936
John Bean Technologies Corp.		680		59,805
Advanced Energy Industries, Inc.*		864		59,236
MasTec, Inc.*		1,448		57,992
Golar LNG Ltd.		2,075		57,956
Summit Materials, Inc. — Class A*		2,321		57,351
Barnes Group, Inc.		1,099		56,422
Esterline Technologies Corp.*		647		55,674
GATX Corp.1		895		54,559
Masonite International Corp.*		664		52,621
KLX, Inc.*		1,156		51,673
Tetra Tech, Inc.		1,264		51,635

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Generac Holdings, Inc.*		1,336	$	49,806
Applied Industrial Technologies, Inc.		795		49,171
Vishay Intertechnology, Inc.		2,985		49,103
RBC Bearings, Inc.*		496		48,157
MSA Safety, Inc.		680		48,070
Moog, Inc. — Class A*		699		47,078
II-VI, Inc.*		1,301		46,901
Hillenbrand, Inc.		1,291		46,282
Knight Transportation, Inc.		1,465		45,929
Trex Company, Inc.*		645		44,757
Itron, Inc.*		732		44,432
Worthington Industries, Inc.		985		44,413
KapStone Paper and Packaging Corp.		1,889		43,636
Granite Construction, Inc.		865		43,414
Franklin Electric Company, Inc.		1,007		43,351
Universal Forest Products, Inc.		434		42,766
Mueller Industries, Inc.		1,239		42,411
Plexus Corp.*		730		42,194
Rexnord Corp.*		1,814		41,867
Mueller Water Products, Inc. — Class A		3,409		40,294
Trinseo S.A.		595		39,924
TopBuild Corp.*		843		39,621
Simpson Manufacturing Company, Inc.		908		39,126
Brady Corp. — Class A		1,001		38,689
Watts Water Technologies, Inc. — Class A		608		37,909
Headwaters, Inc.*		1,591		37,357
Apogee Enterprises, Inc.		621		37,018
Knowles Corp.*		1,932		36,611
Methode Electronics, Inc.		798		36,389
Benchmark Electronics, Inc.*		1,083		34,439
Hub Group, Inc. — Class A*		733		34,011
Actuant Corp. — Class A		1,285		33,860
Rogers Corp.*		394		33,833
AZZ, Inc.		566		33,677
EnPro Industries, Inc.		473		33,659
Swift Transportation Co. — Class A*		1,634		33,563
Exponent, Inc.		559		33,288
ESCO Technologies, Inc.		556		32,304
Fabrinet*		763		32,069
AAON, Inc.		884		31,249
Forward Air Corp.		651		30,968
Greif, Inc. — Class A		560		30,850
Matson, Inc.		946		30,045
Comfort Systems USA, Inc.		812		29,760
Atlas Air Worldwide Holdings, Inc.*		536		29,721
Cubic Corp.		551		29,093
Albany International Corp. — Class A		626		28,827
Gibraltar Industries, Inc.*		690		28,428
Aerojet Rocketdyne Holdings, Inc.*		1,303		28,275
Kaman Corp.		587		28,252
OSI Systems, Inc.*		383		27,955
Standex International Corp.		278		27,841
Tennant Co.		383		27,825
Triumph Group, Inc.		1,079		27,784
Proto Labs, Inc.*,1		539		27,543
Builders FirstSource, Inc.*		1,834		27,327
SPX FLOW, Inc.*		772		26,796
Tutor Perini Corp.*		826		26,267
Astec Industries, Inc.		424		26,074
TASER International, Inc.*,1		1,142		26,026
Werner Enterprises, Inc.		977		25,597
TTM Technologies, Inc.*		1,585		25,566
Greenbrier Companies, Inc.1		593		25,558
Saia, Inc.*		551		24,409
AAR Corp.		723		24,314
American Outdoor Brands Corp.*		1,199		23,752
Chart Industries, Inc.*		669		23,375
Raven Industries, Inc.		794		23,066
Boise Cascade Co.*		854		22,802
Badger Meter, Inc.		613		22,528
Harsco Corp.*		1,763		22,478
Patrick Industries, Inc.*		317		22,475
US Ecology, Inc.		478		22,395
SPX Corp.*		909		22,043
Sturm Ruger & Company, Inc.1		406		21,741
Altra Industrial Motion Corp.		551		21,461
CIRCOR International, Inc.		361		21,458
Multi-Color Corp.		297		21,087
Briggs & Stratton Corp.		929		20,856
TriMas Corp.*		986		20,460
Primoris Services Corp.		881		20,457
Lindsay Corp.1		232		20,444
Encore Wire Corp.		442		20,332
Applied Optoelectronics, Inc.*		361		20,270
US Concrete, Inc.*		313		20,204
Heartland Express, Inc.		1,007		20,190
Lydall, Inc.*		363		19,457
Argan, Inc.		292		19,316
Ship Finance International Ltd.1		1,311		19,272
GoPro, Inc. — Class A*,1		2,210		19,227
General Cable Corp.		1,061		19,045
Caesarstone Ltd.*		522		18,923
Continental Building Products, Inc.*		771		18,890
Sun Hydraulics Corp.		509		18,380
Novanta, Inc.*		692		18,373
Federal Signal Corp.		1,312		18,119
JELD-WEN Holding, Inc.*		548		18,002
Nordic American Tankers Ltd.1		2,158		17,652
Aegion Corp. — Class A*		765		17,526
Air Transport Services Group, Inc.*		1,062		17,045
AVX Corp.		1,018		16,675
Advanced Drainage Systems, Inc.		760		16,644
TimkenSteel Corp.*		863		16,319
Griffon Corp.		661		16,294
Global Brass & Copper Holdings, Inc.		462		15,893
Scorpio Tankers, Inc.		3,576		15,877
Manitowoc Company, Inc.*		2,782		15,857
Alamo Group, Inc.		206		15,695
Quanex Building Products Corp.1		749		15,167
Chase Corp.		155		14,787
CTS Corp.		685		14,591
NN, Inc.		573		14,440

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
ArcBest Corp.		538	$	13,988
Kadant, Inc.		234		13,888
Insteel Industries, Inc.		383		13,842
GasLog Ltd.		895		13,738
Astronics Corp.*		423		13,422
Echo Global Logistics, Inc.*		628		13,408
MYR Group, Inc.*		327		13,407
FARO Technologies, Inc.*		363		12,977
Aerovironment, Inc.*		448		12,557
Gorman-Rupp Co.		385		12,089
Casella Waste Systems, Inc. — Class A*		846		11,937
Marten Transport Ltd.		503		11,795
DXP Enterprises, Inc.*		307		11,626
Hyster-Yale Materials Handling, Inc.		206		11,616
Kratos Defense & Security Solutions, Inc.*		1,455		11,320
Scorpio Bulkers, Inc.*		1,222		11,242
PGT Innovations, Inc.*		1,045		11,234
National Presto Industries, Inc.		108		11,038
Advanced Disposal Services, Inc.*		486		10,984
Stoneridge, Inc.*		587		10,648
Columbus McKinnon Corp.		425		10,549
Kimball Electronics, Inc.*		614		10,407
Haynes International, Inc.		272		10,369
NCI Building Systems, Inc.*		595		10,204
Frontline Ltd.1		1,492		10,056
Teekay Corp.		1,072		9,809
Tredegar Corp.		556		9,758
Ply Gem Holdings, Inc.*		482		9,495
Armstrong Flooring, Inc.*		512		9,431
Babcock & Wilcox Enterprises, Inc.*		1,000		9,340
DHT Holdings, Inc.		2,007		8,971
NVE Corp.		105		8,693
Multi Packaging Solutions International Ltd.*		464		8,329
Greif, Inc. — Class B		125		8,163
Mesa Laboratories, Inc.		66		8,098
Mistras Group, Inc.*		375		8,018
Forterra, Inc.*		404		7,878
YRC Worldwide, Inc.*		712		7,839
VSE Corp.		188		7,670
Park Electrochemical Corp.		423		7,555
Myers Industries, Inc.		475		7,529
TRC Companies, Inc.*		407		7,102
GP Strategies Corp.*		278		7,033
American Railcar Industries, Inc.1		170		6,987
Atkore International Group, Inc.*		265		6,964
Control4 Corp.*		440		6,948
CECO Environmental Corp.		640		6,726
Park-Ohio Holdings Corp.		186		6,687
Powell Industries, Inc.		190		6,544
Ducommun, Inc.*		227		6,535
Energy Recovery, Inc.*		753		6,265
NV5 Global, Inc.*		161		6,054
Milacron Holdings Corp.*		318		5,918
Vicor Corp.*		361		5,812
International Seaways, Inc.*		301		5,755
Dorian LPG Ltd.*		530		5,581
LSI Industries, Inc.		520		5,247
Teekay Tankers Ltd. — Class A		2,548		5,223
Bel Fuse, Inc. — Class B		202		5,161
Aqua Metals, Inc.*		260		5,080
Energous Corp.*,1		324		5,054
Ardmore Shipping Corp.1		617		4,967
Gener8 Maritime, Inc.*		859		4,871
Covenant Transportation Group, Inc. — Class A*		259		4,869
Graham Corp.		209		4,807
Roadrunner Transportation Systems, Inc.*		669		4,596
Orion Group Holdings, Inc.*		589		4,400
ZAGG, Inc.*		603		4,342
Hurco Companies, Inc.		139		4,323
Sparton Corp.*		205		4,303
Costamare, Inc.		638		4,249
LSB Industries, Inc.*,1		452		4,240
Electro Scientific Industries, Inc.*		601		4,189
Vishay Precision Group, Inc.*		264		4,171
Radiant Logistics, Inc.*		826		4,130
Celadon Group, Inc.		596		3,904
Heritage-Crystal Clean, Inc.*		279		3,822
Olympic Steel, Inc.		200		3,712
UFP Technologies, Inc.*		141		3,652
Fluidigm Corp.*		636		3,619
Layne Christensen Co.*		396		3,501
FreightCar America, Inc.		265		3,320
Overseas Shipholding Group, Inc. — Class A*		845		3,262
Hornbeck Offshore Services, Inc.*,1		711		3,150
Lawson Products, Inc.*		138		3,098
IES Holdings, Inc.*		171		3,095
Omega Flex, Inc.		64		3,059
Navios Maritime Acquisition Corp.		1,764		3,034
Ichor Holdings Ltd.*		148		2,935
Hill International, Inc.*		707		2,934
Hardinge, Inc.		255		2,866
Allied Motion Technologies, Inc.		136		2,734
AquaVenture Holdings Ltd.*		157		2,680
Ampco-Pittsburgh Corp.		187		2,627
Universal Logistics Holdings, Inc.		182		2,612
Gencor Industries, Inc.*		170		2,542
Willis Lease Finance Corp.*		85		1,900
American Superconductor Corp.*		256		1,756
Handy & Harman Ltd.*		64		1,741
Astronics Corp. — Class B*		46		1,454
USA Truck, Inc.*		178		1,308
Tidewater, Inc.*		1,035		1,190
NL Industries, Inc.*		182		1,174
Power Solutions International, Inc.*		105		1,059
PAM Transportation Services, Inc.*		52		847
Total Industrial				5,847,397

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Consumer, Cyclical - 9.4%
Jack in the Box, Inc.		714	$	72,629
Tenneco, Inc.		1,159		72,345
Cracker Barrel Old Country Store, Inc.1		420		66,885
Texas Roadhouse, Inc. — Class A		1,450		64,569
Beacon Roofing Supply, Inc.*		1,308		64,300
Cheesecake Factory, Inc.		994		62,980
Dana, Inc.		3,261		62,970
Buffalo Wild Wings, Inc.*		379		57,892
Cooper Tire & Rubber Co.		1,212		53,752
Hawaiian Holdings, Inc.*		1,154		53,603
Wolverine World Wide, Inc.		2,120		52,937
Office Depot, Inc.		11,226		52,368
Steven Madden Ltd.*		1,347		51,927
ILG, Inc.		2,475		51,875
LCI Industries		519		51,796
FirstCash, Inc.		1,041		51,165
American Eagle Outfitters, Inc.		3,645		51,138
Five Below, Inc.*		1,172		50,759
Dave & Buster’s Entertainment, Inc.*		829		50,644
Anixter International, Inc.*		634		50,276
Children’s Place, Inc.1		410		49,220
Marriott Vacations Worldwide Corp.		491		49,066
Dorman Products, Inc.*		580		47,635
Papa John’s International, Inc.		594		47,544
Big Lots, Inc.1		975		47,463
Churchill Downs, Inc.		295		46,861
UniFirst Corp.		331		46,819
Allegiant Travel Co. — Class A		289		46,312
HNI Corp.		991		45,676
Bloomin’ Brands, Inc.		2,310		45,576
Lithia Motors, Inc. — Class A		520		44,538
IMAX Corp.*		1,288		43,792
Deckers Outdoor Corp.*		710		42,408
Herman Miller, Inc.		1,309		41,299
TRI Pointe Group, Inc.*		3,258		40,856
Chico’s FAS, Inc.		2,854		40,526
PriceSmart, Inc.		438		40,384
Boyd Gaming Corp.*		1,806		39,750
RH*,1		847		39,182
iRobot Corp.*,1		587		38,824
SkyWest, Inc.		1,099		37,641
AMC Entertainment Holdings, Inc. — Class A		1,162		36,545
KB Home		1,825		36,281
Cooper-Standard Holdings, Inc.*		324		35,941
Columbia Sportswear Co.		590		34,662
Group 1 Automotive, Inc.		455		33,706
Penn National Gaming, Inc.*		1,801		33,192
Steelcase, Inc. — Class A		1,883		31,540
American Axle & Manufacturing Holdings, Inc.*		1,677		31,494
Gentherm, Inc.*		798		31,322
Core-Mark Holding Company, Inc.		999		31,158
Meritor, Inc.*		1,800		30,834
Meritage Homes Corp.*		837		30,802
DSW, Inc. — Class A		1,472		30,441
Mobile Mini, Inc.		969		29,555
La-Z-Boy, Inc.		1,074		28,998
Bob Evans Farms, Inc.		434		28,154
American Woodmark Corp.*		302		27,723
MDC Holdings, Inc.		909		27,315
BMC Stock Holdings, Inc.*		1,206		27,256
Interface, Inc. — Class A		1,415		26,956
Scientific Games Corp. — Class A*		1,136		26,866
Wabash National Corp.1		1,294		26,773
SeaWorld Entertainment, Inc.		1,463		26,729
Navistar International Corp.*		1,083		26,663
Asbury Automotive Group, Inc.*		437		26,264
HSN, Inc.		684		25,376
La Quinta Holdings, Inc.*		1,856		25,093
Knoll, Inc.		1,051		25,024
Genesco, Inc.*		450		24,953
Select Comfort Corp.*		1,004		24,889
Caleres, Inc.		937		24,756
Sonic Corp.		970		24,599
Pinnacle Entertainment, Inc.*		1,190		23,229
Installed Building Products, Inc.*		440		23,210
Standard Motor Products, Inc.		470		23,096
Callaway Golf Co.		2,062		22,825
Triton International Ltd.		877		22,618
ClubCorp Holdings, Inc.		1,408		22,598
Liberty TripAdvisor Holdings, Inc. — Class A*		1,588		22,391
Belmond Ltd. — Class A*		1,831		22,155
ScanSource, Inc.*		549		21,548
Cavco Industries, Inc.*		185		21,534
Rush Enterprises, Inc. — Class A*		644		21,304
International Speedway Corp. — Class A		576		21,283
Universal Electronics, Inc.*		310		21,235
DineEquity, Inc.		383		20,843
G-III Apparel Group Ltd.*		940		20,577
Denny’s Corp.*		1,658		20,509
Oxford Industries, Inc.		332		19,010
BJ’s Restaurants, Inc.*		458		18,503
Taylor Morrison Home Corp. — Class A*		867		18,484
Abercrombie & Fitch Co. — Class A		1,490		17,776
Winnebago Industries, Inc.		586		17,141
National CineMedia, Inc.		1,346		17,000
H&E Equipment Services, Inc.		690		16,919
Ethan Allen Interiors, Inc.		540		16,551
Red Robin Gourmet Burgers, Inc.*		281		16,424
Ascena Retail Group, Inc.*		3,784		16,120
Caesars Acquisition Co. — Class A*		1,042		16,047
Fossil Group, Inc.*,1		917		16,002
Tailored Brands, Inc.		1,069		15,971
Guess?, Inc.		1,338		14,919
Douglas Dynamics, Inc.		484		14,835
Express, Inc.*		1,626		14,813
Ollie’s Bargain Outlet Holdings, Inc.*		442		14,807
AdvancePierre Foods Holdings, Inc.		474		14,775
Hibbett Sports, Inc.*		500		14,750

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Red Rock Resorts, Inc. — Class A		657	$	14,572
Isle of Capri Casinos, Inc.*		547		14,419
Fiesta Restaurant Group, Inc.*		582		14,084
Fox Factory Holding Corp.*		490		14,063
Superior Industries International, Inc.		549		13,917
Wesco Aircraft Holdings, Inc.*		1,218		13,885
Ruth’s Hospitality Group, Inc.		689		13,814
Tile Shop Holdings, Inc.		712		13,707
Kimball International, Inc. — Class B		808		13,332
Marcus Corp.		407		13,065
Finish Line, Inc. — Class A		914		13,006
Francesca’s Holdings Corp.*		836		12,833
Barnes & Noble, Inc.		1,382		12,784
M/I Homes, Inc.*		518		12,691
Pier 1 Imports, Inc.1		1,771		12,680
Modine Manufacturing Co.*		1,030		12,566
Essendant, Inc.		815		12,347
SiteOne Landscape Supply, Inc.*		254		12,296
Motorcar Parts of America, Inc.*		400		12,292
Cato Corp. — Class A		558		12,254
Sonic Automotive, Inc. — Class A		611		12,251
Nautilus, Inc.*		670		12,228
Tower International, Inc.		449		12,168
Lumber Liquidators Holdings, Inc.*,1		576		12,090
Eldorado Resorts, Inc.*		626		11,847
Caesars Entertainment Corp.*		1,234		11,785
MarineMax, Inc.*		540		11,691
Buckle, Inc.1		626		11,644
LGI Homes, Inc.*,1		338		11,462
Shake Shack, Inc. — Class A*		343		11,456
Crocs, Inc.*		1,612		11,397
GNC Holdings, Inc. — Class A1		1,502		11,055
William Lyon Homes — Class A*		523		10,784
Chuy’s Holdings, Inc.*		358		10,668
Vitamin Shoppe, Inc.*,1		529		10,659
Carrols Restaurant Group, Inc.*		751		10,627
Fred’s, Inc. — Class A1		773		10,126
Titan International, Inc.		968		10,009
Haverty Furniture Companies, Inc.		408		9,935
Planet Fitness, Inc. — Class A		505		9,731
Wingstop, Inc.		344		9,728
Unifi, Inc.*		342		9,709
Regis Corp.*		813		9,528
Biglari Holdings, Inc.*		22		9,504
Del Frisco’s Restaurant Group, Inc.*		518		9,350
Veritiv Corp.*,1		180		9,324
EZCORP, Inc. — Class A*		1,107		9,022
Malibu Boats, Inc. — Class A*		395		8,868
Intrawest Resorts Holdings, Inc.*		352		8,804
PetMed Express, Inc.		434		8,740
Century Communities, Inc.*		333		8,458
Acushnet Holdings Corp.*		488		8,433
Barnes & Noble Education, Inc.*		876		8,401
Movado Group, Inc.		336		8,383
Camping World Holdings, Inc. — Class A		260		8,382
Beazer Homes USA, Inc.*		688		8,345
Party City Holdco, Inc.*,1		589		8,275
Zoe’s Kitchen, Inc.*		418		7,733
Hooker Furniture Corp.		248		7,700
Daktronics, Inc.		803		7,588
REV Group, Inc.		274		7,554
Metaldyne Performance Group, Inc.		329		7,518
PC Connection, Inc.		248		7,388
Culp, Inc.		235		7,332
Potbelly Corp.*		522		7,256
Zumiez, Inc.*		395		7,229
Shoe Carnival, Inc.1		292		7,174
Flexsteel Industries, Inc.		142		7,157
Iconix Brand Group, Inc.*		937		7,046
Libbey, Inc.		480		6,999
Monarch Casino & Resort, Inc.*		232		6,853
Del Taco Restaurants, Inc.*		506		6,710
PICO Holdings, Inc.*		479		6,706
Eros International plc*,1		647		6,664
Miller Industries, Inc.		241		6,350
Horizon Global Corp.*		452		6,274
America’s Car-Mart, Inc.*		172		6,269
Bassett Furniture Industries, Inc.		225		6,053
Hovnanian Enterprises, Inc. — Class A*		2,665		6,050
Titan Machinery, Inc.*		388		5,952
NACCO Industries, Inc. — Class A		85		5,933
Perry Ellis International, Inc.*		275		5,907
Big 5 Sporting Goods Corp.1		388		5,859
Spartan Motors, Inc.		727		5,816
Supreme Industries, Inc. — Class A		284		5,754
Reading International, Inc. — Class A*		368		5,719
Winmark Corp.		49		5,537
GMS, Inc.*		156		5,466
Freshpet, Inc.*,1		489		5,379
Citi Trends, Inc.1		315		5,355
El Pollo Loco Holdings, Inc.*,1		444		5,306
Habit Restaurants, Inc. — Class A*		294		5,204
Green Brick Partners, Inc.*		508		5,055
Lifetime Brands, Inc.		241		4,844
Speedway Motorsports, Inc.		257		4,842
Foundation Building Materials, Inc.*		281		4,488
Duluth Holdings, Inc. — Class B*,1		209		4,450
AV Homes, Inc.*		267		4,392
Bojangles’, Inc.*		214		4,387
Nathan’s Famous, Inc.*		67		4,198
Rush Enterprises, Inc. — Class B*		134		4,178
Vera Bradley, Inc.*		444		4,134
Weyco Group, Inc.		143		4,015
Kirkland’s, Inc.*		323		4,005
Johnson Outdoors, Inc. — Class A		108		3,942
Conn’s, Inc.*		444		3,885
West Marine, Inc.		403		3,845
Tuesday Morning Corp.*		982		3,683
Ruby Tuesday, Inc.*		1,299		3,650
Century Casinos, Inc.*		467		3,531
Sequential Brands Group, Inc.*		859		3,342
Superior Uniform Group, Inc.		176		3,274

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
Golden Entertainment, Inc.		225	$	2,977
Escalade, Inc.		230		2,967
J Alexander’s Holdings, Inc.*		292		2,935
New Home Company, Inc.*		277		2,897
Lindblad Expeditions Holdings, Inc.*		322		2,885
Boot Barn Holdings, Inc.*		291		2,878
Sears Holdings Corp.*,1		246		2,827
Systemax, Inc.		251		2,784
At Home Group, Inc.*		182		2,759
Delta Apparel, Inc.*		156		2,750
MCBC Holdings, Inc.		168		2,717
Sportsman’s Warehouse Holdings, Inc.*,1		564		2,696
Build-A-Bear Workshop, Inc. — Class A*		296		2,620
Marine Products Corp.		235		2,554
Jamba, Inc.*,1		278		2,516
Red Lion Hotels Corp.*		337		2,376
Tilly’s, Inc. — Class A		254		2,291
Destination XL Group, Inc.*		794		2,263
Strattec Security Corp.		76		2,113
Stein Mart, Inc.		681		2,050
Blue Bird Corp.*,1		119		2,041
JAKKS Pacific, Inc.*		335		1,843
UCP, Inc. — Class A*		176		1,786
Fogo De Chao, Inc.*		109		1,771
Empire Resorts, Inc.*		73		1,770
Unique Fabricating, Inc.		144		1,732
Gaia, Inc.*		150		1,493
Container Store Group, Inc.*		348		1,472
Stage Stores, Inc.1		560		1,450
Noodles & Co.*		241		1,386
Luby’s, Inc.*		426		1,325
Kona Grill, Inc.*		171		1,077
Sears Hometown and Outlet Stores, Inc.*		246		959
Workhorse Group, Inc.*		284		747
Vince Holding Corp.*		472		732
Performance Sports Group Ltd.*		886		731
CompX International, Inc.		34		522
Total Consumer, Cyclical				4,685,940
Technology - 8.8%
Advanced Micro Devices, Inc.*		16,309		237,425
Microsemi Corp.*		2,491		128,360
Take-Two Interactive Software, Inc.*		2,113		125,237
Cavium, Inc.*		1,411		101,111
Aspen Technology, Inc.*		1,706		100,517
Fair Isaac Corp.		678		87,427
MAXIMUS, Inc.		1,404		87,328
j2 Global, Inc.		1,030		86,426
Cirrus Logic, Inc.*		1,371		83,206
MKS Instruments, Inc.		1,165		80,093
EPAM Systems, Inc.*		1,055		79,674
Blackbaud, Inc.		1,032		79,122
Monolithic Power Systems, Inc.		852		78,469
NetScout Systems, Inc.*		1,960		74,381
Entegris, Inc.*		3,094		72,400
Integrated Device Technology, Inc.*		2,949		69,803
Medidata Solutions, Inc.*		1,203		69,402
Science Applications International Corp.		925		68,820
Silicon Laboratories, Inc.*		903		66,416
CACI International, Inc. — Class A*		532		62,404
Lumentum Holdings, Inc.*		1,105		58,952
Verint Systems, Inc.*		1,358		58,903
Paycom Software, Inc.*		962		55,325
ACI Worldwide, Inc.*		2,524		53,988
Electronics for Imaging, Inc.*		1,028		50,197
Acxiom Corp.*		1,696		48,285
Semtech Corp.*		1,414		47,793
Diebold Nixdorf, Inc.		1,497		45,958
CommVault Systems, Inc.*		847		43,027
Inphi Corp.*		879		42,913
Cornerstone OnDemand, Inc.*		1,101		42,818
RealPage, Inc.*		1,183		41,287
Convergys Corp.		1,946		41,158
Cabot Microelectronics Corp.		516		39,531
Power Integrations, Inc.		600		39,450
NeuStar, Inc. — Class A*		1,185		39,283
MicroStrategy, Inc. — Class A*		207		38,875
Ambarella, Inc.*		700		38,297
HubSpot, Inc.*		631		38,207
Synaptics, Inc.*		767		37,974
Mercury Systems, Inc.*		966		37,722
Xperi Corp.		1,077		36,564
3D Systems Corp.*,1		2,347		35,112
Pegasystems, Inc.		789		34,598
MaxLinear, Inc. — Class A*		1,222		34,277
Ebix, Inc.1		551		33,749
ExlService Holdings, Inc.*		712		33,720
MACOM Technology Solutions Holdings, Inc.*		690		33,327
Brooks Automation, Inc.		1,486		33,286
Insight Enterprises, Inc.*		803		32,995
Progress Software Corp.		1,096		31,839
2U, Inc.*		802		31,807
Omnicell, Inc.*		779		31,666
Rambus, Inc.*		2,378		31,247
Envestnet, Inc.*		906		29,264
Callidus Software, Inc.*		1,333		28,460
CSG Systems International, Inc.		701		26,505
Veeco Instruments, Inc.*		870		25,970
BroadSoft, Inc.*		643		25,849
Amkor Technology, Inc.*		2,190		25,382
Sykes Enterprises, Inc.*		847		24,902
InvenSense, Inc. — Class A*		1,788		22,582
Qualys, Inc.*		595		22,551
Synchronoss Technologies, Inc.*		903		22,033
Stratasys Ltd.*		1,073		21,986
Super Micro Computer, Inc.*		846		21,446
SPS Commerce, Inc.*		362		21,173
Bottomline Technologies de, Inc.*		879		20,788
Globant S.A.*		562		20,457
MTS Systems Corp.		366		20,148
Diodes, Inc.*		833		20,034
Cray, Inc.*		881		19,294

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
ManTech International Corp. — Class A		540	$	18,700
Virtusa Corp.*		605		18,283
Lattice Semiconductor Corp.*		2,624		18,158
New Relic, Inc.*		481		17,831
Monotype Imaging Holdings, Inc.		887		17,829
FormFactor, Inc.*		1,504		17,822
Box, Inc. — Class A*		1,068		17,419
Nimble Storage, Inc.*		1,377		17,213
Quality Systems, Inc.*		1,118		17,038
Nanometrics, Inc.*		518		15,778
Unisys Corp.*		1,099		15,331
CEVA, Inc.*		431		15,301
Photronics, Inc.*		1,428		15,280
Rudolph Technologies, Inc.*		655		14,672
Pure Storage, Inc. — Class A*,1		1,491		14,657
Ultratech, Inc.*		473		14,010
Vocera Communications, Inc.*		541		13,433
PDF Solutions, Inc.*		591		13,368
PROS Holdings, Inc.*		551		13,329
Axcelis Technologies, Inc.*		637		11,976
Five9, Inc.*,1		722		11,884
Syntel, Inc.		706		11,882
Ultra Clean Holdings, Inc.*		702		11,843
Exar Corp.*		893		11,618
Cotiviti Holdings, Inc.*		276		11,490
Engility Holdings, Inc.*		394		11,402
Barracuda Networks, Inc.*		482		11,139
Actua Corp.*		787		11,057
Cohu, Inc.		577		10,651
TeleTech Holdings, Inc.		359		10,626
Xcerra Corp.*		1,158		10,295
Silver Spring Networks, Inc.*		829		9,359
Hortonworks, Inc.*		905		8,878
MINDBODY, Inc. — Class A*,1		315		8,647
KEYW Holding Corp.*,1		890		8,402
InnerWorkings, Inc.*		841		8,376
IXYS Corp.		549		7,988
LivePerson, Inc.*		1,166		7,987
Carbonite, Inc.*		389		7,897
Benefitfocus, Inc.*		281		7,854
Evolent Health, Inc. — Class A*		350		7,805
Bazaarvoice, Inc.*		1,796		7,723
Workiva, Inc.*		481		7,528
Varonis Systems, Inc.*		234		7,441
Alpha & Omega Semiconductor Ltd.*		408		7,014
Computer Programs & Systems, Inc.1		245		6,860
Sapiens International Corporation N.V.		531		6,839
Digi International, Inc.*		566		6,735
Blackline, Inc.*		217		6,458
Xactly Corp.*		500		5,950
Brightcove, Inc.*		655		5,830
American Software, Inc. — Class A		564		5,798
QAD, Inc. — Class A		206		5,737
Digimarc Corp.*		211		5,697
DSP Group, Inc.*		472		5,664
Kopin Corp.*		1,348		5,527
Immersion Corp.*		633		5,482
Jive Software, Inc.*		1,262		5,427
Instructure, Inc.*		229		5,359
EMCORE Corp.		571		5,139
Glu Mobile, Inc.*		2,251		5,110
Model N, Inc.*		486		5,079
Sigma Designs, Inc.*		784		4,900
Coupa Software, Inc.*		187		4,750
pdvWireless, Inc.*		213		4,654
Appfolio, Inc. — Class A*		166		4,515
MobileIron, Inc.*		1,017		4,424
Eastman Kodak Co.*		373		4,290
Mitek Systems, Inc.*		644		4,283
Rosetta Stone, Inc.*		422		4,115
Maxwell Technologies, Inc.*		689		4,003
Impinj, Inc.*,1		130		3,935
GigPeak, Inc.*		1,275		3,927
Everbridge, Inc.*		189		3,880
Exa Corp.*		303		3,848
DMC Global, Inc.		306		3,794
Planet Payment, Inc.*		925		3,682
Park City Group, Inc.*		282		3,483
USA Technologies, Inc.*		784		3,332
Avid Technology, Inc.*		703		3,276
Castlight Health, Inc. — Class B*		882		3,219
Agilysys, Inc.*		331		3,128
Radisys Corp.*		779		3,116
Amber Road, Inc.*		387		2,988
Guidance Software, Inc.*		495		2,921
ExOne Co.*		238		2,425
NCI, Inc. — Class A*		132		1,987
Cogint, Inc.*		332		1,544
ALJ Regional Holdings, Inc.*		405		1,507
SecureWorks Corp. — Class A*		133		1,264
NantHealth, Inc.*,1		144		714
Majesco*		129		666
Total Technology				4,382,450
Communications - 5.3%
LogMeIn, Inc.		1,128		109,979
ViaSat, Inc.*		1,122		71,606
Ciena Corp.*		3,004		70,924
Nexstar Media Group, Inc. — Class A		951		66,712
Proofpoint, Inc.*		893		66,403
InterDigital, Inc.		758		65,415
Sinclair Broadcast Group, Inc. — Class A1		1,594		64,556
Finisar Corp.*		2,352		64,304
GrubHub, Inc.*,1		1,767		58,116
Viavi Solutions, Inc.*		5,131		55,004
Meredith Corp.		821		53,037
Zendesk, Inc.*		1,776		49,800
TiVo Corp.		2,561		48,019
DigitalGlobe, Inc.*		1,381		45,228
Time, Inc.		2,248		43,499
WebMD Health Corp. — Class A*		817		43,039
Stamps.com, Inc.*		354		41,897
Plantronics, Inc.		726		39,284

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 129

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
New York Times Co. — Class A		2,722	$	39,197
Cogent Communications Holdings, Inc.		909		39,131
ePlus, Inc.*		274		37,004
Shutterfly, Inc.*		756		36,507
RingCentral, Inc. — Class A*		1,282		36,280
NETGEAR, Inc.*		708		35,081
Liberty Media Corporation-Liberty Formula One — Class C*		1,010		34,492
Infinera Corp.*		3,073		31,437
EW Scripps Co. — Class A*		1,302		30,519
MSG Networks, Inc. — Class A*		1,301		30,378
8x8, Inc.*		1,930		29,433
Ubiquiti Networks, Inc.*,1		567		28,497
Shenandoah Telecommunications Co.		1,012		28,387
NIC, Inc.		1,389		28,058
Wayfair, Inc. — Class A*,1		690		27,938
Ixia*		1,403		27,569
Houghton Mifflin Harcourt Co.*		2,713		27,537
Vonage Holdings Corp.*		4,179		26,411
Imperva, Inc.*		627		25,738
Consolidated Communications Holdings, Inc.1		1,087		25,458
Gigamon, Inc.*		711		25,276
Scholastic Corp.		591		25,159
Etsy, Inc.*		2,296		24,406
Oclaro, Inc.*		2,447		24,030
West Corp.		945		23,077
ADTRAN, Inc.		1,075		22,306
Windstream Holdings, Inc.1		3,981		21,696
Gannett Company, Inc.		2,572		21,553
Gray Television, Inc.*		1,403		20,344
Q2 Holdings, Inc.*		559		19,481
TrueCar, Inc.*,1		1,189		18,394
Web.com Group, Inc.*		929		17,930
World Wrestling Entertainment, Inc. — Class A		791		17,576
Iridium Communications, Inc.*,1		1,804		17,409
Shutterstock, Inc.*		415		17,160
Extreme Networks, Inc.*		2,261		16,980
Liberty Media Corporation-Liberty Media — Class A*		501		16,383
Cincinnati Bell, Inc.*		920		16,284
Liberty Media Corporation-Liberty Braves — Class C*		688		16,271
ATN International, Inc.		230		16,197
Chegg, Inc.*,1		1,761		14,863
Blucora, Inc.*		858		14,843
GTT Communications, Inc.*		576		14,026
HealthStream, Inc.*		562		13,617
Globalstar, Inc.*,1		8,490		13,584
Gogo, Inc.*		1,231		13,541
ORBCOMM, Inc.*		1,414		13,504
Quotient Technology, Inc.*		1,402		13,389
Perficient, Inc.*		771		13,385
New Media Investment Group, Inc.		940		13,358
CalAmp Corp.*		783		13,147
General Communication, Inc. — Class A*		589		12,251
Loral Space & Communications, Inc.*		281		11,071
MDC Partners, Inc. — Class A		1,121		10,537
Endurance International Group Holdings, Inc.*		1,312		10,299
Boingo Wireless, Inc.*		779		10,119
Bankrate, Inc.*		1,037		10,007
Harmonic, Inc.*		1,672		9,948
XO Group, Inc.*		556		9,569
ShoreTel, Inc.*		1,472		9,053
VASCO Data Security International, Inc.*		659		8,897
Entravision Communications Corp. — Class A		1,423		8,823
A10 Networks, Inc.*		964		8,821
Spok Holdings, Inc.		448		8,512
tronc, Inc.*		583		8,115
Entercom Communications Corp. — Class A1		567		8,108
FairPoint Communications, Inc.*		465		7,719
FTD Companies, Inc.*		381		7,673
Straight Path Communications, Inc. — Class B*,1		209		7,518
Trade Desk, Inc. — Class A*		199		7,413
Lumos Networks Corp.*		414		7,328
Comtech Telecommunications Corp.		494		7,282
Lands’ End, Inc.*		326		6,993
Sonus Networks, Inc.*		1,043		6,873
RetailMeNot, Inc.*		844		6,836
Acacia Communications, Inc.*,1		115		6,741
Calix, Inc.*		902		6,540
Rapid7, Inc.*		435		6,516
Telenav, Inc.*		713		6,167
Silicom Ltd.		123		6,109
NeoPhotonics Corp.*		674		6,073
RigNet, Inc.*		276		5,920
1-800-Flowers.com, Inc. — Class A*		569		5,804
ChannelAdvisor Corp.*		508		5,664
Zix Corp.*		1,165		5,604
MeetMe, Inc.*		902		5,313
Central European Media Enterprises Ltd. — Class A*		1,672		5,183
Daily Journal Corp.*		24		5,143
Overstock.com, Inc.*		289		4,971
Angie’s List, Inc.*		870		4,959
IDT Corp. — Class B		380		4,834
Rubicon Project, Inc.*		814		4,794
Liberty Media Corporation - Liberty Braves — Class A*		200		4,788
HC2 Holdings, Inc.*		730		4,526
Liquidity Services, Inc.*		546		4,368
DHI Group, Inc.*		1,097		4,333
Clearfield, Inc.*		250		4,113
Saga Communications, Inc. — Class A		80		4,084
Limelight Networks, Inc.*		1,552		4,004
Reis, Inc.		191		3,419
Global Eagle Entertainment, Inc.*		1,024		3,267

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
QuinStreet, Inc.*		801	$	3,124
TechTarget, Inc.*		345		3,115
Quantenna Communications, Inc.*		147		3,062
Hawaiian Telcom Holdco, Inc.*		132		3,024
Black Box Corp.		328		2,936
Preformed Line Products Co.		55		2,868
Intelsat S.A.*		691		2,868
KVH Industries, Inc.*		330		2,772
Rightside Group Ltd.*		254		2,520
RealNetworks, Inc.*		514		2,488
VirnetX Holding Corp.*,1		1,058		2,433
Autobytel, Inc.*		190		2,381
Townsquare Media, Inc. — Class A*		189		2,302
Aerohive Networks, Inc.*		524		2,206
Marchex, Inc. — Class B*		731		1,988
Salem Media Group, Inc. — Class A		241		1,795
Radio One, Inc. — Class D*		540		1,782
Corindus Vascular Robotics, Inc.*		1,202		1,575
NII Holdings, Inc.*		1,171		1,522
Global Sources Ltd.*		179		1,477
Numerex Corp. — Class A*		302		1,441
Hemisphere Media Group, Inc.*		118		1,387
Value Line, Inc.		26		447
Total Communications				2,625,558
Basic Materials - 3.6%
Chemours Co.		4,009		154,346
Olin Corp.		3,624		119,121
US Silica Holdings, Inc.		1,614		77,456
Sensient Technologies Corp.		974		77,199
PolyOne Corp.		1,836		62,589
Minerals Technologies, Inc.		758		58,063
Balchem Corp.		688		56,705
Ingevity Corp.*		931		56,651
HB Fuller Co.		1,097		56,561
GCP Applied Technologies, Inc.*		1,552		50,673
Cliffs Natural Resources, Inc.*		6,106		50,130
AK Steel Holding Corp.*		6,758		48,590
Commercial Metals Co.		2,513		48,074
Chemtura Corp.*		1,394		46,560
Stillwater Mining Co.*		2,674		46,180
Hecla Mining Co.		8,348		44,161
Allegheny Technologies, Inc.		2,374		42,637
Carpenter Technology Corp.		1,011		37,710
Quaker Chemical Corp.		283		37,260
Stepan Co.		430		33,888
Innospec, Inc.		517		33,476
Coeur Mining, Inc.*		3,877		31,326
Kaiser Aluminum Corp.		387		30,921
Univar, Inc.*		940		28,821
Ferro Corp.*		1,821		27,661
Schweitzer-Mauduit International, Inc.		662		27,420
Neenah Paper, Inc.		363		27,116
Tronox Ltd. — Class A		1,410		26,015
Innophos Holdings, Inc.		423		22,829
Clearwater Paper Corp.*		371		20,776
PH Glatfelter Co.		951		20,675
Kraton Corp.*		647		20,005
A. Schulman, Inc.		629		19,782
Koppers Holdings, Inc.*		445		18,846
Deltic Timber Corp.		232		18,124
Calgon Carbon Corp.		1,102		16,089
Ferroglobe plc		1,430		14,772
Materion Corp.		436		14,628
Century Aluminum Co.*		1,091		13,845
Fairmount Santrol Holdings, Inc.*		1,888		13,839
Rayonier Advanced Materials, Inc.		941		12,656
Schnitzer Steel Industries, Inc. — Class A		570		11,771
CSW Industrials, Inc.*		315		11,561
Hawkins, Inc.		210		10,290
American Vanguard Corp.		617		10,242
Aceto Corp.		636		10,055
OMNOVA Solutions, Inc.*		929		9,197
KMG Chemicals, Inc.		197		9,076
Kronos Worldwide, Inc.		482		7,919
Landec Corp.*		585		7,020
Gold Resource Corp.		1,094		4,945
Orchids Paper Products Co.1		197		4,728
Smart Sand, Inc.*		257		4,176
Oil-Dri Corporation of America		109		4,062
Codexis, Inc.*		732		3,514
Ryerson Holding Corp.*		275		3,465
United States Lime & Minerals, Inc.		43		3,396
AgroFresh Solutions, Inc.*		482		2,106
Valhi, Inc.		549		1,801
Total Basic Materials				1,783,500
Utilities - 2.9%
IDACORP, Inc.		1,106		91,753
WGL Holdings, Inc.		1,105		91,195
Portland General Electric Co.		1,958		86,974
Southwest Gas Holdings, Inc.		1,036		85,895
ONE Gas, Inc.		1,140		77,064
Black Hills Corp.		1,130		75,110
New Jersey Resources Corp.		1,878		74,369
ALLETE, Inc.		1,086		73,533
Spire, Inc.		978		66,015
PNM Resources, Inc.		1,750		64,750
NorthWestern Corp.		1,065		62,516
South Jersey Industries, Inc.		1,747		62,281
Avista Corp.		1,385		54,084
MGE Energy, Inc.1		765		49,725
Ormat Technologies, Inc.		851		48,575
El Paso Electric Co.		884		44,642
California Water Service Group		1,051		37,677
American States Water Co.		799		35,396
Northwest Natural Gas Co.		594		35,105
Otter Tail Corp.		831		31,495
Atlantica Yield plc		1,287		26,976
NRG Yield, Inc. — Class C		1,388		24,568
Chesapeake Utilities Corp.		341		23,597
Dynegy, Inc.*		2,557		20,098
SJW Group		357		17,215
Unitil Corp.		304		13,689

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
NRG Yield, Inc. — Class A		764	$	13,286
Middlesex Water Co.		347		12,822
Connecticut Water Service, Inc.		237		12,597
York Water Co.		281		9,849
Atlantic Power Corp.*		2,526		6,694
Artesian Resources Corp. — Class A		170		5,535
Delta Natural Gas Company, Inc.		149		4,522
Consolidated Water Company Ltd.		318		3,705
EnerNOC, Inc.*		585		3,510
Spark Energy, Inc. — Class A1		107		3,419
Ameresco, Inc. — Class A*		465		3,046
Genie Energy Ltd. — Class B		282		2,042
Global Water Resources, Inc.		180		1,566
Total Utilities				1,456,890
Energy - 2.7%
RSP Permian, Inc.*		2,149		89,034
PDC Energy, Inc.*		1,225		76,380
Oasis Petroleum, Inc.*		5,101		72,741
Western Refining, Inc.		1,765		61,898
Callon Petroleum Co.*		4,031		53,048
SemGroup Corp. — Class A		1,447		52,092
Matador Resources Co.*		1,898		45,153
NOW, Inc.*		2,340		39,686
Carrizo Oil & Gas, Inc.*		1,334		38,232
MRC Global, Inc.*		2,051		37,595
Oil States International, Inc.*		1,120		37,127
McDermott International, Inc.*		5,288		35,694
SRC Energy, Inc.*		4,066		34,317
Delek US Holdings, Inc.		1,348		32,716
Pattern Energy Group, Inc.		1,451		29,209
Forum Energy Technologies, Inc.*		1,313		27,179
Unit Corp.*		1,107		26,745
SEACOR Holdings, Inc.*		349		24,147
TerraForm Power, Inc. — Class A*		1,913		23,664
Exterran Corp.*		693		21,795
Helix Energy Solutions Group, Inc.*		2,796		21,725
Denbury Resources, Inc.*		7,693		19,848
Green Plains, Inc.		792		19,602
Archrock, Inc.		1,522		18,873
Clayton Williams Energy, Inc.*		131		17,302
Flotek Industries, Inc.*		1,198		15,323
Newpark Resources, Inc.*		1,814		14,693
Thermon Group Holdings, Inc.*		699		14,568
Atwood Oceanics, Inc.*		1,509		14,381
Seadrill Ltd.*,1		8,270		13,646
Sanchez Energy Corp.*,1		1,384		13,203
SunCoke Energy, Inc.*		1,410		12,634
REX American Resources Corp.*		124		11,221
Bristow Group, Inc.		735		11,179
Par Pacific Holdings, Inc.*		672		11,081
California Resources Corp.*		693		10,423
Keane Group, Inc.*		675		9,652
TerraForm Global, Inc. — Class A*		1,998		9,590
Matrix Service Co.*		581		9,587
Ring Energy, Inc.*		859		9,294
TETRA Technologies, Inc.*		2,238		9,109
Jagged Peak Energy, Inc.*		693		9,037
Renewable Energy Group, Inc.*		838		8,757
Alon USA Energy, Inc.		690		8,411
Tesco Corp.*		1,011		8,139
FutureFuel Corp.		546		7,742
Sunrun, Inc.*		1,383		7,468
Natural Gas Services Group, Inc.*		269		7,007
CVR Energy, Inc.		346		6,948
Panhandle Oil and Gas, Inc. — Class A		335		6,432
Abraxas Petroleum Corp.*		3,059		6,179
Pioneer Energy Services Corp.*		1,526		6,104
CARBO Ceramics, Inc.*		468		6,103
Westmoreland Coal Co.*		403		5,852
Era Group, Inc.*		428		5,675
Plug Power, Inc.*		4,080		5,630
Bill Barrett Corp.*		1,215		5,528
WildHorse Resource Development Corp.*		434		5,399
Clean Energy Fuels Corp.*		2,032		5,182
Trecora Resources*		434		4,817
Cobalt International Energy, Inc.*		8,926		4,761
Geospace Technologies Corp.*		285		4,626
Parker Drilling Co.*		2,643		4,625
Pacific Ethanol, Inc.*		627		4,295
Evolution Petroleum Corp.		534		4,272
EP Energy Corp. — Class A*		847		4,023
Mammoth Energy Services, Inc.*		170		3,657
Independence Contract Drilling, Inc.*		655		3,609
Contango Oil & Gas Co.*		490		3,587
Jones Energy, Inc. — Class A*		1,356		3,457
Eclipse Resources Corp.*		1,247		3,167
PHI, Inc.*		257		3,079
Northern Oil and Gas, Inc.*		1,022		2,657
Willbros Group, Inc.*		945		2,589
TPI Composites, Inc.*		132		2,509
Dawson Geophysical Co.*		441		2,452
W&T Offshore, Inc.*		778		2,155
EXCO Resources, Inc.*		3,062		1,898
Isramco, Inc.*		16		1,874
Adams Resources & Energy, Inc.		46		1,718
Vivint Solar, Inc.*		497		1,392
FuelCell Energy, Inc.*		712		979
Erin Energy Corp.*		316		758
Earthstone Energy, Inc.*		47		600
Total Energy				1,340,535
Diversified - 0.1%
HRG Group, Inc.*		2,596		50,154
Wins Finance Holdings, Inc.*,1		29		4,205
Total Diversified				54,359
Government - 0.0%**
Banco Latinoamericano de Comercio Exterior S.A. — Class E		662		18,364
Total Common Stocks
(Cost $35,379,509)				41,548,202

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
RUSSELL 2000® FUND

	Shares		Value
RIGHTS††† - 0.0%**
Tobira Therapeutics CVR
Expires 11/02/18		141	$	—
Trinity Place Holdings, Inc.
Expires 04/03/17		60		—
Omthera Pharmaceuticals, Inc.
Expires 12/31/20		86		—
Dyax Corp.
Expires 01/25/18		757		—
Nexstar Media Group, Inc.
Expires 01/18/19		2,530		—
Total Rights
(Cost $—)				—

	Face Amount
FEDERAL AGENCY NOTES†† - 5.0%
Freddie Mac2
0.75% due 10/26/183	$	2,500,000		2,496,568
Total Federal Agency Notes
(Cost $2,500,000)				2,496,568
CORPORATE BONDS†† - 0.0%**
Industrial - 0.0%
Mueller Industries, Inc.
6.00% due 03/01/27		6,000		5,955
Total Corporate Bonds
(Cost $6,000)				5,955
REPURCHASE AGREEMENTS††,4 - 14.3%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		3,646,575		3,646,575
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		2,349,260		2,349,260
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/175		800,223		800,223
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		360,108		360,108
Total Repurchase Agreements
(Cost $7,156,166)				7,156,166
SECURITIES LENDING COLLATERAL†,6 - 3.5%
First American Government Obligations Fund — Class Z, 0.61%7		1,749,835	$	1,749,835
Total Securities Lending Collateral
(Cost $1,749,835)				1,749,835
Total Investments - 106.0%
(Cost $46,791,510)			$	52,956,726
Other Assets & Liabilities, net - (6.0)%				(2,998,847	)
Total Net Assets - 100.0%			$	49,957,879

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $1,383,800)		20	$	20,915

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 Russell 2000 Index Swap 0.58%8, Terminating 04/28/17 (Notional Value $4,876,529)		3,519	$	87,160
Goldman Sachs International April 2017 Russell 2000 Index Swap 0.81%8, Terminating 04/27/17 (Notional Value $1,398,575)		1,009		29,529
Barclays Bank plc April 2017 Russell 2000 Index Swap 0.81%8, Terminating 04/28/17 (Notional Value $715,082)		516		1,704
(Total Notional Value $6,990,186)			$	118,393

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
RUSSELL 2000® FUND

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	On September 7, 2008, the issuer was placed in conservatorship by the Federal Housing Finance Agency (FHFA). As conservator, the FHFA has full powers to control the assets and operations of the firm.
3	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
4	Repurchase Agreements — See Note 5.
5	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
6	Securities lending collateral — See Note 6.
7	Rate indicated is the 7 day yield as of March 31, 2017.
8	Total Return based on Russell 2000 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	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, 2017 (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	$	41,548,202	$	—	$	—	$	—	$	—		$	41,548,202
Corporate Bonds		—		—		5,955		—		—			5,955
Equity Futures Contracts		—		20,915		—		—		—			20,915
Equity Index Swap Agreements		—		—		—		118,393		—			118,393
Federal Agency Notes		—		—		2,496,568		—		—			2,496,568
Repurchase Agreements		—		—		7,156,166		—		—			7,156,166
Rights		—		—		—		—		—	**		—
Securities Lending Collateral		1,749,835		—		—		—		—			1,749,835
Total	$	43,298,037	$	20,915	$	9,658,689	$	118,393	$	—		$	53,096,034

*	Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.
**	Security has a market value of $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, the Fund had a security with a total value of $640 transfer out of Level 2 into Level 1 due to changes in securities valuation method.

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

RUSSELL 2000^® FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,701,519 of securities loaned (cost $39,635,344)	$	45,800,560
Repurchase agreements, at value (cost $7,156,166)		7,156,166
Total investments (cost $46,791,510)		52,956,726
Segregated cash with broker		579,101
Unrealized appreciation on swap agreements		118,393
Cash		5,930
Receivables:
Swap settlement		47,635
Variation margin		3,993
Securities sold		236,335
Fund shares sold		1,280,828
Dividends		49,036
Interest		3,547
Securities lending income		3,809
Total assets		55,285,333
Liabilities:
Payable for:
Fund shares redeemed		3,003,774
Return of securities loaned		1,749,835
Securities purchased		459,057
Management fees		38,981
Distribution and service fees		16,759
Transfer agent and administrative fees		12,994
Portfolio accounting fees		7,796
Miscellaneous		38,258
Total liabilities		5,327,454
Commitments and contingent liabilities (Note 14)		—
Net assets	$	49,957,879
Net assets consist of:
Paid in capital	$	45,232,705
Accumulated net investment loss		(7,428	)
Accumulated net realized loss on investments		(1,571,918	)
Net unrealized appreciation on investments		6,304,520
Net assets	$	49,957,879
A-Class:
Net assets	$	14,650,347
Capital shares outstanding		352,117
Net asset value per share	$	41.61
Maximum offering price per share(Net asset value divided by 95.25%)	$	43.69
C-Class:
Net assets	$	5,841,140
Capital shares outstanding		154,222
Net asset value per share	$	37.87
H-Class:
Net assets	$	29,466,392
Capital shares outstanding		709,924
Net asset value per share	$	41.51

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

RUSSELL 2000^® FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends (net of foreign withholding tax of $102)	$	419,026
Interest		54,382
Income from securities lending, net		22,205
Other income		250
Total investment income		495,863
Expenses:
Management fees		342,691
Transfer agent and administrative fees		114,232
Distribution and service fees:
A-Class		37,800
C-Class		40,684
H-Class		66,262
Portfolio accounting fees		68,540
Custodian fees		6,613
Trustees’ fees*		3,192
Line of credit fees		158
Miscellaneous		94,259
Total expenses		774,431
Net investment loss		(278,568	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments	$	508,824
Swap agreements		2,479,548
Futures contracts		538,809
Net realized gain		3,527,181
Net change in unrealized appreciation(depreciation) on:
Investments		5,049,114
Swap agreements		(105,952	)
Futures contracts		(20,396	)
Foreign currency		(4	)
Net change in unrealized appreciation(depreciation)		4,922,762
Net realized and unrealized gain		8,449,943
Net increase in net assets resulting from operations	$	8,171,375

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

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

RUSSELL 2000^® FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(278,568	)	$	(353,047	)
Net realized gain (loss) on investments		3,527,181			(2,172,044	)
Net change in unrealized appreciation (depreciation) on investments		4,922,762			771,104
Net increase (decrease) in net assets resulting from operations		8,171,375			(1,753,987	)
Distributions to shareholders from:
Net realized gains
A-Class		—			(378,494	)
C-Class		—			(84,593	)
H-Class		—			(279,804	)
Total distributions to shareholders		—			(742,891	)
Capital share transactions:
Proceeds from sale of shares
A-Class		42,192,221			44,154,351
C-Class		10,426,608			14,311,898
H-Class		227,391,879			344,016,927
Distributions reinvested
A-Class		—			344,126
C-Class		—			76,580
H-Class		—			275,570
Cost of shares redeemed
A-Class		(42,966,394	)		(44,563,233	)
C-Class		(8,128,543	)		(15,370,265	)
H-Class		(248,133,883	)		(325,825,130	)
Net increase (decrease) from capital share transactions		(19,218,112	)		17,420,824
Net increase (decrease) in net assets		(11,046,737	)		14,923,946
Net assets:
Beginning of year		61,004,616			46,080,670
End of year	$	49,957,879		$	61,004,616
Accumulated net investment loss at end of year	$	(7,428	)	$	(93,094	)
Capital share activity:
Shares sold
A-Class		1,104,167			1,257,318
C-Class		303,834			422,747
H-Class		6,113,347			9,826,186
Shares issued from reinvestment of distributions
A-Class		—			9,852
C-Class		—			2,386
H-Class		—			7,908
Shares redeemed
A-Class		(1,109,403	)		(1,267,797	)
C-Class		(239,296	)		(453,761	)
H-Class		(6,784,978	)		(9,171,878	)
Net increase (decrease) in shares		(612,329	)		632,961

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 137

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	33.56		$	38.88		$	37.80		$	32.26		$	28.20
Income (loss) from investment operations:
Net investment income (loss)a		(.21	)		(.29	)		(.25	)		(.27	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		8.26			(4.12	)		2.61			7.54			4.19
Total from investment operations		8.05			(4.41	)		2.36			7.27			4.06
Less distributions from:
Net realized gains		—			(.91	)		(1.28	)		(1.73	)		—
Total distributions		—			(.91	)		(1.28	)		(1.73	)		—
Net asset value, end of period	$	41.61		$	33.56		$	38.88		$	37.80		$	32.26
Total Returnb		23.96	%		(11.43	%)		6.42	%		22.87	%		14.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	14,650		$	11,993		$	13,920		$	3,219		$	3,723
Ratios to average net assets:
Net investment income (loss)		(0.54	%)		(0.83	%)		(0.67	%)		(0.77	%)		(0.44	%)
Total expenses		1.62	%		1.59	%		1.57	%		1.60	%		1.55	%
Portfolio turnover rate		203	%		442	%		947	%		267	%		160	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	30.78		$	36.00		$	35.36		$	30.54		$	26.90
Income (loss) from investment operations:
Net investment income (loss)a		(.44	)		(.51	)		(.60	)		(.48	)		(.31	)
Net gain (loss) on investments (realized and unrealized)		7.53			(3.80	)		2.52			7.03			3.95
Total from investment operations		7.09			(4.31	)		1.92			6.55			3.64
Less distributions from:
Net realized gains		—			(.91	)		(1.28	)		(1.73	)		—
Total distributions		—			(.91	)		(1.28	)		(1.73	)		—
Net asset value, end of period	$	37.87		$	30.78		$	36.00		$	35.36		$	30.54
Total Returnb		23.03	%		(12.07	%)		5.61	%		21.78	%		13.53	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,841		$	2,760		$	4,259		$	3,245		$	2,599
Ratios to average net assets:
Net investment income (loss)		(1.27	%)		(1.56	%)		(1.77	%)		(1.47	%)		(1.19	%)
Total expenses		2.38	%		2.35	%		2.57	%		2.37	%		2.31	%
Portfolio turnover rate		203	%		442	%		947	%		267	%		160	%

138 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	33.48		$	38.79		$	37.73		$	32.25		$	28.16
Income (loss) from investment operations:
Net investment income (loss)a		(.21	)		(.35	)		(.28	)		(.27	)		(.12	)
Net gain (loss) on investments (realized and unrealized)		8.24			(4.05	)		2.62			7.48			4.21
Total from investment operations		8.03			(4.40	)		2.34			7.21			4.09
Less distributions from:
Net realized gains		—			(.91	)		(1.28	)		(1.73	)		—
Total distributions		—			(.91	)		(1.28	)		(1.73	)		—
Net asset value, end of period	$	41.51		$	33.48		$	38.79		$	37.73		$	32.25
Total Returnb		23.95	%		(11.43	%)		6.37	%		22.69	%		14.52	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	29,466		$	46,251		$	27,902		$	44,185		$	101,053
Ratios to average net assets:
Net investment income (loss)		(0.54	%)		(0.97	%)		(0.77	%)		(0.78	%)		(0.42	%)
Total expenses		1.63	%		1.60	%		1.58	%		1.59	%		1.52	%
Portfolio turnover rate		203	%		442	%		947	%		267	%		160	%

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 | 139

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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 -23.16% while the Russell 2000 Index returned 26.22% 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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.

140 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	4.0%
Guggenheim Strategy Fund II	3.9%
Total	7.9%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	-23.21%	-14.72%	-13.45%
A-Class Shares with sales charge†	-26.85%	-15.55%	-13.87%
C-Class Shares	-23.73%	-15.34%	-14.08%
C-Class Shares with CDSC‡	-24.49%	-15.34%	-14.08%
H-Class Shares	-23.16%	-14.68%	-13.43%
Russell 2000 Index	26.22%	15.60%	9.44%

*	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 | 141

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE RUSSELL 2000® STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 7.9%
Guggenheim Strategy Fund I1		24,377	$	610,653
Guggenheim Strategy Fund II1		24,220		605,492
Total Mutual Funds
(Cost $1,204,971)				1,216,145

	Face Amount
U.S. TREASURY BILLS†† - 32.3%
U.S. Treasury Bill
0.71% due 04/27/172,3	$	5,000,000		4,997,565
Total U.S. Treasury Bills
(Cost $4,997,436)				4,997,565
FEDERAL AGENCY NOTES†† - 6.5%
Federal Farm Credit Bank4
1.17% due 09/12/185		1,000,000		1,000,715
Total Federal Agency Notes
(Cost $999,855)				1,000,715
REPURCHASE AGREEMENTS††,6 - 52.9%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		3,932,178		3,932,178
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		2,533,256		2,533,256
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/177		1,326,714		1,326,714
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		388,311		388,311
Total Repurchase Agreements
(Cost $8,180,459)				8,180,459
Total Investments - 99.6%
(Cost $15,382,721)			$	15,394,884
Other Assets & Liabilities, net - 0.4%				55,387
Total Net Assets - 100.0%			$	15,450,271

	Contracts		Unrealized Loss
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2017 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $8,510,370)		123	$	(167,764	)

	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Barclays Bank plc April 2017 Russell 2000 Index Swap 0.31%8, Terminating 04/28/17 (Notional Value $881,063)		636	$	(2,210	)
BNP Paribas April 2017 Russell 2000 Index Swap 0.08%8, Terminating 04/28/17 (Notional Value $1,540,056)		1,111		(29,820	)
Goldman Sachs International April 2017 Russell 2000 Index Swap 0.51%8, Terminating 04/27/17 (Notional Value $4,445,738)		3,208		(68,143	)
(Total Notional Value $6,866,857)			$	(100,173	)

†	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	All or a portion of this security is pledged as futures collateral.
3	Zero coupon rate security. Rate indicated is the effective yield at the time of purchase.
4	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
5	Variable rate security. Rate indicated is rate effective at March 31, 2017.
6	Repurchase Agreements — See Note 5.
7	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
8	Total Return based on Russell 2000 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
INVERSE RUSSELL 2000® STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	—	$	—	$	1,000,715	$	—	$	—	$	1,000,715
Mutual Funds		1,216,145		—		—		—		—		1,216,145
Repurchase Agreements		—		—		8,180,459		—		—		8,180,459
U.S. Treasury Bills		—		—		4,997,565		—		—		4,997,565
Total	$	1,216,145	$	—	$	14,178,739	$	—	$	—	$	15,394,884

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	167,764	$	—	$	—	$	—	$	167,764
Equity Index Swap Agreements		—		—		—		100,173		—		100,173
Total	$	—	$	167,764	$	—	$	100,173	$	—	$	267,937

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

INVERSE RUSSELL 2000^® STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $5,997,291)	$	5,998,280
Investments in affiliated issuers, at value (cost $1,204,971)		1,216,145
Repurchase agreements, at value (cost $8,180,459)		8,180,459
Total investments (cost $15,382,721)		15,394,884
Segregated cash with broker		445,900
Receivables:
Fund shares sold		38,408
Dividends		2,233
Interest		775
Total assets		15,882,200
Liabilities:
Unrealized depreciation on swap agreements		100,173
Payable for:
Fund shares redeemed		294,209
Variation margin		15,375
Swap settlement		9,774
Management fees		4,533
Distribution and service fees		1,941
Transfer agent and administrative fees		1,259
Portfolio accounting fees		504
Miscellaneous		4,161
Total liabilities		431,929
Commitments and contingent liabilities (Note 14)		—
Net assets	$	15,450,271
Net assets consist of:
Paid in capital	$	66,467,504
Accumulated net investment loss		(11,033	)
Accumulated net realized loss on investments		(50,750,426	)
Net unrealized depreciation on investments		(255,774	)
Net assets	$	15,450,271
A-Class:
Net assets	$	8,645,394
Capital shares outstanding		365,973
Net asset value per share	$	23.62
Maximum offering price per share(Net asset value divided by 95.25%)	$	24.80
C-Class:
Net assets	$	1,027,673
Capital shares outstanding		48,000
Net asset value per share	$	21.41
H-Class:
Net assets	$	5,777,204
Capital shares outstanding		243,830
Net asset value per share	$	23.69

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	29,797
Dividends from securities of affiliated issuers		33,331
Total investment income		63,128
Expenses:
Management fees		96,656
Transfer agent and administrative fees		26,849
Distribution and service fees:
A-Class		3,357
C-Class		13,664
H-Class		20,076
Portfolio accounting fees		10,740
Registration fees		17,176
Custodian fees		1,853
Trustees’ fees*		1,073
Miscellaneous		3,614
Total expenses		195,058
Net investment loss		(131,930	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(714	)
Investments in affiliated issuers		14,886
Swap agreements		(3,031,902	)
Futures contracts		(285,752	)
Net realized loss		(3,303,482	)
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		7,514
Investments in affiliated issuers		8,482
Swap agreements		242,688
Futures contracts		(165,264	)
Net change in unrealized appreciation(depreciation)		93,420
Net realized and unrealized loss		(3,210,062	)
Net decrease in net assets resulting from operations	$	(3,341,992	)

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

144 | 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(131,930	)	$	(478,582	)
Net realized loss on investments		(3,303,482	)		(1,808,075	)
Net change in unrealized appreciation (depreciation) on investments		93,420			(283,532	)
Net decrease in net assets resulting from operations		(3,341,992	)		(2,570,189	)
Capital share transactions:
Proceeds from sale of shares
A-Class		14,626,343			9,085,916
C-Class		4,936,900			1,059,867
H-Class		89,823,769			505,306,463
Cost of shares redeemed
A-Class		(8,349,515	)		(6,953,249	)
C-Class		(5,311,313	)		(1,084,198	)
H-Class		(118,171,227	)		(471,955,412	)
Net increase (decrease) from capital share transactions		(22,445,043	)		35,459,387
Net increase (decrease) in net assets		(25,787,035	)		32,889,198
Net assets:
Beginning of year		41,237,306			8,348,108
End of year	$	15,450,271		$	41,237,306
Accumulated net investment loss at end of year	$	(11,033	)	$	(185,674	)
Capital share activity:
Shares sold
A-Class		565,644			278,747
C-Class		224,964			36,768
H-Class		3,300,396			15,797,309
Shares redeemed
A-Class		(290,537	)		(218,466	)
C-Class		(238,561	)		(37,693	)
H-Class		(4,247,427	)		(14,803,569	)
Net increase (decrease) in shares		(685,521	)		1,053,096

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 145

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	30.76		$	29.22		$	33.01		$	43.21		$	52.38
Income (loss) from investment operations:
Net investment income (loss)a		(.31	)		(.39	)		(.46	)		(.61	)		(.81	)
Net gain (loss) on investments (realized and unrealized)		(6.83	)		1.93			(3.33	)		(9.59	)		(8.36	)
Total from investment operations		(7.14	)		1.54			(3.79	)		(10.20	)		(9.17	)
Net asset value, end of period	$	23.62		$	30.76		$	29.22		$	33.01		$	43.21
Total Returnb		(23.21	%)		5.27	%		(11.48	%)		(23.59	%)		(17.53	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	8,645		$	2,795		$	894		$	7,302		$	635
Ratios to average net assets:
Net investment income (loss)		(1.11	%)		(1.23	%)		(1.40	%)		(1.69	%)		(1.60	%)
Total expensesc		1.71	%		1.70	%		1.71	%		1.72	%		1.72	%
Portfolio turnover rate		58	%		584	%		189	%		—			—

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	28.07		$	26.86		$	30.59		$	40.30		$	49.22
Income (loss) from investment operations:
Net investment income (loss)a		(.45	)		(.58	)		(.63	)		(.83	)		(1.14	)
Net gain (loss) on investments (realized and unrealized)		(6.21	)		1.79			(3.10	)		(8.88	)		(7.78	)
Total from investment operations		(6.66	)		1.21			(3.73	)		(9.71	)		(8.92	)
Net asset value, end of period	$	21.41		$	28.07		$	26.86		$	30.59		$	40.30
Total Returnb		(23.73	%)		4.50	%		(12.19	%)		(24.08	%)		(18.16	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,028		$	1,729		$	1,680		$	568		$	409
Ratios to average net assets:
Net investment income (loss)		(1.83	%)		(2.08	%)		(2.13	%)		(2.45	%)		(2.35	%)
Total expensesc		2.47	%		2.45	%		2.45	%		2.47	%		2.47	%
Portfolio turnover rate		58	%		584	%		189	%		—			—

146 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	30.83		$	29.30		$	33.11		$	43.26		$	52.42
Income (loss) from investment operations:
Net investment income (loss)a		(.32	)		(.41	)		(.46	)		(.65	)		(.84	)
Net gain (loss) on investments (realized and unrealized)		(6.82	)		1.94			(3.35	)		(9.50	)		(8.32	)
Total from investment operations		(7.14	)		1.53			(3.81	)		(10.15	)		(9.16	)
Net asset value, end of period	$	23.69		$	30.83		$	29.30		$	33.11		$	43.26
Total Returnb		(23.16	%)		5.22	%		(11.51	%)		(23.46	%)		(17.46	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,777		$	36,713		$	5,775		$	11,691		$	12,822
Ratios to average net assets:
Net investment income (loss)		(1.14	%)		(1.28	%)		(1.41	%)		(1.69	%)		(1.62	%)
Total expensesc		1.72	%		1.70	%		1.70	%		1.72	%		1.74	%
Portfolio turnover rate		58	%		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 | 147

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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^® (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, 2017, Dow Jones Industrial Average^® Fund maintained a daily correlation of over 99% to its benchmark of 100% of the daily price movement of the Dow Jones Industrial Average. Dow Jones Industrial Average Fund H-Class returned 18.20% while the Dow Jones Industrial Average returned 19.91% over the same period.

The sectors contributing the most to the performance of the underlying index for the period were Financials and Industrials. The Telecommunications Services sector was the only detractor; the Consumer Staples sector contributed the least to the performance of the underlying index for the period.

Goldman Sachs Group, Inc., Boeing Co., and UnitedHealth Group, Inc. contributed the most to the performance of the underlying index for the period. NIKE, Inc. Class B, Coca-Cola Co., and Verizon Communications, Inc. detracted the most from the 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 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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.

