UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File Number 811-07584 ---------- RYDEX SERIES FUNDS --------------------------------------------------- (Exact name of registrant as specified in charter) 9601 Blackwell Road, Suite 500 Rockville, Maryland 20850 --------------------------------------------------- (Address of principal executive offices) (Zip code) Carl G. Verboncoeur Rydex Series Funds 9601 Blackwell Road, Suite 500 Rockville, Maryland 20850 --------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 1-301-296-5100 -------------- Date of fiscal year end: March 31, 2006 -------------- Date of reporting period: September 30, 2005 ------------------ 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. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. NOVA FUND URSA FUND OTC FUND ARKTOS FUND MEDIUS FUND INVERSE MID-CAP FUND MEKROS FUND INVERSE SMALL-CAP FUND U.S. GOVERNMENT BOND FUND JUNO FUND SEPTEMBER 30, 2005 RYDEX SERIES FUNDS BENCHMARK FUNDS SEMI-ANNUAL REPORT LARGE-CAP EUROPE FUND LARGE-CAP JAPAN FUND SMALL-CAP VALUE FUND MID-CAP VALUE FUND LARGE-CAP VALUE FUND SMALL-CAP GROWTH FUND MID-CAP GROWTH FUND LARGE-CAP GROWTH FUND STRENGTHENING DOLLAR FUND WEAKENING DOLLAR FUND U.S. GOVERNMENT MONEY MARKET FUND NOVA MASTER PORTFOLIO URSA MASTER PORTFOLIO ARKTOS MASTER PORTFOLIO JUNO MASTER PORTFOLIO [LOGO] RYDEXINVESTMENTS Essential for modern markets(TM) This report and the financial statements contained herein are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Distributed by Rydex Distributors, Inc. TABLE OF CONTENTS - -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS ............................................... 2 A BRIEF NOTE ON THE COMPOUNDING OF RETURNS ............................... 4 ABOUT SHAREHOLDERS' FUND EXPENSES ........................................ 5 FUND PROFILES ............................................................ 10 SCHEDULES OF INVESTMENTS ................................................. 22 BENCHMARK FUNDS STATEMENTS OF ASSETS AND LIABILITIES .................................. 86 STATEMENTS OF OPERATIONS .............................................. 90 STATEMENTS OF CHANGES IN NET ASSETS ................................... 94 FINANCIAL HIGHLIGHTS .................................................. 100 BENCHMARK PORTFOLIOS STATEMENTS OF ASSETS AND LIABILITIES .................................. 110 STATEMENTS OF OPERATIONS .............................................. 111 STATEMENTS OF CHANGES IN NET ASSETS ................................... 112 FINANCIAL HIGHLIGHTS .................................................. 114 NOTES TO FINANCIAL STATEMENTS ............................................ 115 OTHER INFORMATION ........................................................ 126 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS ............................ 129 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 1 LETTER TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- DEAR SHAREHOLDER: The six-month period from April through September 2005 was a tumultuous one for the economy and the financial markets. Investors, consumers and businesses alike were rocked by the twin hurricanes of Katrina and Rita and the unprecedented rise in energy prices. Energy prices-particularly for refined products such as gas, diesel, jet fuel and heating oil-skyrocketed, causing consumer confidence to plummet and raising the prospect of a pullback in consumer spending. Typically, developments like these would have a downward effect on equity prices and interest rates, but that wasn't the case as stocks rallied and interest rates finished the period largely where they began. Surprisingly, U.S. equity markets navigated the storms remarkably well. While the old economy Dow Jones Industrial Average(R) Index rose only 1.76%, the broader S&P 500(R) Index gained 5.02% and the tech-laden Nasdaq 100(R) Index rose 8.04% on the back of a mini-rally in technology stocks. Two factors appear to have driven prices higher. The first is that earnings growth remained strong, increasing at a double-digit pace in both the second and third quarters, and investors appeared to be looking beyond the immediate impact of the hurricanes to the anticipated "kick" to economic growth as reconstruction efforts got underway. As one might expect, energy stocks led the market higher. In fact, energy prices were well on their way up prior to the arrival of Katrina as the price of a barrel of crude oil rose from $49.69 in late May to a high of $69.74 by the end of August. The Gulf storms exacerbated this rise. That energy prices were already well on their way up is attributable to the rapid growth in the powerhouse economies of China and India. China, in particular, continues to import commodities of all kinds at a voracious rate. In fact, if one takes a closer look at stock prices during this period, the effect of rising energy prices and the impact of the storms becomes apparent. Clearly, energy stocks were the big winners as the S&P Energy Index rose nearly 19.56%. In fact, the meteoric rise in energy stocks is responsible for much of the stock market's positive performance this year. Utility stocks also fared well as the S&P Utility Index shot up 15.24% in anticipation of a substantial rise in home heating costs. Technology stocks rallied as valuations were perceived to be attractive. On the flip side, health care stocks, which tend to be perceived as defensive in nature, rose nearly 5.00% as investors looked for a consumer driven economic slowdown in the wake of the devastation left by Katrina and Rita. Despite the uncertainty, the Federal Reserve ("Fed") remained vigilant against any signs of increasing inflation. The shock to the economy of the storms and the loss of some of the nation's critical energy infrastructure led many to predict a pause in the Fed's rate hikes. This was not to be, as the Fed implemented four 25 basis point rate hikes during the period. Longer rates, on the other hand, actually declined from April to September, with the yield on the benchmark 10-Year Treasury Note falling 15 basis points to 4.33%. Despite this decline, interest rates are clearly on the upswing. Long-term rates bottomed on June 1, as the yield on the 10-Year Note reached 3.89%. Since the beginning of June, the trend has been up, with the 10-Year Note peaking at 4.42% in early August. 2 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT LETTER TO OUR SHAREHOLDERS (CONCLUDED) - -------------------------------------------------------------------------------- With all of the crosscurrents in the economy and the financial markets, stock price behavior is likely to remain choppy and erratic. Investment strategies that do not depend on highly directional markets will likely fare well as we move through the remainder of 2005. We appreciate the trust you have placed in our firm by investing with us. Sincerely, /s/ Carl G. Verboncoeur Carl G. Verboncoeur President THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 3 A BRIEF NOTE ON THE COMPOUNDING OF RETURNS - -------------------------------------------------------------------------------- Many of the Rydex funds described in this report are benchmarked daily to leveraged or inverse 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% gain and an expectation that the fund will rise by 9%. On the same day, the fund's net asset value ("NAV") increases from $10.00 to $10.90 for a gain of 9.0%-in line with its benchmark. On day two, assume the index falls from 106 to 99 for a loss of about 6.6%. The fund, as expected, falls 9.9% to a price of $9.82. On each day, the fund performed exactly in line with its benchmark, but for the two-day period, the fund was down 1.8%, while the index was down only 1.0%. Without taking into account the daily compounding of returns, one would expect the fund to lose 1.5% and would see the fund as trailing by 0.3% when in fact it had performed perfectly. This example is summarized in the table below. INDEX INDEX FUND FUND FUND LEVEL PERFORMANCE EXPECTATION NAV PERFORMANCE ASSESSMENT - -------------------------------------------------------------------------------- Start 100 $ 10.00 Day 1 106 6.0% 9.0% $ 10.90 9.0% In line Day 2 99 -6.6% -9.9% $ 9.82 -9.9% In line Cumulative -1.00% -1.50% -1.80% -0.30% - -------------------------------------------------------------------------------- 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. 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 more results that are more in line with expectations. In addition, periods of high volatility in an underlying index will also cause the effects of compounding to be more pronounced, while lower volatility will produce a more muted effect. 4 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES - -------------------------------------------------------------------------------- All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. As a shareholder of the fund, you incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; 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 you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2005 and ending September 30, 2005. The following tables illustrate your fund's costs in two ways: TABLE 1. BASED ON ACTUAL FUND RETURN. This section helps you estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading "Expenses Paid During Period." Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. TABLE 2. BASED ON HYPOTHETICAL 5% RETURN. This section is intended to help you compare your 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 you 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. You can assess your fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. The calculations above assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs, which maybe incurred by some of the fund's classes. These costs may include, but are not limited to, sales charges (loads), redemption fees, and exchange fees. You can find more information about the Fund's expenses, including annual expense ratios for the past five years, 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 SERIES FUNDS SEMI-ANNUAL REPORT | 5 ABOUT SHAREHOLDERS' FUND EXPENSES (CONTINUED) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ----------------------------------------------------------------------------------------------------------------- TABLE 1. BASED ON ACTUAL FUND RETURN NOVA FUND Investor Class 1.20%++ $ 1,000.00 $ 1,067.40 $ 6.22 Advisor Class 1.71%++ 1,000.00 1,064.60 8.85 A-Class 1.46%++ 1,000.00 1,065.60 7.56 C-Class 2.22%++ 1,000.00 1,062.30 11.48 URSA FUND Investor Class 1.35%++ 1,000.00 972.40 6.68 Advisor Class 1.85%++ 1,000.00 970.10 9.14 A-Class 1.61%++ 1,000.00 968.90 7.95 C-Class 2.36%++ 1,000.00 967.60 11.64 OTC FUND Investor Class 1.18% 1,000.00 1,084.50 6.17 Advisor Class 1.68% 1,000.00 1,081.30 8.77 A-Class 1.43% 1,000.00 1,083.10 7.47 C-Class 2.19% 1,000.00 1,078.90 11.41 ARKTOS FUND Investor Class 1.36%++ 1,000.00 938.90 6.61 Advisor Class 1.86%++ 1,000.00 937.10 9.03 A-Class 1.60%++ 1,000.00 938.10 7.77 C-Class 2.37%++ 1,000.00 934.40 11.49 MEDIUS FUND A-Class 1.62% 1,000.00 1,116.40 8.59 C-Class 2.37% 1,000.00 1,112.50 12.55 H-Class 1.61% 1,000.00 1,117.10 8.54 INVERSE MID-CAP FUND A-Class 1.70% 1,000.00 926.80 8.21 C-Class 2.43% 1,000.00 923.40 11.72 H-Class 1.59% 1,000.00 927.10 7.68 MEKROS FUND A-Class 1.63% 1,000.00 1,120.60 8.67 C-Class 2.39% 1,000.00 1,116.90 12.68 H-Class 1.62% 1,000.00 1,121.00 8.61 INVERSE SMALL-CAP FUND A-Class 1.59% 1,000.00 921.70 7.66 C-Class 2.40% 1,000.00 918.80 11.54 H-Class 1.62% 1,000.00 922.10 7.81 U.S. GOVERNMENT BOND FUND Investor Class 0.90% 1,000.00 1,054.90 4.64 Advisor Class 1.40% 1,000.00 1,051.50 7.20 A-Class 1.15% 1,000.00 1,052.80 5.92 C-Class 1.91% 1,000.00 1,048.70 9.81 JUNO FUND Investor Class 4.80%**++ 1,000.00 965.70 23.65 Advisor Class 5.31%**++ 1,000.00 963.30 26.13 A-Class 5.06%**++ 1,000.00 963.90 24.91 C-Class 5.81%**++ 1,000.00 961.10 28.56 6 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES (CONTINUED) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ----------------------------------------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND A-Class 1.65% $ 1,000.00 $ 1,079.30 $ 8.60 C-Class 2.39% 1,000.00 1,076.60 12.44 H-Class 1.63% 1,000.00 1,080.00 8.50 LARGE-CAP JAPAN FUND A-Class 1.63% 1,000.00 1,158.90 8.82 C-Class 2.39% 1,000.00 1,153.80 12.90 H-Class 1.68% 1,000.00 1,158.80 9.09 SMALL-CAP VALUE FUND A-Class 1.44% 1,000.00 1,069.80 7.47 C-Class 2.20% 1,000.00 1,065.00 11.39 H-Class 1.46% 1,000.00 1,069.10 7.57 MID-CAP VALUE FUND A-Class 1.46% 1,000.00 1,096.40 7.67 C-Class 2.25% 1,000.00 1,091.60 11.80 H-Class 1.47% 1,000.00 1,096.40 7.73 LARGE-CAP VALUE FUND A-Class 1.46% 1,000.00 1,049.30 7.50 C-Class 2.22% 1,000.00 1,044.70 11.38 H-Class 1.47% 1,000.00 1,048.90 7.55 SMALL-CAP GROWTH FUND A-Class 1.46% 1,000.00 1,092.60 7.66 C-Class 2.30% 1,000.00 1,088.60 12.04 H-Class 1.49% 1,000.00 1,092.60 7.82 MID-CAP GROWTH FUND A-Class 1.46% 1,000.00 1,069.60 7.57 C-Class 2.21% 1,000.00 1,066.00 11.45 H-Class 1.46% 1,000.00 1,070.00 7.58 LARGE-CAP GROWTH FUND A-Class 1.44% 1,000.00 1,025.70 7.31 C-Class 2.19% 1,000.00 1,022.20 11.10 H-Class 1.46% 1,000.00 1,025.30 7.41 STRENGTHENING DOLLAR FUND A-Class 1.71% 1,000.00 1,085.20 8.94 C-Class 2.43% 1,000.00 1,082.80 12.69 H-Class 1.65% 1,000.00 1,084.00 8.62 WEAKENING DOLLAR FUND A-Class 1.72% 1,000.00 926.40 8.31 C-Class 2.44% 1,000.00 923.60 11.77 H-Class 1.69% 1,000.00 926.00 8.16 U.S.GOVERNMENT MONEY MARKET FUND Investor Class 0.86% 1,000.00 1,011.70 4.34 Advisor Class 1.37% 1,000.00 1,009.20 6.90 A-Class 1.12% 1,000.00 1,010.40 5.64 C-Class 1.87% 1,000.00 1,006.70 9.41 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 7 ABOUT SHAREHOLDERS' FUND EXPENSES (CONTINUED) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ----------------------------------------------------------------------------------------------------------------- TABLE 2. BASED ON HYPOTHETICAL 5% RETURN NOVA FUND Investor Class 1.20%++ $ 1,000.00 $ 1,018.91 $ 6.09 Advisor Class 1.71%++ 1,000.00 1,016.32 8.68 A-Class 1.46%++ 1,000.00 1,017.59 7.41 C-Class 2.22%++ 1,000.00 1,013.73 11.27 URSA FUND Investor Class 1.35%++ 1,000.00 1,018.15 6.85 Advisor Class 1.85%++ 1,000.00 1,015.61 9.39 A-Class 1.61%++ 1,000.00 1,016.83 8.17 C-Class 2.36%++ 1,000.00 1,013.02 11.98 OTC FUND Investor Class 1.18% 1,000.00 1,019.01 5.99 Advisor Class 1.68% 1,000.00 1,016.47 8.53 A-Class 1.43% 1,000.00 1,017.74 7.26 C-Class 2.19% 1,000.00 1,013.88 11.12 ARKTOS FUND Investor Class 1.36%++ 1,000.00 1,018.10 6.90 Advisor Class 1.86%++ 1,000.00 1,015.56 9.44 A-Class 1.60%++ 1,000.00 1,016.88 8.12 C-Class 2.37%++ 1,000.00 1,012.97 12.03 MEDIUS FUND A-Class 1.62% 1,000.00 1,016.78 8.22 C-Class 2.37% 1,000.00 1,012.97 12.03 H-Class 1.61% 1,000.00 1,016.83 8.17 INVERSE MID-CAP FUND A-Class 1.70% 1,000.00 1,016.37 8.63 C-Class 2.43% 1,000.00 1,012.66 12.34 H-Class 1.59% 1,000.00 1,016.93 8.07 MEKROS FUND A-Class 1.63% 1,000.00 1,016.73 8.27 C-Class 2.39% 1,000.00 1,012.87 12.13 H-Class 1.62% 1,000.00 1,016.78 8.22 INVERSE SMALL-CAP FUND A-Class 1.59% 1,000.00 1,016.93 8.07 C-Class 2.40% 1,000.00 1,012.82 12.18 H-Class 1.62% 1,000.00 1,016.78 8.22 U.S. GOVERNMENT BOND FUND Investor Class 0.90% 1,000.00 1,020.43 4.57 Advisor Class 1.40% 1,000.00 1,017.89 7.11 A-Class 1.15% 1,000.00 1,019.16 5.84 C-Class 1.91% 1,000.00 1,015.30 9.70 JUNO FUND Investor Class 4.80%**++ 1,000.00 1,000.63 24.37 Advisor Class 5.31%**++ 1,000.00 998.04 26.96 A-Class 5.06%**++ 1,000.00 999.31 25.69 C-Class 5.81%**++ 1,000.00 995.51 29.49 LARGE-CAP EUROPE FUND A-Class 1.65% 1,000.00 1,016.62 8.38 C-Class 2.39% 1,000.00 1,012.87 12.13 H-Class 1.63% 1,000.00 1,016.73 8.27 LARGE-CAP JAPAN FUND A-Class 1.63% 1,000.00 1,016.73 8.27 C-Class 2.39% 1,000.00 1,012.87 12.13 H-Class 1.68% 1,000.00 1,016.47 8.53 8 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES (CONCLUDED) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ----------------------------------------------------------------------------------------------------------------- SMALL-CAP VALUE FUND A-Class 1.44% $ 1,000.00 $ 1,017.69 $ 7.31 C-Class 2.20% 1,000.00 1,013.83 11.17 H-Class 1.46% 1,000.00 1,017.59 7.41 MID-CAP VALUE FUND A-Class 1.46% 1,000.00 1,017.59 7.41 C-Class 2.25% 1,000.00 1,013.58 11.42 H-Class 1.47% 1,000.00 1,017.54 7.46 LARGE-CAP VALUE FUND A-Class 1.46% 1,000.00 1,017.59 7.41 C-Class 2.22% 1,000.00 1,013.73 11.27 H-Class 1.47% 1,000.00 1,017.54 7.46 SMALL-CAP GROWTH FUND A-Class 1.46% 1,000.00 1,017.59 7.41 C-Class 2.30% 1,000.00 1,013.32 11.68 H-Class 1.49% 1,000.00 1,017.44 7.56 MID-CAP GROWTH FUND A-Class 1.46% 1,000.00 1,017.59 7.41 C-Class 2.21% 1,000.00 1,013.78 11.22 H-Class 1.46% 1,000.00 1,017.59 7.41 LARGE-CAP GROWTH FUND A-Class 1.44% 1,000.00 1,017.69 7.31 C-Class 2.19% 1,000.00 1,013.88 11.12 H-Class 1.46% 1,000.00 1,017.59 7.41 STRENGTHENING DOLLAR FUND A-Class 1.71% 1,000.00 1,016.39 8.68 C-Class 2.43% 1,000.00 1,012.73 12.34 H-Class 1.65% 1,000.00 1,016.69 8.38 WEAKENING DOLLAR FUND A-Class 1.72% 1,000.00 1,016.34 8.73 C-Class 2.44% 1,000.00 1,012.68 12.39 H-Class 1.69% 1,000.00 1,016.49 8.58 U.S. GOVERNMENT MONEY MARKET FUND Investor Class 0.86% 1,000.00 1,020.63 4.37 Advisor Class 1.37% 1,000.00 1,018.05 6.95 A-Class 1.12% 1,000.00 1,019.31 5.69 C-Class 1.87% 1,000.00 1,015.51 9.49 * EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365. ** THIS RATIO REPRESENTS GROSS EXPENSES, WHICH INCLUDE INTEREST EXPENSE FROM SECURITIES SOLD SHORT. + ANNUALIZED ++ RATIOS TO AVERAGE NET ASSETS INCLUDE EXPENSES OF THE CORRESPONDING MASTER PORTFOLIO. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 9 FUND PROFILES - -------------------------------------------------------------------------------- NOVA FUND OBJECTIVE: To provide investment results that match 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. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] NOVA FUND S&P 500 INDEX --------- ------------- Other 9.2% 9.4% Information Technology 13.8% 15.7% Consumer Discretionary 9.9% 11.0% Health Care 12.0% 13.0% Financials 17.9% 20.0% Industrials 10.0% 11.1% Consumer Staples 8.8% 9.7% Energy 8.5% 10.1% Futures Contracts 60.2% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- Investor Class July 12, 1993 Advisor Class October 15, 1998 A-Class March 31, 2004 C-Class March 14, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------- Exxon Mobil Corp. 3.1% General Electric Co. 3.1% Citigroup, Inc. 2.1% Pfizer, Inc. 1.8% Microsoft Corp. 1.7% Intel Corp. 1.6% Johnson & Johnson, Inc. 1.3% Wal-Mart Stores, Inc. 1.2% Cisco Systems, Inc. 1.2% ConocoPhillips 1.2% - ------------------------------------------------------- Top Ten Total 18.3% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. URSA FUND OBJECTIVE: To provide investment results that will inversely correlate to the performance of the S&P 500 Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] URSA FUND S&P 500 INDEX --------- ------------- Other 9.4% Information Technology 15.7% Consumer Discretionary 11.0% Health Care 13.0% Financials 20.0% Industrials 11.1% Consumer Staples 9.7% Energy 10.1% Futures Contracts -42.2% Equity Index Swap Agreements -58.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- Investor Class January 7, 1994 Advisor Class August 5, 1998 A-Class March 31, 2004 C-Class March 15, 2001 The Fund invests principally in derivative instruments; such as equity index swap agreements, futures contracts, and options on index futures. 10 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- OTC FUND OBJECTIVE: To provide investment results that correspond to a benchmark for over-the-counter securities. The Fund's current benchmark is the Nasdaq 100 Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] OTC FUND NASDAQ 100 INDEX --------- ---------------- Other 5.9% 7.3% Information Technology 57.5% 61.4% Consumer Discretionary 18.5% 15.8% Health Care 14.5% 15.5% Futures Contracts 3.4% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- Investor Class February 14, 1994 Advisor Class September 22, 1998 A-Class March 31, 2004 C-Class March 26, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------- Qualcomm, Inc. 6.3% Microsoft Corp. 6.1% Apple Computer, Inc. 4.7% Intel Corp. 4.5% Cisco Systems, Inc. 4.0% Amgen, Inc. 3.6% Dell, Inc. 3.2% eBay, Inc. 2.9% Yahoo!, Inc. 2.3% Starbucks Corp. 2.1% - ------------------------------------------------------- Top Ten Total 39.7% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. ARKTOS FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the Nasdaq 100 Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] ARKTOS FUND NASDAQ 100 INDEX ----------- ---------------- Other 7.3% Information Technology 61.4% Consumer Discretionary 15.8% Health Care 15.5% Futures Contracts Short Sales -14.5% Equity Index Swap Agreements Short Sales -86.4% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- Investor Class September 3, 1998 Advisor Class August 1, 2003 A-Class March 31, 2004 C-Class March 7, 2001 The Fund invests principally in derivative instruments; such as equity index swap agreements, futures contracts, and options on index futures. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 11 FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MEDIUS FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark for mid-cap securities. The Fund's current benchmark is the S&P MidCap 400(R) Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] MEDIUS FUND S&P MIDCAP 400 INDEX ----------- -------------------- Other 6.5% 8.0% Information Technology 11.4% 15.2% Consumer Discretionary 12.7% 17.5% Health Care 9.0% 12.3% Industrials 9.7% 12.5% Financials 13.6% 17.4% Energy 6.6% 9.0% Utilities 5.9% 8.1% Futures Contracts 30.4% Equity Index Swap Agreements 43.9% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- A-Class March 31, 2004 C-Class August 20, 2001 H-Class August 16, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------- Legg Mason, Inc. 1.1% Omnicare, Inc. 0.9% Microchip Technology, Inc. 0.8% Radian Group, Inc. 0.8% Dun & Bradstreet Corp. 0.8% Lyondell Chemical Co. 0.8% Pacificare Health Systems 0.8% Lam Research Corp. 0.8% Macerich Co. 0.8% DST Systems, Inc. 0.8% - ------------------------------------------------------- Top Ten Total 8.4% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. INVERSE MID-CAP FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the S&P MidCap 400 Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] INVERSE MID-CAP FUND S&P MIDCAP 400 INDEX -------------------- -------------------- Other 8.0% Consumer Discretionary 17.5% Financials 17.4% Information Technology 15.2% Industrials 12.5% Health Care 12.3% Energy 9.0% Utilities 8.1% Futures Contracts -20.4% Equity Index Swap Agreements -79.8% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- A-Class March 31, 2004 C-Class February 20, 2004 H-Class February 20, 2004 The Fund invests principally in derivative instruments; such as equity index swap agreements, futures contracts, and options on index futures. 12 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MEKROS FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark for small-cap securities. The Fund's current benchmark is the Russell 2000(R) Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] MEKROS FUND RUSSELL 2000 INDEX ----------- ------------------ Other 9.1% 9.2% Information Technology 13.7% 17.5% Consumer Discretionary 11.7% 18.3% Health Care 9.7% 12.2% Industrials 11.5% 14.1% Financials 16.1% 17.0% Energy 5.0% 6.1% Materials 5.6% Futures Contracts 33.7% Equity Index Swap Agreements 39.4% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------ A-Class March 31, 2004 C-Class January 23, 2001 H-Class November 1, 2000 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------ York International Corp. 0.4% Reliance Steel & Aluminum Co. 0.4% United Therapeutics Corp. 0.3% Champion Enterprises, Inc. 0.3% Cimarex Energy Co. 0.3% Resources Connection, Inc. 0.3% Lennox International, Inc. 0.3% Cal Dive International, Inc. 0.3% Kilroy Realty Corp. 0.3% Intergraph Corp. 0.3% - ------------------------------------------------ Top Ten Total 3.2% - ------------------------------------------------ "Ten Largest Holdings" exclude any temporary cash or derivative investments. INVERSE SMALL-CAP FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark. The Fund's current benchmark is the inverse of the performance of the Russell 2000 Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] INVERSE SMALL-CAP FUND RUSSELL 2000 INDEX ---------------------- ------------------ Other 9.2% Information Technology 17.5% Consumer Discretionary 18.3% Health Care 12.2% Industrials 14.1% Financials 17.0% Energy 6.1% Materials 5.6% Futures Contracts Short Sales -2.1% Equity Index Swap Agreements Short Sales -98.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------- A-Class March 31, 2004 C-Class February 20, 2004 H-Class February 20, 2004 The Fund invests principally in derivative instruments; such as equity index swap agreements, futures contracts, and options on index futures. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 13 FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND OBJECTIVE: To provide investment results that correspond to a benchmark for U.S. Government securities. The Fund's current benchmark is 120% of the 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. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] U.S. GOVERNMENT BOND FUND ------------------------- U.S. Treasury Obligations 84.4% Futures Contracts 36.4% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ----------------------------------------------- Investor Class January 3, 1994 Advisor Class August 1, 2003 A-Class March 31, 2004 C-Class May 2, 2001 The Fund invests principally in U.S. Government securities and in derivative instruments; such as futures and options contracts. JUNO FUND OBJECTIVE: To provide total returns that will inversely correlate to the price movements of a benchmark for U.S. Treasury debt instruments or futures contracts on a specified debt instrument. The Fund's current benchmark is the inverse 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. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] JUNO FUND --------- U.S. Treasury Obligations Short Sales -56.9% Futures Contracts Short Sales -43.5% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ---------------------------------------------- Investor Class March 3, 1995 Advisor Class August 1, 2003 A-Class March 31, 2004 C-Class March 28, 2001 The Fund invests principally in short sales of long-term Treasury bonds and derivative instruments; such as futures and options contracts. 14 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark. The Fund's current benchmark is the Dow Jones STOXX 50 (SM) Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] LARGE-CAP EUROPE FUND DOW JONES STOXX 50 INDEX --------------------- ------------------------ Other 12.1% 11.5% Financials 28.4% 33.8% Energy 14.7% 18.0% Consumer, Non-cyclical 21.5% Health Care 11.8% Telecommunication Services 9.1% 15.2% Consumer Staples 5.8% Equity Index Swap Agreements 43.7% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- A-Class March 31, 2004 C-Class May 10, 2001 H-Class May 8, 2000 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - ------------------------------------------------------- BP PLC -- SP ADR 6.1% HSBC Holdings PLC -- SP ADR 4.6% Novartis AG -- SP ADR 4.2% Total SA -- SP ADR 4.0% GlaxoSmithKline PLC -- SP ADR 4.0% Vodafone Group PLC -- SP ADR 4.0% UBS AG 3.6% Royal Dutch Shell PLC -- SP ADR 3.1% Banco Santander Central Hispano SA -- SP ADR 2.7% Banco Bilbao Vizcaya Argentaria SA -- SP ADR 2.6% - ------------------------------------------------------- Top Ten Total 38.9% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. LARGE-CAP JAPAN FUND OBJECTIVE: To provide investment results that correlate to the performance of a specific benchmark. The Fund's current benchmark is the Topix 100 Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] LARGE-CAP JAPAN FUND TOPIX 100 INDEX -------------------- --------------- Other 5.2% Consumer, Cyclical 26.9% Financial 24.5% Industrial 14.2% Communications 11.1% Consumer, Non-cyclical 7.4% Utilities 5.4% Technology 5.3% Futures Contracts 39.2% Equity Index Swap Agreements 85.6% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------------------- A-Class March 31, 2004 C-Class March 1, 2002 H-Class May 8, 2000 The Fund invests principally in derivative instruments; such as equity index swap agreements, futures contracts, and options on index futures. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 15 FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for small-cap value securities. The Fund's current benchmark is the S&P SmallCap 600/Barra Value Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] S&P SMALLCAP 600/BARRA SMALL-CAP VALUE FUND VALUE INDEX -------------------- ---------------------- Other 4.6% 3.9% Financials 21.4% 20.4% Industrials 20.3% 21.0% Information Technology 14.2% 15.0% Consumer Discretionary 12.2% 12.2% Materials 7.8% 7.1% Utilities 7.1% 7.2% Energy 6.2% 7.3% Health Care 5.9% 5.9% "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) - ------------------------------------------------------- Cimarex Energy Co. 1.4% Cooper Cos., Inc. 1.3% Standard-Pacific Corp. 1.1% MDC Holdings, Inc. 1.0% Southern Union Co. 1.0% Atmos Energy Corp. 0.9% Hughes Supply, Inc. 0.8% New Century Financial Corp. 0.8% South Financial Group, Inc. 0.8% Colonial Properties Trust 0.7% - ------------------------------------------------------- Top Ten Total 9.8% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. MID-CAP VALUE FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for mid-cap securities. The Fund's current benchmark is the S&P MidCap 400/Barra Value Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] MID-CAP VALUE FUND S&P MIDCAP 400/BARRA VALUE INDEX ------------------ -------------------------------- Other 4.0% 4.1% Financials 24.0% 23.7% Information Technology 13.6% 13.7% Utilities 13.0% 13.1% Consumer Discretionary 10.6% 11.1% Energy 10.2% 10.3% Industrials 9.3% 9.4% Materials 7.9% 7.9% Health Care 7.2% 6.7% "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) - ------------------------------------------------------- SanDisk Corp. 1.7% Noble Energy, Inc. 1.6% Lennar Corp. -- Class A 1.5% Pioneer Natural Resources Co. 1.5% Fidelity National Financial, Inc. 1.5% ENSCO International, Inc. 1.4% Pacificare Health Systems 1.3% Newfield Exploration Co. 1.2% Omnicare, Inc. 1.1% Lyondell Chemical Co. 1.1% - ------------------------------------------------------- Top Ten Total 13.9% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 16 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for large-cap value securities. The Fund's current benchmark is the S&P 500/Barra Value Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] LARGE-CAP VALUE FUND S&P 500/BARRA VALUE INDEX -------------------- ------------------------- Other 6.7% 7.0% Financials 35.9% 35.8% Consumer Discretionary 11.8% 12.4% Energy 9.9% 9.7% Industrials 8.1% 8.2% Health Care 7.7% 7.3% Information Technology 7.3% 8.1% Utilities 6.4% 6.5% Telecommunication Services 5.9% 5.0% "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) - ------------------------------------------------------ Citigroup, Inc. 4.2% Pfizer, Inc. 3.3% Bank of America Corp. 3.0% American International Group, Inc. 2.8% Chevron Corp. 2.6% J.P. Morgan Chase & Co. 2.1% Wells Fargo & Co. 1.7% ConocoPhillips 1.7% Verizon Communications, Inc. 1.6% Time Warner, Inc. 1.5% - ------------------------------------------------------ Top Ten Total 24.5% - ------------------------------------------------------ "Ten Largest Holdings" exclude any temporary cash or derivative investments. SMALL-CAP GROWTH FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for small-cap growth securities. The Fund's current benchmark is the S&P SmallCap 600/Barra Growth Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] S&P SMALLCAP 600/BARRA SMALL-CAP GROWTH FUND GROWTH INDEX --------------------- ---------------------- Other 8.3% 9.2% Health Care 20.3% 21.3% Consumer Discretionary 19.5% 19.3% Industrials 15.6% 15.2% Information Technology 15.3% 14.9% Energy 12.8% 12.5% Financials 7.9% 7.6% "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) - ------------------------------------------------ Southwestern Energy Co. 2.2% NVR, Inc. 1.8% Massey Energy Co. 1.4% Roper Industries, Inc. 1.2% Energen Corp. 1.2% Oshkosh Truck Corp. 1.2% Respironics, Inc. 1.1% Florida Rock Industries, Inc. 1.1% UGI Corp. 1.1% Pharmaceutical Product Development, Inc. 1.1% - ------------------------------------------------ Top Ten Total 13.4% - ------------------------------------------------ "Ten Largest Holdings" exclude any temporary cash or derivative investments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 17 FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for mid-cap growth securities. The Fund's current benchmark is the S&P MidCap 400/Barra Growth Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] S&P MIDCAP 400/BARRA MID-CAP GROWTH FUND GROWTH INDEX ------------------- -------------------- Other 8.3% 7.6% Consumer Discretionary 22.7% 23.4% Health Care 16.9% 17.6% Information Technology 16.4% 16.7% Industrials 16.0% 15.4% Financials 11.9% 11.5% Energy 8.3% 7.8% "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) - ------------------------------------------------------- Legg Mason, Inc. 2.2% Peabody Energy Corp. 2.0% Whole Foods Market, Inc. 1.6% Questar Corp. 1.4% Smith International, Inc. 1.3% Precision Castparts Corp. 1.3% Harman International Industries, Inc. 1.2% Chico's FAS, Inc. 1.2% Cognizant Technology Solutions Corp. -- Class A 1.2% Microchip Technology, Inc. 1.1% - ------------------------------------------------------- Top Ten Total 14.5% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. LARGE-CAP GROWTH FUND OBJECTIVE: To provide investment results that match the performance of a benchmark for large-cap growth securities. The Fund's current benchmark is the S&P 500/Barra Growth Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] LARGE-CAP GROWTH FUND S&P 500/BARRA GROWTH INDEX --------------------- -------------------------- Other 5.8% 5.7% Information Technology 23.6% 23.8% Health Care 19.0% 19.1% Consumer Staples 17.3% 17.3% Industrials 14.1% 14.1% Energy 10.5% 10.5% Consumer Discretionary 9.5% 9.5% "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) - ------------------------------------------------------- Exxon Mobil Corp. 7.4% General Electric Co. 6.6% Microsoft Corp. 4.4% Johnson & Johnson, Inc. 3.5% Procter & Gamble Co. 2.9% Altria Group, Inc. 2.8% Intel Corp. 2.8% International Business Machines Corp. 2.4% Cisco Systems, Inc. 2.1% Wal-Mart Stores, Inc. 2.0% - ------------------------------------------------------- Top Ten Total 36.9% - ------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 18 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (CONTINUED) - -------------------------------------------------------------------------------- STRENGTHENING DOLLAR FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the performance of the U.S. Dollar Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] STRENGTHENING DOLLAR FUND U.S. DOLLAR INDEX ------------------------- ----------------- Other 7.8% Euro 57.6% Japanese Yen 13.6% British Pound 11.9% Canadian Dollar 9.1% Futures Contracts 6.6% Currency Index Swap Agreements 193.7% 0.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------- A-Class May 25, 2005 C-Class May 25, 2005 H-Class May 25, 2005 The Fund invests principally in derivative instruments; such as currency index swap agreements, futures contracts, and options on index futures. WEAKENING DOLLAR FUND OBJECTIVE: To provide investment results that will match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 200% of the inverse (opposite) performance of the U.S. Dollar Index. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] WEAKENING DOLLAR FUND U.S. DOLLAR INDEX --------------------- ----------------- Other 7.8% Euro 57.6% Japanese Yen 13.6% British Pound 11.9% Canadian Dollar 9.1% Currency Index Swap Agreements -199.3% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - ------------------------------------------- A-Class May 25, 2005 C-Class May 25, 2005 H-Class May 25, 2005 The Fund invests principally in derivative instruments; such as currency index swap agreements, futures contracts, and options on index futures. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 19 FUND PROFILES (CONCLUDED) - -------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND OBJECTIVE: To provide security of principal, high current income and liquidity. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] U.S. GOVERNMENT MONEY MARKET FUND --------------------------------- Federal Home Loan Bank FADN 32.8% Freddie Mac FADN 24.5% Farmer Mac FADN 23.4% Federal Farm Credit Bank FADN 9.4% Repurchase Agreements 8.7% FADN - Federal Agency Discount Notes INCEPTION DATES: - ------------------------------------------- Investor Class December 1, 1993 Advisor Class April 1, 1998 A-Class March 31, 2004 C-Class October 19, 2000 The Fund invests principally in U.S. Government securities. 20 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT MASTER - FEEDER ARRANGEMENT - -------------------------------------------------------------------------------- Nova Fund, Ursa Fund, Arktos Fund and Juno Fund are operating under a 'master-feeder arrangement'. Under a master-feeder arrangement, a Feeder Fund ("feeder") invests substantially all of its assets in the Master Portfolio ("master"), a separate open-ended investment company that has the same investment objectives as the feeder, e.g., the Nova Fund would act as a feeder, holding shares of the Nova Master Portfolio as its only investment. The Master Portfolio, in turn, invests in securities and derivatives to meet its investment objective. The Feeder Fund is the sole shareholder of the Master Portfolio and is the only part of the master-feeder relationship in which shareholders can invest. As a shareholder of a Feeder Fund, you have indirect ownership of the investments of the corresponding Master Portfolio. Therefore, the Schedules of Investments of the masters are provided here to illustrate securities in which the masters invest and, indirectly, what the feeders hold. Please see Notes to Financial Statements for more information about the master-feeder arrangement. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 21 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 89.9% FINANCIALS 17.8% BANKS 4.8% Bank of America Corp.+ 72,170 $ 3,038,357 Wachovia Corp.+ 58,408 2,779,637 U.S. Bancorp+ 78,816 2,213,153 National City Corp. 43,710 1,461,662 Wells Fargo & Co.+ 23,170 1,357,067 North Fork Bancorporation, Inc.+ 52,893 1,348,771 Marshall & Ilsley Corp. 28,564 1,242,820 SunTrust Banks, Inc.+ 11,670 810,482 KeyCorp+ 3,080 99,330 --------------- TOTAL BANKS 14,351,279 --------------- INSURANCE 4.1% American International Group, Inc.+ 45,160 2,798,114 MetLife, Inc.+ 39,337 1,960,163 St. Paul Travelers Cos., Inc. 41,150 1,846,400 Hartford Financial Services Group, Inc.+ 21,405 1,651,824 Chubb Corp.+ 16,670 1,492,798 UnumProvident Corp.+ 60,500 1,240,250 Allstate Corp. 21,090 1,166,066 --------------- TOTAL INSURANCE 12,155,615 --------------- DIVERSIFIED FINANCIALS 3.2% Citigroup, Inc.+ 135,583 6,171,738 J.P. Morgan Chase & Co. 56,860 1,929,260 Principal Financial Group, Inc. 29,960 1,419,205 --------------- TOTAL DIVERSIFIED FINANCIALS 9,520,203 --------------- CAPITAL MARKETS 2.6% Lehman Brothers Holdings, Inc.+ 16,240 1,891,635 Franklin Resources, Inc.+ 16,760 1,407,170 Mellon Financial Corp. 43,630 1,394,851 E*Trade Financial Corp.* 73,170 1,287,792 Charles Schwab Corp.+ 51,000 735,930 Merrill Lynch & Co., Inc. 9,570 587,120 Morgan Stanley 6,510 351,149 Goldman Sachs Group, Inc. 680 82,674 --------------- TOTAL CAPITAL MARKETS 7,738,321 --------------- THRIFTS & MORTGAGE FINANCE 1.3% Washington Mutual, Inc.+ 46,932 1,840,673 Sovereign Bancorp, Inc.+ 54,840 1,208,674 Golden West Financial Corp.+ 15,116 897,739 Fannie Mae 990 44,372 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 3,991,458 --------------- CONSUMER FINANCE 1.1% Capital One Financial Corp.+ 19,900 1,582,448 Providian Financial Corp.* 64,821 1,146,035 American Express Co. 12,540 720,298 --------------- TOTAL CONSUMER FINANCE 3,448,781 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ REAL ESTATE 0.7% Vornado Realty Trust 15,100 $ 1,307,962 Simon Property Group, Inc.+ 10,130 750,835 --------------- TOTAL REAL ESTATE 2,058,797 --------------- TOTAL FINANCIALS 53,264,454 --------------- INFORMATION TECHNOLOGY 13.8% COMPUTERS & PERIPHERALS 3.3% Dell, Inc.* 86,687 2,964,696 International Business Machines Corp. 32,240 2,586,293 Apple Computer, Inc.* 41,340 2,216,237 NCR Corp.* 38,441 1,226,652 Hewlett-Packard Co. 31,370 916,004 Gateway, Inc.* 6,786 18,322 --------------- TOTAL COMPUTERS & PERIPHERALS 9,928,204 --------------- SOFTWARE 3.3% Microsoft Corp.+ 199,170 5,124,644 Autodesk, Inc. 30,480 1,415,491 Intuit, Inc.*+ 28,371 1,271,304 Parametric Technology Corp.* 172,643 1,203,322 Oracle Corp.* 24,900 308,511 Citrix Systems, Inc.*+ 10,368 260,652 Compuware Corp.* 27,210 258,495 --------------- TOTAL SOFTWARE 9,842,419 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3.0% Intel Corp. 192,810 4,752,766 Nvidia Corp.*+ 36,242 1,242,376 Novellus Systems, Inc.*+ 44,438 1,114,505 KLA-Tencor Corp.+ 18,450 899,622 Texas Instruments, Inc.+ 20,260 686,814 Applied Materials, Inc. 11,310 191,818 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 8,887,901 --------------- COMMUNICATIONS EQUIPMENT 2.5% Cisco Systems, Inc.* 202,760 3,635,487 Motorola, Inc.+ 70,084 1,548,156 Corning, Inc.* 55,876 1,080,083 Qualcomm, Inc. 13,560 606,810 ADC Telecommunications, Inc.* 26,370 602,818 --------------- TOTAL COMMUNICATIONS EQUIPMENT 7,473,354 --------------- IT CONSULTING & SERVICES 1.0% Fiserv, Inc.*+ 28,265 1,296,515 Paychex, Inc.+ 33,910 1,257,383 Affiliated Computer Services, Inc. -- Class A*+ 4,616 252,034 --------------- TOTAL IT CONSULTING & SERVICES 2,805,932 --------------- INTERNET SOFTWARE & SERVICES 0.3% Yahoo!, Inc.*+ 29,340 992,866 --------------- TOTAL INTERNET SOFTWARE & SERVICES 992,866 --------------- See Notes to Financial Statements. 22 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ELECTRONIC EQUIPMENT & INSTRUMENTS 0.3% Jabil Circuit, Inc.*+ 26,149 $ 808,527 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 808,527 --------------- OFFICE ELECTRONICS 0.1% Xerox Corp.*+ 23,127 315,683 --------------- TOTAL OFFICE ELECTRONICS 315,683 --------------- TOTAL INFORMATION TECHNOLOGY 41,054,886 --------------- HEALTH CARE 12.0% PHARMACEUTICALS 6.0% Pfizer, Inc. 215,538 5,381,984 Johnson & Johnson, Inc. 63,520 4,019,546 Abbott Laboratories 61,934 2,626,002 Merck & Co., Inc. 65,090 1,771,099 Watson Pharmaceuticals, Inc.*+ 32,790 1,200,442 King Pharmaceuticals, Inc.* 73,740 1,134,121 Schering-Plough Corp. 37,190 782,849 Eli Lilly & Co.+ 7,880 421,738 Wyeth 8,550 395,608 Bristol-Myers Squibb Co.+ 3,720 89,503 --------------- TOTAL PHARMACEUTICALS 17,822,892 --------------- HEALTH CARE PROVIDERS & SERVICES 2.7% WellPoint, Inc.* 29,257 2,218,266 Aetna, Inc.+ 20,208 1,740,717 UnitedHealth Group, Inc.+ 30,430 1,710,166 Humana, Inc.* 25,720 1,231,473 CIGNA Corp. 6,660 784,948 McKesson Corp. 5,640 267,618 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 7,953,188 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 2.0% Baxter International, Inc. 41,100 1,638,657 Hospira, Inc.* 30,020 1,229,920 Waters Corp.* 26,843 1,116,669 C.R. Bard, Inc. 13,112 865,785 Medtronic, Inc. 10,220 547,996 Becton, Dickinson & Co. 8,680 455,092 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 5,854,119 --------------- BIOTECHNOLOGY 1.3% Amgen, Inc.* 35,910 2,860,950 Applera Corp. - Applied Biosystems Group 50,950 1,184,078 --------------- TOTAL BIOTECHNOLOGY 4,045,028 --------------- TOTAL HEALTH CARE 35,675,227 --------------- INDUSTRIALS 10.0% INDUSTRIAL CONGLOMERATES 3.9% General Electric Co. 277,911 9,357,263 Textron, Inc. 18,436 1,322,230 Tyco International Ltd.+ 23,570 656,425 3M Co.+ 3,980 291,973 --------------- TOTAL INDUSTRIAL CONGLOMERATES 11,627,891 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AEROSPACE & DEFENSE 2.0% Lockheed Martin Corp.+ 25,920 $ 1,582,157 Raytheon Co. 38,906 1,479,206 Rockwell Collins, Inc.+ 26,540 1,282,413 Boeing Co. 18,642 1,266,724 United Technologies Corp. 4,658 241,470 L-3 Communications Holdings, Inc.+ 1,040 82,233 Northrop Grumman Corp. 320 17,392 --------------- TOTAL AEROSPACE & DEFENSE 5,951,595 --------------- MACHINERY 1.3% Eaton Corp. 19,658 1,249,266 Parker Hannifin Corp. 19,034 1,224,076 Caterpillar, Inc. 15,320 900,050 Cummins, Inc. 4,903 431,415 --------------- TOTAL MACHINERY 3,804,807 --------------- AIR FREIGHT & COURIERS 0.9% FedEx Corp.+ 18,998 1,655,296 United Parcel Service, Inc. -- Class B 14,032 970,032 --------------- TOTAL AIR FREIGHT & COURIERS 2,625,328 --------------- COMMERCIAL SERVICES & SUPPLIES 0.6% Robert Half International, Inc. 32,340 1,150,981 Monster Worldwide, Inc.*+ 26,195 804,448 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,955,429 --------------- ROAD & RAIL 0.6% Norfolk Southern Corp. 39,000 1,581,840 Burlington Northern Santa Fe Corp. 1,550 92,690 --------------- TOTAL ROAD & RAIL 1,674,530 --------------- ELECTRICAL EQUIPMENT 0.4% Rockwell Automation, Inc. 21,230 1,123,067 --------------- TOTAL ELECTRICAL EQUIPMENT 1,123,067 --------------- BUILDING PRODUCTS 0.2% Masco Corp.+ 9,770 299,744 American Standard Cos., Inc. 3,910 182,010 --------------- TOTAL BUILDING PRODUCTS 481,754 --------------- AIRLINES 0.1% Southwest Airlines Co. 16,480 244,728 --------------- TOTAL AIRLINES 244,728 --------------- CONSTRUCTION & ENGINEERING 0.0% Fluor Corp. 2,050 131,979 --------------- TOTAL CONSTRUCTION & ENGINEERING 131,979 --------------- TRADING COMPANIES & DISTRIBUTORS 0.0% W.W. Grainger, Inc. 1,800 113,256 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 113,256 --------------- TOTAL INDUSTRIALS 29,734,364 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 23 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER DISCRETIONARY 9.9% MEDIA 3.2% The Walt Disney Co.+ 93,900 $ 2,265,807 News Corp. -- Class A 127,120 1,981,801 McGraw-Hill Cos., Inc.+ 31,370 1,507,015 Omnicom Group, Inc. 16,841 1,408,413 Time Warner, Inc. 55,430 1,003,837 Comcast Corp. -- Class A*+ 29,850 876,993 Viacom, Inc. -- Class B+ 7,780 256,818 Gannett Co., Inc. 3,610 248,476 Tribune Co. 210 7,117 --------------- TOTAL MEDIA 9,556,277 --------------- SPECIALTY RETAIL 1.9% Home Depot, Inc.+ 35,250 1,344,435 The Gap, Inc. 73,290 1,277,445 AutoZone, Inc.*+ 12,736 1,060,272 Sherwin-Williams Co. 18,395 810,667 Best Buy Co., Inc.+ 13,785 600,061 Lowe's Cos., Inc.+ 3,440 221,536 Office Depot, Inc.*+ 7,194 213,662 AutoNation, Inc.*+ 7,900 157,763 --------------- TOTAL SPECIALTY RETAIL 5,685,841 --------------- HOTELS, RESTAURANTS & LEISURE 1.3% McDonald's Corp. 57,650 1,930,699 Darden Restaurants, Inc.+ 34,903 1,060,004 Starbucks Corp.* 18,551 929,405 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 3,920,108 --------------- MULTILINE RETAIL 1.0% Federated Department Stores, Inc. 22,700 1,517,949 Nordstrom, Inc. 29,200 1,002,144 Sears Holdings Corp.* 1,830 227,689 Target Corp. 2,260 117,362 J.C. Penney Holding Co., Inc. 2,160 102,427 --------------- TOTAL MULTILINE RETAIL 2,967,571 --------------- HOUSEHOLD DURABLES 0.6% Black & Decker Corp. 13,498 1,108,051 Newell Rubbermaid, Inc.+ 22,505 509,738 KB Home 2,580 188,856 --------------- TOTAL HOUSEHOLD DURABLES 1,806,645 --------------- COMMERCIAL SERVICES & SUPPLIES 0.4% H&R Block, Inc.+ 51,580 1,236,888 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,236,888 --------------- AUTOMOBILES 0.4% Harley-Davidson, Inc.+ 24,050 1,164,982 --------------- TOTAL AUTOMOBILES 1,164,982 --------------- TEXTILES & APPAREL 0.4% Nike, Inc. -- Class B+ 13,220 1,079,810 --------------- TOTAL TEXTILES & APPAREL 1,079,810 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INTERNET & CATALOG RETAIL 0.4% eBay, Inc.* 26,070 $ 1,074,084 --------------- TOTAL INTERNET & CATALOG RETAIL 1,074,084 --------------- AUTO COMPONENTS 0.1% Goodyear Tire & Rubber Co.*+ 30,501 475,511 --------------- TOTAL AUTO COMPONENTS 475,511 --------------- LEISURE EQUIPMENT & PRODUCTS 0.1% Brunswick Corp. 12,341 465,626 Mattel, Inc.+ 220 3,669 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 469,295 --------------- DISTRIBUTORS 0.1% Genuine Parts Co. 4,187 179,622 --------------- TOTAL DISTRIBUTORS 179,622 --------------- TOTAL CONSUMER DISCRETIONARY 29,616,634 --------------- CONSUMER STAPLES 8.8% FOOD & DRUG RETAILING 2.1% Wal-Mart Stores, Inc.+ 84,780 3,715,060 Supervalu, Inc. 37,713 1,173,629 Sysco Corp. 33,925 1,064,227 Costco Wholesale Corp.+ 4,680 201,661 Walgreen Co.+ 1,810 78,644 --------------- TOTAL FOOD & DRUG RETAILING 6,233,221 --------------- BEVERAGES 1.9% PepsiCo, Inc. 41,810 2,371,045 Coca-Cola Enterprises, Inc. 60,113 1,172,204 Coca-Cola Co. 26,090 1,126,827 Constellation Brands, Inc. -- Class A*+ 42,120 1,095,120 --------------- TOTAL BEVERAGES 5,765,196 --------------- HOUSEHOLD PRODUCTS 1.8% Procter & Gamble Co.+ 54,741 3,254,900 Kimberly-Clark Corp. 27,674 1,647,433 Clorox Co.+ 8,600 477,644 --------------- TOTAL HOUSEHOLD PRODUCTS 5,379,977 --------------- TOBACCO 1.4% Altria Group, Inc.+ 35,300 2,601,963 Reynolds American, Inc.+ 15,110 1,254,432 UST, Inc.+ 3,880 162,417 --------------- TOTAL TOBACCO 4,018,812 --------------- FOOD PRODUCTS 1.0% General Mills, Inc. 31,029 1,495,598 Archer-Daniels-Midland Co. 60,450 1,490,697 Campbell Soup Co. 2,800 83,300 --------------- TOTAL FOOD PRODUCTS 3,069,595 --------------- PERSONAL PRODUCTS 0.6% Alberto-Culver Co. -- Class B+ 25,302 1,132,264 Gillette Co. 11,723 682,279 --------------- TOTAL PERSONAL PRODUCTS 1,814,543 --------------- TOTAL CONSUMER STAPLES 26,281,344 --------------- See Notes to Financial Statements. 24 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ENERGY 8.5% OIL & GAS 7.7% Exxon Mobil Corp. 147,300 $ 9,359,442 ConocoPhillips 49,460 3,457,749 Chevron Corp. 37,620 2,435,143 Occidental Petroleum Corp. 22,020 1,881,169 Valero Energy Corp.+ 12,570 1,421,164 Kerr-McGee Corp. 14,190 1,377,991 Apache Corp. 14,170 1,065,867 Burlington Resources, Inc. 9,357 760,911 EOG Resources, Inc.+ 8,880 665,112 Murphy Oil Corp. 11,150 556,050 Marathon Oil Corp. 1,290 88,920 --------------- TOTAL OIL & GAS 23,069,518 --------------- ENERGY EQUIPMENT & SERVICES 0.8% Schlumberger Ltd. 14,010 1,182,164 Transocean, Inc.*+ 16,511 1,012,289 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 2,194,453 --------------- TOTAL ENERGY 25,263,971 --------------- UTILITIES 3.7% ELECTRIC UTILITIES 2.1% TXU Corp.+ 14,730 1,662,722 American Electric Power Co., Inc.+ 36,922 1,465,803 Edison International 30,853 1,458,730 Entergy Corp. 12,014 892,881 Allegheny Energy, Inc.*+ 24,708 759,030 --------------- TOTAL ELECTRIC UTILITIES 6,239,166 --------------- MULTI-UTILITIES 1.6% Duke Energy Corp.+ 54,850 1,599,975 TECO Energy, Inc.+ 64,543 1,163,065 CMS Energy Corp.*+ 69,620 1,145,249 CenterPoint Energy, Inc.+ 52,767 784,645 PG&E Corp.+ 2,960 116,180 --------------- TOTAL MULTI-UTILITIES 4,809,114 --------------- GAS UTILITIES 0.0% Nicor, Inc.+ 1,975 83,009 --------------- TOTAL GAS UTILITIES 83,009 --------------- TOTAL UTILITIES 11,131,289 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TELECOMMUNICATION SERVICES 2.8% DIVERSIFIED TELECOMMUNICATION SERVICES 2.0% Verizon Communications, Inc. 84,987 $ 2,778,225 Qwest Communications International, Inc.* 291,380 1,194,658 CenturyTel, Inc.+ 33,720 1,179,526 SBC Communications, Inc.+ 35,090 841,107 BellSouth Corp.+ 4,230 111,249 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 6,104,765 --------------- WIRELESS TELECOMMUNICATION SERVICES 0.8% Sprint Nextel Corp.+ 94,000 2,235,320 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 2,235,320 --------------- TOTAL TELECOMMUNICATION SERVICES 8,340,085 --------------- MATERIALS 2.6% CHEMICALS 1.3% Dow Chemical Co. 45,304 1,887,818 Ashland, Inc. 19,730 1,089,885 Eastman Chemical Co. 20,530 964,294 Hercules, Inc.* 1,100 13,442 --------------- TOTAL CHEMICALS 3,955,439 --------------- METALS & MINING 0.7% Phelps Dodge Corp. 10,532 1,368,423 Nucor Corp.+ 12,354 728,762 --------------- TOTAL METALS & MINING 2,097,185 --------------- PAPER & FOREST PRODUCTS 0.4% Weyerhaeuser Co.+ 16,047 1,103,231 Louisiana-Pacific Corp.+ 2,968 82,184 Georgia-Pacific Corp. 770 26,226 --------------- TOTAL PAPER & FOREST PRODUCTS 1,211,641 --------------- CONTAINERS & PACKAGING 0.1% Sealed Air Corp.*+ 8,650 410,529 Temple-Inland, Inc. 480 19,608 --------------- TOTAL CONTAINERS & PACKAGING 430,137 --------------- CONSTRUCTION MATERIALS 0.1% Vulcan Materials Co.+ 2,440 181,073 --------------- TOTAL CONSTRUCTION MATERIALS 181,073 --------------- TOTAL MATERIALS 7,875,475 --------------- TOTAL COMMON STOCKS (Cost $232,781,503) 268,237,729 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 25 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 7.3% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $12,337,543 $ 12,337,543 3.24% due 10/03/05 9,396,521 9,396,521 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $21,734,064) 21,734,064 --------------- SECURITIES LENDING COLLATERAL 19.6% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 58,369,738 58,369,738 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $58,369,738) 58,369,738 --------------- TOTAL INVESTMENTS 116.8% (Cost $312,885,305) $ 348,341,531 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (16.8)% $ (50,041,878) =============== NET ASSETS - 100.0% $ 298,299,653 - -------------------------------------------------------------------------------- UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED December 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $179,670,400) 2,912 $ (260,355) =============== * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. 26 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- URSA MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 54.5% Federal Home Loan Bank* 3.39% due 10/07/05 $ 50,000,000 $ 49,981,166 3.55% due 11/09/05 50,000,000 49,817,569 3.57% due 11/09/05 40,323,000 40,175,048 3.58% due 10/12/05 25,000,000 24,977,625 3.43% due 10/19/05 25,000,000 24,961,889 Freddie Mac* 3.70% due 12/12/05 50,000,000 49,640,278 3.53% due 11/01/05 25,000,000 24,928,910 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $264,482,485) 264,482,485 --------------- REPURCHASE AGREEMENTS 43.4% Repurchase Agreement (Note 6) 3.25% due 10/03/05+ 131,594,484 131,594,484 3.24% due 10/03/05 78,786,258 78,786,258 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $210,380,742) 210,380,742 --------------- TOTAL INVESTMENTS 97.9% (Cost $474,863,227) $ 474,863,227 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 2.1% $ 10,012,199 =============== NET ASSETS - 100.0% $ 484,875,426 - ------------------------------------------------------------------------------ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT December 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $204,535,500) 3,315 $ 859,043 =============== UNITS ----- EQUITY INDEX SWAP AGREEMENT SOLD SHORT December 2005 S&P 500 Index Swap, Maturing 12/14/05** (Notional Market Value $281,165,467) 228,811 $ 3,025,435 =============== * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. ** PRICE RETURN BASED ON S&P 500 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS EQUITY INDEX SWAP COLLATERAL AT SEPTEMBER 30, 2005. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 27 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- OTC FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 96.4% INFORMATION TECHNOLOGY 57.5% SOFTWARE 16.7% Microsoft Corp. 2,193,950 $ 56,450,333 Symantec Corp.*+ 835,750 18,938,095 Oracle Corp.* 1,372,070 16,999,947 Intuit, Inc.*+ 315,776 14,149,923 Adobe Systems, Inc.+ 338,269 10,097,330 Electronic Arts, Inc.*+ 170,290 9,687,798 Autodesk, Inc. 152,870 7,099,283 Check Point Software Technologies Ltd.*+ 290,665 7,068,973 BEA Systems, Inc.* 613,838 5,512,265 Citrix Systems, Inc.* 159,150 4,001,031 Mercury Interactive Corp.*+ 99,591 3,943,804 --------------- TOTAL SOFTWARE 153,948,782 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 13.3% Intel Corp. 1,676,157 41,317,270 Applied Materials, Inc. 1,005,767 17,057,808 KLA-Tencor Corp.+ 310,772 15,153,243 Novellus Systems, Inc.*+ 496,482 12,451,769 Marvell Technology Group Ltd.*+ 197,090 9,087,820 Lam Research Corp.*+ 238,300 7,261,001 Linear Technology Corp.+ 180,860 6,798,527 Maxim Integrated Products, Inc. 137,210 5,852,007 Broadcom Corp. -- Class A* 118,740 5,570,093 Microchip Technology, Inc. 83,630 2,518,936 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 123,068,474 --------------- COMMUNICATIONS EQUIPMENT 12.5% Qualcomm, Inc.+ 1,294,040 57,908,290 Cisco Systems, Inc.* 2,058,650 36,911,595 Research In Motion Ltd.*+ 124,030 8,483,652 Juniper Networks, Inc.*+ 233,780 5,561,626 Comverse Technology, Inc.*+ 171,560 4,506,881 JDS Uniphase Corp.*+ 761,170 1,689,797 --------------- TOTAL COMMUNICATIONS EQUIPMENT 115,061,841 --------------- COMPUTERS & PERIPHERALS 9.9% Apple Computer, Inc.* 811,370 43,497,546 Dell, Inc.* 870,218 29,761,455 Sandisk Corp.*+ 157,500 7,599,375 Network Appliance, Inc.* 288,050 6,838,307 QLogic Corp.* 97,080 3,320,136 --------------- TOTAL COMPUTERS & PERIPHERALS 91,016,819 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INTERNET SOFTWARE & SERVICES 2.9% Yahoo!, Inc.*+ 621,120 $ 21,018,701 VeriSign, Inc.*+ 284,511 6,080,000 --------------- TOTAL INTERNET SOFTWARE & SERVICES 27,098,701 --------------- IT CONSULTING & SERVICES 1.9% Paychex, Inc.+ 211,860 7,855,769 Fiserv, Inc.*+ 130,130 5,969,063 Cognizant Technology Solutions Corp.* 83,390 3,885,140 --------------- TOTAL IT CONSULTING & SERVICES 17,709,972 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.3% CDW Corp.+ 29,690 1,749,335 Sanmina-SCI Corp.* 277,440 1,190,217 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 2,939,552 --------------- TOTAL INFORMATION TECHNOLOGY 530,844,141 --------------- CONSUMER DISCRETIONARY 18.5% MEDIA 5.6% Comcast Corp. -- Class A*+ 610,010 17,922,094 Lamar Advertising Co.*+ 179,580 8,145,749 XM Satellite Radio Holdings, Inc.*+ 197,627 7,096,785 Sirius Satellite Radio, Inc.*+ 972,350 6,368,892 NTL, Inc.* 75,680 5,055,424 Liberty Global, Inc. -- Class A*+ 144,020 3,900,062 EchoStar Communications Corp. 102,310 3,025,307 --------------- TOTAL MEDIA 51,514,313 --------------- INTERNET & CATALOG RETAIL 4.7% eBay, Inc.* 652,780 26,894,536 IAC/InterActiveCorp*+ 499,860 12,671,451 Amazon.com, Inc.*+ 78,130 3,539,289 --------------- TOTAL INTERNET & CATALOG RETAIL 43,105,276 --------------- SPECIALTY RETAIL 2.5% Staples, Inc. 442,750 9,439,430 Bed Bath & Beyond, Inc.*+ 224,160 9,006,749 Ross Stores, Inc. 135,260 3,205,662 Petsmart, Inc. 68,650 1,495,197 --------------- TOTAL SPECIALTY RETAIL 23,147,038 --------------- HOTELS, RESTAURANTS & LEISURE 2.4% Starbucks Corp.* 386,980 19,387,698 Wynn Resorts Ltd.*+ 67,890 3,065,233 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 22,452,931 --------------- See Notes to Financial Statements. 28 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- OTC FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MULTILINE RETAIL 1.7% Sears Holdings Corp.*+ 119,845 $ 14,911,115 Dollar Tree Stores, Inc.*+ 49,000 1,060,850 --------------- TOTAL MULTILINE RETAIL 15,971,965 --------------- COMMERCIAL SERVICES & SUPPLIES 1.1% Apollo Group, Inc. -- Class A*+ 83,080 5,515,681 Career Education Corp.*+ 143,847 5,115,200 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 10,630,881 --------------- HOUSEHOLD DURABLES 0.5% Garmin Ltd.+ 61,740 4,187,824 --------------- TOTAL HOUSEHOLD DURABLES 4,187,824 --------------- TOTAL CONSUMER DISCRETIONARY 171,010,228 --------------- HEALTH CARE 14.5% BIOTECHNOLOGY 10.4% Amgen, Inc.* 420,960 33,537,883 Gilead Sciences, Inc.*+ 332,620 16,218,551 Genzyme Corp.* 209,390 15,000,700 Biogen Idec, Inc.* 233,470 9,217,396 Medimmune, Inc.* 191,790 6,453,733 Chiron Corp.* 131,290 5,726,870 Celgene Corp.*+ 96,400 5,236,448 Invitrogen Corp.*+ 62,290 4,686,077 --------------- TOTAL BIOTECHNOLOGY 96,077,658 --------------- PHARMACEUTICALS 1.6% Teva Pharmaceutical Industries Ltd. -- SP ADR+ 309,930 10,357,861 Sepracor, Inc.*+ 71,104 4,194,425 --------------- TOTAL PHARMACEUTICALS 14,552,286 --------------- HEALTH CARE PROVIDERS & SERVICES 1.3% Express Scripts, Inc.*+ 97,035 6,035,577 Patterson Cos., Inc.*+ 95,900 3,838,877 Lincare Holdings, Inc.*+ 56,430 2,316,451 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 12,190,905 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.2% Biomet, Inc.+ 223,759 7,766,675 DENTSPLY International, Inc. 55,150 2,979,203 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 10,745,878 --------------- TOTAL HEALTH CARE 133,566,727 --------------- INDUSTRIALS 3.1% MACHINERY 0.9% Paccar, Inc. 128,070 8,694,672 --------------- TOTAL MACHINERY 8,694,672 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AIR FREIGHT & COURIERS 0.8% Expeditors International Washington, Inc.+ 72,210 $ 4,100,084 C.H. Robinson Worldwide, Inc.+ 54,030 3,464,403 --------------- TOTAL AIR FREIGHT & COURIERS 7,564,487 --------------- COMMERCIAL SERVICES & SUPPLIES 0.6% Cintas Corp.+ 134,460 5,519,583 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 5,519,583 --------------- TRADING COMPANIES & DISTRIBUTORS 0.4% Fastenal Co.+ 56,074 3,425,561 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 3,425,561 --------------- ELECTRICAL EQUIPMENT 0.4% American Power Conversion Corp. 130,210 3,372,439 --------------- TOTAL ELECTRICAL EQUIPMENT 3,372,439 --------------- TOTAL INDUSTRIALS 28,576,742 --------------- CONSUMER STAPLES 1.5% FOOD & DRUG RETAILING 1.5% Costco Wholesale Corp.+ 195,300 8,415,477 Whole Foods Market, Inc.+ 40,420 5,434,469 --------------- TOTAL FOOD & DRUG RETAILING 13,849,946 --------------- TOTAL CONSUMER STAPLES 13,849,946 --------------- TELECOMMUNICATION SERVICES 0.8% DIVERSIFIED TELECOMMUNICATION SERVICES 0.8% MCI, Inc. 240,980 6,113,663 Level 3 Communications, Inc.*+ 510,336 1,183,979 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 7,297,642 --------------- TOTAL TELECOMMUNICATION SERVICES 7,297,642 --------------- MATERIALS 0.5% CHEMICALS 0.3% Sigma-Aldrich Corp. 40,210 2,575,853 --------------- TOTAL CHEMICALS 2,575,853 --------------- CONTAINERS & PACKAGING 0.2% Smurfit-Stone Container Corp.*+ 205,650 2,130,534 --------------- TOTAL CONTAINERS & PACKAGING 2,130,534 --------------- TOTAL MATERIALS 4,706,387 --------------- TOTAL COMMON STOCKS (Cost $544,577,673) 889,851,813 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 29 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- OTC FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 3.4% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $17,637,008 $ 17,637,008 3.24% due 10/03/05 13,432,700 13,432,700 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $31,069,708) 31,069,708 --------------- SECURITIES LENDING COLLATERAL 22.7% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 209,194,920 209,194,920 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $209,194,920) 209,194,920 --------------- TOTAL INVESTMENTS 122.5% (Cost $784,842,301) $ 1,130,116,441 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (22.5)% $ (207,449,947) =============== NET ASSETS - 100.0% $ 922,666,494 - -------------------------------------------------------------------------------- UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED December 2005 Nasdaq 100 Index Mini Futures Contracts (Aggregate Market Value of Contracts $31,272,800) 970 $ 56,557 =============== * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 30 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- ARKTOS MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 102.5% Repurchase Agreement (Note 6) 3.25% due 10/03/05+ $129,078,042 $ 129,078,042 3.24% due 10/03/05 84,049,015 84,049,015 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $213,127,057) 213,127,057 --------------- TOTAL INVESTMENTS 102.5% (Cost $213,127,057) $ 213,127,057 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (2.5)% $ (5,126,618) =============== NET ASSETS - 100.0% $ 208,000,439 - ------------------------------------------------------------------------------ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT December 2005 Nasdaq 100 Index Mini Futures Contracts (Aggregate Market Value of Contracts $30,144,400) 935 $ 153,297 =============== UNITS ------- EQUITY INDEX SWAP AGREEMENT SOLD SHORT December 2005 Nasdaq 100 Index Swap, Maturing 12/14/05* (Notional Market Value $179,701,350) 112,197 $ 517,438 =============== * PRICE RETURN BASED ON NASDAQ 100 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS EQUITY INDEX SWAP COLLATERAL AT SEPTEMBER 30, 2005. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 31 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 75.4% FINANCIALS 13.6% INSURANCE 3.2% Unitrin, Inc.+ 8,850 $ 420,021 American Financial Group, Inc./OH 11,300 383,409 W.R. Berkley Corp.+ 9,070 358,083 First American Corp. 6,910 315,580 Fidelity National Financial, Inc. 5,550 247,086 Horace Mann Educators Corp. 9,930 196,415 HCC Insurance Holdings, Inc.+ 4,798 136,887 Ohio Casualty Corp. 1,350 36,612 Allmerica Financial Corp.* 90 3,703 --------------- TOTAL INSURANCE 2,097,796 --------------- REAL ESTATE 2.9% Macerich Co. 7,815 507,506 Weingarten Realty Investors 11,870 449,279 Liberty Property Trust+ 10,380 441,565 Regency Centers Corp.+ 4,920 282,654 Highwoods Properties, Inc.+ 7,350 216,899 AMB Property Corp. 280 12,572 --------------- TOTAL REAL ESTATE 1,910,475 --------------- THRIFTS & MORTGAGE FINANCE 2.6% Radian Group, Inc.+ 10,160 539,496 PMI Group, Inc.+ 12,600 502,362 Astoria Financial Corp. 11,630 307,265 IndyMac Bancorp, Inc.+ 7,750 306,745 New York Community Bancorp, Inc.+ 3,980 65,272 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 1,721,140 --------------- BANKS 2.0% Associated Banc-Corp.+ 15,415 469,849 SVB Financial Group*+ 6,980 339,507 Commerce Bancorp, Inc./NJ+ 10,260 314,879 Bank of Hawaii Corp. 3,934 193,632 --------------- TOTAL BANKS 1,317,867 --------------- CAPITAL MARKETS 1.6% Legg Mason, Inc.+ 6,490 711,888 SEI Investments Co. 4,583 172,229 Raymond James Financial, Inc. 4,460 143,256 Investors Financial Services Corp.+ 460 15,134 --------------- TOTAL CAPITAL MARKETS 1,042,507 --------------- CONSUMER FINANCE 0.7% AmeriCredit Corp.*+ 19,114 456,251 --------------- TOTAL CONSUMER FINANCE 456,251 --------------- DIVERSIFIED FINANCIALS 0.6% Leucadia National Corp. 8,648 372,729 --------------- TOTAL DIVERSIFIED FINANCIALS 372,729 --------------- TOTAL FINANCIALS 8,918,765 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONSUMER DISCRETIONARY 12.7% SPECIALTY RETAIL 4.1% Pacific Sunwear of California, Inc.*+ 17,800 $ 381,632 Chico's FAS, Inc.*+ 9,054 333,187 Petsmart, Inc. 14,071 306,466 American Eagle Outfitters, Inc. 11,529 271,277 Ross Stores, Inc. 9,667 229,108 Abercrombie & Fitch Co. -- Class A 3,903 194,565 Advance Auto Parts, Inc.*+ 4,645 179,669 Barnes & Noble, Inc. 4,400 165,880 CarMax, Inc.*+ 4,770 149,158 Michaels Stores, Inc.+ 4,090 135,216 Urban Outfitters, Inc.*+ 4,270 125,538 O'Reilly Automotive, Inc.* 2,840 80,031 Payless Shoesource, Inc.*+ 4,460 77,604 Claire's Stores, Inc. 1,280 30,886 --------------- TOTAL SPECIALTY RETAIL 2,660,217 --------------- HOUSEHOLD DURABLES 2.9% American Greetings Corp. -- Class A+ 14,868 407,383 Lennar Corp. -- Class A+ 6,370 380,671 Toll Brothers, Inc.*+ 6,580 293,929 Ryland Group, Inc.+ 3,002 205,397 Harman International Industries, Inc. 1,630 166,700 Blyth, Inc. 6,300 140,427 Mohawk Industries, Inc.*+ 1,680 134,820 Hovnanian Enterprises, Inc. -- Class A*+ 2,040 104,448 Tupperware Corp.+ 2,030 46,243 --------------- TOTAL HOUSEHOLD DURABLES 1,880,018 --------------- MEDIA 1.9% Scholastic Corp.*+ 9,844 363,834 Catalina Marketing Corp.+ 15,880 361,111 Media General, Inc. 5,980 346,900 Harte-Hanks, Inc. 3,087 81,590 Entercom Communications Corp.* 1,810 57,178 Valassis Communications, Inc.* 830 32,353 Westwood One, Inc. 290 5,768 --------------- TOTAL MEDIA 1,248,734 --------------- HOTELS, RESTAURANTS & LEISURE 1.3% CBRL Group, Inc.+ 8,240 277,358 Applebee's International, Inc. 7,650 158,279 Boyd Gaming Corp. 3,490 150,489 International Speedway Corp. -- Class A 2,240 117,533 Brinker International, Inc.* 2,800 105,168 Cheesecake Factory, Inc.*+ 1,880 58,731 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 867,558 --------------- See Notes to Financial Statements. 32 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ TEXTILES & APPAREL 1.0% Timberland Co. -- Class A* 12,150 $ 410,427 Polo Ralph Lauren Corp. 5,100 256,530 --------------- TOTAL TEXTILES & APPAREL 666,957 --------------- AUTO COMPONENTS 0.6% Modine Manufacturing Co. 7,690 282,069 ArvinMeritor, Inc. 5,150 86,108 Lear Corp.+ 860 29,214 --------------- TOTAL AUTO COMPONENTS 397,391 --------------- MULTILINE RETAIL 0.5% Neiman-Marcus Group, Inc. -- Class A 2,482 248,076 Saks, Inc.* 5,560 102,860 --------------- TOTAL MULTILINE RETAIL 350,936 --------------- COMMERCIAL SERVICES & SUPPLIES 0.4% Career Education Corp.*+ 5,373 191,064 Education Management Corp.* 2,130 68,671 ITT Educational Services, Inc.* 520 25,662 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 285,397 --------------- TOTAL CONSUMER DISCRETIONARY 8,357,208 --------------- INFORMATION TECHNOLOGY 11.4% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.8% Microchip Technology, Inc. 17,930 540,052 Lam Research Corp.*+ 16,860 513,724 Integrated Device Technology, Inc.* 20,440 219,526 International Rectifier Corp.*+ 3,540 159,583 MEMC Electronic Materials, Inc.*+ 6,150 140,159 Cree, Inc.*+ 3,670 91,823 Semtech Corp.*+ 5,100 83,997 Credence Systems Corp.*+ 6,480 51,710 Triquint Semiconductor, Inc.* 4,910 17,283 Intersil Corp. -- Class A+ 620 13,504 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1,831,361 --------------- IT CONSULTING & SERVICES 2.8% DST Systems, Inc.*+ 9,230 506,081 Ceridian Corp.* 16,030 332,623 CSG Systems International, Inc.* 14,820 321,742 Cognizant Technology Solutions Corp.* 4,422 206,021 CheckFree Corp.*+ 3,720 140,690 Acxiom Corp.+ 7,320 137,030 MPS Group, Inc.* 10,404 122,767 Anteon International Corp.* 1,080 46,181 BISYS Group, Inc.* 1,200 16,116 --------------- TOTAL IT CONSULTING & SERVICES 1,829,251 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ SOFTWARE 1.8% McAfee, Inc.*+ 9,843 $ 309,267 Sybase, Inc.*+ 9,940 232,795 Wind River Systems, Inc.*+ 14,779 191,092 Activision, Inc.*+ 7,740 158,283 Macromedia, Inc.* 3,710 150,886 Fair Isaac Corp.+ 2,340 104,832 Cadence Design Systems, Inc.* 2,960 47,834 --------------- TOTAL SOFTWARE 1,194,989 --------------- COMPUTERS & PERIPHERALS 1.6% Sandisk Corp.*+ 8,110 391,308 Western Digital Corp.*+ 23,590 305,019 Imation Corp. 5,504 235,956 Diebold, Inc. 3,740 128,880 --------------- TOTAL COMPUTERS & PERIPHERALS 1,061,163 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.5% Arrow Electronics, Inc.* 11,260 353,114 Avnet, Inc.*+ 12,690 310,270 CDW Corp.+ 3,940 232,145 Amphenol Corp. -- Class A 2,080 83,907 National Instruments Corp.+ 1,395 34,373 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 1,013,809 --------------- COMMUNICATIONS EQUIPMENT 0.8% Harris Corp. 5,524 230,903 Powerwave Technologies, Inc.*+ 11,580 150,424 Avocent Corp.*+ 2,590 81,948 F5 Networks, Inc.*+ 1,660 72,160 ADTRAN, Inc. 396 12,474 --------------- TOTAL COMMUNICATIONS EQUIPMENT 547,909 --------------- OFFICE ELECTRONICS 0.1% Zebra Technologies Corp. -- Class A*+ 784 30,647 --------------- TOTAL OFFICE ELECTRONICS 30,647 --------------- TOTAL INFORMATION TECHNOLOGY 7,509,129 --------------- INDUSTRIALS 9.7% COMMERCIAL SERVICES & SUPPLIES 3.3% Dun & Bradstreet Corp.* 8,160 537,499 Herman Miller, Inc. 13,315 403,444 Republic Services, Inc. 10,778 380,356 HNI Corp. 3,534 212,817 Korn/Ferry International, Inc.* 9,140 149,805 Adesa, Inc. 6,760 149,396 Corporate Executive Board Co. 1,765 137,635 Stericycle, Inc.*+ 2,170 124,016 Copart, Inc.* 2,206 52,657 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 2,147,625 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 33 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MACHINERY 1.8% Harsco Corp. 4,277 $ 280,443 Federal Signal Corp. 13,750 234,987 Joy Global, Inc. 4,340 218,996 Trinity Industries, Inc.+ 3,450 139,690 Pentair, Inc. 3,816 139,284 Timken Co. 4,150 122,965 Donaldson Co., Inc.+ 1,430 43,658 Flowserve Corp.*+ 799 29,044 --------------- TOTAL MACHINERY 1,209,067 --------------- ROAD & RAIL 1.3% Yellow Roadway Corp.*+ 10,460 433,253 CNF, Inc. 7,470 392,175 --------------- TOTAL ROAD & RAIL 825,428 --------------- AEROSPACE & DEFENSE 1.1% Alliant Techsystems, Inc.*+ 5,950 444,167 Precision Castparts Corp. 5,320 282,492 --------------- TOTAL AEROSPACE & DEFENSE 726,659 --------------- ELECTRICAL EQUIPMENT 0.5% Thomas & Betts Corp.* 8,160 280,785 AMETEK, Inc.+ 1,640 70,471 --------------- TOTAL ELECTRICAL EQUIPMENT 351,256 --------------- AIR FREIGHT & COURIERS 0.5% C.H. Robinson Worldwide, Inc.+ 5,430 348,172 --------------- TOTAL AIR FREIGHT & COURIERS 348,172 --------------- TRADING COMPANIES & DISTRIBUTORS 0.4% GATX Corp.+ 6,250 247,187 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 247,187 --------------- CONSTRUCTION & ENGINEERING 0.3% Jacobs Engineering Group, Inc.*+ 3,430 231,182 --------------- TOTAL CONSTRUCTION & ENGINEERING 231,182 --------------- MARINE 0.2% Alexander & Baldwin, Inc. 2,490 132,568 --------------- TOTAL MARINE 132,568 --------------- INDUSTRIAL CONGLOMERATES 0.2% Teleflex, Inc.+ 1,467 103,424 --------------- TOTAL INDUSTRIAL CONGLOMERATES 103,424 --------------- AIRLINES 0.1% Alaska Air Group, Inc.*+ 2,380 69,163 --------------- TOTAL AIRLINES 69,163 --------------- TOTAL INDUSTRIALS 6,391,731 --------------- HEALTH CARE 8.9% HEALTH CARE PROVIDERS & SERVICES 3.6% Omnicare, Inc.+ 10,640 598,287 Pacificare Health Systems, Inc.*+ 6,520 520,166 Lincare Holdings, Inc.*+ 11,031 452,823 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Patterson Cos., Inc.*+ 8,707 $ 348,541 Apria Healthcare Group, Inc.* 5,068 161,720 Triad Hospitals, Inc.*+ 3,520 159,350 Health Net, Inc.* 1,548 73,251 Community Health Systems, Inc.* 1,323 51,346 LifePoint Hospitals, Inc.*+ 1,000 43,730 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 2,409,214 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 2.4% Hillenbrand Industries, Inc.+ 8,520 400,866 Varian Medical Systems, Inc.*+ 7,147 282,378 Varian, Inc.*+ 7,560 259,459 Inamed Corp.*+ 2,655 200,931 DENTSPLY International, Inc. 3,206 173,188 Edwards Lifesciences Corp.* 3,452 153,303 Intuitive Surgical, Inc.*+ 790 57,899 Gen-Probe, Inc.* 1,030 50,934 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,578,958 --------------- BIOTECHNOLOGY 1.5% Invitrogen Corp.*+ 4,396 330,711 Protein Design Labs, Inc.* 10,080 282,240 Charles River Laboratories International, Inc.*+ 5,840 254,741 Millennium Pharmaceuticals, Inc.*+ 4,894 45,661 Techne Corp.*+ 600 34,188 Cephalon, Inc.*+ 500 23,210 --------------- TOTAL BIOTECHNOLOGY 970,751 --------------- PHARMACEUTICALS 1.4% IVAX Corp.* 15,040 396,454 Barr Pharmaceuticals, Inc.* 6,430 353,136 Sepracor, Inc.*+ 3,080 181,689 --------------- TOTAL PHARMACEUTICALS 931,279 --------------- TOTAL HEALTH CARE 5,890,202 --------------- ENERGY 6.6% OIL & GAS 3.5% Peabody Energy Corp. 5,130 432,716 Overseas Shipholding Group, Inc.+ 6,860 400,144 Newfield Exploration Co.*+ 6,435 315,959 Pioneer Natural Resources Co.+ 5,020 275,698 Noble Energy, Inc.+ 5,000 234,500 Forest Oil Corp.* 3,580 186,518 Arch Coal, Inc.+ 2,530 170,775 Denbury Resources, Inc.* 3,187 160,752 Plains Exploration & Production Co.* 1,870 80,073 Western Gas Resources, Inc.+ 560 28,689 --------------- TOTAL OIL & GAS 2,285,824 --------------- See Notes to Financial Statements. 34 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ENERGY EQUIPMENT & SERVICES 3.1% Patterson-UTI Energy, Inc.+ 12,004 $ 433,104 Cooper Cameron Corp.*+ 4,760 351,907 ENSCO International, Inc.+ 7,230 336,846 Pride International, Inc.*+ 10,950 312,184 Grant Prideco, Inc.*+ 6,060 246,339 Helmerich & Payne, Inc.+ 3,333 201,280 Smith International, Inc.+ 5,310 176,876 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 2,058,536 --------------- TOTAL ENERGY 4,344,360 --------------- UTILITIES 5.9% MULTI-UTILITIES 2.9% Vectren Corp. 14,890 422,131 NSTAR+ 14,315 413,990 WPS Resources Corp.+ 7,158 413,732 Aquila, Inc.* 52,168 206,585 Wisconsin Energy Corp. 4,790 191,217 MDU Resources Group, Inc. 5,210 185,737 OGE Energy Corp.+ 2,040 57,324 --------------- TOTAL MULTI-UTILITIES 1,890,716 --------------- GAS UTILITIES 1.8% Oneok, Inc.+ 12,815 435,966 Questar Corp. 4,724 416,279 AGL Resources, Inc. 9,423 349,688 --------------- TOTAL GAS UTILITIES 1,201,933 --------------- ELECTRIC UTILITIES 1.0% Sierra Pacific Resources*+ 18,630 276,656 Black Hills Corp.+ 4,382 190,047 Pepco Holdings, Inc. 5,560 129,381 Westar Energy, Inc.+ 2,040 49,225 --------------- TOTAL ELECTRIC UTILITIES 645,309 --------------- WATER UTILITIES 0.2% Aqua America, Inc. 4,020 152,841 --------------- TOTAL WATER UTILITIES 152,841 --------------- TOTAL UTILITIES 3,890,799 --------------- MATERIALS 3.6% CHEMICALS 2.5% Lyondell Chemical Co.+ 18,280 523,174 Lubrizol Corp. 10,859 470,520 Olin Corp.+ 11,220 213,068 Airgas, Inc. 4,970 147,261 FMC Corp.* 2,550 145,911 Chemtura Corp. 9,100 113,022 Albemarle Corp. 1,097 41,357 --------------- TOTAL CHEMICALS 1,654,313 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONTAINERS & PACKAGING 0.6% Packaging Corporation of America 18,070 $ 350,739 Longview Fibre Co. 670 13,058 --------------- TOTAL CONTAINERS & PACKAGING 363,797 --------------- CONSTRUCTION MATERIALS 0.4% Martin Marietta Materials, Inc. 3,636 285,281 --------------- TOTAL CONSTRUCTION MATERIALS 285,281 --------------- METALS & MINING 0.1% Steel Dynamics, Inc.+ 1,290 43,808 --------------- TOTAL METALS & MINING 43,808 --------------- TOTAL MATERIALS 2,347,199 --------------- CONSUMER STAPLES 2.6% HOUSEHOLD PRODUCTS 0.9% Energizer Holdings, Inc.*+ 8,633 489,491 Church & Dwight Co., Inc. 2,060 76,096 --------------- TOTAL HOUSEHOLD PRODUCTS 565,587 --------------- FOOD PRODUCTS 0.7% Dean Foods Co.* 11,929 463,561 --------------- TOTAL FOOD PRODUCTS 463,561 --------------- FOOD & DRUG RETAILING 0.6% Whole Foods Market, Inc.+ 2,894 389,098 --------------- TOTAL FOOD & DRUG RETAILING 389,098 --------------- BEVERAGES 0.4% PepsiAmericas, Inc. 12,016 273,124 --------------- TOTAL BEVERAGES 273,124 --------------- TOTAL CONSUMER STAPLES 1,691,370 --------------- TELECOMMUNICATION SERVICES 0.4% DIVERSIFIED TELECOMMUNICATION SERVICES 0.3% Cincinnati Bell, Inc.*+ 44,930 198,141 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 198,141 --------------- WIRELESS TELECOMMUNICATION SERVICES 0.1% Telephone & Data Systems, Inc.+ 1,160 45,240 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 45,240 --------------- TOTAL TELECOMMUNICATION SERVICES 243,381 --------------- TOTAL COMMON STOCKS (Cost $44,836,202) 49,584,144 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 35 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- MEDIUS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 19.2% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 7,171,938 $ 7,171,938 3.24% due 10/03/05 5,462,291 5,462,291 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $12,634,229) 12,634,229 --------------- SECURITIES LENDING COLLATERAL 19.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 12,774,694 12,774,694 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $12,774,694) 12,774,694 --------------- TOTAL INVESTMENTS 114.0% (Cost $70,245,125) $ 74,993,067 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (14.0)% $ (9,234,101) =============== NET ASSETS - 100.0% $ 65,758,966 - ------------------------------------------------------------------------------ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED December 2005 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Market Value of Contracts $20,021,560) 278 $ 194,738 =============== UNITS ------ EQUITY INDEX SWAP AGREEMENT November 2005 S&P MidCap 400 Index Swap, Maturing 11/25/05** (Notional Market Value $ 28,862,249) 40,292 $ 147,540 =============== * NON-INCOME PRODUCING SECURITY. ** PRICE RETURN BASED ON S&P MIDCAP 400 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. 36 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- INVERSE MID-CAP FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 106.4% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 4,897,927 $ 4,897,927 3.24% due 10/03/05 3,730,359 3,730,359 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $8,628,286) 8,628,286 --------------- TOTAL INVESTMENTS 106.4% (Cost $8,628,286) $ 8,628,286 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (6.4)% $ (519,374) =============== NET ASSETS - 100.0% $ 8,108,912 - ------------------------------------------------------------------------------ UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT December 2005 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Market Value of Contracts $1,656,460) 23 $ (6,467) =============== UNITS ----- EQUITY INDEX SWAP AGREEMENT SOLD SHORT November 2005 S&P MidCap 400 Index Swap, Maturing 11/25/05* (Notional Market Value $6,467,777) 9,029 $ (63,589) =============== * PRICE RETURN BASED ON S&P MIDCAP 400 INDEX +/- FINANCING AT A VARIABLE RATE. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 37 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 76.7% FINANCIALS 16.1% REAL ESTATE 5.5% Kilroy Realty Corp. 8,421 $ 471,829 Corporate Office Properties Trust SBI/MD 12,000 419,400 Jones Lang LaSalle, Inc. 8,704 400,906 LaSalle Hotel Properties 11,062 381,086 Eastgroup Properties, Inc. 8,511 372,356 Entertainment Properties Trust 8,258 368,555 Sovran Self Storage, Inc. 7,503 367,272 Commercial Net Lease Realty 18,110 362,200 Equity One, Inc. 15,333 356,492 Taubman Centers, Inc. 10,982 348,129 Spirit Finance Corp. 29,872 336,060 American Home Mortgage Investment Corp. 11,085 335,876 National Health Investors, Inc. 11,022 304,317 Parkway Properties, Inc./MD 6,454 302,822 Trammell Crow Co.* 11,122 274,491 Fieldstone Investment Corp. 22,942 267,504 MFA Mortgage Investments, Inc.+ 38,682 237,121 Impac Mortgage Holdings, Inc.+ 19,232 235,784 Meristar Hospitality Corp.* 24,434 223,082 Pennsylvania Real Estate Investment Trust 5,046 212,840 Arbor Realty Trust, Inc. 6,023 169,246 Bedford Property Investors, Inc. 6,841 163,090 Capital Automotive REIT 3,712 143,692 BioMed Realty Trust, Inc. 5,534 137,243 Luminent Mortgage Capital, Inc. 17,931 135,379 Essex Property Trust, Inc.+ 1,274 114,660 Realty Income Corp. 4,247 101,546 CB Richard Ellis Group, Inc. -- Class A* 1,766 86,887 Saxon Capital, Inc. 6,911 81,895 Capstead Mortgage Corp.+ 9,084 62,770 Equity Inns, Inc. 4,287 57,875 Equity Lifestyle Properties, Inc. 1,074 48,330 Newcastle Investment Corp.+ 1,714 47,821 HomeBanc Corp./Atlanta GA 5,843 45,108 New Century Financial Corp. 938 34,021 --------------- TOTAL REAL ESTATE 8,007,685 --------------- BANKS 5.2% SVB Financial Group*+ 8,812 428,616 Provident Bankshares Corp. 11,551 401,744 Pacific Capital Bancorp 11,684 388,960 Umpqua Holding Corp.+ 15,591 379,173 Central Pacific Financial Corp. Co. 10,418 366,505 Hancock Holding Co. 10,493 358,231 Cathay General Bancorp 9,898 350,983 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MB Financial Corp. 8,754 $ 341,231 Greater Bay Bancorp 13,845 341,141 TrustCo Bank Corp./NY+ 27,090 339,438 First Republic Bank+ 9,443 332,677 First Bancorp Puerto Rico 19,626 332,072 Sterling Financial Corp./WA 14,149 319,060 FNB Corp. 18,312 316,431 First Financial Bancorp 16,553 307,886 Community Bank System, Inc. 12,299 277,957 PrivateBancorp, Inc. 7,719 264,607 Hanmi Financial Corp. 14,188 254,675 United Bankshares, Inc. 6,568 229,552 Citizens Banking Corp./MI 6,552 186,077 First Midwest Bancorp, Inc./IL+ 4,861 181,024 UCBH Holdings, Inc.+ 9,489 173,838 First Community Bancorp/CA 2,724 130,289 Nara Bancorp, Inc. 8,661 129,482 Center Financial Corp. 5,198 122,153 Oriental Financial Group 8,960 109,670 East-West Bancorp, Inc. 3,203 109,030 Prosperity Bancshares, Inc.+ 2,848 86,152 --------------- TOTAL BANKS 7,558,654 --------------- THRIFTS & MORTGAGE FINANCE 2.1% Corus Bankshares, Inc. 6,592 361,439 Commercial Capital Bancorp, Inc. 20,078 341,326 Harbor Florida Bancshares, Inc. 9,289 336,912 FirstFed Financial Corp.*+ 6,113 328,941 Provident Financial Services, Inc. 18,068 317,997 Flagstar Bancorp, Inc.+ 16,260 261,786 NetBank, Inc. 21,702 180,344 MAF Bancorp, Inc. 4,041 165,681 Dime Community Bancshares 9,949 146,449 Kearny Financial Corp.+ 10,204 127,550 Federal Agricultural Mortgage Corp. 4,063 98,893 R&G Financial Corp. -- Class B 6,695 92,056 Downey Financial Corp.+ 1,437 87,513 Franklin Bank Corp./Houston TX* 5,095 82,284 Doral Financial Corp.+ 6,266 81,897 BankAtlantic Bancorp, Inc. -- Class A 4,357 74,025 W Holding Co., Inc. 1,074 10,268 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 3,095,361 --------------- INSURANCE 1.9% ProAssurance Corp.* 9,060 422,830 LandAmerica Financial Group, Inc.+ 6,326 408,976 Covanta Holding Corp.* 25,585 343,607 Argonaut Group, Inc.* 11,332 306,077 Selective Insurance Group, Inc. 6,024 294,574 Zenith National Insurance Corp. 2,847 178,479 Safety Insurance Group, Inc. 4,892 174,106 UICI 4,776 171,936 See Notes to Financial Statements. 38 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Triad Guaranty, Inc.*+ 4,161 $ 163,194 RLI Corp. 2,561 118,472 Philadelphia Consolidated Holding Co.* 1,006 85,409 AmerUs Group Co.+ 1,010 57,944 --------------- TOTAL INSURANCE 2,725,604 --------------- CAPITAL MARKETS 0.7% Investment Technology Group, Inc.* 11,644 344,662 MCG Capital Corp. 16,298 274,947 Calamos Asset Management, Inc. -- Class A 5,029 124,116 Affiliated Managers Group*+ 1,205 87,266 GAMCO Investors, Inc. -- Class A 1,414 64,832 MarketAxess Holdings, Inc.* 3,709 50,442 LaBranche & Co., Inc.*+ 4,866 42,286 optionsXpress Holdings, Inc. 1,194 22,734 --------------- TOTAL CAPITAL MARKETS 1,011,285 --------------- CONSUMER FINANCE 0.6% CompuCredit Corp.*+ 9,685 430,208 World Acceptance Corp.* 5,089 129,311 Collegiate Funding Services LLC* 6,902 102,219 ACE Cash Express, Inc.*+ 4,378 85,415 Cash America International, Inc. 3,828 79,431 Advance America Cash Advance Centers, Inc. 5,614 74,385 Nelnet, Inc. -- Class A* 808 30,712 Asta Funding, Inc.+ 575 17,457 --------------- TOTAL CONSUMER FINANCE 949,138 --------------- DIVERSIFIED FINANCIALS 0.1% Nasdaq Stock Market, Inc.*+ 7,513 190,454 Archipelago Holdings, Inc.* 495 19,726 --------------- TOTAL DIVERSIFIED FINANCIALS 210,180 --------------- TOTAL FINANCIALS 23,557,907 --------------- INFORMATION TECHNOLOGY 13.7% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3.3% Varian Semiconductor Equipment Associates, Inc.*+ 10,842 459,376 Cymer, Inc.*+ 13,350 418,122 Micrel, Inc.*+ 29,170 327,579 Sigmatel, Inc.* 15,484 313,396 OmniVision Technologies, Inc.*+ 23,967 302,464 ON Semiconductor Corp.*+ 52,134 269,533 MKS Instruments, Inc.*+ 15,332 264,170 Microsemi Corp.*+ 9,000 229,860 Photronics, Inc.*+ 10,657 206,746 Tessera Technologies, Inc.* 6,635 198,453 ATMI, Inc.* 5,777 179,087 Silicon Image, Inc.* 20,135 179,000 Diodes, Inc.* 3,712 134,597 MIPS Technology, Inc.* 17,910 122,325 IXYS Corp.* 11,551 121,979 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ADE Corp.* 4,720 $ 106,106 Cypress Semiconductor Corp.*+ 6,851 103,108 FEI Co.* 4,786 92,130 Power Integrations, Inc.* 4,127 89,762 Silicon Laboratories, Inc.*+ 2,644 80,351 Brooks Automation, Inc.*+ 5,719 76,234 RF Micro Devices, Inc.* 13,450 75,992 Skyworks Solutions, Inc.*+ 9,162 64,317 Rambus, Inc.*+ 5,198 62,896 Silicon Storage Technology, Inc.* 10,227 55,021 Axcelis Technologies, Inc.*+ 10,513 54,878 Credence Systems Corp.*+ 6,602 52,684 Amkor Technology, Inc.*+ 10,726 46,980 PMC - Sierra, Inc.*+ 5,198 45,794 Atmel Corp.*+ 20,378 41,979 LTX Corp.* 6,023 25,417 Conexant Systems, Inc.* 12,133 21,718 Lattice Semiconductor Corp.*+ 2,481 10,619 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 4,832,673 --------------- SOFTWARE 2.7% Kronos, Inc./MA* 8,316 371,226 Transaction Systems Architects, Inc. -- Class A*+ 12,362 344,282 Internet Security Systems, Inc.* 14,151 339,765 MicroStrategy, Inc. -- Class A* 4,574 321,506 Macrovision Corp.*+ 15,429 294,694 Epicor Software Corp.* 20,127 261,651 Ansys, Inc.*+ 5,464 210,309 Parametric Technology Corp.* 24,118 168,102 Verity, Inc.* 14,317 152,047 Altiris, Inc.* 9,941 151,998 Micros Systems, Inc.*+ 3,472 151,900 Borland Software Corp.* 23,188 134,954 TIBCO Software, Inc.* 15,272 127,674 Quest Software, Inc.*+ 8,223 123,921 Quality Systems, Inc.* 1,487 102,737 Take-Two Interactive Software, Inc.*+ 4,207 92,933 SS&C Technologies Co. 2,391 87,606 Salesforce.com, Inc.* 3,748 86,654 Advent Software, Inc.*+ 3,150 84,861 THQ, Inc.* 3,541 75,494 RSA Security, Inc.* 4,786 60,830 InterVoice, Inc.* 5,687 51,240 Filenet Corp.* 1,726 48,155 Intervideo, Inc.* 4,786 48,004 Vasco Data Security International* 4,786 43,409 Mentor Graphics Corp.*+ 4,287 36,868 Progress Software Corp.* 988 31,389 Serena Software, Inc.* 655 13,054 --------------- TOTAL SOFTWARE 4,017,263 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 39 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ELECTRONIC EQUIPMENT & INSTRUMENTS 2.0% Anixter International, Inc.*+ 10,178 $ 410,479 Electro Scientific Industries, Inc.* 13,481 301,435 Coherent, Inc.* 10,227 299,446 Paxar Corp.* 15,236 256,727 Agilsys, Inc. 13,471 226,852 CTS Corp. 17,208 208,217 Littelfuse, Inc.* 5,594 157,359 Rofin-Sinar Technologies, Inc.* 4,127 156,785 TTM Technologies, Inc.* 19,322 138,152 Benchmark Electronics, Inc.*+ 4,127 124,305 Global Imaging Systems, Inc.* 3,379 115,055 MTS Systems Corp. 2,724 102,885 Metrologic Instruments, Inc.* 5,046 91,787 International DisplayWorks, Inc.*+ 12,133 72,070 Itron, Inc.* 1,317 60,134 Trimble Navigation Ltd.* 1,726 58,149 Lexar Media, Inc.* 5,937 37,997 Fargo Electronics, Inc.* 1,074 18,763 Scansource, Inc.* 249 12,136 Taser International, Inc.* 1,064 6,565 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 2,855,298 --------------- COMMUNICATIONS EQUIPMENT 1.8% CommScope, Inc.*+ 18,612 322,732 Netgear, Inc.* 10,447 251,355 Sycamore Networks, Inc.* 64,843 244,458 Extreme Networks, Inc.*+ 52,343 232,926 Comtech Telecommunications Corp.*+ 5,444 225,763 Black Box Corp.+ 4,058 170,274 Symmetricom, Inc.* 21,728 168,175 Tekelec* 7,523 157,607 Harmonic, Inc.* 26,900 156,558 ADTRAN, Inc. 4,949 155,894 3Com Corp.*+ 32,102 130,976 Ixia*+ 7,759 114,135 Utstarcom, Inc.*+ 10,074 82,305 Avocent Corp.*+ 2,062 65,242 Westell Technologies, Inc. -- Class A* 12,788 46,548 Arris Group, Inc.* 3,798 45,044 F5 Networks, Inc.*+ 775 33,689 Ditech Communications Corp.* 1,902 12,819 EndWave Corp.*+ 908 11,713 --------------- TOTAL COMMUNICATIONS EQUIPMENT 2,628,213 --------------- INTERNET SOFTWARE & SERVICES 1.6% EarthLink, Inc.* 43,044 460,571 United Online, Inc. 25,767 356,873 InfoSpace, Inc.* 11,391 271,903 Websense, Inc.* 5,198 266,189 Equinix, Inc.* 6,024 250,900 j2 Global Communications, Inc.*+ 5,198 210,103 Digital River, Inc.*+ 5,348 186,378 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Jupitermedia Corp.*+ 8,440 $ 149,472 Bankrate, Inc.*+ 4,367 119,787 Travelzoo, Inc.* 1,074 23,832 Online Resources Corp.* 908 9,607 Click Commerce, Inc.* 499 9,147 --------------- TOTAL INTERNET SOFTWARE & SERVICES 2,314,762 --------------- COMPUTERS & PERIPHERALS 1.2% Intergraph Corp.* 10,513 470,036 Brocade Communications Systems, Inc.* 60,913 248,525 Hutchinson Technology, Inc.*+ 8,172 213,453 Komag, Inc.*+ 6,403 204,640 Emulex Corp.*+ 9,297 187,892 McData Corp. -- Class A* 34,404 180,277 Palm, Inc.*+ 5,248 148,676 Gateway, Inc.* 26,534 71,642 Synaptics, Inc.*+ 3,349 62,961 Adaptec, Inc.* 4,041 15,477 --------------- TOTAL COMPUTERS & PERIPHERALS 1,803,579 --------------- IT CONSULTING & SERVICES 1.1% CSG Systems International, Inc.* 19,182 416,441 MAXIMUS, Inc. 9,000 321,750 Perot Systems Corp. -- Class A* 11,524 163,065 Talx Corp. 3,552 116,470 Mantech International Corp. -- Class A* 3,712 98,034 BISYS Group, Inc.* 7,214 96,884 Sapient Corp.*+ 12,901 80,631 Infocrossing, Inc.*+ 8,761 80,513 Acxiom Corp.+ 3,961 74,150 CACI International, Inc. -- Class A*+ 1,028 62,297 iPayment Holdings, Inc.* 1,147 43,402 infoUSA, Inc. -- Class B* 3,053 32,423 RightNow Technologies, Inc.* 1,237 18,209 Kanbay International, Inc.* 409 7,689 --------------- TOTAL IT CONSULTING & SERVICES 1,611,958 --------------- TOTAL INFORMATION TECHNOLOGY 20,063,746 --------------- CONSUMER DISCRETIONARY 11.7% SPECIALTY RETAIL 3.1% Charming Shoppes, Inc.*+ 40,026 427,078 Genesco, Inc.* 9,459 352,253 Aaron Rents, Inc. 14,717 311,265 United Auto Group, Inc. 9,277 306,512 Sonic Automotive, Inc. 13,406 297,881 Group 1 Automotive, Inc.* 9,794 270,314 Guitar Center, Inc.*+ 4,892 270,087 Pantry, Inc.* 6,767 252,883 Stein Mart, Inc. 11,946 242,504 Too, Inc.*+ 7,470 204,902 CSK Auto Corp.* 12,961 192,860 Cato Corp. -- Class A 9,316 185,668 See Notes to Financial Statements. 40 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Guess ?, Inc.* 7,574 $ 162,311 HOT Topic, Inc.* 10,317 158,469 Buckle, Inc. 3,632 123,379 Children's Place Retail Stores, Inc.* 3,379 120,428 Finish Line, Inc. -- Class A 7,307 106,609 Build-A-Bear Workshop, Inc.*+ 4,210 93,883 Electronics Boutique Holdings Corp.* 1,487 93,443 Hibbett Sporting Goods, Inc.* 3,791 84,339 Cache, Inc.* 4,554 69,357 Payless Shoesource, Inc.*+ 3,341 58,133 Movie Gallery, Inc.+ 5,448 56,605 Select Comfort Corp.*+ 2,481 49,570 GameStop Corp. -- Class B* 738 20,952 Burlington Coat Factory Warehouse Corp. 326 12,401 Regis Corp. 249 9,417 --------------- TOTAL SPECIALTY RETAIL 4,533,503 --------------- HOTELS, RESTAURANTS & LEISURE 2.4% Shuffle Master, Inc.*+ 12,871 340,181 CEC Entertainment, Inc.* 9,948 315,948 Six Flags, Inc.*+ 43,756 314,606 CKE Restaurants, Inc.+ 21,475 283,040 Papa John's International, Inc.* 5,029 252,053 Jack in the Box, Inc.*+ 7,673 229,499 Landry's Restaurants, Inc.+ 7,643 223,940 Steak n Shake Co.* 11,797 214,116 Vail Resorts, Inc.* 6,911 198,691 P.F. Chang's China Bistro, Inc.*+ 4,211 188,779 Ameristar Casinos, Inc. 7,849 163,573 Argosy Gaming Co.* 2,724 128,001 Sunterra Corp.*+ 9,128 119,851 Bluegreen Corp.* 6,449 113,825 IHOP Corp. 2,644 107,717 Sonic Corp.* 2,960 80,956 Krispy Kreme Doughnuts, Inc.*+ 12,640 79,126 Domino's Pizza, Inc. 1,726 40,250 Multimedia Games, Inc.*+ 4,121 40,015 Monarch Casino & Resort, Inc.* 1,726 29,325 Gaylord Entertainment Co.*+ 575 27,399 Red Robin Gourmet Burgers, Inc.*+ 575 26,358 Penn National Gaming, Inc.* 419 13,035 Boyd Gaming Corp. 256 11,039 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 3,541,323 --------------- MEDIA 1.8% Journal Register Co. 19,212 310,850 Emmis Communications Corp. -- Class A* 13,514 298,524 Cumulus Media, Inc. -- Class A* 22,626 282,599 Citadel Broadcasting Corp.* 20,554 282,206 Reader's Digest Association, Inc. 16,321 260,646 RCN Corp.*+ 10,726 227,606 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Entravision Communications Corp. -- Class A* 23,233 $ 182,844 Lin TV Corp. -- Class A* 12,728 177,556 Playboy Enterprises, Inc. -- Class B*+ 9,443 133,146 RH Donnelley Corp.*+ 1,746 110,452 Sinclair Broadcast Group, Inc. -- Class A 11,884 105,411 ProQuest Co.* 2,644 95,713 Cox Radio Inc. -- Class A*+ 4,540 69,008 Insight Communications Co., Inc.* 4,277 49,742 Primedia, Inc.* 10,852 44,385 Gemstar-TV Guide International, Inc.* 9,988 29,564 Catalina Marketing Corp. 908 20,648 --------------- TOTAL MEDIA 2,680,900 --------------- HOUSEHOLD DURABLES 1.5% Champion Enterprises, Inc.* 34,412 508,610 Brookfield Homes Corp. 6,825 378,992 Yankee Candle Co., Inc. 12,708 311,346 WCI Communities, Inc.*+ 10,603 300,807 Levitt Corp. -- Class A 7,645 175,376 Interface, Inc. -- Class A* 20,704 171,015 Maytag Corp. 6,436 117,521 Blount International, Inc.* 4,792 84,531 Technical Olympic USA, Inc. 1,603 41,935 Beazer Homes USA, Inc.+ 599 35,143 William Lyon Homes, Inc.*+ 206 31,971 Meritage Homes Corp.* 130 9,966 --------------- TOTAL HOUSEHOLD DURABLES 2,167,213 --------------- TEXTILES & APPAREL 0.6% K-Swiss, Inc. -- Class A 8,577 253,622 Phillips-Van Heusen Corp. 8,002 248,222 Oxford Industries, Inc.+ 2,571 116,003 Quiksilver, Inc.*+ 6,881 99,430 Wolverine World Wide, Inc. 3,961 83,379 Deckers Outdoor Corp.*+ 1,676 40,325 Charles & Colvard Ltd. 409 10,209 Carter's, Inc.* 166 9,429 --------------- TOTAL TEXTILES & APPAREL 860,619 --------------- INTERNET & CATALOG RETAIL 0.5% Coldwater Creek, Inc.*+ 9,489 239,313 Nutri/System, Inc.*+ 6,023 150,695 Stamps.com, Inc.* 7,581 130,469 1-800-FLOWERS.com, Inc.* 10,738 75,273 Audible, Inc.*+ 5,278 64,867 Priceline.com, Inc.* 2,763 53,381 --------------- TOTAL INTERNET & CATALOG RETAIL 713,998 --------------- COMMERCIAL SERVICES & SUPPLIES 0.4% Sotheby's Holdings, Inc. -- Class A* 17,174 287,149 Jackson Hewitt Tax Service, Inc. 6,102 145,899 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 41 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Corinthian Colleges, Inc.* 8,910 $ 118,236 DeVry, Inc.*+ 5,857 111,576 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 662,860 --------------- AUTO COMPONENTS 0.3% Visteon Corp. 12,542 122,661 ArvinMeritor, Inc. 6,186 103,430 Goodyear Tire & Rubber Co.*+ 6,316 98,466 Exide Technologies*+ 9,689 49,220 LKQ Corp.* 1,317 39,773 --------------- TOTAL AUTO COMPONENTS 413,550 --------------- LEISURE EQUIPMENT & PRODUCTS 0.3% Jakks Pacific, Inc.*+ 11,800 191,514 SCP Pool Corp. 3,090 107,934 Callaway Golf Co.+ 5,358 80,852 Nautilus, Inc.+ 828 18,274 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 398,574 --------------- AUTOMOBILES 0.3% Winnebago Industries, Inc.+ 11,298 327,303 Thor Industries, Inc.+ 1,859 63,206 --------------- TOTAL AUTOMOBILES 390,509 --------------- DISTRIBUTORS 0.2% Building Material Holding Corp. 3,269 304,638 --------------- TOTAL DISTRIBUTORS 304,638 --------------- HEALTH CARE PROVIDERS & SERVICES 0.2% Alderwoods Group, Inc.* 18,492 302,899 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 302,899 --------------- MULTILINE RETAIL 0.1% ShopKo Stores, Inc.* 2,784 71,048 Big Lots, Inc.* 3,878 42,619 99 Cents Only Stores* 3,961 36,639 --------------- TOTAL MULTILINE RETAIL 150,306 --------------- TOTAL CONSUMER DISCRETIONARY 17,120,892 --------------- INDUSTRIALS 11.5% COMMERCIAL SERVICES & SUPPLIES 2.6% Resources Connection, Inc.* 16,483 488,391 Brady Corp. -- Class A+ 11,777 364,380 Imagistics International, Inc.* 7,643 319,860 NCO Group, Inc.*+ 12,971 267,981 Kelly Services, Inc. 8,409 257,820 FTI Consulting, Inc.* 9,738 245,982 Korn/Ferry International, Inc.* 13,716 224,805 Navigant Consulting, Inc.* 10,147 194,416 Teletech Holdings, Inc.* 16,709 167,424 Heidrick & Struggles International, Inc.* 5,145 166,595 Labor Ready, Inc.*+ 5,687 145,872 Portfolio Recovery Associates, Inc.*+ 3,299 142,451 Mine Safety Appliances Co. 3,538 136,921 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ John H. Harland Co. 2,973 $ 132,001 DiamondCluster International, Inc. -- Class A* 13,949 105,733 Rollins, Inc. 4,545 88,718 Healthcare Services Group 3,961 76,249 Duratek, Inc.* 3,492 63,834 Clean Harbors, Inc.* 1,726 58,598 Mobile Mini, Inc.*+ 1,279 55,445 CRA International, Inc.* 1,008 42,024 Waste Connections, Inc.*+ 828 29,046 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 3,774,546 --------------- MACHINERY 2.2% Kennametal, Inc.+ 9,033 442,978 Gardner Denver, Inc.* 7,490 334,054 JLG Industries, Inc. 8,747 320,053 Watts Industries, Inc. -- Class A 10,306 297,328 Wabash National Corp.+ 13,922 273,707 Mueller Industries, Inc. 9,453 262,510 Barnes Group, Inc. 7,128 255,610 Actuant Corp. -- Class A 4,460 208,728 Terex Corp.* 2,684 132,670 Middleby Corp.* 1,714 124,265 Toro Co. 2,800 102,928 EnPro Industries, Inc.* 2,612 87,998 Tecumseh Products Co. -- Class A 3,930 84,574 Titan International, Inc. 6,113 83,931 Wabtec Corp. 2,644 72,128 ESCO Technologies, Inc.*+ 1,356 67,895 Dynamic Materials Corp. 1,074 47,149 Joy Global, Inc. 685 34,565 Bucyrus International, Inc. -- Class A 326 16,016 Sun Hydraulics Corp. 499 12,126 --------------- TOTAL MACHINERY 3,261,213 --------------- AEROSPACE & DEFENSE 1.5% Armor Holdings, Inc.*+ 10,147 436,422 Triumph Group, Inc.* 7,420 275,801 DRS Technologies, Inc. 5,275 260,374 Aviall, Inc.* 7,164 242,000 Moog, Inc. -- Class A*+ 7,284 215,024 United Industrial Corp./NY 4,540 162,305 Cubic Corp.+ 7,274 124,531 Innovative Solutions & Support, Inc.*+ 6,188 96,100 Esterline Technologies Corp.*+ 2,177 82,486 EDO Corp. 2,541 76,306 BE Aerospace, Inc.* 4,340 71,914 Teledyne Technologies, Inc.* 1,902 65,562 Ionatron, Inc.*+ 6,186 62,355 --------------- TOTAL AEROSPACE & DEFENSE 2,171,180 --------------- See Notes to Financial Statements. 42 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BUILDING PRODUCTS 1.1% York International Corp. 9,239 $ 518,031 Lennox International, Inc. 17,501 479,702 NCI Building Systems, Inc.*+ 9,738 397,213 ElkCorp 7,264 259,833 --------------- TOTAL BUILDING PRODUCTS 1,654,779 --------------- ELECTRICAL EQUIPMENT 1.1% Genlyte Group, Inc.*+ 7,839 376,899 Woodward Governor Co. 4,091 347,940 A.O. Smith Corp. 7,839 223,411 Artesyn Technologies, Inc.*+ 16,665 154,985 General Cable Corp.* 8,503 142,850 II-Vi, Inc.* 7,350 130,389 Thomas & Betts Corp.* 3,738 128,625 Energy Conversion Devices, Inc.*+ 1,387 62,249 GrafTech International Ltd.* 7,759 42,131 --------------- TOTAL ELECTRICAL EQUIPMENT 1,609,479 --------------- CONSTRUCTION & ENGINEERING 0.7% Washington Group International, Inc.*+ 7,689 414,360 Shaw Group, Inc.*+ 13,869 342,009 EMCOR Group, Inc.*+ 3,812 226,052 URS Corp.* 1,653 66,765 --------------- TOTAL CONSTRUCTION & ENGINEERING 1,049,186 --------------- ROAD & RAIL 0.7% Arkansas Best Corp.+ 9,609 335,066 Old Dominion Freight Line, Inc.* 6,905 231,248 Kansas City Southern* 7,613 177,459 Amerco, Inc.* 3,025 176,025 Swift Transportation Co., Inc.*+ 4,357 77,119 Laidlaw International, Inc. 1,523 36,811 --------------- TOTAL ROAD & RAIL 1,033,728 --------------- TRADING COMPANIES & DISTRIBUTORS 0.7% Applied Industrial Technologies, Inc. 8,182 293,570 Watsco, Inc.+ 5,471 290,565 GATX Corp.+ 7,328 289,822 WESCO International, Inc.*+ 4,210 142,593 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 1,016,550 --------------- AIRLINES 0.3% Alaska Air Group, Inc.*+ 6,602 191,854 Mesa Air Group, Inc.*+ 14,085 116,201 AirTran Holdings, Inc.*+ 7,101 89,899 Northwest Airlines Corp.*+ 4,287 2,851 --------------- TOTAL AIRLINES 400,805 --------------- AIR FREIGHT & COURIERS 0.2% Pacer International, Inc. 9,014 237,609 HUB Group, Inc. -- Class A* 3,472 127,457 --------------- TOTAL AIR FREIGHT & COURIERS 365,066 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INDUSTRIAL CONGLOMERATES 0.2% Walter Industries, Inc. 4,410 $ 215,737 Tredegar Corp. 8,545 111,171 --------------- TOTAL INDUSTRIAL CONGLOMERATES 326,908 --------------- MARINE 0.2% Kirby Corp.* 5,457 269,740 --------------- TOTAL MARINE 269,740 --------------- TOTAL INDUSTRIALS 16,933,180 --------------- HEALTH CARE 9.7% HEALTH CARE EQUIPMENT & SUPPLIES 3.6% Sybron Dental Specialties, Inc.* 11,135 462,993 Intuitive Surgical, Inc.*+ 6,063 444,357 Advanced Neuromodulation Systems, Inc.*+ 8,747 415,133 Steris Corp. 16,889 401,789 Haemonetics Corp./MA* 7,755 368,595 Hologic, Inc.* 5,977 345,172 West Pharmaceutical Services, Inc. 11,082 328,803 Intermagnetics General Corp.* 11,484 320,863 Conmed Corp.* 11,021 307,265 Mentor Corp.+ 5,115 281,376 Varian, Inc.*+ 6,471 222,085 Immucor, Inc.*+ 7,237 198,583 Palomar Medical Technologies, Inc.*+ 6,225 163,282 Ventana Medical Systems, Inc.* 3,798 144,590 Molecular Devices Corp.* 6,422 134,156 Thoratec Corp.* 7,432 131,992 Biosite, Inc.* 1,816 112,338 Cantel Medical Corp.*+ 5,278 111,049 Laserscope*+ 3,499 98,602 SonoSite, Inc.* 3,279 97,321 Align Technology, Inc.*+ 14,232 95,639 Aspect Medical Systems, Inc.* 2,481 73,512 DJ Orthopedics, Inc.*+ 1,397 40,429 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 5,299,924 --------------- BIOTECHNOLOGY 2.9% United Therapeutics Corp.*+ 7,340 512,332 Cubist Pharmaceuticals, Inc.*+ 17,727 381,840 Serologicals Corp.*+ 16,056 362,223 Myriad Genetics, Inc.* 13,420 293,361 Vertex Pharmaceuticals, Inc.*+ 12,728 284,471 Exelixis, Inc.* 32,266 247,480 Medarex, Inc.*+ 25,349 241,322 Rigel Pharmaceuticals, Inc.* 8,002 190,208 Keryx Biopharmaceuticals, Inc.*+ 11,135 175,488 Enzo Biochem, Inc.* 10,816 166,134 Pharmion Corp.*+ 7,078 154,371 Geron Corp.* 14,902 153,044 Zymogenetics, Inc.* 9,266 152,889 Enzon Pharmaceuticals, Inc.* 20,564 136,339 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 43 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Senomyx, Inc.* 6,765 $ 115,208 Ligand Pharmaceuticals, Inc. -- Class B* 8,827 89,475 Renovis, Inc.* 6,602 89,325 Eyetech Pharmaceuticals, Inc.*+ 4,866 87,393 Neurocrine Biosciences, Inc.* 1,653 81,311 Genitope Corp.*+ 11,135 77,277 Albany Molecular Research, Inc.* 5,198 63,312 Northfield Laboratories, Inc.*+ 4,127 53,238 Martek Biosciences Corp.*+ 1,487 52,238 Progenics Pharmaceuticals, Inc.* 1,836 43,532 Digene Corp.* 1,487 42,380 Onyx Pharmaceuticals, Inc.* 828 20,683 Alkermes, Inc.*+ 1,074 18,043 --------------- TOTAL BIOTECHNOLOGY 4,284,917 --------------- HEALTH CARE PROVIDERS & SERVICES 2.3% Chemed Corp. 8,930 387,026 Magellan Health Services, Inc.* 10,094 354,804 Kindred Healthcare, Inc.* 9,445 281,461 Ventiv Health, Inc.* 9,596 251,511 Apria Healthcare Group, Inc.* 7,458 237,985 Genesis HealthCare Corp.* 5,354 215,873 Per-Se Technologies, Inc.*+ 10,124 209,162 Pediatrix Medical Group, Inc.