148 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 II	8.7%
Guggenheim Strategy Fund I	8.6%
Goldman Sachs Group, Inc.	4.3%
3M Co.	3.6%
Boeing Co.	3.3%
International Business Machines Corp.	3.3%
UnitedHealth Group, Inc.	3.1%
Home Depot, Inc.	2.8%
Apple, Inc.	2.7%
McDonald’s Corp.	2.4%
Top Ten Total	42.8%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Period Ended March 31, 2017

	1 Year	Since Inception (12/01/15)
A-Class Shares	18.10%	12.62%
A-Class Shares with sales charge†	12.49%	8.59%
C-Class Shares	17.21%	11.77%
C-Class Shares with CDSC‡	16.21%	11.77%
H-Class Shares	18.20%	12.68%
Dow Jones Industrial Average Index	19.91%	14.33%

*	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 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 | 149

SCHEDULE OF INVESTMENTS	March 31, 2017
DOW JONES INDUSTRIAL AVERAGE® FUND

	Shares		Value
COMMON STOCKS† - 56.8%
Financial - 11.4%
Goldman Sachs Group, Inc.		12,086	$	2,776,396
Travelers Cos., Inc.		12,086		1,456,846
Visa, Inc. — Class A		12,086		1,074,083
JPMorgan Chase & Co.		12,086		1,061,634
American Express Co.		12,086		956,123
Total Financial				7,325,082
Industrial - 11.3%
3M Co.		12,086		2,312,414
Boeing Co.		12,086		2,137,530
United Technologies Corp.		12,086		1,356,170
Caterpillar, Inc.		12,086		1,121,097
General Electric Co.		12,086		360,163
Total Industrial				7,287,374
Consumer, Non-cyclical - 9.8%
UnitedHealth Group, Inc.		12,086		1,982,225
Johnson & Johnson		12,086		1,505,312
Procter & Gamble Co.		12,086		1,085,927
Merck & Company, Inc.		12,086		767,944
Coca-Cola Co.		12,086		512,930
Pfizer, Inc.		12,086		413,462
Total Consumer, Non-cyclical				6,267,800
Technology - 7.9%
International Business Machines Corp.		12,086		2,104,656
Apple, Inc.		12,086		1,736,275
Microsoft Corp.		12,086		795,984
Intel Corp.		12,086		435,942
Total Technology				5,072,857
Consumer, Cyclical - 7.6%
Home Depot, Inc.		12,086		1,774,588
McDonald’s Corp.		12,086		1,566,466
Wal-Mart Stores, Inc.		12,086		871,159
NIKE, Inc. — Class B		12,086		673,553
Total Consumer, Cyclical				4,885,766
Communications - 3.7%
Walt Disney Co.		12,086		1,370,431
Verizon Communications, Inc.		12,086		589,193
Cisco Systems, Inc.		12,086		408,507
Total Communications				2,368,131
Energy - 3.6%
Chevron Corp.		12,086		1,297,674
Exxon Mobil Corp.		12,086		991,173
Total Energy				2,288,847
Basic Materials - 1.5%
EI du Pont de Nemours & Co.		12,086		970,868
Total Common Stocks
(Cost $32,370,990)				36,466,725
MUTUAL FUNDS† - 17.3%
Guggenheim Strategy Fund II1		222,337		5,558,437
Guggenheim Strategy Fund I1		221,467		5,547,747
Total Mutual Funds
(Cost $11,064,834)				11,106,184

	Face Amount
REPURCHASE AGREEMENTS††,2 - 8.7%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	2,825,922		2,825,922
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,820,565		1,820,565
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/173		634,541		634,541
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		279,066		279,066
Total Repurchase Agreements
(Cost $5,560,094)				5,560,094
Total Investments - 82.8%
(Cost $48,995,918)			$	53,133,003
Other Assets & Liabilities, net - 17.2%				11,029,902
Total Net Assets - 100.0%			$	64,162,905

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 Dow Jones Industrial Average Index Mini Futures Contracts (Aggregate Value of Contracts $14,418,600)		140	$	(46,288	)

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 Dow Jones Industrial Average Swap Index 1.23%4, Terminating 04/28/17 (Notional Value $9,178,749)		444	$	8,108
Barclays Bank plc April 2017 Dow Jones Industrial Average Swap Index 1.31%4, Terminating 04/28/17 (Notional Value $4,157,310)		201		(13,544	)
(Total Notional Value $13,336,059)			$	(5,436	)

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
DOW JONES INDUSTRIAL AVERAGE® FUND

†	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, 2017.
4	Total Return based on Dow Jones Industrial Average Index +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2017.
	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, 2017 (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	$	36,466,725	$	—	$	—	$	—	$	—	$	36,466,725
Equity Index Swap Agreements		—		—		—		8,108		—		8,108
Mutual Funds		11,106,184		—		—		—		—		11,106,184
Repurchase Agreements		—		—		5,560,094		—		—		5,560,094
Total	$	47,572,909	$	—	$	5,560,094	$	8,108	$	—	$	53,141,111

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	46,288	$	—	$	—	$	—	$	46,288
Equity Index Swap Agreements		—		—		—		13,544		—		13,544
Total	$	—	$	46,288	$	—	$	13,544	$	—	$	59,832

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

DOW JONES INDUSTRIAL AVERAGE^® FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $32,370,990)	$	36,466,725
Investments in affiliated issuers, at value (cost $11,064,834)		11,106,184
Repurchase agreements, at value (cost $5,560,094)		5,560,094
Total investments (cost $48,995,918)		53,133,003
Segregated cash with broker		764,000
Unrealized appreciation on swap agreements		8,108
Receivables:
Swap settlement		2,698
Fund shares sold		10,419,759
Dividends		48,236
Interest		109
Securities lending income		23
Total assets		64,375,936
Liabilities:
Unrealized depreciation on swap agreements		13,544
Payable for:
Fund shares redeemed		55,839
Management fees		39,220
Variation margin		29,193
Licensing fees		19,155
Distribution and service fees		14,402
Transfer agent and administrative fees		13,073
Portfolio accounting fees		5,229
Miscellaneous		23,376
Total liabilities		213,031
Commitments and contingent liabilities (Note 14)		—
Net assets	$	64,162,905
Net assets consist of:
Paid in capital	$	59,558,838
Undistributed net investment income		186,787
Accumulated net realized gain on investments		331,919
Net unrealized appreciation on investments		4,085,361
Net assets	$	64,162,905
A-Class:
Net assets	$	19,523,459
Capital shares outstanding		335,176
Net asset value per share	$	58.25
Maximum offering price per share(Net asset value divided by 95.25%)	$	61.15
C-Class:
Net assets	$	2,144,326
Capital shares outstanding		37,189
Net asset value per share	$	57.66
H-Class:
Net assets	$	42,495,120
Capital shares outstanding		729,096
Net asset value per share	$	58.28

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers	$	803,806
Dividends from securities of affiliated issuers		120,136
Interest		16,499
Income from securities lending, net		888
Total investment income		941,329
Expenses:
Management fees		339,784
Transfer agent and administrative fees		113,261
Distribution and service fees:
A-Class		20,427
C-Class		12,914
H-Class		89,606
Portfolio accounting fees		45,304
Custodian fees		6,429
Trustees’ fees*		2,890
Line of credit fees		209
Miscellaneous		90,700
Total expenses		721,524
Net investment income		219,805
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		2,730,515
Investments in affiliated issuers		3,249
Swap agreements		1,187,421
Futures contracts		616,381
Net realized gain		4,537,566
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		3,342,410
Investments in affiliated issuers		42,054
Swap agreements		(48,681	)
Futures contracts		(207,006	)
Net change in unrealized appreciation(depreciation)		3,128,777
Net realized and unrealized gain		7,666,343
Net increase in net assets resulting from operations	$	7,886,148

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

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

DOW JONES INDUSTRIAL AVERAGE^® FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Period Ended March 31, 2016a
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	219,805		$	(10,240	)
Net realized gain (loss) on investments		4,537,566			(350,012	)
Net change in unrealized appreciation (depreciation) on investments		3,128,777			956,584
Net increase in net assets resulting from operations		7,886,148			596,332
Distributions to shareholders from:
Net investment income
A-Class		(3,923	)		—
C-Class		(619	)		—
H-Class		(28,476	)		—
Net realized gains
A-Class		(53,197	)		—
C-Class		(8,391	)		—
H-Class		(386,186	)		—
Total distributions to shareholders		(480,792	)		—
Capital share transactions:
Proceeds from sale of shares
A-Class		37,739,580			62,850,014
C-Class		1,702,969			930,648
H-Class		461,245,485			34,887,020
Distributions reinvested
A-Class		57,061			—
C-Class		8,981			—
H-Class		414,467			—
Cost of shares redeemed
A-Class		(63,683,914	)		(19,048,769	)
C-Class		(522,595	)		(221,789	)
H-Class		(444,210,303	)		(15,987,638	)
Net increase (decrease) from capital share transactions		(7,248,269	)		63,409,486
Net increase in net assets		157,087			64,005,818
Net assets:
Beginning of period		64,005,818			—
End of period	$	64,162,905		$	64,005,818
Undistributed net investment income at end of period	$	186,787		$	—
Capital share activity:
Shares sold
A-Class		676,602			1,299,093
C-Class		32,390			19,674
H-Class		8,685,078			716,927
Shares issued from reinvestment of distributions
A-Class		1,061			—
C-Class		168			—
H-Class		7,701			—
Shares redeemed
A-Class		(1,236,579	)		(405,001	)
C-Class		(10,162	)		(4,881	)
H-Class		(8,345,243	)		(335,367	)
Net increase (decrease) in shares		(188,984	)		1,290,445

^a Since commencement of operations: December 1, 2015.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 153

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 periods presented.

A-Class	Year Ended March 31, 2017			Period Ended March 31, 2016a
Per Share Data
Net asset value, beginning of period	$	49.60		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		.23			(.03	)
Net gain (loss) on investments (realized and unrealized)		8.73			(.37	)
Total from investment operations		8.96			(.40	)
Less distributions from:
Net investment income		(.02	)		—
Net realized gains		(.29	)		—
Total distributions		(.31	)		—
Net asset value, end of period	$	58.25		$	49.60
Total Returnd		18.10	%		(0.80	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	19,523		$	44,351
Ratios to average net assets:
Net investment income (loss)		0.44	%		(0.21	%)
Total expensesc		1.56	%		1.55	%
Portfolio turnover rate		668	%		98	%

C-Class	Year Ended March 31, 2017			Period Ended March 31, 2016a
Per Share Data
Net asset value, beginning of period	$	49.47		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		(.11	)		(.07	)
Net gain (loss) on investments (realized and unrealized)		8.61			(.46	)
Total from investment operations		8.50			(.53	)
Less distributions from:
Net investment income		(.02	)		—
Net realized gains		(.29	)		—
Total distributions		(.31	)		—
Net asset value, end of period	$	57.66		$	49.47
Total Returnd		17.21	%		(1.06	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,144		$	732
Ratios to average net assets:
Net investment income (loss)		(0.21	%)		(0.43	%)
Total expensesc		2.32	%		2.30	%
Portfolio turnover rate		668	%		98	%

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

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 periods presented.

H-Class	Year Ended March 31, 2017			Period Ended March 31, 2016a
Per Share Data
Net asset value, beginning of period	$	49.59		$	50.00
Income (loss) from investment operations:
Net investment income (loss)b		.28			(.03	)
Net gain (loss) on investments (realized and unrealized)		8.72			(.38	)
Total from investment operations		9.00			(.41	)
Less distributions from:
Net investment income		(.02	)		—
Net realized gains		(.29	)		—
Total distributions		(.31	)		—
Net asset value, end of period	$	58.28		$	49.59
Total Returnd		18.20	%		(0.82	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	42,495		$	18,923
Ratios to average net assets:
Net investment income (loss)		0.52	%		(0.17	%)
Total expensesc		1.57	%		1.55	%
Portfolio turnover rate		668	%		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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, the Government Long Bond 1.2x Strategy Fund Investor Class returned -8.39%. The price movement of the Long Treasury Bond was -8.88% for the same period. The return of a comparison index, Bloomberg Barclays Long U.S. Treasury Index, was -5.00%. The Fund maintained a daily correlation of over 95% to its benchmark.

Prices of 30-year U.S. Treasurys fell over the period, as yields rose from 2.62% at the end of March 2016 to 3.02% at end of March 2017. Within that time, however, investor demand for yield as global central banks remained dovish pushed the 30-year bond to a record low in July 2016, when the yield touched 2.11%.

The U.S. Federal Reserve kept short-term rates unchanged until the December 2016 Federal Open Market Committee (FOMC) meeting, when it raised short-term rates by 25 basis points to a range of 0.50–0.75%. On March 15, 2017, the FOMC raised the fed funds target rate by another 25 basis points to a range of 0.75–1.0%, sending the yield on the 30-year government to about 3.19%, its high for the period.

By the end of the period, rates were falling again from their relatively low levels, as the U.S. Congress struggled to pass pro-growth policies and geopolitical/military risk started rising, lowering investor expectations that government actions might provide a boost to growth and inflation.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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

156 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2017

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	45.3%
Guggenheim Strategy Fund II	11.8%
Guggenheim Strategy Fund I	11.2%
Total	68.3%

“Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 157

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	-8.39%	4.90%	7.59%
A-Class Shares	-8.54%	4.77%	7.39%
A-Class Shares with sales charge†	-12.89%	3.76%	6.87%
C-Class Shares	-9.24%	3.92%	6.54%
C-Class Shares with CDSC‡	-10.11%	3.92%	6.54%
Daily Price Movement of Long Treasury Bond**	-8.88%	0.68%	2.67%
Barclays Long Treasury Bond Index	-5.00%	4.04%	6.71%

	1 Year	Since Inception (09/18/14)
H-Class Shares	-8.55%	4.62%
Barclays Long Treasury Bond Index	-5.00%	4.96%
Daily Price Movement of Long Treasury Bond**	-8.88%	1.74%

*	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.

158 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
GOVERNMENT LONG BOND 1.2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 23.0%
Guggenheim Strategy Fund II1		218,714	$	5,467,852
Guggenheim Strategy Fund I1		205,882		5,157,351
Total Mutual Funds
(Cost $10,575,437)				10,625,203

	Face Amount
U.S. GOVERNMENT SECURITIES†† - 45.3%
U.S. Treasury Bond
3.00% due 02/15/47	$	21,000,000	20,911,406
Total U.S. Government Securities
(Cost $20,478,438)			20,911,406
U.S. TREASURY BILLS†† - 1.6%
U.S. Treasury Bill
0.52% due 05/11/172,3,4		750,000	749,431
Total U.S. Treasury Bills
(Cost $749,562)			749,431

REPURCHASE AGREEMENTS††,5 - 29.3%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	7,182,652		7,182,652
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	4,627,333		4,627,333
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17	1,002,167		1,002,167
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	709,303		709,303
Total Repurchase Agreements
(Cost $13,521,455)			13,521,455
Total Investments - 99.2%
(Cost $45,324,892)		$	45,807,495
Other Assets & Liabilities, net - 0.8%			363,087
Total Net Assets - 100.0%		$	46,170,582

	Contracts		Unrealized Gain
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2017 U.S. Treasury Ultra Long Bond Futures Contracts (Aggregate Value of Contracts $38,374,438)		239	$	342,415

†	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	All or a portion of this security is pledged as futures collateral at March 31, 2017.
3	Rate indicated is the effective yield at the time of purchase.
4	Zero coupon rate security.
5	Repurchase Agreements — See Note 5.
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
GOVERNMENT LONG BOND 1.2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	—	$	342,415	$	—	$	—	$	—	$	342,415
Mutual Funds		10,625,203		—		—		—		—		10,625,203
Repurchase Agreements		—		—		13,521,455		—		—		13,521,455
U.S. Government Securities		—		—		20,911,406		—		—		20,911,406
U.S. Treasury Bills		—		—		749,431		—		—		749,431
Total	$	10,625,203	$	342,415	$	35,182,292	$	—	$	—	$	46,149,910

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $21,228,000)	$	21,660,837
Investments in affiliated issuers, at value (cost $10,575,437)		10,625,203
Repurchase agreements, at value (cost $13,521,455)		13,521,455
Total investments (cost $45,324,892)		45,807,495
Segregated cash with broker		519,153
Receivables:
Variation margin		61,985
Securities sold		5,775,531
Fund shares sold		165,941
Dividends		19,278
Interest		122,673
Total assets		52,472,056
Liabilities:
Payable for:
Fund shares redeemed		6,180,676
Management fees		37,205
Distribution and service fees		14,975
Transfer agent and administrative fees		14,882
Portfolio accounting fees		7,441
Miscellaneous		46,295
Total liabilities		6,301,474
Commitments and contingent liabilities (Note 14)		—
Net assets	$	46,170,582
Net assets consist of:
Paid in capital	$	53,861,135
Undistributed net investment income		2,469
Accumulated net realized loss on investments		(8,518,040	)
Net unrealized appreciation on investments		825,018
Net assets	$	46,170,582
Investor Class:
Net assets	$	16,495,887
Capital shares outstanding		326,735
Net asset value per share	$	50.49
A-Class:
Net assets	$	15,827,424
Capital shares outstanding		311,126
Net asset value per share	$	50.87
Maximum offering price per share(Net asset value divided by 95.25%)	$	53.41
C-Class:
Net assets	$	1,770,484
Capital shares outstanding		35,042
Net asset value per share	$	50.52
H-Class:
Net assets	$	12,076,787
Capital shares outstanding		237,207
Net asset value per share	$	50.91

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 161

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	1,840,428
Dividends from securities of affiliated issuers		255,392
Total investment income		2,095,820
Expenses:
Management fees		469,631
Transfer agent and administrative fees		187,854
Distribution and service fees:
A-Class		26,994
C-Class		27,954
H-Class		75,272
Portfolio accounting fees		93,925
Registration fees		77,846
Custodian fees		14,428
Trustees’ fees*		8,200
Line of credit fees		2,533
Tax expense		257
Miscellaneous		62,766
Total expenses		1,047,660
Net investment income		1,048,160
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	(4,564,954	)
Investments in affiliated issuers		155,073
Futures contracts		(1,075,433	)
Net realized loss		(5,485,314	)
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		(903,124	)
Investments in affiliated issuers		37,160
Futures contracts		(1,162,467	)
Net change in unrealized appreciation(depreciation)		(2,028,431	)
Net realized and unrealized loss		(7,513,745	)
Net decrease in net assets resulting from operations	$	(6,465,585	)

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

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

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	1,048,160		$	1,571,845
Net realized gain (loss) on investments		(5,485,314	)		17,793,226
Net change in unrealized appreciation (depreciation) on investments		(2,028,431	)		(1,775,157	)
Net increase (decrease) in net assets resulting from operations		(6,465,585	)		17,589,914
Distributions to shareholders from:
Net investment income
Investor Class		(609,269	)		(951,034	)
Advisor Class		—			(40,983	)*
A-Class		(128,172	)		(53,217	)
C-Class		(6,597	)		(29,111	)
H-Class		(301,653	)		(903,740	)*
Net realized gains
Investor Class		(808,891	)		—
Advisor Class		—			—	*
A-Class		(98,621	)		—
C-Class		(79,454	)		—
H-Class		(675,371	)		—	*
Total distributions to shareholders		(2,708,028	)		(1,978,085	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		1,300,421,018			883,887,497
Advisor Class		—			209,857,554	*
A-Class		46,105,383			40,024,720
C-Class		7,485,391			10,755,886
H-Class		1,635,285,193			3,211,356,226	*
Distributions reinvested
Investor Class		1,395,924			945,843
Advisor Class		—			40,282	*
A-Class		218,258			49,337
C-Class		81,014			26,814
H-Class		976,087			902,679	*
Cost of shares redeemed
Investor Class		(1,329,635,477	)		(897,206,827	)
Advisor Class		—			(212,004,112	)*
A-Class		(39,972,613	)		(34,656,013	)
C-Class		(8,731,488	)		(10,299,100	)
H-Class		(1,677,056,978	)		(3,257,317,015	)*
Conversion Activity*
Advisor Class		—			(7,238,724	)
H-Class		—			7,238,724
Net decrease from capital share transactions		(63,428,288	)		(53,636,229	)
Net decrease in net assets		(72,601,901	)		(38,024,400	)
Net assets:
Beginning of year		118,772,483			156,796,883
End of year	$	46,170,582		$	118,772,483
Undistributed net investment income at end of year	$	2,469		$	—

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 163

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:
Shares sold
Investor Class		22,993,824			16,290,807
Advisor Class		—			3,932,239	*
A-Class		909,264			741,077
C-Class		131,201			196,471
H-Class		28,369,982			58,647,379	*
Shares issued from reinvestment of distributions
Investor Class		26,070			17,306
Advisor Class		—			756	*
A-Class		4,205			905
C-Class		1,574			498
H-Class		18,344			16,483	*
Shares redeemed
Investor Class		(23,663,874	)		(16,377,059	)
Advisor Class		—			(3,973,055	)*
A-Class		(763,665	)		(645,888	)
C-Class		(154,091	)		(189,233	)
H-Class		(28,998,992	)		(59,266,476	)*
Conversion Activity*
Advisor Class		—			(133,556	)
H-Class		—			131,901
Net decrease in shares		(1,126,158	)		(609,445	)

* Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

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

GOVERNMENT LONG BOND 1.2x STRATEGY FUND

FINANCIAL HIGHLIGHTS

This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.

Investor Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	58.12		$	59.12		$	45.80		$	48.55		$	44.73
Income (loss) from investment operations:
Net investment income (loss)a		.70			.76			.63			.61			.57
Net gain (loss) on investments (realized and unrealized)		(5.50	)		(.67	)		13.34			(2.76	)		4.21
Total from investment operations		(4.80	)		.09			13.97			(2.15	)		4.78
Less distributions from:
Net investment income		(.72	)		(1.09	)		(.65	)		(.60	)		(.72	)
Net realized gains		(2.11	)		—			—			—			(.24	)
Total distributions		(2.83	)		(1.09	)		(.65	)		(.60	)		(.96	)
Net asset value, end of period	$	50.49		$	58.12		$	59.12		$	45.80		$	48.55
Total Returnb		(8.39	%)		0.33	%		30.66	%		(4.37	%)		10.63	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	16,496		$	56,419		$	61,460		$	43,573		$	281,800
Ratios to average net assets:
Net investment income (loss)		1.21	%		1.39	%		1.21	%		1.22	%		1.15	%
Total expensesc		0.98	%		0.94	%		0.95	%		0.97	%		0.95	%
Portfolio turnover rate		2,490	%		2,699	%		1,932	%		2,661	%		1,759	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	58.50		$	59.47		$	46.07		$	48.73		$	44.77
Income (loss) from investment operations:
Net investment income (loss)a		.63			.64			.51			.48			.48
Net gain (loss) on investments (realized and unrealized)		(5.57	)		(.65	)		13.42			(2.65	)		4.29
Total from investment operations		(4.94	)		(.01	)		13.93			(2.17	)		4.77
Less distributions from:
Net investment income		(.58	)		(.96	)		(.53	)		(.49	)		(.57	)
Net realized gains		(2.11	)		—			—			—			(.24	)
Total distributions		(2.69	)		(.96	)		(.53	)		(.49	)		(.81	)
Net asset value, end of period	$	50.87		$	58.50		$	59.47		$	46.07		$	48.73
Total Returnb		(8.54	%)		0.12	%		30.37	%		(4.40	%)		10.62	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	15,827		$	9,438		$	3,879		$	1,724		$	15,476
Ratios to average net assets:
Net investment income (loss)		1.19	%		1.16	%		0.97	%		1.04	%		0.94	%
Total expensesc		1.24	%		1.20	%		1.20	%		1.22	%		1.20	%
Portfolio turnover rate		2,490	%		2,699	%		1,932	%		2,661	%		1,759	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 165

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	58.13		$	59.09		$	45.79		$	48.51		$	44.63
Income (loss) from investment operations:
Net investment income (loss)a		.13			.22			.13			.12			.15
Net gain (loss) on investments (realized and unrealized)		(5.47	)		(.64	)		13.30			(2.71	)		4.21
Total from investment operations		(5.34	)		(.42	)		13.43			(2.59	)		4.36
Less distributions from:
Net investment income		(.16	)		(.54	)		(.13	)		(.13	)		(.24	)
Net realized gains		(2.11	)		—			—			—			(.24	)
Total distributions		(2.27	)		(.54	)		(.13	)		(.13	)		(.48	)
Net asset value, end of period	$	50.52		$	58.13		$	59.09		$	45.79		$	48.51
Total Returnb		(9.24	%)		(0.62	%)		29.37	%		(5.33	%)		9.69	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,770		$	3,276		$	2,873		$	3,198		$	4,594
Ratios to average net assets:
Net investment income (loss)		0.22	%		0.41	%		0.26	%		0.34	%		0.31	%
Total expensesc		1.97	%		1.95	%		1.95	%		1.97	%		1.94	%
Portfolio turnover rate		2,490	%		2,699	%		1,932	%		2,661	%		1,759	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Period Ended March 28, 2015d
Per Share Data
Net asset value, beginning of period	$	58.55		$	59.44		$	48.83
Income (loss) from investment operations:
Net investment income (loss)a		.58			.61			.28
Net gain (loss) on investments (realized and unrealized)		(5.53	)		(.54	)		10.59
Total from investment operations		(4.95	)		.07			10.87
Less distributions from:
Net investment income		(.58	)		(.96	)		(.26	)
Net realized gains		(2.11	)		—			—
Total distributions		(2.69	)		(.96	)		(.26	)
Net asset value, end of period	$	50.91		$	58.55		$	59.44
Total Returnb		(8.55	%)		0.26	%		22.28	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	12,077		$	49,639		$	78,382
Ratios to average net assets:
Net investment income (loss)		1.00	%		1.11	%		0.89	%
Total expensesc		1.22	%		1.20	%		1.18	%
Portfolio turnover rate		2,490	%		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 Funds, 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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, the Inverse Government Long Bond Strategy Fund Investor Class returned 5.08%. The price movement of the Long Treasury Bond was -8.88% for the same period. The return of a comparison index, Bloomberg Barclays Long U.S. Treasury Index, was -5.00%. The Fund maintained a daily correlation of over 95% to its benchmark.

Prices of 30-year U.S. Treasurys fell over the period, as yields rose from 2.62% at the end of March 2016 to 3.02% at end of March 2017. Within that time, however, investor demand for yield as global central banks remained dovish pushed the 30-year bond to a record low in July 2016, when the yield touched 2.11%.

The U.S. Federal Reserve kept short-term rates unchanged until the December 2016 Federal Open Market Committee (FOMC) meeting, when it raised short-term rates by 25 basis points to a range of 0.50–0.75%. On March 15, 2017, the FOMC raised the fed funds target rate by another 25 basis points to a range of 0.75–1.0%, sending the yield on the 30-year government to about 3.19%, its high for the period.

By the end of the period, rates were falling again from their relatively low levels, as the U.S. Congress struggled to pass pro-growth policies and geopolitical/military risk started rising, lowering investor expectations that government actions might provide a boost to growth and inflation.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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

THE RYDEX FUNDS ANNUAL REPORT | 167

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2017

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 Holdings (% of Total Net Assets)
Guggenheim Strategy Fund I	7.1%
Guggenheim Strategy Fund II	6.3%
Total	13.4%

“Largest Holdings” excludes any temporary cash or derivative investments.

168 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	5.08%	-5.72%	-9.09%
A-Class Shares	4.83%	-5.96%	-9.32%
A-Class Shares with sales charge†	-0.14%	-6.87%	-9.76%
C-Class Shares	4.04%	-6.66%	-9.99%
C-Class Shares with CDSC‡	3.04%	-6.66%	-9.99%
Daily Price Movement of Long Treasury Bond**	-8.88%	0.68%	2.67%
Barclays Long Treasury Bond Index	-5.00%	4.04%	6.71%

	1 Year	Since Inception (09/18/14)
H Class Shares	5.13%	-7.01%
Daily Price Movement of Long Treasury Bond**	-8.88%	1.74%
Barclays Long Treasury Bond Index	-5.00%	4.96%

*	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 the 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 | 169

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE GOVERNMENT LONG BOND STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 13.4%
Guggenheim Strategy Fund I1		483,680	$	12,116,192
Guggenheim Strategy Fund II1		424,204		10,605,112
Total Mutual Funds
(Cost $22,537,267)				22,721,304

	Face Amount
FEDERAL AGENCY NOTES†† - 51.1%
Freddie Mac2
0.75% due 10/26/183	$	17,000,000	16,976,659
0.63% due 11/16/183		15,000,000	14,996,730
0.63% due 05/15/183		2,500,000	2,498,830
Total Freddie Mac			34,472,219
Federal Farm Credit Bank4
1.15% due 08/10/185		15,000,000	15,010,110
0.93% due 04/03/175		6,800,000	6,800,001
1.07% due 09/18/175		1,875,000	1,877,006
1.22% due 06/12/185		1,300,000	1,303,700
1.25% due 07/18/185		1,000,000	1,003,461
1.04% due 05/11/185		1,000,000	1,001,338
1.09% due 06/13/175		200,000	200,086
1.00% due 04/10/175		100,000	100,001
Total Federal Farm Credit Bank			27,295,703
Federal Home Loan Bank4
0.63% due 11/23/183		25,000,000	24,997,225
Total Federal Agency Notes
(Cost $86,747,413)			86,765,147
FEDERAL AGENCY BONDS†† - 7.2%
Farmer Mac4
5.13% due 04/19/17		8,000,000	8,015,800
Private Export Funding Corp.
2.25% due 12/15/17		3,255,000	3,279,273
Federal Agricultural Mortgage Corp.
1.23% due 01/25/185		1,000,000	1,002,987
Total Federal Agency Bonds
(Cost $12,299,140)			12,298,060
U.S. TREASURY BILLS†† - 6.8%
U.S. Treasury Bill
0.71% due 04/27/176,7		10,000,000	9,995,130
0.52% due 05/11/176,7,8		1,500,000	1,498,862
Total U.S. Treasury Bills
(Cost $11,493,996)			11,493,992

FEDERAL AGENCY DISCOUNT NOTES†† - 5.3%
Federal Home Loan Bank4
0.75% due 04/10/17	4,900,000		4,899,081
0.67% due 04/05/17	1,900,000		1,899,842
Total Federal Home Loan Bank			6,798,923
Fannie Mae2
0.52% due 04/03/17	2,200,000		2,199,937
Total Federal Agency Discount Notes
(Cost $8,998,860)			8,998,860
REPURCHASE AGREEMENTS††,9 - 102.7%
Individual Repurchase Agreements
Barclays Capital issued 03/31/17 at 0.55% due 04/03/17 (secured by U.S. Treasury Bond, at a rate of 3.00% and maturing 02/15/47 as collateral, with a value of $77,171,670) to be repurchased at $75,659,657	75,658,501		75,658,501
Mizuho Financial Group, Inc. issued 03/31/17 at 0.75% due 04/03/17 (secured by U.S. Treasury Bond, at a rate of 3.00% and maturing 02/15/47 as collateral, with a value of $64,720,376) to be repurchased at $63,453,171	63,451,849		63,451,849
Joint Repurchase Agreements
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	18,782,219		18,782,219
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	12,100,208		12,100,208
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17	2,620,610		2,620,610
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	1,854,787		1,854,787
Total Repurchase Agreements
(Cost $174,468,174)			174,468,174
Total Investments - 186.5%
(Cost $316,544,850)		$	316,745,537
U.S. Government Securities Sold Short†† - (80.1)%
U.S. Treasury Bond
3.00% due 02/15/47	136,600,000		(136,023,720	)
Total U.S. Government Securities Sold Short
(Proceeds $135,600,483)			(136,023,720	)
Other Assets & Liabilities, net - (6.4)%			(10,794,163	)
Total Net Assets - 100.0%		$	169,927,654

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
INVERSE GOVERNMENT LONG BOND STRATEGY FUND

	Contracts		Unrealized Loss
INTEREST RATE FUTURES CONTRACTS SOLD SHORT†
June 2017 U.S. Treasury Ultra Long Bond Futures Contracts (Aggregate Value of Contracts $37,892,750)		236	$	(54,140	)

†	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	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
4	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
5	Variable rate security. Rate indicated is rate effective at March 31, 2017.
6	Rate indicated is the effective yield at the time of purchase.
7	Zero coupon rate security.
8	All or a portion of this security is pledged as futures collateral at March 31, 2017.
9	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, 2017 (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 Bonds	$	—	$	—	$	12,298,060	$	—	$	—	$	12,298,060
Federal Agency Discount Notes		—		—		8,998,860		—		—		8,998,860
Federal Agency Notes		—		—		86,765,147		—		—		86,765,147
Mutual Funds		22,721,304		—		—		—		—		22,721,304
Repurchase Agreements		—		—		174,468,174		—		—		174,468,174
U.S. Treasury Bills		—		—		11,493,992		—		—		11,493,992
Total	$	22,721,304	$	—	$	294,024,233	$	—	$	—	$	316,745,537

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Interest Rate Futures Contracts	$	—	$	54,140	$	—	$	—	$	—	$	54,140
U.S. Government Securities		—		—		136,023,720		—		—		136,023,720
Total	$	—	$	54,140	$	136,023,720	$	—	$	—	$	136,077,860

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 171

INVERSE GOVERNMENT LONG BOND STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $119,539,409)	$	119,556,059
Investments in affiliated issuers, at value (cost $22,537,267)		22,721,304
Repurchase agreements, at value (cost $174,468,174)		174,468,174
Total investments (cost $316,544,850)		316,745,537
Receivables:
Fund shares sold		622,245
Dividends		41,350
Interest		391,133
Total assets		317,800,265
Liabilities:
Securities sold short, at value (proceeds $135,600,483)		136,023,720
Payable for:
Securities purchased		5,675,953
Fund shares redeemed		5,330,260
Management fees		112,291
Variation margin		59,000
Transfer agent and administrative fees		31,192
Distribution and service fees		28,126
Portfolio accounting fees		12,476
Miscellaneous		599,593
Total liabilities		147,872,611
Commitments and contingent liabilities (Note 14)		—
Net assets	$	169,927,654
Net assets consist of:
Paid in capital	$	510,618,196
Accumulated net investment loss		(1,212,038	)
Accumulated net realized loss on investments		(339,201,814	)
Net unrealized depreciation on investments		(276,690	)
Net assets	$	169,927,654
Investor Class:
Net assets	$	84,122,862
Capital shares outstanding		2,335,716
Net asset value per share	$	36.02
A-Class:
Net assets	$	18,677,960
Capital shares outstanding		538,110
Net asset value per share	$	34.71
Maximum offering price per share(Net asset value divided by 95.25%)	$	36.44
C-Class:
Net assets	$	23,342,602
Capital shares outstanding		761,487
Net asset value per share	$	30.65
H-Class:
Net assets	$	43,784,230
Capital shares outstanding		1,257,190
Net asset value per share	$	34.83

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

INVERSE GOVERNMENT LONG BOND STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	893,345
Dividends from securities of affiliated issuers		468,957
Total investment income		1,362,302
Expenses:
Management fees		1,527,653
Transfer agent and administrative fees		424,348
Distribution and service fees:
A-Class		43,778
C-Class		244,182
H-Class		84,846
Portfolio accounting fees		169,737
Short interest expense		3,331,147
Custodian fees		24,862
Trustees’ fees*		15,366
Line of credit fees		921
Miscellaneous		257,810
Total expenses		6,124,650
Net investment loss		(4,762,348	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	81,444
Investments in affiliated issuers		83,900
Futures contracts		347,089
Securities sold short		8,479,955
Net realized gain		8,992,388
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		54,067
Investments in affiliated issuers		187,171
Securities sold short		(216,350	)
Futures contracts		(373,121	)
Net change in unrealized appreciation(depreciation)		(348,233	)
Net realized and unrealized gain		8,644,155
Net increase in net assets resulting from operations	$	3,881,807

* 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 | 173

INVERSE GOVERNMENT LONG BOND STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017				Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(4,762,348	)		$	(6,742,953	)
Net realized gain (loss) on investments		8,992,388				(2,550,139	)
Net change in unrealized appreciation (depreciation) on investments		(348,233	)			3,855,117
Net increase (decrease) in net assets resulting from operations		3,881,807				(5,437,975	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		1,461,086,838				419,488,684
Advisor Class		—				77,182,234	*
A-Class		10,846,573				21,327,705
C-Class		6,375,655				10,592,963
H-Class		2,601,327,502				2,119,121,239
Cost of shares redeemed
Investor Class		(1,471,262,255	)			(430,488,671	)
Advisor Class		—				(80,838,817	)*
A-Class		(10,739,740	)			(24,329,743	)
C-Class		(11,684,154	)			(17,049,334	)
H-Class		(2,627,383,990	)			(2,100,739,161	)
Conversion activity*
Advisor Class		—				(8,597,033	)
H-Class		—				8,597,033
Net decrease from capital share transactions		(41,433,571	)			(5,732,901	)
Net decrease in net assets		(37,551,764	)			(11,170,876	)
Net assets:				��
Beginning of year		207,479,418				218,650,294
End of year	$	169,927,654			$	207,479,418
Accumulated net investment loss at end of year	$	(1,212,038	)		$	(1,260,455	)
Capital share activity:
Shares sold
Investor Class		44,231,107				11,180,250
Advisor Class						2,146,208	*
A-Class		330,693				580,663
C-Class		220,928				319,610
H-Class		79,320,319				58,800,072
Shares redeemed
Investor Class		(44,494,650	)			(11,534,880	)
Advisor Class						(2,246,748	)*
A-Class		(326,449	)			(669,422	)
C-Class		(406,484	)			(527,194	)
H-Class		(80,262,131	)			(58,103,890	)
Conversion activity*
Advisor Class		—				(245,419	)
H-Class		—				239,405
Net decrease in shares		(1,386,667	)			(61,345	)

* Effective September 30, 2015, all outstanding Advisor Class shares converted into H-Class shares — See Note 12.

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	34.27		$	35.78		$	46.01		$	43.94		$	48.33
Income (loss) from investment operations:
Net investment income (loss)a		(.88	)		(1.15	)		(1.15	)		(1.65	)		(1.20	)
Net gain (loss) on investments (realized and unrealized)		2.63			(.36	)		(9.08	)		3.72			(3.19	)
Total from investment operations		1.75			(1.51	)		(10.23	)		2.07			(4.39	)
Net asset value, end of period	$	36.02		$	34.27		$	35.78		$	46.01		$	43.94
Total Returnb		5.08	%		(4.22	%)		(22.23	%)		4.69	%		(9.10	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	84,123		$	89,071		$	105,696		$	177,735		$	143,739
Ratios to average net assets:
Net investment income (loss)		(2.59	%)		(3.07	%)		(2.80	%)		(3.46	%)		(2.82	%)
Total expensesc,f		3.38	%		3.48	%		3.15	%		3.50	%		2.99	%
Portfolio turnover rate		1,436	%		838	%		2,190	%		1,097	%		1,309	%

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	33.11		$	34.66		$	44.68		$	42.77		$	47.18
Income (loss) from investment operations:
Net investment income (loss)a		(.94	)		(1.20	)		(1.23	)		(1.73	)		(1.35	)
Net gain (loss) on investments (realized and unrealized)		2.54			(.35	)		(8.79	)		3.64			(3.06	)
Total from investment operations		1.60			(1.55	)		(10.02	)		1.91			(4.41	)
Net asset value, end of period	$	34.71		$	33.11		$	34.66		$	44.68		$	42.77
Total Returnb		4.83	%		(4.47	%)		(22.43	%)		4.51	%		(9.43	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	18,678		$	17,676		$	21,580		$	49,859		$	32,842
Ratios to average net assets:
Net investment income (loss)		(2.85	%)		(3.32	%)		(3.06	%)		(3.73	%)		(3.20	%)
Total expensesc,f		3.67	%		3.75	%		3.40	%		3.78	%		3.37	%
Portfolio turnover rate		1,436	%		838	%		2,190	%		1,097	%		1,309	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 175

INVERSE GOVERNMENT LONG BOND STRATEGY 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.

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014e			Year Ended March 28, 2013e
Per Share Data
Net asset value, beginning of period	$	29.46		$	31.07		$	40.35		$	38.92		$	43.25
Income (loss) from investment operations:
Net investment income (loss)a		(1.05	)		(1.31	)		(1.36	)		(1.86	)		(1.50	)
Net gain (loss) on investments (realized and unrealized)		2.24			(.30	)		(7.92	)		3.29			(2.83	)
Total from investment operations		1.19			(1.61	)		(9.28	)		1.43			(4.33	)
Net asset value, end of period	$	30.65		$	29.46		$	31.07		$	40.35		$	38.92
Total Returnb		4.04	%		(5.18	%)		(23.00	%)		3.73	%		(10.06	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	23,343		$	27,899		$	35,874		$	57,323		$	55,404
Ratios to average net assets:
Net investment income (loss)		(3.59	%)		(4.08	%)		(3.78	%)		(4.45	%)		(3.96	%)
Total expensesc,f		4.41	%		4.50	%		4.14	%		4.49	%		4.13	%
Portfolio turnover rate		1,436	%		838	%		2,190	%		1,097	%		1,309	%

H-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	33.12		$	34.67		$	41.85
Income (loss) from investment operations:
Net investment income (loss)a		(.92	)		(1.15	)		(.52	)
Net gain (loss) on investments (realized and unrealized)		2.63			(.40	)		(6.66	)
Total from investment operations		1.71			(1.55	)		(7.18	)
Net asset value, end of period	$	34.83		$	33.12		$	34.67
Total Returnb		5.13	%		(4.47	%)		(17.16	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	43,784		$	72,833		$	43,800
Ratios to average net assets:
Net investment income (loss)		(2.80	%)		(3.17	%)		(2.75	%)
Total expensesc,f		3.60	%		3.61	%		3.07	%
Portfolio turnover rate		1,436	%		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.
e	Reverse share split — Per share amounts for the periods presented through February 21, 2014 have been restated to reflect a 1:5 reverse 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:

	3/31/17	3/31/16	3/31/15	3/31/14	3/31/13	3/31/12
Investor Class	1.43%	1.40%	1.40%	1.41%	1.39%	1.39%
A-Class	1.63%	1.65%	1.65%	1.66%	1.64%	1.65%
C-Class	2.43%	2.40%	2.40%	2.41%	2.39%	2.40%
H-Class	1.68%	1.65%	1.60%	—	—	—

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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 8.15% for the one-year period ended March 31, 2017. For comparison, the Barclays U.S. Corporate High Yield Index returned 16.39%.

The post-election credit rally continued into the beginning of 2017, as high-yield bond spreads tightened near cycle lows. A resurgence in refinancing activity drove exceptional new issuance volumes for much of the period, as borrowers opportunistically reduced their cost of debt in the face of the Fed raising rates. Declining default rates and improving macroeconomic conditions should sustain positive returns in leveraged credit, but tight spreads and high bond prices make the sector vulnerable to volatility.

The energy, communications, and basic industry sectors contributed the most to the performance of the Barclays High Yield index. No sector detracted. The financial segments contributed the least.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 177

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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	2.7%
Guggenheim Strategy Fund II	2.6%
Guggenheim Strategy Fund III	1.4%
Total	6.7%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	Since Inception (04/16/07)
A-Class Shares	8.24%	6.80%	6.28%
A-Class Shares with sales charge†	3.11%	5.77%	5.76%
C-Class Shares	7.38%	5.96%	5.47%
C-Class Shares with CDSC‡	6.38%	5.96%	5.47%
H-Class Shares	8.15%	6.80%	6.27%
Barclays U.S. Corporate High Yield Index	16.39%	6.82%	7.44%
S&P 500 Index	17.17%	13.30%	7.18%

*	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 its 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.

178 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
HIGH YIELD STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 6.7%
Guggenheim Strategy Fund I1		498,724	$	12,493,038
Guggenheim Strategy Fund II1		480,348		12,008,695
Guggenheim Strategy Fund III1		261,684		6,544,723
Total Mutual Funds
(Cost $30,795,923)				31,046,456

	Face Amount
U.S. TREASURY BILLS†† - 40.3%
U.S. Treasury Bill
0.72% due 04/13/172,3	$	66,700,000	66,686,593
0.73% due 04/27/172,3		60,000,000	59,970,780
0.71% due 04/13/172,3		33,300,000	33,293,307
0.71% due 04/27/172,3		20,000,000	19,990,260
0.52% due 05/11/172,3,8		5,000,000	4,996,205
Total U.S. Treasury Bills
(Cost $184,929,597)			184,937,145
FEDERAL AGENCY DISCOUNT NOTES†† - 21.9%
Fannie Mae4
0.52% due 04/03/176		60,000,000	59,997,667
Federal Home Loan Bank5
0.69% due 04/28/176		21,000,000	20,989,007
0.91% due 09/20/176		20,000,000	19,919,719
Total Federal Home Loan Bank			40,908,726
Total Federal Agency Discount Notes
(Cost $100,899,049)			100,906,393
FEDERAL AGENCY NOTES†† - 5.6%
Federal Home Loan Bank5
0.63% due 11/23/186		25,000,000	24,997,225
Freddie Mac4
0.63% due 11/16/186		1,000,000	999,782
Total Federal Agency Notes
(Cost $25,989,707)			25,997,007

REPURCHASE AGREEMENTS††,7 - 21.7%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	47,684,593		47,684,593
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17	30,720,199		30,720,199
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17	16,736,349		16,736,349
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	4,708,962		4,708,962
Total Repurchase Agreements
(Cost $99,850,103)			99,850,103
Total Investments - 96.2%
(Cost $442,464,379)		$	442,737,104
Other Assets & Liabilities, net - 3.8%			17,419,704
Total Net Assets - 100.0%		$	460,156,808

	Contracts		Unrealized Gain
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2017 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $379,289,813)		3,222	$	1,452,980

	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International May 2017 Swap 0.45%9, iShares iBoxx High Yield Corporate Bond Swap Terminating 05/03/17 (Notional Value $65,802,609)		749,631	$	418,987

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. 28 Index	Goldman Sachs International	ICE	5.00%	06/20/22	$	172,800,000	$	(185,241,600	)	$	11,469,135	$	972,465
CDX.NA.HY. 28 Index	Barclays Bank plc	ICE	5.00%	06/20/22	$	205,000,000	$	(219,760,000	)		13,531,545		1,228,455
										$	25,000,680	$	2,200,920

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 179

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
HIGH YIELD STRATEGY FUND

†	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	Rate indicated is the effective yield at the time of purchase.
3	Zero coupon rate security
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	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
6	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
7	Repurchase Agreements — See Note 5.
8	All or a portion of this security is pledged as credit default swap collateral at March 31, 2017.
9	Total Return based on iShares iBoxx $ High Yield Corporate Bond ETF +/- financing at variable rate. Rate indicated is the rate effective at March 31, 2017.
	CDX.NA.HY.28 Index — Credit Default Swap North American High Yield Series 28 Index
	ICE — Intercontinental Exchange
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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
Credit Default Swaps	$	—	$	—	$	—	$	2,200,920	$	—	$	2,200,920
Equity Index Swap Agreements		—		—		—		418,987		—		418,987
Federal Agency Discount Notes		—		—		100,906,393		—		—		100,906,393
Federal Agency Notes		—		—		25,997,007		—		—		25,997,007
Interest Rate Futures Contracts		—		1,452,980		—		—		—		1,452,980
Mutual Funds		31,046,456		—		—		—		—		31,046,456
Repurchase Agreements		—		—		99,850,103		—		—		99,850,103
U.S. Treasury Bills		—		—		184,937,145		—		—		184,937,145
Total	$	31,046,456	$	1,452,980	$	411,690,648	$	2,619,907	$	—	$	446,809,991

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

HIGH YIELD STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $311,818,353)	$	311,840,545
Investments in affiliated issuers, at value (cost $30,795,923)		31,046,456
Repurchase agreements, at value (cost $99,850,103)		99,850,103
Total investments (cost $442,464,379)		442,737,104
Unamortized upfront premiums paid on credit default swaps		25,000,680
Unrealized appreciation on swap agreements		2,619,907
Segregated cash with broker		750,312
Cash		3
Receivables:
Variation margin		503,443
Fund shares sold		2,990,880
Dividends		60,792
Interest		689,519
Total assets		475,352,640
Liabilities:
Segregated cash due to broker		11,540,184
Payable for:
Fund shares redeemed		3,089,128
Management fees		237,192
Distribution and service fees		81,885
Transfer agent and administrative fees		79,064
Portfolio accounting fees		29,027
Miscellaneous		139,352
Total liabilities		15,195,832
Commitments and contingent liabilities (Note 14)		—
Net assets	$	460,156,808
Net assets consist of:
Paid in capital	$	451,197,774
Undistributed net investment income		6,077,252
Accumulated net realized gain on investments		(1,463,830	)
Net unrealized appreciation on investments		4,345,612
Net assets	$	460,156,808
A-Class:
Net assets	$	20,290,182
Capital shares outstanding		820,039
Net asset value per share	$	24.74
Maximum offering price per share(Net asset value divided by 95.25%)	$	25.97
C-Class:
Net assets	$	4,532,663
Capital shares outstanding		202,988
Net asset value per share	$	22.33
H-Class:
Net assets	$	435,333,963
Capital shares outstanding		17,613,441
Net asset value per share	$	24.72

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 181

HIGH YIELD STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers	$	1,682,502
Interest		1,516,281
Dividends from securities of affiliated issuers		868,724
Total investment income		4,067,507
Expenses:
Management fees		4,011,671
Transfer agent and administrative fees		1,337,224
Distribution and service fees:
A-Class		40,709
C-Class		39,799
H-Class		1,286,565
Portfolio accounting fees		442,816
Custodian fees		83,743
Trustees’ fees*		56,955
Line of credit fees		769
Miscellaneous		808,254
Total expenses		8,108,505
Net investment loss		(4,040,998	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	6,743,084
Investments in affiliated issuers		569,018
Swap agreements		40,601,219
Futures contracts		(5,524,894	)
Net realized gain		42,388,427
Net change in unrealized appreciation(depreciation) on:
Investments in unaffiliated issuers		(4,112,117	)
Investments in affiliated issuers		73,808
Swap agreements		(5,620,434	)
Futures contracts		(1,375,758	)
Net change in unrealized appreciation(depreciation)		(11,034,501	)
Net realized and unrealized gain		31,353,926
Net increase in net assets resulting from operations	$	27,312,928

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

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

HIGH YIELD STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(4,040,998	)	$	(1,703,514	)
Net realized gain on investments		42,388,427			6,489,628
Net change in unrealized appreciation (depreciation) on investments		(11,034,501	)		10,455,204
Net increase in net assets resulting from operations		27,312,928			15,241,318
Distributions to shareholders from:
Net investment income
A-Class		(285,844	)		(371,618	)
C-Class		(89,445	)		(81,569	)
H-Class		(10,022,903	)		(7,985,052	)
Total distributions to shareholders		(10,398,192	)		(8,438,239	)
Capital share transactions:
Proceeds from sale of shares
A-Class		36,146,145			146,402,399
C-Class		6,852,428			6,136,367
H-Class		3,155,354,253			2,450,058,825
Distributions reinvested
A-Class		239,394			324,878
C-Class		84,624			77,774
H-Class		9,965,662			7,939,241
Cost of shares redeemed
A-Class		(28,782,857	)		(143,631,198	)
C-Class		(4,601,608	)		(7,731,465	)
H-Class		(3,528,841,089	)		(2,304,764,599	)
Net increase (decrease) from capital share transactions		(353,583,048	)		154,812,222
Net increase (decrease) in net assets		(336,668,312	)		161,615,301
Net assets:
Beginning of year		796,825,120			635,209,819
End of year	$	460,156,808		$	796,825,120
Undistributed net investment income/Accumulated net investment loss at end of year	$	6,077,252		$	(5,356,385	)
Capital share activity:
Shares sold
A-Class		1,514,841			6,185,339
C-Class		314,911			292,032
H-Class		131,050,068			106,740,553
Shares issued from reinvestment of distributions
A-Class		10,089			14,262
C-Class		3,934			3,739
H-Class		420,925			348,212
Shares redeemed
A-Class		(1,210,225	)		(6,118,943	)
C-Class		(210,907	)		(365,790	)
H-Class		(147,445,936	)		(99,505,770	)
Net increase (decrease) in shares		(15,552,300	)		7,593,634

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 183

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	23.32		$	23.84		$	22.89		$	25.16		$	22.93
Income (loss) from investment operations:
Net investment income (loss)a		(.20	)		(.09	)		(.15	)		(.30	)		(.22	)
Net gain (loss) on investments (realized and unrealized)		2.09			.46			1.10			2.13			3.13
Total from investment operations		1.89			.37			.95			1.83			2.91
Less distributions from:
Net investment income		(.47	)		(.89	)		—			(1.14	)		(.43	)
Net realized gains		—			—			—			(2.96	)		(.25	)
Total distributions		(.47	)		(.89	)		—			(4.10	)		(.68	)
Net asset value, end of period	$	24.74		$	23.32		$	23.84		$	22.89		$	25.16
Total Returnb		8.24	%		1.66	%		4.06	%		7.53	%		12.86	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	20,290		$	11,787		$	10,123		$	12,499		$	10,777
Ratios to average net assets:
Net investment income (loss)		(0.85	%)		(0.40	%)		(0.63	%)		(1.21	%)		(0.92	%)
Total expensesc		1.51	%		1.49	%		1.50	%		1.53	%		1.50	%
Portfolio turnover rate		97	%		521	%		393	%		205	%		95	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	21.25		$	22.01		$	21.29		$	23.83		$	21.92
Income (loss) from investment operations:
Net investment income (loss)a		(.36	)		(.19	)		(.27	)		(.44	)		(.37	)
Net gain (loss) on investments (realized and unrealized)		1.91			.32			.99			2.00			2.96
Total from investment operations		1.55			.13			.72			1.56			2.59
Less distributions from:
Net investment income		(.47	)		(.89	)		—			(1.14	)		(.43	)
Net realized gains		—			—			—			(2.96	)		(.25	)
Total distributions		(.47	)		(.89	)		—			(4.10	)		(.68	)
Net asset value, end of period	$	22.33		$	21.25		$	22.01		$	21.29		$	23.83
Total Returnb		7.38	%		0.70	%		3.33	%		6.74	%		11.98	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,533		$	2,020		$	3,632		$	5,100		$	6,958
Ratios to average net assets:
Net investment income (loss)		(1.65	%)		(0.88	%)		(1.25	%)		(1.89	%)		(1.62	%)
Total expensesc		2.26	%		2.24	%		2.25	%		2.28	%		2.27	%
Portfolio turnover rate		97	%		521	%		393	%		205	%		95	%

184 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	23.31		$	23.90		$	22.94		$	25.12		$	22.90
Income (loss) from investment operations:
Net investment income (loss)a		(.18	)		(.15	)		(.19	)		(.24	)		(.24	)
Net gain (loss) on investments (realized and unrealized)		2.06			.45			1.15			2.16			3.14
Total from investment operations		1.88			.30			.96			1.92			2.90
Less distributions from:
Net investment income		(.47	)		(.89	)		—			(1.14	)		(.43	)
Net realized gains		—			—			—			(2.96	)		(.25	)
Total distributions		(.47	)		(.89	)		—			(4.10	)		(.68	)
Net asset value, end of period	$	24.72		$	23.31		$	23.90		$	22.94		$	25.12
Total Returnb		8.15	%		1.36	%		4.14	%		7.86	%		12.83	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	435,334		$	783,018		$	621,455		$	87,315		$	434,113
Ratios to average net assets:
Net investment income (loss)		(0.74	%)		(0.64	%)		(0.81	%)		(0.97	%)		(0.99	%)
Total expensesc		1.51	%		1.49	%		1.46	%		1.53	%		1.51	%
Portfolio turnover rate		97	%		521	%		393	%		205	%		95	%

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 | 185

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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 -6.90% for the one year period ended March 31, 2017. For comparison, the Barclays U.S. Corporate High Yield Index returned 16.39%.

The post-election credit rally continued into the beginning of 2017, as high-yield bond spreads tightened near cycle lows. A resurgence in refinancing activity drove exceptional new issuance volumes for much of the period, as borrowers opportunistically reduced their cost of debt in the face of the Fed raising rates. Declining default rates and improving macroeconomic conditions should sustain positive returns in leveraged credit, but tight spreads and high bond prices make the sector vulnerable to volatility.

The energy, communications, and basic industry sectors contributed the most to the performance of the Barclays High Yield index. No sector detracted. The financial segments contributed the least.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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.

186 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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	7.6%
Guggenheim Strategy Fund II	7.5%
Total	15.1%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	Since Inception (04/16/07)
A-Class Shares	-8.26%	-10.20%	-10.26%
A-Class Shares with sales charge†	-12.60%	-11.07%	-10.70%
C-Class Shares	-8.97%	-10.75%	-10.85%
C-Class Shares with CDSC‡	-9.88%	-10.75%	-10.85%
H-Class Shares	-6.90%	-9.72%	-10.00%
Barclays U.S. Corporate High Yield Index	16.39%	6.82%	7.44%
S&P 500 Index	17.17%	13.30%	7.18%

*	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 S&P 500 Index are an unmanaged index and, unlike the Fund, have 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 | 187

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE HIGH YIELD STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 15.1%
Guggenheim Strategy Fund I1		50,817	$	1,272,956
Guggenheim Strategy Fund II1		50,809		1,270,223
Total Mutual Funds
(Cost $2,521,655)				2,543,179

	Face Amount
REPURCHASE AGREEMENTS††,2 - 3.8%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	338,650		338,650
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		218,171		218,171
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		47,251		47,251
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		33,442		33,442
Total Repurchase Agreements
(Cost $637,514)				637,514
Total Investments - 18.9%
(Cost $3,159,169)			$	3,180,693
Other Assets & Liabilities, net - 81.1%				13,630,649
Total Net Assets - 100.0%			$	16,811,342

	Contracts		Unrealized Loss
INTEREST RATE FUTURES CONTRACTS SOLD SHORT†
June 2017 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $15,774,313)		134	$	(4,274	)

CENTRALLY CLEARED CREDIT DEFAULT SWAPS PROTECTION PURCHASED††
Index	Counterparty	Exchange	Protection Premium Rate	Maturity Date	Notional Principal		Notional Value		Upfront Premiums Paid			Unrealized Appreciation
CDX.NA.HY.28 Index	Barclays Bank plc	ICE	5.00%	06/20/22	$	1,800,000	$	1,929,600	$	(116,044	)	$	(13,556	)
CDX.NA.HY.28 Index	Goldman Sachs International	ICE	5.00%	06/20/22	$	13,900,000	$	14,900,800		(991,009	)		(9,791	)
									$	(1,107,053	)	$	(23,347	)

†	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.
	CDX.NA.HY.28 Index — Credit Default Swap North American High Yield Series 28 Index
	ICE — Intercontinental Exchange
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
INVERSE HIGH YIELD STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	2,543,179	$	—	$	—	$	—	$	—	$	2,543,179
Repurchase Agreements		—		—		637,514		—		—		637,514
Total	$	2,543,179	$	—	$	637,514	$	—	$	—	$	3,180,693

Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Credit Default Swaps	$	—	$	—	$	—	$	23,347	$	—	$	23,347
Interest Rate Futures Contracts		—		4,274		—		—		—		4,274
Total	$	—	$	4,274	$	—	$	23,347	$	—	$	27,621

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 189

INVERSE HIGH YIELD STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in affiliated issuers, at value (cost $2,521,655)	$	2,543,179
Repurchase agreements, at value (cost $637,514)		637,514
Total investments (cost $3,159,169)		3,180,693
Cash		928,213
Segregated cash with broker		348,252
Receivables:
Fund shares sold		13,545,229
Dividends		4,978
Total assets		18,007,365
Liabilities:
Unamortized upfront premiums paid on credit default swaps		1,107,053
Unrealized depreciation on swap agreements		23,347
Payable for:
Management fees		12,581
Interest		26,167
Variation margin		5,089
Distribution and service fees		4,867
Transfer agent and administrative fees		4,194
Fund shares redeemed		3,671
Portfolio accounting fees		1,677
Miscellaneous		7,377
Total liabilities		1,196,023
Commitments and contingent liabilities (Note 14)		—
Net assets	$	16,811,342
Net assets consist of:
Paid in capital	$	34,100,455
Accumulated net investment loss		(289,105	)
Accumulated net realized loss on investments		(16,993,911	)
Net unrealized depreciation on investments		(6,097	)
Net assets	$	16,811,342
A-Class:
Net assets	$	914,682
Capital shares outstanding		13,905
Net asset value per share	$	65.78
Maximum offering price per share(Net asset value divided by 95.25%)	$	69.06
C-Class:
Net assets	$	1,042,027
Capital shares outstanding		16,908
Net asset value per share	$	61.63
H-Class:
Net assets	$	14,854,633
Capital shares outstanding		219,414
Net asset value per share	$	67.70

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	53,748
Dividends from securities of affiliated issuers		64,511
Total investment income		118,259
Expenses:
Management fees		171,032
Transfer agent and administrative fees		57,010
Distribution and service fees:
A-Class		5,860
C-Class		12,130
H-Class		48,118
Portfolio accounting fees		22,804
Registration fees		20,617
Custodian fees		3,331
Trustees’ fees*		2,298
Miscellaneous		13,121
Total expenses		356,321
Net investment loss		(238,062	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		(274	)
Investments in affiliated issuers		15,227
Swap agreements		(3,357,740	)
Futures contracts		510,161
Net realized loss		(2,832,626	)
Net change in unrealized appreciation(depreciation) on:
Investments in affiliated issuers		21,912
Swap agreements		66,499
Futures contracts		1,426
Net change in unrealized appreciation(depreciation)		89,837
Net realized and unrealized loss		(2,742,789	)
Net decrease in net assets resulting from operations	$	(2,980,851	)

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

190 | 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(238,062	)	$	(391,713	)
Net realized loss on investments		(2,832,626	)		(137,828	)
Net change in unrealized appreciation (depreciation) on investments		89,837			(70,380	)
Net decrease in net assets resulting from operations		(2,980,851	)		(599,921	)
Capital share transactions:
Proceeds from sale of shares
A-Class		58,549,494			259,628,046
C-Class		992,897			6,506,143
H-Class		1,767,267,375			1,025,905,429
Cost of shares redeemed
A-Class		(59,973,315	)		(256,881,526	)
C-Class		(1,489,604	)		(5,476,553	)
H-Class		(1,752,361,839	)		(1,025,503,843	)
Net increase from capital share transactions		12,985,008			4,177,696
Net increase in net assets		10,004,157			3,577,775
Net assets:
Beginning of year		6,807,185			3,229,410
End of year	$	16,811,342		$	6,807,185
Accumulated net investment loss at end of year	$	(289,105	)	$	(524,020	)
Capital share activity*:
Shares sold
A-Class		847,520			3,394,379
C-Class		15,264			90,941
H-Class		25,181,894			13,339,921
Shares redeemed
A-Class		(870,463	)		(3,362,360	)
C-Class		(22,781	)		(76,538	)
H-Class		(24,997,042	)		(13,332,621	)
Net increase (decrease) in shares		154,392			53,722

* Capital share activity for the periods presented through March 31, 2017 has been restated to reflect a 1:4 reverse share split effective November 4, 2016 — See Note 13.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 191

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, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	71.69		$	76.94		$	85.28		$	95.91		$	112.61
Income (loss) from investment operations:
Net investment income (loss)a		(.51	)		(.80	)		(.84	)		(1.40	)		(1.48	)
Net gain (loss) on investments (realized and unrealized)		(5.40	)		(4.45	)		(7.50	)		(9.23	)		(15.22	)
Total from investment operations		(5.91	)		(5.25	)		(8.34	)		(10.63	)		(16.70	)
Net asset value, end of period	$	65.78		$	71.69		$	76.94		$	85.28		$	95.91
Total Returnb		(8.26	%)		(6.81	%)		(9.59	%)		(11.30	%)		(14.81	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	915		$	2,642		$	372		$	5,155		$	157
Ratios to average net assets:
Net investment income (loss)		(0.74	%)		(1.07	%)		(1.02	%)		(1.52	%)		(1.38	%)
Total expensesc		1.52	%		1.50	%		1.52	%		1.54	%		1.49	%
Portfolio turnover rate		480	%		1,722	%		784	%		—			—

C-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	67.67		$	73.24		$	81.11		$	91.93		$	108.83
Income (loss) from investment operations:
Net investment income (loss)a		(.85	)		(1.16	)		(1.20	)		(2.00	)		(2.12	)
Net gain (loss) on investments (realized and unrealized)		(5.19	)		(4.41	)		(6.67	)		(8.82	)		(14.78	)
Total from investment operations		(6.04	)		(5.57	)		(7.87	)		(10.82	)		(16.90	)
Net asset value, end of period	$	61.63		$	67.67		$	73.24		$	81.11		$	91.93
Total Returnb		(8.97	%)		(7.59	%)		(9.49	%)		(11.97	%)		(15.51	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,042		$	1,653		$	734		$	1,561		$	2,037
Ratios to average net assets:
Net investment income (loss)		(1.32	%)		(1.60	%)		(1.53	%)		(2.28	%)		(2.13	%)
Total expensesc		2.27	%		2.25	%		2.25	%		2.30	%		2.25	%
Portfolio turnover rate		480	%		1,722	%		784	%		—			—

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

INVERSE HIGH YIELD STRATEGY 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.

H-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	72.70		$	77.91		$	85.66		$	96.16		$	112.88
Income (loss) from investment operations:
Net investment income (loss)a		(.74	)		(.64	)		(.76	)		(1.40	)		(1.44	)
Net gain (loss) on investments (realized and unrealized)		(4.26	)		(4.57	)		(6.99	)		(9.10	)		(15.28	)
Total from investment operations		(5.00	)		(5.21	)		(7.75	)		(10.50	)		(16.72	)
Net asset value, end of period	$	67.70		$	72.70		$	77.91		$	85.66		$	96.16
Total Returnb		(6.90	%)		(6.67	%)		(8.84	%)		(11.11	%)		(14.81	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	14,855		$	2,513		$	2,124		$	2,453		$	9,208
Ratios to average net assets:
Net investment income (loss)		(1.06	%)		(0.84	%)		(0.93	%)		(1.50	%)		(1.38	%)
Total expensesc		1.52	%		1.50	%		1.51	%		1.52	%		1.50	%
Portfolio turnover rate		480	%		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.
d	Reverse share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 1:4 reverse share split effective November 4, 2016. — See Note 13.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 193

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, U.S. Government Money Market Fund returned 0.01%.

Interest rates remained low through most of the period, constraining performance of the instruments held by the Fund. On March 15, 2017, the Federal Open Market Committee (FOMC) raised the fed funds target rate by 25 basis points to a range of 0.75–1.0%, following on a same-sized increase in December. The March hike itself had little impact on markets because several FOMC members had indicated in the weeks leading up to the meeting that a hike was likely. Chair Yellen noted that the FOMC’s baseline forecast of two additional rate increases in 2017 and three more in 2018 was not conditioned on expectations for fiscal stimulus. Rather, it reflected a need to gradually remove accommodation due to the fact that the Fed has essentially achieved its dual mandate objectives for employment and inflation. Fiscal easing, she explained, could result in a faster pace of tightening, if it materializes. Markets are skeptical and are as of the end of the period are pricing in only 1.5 more rate hikes in 2017 and another 1.5 rate hikes in 2018, according to fed funds futures contracts.

The U.S. Government Money Market Fund operates as a “government money market fund.” Under Rule 2a-7 under the Investment Company Act of 1940 (the “1940 Act”) a, a government money market fund is a money market fund that invests 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. As a government money market fund, the Fund seeks to maintain a stable $1.00 net asset value, though there is no guarantee that it will be able to do so. In addition, the Fund is not required to impose liquidity fees and redemptions gates.

A government money market fund, subject to stricter money market regulations, presents lower yields, yet may aff ord greater 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)

FAND – 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, 2017

	1 Year	Since Inception (06/18/12)
U.S. Government Money Market Fund	0.01%	0.00%

* 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.

194 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
U.S. GOVERNMENT MONEY MARKET FUND

	Face Amount		Value
FEDERAL AGENCY NOTES†† - 33.3%
Federal Farm Credit Bank1
1.09% due 08/21/172	$	60,000,000	$	60,007,113
1.06% due 12/20/172		25,000,000		25,025,312
1.15% due 05/30/172		10,860,000		10,861,967
1.07% due 09/18/172		10,650,000		10,651,986
1.10% due 05/23/172		10,000,000		10,000,891
1.01% due 11/13/172		9,000,000		9,003,116
1.03% due 06/12/172		7,000,000		7,001,109
1.00% due 04/10/172		5,000,000		5,000,000
0.99% due 11/27/172		145,000		145,058
Total Federal Farm Credit Bank				137,696,552
Federal Home Loan Bank1
1.00% due 06/09/17		31,655,000		31,680,029
1.00% due 06/21/17		5,970,000		5,975,228
0.90% due 12/05/172		355,000		355,292
0.87% due 09/05/172		100,000		100,022
Total Federal Home Loan Bank				38,110,571
Freddie Mac3
1.00% due 06/29/17		10,000,000		10,009,379
0.98% due 04/20/172		3,960,000		3,960,380
0.75% due 05/26/17		2,500,000		2,500,551
0.80% due 08/25/17		2,400,000		2,400,189
Total Freddie Mac				18,870,499
Farmer Mac1
0.91% due 05/11/172		12,000,000		12,002,288
Fannie Mae3
5.38% due 06/12/17		2,298,000		2,319,570
Total Federal Agency Notes
(Cost $208,999,480)				208,999,480
U.S. TREASURY BILLS†† - 32.5%
U.S. Treasury Bill
0.88% due 09/21/174,5		95,000,000		94,594,147
0.73% due 04/27/174,5		40,000,000		39,979,115
0.71% due 04/27/174,5		25,000,000		24,986,947
0.63% due 06/15/174,5		25,000,000		24,966,395
0.64% due 06/15/174,5		20,000,000		19,973,116
Total U.S. Treasury Bill				204,499,720
Total U.S. Treasury Bills
(Cost $204,499,720)				204,499,720
FEDERAL AGENCY DISCOUNT NOTES†† - 30.1%
Federal Home Loan Bank1
0.69% due 04/28/17		25,000,000		24,986,913
0.79% due 06/07/17		22,000,000		21,967,490
0.75% due 04/07/17		10,000,000		9,998,750
0.74% due 04/10/17		6,600,000		6,598,779
0.54% due 04/12/175		3,000,000		2,999,424
0.75% due 04/12/175		2,300,000		2,299,558
0.75% due 04/17/17		1,900,000		1,899,367
0.75% due 04/10/17		1,100,000		1,099,794
Total Federal Home Loan Bank				71,850,075
Federal Farm Credit Bank1
1.23% due 09/14/172		30,000,000		30,031,505
0.61% due 07/03/17		15,000,000		14,976,363
0.75% due 07/03/172		10,000,000		10,000,515
0.95% due 04/27/172		3,000,000		3,000,176
Total Federal Farm Credit Bank				58,008,559
Fannie Mae3
0.52% due 04/03/17		50,000,000		49,998,055
0.60% due 06/01/175		4,750,000		4,745,186
Total Fannie Mae				54,743,241
Farmer Mac1
0.86% due 10/03/17		4,000,000		3,982,322
Total Federal Agency Discount Notes
(Cost $188,584,197)				188,584,197
REPURCHASE AGREEMENT††,6 - 5.1%
Individual Repurchase Agreement
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17 (secured by U.S. Treasury Notes, at a rate of 2.00-3.65% and maturing 02/15/21-05/31/21 as collateral, with a value of $32,519,396) to be repurchased at $31,884,949		31,884,311		31,884,311
Total Repurchase Agreement
(Cost $31,884,311)				31,884,311
Total Investments - 101.0%
(Cost $633,967,708)			$	633,967,708
Other Assets & Liabilities, net - (1.0)%				(6,453,878	)
Total Net Assets - 100.0%			$	627,513,830

††	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, 2017.
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	Rate indicated is the effective yield at the time of purchase.
5	Zero coupon rate security.
6	Repurchase Agreement — See Note 5.
	See Sector Classification in Other Information section.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 195

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
U.S. GOVERNMENT MONEY MARKET FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Federal Agency Discount Notes	$	—	$	188,584,197	$	—	$	188,584,197
Federal Agency Notes		—		208,999,480		—		208,999,480
Repurchase Agreement		—		31,884,311		—		31,884,311
U.S. Treasury Bills		—		204,499,720		—		204,499,720
Total	$	—	$	633,967,708	$	—	$	633,967,708

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

U.S. GOVERNMENT MONEY MARKET FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value (cost $602,083,397)	$	602,083,397
Repurchase agreements, at value (cost $31,884,311)		31,884,311
Total investments (cost $633,967,708)		633,967,708
Receivables:
Fund shares sold		22,824,454
Interest		361,218
Total assets		657,153,380
Liabilities:
Overdraft due to custodian bank		11,251
Payable for:
Fund shares redeemed		29,139,038
Management fees		137,437
Transfer agent and administrative fees		98,300
Portfolio accounting fees		40,499
Miscellaneous		213,025
Total liabilities		29,639,550
Commitments and contingent liabilities (Note 14)		—
Net assets	$	627,513,830
Net assets consist of:
Paid in capital	$	627,480,173
Undistributed net investment income		—
Accumulated net realized gain on investments		33,657
Net unrealized appreciation on investments		—
Net assets	$	627,513,830
Capital shares outstanding		627,462,313
Net asset value per share	$	1.00

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	2,830,981
Other income		51
Total investment income		2,831,032
Expenses:
Management fees		3,013,596
Transfer agent and administrative fees		1,205,445
Portfolio accounting fees		488,040
Registration fees		495,062
Custodian fees		88,074
Trustees’ fees*		51,766
Line of credit fees		1,414
Miscellaneous		414,479
Total expenses		5,757,876
Less:
Expenses reimbursed by Adviser:		(227,321	)
Expenses waived by Adviser:		(2,697,076	)
Total waived expenses		(2,924,397	)
Net expenses		2,833,479
Net investment loss		(2,447	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		342,140
Net realized gain		342,140
Net increase in net assets resulting from operations	$	339,693

* 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 | 197

U.S. GOVERNMENT MONEY MARKET FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(2,447	)	$	342
Net realized gain on investments		342,140			347,141
Net change in unrealized appreciation (depreciation) on investments		—			—
Net increase in net assets resulting from operations		339,693			347,483
Distributions to shareholders from:
Net investment income		(220	)		(342	)
Net realized gains		(39,373	)		—
Total distributions to shareholders		(39,593	)		(342	)
Capital share transactions:
Proceeds from sale of shares		8,235,820,623			12,102,235,298
Distributions reinvested		37,712			264
Cost of shares redeemed		(8,252,516,655	)		(12,153,259,388	)
Net decrease from capital share transactions		(16,658,320	)		(51,023,826	)
Net decrease in net assets		(16,358,220	)		(50,676,685	)
Net assets:
Beginning of year		643,872,050			694,548,735
End of year	$	627,513,830		$	643,872,050
Undistributed net investment income at end of year	$	—		$	—
Capital share activity:
Shares sold		8,235,820,662			12,102,235,298
Shares issued from reinvestment of distributions		39,361			270
Shares redeemed		(8,252,516,656	)		(12,153,259,388	)
Net decrease in shares		(16,656,633	)		(51,023,820	)

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

U.S. GOVERNMENT MONEY MARKET FUND

FINANCIAL HIGHLIGHTS

This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.

Money Market Classa	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Period Ended March 28, 2013a
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
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		0.01	%		0.00	%		0.00	%		0.00	%		0.00	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	627,514		$	643,872		$	694,549		$	780,135		$	848,370
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		0.95	%		0.91	%		0.92	%		0.93	%		0.95	%
Net expensesc		0.47	%		0.22	%		0.08	%		0.09	%		0.17	%
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%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 199

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, 2017, 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 Market 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.

Security Investors, LLC, which operates under the name Guggenheim Investments (“GI”), provides advisory services. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI 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, 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, 2017, 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 and/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, to 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 and valuations provided by the pricing services.

200 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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, which 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 values of OTC swap agreements and credit default swap agreements entered into by a Fund are accounted for using the unrealized gains or losses on the agreements that are determined by marking the agreements to the last quoted value of the index that the swaps pertain to at the close of the NYSE. The swaps’ values are then adjusted to include dividends accrued, 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 using methods established or ratified by the Board. 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 market prices; sale prices; broker quotes; and models which derive prices based on inputs such as prices of securities with comparable maturities and characteristics, or based on inputs such as anticipated cash flows or collateral, spread over Treasuries, and other information analysis.

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

THE RYDEX FUNDS ANNUAL REPORT | 201

NOTES TO FINANCIAL STATEMENTS (continued)

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 an 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.

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 0.82% at March 31, 2017.

K. Under the Funds’ organizational documents, the 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

202 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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, the Fund will realize a gain on the transaction. Conversely, if the security increases in price during the period, the 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 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 RYDEX FUNDS ANNUAL REPORT | 203

NOTES TO FINANCIAL STATEMENTS (continued)

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	$	28,287,663	$	—
S&P 500® Fund	Index exposure, Liquidity		11,989,575		—
Inverse S&P 500® Strategy Fund	Index exposure, Liquidity		—		2,981,141
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Index exposure, Leverage, Liquidity		1,099,668		—
Inverse NASDAQ-100® Strategy Fund	Index exposure, Liquidity		—		703,849
Mid-Cap 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		5,566,305		—
Inverse Mid-Cap Strategy Fund	Index exposure, Liquidity		—		74,620
Russell 2000® 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		1,372,688		—
Russell 2000® Fund	Index exposure, Liquidity		1,099,670		—
Inverse Russell 2000® Strategy Fund	Index exposure, Liquidity		—		2,331,610
Dow Jones Industrial Average® Fund	Index exposure, Liquidity		4,279,790		—
Government Long Bond 1.2x Strategy Fund	Duration, Index exposure, Leverage, Liquidity		61,721,297		—
Inverse Government Long Bond Strategy Fund	Duration, Index exposure, Liquidity		—		34,476,813
High Yield Strategy Fund	Duration, Index exposure, Liquidity		323,975,143		—
Inverse High Yield Strategy Fund	Duration, Index exposure, Liquidity		—		18,814,570

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,	$	174,433,111	$	—
S&P 500® Fund	Index exposure, Liquidity		28,375,676		—
Inverse S&P 500® Strategy Fund	Index exposure, Liquidity		—		115,912,898
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Index exposure, Leverage, Liquidity		34,665,920		—
Inverse NASDAQ-100® Strategy Fund	Index exposure, Liquidity		—		11,701,317
Mid-Cap 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		26,542,234		—
Inverse Mid-Cap Strategy Fund	Index exposure, Liquidity		—		1,324,312
Russell 2000® 1.5x Strategy Fund	Index exposure, Leverage, Liquidity		11,752,898		—
Russell 2000® Fund	Index exposure, Liquidity		6,891,722		—
Inverse Russell 2000® Strategy Fund	Index exposure,Liquidity		—		8,166,920
Dow Jones Industrial Average® Fund	Index exposure, Liquidity		10,680,772		—
High Yield Strategy Fund	Duration, Index exposure, Liquidity		86,401,738		—

204 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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.

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	Duration, Index exposure, Liquidity	$	363,328,816	$	—
Inverse High Yield Strategy Fund	Duration, Index exposure, Liquidity		—		18,389,066

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, 2017:

Derivative Investment Type	Asset Derivatives	Liability Derivatives
Equity contracts	Variation margin	Variation margin
Equity/Credit contracts	Unrealized appreciation on swap agreements	Unrealized depreciation on swap agreements

THE RYDEX FUNDS ANNUAL REPORT | 205

NOTES TO FINANCIAL STATEMENTS (continued)

The following table sets forth the fair value of the Funds’ derivative investments categorized by primary risk exposure at March 31, 2017:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2017
Nova Fund	$	132,837	$	176,102	$	—	$	—	$	308,939
S&P 500® Fund		3,736		78,224		—		—		81,960
Inverse S&P 500® Strategy Fund		5,843		46,637		—		—		52,480
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		8,109		134,126		—		—		142,235
Inverse NASDAQ-100® Strategy Fund		—		849		—		—		849
Mid-Cap 1.5x Strategy Fund		8,303		509,416		—		—		517,719
Russell 2000® 1.5x Strategy Fund		41,565		200,194		—		—		241,759
Russell 2000® Fund		20,915		118,393		—		—		139,308
Dow Jones Industrial Average® Fund		—		8,108		—		—		8,108
Government Long Bond 1.2x Strategy Fund		—		—		342,415		—		342,415
High Yield Strategy Fund		—		418,987		1,452,980		2,200,920		4,072,887

Liability Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2017
Nova Fund	$	—	$	189,668	$	—	$	—	$	189,668
S&P 500® Fund		—		29,695		—		—		29,695
Inverse S&P 500® Strategy Fund		—		639,443		—		—		639,443
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		—		18,290		—		—		18,290
Inverse NASDAQ-100® Strategy Fund		7,107		64,936		—		—		72,043
Inverse Mid-Cap Strategy Fund		—		5,016		—		—		5,016
Inverse Russell 2000® Strategy Fund		167,764		100,173		—		—		267,937
Dow Jones Industrial Average® Fund		46,288		13,544		—		—		59,832
Inverse Government Long Bond Strategy Fund		—		—		54,140		—		54,140
Inverse High Yield Strategy Fund		—		—		4,274		23,347		27,621

* 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, 2017:

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
Equity/Credit contracts	Net realized gain (loss) on swap agreements
	Net change in unrealized appreciation (depreciation) on swap agreements

206 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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, 2017:

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	$	5,411,114		$	29,520,672		$	—		$	—		$	34,931,786
S&P 500® Fund		2,535,939			3,350,516			—			—			5,886,455
Inverse S&P 500® Strategy Fund		(1,976,253	)		(20,257,180	)		—			—			(22,233,433	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		24,333			2,440,771			—						2,465,104
Inverse NASDAQ-100® Strategy Fund		(845,478	)		(5,443,416	)		—			—			(6,288,894	)
Mid-Cap 1.5x Strategy Fund		5,345,274			6,550,533			—			—			11,895,807
Inverse Mid-Cap Strategy Fund		(61,420	)		(446,478	)		—			—			(507,898	)
Russell 2000® 1.5x Strategy Fund		(771,801	)		(3,178,858	)		—			—			(3,950,659	)
Russell 2000® Fund		538,809			2,479,548			—			—			3,018,357
Inverse Russell 2000® Strategy Fund		(285,752	)		(3,031,902	)		—			—			(3,317,654	)
Dow Jones Industrial Average® Fund		616,381			1,187,421			—			—			1,803,802
Government Long Bond 1.2x Strategy Fund		—			—			(1,075,433	)		—			(1,075,433	)
Inverse Government Long Bond Strategy Fund		—			—			347,089			—			347,089
High Yield Strategy Fund		320			6,049,263			(5,525,214	)		34,551,956			35,076,325
Inverse High Yield Strategy Fund		(291	)		—			510,452	��		(3,357,740	)		(2,847,579	)

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	$	(31,227	)	$	(625,316	)	$	—		$	—		$	(656,543	)
S&P 500® Fund		(270,593	)		(383,116	)		—			—			(653,709	)
Inverse S&P 500® Strategy Fund		4,505			586,331			—			—			590,836
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		(15,251	)		86,308			—			—			71,057
Inverse NASDAQ-100® Strategy Fund		240,229			1,007,318			—			—			1,247,547
Mid-Cap 1.5x Strategy Fund		(141,136	)		426,333			—			—			285,197
Inverse Mid-Cap Strategy Fund		24,045			29,588			—			—			53,633
Russell 2000® 1.5x Strategy Fund		31,263			107,851			—			—			139,114
Russell 2000® Fund		(20,396	)		(105,952	)		—			—			(126,348	)
Inverse Russell 2000® Strategy Fund		(165,264	)		242,688			—			—			77,424
Dow Jones Industrial Average® Fund		(207,006	)		(48,681	)		—			—			(255,687	)
Government Long Bond 1.2x Strategy Fund		—			—			(1,162,467	)		—			(1,162,467	)
Inverse Government Long Bond Strategy Fund		—			—			(373,121	)		—			(373,121	)
High Yield Strategy Fund		—			418,987			(1,375,758	)		(6,039,421	)		(6,996,192	)
Inverse High Yield Strategy Fund		—			—			1,426			66,499			67,925

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.

THE RYDEX FUNDS ANNUAL REPORT | 207

NOTES TO FINANCIAL STATEMENTS (continued)

3. Fees and Other Transactions with Affiliates

Under the terms of an investment advisory contract, the Funds pay GI investment advisory fees calculated at the annualized rates below, based on the average daily net assets of the Funds:

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 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.

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 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.

For the year ended March 31, 2017, GFD retained sales charges of $252,227 relating to sales of A-Class shares of the Trust.

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

208 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

On October 4, 2016, Rydex Fund Services, LLC (“RFS”) was purchased by MUFG Investor Services and as of that date RFS ceased to be an affiliate of GI. In connection with its acquisition, RFS changed its name to MUFG Investor Services (US), LLC (“MUIS”). This change had no impact on the financial statements of the Trust.

MUIS acts as the Trust’s administrator, transfer agent and accounting agent. As administrator, transfer agent and accounting agent, MUIS is responsible for maintaining the books and records of the Trust’s securities and cash. For providing the aforementioned services, MUIS is entitled to receive a monthly fee equal to an annual percentage of the Funds’ average daily net assets subject to certain minimum monthly fees and out of pocket expenses.

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.

THE RYDEX FUNDS ANNUAL REPORT | 209

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement		Face Value		Repurchase Price		Collateral		Par Value		Fair Value
RBC Capital Markets						U.S. Treasury Note
	LLC
	0.72%						2.00%
	Due 04/03/17	$	157,196,814	$	157,206,245		05/31/21	$	157,319,700	$	160,340,757
HSBC Securities, Inc.						U.S. Treasury Strips
	0.68%						0.00%
	Due 04/03/17		101,272,070		101,277,809		11/15/42 - 05/15/43		229,169,400		103,297,534
Mizuho Securities LLC						U.S. Treasury Bill
	0.71%						0.00%
	Due 04/03/17		54,250,554		54,253,764		01/04/18		55,734,200		55,335,700
UMB Financial Corp.						Federal Farm Credit Bank
	0.68%						0.60% - 0.85%
	Due 04/03/17		15,523,545		15,524,424		04/05/17 - 04/25/17		14,784,000		14,831,151
						Federal Home Loan Bank
							0.88%
							05/24/17		1,000,000		1,003,157
						Total UMB Financial Corp.			15,784,000		15,834,308

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, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.

6. Portfolio Securities Loaned

The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, U.S. Bank acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with U.S. Bank, cash collateral and proceeds are invested in the First American Government Obligations Fund — Class Z. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand. Securities lending transactions are accounted for as secured borrowings. The remaining contractual maturity of the securities lending agreement is overnight and continuous.

210 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, the Funds participated in securities lending transactions, which are subject to enforceable netting arrangements, as follows:

	Gross Amounts Not Offset in the Statements of Assets and Liabilities							Securities Lending Collateral
Fund	Value of Securities Loaned		Collateral Received(a)			Net Amount		Cash Collateral Invested		Cash Collateral Uninvested		Total Collateral
Nova Fund	$	102,644	$	(102,644	)	$	—	$	104,739	$	—	$	104,739
S&P 500® Fund		4,096,308		(4,096,308	)		—		4,187,038		—		4,187,038
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		239,460		(239,460	)		—		246,980		—		246,980
Mid-Cap 1.5x Strategy Fund		122,888		(122,888	)		—		126,128		—		126,128
Russell 2000® 1.5x Strategy Fund		90,208		(90,208	)		—		92,617		—		92,617
Russell 2000® Fund		1,701,519		(1,701,519	)		—		1,749,835		—		1,749,835

^(a) Actual collateral received by the Fund is greater than the amount shown due to overcollateralization.

In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. GI, acting under the supervision of the Board, reviews the value of the collateral and the creditworthiness of those banks and dealers to evaluate potential risks.

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 from 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, are 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 RYDEX FUNDS ANNUAL REPORT | 211

NOTES TO FINANCIAL STATEMENTS (continued)

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	$	176,102	$	—	$	176,102	$	—	$	—	$	176,102
S&P 500® Fund	Swap equity contracts		78,224		—		78,224		—		—		78,224
Inverse S&P 500® Strategy Fund	Swap equity contracts		46,637		—		46,637		—		—		46,637
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Swap equity contracts		134,126		—		134,126		—		—		134,126
Inverse NASDAQ-100® Strategy Fund	Swap equity contracts		849		—		849		—		—		849
Mid-Cap 1.5x Strategy Fund	Swap equity contracts		509,416		—		509,416		—		—		509,416
Russell 2000® 1.5x Strategy Fund	Swap equity contracts		200,194		—		200,194		—		—		200,194
Russell 2000® Fund	Swap equity contracts		118,393		—		118,393		—		—		118,393
Dow Jones Industrial Average® Fund	Swap equity contracts		8,108		—		8,108		—		—		8,108
High Yield Strategy Fund	Interest Rate contracts		418,987		—		418,987		—		—		418,987

								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
Nova Fund	Swap equity contracts	$	189,668	$	—	$	189,668	$	—	$	189,668	$	—
S&P 500® Fund	Swap equity contracts		29,695		—		29,695		—		29,695		—
Inverse S&P 500® Strategy Fund	Swap equity contracts		639,443		—		639,443		639,443		—		—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	Swap equity contracts		18,290		—		18,290		—		18,290		—
Inverse NASDAQ-100® Strategy Fund	Swap equity contracts		64,936		—		64,936		64,936		—		—
Inverse Mid-Cap Strategy Fund	Swap equity contracts		5,016		—		5,016		4,776		240		—
Inverse Russell 2000® Strategy Fund	Swap equity contracts		100,173		—		100,173		100,173		—		—
Dow Jones Industrial Average® Fund	Swap equity contracts		13,544		—		13,544		—		13,544		—

¹ Exchange-traded futures and centrally cleared swaps are excluded from these reported amounts.

212 | THE RYDEX FUNDS ANNUAL REPORT

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.

The tax character of distributions paid during the year ended March 31, 2017 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Nova Fund	$	36,022	$	1,146,043	$	1,182,065
S&P 500® Fund		352,020		2,075,033		2,427,053
Mid-Cap 1.5x Strategy Fund		—		715,324		715,324
Russell 2000® 1.5x Strategy Fund		309,859		741,106		1,050,965
Dow Jones Industrial Average® Fund		282,484		198,308		480,792
Government Long Bond 1.2x Strategy Fund		1,045,691		1,662,337		2,708,028
High Yield Strategy Fund		10,398,192		—		10,398,192
U.S. Government Money Market Fund		39,593		—		39,593

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
Nova Fund	$	261,033	$	—	$	261,033
S&P 500® Fund		2,010,881		11,389,244		13,400,125
Mid-Cap 1.5x Strategy Fund		1,870,707		—		1,870,707
Russell 2000® 1.5x Strategy Fund		978,939		—		978,939
Russell 2000® Fund		742,891		—		742,891
Government Long Bond 1.2x Strategy Fund		1,571,845		406,240		1,978,085
High Yield Strategy Fund		8,438,239		—		8,438,239
U.S. Government Money Market Fund		342		—		342

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

THE RYDEX FUNDS ANNUAL REPORT | 213

NOTES TO FINANCIAL STATEMENTS (continued)

The tax components of accumulated earnings/(deficit) as of March 31, 2017 were as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation/ (Depreciation)			Capital Loss Carryforward & Other Losses
Nova Fund	$	8,790,568	$	—	$	(549,606	)	$	—
S&P 500® Fund		5,345,157		1,513,755		31,038,780			—
Inverse S&P 500® Strategy Fund		—		—		(524,302	)		(359,278,500	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund				—		1,553,768			(94,492,722	)
Inverse NASDAQ 100® Strategy Fund		—		—		(29,997	)		(53,449,382	)
Mid-Cap 1.5x Strategy Fund		1,321,159		—		759,296			—
Inverse Mid-Cap Strategy Fund		—		—		(2,983	)		(12,504,612	)
Russell 2000® 1.5x Strategy Fund		—		—		403,382			(2,940,665	)
Russell 2000® Fund		1,068,212		—		3,656,962			—
Inverse Russell 2000® Strategy Fund		—		—		(89,474	)		(50,927,759	)
Dow Jones Industrial Average® Fund		1,317,045		—		3,287,022			—
Government Long Bond 1.2x Strategy Fund		2,469		—		(1,166,144	)		(6,526,878	)
Inverse Government Long Bond Strategy Fund		—		—		(2,641,059	)		(338,049,483	)
High Yield Strategy Fund		6,077,252		—		2,881,782			—
Inverse High Yield Strategy Fund		—		—		(2,376	)		(17,286,737	)
U.S. Government Money Market Fund		33,657		—		—			—

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, 2017, capital loss carryforwards for the Funds were as follows:

							Unlimited
Fund	Expires in 2018			Expires in 2019			Short-Term			Long-Term			Total Capital Loss Carryforward
Nova Fund	$	—		$	—		$	—		$	—		$	—
S&P 500® Fund		—			—			—			—			—
Inverse S&P 500® Strategy Fund		(107,667,355	)		(64,265,070	)		(163,957,266	)		(23,266,114	)		(359,155,805	)
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		—			—			(85,930,417	)		(8,536,411	)		(94,466,828	)
Inverse NASDAQ 100® Strategy Fund		(16,105,314	)		(9,266,829	)		(25,274,959	)		(2,793,741	)		(53,440,843	)
Mid-Cap 1.5x Strategy Fund		—			—			—			—			—
Inverse Mid-Cap Strategy Fund		(6,411,872	)		(1,499,847	)		(3,898,578	)		(691,635	)		(12,501,932	)
Russell 2000® 1.5x Strategy Fund		—			—			—			—			—
Russell 2000® Fund		—			—			—			—			—
Inverse Russell 2000® Strategy Fund		(15,938,452	)		(10,451,551	)		(18,827,988	)		(5,698,735	)		(50,916,726	)
Dow Jones Industrial Average® Fund		—			—			—			—			—
Government Long Bond 1.2x Strategy Fund		—			—			(5,182,473	)		(1,344,405	)		(6,526,878	)
Inverse Government Long Bond Strategy Fund		(68,305,233	)		(23,242,075	)		(199,757,796	)		(45,532,341	)		(336,837,445	)
High Yield Strategy Fund		—			—			—			—			—
Inverse High Yield Strategy Fund		(3,356,295	)		(4,361,182	)		(7,495,166	)		(1,784,989	)		(16,997,632	)
U.S. Government Money Market Fund		—			—			—			—			—

214 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

For the year ended March 31, 2017, the following capital loss carryforward amounts were expired or used:

Fund	Expired		Utilized		Total
Monthly Rebalance NASDAQ-100® 2x Strategy Fund	$	—	$	2,161,924	$	2,161,924
Russell 2000® Fund		—		66,810		66,810
Inverse Government Long Bond Strategy Fund		24,167,315		10,226,265		34,393,580
High Yield Strategy Fund		—		5,761,833		5,761,833
Inverse High Yield Strategy Fund		—		306,953		306,953

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, net operating losses, utilization of earnings and profits on shareholder redemptions, dividend reclasses, disposition of PFIC stock, the “mark-to-market of certain passive foreign investment companies (PFICs), swap reclasses, partnership adjustments and mark-to-market on futures contracts. 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	$	58,356,957		$	—	$	(58,356,957	)
S&P 500® Fund		30,569,998			70,977		(30,640,975	)
Inverse S&P 500® Strategy Fund		(1,289,780	)		1,289,780		—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		(55,215	)		55,215		—
Inverse NASDAQ 100® Strategy Fund		(306,660	)		306,660		—
Mid-Cap 1.5x Strategy Fund		9,295,449			421,280		(9,716,729	)
Inverse Mid-Cap Strategy Fund		(30,920	)		30,920		—
Russell 2000® 1.5x Strategy Fund		—			255,135		(255,135	)
Russell 2000® Fund		1,522,006			364,234		(1,886,240	)
Inverse Russell 2000® Strategy Fund		(306,571	)		306,571		—
Dow Jones Industrial Average® Fund		3,407,627			—		(3,407,627	)
Government Long Bond 1.2x Strategy Fund		—			—		—
Inverse Government Long Bond Strategy Fund		(28,978,080	)		4,810,765		24,167,315
High Yield Strategy Fund		18,188,528			15,160,057		(33,348,585	)
Inverse High Yield Strategy Fund		(1,405,678	)		472,977		932,701
U.S. Government Money Market Fund		595,794			2,667		(598,461	)

THE RYDEX FUNDS ANNUAL REPORT | 215

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, 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	$	104,173,238	$	—	$	(536,040	)	$	(536,040	)
S&P 500® Fund		244,907,191		32,370,860		(1,380,609	)		30,990,251
Inverse S&P 500® Strategy Fund		91,772,010		108,225		(39,721	)		68,504
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		26,804,529		1,628,947		(191,013	)		1,437,934
Inverse NASDAQ 100® Strategy Fund		13,000,319		34,090		—			34,090
Mid-Cap 1.5x Strategy Fund		28,909,933		341,532		(91,652	)		249,880
Inverse Mid-Cap Strategy Fund		625,376		2,033		—			2,033
Russell 2000® 1.5x Strategy Fund		10,290,558		211,670		(8,482	)		203,188
Russell 2000® Fund		49,418,153		4,827,614		(1,289,041	)		3,538,573
Inverse Russell 2000® Strategy Fund		15,384,184		10,700		—			10,700
Dow Jones Industrial Average® Fund		49,840,545		3,319,870		(27,412	)		3,292,458
Government Long Bond 1.2x Strategy Fund		46,973,639		—		(1,166,144	)		(1,166,144	)
Inverse Government Long Bond Strategy Fund		318,963,359		—		(2,217,822	)		(2,217,822	)
High Yield Strategy Fund		442,475,229		262,786		(911	)		261,875
Inverse High Yield Strategy Fund		3,159,721		20,972		—			20,972
U.S. Government Money Market Fund		633,967,708		1,422		(1,422	)		—

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, 2017, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2017:

Fund	Ordinary			Capital
Inverse S&P 500® Strategy Fund	$	(122,695	)	$	—
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		(25,894	)		—
Inverse NASDAQ 100® Strategy Fund		(8,539	)		—
Inverse Mid-Cap Strategy Fund		(2,680	)		—
Inverse Russell 2000® Strategy Fund		(11,033	)		—
Russell 2000® 1.5x Strategy Fund		(30,719	)		(2,909,946	)
Inverse Government Long Bond Strategy Fund		(1,212,038	)		—
Inverse High Yield Strategy Fund		(289,105	)		—

216 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

9. Securities Transactions

For the year ended March 31, 2017, 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	$	1,887,820,750	$	1,993,624,193
S&P 500® Fund		309,387,407		289,052,748
Inverse S&P 500® Strategy Fund		54,007,463		116,834,904
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		76,027,310		56,432,075
Inverse NASDAQ-100® Strategy Fund		27,857,549		32,097,837
Mid-Cap 1.5x Strategy Fund		613,065,798		604,583,377
Inverse Mid-Cap Strategy Fund		526,638		1,239,000
Russell 2000® 1.5x Strategy Fund		161,400,206		161,396,709
Russell 2000® Fund		91,352,516		64,734,095
Inverse Russell 2000® Strategy Fund		1,662,123		10,577,977
Dow Jones Industrial Average® Fund		277,121,027		280,727,376
Government Long Bond 1.2x Strategy Fund		72,358,441		93,160,000
Inverse Government Long Bond Strategy Fund		176,250,920		182,584,502
High Yield Strategy Fund		84,783,727		394,732,450
Inverse High Yield Strategy Fund		15,423,381		17,007,000
U.S. Government Money Market Fund		—		—

For the year ended March 31, 2017, the cost of purchases and proceeds from sales of government securities were as follows:

Fund	Purchases		Sales
Government Long Bond 1.2x Strategy Fund	$	1,780,870,156	$	1,826,965,328
Inverse Government Long Bond Strategy Fund		2,453,075,156		2,440,564,391

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 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, 2017, 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	$	233,868,770	$	386,551,411	$	24,451,084
S&P 500® Fund		261,911,030		173,601,962		794,189
Inverse S&P 500® Strategy Fund		—		15,019,334		19,334
Mid-Cap 1.5x Strategy Fund		23,193,837		7,406,245		209,214
Russell 2000® 1.5x Strategy Fund		52,890,596		39,724,466		896,008
Russell 2000® Fund		71,391,087		39,478,948		(580,080	)
Dow Jones Industrial Average® Fund		16,242,240		30,173,387		601,016
Inverse Government Long Bond Strategy Fund		—		10,012,890		12,890
High Yield Strategy Fund		2,124,923		61,361,121		35,563
U.S. Government Money Market Fund		115,108,856		—		—

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 | 217

NOTES TO FINANCIAL STATEMENTS (continued)

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, 2016, is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at https://www.sec.gov/Archives/edgar/data/1601445/000089180416001923/gug65857-ncsr.htm.

Transactions during the year ended March 31, 2017, in which the portfolio company is an “affiliated person,” were as follows:

Affiliated issuers by Fund	Value 03/31/16		Additions		Reductions			Value 03/31/17		Shares 03/31/17		Investment Income		Realized Gain (Loss)
Nova Fund
Guggenheim Strategy Fund I	$	761,374	$	58,705,132	$	(47,129,992	)	$	12,473,562		497,947	$	217,607	$	54,026
Guggenheim Strategy Fund II		—		16,180,500		(4,202,000	)		12,060,988		482,440		200,059		686
	$	761,374	$	74,885,632	$	(51,331,992	)	$	24,534,550			$	417,666	$	54,712
Inverse S&P 500® Strategy Fund
Guggenheim Strategy Fund I	$	57,103,957	$	5,151,654	$	(56,200,000	)	$	6,317,313		252,188	$	280,229	$	84,489
Guggenheim Strategy Fund II		—		9,350,204		(1,650,000	)		7,769,577		310,783		160,630		7,015
	$	57,103,957	$	14,501,858	$	(57,850,000	)	$	14,086,890			$	440,859	$	91,504
Monthly Rebalance NASDAQ-100® 2x Strategy Fund
Guggenheim Strategy Fund I	$	633,522	$	2,919,752	$	(1,845,000	)	$	1,719,776		68,654	$	25,402	$	4,502
Guggenheim Strategy Fund II		—		3,168,019		(1,458,000	)		1,719,595		68,784		31,853		3,386
	$	633,522	$	6,087,771	$	(3,303,000	)	$	3,439,371			$	57,255	$	7,888
Inverse NASDAQ-100® Strategy Fund
Guggenheim Strategy Fund I	$	5,940,393	$	22,699,746	$	(26,050,000	)	$	2,620,638		104,616	$	62,269	$	16,892
Guggenheim Strategy Fund II		—		5,157,803		(2,550,000	)		2,624,943		104,998		47,660		(786	)
	$	5,940,393	$	27,857,549	$	(28,600,000	)	$	5,245,581			$	109,929	$	16,106
Mid-Cap 1.5x Strategy Fund
Guggenheim Strategy Fund I	$	1,948,249	$	13,355,463	$	(6,530,000	)	$	8,803,108		351,421	$	97,806	$	4,408
Guggenheim Strategy Fund II		—		11,311,045		(1,179,000	)		10,160,083		406,403		115,994		264
	$	1,948,249	$	24,666,508	$	(7,709,000	)	$	18,963,191			$	213,800	$	4,672
Inverse Mid-Cap Strategy Fund
Guggenheim Strategy Fund I	$	980,068	$	252,593	$	(1,100,000	)	$	136,272		5,440	$	4,535	$	466
Guggenheim Strategy Fund II		—		274,045		(139,000	)		136,140		5,446		2,604		11
	$	980,068	$	526,638	$	(1,239,000	)	$	272,412			$	7,139	$	477
Russell 2000® 1.5x Strategy Fund
Guggenheim Strategy Fund I	$	57,101	$	21,693,937	$	(18,700,000	)	$	3,064,195		122,323	$	33,167	$	6,972
Guggenheim Strategy Fund II		—		18,155,204		(14,800,000	)		3,364,931		134,597		42,425		2,997
	$	57,101	$	39,849,141	$	(33,500,000	)	$	6,429,126			$	75,592	$	9,969
Inverse Russell 2000® Strategy Fund
Guggenheim Strategy Fund I	$	6,610,653	$	611,919	$	(6,630,000	)	$	610,653		24,377	$	21,157	$	14,644
Guggenheim Strategy Fund II		—		1,050,204		(450,000	)		605,492		24,220		12,174		242
	$	6,610,653	$	1,662,123	$	(7,080,000	)	$	1,216,145			$	33,331	$	14,886
Dow Jones Industrial Average® Fund
Guggenheim Strategy Fund I	$	3,861,421	$	7,022,058	$	(5,360,000	)	$	5,547,747		221,467	$	55,708	$	3,402
Guggenheim Strategy Fund II		—		6,197,401		(660,000	)		5,558,437		222,337		64,428		(153	)
	$	3,861,421	$	13,219,459	$	(6,020,000	)	$	11,106,184			$	120,136	$	3,249

218 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

Affiliated issuers by Fund	Value 03/31/16		Additions		Reductions			Value 03/31/17		Shares 03/31/17		Investment Income		Realized Gain (Loss)
Government Long Bond 1.2x Strategy Fund
Guggenheim Strategy Fund I	$	31,234,529	$	44,411,023	$	(70,605,000	)	$	5,157,351		205,882	$	129,914	$	102,011
Guggenheim Strategy Fund II		—		27,947,417		(22,555,000	)		5,467,852		218,714		125,478		53,062
	$	31,234,529	$	72,358,440	$	(93,160,000	)	$	10,625,203			$	255,392	$	155,073
Inverse Government Long Bond Strategy Fund
Guggenheim Strategy Fund I	$	40,271,414	$	67,366,659	$	(95,680,000	)	$	12,116,192		483,680	$	235,346	$	54,094
Guggenheim Strategy Fund II		—		30,917,160		(20,425,000	)		10,605,112		424,204		233,611		29,806
	$	40,271,414	$	98,283,819	$	(116,105,000	)	$	22,721,304			$	468,957	$	83,900
High Yield Strategy Fund
Guggenheim Strategy Fund I	$	169,920,842	$	17,144,106	$	(174,877,987	)	$	12,493,038		498,724	$	362,381	$	342,653
Guggenheim Strategy Fund II		57,405,255		6,714,414		(52,404,000	)		12,008,695		480,348		374,390		226,365
Guggenheim Strategy Fund III		—		6,501,000		—			6,544,723		261,684		131,953		—
	$	227,326,097	$	30,359,520	$	(227,281,987	)	$	31,046,456			$	868,724	$	569,018
Inverse High Yield Strategy Fund
Guggenheim Strategy Fund I	$	2,056,929	$	8,305,040	$	(9,105,000	)	$	1,272,956		50,817	$	28,096	$	6,608
Guggenheim Strategy Fund II		2,033,059		6,606,013		(7,390,000	)		1,270,223		50,809		36,415		8,619
	$	4,089,988	$	14,911,053	$	(16,495,000	)	$	2,543,179			$	64,511	$	15,227

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 11, 2017. 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 1.58% for the year ended March 31, 2017. The Funds did not have any borrowings outstanding under this agreement at March 31, 2017.

The average daily balances borrowed for the year ended March 31, 2017, were as follows:

Fund	Average Daily Balance
Nova Fund	$	72,529
Inverse S&P 500® Strategy Fund		37,522
Monthly Rebalance NASDAQ-100® 2x Strategy Fund		8,474
Inverse NASDAQ-100® Strategy Fund		5,016
Mid Cap 1.5x Strategy Fund		225
Russell 2000® 1.5x Strategy Fund		14,284
Russell 2000® Fund		10,389
Dow Jones Industrial Average® Fund		13,370
Government Long Bond 1.2x Strategy Fund		162,622
Inverse Government Long Bond Strategy Fund		60,573
High Yield Strategy Fund		45,948
U.S. Government Money Market Fund		93,008

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.

THE RYDEX FUNDS ANNUAL REPORT | 219

NOTES TO FINANCIAL STATEMENTS (continued)

13. Reverse Share Splits

Share splits occurred for the following Funds at the close of business:

Fund	Effective Date	Split Type
Inverse S&P 500® Strategy Fund	October 28, 2016	One-for-Six Reverse Share Split
Inverse NASDAQ-100® Strategy Fund	November 4, 2016	One-for-Four Reverse Share Split
Inverse High Yield Strategy Fund	November 4, 2016	One-for-Four Reverse Share Split

14. 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 Tribune 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 conncection 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 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, their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments. On April 12, 2016, the Plaintiffs in the SLCFC actions filed a petition seeking rehearing en banc before the appeals court. On July 22, 2016, the appeals court denied the petition. On September 9, 2016, the plaintiffs filed a petition for writ of certiorari in the U.S. Supreme Court challenging the Second Circuit’s decision that the safe harbor of Section 546(e) applied to their claims. The shareholder defendants, including the Funds, filed a joint brief in opposition to the petition for certiorari on October 24, 2016. The Supreme Court has not yet granted or denied the petition for certiorari.

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. On January 6, 2017, the United States District Court for the Southern District of New York granted the shareholder defendants’ motion to dismiss the intentional fraudulent conveyance claim in the FitzSimons action. In dismissing the intentional fraudulent conveyance claim, the Court denied the plaintiff’s request to amend the complaint. The plaintiff requested that the Court direct entry of a final judgment in order to make the order immediately appealable. On February 23, 2017, the Court issued an order stating that it intends to permit an interlocutory appeal of the dismissal order, but will wait to do so until it has resolved outstanding motions to dismiss filed by other defendants. Accordingly, the timing of the appeal is uncertain.

220 | THE RYDEX FUNDS ANNUAL REPORT

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”). Its funds may also be putative members of the proposed defendant classes in Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adv. Pro. No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust Action”) and Weisfelner, as Trustee of the LB Creditor Trust, v. Reichman (In re Lyondell Chemical Co.), Adv. Pro. No. 12-1570 (Bankr. S.D.N.Y.) (“Reichman”).

Similar to the claims made in the Tribune matter, the Weisfelner complaints seek to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008. The Creditor Trust Action and Reichman allege claims against the former Lyondell shareholders under state law for both constructive fraudulent transfer and intentional fraudulent transfer. The Litigation Trust Action alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On April 7, 2014, the plaintiff filed a Third Amended Complaint in the Creditor Trust Action, a Second Amended Complaint in the Litigation Trust Action, and an Amended Complaint in Reichman.

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 these lawsuits. The Bankruptcy Court held oral argument on the motion 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 intentional fraudulent transfer claims in the Creditor Trust Action, the Litigation Trust Action, and in Reichman, but denied the motion to dismiss the constructive fraudulent transfer claims in the Creditor Trust Action and in Reichman. The Bankruptcy Court entered final judgment dismissing the Litigation Trust Action, but the plaintiff 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 Action and Reichman in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. On July 20, 2016, the Bankruptcy Court issued a report and recommendation granting the defendants’ motion to dismiss. The U.S. District Court for the Southern District of New York has not yet accepted the Bankruptcy Court’s recommendation or entered a final judgment.

On July 27, 2016, the District Court reversed the Bankruptcy Court and reinstated the federal law intentional fraudulent transfer claim in the Litigation Trust Action and remanded to the Bankruptcy Court for further proceedings. The District Court found that the fraudulent intent that mattered was that of Lyondell’s CEO, not its board, because the CEO’s intent could be imputed to Lyondell under Delaware law agency principles. The District Court did note, however, that plaintiff faces a high standard for proving “actual intent” to harm creditors, and that it remains to be seen whether plaintiff will be able to make this showing. On August 11, 2016, the shareholder defendants filed a motion for reconsideration and/or to certify an interlocutory appeal of the District Court’s opinion. On October 5, 2016, the District Court denied the motion for reconsideration and/or to certify an interlocutory appeal. In light of this ruling, the federal intentional fraudulent conveyance claim will move forward before the Bankruptcy Court, but a schedule for that case has not yet been set.

THE RYDEX FUNDS ANNUAL REPORT | 221

NOTES TO FINANCIAL STATEMENTS (concluded)

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.

222 | 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 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, 2017, and the related statements of operations for the year then ended, and 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, 2017, 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, 2017, and the results of their operations for the year then ended, and 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.

 

Tysons, Virginia
May 30, 2017

THE RYDEX FUNDS ANNUAL REPORT | 223

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, 2017, 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	68.93%
Russell 2000® 1.5x Strategy Fund	10.90%
Dow Jones Industrial Average® Fund	16.76%

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	70.99%
Russell 2000® 1.5x Strategy Fund	11.39%
Dow Jones Industrial Average® Fund	15.03%

Of the taxable income distributions paid during the fiscal year ending March 31, 2017, 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
Nova Fund	7.73%	0.00%
S&P 500® Fund	2.38%	0.00%
Russell 2000® 1.5x Strategy Fund	0.00%	100.00%
Dow Jones Industrial Average® Fund	5.82%	100.00%
Government Long Bond 1.2x Strategy Fund	92.91%	0.00%
High Yield Strategy Fund	91.13%	0.00%
U.S. Government Money Market Fund	100.00%	100.00%

With respect to the taxable year ended March 31, 2017, 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	$	1,146,043	$	20,433,820
S&P 500® Fund		2,075,033		25,465,586
Mid-Cap 1.5x Strategy Fund		715,324		3,363,727
Russell 2000® 1.5x Strategy Fund		741,106		—
Dow Jones Industrial Average® Fund		198,308		243,638
Government Long Bond 1.2x Strategy Fund		1,662,337		—

224 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)(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 https://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 https://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 https://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 | 225

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)	President and 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).	230	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Guggenheim Partners Investment Management Holdings, LLC (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Angela Brock-Kyle***** (1959)	Trustee from August 2016 to present.	Current: Founder and Chief Executive Officer, B.O.A.R.D.S (consulting firm). Former: Senior Leader, TIAA (financial services firm) (1987-2012).	135	Infinity Property & Casualty Corporation (2014-present).
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.	135	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.	135	Epiphany Funds (4) (2009-present).

226 | 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
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.	135	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).	135	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).	135	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).	135	None.
Sandra G. Sponem***** (1958)	Trustee from August 2016 to present.	Current: Senior Vice President and Chief Financial Officer, M.A. Mortenson Companies, Inc. (general contracting firm) (2007-present).	135	None.

THE RYDEX FUNDS ANNUAL REPORT | 227

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
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.
Joanna M. Catalucci (1966)	AML Officer (2016-present)	Current: Chief Compliance Officer, certain funds in the Fund Complex (2012-present); Senior Managing Director, Guggenheim Investments (2014-present); AML Officer, certain funds in the Fund Complex (2016-present). Former: Chief Compliance Officer and Secretary, certain other funds in the Fund Complex (2008-2012); Senior Vice President & Chief Compliance Officer, Security Investors, LLC and certain affiliates (2010-2012); Chief Compliance Officer and Senior Vice President, Rydex Advisors, LLC and certain affiliates (2010-2011).
James M. Howley (1972)	Assistant Treasurer (2016-present)	Current: Managing Director, Guggenheim Investments (2004-present); Assistant Treasurer, certain other funds in the Fund Complex (2006-present). Former: Manager, Mutual Fund Administration of Van Kampen Investments, Inc. (1996-2004).
Keith D. Kemp (1960)	Assistant Treasurer (2016-present)	Current: Treasurer and Assistant Treasurer, certain other funds in the Fund Complex (2010-present); Managing Director of Guggenheim Partners Investment Management, LLC (2015-present); Chief Financial Officer, Guggenheim Specialized Products, LLC (2016-present). Former: Managing Director and Director, Transparent Value, LLC (2010-2016); Director, Guggenheim Partners Investment Management, LLC (2010-2015); Chief Operating Officer, Macquarie Capital Investment Management (2007-2009).
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).
Glenn McWhinnie (1969)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2009-present). Former: Tax Compliance Manager, Ernst & Young LLP (1996-2009).

228 | 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
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).
Adam J. Nelson (1979)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2015-present); Assistant Treasurer, certain other funds in the Fund Complex (2015-present). Former: Assistant Vice President and Fund Administration Director, State Street Corporation (2013-2015); Fund Administration Assistant Director, State Street (2011-2013); Fund Administration Manager, State Street (2009-2011).
Kimberly J. Scott (1974)	Assistant Treasurer (2016-present)	Current: Director, Guggenheim Investments (2012-present); Assistant Treasurer, certain other funds in the Fund Complex (2012-present). Former: Financial Reporting Manager, Invesco, Ltd. (2010-2011); Vice President/Assistant Treasurer, Mutual Fund Administration for Van Kampen Investments, Inc./Morgan Stanley Investment Management (2009-2010); Manager of Mutual Fund Administration, Van Kampen Investments, Inc./Morgan Stanley Investment Management (2005-2009).
John L. Sullivan (1955)	Chief Financial Officer and Treasurer (2016-present)	Current: CFO, Chief Accounting Officer and Treasurer, certain other funds in the Fund Complex (2010-present); Senior Managing Director, Guggenheim Investments (2010-present). Former: Managing Director and CCO, each of the funds in the Van Kampen Investments fund complex (2004-2010); Managing Director and Head of Fund Accounting and Administration, Morgan Stanley Investment Management (2002-2004); CFO and Treasurer, Van Kampen Funds (1996-2004).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 227 West Monroe Street, Chicago, Illinois 60606.
**	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.
****	Certain of the Trustees may serve as directors on the boards of companies not required to be disclosed above, including certain non-profit companies and charitable foundations.
*****	Mses. Brock-Kyle and Sponem commence serving as independent Trustees effective August 18, 2016.

THE RYDEX FUNDS ANNUAL REPORT | 229

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Guggenheim Investments as used herein refers to Guggenheim Partners, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Investment Management, LLC, Guggenheim Funds Distributors, LLC and Security Investors, LLC as well as the funds in the Guggenheim Funds complex (the “funds”).

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 personal information about you, we hold ourselves to high standards in its safekeeping and use. This means, most importantly, that we do not sell client or account information to anyone—whether you are a current or former Guggenheim Investments client.

The Information We Collect About You and How We Collect It

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 Funds or one of the Guggenheim affiliated companies. “Nonpublic personal information” is personally identifiable information about you. For example it includes 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 Share Your Personal Information

As a matter of policy, we do not disclose your nonpublic personal information to nonaffiliated third parties except as required or permitted by law. 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 your personal 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. In connection with servicing your accounts or 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 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 personal 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 share personal information about you if we are compelled by law to do so, if you direct us to do so with your consent, or in other circumstances as permitted by law.

How We Safeguard Your Personal Information

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Guggenheim Investments, access to such information is limited to those who need it to perform their jobs such as servicing your account, resolving problems or informing you of new products and services.

230 | THE RYDEX FUNDS ANNUAL REPORT

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3.31.2017

Rydex Funds Annual Report

Domestic Equity Funds

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

International Equity Funds

Europe 1.25x Strategy Fund

Japan 2x Strategy Fund

Specialty Funds

Strengthening Dollar 2x Strategy Fund

Weakening Dollar 2x Strategy Fund

GuggenheimInvestments.com RTB2-ANN-0317x0318

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	19
S&P MIDCAP 400® PURE GROWTH FUND	28
S&P MIDCAP 400® PURE VALUE FUND	36
S&P SMALLCAP 600® PURE GROWTH FUND	44
S&P SMALLCAP 600® PURE VALUE FUND	53
EUROPE 1.25x STRATEGY FUND	62
JAPAN 2x STRATEGY FUND	71
STRENGTHENING DOLLAR 2x STRATEGY FUND	79
WEAKENING DOLLAR 2x STRATEGY FUND	87
NOTES TO FINANCIAL STATEMENTS	95
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	111
OTHER INFORMATION	112
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	114
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	118

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2017

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, 2017.

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 and Chief Executive Officer
April 30, 2017

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.

2 | THE RYDEX FUNDS ANNUAL REPORT

March 31, 2017

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.

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, 2017

The market optimism that helped lift risk asset prices after the presidential election in November continued through the early part of 2017. The Standard & Poor’s 500^® (“S&P 500”) Index* set a new record, high yield corporate bond spreads approached cycle lows, and the 10-year Treasury yield rose to 2.63%, the highest level since 2014. Risk appetite faded as the first quarter drew to a close, however, as investors grappled with the implications of an unsuccessful healthcare reform bill and growing geopolitical risks.

Much of the rise in asset valuations since Donald Trump’s victory has been based on anticipation of his pro-growth policies coming to fruition, an outcome that is far from certain. Asset valuations could be getting a bit ahead of themselves, and becoming more sensitive to a temporary growth scare or setback, especially since the rollout of Trump’s new policies will not be smooth or easy.

Nevertheless, the underlying economy remains on a good trajectory. Tracking estimates for first-quarter real U.S. Gross Domestic Product (“GDP”) growth have fallen in recent weeks despite strong gains in consumer and business sentiment since the election. In late April, after the period ended, the initial estimate of first-quarter GDP growth was 0.7%. However, we attribute a large portion of the apparent weakness to seasonal factors that have depressed as-reported first quarter GDP growth over the past several years. In keeping with this pattern, we would expect the final first-quarter GDP number to be revised higher. More importantly, the prospects for quarterly U.S. GDP growth appear stronger going forward.

Consumer spending should benefit from solid income and wealth gains, with household net worth sitting at an all-time high. Recent job gains have been strong, and we anticipate a further acceleration of wage growth as the labor market continues to tighten. Buoyant consumer sentiment and low household debt service outlays also support our positive outlook. On the business investment side, we expect various factors to be supportive, including the uptick in global industrial production growth, the ongoing rise in U.S. oil drilling activity, the surge in small-business optimism, and the recovery in corporate earnings.

On March 15, the Federal Open Market Committee (“FOMC”) raised the U.S. Federal Reserve (the “Fed”) funds target rate by 25 basis points to a range of 0.75–1.0%. The hike itself had little impact on markets because several FOMC members had indicated in the weeks leading up to the meeting that a hike was likely. Looking ahead, we believe that the market is underpricing the likely pace of Fed rate hikes in 2017 and 2018, particularly now that market optimism about fiscal stimulus is waning.

Importantly, Chair Yellen noted that the FOMC’s baseline forecast of two additional rate increases in 2017 and three more in 2018 was not conditioned on expectations for fiscal stimulus. Rather, it reflected a need to gradually remove accommodation due to the fact that the Fed has essentially achieved its dual mandate objectives for employment and inflation. Fiscal easing, she explained, could result in a faster pace of tightening, if it materializes. Markets are skeptical and are pricing in only 1.5 more rate hikes in 2017 and another 1.5 rate hikes in 2018, according to fed funds futures contracts. We expect that the Fed will deliver three more rate hikes in 2017 and another four in 2018.

We expect to see equity and credit investors take more chips off the table unless there is concrete progress on fiscal legislation in Washington, particularly as the Fed demonstrates its desire to tighten even without fiscal stimulus. While we are optimistic about the near-term U.S. economic outlook, current valuations and growing political risks warrant a more defensive stance.

For the 12 months ended March 31, 2017, the S&P 500 Index* returned 17.17%. The MSCI Europe-Australasia-Far East (“EAFE”) Index* returned 11.67%. The return of the MSCI Emerging Markets Index* was 17.22%.

In the bond market, the Bloomberg Barclays U.S. Aggregate Bond Index* posted a 0.44% return for the period, while the Bloomberg Barclays U.S. Corporate High Yield Index* returned 16.39%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.35% 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, 2017

*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.

Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, mortgage-backed securities or “MBS” (agency fixed-rate and hybrid adjustable-rate mortgage, or “ARM”, pass-throughs), asset-backed securities (“ABS”), and commercial mortgage-backed securities (“CMBS”) (agency and non-agency).

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

Bloomberg 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.

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.

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.

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)

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, 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, 2016 and ending March 31, 2017.

The following tables illustrate the Funds’ 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 fifth 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 the Funds’ expenses, including annual expense ratios for periods up to 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, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 1. Based on actual Fund return3
S&P 500® Pure Growth Fund
A-Class	1.53%	6.08%	$ 1,000.00	$ 1,060.80	$ 7.86
C-Class	2.28%	5.68%	1,000.00	1,056.80	11.69
H-Class	1.53%	6.08%	1,000.00	1,060.80	7.86
S&P 500® Pure Value Fund
A-Class	1.54%	11.48%	1,000.00	1,114.80	8.12
C-Class	2.28%	11.07%	1,000.00	1,110.70	12.00
H-Class	1.53%	11.49%	1,000.00	1,114.90	8.07
S&P MidCap 400® Pure Growth Fund
A-Class	1.53%	8.17%	1,000.00	1,081.70	7.94
C-Class	2.28%	7.76%	1,000.00	1,077.60	11.81
H-Class	1.53%	8.18%	1,000.00	1,081.80	7.94
S&P MidCap 400® Pure Value Fund
A-Class	1.54%	12.12%	1,000.00	1,121.20	8.14
C-Class	2.29%	11.72%	1,000.00	1,117.20	12.09
H-Class	1.54%	12.13%	1,000.00	1,121.30	8.14
S&P SmallCap 600® Pure Growth Fund
A-Class	1.54%	11.97%	1,000.00	1,119.70	8.14
C-Class	2.29%	11.56%	1,000.00	1,115.60	12.08
H-Class	1.54%	11.99%	1,000.00	1,119.90	8.14
S&P SmallCap 600® Pure Value Fund
A-Class	1.54%	8.61%	1,000.00	1,086.10	8.01
C-Class	2.29%	8.23%	1,000.00	1,082.30	11.89
H-Class	1.54%	8.69%	1,000.00	1,086.90	8.01
Europe 1.25x Strategy Fund
A-Class	1.79%	7.35%	1,000.00	1,073.50	9.25
C-Class	2.57%	6.93%	1,000.00	1,069.30	13.26
H-Class	1.78%	7.72%	1,000.00	1,077.20	9.22
Japan 2x Strategy Fund
A-Class	1.53%	7.97%	1,000.00	1,079.70	7.93
C-Class	2.28%	7.53%	1,000.00	1,075.30	11.80
H-Class	1.54%	8.30%	1,000.00	1,083.00	8.00
Strengthening Dollar 2x Strategy Fund
A-Class	1.75%	10.34%	1,000.00	1,103.40	9.18
C-Class	2.50%	9.92%	1,000.00	1,099.20	13.08
H-Class	1.74%	10.34%	1,000.00	1,103.40	9.12
Weakening Dollar 2x Strategy Fund
A-Class	1.73%	(11.14%)	1,000.00	888.60	8.15
C-Class	2.48%	(11.45%)	1,000.00	885.50	11.66
H-Class	1.73%	(11.11%)	1,000.00	888.90	8.15

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
S&P 500® Pure Growth Fund
A-Class	1.53%	5.00%	$ 1,000.00	$ 1,017.30	$ 7.70
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
S&P 500® Pure Value Fund
A-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
S&P MidCap 400® Pure Growth Fund
A-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
S&P MidCap 400® Pure Value Fund
A-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
C-Class	2.29%	5.00%	1,000.00	1,013.51	11.50
H-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
S&P SmallCap 600® Pure Growth Fund
A-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
C-Class	2.29%	5.00%	1,000.00	1,013.51	11.50
H-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
S&P SmallCap 600® Pure Value Fund
A-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
C-Class	2.29%	5.00%	1,000.00	1,013.51	11.50
H-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
Europe 1.25x Strategy Fund
A-Class	1.79%	5.00%	1,000.00	1,016.01	9.00
C-Class	2.57%	5.00%	1,000.00	1,012.12	12.89
H-Class	1.78%	5.00%	1,000.00	1,016.06	8.95
Japan 2x Strategy Fund
A-Class	1.53%	5.00%	1,000.00	1,017.30	7.70
C-Class	2.28%	5.00%	1,000.00	1,013.56	11.45
H-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
Strengthening Dollar 2x Strategy Fund
A-Class	1.75%	5.00%	1,000.00	1,016.21	8.80
C-Class	2.50%	5.00%	1,000.00	1,012.47	12.54
H-Class	1.74%	5.00%	1,000.00	1,016.26	8.75
Weakening Dollar 2x Strategy Fund
A-Class	1.73%	5.00%	1,000.00	1,016.31	8.70
C-Class	2.48%	5.00%	1,000.00	1,012.57	12.44
H-Class	1.73%	5.00%	1,000.00	1,016.31	8.70

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 182/365 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2016 to March 31, 2017.

THE RYDEX FUNDS ANNUAL REPORT | 9

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, S&P 500^® Pure Growth Fund H-Class returned 11.84%, compared with a gain of 13.70% for the S&P 500 Pure Growth Index. The Fund maintained a daily correlation of over 99% to its benchmark.

Information Technology was the sector contributing the most to the performance of the underlying index, followed by Industrials. Real Estate was the only sector that detracted from the performance of the underlying index. The Utilities sector contributed least.

Stocks that contributed the most to the return of the underlying index were NVIDIA Corp., Applied Materials, Inc., and Broadcom Ltd. Under Armour, Inc. Class C, TripAdvisor, Inc., and Urban Outfitters, 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)
Applied Materials, Inc.	2.9%
Ulta Beauty, Inc.	2.1%
NVIDIA Corp.	2.1%
IDEXX Laboratories, Inc.	2.0%
Lam Research Corp.	1.9%
Broadcom Ltd.	1.9%
Quanta Services, Inc.	1.6%
Facebook, Inc. — Class A	1.6%
UnitedHealth Group, Inc.	1.5%
Corning, Inc.	1.4%
Top Ten Total	19.0%

“Ten Largest Holdings” excludes any temporary cash investments.

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

 

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	11.84%	12.07%	8.66%
A-Class Shares with sales charge†	6.53%	10.98%	8.14%
C-Class Shares	10.99%	11.23%	7.84%
C-Class Shares with CDSC‡	9.99%	11.23%	7.84%
H-Class Shares	11.84%	12.08%	8.67%
S&P 500 Pure Growth Index	13.70%	13.92%	10.47%

*	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 very 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, 2017
S&P 500® PURE GROWTH FUND

	Shares		Value
COMMON STOCKS† - 99.4%
Technology - 20.6%
Applied Materials, Inc.		79,250	$	3,082,825
NVIDIA Corp.		20,415		2,223,805
Lam Research Corp.		15,642		2,007,807
Broadcom Ltd.		8,965		1,962,976
Microchip Technology, Inc.		17,791		1,312,620
Activision Blizzard, Inc.		23,202		1,156,852
Skyworks Solutions, Inc.		11,743		1,150,579
salesforce.com, Inc.*		11,918		983,116
Adobe Systems, Inc.*		6,500		845,845
Akamai Technologies, Inc.*		13,573		810,308
Red Hat, Inc.*		9,089		786,199
Electronic Arts, Inc.*		8,187		732,900
Texas Instruments, Inc.		8,700		700,872
Fidelity National Information Services, Inc.		8,800		700,656
Analog Devices, Inc.		8,500		696,575
Citrix Systems, Inc.*		8,308		692,804
Cerner Corp.*		10,998		647,232
Fiserv, Inc.*		4,986		574,936
QUALCOMM, Inc.		9,900		567,666
Total Technology				21,636,573
Consumer, Non-cyclical - 19.7%
IDEXX Laboratories, Inc.*		13,300		2,056,313
Quanta Services, Inc.*		46,200		1,714,482
UnitedHealth Group, Inc.		9,600		1,574,496
Celgene Corp.*		9,952		1,238,328
Constellation Brands, Inc. — Class A		7,105		1,151,507
Incyte Corp.*		7,500		1,002,525
PayPal Holdings, Inc.*		22,500		967,950
Humana, Inc.		4,600		948,244
Aetna, Inc.		7,385		941,957
Biogen, Inc.*		3,403		930,448
United Rentals, Inc.*,1		6,700		837,835
Cintas Corp.		6,430		813,652
Verisk Analytics, Inc. — Class A*		9,990		810,589
Total System Services, Inc.		14,394		769,503
S&P Global, Inc.		5,490		717,763
Becton Dickinson and Co.		3,900		715,416
Edwards Lifesciences Corp.*		6,820		641,557
Intuitive Surgical, Inc.*,1		800		613,176
Boston Scientific Corp.*		23,707		589,593
Stryker Corp.		4,400		579,260
CR Bard, Inc.		2,330		579,098
Gilead Sciences, Inc.		7,482		508,177
Total Consumer, Non-cyclical				20,701,869
Communications - 14.9%
Facebook, Inc. — Class A*		11,929		1,694,513
Charter Communications, Inc. — Class A*		4,500		1,472,940
F5 Networks, Inc.*		10,000		1,425,700
Amazon.com, Inc.*		1,600		1,418,465
Priceline Group, Inc.*		731		1,301,158
Motorola Solutions, Inc.		14,100		1,215,702
Scripps Networks Interactive, Inc. — Class A		14,900		1,167,713
Netflix, Inc.*		6,724		993,874
Expedia, Inc.		6,889		869,185
CBS Corp. — Class B		12,100		839,256
Time Warner, Inc.		8,300		810,993
Comcast Corp. — Class A		16,500		620,235
VeriSign, Inc.*		6,405		557,940
Discovery Communications, Inc. — Class C*		16,800		475,608
Discovery Communications, Inc. — Class A*,1		11,530		335,408
Alphabet, Inc. — Class A*		302		256,036
Alphabet, Inc. — Class C*		287		238,084
Total Communications				15,692,810
Financial - 14.3%
Prologis, Inc.		28,656		1,486,673
E*TRADE Financial Corp.*		32,980		1,150,673
UDR, Inc.1		31,521		1,142,950
Intercontinental Exchange, Inc.		18,650		1,116,576
Apartment Investment & Management Co. — Class A		24,500		1,086,575
American Tower Corp. — Class A		7,494		910,821
AvalonBay Communities, Inc.1		4,871		894,316
Host Hotels & Resorts, Inc.		46,800		873,288
Welltower, Inc.		12,000		849,840
GGP, Inc.		33,400		774,212
Digital Realty Trust, Inc.		7,000		744,730
Charles Schwab Corp.		16,114		657,612
Arthur J Gallagher & Co.		11,400		644,556
Kimco Realty Corp.		28,547		630,603
Discover Financial Services		8,200		560,798
Mastercard, Inc. — Class A		4,706		529,284
Extra Space Storage, Inc.		7,100		528,169
Marsh & McLennan Companies, Inc.		6,900		509,841
Total Financial				15,091,517
Industrial - 13.5%
Corning, Inc.		55,400		1,495,800
Vulcan Materials Co.		11,597		1,397,207
Ingersoll-Rand plc		14,500		1,179,140
Martin Marietta Materials, Inc.		4,660		1,017,045
Amphenol Corp. — Class A		12,600		896,742
Cummins, Inc.		5,500		831,600
TransDigm Group, Inc.		3,520		774,963
Northrop Grumman Corp.		3,200		761,088
Illinois Tool Works, Inc.1		5,700		755,079
FedEx Corp.		3,800		741,570
General Dynamics Corp.		3,900		730,080
Garmin Ltd.		14,000		715,540
Harris Corp.		6,300		701,001
Republic Services, Inc. — Class A		10,000		628,100
Acuity Brands, Inc.		2,930		597,720
Xylem, Inc.		10,500		527,310

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® PURE GROWTH FUND

	Shares		Value
J.B. Hunt Transport Services, Inc.		5,500	$	504,570
Total Industrial				14,254,555
Consumer, Cyclical - 13.3%
Ulta Beauty, Inc.*		7,800		2,224,794
Starbucks Corp.		24,700		1,442,233
Darden Restaurants, Inc.		15,000		1,255,050
Dollar Tree, Inc.*		14,563		1,142,613
United Continental Holdings, Inc.*		15,600		1,101,984
LKQ Corp.*		35,377		1,035,485
Michael Kors Holdings Ltd.*		23,700		903,207
Ross Stores, Inc.		13,173		867,706
Dollar General Corp.		10,000		697,300
Harley-Davidson, Inc.		10,400		629,200
Marriott International, Inc. — Class A		6,400		602,752
Southwest Airlines Co.		11,142		598,994
Hasbro, Inc.		5,500		549,010
O’Reilly Automotive, Inc.*		2,001		539,950
Advance Auto Parts, Inc.		3,121		462,719
Total Consumer, Cyclical				14,052,997
Basic Materials - 1.7%
Albemarle Corp.		10,600		1,119,784
Newmont Mining Corp.		19,900		655,904
Total Basic Materials				1,775,688
Energy - 0.9%
Murphy Oil Corp.		31,330		895,725
Utilities - 0.5%
American Water Works Co., Inc.		6,600		513,282
Total Common Stocks
(Cost $87,809,343)				104,615,016

	Face Amount
REPURCHASE AGREEMENTS††,2 - 0.8%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	419,586	419,586
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		270,313	270,313
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		58,543	58,543
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		41,435	41,435
Total Repurchase Agreements
(Cost $789,877)			789,877

	Shares
					��
SECURITIES LENDING COLLATERAL†,3 - 2.6%
First American Government Obligations Fund — Class Z, 0.61%4		2,721,737		2,721,737
Total Securities Lending Collateral
(Cost $2,721,737)				2,721,737
Total Investments - 102.8%
(Cost $91,320,957)			$	108,126,630
Other Assets & Liabilities, net - (2.8)%				(2,928,037	)
Total Net Assets - 100.0%			$	105,198,593

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
S&P 500® PURE GROWTH FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	104,615,016	$	—	$	—	$	104,615,016
Repurchase Agreements		—		789,877		—		789,877
Securities Lending Collateral		2,721,737		—		—		2,721,737
Total	$	107,336,753	$	789,877	$	—	$	108,126,630

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

S&P 500^® PURE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $2,669,045 of securities loaned (cost $90,531,080)	$	107,336,753
Repurchase agreements, at value (cost $789,877)		789,877
Total investments (cost $91,320,957)		108,126,630
Receivables:
Fund shares sold		76,521
Dividends		49,525
Interest		16
Securities lending income		181
Total assets		108,252,873
Liabilities:
Payable for:
Return of securities loaned		2,721,737
Fund shares redeemed		144,720
Management fees		62,163
Distribution and service fees		27,395
Transfer agent and administrative fees		20,721
Portfolio accounting fees		8,288
Miscellaneous		69,256
Total liabilities		3,054,280
Commitments and contingent liabilities (Note 13)		—
Net assets	$	105,198,593
Net assets consist of:
Paid in capital	$	84,735,952
Accumulated net investment loss		(331,761	)
Accumulated net realized gain on investments		3,988,729
Net unrealized appreciation on investments		16,805,673
Net assets	$	105,198,593
A-Class:
Net assets	$	15,574,511
Capital shares outstanding		269,265
Net asset value per share	$	57.84
Maximum offering price per share (Net asset value divided by 95.25%)	$	60.72
C-Class:
Net assets	$	10,951,464
Capital shares outstanding		210,069
Net asset value per share	$	52.13
H-Class:
Net assets	$	78,672,618
Capital shares outstanding		1,360,404
Net asset value per share	$	57.83

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends	$	698,948
Income from securities lending, net		2,873
Interest		1,485
Total investment income		703,306
Expenses:
Management fees		742,722
Transfer agent and administrative fees		247,574
Distribution and service fees:
A-Class		42,895
C-Class		136,435
H-Class		170,571
Portfolio accounting fees		99,029
Registration fees		83,766
Custodian fees		14,723
Trustees’ fees*		8,961
Line of credit fees		178
Miscellaneous		68,500
Total expenses		1,615,354
Net investment loss		(912,048	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		20,611,148
Net realized gain		20,611,148
Net change in unrealized appreciation (depreciation) on:
Investments		(8,959,618	)
Net change in unrealized appreciation (depreciation)		(8,959,618	)
Net realized and unrealized gain		11,651,530
Net increase in net assets resulting from operations	$	10,739,482

* 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 | 15

S&P 500^® PURE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(912,048	)	$	(747,485	)
Net realized gain (loss) on investments		20,611,148			(5,914,175	)
Net change in unrealized appreciation (depreciation) on investments		(8,959,618	)		(4,755,558	)
Net increase (decrease) in net assets resulting from operations		10,739,482			(11,417,218	)
Distributions to shareholders from:
Net realized gains
A-Class		(6,873	)		(857,343	)
C-Class		(5,189	)		(687,448	)
H-Class		(25,208	)		(3,476,889	)
Total distributions to shareholders		(37,270	)		(5,021,680	)
Capital share transactions:
Proceeds from sale of shares
A-Class		14,412,065			57,800,935
C-Class		1,978,513			7,117,304
H-Class		196,453,565			424,273,419
Distributions reinvested
A-Class		6,784			847,945
C-Class		5,050			679,901
H-Class		24,834			3,448,540
Cost of shares redeemed
A-Class		(24,797,962	)		(56,458,547	)
C-Class		(9,884,631	)		(10,768,882	)
H-Class		(238,506,871	)		(408,794,397	)
Net increase (decrease) from capital share transactions		(60,308,653	)		18,146,218
Net increase (decrease) in net assets		(49,606,441	)		1,707,320
Net assets:
Beginning of year		154,805,034			153,097,714
End of year	$	105,198,593		$	154,805,034
Accumulated net investment loss at end of year	$	(331,761	)	$	(50,197	)
Capital share activity:
Shares sold
A-Class		266,962			1,065,419
C-Class		39,085			144,257
H-Class		3,652,903			8,047,777
Shares issued from reinvestment of distributions
A-Class		125			15,838
C-Class		103			13,944
H-Class		458			64,423
Shares redeemed
A-Class		(462,388	)		(1,078,093	)
C-Class		(202,526	)		(227,917	)
H-Class		(4,481,621	)		(7,797,307	)
Net increase (decrease) in shares		(1,186,899	)		248,341

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	51.74		$	55.85		$	50.81		$	38.86		$	34.54
Income (loss) from investment operations:
Net investment income (loss)a		(.44	)		(.22	)		(.33	)		(.23	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		6.56			(2.47	)		6.86			12.18			4.45
Total from investment operations		6.12			(2.69	)		6.53			11.95			4.32
Less distributions from:
Net realized gains		(.02	)		(1.42	)		(1.49	)		—			—
Total distributions		(.02	)		(1.42	)		(1.49	)		—			—
Net asset value, end of period	$	57.84		$	51.74		$	55.85		$	50.81		$	38.86
Total Returnb		11.84	%		(4.90	%)		12.98	%		30.75	%		12.51	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	15,575		$	24,037		$	25,768		$	19,978		$	15,001
Ratios to average net assets:
Net investment income (loss)		(0.82	%)		(0.41	%)		(0.62	%)		(0.51	%)		(0.38	%)
Total expenses		1.53	%		1.50	%		1.50	%		1.52	%		1.51	%
Portfolio turnover rate		184	%		290	%		274	%		594	%		421	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	46.99		$	51.23		$	47.07		$	36.27		$	32.48
Income (loss) from investment operations:
Net investment income (loss)a		(.77	)		(.57	)		(.67	)		(.52	)		(.38	)
Net gain (loss) on investments (realized and unrealized)		5.93			(2.25	)		6.32			11.32			4.17
Total from investment operations		5.16			(2.82	)		5.65			10.80			3.79
Less distributions from:
Net realized gains		(.02	)		(1.42	)		(1.49	)		—			—
Total distributions		(.02	)		(1.42	)		(1.49	)		—			—
Net asset value, end of period	$	52.13		$	46.99		$	51.23		$	47.07		$	36.27
Total Returnb		10.99	%		(5.61	%)		12.13	%		29.78	%		11.70	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	10,951		$	17,546		$	22,701		$	17,042		$	8,692
Ratios to average net assets:
Net investment income (loss)		(1.57	%)		(1.16	%)		(1.37	%)		(1.24	%)		(1.19	%)
Total expenses		2.27	%		2.25	%		2.25	%		2.27	%		2.25	%
Portfolio turnover rate		184	%		290	%		274	%		594	%		421	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	51.73		$	55.84		$	50.80		$	38.84		$	34.52
Income (loss) from investment operations:
Net investment income (loss)a		(.44	)		(.18	)		(.34	)		(.23	)		(.15	)
Net gain (loss) on investments (realized and unrealized)		6.56			(2.51	)		6.87			12.19			4.47
Total from investment operations		6.12			(2.69	)		6.53			11.96			4.32
Less distributions from:
Net realized gains		(.02	)		(1.42	)		(1.49	)		—			—
Total distributions		(.02	)		(1.42	)		(1.49	)		—			—
Net asset value, end of period	$	57.83		$	51.73		$	55.84		$	50.80		$	38.84
Total Returnb		11.84	%		(4.91	%)		12.98	%		30.79	%		12.51	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	78,673		$	113,223		$	104,628		$	103,502		$	52,483
Ratios to average net assets:
Net investment income (loss)		(0.81	%)		(0.35	%)		(0.65	%)		(0.50	%)		(0.43	%)
Total expenses		1.52	%		1.51	%		1.50	%		1.52	%		1.50	%
Portfolio turnover rate		184	%		290	%		274	%		594	%		421	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, S&P 500^® Pure Value Fund H-Class returned 16.81%, compared with a gain of 18.96% for the S&P 500 Pure Value Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The Financials sector was the leading contributor to the performance of the underlying index, followed by the Industrials sector. The Telecommunications Services sector was the only sector that detracted from performance. The Consumer Discretionary sector contributed least.