*+ 2,636 202,497 WellCare Health Plans, Inc.* 4,638 171,838 American Retirement Corp.* 6,602 124,316 Owens & Minor, Inc. 3,961 116,255 The Trizetto Group, Inc.* 8,002 112,988 Centene Corp.* 4,343 108,705 American Healthways, Inc.* 1,905 80,772 Hanger Orthopedic Group, Inc.* 10,394 80,034 Sierra Health Services, Inc.* 1,124 77,410 Parexel International Corp.* 3,712 74,574 Odyssey HealthCare, Inc.* 4,247 72,072 Beverly Enterprises, Inc.*+ 3,299 40,413 AMN Healthcare Services, Inc.* 2,225 34,421 Allscripts Healthcare Solutions, Inc.*+ 1,653 29,787 Computer Programs & Systems, Inc. 828 28,599 LCA-Vision, Inc. 166 6,162 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 3,298,665 --------------- PHARMACEUTICALS 0.9% Connetics Corp.*+ 16,312 275,836 Par Pharmaceutical Cos., Inc.* 9,941 264,630 KV Pharmaceutical Co.* 14,151 251,463 Andrx Corp.* 14,767 227,855 First Horizon Pharmaceutical Corp.*+ 7,297 144,991 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MGI Pharma, Inc.* 3,552 $ 82,797 Hi-Tech Pharmacal Co., Inc.* 2,391 71,921 CNS, Inc. 2,724 71,015 --------------- TOTAL PHARMACEUTICALS 1,390,508 --------------- TOTAL HEALTH CARE 14,274,014 --------------- ENERGY 5.0% OIL & GAS 2.6% Cimarex Energy Co.*+ 10,863 492,420 Frontier Oil Corp. 7,673 340,298 Cheniere Energy, Inc.*+ 6,532 270,163 Berry Petroleum Co. -- Class A 3,253 216,943 Petroleum Development Corp.* 5,438 208,493 Swift Energy Co.*+ 4,492 205,509 St. Mary Land & Exploration Co. 5,278 193,175 Whiting Petroleum Corp.* 4,357 191,011 Harvest Natural Resources, Inc.* 17,337 186,026 Holly Corp. 2,654 169,803 USEC, Inc. 13,037 145,493 TransMontaigne, Inc.* 17,172 137,204 KFX, Inc.*+ 7,653 131,019 Forest Oil Corp.* 2,501 130,302 Meridian Resource Corp.* 29,372 122,481 Atlas America, Inc.* 2,353 114,944 Comstock Resources, Inc.* 3,472 113,916 ATP Oil & Gas Corp.*+ 3,223 105,843 Energy Partners Ltd.* 2,622 81,859 Denbury Resources, Inc.* 1,512 76,265 Resource America, Inc. -- Class A 3,963 70,264 Tesoro Corp. 878 59,037 Vintage Petroleum, Inc. 1,094 49,952 --------------- TOTAL OIL & GAS 3,812,420 --------------- ENERGY EQUIPMENT & SERVICES 2.4% Cal Dive International, Inc.*+ 7,520 476,843 Global Industries, Ltd.*+ 25,708 378,936 Grey Wolf, Inc.* 43,332 365,289 Lone Star Technologies, Inc.*+ 6,386 354,998 Atwood Oceanics, Inc.*+ 3,840 323,366 NS Group, Inc.* 7,494 294,139 Veritas DGC, Inc.*+ 7,430 272,087 Todco -- Class A* 5,471 228,195 Hydril*+ 2,818 193,428 Superior Energy Services* 6,266 144,682 Offshore Logistics, Inc.* 3,747 138,639 Pioneer Drilling Co.* 5,777 112,767 Maverick Tube Corp.*+ 3,549 106,470 Unit Corp.* 1,271 70,261 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 3,460,100 --------------- TOTAL ENERGY 7,272,520 --------------- See Notes to Financial Statements. 44 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MATERIALS 3.5% METALS & MINING 1.7% Reliance Steel & Aluminum Co. 9,784 $ 517,867 Quanex Corp. 5,029 333,020 AK Steel Holding Corp.* 37,823 324,143 Commercial Metals Co.+ 9,265 312,601 Cleveland-Cliffs, Inc.+ 2,870 250,006 Carpenter Technology Corp. 3,516 206,073 Century Aluminum Co.*+ 5,194 116,761 Oregon Steel Mills, Inc.* 3,802 106,076 Aleris International, Inc.* 3,798 104,255 Allegheny Technologies, Inc.+ 2,365 73,268 Wheeling-Pittsburgh Corp.* 4,051 67,773 Hecla Mining Co.*+ 12,195 53,414 Coeur d'Alene Mines Corp.* 2,973 12,576 --------------- TOTAL METALS & MINING 2,477,833 --------------- CHEMICALS 0.7% Georgia Gulf Corp. 6,113 147,201 Westlake Chemical Corp.+ 4,845 131,203 Airgas, Inc. 4,337 128,505 Cytec Industries, Inc. 2,654 115,131 W.R. Grace & Co.*+ 12,638 113,110 FMC Corp.* 1,926 110,206 Ferro Corp. 4,866 89,145 Minerals Technologies, Inc.+ 1,096 62,702 Olin Corp.+ 1,726 32,777 Spartech Corp. 1,573 30,736 Wellman, Inc. 4,786 30,295 Terra Industries, Inc.* 2,644 17,583 --------------- TOTAL CHEMICALS 1,008,594 --------------- CONTAINERS & PACKAGING 0.5% Silgan Holdings, Inc. 10,040 333,930 Crown Holdings, Inc.* 7,543 120,235 Greif, Inc. -- Class A 1,902 114,310 AptarGroup, Inc. 2,102 104,701 --------------- TOTAL CONTAINERS & PACKAGING 673,176 --------------- PAPER & FOREST PRODUCTS 0.3% Potlatch Corp.+ 7,829 408,048 Bowater, Inc.+ 3,712 104,938 --------------- TOTAL PAPER & FOREST PRODUCTS 512,986 --------------- CONSTRUCTION MATERIALS 0.3% Eagle Materials, Inc.+ 3,798 460,963 --------------- TOTAL CONSTRUCTION MATERIALS 460,963 --------------- TOTAL MATERIALS 5,133,552 --------------- UTILITIES 2.4% GAS UTILITIES 0.9% Southwest Gas Corp. 13,983 382,994 Northwest Natural Gas Co. 9,738 362,448 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Laclede Group, Inc. 9,778 $ 317,687 South Jersey Industries, Inc. 3,858 112,422 Atmos Energy Corp. 3,798 107,294 Southern Union Co.* 2,086 53,749 Energen Corp. 296 12,805 --------------- TOTAL GAS UTILITIES 1,349,399 --------------- ELECTRIC UTILITIES 0.9% Cleco Corp. 16,611 391,687 IDACORP, Inc.+ 12,960 390,485 Sierra Pacific Resources*+ 15,136 224,770 Otter Tail Power Co. 4,608 142,571 Duquesne Light Holdings, Inc.+ 2,874 49,462 El Paso Electric Co.* 1,726 35,987 --------------- TOTAL ELECTRIC UTILITIES 1,234,962 --------------- MULTI-UTILITIES 0.4% NorthWestern Corp. 12,788 386,070 Calpine Corp.*+ 46,132 119,482 PNM Resources, Inc.+ 2,884 82,684 CMS Energy Corp.*+ 2,451 40,319 --------------- TOTAL MULTI-UTILITIES 628,555 --------------- WATER UTILITIES 0.2% American States Water Co. 7,921 265,036 --------------- TOTAL WATER UTILITIES 265,036 --------------- TOTAL UTILITIES 3,477,952 --------------- CONSUMER STAPLES 1.9% FOOD PRODUCTS 0.9% Chiquita Brands International, Inc.+ 13,808 385,934 Ralcorp Holdings, Inc. 5,893 247,034 Gold Kist, Inc.* 10,227 199,938 Delta & Pine Land Co. 6,522 172,246 Seaboard Corp. 78 107,094 Lance, Inc. 5,178 90,408 Hain Celestial Group, Inc.*+ 4,367 84,720 --------------- TOTAL FOOD PRODUCTS 1,287,374 --------------- FOOD & DRUG RETAILING 0.5% Longs Drug Stores Corp. 6,745 289,293 Nash Finch Co.+ 2,973 125,431 United Natural Foods, Inc.*+ 2,724 96,321 Smart & Final, Inc.* 6,034 78,080 Great Atlantic & Pacific Tea Co.* 2,391 67,809 Spartan Stores, Inc.* 5,448 56,114 --------------- TOTAL FOOD & DRUG RETAILING 713,048 --------------- PERSONAL PRODUCTS 0.3% Playtex Products, Inc.* 16,830 185,130 Nu Skin Enterprises, Inc. 9,567 182,251 Chattem, Inc.* 3,552 126,096 --------------- TOTAL PERSONAL PRODUCTS 493,477 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 45 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- MEKROS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ HOUSEHOLD PRODUCTS 0.1% Central Garden and Pet Co.* 5,205 $ 235,526 --------------- TOTAL HOUSEHOLD PRODUCTS 235,526 --------------- BEVERAGES 0.1% Hansen Natural Corp.*+ 2,594 122,126 --------------- TOTAL BEVERAGES 122,126 --------------- TOTAL CONSUMER STAPLES 2,851,551 --------------- TELECOMMUNICATION SERVICES 1.2% WIRELESS TELECOMMUNICATION SERVICES 0.6% USA Mobility, Inc.* 9,030 243,629 UbiquiTel, Inc.* 24,615 215,135 Dobson Communications Corp. -- Class A*+ 27,628 212,183 SBA Communications Corp.* 8,910 137,660 Alamosa Holdings, Inc.*+ 7,819 133,783 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 942,390 --------------- DIVERSIFIED TELECOMMUNICATION SERVICES 0.6% Commonwealth Telephone Enterprises, Inc. 8,501 320,488 Iowa Telecommunications Services, Inc. 10,563 177,670 Golden Telecom, Inc.+ 5,095 160,849 Premiere Global Services, Inc.* 18,562 151,837 Level 3 Communications, Inc.*+ 21,372 49,583 Broadwing Corp.*+ 6,023 30,055 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 890,482 --------------- TOTAL TELECOMMUNICATION SERVICES 1,832,872 --------------- TOTAL COMMON STOCKS (Cost $98,644,218) 112,518,186 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 17.2% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $14,325,390 $ 14,325,390 3.24% due 10/03/05 10,910,504 10,910,504 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $25,235,894) 25,235,894 --------------- SECURITIES LENDING COLLATERAL 11.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 16,702,851 16,702,851 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $16,702,851) 16,702,851 --------------- TOTAL INVESTMENTS 105.3% (Cost $140,582,963) $ 154,456,931 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (5.3)% $ (7,827,482) =============== NET ASSETS - 100.0% $ 146,629,449 - ------------------------------------------------------------------------------ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED December 2005 Russell 2000 Index Mini Futures Contracts (Aggregate Market Value of Contracts $49,371,630) 737 $ 286,746 =============== UNITS ------ EQUITY INDEX SWAP AGREEMENT November 2005 Russell 2000 Index Swap, Maturing 11/25/05** (Notional Market Value $57,770,919) 86,509 $ 916,494 =============== * NON-INCOME PRODUCING SECURITY. ** PRICE RETURN BASED ON RUSSELL 2000 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. REIT--REAL ESTATE INVESTMENT TRUST. See Notes to Financial Statements. 46 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- INVERSE SMALL-CAP FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 104.7% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $29,041,813 $ 29,041,813 3.24% due 10/03/05 22,118,828 22,118,828 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $51,160,641) 51,160,641 --------------- TOTAL INVESTMENTS 104.7% (Cost $51,160,641) $ 51,160,641 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (4.7)% $ (2,296,680) =============== NET ASSETS - 100.0% $ 48,863,961 - ------------------------------------------------------------------------------ UNREALIZED GAIN (LOSS) CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT December 2005 Russell 2000 Index Mini Futures Contracts (Aggregate Market Value of Contracts $1,004,850) 15 $ 9,865 =============== UNITS ------ EQUITY INDEX SWAP AGREEMENT SOLD SHORT November 2005 Russell 2000 Index Swap, Maturing 11/25/05* (Notional Market Value $47,895,844) 71,722 $ (590,382) =============== * PRICE RETURN BASED ON RUSSELL 2000 INDEX +/- FINANCING AT A VARIABLE RATE. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 47 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ U.S. TREASURY OBLIGATIONS 94.6% U.S. Treasury Bond 5.38% due 02/15/31 $ 64,806,000 $ 72,633,350 --------------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $66,146,879) 72,633,350 --------------- REPURCHASE AGREEMENTS 5.9% Repurchase Agreement (Note 6) 3.25% due 10/03/05 2,564,638 2,564,638 3.24% due 10/03/05 1,953,280 1,953,280 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $4,517,918) 4,517,918 --------------- TOTAL INVESTMENTS 100.5% (Cost $70,664,797) $ 77,151,268 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (0.5)% $ (404,025) =============== NET ASSETS - 100.0% $ 76,747,243 - ------------------------------------------------------------------------------ UNREALIZED LOSS CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED December 2005 U.S. Treasury Bond Futures Contracts (Aggregate Market Value of Contracts $27,922,750) 244 $ (318,864) =============== See Notes to Financial Statements. 48 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- JUNO MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 64.0% Fannie Mae* 3.45% due 10/19/05 $50,000,000 $ 49,923,333 Farmer Mac* 3.35% due 10/06/05 50,000,000 49,986,042 3.51% due 10/28/05 50,000,000 49,878,125 3.64% due 11/28/05 25,000,000 24,858,444 3.76% due 12/30/05 25,000,000 24,770,222 Federal Farm Credit Bank* 3.72% due 12/06/05 25,000,000 24,834,667 Federal Home Loan Bank* 3.58% due 10/12/05 50,000,000 49,955,250 3.46% due 10/21/05 50,000,000 49,913,500 3.48% due 10/26/05 50,000,000 49,888,833 3.50% due 10/26/05 50,000,000 49,888,195 3.58% due 11/17/05 50,000,000 49,776,250 3.59% due 11/18/05 50,000,000 49,770,639 3.73% due 12/23/05 50,000,000 49,580,375 3.76% due 01/18/06 50,000,000 49,441,222 3.72% due 11/25/05 40,000,000 39,780,933 3.50% due 10/12/05 25,000,000 24,978,125 3.58% due 11/14/05 25,000,000 24,895,583 3.67% due 11/25/05 25,000,000 24,864,924 3.79% due 12/23/05 25,000,000 24,786,813 Freddie Mac* 3.42% due 10/11/05 50,000,000 49,962,000 3.64% due 10/18/05 50,000,000 49,924,167 3.42% due 11/01/05 50,000,000 49,862,250 3.49% due 11/02/05 50,000,000 49,854,583 3.51% due 11/15/05 50,000,000 49,790,375 3.59% due 11/15/05 50,000,000 49,785,597 3.62% due 11/22/05 50,000,000 49,748,611 3.75% due 12/20/05 50,000,000 49,593,750 3.63% due 12/30/05 50,000,000 49,556,333 3.42% due 10/03/05 25,000,000 25,000,000 3.52% due 11/01/05 25,000,000 24,929,111 3.53% due 11/01/05 25,000,000 24,928,910 3.42% due 11/28/05 25,000,000 24,867,000 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $1,309,574,162) 1,309,574,162 --------------- MARKET VALUE CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ OPTIONS PURCHASED 0.0% Call Options on: December 2005 U.S. Treasury Bond Futures Contracts Expiring November 2005 with strike price of 1300 7,890 $ -- December 2005 U.S. Treasury Bond Futures Contracts Expiring November 2005 with strike price of 1240 219 -- December 2005 U.S. Treasury Bond Futures Contracts Expiring November 2005 with strike price of 1290 200 -- --------------- TOTAL OPTIONS PURCHASED (Cost $165,141) -- --------------- FACE AMOUNT -------------- REPURCHASE AGREEMENTS 103.3% Joint Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 423,801,260 423,801,260 3.24% due 10/03/05 322,775,543 322,775,543 Individual Repurchase Agreement Citigroup Global Market at 2.35% due 10/03/05 (Secured by U.S. Treasury Bonds, at rate of 5.38% and maturing 02/15/31 as collateral, with a Market Value of $907,000,000) and a Maturity Value of $889,389,824 889,215,686 889,215,686 Individual Repurchase Agreement Lehman Brothers, Inc. at 2.30% due 10/03/05 (Secured by U.S. Treasury Bonds, at a rate of 5.38% and maturing 02/15/31 as collateral, with a Market Value of $489,677,963) and a Maturity Value of $480,157,012 480,065,000 480,065,000 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $2,115,857,489) 2,115,857,489 --------------- TOTAL INVESTMENTS 167.3% (Cost $3,425,596,792) $ 3,425,431,651 =============== See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 49 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- JUNO MASTER PORTFOLIO - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ U.S. TREASURY OBLIGATIONS SOLD SHORT (68.1)% U.S. Treasury Bond at 5.38% due 02/15/31 $1,244,310,000 $(1,394,599,317) --------------- TOTAL U.S. TREASURY OBLIGATIONS SOLD SHORT (Cost $1,413,731,318) (1,394,599,317) --------------- LIABILITIES IN EXCESS OF OTHER ASSETS - (0.8)% $ 16,735,620 =============== NET ASSETS - 100.0% $ 2,047,567,954 - ------------------------------------------------------------------------------ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS SOLD SHORT December 2005 U.S. Treasury Bond Futures Contracts (Aggregate Market Value of Contracts $ 950,861,188) 8,309 $ 19,009,021 =============== * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. See Notes to Financial Statements. 50 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 81.8% FINANCIALS 28.4% BANKS 16.3% HSBC Holdings PLC -- SP ADR 52,370 $ 4,254,015 Banco Santander Central Hispano SA -- SP ADR 192,270 2,532,196 Banco Bilbao Vizcaya Argentaria SA -- SP ADR 138,650 2,431,921 Barclays PLC -- SP ADR 54,820 2,235,560 Lloyds TSB Group PLC -- SP ADR 59,180 1,966,551 ABN AMRO Holding NV -- SP ADR 76,410 1,833,840 --------------- TOTAL BANKS 15,254,083 --------------- CAPITAL MARKETS 7.1% UBS AG 39,700 3,394,350 Credit Suisse Group -- SP ADR 37,530 1,669,334 Deutsche Bank AG 16,190 1,514,089 --------------- TOTAL CAPITAL MARKETS 6,577,773 --------------- INSURANCE 2.9% AXA -- SP ADR 55,960 1,540,579 Allianz AG -- SP ADR 87,350 1,180,098 --------------- TOTAL INSURANCE 2,720,677 --------------- DIVERSIFIED FINANCIALS 2.1% ING Groep NV -- SP ADR 66,320 1,975,673 --------------- TOTAL DIVERSIFIED FINANCIALS 1,975,673 --------------- TOTAL FINANCIALS 26,528,206 --------------- ENERGY 14.7% OIL & GAS 14.7% BP PLC -- SP ADR 79,840 5,656,664 Total SA -- SP ADR 27,760 3,770,363 Royal Dutch Shell PLC -- SP ADR 44,440 2,917,042 ENI-Ente Nazionale Idrocarburi -- SP ADR 9,220 1,365,482 --------------- TOTAL OIL & GAS 13,709,551 --------------- TOTAL ENERGY 13,709,551 --------------- HEALTH CARE 11.8% PHARMACEUTICALS 11.6% Novartis AG -- SP ADR 76,760 3,914,760 GlaxoSmithKline PLC -- SP ADR 73,240 3,755,747 AstraZeneca PLC -- SP ADR 44,120 2,078,052 Schering AG -- SP ADR 7,940 503,396 Teva Pharmaceutical Industries Ltd. -- SP ADR 5,620 187,820 Shire Pharmaceuticals PLC -- SP ADR 5,050 186,800 Sanofi-Aventis SA -- ADR 4,160 172,848 --------------- TOTAL PHARMACEUTICALS 10,799,423 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ HEALTH CARE EQUIPMENT & SUPPLIES 0.2% Alcon, Inc. 1,610 $ 205,887 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 205,887 --------------- TOTAL HEALTH CARE 11,005,310 --------------- TELECOMMUNICATION SERVICES 9.1% DIVERSIFIED TELECOMMUNICATION SERVICES 5.1% Telefonica SA 33,870 1,670,468 Deutsche Telekom AG -- SP ADR 56,040 1,022,170 France Telecom SA -- SP ADR 31,960 918,850 Telecom Italia -- SP ADR 19,070 621,682 BT Group PLC -- SP ADR 12,570 498,275 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 4,731,445 --------------- WIRELESS TELECOMMUNICATION SERVICES 4.0% Vodafone Group PLC -- SP ADR 143,660 3,730,850 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 3,730,850 --------------- TOTAL TELECOMMUNICATION SERVICES 8,462,295 --------------- CONSUMER STAPLES 5.7% FOOD PRODUCTS 3.4% Unilever NV 27,750 1,982,738 Cadbury Schweppes PLC -- SP ADR 30,080 1,225,158 --------------- TOTAL FOOD PRODUCTS 3,207,896 --------------- BEVERAGES 2.3% Diageo PLC -- SP ADR 37,340 2,166,093 --------------- TOTAL BEVERAGES 2,166,093 --------------- TOTAL CONSUMER STAPLES 5,373,989 --------------- INFORMATION TECHNOLOGY 3.9% COMMUNICATIONS EQUIPMENT 3.0% Nokia OYJ -- SP ADR 94,230 1,593,429 Telefonaktiebolaget LM Ericsson -- SP ADR* 33,190 1,222,720 --------------- TOTAL COMMUNICATIONS EQUIPMENT 2,816,149 --------------- SOFTWARE 0.9% SAP AG -- SP ADR 19,020 824,136 --------------- TOTAL SOFTWARE 824,136 --------------- TOTAL INFORMATION TECHNOLOGY 3,640,285 --------------- CONSUMER DISCRETIONARY 2.6% AUTOMOBILES 1.1% DaimlerChrysler AG 18,730 994,938 --------------- TOTAL AUTOMOBILES 994,938 --------------- TEXTILES & APPAREL 0.9% Luxottica Group 35,040 872,846 --------------- TOTAL TEXTILES & APPAREL 872,846 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 51 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP EUROPE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ HOUSEHOLD DURABLES 0.6% Koninklijke Philips Electronics NV 22,960 $ 612,573 --------------- TOTAL HOUSEHOLD DURABLES 612,573 --------------- TOTAL CONSUMER DISCRETIONARY 2,480,357 --------------- MATERIALS 2.3% CHEMICALS 1.3% BASF AG -- SP ADR 15,840 1,194,336 --------------- TOTAL CHEMICALS 1,194,336 --------------- METALS & MINING 1.0% Anglo American PLC -- ADR 31,930 964,286 --------------- TOTAL METALS & MINING 964,286 --------------- TOTAL MATERIALS 2,158,622 --------------- UTILITIES 2.1% ELECTRIC UTILITIES 1.6% E.ON AG -- SP ADR 50,030 1,538,423 --------------- TOTAL ELECTRIC UTILITIES 1,538,423 --------------- MULTI-UTILITIES 0.5% Suez SA -- SP ADR 14,420 418,468 --------------- TOTAL MULTI-UTILITIES 418,468 --------------- TOTAL UTILITIES 1,956,891 --------------- INDUSTRIALS 1.2% INDUSTRIAL CONGLOMERATES 1.2% Siemens AG -- SP ADR 14,290 1,105,046 --------------- TOTAL INDUSTRIAL CONGLOMERATES 1,105,046 --------------- TOTAL INDUSTRIALS 1,105,046 --------------- TOTAL COMMON STOCKS (Cost $73,218,960) 76,420,552 --------------- FACE AMOUNT ----------- REPURCHASE AGREEMENTS 17.5% Repurchase Agreement (Note 6) 3.25% due 10/03/05+ $11,827,192 11,827,192 3.24% due 10/03/05 4,453,761 4,453,761 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $16,280,953) 16,280,953 --------------- TOTAL INVESTMENTS 99.3% (Cost $89,499,913) $ 92,701,505 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 0.7% $ 690,215 =============== NET ASSETS - 100.0% $ 93,391,720 - ------------------------------------------------------------------------------ UNREALIZED GAIN UNITS (NOTE 1) - ------------------------------------------------------------------------------ EQUITY INDEX SWAP AGREEMENT December 2005 Dow Jones STOXX 50 Index Swap, Maturing 12/14/05** (Notional Market Value $40,831,183) 10,390 $ 295,636 =============== * NON-INCOME PRODUCING SECURITY. ** PRICE RETURN BASED ON DOW JONES STOXX 50 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS EQUITY INDEX SWAP COLLATERAL AT SEPTEMBER 30, 2005. ADR--AMERICAN DEPOSITORY RECEIPT. See Notes to Financial Statements. 52 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 87.9% Repurchase Agreement (Note 6) 3.25% due 10/03/05+ $77,052,680 $ 77,052,680 3.24% due 10/03/05 46,557,840 46,557,840 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $123,610,520) 123,610,520 --------------- TOTAL INVESTMENTS 87.9% (Cost $123,610,520) $123,610,520 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 12.1% $ 17,040,109 =============== NET ASSETS - 100.0% $ 140,650,629 - ------------------------------------------------------------------------------ UNREALIZED GAIN (LOSS) CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACT PURCHASED December 2005 Nikkei 225 Index Futures Contracts (Aggregate Market Value of Contracts $55,158,450) 807 $ 4,078,436 December 2005 Yen Currency Exchange Futures Contracts (Aggregate Market Value of Contracts $54,815,475) 494 (1,894,969) --------------- (TOTAL AGGREGATE MARKET VALUE OF CONTRACTS $109,973,925) $ 2,183,467 =============== UNITS ---------- EQUITY INDEX SWAP AGREEMENT December 2005 Topix 100 Index Swap, Maturing 12/29/05* (Notional Market Value $118,386,830) 13,400,925 $ 5,271,792 =============== * PRICE RETURN BASED ON TOPIX 100 INDEX +/- FINANCING AT A VARIABLE RATE. + ALL OR A PORTION OF THIS SECURITY IS HELD AS EQUITY INDEX SWAP COLLATERAL AT SEPTEMBER 30, 2005. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 53 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.9% FINANCIALS 21.4% BANKS 7.6% South Financial Group, Inc.+ 11,697 $ 313,947 Whitney Holding Corp. 9,933 268,588 Amegy Bancorp, Inc. 11,114 251,510 First Bancorp Puerto Rico 12,702 214,918 United Bankshares, Inc. 5,870 205,157 Chittenden Corp. 7,300 193,523 Wintrust Financial Corp. 3,722 187,068 Provident Bankshares Corp. 5,167 179,708 Susquehanna Bancshares, Inc. 7,345 176,574 Umpqua Holding Corp.+ 6,989 169,972 Central Pacific Financial Corp. Co. 4,777 168,055 First Republic Bank+ 3,608 127,110 Sterling Financial Corp./WA 5,444 122,762 Boston Private Financial Holdings, Inc. 4,430 117,572 Community Bank System, Inc. 4,757 107,508 Sterling Bancshares, Inc./TX 7,125 104,809 Prosperity Bancshares, Inc.+ 3,370 101,943 Gold Banc Corp., Inc. 6,070 90,443 Irwin Financial Corp. 2,782 56,725 --------------- TOTAL BANKS 3,157,892 --------------- INSURANCE 4.5% ProAssurance Corp.* 4,870 227,283 Selective Insurance Group, Inc. 4,458 217,996 Hilb Rogal & Hobbs Co.+ 5,602 209,067 Delphi Financial Group, Inc. -- Class A 4,456 208,541 UICI 5,509 198,324 LandAmerica Financial Group, Inc.+ 2,836 183,347 RLI Corp. 3,363 155,572 Stewart Information Services Corp. 2,852 146,022 United Fire & Casualty Co. 2,660 119,993 Infinity Property & Casualty Corp. 3,255 114,218 Presidential Life Corp. 3,376 60,768 SCPIE Holdings Inc.* 1,562 22,337 --------------- TOTAL INSURANCE 1,863,468 --------------- REAL ESTATE 4.2% New Century Financial Corp. 8,852 321,062 Colonial Properties Trust 6,983 310,604 Capital Automotive REIT 6,469 250,415 Lexington Corporate Properties Trust 8,139 191,674 Entertainment Properties Trust 4,064 181,376 Commercial Net Lease Realty 8,466 169,320 Sovran Self Storage, Inc. 2,586 126,585 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Glenborough Realty Trust, Inc. 5,691 $ 109,267 Parkway Properties, Inc./MD 2,221 104,209 --------------- TOTAL REAL ESTATE 1,764,512 --------------- THRIFTS & MORTGAGE FINANCE 3.7% Fremont General Corp.+ 10,277 224,347 Commercial Federal Corp. 6,001 204,874 Downey Financial Corp. 3,278 199,630 MAF Bancorp, Inc. 4,324 177,284 Brookline Bancorp, Inc. 9,674 153,043 FirstFed Financial Corp.*+ 2,600 139,906 BankAtlantic Bancorp, Inc. -- Class A 7,050 119,779 Bankunited Financial Corp. -- Class A 4,181 95,619 Flagstar Bancorp, Inc.+ 5,478 88,196 Anchor BanCorp Wisconsin, Inc. 2,945 86,819 Dime Community Bancshares 4,375 64,400 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 1,553,897 --------------- CAPITAL MARKETS 0.8% Investment Technology Group, Inc.* 6,612 195,715 Piper Jaffray Cos., Inc.* 3,141 93,790 SWS Group, Inc. 2,462 40,377 --------------- TOTAL CAPITAL MARKETS 329,882 --------------- CONSUMER FINANCE 0.3% Cash America International, Inc. 4,596 95,367 Rewards Network, Inc.* 3,292 22,484 --------------- TOTAL CONSUMER FINANCE 117,851 --------------- DIVERSIFIED FINANCIALS 0.3% Financial Federal Corp. 2,746 109,291 --------------- TOTAL DIVERSIFIED FINANCIALS 109,291 --------------- TOTAL FINANCIALS 8,896,793 --------------- INDUSTRIALS 20.3% COMMERCIAL SERVICES & SUPPLIES 4.6% United Stationers, Inc.* 5,227 250,164 School Specialty, Inc.* 3,590 175,120 Tetra Tech, Inc.* 8,957 150,657 G & K Services, Inc. -- Class A 3,315 130,578 ABM Industries, Inc. 6,049 125,880 NCO Group, Inc.*+ 5,049 104,312 Imagistics International, Inc.* 2,427 101,570 Mobile Mini, Inc.*+ 2,335 101,222 Viad Corp. 3,507 95,916 Heidrick & Struggles International, Inc.* 2,935 95,035 Consolidated Graphics, Inc.* 1,861 80,116 Bowne & Co., Inc. 5,351 76,466 Coinstar, Inc.* 4,010 74,225 See Notes to Financial Statements. 54 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Spherion Corp.* 9,555 $ 72,618 CDI Corp. 1,953 57,692 Sourcecorp, Inc.* 2,463 52,807 Central Parking Corp. 3,226 48,229 On Assignment, Inc.* 3,981 34,037 Standard Register Co. 1,988 29,721 Volt Information Sciences, Inc.* 1,280 26,010 Angelica Corp. 1,453 25,936 PRG-Schultz International, Inc.* 6,654 20,028 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,928,339 --------------- MACHINERY 3.8% Briggs & Stratton Corp. 8,110 280,525 Manitowoc Co., Inc. 4,727 237,532 Albany International Corp. -- Class A 5,000 184,350 Gardner Denver, Inc.* 4,059 181,031 Watts Industries, Inc. -- Class A 3,988 115,054 EnPro Industries, Inc.* 3,295 111,009 Stewart & Stevenson Services, Inc. 4,570 108,994 Barnes Group, Inc. 2,706 97,037 Astec Industries, Inc.* 2,721 77,249 Valmont Industries, Inc. 2,571 75,485 Robbins & Myers, Inc. 1,815 40,801 Lindsay Manufacturing Co. 1,810 39,838 Lydall, Inc.* 2,535 22,638 Wolverine Tube, Inc.* 2,367 17,752 --------------- TOTAL MACHINERY 1,589,295 --------------- AEROSPACE & DEFENSE 3.0% DRS Technologies, Inc. 4,387 216,542 Curtiss-Wright Corp. 3,403 209,999 Armor Holdings, Inc.*+ 4,615 198,491 Moog, Inc. -- Class A*+ 5,403 159,497 Esterline Technologies Corp.* 3,981 150,840 Triumph Group, Inc.* 2,499 92,888 AAR Corp.* 5,121 87,979 Kaman Corp. -- Class A 3,588 73,375 Cubic Corp.+ 2,435 41,687 Applied Signal Technology, Inc. 1,810 34,535 --------------- TOTAL AEROSPACE & DEFENSE 1,265,833 --------------- CONSTRUCTION & ENGINEERING 1.9% Shaw Group, Inc.*+ 12,393 305,612 URS Corp.*+ 6,711 271,057 EMCOR Group, Inc.* 2,443 144,870 Insituform Technologies, Inc. -- Class A* 4,225 73,050 --------------- TOTAL CONSTRUCTION & ENGINEERING 794,589 --------------- ELECTRICAL EQUIPMENT 1.7% Acuity Brands, Inc.+ 6,987 207,304 Regal-Beloit Corp.+ 4,565 148,089 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Woodward Governor Co. 1,551 $ 131,913 A.O. Smith Corp. 3,161 90,089 Artesyn Technologies, Inc.*+ 6,240 58,032 C&D Technologies, Inc. 3,989 37,536 MagneTek, Inc.* 4,487 15,166 --------------- TOTAL ELECTRICAL EQUIPMENT 688,129 --------------- TRADING COMPANIES & DISTRIBUTORS 1.2% Hughes Supply, Inc.+ 10,480 341,648 Applied Industrial Technologies, Inc. 3,925 140,829 Lawson Products, Inc. 725 26,622 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 509,099 --------------- BUILDING PRODUCTS 1.1% Universal Forest Products, Inc. 2,530 145,020 NCI Building Systems, Inc.*+ 3,332 135,912 Griffon Corp.*+ 4,080 100,368 Apogee Enterprises, Inc. 4,372 74,761 --------------- TOTAL BUILDING PRODUCTS 456,061 --------------- ROAD & RAIL 1.1% Kansas City Southern* 12,889 300,443 Arkansas Best Corp.+ 3,996 139,340 --------------- TOTAL ROAD & RAIL 439,783 --------------- AIRLINES 0.8% SkyWest, Inc.+ 9,093 243,875 Frontier Airlines, Inc.* 5,681 55,560 Mesa Air Group, Inc.*+ 4,545 37,496 --------------- TOTAL AIRLINES 336,931 --------------- MARINE 0.5% Kirby Corp.* 3,952 195,347 --------------- TOTAL MARINE 195,347 --------------- AIR FREIGHT & COURIERS 0.3% EGL, Inc.* 5,060 137,379 --------------- TOTAL AIR FREIGHT & COURIERS 137,379 --------------- INDUSTRIAL CONGLOMERATES 0.3% Tredegar Corp. 4,369 56,841 Standex International Corp. 1,750 46,077 --------------- TOTAL INDUSTRIAL CONGLOMERATES 102,918 --------------- TOTAL INDUSTRIALS 8,443,703 --------------- INFORMATION TECHNOLOGY 14.2% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 4.4% Varian Semiconductor Equipment Associates, Inc.*+ 5,840 247,441 Skyworks Solutions, Inc.*+ 24,886 174,700 Cymer, Inc.*+ 5,572 174,515 Photronics, Inc.*+ 6,485 125,809 DSP Group, Inc.* 4,497 115,393 Standard Microsystems Corp.* 3,262 97,566 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 55 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Brooks Automation, Inc.*+ 7,135 $ 95,110 Axcelis Technologies, Inc.*+ 15,795 82,450 Cohu, Inc. 3,418 80,836 Exar Corp.* 5,491 76,984 FEI Co.* 3,917 75,402 Kopin Corp.* 10,834 75,296 Veeco Instruments, Inc.* 4,190 67,208 Helix Technology Corp. 4,102 60,504 Ultratech, Inc.* 3,777 58,883 Actel Corp.* 3,991 57,710 Supertex, Inc.* 1,820 54,582 Advanced Energy Industries, Inc.* 4,442 47,796 Pericom Semiconductor Corp.* 4,150 36,686 Rudolph Technologies, Inc.*+ 2,235 30,105 ESS Technologies, Inc.* 5,562 19,745 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1,854,721 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 4.3% Anixter International, Inc.* 5,055 203,868 Benchmark Electronics, Inc.*+ 6,573 197,979 Coherent, Inc.* 4,888 143,121 Checkpoint Systems, Inc.* 5,955 141,253 Global Imaging Systems, Inc.* 3,622 123,329 Aeroflex, Inc.*+ 11,737 109,858 Electro Scientific Industries, Inc.* 4,505 100,732 Technitrol, Inc. 6,365 97,512 Paxar Corp.* 5,752 96,921 Park Electrochemical Corp. 3,145 83,814 Agilsys, Inc. 4,773 80,377 CTS Corp. 5,728 69,309 Methode Electronics, Inc. -- Class A 5,875 67,680 Radisys Corp.* 3,175 61,595 Photon Dynamics, Inc.* 2,667 51,073 Bell Microproducts, Inc.* 4,614 46,279 X-Rite, Inc. 2,895 35,898 Keithley Instruments, Inc. 2,247 32,806 Gerber Scientific, Inc.* 3,505 27,479 Planar Systems, Inc.* 2,320 19,070 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 1,789,953 --------------- SOFTWARE 2.1% THQ, Inc.* 9,749 207,849 Internet Security Systems, Inc.* 6,137 147,349 JDA Software Group, Inc.* 4,480 68,006 Verity, Inc.* 5,910 62,764 SPSS, Inc.* 2,527 60,648 MRO Software, Inc.* 3,392 57,121 Altiris, Inc.* 3,612 55,228 EPIQ Systems, Inc.* 1,997 43,575 MapInfo Corp.*+ 3,245 39,751 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Catapult Communications Corp.* 1,620 $ 29,711 Phoenix Technologies, Ltd.* 3,929 29,585 Napster, Inc.* 6,887 27,548 NYFIX, Inc.*+ 4,592 26,496 Captaris, Inc.* 4,509 16,954 --------------- TOTAL SOFTWARE 872,585 --------------- COMMUNICATIONS EQUIPMENT 1.8% Belden CDT, Inc.+ 7,213 140,149 Black Box Corp. 2,688 112,789 ViaSat, Inc.* 3,520 90,288 Inter-Tel, Inc. 3,280 68,880 Bel Fuse, Inc. -- Class B 1,823 66,412 Symmetricom, Inc.* 7,303 56,525 C-COR, Inc.*+ 7,510 50,693 Digi International, Inc.* 3,202 34,357 Ditech Communications Corp.* 5,057 34,084 PC-Tel, Inc.* 3,334 31,340 Brooktrout, Inc.* 2,002 25,966 Network Equipment Technologies, Inc.* 3,884 17,905 Tollgrade Communications, Inc.* 2,064 17,461 --------------- TOTAL COMMUNICATIONS EQUIPMENT 746,849 --------------- IT CONSULTING & SERVICES 1.0% eFunds Corp.* 7,135 134,352 MAXIMUS, Inc. 3,000 107,250 Ciber, Inc.*+ 8,646 64,240 Intrado, Inc.* 2,785 50,214 Pegasus Solutions, Inc.* 2,777 24,937 Carreker Corp.* 3,372 23,806 Startek, Inc. 1,770 23,364 --------------- TOTAL IT CONSULTING & SERVICES 428,163 --------------- COMPUTERS & PERIPHERALS 0.5% Hutchinson Technology, Inc.*+ 4,026 105,159 Adaptec, Inc.* 17,676 67,699 SBS Technologies, Inc.* 2,457 23,661 --------------- TOTAL COMPUTERS & PERIPHERALS 196,519 --------------- INTERNET SOFTWARE & SERVICES 0.1% MIVA, Inc.* 4,347 26,212 --------------- TOTAL INTERNET SOFTWARE & SERVICES 26,212 --------------- TOTAL INFORMATION TECHNOLOGY 5,915,002 --------------- CONSUMER DISCRETIONARY 12.2% SPECIALTY RETAIL 3.7% Zale Corp.*+ 8,042 218,582 Linens 'N Things, Inc.*+ 7,113 189,917 Too, Inc.*+ 5,185 142,225 TBC Corp.* 3,526 121,612 PEP Boys-Manny Moe & Jack 8,499 117,626 Stage Stores, Inc.+ 4,305 115,675 Sonic Automotive, Inc. 4,650 103,323 See Notes to Financial Statements. 56 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Burlington Coat Factory Warehouse Corp. 2,600 $ 98,904 Group 1 Automotive, Inc.* 3,341 92,212 Dress Barn, Inc.*+ 3,476 79,114 Gymboree Corp.* 4,922 67,136 Jo-Ann Stores, Inc.* 3,640 62,972 Cost Plus, Inc.* 3,462 62,835 Haverty Furniture Cos., Inc. 3,567 43,624 Goody's Family Clothing, Inc. 3,117 23,596 Hancock Fabrics, Inc./DE+ 3,006 20,230 --------------- TOTAL SPECIALTY RETAIL 1,559,583 --------------- HOUSEHOLD DURABLES 3.2% Standard-Pacific Corp.+ 10,668 442,829 M.D.C. Holdings, Inc. 5,093 401,787 La-Z-Boy, Inc.+ 8,139 107,353 M/I Homes, Inc. 1,952 105,915 Interface, Inc. -- Class A* 7,507 62,008 Skyline Corp. 1,066 43,322 Bassett Furniture Industries, Inc. 1,853 34,503 Libbey, Inc. 2,185 33,212 National Presto Industries, Inc. 743 31,808 Department 56, Inc.* 2,166 27,075 Russ Berrie & Co., Inc. 1,868 26,376 Fedders Corp. 3,690 7,897 Applica, Inc.* 3,795 6,338 --------------- TOTAL HOUSEHOLD DURABLES 1,330,423 --------------- HOTELS, RESTAURANTS & LEISURE 1.6% Aztar Corp.* 5,596 172,413 Pinnacle Entertainment, Inc.* 6,414 117,569 Ryan's Restaurant Group, Inc.* 6,583 76,824 Landry's Restaurants, Inc.+ 2,612 76,531 Lone Star Steakhouse & Saloon, Inc. 2,822 73,372 Marcus Corp. 3,387 67,875 O'Charleys, Inc.* 3,507 50,185 Multimedia Games, Inc.*+ 4,260 41,365 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 676,134 --------------- TEXTILES & APPAREL 1.2% Kellwood Co.+ 4,372 113,016 Oxford Industries, Inc.+ 2,207 99,580 Brown Shoe Co., Inc. 2,893 95,469 Russell Corp. 5,208 73,120 Stride Rite Corp. 5,697 73,036 Haggar Corp. 856 24,336 Ashworth, Inc.* 2,192 14,971 --------------- TOTAL TEXTILES & APPAREL 493,528 --------------- LEISURE EQUIPMENT & PRODUCTS 0.6% K2, Inc.* 7,479 85,261 Jakks Pacific, Inc.*+ 4,189 67,987 Arctic Cat, Inc. 2,047 42,045 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Action Performance Cos., Inc. 2,922 $ 36,525 Sturm Ruger & Co., Inc. 3,380 31,096 Meade Instruments Corp.* 2,669 7,100 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 270,014 --------------- MULTILINE RETAIL 0.5% ShopKo Stores, Inc.* 4,748 121,169 Fred's, Inc.+ 6,260 78,313 --------------- TOTAL MULTILINE RETAIL 199,482 --------------- AUTOMOBILES 0.5% Fleetwood Enterprises, Inc.*+ 8,870 109,101 Monaco Coach Corp.+ 4,177 61,569 Coachmen Industries, Inc. 2,233 25,657 --------------- TOTAL AUTOMOBILES 196,327 --------------- INTERNET & CATALOG RETAIL 0.5% Insight Enterprises, Inc.* 7,642 142,141 J. Jill Group, Inc.* 3,195 50,545 --------------- TOTAL INTERNET & CATALOG RETAIL 192,686 --------------- AUTO COMPONENTS 0.2% Superior Industries International, Inc. 3,592 77,300 Standard Motor Products, Inc. 1,996 16,187 --------------- TOTAL AUTO COMPONENTS 93,487 --------------- DISTRIBUTORS 0.1% Audiovox Corp. -- Class A* 2,987 41,758 --------------- TOTAL DISTRIBUTORS 41,758 --------------- MEDIA 0.1% 4Kids Entertainment, Inc.* 2,050 35,649 --------------- TOTAL MEDIA 35,649 --------------- TOTAL CONSUMER DISCRETIONARY 5,089,071 --------------- MATERIALS 7.8% METALS & MINING 4.0% Commercial Metals Co.+ 9,132 308,114 Quanex Corp. 3,974 263,158 Reliance Steel & Aluminum Co. 4,347 230,087 Carpenter Technology Corp. 3,425 200,739 RTI International Metals, Inc.* 3,587 141,148 Aleris International, Inc.* 4,851 133,160 Chaparral Steel Co.* 3,587 90,464 Ryerson Tull, Inc.+ 3,957 84,284 Century Aluminum Co.*+ 3,587 80,636 Brush Engineered Materials, Inc.* 3,023 48,005 Steel Technologies, Inc. 1,743 45,196 A.M. Castle & Co.* 1,521 26,618 --------------- TOTAL METALS & MINING 1,651,609 --------------- CHEMICALS 1.4% H.B. Fuller Co. 4,524 140,606 OM Group, Inc.* 4,493 90,444 PolyOne Corp.* 14,432 87,458 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 57 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Arch Chemicals, Inc. 3,711 $ 86,281 A. Schulman, Inc. 4,804 86,232 Material Sciences Corp.* 2,001 30,155 Quaker Chemical Corp. 1,526 26,522 Penford Corp. 1,389 18,571 Wellman, Inc. 2,702 17,103 --------------- TOTAL CHEMICALS 583,372 --------------- CONTAINERS & PACKAGING 1.2% AptarGroup, Inc. 5,499 273,905 Rock-Tenn Co. -- Class A 4,892 73,869 Myers Industries, Inc. 4,909 57,141 Chesapeake Corp. 3,100 57,009 Caraustar Industries, Inc.* 4,519 49,619 --------------- TOTAL CONTAINERS & PACKAGING 511,543 --------------- PAPER & FOREST PRODUCTS 0.7% Wausau Paper Corp. 8,090 101,206 Neenah Paper, Inc. 2,320 67,976 Schweitzer-Mauduit International, Inc. 2,391 53,367 Buckeye Technologies, Inc.* 5,192 42,159 Pope & Talbot, Inc. 2,565 26,188 --------------- TOTAL PAPER & FOREST PRODUCTS 290,896 --------------- CONSTRUCTION MATERIALS 0.5% Texas Industries, Inc. 3,562 193,773 --------------- TOTAL CONSTRUCTION MATERIALS 193,773 --------------- TOTAL MATERIALS 3,231,193 --------------- UTILITIES 7.1% GAS UTILITIES 4.1% Southern Union Co.* 15,394 396,703 Atmos Energy Corp. 12,630 356,797 Piedmont Natural Gas Co.+ 12,036 302,946 New Jersey Resources Corp. 4,320 198,634 Southwest Gas Corp. 6,017 164,806 Northwest Natural Gas Co. 4,331 161,200 Laclede Group, Inc. 3,324 107,997 Cascade Natural Gas Corp. 1,789 38,946 --------------- TOTAL GAS UTILITIES 1,728,029 --------------- ELECTRIC UTILITIES 2.2% Allete, Inc.+ 4,715 215,994 Cleco Corp. 7,841 184,891 Unisource Energy Corp. 5,450 181,158 El Paso Electric Co.* 7,538 157,167 UIL Holding Corp. 2,036 106,503 Central Vermont Public Service Corp. 1,926 33,705 Green Mountain Power Corp. 816 26,871 --------------- TOTAL ELECTRIC UTILITIES 906,289 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MULTI-UTILITIES 0.6% Avista Corp.+ 7,621 $ 147,848 CH Energy Group, Inc. 2,127 100,990 --------------- TOTAL MULTI-UTILITIES 248,838 --------------- WATER UTILITIES 0.2% American States Water Co. 2,636 88,201 --------------- TOTAL WATER UTILITIES 88,201 --------------- TOTAL UTILITIES 2,971,357 --------------- ENERGY 6.3% OIL & GAS 3.2% Cimarex Energy Co.*+ 12,897 584,621 Spinnaker Exploration Co.* 4,233 273,833 Stone Energy Corp.* 4,234 258,443 Swift Energy Co.*+ 4,496 205,692 --------------- TOTAL OIL & GAS 1,322,589 --------------- ENERGY EQUIPMENT & SERVICES 3.1% SEACOR Holdings, Inc.* 3,240 235,159 Oceaneering International, Inc.*+ 4,125 220,316 Maverick Tube Corp.*+ 6,757 202,710 Veritas DGC, Inc.*+ 5,322 194,892 W-H Energy Services, Inc.* 4,416 143,167 Offshore Logistics, Inc.* 3,658 135,346 Input/Output, Inc.*+ 11,040 88,099 Dril-Quip, Inc.* 1,151 55,248 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 1,274,937 --------------- TOTAL ENERGY 2,597,526 --------------- HEALTH CARE 5.9% HEALTH CARE EQUIPMENT & SUPPLIES 3.2% Cooper Cos., Inc.+ 6,937 531,444 Invacare Corp. 4,976 207,350 Conmed Corp.* 4,641 129,391 Viasys Healthcare, Inc.* 4,958 123,900 Analogic Corp. 2,153 108,533 Greatbatch, Inc.* 3,395 93,159 Datascope Corp. 1,931 59,900 Vital Signs, Inc. 890 41,020 Osteotech, Inc.* 2,702 15,482 Theragenics Corp.* 5,025 14,824 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,325,003 --------------- HEALTH CARE PROVIDERS & SERVICES 1.8% Sunrise Senior Living, Inc.*+ 2,799 186,805 SFBC International, Inc.* 2,875 127,621 NDCHealth Corp. 5,692 107,692 Parexel International Corp.* 4,168 83,735 Gentiva Health Services, Inc.* 3,656 66,247 Cross Country Healthcare, Inc.* 3,300 61,248 RehabCare Group, Inc.* 2,634 54,050 Hooper Holmes, Inc. 10,289 40,436 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 727,834 --------------- See Notes to Financial Statements. 58 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BIOTECHNOLOGY 0.5% Cambrex Corp. 4,153 $ 78,741 Regeneron Pharmaceuticals, Inc.* 6,882 65,310 Arqule, Inc.* 5,527 43,277 Savient Pharmaceuticals, Inc.* 9,551 36,007 --------------- TOTAL BIOTECHNOLOGY 223,335 --------------- PHARMACEUTICALS 0.4% Alpharma, Inc. -- Class A 6,527 162,326 Bradley Pharmaceuticals, Inc.* 2,190 23,915 --------------- TOTAL PHARMACEUTICALS 186,241 --------------- TOTAL HEALTH CARE 2,462,413 --------------- CONSUMER STAPLES 4.5% FOOD PRODUCTS 2.0% Corn Products International, Inc.+ 11,754 237,078 Ralcorp Holdings, Inc. 4,657 195,222 TreeHouse Foods, Inc.* 4,837 130,019 Hain Celestial Group, Inc.*+ 4,781 92,751 Sanderson Farms, Inc. 2,277 84,613 J&J Snack Foods Corp. 1,065 61,557 American Italian Pasta Co. -- Class A+ 2,897 30,882 --------------- TOTAL FOOD PRODUCTS 832,122 --------------- FOOD & DRUG RETAILING 1.5% Performance Food Group Co.* 5,884 185,699 Casey's General Stores, Inc.+ 7,895 183,164 Longs Drug Stores Corp. 4,196 179,967 Nash Finch Co.+ 2,016 85,055 --------------- TOTAL FOOD & DRUG RETAILING 633,885 --------------- PERSONAL PRODUCTS 0.5% NBTY, Inc.* 8,765 205,977 --------------- TOTAL PERSONAL PRODUCTS 205,977 --------------- HOUSEHOLD PRODUCTS 0.4% Spectrum Brands, Inc.* 5,827 137,226 --------------- TOTAL HOUSEHOLD PRODUCTS 137,226 --------------- TOBACCO 0.1% Alliance One International, Inc. 13,615 48,197 --------------- TOTAL TOBACCO 48,197 --------------- TOTAL CONSUMER STAPLES 1,857,407 --------------- TELECOMMUNICATION SERVICES 0.2% DIVERSIFIED TELECOMMUNICATION SERVICES 0.2% General Communication, Inc. -- Class A*+ 7,344 72,706 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 72,706 --------------- TOTAL TELECOMMUNICATION SERVICES 72,706 --------------- TOTAL COMMON STOCKS (Cost $34,452,111) 41,537,171 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 0.1% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 22,813 $ 22,813 3.24% due 10/03/05 17,375 17,375 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $40,188) 40,188 --------------- SECURITIES LENDING COLLATERAL 12.1% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 5,043,318 5,043,318 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $5,043,318) 5,043,318 --------------- TOTAL INVESTMENTS 112.1% (Cost $39,535,617) $ 46,620,677 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (12.1)% $ (5,047,817) =============== NET ASSETS - 100.0% $ 41,572,860 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. REIT - REAL ESTATE INVESTMENT TRUST. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 59 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.9% FINANCIALS 24.1% INSURANCE 9.2% Fidelity National Financial, Inc. 40,710 $ 1,812,409 Everest Re Group Ltd.+ 13,244 1,296,588 Old Republic International Corp. 42,968 1,145,957 W.R. Berkley Corp. 26,282 1,037,613 First American Corp. 22,415 1,023,693 HCC Insurance Holdings, Inc.+ 24,833 708,485 Protective Life Corp. 16,406 675,599 Stancorp Financial Group, Inc. 6,505 547,721 AmerUs Group Co.+ 9,123 523,386 Allmerica Financial Corp.* 12,549 516,266 Unitrin, Inc. 10,771 511,192 Mercury General Corp. 8,320 499,117 Ohio Casualty Corp. 15,166 411,302 American Financial Group, Inc./OH 10,949 371,500 Horace Mann Educators Corp. 10,118 200,134 --------------- TOTAL INSURANCE 11,280,962 --------------- THRIFTS & MORTGAGE FINANCE 4.6% Radian Group, Inc.+ 20,048 1,064,549 New York Community Bancorp, Inc.+ 55,671 913,005 PMI Group, Inc.+ 21,628 862,308 Independence Community Bank Corp.+ 17,631 601,041 IndyMac Bancorp, Inc.+ 14,967 592,394 Webster Financial Corp. 12,622 567,485 Astoria Financial Corp. 21,039 555,850 Washington Federal, Inc.+ 20,398 460,179 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 5,616,811 --------------- BANKS 4.1% Commerce Bancorp, Inc./NJ+ 38,625 1,185,401 Mercantile Bankshares Corp. 19,283 1,038,968 Associated Banc-Corp.+ 30,030 915,314 Colonial BancGroup, Inc. 36,197 810,813 FirstMerit Corp.+ 19,605 525,218 Greater Bay Bancorp 11,952 294,497 Texas Regional Bancshares, Inc. -- Class A 9,720 279,839 --------------- TOTAL BANKS 5,050,050 --------------- REAL ESTATE 3.3% AMB Property Corp.+ 19,991 897,596 Liberty Property Trust+ 20,684 879,897 Hospitality Properties Trust 16,914 724,934 Mack-Cali Realty Corp. 14,574 654,955 New Plan Excel Realty Trust 24,402 560,026 Highwoods Properties, Inc.+ 12,607 372,033 --------------- TOTAL REAL ESTATE 4,089,441 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CAPITAL MARKETS 1.5% A.G. Edwards, Inc. 18,114 $ 793,574 Jefferies Group, Inc.+ 11,640 506,922 Raymond James Financial, Inc. 13,363 429,220 LaBranche & Co., Inc.*+ 14,290 124,180 --------------- TOTAL CAPITAL MARKETS 1,853,896 --------------- DIVERSIFIED FINANCIALS 0.7% Leucadia National Corp.+ 19,262 830,192 --------------- TOTAL DIVERSIFIED FINANCIALS 830,192 --------------- CONSUMER FINANCE 0.7% AmeriCredit Corp.*+ 32,814 783,270 --------------- TOTAL CONSUMER FINANCE 783,270 --------------- TOTAL FINANCIALS 29,504,622 --------------- INFORMATION TECHNOLOGY 13.6% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.8% Intersil Corp. -- Class A+ 36,078 785,779 International Rectifier Corp.*+ 15,130 682,060 Integrated Device Technology, Inc.*+ 46,760 502,202 Fairchild Semiconductor International, Inc.*+ 28,235 419,572 RF Micro Devices, Inc.* 44,270 250,126 Atmel Corp.*+ 99,580 205,135 Credence Systems Corp.*+ 23,341 186,261 Cabot Microelectronics Corp.*+ 5,760 169,229 Triquint Semiconductor, Inc.* 32,953 115,995 Lattice Semiconductor Corp.*+ 26,723 114,374 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3,430,733 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 2.6% Arrow Electronics, Inc.* 27,826 872,623 Avnet, Inc.*+ 34,202 836,239 Vishay Intertechnology, Inc.* 43,349 518,021 Tech Data Corp.*+ 13,655 501,275 Plexus Corp.* 10,293 175,907 KEMET Corp.*+ 20,375 170,742 Newport Corp.* 9,376 130,608 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 3,205,415 --------------- SOFTWARE 2.4% Cadence Design Systems, Inc.*+ 65,325 1,055,652 Fair Isaac Corp.+ 15,415 690,592 Synopsys, Inc.* 33,940 641,466 Macrovision Corp.*+ 11,900 227,290 RSA Security, Inc.* 16,660 211,749 Mentor Graphics Corp.*+ 18,655 160,433 --------------- TOTAL SOFTWARE 2,987,182 --------------- IT CONSULTING & SERVICES 2.2% CheckFree Corp.* 21,289 805,150 Ceridian Corp.* 34,440 714,630 See Notes to Financial Statements. 60 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BISYS Group, Inc.* 28,436 $ 381,895 Acxiom Corp. 18,440 345,197 MPS Group, Inc.* 23,766 280,439 Keane, Inc.*+ 11,036 126,141 --------------- TOTAL IT CONSULTING & SERVICES 2,653,452 --------------- COMPUTERS & PERIPHERALS 2.1% Sandisk Corp.*+ 42,780 2,064,135 Imation Corp. 8,058 345,446 McData Corp. -- Class A* 36,498 191,250 --------------- TOTAL COMPUTERS & PERIPHERALS 2,600,831 --------------- COMMUNICATIONS EQUIPMENT 1.5% 3Com Corp.*+ 90,977 371,186 Polycom, Inc.* 22,750 367,868 Avocent Corp.*+ 11,500 363,860 Powerwave Technologies, Inc.*+ 25,848 335,766 CommScope, Inc.*+ 12,909 223,842 Utstarcom, Inc.*+ 24,226 197,926 --------------- TOTAL COMMUNICATIONS EQUIPMENT 1,860,448 --------------- TOTAL INFORMATION TECHNOLOGY 16,738,061 --------------- UTILITIES 13.0% MULTI-UTILITIES 7.0% SCANA Corp. 26,698 1,127,723 Wisconsin Energy Corp. 27,480 1,097,002 MDU Resources Group, Inc. 28,180 1,004,617 Energy East Corp.+ 34,704 874,194 Alliant Energy Corp. 27,428 798,978 NSTAR+ 25,108 726,123 OGE Energy Corp.+ 21,280 597,968 Puget Energy, Inc.+ 23,570 553,424 WPS Resources Corp.+ 8,924 515,807 Vectren Corp. 17,909 507,720 PNM Resources, Inc. 16,166 463,479 Aquila, Inc.* 87,817 347,755 --------------- TOTAL MULTI-UTILITIES 8,614,790 --------------- ELECTRIC UTILITIES 3.9% Pepco Holdings, Inc.+ 44,493 1,035,352 Sierra Pacific Resources*+ 43,128 640,451 Northeast Utilities 30,599 610,450 Hawaiian Electric Industries, Inc. 19,078 531,895 Great Plains Energy, Inc.+ 17,569 525,489 Westar Energy, Inc.+ 20,429 492,952 Black Hills Corp.+ 7,669 332,604 Duquesne Light Holdings, Inc.+ 18,314 315,184 IDACORP, Inc.+ 9,899 298,257 --------------- TOTAL ELECTRIC UTILITIES 4,782,634 --------------- GAS UTILITIES 2.1% Oneok, Inc.+ 23,760 808,315 National Fuel Gas Co. 19,795 676,989 AGL Resources, Inc. 18,163 674,029 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- WGL Holdings, Inc. 11,475 $ 368,692 --------------- TOTAL GAS UTILITIES 2,528,025 --------------- TOTAL UTILITIES 15,925,449 --------------- CONSUMER DISCRETIONARY 10.6% HOUSEHOLD DURABLES 3.0% Lennar Corp. -- Class A+ 31,435 1,878,555 Mohawk Industries, Inc.*+ 12,380 993,495 American Greetings Corp. -- Class A+ 15,765 431,961 Furniture Brands International, Inc. 12,266 221,156 Blyth, Inc. 6,240 139,090 --------------- TOTAL HOUSEHOLD DURABLES 3,664,257 --------------- SPECIALTY RETAIL 2.7% Foot Locker, Inc.+ 36,908 809,762 Barnes & Noble, Inc. 12,872 485,274 AnnTaylor Stores Corp.* 17,114 454,377 Regis Corp. 10,620 401,648 Borders Group, Inc.+ 16,567 367,290 Rent-A-Center, Inc.* 17,560 339,084 Payless Shoesource, Inc.*+ 16,005 278,487 Pier 1 Imports, Inc.+ 20,265 228,387 --------------- TOTAL SPECIALTY RETAIL 3,364,309 --------------- MEDIA 2.0% Belo Corp. -- Class A 22,749 520,042 Lee Enterprises, Inc. 10,715 455,173 Media General, Inc. 5,645 327,467 Westwood One, Inc. 15,920 316,649 Scholastic Corp.*+ 8,245 304,735 Entercom Communications Corp.* 8,977 283,583 Emmis Communications Corp. -- Class A* 8,589 189,731 --------------- TOTAL MEDIA 2,397,380 --------------- AUTO COMPONENTS 1.6% BorgWarner, Inc.+ 13,256 748,434 Lear Corp. 15,762 535,435 Modine Manufacturing Co. 8,184 300,189 ArvinMeritor, Inc. 16,520 276,215 Bandag, Inc. 2,828 121,208 --------------- TOTAL AUTO COMPONENTS 1,981,481 --------------- MULTILINE RETAIL 0.6% Saks, Inc.* 33,341 616,809 99 Cents Only Stores* 11,312 104,636 --------------- TOTAL MULTILINE RETAIL 721,445 --------------- HOTELS, RESTAURANTS & LEISURE 0.5% CBRL Group, Inc.+ 10,964 369,048 Bob Evans Farms, Inc. 8,352 189,674 Krispy Kreme Doughnuts, Inc.*+ 14,520 90,895 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 649,617 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 61 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ LEISURE EQUIPMENT & PRODUCTS 0.2% Callaway Golf Co.+ 15,449 $ 233,125 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 233,125 --------------- TOTAL CONSUMER DISCRETIONARY 13,011,614 --------------- ENERGY 10.2% OIL & GAS 5.8% Noble Energy, Inc.+ 41,080 1,926,652 Pioneer Natural Resources Co.+ 33,382 1,833,340 Newfield Exploration Co.*+ 29,852 1,465,733 Pogo Producing Co. 14,043 827,695 Forest Oil Corp.* 12,860 670,006 Overseas Shipholding Group, Inc.+ 6,995 408,018 --------------- TOTAL OIL & GAS 7,131,444 --------------- ENERGY EQUIPMENT & SERVICES 4.4% ENSCO International, Inc.+ 35,725 1,664,428 Pride International, Inc.*+ 37,246 1,061,883 Cooper Cameron Corp.*+ 13,178 974,249 Helmerich & Payne, Inc.+ 12,125 732,229 Tidewater, Inc.+ 14,322 697,052 Hanover Compressor Co.* 19,385 268,676 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 5,398,517 --------------- TOTAL ENERGY 12,529,961 --------------- INDUSTRIALS 9.3% MACHINERY 3.0% SPX Corp.+ 17,245 792,408 Timken Co.+ 19,420 575,415 Flowserve Corp.*+ 12,990 472,187 Kennametal, Inc.+ 9,062 444,400 Trinity Industries, Inc.+ 10,033 406,236 AGCO Corp.*+ 21,312 387,878 Crane Co. 11,680 347,363 Federal Signal Corp. 11,304 193,185 Tecumseh Products Co. -- Class A 4,351 93,634 --------------- TOTAL MACHINERY 3,712,706 --------------- COMMERCIAL SERVICES & SUPPLIES 1.9% Manpower, Inc. 20,525 911,105 Brink's Co. 13,800 566,628 Adesa, Inc. 21,095 466,199 Banta Corp. 5,675 288,801 Kelly Services, Inc. 4,479 137,326 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 2,370,059 --------------- ROAD & RAIL 0.8% Yellow Roadway Corp.*+ 13,575 562,276 Swift Transportation Co., Inc.*+ 12,288 217,498 Werner Enterprises, Inc. 12,130 209,728 --------------- TOTAL ROAD & RAIL 989,502 --------------- CONSTRUCTION & ENGINEERING 0.7% Quanta Services, Inc.*+ 27,770 354,345 Granite Construction, Inc. 7,751 296,398 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Dycom Industries, Inc.*+ 11,450 $ 231,519 --------------- TOTAL CONSTRUCTION & ENGINEERING 882,262 --------------- TRADING COMPANIES & DISTRIBUTORS 0.6% GATX Corp.+ 11,711 463,170 United Rentals, Inc.*+ 15,703 309,506 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 772,676 --------------- INDUSTRIAL CONGLOMERATES 0.6% Teleflex, Inc.+ 9,558 673,839 --------------- TOTAL INDUSTRIAL CONGLOMERATES 673,839 --------------- BUILDING PRODUCTS 0.5% York International Corp. 9,912 555,766 --------------- TOTAL BUILDING PRODUCTS 555,766 --------------- MARINE 0.4% Alexander & Baldwin, Inc. 10,264 546,455 --------------- TOTAL MARINE 546,455 --------------- AIRLINES 0.4% AirTran Holdings, Inc.*+ 20,520 259,783 Alaska Air Group, Inc.*+ 6,426 186,740 --------------- TOTAL AIRLINES 446,523 --------------- ELECTRICAL EQUIPMENT 0.3% Thomas & Betts Corp.* 12,378 425,927 --------------- TOTAL ELECTRICAL EQUIPMENT 425,927 --------------- AEROSPACE & DEFENSE 0.1% Sequa Corp. -- Class A* 1,477 87,143 --------------- TOTAL AEROSPACE & DEFENSE 87,143 --------------- TOTAL INDUSTRIALS 11,462,858 --------------- MATERIALS 7.9% CHEMICALS 5.3% Lyondell Chemical Co.+ 48,140 1,377,767 Lubrizol Corp. 16,007 693,583 Valspar Corp.+ 23,800 532,168 RPM International, Inc. 27,716 509,974 FMC Corp.* 8,850 506,397 Cabot Corp. 14,573 481,055 Airgas, Inc. 15,660 464,006 Scotts Miracle-Gro Co. -- Class A 5,260 462,512 Cytec Industries, Inc. 9,317 404,171 Albemarle Corp. 9,022 340,129 Minerals Technologies, Inc.+ 4,729 270,546 Sensient Technologies Corp. 11,126 210,838 Ferro Corp. 9,889 181,167 --------------- TOTAL CHEMICALS 6,434,313 --------------- PAPER & FOREST PRODUCTS 0.7% Bowater, Inc.+ 13,182 372,655 Potlatch Corp.+ 6,861 357,595 Glatfelter 10,328 145,522 --------------- TOTAL PAPER & FOREST PRODUCTS 875,772 --------------- See Notes to Financial Statements. 62 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONTAINERS & PACKAGING 0.7% Sonoco Products Co.+ 23,269 $ 635,476 Longview Fibre Co. 11,999 233,861 --------------- TOTAL CONTAINERS & PACKAGING 869,337 --------------- CONSTRUCTION MATERIALS 0.7% Martin Marietta Materials, Inc. 10,913 856,234 --------------- TOTAL CONSTRUCTION MATERIALS 856,234 --------------- METALS & MINING 0.5% Worthington Industries, Inc. 16,740 352,042 Steel Dynamics, Inc.+ 9,020 306,319 --------------- TOTAL METALS & MINING 658,361 --------------- TOTAL MATERIALS 9,694,017 --------------- HEALTH CARE 7.2% HEALTH CARE PROVIDERS & SERVICES 3.9% Pacificare Health Systems, Inc.*+ 20,587 1,642,431 Omnicare, Inc.+ 24,830 1,396,191 Triad Hospitals, Inc.*+ 20,207 914,771 Community Health Systems, Inc.*+ 21,105 819,085 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 4,772,478 --------------- BIOTECHNOLOGY 1.9% Invitrogen Corp.*+ 12,494 939,924 Charles River Laboratories International, Inc.*+ 16,915 737,832 Millennium Pharmaceuticals, Inc.*+ 72,621 677,554 --------------- TOTAL BIOTECHNOLOGY 2,355,310 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 1.0% Advanced Medical Optics, Inc.* 15,560 590,502 Steris Corp. 16,040 381,591 Varian, Inc.*+ 7,540 258,773 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,230,866 --------------- PHARMACEUTICALS 0.4% Perrigo Co.+ 19,620 280,762 Par Pharmaceutical Cos., Inc.* 8,040 214,025 --------------- TOTAL PHARMACEUTICALS 494,787 --------------- TOTAL HEALTH CARE 8,853,441 --------------- CONSUMER STAPLES 3.2% FOOD PRODUCTS 2.2% Dean Foods Co.* 35,186 1,367,328 Smithfield Foods, Inc.* 23,302 691,603 J.M. Smucker Co.+ 13,703 665,144 --------------- TOTAL FOOD PRODUCTS 2,724,075 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ FOOD & DRUG RETAILING 0.5% BJ's Wholesale Club, Inc.*+ 15,984 $ 444,356 Ruddick Corp. 8,163 188,157 --------------- TOTAL FOOD & DRUG RETAILING 632,513 --------------- BEVERAGES 0.3% PepsiAmericas, Inc. 14,777 335,881 --------------- TOTAL BEVERAGES 335,881 --------------- TOBACCO 0.2% Universal Corp./Richmond VA 6,034 234,300 --------------- TOTAL TOBACCO 234,300 --------------- TOTAL CONSUMER STAPLES 3,926,769 --------------- TELECOMMUNICATION SERVICES 0.8% WIRELESS TELECOMMUNICATION SERVICES 0.8% Telephone & Data Systems, Inc.+ 24,172 942,708 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 942,708 --------------- TOTAL TELECOMMUNICATION SERVICES 942,708 --------------- TOTAL COMMON STOCKS (Cost $105,478,613) 122,589,500 --------------- FACE AMOUNT ----------- REPURCHASE AGREEMENTS 0.4% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 265,805 265,805 3.24% due 10/03/05 202,443 202,443 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $468,248) 468,248 --------------- SECURITIES LENDING COLLATERAL 23.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 28,753,596 28,753,596 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $28,753,596) 28,753,596 --------------- TOTAL INVESTMENTS 123.7% (Cost $134,700,457) $ 151,811,344 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (23.7)% $ (29,089,790) =============== NET ASSETS - 100.0% $ 122,721,554 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 63 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.6% FINANCIALS 35.8% BANKS 10.6% Bank of America Corp.+ 39,002 $ 1,641,984 Wells Fargo & Co.+ 16,346 957,385 Wachovia Corp.+ 15,354 730,697 U.S. Bancorp+ 17,712 497,353 SunTrust Banks, Inc. 3,414 237,102 BB&T Corp.+ 5,188 202,591 Fifth Third Bancorp+ 5,280 193,934 National City Corp. 5,509 184,221 PNC Financial Services Group, Inc. 2,890 167,678 Regions Financial Corp.+ 4,495 139,884 KeyCorp+ 4,018 129,581 North Fork Bancorporation, Inc. 4,683 119,417 Comerica, Inc. 1,629 95,948 AmSouth Bancorp+ 3,451 87,172 M&T Bank Corp. 802 84,779 Marshall & Ilsley Corp. 1,920 83,539 Synovus Financial Corp. 2,976 82,495 Zions Bancorporation+ 894 63,662 Compass Bancshares, Inc. 1,130 51,788 Huntington Bancshares, Inc. 2,151 48,333 First Horizon National Corp. 1,227 44,602 --------------- TOTAL BANKS 5,844,145 --------------- INSURANCE 8.5% American International Group, Inc.+ 25,187 1,560,587 MetLife, Inc.+ 7,387 368,094 Allstate Corp. 6,406 354,188 Prudential Financial, Inc.+ 4,875 329,355 St. Paul Travelers Cos., Inc. 6,538 293,360 AFLAC, Inc. 4,947 224,099 Hartford Financial Services Group, Inc.+ 2,829 218,314 Chubb Corp.+ 1,852 165,847 Marsh & McLennan Cos., Inc.+ 5,201 158,058 ACE Ltd. 2,715 127,795 Loews Corp.+ 1,318 121,796 Aon Corp. 3,064 98,293 XL Capital Ltd. 1,287 87,555 Lincoln National Corp.+ 1,657 86,197 MBIA, Inc.+ 1,297 78,624 Ambac Financial Group, Inc. 1,018 73,357 Cincinnati Financial Corp. 1,609 67,401 Jefferson-Pilot Corp.+ 1,260 64,474 SAFECO Corp. 1,136 60,640 UnumProvident Corp.+ 2,836 58,138 Torchmark Corp. 994 52,513 --------------- TOTAL INSURANCE 4,648,685 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ DIVERSIFIED FINANCIALS 6.7% Citigroup, Inc. 50,262 $ 2,287,926 J.P. Morgan Chase & Co. 34,151 1,158,744 Principal Financial Group, Inc. 2,606 123,446 CIT Group, Inc. 1,900 85,842 --------------- TOTAL DIVERSIFIED FINANCIALS 3,655,958 --------------- CAPITAL MARKETS 5.0% Morgan Stanley 10,553 569,229 Merrill Lynch & Co., Inc. 9,031 554,052 Goldman Sachs Group, Inc. 4,426 538,113 Lehman Brothers Holdings, Inc.+ 2,617 304,828 Bank of New York Co., Inc. 7,533 221,545 State Street Corp.+ 3,107 151,994 Mellon Financial Corp. 4,115 131,557 Bear Stearns Cos., Inc. 1,058 116,115 Northern Trust Corp.+ 1,752 88,564 E*Trade Financial Corp.* 3,656 64,346 Janus Capital Group, Inc. 2,111 30,504 --------------- TOTAL CAPITAL MARKETS 2,770,847 --------------- THRIFTS & MORTGAGE FINANCE 2.9% Fannie Mae 9,352 419,157 Freddie Mac 6,552 369,926 Washington Mutual, Inc.+ 8,547 335,213 Countrywide Financial Corp.+ 5,761 189,998 Golden West Financial Corp.+ 2,386 141,705 Sovereign Bancorp, Inc.+ 3,434 75,685 MGIC Investment Corp.+ 876 56,239 --------------- TOTAL THRIFTS & MORTGAGE FINANCE 1,587,923 --------------- REAL ESTATE 1.1% Equity Office Properties Trust+ 3,914 128,027 ProLogis+ 2,348 104,040 Equity Residential 2,709 102,536 Vornado Realty Trust 1,100 95,282 Archstone-Smith Trust 2,024 80,697 Plum Creek Timber Co., Inc. (REIT) 1,728 65,508 Apartment Investment & Management Co. -- Class A+ 881 34,165 --------------- TOTAL REAL ESTATE 610,255 --------------- CONSUMER FINANCE 1.0% MBNA Corp. 12,247 301,766 Capital One Financial Corp.+ 2,727 216,851 Providian Financial Corp.* 2,807 49,628 --------------- TOTAL CONSUMER FINANCE 568,245 --------------- TOTAL FINANCIALS 19,686,058 --------------- CONSUMER DISCRETIONARY 11.8% MEDIA 6.2% Time Warner, Inc. 45,577 825,399 Comcast Corp. -- Class A*+ 21,295 625,647 Viacom, Inc. -- Class B 15,394 508,156 See Notes to Financial Statements. 64 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ The Walt Disney Co. 19,557 $ 471,910 News Corp. -- Class A 23,765 370,496 Clear Channel Communications, Inc.+ 5,147 169,285 Gannett Co., Inc. 2,258 155,418 Tribune Co. 2,532 85,810 Univision Communications, Inc. -- Class A*+ 2,132 56,562 Interpublic Group of Cos., Inc.*+ 4,117 47,922 Knight-Ridder, Inc.+ 700 41,076 New York Times Co. -- Class A 1,370 40,758 --------------- TOTAL MEDIA 3,398,439 --------------- HOTELS, RESTAURANTS & LEISURE 1.4% McDonald's Corp. 12,145 406,736 Carnival Corp. 4,059 202,869 Starwood Hotels & Resorts Worldwide, Inc. 2,088 119,371 Wendy's International, Inc. 1,116 50,387 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 779,363 --------------- MULTILINE RETAIL 1.1% Federated Department Stores, Inc. 2,644 176,804 Kohl's Corp.* 3,278 164,490 Sears Holdings Corp.* 980 121,931 J.C. Penney Holding Co., Inc. 2,354 111,627 Family Dollar Stores, Inc. 1,510 30,004 Big Lots, Inc.* 1,107 12,166 Dillard's, Inc. -- Class A+ 574 11,985 --------------- TOTAL MULTILINE RETAIL 629,007 --------------- HOUSEHOLD DURABLES 0.8% D.R. Horton, Inc. 2,710 98,156 Pulte Homes, Inc. 2,024 86,870 Centex Corp.+ 1,167 75,365 KB Home+ 753 55,120 Whirlpool Corp. 650 49,250 Leggett & Platt, Inc. 1,765 35,653 Stanley Works 650 30,342 Snap-On, Inc. 589 21,275 --------------- TOTAL HOUSEHOLD DURABLES 452,031 --------------- AUTOMOBILES 0.6% Ford Motor Co.+ 18,011 177,588 General Motors Corp.+ 5,513 168,753 --------------- TOTAL AUTOMOBILES 346,341 --------------- SPECIALTY RETAIL 0.6% The Gap, Inc. 5,650 98,479 Office Depot, Inc.*+ 2,951 87,645 Tiffany & Co. 1,353 53,809 AutoNation, Inc.*+ 1,683 33,610 Circuit City Stores, Inc. 1,570 26,941 OfficeMax, Inc. 673 21,314 --------------- TOTAL SPECIALTY RETAIL 321,798 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ LEISURE EQUIPMENT & PRODUCTS 0.4% Eastman Kodak Co. 2,712 $ 65,983 Mattel, Inc.+ 3,881 64,735 Brunswick Corp. 900 33,957 Hasbro, Inc. 1,720 33,798 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 198,473 --------------- TEXTILES & APPAREL 0.3% VF Corp.+ 863 50,028 Liz Claiborne, Inc. 1,019 40,067 Jones Apparel Group, Inc. 1,103 31,436 Reebok International Ltd. 476 26,927 --------------- TOTAL TEXTILES & APPAREL 148,458 --------------- AUTO COMPONENTS 0.3% Johnson Controls, Inc. 1,777 110,263 Delphi Corp. 5,441 15,017 Dana Corp.+ 1,403 13,202 Cooper Tire & Rubber Co.+ 529 8,078 --------------- TOTAL AUTO COMPONENTS 146,560 --------------- DISTRIBUTORS 0.1% Genuine Parts Co. 1,666 71,472 --------------- TOTAL DISTRIBUTORS 71,472 --------------- TOTAL CONSUMER DISCRETIONARY 6,491,942 --------------- ENERGY 9.9% OIL & GAS 8.8% Chevron Corp. 21,825 1,412,732 ConocoPhillips 13,576 949,098 Valero Energy Corp.+ 2,858 323,126 Occidental Petroleum Corp. 3,750 320,363 Devon Energy Corp.+ 4,402 302,153 Burlington Resources, Inc. 3,664 297,956 Marathon Oil Corp. 3,431 236,499 Apache Corp. 3,084 231,978 Anadarko Petroleum Corp. 2,224 212,948 Williams Cos., Inc. 5,552 139,078 Kerr-McGee Corp. 1,124 109,152 Amerada Hess Corp. 774 106,425 El Paso Corp.+ 6,246 86,819 Murphy Oil Corp. 1,600 79,792 --------------- TOTAL OIL & GAS 4,808,119 --------------- ENERGY EQUIPMENT & SERVICES 1.1% Transocean, Inc.* 3,073 188,406 National-Oilwell Varco, Inc.* 1,644 108,175 Nabors Industries Ltd.*+ 1,493 107,242 Noble Corp. 1,304 89,272 Weatherford International Ltd.*+ 1,300 89,258 Rowan Cos., Inc. 1,018 36,129 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 618,482 --------------- TOTAL ENERGY 5,426,601 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 65 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INDUSTRIALS 8.1% AEROSPACE & DEFENSE 1.9% Honeywell International, Inc. 8,279 $ 310,463 General Dynamics Corp.+ 1,886 225,471 Northrop Grumman Corp. 3,344 181,747 Raytheon Co. 4,412 167,744 L-3 Communications Holdings, Inc.+ 1,086 85,870 Goodrich Corp. 1,101 48,818 --------------- TOTAL AEROSPACE & DEFENSE 1,020,113 --------------- MACHINERY 1.8% Illinois Tool Works, Inc. 2,020 166,307 Deere & Co.+ 2,244 137,333 Ingersoll-Rand Co. -- Class A 3,194 122,107 Paccar, Inc. 1,660 112,697 ITT Industries, Inc. 915 103,944 Eaton Corp. 1,400 88,970 Dover Corp. 1,954 79,704 Parker Hannifin Corp. 1,101 70,805 Cummins, Inc. 487 42,851 Pall Corp. 1,225 33,687 Navistar International Corp.* 540 17,512 --------------- TOTAL MACHINERY 975,917 --------------- ROAD & RAIL 1.2% Burlington Northern Santa Fe Corp. 3,557 212,708 Union Pacific Corp. 2,449 175,593 Norfolk Southern Corp. 3,891 157,819 CSX Corp. 2,091 97,190 --------------- TOTAL ROAD & RAIL 643,310 --------------- INDUSTRIAL CONGLOMERATES 1.1% Tyco International Ltd.+ 19,604 545,971 Textron, Inc. 1,248 89,507 --------------- TOTAL INDUSTRIAL CONGLOMERATES 635,478 --------------- COMMERCIAL SERVICES & SUPPLIES 0.9% Cendant Corp. 10,159 209,682 Waste Management, Inc. 5,339 152,749 RR Donnelley & Sons Co. 2,067 76,624 Cintas Corp.+ 1,300 53,365 Allied Waste Industries, Inc.* 2,101 17,753 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 510,173 --------------- AIR FREIGHT & COURIERS 0.5% FedEx Corp. 2,910 253,548 Ryder System, Inc. 626 21,422 --------------- TOTAL AIR FREIGHT & COURIERS 274,970 --------------- BUILDING PRODUCTS 0.2% Masco Corp.+ 4,191 128,580 --------------- TOTAL BUILDING PRODUCTS 128,580 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ ELECTRICAL EQUIPMENT 0.2% Cooper Industries Ltd. -- Class A 864 $ 59,737 American Power Conversion Corp. 1,603 41,518 --------------- TOTAL ELECTRICAL EQUIPMENT 101,255 --------------- AIRLINES 0.2% Southwest Airlines Co. 6,716 99,732 --------------- TOTAL AIRLINES 99,732 --------------- TRADING COMPANIES & DISTRIBUTORS 0.1% W.W. Grainger, Inc. 754 47,442 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 47,442 --------------- TOTAL INDUSTRIALS 4,436,970 --------------- HEALTH CARE 7.7% HEALTH CARE PROVIDERS & SERVICES 3.5% WellPoint, Inc.* 5,828 441,879 Cardinal Health, Inc.+ 4,157 263,720 Aetna, Inc. 2,732 235,334 Caremark Rx, Inc.* 4,371 218,244 Medco Health Solutions, Inc.* 2,849 156,211 McKesson Corp. 2,914 138,269 CIGNA Corp. 1,167 137,543 AmerisourceBergen Corp. 1,000 77,300 Humana, Inc.* 1,581 75,698 Laboratory Corporation of America Holdings* 1,250 60,887 Health Management Associates, Inc. -- Class A+ 2,344 55,014 Tenet Healthcare Corp.*+ 4,421 49,648 Manor Care, Inc.+ 778 29,883 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 1,939,630 --------------- PHARMACEUTICALS 3.5% Pfizer, Inc. 71,594 1,787,702 Mylan Laboratories, Inc. 2,099 40,427 Watson Pharmaceuticals, Inc.*+ 979 35,841 King Pharmaceuticals, Inc.* 2,314 35,590 --------------- TOTAL PHARMACEUTICALS 1,899,560 --------------- BIOTECHNOLOGY 0.4% Biogen Idec, Inc.* 3,200 126,336 Applera Corp. - Applied Biosystems Group 1,864 43,319 Chiron Corp.* 990 43,184 --------------- TOTAL BIOTECHNOLOGY 212,839 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 0.3% Fisher Scientific International, Inc.*+ 1,201 74,522 Thermo Electron Corp.* 1,573 48,606 Bausch & Lomb, Inc.+ 552 44,535 PerkinElmer, Inc. 1,190 24,240 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 191,903 --------------- TOTAL HEALTH CARE 4,243,932 --------------- See Notes to Financial Statements. 66 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INFORMATION TECHNOLOGY 7.3% COMPUTERS & PERIPHERALS 2.4% Hewlett-Packard Co. 27,780 $ 811,176 EMC Corp./MA*+ 23,464 303,624 Sun Microsystems, Inc.* 33,095 129,733 NCR Corp.* 1,742 55,587 QLogic Corp.* 810 27,702 --------------- TOTAL COMPUTERS & PERIPHERALS 1,327,822 --------------- COMMUNICATIONS EQUIPMENT 1.4% Motorola, Inc.+ 23,945 528,945 Scientific-Atlanta, Inc. 1,414 53,039 Comverse Technology, Inc.*+ 1,931 50,727 Tellabs, Inc.* 4,390 46,183 JDS Uniphase Corp.*+ 16,000 35,520 ADC Telecommunications, Inc.* 1,123 25,672 Andrew Corp.* 1,580 17,617 CIENA Corp.* 5,493 14,502 --------------- TOTAL COMMUNICATIONS EQUIPMENT 772,205 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1.4% Applied Materials, Inc. 15,754 267,188 Advanced Micro Devices, Inc.*+ 3,781 95,281 Freescale Semiconductor, Inc. -- Class B* 3,973 93,683 KLA-Tencor Corp.+ 1,860 90,694 Micron Technology, Inc.*+ 5,843 77,712 LSI Logic Corp.*+ 3,685 36,297 Novellus Systems, Inc.* 1,320 33,106 Teradyne, Inc.* 1,859 30,673 Applied Micro Circuits Corp.* 2,940 8,820 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 733,454 --------------- IT CONSULTING & SERVICES 0.8% Electronic Data Systems Corp. 5,053 113,389 Computer Sciences Corp.* 1,730 81,846 Fiserv, Inc.*+ 1,771 81,236 Affiliated Computer Services, Inc. -- Class A*+ 1,140 62,244 Sabre Holdings Corp. 1,277 25,898 Unisys Corp.* 3,208 21,301 Convergys Corp.*+ 1,346 19,342 --------------- TOTAL IT CONSULTING & SERVICES 405,256 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.6% Agilent Technologies, Inc.* 4,877 159,722 Jabil Circuit, Inc.*+ 1,627 50,307 Solectron Corp.* 9,431 36,875 Molex, Inc. 1,324 35,324 Symbol Technologies, Inc. 2,320 22,458 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Sanmina-SCI Corp.* 4,997 $ 21,437 Tektronix, Inc. 785 19,805 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 345,928 --------------- SOFTWARE 0.5% Computer Associates International, Inc. 4,400 122,364 Siebel Systems, Inc. 5,096 52,642 BMC Software, Inc.* 2,077 43,825 Compuware Corp.* 3,686 35,017 Novell, Inc.* 3,634 27,073 --------------- TOTAL SOFTWARE 280,921 --------------- OFFICE ELECTRONICS 0.2% Xerox Corp.*+ 9,338 127,464 --------------- TOTAL OFFICE ELECTRONICS 127,464 --------------- TOTAL INFORMATION TECHNOLOGY 3,993,050 --------------- UTILITIES 6.4% ELECTRIC UTILITIES 3.2% Exelon Corp.+ 6,508 347,787 Southern Co.+ 7,305 261,227 FPL Group, Inc. 3,711 176,644 FirstEnergy Corp. 3,096 161,363 American Electric Power Co., Inc.+ 3,863 153,361 Entergy Corp. 2,008 149,235 Edison International 3,067 145,008 PPL Corp.+ 3,584 115,871 Progress Energy, Inc.+ 2,355 105,386 Cinergy Corp. 1,888 83,846 Allegheny Energy, Inc.*+ 1,580 48,538 Pinnacle West Capital Corp. 904 39,848 --------------- TOTAL ELECTRIC UTILITIES 1,788,114 --------------- MULTI-UTILITIES 3.1% Dominion Resources, Inc./VA+ 3,220 277,371 Duke Energy Corp.+ 9,012 262,880 Public Service Enterprise Group, Inc. 2,239 144,102 PG&E Corp. 3,664 143,812 Sempra Energy 2,439 114,779 Consolidated Edison, Inc. 2,320 112,636 Constellation Energy Group, Inc. 1,728 106,445 Ameren Corp.+ 1,959 104,787 DTE Energy Co. 1,664 76,311 Xcel Energy, Inc.+ 3,780 74,126 NiSource, Inc.+ 2,716 65,863 KeySpan Corp. 1,654 60,834 CenterPoint Energy, Inc. 2,940 43,718 TECO Energy, Inc.+ 1,977 35,625 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 67 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CMS Energy Corp.*+ 2,111 $ 34,726 Calpine Corp.*+ 5,531 14,325 Dynegy, Inc. -- Class A* 2,852 13,433 --------------- TOTAL MULTI-UTILITIES 1,685,773 --------------- GAS UTILITIES 0.1% Peoples Energy Corp. 450 17,721 Nicor, Inc.+ 392 16,476 --------------- TOTAL GAS UTILITIES 34,197 --------------- TOTAL UTILITIES 3,508,084 --------------- TELECOMMUNICATION SERVICES 5.9% DIVERSIFIED TELECOMMUNICATION SERVICES 4.2% Verizon Communications, Inc. 26,788 875,700 SBC Communications, Inc.+ 32,110 769,677 BellSouth Corp.+ 17,751 466,851 AT&T Corp.+ 7,790 154,242 CenturyTel, Inc.+ 1,278 44,704 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 2,311,174 --------------- WIRELESS TELECOMMUNICATION SERVICES 1.7% Sprint Nextel Corp.+ 28,463 676,850 Alltel Corp.+ 3,579 233,029 --------------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 909,879 --------------- TOTAL TELECOMMUNICATION SERVICES 3,221,053 --------------- MATERIALS 4.2% CHEMICALS 1.8% Dow Chemical Co. 9,360 390,031 Monsanto Co.+ 2,486 155,997 Air Products & Chemicals, Inc. 2,132 117,558 PPG Industries, Inc. 1,646 97,427 Rohm & Haas Co. 1,388 57,088 Sigma-Aldrich Corp. 660 42,280 Ashland, Inc. 747 41,264 Eastman Chemical Co. 789 37,059 Engelhard Corp. 1,103 30,785 --------------- TOTAL CHEMICALS 969,489 --------------- METALS & MINING 1.2% Alcoa, Inc. 8,510 207,814 Newmont Mining Corp.+ 4,371 206,180 Phelps Dodge Corp.+ 894 116,157 Nucor Corp.+ 1,521 89,724 United States Steel Corp.+ 1,110 47,009 --------------- TOTAL METALS & MINING 666,884 --------------- PAPER & FOREST PRODUCTS 0.9% Weyerhaeuser Co. 2,332 160,325 International Paper Co.+ 4,772 142,206 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Georgia-Pacific Corp. 2,485 $ 84,639 MeadWestvaco Corp. 1,745 48,197 Louisiana-Pacific Corp.+ 1,039 28,770 --------------- TOTAL PAPER & FOREST PRODUCTS 464,137 --------------- CONTAINERS & PACKAGING 0.2% Temple-Inland, Inc. 1,078 44,036 Sealed Air Corp.*+ 760 36,069 Bemis Co.+ 1,018 25,145 Pactiv Corp.* 1,390 24,353 --------------- TOTAL CONTAINERS & PACKAGING 129,603 --------------- CONSTRUCTION MATERIALS 0.1% Vulcan Materials Co.+ 977 72,503 --------------- TOTAL CONSTRUCTION MATERIALS 72,503 --------------- TOTAL MATERIALS 2,302,616 --------------- CONSUMER STAPLES 2.5% FOOD & DRUG RETAILING 1.5% CVS Corp.+ 7,902 229,237 Costco Wholesale Corp.+ 4,686 201,920 Kroger Co.* 7,010 144,336 Safeway, Inc.+ 4,390 112,384 Albertson's, Inc.+ 3,451 88,518 Supervalu, Inc. 1,259 39,180 --------------- TOTAL FOOD & DRUG RETAILING 815,575 --------------- FOOD PRODUCTS 0.6% Archer-Daniels-Midland Co. 6,307 155,531 ConAgra Foods, Inc.+ 5,054 125,086 Tyson Foods, Inc. -- Class A 2,400 43,320 --------------- TOTAL FOOD PRODUCTS 323,937 --------------- BEVERAGES 0.3% Coca-Cola Enterprises, Inc. 2,847 55,516 Constellation Brands, Inc. -- Class A* 1,850 48,100 Molson Coors Brewing Co. -- Class B 570 36,486 --------------- TOTAL BEVERAGES 140,102 --------------- TOBACCO 0.1% Reynolds American, Inc. 824 68,408 --------------- TOTAL TOBACCO 68,408 --------------- PERSONAL PRODUCTS 0.0% Alberto-Culver Co. -- Class B+ 673 30,117 --------------- TOTAL PERSONAL PRODUCTS 30,117 --------------- TOTAL CONSUMER STAPLES 1,378,139 --------------- TOTAL COMMON STOCKS (Cost $48,716,255) 54,688,445 --------------- See Notes to Financial Statements. 68 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP VALUE FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 0.6% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 171,974 $ 171,974 3.24% due 10/03/05 130,978 130,978 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $302,952) 302,952 --------------- SECURITIES LENDING COLLATERAL 16.0% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 8,782,960 8,782,960 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $8,782,960) 8,782,960 --------------- TOTAL INVESTMENTS 116.2% (Cost $57,802,167) $ 63,774,357 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (16.2)% $ (8,884,092) =============== NET ASSETS - 100.0% $ 54,890,265 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. REIT--REAL ESTATE INVESTMENT TRUST. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 69 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.6% HEALTH CARE 20.3% HEALTH CARE EQUIPMENT & SUPPLIES 10.3% Respironics, Inc.* 29,846 $ 1,258,904 ResMed, Inc.*+ 14,618 1,164,324 Idexx Laboratories, Inc.* 13,520 904,218 Mentor Corp.+ 15,548 855,295 Sybron Dental Specialties, Inc.* 16,713 694,927 American Medical Systems Holdings, Inc.* 28,716 578,627 Hologic, Inc.* 9,158 528,874 Haemonetics Corp./MA* 10,933 519,645 Immucor, Inc.*+ 18,833 516,777 Diagnostic Products Corp. 9,750 514,117 Dionex Corp.* 8,421 456,839 Biosite, Inc.* 7,117 440,258 ArthroCare Corp.* 10,278 413,381 Advanced Neuromodulation Systems, Inc.*+ 8,320 394,867 PolyMedica Corp. 10,038 350,728 Intermagnetics General Corp.* 10,720 299,517 Integra LifeSciences Holdings Corp.*+ 7,611 291,197 Cyberonics, Inc.*+ 9,074 270,768 DJ Orthopedics, Inc.*+ 9,040 261,618 SurModics, Inc.*+ 6,469 250,286 Merit Medical Systems, Inc.* 11,181 198,351 ICU Medical, Inc.*+ 5,780 166,233 Kensey Nash Corp.*+ 4,166 127,730 Possis Medical, Inc.* 7,179 78,682 BioLase Technology, Inc. 9,564 68,191 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 11,604,354 --------------- HEALTH CARE PROVIDERS & SERVICES 8.2% Pharmaceutical Product Development, Inc.* 20,818 1,197,243 Cerner Corp.*+ 12,524 1,088,711 Pediatrix Medical Group, Inc.*+ 9,850 756,677 Sierra Health Services, Inc.*+ 10,518 724,375 United Surgical Partners International, Inc.* 18,360 718,060 American Healthways, Inc.*+ 13,720 581,728 Owens & Minor, Inc. 16,550 485,742 Chemed Corp. 10,660 462,004 Priority Healthcare Corp. -- Class B* 16,070 447,710 Centene Corp.* 17,613 440,853 AMERIGROUP Corp.* 21,326 407,753 Dendrite International, Inc.* 17,647 354,528 AmSurg Corp.*+ 12,292 336,309 LCA-Vision, Inc.+ 8,522 316,337 LabOne, Inc.* 7,235 314,723 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Amedisys, Inc.*+ 6,465 $ 252,135 Odyssey HealthCare, Inc.* 14,348 243,486 CryoLife, Inc.* 8,885 61,751 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 9,190,125 --------------- PHARMACEUTICALS 1.6% Medicis Pharmaceutical Corp. -- Class A+ 22,558 734,489 MGI Pharma, Inc.* 29,874 696,363 Connetics Corp.*+ 14,499 245,178 Noven Pharmaceuticals, Inc.* 9,758 136,612 --------------- TOTAL PHARMACEUTICALS 1,812,642 --------------- BIOTECHNOLOGY 0.2% Enzo Biochem, Inc.* 11,351 174,351 --------------- TOTAL BIOTECHNOLOGY 174,351 --------------- TOTAL HEALTH CARE 22,781,472 --------------- CONSUMER DISCRETIONARY 19.5% HOTELS, RESTAURANTS & LEISURE 5.2% Sonic Corp.* 24,805 678,417 Panera Bread Co. -- Class A* 12,815 655,872 Argosy Gaming Co.* 12,244 575,345 P.F. Chang's China Bistro, Inc.*+ 10,908 489,006 CEC Entertainment, Inc.* 14,560 462,426 Jack in the Box, Inc.*+ 14,760 441,472 Shuffle Master, Inc.*+ 14,464 382,283 Rare Hospitality International, Inc.* 14,117 362,807 Triarc Cos. -- Class B 22,480 343,270 IHOP Corp. 8,052 328,038 Red Robin Gourmet Burgers, Inc.*+ 5,970 273,665 WMS Industries, Inc.*+ 9,440 265,547 Papa John's International, Inc.* 5,059 253,557 Steak n Shake Co.* 11,590 210,358 Bally Total Fitness Holding Corp.* 14,176 63,367 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 5,785,430 --------------- SPECIALTY RETAIL 5.1% Tractor Supply Co.*+ 13,774 628,783 GameStop Corp. -- Class B* 21,500 610,385 Men's Wearhouse, Inc.* 22,360 597,012 Guitar Center, Inc.*+ 10,764 594,280 Aaron Rents, Inc. 18,645 394,342 Genesco, Inc.* 9,406 350,279 Hibbett Sporting Goods, Inc.* 14,796 329,200 Children's Place Retail Stores, Inc.* 8,839 315,022 Electronics Boutique Holdings Corp.* 4,829 303,454 Select Comfort Corp.*+ 14,919 298,082 HOT Topic, Inc.* 18,752 288,031 Finish Line, Inc. -- Class A 18,320 267,289 Cato Corp. -- Class A 13,003 259,150 Stein Mart, Inc. 11,078 224,883 SEE NOTES TO FINANCIAL STATEMENTS. 70 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Christopher & Banks Corp. 14,871 $ 206,261 Movie Gallery, Inc.+ 10,650 110,654 --------------- TOTAL SPECIALTY RETAIL 5,777,107 --------------- HOUSEHOLD DURABLES 3.2% NVR, Inc.* 2,234 1,976,978 Meritage Homes Corp.* 9,495 727,887 Champion Enterprises, Inc.*+ 31,449 464,816 Ethan Allen Interiors, Inc. 14,718 461,409 --------------- TOTAL HOUSEHOLD DURABLES 3,631,090 --------------- TEXTILES & APPAREL 2.1% Quiksilver, Inc.*+ 48,670 703,282 Wolverine World Wide, Inc. 23,875 502,569 Phillips-Van Heusen Corp. 15,103 468,495 Fossil, Inc.*+ 20,296 369,184 K-Swiss, Inc. -- Class A 10,774 318,587 --------------- TOTAL TEXTILES & APPAREL 2,362,117 --------------- LEISURE EQUIPMENT & PRODUCTS 1.7% Polaris Industries, Inc.+ 17,440 864,152 SCP Pool Corp. 21,850 763,220 Nautilus, Inc.+ 13,950 307,877 --------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 1,935,249 --------------- MEDIA 0.9% Arbitron, Inc. 13,118 522,621 Advo, Inc. 12,992 406,520 Thomas Nelson, Inc. 4,552 85,395 --------------- TOTAL MEDIA 1,014,536 --------------- DISTRIBUTORS 0.5% Building Material Holding Corp. 5,900 549,821 --------------- TOTAL DISTRIBUTORS 549,821 --------------- AUTOMOBILES 0.4% Winnebago Industries, Inc. 13,642 395,209 --------------- TOTAL AUTOMOBILES 395,209 --------------- COMMERCIAL SERVICES & SUPPLIES 0.3% Pre-Paid Legal Services, Inc.+ 4,235 163,895 Vertrue, Inc.* 4,089 148,635 CPI Corp. 2,758 48,513 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 361,043 --------------- AUTO COMPONENTS 0.1% Midas, Inc.* 5,196 103,296 --------------- TOTAL AUTO COMPONENTS 103,296 --------------- TOTAL CONSUMER DISCRETIONARY 21,914,898 --------------- INDUSTRIALS 15.6% MACHINERY 4.9% Oshkosh Truck Corp. 30,414 1,312,668 IDEX Corp. 21,411 911,038 JLG Industries, Inc. 21,190 775,342 Toro Co. 17,431 640,764 Clarcor, Inc. 21,380 614,034 Mueller Industries, Inc. 15,210 422,382 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Kaydon Corp.+ 11,658 $ 331,204 Wabash National Corp.+ 12,964 254,872 ASV, Inc.*+ 7,360 166,704 Milacron, Inc.* 20,744 36,924 --------------- TOTAL MACHINERY 5,465,932 --------------- COMMERCIAL SERVICES & SUPPLIES 3.1% Waste Connections, Inc.*+ 19,470 683,007 Brady Corp. -- Class A+ 20,428 632,042 Labor Ready, Inc.* 22,038 565,275 John H. Harland Co. 11,632 516,461 Watson Wyatt & Co., Holdings 17,307 466,424 Administaff, Inc. 9,053 359,766 Healthcare Services Group 11,495 221,279 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 3,444,254 --------------- AEROSPACE & DEFENSE 2.1% Engineered Support Systems, Inc. 17,285 709,376 Teledyne Technologies, Inc.* 13,843 477,168 Gencorp, Inc.* 22,730 423,914 Ceradyne, Inc.* 10,225 375,053 Mercury Computer Systems, Inc.*+ 8,715 228,769 EDO Corp. 6,155 184,835 --------------- TOTAL AEROSPACE & DEFENSE 2,399,115 --------------- ROAD & RAIL 1.8% Landstar System, Inc. 24,296 972,569 Knight Transportation, Inc. 15,829 385,594 Heartland Express, Inc.+ 18,679 379,931 Old Dominion Freight Line, Inc.* 7,860 263,231 --------------- TOTAL ROAD & RAIL 2,001,325 --------------- ELECTRICAL EQUIPMENT 1.6% Roper Industries, Inc.+ 35,488 1,394,324 Baldor Electric Co. 11,663 295,657 Vicor Corp. 7,970 120,745 --------------- TOTAL ELECTRICAL EQUIPMENT 1,810,726 --------------- BUILDING PRODUCTS 1.3% Simpson Manufacturing Co., Inc.+ 15,180 594,145 Lennox International, Inc. 20,720 567,935 ElkCorp 7,499 268,240 --------------- TOTAL BUILDING PRODUCTS 1,430,320 --------------- TRADING COMPANIES & DISTRIBUTORS 0.4% Watsco, Inc.+ 9,820 521,540 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 521,540 --------------- AIR FREIGHT & COURIERS 0.4% Forward Air Corp. 13,071 481,536 --------------- TOTAL AIR FREIGHT & COURIERS 481,536 --------------- TOTAL INDUSTRIALS 17,554,748 --------------- INFORMATION TECHNOLOGY 15.3% SOFTWARE 5.2% Hyperion Solutions Corp.*+ 16,663 810,655 Micros Systems, Inc.*+ 15,954 697,987 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 71 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Take-Two Interactive Software, Inc.*+ 29,402 $ 649,490 Kronos, Inc./MA* 13,131 586,168 Ansys, Inc.*+ 13,152 506,220 Factset Research Systems, Inc. 13,911 490,224 Progress Software Corp.* 15,421 489,925 Filenet Corp.* 17,160 478,764 Manhattan Associates, Inc.* 11,859 275,129 SS&C Technologies Co. 7,080 259,411 Serena Software, Inc.*+ 11,944 238,044 Sonic Solutions, Inc.* 10,093 217,000 Radiant Systems, Inc.* 9,360 96,595 --------------- TOTAL SOFTWARE 5,795,612 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 3.5% Flir Systems, Inc.*+ 28,865 853,827 Trimble Navigation Ltd.* 22,198 747,851 Cognex Corp. 19,493 586,154 Itron, Inc.* 10,010 457,057 MTS Systems Corp. 8,210 310,092 Rogers Corp.* 6,737 260,722 Littelfuse, Inc.* 9,266 260,652 Scansource, Inc.* 5,287 257,688 Daktronics, Inc. 6,494 155,726 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 3,889,769 --------------- IT CONSULTING & SERVICES 2.2% Global Payments, Inc.+ 13,677 1,062,977 CACI International, Inc. -- Class A*+ 12,463 755,258 Talx Corp. 8,715 285,765 Mantech International Corp. -- Class A* 7,340 193,849 iPayment Holdings, Inc.* 5,100 192,984 --------------- TOTAL IT CONSULTING & SERVICES 2,490,833 --------------- INTERNET SOFTWARE & SERVICES 1.5% Websense, Inc.* 9,921 508,054 j2 Global Communications, Inc.*+ 10,159 410,627 Digital Insight Corp.* 14,110 367,707 WebEx Communications, Inc.*+ 14,355 351,841 Zix Corp.*+ 11,726 23,452 --------------- TOTAL INTERNET SOFTWARE & SERVICES 1,661,681 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1.4% Microsemi Corp.*+ 26,025 664,679 ATMI, Inc.* 15,603 483,693 Power Integrations, Inc.* 12,172 264,741 Kulicke & Soffa Industries, Inc.* 21,532 156,107 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1,569,220 --------------- COMPUTERS & PERIPHERALS 0.8% Avid Technology, Inc.*+ 17,130 709,182 Synaptics, Inc.*+ 10,034 188,639 --------------- TOTAL COMPUTERS & PERIPHERALS 897,821 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMUNICATIONS EQUIPMENT 0.7% Comtech Telecommunications Corp.* 8,030 $ 333,004 Netgear, Inc.*+ 13,540 325,772 Harmonic, Inc.* 30,501 177,516 --------------- TOTAL COMMUNICATIONS EQUIPMENT 836,292 --------------- TOTAL INFORMATION TECHNOLOGY 17,141,228 --------------- ENERGY 12.7% OIL & GAS 8.5% Southwestern Energy Co.* 33,972 2,493,545 Massey Energy Co.+ 31,839 1,626,018 Vintage Petroleum, Inc. 22,778 1,040,043 Frontier Oil Corp. 23,250 1,031,138 Cabot Oil & Gas Corp. 20,340 1,027,373 St. Mary Land & Exploration Co. 23,366 855,196 Penn Virginia Corp. 7,695 444,078 Remington Oil & Gas Corp.* 9,720 403,380 World Fuel Services Corp. 11,245 364,900 Petroleum Development Corp.* 6,864 263,166 --------------- TOTAL OIL & GAS 9,548,837 --------------- ENERGY EQUIPMENT & SERVICES 4.2% Unit Corp.* 18,999 1,050,265 Cal Dive International, Inc.*+ 16,075 1,019,316 Lone Star Technologies, Inc.*+ 12,448 691,984 Hydril*+ 8,115 557,014 CARBO Ceramics, Inc. 8,224 542,702 Atwood Oceanics, Inc.*+ 5,540 466,523 Tetra Technologies, Inc.* 14,148 441,700 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 4,769,504 --------------- TOTAL ENERGY 14,318,341 --------------- FINANCIALS 7.8% BANKS 3.7% East-West Bancorp, Inc. 23,183 789,149 Hudson United Bancorp 18,420 779,718 First Midwest Bancorp, Inc./IL+ 18,778 699,293 UCBH Holdings, Inc.+ 38,077 697,571 Republic Bancorp, Inc./MI 28,683 405,578 TrustCo Bank Corp./NY+ 31,079 389,420 PrivateBancorp, Inc. 7,239 248,153 Nara Bancorp, Inc. 8,120 121,394 --------------- TOTAL BANKS 4,130,276 --------------- REAL ESTATE 2.9% Shurgard Storage Centers, Inc. -- Class A 19,450 1,086,671 Essex Property Trust, Inc.+ 9,574 861,660 Kilroy Realty Corp. 11,988 671,688 Eastgroup Properties, Inc. 9,090 397,687 Acadia Realty Trust 13,010 234,050 --------------- TOTAL REAL ESTATE 3,251,756 --------------- See Notes to Financial Statements. 72 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INSURANCE 1.1% Philadelphia Consolidated Holding Co.*+ 7,603 $ 645,494 Zenith National Insurance Corp. 9,530 597,436 --------------- TOTAL INSURANCE 1,242,930 --------------- CONSUMER FINANCE 0.1% World Acceptance Corp.* 7,726 196,318 --------------- TOTAL CONSUMER FINANCE 196,318 --------------- TOTAL FINANCIALS 8,821,280 --------------- MATERIALS 3.4% CONSTRUCTION MATERIALS 1.7% Florida Rock Industries, Inc.+ 19,598 1,256,036 Headwaters, Inc.*+ 17,234 644,551 --------------- TOTAL CONSTRUCTION MATERIALS 1,900,587 --------------- METALS & MINING 0.9% Cleveland-Cliffs, Inc.+ 9,075 790,523 Amcol International Corp. 9,095 173,442 --------------- TOTAL METALS & MINING 963,965 --------------- CHEMICALS 0.6% Georgia Gulf Corp.+ 14,180 341,454 MacDermid, Inc. 10,356 271,949 Omnova Solutions, Inc.* 16,936 74,010 --------------- TOTAL CHEMICALS 687,413 --------------- PAPER & FOREST PRODUCTS 0.2% Deltic Timber Corp. 5,110 235,316 --------------- TOTAL PAPER & FOREST PRODUCTS 235,316 --------------- TOTAL MATERIALS 3,787,281 --------------- CONSUMER STAPLES 2.4% FOOD PRODUCTS 1.2% Flowers Foods, Inc. 21,660 590,885 Delta & Pine Land Co. 15,018 396,625 Lance, Inc. 12,386 216,260 Peet's Coffee & Tea, Inc.* 5,790 177,290 --------------- TOTAL FOOD PRODUCTS 1,381,060 --------------- FOOD & DRUG RETAILING 0.7% United Natural Foods, Inc.*+ 17,024 601,969 Great Atlantic & Pacific Tea Co.* 7,050 199,938 --------------- TOTAL FOOD & DRUG RETAILING 801,907 --------------- PERSONAL PRODUCTS 0.3% USANA Health Sciences, Inc.*+ 4,260 203,202 Natures Sunshine Products, Inc. 5,014 116,525 --------------- TOTAL PERSONAL PRODUCTS 319,727 --------------- HOUSEHOLD PRODUCTS 0.2% WD-40 Co. 6,873 182,203 --------------- TOTAL HOUSEHOLD PRODUCTS 182,203 --------------- TOTAL CONSUMER STAPLES 2,684,897 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ UTILITIES 2.3% GAS UTILITIES 2.3% Energen Corp. 30,435 $ 1,316,618 UGI Corp. 43,390 1,221,429 --------------- TOTAL GAS UTILITIES 2,538,047 --------------- TOTAL UTILITIES 2,538,047 --------------- TELECOMMUNICATION SERVICES 0.3% DIVERSIFIED TELECOMMUNICATION SERVICES 0.3% Commonwealth Telephone Enterprises, Inc. 9,052 341,260 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 341,260 --------------- TOTAL TELECOMMUNICATION SERVICES 341,260 --------------- TOTAL COMMON STOCKS (Cost $103,090,557) 111,883,452 --------------- FACE AMOUNT ----------- REPURCHASE AGREEMENTS 0.3% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 191,436 191,436 3.24% due 10/03/05 145,802 145,802 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $337,238) 337,238 --------------- SECURITIES LENDING COLLATERAL 11.9% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 13,293,323 13,293,323 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $13,293,323) 13,293,323 --------------- TOTAL INVESTMENTS 111.8% (Cost $116,721,118) $ 125,514,013 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (11.8)% $ (13,215,602) =============== NET ASSETS - 100.0% $ 112,298,411 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 73 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 100.8% CONSUMER DISCRETIONARY 22.8% SPECIALTY RETAIL 8.9% Chico's FAS, Inc.*+ 13,914 $ 512,035 Michaels Stores, Inc. 10,428 344,750 Williams-Sonoma, Inc.*+ 8,960 343,616 Abercrombie & Fitch Co. -- Class A 6,739 335,939 Advance Auto Parts, Inc.*+ 8,433 326,169 Ross Stores, Inc. 11,245 266,506 CarMax, Inc.*+ 8,047 251,630 Urban Outfitters, Inc.*+ 8,482 249,371 American Eagle Outfitters, Inc. 10,531 247,794 O'Reilly Automotive, Inc.* 8,604 242,461 Petsmart, Inc. 11,029 240,212 Claire's Stores, Inc. 7,642 184,401 Pacific Sunwear of California, Inc.*+ 5,747 123,216 Aeropostale, Inc.*+ 4,271 90,759 --------------- TOTAL SPECIALTY RETAIL 3,758,859 --------------- HOTELS, RESTAURANTS & LEISURE 3.4% GTECH Holdings Corp. 8,913 285,751 Brinker International, Inc.* 6,779 254,619 Cheesecake Factory, Inc.* 6,038 188,627 Outback Steakhouse, Inc. 5,057 185,086 Boyd Gaming Corp. 3,343 144,150 International Speedway Corp. -- Class A 2,713 142,351 Applebee's International, Inc. 6,083 125,858 Ruby Tuesday, Inc. 4,904 106,711 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 1,433,153 --------------- HOUSEHOLD DURABLES 3.3% Harman International Industries, Inc. 5,080 519,532 Toll Brothers, Inc.*+ 9,110 406,944 Ryland Group, Inc.+ 3,610 246,996 Hovnanian Enterprises, Inc. -- Class A*+ 2,760 141,312 Tupperware Corp.+ 4,103 93,466 --------------- TOTAL HOUSEHOLD DURABLES 1,408,250 --------------- COMMERCIAL SERVICES & SUPPLIES 2.4% Career Education Corp.*+ 7,923 281,742 Laureate Education, Inc.*+ 3,830 187,555 Education Management Corp.* 5,137 165,617 ITT Educational Services, Inc.* 2,916 143,905 Corinthian Colleges, Inc.* 7,026 93,235 DeVry, Inc.*+ 4,510 85,915 Sotheby's Holdings, Inc. -- Class A* 3,440 57,517 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,015,486 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ MEDIA 1.9% Washington Post Co. -- Class B 452 $ 362,730 Valassis Communications, Inc.* 3,840 149,683 Reader's Digest Association, Inc. 7,631 121,867 Harte-Hanks, Inc. 4,480 118,406 Catalina Marketing Corp.+ 3,094 70,358 --------------- TOTAL MEDIA 823,044 --------------- MULTILINE RETAIL 1.3% Neiman-Marcus Group, Inc. -- Class A 3,770 376,812 Dollar Tree Stores, Inc.*+ 8,268 179,002 --------------- TOTAL MULTILINE RETAIL 555,814 --------------- TEXTILES & APPAREL 0.9% Polo Ralph Lauren Corp. 4,650 233,895 Timberland Co. -- Class A* 4,256 143,767 --------------- TOTAL TEXTILES & APPAREL 377,662 --------------- AUTO COMPONENTS 0.5% Gentex Corp.+ 12,050 209,670 --------------- TOTAL AUTO COMPONENTS 209,670 --------------- AUTOMOBILES 0.2% Thor Industries, Inc. 2,658 90,372 --------------- TOTAL AUTOMOBILES 90,372 --------------- TOTAL CONSUMER DISCRETIONARY 9,672,310 --------------- HEALTH CARE 17.0% HEALTH CARE PROVIDERS & SERVICES 6.1% Patterson Cos., Inc.*+ 10,620 425,119 Health Net, Inc.*+ 8,730 413,104 Lincare Holdings, Inc.*+ 7,557 310,215 Henry Schein, Inc.* 6,713 286,108 Renal Care Group, Inc.* 5,245 248,193 Covance, Inc.* 4,800 230,352 Universal Health Services, Inc. -- Class B+ 4,290 204,333 LifePoint Hospitals, Inc.*+ 4,387 191,843 VCA Antech, Inc.*+ 6,356 162,205 Apria Healthcare Group, Inc.* 3,812 121,641 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 2,593,113 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 5.3% Varian Medical Systems, Inc.*+ 10,076 398,103 DENTSPLY International, Inc. 6,104 329,738 Beckman Coulter, Inc. 4,774 257,701 Cytyc Corp.* 8,638 231,930 Hillenbrand Industries, Inc.+ 4,701 221,182 Inamed Corp.*+ 2,797 211,677 Edwards Lifesciences Corp.* 4,600 204,286 Intuitive Surgical, Inc.*+ 2,690 197,150 Gen-Probe, Inc.* 3,901 192,904 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,244,671 --------------- See Notes to Financial Statements. 74 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ PHARMACEUTICALS 3.6% Sepracor, Inc.*+ 8,112 $ 478,527 Barr Pharmaceuticals, Inc.* 8,193 449,960 IVAX Corp.* 16,564 436,627 Valeant Pharmaceuticals International 7,129 143,150 --------------- TOTAL PHARMACEUTICALS 1,508,264 --------------- BIOTECHNOLOGY 2.0% Protein Design Labs, Inc.* 8,243 230,804 Cephalon, Inc.*+ 4,470 207,497 Techne Corp.*+ 2,995 170,655 Vertex Pharmaceuticals, Inc.*+ 7,370 164,720 Martek Biosciences Corp.*+ 2,445 85,893 --------------- TOTAL BIOTECHNOLOGY 859,569 --------------- TOTAL HEALTH CARE 7,205,617 --------------- INFORMATION TECHNOLOGY 16.4% IT CONSULTING & SERVICES 3.9% Cognizant Technology Solutions Corp.* 10,516 489,940 DST Systems, Inc.*+ 5,371 294,492 Alliance Data Systems Corp.*+ 5,339 209,022 Certegy, Inc. 4,777 191,175 MoneyGram International, Inc. 6,585 142,960 Anteon International Corp.* 2,510 107,328 SRA International, Inc. -- Class A* 2,810 99,699 CSG Systems International, Inc.* 3,783 82,129 Gartner, Inc. -- Class A*+ 4,429 51,775 --------------- TOTAL IT CONSULTING & SERVICES 1,668,520 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3.9% Microchip Technology, Inc. 16,106 485,113 Lam Research Corp.*+ 10,509 320,209 MEMC Electronic Materials, Inc.*+ 12,090 275,531 Cypress Semiconductor Corp.*+ 10,290 154,865 Cree, Inc.*+ 5,820 145,616 Silicon Laboratories, Inc.*+ 3,436 104,420 Semtech Corp.*+ 5,668 93,352 Micrel, Inc.*+ 5,070 56,936 LTX Corp.* 4,730 19,961 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1,656,003 --------------- SOFTWARE 3.6% McAfee, Inc.*+ 12,735 400,134 Activision, Inc.*+ 15,680 320,656 Macromedia, Inc.* 5,859 238,286 Sybase, Inc.*+ 6,960 163,003 Jack Henry & Associates, Inc. 5,788 112,287 Reynolds & Reynolds Co. -- Class A 3,941 108,023 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Transaction Systems Architects, Inc. -- Class A*+ 2,864 $ 79,762 Wind River Systems, Inc.*+ 5,766 74,554 Advent Software, Inc.*+ 1,226 33,029 --------------- TOTAL SOFTWARE 1,529,734 --------------- COMMUNICATIONS EQUIPMENT 2.0% Harris Corp. 10,252 428,534 ADTRAN, Inc. 5,187 163,390 F5 Networks, Inc.*+ 2,956 128,497 Plantronics, Inc. 3,633 111,933 --------------- TOTAL COMMUNICATIONS EQUIPMENT 832,354 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 1.6% CDW Corp.+ 4,837 284,996 Amphenol Corp. -- Class A 6,838 275,845 National Instruments Corp.+ 4,239 104,449 --------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 665,290 --------------- COMPUTERS & PERIPHERALS 0.9% Western Digital Corp.*+ 16,390 211,923 Diebold, Inc. 5,412 186,497 --------------- TOTAL COMPUTERS & PERIPHERALS 398,420 --------------- OFFICE ELECTRONICS 0.5% Zebra Technologies Corp. -- Class A*+ 5,553 217,067 --------------- TOTAL OFFICE ELECTRONICS 217,067 --------------- TOTAL INFORMATION TECHNOLOGY 6,967,388 --------------- INDUSTRIALS 16.1% COMMERCIAL SERVICES & SUPPLIES 5.2% Dun & Bradstreet Corp.* 5,177 341,009 Republic Services, Inc. 9,510 335,608 ChoicePoint, Inc.* 6,956 300,291 HNI Corp. 4,253 256,116 Corporate Executive Board Co. 3,070 239,399 Stericycle, Inc.*+ 3,421 195,510 Herman Miller, Inc. 5,355 162,256 Deluxe Corp. 3,899 156,584 Copart, Inc.* 5,347 127,633 Korn/Ferry International, Inc.*+ 3,157 51,743 Rollins, Inc. 2,272 44,349 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 2,210,498 --------------- MACHINERY 2.9% Joy Global, Inc. 6,240 314,870 Pentair, Inc. 7,841 286,197 Harsco Corp. 3,210 210,480 Graco, Inc.+ 5,292 181,410 Donaldson Co., Inc. 5,291 161,534 Nordson Corp. 2,510 95,455 --------------- TOTAL MACHINERY 1,249,946 --------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 75 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AIR FREIGHT & COURIERS 2.1% Expeditors International Washington, Inc.+ 8,207 $ 465,994 C.H. Robinson Worldwide, Inc.+ 6,587 422,358 --------------- TOTAL AIR FREIGHT & COURIERS 888,352 --------------- AEROSPACE & DEFENSE 1.8% Precision Castparts Corp. 10,230 543,213 Alliant Techsystems, Inc.*+ 2,861 213,574 --------------- TOTAL AEROSPACE & DEFENSE 756,787 --------------- ELECTRICAL EQUIPMENT 1.1% AMETEK, Inc.+ 5,380 231,179 Hubbell, Inc. -- Class B 4,672 219,257 --------------- TOTAL ELECTRICAL EQUIPMENT 450,436 --------------- ROAD & RAIL 0.9% CNF, Inc. 4,039 212,047 J.B. Hunt Transport Services, Inc. 9,756 185,462 --------------- TOTAL ROAD & RAIL 397,509 --------------- CONSTRUCTION & ENGINEERING 0.7% Jacobs Engineering Group, Inc.*+ 4,450 299,930 --------------- TOTAL CONSTRUCTION & ENGINEERING 299,930 --------------- TRADING COMPANIES & DISTRIBUTORS 0.7% Fastenal Co.+ 4,772 291,521 --------------- TOTAL TRADING COMPANIES & DISTRIBUTORS 291,521 --------------- INDUSTRIAL CONGLOMERATES 0.4% Carlisle Cos., Inc.+ 2,357 149,834 --------------- TOTAL INDUSTRIAL CONGLOMERATES 149,834 --------------- AIRLINES 0.3% JetBlue Airways Corp.*+ 7,214 126,966 --------------- TOTAL AIRLINES 126,966 --------------- TOTAL INDUSTRIALS 6,821,779 --------------- FINANCIALS 11.9% REAL ESTATE 4.0% Developers Diversified Realty Corp. 8,375 391,113 Macerich Co. 4,600 298,724 Regency Centers Corp.+ 4,890 280,931 United Dominion Realty Trust, Inc. 10,560 250,272 Weingarten Realty Investors 6,185 234,102 Rayonier, Inc. 3,881 223,623 --------------- TOTAL REAL ESTATE 1,678,765 --------------- CAPITAL MARKETS 3.9% Legg Mason, Inc.+ 8,654 949,257 Eaton Vance Corp. 10,054 249,540 SEI Investments Co. 4,937 185,533 Investors Financial Services Corp.+ 5,096 167,658 Waddell & Reed Financial, Inc. -- Class A+ 6,438 124,640 --------------- TOTAL CAPITAL MARKETS 1,676,628 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ BANKS 3.0% TCF Financial Corp. 8,784 $ 234,972 City National Corp. 3,180 222,886 Bank of Hawaii Corp. 3,987 196,240 Wilmington Trust Corp. 5,214 190,050 Cullen/Frost Bankers, Inc. 3,520 173,677 SVB Financial Group*+ 2,730 132,787 Westamerica Bancorporation 2,504 129,332 --------------- TOTAL BANKS 1,279,944 --------------- INSURANCE 1.0% Brown & Brown, Inc. 4,256 211,480 Arthur J. Gallagher & Co.+ 7,286 209,910 --------------- TOTAL INSURANCE 421,390 --------------- TOTAL FINANCIALS 5,056,727 --------------- ENERGY 8.3% OIL & GAS 4.4% Peabody Energy Corp. 10,100 851,935 Arch Coal, Inc.+ 4,913 331,627 Plains Exploration & Production Co.* 6,028 258,119 Western Gas Resources, Inc.+ 4,427 226,795 Denbury Resources, Inc.* 4,400 221,936 --------------- TOTAL OIL & GAS 1,890,412 --------------- ENERGY EQUIPMENT & SERVICES 3.9% Smith International, Inc.+ 16,348 544,552 Patterson-UTI Energy, Inc.+ 13,215 476,797 Grant Prideco, Inc.*+ 9,780 397,557 FMC Technologies, Inc.* 5,279 222,299 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 1,641,205 --------------- TOTAL ENERGY 3,531,617 --------------- CONSUMER STAPLES 3.6% FOOD & DRUG RETAILING 1.6% Whole Foods Market, Inc.+ 5,182 696,720 --------------- TOTAL FOOD & DRUG RETAILING 696,720 --------------- HOUSEHOLD PRODUCTS 1.2% Energizer Holdings, Inc.* 5,458 309,469 Church & Dwight Co., Inc. 4,927 182,003 --------------- TOTAL HOUSEHOLD PRODUCTS 491,472 --------------- FOOD PRODUCTS 0.8% Hormel Foods Corp. 5,615 185,239 Lancaster Colony Corp. 1,978 85,054 Tootsie Roll Industries, Inc. 1,934 61,404 --------------- TOTAL FOOD PRODUCTS 331,697 --------------- TOTAL CONSUMER STAPLES 1,519,889 --------------- See Notes to Financial Statements. 76 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ UTILITIES 3.5% GAS UTILITIES 2.2% Questar Corp. 6,545 $ 576,746 Equitable Resources, Inc. 9,352 365,289 --------------- TOTAL GAS UTILITIES 942,035 --------------- WATER UTILITIES 0.7% Aqua America, Inc. 7,401 281,386 --------------- TOTAL WATER UTILITIES 281,386 --------------- ELECTRIC UTILITIES 0.6% DPL, Inc.+ 9,775 271,745 --------------- TOTAL ELECTRIC UTILITIES 271,745 --------------- TOTAL UTILITIES 1,495,166 --------------- MATERIALS 1.0% CHEMICALS 0.8% Chemtura Corp. 18,272 226,938 Olin Corp.+ 5,503 104,502 --------------- TOTAL CHEMICALS 331,440 --------------- CONTAINERS & PACKAGING 0.2% Packaging Corporation of America 4,827 93,692 --------------- TOTAL CONTAINERS & PACKAGING 93,692 --------------- TOTAL MATERIALS 425,132 --------------- TELECOMMUNICATION SERVICES 0.2% DIVERSIFIED TELECOMMUNICATION SERVICES 0.2% Cincinnati Bell, Inc.*+ 18,945 83,547 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 83,547 --------------- TOTAL TELECOMMUNICATION SERVICES 83,547 --------------- TOTAL COMMON STOCKS (Cost $36,624,747) 42,779,172 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 0.6% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 145,501 $ 145,501 3.24% due 10/03/05 110,816 110,816 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $256,317) 256,317 --------------- SECURITIES LENDING COLLATERAL 19.0% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 8,082,491 8,082,491 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $8,082,491) 8,082,491 --------------- TOTAL INVESTMENTS 120.4% (Cost $44,963,555) $ 51,117,980 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (20.4)% $ (8,677,720) =============== NET ASSETS - 100.0% $ 42,440,260 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 77 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ COMMON STOCKS 99.8% INFORMATION TECHNOLOGY 23.6% SOFTWARE 6.8% Microsoft Corp. 45,988 $ 1,183,271 Oracle Corp.* 18,828 233,279 Symantec Corp.* 5,983 135,575 Electronic Arts, Inc.*+ 1,511 85,961 Adobe Systems, Inc.+ 2,456 73,312 Autodesk, Inc. 1,139 52,895 Intuit, Inc.*+ 903 40,463 Citrix Systems, Inc.* 846 21,268 Mercury Interactive Corp.*+ 433 17,147 Parametric Technology Corp.* 1,360 9,479 --------------- TOTAL SOFTWARE 1,852,650 --------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 5.4% Intel Corp. 30,412 749,656 Texas Instruments, Inc.+ 8,102 274,658 Maxim Integrated Products, Inc. 1,633 69,647 Analog Devices, Inc.+ 1,862 69,155 Broadcom Corp. -- Class A* 1,409 66,096 Linear Technology Corp. 1,528 57,438 Xilinx, Inc. 1,743 48,543 National Semiconductor Corp.+ 1,717 45,157 Altera Corp.*+ 1,856 35,468 Nvidia Corp.*+ 837 28,692 PMC - Sierra, Inc.* 906 7,982 --------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 1,452,492 --------------- COMPUTERS & PERIPHERALS 5.0% International Business Machines Corp. 7,969 639,273 Dell, Inc.* 11,965 409,203 Apple Computer, Inc.* 4,139 221,892 Network Appliance, Inc.* 1,837 43,610 Lexmark International, Inc.* 592 36,142 Gateway, Inc.* 1,314 3,548 --------------- TOTAL COMPUTERS & PERIPHERALS 1,353,668 --------------- COMMUNICATIONS EQUIPMENT 4.3% Cisco Systems, Inc.* 31,903 572,021 Qualcomm, Inc. 8,137 364,131 Corning, Inc.* 7,344 141,959 Lucent Technologies, Inc.*+ 22,184 72,098 Avaya, Inc.* 2,117 21,805 --------------- TOTAL COMMUNICATIONS EQUIPMENT 1,172,014 --------------- IT CONSULTING & SERVICES 1.3% First Data Corp. 3,851 154,040 Automatic Data Processing, Inc. 2,898 124,730 Paychex, Inc.+ 1,660 61,553 --------------- TOTAL IT CONSULTING & SERVICES 340,323 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ INTERNET SOFTWARE & SERVICES 0.8% Yahoo!, Inc.*+ 6,262 $ 211,906 --------------- TOTAL INTERNET SOFTWARE & SERVICES 211,906 --------------- TOTAL INFORMATION TECHNOLOGY 6,383,053 --------------- HEALTH CARE 19.0% PHARMACEUTICALS 10.0% Johnson & Johnson, Inc. 14,846 939,455 Abbott Laboratories 7,759 328,982 Wyeth 6,691 309,593 Eli Lilly & Co.+ 5,662 303,030 Merck & Co., Inc. 10,954 298,058 Bristol-Myers Squibb Co.+ 9,764 234,922 Schering-Plough Corp.+ 7,366 155,054 Forest Laboratories, Inc.* 1,699 66,210 Allergan, Inc.