The strongest contributors to performance of the underlying index for the year included Leucadia National Corp., Quanta Services, Inc., and HP, Inc. The stocks that detracted most from performance of the underlying index were First Solar, Inc., Frontier Communications Corp., and Endo International Plc.

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)
Arconic, Inc.	2.3%
Berkshire Hathaway, Inc. — Class B	2.3%
General Motors Co.	1.9%
Centene Corp.	1.9%
Valero Energy Corp.	1.7%
Archer-Daniels-Midland Co.	1.7%
Anthem, Inc.	1.7%
Prudential Financial, Inc.	1.7%
CenturyLink, Inc.	1.6%
Assurant, Inc.	1.6%
Top Ten Total	18.4%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 19

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	16.80%	13.03%	5.46%
A-Class Shares with sales charge†	11.25%	11.93%	4.95%
C-Class Shares	15.94%	12.19%	4.71%
C-Class Shares with CDSC‡	14.94%	12.19%	4.71%
H-Class Shares	16.81%	13.03%	5.50%
S&P 500 Pure Value Index	18.96%	15.20%	8.05%

*	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.

20 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
S&P 500® PURE VALUE FUND

	Shares		Value
COMMON STOCKS† - 99.8%
Financial - 31.7%
Berkshire Hathaway, Inc. — Class B*		9,119	$	1,519,955
Prudential Financial, Inc.		10,426		1,112,246
Assurant, Inc.		10,750		1,028,453
XL Group Ltd.		23,321		929,575
Unum Group		19,625		920,216
Hartford Financial Services Group, Inc.		18,689		898,380
MetLife, Inc.		16,658		879,876
Lincoln National Corp.		13,094		857,002
Allstate Corp.		10,148		826,961
Loews Corp.		16,027		749,583
Citigroup, Inc.		11,755		703,184
Bank of America Corp.		29,625		698,854
Capital One Financial Corp.		8,006		693,800
American International Group, Inc.		10,566		659,635
Aflac, Inc.		8,098		586,457
Travelers Companies, Inc.		4,818		580,762
Regions Financial Corp.		37,985		551,922
Morgan Stanley		11,998		513,994
SunTrust Banks, Inc.		8,830		488,299
Chubb Ltd.1		3,497		476,466
Principal Financial Group, Inc.		6,850		432,304
JPMorgan Chase & Co.		4,687		411,706
Goldman Sachs Group, Inc.		1,756		403,388
Progressive Corp.		10,083		395,052
Zions Bancorporation		9,093		381,906
PNC Financial Services Group, Inc.		3,121		375,269
Fifth Third Bancorp		14,555		369,697
People’s United Financial, Inc.		18,515		336,973
Navient Corp.		20,022		295,525
BB&T Corp.		6,460		288,762
Bank of New York Mellon Corp.		6,104		288,292
Wells Fargo & Co.		5,069		282,141
Torchmark Corp.		3,559		274,185
Huntington Bancshares, Inc.		19,697		263,743
State Street Corp.		2,794		222,430
Invesco Ltd.		6,889		211,010
Total Financial				20,908,003
Consumer, Cyclical - 20.4%
General Motors Co.		35,690		1,261,997
Ford Motor Co.		85,090		990,448
Goodyear Tire & Rubber Co.		23,521		846,756
AutoNation, Inc.*,1		19,738		834,720
PulteGroup, Inc.		34,655		816,126
Staples, Inc.		87,977		771,558
Wal-Mart Stores, Inc.		10,221		736,730
CVS Health Corp.		9,189		721,337
Lennar Corp. — Class A		13,960		714,612
DR Horton, Inc.		21,397		712,734
Whirlpool Corp.		3,308		566,760
Kohl’s Corp.		13,415		534,051
Bed Bath & Beyond, Inc.		12,328		486,463
BorgWarner, Inc.		10,598		442,890
PVH Corp.		3,879		401,360
Costco Wholesale Corp.		2,300		385,687
Macy’s, Inc.		12,958		384,075
The Gap, Inc.		14,978		363,816
Walgreens Boots Alliance, Inc.		3,400		282,370
Target Corp.		5,004		276,171
Carnival Corp.		4,600		270,986
Delta Air Lines, Inc.		5,778		265,557
American Airlines Group, Inc.		6,198		262,175
Signet Jewelers Ltd.		2,600		180,102
Total Consumer, Cyclical				13,509,481
Consumer, Non-cyclical - 15.6%
Centene Corp.*		17,297		1,232,585
Archer-Daniels-Midland Co.		24,751		1,139,536
Anthem, Inc.		6,867		1,135,664
Cardinal Health, Inc.		10,388		847,141
McKesson Corp.		5,239		776,734
AmerisourceBergen Corp. — Class A		8,130		719,505
Tyson Foods, Inc. — Class A		10,628		655,854
Kroger Co.		20,367		600,622
Express Scripts Holding Co.*		8,393		553,183
Mallinckrodt plc*		12,280		547,320
Allergan plc		2,200		525,624
Patterson Companies, Inc.1		11,373		514,401
Whole Foods Market, Inc.		13,848		411,563
Cigna Corp.		2,370		347,181
DaVita, Inc.*		4,699		319,391
Total Consumer, Non-cyclical				10,326,304
Utilities - 7.9%
Exelon Corp.		19,913		716,470
Entergy Corp.		9,104		691,540
FirstEnergy Corp.		17,141		545,427
NRG Energy, Inc.		28,317		529,527
AES Corp.		43,331		484,441
Duke Energy Corp.		5,508		451,711
Consolidated Edison, Inc.		5,062		393,116
Eversource Energy		5,308		312,004
Public Service Enterprise Group, Inc.		6,907		306,325
Ameren Corp.		4,994		272,622
Xcel Energy, Inc.		5,936		263,855
DTE Energy Co.		2,506		255,888
Total Utilities				5,222,926
Industrial - 7.4%
Arconic, Inc.		58,966		1,553,164
Fluor Corp.		14,183		746,309
Ryder System, Inc.		7,513		566,781
WestRock Co.		10,321		537,002
Jacobs Engineering Group, Inc.		9,206		508,908
Textron, Inc.		7,999		380,672
Johnson Controls International plc		7,989		336,497
Eaton Corp. plc		3,669		272,056
Total Industrial				4,901,389

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P 500® PURE VALUE FUND

	Shares		Value
Energy - 6.7%
Valero Energy Corp.		17,368	$	1,151,324
Tesoro Corp.		11,078		897,983
Marathon Petroleum Corp.		16,941		856,198
Transocean Ltd.*,1		62,111		773,282
Phillips 66		6,762		535,686
Marathon Oil Corp.		14,620		230,996
Total Energy				4,445,469
Communications - 3.8%
CenturyLink, Inc.1		44,501		1,048,889
News Corp. — Class A		56,016		728,208
AT&T, Inc.		6,599		274,188
TEGNA, Inc.		9,955		255,047
News Corp. — Class B		17,518		236,493
Total Communications				2,542,825
Technology - 3.4%
Xerox Corp.		121,655		892,948
Hewlett Packard Enterprise Co.		30,756		728,916
HP, Inc.		20,337		363,626
Western Digital Corp.		3,420		282,253
Total Technology				2,267,743
Diversified - 1.5%
Leucadia National Corp.		38,717		1,006,642
Basic Materials - 1.4%
Mosaic Co.		22,707		662,590
Eastman Chemical Co.		3,100		250,480
Total Basic Materials				913,070
Total Common Stocks
(Cost $53,448,919)				66,043,852

	Face Amount
REPURCHASE AGREEMENTS††,2 - 0.6%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	210,057	210,057
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		135,327	135,327
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		29,309	29,309
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		20,744	20,744
Total Repurchase Agreements
(Cost $395,437)			395,437

	Shares
SECURITIES LENDING COLLATERAL†,3 - 3.4%
First American Government Obligations Fund — Class Z, 0.61%4		2,256,303		2,256,303
Total Securities Lending Collateral
(Cost $2,256,303)				2,256,303
Total Investments - 103.8%
(Cost $56,100,659)			$	68,695,592
Other Assets & Liabilities, net - (3.8)%				(2,483,803	)
Total Net Assets - 100.0%			$	66,211,789

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	plc — Public Limited Company
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
S&P 500® PURE VALUE FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	66,043,852	$	—	$	—	$	66,043,852
Repurchase Agreements		—		395,437		—		395,437
Securities Lending Collateral		2,256,303		—		—		2,256,303
Total	$	68,300,155	$	395,437	$	—	$	68,695,592

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

S&P 500^® PURE VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $2,206,809 of securities loaned (cost $55,705,222)	$	68,300,155
Repurchase agreements, at value (cost $395,437)		395,437
Total investments (cost $56,100,659)		68,695,592
Receivables:
Securities sold		3,433,066
Fund shares sold		21,572
Dividends		99,387
Interest		8
Securities lending income		642
Total assets		72,250,267
Liabilities:
Payable for:
Fund shares redeemed		3,622,418
Return of securities loaned		2,256,303
Management fees		54,286
Distribution and service fees		21,549
Transfer agent and administrative fees		18,095
Portfolio accounting fees		7,238
Miscellaneous		58,589
Total liabilities		6,038,478
Commitments and contingent liabilities (Note 13)		—
Net assets	$	66,211,789
Net assets consist of:
Paid in capital	$	58,379,187
Undistributed net investment income		342,239
Accumulated net realized loss on investments		(5,104,570	)
Net unrealized appreciation on investments		12,594,933
Net assets	$	66,211,789
A-Class:
Net assets	$	6,685,804
Capital shares outstanding		87,486
Net asset value per share	$	76.42
Maximum offering price per share (Net asset value divided by 95.25%)	$	80.23
C-Class:
Net assets	$	3,912,730
Capital shares outstanding		58,282
Net asset value per share	$	67.13
H-Class:
Net assets	$	55,613,255
Capital shares outstanding		725,003
Net asset value per share	$	76.71

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends	$	1,557,891
Income from securities lending, net		2,039
Interest		1,165
Total investment income		1,561,095
Expenses:
Management fees		497,877
Transfer agent and administrative fees		165,959
Distribution and service fees:
A-Class		20,478
C-Class		37,924
H-Class		136,000
Portfolio accounting fees		66,383
Custodian fees		9,887
Trustees’ fees*		5,143
Line of credit fees		222
Miscellaneous		103,741
Total expenses		1,043,614
Net investment income		517,481
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		9,473,645
Net realized gain		9,473,645
Net change in unrealized appreciation (depreciation) on:
Investments		(2,541,794	)
Net change in unrealized appreciation (depreciation)		(2,541,794	)
Net realized and unrealized gain		6,931,851
Net increase in net assets resulting from operations	$	7,449,332

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

24 | 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	517,481		$	792,718
Net realized gain (loss) on investments		9,473,645			(2,975,861	)
Net change in unrealized appreciation (depreciation) on investments		(2,541,794	)		540,213
Net increase (decrease) in net assets resulting from operations		7,449,332			(1,642,930	)
Distributions to shareholders from:
Net investment income
A-Class		(80,316	)		(230,654	)
C-Class		(33,250	)		(81,084	)
H-Class		(679,152	)		(773,153	)
Net realized gains
A-Class		—			(381,595	)
C-Class		—			(134,145	)
H-Class		—			(1,279,106	)
Total distributions to shareholders		(792,718	)		(2,879,737	)
Capital share transactions:
Proceeds from sale of shares
A-Class		25,346,366			21,610,017
C-Class		5,011,398			5,196,156
H-Class		218,922,617			283,243,022
Distributions reinvested
A-Class		78,769			607,532
C-Class		32,403			214,297
H-Class		677,330			2,039,461
Cost of shares redeemed
A-Class		(30,688,025	)		(25,025,972	)
C-Class		(5,062,879	)		(7,319,303	)
H-Class		(240,430,536	)		(261,907,569	)
Net increase (decrease) from capital share transactions		(26,112,557	)		18,657,641
Net increase (decrease) in net assets		(19,455,943	)		14,134,974
Net assets:
Beginning of year		85,667,732			71,532,758
End of year	$	66,211,789		$	85,667,732
Undistributed net investment income at end of year	$	342,239		$	792,718
Capital share activity:*
Shares sold
A-Class		363,232			325,256
C-Class		75,970			82,820
H-Class		3,073,769			4,260,374
Shares issued from reinvestment of distributions
A-Class		1,086			9,084
C-Class		507			3,606
H-Class		9,301			30,384
Shares redeemed
A-Class		(445,468	)		(389,324	)
C-Class		(78,861	)		(123,960	)
H-Class		(3,429,081	)		(3,891,646	)
Net increase in shares		(429,545	)		306,594

* Capital share activity for the periods through March 31, 2017, has been restated to reflect a 2:1 share split effective October 28, 2016 — See Note 12.

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	66.03		$	72.54		$	70.69		$	55.84		$	46.75
Income (loss) from investment operations:
Net investment income (loss)a		.55			.73			.57			.31			.29
Net gain (loss) on investments (realized and unrealized)		10.52			(4.63	)		3.42			17.50			8.87
Total from investment operations		11.07			(3.90	)		3.99			17.81			9.16
Less distributions from:
Net investment income		(.68	)		(.98	)		(.07	)		(.12	)		(.07	)
Net realized gains		—			(1.63	)		(2.07	)		(2.84	)		—
Total distributions		(.68	)		(2.61	)		(2.14	)		(2.96	)		(.07	)
Net asset value, end of period	$	76.42		$	66.03		$	72.54		$	70.69		$	55.84
Total Returnb		16.80	%		(5.44	%)		5.60	%		32.21	%		19.63	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,686		$	11,135		$	16,222		$	4,435		$	1,303
Ratios to average net assets:
Net investment income (loss)		0.79	%		1.08	%		0.78	%		0.47	%		0.61	%
Total expenses		1.53	%		1.50	%		1.51	%		1.52	%		1.51	%
Portfolio turnover rate		321	%		365	%		295	%		410	%		669	%

C-Class	Year Ended March 31, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	58.51		$	65.08		$	64.10		$	51.23		$	43.21
Income (loss) from investment operations:
Net investment income (loss)a		(.01	)		.17			.02			(.15	)		(.10	)
Net gain (loss) on investments (realized and unrealized)		9.31			(4.13	)		3.10			15.98			8.19
Total from investment operations		9.30			(3.96	)		3.12			15.83			8.09
Less distributions from:
Net investment income		(.68	)		(.98	)		(.07	)		(.12	)		(.07	)
Net realized gains		—			(1.63	)		(2.07	)		(2.84	)		—
Total distributions		(.68	)		(2.61	)		(2.14	)		(2.96	)		(.07	)
Net asset value, end of period	$	67.13		$	58.51		$	65.08		$	64.10		$	51.23
Total Returnb		15.94	%		(6.15	%)		4.81	%		31.21	%		18.76	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,913		$	3,550		$	6,390		$	5,090		$	3,430
Ratios to average net assets:
Net investment income (loss)		(0.01	%)		0.28	%		0.03	%		(0.26	%)		(0.22	%)
Total expenses		2.28	%		2.25	%		2.25	%		2.27	%		2.26	%
Portfolio turnover rate		321	%		365	%		295	%		410	%		669	%

26 | 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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Year Ended March 31, 2014c			Year Ended March 28, 2013c
Per Share Data
Net asset value, beginning of period	$	66.28		$	72.81		$	70.94		$	56.03		$	46.90
Income (loss) from investment operations:
Net investment income (loss)a		.59			.80			.49			.26			.29
Net gain (loss) on investments (realized and unrealized)		10.52			(4.72	)		3.52			17.61			8.91
Total from investment operations		11.11			(3.92	)		4.01			17.87			9.20
Less distributions from:
Net investment income		(.68	)		(.98	)		(.07	)		(.12	)		(.07	)
Net realized gains		—			(1.63	)		(2.07	)		(2.84	)		—
Total distributions		(.68	)		(2.61	)		(2.14	)		(2.96	)		(.07	)
Net asset value, end of period	$	76.71		$	66.28		$	72.81		$	70.94		$	56.03
Total Returnb		16.81	%		(5.44	%)		5.60	%		32.21	%		19.64	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	55,613		$	70,983		$	48,920		$	114,984		$	78,480
Ratios to average net assets:
Net investment income (loss)		(0.83	%)		1.17	%		0.66	%		0.40	%		0.58	%
Total expenses		1.53	%		1.50	%		1.51	%		1.52	%		1.52	%
Portfolio turnover rate		321	%		365	%		295	%		410	%		669	%

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	Share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 2:1 share split effective October 28, 2016 — See Note 12.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 27

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, S&P MidCap 400^® Pure Growth Fund H-Class returned 10.99%, compared with a gain of 12.63% for the S&P MidCap 400 Pure Growth Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The Financials and Information Technology sectors contributed the most to the performance of the underlying index for the period. No sector detracted. The Utilities sector contributed the least to return, followed by the Consumer Staples sector.

MarketAxess Holdings, Inc., Cognex Corp., and Kate Spade & Co. added the most to the performance of the underlying index for the period. Synaptics, Inc., Sprouts Farmers Markets, Inc., and Vista Outdoor, 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)
WebMD Health Corp. — Class A	2.3%
InterDigital, Inc.	2.3%
Cognex Corp.	2.1%
Kate Spade & Co.	2.1%
Align Technology, Inc.	2.1%
ABIOMED, Inc.	2.0%
NuVasive, Inc.	1.8%
MarketAxess Holdings, Inc.	1.8%
LogMeIn, Inc.	1.7%
Domino’s Pizza, Inc.	1.7%
Top Ten Total	19.9%

“Ten Largest Holdings” excludes any temporary cash investments.

28 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	10.98%	8.23%	8.70%
A-Class Shares with sales charge†	5.71%	7.18%	8.18%
C-Class Shares	10.16%	7.42%	7.90%
C-Class Shares with CDSC‡	9.16%	7.42%	7.90%
H-Class Shares	10.99%	8.23%	8.70%
S&P MidCap 400 Pure Growth Index	12.63%	9.59%	10.38%

*	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 | 29

SCHEDULE OF INVESTMENTS	March 31, 2017
S&P MIDCAP 400® PURE GROWTH FUND

	Shares		Value
COMMON STOCKS† - 99.5%
Consumer, Cyclical - 22.5%
Kate Spade & Co.*		98,500	$	2,288,155
Domino’s Pizza, Inc.		9,975		1,838,392
Thor Industries, Inc.		17,662		1,697,848
Urban Outfitters, Inc.*		64,400		1,530,144
Skechers U.S.A., Inc. — Class A*		51,977		1,426,769
Copart, Inc.*		22,060		1,366,176
Papa John’s International, Inc.1		16,570		1,326,263
Dick’s Sporting Goods, Inc.		23,053		1,121,759
Wendy’s Co.		82,363		1,120,960
Jack in the Box, Inc.		10,983		1,117,191
Texas Roadhouse, Inc. — Class A		24,449		1,088,714
MSC Industrial Direct Company, Inc. — Class A		10,280		1,056,373
NVR, Inc.*,1		500		1,053,440
Toro Co.		16,660		1,040,584
Churchill Downs, Inc.		6,500		1,032,525
Panera Bread Co. — Class A*,1		3,490		913,926
Pool Corp.		7,340		875,882
Dunkin’ Brands Group, Inc.		15,905		869,685
Buffalo Wild Wings, Inc.*,1		4,595		701,886
Cheesecake Factory, Inc.		10,680		676,685
Brinker International, Inc.1		13,570		596,537
Total Consumer, Cyclical				24,739,894
Consumer, Non-cyclical - 21.7%
Align Technology, Inc.*		19,920		2,285,023
ABIOMED, Inc.*		17,779		2,225,930
NuVasive, Inc.*		26,532		1,981,410
MarketAxess Holdings, Inc.		10,527		1,973,707
WellCare Health Plans, Inc.*		12,070		1,692,335
Masimo Corp.*,1		17,700		1,650,702
WhiteWave Foods Co. — Class A*		29,221		1,640,758
VCA, Inc.*,1		16,360		1,496,940
Bioverativ, Inc.*		24,600		1,339,716
CoreLogic, Inc.*		28,240		1,149,933
HealthSouth Corp.		25,950		1,110,920
Post Holdings, Inc.*		12,405		1,085,686
Avis Budget Group, Inc.*		32,469		960,433
Bio-Techne Corp.		9,137		928,776
Gartner, Inc.*		7,535		813,705
Akorn, Inc.*		32,353		779,060
Sotheby’s*,1		15,170		689,932
Total Consumer, Non-cyclical				23,804,966
Industrial - 17.2%
Cognex Corp.		27,892		2,341,533
Packaging Corporation of America		17,483		1,601,792
Eagle Materials, Inc.		13,555		1,316,733
Nordson Corp.		10,400		1,277,536
Carlisle Companies, Inc.		10,780		1,147,100
Granite Construction, Inc.		21,360		1,072,058
Littelfuse, Inc.		6,680		1,068,199
Old Dominion Freight Line, Inc.		11,800		1,009,726
Gentex Corp.		45,539		971,347
Coherent, Inc.*,1		4,500		925,380
Worthington Industries, Inc.		18,482		833,353
Zebra Technologies Corp. — Class A*		8,475		773,344
Landstar System, Inc.		8,990		769,994
AO Smith Corp.		14,090		720,844
Huntington Ingalls Industries, Inc.		3,500		700,840
Woodward, Inc.		9,168		622,691
Crane Co.		8,200		613,606
EnerSys		7,190		567,579
Curtiss-Wright Corp.		6,100		556,686
Total Industrial				18,890,341
Financial - 14.8%
SLM Corp.*		151,370		1,831,577
Uniti Group, Inc.		58,087		1,501,548
Primerica, Inc.1		18,160		1,492,752
First Horizon National Corp.		79,182		1,464,867
First Industrial Realty Trust, Inc.		47,970		1,277,442
Kilroy Realty Corp.		16,550		1,192,924
DCT Industrial Trust, Inc.		22,620		1,088,474
Education Realty Trust, Inc.		24,780		1,012,263
Brown & Brown, Inc.		22,930		956,640
Washington Federal, Inc.		24,465		809,792
Lamar Advertising Co. — Class A		10,345		773,185
Bank of the Ozarks, Inc.		14,755		767,408
Weingarten Realty Investors		22,560		753,278
Duke Realty Corp.		26,970		708,502
Liberty Property Trust		15,820		609,861
Total Financial				16,240,513
Technology - 12.8%
Cirrus Logic, Inc.*		29,145		1,768,811
Take-Two Interactive Software, Inc.*		28,900		1,712,903
Monolithic Power Systems, Inc.		13,504		1,243,719
Microsemi Corp.*		23,729		1,222,755
NCR Corp.*		24,655		1,126,240
MAXIMUS, Inc.		16,276		1,012,368
Ultimate Software Group, Inc.*		5,066		988,934
MSCI, Inc. — Class A		9,555		928,650
Science Applications International Corp.		11,380		846,672
Integrated Device Technology, Inc.*		29,866		706,928
Fair Isaac Corp.		5,241		675,827
IPG Photonics Corp.*		5,470		660,229
Broadridge Financial Solutions, Inc.		8,391		570,168
CommVault Systems, Inc.*		10,284		522,427
Total Technology				13,986,631
Communications - 6.3%
WebMD Health Corp. — Class A*		48,299		2,544,391
InterDigital, Inc.		29,173		2,517,630
LogMeIn, Inc.		18,900		1,842,750
Total Communications				6,904,771

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
S&P MIDCAP 400® PURE GROWTH FUND

	Shares		Value
Basic Materials - 2.8%
Royal Gold, Inc.		23,249	$	1,628,592
Minerals Technologies, Inc.		18,670		1,430,122
Total Basic Materials				3,058,714
Utilities - 1.4%
Southwest Gas Holdings, Inc.		10,780		893,770
MDU Resources Group, Inc.		25,040		685,345
Total Utilities				1,579,115
Total Common Stocks
(Cost $96,385,699)				109,204,945

	Face Amount
REPURCHASE AGREEMENTS††,2 - 1.7%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	993,020	993,020
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		639,741	639,741

Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17	138,552	138,552
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	98,063	98,063
Total Repurchase Agreements
(Cost $1,869,376)		1,869,376

	Shares
SECURITIES LENDING COLLATERAL†,3 - 3.5%
First American Government Obligations Fund — Class Z, 0.61%4		3,808,131		3,808,131
Total Securities Lending Collateral
(Cost $3,808,131)				3,808,131
Total Investments - 104.7%
(Cost $102,063,206)			$	114,882,452
Other Assets & Liabilities, net - (4.7)%				(5,191,712	)
Total Net Assets - 100.0%			$	109,690,740

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	109,204,945	$	—	$	—	$	109,204,945
Repurchase Agreements		—		1,869,376		—		1,869,376
Securities Lending Collateral		3,808,131		—		—		3,808,131
Total	$	113,013,076	$	1,869,376	$	—	$	114,882,452

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

S&P MIDCAP 400^® PURE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $3,751,234 of securities loaned (cost $100,193,830)	$	113,013,076
Repurchase agreements, at value (cost $1,869,376)		1,869,376
Total investments (cost $102,063,206)		114,882,452
Receivables:
Fund shares sold		25,599
Dividends		112,248
Interest		36
Securities lending income		413
Total assets		115,020,748
Liabilities:
Payable for:
Return of securities loaned		3,808,131
Securities purchased		893,299
Fund shares redeemed		397,834
Management fees		69,536
Distribution and service fees		32,779
Transfer agent and administrative fees		23,179
Portfolio accounting fees		9,271
Miscellaneous		95,979
Total liabilities		5,330,008
Commitments and contingent liabilities (Note 13)		—
Net assets	$	109,690,740
Net assets consist of:
Paid in capital	$	96,371,589
Accumulated net investment loss		(151,615	)
Accumulated net realized gain on investments		651,520
Net unrealized appreciation on investments		12,819,246
Net assets	$	109,690,740
A-Class:
Net assets	$	16,268,747
Capital shares outstanding		320,023
Net asset value per share	$	50.84
Maximum offering price per share (Net asset value divided by 95.25%)	$	53.38
C-Class:
Net assets	$	15,049,455
Capital shares outstanding		335,677
Net asset value per share	$	44.83
H-Class:
Net assets	$	78,372,538
Capital shares outstanding		1,539,979
Net asset value per share	$	50.89

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends	$	987,508
Income from securities lending, net		6,513
Interest		1,699
Total investment income		995,720
Expenses:
Management fees		889,553
Transfer agent and administrative fees		296,518
Distribution and service fees:
A-Class		50,706
C-Class		177,504
H-Class		201,436
Portfolio accounting fees		118,606
Custodian fees		17,475
Trustees’ fees*		10,692
Line of credit fees		259
Miscellaneous		183,201
Total expenses		1,945,950
Net investment loss		(950,230	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		11,414,440
Net realized gain		11,414,440
Net change in unrealized appreciation (depreciation) on:
Investments		360,205
Net change in unrealized appreciation (depreciation)		360,205
Net realized and unrealized gain		11,774,645
Net increase in net assets resulting from operations	$	10,824,415

* 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.

S&P MIDCAP 400^® PURE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(950,230	)	$	(1,474,357	)
Net realized gain on investments		11,414,440			618,071
Net change in unrealized appreciation (depreciation) on investments		360,205			(19,480,581	)
Net increase (decrease) in net assets resulting from operations		10,824,415			(20,336,867	)
Distributions to shareholders from:
Net realized gains
A-Class		(297,374	)		(2,228,224	)
C-Class		(291,932	)		(1,333,119	)
H-Class		(1,136,619	)		(6,095,021	)
Total distributions to shareholders		(1,725,925	)		(9,656,364	)
Capital share transactions:
Proceeds from sale of shares
A-Class		10,325,932			53,831,940
C-Class		2,821,225			8,486,478
H-Class		79,121,033			132,856,460
Distributions reinvested
A-Class		290,748			2,217,738
C-Class		289,859			1,326,118
H-Class		1,122,775			6,025,101
Cost of shares redeemed
A-Class		(25,120,641	)		(60,087,772	)
C-Class		(9,691,842	)		(12,136,902	)
H-Class		(102,777,781	)		(150,323,558	)
Net decrease from capital share transactions		(43,618,692	)		(17,804,397	)
Net decrease in net assets		(34,520,202	)		(47,797,628	)
Net assets:
Beginning of year		144,210,942			192,008,570
End of year	$	109,690,740		$	144,210,942
Accumulated net investment loss at end of year	$	(151,615	)	$	(267,173	)
Capital share activity:
Shares sold
A-Class		212,056			1,045,660
C-Class		66,159			181,153
H-Class		1,640,941			2,636,800
Shares issued from reinvestment of distributions
A-Class		6,116			45,094
C-Class		6,895			30,201
H-Class		23,593			122,362
Shares redeemed
A-Class		(522,005	)		(1,221,580	)
C-Class		(227,092	)		(270,847	)
H-Class		(2,163,025	)		(3,033,087	)
Net decrease in shares		(956,362	)		(464,244	)

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	46.51		$	53.86		$	58.66		$	49.76		$	44.11
Income (loss) from investment operations:
Net investment income (loss)a		(.34	)		(.36	)		(.29	)		(.22	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		5.41			(4.48	)		3.88			11.05			5.84
Total from investment operations		5.07			(4.84	)		3.59			10.83			5.65
Less distributions from:
Net realized gains		(.74	)		(2.51	)		(8.39	)		(1.93	)		—
Total distributions		(.74	)		(2.51	)		(8.39	)		(1.93	)		—
Net asset value, end of period	$	50.84		$	46.51		$	53.86		$	58.66		$	49.76
Total Returnb		10.98	%		(9.23	%)		7.18	%		21.90	%		12.81	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	16,269		$	29,017		$	40,648		$	59,293		$	45,638
Ratios to average net assets:
Net investment income (loss)		(0.71	%)		(0.71	%)		(0.53	%)		(0.40	%)		(0.43	%)
Total expenses		1.52	%		1.50	%		1.51	%		1.52	%		1.50	%
Portfolio turnover rate		127	%		143	%		134	%		131	%		188	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	41.41		$	48.60		$	54.13		$	46.39		$	41.43
Income (loss) from investment operations:
Net investment income (loss)a		(.61	)		(.66	)		(.64	)		(.58	)		(.49	)
Net gain (loss) on investments (realized and unrealized)		4.77			(4.02	)		3.50			10.25			5.45
Total from investment operations		4.16			(4.68	)		2.86			9.67			4.96
Less distributions from:
Net realized gains		(.74	)		(2.51	)		(8.39	)		(1.93	)		—
Total distributions		(.74	)		(2.51	)		(8.39	)		(1.93	)		—
Net asset value, end of period	$	44.83		$	41.41		$	48.60		$	54.13		$	46.39
Total Returnb		10.16	%		(9.92	%)		6.39	%		20.98	%		12.00	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	15,049		$	20,279		$	26,689		$	28,567		$	18,837
Ratios to average net assets:
Net investment income (loss)		(1.44	%)		(1.46	%)		(1.26	%)		(1.15	%)		(1.19	%)
Total expenses		2.27	%		2.25	%		2.26	%		2.27	%		2.25	%
Portfolio turnover rate		127	%		143	%		134	%		131	%		188	%

34 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	46.56		$	53.91		$	58.71		$	49.80		$	44.14
Income (loss) from investment operations:
Net investment income (loss)a		(.33	)		(.36	)		(.29	)		(.18	)		(.20	)
Net gain (loss) on investments (realized and unrealized)		5.40			(4.48	)		3.88			11.02			5.86
Total from investment operations		5.07			(4.84	)		3.59			10.84			5.66
Less distributions from:
Net realized gains		(.74	)		(2.51	)		(8.39	)		(1.93	)		—
Total distributions		(.74	)		(2.51	)		(8.39	)		(1.93	)		—
Net asset value, end of period	$	50.89		$	46.56		$	53.91		$	58.71		$	49.80
Total Returnb		10.99	%		(9.22	%)		7.18	%		21.91	%		12.82	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	78,373		$	94,915		$	124,672		$	186,863		$	242,157
Ratios to average net assets:
Net investment income (loss)		(0.68	%)		(0.71	%)		(0.52	%)		(0.33	%)		(0.45	%)
Total expenses		1.53	%		1.50	%		1.51	%		1.52	%		1.50	%
Portfolio turnover rate		127	%		143	%		134	%		131	%		188	%

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 | 35

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, S&P MidCap 400^® Pure Value Fund H-Class returned 21.36%, compared with a return of 24.00% 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 Materials and Industrials. The Health Care sector detracted the most from performance, followed by the Consumer Discretionary sector.

United States Steel Corp., Joy Global, Inc., and WPX Energy, Inc., Class A contributed the most to the performance of the underlying index for the period. Fossil Group, Inc., Abercrombie & Fitch Co. Class A, and Ascena Retail Group, 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)
KB Home	2.8%
LifePoint Health, Inc.	2.4%
Jabil Circuit, Inc.	2.1%
Avnet, Inc.	1.8%
Arrow Electronics, Inc.	1.8%
Tech Data Corp.	1.8%
Domtar Corp.	1.8%
CalAtlantic Group, Inc.	1.8%
Noble Corporation plc	1.8%
CNO Financial Group, Inc.	1.7%
Top Ten Total	19.8%

“Ten Largest Holdings” excludes any temporary cash investments.

36 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	21.34%	10.94%	4.82%
A-Class Shares with sales charge†	15.57%	9.87%	4.31%
C-Class Shares	20.46%	10.11%	3.99%
C-Class Shares with CDSC‡	19.46%	10.11%	3.99%
H-Class Shares	21.36%	10.94%	4.81%
S&P MidCap 400 Pure Value Index	24.00%	13.46%	7.75%

*	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 | 37

SCHEDULE OF INVESTMENTS	March 31, 2017
S&P MIDCAP 400® PURE VALUE FUND

	Shares		Value
COMMON STOCKS† - 99.9%
Financial - 23.6%
CNO Financial Group, Inc.		22,594	$	463,177
Reinsurance Group of America, Inc. — Class A		3,371		428,049
Old Republic International Corp.		20,419		418,182
Genworth Financial, Inc. — Class A*		95,322		392,727
Aspen Insurance Holdings Ltd.		6,484		337,492
Hanover Insurance Group, Inc.		3,603		324,486
First American Financial Corp.		7,913		310,823
Quality Care Properties, Inc.*		16,345		308,267
Everest Re Group Ltd.		1,227		286,885
Jones Lang LaSalle, Inc.		2,530		281,969
Legg Mason, Inc.		7,760		280,214
Kemper Corp.		6,869		274,073
Alleghany Corp.*		414		254,469
Medical Properties Trust, Inc.		19,000		244,910
WR Berkley Corp.		3,143		221,990
American Financial Group, Inc.		2,260		215,649
Umpqua Holdings Corp.		10,773		191,113
Cousins Properties, Inc.		23,090		190,954
LaSalle Hotel Properties		5,220		151,119
Stifel Financial Corp.*		2,974		149,265
Associated Banc-Corp.		5,876		143,374
Mercury General Corp.		2,270		138,447
CoreCivic, Inc.		4,280		134,478
TCF Financial Corp.		7,226		122,987
Janus Capital Group, Inc.		7,612		100,478
Waddell & Reed Financial, Inc. — Class A1		5,530		94,010
Total Financial				6,459,587
Consumer, Cyclical - 19.5%
KB Home		37,897		753,392
CalAtlantic Group, Inc.		13,140		492,093
GameStop Corp. — Class A		20,348		458,847
Dillard’s, Inc. — Class A1		8,750		457,100
Office Depot, Inc.		94,900		442,709
TRI Pointe Group, Inc.*		30,490		382,345
World Fuel Services Corp.		9,479		343,614
Toll Brothers, Inc.*		9,130		329,684
CST Brands, Inc.		6,466		310,950
Cooper Tire & Rubber Co.		6,060		268,761
Dana, Inc.		12,967		250,393
Big Lots, Inc.1		4,431		215,701
JetBlue Airways Corp.*		8,306		171,187
International Speedway Corp. — Class A		3,736		138,045
HSN, Inc.		2,908		107,887
J.C. Penney Company, Inc.*,1		16,927		104,270
American Eagle Outfitters, Inc.		7,315		102,629
Total Consumer, Cyclical				5,329,607
Industrial - 19.3%
Jabil Circuit, Inc.		20,026		579,152
Avnet, Inc.		10,966		501,804
Arrow Electronics, Inc.*		6,823		500,876
Tech Data Corp.*		5,309		498,515
AECOM*		9,711		345,614
Trinity Industries, Inc.		11,877		315,334
SYNNEX Corp.		2,655		297,201
Terex Corp.		9,329		292,931
KLX, Inc.*		6,291		281,208
AGCO Corp.1		4,438		267,079
Owens-Illinois, Inc.*		11,400		232,332
KBR, Inc.		12,620		189,679
Vishay Intertechnology, Inc.		11,062		181,970
Cree, Inc.*		6,575		175,750
Regal Beloit Corp.		2,224		168,246
Kirby Corp.*		1,702		120,076
Greif, Inc. — Class A		2,171		119,600
Werner Enterprises, Inc.		4,392		115,070
Esterline Technologies Corp.*		1,300		111,865
Total Industrial				5,294,302
Consumer, Non-cyclical - 17.2%
LifePoint Health, Inc.*		10,227		669,868
ManpowerGroup, Inc.		3,926		402,690
United Natural Foods, Inc.*		8,809		380,813
Endo International plc*		34,029		379,764
Owens & Minor, Inc.		10,513		363,750
Graham Holdings Co. — Class B		568		340,544
Molina Healthcare, Inc.*		7,224		329,414
TreeHouse Foods, Inc.*		3,598		304,606
Dean Foods Co.		15,157		297,987
Aaron’s, Inc.		9,610		285,801
DeVry Education Group, Inc.		7,068		250,561
FTI Consulting, Inc.*		4,633		190,741
Tenet Healthcare Corp.*		9,004		159,460
Halyard Health, Inc.*		3,550		135,220
Flowers Foods, Inc.		6,360		123,448
Avon Products, Inc.*		19,692		86,645
Total Consumer, Non-cyclical				4,701,312
Energy - 8.0%
Noble Corporation plc		78,460		485,667
First Solar, Inc.*,1		13,680		370,728
Murphy USA, Inc.*		4,414		324,076
HollyFrontier Corp.		11,061		313,469
Rowan Companies plc — Class A*		19,460		303,187
Western Refining, Inc.		7,476		262,183
Oceaneering International, Inc.		4,645		125,787
Total Energy				2,185,097
Basic Materials - 4.6%
Domtar Corp.		13,497		492,910
Reliance Steel & Aluminum Co.		3,292		263,426
Commercial Metals Co.		10,633		203,409
Carpenter Technology Corp.		3,942		147,037
Olin Corp.		4,275		140,519
Total Basic Materials				1,247,301
Communications - 4.2%
Time, Inc.		22,074		427,132
Telephone & Data Systems, Inc.		15,605		413,689

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
S&P MIDCAP 400® PURE VALUE FUND

	Shares		Value
Frontier Communications Corp.1		148,480	$	317,747
Total Communications				1,158,568
Technology - 2.1%
NeuStar, Inc. — Class A*		6,670		221,110
Diebold Nixdorf, Inc.		5,720		175,604
Leidos Holdings, Inc.		3,262		166,819
Total Technology				563,533
Utilities - 1.4%
Great Plains Energy, Inc.		8,500		248,370
Hawaiian Electric Industries, Inc.		4,461		148,596
Total Utilities				396,966
Total Common Stocks
(Cost $24,113,261)				27,336,273

	Face Amount
REPURCHASE AGREEMENTS††,2 - 0.4%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	58,490	58,490
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		37,682	37,682

Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17	8,161	8,161
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	5,776	5,776
Total Repurchase Agreements
(Cost $110,109)		110,109

	Shares
SECURITIES LENDING COLLATERAL†,3 - 4.6%
First American Government Obligations Fund — Class Z, 0.61%4		1,260,166		1,260,166
Total Securities Lending Collateral
(Cost $1,260,166)				1,260,166
Total Investments - 104.9%
(Cost $25,483,536)			$	28,706,548
Other Assets & Liabilities, net - (4.9)%				(1,340,456	)
Total Net Assets - 100.0%			$	27,366,092

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	27,336,273	$	—	$	—	$	27,336,273
Repurchase Agreements		—		110,109		—		110,109
Securities Lending Collateral		1,260,166		—		—		1,260,166
Total	$	28,596,439	$	110,109	$	—	$	28,706,548

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

S&P MIDCAP 400^® PURE VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $1,205,672 of securities loaned (cost $25,373,427)	$	28,596,439
Repurchase agreements, at value (cost $110,109)		110,109
Total investments (cost $25,483,536)		28,706,548
Receivables:
Fund shares sold		218,319
Dividends		24,084
Interest		2
Securities lending income		273
Total assets		28,949,226
Liabilities:
Payable for:
Return of securities loaned		1,260,166
Fund shares redeemed		270,450
Management fees		19,081
Distribution and service fees		8,879
Transfer agent and administrative fees		6,360
Portfolio accounting fees		2,544
Miscellaneous		15,654
Total liabilities		1,583,134
Commitments and contingent liabilities (Note 13)		—
Net assets	$	27,366,092
Net assets consist of:
Paid in capital	$	26,002,192
Accumulated net investment loss		—
Accumulated net realized loss on investments		(1,859,112	)
Net unrealized appreciation on investments		3,223,012
Net assets	$	27,366,092
A-Class:
Net assets	$	2,957,217
Capital shares outstanding		57,548
Net asset value per share	$	51.39
Maximum offering price per share (Net asset value divided by 95.25%)	$	53.95
C-Class:
Net assets	$	3,265,699
Capital shares outstanding		70,870
Net asset value per share	$	46.08
H-Class:
Net assets	$	21,143,176
Capital shares outstanding		411,875
Net asset value per share	$	51.33

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends	$	495,141
Income from securities lending, net		2,387
Interest		724
Total investment income		498,252
Expenses:
Management fees		271,257
Transfer agent and administrative fees		90,419
Distribution and service fees:
A-Class		5,850
C-Class		31,453
H-Class		76,706
Portfolio accounting fees		36,167
Custodian fees		5,463
Trustees’ fees*		3,181
Line of credit fees		144
Miscellaneous		56,296
Total expenses		576,936
Net investment loss		(78,684	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		5,833,493
Net realized gain		5,833,493
Net change in unrealized appreciation (depreciation) on:
Investments		(1,694,499	)
Net change in unrealized appreciation (depreciation)		(1,694,499	)
Net realized and unrealized gain		4,138,994
Net increase in net assets resulting from operations	$	4,060,310

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

40 | 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(78,684	)	$	52,548
Net realized gain (loss) on investments		5,833,493			(1,107,050	)
Net change in unrealized appreciation (depreciation) on investments		(1,694,499	)		1,847,168
Net increase in net assets resulting from operations		4,060,310			792,666
Distributions to shareholders from:
Net investment income
A-Class		(4,378	)		(2,509	)
C-Class		(5,759	)		(4,545	)
H-Class		(42,411	)		(21,661	)
Total distributions to shareholders		(52,548	)		(28,715	)
Capital share transactions:
Proceeds from sale of shares
A-Class		5,501,146			7,839,706
C-Class		5,468,549			1,496,883
H-Class		250,100,866			117,775,736
Distributions reinvested
A-Class		4,352			2,473
C-Class		5,625			4,535
H-Class		42,140			21,374
Cost of shares redeemed
A-Class		(7,712,771	)		(4,655,658	)
C-Class		(4,823,563	)		(2,314,575	)
H-Class		(280,216,330	)		(79,851,430	)
Net increase (decrease) from capital share transactions		(31,629,986	)		40,319,044
Net increase (decrease) in net assets		(27,622,224	)		41,082,995
Net assets:
Beginning of year		54,988,316			13,905,321
End of year	$	27,366,092		$	54,988,316
Undistributed net investment income at end of year	$	—		$	52,548
Capital share activity:
Shares sold
A-Class		114,895			185,812
C-Class		127,191			42,699
H-Class		5,516,255			2,852,823
Shares issued from reinvestment of distributions
A-Class		89			58
C-Class		127			118
H-Class		860			505
Shares redeemed
A-Class		(169,970	)		(115,018	)
C-Class		(112,934	)		(59,256	)
H-Class		(6,238,907	)		(1,916,239	)
Net increase (decrease) in shares		(762,394	)		991,502

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	42.43		$	45.68		$	43.04		$	36.18		$	30.88
Income (loss) from investment operations:
Net investment income (loss)a		(.08	)		.16			.11			(.03	)		.07
Net gain (loss) on investments (realized and unrealized)		9.14			(3.30	)		2.58			7.08			5.23
Total from investment operations		9.06			(3.14	)		2.69			7.05			5.30
Less distributions from:
Net investment income		(.10	)		(.11	)		(.05	)		(.19	)		—
Total distributions		(.10	)		(.11	)		(.05	)		(.19	)		—
Net asset value, end of period	$	51.39		$	42.43		$	45.68		$	43.04		$	36.18
Total Returnb		21.34	%		(6.88	%)		6.25	%		19.49	%		17.16	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,957		$	4,775		$	1,904		$	2,357		$	1,571
Ratios to average net assets:
Net investment income (loss)		(0.17	%)		0.39	%		0.26	%		(0.06	%)		0.23	%
Total expenses		1.53	%		1.50	%		1.51	%		1.52	%		1.51	%
Portfolio turnover rate		628	%		493	%		638	%		506	%		757	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	38.33		$	41.59		$	39.48		$	33.46		$	28.78
Income (loss) from investment operations:
Net investment income (loss)a		(.36	)		(.12	)		(.18	)		(.25	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		8.21			(3.03	)		2.34			6.46			4.81
Total from investment operations		7.85			(3.15	)		2.16			6.21			4.68
Less distributions from:
Net investment income		(.10	)		(.11	)		(.05	)		(.19	)		—
Total distributions		(.10	)		(.11	)		(.05	)		(.19	)		—
Net asset value, end of period	$	46.08		$	38.33		$	41.59		$	39.48		$	33.46
Total Returnb		20.46	%		(7.58	%)		5.47	%		18.57	%		16.26	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,266		$	2,165		$	3,033		$	2,207		$	3,413
Ratios to average net assets:
Net investment income (loss)		(0.85	%)		(0.30	%)		(0.44	%)		(0.71	%)		(0.45	%)
Total expenses		2.28	%		2.25	%		2.26	%		2.28	%		2.26	%
Portfolio turnover rate		628	%		493	%		638	%		506	%		757	%

42 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	42.38		$	45.62		$	42.98		$	36.16		$	30.86
Income (loss) from investment operations:
Net investment income (loss)a		(.07	)		.20			.11			.06			.08
Net gain (loss) on investments (realized and unrealized)		9.12			(3.33	)		2.58			6.95			5.22
Total from investment operations		9.05			(3.13	)		2.69			7.01			5.30
Less distributions from:
Net investment income		(.10	)		(.11	)		(.05	)		(.19	)		—
Total distributions		(.10	)		(.11	)		(.05	)		(.19	)		—
Net asset value, end of period	$	51.33		$	42.38		$	45.62		$	42.98		$	36.16
Total Returnb		21.36	%		(6.86	%)		6.26	%		19.39	%		17.17	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	21,143		$	48,048		$	8,968		$	10,563		$	78,237
Ratios to average net assets:
Net investment income (loss)		(0.16	%)		0.47	%		0.25	%		0.15	%		0.24	%
Total expenses		1.53	%		1.51	%		1.51	%		1.52	%		1.52	%
Portfolio turnover rate		628	%		493	%		638	%		506	%		757	%

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 | 43

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, S&P SmallCap 600^® Pure Growth Fund H-Class returned 25.46%, compared with a gain of 27.95% for the S&P SmallCap 600 Pure Growth Index. The Fund maintained a daily correlation of over 99% to its benchmark.

The Health Care and Financials sectors contributed the most to the performance of the underlying index for the period. No sector detracted. The Telecommunications Services sector contributed the least to performance, followed by the Utilities sector.

The best-performing stocks in the S&P SmallCap 600 Pure Growth Index were Nutrisystem, Inc., Supernus Pharmaceuticals, Inc., and LogMeIn, Inc. The weakest performers in the underlying index were Cray, Inc., AMAG Pharmaceuticals, Inc., and Nautilus, 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)
NutriSystem, Inc.	2.1%
Installed Building Products, Inc.	1.7%
BioTelemetry, Inc.	1.5%
Zeltiq Aesthetics, Inc.	1.4%
LendingTree, Inc.	1.4%
MKS Instruments, Inc.	1.4%
Supernus Pharmaceuticals, Inc.	1.4%
Nanometrics, Inc.	1.3%
Innoviva, Inc.	1.3%
TiVo Corp.	1.2%
Top Ten Total	14.7%

“Ten Largest Holdings” excludes any temporary cash investments.

44 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	25.44%	11.55%	7.69%
A-Class Shares with sales charge†	19.48%	10.47%	7.16%
C-Class Shares	24.51%	10.72%	6.89%
C-Class Shares with CDSC‡	23.51%	10.72%	6.89%
H-Class Shares	25.46%	11.55%	7.68%
S&P SmallCap 600 Pure Growth Index	27.95%	13.70%	9.93%

*	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 | 45

SCHEDULE OF INVESTMENTS	March 31, 2017
S&P SMALLCAP 600® PURE GROWTH FUND

	Shares		Value
COMMON STOCKS† - 99.4%
Consumer, Non-cyclical - 28.9%
NutriSystem, Inc.		13,816	$	766,788
BioTelemetry, Inc.*		19,830		574,078
Zeltiq Aesthetics, Inc.*		9,372		521,178
LendingTree, Inc.*		4,082		511,679
Supernus Pharmaceuticals, Inc.*		16,190		506,747
Innoviva, Inc.*		35,002		484,078
MiMedx Group, Inc.*,1		46,021		438,580
OraSure Technologies, Inc.*		32,880		425,138
Progenics Pharmaceuticals, Inc.*		44,810		423,006
Viad Corp.		8,865		400,698
Insperity, Inc.		4,193		371,709
SpartanNash Co.		10,080		352,699
Heska Corp.*		3,340		350,633
Central Garden & Pet Co. — Class A*		9,534		331,020
AMN Healthcare Services, Inc.*		7,404		300,602
Cross Country Healthcare, Inc.*		19,038		273,386
SciClone Pharmaceuticals, Inc.*		26,663		261,297
ANI Pharmaceuticals, Inc.*		4,526		224,082
AMAG Pharmaceuticals, Inc.*		9,903		223,313
Cardtronics plc — Class A*		4,690		219,258
Cantel Medical Corp.		2,578		206,498
B&G Foods, Inc.		4,832		194,488
Calavo Growers, Inc.		2,851		172,771
Navigant Consulting, Inc.*		7,248		165,689
Capella Education Co.1		1,935		164,523
Luminex Corp.		8,699		159,801
Ligand Pharmaceuticals, Inc. — Class B*,1		1,478		156,432
CryoLife, Inc.*		9,133		152,064
Merit Medical Systems, Inc.*		5,249		151,696
Sucampo Pharmaceuticals, Inc. — Class A*,1		12,410		136,510
HMS Holdings Corp.*		6,586		133,893
Eagle Pharmaceuticals, Inc.*,1		1,610		133,533
Enanta Pharmaceuticals, Inc.*		4,251		130,931
Forrester Research, Inc.		3,280		130,380
US Physical Therapy, Inc.		1,779		116,169
Landauer, Inc.		2,358		114,953
Central Garden & Pet Co.*		2,858		105,946
Neogen Corp.*,1		1,616		105,929
Surmodics, Inc.*		4,067		97,811
Momenta Pharmaceuticals, Inc.*		6,592		88,003
Total Consumer, Non-cyclical				10,777,989
Industrial - 20.8%
CTS Corp.		20,230		430,899
Orion Group Holdings, Inc.*		56,794		424,251
Trex Company, Inc.*		5,951		412,939
TTM Technologies, Inc.*		24,850		400,831
Advanced Energy Industries, Inc.*		5,685		389,764
Patrick Industries, Inc.*		5,471		387,894
II-VI, Inc.*		10,320		372,036
TopBuild Corp.*		7,870		369,890
Griffon Corp.		14,868		366,496
Tetra Tech, Inc.		8,757		357,723
Fabrinet*		8,268		347,504
Headwaters, Inc.*		12,852		301,765
TASER International, Inc.*,1		12,858		293,034
Gibraltar Industries, Inc.*		6,850		282,220
John Bean Technologies Corp.		2,978		261,915
US Ecology, Inc.		5,509		258,097
MYR Group, Inc.*		6,255		256,455
Lydall, Inc.*		4,529		242,754
Quanex Building Products Corp.1		11,130		225,383
Vicor Corp.*		12,530		201,733
Insteel Industries, Inc.		5,498		198,698
ESCO Technologies, Inc.		3,018		175,346
AAON, Inc.		4,720		166,852
PGT Innovations, Inc.*		14,069		151,242
Itron, Inc.*		2,419		146,833
Astec Industries, Inc.		2,354		144,759
Simpson Manufacturing Company, Inc.		2,646		114,016
Knight Transportation, Inc.		3,105		97,342
Total Industrial				7,778,671
Financial - 18.1%
Four Corners Property Trust, Inc.		19,548		446,281
First BanCorp*		66,926		378,132
Piper Jaffray Cos.		5,040		321,804
Universal Insurance Holdings, Inc.		12,550		307,475
BofI Holding, Inc.*,1		11,403		297,961
Walker & Dunlop, Inc.*		6,974		290,746
WageWorks, Inc.*		3,920		283,416
LegacyTexas Financial Group, Inc.		7,101		283,330
Summit Hotel Properties, Inc.		16,865		269,503
CareTrust REIT, Inc.		14,877		250,231
Home BancShares, Inc.		9,178		248,448
National Bank Holdings Corp. — Class A		7,450		242,125
Ameris Bancorp		5,179		238,752
ServisFirst Bancshares, Inc.		6,501		236,506
Northfield Bancorp, Inc.		12,618		227,376
Lexington Realty Trust		22,028		219,839
United Community Banks, Inc.		7,546		208,949
Evercore Partners, Inc. — Class A		2,419		188,440
Pinnacle Financial Partners, Inc.		2,766		183,801
Getty Realty Corp.		7,266		183,612
Customers Bancorp, Inc.*		5,506		173,604
Cardinal Financial Corp.		5,493		164,460
Agree Realty Corp.		3,351		160,714
Hanmi Financial Corp.		4,822		148,277
American Assets Trust, Inc.		3,488		145,938
Central Pacific Financial Corp.		4,361		133,185
Sterling Bancorp		5,356		126,937
Southside Bancshares, Inc.		3,560		119,509
Tompkins Financial Corp.		1,268		102,137
First Financial Bankshares, Inc.		2,306		92,471
Urstadt Biddle Properties, Inc. — Class A		4,252		87,421
Total Financial				6,761,380
Consumer, Cyclical - 13.9%
Installed Building Products, Inc.*		12,112		638,907
Five Below, Inc.*		8,559		370,690

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P SMALLCAP 600® PURE GROWTH FUND

	Shares		Value
iRobot Corp.*		5,008	$	331,229
Marcus Corp.		9,289		298,177
LCI Industries		2,964		295,807
Wingstop, Inc.1		10,292		291,058
Dorman Products, Inc.*		3,434		282,034
Ollie’s Bargain Outlet Holdings, Inc.*		8,154		273,159
LGI Homes, Inc.*,1		8,000		271,280
Fox Factory Holding Corp.*		8,574		246,074
Dave & Buster’s Entertainment, Inc.*		3,983		243,321
Hawaiian Holdings, Inc.*		4,897		227,466
Children’s Place, Inc.1		1,782		213,929
Scientific Games Corp. — Class A*		8,867		209,705
Winnebago Industries, Inc.		5,890		172,283
Zumiez, Inc.*		9,249		169,257
Tile Shop Holdings, Inc.		8,492		163,471
Universal Electronics, Inc.*		2,277		155,975
Belmond Ltd. — Class A*		12,086		146,241
Francesca’s Holdings Corp.*		6,317		96,966
Chuy’s Holdings, Inc.*		2,855		85,079
Total Consumer, Cyclical				5,182,108
Technology - 10.8%
MKS Instruments, Inc.		7,414		509,712
Nanometrics, Inc.*		15,991		487,086
Mercury Systems, Inc.*		10,542		411,665
Ebix, Inc.		5,545		339,631
Qualys, Inc.*		7,562		286,600
Omnicell, Inc.*		6,603		268,412
Xperi Corp.		7,619		258,665
Lumentum Holdings, Inc.*		4,845		258,481
CEVA, Inc.*		7,122		252,831
Medidata Solutions, Inc.*		3,512		202,607
Rudolph Technologies, Inc.*		9,009		201,802
Rambus, Inc.*		11,498		151,084
Synchronoss Technologies, Inc.*		5,864		143,082
SPS Commerce, Inc.*		2,310		135,112
Progress Software Corp.		4,068		118,175
Total Technology				4,024,945
Communications - 4.5%
TiVo Corp.		24,665		462,469
Shutterfly, Inc.*		5,310		256,420
Shutterstock, Inc.*,1		5,906		244,213
Stamps.com, Inc.*,1		1,704		201,668
World Wrestling Entertainment, Inc. — Class A		7,266		161,451
Cogent Communications Holdings, Inc.		3,521		151,579
8x8, Inc.*		7,877		120,124
NIC, Inc.		4,618		93,284
Total Communications				1,691,208
Basic Materials - 1.6%
Kraton Corp.*		9,722		300,605
Balchem Corp.		1,917		157,999
Quaker Chemical Corp.		1,008		132,713
Total Basic Materials				591,317
Utilities - 0.8%
South Jersey Industries, Inc.		5,386		192,011
California Water Service Group		3,425		122,786
Total Utilities				314,797
Total Common Stocks
(Cost $32,588,729)				37,122,415

	Face Amount
REPURCHASE AGREEMENTS††,2 - 0.3%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	49,967	49,967
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		32,190	32,190
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		6,972	6,972
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		4,934	4,934
Total Repurchase Agreements
(Cost $94,063)			94,063

	Shares
SECURITIES LENDING COLLATERAL†,3 - 5.8%
First American Government Obligations Fund — Class Z, 0.61%4		2,158,441		2,158,441
Total Securities Lending Collateral
(Cost $2,158,441)				2,158,441
Total Investments - 105.5%
(Cost $34,841,233)			$	39,374,919
Other Assets & Liabilities, net - (5.5)%				(2,044,528	)
Total Net Assets - 100.0%			$	37,330,391

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
S&P SMALLCAP 600® PURE GROWTH 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	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	37,122,415	$	—	$	—	$	37,122,415
Repurchase Agreements		—		94,063		—		94,063
Securities Lending Collateral		2,158,441		—		—		2,158,441
Total	$	39,280,856	$	94,063	$	—	$	39,374,919

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

S&P SMALLCAP 600^® PURE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $2,099,885 of securities loaned (cost $34,747,170)	$	39,280,856
Repurchase agreements, at value (cost $94,063)		94,063
Total investments (cost $34,841,233)		39,374,919
Receivables:
Fund shares sold		895,032
Dividends		24,025
Interest		2
Securities lending income		733
Total assets		40,294,711
Liabilities:
Payable for:
Return of securities loaned		2,158,441
Securities purchased		660,730
Fund shares redeemed		87,562
Management fees		20,487
Distribution and service fees		9,048
Transfer agent and administrative fees		6,829
Portfolio accounting fees		2,731
Miscellaneous		18,492
Total liabilities		2,964,320
Commitments and contingent liabilities (Note 13)		—
Net assets	$	37,330,391
Net assets consist of:
Paid in capital	$	34,041,362
Accumulated net investment loss		(76,698	)
Accumulated net realized loss on investments		(1,167,959	)
Net unrealized appreciation on investments		4,533,686
Net assets	$	37,330,391
A-Class:
Net assets	$	2,526,346
Capital shares outstanding		38,521
Net asset value per share	$	65.58
Maximum offering price per share (Net asset value divided by 95.25%)	$	68.85
C-Class:
Net assets	$	3,054,082
Capital shares outstanding		51,289
Net asset value per share	$	59.55
H-Class:
Net assets	$	31,749,963
Capital shares outstanding		484,113
Net asset value per share	$	65.58

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends	$	256,833
Income from securities lending, net		10,667
Interest		609
Total investment income		268,109
Expenses:
Management fees		255,747
Transfer agent and administrative fees		85,249
Distribution and service fees:
A-Class		6,176
C-Class		28,547
H-Class		71,936
Portfolio accounting fees		34,099
Custodian fees		4,956
Trustees’ fees*		2,589
Line of credit fees		323
Miscellaneous		53,527
Total expenses		543,149
Net investment loss		(275,040	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		4,960,010
Net realized gain		4,960,010
Net change in unrealized appreciation (depreciation) on:
Investments		808,620
Net change in unrealized appreciation (depreciation)		808,620
Net realized and unrealized gain		5,768,630
Net increase in net assets resulting from operations	$	5,493,590

* 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

S&P SMALLCAP 600^® PURE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(275,040	)	$	(279,022	)
Net realized gain (loss) on investments		4,960,010			(3,903,116	)
Net change in unrealized appreciation (depreciation) on investments		808,620			(3,825,931	)
Net increase (decrease) in net assets resulting from operations		5,493,590			(8,008,069	)
Capital share transactions:
Proceeds from sale of shares
A-Class		10,600,986			6,933,578
C-Class		2,703,118			4,477,038
H-Class		288,735,660			162,349,042
Cost of shares redeemed
A-Class		(10,942,756	)		(6,602,316	)
C-Class		(2,795,500	)		(6,727,877	)
H-Class		(286,503,580	)		(181,452,955	)
Net increase (decrease) from capital share transactions		1,797,928			(21,023,490	)
Net increase (decrease) in net assets		7,291,518			(29,031,559	)
Net assets:
Beginning of year		30,038,873			59,070,432
End of year	$	37,330,391		$	30,038,873
Accumulated net investment loss at end of year	$	(76,698	)	$	—
Capital share activity:
Shares sold
A-Class		179,803			118,395
C-Class		49,846			84,005
H-Class		5,017,807			2,856,633
Shares redeemed
A-Class		(188,156	)		(119,475	)
C-Class		(51,716	)		(130,988	)
H-Class		(5,012,877	)		(3,240,197	)
Net decrease in shares		(5,293	)		(431,627	)

50 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	52.28		$	58.90		$	52.99		$	41.94		$	37.97
Income (loss) from investment operations:
Net investment income (loss)a		(.41	)		(.20	)		(.46	)		(.31	)		(.12	)
Net gain (loss) on investments (realized and unrealized)		13.71			(6.42	)		6.37			11.36			4.09
Total from investment operations		13.30			(6.62	)		5.91			11.05			3.97
Net asset value, end of period	$	65.58		$	52.28		$	58.90		$	52.99		$	41.94
Total Returnb		25.44	%		(11.24	%)		11.15	%		26.35	%		10.46	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,526		$	2,451		$	2,825		$	7,265		$	995
Ratios to average net assets:
Net investment income (loss)		(0.71	%)		(0.36	%)		(0.88	%)		(0.60	%)		(0.31	%)
Total expenses		1.52	%		1.50	%		1.51	%		1.53	%		1.51	%
Portfolio turnover rate		818	%		309	%		380	%		677	%		645	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	47.82		$	54.28		$	49.21		$	39.24		$	35.79
Income (loss) from investment operations:
Net investment income (loss)a		(.79	)		(.62	)		(.74	)		(.66	)		(.42	)
Net gain (loss) on investments (realized and unrealized)		12.52			(5.84	)		5.81			10.63			3.87
Total from investment operations		11.73			(6.46	)		5.07			9.97			3.45
Net asset value, end of period	$	59.55		$	47.82		$	54.28		$	49.21		$	39.24
Total Returnb		24.51	%		(11.90	%)		10.30	%		25.41	%		9.64	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,054		$	2,542		$	5,436		$	4,268		$	3,122
Ratios to average net assets:
Net investment income (loss)		(1.48	%)		(1.19	%)		(1.50	%)		(1.46	%)		(1.17	%)
Total expenses		2.28	%		2.25	%		2.25	%		2.28	%		2.26	%
Portfolio turnover rate		818	%		309	%		380	%		677	%		645	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	52.27		$	58.89		$	52.99		$	41.94		$	37.97
Income (loss) from investment operations:
Net investment income (loss)a		(.44	)		(.28	)		(.31	)		(.38	)		(.31	)
Net gain (loss) on investments (realized and unrealized)		13.75			(6.34	)		6.21			11.43			4.28
Total from investment operations		13.31			(6.62	)		5.90			11.05			3.97
Net asset value, end of period	$	65.58		$	52.27		$	58.89		$	52.99		$	41.94
Total Returnb		25.46	%		(11.24	%)		11.13	%		26.35	%		10.46	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	31,750		$	25,046		$	50,810		$	16,996		$	5,844
Ratios to average net assets:
Net investment income (loss)		(0.75	%)		(0.49	%)		(0.58	%)		(0.77	%)		(0.81	%)
Total expenses		1.53	%		1.50	%		1.49	%		1.52	%		1.50	%
Portfolio turnover rate		818	%		309	%		380	%		677	%		645	%

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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, S&P SmallCap 600^® Pure Value Fund H-Class returned 17.60%, compared with a return of 20.16% 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 of the underlying index were the Industrials and Financials sectors. The Consumer Discretionary 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 Chemours Co., EZCORP, Inc. Class A, and Orion Group Holdings, Inc. Those that detracted the most from return of the underlying index were Adeptus Health, Inc. Class A, Stage Stores, Inc., and Roadrunner Transportation Systems, 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)
Exterran Corp.	1.6%
Kelly Services, Inc. — Class A	1.5%
Seneca Foods Corp. — Class A	1.3%
M/I Homes, Inc.	1.3%
Comtech Telecommunications Corp.	1.2%
ScanSource, Inc.	1.1%
Universal Corp.	1.1%
Sanmina Corp.	1.1%
Greenbrier Companies, Inc.	1.1%
Wabash National Corp.	1.1%
Top Ten Total	12.4%

“Ten Largest Holdings” excludes any temporary cash investments.

THE RYDEX FUNDS ANNUAL REPORT | 53

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	17.62%	9.80%	3.05%
A-Class Shares with sales charge†	12.05%	8.74%	2.55%
C-Class Shares	16.77%	8.99%	2.26%
C-Class Shares with CDSC‡	15.77%	8.99%	2.26%
H-Class Shares	17.60%	9.80%	3.03%
S&P SmallCap 600 Pure Value Index	20.16%	12.17%	6.28%

*	The performance data above represents past performance that is not predictive of future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. 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.

54 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
S&P SMALLCAP 600® PURE VALUE FUND

	Shares		Value
COMMON STOCKS† - 100.2%
Consumer, Cyclical - 33.4%
M/I Homes, Inc.*		11,930	$	292,284
ScanSource, Inc.*		6,808		267,214
Wabash National Corp.		12,450		257,591
Meritage Homes Corp.*		6,780		249,504
Fred’s, Inc. — Class A1		18,824		246,594
MDC Holdings, Inc.		8,200		246,410
Barnes & Noble Education, Inc.*		25,637		245,858
Veritiv Corp.*,1		4,465		231,287
Abercrombie & Fitch Co. — Class A		18,545		221,241
Tuesday Morning Corp.*		56,826		213,098
Sonic Automotive, Inc. — Class A		10,496		210,445
RH*,1		4,490		207,707
Essendant, Inc.		13,384		202,768
American Axle & Manufacturing Holdings, Inc.*		10,150		190,617
SkyWest, Inc.		5,534		189,540
MarineMax, Inc.*		8,690		188,138
Fossil Group, Inc.*		10,705		186,802
Group 1 Automotive, Inc.		2,487		184,237
Regis Corp.*		15,644		183,348
Vitamin Shoppe, Inc.*,1		8,526		171,799
Ascena Retail Group, Inc.*		39,794		169,522
Genesco, Inc.*		3,038		168,457
Shoe Carnival, Inc.1		6,791		166,855
Anixter International, Inc.*		2,052		162,724
Haverty Furniture Companies, Inc.		6,635		161,562
Perry Ellis International, Inc.*		7,329		157,427
Cooper-Standard Holdings, Inc.*		1,403		155,635
Kirkland’s, Inc.*		12,117		150,251
Red Robin Gourmet Burgers, Inc.*		2,520		147,294
Express, Inc.*		15,640		142,480
Lithia Motors, Inc. — Class A		1,648		141,151
G-III Apparel Group Ltd.*		6,410		140,315
Guess?, Inc.		12,581		140,278
Big 5 Sporting Goods Corp.1		9,236		139,464
Barnes & Noble, Inc.		13,968		129,204
Asbury Automotive Group, Inc.*		1,970		118,397
Penn National Gaming, Inc.*		6,220		114,635
Core-Mark Holding Company, Inc.		3,425		106,826
EZCORP, Inc. — Class A*		11,467		93,456
Superior Industries International, Inc.		3,463		87,787
Caleres, Inc.		3,314		87,556
Stein Mart, Inc.		28,279		85,120
Finish Line, Inc. — Class A		5,859		83,374
Ruby Tuesday, Inc.*		26,177		73,557
Unifi, Inc.*		2,579		73,218
Movado Group, Inc.		2,773		69,186
Crocs, Inc.*		8,910		62,994
Cato Corp. — Class A		2,720		59,731
Total Consumer, Cyclical				7,774,938
Consumer, Non-cyclical - 19.6%
Kelly Services, Inc. — Class A		15,496		338,743
Seneca Foods Corp. — Class A*		8,631		311,579
Universal Corp.		3,768		266,586
Diplomat Pharmacy, Inc.*		15,380		245,311
Invacare Corp.		20,187		240,225
Select Medical Holdings Corp.*		17,583		234,733
LSC Communications, Inc.		9,328		234,692
PharMerica Corp.*		9,215		215,631
TrueBlue, Inc.*		7,650		209,228
Darling Ingredients, Inc.*		13,181		191,388
Integer Holdings Corp.*		4,570		183,714
Almost Family, Inc.*		3,690		179,334
Andersons, Inc.		4,248		160,999
Sanderson Farms, Inc.		1,540		159,914
Heidrick & Struggles International, Inc.		5,418		142,764
Community Health Systems, Inc.*		15,967		141,627
Providence Service Corp.*		3,130		139,097
RR Donnelley & Sons Co.		10,566		127,954
CDI Corp.*		14,232		121,684
Kindred Healthcare, Inc.		12,777		106,688
Korn/Ferry International		2,790		87,857
Myriad Genetics, Inc.*,1		4,440		85,248
LHC Group, Inc.*		1,490		80,311
Quorum Health Corp.*		14,731		80,137
American Public Education, Inc.*		3,392		77,677
SUPERVALU, Inc.*		19,670		75,926
Adeptus Health, Inc. — Class A*,1		40,350		72,630
Resources Connection, Inc.		3,690		61,808
Total Consumer, Non-cyclical				4,573,485
Industrial - 15.3%
Sanmina Corp.*		6,506		264,143
Greenbrier Companies, Inc.		6,078		261,962
Benchmark Electronics, Inc.*		7,356		233,921
Boise Cascade Co.*		8,648		230,902
Celadon Group, Inc.		33,494		219,385
Atlas Air Worldwide Holdings, Inc.*		3,739		207,328
Roadrunner Transportation Systems, Inc.*		28,625		196,654
ArcBest Corp.		7,146		185,796
Olympic Steel, Inc.		9,403		174,519
Hub Group, Inc. — Class A*		3,670		170,288
Briggs & Stratton Corp.		6,426		144,264
Echo Global Logistics, Inc.*		5,771		123,211
Electro Scientific Industries, Inc.*		16,855		117,479
DXP Enterprises, Inc.*		2,830		107,172
Plexus Corp.*		1,809		104,560
LSB Industries, Inc.*,1		10,783		101,145
TimkenSteel Corp.*		5,105		96,536
AAR Corp.		2,825		95,005
Aegion Corp. — Class A*		3,935		90,151
General Cable Corp.		4,659		83,629
KapStone Paper and Packaging Corp.		3,610		83,391
Encore Wire Corp.		1,690		77,740
Powell Industries, Inc.		2,205		75,940
Kaman Corp.		1,194		57,467
Hornbeck Offshore Services, Inc.*,1		8,673		38,422
Tidewater, Inc.*		28,029		32,233
Total Industrial				3,573,243

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
S&P SMALLCAP 600® PURE VALUE FUND

	Shares		Value
Financial - 13.2%
Maiden Holdings Ltd.		17,925	$	250,950
United Insurance Holdings Corp.		14,981		238,946
Encore Capital Group, Inc.*		6,548		201,678
INTL FCStone, Inc.*		5,097		193,482
American Equity Investment Life Holding Co.		8,051		190,245
Banc of California, Inc.		8,285		171,499
Enova International, Inc.*		11,389		169,126
Infinity Property & Casualty Corp.		1,597		152,514
HCI Group, Inc.		2,970		135,373
Stewart Information Services Corp.		2,851		125,957
World Acceptance Corp.*		2,193		113,554
United Fire Group, Inc.		2,600		111,202
Capstead Mortgage Corp.		9,646		101,669
OFG Bancorp1		8,514		100,465
Horace Mann Educators Corp.		2,385		97,904
HomeStreet, Inc.*		3,450		96,428
Selective Insurance Group, Inc.		1,990		93,829
Investment Technology Group, Inc.		4,320		87,480
Employers Holdings, Inc.		2,140		81,213
Navigators Group, Inc.		1,472		79,930
Opus Bank		3,960		79,794
Astoria Financial Corp.		3,760		77,118
Chesapeake Lodging Trust		2,750		65,890
Safety Insurance Group, Inc.		800		56,080
Total Financial				3,072,326
Energy - 6.6%
Exterran Corp.*		12,116		381,048
Green Plains, Inc.		8,247		204,113
Atwood Oceanics, Inc.*,1		21,140		201,464
Gulf Island Fabrication, Inc.		14,840		171,402
Bristow Group, Inc.		10,567		160,724
Matrix Service Co.*		9,570		157,905
Era Group, Inc.*		11,676		154,824
Cloud Peak Energy, Inc.*		11,665		53,426
SunCoke Energy, Inc.*		5,560		49,818
Total Energy				1,534,724
Communications - 5.7%
Comtech Telecommunications Corp.		19,261		283,907
Gannett Company, Inc.		27,933		234,078
New Media Investment Group, Inc.		14,160		201,214
QuinStreet, Inc.*		41,356		161,288
Scholastic Corp.		2,670		113,662
Iridium Communications, Inc.*,1		11,230		108,370
FTD Companies, Inc.*		4,561		91,859
Spok Holdings, Inc.		4,604		87,476
Black Box Corp.		5,040		45,108
Total Communications				1,326,962
Basic Materials - 3.2%
AdvanSix, Inc.*		7,272		198,671
Century Aluminum Co.*		14,155		179,627
PH Glatfelter Co.		6,879		149,549
Clearwater Paper Corp.*		1,399		78,344
Materion Corp.		2,237		75,051
Rayonier Advanced Materials, Inc.		4,750		63,888
Total Basic Materials				745,130
Technology - 3.2%
Insight Enterprises, Inc.*		5,831		239,596
Virtusa Corp.*		3,970		119,973
Sykes Enterprises, Inc.*		3,070		90,258
Cohu, Inc.		4,557		84,122
Digi International, Inc.*		5,960		70,924
ManTech International Corp. — Class A		2,005		69,433
CACI International, Inc. — Class A*		535		62,756
Total Technology				737,062
Total Common Stocks
(Cost $19,251,306)				23,337,870

	Face Amount
REPURCHASE AGREEMENTS††,2 - 0.6%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	69,296	69,296
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		44,643	44,643
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		9,669	9,669
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		6,843	6,843
Total Repurchase Agreements
(Cost $130,451)			130,451

	Shares
SECURITIES LENDING COLLATERAL†,3 - 2.6%
First American Government Obligations Fund — Class Z, 0.61%4		594,517		594,517
Total Securities Lending Collateral
(Cost $594,517)				594,517
Total Investments - 103.4%
(Cost $19,976,274)			$	24,062,838
Other Assets & Liabilities, net - (3.4)%				(784,144	)
Total Net Assets - 100.0%			$	23,278,694

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
S&P SMALLCAP 600® PURE VALUE 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	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	Securities lending collateral — See Note 6.
4	Rate indicated is the 7 day yield as of March 31, 2017.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 2		Level 3		Total
Common Stocks	$	23,337,870	$	—	$	—	$	23,337,870
Repurchase Agreements		—		130,451		—		130,451
Securities Lending Collateral		594,517		—		—		594,517
Total	$	23,932,387	$	130,451	$	—	$	24,062,838

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

S&P SMALLCAP 600^® PURE VALUE FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments, at value - including $580,854 of securities loaned (cost $19,845,823)	$	23,932,387
Repurchase agreements, at value (cost $130,451)		130,451
Total investments (cost $19,976,274)		24,062,838
Receivables:
Securities sold		887,068
Fund shares sold		1,687,762
Dividends		22,391
Interest		3
Securities lending income		986
Total assets		26,661,048
Liabilities:
Overdraft due to custodian bank		1
Payable for:
Fund shares redeemed		2,736,591
Return of securities loaned		594,517
Management fees		20,807
Distribution and service fees		8,352
Transfer agent and administrative fees		6,935
Portfolio accounting fees		2,774
Miscellaneous		12,377
Total liabilities		3,382,354
Commitments and contingent liabilities (Note 13)		—
Net assets	$	23,278,694
Net assets consist of:
Paid in capital	$	47,570,402
Accumulated net investment loss		(59,053	)
Accumulated net realized loss on investments		(28,319,219	)
Net unrealized appreciation on investments		4,086,564
Net assets	$	23,278,694
A-Class:
Net assets	$	1,719,535
Capital shares outstanding		63,117
Net asset value per share	$	27.24
Maximum offering price per share (Net asset value divided by 95.25%)	$	28.60
C-Class:
Net assets	$	1,777,652
Capital shares outstanding		75,069
Net asset value per share	$	23.68
H-Class:
Net assets	$	19,781,507
Capital shares outstanding		729,158
Net asset value per share	$	27.13

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

 

Investment Income:
Dividends (net of foreign withholding tax of $430)	$	357,968
Income from securities lending, net		6,607
Interest		652
Total investment income		365,227
Expenses:
Management fees		259,950
Transfer agent and administrative fees		86,650
Distribution and service fees:
A-Class		5,766
C-Class		27,485
H-Class		74,013
Portfolio accounting fees		34,660
Custodian fees		4,914
Trustees’ fees*		2,556
Line of credit fees		400
Miscellaneous		55,601
Total expenses		551,995
Net investment loss		(186,768	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		1,534,523
Net realized gain		1,534,523
Net change in unrealized appreciation (depreciation) on:
Investments		132,291
Net change in unrealized appreciation (depreciation)		132,291
Net realized and unrealized gain		1,666,814
Net increase in net assets resulting from operations	$	1,480,046

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

58 | 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(186,768	)	$	(74,791	)
Net realized gain (loss) on investments		1,534,523			(1,683,099	)
Net change in unrealized appreciation (depreciation) on investments		132,291			635,355
Net increase (decrease) in net assets resulting from operations		1,480,046			(1,122,535	)
Capital share transactions:
Proceeds from sale of shares
A-Class		11,499,336			2,492,235
C-Class		4,241,862			1,032,252
H-Class		493,896,036			83,674,345
Cost of shares redeemed
A-Class		(11,116,920	)		(2,714,593	)
C-Class		(4,531,766	)		(1,957,269	)
H-Class		(493,220,325	)		(76,422,564	)
Net increase from capital share transactions		768,223			6,104,406
Net increase in net assets		2,248,269			4,981,871
Net assets:
Beginning of year		21,030,425			16,048,554
End of year	$	23,278,694		$	21,030,425
Accumulated net investment loss at end of year	$	(59,053	)	$	(10,227	)
Capital share activity:
Shares sold
A-Class		417,739			99,870
C-Class		181,220			48,000
H-Class		19,425,410			3,744,799
Shares redeemed
A-Class		(402,677	)		(113,497	)
C-Class		(197,201	)		(92,281	)
H-Class		(19,479,582	)		(3,403,948	)
Net increase (decrease) in shares		(55,091	)		282,943

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	23.16		$	25.81		$	25.66		$	19.55		$	17.07
Income (loss) from investment operations:
Net investment income (loss)a		(.14	)		(.10	)		(.03	)		(.09	)		(.01	)
Net gain (loss) on investments (realized and unrealized)		4.22			(2.55	)		.18			6.20			2.49
Total from investment operations		4.08			(2.65	)		.15			6.11			2.48
Net asset value, end of period	$	27.24		$	23.16		$	25.81		$	25.66		$	19.55
Total Returnb		17.62	%		(10.27	%)		0.58	%		31.25	%		14.53	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,720		$	1,113		$	1,592		$	1,016		$	1,551
Ratios to average net assets:
Net investment income (loss)		(0.50	%)		(0.42	%)		(0.10	%)		(0.39	%)		(0.08	%)
Total expenses		1.53	%		1.50	%		1.50	%		1.52	%		1.51	%
Portfolio turnover rate		1,449	%		417	%		579	%		658	%		655	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	20.28		$	22.78		$	22.81		$	17.51		$	15.40
Income (loss) from investment operations:
Net investment income (loss)a		(.28	)		(.24	)		(.19	)		(.22	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		3.68			(2.26	)		.16			5.52			2.24
Total from investment operations		3.40			(2.50	)		(.03	)		5.30			2.11
Net asset value, end of period	$	23.68		$	20.28		$	22.78		$	22.81		$	17.51
Total Returnb		16.77	%		(10.97	%)		(0.13	%)		30.27	%		13.70	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,778		$	1,847		$	3,082		$	4,514		$	3,932
Ratios to average net assets:
Net investment income (loss)		(1.26	%)		(1.17	%)		(0.84	%)		(1.10	%)		(0.84	%)
Total expenses		2.28	%		2.25	%		2.25	%		2.27	%		2.26	%
Portfolio turnover rate		1,449	%		417	%		579	%		658	%		655	%

60 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	23.07		$	25.71		$	25.55		$	19.47		$	17.00
Income (loss) from investment operations:
Net investment income (loss)a		(.12	)		(.07	)		(.01	)		(.06	)		(.06	)
Net gain (loss) on investments (realized and unrealized)		4.18			(2.57	)		.17			6.14			2.53
Total from investment operations		4.06			(2.64	)		.16			6.08			2.47
Net asset value, end of period	$	27.13		$	23.07		$	25.71		$	25.55		$	19.47
Total Returnb		17.60	%		(10.27	%)		0.63	%		31.23	%		14.53	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	19,782		$	18,071		$	11,374		$	22,380		$	30,743
Ratios to average net assets:
Net investment income (loss)		(0.47	%)		(0.32	%)		(0.03	%)		(0.25	%)		(0.32	%)
Total expenses		1.53	%		1.50	%		1.50	%		1.53	%		1.51	%
Portfolio turnover rate		1,449	%		417	%		579	%		658	%		655	%

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 | 61

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 10.06% while the STOXX Europe 50 Index returned 10.21% over the same period.

The sectors that contributed most to the performance of the underlying index were Financials and Energy. The sectors that detracted the most from the performance of the underlying index were Telecommunications Services and Utilities.

The stocks that contributed the most to the performance of the underlying index were HSBC Holdings Plc, Siemens AG, and Banco Santander SA. Those that detracted the most from the performance of the underlying index were Novo Nordisk AS Class B, BT Group Plc, and Vodafone Group Plc.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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.

62 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Inception Dates:
A-Class	March 31, 2004
C-Class	May 10, 2001
H-Class	May 8, 2000

INVESTMENT CONCENTRATION

At March 31, 2017, the investment diversification of the Fund by country was as follows:

Country	% of Common Stocks	Value
United Kingdom	33%	$1,159,272
Switzerland	20%	693,233
Germany	15%	540,673
France	15%	539,413
Spain	5%	163,963
Netherlands	5%	162,451
Italy	2%	75,357
Other	5%	181,545
Total Securities	100%	$3,515,907

Cumulative Fund Performance*

Ten Largest Holdings (% of Total Net Assets)
Guggenheim Strategy Fund II	11.7%
Guggenheim Strategy Fund I	9.5%
Nestle S.A. ADR	2.8%
Novartis AG ADR	2.4%
Roche Holding AG ADR	2.2%
HSBC Holdings plc ADR	1.9%
Total S.A. ADR	1.5%
British American Tobacco plc ADR	1.4%
Royal Dutch Shell plc — Class A ADR	1.3%
Siemens AG ADR	1.3%
Top Ten Total	36.0%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	9.83%	2.90%	-4.64%
A-Class Shares with sales charge†	4.61%	1.90%	-5.10%
C-Class Shares	9.09%	1.91%	-5.44%
C-Class Shares with CDSC‡	8.09%	1.91%	-5.44%
H-Class Shares	10.06%	2.72%	-4.71%
STOXX Europe 50 Index	10.21%	4.13%	-0.36%

*	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 Europe STOXX 50 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 | 63

SCHEDULE OF INVESTMENTS	March 31, 2017
EUROPE 1.25x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 45.6%
Consumer, Non-cyclical - 19.2%
Nestle S.A. ADR		2,810	$	216,089
Novartis AG ADR		2,462		182,852
Roche Holding AG ADR		5,224		167,325
British American Tobacco plc ADR1		1,567		103,923
Sanofi ADR		2,216		100,274
GlaxoSmithKline plc ADR		2,216		93,427
Bayer AG ADR		713		82,223
AstraZeneca plc ADR		2,398		74,674
Anheuser-Busch InBev S.A. ADR		657		72,112
Unilever N.V. — Class Y		1,391		69,105
Diageo plc ADR		557		64,378
Novo Nordisk A/S ADR		1,729		59,270
Unilever plc ADR		1,138		56,149
Reckitt Benckiser Group plc ADR		2,883		53,639
L’Oreal S.A. ADR		1,090		41,932
Imperial Brands plc ADR		810		40,014
Total Consumer, Non-cyclical				1,477,386
Financial - 9.9%
HSBC Holdings plc ADR		3,492		142,544
Banco Santander S.A. ADR		12,553		76,197
Allianz SE ADR		4,032		74,713
BNP Paribas S.A. ADR		1,947		64,796
ING Groep N.V. ADR		3,449		52,045
UBS Group AG		3,145		50,163
AXA S.A. ADR		1,937		49,800
Lloyds Banking Group plc ADR		14,357		48,814
Prudential plc ADR1		1,128		47,782
Banco Bilbao Vizcaya Argentaria S.A. ADR		5,760		43,834
Barclays plc ADR		3,792		42,622
Intesa Sanpaolo SpA ADR		2,291		37,194
Zurich Insurance Group AG ADR		1,338		35,684
Total Financial				766,188
Energy - 4.6%
Total S.A. ADR		2,281		115,009
Royal Dutch Shell plc — Class A ADR		1,958		103,245
BP plc ADR		2,899		100,073
Eni SpA ADR		1,166		38,163
Total Energy				356,490
Industrial - 2.9%
Siemens AG ADR		1,497		102,545
ABB Ltd. ADR		1,770		41,418
Vinci S.A. ADR		1,975		39,164
Schneider Electric SE ADR		2,596		37,992
Total Industrial				221,119
Communications - 2.6%
Vodafone Group plc ADR		2,503		66,154
Deutsche Telekom AG ADR		2,821		49,509
Telefonica S.A. ADR		3,926		43,932
BT Group plc ADR		1,926		38,693
Total Communications				198,288
Basic Materials - 2.5%
BASF SE ADR		802		79,538
Air Liquide S.A. ADR1		1,757		40,112
Rio Tinto plc ADR		953		38,768
Syngenta AG ADR		401		35,489
Total Basic Materials				193,907
Consumer, Cyclical - 1.7%
Daimler AG ADR1		891		66,050
LVMH Moet Hennessy Louis Vuitton SE ADR		1,145		50,334
Cie Financiere Richemont S.A. ADR		1,829		14,376
Total Consumer, Cyclical				130,760
Technology - 1.6%
SAP SE ADR1		877		86,095
ASML Holding N.V. — Class G		311		41,301
Total Technology				127,396
Utilities - 0.6%
National Grid plc ADR		699		44,373
Total Common Stocks
(Cost $3,389,487)				3,515,907
MUTUAL FUNDS† - 21.3%
Guggenheim Strategy Fund II2		36,146		903,646
Guggenheim Strategy Fund I2		29,241		732,497
Total Mutual Funds
(Cost $1,630,363)				1,636,143

	Face Amount
U.S. TREASURY BILLS†† - 1.3%
U.S. Treasury Bill
0.52% due 05/11/173,7	$	100,000	99,924
Total U.S. Treasury Bills
(Cost $99,942)			99,924
REPURCHASE AGREEMENTS††,4 - 24.3%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		992,083	992,083
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		639,138	639,138
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		138,422	138,422
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		97,971	97,971
Total Repurchase Agreements
(Cost $1,867,614)			1,867,614

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
EUROPE 1.25x STRATEGY FUND

	Shares		Value
SECURITIES LENDING COLLATERAL†,5 - 2.1%
First American Government Obligations Fund — Class Z, 0.61%6		160,359	$	160,359
Total Securities Lending Collateral
(Cost $160,359)				160,359
Total Investments - 94.6%
(Cost $7,147,765)			$	7,279,947
Other Assets & Liabilities, net - 5.4%				416,390
Total Net Assets - 100.0%			$	7,696,337

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED††
June 2017 STOXX 50 Index Futures Contracts (Aggregate Value of Contracts $6,058,252)		182	$	67,050
CURRENCY FUTURES CONTRACTS PURCHASED†
June 2017 Euro FX Futures Contracts (Aggregate Value of Contracts $6,156,525)		46	$	(38,249	)

†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Affiliated issuer — See Note 10.
3	All or a portion of this security is pledged as futures collateral at March 31, 2017.
4	Repurchase Agreements — See Note 5.
5	Securities lending collateral — See Note 6.
6	Rate indicated is the 7 day yield as of March 31, 2017.
7	Zero coupon rate security. Rate indicated is the effective yield at the time of the purchase.
	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, 2017 (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	$	3,515,907	$	—	$	—	$	—	$	—	$	3,515,907
Equity Futures Contracts		—		—		—		67,050		—		67,050
Mutual Funds		1,636,143		—		—		—		—		1,636,143
Repurchase Agreements		—		—		1,867,614		—		—		1,867,614
Securities Lending Collateral		160,359		—		—		—		—		160,359
U.S. Treasury Bills		—		—		99,924		—		—		99,924
Total	$	5,312,409	$	—	$	1,967,538	$	67,050	$	—	$	7,346,997
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Currency Futures Contracts	$	—	$	38,249	$	—	$	—	$	—	$	38,249

* Other financial instruments include futures contracts, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

EUROPE 1.25x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $156,910 of securities loaned (cost $3,649,788)	$	3,776,190
Investments in affiliated issuers, at value (cost $1,630,363)		1,636,143
Repurchase agreements, at value (cost $1,867,614)		1,867,614
Total investments (cost $7,147,765)		7,279,947
Foreign currency, at value (cost $47,603)		47,569
Segregated cash with broker		394,450
Cash		643
Receivables:
Swap settlement		634
Variation margin		4,625
Fund shares sold		452,279
Dividends		15,569
Foreign taxes reclaim		21,990
Interest		37
Securities lending income		528
Total assets		8,218,271
Liabilities:
Segregated cash due to broker		47,863
Payable for:
Securities purchased		299,281
Return of securities loaned		160,359
Management fees		4,038
Fund shares redeemed		2,998
Distribution and service fees		1,423
Transfer agent and administrative fees		1,122
Portfolio accounting fees		448
Miscellaneous		4,402
Total liabilities		521,934
Commitments and contingent liabilities (Note 13)		—
Net assets	$	7,696,337
Net assets consist of:
Paid in capital	$	11,163,174
Undistributed net investment income		24,132
Accumulated net realized loss on investments		(3,651,841	)
Net unrealized appreciation on investments		160,872
Net assets	$	7,696,337
A-Class:
Net assets	$	416,877
Capital shares outstanding		4,905
Net asset value per share	$	84.99
Maximum offering price per share (Net asset value divided by 95.25%)	$	89.23
C-Class:
Net assets	$	839,996
Capital shares outstanding		11,341
Net asset value per share	$	74.07
H-Class:
Net assets	$	6,439,464
Capital shares outstanding		76,318
Net asset value per share	$	84.38

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

EUROPE 1.25x STRATEGY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of ($7,889))	$	101,811
Dividends from securities of affiliated issuers		22,323
Interest		4,284
Income from securities lending, net		888
Total investment income		129,306
Expenses:
Management fees		47,479
Transfer agent and administrative fees		13,189
Distribution and service fees:
A-Class		1,430
C-Class		3,474
H-Class		10,890
Portfolio accounting fees		5,275
Custodian fees		1,259
Trustees’ fees*		490
Line of credit fees		23
Miscellaneous		10,466
Total expenses		93,975
Net investment income		35,331
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	1,248,138
Investments in affiliated issuers		3,220
Swap agreements		1,754
Futures contracts		1,994,255
Foreign currency		(10,460	)
Net realized gain		3,236,907
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		(124,060	)
Investments in affiliated issuers		5,651
Futures contracts		10,277
Foreign currency		(95	)
Net change in unrealized appreciation (depreciation)		(108,227	)
Net realized and unrealized gain		3,128,680
Net increase in net assets resulting from operations	$	3,164,011

* 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 | 67

EUROPE 1.25x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income	$	35,331		$	9,339
Net realized gain (loss) on investments		3,236,907			(3,897,084	)
Net change in unrealized appreciation (depreciation) on investments		(108,227	)		(156,632	)
Net increase (decrease) in net assets resulting from operations		3,164,011			(4,044,377	)
Distributions to shareholders from:
Net investment income
A-Class		(3,592	)		(11,155	)
C-Class		(2,755	)		(4,305	)
H-Class		(29,013	)		(47,957	)
Total distributions to shareholders		(35,360	)		(63,417	)
Capital share transactions:
Proceeds from sale of shares
A-Class		1,224,419			15,260,055
C-Class		1,340,603			10,931,446
H-Class		182,443,083			215,847,170
Distributions reinvested
A-Class		2,826			10,089
C-Class		2,507			3,535
H-Class		28,695			47,645
Cost of shares redeemed
A-Class		(1,660,138	)		(15,266,742	)
C-Class		(969,457	)		(11,364,439	)
H-Class		(183,677,062	)		(217,436,663	)
Net decrease from capital share transactions		(1,264,524	)		(1,967,904	)
Net increase (decrease) in net assets		1,864,127			(6,075,698	)
Net assets:
Beginning of year		5,832,210			11,907,908
End of year	$	7,696,337		$	5,832,210
Undistributed net investment income at end of year	$	24,132		$	35,360
Capital share activity:*
Shares sold
A-Class		14,952			165,579
C-Class		18,798			135,145
H-Class		2,397,923			2,381,873
Shares issued from reinvestment of distributions
A-Class		39			115
C-Class		39			46
H-Class		398			547
Shares redeemed
A-Class		(21,083	)		(167,183	)
C-Class		(13,915	)		(141,158	)
H-Class		(2,380,582	)		(2,428,913	)
Net decrease in shares		16,569			(53,949	)

* Capital share activity for the periods presented through March 31, 2017 has been restated to reflect a 1:6 reverse share split effective October 28, 2016 — See Note 12.

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

EUROPE 1.25x STRATEGY FUND

FINANCIAL HIGHLIGHTS

This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.

A-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	78.10		$	93.32		$	104.40		$	84.97		$	75.39
Income (loss) from investment operations:
Net investment income (loss)a		1.08			(.06	)		.30			.96			(.18	)
Net gain (loss) on investments (realized and unrealized)		6.51			(14.44	)		(11.08	)		18.47			9.94
Total from investment operations		7.59			(14.50	)		(10.78	)		19.43			9.76
Less distributions from:
Net investment income		(.70	)		(.72	)		(.30	)		—			(.18	)
Total distributions		(.70	)		(.72	)		(.30	)		—			(.18	)
Net asset value, end of period	$	84.99		$	78.10		$	93.32		$	104.40		$	84.97
Total Returnb		9.83	%		(15.58	%)		(10.33	%)		22.88	%		12.92	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	417		$	859		$	1,165		$	2,551		$	3,916
Ratios to average net assets:
Net investment income (loss)		1.35	%		(0.08	%)		0.33	%		1.00	%		(0.23	%)
Total expensesc		1.72	%		1.67	%		1.72	%		1.72	%		1.67	%
Portfolio turnover rate		1,616	%		920	%		608	%		654	%		903	%

C-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	68.62		$	82.63		$	93.15		$	77.34		$	69.15
Income (loss) from investment operations:
Net investment income (loss)a		.35			(.54	)		(.48	)		(.42	)		(.60	)
Net gain (loss) on investments (realized and unrealized)		5.80			(12.75	)		(9.74	)		16.23			8.97
Total from investment operations		6.15			(13.29	)		(10.22	)		15.81			8.37
Less distributions from:
Net investment income		(.70	)		(.72	)		(.30	)		—			(.18	)
Total distributions		(.70	)		(.72	)		(.30	)		—			(.18	)
Net asset value, end of period	$	74.07		$	68.62		$	82.63		$	93.15		$	77.34
Total Returnb		9.09	%		(16.14	%)		(10.94	%)		20.40	%		12.09	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	840		$	440		$	1,023		$	535		$	402
Ratios to average net assets:
Net investment income (loss)		0.50	%		(0.64	%)		(0.50	%)		(0.48	%)		(0.83	%)
Total expensesc		2.49	%		2.42	%		2.48	%		2.47	%		2.42	%
Portfolio turnover rate		1,616	%		920	%		608	%		654	%		903	%

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 69

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, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	77.38		$	92.50		$	103.56		$	85.18		$	75.52
Income (loss) from investment operations:
Net investment income (loss)a		.46			.18			.60			.18			(.12	)
Net gain (loss) on investments (realized and unrealized)		7.24			(14.58	)		(11.36	)		18.20			9.96
Total from investment operations		7.70			(14.40	)		(10.76	)		18.38			9.84
Less distributions from:
Net investment income		(.70	)		(.72	)		(.30	)		—			(.18	)
Total distributions		(.70	)		(.72	)		(.30	)		—			(.18	)
Net asset value, end of period	$	84.38		$	77.38		$	92.50		$	103.56		$	85.18
Total Returnb		10.06	%		(15.64	%)		(10.36	%)		21.55	%		13.06	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,439		$	4,533		$	9,719		$	11,553		$	10,752
Ratios to average net assets:
Net investment income (loss)		0.59	%		0.19	%		0.62	%		0.19	%		(0.18	%)
Total expensesc		1.73	%		1.66	%		1.72	%		1.71	%		1.67	%
Portfolio turnover rate		1,616	%		920	%		608	%		654	%		903	%

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 March 31, 2017 have been restated to reflect a 1:6 reverse share split effective October 28, 2016 — See Note 12.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 30.08%, while the Nikkei-225 Stock Average Index returned 14.04% over the same time period.

The sectors that contributed most to the performance of the underlying index were Industrials and Information Technology. The only sector detracting from return was Real Estate. The Utilities sector contributed least.

Stocks that contributed the most to the return of the underlying index were SoftBank Group Corp., Fanuc Corp., and Tokyo Electron Ltd. Those that detracted the most from the performance of the underlying index were Japan Tobacco, Inc., Casio Computer Co. Ltd., and FamilyMart UNY Holdings Co. Ltd.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 71

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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 II	16.7%
Guggenheim Strategy Fund I	16.7%
Total	33.4%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	Since Inception (02/22/08)
A-Class Shares	29.73%	10.59%	0.25%
A-Class Shares with sales charge†	23.59%	9.52%	-0.28%
C-Class Shares	28.74%	9.89%	-0.43%
C-Class Shares with CDSC‡	27.74%	9.89%	-0.43%
H-Class Shares	30.08%	10.69%	0.33%
Nikkei-225 Stock Average Index	14.04%	6.84%	3.31%

*	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.

72 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
JAPAN 2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 33.4%
Guggenheim Strategy Fund II1		24,001	$	600,035
Guggenheim Strategy Fund I1		23,927		599,382
Total Mutual Funds
(Cost $1,195,545)				1,199,417

	Face Amount
REPURCHASE AGREEMENTS††,2 - 66.4%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	1,264,209		1,264,209
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		814,451		814,451
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		176,390		176,390
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		124,844		124,844
Total Repurchase Agreements
(Cost $2,379,894)				2,379,894
Total Investments - 99.8%
(Cost $3,575,439)			$	3,579,311
Other Assets & Liabilities, net - 0.2%				6,687
Total Net Assets - 100.0%			$	3,585,998

	Contracts		Unrealized Gain (Loss)
CURRENCY FUTURES CONTRACTS PURCHASED†
June 2017 Japanese Yen Futures Contracts (Aggregate Value of Contracts $7,207,600)		64	$	188,189
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 Nikkei 225 (CME) Index Futures Contracts (Aggregate Value of Contracts $7,134,375)		75	$	(100,741	)

†	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.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
JAPAN 2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (See Note 4 in the Notes to Financial Statements):

Investments in Securities (Assets)	Level 1		Level 1 - Other*		Level 2		Level 3		Total
Currency Futures Contracts	$	—	$	188,189	$	—	$	—	$	188,189
Mutual Funds		1,199,417		—		—		—		1,199,417
Repurchase Agreements		—		—		2,379,894		—		2,379,894
Total	$	1,199,417	$	188,189	$	2,379,894	$	—	$	3,767,500
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 3		Total
Equity Futures Contracts	$	—	$	100,741	$	—	$	—	$	100,741

* Other financial instruments include futures contracts, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

JAPAN 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in affiliated issuers, at value (cost $1,195,545)	$	1,199,417
Repurchase agreements, at value (cost $2,379,894)		2,379,894
Total investments (cost $3,575,439)		3,579,311
Segregated cash with broker		209,283
Receivables:
Swap settlement		770
Fund shares sold		11,225
Dividends		2,204
Interest		46
Total assets		3,802,839
Liabilities:
Payable for:
Fund shares redeemed		139,916
Variation margin		69,418
Management fees		2,089
Distribution and service fees		740
Transfer agent and administrative fees		696
Portfolio accounting fees		279
Miscellaneous		3,703
Total liabilities		216,841
Commitments and contingent liabilities (Note 13)		—
Net assets	$	3,585,998
Net assets consist of:
Paid in capital	$	3,991,986
Accumulated net investment loss		(5,709	)
Accumulated net realized loss on investments		(491,599	)
Net unrealized appreciation on investments		91,320
Net assets	$	3,585,998
A-Class:
Net assets	$	389,028
Capital shares outstanding		3,805
Net asset value per share	$	102.24
Maximum offering price per share (Net asset value divided by 95.25%)	$	107.34
C-Class:
Net assets	$	51,741
Capital shares outstanding		538
Net asset value per share	$	96.17
H-Class:
Net assets	$	3,145,229
Capital shares outstanding		30,544
Net asset value per share	$	102.97

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of affiliated issuers	$	13,692
Interest		8,141
Total investment income		21,833
Expenses:
Management fees		27,769
Transfer agent and administrative fees		9,256
Distribution and service fees:
A-Class		914
C-Class		619
H-Class		8,188
Portfolio accounting fees		3,703
Registration fees		3,117
Custodian fees		549
Trustees’ fees*		338
Miscellaneous		2,410
Total expenses		56,863
Net investment loss		(35,030	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in affiliated issuers		3,245
Swap agreements		2,129
Futures contracts		2,801,754
Net realized gain		2,807,128
Net change in unrealized appreciation (depreciation) on:
Investments in affiliated issuers		3,753
Futures contracts		(5,292	)
Net change in unrealized appreciation (depreciation)		(1,539	)
Net realized and unrealized gain		2,805,589
Net increase in net assets resulting from operations	$	2,770,559

* 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 | 75

JAPAN 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(35,030	)	$	(99,978	)
Net realized gain (loss) on investments		2,807,128			(2,415,155	)
Net change in unrealized appreciation (depreciation) on investments		(1,539	)		76,456
Net increase (decrease) in net assets resulting from operations		2,770,559			(2,438,677	)
Capital share transactions:
Proceeds from sale of shares
A-Class		242,044			20,504,500
C-Class		259,751			6,950,127
H-Class		263,867,281			183,725,129
Cost of shares redeemed
A-Class		(299,177	)		(20,500,320	)
C-Class		(274,295	)		(7,166,305	)
H-Class		(265,800,357	)		(195,879,916	)
Net decrease from capital share transactions		(2,004,753	)		(12,366,785	)
Net increase (decrease) in net assets		765,806			(14,805,462	)
Net assets:
Beginning of year		2,820,192			17,625,654
End of year	$	3,585,998		$	2,820,192
Accumulated net investment loss at end of year	$	(5,709	)	$	(6,851	)
Capital share activity:*
Shares sold
A-Class		2,777			219,385
C-Class		3,281			78,426
H-Class		2,921,713			1,996,802
Shares redeemed
A-Class		(3,428	)		(219,725	)
C-Class		(3,495	)		(81,242	)
H-Class		(2,921,654	)		(2,146,624	)
Net decrease in shares		(806	)		(152,978	)

* Capital share activity for the periods presented through March 31, 2017 has been restated to reflect a 1:4 reverse share split effective November 4, 2016 — See Note 12.

76 | 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, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	78.81		$	93.15		$	77.23		$	69.56		$	61.79
Income (loss) from investment operations:
Net investment income (loss)a		(.74	)		(1.12	)		(1.00	)		(1.24	)		(.80	)
Net gain (loss) on investments (realized and unrealized)		24.17			(13.22	)		16.92			8.91			8.57
Total from investment operations		23.43			(14.34	)		15.92			7.67			7.77
Net asset value, end of period	$	102.24		$	78.81		$	93.15		$	77.23		$	69.56
Total Returnb		29.73	%		(15.41	%)		20.61	%		11.04	%		12.56	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	389		$	351		$	447		$	624		$	2,025
Ratios to average net assets:
Net investment income (loss)		(0.80	%)		(1.22	%)		(1.27	%)		(1.50	%)		(1.40	%)
Total expensesc		1.52	%		1.51	%		1.54	%		1.52	%		1.51	%
Portfolio turnover rate		1,225	%		543	%		405	%		—			—

C-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	74.63		$	88.92		$	73.98		$	67.04		$	59.95
Income (loss) from investment operations:
Net investment income (loss)a		(1.33	)		(1.68	)		(1.56	)		(1.72	)		(1.16	)
Net gain (loss) on investments (realized and unrealized)		22.87			(12.61	)		16.50			8.66			8.25
Total from investment operations		21.54			(14.29	)		14.94			6.94			7.09
Net asset value, end of period	$	96.17		$	74.63		$	88.92		$	73.98		$	67.04
Total Returnb		28.74	%		(16.06	%)		20.23	%		10.32	%		11.81	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	52		$	56		$	317		$	104		$	246
Ratios to average net assets:
Net investment income (loss)		(1.53	%)		(1.91	%)		(2.04	%)		(2.25	%)		(2.15	%)
Total expensesc		2.27	%		2.24	%		2.30	%		2.27	%		2.25	%
Portfolio turnover rate		1,225	%		543	%		405	%		—			—

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

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, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	79.15		$	93.52		$	77.52		$	69.77		$	61.96
Income (loss) from investment operations:
Net investment income (loss)a		(.86	)		(1.08	)		(1.04	)		(1.20	)		(.80	)
Net gain (loss) on investments (realized and unrealized)		24.68			(13.29	)		17.04			8.95			8.61
Total from investment operations		23.82			(14.37	)		16.00			7.75			7.81
Net asset value, end of period	$	102.97		$	79.15		$	93.52		$	77.52		$	69.77
Total Returnb		30.08	%		(15.36	%)		20.64	%		11.12	%		12.59	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,145		$	2,413		$	16,862		$	3,104		$	9,020
Ratios to average net assets:
Net investment income (loss)		(0.95	%)		(1.17	%)		(1.28	%)		(1.50	%)		(1.40	%)
Total expensesc		1.52	%		1.49	%		1.54	%		1.52	%		1.50	%
Portfolio turnover rate		1,225	%		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.
d	Reverse share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 1:4 share split effective November 4, 2016 — See Note 12.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 11.64%, compared with a return of 6.09% for its benchmark, the U.S. Dollar Index.

All components of the U.S. Dollar Index with the exception of the Japanese Yen contributed positively toward performance for the period. The Japanese Yen was the only component which detracted from the Index’s performance, detracting 0.05% from index performance 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 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 79

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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	15.8%
Guggenheim Strategy Fund I	5.4%
Total	21.2%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	11.64%	6.54%	-0.39%
A-Class Shares with sales charge†	6.33%	5.51%	-0.88%
C-Class Shares	10.80%	5.76%	-1.09%
C-Class Shares with CDSC‡	9.80%	5.76%	-1.09%
H-Class Shares	11.64%	6.55%	-0.42%
U.S. Dollar Index	6.09%	4.90%	1.92%

*	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.

80 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
STRENGTHENING DOLLAR 2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 21.3%
Guggenheim Strategy Fund II1		70,094	$	1,752,355
Guggenheim Strategy Fund I1		23,971		600,468
Total Mutual Funds
(Cost $2,335,172)				2,352,823

	Face Amount
FEDERAL AGENCY NOTES†† - 49.7%
Federal Farm Credit Bank2
1.17% due 09/12/183	$	3,000,000		3,002,145
Freddie Mac4
0.63% due 05/15/185		2,500,000		2,498,830
Total Federal Agency Notes
(Cost $5,498,505)				5,500,975
REPURCHASE AGREEMENTS††,6 - 26.8%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		1,303,867		1,303,867
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		840,000		840,000
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/177		690,562		690,562
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		128,760		128,760
Total Repurchase Agreements
(Cost $2,963,189)				2,963,189
Total Investments - 97.8%
(Cost $10,796,866)			$	10,816,987
Other Assets & Liabilities, net - 2.2%				243,712
Total Net Assets - 100.0%			$	11,060,699

	Contracts		Unrealized Loss
CURRENCY FUTURES CONTRACTS PURCHASED†
June 2017 U.S. Dollar Index Futures Contracts (Aggregate Value of Contracts $17,558,625)		175	$	(217,179	)

	Units
OTC CURRENCY INDEX SWAP AGREEMENTS††
Goldman Sachs International June 2017 U.S. Dollar Index Swap 1.22%8, Terminating 06/15/17 (Notional Value $4,564,464)		45,477	$	(70,790	)

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
STRENGTHENING DOLLAR 2x STRATEGY FUND

†	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, 2017.
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	Security is a step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
6	Repurchase Agreements — See Note 5.
7	All or a portion of this security is pledged as currency index swap collateral at March 31, 2017.
8	Total Return based on U.S. Dollar Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	—	$	—	$	5,500,975	$	—	$	—	$	5,500,975
Mutual Funds		2,352,823		—		—		—		—		2,352,823
Repurchase Agreements		—		—		2,963,189		—		—		2,963,189
Total	$	2,352,823	$	—	$	8,464,164	$	—	$	—	$	10,816,987
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Currency Futures Contracts	$	—	$	217,179	$	—	$	—	$	—	$	217,179
Currency Index Swap Agreements		—		—		—		70,790		—		70,790
Total	$	—	$	217,179	$	—	$	70,790	$	—	$	287,969

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

STRENGTHENING DOLLAR 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $5,498,505)	$	5,500,975
Investments in affiliated issuers, at value (cost $2,335,172)		2,352,823
Repurchase agreements, at value (cost $2,963,189)		2,963,189
Total investments (cost $10,796,866)		10,816,987
Segregated cash with broker		311,400
Receivables:
Variation margin		8,629
Fund shares sold		149,556
Dividends		4,634
Interest		7,807
Total assets		11,299,013
Liabilities:
Unrealized depreciation on swap agreements		70,790
Overdraft due to custodian bank		1
Payable for:
Fund shares redeemed		79,067
Swap settlement		62,355
Management fees		9,584
Distribution and service fees		3,518
Transfer agent and administrative fees		2,662
Portfolio accounting fees		1,065
Miscellaneous		9,272
Total liabilities		238,314
Commitments and contingent liabilities (Note 13)		—
Net assets	$	11,060,699
Net assets consist of:
Paid in capital	$	30,489,822
Accumulated net investment loss		(91,659	)
Accumulated net realized loss on investments		(19,069,616	)
Net unrealized depreciation on investments		(267,848	)
Net assets	$	11,060,699
A-Class:
Net assets	$	2,245,114
Capital shares outstanding		42,175
Net asset value per share	$	53.23
Maximum offering price per share (Net asset value divided by 95.25%)	$	55.88
C-Class:
Net assets	$	1,309,221
Capital shares outstanding		27,096
Net asset value per share	$	48.32
H-Class:
Net assets	$	7,506,364
Capital shares outstanding		141,562
Net asset value per share	$	53.03

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	65,226
Dividends from securities of affiliated issuers		72,620
Total investment income		137,846
Expenses:
Management fees		195,827
Transfer agent and administrative fees		54,397
Distribution and service fees:
A-Class		6,795
C-Class		19,225
H-Class		42,795
Portfolio accounting fees		21,758
Registration fees		23,200
Custodian fees		3,173
Trustees’ fees*		1,852
Line of credit fees		1,355
Miscellaneous		20,757
Total expenses		391,134
Net investment loss		(253,288	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers		745
Investments in affiliated issuers		13,653
Swap agreements		285,005
Futures contracts		1,823,241
Net realized gain		2,122,644
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		2,215
Investments in affiliated issuers		35,963
Swap agreements		58,170
Futures contracts		363,629
Net change in unrealized appreciation (depreciation)		459,977
Net realized and unrealized gain		2,582,621
Net increase in net assets resulting from operations	$	2,329,333

* 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 | 83

STRENGTHENING DOLLAR 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(253,288	)	$	(805,154	)
Net realized gain (loss) on investments		2,122,644			(22,380,164	)
Net change in unrealized appreciation (depreciation) on investments		459,977			390,248
Net increase (decrease) in net assets resulting from operations		2,329,333			(22,795,070	)
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		8,015,246			36,241,604
C-Class		4,990,031			11,646,199
H-Class		156,831,439			582,298,261
Distributions reinvested
A-Class		—			112,352
C-Class		—			97,269
H-Class		—			6,753,618
Cost of shares redeemed
A-Class		(8,071,303	)		(48,102,984	)
C-Class		(5,831,709	)		(13,148,692	)
H-Class		(161,648,841	)		(709,370,706	)
Net decrease from capital share transactions		(5,715,137	)		(133,473,079	)
Net decrease in net assets		(3,385,804	)		(163,252,034	)
Net assets:
Beginning of year		14,446,503			177,698,537
End of year	$	11,060,699		$	14,446,503
Accumulated net investment loss at end of year	$	(91,659	)	$	(67,896	)
Capital share activity:
Shares sold
A-Class		154,635			685,083
C-Class		108,852			238,619
H-Class		3,132,819			10,937,592
Shares issued from reinvestment of distributions
A-Class		—			2,098
C-Class		—			1,981
H-Class		—			126,662
Shares redeemed
A-Class		(152,304	)		(930,136	)
C-Class		(126,213	)		(270,556	)
H-Class		(3,214,633	)		(13,687,898	)
Net decrease in shares		(96,844	)		(2,896,555	)

84 | 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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	47.68		$	55.75		$	38.36		$	42.75		$	40.35
Income (loss) from investment operations:
Net investment income (loss)a		(.55	)		(.58	)		(.56	)		(.69	)		(.63	)
Net gain (loss) on investments (realized and unrealized)		6.10			(5.32	)		17.95			(3.70	)		3.03
Total from investment operations		5.55			(5.90	)		17.39			(4.39	)		2.40
Less distributions from:
Net realized gains		—			(2.17	)		—			—			—
Total distributions		—			(2.17	)		—			—			—
Net asset value, end of period	$	53.23		$	47.68		$	55.75		$	38.36		$	42.75
Total Returnb		11.64	%		(11.01	%)		45.33	%		(10.27	%)		5.95	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	2,245		$	1,900		$	15,765		$	3,547		$	10,427
Ratios to average net assets:
Net investment income (loss)		(1.07	%)		(1.10	%)		(1.19	%)		(1.72	%)		(1.53	%)
Total expensesc		1.73	%		1.69	%		1.68	%		1.74	%		1.66	%
Portfolio turnover rate		142	%		376	%		299	%		—			—

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	43.60		$	51.55		$	35.74		$	40.15		$	38.14
Income (loss) from investment operations:
Net investment income (loss)a		(.82	)		(.85	)		(.81	)		(.94	)		(.90	)
Net gain (loss) on investments (realized and unrealized)		5.54			(4.93	)		16.62			(3.47	)		2.91
Total from investment operations		4.72			(5.78	)		15.81			(4.41	)		2.01
Less distributions from:
Net realized gains		—			(2.17	)		—			—			—
Total distributions		—			(2.17	)		—			—			—
Net asset value, end of period	$	48.32		$	43.60		$	51.55		$	35.74		$	40.15
Total Returnb		10.80	%		(11.69	%)		44.24	%		(10.96	%)		5.27	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,309		$	1,938		$	3,836		$	2,099		$	3,530
Ratios to average net assets:
Net investment income (loss)		(1.80	%)		(1.75	%)		(1.96	%)		(2.48	%)		(2.29	%)
Total expensesc		2.48	%		2.45	%		2.44	%		2.50	%		2.42	%
Portfolio turnover rate		142	%		376	%		299	%		—			—

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	47.49		$	55.53		$	38.21		$	42.60		$	40.17
Income (loss) from investment operations:
Net investment income (loss)a		(.56	)		(.59	)		(.56	)		(.69	)		(.63	)
Net gain (loss) on investments (realized and unrealized)		6.10			(5.28	)		17.88			(3.70	)		3.06
Total from investment operations		5.54			(5.87	)		17.32			(4.39	)		2.43
Less distributions from:
Net realized gains		—			(2.17	)		—			—			—
Total distributions		—			(2.17	)		—			—			—
Net asset value, end of period	$	53.03		$	47.49		$	55.53		$	38.21		$	42.60
Total Returnb		11.64	%		(11.00	%)		45.33	%		(10.31	%)		6.05	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	7,506		$	10,608		$	158,098		$	9,764		$	11,979
Ratios to average net assets:
Net investment income (loss)		(1.11	%)		(1.12	%)		(1.19	%)		(1.72	%)		(1.53	%)
Total expensesc		1.73	%		1.70	%		1.68	%		1.74	%		1.66	%
Portfolio turnover rate		142	%		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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 -13.73%, compared with a return of 6.09% for its benchmark, the U.S. Dollar Index.

All components of the U.S. Dollar Index with the exception of the Japanese Yen contributed positively toward performance for the period. The Japanese Yen was the only component which detracted from the Index’s performance, detracting 0.05% from index performance 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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 | 87

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

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	4.1%
Guggenheim Strategy Fund II	4.1%
Total	8.2%

“Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	-13.69%	-10.58%	-4.75%
A-Class Shares with sales charge†	-17.82%	-11.45%	-5.22%
C-Class Shares	-14.39%	-11.27%	-5.47%
C-Class Shares with CDSC‡	-15.25%	-11.27%	-5.47%
H-Class Shares	-13.73%	-10.59%	-4.76%
U.S. Dollar Index	6.09%	4.90%	1.92%

*	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.

88 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
WEAKENING DOLLAR 2x STRATEGY FUND

	Shares		Value
MUTUAL FUNDS† - 8.2%
Guggenheim Strategy Fund I1		10,016	$	250,891
Guggenheim Strategy Fund II1		10,034		250,840
Total Mutual Funds
(Cost $497,983)				501,731

	Face Amount
FEDERAL AGENCY NOTES†† - 8.2%
Federal Farm Credit Bank2
1.17% due 09/12/183	$	500,000	500,358
Total Federal Agency Notes
(Cost $499,927)			500,358
REPURCHASE AGREEMENTS††,4 - 73.7%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		2,341,441	2,341,441
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,508,445	1,508,445

Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/175	401,925		401,925
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	231,223		231,223
Total Repurchase Agreements
(Cost $4,483,034)			4,483,034
Total Investments - 90.1%
(Cost $5,480,944)		$	5,485,123
Other Assets & Liabilities, net - 9.9%			602,363
Total Net Assets - 100.0%		$	6,087,486

	Contracts		Unrealized Gain
CURRENCY FUTURES CONTRACTS SOLD SHORT†
June 2017 U.S. Dollar Index Futures Contracts (Aggregate Value of Contracts $10,936,515)		109	$	81,035
OTC CURRENCY INDEX SWAP AGREEMENTS SOLD SHORT††
Goldman Sachs International June 2017 U.S. Dollar Index Swap 1.22%6, Terminating 06/15/17 (Notional Value $1,205,343)		12,009	$	15,970

†	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, 2017.
4	Repurchase Agreements — See Note 5.
5	All or a portion of this security is pledged as currency index swap collateral at March 31, 2017.
6	Total Return based on U.S. Dollar Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
WEAKENING DOLLAR 2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	—	$	81,035	$	—	$	—	$	—	$	81,035
Currency Index Swap Agreements		—		—		—		15,970		—		15,970
Federal Agency Notes		—		—		500,358		—		—		500,358
Mutual Funds		501,731		—		—		—		—		501,731
Repurchase Agreements		—		—		4,483,034		—		—		4,483,034
Total	$	501,731	$	81,035	$	4,983,392	$	15,970	$	—	$	5,582,128

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

WEAKENING DOLLAR 2x STRATEGY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value (cost $499,927)	$	500,358
Investments in affiliated issuers, at value (cost $497,983)		501,731
Repurchase agreements, at value (cost $4,483,034)		4,483,034
Total investments (cost $5,480,944)		5,485,123
Segregated cash with broker		181,800
Unrealized appreciation on swap agreements		15,970
Receivables:
Swap settlement		4,041
Fund shares sold		440,491
Dividends		776
Interest		395
Total assets		6,128,596
Liabilities:
Payable for:
Fund shares redeemed		25,574
Variation margin		5,063
Management fees		3,459
Licensing fees		2,786
Distribution and service fees		1,394
Transfer agent and administrative fees		961
Portfolio accounting fees		384
Miscellaneous		1,489
Total liabilities		41,110
Commitments and contingent liabilities (Note 13)		—
Net assets	$	6,087,486
Net assets consist of:
Paid in capital	$	20,003,003
Accumulated net investment loss		(10,550	)
Accumulated net realized loss on investments		(14,006,151	)
Net unrealized appreciation on investments		101,184
Net assets	$	6,087,486
A-Class:
Net assets	$	324,305
Capital shares outstanding		4,990
Net asset value per share	$	64.99
Maximum offering price per share (Net asset value divided by 95.25%)	$	68.23
C-Class:
Net assets	$	695,041
Capital shares outstanding		11,837
Net asset value per share	$	58.72
H-Class:
Net assets	$	5,068,140
Capital shares outstanding		78,071
Net asset value per share	$	64.92

 

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Interest	$	14,914
Dividends from securities of affiliated issuers		14,176
Total investment income		29,090
Expenses:
Management fees		48,682
Transfer agent and administrative fees		13,523
Distribution and service fees:
A-Class		1,636
C-Class		5,368
H-Class		10,544
Portfolio accounting fees		5,409
Custodian fees		855
Trustees’ fees*		477
Miscellaneous		10,530
Total expenses		97,024
Net investment loss		(67,934	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in affiliated issuers		9,237
Swap agreements		(290,783	)
Futures contracts		(1,265,628	)
Net realized loss		(1,547,174	)
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		431
Investments in affiliated issuers		2,241
Swap agreements		5,077
Futures contracts		(169,124	)
Net change in unrealized appreciation (depreciation)		(161,375	)
Net realized and unrealized loss		(1,708,549	)
Net decrease in net assets resulting from operations	$	(1,776,483	)

* 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 | 91

WEAKENING DOLLAR 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(67,934	)	$	(85,654	)
Net realized loss on investments		(1,547,174	)		(1,286,932	)
Net change in unrealized appreciation (depreciation) on investments		(161,375	)		202,427
Net decrease in net assets resulting from operations		(1,776,483	)		(1,170,159	)
Capital share transactions:
Proceeds from sale of shares
A-Class		6,990,845			8,961,442
C-Class		1,177,429			5,359,174
H-Class		66,296,972			95,822,345
Cost of shares redeemed
A-Class		(7,813,379	)		(8,222,299	)
C-Class		(919,788	)		(4,968,724	)
H-Class		(63,362,959	)		(94,608,486	)
Net increase from capital share transactions		2,369,120			2,343,452
Net increase in net assets		592,637			1,173,293
Net assets:
Beginning of year		5,494,849			4,321,556
End of year	$	6,087,486		$	5,494,849
Accumulated net investment loss at end of year	$	(10,550	)	$	(13,865	)
Capital share activity:*
Shares sold
A-Class		100,872			123,137
C-Class		18,572			77,717
H-Class		917,915			1,315,899
Shares redeemed
A-Class		(113,327	)		(112,882	)
C-Class		(14,545	)		(72,413	)
H-Class		(888,300	)		(1,319,158	)
Net increase in shares		21,187			12,300

* Capital share activity for the periods presented through March 31, 2017 has been restated to reflect a 1:6 reverse share split effective October 28, 2016 — See Note 12.

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

WEAKENING DOLLAR 2x STRATEGY FUND

FINANCIAL HIGHLIGHTS

This table is presented to show selected data for a share outstanding throughout each period and to assist shareholders in evaluating a Fund’s performance for the periods presented.

A-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	75.31		$	70.69		$	107.17		$	101.72		$	113.72
Income (loss) from investment operations:
Net investment income (loss)a		(.80	)		(.84	)		(1.20	)		(1.80	)		(1.68	)
Net gain (loss) on investments (realized and unrealized)		(9.52	)		5.46			(35.28	)		7.25			(10.32	)
Total from investment operations		(10.32	)		4.62			(36.48	)		5.45			(12.00	)
Net asset value, end of period	$	64.99		$	75.31		$	70.69		$	107.17		$	101.72
Total Returnb		(13.69	%)		6.54	%		(34.04	%)		5.37	%		(10.55	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	324		$	1,314		$	508		$	1,129		$	1,346
Ratios to average net assets:
Net investment income (loss)		(1.13	%)		(1.13	%)		(1.23	%)		(1.73	%)		(1.53	%)
Total expensesc		1.72	%		1.70	%		1.70	%		1.75	%		1.65	%
Portfolio turnover rate		77	%		699	%		219	%		—			—

C-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	68.57		$	64.88		$	99.08		$	94.76		$	106.73
Income (loss) from investment operations:
Net investment income (loss)a		(1.19	)		(1.20	)		(1.74	)		(2.40	)		(2.28	)
Net gain (loss) on investments (realized and unrealized)		(8.66	)		4.89			(32.46	)		6.72			(9.69	)
Total from investment operations		(9.85	)		3.69			(34.20	)		4.32			(11.97	)
Net asset value, end of period	$	58.72		$	68.57		$	64.88		$	99.08		$	94.76
Total Returnb		(14.39	%)		5.74	%		(34.52	%)		4.56	%		(11.24	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	695		$	536		$	163		$	821		$	1,687
Ratios to average net assets:
Net investment income (loss)		(1.88	%)		(1.81	%)		(1.94	%)		(2.49	%)		(2.27	%)
Total expensesc		2.47	%		2.45	%		2.46	%		2.52	%		2.39	%
Portfolio turnover rate		77	%		699	%		219	%		—			—

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

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, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	75.23		$	70.59		$	106.99		$	101.58		$	113.59
Income (loss) from investment operations:
Net investment income (loss)a		(.85	)		(.78	)		(1.14	)		(1.80	)		(1.62	)
Net gain (loss) on investments (realized and unrealized)		(9.46	)		5.42			(35.26	)		7.21			(10.39	)
Total from investment operations		(10.31	)		4.64			(36.40	)		5.41			(12.01	)
Net asset value, end of period	$	64.92		$	75.23		$	70.59		$	106.99		$	101.58
Total Returnb		(13.73	%)		6.54	%		(33.99	%)		5.32	%		(10.57	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	5,068		$	3,645		$	3,651		$	5,449		$	10,058
Ratios to average net assets:
Net investment income (loss)		(1.19	%)		(1.04	%)		(1.20	%)		(1.74	%)		(1.52	%)
Total expensesc		1.71	%		1.70	%		1.70	%		1.76	%		1.64	%
Portfolio turnover rate		77	%		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.
d	Reverse share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 1:6 reverse share split effective October 28, 2016 — See Note 12.

94 | 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, 2017, 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.

Security Investors, LLC, which operates under the name Guggenheim Investments (“GI”), provides advisory services. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI 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, 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 and/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, to 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 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

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NOTES TO FINANCIAL STATEMENTS (continued)

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.

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.

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 using methods established or ratified by the Board. 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 market prices; sale prices; broker quotes; and models which derive prices based on inputs such as prices of securities with comparable maturities and characteristics, or based on inputs such as anticipated cash flows or collateral, spread over Treasuries, and other information analysis.

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 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 an agreement are recognized as realized gains or losses.

E. The accounting records of the Fund 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.

96 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 0.82% at March 31, 2017.

J. Under the Funds’ organizational documents, the 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 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

THE RYDEX FUNDS ANNUAL REPORT | 97

NOTES TO FINANCIAL STATEMENTS (continued)

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	$	8,997,915	$	—
Japan 2x Strategy Fund	Index exposure, Leverage, Liquidity		9,285,881		—
Strengthening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity		36,996,569		—
Weakening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		6,644,776

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 currency swaps on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Strengthening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity	$	4,672,341	$	—
Weakening Dollar 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		1,347,412

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, 2017:

Derivative Investment Type	Asset Derivatives	Liability Derivatives
Equity/Currency contracts	Variation margin	Variation margin
	Unrealized appreciation on swap agreements	Unrealized depreciation on swap agreements

98 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

The following table sets forth the fair value of the Funds’ derivative investments categorized by primary risk exposure at March 31, 2017:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Futures Currency Contracts*		Swaps Currency Contracts		Total Value at March 31, 2017
Europe 1.25x Strategy Fund	$	67,050	$	—	$	—	$	67,050
Japan 2x Strategy Fund		—		188,189		—		188,189
Weakening Dollar 2x Strategy Fund		—		81,035		15,970		97,005

Liability Derivative Investments Value
Fund	Futures Equity Contracts*		Futures Currency Contracts*		Swaps Currency Contracts		Total Value at March 31, 2017
Europe 1.25x Strategy Fund	$	—	$	38,249	$	—	$	38,249
Japan 2x Strategy Fund		100,741		—		—		100,741
Strengthening Dollar 2x Strategy Fund		—		217,179		70,790		287,969

* 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, 2017:

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

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, 2017:

Realized Gain (Loss) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts		Swaps Equity Contracts		Futures Currency Contracts			Swaps Currency Contracts			Total
Europe 1.25x Strategy Fund	$	2,158,861	$	1,754	$	(164,606	)	$	—		$	1,996,009
Japan 2x Strategy Fund		2,165,594		2,129		636,160			—			2,803,883
Strengthening Dollar 2x Strategy Fund		—		—		1,823,241			285,005			2,108,246
Weakening Dollar 2x Strategy Fund		—		—		(1,265,628	)		(290,783	)		(1,556,411	)

Change in Unrealized Appreciation (Depreciation) on Derivative Investments Recognized on the Statements of Operations
Fund	Futures Equity Contracts			Swaps Equity Contracts		Futures Currency Contracts			Swaps Currency Contracts		Total
Europe 1.25x Strategy Fund	$	107,315		$	—	$	(97,038	)	$	—	$	10,277
Japan 2x Strategy Fund		(152,276	)		—		146,984			—		(5,292	)
Strengthening Dollar 2x Strategy Fund		—			—		363,629			58,170		421,799
Weakening Dollar 2x Strategy Fund		—			—		(169,124	)		5,077		(164,047	)

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NOTES TO FINANCIAL STATEMENTS (continued)

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 the 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%

GI 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, 2017, GFD retained sales charges of $252,227 relating to sales of A-Class shares of the Trust.

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

On October 4, 2016, Rydex Fund Services, LLC (“RFS”) was purchased by MUFG Investor Services and as of that date RFS ceased to be an affiliate of GI. In connection with its acquisition, RFS changed its name to MUFG Investor Services (US), LLC (“MUIS”). This change had no impact on the financial statements of the Trust.

MUIS acts as the Trust’s administrator, transfer agent and accounting agent. As administrator, transfer agent and accounting agent, MUIS is responsible for maintaining the books and records of the Trust’s securities and cash. For providing the aforementioned services, MUIS is entitled to receive a monthly fee equal to an annual percentage of the Funds’ average daily net assets subject to certain minimum monthly fees and out of pocket expenses.

100 | 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, 2017, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement	Face Value		Repurchase Price		Collateral	Par Value		Fair Value
RBC Capital Markets LLC					U.S. Treasury Note
0.72%					2.00%
Due 04/03/17	$	157,196,814	$	157,206,245	05/31/21	$	157,319,700	$	160,340,757
HSBC Securities, Inc.					U.S. Treasury Strips
0.68%					0.00%
Due 04/03/17		101,272,070		101,277,809	11/15/42 - 05/15/43		229,169,400		103,297,534
Mizuho Securities LLC					U.S. Treasury Bill
0.71%					0.00%
Due 04/03/17		54,250,554		54,253,764	01/04/18		55,734,200		55,335,700
UMB Financial Corp.					Federal Farm Credit Bank
0.68%					0.60% - 0.85%
Due 04/03/17		15,523,545		15,524,424	04/05/17 - 04/25/17		14,784,000		14,831,151
					Federal Home Loan Bank
					0.88%
					05/24/17		1,000,000		1,003,157
					Total UMB Financial Corp.		15,784,000		15,834,308

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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, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.

6. Portfolio Securities Loaned

The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, U.S. Bank acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with U.S. Bank, cash collateral and proceeds are invested in the First American Government Obligations Fund — Class Z. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand. Securities lending transactions are accounted for as secured borrowings. The remaining contractual maturity of the securities lending agreement is overnight and continuous.

At March 31, 2017, the Funds participated in securities lending transactions, which are subject to enforceable netting arrangements, as follows:

	Gross Amounts Not Offset in the Statements of Assets and Liabilities							Securities Lending Collateral
Fund	Value of Securities Loaned		Collateral Received(a)			Net Amount		Cash Collateral  Invested		Cash Collateral Uninvested		Total Collateral
S&P 500® Pure Growth Fund	$	2,669,045	$	(2,669,045	)	$	—	$	2,721,737	$	—	$	2,721,737
S&P 500® Pure Value Fund		2,206,809		(2,206,809	)		—		2,256,303		—		2,256,303
S&P MidCap 400® Pure Growth Fund		3,751,234		(3,751,234	)		—		3,808,131		—		3,808,131
S&P MidCap 400® Pure Value Fund		1,205,672		(1,205,672	)		—		1,260,166		—		1,260,166
S&P SmallCap 600® Pure Growth Fund		2,099,885		(2,099,885	)		—		2,158,441		—		2,158,441
S&P SmallCap 600® Pure Value Fund		580,854		(580,854	)		—		594,517		—		594,517
Europe 1.25x Strategy Fund		156,910		(156,910	)		—		160,359		—		160,359

^(a) Actual collateral received by the Fund is greater than the amount shown due to overcollateralization.

In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. GI, acting under the supervision of the Board, reviews the value of the collateral and the creditworthiness of those banks and dealers to evaluate potential risks.

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 from 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.

102 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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, are 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
Weakening Dollar 2x Strategy Fund	Swap currency contracts	$	15,970	$	—	$	15,970	$	—	$	—	$	15,970

								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	$	70,790	$	—	$	70,790	$	70,790	$	—	$	—

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.

THE RYDEX FUNDS ANNUAL REPORT | 103

NOTES TO FINANCIAL STATEMENTS (continued)

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.

The tax character of distributions paid during the year ended March 31, 2017 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
S&P 500® Pure Growth Fund	$	—	$	37,270	$	37,270
S&P 500® Pure Value Fund		792,718		—		792,718
S&P MidCap 400® Pure Growth Fund		—		1,725,925		1,725,925
S&P MidCap 400® Pure Value Fund		52,548		—		52,548
Europe 1.25x Strategy Fund		35,360		—		35,360

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
Europe 1.25x Strategy Fund		63,417		—		63,417
Strengthening Dollar 2x Strategy Fund		—		6,983,885		6,983,885

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

The tax components of accumulated earnings/(deficit) as of March 31, 2017 were 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	$	—	$	6,261,469	$	14,532,933		$	(331,761	)
S&P 500® Pure Value Fund		342,239		—		7,490,363			—
S&P MidCap 400® Pure Growth Fund		—		3,450,756		10,020,010			(151,615	)
S&P MidCap 400® Pure Value Fund		606,259		—		757,641			—
S&P SmallCap 600® Pure Growth Fund		—		766,542		2,599,185			(76,698	)
S&P SmallCap 600® Pure Value Fund		—		—		(4,318,764	)		(19,972,944	)
Europe 1.25x Strategy Fund		24,132		—		21,182			(3,512,151	)
Japan 2x Strategy Fund		—		—		3,306			(409,294	)
Strengthening Dollar 2x Strategy Fund		—		—		18,566			(19,447,689	)
Weakening Dollar 2x Strategy Fund		—		—		3,840			(13,919,357	)

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

104 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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, 2017, capital loss carryforwards for the Funds were as follows:

				Unlimited
Fund	Expires in 2019			Short-Term			Long-Term			Total Capital Loss Carryforward
S&P SmallCap 600® Pure Value Fund	$	(19,913,891	)	$	—		$	—		$	(19,913,891	)
Europe 1.25x Strategy Fund		(2,098,062	)		(476,979	)		(937,110	)		(3,512,151	)
Japan 2x Strategy Fund		—			(133,418	)		(270,167	)		(403,585	)
Strengthening Dollar 2x Strategy Fund		—			(7,805,587	)		(11,550,443	)		(19,356,030	)
Weakening Dollar 2x Strategy Fund		(3,988,430	)		(3,982,702	)		(5,937,675	)		(13,908,807	)

For the year ended March 31, 2017, the following capital loss carryforward amounts were expired or used:

Fund	Expired		Utilized		Total
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 Value Fund		—		2,043,648		2,043,648
S&P SmallCap 600® Pure Growth Fund		—		80,623		80,623
S&P SmallCap 600® Pure Value Fund		—		5,604,767		5,604,767
Europe 1.25x Strategy Fund		8,826,483		2,751,259		11,577,742
Japan 2x Strategy Fund		973,570		—		973,570
Strengthening Dollar 2x Strategy Fund		—		2,541,036		2,541,036
Weakening Dollar 2x Strategy Fund		6,635,880		—		6,635,880

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, net operating losses, dividend reclasses, and REIT adjustments. 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 (Loss)			Accumulated Net Realized Gain (Loss)
S&P 500® Pure Growth Fund	$	3,679,470		$	630,484		$	(4,309,954	)
S&P 500® Pure Value Fund		2,346,541			(175,242	)		(2,171,299	)
S&P MidCap 400® Pure Growth Fund		265,037			1,065,788			(1,330,825	)
S&P MidCap 400® Pure Value Fund		2,738,931			78,684			(2,817,615	)
S&P SmallCap 600® Pure Growth Fund		(54,401	)		198,342			(143,941	)
S&P SmallCap 600® Pure Value Fund		(137,942	)		137,942			—
Europe 1.25x Strategy Fund		(8,826,483	)		(11,199	)		8,837,682
Japan 2x Strategy Fund		(1,009,738	)		36,172			973,566
Strengthening Dollar 2x Strategy Fund		(229,525	)		229,525			—
Weakening Dollar 2x Strategy Fund		(6,707,129	)		71,249			6,635,880

THE RYDEX FUNDS ANNUAL REPORT | 105

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, 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	$	93,593,697	$	15,685,783	$	(1,152,850	)	$	14,532,933
S&P 500® Pure Value Fund		61,205,229		8,297,901		(807,538	)		7,490,363
S&P MidCap 400® Pure Growth Fund		104,862,442		12,988,536		(2,968,526	)		10,020,010
S&P MidCap 400® Pure Value Fund		27,948,907		1,593,501		(835,860	)		757,641
S&P SmallCap 600® Pure Growth Fund		36,775,734		3,628,811		(1,029,626	)		2,599,185
S&P SmallCap 600® Pure Value Fund		28,381,602		—		(4,318,764	)		(4,318,764	)
Europe 1.25x Strategy Fund		7,258,654		41,919		(20,626	)		21,293
Japan 2x Strategy Fund		3,576,005		3,306		—			3,306
Strengthening Dollar 2x Strategy Fund		10,798,422		18,686		(121	)		18,565
Weakening Dollar 2x Strategy Fund		5,481,283		3,840		—			3,840

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, 2017, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2017:

Fund	Ordinary
S&P 500® Pure Growth Fund	$	(331,761	)
S&P MidCap 400® Pure Growth Fund		(151,615	)
S&P SmallCap 600® Pure Growth Fund		(76,698	)
S&P SmallCap 600® Pure Value Fund		(59,053	)
Japan 2x Strategy Fund		(5,709	)
Strengthening Dollar 2x Strategy Fund		(91,659	)
Weakening Dollar 2x Strategy Fund		(10,550	)

9. Securities Transactions

For the year ended March 31, 2017, 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	$	189,893,596	$	250,687,826
S&P 500® Pure Value Fund		218,550,944		244,490,921
S&P MidCap 400® Pure Growth Fund		150,531,404		196,441,257
S&P MidCap 400® Pure Value Fund		238,226,105		269,757,918
S&P SmallCap 600® Pure Growth Fund		277,603,487		276,139,426
S&P SmallCap 600® Pure Value Fund		481,233,276		480,361,501
Europe 1.25x Strategy Fund		57,633,857		57,693,038
Japan 2x Strategy Fund		9,571,559		9,111,000
Strengthening Dollar 2x Strategy Fund		7,255,735		10,908,700
Weakening Dollar 2x Strategy Fund		628,747		2,605,000

106 | THE RYDEX FUNDS ANNUAL REPORT

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 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, 2017, 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)
S&P 500® Pure Growth Fund	$	33,915,274	$	42,256,697	$	3,273,950
S&P 500® Pure Value Fund		40,754,703		43,078,284		1,249,199
S&P MidCap 400® Pure Growth Fund		14,546,041		21,972,439		(299,118	)
S&P MidCap 400® Pure Value Fund		21,727,461		30,006,686		838,893
S&P SmallCap 600® Pure Growth Fund		16,786,125		18,908,314		1,044,513
S&P SmallCap 600® Pure Value Fund		13,457,943		13,971,973		1,041,035
Europe 1.25x Strategy Fund		4,862,992		3,570,552		147,763

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, 2016, is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at https://www.sec.gov/Archives/edgar/data/1601445/000089180416001923/gug65857-ncsr.htm.