+ 655 60,011 --------------- TOTAL PHARMACEUTICALS 2,695,315 --------------- HEALTH CARE EQUIPMENT & SUPPLIES 4.0% Medtronic, Inc. 6,047 324,240 Baxter International, Inc. 3,108 123,916 Guidant Corp. 1,649 113,599 Zimmer Holdings, Inc.*+ 1,239 85,355 St. Jude Medical, Inc.* 1,819 85,129 Stryker Corp. 1,446 71,476 Boston Scientific Corp.*+ 2,945 68,825 Becton, Dickinson & Co. 1,249 65,485 Biomet, Inc.+ 1,246 43,249 C.R. Bard, Inc. 521 34,401 Hospira, Inc.* 796 32,612 Waters Corp.* 573 23,837 Millipore Corp.* 257 16,163 --------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,088,287 --------------- BIOTECHNOLOGY 2.7% Amgen, Inc.* 6,159 490,687 Gilead Sciences, Inc.*+ 2,275 110,929 Genzyme Corp.* 1,279 91,628 Medimmune, Inc.* 1,226 41,255 --------------- TOTAL BIOTECHNOLOGY 734,499 --------------- HEALTH CARE PROVIDERS & SERVICES 2.3% UnitedHealth Group, Inc.+ 6,304 354,285 HCA, Inc. 2,257 108,156 Coventry Health Care, Inc.* 540 46,451 Express Scripts, Inc.*+ 737 45,841 Quest Diagnostics, Inc.+ 830 41,948 IMS Health, Inc. 1,125 28,316 --------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 624,997 --------------- TOTAL HEALTH CARE 5,143,098 --------------- CONSUMER STAPLES 17.3% BEVERAGES 4.2% PepsiCo, Inc. 8,340 472,961 See Notes to Financial Statements. 78 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Coca-Cola Co. 10,362 $ 447,535 Anheuser-Busch Cos., Inc.+ 3,876 166,823 Brown-Forman Corp. -- Class B 416 24,769 Pepsi Bottling Group, Inc.+ 689 19,671 --------------- TOTAL BEVERAGES 1,131,759 --------------- HOUSEHOLD PRODUCTS 4.0% Procter & Gamble Co.+ 13,012 773,693 Kimberly-Clark Corp. 2,377 141,503 Colgate-Palmolive Co.+ 2,592 136,832 Clorox Co.+ 758 42,099 --------------- TOTAL HOUSEHOLD PRODUCTS 1,094,127 --------------- FOOD & DRUG RETAILING 3.2% Wal-Mart Stores, Inc. 12,469 546,392 Walgreen Co.+ 5,107 221,899 Sysco Corp. 3,157 99,035 --------------- TOTAL FOOD & DRUG RETAILING 867,326 --------------- TOBACCO 3.0% Altria Group, Inc. 10,358 763,488 UST, Inc.+ 821 34,367 --------------- TOTAL TOBACCO 797,855 --------------- FOOD PRODUCTS 1.7% General Mills, Inc. 1,830 88,206 Sara Lee Corp.+ 3,915 74,189 WM Wrigley Jr Co. 901 64,764 H.J. Heinz Co. 1,697 62,008 Kellogg Co. 1,276 58,862 Hershey Co. 916 51,580 Campbell Soup Co. 921 27,400 McCormick & Co., Inc. 670 21,862 --------------- TOTAL FOOD PRODUCTS 448,871 --------------- PERSONAL PRODUCTS 1.2% Gillette Co. 4,648 270,514 Avon Products, Inc. 2,350 63,450 --------------- TOTAL PERSONAL PRODUCTS 333,964 --------------- TOTAL CONSUMER STAPLES 4,673,902 --------------- INDUSTRIALS 14.1% INDUSTRIAL CONGLOMERATES 7.6% General Electric Co. 52,913 1,781,581 3M Co.+ 3,818 280,088 --------------- TOTAL INDUSTRIAL CONGLOMERATES 2,061,669 --------------- AEROSPACE & DEFENSE 2.6% Boeing Co. 4,096 278,323 United Technologies Corp. 5,118 265,317 Lockheed Martin Corp.+ 1,819 111,032 Rockwell Collins, Inc.+ 884 42,715 --------------- TOTAL AEROSPACE & DEFENSE 697,387 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AIR FREIGHT & COURIERS 1.4% United Parcel Service, Inc. -- Class B 5,529 $ 382,220 --------------- TOTAL AIR FREIGHT & COURIERS 382,220 --------------- MACHINERY 1.0% Caterpillar, Inc. 3,381 198,634 Danaher Corp.+ 1,184 63,734 --------------- TOTAL MACHINERY 262,368 --------------- ELECTRICAL EQUIPMENT 0.7% Emerson Electric Co. 2,059 147,836 Rockwell Automation, Inc. 904 47,822 --------------- TOTAL ELECTRICAL EQUIPMENT 195,658 --------------- COMMERCIAL SERVICES & SUPPLIES 0.5% Pitney Bowes, Inc. 1,139 47,542 Robert Half International, Inc. 845 30,074 Avery Dennison Corp.+ 547 28,657 Equifax, Inc. 650 22,711 Monster Worldwide, Inc.*+ 604 18,549 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 147,533 --------------- BUILDING PRODUCTS 0.2% American Standard Cos., Inc. 915 42,593 --------------- TOTAL BUILDING PRODUCTS 42,593 --------------- CONSTRUCTION & ENGINEERING 0.1% Fluor Corp. 440 28,327 --------------- TOTAL CONSTRUCTION & ENGINEERING 28,327 --------------- TOTAL INDUSTRIALS 3,817,755 --------------- ENERGY 10.5% OIL & GAS 8.4% Exxon Mobil Corp. 31,467 1,999,413 EOG Resources, Inc.+ 1,202 90,030 XTO Energy, Inc.+ 1,804 81,757 Sunoco, Inc. 684 53,489 Kinder Morgan, Inc.+ 485 46,637 --------------- TOTAL OIL & GAS 2,271,326 --------------- ENERGY EQUIPMENT & SERVICES 2.1% Schlumberger Ltd.+ 2,939 247,993 Halliburton Co.+ 2,536 173,767 Baker Hughes, Inc.+ 1,705 101,754 BJ Services Co. 1,612 58,016 --------------- TOTAL ENERGY EQUIPMENT & SERVICES 581,530 --------------- TOTAL ENERGY 2,852,856 --------------- CONSUMER DISCRETIONARY 9.5% SPECIALTY RETAIL 3.8% Home Depot, Inc.+ 10,682 407,412 Lowe's Cos., Inc.+ 3,896 250,902 Best Buy Co., Inc.+ 2,016 87,756 See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 79 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ Staples, Inc.+ 3,667 $ 78,180 Bed Bath & Beyond, Inc.* 1,471 59,105 TJX Cos., Inc. 2,327 47,657 Limited Brands, Inc.+ 1,747 35,691 Sherwin-Williams Co. 567 24,988 AutoZone, Inc.*+ 287 23,893 RadioShack Corp. 669 16,591 --------------- TOTAL SPECIALTY RETAIL 1,032,175 --------------- HOTELS, RESTAURANTS & LEISURE 1.4% Starbucks Corp.* 1,913 95,841 Yum! Brands, Inc. 1,429 69,178 Harrah's Entertainment, Inc. 920 59,975 Marriott International, Inc. -- Class A+ 858 54,054 International Game Technology, Inc.+ 1,707 46,089 Hilton Hotels Corp. 1,637 36,538 Darden Restaurants, Inc.+ 675 20,500 --------------- TOTAL HOTELS, RESTAURANTS & LEISURE 382,175 --------------- MULTILINE RETAIL 1.1% Target Corp. 4,412 229,115 Nordstrom, Inc. 1,100 37,752 Dollar General Corp.+ 1,599 29,326 --------------- TOTAL MULTILINE RETAIL 296,193 --------------- INTERNET & CATALOG RETAIL 0.8% eBay, Inc.* 5,543 228,372 --------------- TOTAL INTERNET & CATALOG RETAIL 228,372 --------------- MEDIA 0.7% McGraw-Hill Cos., Inc.+ 1,864 89,546 Omnicom Group, Inc. 909 76,020 Dow Jones & Co., Inc. 295 11,266 Meredith Corp. 217 10,826 --------------- TOTAL MEDIA 187,658 --------------- TEXTILES & APPAREL 0.5% Nike, Inc. -- Class B+ 951 77,678 Coach, Inc.* 1,892 59,333 --------------- TOTAL TEXTILES & APPAREL 137,011 --------------- HOUSEHOLD DURABLES 0.5% Fortune Brands, Inc. 733 59,615 Black & Decker Corp. 402 33,000 Newell Rubbermaid, Inc.+ 1,371 31,053 Maytag Corp. 399 7,286 --------------- TOTAL HOUSEHOLD DURABLES 130,954 --------------- COMMERCIAL SERVICES & SUPPLIES 0.3% Apollo Group, Inc. -- Class A*+ 733 48,664 H&R Block, Inc. 1,624 38,943 --------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 87,607 --------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ AUTOMOBILES 0.3% Harley-Davidson, Inc.+ 1,366 $ 66,169 --------------- TOTAL AUTOMOBILES 66,169 --------------- AUTO COMPONENTS 0.1% Goodyear Tire & Rubber Co.*+ 883 13,766 Visteon Corp. 645 6,308 --------------- TOTAL AUTO COMPONENTS 20,074 --------------- TOTAL CONSUMER DISCRETIONARY 2,568,388 --------------- FINANCIALS 3.4% CONSUMER FINANCE 1.7% American Express Co. 6,196 355,898 SLM Corp. 2,081 111,625 --------------- TOTAL CONSUMER FINANCE 467,523 --------------- CAPITAL MARKETS 0.7% Charles Schwab Corp.+ 5,185 74,820 Franklin Resources, Inc.+ 737 61,878 T. Rowe Price Group, Inc. 647 42,249 Federated Investors, Inc. -- Class B 424 14,090 --------------- TOTAL CAPITAL MARKETS 193,037 --------------- INSURANCE 0.4% Progressive Corp. 982 102,884 --------------- TOTAL INSURANCE 102,884 --------------- REAL ESTATE 0.4% Simon Property Group, Inc. 914 67,746 Public Storage, Inc. 420 28,140 --------------- TOTAL REAL ESTATE 95,886 --------------- DIVERSIFIED FINANCIALS 0.2% Moody's Corp.+ 1,257 64,207 --------------- TOTAL DIVERSIFIED FINANCIALS 64,207 --------------- TOTAL FINANCIALS 923,537 --------------- MATERIALS 1.5% CHEMICALS 1.2% EI Du Pont de Nemours & Co. 4,969 194,636 Praxair, Inc. 1,614 77,359 Ecolab, Inc. 923 29,471 International Flavors & Fragrances, Inc. 417 14,862 Hercules, Inc.* 559 6,831 --------------- TOTAL CHEMICALS 323,159 --------------- METALS & MINING 0.2% Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 884 42,953 Allegheny Technologies, Inc.+ 422 13,074 --------------- TOTAL METALS & MINING 56,027 --------------- See Notes to Financial Statements. 80 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------ CONTAINERS & PACKAGING 0.1% Ball Corp. 546 $ 20,060 --------------- TOTAL CONTAINERS & PACKAGING 20,060 --------------- TOTAL MATERIALS 399,246 --------------- UTILITIES 0.7% ELECTRIC UTILITIES 0.5% TXU Corp. 1,198 135,230 --------------- TOTAL ELECTRIC UTILITIES 135,230 --------------- MULTI-UTILITIES 0.2% AES Corp.*+ 3,262 53,595 --------------- TOTAL MULTI-UTILITIES 53,595 --------------- TOTAL UTILITIES 188,825 --------------- TELECOMMUNICATION SERVICES 0.2% DIVERSIFIED TELECOMMUNICATION SERVICES 0.2% Qwest Communications International, Inc.* 7,615 31,222 Citizens Communications Co.+ 1,717 23,265 --------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 54,487 --------------- TOTAL TELECOMMUNICATION SERVICES 54,487 --------------- TOTAL COMMON STOCKS (Cost $24,679,960) 27,005,147 --------------- FACE AMOUNT ----------- REPURCHASE AGREEMENTS 0.4% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 57,960 57,960 3.24% due 10/03/05 44,144 44,144 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $102,104) 102,104 --------------- SECURITIES LENDING COLLATERAL 11.4% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 3,088,154 3,088,154 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $3,088,154) 3,088,154 --------------- TOTAL INVESTMENTS 111.6% (Cost $27,870,218) $ 30,195,405 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (11.6)% $ (3,136,546) =============== NET ASSETS - 100.0% $ 27,058,859 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 81 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- STRENGTHENING DOLLAR FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 67.3% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 4,153,976 $ 4,153,976 3.24% due 10/03/05 3,163,751 3,163,751 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $7,317,727) 7,317,727 --------------- TOTAL INVESTMENTS 67.3% (Cost $7,317,727) $ 7,317,727 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 32.7% $ 3,559,522 =============== NET ASSETS - 100.0% $ 10,877,249 - ------------------------------------------------------------------------------ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------ FUTURES CONTRACTS PURCHASED December 2005 U.S. Dollar Index Futures Contracts (Aggregate Market Value of Contracts $714,800) 8 $ 15,968 =============== UNITS ------- CURRENCY INDEX SWAP AGREEMENT November 2005 U.S. Dollar Index Swap, Maturing 11/28/05* (Notional Market Value $21,068,750) 235,808 $ 117,396 =============== * PRICE RETURN BASED ON U.S. DOLLAR INDEX +/- FINANCING AT A VARIABLE RATE. See Notes to Financial Statements. 82 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- WEAKENING DOLLAR FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS 75.1% Repurchase Agreement (Note 6) 3.25% due 10/03/05 $ 6,964,966 $ 6,964,966 3.24% due 10/03/05 5,304,657 5,304,657 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $12,269,623) 12,269,623 --------------- TOTAL INVESTMENTS 75.1% (Cost $12,269,623) $ 12,269,623 =============== OTHER ASSETS IN EXCESS OF LIABILITIES - 24.9% $ 4,068,079 =============== NET ASSETS - 100.0% $ 16,337,702 - ------------------------------------------------------------------------------ UNREALIZED LOSS UNITS (NOTE 1) - ------------------------------------------------------------------------------ CURRENCY INDEX SWAP AGREEMENT SOLD SHORT November 2005 U.S. Dollar Index Swap, Maturing 11/28/05* (Notional Market Value $32,552,996) 364,343 $ (879,487) =============== * PRICE RETURN BASED ON U.S. DOLLAR INDEX +/- FINANCING AT A VARIABLE RATE. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 83 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ FEDERAL AGENCY DISCOUNT NOTES 90.1% Farmer Mac* 3.62% due 11/22/05 $55,000,000 $ 54,723,472 3.46% due 10/28/05 50,000,000 49,879,861 3.72% due 12/30/05 50,000,000 49,545,333 3.70% due 12/27/05 33,000,000 32,711,708 3.70% due 12/20/05 30,000,000 29,759,500 3.58% due 11/10/05 29,000,000 28,890,565 3.36% due 10/06/05 25,000,000 24,993,000 2.93% due 12/09/05 25,000,000 24,863,674 3.60% due 11/15/05 20,000,000 19,914,120 3.06% due 12/09/05 20,000,000 19,886,100 2.86% due 12/15/05 20,000,000 19,884,011 Federal Farm Credit Bank* 3.70% due 12/23/05 50,000,000 49,583,750 3.60% due 10/20/05 25,000,000 24,957,500 3.51% due 11/04/05 25,000,000 24,922,000 3.06% due 11/17/05 25,000,000 24,904,375 2.80% due 11/01/05 10,000,000 9,977,444 3.05% due 12/15/05 9,000,000 8,944,338 Federal Home Loan Bank* 3.37% due 10/05/05 50,000,000 49,990,653 3.34% due 10/07/05 50,000,000 49,981,444 3.51% due 10/12/05 50,000,000 49,956,125 3.34% due 10/17/05 50,000,000 49,935,056 3.50% due 10/26/05 50,000,000 49,888,194 3.57% due 11/09/05 50,000,000 49,816,542 3.64% due 11/30/05 50,000,000 49,706,778 3.80% due 02/10/06 50,000,000 49,313,889 3.60% due 07/13/06 25,000,000 25,000,000 4.00% due 05/30/06 25,000,000 25,000,000 3.60% due 11/16/05 25,000,000 24,890,000 3.65% due 01/20/06 25,000,000 24,723,715 Freddie Mac* 3.12% due 10/11/05+ 50,000,000 49,965,333 3.46% due 10/25/05 50,000,000 49,894,278 3.51% due 12/20/05 50,000,000 49,619,750 3.57% due 12/20/05+ 50,000,000 49,613,250 3.58% due 01/03/06 50,000,000 49,542,555 3.66% due 01/17/06 50,000,000 49,461,167 3.01% due 10/05/05 25,000,000 24,995,819 3.40% due 11/30/05 25,000,000 24,863,056 3.68% due 12/27/05 25,000,000 24,782,778 --------------- TOTAL FEDERAL AGENCY DISCOUNT NOTES (Cost $1,369,281,133) 1,369,281,133 --------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------ REPURCHASE AGREEMENTS 8.7% Individual Repurchase Agreement Lehman Brothers, Inc. at 3.25% due 10/03/05 (Secured by U.S. Treasury Notes, as collateral, maturing 12/15/09 with a Market Value of $105,575,122 and maturing 02/15/13 with a Market Value of $29,846,484) having a collective Maturity Value of $132,829,054 $ 132,793,089 $ 132,793,089 --------------- TOTAL REPURCHASE AGREEMENTS (Cost $132,793,089) 132,793,089 --------------- SECURITIES LENDING COLLATERAL 6.6% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 9) 100,000,000 100,000,000 --------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $100,000,000) 100,000,000 --------------- TOTAL INVESTMENTS 105.4% (Cost $1,602,074,222) $ 1,602,074,222 =============== LIABILITIES IN EXCESS OF OTHER ASSETS - (5.4)% $ (81,667,532) =============== NET ASSETS - 100.0% $ 1,520,406,690 * THE ISSUER IS A PUBLICLY TRADED COMPANY THAT OPERATES UNDER A CONGRESSIONAL CHARTER; ITS SECURITIES ARE NEITHER ISSUED NOR GUARANTEED BY THE U.S. GOVERNMENT. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 9. See Notes to Financial Statements. 84 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT MASTER - FEEDER ARRANGEMENT - -------------------------------------------------------------------------------- Nova Fund, Ursa Fund, Arktos Fund and Juno Fund are operating under a 'master-feeder arrangement'. Under a master-feeder arrangement, a Feeder Fund ("feeder") invests substantially all of its assets in the Master Portfolio ("master"), a separate open-ended investment company that has the same investment objectives as the feeder, e.g., the Nova Fund would act as a feeder, holding shares of the Nova Master Portfolio as its only investment. The Master Portfolio, in turn, invests in securities and derivatives to meet its investment objective. The following statements represent the Feeder Funds, which are the part of the master-feeder arrangement in which shareholders invest. Please see Notes to Financial Statements for more information about the master-feeder arrangement. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 85 STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) - -------------------------------------------------------------------------------- INVERSE NOVA URSA OTC ARKTOS MEDIUS MID-CAP FUND FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------ ASSETS Securities at Value* (Notes 1, 2, 6 and 9) $ -- $ -- $ 1,130,116,441 $ -- $ 74,993,067 $ 8,628,286 Investments in Master Portfolio** (Note 3) 298,299,653 484,875,426 -- 208,000,439 -- -- Segregated Cash with Broker -- -- 2,910,000 -- 2,659,325 458,190 Receivable for Equity Index Swap Settlement (Note 1) -- -- -- -- 191,965 -- Receivable for Futures Contracts Settlement (Note 1) -- -- 213,400 -- 116,705 -- Receivable for Securities Sold (Note 1) 858,892 454,218 -- 8,433,403 -- -- Receivable for Shares Purchased 2,070,807 4,622,022 7,166,003 3,052,004 4,085,850 363,599 Investment Income Receivable (Note 1) -- -- 20,099 -- 42,630 2,334 Other Assets -- -- -- 33,838 -- 88 - ------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS 301,229,352 489,951,666 1,140,425,943 219,519,684 82,089,542 9,452,497 ================================================================================================================== LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- -- -- -- -- 113,412 Payable for Futures Contracts Settlement (Note 1) -- -- -- -- -- 17,734 Payable upon Return of Securities Loaned (Note 9) -- -- 209,194,920 -- 12,774,694 -- Payable for Securities Purchased (Note 1) -- -- 2,308,175 -- 1,004,589 -- Liability for Shares Redeemed 2,816,228 4,909,609 5,250,029 11,412,857 2,468,413 1,202,722 Investment Advisory Fees Payable (Note 4) -- -- 617,761 -- 48,847 5,675 Transfer Agent and Administrative Fees Payable (Note 4) 61,378 103,375 205,920 44,943 13,569 1,576 Distribution and Service Fees Payable (Note 4) 23,401 19,615 8,101 6,476 7,058 932 Portfolio Accounting Fees Payable (Note 4) 23,893 36,492 54,300 17,977 5,427 631 Custody Fees Payable -- -- 19,768 -- 1,303 151 Cash Payable to Custodian Bank -- -- -- -- -- -- Dividends Payable -- -- -- -- -- -- Other Liabilities 30,053 50,946 100,475 22,198 6,676 752 - ------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 2,954,953 5,120,037 217,759,449 11,504,451 16,330,576 1,343,585 ================================================================================================================== NET ASSETS $ 298,274,399 $ 484,831,629 $ 922,666,494 $ 208,015,233 $ 65,758,966 $ 8,108,912 ================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 340,556,192 $ 735,550,575 $ 1,496,771,878 $ 382,941,102 $ 57,989,548 $ 9,345,222 Undistributed Net Investment Income (Loss) (1,053,415) (1,298,167) (119,185) (586,209) (97,197) 126,971 Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps, and Futures Contracts (53,053,274) (240,156,299) (919,316,896) (163,616,209) 2,776,395 (1,293,225) Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 11,824,896 (9,264,480) 345,330,697 (10,723,451) 5,090,220 (70,056) ================================================================================================================== NET ASSETS $ 298,274,399 $ 484,831,629 $ 922,666,494 $ 208,015,233 $ 65,758,966 $ 8,108,912 ================================================================================================================== Investor Class $ 157,915,694 $ 385,667,080 $ 878,830,384 $ 177,806,400 N/A N/A Advisor Class 61,709,040 37,980,931 25,779,834 11,943,008 N/A N/A A-Class 27,077,692 14,974,452 2,200,429 2,338,239 $ 1,808,347 $ 488,696 C-Class 51,571,973 46,209,166 15,855,847 15,927,586 17,346,962 375,114 H-Class N/A N/A N/A N/A 46,603,657 7,245,102 SHARES OUTSTANDING Investor Class 5,699,164 45,642,401 81,544,865 7,712,689 N/A N/A Advisor Class 2,311,580 4,682,905 2,482,965 523,606 N/A N/A A-Class 1,010,464 1,846,548 210,974 102,192 50,834 11,980 C-Class 1,950,813 5,732,025 1,547,378 725,975 502,490 9,314 H-Class N/A N/A N/A N/A 1,309,608 177,571 NET ASSET VALUES Investor Class $ 27.71 $ 8.45 $ 10.78 $ 23.05 N/A N/A Advisor Class 26.70 8.11 10.38 22.81 N/A N/A A-Class 26.80 8.11 10.43 22.88 $ 35.57 $ 40.79 A-Class Maximum Offering Price*** 28.14 8.51 10.95 24.02 37.34 42.82 C-Class 26.44 8.06 10.25 21.94 34.52 40.28 H-Class N/A N/A N/A N/A 35.59 40.80 * THE COST OF SECURITIES AT VALUE IS $0, $0, $784,842,301, $0, $70,245,125, $8,628,286, $140,582,963, $51,160,641, $70,664,797, $0, $89,499,913, AND $123,610,520, RESPECTIVELY. ** THE COST OF INVESTMENT IN MASTER PORTFOLIO IS $286,474,757, $494,139,906, $0, $218,723,890, $0, $0, $0, $0, $0, $2,263,782,302, $0 AND $0, RESPECTIVELY. *** NET ASSET VALUE ADJUSTED FOR SALES CHARGE OF 4.75% OF OFFERING PRICE. See Notes to Financial Statements. 86 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT September 30, 2005 - -------------------------------------------------------------------------------- INVERSE U.S. LARGE-CAP LARGE-CAP MEKROS SMALL-CAP GOVERNMENT JUNO EUROPE JAPAN FUND FUND BOND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------ ASSETS Securities at Value* (Notes 1, 2, 6 and 9) $ 154,456,931 $ 51,160,641 $ 77,151,268 $ -- $ 92,701,505 $ 123,610,520 Investments in Master Portfolio** (Note 3) -- -- -- 2,047,567,954 -- -- Segregated Cash with Broker 5,723,008 4,978,401 373,750 -- -- 3,489,500 Receivable for Equity Index Swap Settlement (Note 1) 887,914 -- -- -- 295,636 5,300,543 Receivable for Futures Contracts Settlement (Note 1) 157,409 -- -- -- -- -- Receivable for Securities Sold (Note 1) -- -- 24,493,177 -- -- -- Receivable for Shares Purchased 12,391,991 505,093 1,804,900 5,296,646 1,821,215 10,073,225 Investment Income Receivable (Note 1) 101,136 13,837 465,034 -- 176,120 33,439 Other Assets -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS 173,718,389 56,657,972 104,288,129 2,052,864,600 94,994,476 142,507,227 ================================================================================================================== LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- 1,589,929 -- -- -- -- Payable for Futures Contracts Settlement (Note 1) -- 33,909 114,595 -- -- 488,556 Payable upon Return Of Securities Loaned (Note 9) 16,702,851 -- -- -- -- -- Payable for Securities Purchased (Note 1) 3,511,079 -- -- 485,505 -- -- Liability for Shares Redeemed 6,670,492 6,098,787 27,307,227 4,036,214 1,501,249 1,219,916 Investment Advisory Fees Payable (Note 4) 122,304 42,584 47,400 -- 60,660 89,165 Transfer Agent and Administrative Fees Payable (Note 4) 33,973 11,829 18,960 441,674 16,850 24,768 Distribution And Service Fees Payable (Note 4) 14,456 5,538 11,267 215,625 7,370 9,185 Portfolio Accounting Fees Payable (Note 4) 13,589 4,732 9,480 82,590 6,740 9,907 Custody Fees Payable 3,261 1,135 2,275 -- 1,618 2,378 Cash Payable to Custodian Bank -- -- 120 -- -- 30 Dividends Payable -- -- 17,416 -- -- -- Other Liabilities 16,935 5,568 12,146 215,639 8,269 12,693 - ------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 27,088,940 7,794,011 27,540,886 5,477,247 1,602,756 1,856,598 ================================================================================================================== NET ASSETS $ 146,629,449 $ 48,863,961 $ 76,747,243 $ 2,047,387,353 $ 93,391,720 $ 140,650,629 ================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 150,424,160 $ 59,634,710 $ 82,539,211 $ 2,455,736,716 $ 91,256,847 $ 131,901,225 Undistributed Net Investment Income (Loss) (156,911) 384,192 (19,463) (8,726,489) 368,565 379,572 Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps, And Futures Contracts (18,715,008) (10,574,424) (11,940,112) (183,408,526) (1,730,920) 914,573 Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 15,077,208 (580,517) 6,167,607 (216,214,348) 3,497,228 7,455,259 ================================================================================================================== NET ASSETS $ 146,629,449 $ 48,863,961 $ 76,747,243 $ 2,047,387,353 $ 93,391,720 $ 140,650,629 ================================================================================================================== Investor Class N/A N/A $ 24,349,799 $ 1,072,318,942 N/A N/A Advisor Class N/A N/A 44,205,664 126,945,253 N/A N/A A-Class $ 5,017,120 $ 697,670 1,136,771 159,378,510 $ 1,878,139 $ 1,544,801 C-Class 30,329,499 5,226,886 7,055,009 688,744,648 6,257,254 4,761,911 H-Class 111,282,830 42,939,405 N/A N/A 85,256,327 134,343,917 SHARES OUTSTANDING Investor Class N/A N/A 2,128,451 58,621,330 N/A N/A Advisor Class N/A N/A 3,858,353 7,015,101 N/A N/A A-Class 162,572 16,422 99,235 8,774,029 101,512 45,655 C-Class 1,017,588 124,436 615,649 39,272,627 350,812 144,238 H-Class 3,607,875 1,010,233 N/A N/A 4,608,884 3,967,267 NET ASSET VALUES Investor Class N/A N/A $ 11.44 $ 18.29 N/A N/A Advisor Class N/A N/A 11.46 18.10 N/A N/A A-Class $ 30.86 $ 42.48 11.46 18.16 $ 18.50 $ 33.84 A-Class Maximum Offering Price*** 32.40 44.60 12.03 19.07 19.42 35.53 C-Class 29.81 42.00 11.46 17.54 17.84 33.01 H-Class 30.84 42.50 N/A N/A 18.50 33.86 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 87 STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- SMALL-CAP MID-CAP LARGE-CAP SMALL-CAP VALUE VALUE VALUE GROWTH FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 6 and 9) $ 46,620,677 $ 151,811,344 $ 63,774,357 $ 125,514,013 Segregated Cash with Broker -- -- -- -- Cash in Custodian Bank -- -- 917 -- Receivable for Equity Index Swap Settlement (Note 1) -- -- -- -- Receivable for Futures Contracts Settlement (Note 1) -- -- -- -- Receivable for Securities Sold (Note 1) 201,408 3,608,884 -- -- Receivable for Shares Purchased 207,140 2,494,508 841,981 17,011,189 Investment Income Receivable (Note 1) 43,634 88,840 62,925 51,919 Other Assets -- -- -- -- - -------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 47,072,859 158,003,576 64,680,180 142,577,121 ========================================================================================================================== LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- -- -- -- Payable upon Return of Securities Loaned (Note 9) 5,043,318 28,753,596 8,782,960 13,293,323 Payable for Securities Purchased (Note 1) 120,059 -- -- 15,956,931 Liability for Shares Redeemed 273,086 6,374,147 931,572 916,882 Investment Advisory Fees Payable (Note 4) 35,907 86,000 42,783 61,463 Transfer Agent and Administrative Fees Payable (Note 4) 11,969 28,667 14,261 20,488 Distribution and Service Fees Payable (Note 4) 3,905 10,578 4,351 9,112 Portfolio Accounting Fees Payable (Note 4) 4,788 11,467 5,704 8,195 Custody Fees Payable 1,149 3,219 1,400 1,966 Dividends Payable -- -- -- -- Other Liabilities 5,818 14,348 6,884 10,350 - -------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 5,499,999 35,282,022 9,789,915 30,278,710 ========================================================================================================================== NET ASSETS $ 41,572,860 $ 122,721,554 $ 54,890,265 $ 112,298,411 ========================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 41,778,604 $ 111,218,681 $ 51,827,787 $ 105,368,784 Undistributed Net Investment Income (Loss) (119,796) (11,802) 131,929 (236,543) Accumulated Net Realized Loss on Investments, Currency Index Swaps, and Futures Contracts (7,171,008) (5,596,212) (3,041,641) (1,626,725) Net Unrealized Appreciation (Depreciation) on Investments, Currency Index Swaps, and Futures Contracts 7,085,060 17,110,887 5,972,190 8,792,895 ========================================================================================================================== NET ASSETS $ 41,572,860 $ 122,721,554 $ 54,890,265 $ 112,298,411 ========================================================================================================================== Investor Class N/A N/A N/A N/A Advisor Class N/A N/A N/A N/A A-Class $ 97,665 $ 605,566 $ 1,034,917 $ 376,848 C-Class 2,882,612 13,724,117 3,909,697 10,637,746 H-Class 38,592,583 108,391,871 49,945,651 101,283,817 SHARES OUTSTANDING Investor Class N/A N/A N/A N/A Advisor Class N/A N/A N/A N/A A-Class 3,235 20,090 37,135 12,336 C-Class 96,644 460,659 141,857 351,789 H-Class 1,278,193 3,596,447 1,792,549 3,313,865 NET ASSET VALUES Investor Class N/A N/A N/A N/A Advisor Class N/A N/A N/A N/A A-Class $ 30.19 $ 30.14 $ 27.87 $ 30.55 A-Class Maximum Offering Price** 31.70 31.64 29.26 32.07 C-Class 29.83 29.79 27.56 30.24 H-Class 30.19 30.14 27.86 30.56 * THE COST OF SECURITIES AT VALUE IS $39,535,617, $134,700,457, $ 57,802,167, $116,721,118, $44,963,555, $27,870,218, $7,317,727, $ 12,269,623, AND $1,602,074,222, RESPECTIVELY. ** NET ASSET VALUE ADJUSTED FOR SALES CHARGE OF 4.75% OF OFFERING PRICE. See Notes to Financial Statements. 88 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT September 30, 2005 - -------------------------------------------------------------------------------- MID-CAP LARGE-CAP STRENGTHENING GROWTH GROWTH DOLLAR FUND FUND FUND - ------------------------------------------------------------------------------------------------------------ ASSETS Securities at Value* (Notes 1, 2, 6 and 9) $ 51,117,980 $ 30,195,405 $ 7,317,727 Segregated Cash with Broker -- -- 3,458,418 Cash in Custodian Bank -- -- -- Receivable for Equity Index Swap Settlement (Note 1) -- -- 71,192 Receivable for Futures Contracts Settlement (Note 1) -- -- 1,040 Receivable for Securities Sold (Note 1) 2,049,003 910,539 -- Receivable for Shares Purchased 2,093,411 285,960 72,994 Investment Income Receivable (Note 1) 21,331 43,266 1,979 Other Assets -- -- -- - ------------------------------------------------------------------------------------------------------------ TOTAL ASSETS 55,281,725 31,435,170 10,923,350 ============================================================================================================ LIABILITIES Payable for Equity Index Swap Settlement (Note 1) -- -- -- Payable upon Return of Securities Loaned (Note 9) 8,082,491 3,088,154 -- Payable for Securities Purchased (Note 1) -- 17,165 -- Liability for Shares Redeemed 4,702,091 1,231,893 38,407 Investment Advisory Fees Payable (Note 4) 32,518 22,049 4,437 Transfer Agent and Administrative Fees Payable (Note 4) 10,839 7,350 1,232 Distribution and Service Fees Payable (Note 4) 2,957 2,509 734 Portfolio Accounting Fees Payable (Note 4) 4,336 2,940 493 Custody Fees Payable 1,091 705 118 Dividends Payable -- -- -- Other Liabilities 5,142 3,546 680 - ------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 12,841,465 4,376,311 46,101 ============================================================================================================ NET ASSETS $ 42,440,260 $ 27,058,859 $ 10,877,249 ============================================================================================================ NET ASSETS CONSIST OF Paid-In Capital $ 39,570,285 $ 29,413,783 $ 11,114,223 Undistributed Net Investment Income (Loss) (170,281) (14,964) 57,228 Accumulated Net Realized Loss on Investments, Currency Index Swaps, and Futures Contracts (3,114,169) (4,665,147) (427,566) Net Unrealized Appreciation (Depreciation) on Investments, Currency Index Swaps, and Futures Contracts 6,154,425 2,325,187 133,364 ============================================================================================================ NET ASSETS $ 42,440,260 $ 27,058,859 $ 10,877,249 ============================================================================================================ Investor Class N/A N/A N/A Advisor Class N/A N/A N/A A-Class $ 540,286 $ 272,738 $ 67,293 C-Class 974,684 2,729,988 1,175,854 H-Class 40,925,290 24,056,133 9,634,102 SHARES OUTSTANDING Investor Class N/A N/A N/A Advisor Class N/A N/A N/A A-Class 18,811 10,861 2,480 C-Class 34,295 109,913 43,436 H-Class 1,423,804 957,839 355,444 NET ASSET VALUES Investor Class N/A N/A N/A Advisor Class N/A N/A N/A A-Class $ 28.72 $ 25.11 $ 27.13 A-Class Maximum Offering Price** 30.15 26.36 28.48 C-Class 28.42 24.84 27.07 H-Class 28.74 25.11 27.10 U.S. WEAKENING GOVERNMENT DOLLAR MONEY FUND MARKET FUND - ------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 6 and 9) $ 12,269,623 $ 1,602,074,222 Segregated Cash with Broker 4,730,865 -- Cash in Custodian Bank -- -- Receivable for Equity Index Swap Settlement (Note 1) -- -- Receivable for Futures Contracts Settlement (Note 1) -- -- Receivable for Securities Sold (Note 1) -- -- Receivable for Shares Purchased 167,477 107,762,803 Investment Income Receivable (Note 1) 3,319 330,953 Other Assets -- 177,480 - ------------------------------------------------------------------------------------------- TOTAL ASSETS 17,171,284 1,710,345,458 =========================================================================================== LIABILITIES Payable for Equity Index Swap Settlement (Note 1) 735,654 -- Payable upon Return of Securities Loaned (Note 9) -- 100,000,000 Payable for Securities Purchased (Note 1) -- -- Liability for Shares Redeemed 72,316 88,619,954 Investment Advisory Fees Payable (Note 4) 15,616 654,379 Transfer Agent and Administrative Fees Payable (Note 4) 4,338 261,752 Distribution and Service Fees Payable (Note 4) 1,397 74,044 Portfolio Accounting Fees Payable (Note 4) 1,735 68,852 Custody Fees Payable 416 32,482 Dividends Payable -- 69,303 Other Liabilities 2,110 158,002 - ------------------------------------------------------------------------------------------- TOTAL LIABILITIES 833,582 189,938,768 =========================================================================================== NET ASSETS $ 16,337,702 $ 1,520,406,690 =========================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 17,328,295 $ 1,520,874,772 Undistributed Net Investment Income (Loss) 66,073 -- Accumulated Net Realized Loss on Investments, Currency Index Swaps, and Futures Contracts (177,179) (468,082) Net Unrealized Appreciation (Depreciation) on Investments, Currency Index Swaps, and Futures Contracts (879,487) -- =========================================================================================== NET ASSETS $ 16,337,702 $ 1,520,406,690 =========================================================================================== Investor Class N/A $ 1,168,196,826 Advisor Class N/A 181,858,311 A-Class $ 417,899 10,173,959 C-Class 586,968 160,177,594 H-Class 15,332,835 N/A SHARES OUTSTANDING Investor Class N/A 1,168,619,640 Advisor Class N/A 182,114,186 A-Class 18,044 10,173,986 C-Class 25,420 160,176,827 H-Class 662,284 N/A NET ASSET VALUES Investor Class N/A $ 1.00 Advisor Class N/A 1.00 A-Class $ 23.16 1.00 A-Class Maximum Offering Price** 24.31 1.00 C-Class 23.09 1.00 H-Class 23.15 N/A THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 89 STATEMENTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- NOVA URSA OTC ARKTOS FUND FUND FUND FUND - ---------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ -- $ -- $ 539,563 $ -- Interest from Securities Lending, net (Note 9) -- -- 130,872 -- Dividends, Net of Foreign Tax Withheld* (Note 1) -- -- 1,463,597 -- Other Income -- -- -- -- - ---------------------------------------------------------------------------------------------------------------------- Total Income -- -- 2,134,032 -- - ---------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 4) -- -- 3,498,384 -- Transfer Agent and Administrative Fees (Note 4) 371,431 575,047 1,166,128 276,003 Distribution & Service Fees (Note 4): Advisor Class 137,798 101,098 71,697 30,925 A-Class 31,042 14,051 2,562 4,333 C-Class 258,569 230,169 79,296 84,549 H-Class -- -- -- -- Portfolio Accounting Fees (Note 4) 143,103 204,135 310,998 110,057 Registration Fees 52,988 109,689 205,079 39,612 Trustees' Fees** 6,255 11,223 22,109 4,437 Miscellaneous 52,229 52,755 236,779 36,293 - ---------------------------------------------------------------------------------------------------------------------- Total Expenses 1,053,415 1,298,167 5,593,032 586,209 - ---------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (1,053,415) (1,298,167) (3,459,000) (586,209) ====================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 7,517,886 (14,975,874) 62,696,862 1,789,880 Equity Index Swaps -- -- -- -- Futures Contracts -- -- 1,112,816 -- - ---------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 7,517,886 (14,975,874) 63,809,678 1,789,880 - ---------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 11,227,044 653,599 13,264,440 (17,059,650) Equity Index Swaps -- -- -- -- Futures Contracts -- -- 10,089 -- - ---------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 11,227,044 653,599 13,274,529 (17,059,650) - ---------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 18,744,930 (14,322,275) 77,084,207 (15,269,770) - ---------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 17,691,515 $(15,620,442) $ 73,625,207 $(15,855,979) ====================================================================================================================== * NET OF FOREIGN TAX WITHHELD OF $0, $0, $10,281, $0, $0, $0, $313, $0, $0, $0, $26,146, AND $0, RESPECTIVELY. ** RELATES TO TRUSTEES NOT DEEMED "INTERESTED PERSONS" WITHIN THE MEANING OF SECTION 2(a)(19) OF THE 1940 ACT. See Notes to Financial Statements. 90 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT Period Ended September 30, 2005 - -------------------------------------------------------------------------------- INVERSE INVERSE MEDIUS MID-CAP MEKROS SMALL-CAP FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 210,521 $ 197,426 $ 603,167 $ 793,629 Interest from Securities Lending, net (Note 9) 3,576 -- 25,365 -- Dividends, Net of Foreign Tax Withheld* (Note 1) 345,153 -- 593,905 -- Other Income 4,473 -- 411 -- - -------------------------------------------------------------------------------------------------------------------------- Total Income 563,723 197,426 1,222,848 793,629 - -------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 4) 334,960 59,617 712,914 222,524 Transfer Agent and Administrative Fees (Note 4) 93,044 16,560 198,032 61,812 Distribution & Service Fees (Note 4): Advisor Class -- -- -- -- A-Class 1,934 164 5,758 1,742 C-Class 88,051 2,725 145,596 17,505 H-Class 69,097 15,715 155,875 55,694 Portfolio Accounting Fees (Note 4) 37,218 6,624 79,159 24,725 Registration Fees 12,557 2,579 26,081 6,511 Trustees' Fees** 1,452 261 3,452 769 Miscellaneous 22,607 2,815 52,892 18,155 - -------------------------------------------------------------------------------------------------------------------------- Total Expenses 660,920 107,060 1,379,759 409,437 - -------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (97,197) 90,366 (156,911) 384,192 ========================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 2,795,771 -- 4,952,435 -- Equity Index Swaps 1,824,925 266,237 2,900,291 (1,980,728) Futures Contracts 1,694,988 (19,667) 3,690,886 (801,361) - -------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 6,315,684 246,570 11,543,612 (2,782,089) - -------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 1,227,333 -- 4,461,643 -- Equity Index Swaps 34,673 (21,726) 1,194,353 (1,034,175) Futures Contracts 218,489 (127,541) 345,561 (230,969) - -------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 1,480,495 (149,267) 6,001,557 (1,265,144) - -------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 7,796,179 97,303 17,545,169 (4,047,233) - -------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 7,698,982 $ 187,669 $ 17,388,258 $ (3,663,041) ========================================================================================================================== U.S. LARGE-CAP LARGE-CAP GOVERNMENT JUNO EUROPE JAPAN BOND FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 3,000,873 $ -- $ 479,218 $ 770,602 Interest from Securities Lending, net (Note 9) -- -- -- -- Dividends, Net of Foreign Tax Withheld* (Note 1) -- -- 408,874 -- Other Income -- -- -- 1,266 - -------------------------------------------------------------------------------------------------------------------------- Total Income 3,000,873 -- 888,092 771,868 - -------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 4) 330,631 -- 282,615 211,035 Transfer Agent and Administrative Fees (Note 4) 132,252 2,891,382 78,504 58,621 Distribution & Service Fees (Note 4): Advisor Class 219,893 364,409 -- -- A-Class 1,805 200,318 1,541 1,437 C-Class 55,291 3,909,543 21,754 16,726 H-Class -- -- 71,525 53,002 Portfolio Accounting Fees (Note 4) 66,126 518,028 31,402 23,449 Registration Fees 17,529 481,842 13,557 6,714 Trustees' Fees** 2,194 52,525 1,089 700 Miscellaneous 40,549 308,442 17,540 20,612 - -------------------------------------------------------------------------------------------------------------------------- Total Expenses 866,270 8,726,489 519,527 392,296 - -------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 2,134,603 (8,726,489) 368,565 379,572 ========================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 2,157,979 (100,159,932) (876,775) -- Equity Index Swaps -- -- (2,729,295) 810,538 Futures Contracts 1,089,637 -- -- 1,117,468 - -------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 3,247,616 (100,159,932) (3,606,070) 1,928,006 - -------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities (845,530) 504,135 3,201,592 -- Equity Index Swaps -- -- 3,781,782 7,533,447 Futures Contracts (257,236) -- -- 2,261,611 - -------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) (1,102,766) 504,135 6,983,374 9,795,058 - -------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 2,144,850 (99,655,797) 3,377,304 11,723,064 - -------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 4,279,453 $(108,382,286) $ 3,745,869 $ 12,102,636 ========================================================================================================================== THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 91 STATEMENTS OF OPERATIONS (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- SMALL-CAP MID-CAP LARGE-CAP SMALL-CAP VALUE VALUE VALUE GROWTH FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 7,249 $ 11,691 $ 3,821 $ 6,102 Interest from Securities Lending, net (Note 9) 4,830 14,511 5,477 8,396 Dividends, Net of Foreign Tax Withheld* (Note 1) 431,543 955,074 575,428 250,649 Other Income -- -- 214 -- - -------------------------------------------------------------------------------------------------------------------- Total Income 443,622 981,276 584,940 265,147 - -------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 4) 276,038 499,027 214,281 249,587 Transfer Agent and Administrative Fees (Note 4) 92,013 166,342 71,427 83,196 Distribution & Service Fees (Note 4): Advisor Class -- -- -- -- A-Class 2,290 2,860 2,626 2,788 C-Class 39,330 36,719 49,330 19,641 H-Class 79,890 154,302 56,469 75,497 Portfolio Accounting Fees (Note 4) 36,805 66,537 28,571 33,278 Registration Fees 15,118 19,878 10,242 10,389 Trustees' Fees** 2,040 2,805 1,161 1,528 Miscellaneous 19,894 44,608 18,904 25,786 - -------------------------------------------------------------------------------------------------------------------- Total Expenses 563,418 993,078 453,011 501,690 - -------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (119,796) (11,802) 131,929 (236,543) - -------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 4,240,673 4,562,364 (165,956) 1,910,445 Currency Index Swaps -- -- -- -- Futures Contracts (50,455) -- -- -- - -------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 4,190,218 4,562,364 (165,956) 1,910,445 - -------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities (2,417,823) 6,478,514 2,114,891 3,998,790 Currency Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - -------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) (2,417,823) 6,478,514 2,114,891 3,998,790 - -------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 1,772,395 11,040,878 1,948,935 5,909,235 - -------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 1,652,599 $ 11,029,076 $ 2,080,864 $ 5,672,692 - -------------------------------------------------------------------------------------------------------------------- * NET OF FOREIGN TAX WITHHELD OF $0, $0, $0, $0, $0, $0, $0, $0, AND $0, RESPECTIVELY. ** RELATES TO TRUSTEES NOT DEEMED "INTERESTED PERSONS" WITHIN THE MEANING OF SECTION 2(a)(19) OF THE 1940 ACT. *** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 25, 2005. See Notes to Financial Statements. 92 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT Period Ended September 30, 2005 - -------------------------------------------------------------------------------- U.S. MID-CAP LARGE-CAP STRENGTHENING WEAKENING GOVERNMENT GROWTH GROWTH DOLLAR DOLLAR MONEY FUND FUND FUND*** FUND*** MARKET FUND - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 5,910 $ 4,042 $ 117,689 $ 129,265 $ 24,339,947 Interest from Securities Lending, net (Note 9) 3,277 1,294 -- -- 9,228 Dividends, Net of Foreign Tax Withheld* (Note 1) 207,413 317,960 -- -- -- Other Income -- -- -- -- 177,477 - ----------------------------------------------------------------------------------------------------------------------------------- Total Income 216,600 323,296 117,689 129,265 24,526,652 - ----------------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 4) 196,113 159,123 32,535 33,683 3,854,579 Transfer Agent and Administrative Fees (Note 4) 65,371 53,041 9,038 9,356 1,541,832 Distribution & Service Fees (Note 4): Advisor Class -- -- -- -- 510,051 A-Class 2,818 927 103 128 12,665 C-Class 10,386 42,557 2,482 2,698 805,301 H-Class 59,956 41,475 8,315 8,554 -- Portfolio Accounting Fees (Note 4) 26,148 21,216 3,615 3,742 402,337 Registration Fees 7,955 4,943 574 302 204,153 Trustees' Fees** 1,007 556 193 70 26,055 Miscellaneous 17,127 14,422 3,606 4,659 526,611 - ----------------------------------------------------------------------------------------------------------------------------------- Total Expenses 386,881 338,260 60,461 63,192 7,883,584 - ----------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (170,281) (14,964) 57,228 66,073 16,643,068 - ----------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 523,084 (1,849,092) -- -- (3,736) Currency Index Swaps -- -- (420,086) (159,279) -- Futures Contracts -- -- (7,480) (17,900) -- - ----------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 523,084 (1,849,092) (427,566) (177,179) (3,736) - ----------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 3,343,098 1,521,147 -- -- -- Currency Index Swaps -- -- 117,396 (879,487) -- Futures Contracts -- -- 15,968 -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 3,343,098 1,521,147 133,364 (879,487) -- - ----------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 3,866,182 (327,945) (294,202) (1,056,666) (3,736) - ----------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 3,695,901 $ (342,909) $ (236,974) $ (990,593) $ 16,639,332 - ----------------------------------------------------------------------------------------------------------------------------------- THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 93 STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- NOVA FUND URSA FUND - --------------------------------------------------------------------------------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (1,053,415) $ (2,273,423) $ (1,298,167) $ (2,807,391) Net Realized Gain (Loss) on Investments 7,517,886 21,079,462 (14,975,874) (48,980,060) Net Change in Unrealized Appreciation (Depreciation) on Investments 11,227,044 (1,387,053) 653,599 8,268,455 - --------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 17,691,515 17,418,986 (15,620,442) (43,518,996) - --------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- - --------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- -- ========================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 408,588,967 1,414,735,507 487,656,858 1,531,545,815 Advisor Class 137,998,423 370,298,449 110,938,874 250,858,378 A-Class 16,818,416 23,896,367 12,442,594 15,446,772 C-Class 42,421,829 168,553,867 42,614,199 157,946,561 H-Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (435,114,692) (1,436,144,681) (416,036,873) (1,524,063,187) Advisor Class (132,399,330) (368,804,662) (112,510,945) (250,498,960) A-Class (9,963,706) (6,350,348) (4,334,253) (7,698,808) C-Class (43,376,598) (154,161,133) (38,448,032) (156,062,212) H-Class -- -- -- -- ========================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (15,026,691) 12,023,366 82,322,422 17,474,359 - --------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 2,664,824 29,442,352 66,701,980 (26,044,637) NET ASSETS--BEGINNING OF PERIOD 295,609,575 266,167,223 418,129,649 444,174,286 - --------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 298,274,399 $ 295,609,575 $ 484,831,629 $ 418,129,649 ========================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (1,053,415) $ -- $ (1,298,167) $ -- ========================================================================================================= OTC FUND - ------------------------------------------------------------------------ PERIOD YEAR ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - ------------------------------------------------------------------------ FROM OPERATIONS Net Investment Income (Loss) $ (3,459,000) $ 3,339,815 Net Realized Gain (Loss) on Investments 63,809,678 36,800,772 Net Change in Unrealized Appreciation (Depreciation) on Investments 13,274,529 (29,857,804) - ------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets from Operations 73,625,207 10,282,783 - ------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Realized Gain on Investment Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- - ------------------------------------------------------------------------ Total Distributions to Shareholders -- -- ======================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 480,425,383 1,396,741,796 Advisor Class 130,762,137 207,549,823 A-Class 1,209,108 3,898,356 C-Class 27,172,175 124,003,724 H-Class -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- COST OF SHARES REDEEMED Investor Class (473,094,471) (1,467,509,576) Advisor Class (126,870,589) (242,728,205) A-Class (983,779) (2,044,524) C-Class (26,890,767) (122,887,409) H-Class -- -- ======================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 11,729,197 (102,976,015) - ------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets 85,354,404 (92,693,232) NET ASSETS--BEGINNING OF PERIOD 837,312,090 930,005,322 - ------------------------------------------------------------------------ NET ASSETS--END OF PERIOD $ 922,666,494 $ 837,312,090 ======================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (119,185) $ 3,339,815 ======================================================================== + UNAUDITED See Notes to Financial Statements. 94 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ARKTOS FUND MEDIUS FUND - --------------------------------------------------------------------------------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (586,209) $ (1,341,198) $ (97,197) $ (255,319) Net Realized Gain (Loss) on 1,789,880 (32,513,314) 6,315,684 1,778,274 Investments Net Change in Unrealized Appreciation (Depreciation) on Investments (17,059,650) 8,512,163 1,480,495 (3,182,386) - --------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (15,855,979) (25,342,349) 7,698,982 (1,659,431) - --------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- - --------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- -- ========================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 346,017,050 975,342,608 -- -- Advisor Class 28,772,209 113,835,651 -- -- A-Class 4,825,206 17,225,239 1,580,751 1,765,474 C-Class 37,053,088 144,800,328 49,107,371 159,054,038 H-Class -- -- 379,157,640 996,786,478 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (353,115,868) (967,546,717) -- -- Advisor Class (33,048,246) (111,775,526) -- -- A-Class (7,915,739) (11,578,445) (1,023,446) (828,790) C-Class (35,455,046) (160,566,879) (51,399,573) (156,154,210) H-Class -- -- (397,598,333) (1,003,368,485) ========================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (12,867,346) (263,741) (20,175,590) (2,745,495) - --------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (28,723,325) (25,606,090) (12,476,608) (4,404,926) NET ASSETS--BEGINNING OF PERIOD 236,738,558 262,344,648 78,235,574 82,640,500 - --------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 208,015,233 $236,738,558 $ 65,758,966 $ 78,235,574 ========================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (586,209) $ -- $ (97,197) $ -- ========================================================================================================= INVERSE MID-CAP FUND MEKROS FUND - ------------------------------------------------------------------------------------------------------------ PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net Investment Income (Loss) $ 90,366 $ 36,605 $ (156,911) $ (731,099) Net Realized Gain (Loss) on 246,570 (1,445,631) 11,543,612 (18,989,715) Investments Net Change in Unrealized Appreciation (Depreciation) on Investments (149,267) 152,438 6,001,557 (5,531,934) - ------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets from Operations 187,669 (1,256,588) 17,388,258 (25,252,748) - ------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- (14,390) C-Class -- -- -- (270,032) H-Class -- -- -- (1,081,935) - ------------------------------------------------------------------------------------------------------------ Total Distributions to Shareholders -- -- -- (1,366,357) ============================================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class 504,389 448,770 6,009,671 8,906,688 C-Class 8,293,138 29,108,039 89,717,869 310,997,432 H-Class 94,417,404 283,941,863 1,330,580,947 2,891,277,659 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- 12,877 C-Class -- -- -- 243,160 H-Class -- -- -- 984,732 COST OF SHARES REDEEMED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class (69,948) (374,744) (4,779,262) (5,593,228) C-Class (8,891,029) (28,127,040) (80,852,915) (338,792,919) H-Class (117,476,912) (255,412,567) (1,301,774,256) (2,974,253,320) ============================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (23,222,958) 29,584,321 38,902,054 (106,216,919) - ------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets (23,035,289) 28,327,733 56,290,312 (132,836,024) NET ASSETS--BEGINNING OF PERIOD 31,144,201 2,816,468 90,339,137 223,175,161 - ------------------------------------------------------------------------------------------------------------ NET ASSETS--END OF PERIOD $ 8,108,912 $ 31,144,201 $ 146,629,449 $ 90,339,137 ============================================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 126,971 $ 36,605 $ (156,911) $ -- ============================================================================================================ THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 95 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - -------------------------------------------------------------------------------- INVERSE U.S. GOVERNMENT SMALL-CAP FUND BOND FUND - ------------------------------------------------------------------------------------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 384,192 $ (80,795) $ 2,134,603 $ 3,708,280 Net Realized Gain (Loss) on Investments (2,782,089) (7,206,842) 3,247,616 (1,346,203) Net Change in Unrealized Appreciation (Depreciation) on Investments (1,265,144) 888,314 (1,102,766) 2,000,504 - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (3,663,041) (6,399,323) 4,279,453 4,362,581 - ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- (580,343) (1,418,873) Advisor Class -- -- (1,382,333) (2,006,148) A-Class -- -- (24,621) (18,194) C-Class -- -- (147,306) (265,065) H-Class -- -- -- -- Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- - ------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- (2,134,603) (3,708,280) ============================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- 282,248,780 662,404,726 Advisor Class -- -- 525,260,550 515,073,887 A-Class 3,897,561 2,607,402 3,345,078 5,373,963 C-Class 31,375,991 142,203,545 67,113,354 197,577,382 H-Class 363,537,281 888,534,477 -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- 489,426 1,287,117 Advisor Class -- -- 1,366,888 2,005,277 A-Class -- -- 12,205 11,629 C-Class -- -- 138,185 248,777 H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class -- -- (285,214,683) (663,011,921) Advisor Class -- -- (536,347,513) (511,396,631) A-Class (3,318,984) (2,194,768) (4,071,713) (3,603,761) C-Class (29,874,937) (136,603,063) (71,721,259) (190,349,672) H-Class (364,276,047) (842,508,878) -- -- ============================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 1,340,865 52,038,715 (17,380,702) 15,620,773 - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (2,322,176) 45,639,392 (15,235,852) 16,275,074 NET ASSETS--BEGINNING OF PERIOD 51,186,137 5,546,745 91,983,095 75,708,021 - ------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 48,863,961 $ 51,186,137 $ 76,747,243 $ 91,983,095 ============================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 384,192 $ -- $ (19,463) $ (19,463) ============================================================================================================= JUNO FUND - ------------------------------------------------------------------------------ PERIOD YEAR ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - ------------------------------------------------------------------------------ FROM OPERATIONS Net Investment Income (Loss) $ (8,726,489) $ (20,248,028) Net Realized Gain (Loss) on Investments (100,159,932) (69,198,399) Net Change in Unrealized Appreciation (Depreciation) on Investments 504,135 (129,335,843) - ------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets from Operations (108,382,286) (218,782,270) - ------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- Realized Gain on Investment Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- - ------------------------------------------------------------------------------ Total Distributions to Shareholders -- -- ============================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 625,681,298 3,330,861,237 Advisor Class 182,818,995 517,196,846 A-Class 27,015,645 251,608,326 C-Class 96,965,285 1,006,573,970 H-Class -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- COST OF SHARES REDEEMED Investor Class (969,049,651) (2,639,552,558) Advisor Class (280,673,918) (323,759,333) A-Class (39,225,404) (65,491,818) C-Class (262,770,654) (529,212,607) H-Class -- -- ============================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (619,238,404) 1,548,224,063 - ------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets (727,620,690) 1,329,441,793 NET ASSETS--BEGINNING OF PERIOD 2,775,008,043 1,445,566,250 - ------------------------------------------------------------------------------ NET ASSETS--END OF PERIOD $2,047,387,353 $ 2,775,008,043 ============================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (8,726,489) $ -- ============================================================================== * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004 -- SMALL-CAP VALUE FUND A-CLASS AND MID-CAP VALUE FUND A-CLASS. + UNAUDITED See Notes to Financial Statements. 96 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT LARGE-CAP LARGE-CAP EUROPE FUND JAPAN FUND - ------------------------------------------------------------------------------------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 368,565 $ 129,997 $ 379,572 $ (151,091) Net Realized Gain (Loss) on Investments (3,606,070) 9,237,377 1,928,006 (24,241,072) Net Change in Unrealized Appreciation (Depreciation) on Investments 6,983,374 (2,440,717) 9,795,058 (15,901,073) - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 3,745,869 6,926,657 12,102,636 (40,293,236) - ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- (4,614) -- (4,728) C-Class -- (130,849) -- (87,423) H-Class -- (2,974,067) -- (858,925) Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- (110) -- (7,805) C-Class -- (3,107) -- (144,310) H-Class -- (70,630) -- (1,417,844) - ------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (3,183,377) -- (2,521,035) ============================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class 2,241,175 871,043 1,948,705 444,818 C-Class 32,104,496 66,363,449 7,540,798 25,378,294 H-Class 191,974,193 388,807,179 259,158,376 547,540,563 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- 4,723 -- 10,828 C-Class -- 128,867 -- 205,488 H-Class -- 2,925,682 -- 1,992,473 COST OF SHARES REDEEMED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class (674,661) (696,912) (971,998) (202,811) C-Class (31,853,272) (63,147,820) (6,699,982) (26,256,103) H-Class (172,999,870) (368,119,437) (171,061,072) (651,053,664) ============================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 20,792,061 27,196,774 89,914,827 (101,940,114) - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 24,537,930 30,940,054 102,017,463 (144,754,385) NET ASSETS--BEGINNING OF PERIOD 68,853,790 37,913,736 38,633,166 183,387,551 - ------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 93,391,720 $ 68,853,790 $ 140,650,629 $ 38,633,166 ============================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 368,565 $ -- $ 379,572 $ -- ============================================================================================================= SMALL-CAP MID-CAP VALUE FUND VALUE FUND - --------------------------------------------------------------------------------------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (119,796) $ (46,572) $ (11,802) $ 468,799 Net Realized Gain (Loss) on Investments 4,190,218 (3,122,751) 4,562,364 (6,886,526) Net Change in Unrealized Appreciation (Depreciation) on Investments (2,417,823) 8,800,847 6,478,514 10,298,850 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 1,652,599 5,631,524 11,029,076 3,881,123 - --------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- (1) C-Class -- -- -- (27) H-Class -- -- -- (2,201) Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- (346) -- (202) C-Class -- (29,580) -- (4,272) H-Class -- (793,116) -- (345,666) - --------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (823,042) -- (352,369) =============================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class 12,088,971 3,620,459* 2,774,143 2,295,545* C-Class 74,720,544 53,306,968 74,817,679 74,078,406 H-Class 271,661,823 815,754,097 363,875,253 640,902,168 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- 322* -- 203* C-Class -- 29,555 -- 4,206 H-Class -- 737,999 -- 344,422 COST OF SHARES REDEEMED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class (12,885,492) (2,879,033)* (2,693,151) ( 1,989,278)* C-Class (84,471,016) (43,424,125) (70,358,332) (66,363,111) H-Class (309,776,291) (765,479,308) (381,526,113) (546,771,708) =============================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (48,661,461) 61,666,934 (13,110,521) 102,500,853 - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (47,008,862) 66,475,416 (2,081,445) 106,029,607 NET ASSETS--BEGINNING OF PERIOD 88,581,722 22,106,306 124,802,999 18,773,392 - --------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 41,572,860 $ 88,581,722 $ 122,721,554 $ 124,802,999 =============================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (119,796) $ -- $ (11,802) $ -- =============================================================================================================== THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 97 STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED) - -------------------------------------------------------------------------------- LARGE-CAP SMALL-CAP VALUE FUND GROWTH FUND - ------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 131,929 $ 410,050 $ (236,543) $ (526,505) Net Realized Gain (Loss) on Investments (165,956) 3,485,343 1,910,445 1,784,678 Net Change in Unrealized Appreciation (Depreciation) on Investments 2,114,891 3,747,358 3,998,790 4,676,353 - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 2,080,864 7,642,751 5,672,692 5,934,526 - ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- (10) -- -- H-Class -- (152) -- -- Institutional Class -- -- -- -- Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- (109) -- (756) C-Class -- (7,716) -- (41,366) H-Class -- (119,048) -- (975,731) Institutional Class -- -- -- -- - ------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (127,035) -- (1,017,853) ============================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class 3,888,388 618,842** 3,504,565 132,229** C-Class 134,332,108 62,540,030 38,535,309 68,843,123 H-Class 201,371,049 564,704,785 334,534,362 665,148,507 Institutional Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- 60** -- 716** C-Class -- 7,724 -- 40,214 H-Class -- 118,432 -- 959,499 Institutional Class -- -- -- -- COST OF SHARES REDEEMED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class (3,172,607) (410,264)** (3,434,574) (58,702)** C-Class (135,210,543) (60,564,073) (30,897,604) (69,112,781) H-Class (178,219,401) (555,417,649) (264,548,316) (646,986,972) Institutional Class -- -- -- -- ============================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 22,988,994 11,597,887 77,693,742 18,965,833 - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 25,069,858 19,113,603 83,366,434 23,882,506 NET ASSETS--BEGINNING OF PERIOD 29,820,407 10,706,804 28,931,977 5,049,471 - ------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 54,890,265 $ 29,820,407 $ 112,298,411 $ 28,931,977 ============================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 131,929 $ -- $ (236,543) $ -- ============================================================================================================= MID-CAP GROWTH FUND - ----------------------------------------------------------------------------- PERIOD PERIOD ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - ----------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (170,281) $ (212,500) Net Realized Gain (Loss) on Investments 523,084 (1,424,940) Net Change in Unrealized Appreciation (Depreciation) on Investments 3,343,098 2,779,507 - ----------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 3,695,901 1,142,067 - ----------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- Institutional Class -- -- Realized Gain on Investment Investor Class -- -- Advisor Class -- -- A-Class -- (22) C-Class -- (287) H-Class -- (12,942) Institutional Class -- -- - ----------------------------------------------------------------------------- Total Distributions to Shareholders -- (13,251) ============================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- Advisor Class -- -- A-Class 3,705,187 545,453** C-Class 32,837,769 25,785,410 H-Class 205,639,882 387,644,386 Institutional Class -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- Advisor Class -- -- A-Class -- 22** C-Class -- 286 H-Class -- 12,834 Institutional Class -- -- COST OF SHARES REDEEMED Investor Class -- -- Advisor Class -- -- A-Class (3,838,542) -- C-Class (34,089,026) (24,651,663) H-Class (192,110,991) (365,662,253) Institutional Class -- -- ============================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 12,144,279 23,674,475 - ----------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 15,840,180 24,803,291 NET ASSETS--BEGINNING OF PERIOD 26,600,080 1,796,789 - ----------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 42,440,260 $ 26,600,080 ============================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (170,281) $ -- ============================================================================= * SINCE THE COMMENCEMENT OF OPERATIONS: MAY 25, 2005. ** SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004-- LARGE-CAP VALUE FUND A-CLASS, SMALL-CAP GROWTH FUND A-CLASS, MID-CAP GROWTH FUND A-CLASS, AND LARGE-CAP GROWTH FUND A-CLASS. + UNAUDITED See Notes to Financial Statements. 98 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT LARGE-CAP STRENGTHENING WEAKENING GROWTH FUND DOLLAR FUND DOLLAR FUND - ------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, SEPTEMBER 30, 2005+ 2005 2005*+ 2005*+ - ------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (14,964) $ 321,255 $ 57,228 $ 66,073 Net Realized Gain (Loss) on Investments (1,849,092) (1,018,528) (427,566) (177,179) Net Change in Unrealized Appreciation (Depreciation) on Investments 1,521,147 780,293 133,364 (879,487) - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (342,909) 83,020 (236,974) (990,593) - ------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- Institutional Class -- -- -- -- Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- (1) -- -- C-Class -- (153) -- -- H-Class -- (8,523) -- -- Institutional Class -- -- -- -- - ------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (8,677) -- -- ============================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- -- -- -- Advisor Class -- -- -- A-Class 4,304,995 79,261** 544,396 693,854 C-Class 116,148,166 108,039,150 3,879,535 2,701,139 H-Class 182,236,176 387,101,308 92,252,397 68,077,259 Institutional Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- 153 -- -- H-Class -- 8,519 -- -- Institutional Class -- -- -- -- COST OF SHARES REDEEMED Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class (4,081,509) (6,027)** (456,625) (273,073) C-Class (132,501,096) (88,139,430) (2,675,515) (2,069,677) H-Class (170,243,941) (376,411,238) (82,429,965) (51,801,207) Institutional Class -- -- -- -- ============================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (4,137,209) 30,671,696 11,114,223 17,328,295 - ------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (4,480,118) 30,746,039 10,877,249 16,337,702 NET ASSETS--BEGINNING OF PERIOD 31,538,977 792,938 -- -- - ------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 27,058,859 $ 31,538,977 $ 10,877,249 $ 16,337,702 ============================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (14,964) $ -- $ 57,228 $ 66,073 ============================================================================================================= U.S. GOVERNMENT MONEY MARKET FUND - -------------------------------------------------------------------------------- PERIOD YEAR ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - -------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 16,643,068 $ 10,462,879 Net Realized Gain (Loss) on Investments (3,736) -- Net Change in Unrealized Appreciation (Depreciation) on Investments -- -- - -------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 16,639,332 10,462,879 - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class (13,586,653) (9,062,878) Advisor Class (1,875,041) (868,123) A-Class (107,586) (39,838) C-Class (1,073,788) (306,404) H-Class -- -- Institutional Class -- (185,636) Realized Gain on Investment Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- Institutional Class -- -- - -------------------------------------------------------------------------------- Total Distributions to Shareholders (16,643,068) (10,462,879) ================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 9,159,091,282 18,938,656,129 Advisor Class 1,488,027,522 3,577,821,000 A-Class 37,444,317 23,938,925 C-Class 1,212,221,507 2,540,283,761 H-Class -- -- Institutional Class -- 928 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class 13,372,680 8,918,802 Advisor Class 1,842,945 853,605 A-Class 57,707 22,293 C-Class 1,016,242 282,882 H-Class -- -- Institutional Class -- 20,804 COST OF SHARES REDEEMED Investor Class (9,200,273,680) (18,808,627,729) Advisor Class (1,553,901,339) (3,582,384,097) A-Class (34,662,937) (16,627,319) C-Class (1,208,728,059) (2,515,971,843) H-Class -- -- Institutional Class -- (50,021,804) ================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (84,491,813) 117,166,337 - -------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (84,495,549) 117,166,337 NET ASSETS--BEGINNING OF PERIOD 1,604,902,239 1,487,735,902 - -------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 1,520,406,690 $ 1,604,902,239 ================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ -- $ -- ================================================================================ THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 99 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - -------------------------------------------------------------------------------------------------------------------------------- NOVA FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ 25.96 $ (.06) $ 1.81 $ 1.75 $ -- March 31, 2005 24.12 (.11) 1.95 1.84 -- March 31, 2004 15.54 .07 8.51 8.58 -- March 31, 2003 25.56 .08 (10.10) (10.02) -- March 31, 2002 26.85 .12 (1.28) (1.16) (.13) March 31, 2001 41.93 .33 (15.41) (15.08) -- NOVA FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 25.08 (.12) 1.74 1.62 -- March 31, 2005 23.42 (.23) 1.89 1.66 -- March 31, 2004 15.17 (.05) 8.30 8.25 -- March 31, 2003 25.11 (.03) (9.91) (9.94) -- March 31, 2002 26.52 (.01) (1.27) (1.28) (.13) March 31, 2001 41.63 .16 (15.27) (15.11) -- NOVA FUND A-CLASS SEPTEMBER 30, 2005@ 25.15 (.09) 1.74 1.65 -- March 31, 2005 23.42 (.17) 1.90 1.73 -- March 31, 2004* 23.42 -- -- -- -- NOVA FUND C-CLASS SEPTEMBER 30, 2005@ 24.89 (.18) 1.73 1.55 -- March 31, 2005 23.36 (.35) 1.88 1.53 -- March 31, 2004 15.20 (.12) 8.28 8.16 -- March 31, 2003 25.28 (.08) (10.00) (10.08) -- March 31, 2002 26.84 (.18) (1.25) (1.43) (.13) March 31, 2001* 27.18 (.01) (.33) (.34) -- URSA FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 8.69 (.02) (.22) (.24) -- March 31, 2005 9.17 (.04) (.44) (.48) -- March 31, 2004 13.06 (.04) (3.45) (3.49) -- March 31, 2003 10.45 .01 2.67 2.68 (.07) March 31, 2002 10.43 .16 (.10) .06 (.04) March 31, 2001 7.68 .40 2.41 2.81 (.06) URSA FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 8.36 (.04) (.21) (.25) -- March 31, 2005 8.87 (.08) (.43) (.51) -- March 31, 2004 12.70 (.09) (3.34) (3.43) -- March 31, 2003 10.22 (.06) 2.61 2.55 (.07) March 31, 2002 10.26 .09 (.09) -- (.04) March 31, 2001 7.61 .43 2.28 2.71 (.06) URSA FUND A-CLASS SEPTEMBER 30, 2005@ 8.37 (.03) (.23) (.26) -- March 31, 2005 8.87 (.06) (.44) (.50) -- March 31, 2004* 8.87 -- -- -- -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - -------------------------------------------------------------------------------------------------------------------------------- NOVA FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ 1.75 $ 27.71 6.74% March 31, 2005 -- -- 1.84 25.96 7.63% March 31, 2004 -- -- 8.58 24.12 55.25% March 31, 2003 -- -- (10.02) 15.54 (39.20)% March 31, 2002 -- (.13) (1.29) 25.56 (4.36)% March 31, 2001 -- -- (15.08) 26.85 (35.96)% NOVA FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- -- 1.62 26.70 6.46% March 31, 2005 -- -- 1.66 25.08 7.09% March 31, 2004 -- -- 8.25 23.42 54.42% March 31, 2003 -- -- (9.94) 15.17 (39.59)% March 31, 2002 -- (.13) (1.41) 25.11 (4.87)% March 31, 2001 -- -- (15.11) 26.52 (36.30)% NOVA FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 1.65 26.80 6.56% March 31, 2005 -- -- 1.73 25.15 7.39% March 31, 2004* -- -- -- 23.42 0.00% NOVA FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 1.55 26.44 6.23% March 31, 2005 -- -- 1.53 24.89 6.55% March 31, 2004 -- -- 8.16 23.36 53.72% March 31, 2003 -- -- (10.08) 15.20 (39.87)% March 31, 2002 -- (.13) (1.56) 25.28 (5.37)% March 31, 2001* -- -- (.34) 26.84 (1.25)% URSA FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- -- (.24) 8.45 (2.76)% March 31, 2005 -- -- (.48) 8.69 (5.23)% March 31, 2004 (.40) (.40) (3.89) 9.17 (26.90)% March 31, 2003 -- (.07) 2.61 13.06 25.65% March 31, 2002 -- (.04) .02 10.45 0.60% March 31, 2001 -- (.06) 2.75 10.43 36.68% URSA FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- -- (.25) 8.11 (2.99)% March 31, 2005 -- -- (.51) 8.36 (5.75)% March 31, 2004 (.40) (.40) (3.83) 8.87 (27.19)% March 31, 2003 -- (.07) 2.48 12.70 24.95% March 31, 2002 -- (.04) (.04) 10.22 0.02% March 31, 2001 -- (.06) 2.65 10.26 35.70% URSA FUND A-CLASS SEPTEMBER 30, 2005@ -- -- (.26) 8.11 (3.11)% March 31, 2005 -- -- (.50) 8.37 (5.64)% March 31, 2004* -- -- -- 8.87 0.00% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - -------------------------------------------------------------------------------------------------------------------------------- NOVA FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.20%**++ 1.20%**++ (0.42)%** 114% $ 157,916 March 31, 2005 1.21%++ 1.21%++ (0.44)% 388% 175,042 March 31, 2004 1.25%++ 1.25%++ 0.35% 540% 187,051 March 31, 2003 1.27%++ 1.27%++ 0.44% 603% 130,951 March 31, 2002 1.16%++ 1.16%++ 0.44% 401% 222,251 March 31, 2001 1.34% 1.33% 0.89% 117% 251,333 NOVA FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.71%**++ 1.71%**++ (0.93)%** 114% 61,709 March 31, 2005 1.71%++ 1.71%++ (0.94)% 388% 52,642 March 31, 2004 1.74%++ 1.74%++ (0.24)% 540% 46,405 March 31, 2003 1.77%++ 1.77%++ (0.17)% 603% 27,130 March 31, 2002 1.55%++ 1.55%++ (0.02)% 401% 59,375 March 31, 2001 1.87% 1.87% 0.45% 117% 38,184 NOVA FUND A-CLASS SEPTEMBER 30, 2005@ 1.46%**++ 1.46%**++ (0.68)%** 114% 27,078 March 31, 2005 1.45%++ 1.45%++ (0.68)% 388% 18,463 March 31, 2004* 0.00%**++~ 0.00%**++~ 0.00%** 540% 1 NOVA FUND C-CLASS SEPTEMBER 30, 2005@ 2.22%**++ 2.22%**++ (1.44)%** 114% 51,572 March 31, 2005 2.21%++ 2.21%++ (1.44)% 388% 49,464 March 31, 2004 2.26%++ 2.26%++ (0.56)% 540% 32,710 March 31, 2003 2.28%++ 2.28%++ (0.46)% 603% 12,627 March 31, 2002 2.27%++ 2.27%++ (0.72)% 401% 10,355 March 31, 2001* 1.86%** 1.77%** (0.98)%** 117% 111 URSA FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.35%**++ 1.35%**++ (0.42)%** -- 385,667 March 31, 2005 1.38%++ 1.38%++ (0.46)% -- 326,085 March 31, 2004 1.38%++ 1.38%++ (0.37)% -- 353,496 March 31, 2003 1.41%++ 1.41%++ 0.06% -- 471,600 March 31, 2002 1.31%++ 1.31%++ 1.56% -- 214,498 March 31, 2001 1.37%++ 1.37%++ 4.69% -- 222,939 URSA FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.85%**++ 1.85%**++ (0.92)%** -- 37,981 March 31, 2005 1.88%++ 1.88%++ (0.96)% -- 40,964 March 31, 2004 1.87%++ 1.87%++ (0.86)% -- 45,073 March 31, 2003 1.89%++ 1.89%++ (0.45)% -- 39,686 March 31, 2002 1.85%++ 1.85%++ 0.87% -- 7,036 March 31, 2001 1.86%++ 1.86%++ 4.92% -- 2,860 URSA FUND A-CLASS SEPTEMBER 30, 2005@ 1.61%**++ 1.61%**++ (0.68)%** -- 14,974 March 31, 2005 1.63%++ 1.63%++ (0.71)% -- 7,318 March 31, 2004* 0.00%**++~ 0.00%**++~ 0.00%** -- 1 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 14, 2001 -- NOVA FUND C-CLASS; MARCH 31, 2004 -- NOVA FUND A-CLASS AND URSA FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ++ RATIOS TO AVERAGE NET ASSETS INCLUDE EXPENSES OF THE CORRESPONDING MASTER PORTFOLIO. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED 100 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ---------------------------------------------------------------------------------------------------------------- URSA FUND C-CLASS SEPTEMBER 30, 2005@ $ 8.33 $ (.06) $ (.21) $ (.27) $ -- March 31, 2005 8.89 (.13) (.43) (.56) -- March 31, 2004 12.80 (.14) (3.37) (3.51) -- March 31, 2003 10.35 (.12) 2.64 2.52 (.07) March 31, 2002 10.43 (.03) (.01) (.04) (.04) March 31, 2001* 10.29 .01 .13 .14 -- OTC FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 9.94 (.04) .88 .84 -- March 31, 2005 9.73 .04 .17 .21 -- March 31, 2004 7.02 (.09) 2.80 2.71 -- March 31, 2003 10.16 (.08) (3.06) (3.14) -- March 31, 2002 11.19 (.11) (.92) (1.03) -- March 31, 2001 32.40 (.24) (20.80) (21.04) -- OTC FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 9.60 (.06) .84 .78 -- March 31, 2005 9.46 (.02) .16 .14 -- March 31, 2004 6.85 (.13) 2.74 2.61 -- March 31, 2003 9.97 (.11) (3.01) (3.12) -- March 31, 2002 11.04 (.16) (.91) (1.07) -- March 31, 2001 32.16 (.35) (20.60) (20.95) -- OTC FUND A-CLASS SEPTEMBER 30, 2005@ 9.63 (.05) .85 .80 -- March 31, 2005 9.46 .06 .11 .17 -- March 31, 2004* 9.46 -- -- -- -- OTC FUND C-CLASS SEPTEMBER 30, 2005@ 9.50 (.09) .84 .75 -- March 31, 2005 9.41 (.03) .12 .09 -- March 31, 2004 6.86 (.18) 2.73 2.55 -- March 31, 2003 10.03 (.14) (3.03) (3.17) -- March 31, 2002 11.20 (.21) (.96) (1.17) -- March 31, 2001* 11.95 -- (.75) (.75) -- ARKTOS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 24.55 (.05) (1.45) (1.50) -- March 31, 2005 25.69 (.11) (1.03) (1.14) -- March 31, 2004 37.79 (.13) (11.97) (12.10) -- March 31, 2003 32.29 7.34 (.70) 6.64 (1.14) March 31, 2002 35.76 1.01 (4.19) (3.18) (.29) March 31, 2001 17.45 1.08 17.23 18.31 -- ARKTOS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 24.34 (.11) (1.42) (1.53) -- March 31, 2005 25.60 (.24) (1.02) (1.26) -- March 31, 2004* 29.97 (.16) (4.21) (4.37) -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENTS CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - --------------------------------------------------------------------------------------------------------------- URSA FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ (.27) $ 8.06 (3.24)% March 31, 2005 -- -- (.56) 8.33 (6.30)% March 31, 2004 (.40) (.40) (3.91) 8.89 (27.62)% March 31, 2003 -- (.07) 2.45 12.80 24.35% March 31, 2002 -- (.04) (.08) 10.35 (0.36)% March 31, 2001* -- -- .14 10.43 1.36% OTC FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- -- .84 10.78 8.45% March 31, 2005 -- -- .21 9.94 2.16% March 31, 2004 -- -- 2.71 9.73 38.60% March 31, 2003 -- -- (3.14) 7.02 (30.91)% March 31, 2002 -- -- (1.03) 10.16 (9.20)% March 31, 2001 (.17) (.17) (21.21) 11.19 (65.19)% OTC FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- -- .78 10.38 8.13% March 31, 2005 -- -- .14 9.60 1.48% March 31, 2004 -- -- 2.61 9.46 38.10% March 31, 2003 -- -- (3.12) 6.85 (31.29)% March 31, 2002 -- -- (1.07) 9.97 (9.69)% March 31, 2001 (.17) (.17) (21.12) 11.04 (65.40)% OTC FUND A-CLASS SEPTEMBER 30, 2005@ -- -- .80 10.43 8.31% March 31, 2005 -- -- .17 9.63 1.80% March 31, 2004* -- -- -- 9.46 0.00% OTC FUND C-CLASS SEPTEMBER 30, 2005@ -- -- .75 10.25 7.89% March 31, 2005 -- -- .09 9.50 0.96% March 31, 2004 -- -- 2.55 9.41 37.17% March 31, 2003 -- -- (3.17) 6.86 (31.61)% March 31, 2002 -- -- (1.17) 10.03 (10.45)% March 31, 2001* -- -- (.75) 11.20 (6.28)% ARKTOS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- -- (1.50) 23.05 (6.11)% March 31, 2005 -- -- (1.14) 24.55 (4.44)% March 31, 2004 -- -- (12.10) 25.69 (32.02)% March 31, 2003 -- (1.14) 5.50 37.79 20.39% March 31, 2002 -- (.29) (3.47) 32.29 (8.84)% March 31, 2001 -- -- 18.31 35.76 104.93% ARKTOS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- -- (1.53) 22.81 (6.29)% March 31, 2005 -- -- (1.26) 24.34 (4.92)% March 31, 2004* -- -- (4.37) 25.60 (14.58)% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - --------------------------------------------------------------------------------------------------------- URSA FUND C-CLASS SEPTEMBER 30, 2005@ 2.36%**++ 2.36%**++ (1.43)%** -- $ 46,209 March 31, 2005 2.38%++ 2.38%++ (1.46)% -- 43,763 March 31, 2004 2.39%++ 2.39%++ (1.42)% -- 45,604 March 31, 2003 2.40%++ 2.40%++ (0.97)% -- 17,540 March 31, 2002 2.47%++ 2.47%++ (0.34)% -- 7,007 March 31, 2001* 2.15%**++ 2.15%**++ 3.04%** -- 35 OTC FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.18%** 1.18%** (0.72)%** 60% 878,830 March 31, 2005 1.20% 1.20% 0.40% 132% 801,185 March 31, 2004 1.22% 1.22% (0.98)% 139% 858,816 March 31, 2003 1.27% 1.27% (1.08)% 180% 653,999 March 31, 2002 1.08% 1.08% (0.96)% 109% 783,637 March 31, 2001 1.16% 1.16% (1.01)% 228% 1,043,848 OTC FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.68%** 1.68%** (1.21)%** 60% 25,780 March 31, 2005 1.69% 1.69% (0.25)% 132% 19,887 March 31, 2004 1.71% 1.71% (1.47)% 139% 57,535 March 31, 2003 1.76% 1.76% (1.56)% 180% 43,839 March 31, 2002 1.60% 1.60% (1.47)% 109% 20,837 March 31, 2001 1.67% 1.66% (1.50)% 228% 36,836 OTC FUND A-CLASS SEPTEMBER 30, 2005@ 1.43%** 1.43%** (0.97)%** 60% 2,200 March 31, 2005 1.45% 1.45% 0.59% 132% 1,818 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** 139% 1 OTC FUND C-CLASS SEPTEMBER 30, 2005@ 2.19%** 2.19%** (1.73)%** 60% 15,856 March 31, 2005 2.19% 2.19% (0.33)% 132% 14,422 March 31, 2004 2.23% 2.23% (1.97)% 139% 13,653 March 31, 2003 2.26% 2.26% (1.98)% 180% 8,331 March 31, 2002 2.24% 2.24% (2.13)% 109% 3,545 March 31, 2001* 2.37%** 2.09%** (2.03)%** 228% 32 ARKTOS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.36%**++ 1.36%**++ (0.43)%** -- 177,806 March 31, 2005 1.38%++ 1.38%++ (0.46)% -- 198,288 March 31, 2004 1.40%++ 1.40%++ (0.47)% -- 209,994 March 31, 2003 1.42%++ 1.42%++ 18.11% -- 146,416 March 31, 2002 1.35%++ 1.35%++ 3.16% -- 113,904 March 31, 2001 1.34%++ 1.33%++ 6.27% 1,788% 79,028 ARKTOS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.86%**++ 1.86%**++ (0.93)%** -- 11,943 March 31, 2005 1.88%++ 1.88%++ (0.96)% -- 17,059 March 31, 2004* 1.90%**++ 1.90%**++ (0.97)%** -- 17,975 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 15, 2001-- URSA FUND C-CLASS; MARCH 26, 2001-- OTC FUND C-CLASS; AUGUST 1, 2003-- ARKTOS FUND ADVISOR CLASS; MARCH 31, 2004 -- OTC FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. FOR YEARS AFTER MARCH 31, 2000, PORTFOLIO TURNOVER IS CALCULATED ONLY FOR ARKTOS MASTER PORTFOLIO. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ++ RATIOS TO AVERAGE NET ASSETS INCLUDE EXPENSES OF THE CORRESPONDING MASTER PORTFOLIO. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 101 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ---------------------------------------------------------------------------------------------------------------- ARKTOS FUND A-CLASS SEPTEMBER 30, 2005@ $ 24.39 $ (.08) $ (1.43) $ (1.51) $ -- March 31, 2005 25.60 (.17) (1.04) (1.21) -- March 31, 2004* 25.60 -- -- -- -- ARKTOS FUND C-CLASS SEPTEMBER 30, 2005@ 23.48 (.16) (1.38) (1.54) -- March 31, 2005 24.83 (.35) (1.00) (1.35) -- March 31, 2004 36.92 (.38) (11.71) (12.09) -- March 31, 2003 31.93 3.08 3.05 6.13 (1.14) March 31, 2002 35.74 .43 (3.95) (3.52) (.29) March 31, 2001* 29.14 -- 6.60 6.60 -- MEDIUS FUND A-CLASS SEPTEMBER 30, 2005@ 31.86 (.02) 3.73 3.71 -- March 31, 2005 28.30 (.03) 3.59 3.56 -- March 31, 2004* 28.30 -- -- -- -- MEDIUS FUND C-CLASS SEPTEMBER 30, 2005@ 31.03 (.14) 3.63 3.49 -- March 31, 2005 27.76 (.26) 3.53 3.27 -- March 31, 2004 15.85 (.31) 12.22 11.91 -- March 31, 2003 26.00 (.17) (9.87) (10.04) (.11) March 31, 2002* 24.53 (.13) 1.60 1.47 -- MEDIUS FUND H-CLASS SEPTEMBER 30, 2005@ 31.86 (.01) 3.74 3.73 -- March 31, 2005 28.30 (.06) 3.62 3.56 -- March 31, 2004 16.04 (.14) 12.40 12.26 -- March 31, 2003 26.08 (.07) (9.86) (9.93) (.11) March 31, 2002* 25.00 (.03) 1.11 1.08 -- INVERSE MID-CAP FUND A-CLASS SEPTEMBER 30, 2005@ 44.01 .38 (3.60) (3.22) -- March 31, 2005 49.01 (.06) (4.94) (5.00) -- March 31, 2004* 49.01 -- -- -- -- INVERSE MID-CAP FUND C-CLASS SEPTEMBER 30, 2005@ 43.62 .18 (3.52) (3.34) -- March 31, 2005 48.98 (.27) (5.09) (5.36) -- March 31, 2004* 50.00 (.08) (.94) (1.02) -- INVERSE MID-CAP FUND H-CLASS SEPTEMBER 30, 2005@ 44.01 .31 (3.52) (3.21) -- March 31, 2005 49.01 .18 (5.18) (5.00) -- March 31, 2004* 50.00 (.05) (.94) (.99) -- MEKROS FUND A-CLASS SEPTEMBER 30, 2005@ 27.54 (.01) 3.33 3.32 -- March 31, 2005 26.22 (.03) 1.51 1.48 -- March 31, 2004* 26.22 -- -- -- -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - -------------------------------------------------------------------------------------------------------------- ARKTOS FUND A-CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ (1.51) $ 22.88 (6.19)% March 31, 2005 -- -- (1.21) 24.39 (4.73)% March 31, 2004* -- -- -- 25.60 0.00% ARKTOS FUND C-CLASS SEPTEMBER 30, 2005@ -- -- (1.54) 21.94 (6.56)% March 31, 2005 -- -- (1.35) 23.48 (5.44)% March 31, 2004 -- -- (12.09) 24.83 (32.75)% March 31, 2003 -- (1.14) 4.99 36.92 19.02% March 31, 2002 -- (.29) (3.81) 31.93 (9.80)% March 31, 2001* -- -- 6.60 35.74 22.65% MEDIUS FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 3.71 35.57 11.64% March 31, 2005 -- -- 3.56 31.86 12.58% March 31, 2004* -- -- -- 28.30 0.00% MEDIUS FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 3.49 34.52 11.25% March 31, 2005 -- -- 3.27 31.03 11.78% March 31, 2004 -- -- 11.91 27.76 75.14% March 31, 2003 -- (.11) (10.15) 15.85 (38.65)% March 31, 2002* -- -- 1.47 26.00 5.99% MEDIUS FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 3.73 35.59 11.71% March 31, 2005 -- -- 3.56 31.86 12.58% March 31, 2004 -- -- 12.26 28.30 76.43% March 31, 2003 -- (.11) (10.04) 16.04 (38.11)% March 31, 2002* -- -- 1.08 26.08 4.32% INVERSE MID-CAP FUND A-CLASS SEPTEMBER 30, 2005@ -- -- (3.22) 40.79 (7.32)% March 31, 2005 -- -- (5.00) 44.01 (10.20)% March 31, 2004* -- -- -- 49.01 0.00% INVERSE MID-CAP FUND C-CLASS SEPTEMBER 30, 2005@ -- -- (3.34) 40.28 (7.66)% March 31, 2005 -- -- (5.36) 43.62 (10.94)% March 31, 2004* -- -- (1.02) 48.98 (2.04)% INVERSE MID-CAP FUND H-CLASS SEPTEMBER 30, 2005@ -- -- (3.21) 40.80 (7.29)% March 31, 2005 -- -- (5.00) 44.01 (10.20)% March 31, 2004* -- -- (.99) 49.01 (1.98)% MEKROS FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 3.32 30.86 12.06% March 31, 2005 (.16) (.16) 1.32 27.54 5.63% March 31, 2004* -- -- -- 26.22 0.00% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - --------------------------------------------------------------------------------------------------------- ARKTOS FUND A-CLASS SEPTEMBER 30, 2005@ 1.60%**++ 1.60%**++ (0.67)%** -- $ 2,338 March 31, 2005 1.62%++ 1.62%++ (0.70)% -- 5,697 March 31, 2004* 0.00%**++~ 0.00%**++~ 0.00%** -- 1 ARKTOS FUND C-CLASS SEPTEMBER 30, 2005@ 2.37%**++ 2.37%**++ (1.44)%** -- 15,928 March 31, 2005 2.38%++ 2.38%++ (1.46)% -- 15,693 March 31, 2004 2.41%++ 2.41%++ (1.48)% -- 34,375 March 31, 2003 2.41%++ 2.41%++ 8.23% -- 2,673 March 31, 2002 2.38%++ 2.38%++ 1.45% -- 1,996 March 31, 2001* 2.28%**++ 2.27%**++ 0.00%** 1,788% 22 MEDIUS FUND A-CLASS SEPTEMBER 30, 2005@ 1.62%** 1.62%** (0.11)%** 227% 1,808 March 31, 2005 1.63% 1.63% (0.10)% 669% 1,050 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** 1,239% 4 MEDIUS FUND C-CLASS SEPTEMBER 30, 2005@ 2.37%** 2.37%** (0.83)%** 227% 17,347 March 31, 2005 2.37% 2.37% (0.91)% 669% 17,912 March 31, 2004 2.41% 2.41% (1.31)% 1,239% 14,444 March 31, 2003 2.43% 2.43% (0.95)% 2,322% 5,610 March 31, 2002* 2.44%** 2.44%** (0.96)%** 893% 1,734 MEDIUS FUND H-CLASS SEPTEMBER 30, 2005@ 1.61%** 1.61%** (0.09)%** 227% 46,604 March 31, 2005 1.62% 1.62% (0.21)% 669% 59,274 March 31, 2004 1.66% 1.66% (0.56)% 1,239% 68,193 March 31, 2003 1.69% 1.69% (0.32)% 2,322% 14,634 March 31, 2002* 1.71%** 1.71%** (0.19)%** 893% 116,176 INVERSE MID-CAP FUND A-CLASS SEPTEMBER 30, 2005@ 1.70%** 1.70%** 1.81%** -- 489 March 31, 2005 1.63% 1.63% (0.13)% -- 61 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** -- 1 INVERSE MID-CAP FUND C-CLASS SEPTEMBER 30, 2005@ 2.43%** 2.43%** 0.84%** -- 375 March 31, 2005 2.36% 2.36% (0.58)% -- 1,011 March 31, 2004* 2.23%** 2.23%** (1.45)%** -- 137 INVERSE MID-CAP FUND H-CLASS SEPTEMBER 30, 2005@ 1.59%** 1.59%** 1.39%** -- 7,245 March 31, 2005 1.60% 1.60% 0.39% -- 30,073 March 31, 2004* 1.54%** 1.54%** (0.74)%** -- 2,678 MEKROS FUND A-CLASS SEPTEMBER 30, 2005@ 1.63%** 1.63%** (0.10)%** 261% 5,017 March 31, 2005 1.61% 1.61% (0.10)% 501% 3,340 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** 965% 4 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 7, 2001 -- ARKTOS FUND C-CLASS; AUGUST 16, 2001-- MEDIUS FUND H-CLASS; AUGUST 20, 2001-- MEDIUS FUND C-CLASS; FEBRUARY 20, 2004 -- INVERSE MID-CAP FUND C-CLASS AND INVERSE MID-CAP FUND H-CLASS; MARCH 31, 2004 -- ARKTOS FUND A-CLASS, MEDIUS FUND A-CLASS, INVERSE MID-CAP FUND A-CLASS AND MEKROS FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ++ RATIOS TO AVERAGE NET ASSETS INCLUDE EXPENSES OF THE CORRESPONDING MASTER PORTFOLIO. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED 102 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ------------------------------------------------------------------------------------------------------------------------------- MEKROS FUND C-CLASS SEPTEMBER 30, 2005@ $ 26.69 $ (.12) $ 3.24 $ 3.12 $ -- March 31, 2005 25.63 (.26) 1.48 1.22 -- March 31, 2004 12.75 (.28) 13.16 12.88 -- March 31, 2003 22.47 (.15) (9.53) (9.68) -- March 31, 2002 19.99 (.07) 2.55 2.48 -- March 31, 2001* 24.28 .17 (4.46) (4.29) -- MEKROS FUND H-CLASS SEPTEMBER 30, 2005@ 27.51 (.01) 3.34 3.33 -- March 31, 2005 26.22 (.07) 1.52 1.45 -- March 31, 2004 12.94 (.14) 13.42 13.28 -- March 31, 2003 22.61 (.03) (9.60) (9.63) -- March 31, 2002 19.99 .16 2.46 2.62 -- March 31, 2001* 25.00 .42 (5.43) (5.01) -- INVERSE SMALL-CAP A-CLASS SEPTEMBER 30, 2005@ 46.09 .35 (3.96) (3.61) -- March 31, 2005 48.80 (.02) (2.69) (2.71) -- March 31, 2004* 48.80 -- -- -- -- INVERSE SMALL-CAP C-CLASS SEPTEMBER 30, 2005@ 45.71 .19 (3.90) (3.71) -- March 31, 2005 48.77 (.49) (2.57) (3.06) -- March 31, 2004* 50.00 (.08) (1.15) (1.23) -- INVERSE SMALL-CAP H-CLASS SEPTEMBER 30, 2005@ 46.09 .36 (3.95) (3.59) -- March 31, 2005 48.80 .04 (2.75) (2.71) -- March 31, 2004* 50.00 (.04) (1.16) (1.20) -- U.S. GOVERNMENT BOND FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 11.04 .22 .39 .61 (.21) March 31, 2005 11.03 .42 -- .42 (.41) March 31, 2004 10.95 .41 .08 .49 (.41) March 31, 2003 9.12 .41 1.83 2.24 (.41) March 31, 2002 9.82 .43 (.70) (.27) (.43) March 31, 2001 9.34 .42 .48 .90 (.42) U.S. GOVERNMENT BOND FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 11.07 .19 .38 .57 (.18) March 31, 2005 11.04 .36 .04 .40 (.37) March 31, 2004* 10.00 .23 1.04 1.27 (.23) U.S. GOVERNMENT BOND FUND A-CLASS SEPTEMBER 30, 2005@ 11.07 .20 .39 .59 (.20) March 31, 2005 11.05 .39 .02 .41 (.39) March 31, 2004* 11.05 -- -- -- -- U.S. GOVERNMENT BOND FUND C-CLASS SEPTEMBER 30, 2005@ 11.07 .16 .38 .54 (.15) March 31, 2005 11.05 .31 .02 .33 (.31) March 31, 2004 10.97 .30 .08 .38 (.30) March 31, 2003 9.12 .31 1.85 2.16 (.31) March 31, 2002* 9.42 .32 (.32) -- (.30) DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ----------------------------------------------------------------------------------------------------------------------------- MEKROS FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ 3.12 $ 29.81 11.69% March 31, 2005 (.16) (.16) 1.06 26.69 4.75% March 31, 2004 -- -- 12.88 25.63 101.02% March 31, 2003 (.04) (.04) (9.72) 12.75 (43.12)% March 31, 2002 -- -- 2.48 22.47 12.41% March 31, 2001* -- -- (4.29) 19.99 (17.67)% MEKROS FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 3.33 30.84 12.10% March 31, 2005 (.16) (.16) 1.29 27.51 5.52% March 31, 2004 -- -- 13.28 26.22 102.63% March 31, 2003 (.04) (.04) (9.67) 12.94 (42.63)% March 31, 2002 -- -- 2.62 22.61 13.11% March 31, 2001* -- -- (5.01) 19.99 (20.04)% INVERSE SMALL-CAP A-CLASS SEPTEMBER 30, 2005@ -- -- (3.61) 42.48 (7.83)% March 31, 2005 -- -- (2.71) 46.09 (5.55)% March 31, 2004* -- -- -- 48.80 0.00% INVERSE SMALL-CAP C-CLASS SEPTEMBER 30, 2005@ -- -- (3.71) 42.00 (8.12)% March 31, 2005 -- -- (3.06) 45.71 (6.27)% March 31, 2004* -- -- (1.23) 48.77 (2.46)% INVERSE SMALL-CAP H-CLASS SEPTEMBER 30, 2005@ -- -- (3.59) 42.50 (7.79)% March 31, 2005 -- -- (2.71) 46.09 (5.55)% March 31, 2004* -- -- (1.20) 48.80 (2.40)% U.S. GOVERNMENT BOND FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- (.21) .40 11.44 5.49% March 31, 2005 -- (.41) .01 11.04 4.04% March 31, 2004 -- (.41) .08 11.03 4.65% March 31, 2003 -- (.41) 1.83 10.95 24.93% March 31, 2002 -- (.43) (.70) 9.12 (2.88)% March 31, 2001 -- (.42) .48 9.82 9.81% U.S. GOVERNMENT BOND FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- (.18) .39 11.46 5.15% March 31, 2005 -- (.37) .03 11.07 3.75% March 31, 2004* -- (.23) 1.04 11.04 12.84% U.S. GOVERNMENT BOND FUND A-CLASS SEPTEMBER 30, 2005@ -- (.20) .39 11.46 5.28% March 31, 2005 -- (.39) .02 11.07 3.86% March 31, 2004* -- -- -- 11.05 0.00% U.S. GOVERNMENT BOND FUND C-CLASS SEPTEMBER 30, 2005@ -- (.15) .39 11.46 4.87% March 31, 2005 -- (.31) .02 11.07 3.10% March 31, 2004 -- (.30) .08 11.05 3.59% March 31, 2003 -- (.31) 1.85 10.97 23.93% March 31, 2002* -- (.30) (.30) 9.12 (0.14)% RATIOS TO AVERAGE NET ASSETS: ---------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------------ MEKROS FUND C-CLASS SEPTEMBER 30, 2005@ 2.39%** 2.39%** (0.86)%** 261% $ 30,329 March 31, 2005 2.37% 2.37% (1.00)% 501% 18,915 March 31, 2004 2.41% 2.41% (1.34)% 965% 48,851 March 31, 2003 2.43% 2.43% (0.91)% 746% 13,530 March 31, 2002 2.44% 2.44% (0.33)% 714% 20,604 March 31, 2001* 2.54%** 2.52%** 3.80%** -- 2 MEKROS FUND H-CLASS SEPTEMBER 30, 2005@ 1.62%** 1.62%** (0.05)%** 261% 111,283 March 31, 2005 1.62% 1.62% (0.26)% 501% 68,084 March 31, 2004 1.66% 1.66% (0.62)% 965% 174,320 March 31, 2003 1.69% 1.69% (0.20)% 746% 32,101 March 31, 2002 1.61% 1.61% 0.74% 714% 120,045 March 31, 2001* 1.74%** 1.73%** 4.24%** -- 36,704 INVERSE SMALL-CAP A-CLASS SEPTEMBER 30, 2005@ 1.59%** 1.59%** 1.49%** -- 698 March 31, 2005 1.63% 1.63% (0.03)% -- 404 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** -- 1 INVERSE SMALL-CAP C-CLASS SEPTEMBER 30, 2005@ 2.40%** 2.40%** 0.86%** -- 5,227 March 31, 2005 2.39% 2.39% (0.97)% -- 3,951 March 31, 2004* 2.24%** 2.24%** (1.42)%** -- 492 INVERSE SMALL-CAP H-CLASS SEPTEMBER 30, 2005@ 1.62%** 1.62%** 1.63%** -- 42,939 March 31, 2005 1.63% 1.63% 0.09% -- 46,832 March 31, 2004* 1.54%** 1.54%** (0.72)%** -- 5,054 U.S. GOVERNMENT BOND FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 0.90%** 0.90%** 3.68%** 446% 24,350 March 31, 2005 0.93% 0.93% 3.95% 737% 25,992 March 31, 2004 0.95% 0.95% 3.84% 1,143% 25,188 March 31, 2003 0.97% 0.97% 4.00% 2,404% 51,370 March 31, 2002 0.88% 0.88% 4.39% 860% 14,138 March 31, 2001 0.97% 0.96% 4.38% 1,107% 80,686 U.S. GOVERNMENT BOND FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.40%** 1.40%** 3.17%** 446% 44,206 March 31, 2005 1.41% 1.41% 3.32% 737% 53,283 March 31, 2004* 1.45%** 1.45%** 3.21%** 1,143% 46,690 U.S. GOVERNMENT BOND FUND A-CLASS SEPTEMBER 30, 2005@ 1.15%** 1.15%** 3.44%** 446% 1,137 March 31, 2005 1.15% 1.15% 3.63% 737% 1,703 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** 1,143% 1 U.S. GOVERNMENT BOND FUND C-CLASS SEPTEMBER 30, 2005@ 1.91%** 1.91%** 2.69%** 446% 7,055 March 31, 2005 1.92% 1.92% 2.86% 737% 11,005 March 31, 2004 1.96% 1.96% 2.85% 1,143% 3,828 March 31, 2003 1.95% 1.95% 2.86% 2,404% 2,163 March 31, 2002* 1.79%** 1.79%** 3.53%** 860% 209 * SINCE THE COMMENCEMENT OF OPERATIONS: NOVEMBER 1, 2000-- MEKROS FUND H-CLASS; JANUARY 23, 2001-- MEKROS FUND C-CLASS; MAY 2, 2001 -- U.S. GOVERNMENT BOND FUND C-CLASS; AUGUST 1, 2003-- U.S. GOVERNMENT BOND FUND ADVISOR CLASS; FEBRUARY 20, 2004 -- INVERSE SMALL-CAP FUND C-CLASS AND INVERSE SMALL-CAP FUND H-CLASS; MARCH 31, 2004 -- INVERSE SMALL-CAP FUND A-CLASS AND U.S. GOVERNMENT BOND FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 103 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ----------------------------------------------------------------------------------------------------------------------------- JUNO FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ 18.94 $ (.03) $ (.62) $ (.65) $ -- March 31, 2005 19.77 (.08) (.75) (.83) -- March 31, 2004 21.23 (.09) (1.37) (1.46) -- March 31, 2003 26.40 (.04) (5.13) (5.17) -- March 31, 2002+++ 25.59 .27 .54 .81 -- March 31, 2001+++ 27.00 1.23 (2.64) (1.41) -- JUNO FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 18.79 (.08) (.61) (.69) -- March 31, 2005 19.71 (.17) (.75) (.92) -- March 31, 2004* 22.41 (.13) (2.57) (2.70) -- JUNO FUND A-CLASS SEPTEMBER 30, 2005@ 18.84 (.06) (.62) (.68) -- March 31, 2005 19.71 (.13) (.74) (.87) -- March 31, 2004* 19.71 -- -- -- -- JUNO FUND C-CLASS SEPTEMBER 30, 2005@ 18.25 (.12) (.59) (.71) -- March 31, 2005 19.24 (.27) (.72) (.99) -- March 31, 2004 20.88 (.29) (1.35) (1.64) -- March 31, 2003 26.16 (.17) (5.11) (5.28) -- March 31, 2002+++ 25.59 .15 .42 .57 -- March 31, 2001*+++ 25.65 -- (.06) (.06) -- LARGE-CAP EUROPE FUND A-CLASS SEPTEMBER 30, 2005@ 17.14 .09 1.27 1.36 -- March 31, 2005 14.98 .05 2.59 2.64 (.47) March 31, 2004* 14.98 -- -- -- -- LARGE-CAP EUROPE FUND C-CLASS SEPTEMBER 30, 2005@ 16.57 .04 1.23 1.27 -- March 31, 2005 14.62 (.09) 2.52 2.43 (.47) March 31, 2004 9.74 (1.18) 6.77 5.59 -- March 31, 2003 15.22 (.10) (5.38) (5.48) -- March 31, 2002* 19.09 (.11) (3.76) (3.87) -- LARGE-CAP EUROPE FUND H-CLASS SEPTEMBER 30, 2005@ 17.13 .11 1.26 1.37 -- March 31, 2005 14.98 .05 2.58 2.63 (.47) March 31, 2004 9.88 (1.65) 7.46 5.81 -- March 31, 2003 15.30 (.02) (5.40) (5.42) -- March 31, 2002 17.72 .19 (2.61) (2.42) -- March 31, 2001* 25.00 .83 (8.11) (7.28) -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ------------------------------------------------------------------------------------------------------------------------ JUNO FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ (.65) $ 18.29 (3.43)% March 31, 2005 -- -- (.83) 18.94 (4.20)% March 31, 2004 -- -- (1.46) 19.77 (6.88)% March 31, 2003 -- -- (5.17) 21.23 (19.53)% March 31, 2002+++ -- -- .81 26.40 3.17% March 31, 2001+++ -- -- (1.41) 25.59 (5.22)% JUNO FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- -- (.69) 18.10 (3.67)% March 31, 2005 -- -- (.92) 18.79 (4.67)% March 31, 2004* -- -- (2.70) 19.71 (12.05)% JUNO FUND A-CLASS SEPTEMBER 30, 2005@ -- -- (.68) 18.16 (3.61)% March 31, 2005 -- -- (.87) 18.84 (4.41)% March 31, 2004* -- -- -- 19.71 0.00% JUNO FUND C-CLASS SEPTEMBER 30, 2005@ -- -- (.71) 17.54 (3.89)% March 31, 2005 -- -- (.99) 18.25 (5.15)% March 31, 2004 -- -- (1.64) 19.24 (7.85)% March 31, 2003 -- -- (5.28) 20.88 (20.13)% March 31, 2002+++ -- -- .57 26.16 2.23% March 31, 2001*+++ -- -- (.06) 25.59 (0.23)% LARGE-CAP EUROPE FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 1.36 18.50 7.93% March 31, 2005 (.01) (.48) 2.16 17.14 17.56% March 31, 2004* -- -- -- 14.98 0.00% LARGE-CAP EUROPE FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 1.27 17.84 7.66% March 31, 2005 (.01) (.48) 1.95 16.57 16.55% March 31, 2004 (.71) (.71) 4.88 14.62 57.29% March 31, 2003 -- -- (5.48) 9.74 (36.01)% March 31, 2002* -- -- (3.87) 15.22 (20.27)% LARGE-CAP EUROPE FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 1.37 18.50 8.00% March 31, 2005 (.01) (.48) 2.15 17.13 17.49% March 31, 2004 (.71) (.71) 5.10 14.98 58.72% March 31, 2003 -- -- (5.42) 9.88 (35.42)% March 31, 2002 -- -- (2.42) 15.30 (13.66)% March 31, 2001* -- -- (7.28) 17.72 (29.12)% RATIOS TO AVERAGE NET ASSETS: ---------------------------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET OPERATING INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES EXPENSES# (LOSS) RATE*** OMITTED) - --------------------------------------------------------------------------------------------------------------------------------- JUNO FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 4.80%**++ 4.80%**++ 1.30%**++ (0.37)%** 51% $ 1,072,319 March 31, 2005 5.11%++ 5.11%++ 1.32%++ (0.40)% 101% 1,472,040 March 31, 2004 5.57%++^ 5.57%++^ 1.38%++ (0.45)% 187% 898,294 March 31, 2003 5.65%++^@ 5.65%++^@ 1.41%++ (0.45)% -- 128,958 March 31, 2002+++ 1.41%++ 1.41%++ 1.41%++ 1.12% -- 32,293 March 31, 2001+++ 1.33%++ 1.33%++ 1.33%++ 4.61% -- 10,745 JUNO FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 5.31%**++ 5.31%**++ 1.81%**++ (0.88)%** 51% 126,945 March 31, 2005 5.61%++ 5.61%++ 1.82%++ (0.90)% 101% 232,541 March 31, 2004* 6.05%**++^ 6.05%**++^ 1.86%**++ (0.93)%** 187% 52,298 JUNO FUND A-CLASS SEPTEMBER 30, 2005@ 5.06%**++ 5.06%**++ 1.56%**++ (0.63)%** 51% 159,379 March 31, 2005 5.35%++ 5.35%++ 1.56%++ (0.64)% 101% 177,178 March 31, 2004* 0.00%**++~ 0.00%**++~ 0.00%**++~ 0.00%** 187% 5,057 JUNO FUND C-CLASS SEPTEMBER 30, 2005@ 5.81%**++ 5.81%**++ 2.31%**++ (1.38)%** 51% 688,745 March 31, 2005 6.11%++ 6.11%++ 2.32%++ (1.40)% 101% 893,249 March 31, 2004 6.57%++^ 6.57%++^ 2.38%++ (1.45)% 187% 489,918 March 31, 2003 6.64%++^@ 6.64%++^@ 2.40%++ (1.64)% -- 60,969 March 31, 2002+++ 2.47%++ 2.47%++ 2.47%++ 0.55% -- 877 March 31, 2001*+++ 2.48%**++ 2.48%**++ 2.48%**++ 2.70%** -- 1,702 LARGE-CAP EUROPE FUND A-CLASS SEPTEMBER 30, 2005@ 1.65%** 1.65%** 1.65%** 1.04%** 118% 1,878 March 31, 2005 1.62% 1.62% 1.62% 0.29% -- 180 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%**~ 0.00%** -- 1 LARGE-CAP EUROPE FUND C-CLASS SEPTEMBER 30, 2005@ 2.39%** 2.39%** 2.39%** 0.43%** 118% 6,257 March 31, 2005 2.37% 2.37% 2.37% (0.57)% -- 5,717 March 31, 2004 2.47% 2.47% 2.47% (8.31)% -- 1,999 March 31, 2003 2.45% 2.45% 2.45% (0.96)% -- 1,957 March 31, 2002* 2.69%** 2.69%** 2.69%** (0.82)%** -- 116 LARGE-CAP EUROPE FUND H-CLASS SEPTEMBER 30, 2005@ 1.63%** 1.63%** 1.63%** 1.25%** 118% 85,256 March 31, 2005 1.61% 1.61% 1.61% 0.28% -- 62,957 March 31, 2004 1.73% 1.73% 1.73% (11.25)% -- 35,914 March 31, 2003 1.68% 1.68% 1.68% (0.13)% -- 4,698 March 31, 2002 1.76% 1.76% 1.76% 1.18% -- 9,697 March 31, 2001* 2.06%** 2.06%** 2.06%** 4.03%** 350% 9,977 * SINCE THE COMMENCEMENT OF OPERATIONS: MAY 8, 2000 -- LARGE-CAP EUROPE FUND H-CLASS; MARCH 28, 2001 -- JUNO FUND C-CLASS; MAY 10, 2001 -- LARGE-CAP EUROPE FUND C-CLASS; AUGUST 1, 2003 -- JUNO FUND ADVISOR CLASS; MARCH 31, 2004 -- JUNO FUND A-CLASS AND LARGE-CAP EUROPE FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ++ RATIOS TO AVERAGE NET ASSETS INCLUDE EXPENSES OF THE CORRESPONDING MASTER PORTFOLIO. +++ JUNO FUND - PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2002 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE FEBRUARY 10, 2003. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED ^ THE JUNO FUND HAS RESTATED ITS RATIOS OF GROSS AND NET EXPENSES TO AVERAGE NET ASSETS IN THE FINANCIAL HIGHLIGHTS IN ORDER TO REFLECT THE RECLASSIFICATION OF INTEREST EXPENSE FROM SECURITIES SOLD SHORT. THIS RESTATEMENT HAD NO EFFECT ON THE JUNO FUND'S NET ASSET VALUE, PER SHARE VALUE, NET INVESTMENT INCOME RATIOS AND TOTAL INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS DURING ANY PERIOD. # OPERATING EXPENSES EXCLUDE INTEREST EXPENSE FROM SECURITIES SOLD SHORT. 