Transactions during the year ended March 31, 2017, in which the portfolio company is an “affiliated person,” were as follows:

Affiliated issuers by Fund	Value 03/31/16		Additions		Reductions			Value 03/31/17		Shares 03/31/17		Investment Income		Realized Gain (Loss)
Europe 1.25x Strategy Fund
Guggenheim Strategy Fund I	$	829,184	$	3,943,043	$	(4,045,000	)	$	732,497		29,241	$	10,565	$	2,783
Guggenheim Strategy Fund II		—		3,540,045		(2,640,000	)		903,646		36,146		11,758		437
		829,184		7,483,088		(6,685,000	)		1,636,143				22,323		3,220
Japan 2x Strategy Fund
Guggenheim Strategy Fund I		731,860		5,201,513		(5,338,000	)		599,382		23,927		6,922		2,148
Guggenheim Strategy Fund II		—		4,370,045		(3,773,000	)		600,035		24,001		6,770		1,097
		731,860		9,571,558		(9,111,000	)		1,199,417				13,692		3,245
Strengthening Dollar 2x Strategy Fund
Guggenheim Strategy Fund I		4,256,077		1,003,658		(4,680,000	)		600,468		23,971		29,140		10,292
Guggenheim Strategy Fund II		4,198,744		1,254,726		(3,730,000	)		1,752,355		70,094		43,480		3,361
		8,454,821		2,258,384		(8,410,000	)		2,352,823				72,620		13,653
Weakening Dollar 2x Strategy Fund
Guggenheim Strategy Fund I		1,227,757		313,395		(1,295,000	)		250,891		10,016		6,224		3,628
Guggenheim Strategy Fund II		1,238,749		315,352		(1,310,000	)		250,840		10,034		7,952		5,609
		2,466,506		628,747		(2,605,000	)		501,731				14,176		9,237

THE RYDEX FUNDS ANNUAL REPORT | 107

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 11, 2017. 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 1.58% for the year ended March 31, 2017. The Funds did not have any borrowings outstanding under this agreement at March 31, 2017.

The average daily balances borrowed for the year ended March 31, 2017, were as follows:

Fund	Average Daily Balance
S&P 500® Pure Growth Fund	$	11,509
S&P 500® Pure Value Fund		14,522
S&P MidCap 400® Pure Growth Fund		16,109
S&P MidCap 400® Pure Value Fund		8,493
S&P SmallCap 600® Pure Growth Fund		18,684
S&P SmallCap 600® Pure Value Fund		24,841
Europe 1.25x Strategy Fund		1,488
Strengthening Dollar 2x Strategy Fund		76,695

12. Share Splits

Share splits occurred for the following Funds at the close of business:

Fund	Effective Date	Split Type
S&P 500® Pure Value Fund	October 28, 2016	Two-for-One Share Split
Europe 1.25x Strategy Fund	October 28, 2016	One-for-Six Reverse Share Split
Japan 2x Strategy Fund	November 4, 2016	One-for-Four Reverse Share Split
Weakening Dollar 2x Strategy Fund	October 28, 2016	One-for-Six Reverse Share Split

The effect of these transactions was to multiply the number of outstanding shares of the S&P 500^® Pure Value Fund by its split ratio, resulting in a corresponding decrease in the NAV and to divide the number of outstanding shares of the Europe 1.25x Strategy Fund, Japan 2x Strategy Fund and the Weakening Dollar 2x Strategy Fund by their respective reverse split ratio, resulting in a corresponding increase in the NAV. The share transactions presented in the Statements of Changes in net assets and the per share data in the Financial Highlights for each of the periods presented prior to the effective date, have been restated to reflect these respective share splits. There were no changes in net assets, results of operations or total return as a result of these transactions.

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 Tribune 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.

108 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 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, their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments. On April 12, 2016, the Plaintiffs in the SLCFC actions filed a petition seeking rehearing en banc before the appeals court. On July 22, 2016, the appeals court denied the petition. On September 9, 2016, the plaintiffs filed a petition for writ of certiorari in the U.S. Supreme Court challenging the Second Circuit’s decision that the safe harbor of Section 546(e) applied to their claims. The shareholder defendants, including the Funds, filed a joint brief in opposition to the petition for certiorari on October 24, 2016. The Supreme Court has not yet granted or denied the petition for certiorari.

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. On January 6, 2017, the United States District Court for the Southern District of New York granted the shareholder defendants’ motion to dismiss the intentional fraudulent conveyance claim in the FitzSimons action. In dismissing the intentional fraudulent conveyance claim, the Court denied the plaintiff’s request to amend the complaint. The plaintiff requested that the Court direct entry of a final judgment in order to make the order immediately appealable. On February 23, 2017, the Court issued an order stating that it intends to permit an interlocutory appeal of the dismissal order, but will wait to do so until it has resolved outstanding motions to dismiss filed by other defendants. Accordingly, the timing of the appeal is uncertain.

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”). Its funds may also be putative members of the proposed defendant classes in Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adv. Pro. No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust Action”) and Weisfelner, as Trustee of the LB Creditor Trust, v. Reichman (In re Lyondell Chemical Co.), Adv. Pro. No. 12-1570 (Bankr. S.D.N.Y.) (“Reichman”).

Similar to the claims made in the Tribune matter, the Weisfelner complaints seek to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008. The Creditor Trust Action and Reichman allege claims against the former Lyondell shareholders under state law for both constructive fraudulent transfer and intentional fraudulent transfer. The Litigation Trust Action alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On April 7, 2014, the plaintiff filed a Third Amended Complaint in the Creditor Trust Action, a Second Amended Complaint in the Litigation Trust Action, and an Amended Complaint in Reichman.

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.

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NOTES TO FINANCIAL STATEMENTS (concluded)

On July 30, 2014, the defendants filed a motion to dismiss these lawsuits. The Bankruptcy Court held oral argument on the motion 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 intentional fraudulent transfer claims in the Creditor Trust Action, the Litigation Trust Action, and in Reichman, but denied the motion to dismiss the constructive fraudulent transfer claims in the Creditor Trust Action and in Reichman. The Bankruptcy Court entered final judgment dismissing the Litigation Trust Action, but the plaintiff 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 Action and Reichman in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. On July 20, 2016, the Bankruptcy Court issued a report and recommendation granting the defendants’ motion to dismiss. The U.S. District Court for the Southern District of New York has not yet accepted the Bankruptcy Court’s recommendation or entered a final judgment.

On July 27, 2016, the District Court reversed the Bankruptcy Court and reinstated the federal law intentional fraudulent transfer claim in the Litigation Trust Action and remanded to the Bankruptcy Court for further proceedings. The District Court found that the fraudulent intent that mattered was that of Lyondell’s CEO, not its board, because the CEO’s intent could be imputed to Lyondell under Delaware law agency principles. The District Court did note, however, that plaintiff faces a high standard for proving “actual intent” to harm creditors, and that it remains to be seen whether plaintiff will be able to make this showing. On August 11, 2016, the shareholder defendants filed a motion for reconsideration and/or to certify an interlocutory appeal of the District Court’s opinion. On October 5, 2016, the District Court denied the motion for reconsideration and/or to certify an interlocutory appeal. In light of this ruling, the federal intentional fraudulent conveyance claim will move forward before the Bankruptcy Court, but a schedule for that case has not yet been set.

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.

110 | 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, 2017, 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, 2017, 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 position of the above listed Funds (ten of the series constituting the Rydex Series Funds) at March 31, 2017, 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.

Tysons, Virginia
May 30, 2017

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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, 2017, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
S&P 500® Pure Value Fund		100.00	%
S&P MidCap 400® Pure Value Fund		100.00	%

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		100.00	%
S&P MidCap 400® Pure Value Fund		100.00	%
Europe 1.25x Strategy Fund		100.00	%

Of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2017, 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
Europe 1.25x Strategy Fund		4.84	%		0.00	%

With respect to the taxable year ended March 31, 2017, 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	$	37,270	$	4,309,954
S&P MidCap 400® Pure Growth Fund		1,725,925		1,330,825
S&P MidCap 400® Pure Value Fund		—		169,546
S&P SmallCap 600® Pure Growth Fund		—		143,941

For the fiscal year ending March 31, 2017, Europe 1.25x Strategy Fund earned gross income derived from foreign sources totaling $95,644. The Fund paid foreign taxes totaling $9,875 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 2017 income tax forms in January 2018.

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 https://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 https://www.sec.gov.

112 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)(concluded)

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 https://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 | 113

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)	President and 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).	230	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Guggenheim Partners Investment Management Holdings, LLC (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Angela Brock-Kyle***** (1959)	Trustee from August 2016 to present.	Current: Founder and Chief Executive Officer, B.O.A.R.D.S (consulting firm) Former: Senior Leader, TIAA (financial services firm) (1987-2012).	135	Infinity Property & Casualty Corporation (2014-present).
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.	135	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.	135	Epiphany Funds (4) (2009-present).

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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
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.	135	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).	135	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).	135	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).	135	None.
Sandra G. Sponem***** (1958)	Trustee from August 2016 to present.	Current: Senior Vice President and Chief Financial Officer, M.A. Mortenson Companies, Inc. (general contracting firm) (2007-present).	135	None.

THE RYDEX FUNDS ANNUAL REPORT | 115

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
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.
Joanna M. Catalucci (1966)	AML Officer (2016-present)	Current: Chief Compliance Officer, certain funds in the Fund Complex (2012-present); Senior Managing Director, Guggenheim Investments (2014-present); AML Officer, certain funds in the Fund Complex (2016-present). Former: Chief Compliance Officer and Secretary, certain other funds in the Fund Complex (2008-2012); Senior Vice President & Chief Compliance Officer, Security Investors, LLC and certain affiliates (2010-2012); Chief Compliance Officer and Senior Vice President, Rydex Advisors, LLC and certain affiliates (2010-2011).
James M. Howley (1972)	Assistant Treasurer (2016-present)	Current: Managing Director, Guggenheim Investments (2004-present); Assistant Treasurer, certain other funds in the Fund Complex (2006-present). Former: Manager, Mutual Fund Administration of Van Kampen Investments, Inc. (1996-2004).
Keith D. Kemp (1960)	Assistant Treasurer (2016-present)	Current: Treasurer and Assistant Treasurer, certain other funds in the Fund Complex (2010-present); Managing Director of Guggenheim Partners Investment Management, LLC (2015-present); Chief Financial Officer, Guggenheim Specialized Products, LLC (2016-present). Former: Managing Director and Director, Transparent Value, LLC (2010-2016); Director, Guggenheim Partners Investment Management, LLC (2010-2015); Chief Operating Officer, Macquarie Capital Investment Management (2007-2009).
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).
Glenn McWhinnie (1969)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2009-present). Former: Tax Compliance Manager, Ernst & Young LLP (1996-2009).
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).

116 | 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
Adam J. Nelson (1979)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2015-present); Assistant Treasurer, certain other funds in the Fund Complex (2015-present). Former: Assistant Vice President and Fund Administration Director, State Street Corporation (2013-2015); Fund Administration Assistant Director, State Street (2011-2013); Fund Administration Manager, State Street (2009-2011).
Kimberly J. Scott (1974)	Assistant Treasurer (2016-present)	Current: Director, Guggenheim Investments (2012-present); Assistant Treasurer, certain other funds in the Fund Complex (2012-present). Former: Financial Reporting Manager, Invesco, Ltd. (2010-2011); Vice President/Assistant Treasurer, Mutual Fund Administration for Van Kampen Investments, Inc./Morgan Stanley Investment Management (2009-2010); Manager of Mutual Fund Administration, Van Kampen Investments, Inc./Morgan Stanley Investment Management (2005-2009).
John L. Sullivan (1955)	Chief Financial Officer and Treasurer (2016-present)	Current: CFO, Chief Accounting Officer and Treasurer, certain other funds in the Fund Complex (2010-present); Senior Managing Director, Guggenheim Investments (2010-present). Former: Managing Director and CCO, each of the funds in the Van Kampen Investments fund complex (2004-2010); Managing Director and Head of Fund Accounting and Administration, Morgan Stanley Investment Management (2002-2004); CFO and Treasurer, Van Kampen Funds (1996-2004).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 227 West Monroe Street, Chicago, Illinois 60606.
**	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.
****	Certain of the Trustees may serve as directors on the boards of companies not required to be disclosed above, including certain non-profit companies and charitable foundations.
*****	Mses. Brock-Kyle and Sponem commence serving as independent Trustees effective August 18, 2016.

THE RYDEX FUNDS ANNUAL REPORT | 117

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Guggenheim Investments as used herein refers to Guggenheim Partners, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Investment Management, LLC, Guggenheim Funds Distributors, LLC and Security Investors, LLC as well as the funds in the Guggenheim Funds complex (the “funds”).

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 personal information about you, we hold ourselves to high standards in its safekeeping and use. This means, most importantly, that we do not sell client or account information to anyone—whether you are a current or former Guggenheim Investments client.

The Information We Collect About You and How We Collect It

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 Funds or one of the Guggenheim affiliated companies. “Nonpublic personal information” is personally identifiable information about you. For example it includes 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 Share Your Personal Information

As a matter of policy, we do not disclose your nonpublic personal information to nonaffiliated third parties except as required or permitted by law. 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 your personal 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. In connection with servicing your accounts or 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 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 personal 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 share personal information about you if we are compelled by law to do so, if you direct us to do so with your consent, or in other circumstances as permitted by law.

How We Safeguard Your Personal Information

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Guggenheim Investments, access to such information is limited to those who need it to perform their jobs such as servicing your account, resolving problems or informing you of new products and services.

118 | THE RYDEX FUNDS ANNUAL REPORT

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3.31.2017

Rydex Funds Annual Report

Domestic Equity Fund

NASDAQ-100^® Fund

GuggenheimInvestments.com ROTC-ANN-2-0317x0318

TABLE OF CONTENTS

DEAR SHAREHOLDER	2
ECONOMIC AND MARKET OVERVIEW	3
ABOUT SHAREHOLDERS’ FUND EXPENSES	5
NASDAQ-100® FUND	8
NOTES TO FINANCIAL STATEMENTS	26
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	45
OTHER INFORMATION	46
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	48
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	54

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2017

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, 2017.

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 and Chief Executive Officer
April 30, 2017

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, 2017

The market optimism that helped lift risk asset prices after the presidential election in November continued through the early part of 2017. The Standard & Poor’s 500^® (“S&P 500^®”) Index set a new record, high yield corporate bond spreads approached cycle lows, and the 10-year Treasury yield rose to 2.63%, the highest level since 2014. Risk appetite faded as the first quarter drew to a close, however, as investors grappled with the implications of an unsuccessful healthcare reform bill and growing geopolitical risks.

Much of the rise in asset valuations since Donald Trump’s victory has been based on anticipation of his pro-growth policies coming to fruition, an outcome that is far from certain. Asset valuations could be getting a bit ahead of themselves, and becoming more sensitive to a temporary growth scare or setback, especially since the rollout of Trump’s new policies will not be smooth or easy.

Nevertheless, the underlying economy remains on a good trajectory. Tracking estimates for first-quarter real U.S. Gross Domestic Product (“GDP”) growth have fallen in recent weeks despite strong gains in consumer and business sentiment since the election. In late April, after the period ended, the initial estimate of first-quarter GDP growth was 0.7%. However, we attribute a large portion of the apparent weakness to seasonal factors that have depressed as-reported first quarter GDP growth over the past several years. In keeping with this pattern, we would expect the final first-quarter GDP number to be revised higher. More importantly, the prospects for quarterly GDP growth appear stronger going forward.

Consumer spending should benefit from solid income and wealth gains, with household net worth sitting at an all-time high. Recent job gains have been strong, and we anticipate a further acceleration of wage growth as the labor market continues to tighten. Buoyant consumer sentiment and low household debt service outlays also support our positive outlook. On the business investment side, we expect various factors to be supportive, including the uptick in global industrial production growth, the ongoing rise in U.S. oil drilling activity, the surge in small-business optimism, and the recovery in corporate earnings.

On March 15, the Federal Open Market Committee (“FOMC”) raised the U.S. Federal Reserve (the “Fed”) funds target rate by 25 basis points to a range of 0.75–1.0%. The hike itself had little impact on markets because several FOMC members had indicated in the weeks leading up to the meeting that a hike was likely. Looking ahead, we believe that the market is underpricing the likely pace of Fed rate hikes in 2017 and 2018, particularly now that market optimism about fiscal stimulus is waning.

Importantly, Chair Yellen noted that the FOMC’s baseline forecast of two additional rate increases in 2017 and three more in 2018 was not conditioned on expectations for fiscal stimulus. Rather, it reflected a need to gradually remove accommodation due to the fact that the Fed has essentially achieved its dual mandate objectives for employment and inflation. Fiscal easing, she explained, could result in a faster pace of tightening, if it materializes. Markets are skeptical and are pricing in only 1.5 more rate hikes in 2017 and another 1.5 rate hikes in 2018, according to fed funds futures contracts. We expect that the Fed will deliver three more rate hikes in 2017 and another four in 2018.

THE RYDEX FUNDS ANNUAL REPORT | 3

ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2017

We expect to see equity and credit investors take more chips off the table unless there is concrete progress on fiscal legislation in Washington, particularly as the Fed demonstrates its desire to tighten even without fiscal stimulus. While we are optimistic about the near-term U.S. economic outlook, current valuations and growing political risks warrant a more defensive stance.

For the 12 months ended March 31, 2017, the S&P 500^® Index* returned 17.17%. The MSCI Europe-Australasia-Far East (“EAFE”) Index* returned 11.67%. The return of the MSCI Emerging Markets Index* was 17.22%.

In the bond market, the Bloomberg Barclays U.S. Aggregate Bond Index* posted a 0.44% return for the period, while the Bloomberg Barclays U.S. Corporate High Yield Index* returned 16.39%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.35% 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.

Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, mortgage-backed securities or “MBS” (agency fixed-rate and hybrid adjustable-rate mortgage, or “ARM”, pass-throughs), asset-backed securities (“ABS”), and commercial mortgage-backed securities (“CMBS”) (agency and non-agency).

Bloomberg Barclays U.S. Corporate High Yield Index measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. 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.

4 | 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, 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, 2016 and ending March 31, 2017.

The following tables illustrate the 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 fifth 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.

THE RYDEX FUNDS ANNUAL REPORT | 5

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(continued)

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 the Fund’s expenses, including annual expense ratios for periods up to 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 Fund’s prospectus.

6 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 1. Based on actual Fund return3
NASDAQ-100® Fund
Investor Class	1.29%	11.39%	$ 1,000.00	$ 1,113.90	$ 6.80
A-Class	1.54%	11.27%	1,000.00	1,112.70	8.11
C-Class	2.29%	10.85%	1,000.00	1,108.50	12.04
H-Class	1.54%	11.28%	1,000.00	1,112.80	8.11
Table 2. Based on hypothetical 5% return (before expenses)
NASDAQ-100® Fund
Investor Class	1.29%	5.00%	$ 1,000.00	$ 1,018.50	$ 6.49
A-Class	1.54%	5.00%	1,000.00	1,017.25	7.75
C-Class	2.29%	5.00%	1,000.00	1,013.51	11.50
H-Class	1.54%	5.00%	1,000.00	1,017.25	7.75

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 182/365 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2016 to March 31, 2017.

THE RYDEX FUNDS ANNUAL REPORT | 7

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, 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 21.21%, while the NASDAQ-100^® Index returned 22.77% over the same period.

The Information Technology sector contributed the most to the performance of the underlying index, followed by the Consumer Discretionary sector. No sector detracted. The Real Estate sector contributed the least to the performance of the underlying index, followed by the Telecommunications Services sector.

Apple, Inc., Amazon.com, Inc., and Microsoft Corp. were the holdings contributing the most to the performance of the underlying index for the year. Gilead Sciences, Inc., Baidu, Inc. ADR Class A, and Stericycle, Inc. 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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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

8 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2017

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.	9.4%
Microsoft Corp.	6.4%
Amazon.com, Inc.	5.3%
Facebook, Inc. — Class A	4.2%
Alphabet, Inc. — Class C	3.6%
Alphabet, Inc. — Class A	3.1%
Comcast Corp. — Class A	2.2%
Intel Corp.	2.1%
Cisco Systems, Inc.	2.1%
Amgen, Inc.	1.5%
Top Ten Total	39.9%
“Ten Largest Holdings” excludes any temporary cash or derivative investments.

THE RYDEX FUNDS ANNUAL REPORT | 9

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(continued) March 31, 2017

Cumulative Fund Performance*

 

 

10 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
Investor Class Shares	21.21%	14.65%	11.66%
A-Class Shares	20.76%	14.34%	11.35%
A-Class Shares with sales charge†	15.02%	13.23%	10.80%
C-Class Shares	19.98%	13.52%	10.57%
C-Class Shares with CDSC‡	18.98%	13.52%	10.57%
NASDAQ-100 Index	22.77%	16.06%	12.99%

	1 Year	Since Inception (09/18/14)
H-Class Shares	20.92%	11.43%
NASDAQ-100 Index	22.77%	13.14%

*	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.

THE RYDEX FUNDS ANNUAL REPORT | 11

SCHEDULE OF INVESTMENTS	March 31, 2017
NASDAQ-100® FUND

	Shares		Value
COMMON STOCKS† - 78.1%
Technology - 29.2%
Apple, Inc.		612,856	$	88,042,892
Microsoft Corp.		902,663		59,449,385
Intel Corp.		552,284		19,920,884
Broadcom Ltd.		46,846		10,257,400
QUALCOMM, Inc.		172,535		9,893,157
Texas Instruments, Inc.		116,769		9,406,911
Adobe Systems, Inc.*		57,714		7,510,323
NVIDIA Corp.		66,175		7,208,443
Applied Materials, Inc.		126,137		4,906,729
Activision Blizzard, Inc.		87,824		4,378,904
Cognizant Technology Solutions Corp. — Class A*		70,870		4,218,182
Micron Technology, Inc.*		128,812		3,722,667
Intuit, Inc.		29,879		3,465,665
Electronic Arts, Inc.*		36,009		3,223,526
Analog Devices, Inc.		36,119		2,959,952
Fiserv, Inc.*		25,063		2,890,015
Western Digital Corp.		33,650		2,777,135
NetEase, Inc. ADR		8,765		2,489,260
Paychex, Inc.		41,917		2,468,911
Lam Research Corp.		19,022		2,441,664
Cerner Corp.*		38,515		2,266,608
Autodesk, Inc.*		25,997		2,247,961
Skyworks Solutions, Inc.		21,601		2,116,466
Check Point Software Technologies Ltd.*		20,030		2,056,280
Microchip Technology, Inc.		25,282		1,865,306
KLA-Tencor Corp.		18,308		1,740,542
Xilinx, Inc.		29,078		1,683,325
Seagate Technology plc		34,480		1,583,666
CA, Inc.		48,824		1,548,697
Citrix Systems, Inc.*		18,264		1,523,035
Maxim Integrated Products, Inc.		33,022		1,484,669
Akamai Technologies, Inc.*		20,231		1,207,791
Total Technology				272,956,351
Communications - 29.1%
Amazon.com, Inc.*		55,739		49,414,853
Facebook, Inc. — Class A*		275,109		39,079,233
Alphabet, Inc. — Class C*		40,526		33,618,749
Alphabet, Inc. — Class A*		34,707		29,424,595
Comcast Corp. — Class A		552,835		20,781,067
Cisco Systems, Inc.		584,975		19,772,155
Charter Communications, Inc. — Class A*,1		31,410		10,281,121
Priceline Group, Inc.*,1		5,744		10,224,148
Netflix, Inc.*		50,277		7,431,443
T-Mobile US, Inc.*		96,548		6,236,036
Baidu, Inc. ADR*		32,146		5,545,828
Yahoo!, Inc.*		111,453		5,172,534
eBay, Inc.*		126,979		4,262,685
Twenty-First Century Fox, Inc. — Class A		122,922		3,981,443
JD.com, Inc. ADR*		107,136		3,333,001
Twenty-First Century Fox, Inc. — Class B		93,276		2,964,311
Sirius XM Holdings, Inc.1		550,784		2,836,538
Liberty Global plc — Class C*		73,674		2,581,537
Ctrip.com International Ltd. ADR*		49,003		2,408,497
Symantec Corp.		72,287		2,217,765
Expedia, Inc.		16,004		2,019,225
Viacom, Inc. — Class B		40,588		1,892,213
DISH Network Corp. — Class A*		26,507		1,682,929
Vodafone Group plc ADR		50,847		1,343,886
Liberty Global plc — Class A*		29,603		1,061,860
Discovery Communications, Inc. — Class C*		26,809		758,962
TripAdvisor, Inc.*		15,344		662,247

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NASDAQ-100® FUND

	Shares		Value
Discovery Communications, Inc. — Class A*,1		17,829	$	518,646
Liberty Ventures*		9,479		421,626
Liberty Global plc LiLAC — Class C*		14,093		324,703
Liberty Global plc LiLAC — Class A*		5,864		130,415
Total Communications				272,384,251
Consumer, Non-cyclical - 12.6%
Amgen, Inc.		86,026		14,114,285
Kraft Heinz Co.		142,175		12,910,913
Celgene Corp.*		90,875		11,307,576
Gilead Sciences, Inc.		152,680		10,370,026
Mondelez International, Inc. — Class A		178,326		7,682,284
Biogen, Inc.*		25,226		6,897,293
PayPal Holdings, Inc.*		141,059		6,068,358
Automatic Data Processing, Inc.		52,437		5,369,024
Regeneron Pharmaceuticals, Inc.*		12,168		4,715,222
Express Scripts Holding Co.*		70,755		4,663,462
Intuitive Surgical, Inc.*,1		4,531		3,472,876
Alexion Pharmaceuticals, Inc.*		26,237		3,180,974
Vertex Pharmaceuticals, Inc.*		29,020		3,173,337
Monster Beverage Corp.*		66,696		3,079,354
Incyte Corp.*		22,125		2,957,449
Illumina, Inc.*		17,090		2,916,238
Mylan N.V.*		62,506		2,437,109
BioMarin Pharmaceutical, Inc.*		20,193		1,772,542
Dentsply Sirona, Inc.		26,969		1,683,944
Shire plc ADR		9,602		1,672,956
IDEXX Laboratories, Inc.*		10,277		1,588,927
Verisk Analytics, Inc. — Class A*		19,431		1,576,631
Henry Schein, Inc.*		9,251		1,572,392
Cintas Corp.		12,270		1,552,646
Hologic, Inc.*		32,625		1,388,194
Total Consumer, Non-cyclical				118,124,012
Consumer, Cyclical - 6.5%
Walgreens Boots Alliance, Inc.		126,087		10,471,525
Starbucks Corp.		170,241		9,940,372
Costco Wholesale Corp.		51,308		8,603,839
Tesla, Inc.*,1		17,517		4,874,981
Marriott International, Inc. — Class A		44,804		4,219,641
Ross Stores, Inc.		46,038		3,032,523
O’Reilly Automotive, Inc.*		10,704		2,888,367
PACCAR, Inc.		40,989		2,754,461
American Airlines Group, Inc.		58,891		2,491,089
Dollar Tree, Inc.*		27,576		2,163,613
Ulta Beauty, Inc.*		7,269		2,073,337
Fastenal Co.		33,789		1,740,134
Hasbro, Inc.1		14,519		1,449,286
Norwegian Cruise Line Holdings Ltd.*		26,554		1,347,084
Tractor Supply Co.		15,270		1,053,172
Mattel, Inc.		40,001		1,024,426
Liberty Interactive Corporation QVC Group — Class A*		49,669		994,373
Total Consumer, Cyclical				61,122,223
Industrial - 0.7%
CSX Corp.		108,219		5,037,595
J.B. Hunt Transport Services, Inc.		13,002		1,192,803
Total Industrial				6,230,398
Total Common Stocks
(Cost $419,457,278)				730,817,235

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NASDAQ-100® FUND

	Shares		Value
MUTUAL FUNDS† - 2.6%
Guggenheim Strategy Fund I2		500,094	$	12,527,345
Guggenheim Strategy Fund II2		479,686		11,992,159
Total Mutual Funds
(Cost $24,317,833)				24,519,504
	Face Amount
FEDERAL AGENCY NOTES†† - 8.6%
Freddie Mac3
1.38% due 05/30/18	$	29,000,000		29,020,967
1.13% due 01/26/224		10,000,000		9,999,730
0.80% due 10/27/17		7,500,000		7,491,600
0.75% due 10/25/194		7,412,000		7,399,659
0.75% due 10/28/194		5,750,000		5,736,844
0.63% due 11/16/184		5,000,000		4,998,910
0.75% due 10/26/184		2,000,000		1,997,254
Total Freddie Mac				66,644,964
Farmer Mac5
5.13% due 04/19/17		13,534,000		13,560,730
Total Federal Agency Notes
(Cost $ 80,244,351)				80,205,694
FEDERAL AGENCY DISCOUNT NOTES†† - 2.1%
Fannie Mae3
0.52% due 04/03/17		20,000,000		19,999,222
Total Federal Agency Discount Notes
(Cost $ 19,999,222)				19,999,222
U.S. TREASURY BILLS†† - 0.7%
U.S. Treasury Bill
0.52% due 06/01/176,9		5,000,000		4,994,245
0.52% due 05/11/176,7		1,500,000		1,498,862
Total U.S. Treasury Bills
(Cost $6,494,676)				6,493,107

REPURCHASE AGREEMENTS††,8 - 6.8%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17		31,770,476		31,770,476
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		20,467,730		20,467,730
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/179		8,308,110		8,308,110
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		3,137,407		3,137,407
Total Repurchase Agreements
(Cost $63,683,723)				63,683,723
	Shares
SECURITIES LENDING COLLATERAL†,10 - 2.0%
First American Government Obligations Fund — Class Z, 0.61%11		18,478,520		18,478,520
Total Securities Lending Collateral
(Cost $18,478,520)				18,478,520
Total Investments - 100.9%
(Cost $632,675,603)			$	944,197,005
Other Assets & Liabilities, net - (0.9)%				(8,313,391	)
Total Net Assets - 100.0%			$	935,883,614

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
NASDAQ-100® FUND

	Contracts		Unrealized Gain (Loss)
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 NASDAQ-100 Index Mini Futures Contracts (Aggregate Value of Contracts $37,076,930)		341	$	279,534
	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
BNP Paribas April 2017 NASDAQ-100 Index Swap 1.23%12, Terminating 04/28/17 (Notional Value $53,887,043)		9,913	$	372,332
Goldman Sachs International April 2017 NASDAQ-100 Index Swap 1.56%12, Terminating 04/27/17 (Notional Value $9,932,342)		1,827		112,635
Barclays Bank plc April 2017 NASDAQ-100 Index Swap 1.26%12, Terminating 04/28/17 (Notional Value $104,549,662)		19,232		(78,369	)
(Total Notional Value $168,369,047)			$	406,598

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
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	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Affiliated issuer — See Note 10.
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 step up/step down bond. The coupon increases or decreases at regular intervals until the bond reaches full maturity.
5	The issuer operates under a Congressional charter; its securities are neither issued nor guaranteed by the U.S. Government.
6	Rate indicated is the effective yield at the time of purchase.
7	All or a portion of this security is pledged as futures collateral at March 31, 2017.
8	Repurchase Agreements — See Note 5.
9	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
10	Securities lending collateral — See Note 6.
11	Rate indicated is the 7 day yield as of March 31, 2017.
12	Total Return based on NASDAQ-100 Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	ADR — American Depositary Receipt
	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, 2017
NASDAQ-100® FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	730,817,235	$	—	$	—	$	—	$	—	$	730,817,235
Equity Futures Contracts		—		279,534		—		—		—		279,534
Equity Index Swap Agreements		—		—		—		484,967		—		484,967
Federal Agency Discount Notes		—		—		19,999,222		—		—		19,999,222
Federal Agency Notes		—		—		80,205,694		—		—		80,205,694
Mutual Funds		24,519,504		—		—		—		—		24,519,504
Repurchase Agreements		—		—		63,683,723		—		—		63,683,723
Securities Lending Collateral		18,478,520		—		—		—		—		18,478,520
U.S. Treasury Bills		—		—		6,493,107		—		—		6,493,107
Total	$	773,815,259	$	279,534	$	170,381,746	$	484,967	$	—	$	944,961,506
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	78,369	$	—	$	78,369

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

STATEMENT OF ASSETS AND LIABILITIES

NASDAQ-100^® FUND

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $17,975,667 of securities loaned (cost $544,674,047)	$	855,993,778
Investments in affiliated issuers, at value (cost $24,317,833)		24,519,504
Repurchase agreements, at value  (cost $63,683,723)		63,683,723
Total investments (cost $632,675,603)		944,197,005
Segregated cash with broker		4,003,427
Unrealized appreciation on swap agreements		484,967
Receivables:
Fund shares sold		7,162,192
Interest		550,221
Dividends		230,322
Securities lending income		4,966
Total assets		956,633,100
Liabilities:
Unrealized depreciation on swap agreements		78,369
Payable for:
Return of securities loaned		18,478,520
Fund shares redeemed		866,127
Management fees		580,122
Transfer agent and administrative fees		193,374
Distribution and service fees		71,845
Portfolio accounting fees		51,870
Variation margin		16,214
Swap settlement		1,550
Miscellaneous		411,495
Total liabilities		20,749,486
Commitments and contingent liabilities (Note 13)		—
Net assets	$	935,883,614
Net assets consist of:
Paid in capital	$	594,985,495
Accumulated net investment loss		—
Accumulated net realized gain on investments		28,690,585
Net unrealized appreciation on investments		312,207,534
Net assets	$	935,883,614
Investor Class:
Net assets	$	760,484,861
Capital shares outstanding		24,791,556
Net asset value per share	$	30.68
A-Class:
Net assets	$	63,311,183
Capital shares outstanding		2,222,003
Net asset value per share	$	28.49
Maximum offering price per share (Net asset value divided by 95.25%)	$	29.91
C-Class:
Net assets	$	58,646,527
Capital shares outstanding		2,308,257
Net asset value per share	$	25.41
H-Class:
Net assets	$	53,441,043
Capital shares outstanding		1,876,106
Net asset value per share	$	28.49

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

STATEMENT OF OPERATIONS

NASDAQ-100^® FUND

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $5,516)	$	7,518,991
Interest		723,429
Dividends from securities of affiliated issuers		617,075
Income from securities lending, net		26,481
Total investment income		8,885,976
Expenses:
Management fees		6,250,233
Transfer agent and administrative fees		2,083,411
Distribution and service fees:
A-Class		170,502
C-Class		439,495
H-Class		120,355
Portfolio accounting fees		586,179
Custodian fees		121,176
Trustees’ fees*		73,526
Tax expense		9,580
Line of credit fees		6,184
Miscellaneous		1,602,545
Total expenses		11,463,186
Net investment loss		(2,577,210	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	91,953,130
Investments in affiliated issuer		166,753
Swap agreements		20,627,908
Futures contracts		6,372,889
Net realized gain		119,120,680
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		31,003,009
Investments in affiliated issuers		344,291
Swap agreements		(1,482,195	)
Futures contracts		(120,903	)
Net change in unrealized appreciation (depreciation)		29,744,202
Net realized and unrealized gain		148,864,882
Net increase in net assets resulting from operations	$	146,287,672

* 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 | 19

STATEMENTS OF CHANGES IN NET ASSETS

NASDAQ-100^® FUND

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(2,577,210	)	$	(2,733,517	)
Net realized gain on investments		119,120,680			139,445,638
Net change in unrealized appreciation (depreciation) on investments		29,744,202			(127,049,372	)
Net increase in net assets resulting from operations		146,287,672			9,662,749
Distributions to shareholders from:
Net realized gains
Investor Class		(11,493,337	)		(15,721,868	)
A-Class		(1,213,212	)		(2,634,742	)
C-Class		(908,738	)		(956,856	)
H-Class		(730,868	)		(6,738,531	)*
Total distributions to shareholders		(14,346,155	)		(26,051,997	)
Capital share transactions:
Proceeds from sale of shares
Investor Class		730,466,228			1,011,361,829
Advisor Class		—			94,137,245	*
A-Class		379,758,963			817,538,269
C-Class		26,908,652			26,584,585
H-Class		149,256,328			1,591,642,598	*
Distributions reinvested
Investor Class		11,102,330			15,251,133
A-Class		1,121,838			2,570,836
C-Class		870,733			931,242
H-Class		730,637			6,738,458	*
Cost of shares redeemed
Investor Class		(761,641,400	)		(1,120,085,951	)
Advisor Class		—			(139,879,099	)*
A-Class		(386,462,077	)		(827,926,638	)
C-Class		(15,520,363	)		(20,071,986	)
H-Class		(272,703,570	)		(1,453,762,548	)*
Conversion activity
Advisor Class		—			(20,538,756	)*
H-Class		—			20,538,756	*
Net increase (decrease) from capital share transactions		(136,111,701	)		5,029,973
Net decrease in net assets		(4,170,184	)		(11,359,275	)
Net assets:
Beginning of year		940,053,798			951,413,073
End of year	$	935,883,614		$	940,053,798
Accumulated net investment loss at end of year	$	—		$	—

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

STATEMENTS OF CHANGES IN NET ASSETS (concluded)

NASDAQ-100^® FUND

	Year Ended March 31, 2017			Year Ended March 31, 2016
Capital share activity:
Shares sold
Investor Class		26,388,585			38,934,513
Advisor Class		—			4,004,926	*
A-Class		15,502,252			34,504,136
C-Class		1,153,374			1,215,431
H-Class		5,959,584			66,106,678	*
Shares issued from reinvestment of distributions
Investor Class		407,126			569,923
A-Class		44,254			102,833
C-Class		38,409			41,297
H-Class		28,833			269,863	*
Shares redeemed
Investor Class		(27,904,023	)		(43,913,512	)
Advisor Class		—			(5,986,255	)*
A-Class		(15,841,438	)		(35,068,368	)
C-Class		(682,673	)		(953,984	)
H-Class		(11,346,835	)		(60,544,558	)*
Conversion activity
Advisor Class		—			(924,136	)*
H-Class		—			897,086	*
Net decrease in shares		(6,252,552	)		(744,127	)

* 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 | 21

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	25.75		$	25.38		$	21.38		$	18.38		$	17.92
Income (loss) from investment operations:
Net investment income (loss)a		(.06	)		(.05	)		(.01	)		.02			.02
Net gain (loss) on investments (realized and unrealized)		5.47			.96			4.39			5.01			.44
Total from investment operations		5.41			.91			4.38			5.03			.46
Less distributions from:
Net realized gains		(.48	)		(.54	)		(.38	)		(2.03	)		—
Total distributions		(.48	)		(.54	)		(.38	)		(2.03	)		—
Net asset value, end of period	$	30.68		$	25.75		$	25.38		$	21.38		$	18.38
Total Returnb		21.21	%		3.49	%		20.53	%		27.74	%		2.57	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	760,485		$	667,018		$	769,257		$	632,598		$	461,269
Ratios to average net assets:
Net investment income (loss)		(0.21	%)		(0.19	%)		(0.05	%)		0.10	%		0.13	%
Total expensesc		1.29	%		1.25	%		1.26	%		1.29	%		1.26	%
Portfolio turnover rate		72	%		228	%		267	%		141	%		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.

A-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	24.04		$	23.78		$	20.10		$	17.42		$	17.03
Income (loss) from investment operations:
Net investment income (loss)a		(.13	)		(.10	)		(.06	)		(.03	)		(.02	)
Net gain (loss) on investments (realized and unrealized)		5.06			.90			4.12			4.74			.41
Total from investment operations		4.93			.80			4.06			4.71			.39
Less distributions from:
Net realized gains		(.48	)		(.54	)		(.38	)		(2.03	)		—
Total distributions		(.48	)		(.54	)		(.38	)		(2.03	)		—
Net asset value, end of period	$	28.49		$	24.04		$	23.78		$	20.10		$	17.42
Total Returnb		20.76	%		3.26	%		20.24	%		27.42	%		2.29	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	63,311		$	60,499		$	70,821		$	21,751		$	23,656
Ratios to average net assets:
Net investment income (loss)		(0.51	%)		(0.42	%)		(0.29	%)		(0.14	%)		(0.09	%)
Total expensesc		1.53	%		1.51	%		1.50	%		1.54	%		1.52	%
Portfolio turnover rate		72	%		228	%		267	%		141	%		94	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	21.62		$	21.60		$	18.42		$	16.22		$	15.97
Income (loss) from investment operations:
Net investment income (loss)a		(.28	)		(.26	)		(.21	)		(.16	)		(.13	)
Net gain (loss) on investments (realized and unrealized)		4.55			.82			3.77			4.39			.38
Total from investment operations		4.27			.56			3.56			4.23			.25
Less distributions from:
Net realized gains		(.48	)		(.54	)		(.38	)		(2.03	)		—
Total distributions		(.48	)		(.54	)		(.38	)		(2.03	)		—
Net asset value, end of period	$	25.41		$	21.62		$	21.60		$	18.42		$	16.22
Total Returnb		19.98	%		2.48	%		19.37	%		26.46	%		1.57	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	58,647		$	38,900		$	32,324		$	19,175		$	13,015
Ratios to average net assets:
Net investment income (loss)		(1.21	%)		(1.19	%)		(1.05	%)		(0.89	%)		(0.84	%)
Total expensesc		2.28	%		2.26	%		2.25	%		2.29	%		2.26	%
Portfolio turnover rate		72	%		228	%		267	%		141	%		94	%

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

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, 2017			Year Ended March 31, 2016			Period Ended March 31, 2015d
Per Share Data
Net asset value, beginning of period	$	24.00		$	23.76		$	22.91
Income (loss) from investment operations:
Net investment income (loss)a		(.14	)		(.13	)		.01
Net gain (loss) on investments (realized and unrealized)		5.11			.91			1.22
Total from investment operations		4.97			.78			1.23
Less distributions from:
Net realized gains		(.48	)		(.54	)		(.38	)
Total distributions		(.48	)		(.54	)		(.38	)
Net asset value, end of period	$	28.49		$	24.00		$	23.76
Total Returnb		20.92	%		3.18	%		5.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	53,441		$	173,638		$	12,009
Ratios to average net assets:
Net investment income (loss)		(0.57	%)		(0.51	%)		0.07	%
Total expensesc		1.54	%		1.51	%		1.47	%
Portfolio turnover rate		72	%		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.

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

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, 2017, 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.

Security Investors, LLC, which operates under the name Guggenheim Investments (“GI”), provides advisory services. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI and GFD are affiliated entities.

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

26 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

liabilities, 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 and/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, to 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 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.

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

THE RYDEX FUNDS ANNUAL REPORT | 27

NOTES TO FINANCIAL STATEMENTS (continued)

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 values of OTC swap agreements entered into by the Fund are accounted for using the unrealized gains or losses on the agreements that are determined by marking the agreements to the last quoted value of the index that the swaps pertain to at the close of the NYSE. The swaps’ values are then adjusted to include dividends accrued, 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 using methods established or ratified by the Board.

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 market prices; sale prices; broker quotes; and models which derive prices based on inputs such as prices of securities with comparable maturities and characteristics, or based on inputs such as anticipated cash flows or collateral, spread over Treasuries, and other information analysis.

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.

28 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 an 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 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 0.82% at March 31, 2017.

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

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NOTES TO FINANCIAL STATEMENTS (continued)

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.

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 Fund 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.

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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	$	37,034,613

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.

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	$	128,402,349

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, 2017:

Derivative Investment Type	Asset Derivatives	Liability Derivatives
Equity contracts		Variation margin
	Unrealized appreciation on swap agreements	Unrealized depreciation on swap agreements

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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, 2017:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Total Value at March 31, 2017
NASDAQ-100® Fund	$	279,534	$	484,967	$	764,501

Liability Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Total Value at March 31, 2017
NASDAQ-100® Fund	$	—	$	78,369	$	78,369

* Includes cumulative appreciation (depreciation) of futures contracts as reported on the Schedule of Investments. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.

The following is a summary of the location of derivative investments on the Fund’s Statement of Operations for the year ended March 31, 2017:

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, 2017:

Realized Gain (Loss) on Derivative Investments Recognized on the Statement of Operations
Fund	Futures Equity Contracts		Swaps Equity Contracts		Total
NASDAQ-100® Fund	$	6,372,889	$	20,627,908	$	27,000,797

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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	$	(120,903	)	$	(1,482,195	)	$	(1,603,098	)

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.

GI 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 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, 2017, GFD retained sales charges of $252,227 relating to sales of A-Class shares of the Trust.

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NOTES TO FINANCIAL STATEMENTS (continued)

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

On October 4, 2016, Rydex Fund Services, LLC (“RFS”) was purchased by MUFG Investor Services (“MUIS”) and as of that date RFS ceased to be an affiliate of GI. In connection with its acquisition, RFS changed its name to MUFG Investor Services (US), LLC (“MUIS”). This change had no impact on the financial statements of the Trust.

MUIS acts as the Trust’s administrator, transfer agent and accounting agent. As administrator, transfer agent and accounting agent, MUIS is responsible for maintaining the books and records of the Trust’s securities and cash. For providing the aforementioned services, MUIS is entitled to receive a monthly fee equal to an annual percentage of the Fund’s average daily net assets subject to certain minimum monthly fees and out of pocket expenses.

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.

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

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NOTES TO FINANCIAL STATEMENTS (continued)

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, 2017, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement	Face Value		Repurchase Price		Collateral	Par Value		Fair Value
RBC Capital Markets LLC					U.S. Treasury Note
0.72%					2.00%
Due 04/03/17	$	157,196,814	$	157,206,245	05/31/21	$	157,319,700	$	160,340,757
HSBC Securities, Inc.					U.S. Treasury Strips
0.68%					0.00%
Due 04/03/17		101,272,070		101,277,809	11/15/42 - 05/15/43		229,169,400		103,297,534
Mizuho Securities LLC					U.S. Treasury Bill
0.71%					0.00%
Due 04/03/17		54,250,554		54,253,764	01/04/18		55,734,200		55,335,700
UMB Financial Corp.					Federal Farm Credit Bank
0.68%					0.60% - 0.85%
Due 04/03/17		15,523,545		15,524,424	04/05/17 - 04/25/17		14,784,000		14,831,151
					Federal Home Loan Bank
					0.88%
					05/24/17		1,000,000		1,003,157
					Total UMB Financial Corp.		15,784,000		15,834,308

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, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.

6. Portfolio Securities Loaned

The Fund may lend its securities to approved brokers to earn additional income. Security lending income shown on the Statement of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Fund act as the lender, U.S. Bank acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Fund receives cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Fund’s securities lending agreement

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NOTES TO FINANCIAL STATEMENTS (continued)

with U.S. Bank, cash collateral and proceeds are invested in the First American Government Obligations Fund — Class Z. The Fund bears the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Fund could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Fund has the right under the securities lending agreement to recover the securities from the borrower on demand. Securities lending transactions are accounted for as secured borrowings. The remaining contractual maturity of the securities lending agreement is overnight and continuous.

At March 31, 2017, the Fund participated in securities lending transactions, which are subject to enforceable netting arrangements, as follows:

	Gross Amounts Not Offset in the Statement of Assets and Liabilities							Securities Lending Collateral
Fund	Value of Securities Loaned		Collateral Received(a)			Net Amount		Cash Collateral Invested		Cash Collateral Uninvested		Total Collateral
NASDAQ-100® Fund	$	17,975,667	$	(17,975,667	)	$	—	$	18,478,520	$	—	$	18,478,520

^(a) Actual collateral received by the Fund is greater than the amount shown due to over collateralization.

In the event of counterparty default, the Fund has the right to collect the collateral to offset losses incurred. There is potential loss to the Fund in the event the Fund is delayed or prevented from exercising its right 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 Fund seeks to assert its rights. GI, acting under the supervision of the Board, reviews the value of the collateral and the creditworthiness of those banks and dealers to evaluate potential risks.

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 from 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

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NOTES TO FINANCIAL STATEMENTS (continued)

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, are 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.

The following tables present 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	$	484,967	$	—	$	484,967	$	—	$	—	$	484,967

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NOTES TO FINANCIAL STATEMENTS (continued)

								Gross Amounts Not Offset in the Statement of Assets and Liabilities
Fund	Instrument	Gross Amounts of Recognized Liabilities1		Gross Amounts Offset in the Statement of Assets and Liabilities		Net Amount of Liabilities Presented on the Statement of Assets and Liabilities		Financial Instruments		Cash Collateral Pledged		Net Amount
NASDAQ-100® Fund	Swap equity contracts	$	78,369	$	—	$	78,369	$	78,369	$	—	$	—

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, 2017 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
NASDAQ-100® Fund	$	4,776,285	$	9,569,870	$	14,346,155

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

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

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NOTES TO FINANCIAL STATEMENTS (continued)

The tax character of distributable earnings/(accumulated losses) at March 31, 2017 was as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation		Capital Loss Carryforward & Other Losses
NASDAQ-100® Fund	$	19,093,596	$	45,533,323	$	276,271,200	$	—

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. 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 and such capital loss carryforwards will retain their character as either short-term or long-term capital losses. As of March 31, 2017, the Fund had no capital loss carryforwards .

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 net operating losses and utilization of earnings and profits on shareholder redemptions, mark-to-market on futures contracts and losses deferred due to wash sales . 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 Statement 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 Loss
NASDAQ-100® Fund	$	52,812,344	$	2,577,210	$	(55,389,554	)

At March 31, 2017, 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	$	668,332,402	$	279,071,162	$	(3,206,559	)	$	275,864,603

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NOTES TO FINANCIAL STATEMENTS (continued)

9. Securities Transactions

For the year ended March 31, 2017, 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	$	534,847,354	$	639,712,936

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 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, 2017, 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	$	125,961,959	$	185,233,037	$	42,981,692

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 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, 2016, is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at https://www.sec.gov/Archives/edgar/data/1601445/000089180416001923/gug65857-ncsr.htm.

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NOTES TO FINANCIAL STATEMENTS (continued)

Transactions during the year ended March 31, 2017, in which the portfolio company is an “affiliated person,” were as follows:

Affiliated issuers by Fund	Value 03/31/16		Additions		Reductions			Value 03/31/17		Shares 03/31/17		Investment Income		Realized Gain
NASDAQ-100® Fund
Guggenheim Strategy Fund I	$	63,012,120	$	50,649,483	$	(101,445,000	)	$	12,527,345		500,094	$	337,780	$	132,031
Guggenheim Strategy Fund II		36,088,986		13,202,872		(37,500,000	)		11,992,159		479,686		279,295		34,722
	$	99,101,106	$	63,852,355	$	(138,945,000	)	$	24,519,504			$	617,075	$	166,753

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, 2017. 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 1.58% for the year ended March 31, 2017. The Fund did not have any borrowings outstanding under this agreement at March 31, 2017.

Fund	Average Daily Balance
NASDAQ-100® Fund	$	406,598

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 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.

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 Tribune insolvent. The

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NOTES TO FINANCIAL STATEMENTS (continued)

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 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, their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments. On April 12, 2016, the Plaintiffs in the SLCFC actions filed a petition seeking rehearing en banc before the appeals court. On July 22, 2016, the appeals court denied the petition. On September 9, 2016, the plaintiffs filed a petition for writ of certiorari in the U.S. Supreme Court challenging the Second Circuit’s decision that the safe harbor of Section 546(e) applied to their claims. The shareholder defendants, including the Funds, filed a joint brief in opposition to the petition for certiorari on October 24, 2016. The Supreme Court has not yet granted or denied the petition for certiorari.

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. On January 6, 2017, the United States District Court for the Southern District of New York granted the shareholder defendants’ motion to dismiss the intentional fraudulent conveyance claim in the FitzSimons action. In dismissing the intentional fraudulent conveyance claim, the Court denied the plaintiff’s request to amend the complaint. The plaintiff requested that the Court direct entry of a final judgment in order to make the order immediately appealable. On February 23, 2017, the Court issued an order stating that it intends to permit an interlocutory appeal of the dismissal order, but will wait to do so until it has resolved outstanding motions to dismiss filed by other defendants. Accordingly, the timing of the appeal is uncertain.

42 | THE RYDEX FUNDS ANNUAL REPORT

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”). Its funds may also be putative members of the proposed defendant classes in Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adv. Pro. No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust Action”) and Weisfelner, as Trustee of the LB Creditor Trust, v. Reichman (In re Lyondell Chemical Co.), Adv. Pro. No. 12-1570 (Bankr. S.D.N.Y.) (“Reichman”).

Similar to the claims made in the Tribune matter, the Weisfelner complaints seek to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008. The Creditor Trust Action and Reichman allege claims against the former Lyondell shareholders under state law for both constructive fraudulent transfer and intentional fraudulent transfer. The Litigation Trust Action alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On April 7, 2014, the plaintiff filed a Third Amended Complaint in the Creditor Trust Action, a Second Amended Complaint in the Litigation Trust Action, and an Amended Complaint in Reichman.

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 these lawsuits. The Bankruptcy Court held oral argument on the motion 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 intentional fraudulent transfer claims in the Creditor Trust Action, the Litigation Trust Action, and in Reichman, but denied the motion to dismiss the constructive fraudulent transfer claims in the Creditor Trust

THE RYDEX FUNDS ANNUAL REPORT | 43

NOTES TO FINANCIAL STATEMENTS (concluded)

Action and in Reichman. The Bankruptcy Court entered final judgment dismissing the Litigation Trust Action, but the plaintiff 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 Action and Reichman in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. On July 20, 2016, the Bankruptcy Court issued a report and recommendation granting the defendants’ motion to dismiss. The U.S. District Court for the Southern District of New York has not yet accepted the Bankruptcy Court’s recommendation or entered a final judgment.

On July 27, 2016, the District Court reversed the Bankruptcy Court and reinstated the federal law intentional fraudulent transfer claim in the Litigation Trust Action and remanded to the Bankruptcy Court for further proceedings. The District Court found that the fraudulent intent that mattered was that of Lyondell’s CEO, not its board, because the CEO’s intent could be imputed to Lyondell under Delaware law agency principles. The District Court did note, however, that plaintiff faces a high standard for proving “actual intent” to harm creditors, and that it remains to be seen whether plaintiff will be able to make this showing. On August 11, 2016, the shareholder defendants filed a motion for reconsideration and/or to certify an interlocutory appeal of the District Court’s opinion. On October 5, 2016, the District Court denied the motion for reconsideration and/or to certify an interlocutory appeal. In light of this ruling, the federal intentional fraudulent conveyance claim will move forward before the Bankruptcy Court, but a schedule for that case has not yet been set.

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.

44 | 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 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, 2017, 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, 2017, 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, 2017, 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.

Tysons, Virginia
May 30, 2017

THE RYDEX FUNDS ANNUAL REPORT | 45

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	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
NASDAQ-100® Fund	100.00%

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2017, 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, 2017, 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	$	9,569,870	$	52,812,344

46 | THE RYDEX FUNDS ANNUAL REPORT

OTHER INFORMATION (Unaudited)(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 https://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 https://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 https://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 | 47

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)	President and 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).	230	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Guggenheim Partners Investment Management Holdings, LLC (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Angela Brock-Kyle***** (1959)	Trustee from August 2016 to present.	Current: Founder and Chief Executive Officer, B.O.A.R.D.S (consulting firm) Former: Senior Leader, TIAA (financial services firm) (1987-2012).	135	Infinity Property & Casualty Corporation (2014-present).

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 - continued
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.	135	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.	135	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.	135	None.

THE RYDEX FUNDS ANNUAL REPORT | 49

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).	135	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).	135	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).	135	None.
Sandra G. Sponem***** (1958)	Trustee from August 2016 to present.	Current: Senior Vice President and Chief Financial Officer, M.A. Mortenson Companies, Inc. (general contracting firm) (2007-present).	135	None.

50 | THE RYDEX FUNDS ANNUAL REPORT

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
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.
Joanna M. Catalucci (1966)	AML Officer (2016-present)	Current: Chief Compliance Officer, certain funds in the Fund Complex (2012-present); Senior Managing Director, Guggenheim Investments (2014-present); AML Officer, certain funds in the Fund Complex (2016-present). Former: Chief Compliance Officer and Secretary, certain other funds in the Fund Complex (2008-2012); Senior Vice President & Chief Compliance Officer, Security Investors, LLC and certain affiliates (2010-2012); Chief Compliance Officer and Senior Vice President, Rydex Advisors, LLC and certain affiliates (2010-2011).
James M. Howley (1972)	Assistant Treasurer (2016-present)	Current: Managing Director, Guggenheim Investments (2004-present); Assistant Treasurer, certain other funds in the Fund Complex (2006-present). Former: Manager, Mutual Fund Administration of Van Kampen Investments, Inc. (1996-2004).
Keith D. Kemp (1960)	Assistant Treasurer (2016-present)	Current: Treasurer and Assistant Treasurer, certain other funds in the Fund Complex (2010-present); Managing Director of Guggenheim Partners Investment Management, LLC (2015-present); Chief Financial Officer, Guggenheim Specialized Products, LLC (2016-present). Former: Managing Director and Director, Transparent Value, LLC (2010-2016); Director, Guggenheim Partners Investment Management, LLC (2010-2015); Chief Operating Officer, Macquarie Capital Investment Management (2007-2009).

THE RYDEX FUNDS ANNUAL REPORT | 51

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
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).
Glenn McWhinnie (1969)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2009-present). Former: Tax Compliance Manager, Ernst & Young LLP (1996-2009).
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).
Adam J. Nelson (1979)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2015-present); Assistant Treasurer, certain other funds in the Fund Complex (2015-present). Former: Assistant Vice President and Fund Administration Director, State Street Corporation (2013-2015); Fund Administration Assistant Director, State Street (2011-2013); Fund Administration Manager, State Street (2009-2011).

52 | 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
Kimberly J. Scott (1974)	Assistant Treasurer (2016-present)	Current: Director, Guggenheim Investments (2012-present); Assistant Treasurer, certain other funds in the Fund Complex (2012-present). Former: Financial Reporting Manager, Invesco, Ltd. (2010-2011); Vice President/Assistant Treasurer, Mutual Fund Administration for Van Kampen Investments, Inc./Morgan Stanley Investment Management (2009-2010); Manager of Mutual Fund Administration, Van Kampen Investments, Inc./Morgan Stanley Investment Management (2005-2009).
John L. Sullivan (1955)	Chief Financial Officer and Treasurer (2016-present)	Current: CFO, Chief Accounting Officer and Treasurer, certain other funds in the Fund Complex (2010-present); Senior Managing Director, Guggenheim Investments (2010-present). Former: Managing Director and CCO, each of the funds in the Van Kampen Investments fund complex (2004-2010); Managing Director and Head of Fund Accounting and Administration, Morgan Stanley Investment Management (2002-2004); CFO and Treasurer, Van Kampen Funds (1996-2004).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 227 West Monroe Street, Chicago, Illinois 60606.
**	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.
****	Certain of the Trustees may serve as directors on the boards of companies not required to be disclosed above, including certain non-profit companies and charitable foundations.
*****	Mses. Brock-Kyle and Sponem commence serving as independent Trustees effective August 18, 2016.

THE RYDEX FUNDS ANNUAL REPORT | 53

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Guggenheim Investments as used herein refers to Guggenheim Partners, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Investment Management, LLC, Guggenheim Funds Distributors, LLC and Security Investors, LLC as well as the funds in the Guggenheim Funds complex (the “funds”).

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 personal information about you, we hold ourselves to high standards in its safekeeping and use. This means, most importantly, that we do not sell client or account information to anyone—whether you are a current or former Guggenheim Investments client.

The Information We Collect About You and How We Collect It

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 Funds or one of the Guggenheim affiliated companies. “Nonpublic personal information” is personally identifiable information about you. For example it includes 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 Share Your Personal Information

As a matter of policy, we do not disclose your nonpublic personal information to nonaffiliated third parties except as required or permitted by law. 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 your personal 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. In connection with servicing your accounts or 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 funds or the services offered through another Guggenheim Investments

54 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)(concluded)

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 personal 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 share personal information about you if we are compelled by law to do so, if you direct us to do so with your consent, or in other circumstances as permitted by law.

How We Safeguard Your Personal Information

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Guggenheim Investments, access to such information is limited to those who need it to perform their jobs such as servicing your account, resolving problems or informing you of new products and services.

THE RYDEX FUNDS ANNUAL REPORT | 55

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3.31.2017

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

GuggenheimInvestments.com RSTF-ANN-0317x0318

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	36
INVERSE EMERGING MARKETS 2x STRATEGY FUND	45
EMERGING MARKETS BOND STRATEGY FUND	52
NOTES TO FINANCIAL STATEMENTS	60
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	77
OTHER INFORMATION	78
INFORMATION ON BOARD OF TRUSTEES AND OFFICERS	79
GUGGENHEIM INVESTMENTS PRIVACY POLICIES	83

THE RYDEX FUNDS ANNUAL REPORT | 1

March 31, 2017

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, 2017.

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 and Chief Executive Officer
April 30, 2017

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, tariffs 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.

2 | THE RYDEX FUNDS ANNUAL REPORT

March 31, 2017

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. ● Some 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. 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.

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ECONOMIC AND MARKET OVERVIEW (Unaudited) March 31, 2017

The market optimism that helped lift risk asset prices after the presidential election in November continued through the early part of 2017. The Standard & Poor’s 500^® (“S&P 500”) Index* set a new record, high yield corporate bond spreads approached cycle lows, and the 10-year Treasury yield rose to 2.63%, the highest level since 2014. Risk appetite faded as the first quarter drew to a close, however, as investors grappled with the implications of an unsuccessful healthcare reform bill and growing geopolitical risks.

Much of the rise in asset valuations since Donald Trump’s victory has been based on anticipation of his pro-growth policies coming to fruition, an outcome that is far from certain. Asset valuations could be getting a bit ahead of themselves, and becoming more sensitive to a temporary growth scare or setback, especially since the rollout of Trump’s new policies will not be smooth or easy.

Nevertheless, the underlying economy remains on a good trajectory. Tracking estimates for first-quarter real U.S. Gross Domestic Product (“GDP”) growth have fallen in recent weeks despite strong gains in consumer and business sentiment since the election. In late April, after the period ended, the initial estimate of first-quarter GDP growth was 0.7%. However, we attribute a large portion of the apparent weakness to seasonal factors that have depressed as-reported first quarter GDP growth over the past several years. In keeping with this pattern, we would expect the final first-quarter GDP number to be revised higher. More importantly, the prospects for quarterly GDP growth appear stronger going forward.

Consumer spending should benefit from solid income and wealth gains, with household net worth sitting at an all-time high. Recent job gains have been strong, and we anticipate a further acceleration of wage growth as the labor market continues to tighten. Buoyant consumer sentiment and low household debt service outlays also support our positive outlook. On the business investment side, we expect various factors to be supportive, including the uptick in global industrial production growth, the ongoing rise in U.S. oil drilling activity, the surge in small-business optimism, and the recovery in corporate earnings.

On March 15, the Federal Open Market Committee (“FOMC”) raised the U.S. Federal Reserve (the “Fed”) funds target rate by 25 basis points to a range of 0.75–1.0%. The hike itself had little impact on markets because several FOMC members had indicated in the weeks leading up to the meeting that a hike was likely. Looking ahead, we believe that the market is underpricing the likely pace of Fed rate hikes in 2017 and 2018, particularly now that market optimism about fiscal stimulus is waning.

Importantly, Chair Yellen noted that the FOMC’s baseline forecast of two additional rate increases in 2017 and three more in 2018 was not conditioned on expectations for fiscal stimulus. Rather, it reflected a need to gradually remove accommodation due to the fact that the Fed has essentially achieved its dual mandate objectives for employment and inflation. Fiscal easing, she explained, could result in a faster pace of tightening, if it materializes. Markets are skeptical and are pricing in only 1.5 more rate hikes in 2017 and another 1.5 rate hikes in 2018, according to fed funds futures contracts. We expect that the Fed will deliver three more rate hikes in 2017 and another four in 2018.

We expect to see equity and credit investors take more chips off the table unless there is concrete progress on fiscal legislation in Washington, particularly as the Fed demonstrates its desire to tighten even without fiscal stimulus. While we are optimistic about the near-term U.S. economic outlook, current valuations and growing political risks warrant a more defensive stance.

For the 12 months ended March 31, 2017, the S&P 500 Index* returned 17.17%. The MSCI Europe-Australasia-Far East (“EAFE”) Index* returned 11.67%. The return of the MSCI Emerging Markets Index* was 17.22%.

In the bond market, the Bloomberg Barclays U.S. Aggregate Bond Index* posted a 0.44% return for the period, while the Bloomberg Barclays U.S. Corporate High Yield Index* returned 16.39%. The return of the Bank of America (“BofA”) Merrill Lynch 3-Month U.S. Treasury Bill Index* was 0.35% 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.

Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including U.S. Treasuries, government-related and corporate securities, mortgage-backed securities or “MBS” (agency fixed-rate and hybrid adjustable-rate mortgage, or “ARM”, pass-throughs), asset-backed securities (“ABS”), and commercial mortgage-backed securities (“CMBS”) (agency and non-agency).

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ECONOMIC AND MARKET OVERVIEW (Unaudited)(concluded) March 31, 2017

Bloomberg Barclays U.S. Corporate High Yield Index measures the U.S. dollar-denominated, high yield, fixed-rate corporate bond market. 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.

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.

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.

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.

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A BRIEF NOTE ON THE COMPOUNDING OF RETURNS (Unaudited)

Emerging Markets 2x Strategy Fund and Inverse Emerging Markets 2x Strategy Fund described in this report are benchmarked daily to leveraged and/or inverse leveraged versions of published indices. To properly evaluate the performance of these funds, it is essential to understand the effect of mathematical compounding on their respective returns.

Because of the nonlinear effects of leverage applied over time, it is possible for a fund to perform in line with its benchmark for several individual periods in a row, yet seem to trail the benchmark over the entire period. It is also possible that a fund that performs in-line with its benchmark on a daily basis may seem to outperform its benchmark over longer periods.

An Example of Compounding

For example, consider a hypothetical fund that is designed to produce returns that correspond to 150% of an index. On the first day of a period, the index rises from a level of 100 to a level of 106, producing a 6.0% gain and an expectation that the fund will rise by 9.0%. On the same day, the fund’s net asset value per share (“NAV”) increases from $10.00 to $10.90 for a gain of 9.0% — in line with its benchmark.

On day two, assume the index falls from 106 to 99 for a loss of about 6.6%. The fund, as expected, falls 9.9% to a price of $9.82. On each day, the fund performed exactly in line with its benchmark, but for the two-day period, the fund was down 1.8%, while the index was down only 1.0%. Without taking into account the daily compounding of returns, one would expect the fund to lose 1.5% and would see the fund as trailing by 0.3% when in fact it had performed perfectly. This example is summarized in the table below.

	Index 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, 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, 2016 and ending March 31, 2017.

The following tables illustrate the Funds’ 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 fifth 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 the Funds’ expenses, including annual expense ratios for periods up to 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, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 1. Based on actual Fund return3
Long Short Equity Fund
A-Class	2.14%	1.54%	$ 1,000.00	$ 1,015.40	$ 10.75
C-Class	2.89%	1.15%	1,000.00	1,011.50	14.49
P-Class	2.14%	1.54%	1,000.00	1,015.40	10.75
Institutional Class	1.89%	1.70%	1,000.00	1,017.00	9.50
Event Driven and Distressed Strategies Fund
A-Class	1.90%	1.39%	1,000.00	1,013.90	9.54
C-Class	2.65%	1.02%	1,000.00	1,010.20	13.28
P-Class	1.90%	1.39%	1,000.00	1,013.90	9.54
Institutional Class	1.65%	1.55%	1,000.00	1,015.50	8.29
Emerging Markets 2x Strategy Fund
A-Class	1.77%	9.79%	1,000.00	1,097.90	9.26
C-Class	2.52%	9.40%	1,000.00	1,094.00	13.16
H-Class	1.77%	9.69%	1,000.00	1,096.90	9.25
Inverse Emerging Markets 2x Strategy Fund
A-Class	1.76%	(14.84%)	1,000.00	851.60	8.12
C-Class	2.47%	(15.12%)	1,000.00	848.80	11.39
H-Class	1.77%	(14.77%)	1,000.00	852.30	8.17
Emerging Markets Bond Strategy Fund
A-Class	1.58%	(1.62%)	1,000.00	983.80	7.81
C-Class	2.34%	(1.99%)	1,000.00	980.10	11.55
H-Class	1.58%	(1.65%)	1,000.00	983.50	7.81

8 | THE RYDEX FUNDS ANNUAL REPORT

ABOUT SHAREHOLDERS’ FUND EXPENSES (Unaudited)(concluded)

	Expense Ratio1	Fund Return	Beginning Account Value September 30, 2016	Ending Account Value March 31, 2017	Expenses Paid During Period2
Table 2. Based on hypothetical 5% return (before expenses)
Long Short Equity Fund
A-Class	2.14%	5.00%	$ 1,000.00	$ 1,014.26	$ 10.75
C-Class	2.89%	5.00%	1,000.00	1,010.52	14.49
P-Class	2.14%	5.00%	1,000.00	1,014.26	10.75
Institutional Class	1.89%	5.00%	1,000.00	1,015.51	9.50
Event Driven and Distressed Strategies Fund
A-Class	1.90%	5.00%	1,000.00	1,015.46	9.55
C-Class	2.65%	5.00%	1,000.00	1,011.72	13.29
P-Class	1.90%	5.00%	1,000.00	1,015.46	9.55
Institutional Class	1.65%	5.00%	1,000.00	1,016.70	8.30
Emerging Markets 2x Strategy Fund
A-Class	1.77%	5.00%	1,000.00	1,016.11	8.90
C-Class	2.52%	5.00%	1,000.00	1,012.37	12.64
H-Class	1.77%	5.00%	1,000.00	1,016.11	8.90
Inverse Emerging Markets 2x Strategy Fund
A-Class	1.76%	5.00%	1,000.00	1,016.16	8.85
C-Class	2.47%	5.00%	1,000.00	1,012.62	12.39
H-Class	1.77%	5.00%	1,000.00	1,016.11	8.90
Emerging Markets Bond Strategy Fund
A-Class	1.58%	5.00%	1,000.00	1,017.05	7.95
C-Class	2.34%	5.00%	1,000.00	1,013.26	11.75
H-Class	1.58%	5.00%	1,000.00	1,017.05	7.95

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 182/365 (to reflect the one-half year period).
3	Actual cumulative return at net asset value for the period September 30, 2016 to March 31, 2017.

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PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

LONG SHORT EQUITY FUND

OBJECTIVE: Seeks long-term capital appreciation.

For the one-year period ended March 31, 2017, the Long Short Equity Fund P-Class returned 3.53%. The Fund’s benchmark, the HFRX Equity Hedge Index, returned 5.90%.

The Fund had annualized risk of 6.6%, which was higher than the 5.1% annualized risk of the HFRX Equity Hedge Fund Index. Realized beta for the Fund came in at 0.7 relative to the benchmark for this one-year period.

On a gross return basis, risk factors contributed -1.44% to Fund performance. Risk factors that contributed positively to performance were Earnings/Price and Dividend Yield, contributing 0.65% and 0.31%, respectively. Risk factors that contributed negatively to performance included Log of Market Cap and Price Volatility, detracting 0.87% and 0.73%, respectively. The Fund’s average forecast beta of 49% was the greatest contributor at 8.93%. Stock-specific risk detracted 1.2% on a gross basis for the year.

Industry factors added 1.1% on a gross basis. Industries that contributed positively to performance were Electronics and Regional Banks, contributing 0.60% and 0.36%, respectively. Industries that contributed negatively to performance were Oil Services and Precious Metals, detracting 0.29% and 0.18%, respectively.

For the year, the Fund’s average long exposure was 88% of Fund assets, while its corresponding short exposure was -37%.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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, 2017

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	6.3%
White Mountains Insurance Group Ltd.	0.7%
Darden Restaurants, Inc.	0.6%
Stanley Black & Decker, Inc.	0.6%
AMERCO	0.6%
Clear Channel Outdoor Holdings, Inc. — Class A	0.6%
DST Systems, Inc.	0.6%
Teradyne, Inc.	0.6%
Valvoline, Inc.	0.6%
Lazard Ltd. — Class A	0.6%
Top Ten Total	11.8%
“Ten Largest Long Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	10 Year
A-Class Shares	3.54%	3.61%	1.81%
A-Class Shares with sales charge†	-1.37%	2.61%	1.32%
C-Class Shares	2.77%	2.84%	1.05%
C-Class Shares with CDSC‡	1.77%	2.84%	1.05%
P-Class Shares	3.53%	3.60%	1.81%
Russell 3000 Index	18.07%	13.18%	7.54%
S&P 500 Index	17.17%	13.30%	7.51%
HFRX Equity Hedge Index	5.90%	2.68%	-1.10%

	1 Year	5 Year	Since Inception (11/30/11)
Institutional Class Shares	3.94%	3.89%	5.07%
Russell 3000 Index	18.07%	13.18%	15.06%
S&P 500 Index	17.17%	13.30%	15.16%
HFRX Equity Hedge Index	5.90%	2.68%	3.09%

*	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.
†	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, 2017
LONG SHORT EQUITY FUND

	Shares		Value
COMMON STOCKS† - 88.0%
Financial - 24.7%
White Mountains Insurance Group Ltd.1		257	$	226,127
Lazard Ltd. — Class A1		4,092		188,191
CIT Group, Inc.		4,315		185,243
Chimera Investment Corp.1		9,158		184,809
First American Financial Corp.1		4,617		181,356
Two Harbors Investment Corp.1		18,862		180,887
AGNC Investment Corp.1		9,006		179,129
Annaly Capital Management, Inc.1		16,120		179,093
American Financial Group, Inc.1		1,850		176,527
Federated Investors, Inc. — Class B1		6,691		176,241
MFA Financial, Inc.1		21,758		175,805
Principal Financial Group, Inc.1		2,771		174,878
Starwood Property Trust, Inc.1		7,743		174,837
Mercury General Corp.1		2,865		174,736
Navient Corp.1		11,820		174,463
ProAssurance Corp.1		2,893		174,303
Cullen/Frost Bankers, Inc.1		1,955		173,937
Old Republic International Corp.1		8,422		172,483
Air Lease Corp. — Class A1		4,450		172,438
Bank of Hawaii Corp.1		2,092		172,297
SEI Investments Co.1		3,411		172,051
T. Rowe Price Group, Inc.1		2,518		171,601
American National Insurance Co.1		1,449		171,025
Axis Capital Holdings Ltd.1		2,546		170,658
BOK Financial Corp.1		2,168		169,689
Synovus Financial Corp.1		4,106		168,428
Berkshire Hathaway, Inc. — Class B*,1		1,006		167,680
East West Bancorp, Inc.1		3,240		167,216
Regions Financial Corp.1		11,490		166,950
Associated Banc-Corp.1		6,841		166,920
Commerce Bancshares, Inc.1		2,970		166,795
Eaton Vance Corp.1		3,709		166,757
Invesco Ltd.1		5,439		166,597
PacWest Bancorp1		3,123		166,331
Artisan Partners Asset Management, Inc. — Class A1		6,009		165,848
Assured Guaranty Ltd.1		4,390		162,913
Aspen Insurance Holdings Ltd.1		3,122		162,500
Popular, Inc.1		3,980		162,105
Santander Consumer USA Holdings, Inc.*,1		12,125		161,505
First Horizon National Corp.1		8,676		160,506
TCF Financial Corp.1		9,405		160,073
BB&T Corp.1		3,570		159,579
Voya Financial, Inc.1		4,196		159,280
Lincoln National Corp.1		2,398		156,949
Everest Re Group Ltd.1		601		140,520
Raymond James Financial, Inc.1		1,806		137,725
Host Hotels & Resorts, Inc.1	��	7,125		132,953
AmTrust Financial Services, Inc.1		6,596		121,762
LPL Financial Holdings, Inc.1		2,036		81,094
Torchmark Corp.1		544		41,910
Nasdaq, Inc.1		362		25,141
Citigroup, Inc.1		359		21,475
Erie Indemnity Co. — Class A1		135		16,565
Western Alliance Bancorporation*,1		239		11,733
Interactive Brokers Group, Inc. — Class A1		186		6,458
Total Financial				8,305,072
Industrial - 18.3%
Stanley Black & Decker, Inc.1		1,450		192,661
Snap-on, Inc.1		1,107		186,718
Cognex Corp.1		2,195		184,270
Northrop Grumman Corp.1		771		183,374
Orbital ATK, Inc.1		1,864		182,672
Parker-Hannifin Corp.1		1,130		181,162
HEICO Corp. — Class A1		2,406		180,450
Cummins, Inc.1		1,193		180,382
Valmont Industries, Inc.1		1,153		179,292
Timken Co.1		3,961		179,037
National Instruments Corp.1		5,462		177,843
Trimble, Inc.*,1		5,540		177,336
Crane Co.1		2,362		176,749
ITT, Inc.1		4,293		176,099
Hexcel Corp.1		3,197		174,396
Gentex Corp.1		8,164		174,138
General Dynamics Corp.1		928		173,722
Oshkosh Corp.1		2,532		173,670
Sonoco Products Co.1		3,263		172,678
Boeing Co.1		967		171,024
Trinity Industries, Inc.1		6,295		167,132
Huntington Ingalls Industries, Inc.		829		165,999
USG Corp.*,1		5,218		165,933
Spirit AeroSystems Holdings, Inc. — Class A1		2,840		164,493
Landstar System, Inc.1		1,876		160,679
Lincoln Electric Holdings, Inc.1		1,846		160,344
KBR, Inc.1		10,649		160,054
Wabtec Corp.1,2		2,040		159,120
Graphic Packaging Holding Co.1		12,145		156,306
AGCO Corp.1		2,568		154,542
SunPower Corp. — Class A*,1,2		21,671		132,193
Terex Corp.1		3,916		122,962
Jacobs Engineering Group, Inc.1		1,991		110,063
BWX Technologies, Inc.1		2,229		106,100
Cree, Inc.*,1		3,906		104,407
Lockheed Martin Corp.1		325		86,970
FLIR Systems, Inc.1		1,916		69,512
Fluor Corp.1		1,154		60,723
Ingersoll-Rand plc1		701		57,005
IDEX Corp.1		465		43,482
Owens Corning1		425		26,082
Arconic, Inc.1		658		17,332
Donaldson Company, Inc.1		346		15,750
Total Industrial				6,144,856
Consumer, Cyclical - 12.4%
Darden Restaurants, Inc.1		2,432		203,485
Copa Holdings S.A. — Class A1		1,667		187,120
Dolby Laboratories, Inc. — Class A1		3,537		185,374
WW Grainger, Inc.1		794		184,810
Harley-Davidson, Inc.1		3,041		183,981

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
LONG SHORT EQUITY FUND

	Shares		Value
Vail Resorts, Inc.1		954	$	183,073
Choice Hotels International, Inc.1		2,859		178,973
Regal Entertainment Group — Class A1,2		7,888		178,111
Dunkin’ Brands Group, Inc.1		3,252		177,819
Brinker International, Inc.1,2		4,036		177,423
Fastenal Co.1		3,418		176,027
Spirit Airlines, Inc.*,1		3,295		174,866
Lions Gate Entertainment Corp. — Class A1		6,569		174,473
Watsco, Inc.1		1,217		174,250
MSC Industrial Direct Company, Inc. — Class A1		1,677		172,329
WESCO International, Inc.*,1		2,445		170,050
HD Supply Holdings, Inc.*,1		4,110		169,024
General Motors Co.1		4,655		164,601
Extended Stay America, Inc.1		10,117		161,265
Alaska Air Group, Inc.1		1,731		159,633
GameStop Corp. — Class A		6,535		147,364
Thor Industries, Inc.1		1,508		144,964
PACCAR, Inc.1		1,701		114,307
Yum! Brands, Inc.1		1,700		108,630
Penske Automotive Group, Inc.1		1,365		63,896
Domino’s Pizza, Inc.1		343		63,215
Six Flags Entertainment Corp.1		109		6,484
Total Consumer, Cyclical				4,185,547
Technology - 11.5%
DST Systems, Inc.1		1,556		190,609
Teradyne, Inc.1		6,098		189,648
Western Digital Corp.1		2,272		187,508
Texas Instruments, Inc.1		2,317		186,658
Atlassian Corporation plc — Class A*,1		6,119		183,264
Skyworks Solutions, Inc.1		1,864		182,635
Qorvo, Inc.*,1		2,661		182,438
Hewlett Packard Enterprise Co.1		7,644		181,163
Apple, Inc.1		1,260		181,012
HP, Inc.1		10,116		180,874
QUALCOMM, Inc.1		3,147		180,448
Synopsys, Inc.*,1		2,480		178,882
Maxim Integrated Products, Inc.1		3,959		177,997
Cypress Semiconductor Corp.1		12,834		176,596
Xilinx, Inc.1		3,046		176,333
Xerox Corp.1		23,988		176,072
NetApp, Inc.1		4,122		172,506
Broadcom Ltd.1		781		171,008
Marvell Technology Group Ltd.1		10,963		167,295
NCR Corp.*,1		3,606		164,722
CDK Global, Inc.1		2,455		159,600
Applied Materials, Inc.1		2,077		80,795
Intel Corp.1		891		32,138
Total Technology				3,860,201
Consumer, Non-cyclical - 10.0%
AMERCO1		504		192,120
IDEXX Laboratories, Inc.*,1		1,197		185,068
Herc Holdings, Inc.*,1		3,717		181,724
Cooper Cos., Inc.1		906		181,099
Juno Therapeutics, Inc.*,2		8,152		180,893
Philip Morris International, Inc.1		1,598		180,414
Morningstar, Inc.1		2,294		180,309
Baxter International, Inc.1		3,446		178,710
VWR Corp.*,1		6,269		176,785
Alnylam Pharmaceuticals, Inc.*,1		3,424		175,480
United Rentals, Inc.*,1		1,378		172,319
Alkermes plc*,1		2,890		169,066
Teleflex, Inc.1		868		168,157
Blue Buffalo Pet Products, Inc.*,1		7,019		161,437
Seattle Genetics, Inc.*,1		2,557		160,733
West Pharmaceutical Services, Inc.1		1,796		146,572
Patheon N.V.*,1		5,459		143,791
Ionis Pharmaceuticals, Inc.*,1,2		3,220		129,444
Quanta Services, Inc.*,1		2,503		92,887
Bruker Corp.1		3,384		78,949
Quintiles IMS Holdings, Inc.*,1		638		51,378
Intrexon Corp.*,1,2		2,579		51,116
TransUnion*,1		863		33,096
Total Consumer, Non-cyclical				3,371,547
Communications - 4.2%
Clear Channel Outdoor Holdings, Inc. — Class A1		31,745		192,057
T-Mobile US, Inc.*,1		2,796		180,593
United States Cellular Corp.*,1		4,836		180,528
Cable One, Inc.1		284		177,350
Telephone & Data Systems, Inc.1		6,678		177,034
Sprint Corp.*,1		19,795		171,821
Thomson Reuters Corp.1		3,921		169,505
FactSet Research Systems, Inc.1,2		1,003		165,405
Total Communications				1,414,293
Basic Materials - 3.1%
Valvoline, Inc.1,2		7,700		189,035
Versum Materials, Inc.1		5,712		174,787
LyondellBasell Industries N.V. — Class A1		1,837		167,517
AdvanSix, Inc.*,1		6,081		166,133
Tahoe Resources, Inc.1		19,812		159,090
Huntsman Corp.1		4,822		118,332
Royal Gold, Inc.1		982		68,789
Total Basic Materials				1,043,683
Energy - 2.9%
HollyFrontier Corp.1		6,187		175,340
Targa Resources Corp.1		2,868		171,793
Murphy Oil Corp.1		5,351		152,985
Frank’s International N.V.1,2		14,140		149,460
First Solar, Inc.*,1,2		5,115		138,617
Marathon Oil Corp.1		6,190		97,802
Marathon Petroleum Corp.1		1,845		93,246
Total Energy				979,243
Utilities - 0.9%
AES Corp.1		15,295		170,998
Hawaiian Electric Industries, Inc.1		2,212		73,682

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
LONG SHORT EQUITY FUND

	Shares		Value
SCANA Corp.1		748	$	48,882
Total Utilities				293,562
Total Common Stocks
(Cost $27,711,214)				29,598,004
MUTUAL FUNDS† - 6.3%
Guggenheim Strategy Fund I3		84,265		2,110,841
Guggenheim Strategy Fund II3		584		14,592
Total Mutual Funds
(Cost $2,118,397)				2,125,433
	Face Amount
REPURCHASE AGREEMENTS††,4 – 10.0%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	1,776,648		1,776,648
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,144,583		1,144,583
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		247,889		247,889
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		175,448		175,448
Total Repurchase Agreements
(Cost $3,344,568)				3,344,568
	Shares
SECURITIES LENDING COLLATERAL†,5 - 2.1%
First American Government Obligations Fund — Class Z, 0.61%6		717,756		717,756
Total Securities Lending Collateral
(Cost $717,756)				717,756
Total Investments – 106.4%
(Cost $33,891,935)			$	35,785,761
COMMON STOCKS SOLD SHORT† - (33.8)%
Basic Materials - (0.4)%
United States Steel Corp.		1,748		(59,100	)
Freeport-McMoRan, Inc.*		4,430		(59,185	)
Total Basic Materials				(118,285	)
Utilities - (0.7)%
NextEra Energy, Inc.		245		(31,451	)
NRG Energy, Inc.		2,622		(49,031	)
American Water Works Co., Inc.		1,010		(78,548	)
Eversource Energy		1,508		(88,640	)
Total Utilities				(247,670	)
Industrial - (1.7)%
Deere & Co.		33		(3,592	)
Honeywell International, Inc.		38		(4,745	)
Johnson Controls International plc		273		(11,499	)
United Parcel Service, Inc. — Class B		232		(24,894	)
Caterpillar, Inc.		285		(26,437	)
Zebra Technologies Corp. — Class A*		849		(77,471	)
Roper Technologies, Inc.		410		(84,661	)
General Electric Co.		2,918		(86,956	)
3M Co.		460		(88,012	)
FedEx Corp.		453		(88,403	)
Agilent Technologies, Inc.		1,690		(89,350	)
Total Industrial				(586,020	)
Energy - (1.9)%
Gulfport Energy Corp.*		261		(4,487	)
Newfield Exploration Co.*		942		(34,769	)
Laredo Petroleum, Inc.*		3,615		(52,779	)
Ensco plc — Class A		8,880		(79,476	)
Transocean Ltd.*		6,505		(80,987	)
Diamondback Energy, Inc.*		849		(88,054	)
Parsley Energy, Inc. — Class A*		2,783		(90,475	)
Southwestern Energy Co.*		11,414		(93,253	)
Weatherford International plc*		15,227		(101,260	)
Total Energy				(625,540	)
Technology - (2.6)%
NVIDIA Corp.		293		(31,916	)
Oracle Corp.		1,440		(64,238	)
athenahealth, Inc.*		747		(84,179	)
International Business Machines Corp.		487		(84,806	)
First Data Corp. — Class A*		5,473		(84,832	)
ServiceNow, Inc.*		998		(87,295	)
Workday, Inc. — Class A*		1,053		(87,694	)
Splunk, Inc.*		1,409		(87,767	)
Allscripts Healthcare Solutions, Inc.*		7,256		(92,006	)
Conduent, Inc.*		5,521		(92,642	)
Cerner Corp.*		1,575		(92,689	)
Total Technology				(890,064	)
Communications - (2.9)%
Palo Alto Networks, Inc.*		106		(11,944	)
Alphabet, Inc. — Class A*		60		(50,868	)
Facebook, Inc. — Class A*		369		(52,416	)
TripAdvisor, Inc.*		1,708		(73,717	)
Twitter, Inc.*		5,110		(76,395	)
Amazon.com, Inc.*		93		(82,448	)
Verizon Communications, Inc.		1,756		(85,605	)
Groupon, Inc. — Class A*		21,897		(86,055	)
DISH Network Corp. — Class A*		1,442		(91,553	)
Liberty Expedia Holdings, Inc. — Class A*		2,025		(92,097	)
Expedia, Inc.		734		(92,609	)
Netflix, Inc.*		639		(94,451	)
Priceline Group, Inc.*		58		(103,239	)
Total Communications				(993,397	)

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
LONG SHORT EQUITY FUND

	Shares		Value
Financial - (3.3)%
KeyCorp		604	$	(10,739	)
Bank of America Corp.		978		(23,071	)
American Tower Corp. — Class A		342		(41,567	)
Colony NorthStar, Inc. — Class A		6,281		(81,088	)
New York Community Bancorp, Inc.		5,866		(81,948	)
Simon Property Group, Inc.		487		(83,779	)
CBRE Group, Inc. — Class A*		2,414		(83,983	)
Jones Lang LaSalle, Inc.		755		(84,145	)
American Homes 4 Rent — Class A		3,753		(86,169	)
Outfront Media, Inc.		3,275		(86,951	)
Howard Hughes Corp.*		744		(87,234	)
Visa, Inc. — Class A		988		(87,804	)
Equinix, Inc.		227		(90,884	)
SBA Communications Corp.*		765		(92,083	)
Realogy Holdings Corp.		3,188		(94,970	)
Total Financial				(1,116,415	)
Consumer, Cyclical - (9.8)%
Advance Auto Parts, Inc.		270		(40,030	)
Dollar General Corp.		652		(45,464	)
DR Horton, Inc.		1,466		(48,832	)
CalAtlantic Group, Inc.		1,378		(51,606	)
World Fuel Services Corp.		1,647		(59,704	)
Costco Wholesale Corp.		387		(64,896	)
Lululemon Athletica, Inc.*		1,341		(69,558	)
Tesla, Inc.*		269		(74,863	)
CarMax, Inc.*		1,360		(80,540	)
Macy’s, Inc.		2,770		(82,103	)
Newell Brands, Inc.		1,781		(84,010	)
Target Corp.		1,533		(84,606	)
Whirlpool Corp.		494		(84,637	)
Kohl’s Corp.		2,129		(84,755	)
CVS Health Corp.		1,085		(85,173	)
Walgreens Boots Alliance, Inc.		1,029		(85,458	)
MGM Resorts International		3,121		(85,515	)
NIKE, Inc. — Class B		1,547		(86,214	)
Under Armour, Inc. — Class C*		4,722		(86,413	)
J.C. Penney Company, Inc.*		14,059		(86,603	)
Dillard’s, Inc. — Class A		1,659		(86,666	)
Home Depot, Inc.		593		(87,070	)
Kate Spade & Co.*		3,764		(87,438	)
Nordstrom, Inc.		1,895		(88,250	)
Vista Outdoor, Inc.*		4,299		(88,516	)
Mattel, Inc.		3,457		(88,534	)
Brunswick Corp.		1,447		(88,556	)
TJX Cos., Inc.		1,120		(88,570	)
Hanesbrands, Inc.		4,288		(89,019	)
Hasbro, Inc.		899		(89,738	)
Dollar Tree, Inc.*		1,145		(89,837	)
Ralph Lauren Corp. — Class A		1,102		(89,945	)
Toll Brothers, Inc.*		2,507		(90,528	)
Wal-Mart Stores, Inc.		1,257		(90,605	)
Carter’s, Inc.		1,009		(90,608	)
VF Corp.		1,673		(91,965	)
Michael Kors Holdings Ltd.*		2,417		(92,112	)
Skechers U.S.A., Inc. — Class A*		3,440		(94,428	)
Coach, Inc.		2,311		(95,514	)
PVH Corp.		979		(101,295	)
Total Consumer, Cyclical				(3,280,174	)
Consumer, Non-cyclical - (10.5)%
McKesson Corp.		78		(11,564	)
Acadia Healthcare Co., Inc.*		314		(13,690	)
Biogen, Inc.*		112		(30,623	)
Alexion Pharmaceuticals, Inc.*		279		(33,826	)
Clorox Co.		362		(48,808	)
Pfizer, Inc.		1,532		(52,410	)
Incyte Corp.*		406		(54,270	)
Tenet Healthcare Corp.*		4,195		(74,294	)
Mallinckrodt plc*		1,691		(75,368	)
Mylan N.V.*		1,948		(75,953	)
Perrigo Company plc		1,145		(76,016	)
Brookdale Senior Living, Inc. — Class A*		5,833		(78,337	)
Endo International plc*		7,086		(79,080	)
Express Scripts Holding Co.*		1,235		(81,399	)
Brown-Forman Corp. — Class B		1,795		(82,893	)
Merck & Company, Inc.		1,320		(83,873	)
Thermo Fisher Scientific, Inc.		549		(84,326	)
Molson Coors Brewing Co. — Class B		882		(84,416	)
AmerisourceBergen Corp. — Class A		958		(84,783	)
Allergan plc		356		(85,056	)
UnitedHealth Group, Inc.		520		(85,285	)
Edgewell Personal Care Co.*		1,168		(85,428	)
DaVita, Inc.*		1,258		(85,506	)
Bunge Ltd.		1,082		(85,759	)
Zoetis, Inc.		1,607		(85,766	)
Service Corp. International		2,813		(86,865	)
Kroger Co.		2,969		(87,556	)
Sysco Corp.		1,688		(87,641	)
Akorn, Inc.*		3,645		(87,772	)
Coca-Cola Co.		2,070		(87,851	)
PayPal Holdings, Inc.*		2,046		(88,019	)
Whole Foods Market, Inc.		2,962		(88,031	)
Eli Lilly & Co.		1,050		(88,316	)
Centene Corp.*		1,241		(88,434	)
Celgene Corp.*		713		(88,719	)
PepsiCo, Inc.		794		(88,817	)
Johnson & Johnson		714		(88,929	)
Regeneron Pharmaceuticals, Inc.*		230		(89,127	)
US Foods Holding Corp.*		3,196		(89,424	)
Constellation Brands, Inc. — Class A		553		(89,625	)
AbbVie, Inc.		1,390		(90,571	)
ServiceMaster Global Holdings, Inc.*		2,209		(92,226	)
H&R Block, Inc.		4,039		(93,907	)
Graham Holdings Co. — Class B		158		(94,729	)

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
LONG SHORT EQUITY FUND

	Shares		Value
Sprouts Farmers Market, Inc.*		4,859	$	(112,339	)
Total Consumer, Non-cyclical				(3,527,627	)
Total Common Stocks Sold Short
(Proceeds $11,151,251)				(11,385,192	)
Total Securities Sold Short- (33.8)%
(Proceeds $11,151,251)			$	(11,385,192	)
Other Assets & Liabilities, net - 27.4%				9,218,950
Total Net Assets - 100.0%			$	33,619,519

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2017 S&P 500 Index Mini Futures Contracts (Aggregate Value of Contracts $589,500)		5	$	2,656

*	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, 2017.
2	All or portion of this security is on loan at March 31, 2017 — See Note 6.
3	Affiliated issuer — See Note 10.
4	Repurchase Agreements — See Note 5.
5	Securities lending collateral — See Note 6.
6	Rate indicated is the 7 day yield as of March 31, 2017.
	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, 2017 (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	$	29,598,004	$	—	$	—	$	—	$	—	$	29,598,004
Equity Futures Contracts		—		2,656		—		—		—		2,656
Mutual Funds		2,125,433		—		—		—		—		2,125,433
Repurchase Agreements		—		—		3,344,568		—		—		3,344,568
Securities Lending Collateral		717,756		—		—		—		—		717,756
Total	$	32,441,193	$	2,656	$	3,344,568	$	—	$	—	$	35,788,417
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Common Stocks	$	11,385,192	$	—	$	—	$	—	$	—	$	11,385,192

* Other financial instruments include futures contracts which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

LONG SHORT EQUITY FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $701,650 of securities loaned (cost $28,428,970)	$	30,315,760
Investments in affiliated issuers, at value (cost $2,118,397)		2,125,433
Repurchase agreements, at value (cost $3,344,568)		3,344,568
Total investments (cost $33,891,935)		35,785,761
Segregated cash with broker		9,975,735
Receivables:
Dividends		50,141
Fund shares sold		12,275
Variation margin		1,650
Securities lending income		825
Interest		65
Total assets		45,826,452
Liabilities:
Securities sold short, at value (proceeds $11,151,251)		11,385,192
Payable for:
Return of securities loaned		717,756
Management fees		26,067
Distribution and service fees		15,508
Fund shares redeemed		14,232
Transfer agent and administrative fees		7,241
Securities purchased		3,547
Portfolio accounting fees		2,897
Miscellaneous		34,493
Total liabilities		12,206,933
Commitments and contingent liabilities (Note 13)		—
Net assets	$	33,619,519
Net assets consist of:
Paid in capital	$	51,453,733
Accumulated net investment loss		(26,950	)
Accumulated net realized loss on investments		(19,469,805	)
Net unrealized appreciation on investments		1,662,541
Net assets	$	33,619,519
A-Class:
Net assets	$	4,615,038
Capital shares outstanding		292,011
Net asset value per share	$	15.80
Maximum offering price per share (Net asset value divided by 95.25%)	$	16.59
C-Class:
Net assets	$	13,235,000
Capital shares outstanding		938,297
Net asset value per share	$	14.11
P-Class:
Net assets	$	13,779,322
Capital shares outstanding		869,077
Net asset value per share	$	15.86
Institutional Class:
Net assets	$	1,990,159
Capital shares outstanding		123,560
Net asset value per share	$	16.11

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

LONG SHORT EQUITY FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $948)	$	649,378
Dividends from securities of affiliated issuers		36,133
Interest		10,494
Income from securities lending, net		4,793
Total investment income		700,798
Expenses:
Management fees		376,960
Transfer agent and administrative fees		104,711
Distribution and service fees:
A-Class		18,665
C-Class		148,684
P-Class		46,616
Portfolio accounting fees		41,884
Short sales dividend expense		205,927
Prime broker interest expense		30,502
Custodian fees		6,387
Trustees’ fees*		3,864
Miscellaneous		64,514
Total expenses		1,048,714
Net investment loss		(347,916	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	3,868,911
Futures contracts		(153,719	)
Securities sold short		(1,690,166	)
Net realized gain		2,025,026
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		1,017,806
Investments in affiliated issuers		17,851
Securities sold short		(1,272,390	)
Futures contracts		(3,281	)
Net change in unrealized appreciation (depreciation)		(240,014	)
Net realized and unrealized gain		1,785,012
Net increase in net assets resulting from operations	$	1,437,096

* 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(347,916	)	$	(483,912	)
Net realized gain (loss) on investments		2,025,026			(1,957,832	)
Net change in unrealized appreciation (depreciation) on investments		(240,014	)		(644,249	)
Net increase (decrease) in net assets resulting from operations		1,437,096			(3,085,993	)
Capital share transactions:
Proceeds from sale of shares
A-Class		1,205,531			11,165,376
C-Class		193,581			909,384
P-Class		2,123,896			16,740,494	*
Institutional Class		3,533,696			305,681
Cost of shares redeemed
A-Class		(7,699,271	)		(5,781,828	)
C-Class		(4,150,079	)		(2,910,089	)
P-Class		(12,473,835	)		(12,054,766	)*
Institutional Class		(2,115,992	)		(60,140	)
Net increase (decrease) from capital share transactions		(19,382,473	)		8,314,112
Net increase (decrease) in net assets		(17,945,377	)		5,228,119
Net assets:
Beginning of year		51,564,896			46,336,777
End of year	$	33,619,519		$	51,564,896
Accumulated net investment loss at end of year	$	(26,950	)	$	—
Capital share activity:
Shares sold
A-Class		78,033			702,460
C-Class		13,820			63,821
P-Class		136,345			1,069,799	*
Institutional Class		222,295			19,194
Shares redeemed
A-Class		(494,029	)		(369,701	)
C-Class		(297,144	)		(205,085	)
P-Class		(800,988	)		(771,059	)*
Institutional Class		(132,630	)		(3,751	)
Net increase (decrease) in shares		(1,274,298	)		505,678

* H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015.

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	15.26		$	16.16		$	15.07		$	13.48		$	13.28
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.10	)		(.06	)		(.13	)		(.05	)
Net gain (loss) on investments (realized and unrealized)		.63			(.80	)		1.15			1.72			.30
Total from investment operations		.54			(.90	)		1.09			1.59			.25
Less distributions from:
Net investment income		—			—			—			—			(.05	)
Total distributions		—			—			—			—			(.05	)
Net asset value, end of period	$	15.80		$	15.26		$	16.16		$	15.07		$	13.48
Total Returnb		3.54	%		(5.57	%)		7.23	%		11.80	%		1.89	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	4,615		$	10,803		$	6,063		$	7,552		$	13,106
Ratios to average net assets:
Net investment income (loss)		(0.59	%)		(0.66	%)		(0.42	%)		(0.91	%)		(0.35	%)
Total expensesc		2.25	%		2.53	%		2.17	%		2.34	%		1.92	%
Portfolio turnover rate		223	%		224	%		331	%		256	%		183	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	13.72		$	14.64		$	13.76		$	12.40		$	12.31
Income (loss) from investment operations:
Net investment income (loss)a		(.18	)		(.21	)		(.16	)		(.24	)		(.14	)
Net gain (loss) on investments (realized and unrealized)		.57			(.71	)		1.04			1.60			.28
Total from investment operations		.39			(.92	)		.88			1.36			.14
Less distributions from:
Net investment income		—			—			—			—			(.05	)
Total distributions		—			—			—			—			(.05	)
Net asset value, end of period	$	14.11		$	13.72		$	14.64		$	13.76		$	12.40
Total Returnb		2.77	%		(6.28	%)		6.40	%		10.97	%		1.14	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,235		$	16,760		$	19,952		$	22,354		$	23,554
Ratios to average net assets:
Net investment income (loss)		(1.30	%)		(1.45	%)		(1.16	%)		(1.79	%)		(1.12	%)
Total expensesc,e		2.98	%		3.24	%		2.92	%		3.11	%		2.69	%
Portfolio turnover rate		223	%		224	%		331	%		256	%		183	%

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	15.31		$	16.21		$	15.12		$	13.53		$	13.33
Income (loss) from investment operations:
Net investment income (loss)a		(.09	)		(.11	)		(.07	)		(.16	)		(.04	)
Net gain (loss) on investments (realized and unrealized)		.64			(.79	)		1.16			1.75			.29
Total from investment operations		.55			(.90	)		1.09			1.59			.25
Less distributions from:
Net investment income		—			—			—			—			(.05	)
Total distributions		—			—			—			—			(.05	)
Net asset value, end of period	$	15.86		$	15.31		$	16.21		$	15.12		$	13.53
Total Returnb		3.53	%		(5.55	%)		7.21	%		11.75	%		1.88	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	13,779		$	23,477		$	20,020		$	29,287		$	26,257
Ratios to average net assets:
Net investment income (loss)		(0.58	%)		(0.67	%)		(0.43	%)		(1.07	%)		(0.29	%)
Total expensesc,e		2.24	%		2.50	%		2.17	%		2.36	%		1.88	%
Portfolio turnover rate		223	%		224	%		331	%		256	%		183	%

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	15.50		$	16.38		$	15.24		$	13.60		$	13.33
Income (loss) from investment operations:
Net investment income (loss)a		(.03	)		(.05	)		(—	)d		(.12	)		(.02	)
Net gain (loss) on investments (realized and unrealized)		.64			(.83	)		1.14			1.76			.31
Total from investment operations		.61			(.88	)		1.14			1.64			.29
Less distributions from:
Net investment income		—			—			—			—			(.02	)
Total distributions		—			—			—			—			(.02	)
Net asset value, end of period	$	16.11		$	15.50		$	16.38		$	15.24		$	13.60
Total Returnb		3.94	%		(5.37	%)		7.48	%		12.06	%		2.15	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,990		$	525		$	302		$	12		$	11
Ratios to average net assets:
Net investment income (loss)		(0.20	%)		(0.29	%)		(0.01	%)		(0.82	%)		(0.17	%)
Total expensesc,e		1.96	%		2.27	%		1.95	%		2.11	%		1.72	%
Portfolio turnover rate		223	%		224	%		331	%		256	%		183	%

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.
e	Excluding interest and dividend expense related to short sales, the operating expense ratios for the years or periods presented would be:

	3/31/17	3/31/16	3/31/15	3/31/14	3/28/13
A-Class	1.67%	1.66%	1.66%	1.68%	1.65%
C-Class	2.42%	2.41%	2.41%	2.42%	2.40%
P-Class	1.67%	1.66%	1.66%	1.67%	1.65%
Institutional Class	1.43%	1.41%	1.40%	1.42%	1.41%

* H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

OBJECTIVE: Seeks to achieve capital growth.

The Event Driven and Distressed Strategies Fund P-Class returned 6.11% for the one-year period ended March 31, 2017. By comparison, the S&P 500 Index returned 17.17% and the Credit Suisse Event Driven Liquid Index returned 8.37%.

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, as the primary instrument to gain exposure to these factors. The results of derivatives use during the period were within our expectations and contributed to the Fund’s performance.

The main positive driver of performance was from high yield exposure. Equity exposure, through small cap equities and stocks of high yield companies, also contributed to positive performance during the period. Merger arbitrage exposure contributed negatively to performance during the period. Throughout the year, the largest exposures were to high yield followed by merger arbitrage.

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. Investment in the Guggenheim Strategy Funds has benefited Fund performance relative to investing in other short-term investments.

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	31.8%
Guggenheim Strategy Fund I	31.5%
iShares iBoxx $ High Yield Corpo-rate Bond ETF	0.5%
Charter Communications, Inc. — Class A	0.4%
Enbridge, Inc.	0.3%
Netflix, Inc.	0.3%
NXP Semiconductor N.V.	0.2%
Royal Bank of Scotland Group plc ADR	0.2%
Sprint Corp.	0.1%
HCA Holdings, Inc.	0.1%
Top Ten Total	65.4%
“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, 2017

Cumulative Fund Performance*

 

 

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	Since Inception (06/30/10)
A-Class Shares	6.11%	4.00%	4.86%
A-Class Shares with sales charge†	1.09%	2.99%	4.10%
C-Class Shares	5.31%	3.23%	4.06%
C-Class Shares with CDSC‡	4.31%	3.23%	4.06%
P-Class Shares	6.11%	4.00%	4.86%
Institutional Class Shares	6.36%	4.26%	5.12%
Credit Suisse Event Driven Liquid Index	8.37%	4.11%	5.29%
S&P 500 Index	17.17%	13.30%	10.59%

*	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 is an unmanaged index and, unlike the Fund, has no management fees or operating expenses to reduce its reported return.
†	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, 2017
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
COMMON STOCKS† - 10.4%
Communications - 1.9%
Charter Communications, Inc. — Class A*		168	$	54,991
Netflix, Inc.*		231		34,144
Sprint Corp.*		2,100		18,228
Nokia Oyj ADR		3,163		17,144
DISH Network Corp. — Class A*		251		15,936
CBS Corp. — Class B		223		15,466
Sirius XM Holdings, Inc.1		2,613		13,457
Level 3 Communications, Inc.*		194		11,101
Expedia, Inc.		80		10,094
CenturyLink, Inc.1		292		6,882
CDW Corp.		86		4,963
VeriSign, Inc.*		55		4,791
CommScope Holding Company, Inc.*		105		4,380
Zayo Group Holdings, Inc.*		132		4,343
IAC/InterActiveCorp*		42		3,096
TEGNA, Inc.		116		2,972
EchoStar Corp. — Class A*		52		2,961
Sinclair Broadcast Group, Inc. — Class A1		57		2,309
AMC Networks, Inc. — Class A*		37		2,171
ViaSat, Inc.*		31		1,978
Cable One, Inc.		3		1,873
Nexstar Media Group, Inc. — Class A		26		1,824
Tribune Media Co. — Class A		47		1,752
West Corp.		45		1,099
Time, Inc.		54		1,045
Cogent Communications Holdings, Inc.		24		1,033
Plantronics, Inc.		18		974
Consolidated Communications Holdings, Inc.1		27		632
Gray Television, Inc.*		40		580
Windstream Holdings, Inc.1		102		556
Gogo, Inc.*		47		517
GTT Communications, Inc.*		21		511
Bankrate, Inc.*		49		473
Cincinnati Bell, Inc.*		23		407
General Communication, Inc. — Class A*		19		395
HC2 Holdings, Inc.*		23		143
Total Communications				245,221
Consumer, Cyclical - 1.9%
Yum! Brands, Inc.		193		12,336
Tata Motors Ltd. ADR		342		12,192
United Continental Holdings, Inc.*		169		11,937
Royal Caribbean Cruises Ltd.		116		11,381
American Airlines Group, Inc.		269		11,379
Hilton Worldwide Holdings, Inc.		177		10,348
Dollar Tree, Inc.*		128		10,043
MGM Resorts International		307		8,412
L Brands, Inc.		154		7,254
Wynn Resorts Ltd.		56		6,418
Lennar Corp. — Class A		123		6,296
Norwegian Cruise Line Holdings Ltd.*		123		6,240
Foot Locker, Inc.		72		5,386
LKQ Corp.*		168		4,918
Aramark		133		4,904
Goodyear Tire & Rubber Co.		136		4,896
PVH Corp.		43		4,449
HD Supply Holdings, Inc.*		107		4,400
Hanesbrands, Inc.		202		4,193
PulteGroup, Inc.		171		4,027
Toll Brothers, Inc.*		88		3,177
Allison Transmission Holdings, Inc.		87		3,137
Scotts Miracle-Gro Co. — Class A		32		2,988
Six Flags Entertainment Corp.		50		2,975
Cinemark Holdings, Inc.		66		2,927
Lions Gate Entertainment Corp. — Class A*		108		2,868
International Game Technology plc		108		2,559
Rite Aid Corp.*		568		2,414
Carter’s, Inc.		26		2,335
CalAtlantic Group, Inc.		62		2,322
Michaels Companies, Inc.*		103		2,306
AMC Entertainment Holdings, Inc. — Class A		72		2,264
Penske Automotive Group, Inc.		46		2,153
Cedar Fair, LP		30		2,034
CST Brands, Inc.		41		1,972
Regal Entertainment Group — Class A		86		1,942
Choice Hotels International, Inc.		30		1,878
Tenneco, Inc.		29		1,810
Wendy’s Co.		133		1,810
WESCO International, Inc.*		26		1,808
Extended Stay America, Inc.		106		1,690
Sally Beauty Holdings, Inc.*		77		1,574
Beacon Roofing Supply, Inc.*		32		1,573
Dana, Inc.		77		1,487
Allegiant Travel Co. — Class A		9		1,442
Churchill Downs, Inc.		9		1,430
Anixter International, Inc.*		18		1,427
ILG, Inc.		67		1,404
Boyd Gaming Corp.*		62		1,365
Tempur Sealy International, Inc.*		29		1,347
AdvancePierre Foods Holdings, Inc.		43		1,340
Wolverine World Wide, Inc.		52		1,298
FirstCash, Inc.		26		1,278
Navistar International Corp.*		51		1,256
Cooper Tire & Rubber Co.		28		1,242
GameStop Corp. — Class A		55		1,240
Brinker International, Inc.1		26		1,143
Scientific Games Corp. — Class A*		47		1,112
TRI Pointe Group, Inc.*		85		1,066
J.C. Penney Company, Inc.*		167		1,029
Party City Holdco, Inc.*		65		913
Penn National Gaming, Inc.*		49		903
KB Home		45		895
Suburban Propane Partners, LP		33		890
MDC Holdings, Inc.		28		841
Metaldyne Performance Group, Inc.		36		822
Group 1 Automotive, Inc.		11		815
BMC Stock Holdings, Inc.*		36		814

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
Meritage Homes Corp.*		22	$	810
Meritor, Inc.*		47		805
American Axle & Manufacturing Holdings, Inc.*		41		770
Mobile Mini, Inc.		24		732
Sears Holdings Corp.*,1		59		678
Asbury Automotive Group, Inc.*		11		661
Vista Outdoor, Inc.*		30		618
Caleres, Inc.		23		608
Pinnacle Entertainment, Inc.*		30		586
Isle of Capri Casinos, Inc.*		22		580
ClubCorp Holdings, Inc.		36		578
Sonic Automotive, Inc. — Class A		24		481
Eldorado Resorts, Inc.*		25		473
H&E Equipment Services, Inc.		19		466
Tailored Brands, Inc.		26		388
Titan International, Inc.		34		352
William Lyon Homes — Class A*		17		351
M/I Homes, Inc.*		13		319
Ferrellgas Partners, LP		53		318
Century Communities, Inc.*		12		305
Carrols Restaurant Group, Inc.*		19		269
Beazer Homes USA, Inc.*		18		218
Hovnanian Enterprises, Inc. — Class A*		79		179
Perry Ellis International, Inc.*		8		172
Conn’s, Inc.*		17		149
Ruby Tuesday, Inc.*		31		87
Total Consumer, Cyclical				244,677
Energy - 1.6%
Enbridge, Inc.		868		36,317
Williams Companies, Inc.		439		12,990
Energy Transfer Equity, LP		567		11,187
Concho Resources, Inc.*		79		10,139
Continental Resources, Inc.*		196		8,902
ONEOK, Inc.		112		6,209
Tesoro Corp.		62		5,026
Diamondback Energy, Inc.*		47		4,875
Cenovus Energy, Inc.		431		4,870
Newfield Exploration Co.*		106		3,912
Antero Resources Corp.*		169		3,855
Range Resources Corp.		132		3,841
RSP Permian, Inc.*		84		3,480
Weatherford International plc*		510		3,391
Equities Midstream Partners, LP		44		3,384
Antero Midstream Partners, LP		101		3,350
Tesoro Logistics, LP		58		3,159
DCP Midstream, LP1		77		3,021
Chesapeake Energy Corp.*,1		475		2,822
Energen Corp.*		51		2,776
WPX Energy, Inc.*		207		2,772
Murphy Oil Corp.		91		2,602
Transocean Ltd.*		203		2,527
Rice Energy, Inc.*		106		2,512
NuStar Energy, LP		42		2,183
PDC Energy, Inc.*		35		2,182
Southwestern Energy Co.*		256		2,092
Genesis Energy, LP		64		2,075
Tallgrass Energy Partners, LP		39		2,075
Western Refining, Inc.		58		2,034
CONSOL Energy, Inc.*		121		2,030
Laredo Petroleum, Inc.*		126		1,840
Oasis Petroleum, Inc.*		125		1,783
Whiting Petroleum Corp.*		186		1,760
QEP Resources, Inc.*		123		1,563
Murphy USA, Inc.*		20		1,468
Gulfport Energy Corp.*		84		1,444
Ensco plc — Class A		160		1,432
NGL Energy Partners, LP		62		1,401
SM Energy Co.		58		1,393
Callon Petroleum Co.*		105		1,383
PBF Energy, Inc. — Class A		58		1,286
Sunoco, LP		53		1,281
SemGroup Corp. — Class A		35		1,260
Matador Resources Co.*		52		1,237
Holly Energy Partners, LP		34		1,214
Clayton Williams Energy, Inc.*		9		1,189
Rowan Companies plc — Class A*		67		1,044
Forum Energy Technologies, Inc.*		50		1,035
Carrizo Oil & Gas, Inc.*		34		974
Pattern Energy Group, Inc.		47		946
TerraForm Power, Inc. — Class A*		76		940
McDermott International, Inc.*		127		857
Noble Corporation plc		127		786
Precision Drilling Corp.*		150		708
Unit Corp.*		27		652
SEACOR Holdings, Inc.*		9		623
EP Energy Corp. — Class A*		131		622
Archrock Partners, LP		35		601
Denbury Resources, Inc.*		207		534
PBF Logistics, LP		23		496
TerraForm Global, Inc. — Class A*		95		456
Resolute Energy Corp.*,1		11		444
Baytex Energy Corp.*		119		407
Enviva Partners, LP		14		393
Sanchez Energy Corp.*,1		41		391
Atwood Oceanics, Inc.*		41		391
Eclipse Resources Corp.*		134		340
SunCoke Energy, Inc.*		34		305
Bristow Group, Inc.		19		289
Natural Resource Partners, LP		7		253
American Midstream Partners, LP		17		252
Bill Barrett Corp.*		42		191
Cloud Peak Energy, Inc.*		39		179
Calumet Specialty Products Partners, LP*		42		160
Gastar Exploration, Inc.*		99		152
Westmoreland Coal Co.*		10		145
Parker Drilling Co.*		77		135
Jones Energy, Inc. — Class A*		51		129
Approach Resources, Inc.*		43		108
Northern Oil and Gas, Inc.*		34		88
Total Energy				201,550

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
Consumer, Non-cyclical - 1.3%
HCA Holdings, Inc.*		198	$	17,621
Grifols S.A. ADR		440		8,304
Nielsen Holdings plc		193		7,973
DaVita, Inc.*		106		7,205
Centene Corp.*		92		6,556
Universal Health Services, Inc. — Class B		52		6,471
Hologic, Inc.*		151		6,425
United Rentals, Inc.*		44		5,502
WhiteWave Foods Co. — Class A*		97		5,446
Teleflex, Inc.		24		4,650
Envision Healthcare Corp.*		64		3,924
Pinnacle Foods, Inc.		64		3,704
MEDNAX, Inc.*		51		3,538
Live Nation Entertainment, Inc.*		111		3,371
Post Holdings, Inc.*		37		3,238
WellCare Health Plans, Inc.*		23		3,225
Service Corp. International		102		3,149
ServiceMaster Global Holdings, Inc.*		72		3,006
TreeHouse Foods, Inc.*		31		2,624
Mallinckrodt plc*		56		2,495
Hill-Rom Holdings, Inc.		35		2,471
WEX, Inc.*		23		2,381
Edgewell Personal Care Co.*		31		2,267
Acadia Healthcare Co., Inc.*		48		2,093
Valeant Pharmaceuticals International, Inc.*		187		2,063
HealthSouth Corp.		47		2,012
Ritchie Bros Auctioneers, Inc.		57		1,876
Alere, Inc.*		47		1,867
Graham Holdings Co. — Class B		3		1,799
Prestige Brands Holdings, Inc.*		28		1,556
Vector Group Ltd.		71		1,477
Cimpress N.V.*		17		1,466
B&G Foods, Inc.		36		1,449
LifePoint Health, Inc.*		22		1,441
Molina Healthcare, Inc.*		31		1,414
CEB, Inc.		17		1,336
Performance Food Group Co.*		56		1,333
Avis Budget Group, Inc.*		45		1,331
Endo International plc*		118		1,317
Horizon Pharma plc*		87		1,286
Darling Ingredients, Inc.*		88		1,278
Sotheby’s*		28		1,273
Owens & Minor, Inc.		33		1,142
Cardtronics plc — Class A*		24		1,122
Avon Products, Inc.*		230		1,012
UnitedHealth Group, Inc.		6		971
Central Garden & Pet Co.*		26		964
Select Medical Holdings Corp.*		72		961
Tenet Healthcare Corp.*		54		956
Dean Foods Co.		48		944
Cott Corp.		74		915
FTI Consulting, Inc.*		22		906
Revlon, Inc. — Class A*		28		780
Hertz Global Holdings, Inc.*		44		772
ACCO Brands Corp.*		57		750
Quad/Graphics, Inc.		27		681
Integer Holdings Corp.*		16		643
SUPERVALU, Inc.*		139		536
Community Health Systems, Inc.*		59		523
Ingles Markets, Inc. — Class A		11		475
RR Donnelley & Sons Co.		38		460
AMAG Pharmaceuticals, Inc.*		19		428
Kindred Healthcare, Inc.		46		384
Rent-A-Center, Inc.		28		248
StoneMor Partners, LP		21		167
BioScrip, Inc.*		63		107
Concordia International Corp.		31		51
Total Consumer, Non-cyclical				162,111
Financial - 1.1%
Royal Bank of Scotland Group plc ADR*		3,210		19,484
Equinix, Inc.		42		16,815
Discover Financial Services		214		14,635
SBA Communications Corp.*		66		7,944
Unum Group		126		5,908
Ally Financial, Inc.		254		5,163
Iron Mountain, Inc.		142		5,065
CIT Group, Inc.		110		4,722
Icahn Enterprises, LP		84		4,305
Lamar Advertising Co. — Class A		53		3,961
Gaming and Leisure Properties, Inc.		111		3,710
Starwood Property Trust, Inc.		140		3,162
Howard Hughes Corp.*		22		2,580
DuPont Fabros Technology, Inc.		49		2,430
Popular, Inc.		57		2,322
CyrusOne, Inc.		45		2,316
Navient Corp.		156		2,303
Realogy Holdings Corp.		77		2,294
Medical Properties Trust, Inc.		172		2,217
Credit Acceptance Corp.*		11		2,194
BankUnited, Inc.		58		2,164
Uniti Group, Inc.		83		2,146
Radian Group, Inc.		117		2,101
GEO Group, Inc.1		45		2,087
Hanover Insurance Group, Inc.		23		2,071
CoreCivic, Inc.		63		1,979
CNO Financial Group, Inc.		95		1,948
MGIC Investment Corp.*		183		1,854
Ryman Hospitality Properties, Inc.		27		1,669
Kennedy-Wilson Holdings, Inc.		62		1,376
QTS Realty Trust, Inc. — Class A		26		1,268
Genworth Financial, Inc. — Class A*		266		1,096
Aircastle Ltd.		42		1,014
Potlatch Corp.		22		1,005
Sabra Health Care REIT, Inc.		34		950
CareTrust REIT, Inc.		35		589
Och-Ziff Capital Management Group LLC — Class A		259		585
FelCor Lodging Trust, Inc.		74		556
KCG Holdings, Inc. — Class A*		29		517
iStar, Inc.*		38		448

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 27

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
PHH Corp.*		29	$	369
Ocwen Financial Corp.*		67		366
Enova International, Inc.*		18		267
Fly Leasing Ltd. ADR*		18		236
Walter Investment Management Corp.*		21		23
Total Financial				142,214
Industrial - 0.8%
Ball Corp.		94		6,980
CNH Industrial N.V.		719		6,931
TransDigm Group, Inc.		29		6,385
Huntington Ingalls Industries, Inc.		25		5,006
Sealed Air Corp.		105		4,576
Crown Holdings, Inc.*		76		4,024
Allegion plc		52		3,936
Sensata Technologies Holding N.V.*		90		3,930
Berry Plastics Group, Inc.*		70		3,400
Orbital ATK, Inc.		31		3,038
AECOM*		83		2,954
XPO Logistics, Inc.*		60		2,873
Jabil Circuit, Inc.		98		2,834
Oshkosh Corp.		40		2,744
Zebra Technologies Corp. — Class A*		28		2,555
USG Corp.*		79		2,512
Graphic Packaging Holding Co.		168		2,162
Trinity Industries, Inc.		79		2,098
Louisiana-Pacific Corp.*		76		1,886
Energizer Holdings, Inc.		33		1,839
EnerSys		23		1,816
Silgan Holdings, Inc.		30		1,781
MasTec, Inc.*		44		1,762
Terex Corp.		56		1,758
Owens-Illinois, Inc.*		86		1,753
Clean Harbors, Inc.*		31		1,724
Sanmina Corp.*		40		1,624
Belden, Inc.		23		1,591
Joy Global, Inc.		54		1,526
Greif, Inc. — Class A		27		1,487
Summit Materials, Inc. — Class A*		60		1,483
Welbilt, Inc.*		75		1,472
Masonite International Corp.*		16		1,268
KLX, Inc.*		28		1,252
Hillenbrand, Inc.		34		1,219
Covanta Holding Corp.		71		1,115
Builders FirstSource, Inc.*		60		894
Actuant Corp. — Class A		32		843
Tutor Perini Corp.*		26		827
SPX FLOW, Inc.*		23		798
EnPro Industries, Inc.		11		783
Ply Gem Holdings, Inc.*		37		729
Gibraltar Industries, Inc.*		17		700
Triumph Group, Inc.		26		670
NCI Building Systems, Inc.*		39		669
Griffon Corp.		26		641
Multi-Color Corp.		9		639
Boise Cascade Co.*		21		561
Briggs & Stratton Corp.		23		516
General Cable Corp.		26		467
Martin Midstream Partners, LP		21		420
Manitowoc Company, Inc.*		73		416
Teekay Corp.		45		412
Kratos Defense & Security Solutions, Inc.*		45		350
KEMET Corp.*		25		300
Park-Ohio Holdings Corp.		7		252
LSB Industries, Inc.*,1		14		131
Navios Maritime Holdings, Inc.*		60		112
Hornbeck Offshore Services, Inc.*		20		89
Total Industrial				109,513
Technology - 0.8%
NXP Semiconductor N.V.*		189		19,561
Micron Technology, Inc.*		589		17,021
Western Digital Corp.		155		12,792
CDK Global, Inc.		79		5,136
Open Text Corp.		141		4,795
MSCI, Inc. — Class A		48		4,665
Qorvo, Inc.*		68		4,662
Leidos Holdings, Inc.		80		4,091
SS&C Technologies Holdings, Inc.		110		3,894
PTC, Inc.*,1		62		3,258
Microsemi Corp.*		62		3,195
NCR Corp.*		67		3,061
Brocade Communications Systems, Inc.		222		2,771
Nuance Communications, Inc.*		159		2,752
j2 Global, Inc.		26		2,182
Entegris, Inc.*		76		1,778
Amkor Technology, Inc.*		130		1,507
ACI Worldwide, Inc.*		63		1,348
NeuStar, Inc. — Class A*		30		995
Engility Holdings, Inc.*		20		579
MagnaChip Semiconductor Corp.*		18		172
Total Technology				100,215
Basic Materials - 0.7%
ArcelorMittal*,1		1,578		13,177
Freeport-McMoRan, Inc.*		750		10,020
Steel Dynamics, Inc.		128		4,449
Axalta Coating Systems Ltd.*		132		4,250
Ashland Global Holdings, Inc.		33		4,087
CF Industries Holdings, Inc.		126		3,698
Chemours Co.		96		3,697
Huntsman Corp.		128		3,141
United States Steel Corp.		90		3,043
Olin Corp.		88		2,893
WR Grace & Co.		37		2,579
Methanex Corp.		47		2,204
Kinross Gold Corp.*		624		2,190
Platform Specialty Products Corp.*		154		2,005
PolyOne Corp.		44		1,500
GCP Applied Technologies, Inc.*		39		1,273
Cliffs Natural Resources, Inc.*		151		1,240
Compass Minerals International, Inc.		18		1,221
Eldorado Gold Corp.		358		1,221
AK Steel Holding Corp.*		163		1,172

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

	Shares		Value
Commercial Metals Co.		61	$	1,167
Alamos Gold, Inc. — Class A		145		1,164
Chemtura Corp.*		34		1,136
Tronox Ltd. — Class A		61		1,125
Hecla Mining Co.		198		1,047
Allegheny Technologies, Inc.		58		1,042
New Gold, Inc.*		294		876
IAMGOLD Corp.*		216		864
Hudbay Minerals, Inc.		119		779
Coeur Mining, Inc.*		90		727
Kaiser Aluminum Corp.		9		719
Neenah Paper, Inc.		9		672
Century Aluminum Co.*		45		571
Clearwater Paper Corp.*		9		504
A. Schulman, Inc.		16		503
PH Glatfelter Co.		23		500
Kraton Corp.*		16		495
Koppers Holdings, Inc.*		11		466
Mercer International, Inc.		35		410
Constellium N.V. — Class A*		58		377
Rayonier Advanced Materials, Inc.		23		309
Resolute Forest Products, Inc.*		47		256
Ryerson Holding Corp.*		18		227
Total Basic Materials				84,996
Utilities - 0.2%
FirstEnergy Corp.		237		7,541
AES Corp.		349		3,902
NRG Energy, Inc.		168		3,141
AmeriGas Partners, LP		50		2,355
Calpine Corp.*		191		2,111
Atlantica Yield plc		54		1,132
Global Partners, LP		18		351
Total Utilities				20,533
Diversified - 0.1%
Leucadia National Corp.		195		5,070
HRG Group, Inc.*		107		2,067
Total Diversified				7,137
Total Common Stocks
(Cost $1,272,758)				1,318,167
RIGHTS††† - 0.0%**
Nexstar Media Group, Inc.
Expires 01/18/19		34		—
Total Rights
(Cost $–)				—
EXCHANGE-TRADED FUNDS† - 0.5%
iShares iBoxx $ High Yield Corporate Bond ETF1		700		61,446
Total Exchange-Traded Funds
(Cost $60,823)				61,446
MUTUAL FUNDS† - 63.2%
Guggenheim Strategy Fund II2		161,753		4,043,826
Guggenheim Strategy Fund I2		160,100		4,010,513
Total Mutual Funds
(Cost $8,022,674)				8,054,339
	Face Amount
REPURCHASE AGREEMENTS††,3 - 25.0%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	1,694,776		1,694,776
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,091,838		1,091,838
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		236,465		236,465
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		167,363		167,363
Total Repurchase Agreements
(Cost $3,190,442)				3,190,442
	Shares
SECURITIES LENDING COLLATERAL†,4 - 0.7%
First American Government Obligations Fund — Class Z, 0.61%5		83,061		83,061
Total Securities Lending Collateral
(Cost $83,061)				83,061
Total Investments - 99.8%
(Cost $12,629,758)			$	12,707,455
Other Assets & Liabilities, net - 0.2%				29,071
Total Net Assets - 100.0%			$	12,736,526
	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 Russell 2000 Index Mini Futures Contracts (Aggregate Value of Contracts $415,140)		6	$	6,275
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2017 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $1,765,781)		15	$	1,842

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENT PROTECTION SOLD††,6
Index	Counterparty	Exchange	Protection Premium Rate			Maturity Date	Notional Principal		Notional Value			Upfront Premiums Paid		Unrealized Appreciation
CDX.NA.HY.28 Index	Barclays Bank plc	ICE		5.00	%	06/20/22	$	1,900,000	$	(2,036,800	)	$	122,561	$	14,239

*	Non-income producing security.
**	Less than 0.1% of net assets.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
†††	Value determined based on Level 3 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Affiliated issuer — See Note 10.
3	Repurchase Agreements — See Note 5.
4	Securities lending collateral — See Note 6.
5	Rate indicated is the 7 day yield as of March 31, 2017.
6	Credit Default Swaps — See Note 2.
	ADR — American Depositary Receipt
	plc — Public Limited Company
	REIT — Real Estate Investment Trust
	CDX.NA.HY.28 Index — Credit Default Swap North American High Yield Series 28 Index
	ICE — Intercontinental Exchange
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	1,318,167	$	—	$	—	$	—	$	—		$	1,318,167
Credit Default Swaps		—		—		—		14,239		—			14,239
Equity Futures Contracts		—		6,275		—		—		—			6,275
Exchange-Traded Funds		61,446		—		—		—		—			61,446
Interest Rate Futures Contracts		—		1,842		—		—		—			1,842
Mutual Funds		8,054,339		—		—		—		—			8,054,339
Repurchase Agreements		—		—		3,190,442		—		—			3,190,442
Rights		—		—		—		—		—	**		—
Securities Lending Collateral		83,061		—		—		—		—			83,061
Total	$	9,517,013	$	8,117	$	3,190,442	$	14,239	$	—		$	12,729,811

*	Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.
**	Security has a market value of $0.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

STATEMENT OF ASSETS AND LIABILITIES

March 31, 2017

Assets:
Investments in unaffiliated issuers, at value - including $80,678 of securities loaned (cost $1,416,642)	$	1,462,674
Investments in affiliated issuers, at value (cost $8,022,674)		8,054,339
Repurchase agreements, at value (cost $3,190,442)		3,190,442	��
Total investments (cost $12,629,758)		12,707,455
Unamortized upfront premiums paid on credit default swaps		122,561
Segregated cash with broker		32,579
Unrealized appreciation on swap agreements		14,239
Cash		31
Receivables:
Fund shares sold		18,251
Dividends		15,616
Interest		3,229
Variation margin		3,094
Investment adviser		1,290
Securities lending income		69
Foreign taxes reclaim		21
Total assets		12,918,435
Liabilities:
Segregated cash due to broker		39,166
Payable for:
Return of securities loaned		83,061
Securities purchased		15,601
Fund shares redeemed		15,582
Licensing fees		10,330
Management fees		9,142
Transfer agent and administrative fees		2,539
Portfolio accounting fees		1,016
Distribution and service fees		912
Miscellaneous		4,560
Total liabilities		181,909
Commitments and contingent liabilities (Note 13)		—
Net assets	$	12,736,526
Net assets consist of:
Paid in capital	$	13,203,841
Undistributed net investment income		185,505
Accumulated net realized loss on investments		(752,873	)
Net unrealized appreciation on investments		100,053
Net assets	$	12,736,526
A-Class:
Net assets	$	871,792
Capital shares outstanding		32,955
Net asset value per share	$	26.45
Maximum offering price per share (Net asset value divided by 95.25%)	$	27.77
C-Class:
Net assets	$	497,016
Capital shares outstanding		19,926
Net asset value per share	$	24.94
P-Class:
Net assets	$	1,439,123
Capital shares outstanding		54,403
Net asset value per share	$	26.45
Institutional Class:
Net assets	$	9,928,595
Capital shares outstanding		368,308
Net asset value per share	$	26.96

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

EVENT DRIVEN AND DISTRESSED STRATEGIES FUND

STATEMENT OF OPERATIONS

Year Ended March 31, 2017

Investment Income:
Dividends from securities of affiliated issuers	$	121,727
Dividends from securities of unaffiliated issuers (net of foreign withholding tax of $135)		19,236
Interest		6,480
Income from securities lending, net		113
Total investment income		147,556
Expenses:
Management fees		80,041
Transfer agent and administrative fees		22,234
Distribution and service fees:
A-Class		2,254
C-Class		6,928
P-Class		3,722
Portfolio accounting fees		8,893
Licensing fees		31,127
Custodian fees		1,282
Trustees’ fees*		653
Line of credit fees		21
Miscellaneous		13,832
Total expenses		170,987
Less:
Expenses waived by Adviser		(11,313	)
Net expenses		159,674
Net investment loss		(12,118	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments in unaffiliated issuers	$	(21,086	)
Investments in affiliated issuers		(2,419	)
Swap agreements		491,233
Futures contracts		6,621
Net realized gain		474,349
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		134,112
Investments in affiliated issuers		61,582
Swap agreements		(119,523	)
Futures contracts		(31,550	)
Net change in unrealized appreciation (depreciation)		44,621
Net realized and unrealized gain		518,970
Net increase in net assets resulting from operations	$	506,852

* 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, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(12,118	)	$	11,992
Net realized gain (loss) on investments		474,349			(141,050	)
Net change in unrealized appreciation (depreciation) on investments		44,621			(166,643	)
Net increase (decrease) in net assets resulting from operations		506,852			(295,701	)
Distributions to shareholders from:
Net investment income
A-Class		(29,624	)		(12,552	)
C-Class		(20,378	)		(14,515	)
P-Class		(46,774	)		(34,475	)*
Institutional Class		(168,247	)		(60,688	)
Total distributions to shareholders		(265,023	)		(122,230	)
Capital share transactions:
Proceeds from sale of shares
A-Class		250,425			271,562
C-Class		51,677			18,599
P-Class		273,654			592,653	*
Institutional Class		6,558,028			2,069,459
Distributions reinvested
A-Class		27,331			11,362
C-Class		20,350			14,503
P-Class		45,762			33,768	*
Institutional Class		167,793			60,495
Cost of shares redeemed
A-Class		(357,743	)		(682,794	)
C-Class		(471,976	)		(331,230	)
P-Class		(588,498	)		(2,108,872	)*
Institutional Class		(1,244,024	)		(1,434,110	)
Net increase (decrease) from capital share transactions		4,732,779			(1,484,605	)
Net increase (decrease) in net assets		4,974,608			(1,902,536	)
Net assets:
Beginning of year		7,761,918			9,664,454
End of year	$	12,736,526		$	7,761,918
Undistributed net investment income at end of year	$	185,505		$	263,164
Capital share activity:
Shares sold
A-Class		9,471			10,542
C-Class		2,046			741
P-Class		10,369			22,446	*
Institutional Class		244,474			78,280
Shares issued from reinvestment of distributions
A-Class		1,044			455
C-Class		822			609
P-Class		1,747			1,353	*
Institutional Class		6,294			2,387
Shares redeemed
A-Class		(13,552	)		(26,123	)
C-Class		(18,794	)		(13,297	)
P-Class		(22,397	)		(82,826	)*
Institutional Class		(46,313	)		(54,656	)
Net increase (decrease) in shares		175,211			(60,089	)

* H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015.

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	25.76		$	26.82		$	28.42		$	27.56		$	25.37
Income (loss) from investment operations:
Net investment income (loss)a		(.07	)		.03			(.31	)		(.49	)		(.21	)
Net gain (loss) on investments (realized and unrealized)		1.63			(.72	)		(.09	)		3.09			2.40
Total from investment operations		1.56			(.69	)		(.40	)		2.60			2.19
Less distributions from:
Net investment income		(.87	)		(.37	)		(.06	)		—			—
Net realized gains		—			—			(1.14	)		(1.74	)		—
Total distributions		(.87	)		(.37	)		(1.20	)		(1.74	)		—
Net asset value, end of period	$	26.45		$	25.76		$	26.82		$	28.42		$	27.56
Total Returnb		6.11	%		(2.52	%)		(1.18	%)		9.58	%		8.63	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	872		$	927		$	1,371		$	4,303		$	2,080
Ratios to average net assets:
Net investment income (loss)		(0.25	%)		0.11	%		(1.10	%)		(1.73	%)		(0.80	%)
Total expensesc		2.02	%		2.00	%		2.01	%		2.02	%		2.03	%
Net expensesd		1.90	%		1.90	%		1.90	%		1.90	%		1.91	%
Portfolio turnover rate		47	%		32	%		107	%		161	%		228	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	24.52		$	25.74		$	27.53		$	26.95		$	24.99
Income (loss) from investment operations:
Net investment income (loss)a		(.25	)		(.16	)		(.45	)		(.67	)		(.43	)
Net gain (loss) on investments (realized and unrealized)		1.54			(.69	)		(.14	)		2.99			2.39
Total from investment operations		1.29			(.85	)		(.59	)		2.32			1.96
Less distributions from:
Net investment income		(.87	)		(.37	)		(.06	)		—			—
Net realized gains		—			—			(1.14	)		(1.74	)		—
Total distributions		(.87	)		(.37	)		(1.20	)		(1.74	)		—
Net asset value, end of period	$	24.94		$	24.52		$	25.74		$	27.53		$	26.95
Total Returnb		5.31	%		(3.25	%)		(1.92	%)		8.74	%		7.89	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	497		$	879		$	1,230		$	1,253		$	1,038
Ratios to average net assets:
Net investment income (loss)		(0.98	%)		(0.64	%)		(1.68	%)		(2.45	%)		(1.67	%)
Total expensesc		2.77	%		2.75	%		2.75	%		2.77	%		2.79	%
Net expensesd		2.64	%		2.65	%		2.65	%		2.65	%		2.66	%
Portfolio turnover rate		47	%		32	%		107	%		161	%		228	%

34 | 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.

P-Class*	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	25.76		$	26.82		$	28.42		$	27.57		$	25.37
Income (loss) from investment operations:
Net investment income (loss)a		(.06	)		.02			(.29	)		(.49	)		(.23	)
Net gain (loss) on investments (realized and unrealized)		1.62			(.71	)		(.11	)		3.08			2.43
Total from investment operations		1.56			(.69	)		(.40	)		2.59			2.20
Less distributions from:
Net investment income		(.87	)		(.37	)		(.06	)		—			—
Net realized gains		—			—			(1.14	)		(1.74	)		—
Total distributions		(.87	)		(.37	)		(1.20	)		(1.74	)		—
Net asset value, end of period	$	26.45		$	25.76		$	26.82		$	28.42		$	27.57
Total Returnb		6.11	%		(2.52	%)		(1.18	%)		9.54	%		8.67	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	1,439		$	1,667		$	3,318		$	6,809		$	6,134
Ratios to average net assets:
Net investment income (loss)		(0.24	%)		0.09	%		(1.05	%)		(1.72	%)		(0.88	%)
Total expensesc		2.02	%		2.00	%		2.01	%		2.02	%		2.03	%
Net expensesd		1.90	%		1.90	%		1.90	%		1.90	%		1.91	%
Portfolio turnover rate		47	%		32	%		107	%		161	%		228	%

Institutional Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014			Year Ended March 28, 2013
Per Share Data
Net asset value, beginning of period	$	26.18		$	27.17		$	28.71		$	27.76		$	25.49
Income (loss) from investment operations:
Net investment income (loss)a		—	e		.10			(.16	)		(.42	)		(.19	)
Net gain (loss) on investments (realized and unrealized)		1.65			(.72	)		(.18	)		3.11			2.46
Total from investment operations		1.65			(.62	)		(.34	)		2.69			2.27
Less distributions from:
Net investment income		(.87	)		(.37	)		(.06	)		—			—
Net realized gains		—			—			(1.14	)		(1.74	)		—
Total distributions		(.87	)		(.37	)		(1.20	)		(1.74	)		—
Net asset value, end of period	$	26.96		$	26.18		$	27.17		$	28.71		$	27.76
Total Returnb		6.36	%		(2.23	%)		(0.96	%)		9.84	%		8.91	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	9,929		$	4,289		$	3,746		$	975		$	891
Ratios to average net assets:
Net investment income (loss)		0.01	%		0.37	%		(0.57	%)		(1.46	%)		(0.70	%)
Total expensesc		1.78	%		1.75	%		1.75	%		1.77	%		1.80	%
Net expensesd		1.65	%		1.65	%		1.65	%		1.65	%		1.67	%
Portfolio turnover rate		47	%		32	%		107	%		161	%		228	%

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.
e	Net investment income is less than $0.01 per share.
*	H-Class shares redesignated as P-Class shares effective following the close of business on April 30, 2015.