104 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - --------------------------------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND A-CLASS SEPTEMBER 30, 2005@ $ 29.20 $ .24 $ 4.40 $ 4.64 $ -- March 31, 2005 34.60 .05 (3.96) (3.91) (.56) March 31, 2004* 34.60 -- -- -- -- LARGE-CAP JAPAN FUND C-CLASS SEPTEMBER 30, 2005@ 28.61 .13 4.27 4.40 -- March 31, 2005 34.18 (.25) (3.83) (4.08) (.56) March 31, 2004 18.96 (.80) 16.26 15.46 -- March 31, 2003++ 27.24 (.18) (8.10) (8.28) -- March 31, 2002*++ 25.65 (.03) 1.62 1.59 -- LARGE-CAP JAPAN FUND H-CLASS SEPTEMBER 30, 2005@ 29.22 .26 4.38 4.64 -- March 31, 2005 34.60 (.05) (3.84) (3.89) (.56) March 31, 2004 19.05 (.40) 16.19 15.79 -- March 31, 2003++ 27.27 (.03) (8.19) (8.22) -- March 31, 2002++ 39.12 .48 (12.33) (11.85) -- March 31, 2001*++ 75.00 2.07 (37.95) (35.88) -- SMALL-CAP VALUE FUND A-CLASS SEPTEMBER 30, 2005@ 28.22 (.03) 2.00 1.97 -- March 31, 2005* 25.28 (.06) 3.13 3.07 -- SMALL-CAP VALUE FUND C-CLASS SEPTEMBER 30, 2005@ 28.01 (.13) 1.95 1.82 -- March 31, 2005 25.59 (.24) 2.79 2.55 -- March 31, 2004* 25.00 (.05) .64 .59 -- SMALL-CAP VALUE FUND H-CLASS SEPTEMBER 30, 2005@ 28.24 (.04) 1.99 1.95 -- March 31, 2005 25.62 (.01) 2.76 2.75 -- March 31, 2004* 25.00 (.01) .63 .62 -- MID-CAP VALUE A-CLASS SEPTEMBER 30, 2005@ 27.49 .01 2.64 2.65 -- March 31, 2005* 24.58 .11 2.91 3.02 (--)# MID-CAP VALUE C-CLASS SEPTEMBER 30, 2005@ 27.29 (.10) 2.60 2.50 -- March 31, 2005 25.11 (.07) 2.36 2.29 (--)# March 31, 2004* 25.00 (.02) .13 .11 -- MID-CAP VALUE H-CLASS SEPTEMBER 30, 2005@ 27.49 -- 2.65 2.65 -- March 31, 2005 25.13 .21 2.26 2.47 (--)# March 31, 2004* 25.00 .01 .12 .13 -- LARGE-CAP VALUE FUND A-CLASS SEPTEMBER 30, 2005@ 26.56 .08 1.23 1.31 -- March 31, 2005* 24.68 .12 1.81 1.93 (--)# DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ----------------------------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND A-CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ 4.64 $ 33.84 15.89% March 31, 2005 (.93) (1.49) (5.40) 29.20 (11.31)% March 31, 2004* -- -- -- 34.60 0.00% LARGE-CAP JAPAN FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 4.40 33.01 15.38% March 31, 2005 (.93) (1.49) (5.57) 28.61 (11.96)% March 31, 2004 (.24) (.24) 15.22 34.18 81.72% March 31, 2003++ -- -- (8.28) 18.96 (30.40)% March 31, 2002*++ -- -- 1.59 27.24 6.20% LARGE-CAP JAPAN FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 4.64 33.86 15.88% March 31, 2005 (.93) (1.49) (5.38) 29.22 (11.25)% March 31, 2004 (.24) (.24) 15.55 34.60 83.07% March 31, 2003++ -- -- (8.22) 19.05 (30.14)% March 31, 2002++ -- -- (11.85) 27.27 (30.29)% March 31, 2001*++ -- -- (35.88) 39.12 (47.84)% SMALL-CAP VALUE FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 1.97 30.19 6.98% March 31, 2005* (.13) (.13) 2.94 28.22 12.14% SMALL-CAP VALUE FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 1.82 29.83 6.50% March 31, 2005 (.13) (.13) 2.42 28.01 9.96% March 31, 2004* -- -- .59 25.59 2.36% SMALL-CAP VALUE FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 1.95 30.19 6.91% March 31, 2005 (.13) (.13) 2.62 28.24 10.73% March 31, 2004* -- -- .62 25.62 2.48% MID-CAP VALUE A-CLASS SEPTEMBER 30, 2005@ -- -- 2.65 30.14 9.64% March 31, 2005* (.11) (.11) 2.91 27.49 12.29% MID-CAP VALUE C-CLASS SEPTEMBER 30, 2005@ -- -- 2.50 29.79 9.16% March 31, 2005 (.11) (.11) 2.18 27.29 9.12% March 31, 2004* -- -- .11 25.11 0.44% MID-CAP VALUE H-CLASS SEPTEMBER 30, 2005@ -- -- 2.65 30.14 9.64% March 31, 2005 (.11) (.11) 2.36 27.49 9.83% March 31, 2004* -- -- .13 25.13 0.52% LARGE-CAP VALUE FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 1.31 27.87 4.93% March 31, 2005* (.05) (.05) 1.88 26.56 7.82% RATIOS TO AVERAGE NET ASSETS: --------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF INCOME INCOME TURNOVER PERIOD (000'S EXPENSES (LOSS) RATE*** OMITTED) - -------------------------------------------------------------------------------- LARGE-CAP JAPAN FUND A-CLASS SEPTEMBER 30, 2005@ 1.63%** 1.68%** -- $ 1,545 March 31, 2005 1.62% 0.15% -- 280 March 31, 2004* 0.00%**~ 0.00%** -- 55 LARGE-CAP JAPAN FUND C-CLASS SEPTEMBER 30, 2005@ 2.39%** 0.91%** -- 4,762 March 31, 2005 2.38% (0.83)% -- 3,381 March 31, 2004 2.42% (2.85)% -- 5,572 March 31, 2003++ 2.36% (0.68)% -- 9 March 31, 2002*++ 2.20%** (0.72)%** -- 12 LARGE-CAP JAPAN FUND H-CLASS SEPTEMBER 30, 2005@ 1.68%** 1.73%** -- 134,344 March 31, 2005 1.63% (0.17)% -- 34,972 March 31, 2004 1.66% 1.46% -- 177,760 March 31, 2003++ 1.69% (0.06)% -- 2,683 March 31, 2002++ 1.84% 1.44% -- 23,873 March 31, 2001*++ 1.77%** 4.17%** 699% 14,606 SMALL-CAP VALUE FUND A-CLASS SEPTEMBER 30, 2005@ 1.44%** (0.23)%** 409% 98 March 31, 2005* 1.43%** (0.37)%** 744% 714 SMALL-CAP VALUE FUND C-CLASS SEPTEMBER 30, 2005@ 2.20%** (0.90)%** 409% 2,883 March 31, 2005 2.21% (0.89)% 744% 12,119 March 31, 2004* 2.11%** (1.68)%** 177% 2,207 SMALL-CAP VALUE FUND H-CLASS SEPTEMBER 30, 2005@ 1.46%** (0.26)%** 409% 38,593 March 31, 2005 1.47% (0.04)% 744% 75,748 March 31, 2004* 1.41%** (0.21)%** 177% 19,900 MID-CAP VALUE A-CLASS SEPTEMBER 30, 2005@ 1.46%** 0.04%** 263% 606 March 31, 2005* 1.42%** 0.69%** 731% 312 MID-CAP VALUE C-CLASS SEPTEMBER 30, 2005@ 2.25%** (0.72)%** 263% 13,724 March 31, 2005 2.21% (0.28)% 731% 8,831 March 31, 2004* 2.11%** (0.50)%** 172% 710 MID-CAP VALUE H-CLASS SEPTEMBER 30, 2005@ 1.47%** -- 263% 108,392 March 31, 2005 1.46% 0.77% 731% 115,660 March 31, 2004* 1.41%** 0.19%** 172% 18,064 LARGE-CAP VALUE FUND A-CLASS SEPTEMBER 30, 2005@ 1.46%** 0.58%** 485% 1,035 March 31, 2005* 1.43%** 0.77%** 747% 211 * SINCE THE COMMENCEMENT OF OPERATIONS: MAY 8, 2000 -- LARGE-CAP JAPAN FUND H-CLASS; MARCH 1, 2002 -- LARGE-CAP JAPAN FUND C-CLASS; FEBRUARY 20, 2004 -- SMALL-CAP VALUE FUND C-CLASS, SMALL-CAP VALUE FUND H-CLASS, MID-CAP VALUE FUND C-CLASS AND MID-CAP VALUE FUND H-CLASS; MARCH 31, 2004 -- LARGE-CAP JAPAN FUND A-CLASS; SEPTEMBER 1, 2004 -- SMALL-CAP VALUE FUND A-CLASS, MID-CAP VALUE FUND A-CLASS AND LARGE-CAP VALUE FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ++ LARGE-CAP JAPAN FUND - PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED # LESS THAN $.01 PER SHARE: MID-CAP VALUE FUND A-CLASS, C-CLASS & H-CLASS ACTUAL AMOUNT=$.0007; LARGE-CAP VALUE FUND A-CLASS ACTUAL AMOUNT= $.0001. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 105 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ------------------------------------------------------------------------------------------------------------------------------- LARGE-CAP VALUE FUND C-CLASS SEPTEMBER 30, 2005@ $ 26.38 $ (.01) $ 1.19 $ 1.18 $ -- March 31, 2005 24.85 .01 1.57 1.58 (--)# March 31, 2004 * 25.00 (.02) (.13) (.15) -- LARGE-CAP VALUE FUND H-CLASS SEPTEMBER 30, 2005@ 26.56 .08 1.22 1.30 -- March 31, 2005 24.87 .16 1.58 1.74 (--)# March 31, 2004 * 25.00 .01 (.14) (.13) -- SMALL-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ 27.96 (.09) 2.68 2.59 -- March 31, 2005 * 24.43 (.12) 3.90 3.78 -- SMALL-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ 27.78 (.22) 2.68 2.46 -- March 31, 2005 25.33 (.44) 3.14 2.70 -- March 31, 2004 * 25.00 (.04) .37 .33 -- SMALL-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005@ 27.97 (.10) 2.69 2.59 -- March 31, 2005 25.34 (.23) 3.11 2.88 -- March 31, 2004 * 25.00 (.02) .36 .34 -- MID-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ 26.85 (.09) 1.96 1.87 -- March 31, 2005 * 23.91 (.09) 3.04 2.95 -- MID-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ 26.66 (.20) 1.96 1.76 -- March 31, 2005 25.15 (.37) 1.89 1.52 -- March 31, 2004 * 25.00 (.05) .20 .15 -- MID-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005@ 26.86 (.09) 1.97 1.88 -- March 31, 2005 25.17 (.17) 1.87 1.70 -- March 31, 2004 * 25.00 (.02) .19 .17 -- LARGE-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ 24.48 (.01) .64 .63 -- March 31, 2005 * 23.44 .09 .95 1.04 -- LARGE-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ 24.30 (.10) .64 .54 -- March 31, 2005 24.18 (.01) .13 .12 -- March 31, 2004 * 25.00 (.05) (.77) (.82) -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ------------------------------------------------------------------------------------------------------------------------------- LARGE-CAP VALUE FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ -- $ 1.18 $ 27.56 4.47% March 31, 2005 (.05) (.05) 1.53 26.38 6.35% March 31, 2004 * -- -- (.15) 24.85 (0.60)% LARGE-CAP VALUE FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 1.30 27.86 4.89% March 31, 2005 (.05) (.05) 1.69 26.56 6.99% March 31, 2004 * -- -- (.13) 24.87 (0.52)% SMALL-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 2.59 30.55 9.26% March 31, 2005 * (.25) (.25) 3.53 27.96 15.49% SMALL-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 2.46 30.24 8.86% March 31, 2005 (.25) (.25) 2.45 27.78 10.68% March 31, 2004 * -- -- .33 25.33 1.32% SMALL-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 2.59 30.56 9.26% March 31, 2005 (.25) (.25) 2.63 27.97 11.38% March 31, 2004 * -- -- .34 25.34 1.36% MID-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ -- -- 1.87 28.72 6.96% March 31, 2005 * (.01) (.01) 2.94 26.85 12.33% MID-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 1.76 28.42 6.60% March 31, 2005 (.01) (.01) 1.51 26.66 6.04% March 31, 2004 * -- -- .15 25.15 0.60% MID-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005@ -- -- 1.88 28.74 7.00% March 31, 2005 (.01) (.01) 1.69 26.86 6.75% March 31, 2004 * -- -- .17 25.17 0.68% LARGE-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ -- -- .63 25.11 2.57% March 31, 2005 * (--)# (--)# 1.04 24.48 4.45% LARGE-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ -- -- .54 24.84 2.22% March 31, 2005 (--)# (--)# .12 24.30 0.51% March 31, 2004 * -- -- (.82) 24.18 (3.28)% RATIO TO AVERAGE NET ASSETS: --------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF TOTAL INCOME TURNOVER PERIOD (000'S EXPENSES (LOSS) RATE*** OMITTED) - ----------------------------------------------------------------------------------------------- LARGE-CAP VALUE FUND C-CLASS SEPTEMBER 30, 2005@ 2.22%** (0.07)%** 485% $ 3,910 March 31, 2005 2.20% 0.03% 747% 4,636 March 31, 2004 * 2.10%** (0.53)%** 202% 2,612 LARGE-CAP VALUE FUND H-CLASS SEPTEMBER 30, 2005@ 1.47%** 0.58%** 485% 49,946 March 31, 2005 1.47% 0.63% 747% 24,974 March 31, 2004 * 1.41%** 0.34%** 202% 8,094 SMALL-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ 1.46%** (0.59)%** 367% 377 March 31, 2005 * 1.43%** (0.74)%** 983% 76 SMALL-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ 2.30%** (1.48)%** 367% 10,638 March 31, 2005 2.21% (1.58)% 983% 2,710 March 31, 2004 * 2.08%** (1.31)%** 117% 2,505 SMALL-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005@ 1.49%** (0.68)%** 367% 101,284 March 31, 2005 1.46% (0.84)% 983% 26,145 March 31, 2004 * 1.41%** (0.85)%** 117% 2,544 MID-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ 1.46%** (0.61)%** 387% 540 March 31, 2005 * 1.46%** (0.58)%** 1,211% 553 MID-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ 2.21%** (1.43)%** 387% 975 March 31, 2005 2.21% (1.43)% 1,211% 2,313 March 31, 2004 * 2.10%** (1.50)%** 356% 1,172 MID-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005@ 1.46%** (0.63)%** 387% 40,925 March 31, 2005 1.46% (0.66)% 1,211% 23,733 March 31, 2004 * 1.41%** (0.75)%** 356% 625 LARGE-CAP GROWTH FUND A-CLASS SEPTEMBER 30, 2005@ 1.44%** (0.06)%** 692% 273 March 31, 2005 * 1.45%** 0.62%** 2018% 74 LARGE-CAP GROWTH FUND C-CLASS SEPTEMBER 30, 2005@ 2.19%** (0.76)%** 692% 2,730 March 31, 2005 2.20% (0.06)% 2,018% 19,703 March 31, 2004 * 2.08%** (1.25)%** 296% -- * SINCE THE COMMENCEMENT OF OPERATIONS: FEBRUARY 20, 2004 -- LARGE-CAP VALUE FUND C-CLASS, LARGE-CAP VALUE FUND H-CLASS, SMALL-CAP GROWTH FUND C-CLASS, SMALL-CAP GROWTH FUND H-CLASS, MID-CAP GROWTH FUND C-CLASS, MID-CAP GROWTH FUND H-CLASS AND LARGE-CAP GROWTH FUND C-CLASS; SEPTEMBER 1, 2004 -- SMALL-CAP GROWTH FUND A-CLASS, MID-CAP GROWTH FUND A-CLASS, AND LARGE-CAP GROWTH FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. @ UNAUDITED # LESS THAN $.01 PER SHARE: LARGE-CAP VALUE FUND C-CLASS AND H-CLASS ACTUAL AMOUNT= $.0001; LARGE-CAP GROWTH FUND A-CLASS AND C-CLASS ACTUAL AMOUNT= $.0042 106 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME - ------------------------------------------------------------------------------------------------------------------------------ LARGE-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005 @ $ 24.49 $ .01 $ .61 $ .62 $ -- March 31, 2005 24.18 .37 (.06) .31 -- March 31, 2004 * 25.00 -- (.82) (.82) -- STRENGTHENING DOLLAR FUND A-CLASS SEPTEMBER 30, 2005* @ 25.00 .16 1.97 2.13 -- STRENGTHENING DOLLAR FUND C-CLASS SEPTEMBER 30, 2005* @ 25.00 .08 1.99 2.07 -- STRENGTHENING DOLLAR FUND H-CLASS SEPTEMBER 30, 2005* @ 25.00 .15 1.95 2.10 -- WEAKENING DOLLAR FUND A-CLASS SEPTEMBER 30, 2005* @ 25.00 .15 (1.99) (1.84) -- WEAKENING DOLLAR FUND C-CLASS SEPTEMBER 30, 2005* @ 25.00 .10 (2.01) (1.91) -- WEAKENING DOLLAR FUND H-CLASS SEPTEMBER 30, 2005* @ 25.00 .15 (2.00) (1.85) -- U.S. GOVERNMENT MONEY MARKET FUND INVESTOR CLASS SEPTEMBER 30, 2005 @ 1.00 .01 -- .01 (.01) March 31, 2005 1.00 .01 -- .01 (.01) March 31, 2004 1.00 --## -- --## (--)## March 31, 2003 1.00 .01 -- .01 (.01) March 31, 2002 1.00 .02 -- .02 (.02) March 31, 2001 1.00 .05 -- .05 (.05) U.S. GOVERNMENT MONEY MARKET FUND ADVISOR CLASS SEPTEMBER 30, 2005 @ 1.00 .01 -- .01 (.01) March 31, 2005 1.00 --# -- --# (--)# March 31, 2004 1.00 --## -- --## (--)## March 31, 2003 1.00 --### -- --### (--)### March 31, 2002 1.00 .02 -- .02 (.02) March 31, 2001 1.00 .05 -- .05 (.05) U.S. GOVERNMENT MONEY MARKET FUND A-CLASS SEPTEMBER 30, 2005 @ 1.00 .01 -- .01 (.01) March 31, 2005 1.00 .01 -- .01 (.01) March 31, 2004* 1.00 -- -- -- -- DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ------------------------------------------------------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005 @ $ -- $ -- $ .62 $ 25.11 2.53% March 31, 2005 (--)# (--)# .31 24.49 1.30% March 31, 2004 * -- -- (.82) 24.18 (3.28)% STRENGTHENING DOLLAR FUND A-CLASS SEPTEMBER 30, 2005* @ -- -- 2.13 27.13 8.52% STRENGTHENING DOLLAR FUND C-CLASS SEPTEMBER 30, 2005* @ -- -- 2.07 27.07 8.28% STRENGTHENING DOLLAR FUND H-CLASS SEPTEMBER 30, 2005* @ -- -- 2.10 27.10 8.40% WEAKENING DOLLAR FUND A-CLASS SEPTEMBER 30, 2005* @ -- -- (1.84) 23.16 (7.36)% WEAKENING DOLLAR FUND C-CLASS SEPTEMBER 30, 2005* @ -- -- (1.91) 23.09 (7.64)% WEAKENING DOLLAR FUND H-CLASS SEPTEMBER 30, 2005* @ -- -- (1.85) 23.15 (7.40)% U.S. GOVERNMENT MONEY MARKET FUND INVESTOR CLASS SEPTEMBER 30, 2005 @ -- (.01) -- 1.00 1.17% March 31, 2005 -- (.01) -- 1.00 0.82% March 31, 2004 -- (--)## -- 1.00 0.18% March 31, 2003 -- (.01) -- 1.00 0.71% March 31, 2002 -- (.02) -- 1.00 2.35% March 31, 2001 -- (.05) -- 1.00 5.48% U.S. GOVERNMENT MONEY MARKET FUND ADVISOR CLASS SEPTEMBER 30, 2005 @ -- (.01) -- 1.00 0.92% March 31, 2005 -- --# -- 1.00 0.43% March 31, 2004 -- --## -- 1.00 0.01% March 31, 2003 -- --### -- 1.00 0.27% March 31, 2002 -- (.02) -- 1.00 1.84% March 31, 2001 -- (.05) -- 1.00 4.99% U.S. GOVERNMENT MONEY MARKET FUND A-CLASS SEPTEMBER 30, 2005 @ -- (.01) -- 1.00 1.04% March 31, 2005 -- (.01) -- 1.00 0.59% March 31, 2004* -- -- -- 1.00 0.00% RATIO TO AVERAGE NET ASSETS: --------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - --------------------------------------------------------------------------------------------------------------- LARGE-CAP GROWTH FUND H-CLASS SEPTEMBER 30, 2005 @ 1.46%** 1.46%** 0.11%** 692% $ 24,056 March 31, 2005 1.47% 1.47% 1.52% 2,018% 11,762 March 31, 2004 * 1.41%** 1.41%** (0.16)%** 296% 793 STRENGTHENING DOLLAR FUND A-CLASS SEPTEMBER 30, 2005* @ 1.71%** 1.71%** 1.77%** -- 67 STRENGTHENING DOLLAR FUND C-CLASS SEPTEMBER 30, 2005* @ 2.43%** 2.43%** 0.90%** -- 1,176 STRENGTHENING DOLLAR FUND H-CLASS SEPTEMBER 30, 2005* @ 1.65%** 1.65%** 1.66%** -- 9,634 WEAKENING DOLLAR FUND A-CLASS SEPTEMBER 30, 2005* @ 1.72%** 1.72%** 1.89%** -- 418 WEAKENING DOLLAR FUND C-CLASS SEPTEMBER 30, 2005* @ 2.44%** 2.44%** 1.13%** -- 587 WEAKENING DOLLAR FUND H-CLASS SEPTEMBER 30, 2005* @ 1.69%** 1.69%** 1.88%** -- 15,333 U.S. GOVERNMENT MONEY MARKET FUND INVESTOR CLASS SEPTEMBER 30, 2005 @ 0.86%** 0.86%** 2.35%** -- 1,168,197 March 31, 2005 0.87% 0.87% 0.81% -- 1,196,009 March 31, 2004 0.90% 0.90% 0.18% -- 1,057,062 March 31, 2003 0.92% 0.92% 0.71% -- 1,218,676 March 31, 2002 0.85% 0.85% 2.23% -- 979,433 March 31, 2001 0.85% 0.85% 5.38% -- 948,275 U.S. GOVERNMENT MONEY MARKET FUND ADVISOR CLASS SEPTEMBER 30, 2005 @ 1.37%** 1.37%** 1.86%** -- 181,858 March 31, 2005 1.38% 1.25% 0.39% -- 245,890 March 31, 2004 1.38% 1.08% 0.01% -- 249,599 March 31, 2003 1.41% 1.37% 0.32% -- 187,513 March 31, 2002 1.32% 1.32% 1.87% -- 371,356 March 31, 2001 1.34% 1.34% 4.87% -- 451,796 U.S. GOVERNMENT MONEY MARKET FUND A-CLASS SEPTEMBER 30, 2005 @ 1.12%** 1.12%** 2.15%** -- 10,174 March 31, 2005 1.10% 1.10% 0.93% -- 7,335 March 31, 2004* 0.00%**~ 0.00%**~ 0.00%** -- 1 * SINCE THE COMMENCEMENT OF OPERATIONS: FEBRUARY 20, 2004 -- LARGE-CAP GROWTH FUND H-CLASS; MARCH 31, 2004 -- U.S. GOVERNMENT MONEY MARKET FUND A-CLASS; MAY 25, 2005 -- WEAKENING DOLLAR FUND A-CLASS, WEAKENING DOLLAR FUND C-CLASS AND WEAKENING DOLLAR FUND H-CLASS, STRENGTHENING DOLLAR FUND A-CLASS, STRENGTHENING DOLLAR FUND C-CLASS AND STRENGTHENING DOLLAR FUND H-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE PERIOD. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. ~ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED # LESS THAN $.01 PER SHARE: LARGE-CAP GROWTH FUND H-CLASS ACTUAL AMOUNT = $.0042; U.S. GOVERNMENT MONEY MARKET FUND ADVISOR CLASS ACTUAL AMOUNT = $.00433. ## LESS THAN $.01 PER SHARE: U.S. GOVERNMENT MONEY MARKET FUND INVESTOR CLASS ACTUAL AMOUNT= $.0019; U.S. GOVERNMENT MONEY MARKET FUND ADVISOR CLASS ACTUAL AMOUNT = $.00005. ### LESS THAN $.01 PER SHARE: U.S. GOVERNMENT MONEY MARKET FUND ADVISOR CLASS ACTUAL AMOUNT = $.003. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 107 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. NET REALIZED NET ASSET AND NET INCREASE DISTRIBUTIONS VALUE, NET UNREALIZED IN NET ASSET FROM NET BEGINNING INVESTMENT GAINS VALUE RESULTING INVESTMENT OF PERIOD INCOME+ ON SECURITIES FROM OPERATIONS INCOME - ------------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND C-CLASS SEPTEMBER 30, 2005@ $ 1.00 $ .01 $ -- $ .01 $ (.01) March 31, 2005 1.00 --# -- --# (--)# March 31, 2004 1.00 --## -- --## (--)## March 31, 2003 1.00 --### -- --### (--)### March 31, 2002 1.00 .01 -- .01 (.01) March 31, 2001* 1.00 .02 -- .02 (.02) DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ----------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT MONEY MARKET FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ (.01) $ -- $ 1.00 0.67% March 31, 2005 -- (--)# -- 1.00 0.19% March 31, 2004 -- (--)## -- 1.00 0.01% March 31, 2003 -- (--)### -- 1.00 0.08% March 31, 2002 -- (.01) -- 1.00 1.35% March 31, 2001* -- (.02) -- 1.00 1.97% RATIO TO AVERAGE NET ASSETS: ------------------------------------ NET ASSETS, NET PORTFOLIO END OF GROSS NET INVESTMENT TURNOVER PERIOD (000'S EXPENSES EXPENSES INCOME RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------ U.S. GOVERNMENT MONEY MARKET FUND C-CLASS SEPTEMBER 30, 2005@ 1.87%** 1.87%** 1.35%** -- $ 160,178 March 31, 2005 1.87% 1.51% 0.19% -- 155,668 March 31, 2004 1.90% 1.08% 0.01% -- 131,704 March 31, 2003 1.91% 1.50% 0.06% -- 201,745 March 31, 2002 1.80% 1.80% 1.13% -- 47,920 March 31, 2001* 1.79%** 1.78%** 4.31%** -- 37,514 * SINCE THE COMMENCEMENT OF OPERATIONS: OCTOBER 19, 2000 -- U.S. GOVERNMENT MONEY MARKET FUND C-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE PERIOD. @ UNAUDITED # LESS THAN $.01 PER SHARE: U.S. GOVERNMENT MONEY MARKET FUND C-CLASS ACTUAL AMOUNT = $.00185. ## LESS THAN $.01 PER SHARE: U.S. GOVERNMENT MONEY MARKET FUND C-CLASS ACTUAL AMOUNT = $.00006. ### LESS THAN $.01 PER SHARE: U.S. GOVERNMENT MONEY MARKET FUND C-CLASS ACTUAL AMOUNT = $.0006. 108 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT MASTER - FEEDER ARRANGEMENT - -------------------------------------------------------------------------------- Nova Fund, Ursa Fund, Arktos Fund and Juno Fund are operating under a master-feeder arrangement'. Under a master-feeder arrangement, a Feeder Fund ("feeder") invests substantially all of its assets in the Master Portfolio ("master"), a separate open-ended investment company that has the same investment objectives as the feeder, e.g., the Nova Fund would act as a feeder, holding shares of the Nova Master Portfolio as its only investment. The Master Portfolio, in turn, invests in securities and derivatives to meet its investment objective. The following statements represent the Master Portfolios, which are the part of the master-feeder arrangement in which Feeder Funds invest. Please see Notes to Financial Statements for more information about the master-feeder arrangement. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 109 STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- NOVA URSA ARKTOS JUNO MASTER MASTER MASTER MASTER PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 6, and 9) $ 348,341,531 $ 474,863,227 $ 213,127,057 $ 3,425,431,651 Segregated Cash with Broker 9,109,800 10,442,250 3,075,000 9,441,963 Receivable for Short Sale -- -- -- 13,933,688 Receivable for Equity Index Swap Settlement (Note 1) -- 714,066 562,371 -- Receivable for Futures Contracts Settlement (Note 1) 318,366 -- -- 2,856,219 Receivable for Shares Purchased -- -- -- 485,505 Investment Income Receivable (Note 1) 289,935 56,913 57,652 468,079 - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 358,059,632 486,076,456 216,822,080 3,452,617,105 ================================================================================================================================== LIABILITIES Short Sale at Market Value -- -- -- 1,394,599,317 Payable for Futures Contracts Settlement (Note 1) -- 364,650 222,119 -- Payable upon Return of Securities Loaned (Note 9) 58,369,738 -- -- -- Payable for Securities Purchased (Note 1) 341,275 -- -- -- Liability for Shares Redeemed 858,892 454,218 8,433,403 -- Investment Advisory Fees Payable (Note 4) 184,180 372,236 161,804 1,590,408 Custody Fees Payable 5,894 9,926 4,315 42,733 Interest Payable -- -- -- 8,816,693 - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 59,759,979 1,201,030 8,821,641 1,405,049,151 ================================================================================================================================== NET ASSETS $ 298,299,653 $ 484,875,426 $ 208,000,439 $ 2,047,567,954 ================================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 464,730,988 $ 1,035,296,748 $ 364,040,550 $ 2,353,875,670 Undistributed Net Investment Income 5,967,652 5,119,207 2,443,645 7,242,606 Accumulated Net Realized Loss on Investments, Options, Equity Index Swaps, and Futures Contracts (207,594,858) (559,425,007) (159,154,491) (351,526,203) Net Unrealized Appreciation (Depreciation) on Investments, Options, Equity Index Swaps, and Futures Contracts 35,195,871 3,884,478 670,735 37,975,881 ================================================================================================================================== NET ASSETS $ 298,299,653 $ 484,875,426 $ 208,000,439 $ 2,047,567,954 ================================================================================================================================== SHARES OUTSTANDING 6,082,412 8,797,674 3,801,777 63,013,967 NET ASSET VALUES $ 49.04 $ 55.11 $ 54.71 $ 32.49 * THE COST OF SECURITIES AT VALUE IS $312,885,305, $474,863,227, $213,127,057, AND $3,425,596,792, RESPECTIVELY. See Notes to Financial Statements. 110 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT STATEMENTS OF OPERATIONS (UNAUDITED) Period Ended September 30, 2005 - -------------------------------------------------------------------------------- NOVA URSA ARKTOS JUNO MASTER MASTER MASTER MASTER PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - --------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 668,856 $ 7,242,728 $ 3,462,637 $ 57,955,302 Interest from Securities Lending, net (Note 9) 21,612 -- -- -- Dividends (Note 1) 2,088,018 -- -- -- Other Income 52,227 -- -- 22 - --------------------------------------------------------------------------------------------------------------------------- Total Income 2,830,713 7,242,728 3,462,637 57,955,324 - --------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 4) 1,114,595 2,070,774 993,719 10,411,877 Interest Expense -- -- -- 40,033,353 Custody Fees 34,012 52,747 25,273 267,488 - --------------------------------------------------------------------------------------------------------------------------- Total Expenses 1,148,607 2,123,521 1,018,992 50,712,718 - --------------------------------------------------------------------------------------------------------------------------- Net Investment Income 1,682,106 5,119,207 2,443,645 7,242,606 =========================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 8,767,986 -- -- (273,121) Equity Index Swaps -- (8,463,865) (11,337,303) -- Futures Contracts 2,718,059 (6,360,384) (3,639,266) (33,394,165) Securities Sold Short -- -- -- (92,290,860) - --------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 11,486,045 (14,824,249) (14,976,569) (125,958,146) - --------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 2,539,588 -- -- (130,203) Equity Index Swaps -- (1,066,187) (2,001,150) -- Futures Contracts 3,037,190 (3,551,045) (735,695) 9,289,103 Securities Sold Short -- -- -- 9,900,796 - --------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 5,576,778 (4,617,232) (2,736,845) 19,059,696 - --------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 17,062,823 (19,441,481) (17,713,414) (106,898,450) - --------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 18,744,929 $ (14,322,274) $ (15,269,769) $ (99,655,844) =========================================================================================================================== See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 111 STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- NOVA MASTER URSA MASTER PORTFOLIO PORTFOLIO - ------------------------------------------------------------------------------------------------------------ PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------ FROM OPERATIONS Net Investment Income (Loss) $ 1,682,106 $ 4,285,546 $ 5,119,207 $ 3,328,476 Net Realized Gain (Loss) on Investments 11,486,045 22,126,081 (14,824,249) (58,061,705) Net Change in Unrealized Appreciation (Depreciation) on Investments 5,576,778 (6,718,371) (4,617,232) 14,021,626 - ------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets from Operations 18,744,929 19,693,256 (14,322,274) (40,711,603) - ------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- (852) -- -- ============================================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 256,558,158 920,744,587 291,893,544 912,482,213 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- 852 -- -- COST OF SHARES REDEEMED (272,672,157) (911,016,929) (210,962,355) (897,785,236) ============================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (16,113,999) 9,728,510 80,931,189 14,696,977 - ------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets 2,630,930 29,420,914 66,608,915 (26,014,626) NET ASSETS--BEGINNING OF PERIOD 295,668,723 266,247,809 418,266,511 444,281,137 - ------------------------------------------------------------------------------------------------------------ NET ASSETS--END OF PERIOD $ 298,299,653 $ 295,668,723 $ 484,875,426 $ 418,266,511 ============================================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME $ 5,967,652 $ 4,285,546 $ 5,119,207 $ -- ============================================================================================================ TRANSACTIONS IN SHARES Shares Purchased 5,434,005 21,299,256 5,182,987 15,339,086 Shares Purchased Through Reinvestment -- 19 -- -- - ------------------------------------------------------------------------------------------------------------ Total Purchased 5,434,005 21,299,275 5,182,987 15,339,086 Shares Redeemed (5,799,366) (21,129,327) (3,778,880) (15,419,385) - ------------------------------------------------------------------------------------------------------------ Net Shares Purchased (Redeemed) (365,361) 169,948 1,404,107 (80,299) ============================================================================================================ + UNAUDITED See Notes to Financial Statements. 112 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ARKTOS MASTER JUNO MASTER PORTFOLIO PORTFOLIO - -------------------------------------------------------------------------------------------------------------------- PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - -------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 2,443,645 $ 1,505,576 $ 7,242,606 $ (51,436,221) Net Realized Gain (Loss) on Investments (14,976,569) (34,029,651) (125,958,146) (163,140,429) Net Change in Unrealized Appreciation (Depreciation) on Investments (2,736,845) 8,522,922 19,059,696 16,042,432 - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (15,269,769) (24,001,153) (99,655,844) (198,534,218) - -------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income -- -- -- -- ==================================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED 182,418,358 587,882,270 214,715,336 2,584,286,537 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT -- -- -- -- COST OF SHARES REDEEMED (195,896,384) (589,489,042) (843,083,823) (1,056,001,980) ==================================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (13,478,026) (1,606,772) (628,368,487) 1,528,284,557 - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (28,747,795) (25,607,925) (728,024,331) 1,329,750,339 NET ASSETS--BEGINNING OF PERIOD 236,748,234 262,356,159 2,775,592,285 1,445,841,946 - -------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 208,000,439 $ 236,748,234 $ 2,047,567,954 $ 2,775,592,285 ==================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME $ 2,443,645 $ -- $ 7,242,606 $ -- ==================================================================================================================== TRANSACTIONS IN SHARES Shares Purchased 3,175,996 9,816,871 6,670,749 71,015,584 Shares Purchased Through Reinvestment -- -- -- -- - -------------------------------------------------------------------------------------------------------------------- Total Purchased 3,175,996 9,816,871 6,670,749 71,015,584 Shares Redeemed (3,447,152) (10,077,144) (26,290,392) (29,804,719) - -------------------------------------------------------------------------------------------------------------------- Net Shares Purchased (Redeemed) (271,156) (260,273) (19,619,643) 41,210,865 ==================================================================================================================== THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 113 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT OF PERIOD (LOSS) ON SECURITIES FROM OPERATIONS INCOME - --------------------------------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO SEPTEMBER 30, 2005@ $ 45.86 $ (.39) $ 3.57 $ 3.18 $ -- March 31, 2005 42.41 .66 2.79 3.45 (--)# March 31, 2004 27.42 .32 14.99 15.31 (.32) March 31, 2003 45.36 .31 (17.94) (17.63) (.31) March 31, 2002* 50.00 .34 (4.62) (4.28) (.36) URSA MASTER PORTFOLIO SEPTEMBER 30, 2005@ 56.57 .58 (2.04) (1.46) -- March 31, 2005 59.44 .45 (3.32) (2.87) -- March 31, 2004 81.01 .06 (21.59) (21.53) (.04) March 31, 2003 64.57 .46 16.44 16.90 (.46) March 31, 2002 65.19 1.22 (.35) .87 (1.49) March 31, 2001* 49.71 2.80 15.50 18.30 (2.82) ARKTOS MASTER PORTFOLIO SEPTEMBER 30, 2005@ 58.13 .64 (4.06) (3.42) -- March 31, 2005 60.55 .37 (2.79) (2.42) -- March 31, 2004 88.73 (1.93) (26.25) (28.18) -- March 31, 2003 85.18 6.71 16.02 22.73 (19.18) March 31, 2002 96.47 1.37 (8.93) (7.56) (3.73) March 31, 2001* 53.67 3.70 42.92 46.62 (3.82) JUNO MASTER PORTFOLIO SEPTEMBER 30, 2005@ 33.59 .11 (1.21) (1.10) -- March 31, 2005 34.90 (.62) (.69) (1.31) -- March 31, 2004 37.35 (.61) (1.84) (2.45) -- March 31, 2003 46.25 (.41) (8.49) (8.90) -- March 31, 2002 45.39 .69 1.14 1.83 (.97) March 31, 2001* 49.91 2.72 (4.45) (1.73) (2.79) DISTRIBUTIONS NET INCREASE NET ASSET FROM NET (DECREASE) IN VALUE, TOTAL REALIZED TOTAL NET ASSET END OF INVESTMENT CAPITAL GAINS DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO SEPTEMBER 30, 2005@ $ -- $ -- $ 3.18 $ 49.04 6.93% March 31, 2005 -- (--)# 3.45 45.86 8.14% March 31, 2004 -- (.32) 14.99 42.41 55.84% March 31, 2003 -- (.31) (17.94) 27.42 (38.94)% March 31, 2002* -- (.36) (4.64) 45.36 (8.54)% URSA MASTER PORTFOLIO SEPTEMBER 30, 2005@ -- -- (1.46) 55.11 (2.58)% March 31, 2005 -- -- (2.87) 56.57 (4.83)% March 31, 2004 -- (.04) (21.57) 59.44 (26.58)% March 31, 2003 -- (.46) 16.44 81.01 26.21% March 31, 2002 -- (1.49) (.62) 64.57 1.37% March 31, 2001* -- (2.82) 15.48 65.19 38.06% ARKTOS MASTER PORTFOLIO SEPTEMBER 30, 2005@ -- -- (3.42) 54.71 (5.88)% March 31, 2005 -- -- (2.42) 58.13 (4.00)% March 31, 2004 -- -- (28.18) 60.55 (31.76)% March 31, 2003 -- (19.18) 3.55 88.73 20.95% March 31, 2002 -- (3.73) (11.29) 85.18 (8.03)% March 31, 2001* -- (3.82) 42.80 96.47 91.61% JUNO MASTER PORTFOLIO SEPTEMBER 30, 2005@ -- -- (1.10) 32.49 (3.27)% March 31, 2005 -- -- (1.31) 33.59 (3.75)% March 31, 2004 -- -- (2.45) 34.90 (6.56)% March 31, 2003 -- -- (8.90) 37.35 (19.24)% March 31, 2002 -- (.97) .86 46.25 4.12% March 31, 2001* -- (2.79) (4.52) 45.39 (3.67)% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET OPERATING INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES EXPENSES+ (LOSS) RATE*** OMITTED) - ---------------------------------------------------------------------------------------------------------- NOVA MASTER PORTFOLIO SEPTEMBER 30, 2005@ 0.78%** 0.78%** 0.78%** 1.14%** 114% $ 298,300 March 31, 2005 0.77% 0.77% 0.77% 1.26% 388% 295,669 March 31, 2004 0.78% 0.78% 0.78% 0.81% 540% 266,248 March 31, 2003 0.79% 0.79% 0.79% 0.91% 603% 170,793 March 31, 2002* 0.86%** 0.86%** 0.86%** 0.69%** 401% 291,992 URSA MASTER PORTFOLIO SEPTEMBER 30, 2005@ 0.93%** 0.93%** 0.93%** 2.25%** -- 484,875 March 31, 2005 0.92% 0.92% 0.92% 0.71% -- 418,267 March 31, 2004 0.93% 0.93% 0.93% 0.09% -- 444,281 March 31, 2003 0.94% 0.94% 0.94% 0.52% -- 529,062 March 31, 2002 0.94% 0.94% 0.94% 1.90% -- 228,485 March 31, 2001* 0.95%** 0.95%** 0.95%** 5.11%** -- 225,040 ARKTOS MASTER PORTFOLIO SEPTEMBER 30, 2005@ 0.93%** 0.93%** 0.93%** 2.24%** -- 208,000 March 31, 2005 0.92% 0.92% 0.92% 0.66% -- 236,748 March 31, 2004 0.93% 0.93% 0.93% 0.10% -- 262,356 March 31, 2003 0.94% 0.94% 0.94% 0.51% -- 149,147 March 31, 2002 0.94% 0.94% 0.94% 1.63% -- 115,929 March 31, 2001* 0.96%** 0.95%** 0.95%** 6.58%** 1,788% 78,919 JUNO MASTER PORTFOLIO SEPTEMBER 30, 2005@ 4.43%** 4.43%** 0.93%** 0.63%** 51% 2,047,568 March 31, 2005 4.71% 4.71% 0.92% (1.93)% 101% 2,775,592 March 31, 2004 5.12%^ 5.12%^ 0.93% (3.39)% 187% 1,445,842 March 31, 2003 5.18%^@ 5.18%^@ 0.94% (2.72)% -- 189,968 March 31, 2002 0.93% 0.93% 0.93% 1.61% -- 33,105 March 31, 2001* 0.94%** 0.94%** 0.94%** 5.04%** -- 12,417 * SINCE THE COMMENCEMENT OF OPERATIONS: APRIL 1, 2000-- URSA MASTER PORTFOLIO, ARKTOS MASTER PORTFOLIO, AND JUNO MASTER PORTFOLIO; AUGUST 1, 2001-- NOVA MASTER PORTFOLIO. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. THE URSA MASTER PORTFOLIO AND THE ARKTOS MASTER PORTFOLIO TYPICALLY HOLD MOST OF THEIR INVESTMENTS IN OPTIONS AND FUTURES CONTRACTS WHICH ARE DEEMED SHORT-TERM SECURITIES. + OPERATING EXPENSES EXCLUDE INTEREST EXPENSE FROM SECURITIES SOLD SHORT. @ UNAUDITED # LESS THAN $.01 PER SHARE: NOVA MASTER PORTFOLIO= $.00009 ^ THE JUNO MASTER PORTFOLIO HAS RESTATED ITS RATIOS OF GROSS AND NET EXPENSES TO AVERAGE NET ASSETS IN THE FINANCIAL HIGHLIGHTS IN ORDER TO REFLECT THE RECLASSIFICATION OF INTEREST EXPENSE FROM SECURITIES SOLD SHORT. THIS RESTATEMENT HAD NO EFFECT ON THE JUNO MASTER PORTFOLIO'S NET ASSETS VALUE, PER SHARE VALUE, NET INVESTMENT INCOME RATIOS, AND TOTAL INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS DURING ANY PERIOD. 114 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Rydex Series Funds (the "Trust") is registered with the SEC under the Investment Company Act of 1940 (the "1940 Act") as a non-diversified, open-ended investment company, and is authorized to issue an unlimited number of no par value shares. The Trust offers five separate classes of shares, Investor Class Shares, Advisor Class Shares, A-Class Shares, C-Class Shares, and H-Class Shares. C-Class Shares have a 1% Contingent Deferred Sales Charge ("CDSC") if Shares are redeemed within 12 months of purchase. Sales of shares of each Class are made without a sales charge at the net asset value per share, with the exception of A-Class Shares. A-Class Shares are sold at net asset value, plus the applicable front-end sales charge. The sales charge varies depending on the amount of your purchase, but will not exceed 4.75%. A-Class Share purchases of $1 million or more have a 1% CDSC if Shares are redeemed within 18 months of purchase. The current sales charge rates are as follows: SALES CHARGE SALES CHARGE AS % OF AS % OF NET AMOUNT OF INVESTMENT OFFERING PRICE AMOUNT INVESTED - -------------------------------------------------------------------------- Less than $100,000 4.75% 4.99% $100,000 but less than $250,000 3.75% 3.90% $250,000 but less than $500,000 2.75% 2.83% $500,000 but less than $1,000,000 1.60% 1.63% $1,000,000 or greater 0.00% 0.00% At September 30, 2005, the Trust consisted of forty-eight separate series: twenty-four Benchmark Funds, one Money Market Fund, one Absolute Return Strategies Fund, one Hedged Equity Fund, nineteen Sector Funds, and two Strategic Funds. This report covers the twenty-four Benchmark Funds and the Money Market Fund (the "Funds"), while the Sector Funds, the Strategic Funds, and the Absolute Return Strategies Fund and the Hedged Equity Fund are contained in separate reports. The following significant accounting policies are in conformity with accounting principles generally accepted in the United States of America and are consistently followed by the Trust. A. Equity securities listed on an exchange (New York Stock Exchange ("NYSE") or American Stock Exchange) are valued at the last quoted sales price as of close of business on the NYSE, usually 4:00 p.m., Eastern Time, on the valuation date. Equity securities listed on the Nasdaq market system are valued at the Nasdaq Official Closing Price, usually as of 4:00 p.m., Eastern Time, on the valuation date. Listed options held by the Trust are valued at the Official Settlement Price listed by the exchange, usually as of 4:00 p.m., Eastern Time. Over-the-Counter options held by the Trust are valued using the average bid price obtained from one or more security dealers. The value of futures contracts purchased and sold by the Trust are 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 last quoted sales price, usually as of 4:00 p.m., Eastern Time, on the valuation date. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., Eastern Time, 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., Eastern Time, to determine if fair valuation would provide a more accurate valuation. Short-term securities, if any, are valued at amortized cost, which approximates market value. The value of domestic equity index swap agreements entered into by the Funds is accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the last quoted value of the index that the swap pertains to at the close of the NYSE, usually 4:00 p.m., Eastern Time. The swap's market value is then adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreements. The value of foreign equity index, commodity index, and U.S. Dollar index swap agreements entered into by the Funds are accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the price at which orders are being filled at the close of the NYSE, usually 4:00 p.m., Eastern Time. In the event that no order is filled at 4:00 p.m., Eastern Time, the security dealer provides a fair value quote at which the swap agreement is valued. The swap's market value is 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 valued at fair value as determined in good faith by or under direction of the Board of Trustees or by Rydex Global Advisors (the "Advisor") using methods established or ratified by the Board of Trustees. These methods include, but are not limited to: (i) general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) other information and considerations, including current values in related-markets. The THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 115 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- shares of the Master Portfolios held by the Feeder Funds are valued at their respective daily Net Asset Value. B. Securities 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. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Interest income, including amortization of premiums and accretion of discount, is accrued on a daily basis. C. Net investment income is computed and dividends are declared daily in the U.S. Government Bond Fund and the U.S. Government Money Market Fund. Income dividends in these Funds are paid monthly. Dividends are reinvested in additional shares unless shareholders request payment in cash. Distributions of net investment income in the remaining Benchmark Funds and distributions of net realized capital gains in all funds are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for items such as deferral of wash sales and post-October losses and regulated futures contracts and options. Net investment income and loss, net realized gains and losses, and net assets are not affected by these differences. D. When a Fund engages in a short sale, 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 securities as collateral for short sales. The Fund is exposed to market risk based on the amount, if any, that the market value of the security exceeds the market value of the securities in the segregated account. Fees paid to brokers to borrow securities in connection with short sales are considered part of the cost of short sale transactions. In addition, the Fund must pay out the dividend rate of the equity or coupon rate of the treasury obligation to the purchaser and records this as an expense. Short Dividends or Interest Expense is not a fee charged to the shareholder by the Advisor or other service providers, rather it is more similar to the transaction costs or capital expenditures associated with the day-to-day management of any mutual fund in pursuit of its investment objective. Currently, the Juno Master Portfolio is the only fund practicing the use of short sales. E. Upon the purchase of an option by a Fund, the premium paid is recorded as an investment, the value of which is marked-to-market daily. When a purchased option expires, the Fund will realize a loss in the amount of the cost of the option. When a Fund enters into a closing sale transaction, the Fund will realize a gain or loss depending on whether the proceeds from the closing sale transaction are greater or less than the cost of the option. When a Fund exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When a Fund exercises a call option, the cost of the security that the Fund purchases upon exercise will be increased by the premium originally paid. When a Fund writes (sells) an option, an amount equal to the premium received is entered in the Trust's accounting records as an asset and equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. When a written option expires, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was sold). F. The Trust may purchase or sell stock and bond index futures contracts and options on such futures contracts. Futures contracts are contracts for delayed delivery of securities at a specified future delivery date and at a specific price. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. 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. G. The Trust may enter into equity index swap agreements, which are over-the-counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified equity security, basket of equity securities, or equity index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different equity security, basket of equity securities, or equity index. Swap agreements are used to obtain exposure to an equity or market without owning or taking physical custody of securities. H. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Trust does not isolate that portion of the results of operations resulting from 116 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain and loss from investments. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies and currency gains or losses realized between the trade and settlement dates on investment transactions. Net unrealized exchange gains and losses arise from changes in the fair values of assets and liabilities other than investments in securities at the fiscal period end, resulting from changes in exchange rates. I. The Trust may enter into forward currency contracts primarily to hedge against foreign currency exchange rate risks on its non-U.S. dollar denominated investment securities. When entering into a forward currency contract, the Fund agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. These contracts are valued daily and the corresponding unrealized gain or loss on the contracts, as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statement of Assets and Liabilities. Realized and unrealized gains and losses are included in the Statement of Operations. J. The Funds may also purchase American Depository Receipts ("ADR"), U.S. Government securities, enter into repurchase agreements, and engage in futures, options and equity swap transactions. K. The Fund may leave Cash in Custodian Bank overnight in its cash account with the custodian, U.S. Bank. Periodically, a Fund may have Cash Payable to Custodian Bank as an overdraft balance. A fee is incurred on this overdraft, calculated by multiplying the overdraft by a rate based on the federal funds rate. Segregated Cash with the Broker is held as collateral for investments in derivative instruments such as futures contracts and equity index swap agreements. L. Certain U.S. Government and Agency Obligations are traded on a discount basis; the interest rates shown on the Schedules of Investments reflect the discount rates paid at the time of purchase by the Fund. Other securities bear interest at the rates shown, payable at fixed dates through maturity. M. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the Classes based upon the value of the outstanding shares in each Class. Certain costs, such as distribution fees related to Advisor Class Shares, A-Class Shares and H-Class Shares and service and distribution fees related to C-Class Shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net asset value of each Fund included in the Trust. N. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 2. FINANCIAL INSTRUMENTS As part of its investment strategy, the Trust may utilize a variety of derivative instruments, including options, futures, options on futures, and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities. In 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 its affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. The risk associated with purchasing options is limited to the premium originally paid. Options written by a Fund involve, to varying degrees, risk of loss in excess of the option value reflected in the Statements of Assets and Liabilities. The risk in writing a covered call option is that a Fund may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a covered put option is that a Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market or, for over-the-counter options, because of the counterparty's inability to perform. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. There are several risks in connection with the use of futures contracts. Futures contracts involve, to varying degrees, risk of loss in excess of amounts reflected in the financial statements. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 117 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- The use of equity swaps involves risks that are different from those associated with ordinary portfolio securities transactions. Swap agreements may be considered to be illiquid. Although the Trust will not enter into any swap agreement unless the Advisor believes that the other party to the transaction is creditworthy, a Fund does bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of the agreement counterparty. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. Short sales are transactions in which the Fund sells a security it does not own. If the security the Fund sold short goes down 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 goes up 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. In conjunction with the use of options, futures, options on futures, swap agreements, as well as short sales of securities, 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 segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund. The risks inherent in the use of options, futures contracts, options on futures contracts, swap agreements as well as short sales of securities include i) adverse changes in the value of such instruments; ii) imperfect correlation between the price of the instruments and movements in the price of the underlying securities, indices, or futures contracts; iii) the possible absence of a liquid secondary market for any particular instrument at any time; and iv) the potential of counterparty default. 3. MASTER-FEEDER ARRANGEMENT Currently, the Nova Fund, the Ursa Fund, the Juno Fund, and the Arktos Fund are operating under a "master-feeder arrangement." Under a master-feeder arrangement, a Fund invests substantially all of its assets in the Master Portfolio, a separate open-ended investment company that has the same investment objectives as the Fund, e.g., the Nova Fund would act as a "feeder fund," holding shares of its Master Portfolio as its only investment. As a result, the Fund has an indirect interest in all of the securities owned by the Master Portfolio. Because of this indirect interest, the Fund's investment returns should be the same as those of the Master Portfolio, adjusted for Fund expenses. The financial statements of the Master Portfolios, including the Schedule of Investments, are included in this report and should be read in conjunction with the Funds' financial statements. The percentage of Nova Master Portfolio, Ursa Master Portfolio, Arktos Master Portfolio, and Juno Master Portfolio owned by the Nova Fund, the Ursa Fund, the Arktos Fund, and the Juno Fund, respectively, at September 30, 2005, was 100 percent. The Funds record their investments in the Master Portfolio at fair value. Valuation of securities held by the Master Portfolio is discussed in Note 1, Significant Accounting Policies. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of an investment advisory contract, the Trust pays the Advisor, an affiliated entity, investment advisory fees calculated at an annualized rate of 0.50% of the average daily net assets of the U.S. Government Bond Fund and the U.S. Government Money Market Fund; 0.75% of the average daily net assets of the OTC Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, the Large-Cap Growth Fund, and the Nova Master Portfolio; and 0.90% of the average daily net assets of the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Strengthening Dollar Fund, the Weakening Dollar Fund, the Ursa Master Portfolio, the Arktos Master Portfolio, and the Juno Master Portfolio. Certain officers and trustees of the Trust are also officers of the Advisor. Rydex Fund Services, Inc. (the "Servicer"), an affiliated entity, provides transfer agent and administrative services to the Trust for fees calculated at an annualized rate of 0.20% of the average daily net assets of the U.S. Government Bond Fund and the U.S. Government Money Market Fund; and 0.25% of the average daily net assets of the Nova Fund, the Ursa Fund, the OTC Fund, the Arktos Fund, the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the Juno Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, and the Large-Cap Growth Fund, the Strengthening Dollar Fund, and the Weakening Dollar Fund. The Servicer also provides accounting services to the Trust calculated at an annualized rate of 0.10% on the first $250 million of the average daily net assets, 0.075% on the next $250 million of the average daily net assets, 0.05% on the next $250 million of the average daily net assets, and 0.03% on the average daily net assets over $750 million of each of the Funds. Certain officers and trustees of the Trust are also officers of the Servicer. The Servicer also provides other necessary services to the Trust, such as accounting and auditing services, legal services, printing and mailing, etc., on a pass-through basis. Such expenses vary from Fund to Fund and are allocated to the Funds based on relative net assets. 118 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- The Trust has adopted a Distribution and Shareholder Services Plan applicable to Advisor Class Shares and a Distribution Plan applicable to A-Class Shares and H-Class Shares for which Rydex Distributors, Inc. (the "Distributor"), an affiliated entity, and other firms that provide distribution and/or shareholder services ("Service Providers") may receive compensation. If a Service Provider provides distribution services, the Trust will pay distribution fees to the Distributor at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. The Distributor, in turn, will pay the Service Provider out of its fees. The Distributor may, at its discretion, retain a portion of such payments to compensate itself for distribution services. With regard to Advisor Class Shares only, if a Service Provider provides shareholders services, the Distributor will receive shareholder servicing fees from the Trust at an annual rate not to exceed 0.25% of average daily net assets. The Distributor, in turn, will pay the Service Provider out of its fees. The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class Shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds' C-Class Shares average daily net assets. The annual 0.25% service fee compensates the shareholder's financial advisor for providing on-going services to the shareholder. The annual 0.75% distribution fee reimburses the Distributor for paying the shareholder's financial advisor an ongoing sales commission. The Distributor advances the first year's service and distribution fees to the Financial Advisor. The Distributor retains the service and distribution fees on accounts with no authorized dealer of record. Certain officers and trustees of the Trust are also officers of the Distributor. 5. FEDERAL INCOME TAX INFORMATION The Funds intend to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute all net investment income and capital gains to shareholders. Therefore, no Federal income tax provision is required. Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for derivatives, foreign currency transactions, losses deferred due to wash sales, losses deferred due to post-October losses, and excise tax regulations. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital. This includes net operating losses not utilized during the current year, capital loss carryforward expired, and the utilization of earnings and profits distributed to the shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes. These reclassifications have no effect on net assets or net asset values per share. Any taxable gain remaining at fiscal year end is distributed in the following year. At September 30, 2005, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value were as follows: TAX TAX NET TAX UNREALIZED UNREALIZED UNREALIZED FUND COST GAIN LOSS GAIN (LOSS) - ------------------------------------------------------------------------------------------------- Nova Fund $ 286,474,757 $ 11,824,896 $ -- $ 11,824,896 Ursa Fund 509,791,113 -- (24,915,687) (24,915,687) OTC Fund 880,150,148 257,473,960 (7,451,110) 250,022,850 Arktos Fund 218,723,890 275,936 (10,999,387) (10,723,451) Medius Fund 72,890,201 3,685,604 (1,240,460) 2,445,144 Inverse Mid-Cap Fund 8,628,286 -- (70,056) (70,056) Mekros Fund 148,915,222 9,902,574 (3,157,625) 6,744,949 Inverse Small-Cap Fund 51,160,641 -- (580,517) (580,517) U.S. Government Bond Fund 77,984,912 -- (1,152,508) (1,152,508) Juno Fund 2,303,556,355 -- (255,988,401) (255,988,401) Large-Cap Europe Fund 90,449,184 2,744,591 (196,634) 2,547,957 Large-Cap Japan Fund 123,610,520 7,455,259 -- 7,455,259 Small-Cap Value Fund 50,896,843 -- (4,276,166) (4,276,166) Mid-Cap Value Fund 147,948,776 4,786,348 (923,780) 3,862,568 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 119 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- TAX TAX NET TAX UNREALIZED UNREALIZED UNREALIZED FUND COST GAIN LOSS GAIN (LOSS) - -------------------------------------------------------------------------------------------------- Large-Cap Value Fund $ 64,379,847 $ -- $ (605,490) $ (605,490) Small-Cap Growth Fund 124,080,886 2,825,679 (1,392,552) 1,433,127 Mid-Cap Growth Fund 50,876,974 828,013 (587,007) 241,006 Large-Cap Growth Fund 33,034,359 -- (2,838,954) (2,838,954) Strengthening Dollar Fund 7,317,727 133,364 -- 133,364 Weakening Dollar Fund 12,269,623 -- (879,487) (879,487) U.S.Government Money Market Fund 1,602,074,222 -- -- -- Nova Master Portfolio 324,135,363 28,020,911 (4,075,098) 23,945,813 Ursa Master Portfolio 474,863,227 3,884,478 -- 3,884,478 Arktos Master Portfolio 213,127,057 670,735 -- 670,735 Juno Master Portfolio 3,566,776,177 38,141,022 (141,344,526) (103,203,504) 6. REPURCHASE AGREEMENTS The Trust transfers uninvested cash balances into a single joint account, along with uninvested cash balances of the Core Equity Fund, the Sector Rotation Fund, the Absolute Return Strategies Fund, the Hedged Equity Fund, and the Commodities Fund (all included in the Trust, but contained in separate reports). The daily aggregate balance is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury. The collateral is in the possession of the Trust's custodian and is evaluated daily to ensure that its market value exceeds by, at a minimum, 102% of the delivery value of the repurchase agreement at maturity. The repurchase agreements executed by the joint account and outstanding as of September 30, 2005, were as follows: COUNTERPARTY TERMS OF AGREEMENT FACE VALUE MARKET VALUE MATURITY VALUE - ------------------------------------------------------------------------------------------------ Bear Stearns Cos., Inc. 3.25% due 10/03/05 $ 525,000,000 $ 525,000,000 $ 525,142,188 Citigroup, Inc. 3.24% due 10/03/05 375,000,000 375,000,000 375,101,250 Lehman Brothers, Inc. 3.25% due 10/03/05 295,619,135 295,619,135 295,699,198 Morgan Stanley 3.24% due 10/03/05 250,000,000 250,000,000 250,067,500 - ------------------------------------------------------------------------------------------------ $ 1,445,619,135 $ 1,446,010,136 - ------------------------------------------------------------------------------------------------ As of September 30, 2005, the collateral for the repurchase agreements in the joint account was as follows: SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE - ------------------------------------------------------------------------------------------------ U.S. Treasury Bonds 6.125% - 8.000% $ 203,611,000 $ 257,500,263 U.S. Treasury Notes 3.000% - 3.875% 1,033,367,912 1,027,768,192 U.S. Currency 0.000% 188,000,000 188,000,000 - ------------------------------------------------------------------------------------------------ $ 1,473,268,455 - ------------------------------------------------------------------------------------------------ In the event of counterparty default, the Trust has the right to collect the collateral to offset losses incurred. There is potential loss to the Trust in the event the Trust is delayed or prevented from exercising its 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 Trust seeks to assert its rights. The Trust's investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the credit worthiness of those banks and dealers with which the Trust enters into repurchase agreements to evaluate potential risks. 120 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 7. SECURITIES TRANSACTIONS During the period ended September 30, 2005, cost of purchases and proceeds from sales of investment securities, excluding short-term and temporary cash investments, were: INVERSE INVERSE U.S. LARGE-CAP OTC MEDIUS MID-CAP MEKROS SMALL-CAP GOVERNMENT EUROPE FUND FUND FUND FUND FUND BOND FUND FUND - -------------------------------------------------------------------------------------------------------------------- Purchases $ 529,347,556 $ 136,674,305 $ -- $ 305,048,761 $ -- $540,255,320 $116,043,619 Sales $ 548,560,927 $ 166,013,310 $ -- $ 288,358,207 $ -- $563,124,600 $ 41,947,883 LARGE-CAP SMALL-CAP MID-CAP LARGE-CAP SMALL-CAP MID-CAP LARGE-CAP JAPAN VALUE VALUE VALUE GROWTH GROWTH GROWTH FUND FUND FUND FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------- Purchases $ -- $ 270,253,085 $ 344,402,948 $ 287,370,169 $306,081,101 $194,116,531 $256,370,911 Sales $ -- $ 318,821,955 $ 356,827,220 $ 264,385,417 $228,905,509 $181,795,052 $260,469,054 U.S. STRENGTHENING WEAKENING GOVERNMENT DOLLAR DOLLAR MONEY FUND FUND MARKET FUND - -------------------------------------------------------- Purchases $ -- $ -- $ -- Sales $ -- $ -- $ -- NOVA MASTER URSA MASTER ARKTOS MASTER JUNO MASTER PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO - ------------------------------------------------------------------------ Purchases $ 287,456,152 $ -- $ -- $ 864,740,551 Sales $ 300,920,813 $ -- $ -- $1,710,310,966 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 121 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 8. SHARE TRANSACTIONS The Trust is authorized to distribute an unlimited number of no par value shares. Transactions in shares for the periods presented were: SHARES PURCHASED PURCHASED THROUGH DIVIDEND REINVESTMENT - --------------------------------------------------------------------------------------------------- PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------- NOVA FUND Investor Class 15,366,634 57,482,445 -- -- Advisor Class 5,380,602 15,439,006 -- -- A-Class 655,290 997,223 -- -- C-Class 1,671,317 7,074,750 -- -- URSA FUND Investor Class 56,372,831 168,290,971 -- -- Advisor Class 13,398,521 28,731,154 -- -- A-Class 1,492,688 1,774,311 -- -- C-Class 5,165,157 17,864,496 -- -- OTC FUND Investor Class 46,719,255 140,651,741 -- -- Advisor Class 13,012,366 21,246,975 -- -- A-Class 121,536 403,601 -- -- C-Class 2,770,747 12,971,805 -- -- ARKTOS FUND Investor Class 14,305,105 38,823,800 -- -- Advisor Class 1,192,567 4,507,444 -- -- A-Class 194,550 709,777 -- -- C-Class 1,602,286 5,928,300 -- -- MEDIUS FUND A-Class 47,703 60,112 -- -- C-Class 1,528,704 5,615,876 -- -- H-Class 11,450,968 34,349,386 -- -- INVERSE MID-CAP FUND A-Class 12,148 9,062 -- -- C-Class 197,597 618,408 -- -- H-Class 2,209,716 6,074,879 -- -- MEKROS FUND A-Class 209,477 331,933 -- 461 C-Class 3,148,896 12,055,055 -- 8,959 H-Class 45,701,008 110,648,003 -- 35,282 INVERSE SMALL-CAP FUND A-Class 84,018 51,552 -- -- C-Class 705,211 2,900,097 -- -- H-Class 8,100,203 18,267,219 -- -- SHARES REDEEMED NET SHARES PURCHASED (REDEEMED) - ----------------------------------------------------------------------------------------- PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ----------------------------------------------------------------------------------------- NOVA FUND Investor Class (16,409,463) (58,494,317) (1,042,829) (1,011,872) Advisor Class (5,168,282) (15,321,064) 212,320 117,942 A-Class (379,047) (263,045) 276,243 734,178 C-Class (1,707,409) (6,487,904) (36,092) 586,846 URSA FUND Investor Class (48,249,548) (169,302,511) 8,123,283 (1,011,540) Advisor Class (13,614,662) (28,912,809) (216,141) (181,655) A-Class (520,758) (899,806) 971,930 874,505 C-Class (4,683,895) (17,743,222) 481,262 121,274 OTC FUND Investor Class (45,788,462) (148,285,352) 930,793 (7,633,611) Advisor Class (12,601,021) (25,259,286) 411,345 (4,012,311) A-Class (99,338) (214,931) 22,198 188,670 C-Class (2,741,714) (12,904,659) 29,033 67,146 ARKTOS FUND Investor Class (14,670,866) (38,920,504) (365,761) (96,704) Advisor Class (1,369,724) (4,508,845) (177,157) (1,401) A-Class (325,954) (476,220) (131,404) 233,557 C-Class (1,544,582) (6,644,566) 57,704 (716,266) MEDIUS FUND A-Class (29,815) (27,302) 17,888 32,810 C-Class (1,603,492) (5,558,920) (74,788) 56,956 H-Class (12,001,611) (34,898,715) (550,643) (549,329) INVERSE MID-CAP FUND A-Class (1,546) (7,704) 10,602 1,358 C-Class (211,457) (598,039) (13,860) 20,369 H-Class (2,715,505) (5,446,167) (505,789) 628,712 MEKROS FUND A-Class (168,191) (211,255) 41,286 121,139 C-Class (2,840,135) (13,261,033) 308,761 (1,197,019) H-Class (44,567,674) (114,857,270) 1,133,334 (4,173,985) INVERSE SMALL-CAP FUND A-Class (76,353) (42,815) 7,665 8,737 C-Class (667,197) (2,823,759) 38,014 76,338 H-Class (8,106,126) (17,354,618) (5,923) 912,601 + UNAUDITED 122 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- SHARES PURCHASED PURCHASED THROUGH DIVIDEND REINVESTMENT - -------------------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - -------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND Investor Class 24,188,420 62,414,845 41,560 121,807 Advisor Class 44,776,117 47,245,621 115,490 183,519 A-Class 283,255 483,989 1,023 1,075 C-Class 5,756,738 18,129,933 11,703 23,019 JUNO FUND Investor Class 34,761,212 164,148,402 -- -- Advisor Class 10,225,953 26,247,651 -- -- A-Class 1,541,822 12,533,793 -- -- C-Class 5,514,130 51,258,840 -- -- LARGE-CAP EUROPE FUND A-Class 130,414 49,853 -- 271 C-Class 1,904,962 4,295,340 -- 7,616 H-Class 10,824,737 23,821,380 -- 171,099 LARGE-CAP JAPAN FUND A-Class 68,037 14,460 -- 370 C-Class 261,089 837,470 -- 7,145 H-Class 8,524,221 17,570,283 -- 68,002 SMALL-CAP VALUE FUND A-Class 412,295 127,767* -- 11* C-Class 2,652,993 1,959,880 -- 1,040 H-Class 9,268,629 30,483,096 -- 25,822 MID-CAP VALUE FUND A-Class 99,887 84,808* -- 8* C-Class 2,648,812 2,866,918 -- 159 H-Class 12,639,809 24,551,108 -- 12,968 LARGE-CAP VALUE FUND A-Class 146,183 23,110* -- 2* C-Class 4,938,193 2,417,522 -- 288 H-Class 7,419,931 22,324,716 -- 4,393 SHARES REDEEMED NET SHARES PURCHASED (REDEEMED) - -------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - -------------------------------------------------------------------------------------------- U.S. GOVERNMENT BOND FUND Investor Class (24,455,284) (62,466,069) (225,304) 70,583 Advisor Class (45,847,912) (46,842,070) (956,305) 587,070 A-Class (338,896) (331,301) (54,618) 153,763 C-Class (6,146,756) (17,505,300) (378,315) 647,652 JUNO FUND Investor Class (53,840,961) (131,892,342) (19,079,749) 32,256,060 Advisor Class (15,587,211) (16,525,201) (5,361,258) 9,722,450 A-Class (2,172,965) (3,385,175) (631,143) 9,148,618 C-Class (15,173,814) (27,791,309) (9,659,684) 23,467,531 LARGE-CAP EUROPE FUND A-Class (39,433) (39,660) 90,981 10,464 C-Class (1,899,113) (4,094,711) 5,849 208,245 H-Class (9,890,549) (22,714,914) 934,188 1,277,565 LARGE-CAP JAPAN FUND A-Class (31,968) (6,823) 36,069 8,007 C-Class (235,047) (889,463) 26,042 (44,848) H-Class (5,753,635) (21,578,874) 2,770,586 (3,940,589) SMALL-CAP VALUE FUND A-Class (434,380) (102,458)* (22,085) 25,320* C-Class (2,988,993) (1,614,516) (336,000) 346,404 H-Class (10,673,179) (28,602,905) (1,404,550) 1,906,013 MID-CAP VALUE FUND A-Class (91,162) (73,451)* 8,725 11,365* C-Class (2,511,762) (2,571,732) 137,050 295,345 H-Class (13,251,295) (21,074,966) (611,486) 3,489,110 LARGE-CAP VALUE FUND A-Class (116,977) (15,183)* 29,206 7,929* C-Class (4,972,065) (2,347,191) (33,872) 70,619 H-Class (6,567,506) (21,714,513) 852,425 614,596 * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. + UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 123 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- SHARES PURCHASED PURCHASED THROUGH DIVIDEND REINVESTMENT - --------------------------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND A-Class 126,326 4,801* -- 26* C-Class 1,315,492 2,598,719 -- 1,452 H-Class 11,401,151 24,995,214 -- 34,490 MID-CAP GROWTH FUND A-Class 137,637 20,614* -- 1* C-Class 1,174,696 1,014,418 -- 11 H-Class 7,447,477 15,067,599 -- 497 LARGE-CAP GROWTH FUND A-Class 172,372 3,244* -- -- C-Class 4,811,524 4,428,678 -- 6 H-Class 7,341,207 16,112,122 -- 348 STRENGTHENING DOLLAR FUND** A-Class 20,293 -- -- -- C-Class 146,594 -- -- -- H-Class 3,504,565 -- -- -- WEAKENING DOLLAR FUND** A-Class 29,221 -- -- -- C-Class 112,659 -- -- -- H-Class 2,850,656 -- -- -- U.S. GOVERNMENT MONEY MARKET FUND Investor Class 9,159,091,282 18,938,656,130 13,373,423 8,910,853 Advisor Class 1,488,027,522 3,577,821,001 1,842,953 853,529 A-Class 37,444,317 23,938,925 57,707 22,293 C-Class 1,212,221,507 2,540,283,761 1,016,153 282,501 SHARES REDEEMED NET SHARES PURCHASED (REDEEMED) - ------------------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------- SMALL-CAP GROWTH FUND A-Class (116,721) (2,096)* 9,605 2,731* C-Class (1,061,282) (2,601,481) 254,210 (1,310) H-Class (9,022,164) (24,195,230) 2,378,987 834,474 MID-CAP GROWTH FUND A-Class (139,441) -- (1,804) 20,615* C-Class (1,227,176) (974,263) (52,480) 40,166 H-Class (6,907,173) (14,209,407) 540,304 858,689 LARGE-CAP GROWTH FUND A-Class (164,514) (241)* 7,858 3,003* C-Class (5,512,585) (3,617,714) (701,061) 810,970 H-Class (6,863,719) (15,664,901) 477,488 447,569 STRENGTHENING DOLLAR FUND** A-Class (17,813) -- 2,480 -- C-Class (103,158) -- 43,436 -- H-Class (3,149,121) -- 355,444 -- WEAKENING DOLLAR FUND** A-Class (11,177) -- 18,044 -- C-Class (87,239) -- 25,420 -- H-Class (2,188,372) -- 662,284 -- U.S. GOVERNMENT MONEY MARKET FUND Investor Class (9,200,273,680) (18,808,627,729) (27,808,975) 138,939,254 Advisor Class (1,553,901,339) (3,582,384,097) (64,030,864) (3,709,567) A-Class (34,662,937) (16,627,319) 2,839,087 7,333,899 C-Class (1,208,728,060) (2,515,971,844) 4,509,600 24,594,418 * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. ** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 25, 2005. + UNAUDITED 124 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- 9. PORTFOLIO SECURITIES LOANED The Trust lends its securities to approved brokers to earn additional income. Within this arrangement, the Trust acts as the lender, U.S. Bank acts as the agent, and other approved registered broker dealers act as the borrowers. The Trust receives cash collateral, valued at 100% of the value of the securities on loan, which is initially held in a segregated account at U.S. Bank. As agent, U.S. Bank may, for investment purposes, pool the Trust's collateral in joint accounts with cash collateral from one or more other securities lending customers of U.S. Bank. Under the terms of the Trust's securities lending agreement with U.S. Bank, cash collateral may be invested by U.S. Bank in certain high quality, liquid investments. At September 30, 2005, the pooled cash collateral investments consisted of repurchase agreements (47.59%), commercial paper (31.82%), corporate bonds (20.58%), and money market mutual funds (0.01%). 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 fund the next business day. Although the collateral mitigates risk, the Trust 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 Trust has the right under the securities lending agreement to recover the securities from the borrower on demand. At September 30, 2005, the following funds participated in securities lending and received cash collateral: VALUE OF CASH SECURITIES FUND COLLATERAL LOANED - ----------------------------------------------------------------------- OTC Fund $ 209,194,920 $ 203,517,476 Medius Fund 12,774,694 12,420,443 Mekros Fund 16,702,851 16,063,850 Small-Cap Value Fund 5,043,318 4,870,585 Mid-Cap Value Fund 28,753,596 27,835,160 Large-Cap Value Fund 8,782,960 8,508,570 Small-Cap Growth Fund 13,293,323 12,890,861 Mid-Cap Growth Fund 8,082,491 7,874,061 Large-Cap Growth Fund 3,088,154 2,998,870 U.S. Government Money Market Fund 100,000,000 99,550,000 Nova Master Portfolio 58,369,738 56,708,823 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 125 OTHER INFORMATION - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds' portfolios is available, without charge and upon request, by calling 1-800-820-0888. This information is also available from the EDGAR database on the SEC's site at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES INFORMATION The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC's website at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1-800-820-0888. RYDEX INVESTMENTS BOARD REVIEW AND APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT The 1940 Act requires that the initial approval of, as well as the continuation of, a fund's investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or "interested persons" of any party (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund's trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the SEC takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement. Consistent with these responsibilities, the Rydex Series Funds Board of Trustees (the "Board") calls and holds one meeting each year that is dedicated to considering whether to renew the investment advisory agreement (the "Advisory Agreement") between the Trust and PADCO Advisors, Inc., which does business under the name Rydex Investments ("Rydex Investments") with respect to existing funds in the Trust, including the funds discussed in this Semi-Annual Report (each a "Fund" and collectively, the "Funds"), and to reviewing certain other agreements pursuant to which Rydex Investments provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by Rydex Investments, including information about Rydex Investments' affiliates, personnel and operations. The Board also receives data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and performance. The Board also receives a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements. In addition, the Independent Trustees receive advice from independent counsel to the Independent Trustees, meet in executive session outside the presence of fund management, if necessary, and participate in question and answer sessions with representatives of Rydex Investments. At a meeting held on August 28 and 29, 2005, the Board approved the selection of Rydex Investments and the continuance of the Advisory Agreement for an additional one-year period, based on its review of qualitative and quantitative information provided by Rydex Investments. The Board's approval of the Advisory Agreement was based on consideration and evaluation of a variety of specific factors discussed at that meeting and at prior meetings, including: NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY RYDEX INVESTMENTS The Board reviewed the scope of services to be provided by Rydex Investments under the Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by Rydex Investments for the past year and the scope of services required to be provided by Rydex Investments for the upcoming year. In reviewing the scope of services provided to the Funds by Rydex Investments, the Board reviewed and discussed Rydex Investments' investment experience, noting that Rydex Investments and its affiliates have committed significant resources over time to the support of the Funds. The Board also considered Rydex Investments' compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that Rydex Investments provides information regarding the portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. In addition to the above considerations, the Board reviewed and considered Rydex Investments' investment processes and strategies, and matters related to Rydex Investments' portfolio transaction policies 126 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- and procedures. In particular, the Board noted the substantial volume of portfolio trades and shareholder transaction activity, in general, processed by Rydex Investments due to the unlimited exchange policy of the majority of the Funds. The Board further noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by Rydex Investments to the Funds under the Advisory Agreement were appropriate and continued to support the Board's original selection of Rydex Investments as investment adviser to the Funds. FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND RYDEX INVESTMENTS The Board reviewed statistical information prepared by Rydex Investments regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act determined by Rydex Investments to comprise each Fund's applicable peer group. Because few funds seek to provide unlimited exchange privileges similar to those of the Funds (other than the Core Equity Fund, Sector Rotation Fund, Absolute Return Strategies Fund, and Hedged Equity Fund), each Fund's applicable peer group is generally limited to the funds of two unaffiliated mutual fund families. In addition, the Board reviewed statistical information prepared by Rydex Investments relating to the performance of each Fund, as well as each Fund's ability to successfully track its benchmark over time, and a comparison of each Fund's performance to funds with similar investment objectives for the same periods and to appropriate indices/benchmarks, in light of total return, yield and market trends. The Board further noted that despite the unique nature of the Funds, the peer fund information presented to the Board was meaningful because the peer funds' investment objectives and strategies were closely aligned with those of the Funds. The Board noted that most of the Funds either outperformed their peer funds or performed in line with them over relevant periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the peer funds. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by Rydex Investments, as compared to the investment advisory fees and expense levels and performance of the peer funds, were satisfactory for the purposes of approving the continuance of the Advisory Agreement. COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY RYDEX INVESTMENTS AND ITS AFFILIATES The Board reviewed information about the profitability of the Funds to Rydex Investments based on the advisory fees payable under the Advisory Agreement for the last calendar year. Rydex Investments also presented the Board with material discussing its methodology for determining the level of advisory fees assessable to the Funds. The Board analyzed the Funds' expenses, including the investment advisory fees paid to Rydex Investments. The Board also reviewed information regarding direct revenue received by Rydex Investments and ancillary revenue received by Rydex Investments and/or its affiliates in connection with the services provided to the Funds by Rydex Investments (as discussed below). The Board also discussed Rydex Investments' profit margin as reflected in Rydex Investments' profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by Rydex Investments and its affiliates under the Advisory Agreement and from other relationships between the Funds and Rydex Investments and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate. ECONOMIES OF SCALE In connection with its review of the Funds' profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds' asset levels. The Board noted that the Advisory Agreement for the Funds did not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. The Board also noted that though Rydex Investments' assets under management were significant, the amount is spread among more than 95 Funds. Further limiting the realization of economies of scale, is the ability of shareholders of a majority of the Funds to engage in unlimited trading. The Board also reviewed Rydex Investments' historic profitability as investment adviser to the Funds and determined that reductions in fee rates or additions of breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that there are limited economies of scale to share with the Funds' shareholders. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 127 OTHER INFORMATION (CONCLUDED) - -------------------------------------------------------------------------------- OTHER BENEFITS TO RYDEX INVESTMENTS AND/OR ITS AFFILIATES The Board noted that Rydex Investments reports its use of soft dollars to the Board on a quarterly basis, as well as any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or Rydex Investments pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds' shareholders. Based on the above analysis, the Board determined that the Advisory Agreement, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Agreement. 128 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT INFORMATION ON BOARD OF TRUSTEES AND OFFICERS - -------------------------------------------------------------------------------- A Board of Trustees oversees all Rydex Investments, in which its members have no stated term of service and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 1-800-820-0888. All Trustees and Officers may be reached c/o Rydex Investments, 9601 Blackwell Rd., Suite 500, Rockville, MD 20850. TRUSTEES AND OFFICERS LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - --------------------------- ----------------------------------------- -------------- CARL G. VERBONCOEUR* Rydex Series Funds - 2004 110 Trustee, President (1952) Rydex Variable Trust - 2004 Rydex Dynamic Funds - 2004 Rydex ETF Trust - 2004 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer of Rydex Fund Services, Inc., PADCO Advisors, Inc., PADCO Advisors II, Inc., and Rydex Distributors, Inc. (2003 to present); Executive Vice President of Rydex Fund Services, Inc. (2000 to 2003); Vice President of Rydex Fund Services, Inc. and Rydex Distributors, Inc. (1997 to 2000) ----------------------------------------- MICHAEL P. BYRUM* Rydex Series Funds - 2005 110 Trustee, Vice President and Rydex Variable Trust - 2005 Secretary (1970) Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2004 to present); Vice President of Rydex Series Funds (1997 to present); Vice President of Rydex Variable Trust (1998 to present); Vice President of Rydex Dynamic Funds (1999 to present); Vice President of Rydex ETF Trust (2002 to present); President and Trustee of Rydex Capital Partners SPhinX Fund (2003 to present); President of Rydex Global Advisors (2004 to present); Chief Operating Officer of Rydex Global Advisors and Rydex Distributors, Inc. (2003 to 2004) - -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - --------------------------- ----------------------------------------- -------------- COREY A. COLEHOUR Rydex Series Funds - 1993 110 Trustee (1945) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Senior Vice President of Marketing/Co-Owner, Schield Management Company ----------------------------------------- J. KENNETH DALTON Rydex Series Funds - 1995 110 Trustee (1941) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and Investor, The Dalton Group ----------------------------------------- JOHN O. DEMARET Rydex Series Funds - 1997 110 Trustee (1940) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired ----------------------------------------- THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 129 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (CONCLUDED) - -------------------------------------------------------------------------------- LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - --------------------------- ----------------------------------------- -------------- WERNER E. KELLER Rydex Series Funds - 2005 110 Trustee (1940) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present); Chairman, Centurion Capital Management (1991 to 2001) ----------------------------------------- THOMAS F. LYDON, JR. Rydex Series Funds - 2005 110 Trustee (1960) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends ----------------------------------------- PATRICK T. MCCARVILLE Rydex Series Funds - 1997 110 Trustee (1942) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive Officer, Par Industries, Inc. ----------------------------------------- ROGER SOMERS Rydex Series Funds - 1993 110 Trustee (1944) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine - -------------------------------------------------------------------------------- EXECUTIVE OFFICERS NAME, POSITION AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH DURING PAST FIVE YEARS - ----------------------------------------------- ---------------------------------------------------------------------------------- NICK BONOS* Vice President and Treasurer of Rydex Series Funds, Rydex Variable Trust, Rydex Vice President and Treasurer (1963) Dynamic Funds, Rydex ETF Trust, and Rydex Capital Partners SPhinX Fund (2003 to present); Senior Vice President of Rydex Fund Services, Inc. (2003 to present); Vice President of Accounting of Rydex Fund Services, Inc. (2000 to 2003) JOANNA M. HAIGNEY* Chief Compliance Officer of Rydex Series Funds, Rydex Variable Trust, and Rydex Chief Compliance Officer and Assistant Dynamic Funds (2004 to present); Assistant Secretary of Rydex Series Funds, Rydex Secretary (1967) Variable Trust, and Rydex Dynamic Funds (2000 to present); Assistant Secretary of Rydex ETF Trust (2002 to present); Secretary of Rydex Capital Partners SPhinX Fund (2003 to present); Vice President of Compliance of Rydex Fund Services, Inc. (2000 to present) * OFFICERS OF THE FUND ARE DEEMED TO BE "INTERESTED PERSONS" OF THE TRUST, WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT, INASMUCH AS THIS PERSON IS AFFILIATED WITH THE ADVISOR. 130 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT - -------------------------------------------------------------------------------- This page intentionally left blank. - -------------------------------------------------------------------------------- This page intentionally left blank. - -------------------------------------------------------------------------------- This page intentionally left blank. [LOGO] RYDEXINVESTMENTS Essential for modern markets(TM) 9601 Blackwell Road, Suite 500 Rockville, MD 20850 www.rydexinvestments.com 800-820-0888 RBENF-SEMI-0905x0306 BANKING FUND BASIC MATERIALS FUND BIOTECHNOLOGY FUND COMMODITIES FUND CONSUMER PRODUCTS FUND ELECTRONICS FUND ENERGY FUND SEPTEMBER 30, 2005 RYDEX SERIES FUNDS SECTOR FUNDS SEMI-ANNUAL REPORT 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 [GRAPHIC OMITTED] [LOGO] RYDEXINVESTMENTS ESSENTIAL FOR MODERN MARKETS(TM) This report and the financial statements contained herein are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Distributed by Rydex Distributors, Inc. TABLE OF CONTENTS - -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS ................................................ 2 ABOUT SHAREHOLDERS' FUND EXPENSES ......................................... 3 FUND PROFILES ............................................................. 8 SCHEDULES OF INVESTMENTS .................................................. 18 STATEMENTS OF ASSETS AND LIABILITIES ...................................... 48 STATEMENTS OF OPERATIONS .................................................. 52 STATEMENTS OF CHANGES IN NET ASSETS ....................................... 56 FINANCIAL HIGHLIGHTS ...................................................... 62 NOTES TO FINANCIAL STATEMENTS ............................................. 72 OTHER INFORMATION ......................................................... 81 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS ............................. 84 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 1 LETTER TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- DEAR SHAREHOLDER: The six-month period from April through September 2005 was a tumultuous one for the economy and the financial markets. Investors, consumers and businesses alike were rocked by the twin hurricanes of Katrina and Rita and the unprecedented rise in energy prices. Energy prices-particularly for refined products such as gas, diesel, jet fuel and heating oil-skyrocketed, causing consumer confidence to plummet and raising the prospect of a pullback in consumer spending. Typically, developments like these would have a downward effect on equity prices and interest rates, but that wasn't the case as stocks rallied and interest rates finished the period largely where they began. Surprisingly, U.S. equity markets navigated the storms remarkably well. While the old economy Dow Jones Industrial Average(R) Index rose only 1.76%, the broader S&P 500(R) Index gained 5.02% and the tech-laden Nasdaq 100(R) Index rose 8.04% on the back of a mini-rally in technology stocks. Two factors appear to have driven prices higher. The first is that earnings growth remained strong, increasing at a double-digit pace in both the second and third quarters, and investors appeared to be looking beyond the immediate impact of the hurricanes to the anticipated "kick" to economic growth as reconstruction efforts got underway. As one might expect, energy stocks led the market higher. In fact, energy prices were well on their way up prior to the arrival of Katrina as the price of a barrel of crude oil rose from $49.69 in late May to a high of $69.74 by the end of August. The Gulf storms exacerbated this rise. That energy prices were already well on their way up is attributable to the rapid growth in the powerhouse economies of China and India. China, in particular, continues to import commodities of all kinds at a voracious rate. In fact, if one takes a closer look at stock prices during this period, the effect of rising energy prices and the impact of the storms becomes apparent. Clearly, energy stocks were the big winners as the S&P Energy Index rose nearly 19.56%. In fact, the meteoric rise in energy stocks is responsible for much of the stock market's positive performance this year. Utility stocks also fared well as the S&P Utility Index shot up 15.24% in anticipation of a substantial rise in home heating costs. Technology stocks rallied as valuations were perceived to be attractive. On the flip side, health care stocks, which tend to be perceived as defensive in nature, rose nearly 5.00% as investors looked for a consumer driven economic slowdown in the wake of the devastation left by Katrina and Rita. Despite the uncertainty, the Federal Reserve ("Fed") remained vigilant against any signs of increasing inflation. The shock to the economy of the storms and the loss of some of the nation's critical energy infrastructure led many to predict a pause in the Fed's rate hikes. This was not to be, as the Fed implemented four 25 basis point rate hikes during the period. Longer rates, on the other hand, actually declined from April to September, with the yield on the benchmark 10-Year Treasury Note falling 15 basis points to 4.33%. Despite this decline, interest rates are clearly on the upswing. Long-term rates bottomed on June 1, as the yield on the 10-Year Note reached 3.89%. Since the beginning of June, the trend has been up, with the 10-Year Note peaking at 4.42% in early August. With all of the crosscurrents in the economy and the financial markets, stock price behavior is likely to remain choppy and erratic. Investment strategies that do not depend on highly directional markets will likely fare well as we move through the remainder of 2005. We appreciate the trust you have placed in our firm by investing with us. Sincerely, /s/ Carl G. Verboncoeur Carl G. Verboncoeur President 2 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES - -------------------------------------------------------------------------------- All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. As a shareholder of the fund, you incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; 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 you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2005 and ending September 30, 2005. The following tables illustrate your fund's costs in two ways: TABLE 1. BASED ON ACTUAL FUND RETURN. This section helps you estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading "Expenses Paid During Period." Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. TABLE 2. BASED ON HYPOTHETICAL 5% RETURN. This section is intended to help you compare your 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 you 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. You can assess your fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. The calculations above assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs, which maybe incurred by some of the fund's classes. These costs may include, but are not limited to, sales charges (loads), redemption fees, and exchange fees. You can find more information about the Fund's expenses, including annual expense ratios for the past five years, 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 SERIES FUNDS SEMI-ANNUAL REPORT | 3 ABOUT SHAREHOLDERS' FUND EXPENSES (continued) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ---------------------------------------------------------------------------------------------------- TABLE 1. BASED ON ACTUAL FUND RETURN BANKING FUND Investor Class 1.31% $1,000.00 $1,002.90 $ 6.58 Advisor Class 1.81% 1,000.00 1,002.10 9.08 A-Class 1.57% 1,000.00 1,004.10 7.89 C-Class 2.36% 1,000.00 1,000.00 11.83 BASIC MATERIALS FUND Investor Class 1.31% 1,000.00 970.00 6.47 Advisor Class 1.82% 1,000.00 967.40 8.98 A-Class 1.58% 1,000.00 968.80 7.80 C-Class 2.36% 1,000.00 965.00 11.63 BIOTECHNOLOGY FUND Investor Class 1.32% 1,000.00 1,230.20 7.38 Advisor Class 1.85% 1,000.00 1,227.70 10.33 A-Class 1.59% 1,000.00 1,228.60 8.88 C-Class 2.34% 1,000.00 1,224.70 13.05 COMMODITIES FUND A-Class 1.56% 1,000.00 1,268.80 8.87 C-Class 2.30% 1,000.00 1,264.80 13.06 H-Class 1.54% 1,000.00 1,268.40 8.76 CONSUMER PRODUCTS FUND Investor Class 1.29% 1,000.00 1,015.40 6.52 Advisor Class 1.80% 1,000.00 1,010.80 9.07 A-Class 1.58% 1,000.00 1,012.10 7.97 C-Class 2.31% 1,000.00 1,004.40 11.61 ELECTRONICS FUND Investor Class 1.31% 1,000.00 1,127.10 6.99 Advisor Class 1.83% 1,000.00 1,123.60 9.74 A-Class 1.58% 1,000.00 1,125.50 8.42 C-Class 2.34% 1,000.00 1,121.20 12.44 ENERGY FUND Investor Class 1.32% 1,000.00 1,264.60 7.49 Advisor Class 1.83% 1,000.00 1,261.30 10.37 A-Class 1.59% 1,000.00 1,262.60 9.02 C-Class 2.34% 1,000.00 1,258.00 13.25 ENERGY SERVICES FUND Investor Class 1.33% 1,000.00 1,287.50 7.63 Advisor Class 1.83% 1,000.00 1,284.10 10.48 A-Class 1.62% 1,000.00 1,286.50 9.29 C-Class 2.35% 1,000.00 1,281.20 13.44 FINANCIAL SERVICES FUND Investor Class 1.32% 1,000.00 1,062.30 6.82 Advisor Class 1.81% 1,000.00 1,059.30 9.34 A-Class 1.58% 1,000.00 1,061.10 8.16 C-Class 2.32% 1,000.00 1,056.30 11.96 4 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES (continued) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ---------------------------------------------------------------------------------------------------- HEALTH CARE FUND Investor Class 1.31% $1,000.00 $1,089.70 $ 6.86 Advisor Class 1.83% 1,000.00 1,087.30 9.58 A-Class 1.59% 1,000.00 1,088.20 8.32 C-Class 2.33% 1,000.00 1,082.90 12.17 INTERNET FUND Investor Class 1.29% 1,000.00 1,121.10 6.86 Advisor Class 1.81% 1,000.00 1,118.40 9.61 A-Class 1.58% 1,000.00 1,119.60 8.40 C-Class 2.32% 1,000.00 1,115.60 12.30 LEISURE FUND Investor Class 1.30% 1,000.00 937.70 6.31 Advisor Class 1.79% 1,000.00 934.90 8.68 A-Class 1.56% 1,000.00 936.30 7.57 C-Class 2.30% 1,000.00 932.60 11.14 PRECIOUS METALS FUND Investor Class 1.22% 1,000.00 1,161.60 6.61 Advisor Class 1.72% 1,000.00 1,158.90 9.31 A-Class 1.53% 1,000.00 1,160.40 8.29 C-Class 2.23% 1,000.00 1,155.70 12.05 REAL ESTATE FUND A-Class 1.56% 1,000.00 1,153.40 8.42 C-Class 2.35% 1,000.00 1,149.10 12.66 H-Class 1.56% 1,000.00 1,153.70 8.42 RETAILING FUND Investor Class 1.31% 1,000.00 978.90 6.50 Advisor Class 1.81% 1,000.00 976.60 8.97 A-Class 1.61% 1,000.00 976.70 7.98 C-Class 2.32% 1,000.00 974.60 11.48 TECHNOLOGY FUND Investor Class 1.31% 1,000.00 1,097.60 6.89 Advisor Class 1.83% 1,000.00 1,094.40 9.61 A-Class 1.94% 1,000.00 1,094.30 10.19 C-Class 2.34% 1,000.00 1,090.90 12.27 TELECOMMUNICATIONS FUND Investor Class 1.30% 1,000.00 1,133.30 6.95 Advisor Class 1.82% 1,000.00 1,132.60 9.73 A-Class 1.63% 1,000.00 1,132.40 8.71 C-Class 2.37% 1,000.00 1,128.20 12.64 TRANSPORTATION FUND Investor Class 1.32% 1,000.00 1,013.40 6.66 Advisor Class 1.81% 1,000.00 1,010.30 9.12 A-Class 1.60% 1,000.00 1,012.20 8.07 C-Class 2.32% 1,000.00 1,008.30 11.68 UTILITIES FUND Investor Class 1.32% 1,000.00 1,153.70 7.13 Advisor Class 1.83% 1,000.00 1,151.10 9.87 A-Class 1.61% 1,000.00 1,152.20 8.69 C-Class 2.33% 1,000.00 1,147.80 12.55 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 5 ABOUT SHAREHOLDERS' FUND EXPENSES (continued) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ---------------------------------------------------------------------------------------------------- TABLE 2. BASED ON HYPOTHETICAL 5% RETURN BANKING FUND Investor Class 1.31% $1,000.00 $1,018.35 $ 6.65 Advisor Class 1.81% 1,000.00 1,015.81 9.19 A-Class 1.57% 1,000.00 1,017.03 7.97 C-Class 2.36% 1,000.00 1,013.02 11.98 BASIC MATERIALS FUND Investor Class 1.31% 1,000.00 1,018.35 6.65 Advisor Class 1.82% 1,000.00 1,015.76 9.24 A-Class 1.58% 1,000.00 1,016.98 8.02 C-Class 2.36% 1,000.00 1,013.02 11.98 BIOTECHNOLOGY FUND Investor Class 1.32% 1,000.00 1,018.30 6.70 Advisor Class 1.85% 1,000.00 1,015.61 9.39 A-Class 1.59% 1,000.00 1,016.93 8.07 C-Class 2.34% 1,000.00 1,013.12 11.88 COMMODITIES FUND A-Class 1.56% 1,000.00 1,017.08 7.92 C-Class 2.30% 1,000.00 1,013.32 11.68 H-Class 1.54% 1,000.00 1,017.18 7.82 CONSUMER PRODUCTS FUND Investor Class 1.29% 1,000.00 1,018.45 6.55 Advisor Class 1.80% 1,000.00 1,015.86 9.14 A-Class 1.58% 1,000.00 1,016.98 8.02 C-Class 2.31% 1,000.00 1,013.27 11.73 ELECTRONICS FUND Investor Class 1.31% 1,000.00 1,018.35 6.65 Advisor Class 1.83% 1,000.00 1,015.71 9.29 A-Class 1.58% 1,000.00 1,016.98 8.02 C-Class 2.34% 1,000.00 1,013.12 11.88 ENERGY FUND Investor Class 1.32% 1,000.00 1,018.30 6.70 Advisor Class 1.83% 1,000.00 1,015.71 9.29 A-Class 1.59% 1,000.00 1,016.93 8.07 C-Class 2.34% 1,000.00 1,013.12 11.88 ENERGY SERVICES FUND Investor Class 1.33% 1,000.00 1,018.25 6.75 Advisor Class 1.83% 1,000.00 1,015.71 9.29 A-Class 1.62% 1,000.00 1,016.78 8.22 C-Class 2.35% 1,000.00 1,013.07 11.93 FINANCIAL SERVICES FUND Investor Class 1.32% 1,000.00 1,018.30 6.70 Advisor Class 1.81% 1,000.00 1,015.81 9.19 A-Class 1.58% 1,000.00 1,016.98 8.02 C-Class 2.32% 1,000.00 1,013.22 11.78 HEALTH CARE FUND Investor Class 1.31% 1,000.00 1,018.35 6.65 Advisor Class 1.83% 1,000.00 1,015.71 9.29 A-Class 1.59% 1,000.00 1,016.93 8.07 C-Class 2.33% 1,000.00 1,013.17 11.83 6 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES (concluded) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ---------------------------------------------------------------------------------------------------- INTERNET FUND Investor Class 1.29% $1,000.00 $1,018.45 $ 6.55 Advisor Class 1.81% 1,000.00 1,015.81 9.19 A-Class 1.58% 1,000.00 1,016.98 8.02 C-Class 2.32% 1,000.00 1,013.22 11.78 LEISURE FUND Investor Class 1.30% 1,000.00 1,018.40 6.60 Advisor Class 1.79% 1,000.00 1,015.91 9.09 A-Class 1.56% 1,000.00 1,017.08 7.92 C-Class 2.30% 1,000.00 1,013.32 11.68 PRECIOUS METALS FUND Investor Class 1.22% 1,000.00 1,018.81 6.19 Advisor Class 1.72% 1,000.00 1,016.27 8.73 A-Class 1.53% 1,000.00 1,017.23 7.77 C-Class 2.23% 1,000.00 1,013.68 11.32 REAL ESTATE FUND A-Class 1.56% 1,000.00 1,017.08 7.92 C-Class 2.35% 1,000.00 1,013.07 11.93 H-Class 1.56% 1,000.00 1,017.08 7.92 RETAILING FUND Investor Class 1.31% 1,000.00 1,018.35 6.65 Advisor Class 1.81% 1,000.00 1,015.81 9.19 A-Class 1.61% 1,000.00 1,016.83 8.17 C-Class 2.32% 1,000.00 1,013.22 11.78 TECHNOLOGY FUND Investor Class 1.31% 1,000.00 1,018.35 6.65 Advisor Class 1.83% 1,000.00 1,015.71 9.29 A-Class 1.94% 1,000.00 1,015.15 9.85 C-Class 2.34% 1,000.00 1,013.12 11.88 TELECOMMUNICATIONS FUND Investor Class 1.30% 1,000.00 1,018.40 6.60 Advisor Class 1.82% 1,000.00 1,015.76 9.24 A-Class 1.63% 1,000.00 1,016.73 8.27 C-Class 2.37% 1,000.00 1,012.97 12.03 TRANSPORTATION FUND Investor Class 1.32% 1,000.00 1,018.30 6.70 Advisor Class 1.81% 1,000.00 1,015.81 9.19 A-Class 1.60% 1,000.00 1,016.88 8.12 C-Class 2.32% 1,000.00 1,013.22 11.78 UTILITIES FUND Investor Class 1.32% 1,000.00 1,018.30 6.70 Advisor Class 1.83% 1,000.00 1,015.71 9.29 A-Class 1.61% 1,000.00 1,016.13 8.17 C-Class 2.33% 1,000.00 1,013.17 11.83 * Expenses are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. + ANNUALIZED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 7 FUND PROFILES - -------------------------------------------------------------------------------- BANKING FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the banking sector, including commercial banks (and their holding companies) and saving-and-loan institutions. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] BANKING FUND COMMERCIAL BANKS 68% THRIFTS & MORTGAGE FINANCE 28% OTHER 4% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 1, 1998 A-Class September 1, 2004 C-Class March 30, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Wells Fargo & Co. 5.0% Wachovia Corp. 4.5% J.P. Morgan Chase & Co. 4.4% Bank of America Corp. 4.1% U.S. Bancorp 3.9% Washington Mutual, Inc. 3.3% SunTrust Banks, Inc. 3.0% National City Corp. 2.8% Golden West Financial Corp. 2.6% KeyCorp. 2.5% - -------------------------------------------------------------------------------- Top Ten Total 36.1% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. BASIC MATERIALS FUND OBJECTIVE: Seeks 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. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] BASIC MATERIALS FUND CHEMICALS 44% METALS & MINING 26% CONTAINERS & PACKAGING 12% PAPER & FOREST PRODUCTS 11% CONSTRUCTION MATERIALS 7% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 14, 1998 A-Class September 1, 2004 C-Class May 3, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Dow Chemical Co. 3.7% El Du Pont de Nemours & Co. 3.3% Phelps Dodge Corp. 3.3% Georgia-Pacific Corp. 3.2% Praxair, Inc. 2.9% Freeport-McMoRan Copper & Gold, Inc. -- Class B 2.4% Monsanto Co. 2.4% Air Products & Chemicals, Inc. 2.3% Rohm & Haas Co. 2.1% Nucor Corp. 2.0% - -------------------------------------------------------------------------------- Top Ten Total 27.6% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 8 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (continued) - -------------------------------------------------------------------------------- BIOTECHNOLOGY FUND OBJECTIVE: Seeks 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. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] BIOTECHNOLOGY FUND BIOTECHNOLOGY 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 1, 1998 A-Class September 1, 2004 C-Class March 30, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Amgen, Inc. 13.3% Genentech, Inc. 11.4% Gilead Sciences, Inc. 6.4% Genzyme Corp. 5.7% Medimmune, Inc. 4.7% Chiron Corp. 3.6% Biogen Idec, Inc. 3.5% Applera Corp. - Applied Biosystems Group 3.4% Techne Corp. 2.9% Invitrogen Corp. 2.9% - -------------------------------------------------------------------------------- Top Ten Total 57.8% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. COMMODITIES FUND OBJECTIVE: Seeks long-term capital appreciation through an investment in commodity-linked instruments and seeks 100% (but at all times at least 80%) exposure to the performance of the commodities market. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A BAR GRAPH IN THE PRINTED MATERIAL.] COMMODITIES FUND Equity Index Swap Agreements 85.7% Futures Contracts 10.0% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- A-Class May 25, 2005 C-Class May 25, 2005 H-Class May 25, 2005 The Fund invests principally in derivative instruments; such as equity index swap agreements, futures contracts, and options on index futures. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 9 FUND PROFILES (continued) - -------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in manufacturing finished goods and services both domestically and internationally. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] CONSUMER PRODUCTS FUND FOOD PRODUCTS 34% BEVERAGES 20% HOUSEHOLD PRODUCTS 15% FOOD & STAPLES RETAILING 14% TOBACCO 10% PERSONAL PRODUCTS 7% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class July 6, 1998 Advisor Class August 17, 1998 A-Class September 1, 2004 C-Class July 24, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Procter & Gamble Co. 7.2% PepsiCo, Inc. 5.4% Altria Group, Inc. 5.1% Coca-Cola Co. 3.9% Archer-Daniels-Midland Co. 3.2% General Mills, Inc. 3.0% Sysco Corp. 2.9% WM Wrigley Jr Co. 2.8% Gillette Co. 2.8% Kroger Co. 2.8% - -------------------------------------------------------------------------------- Top Ten Total 39.1% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. ELECTRONICS FUND OBJECTIVE: Seeks 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. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] ELECTRONICS FUND SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 2, 1998 A-Class September 1, 2004 C-Class March 26, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Intel Corp. 10.5% Texas Instruments, Inc. 6.9% Applied Materials, Inc. 5.8% KLA-Tencor Corp. 3.6% Broadcom Corp. -- Class A 3.4% Advanced Micro Devices, Inc. 3.1% Maxim Integrated Products, Inc. 3.0% Novellus Systems, Inc. 3.0% Linear Technology Corp. 2.8% National Semiconductor Corp. 2.8% - -------------------------------------------------------------------------------- Top Ten Total 44.9% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 10 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (continued) - -------------------------------------------------------------------------------- ENERGY FUND OBJECTIVE: Seeks 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. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] ENERGY FUND OIL, GAS & CONSUMABLE FUELS 72% ENERGY EQUIPMENT & SERVICES 28% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 21, 1998 Advisor Class May 5, 1998 A-Class September 1, 2004 C-Class April 19, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Exxon Mobil Corp. 6.4% BP PLC -- SP ADR 6.0% Royal Dutch Shell PLC -- SP ADR 4.7% Total SA -- SP ADR 4.2% ConocoPhillips 3.6% Chevron Corp. 2.9% Schlumberger Ltd. 2.7% Occidental Petroleum Corp. 2.6% Repsol YPF SA -- SP ADR 2.3% Halliburton Co. 2.1% - -------------------------------------------------------------------------------- Top Ten Total 37.5% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. ENERGY SERVICES FUND OBJECTIVE: Seeks 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. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] ENERGY SERVICES FUND ENERGY EQUIPMENT & SERVICES 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 2, 1998 A-Class September 1, 2004 C-Class March 30, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Schlumberger Ltd. 8.8% Halliburton Co. 8.0% Baker Hughes, Inc. 5.8% Transocean, Inc. 5.7% Nabors Industries Ltd. 4.6% National-Oilwell Varco, Inc. 4.4% Noble Corp. 3.5% Patterson-UTI Energy, Inc. 3.5% Diamond Offshore Drilling, Inc. 3.5% BJ Services Co. 3.4% - -------------------------------------------------------------------------------- Top Ten Total 51.2% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 11 FUND PROFILES (continued) - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the financial services sector. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] FINANCIAL SERVICES FUND INSURANCE 22% COMMERCIAL BANKS 22% REAL ESTATE 18% THRIFTS & MORTGAGE FINANCE 11% DIVERSIFIED FINANCIAL SERVICES 11% CONSUMER FINANCE 9% CAPITAL MARKETS 7% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 2, 1998 Advisor Class April 6, 1998 A-Class September 1, 2004 C-Class April 19, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Citigroup, Inc. 3.2% J.P. Morgan Chase & Co. 2.5% American Express Co. 2.3% Wachovia Corp. 2.2% St. Paul Travelers Cos., Inc. 1.9% Washington Mutual, Inc. 1.8% Hartford Financial Services Group, Inc. 1.7% Chubb Corp. 1.6% Allstate Corp. 1.6% National City Corp. 1.6% - -------------------------------------------------------------------------------- Top Ten Total 20.4% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. HEALTH CARE FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the health care industry. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] HEALTH CARE FUND PHARMACEUTICALS 32% HEALTH CARE PROVIDERS & SERVICES 29% HEALTH CARE EQUIPMENT & SUPPLIES 23% BIOTECHNOLOGY 16% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 17, 1998 Advisor Class May 11, 1998 A-Class September 1, 2004 C-Class March 30, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Johnson & Johnson, Inc. 7.0% Pfizer, Inc. 6.8% Amgen, Inc. 5.0% Genentech, Inc. 4.5% UnitedHealth Group, Inc. 4.1% Abbott Laboratories 3.6% WellPoint, Inc. 3.2% Schering-Plough Corp. 2.6% Aetna, Inc. 2.5% Baxter International, Inc. 2.4% - -------------------------------------------------------------------------------- Top Ten Total 41.7% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 12 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (continued) - -------------------------------------------------------------------------------- INTERNET FUND OBJECTIVE: Seeks capital appreciation by investing in companies that provide products or services designed for or related to the Internet. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] INTERNET FUND COMMUNICATIONS EQUIPMENT 27% INTERNET SOFTWARE & SERVICES 23% SOFTWARE 18% INTERNET & CATALOG RETAIL 13% MEDIA 6% OTHER 13% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 6, 2000 Advisor Class April 6, 2000 A-Class September 1, 2004 C-Class April 19, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Cisco Systems, Inc. 9.0% Qualcomm, Inc. 6.7% Google, Inc. -- Class A 6.6% Time Warner, Inc. 6.4% Yahoo!, Inc. 6.1% eBay, Inc. 5.5% Broadcom Corp. -- Class A 3.9% Juniper Networks, Inc. 3.2% Intuit, Inc. 3.1% McAfee, Inc. 2.9% - -------------------------------------------------------------------------------- Top Ten Total 53.4% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. LEISURE FUND OBJECTIVE: Seeks capital appreciation by investing in companies in the leisure and entertainment businesses. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] LEISURE FUND HOTELS, RESTAURANTS & LEISURE 63% MEDIA 25% LEISURE EQUIPMENT & PRODUCTS 12% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class June 3, 1998 A-Class September 1, 2004 C-Class May 3, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- The Walt Disney Co. 5.5% Time Warner, Inc. 5.2% News Corp. -- Class A 4.8% Carnival Corp. 3.9% Viacom, Inc. -- Class B 3.6% McDonald's Corp. 3.6% MGM Mirage, Inc. 3.5% Yum! Brands, Inc. 3.4% Marriott International. Inc. -- Class A 3.4% Starbucks Corp. 3.3% - -------------------------------------------------------------------------------- Top Ten Total 40.2% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 13 FUND PROFILES (continued) - -------------------------------------------------------------------------------- PRECIOUS METALS FUND OBJECTIVE: 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. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] PRECIOUS METALS FUND METALS & MINING 100% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class December 1, 1993 Advisor Class August 1, 2003 A-Class September 1, 2004 C-Class April 27, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Newmont Mining Corp. 13.7% Freeport-McMoRan Copper & Gold, Inc. -- Class B 9.8% Barrick Gold Corp. 7.5% Goldcorp, Inc. 6.1% Placer Dome, Inc. 5.7% AngloGold Ashanti Ltd. -- SP ADR 5.2% Gold Fields Ltd. -- SP ADR 4.2% Glamis Gold Ltd. 3.7% Harmony Gold Mining Co. Ltd. -- SP ADR 3.5% Coeur d'Alene Mines Corp. 3.5% - -------------------------------------------------------------------------------- Top Ten Total 62.9% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 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"). INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] REAL ESTATE FUND REAL ESTATE 100% "Industry 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. 2.5% Equity Office Properties Trust 2.2% Equity Residential 2.1% General Growth Properties, Inc. 2.1% Vornado Realty Trust 2.1% ProLogis 1.9% Public Storage, Inc. 1.8% KIMCO Realty Corp. 1.7% Archstone-Smith Trust 1.7% Boston Properties, Inc. 1.7% - -------------------------------------------------------------------------------- Top Ten Total 19.8% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 14 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (continued) - -------------------------------------------------------------------------------- RETAILING FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in merchandising finished goods and services, including department stores, restaurant franchises, mail-order operations and other companies involved in selling products to consumers. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] RETAILING FUND SPECIALTY RETAIL 56% MULTILINE RETAIL 19% FOOD & STAPLES RETAILING 14% INTERNET & CATALOG RETAIL 7% OTHER 4% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 21, 1998 A-Class September 1, 2004 C-Class May 9, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 7.0% Home Depot, Inc. 5.2% eBay, Inc. 3.8% Federated Department Stores, Inc. 3.7% Nordstrom, Inc. 3.5% Lowe's Cos., Inc. 3.3% Target Corp. 3.0% Staples, Inc. 2.9% Costco Wholesale Corp. 2.5% Walgreen Co. 2.3% - -------------------------------------------------------------------------------- Top Ten Total 37.2% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. TECHNOLOGY FUND OBJECTIVE: Seeks capital appreciation by investing in companies that are involved in the technology sector, including computer software and service companies, semiconductor manufacturers, networking and telecommunications equipment manufacturers, PC hardware and peripherals companies. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] TECHNOLOGY FUND SOFTWARE 24% SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 23% COMPUTERS & PERIPHERALS 19% COMMUNICATIONS EQUIPMENT 16% IT SERVICES 10% INTERNET SOFTWARE & SERVICES 6% OTHER 2% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 14, 1998 Advisor Class April 29, 1998 A-Class September 1, 2004 C-Class April 18, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Microsoft Corp. 5.8% Intel Corp. 5.1% Dell, Inc. 4.1% Cisco Systems, Inc. 4.0% International Business Machines Corp. 3.7% Hewlett-Packard Co. 2.8% Yahoo!, Inc. 2.6% Applied Materials, Inc. 2.6% Texas Instruments, Inc. 2.6% Qualcomm, Inc. 2.4% - -------------------------------------------------------------------------------- Top Ten Total 35.7% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 15 FUND PROFILES (continued) - -------------------------------------------------------------------------------- TELECOMMUNICATIONS FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in the development, manufacture or sale of communications services or communications equipment. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] TELECOMMUNICATIONS FUND COMMUNICATION EQUIPMENT 55% DIVERSIFIED TELECOMMUNICATION SERVICES 23% WIRELESS TELECOMMUNICATION SERVICES 22% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 1, 1998 Advisor Class April 1, 1998 A-Class September 1, 2004 C-Class April 18, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Cisco Systems, Inc. 6.9% Vodafone Group PLC -- SP ADR 6.7% Qualcomm, Inc. 5.1% Nokia OYJ -- SP ADR 4.7% Motorola, Inc. 4.5% Sprint Nextel Corp. 3.8% Telefonaktiebolaget LM Ericsson -- SP ADR 3.8% Alltel Corp. 3.7% Verizon Communications, Inc. 3.6% SBC Communications, Inc. 3.3% - -------------------------------------------------------------------------------- Top Ten Total 46.1% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. TRANSPORTATION FUND OBJECTIVE: Seeks capital appreciation by investing in companies engaged in providing transportation services or companies engaged in the design, manufacture, distribution or sale of transportation equipment. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] TRANSPORTATION FUND ROAD & RAIL 50% AIR FREIGHT & LOGISTICS 31% AIRLINES 14% OTHER 5% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 2, 1998 Advisor Class June 9, 1998 A-Class September 1, 2004 C-Class May 14, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- United Parcel Service, Inc. -- Class B 9.7% Burlington Northern Santa Fe Corp. 8.8% Norfolk Southern Corp. 8.4% FedEx Corp. 6.6% Union Pacific Corp. 6.1% C.H. Robinson Worldwide, Inc. 5.1% CSX Corp. 4.5% CNF, Inc. 4.2% Southwest Airlines Co. 3.6% Landstar System, Inc. 3.4% - -------------------------------------------------------------------------------- Top Ten Total 60.4% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. 16 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES (concluded) - -------------------------------------------------------------------------------- UTILITIES FUND OBJECTIVE: Seeks capital appreciation by investing in companies that operate public utilities. INDUSTRY DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL.] UTILITIES FUND ELECTRIC UTILITIES 42% MULTI-UTILITIES 39% GAS UTILITIES 17% OTHER 2% "Industry Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- Investor Class April 3, 2000 Advisor Class April 3, 2000 A-Class September 1, 2004 C-Class April 27, 2001 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- TXU Corp. 3.3% Exelon Corp. 3.2% American Electric Power Co., Inc. 3.0% Southern Co. 3.0% Duke Energy Corp. 3.0% Dominion Resources, Inc./VA 2.9% Edison International 2.5% FirstEnergy Corp. 2.4% Entergy Corp. 2.3% FPL Group, Inc. 2.3% - -------------------------------------------------------------------------------- Top Ten Total 27.9% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 17 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- BANKING FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.9% Wells Fargo & Co. 11,917 $ 697,979 Wachovia Corp.+ 13,188 627,617 J.P. Morgan Chase & Co. 18,012 611,147 Bank of America Corp.+ 13,581 571,760 U.S. Bancorp+ 19,344 543,180 Washington Mutual, Inc.+ 11,770 461,619 SunTrust Banks, Inc. 6,044 419,756 National City Corp. 11,764 393,388 Golden West Financial Corp.+ 6,225 369,703 KeyCorp+ 10,725 345,881 North Fork Bancorporation, Inc. 12,785 326,017 Marshall & Ilsley Corp. 7,400 321,974 AmSouth Bancorp+ 12,100 305,646 Sovereign Bancorp, Inc.+ 13,360 294,454 Zions Bancorporation+ 3,985 283,772 Radian Group, Inc.+ 5,244 278,456 Hibernia Corp. -- Class A 8,640 259,546 First Bancorp Puerto Rico 15,250 258,030 PMI Group, Inc. 6,440 256,763 New York Community Bancorp, Inc.+ 15,160 248,624 Associated Banc-Corp. 7,898 240,731 Astoria Financial Corp. 8,848 233,764 Bank of Hawaii Corp. 4,710 231,826 IndyMac Bancorp, Inc.+ 5,720 226,398 SVB Financial Group*+ 4,648 226,079 M&T Bank Corp. 1,988 210,151 Westcorp 3,564 209,920 Fannie Mae 4,609 206,575 Fremont General Corp. 9,440 206,075 Central Pacific Financial Corp. Co. 5,760 202,637 Downey Financial Corp.+ 3,322 202,310 Whitney Holding Corp. 7,440 201,178 Freddie Mac 3,334 188,238 Gold Banc Corp., Inc. 12,590 187,591 Anchor BanCorp Wisconsin, Inc. 6,291 185,459 FirstFed Financial Corp.*+ 3,360 180,802 Sterling Financial Corp./WA 7,641 172,305 Comerica, Inc. 2,921 172,047 Banco Bradesco SA -- SP ADR 3,395 166,083 Kookmin Bank -- SP ADR 2,760 163,530 Uniao de Bancos Brasileiros SA 3,064 161,166 IBERIABANK Corp. 3,000 159,450 Banco Itau Holding Financeira SA -- SP ADR+ 1,260 149,512 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Taylor Capital Group, Inc. 3,720 $ 140,690 Barclays PLC -- SP ADR 3,419 139,427 Corus Bankshares, Inc. 2,364 129,618 Franklin Bank Corp./Houston TX* 7,750 125,162 BB&T Corp.+ 3,059 119,454 Center Financial Corp. 4,920 115,620 Fifth Third Bancorp+ 3,092 113,569 ICICI Bank Ltd. -- SP ADR 3,910 110,457 First Horizon National Corp. 2,830 102,870 Countrywide Financial Corp.+ 2,861 94,356 PNC Financial Services Group, Inc. 1,586 92,020 First Republic Bank 2,290 80,677 Texas Capital Bancshares, Inc.* 3,290 69,583 Regions Financial Corp.+ 2,191 68,184 UnionBanCal Corp. 576 40,159 Synovus Financial Corp. 1,020 28,274 International Bancshares Corp. 720 21,384 Hudson City Bancorp, Inc. 1,490 17,731 Popular, Inc.+ 630 15,259 W Holding Co., Inc. 1,505 14,388 Commerce Bancorp, Inc./NJ+ 430 13,197 Independent Bank Corp./MI 1 17 ------------ TOTAL COMMON STOCKS (Cost $13,121,651) 14,011,235 ------------ FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 58,192 58,192 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $58,192) 58,192 ------------ SECURITIES LENDING COLLATERAL 10.7% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 1,499,704 1,499,704 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $1,499,704) 1,499,704 ------------ TOTAL INVESTMENTS 111.0% (Cost $14,679,547) $ 15,569,131 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (11.0)% $ (1,539,994) ============ NET ASSETS - 100.0% $ 14,029,137 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 18 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- BASIC MATERIALS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.3% Dow Chemical Co. 32,002 $ 1,333,523 EI Du Pont de Nemours & Co. 30,104 1,179,174 Phelps Dodge Corp. 9,023 1,172,358 Georgia-Pacific Corp. 34,080 1,160,765 Praxair, Inc.+ 21,918 1,050,530 Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 17,856 867,623 Monsanto Co.+ 13,744 862,436 Air Products & Chemicals, Inc. 14,870 819,932 Rohm & Haas Co. 18,584 764,360 Nucor Corp.+ 12,383 730,473 Hercules, Inc.* 59,630 728,679 Southern Peru Copper Corp. 11,985 670,681 Lyondell Chemical Co.+ 23,221 664,585 Packaging Corporation of America 33,825 656,543 Eastman Chemical Co. 13,521 635,081 Lubrizol Corp. 14,570 631,318 Newmont Mining Corp.+ 13,379 631,087 PPG Industries, Inc.+ 10,341 612,084 Weyerhaeuser Co.+ 8,856 608,850 International Paper Co.+ 20,388 607,562 Vulcan Materials Co.+ 7,454 553,161 Martin Marietta Materials, Inc. 6,725 527,644 Temple-Inland, Inc. 12,615 515,323 Sigma-Aldrich Corp. 8,035 514,722 Pactiv Corp.* 28,600 501,072 Airgas, Inc. 16,500 488,895 Deltic Timber Corp. 10,108 465,473 Florida Rock Industries, Inc.+ 7,200 461,448 Allegheny Technologies, Inc.+ 14,680 454,786 Sealed Air Corp.*+ 9,105 432,123 Agrium, Inc.+ 19,425 426,767 United States Steel Corp.+ 10,042 425,279 Crown Holdings, Inc.* 25,777 410,885 Alcoa, Inc. 16,539 403,882 FMC Corp.* 7,044 403,058 Mosaic Co.* 24,485 392,250 Headwaters, Inc.*+ 10,285 384,659 Olin Corp.+ 19,865 377,236 Commercial Metals Co.+ 10,715 361,524 Cleveland-Cliffs, Inc.+ 4,100 357,151 Quanex Corp. 5,230 346,331 Lafarge North America, Inc. 5,075 343,121 Huntsman Corp.* 16,560 323,748 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Ashland, Inc. 5,770 $ 318,735 Reliance Steel & Aluminum Co.+ 5,835 308,847 Albemarle Corp. 7,973 300,582 Carpenter Technology Corp. 5,095 298,618 POSCO -- SP ADR+ 5,170 292,415 Smurfit-Stone Container Corp.* 27,695 286,920 Owens-Illinois, Inc.* 13,598 280,391 Potlatch Corp.+ 5,210 271,545 AptarGroup, Inc. 5,426 270,269 Longview Fibre Co. 13,705 267,110 Ecolab, Inc. 8,286 264,572 Material Sciences Corp.* 17,478 263,393 Aleris International, Inc.* 8,765 240,599 Buckeye Technologies, Inc.* 28,016 227,490 Steel Dynamics, Inc.+ 6,440 218,702 A.M. Castle & Co.* 12,131 212,293 Ferro Corp. 11,535 211,321 Goldcorp, Inc.+ 10,385 208,115 Century Aluminum Co.*+ 9,065 203,781 RTI International Metals, Inc.* 5,047 198,599 Ball Corp. 5,374 197,441 H.B. Fuller Co. 6,170 191,764 Chaparral Steel Co.* 7,435 187,511 Chemtura Corp. 14,748 183,170 Bowater, Inc.+ 6,300 178,101 Texas Industries, Inc. 3,225 175,440 Rock-Tenn Co. -- Class A 11,115 167,837 Terra Industries, Inc.* 24,865 165,352 PolyOne Corp.* 26,820 162,529 Chesapeake Corp. 8,050 148,040 Methanex Corp.+ 9,865 146,693 Aracruz Celulose SA 3,510 142,436 MacDermid, Inc. 5,260 138,128 Cambrex Corp. 7,250 137,460 International Flavors & Fragrances, Inc. 3,720 132,581 Glatfelter 8,970 126,387 BASF AG -- SP ADR 1,660 125,164 Scotts Miracle-Gro Co. -- Class A 1,310 115,188 Nalco Holding Co.* 6,796 114,649 Myers Industries, Inc. 9,660 112,442 Caraustar Industries, Inc.* 10,130 111,227 Schweitzer-Mauduit International, Inc. 4,975 111,042 Wellman, Inc. 15,455 97,830 THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 19 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- BASIC MATERIALS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Valhi, Inc. 5,075 $ 91,249 Companhia Vale do Rio Doce -- SP ADR 1,980 86,843 Pioneer Cos., Inc.* 3,425 82,406 Georgia Gulf Corp. 3,301 79,488 Mittal Steel NV Co. -- Class A 2,760 79,488 Omnova Solutions, Inc.* 17,348 75,811 Votorantim Celulose e Papel SA -- SP ADR 5,570 74,638 Penford Corp. 5,278 70,567 Steel Technologies, Inc. 2,640 68,455 IPSCO, Inc. 940 67,201 Cemex SA de CV -- SP ADR 1,162 60,773 Potash Corp. of Saskatchewan+ 620 57,858 Wausau Paper Corp. 4,615 57,734 Pope & Talbot, Inc. 3,925 40,074 ------------ TOTAL COMMON STOCKS (Cost $31,308,194) 35,763,476 ------------ FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.2% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 75,050 75,050 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $75,050) 75,050 ------------ SECURITIES LENDING COLLATERAL 11.2% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 4,044,558 4,044,558 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $4,044,558) 4,044,558 ------------ TOTAL INVESTMENTS 110.7% (Cost $35,427,802) $ 39,883,084 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (10.7)% $ (3,841,792) ============ NET ASSETS - 100.0% $ 36,041,292 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 20 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- BIOTECHNOLOGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.6% Amgen, Inc.*+ 273,297 $ 21,773,572 Genentech, Inc.* 221,467 18,649,736 Gilead Sciences, Inc.* 215,106 10,488,569 Genzyme Corp.* 129,475 9,275,589 Medimmune, Inc.* 227,950 7,670,517 Chiron Corp.* 134,626 5,872,386 Biogen Idec, Inc.* 144,848 5,718,599 Applera Corp. - Applied Biosystems Group 236,493 5,496,097 Techne Corp.*+ 84,069 4,790,252 Invitrogen Corp.*+ 62,823 4,726,174 Cephalon, Inc.*+ 95,782 4,446,200 Affymetrix, Inc.*+ 94,657 4,375,993 Celgene Corp.*+ 80,201 4,356,518 United Therapeutics Corp.*+ 61,990 4,326,902 Cubist Pharmaceuticals, Inc.*+ 173,587 3,739,064 Angiotech Pharmaceuticals, Inc.*+ 253,909 3,559,804 Crucell -- SP ADR* 106,548 2,856,552 Alkermes, Inc.*+ 170,011 2,856,185 Medarex, Inc.*+ 298,000 2,836,960 Eyetech Pharmaceuticals, Inc.*+ 145,711 2,616,970 Pharmion Corp.*+ 112,826 2,460,735 QLT, Inc.* 310,704 2,383,100 Myriad Genetics, Inc.* 101,874 2,226,966 Protein Design Labs, Inc.* 70,249 1,966,972 Encysive Pharmaceuticals, Inc.* 157,300 1,852,994 Neurocrine Biosciences, Inc.*+ 35,958 1,768,774 Millennium Pharmaceuticals, Inc.*+ 165,562 1,544,693 Amylin Pharmaceuticals, Inc.* 43,932 1,528,394 Charles River Laboratories International, Inc.*+ 34,104 1,487,616 ImClone Systems, Inc.* 45,745 1,438,680 CV Therapeutics, Inc.*+ 51,901 1,388,352 Vertex Pharmaceuticals, Inc.*+ 55,348 1,237,028 Telik, Inc.*+ 66,850 1,093,666 Human Genome Sciences, Inc.*+ 77,210 1,049,284 ICOS Corp.* 31,645 874,035 OSI Pharmaceuticals, Inc.* 23,990 701,468 Martek Biosciences Corp.*+ 16,178 568,333 Momenta Pharmaceuticals, Inc.*+ 17,600 479,600 Rigel Pharmaceuticals, Inc.* 18,000 427,860 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Geron Corp.*+ 39,700 $ 407,719 Illumina, Inc.* 31,173 399,326 StemCells, Inc.*+ 70,100 386,952 Keryx Biopharmaceuticals, Inc.*+ 24,300 382,968 Nektar Therapeutics*+ 22,200 376,290 Abgenix, Inc.* 27,900 353,772 Senomyx, Inc.* 20,500 349,115 Zymogenetics, Inc.* 20,450 337,425 Gen-Probe, Inc.* 6,758 334,183 Genitope Corp.*+ 47,700 331,038 Aastrom Biosciences, Inc.*+ 130,800 307,380 ViaCell, Inc.* 49,300 285,940 Northfield Laboratories, Inc.*+ 19,250 248,325 ID Biomedical Corp.* 7,756 233,068 Cell Therapeutics, Inc.*+ 72,075 206,135 Alexion Pharmaceuticals, Inc.* 6,218 172,114 Serologicals Corp.*+ 6,649 150,001 Nabi Biopharmeceuticals* 10,506 137,629 Albany Molecular Research, Inc.* 10,600 129,108 Dov Pharmaceutical, Inc.* 13 221 ------------- TOTAL COMMON STOCKS (Cost $106,527,368) 162,439,898 ------------- FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 847,671 847,671 ------------- TOTAL REPURCHASE AGREEMENTS (Cost $847,671) 847,671 ------------- SECURITIES LENDING COLLATERAL 15.1% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 24,705,453 24,705,453 ------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $24,705,453) 24,705,453 ------------- TOTAL INVESTMENTS 115.2% (Cost $132,080,492) $ 187,993,022 ============= LIABILITIES IN EXCESS OF OTHER ASSETS - (15.2)% $ (24,874,322) ============= NET ASSETS - 100.0% $ 163,118,700 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 21 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- COMMODITIES FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS 83.8% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $11,713,777 $11,713,777 3.24% due 10/03/05 8,921,448 8,921,448 ----------- TOTAL REPURCHASE AGREEMENTS (Cost $20,635,225) 20,635,225 ----------- TOTAL INVESTMENTS 83.8% (Cost $20,635,225) $20,635,225 =========== OTHER ASSETS IN EXCESS OF LIABILITIES - 16.2% $ 3,976,759 ----------- NET ASSETS - 100.0% $24,611,984 =========== - -------------------------------------------------------------------------------- UNREALIZED GAIN CONTRACTS (NOTE 1) - -------------------------------------------------------------------------------- FUTURES CONTRACTS PURCHASED October 2005 Goldman Sachs Commodity Index Futures Contracts (Aggregate Market Value of Contracts $2,467,500) 21 $ 54,622 =========== UNITS ----------- EQUITY INDEX SWAP AGREEMENT November 2005 Goldman Sachs Commodity Index Swap, Maturing 11/28/05* (Notional Market Value $21,103,844) 2,821 $ 821,551 =========== * PRICE RETURN BASED ON GOLDMAN SACHS COMMODITY INDEX+/- FINANCING AT A VARIABLE RATE. 22 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.2% Procter & Gamble Co.+ 29,347 $ 1,744,973 PepsiCo, Inc. 23,137 1,312,099 Altria Group, Inc. 16,854 1,242,308 Coca-Cola Co. 22,010 950,612 Archer-Daniels-Midland Co. 31,620 779,749 General Mills, Inc. 15,280 736,496 Sysco Corp. 22,128 694,155 WM Wrigley Jr Co. 9,530 685,016 Gillette Co. 11,696 680,707 Kroger Co.* 33,007 679,614 Reynolds American, Inc.+ 7,920 657,518 Campbell Soup Co. 21,071 626,862 Whole Foods Market, Inc.+ 4,450 598,302 Kimberly-Clark Corp. 9,960 592,919 Kraft Foods, Inc. -- Class A 18,725 572,798 Dean Foods Co.* 14,220 552,589 Coca-Cola Enterprises, Inc. 27,090 528,255 Hershey Co. 8,944 503,637 Constellation Brands, Inc. -- Class A*+ 18,715 486,590 McCormick & Co., Inc. 14,476 472,352 Pepsi Bottling Group, Inc.+ 15,770 450,233 Energizer Holdings, Inc.*+ 7,680 435,456 Anheuser-Busch Cos., Inc.+ 9,551 411,075 Loews Corp. - Carolina Group 10,330 409,378 7-Eleven, Inc.* 11,171 397,799 J.M. Smucker Co.+ 8,050 390,747 PepsiAmericas, Inc. 16,790 381,637 Colgate-Palmolive Co.+ 7,184 379,243 Pilgrim's Pride Corp. 10,130 368,732 Alberto-Culver Co. -- Class B+ 8,190 366,503 Church & Dwight Co., Inc. 9,140 337,632 Tootsie Roll Industries, Inc. 9,773 310,293 Lancaster Colony Corp. 6,477 278,511 Kellogg Co. 5,689 262,434 United Natural Foods, Inc.*+ 7,310 258,482 Supervalu, Inc. 7,340 228,421 UST, Inc.+ 5,200 217,672 Sara Lee Corp.+ 11,102 210,383 TreeHouse Foods, Inc.* 7,526 202,299 Hain Celestial Group, Inc.*+ 9,921 192,467 Nash Finch Co. 4,206 177,451 H.J. Heinz Co. 4,750 173,565 ConAgra Foods, Inc.+ 6,366 157,559 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Safeway, Inc.+ 6,009 $ 153,830 Avon Products, Inc. 5,538 149,526 Natures Sunshine Products, Inc. 6,307 146,575 J&J Snack Foods Corp. 1,774 102,537 Clorox Co.+ 1,802 100,083 Albertson's, Inc.+ 3,620 92,853 Estee Lauder Cos., Inc. -- Class A+ 2,496 86,936 Cia de Bebidas das Americas -- SP ADR 1,840 68,411 Cadbury Schweppes PLC -- SP ADR 1,560 63,539 USANA Health Sciences, Inc.* 1,320 62,964 Chiquita Brands International, Inc.+ 2,250 62,888 Playtex Products, Inc.* 5,650 62,150 Brown-Forman Corp. -- Class B 1,008 60,016 Hansen Natural Corp.*+ 1,250 58,850 Parlux Fragrances, Inc.*+ 1,960 57,114 Longs Drug Stores Corp. 1,295 55,543 Gold Kist, Inc.* 2,823 55,190 Bunge, Ltd.+ 1,018 53,567 Elizabeth Arden, Inc.* 2,400 51,792 Diageo PLC -- SP ADR+ 890 51,629 Tyson Foods, Inc. -- Class A 2,790 50,360 Chattem, Inc.* 1,400 49,700 Mannatech, Inc.+ 3,271 38,761 Molson Coors Brewing Co. -- Class B 440 28,164 Performance Food Group Co.* 880 27,773 Smithfield Foods, Inc.* 922 27,365 NBTY, Inc.* 1,140 26,790 Great Atlantic & Pacific Tea Co.* 940 26,658 Ralcorp Holdings, Inc. 620 25,990 Peet's Coffee & Tea, Inc.* 790 24,190 Nu Skin Enterprises, Inc. 1,267 24,136 Sanderson Farms, Inc. 620 23,039 Ruddick Corp. 970 22,359 Spartan Stores, Inc.* 1,950 20,085 Spectrum Brands, Inc.* 830 19,547 Central Garden and Pet Co.* 430 19,458 American Italian Pasta Co. -- Class A+ 1,140 12,152 ------------ TOTAL COMMON STOCKS (Cost $20,756,617) 24,158,043 ------------ THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 23 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 85,179 $ 85,179 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $85,179) 85,179 ------------ SECURITIES LENDING COLLATERAL 13.5% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 3,292,068 3,292,068 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $3,292,068) 3,292,068 ------------ TOTAL INVESTMENTS 113.1% (Cost $24,133,864) $ 27,535,290 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (13.1)% $ (3,182,206) ============ NET ASSETS - 100.0% $ 24,353,084 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 24 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- ELECTRONICS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.4% Intel Corp. 153,646 $ 3,787,374 Texas Instruments, Inc.+ 73,914 2,505,685 Applied Materials, Inc. 124,274 2,107,687 KLA-Tencor Corp.+ 26,949 1,314,033 Broadcom Corp. -- Class A* 26,335 1,235,375 Advanced Micro Devices, Inc.*+ 44,382 1,118,426 Maxim Integrated Products, Inc.+ 25,235 1,076,273 Novellus Systems, Inc.* 42,888 1,075,631 Linear Technology Corp.+ 26,743 1,005,269 National Semiconductor Corp.+ 37,927 997,480 Analog Devices, Inc.+ 25,925 962,854 Altera Corp.*+ 49,342 942,926 Lam Research Corp.*+ 29,517 899,383 Nvidia Corp.*+ 25,593 877,328 Microchip Technology, Inc. 28,203 849,474 MEMC Electronic Materials, Inc.*+ 35,332 805,216 Freescale Semiconductor, Inc. -- Class B* 33,837 797,876 LSI Logic Corp.*+ 66,133 651,410 Integrated Device Technology, Inc.*+ 59,646 640,598 Cymer, Inc.*+ 19,396 607,483 Intersil Corp. -- Class A+ 25,041 545,393 International Rectifier Corp.*+ 11,275 508,277 Xilinx, Inc. 17,876 497,847 Teradyne, Inc.*+ 29,003 478,549 Microsemi Corp.*+ 18,207 465,007 Agere Systems, Inc.* 43,603 453,907 Micron Technology, Inc.*+ 32,987 438,727 Cree, Inc.*+ 16,417 410,753 Varian Semiconductor Equipment Associates, Inc.*+ 9,686 410,396 DSP Group, Inc.* 14,758 378,690 Cypress Semiconductor Corp.*+ 24,614 370,441 ATMI, Inc.* 11,243 348,533 Standard Microsystems Corp.* 10,247 306,488 Silicon Laboratories, Inc.*+ 10,083 306,422 Semtech Corp.*+ 18,592 306,210 Triquint Semiconductor, Inc.* 83,504 293,934 Skyworks Solutions, Inc.*+ 40,533 284,542 Photronics, Inc.*+ 14,092 273,385 RF Micro Devices, Inc.* 46,545 262,979 Kopin Corp.* 36,888 256,372 Credence Systems Corp.*+ 31,515 251,490 Micrel, Inc.*+ 21,244 238,570 Supertex, Inc.* 7,897 236,831 Helix Technology Corp. 15,782 232,784 Cohu, Inc. 9,452 223,540 Power Integrations, Inc.* 10,120 220,110 Ultratech, Inc.* 13,747 214,316 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Advanced Energy Industries, Inc.* 19,478 $ 209,583 Veeco Instruments, Inc.* 11,357 182,166 Cabot Microelectronics Corp.*+ 5,570 163,647 Kulicke & Soffa Industries, Inc.* 22,404 162,429 Brooks Automation, Inc.*+ 11,497 153,255 Exar Corp.* 10,640 149,173 Pericom Semiconductor Corp.* 15,285 135,119 Atmel Corp.*+ 57,860 119,192 Axcelis Technologies, Inc.*+ 22,627 118,113 Applied Micro Circuits Corp.* 32,245 96,735 ESS Technologies, Inc.* 20,975 74,461 LTX Corp.* 17,329 73,128 Lattice Semiconductor Corp.*+ 12,986 55,580 Conexant Systems, Inc.* 22,165 39,675 Marvell Technology Group Ltd.*+ 860 39,655 MIPS Technology, Inc.* 5,560 37,975 Netlogic Microsystems, Inc.* 1,740 37,567 Rudolph Technologies, Inc.*+ 2,780 37,447 Entegris, Inc.*+ 3,230 36,499 IXYS Corp.* 3,450 36,432 Sigmatel, Inc.* 1,800 36,432 ADE Corp.* 1,620 36,418 Cirrus Logic, Inc.* 4,750 36,052 Diodes, Inc.* 990 35,897 MKS Instruments, Inc.*+ 2,080 35,838 Tessera Technologies, Inc.* 1,190 35,593 Taiwan Semiconductor Manufacturing Co. Ltd. -- SP ADR 4,258 35,001 OmniVision Technologies, Inc.*+ 2,740 34,579 ASML Holding NV* 2,070 34,176 Silicon Image, Inc.* 3,790 33,693 PDF Solutions, Inc.* 2,010 33,366 Genesis Microchip, Inc.* 1,510 33,145 ------------ TOTAL COMMON STOCKS (Cost $21,759,556) 35,850,295 ------------ THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 25 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- ELECTRONICS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 210,180 $ 210,180 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $210,180) 210,180 ------------ SECURITIES LENDING COLLATERAL 21.9% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 7,884,762 7,884,762 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $7,884,762) 7,884,762 ------------ TOTAL INVESTMENTS 121.9% (Cost $29,854,498) $ 43,945,237 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (21.9)% $ (7,888,962) ============ NET ASSETS - 100.0% $ 36,056,275 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 26 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- ENERGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.5% Exxon Mobil Corp. 206,834 $ 13,142,232 BP PLC -- SP ADR 173,240 12,274,054 Royal Dutch Shell PLC -- SP ADR 147,900 9,708,156 Total SA -- SP ADR+ 63,850 8,672,107 ConocoPhillips 105,808 7,397,037 Chevron Corp. 92,708 6,000,989 Schlumberger Ltd.+ 66,200 5,585,956 Occidental Petroleum Corp. 63,585 5,432,067 Repsol YPF SA -- SP ADR 144,799 4,678,456 Halliburton Co.+ 63,209 4,331,081 Kerr-McGee Corp. 42,410 4,118,435 Devon Energy Corp.+ 59,394 4,076,804 Burlington Resources, Inc. 49,993 4,065,431 Transocean, Inc.* 63,045 3,865,289 Valero Energy Corp. 34,110 3,856,477 Baker Hughes, Inc.+ 61,015 3,641,375 Marathon Oil Corp. 48,909 3,371,297 Apache Corp. 43,808 3,295,238 EOG Resources, Inc. 43,190 3,234,931 Nabors Industries Ltd.*+ 42,025 3,018,656 Overseas Shipholding Group, Inc.+ 48,461 2,826,730 Williams Cos., Inc.+ 111,950 2,804,347 Peabody Energy Corp. 33,100 2,791,985 Cooper Cameron Corp.*+ 32,264 2,385,278 Patterson-UTI Energy, Inc.+ 64,000 2,309,120 XTO Energy, Inc.+ 50,129 2,271,846 Diamond Offshore Drilling, Inc.+ 35,704 2,186,870 Anadarko Petroleum Corp.+ 22,210 2,126,607 Kinder Morgan, Inc.+ 21,600 2,077,056 National-Oilwell Varco, Inc.*+ 31,164 2,050,591 Chesapeake Energy Corp.+ 53,485 2,045,801 Southwestern Energy Co.* 27,744 2,036,410 Forest Oil Corp.* 38,000 1,979,800 Newfield Exploration Co.*+ 39,550 1,941,905 Sunoco, Inc. 24,374 1,906,047 Noble Corp. 27,600 1,889,496 Quicksilver Resources, Inc.*+ 35,596 1,701,133 Helmerich & Payne, Inc.+ 27,949 1,687,840 Rowan Cos., Inc. 47,550 1,687,549 Grant Prideco, Inc.* 40,708 1,654,780 Amerada Hess Corp. 11,963 1,644,912 Cabot Oil & Gas Corp. 32,485 1,640,817 Consol Energy, Inc. 20,700 1,578,789 Vintage Petroleum, Inc. 33,942 1,549,792 Murphy Oil Corp. 29,928 1,492,509 Remington Oil & Gas Corp.* 35,150 1,458,725 Denbury Resources, Inc.* 27,900 1,407,276 St. Mary Land & Exploration Co.+ 38,240 1,399,584 Pride International, Inc.*+ 48,325 1,377,746 Smith International, Inc.+ 40,400 1,345,724 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- ENSCO International, Inc.+ 28,800 $ 1,341,792 Noble Energy, Inc.+ 27,700 1,299,130 Veritas DGC, Inc.*+ 35,387 1,295,872 Arch Coal, Inc.+ 18,640 1,258,200 Cal Dive International, Inc.*+ 19,716 1,250,192 W&T Offshore, Inc. 38,500 1,248,555 Massey Energy Co.+ 24,400 1,246,108 Lone Star Technologies, Inc.*+ 22,400 1,245,216 Swift Energy Co.*+ 26,820 1,227,015 Weatherford International Ltd.*+ 17,746 1,218,440 SEACOR Holdings, Inc.*+ 16,750 1,215,715 Frontier Oil Corp. 26,700 1,184,145 Plains Exploration & Production Co.* 27,620 1,182,688 Tesoro Corp. 17,200 1,156,528 Unit Corp.* 20,046 1,108,143 Hydril*+ 15,850 1,087,944 Range Resources Corp. 26,000 1,003,860 Petroleum Development Corp.* 25,299 969,964 Grey Wolf, Inc.* 113,250 954,697 Tetra Technologies, Inc.* 28,450 888,209 Cimarex Energy Co.*+ 19,371 878,087 TransMontaigne, Inc.* 82,635 660,254 W-H Energy Services, Inc.* 20,270 657,153 PetroChina Co. Ltd. -- SP ADR+ 7,450 621,107 Western Gas Resources, Inc.+ 11,500 589,145 ENI-Ente Nazionale Idrocarburi -- SP ADR+ 3,700 547,970 BJ Services Co. 15,194 546,832 Petroleo Brasiliero SA -- Petrobras 7,600 543,324 Oceaneering International, Inc.* 9,900 528,759 Todco -- Class A* 12,450 519,290 Pioneer Natural Resources Co.+ 9,175 503,891 GulfMark Offshore, Inc.* 14,292 461,203 Maverick Tube Corp.*+ 15,300 459,000 Teekay Shipping Corp. 10,600 456,330 Tenaris SA -- SP ADR+ 3,100 427,304 Parker Drilling Co.* 35,000 324,450 Pioneer Drilling Co.* 15,459 301,760 NS Group, Inc.* 7,650 300,263 Stolt Offshore SA -- SP ADR* 20,500 237,390 Offshore Logistics, Inc.* 6,169 228,253 Global Industries, Ltd.*+ 14,905 219,700 Superior Energy Services* 9,100 210,119 GlobalSantaFe Corp.+ 4,300 196,166 Atwood Oceanics, Inc.* 1,845 155,367 ------------- TOTAL COMMON STOCKS (Cost $145,502,693) 204,978,663 ------------- THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 27 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- ENERGY FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.9% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 1,926,221 $ 1,926,221 ------------- TOTAL REPURCHASE AGREEMENTS (Cost $1,926,221) 1,926,221 ------------- SECURITIES LENDING COLLATERAL 14.3% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 29,424,576 29,424,576 ------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $29,424,576) 29,424,576 ------------- TOTAL INVESTMENTS 114.7% (Cost $176,853,490) $ 236,329,460 ============= LIABILITIES IN EXCESS OF OTHER ASSETS - (14.7)% $ (30,251,177) ============= NET ASSETS - 100.0% $ 206,078,283 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 28 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- ENERGY SERVICES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.5% Schlumberger Ltd.+ 200,599 $ 16,926,544 Halliburton Co.+ 222,638 15,255,156 Baker Hughes, Inc.+ 186,930 11,155,982 Transocean, Inc.* 178,877 10,966,949 Nabors Industries Ltd.*+ 121,747 8,745,087 National-Oilwell Varco, Inc.*+ 127,371 8,381,012 Noble Corp. 97,985 6,708,053 Patterson-UTI Energy, Inc.+ 184,450 6,654,956 Diamond Offshore Drilling, Inc.+ 108,211 6,627,924 BJ Services Co.+ 179,422 6,457,398 Weatherford International Ltd.*+ 92,506 6,351,462 Grant Prideco, Inc.*+ 152,242 6,188,637 ENSCO International, Inc. 127,877 5,957,789 Cooper Cameron Corp.*+ 75,834 5,606,408 Smith International, Inc.+ 163,548 5,447,784 Rowan Cos., Inc.+ 148,640 5,275,233 Pride International, Inc.* 172,012 4,904,062 Helmerich & Payne, Inc.+ 80,440 4,857,772 Unit Corp.* 70,939 3,921,508 Cal Dive International, Inc.*+ 58,289 3,696,105 SEACOR Holdings, Inc.*+ 49,833 3,616,879 Veritas DGC, Inc.*+ 95,724 3,505,413 Lone Star Technologies, Inc.*+ 62,287 3,462,534 Tetra Technologies, Inc.* 104,117 3,250,533 Hydril*+ 45,128 3,097,586 Tidewater, Inc.+ 61,995 3,017,297 CARBO Ceramics, Inc. 39,684 2,618,747 W-H Energy Services, Inc.*+ 76,043 2,465,314 Oceaneering International, Inc.*+ 43,682 2,333,056 Maverick Tube Corp.*+ 74,925 2,247,750 Offshore Logistics, Inc.* 57,713 2,135,381 Atwood Oceanics, Inc.*+ 22,963 1,933,714 FMC Technologies, Inc.* 44,394 1,869,431 Grey Wolf, Inc.* 134,143 1,130,825 GulfMark Offshore, Inc.* 27,800 897,106 NS Group, Inc.* 18,337 719,727 Hanover Compressor Co.* 38,771 537,366 Tenaris SA -- SP ADR+ 3,865 532,752 Stolt Offshore SA -- SP ADR* 45,500 526,890 Input/Output, Inc.*+ 54,970 438,661 ------------- TOTAL COMMON STOCKS (Cost $133,786,065) 190,422,783 ------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.9% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 1,798,926 $ 1,798,926 ------------- TOTAL REPURCHASE AGREEMENTS (Cost $1,798,926) 1,798,926 ------------- SECURITIES LENDING COLLATERAL 23.3% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 44,624,941 44,624,941 ------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $44,624,941) 44,624,941 ------------- TOTAL INVESTMENTS 123.7% (Cost $180,209,932) $ 236,846,650 ============= LIABILITIES IN EXCESS OF OTHER ASSETS - (23.7)% $ (45,451,123) ============= NET ASSETS - 100.0% $ 191,395,527 * NON-INCOME PRODUCING SECURITY + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 29 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 100.1% Citigroup, Inc. 16,042 $ 730,232 J.P. Morgan Chase & Co. 17,025 577,658 American Express Co. 9,122 523,968 Wachovia Corp.+ 10,366 493,318 St. Paul Travelers Cos., Inc. 9,630 432,098 Washington Mutual, Inc.+ 10,236 401,456 Hartford Financial Services Group, Inc.+ 5,080 392,024 Chubb Corp.+ 4,166 373,065 Allstate Corp.+ 6,740 372,655 National City Corp. 10,730 358,811 SunTrust Banks, Inc. 5,141 357,042 Capital One Financial Corp.+ 4,390 349,093 KeyCorp+ 10,483 338,077 Wells Fargo & Co.+ 5,749 336,719 CIT Group, Inc. 7,390 333,880 W.R. Berkley Corp. 8,276 326,736 North Fork Bancorporation, Inc.+ 12,536 319,668 Leucadia National Corp. 7,350 316,785 Radian Group, Inc.+ 5,929 314,830 U.S. Bancorp+ 11,076 311,014 Host Marriott Corp.+ 18,080 305,552 PMI Group, Inc.+ 7,440 296,633 Vornado Realty Trust 3,391 293,728 Unitrin, Inc.+ 6,170 292,828 Nationwide Financial Services, Inc. 7,270 291,164 Providian Financial Corp.* 16,446 290,765 Allied Capital Corp.+ 10,100 289,163 Zions Bancorporation+ 4,050 288,401 Capital Automotive REIT 7,440 288,002 SVB Financial Group*+ 5,801 282,161 First Bancorp Puerto Rico 16,646 281,650 Golden West Financial Corp.+ 4,720 280,321 AmeriCredit Corp.*+ 11,586 276,558 IndyMac Bancorp, Inc.+ 6,930 274,289 CBL & Associates Properties, Inc. 6,658 272,911 iStar Financial, Inc. 6,680 270,072 Zenith National Insurance Corp. 4,240 265,806 Essex Property Trust, Inc.+ 2,930 263,700 Downey Financial Corp.+ 4,246 258,581 Whitney Holding Corp. 9,380 253,635 Franklin Resources, Inc.+ 2,948 247,514 First American Corp. 5,396 246,435 PartnerRe Ltd. 3,800 243,390 FirstFed Financial Corp.* 4,500 242,145 ING Groep NV -- SP ADR 7,902 235,401 Metris Companies, Inc.* 15,890 232,471 St. Joe Co. 3,690 230,441 Arbor Realty Trust, Inc. 8,090 227,329 Pan Pacific Retail Properties, Inc. 3,430 226,037 Macerich Co. 3,470 225,342 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Philadelphia Consolidated Holding Co.*+ 2,570 $ 218,193 Barclays PLC -- SP ADR 5,296 215,971 Endurance Specialty Holdings Ltd. 6,260 213,529 Marshall & Ilsley Corp. 4,900 213,199 Boston Properties, Inc. 2,960 209,864 CB Richard Ellis Group, Inc. -- Class A* 4,187 206,000 American Financial Group, Inc./OH 6,000 203,580 Sovereign Bancorp, Inc.+ 8,870 195,495 CNA Financial Corp.* 6,330 189,077 American International Group, Inc. 2,940 182,162 Bank of America Corp.+ 4,251 178,967 SLM Corp. 3,289 176,422 Legg Mason, Inc.+ 1,580 173,310 Prudential Financial, Inc.+ 2,526 170,657 MetLife, Inc.+ 3,406 169,721 Loews Corp.+ 1,761 162,734 Chicago Mercantile Exchange Holdings, Inc.+ 466 157,182 Corus Bankshares, Inc. 2,760 151,331 Uniao de Bancos Brasileiros SA 2,710 142,546 Morgan Stanley 2,640 142,402 Banco Itau Holding Financeira SA -- SP ADR+ 1,190 141,205 Associated Banc-Corp.+ 4,610 140,513 Lehman Brothers Holdings, Inc.+ 1,200 139,776 Raymond James Financial, Inc. 4,340 139,401 Simon Property Group, Inc. 1,880 139,346 Nuveen Investments, Inc. -- Class A 3,460 136,289 Regency Centers Corp.+ 2,340 134,433 General Growth Properties, Inc.+ 2,960 132,993 Taubman Centers, Inc. 3,910 123,947 New Century Financial Corp. 3,130 113,525 Commerce Group, Inc. 1,790 103,856 ACE Ltd. 1,990 93,669 Calamos Asset Management, Inc. -- Class A 3,716 91,711 UnumProvident Corp.+ 4,276 87,658 Banco Bradesco SA -- SP ADR+ 1,720 84,142 Astoria Financial Corp. 3,130 82,695 Ameritrade Holding Corp.* 3,786 81,323 Jones Lang LaSalle, Inc. 1,750 80,605 Ohio Casualty Corp. 2,596 70,404 Student Loan Corp. 290 68,695 Everest Re Group Ltd.+ 690 67,551 Federal Realty Investment Trust+ 1,100 67,023 American Home Mortgage Investment Corp. 2,200 66,660 Conseco, Inc.*+ 3,130 66,074 Mills Corp. 1,150 63,342 Axis Capital Holdings Ltd. 2,110 60,156 30 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- FINANCIAL SERVICES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Principal Financial Group, Inc. 1,240 $ 58,739 Commercial Net Lease Realty 2,790 55,800 Kookmin Bank -- SP ADR 920 54,510 T. Rowe Price Group, Inc. 750 48,975 First Republic Bank+ 1,370 48,265 MoneyGram International, Inc. 2,210 47,979 AvalonBay Communities, Inc.+ 550 47,135 Fremont General Corp.+ 2,110 46,061 Westcorp 710 41,819 Sterling Financial Corp./WA 1,670 37,659 First Marblehead Corp.+ 1,450 36,830 Goldman Sachs Group, Inc. 290 35,258 Merrill Lynch & Co., Inc. 500 30,675 Center Financial Corp. 1,120 26,320 ICICI Bank Ltd. -- SP ADR 920 25,990 Universal American Financial Corp.*+ 1,100 25,014 KIMCO Realty Corp.+ 782 24,570 ------------ TOTAL COMMON STOCKS (Cost $21,583,096) 22,872,487 ------------ FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 132,110 132,110 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $132,110) 132,110 ------------ SECURITIES LENDING COLLATERAL 20.0% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 4,587,778 4,587,778 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $4,587,778) 4,587,778 ------------ TOTAL INVESTMENTS 120.7% (Cost $26,302,984) $ 27,592,375 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (20.7)% $ (4,737,110) ============ NET ASSETS - 100.0% $ 22,855,265 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. REIT--REAL ESTATE INVESTMENT TRUST. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 31 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- HEALTH CARE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.6% Johnson & Johnson, Inc. 103,719 $ 6,563,338 Pfizer, Inc. 254,743 6,360,933 Amgen, Inc.*+ 58,866 4,689,854 Genentech, Inc.*+ 49,731 4,187,848 UnitedHealth Group, Inc.+ 67,976 3,820,251 Abbott Laboratories 79,253 3,360,327 WellPoint, Inc.* 40,010 3,033,558 Schering-Plough Corp.+ 116,050 2,442,853 Aetna, Inc.+ 26,903 2,317,425 Baxter International, Inc. 55,454 2,210,951 Guidant Corp. 29,900 2,059,811 Wyeth 43,437 2,009,830 Stryker Corp. 39,260 1,940,622 Medtronic, Inc. 31,564 1,692,462 McKesson Corp. 33,500 1,589,575 St. Jude Medical, Inc.* 33,540 1,569,672 Merck & Co., Inc. 56,778 1,544,929 Eli Lilly & Co.+ 28,133 1,505,678 Express Scripts, Inc.*+ 20,274 1,261,043 Allergan, Inc.+ 13,690 1,254,278 Coventry Health Care, Inc.* 14,414 1,239,892 Gilead Sciences, Inc.*+ 25,428 1,239,869 Genzyme Corp.* 16,900 1,210,716 Medimmune, Inc.* 34,900 1,174,385 Caremark Rx, Inc.*+ 22,670 1,131,913 Bristol-Myers Squibb Co.+ 46,648 1,122,351 AmerisourceBergen Corp.+ 14,270 1,103,071 Humana, Inc.* 23,002 1,101,336 Fisher Scientific International, Inc.*+ 16,130 1,000,867 Pacificare Health Systems, Inc.*+ 12,508 997,888 CIGNA Corp. 8,370 986,488 C.R. Bard, Inc. 14,630 966,019 WellChoice, Inc.* 12,270 931,293 Hospira, Inc.* 22,689 929,568 Omnicare, Inc.+ 16,300 916,549 Barr Pharmaceuticals, Inc.* 15,600 856,752 Health Net, Inc.*+ 17,600 832,832 Varian Medical Systems, Inc.*+ 20,000 790,200 Tenet Healthcare Corp.*+ 68,600 770,378 Waters Corp.* 18,200 757,120 Chiron Corp.*+ 16,700 728,454 Bausch & Lomb, Inc.+ 8,400 677,712 Watson Pharmaceuticals, Inc.*+ 18,470 676,187 Kinetic Concepts, Inc.* 11,063 628,378 Invitrogen Corp.*+ 8,151 613,200 Endo Pharmaceuticals Holdings, Inc.* 21,800 581,406 Community Health Systems, Inc.*+ 14,800 574,388 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Triad Hospitals, Inc.*+ 12,600 $ 570,402 Dade Behring Holdings, Inc. 15,540 569,696 Cytyc Corp.* 20,300 545,055 Respironics, Inc.* 12,800 539,904 Beckman Coulter, Inc. 9,884 533,538 IVAX Corp.* 19,500 514,020 Inamed Corp.* 6,600 499,488 Affymetrix, Inc.*+ 10,600 490,038 Kos Pharmaceuticals, Inc.* 7,200 481,896 Universal Health Services, Inc. -- Class B+ 9,100 433,433 Techne Corp.*+ 7,600 433,048 HCA, Inc. 9,016 432,047 Cardinal Health, Inc.+ 6,206 393,709 Sybron Dental Specialties, Inc.*+ 8,200 340,956 Neurometrix, Inc.* 9,500 282,815 Radiation Therapy Services, Inc.*+ 8,469 269,822 Immucor, Inc.*+ 9,620 263,973 Boston Scientific Corp.*+ 11,253 262,983 Alcon, Inc. 2,000 255,760 Matria Healthcare, Inc.* 6,700 252,925 Thoratec Corp.* 14,000 248,640 Chemed Corp. 5,700 247,038 Allscripts Healthcare Solutions Inc.*+ 13,700 246,874 Intuitive Surgical, Inc.*+ 3,300 241,857 Lifecell Corp.* 11,000 237,930 Per-Se Technologies, Inc.*+ 11,500 237,590 United Therapeutics Corp.*+ 3,400 237,320 AstraZeneca PLC -- SP ADR 5,000 235,500 Teva Pharmaceutical Industries Ltd. -- SP ADR+ 6,900 230,598 SuperGen, Inc.*+ 36,600 230,580 WellCare Health Plans, Inc.* 6,200 229,710 Advanced Neuromodulation Systems, Inc.*+ 4,800 227,808 CNS, Inc. 8,600 224,202 NuVasive, Inc.* 11,800 221,132 Kindred Healthcare, Inc.* 7,100 211,580 Laserscope*+ 7,400 208,532 Discovery Laboratories, Inc.* 31,900 205,755 The Trizetto Group, Inc.* 14,000 197,680 Orasure Technologies, Inc.* 20,900 197,087 AMERIGROUP Corp.* 9,700 185,464 Zimmer Holdings, Inc.*+ 2,000 137,780 Schering AG -- SP ADR 1 63 ------------- TOTAL COMMON STOCKS (Cost $80,315,516) 92,960,678 ------------- 32 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- HEALTH CARE FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 554,075 $ 554,075 ------------- TOTAL REPURCHASE AGREEMENTS (Cost $554,075) 554,075 ------------- SECURITIES LENDING COLLATERAL 18.3% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 17,121,943 17,121,943 ------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $17,121,943) 17,121,943 ------------- TOTAL INVESTMENTS 118.5% (Cost $97,991,534) $ 110,636,696 ============= LIABILITIES IN EXCESS OF OTHER ASSETS - (18.5)% $ (17,244,526) ============= NET ASSETS - 100.0% $ 93,392,170 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 33 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- INTERNET FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.3% Cisco Systems, Inc.* 67,376 $ 1,208,052 Qualcomm, Inc. 19,931 891,912 Google, Inc. -- Class A*+ 2,812 889,886 Time Warner, Inc. 47,199 854,774 Yahoo!, Inc.*+ 24,079 814,833 eBay, Inc.* 17,799 733,319 Broadcom Corp. -- Class A* 11,223 526,471 Juniper Networks, Inc.*+ 17,772 422,796 Intuit, Inc.*+ 9,365 419,646 McAfee, Inc.*+ 12,445 391,022 Amazon.com, Inc.*+ 8,371 379,206 Qwest Communications International, Inc.* 90,932 372,821 Research In Motion Ltd.*+ 5,364 366,898 IAC/InterActiveCorp*+ 13,398 339,639 VeriSign, Inc.*+ 15,798 337,603 Symantec Corp.* 13,627 308,788 Foundry Networks, Inc.*+ 23,954 304,216 EarthLink, Inc.* 25,136 268,955 Check Point Software Technologies Ltd.*+ 10,870 264,358 Sun Microsystems, Inc.* 65,908 258,359 F5 Networks, Inc.*+ 5,931 257,821 Internet Security Systems, Inc.* 10,518 252,537 United Online, Inc. 17,624 244,092 WebMD Corp.*+ 18,910 209,523 E*Trade Financial Corp.* 11,735 206,536 BEA Systems, Inc.* 22,045 197,964 Macromedia, Inc.* 4,617 187,773 Websense, Inc.* 3,050 156,190 TIBCO Software, Inc.* 18,147 151,709 j2 Global Communications, Inc.* 3,410 137,832 Monster Worldwide, Inc.*+ 3,897 119,677 Expedia, Inc.* 5,724 113,392 Siebel Systems, Inc. 9,785 101,079 InfoSpace, Inc.* 3,762 89,799 Click Commerce, Inc.* 4,791 87,819 CheckFree Corp.* 1,945 73,560 Stamps.com, Inc.* 4,120 70,905 Red Hat, Inc.* 3,106 65,816 Nutri/System, Inc.* 2,146 53,693 Internet Initiative Japan, Inc. -- SP ADR* 4,414 41,536 Netflix, Inc.*+ 1,190 30,928 CNET Networks, Inc.* 2,266 30,750 Audible, Inc.*+ 2,106 25,883 Digitas, Inc.*+ 2,146 24,379 Palm, Inc.*+ 737 20,879 ------------ TOTAL COMMON STOCKS (Cost $10,873,772) 13,305,626 ------------ MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.7% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 95,400 $ 95,400 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $95,400) 95,400 ------------ SECURITIES LENDING COLLATERAL 9.7% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 1,299,546 1,299,546 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $1,299,546) 1,299,546 ------------ TOTAL INVESTMENTS 109.7% (Cost $12,268,718) $ 14,700,572 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (9.7)% $ (1,303,858) ============ NET ASSETS - 100.0% $ 13,396,714 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 34 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- LEISURE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.8% The Walt Disney Co. 31,036 $ 748,899 Time Warner, Inc. 39,184 709,622 News Corp. -- Class A 41,990 654,624 Carnival Corp. 10,680 533,786 Viacom, Inc. -- Class B 15,133 499,540 McDonald's Corp.+ 14,840 496,992 MGM Mirage, Inc.*+ 10,840 474,467 Yum! Brands, Inc. 9,618 465,607 Marriott International, Inc. -- Class A+ 7,316 460,908 Starbucks Corp.* 8,994 450,599 Hilton Hotels Corp. 17,493 390,444 Darden Restaurants, Inc.+ 10,842 329,271 Hasbro, Inc. 15,126 297,226 Brinker International, Inc.*+ 7,780 292,217 Brunswick Corp. 7,392 278,900 Boyd Gaming Corp. 6,310 272,087 Starwood Hotels & Resorts Worldwide, Inc.+ 4,758 272,015 DreamWorks Animation SKG, Inc. -- Class A* 9,340 258,344 Polaris Industries, Inc.+ 5,188 257,065 THQ, Inc.* 11,210 238,997 Electronic Arts, Inc.* 4,195 238,653 Shuffle Master, Inc.*+ 9,023 238,478 Papa John's International, Inc.* 4,713 236,216 Applebee's International, Inc. 11,327 234,356 CBRL Group, Inc.+ 6,940 233,600 Activision, Inc.*+ 10,626 217,302 Warner Music Group Corp.* 11,280 208,793 Marvel Entertainment, Inc.*+ 11,439 204,415 Panera Bread Co. -- Class A* 3,760 192,437 Jakks Pacific, Inc.*+ 11,600 188,268 Choice Hotels International, Inc. 2,876 185,905 IHOP Corp. 4,550 185,367 Harrah's Entertainment, Inc. 2,523 164,474 Las Vegas Sands Corp.*+ 4,980 163,892 Sonic Corp.* 5,720 156,442 Bluegreen Corp.* 8,100 142,965 Royal Caribbean Cruises Ltd.+ 3,240 139,968 Mattel, Inc.+ 8,143 135,825 Scientific Games Corp. -- Class A* 4,350 134,850 Dave & Buster's, Inc.* 10,030 133,900 International Game Technology, Inc.+ 4,784 129,168 Wynn Resorts Ltd.*+ 2,799 126,375 O'Charleys, Inc.* 8,205 117,414 Shanda Interactive Entertainment Ltd.*+ 4,280 115,774 Jack in the Box, Inc.*+ 3,295 98,553 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Eastman Kodak Co. 4,013 $ 97,636 Station Casinos, Inc. 1,360 90,250 Luby's, Inc.* 6,410 83,715 Lions Gate Entertainment Corp.*+ 8,540 81,472 Argosy Gaming Co.* 1,542 72,459 Bally Total Fitness Holding Corp.* 15,424 68,945 Wendy's International, Inc. 1,421 64,158 Pixar*+ 1,174 52,255 GTECH Holdings Corp. 1,616 51,809 Penn National Gaming, Inc.* 1,650 51,331 Lone Star Steakhouse & Saloon, Inc. 1,750 45,500 Ameristar Casinos, Inc. 2,180 45,431 Domino's Pizza, Inc. 1,750 40,810 Marinemax, Inc.* 1,520 38,745 Nautilus, Inc.+ 1,180 26,043 Meade Instruments Corp.* 7,223 19,213 Krispy Kreme Doughnuts, Inc.*+ 2,410 15,087 Mikohn Gaming Corp.* 1,130 15,018 Oakley, Inc. 820 14,219 Monarch Casino & Resort, Inc.* 720 12,233 Outback Steakhouse, Inc. 195 7,137 ------------ TOTAL COMMON STOCKS (Cost $11,690,656) 13,698,466 ------------ FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.6% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 80,519 80,519 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $80,519) 80,519 ------------ SECURITIES LENDING COLLATERAL 11.3% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 1,556,276 1,556,276 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $1,556,276) 1,556,276 ------------ TOTAL INVESTMENTS 111.7% (Cost $13,327,451) $ 15,335,261 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (11.7)% $ (1,606,724) ============ NET ASSETS - 100.0% $ 13,728,537 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 35 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- PRECIOUS METALS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 98.6% Newmont Mining Corp.+ 681,800 $ 32,160,506 Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 474,743 23,067,762 Barrick Gold Corp.+ 606,929 17,631,288 Goldcorp, Inc.+ 713,989 14,308,340 Placer Dome, Inc. 778,761 13,355,751 AngloGold Ashanti Ltd. -- SP ADR+ 285,036 12,096,928 Gold Fields Ltd. -- SP ADR 681,070 9,895,947 Glamis Gold Ltd.*+ 389,744 8,613,342 Harmony Gold Mining Co. Ltd. -- SP ADR*+ 741,436 8,111,310 Coeur d'Alene Mines Corp.*+ 1,911,378 8,085,129 Meridian Gold, Inc.* 347,086 7,604,654 Pan American Silver Corp.* 418,499 7,390,692 Cia de Minas Buenaventura SA -- SP ADR 233,300 7,243,965 Royal Gold, Inc.+ 259,166 6,963,790 Agnico-Eagle Mines Ltd.+ 456,409 6,759,417 Kinross Gold Corp.* 799,324 6,138,808 Bema Gold Corp.* 2,195,395 5,905,613 Randgold Resources Ltd. -- SP ADR*+ 358,328 5,632,916 Silver Standard Resources, Inc.*+ 377,508 5,171,860 Apex Silver Mines Ltd.* 318,822 5,008,694 Hecla Mining Co.*+ 1,139,743 4,992,074 Golden Star Resources Ltd.*+ 1,423,011 4,752,857 Stillwater Mining Co.* 422,452 3,865,436 Novagold Resources, Inc.*+ 411,324 3,294,705 Crystallex International Corp.*+ 1,904,917 2,990,720 ------------- TOTAL COMMON STOCKS (Cost $149,196,513) 231,042,504 ------------- FACE AMOUNT ----------- SECURITIES LENDING COLLATERAL 27.2% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) $63,821,777 63,821,777 ------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $63,821,777) 63,821,777 ------------- TOTAL INVESTMENTS 125.8% (Cost $213,018,290) $ 294,864,281 ============= LIABILITIES IN EXCESS OF OTHER ASSETS - (25.8)% $ (60,565,247) ============= NET ASSETS - 100.0% $ 234,299,034 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 36 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- REAL ESTATE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.5% Simon Property Group, Inc.+ 9,451 $ 700,508 Equity Office Properties Trust+ 18,646 609,911 Equity Residential+ 15,560 588,946 General Growth Properties, Inc.+ 13,088 588,044 Vornado Realty Trust 6,635 574,724 ProLogis+ 12,044 533,670 Public Storage, Inc.+ 7,316 490,172 KIMCO Realty Corp.+ 15,450 485,439 Archstone-Smith Trust+ 11,994 478,201 Boston Properties, Inc. 6,680 473,612 Plum Creek Timber Co., Inc. (REIT)+ 12,460 472,359 Host Marriott Corp.+ 24,678 417,058 AvalonBay Communities, Inc.+ 4,860 416,502 Duke Realty Corp.+ 11,229 380,439 Developers Diversified Realty Corp. 8,054 376,122 Trizec Properties, Inc. 15,341 353,763 iStar Financial, Inc. 8,730 352,954 AMB Property Corp. 7,666 344,203 Health Care Property Investors, Inc. 12,650 341,423 CB Richard Ellis Group, Inc. -- Class A* 6,810 335,052 Apartment Investment & Management Co. -- Class A+ 8,300 321,874 Liberty Property Trust+ 7,560 321,602 Weingarten Realty Investors 8,421 318,735 St. Joe Co. 5,101 318,557 Macerich Co.+ 4,881 316,972 Global Signal, Inc. 7,070 316,312 United Dominion Realty Trust, Inc. 13,319 315,660 Ventas, Inc. 9,544 307,317 Shurgard Storage Centers, Inc. -- Class A 5,474 305,832 Federal Realty Investment Trust 5,004 304,894 Regency Centers Corp.+ 5,300 304,485 Reckson Associates Realty Corp. 8,659 299,168 Rayonier, Inc. 5,186 298,817 Arden Realty, Inc.+ 7,223 297,371 Camden Property Trust 5,255 292,966 SL Green Realty Corp. 4,191 285,742 Hospitality Properties Trust 6,646 284,848 HRPT Properties Trust 22,480 278,977 Mack-Cali Realty Corp. 6,201 278,673 Forest City Enterprises, Inc. -- Class A 7,254 276,377 BRE Properties, Inc. -- Class A 6,150 273,675 Pan Pacific Retail Properties, Inc. 4,133 272,365 Mills Corp.+ 4,840 266,587 Essex Property Trust, Inc.+ 2,923 263,070 CBL & Associates Properties, Inc. 6,376 261,352 Prentiss Properties Trust 6,266 254,400 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- CenterPoint Properties Trust 5,670 $ 254,016 Health Care REIT, Inc. 6,660 247,019 New Plan Excel Realty Trust 10,682 245,152 Capital Automotive REIT 6,279 243,060 Crescent Real Estate EQT Co. 11,779 241,587 Thornburg Mortgage, Inc.+ 9,612 240,877 Healthcare Realty Trust, Inc. 5,870 235,622 CarrAmerica Realty Corp. 6,500 233,675 First Industrial Realty Trust, Inc. 5,827 233,371 Realty Income Corp. 9,610 229,775 Alexandria Real Estate Equities, Inc. 2,762 228,390 Kilroy Realty Corp. 4,015 224,960 Nationwide Health Properties, Inc. 9,596 223,587 Corporate Office Properties Trust SBI/MD 6,202 216,760 Post Properties, Inc. 5,810 216,422 Brandywine Realty Trust+ 6,900 214,521 Colonial Properties Trust 4,818 214,305 Senior Housing Properties Trust 11,095 210,805 American Financial Realty Trust 14,670 208,314 Highwoods Properties, Inc.+ 7,050 208,045 Cousins Properties, Inc.+ 6,794 205,315 Taubman Centers, Inc. 6,375 202,087 Heritage Property Investment Trust 5,732 200,620 New Century Financial Corp. 5,490 199,122 Washington Real Estate Investment Trust 6,370 198,171 Lexington Corporate Properties Trust 8,316 195,842 Pennsylvania Real Estate Investment Trust 4,586 193,437 Commercial Net Lease Realty 9,520 190,400 Home Properties, Inc. 4,842 190,048 Mid-America Apartment Communities, Inc.+ 3,883 180,598 Friedman Billings Ramsey Group, Inc. -- Class A+ 17,520 178,529 LaSalle Hotel Properties 5,164 177,900 Annaly Mortgage Management, Inc. 13,365 173,077 Trustreet Properties, Inc. 11,009 172,291 Eastgroup Properties, Inc. 3,928 171,850 Sovran Self Storage, Inc. 3,457 169,220 Entertainment Properties Trust 3,774 168,434 FelCor Lodging Trust, Inc.* 11,100 168,165 Equity Lifestyle Properties, Inc. 3,673 165,285 Inland Real Estate Corp. 10,230 160,202 Meristar Hospitality Corp.* 17,286 157,821 PS Business Parks, Inc. 3,395 155,491 Innkeepers USA Trust 9,610 148,475 Glimcher Realty Trust 5,952 145,645 National Health Investors, Inc. 5,106 140,977 Equity Inns, Inc. 10,403 140,441 THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 37 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- REAL ESTATE FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Tanger Factory Outlet Centers, Inc. 5,044 $ 140,274 AMLI Residential Properties Trust 4,340 139,184 Sun Communities, Inc. 3,951 129,435 Saul Centers, Inc. 3,585 129,024 Parkway Properties, Inc./MD 2,664 124,995 Glenborough Realty Trust, Inc. 6,345 121,824 Town & Country Trust+ 4,150 120,433 Ramco-Gershenson Properties Trust 4,099 119,650 Acadia Realty Trust 6,508 117,079 Bedford Property Investors, Inc. 4,560 108,710 Correctional Properties Trust 3,507 103,141 Universal Health Realty Income Trust 2,963 98,520 Urstadt Biddle Properties, Inc. 5,170 78,377 Winston Hotels, Inc. 7,639 76,390 Associated Estates Realty Corp. 7,513 73,627 American Land Lease, Inc. 2,450 58,188 ------------ TOTAL COMMON STOCKS (Cost $24,634,236) 27,808,287 ------------ FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.3% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 76,519 76,519 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $76,519) 76,519 ------------ SECURITIES LENDING COLLATERAL 7.7% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 2,151,769 2,151,769 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $2,151,769) 2,151,769 ------------ TOTAL INVESTMENTS 107.5% (Cost $26,862,524) $ 30,036,575 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (7.5)% $ (2,092,106) ============ NET ASSETS - 100.0% $ 27,944,469 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. REIT--REAL ESTATE INVESTMENT TRUST. 30 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- RETAILING FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.9% Wal-Mart Stores, Inc.+ 23,184 $ 1,015,923 Home Depot, Inc. 19,837 756,583 eBay, Inc.* 13,312 548,454 Federated Department Stores, Inc. 8,079 540,243 Nordstrom, Inc. 14,740 505,877 Lowe's Cos., Inc.+ 7,436 478,878 Target Corp. 8,333 432,733 Staples, Inc.+ 19,709 420,196 Costco Wholesale Corp.+ 8,525 367,342 Walgreen Co.+ 7,620 331,089 Best Buy Co., Inc.+ 7,561 329,130 Genuine Parts Co. 7,614 326,641 Sherwin-Williams Co. 7,039 310,209 AutoZone, Inc.*+ 3,520 293,040 Office Depot, Inc.*+ 9,423 279,863 CarMax, Inc.*+ 8,830 276,114 CVS Corp.+ 8,478 245,947 J.C. Penney Holding Co., Inc. 4,810 228,090 Michaels Stores, Inc. 6,770 223,816 Petsmart, Inc. 10,101 220,000 Sears Holdings Corp.*+ 1,694 210,767 Big Lots, Inc.*+ 19,130 210,239 American Eagle Outfitters, Inc. 8,806 207,205 Pacific Sunwear of California, Inc.*+ 9,240 198,106 Neiman-Marcus Group, Inc. -- Class A 1,940 193,903 AutoNation, Inc.*+ 9,545 190,614 Aeropostale, Inc.*+ 8,770 186,362 ShopKo Stores, Inc.* 7,280 185,786 Amazon.com, Inc.*+ 4,093 185,413 Advance Auto Parts, Inc.*+ 4,680 181,022 Men's Wearhouse, Inc.* 6,615 176,620 Payless Shoesource, Inc.*+ 9,887 172,034 Urban Outfitters, Inc.*+ 5,712 167,933 IAC/InterActiveCorp*+ 6,492 164,572 Barnes & Noble, Inc. 4,250 160,225 Aaron Rents, Inc. 7,231 152,936 Asbury Automotive Group, Inc.* 8,889 151,380 Building Material Holding Corp. 1,612 150,222 Limited Brands, Inc.+ 7,173 146,544 Ross Stores, Inc. 5,970 141,489 HOT Topic, Inc.* 9,170 140,851 Chico's FAS, Inc.*+ 3,712 136,602 Buckle, Inc. 3,842 130,513 Abercrombie & Fitch Co. -- Class A 2,590 129,111 Genesco, Inc.* 3,420 127,361 TBC Corp.* 3,655 126,061 The Gap, Inc. 7,048 122,847 Kohl's Corp.* 2,431 121,988 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Burlington Coat Factory Warehouse Corp. 3,172 $ 120,663 Bebe Stores, Inc.+ 5,960 104,300 Too, Inc.*+ 3,480 95,456 Pantry, Inc.* 2,410 90,062 Bed Bath & Beyond, Inc.* 2,235 89,802 Expedia, Inc.* 4,351 86,193 Electronics Boutique Holdings Corp.* 1,360 85,462 Rite Aid Corp.*+ 20,780 80,626 Dress Barn, Inc.*+ 3,290 74,880 Conn's, Inc.*+ 2,700 74,844 O'Reilly Automotive, Inc.* 2,440 68,759 Children's Place Retail Stores, Inc.* 1,920 68,429 Stein Mart, Inc. 3,330 67,599 Trans World Entertainment Corp.* 8,088 63,814 Select Comfort Corp.* 3,122 62,378 TJX Cos., Inc. 3,007 61,583 Hibbett Sporting Goods, Inc.* 2,720 60,520 Regis Corp. 1,518 57,411 Stamps.com, Inc.* 3,220 55,416 United Auto Group, Inc. 1,650 54,516 BJ's Wholesale Club, Inc.*+ 1,736 48,261 GameStop Corp. -- Class B* 1,410 40,030 Foot Locker, Inc.+ 1,660 36,420 Tuesday Morning Corp. 1,250 32,338 Handleman Co.+ 2,020 25,513 Longs Drug Stores Corp. 580 24,876 Family Dollar Stores, Inc. 1,250 24,838 Sports Authority, Inc.*+ 800 23,552 CSK Auto Corp.* 1,356 20,177 Hancock Fabrics, Inc./DE+ 2,940 19,786 Dollar General Corp.+ 931 17,075 Restoration Hardware, Inc.* 2,700 17,064 Guess ?, Inc.* 710 15,215 Insight Enterprises, Inc.* 808 15,029 99 Cents Only Stores* 1,470 13,598 Movie Gallery, Inc.+ 880 9,143 ------------ TOTAL COMMON STOCKS (Cost $11,595,610) 14,604,502 ------------ THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 39 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- RETAILING FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.4% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 61,782 $ 61,782 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $61,782) 61,782 ------------ SECURITIES LENDING COLLATERAL 23.0% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 3,361,109 3,361,109 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $3,361,109) 3,361,109 ------------ TOTAL INVESTMENTS 123.3% (Cost $15,018,501) $ 18,027,393 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (23.3)% $ (3,411,390) ============ NET ASSETS - 100.0% $ 14,616,003 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. 40 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- TECHNOLOGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.8% Microsoft Corp. 91,724 $ 2,360,059 Intel Corp. 83,952 2,069,417 Dell, Inc.* 48,412 1,655,690 Cisco Systems, Inc.* 90,620 1,624,817 International Business Machines Corp. 18,790 1,507,334 Hewlett-Packard Co. 39,269 1,146,655 Yahoo!, Inc.*+ 31,849 1,077,770 Applied Materials, Inc. 63,424 1,075,671 Texas Instruments, Inc.+ 30,740 1,042,086 Qualcomm, Inc. 22,161 991,705 Motorola, Inc.+ 43,806 967,675 Xerox Corp.*+ 66,249 904,299 Oracle Corp.* 72,820 902,240 Google, Inc. -- Class A*+ 2,690 851,277 Apple Computer, Inc.* 15,610 836,852 KLA-Tencor Corp.+ 13,821 673,912 EMC Corp./MA*+ 47,269 611,661 Corning, Inc.* 30,760 594,591 Paychex, Inc.+ 14,880 551,750 Intuit, Inc.*+ 11,300 506,353 Affiliated Computer Services, Inc. -- Class A*+ 7,020 383,292 Symantec Corp.*+ 15,764 357,212 Adobe Systems, Inc.+ 11,654 347,872 DST Systems, Inc.*+ 6,165 338,027 Sandisk Corp.*+ 6,920 333,890 Arrow Electronics, Inc.* 10,486 328,841 Novell, Inc.*+ 43,640 325,118 Lam Research Corp.*+ 10,520 320,544 Jabil Circuit, Inc.*+ 10,180 314,766 Ceridian Corp.* 14,700 305,025 Juniper Networks, Inc.*+ 12,769 303,775 Novellus Systems, Inc.*+ 11,819 296,421 Avnet, Inc.*+ 11,906 291,102 National Semiconductor Corp.+ 10,924 287,301 McAfee, Inc.*+ 9,048 284,288 Parametric Technology Corp.* 39,492 275,259 Advanced Micro Devices, Inc.*+ 10,795 272,034 Analog Devices, Inc.+ 7,190 267,037 Global Payments, Inc.+ 3,316 257,720 Autodesk, Inc. 5,472 254,120 Lucent Technologies, Inc.*+ 76,845 249,746 Compuware Corp.* 25,823 245,318 Computer Associates International, Inc.+ 8,690 241,669 Electronic Arts, Inc.*+ 4,206 239,279 Cymer, Inc.* 7,597 237,938 Computer Sciences Corp.* 4,990 236,077 Network Appliance, Inc.* 9,874 234,409 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Nvidia Corp.*+ 6,772 $ 232,144 BEA Systems, Inc.* 24,567 220,612 NCR Corp.* 6,896 220,051 Belden CDT, Inc.+ 11,270 218,976 CSG Systems International, Inc.* 10,050 218,185 Harris Corp. 5,151 215,312 Mercury Interactive Corp.*+ 5,180 205,128 VeriSign, Inc.*+ 9,573 204,575 Sybase, Inc.*+ 8,614 201,740 MEMC Electronic Materials, Inc.*+ 8,771 199,891 Imation Corp. 4,500 192,915 Broadcom Corp. -- Class A* 4,010 188,109 Comverse Technology, Inc.*+ 6,890 181,000 Solectron Corp.* 44,037 172,185 Filenet Corp.* 6,120 170,748 Fiserv, Inc.*+ 3,676 168,618 CACI International, Inc. -- Class A*+ 2,739 165,983 Western Digital Corp.*+ 12,714 164,392 Factset Research Systems, Inc. 4,570 161,047 Powerwave Technologies, Inc.*+ 12,320 160,037 Citrix Systems, Inc.*+ 6,339 159,362 LSI Logic Corp.*+ 16,070 158,289 Fair Isaac Corp.+ 3,442 154,202 MPS Group, Inc.* 12,879 151,972 Avaya, Inc.*+ 14,270 146,981 BISYS Group, Inc.* 10,805 145,111 Tech Data Corp.*+ 3,810 139,865 QLogic Corp.* 4,083 139,639 Macromedia, Inc.* 3,425 139,295 Cadence Design Systems, Inc.*+ 8,594 138,879 Cognizant Technology Solutions Corp.* 2,932 136,602 SRA International, Inc. -- Class A* 3,780 134,114 Linear Technology Corp.+ 3,470 130,437 Internet Security Systems, Inc.* 5,390 129,414 Activision, Inc.*+ 6,278 128,385 Anixter International, Inc.* 3,140 126,636 Freescale Semiconductor, Inc. -- Class B* 5,270 124,267 International Rectifier Corp.*+ 2,738 123,429 ADC Telecommunications, Inc.*+ 5,290 120,929 NAVTEQ Corp.*+ 2,391 119,430 Ingram Micro, Inc. -- Class A* 5,870 108,830 Semtech Corp.*+ 6,576 108,307 Agere Systems, Inc.* 10,370 107,952 Hyperion Solutions Corp.*+ 2,210 107,516 Wind River Systems, Inc.*+ 8,105 104,798 Microsemi Corp.*+ 3,970 101,394 Websense, Inc.* 1,958 100,269 Amphenol Corp. -- Class A 2,424 97,784 Avocent Corp.*+ 3,090 97,768 THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 41 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- TECHNOLOGY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- F5 Networks, Inc.*+ 2,143 $ 93,156 ATMI, Inc.* 2,900 89,900 Trimble Navigation Ltd.* 2,651 89,312 Cree, Inc.*+ 3,544 88,671 j2 Global Communications, Inc.*+ 2,184 88,277 Micros Systems, Inc.*+ 2,010 87,937 Microchip Technology, Inc. 2,880 86,746 Acxiom Corp.+ 4,600 86,112 Checkpoint Systems, Inc.* 3,620 85,866 Salesforce.com, Inc.* 3,680 85,082 Integrated Device Technology, Inc.* 7,560 81,194 CheckFree Corp.*+ 2,067 78,174 Serena Software, Inc.*+ 3,898 77,687 Standard Microsystems Corp.* 2,580 77,168 Global Imaging Systems, Inc.* 2,210 75,250 ViaSat, Inc.* 2,900 74,385 MAXIMUS, Inc. 2,030 72,572 Black Box Corp.+ 1,720 72,171 MTS Systems Corp. 1,900 71,763 Itron, Inc.* 1,570 71,686 iPayment Holdings, Inc.* 1,880 71,139 Coherent, Inc.* 2,420 70,858 Talx Corp. 2,160 70,826 Synaptics, Inc.*+ 3,717 69,880 THQ, Inc.* 3,100 66,092 Photronics, Inc.*+ 3,390 65,766 Intrado, Inc.* 3,620 65,269 Hutchinson Technology, Inc.*+ 2,460 64,255 SPSS, Inc.* 2,670 64,080 Gateway, Inc.* 23,450 63,315 Agilsys, Inc. 3,720 62,645 Ciber, Inc.*+ 8,290 61,595 Progress Software Corp.* 1,920 60,998 Anteon International Corp.* 1,420 60,719 Ultratech, Inc.* 3,810 59,398 Methode Electronics, Inc. -- Class A 5,060 58,291 Sun Microsystems, Inc.* 14,335 56,193 Altiris, Inc.* 3,620 55,350 Brooks Automation, Inc.*+ 4,122 54,946 Sanmina-SCI Corp.* 12,750 54,697 Symmetricom, Inc.* 6,832 52,880 Kronos, Inc./MA* 1,152 51,425 Comtech Telecommunications Corp.* 1,210 50,179 Digital Insight Corp.* 1,910 49,775 Digi International, Inc.* 4,340 46,568 Dionex Corp.* 801 43,454 Keane, Inc.*+ 3,500 40,005 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Mantech International Corp. -- Class A* 1,360 $ 35,918 Total System Services, Inc. 1,520 35,431 Tellabs, Inc.* 3,100 32,612 Netgear, Inc.* 1,210 29,113 Akamai Technologies, Inc.* 890 14,196 Red Hat, Inc.*+ 550 11,655 ------------ TOTAL COMMON STOCKS (Cost $33,458,565) 40,706,030 ------------ FACE AMOUNT ---------- REPURCHASE AGREEMENT 0.8% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 332,559 332,559 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $332,559) 332,559 ------------ SECURITIES LENDING COLLATERAL 19.6% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 8,009,141 8,009,141 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $8,009,141) 8,009,141 ------------ TOTAL INVESTMENTS 120.2% (Cost $41,800,265) $ 49,047,730 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (20.2)% $ (8,232,166) ============ NET ASSETS - 100.0% $ 40,815,564 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. 42 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- TELECOMMUNICATIONS FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.5% Cisco Systems, Inc.* 45,337 $ 812,892 Vodafone Group PLC -- SP ADR+ 30,369 788,683 Qualcomm, Inc. 13,414 600,276 Nokia OYJ -- SP ADR+ 32,774 554,208 Motorola, Inc.+ 23,769 525,057 Sprint Nextel Corp. 18,902 449,490 Telefonaktiebolaget LM Ericsson -- SP ADR*+ 12,091 445,432 Alltel Corp.+ 6,745 439,167 Verizon Communications, Inc. 12,858 420,328 SBC Communications, Inc.+ 16,108 386,109 Corning, Inc.* 19,841 383,527 Juniper Networks, Inc.*+ 11,010 261,928 AT&T Corp.+ 13,224 261,835 BellSouth Corp.+ 9,780 257,214 Lucent Technologies, Inc.*+ 72,143 234,465 PanAmSat Holding Corp. 9,250 223,850 Qwest Communications International, Inc.* 50,909 208,727 Telewest Global, Inc.* 8,300 190,485 Alcatel SA -- SP ADR*+ 13,706 183,935 NII Holdings, Inc. -- Class B* 2,176 183,763 Harris Corp. 4,376 182,917 American Tower Corp. -- Class A*+ 7,284 181,736 MCI, Inc. 7,160 181,649 Nextel Partners, Inc. -- Class A* 6,988 175,399 Comverse Technology, Inc.*+ 6,468 169,914 Scientific-Atlanta, Inc.+ 4,355 163,356 Avaya, Inc.* 14,848 152,934 Citizens Communications Co.+ 10,510 142,410 Cincinnati Bell, Inc.* 29,730 131,109 ADC Telecommunications, Inc.*+ 5,640 128,930 Powerwave Technologies, Inc.*+ 9,627 125,055 Tellabs, Inc.* 11,720 123,294 Alamosa Holdings, Inc.*+ 6,950 118,914 Avocent Corp.*+ 3,456 109,348 Belden CDT, Inc.+ 5,406 105,039 Commonwealth Telephone Enterprises, Inc. 2,715 102,355 ViaSat, Inc.* 3,871 99,291 JDS Uniphase Corp.*+ 44,689 99,210 ADTRAN, Inc. 3,060 96,390 CenturyTel, Inc.+ 2,658 92,977 U.S. Cellular Corp.* 1,719 91,829 F5 Networks, Inc.*+ 1,980 86,071 Crown Castle International Corp.* 3,494 86,057 CIENA Corp.* 28,409 75,000 Andrew Corp.* 5,738 63,979 Symmetricom, Inc.* 8,255 63,894 Black Box Corp.+ 1,429 59,961 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Netgear, Inc.* 2,420 $ 58,225 3Com Corp.*+ 14,111 57,573 Plantronics, Inc. 1,820 56,074 General Communication, Inc. -- Class A*+ 5,283 52,302 Polycom, Inc.* 3,195 51,663 Utstarcom, Inc.*+ 5,831 47,639 Digi International, Inc.* 3,961 42,502 Harmonic, Inc.* 6,469 37,650 Inter-Tel, Inc. 1,654 34,734 Ditech Communications Corp.* 4,091 27,573 Tollgrade Communications, Inc.* 3,010 25,465 PC-Tel, Inc.* 2,675 25,145 America Movil SA de CV -- SP ADR 560 14,739 Comtech Telecommunications Corp.* 340 14,100 SK Telecom Co., Ltd. -- SP ADR 560 12,230 KT Corp. -- SP ADR 540 12,150 Tele Norte Leste Participacoes SA -- ADR 730 12,067 Golden Telecom, Inc.+ 380 11,997 UbiquiTel, Inc.* 1,340 11,712 Talk America Holdings, Inc.* 1,230 11,599 Deutsche Telekom AG -- SP ADR 560 10,214 Premiere Global Services, Inc.* 1,210 9,898 Telesystem International Wireless, Inc.* 700 616 ------------ TOTAL COMMON STOCKS (Cost $8,396,041) 11,658,256 ------------ THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 43 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- TELECOMMUNICATIONS FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 1.4% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 164,082 $ 164,082 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $164,082) 164,082 ------------ SECURITIES LENDING COLLATERAL 22.5% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 2,631,466 2,631,466 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $2,631,466) 2,631,466 ------------ TOTAL INVESTMENTS 123.4% (Cost $11,191,589) $ 14,453,804 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (23.4)% $ (2,741,947) ============ NET ASSETS - 100.0% $ 11,711,857 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 44 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- TRANSPORTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.5% United Parcel Service, Inc. -- Class B 23,665 $ 1,635,961 Burlington Northern Santa Fe Corp. 24,617 1,472,097 Norfolk Southern Corp. 34,788 1,411,001 FedEx Corp.+ 12,624 1,099,929 Union Pacific Corp. 14,351 1,028,967 C.H. Robinson Worldwide, Inc.+ 13,247 849,398 CSX Corp. 16,367 760,738 CNF, Inc. 13,292 697,830 Southwest Airlines Co. 40,294 598,366 Landstar System, Inc. 14,056 562,662 Yellow Roadway Corp.*+ 12,818 530,922 Expeditors International Washington, Inc.+ 6,941 394,110 Forward Air Corp. 10,044 370,021 Alexander & Baldwin, Inc. 6,849 364,641 Laidlaw International, Inc. 14,083 340,386 AMR Corp.*+ 30,435 340,263 Alaska Air Group, Inc.*+ 11,605 337,241 Kirby Corp.* 5,530 273,348 SkyWest, Inc. 10,178 272,974 Canadian National Railway Co. 3,747 266,000 EGL, Inc.* 9,434 256,133 ABX Air, Inc.* 29,930 245,426 Arkansas Best Corp.+ 6,809 237,430 J.B. Hunt Transport Services, Inc.+ 11,590 220,326 Heartland Express, Inc.+ 10,437 212,289 Frontier Airlines, Inc.* 21,496 210,231 Kansas City Southern* 8,936 208,298 Ryder System, Inc. 5,632 192,727 Swift Transportation Co., Inc.* 9,280 164,256 Mesa Air Group, Inc.*+ 19,290 159,142 Knight Transportation, Inc. 6,067 147,792 Pinnacle Airlines Corp.* 18,570 120,705 CP Ships Ltd. 5,410 115,395 Old Dominion Freight Line, Inc.* 3,229 108,139 Continental Airlines, Inc. -- Class B*+ 8,649 83,549 JetBlue Airways Corp.*+ 4,424 77,862 HUB Group, Inc. -- Class A* 1,837 67,436 World Air Holdings, Inc.* 5,050 53,530 Canadian Pacific Railway Ltd. 1,203 51,681 Ryanair Holdings PLC -- SP ADR* 783 35,650 Werner Enterprises, Inc. 2,032 35,133 AirTran Holdings, Inc.* 2,444 30,941 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Gol Linhas Aereas Inteligentes SA -- SP ADR+ 866 $ 28,102 USA Truck, Inc.* 895 22,644 Sirva, Inc.* 1,654 12,339 Pacer International, Inc. 180 4,745 ------------ TOTAL COMMON STOCKS (Cost $14,080,263) 16,708,756 ------------ FACE AMOUNT -------- REPURCHASE AGREEMENT 0.9% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $152,061 152,061 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $152,061) 152,061 ------------ SECURITIES LENDING COLLATERAL 5.7% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 956,441 956,441 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $956,441) 956,441 ------------ TOTAL INVESTMENTS 106.1% (Cost $15,188,765) $ 17,817,258 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (6.1)% $ (1,030,834) ============ NET ASSETS - 100.0% $ 16,786,424 * Non-Income Producing Security. + All or a portion of this security is on loan at September 30, 2005 - See Note 8. ADR--AMERICAN DEPOSITORY RECEIPT. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 45 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- UTILITIES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 99.4% TXU Corp.+ 21,380 $ 2,413,374 Exelon Corp.+ 44,585 2,382,622 American Electric Power Co., Inc.+ 56,664 2,249,561 Southern Co.+ 62,324 2,228,706 Duke Energy Corp.+ 74,899 2,184,804 Dominion Resources, Inc./VA+ 25,192 2,170,039 Edison International 38,294 1,810,540 FirstEnergy Corp.+ 34,377 1,791,729 Entergy Corp. 22,993 1,708,840 FPL Group, Inc.+ 35,674 1,698,082 PG&E Corp.+ 41,589 1,632,368 Public Service Enterprise Group, Inc. 24,421 1,571,736 PPL Corp. 44,446 1,436,939 Ameren Corp.+ 26,245 1,403,845 Xcel Energy, Inc.+ 70,247 1,377,544 Sempra Energy 28,612 1,346,481 Constellation Energy Group, Inc. 21,845 1,345,652 AES Corp.*+ 78,941 1,297,001 Pinnacle West Capital Corp. 29,201 1,287,180 Questar Corp. 14,161 1,247,867 Consolidated Edison, Inc.+ 25,642 1,244,919 Cinergy Corp. 25,537 1,134,098 Nicor, Inc.+ 26,711 1,122,663 CenterPoint Energy, Inc.+ 72,967 1,085,019 DTE Energy Co.+ 22,969 1,053,358 Allegheny Energy, Inc.*+ 32,770 1,006,694 Pepco Holdings, Inc. 41,686 970,033 WPS Resources Corp.+ 16,750 968,150 Wisconsin Energy Corp. 23,800 950,096 Reliant Energy, Inc.*+ 61,507 949,668 NiSource, Inc.+ 38,163 925,453 CMS Energy Corp.*+ 55,280 909,356 Westar Energy, Inc.+ 37,592 907,095 Oneok, Inc.+ 26,578 904,184 TECO Energy, Inc.+ 49,072 884,277 Atmos Energy Corp. 31,061 877,473 MDU Resources Group, Inc. 23,757 846,937 Aqua America, Inc. 21,915 833,208 NSTAR+ 27,130 784,600 SCANA Corp. 18,350 775,104 Vectren Corp. 27,288 773,615 Energen Corp. 17,740 767,432 AGL Resources, Inc. 20,499 760,718 NorthWestern Corp. 24,790 748,410 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- UGI Corp. 26,052 $ 733,364 Duquesne Light Holdings, Inc.+ 42,465 730,823 NRG Energy, Inc.*+ 17,011 724,669 DPL, Inc.+ 25,709 714,710 Southern Union Co.* 27,615 711,639 Energy East Corp.+ 27,867 701,970 Cleco Corp. 29,418 693,676 Equitable Resources, Inc. 16,948 661,989 Northwest Natural Gas Co. 17,710 659,166 Sierra Pacific Resources*+ 44,014 653,608 Hawaiian Electric Industries, Inc. 21,614 602,598 OGE Energy Corp.+ 20,095 564,670 Black Hills Corp.+ 12,955 561,858 Southwest Gas Corp. 19,860 543,965 National Fuel Gas Co. 14,230 486,666 Puget Energy, Inc.+ 20,510 481,575 New Jersey Resources Corp. 10,385 477,502 WGL Holdings, Inc. 14,130 453,997 Avista Corp. 23,183 449,750 PNM Resources, Inc.+ 15,097 432,831 El Paso Electric Co.* 20,490 427,217 Unisource Energy Corp. 11,821 392,930 Aquila, Inc.* 98,588 390,409 Calpine Corp.*+ 142,449 368,943 Allete, Inc.+ 7,625 349,301 Dynegy, Inc. -- Class A*+ 71,380 336,200 Laclede Group, Inc. 10,053 326,622 IDACORP, Inc.+ 9,268 279,245 Alliant Energy Corp. 9,200 267,996 American States Water Co. 7,660 256,304 Progress Energy, Inc.+ 5,019 224,600 Green Mountain Power Corp. 5,220 171,895 Empire District Electric Co. 6,400 146,368 Northeast Utilities 7,100 141,645 KeySpan Corp. 3,740 137,557 South Jersey Industries, Inc. 2,900 84,506 Otter Tail Power Co. 2,716 84,033 Great Plains Energy, Inc. 2,461 73,609 SJW Corp. 900 43,452 UIL Holding Corp. 489 25,580 Connecticut Water Service, Inc. 1,025 25,338 EnergySouth, Inc. 636 17,547 ------------ TOTAL COMMON STOCKS (Cost $62,567,870) 73,379,793 ------------ 46 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- UTILITIES FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT 0.5% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 348,632 $ 348,632 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $348,632) 348,632 ------------ SECURITIES LENDING COLLATERAL 22.5% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 16,649,917 16,649,917 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $16,649,917) 16,649,917 ------------ TOTAL INVESTMENTS 122.4% (Cost $79,566,419) $ 90,378,342 ============ LIABILITIES IN EXCESS OF OTHER ASSETS - (22.4)% $(16,547,011) ============ NET ASSETS - 100.0% $ 73,831,331 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 47 STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) - -------------------------------------------------------------------------------- BASIC BIO- BANKING MATERIALS TECHNOLOGY COMMODITIES FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------ ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 15,569,131 $ 39,883,084 $ 187,993,022 $ 20,635,225 Segregated Cash with Broker -- -- -- 2,193,050 Receivable for Equity Index Swap Settlement (Note 1) -- -- -- 595,523 Receivable for Securities Sold (Note 1) 137,535 -- -- -- Receivable for Shares Purchased 1,205,517 1,138,670 1,417,955 1,341,045 Investment Income Receivable (Note 1) 16,324 38,534 11,305 5,581 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS 16,928,507 41,060,288 189,422,282 24,770,424 ============================================================================================================================== LIABILITIES Payable for Futures Contracts Settlement (Note 1) -- -- -- 21,000 Payable upon Return of Securities Loaned (Note 8) 1,499,704 4,044,558 24,705,453 -- Payable for Securities Purchased (Note 1) 964,453 728,083 -- -- Liability for Shares Redeemed 422,079 209,686 1,380,555 112,863 Investment Advisory Fees Payable (Note 3) 7,747 21,242 133,369 13,691 Transfer Agent and Administrative Fees Payable (Note 3) 2,279 6,248 39,226 4,564 Distribution and Service Fees Payable (Note 3) 825 3,021 6,071 1,856 Portfolio Accounting Fees Payable (Note 3) 911 2,499 15,690 1,825 Custody Fees Payable 219 644 4,045 438 Other Liabilities 1,153 3,015 19,173 2,203 - ------------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 2,899,370 5,018,996 26,303,582 158,440 ============================================================================================================================== NET ASSETS $ 14,029,137 $ 36,041,292 $ 163,118,700 $ 24,611,984 ============================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 57,779,495 $ 55,337,581 $ 313,717,649 $ 22,651,739 Undistributed Net Investment Income (Loss) 242,325 197,114 (950,312) 65,063 Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps and Futures Contracts (44,882,267) (23,948,685) (205,561,167) 1,019,009 Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 889,584 4,455,282 55,912,530 876,173 ============================================================================================================================== NET ASSETS $ 14,029,137 $ 36,041,292 $ 163,118,700 $ 24,611,984 ============================================================================================================================== Investor Class $ 9,927,034 $ 15,701,830 $ 124,936,097 N/A Advisor Class 1,692,249 9,003,370 30,913,649 N/A A-Class 29,134 249,620 750,132 $ 1,124,246 C-Class 2,380,720 11,086,472 6,518,822 2,268,489 H-Class N/A N/A N/A 21,219,249 SHARES OUTSTANDING Investor Class 972,875 527,904 5,773,621 N/A Advisor Class 173,803 312,481 1,489,396 N/A A-Class 2,987 8,636 36,072 35,446 C-Class 246,553 390,220 315,545 71,749 H-Class N/A N/A N/A 669,188 NET ASSET VALUES Investor Class $ 10.20 $ 29.74 $ 21.64 N/A Advisor Class 9.74 28.81 20.76 N/A A-Class 9.76 28.91 20.80 $ 31.72 A-Class Maximum Offering Price** 10.25 30.35 21.84 33.30 C-Class 9.66 28.41 20.66 31.62 H-Class N/A N/A N/A 31.71 * THE COST OF SECURITIES AT VALUE IS $14,679,547, $35,427,802, $132,080,492, $20,635,225, $24,133,864, $29,854,498, $176,853,490, $180,209,932, $26,302,984, $97,991,534, $12,268,718, AND $13,327,451, RESPECTIVELY. ** NET ASSET VALUE ADJUSTED FOR SALES CHARGE OF 4.75% OF OFFERING PRICE. 48 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. September 30, 2005 - -------------------------------------------------------------------------------- CONSUMER ENERGY PRODUCTS ELECTRONICS ENERGY SERVICES FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 27,535,290 $ 43,945,237 $236,329,460 $236,846,650 Segregated Cash with Broker -- -- -- -- Receivable for Equity Index Swap Settlement (Note 1) -- -- -- -- Receivable for Securities Sold (Note 1) -- -- 1,029,136 -- Receivable for Shares Purchased 159,749 1,065,474 6,428,395 1,670,842 Investment Income Receivable (Note 1) 58,167 1,864 66,248 60,481 - --------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 27,753,206 45,012,575 243,853,239 238,577,973 =========================================================================================================================== LIABILITIES Payable for Futures Contracts Settlement (Note 1) -- -- -- -- Payable upon Return of Securities Loaned (Note 8) 3,292,068 7,884,762 29,424,576 44,624,941 Payable for Securities Purchased (Note 1) -- 611,656 -- -- Liability for Shares Redeemed 72,860 405,290 8,114,761 2,332,199 Investment Advisory Fees Payable (Note 3) 20,498 32,599 140,762 135,529 Transfer Agent and Administrative Fees Payable (Note 3) 6,029 9,588 41,400 39,862 Distribution and Service Fees Payable (Note 3) 2,680 2,900 11,843 10,428 Portfolio Accounting Fees Payable (Note 3) 2,412 3,835 16,560 15,945 Custody Fees Payable 585 986 4,804 4,158 Other Liabilities 2,990 4,684 20,250 19,384 - --------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 3,400,122 8,956,300 37,774,956 47,182,446 =========================================================================================================================== NET ASSETS $ 24,353,084 $ 36,056,275 $206,078,283 $191,395,527 =========================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 38,555,683 $191,674,037 $147,649,571 $213,767,749 Undistributed Net Investment Income (Loss) 204,486 (280,327) 174,756 (737,818) Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps and Futures Contracts (17,808,511) (169,428,174) (1,222,014) (78,271,122) Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 3,401,426 14,090,739 59,475,970 56,636,718 =========================================================================================================================== NET ASSETS $ 24,353,084 $ 36,056,275 $206,078,283 $191,395,527 =========================================================================================================================== Investor Class $ 6,018,602 $ 16,669,089 $139,369,646 $134,073,766 Advisor Class 15,027,828 16,217,483 32,816,569 33,566,758 A-Class 1,133,714 680,259 7,175,384 2,306,765 C-Class 2,172,940 2,489,444 26,716,684 21,448,238 H-Class N/A N/A N/A N/A SHARES OUTSTANDING Investor Class 194,363 1,434,187 6,436,051 3,457,224 Advisor Class 501,207 1,450,213 1,562,418 894,881 A-Class 37,723 60,683 340,752 61,296 C-Class 73,272 224,245 1,289,716 577,577 H-Class N/A N/A N/A N/A NET ASSET VALUES Investor Class $ 30.97 $ 11.62 $ 21.65 $ 38.78 Advisor Class 29.98 11.18 21.00 37.51 A-Class 30.05 11.21 21.06 37.63 A-Class Maximum Offering Price** 31.55 11.77 22.11 39.51 C-Class 29.66 11.10 20.72 37.13 H-Class N/A N/A N/A N/A FINANCIAL HEALTH SERVICES CARE INTERNET LEISURE FUND FUND FUND FUND - -------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 27,592,375 $110,636,696 $ 14,700,572 $ 15,335,261 Segregated Cash with Broker -- -- -- -- Receivable for Equity Index Swap Settlement (Note 1) -- -- -- -- Receivable for Securities Sold (Note 1) 1,827,055 705,781 28,703 2,845,159 Receivable for Shares Purchased 199,946 97,709 5,967,523 169,123 Investment Income Receivable (Note 1) 49,328 23,404 26 4,786 - -------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 29,668,704 111,463,590 20,696,824 18,354,329 ========================================================================================================================== LIABILITIES Payable for Futures Contracts Settlement (Note 1) -- -- -- -- Payable upon Return of Securities Loaned (Note 8) 4,587,778 17,121,943 1,299,546 1,556,276 Payable for Securities Purchased (Note 1) -- -- 5,894,040 -- Liability for Shares Redeemed 2,193,892 831,502 95,312 3,051,786 Investment Advisory Fees Payable (Note 3) 18,386 71,173 6,609 10,234 Transfer Agent and Administrative Fees Payable (Note 3) 5,408 20,933 1,944 3,010 Distribution and Service Fees Payable (Note 3) 2,568 5,094 675 1,455 Portfolio Accounting Fees Payable (Note 3) 2,163 8,373 777 1,204 Custody Fees Payable 565 2,010 193 289 Other Liabilities 2,679 10,392 1,014 1,538 - -------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 6,813,439 18,071,420 7,300,110 4,625,792 ========================================================================================================================== NET ASSETS $ 22,855,265 $ 93,392,170 $ 13,396,714 $ 13,728,537 ========================================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 66,522,847 $117,285,327 $ 50,014,786 $ 32,439,270 Undistributed Net Investment Income (Loss) 381,209 (278,066) (100,347) (176,630) Accumulated Net Realized Gain (Loss) on Investments, Equity Index Swaps and Futures Contracts (45,338,182) (36,260,253) (38,949,579) (20,541,913) Net Unrealized Appreciation (Depreciation) on Investments, Equity Index Swaps, and Futures Contracts 1,289,391 12,645,162 2,431,854 2,007,810 ========================================================================================================================== NET ASSETS $ 22,855,265 $ 93,392,170 $ 13,396,714 $ 13,728,537 ========================================================================================================================== Investor Class $ 6,065,655 $ 63,243,211 $ 8,762,142 $ 3,978,281 Advisor Class 14,161,240 22,506,029 2,859,825 8,795,640 A-Class 478,643 657,401 86,728 18,169 C-Class 2,149,727 6,985,529 1,688,019 936,447 H-Class N/A N/A N/A N/A SHARES OUTSTANDING Investor Class 501,044 4,566,653 242,048 139,111 Advisor Class 1,201,223 1,689,916 81,401 320,637 A-Class 40,543 49,299 2,463 662 C-Class 184,782 529,016 48,718 34,165 H-Class N/A N/A N/A N/A NET ASSET VALUES Investor Class $ 12.11 $ 13.85 $ 36.20 $ 28.60 Advisor Class 11.79 13.32 35.13 27.43 A-Class 11.81 13.33 35.21 27.47 A-Class Maximum Offering Price** 12.40 13.99 36.97 28.84 C-Class 11.63 13.20 34.65 27.41 H-Class N/A N/A N/A N/A THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 49 STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- PRECIOUS REAL METALS ESTATE RETAILING TECHNOLOGY FUND FUND FUND FUND - ----------------------------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 294,864,281 $ 30,036,575 $ 18,027,393 $ 49,047,730 Cash in Custodian Bank -- -- -- -- Receivable for Securities Sold (Note 1) 23,825,284 189,390 2,041,455 -- Receivable for Shares Purchased 1,757,127 3,093,783 11,668 14,718 Investment Income Receivable (Note 1) -- 88,353 7,495 7,110 - ----------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 320,446,692 33,408,101 20,088,011 49,069,558 ============================================================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 63,821,777 2,151,769 3,361,109 8,009,141 Payable for Securities Purchased (Note 1) 14,362,583 343,774 -- -- Liability for Shares Redeemed 7,341,091 2,933,656 2,088,522 192,261 Investment Advisory Fees Payable (Note 3) 136,378 20,082 13,219 30,946 Transfer Agent and Administrative Fees Payable (Note 3) 45,459 5,906 3,888 9,102 Distribution and Service Fees Payable (Note 3) 7,131 2,321 1,475 3,618 Portfolio Accounting Fees Payable (Note 3) 18,184 2,363 1,555 3,641 Custody Fees Payable 4,378 802 417 874 Cash Payable to Custodian Bank 385,584 -- -- -- Other Liabilities 25,093 2,959 1,823 4,411 - ----------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 86,147,658 5,463,632 5,472,008 8,253,994 ============================================================================================================================= NET ASSETS $ 234,299,034 $ 27,944,469 $ 14,616,003 $ 40,815,564 ============================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 258,918,558 $ 26,318,480 $ 49,790,060 $ 117,969,662 Undistributed Net Investment Income (Loss) (186,602) 379,122 (123,625) (79,740) Accumulated Net Realized Gain (Loss) on Investments (106,278,913) (1,927,184) (38,059,324) (84,321,823) Net Unrealized Appreciation (Depreciation) on Investments 81,845,991 3,174,051 3,008,892 7,247,465 ============================================================================================================================= NET ASSETS $ 234,299,034 $ 27,944,469 $ 14,616,003 $ 40,815,564 ============================================================================================================================= Investor Class $ 201,252,047 N/A $ 6,463,583 $ 16,198,825 Advisor Class 8,929,344 N/A 5,563,750 20,863,324 A-Class 1,899,737 $ 233,093 144,812 883,764 C-Class 22,217,906 3,941,939 2,443,858 2,869,651 H-Class N/A 23,769,437 N/A N/A SHARES OUTSTANDING Investor Class 4,861,640 N/A 536,686 1,426,398 Advisor Class 217,847 N/A 475,031 1,895,413 A-Class 46,237 7,258 12,350 80,201 C-Class 559,430 124,110 212,505 262,771 H-Class N/A 739,833 N/A N/A NET ASSET VALUES Investor Class $ 41.40 N/A $ 12.04 $ 11.36 Advisor Class 40.99 N/A 11.71 11.01 A-Class 41.09 $ 32.11 11.73 11.02 A-Class Maximum Offering Price** 43.14 33.71 12.31 11.57 C-Class 39.72 31.76 11.50 10.92 H-Class N/A 32.13 N/A N/A * THE COST OF SECURITIES AT VALUE IS $213,018,290, $26,862,524, $15,018,501, $41,800,265, $11,191,589, $15,188,765, AND $79,566,419, RESPECTIVELY. ** NET ASSET VALUE ADJUSTED FOR SALES CHARGE OF 4.75% OF OFFERING PRICE. 50 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. September 30, 2005 - -------------------------------------------------------------------------------- TELECOM- MUNICATIONS TRANSPORTATION UTILITIES FUND FUND FUND - ----------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $ 14,453,804 $ 17,817,258 $ 90,378,342 Cash in Custodian Bank 86 -- -- Receivable for Securities Sold (Note 1) 355,403 112,127 2,394,561 Receivable for Shares Purchased 266,630 3,023,184 3,302,369 Investment Income Receivable (Note 1) 9,013 10,968 154,457 - ----------------------------------------------------------------------------------------------------------- TOTAL ASSETS 15,084,936 20,963,537 96,229,729 =========================================================================================================== LIABILITIES Payable upon Return of Securities Loaned (Note 8) 2,631,466 956,441 16,649,917 Payable for Securities Purchased (Note 1) -- 2,937,383 -- Liability for Shares Redeemed 726,325 269,072 5,660,706 Investment Advisory Fees Payable (Note 3) 9,082 8,540 52,390 Transfer Agent and Administrative Fees Payable (Note 3) 2,671 2,512 15,409 Distribution and Service Fees Payable (Note 3) 845 638 4,585 Portfolio Accounting Fees Payable (Note 3) 1,069 1,005 6,164 Custody Fees Payable 289 241 1,479 Cash Payable to Custodian Bank -- -- -- Other Liabilities 1,332 1,281 7,748 - ----------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 3,373,079 4,177,113 22,398,398 =========================================================================================================== NET ASSETS $ 11,711,857 $ 16,786,424 $ 73,831,331 =========================================================================================================== NET ASSETS CONSIST OF Paid-In Capital $ 50,088,612 $ 35,495,993 $ 73,152,872 Undistributed Net Investment Income (Loss) 205,980 (36,343) 757,249 Accumulated Net Realized Gain (Loss) on Investments (41,844,950) (21,301,719) (10,890,713) Net Unrealized Appreciation (Depreciation) on Investments 3,262,215 2,628,493 10,811,923 =========================================================================================================== NET ASSETS $ 11,711,857 $ 16,786,424 $ 73,831,331 =========================================================================================================== Investor Class $ 6,638,552 $ 11,638,793 $ 47,720,347 Advisor Class 3,145,194 4,175,692 14,540,504 A-Class 2,483 178,798 2,040,974 C-Class 1,925,628 793,141 9,529,506 H-Class N/A N/A N/A SHARES OUTSTANDING Investor Class 408,859 512,315 1,751,263 Advisor Class 200,089 193,927 550,096 A-Class 158 8,280 77,019 C-Class 123,619 36,229 369,543 H-Class N/A N/A N/A NET ASSET VALUES Investor Class $ 16.24 $ 22.72 $ 27.25 Advisor Class 15.72 21.53 26.43 A-Class 15.74 21.60 26.50 A-Class Maximum Offering Price** 16.52 22.68 27.82 C-Class 15.58 21.89 25.79 H-Class N/A N/A N/A THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 51 STATEMENTS OF OPERATIONS (UNAUDITED) - -------------------------------------------------------------------------------- BASIC BIO- BANKING MATERIALS TECHNOLOGY COMMODITIES FUND FUND FUND FUND*** - -------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 803 $ 1,748 $ 13,019 $ 122,992 Interest from Securities Lending, net (Note 8) 391 2,846 21,258 -- Dividends, Net of Foreign Tax Withheld* (Note 1) 155,879 310,136 20,438 -- Other Income -- -- -- -- - -------------------------------------------------------------------------------------------------------------------------- TOTAL INCOME 157,073 314,730 54,715 122,992 - -------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 3) 46,281 140,795 606,586 27,688 Transfer Agent and Administrative Fees (Note 3) 13,612 41,410 178,408 9,229 Distribution & Service Fees (Note 3): Advisor Class 6,599 17,250 45,647 -- A-Class 39 229 627 324 C-Class 7,242 26,328 25,465 4,045 H-Class -- -- -- 7,894 Portfolio Accounting Fees (Note 3) 5,445 16,564 71,363 3,692 Registration Fees 3,074 5,846 22,023 261 Trustees' Fees** 291 708 2,819 47 Miscellaneous 1,941 9,770 52,089 4,749 - -------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 84,524 258,900 1,005,027 57,929 - -------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 72,549 55,830 (950,312) 65,063 ========================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (445,718) (1,383,039) (756,484) -- Equity Index Swaps -- -- -- 848,567 Futures Contracts -- -- -- 170,442 - -------------------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED GAIN (LOSS) (445,718) (1,383,039) (756,484) 1,019,009 - -------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 327,859 (1,402,988) 28,602,132 -- Equity Index Swaps -- -- -- 821,551 Futures Contracts -- -- -- 54,622 - -------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 327,859 (1,402,988) 28,602,132 876,173 - -------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments (117,859) (2,786,027) 27,845,648 1,895,182 - -------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (45,310) $ (2,730,197) $ 26,895,336 $ 1,960,245 ========================================================================================================================== * NET OF FOREIGN TAX WITHHELD OF $1,113, $2,443, $0, $0, $272, $511, $50,737, $0, $5,882, $1,413, $0, AND $0, RESPECTIVELY. ** RELATES TO TRUSTEES NOT DEEMED "INTERESTED PERSONS" WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT. *** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 25, 2005. 52 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. Period Ended September 30, 2005 - -------------------------------------------------------------------------------- CONSUMER ENERGY PRODUCTS ELECTRONICS ENERGY SERVICES FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 2,878 $ 4,776 $ 14,554 $ 14,441 Interest from Securities Lending, net (Note 8) 2,077 4,021 56,062 8,984 Dividends, Net of Foreign Tax Withheld* (Note 1) 387,530 93,104 1,125,564 277,414 Other Income -- 2,758 -- -- - --------------------------------------------------------------------------------------------------------------------------- TOTAL INCOME 392,485 104,659 1,196,180 300,839 - --------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 3) 175,759 218,488 723,717 583,788 Transfer Agent and Administrative Fees (Note 3) 51,694 64,261 212,858 171,702 Distribution & Service Fees (Note 3): Advisor Class 55,748 38,679 62,046 66,982 A-Class 1,230 16 3,899 979 C-Class 23,523 11,447 115,837 71,745 H-Class -- -- -- -- Portfolio Accounting Fees (Note 3) 20,678 25,704 85,143 68,681 Registration Fees 6,853 9,624 29,711 15,324 Trustees' Fees** 779 1,126 3,575 2,304 Miscellaneous 11,032 15,641 55,877 57,152 - --------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 347,296 384,986 1,292,663 1,038,657 - --------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 45,189 (280,327) (96,483) (737,818) =========================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 183,603 1,445,133 11,876,170 2,708,954 Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED GAIN (LOSS) 183,603 1,445,133 11,876,170 2,708,954 - --------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities (518,215) 3,707,819 25,052,478 30,722,220 Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - --------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) (518,215) 3,707,819 25,052,478 30,722,220 - --------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments (334,612) 5,152,952 36,928,648 33,431,174 - --------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (289,423) $ 4,872,625 $ 36,832,165 $ 32,693,356 =========================================================================================================================== FINANCIAL HEALTH SERVICES CARE INTERNET LEISURE FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 2,581 $ 10,039 $ 1,389 $ 2,348 Interest from Securities Lending, net (Note 8) 9,662 5,071 3,500 14,780 Dividends, Net of Foreign Tax Withheld* (Note 1) 452,529 480,906 14,764 70,201 Other Income -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- TOTAL INCOME 464,772 496,016 19,653 87,329 - ------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 3) 153,770 448,024 67,929 132,167 Transfer Agent and Administrative Fees (Note 3) 45,226 131,772 19,979 38,873 Distribution & Service Fees (Note 3): Advisor Class 63,493 52,625 7,544 53,382 A-Class 446 559 81 17 C-Class 12,800 36,437 9,274 10,563 H-Class -- -- -- -- Portfolio Accounting Fees (Note 3) 18,091 52,719 7,992 15,549 Registration Fees 8,518 14,319 2,530 6,048 Trustees' Fees** 971 1,777 257 711 Miscellaneous 8,260 35,850 4,414 6,649 - ------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 311,575 774,082 120,000 263,959 - ------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 153,197 (278,066) (100,347) (176,630) ========================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 1,195,786 2,767,214 325,562 (232,251) Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED GAIN (LOSS) 1,195,786 2,767,214 325,562 (232,251) - ------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 1,165,472 4,212,059 123,566 (1,270,809) Equity Index Swaps -- -- -- -- Futures Contracts -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 1,165,472 4,212,059 123,566 (1,270,809) - ------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 2,361,258 6,979,273 449,128 (1,503,060) - ------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 2,514,455 $ 6,701,207 $ 348,781 $ (1,679,690) ========================================================================================================================= THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 53 STATEMENTS OF OPERATIONS (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- PRECIOUS REAL METALS ESTATE RETAILING TECHNOLOGY FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 15,170 $ 3,235 $ 2,265 $ 4,079 Interest from Securities Lending, net (Note 8) 102,631 9,930 2,633 1,766 Dividends, Net of Foreign Tax Withheld* (Note 1) 911,957 693,290 85,756 75,537 Other Income -- -- 458 38,177 - ------------------------------------------------------------------------------------------------------------------------------- TOTAL INCOME 1,029,758 706,455 91,112 119,559 - ------------------------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 3) 687,373 173,602 114,010 182,331 Transfer Agent and Administrative Fees (Note 3) 229,125 51,060 33,532 53,627 Distribution & Service Fees (Note 3): Advisor Class 18,034 -- 26,393 41,808 A-Class 770 626 115 65 C-Class 94,538 13,767 13,801 11,118 H-Class -- 46,991 -- -- Portfolio Accounting Fees (Note 3) 91,650 20,424 13,413 21,451 Registration Fees 29,743 6,395 4,218 8,538 Trustees' Fees** 3,531 976 592 958 Miscellaneous 61,596 13,492 8,663 12,065 - ------------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 1,216,360 327,333 214,737 331,961 - ------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (186,602) 379,122 (123,625) (212,402) =============================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities (9,300,468) 892,941 (522,410) 339,252 - ------------------------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) (9,300,468) 892,941 (522,410) 339,252 - ------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 39,852,116 1,789,164 (272,237) 2,179,806 - ------------------------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 39,852,116 1,789,164 (272,237) 2,179,806 - ------------------------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 30,551,648 2,682,105 (794,647) 2,519,058 - ------------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 30,365,046 $ 3,061,227 $ (918,272) $ 2,306,656 =============================================================================================================================== * NET OF FOREIGN TAX WITHHELD OF $30,014, $0, $0, $0, $5,992, $230, AND $0, RESPECTIVELY. ** RELATES TO TRUSTEES NOT DEEMED "INTERESTED PERSONS" WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT. 54 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. Period Ended September 30, 2005 - -------------------------------------------------------------------------------- TELECOM- MUNICATIONS TRANSPORTATION UTILITIES FUND FUND FUND - ------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 1,026 $ 990 $ 5,851 Interest from Securities Lending, net (Note 8) 3,119 7,525 13,437 Dividends, Net of Foreign Tax Withheld* (Note 1) 203,171 49,159 1,037,335 Other Income 39,894 -- 6,325 - ------------------------------------------------------------------------------------------------------------- TOTAL INCOME 247,210 57,674 1,062,948 - ------------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 3) 64,473 52,106 274,334 Transfer Agent and Administrative Fees (Note 3) 18,963 15,325 80,686 Distribution & Service Fees (Note 3): Advisor Class 6,921 9,633 28,889 A-Class 2 145 1,364 C-Class 8,360 4,397 40,513 H-Class -- -- -- Portfolio Accounting Fees (Note 3) 7,585 6,130 32,274 Registration Fees 6,137 3,630 7,978 Trustees' Fees** 551 378 1,187 Miscellaneous 602 2,273 23,491 - ------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 113,594 94,017 490,716 - ------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 133,616 (36,343) 572,232 ============================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 767,629 487,117 277,062 - ------------------------------------------------------------------------------------------------------------- Total Net Realized Gain (Loss) 767,629 487,117 277,062 - ------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 448,670 (998,759) 7,513,537 - ------------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) 448,670 (998,759) 7,513,537 - ------------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments 1,216,299 (511,642) 7,790,599 - ------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ 1,349,915 $ (547,985) $ 8,362,831 ============================================================================================================= THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 55 STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- BASIC BANKING FUND MATERIALS FUND - --------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 72,549 $ 169,847 $ 55,830 $ 138,172 Net Realized Gain (Loss) on Investments (445,718) 2,175,903 (1,383,039) 1,098,535 Net Change in Unrealized Appreciation (Depreciation) on Investments 327,859 (1,571,784) (1,402,988) 2,081,456 - --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (45,310) 773,966 (2,730,197) 3,318,163 - --------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- (154,276) -- -- Advisor Class -- (119,014) -- -- A-Class -- (753) -- -- C-Class -- (20,423) -- -- H-Class -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (294,466) -- -- ===================================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 115,171,039 241,217,426 138,285,794 418,066,714 Advisor Class 11,774,655 75,431,191 22,466,053 92,089,560 A-Class* 51,260 35,445 223,390 606,462 C-Class 4,806,464 20,785,926 11,923,877 43,781,179 H-Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- 143,776 -- -- Advisor Class -- 115,466 -- -- A-Class* -- 753 -- -- C-Class -- 19,988 -- -- H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (110,171,458) (249,711,598) (154,908,673) (415,397,485) Advisor Class (13,023,744) (76,041,820) (25,800,985) (93,440,891) A-Class* (37,207) (20,464) (170,099) (422,793) C-Class (3,233,349) (21,764,204) (7,905,290) (42,485,938) H-Class -- -- -- -- ===================================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 5,337,660 (9,788,115) (15,885,933) 2,796,808 - --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 5,292,350 (9,308,615) (18,616,130) 6,114,971 - --------------------------------------------------------------------------------------------------------------------- NET ASSETS--BEGINNING OF PERIOD 8,736,787 18,045,402 54,657,422 48,542,451 - --------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 14,029,137 $ 8,736,787 $ 36,041,292 $ 54,657,422 ===================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 242,325 $ 169,776 $ 197,114 $ 141,284 ===================================================================================================================== BIOTECHNOLOGY FUND - -------------------------------------------------------------------------------- PERIOD PERIOD ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - -------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (950,312) $ (1,768,522) Net Realized Gain (Loss) on Investments (756,484) (1,123,615) Net Change in Unrealized Appreciation (Depreciation) on Investments 28,602,132 (21,683,061) - -------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 26,895,336 (24,575,198) - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- - -------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- ================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 299,238,106 939,296,748 Advisor Class 60,928,406 56,552,141 A-Class* 911,577 103,417 C-Class 14,843,610 30,771,978 H-Class -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- Advisor Class -- -- A-Class* -- -- C-Class -- -- H-Class -- -- COST OF SHARES REDEEMED Investor Class (272,493,384) (980,867,566) Advisor Class (42,848,819) (54,810,712) A-Class* (323,484) (22,836) C-Class (11,853,255) (30,522,525) H-Class -- -- ================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 48,402,757 (39,499,355) - -------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 75,298,093 (64,074,553) - -------------------------------------------------------------------------------- NET ASSETS--BEGINNING OF PERIOD 87,820,607 151,895,160 - -------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 163,118,700 $ 87,820,607 ================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (950,312) $ -- ================================================================================ * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. ** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 25, 2005 - COMMODITIES FUND A-CLASS, C-CLASS, AND H-CLASS. + UNAUDITED 56 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. COMMODITIES CONSUMER FUND PRODUCTS FUND - --------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD ENDED ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, MARCH 31, 2005+** 2005+ 2005 - --------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 65,063 $ 45,189 $ 159,299 Net Realized Gain (Loss) on Investments 1,019,009 183,603 (2,351,007) Net Change in Unrealized Appreciation (Depreciation) on Investments 876,173 (518,215) 215,950 - --------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 1,960,245 (289,423) (1,975,758) - --------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- (3,974) Advisor Class -- -- (6,521) A-Class -- -- (12) C-Class -- -- (2,810) H-Class -- -- -- - --------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- (13,317) =================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class -- 71,158,631 345,364,944 Advisor Class -- 14,864,707 124,365,818 A-Class* 1,299,111 752,048 479,054 C-Class 3,551,575 65,556,226 57,863,269 H-Class 60,308,150 -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- 3,756 Advisor Class -- -- 6,407 A-Class* -- -- 12 C-Class -- -- 2,134 H-Class -- -- -- COST OF SHARES REDEEMED Investor Class -- (80,388,650) (351,675,844) Advisor Class -- (26,991,480) (110,487,986) A-Class* (268,383) (98,840) (18,752) C-Class (1,486,597) (71,042,790) (54,257,308) H-Class (40,752,117) -- -- =================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 22,651,739 (26,190,148) 11,645,504 - --------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 24,611,984 (26,479,571) 9,656,429 - --------------------------------------------------------------------------------------------------- NET ASSETS--BEGINNING OF PERIOD -- 50,832,655 41,176,226 - --------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 24,611,984 $ 24,353,084 $ 50,832,655 =================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 65,063 $ 204,486 $ 159,297 =================================================================================================== ELECTRONICS ENERGY FUND FUND - -------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - -------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (280,327) $ (384,665) $ (96,483) $ 317,744 Net Realized Gain (Loss) on Investments 1,445,133 (3,257,590) 11,876,170 9,188,986 Net Change in Unrealized Appreciation (Depreciation) on Investments 3,707,819 (7,619,836) 25,052,478 25,563,323 - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 4,872,625 (11,262,091) 36,832,165 35,070,053 - -------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- (34,949) Advisor Class -- -- -- (7,337) A-Class -- -- -- (35) C-Class -- -- -- (4,183) H-Class -- -- -- -- - -------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- (46,504) ==================================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 286,538,834 789,501,056 447,721,038 849,279,981 Advisor Class 34,437,328 57,354,167 53,236,525 116,768,117 A-Class* 795,546 2,522 10,917,325 1,228,359 C-Class 5,665,341 18,919,451 55,902,520 73,091,678 H-Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- 32,874 Advisor Class -- -- -- 7,117 A-Class* -- -- -- 35 C-Class -- -- -- 3,676 H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (300,159,667) (799,089,161) (445,534,576) (825,695,467) Advisor Class (32,394,457) (46,786,342) (50,688,659) (101,748,850) A-Class* (117,780) (1,672) (5,400,930) (550,655) C-Class (5,465,453) (17,405,528) (52,405,519) (65,208,344) H-Class -- -- -- -- ==================================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (10,700,308) 2,494,493 13,747,724 47,208,521 - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (5,827,683) (8,767,598) 50,579,889 82,232,070 - -------------------------------------------------------------------------------------------------------------------- NET ASSETS--BEGINNING OF PERIOD 41,883,958 50,651,556 155,498,394 73,266,324 - -------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 36,056,275 $ 41,883,958 $ 206,078,283 $ 155,498,394 ==================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (280,327) $ -- $ 174,756 $ 271,239 ==================================================================================================================== THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 57 STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) - -------------------------------------------------------------------------------- ENERGY SERVICES FINANCIAL SERVICES FUND FUND - ---------------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ---------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (737,818) $ (744,184) $ 153,197 $ 228,025 Net Realized Gain (Loss) on Investments 2,708,954 3,128,884 1,195,786 4,973,109 Net Change in Unrealized Appreciation (Depreciation) on Investments 30,722,220 14,572,251 1,165,472 (6,409,510) - ---------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 32,693,356 16,956,951 2,514,455 (1,208,376) - ---------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- (62,675) Advisor Class -- -- -- (191,382) A-Class -- -- -- (150) C-Class -- -- -- (13,028) H-Class -- -- -- -- Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- - ---------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- (267,235) ============================================================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 294,976,342 492,223,751 69,296,703 252,572,863 Advisor Class 61,173,188 116,589,502 21,290,928 84,180,268 A-Class* 2,373,267 832,467 447,538 36,285 C-Class 23,889,036 49,949,687 9,505,824 30,017,238 H-Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- 53,649 Advisor Class -- -- -- 188,379 A-Class* -- -- -- 150 C-Class -- -- -- 12,484 H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (283,267,299) (451,801,558) (71,255,999) (278,559,637) Advisor Class (58,508,082) (120,388,840) (36,230,321) (97,329,407) A-Class* (607,856) (517,996) (2,960) (32,298) C-Class (17,419,034) (43,230,251) (9,327,446) (30,597,571) H-Class -- -- -- -- ============================================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 22,609,562 43,656,762 (16,275,733) (39,457,597) - ---------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 55,302,918 60,613,713 (13,761,278) (40,933,208) NET ASSETS--BEGINNING OF PERIOD 136,092,609 75,478,896 36,616,543 77,549,751 - ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 191,395,527 $ 136,092,609 $ 22,855,265 $ 36,616,543 ============================================================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (737,818) $ -- $ 381,209 $ 228,012 ============================================================================================================================ HEALTH CARE FUND - ----------------------------------------------------------------------------------- PERIOD PERIOD ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - ----------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (278,066) $ (348,826) Net Realized Gain (Loss) on Investments 2,767,214 (3,249,304) Net Change in Unrealized Appreciation (Depreciation) on Investments 4,212,059 730,774 - ----------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 6,701,207 (2,867,356) - ----------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- Realized Gain on Investment Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- H-Class -- -- - ----------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- =================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 323,973,650 395,058,540 Advisor Class 43,540,661 78,074,909 A-Class* 896,205 28,151 C-Class 19,534,000 26,311,496 H-Class -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- Advisor Class -- -- A-Class* -- -- C-Class -- -- H-Class -- -- COST OF SHARES REDEEMED Investor Class (300,824,357) (377,619,512) Advisor Class (39,037,702) (87,657,299) A-Class* (265,631) (27,800) C-Class (17,155,586) (25,039,882) H-Class -- -- =================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 30,661,240 9,128,603 - ----------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 37,362,447 6,261,247 NET ASSETS--BEGINNING OF PERIOD 56,029,723 49,768,476 - ----------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 93,392,170 $ 56,029,723 =================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (278,066) $ -- =================================================================================== * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. + UNAUDITED 58 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. INTERNET LEISURE FUND FUND - ---------------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ---------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (100,347) $ (316,335) $ (176,630) $ (336,391) Net Realized Gain (Loss) on Investments 325,562 (2,195,060) (232,251) (1,226,024) Net Change in Unrealized Appreciation (Depreciation) on Investments 123,566 (3,701,725) (1,270,809) (431,887) - ---------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 348,781 (6,213,120) (1,679,690) (1,994,302) - ---------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- - ---------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- -- ============================================================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 125,882,934 491,707,297 58,222,725 332,169,247 Advisor Class 27,282,811 42,003,577 15,809,994 134,713,068 A-Class* 78,255 792,552 28,431 448,675 C-Class 4,122,656 16,336,597 7,518,345 47,880,936 H-Class -- -- -- -- VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class* -- -- -- -- C-Class -- -- -- -- H-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (122,235,889) (497,370,417) (68,609,093) (341,874,154) Advisor Class (25,506,836) (51,859,911) (34,010,009) (144,792,594) A-Class* (4,074) (845,031) (22,056) (431,485) C-Class (4,211,735) (15,849,814) (8,874,510) (47,759,570) H-Class -- -- -- -- ============================================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 5,408,122 (15,085,150) (29,936,173) (19,645,877) - ---------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 5,756,903 (21,298,270) (31,615,863) (21,640,179) NET ASSETS--BEGINNING OF PERIOD 7,639,811 28,938,081 45,344,400 66,984,579 - ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 13,396,714 $ 7,639,811 $ 13,728,537 $ 45,344,400 ============================================================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (100,347) $ -- $ (176,630) $ -- ============================================================================================================================ PRECIOUS REAL ESTATE METALS FUND FUND - --------------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - --------------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (186,602) $ (408,654) $ 379,122 $ 842,346 Net Realized Gain (Loss) on Investments (9,300,468) (19,196,131) 892,941 (286,860) Net Change in Unrealized Appreciation (Depreciation) on Investments 39,852,116 (41,721,258) 1,789,164 (195,704) - --------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 30,365,046 (61,326,043) 3,061,227 359,782 - --------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- (83) C-Class -- -- -- (2,226) H-Class -- -- -- (45,426) Realized Gain on Investment Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- (317) C-Class -- -- -- (8,473) H-Class -- -- -- (172,890) - --------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- (229,415) =========================================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 625,240,413 1,403,091,432 -- -- Advisor Class 28,613,192 112,779,045 -- -- A-Class* 1,831,593 377,850 1,026,948 535,354 C-Class 15,364,461 69,663,093 12,762,846 46,910,839 H-Class -- -- 357,372,432 989,759,317 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class* -- -- -- 57 C-Class -- -- -- 10,629 H-Class -- -- -- 188,915 COST OF SHARES REDEEMED Investor Class (582,278,513) (1,453,961,718) -- -- Advisor Class (28,357,983) (104,957,896) -- -- A-Class* (347,942) (136,955) (930,953) (450,080) C-Class (16,088,227) (62,643,258) (10,317,102) (53,068,353) H-Class -- -- (344,581,401) (1,057,944,178) =========================================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 43,976,994 (35,788,407) 15,332,770 (74,057,500) - --------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 74,342,040 (97,114,450) 18,393,997 (73,927,133) NET ASSETS--BEGINNING OF PERIOD 159,956,994 257,071,444 9,550,472 83,477,605 - --------------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 234,299,034 $ 159,956,994 $ 27,944,469 $ 9,550,472 =========================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (186,602) $ -- $ 379,122 $ -- =========================================================================================================================== THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 59 STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED) - -------------------------------------------------------------------------------- RETAILING TECHNOLOGY FUND FUND - -------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - -------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (123,625) $ (136,529) $ (212,402) $ 132,662 Net Realized Gain (Loss) on Investments (522,410) 3,617,578 339,252 (4,711,370) Net Change in Unrealized Appreciation (Depreciation) on Investments (272,237) (3,842,246) 2,179,806 (3,517,771) - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (918,272) (361,197) 2,306,656 (8,096,479) - -------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class -- -- -- -- C-Class -- -- -- -- - -------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- -- ==================================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 144,133,447 278,778,445 110,724,489 570,657,640 Advisor Class 27,538,199 56,431,348 36,361,477 83,646,308 A-Class* 199,189 1,000 906,598 34,891 C-Class 3,932,263 16,601,681 20,720,060 65,412,312 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- -- Advisor Class -- -- -- -- A-Class* -- -- -- -- C-Class -- -- -- -- COST OF SHARES REDEEMED Investor Class (144,706,005) (282,642,489) (109,184,371) (568,286,341) Advisor Class (28,065,998) (65,873,104) (27,083,467) (89,332,490) A-Class* (44,732) -- (36,200) (27,955) C-Class (3,201,645) (17,149,592) (19,227,839) (64,866,870) ==================================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (215,282) (13,852,711) 13,180,747 (2,762,505) - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (1,133,554) (14,213,908) 15,487,403 (10,858,984) NET ASSETS--BEGINNING OF PERIOD 15,749,557 29,963,465 25,328,161 36,187,145 - -------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 14,616,003 $ 15,749,557 $ 40,815,564 $ 25,328,161 ==================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (123,625) $ -- $ (79,740) $ 132,662 ==================================================================================================================== TELECOMMUNICATIONS FUND - -------------------------------------------------------------------------------- PERIOD PERIOD ENDED ENDED SEPTEMBER 30, MARCH 31, 2005+ 2005 - -------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ 133,616 $ 72,235 Net Realized Gain (Loss) on Investments 767,629 367,392 Net Change in Unrealized Appreciation (Depreciation) on Investments 448,670 (2,754,260) - -------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations 1,349,915 (2,314,633) - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- Advisor Class -- -- A-Class -- -- C-Class -- -- - -------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- ================================================================================ SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 84,838,432 212,586,902 Advisor Class 18,994,932 27,053,362 A-Class* 3,711 10,943 C-Class 7,891,281 18,111,398 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- Advisor Class -- -- A-Class* -- -- C-Class -- -- COST OF SHARES REDEEMED Investor Class (85,116,594) (219,368,950) Advisor Class (18,016,462) (32,141,180) A-Class* (4,067) (8,718) C-Class (7,940,511) (19,634,453) ================================================================================ NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 650,722 (13,390,696) - -------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 2,000,637 (15,705,329) NET ASSETS--BEGINNING OF PERIOD 9,711,220 25,416,549 - -------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 11,711,857 $ 9,711,220 ================================================================================ UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ 205,980 $ 72,364 ================================================================================ * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. + UNAUDITED 60 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. TRANSPORTATION UTILITIES FUND FUND - ------------------------------------------------------------------------------------------------------------------- PERIOD PERIOD PERIOD PERIOD ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income (Loss) $ (36,343) $ (253,904) $ 572,232 $ 662,681 Net Realized Gain (Loss) on Investments 487,117 (1,759,210) 277,062 3,105,892 Net Change in Unrealized Appreciation (Depreciation) on Investments (998,759) 2,986,695 7,513,537 292,684 - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (547,985) 973,581 8,362,831 4,061,257 - ------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Net Investment Income Investor Class -- -- -- (295,855) Advisor Class -- -- -- (195,078) A-Class -- -- -- (939) C-Class -- -- -- (58,131) - ------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- -- -- (550,003) =================================================================================================================== SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED Investor Class 84,163,382 308,076,952 299,210,908 311,376,615 Advisor Class 18,251,833 100,497,315 61,951,279 82,899,027 A-Class* 198,907 124,382 2,499,760 1,075,906 C-Class 939,116 15,606,807 19,099,776 39,229,707 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT Investor Class -- -- -- 252,599 Advisor Class -- -- -- 192,671 A-Class* -- -- -- 543 C-Class -- -- -- 47,970 COST OF SHARES REDEEMED Investor Class (80,128,891) (303,670,749) (274,999,923) (315,309,228) Advisor Class (19,584,818) (100,250,537) (56,937,149) (76,634,420) A-Class* (47,920) (103,024) (732,783) (949,299) C-Class (1,924,430) (14,519,697) (15,464,650) (39,041,149) =================================================================================================================== NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS 1,867,179 5,761,449 34,627,218 3,140,942 - ------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets 1,319,194 6,735,030 42,990,049 6,652,196 NET ASSETS--BEGINNING OF PERIOD 15,467,230 8,732,200 30,841,282 24,189,086 - ------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 16,786,424 $ 15,467,230 $ 73,831,331 $ 30,841,282 =================================================================================================================== UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) $ (36,343) $ -- $ 757,249 $ 185,017 =================================================================================================================== THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 61 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ BANKING FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ 10.17 $ .08 $ (.05) $ .03 $ -- $ -- March 31, 2005 10.25 .13 .05 .18 (.26) -- March 31, 2004 7.30 .14 2.89 3.03 (.08) -- March 31, 2003 8.63 .12 (1.24) (1.12) (.21) -- March 31, 2002 8.27 .12 .53 .65 (.29) -- March 31, 2001 7.31 .14 .82 .96 -- -- BANKING FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 9.72 .06 (.04) .02 -- -- March 31, 2005 9.85 .06 .07 .13 (.26) -- March 31, 2004 7.06 .09 2.78 2.87 (.08) -- March 31, 2003 8.41 .07 (1.21) (1.14) (.21) -- March 31, 2002 8.13 .08 .49 .57 (.29) -- March 31, 2001 7.24 .13 .76 .89 -- -- BANKING FUND A-CLASS SEPTEMBER 30, 2005@ 9.72 .07 (.03) .04 -- -- March 31, 2005* 10.06 .06 (.14) (.08) (.26) -- BANKING FUND C-CLASS SEPTEMBER 30, 2005@ 9.66 .03 (.03) -- -- -- March 31, 2005 9.87 .04 .01 .05 (.26) -- March 31, 2004 7.12 .04 2.79 2.83 (.08) -- March 31, 2003 8.54 .02 (1.23) (1.21) (.21) -- March 31, 2002 8.27 .03 .53 .56 (.29) -- March 31, 2001* 8.27 -- -- -- -- -- BASIC MATERIALS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 30.66 .08 (1.00) (.92) -- -- March 31, 2005 25.46 .14 5.06 5.20 -- -- March 31, 2004 17.22 .05 8.32 8.37 (.13) -- March 31, 2003++ 24.30 .12 (7.17) (7.05) (.03) -- March 31, 2002++ 21.03 .27 3.27 3.54 (.27) -- March 31, 2001++ 23.91 .18 (3.06) (2.88) -- -- BASIC MATERIALS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 29.78 .02 (.99) (.97) -- -- March 31, 2005 24.85 .01 4.92 4.93 -- -- March 31, 2004 16.89 .02 8.07 8.09 (.13) -- March 31, 2003++ 23.91 (.06) (6.93) (6.99) (.03) -- March 31, 2002++ 20.79 .15 3.24 3.39 (.27) -- March 31, 2001++ 23.79 .15 (3.15) (3.00) -- -- BASIC MATERIALS FUND A-CLASS SEPTEMBER 30, 2005@ 29.84 .08 (1.01) (.93) -- -- March 31, 2005* 25.80 .07 3.97 4.04 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - --------------------------------------------------------------------------------------------------- BANKING FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ -- $ .03 $ 10.20 0.29% March 31, 2005 (.26) (.08) 10.17 1.61% March 31, 2004 (.08) 2.95 10.25 41.53% March 31, 2003 (.21) (1.33) 7.30 (13.15)% March 31, 2002 (.29) .36 8.63 8.30% March 31, 2001 -- .96 8.27 13.13% BANKING FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- .02 9.74 0.21% March 31, 2005 (.26) (.13) 9.72 1.17% March 31, 2004 (.08) 2.79 9.85 40.67% March 31, 2003 (.21) (1.35) 7.06 (13.73)% March 31, 2002 (.29) .28 8.41 7.44% March 31, 2001 -- .89 8.13 12.29% BANKING FUND A-CLASS SEPTEMBER 30, 2005@ -- .04 9.76 0.41% March 31, 2005* (.26) (.34) 9.72 (0.95)% BANKING FUND C-CLASS SEPTEMBER 30, 2005@ -- -- 9.66 0.00% March 31, 2005 (.26) (.21) 9.66 0.35% March 31, 2004 (.08) 2.75 9.87 39.76% March 31, 2003 (.21) (1.42) 7.12 (14.35)% March 31, 2002 (.29) .27 8.54 7.19% March 31, 2001* -- -- 8.27 0.00% BASIC MATERIALS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- (.92) 29.74 (3.00)% March 31, 2005 -- 5.20 30.66 20.42% March 31, 2004 (.13) 8.24 25.46 48.70% March 31, 2003++ (.03) (7.08) 17.22 (29.02)% March 31, 2002++ (.27) 3.27 24.30 16.89% March 31, 2001++ -- (2.88) 21.03 (12.05)% BASIC MATERIALS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- (.97) 28.81 (3.26)% March 31, 2005 -- 4.93 29.78 19.84% March 31, 2004 (.13) 7.96 24.85 47.99% March 31, 2003++ (.03) (7.02) 16.89 (29.24)% March 31, 2002++ (.27) 3.12 23.91 16.36% March 31, 2001++ -- (3.00) 20.79 (12.61)% BASIC MATERIALS FUND A-CLASS SEPTEMBER 30, 2005@ -- (.93) 28.91 (3.12)% March 31, 2005* -- 4.04 29.84 15.66% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------ BANKING FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.31%** 1.31%** 1.54%** 882% $ 9,927 March 31, 2005 1.34% 1.34% 1.26% 1,692% 4,899 March 31, 2004 1.36% 1.36% 1.51% 1,435% 12,504 March 31, 2003 1.38% 1.38% 1.52% 1,495% 7,352 March 31, 2002 1.50% 1.50% 1.49% 1,292% 28,992 March 31, 2001 1.30% 1.29% 1.77% 1,394% 38,508 BANKING FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.81%** 1.81%** 1.26%** 882% 1,692 March 31, 2005 1.86% 1.86% 0.60% 1,692% 2,955 March 31, 2004 1.86% 1.86% 1.04% 1,435% 3,712 March 31, 2003 1.89% 1.89% 0.91% 1,495% 390 March 31, 2002 1.91% 1.91% 0.95% 1,292% 23,281 March 31, 2001 1.73% 1.73% 1.68% 1,394% 20,378 BANKING FUND A-CLASS SEPTEMBER 30, 2005@ 1.57%** 1.57%** 1.38%** 882% 29 March 31, 2005* 1.57%** 1.57%** 1.03%** 1,692% 15 BANKING FUND C-CLASS SEPTEMBER 30, 2005@ 2.36%** 2.36%** 0.64%** 882% 2,381 March 31, 2005 2.34% 2.34% 0.43% 1,692% 867 March 31, 2004 2.37% 2.37% 0.41% 1,435% 1,829 March 31, 2003 2.38% 2.38% 0.23% 1,495% 76 March 31, 2002 2.40% 2.40% 0.42% 1,292% 15 March 31, 2001* 0.00%**+++ 0.00%**+++ 0.00%** 1,394% 14 BASIC MATERIALS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.31%** 1.31%** 0.56%** 376% 15,702 March 31, 2005 1.33% 1.33% 0.51% 891% 34,039 March 31, 2004 1.38% 1.38% 0.20% 1,669% 29,749 March 31, 2003++ 1.39% 1.39% 0.53% 1,943% 3,360 March 31, 2002++ 1.41% 1.41% 1.12% 1,523% 45,716 March 31, 2001++ 1.52% 1.52% 0.79% 2,600% 16,593 BASIC MATERIALS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.82%** 1.82%** 0.14%** 376% 9,003 March 31, 2005 1.82% 1.82% 0.03% 891% 12,987 March 31, 2004 1.87% 1.87% 0.09% 1,669% 13,483 March 31, 2003++ 1.89% 1.89% (0.23)% 1,943% 2,419 March 31, 2002++ 2.00% 2.00% 0.65% 1,523% 30,839 March 31, 2001++ 2.08% 2.07% 0.71% 2,600% 238 BASIC MATERIALS FUND A-CLASS SEPTEMBER 30, 2005@ 1.58%** 1.58%** 0.54%** 376% 250 March 31, 2005* 1.55%** 1.55%** 0.44%** 891% 210 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 30, 2001 -- BANKING FUND C-CLASS; SEPTEMBER 1, 2004 -- BANKING FUND A-CLASS AND BASIC MATERIALS FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. +++ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2001 ARE CALCULATED FOR ONE DAY AND NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED 62 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ BASIC MATERIALS FUND C-CLASS SEPTEMBER 30, 2005@ $ 29.44 $ (.04) $ (.99) $ (1.03) $ -- $ -- March 31, 2005 24.68 (.12) 4.88 4.76 -- -- March 31, 2004 16.86 (.14) 8.09 7.95 (.13) -- March 31, 2003++ 24.03 (.06) (7.08) (7.14) (.03) -- March 31, 2002*++ 23.13 (.03) 1.20 1.17 (.27) -- BIOTECHNOLOGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 17.59 (.12) 4.17 4.05 -- -- March 31, 2005 20.56 (.24) (2.73) (2.97) -- -- March 31, 2004 13.75 (.24) 7.05 6.81 -- -- March 31, 2003 20.86 (.19) (6.92) (7.11) -- -- March 31, 2002 21.66 (.28) (.52) (.80) -- -- March 31, 2001 28.88 (.35) (6.87) (7.22) -- -- BIOTECHNOLOGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 16.91 (.17) 4.02 3.85 -- -- March 31, 2005 19.86 (.32) (2.63) (2.95) -- -- March 31, 2004 13.35 (.32) 6.83 6.51 -- -- March 31, 2003 20.36 (.25) (6.76) (7.01) -- -- March 31, 2002 21.25 (.40) (.49) (.89) -- -- March 31, 2001 28.46 (.49) (6.72) (7.21) -- -- BIOTECHNOLOGY FUND A-CLASS SEPTEMBER 30, 2005@ 16.93 (.15) 4.02 3.87 -- -- March 31, 2005* 17.89 (.16) (.80) (.96) -- -- BIOTECHNOLOGY FUND C-CLASS SEPTEMBER 30, 2005@ 16.87 (.22) 4.01 3.79 -- -- March 31, 2005 19.92 (.42) (2.63) (3.05) -- -- March 31, 2004 13.47 (.43) 6.88 6.45 -- -- March 31, 2003 20.66 (.33) (6.86) (7.19) -- -- March 31, 2002 21.66 (.54) (.46) (1.00) -- -- March 31, 2001* 21.66 -- -- -- -- -- COMMODITIES FUND A-CLASS SEPTEMBER 30, 2005*@ 25.00 .19 6.53 6.72 -- -- COMMODITIES FUND C-CLASS SEPTEMBER 30, 2005*@ 25.00 .11 6.51 6.62 -- -- COMMODITIES FUND H-CLASS SEPTEMBER 30, 2005*@ 25.00 .20 6.51 6.71 -- -- CONSUMER PRODUCTS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 30.50 .11 .36 .47 -- -- March 31, 2005 28.68 .18 1.65 1.83 (.01) -- March 31, 2004 20.85 .14 7.74 7.88 (.05) -- March 31, 2003++ 25.08 .12 (4.23) (4.11) (.12) -- March 31, 2002++ 21.54 .12 3.48 3.60 (.06) -- March 31, 2001++ 22.68 .21 (1.35) (1.14) -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- BASIC MATERIALS FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ (1.03) $ 28.41 (3.50)% March 31, 2005 -- 4.76 29.44 19.29% March 31, 2004 (.13) 7.82 24.68 47.25% March 31, 2003++ (.03) (7.17) 16.86 (29.72)% March 31, 2002*++ (.27) .90 24.03 5.10% BIOTECHNOLOGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 4.05 21.64 23.02% March 31, 2005 -- (2.97) 17.59 (14.45)% March 31, 2004 -- 6.81 20.56 49.53% March 31, 2003 -- (7.11) 13.75 (34.08)% March 31, 2002 -- (.80) 20.86 (3.69)% March 31, 2001 -- (7.22) 21.66 (25.00)% BIOTECHNOLOGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 3.85 20.76 22.77% March 31, 2005 -- (2.95) 16.91 (14.85)% March 31, 2004 -- 6.51 19.86 48.76% March 31, 2003 -- (7.01) 13.35 (34.43)% March 31, 2002 -- (.89) 20.36 (4.19)% March 31, 2001 -- (7.21) 21.25 (25.33)% BIOTECHNOLOGY FUND A-CLASS SEPTEMBER 30, 2005@ -- 3.87 20.80 22.86% March 31, 2005* -- (.96) 16.93 (5.37)% BIOTECHNOLOGY FUND C-CLASS SEPTEMBER 30, 2005@ -- 3.79 20.66 22.47% March 31, 2005 -- (3.05) 16.87 (15.31)% March 31, 2004 -- 6.45 19.92 47.88% March 31, 2003 -- (7.19) 13.47 (34.80)% March 31, 2002 -- (1.00) 20.66 (4.62)% March 31, 2001* -- -- 21.66 0.00% COMMODITIES FUND A-CLASS SEPTEMBER 30, 2005*@ -- 6.72 31.72 26.88% COMMODITIES FUND C-CLASS SEPTEMBER 30, 2005*@ -- 6.62 31.62 26.48% COMMODITIES FUND H-CLASS SEPTEMBER 30, 2005*@ -- 6.71 31.71 26.84% CONSUMER PRODUCTS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- .47 30.97 1.54% March 31, 2005 (.01) 1.82 30.50 6.40% March 31, 2004 (.05) 7.83 28.68 37.84% March 31, 2003++ (.12) (4.23) 20.85 (16.38)% March 31, 2002++ (.06) 3.54 25.08 16.71% March 31, 2001++ -- (1.14) 21.54 (5.03)% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- BASIC MATERIALS FUND C-CLASS SEPTEMBER 30, 2005@ 2.36%** 2.36%** (0.27)%** 376% $ 11,086 March 31, 2005 2.32% 2.32% (0.43)% 891% 7,421 March 31, 2004 2.38% 2.38% (0.62)% 1,669% 5,311 March 31, 2003++ 2.39% 2.39% (0.23)% 1,943% 294 March 31, 2002*++ 2.60%** 2.60%** (0.13)%** 1,523% 525 BIOTECHNOLOGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.32%** 1.32%** (1.24)%** 157% 124,936 March 31, 2005 1.33% 1.33% (1.25)% 585% 74,890 March 31, 2004 1.35% 1.35% (1.31)% 548% 135,619 March 31, 2003 1.38% 1.38% (1.31)% 477% 111,003 March 31, 2002 1.23% 1.23% (1.20)% 390% 218,263 March 31, 2001 1.24% 1.23% (1.17)% 305% 283,407 BIOTECHNOLOGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.85%** 1.85%** (1.78)%** 157% 30,914 March 31, 2005 1.83% 1.83% (1.75)% 585% 10,231 March 31, 2004 1.84% 1.84% (1.79)% 548% 12,708 March 31, 2003 1.88% 1.88% (1.82)% 477% 24,280 March 31, 2002 1.72% 1.72% (1.69)% 390% 20,931 March 31, 2001 1.74% 1.73% (1.68)% 305% 25,739 BIOTECHNOLOGY FUND A-CLASS SEPTEMBER 30, 2005@ 1.59%** 1.59%** (1.52)%** 157% 750 March 31, 2005* 1.53%** 1.53%** (1.47)%** 585% 74 BIOTECHNOLOGY FUND C-CLASS SEPTEMBER 30, 2005@ 2.34%** 2.34%** (2.27)%** 157% 6,519 March 31, 2005 2.33% 2.33% (2.23)% 585% 2,625 March 31, 2004 2.36% 2.36% (2.32)% 548% 3,567 March 31, 2003 2.38% 2.38% (2.30)% 477% 1,667 March 31, 2002 2.38% 2.38% (2.36)% 390% 967 March 31, 2001* 0.00%**+++ 0.00%**+++ 0.00%** 305% 3 COMMODITIES FUND A-CLASS SEPTEMBER 30, 2005*@ 1.56%** 1.56%** 1.93%** -- 1,124 COMMODITIES FUND C-CLASS SEPTEMBER 30, 2005*@ 2.30%** 2.30%** 1.10%** -- 2,268 COMMODITIES FUND H-CLASS SEPTEMBER 30, 2005*@ 1.54%** 1.54%** 1.92%** -- 21,219 CONSUMER PRODUCTS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.29%** 1.29%** 0.72%** 373% 6,019 March 31, 2005 1.33% 1.33% 0.60% 907% 15,470 March 31, 2004 1.36% 1.36% 0.56% 914% 23,560 March 31, 2003++ 1.39% 1.39% 0.53% 1,205% 1,640 March 31, 2002++ 1.56% 1.56% 0.53% 890% 20,083 March 31, 2001++ 1.23% 1.22% 0.94% 1,907% 8,503 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 30, 2001 -- BIOTECHNOLOGY FUND C-CLASS; MAY 3, 2001 -- BASIC MATERIALS FUND C-CLASS; SEPTEMBER 1, 2004 -- BIOTECHNOLOGY FUND A-CLASS; MAY 25, 2005 --COMMODITIES FUND A-CLASS, C-CLASS AND H-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. +++ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2001 ARE CALCULATED FOR ONE DAY AND NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 63 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER PRODUCTS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ $ 29.66 $ -- $ .32 $ .32 $ -- $ -- March 31, 2005 27.99 .05 1.63 1.68 (.01) -- March 31, 2004 20.46 (.04) 7.62 7.58 (.05) -- March 31, 2003++ 24.69 (.03) (4.08) (4.11) (.12) -- March 31, 2002++ 21.24 .03 3.48 3.51 (.06) -- March 31, 2001++ 22.50 -- (1.26) (1.26) -- -- CONSUMER PRODUCTS FUND A-CLASS SEPTEMBER 30, 2005@ 29.69 .06 .30 .36 -- -- March 31, 2005* 27.42 .06 2.22 2.28 (.01) -- CONSUMER PRODUCTS FUND C-CLASS SEPTEMBER 30, 2005@ 29.53 (.04) .17 .13 -- -- March 31, 2005 27.92 (.13) 1.75 1.62 (.01) -- March 31, 2004 20.52 (.20) 7.65 7.45 (.05) -- March 31, 2003++ 24.93 (.09) (4.20) (4.29) (.12) -- March 31, 2002*++ 21.81 (.03) 3.21 3.18 (.06) -- ELECTRONICS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 10.31 (.05) 1.36 1.31 -- -- March 31, 2005 13.43 (.08) (3.04) (3.12) -- -- March 31, 2004 8.08 (.15) 5.50 5.35 -- -- March 31, 2003 16.96 (.12) (8.76) (8.88) -- -- March 31, 2002 16.54 (.18) .60 .42 -- -- March 31, 2001 40.10 (.36) (23.02) (23.38) -- (.18) ELECTRONICS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 9.95 (.07) 1.30 1.23 -- -- March 31, 2005 13.02 (.14) (2.93) (3.07) -- -- March 31, 2004 7.87 (.21) 5.36 5.15 -- -- March 31, 2003 16.62 (.16) (8.59) (8.75) -- -- March 31, 2002 16.28 (.26) .60 .34 -- -- March 31, 2001 39.66 (.58) (22.62) (23.20) -- (.18) ELECTRONICS FUND A-CLASS SEPTEMBER 30, 2005@ 9.96 (.05) 1.30 1.25 -- -- March 31, 2005* 9.22 (.07) .81 .74 -- -- ELECTRONICS FUND C-CLASS SEPTEMBER 30, 2005@ 9.90 (.10) 1.30 1.20 -- -- March 31, 2005 13.00 (.20) (2.90) (3.10) -- -- March 31, 2004 7.91 (.27) 5.36 5.09 -- -- March 31, 2003 16.82 (.22) (8.69) (8.91) -- -- March 31, 2002 16.54 (.37) .65 .28 -- -- March 31, 2001* 18.72 (.01) (2.17) (2.18) -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ $ -- $ .32 $ 29.98 1.08% March 31, 2005 (.01) 1.67 29.66 6.02% March 31, 2004 (.05) 7.53 27.99 37.10% March 31, 2003++ (.12) (4.23) 20.46 (16.64)% March 31, 2002++ (.06) 3.45 24.69 16.52% March 31, 2001++ -- (1.26) 21.24 (5.60)% CONSUMER PRODUCTS FUND A-CLASS SEPTEMBER 30, 2005@ -- .36 30.05 1.21% March 31, 2005* (.01) 2.27 29.69 8.33% CONSUMER PRODUCTS FUND C-CLASS SEPTEMBER 30, 2005@ -- .13 29.66 0.44% March 31, 2005 (.01) 1.61 29.53 5.82% March 31, 2004 (.05) 7.40 27.92 36.36% March 31, 2003++ (.12) (4.41) 20.52 (17.20)% March 31, 2002*++ (.06) 3.12 24.93 14.57% ELECTRONICS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 1.31 11.62 12.71% March 31, 2005 -- (3.12) 10.31 (23.23)% March 31, 2004 -- 5.35 13.43 66.21% March 31, 2003 -- (8.88) 8.08 (52.36)% March 31, 2002 -- .42 16.96 2.54% March 31, 2001 (.18) (23.56) 16.54 (58.48)% ELECTRONICS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 1.23 11.18 12.36% March 31, 2005 -- (3.07) 9.95 (23.58)% March 31, 2004 -- 5.15 13.02 65.44% March 31, 2003 -- (8.75) 7.87 (52.65)% March 31, 2002 -- .34 16.62 2.09% March 31, 2001 (.18) (23.38) 16.28 (58.68)% ELECTRONICS FUND A-CLASS SEPTEMBER 30, 2005@ -- 1.25 11.21 12.55% March 31, 2005* -- .74 9.96 8.03% ELECTRONICS FUND C-CLASS SEPTEMBER 30, 2005@ -- 1.20 11.10 12.12% March 31, 2005 -- (3.10) 9.90 (23.85)% March 31, 2004 -- 5.09 13.00 64.35% March 31, 2003 -- (8.91) 7.91 (52.97)% March 31, 2002 -- .28 16.82 1.69% March 31, 2001* -- (2.18) 16.54 (11.65)% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- CONSUMER PRODUCTS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.80%** 1.80%** 0.01%** 373% $ 15,028 March 31, 2005 1.82% 1.82% 0.19% 907% 26,851 March 31, 2004 1.86% 1.86% (0.18)% 914% 13,357 March 31, 2003++ 1.89% 1.89% (0.09)% 1,205% 3,120 March 31, 2002++ 2.02% 2.02% 0.18% 890% 33,201 March 31, 2001++ 1.85% 1.84% 0.02% 1,907% 18,104 CONSUMER PRODUCTS FUND A-CLASS SEPTEMBER 30, 2005@ 1.58%** 1.58%** 0.39%** 373% 1,134 March 31, 2005* 1.56%** 1.56%** 0.42%** 907% 463 CONSUMER PRODUCTS FUND C-CLASS SEPTEMBER 30, 2005@ 2.31%** 2.31%** (0.25)%** 373% 2,173 March 31, 2005 2.31% 2.31% (0.44)% 907% 8,048 March 31, 2004 2.37% 2.37% (0.79)% 914% 4,259 March 31, 2003++ 2.39% 2.39% (0.35)% 1,205% 196 March 31, 2002*++ 2.57%** 2.57%** (0.19)%** 890% 501 ELECTRONICS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.31%** 1.31%** (0.92)%** 429% 16,669 March 31, 2005 1.33% 1.33% (0.76)% 1,106% 27,150 March 31, 2004 1.36% 1.36% (1.20)% 1,359% 46,200 March 31, 2003 1.39% 1.39% (1.20)% 2,413% 31,655 March 31, 2002 1.29% 1.29% (1.08)% 1,279% 96,671 March 31, 2001 1.36% 1.35% (1.09)% 705% 70,131 ELECTRONICS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.83%** 1.83%** (1.38)%** 429% 16,217 March 31, 2005 1.83% 1.83% (1.32)% 1,106% 12,613 March 31, 2004 1.85% 1.85% (1.70)% 1,359% 3,341 March 31, 2003 1.87% 1.87% (1.72)% 2,413% 7,389 March 31, 2002 1.75% 1.75% (1.50)% 1,279% 9,528 March 31, 2001 1.87% 1.86% (1.74)% 705% 7,325 ELECTRONICS FUND A-CLASS SEPTEMBER 30, 2005@ 1.58%** 1.58%** (1.16)%** 429% 680 March 31, 2005* 1.59%** 1.59%** (1.21)%** 1,106% 1 ELECTRONICS FUND C-CLASS SEPTEMBER 30, 2005@ 2.34%** 2.34%** (1.87)%** 429% 2,489 March 31, 2005 2.33% 2.33% (1.86)% 1,106% 2,119 March 31, 2004 2.36% 2.36% (2.20)% 1,359% 1,111 March 31, 2003 2.39% 2.39% (2.21)% 2,413% 940 March 31, 2002 2.49% 2.49% (2.27)% 1,279% 388 March 31, 2001* 2.11%** 1.82%** (1.76)%** 705% 2 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 26, 2001 -- ELECTRONICS FUND C-CLASS; JULY 24, 2001 -- CONSUMER PRODUCTS FUND C-CLASS; SEPTEMBER 1, 2004 -- CONSUMER PRODUCTS FUND A-CLASS AND ELECTRONICS FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. @ UNAUDITED 64 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ 17.12 $ .01 $ 4.52 $ 4.53 $ -- $ -- March 31, 2005 11.94 .05 5.14 5.19 (.01) -- March 31, 2004 8.80 -- 3.17 3.17 (.03) -- March 31, 2003 11.26 .02 (2.47) (2.45) (.01) -- March 31, 2002 11.43 .12 (.19) (.07) (.10) -- March 31, 2001 10.87 (.08) .64 .56 -- -- ENERGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 16.65 (.03) 4.38 4.35 -- -- March 31, 2005 11.68 (.02) 5.00 4.98 (.01) -- March 31, 2004 8.63 (.03) 3.11 3.08 (.03) -- March 31, 2003 11.09 -- (2.45) (2.45) (.01) -- March 31, 2002 11.33 .05 (.19) (.14) (.10) -- March 31, 2001 10.84 (.03) .52 .49 -- -- ENERGY FUND A-CLASS SEPTEMBER 30, 2005@ 16.68 (.03) 4.41 4.38 -- -- March 31, 2005* 12.79 .02 3.88 3.90 (.01) -- ENERGY FUND C-CLASS SEPTEMBER 30, 2005@ 16.47 (.08) 4.33 4.25 -- -- March 31, 2005 11.60 (.08) 4.96 4.88 (.01) -- March 31, 2004 8.63 (.12) 3.12 3.00 (.03) -- March 31, 2003 11.14 (.07) (2.43) (2.50) (.01) -- March 31, 2002* 11.87 (.09) (.54) (.63) (.10) -- ENERGY SERVICES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 30.12 (.15) 8.81 8.66 -- -- March 31, 2005 21.74 (.22) 8.60 8.38 -- -- March 31, 2004 17.37 (.18) 4.55 4.37 -- -- March 31, 2003++ 22.47 (.15) (4.95) (5.10) -- -- March 31, 2002++ 27.30 (.18) (4.65) (4.83) -- -- March 31, 2001++ 27.93 (.12) (.51) (.63) -- -- ENERGY SERVICES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 29.21 (.22) 8.52 8.30 -- -- March 31, 2005 21.18 (.33) 8.36 8.03 -- -- March 31, 2004 17.01 (.27) 4.44 4.17 -- -- March 31, 2003++ 22.08 (.24) (4.83) (5.07) -- -- March 31, 2002++ 26.97 (.27) (4.62) (4.89) -- -- March 31, 2001++ 27.69 (.33) (.39) (.72) -- -- ENERGY SERVICES FUND A-CLASS SEPTEMBER 30, 2005@ 29.25 (.19) 8.57 8.38 -- -- March 31, 2005* 23.18 (.18) 6.25 6.07 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- ENERGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ $ -- $ 4.53 $ 21.65 26.46% March 31, 2005 (.01) 5.18 17.12 43.43% March 31, 2004 (.03) 3.14 11.94 36.12% March 31, 2003 (.01) (2.46) 8.80 (21.79)% March 31, 2002 (.10) (.17) 11.26 (0.52)% March 31, 2001 -- .56 11.43 5.15% ENERGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 4.35 21.00 26.13% March 31, 2005 (.01) 4.97 16.65 42.60% March 31, 2004 (.03) 3.05 11.68 35.79% March 31, 2003 (.01) (2.46) 8.63 (22.13)% March 31, 2002 (.10) (.24) 11.09 (1.14)% March 31, 2001 -- .49 11.33 4.52% ENERGY FUND A-CLASS SEPTEMBER 30, 2005@ -- 4.38 21.06 26.26% March 31, 2005* (.01) 3.89 16.68 30.46% ENERGY FUND C-CLASS SEPTEMBER 30, 2005@ -- 4.25 20.72 25.80% March 31, 2005 (.01) 4.87 16.47 42.03% March 31, 2004 (.03) 2.97 11.60 34.86% March 31, 2003 (.01) (2.51) 8.63 (22.48)% March 31, 2002* (.10) (.73) 11.14 (5.22)% ENERGY SERVICES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 8.66 38.78 28.75% March 31, 2005 -- 8.38 30.12 38.55% March 31, 2004 -- 4.37 21.74 25.16% March 31, 2003++ -- (5.10) 17.37 (22.70)% March 31, 2002++ -- (4.83) 22.47 (17.69)% March 31, 2001++ -- (.63) 27.30 (2.26)% ENERGY SERVICES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 8.30 37.51 28.41% March 31, 2005 -- 8.03 29.21 37.91% March 31, 2004 -- 4.17 21.18 24.51% March 31, 2003++ -- (5.07) 17.01 (22.96)% March 31, 2002++ -- (4.89) 22.08 (18.13)% March 31, 2001++ -- (.72) 26.97 (2.60)% ENERGY SERVICES FUND A-CLASS SEPTEMBER 30, 2005@ -- 8.38 37.63 28.65% March 31, 2005* -- 6.07 29.25 26.19% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- ENERGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.32%** 1.32%** 0.09%** 240% $139,370 March 31, 2005 1.33% 1.33% 0.40% 546% 111,762 March 31, 2004 1.36% 1.36% 0.04% 913% 61,800 March 31, 2003 1.39% 1.39% 0.24% 1,362% 4,703 March 31, 2002 1.32% 1.32% 1.06% 1,502% 31,769 March 31, 2001 1.64% 1.63% (0.70)% 1,707% 15,715 ENERGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.83%** 1.83%** (0.39)%** 240% 32,817 March 31, 2005 1.82% 1.82% (0.11)% 546% 25,000 March 31, 2004 1.92% 1.92% (0.25)% 913% 4,895 March 31, 2003 1.88% 1.88% (0.03)% 1,362% 7,039 March 31, 2002 1.80% 1.80% 0.42% 1,502% 9,621 March 31, 2001 2.11% 2.11% (0.26)% 1,707% 4,269 ENERGY FUND A-CLASS SEPTEMBER 30, 2005@ 1.59%** 1.59%** (0.35)%** 240% 7,175 March 31, 2005* 1.45%** 1.45%** 0.19%** 546% 744 ENERGY FUND C-CLASS SEPTEMBER 30, 2005@ 2.34%** 2.34%** (0.87)%** 240% 26,717 March 31, 2005 2.33% 2.33% (0.61)% 546% 17,993 March 31, 2004 2.36% 2.36% (1.08)% 913% 6,571 March 31, 2003 2.38% 2.38% (0.81)% 1,362% 1,471 March 31, 2002* 2.51%** 2.51%** (0.92)%** 1,502% 392 ENERGY SERVICES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.33%** 1.33%** (0.89)%** 152% 134,074 March 31, 2005 1.31% 1.31% (0.85)% 501% 99,603 March 31, 2004 1.37% 1.37% (0.96)% 1,009% 47,344 March 31, 2003++ 1.39% 1.39% (0.72)% 971% 15,144 March 31, 2002++ 1.54% 1.54% (0.74)% 949% 51,983 March 31, 2001++ 1.26% 1.25% (0.41)% 944% 50,159 ENERGY SERVICES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.83%** 1.83%** (1.37)%** 152% 33,567 March 31, 2005 1.82% 1.82% (1.37)% 501% 24,647 March 31, 2004 1.87% 1.87% (1.39)% 1,009% 25,302 March 31, 2003++ 1.88% 1.88% (1.26)% 971% 1,961 March 31, 2002++ 1.97% 1.97% (1.21)% 949% 22,051 March 31, 2001++ 1.74% 1.73% (1.17)% 944% 2,879 ENERGY SERVICES FUND A-CLASS SEPTEMBER 30, 2005@ 1.62%** 1.62%** (1.15)%** 152% 2,307 March 31, 2005* 1.53%** 1.53%** (1.13)%** 501% 313 * SINCE THE COMMENCEMENT OF OPERATIONS: APRIL 19, 2001-- ENERGY FUND C-CLASS; SEPTEMBER 1, 2004 -- ENERGY FUND A-CLASS AND ENERGY SERVICES FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 65 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY SERVICES FUND C-CLASS SEPTEMBER 30, 2005@ $ 28.98 $ (.30) $ 8.45 $ 8.15 $ -- $ -- March 31, 2005 21.12 (.45) 8.31 7.86 -- -- March 31, 2004 17.04 (.35) 4.43 4.08 -- -- March 31, 2003++ 22.23 (.30) (4.89) (5.19) -- -- March 31, 2002++ 27.30 (.30) (4.77) (5.07) -- -- March 31, 2001*++ 27.30 -- -- -- -- -- FINANCIAL SERVICES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 11.40 .08 .63 .71 -- -- March 31, 2005 11.09 .10 .29 .39 (.08) -- March 31, 2004 7.66 .09 3.38 3.47 (.04) -- March 31, 2003 10.23 .07 (2.62) (2.55) (.02) -- March 31, 2002 10.00 .04 .29 .33 (.10) -- March 31, 2001 9.48 .06 .46 .52 -- -- FINANCIAL SERVICES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 11.13 .05 .61 .66 -- -- March 31, 2005 10.89 .05 .27 .32 (.08) -- March 31, 2004 7.57 .04 3.32 3.36 (.04) -- March 31, 2003 10.08 .03 (2.52) (2.49) (.02) -- March 31, 2002 9.89 (.01) .30 .29 (.10) -- March 31, 2001 9.42 .01 .46 .47 -- -- FINANCIAL SERVICES FUND A-CLASS SEPTEMBER 30, 2005@ 11.13 .06 .62 .68 -- -- March 31, 2005* 10.75 .05 .41 .46 (.08) -- FINANCIAL SERVICES FUND C-CLASS SEPTEMBER 30, 2005@ 11.01 -- .62 .62 -- -- March 31, 2005 10.84 (.01) .26 .25 (.08) -- March 31, 2004 7.57 (.02) 3.33 3.31 (.04) -- March 31, 2003 10.14 (.02) (2.53) (2.55) (.02) -- March 31, 2002* 10.46 (.05) (.17) (.22) (.10) -- HEALTH CARE FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 12.71 (.02) 1.16 1.14 -- -- March 31, 2005 12.50 (.05) .26 .21 -- -- March 31, 2004 9.21 (.07) 3.36 3.29 -- -- March 31, 2003 11.36 (.02) (2.13) (2.15) -- -- March 31, 2002 11.25 (.04) .15 .11 -- -- March 31, 2001 10.25 (.05) 1.05 1.00 -- -- HEALTH CARE FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 12.25 (.06) 1.13 1.07 -- -- March 31, 2005 12.11 (.10) .24 .14 -- -- March 31, 2004 8.97 (.12) 3.26 3.14 -- -- March 31, 2003 11.11 (.06) (2.08) (2.14) -- -- March 31, 2002 11.06 (.09) .14 .05 -- -- March 31, 2001 10.12 (.11) 1.05 .94 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- ENERGY SERVICES FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ 8.15 $ 37.13 28.12% March 31, 2005 -- 7.86 28.98 37.22% March 31, 2004 -- 4.08 21.12 23.94% March 31, 2003++ -- (5.19) 17.04 (23.35)% March 31, 2002++ -- (5.07) 22.23 (18.57)% March 31, 2001*++ -- -- 27.30 0.00% FINANCIAL SERVICES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- .71 12.11 6.23% March 31, 2005 (.08) .31 11.40 3.46% March 31, 2004 (.04) 3.43 11.09 45.36% March 31, 2003 (.02) (2.57) 7.66 (24.97)% March 31, 2002 (.10) .23 10.23 3.39% March 31, 2001 -- .52 10.00 5.49% FINANCIAL SERVICES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- .66 11.79 5.93% March 31, 2005 (.08) .24 11.13 2.88% March 31, 2004 (.04) 3.32 10.89 44.45% March 31, 2003 (.02) (2.51) 7.57 (24.74)% March 31, 2002 (.10) .19 10.08 3.02% March 31, 2001 -- .47 9.89 4.99% FINANCIAL SERVICES FUND A-CLASS SEPTEMBER 30, 2005@ -- .68 11.81 6.11% March 31, 2005* (.08) .38 11.13 4.22% FINANCIAL SERVICES FUND C-CLASS SEPTEMBER 30, 2005@ -- .62 11.63 5.63% March 31, 2005 (.08) .17 11.01 2.24% March 31, 2004 (.04) 3.27 10.84 43.78% March 31, 2003 (.02) (2.57) 7.57 (25.19)% March 31, 2002* (.10) (.32) 10.14 (2.02)% HEALTH CARE FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 1.14 13.85 8.97% March 31, 2005 -- .21 12.71 1.68% March 31, 2004 -- 3.29 12.50 35.72% March 31, 2003 -- (2.15) 9.21 (18.93)% March 31, 2002 -- .11 11.36 0.98% March 31, 2001 -- 1.00 11.25 9.76% HEALTH CARE FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 1.07 13.32 8.73% March 31, 2005 -- .14 12.25 1.16% March 31, 2004 -- 3.14 12.11 35.01% March 31, 2003 -- (2.14) 8.97 (19.26)% March 31, 2002 -- .05 11.11 0.45% March 31, 2001 -- .94 11.06 9.29% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- ENERGY SERVICES FUND C-CLASS SEPTEMBER 30, 2005@ 2.35%** 2.35%** (1.88)%** 152% $ 21,448 March 31, 2005 2.31% 2.31% (1.84)% 501% 11,529 March 31, 2004 2.37% 2.37% (1.86)% 1,009% 2,833 March 31, 2003++ 2.39% 2.39% (1.60)% 971% 651 March 31, 2002++ 2.57% 2.57% (1.60)% 949% 697 March 31, 2001*++ 0.00%**+++ 0.00%**+++ 0.00%** 944% 3 FINANCIAL SERVICES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.32%** 1.32%** 1.30%** 369% 6,066 March 31, 2005 1.33% 1.33% 0.91% 1,005% 7,741 March 31, 2004 1.36% 1.36% 0.94% 1,200% 34,423 March 31, 2003 1.38% 1.38% 0.82% 2,336% 6,671 March 31, 2002 1.51% 1.51% 0.43% 1,110% 25,147 March 31, 2001 1.24% 1.23% 0.58% 1,271% 35,190 FINANCIAL SERVICES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.81%** 1.81%** 0.80%** 369% 14,161 March 31, 2005 1.83% 1.83% 0.43% 1,005% 27,181 March 31, 2004 1.86% 1.86% 0.39% 1,200% 40,885 March 31, 2003 1.88% 1.88% 0.35% 2,336% 15,074 March 31, 2002 2.02% 2.02% (0.08)% 1,110% 40,968 March 31, 2001 1.74% 1.73% 0.05% 1,271% 30,627 FINANCIAL SERVICES FUND A-CLASS SEPTEMBER 30, 2005@ 1.58%** 1.58%** 1.01%** 369% 479 March 31, 2005* 1.55%** 1.55%** 0.70%** 1,005% 5 FINANCIAL SERVICES FUND C-CLASS SEPTEMBER 30, 2005@ 2.32%** 2.32%** 0.04%** 369% 2,150 March 31, 2005 2.33% 2.33% (0.10)% 1,005% 1,689 March 31, 2004 2.37% 2.37% (0.23)% 1,200% 2,242 March 31, 2003 2.37% 2.37% (0.19)% 2,336% 222 March 31, 2002* 2.52%** 2.52%** (0.50)%** 1,110% 526 HEALTH CARE FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.31%** 1.31%** (0.33)%** 287% 63,243 March 31, 2005 1.34% 1.34% (0.42)% 610% 35,500 March 31, 2004 1.36% 1.36% (0.56)% 1,204% 19,801 March 31, 2003 1.38% 1.38% (0.25)% 1,395% 13,400 March 31, 2002 1.37% 1.37% (0.36)% 936% 20,567 March 31, 2001 1.55% 1.54% (0.39)% 1,399% 42,495 HEALTH CARE FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.83%** 1.83%** (0.94)%** 287% 22,506 March 31, 2005 1.84% 1.84% (0.83)% 610% 16,511 March 31, 2004 1.85% 1.85% (1.05)% 1,204% 27,102 March 31, 2003 1.88% 1.88% (0.66)% 1,395% 23,127 March 31, 2002 1.85% 1.85% (0.81)% 936% 29,504 March 31, 2001 2.05% 2.04% (0.98)% 1,399% 24,444 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 30, 2001-- ENERGY SERVICES FUND C-CLASS; APRIL 19, 2001-- FINANCIAL SERVICES FUND C-CLASS; SEPTEMBER 1, 2004 -- FINANCIAL SERVICES FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. +++ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2001 ARE CALCULATED FOR ONE DAY AND NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED 66 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE FUND A-CLASS SEPTEMBER 30, 2005@ $ 12.25 $ (.05) $ 1.13 $ 1.08 $ -- $ -- March 31, 2005* 11.65 (.05) .65 .60 -- -- HEALTH CARE FUND C-CLASS SEPTEMBER 30, 2005@ 12.19 (.09) 1.10 1.01 -- -- March 31, 2005 12.11 (.16) .24 .08 -- -- March 31, 2004 9.03 (.18) 3.26 3.08 -- -- March 31, 2003 11.25 (.12) (2.10) (2.22) -- -- March 31, 2002 11.25 (.18) .18 -- -- -- March 31, 2001* 11.25 -- -- -- -- -- INTERNET FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 32.29 (.19) 4.10 3.91 -- -- March 31, 2005 35.66 (.43) (2.94) (3.37) -- -- March 31, 2004 20.43 (.41) 15.64 15.23 -- -- March 31, 2003 30.55 (.29) (9.83) (10.12) -- -- March 31, 2002 41.80 (.31) (10.94) (11.25) -- -- March 31, 2001*++ 200.00 (1.60) (156.60) (158.20) -- -- INTERNET FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 31.41 (.25) 3.97 3.72 -- -- March 31, 2005 34.85 (.60) (2.84) (3.44) -- -- March 31, 2004 20.05 (.54) 15.34 14.80 -- -- March 31, 2003 30.18 (.40) (9.73) (10.13) -- -- March 31, 2002 41.60 (.64) (10.78) (11.42) -- -- March 31, 2001*++ 200.00 (2.80) (155.60) (158.40) -- -- INTERNET FUND A-CLASS SEPTEMBER 30, 2005@ 31.45 (.21) 3.97 3.76 -- -- March 31, 2005* 30.65 (.31) 1.11 .80 -- -- INTERNET FUND C-CLASS SEPTEMBER 30, 2005@ 31.06 (.33) 3.92 3.59 -- -- March 31, 2005 34.64 (.73) (2.85) (3.58) -- -- March 31, 2004 20.04 (.72) 15.32 14.60 -- -- March 31, 2003 30.28 (.50) (9.74) (10.24) -- -- March 31, 2002* 53.40 (.78) (22.34) (23.12) -- -- LEISURE FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 30.50 (.11) (1.79) (1.90) -- -- March 31, 2005 27.66 (.17) 3.01 2.84 -- -- March 31, 2004 17.88 (.06) 9.84 9.78 -- -- March 31, 2003++ 24.00 (.15) (5.97) (6.12) -- -- March 31, 2002++ 25.56 (.33) (1.23) (1.56) -- -- March 31, 2001++ 33.30 (.36) (7.38) (7.74) -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- HEALTH CARE FUND A-CLASS SEPTEMBER 30, 2005@ $ -- $ 1.08 $ 13.33 8.82% March 31, 2005* -- .60 12.25 5.15% HEALTH CARE FUND C-CLASS SEPTEMBER 30, 2005@ -- 1.01 13.20 8.29% March 31, 2005 -- .08 12.19 0.66% March 31, 2004 -- 3.08 12.11 34.11% March 31, 2003 -- (2.22) 9.03 (19.73)% March 31, 2002 -- -- 11.25 0.00% March 31, 2001* -- -- 11.25 0.00% INTERNET FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 3.91 36.20 12.11% March 31, 2005 -- (3.37) 32.29 (9.45)% March 31, 2004 -- 15.23 35.66 74.55% March 31, 2003 -- (10.12) 20.43 (33.13)% March 31, 2002 -- (11.25) 30.55 (26.91)% March 31, 2001*++ -- (158.20) 41.80 (79.10)% INTERNET FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 3.72 35.13 11.84% March 31, 2005 -- (3.44) 31.41 (9.87)% March 31, 2004 -- 14.80 34.85 73.82% March 31, 2003 -- (10.13) 20.05 (33.57)% March 31, 2002 -- (11.42) 30.18 (27.45)% March 31, 2001*++ -- (158.40) 41.60 (79.20)% INTERNET FUND A-CLASS SEPTEMBER 30, 2005@ -- 3.76 35.21 11.96% March 31, 2005* -- .80 31.45 2.61% INTERNET FUND C-CLASS SEPTEMBER 30, 2005@ -- 3.59 34.65 11.56% March 31, 2005 -- (3.58) 31.06 (10.33)% March 31, 2004 -- 14.60 34.64 72.85% March 31, 2003 -- (10.24) 20.04 (33.82)% March 31, 2002* -- (23.12) 30.28 (43.30)% LEISURE FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- (1.90) 28.60 (6.23)% March 31, 2005 -- 2.84 30.50 10.27% March 31, 2004 -- 9.78 27.66 54.70% March 31, 2003++ -- (6.12) 17.88 (25.50)% March 31, 2002++ -- (1.56) 24.00 (6.10)% March 31, 2001++ -- (7.74) 25.56 (23.24)% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- HEALTH CARE FUND A-CLASS SEPTEMBER 30, 2005@ 1.59%** 1.59%** (0.74)%** 287% $ 657 March 31, 2005* 1.56%** 1.56%** (0.65)%** 610% 1 HEALTH CARE FUND C-CLASS SEPTEMBER 30, 2005@ 2.33%** 2.33%** (1.43)%** 287% 6,986 March 31, 2005 2.33% 2.33% (1.36)% 610% 4,017 March 31, 2004 2.37% 2.37% (1.60)% 1,204% 2,865 March 31, 2003 2.37% 2.37% (1.30)% 1,395% 421 March 31, 2002 2.54% 2.54% (1.59)% 936% 1,085 March 31, 2001* 0.00%**+++ 0.00%**+++ 0.00%** 1,399% 3 INTERNET FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.29%** 1.29%** (1.07)%** 836% 8,762 March 31, 2005 1.34% 1.34% (1.23)% 1,947% 5,210 March 31, 2004 1.36% 1.36% (1.31)% 1,340% 15,292 March 31, 2003 1.38% 1.38% (1.34)% 2,052% 3,335 March 31, 2002 1.21% 1.21% (1.15)% 2,186% 3,124 March 31, 2001*++ 1.61%** 1.61%** (1.43)%** 1,937% 1,625 INTERNET FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.81%** 1.81%** (1.50)%** 836% 2,860 March 31, 2005 1.83% 1.83% (1.72)% 1,947% 829 March 31, 2004 1.86% 1.86% (1.81)% 1,340% 12,090 March 31, 2003 1.82% 1.82% (1.79)% 2,052% 717 March 31, 2002 1.74% 1.74% (1.68)% 2,186% 396 March 31, 2001*++ 2.09%** 2.08%** (2.00)%** 1,937% 201 INTERNET FUND A-CLASS SEPTEMBER 30, 2005@ 1.58%** 1.58%** (1.23)%** 836% 87 March 31, 2005* 1.55%** 1.55%** (1.46)%** 1,947% 4 INTERNET FUND C-CLASS SEPTEMBER 30, 2005@ 2.32%** 2.32%** (2.02)%** 836% 1,688 March 31, 2005 2.33% 2.33% (2.19)% 1,947% 1,596 March 31, 2004 2.36% 2.36% (2.31)% 1,340% 1,556 March 31, 2003 2.37% 2.37% (2.34)% 2,052% 234 March 31, 2002* 2.36%** 2.36%** (2.33)%** 2,186% 149 LEISURE FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.30%** 1.30%** (0.76)%** 249% 3,978 March 31, 2005 1.31% 1.31% (0.57)% 1,046% 15,080 March 31, 2004 1.36% 1.36% (0.31)% 1,870% 25,030 March 31, 2003++ 1.38% 1.38% (0.65)% 3,179% 2,325 March 31, 2002++ 1.57% 1.57% (1.27)% 2,609% 11,443 March 31, 2001++ 1.55% 1.55% (1.18)% 2,756% 1,277 * SINCE THE COMMENCEMENT OF OPERATIONS: APRIL 6, 2000 -- INTERNET FUND INVESTOR CLASS AND ADVISOR CLASS; MARCH 30, 2001-- HEALTH CARE FUND C-CLASS; APRIL 19, 2001 -- INTERNET FUND C-CLASS; SEPTEMBER 1, 2004 -- HEALTH CARE FUND A-CLASS AND INTERNET FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ INTERNET FUND -- PER SHARE AMOUNTS FOR THE PERIOD ENDED MARCH 31, 2001 HAVE BEEN RESTATED TO REFLECT A 1:20 REVERSE STOCK SPLIT EFFECTIVE APRIL 20, 2001. LEISURE FUND -- PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. +++ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2001 ARE CALCULATED FOR ONE DAY AND NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 67 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ LEISURE FUND ADVISOR CLASS SEPTEMBER 30, 2005@ $ 29.34 $ (.18) $ (1.73) $ (1.91) $ -- $ -- March 31, 2005 26.74 (.30) 2.90 2.60 -- -- March 31, 2004 17.37 (.23) 9.60 9.37 -- -- March 31, 2003++ 23.34 (.39) (5.58) (5.97) -- -- March 31, 2002++ 24.93 (.51) (1.08) (1.59) -- -- March 31, 2001++ 32.82 (.51) (7.38) (7.89) -- -- LEISURE FUND A-CLASS SEPTEMBER 30, 2005@ 29.34 (.14) (1.73) (1.87) -- -- March 31, 2005* 24.59 (.08) 4.83 4.75 -- -- LEISURE FUND C-CLASS SEPTEMBER 30, 2005@ 29.39 (.25) (1.73) (1.98) -- -- March 31, 2005 26.93 (.40) 2.86 2.46 -- -- March 31, 2004 17.61 (.38) 9.70 9.32 -- -- March 31, 2003++ 23.79 (.36) (5.82) (6.18) -- -- March 31, 2002*++ 29.01 (.45) (4.77) (5.22) -- -- PRECIOUS METALS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 35.64 (.01) 5.77 5.76 -- -- March 31, 2005 44.32 (.05) (8.63) (8.68) -- -- March 31, 2004 26.78 (.12) 17.67 17.55 (.01) -- March 31, 2003 27.90 .03 (1.15) (1.12) -- -- March 31, 2002 17.73 .01 10.30 10.31 (.14) -- March 31, 2001 18.80 .05 (1.12) (1.07) -- -- PRECIOUS METALS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 35.37 (.11) 5.73 5.62 -- -- March 31, 2005 44.17 (.03) (8.77) (8.80) -- -- March 31,2004* 31.68 (.18) 12.68 12.50 (.01) -- PRECIOUS METALS FUND A-CLASS SEPTEMBER 30, 2005@ 35.41 .01 5.67 5.68 -- -- March 31, 2005* 37.26 (.01) (1.84) (1.85) -- -- PRECIOUS METALS FUND C-CLASS SEPTEMBER 30, 2005@ 34.37 (.19) 5.54 5.35 -- -- March 31, 2005 43.16 (.39) (8.40) (8.79) -- -- March 31, 2004 26.35 (.51) 17.33 16.82 (.01) -- March 31, 2003 27.72 (.27) (1.10) (1.37) -- -- March 31, 2002* 20.41 (.26) 7.71 7.45 (.14) -- REAL ESTATE FUND A-CLASS SEPTEMBER 30, 2005@ 27.84 .31 3.96 4.27 -- -- March 31, 2005* 26.66 .09 1.24 1.33 (.03) (.12) REAL ESTATE FUND C-CLASS SEPTEMBER 30, 2005@ 27.64 .22 3.90 4.12 -- -- March 31, 2005 26.63 .41 .75 1.16 (.03) (.12) March 31, 2004* 25.00 .02 1.61 1.63 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - --------------------------------------------------------------------------------------------------- LEISURE FUND ADVISOR CLASS SEPTEMBER 30, 2005@ $ -- $ (1.91) $ 27.43 (6.51)% March 31, 2005 -- 2.60 29.34 9.72% March 31, 2004 -- 9.37 26.74 53.94% March 31, 2003++ -- (5.97) 17.37 (25.58)% March 31, 2002++ -- (1.59) 23.34 (6.38)% March 31, 2001++ -- (7.89) 24.93 (24.04)% LEISURE FUND A-CLASS SEPTEMBER 30, 2005@ -- (1.87) 27.47 (6.37)% March 31, 2005* -- 4.75 29.34 19.32% LEISURE FUND C-CLASS SEPTEMBER 30, 2005@ -- (1.98) 27.41 (6.74)% March 31, 2005 -- 2.46 29.39 9.13% March 31, 2004 -- 9.32 26.93 52.92% March 31, 2003++ -- (6.18) 17.61 (25.98)% March 31, 2002*++ -- (5.22) 23.79 (17.99)% PRECIOUS METALS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 5.76 41.40 16.16% March 31, 2005 -- (8.68) 35.64 (19.58)% March 31, 2004 (.01) 17.54 44.32 65.53% March 31, 2003 -- (1.12) 26.78 (4.01)% March 31, 2002 (.14) 10.17 27.90 58.44% March 31, 2001 -- (1.07) 17.73 (5.69)% PRECIOUS METALS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 5.62 40.99 15.89% March 31, 2005 -- (8.80) 35.37 (19.92)% March 31,2004* (.01) 12.49 44.17 39.46% PRECIOUS METALS FUND A-CLASS SEPTEMBER 30, 2005@ -- 5.68 41.09 16.04% March 31, 2005* -- (1.85) 35.41 (4.97)% PRECIOUS METALS FUND C-CLASS SEPTEMBER 30, 2005@ -- 5.35 39.72 15.57% March 31, 2005 -- (8.79) 34.37 (20.37)% March 31, 2004 (.01) 16.81 43.16 63.83% March 31, 2003 -- (1.37) 26.35 (4.94)% March 31, 2002* (.14) 7.31 27.72 36.75% REAL ESTATE FUND A-CLASS SEPTEMBER 30, 2005@ -- 4.27 32.11 15.34% March 31, 2005* (.15) 1.18 27.84 4.98% REAL ESTATE FUND C-CLASS SEPTEMBER 30, 2005@ -- 4.12 31.76 14.91% March 31, 2005 (.15) 1.01 27.64 4.35% March 31, 2004* -- 1.63 26.63 6.52% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000's EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------ LEISURE FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.79%** 1.79%** (1.22)%** 249% $ 8,796 March 31, 2005 1.82% 1.82% (1.10)% 1,046% 27,750 March 31, 2004 1.86% 1.86% (1.06)% 1,870% 39,789 March 31, 2003++ 1.90% 1.90% (1.68)% 3,179% 3,592 March 31, 2002++ 2.26% 2.26% (2.05)% 2,609% 9,324 March 31, 2001++ 2.08% 2.07% (1.77)% 2,756% 18,299 LEISURE FUND A-CLASS SEPTEMBER 30, 2005@ 1.56%** 1.56%** (0.97)%** 249% 18 March 31, 2005* 1.55%** 1.55%** (1.02)%** 1,046% 12 LEISURE FUND C-CLASS SEPTEMBER 30, 2005@ 2.30%** 2.30%** (1.71)%** 249% 936 March 31, 2005 2.31% 2.31% (1.44)% 1,046% 2,502 March 31, 2004 2.37% 2.37% (1.59)% 1,870% 2,165 March 31, 2003++ 2.39% 2.39% (1.70)% 3,179% 36 March 31, 2002*++ 2.53%** 2.53%** (2.14)%** 2,609% 87 PRECIOUS METALS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.22%** 1.22%** (0.07)%** 148% 201,252 March 31, 2005 1.23% 1.23% (0.12)% 358% 130,718 March 31, 2004 1.26% 1.26% (0.32)% 550% 236,961 March 31, 2003 1.27% 1.27% 0.09% 744% 75,185 March 31, 2002 1.39% 1.39% 0.07% 839% 59,625 March 31, 2001 1.18% 1.17% 0.30% 822% 25,096 PRECIOUS METALS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.72%** 1.72%** (0.66)%** 148% 8,929 March 31, 2005 1.72% 1.72% (0.09)% 358% 8,596 March 31,2004* 1.72%** 1.72%** (0.68)%** 550% 2,112 PRECIOUS METALS FUND A-CLASS SEPTEMBER 30, 2005@ 1.53%** 1.53%** 0.07%** 148% 1,900 March 31, 2005* 1.45%** 1.45%** (0.02)%** 358% 217 PRECIOUS METALS FUND C-CLASS SEPTEMBER 30, 2005@ 2.23%** 2.23%** (1.13)%** 148% 22,218 March 31, 2005 2.23% 2.23% (1.08)% 358% 20,426 March 31, 2004 2.27% 2.27% (1.38)% 550% 17,998 March 31, 2003 2.27% 2.27% (0.94)% 744% 2,150 March 31, 2002* 2.38%** 2.38%** (1.23)%** 839% 910 REAL ESTATE FUND A-CLASS SEPTEMBER 30, 2005@ 1.56%** 1.56%** 1.99%** 545% 233 March 31, 2005* 1.54%** 1.54%** 0.52%** 1,773% 71 REAL ESTATE FUND C-CLASS SEPTEMBER 30, 2005@ 2.35%** 2.35%** 1.44%** 545% 3,942 March 31, 2005 2.32% 2.32% 1.52% 1,773% 1,293 March 31, 2004* 2.36%** 2.36%** 0.72%** 102% 7,562 * SINCE THE COMMENCEMENT OF OPERATIONS: APRIL 27, 2001 -- PRECIOUS METALS FUND C-CLASS; MAY 3, 2001 -- LEISURE FUND C-CLASS; AUGUST 1, 2003 -- PRECIOUS METALS FUND ADVISOR CLASS; FEBRUARY 20, 2004 -- REAL ESTATE FUND C-CLASS; SEPTEMBER 1, 2004 -- LEISURE FUND A-CLASS, PRECIOUS METALS FUND A-CLASS AND REAL ESTATE FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. @ UNAUDITED 68 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ REAL ESTATE FUND H-CLASS SEPTEMBER 30, 2005@ $ 27.85 $ .30 $ 3.98 $ 4.28 $ -- $ -- March 31, 2005 26.65 .58 .77 1.35 (.03) (.12) March 31, 2004* 25.00 .10 1.55 1.65 -- -- RETAILING FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 12.30 (.04) (.22) (.26) -- -- March 31, 2005 11.74 (.06) .62 .56 -- -- March 31, 2004 8.00 (.08) 3.82 3.74 -- -- March 31, 2003 11.12 (.07) (3.05) (3.12) -- -- March 31, 2002 10.29 (.10) .93 .83 -- -- March 31, 2001 13.22 (.09) (2.84) (2.93) -- -- RETAILING FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 11.99 (.07) (.21) (.28) -- -- March 31, 2005 11.49 (.12) .62 .50 -- -- March 31, 2004 7.85 (.13) 3.77 3.64 -- -- March 31, 2003 10.94 (.12) (2.97) (3.09) -- -- March 31, 2002 10.17 (.15) .92 .77 -- -- March 31, 2001 13.18 (.16) (2.85) (3.01) -- -- RETAILING FUND A-CLASS SEPTEMBER 30, 2005@ 12.01 (.06) (.22) (.28) -- -- March 31, 2005* 10.45 (.07) 1.63 1.56 -- -- RETAILING FUND C-CLASS SEPTEMBER 30, 2005@ 11.80 (.10) (.20) (.30) -- -- March 31, 2005 11.37 (.17) .60 .43 -- -- March 31, 2004 7.81 (.18) 3.74 3.56 -- -- March 31, 2003 11.02 (.20) (3.01) (3.21) -- -- March 31, 2002* 10.68 (.20) .54 .34 -- -- TECHNOLOGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 10.35 (.04) 1.05 1.01 -- -- March 31, 2005 11.40 .03 (1.08) (1.05) -- -- March 31, 2004 7.11 (.11) 4.40 4.29 -- -- March 31, 2003 11.00 (.09) (3.80) (3.89) -- -- March 31, 2002 12.70 (.15) (1.55) (1.70) -- -- March 31, 2001 31.59 (.24) (18.65) (18.89) -- -- TECHNOLOGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 10.06 (.07) 1.02 .95 -- -- March 31, 2005 11.13 .02 (1.09) (1.07) -- -- March 31, 2004 6.97 (.16) 4.32 4.16 -- -- March 31, 2003 10.77 (.12) (3.68) (3.80) -- -- March 31, 2002 12.49 (.20) (1.52) (1.72) -- -- March 31, 2001 31.20 (.31) (18.40) (18.71) -- -- TECHNOLOGY FUND A-CLASS SEPTEMBER 30, 2005@ 10.07 (.07) 1.02 .95 -- -- March 31, 2005* 9.32 -- .75 .75 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- REAL ESTATE FUND H-CLASS SEPTEMBER 30, 2005@ $ -- $ 4.28 $ 32.13 15.37% March 31, 2005 (.15) 1.20 27.85 5.06% March 31, 2004* -- 1.65 26.65 6.60% RETAILING FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- (.26) 12.04 (2.11)% March 31, 2005 -- .56 12.30 4.77% March 31, 2004 -- 3.74 11.74 46.75% March 31, 2003 -- (3.12) 8.00 (28.06)% March 31, 2002 -- .83 11.12 8.07% March 31, 2001 -- (2.93) 10.29 (22.16)% RETAILING FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- (.28) 11.71 (2.34)% March 31, 2005 -- .50 11.99 4.35% March 31, 2004 -- 3.64 11.49 46.37% March 31, 2003 -- (3.09) 7.85 (28.24)% March 31, 2002 -- .77 10.94 7.57% March 31, 2001 -- (3.01) 10.17 (22.84)% RETAILING FUND A-CLASS SEPTEMBER 30, 2005@ -- (.28) 11.73 (2.33)% March 31, 2005* -- 1.56 12.01 14.93% RETAILING FUND C-CLASS SEPTEMBER 30, 2005@ -- (.30) 11.50 (2.54)% March 31, 2005 -- .43 11.80 3.78% March 31, 2004 -- 3.56 11.37 45.58% March 31, 2003 -- (3.21) 7.81 (29.13)% March 31, 2002* -- .34 11.02 3.18% TECHNOLOGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 1.01 11.36 9.76% March 31, 2005 -- (1.05) 10.35 (9.21)% March 31, 2004 -- 4.29 11.40 60.34% March 31, 2003 -- (3.89) 7.11 (35.36)% March 31, 2002 -- (1.70) 11.00 (13.39)% March 31, 2001 -- (18.89) 12.70 (59.80)% TECHNOLOGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- .95 11.01 9.44% March 31, 2005 -- (1.07) 10.06 (9.61)% March 31, 2004 -- 4.16 11.13 59.68% March 31, 2003 -- (3.80) 6.97 (35.28)% March 31, 2002 -- (1.72) 10.77 (13.77)% March 31, 2001 -- (18.71) 12.49 (59.97)% TECHNOLOGY FUND A-CLASS SEPTEMBER 30, 2005@ -- .95 11.02 9.43% March 31, 2005* -- .75 10.07 8.05% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- REAL ESTATE FUND H-CLASS SEPTEMBER 30, 2005@ 1.56%** 1.56%** 1.90%** 545% $ 23,769 March 31, 2005 1.58% 1.58% 2.08% 1,773% 8,186 March 31, 2004* 1.61%** 1.61%** 3.83%** 102% 75,916 RETAILING FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.31%** 1.31%** (0.58)%** 546% 6,464 March 31, 2005 1.33% 1.33% (0.54)% 1,505% 7,529 March 31, 2004 1.35% 1.35% (0.78)% 1,825% 11,738 March 31, 2003 1.38% 1.38% (0.82)% 3,788% 2,964 March 31, 2002 1.44% 1.44% (0.92)% 2,030% 21,667 March 31, 2001 1.51% 1.50% (0.78)% 3,062% 33,228 RETAILING FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.81%** 1.81%** (1.18)%** 546% 5,564 March 31, 2005 1.83% 1.83% (1.09)% 1,505% 6,445 March 31, 2004 1.85% 1.85% (1.25)% 1,825% 15,863 March 31, 2003 1.88% 1.88% (1.35)% 3,788% 14,965 March 31, 2002 1.95% 1.95% (1.40)% 2,030% 37,690 March 31, 2001 2.10% 2.09% (1.49)% 3,062% 11,286 RETAILING FUND A-CLASS SEPTEMBER 30, 2005@ 1.61%** 1.61%** (0.90)%** 546% 145 March 31, 2005* 1.68%** 1.68%** (1.03)%** 1,505% 1 RETAILING FUND C-CLASS SEPTEMBER 30, 2005@ 2.32%** 2.32%** (1.65)%** 546% 2,444 March 31, 2005 2.33% 2.33% (1.52)% 1,505% 1,774 March 31, 2004 2.36% 2.36% (1.72)% 1,825% 2,362 March 31, 2003 2.32% 2.32% (1.89)% 3,788% 85 March 31, 2002* 2.70%** 2.70%** (2.13)%** 2,030% 1,028 TECHNOLOGY FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.31%** 1.31%** (0.71)%** 382% 16,199 March 31, 2005 1.31% 1.31% 0.33% 1,304% 13,346 March 31, 2004 1.36% 1.36% (1.07)% 1,853% 17,114 March 31, 2003 1.38% 1.38% (1.13)% 1,938% 8,348 March 31, 2002 1.44% 1.44% (1.21)% 1,017% 35,815 March 31, 2001 1.30% 1.30% (1.01)% 2,202% 26,660 TECHNOLOGY FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.83%** 1.83%** (1.29)%** 382% 20,863 March 31, 2005 1.83% 1.83% 0.21% 1,304% 10,693 March 31, 2004 1.86% 1.86% (1.58)% 1,853% 17,972 March 31, 2003 1.88% 1.88% (1.62)% 1,938% 16,717 March 31, 2002 1.93% 1.93% (1.69)% 1,017% 25,769 March 31, 2001 1.81% 1.81% (1.48)% 2,202% 20,450 TECHNOLOGY FUND A-CLASS SEPTEMBER 30, 2005@ 1.94%** 1.94%** (1.57)%** 382% 884 March 31, 2005* 1.54%** 1.54%** 0.00%** 1,304% 6 * SINCE THE COMMENCEMENT OF OPERATIONS: MAY 9, 2001 -- RETAILING FUND C-CLASS; FEBRUARY 20, 2004 -- REAL ESTATE FUND H-CLASS; SEPTEMBER 1, 2004 -- RETAILING FUND A-CLASS AND TECHNOLOGY FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 69 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ TECHNOLOGY FUND C-CLASS SEPTEMBER 30, 2005@ $ 10.01 $ (.10) $ 1.01 $ .91 $ -- $ -- March 31, 2005 11.10 -- (1.09) (1.09) -- -- March 31, 2004 7.00 (.21) 4.31 4.10 -- -- March 31, 2003 10.90 (.18) (3.72) (3.90) -- -- March 31, 2002* 14.82 (.25) (3.67) (3.92) -- -- TELECOMMUNICATIONS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 14.33 .17 1.74 1.91 -- -- March 31, 2005 15.48 .09 (1.24) (1.15) -- -- March 31, 2004 10.05 -- 5.48 5.48 (.05) -- March 31, 2003++ 15.12 .06 (5.13) (5.07) -- -- March 31, 2002++ 24.03 (.12) (8.70) (8.82) -- (.09) March 31, 2001++ 61.17 (.30) (36.84) (37.14) -- -- TELECOMMUNICATIONS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 13.88 .09 1.75 1.84 -- -- March 31, 2005 15.07 .03 (1.22) (1.19) -- -- March 31, 2004 9.81 (.08) 5.39 5.31 (.05) -- March 31, 2003++ 14.76 (.09) (4.86) (4.95) -- -- March 31, 2002++ 23.58 (.06) (8.67) (8.73) -- (.09) March 31, 2001++ 60.39 (.54) (36.27) (36.81) -- -- TELECOMMUNICATIONS FUND A-CLASS SEPTEMBER 30, 2005@ 13.90 .06 1.78 1.84 -- -- March 31, 2005* 13.55 .11 .24 .35 -- -- TELECOMMUNICATIONS FUND C-CLASS SEPTEMBER 30, 2005@ 13.81 .02 1.75 1.77 -- -- March 31, 2005 15.06 (.07) (1.18) (1.25) -- -- March 31, 2004 9.84 (.15) 5.42 5.27 (.05) -- March 31, 2003++ 14.97 (.09) (5.04) (5.13) -- -- March 31, 2002*++ 26.91 (.24) (11.61) (11.85) -- (.09) TRANSPORTATION FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 22.42 (.04) .34 .30 -- -- March 31, 2005 18.84 (.11) 3.69 3.58 -- -- March 31, 2004 15.03 (.06) 3.87 3.81 -- -- March 31, 2003++ 20.85 (.12) (5.70) (5.82) -- -- March 31, 2002++ 19.26 (.09) 1.68 1.59 -- -- March 31, 2001++ 18.72 -- .54 .54 -- -- TRANSPORTATION FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 21.31 (.09) .31 .22 -- -- March 31, 2005 18.02 (.21) 3.50 3.29 -- -- March 31, 2004 14.40 (.12) 3.74 3.62 -- -- March 31, 2003++ 19.98 (.15) (5.43) (5.58) -- -- March 31, 2002++ 18.57 (.21) 1.62 1.41 -- -- March 31, 2001++ 18.48 (.03) .12 .09 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- TECHNOLOGY FUND C-CLASS SEPTEMBER 30, 2005@ $ -- $ .91 $ 10.92 9.09% March 31, 2005 -- (1.09) 10.01 (9.82)% March 31, 2004 -- 4.10 11.10 58.57% March 31, 2003 -- (3.90) 7.00 (35.78)% March 31, 2002* -- (3.92) 10.90 (26.45)% TELECOMMUNICATIONS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 1.91 16.24 13.33% March 31, 2005 -- (1.15) 14.33 (7.43)% March 31, 2004 (.05) 5.43 15.48 54.59% March 31, 2003++ -- (5.07) 10.05 (33.53)% March 31, 2002++ (.09) (8.91) 15.12 (36.84)% March 31, 2001++ -- (37.14) 24.03 (60.72)% TELECOMMUNICATIONS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 1.84 15.72 13.26% March 31, 2005 -- (1.19) 13.88 (7.90)% March 31, 2004 (.05) 5.26 15.07 54.20% March 31, 2003++ -- (4.95) 9.81 (33.54)% March 31, 2002++ (.09) (8.82) 14.76 (37.16)% March 31, 2001++ -- (36.81) 23.58 (60.95)% TELECOMMUNICATIONS FUND A-CLASS SEPTEMBER 30, 2005@ -- 1.84 15.74 13.24% March 31, 2005* -- .35 13.90 2.58% TELECOMMUNICATIONS FUND C-CLASS SEPTEMBER 30, 2005@ -- 1.77 15.58 12.82% March 31, 2005 -- (1.25) 13.81 (8.30)% March 31, 2004 (.05) 5.22 15.06 53.62% March 31, 2003++ -- (5.13) 9.84 (34.27)% March 31, 2002*++ (.09) (11.94) 14.97 (44.16)% TRANSPORTATION FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- .30 22.72 1.34% March 31, 2005 -- 3.58 22.42 19.00% March 31, 2004 -- 3.81 18.84 25.35% March 31, 2003++ -- (5.82) 15.03 (27.91)% March 31, 2002++ -- 1.59 20.85 8.26% March 31, 2001++ -- .54 19.26 2.88% TRANSPORTATION FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- .22 21.53 1.03% March 31, 2005 -- 3.29 21.31 18.26% March 31, 2004 -- 3.62 18.02 25.14% March 31, 2003++ -- (5.58) 14.40 (27.93)% March 31, 2002++ -- 1.41 19.98 7.59% March 31, 2001++ -- .09 18.57 0.49% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- TECHNOLOGY FUND C-CLASS SEPTEMBER 30, 2005@ 2.34%** 2.34%** (1.89)%** 382% $ 2,870 March 31, 2005 2.32% 2.32% 0.00% 1,304% 1,284 March 31, 2004 2.36% 2.36% (2.13)% 1,853% 1,101 March 31, 2003 2.37% 2.37% (2.07)% 1,938% 434 March 31, 2002* 2.43%** 2.43%** (2.22)%** 1,017% 424 TELECOMMUNICATIONS FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.30%** 1.30%** 2.14%** 625% 6,639 March 31, 2005 1.35% 1.35% 0.60% 1,142% 6,003 March 31, 2004 1.37% 1.37% 0.01% 1,506% 14,406 March 31, 2003++ 1.38% 1.38% 0.46% 2,431% 9,152 March 31, 2002++ 1.51% 1.51% (0.60)% 1,192% 4,530 March 31, 2001++ 1.37% 1.37% (0.65)% 1,273% 9,924 TELECOMMUNICATIONS FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.82%** 1.82%** 1.28%** 625% 3,145 March 31, 2005 1.86% 1.86% 0.19% 1,142% 1,922 March 31, 2004 1.87% 1.87% (0.58)% 1,506% 7,376 March 31, 2003++ 1.86% 1.86% (0.68)% 2,431% 898 March 31, 2002++ 1.87% 1.87% (0.29)% 1,192% 931 March 31, 2001++ 1.87% 1.86% (1.24)% 1,273% 19,154 TELECOMMUNICATIONS FUND A-CLASS SEPTEMBER 30, 2005@ 1.63%** 1.63%** 0.85%** 625% 2 March 31, 2005* 1.54%** 1.54%** 1.25%** 1,142% 3 TELECOMMUNICATIONS FUND C-CLASS SEPTEMBER 30, 2005@ 2.37%** 2.37%** 0.27%** 625% 1,926 March 31, 2005 2.38% 2.38% (0.51)% 1,142% 1,784 March 31, 2004 2.37% 2.37% (1.09)% 1,506% 3,635 March 31, 2003++ 2.41% 2.41% (0.71)% 2,431% 774 March 31, 2002*++ 2.43%** 2.43%** (1.25)%** 1,192% 19 TRANSPORTATION FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.32%** 1.32%** (0.37)%** 675% 11,639 March 31, 2005 1.32% 1.32% (0.51)% 929% 7,890 March 31, 2004 1.36% 1.36% (0.34)% 1,624% 3,792 March 31, 2003++ 1.40% 1.40% (0.70)% 2,786% 960 March 31, 2002++ 1.56% 1.56% (0.51)% 1,704% 18,215 March 31, 2001++ 1.55% 1.54% (0.05)% 1,293% 8,246 TRANSPORTATION FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.81%** 1.81%** (0.87)%** 675% 4,176 March 31, 2005 1.82% 1.82% (1.05)% 929% 5,748 March 31, 2004 1.83% 1.83% (0.73)% 1,624% 4,284 March 31, 2003++ 1.92% 1.92% (0.94)% 2,786% 3,561 March 31, 2002++ 2.23% 2.23% (1.16)% 1,704% 23,807 March 31, 2001++ 2.08% 2.08% (0.16)% 1,293% 233 * SINCE THE COMMENCEMENT OF OPERATIONS: APRIL 18, 2001 -- TECHNOLOGY FUND C-CLASS AND TELECOMMUNICATIONS FUND C-CLASS; SEPTEMBER 1, 2004 -- TELECOMMUNICATIONS FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. @ UNAUDITED 70 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION FUND A-CLASS SEPTEMBER 30, 2005@ $ 21.34 $ (.05) $ .31 $ .26 $ -- $ -- March 31, 2005* 18.73 (.09) 2.70 2.61 -- -- TRANSPORTATION FUND C-CLASS SEPTEMBER 30, 2005@ 21.71 (.14) .32 .18 -- -- March 31, 2005 18.43 (.32) 3.60 3.28 -- -- March 31, 2004 14.85 (.25) 3.83 3.58 -- -- March 31, 2003++ 20.73 (.27) (5.61) (5.88) -- -- March 31, 2002*++ 20.04 (.24) .93 .69 -- -- UTILITIES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 23.62 .25 3.38 3.63 -- -- March 31, 2005 20.57 .53 2.82 3.35 (.30) -- March 31, 2004 16.38 .45 4.71 5.16 (.97) -- March 31, 2003++ 25.44 .60 (9.12) (8.52) (.54) -- March 31, 2002++ 35.52 .60 (9.12) (8.52) (1.56) -- March 31, 2001*++ 30.00 .54 4.98 5.52 -- -- UTILITIES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 22.96 .19 3.28 3.47 -- -- March 31, 2005 20.10 .42 2.74 3.16 (.30) -- March 31, 2004 16.11 .30 4.66 4.96 (.97) -- March 31, 2003++ 25.23 .33 (8.91) (8.58) (.54) -- March 31, 2002++ 35.43 .36 (9.00) (8.64) (1.56) -- March 31, 2001*++ 30.00 .36 5.07 5.43 -- -- UTILITIES FUND A-CLASS SEPTEMBER 30, 2005@ 23.00 .23 3.27 3.50 -- -- March 31, 2005* 20.66 .40 2.24 2.64 (.30) -- UTILITES FUND C-CLASS SEPTEMBER 30, 2005@ 22.47 .12 3.20 3.32 -- -- March 31, 2005 19.77 .29 2.71 3.00 (.30) -- March 31, 2004 15.93 .22 4.59 4.81 (.97) -- March 31, 2003++ 25.08 .30 (8.91) (8.61) (.54) -- March 31, 2002*++ 37.98 (.12) (11.22) (11.34) (1.56) -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ---------------------------------------------------------------------------------------------------- TRANSPORTATION FUND A-CLASS SEPTEMBER 30, 2005@ $ -- $ .26 $ 21.60 1.22% March 31, 2005* -- 2.61 21.34 13.93% TRANSPORTATION FUND C-CLASS SEPTEMBER 30, 2005@ -- .18 21.89 0.83% March 31, 2005 -- 3.28 21.71 17.80% March 31, 2004 -- 3.58 18.43 24.11% March 31, 2003++ -- (5.88) 14.85 (28.36)% March 31, 2002*++ -- .69 20.73 3.44% UTILITIES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ -- 3.63 27.25 15.37% March 31, 2005 (.30) 3.05 23.62 16.35% March 31, 2004 (.97) 4.19 20.57 32.11% March 31, 2003++ (.54) (9.06) 16.38 (33.55)% March 31, 2002++ (1.56) (10.08) 25.44 (24.07)% March 31, 2001*++ -- 5.52 35.52 18.40% UTILITIES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ -- 3.47 26.43 15.11% March 31, 2005 (.30) 2.86 22.96 15.78% March 31, 2004 (.97) 3.99 20.10 31.39% March 31, 2003++ (.54) (9.12) 16.11 (34.07)% March 31, 2002++ (1.56) (10.20) 25.23 (24.47)% March 31, 2001*++ -- 5.43 35.43 18.10% UTILITIES FUND A-CLASS SEPTEMBER 30, 2005@ -- 3.50 26.50 15.22% March 31, 2005* (.30) 2.34 23.00 12.84% UTILITES FUND C-CLASS SEPTEMBER 30, 2005@ -- 3.32 25.79 14.78% March 31, 2005 (.30) 2.70 22.47 15.23% March 31, 2004 (.97) 3.84 19.77 30.80% March 31, 2003++ (.54) (9.15) 15.93 (34.40)% March 31, 2002*++ (1.56) (12.90) 25.08 (29.95)% RATIOS TO AVERAGE NET ASSETS: ----------------------------------------- NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES (LOSS) RATE*** OMITTED) - ------------------------------------------------------------------------------------------------------------- TRANSPORTATION FUND A-CLASS SEPTEMBER 30, 2005@ 1.60%** 1.60%** (0.45)%** 675% $ 179 March 31, 2005* 1.54%** 1.54%** (0.71)%** 929% 22 TRANSPORTATION FUND C-CLASS SEPTEMBER 30, 2005@ 2.32%** 2.32%** (1.34)%** 675% 793 March 31, 2005 2.32% 2.32% (1.51)% 929% 1,807 March 31, 2004 2.36% 2.36% (1.53)% 1,624% 656 March 31, 2003++ 2.36% 2.36% (1.51)% 2,786% 514 March 31, 2002*++ 2.59%** 2.59%** (1.35)%** 1,704% 654 UTILITIES FUND INVESTOR CLASS SEPTEMBER 30, 2005@ 1.32%** 1.32%** 2.01%** 319% 47,720 March 31, 2005 1.33% 1.33% 2.46% 1,124% 17,861 March 31, 2004 1.35% 1.35% 2.50% 1,609% 19,170 March 31, 2003++ 1.39% 1.39% 3.24% 3,158% 9,978 March 31, 2002++ 1.54% 1.54% 2.00% 2,418% 26,539 March 31, 2001*++ 1.59%** 1.59%** 1.65%** 1,591% 15,566 UTILITIES FUND ADVISOR CLASS SEPTEMBER 30, 2005@ 1.83%** 1.83%** 1.54%** 319% 14,541 March 31, 2005 1.83% 1.83% 1.95% 1,124% 8,045 March 31, 2004 1.84% 1.84% 1.91% 1,609% 1,072 March 31, 2003++ 1.89% 1.89% 1.74% 3,158% 2,239 March 31, 2002++ 1.85% 1.85% 1.15% 2,418% 6,053 March 31, 2001*++ 2.09%** 2.08%** 1.03%** 1,591% 14,360 UTILITIES FUND A-CLASS SEPTEMBER 30, 2005@ 1.61%** 1.61%** 1.86%** 319% 2,041 March 31, 2005* 1.54%** 1.54%** 2.98%** 1,124% 128 UTILITES FUND C-CLASS SEPTEMBER 30, 2005@ 2.33%** 2.33% 1.01%** 319% 9,530 March 31, 2005 2.32% 2.32% 1.39% 1,124% 4,807 March 31, 2004 2.36% 2.36% 1.19% 1,609% 3,948 March 31, 2003++ 2.42% 2.42% 1.56% 3,158% 939 March 31, 2002*++ 2.76%** 2.76%** (0.48)%** 2,418% 192 * SINCE THE COMMENCEMENT OF OPERATIONS: APRIL 3, 2000 -- UTILITIES FUND INVESTOR CLASS AND ADVISOR CLASS; APRIL 27, 2001 -- UTILITIES FUND C-CLASS; MAY 14, 2001 -- TRANSPORTATION FUND C-CLASS; SEPTEMBER 1, 2004 -- TRANSPORTATION FUND A-CLASS AND UTILITIES FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ PER SHARE AMOUNTS FOR THE PERIODS ENDED MARCH 31, 2001 THROUGH MARCH 31, 2003 HAVE BEEN RESTATED TO REFLECT A 1:3 REVERSE STOCK SPLIT EFFECTIVE APRIL 21, 2003. @ UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 71 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Rydex Series Funds (the "Trust") is registered with the SEC under the Investment Company Act of 1940 (the "1940 Act") as a non-diversified, open-ended investment company, and is authorized to issue an unlimited number of no par value shares. The Trust offers five separate classes of shares, Investor Class Shares, Advisor Class Shares, A-Class Shares, C-Class Shares, and H-Class Shares. C-Class Shares have a 1% Contingent Deferred Sales Charge ("CDSC") if Shares are redeemed within 12 months of purchase. Sales of shares of each Class are made without a sales charge at the net asset value per share, with the exception of A-Class Shares. A-Class Shares are sold at net asset value, plus the applicable front-end sales charge. The sales charge varies depending on the amount of your purchase, but will not exceed 4.75%. A-Class Share purchases of $1 million or more have a 1% CDSC if Shares are redeemed within 18 months of purchase. The current sales charge rates are as follows: SALES CHARGE SALES CHARGE AS % OF AS % OF NET AMOUNT OF INVESTMENT OFFERING PRICE AMOUNT INVESTED - -------------------------------------------------------------------------------- Less than $100,000 4.75% 4.99% $100,000 but less than $250,000 3.75% 3.90% $250,000 but less than $500,000 2.75% 2.83% $500,000 but less than $1,000,000 1.60% 1.63% $1,000,000 or greater 0.00% 0.00% At September 30, 2005, the Trust consisted of forty-eight separate series: twenty-four Benchmark Funds, one Money Market Fund, one Absolute Return Strategies Fund, one Hedged Equity Fund, nineteen Sector Funds, and two Strategic Funds. This report covers the nineteen Sector Funds (the "Funds"), while the Money Market Fund, the Benchmark Funds, the Strategic Funds, the Absolute Return Strategies Fund and the Hedged Equity Fund are contained in separate reports. The following significant accounting policies are in conformity with accounting principles generally accepted in the United States of America and are consistently followed by the Trust. A. Equity securities listed on an exchange (New York Stock Exchange ("NYSE") or American Stock Exchange) are valued at the last quoted sales price as of close of business on the NYSE, usually 4:00 p.m., Eastern Time, on the valuation date. Equity securities listed on the Nasdaq market system are valued at the Nasdaq Official Closing Price, usually as of 4:00 p.m., Eastern Time, on the valuation date. Listed options held by the Trust are valued at the Official Settlement Price listed by the exchange, usually as of 4:00 p.m., Eastern Time. Over-the-Counter options held by the Trust are valued using the average bid price obtained from one or more security dealers. The value of futures contracts purchased and sold by the Trust are 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 last quoted sales price, usually as of 4:00 p.m., Eastern Time, on the valuation date. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., Eastern Time, 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., Eastern Time, to determine if fair valuation would provide a more accurate valuation. Short-term securities, if any, are valued at amortized cost, which approximates market value. The value of domestic equity index swap agreements entered into by the Funds is accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the last quoted value of the index that the swap pertains to at the close of the NYSE, usually 4:00 p.m., Eastern Time. The swap's market value is then adjusted to include dividends accrued, financing charges and/or interest associated with the swap agreements. The value of foreign equity index, commodity index, and U.S. Dollar index swap agreements entered into by the Funds are accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the price at which orders are being filled at the close of the NYSE, usually 4:00 p.m., Eastern Time. In the event that no order is filled at 4:00 p.m., Eastern Time, the security dealer provides a fair value quote at which the swap agreement is valued. The swap's market value is 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 valued at fair value as determined in good faith by or under direction of the Board of Trustees or by Rydex Global Advisors (the "Advisor") using methods established or ratified by the Board of Trustees. These methods include, but are not limited to: (i) general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, 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 72 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- these contracts and other derivative investments trade in the cash market; and (iii) other information and considerations, including current values in related-markets. B. Securities 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. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Interest income, including amortization of premiums and accretion of discount, is accrued on a daily basis. C. Distributions of net investment income and net realized capital gains are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for items such as deferral of wash sales and post-October losses and regulated futures contracts and options. Net investment income and loss, net realized gains and losses, and net assets are not affected by these differences. D. Each Fund seeks capital appreciation and invests substantially all of its assets in equity securities of companies involved in its sector, with the exception of the Commodities Fund, which invests primarily in "commodity related" derivative instruments. The Funds may also purchase American Depository Receipts ("ADRs") and U.S. Government securities, enter into repurchase agreements, and engage in futures, options and equity swap transactions. Short sales are transactions in which the Fund sells a security it does not own. If the security the Fund sold short goes down 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 goes up 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. E. The Trust may purchase or sell stock and bond index futures contracts and options on such futures contracts. Futures contracts are contracts for delayed delivery of securities at a specified future delivery date and at a specific price. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. F. The Trust may enter into equity index swap agreements, which are over-the-counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified equity security, basket of equity securities, or equity index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different equity security, basket of equity securities, or equity index. Swap agreements are used to obtain exposure to an equity or market without owning or taking physical custody of securities. G. The Fund may leave Cash in Custodian Bank overnight in its cash account with the custodian, U.S. Bank. Periodically, a Fund may have Cash Payable to 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. 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 fees related to Advisor Class Shares, A-Class Shares and H-Class Shares and service and distribution fees related to C-Class Shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net asset value of each Fund included in the Trust. I. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 2. FINANCIAL INSTRUMENTS As part of its investment strategy, the Trust may utilize a variety of derivative instruments, including options, futures, options on futures, and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities. In 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 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 73 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- unknown, as this would involve future claims that may be made against the Funds and/or its affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. There are several risks in connection with the use of futures contracts. Futures contracts involve, to varying degrees, risk of loss in excess of amounts reflected in the financial statements. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market. The use of equity swaps involves risks that are different from those associated with ordinary portfolio securities transactions. Swap agreements may be considered to be illiquid. Although the Trust will not enter into any swap agreement unless the Advisor believes that the other party to the transaction is creditworthy, a Fund does bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of the agreement counterparty. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. In conjunction with the use of options, futures, options on futures, swap agreements, as well as short sales of securities, 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 segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund. The risks inherent in the use of options, futures contracts, options on futures contracts, swap agreements as well as short sales of securities include i) adverse changes in the value of such instruments; ii) imperfect correlation between the price of the instruments and movements in the price of the underlying securities, indices, or futures contracts; iii) the possible absence of a liquid secondary market for any particular instrument at any time; and iv) the potential of counterparty default. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of an investment advisory contract, the Trust pays the Advisor, an affiliated entity, investment advisory fees calculated at an annualized rate of 0.85% of the average daily net assets of each of the Funds, except the Commodities Fund and the Precious Metals Fund, which is 0.75% of the average daily net assets. Certain officers and trustees of the Trust are also officers of the Advisor. Rydex Fund Services, Inc. (the "Servicer"), an affiliated entity, provides transfer agent and administrative services to the Trust for fees calculated at an annualized rate of 0.25% of the average daily net assets of each of the Sector Funds. The Servicer also provides accounting services to the Trust calculated at an annualized rate of 0.10% on the first $250 million of the average daily net assets, 0.075% on the next $250 million of the average daily net assets, 0.05% on the next $250 million of the average daily net assets, and 0.03% on the average daily net assets over $750 million of each of the Sector Funds. Certain officers and trustees of the Trust are also officers of the Servicer. The Servicer also provides other necessary services to the Trust, such as accounting and auditing services, legal services, printing and mailing, etc., on a pass-through basis. Such expenses vary from Fund to Fund and are allocated to the Funds based on relative net assets. The Trust has adopted a Distribution Plan and Shareholder Services Plan applicable to its Advisor Class Shares and a Distribution Plan applicable to A-Class Shares and H-Class Shares for which Rydex Distributors, Inc. (the "Distributor"), an affiliated entity, and other firms that provide distribution and/or shareholder services ("Service Providers") may receive compensation. If a Service Provider provides distribution services, the Trust will pay distribution fees to the Distributor at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. The Distributor, in turn, will pay the Service Provider out of its fees. The Distributor may, at its discretion, retain a portion of such payments to compensate itself for distribution services. With regard to Advisor Class Shares only, if a Service Provider provides shareholder services, the Distributor will receive shareholder servicing fees from the Trust at an annual rate not to exceed 0.25% of average daily net assets. The Distributor, in turn, will pay the Service Provider out of its fees. The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class Shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds' C-Class Shares average daily net assets. The annual 0.25% service fee compensates the shareholder's financial advisor for providing on-going services to the shareholder. The annual 0.75% distribution fee reimburses the Distributor for paying the shareholder's financial advisor an ongoing sales commission. The Distributor advances the first year's service and distribution fees to the Financial Advisor. The Distributor retains the service and 74 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- distribution fees on accounts with no authorized dealer of record. Certain officers and trustees of the Trust are also officers of the Distributor. 4. FEDERAL INCOME TAX INFORMATION The Funds intend to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute all net investment income and capital gains to shareholders. Therefore, no Federal income tax provision is required. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for derivatives, foreign currency transactions, losses deferred due to wash sales, losses deferred due to post-October losses, and excise tax regulations. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital. This includes net operating losses not utilized during the current year, capital loss carryforward expired, and the utilization of earnings and profits distributed to the sharesholders on redemption of shares as part of the dividends paid deduction for income tax purposes. These reclassifications have no effect on net assets or net asset values per share. Any taxable gain remaining at fiscal year end is distributed in the following year. At September 30, 2005, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value were as follows: TAX TAX NET TAX UNREALIZED UNREALIZED UNREALIZED FUND COST GAIN LOSS GAIN - -------------------------------------------------------------------------------------------- Banking Fund $ 14,811,900 $ 773,222 $ (15,991) $ 757,231 Basic Materials Fund 35,427,802 4,686,352 (231,070) 4,455,282 Biotechnology Fund 132,080,492 56,952,609 (1,040,079) 55,912,530 Commodities Fund 20,635,225 876,173 -- 876,173 Consumer Products Fund 24,133,864 3,444,440 (43,014) 3,401,426 Electronics Fund 29,854,498 14,123,476 (32,737) 14,090,739 Energy Fund 177,632,656 58,968,480 (271,676) 58,696,804 Energy Services Fund 181,863,007 55,068,490 (84,847) 54,983,643 Financial Services Fund 26,302,984 1,670,630 (381,239) 1,289,391 Health Care Fund 97,991,534 13,283,783 (638,621) 12,645,162 Internet Fund 12,268,718 2,432,056 (202) 2,431,854 Leisure Fund 13,327,451 2,059,744 (51,934) 2,007,810 Precious Metals Fund 217,984,773 78,083,337 (1,203,830) 76,879,508 Real Estate Fund 27,449,154 2,616,906 (29,485) 2,587,421 Retailing Fund 15,330,002 2,789,145 (91,754) 2,697,391 Technology Fund 41,800,265 7,502,166 (254,701) 7,247,465 Telecommunications Fund 11,191,589 3,273,686 (11,471) 3,262,215 Transportation Fund 15,188,765 2,656,613 (28,120) 2,628,493 Utilities Fund 80,666,688 9,769,682 (58,028) 9,711,654 5. REPURCHASE AGREEMENTS The Trust transfers uninvested cash balances into a single joint account, along with uninvested cash balances of the OTC Fund, the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the U.S. Government Bond Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, the Large-Cap Growth Fund, the Strengthening Dollar Fund, the Weakening Dollar Fund, the U.S. Government Money Market Fund, the Nova Master Portfolio, the Ursa Master Portfolio, the Arktos Master Portfolio, the Juno Master Portfolio, the Core Equity Fund, the Sector Rotation Fund, the Absolute Return Strategies Fund and the Hedged Equity Fund (all included in the Trust, but contained in separate reports). The daily aggregate balance is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury. The collateral is in the possession of the Trust's custodian and is evaluated daily to ensure that its market value exceeds by, at a minimum, 102% of the delivery value of the repurchase agreement at maturity. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 75 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- The repurchase agreements executed by the joint account and outstanding as of September 30, 2005, were as follows: COUNTERPARTY TERMS OF AGREEMENT FACE VALUE MARKET VALUE MATURITY VALUE - ------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc. 3.25% due 10/03/05 $ 525,000,000 $ 525,000,000 $ 525,142,188 Citigroup, Inc. 3.24% due 10/03/05 375,000,000 375,000,000 375,101,250 Lehman Brothers, Inc. 3.25% due 10/03/05 302,618,292 302,618,292 302,700,251 Morgan Stanley 3.24% due 10/03/05 250,000,000 250,000,000 250,067,500 - ------------------------------------------------------------------------------------------------------- $1,452,618,292 $1,453,011,189 - ------------------------------------------------------------------------------------------------------- As of September 30, 2005, the collateral for the repurchase agreements in the joint account was as follows: SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE - -------------------------------------------------------------------------------- U.S. Treasury Bonds 6.125% - 8.000% $ 203,611,000 $ 257,500,263 U.S. Treasury Notes 3.000% - 3.875% 1,040,637,912 1,034,907,188 U.S. Currency 0.000% 188,000,000 188,000,000 - -------------------------------------------------------------------------------- $1,480,407,451 - -------------------------------------------------------------------------------- In the event of counterparty default, the Trust has the right to collect the collateral to offset losses incurred. There is potential loss to the Trust in the event the Trust is delayed or prevented from exercising its 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 Trust seeks to assert its rights. The Trust's investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the credit worthiness of those banks and dealers with which the Trust enters into repurchase agreements to evaluate potential risks. 