SEE NOTES TO FINANCIAL STATEMENTS. THE RYDEX FUNDS ANNUAL REPORT | 35

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Emerging Markets 2x Strategy Fund H-Class returned 36.04%, while the BNY Mellon Emerging Markets 50 ADR Index returned 20.34% over the same period. For comparison, the S&P 500 Index returned 17.17%.

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 Financials. The sectors detracting the most from the return of the underlying index were Industrials and Utilities.

Among the stocks in the underlying benchmark which rose the most over the past year were Vale S.A., Vale SA (Preferred), and Petroleo Brasileiro (Preferred). Among stocks in the underlying benchmark which fell the most over the past year were Angolgold Ashanti Ltd., Korea Electric Power Corp., and Wipro Ltd.

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.

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

36 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

COUNTRY DIVERSIFICATION

At March 31, 2017, the investment diversification of the Fund by country was as follows:

Country	% of Common Stocks	Value
China	37%	$1,137,141
Brazil	19%	575,675
Taiwan, Province of China	15%	457,891
India	9%	272,800
Republic of Korea	8%	261,701
Mexico	5%	167,548
Cayman Islands	3%	94,704
Other	4%	142,872
Total Common Stocks	100%	$3,110,332

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	4.9%
Alibaba Group Holding Ltd. ADR	4.7%
China Mobile Ltd. ADR	2.4%
Baidu, Inc. ADR	1.9%
Itau Unibanco Holding S.A. ADR	1.6%
Infosys Ltd. ADR	1.3%
HDFC Bank Ltd. ADR	1.3%
JD.com, Inc. ADR	1.2%
Banco Bradesco S.A. ADR	1.1%
Ambev S.A. ADR	1.0%
Top Ten Total	21.4%

“Ten Largest Holdings” excludes any temporary cash or derivative investments.

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	Since Inception (10/29/10)
A-Class Shares	36.17%	-6.66%	-9.30%
A-Class Shares with sales charge†	29.71%	-7.57%	-9.98%
C-Class Shares	35.19%	-7.29%	-9.78%
C-Class Shares with CDSC‡	34.19%	-7.29%	-9.78%
H-Class Shares	36.04%	-6.74%	-9.30%
BNY Mellon Emerging Markets 50 ADR Index	20.34%	-0.35%	-1.02%
S&P 500 Index	17.17%	13.30%	10.59%

*	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 | 37

SCHEDULE OF INVESTMENTS	March 31, 2017
EMERGING MARKETS 2x STRATEGY FUND

	Shares		Value
COMMON STOCKS† - 36.0%
Communications - 14.7%
Alibaba Group Holding Ltd. ADR*		3,385	$	365,004
China Mobile Ltd. ADR		3,408		188,224
Baidu, Inc. ADR*		838		144,572
JD.com, Inc. ADR*		2,968		92,334
Ctrip.com International Ltd. ADR*		1,196		58,783
America Movil SAB de CV — Class L ADR		3,729		52,840
Telekomunikasi Indonesia Persero Tbk PT ADR		1,529		47,660
Chunghwa Telecom Company Ltd. ADR		1,176		39,960
Grupo Televisa SAB ADR		1,514		39,273
SK Telecom Company Ltd. ADR		1,102		27,748
China Unicom Hong Kong Ltd. ADR		1,850		24,920
China Telecom Corporation Ltd. ADR		430		20,928
Mobile TeleSystems PJSC ADR		1,546		17,052
Vipshop Holdings Ltd. ADR*		1,111		14,821
Total Communications				1,134,119
Technology - 8.0%
Taiwan Semiconductor Manufacturing Company Ltd. ADR		11,554		379,433
Infosys Ltd. ADR		6,181		97,660
NetEase, Inc. ADR		230		65,320
Advanced Semiconductor Engineering, Inc. ADR		3,748		24,287
Wipro Ltd. ADR		1,806		18,475
Semiconductor Manufacturing International Corp. ADR*		2,319		14,563
United Microelectronics Corp. ADR		7,363		14,211
Total Technology				613,949
Financial - 4.3%
HDFC Bank Ltd. ADR		1,283		96,508
China Life Insurance Company Ltd. ADR		4,606		70,610
Shinhan Financial Group Company Ltd. ADR*		1,468		61,348
KB Financial Group, Inc. ADR*		1,294		56,897
ICICI Bank Ltd. ADR		4,400		37,840
Banco Santander Brasil S.A. ADR1		514		4,533
Total Financial				327,736
Energy - 3.8%
China Petroleum & Chemical Corp. ADR		790		64,393
CNOOC Ltd. ADR		497		59,541
PetroChina Company Ltd. ADR		653		47,832
Sasol Ltd. ADR		1,571		46,187
Petroleo Brasileiro S.A. ADR*		4,607		44,642
Ultrapar Participacoes S.A. ADR1		1,312		29,822
Total Energy				292,417
Consumer, Non-cyclical - 1.8%
Ambev S.A. ADR		13,616		78,428
Fomento Economico Mexicano SAB de CV ADR		408		36,116
BRF S.A. ADR		1,879		23,018
Total Consumer, Non-cyclical				137,562
Basic Materials - 1.5%
POSCO ADR		993		64,048
Vale S.A. ADR		3,983		37,839
AngloGold Ashanti Ltd. ADR		1,263		13,603
Total Basic Materials				115,490
Utilities - 0.9%
Korea Electric Power Corp. ADR*		1,590		32,960
Enel Americas S.A. ADR		1,768		18,370
CPFL Energia S.A. ADR		1,008		16,521
Total Utilities				67,851
Industrial - 0.7%
Cemex SAB de CV ADR*		4,335		39,319
LG Display Company Ltd. ADR*		1,373		18,700
Total Industrial				58,019
Consumer, Cyclical - 0.3%
Tata Motors Ltd. ADR		626		22,317
Total Common Stocks
(Cost $2,446,163)				2,769,460
PREFERRED STOCKS†† - 4.4%
Financial - 2.7%
Itau Unibanco Holding S.A. ADR		9,999		120,688
Banco Bradesco S.A. ADR		8,604		88,105
Total Financial				208,793
Energy - 0.8%
Petroleo Brasileiro S.A. ADR*		6,329		58,353
Basic Materials - 0.7%
Vale S.A. ADR		6,090		54,688
Communications - 0.2%
Telefonica Brasil S.A. ADR		1,282		19,038
Total Preferred Stocks
(Cost $280,102)				340,872
	Face Amount
REPURCHASE AGREEMENTS††,2 - 67.1%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	2,063,842		2,063,842
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/173		1,558,131		1,558,131
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		1,329,604		1,329,604

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

SCHEDULE OF INVESTMENTS (continued)	March 31, 2017
EMERGING MARKETS 2x STRATEGY FUND

	Face Amount		Value
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17	$	203,809	$	203,809
Total Repurchase Agreements
(Cost $5,155,386)				5,155,386
	Shares
SECURITIES LENDING COLLATERAL†,4 - 0.4%
First American Government Obligations Fund — Class Z, 0.61%5		26,615		26,615
Total Securities Lending Collateral
(Cost $26,615)				26,615
Total Investments - 107.9%
(Cost $7,908,266)			$	8,292,333
Other Assets & Liabilities, net - (7.9)%				(604,452	)
Total Net Assets - 100.0%			$	7,687,881

	Contracts		Unrealized Loss
EQUITY FUTURES CONTRACTS PURCHASED†
June 2017 MSCI Emerging Markets Index Mini Futures Contracts (Aggregate Value of Contracts $961,100)		20	$	(9,383	)
	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International April 2017 Bank of New York Mellon Emerging Markets 50 ADR Index Swap 1.51%6, Terminating 04/27/17 (Notional Value $4,649,170)		1,988	$	(3,383	)
BNP Paribas April 2017 Bank of New York Mellon Emerging Markets 50 ADR Index Swap 1.23%6, Terminating 04/28/17 (Notional Value $6,727,401)		2,877		(5,561	)
(Total Notional Value $11,376,571)			$	(8,944	)

*	Non-income producing security.
†	Value determined based on Level 1 inputs — See Note 4.
††	Value determined based on Level 2 inputs — See Note 4.
1	All or portion of this security is on loan at March 31, 2017 — See Note 6.
2	Repurchase Agreements — See Note 5.
3	All or a portion of this security is pledged as equity index swap collateral at March 31, 2017.
4	Securities lending collateral — See Note 6.
5	Rate indicated is the 7 day yield as of March 31, 2017.
6	Total Return based on Bank of New York Mellon Emerging Markets 50 ADR Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	ADR — American Depositary Receipt
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
EMERGING MARKETS 2x STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	2,769,460	$	—	$	—	$	—	$	—	$	2,769,460
Preferred Stocks		340,872		—		—		—		—		340,872
Repurchase Agreements		—		—		5,155,386		—		—		5,155,386
Securities Lending Collateral		26,615		—		—		—		—		26,615
Total	$	3,136,947	$	—	$	5,155,386	$	—	$	—	$	8,292,333
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Futures Contracts	$	—	$	9,383	$	—	$	—	$	—	$	9,383
Equity Index Swap Agreements		—		—		—		8,944		—		8,944
Total	$	—	$	9,383	$	—	$	8,944	$	—	$	18,327

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

EMERGING MARKETS 2x STRATEGY FUND

STATEMENT OF ASSETS
AND LIABILITIES

March 31, 2017
Assets:
Investments, at value - including $25,694 of securities loaned (cost $2,752,880)	$	3,136,947
Repurchase agreements, at value (cost $5,155,386)		5,155,386
Total investments (cost $7,908,266)		8,292,333
Segregated cash with broker		40,000
Cash		1,086
Receivables:
Swap settlement		8,747
Fund shares sold		393,959
Dividends		357
Foreign taxes reclaim		587
Interest		101
Securities lending income		6
Total assets		8,737,176
Liabilities:
Unrealized depreciation on swap agreements		8,944
Payable for:
Fund shares redeemed		993,219
Return of securities loaned		26,615
Variation margin		7,401
Management fees		5,962
Distribution and service fees		1,981
Transfer agent and administrative fees		1,656
Portfolio accounting fees		994
Miscellaneous		2,523
Total liabilities		1,049,295
Commitments and contingent liabilities (Note 13)		—
Net assets	$	7,687,881
Net assets consist of:
Paid in capital	$	18,251,855
Accumulated net investment loss		(27,012	)
Accumulated net realized loss on investments		(10,902,702	)
Net unrealized appreciation on investments		365,740
Net assets	$	7,687,881
A-Class:
Net assets	$	628,477
Capital shares outstanding		10,304
Net asset value per share	$	60.99
Maximum offering price per share (Net asset value divided by 95.25%)	$	64.03
C-Class:
Net assets	$	361,091
Capital shares outstanding		6,131
Net asset value per share	$	58.90
H-Class:
Net assets	$	6,698,313
Capital shares outstanding		109,793
Net asset value per share	$	61.01

STATEMENT OF
OPERATIONS

Year Ended March 31, 2017
Investment Income:
Dividends (net of foreign withholding tax of $3,909)	$	117,035
Interest		18,314
Income from securities lending, net		99
Total investment income		135,448
Expenses:
Management fees		129,372
Transfer agent and administrative fees		35,939
Distribution and service fees:
A-Class		1,888
C-Class		4,367
H-Class		32,962
Portfolio accounting fees		21,564
Custodian fees		2,371
Trustees’ fees*		1,733
Line of credit fees		111
Miscellaneous		26,948
Total expenses		257,255
Net investment loss		(121,807	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		856,198
Swap agreements		3,398,157
Futures contracts		381,918
Net realized gain		4,636,273
Net change in unrealized appreciation (depreciation) on:
Investments		(600,740	)
Swap agreements		(379,901	)
Futures contracts		(43,815	)
Net change in unrealized appreciation (depreciation)		(1,024,456	)
Net realized and unrealized gain		3,611,817
Net increase in net assets resulting from operations	$	3,490,010

* 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 | 41

EMERGING MARKETS 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(121,807	)	$	(78,148	)
Net realized gain (loss) on investments		4,636,273			(4,039,656	)
Net change in unrealized appreciation (depreciation) on investments		(1,024,456	)		1,263,242
Net increase (decrease) in net assets resulting from operations		3,490,010			(2,854,562	)
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		7,359,066			43,678,611
C-Class		9,705,258			20,590,651
H-Class		466,810,421			334,036,652
Distributions reinvested
A-Class		—			12,352
C-Class		—			4,644
H-Class		—			35,584
Cost of shares redeemed
A-Class		(10,731,054	)		(40,616,785	)
C-Class		(9,726,582	)		(21,571,134	)
H-Class		(476,717,148	)		(319,569,790	)
Net increase (decrease) from capital share transactions		(13,300,039	)		16,600,785
Net increase (decrease) in net assets		(9,810,029	)		13,693,013
Net assets:
Beginning of year		17,497,910			3,804,897
End of year	$	7,687,881		$	17,497,910
Accumulated net investment loss at end of year	$	(27,012	)	$	(33,899	)
Capital share activity:
Shares sold
A-Class		150,599			896,183
C-Class		187,596			401,507
H-Class		9,608,705			6,540,164
Shares issued from reinvestment of distributions
A-Class		—			288
C-Class		—			111
H-Class		—			830
Shares redeemed
A-Class		(229,335	)		(813,738	)
C-Class		(187,698	)		(417,067	)
H-Class		(9,794,119	)		(6,281,031	)
Net increase (decrease) in shares		(264,252	)		327,247

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	44.79		$	60.50		$	66.27		$	73.59		$	87.40
Income (loss) from investment operations:
Net investment income (loss)a		(.48	)		(.23	)		(.37	)		(.54	)		(.35	)
Net gain (loss) on investments (realized and unrealized)		16.68			(14.83	)		(5.40	)		(6.78	)		(13.46	)
Total from investment operations		16.20			(15.06	)		(5.77	)		(7.32	)		(13.81	)
Less distributions from:
Net investment income		—			(.65	)		—			—			—
Total distributions		—			(.65	)		—			—			—
Net asset value, end of period	$	60.99		$	44.79		$	60.50		$	66.27		$	73.59
Total Returnb		36.17	%		(24.84	%)		(8.72	%)		(9.96	%)		(15.79	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	628		$	3,988		$	382		$	744		$	106
Ratios to average net assets:
Net investment income (loss)		(0.96	%)		(0.48	%)		(0.53	%)		(0.82	%)		(0.51	%)
Total expenses		1.76	%		1.75	%		1.75	%		1.81	%		1.88	%
Net expenses		1.76	%		1.75	%		1.75	%		1.76	%c		1.75	%c
Portfolio turnover rate		2,568	%		2,874	%		1,085	%		1,412	%		730	%

C-Class	Year Ended March 31, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	43.56		$	59.37		$	65.46		$	72.92		$	87.31
Income (loss) from investment operations:
Net investment income (loss)a		(.79	)		(.74	)		(.73	)		(1.04	)		(1.25	)
Net gain (loss) on investments (realized and unrealized)		16.13			(14.42	)		(5.36	)		(6.42	)		(13.14	)
Total from investment operations		15.34			(15.16	)		(6.09	)		(7.46	)		(14.39	)
Less distributions from:
Net investment income		—			(.65	)		—			—			—
Total distributions		—			(.65	)		—			—			—
Net asset value, end of period	$	58.90		$	43.56		$	59.37		$	65.46		$	72.92
Total Returnb		35.19	%		(25.48	%)		(9.32	%)		(10.21	%)		(16.49	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	361		$	271		$	1,287		$	409		$	108
Ratios to average net assets:
Net investment income (loss)		(1.55	%)		(1.49	%)		(0.99	%)		(1.73	%)		(1.61	%)
Total expenses		2.50	%		2.46	%		2.48	%		2.66	%		2.59	%
Net expenses		2.50	%		2.46	%		2.48	%		2.61	%c		2.46	%c
Portfolio turnover rate		2,568	%		2,874	%		1,085	%		1,412	%		730	%

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

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, 2017			Year Ended March 31, 2016			Year Ended March 31, 2015			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	44.84		$	60.61		$	66.37		$	73.87		$	87.74
Income (loss) from investment operations:
Net investment income (loss)a		(.42	)		(.41	)		.20			(.34	)		(.35	)
Net gain (loss) on investments (realized and unrealized)		16.59			(14.71	)		(5.96	)		(7.16	)		(13.52	)
Total from investment operations		16.17			(15.12	)		(5.76	)		(7.50	)		(13.87	)
Less distributions from:
Net investment income		—			(.65	)		—			—			—
Total distributions		—			(.65	)		—			—			—
Net asset value, end of period	$	61.01		$	44.84		$	60.61		$	66.37		$	73.87
Total Returnb		36.04	%		(24.88	%)		(8.71	%)		(10.19	%)		(15.78	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	6,698		$	13,238		$	2,136		$	4,719		$	2,087
Ratios to average net assets:
Net investment income (loss)		(0.82	%)		(0.76	%)		0.25	%		(0.51	%)		(0.49	%)
Total expenses		1.76	%		1.74	%		1.75	%		1.80	%		1.83	%
Net expenses		1.76	%		1.74	%		1.75	%		1.74	%c		1.69	%c
Portfolio turnover rate		2,568	%		2,874	%		1,085	%		1,412	%		730	%

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	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.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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, 2017, Inverse Emerging Markets 2x Strategy Fund H-Class returned -37.80%, while the BNY Mellon Emerging Markets 50 ADR Index returned 20.34% over the same period. For comparison, the S&P 500 Index returned 17.17%.

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 Financials. The sectors detracting the most from the return of the underlying index were Industrials and Utilities.

Among the stocks in the underlying benchmark which rose the most over the past year were Vale S.A., Vale S.A. (Preferred), and Petroleo Brasileiro (Preferred). Among stocks in the underlying benchmark which fell the most over the past year were Angolgold Ashanti Ltd., Korea Electric Power Corp., and Wipro Ltd.

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

The Fund invests principally in derivative investments such as swap agreements and futures contracts.

THE RYDEX FUNDS ANNUAL REPORT | 45

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

 

 

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	5 Year	Since Inception (10/29/10)
A-Class Shares	-37.72%	-11.33%	-12.55%
A-Class Shares with sales charge†	-40.69%	-12.19%	-13.21%
C-Class Shares	-38.17%	-11.97%	-12.38%
C-Class Shares with CDSC‡	-38.78%	-11.97%	-12.38%
H-Class Shares	-37.80%	-11.45%	-12.64%
BNY Mellon Emerging Markets 50 ADR Index	20.34%	-0.35%	-1.02%
S&P 500 Index	17.17%	13.30%	10.59%

*	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.

46 | THE RYDEX FUNDS ANNUAL REPORT

SCHEDULE OF INVESTMENTS	March 31, 2017
INVERSE EMERGING MARKETS 2x STRATEGY FUND

	Face Amount		Value
REPURCHASE AGREEMENTS††,1 - 84.3%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	369,218	$	369,218
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		237,864		237,864
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/172		190,256		190,256
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		36,461		36,461
Total Repurchase Agreements
(Cost $833,799)				833,799
Total Investments - 84.3%
(Cost $833,799)			$	833,799
Other Assets & Liabilities, net - 15.7%				154,945
Total Net Assets - 100.0%			$	988,744

	Contracts		Unrealized Gain
EQUITY FUTURES CONTRACTS SOLD SHORT†
June 2017 MSCI Emerging Markets Index Mini Futures Contracts (Aggregate Value of Contracts $48,055)		1	$	648
	Units
OTC EQUITY INDEX SWAP AGREEMENTS SOLD SHORT††
Goldman Sachs International April 2017 Bank of New York Mellon Emerging Markets 50 ADR Index Swap 0.51%3, Terminating 04/27/17 (Notional Value $716,684)		307	$	3,997
BNP Paribas April 2017 Bank of New York Mellon Emerging Markets 50 ADR Index Swap 0.33%3, Terminating 04/28/17 (Notional Value $1,218,921)		521		2,745
(Total Notional Value $1,935,605)			$	6,742

†	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, 2017.
3	Total Return based on Bank of New York Mellon Emerging Markets 50 ADR Index +/- financing at a variable rate. Rate indicated is the rate effective at March 31, 2017.
	See Sector Classification in Other Information section.

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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	$	—	$	648	$	—	$	—	$	—	$	648
Equity Index Swap Agreements		—		—		—		6,742		—		6,742
Repurchase Agreements		—		—		833,799		—		—		833,799
Total	$	—	$	648	$	833,799	$	6,742	$	—	$	841,189

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

INVERSE EMERGING MARKETS 2x STRATEGY FUND

STATEMENT OF ASSETS
AND LIABILITIES

March 31, 2017
Assets:
Repurchase agreements, at value (cost $833,799)		833,799
Unrealized appreciation on swap agreements		6,742
Segregated cash with broker		2,000
Receivables:
Variation margin		346
Fund shares sold		257,861
Interest		17
Total assets		1,100,765
Liabilities:
Payable for:
Fund shares redeemed		106,117
Swap settlement		3,251
Management fees		1,042
Distribution and service fees		348
Transfer agent and administrative fees		289
Portfolio accounting fees		174
Miscellaneous		800
Total liabilities		112,021
Commitments and contingent liabilities (Note 13)		—
Net assets	$	988,744
Net assets consist of:
Paid in capital	$	18,300,840
Accumulated net investment loss		(7,485	)
Accumulated net realized loss on investments		(17,312,001	)
Net unrealized appreciation on investments		7,390
Net assets	$	988,744
A-Class:
Net assets	$	42,489
Capital shares outstanding		670
Net asset value per share	$	63.42
Maximum offering price per share (Net asset value divided by 95.25%)	$	66.58
C-Class:
Net assets	$	55,797
Capital shares outstanding		869
Net asset value per share	$	64.21
H-Class:
Net assets	$	890,458
Capital shares outstanding		14,134
Net asset value per share	$	63.00

STATEMENT OF
OPERATIONS

Year Ended March 31, 2017
Investment Income:
Interest	$	10,217
Total investment income		10,217
Expenses:
Management fees		31,691
Transfer agent and administrative fees		8,805
Distribution and service fees:
A-Class		1,513
C-Class		3,364
H-Class		6,454
Portfolio accounting fees		5,286
Registration fees		3,684
Custodian fees		550
Trustees’ fees*		329
Miscellaneous		2,883
Total expenses		64,559
Net investment loss		(54,342	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Swap agreements		(83,110	)
Futures contracts		44,948
Net realized loss		(38,162	)
Net change in unrealized appreciation (depreciation) on:
Swap agreements		50,789
Futures contracts		508
Net change in unrealized appreciation (depreciation)		51,297
Net realized and unrealized gain		13,135
Net decrease in net assets resulting from operations	$	(41,207	)

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

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

INVERSE EMERGING MARKETS 2x STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment loss	$	(54,342	)	$	(314,989	)
Net realized loss on investments		(38,162	)		(5,074,320	)
Net change in unrealized appreciation (depreciation) on investments		51,297			538,806
Net decrease in net assets resulting from operations		(41,207	)		(4,850,503	)
Capital share transactions:
Proceeds from sale of shares
A-Class		13,480,032			6,224,104
C-Class		9,025,499			26,363,997
H-Class		132,741,268			537,108,862
Cost of shares redeemed
A-Class		(13,425,091	)		(5,365,150	)
C-Class		(9,161,419	)		(26,282,809	)
H-Class		(158,785,532	)		(529,298,402	)
Net increase (decrease) from capital share transactions		(26,125,243	)		8,750,602
Net increase (decrease) in net assets		(26,166,450	)		3,900,099
Net assets:
Beginning of year		27,155,194			23,255,095
End of year	$	988,744		$	27,155,194
Accumulated net investment loss at end of year	$	(7,485	)	$	(91,444	)
Capital share activity:*
Shares sold
A-Class		130,919			55,718
C-Class		113,460			232,722
H-Class		1,618,259			4,499,527
Shares redeemed
A-Class		(134,646	)		(51,934	)
C-Class		(116,168	)		(230,126	)
H-Class		(1,864,161	)		(4,468,573	)
Net increase (decrease) in shares		(252,337	)		37,334

* Capital share activity for the periods presented through March 31, 2017, has been restated to reflect a 1:6 reverse share split effective October 31, 2016 — See Note 12.

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

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, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	101.83		$	101.26		$	110.02		$	115.35		$	115.71
Income (loss) from investment operations:
Net investment income (loss)a		(1.42	)		(1.92	)		(1.74	)		(2.10	)		(1.98	)
Net gain (loss) on investments (realized and unrealized)		(36.99	)		2.49			(7.02	)		(3.23	)		1.62
Total from investment operations		(38.41	)		.57			(8.76	)		(5.33	)		(.36	)
Net asset value, end of period	$	63.42		$	101.83		$	101.26		$	110.02		$	115.35
Total Returnb		(37.72	%)		0.53	%		(7.96	%)		(4.63	%)		(0.26	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	42		$	448		$	62		$	4,859		$	258
Ratios to average net assets:
Net investment income (loss)		(1.50	%)		(1.59	%)		(1.74	%)		(1.74	%)		(1.60	%)
Total expenses		1.75	%		1.75	%		1.75	%		1.78	%		1.85	%
Net expenses		1.75	%		1.75	%		1.75	%		1.75	%c		1.71	%c
Portfolio turnover rate		—			—			—			—			—

C-Class	Year Ended March 31, 2017d			Year Ended March 31, 2016d			Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	103.83		$	104.23		$	114.21		$	120.45		$	121.50
Income (loss) from investment operations:
Net investment income (loss)a		(1.88	)		(2.82	)		(2.34	)		(3.12	)		(2.94	)
Net gain (loss) on investments (realized and unrealized)		(37.74	)		2.42			(7.64	)		(3.12	)		1.89
Total from investment operations		(39.62	)		(.40	)		(9.98	)		(6.24	)		(1.05	)
Net asset value, end of period	$	64.21		$	103.83		$	104.23		$	114.21		$	120.45
Total Returnb		(38.17	%)		(0.29	%)		(8.78	%)		(5.23	%)		(0.84	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	56		$	371		$	102		$	262		$	115
Ratios to average net assets:
Net investment income (loss)		(2.20	%)		(2.44	%)		(2.47	%)		(2.44	%)		(2.41	%)
Total expenses		2.48	%		2.50	%		2.48	%		2.48	%		2.65	%
Net expenses		2.48	%		2.50	%		2.48	%		2.46	%c		2.51	%c
Portfolio turnover rate		—			—			—			—			—

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

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, 2017d			Year Ended March 31, 2016d				Year Ended March 31, 2015d			Year Ended March 31, 2014d			Year Ended March 28, 2013d
Per Share Data
Net asset value, beginning of period	$	101.28		$	100.80		��	$	109.97		$	115.31		$	115.73
Income (loss) from investment operations:
Net investment income (loss)a		(1.23	)		(2.04	)			(1.68	)		(2.10	)		(1.98	)
Net gain (loss) on investments (realized and unrealized)		(37.05	)		2.52				(7.49	)		(3.24	)		1.56
Total from investment operations		(38.28	)		.48				(9.17	)		(5.34	)		(.42	)
Net asset value, end of period	$	63.00		$	101.28			$	100.80		$	109.97		$	115.31
Total Returnb		(37.80	%)		0.48	%			(8.35	%)		(4.63	%)		(0.36	%)
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	890		$	26,336			$	23,091		$	5,815		$	1,942
Ratios to average net assets:
Net investment income (loss)		(1.46	%)		(1.65	%)			(1.71	%)		(1.74	%)		(1.56	%)
Total expenses		1.76	%		1.74	%			1.73	%		1.78	%		1.82	%
Net expenses		1.76	%		1.74	%			1.73	%		1.76	%c		1.68	%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	Reverse share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 1:6 reverse share split effective October 31, 2016 — See Note 12.

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

PERFORMANCE REPORT AND FUND PROFILE (Unaudited) March 31, 2017

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 4.85% for the one-year period ended March 31, 2017. By comparison, the BofA Merrill Lynch U.S. Dollar Emerging Markets Sovereign Plus Index returned 8.30% over the same period.

Increased global economic stability over the past year has led to the contraction of credit spreads across emerging markets countries. In addition, the stabilization of oil prices has had a positive effect on the credit spreads of countries with a high dependency to oil revenues.

Brazil, Colombia and Russia were among the countries which experienced the largest decrease in credit spreads. During this period, Argentina was added to the Emerging Market credit default swap.

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 derivative instruments such as swap agreements and futures contracts.

52 | THE RYDEX FUNDS ANNUAL REPORT

PERFORMANCE REPORT AND FUND PROFILE (Unaudited)(concluded) March 31, 2017

Cumulative Fund Performance*

 

 

Average Annual Returns*

Periods Ended March 31, 2017

	1 Year	Since Inception (10/08/13)
A-Class Shares	4.62%	1.39%
A-Class Shares with sales charge†	-0.36%	-0.03%
C-Class Shares	4.09%	0.48%
C-Class Shares with CDSC‡	3.10%	0.48%
H-Class Shares	4.85%	1.25%
BofA Merrill Lynch U.S. Dollar Emerging Markets Sovereign Plus Index	8.30%	6.25%

*	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 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.

THE RYDEX FUNDS ANNUAL REPORT | 53

SCHEDULE OF INVESTMENTS	March 31, 2017
EMERGING MARKETS BOND STRATEGY FUND

	Face Amount		Value
REPURCHASE AGREEMENTS††,1 - 78.6%
RBC Capital Markets LLC issued 03/31/17 at 0.72% due 04/03/17	$	281,892	$	281,892
HSBC Securities, Inc. issued 03/31/17 at 0.68% due 04/03/17		181,605		181,605
Mizuho Securities LLC issued 03/31/17 at 0.71% due 04/03/17		39,331		39,331
UMB Financial Corp. issued 03/31/17 at 0.68% due 04/03/17		27,837		27,837
Total Repurchase Agreements
(Cost $530,665)				530,665
Total Investments - 78.6%
(Cost $530,665)			$	530,665
Other Assets & Liabilities, net - 21.4%				144,103
Total Net Assets - 100.0%			$	674,768

	Contracts		Unrealized Gain (Loss)
INTEREST RATE FUTURES CONTRACTS PURCHASED†
June 2017 U.S. Treasury 5 Year Note Futures Contracts (Aggregate Value of Contracts $353,156)		3	$	1,550
June 2017 U.S. Treasury 10 Year Note Futures Contracts (Aggregate Value of Contracts $124,563)		1		139
(Total Aggregate Value of Contracts $477,719)			$	1,689
	Units
OTC EQUITY INDEX SWAP AGREEMENTS††
Goldman Sachs International May 2017 PowerShares Emerging Markets Sovereign Debt Portfolio Swap 1.40%2, Terminating 05/03/17 (Notional Value $138,209)		4,756	$	42
Goldman Sachs International May 2017 iShares JP Morgan USD Emerging Markets Bond ETF Swap 1.30%3, Terminating 05/03/17 (Notional Value $159,407)		1,402		(8	)
(Total Notional Value $297,616)			$	34

CENTRALLY CLEARED CREDIT DEFAULT SWAP AGREEMENTS PROTECTION SOLD††,4
Index	Counterparty	Exchange	Protection Premium Rate			Maturity Date	Notional Principal		Notional Value			Upfront Premiums Received			Unrealized Appreciation
CDX.EM-27 Index	Barclays Bank plc	ICE		1.00	%	06/20/22	$	550,000	$	(520,979	)	$	(29,385	)	$	364

†	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	Total Return based on Power Shares Emerging Markets Sovereign Debt Portfolio +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2017.
3	Total Return based on iShares JP Morgan USD Emerging Markets Bond ETF +/- financing at a variable rate. Rate indicated is rate effective at March 31, 2017.
4	Credit Default Swaps — See Note 2.
	ICE — Intercontinental Exchange
	plc — Public Limited Company
	CDX.EM-27 Index — Credit Default Swap Emerging Markets Series 27 Index
	See Sector Classification in Other Information section.

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

SCHEDULE OF INVESTMENTS (concluded)	March 31, 2017
EMERGING MARKETS BOND STRATEGY FUND

The following table summarizes the inputs used to value the Fund’s investments at March 31, 2017 (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
Credit Default Swaps	$	—	$	—	$	—	$	364	$	—	$	364
Equity Index Swap Agreements		—		—		—		42		—		42
Interest Rate Futures Contracts		—		1,689		—		—		—		1,689
Repurchase Agreements		—		—		530,665		—		—		530,665
Total	$	—	$	1,689	$	530,665	$	406	$	—	$	532,760
Investments in Securities (Liabilities)	Level 1		Level 1 - Other*		Level 2		Level 2 - Other*		Level 3		Total
Equity Index Swap Agreements	$	—	$	—	$	—	$	8	$	—	$	8

* Other financial instruments include futures contracts and/or swaps, which are reported as unrealized gain/loss at period end.

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment’s valuation changes. Transfers between valuation levels, if any, are in comparison to the valuation levels at the end of the previous fiscal year, and are effective using the fair value as of the end of the previous fiscal period.

For the year ended March 31, 2017, there were no transfers between levels.

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

EMERGING MARKETS BOND STRATEGY FUND

STATEMENT OF ASSETS
AND LIABILITIES

March 31, 2017
Assets:
Repurchase agreements, at value (cost $530,665)		530,665
Segregated cash with broker		173,393
Unrealized appreciation on swap agreements		406
Receivables:
Variation margin		687
Interest		194
Total assets		705,345
Liabilities:
Unamortized upfront premiums received on credit default swaps		29,385
Unrealized depreciation on swap agreements		8
Payable for:
Management fees		401
Distribution and service fees		191
Transfer agent and administrative fees		134
Portfolio accounting fees		81
Fund shares redeemed		40
Miscellaneous		337
Total liabilities		30,577
Commitments and contingent liabilities (Note 13)		—
Net assets	$	674,768
Net assets consist of:
Paid in capital	$	780,912
Undistributed net investment income		—
Accumulated net realized gain on investments		(108,231	)
Net unrealized appreciation on investments		2,087
Net assets	$	674,768
A-Class:
Net assets	$	112,623
Capital shares outstanding		1,566
Net asset value per share	$	71.93
Maximum offering price per share (Net asset value divided by 95.25%)	$	75.52
C-Class:
Net assets	$	90,223
Capital shares outstanding		1,303
Net asset value per share	$	69.22
H-Class:
Net assets	$	471,922
Capital shares outstanding		6,599
Net asset value per share	$	71.51

STATEMENT OF
OPERATIONS

Year Ended March 31, 2017
Investment Income:
Dividends	$	31,747
Interest		15,388
Total investment income		47,135
Expenses:
Management fees		60,005
Transfer agent and administrative fees		20,004
Distribution and service fees:
A-Class		14,652
C-Class		1,224
H-Class		5,049
Portfolio accounting fees		12,003
Custodian fees		1,268
Trustees’ fees*		1,060
Miscellaneous		11,337
Total expenses		126,602
Net investment loss		(79,467	)
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		53,802
Swap agreements		252,142
Futures contracts		(251,980	)
Net realized gain		53,964
Net change in unrealized appreciation (depreciation) on:
Investments		(9,545	)
Swap agreements		1,906
Futures contracts		(1,462	)
Net change in unrealized appreciation (depreciation)		(9,101	)
Net realized and unrealized gain		44,863
Net decrease in net assets resulting from operations	$	(34,604	)

* 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.

EMERGING MARKETS BOND STRATEGY FUND

STATEMENTS OF CHANGES IN NET ASSETS

	Year Ended March 31, 2017			Year Ended March 31, 2016
Increase (Decrease) in Net Assets from Operations:
Net investment income (loss)	$	(79,467	)	$	27,754
Net realized gain on investments		53,964			728,098
Net change in unrealized appreciation (depreciation) on investments		(9,101	)		10,676
Net increase (decrease) in net assets resulting from operations		(34,604	)		766,528
Distributions to shareholders from:
Net investment income
A-Class		(62,397	)		(4,095	)
C-Class		(5,813	)		(6,486	)
H-Class		(31,424	)		(18,553	)
Net realized gains
A-Class		(8,051	)		—
C-Class		(642	)		—
H-Class		(24,807	)		—
Total distributions to shareholders		(133,134	)		(29,134	)
Capital share transactions:
Proceeds from sale of shares
A-Class		46,123,639			33,166,270
C-Class		129,666			183,968
H-Class		20,306,109			4,344,437
Distributions reinvested
A-Class		66,839			4,095
C-Class		5,889			4,976
H-Class		54,879			18,553
Cost of shares redeemed
A-Class		(46,053,913	)		(33,725,205	)
C-Class		(170,836	)		(90,538	)
H-Class		(20,219,716	)		(4,269,575	)
Net increase (decrease) from capital share transactions		242,556			(363,019	)
Net increase in net assets		74,818			374,375
Net assets:
Beginning of year		599,950			225,575
End of year	$	674,768		$	599,950
Undistributed net investment income at end of year	$	—		$	10,603
Capital share activity:*
Shares sold
A-Class		601,198			473,665
C-Class		1,803			2,515
H-Class		273,867			57,824
Shares issued from reinvestment of distributions
A-Class		963			60
C-Class		88			75
H-Class		778			273
Shares redeemed
A-Class		(604,151	)		(470,644	)
C-Class		(2,423	)		(1,173	)
H-Class		(270,980	)		(57,052	)
Net increase in shares		1,143			5,543

* Capital share activity for the periods presented through March 31, 2017, has been restated to reflect a 1:4 reverse share split effective November 7, 2016 — See Note 12.

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Period Ended March 31, 2014a,c
Per Share Data
Net asset value, beginning of period	$	72.75		$	81.52		$	100.68		$	100.00
Income (loss) from investment operations:
Net investment income (loss)b		(.91	)		1.12			(1.44	)		(.84	)
Net gain (loss) on investments (realized and unrealized)		3.87			2.23			(3.76	)		1.52
Total from investment operations		2.96			3.35			(5.20	)		.68
Less distributions from:
Net investment income		(3.70	)		(12.12	)		(13.96	)		—
Net realized gains		(.08	)		—			—			—
Total distributions		(3.78	)		(12.12	)		(13.96	)		—
Net asset value, end of period	$	71.93		$	72.75		$	81.52		$	100.68
Total Returnd		4.62	%		5.13	%		(5.31	%)		0.72	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	113		$	259		$	39		$	499
Ratios to average net assets:
Net investment income (loss)		(1.19	%)		1.59	%		(1.50	%)		(1.78	%)
Total expenses		1.58	%		1.58	%		1.71	%		1.83	%
Portfolio turnover rate		733	%		21,555	%		655	%		—

C-Class	Year Ended March 31, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Period Ended March 31, 2014a,c
Per Share Data
Net asset value, beginning of period	$	70.54		$	80.35		$	100.37		$	100.00
Income (loss) from investment operations:
Net investment income (loss)b		(1.10	)		(1.00	)		(1.80	)		(1.12	)
Net gain (loss) on investments (realized and unrealized)		3.56			3.31			(4.26	)		1.49
Total from investment operations		2.46			2.31			(6.06	)		.37
Less distributions from:
Net investment income		(3.70	)		(12.12	)		(13.96	)		—
Net realized gains		(.08	)		—			—			—
Total distributions		(3.78	)		(12.12	)		(13.96	)		—
Net asset value, end of period	$	69.22		$	70.54		$	80.35		$	100.37
Total Returnd		4.09	%		3.73	%		(6.19	%)		0.40	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	90		$	129		$	34		$	10
Ratios to average net assets:
Net investment income (loss)		(1.54	%)		(1.33	%)		(1.85	%)		(2.34	%)
Total expenses		2.33	%		2.32	%		2.24	%		2.39	%
Portfolio turnover rate		733	%		21,555	%		655	%		—

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

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, 2017c			Year Ended March 31, 2016c			Year Ended March 31, 2015c			Period Ended March 31, 2014a,c
Per Share Data
Net asset value, beginning of period	$	72.19		$	81.18		$	100.73		$	100.00
Income (loss) from investment operations:
Net investment income (loss)b		(.28	)		(.44	)		(1.56	)		(.76	)
Net gain (loss) on investments (realized and unrealized)		3.38			3.57			(4.03	)		1.49
Total from investment operations		3.10			3.13			(5.59	)		.73
Less distributions from:
Net investment income		(3.70	)		(12.12	)		(13.96	)		—
Net realized gains		(.08	)		—			—			—
Total distributions		(3.78	)		(12.12	)		(13.96	)		—
Net asset value, end of period	$	71.51		$	72.19		$	81.18		$	100.73
Total Returnd		4.85	%		4.82	%		(5.74	%)		0.80	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	472		$	212		$	153		$	5,580
Ratios to average net assets:
Net investment income (loss)		(0.38	%)		(0.55	%)		(1.64	%)		(1.62	%)
Total expenses		1.54	%		1.56	%		1.74	%		1.64	%
Portfolio turnover rate		733	%		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	Reverse share split — Per share amounts for the periods presented through March 31, 2017 have been restated to reflect a 1:4 reverse share split effective November 7, 2016 — See Note 12.
d	Total return does not reflect the impact of any applicable sales charges and has not been annualized.

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

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, 2017, 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.

Security Investors, LLC, which operates under the name Guggenheim Investments (“GI”), provides advisory services. Guggenheim Funds Distributors, LLC (“GFD”) acts as principal underwriter for the Trust. GI 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, 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, 2017, 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 and/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, to 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 and valuations provided by the pricing services.

60 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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.

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 values of OTC swap agreements and credit default swap agreements entered into by a Fund are accounted for using the unrealized gains or losses on the agreements that are determined by marking the agreements to the last quoted value of the index that the swaps pertain to at the close of the NYSE. The swaps’ values are then adjusted to include dividends accrued, 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 using methods established or ratified by the Board. 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 market prices; sale prices; broker quotes; and models which derive prices based on inputs such as prices of securities with comparable maturities and characteristics, or based on inputs such as anticipated cash flows or collateral, spread over Treasuries, and other information analysis.

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 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 an 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

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NOTES TO FINANCIAL STATEMENTS (continued)

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 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 0.82% at March 31, 2017.

J. Under the Funds’ organizational documents, the 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, the Fund will realize a gain on the transaction. Conversely, if the security increases in price during the period, the Fund will realize a loss on the transaction. The risk of such price increases is the principal risk of engaging in short sales.

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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:

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 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
Long Short Equity Fund	Index exposure, Liquidity	$	—	$	574,225
Event Driven and Distressed Strategies Fund	Index exposure, Liquidity, Duration		3,835,964		—
Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		1,194,466		—
Inverse Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		54,673
Emerging Markets Bond Strategy Fund	Index exposure, Leverage, Liquidity, Duration		1,105,996		—

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

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NOTES TO FINANCIAL STATEMENTS (continued)

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	$	351,396	$	—
Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		18,107,300		—
Inverse Emerging Markets 2x Strategy Fund	Index exposure, Leverage, Liquidity		—		4,222,245
Emerging Markets Bond Strategy Fund	Index exposure, Leverage, Liquidity, Duration		1,293,181		—

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.

The following table represents the Funds’ use and volume of credit default swaps on a quarterly basis:

		Average Notional
Fund	Use	Long		Short
Event Driven and Distressed Strategies Fund	Index exposure, Liquidity, Duration	$	4,197,268	$	—
Emerging Markets Bond Strategy Fund	Duration, Index exposure, Leverage, Liquidity		1,294,475		—

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.

64 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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, 2017:

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, 2017:

Asset Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2017
Long Short Equity Fund	$	2,656	$	—	$	—	$	—	$	2,656
Event Driven and Distressed Strategies Fund		6,275		—		1,842		14,239		22,356
Inverse Emerging Markets 2x Strategy Fund		648		6,742		—		—		7,390
Emerging Markets Bond Strategy Fund		—		42		1,689		364		2,095

Liability Derivative Investments Value
Fund	Futures Equity Contracts*		Swaps Equity Contracts		Futures Interest Rate Contracts*		Swaps Credit Default Contracts		Total Value at March 31, 2017
Emerging Markets 2x Strategy Fund	$	9,383	$	8,944	$	—	$	—	$	18,327
Emerging Markets Bond Strategy Fund		—		8		—		—		8

* 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, 2017:

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, 2017:

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	$	(153,719	)	$	—		$	—		$	—	$	(153,719	)
Event Driven and Distressed Strategies Fund		132,635			(27,709	)		(126,014	)		518,942		497,854
Emerging Markets 2x Strategy Fund		381,918			3,398,157			—			—		3,780,075
Inverse Emerging Markets 2x Strategy Fund		44,948			(83,110	)		—			—		(38,162	)
Emerging Markets Bond Strategy Fund		61			150,882			(252,041	)		101,260		162

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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 Value at March 31, 2017
Long Short Equity Fund	$	(3,281	)	$	—		$	—		$	—		$	(3,281	)
Event Driven and Distressed Strategies Fund		(22,974	)		(67,900	)		(8,576	)		(51,623	)		(151,073	)
Emerging Markets 2x Strategy Fund		(43,815	)		(379,901	)		—			—			(423,716	)
Inverse Emerging Markets 2x Strategy Fund		508			50,789			—			—			51,297
Emerging Markets Bond Strategy Fund		—			34			(1,462	)		1,872			444

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 risks may be effectively hedged, and in some cases the costs of hedging techniques may outweigh expected benefits. In such instances, the value of securities denominated in foreign currencies can change significantly when foreign currencies strengthen or weaken relative to the U.S. dollar.

Certain Funds may invest in securities of foreign companies directly, or in financial instruments, such as ADRs and exchange-traded funds, which are indirectly linked to the performance of foreign issuers. Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, 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.

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.

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.

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3. Fees and Other Transactions with Affiliates

Under the terms of an investment advisory contract, the Funds pay GI investment advisory fees calculated at the annualized rates below, based on the average daily net assets of the Funds:

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%

GI 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 has contractually agreed to reduce fees and/or reimburse expenses for the Event Driven and Distressed Strategies Fund to the extent necessary to keep net operating expenses relative to the average daily net assets of A-Class, C-Class, H-Class, and Institutional Class shares (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividends on securities sold short, and extraordinary expenses) 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, 2017, GFD retained sales charges of $252,227 relating to sales of A-Class shares of the Trust.

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

On October 4, 2016, Rydex Fund Services, LLC (“RFS”) was purchased by MUFG Investor Services and as of that date RFS ceased to be an affiliate of GI. In connection with its acquisition, RFS changed its name to MUFG Investor Services (US), LLC (“MUIS”). This change had no impact on the financial statements of the Trust.

MUIS acts as the Trust’s administrator, transfer agent and accounting agent. As administrator, transfer agent and accounting agent, MUIS is responsible for maintaining the books and records of the Trust’s securities and cash. For providing the aforementioned services, MUIS is entitled to receive a monthly fee equal to an annual percentage of the Funds’ average daily net assets subject to certain minimum monthly fees and out of pocket expenses.

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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, 2017, the repurchase agreements in the joint account were as follows:

Counterparty and Terms of Agreement	Face Value		Repurchase Price		Collateral	Par Value		Fair Value
RBC Capital Markets LLC					U.S. Treasury Note
0.72%					2.00%
Due 04/03/17	$	157,196,814	$	157,206,245	05/31/21	$	157,319,700	$	160,340,757
HSBC Securities, Inc.					U.S. Treasury Strips
0.68%					0.00%
Due 04/03/17		101,272,070		101,277,809	11/15/42 - 05/15/43		229,169,400		103,297,534
Mizuho Securities LLC					U.S. Treasury Bill
0.71%					0.00%
Due 04/03/17		54,250,554		54,253,764	01/04/18		55,734,200		55,335,700
UMB Financial Corp.					Federal Farm Credit Bank
0.68%					0.60% - 0.85%
Due 04/03/17		15,523,545		15,524,424	04/05/17 - 04/25/17		14,784,000		14,831,151
					Federal Home Loan Bank
					0.88%
					05/24/17		1,000,000		1,003,157
					Total UMB Financial Corp.		15,784,000		15,834,308

68 | 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, reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.

6. Portfolio Securities Loaned

The Funds may lend their securities to approved brokers to earn additional income. Security lending income shown on the Statements of Operations is shown net of rebates paid to the borrowers and earnings on cash collateral investments shared with the lending agent. Within this arrangement, the Funds act as the lender, U.S. Bank acts as the lending agent, and other approved registered broker dealers act as the borrowers. The Funds receive cash collateral, valued at 102% of the value of the securities on loan. Under the terms of the Funds’ securities lending agreement with U.S. Bank, cash collateral and proceeds are invested in the First American Government Obligations Fund — Class Z. The Funds bear the risk of loss on cash collateral investments. Collateral is maintained over the life of the loan in an amount not less than the value of loaned securities, as determined at the close of fund business each day; any additional collateral required due to changes in security values is delivered to the Funds the next business day. Although the collateral mitigates the risk, the Funds could experience a delay in recovering its securities and a possible loss of income or value if the borrower fails to return the securities. The Funds have the right under the securities lending agreement to recover the securities from the borrower on demand. Securities lending transactions are accounted for as secured borrowings. The remaining contractual maturity of the securities lending agreement is overnight and continuous.

At March 31, 2017, the Funds participated in securities lending transactions, which are subject to enforceable netting arrangements, as follows:

	Gross Amounts Not Offset in the Statements of Assets and Liabilities							Securities Lending Collateral
Fund	Value of Securities Loaned		Collateral Received			Net Amount		Cash Collateral Invested		Cash Collateral Uninvested		Total Collateral
Long Short Equity Fund	$	701,650	$	(701,650	)	$	—	$	717,756	$	—	$	717,756
Event Driven and Distressed Strategies Fund		80,678		(80,678	)		—		83,061		—		83,061
Emerging Markets 2x Strategy Fund		25,694		(25,694	)		—		26,615		—		26,615

In the event of counterparty default, the Funds have the right to collect the collateral to offset losses incurred. There is potential loss to the Funds in the event the Funds are delayed or prevented from exercising their rights to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. GI, acting under the supervision of the Board, reviews the value of the collateral and the creditworthiness of those banks and dealers to evaluate potential risks.

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 from 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.

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NOTES TO FINANCIAL STATEMENTS (continued)

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, are 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
Inverse Emerging Markets 2x Strategy Fund	Swap equity contracts	$	6,742	$	—	$	6,742	$	—	$	—	$	6,742
Emerging Markets Bond Strategy Fund	Swap equity contracts		42		—		42		—		—		42

								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
Emerging Markets 2x Strategy Fund	Swap equity contracts	$	8,944	$	—	$	8,944	$	8,944	$	—	$	—
Emerging Markets Bond Strategy Fund	Swap equity contracts		8		—		8		8		—		—

¹ Centrally cleared swaps and exchange-traded futures are excluded from these reported amounts.

70 | THE RYDEX FUNDS ANNUAL REPORT

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.

The tax character of distributions paid during the year ended March 31, 2017 was as follows:

Fund	Ordinary Income		Long-Term Capital Gain		Total Distributions
Event Driven and Distressed Strategies Fund	$	265,023	$	—	$	265,023
Emerging Markets Bond Strategy Fund		133,134		—		133,134

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
Event Driven and Distressed Strategies Fund	$	122,230	$	—	$	122,230
Emerging Markets 2x Strategy Fund		53,210		—		53,210
Emerging Markets Bond Strategy Fund		29,134		—		29,134

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

The tax components of accumulated earnings/(deficit) as of March 31, 2017 were as follows:

Fund	Undistributed Ordinary Income		Undistributed Long-Term Capital Gain		Net Unrealized Appreciation		Capital Loss Carryforward & Other Losses
Long Short Equity Fund	$	—	$	—	$	1,570,663	$	(19,404,877	)
Event Driven and Distressed Strategies Fund		185,575		—		88,336		(741,226	)
Emerging Markets 2x Strategy Fund		—		—		118,773		(10,682,747	)
Inverse Emerging Markets 2x Strategy Fund		—		—		6,742		(17,318,838	)
Emerging Markets Bond Strategy Fund		—		—		399		(106,543	)

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

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NOTES TO FINANCIAL STATEMENTS (continued)

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, 2017, capital loss carryforwards for the Funds were as follows:

				Unlimited
Fund	Expires in 2018			Short-Term			Long-Term			Total Capital Loss Carryforward
Long Short Equity Fund	$	(19,377,927	)	$	—		$	—		$	(19,377,927	)
Event Driven and Distressed Strategies Fund		—			(624,892	)		(116,334	)		(741,226	)
Emerging Markets 2x Strategy Fund		—			(9,257,836	)		(1,397,899	)		(10,655,735	)
Inverse Emerging Markets 2x Strategy Fund		—			(16,459,186	)		(852,167	)		(17,311,353	)
Emerging Markets Bond Strategy Fund		—			—			(106,543	)		(106,543	)

For the year ended March 31, 2017, the following capital loss carryforward amounts expired or were used:

Fund	Expired		Utilized		Total
Long Short Equity Fund	$	46,684,889	$	1,968,914	$	48,653,803
Event Driven and Distressed Strategies Fund		—		305,135		305,135
Emerging Markets 2x Strategy Fund		—		4,442,529		4,442,529
Inverse Emerging Markets 2x Strategy Fund		—		27,274		27,274

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 loss deferrals, losses deferred due to wash sales, utilization of earnings and profits on shareholder redemptions, “mark-to-market” of futures contracts, and the “mark-to-market” or disposition of certain passive foreign investment companies (PFICs) for tax purposes. Additional differences may result from the tax treatment of net operating losses, expiration of capital loss carryforward amounts, overdistributions, and investments in swaps and partnerships. 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 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	$	(47,001,109	)	$	320,966	$	46,680,143
Event Driven and Distressed Strategies Fund		1,593			199,482		(201,075	)
Emerging Markets 2x Strategy Fund		(128,694	)		128,694		—
Inverse Emerging Markets 2x Strategy Fund		(138,301	)		138,301		—
Emerging Markets Bond Strategy Fund		(19,479	)		168,498		(149,019	)

72 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

At March 31, 2017, 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
Long Short Equity Fund	$	33,981,157	$	2,579,269	$	(774,665	)	$	1,804,604
Event Driven and Distressed Strategies Fund		12,633,358		114,668		(40,571	)		74,097
Emerging Markets 2x Strategy Fund		8,164,616		149,154		(21,437	)		127,717
Inverse Emerging Markets 2x Strategy Fund		833,799		—		—			—
Emerging Markets Bond Strategy Fund		530,665		—		—			—

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, 2017, the following losses reflected in the accompanying financial statements were deferred for Federal income tax purposes until April 1, 2017:

Fund	Ordinary			Capital
Long Short Equity Fund	$	(26,950	)	$	—
Emerging Markets 2x Strategy Fund		(27,012	)		—
Inverse Emerging Markets 2x Strategy Fund		(7,485	)		—

9. Securities Transactions

For the year ended March 31, 2017, 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	$	122,472,620	$	123,516,720
Event Driven and Distressed Strategies Fund		5,730,467		3,181,889
Emerging Markets 2x Strategy Fund		166,034,871		176,100,290
Inverse Emerging Markets 2x Strategy Fund		—		—
Emerging Markets Bond Strategy Fund		3,913,708		4,197,709

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 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, 2017, the Funds engaged in purchases and sales of securities, pursuant to Rule 17a-7 of the 1940 Act, as follows:

Fund	Purchases		Sales		Realized Loss
Event Driven and Distressed Strategies Fund	$	—	$	1,825,120	$	(98,870	)
Emerging Markets 2x Strategy Fund		1,095,745		505,949		(1,389	)

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.

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NOTES TO FINANCIAL STATEMENTS (continued)

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, 2016, is available publicly or upon request. This information is available from the EDGAR database on the SEC’s website at https://www.sec.gov/Archives/edgar/data/1601445/000089180416001923/gug65857-ncsr.htm.

Transactions during the year ended March 31, 2017, in which the portfolio company is an “affiliated person,” were as follows:

Affiliated issuers by Fund	Value 03/31/16		Additions		Reductions			Value 03/31/17		Shares 03/31/17		Investment Income		Realized Loss
Long Short Equity Fund
Guggenheim Strategy Fund I	$	2,054,852	$	36,004	$	—		$	2,110,841		84,265	$	35,809	$	—
Guggenheim Strategy Fund II		14,088		326		—			14,592		584		324		—
		2,068,940		36,330		—			2,125,433				36,133		—
Event Driven and Distressed Strategies Fund
Guggenheim Strategy Fund I		2,031,647		2,152,849		(200,000	)		4,010,513		160,100		52,476		(804	)
Guggenheim Strategy Fund II		2,039,748		2,169,701		(200,000	)		4,043,826		161,753		69,251		(1,615	)
		4,071,395		4,322,550		(400,000	)		8,054,339				121,727		(2,419	)

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 11, 2017. 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 1.58% for the year ended March 31, 2017. The Funds did not have any borrowings outstanding under this agreement at March 31, 2017.

The average daily balances borrowed for the year ended March 31, 2017, were as follows:

Fund	Average Daily Balance
Event Driven and Distressed Strategies Fund	$	1,370
Emerging Markets 2x Strategy Fund		7,261

12. Share Splits

Share splits occurred for the following Funds at the close of business:

Fund	Effective Date	Split Type
Inverse Emerging Markets 2x Strategy Fund	October 31, 2016	One-for-Six Reverse Split
Emerging Markets Bond Strategy Fund	November 07, 2016	One-for-Four Reverse Split

The effect of the reverse share splits were to divide the number of outstanding shares of the Inverse Emerging Markets 2x Strategy Fund and Emerging Markets Bond Strategy Fund by their split ratios, resulting in a corresponding increase in the NAV. The share transactions presented in the Statements of Changes in net assets and the per share data in the Financial Highlights for each of the periods presented prior to the effective date, have been restated to reflect these respective share splits. There were no changes in net assets, results of operations or total return as a result of these transactions.

74 | THE RYDEX FUNDS ANNUAL REPORT

NOTES TO FINANCIAL STATEMENTS (continued)

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 Tribune 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 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, their claims were preempted by Section 546(e) of the Bankruptcy Code—the statutory safe harbor for settlement payments. On April 12, 2016, the Plaintiffs in the SLCFC actions filed a petition seeking rehearing en banc before the appeals court. On July 22, 2016, the appeals court denied the petition. On September 9, 2016, the plaintiffs filed a petition for writ of certiorari in the U.S. Supreme Court challenging the Second Circuit’s decision that the safe harbor of Section 546(e) applied to their claims. The shareholder defendants, including the Funds, filed a joint brief in opposition to the petition for certiorari on October 24, 2016. The Supreme Court has not yet granted or denied the petition for certiorari.

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. On January 6, 2017, the United States District Court for the Southern District of New York granted the shareholder defendants’ motion to dismiss the intentional fraudulent conveyance claim in the FitzSimons action. In dismissing the intentional fraudulent conveyance claim, the Court denied the plaintiff’s request to amend the complaint. The plaintiff requested that the Court direct entry of a final judgment in order to make the order immediately appealable. On February 23, 2017, the Court issued an order stating that it intends to permit an interlocutory appeal of the dismissal order, but will wait to do so until it has resolved outstanding motions to dismiss filed by other defendants. Accordingly, the timing of the appeal is uncertain.

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 | 75

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”). Its funds may also be putative members of the proposed defendant classes in Weisfelner, as Trustee of the LB Litigation Trust v. A. Holmes & H. Holmes TTEE (In re Lyondell Co.), Adv. Pro. No. 10-5525 (Bankr. S.D.N.Y.) (the “Litigation Trust Action”) and Weisfelner, as Trustee of the LB Creditor Trust, v. Reichman (In re Lyondell Chemical Co.), Adv. Pro. No. 12-1570 (Bankr. S.D.N.Y.) (“Reichman”).

Similar to the claims made in the Tribune matter, the Weisfelner complaints seek to have set aside and recovered as fraudulent transfers from former Lyondell Chemical Company (“Lyondell”) shareholders the consideration paid to them pursuant to the cash out merger of Lyondell shareholders in connection with the combination of Lyondell and Basell AF in 2007. Lyondell filed for bankruptcy in 2008. The Creditor Trust Action and Reichman allege claims against the former Lyondell shareholders under state law for both constructive fraudulent transfer and intentional fraudulent transfer. The Litigation Trust Action alleges a claim against the former Lyondell shareholders under federal law for intentional fraudulent transfer.

On April 7, 2014, the plaintiff filed a Third Amended Complaint in the Creditor Trust Action, a Second Amended Complaint in the Litigation Trust Action, and an Amended Complaint in Reichman.

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 these lawsuits. The Bankruptcy Court held oral argument on the motion 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 intentional fraudulent transfer claims in the Creditor Trust Action, the Litigation Trust Action, and in Reichman, but denied the motion to dismiss the constructive fraudulent transfer claims in the Creditor Trust Action and in Reichman. The Bankruptcy Court entered final judgment dismissing the Litigation Trust Action, but the plaintiff 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 Action and Reichman in light of the U.S. Court of Appeals for the Second Circuit’s opinion in the appeal of the Tribune SLCFC actions. On July 20, 2016, the Bankruptcy Court issued a report and recommendation granting the defendants’ motion to dismiss. The U.S. District Court for the Southern District of New York has not yet accepted the Bankruptcy Court’s recommendation or entered a final judgment.

On July 27, 2016, the District Court reversed the Bankruptcy Court and reinstated the federal law intentional fraudulent transfer claim in the Litigation Trust Action and remanded to the Bankruptcy Court for further proceedings. The District Court found that the fraudulent intent that mattered was that of Lyondell’s CEO, not its board, because the CEO’s intent could be imputed to Lyondell under Delaware law agency principles. The District Court did note, however, that plaintiff faces a high standard for proving “actual intent” to harm creditors, and that it remains to be seen whether plaintiff will be able to make this showing. On August 11, 2016, the shareholder defendants filed a motion for reconsideration and/or to certify an interlocutory appeal of the District Court’s opinion. On October 5, 2016, the District Court denied the motion for reconsideration and/or to certify an interlocutory appeal. In light of this ruling, the federal intentional fraudulent conveyance claim will move forward before the Bankruptcy Court, but a schedule for that case has not yet been set.

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.

76 | 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 Guggenheim Long Short Equity Fund, Guggenheim Event Driven and Distressed Strategies Fund, Rydex Emerging Markets 2x Strategy Fund, Rydex Inverse Emerging Markets 2x Strategy Fund and Rydex Emerging Markets Bond Strategy Fund (five of the series constituting the Rydex Series Funds) (the “Funds”) as of March 31, 2017, 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, 2017, 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, 2017, 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.

Tysons, Virginia
May 30, 2017

THE RYDEX FUNDS ANNUAL REPORT | 77

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, 2017, the following funds had the corresponding percentages qualify for the dividends received deduction for corporations:

Fund	% Qualifying
Event Driven and Distressed Strategies Fund	3.33%

Additionally, of the taxable ordinary income distributions paid during the fiscal year ending March 31, 2017, 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	% Short-Term Capital Gain Qualifying
Event Driven and Distressed Strategies Fund	65.18%	—
Emerging Markets Bond Strategy Fund	59.23%	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 https://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 https://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 https://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.

78 | 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)	President and 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).	230	Clear Spring Life Insurance Company (2015-present); Guggenheim Partners Japan, Ltd. (2014-present); Guggenheim Partners Investment Management Holdings, LLC (2014-present); Delaware Life (2013-present); Guggenheim Life and Annuity Company (2011-present); Paragon Life Insurance Company of Indiana (2011-present).
INDEPENDENT TRUSTEES
Angela Brock-Kyle***** (1959)	Trustee from August 2016 to present.	Current: Founder and Chief Executive Officer, B.O.A.R.D.S (consulting firm) Former: Senior Leader, TIAA (financial services firm) (1987-2012).	135	Infinity Property & Casualty Corporation (2014-present).
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.	135	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.	135	Epiphany Funds (4) (2009-present).

THE RYDEX FUNDS ANNUAL REPORT | 79

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
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.	135	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).	135	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).	135	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).	135	None.
Sandra G. Sponem***** (1958)	Trustee from August 2016 to present.	Current: Senior Vice President and Chief Financial Officer, M.A. Mortenson Companies, Inc. (general contracting firm) (2007-present).	135	None.

80 | THE RYDEX FUNDS ANNUAL REPORT

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
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.
Joanna M. Catalucci (1966)	AML Officer (2016-present)	Current: Chief Compliance Officer, certain funds in the Fund Complex (2012-present); Senior Managing Director, Guggenheim Investments (2014-present); AML Officer, certain funds in the Fund Complex (2016-present). Former: Chief Compliance Officer and Secretary, certain other funds in the Fund Complex (2008-2012); Senior Vice President & Chief Compliance Officer, Security Investors, LLC and certain affiliates (2010-2012); Chief Compliance Officer and Senior Vice President, Rydex Advisors, LLC and certain affiliates (2010-2011).
James M. Howley (1972)	Assistant Treasurer (2016-present)	Current: Managing Director, Guggenheim Investments (2004-present); Assistant Treasurer, certain other funds in the Fund Complex (2006-present). Former: Manager, Mutual Fund Administration of Van Kampen Investments, Inc. (1996-2004).
Keith D. Kemp (1960)	Assistant Treasurer (2016-present)	Current: Treasurer and Assistant Treasurer, certain other funds in the Fund Complex (2010-present); Managing Director of Guggenheim Partners Investment Management, LLC (2015-present); Chief Financial Officer, Guggenheim Specialized Products, LLC (2016-present). Former: Managing Director and Director, Transparent Value, LLC (2010-2016); Director, Guggenheim Partners Investment Management, LLC (2010-2015); Chief Operating Officer, Macquarie Capital Investment Management (2007-2009).
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).
Glenn McWhinnie (1969)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2009-present). Former: Tax Compliance Manager, Ernst & Young LLP (1996-2009).

THE RYDEX FUNDS ANNUAL REPORT | 81

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
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).
Adam J. Nelson (1979)	Assistant Treasurer (2016-present)	Current: Vice President, Guggenheim Investments (2015-present); Assistant Treasurer, certain other funds in the Fund Complex (2015-present). Former: Assistant Vice President and Fund Administration Director, State Street Corporation (2013-2015); Fund Administration Assistant Director, State Street (2011-2013); Fund Administration Manager, State Street (2009-2011).
Kimberly J. Scott (1974)	Assistant Treasurer (2016-present)	Current: Director, Guggenheim Investments (2012-present); Assistant Treasurer, certain other funds in the Fund Complex (2012-present). Former: Financial Reporting Manager, Invesco, Ltd. (2010-2011); Vice President/Assistant Treasurer, Mutual Fund Administration for Van Kampen Investments, Inc./Morgan Stanley Investment Management (2009-2010); Manager of Mutual Fund Administration, Van Kampen Investments, Inc./Morgan Stanley Investment Management (2005-2009).
John L. Sullivan (1955)	Chief Financial Officer and Treasurer (2016-present)	Current: CFO, Chief Accounting Officer and Treasurer, certain other funds in the Fund Complex (2010-present); Senior Managing Director, Guggenheim Investments (2010-present). Former: Managing Director and CCO, each of the funds in the Van Kampen Investments fund complex (2004-2010); Managing Director and Head of Fund Accounting and Administration, Morgan Stanley Investment Management (2002-2004); CFO and Treasurer, Van Kampen Funds (1996-2004).

*	All Trustees and Officers may be reached c/o Guggenheim Investments, 227 West Monroe Street, Chicago, Illinois 60606.
**	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.
****	Certain of the Trustees may serve as directors on the boards of companies not required to be disclosed above, including certain non-profit companies and charitable foundations.
*****	Mses. Brock-Kyle and Sponem commence serving as independent Trustees effective August 18, 2016.

82 | THE RYDEX FUNDS ANNUAL REPORT

GUGGENHEIM INVESTMENTS PRIVACY POLICIES (Unaudited)

Guggenheim Investments as used herein refers to Guggenheim Partners, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Investment Management, LLC, Guggenheim Funds Distributors, LLC and Security Investors, LLC as well as the funds in the Guggenheim Funds complex (the “funds”).

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 personal information about you, we hold ourselves to high standards in its safekeeping and use. This means, most importantly, that we do not sell client or account information to anyone—whether you are a current or former Guggenheim Investments client.

The Information We Collect About You and How We Collect It

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 Funds or one of the Guggenheim affiliated companies. “Nonpublic personal information” is personally identifiable information about you. For example it includes 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 Share Your Personal Information

As a matter of policy, we do not disclose your nonpublic personal information to nonaffiliated third parties except as required or permitted by law. 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 your personal 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. In connection with servicing your accounts or 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 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 personal 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 share personal information about you if we are compelled by law to do so, if you direct us to do so with your consent, or in other circumstances as permitted by law.

How We Safeguard Your Personal Information

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Guggenheim Investments, access to such information is limited to those who need it to perform their jobs such as servicing your account, resolving problems or informing you of new products and services.

THE RYDEX FUNDS ANNUAL REPORT | 83

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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, 2017 and March 31, 2016 were $823,418 and $798,622, respectively.

(b)Audit Related Fees: The aggregate Audit Related Fees by the registrant’s principal accountant billed for the fiscal years ended March 31, 2017 and March 31, 2016 were $3,850 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, 2017 and March 31, 2016 were $0 and $38,585, 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, 2017 and March 31, 2016 were $398,564 and $387,911, 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, 2017 and March 31, 2016 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 $466,137 and $426,496, 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, except for the item discussed below.

· The Trust may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments or certain foreign currency transactions. The Trust has procedures in place to analyze any foreign holdings and determine if there is any tax exposure that needs to be recorded in the financial statements. However, the controls relating to the review of those securities were not properly designed to timely detect potential tax exposure in some circumstances. During the period ended March 31, 2017, two of the Rydex Series Funds invested in a Peruvian ADR security that was traded on U.S. exchanges. Based on rules in Peru, capital gains on Peruvian securities not traded on the Lima exchange are subject to a 30% tax. As a result, two of the Rydex Series Funds needed to record and ultimately recorded a liability for capital gains tax. Management has represented it plans to enhance its procedures around the identification and review of securities that have potential exposure to capital gains tax.

(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, 2017

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, 2017
By (Signature and Title)*	/s/ John L. Sullivan
	John L. Sullivan Chief Financial Officer and Treasurer
Date	June 9, 2017

^* Print the name and title of each signing officer under his or her signature.