6. SECURITIES TRANSACTIONS During the period ended September 30, 2005, cost of purchases and proceeds from sales of investment securities, excluding short-term and temporary cash investments, were: BASIC BIOTECH- CONSUMER ENERGY BANKING MATERIALS NOLOGY COMMODITIES PRODUCTS ELECTRONICS ENERGY SERVICES FUND FUND FUND FUND FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- Purchases $106,083,770 $135,189,402 $259,138,063 $ -- $149,032,956 $197,054,560 $407,831,386 $229,043,380 Sales $100,670,784 $151,082,521 $211,894,597 $ -- $175,110,670 $208,221,602 $394,332,526 $207,571,180 FINANCIAL HEALTH PRECIOUS REAL SERVICES CARE INTERNET LEISURE METALS ESTATE RETAILING TECHNOLOGY FUND FUND FUND FUND FUND FUND FUND FUND - --------------------------------------------------------------------------------------------------------------------------------- Purchases $130,945,818 $309,184,706 $118,012,308 $ 77,245,891 $307,922,904 $221,677,810 $136,112,288 $161,309,604 Sales $146,832,678 $278,937,512 $112,784,162 $107,063,229 $266,148,394 $205,755,595 $136,387,191 $148,329,734 TELECOMMU- TRANSPOR- NICATIONS TATION UTILITIES FUND FUND FUND - ------------------------------------------------------ Purchases $ 89,453,999 $ 85,730,140 $234,514,214 Sales $ 88,685,928 $ 83,905,221 $199,633,324 76 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 7. SHARE TRANSACTIONS The Trust is authorized to distribute an unlimited number of no par value shares. Transactions in shares for the periods presented were: PURCHASED THROUGH SHARES PURCHASED DIVIDEND REINVESTMENT - ------------------------------------------------------------------------------------------ PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------ BANKING FUND Investor Class 11,071,384 23,295,878 -- 13,430 Advisor Class 1,188,212 7,579,880 -- 11,287 A-Class 5,234 3,495* -- 74* C-Class 488,662 2,096,355 -- 1,958 BASIC MATERIALS FUND Investor Class 4,715,229 14,930,185 -- -- Advisor Class 785,492 3,451,617 -- -- A-Class 7,798 21,600* -- -- C-Class 423,865 1,628,841 -- -- BIOTECHNOLOGY FUND Investor Class 15,236,969 48,992,037 -- -- Advisor Class 3,111,906 2,977,372 -- -- A-Class 48,182 5,666* -- -- C-Class 777,273 1,611,589 -- -- COMMODITIES FUND** A-Class 44,076 -- -- -- C-Class 124,268 -- -- -- H-Class 2,020,052 -- -- -- CONSUMER PRODUCTS FUND Investor Class 2,377,628 11,770,064 -- 128 Advisor Class 503,557 4,310,299 -- 225 A-Class 25,470 16,232* -- -- C-Class 2,280,867 2,021,995 -- 75 ELECTRONICS FUND Investor Class 25,958,757 71,617,772 -- -- Advisor Class 3,212,291 5,499,673 -- -- A-Class 71,613 271* -- -- C-Class 534,534 1,771,576 -- -- ENERGY FUND Investor Class 24,354,784 60,798,285 -- 2,191 Advisor Class 2,870,340 8,630,164 -- 487 A-Class 580,471 78,501* -- 2* C-Class 3,296,946 5,409,462 -- 254 SHARES REDEEMED NET SHARES PURCHASED (REDEEMED) - ------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------- BANKING FUND Investor Class (10,580,407) (24,047,095) 490,977 (737,787) Advisor Class (1,318,496) (7,664,012) (130,284) (72,845) A-Class (3,810) (2,006)* 1,424 1,563* C-Class (331,839) (2,193,967) 156,823 (95,654) BASIC MATERIALS FUND Investor Class (5,297,446) (14,988,451) (582,217) (58,266) Advisor Class (909,049) (3,558,087) (123,557) (106,470) A-Class (6,201) (14,561)* 1,597 7,039* C-Class (285,707) (1,591,918) 138,158 36,923 BIOTECHNOLOGY FUND Investor Class (13,721,504) (51,331,712) 1,515,465 (2,339,675) Advisor Class (2,227,457) (3,012,236) 884,449 (34,864) A-Class (16,509) (1,267)* 31,673 4,399* C-Class (617,310) (1,635,072) 159,963 (23,483) COMMODITIES FUND** A-Class (8,630) -- 35,446 -- C-Class (52,519) -- 71,749 -- H-Class (1,350,864) -- 669,188 -- CONSUMER PRODUCTS FUND Investor Class (2,690,539) (12,084,424) (312,911) (314,232) Advisor Class (907,668) (3,882,393) (404,111) 428,131 A-Class (3,347) (632)* 22,123 15,600* C-Class (2,480,129) (1,902,074) (199,262) 119,996 ELECTRONICS FUND Investor Class (27,157,675) (72,425,283) (1,198,918) (807,511) Advisor Class (3,029,560) (4,488,866) 182,731 1,010,807 A-Class (11,038) (163)* 60,575 108* C-Class (524,290) (1,642,995) 10,244 128,581 ENERGY FUND Investor Class (24,446,189) (59,447,765) (91,405) 1,352,711 Advisor Class (2,809,026) (7,548,827) 61,314 1,081,824 A-Class (284,301) (33,921)* 296,170 44,582* C-Class (3,099,607) (4,883,626) 197,339 526,090 * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. ** SINCE THE COMMENCEMENT OF OPERATIONS: MAY 25, 2005. + UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 77 NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- PURCHASED THROUGH SHARES PURCHASED DIVIDEND REINVESTMENT - ------------------------------------------------------------------------------------------ PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------ ENERGY SERVICES FUND Investor Class 8,823,911 19,417,507 -- -- Advisor Class 1,896,241 4,751,943 -- -- A-Class 69,495 28,997* -- -- C-Class 742,313 2,047,670 -- -- FINANCIAL SERVICES FUND Investor Class 5,919,490 22,725,546 -- 4,601 Advisor Class 1,833,448 7,542,996 -- 16,538 A-Class 40,318 3,231* -- 13* C-Class 828,448 2,791,751 -- 1,105 HEALTH CARE FUND Investor Class 24,278,911 31,471,311 -- -- Advisor Class 3,374,284 6,443,013 -- -- A-Class 69,451 2,372* -- -- C-Class 1,532,232 2,192,906 -- -- INTERNET FUND Investor Class 3,675,970 14,172,147 -- -- Advisor Class 817,205 1,204,965 -- -- A-Class 2,459 23,750* -- -- C-Class 126,388 478,480 -- -- LEISURE FUND Investor Class 1,972,778 11,597,001 -- -- Advisor Class 552,559 4,833,064 -- -- A-Class 1,007 14,935* -- -- C-Class 262,167 1,743,918 -- -- PRECIOUS METALS FUND Investor Class 18,034,852 37,551,246 -- -- Advisor Class 829,184 2,981,129 -- -- A-Class 49,971 9,905* -- -- C-Class 445,732 1,919,001 -- -- REAL ESTATE FUND A-Class 34,103 18,469* -- 2* C-Class 411,389 1,813,344 -- 376 H-Class 11,532,622 37,395,591 -- 6,652 SHARES REDEEMED NET SHARES PURCHASED (REDEEMED) - ------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------- ENERGY SERVICES FUND Investor Class (8,673,831) (18,288,460) 150,080 1,129,047 Advisor Class (1,845,235) (5,102,424) 51,006 (350,481) A-Class (18,903) (18,293)* 50,592 10,704* C-Class (562,532) (1,784,007) 179,781 263,663 FINANCIAL SERVICES FUND Investor Class (6,097,746) (25,154,000) (178,256) (2,423,853) Advisor Class (3,075,369) (8,871,317) (1,241,921) (1,311,783) A-Class (245) (2,774)* 40,073 470* C-Class (797,087) (2,846,263) 31,361 (53,407) HEALTH CARE FUND Investor Class (22,506,118) (30,262,009) 1,772,793 1,209,302 Advisor Class (3,032,388) (7,332,507) 341,896 (889,494) A-Class (20,238) (2,286)* 49,213 86* C-Class (1,332,881) (2,099,736) 199,351 93,170 INTERNET FUND Investor Class (3,595,290) (14,439,631) 80,680 (267,484) Advisor Class (762,214) (1,525,482) 54,991 (320,517) A-Class (121) (23,625)* 2,338 125* C-Class (129,049) (472,026) (2,661) 6,454 LEISURE FUND Investor Class (2,328,083) (12,007,565) (355,305) (410,564) Advisor Class (1,177,704) (5,375,390) (625,145) (542,326) A-Class (762) (14,518)* 245 417* C-Class (313,151) (1,739,165) (50,984) 4,753 PRECIOUS METALS FUND Investor Class (16,840,660) (39,230,930) 1,194,192 (1,679,684) Advisor Class (854,352) (2,785,939) (25,168) 195,190 A-Class (9,869) (3,770)* 40,102 6,135* C-Class (480,610) (1,741,709) (34,878) 177,292 REAL ESTATE FUND A-Class (29,394) (15,922)* 4,709 2,549* C-Class (334,067) (2,050,876) 77,322 (237,156) H-Class (11,086,754) (39,956,598) 445,868 (2,554,355) * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. + UNAUDITED 78 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- PURCHASED THROUGH SHARES PURCHASED DIVIDEND REINVESTMENT - ------------------------------------------------------------------------------------------ PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------ RETAILING FUND Investor Class 11,475,803 24,112,068 -- -- Advisor Class 2,218,596 4,981,461 -- -- A-Class 15,892 96* -- -- C-Class 326,695 1,480,794 -- -- TECHNOLOGY FUND Investor Class 10,367,903 53,167,975 -- -- Advisor Class 3,401,852 7,944,053 -- -- A-Class 83,024 3,268* -- -- C-Class 2,016,907 6,359,429 -- -- TELECOMMUNICATIONS FUND Investor Class 5,538,330 14,402,016 -- -- Advisor Class 1,261,964 1,854,348 -- -- A-Class 241 783* -- -- C-Class 544,905 1,276,715 -- -- TRANSPORTATION FUND Investor Class 3,823,930 14,576,766 -- -- Advisor Class 879,661 4,999,213 -- -- A-Class 9,537 5,861* -- -- C-Class 44,183 776,235 -- -- UTILITIES FUND Investor Class 11,781,489 14,371,241 -- 11,222 Advisor Class 2,502,273 3,892,652 -- 8,794 A-Class 100,560 47,744* -- 25* C-Class 796,346 1,880,613 -- 2,233 SHARES REDEEMED NET SHARES PURCHASED (REDEEMED) - ------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------- RETAILING FUND Investor Class (11,551,446) (24,499,236) (75,643) (387,168) Advisor Class (2,280,915) (5,825,294) (62,319) (843,833) A-Class (3,638) -- 12,254 96* C-Class (264,517) (1,538,273) 62,178 (57,479) TECHNOLOGY FUND Investor Class (10,230,621) (53,380,615) 137,282 (212,640) Advisor Class (2,569,383) (8,496,228) 832,469 (552,175) A-Class (3,416) (2,675)* 79,608 593* C-Class (1,882,387) (6,330,391) 134,520 29,038 TELECOMMUNICATIONS FUND Investor Class (5,548,473) (14,913,660) (10,143) (511,644) Advisor Class (1,200,314) (2,205,346) 61,650 (350,998) A-Class (273) (593)* (32) 190* C-Class (550,539) (1,388,824) (5,634) (112,109) TRANSPORTATION FUND Investor Class (3,663,456) (14,426,142) 160,474 150,624 Advisor Class (955,483) (4,967,264) (75,822) 31,949 A-Class (2,303) (4,815)* 7,234 1,046* C-Class (91,208) (728,572) (47,025) 47,663 UTILITIES FUND Investor Class (10,786,319) (14,558,513) 995,170 (176,050) Advisor Class (2,302,562) (3,604,386) 199,711 297,060 A-Class (29,084) (42,226)* 71,476 5,543* C-Class (640,788) (1,868,584) 155,558 14,262 * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 1, 2004. + UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 79 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- 8. PORTFOLIO SECURITIES LOANED The Trust lends its securities to approved brokers to earn additional income. Within this arrangement, the Trust acts as the lender, U.S. Bank acts as the agent, and other approved registered broker dealers act as the borrowers. The Trust receives cash collateral, valued at 100% of the value of the securities on loan, which is initially held in a segregated account at U.S. Bank. As agent, U.S. Bank may, for investment purposes, pool the Trust's collateral in joint accounts with cash collateral from one or more other securities lending customers of U.S. Bank. Under the terms of the Trust's securities lending agreement with U.S. Bank, cash collateral may be invested by U.S. Bank in certain high quality, liquid investments. At September 30, 2005, the pooled cash collateral investments consisted of repurchase agreements (47.59%), commercial paper (31.82%), corporate bonds (20.58%), and mutual funds (0.01%). 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 Fund the next business day. Although the collateral mitigates risk, the Trust 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 Trust has the right under the securities lending agreement to recover the securities from the borrower on demand. At September 30, 2005, the following funds participated in securities lending and received cash collateral: VALUE OF CASH SECURITIES FUND COLLATERAL LOANED - -------------------------------------------------------------------------------- Banking Fund $ 1,499,704 $ 1,447,805 Basic Materials Fund 4,044,558 3,951,259 Biotechnology Fund 24,705,453 23,995,246 Consumer Products Fund 3,292,068 3,211,444 Electronics Fund 7,884,762 7,690,502 Energy Fund 29,424,576 28,275,414 Energy Services Fund 44,624,941 42,781,013 Financial Services Fund 4,587,778 4,471,860 Health Care Fund 17,121,943 16,682,101 Internet Fund 1,299,546 1,266,319 Leisure Fund 1,556,276 1,515,988 Precious Metals Fund 63,821,777 59,904,486 Real Estate Fund 2,151,769 2,114,379 Retailing Fund 3,361,109 3,259,335 Technology Fund 8,009,141 7,793,458 Telecommunications Fund 2,631,466 2,494,315 Transportation Fund 956,441 936,913 Utilities Fund 16,649,917 16,045,127 80 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds' portfolios is available, without charge and upon request, by calling 1-800-820-0888. This information is also available from the EDGAR database on the SEC's site at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES INFORMATION The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC's website at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1-800-820-0888. RYDEX INVESTMENTS BOARD REVIEW AND APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT The 1940 Act requires that the initial approval of, as well as the continuation of, a fund's investment advisory agreement must be specifically approved (1) by a vote of the trustees or by a vote of the shareholders of the fund, and (2) by a vote of a majority of the trustees who are not parties to the investment advisory agreement or "interested persons" of any party (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund's trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the SEC takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement. Consistent with these responsibilities, the Rydex Series Funds Board of Trustees (the "Board") calls and holds one meeting each year that is dedicated to considering whether to renew the investment advisory agreement (the "Advisory Agreement") between the Trust and PADCO Advisors, Inc., which does business under the name Rydex Investments ("Rydex Investments") with respect to existing funds in the Trust, including the funds discussed in this Semi-Annual Report (each a "Fund" and collectively, the "Funds"), and to reviewing certain other agreements pursuant to which Rydex Investments provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by Rydex Investments, including information about Rydex Investments' affiliates, personnel and operations. The Board also receives data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and performance. The Board also receives a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements. In addition, the Independent Trustees receive advice from independent counsel to the Independent Trustees, meet in executive session outside the presence of fund management, if necessary, and participate in question and answer sessions with representatives of Rydex Investments. At a meeting held on August 28 and 29, 2005, the Board approved the selection of Rydex Investments and the continuance of the Advisory Agreement for an additional one-year period, based on its review of qualitative and quantitative information provided by Rydex Investments. The Board's approval of the Advisory Agreement was based on consideration and evaluation of a variety of specific factors discussed at that meeting and at prior meetings, including: NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY RYDEX INVESTMENTS The Board reviewed the scope of services to be provided by Rydex Investments under the Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by Rydex Investments for the past year and the scope of services required to be provided by Rydex Investments for the upcoming year. In reviewing the scope of services provided to the Funds by Rydex Investments, the Board reviewed and discussed Rydex Investments' investment experience, noting that Rydex Investments and its affiliates have committed significant resources over time to the support of the Funds. The Board also considered Rydex Investments' compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that Rydex Investments provides information regarding the portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. In addition to the above considerations, the Board reviewed and considered Rydex Investments' investment processes and strategies, and matters related to Rydex Investments' portfolio transaction policies and procedures. In particular, the Board noted the substantial volume of portfolio trades and shareholder transaction THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 81 OTHER INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- activity, in general, processed by Rydex Investments due to the unlimited exchange policy of the majority of the Funds. The Board further noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by Rydex Investments to the Funds under the Advisory Agreement were appropriate and continued to support the Board's original selection of Rydex Investments as investment adviser to the Funds. FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND RYDEX INVESTMENTS The Board reviewed statistical information prepared by Rydex Investments regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act determined by Rydex Investments to comprise each Fund's applicable peer group. Because few funds seek to provide unlimited exchange privileges similar to those of the Funds (other than the Core Equity Fund, Sector Rotation Fund, Absolute Return Strategies Fund, and Hedged Equity Fund), each Fund's applicable peer group is generally limited to the funds of two unaffiliated mutual fund families. In addition, the Board reviewed statistical information prepared by Rydex Investments relating to the performance of each Fund, as well as each Fund's ability to successfully track its benchmark over time, and a comparison of each Fund's performance to funds with similar investment objectives for the same periods and to appropriate indices/benchmarks, in light of total return, yield and market trends. The Board further noted that despite the unique nature of the Funds, the peer fund information presented to the Board was meaningful because the peer funds' investment objectives and strategies were closely aligned with those of the Funds. The Board noted that most of the Funds either outperformed their peer funds or performed in line with them over relevant periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the peer funds. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by Rydex Investments, as compared to the investment advisory fees and expense levels and performance of the peer funds, were satisfactory for the purposes of approving the continuance of the Advisory Agreement. COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY RYDEX INVESTMENTS AND ITS AFFILIATES The Board reviewed information about the profitability of the Funds to Rydex Investments based on the advisory fees payable under the Advisory Agreement for the last calendar year. Rydex Investments also presented the Board with material discussing its methodology for determining the level of advisory fees assessable to the Funds. The Board analyzed the Funds' expenses, including the investment advisory fees paid to Rydex Investments. The Board also reviewed information regarding direct revenue received by Rydex Investments and ancillary revenue received by Rydex Investments and/or its affiliates in connection with the services provided to the Funds by Rydex Investments (as discussed below). The Board also discussed Rydex Investments' profit margin as reflected in Rydex Investments' profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by Rydex Investments and its affiliates under the Advisory Agreement and from other relationships between the Funds and Rydex Investments and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate. ECONOMIES OF SCALE In connection with its review of the Funds' profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds' asset levels. The Board noted that the Advisory Agreement for the Funds did not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. The Board also noted that though Rydex Investments' assets under management were significant, the amount is spread among more than 95 Funds. Further limiting the realization of economies of scale, is the ability of shareholders of a majority of the Funds to engage in unlimited trading. The Board also reviewed Rydex Investments' historic profitability as investment adviser to the Funds and determined that reductions in fee rates or additions of breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that there are limited economies of scale to share with the Funds' shareholders. 82 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION (CONCLUDED) - -------------------------------------------------------------------------------- OTHER BENEFITS TO RYDEX INVESTMENTS AND/OR ITS AFFILIATES The Board noted that Rydex Investments reports its use of soft dollars to the Board on a quarterly basis, as well as any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or Rydex Investments pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds' shareholders. Based on the above analysis, the Board determined that the Advisory Agreement, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Agreement. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 83 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS - -------------------------------------------------------------------------------- A Board of Trustees oversees all Rydex Investments, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 1-800-820-0888. All Trustees and Officers may be reached c/o Rydex Investments, 9601 Blackwell Rd., Suite 500, Rockville, MD 20850. TRUSTEES AND OFFICERS LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - --------------------------- ----------------------------------------- -------------- CARL G. VERBONCOEUR* Rydex Series Funds - 2004 110 Trustee, President (1952) Rydex Variable Trust - 2004 Rydex Dynamic Funds - 2004 Rydex ETF Trust - 2004 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer of Rydex Fund Services, Inc., PADCO Advisors, Inc., PADCO Advisors II, Inc., and Rydex Distributors, Inc. (2003 to present); Executive Vice President of Rydex Fund Services, Inc. (2000 to 2003); Vice President of Rydex Fund Services, Inc. and Rydex Distributors, Inc. (1997 to 2000) ----------------------------------------- MICHAEL P. BYRUM* Rydex Series Funds - 2005 110 Trustee, Vice President and Rydex Variable Trust - 2005 Secretary (1970) Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 Principal Occupations During Past Five Years: Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2004 to present); Vice President of Rydex Series Funds (1997 to present); Vice President of Rydex Variable Trust (1998 to present); Vice President of Rydex Dynamic Funds (1999 to present); Vice President of Rydex ETF Trust (2002 to present); President and Trustee of Rydex Capital Partners SPhinX Fund (2003 to present); President of Rydex Global Advisors (2004 to present); Chief Operating Officer of Rydex Global Advisors and Rydex Distributors, Inc. (2003 to 2004) - ---------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - --------------------------- ----------------------------------------- -------------- COREY A. COLEHOUR Rydex Series Funds - 1993 110 Trustee (1945) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Senior Vice President of Marketing/Co-Owner, Schield Management Company ----------------------------------------- J. KENNETH DALTON Rydex Series Funds - 1995 110 Trustee (1941) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and Investor, The Dalton Group ----------------------------------------- JOHN O. DEMARET Rydex Series Funds - 1997 110 Trustee (1940) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired ----------------------------------------- 84 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (CONCLUDED) - -------------------------------------------------------------------------------- LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - --------------------------- ----------------------------------------- -------------- WERNER E. KELLER Rydex Series Funds - 2005 110 Trustee (1940) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present); Chairman, Centurion Capital Management (1991 to 2001) ----------------------------------------- THOMAS F. LYDON, JR. Rydex Series Funds - 2005 110 Trustee (1960) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends ----------------------------------------- PATRICK T. MCCARVILLE Rydex Series Funds - 1997 110 Trustee (1942) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive Officer, Par Industries, Inc. ----------------------------------------- ROGER SOMERS Rydex Series Funds - 1993 110 Trustee (1944) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine - ---------------------------------------------------------------------------------------------------- EXECUTIVE OFFICERS NAME, POSITION AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH DURING PAST FIVE YEARS ------------------ ---------------------- NICK BONOS* Vice President and Treasurer of Rydex Series Funds, Rydex Vice President and Treasurer (1963) Variable Trust, Rydex Dynamic Funds, Rydex ETF Trust, and Rydex Capital Partners SPhinX Fund (2003 to present); Senior Vice President of Rydex Fund Services, Inc. (2003 to present); Vice President of Accounting of Rydex Fund Services, Inc. (2000 to 2003) JOANNA M. HAIGNEY* Chief Compliance Officer of Rydex Series Funds, Rydex Chief Compliance Officer and Assistant Variable Trust, and Rydex Dynamic Funds (2004 to present); Secretary (1967) Assistant Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2000 to present); Assistant Secretary of Rydex ETF Trust (2002 to present); Secretary of Rydex Capital Partners SPhinX Fund (2003 to present); Vice President of Compliance of Rydex Fund Services, Inc. (2000 to present) * OFFICERS OF THE FUND ARE DEEMED TO BE "INTERESTED PERSONS" OF THE TRUST, WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT, INASMUCH AS THIS PERSON IS AFFILIATED WITH THE ADVISOR. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 85 [LOGO] RYDEXINVESTMENTS ESSENTIAL FOR MODERN MARKETS(TM) 9601 Blackwell Road, Suite 500 Rockville, MD 20850 www.rydexinvestments.com 800-820-0888 RSECF-SEMI-0905X0306 [GRAPHIC OMITTED] SEPTEMBER 30, 2005 RYDEX SERIES FUNDS STRATEGIC FUNDS SEMI-ANNUAL REPORT CORE EQUITY FUND SECTOR ROTATION FUND [LOGO]RYDEXINVESTMENTS ESSENTIAL FOR MODERN MARKETS(TM) This report and the financial statements contained herein are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Distributed by Rydex Distributors, Inc. TABLE OF CONTENTS - -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS ................................................ 2 ABOUT SHAREHOLDERS' FUND EXPENSES ......................................... 3 FUND PROFILES ............................................................. 5 SCHEDULES OF INVESTMENTS .................................................. 6 STATEMENTS OF ASSETS AND LIABILITIES ...................................... 17 STATEMENTS OF OPERATIONS .................................................. 18 STATEMENTS OF CHANGES IN NET ASSETS ....................................... 19 FINANCIAL HIGHLIGHTS ...................................................... 20 NOTES TO FINANCIAL STATEMENTS ............................................. 21 OTHER INFORMATION ......................................................... 27 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS ............................. 30 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 1 LETTER TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- DEAR SHAREHOLDER: The six-month period from April to September 2005 was a tumultuous one for the economy and the financial markets. Investors, consumers and businesses alike were rocked by the twin hurricanes of Katrina and Rita and the unprecedented rise in energy prices. Energy prices--particularly for refined products such as gas, diesel, jet fuel and heating oil--skyrocketed, causing consumer confidence to plummet and raising the prospect of a pullback in consumer spending. Typically, developments like these would have a downward effect on equity prices and interest rates, but that wasn't the case as stocks rallied and interest rates finished the period largely where they began. Surprisingly, U.S. equity markets navigated the storms remarkably well. While the old economy Dow Jones Industrial Average(R) Index rose only 1.76%, the broader S&P 500(R) Index gained 5.02% and the tech-laden Nasdaq 100(R) Index rose 8.04% on the back of a mini-rally in technology stocks. Two factors appear to have driven prices higher. The first is that earnings growth remained strong, increasing at a double-digit pace in both the second and third quarters, and investors appeared to be looking beyond the immediate impact of the hurricanes to the anticipated "kick" to economic growth as reconstruction efforts got underway. As one might expect, energy stocks led the market higher. In fact, energy prices were well on their way up prior to the arrival of Katrina as the price of a barrel of crude oil rose from $49.69 in late May to a high of $69.74 by the end of August. The Gulf storms exacerbated this rise. That energy prices were already well on their way up is attributable to the rapid growth in the powerhouse economies of China and India. China in particular, continues to import commodities of all kinds at a voracious rate. In fact, if one takes a closer look at stock prices during this period, the effect of rising energy prices and the impact of the storms becomes apparent. Clearly, energy stocks were the big winners as the S&P Energy Index rose nearly 19.56%. In fact, the meteoric rise in energy stocks is responsible for much of the stock market's positive performance this year. Utility stocks also fared well as the S&P Utility Index shot up 15.24% in anticipation of a substantial rise in home heating costs. Technology stocks rallied as valuations were perceived to be attractive. On the flip side, health care stocks, which tend to be perceived as defensive in nature, rose nearly 5.00% as investors looked for a consumer driven economic slowdown in the wake of the devastation left by Katrina and Rita. Despite the uncertainty, the Federal Reserve ("Fed") remained vigilant against any signs of increasing inflation. The shock to the economy of the storms and the loss of some of the nation's critical energy infrastructure led many to predict a pause in the Fed's rate hikes. This was not to be, as the Fed implemented four 25 basis point rate hikes during the period. Longer rates, on the other hand, actually declined from April to September, with the yield on the benchmark 10-Year Treasury Note falling 15 basis points to 4.33%. Despite this decline, interest rates are clearly on the upswing. Long-term rates bottomed on June 1, as the yield on the 10-Year Note reached 3.89%. Since the beginning of June, the trend has been up, with the 10-Year Note peaking at 4.42% in early August. With all of the crosscurrents in the economy and the financial markets, stock price behavior is likely to remain choppy and erratic. Investment strategies that do not depend on highly directional markets will likely fare well as we move through the remainder of 2005. We appreciate the trust you have placed in our firm by investing with us. Sincerely, /s/ Carl G. Verboncoeur Carl G. Verboncoeur President 2 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. As a shareholder of the Fund, you incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; 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 you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2005 and ending September 30, 2005. The following tables illustrate your fund's costs in two ways: TABLE 1. BASED ON ACTUAL FUND RETURN. This section helps you estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading "Expenses Paid During Period." Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. TABLE 2. BASED ON HYPOTHETICAL 5% RETURN. This section is intended to help you compare your 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 you 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. You can assess your fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. The calculations above assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs, which may be incurred by some of the Fund's classes. These costs may include, but are not limited to, sales charges (loads), redemption fees, and exchange fees. You can find more information about the Fund's expenses, including annual expense ratios for the past five years, 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 SERIES FUNDS SEMI-ANNUAL REPORT | 3 ABOUT SHAREHOLDERS' FUND EXPENSES (CONCLUDED) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - ------------------------------------------------------------------------------------------------------------------ TABLE 1. BASED ON ACTUAL FUND RETURN CORE EQUITY FUND A-Class 1.63% $1,000.00 $1,075.30 $ 8.48 C-Class 2.38% 1,000.00 1,070.70 12.35 H-Class 1.62% 1,000.00 1,075.30 8.43 SECTOR ROTATION FUND A-Class 1.63% 1,000.00 1,155.00 8.81 C-Class 2.38% 1,000.00 1,150.90 12.83 H-Class 1.63% 1,000.00 1,155.60 8.81 - ------------------------------------------------------------------------------------------------------------------ TABLE 2. BASED ON HYPOTHETICAL 5% RETURN CORE EQUITY FUND A-Class 1.63% 1,000.00 1,016.70 8.30 C-Class 2.38% 1,000.00 1,012.90 12.10 H-Class 1.62% 1,000.00 1,016.81 8.19 SECTOR ROTATION FUND A-Class 1.63% 1,000.00 1,016.70 8.30 C-Class 2.38% 1,000.00 1,012.90 12.10 H-Class 1.63% 1,000.00 1,016.70 8.30 * EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365. + ANNUALIZED 4 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES - -------------------------------------------------------------------------------- CORE EQUITY FUND OBJECTIVE: Seeks long-term capital appreciation. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL.] CORE EQUITY FUND Other 10.07% Financials 20.16% Information Technology 16.08% Consumer Discretionary 14.17% Health Care 12.81% Industrials 11.59% Energy 7.62% Consumer Staples 6.40% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- A-Class March 31, 2004 C-Class September 23, 2002 H-Class September 23, 2002 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Exxon Mobil Corp. 1.3% General Electric Co. 1.2% Citigroup, Inc. 1.0% Pfizer, Inc. 0.8% Bank of America Corp. 0.8% Altria Group, Inc. 0.7% Microsoft Corp. 0.7% Intel Corp. 0.7% American International Group, Inc. 0.7% Johnson & Johnson, Inc. 0.5% - -------------------------------------------------------------------------------- Top Ten Total 8.4% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. SECTOR ROTATION FUND OBJECTIVE: Seeks long-term capital appreciation. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL.] SECTOR ROTATION FUND Energy 29.71% Materials 22.88% Industrials 15.67% Health Care 14.73% Utilities 7.56% Consumer Staples 7.29% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------------------------------------- A-Class March 31, 2004 C-Class March 22, 2002 H-Class March 22, 2002 TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------------------------------------- Altria Group, Inc. 4.3% Cemex SA de CV -- SP ADR 3.8% Vulcan Materials Co. 2.4% Fluor Corp. 2.1% TXU Corp. 2.1% Lafarge North America, Inc. 2.0% Exxon Mobil Corp. 2.0% Florida Rock Industries, Inc. 1.9% Schlumberger Ltd. 1.8% Duke Energy Corp. 1.8% - -------------------------------------------------------------------------------- Top Ten Total 24.2% - -------------------------------------------------------------------------------- "Ten Largest Holdings" exclude any temporary cash or derivative investments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 5 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 98.9% FINANCIALS 20.1% INSURANCE 9.3% American International Group, Inc.+ 8,565 $ 530,687 Allstate Corp.+ 4,176 230,891 Prudential Financial, Inc.+ 3,291 222,340 St. Paul Travelers Cos., Inc. 4,830 216,722 Lincoln National Corp.+ 3,700 192,474 Hartford Financial Services Group, Inc. 2,437 188,063 MetLife, Inc.+ 3,751 186,912 Genworth Financial, Inc. -- Class A+ 5,720 184,413 Chubb Corp.+ 2,040 182,682 UnumProvident Corp.+ 8,360 171,380 Ohio Casualty Corp. 6,300 170,856 SAFECO Corp. 3,131 167,133 Assurant, Inc. 4,280 162,897 Loews Corp.+ 1,760 162,642 W.R. Berkley Corp.+ 4,119 162,618 LandAmerica Financial Group, Inc.+ 2,470 159,685 Selective Insurance Group, Inc. 3,210 156,969 HCC Insurance Holdings, Inc.+ 5,427 154,832 Conseco, Inc.*+ 7,150 150,937 Markel Corp.* 449 148,395 American Physicians Cap, Inc.* 3,012 147,980 Nationwide Financial Services, Inc. 3,660 146,583 Philadelphia Consolidated Holding Co.*+ 1,710 145,179 AmerUs Group Co. 2,520 144,572 United Fire & Casualty Co. 3,190 143,901 Allmerica Financial Corp.* 3,460 142,344 National Western Life Insurance Co. -- Class A* 672 141,960 Unitrin, Inc.+ 2,982 141,526 American National Insurance Co. 1,171 139,490 FPIC Insurance Group, Inc.* 3,840 138,202 Stancorp Financial Group, Inc. 1,641 138,172 Bristol West Holdings, Inc.+ 7,550 137,788 Clark, Inc. 8,120 136,660 American Financial Group, Inc./OH 4,022 136,466 Mercury General Corp. 2,209 132,518 Zenith National Insurance Corp. 2,090 131,022 Safety Insurance Group, Inc. 3,668 130,544 Great American Financial Resources, Inc. 6,520 130,400 Donegal Group, Inc. -- Class A 5,937 128,833 CNA Financial Corp.* 4,299 128,411 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Midland Co. 3,449 $ 124,267 ProAssurance Corp.* 2,570 119,942 CNA Surety Corp.* 4,193 59,624 UICI 1,620 58,320 First Acceptance Corp.* 5,140 51,965 Crawford & Co. -- Class B 6,250 48,938 Kansas City Life Insurance Co. 898 45,951 First American Corp. 623 28,452 Harleysville Group, Inc. 1,040 24,960 ---------- TOTAL INSURANCE 7,228,498 ---------- BANKS 2.7% Bank of America Corp.+ 14,059 591,884 Wachovia Corp.+ 7,072 336,557 SunTrust Banks, Inc. 2,720 188,904 BB&T Corp.+ 4,708 183,847 M&T Bank Corp. 1,690 178,650 Wells Fargo & Co.+ 2,695 157,846 First Citizens BancShares, Inc. -- Class A 898 153,244 Gold Banc Corp., Inc. 9,420 140,358 Republic Bancorp, Inc. 5,060 105,855 U.S. Bancorp+ 961 26,985 Westcorp 200 11,780 ---------- TOTAL BANKS 2,075,910 ---------- REAL ESTATE 2.5% AvalonBay Communities, Inc.+ 2,100 179,970 Highwoods Properties, Inc.+ 5,510 162,600 LTC Properties, Inc. 6,310 133,772 CBL & Associates Properties, Inc. 3,170 129,938 RAIT Investment Trust 4,550 129,675 Winston Hotels, Inc. 12,940 129,400 One Liberty Properties, Inc. 6,470 128,818 Boykin Lodging Co.* 10,330 128,298 Criimi MAE, Inc.* 7,180 123,568 Fieldstone Investment Corp. 10,530 122,780 Urstadt Biddle Properties, Inc. 7,960 120,674 Capital Lease Funding, Inc. 11,380 117,783 United Capital Corp.* 4,550 106,743 Vornado Realty Trust 910 78,824 Gramercy Capital Corp./NY 3,017 72,287 MFA Mortgage Investments, Inc.+ 6,830 41,868 Capital Trust/NY, Inc. -- Class A 1,250 40,200 BioMed Realty Trust, Inc. 1,000 24,800 CB Richard Ellis Group, Inc. -- Class A* 220 10,824 ---------- TOTAL REAL ESTATE 1,982,822 ---------- DIVERSIFIED FINANCIALS 2.2% Citigroup, Inc.+ 17,750 807,980 J.P. Morgan Chase & Co. 8,616 292,341 Principal Financial Group, Inc. 4,850 229,744 6 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- CIT Group, Inc. 4,320 $ 195,178 Leucadia National Corp. 3,420 147,402 Archipelago Holdings, Inc.* 470 18,729 ----------- TOTAL DIVERSIFIED FINANCIALS 1,691,374 ----------- CAPITAL MARKETS 1.8% Morgan Stanley 5,520 297,749 Lehman Brothers Holdings, Inc.+ 1,650 192,192 Allied Capital Corp.+ 5,360 153,457 American Capital Strategies, Ltd. 4,040 148,106 MCG Capital Corp. 8,370 141,202 Calamos Asset Management, Inc. -- Class A 4,880 120,438 Investment Technology Group, Inc.* 3,360 99,456 Apollo Investment Corp. 4,020 79,596 LaBranche & Co., Inc.*+ 7,720 67,087 SWS Group, Inc. 4,080 66,912 Merrill Lynch & Co., Inc. 564 34,601 Goldman Sachs Group, Inc. 100 12,158 ----------- TOTAL CAPITAL MARKETS 1,412,954 ----------- THRIFTS & MORTGAGE FINANCE 0.8% Radian Group, Inc.+ 3,062 162,592 ITLA Capital Corp.* 2,390 125,451 Downey Financial Corp.+ 1,691 102,982 MGIC Investment Corp. 1,260 80,892 Corus Bankshares, Inc. 1,475 80,874 Doral Financial Corp.+ 3,110 40,648 R&G Financial Corp. -- Class B 913 12,554 Fannie Mae 150 6,723 Federal Agricultural Mortgage Corp. 240 5,842 PMI Group, Inc. 100 3,987 ----------- TOTAL THRIFTS & MORTGAGE FINANCE 622,545 ----------- CONSUMER FINANCE 0.8% Providian Financial Corp.* 8,787 155,354 Metris Companies, Inc.* 10,090 147,617 AmeriCredit Corp.* 6,175 147,397 Nelnet, Inc. -- Class A* 3,000 114,030 American Express Co. 998 57,325 ----------- TOTAL CONSUMER FINANCE 621,723 ----------- TOTAL FINANCIALS 15,635,826 ----------- INFORMATION TECHNOLOGY 16.1% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 4.0% Intel Corp. 22,371 551,445 Texas Instruments, Inc.+ 8,605 291,709 Applied Materials, Inc. 11,806 200,230 National Semiconductor Corp.+ 7,520 197,776 Lam Research Corp.*+ 5,064 154,300 Intersil Corp. -- Class A+ 7,020 152,896 Cymer, Inc.* 4,670 146,264 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- International Rectifier Corp.* 3,110 $ 140,199 Novellus Systems, Inc.*+ 5,489 137,664 MKS Instruments, Inc.*+ 7,910 136,289 Photronics, Inc.*+ 6,900 133,860 IXYS Corp.* 11,160 117,850 Standard Microsystems Corp.* 3,730 111,564 MEMC Electronic Materials, Inc.*+ 4,854 110,623 ADE Corp.* 4,480 100,710 Nvidia Corp.*+ 2,540 87,071 Sigmatel, Inc.* 3,940 79,746 Genesis Microchip, Inc.* 3,170 69,582 OmniVision Technologies, Inc.*+ 5,030 63,479 MIPS Technology, Inc.* 9,240 63,109 Skyworks Solutions, Inc.*+ 8,220 57,704 ----------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 3,104,070 ----------- SOFTWARE 3.2% Microsoft Corp. 21,678 557,775 McAfee, Inc.*+ 5,280 165,898 Cadence Design Systems, Inc.*+ 9,807 158,481 Fair Isaac Corp.+ 3,510 157,248 Micromuse, Inc.* 19,840 156,339 Citrix Systems, Inc.*+ 6,200 155,868 Compuware Corp.* 16,140 153,330 Internet Security Systems, Inc.* 6,360 152,704 Quest Software, Inc.* 9,860 148,590 MicroStrategy, Inc. -- Class A*+ 2,030 142,689 Sybase, Inc.*+ 6,050 141,691 Serena Software, Inc.*+ 6,840 136,321 Activision, Inc.* 3,470 70,961 MRO Software, Inc.* 2,160 36,374 TIBCO Software, Inc.*+ 3,730 31,183 Filenet Corp.* 1,100 30,690 Netscout Systems, Inc.* 3,671 19,934 Phoenix Technologies, Ltd.* 2,210 16,641 Oracle Corp.* 1,170 14,496 THQ, Inc.* 180 3,838 ----------- TOTAL SOFTWARE 2,451,051 ----------- COMPUTERS & PERIPHERALS 3.0% Hewlett-Packard Co. 12,700 370,840 International Business Machines Corp. 3,280 263,122 Apple Computer, Inc.* 4,820 258,400 EMC Corp./MA*+ 15,779 204,180 NCR Corp.* 5,290 168,804 Emulex Corp.* 7,820 158,042 Imation Corp. 3,654 156,647 Intergraph Corp.* 3,490 156,038 QLogic Corp.*+ 4,330 148,086 Brocade Communications Systems, Inc.* 29,450 120,156 THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 7 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Dell, Inc.* 3,400 $ 116,280 Advanced Digital Information Corp.* 8,510 79,994 McData Corp. -- Class A* 8,220 43,073 Hutchinson Technology, Inc.*+ 1,350 35,262 Palm, Inc.*+ 1,230 34,846 ----------- TOTAL COMPUTERS & PERIPHERALS 2,313,770 ----------- IT CONSULTING & SERVICES 2.4% First Data Corp. 5,238 209,520 Affiliated Computer Services, Inc. -- Class A*+ 3,210 175,266 DST Systems, Inc.* 2,850 156,265 Ceridian Corp.* 7,230 150,022 Intrado, Inc.* 7,920 142,798 Forrester Research, Inc.* 6,540 136,163 Covansys Corp.* 8,410 134,224 Mantech International Corp. -- Class A* 4,920 129,937 SYKES ENTERPRISES* 10,530 125,307 BISYS Group, Inc.* 9,130 122,616 Computer Sciences Corp.* 2,020 95,566 Automatic Data Processing, Inc. 2,110 90,814 CACI International, Inc. -- Class A*+ 1,240 75,144 MPS Group, Inc.* 5,910 69,738 Global Payments, Inc.+ 590 45,855 ----------- TOTAL IT CONSULTING & SERVICES 1,859,235 ----------- COMMUNICATIONS EQUIPMENT 1.7% Motorola, Inc.+ 12,310 271,928 Cisco Systems, Inc.* 11,953 214,317 Juniper Networks, Inc.*+ 6,950 165,340 Safenet Inc*+ 3,830 139,067 Belden CDT, Inc.+ 7,120 138,342 Polycom, Inc.* 6,140 99,284 Black Box Corp.+ 1,920 80,563 Qualcomm, Inc. 1,720 76,970 Symmetricom, Inc.* 7,430 57,508 Foundry Networks, Inc.*+ 3,490 44,323 Digi International, Inc.* 3,790 40,667 ----------- TOTAL COMMUNICATIONS EQUIPMENT 1,328,309 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.9% Arrow Electronics, Inc.* 4,903 153,758 Avnet, Inc.*+ 5,982 146,260 Dolby Laboratories, Inc. -- Class A* 8,340 133,440 Coherent, Inc.* 4,550 133,224 Rofin-Sinar Technologies, Inc.* 3,450 131,065 TTM Technologies, Inc.* 3,591 25,676 Agilsys, Inc. 240 4,042 ----------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 727,465 ----------- INTERNET SOFTWARE & SERVICES 0.6% ValueClick, Inc.* 10,180 $ 173,976 AsiaInfo Holdings, Inc.* 23,960 116,206 United Online, Inc. 6,620 91,687 Digital Insight Corp.* 1,550 40,393 EarthLink, Inc.* 3,580 38,306 Sonicwall, Inc.* 2,610 16,574 ----------- TOTAL INTERNET SOFTWARE & SERVICES 477,142 ----------- OFFICE ELECTRONICS 0.3% Xerox Corp.*+ 15,760 215,124 ----------- TOTAL OFFICE ELECTRONICS 215,124 ----------- TOTAL INFORMATION TECHNOLOGY 12,476,166 ----------- CONSUMER DISCRETIONARY 14.2% MEDIA 4.7% Comcast Corp. -- Class A*+ 9,959 292,595 The Walt Disney Co.+ 11,082 267,409 News Corp. -- Class A 14,520 226,367 Liberty Media Corp. -- Class A* 23,330 187,807 McGraw-Hill Cos., Inc.+ 3,738 179,574 NTL, Inc.* 2,550 170,340 Tribune Co. 4,980 168,772 Univision Communications, Inc. -- Class A*+ 6,170 163,690 EW Scripps Co. -- Class A 3,150 157,406 Citadel Broadcasting Corp.* 10,510 144,302 John Wiley & Sons, Inc. -- Class A 3,420 142,751 Salem Communications Corp. /DE -- Class A* 7,710 142,172 Scholastic Corp.*+ 3,830 141,557 Belo Corp. -- Class A 6,100 139,446 DreamWorks Animation SKG, Inc. -- Class A* 5,010 138,577 McClatchy Co. -- Class A 2,070 135,026 Hearst-Argyle Television, Inc. 5,144 132,149 Cox Radio Inc. -- Class A*+ 8,630 131,176 Sinclair Broadcast Group, Inc. -- Class A 14,190 125,865 Beasley Broadcasting Group, Inc. -- Class A* 8,390 117,880 Time Warner, Inc. 6,394 115,795 Journal Communications, Inc. -- Class A 6,560 97,744 Playboy Enterprises, Inc. -- Class B*+ 5,650 79,665 Morningstar, Inc.* 1,910 61,120 Viacom, Inc. -- Class B+ 440 14,524 Media General, Inc. 120 6,961 ----------- TOTAL MEDIA 3,680,670 ----------- 8 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- SPECIALTY RETAIL 2.4% Lowe's Cos., Inc.+ 4,150 $ 267,260 Best Buy Co., Inc.+ 3,670 159,755 AutoNation, Inc.*+ 7,490 149,575 Payless Shoesource, Inc.*+ 8,480 147,552 Barnes & Noble, Inc. 3,678 138,661 American Eagle Outfitters, Inc. 5,690 133,886 Talbots, Inc. 4,300 128,656 Syms Corp. 8,870 118,769 CSK Auto Corp.* 7,670 114,130 Home Depot, Inc. 2,960 112,894 Children's Place Retail Stores, Inc.* 2,830 100,861 Too, Inc.*+ 3,165 86,816 Charming Shoppes, Inc.*+ 6,730 71,809 Genesco, Inc.* 1,130 42,081 Buckle, Inc. 1,110 37,707 Guess ?, Inc.* 1,600 34,288 Movie Gallery, Inc.+ 1,210 12,572 ----------- TOTAL SPECIALTY RETAIL 1,857,272 ----------- HOTELS, RESTAURANTS & LEISURE 1.7% McDonald's Corp. 7,340 245,816 Marriott International, Inc. -- Class A+ 2,430 153,090 Vail Resorts, Inc.* 4,720 135,700 Bluegreen Corp.* 7,300 128,845 CBRL Group, Inc.+ 3,760 126,562 Dover Motorsports, Inc. 17,830 121,957 Yum! Brands, Inc. 2,280 110,375 Dover Downs Gaming & Entertainment, Inc. 7,550 102,680 Darden Restaurants, Inc. 2,780 84,429 Starwood Hotels & Resorts Worldwide, Inc. 1,000 57,170 MGM Mirage, Inc.*+ 850 37,204 Luby's, Inc.* 1,580 20,635 Krispy Kreme Doughnuts, Inc.*+ 1,338 8,376 ----------- TOTAL HOTELS, RESTAURANTS & LEISURE 1,332,839 ----------- HOUSEHOLD DURABLES 1.4% NVR, Inc.* 265 234,512 Lennar Corp. -- Class A+ 3,010 179,878 Black & Decker Corp. 1,949 159,993 Toll Brothers, Inc.*+ 3,376 150,806 American Greetings Corp. -- Class A+ 5,490 150,426 Mohawk Industries, Inc.* 1,810 145,253 Libbey, Inc. 4,500 68,400 William Lyon Homes, Inc.*+ 100 15,520 Standard-Pacific Corp. 300 12,453 Dixie Group, Inc.* 560 8,926 ----------- TOTAL HOUSEHOLD DURABLES 1,126,167 ----------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- TEXTILES & APPAREL 1.4% Jones Apparel Group, Inc. 5,455 $ 155,468 Polo Ralph Lauren Corp. 2,830 142,349 Timberland Co. -- Class A* 4,170 140,863 Columbia Sportswear Co.*+ 2,700 125,280 Steven Madden, Ltd.* 5,320 121,934 K-Swiss, Inc. -- Class A 4,085 120,793 Unifirst Corp./MA 3,131 109,804 Nike, Inc. -- Class B+ 930 75,962 Hartmarx Corp.* 9,940 65,107 Phillips-Van Heusen Corp. 1,130 35,053 ----------- TOTAL TEXTILES & APPAREL 1,092,613 ----------- MULTILINE RETAIL 0.7% Federated Department Stores, Inc. 3,839 256,714 ShopKo Stores, Inc.* 5,320 135,766 Nordstrom, Inc. 2,510 86,143 Neiman-Marcus Group, Inc. -- Class A 440 43,978 Target Corp.+ 379 19,682 ----------- TOTAL MULTILINE RETAIL 542,283 ----------- INTERNET & CATALOG RETAIL 0.5% IAC/InterActiveCorp*+ 5,600 141,960 Blair Corp. 3,250 119,892 Systemax, Inc.* 16,370 115,245 ----------- TOTAL INTERNET & CATALOG RETAIL 377,097 ----------- AUTO COMPONENTS 0.5% Aftermarket Technology Corp.* 7,620 140,132 Autoliv, Inc. 3,096 134,676 TRW Automotive Holdings Corp.* 2,310 67,775 Modine Manufacturing Co. 590 21,641 ----------- TOTAL AUTO COMPONENTS 364,224 ----------- HEALTH CARE PROVIDERS & SERVICES 0.4% Alderwoods Group, Inc.* 8,735 143,080 Service Corporation International/US 17,070 141,510 ----------- TOTAL HEALTH CARE PROVIDERS & SERVICES 284,590 ----------- Leisure Equipment & Products 0.3% Brunswick Corp. 2,969 112,020 RC2 Corp.* 2,720 91,827 ----------- TOTAL LEISURE EQUIPMENT & PRODUCTS 203,847 ----------- COMMERCIAL SERVICES & SUPPLIES 0.1% Jackson Hewitt Tax Service, Inc. 3,460 82,729 ----------- TOTAL COMMERCIAL SERVICES & SUPPLIES 82,729 ----------- DISTRIBUTORS 0.1% Building Material Holding Corp. 480 44,731 ----------- TOTAL DISTRIBUTORS 44,731 ----------- TOTAL CONSUMER DISCRETIONARY 10,989,062 ----------- THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 9 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- HEALTH CARE 12.8% HEALTH CARE PROVIDERS & SERVICES 5.8% UnitedHealth Group, Inc.+ 6,032 $ 338,998 WellPoint, Inc.* 3,490 264,612 CIGNA Corp. 1,960 231,006 McKesson Corp. 4,830 229,183 Aetna, Inc.+ 2,440 210,182 Cardinal Health, Inc.+ 3,241 205,609 Caremark Rx, Inc.* 3,885 193,978 Coventry Health Care, Inc.* 2,247 193,287 HCA, Inc. 3,820 183,054 Express Scripts, Inc.*+ 2,840 176,648 Medco Health Solutions, Inc.* 3,101 170,028 Omnicare, Inc.+ 3,020 169,815 United Surgical Partners International, Inc.* 4,280 167,391 WellChoice, Inc.* 1,988 150,889 Triad Hospitals, Inc.*+ 3,254 147,309 Lincare Holdings, Inc.*+ 3,470 142,443 PRA International* 4,509 136,668 Genesis HealthCare Corp.* 3,031 122,210 Universal Health Services, Inc. -- Class B+ 2,460 117,170 Humana, Inc.*+ 2,430 116,348 Per-Se Technologies, Inc.*+ 5,370 110,944 Health Net, Inc.* 2,030 96,060 Vital Images, Inc.* 3,920 87,259 Health Tronics Surgical Services, Inc.* 8,480 84,461 Quest Diagnostics, Inc.+ 1,350 68,229 American Retirement Corp.* 3,600 67,788 Chemed Corp. 1,394 60,416 Ventiv Health, Inc.* 2,020 52,944 The Trizetto Group, Inc.* 3,000 42,360 Kindred Healthcare, Inc.* 1,310 39,038 Medcath Corp.* 1,612 38,285 Matria Healthcare, Inc.* 870 32,842 Beverly Enterprises, Inc.*+ 1,900 23,275 Psychiatric Solutions, Inc.*+ 420 22,777 ----------- TOTAL HEALTH CARE PROVIDERS & SERVICES 4,493,506 ----------- HEALTH CARE EQUIPMENT & SUPPLIES 2.9% Baxter International, Inc. 4,900 195,363 Hologic, Inc.* 2,850 164,587 Becton, Dickinson & Co. 3,053 160,069 Thoratec Corp.* 8,470 150,427 Haemonetics Corp./MA* 3,140 149,244 Boston Scientific Corp.*+ 6,290 146,997 Analogic Corp. 2,870 144,677 DJ Orthopedics, Inc.*+ 4,970 143,832 Advanced Neuromodulation Systems, Inc.* 2,960 140,482 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Orasure Technologies, Inc.* 10,530 $ 99,298 West Pharmaceutical Services, Inc. 3,130 92,867 Intermagnetics General Corp.* 2,932 81,920 Intuitive Surgical, Inc.*+ 1,050 76,955 TriPath Imaging, Inc.* 10,060 71,024 Mentor Corp.+ 1,200 66,012 Medtronic, Inc. 1,216 65,202 Kyphon, Inc.* 1,430 62,834 Bausch & Lomb, Inc.+ 770 62,124 Angiodynamics, Inc.* 2,510 52,710 SurModics, Inc.*+ 870 33,660 Ventana Medical Systems, Inc.* 740 28,172 Immucor, Inc.*+ 1,010 27,714 Palomar Medical Technologies, Inc.*+ 900 23,607 Vital Signs, Inc. 394 18,159 Cantel Medical Corp.*+ 790 16,622 IRIS International, Inc.* 400 7,376 ----------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,281,934 ----------- PHARMACEUTICALS 2.7% Pfizer, Inc. 25,497 636,660 Johnson & Johnson, Inc. 6,506 411,700 Watson Pharmaceuticals, Inc.*+ 4,290 157,057 King Pharmaceuticals, Inc.* 9,860 151,647 Alpharma, Inc. -- Class A 6,020 149,717 Kos Pharmaceuticals, Inc.* 1,772 118,600 Hi-Tech Pharmacal Co., Inc.* 3,250 97,760 First Horizon Pharmaceutical Corp.*+ 4,150 82,460 Abbott Laboratories 1,759 74,582 Merck & Co., Inc. 2,731 74,311 CNS, Inc. 1,860 48,490 Wyeth 998 46,177 Eli Lilly & Co.+ 461 24,673 Bristol-Myers Squibb Co.+ 525 12,631 ----------- TOTAL PHARMACEUTICALS 2,086,465 ----------- BIOTECHNOLOGY 1.4% Amgen, Inc.* 5,060 403,130 Biogen Idec, Inc.* 5,620 221,878 United Therapeutics Corp.*+ 2,394 167,101 Albany Molecular Research, Inc.* 11,190 136,294 Invitrogen Corp.*+ 1,787 134,436 Pharmion Corp.*+ 352 7,677 Savient Pharmaceuticals, Inc.* 1,510 5,693 ----------- TOTAL BIOTECHNOLOGY 1,076,209 ----------- TOTAL HEALTH CARE 9,938,114 ----------- INDUSTRIALS 11.6% COMMERCIAL SERVICES & SUPPLIES 2.2% Cendant Corp.+ 9,260 191,126 RR Donnelley & Sons Co. 4,880 180,902 10 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Waste Management, Inc. 6,190 $ 177,096 United Stationers, Inc.* 3,510 167,989 Labor Ready, Inc.* 6,110 156,721 Pico Holdings, Inc.* 4,030 141,614 Adesa, Inc. 6,310 139,451 Steelcase, Inc. -- Class A 9,160 132,454 Kforce.Com* 9,480 97,644 Resources Connection, Inc.*+ 3,250 96,298 West Corp.* 2,270 84,875 Administaff, Inc. 1,430 56,828 Compx International, Inc. 3,350 54,940 Allied Waste Industries, Inc.*+ 3,580 30,251 Standard Register Co. 1,200 17,940 Clean Harbors, Inc.* 300 10,185 ----------- TOTAL COMMERCIAL SERVICES & SUPPLIES 1,736,314 ----------- AEROSPACE & DEFENSE 1.9% Boeing Co. 4,187 284,507 Lockheed Martin Corp.+ 3,023 184,524 Precision Castparts Corp. 3,408 180,965 Northrop Grumman Corp. 3,286 178,594 Raytheon Co. 4,579 174,093 Esterline Technologies Corp.*+ 3,810 144,361 Heico Corp. 5,630 130,616 Kaman Corp. -- Class A 5,860 119,837 Armor Holdings, Inc.*+ 1,417 60,945 United Technologies Corp. 540 27,994 Aviall, Inc.* 300 10,134 ----------- TOTAL AEROSPACE & DEFENSE 1,496,570 ----------- MACHINERY 1.8% Oshkosh Truck Corp. 3,418 147,521 EnPro Industries, Inc.* 4,356 146,754 Deere & Co.+ 2,380 145,656 Cummins, Inc.+ 1,620 142,544 Albany International Corp. -- Class A 3,620 133,469 Parker Hannifin Corp. 1,807 116,208 Circor International, Inc. 3,490 95,801 Timken Co. 2,740 81,186 Commercial Vehicle Group, Inc.* 3,650 76,431 Terex Corp.* 1,473 72,810 JLG Industries, Inc. 1,920 70,253 Sun Hydraulics Corp. 2,230 54,189 Titan International, Inc. 3,210 44,073 Cascade Corp. 870 42,369 Dynamic Materials Corp. 300 13,170 Flowserve Corp.*+ 240 8,724 ----------- TOTAL MACHINERY 1,391,158 ----------- ROAD & RAIL 1.5% Norfolk Southern Corp. 6,350 257,556 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Burlington Northern Santa Fe Corp 3,334 $ 199,373 CSX Corp. 3,830 178,018 CNF, Inc. 2,850 149,625 Laidlaw International, Inc. 6,068 146,664 RailAmerica, Inc.* 11,610 138,159 Yellow Roadway Corp.*+ 2,800 115,976 ----------- TOTAL ROAD & RAIL 1,185,371 ----------- INDUSTRIAL CONGLOMERATES 1.5% General Electric Co. 26,569 894,578 Teleflex, Inc.+ 2,160 152,280 Walter Industries, Inc. 993 48,578 3M Co.+ 480 35,213 ----------- TOTAL INDUSTRIAL CONGLOMERATES 1,130,649 ----------- ELECTRICAL EQUIPMENT 0.9% Thomas & Betts Corp.* 4,170 143,490 LSI Industries, Inc. 7,510 142,690 Preformed Line Products Co. 2,930 138,296 Vicor Corp. 8,620 130,593 Energy Conversion Devices, Inc.*+ 1,100 49,368 Woodward Governor Co. 470 39,973 Evergreen Solar, Inc.* 4,020 37,507 LaBarge, Inc.* 2,810 36,305 ----------- TOTAL ELECTRICAL EQUIPMENT 718,222 ----------- AIR FREIGHT & COURIERS 0.6% United Parcel Service, Inc. -- Class B 3,610 249,559 Dynamex, Inc.* 7,420 116,049 HUB Group, Inc. -- Class A* 2,920 107,193 ----------- TOTAL AIR FREIGHT & COURIERS 472,801 ----------- BUILDING PRODUCTS 0.5% USG Corp.* 2,170 149,122 York International Corp. 2,210 123,915 Water Pik Technologies, Inc.* 4,580 92,974 Universal Forest Products, Inc. 240 13,757 ----------- TOTAL BUILDING PRODUCTS 379,768 ----------- CONSTRUCTION & ENGINEERING 0.3% EMCOR Group, Inc.* 2,580 152,994 Shaw Group, Inc.*+ 1,800 44,388 ----------- TOTAL CONSTRUCTION & ENGINEERING 197,382 ----------- TRADING COMPANIES & DISTRIBUTORS 0.2% Beacon Roofing Supply, Inc.* 1,910 62,400 Applied Industrial Technologies, Inc. 1,730 62,072 WESCO International, Inc.*+ 710 24,048 Watsco, Inc.+ 290 15,402 ----------- TOTAL TRADING COMPANIES & DISTRIBUTORS 163,922 ----------- THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 11 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- AIRLINES 0.2% Continental Airlines, Inc. -- Class B*+ 12,440 $ 120,170 ----------- TOTAL AIRLINES 120,170 ----------- TOTAL INDUSTRIALS 8,992,327 ----------- ENERGY 7.6% OIL & GAS 6.0% Exxon Mobil Corp. 16,196 1,029,094 ConocoPhillips 5,830 407,575 Chevron Corp. 4,450 288,048 Williams Cos., Inc.+ 9,390 235,219 Devon Energy Corp.+ 3,342 229,395 Valero Energy Corp.+ 2,000 226,120 Occidental Petroleum Corp. 2,642 225,706 Kerr-McGee Corp. 2,100 203,931 Newfield Exploration Co.*+ 3,710 182,161 Burlington Resources, Inc. 2,063 167,763 Swift Energy Co.*+ 3,480 159,210 Pogo Producing Co. 2,700 159,138 Forest Oil Corp.* 2,840 147,964 Callon Petroleum Co.* 7,020 146,929 W&T Offshore, Inc. 3,610 117,072 Sunoco, Inc. 1,480 115,736 Vintage Petroleum, Inc. 2,440 111,410 TransMontaigne, Inc.* 12,930 103,311 Frontier Oil Corp. 1,550 68,743 Overseas Shipholding Group, Inc.+ 1,063 62,005 Giant Industries, Inc.* 820 48,003 Maritrans, Inc. 1,440 46,080 Harvest Natural Resources, Inc.* 3,764 40,388 Tesoro Corp. 600 40,344 Berry Petroleum Co. -- Class A 600 40,014 Resource America, Inc. -- Class A 1,500 26,595 Holly Corp. 350 22,393 Petroleum Development Corp.* 373 14,301 ----------- TOTAL OIL & GAS 4,664,648 ----------- ENERGY EQUIPMENT & SERVICES 1.6% Veritas DGC, Inc.*+ 4,390 160,762 Tidewater, Inc.+ 3,240 157,691 Helmerich & Payne, Inc. 2,490 150,371 Rowan Cos., Inc.+ 4,170 147,993 Lone Star Technologies, Inc.*+ 2,142 119,074 NS Group, Inc.* 2,910 114,217 Global Industries, Ltd.*+ 6,240 91,978 Diamond Offshore Drilling, Inc. 1,440 88,200 Hydril*+ 900 61,776 GulfMark Offshore, Inc.* 1,472 47,501 Grey Wolf, Inc.* 5,330 44,932 Cal Dive International, Inc.* 370 23,462 Offshore Logistics, Inc.* 532 19,684 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Lufkin Industries, Inc. 230 $ 10,017 Oil States International, Inc.* 230 8,351 Todco -- Class A* 100 4,171 ----------- TOTAL ENERGY EQUIPMENT & SERVICES 1,250,180 ----------- TOTAL ENERGY 5,914,828 ----------- CONSUMER STAPLES 6.4% FOOD PRODUCTS 2.3% Archer-Daniels-Midland Co. 10,100 249,066 General Mills, Inc. 3,560 171,592 Dean Foods Co.* 4,410 171,373 Kellogg Co. 3,550 163,761 Chiquita Brands International, Inc.+ 5,390 150,650 Kraft Foods, Inc. -- Class A 4,800 146,832 Hain Celestial Group, Inc.*+ 7,200 139,680 M&F Worldwide Corp.* 8,820 137,151 Hershey Co. 2,360 132,892 Pilgrim's Pride Corp. 3,620 131,768 Seaboard Corp. 85 116,705 Gold Kist, Inc.* 2,750 53,763 Maui Land & Pineapple Co., Inc.* 240 7,207 ----------- TOTAL FOOD PRODUCTS 1,772,440 ----------- TOBACCO 1.2% Altria Group, Inc.+ 7,637 562,923 Reynolds American, Inc. 2,180 180,984 Loews Corp. - Carolina Group 3,810 150,990 ----------- TOTAL TOBACCO 894,897 ----------- BEVERAGES 1.1% PepsiCo, Inc. 7,030 398,671 Brown-Forman Corp. -- Class B 2,430 144,682 Coca-Cola Co. 3,092 133,544 PepsiAmericas, Inc. 5,358 121,787 Coca-Cola Enterprises, Inc. 2,030 39,585 ----------- TOTAL BEVERAGES 838,269 ----------- FOOD & DRUG RETAILING 1.0% Wal-Mart Stores, Inc.+ 4,280 187,550 Costco Wholesale Corp.+ 4,270 183,994 Performance Food Group Co.* 5,320 167,899 Supervalu, Inc. 4,540 141,285 Nash Finch Co.+ 1,927 81,300 Walgreen Co.+ 144 6,257 ----------- TOTAL FOOD & DRUG RETAILING 768,285 ----------- HOUSEHOLD PRODUCTS 0.8% Procter & Gamble Co.+ 4,810 286,003 Kimberly-Clark Corp. 3,373 200,795 Energizer Holdings, Inc.*+ 2,536 143,791 Central Garden and Pet Co.* 576 26,064 ----------- TOTAL HOUSEHOLD PRODUCTS 656,653 ----------- 12 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- PERSONAL PRODUCTS 0.0% Playtex Products, Inc.* 2,090 $ 22,990 Gillette Co. 240 13,968 ----------- TOTAL PERSONAL PRODUCTS 36,958 ----------- TOTAL CONSUMER STAPLES 4,967,502 ----------- UTILITIES 4.1% MULTI-UTILITIES 1.9% Duke Energy Corp.+ 7,060 205,940 Constellation Energy Group, Inc. 3,303 203,465 NRG Energy, Inc.*+ 3,705 157,833 CenterPoint Energy, Inc. 10,580 157,325 CMS Energy Corp.*+ 9,200 151,340 NorthWestern Corp. 5,000 150,950 NSTAR+ 4,852 140,320 WPS Resources Corp.+ 2,410 139,298 PNM Resources, Inc.+ 4,830 138,476 Wisconsin Energy Corp. 700 27,944 ----------- TOTAL MULTI-UTILITIES 1,472,891 ----------- ELECTRIC UTILITIES 1.6% Edison International 5,010 236,873 Entergy Corp. 2,245 166,848 Allegheny Energy, Inc.*+ 5,320 163,430 Sierra Pacific Resources*+ 10,980 163,053 UIL Holding Corp. 2,700 141,237 Westar Energy, Inc.+ 5,762 139,037 El Paso Electric Co.* 4,320 90,072 TXU Corp.+ 567 64,003 Black Hills Corp.+ 1,310 56,815 ----------- TOTAL ELECTRIC UTILITIES 1,221,368 ----------- GAS UTILITIES 0.6% WGL Holdings, Inc. 4,860 156,152 Oneok, Inc.+ 4,566 155,335 Southern Union Co.* 5,795 149,324 ----------- TOTAL GAS UTILITIES 460,811 ----------- TOTAL UTILITIES 3,155,070 ----------- MATERIALS 4.0% METALS & MINING 1.7% Phelps Dodge Corp. 1,812 235,433 Freeport-McMoRan Copper & Gold, Inc. -- Class B+ 4,110 199,705 Nucor Corp.+ 3,280 193,487 Metals USA, Inc.* 6,840 139,946 Roanoke Electric Steel Corp. 6,720 134,602 Carpenter Technology Corp. 2,066 121,088 United States Steel Corp.+ 2,540 107,569 Stillwater Mining Co.*+ 8,600 78,690 Quanex Corp. 690 45,692 Reliance Steel & Aluminum Co.+ 670 35,463 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Chaparral Steel Co.* 900 $ 22,698 RTI International Metals, Inc.* 447 17,590 Commercial Metals Co.+ 392 13,226 Steel Dynamics, Inc.+ 160 5,434 ----------- TOTAL METALS & MINING 1,350,623 ----------- CHEMICALS 1.4% Dow Chemical Co. 5,570 232,102 Monsanto Co.+ 2,695 169,111 Lubrizol Corp. 3,460 149,922 Ashland, Inc. 2,610 144,176 FMC Corp.* 2,380 136,184 EI Du Pont de Nemours & Co. 2,840 111,243 Lyondell Chemical Co.+ 3,510 100,456 Westlake Chemical Corp. 2,981 80,725 Terra Industries, Inc.* 250 1,663 ----------- TOTAL CHEMICALS 1,125,582 ----------- CONSTRUCTION MATERIALS 0.5% Eagle Materials, Inc.+ 1,490 180,841 Texas Industries, Inc. 2,600 141,440 Lafarge North America, Inc. 790 53,412 ----------- TOTAL CONSTRUCTION MATERIALS 375,693 ----------- PAPER & FOREST PRODUCTS 0.4% Weyerhaeuser Co. 2,509 172,494 Louisiana-Pacific Corp.+ 3,230 89,439 Buckeye Technologies, Inc.* 2,630 21,355 ----------- TOTAL PAPER & FOREST PRODUCTS 283,288 ----------- TOTAL MATERIALS 3,135,186 ----------- TELECOMMUNICATION SERVICES 2.0% DIVERSIFIED TELECOMMUNICATION SERVICES 1.5% BellSouth Corp.+ 9,981 262,500 Telewest Global, Inc.* 7,520 172,584 AT&T Corp.+ 8,655 171,369 Golden Telecom, Inc.+ 4,700 148,379 Premiere Global Services, Inc.* 17,100 139,878 Verizon Communications, Inc. 4,125 134,846 SBC Communications, Inc.+ 4,213 100,986 North Pittsburgh Systems, Inc. 1,000 20,410 Hungarian Telephone & Cable* 560 8,389 ----------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 1,159,341 ----------- WIRELESS TELECOMMUNICATION SERVICES 0.5% Sprint Corp.+ 8,680 206,410 Telephone & Data Systems, Inc.+ 3,910 152,490 ----------- TOTAL WIRELESS TELECOMMUNICATION SERVICES 358,900 ----------- TOTAL TELECOMMUNICATION SERVICES 1,518,241 ----------- TOTAL COMMON STOCKS (Cost $67,157,471) 76,722,322 ----------- THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 13 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- CORE EQUITY FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS 1.0% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 449,236 $ 449,236 3.24% due 10/03/05 342,147 342,147 ------------ TOTAL REPURCHASE AGREEMENTS (Cost $791,383) 791,383 ------------ SECURITIES LENDING COLLATERAL 15.1% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 11,708,590 11,708,590 ------------ TOTAL SECURITIES LENDING COLLATERAL (Cost $11,708,590) 11,708,590 ------------ TOTAL INVESTMENTS 115.0% (Cost $79,657,444) $ 89,222,295 ============ LIABILITIES IN EXCESS OF OTHER ASSETS -- (15.0)% $(11,650,548) ============ NET ASSETS -- 100.0% $ 77,571,747 ================================================================================ UNREALIZED GAIN CONTRACTS (NOTE 1) - -------------------------------------------------------------------------------- FUTURES CONTRACTS PURCHASED December 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $617,000) 10 $ 488 ============ * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. 14 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- SECTOR ROTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS 97.8% ENERGY 29.7% ENERGY EQUIPMENT & SERVICES 14.9% Schlumberger Ltd.+ 35,800 $ 3,020,804 Halliburton Co.+ 39,600 2,713,392 Transocean, Inc.*+ 32,300 1,980,313 Baker Hughes, Inc.+ 33,000 1,969,440 Tenaris SA -- SP ADR 13,700 1,888,408 BJ Services Co.+ 43,800 1,576,362 Nabors Industries Ltd.* 20,800 1,494,064 Precision Drilling Corp.* 30,000 1,476,000 GlobalSantaFe Corp.+ 30,700 1,400,534 Weatherford International Ltd.*+ 19,500 1,338,870 Noble Corp. 18,600 1,273,356 ENSCO International, Inc.+ 26,300 1,225,317 Diamond Offshore Drilling, Inc.+ 19,900 1,218,875 Patterson-UTI Energy, Inc.+ 31,700 1,143,736 Smith International, Inc.+ 33,500 1,115,885 ----------- TOTAL ENERGY EQUIPMENT & SERVICES 24,835,356 ----------- OIL & GAS 14.8% Exxon Mobil Corp. 51,400 3,265,956 BP PLC -- SP ADR 35,500 2,515,175 Total SA -- SP ADR+ 14,500 1,969,390 Chevron Corp. 28,200 1,825,386 PetroChina Co. Ltd. -- SP ADR+ 21,700 1,809,129 Royal Dutch Shell PLC -- SP ADR 27,242 1,788,165 ENI-Ente Nazionale Idrocarburi -- SP ADR+ 11,400 1,688,340 ConocoPhillips 22,400 1,565,984 Petroleo Brasiliero SA -- Petrobras 20,400 1,458,396 EnCana Corp. 20,800 1,212,848 Imperial Oil Ltd. 9,500 1,093,070 Repsol YPF SA -- SP ADR 31,500 1,017,765 Occidental Petroleum Corp. 11,400 973,902 China Petroleum & Chemical Corp. -- SP ADR+ 21,000 950,460 Royal Dutch Shell PLC -- SP ADR 13,154 905,916 Statoil ASA -- SP ADR 25,500 629,595 ----------- TOTAL OIL & GAS 24,669,477 ----------- TOTAL ENERGY 49,504,833 ----------- MATERIALS 22.9% CONSTRUCTION MATERIALS 14.7% Cemex SA de CV -- SP ADR 119,553 6,252,622 Vulcan Materials Co.+ 53,600 3,977,656 Lafarge North America, Inc. 48,700 3,292,607 Florida Rock Industries, Inc.+ 48,500 3,108,365 Martin Marietta Materials, Inc. 37,000 2,903,020 Eagle Materials, Inc.+ 19,800 2,403,126 MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Texas Industries, Inc. 33,600 $ 1,827,840 Headwaters, Inc.*+ 21,200 792,880 ----------- TOTAL CONSTRUCTION MATERIALS 24,558,116 ----------- METALS & MINING 8.2% BHP Billiton Ltd. -- SP ADR+ 54,200 1,852,556 Rio Tinto PLC -- SP ADR+ 8,600 1,412,980 Companhia Vale do Rio Doce -- SP ADR+ 30,100 1,320,186 Anglo American PLC -- ADR+ 40,646 1,227,509 Newmont Mining Corp.+ 20,100 948,117 Barrick Gold Corp.+ 26,400 766,920 Mittal Steel NV Co. -- Class A 26,200 754,560 POSCO -- SP ADR 13,200 746,592 Alcoa, Inc. 30,300 739,926 AngloGold Ashanti Ltd. -- SP ADR+ 15,300 649,332 Alcan, Inc.+ 20,000 634,600 Phelps Dodge Corp. 4,600 597,678 Inco Ltd. 11,300 535,055 Nucor Corp.+ 8,900 525,011 Southern Peru Copper Corp. 9,100 509,236 Chaparral Steel Co.* 14,100 355,602 ----------- TOTAL METALS & MINING 13,575,860 ----------- TOTAL MATERIALS 38,133,976 ----------- INDUSTRIALS 15.7% CONSTRUCTION & ENGINEERING 15.7% Fluor Corp.+ 55,000 3,540,900 Jacobs Engineering Group, Inc.*+ 42,800 2,884,720 Chicago Bridge & Iron NV Co. 77,198 2,400,086 URS Corp.* 52,200 2,108,358 Shaw Group, Inc.*+ 84,300 2,078,838 McDermott International, Inc.* 53,600 1,962,296 Dycom Industries, Inc.*+ 89,300 1,805,646 Granite Construction, Inc. 46,400 1,774,336 Washington Group International, Inc.*+ 32,700 1,762,203 Quanta Services, Inc.*+ 134,400 1,714,944 Foster Wheeler Ltd.*+ 54,800 1,692,772 EMCOR Group, Inc.*+ 25,700 1,524,010 Insituform Technologies, Inc. -- Class A* 50,400 871,416 ----------- TOTAL CONSTRUCTION & ENGINEERING 26,120,525 ----------- TOTAL INDUSTRIALS 26,120,525 ----------- HEALTH CARE 14.7% BIOTECHNOLOGY 7.4% Amgen, Inc.* 29,100 2,318,397 Genentech, Inc.* 24,000 2,021,040 Gilead Sciences, Inc.*+ 24,800 1,209,248 Genzyme Corp.* 13,700 981,468 THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 15 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- SECTOR ROTATION FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- Biogen Idec, Inc.* 21,200 $ 836,976 Celgene Corp.*+ 13,900 755,048 Medimmune, Inc.* 21,000 706,650 Chiron Corp.* 15,800 689,196 Applera Corp. - Applied Biosystems Group 22,800 529,872 Invitrogen Corp.*+ 5,700 428,811 Millennium Pharmaceuticals, Inc.*+ 40,400 376,932 Cephalon, Inc.*+ 8,100 376,002 Charles River Laboratories International, Inc.*+ 8,200 357,684 Affymetrix, Inc.* 7,600 351,348 ImClone Systems, Inc.* 11,000 345,950 ------------- TOTAL BIOTECHNOLOGY 12,284,622 ------------- HEALTH CARE PROVIDERS & SERVICES 7.3% UnitedHealth Group, Inc.+ 30,500 1,714,100 WellPoint, Inc.* 17,900 1,357,178 Cardinal Health, Inc.+ 16,400 1,040,416 Aetna, Inc.+ 11,300 973,382 Caremark Rx, Inc.*+ 19,300 963,649 CIGNA Corp. 7,200 848,592 HCA, Inc. 16,000 766,720 McKesson Corp. 15,800 749,710 Medco Health Solutions, Inc.* 12,800 701,824 Express Scripts, Inc.*+ 11,000 684,200 Coventry Health Care, Inc.* 6,800 584,936 Quest Diagnostics, Inc.+ 11,400 576,156 Laboratory Corporation of America Holdings*+ 10,300 501,713 Health Management Associates, Inc. -- Class A+ 18,000 422,460 Patterson Cos., Inc.*+ 9,500 380,285 ------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 12,265,321 ------------- TOTAL HEALTH CARE 24,549,943 ------------- UTILITIES 7.5% MULTI-UTILITIES 5.0% Duke Energy Corp.+ 102,000 2,975,340 Constellation Energy Group, Inc. 32,800 2,020,480 AES Corp.*+ 113,900 1,871,377 Dynegy, Inc. -- Class A*+ 180,000 847,800 Calpine Corp.*+ 246,600 638,694 ------------- TOTAL MULTI-UTILITIES 8,353,691 ------------- ELECTRIC UTILITIES 2.5% TXU Corp.+ 31,100 3,510,568 Black Hills Corp.+ 16,900 732,953 ------------- TOTAL ELECTRIC UTILITIES 4,243,521 ------------- TOTAL UTILITIES 12,597,212 ------------- MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- CONSUMER STAPLES 7.3% TOBACCO 7.3% Altria Group, Inc.+ 96,300 $ 7,098,273 Reynolds American, Inc.+ 23,300 1,934,366 UST, Inc.+ 37,200 1,557,192 Loews Corp. - Carolina Group 25,100 994,713 Universal Corp./Richmond VA 14,600 566,918 ------------- TOTAL TOBACCO 12,151,462 ------------- TOTAL CONSUMER STAPLES 12,151,462 ------------- TOTAL COMMON STOCKS (Cost $136,406,656) 163,057,951 ------------- FACE AMOUNT ------ REPURCHASE AGREEMENTS 2.1% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 1,980,640 1,980,640 3.24% due 10/03/05 1,508,496 1,508,496 ------------- TOTAL REPURCHASE AGREEMENTS (Cost $3,489,136) 3,489,136 ------------- SECURITIES LENDING COLLATERAL 24.9% Investment in Securities Lending Short Term Investment Portfolio Held by U.S. Bank (Note 8) 41,490,159 41,490,159 ------------- TOTAL SECURITIES LENDING COLLATERAL (Cost $41,490,159) 41,490,159 ------------- TOTAL INVESTMENTS 124.8% (Cost $181,385,951) $ 208,037,246 ============= LIABILITIES IN EXCESS OF OTHER ASSETS -- (24.8)% $ (41,397,668) ============= NET ASSETS -- 100.0% $ 166,639,578 * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS ON LOAN AT SEPTEMBER 30, 2005 - SEE NOTE 8. ADR--AMERICAN DEPOSITORY RECEIPT. 16 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- CORE SECTOR EQUITY ROTATION FUND FUND ================================================================================================================= ASSETS Securities at Value* (Notes 1, 2, 5 and 8) $89,222,295 $208,037,246 Segregated Cash with Broker 31,500 -- Cash in Custodian Bank 980 3,250 Receivable for Futures Contracts Settlement (Note 1) 1,100 -- Receivable for Shares Purchased 135,898 1,379,163 Investment Income Receivable (Note 1) 76,206 241,531 - ----------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 89,467,979 209,661,190 ================================================================================================================= LIABILITIES Payable upon Return of Securities Loaned (Note 8) 11,708,590 41,490,159 Payable for Securities Purchased (Note 1) -- 1,047,932 Liability for Shares Redeemed 76,552 267,977 Investment Advisory Fees Payable (Note 3) 63,797 123,100 Transfer Agent and Administrative Fees Payable (Note 3) 17,629 34,195 Distribution and Service Fees Payable (Note 3) 11,849 24,435 Portfolio Accounting Fees Payable (Note 3) 7,052 13,678 Custody Fees Payable 2,105 3,283 Other Liabilities 8,658 16,853 - ----------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 11,896,232 43,021,612 ================================================================================================================= NET ASSETS $77,571,747 $166,639,578 ================================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $62,236,240 $142,164,500 Undistributed Net Investment Loss (222,768) (165,859) Accumulated Net Realized Gain (Loss) on Investments and Futures Contracts 5,992,936 (2,010,358) Net Unrealized Appreciation (Depreciation) on Investments and Futures Contracts 9,565,339 26,651,295 ================================================================================================================= NET ASSETS $77,571,747 $166,639,578 ================================================================================================================= A-Class $ 1,636,859 $ 7,919,392 C-Class 32,556,171 66,106,080 H-Class 43,378,717 92,614,106 SHARES OUTSTANDING A-Class 101,444 617,525 C-Class 2,067,090 5,283,767 H-Class 2,688,411 7,209,992 NET ASSET VALUES A-Class $ 16.14 $ 12.82 A-Class Maximum Offering Price** 16.94 13.46 C-Class 15.75 12.51 H-Class 16.14 12.85 * THE COST OF SECURITIES AT VALUE IS $79,657,444 AND $181,385,951, RESPECTIVELY. ** NET ASSET VALUE ADJUSTED FOR SALES CHARGE OF 4.75% OF OFFERING PRICE. THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 17 STATEMENTS OF OPERATIONS (UNAUDITED) Period Ended September 30, 2005 - -------------------------------------------------------------------------------- CORE SECTOR EQUITY ROTATION FUND FUND ================================================================================================ INVESTMENT INCOME Interest (Note 1) $ 54,324 $ 33,325 Interest from Securities Lending, net (Note 8) 9,411 22,691 Dividends, Net of Foreign Tax Withheld* (Note 1) 514,989 1,054,067 - ------------------------------------------------------------------------------------------------ Total Income 578,724 1,110,083 - ------------------------------------------------------------------------------------------------ EXPENSES Investment Advisory Fees (Note 3) 376,337 591,765 Transfer Agent and Administrative Fees (Note 3) 105,285 164,379 Distribution & Service Fees (Note 3): A-Class 1,538 5,748 C-Class 169,795 295,354 H-Class 61,299 84,793 Portfolio Accounting Fees (Note 3) 42,114 65,752 Trustees' Fees** 1,871 2,907 Miscellaneous 43,253 65,244 - ------------------------------------------------------------------------------------------------ Total Expenses 801,492 1,275,942 - ------------------------------------------------------------------------------------------------ Net Investment Loss (222,768) (165,859) ================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain (Loss) on: Investment Securities 3,336,493 7,910,402 Futures Contracts (122,564) -- - ------------------------------------------------------------------------------------------------ Total Net Realized Gain 3,213,929 7,910,402 - ------------------------------------------------------------------------------------------------ Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities 2,425,432 11,403,755 Futures Contracts 12,496 -- - ------------------------------------------------------------------------------------------------ Net Change in Unrealized Appreciation (Depreciation) 2,437,928 11,403,755 - ------------------------------------------------------------------------------------------------ Net Gain on Investments 5,651,857 19,314,157 - ------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS FROM OPERATIONS $ 5,429,089 $ 19,148,298 ================================================================================================ * NET OF FOREIGN TAX WITHHELD OF $23 AND $41,477, RESPECTIVELY. ** RELATES TO TRUSTEES NOT DEEMED "INTERESTED PERSONS" WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT. 18 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- CORE EQUITY FUND SECTOR ROTATION FUND ============================================================================================================================= PERIOD YEAR PERIOD YEAR ENDED ENDED ENDED ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 ============================================================================================================================= FROM OPERATIONS Net Investment Loss $ (222,768) $ (189,164) $ (165,859) $ (765,439) Net Realized Gain on Investments 3,213,929 5,016,468 7,910,402 3,648,637 Net Change in Unrealized Appreciation (Depreciation) on Investments and Futures Contracts 2,437,928 235,511 11,403,755 2,085,377 - ----------------------------------------------------------------------------------------------------------------------------- Net Increase in Net Assets from Operations 5,429,089 5,062,815 19,148,298 4,968,575 - ----------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: (NOTE 1) Realized Gain on Investment A-Class -- (29,799) -- -- C-Class -- (1,290,813) -- -- H-Class -- (2,321,494) -- -- - ----------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders -- (3,642,106) -- -- ============================================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED A-Class 853,304 1,854,516 5,193,310 4,692,623 C-Class 6,574,476 24,157,214 15,221,315 25,139,982 H-Class 48,129,743 84,248,891 67,910,078 65,844,727 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT A-Class -- 29,797 -- -- C-Class -- 1,221,401 -- -- H-Class -- 2,225,710 -- -- COST OF SHARES REDEEMED A-Class (214,069) (984,731) (1,042,630) (1,881,322) C-Class (11,035,850) (15,319,518) (12,178,500) (32,396,269) H-Class (59,003,405) (78,395,806) (41,930,058) (97,924,054) ============================================================================================================================= NET INCREASE (DECREASE) IN NET ASSETS FROM SHARE TRANSACTIONS (14,695,801) 19,037,474 33,173,515 (36,524,313) - ----------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets (9,266,712) 20,458,183 52,321,813 (31,555,738) NET ASSETS--BEGINNING OF PERIOD 86,838,459 66,380,276 114,317,765 145,873,503 - ----------------------------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 77,571,747 $ 86,838,459 $ 166,639,578 $ 114,317,765 ============================================================================================================================= UNDISTRIBUTED NET INVESTMENT LOSS $ (222,768) $ -- $ (165,859) $ -- ============================================================================================================================= + UNAUDITED THE RYDEX SERIES FUNDS See Notes to Financial Statements. SEMI-ANNUAL REPORT | 19 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. NET REALIZED NET INCREASE NET ASSET NET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, INVESTMENT UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INCOME GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED TOTAL OF PERIOD (LOSS)+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS - ------------------------------------------------------------------------------------------------------------------------------------ CORE EQUITY FUND -- A-CLASS SEPTEMBER 30, 2005# $15.01 $ (.02) $ 1.15 $ 1.13 $ -- $ -- $ -- March 31, 2005 14.44 .02 1.16 1.18 -- (.61) (.61) March 31, 2004* 14.44 -- -- -- -- -- -- CORE EQUITY FUND -- C-CLASS SEPTEMBER 30, 2005# 14.71 (.07) 1.11 1.04 -- -- -- March 31, 2005 14.27 (.10) 1.15 1.05 -- (.61) (.61) March 31, 2004 10.11 (.11) 4.38 4.27 -- (.11) (.11) March 31, 2003* 10.00 (.03) .14 .11 -- -- -- CORE EQUITY FUND -- H-CLASS SEPTEMBER 30, 2005# 15.01 (.02) 1.15 1.13 -- -- -- March 31, 2005 14.44 -- 1.18 1.18 -- (.61) (.61) March 31, 2004 10.15 (.01) 4.41 4.40 -- (.11) (.11) March 31, 2003* 10.00 .01 .14 .15 -- -- -- SECTOR ROTATION FUND -- A-CLASS SEPTEMBER 30, 2005# 11.10 -- 1.72 1.72 -- -- -- March 31, 2005 10.45 (.02) .67 .65 -- -- -- March 31, 2004* 10.45 -- -- -- -- -- -- SECTOR ROTATION FUND -- C-CLASS SEPTEMBER 30, 2005# 10.87 (.04) 1.68 1.64 -- -- -- March 31, 2005 10.30 (.10) .67 .57 -- -- -- March 31, 2004 7.53 (.16) 2.93 2.77 -- -- -- March 31, 2003 9.99 (.07) (2.39) (2.46) -- -- -- March 31, 2002* 10.00 -- (.01) (.01) -- -- -- SECTOR ROTATION FUND -- H-CLASS SEPTEMBER 30, 2005# 11.12 -- 1.73 1.73 -- -- -- March 31, 2005 10.45 (.03) .70 .67 -- -- -- March 31, 2004 7.58 (.09) 2.96 2.87 -- -- -- March 31, 2003 9.99 (.01) (2.40) (2.41) -- -- -- March 31, 2002* 10.00 -- (.01) (.01) -- -- -- RATIOS TO AVERAGE NET ASSETS: ------------------- NET INCREASE NET ASSET NET NET ASSETS, (DECREASE) IN VALUE, TOTAL INVESTMENT PORTFOLIO END OF NET ASSET END OF INVESTMENT TOTAL INCOME TURNOVER PERIOD (000'S VALUE PERIOD RETURN EXPENSES (LOSS) RATE*** OMITTED) - -------------------------------------------------------------------------------------------------------------------------------- CORE EQUITY FUND -- A-CLASS SEPTEMBER 30, 2005# $ 1.13 $16.14 7.53% 1.63%** (0.22)%** 110% $ 1,637 March 31, 2005 .57 15.01 8.16% 1.57% 0.16% 159% 906 March 31, 2004* -- 14.44 0.00% 0.00%**@ 0.00%** 226% 1 CORE EQUITY FUND -- C-CLASS SEPTEMBER 30, 2005# 1.04 15.75 7.07% 2.38%** (0.98)%** 110% 32,556 March 31, 2005 .44 14.71 7.34% 2.31% (0.71)% 159% 34,793 March 31, 2004 4.16 14.27 42.29% 2.24% (0.87)% 226% 23,811 March 31, 2003* .11 10.11 1.10% 2.41%** (0.48)%** 123% 5,771 CORE EQUITY FUND -- H-CLASS SEPTEMBER 30, 2005# 1.13 16.14 7.53% 1.62%** (0.23)%** 110% 43,379 March 31, 2005 .57 15.01 8.16% 1.56% 0.03% 159% 51,139 March 31, 2004 4.29 14.44 43.41% 1.49% (0.11)% 226% 42,568 March 31, 2003* .15 10.15 1.50% 1.67%** 0.22%** 123% 18,516 SECTOR ROTATION FUND -- A-CLASS SEPTEMBER 30, 2005# 1.72 12.82 15.50% 1.63%** 0.00%** 113% 7,919 March 31, 2005 .65 11.10 6.22% 1.63% (0.19)% 262% 2,989 March 31, 2004* -- 10.45 0.00% 0.00%**@ 0.00%** 253% 5 SECTOR ROTATION FUND -- C-CLASS SEPTEMBER 30, 2005# 1.64 12.51 15.09% 2.38%** (0.67)%** 113% 66,106 March 31, 2005 .57 10.87 5.53% 2.38% (1.03)% 262% 54,604 March 31, 2004 2.77 10.30 36.79% 2.41% (1.66)% 253% 59,192 March 31, 2003 (2.46) 7.53 (24.62)% 2.44% (0.83)% 451% 17,538 March 31, 2002* (.01) 9.99 (0.10)% 2.44%** (1.86)%** -- 5,150 SECTOR ROTATION FUND -- H-CLASS SEPTEMBER 30, 2005# 1.73 12.85 15.56% 1.63%** 0.00%** 113% 92,614 March 31, 2005 .67 11.12 6.41% 1.64% (0.31)% 262% 56,725 March 31, 2004 2.87 10.45 37.86% 1.66% (0.88)% 253% 86,677 March 31, 2003 (2.41) 7.58 (24.12)% 1.68% (0.08)% 451% 34,845 March 31, 2002* (.01) 9.99 (0.10)% 1.69%** (1.13)%** -- 18,055 * SINCE THE COMMENCEMENT OF OPERATIONS: MARCH 22, 2002 -- SECTOR ROTATION FUND C-CLASS AND H-CLASS; SEPTEMBER 23, 2002-- CORE EQUITY FUND C-CLASS AND H-CLASS; MARCH 31, 2004 -- CORE EQUITY FUND A-CLASS AND SECTOR ROTATION FUND A-CLASS. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. @ EXPENSE RATIOS FOR THE PERIOD ENDED MARCH 31, 2004 ARE CALCULATED FOR ONE DAY ONLY AND ARE NOT INDICATIVE OF FUTURE CLASS PERFORMANCE. # UNAUDITED 20 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Rydex Series Funds (the "Trust") is registered with the SEC under the Investment Company Act of 1940 (the "1940 Act") as a non-diversified, open-ended investment company, and is authorized to issue an unlimited number of no par value shares. The Trust offers five separate classes of shares, Investor Class Shares, Advisor Class Shares, A-Class Shares, C-Class Shares, and H-Class Shares. Sales of shares of each Class are made without a sales charge at the net asset value per share, with the exception of A-Class Shares. C-Class Shares have a 1% Contingent Deferred Sales Charge ("CDSC") if Shares are redeemed within 12 months of purchase. A-Class Shares are sold at net asset value, plus the applicable front-end sales charge. The sales charge varies depending on the amount of your purchase, but will not exceed 4.75%. A-Class Share purchases of $1 million or more have a 1% CDSC if Shares are redeemed within 18 months of purchase. The current sales charge rates are as follows: SALES CHARGE SALES CHARGE AMOUNT AS % OF AS % OF NET OF INVESTMENT OFFERING PRICE AMOUNT INVESTED - --------------------------------------------------------------------- Less than $100,000 4.75% 4.99% $100,000 but less than $250,000 3.75% 3.90% $250,000 but less than $500,000 2.75% 2.83% $500,000 but less than $1,000,000 1.60% 1.63% $1,000,000 or greater 0.00% 0.00% At September 30, 2005, the Trust consisted of forty-eight separate series: twenty-four Benchmark Funds, one Money Market Fund, one Absolute Return Strategies Fund, one Hedged Equity Fund, nineteen Sector Funds, and two Strategic Funds. This report covers the Strategic Funds (the "Funds"), while the Money Market Fund, the Benchmark Funds, the Sector Funds, the Absolute Return Strategies Fund and the Hedged Equity Fund are contained in separate reports. As of September 30, 2005, only A-Class, C-Class and H-Class Shares had been issued in the Strategic Funds. The following significant accounting policies are in conformity with accounting principles generally accepted in the United States of America and are consistently followed by the Trust. A. Equity securities listed on an exchange (New York Stock Exchange ("NYSE") or American Stock Exchange) are valued at the last quoted sales price as of close of business on the NYSE, usually 4:00 p.m., Eastern Time, on the valuation date. Equity securities listed on the Nasdaq market system are valued at the Nasdaq Official Closing Price, usually as of 4:00 p.m., Eastern Time, on the valuation date. The value of futures contracts purchased and sold by the Trust are 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 last quoted sales price, usually as of 4:00 p.m., Eastern Time, on the valuation date. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., Eastern Time, 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., Eastern Time, to determine if fair valuation would provide a more accurate valuation. Short-term securities, if any, are valued at amortized cost, which approximates market value. Investments for which market quotations are not readily available are valued at fair value as determined in good faith by or under direction of the Board of Trustees or by Rydex Global Advisors (the "Advisor") using methods established or ratified by the Board of Trustees. These methods include, but are not limited to: (i) general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) other information and considerations, including current values in related-markets. B. Securities 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. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Interest income, including amortization of premiums and accretion of discount, is accrued on a daily basis. C. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the Classes based upon the value of the outstanding shares in each Class. Certain costs, such as distribution fees related to A-Class Shares and H-Class Shares and service and distribution fees related to C-Class Shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net asset value of each Fund included in the Trust. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 21 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- D. Distributions of net investment income and net realized capital gains are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for items such as deferral of wash sales and post-October losses and regulated futures contracts and options. Net investment income and loss, net realized gains and losses, and net assets are not affected by these differences. E. Each Strategic Fund seeks long-term capital appreciation and to respond to the dynamically changing economy by moving its investments among different sectors or industries. The Funds may also purchase American Depository Receipts ("ADR"), U.S. Government securities, enter into repurchase agreements, and engage in futures, options and equity swap transactions. F. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. G. The Fund may leave Cash in Custodian Bank overnight in its cash account with the custodian, U.S. Bank. Periodically, a Fund may have Cash Payable to 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. 2. FINANCIAL INSTRUMENTS As part of its investment strategy, the Trust may utilize a variety of derivative instruments, including options, futures, options on futures, and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities. In 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 its affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. The risk associated with purchasing options is limited to the premium originally paid. Options written by a Fund involve, to varying degrees, risk of loss in excess of the option value reflected in the Statements of Assets and Liabilities. The risk in writing a covered call option is that a Fund may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a covered put option is that a Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market or, for over-the-counter options, because of the counterparty's inability to perform. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. There are several risks in connection with the use of futures contracts. Futures contracts involve, to varying degrees, risk of loss in excess of amounts reflected in the financial statements. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market. The use of equity swaps involves risks that are different from those associated with ordinary portfolio securities transactions. Swap agreements may be considered to be illiquid. Although the Trust will not enter into any swap agreement unless the Advisor believes that the other party to the transaction is creditworthy, a Fund does bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of the agreement counterparty. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. In conjunction with the use of options, futures, options on futures, swap agreements, as well as short sales of securities, 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 segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund. Short sales are transactions in which the Fund sells a security it does not own. If the security the Fund sold short goes down in price between the time the Fund sells the security and closes its short position, the 22 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- Fund will realize a gain on the transaction. Conversely, if the security goes up 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. The risks inherent in the use of options, futures contracts, options on futures contracts, swap agreements as well as short sales of securities include i) adverse changes in the value of such instruments; ii) imperfect correlation between the price of the instruments and movements in the price of the underlying securities, indices, or futures contracts; iii) the possible absence of a liquid secondary market for any particular instrument at any time; and iv) the potential of counterparty default. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of an investment advisory contract, the Trust pays the Advisor, an affiliated entity, investment advisory fees calculated at an annualized rate of 0.90% of the average daily net assets of the Sector Rotation Fund. Effective July 1, 2003, the Trustees voted to reduce Core Equity's base management fee to 0.70% of the Fund's average daily net assets and implement a performance adjustment, adding or subtracting a performance rate up to 0.20%, allowing the total fee to increase to a maximum of 0.90% or decrease to a minimum of 0.50%, depending on the investment performance of the Fund relative to the Russell 3000(R) Index (the "Index"). The performance comparison will be made for a rolling 12-month period, with performance adjustments made at the end of each month beginning June 30, 2004. At period ending September 30, 2005, the effective management fee was 0.90% of the Fund's average daily net assets. Certain officers and trustees of the Trust are also officers of the Advisor. Rydex Fund Services, Inc. (the "Servicer"), an affiliated entity, provides transfer agent and administrative services to the Trust for fees calculated at an annualized rate of 0.25% of the average daily net assets of each of the Strategic Funds. The Servicer also provides accounting services to the Trust calculated at an annualized rate of 0.10% on the first $250 million of the average daily net assets, 0.075% on the next $250 million of the average daily net assets, 0.05% on the next $250 million of the average daily net assets, and 0.03% on the average daily net assets over $750 million of each of the Strategic Funds. Certain officers and trustees of the Trust are also officers of the Servicer. The Servicer also provides other necessary services to the Trust, such as accounting and auditing services, legal services, printing and mailing, etc., on a pass-through basis. Such expenses vary from Fund to Fund and are allocated to the Funds based on relative net assets. The Trust has adopted a Distribution Plan applicable to its A-Class Shares and H-Class Shares, for which Rydex Distributors, Inc. (the "Distributor"), an affiliated entity, and other firms that provide distribution and/or shareholder services ("Service Providers") may receive compensation. If a Service Provider provides distribution services, the Trust will pay fees to the Distributor at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. The Distributor, in turn, will pay the Service Provider out of its fees. The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class Shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds' C-Class Shares average daily net assets. The annual 0.25% service fee compensates the shareholder's financial advisor for providing on-going services to the shareholder. The annual 0.75% distribution fee reimburses the Distributor for paying the shareholder's financial advisor an on-going sales commission. The Distributor advances the first year's service and distribution fees to the Financial Advisor. The Distributor retains the service and distribution fees on accounts with no authorized dealer of record. Certain officers and trustees of the Trust are also officers of the Distributor. 4. FEDERAL INCOME TAX INFORMATION The Funds intend to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute all net investment income and capital gains to shareholders. Therefore, no Federal income tax provision is required. Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for derivatives, foreign currency transactions, losses deferred due to wash sales, losses deferred due to post-October losses, and excise tax regulations. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital. This includes net operating losses not utilized during the current period, capital loss carryforward expired, and the utilization of earnings and profits distributed to the shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes. These reclassifica- THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 23 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- tions have no effect on net assets or net asset values per share. Any taxable gain remaining at fiscal year end is distributed in the following year. At September 30, 2005, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value were as follows: TAX TAX NET TAX UNREALIZED UNREALIZED UNREALIZED FUND COST GAIN LOSS GAIN - -------------------------------------------------------------------------------------------------- Core Equity Fund $ 80,066,603 $10,508,889 $(1,352,709) $ 9,156,180 Sector Rotation Fund 182,134,172 27,292,816 (1,389,742) 25,903,074 5. Repurchase Agreements The Funds transfer uninvested cash balances into a single joint account, along with uninvested cash balances of the OTC Fund, the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the U.S. Government Bond Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, the Large-Cap Growth Fund, the Strengthening Dollar Fund, the Weakening Dollar Fund, the U.S. Government Money Market Fund, the Nova Master Portfolio, the Ursa Master Portfolio, the Arktos Master Portfolio, the Juno Master Portfolio, the Commodities Fund, the Absolute Return Strategies Fund and the Hedged Equity Fund (all included in the Trust, but contained in separate reports). The daily aggregate balance is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury. The collateral is in the possession of the Trust's custodian and is evaluated daily to ensure that its market value exceeds by, at a minimum, 102% the delivery value of the repurchase agreements at maturity. The repurchase agreements executed by the joint account and outstanding as of September 30, 2005, were as follows: COUNTERPARTY TERMS OF AGREEMENT FACE VALUE MARKET VALUE MATURITY VALUE - ----------------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc. 3.25% due 10/03/05 $525,000,000 $ 525,000,000 $ 525,142,188 Citigroup, Inc. 3.24% due 10/03/05 375,000,000 375,000,000 375,101,250 Lehman Brothers, Inc. 3.25% due 10/03/05 295,619,135 295,619,135 295,699,198 Morgan Stanley 3.24% due 10/03/05 250,000,000 250,000,000 250,067,500 - ----------------------------------------------------------------------------------------------------------------- $1,445,619,135 $1,446,010,136 - ----------------------------------------------------------------------------------------------------------------- As of September 30, 2005, the collateral for the repurchase agreements in the joint account was as follows: SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE - ----------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds 6.125% - 8.000% $ 203,611,000 $ 257,500,263 U.S. Treasury Notes 3.000% - 3.875% 1,033,367,912 1,027,768,192 U.S. Currency 0.000% 188,000,000 188,000,000 - ----------------------------------------------------------------------------------------------------------------- $1,473,268,455 - ----------------------------------------------------------------------------------------------------------------- In the event of counterparty default, the Trust has the right to collect the collateral to offset losses incurred. There is potential loss to the Trust in the event the Trust is delayed or prevented from exercising its 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 Trust seeks to assert its rights. The Trust's investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the credit worthiness of those banks and dealers with which the Trust enters into repurchase agreements to evaluate potential risks. 6. SECURITIES TRANSACTIONS During the period ended September 30, 2005, cost of purchases and proceeds from sales of investment securities, excluding short-term and temporary cash investments, were: CORE EQUITY SECTOR ROTATION FUND FUND - -------------------------------------------------------------------------------- Purchases $ 86,119,051 $174,922,170 Sales $101,167,188 $144,867,276 24 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (CONTINUED) 7. SHARE TRANSACTIONS The Trust is authorized to distribute an unlimited number of no par value shares. Transactions in shares for the periods presented were: PURCHASED THROUGH NET SHARES SHARES PURCHASED DIVIDEND REINVESTMENT SHARES REDEEMED PURCHASED (REDEEMED) - ------------------------------------------------------------------------------------------------------------------------------------ PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30, MARCH 31, 2005+ 2005 2005+ 2005 2005+ 2005 2005+ 2005 - ------------------------------------------------------------------------------------------------------------------------------------ CORE EQUITY FUND A-Class 55,293 130,742 -- 1,988 (14,165) (72,483) 41,128 60,247 C-Class 435,496 1,678,393 -- 82,976 (733,430) (1,064,952) (297,934) 696,417 H-Class 3,094,020 5,720,952 -- 148,480 (3,811,861) (5,410,493) (717,841) 458,939 SECTOR ROTATION FUND A-Class 436,578 457,712 -- -- (88,265) (188,963) 348,313 268,749 C-Class 1,338,598 2,473,160 -- -- (1,076,816) (3,196,124) 261,782 (722,964) H-Class 5,692,008 6,351,321 -- -- (3,583,621) (9,541,682) 2,108,387 (3,190,361) + UNAUDITED THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 25 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED) - -------------------------------------------------------------------------------- 8. PORTFOLIO SECURITIES LOANED The Trust lends its securities to approved brokers to earn additional income. Within this arrangement, the Trust acts as the lender, U.S. Bank acts as the agent, and other approved registered broker dealers act as the borrowers. The Trust receives cash collateral, valued at 100% of the value of the securities on loan, which is initially held in a segregated account at U.S. Bank. As agent, U.S. Bank may, for investment purposes, pool the Trust's collateral in joint accounts with cash collateral from one or more other securities lending customers of U.S. Bank. Under the terms of the Trust's securities lending agreement with U.S. Bank, cash collateral may be invested by U.S. Bank in certain high quality, liquid investments. At September 30, 2005, the pooled cash collateral investments consisted of repurchase agreements (47.59%), commercial paper (31.82%), corporate bonds (20.58%), and mutual funds (0.01%). 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 Fund the next business day. Although the collateral mitigates risk, the Trust 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 Trust has the right under the securities lending agreement to recover the securities from the borrower on demand. At September 30, 2005, the following funds participated in securities lending and received cash collateral: VALUE OF FUND CASH COLLATERAL SECURITIES LOANED - -------------------------------------------------------------------------------- Core Equity Fund $11,708,590 $11,378,274 Sector Rotation Fund 41,490,159 40,269,756 26 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds' portfolios is available, without charge and upon request, by calling 1-800-820-0888. This information is also available from the EDGAR database on the SEC's site at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES INFORMATION The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC's website at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1-800-820-0888. RYDEX INVESTMENTS BOARD REVIEW AND APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT The 1940 Act requires that the initial approval of, as well as the continuation of, a fund's investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or "interested persons" of any party (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund's trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the SEC takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement. Consistent with these responsibilities, the Rydex Series Funds Board of Trustees (the "Board") calls and holds one meeting each year that is dedicated to considering whether to renew the investment advisory agreement (the "Advisory Agreement") between the Trust and PADCO Advisors, Inc., which does business under the name Rydex Investments ("Rydex Investments") with respect to existing funds in the Trust, including the funds discussed in this Semi-Annual Report (each a "Fund" and collectively, the "Funds"), and to reviewing certain other agreements pursuant to which Rydex Investments provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by Rydex Investments, including information about Rydex Investments' affiliates, personnel and operations. The Board also receives data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and performance. The Board also receives a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements. In addition, the Independent Trustees receive advice from independent counsel to the Independent Trustees, meet in executive session outside the presence of fund management, if necessary, and participate in question and answer sessions with representatives of Rydex Investments. At a meeting held on August 28 and 29, 2005, the Board approved the selection of Rydex Investments and the continuance of the Advisory Agreement for an additional one-year period, based on its review of qualitative and quantitative information provided by Rydex Investments. The Board's approval of the Advisory Agreement was based on consideration and evaluation of a variety of specific factors discussed at that meeting and at prior meetings, including: NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY RYDEX INVESTMENTS The Board reviewed the scope of services to be provided by Rydex Investments under the Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by Rydex Investments for the past year and the scope of services required to be provided by Rydex Investments for the upcoming year. In reviewing the scope of services provided to the Funds by Rydex Investments, the Board reviewed and discussed Rydex Investments' investment experience, noting that Rydex Investments and its affiliates have committed significant resources over time to the support of the Funds. The Board also considered Rydex Investments' compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that Rydex Investments provides information regarding the portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. In addition to the above considerations, the Board reviewed and considered Rydex Investments' investment processes and strategies, and matters related to Rydex Investments' portfolio transaction policies and procedures. In particular, the Board noted the sub- THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 27 OTHER INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- stantial volume of portfolio trades and shareholder transaction activity, in general, processed by Rydex Investments due to the unlimited exchange policy of the majority of the Funds. The Board further noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by Rydex Investments to the Funds under the Advisory Agreement were appropriate and continued to support the Board's original selection of Rydex Investments as investment adviser to the Funds. FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND RYDEX INVESTMENTS The Board reviewed statistical information prepared by Rydex Investments regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act determined by Rydex Investments to comprise each Fund's applicable peer group. Because few funds seek to provide unlimited exchange privileges similar to those of the Funds (other than the Core Equity Fund, Sector Rotation Fund, Absolute Return Strategies Fund, and Hedged Equity Fund), each Fund's applicable peer group is generally limited to the funds of two unaffiliated mutual fund families. In addition, the Board reviewed statistical information prepared by Rydex Investments relating to the performance of each Fund, as well as each Fund's ability to successfully track its benchmark over time, and a comparison of each Fund's performance to funds with similar investment objectives for the same periods and to appropriate indices/benchmarks, in light of total return, yield and market trends. The Board further noted that despite the unique nature of the Funds, the peer fund information presented to the Board was meaningful because the peer funds' investment objectives and strategies were closely aligned with those of the Funds. The Board noted that most of the Funds either outperformed their peer funds or performed in line with them over relevant periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the peer funds. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by Rydex Investments, as compared to the investment advisory fees and expense levels and performance of the peer funds, were satisfactory for the purposes of approving the continuance of the Advisory Agreement. COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY RYDEX INVESTMENTS AND ITS AFFILIATES The Board reviewed information about the profitability of the Funds to Rydex Investments based on the advisory fees payable under the Advisory Agreement for the last calendar year. Rydex Investments also presented the Board with material discussing its methodology for determining the level of advisory fees assessable to the Funds. The Board analyzed the Funds' expenses, including the investment advisory fees paid to Rydex Investments. The Board also reviewed information regarding direct revenue received by Rydex Investments and ancillary revenue received by Rydex Investments and/or its affiliates in connection with the services provided to the Funds by Rydex Investments (as discussed below). The Board also discussed Rydex Investments' profit margin as reflected in Rydex Investments' profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by Rydex Investments and its affiliates under the Advisory Agreement and from other relationships between the Funds and Rydex Investments and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate. ECONOMIES OF SCALE In connection with its review of the Funds' profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds' asset levels. The Board noted that the Advisory Agreement for the Funds did not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. The Board also noted that though Rydex Investments' assets under management were significant, the amount is spread among more than 95 Funds. Further limiting the realization of economies of scale, is the ability of shareholders of a majority of the Funds to engage in unlimited trading. The Board also reviewed Rydex Investments' historic profitability as investment adviser to the Funds and determined that reductions in fee rates or additions of breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that there are limited economies of scale to share with the Funds' shareholders. 28 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION (CONCLUDED) - -------------------------------------------------------------------------------- OTHER BENEFITS TO RYDEX INVESTMENTS AND/OR ITS AFFILIATES The Board noted that Rydex Investments reports its use of soft dollars to the Board on a quarterly basis, as well as any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or Rydex Investments pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds' shareholders. Based on the above analysis, the Board determined that the Advisory Agreement, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Agreement. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 29 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS - -------------------------------------------------------------------------------- A Board of Trustees oversees all Rydex Investments, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 1-800-820-0888. All Trustees and Officers may be reached c/o Rydex Investments, 9601 Blackwell Rd., Suite 500, Rockville, MD 20850. TRUSTEES AND OFFICERS LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - -------------------------- ----------------------------------- -------------- CARL G. VERBONCOEUR* Rydex Series Funds - 2004 110 Trustee, President (1952) Rydex Variable Trust - 2004 Rydex Dynamic Funds - 2004 Rydex ETF Trust - 2004 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer of Rydex Fund Services, Inc., PADCO Advisors, Inc., PADCO Advisors II, Inc., and Rydex Distributors, Inc. (2003 to present); Executive Vice President of Rydex Fund Services, Inc. (2000 to 2003); Vice President of Rydex Fund Services, Inc. and Rydex Distributors, Inc. (1997 to 2000) ----------------------------------- MICHAEL P. BYRUM* Rydex Series Funds - 2005 110 Trustee, Vice President and Rydex Variable Trust - 2005 Secretary (1970) Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2004 to present); Vice President of Rydex Series Funds (1997 to present); Vice President of Rydex Variable Trust (1998 to present); Vice President of Rydex Dynamic Funds (1999 to present); Vice President of Rydex ETF Trust (2002 to present); President and Trustee of Rydex Capital Partners SPhinX Fund (2003 to present); President of Rydex Global Advisors (2004 to present); Chief Operating Officer of Rydex Global Advisors and Rydex Distributors, Inc. (2003 to 2004) - -------------------------------------------------------------------------------- INDEPENDENT TRUSTEES LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - -------------------------- ----------------------------------- -------------- COREY A. COLEHOUR Rydex Series Funds - 1993 110 Trustee (1945) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Senior Vice President of Marketing/Co-Owner, Schield Management Company ----------------------------------- J. KENNETH DALTON Rydex Series Funds - 1995 110 Trustee (1941) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and Investor, The Dalton Group ----------------------------------- JOHN O. DEMARET Rydex Series Funds - 1997 110 Trustee (1940) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired 30 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (CONCLUDED) - -------------------------------------------------------------------------------- LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - -------------------------- ----------------------------------- -------------- WERNER E. KELLER Rydex Series Funds - 2005 110 Trustee (1940) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present); Chairman, Centurion Capital Management ----------------------------------- THOMAS F. LYDON, JR. Rydex Series Funds - 2005 110 Trustee (1960) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends ----------------------------------- PATRICK T. MCCARVILLE Rydex Series Funds - 1997 110 Trustee (1942) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive Officer, Par Industries, Inc. ----------------------------------- ROGER SOMERS Rydex Series Funds - 1993 110 Trustee (1944) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine - -------------------------------------------------------------------------------- EXECUTIVE OFFICERS NAME, POSITION AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH DURING PAST FIVE YEARS - ------------- ---------------------- NICK BONOS* Vice President and Treasurer of Rydex Series Funds, Vice President and Treasurer (1963) Rydex Variable Trust, Rydex Dynamic Funds, Rydex ETF Trust, and Rydex Capital Partners SPhinX Fund (2003 to present); Senior Vice President of Rydex Fund Services, Inc. (2003 to present); Vice President of Accounting of Rydex Fund Services, Inc. (2000 to 2003) JOANNA M. HAIGNEY* Chief Compliance Officer of Rydex Series Funds, Rydex Chief Compliance Officer and Assistant Variable Trust, and Rydex Dynamic Funds (2004 to Secretary (1967) present); Assistant Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2000 to present); Assistant Secretary of Rydex ETF Trust (2002 to present); Secretary of Rydex Capital Partners SPhinX Fund (2003 to present); Vice President of Compliance of Rydex Fund Services, Inc. (2000 to present) * OFFICERS OF THE FUND ARE DEEMED TO BE "INTERESTED PERSONS" OF THE TRUST, WITHIN THE MEANING OF SECTION 2(A)(19) OF THE 1940 ACT, INASMUCH AS THIS PERSON IS AFFILIATED WITH THE ADVISOR. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 31 - -------------------------------------------------------------------------------- This page intentionally left blank. - -------------------------------------------------------------------------------- This page intentionally left blank. [LOGO]RYDEXINVESTMENTS ESSENTIAL FOR MODERN MARKETS(TM) 9601 Blackwell Road, Suite 500 Rockville, MD 20850 www.rydexinvestments.com 800-820-0888 RSTF-SEMI-0905X0306 SEPTEMBER 30, 2005 RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABSOLUTE RETURN STRATEGIES FUND HEDGED EQUITY FUND [LOGO] RYDEXINVESTMENTS Essential for modern markets(TM) This report and the financial statements contained herein are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Distributed by Rydex Distributors, Inc. TABLE OF CONTENTS - -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS ................................................. 2 ABOUT SHAREHOLDERS' FUND EXPENSES .......................................... 3 FUND PROFILES .............................................................. 5 SCHEDULES OF INVESTMENTS ................................................... 6 STATEMENTS OF ASSETS AND LIABILITIES ....................................... 17 STATEMENTS OF OPERATIONS ................................................... 18 STATEMENTS OF CHANGES IN NET ASSETS ........................................ 19 FINANCIAL HIGHLIGHTS........................................................ 20 NOTES TO FINANCIAL STATEMENTS............................................... 21 OTHER INFORMATION .......................................................... 27 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS .............................. 30 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 1 LETTER TO OUR SHAREHOLDERS - -------------------------------------------------------------------------------- DEAR SHAREHOLDER: The six-month period from April through September 2005 was a tumultuous one for the economy and the financial markets. Investors, consumers and businesses alike were rocked by the twin hurricanes of Katrina and Rita and the unprecedented rise in energy prices. Energy prices-particularly for refined products such as gas, diesel, jet fuel and heating oil-skyrocketed, causing consumer confidence to plummet and raising the prospect of a pullback in consumer spending. Typically, developments like these would have a downward effect on equity prices and interest rates, but that wasn't the case as stocks rallied and interest rates finished the period largely where they began. Surprisingly, U.S. equity markets navigated the storms remarkably well. While the old economy Dow Jones Industrial Average(R) Index rose only 1.76%, the broader S&P 500(R) Index gained 5.02% and the tech-laden Nasdaq 100(R) Index rose 8.04% on the back of a mini-rally in technology stocks. Two factors appear to have driven prices higher. The first is that earnings growth remained strong, increasing at a double-digit pace in both the second and third quarters, and investors appeared to be looking beyond the immediate impact of the hurricanes to the anticipated "kick" to economic growth as reconstruction efforts got underway. As one might expect, energy stocks led the market higher. In fact, energy prices were well on their way up prior to the arrival of Katrina as the price of a barrel of crude oil rose from $49.69 in late May to a high of $69.74 by the end of August. The Gulf storms exacerbated this rise. That energy prices were already well on their way up is attributable to the rapid growth in the powerhouse economies of China and India. China, in particular, continues to import commodities of all kinds at a voracious rate. In fact, if one takes a closer look at stock prices during this period, the effect of rising energy prices and the impact of the storms becomes apparent. Clearly, energy stocks were the big winners as the S&P Energy Index rose nearly 19.56%. In fact, the meteoric rise in energy stocks is responsible for much of the stock market's positive performance this year. Utility stocks also fared well as the S&P Utility Index shot up 15.24% in anticipation of a substantial rise in home heating costs. Technology stocks rallied as valuations were perceived to be attractive. On the flip side, health care stocks, which tend to be perceived as defensive in nature, rose nearly 5.00% as investors looked for a consumer driven economic slowdown in the wake of the devastation left by Katrina and Rita. Despite the uncertainty, the Federal Reserve ("Fed") remained vigilant against any signs of increasing inflation. The shock to the economy of the storms and the loss of some of the nation's critical energy infrastructure led many to predict a pause in the Fed's rate hikes. This was not to be, as the Fed implemented four 25 basis point rate hikes during the period. Longer rates, on the other hand, actually declined from April to September, with the yield on the benchmark 10-Year Treasury Note falling 15 basis points to 4.33%. Despite this decline, interest rates are clearly on the upswing. Long-term rates bottomed on June 1, as the yield on the 10-Year Note reached 3.89%. Since the beginning of June, the trend has been up, with the 10-Year Note peaking at 4.42% in early August. With all of the crosscurrents in the economy and the financial markets, stock price behavior is likely to remain choppy and erratic. Investment strategies that do not depend on highly directional markets will likely fare well as we move through the remainder of 2005. We appreciate the trust you have placed in our firm by investing with us. Sincerely, /s/ Carl G. Verboncoeur Carl G. Verboncoeur President 2 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT ABOUT SHAREHOLDERS' FUND EXPENSES - -------------------------------------------------------------------------------- All mutual funds have operating expenses and it is important for our shareholders to understand the impact of costs on their investments. As a shareholder of the fund, you incur two types of costs: (i) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; 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 you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period and held for the entire six-month period beginning March 31, 2005 and ending September 30, 2005. The following tables illustrate your fund's costs in two ways: TABLE 1. BASED ON ACTUAL FUND RETURN. This section helps you estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return, and the fourth column shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading "Expenses Paid During Period." Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. TABLE 2. BASED ON HYPOTHETICAL 5% RETURN. This section is intended to help you compare your 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 you 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. You can assess your fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. Certain retirement plans such as IRA, Roth IRA and 403(b) accounts are charged an annual $15 maintenance fee. Upon liquidating your retirement account, a $15 account-closing fee will be taken from the proceeds of your redemption. The calculations above assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Note that the expenses shown in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs, which may be incurred by some of the fund's classes. These costs may include, but are not limited to, sales charges (loads), redemption fees, and exchange fees. You can find more information about the Fund's expenses, including annual expense ratios for the past five years, 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 SERIES FUNDS SEMI-ANNUAL REPORT | 3 ABOUT SHAREHOLDERS' FUND EXPENSES (CONCLUDED) - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES EXPENSE ACCOUNT VALUE ACCOUNT VALUE PAID DURING RATIO+ MARCH 31, 2005 SEPTEMBER 30, 2005 PERIOD* - --------------------------------------------------------------------------------------------------------- TABLE 1. BASED ON ACTUAL FUND RETURN ABSOLUTE RETURN STRATEGIES FUND A-Class 1.41% $ 1,000.00 $ 997.20 $ 7.06 C-Class 2.17% 1,000.00 997.20 10.86 H-Class 1.42% 1,000.00 997.20 7.11 HEDGED EQUITY FUND A-Class 1.44% 1,000.00 1,004.40 7.24 C-Class 2.19% 1,000.00 1,004.40 11.00 H-Class 1.48% 1,000.00 1,004.40 7.44 - --------------------------------------------------------------------------------------------------------- TABLE 2. BASED ON HYPOTHETICAL 5% RETURN ABSOLUTE RETURN STRATEGIES FUND A-Class 1.41% 1,000.00 1,017.84 7.16 C-Class 2.17% 1,000.00 1,013.98 11.02 H-Class 1.42% 1,000.00 1,017.79 7.21 HEDGED EQUITY FUND A-Class 1.44% 1,000.00 1,017.69 7.31 C-Class 2.19% 1,000.00 1,013.88 11.12 H-Class 1.48% 1,000.00 1,017.49 7.51 * EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF DAYS IN THE MOST RECENT FISCAL HALF-YEAR, THEN DIVIDED BY 365. THIS RATIO INCLUDES DIVIDEND EXPENSE FROM SECURITIES SOLD SHORT. + ANNUALIZED 4 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT FUND PROFILES - -------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND OBJECTIVE: To provide capital appreciation consistent with the return and risk characteristics of the hedge fund universe. The secondary objective is to achieve these returns with low correlation to and less volatility than equity indices. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR GRAPH IN THE PRINTED MATERIAL.] HEDGED EQUITY FUND HEDGED EQUITY FUND LONG HOLDINGS SHORT HOLDINGS ------------------ ------------------ Other 0.6% -0.2% Consumer Discretionary 1.8% -0.5% Industrials 1.4% -0.3% Financials 3.0% -1.8% Health Care 2.1% -1.3% Telecommunication Services 0.6% Energy 0.6% -0.2% Information Technology 1.2% -0.8% Consumer Staples 0.5% -0.3% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------- A-Class September 19, 2005 C-Class September 19, 2005 H-Class September 19, 2005 TEN LARGEST LONG HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------- Inamed Corp. 0.2% EGL, Inc. 0.2% Pacificare Health Systems, Inc. 0.2% Pfizer, Inc. 0.2% Shurgard Storage Centers, Inc. -- Class A 0.2% ID Biomedical Corp. 0.2% Capital Automotive REIT 0.2% BEI Technologies, Inc. 0.2% Macromedia, Inc. 0.2% Argosy Gaming Co. 0.2% - -------------------------------------------------- Top Ten Total 2.0% - -------------------------------------------------- "Ten Largest Long Holdings" exclude any temporary cash or derivative instruments. HEDGED EQUITY FUND OBJECTIVE: To provide capital appreciation consistent with the return and risk characteristics of the long/short hedge fund universe. The secondary objective is to achieve these returns with low correlation to and less volatility than equity indices. HOLDINGS DIVERSIFICATION (MARKET EXPOSURE AS % OF NET ASSETS) [THE FOLLOWING TABLE WAS REPRESENTED BY A BAR GRAPH IN THE PRINTED MATERIAL.] HEDGED EQUITY FUND HEDGED EQUITY FUND LONG HOLDINGS SHORT HOLDINGS ------------------ ------------------ Other 7.6% -1.8% Energy 6.2% -1.5% Materials 4.4% -0.9% Industrials 6.8% -4.2% Health Care 5.5% -4.4% Information Technology 4.4% -3.8% Financials 5.7% -5.7% Consumer Discretionary 3.8% -4.3% "Holdings Diversification (Market Exposure as % of Net Assets)" excludes any temporary cash investments. INCEPTION DATES: - -------------------------------------------------- A-Class September 19, 2005 C-Class September 19, 2005 H-Class September 19, 2005 TEN LARGEST LONG HOLDINGS (% OF TOTAL NET ASSETS) - -------------------------------------------------- Altria Group, Inc. 1.9% Texas Instruments, Inc. 1.7% Pfizer, Inc. 1.5% Norfolk Southern Corp. 1.2% Prudential Financial, Inc. 1.2% Burlington Northern Santa Fe Corp. 1.1% SBC Communications, Inc. 1.1% Amerada Hess Corp. 1.0% Freddie Mac 1.0% Caremark Rx, Inc. 0.9% - -------------------------------------------------- Top Ten Total 12.6% - -------------------------------------------------- "Ten Largest Long Holdings" exclude any temporary cash or derivative instruments. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 5 SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- COMMON STOCKS 11.8% FINANCIALS 3.0% BANKS 1.2% Amegy Bancorp, Inc.+ 251 $ 5,680 Hudson United Bancorp+ 134 5,672 Hibernia Corp. -- Class A+ 188 5,648 Westcorp+ 92 5,419 Unizan Financial Corp.+ 222 5,375 State Financial Services Corp. -- Class A+ 147 5,368 National City Corp.+ 62 2,073 -------------- TOTAL BANKS 35,235 -------------- REAL ESTATE 0.6% Shurgard Storage Centers, Inc. -- Class A+ 104 5,810 Capital Automotive REIT+ 149 5,768 Gables Residential Trust 131 5,718 -------------- TOTAL REAL ESTATE 17,296 -------------- CONSUMER FINANCE 0.4% Metris Companies, Inc.*+ 389 5,691 WFS Financial, Inc.*+ 81 5,442 -------------- TOTAL CONSUMER FINANCE 11,133 -------------- THRIFTS & MORTGAGE FINANCE 0.3% Commercial Federal Corp.+ 167 5,702 Freddie Mac+ 66 3,726 -------------- TOTAL THRIFTS & MORTGAGE FINANCE 9,428 -------------- INSURANCE 0.3% Hartford Financial Services Group, Inc.+ 27 2,084 Chubb Corp.+ 18 1,612 ACE Ltd.+ 26 1,224 XL Capital Ltd.+ 14 952 Ambac Financial Group, Inc.+ 11 793 MBIA, Inc.+ 12 727 -------------- TOTAL INSURANCE 7,392 -------------- DIVERSIFIED FINANCIALS 0.2% Archipelago Holdings, Inc.*+ 138 5,499 CIT Group, Inc.+ 20 904 -------------- TOTAL DIVERSIFIED FINANCIALS 6,403 -------------- TOTAL FINANCIALS 86,887 -------------- HEALTH CARE 2.1% HEALTH CARE PROVIDERS & SERVICES 1.2% Pacificare Health Systems, Inc.*+ 74 5,904 LabOne, Inc.*+ 131 5,699 Priority Healthcare Corp. -- Class B*+ 204 5,683 Renal Care Group, Inc.*+ 120 5,678 NDCHealth Corp.+ 300 5,676 Beverly Enterprises, Inc.*+ 450 5,513 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- HCA, Inc.+ 15 $ 719 CIGNA Corp.+ 5 589 AmerisourceBergen Corp.+ 3 232 -------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 35,693 -------------- BIOTECHNOLOGY 0.4% ID Biomedical Corp.*+ 192 5,770 Eyetech Pharmaceuticals, Inc.*+ 311 5,585 -------------- TOTAL BIOTECHNOLOGY 11,355 -------------- PHARMACEUTICALS 0.3% Pfizer, Inc.+ 234 5,843 Merck & Co., Inc.+ 69 1,877 Watson Pharmaceuticals, Inc.*+ 3 110 -------------- TOTAL PHARMACEUTICALS 7,830 -------------- HEALTH CARE EQUIPMENT & SUPPLIES 0.2% Inamed Corp.*+ 80 6,054 -------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 6,054 -------------- TOTAL HEALTH CARE 60,932 -------------- CONSUMER DISCRETIONARY 1.8% HOTELS, RESTAURANTS & LEISURE 0.4% Argosy Gaming Co.*+ 122 5,733 Six Flags, Inc.*+ 777 5,586 -------------- TOTAL HOTELS, RESTAURANTS & LEISURE 11,319 -------------- MEDIA 0.4% Insight Communications Co., Inc.*+ 488 5,675 Cablevision Sys Corp. -- Class A*+ 183 5,613 -------------- TOTAL MEDIA 11,288 -------------- SPECIALTY RETAIL 0.4% Brookstone, Inc.*+ 287 5,723 Electronics Boutique Holdings Corp.*+ 86 5,404 -------------- TOTAL SPECIALTY RETAIL 11,127 -------------- MULTILINE RETAIL 0.3% ShopKo Stores, Inc.*+ 224 5,716 Federated Department Stores, Inc.+ 18 1,204 Family Dollar Stores, Inc.+ 17 338 Dillard's, Inc. -- Class A+ 9 188 -------------- TOTAL MULTILINE RETAIL 7,446 -------------- LEISURE EQUIPMENT & PRODUCTS 0.2% Action Performance Cos., Inc.+ 447 5,587 -------------- TOTAL LEISURE EQUIPMENT & PRODUCTS 5,587 -------------- AUTOMOBILES 0.1% Ford Motor Co.+ 194 1,913 General Motors Corp.+ 62 1,898 -------------- TOTAL AUTOMOBILES 3,811 -------------- AUTO COMPONENTS 0.0% Johnson Controls, Inc.+ 20 1,241 -------------- TOTAL AUTO COMPONENTS 1,241 -------------- 6 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- TEXTILES & APPAREL 0.0% VF Corp.+ 12 $ 696 Jones Apparel Group, Inc.+ 12 342 -------------- TOTAL TEXTILES & APPAREL 1,038 -------------- HOUSEHOLD DURABLES 0.0% Whirlpool Corp.+ 8 606 -------------- TOTAL HOUSEHOLD DURABLES 606 -------------- TOTAL CONSUMER DISCRETIONARY 53,463 -------------- INDUSTRIALS 1.4% COMMERCIAL SERVICES & SUPPLIES 0.5% School Specialty, Inc.*+ 117 5,707 Central Parking Corp.+ 369 5,517 Cendant Corp.+ 113 2,332 -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 13,556 -------------- AIR FREIGHT & COURIERS 0.3% EGL, Inc.*+ 221 6,000 FedEx Corp.+ 33 2,875 Ryder System, Inc.+ 8 274 -------------- TOTAL AIR FREIGHT & COURIERS 9,149 -------------- BUILDING PRODUCTS 0.2% York International Corp.+ 101 5,663 -------------- TOTAL BUILDING PRODUCTS 5,663 -------------- MARINE 0.2% CP Ships Ltd.+ 263 5,610 -------------- TOTAL MARINE 5,610 -------------- CONSTRUCTION & ENGINEERING 0.2% Dycom Industries, Inc.*+ 270 5,459 -------------- TOTAL CONSTRUCTION & ENGINEERING 5,459 -------------- ROAD & RAIL 0.0% Norfolk Southern Corp.+ 42 1,704 -------------- TOTAL ROAD & RAIL 1,704 -------------- MACHINERY 0.0% Parker Hannifin Corp.+ 12 772 Cummins, Inc.+ 5 440 -------------- TOTAL MACHINERY 1,212 -------------- TOTAL INDUSTRIALS 42,353 -------------- INFORMATION TECHNOLOGY 1.2% SOFTWARE 0.4% Macromedia, Inc.*+ 141 5,734 SS&C Technologies Co.+ 156 5,716 -------------- TOTAL SOFTWARE 11,450 -------------- IT CONSULTING & SERVICES 0.2% Acxiom Corp.+ 288 5,391 Computer Sciences Corp.*+ 9 426 Affiliated Computer Services, Inc. -- Class A*+ 6 328 Sabre Holdings Corp.+ 6 122 Convergys Corp.*+ 8 115 -------------- TOTAL IT CONSULTING & SERVICES 6,382 -------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 0.2% Helix Technology Corp.+ 374 $ 5,517 Freescale Semiconductor, Inc. -- Class B*+ 21 495 -------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 6,012 -------------- ELECTRONIC EQUIPMENT & INSTRUMENTS 0.2% BEI Technologies, Inc.+ 164 5,738 -------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 5,738 -------------- INTERNET SOFTWARE & SERVICES 0.2% Intermix Media, Inc.* 477 5,705 -------------- TOTAL INTERNET SOFTWARE & SERVICES 5,705 -------------- OFFICE ELECTRONICS 0.0% Xerox Corp.*+ 48 655 -------------- TOTAL OFFICE ELECTRONICS 655 -------------- TOTAL INFORMATION TECHNOLOGY 35,942 -------------- ENERGY 0.6% OIL & GAS 0.6% PetroKazakhstan, Inc. -- Class A+ 105 5,715 Tipperary Corp.*+ 771 5,682 Amerada Hess Corp.+ 27 3,713 Kerr-McGee Corp.+ 35 3,399 -------------- TOTAL OIL & GAS 18,509 -------------- TOTAL ENERGY 18,509 -------------- TELECOMMUNICATION SERVICES 0.6% DIVERSIFIED TELECOMMUNICATION SERVICES 0.6% PanAmSat Holding Corp.+ 233 5,639 Verizon Communications, Inc.+ 143 4,675 SBC Communications, Inc.+ 170 4,075 BellSouth Corp.+ 95 2,498 CenturyTel, Inc.+ 8 280 -------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 17,167 -------------- TOTAL TELECOMMUNICATION SERVICES 17,167 -------------- CONSUMER STAPLES 0.5% FOOD & DRUG RETAILING 0.2% 7-Eleven, Inc.*+ 159 5,662 Albertson's, Inc.+ 38 975 -------------- TOTAL FOOD & DRUG RETAILING 6,637 -------------- FOOD PRODUCTS 0.2% General Mills, Inc.+ 50 2,410 Archer-Daniels-Midland Co.+ 84 2,072 -------------- TOTAL FOOD PRODUCTS 4,482 -------------- TOBACCO 0.1% Reynolds American, Inc.+ 21 1,743 -------------- TOTAL TOBACCO 1,743 -------------- BEVERAGES 0.0% Molson Coors Brewing Co. -- Class B+ 11 704 -------------- TOTAL BEVERAGES 704 -------------- TOTAL CONSUMER STAPLES 13,566 -------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 7 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- UTILITIES 0.3% MULTI-UTILITIES 0.2% NorthWestern Corp.+ 188 $ 5,676 PG&E Corp.+ 23 903 NiSource, Inc.+ 18 436 -------------- TOTAL MULTI-UTILITIES 7,015 -------------- ELECTRIC UTILITIES 0.1% American Electric Power Co., Inc.+ 24 953 Pinnacle West Capital Corp.+ 6 264 -------------- TOTAL ELECTRIC UTILITIES 1,217 -------------- TOTAL UTILITIES 8,232 -------------- MATERIALS 0.3% METALS & MINING 0.2% Metals USA, Inc.*+ 278 5,688 United States Steel Corp.+ 8 339 -------------- TOTAL METALS & MINING 6,027 -------------- PAPER & FOREST PRODUCTS 0.1% Weyerhaeuser Co.+ 15 1,031 Georgia-Pacific Corp.+ 17 579 Louisiana-Pacific Corp.+ 8 222 -------------- TOTAL PAPER & FOREST PRODUCTS 1,832 -------------- TOTAL MATERIALS 7,859 -------------- TOTAL COMMON STOCKS (Cost $345,296) 344,910 -------------- CONTRACTS ----------- OPTIONS PURCHASED 0.0% Put Options on: October 2005 S&P 500 Index Futures Contracts Expiring October 2005 with strike price of 1140 2 275 -------------- TOTAL OPTIONS PURCHASED (Cost $758) 275 -------------- FACE AMOUNT ----------- REPURCHASE AGREEMENTS 86.4% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 1,433,356 1,433,356 3.24% due 10/03/05 1,091,673 1,091,673 -------------- TOTAL REPURCHASE AGREEMENTS (Cost $2,525,029) 2,525,029 -------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- COMMON STOCKS SOLD SHORT (5.3)% MATERIALS (0.1)% METALS & MINING (0.1)% Allegheny Technologies, Inc. 18 $ (557) Freeport-McMoRan Copper & Gold, Inc. -- Class B 35 (1,701) -------------- TOTAL METALS & MINING (2,258) -------------- TOTAL MATERIALS (2,258) -------------- UTILITIES (0.1)% MULTI-UTILITIES 0.0% TECO Energy, Inc. 18 (324) -------------- TOTAL MULTI-UTILITIES (324) -------------- ELECTRIC UTILITIES (0.1)% TXU Corp. 20 (2,258) -------------- TOTAL ELECTRIC UTILITIES (2,258) -------------- TOTAL UTILITIES (2,582) -------------- ENERGY (0.2)% ENERGY EQUIPMENT & SERVICES (0.2)% Halliburton Co. 102 (6,989) -------------- TOTAL ENERGY EQUIPMENT & SERVICES (6,989) -------------- TOTAL ENERGY (6,989) -------------- CONSUMER STAPLES (0.3)% FOOD PRODUCTS (0.1)% Hershey Co. 17 (957) -------------- TOTAL FOOD PRODUCTS (957) -------------- FOOD & DRUG RETAILING (0.1)% Walgreen Co. 68 (2,955) -------------- TOTAL FOOD & DRUG RETAILING (2,955) -------------- PERSONAL PRODUCTS (0.1)% Gillette Co. 65 (3,783) -------------- TOTAL PERSONAL PRODUCTS (3,783) -------------- TOTAL CONSUMER STAPLES (7,695) -------------- INDUSTRIALS (0.3)% COMMERCIAL SERVICES & SUPPLIES 0.0% Monster Worldwide, Inc.* 8 (246) -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES (246) -------------- AEROSPACE & DEFENSE (0.1)% Boeing Co. 47 (3,194) -------------- TOTAL AEROSPACE & DEFENSE (3,194) -------------- AIR FREIGHT & COURIERS (0.2)% United Parcel Service, Inc. -- Class B 66 (4,562) -------------- TOTAL AIR FREIGHT & COURIERS (4,562) -------------- TOTAL INDUSTRIALS (8,002) -------------- CONSUMER DISCRETIONARY (0.4)% MEDIA 0.0% Dow Jones & Co., Inc. 6 (229) -------------- TOTAL MEDIA (229) -------------- 8 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- MULTILINE RETAIL 0.0% Nordstrom, Inc. 20 $ (686) -------------- TOTAL MULTILINE RETAIL (686) -------------- TEXTILES & APPAREL 0.0% Coach, Inc.* 29 (909) -------------- TOTAL TEXTILES & APPAREL (909) -------------- COMMERCIAL SERVICES & SUPPLIES 0.0% Apollo Group, Inc. -- Class A* 14 (930) -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES (930) -------------- HOTELS, RESTAURANTS & LEISURE 0.0% Hilton Hotels Corp. 30 (670) International Game Technology, Inc. 26 (702) -------------- TOTAL HOTELS, RESTAURANTS & LEISURE (1,372) -------------- INTERNET & CATALOG RETAIL (0.2)% eBay, Inc.* 108 (4,450) -------------- TOTAL INTERNET & CATALOG RETAIL (4,450) -------------- SPECIALTY RETAIL (0.2)% GAMESTOP Corp.* 153 (4,815) -------------- TOTAL SPECIALTY RETAIL (4,815) -------------- TOTAL CONSUMER DISCRETIONARY (13,391) -------------- INFORMATION TECHNOLOGY (0.8)% COMMUNICATIONS EQUIPMENT (0.1)% ADC Telecommunications, Inc.* 11 (252) Comverse Technology, Inc.* 20 (525) Corning, Inc.* 140 (2,706) -------------- TOTAL COMMUNICATIONS EQUIPMENT (3,483) -------------- COMPUTERS & PERIPHERALS (0.1)% Apple Computer, Inc.* 74 (3,967) -------------- TOTAL COMPUTERS & PERIPHERALS (3,967) -------------- INTERNET SOFTWARE & SERVICES (0.2)% Yahoo!, Inc.* 137 (4,636) -------------- TOTAL INTERNET SOFTWARE & SERVICES (4,636) -------------- SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT (0.2)% Nvidia Corp.* 15 (514) Brooks Automation, Inc.* 402 (5,359) -------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT (5,873) -------------- SOFTWARE (0.2)% Autodesk, Inc. 23 (1,068) Adobe Systems, Inc. 188 (5,612) -------------- TOTAL SOFTWARE (6,680) -------------- TOTAL INFORMATION TECHNOLOGY (24,639) -------------- HEALTH CARE (1.3)% HEALTH CARE EQUIPMENT & SUPPLIES (0.1)% Stryker Corp. 48 (2,373) -------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES (2,373) -------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- BIOTECHNOLOGY (0.3)% Medimmune, Inc.* 26 $ (875) Gilead Sciences, Inc.* 47 (2,292) OSI Pharmaceuticals, Inc.* 177 (5,175) -------------- TOTAL BIOTECHNOLOGY (8,342) -------------- HEALTH CARE PROVIDERS & SERVICES (0.4)% Tenet Healthcare Corp.* 53 (595) UnitedHealth Group, Inc. 102 (5,733) Per-Se Technologies, Inc.* 303 (6,260) -------------- TOTAL HEALTH CARE PROVIDERS & SERVICES (12,588) -------------- PHARMACEUTICALS (0.5)% Schering-Plough Corp. 164 (3,452) Medicis Pharmaceutical Corp. -- Class A 168 (5,470) GlaxoSmithKline PLC -- SP ADR 111 (5,692) -------------- TOTAL PHARMACEUTICALS (14,614) -------------- TOTAL HEALTH CARE (37,917) -------------- FINANCIALS (1.8)% DIVERSIFIED FINANCIALS (0.1)% Moody's Corp. 42 (2,145) -------------- TOTAL DIVERSIFIED FINANCIALS (2,145) -------------- CONSUMER FINANCE (0.2)% Capital One Financial Corp. 68 (5,407) -------------- TOTAL CONSUMER FINANCE (5,407) -------------- REAL ESTATE (0.3)% Simon Property Group, Inc. 32 (2,372) Public Storage, Inc. 81 (5,427) -------------- TOTAL REAL ESTATE (7,799) -------------- CAPITAL MARKETS (0.3)% T. Rowe Price Group, Inc. 18 (1,175) Northern Trust Corp. 32 (1,618) Charles Schwab Corp. 176 (2,540) Franklin Resources, Inc. 36 (3,022) -------------- TOTAL CAPITAL MARKETS (8,355) -------------- BANKS (0.9)% Synovus Financial Corp. 45 (1,247) Huntington Bancshares, Inc. 234 (5,258) Associated Banc-Corp. 173 (5,273) Wachovia Corp. 111 (5,283) Zions Bancorporation 77 (5,483) Banknorth Group, Inc.* 182 (5,486) -------------- TOTAL BANKS (28,030) -------------- TOTAL FINANCIALS (51,736) -------------- TOTAL COMMON STOCKS SOLD SHORT (Proceeds $153,523) (155,209) -------------- TOTAL INVESTMENTS 92.9% (Cost $2,717,560) $ 2,715,005 ============== OTHER ASSETS IN EXCESS OF LIABILITIES - 7.1% $ 206,305 ============== NET ASSETS - 100.0% $ 2,921,310 =============================================================================== See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 9 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND - -------------------------------------------------------------------------------- UNREALIZED GAIN (LOSS) CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------- FUTURES CONTRACTS PURCHASED December 2005 U.S. 10-Year Treasury Note Index Futures Contracts (Aggregate Market Value of Contracts $439,750) 4 $ 533 October 2005 Goldman Sachs Commodity Index Futures Contracts (Aggregate Market Value of Contracts $117,500) 1 (269) December 2005 Russell 2000 Index Mini Futures Contracts (Aggregate Market Value of Contracts $401,940) 6 (258) December 2005 S&P MidCap 400 Index Mini Futures Contracts (Aggregate Market Value of Contracts $360,100) 5 (909) -------------- (TOTAL AGGREGATE MARKET VALUE OF CONTRACTS $1,319,290) $ (903) ============== FUTURES CONTRACTS SOLD SHORT December 2005 U.S. Dollar Index Futures Contracts (Aggregate Market Value of Contracts $536,100) 6 (1,256) December 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $308,500) 5 (131) -------------- (TOTAL AGGREGATE MARKET VALUE OF CONTRACTS $844,600) $ (1,387) ============== * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY WAS HELD AS SHORT SECURITY COLLATERAL AT SEPTEMBER 30, 2005. ADR--AMERICAN DEPOSITORY RECEIPT. REIT--REAL ESTATE INVESTMENT TRUST. 10 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- HEDGED EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- COMMON STOCKS 44.2% INDUSTRIALS 6.8% CONSTRUCTION & ENGINEERING 2.4% Fluor Corp.+ 83 $ 5,344 Jacobs Engineering Group, Inc.*+ 66 4,448 Chicago Bridge & Iron NV Co.+ 126 3,917 McDermott International, Inc.*+ 100 3,661 Shaw Group, Inc.*+ 128 3,156 URS Corp.*+ 75 3,029 Granite Construction, Inc.+ 74 2,830 Washington Group International, Inc.*+ 51 2,748 Quanta Services, Inc.*+ 206 2,629 Foster Wheeler Ltd.*+ 85 2,626 EMCOR Group, Inc.*+ 35 2,076 Dycom Industries, Inc.*+ 95 1,921 Insituform Technologies, Inc. -- Class A*+ 83 1,435 -------------- TOTAL CONSTRUCTION & ENGINEERING 39,820 -------------- ROAD & RAIL 2.3% Norfolk Southern Corp.+ 513 20,807 Burlington Northern Santa Fe Corp.+ 304 18,179 -------------- TOTAL ROAD & RAIL 38,986 -------------- AIR FREIGHT & COURIERS 0.8% FedEx Corp.+ 145 12,634 Ryder System, Inc.+ 15 513 -------------- TOTAL AIR FREIGHT & COURIERS 13,147 -------------- COMMERCIAL SERVICES & SUPPLIES 0.7% Cendant Corp.+ 494 10,196 Monster Worldwide, Inc.*+ 73 2,242 -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES 12,438 -------------- MACHINERY 0.3% Parker Hannifin Corp.+ 55 3,537 Cummins, Inc.+ 20 1,760 -------------- TOTAL MACHINERY 5,297 -------------- ELECTRICAL EQUIPMENT 0.3% American Power Conversion Corp.+ 164 4,248 -------------- TOTAL ELECTRICAL EQUIPMENT 4,248 -------------- TOTAL INDUSTRIALS 113,936 -------------- ENERGY 6.2% OIL & GAS 3.8% Amerada Hess Corp.+ 121 16,638 Kerr-McGee Corp.+ 149 14,469 Exxon Mobil Corp.+ 73 4,639 BP PLC -- SP ADR+ 53 3,755 Royal Dutch Shell PLC -- SP ADR+ 55 3,610 Total SA -- SP ADR+ 23 3,124 PetroChina Co. Ltd. -- SP ADR+ 36 3,001 Royal Dutch Petroleum Co.+ 43 2,701 ENI-Ente Nazionale Idrocarburi -- SP ADR+ 16 2,370 Petroleo Brasiliero SA -- Petrobras+ 29 2,073 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- EnCana Corp.+ 30 $ 1,749 Statoil ASA -- SP ADR+ 70 1,728 China Petroleum & Chemical Corp. -- SP ADR+ 35 1,584 Imperial Oil Ltd.+ 13 1,496 Repsol YPF SA -- SP ADR+ 45 1,454 -------------- TOTAL OIL & GAS 64,391 -------------- ENERGY EQUIPMENT & SERVICES 2.4% Halliburton Co.+ 83 5,687 Schlumberger Ltd.+ 59 4,978 Baker Hughes, Inc.+ 53 3,163 Transocean, Inc.*+ 51 3,127 Tenaris SA -- SP ADR+ 21 2,895 GlobalSantaFe Corp.+ 53 2,418 Nabors Industries Ltd.*+ 33 2,370 National-Oilwell Varco, Inc.*+ 36 2,369 Weatherford International Ltd.*+ 30 2,060 Noble Corp.+ 30 2,054 Diamond Offshore Drilling, Inc.+ 33 2,021 ENSCO International, Inc.+ 43 2,003 Patterson-UTI Energy, Inc.+ 53 1,912 Smith International, Inc.+ 55 1,832 BJ Services Co.+ 25 900 -------------- TOTAL ENERGY EQUIPMENT & SERVICES 39,789 -------------- TOTAL ENERGY 104,180 -------------- FINANCIALS 5.7% INSURANCE 3.5% Prudential Financial, Inc.+ 296 19,998 Loews Corp.+ 106 9,795 Hartford Financial Services Group, Inc.+ 119 9,183 Chubb Corp.+ 79 7,074 ACE Ltd.+ 113 5,319 XL Capital Ltd.+ 58 3,946 MBIA, Inc.+ 56 3,395 -------------- TOTAL INSURANCE 58,710 -------------- THRIFTS & MORTGAGE FINANCE 1.0% Freddie Mac+ 291 16,430 -------------- TOTAL THRIFTS & MORTGAGE FINANCE 16,430 -------------- BANKS 0.5% National City Corp.+ 274 9,163 -------------- TOTAL BANKS 9,163 -------------- REAL ESTATE 0.3% Archstone-Smith Trust+ 120 4,784 -------------- TOTAL REAL ESTATE 4,784 -------------- DIVERSIFIED FINANCIALS 0.2% CIT Group, Inc.+ 86 3,885 -------------- TOTAL DIVERSIFIED FINANCIALS 3,885 -------------- CAPITAL MARKETS 0.2% E*Trade Financial Corp.*+ 213 3,749 -------------- TOTAL CAPITAL MARKETS 3,749 -------------- TOTAL FINANCIALS 96,721 -------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 11 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- HEDGED EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- HEALTH CARE 5.5% HEALTH CARE PROVIDERS & SERVICES 2.8% Caremark Rx, Inc.*+ 295 $ 14,729 CIGNA Corp.+ 109 12,847 Medco Health Solutions, Inc.*+ 176 9,650 Humana, Inc.*+ 111 5,315 HCA, Inc.+ 64 3,067 AmerisourceBergen Corp.+ 14 1,082 -------------- TOTAL HEALTH CARE PROVIDERS & SERVICES 46,690 -------------- PHARMACEUTICALS 1.5% Pfizer, Inc.+ 1,029 25,694 Watson Pharmaceuticals, Inc.*+ 15 549 -------------- TOTAL PHARMACEUTICALS 26,243 -------------- BIOTECHNOLOGY 0.9% Genentech, Inc.*+ 39 3,284 Amgen, Inc.*+ 41 3,267 Genzyme Corp.*+ 20 1,433 Celgene Corp.*+ 19 1,032 Chiron Corp.*+ 21 916 Invitrogen Corp.*+ 10 752 Amylin Pharmaceuticals, Inc.*+ 21 731 Applera Corp. - Applied Biosystems Group+ 31 720 Charles River Laboratories International, Inc.*+ 15 654 Affymetrix, Inc.*+ 14 647 Millennium Pharmaceuticals, Inc.*+ 64 597 Protein Design Labs, Inc.*+ 21 588 -------------- TOTAL BIOTECHNOLOGY 14,621 -------------- HEALTH CARE EQUIPMENT & SUPPLIES 0.3% Hospira, Inc.*+ 109 4,466 -------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 4,466 -------------- TOTAL HEALTH CARE 92,020 -------------- MATERIALS 4.4% CONSTRUCTION MATERIALS 2.8% Vulcan Materials Co.+ 186 13,803 Cemex SA de CV -- SP ADR+ 179 9,362 Lafarge North America, Inc.+ 79 5,341 Florida Rock Industries, Inc.+ 75 4,807 Martin Marietta Materials, Inc.+ 58 4,551 Eagle Materials, Inc.+ 26 3,156 Headwaters, Inc.*+ 78 2,917 Texas Industries, Inc.+ 44 2,393 -------------- TOTAL CONSTRUCTION MATERIALS 46,330 -------------- METALS & MINING 1.1% BHP Billiton Ltd. -- SP ADR+ 81 2,769 Rio Tinto PLC -- SP ADR+ 13 2,136 Companhia Vale do Rio Doce -- SP ADR+ 43 1,886 Anglo American PLC -- ADR+ 59 1,782 United States Steel Corp.+ 31 1,313 MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- Alcoa, Inc.+ 49 $ 1,197 Newmont Mining Corp.+ 25 1,179 POSCO -- SP ADR+ 20 1,131 Mittal Steel NV Co. -- Class A+ 38 1,094 Phelps Dodge Corp.+ 8 1,039 Barrick Gold Corp.+ 35 1,017 Alcan, Inc.+ 29 920 Inco Ltd.+ 18 852 AngloGold Ashanti Ltd. -- SP ADR+ 20 849 Allegheny Technologies, Inc.+ 5 155 -------------- TOTAL METALS & MINING 19,319 -------------- PAPER & FOREST PRODUCTS 0.5% Weyerhaeuser Co.+ 68 4,675 Georgia-Pacific Corp.+ 70 2,384 Louisiana-Pacific Corp.+ 30 831 -------------- TOTAL PAPER & FOREST PRODUCTS 7,890 -------------- TOTAL MATERIALS 73,539 -------------- INFORMATION TECHNOLOGY 4.3% SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 2.7% Texas Instruments, Inc.+ 845 28,645 Broadcom Corp. -- Class A*+ 166 7,787 National Semiconductor Corp.+ 183 4,813 Freescale Semiconductor, Inc. -- Class B*+ 93 2,193 LSI Logic Corp.*+ 206 2,029 Nvidia Corp.*+ 14 480 -------------- TOTAL SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT 45,947 -------------- INTERNET SOFTWARE & SERVICES 0.9% Google, Inc. -- Class A*+ 18 5,696 VeriSign, Inc.*+ 64 1,368 Akamai Technologies, Inc.*+ 59 941 Netease.com, Inc. -- SP ADR*+ 10 900 CNET Networks, Inc.*+ 59 801 Sina Corp.*+ 29 798 EarthLink, Inc.*+ 66 706 ValueClick, Inc.*+ 41 701 Websense, Inc.*+ 13 666 WebEx Communications, Inc.*+ 26 637 Digital River, Inc.*+ 18 627 aQuantive, Inc.*+ 30 604 Digitas, Inc.*+ 53 602 Openwave Systems, Inc.*+ 33 593 -------------- TOTAL INTERNET SOFTWARE & SERVICES 15,640 -------------- IT CONSULTING & SERVICES 0.3% Computer Sciences Corp.*+ 41 1,940 Affiliated Computer Services, Inc. -- Class A*+ 28 1,529 Sabre Holdings Corp.+ 29 588 Convergys Corp.*+ 31 445 -------------- TOTAL IT CONSULTING & SERVICES 4,502 -------------- 12 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- HEDGED EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- OFFICE ELECTRONICS 0.2% Xerox Corp.*+ 209 $ 2,853 -------------- TOTAL OFFICE ELECTRONICS 2,853 -------------- COMMUNICATIONS EQUIPMENT 0.1% Corning, Inc.*+ 125 2,416 ADC Telecommunications, Inc.*+ 10 229 -------------- TOTAL COMMUNICATIONS EQUIPMENT 2,645 -------------- SOFTWARE 0.1% Compuware Corp.*+ 193 1,833 -------------- TOTAL SOFTWARE 1,833 -------------- TOTAL INFORMATION TECHNOLOGY 73,420 -------------- CONSUMER STAPLES 3.8% TOBACCO 2.3% Altria Group, Inc.+ 424 31,253 Reynolds American, Inc.+ 90 7,472 -------------- TOTAL TOBACCO 38,725 -------------- FOOD PRODUCTS 1.3% Archer-Daniels-Midland Co.+ 506 12,478 General Mills, Inc.+ 216 10,411 -------------- TOTAL FOOD PRODUCTS 22,889 -------------- FOOD & DRUG RETAILING 0.1% Albertson's, Inc.+ 53 1,359 Supervalu, Inc.+ 31 965 -------------- TOTAL FOOD & DRUG RETAILING 2,324 -------------- BEVERAGES 0.1% Molson Coors Brewing Co. -- Class B+ 15 960 -------------- TOTAL BEVERAGES 960 -------------- TOTAL CONSUMER STAPLES 64,898 -------------- CONSUMER DISCRETIONARY+ 3.8% MULTILINE RETAIL 1.5% Federated Department Stores, Inc.+ 169 11,301 Sears Holdings Corp.*+ 88 10,949 Family Dollar Stores, Inc.+ 71 1,411 Dillard's, Inc. -- Class A+ 38 793 -------------- TOTAL MULTILINE RETAIL 24,454 -------------- AUTOMOBILES 0.7% General Motors Corp.+ 274 8,387 Ford Motor Co.+ 395 3,895 -------------- TOTAL AUTOMOBILES 12,282 -------------- HOUSEHOLD DURABLES 0.7% Pulte Homes, Inc.+ 124 5,322 Centex Corp.+ 65 4,198 Whirlpool Corp.+ 30 2,273 -------------- TOTAL HOUSEHOLD DURABLES 11,793 -------------- AUTO COMPONENTS 0.3% Johnson Controls, Inc.+ 86 5,336 -------------- TOTAL AUTO COMPONENTS 5,336 -------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- SPECIALTY RETAIL 0.3% Office Depot, Inc.*+ 155 $ 4,604 -------------- TOTAL SPECIALTY RETAIL 4,604 -------------- TEXTILES & APPAREL 0.2% VF Corp.+ 50 2,898 Jones Apparel Group, Inc.+ 25 713 -------------- TOTAL TEXTILES & APPAREL 3,611 -------------- HOTELS, RESTAURANTS & LEISURE 0.1% Darden Restaurants, Inc.+ 78 2,369 -------------- TOTAL HOTELS, RESTAURANTS & LEISURE 2,369 -------------- TOTAL CONSUMER DISCRETIONARY+ 64,449 -------------- UTILITIES 1.9% MULTI-UTILITIES 1.2% Duke Energy Corp.+ 151 4,405 PG&E Corp.+ 101 3,964 AES Corp.*+ 180 2,958 Constellation Energy Group, Inc.+ 45 2,772 NiSource, Inc.+ 76 1,843 NRG Energy, Inc.*+ 39 1,661 Dynegy, Inc. -- Class A*+ 238 1,121 Calpine Corp.*+ 353 914 -------------- TOTAL MULTI-UTILITIES 19,638 -------------- ELECTRIC UTILITIES 0.7% TXU Corp.+ 39 4,402 American Electric Power Co., Inc.+ 104 4,129 Allegheny Energy, Inc.*+ 66 2,028 Pinnacle West Capital Corp.+ 28 1,234 Black Hills Corp.+ 24 1,041 -------------- TOTAL ELECTRIC UTILITIES 12,834 -------------- TOTAL UTILITIES 32,472 -------------- TELECOMMUNICATION SERVICES 1.8% DIVERSIFIED TELECOMMUNICATION SERVICES 1.8% SBC Communications, Inc.+ 744 17,834 BellSouth Corp.+ 414 10,888 CenturyTel, Inc.+ 30 1,049 -------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES 29,771 -------------- TOTAL TELECOMMUNICATION SERVICES 29,771 -------------- TOTAL COMMON STOCKS (Cost $732,181) 745,406 -------------- CONTRACTS ----------- OPTIONS PURCHASED 0.0% Put Options on: October 2005 S&P 500 Index Futures Contracts Expiring October 2005 with strike price of 1140 3 413 -------------- TOTAL OPTIONS PURCHASED (Cost $1,212) 413 -------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 13 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- HEDGED EQUITY FUND - -------------------------------------------------------------------------------- MARKET FACE VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------- REPURCHASE AGREEMENTS 53.4% Repurchase Agreement (Note 5) 3.25% due 10/03/05 $ 511,238 $ 511,238 3.24% due 10/03/05 389,370 389,370 -------------- TOTAL REPURCHASE AGREEMENTS (Cost $900,608) 900,608 -------------- SHARES ----------- COMMON STOCKS SOLD SHORT (30.5)% UTILITIES (0.8)% ELECTRIC UTILITIES (0.4)% Progress Energy, Inc. 53 (2,371) FPL Group, Inc. 79 (3,760) -------------- TOTAL ELECTRIC UTILITIES (6,131) -------------- MULTI-UTILITIES (0.4)% TECO Energy, Inc. 81 (1,460) Dominion Resources, Inc./VA 68 (5,857) -------------- TOTAL MULTI-UTILITIES (7,317) -------------- TOTAL UTILITIES (13,448) -------------- MATERIALS (0.9)% CONTAINERS & PACKAGING (0.1)% Pactiv Corp.* 50 (876) Temple-Inland, Inc. 34 (1,389) -------------- TOTAL CONTAINERS & PACKAGING (2,265) -------------- PAPER & FOREST PRODUCTS (0.3)% International Paper Co. 148 (4,410) -------------- TOTAL PAPER & FOREST PRODUCTS (4,410) -------------- METALS & MINING (0.5)% Nucor Corp. 33 (1,947) Freeport-McMoRan Copper & Gold, Inc. -- Class B 154 (7,483) -------------- TOTAL METALS & MINING (9,430) -------------- TOTAL MATERIALS (16,105) -------------- TELECOMMUNICATION SERVICES (1.2)% DIVERSIFIED TELECOMMUNICATION SERVICES (1.2)% Verizon Communications, Inc. 603 (19,712) -------------- TOTAL DIVERSIFIED TELECOMMUNICATION SERVICES (19,712) -------------- TOTAL TELECOMMUNICATION SERVICES (19,712) -------------- ENERGY (1.5)% OIL & GAS (1.5)% ConocoPhillips 149 (10,416) Chevron Corp. 234 (15,147) -------------- TOTAL OIL & GAS (25,563) -------------- TOTAL ENERGY (25,563) -------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- CONSUMER STAPLES (3.7)% FOOD PRODUCTS (0.3)% Hershey Co. 73 $ (4,111) -------------- TOTAL FOOD PRODUCTS (4,111) -------------- BEVERAGES (0.8)% Anheuser-Busch Cos., Inc. 308 (13,256) -------------- TOTAL BEVERAGES (13,256) -------------- PERSONAL PRODUCTS (1.3)% Avon Products, Inc. 194 (5,238) Gillette Co. 288 (16,762) -------------- TOTAL PERSONAL PRODUCTS (22,000) -------------- FOOD & DRUG RETAILING (1.3)% CVS Corp. 323 (9,370) Walgreen Co. 300 (13,035) -------------- TOTAL FOOD & DRUG RETAILING (22,405) -------------- TOTAL CONSUMER STAPLES (61,772) -------------- INFORMATION TECHNOLOGY (3.8)% IT CONSULTING & SERVICES (0.1)% Unisys Corp.* 145 (963) -------------- TOTAL IT CONSULTING & SERVICES (963) -------------- ELECTRONIC EQUIPMENT & INSTRUMENTS (0.1)% Sanmina-SCI Corp.* 264 (1,133) -------------- TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS (1,133) -------------- COMMUNICATIONS EQUIPMENT (0.1)% Comverse Technology, Inc.* 84 (2,207) -------------- TOTAL COMMUNICATIONS EQUIPMENT (2,207) -------------- INTERNET SOFTWARE & SERVICES (1.0)% Yahoo!, Inc.* 491 (16,615) -------------- TOTAL INTERNET SOFTWARE & SERVICES (16,615) -------------- COMPUTERS & PERIPHERALS (1.2)% Lexmark International, Inc.* 51 (3,113) Apple Computer, Inc.* 329 (17,638) -------------- TOTAL COMPUTERS & PERIPHERALS (20,751) -------------- SOFTWARE (1.3)% Adobe Systems, Inc. 200 (5,970) Symantec Corp.* 303 (6,866) Autodesk, Inc. 204 (9,474) -------------- TOTAL SOFTWARE (22,310) -------------- TOTAL INFORMATION TECHNOLOGY (63,979) -------------- 14 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) September 30, 2005 - -------------------------------------------------------------------------------- HEDGED EQUITY FUND - -------------------------------------------------------------------------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- INDUSTRIALS (4.2)% COMMERCIAL SERVICES & SUPPLIES 0.0% Allied Waste Industries, Inc.* 79 $ (668) -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES (668) -------------- MACHINERY (0.6)% Caterpillar, Inc. 161 (9,459) -------------- TOTAL MACHINERY (9,459) -------------- INDUSTRIAL CONGLOMERATES (0.8)% 3M Co. 184 (13,498) -------------- TOTAL INDUSTRIAL CONGLOMERATES (13,498) -------------- AIR FREIGHT & COURIERS (1.2)% United Parcel Service, Inc. -- Class B 295 (20,393) -------------- TOTAL AIR FREIGHT & COURIERS (20,393) -------------- AEROSPACE & DEFENSE (1.6)% United Technologies Corp. 246 (12,753) Boeing Co. 209 (14,201) -------------- TOTAL AEROSPACE & DEFENSE (26,954) -------------- TOTAL INDUSTRIALS (70,972) -------------- CONSUMER DISCRETIONARY (4.3)% HOUSEHOLD DURABLES 0.0% Maytag Corp. 20 (365) -------------- TOTAL HOUSEHOLD DURABLES (365) -------------- AUTO COMPONENTS (0.1)% Dana Corp. 51 (480) Delphi Corp. 198 (546) -------------- TOTAL AUTO COMPONENTS (1,026) -------------- MULTILINE RETAIL (0.2)% Nordstrom, Inc. 85 (2,917) -------------- TOTAL MULTILINE RETAIL (2,917) -------------- TEXTILES & APPAREL (0.2)% Coach, Inc.* 129 (4,045) -------------- TOTAL TEXTILES & APPAREL (4,045) -------------- COMMERCIAL SERVICES & SUPPLIES (0.2)% Apollo Group, Inc. -- Class A* 64 (4,249) -------------- TOTAL COMMERCIAL SERVICES & SUPPLIES (4,249) -------------- HOTELS, RESTAURANTS & LEISURE (0.4)% Hilton Hotels Corp. 133 (2,969) International Game Technology, Inc. 115 (3,105) -------------- TOTAL HOTELS, RESTAURANTS & LEISURE (6,074) -------------- MEDIA (1.1)% New York Times Co. -- Class A 35 (1,041) Dow Jones & Co., Inc. 28 (1,070) McGraw-Hill Cos., Inc. 93 (4,468) News Corp. -- Class A 809 (12,612) -------------- TOTAL MEDIA (19,191) -------------- INTERNET & CATALOG RETAIL (2.1)% eBay, Inc.* 850 (35,020) -------------- TOTAL INTERNET & CATALOG RETAIL (35,020) -------------- TOTAL CONSUMER DISCRETIONARY (72,887) -------------- MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------- HEALTH CARE (4.4)% HEALTH CARE PROVIDERS & SERVICES (0.5)% Tenet Healthcare Corp.* 239 $ (2,684) Express Scripts, Inc.* 44 (2,737) Quest Diagnostics, Inc. 64 (3,234) -------------- TOTAL HEALTH CARE PROVIDERS & SERVICES (8,655) -------------- HEALTH CARE EQUIPMENT & SUPPLIES (1.1)% Biomet, Inc. 79 (2,742) St. Jude Medical, Inc.* 113 (5,289) Stryker Corp. 214 (10,578) -------------- TOTAL HEALTH CARE EQUIPMENT & SUPPLIES (18,609) -------------- BIOTECHNOLOGY (1.3)% Medimmune, Inc.* 86 (2,894) Biogen Idec, Inc.* 76 (3,000) Gilead Sciences, Inc.* 305 (14,872) -------------- TOTAL BIOTECHNOLOGY (20,766) -------------- PHARMACEUTICALS (1.5)% Merck & Co., Inc. 373 (10,149) Schering-Plough Corp. 734 (15,451) -------------- TOTAL PHARMACEUTICALS (25,600) -------------- TOTAL HEALTH CARE (73,630) -------------- FINANCIALS (5.7)% CAPITAL MARKETS (0.6)% T. Rowe Price Group, Inc. 5 (326) Charles Schwab Corp. 51 (736) Franklin Resources, Inc. 10 (840) Northern Trust Corp. 143 (7,229) -------------- TOTAL CAPITAL MARKETS (9,131) -------------- REAL ESTATE (0.6)% Simon Property Group, Inc. 144 (10,673) -------------- TOTAL REAL ESTATE (10,673) -------------- INSURANCE (0.7)% Ambac Financial Group, Inc. 6 (432) Aon Corp. 143 (4,587) Marsh & McLennan Cos., Inc. 245 (7,446) -------------- TOTAL INSURANCE (12,465) -------------- BANKS (0.8)% First Horizon National Corp. 60 (2,181) Synovus Financial Corp. 204 (5,655) North Fork Bancorporation, Inc. 239 (6,095) -------------- TOTAL BANKS (13,931) -------------- DIVERSIFIED FINANCIALS (1.0)% Moody's Corp. 326 (16,652) -------------- TOTAL DIVERSIFIED FINANCIALS (16,652) -------------- THRIFTS & MORTGAGE FINANCE (2.0)% MGIC Investment Corp. 43 (2,761) Golden West Financial Corp. 145 (8,612) Fannie Mae 486 (21,782) -------------- TOTAL THRIFTS & MORTGAGE FINANCE (33,155) -------------- See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 15 SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED) September 30, 2005 - -------------------------------------------------------------------------------- HEDGED EQUITY FUND MARKET VALUE (NOTE 1) - ------------------------------------------------------------------------------- TOTAL FINANCIALS $ (96,007) -------------- TOTAL COMMON STOCKS SOLD SHORT (Proceeds $506,069) (514,075) -------------- CONTRACTS ----------- OPTIONS WRITTEN (0.2)% Call Options Written on (Note 7): October 2005 S&P 500 Index Futures Contracts Expiring October 2005 with strike price of 1235 1 (2,950) -------------- TOTAL OPTIONS WRITTEN (Premiums Received $4,245) (2,950) -------------- TOTAL INVESTMENTS 66.9% (Cost $1,123,687) $ 1,129,402 ============== OTHER ASSETS IN EXCESS OF LIABILITIES - 33.1% $ 557,962 ============== NET ASSETS - 100.0% $ 1,687,364 ================================================================================ UNREALIZED GAIN CONTRACTS (NOTE 1) - ------------------------------------------------------------------------------- FUTURES CONTRACTS PURCHASED December 2005 S&P 400 Index Mini Futures Contracts (Aggregate Market Value of Contracts $216,060) 3 $ 1,131 December 2005 Russell 2000 Index Mini Futures Contracts (Aggregate Market Value of Contracts $267,960) 4 843 December 2005 S&P 500 Index Mini Futures Contracts (Aggregate Market Value of Contracts $246,800) 4 495 -------------- (TOTAL AGGREGATE MARKET VALUE OF CONTRACTS $730,820) $ 2,469 ============== * NON-INCOME PRODUCING SECURITY. + ALL OR A PORTION OF THIS SECURITY IS HELD AS SHORT SECURITY COLLATERAL AT SEPTEMBER 30, 2005. ADR--AMERICAN DEPOSITORY RECEIPT. 16 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN HEDGED STRATEGIES EQUITY FUND FUND - --------------------------------------------------------------------------------------------------------- ASSETS Securities at Value* (Notes 1, 2, and 5) $ 2,870,214 $ 1,646,427 Segregated Cash with Broker 30,368 26,889 Cash in Custodian Bank -- 10 Receivable for Futures Contracts Settlement (Note 1) 380 2,920 Receivable for Securities Sold (Note 1) 153,523 506,069 Receivable for Shares Purchased 28,105 22,046 Investment Income Receivable (Note 1) 918 812 - --------------------------------------------------------------------------------------------------------- TOTAL ASSETS 3,083,508 2,205,173 ========================================================================================================= LIABILITIES Short Sales at Market Value** 155,209 514,075 Written Options at Market Value*** (Note 7) -- 2,950 Investment Advisory Fees Payable (Note 3) 1,040 623 Distribution and Service Fees Payable (Note 3) 193 116 Cash Payable to Custodian Bank 5,739 -- Short Sales Dividends Payable 17 45 - --------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 162,198 517,809 ========================================================================================================= NET ASSETS $ 2,921,310 $ 1,687,364 ========================================================================================================= NET ASSETS CONSIST OF Paid-In Capital $ 2,924,475 $ 1,678,497 Undistributed Net Investment Income 1,590 683 Accumulated Net Realized Gain on Investments, Options, and Futures Contracts 90 -- Net Unrealized Appreciation (Depreciation) on Investments, Options, and Futures Contracts (4,845) 8,184 ========================================================================================================= NET ASSETS $ 2,921,310 $ 1,687,364 ========================================================================================================= A-Class $ 188,350 $ 36,748 C-Class 73,789 44,627 H-Class 2,659,171 1,605,989 SHARES OUTSTANDING A-Class 7,554 1,463 C-Class 2,960 1,778 H-Class 106,647 63,952 NET ASSET VALUE A-Class $ 24.93 $ 25.11 A-Class Maximum Offering Price+ 26.17 26.36 C-Class 24.93 25.11 H-Class 24.93 25.11 * THE COST OF SECURITIES AT VALUE IS $2,871,083 AND $1,634,001, RESPECTIVELY. ** THE PROCEEDS OF SHORT SALES AT MARKET VALUE IS $153,523 AND $506,069, RESPECTIVELY. *** THE PREMIUMS RECEIVED FOR WRITTEN OPTIONS AT MARKET VALUE ARE $0 AND $4,245, RESPECTIVELY. + NET ASSET VALUE ADJUSTED FOR SALES CHARGE OF 4.75% OF OFFERING PRICE. See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 17 STATEMENTS OF OPERATIONS (UNAUDITED) Period Ended September 30, 2005 - -------------------------------------------------------------------------------- ABSOLUTE RETURN HEDGED STRATEGIES EQUITY FUND* FUND* - --------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest (Note 1) $ 2,750 $ 1,373 Dividends (Note 1) 133 123 - --------------------------------------------------------------------------------------------------------- Total Income 2,883 1,496 - --------------------------------------------------------------------------------------------------------- EXPENSES Investment Advisory Fees (Note 3) 1,040 623 Distribution & Service Fees (Note 3): A-Class 8 2 C-Class 14 13 H-Class 214 130 Short Sales Dividend Expense (Note 1) 17 45 - --------------------------------------------------------------------------------------------------------- Total Expenses 1,293 813 - --------------------------------------------------------------------------------------------------------- Net Investment Income 1,590 683 ========================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) Net Realized Gain on: Investment Securities 28 -- Futures Contracts 62 -- - --------------------------------------------------------------------------------------------------------- Total Net Realized Gain 90 -- - --------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) on: Investment Securities (869) 12,426 Futures Contracts (2,290) 2,469 Securities Sold Short (1,686) (6,711) - --------------------------------------------------------------------------------------------------------- Net Change in Unrealized Appreciation (Depreciation) (4,845) 8,184 - --------------------------------------------------------------------------------------------------------- Net Gain (Loss) on Investments (4,755) 8,184 - --------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (3,165) $ 8,867 ========================================================================================================= * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 19, 2005. 18 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT See Notes to Financial Statements. STATEMENTS OF CHANGES IN NET ASSETS - -------------------------------------------------------------------------------- ABSOLUTE RETURN HEDGED STRATEGIES EQUITY FUND FUND - --------------------------------------------------------------------------------------------------------- PERIOD PERIOD ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, 2005*+ 2005*+ - --------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net Investment Income $ 1,590 $ 683 Net Realized Gain on Investments 90 -- Net Change in Unrealized Appreciation (Depreciation) on Investments (4,845) 8,184 - --------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets from Operations (3,165) 8,867 - --------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1) -- -- ========================================================================================================= SHARE TRANSACTIONS PROCEEDS FROM SHARES PURCHASED A-Class 187,963 36,431 C-Class 73,676 44,149 H-Class 2,667,482 1,603,031 VALUE OF SHARES PURCHASED THROUGH DIVIDEND REINVESTMENT A-Class -- -- C-Class -- -- H-Class -- -- COST OF SHARES REDEEMED A-Class -- -- C-Class -- -- H-Class (4,646) (5,114) ========================================================================================================= NET INCREASE IN NET ASSETS FROM SHARE TRANSACTIONS 2,924,475 1,678,497 - --------------------------------------------------------------------------------------------------------- Net Increase in Net Assets 2,921,310 1,687,364 NET ASSETS--BEGINNING OF PERIOD -- -- - --------------------------------------------------------------------------------------------------------- NET ASSETS--END OF PERIOD $ 2,921,310 $ 1,687,364 ========================================================================================================= UNDISTRIBUTED NET INVESTMENT INCOME $ 1,590 $ 683 ========================================================================================================= * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 19, 2005. + UNAUDITED See Notes to Financial Statements. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 19 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. NET REALIZED NET INCREASE NET ASSET AND (DECREASE) DISTRIBUTIONS DISTRIBUTIONS VALUE, NET UNREALIZED IN NET ASSET FROM NET FROM NET BEGINNING INVESTMENT GAINS (LOSSES) VALUE RESULTING INVESTMENT REALIZED OF PERIOD INCOME+ ON SECURITIES FROM OPERATIONS INCOME CAPITAL GAINS - ---------------------------------------------------------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND A-CLASS SEPTEMBER 30, 2005 *@ $ 25.00 $ .02 $ (.09) $ (.07) $ -- $ -- ABSOLUTE RETURN STRATEGIES FUND C-CLASS SEPTEMBER 30, 2005 *@ 25.00 .01 (.08) (.07) -- -- ABSOLUTE RETURN STRATEGIES FUND H-CLASS SEPTEMBER 30, 2005 *@ 25.00 .02 (.09) (.07) -- -- HEDGED EQUITY FUND A-CLASS SEPTEMBER 30, 2005 *@ 25.00 .01 .10 .11 -- -- HEDGED EQUITY FUND C-CLASS SEPTEMBER 30, 2005 *@ 25.00 .01 .10 .11 -- -- HEDGED EQUITY FUND H-CLASS SEPTEMBER 30, 2005 *@ 25.00 .01 .10 .11 -- -- NET INCREASE NET ASSET (DECREASE) IN VALUE, TOTAL TOTAL NET ASSET END OF INVESTMENT DISTRIBUTIONS VALUE PERIOD RETURN - ------------------------------------------------------------------------------------------ ABSOLUTE RETURN STRATEGIES FUND A-CLASS SEPTEMBER 30, 2005 *@ $ -- $ (.07) $ 24.93 (0.28)% ABSOLUTE RETURN STRATEGIES FUND C-CLASS SEPTEMBER 30, 2005 *@ -- (.07) 24.93 (0.28)% ABSOLUTE RETURN STRATEGIES FUND H-CLASS SEPTEMBER 30, 2005 *@ -- (.07) 24.93 (0.28)% HEDGED EQUITY FUND A-CLASS SEPTEMBER 30, 2005 *@ -- .11 25.11 0.44% HEDGED EQUITY FUND C-CLASS SEPTEMBER 30, 2005 *@ -- .11 25.11 0.44% HEDGED EQUITY FUND H-CLASS SEPTEMBER 30, 2005 *@ -- .11 25.11 0.44% RATIOS TO AVERAGE NET ASSETS: ------------------------------------------ NET NET ASSETS, INVESTMENT PORTFOLIO END OF GROSS NET OPERATING INCOME TURNOVER PERIOD (000'S EXPENSES EXPENSES EXPENSES++ (LOSS) RATE*** OMITTED) - --------------------------------------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND A-CLASS SEPTEMBER 30, 2005 *@ 1.41%** 1.41%** 1.39%** 1.93%** 3% $ 188 ABSOLUTE RETURN STRATEGIES FUND C-CLASS SEPTEMBER 30, 2005 *@ 2.17%** 2.17%** 2.15%** 1.23%** 3% 74 ABSOLUTE RETURN STRATEGIES FUND H-CLASS SEPTEMBER 30, 2005 *@ 1.42%** 1.42%** 1.40%** 1.76%** 3% 2,659 HEDGED EQUITY FUND A-CLASS SEPTEMBER 30, 2005 *@ 1.44%** 1.44%** 1.36%** 1.47%** -- 37 HEDGED EQUITY FUND C-CLASS SEPTEMBER 30, 2005 *@ 2.19%** 2.19%** 2.11%** 0.75%** -- 45 HEDGED EQUITY FUND H-CLASS SEPTEMBER 30, 2005 *@ 1.48%** 1.48%** 1.40%** 1.27%** -- 1,606 * SINCE THE COMMENCEMENT OF OPERATIONS: SEPTEMBER 19, 2005. ** ANNUALIZED *** PORTFOLIO TURNOVER RATE IS CALCULATED WITHOUT REGARD TO SHORT-TERM SECURITIES HAVING A MATURITY OF LESS THAN ONE YEAR. + CALCULATED USING THE AVERAGE DAILY SHARES OUTSTANDING FOR THE YEAR. ++ OPERATING EXPENSES EXCLUDES SHORT DIVIDENDS EXPENSE. @ UNAUDITED 20 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Rydex Series Funds (the "Trust") is registered with the SEC under the Investment Company Act of 1940 (the "1940 Act") as a non-diversified, open-ended investment company, and is authorized to issue an unlimited number of no par value shares. The Trust offers five separate classes of shares, Investor Class Shares, Advisor Class Shares, A-Class Shares, C-Class Shares, and H-Class Shares. C-Class Shares have a 1% Contingent Deferred Sales Charge ("CDSC") if Shares are redeemed within 12 months of purchase. Sales of shares of each Class are made without a sales charge at the net asset value per share, with the exception of A-Class Shares. A-Class Shares are sold at net asset value, plus the applicable front-end sales charge. The sales charge varies depending on the amount of your purchase, but will not exceed 4.75%. A-Class Share purchases of $1 million or more have a 1% CDSC if Shares are redeemed within 18 months of purchase. The current sales charge rates are as follows: SALES CHARGE SALES CHARGE AS % OF AS % OF NET AMOUNT OF INVESTMENT OFFERING PRICE AMOUNT INVESTED - ------------------------------------------------------------------------------ Less than $100,000 4.75% 4.99% $100,000 but less than $250,000 3.75% 3.90% $250,000 but less than $500,000 2.75% 2.83% $500,000 but less than $1,000,000 1.60% 1.63% $1,000,000 or greater 0.00% 0.00% At September 30, 2005, the Trust consisted of forty-eight separate series: twenty-four Benchmark Funds, one Money Market Fund, one Absolute Return Strategies Fund, one Hedged Equity Fund, nineteen Sector Funds, and two Strategic Funds. This report covers the Absolute Return Strategies Fund and the Hedged Equity Fund (the "Funds"), while the Sector Funds, the Strategic Funds, the Benchmark Funds and the Money Market Fund are contained in separate reports. At September 30, 2005, only A-Class, C-Class, and H-Class Shares had been issued by the Funds. All share classes are subject to a 1% redemption fee when shares are redeemed after being held for less than 30 days. The following significant accounting policies are in conformity with accounting principles generally accepted in the United States of America and are consistently followed by the Trust. A. Equity securities listed on an exchange (New York Stock Exchange ("NYSE") or American Stock Exchange) are valued at the last quoted sales price as of close of business on the NYSE, usually 4:00 p.m., Eastern Time, on the valuation date. Equity securities listed on the Nasdaq market system are valued at the Nasdaq Official Closing Price, usually as of 4:00 p.m., Eastern Time, on the valuation date. Listed options held by the Trust are valued at the Official Settlement Price listed by the exchange, usually as of 4:00 p.m., Eastern Time. In the event that a settlement price is not available, fair valuation is enacted. Over-the-counter options held by the Trust are valued using the average bid price obtained from one or more security dealers. The value of futures contracts purchased and sold by the Trust are 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 last quoted sales price, usually as of 4:00 p.m., Eastern Time, on the valuation date. In the event that the exchange for a specific futures contract closes earlier than 4:00 p.m., Eastern Time, 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., Eastern Time, to determine if fair valuation would provide a more accurate valuation. Short-term securities, if any, are valued at amortized cost, which approximates market value. The value of domestic equity index swap agreements entered into by the Funds is accounted for using the unrealized gain or loss on the agreements that is determined by marking the agreements to the last quoted value of the index that the swap pertains to at the close of the NYSE, usually 4:00 p.m., Eastern Time. The swap's market value is 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 valued at fair value as determined in good faith by or under direction of the Board of Trustees or by Rydex Global Advisors (the "Advisor") using methods established or ratified by the Board of Trustees. These methods include, but are not limited to: (i) general information as to how these securities and assets trade; (ii) in connection with futures contracts and options thereupon, and other derivative investments, information as to how (a) these contracts and other derivative investments trade in the futures or other derivative markets, respectively, and (b) the securities underlying these contracts and other derivative investments trade in the cash market; and (iii) other information and considerations, including current values in related-markets. B. Securities 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. Dividend income is recorded on the ex-dividend date, net of applicable taxes withheld by foreign countries. Interest income, including amortization THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 21 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- of premiums and accretion of discount, is accrued on a daily basis. C. Distributions of net investment income and net realized capital gains are recorded on the ex-dividend date and are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for items such as deferral of wash sales and post-October losses and regulated futures contracts and options. Net investment income and loss, net realized gains and losses, and net assets are not affected by these differences. D. When a Fund engages in a short sale, 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 securities as collateral for short sales. The Fund is exposed to market risk based on the amount, if any, that the market value of the security exceeds the market value of the securities in the segregated account. Fees paid to brokers to borrow securities in connection with short sales are considered part of the cost of short sale transactions. In addition, the Fund must pay out the dividend rate of the equity or coupon rate of the treasury obligation to the purchaser and records this as an expense. Short Dividends or Interest Expense is not a fee charged to the shareholder by the Advisor or other service providers, rather it is more similar to the transaction costs or capital expenditures associated with the day-to-day management of any mutual fund in pursuit of its investment objective. E. The Funds may also purchase American Depository Receipts ("ADR"), U.S. Government securities, enter into repurchase agreements, and engage in futures, options and equity swap transactions. F. Upon the purchase of an option by a Fund, the premium paid is recorded as an investment, the value of which is marked-to-market daily. When a purchased option expires, the Fund will realize a loss in the amount of the cost of the option. When a Fund enters into a closing sale transaction, the Fund will realize a gain or loss depending on whether the proceeds from the closing sale transaction are greater or less than the cost of the option. When a Fund exercises a put option, it will realize a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. When a Fund exercises a call option, the cost of the security that the Fund purchases upon exercise will be increased by the premium originally paid. When a Fund writes (sells) an option, an amount equal to the premium received is entered in the Trust's accounting records as an asset and equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. When a written option expires, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was sold). G. The Trust may purchase or sell stock and bond index futures contracts and options on such futures contracts. Futures contracts are contracts for delayed delivery of securities at a specified future delivery date and at a specific price. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. 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. H. The Fund may leave Cash in Custodian Bank overnight in its cash account with the custodian, U.S. Bank. Periodically, a Fund may have Cash Payable to Custodian Bank as an overdraft balance. A fee is incurred on this overdraft, calculated by multiplying the overdraft by a rate based on the federal funds rate. Segregated Cash with the Broker is held as collateral for investments in derivative instruments such as futures contracts and equity index swap agreements. I. Certain U.S. Government and Agency Obligations are traded on a discount basis; the interest rates shown on the Schedules of Investments reflect the discount rates paid at the time of purchase by the Fund. Other securities bear interest at the rates shown, payable at fixed dates through maturity. J. Interest and dividend income, most expenses, all realized gains and losses, and all unrealized gains and losses are allocated to the Classes based upon the value of the outstanding shares in each Class. Certain costs, such as distribution fees related to A-Class Shares and H-Class Shares and service and distribution fees related to C-Class Shares, are charged directly to specific Classes. In addition, certain expenses have been allocated to the individual Funds in the Trust on a pro rata basis upon the respective aggregate net asset value of each Fund included in the Trust. 22 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- K. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 2. FINANCIAL INSTRUMENTS As part of its investment strategy, the Trust may utilize a variety of derivative instruments, including options, futures, options on futures, and swap agreements. These investments involve, to varying degrees, elements of market risk and risks in excess of the amounts recognized in the Statements of Assets and Liabilities. In 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 its affiliates that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. The risk associated with purchasing options is limited to the premium originally paid. Options written by a Fund involve, to varying degrees, risk of loss in excess of the option value reflected in the Statements of Assets and Liabilities. The risk in writing a covered call option is that a Fund may forego the opportunity for profit if the market price of the underlying security increases and the option is exercised. The risk in writing a covered put option is that a Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market or, for over-the-counter options, because of the counterparty's inability to perform. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. There are several risks in connection with the use of futures contracts. Futures contracts involve, to varying degrees, risk of loss in excess of amounts reflected in the financial statements. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. In addition, there is the risk that a Fund may not be able to enter into a closing transaction because of an illiquid secondary market. The use of equity swaps involves risks that are different from those associated with ordinary portfolio securities transactions. Swap agreements may be considered to be illiquid. Although the Trust will not enter into any swap agreement unless the Advisor believes that the other party to the transaction is creditworthy, a Fund does bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of the agreement counterparty. The Trust has established strict counterparty credit guidelines and enters into transactions only with financial institutions of investment grade or better. Short sales are transactions in which the Fund sells a security it does not own. If the security the Fund sold short goes down 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 goes up 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. In conjunction with the use of options, futures, options on futures, swap agreements, as well as short sales of securities, 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 segregated at the custodian bank, discount notes, or the repurchase agreements allocated to each Fund. The risks inherent in the use of options, futures contracts, options on futures contracts, swap agreements as well as short sales of securities include i) adverse changes in the value of such instruments; ii) imperfect correlation between the price of the instruments and movements in the price of the underlying securities, indices, or futures contracts; iii) the possible absence of a liquid secondary market for any particular instrument at any time; and iv) the potential of counterparty default. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of an investment advisory contract, the Trust pays the Advisor, an affiliated entity, investment advisory fees calculated at an annualized rate of 1.15% of the average daily net assets of the Funds. The Advisor has contractually agreed to pay all operating expenses of the Fund, excluding interest expense and taxes (expected to be de minimis), brokerage commissions and other expenses connected with the execution of portfolio transactions, short dividend expenses, and extraordinary expenses. Certain officers and trustees of the Trust are also officers of the Advisor. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 23 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- The Trust has adopted a Distribution Plan applicable to A-Class Shares and H-Class Shares for which Rydex Distributors, Inc. (the "Distributor"), an affiliated entity, and other firms that provide distribution and/or shareholder services ("Service Providers") may receive compensation. If a Service Provider provides distribution services, the Trust will pay distribution fees to the Distributor at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 of the 1940 Act. The Distributor, in turn, will pay the Service Provider out of its fees. The Distributor may, at its discretion, retain a portion of such payments to compensate itself for distribution services. The Trust has adopted a separate Distribution and Shareholder Services Plan applicable to its C-Class Shares that allows the Funds to pay annual distribution and service fees of 1.00% of the Funds' C-Class Shares average daily net assets. The annual 0.25% service fee compensates the shareholder's financial advisor for providing on-going services to the shareholder. The annual 0.75% distribution fee reimburses the Distributor for paying the shareholder's financial advisor an on-going sales commission. The Distributor advances the first year's service and distribution fees to the Financial Advisor. The Distributor retains the service and distribution fees on accounts with no authorized dealer of record. Certain officers and trustees of the Trust are also officers of the Distributor. 4. FEDERAL INCOME TAX INFORMATION The Funds intend to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute all net investment income and capital gains to shareholders. Therefore, no Federal income tax provision is required. Income and capital gain distributions are determined in accordance with Federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for derivatives, foreign currency transactions, losses deferred due to wash sales, losses deferred due to post-October losses, and excise tax regulations. Permanent book and tax basis differences, if any, relating to shareholder distributions will result in reclassifications to paid-in capital. This includes net operating losses not utilized during the current year, capital loss carryforward expired, and the utilization of earnings and profits distributed to the shareholders on redemption of shares as part of the dividends paid deduction for income tax purposes. These reclassifications have no effect on net assets or net asset values per share. Any taxable gain remaining at fiscal year end is distributed in the following year. At September 30, 2005, the cost of securities for Federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value were as follows: TAX TAX NET TAX UNREALIZED UNREALIZED UNREALIZED FUND COST GAIN LOSS GAIN (LOSS) - --------------------------------------------------------------------------------------- Absolute Return Strategies Fund $ 2,717,560 $ 4,383 $ (9,228) $ (4,845) Hedged Equity Fund 1,123,687 28,032 (19,848) 8,184 24 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 5. REPURCHASE AGREEMENTS The Trust transfers uninvested cash balances into a single joint account, along with uninvested cash balances of the OTC Fund, the Medius Fund, the Inverse Mid-Cap Fund, the Mekros Fund, the Inverse Small-Cap Fund, the U.S. Government Bond Fund, the Large-Cap Europe Fund, the Large-Cap Japan Fund, the Small-Cap Value Fund, the Mid-Cap Value Fund, the Large-Cap Value Fund, the Small-Cap Growth Fund, the Mid-Cap Growth Fund, the Large-Cap Growth Fund, the Strengthening Dollar Fund, the Weakening Dollar Fund, the U.S. Government Money Market Fund, the Nova Master Portfolio, the Ursa Master Portfolio, the Arktos Master Portfolio, the Juno Master Portfolio, the Core Equity Fund, the Sector Rotation Fund, and the Commodities Fund (all included in the Trust, but contained in separate reports). The daily aggregate balance is invested in one or more repurchase agreements collateralized by obligations of the U.S. Treasury. The collateral is in the possession of the Trust's custodian and is evaluated daily to ensure that its market value exceeds by, at a minimum, 102% of the delivery value of the repurchase agreement at maturity. The repurchase agreements executed by the joint account and outstanding as of September 30, 2005, were as follows: COUNTERPARTY TERMS OF AGREEMENT FACE VALUE MARKET VALUE MATURITY VALUE - ---------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc. 3.25% due 10/03/05 $ 525,000,000 $ 525,000,000 $ 525,142,188 Citigroup, Inc. 3.24% due 10/03/05 375,000,000 375,000,000 375,101,250 Lehman Brothers, Inc. 3.25% due 10/03/05 295,619,135 295,619,135 295,699,198 Morgan Stanley 3.24% due 10/03/05 250,000,000 250,000,000 250,067,500 - ---------------------------------------------------------------------------------------------------------- $1,445,619,135 $1,446,010,136 - ---------------------------------------------------------------------------------------------------------- As of September 30, 2005, the collateral for the repurchase agreements in the joint account was as follows: SECURITY TYPE RANGE OF RATES PAR VALUE MARKET VALUE - -------------------------------------------------------------------------------------- U.S. Treasury Bonds 6.125% - 8.000% $ 203,611,000 $ 257,500,263 U.S. Treasury Notes 3.000% - 3.875% 1,033,367,912 1,027,768,192 U.S. Currency 0.000% 188,000,000 188,000,000 - -------------------------------------------------------------------------------------- $1,473,268,455 - -------------------------------------------------------------------------------------- In the event of counterparty default, the Trust has the right to collect the collateral to offset losses incurred. There is potential loss to the Trust in the event the Trust is delayed or prevented from exercising its 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 Trust seeks to assert its rights. The Trust's investment advisor, acting under the supervision of the Board of Trustees, reviews the value of the collateral and the credit worthiness of those banks and dealers with which the Trust enters into repurchase agreements to evaluate potential risks. 6. SECURITIES TRANSACTIONS During the period ended September 30, 2005, cost of purchases and proceeds from sales of investment securities, excluding short-term and temporary cash investments, were: ABSOLUTE HEDGED RETURN STRATEGIES EQUITY FUND FUND - -------------------------------------------------------------------------------- Purchases $ 358,593 $ 732,181 Sales $ 13,325 $ -- 7. CALL OPTIONS WRITTEN As of September 30, 2005, S&P 500 Index Mini Futures Contracts were held in the Fund as cover for call options written by the Fund. Transactions in options written during the period ended September 30, 2005, were as follows: NUMBER OF PREMIUMS HEDGED EQUITY FUND CONTRACTS RECEIVED - -------------------------------------------------------------------------------- Options outstanding at September 19, 2005 -- $ -- Options written 1 4,245 - -------------------------------------------------------------------------------- Options outstanding at September 30, 2005 1 $ 4,245 THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 25 NOTES TO FINANCIAL STATEMENTS (CONCLUDED) - -------------------------------------------------------------------------------- 8. SHARE TRANSACTIONS The Trust is authorized to distribute an unlimited number of no par value shares. Transactions in shares for the period presented were: PURCHASED THROUGH NET SHARES SHARES PURCHASED DIVIDEND REINVESTMENT SHARES REDEEMED PURCHASED - --------------------------------------------------------------------------------------------------------------------------- PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 2005+ 2005+ 2005+ 2005+ - --------------------------------------------------------------------------------------------------------------------------- ABSOLUTE RETURN STRATEGIES FUND* A-Class 7,554 -- -- 7,554 C-Class 2,960 -- -- 2,960 H-Class 106,834 -- (187) 106,647 HEDGED EQUITY FUND* A-Class 1,463 -- -- 1,463 C-Class 1,778 -- -- 1,778 H-Class 64,158 -- (206) 63,952 * SINCE THE COMMENCEMENT OF OPERATIONS. SEPTEMBER 19, 2005. + UNAUDITED 26 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION - -------------------------------------------------------------------------------- PROXY VOTING INFORMATION A description of the policies and procedures that the Trust uses to determine how to vote proxies relating to securities held in the Funds' portfolios is available, without charge and upon request, by calling 1-800-820-0888. This information is also available from the EDGAR database on the SEC's site at http://www.sec.gov. QUARTERLY PORTFOLIO SCHEDULES INFORMATION The Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q; which are available on the SEC's website at http://www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Copies of the portfolio holdings are also available to shareholders, without charge and upon request, by calling 1-800-820-0888. RYDEX INVESTMENTS BOARD REVIEW AND APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT The 1940 Act requires that the initial approval of, as well as the continuation of, a fund's investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or "interested persons" of any party (the "Independent Trustees"), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund's trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the SEC takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement. Consistent with these responsibilities, the Rydex Series Funds Board of Trustees (the "Board") calls and holds one meeting each year that is dedicated to considering whether to renew the investment advisory agreement (the "Advisory Agreement") between the Trust and PADCO Advisors, Inc., which does business under the name Rydex Investments ("Rydex Investments") with respect to existing funds in the Trust, including the funds discussed in this Semi-Annual Report (each a "Fund" and collectively, the "Funds"), and to reviewing certain other agreements pursuant to which Rydex Investments provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by Rydex Investments, including information about Rydex Investments' affiliates, personnel and operations. The Board also receives data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and performance. The Board also receives a memorandum from Fund counsel regarding the responsibilities of the Board for the approval of investment advisory agreements. In addition, the Independent Trustees receive advice from independent counsel to the Independent Trustees, meet in executive session outside the presence of fund management, if necessary, and participate in question and answer sessions with representatives of Rydex Investments. At a meeting held on August 28 and 29, 2005, the Board approved the selection of Rydex Investments and the continuance of the Advisory Agreement for an additional one-year period, based on its review of qualitative and quantitative information provided by Rydex Investments. The Board's approval of the Advisory Agreement was based on consideration and evaluation of a variety of specific factors discussed at that meeting and at prior meetings, including: NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED BY RYDEX INVESTMENTS The Board reviewed the scope of services to be provided by Rydex Investments under the Advisory Agreement and noted that there would be no significant differences between the scope of services required to be provided by Rydex Investments for the past year and the scope of services required to be provided by Rydex Investments for the upcoming year. In reviewing the scope of services provided to the Funds by Rydex Investments, the Board reviewed and discussed Rydex Investments' investment experience, noting that Rydex Investments and its affiliates have committed significant resources over time to the support of the Funds. The Board also considered Rydex Investments' compliance program and its compliance record with respect to the Funds. In that regard, the Board noted that Rydex Investments provides information regarding the portfolio management and compliance to the Board on a periodic basis in connection with regularly scheduled meetings of the Board. In addition to the above considerations, the Board reviewed and considered Rydex Investments' investment processes and strategies, and matters related to Rydex Investments' portfolio transaction policies and procedures. In particular, the Board noted the substantial volume of portfolio trades and shareholder transaction activity, THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 27 OTHER INFORMATION (CONTINUED) - -------------------------------------------------------------------------------- in general, processed by Rydex Investments due to the unlimited exchange policy of the majority of the Funds. The Board further noted that the Funds had met their investment objectives consistently since their relevant inception dates. Based on this review, the Board concluded that the nature, extent and quality of services to be provided by Rydex Investments to the Funds under the Advisory Agreement were appropriate and continued to support the Board's original selection of Rydex Investments as investment adviser to the Funds. FUND EXPENSES AND PERFORMANCE OF THE FUNDS AND RYDEX INVESTMENTS The Board reviewed statistical information prepared by Rydex Investments regarding the expense ratio components, including actual advisory fees, waivers/reimbursements, and gross and net total expenses of each Fund in comparison with the same information for other funds registered under the 1940 Act determined by Rydex Investments to comprise each Fund's applicable peer group. Because few funds seek to provide unlimited exchange privileges similar to those of the Funds (other than the Core Equity Fund, Sector Rotation Fund, Absolute Return Strategies Fund, and Hedged Equity Fund), each Fund's applicable peer group is generally limited to the funds of two unaffiliated mutual fund families. In addition, the Board reviewed statistical information prepared by Rydex Investments relating to the performance of each Fund, as well as each Fund's ability to successfully track its benchmark over time, and a comparison of each Fund's performance to funds with similar investment objectives for the same periods and to appropriate indices/benchmarks, in light of total return, yield and market trends. The Board further noted that despite the unique nature of the Funds, the peer fund information presented to the Board was meaningful because the peer funds' investment objectives and strategies were closely aligned with those of the Funds. The Board noted that most of the Funds either outperformed their peer funds or performed in line with them over relevant periods. The Board also noted that the investment advisory fees and overall expenses for the Funds were generally lower than or in line with the investment advisory fee rates and overall expenses of the peer funds. Based on this review, the Board concluded that the investment advisory fees and expense levels and the historical performance of the Funds, as managed by Rydex Investments, as compared to the investment advisory fees and expense levels and performance of the peer funds, were satisfactory for the purposes of approving the continuance of the Advisory Agreement. COSTS OF SERVICES PROVIDED TO THE FUNDS AND PROFITS REALIZED BY RYDEX INVESTMENTS AND ITS AFFILIATES The Board reviewed information about the profitability of the Funds to Rydex Investments based on the advisory fees payable under the Advisory Agreement for the last calendar year. Rydex Investments also presented the Board with material discussing its methodology for determining the level of advisory fees assessable to the Funds. The Board analyzed the Funds' expenses, including the investment advisory fees paid to Rydex Investments. The Board also reviewed information regarding direct revenue received by Rydex Investments and ancillary revenue received by Rydex Investments and/or its affiliates in connection with the services provided to the Funds by Rydex Investments (as discussed below). The Board also discussed Rydex Investments' profit margin as reflected in Rydex Investments' profitability analysis and reviewed information regarding economies of scale (as discussed below). Based on this review, the Board concluded that the profits to be realized by Rydex Investments and its affiliates under the Advisory Agreement and from other relationships between the Funds and Rydex Investments and/or its affiliates, if any, were within the range the Board considered reasonable and appropriate. ECONOMIES OF SCALE In connection with its review of the Funds' profitability analysis, the Board reviewed information regarding economies of scale or other efficiencies that may result from increases in the Funds' asset levels. The Board noted that the Advisory Agreement for the Funds did not provide for any breakpoints in the investment advisory fee rates as a result of increases in the asset levels of such Funds. The Board also noted that though Rydex Investments' assets under management were significant, the amount is spread among more than 95 Funds. Further limiting the realization of economies of scale, is the ability of shareholders of a majority of the Funds to engage in unlimited trading. The Board also reviewed Rydex Investments' historic profitability as investment adviser to the Funds and determined that reductions in fee rates or additions of breakpoints were not warranted at this juncture. Based on this review, the Board, recognizing its responsibility to consider this issue at least annually, concluded that there are limited economies of scale to share with the Funds' shareholders. 28 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT OTHER INFORMATION (CONCLUDED) - -------------------------------------------------------------------------------- OTHER BENEFITS TO RYDEX INVESTMENTS AND/OR ITS AFFILIATES The Board noted that Rydex Investments reports its use of soft dollars to the Board on a quarterly basis, as well as any portfolio transactions on behalf of the Funds placed through an affiliate of the Funds or Rydex Investments pursuant to Rule 17e-1 under the 1940 Act. The Board concluded that any such ancillary benefits would not be disadvantageous to the Funds' shareholders. Based on the above analysis, the Board determined that the Advisory Agreement, including the investment advisory fee rates thereunder, are fair and reasonable in light of all relevant circumstances and concluded that it is in the best interest of the Funds and their shareholders to continue the Advisory Agreement. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 29 INFORMATION ON BOARD OF TRUSTEES AND OFFICERS - -------------------------------------------------------------------------------- A Board of Trustees oversees all Rydex Investments, in which its members have no stated term of service, and continue to serve after election until resignation. The Statement of Additional Information includes further information about Fund Trustees and Officers, and can be obtained without charge by calling 1-800-820-0888. All Trustees and Officers may be reached c/o Rydex Investments, 9601 Blackwell Rd., Suite 500, Rockville, MD 20850. TRUSTEES AND OFFICERS LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - ------------------------------ ----------------------------------- ----------------------- CARL G. VERBONCOEUR* Rydex Series Funds - 2004 110 Trustee, President (1952) Rydex Variable Trust - 2004 Rydex Dynamic Funds - 2004 Rydex ETF Trust - 2004 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Chief Executive Officer of Rydex Fund Services, Inc., PADCO Advisors, Inc., PADCO Advisors II, Inc., and Rydex Distributors, Inc. (2003 to present); Executive Vice President of Rydex Fund Services, Inc. (2000 to 2003); Vice President of Rydex Fund Services, Inc. and Rydex Distributors, Inc. (1997 to 2000) ----------------------------------- MICHAEL P. BYRUM* Rydex Series Funds - 2005 110 Trustee, Vice President and Rydex Variable Trust - 2005 Secretary (1970) Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2004 to present); Vice President of Rydex Series Funds (1997 to present); Vice President of Rydex Variable Trust (1998 to present); Vice President of Rydex Dynamic Funds (1999 to present); Vice President of Rydex ETF Trust (2002 to present); President and Trustee of Rydex Capital Partners SPhinX Fund (2003 to present); President of Rydex Global Advisors (2004 to present); Chief Operating Officer of Rydex Global Advisors and Rydex Distributors, Inc. (2003 to 2004) - ----------------------------------------------------------------------------------------------------- INDEPENDENT TRUSTEES LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - ------------------------------ ----------------------------------- ----------------------- COREY A. COLEHOUR Rydex Series Funds - 1993 110 Trustee (1945) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Senior Vice President of Marketing/Co-Owner, Schield Management Company ----------------------------------- J. KENNETH DALTON Rydex Series Funds - 1995 110 Trustee (1941) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Mortgage Banking Consultant and Investor, The Dalton Group ----------------------------------- JOHN O. DEMARET Rydex Series Funds - 1997 110 Trustee (1940) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired ----------------------------------- 30 | THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT INFORMATION ON BOARD OF TRUSTEES AND OFFICERS (CONCLUDED) - -------------------------------------------------------------------------------- LENGTH OF SERVICE NAME, POSITION AND AS TRUSTEE NUMBER OF YEAR OF BIRTH (YEAR BEGAN) FUNDS OVERSEEN - ------------------------------ ----------------------------------- ----------------------- WERNER E. KELLER Rydex Series Funds - 2005 110 Trustee (1940) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Retired (2001 to present); Chairman, Centurion Capital Management (1991 to 2001) ----------------------------------- THOMAS F. LYDON, JR. Rydex Series Funds - 2005 110 Trustee (1960) Rydex Variable Trust - 2005 Rydex Dynamic Funds - 2005 Rydex ETF Trust - 2005 Rydex Capital Partners SPhinX Fund - 2003 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: President, Global Trends Investments ----------------------------------- PATRICK T. MCCARVILLE Rydex Series Funds - 1997 110 Trustee (1942) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Founder and Chief Executive Officer, Par Industries, Inc. ----------------------------------- ROGER SOMERS Rydex Series Funds - 1993 110 Trustee (1944) Rydex Variable Trust - 1998 Rydex Dynamic Funds - 1999 Rydex ETF Trust - 2003 Rydex Capital Partners SPhinX Fund - 2005 PRINCIPAL OCCUPATIONS DURING PAST FIVE YEARS: Owner, Arrow Limousine - ----------------------------------- EXECUTIVE OFFICERS NAME, POSITION AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH DURING PAST FIVE YEARS - ------------------------------ ---------------------- NICK BONOS* Vice President and Treasurer of Rydex Series Funds, Vice President and Treasurer (1963) Rydex Variable Trust, Rydex Dynamic Funds, Rydex ETF Trust, and Rydex Capital Partners SPhinX Fund (2003 to present); Senior Vice President of Rydex Fund Services, Inc. (2003 to present); Vice President of Accounting of Rydex Fund Services, Inc. (2000 to 2003) JOANNA M. HAIGNEY* Chief Compliance Officer of Rydex Series Funds, Rydex Chief Compliance Officer and Assistant Variable Trust, and Rydex Dynamic Funds (2004 to Secretary (1967) present); Assistant Secretary of Rydex Series Funds, Rydex Variable Trust, and Rydex Dynamic Funds (2000 to present); Assistant Secretary of Rydex ETF Trust (2002 to present); Secretary of Rydex Capital Partners SPhinX Fund (2003 to present); Vice President of Compliance of Rydex Fund Services, Inc. (2000 to present) * OFFICERS OF THE FUND ARE DEEMED TO BE "INTERESTED PERSONS" OF THE TRUST, WITHIN THE MEANING OF SECTION 2(a)(19) OF THE 1940 ACT, INASMUCH AS THIS PERSON IS AFFILIATED WITH THE ADVISOR. THE RYDEX SERIES FUNDS SEMI-ANNUAL REPORT | 31 - -------------------------------------------------------------------------------- This page intentionally left blank. - -------------------------------------------------------------------------------- This page intentionally left blank. [LOGO] RYDEXINVESTMENTS Essential for modern markets(TM) 9601 Blackwell Road, Suite 500 Rockville, MD 20850 www.rydexinvestments.com 800-820-0888 RSER-SEMI-0905X0306 ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF 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) Based on their evaluation on November 30, 2005, the President (principal executive officer) and the Treasurer (principal financial officer) of the Rydex Series Funds (the "Trust") believe that there were no significant deficiencies in the design or operation of the internal controls of the Trust or Rydex Global Advisors ("RGA"), the investment advisor and manager of the Trust, or Rydex Distributors, Inc. ("RD"), which acts as distributor for the Trust, including disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) which would have adversely affected the ability of the Trust or RGA on behalf of the Trust, to record, process, summarize, and report the subject matter contained in this Report, and the President and Treasurer of the Trust have identified no material weaknesses in such internal controls on behalf of the Trust. There was no fraud, whether or not material, involving officers or employees of RGA, RD, or the Trust who have a significant role in the Trust's internal controls, including disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) that has come to the attention of the Advisor or the officers of the Trust, including its President and Treasurer. (b) There were no significant changes in the Trust's or RGA's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(2) Separate certifications by the President (principal executive officer) and Treasurer (principal financial officer) of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are attached. (b) A certification by the registrant's President (principal executive officer) and Treasurer (principal financial officer) as required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)) is attached. EX.-12(a)(2)(i) CERTIFICATIONS I, Carl G. Verboncoeur, certify that: 1. I have reviewed this report on Form N-CSR of Rydex Series Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees. (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 1, 2005 /S/ Carl G. Verboncoeur ----------------------- Carl G. Verboncoeur, President EX.-12(a)(2)(ii) CERTIFICATIONS I, Nick Bonos, certify that: 1. I have reviewed this report on Form N-CSR of Rydex Series Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees: (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 1, 2005 /S/ Nick Bonos -------------------------- Nick Bonos, Vice President & Treasurer EX.-12(b)(i) CERTIFICATIONS I, Carl G. Verboncoeur, President of Rydex Series Funds (the "Trust"), certify that: 1. The Form N-CSR of the Trust (the "Report")fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. A signed original of this written statement required by Section 906 has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request. Dated: December 1, 2005 /S/ Carl G. Verboncoeur ----------------------- Carl G. Verboncoeur, President EX.-12(b)(ii) CERTIFICATIONS I, Nick Bonos, Vice President and Treasurer of Rydex Series Funds (the "Trust"), certify that: 1. The Form N-CSR of the Trust (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust. A signed original of this written statement required by Section 906 has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request. Dated: December 1, 2005 /S/ Nick Bonos -------------------------- Nick Bonos, Vice President & Treasurer 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/ Carl G. Verboncoeur ------------------------------ Carl G. Verboncoeur, President Date December 1, 2005 ---------------- 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/ Carl G. Verboncoeur ------------------------------ Carl G. Verboncoeur, President Date December 1, 2005 ---------------- By (Signature and Title)* /S/ Nick Bonos --------------------------------------- Nick Bonos, Vice President & Treasurer Date December 1, 2005 ---------------- * Print the name and title of each signing officer under his or her signature.